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Newsweek
08-08-2025
- Business
- Newsweek
Marco Rubio's Quest To Make the State Department Great Again
Twenty-five years ago, the bipartisan Hart-Rudman Commission described the State Department as a "crippled institution." Since then, things have only gotten worse. Traditionally, the State Department's six regional bureaus and their country-specific desks handled the entire world. Over the past 20 years, the department has created dozens of single-issue offices to handle everything from food security and climate change to women's empowerment. Some countries such as Iran, Venezuela, and even Tibet now have dedicated, independent offices. Anyone who has taken a course in economics understands the law of diminishing marginal returns. At some point, the benefit of adding another worker or widget is outweighed by the cost. That is the case at the Department of State. Too many bureaucrats, in too many offices, are chasing too many approvals to get anything done in a timely manner. Lacking the discipline of profit and loss, government bureaucracies will expand according to the resources provided. No bureaucrat was ever promoted for saying "I need a smaller staff." At the height of the Cold War, in 1970, the Department of State had 3,000 Foreign Service officers—the diplomats who staff our embassies abroad and policymaking offices in Washington. Today that number is nearly 14,000. Like a restaurant with too many waiters, the department's policy approval process has become a time-consuming, inefficient maze. Secretary Marco Rubio recently noted that policy memos require more than 40 signatures before hitting his desk. This suffocating "clearance process" inevitably adopts the least controversial course of action, promotes groupthink, and makes the emergence of original ideas nearly impossible. The budget story is hardly better. The department's inflation-adjusted budget has increased by 27 percent in the past decade alone. It would be difficult to argue that the quality of American diplomacy has increased by a similar amount. US Secretary of State Marco Rubio gives a media briefing during the ASEAN Foreign Ministers' Meeting at the Convention Centre in Kuala Lumpur on July 11, 2025. US Secretary of State Marco Rubio gives a media briefing during the ASEAN Foreign Ministers' Meeting at the Convention Centre in Kuala Lumpur on July 11, 2025. Mandel NGAN / POOL / AFP/Getty Images Marco Rubio is not the first secretary of state to realize that his department needed serious reform. Hillary Clinton launched the Quadrennial Diplomacy and Development Review to address systemic problems. Rex Tillerson held listening sessions with employees, developed a reorganization plan, and made streamlining the department a top priority. Mike Pompeo told the Senate Foreign Relations Committee that he intended to simplify the approval process and encourage creativity within the department. All these efforts faced stiff resistance from a variety of vested interests in the State Department, Congress, and Washington think tanks. Progress was minimal. Secretary Rubio is the first to take effective action. He is rebuilding the professional diplomatic service and getting back to basics: Reducing unnecessary bureaucracy, streamlining decisionmaking, and focusing on core national interests. Specifically, Rubio has folded USAID into the State Department, something that countries like Australia and the U.K. did years ago. He has placed many of USAID's responsibilities with the newly reenergized regional bureaus, ensuring that assistance will be aligned with policy. He has closed many independent offices while preserving country desks, American citizen services, and diplomatic security functions. While 15 percent of the D.C. workforce was released, overall staffing is down only 2 percent and core functions have been preserved. Reactions to Rubio's reforms have been mixed. The former director general of the Foreign Service, Linda Thomas-Greenfield, has called the layoffs "cruel and unacceptable." Did she and other critics think it was cruel to lay off construction workers when President Joe Biden canceled the Keystone Pipeline? Rubio's leadership team cut only 1,300 out of a workforce of 27,000 U.S. civil servants and Foreign Service personnel. A much larger number departed government service under a generous voluntary program—offered not once, but twice—that provided up to six months of paid administrative leave. This strikes us as the antithesis of callousness. Taking the opposite view of these critics is the nonpartisan Ben Franklin Fellowship, of which we are both members. Composed of current and retired foreign affairs professionals, the fellowship has long supported American sovereignty over globalization, meritocracy over DEI, and the careful stewardship of resources over continuous government growth and budget deficits. A few weeks ago, an anonymous poem circulated in the State Department. Entitled, "Twas the Night Before Layoffs," it reads in part: And far above it, in paneled repose, The Secretary cackled, indifferent, composed... 'Too slow, too global, too nuanced, too woke, This place needs a purge, not another soft poke.' Ben Franklin Fellows would tend to agree. Whether one sides with Thomas-Greenfield or the Ben Franklin Fellows, one thing is certain: Effective diplomacy remains essential to American security. To deliver it, the State Department will need to reassert itself, clearly define its competitive advantage over other agencies, and improve its methods of delivery. That is now happening. Secretary Rubio is constructing a Department of State where groupthink is out and intellectual rigor is in; where DEI is replaced with merit; and where training focuses on winning in a tough world. He owes the nation nothing less. David H. Rundell is a former Chief of Mission at the American Embassy in Riyadh and author of Vision or Mirage, Saudi Arabia at the Crossroads. Ambassador Michael Gfoeller is a former Political Advisor to the U.S Central Command and member of the Council on Foreign Relations. Together they have more than fifty years of diplomatic service. Both are members of the Ben Franklin Fellowship. The views expressed in this article are the writers' own.
