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An Interview with John R. Bolton on the Proper Role of Government

From The Objective Standard, Vol. 6, No. 3.

John R. Bolton is an outspoken advocate of a foreign policy of American self-interest and a domestic policy of free markets and fiscal responsibility. He has spent many years in public service, including a term as the U.S. permanent representative to the United Nations and a term as undersecretary of state for arms control and international security. He is the author of Surrender Is Not an Option (Threshold Editions/Simon & Schuster, 2007) and How Barack Obama Is Endangering Our National Sovereignty (Encounter Books, 2010). Mr. Bolton is currently a senior fellow at the American Enterprise Institute, where he focuses on U.S. foreign and national security policy. I spoke with him on August 29, 2011, just before he announced (to my disappointment) that he would not be running in the 2012 presidential election.  —Craig Biddle

Craig Biddle: Thank you very much for joining me, Ambassador Bolton; it’s an honor to speak with you.

John Bolton: Thank you. Glad to do it.

CB: As a teenager, you found inspiration in Barry Goldwater, whom you praised as “an individualist, not a collectivist.” I take individualism to mean that the individual is sovereign—that he has a right to life, liberty, property, and the pursuit of happiness—and collectivism to mean that he is not—that he is beholden to the state or society and is not an end in himself. Is that what you mean by these terms?

JB: Right, exactly. I think that, in terms of choice of government, what we should look for is a government that enhances the possibility of individual freedom and individual activity and reduces the potential for collective government action. That’s just a broad philosophical statement, but I think that’s what the political battle has been about for many years and particularly right now.

CB: How do individual rights play into that? What is the relation between rights and freedom?

JB: I think that the two are closely related. If you look at how mankind comes into civil society, the individuals bring the rights with them—they’re inherent in their status as human beings and don’t come from the government as a matter of sufferance. So, in a social contract, ideally what you’re looking for is benefits that bring mankind together but also maximize individual liberty. That’s admittedly easier said than done, but that ought to be the preference—to try and find that balance—rather than to assume that the government is going to take a larger and larger role because some people think, number one, that they’re better at making decisions than individual citizens are; and, number two, that it’s a politically convenient way to stay in power—to tax and regulate people in order to “spread wealth” and benefit others.

CB: So you essentially take the same position as the Founders on rights and freedom: We have inalienable rights, and the purpose of government is to protect them.

JB: Exactly, and that, I think, is why they created a government of enumerated powers. We’ve slipped a long way from that point, but that’s not to say that that shouldn’t be what we aspire to return to.

CB: Why do you think we hear so little in politics today about the proper purpose of government and the principle of individual rights?

JB: Well, I think it’s been a long slide away from what the intent of the original framers of the Constitution was. And I think it’s an important task of political leaders—or should be—to return to that. If the only issues are how much taxation is going to be and what the size of the government is, and as many Republicans learned over the years, so-called “me-too” policies are going to inevitably lead to defeat because the statists can always outbid you.

I think that in a time of fiscal crisis, this is the opportune moment to have an adult conversation about what the purpose of government is—a conversation not about how big the size of government programs is going to be, but whether they should exist in the first place.

CB: I want to ask some questions about both foreign and domestic policy. Since you turned to domestic policy there, let’s begin with that. What do you regard as the fundamental cause of America’s economic decline today—crashing markets, skyrocketing unemployment, sheepish investors, and so forth? . . .

JB: I think it’s the increasing role of the federal government in a range of market activities that finally came together in the fall of 2008 and produced the crash.

I attribute a lot of the problem to Fannie Mae and Freddie Mac, and the general idea that they reflected—that you could eliminate risk from mortgage transactions and thereby make them and their shareholders money and not face the consequences. And so from a time when getting a mortgage and buying a house was something that young couples scrimped and saved for—which taught them responsibility with money and encouraged habits of thrift and care with their family budgets—we ended up with government programs that incentivized exactly the opposite.

When the assets of Fannie and Freddie were then sliced and diced and sold throughout the financial system—through many in the private sector who had the same illusion that they could make money without risk—we created the conditions under which the crash finally occurred.

Again, I think that the government’s efforts to fix the problem have simply contributed to perpetuating it in too many cases. So we’re left in a situation where much of the responsibility, I think the predominant amount of the responsibility, for the crash and the failure to recover rests with the government and not the private sector.

