While the improving U.S. economy remains the engine of growth for the world economy, an underlying trend involving "huge imbalances and risks" should be cause for serious alarm, Paul Volcker warned Feb. 11 during a speech on campus. Americans have virtually no savings, the former chairman of the Federal Reserve said, and the nation is consuming more than it is producing. Furthermore, Social Security and Medicare are threatened by the retirement of millions of baby boomers and skyrocketing health care costs. More broadly, he continued, the world economy is lopsided.

"Altogether, the circumstances seem as dangerous and intractable as I can remember," Volcker said during a keynote address at the second annual summit of the Stanford Institute for Economic Policy Research. "But no one is willing to understand [this] and do anything about it."

Volcker spoke at the end of a daylong conference that attracted about 450 corporate leaders, entrepreneurs, policymakers and academics. The event included discussions on the stability of the global economy, the U.S. economic outlook and the role of the Internet in helping to level the competitive playing field worldwide. The conference also featured sessions on outsourcing, Medicaid and Medicare, technology policy and the Sarbanes-Oxley Act, which was implemented in 2002 to restore investor confidence in corporate America following a series of bankruptcies and far-reaching accounting scandals.

During a morning session, William J. Perry, a former secretary of defense and a senior fellow at the Stanford Institute for International Studies, gave a chillingly stark assessment of the crisis of terrorism that was reinforced by George Shultz, a former secretary of state.

"I fear that we're headed toward an unprecedented catastrophe where a nuclear bomb is detonated in an American city," Perry said. "The bomb will not come in a missile at the hands of a hostile nation. It will come in a truck or a freighter at the hands of a terror group."

Perry, who holds the Michael and Barbara Berberian Professorship, said the "awesome military capability" of the United States has had unintended consequences in that it has increased the incentive for a hostile power, unable to compete in conventional warfare, to acquire weapons of mass destruction and launch terror attacks against America. U.S. military superiority is not particularly effective against such tactics, he said. "There exist terror groups, of which al Qaeda is the most prominent, that have the mission, the intent to kill Americans," Perry said. "They have the capability to do so; they have the resources to do so." A truly nightmare scenario would involve a terror group using nuclear weapons acquired clandestinely, he said: "After 9/11 that threat seems all too real."

Such a catastrophe is preventable, but the United States is not taking the necessary measures to avert it, Perry warned. Important steps should include a major expansion of the Nunn-Lugar Cooperative Threat Reduction Program with the support the G-8 group of industrialized nations. The program was created in 1991 to reduce the threat posed by the legacy of the Soviet nuclear arsenal and succeeded in dismantling and destroying weapons in Kazakhstan, Ukraine and Belarus. Furthermore, Perry said, a clear strategy of "coercive diplomacy" should be used against North Korea and Iran, followed by a major diplomatic initiative to convince other nuclear powers that the threats posed by terrorists are real and not just directed at Americans. "While America must show real leadership in dealing with this problem, [it] cannot deal with it alone," he said.

Shultz, the Thomas W. and Susan B. Ford Distinguished Fellow at the Hoover Institution, said the United States faces a huge problem in combating Islamic radicals intent on using terror to achieve their goals. "Eventually, what they want is to change the way the world works by creating a unified Islamic theocratic state," he said. "It's a worldwide agenda."

Shultz argued that the United States must help supporters of mainstream Islam understand the fundamental nature of the problem so they will take action against the radicals themselves.

"That's why Iraq is of such overwhelming importance," he said. "Here we have a country in the heart of the Middle East where there is a chance. If Iraq can emerge as a sensibly governed country--that's a gigantic event in the Middle East and in this war on terror. Our enemies recognize that just as well as we do, and that's why we're having so many problems."

Other measures that Shultz said should receive greater support include efforts to set up independent media in countries such as Iraq, as well as a revival and expansion of the U.S. diplomatic service, which he said was allowed to atrophy after the end of the Cold War. "We have developed an awesome military capability," he said. "We need a diplomatic capability that is as every bit as good." Shultz also stressed the need to reduce U.S. dependence on foreign oil. "We are out of our cotton-picking minds not to be doing much, much more to figure out how to use much, much less oil," he said to applause from the audience.

In the afternoon, Thomas Friedman, a columnist at the New York Times, also called for greater efforts to develop alternative energy supplies. This should be the "moon shot of our generation," he said.

Friedman discussed how the convergence of personal computers, cheap telecommunication and workflow software has changed the way the world works. In his upcoming book, The World Is Flat: A Brief History of the 21st Century, Friedman explained that the world has shrunk to the point where individuals, not countries or companies, are increasingly able to think and act globally. "And it's not just a bunch of white Westerners," he said. "It's going to be driven by individuals of every color of the rainbow."

Friedman told the audience that these technological advances quietly unfolded just as the 9/11 terror attacks, the Enron collapse and the dot-com bust grabbed America's attention. "People thought globalization was over but actually it turbo-charged globalization; it drove it overseas," he said. "9/11 completely distracted our administration, and then there was Enron. We have hit a fundamentally transformative moment and no one is talking."

