Great arguments, gents. I'm glad the issue was in play as recently as April. For my shameful absence I can only claim that I've been insanely busy trying to get my manuscript done and into my publisher's hands...on the topic of "applied smart power." (Much of the material is available for review now at my "balanced peacemaking from a Navy SEAL" blog, http://PowerfulPeace.net)
I borrowed from your quotes, Stan, because they describe much of the current troubles. I'm a "Senior Defense Policy Advisor" in my day job, but that doesn't mean I can get buy-in from the policy makers when I urge that we move "beyond jammers and armor." (By this phrase I don't intend to demean the absolute importance of CREW systems and armor where appropriate; I mean that if we don't concurrently pursue longer-term programs of value to change the environment that spawns IEDs and insurgents, we will be forever shackled to a futile spiral of CREW and armor superiority.)
On your Para 1: The higher value methods absolutely do take more time. Between changes of administration and the generally fickle and impatient quality of American political will, many such critical programs survive just barely into adolescence, sometimes just inches from where they would begin to "turn a profit."
Para 2: DoS...ugh. Take so many great and talented people, snarled up with so many apathetic people, all stirred up together in antiquated bureaucratic processes, and see how effective even the most promising program might be. Add a budget one tenth that of DoD and Congressional approval for sharing between them, and the challenges are daunting before you even cross the US border! At a recent book event, Joseph Nye told us Bob Gates (a staunch advocate of soft power initiatives) tried to pipe $20B over to Hillary Clinton for just such purposes. When it reached Congress they saw a windfall of "surplus funds," rerouted half of it, and wrote Hillary a check for $10B.
Finally, Para 3, Part 1: This is so true - the US military (in very general terms) wants to spend money on "real" projects. Even that choice of phrasing indicates the significant bias against what I consider vastly more important initiatives...again, concurrent with "real" programs so we maintain the immediate needs of force protection and mission readiness.
Para 3, Part 2: Smart or soft power absolutely is great "assuming the individuals charged with...know what they are doing or even give a hoot." Sadly, many of those so charged either don't know or don't care; and I blame me and other advocates, not the unwilling themselves. Communicating great new concepts is not the responsibility of the conveyee.
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