CB: So the so-called “moral hazard”—the removal of responsibility for the risks that individuals and financial institutions took, which was created by Fannie and Freddie buying up mortgages in the secondary mortgage market—caused the financial crisis—

JB: And many other things contributed as well. I think, for example, that the notion that many financial institutions were too big to fail was simply wrong. In any event, the government then applied its willingness to save some of them, but not others, in a very erratic form. So it left the people without confidence that the government would actually do what it was doing.

The fact is, there’s a class of people in America who think that capitalism is great when the market is going up but bad when the market is going down. In fact, capitalism is about markets and the allocation of resources and prices based on an aggregate of individual decisions. If you intervene every time there’s a down cycle, pretty soon you’re going to have the government intervening nearly everywhere—which is close to where we are in this country—and the market at that point ceases to function in a way it should function to properly allocate decisions and allow wealth to be created.

So that’s why I think this is an opportune moment for a very fundamental conversation. By decisions over many, many years, the role of the government has gotten bigger and bigger and virtually dominates every sector of the economy. We haven’t had a broad conversation about whether this is appropriate. We did have that discussion in Ronald Reagan’s election in 1980, but it’s gotten completely out of control again in the last ten years.

CB: I’ll say. Now one of the main fundamentals in the marketplace is the price of money, and the Fed has been keeping interest rates very low—which I think is a large part of what caused the crisis. And Bernanke has just promised to keep rates near zero for two more years. What role do you think the Fed’s policy plays in the troubled economy?

JB: I think it’s part of it. I think the Central Bank, and this goes back to Walter Bagehot in Britain in the 19th century, has the function of providing liquidity in certain [situations] where liquidity has become a problem. But, beyond that, it is not the function of the Central Bank to try and fine-tune economic policy generally.

I think that’s one of the problems with the Fed’s pursuit of quantitative easing—the feeling that the government’s ability to launch a fiscal stimulus has been ended so that the Fed needs to step in. I don’t agree with that at all.

I have a fundamental problem with the belief that federal spending is as good [as] or, because of the multiplier effect, even better than private-sector spending. If that were true, we could just give all of our money to the federal government, let them spend it, and we’d have an incredible stimulus.

Government spending can be counterproductive. Government borrowing can crowd out private borrowing and private capital accumulation. So, in effect, the stimulus, which may have a short, one-time positive effect on the economy, wears off very quickly because it’s not producing new capital assets—in effect, it’s just doling out money in the form of pretend government jobs.

The real answer to the problem is to allow the private sector to create wealth. And that means reducing the role of the government once the initial liquidity problem is resolved, not increasing the role of the government.

CB: So you’re an advocate of Say’s Law, that supply constitutes demand, and not Keynesianism, that spending stimulates the economy?

JB: Well, I think Keynesianism is vastly overrated, and I think the notion that government spending is somehow more beneficial than private spending is just wrong. Most government spending, despite what our politicians say, is not investment. It doesn’t lead to the creation of more wealth. It simply channels resources through the government, taking money from one segment of the population and giving it to another.

While, in my view, there’s a role for a safety net for the truly needy, that does not mean the government should have a license to redistribute according to some philosophical notion about equity. I think that’s where President Obama is. And I think that’s a real problem.

CB: Taking the government spending issue a little further, spending and debt levels have gotten to the point now that merely to stop amassing debt, the United States must cut spending by at least 40 percent—some estimates are substantially higher than that. Some politicians and presidential candidates, including Gary Johnson and Ron Paul, seek to cut that percentage not only from domestic programs but also from our military. Given that you oppose gutting our military, where do you think the cuts should come from—specifically, from which programs, departments, and agencies?

JB: Well, I think you start with the proposition that, as Ronald Reagan said, “Defense is not a budget item.” We have to spend what we need, and hopefully spend it wisely, to protect our country.

That’s because economic prosperity and national defense are integrally related. You can’t have economic growth without being able to protect our interests around the world, and you can’t protect those interests if the economy is in free fall.

A dollar well spent on defense is just qualitatively different from a dollar spent in the Agriculture Department or the Labor Department or the Department of Health and Human Services. I acknowledge that there’s fraud and abuse in the Defense Department. Of course there is—it’s a government agency. And we should certainly find it, root it out, and correct it.