IOL News
04-08-2025
- Business
- IOL News
Business Leadership SA calls on Ramaphosa to establish trade crisis committee amid US tariff hike
Business Leadership South Africa has urged President Ramaphosa to establish a trade crisis committee in response to the steep US tariff hike, warning of the potential impact on jobs, investment, and economic stability. Image: Mandel NGAN / AFP In response, the DTIC describes the Export Support Desk as a vital lifeline for exporters navigating the fallout from the escalating trade tensions. "The Department of Trade, Industry and Competition (the dtic) has established an Export Support Desk, which will serve as a direct point of contact for companies affected by the U.S. tariff hike," the department said. "Exporters are encouraged to engage directly with the Export Support Desk and also to visit the dtic website regularly for updates and support mechanisms". Meanwhile, Business Leadership South Africa CEO Busisiwe Mavuso has called for President Cyril Ramaphosa to establish a dedicated trade crisis committee to coordinate the country's response to the looming US tariffs. "A standing crisis committee, consisting of business leaders and government officials from key departments, should be established to ensure rapid information flow and coordinated efforts,". Mavuso said. "I encourage the president to establish a Trade Crisis Committee that brings together business leaders and key government officials to jointly chart a path forward. This committee must include National Treasury. We already have proven crisis response tools that were developed for Covid-19 and the 2021 KwaZulu-Natal unrest" IOL News [email protected] Get your news on the go, click here to join the IOL News WhatsApp channel
Newsweek
02-07-2025
- Politics
- Newsweek
The 1600: R.I.P. U.S.A.I.D.
x Mandel NGAN / AFP/Getty Images The Insider's Track Good morning, How is it these short weeks always feel longer than normal weeks? Just think... under my administration, we'd all be on the back nine of our federally mandated Freedom Weeks holiday right now... So nearly 100 emails later, I think I have responded to everyone who wrote in to boo/cheer my rant against the Boomers. The emails were actually not as bad as I feared. Thank you guys for mixing it up with me. Keeps things interesting. Today I was going to discuss the latest developments with the tax bill, which has somehow managed to balloon by hundreds of billions of dollars in the hands of the Senate. They're supposed to be the fiscally responsible chamber of Congress! Politico has a good read this morning examining how this legislation has changed, if you're interested. But something else happened yesterday that got virtually no attention which I wanted to highlight. U.S.A.I.D. is officially D.E.A.D. As of July 1, the international aid organization has ceased its job of doling out foreign assistance, and whatever remains of the gutted agency is being folded into State. Marco Rubio made the announcement by way of a post on Substack. Yes, the State Department is on Substack. (Aside: this White House is putting on a masterclass in political communications strategy. The media doesn't like to talk about it because it reminds people how irrelevant we've become when the administration can get out its message without needing to go through us. But Trump has rewritten the playbook for presidential comms, and whoever comes next will have to operate under the rules of this new world). Back to Marco. His post on the end of U.S.A.I.D., titled Making Foreign Aid Great Again, is worth the quick read. His thesis is essentially that the agency got too bloated, with a "near-infinite taxpayer budget" and little to show for it. The piece is very revealing for how the admin thinks America's role in the developing world should be. Here's the line that really stuck out to me: On the global stage, the countries that benefit the most from our generosity usually fail to reciprocate. For example, in 2023, sub-Saharan African nations voted with the United States only 29 percent of the time on essential resolutions at the UN despite receiving $165 billion in outlays since 1991. That's the lowest rate in the world. Over the same period, more than $89 billion invested in the Middle East and North Africa left the U.S. with lower favorability ratings than China in every nation but Morocco. This idea that our generosity needs to be "reciprocated" in the form of UN votes is new. Where the hell did that come from? Seriously? And could it be that the reason the US has such unfavorables in the Middle East and North Africa is less about the aid we give them and more about the wars we can't stop involving ourselves in? As a normal person, I don't look at every way my tax dollars are spent as a zero-sum "what did I get in return" proposition. I don't sit around counting how many times Botswana voted differently from the US to determine whether we should provide them with HIV meds they wouldn't otherwise get. It's just a very cold, Randian way of looking at the world. Having a robust foreign aid operation is about soft power and influence. But it's also just morally the right thing to do when you're the richest, most powerful country to ever exist. Is there waste and abuse? Sure, there always is. Did U.S.A.I.D. suffer from mission creep? Sure. We joked back when they first started gutting it about all the ridiculous programs the agency was funding (promoting financial literacy for women in Afghanistan was my personal favorite). But terminating the entirety of America's foreign humanitarian workforce, as the shuttering of U.S.A.I.D. effectively does, is a moral abomination in my opinion. Most Americans won't even notice, but it will have real-world impacts. A former U.S.A.I.D. executive wrote in the NYT this week about how we spent $2B in 2022 to respond to the drought and famine in the Horn of Africa, and in doing so probably saved 2 or 3 million lives. Our aid there translated to $6 a year in taxes for the average US household—or less than I paid for that iced coffee over the weekend, which I didn't even finish. The WaPo has a devastating piece of reporting about how doctors in Sudan are already seeing children—babies!