In this new scenario, people anywhere in the world will be able to "innovate and not emigrate" if they have the required skills, Friedman said. This means that engineers in India and China will be able to compete on a level playing field with people in this country. "When the world goes flat, everything changes," he said.

To address this challenge, Friedman said the United States must radically improve science, mathematics and engineering education and encourage young people to enter these fields. "We're not doing that," he said. "In the next two years, five years, it won't matter. In 15 years, which is the time it takes to build an engineer, it will matter. We will not be able to sustain our standard of living."

One spring morning in 2004, Professor Steven Kurtz of the State University of New York (SUNY), Buffalo campus, woke to the horrid discovery that his wife of twenty years had died overnight from a heart attack. He called 9-1-1 for emergency services. Paramedics arriving at the Kurtz home noticed technical equipment that would normally only be found in a clinical or research laboratory. If the emergency responders had not been suspicious and had not acted on those suspicions, it would have been worrisome.

What happened later--the investigation of Kurtz and colleagues by the U.S. Department of Justice and the Federal Bureau of Investigation's (FBI's) Joint Task Force on Terrorism under bioterrorism statues--might have more worrisome implications for both academic research and limiting the threat of bioterrorism.

(To read the article, follow the publication link below.)

Seriously studied for almost sixty years, nothing would seem better understood than the effects and terrible consequences of the use of nuclear weapons. Yet, surprisingly, for decades, one far-reaching effect--the mass fire damage caused by "firestorms"--was neither examined in depth nor widely understood. This matters because, for modern nuclear weapons, under almost all conditions and for many targets of interest, the range of devastation from mass fire substantially exceeds that of damage from blast. Once mass fire began to be studied analytically and through reanalysis of empirical experience, the quite well-developed findings were not widely accepted. There may be somewhat greater acceptance now, but, when it comes to nuclear operations, understanding by physicists is not enough. Knowledge has to be incorporated into organizational procedures, specifically, the algorithms used in strategic nuclear war planning.

For complete article, see Physics and Society: "Underestimating the consequences of use of nuclear weapons: Condemned to repeat the past's errors?"

There is no way to deal with the policy and the moral issues related to the use of nuclear weapons without understanding the technical background, at least to the extent that (as I tell students), the politicians representing them, their staff, and the executive leading private companies involved must understand them. The technical knowledge is essential in itself and it also provides a common basis for broader discussion. There are a few major topics under the heading of nuclear issues, and each has an underlying technical component. The dangers are nuclear terrorism, launch of a nuclear weapon owing to warning system failure, and nuclear war, in any of several forms. The positive side includes nuclear energy if it is done right, nuclear medicine and industrial applications.

James D. Fearon is the new Theodore and Frances Geballe Professor in the School of Humanities and Sciences, an endowed position.

The award, approved by the University Board of Trustees, came as a surprise to the political science professor. "I had no idea I was being considered for it," he said. "I'm extremely honored."

Fearon "is a tremendous colleague who contributes a great deal to CISAC with his great depth in a diverse set of problem issues including civil wars, ethnic conflict, and arms control regimes," said Scott Sagan, CISAC co-director.

"Jim is enormously deserving of this honor," said Terry Moe, political science department chair, in an announcement to the department.

Among Fearon's previous honors include his election in 2002 as a fellow in the American Academy of Arts and Sciences and a 1999-2000 fellowship at the Center for Advanced Study in the Behavioral Sciences. He also won the International Studies Association's 1999 Karl Deutsch Award, "presented on an annual basis to a scholar under the age of forty or within ten years of the acquisition of his or her doctoral degree who is judged to have made, through a body of publications, the most significant contribution to the study of international relations and peace research."

Fearon's research on civil and interstate wars and ethnic conflict receives frequent recognition. "Explaining Interethnic Cooperation," an article he wrote with political science and CISAC colleague David Laitin, received two annual awards in 1997--for best article in the field of comparative politics and best article in the American Political Science Review. Fearon received the Political Science Association's 1993 Helen Dwight Reid award for best dissertation on international relations, law, and policy. At CISAC Fearon served as principal investigator for a 2001-2003 grant from the William and Flora Hewlett Foundation, supporting "Research and Training in Conflict Prevention and Resolution."

The Theodore and Frances Geballe Professorhip was established in 1990 through gifts from Professor Theodore Geballe, an internationally recognized physicist, and his wife, Frances Koshland Geballe, a member of one of San Francisco's pioneer families. Theodore Geballe joined Stanford's faculty in 1968, established a program in superconductivity and materials physics in the Department of Applied Physics, and served as department chair and director of Stanford's Center for Materials Research. He is the emeritus Sydney and Theodore Rosenberg Professor of Applied Physics and a member of the National Academy of Sciences.

Fearon is the second professor to be named to the endowed chair. His predecessor was Steven Chu, a Nobel laureate in physics, who vacated the chair when he left Stanford last summer for a joint appointment as director of the Lawrence Berkeley National Laboratory and a professor of physics at the University of California, Berkeley.