But the real difference between defense-related spending and domestic spending has to do with the objective at stake. That is, as even Adam Smith said, the government’s first responsibility is to protect people from foreign attacks.

So, in a fiscal crisis, I think you’ve got to look at pretty much every domestic department to see where you’re going to cut. Some departments, in whole or in part, should be abolished or merged back into other departments, with their responsibilities turned back to the states. I think this includes the entitlement programs. Medicaid, as an example, is something we should look at abolishing at the federal level and giving back to the states, to let them decide what size program they want state by state. I also think Social Security needs to be fundamentally altered. Politicians don’t like to talk about it, but we live in a very different world than when [Social Security] was created during the New Deal. People, thank God, live a lot longer, and that has changed the entire financial dynamic of Social Security.

CB: Let’s turn to foreign policy. The tenth anniversary of 9/11 is upon us, and the government has yet to name the enemy, let alone defeat it. Bush referred to the enemy as “terror” or “evildoers,” and Obama won’t even be that specific. Who or what exactly is the primary enemy of the United States in your view, and what do we need to do to defeat it?

JB: Well, I think there are several really. Radical Islam is the main source of terrorism that we should be concerned about. I remember having a conversation with Secretary Powell the day after 9/11, and saying that it was not terrorism generally that was our enemy. Otherwise, we’d find ourselves worrying about the ETA terrorists in the Basque country and the IRA in Northern Ireland. Radical, politicized Islamists are conducting the terrorism, and we need to keep our eye on that.

I think the proliferation of weapons of mass destruction—nuclear, chemical, and biological—is a threat in and of itself. Rogue states like Iran and North Korea that possess these weapons are dangerous. If [the weapons] were to fall into the hands of terrorists, they’d be even more dangerous. And I think there are longer-term challenges with the rise of an assertive and militarized China, a return to near-belligerence by Russia in the territories of the former Soviet Union, and other threats in our hemisphere—such as Hugo Chavez in Venezuela.

If you’re not willing to look at the range of threats we face and take them seriously—and I don’t think Obama comes even close to doing that in a responsible way—it’s no wonder Americans tend to turn away from foreign affairs. If their president isn’t keeping them informed of the dangers and the risk they face, they have other things to keep them busy. That’s one reason why I’ve considered running for president. For two and a half years now, we have not had national security in the prominent place of our overall political debate that it should be.

CB: The Islamist regime in Iran is known to be, quoting the State Department, “the most active state sponsor of terrorism.” In addition to its past involvement in terrorism against U.S. and Western interests, the regime is currently killing American soldiers in Iraq and Afghanistan, funding Hamas and Hezbollah, aiding Al Qaeda, building nuclear weapons, and so forth—all the while chanting “Death to America” and “Death to Israel.” How serious is this threat, and what should our government do about it?

JB: I think the Iranian threat is very serious for all the reasons you listed, and the Obama administration’s response is utterly inadequate. It still thinks, despite all evidence to the contrary, that it can negotiate Iran out of its nuclear weapons program, out of its support for terrorism. That just isn’t going to happen.

I think we’re increasingly seeing as Iran fishes in troubled waters throughout the Middle East—in Bahrain, in Syria, in Egypt, and Libya—the possibility of the kind of grand confrontation we’ve been hoping to avoid between the Persian Shia Iran and the Sunni Arab territories around it. And such a confrontation is inevitably going to involve the United States.

Iran, for example, is a threat not only because it is on the verge of getting nuclear weapons, but also because if it does, inevitably Saudi Arabia, Egypt, Turkey, and maybe others in the region will get nuclear weapons, too. So in a relatively short period of time, five to ten years, you could see half a dozen states in the Middle East with nuclear weapons. That is a dangerous and unstable situation, to say the least.

So we have a clear threat on a variety of fronts. The administration doesn’t treat them seriously. And people are not aware of how dangerous the situation has become. I do think it’s increasingly obvious, [however], and that’s why I hope the 2012 campaign will give us an opportunity to frame that debate so Americans can decide what they want to do about it.

CB: Following Iran’s fraudulent elections in the summer of 2009, millions of Iranians protested and many were killed, jailed, or disappeared by the regime. What do you think the United States could have done to take advantage of that situation and what should we do now, if anything, to take advantage of the dissidents who are still seeking to overthrow this regime but have gone underground?