—die because they can't get antibiotics that were coming from the US. You can hem and haw about why other countries in Africa aren't helping their neighbors, or why other big developed nations are so much less generous than us. But the fact is we always have been. And we did it without asking for anything in return or trying to justify it as an expenditure. That means something. Or at least it did. The Rundown With only days remaining before the 90-day pause on President Donald Trump's Liberation Day tariffs expires, the administration has yet to unveil even a fraction of the trade deals that were promised at the outset. Members of his cabinet initially aimed to secure "90 deals in 90 days," but are now poised to fall short of this goal, having only secured one bona fide deal, a single set of preliminary agreements, while hinting that a handful more are on their way. Read more. Also happening: Trump-Musk: Elon Musk has appeared to ease his feud with President Trump after praising his foreign policy achievements. The Tesla and SpaceX CEO said Trump should get "credit where credit is due" after the White House announced that Israel had agreed to a 60-day ceasefire in Gaza. Here's the latest. Iran nuclear decision: Iranian President Masoud Pezeshkian signed a law suspending his country's cooperation with the International Atomic Energy Agency, the U.N.'s nuclear watchdog, state media reported. "We are aware of these reports," an IAEA spokesman told Newsweek. "The IAEA is awaiting further official information from Iran." Read more. This is a preview of The 1600—Tap here to get this newsletter delivered straight to your inbox.
Forbes
15-04-2025
- Business
- Forbes
When Buy-And-Hold Becomes A Retirement-Sapping Taxable Event
TOPSHOT - The dome of the US Capitol is seen at dusk in Washington, DC on November 13, 2023. (Photo ... More by Mandel NGAN / AFP) (Photo by MANDEL NGAN/AFP via Getty Images) While there's no evidence that Albert Einstein uttered the quip long associated with him about compound returns as the '8th Wonder of the World,' it's not unreasonable to imagine the genius wit saying something just like that. When it comes to savings, compounding has wondrous qualities that become magical over time. That's why the patient investor can combine prudence with time to become a well-to-do retiree. As investor Barry Ritholtz pointed out in his recently released book How Not To Invest, compounding easily papers over a multitude of investment errors, including a propensity to buy at the top of every market. What Ritholtz found via empirical study is that over long stretches of time, the returns enjoyed by the investor prone to buy just ahead of market declines and corrections does almost as well as the proverbial unicorn who routinely buys at market lows. Such is the genius of buying and holding through market downs and ups. These truths rate prominent thought in consideration of how capital gains achieved by mutual funds are presently taxed. While the funds themselves don't pay taxes on gains realized through sales, the individual investors in their funds do. That's the why behind the title of this opinion piece. Even when mutual fund investors intend to hold their shares in the fund for the long-term, they pay annual capital gains taxes as though they're actively trading. Explained more plainly, gains realized by the fund managers are paid for in taxes by the smaller, frequently retail investors in the fund. Stop and think about this. On its face, the tax shifting that this enables exists as a penalty placed on small investors who wisely outsource their stock-picking to others. Outsourcing is crucial precisely because investing is best left to the experts. To invest for oneself is like cutting one's own hair. At the same time, what are investors supposed to do when doing the right thing comes at a cost? Compounding once again reveals magical qualities when matched with time, but if the returns are going to be compromised by taxable event-style trading that is paid for by the retail investor, then the incentive is to still buy and hold, albeit in cutting one's own hair fashion. Thankfully there's a potential fix working its way through Congress. Reps. Beth Van Duyne (R-TX) and Terri Sewell (D-AL) have introduced the Generating Retirement Ownership Through Long-Term Holding (GROWTH) Act to correct what saps the genius of patient, buy-and-hold retirement saving. The GROWTH Act will spare buy-and-hold mutual fund investors annual taxes run up by fund managers, and will instead defer the taxation on realized gains to when the retail investor ultimately sells the shares in the fund. So, while there shouldn't be taxation of any kind on capital gains, the GROWTH Act at the very least corrects a retirement-sapping injustice that neuters the genius of compounding through annual taxation gains realized by fund managers, as opposed to fund shareholders. Enormous effort goes into planning for and saving for retirement. What a mistake to penalize prudence with a tax levied on retirement savers acting with extraordinary prudence. Let's erase a very real bug in the tax code that so substantially chips away at the genius of patient, long-term retirement saving.