JB: Well, I think our policy should have been regime change in Iran for a long, long time. Had we been aiding the opposition to Iran for the last ten years, let’s say, when the fraudulent elections of the summer of 2009 took place, the people in Iran might have been in a position to do something about it.

As it is, they’re just average citizens—they would be considered middle class in Iranian terms—up against the Revolutionary Guards and the Basij militia who are fully prepared to use mortal force against their opponents. In those circumstances, U.S. rhetorical support for the pro-democratic opposition would not be nearly enough; it might, indeed, result in even more bloodshed.

If we are serious about doing something about the regime in Iran, we need support, and it needs to be delivered over a sustained period of time. Regime change is not a policy that you can turn on or off like a light switch. Now some people say, “If America gives the opposition aid, it will discredit them.” My view on that is that it’s a possibility, but we should let the opposition decide if it’ll discredit them. If they don’t want the aid, that’s certainly their business. My suspicion is that they would want it, and we should find out and make it available to them.

CB: Even just technological aid—

JB: Exactly. There are a lot of resources and things we could do to help them do things they’re not able to do, given the enormous power of the government in Iran compared to the average citizen.

CB: I can’t imagine that they would balk at that kind of aid for a moment.

JB: I don’t think so either. But rather than us preemptively capitulating, let’s find out if they want the aid or not.

CB: You’ve said that Syria is effectively a conduit for the Iranian regime to fund terrorist groups—Hamas, Hezbollah, and so forth. Given the revolt against the Assad regime, and in light of the various organizations that would love to gain control of Syria—such as the Muslim Brotherhood—what should America do about this situation?

JB: I think a regime change in Syria should have been our policy for some time as well. Obviously it’s difficult given the Iranian involvement—I think that’s the principal difference between Syria and several other countries in the Arab world. Iran has a vested interest in keeping the Baath Party dictatorship in place, and I think they’re prepared to shed a lot of Syrian blood to keep Assad in power.

So we have to have that in mind. And that’s why, in many respects, I think a policy of regime change in Iran is critical to achieving a regime change in Syria.

CB: The Hudson Institute recently reported that the U.S. State Department is actively supporting efforts by the Muslim Brotherhood to either share power with Assad or replace him. What are your thoughts on that?

JB: Well, I think that’s a disaster, if that is in fact what they are doing. The Muslim Brotherhood has an excellent propaganda capability to assure people that they’re not the threat they once were. That very much remains to be seen. It’s still a radical Islamic philosophy at work there. And I think it’s very dangerous for the United States in the Arab world. I think it actually undercuts those who want democracy, because the Brotherhood really is the paradigm of the kind of organization that believes democracy is one person, one vote, one time.

CB: What is the importance of Israel to America’s self-interest, and what should be our relationship with the Israelis?

JB: America and Israel have much in common, they share many of the same interests and values, Israel has been a reliable ally for a long time, and it is a stable country in the Middle East. We should continue to have a very close relationship with Israel.

Israel’s existence is not the source of turmoil in the Middle East. There are obviously problems that remain from Israel’s formation in 1948. But they’re not Israel’s fault; they’re the fault of opponents in the region who are not reconciled to allowing the state of Israel to live in peace and security.

I think we need to be much more vigilant on behalf of Israel, because in many cases when Israel is attacked in the UN and other places, it’s a surrogate for the United States. We need to recognize that.

CB: I understand that you’re not planning to announce whether you’re running for president until after Labor Day, so in lieu of asking whether you plan to run, I’ll ask this: Which of the Republicans currently running are as pro-American, as principled about national security, as experienced in matters of foreign policy, and otherwise as qualified as you are to be commander in chief of the U.S. military?

JB: [Laughter] That’s a tricky question! I am thinking very seriously about running. I intend to make my decision by Labor Day and announce it shortly thereafter. It’s a very hard decision to make, as I’ve never run for public office before, whereas all the other candidates out there have that experience. But whatever I decide, there’s no doubt in my mind that the importance of national security in the public debate has got to remain a priority. So whether I do it as a candidate or do it in some other way, I’m not going to give up on that issue.

CB: Well, I certainly hope you’ll run. And I hope you’ll factor that last question into your thinking on the matter. Either way, I hope to hear a lot more from you about these issues in the future. Yours is a voice of reason.

JB: Thank you very much. You’re very kind to say that.

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