Markets are the dominant fact of our lives. They are pervasive and volatile, and yet we continue to be surprised as each peak and valley is upon us.
Last week, we moved to the next phase of the sub-prime mortgage “crisis” as major financial institutions began to succumb to reality, to unwind financial positions and to write-down the value of financial assets. Citibank, Merrill Lynch––the most visible brands in the financial markets––lost billions, and billions more that expected.
How? Just a lot of the same-old, same-old. We have been there so many times over the past quarter century––the Savings and Loan Crisis of the late 1980s, the Japanese market collapse of the early 1990s, the Asian fiscal crisis of the late 1990s, the Dot-com collapse at the beginning of the decade––and each time there are three distinct phases. First, there is the “Gee, it doesn’t get any better than this,” phase.
This is the home-value-as-ATM phase, the NASDAQ hitting 6,000, or the Nikkei nearing 39,000, which was epitomized to me in the late 1990s when a Merrill Lynch broker called our home to propose a product where we would take out a home-equity loan to invest in the stock market. How long had he been a broker? Just a year. This time, the exuberance was manifest in the mortgage markets, where buyers could finance 100% or more of a home purchase, and then pay less than the interest-only cost of the loan for several years.
The problem that these mortgage products claimed to solve is that housing was too expensive, and therefore new products were needed to make things affordable. But the logic was backwards. The housing was too expensive because the financing was too cheap. Take away the financing, sit tight for a while, and the markets will correct. Prices will not stay up if demand dries up. Might take time for people to let go, but reality will set in.
That is the first law of markets. They move. The interesting part of the current crisis is how eager people have been to pronounce how long the correction in the real estate markets will take. This is the “Is it over yet?” phase, and here is a simple rule: If people are still asking if it is over yet, it ain’t over yet. This is the question that keeps people holding on and resisting selling, hoping that the bottom has been reached.
It is only when people give up that the third phase arrives, the vaunted “capitulation" phase. This is when fear sets in, when hope is lost, and when, ironically, it has already become a better time to buy than sell.
In our present financial crisis, the meltdown has not come yet. Some real estate markets will not be hit so hard because they never rose so high, while others, like Manhattan, will not be hit so hard because of exogenous factors. In the case of Manhattan, the plummeting value of the dollar has already driven home prices down over 25%––in Euros––bringing foreign buyers into that market.
The shining star in this financial moment has been the Federal Reserve Bank. Over the past three years, the Federal Reserve has steadily increased the Federal Funds Rate––the rate at which it lends money to member banks and the primary tool that it uses for regulating the pace of economic activity. The Fed was raising rates not as it normally does to subdue economic growth and tame inflation, but for the simple reason that after the collapse of the Dot-com bubble and 9/11 the Fed reduced the Fed Funds Rate to 1.00% from 6.50%, and within the Fed there was great concern that if rates were not raised, they could not be lowered again in the event of a new crisis.
Yes, the logic seems odd––to raise rates for the purpose of being able to lower them––but the fear was real. If there were to be a new crisis––such as the one that is now upon us––and the Fed Funds Rate were still at 1%, the Federal Reserve would have few effective tools for addressing that new crisis and supporting the financial system.
And through it all, Japan loomed as a lesson of how bad things could get if the central bank was left with no tools in the toolbox. Japan, as some might recall, was looming as the new world economic colossus in the late 1980s with their stock market and real estate prices in the stratosphere when the bubble burst and values plummeted by as much as 75%. Faced with price deflation, Japan’s central bankers proved unable to thwart the decade-long recession that ensued––even as they pushed interest rates down to 1/10th of 1%––with devastating social and economic consequences.
Fortunately, in the months ahead, this will not be our challenge. The Federal Reserve retains control over the monetary levers that it needs and unlike the Japanese, American consumers continue to spend money through thick and thin. The difficult choices will be on the regulatory and policy side. Specifically, with a presidential election looming, Washington will be faced with the decisions of how much pain can be tolerated before the bailouts begin.
There will be hard choices ahead, but even the resources of the federal government cannot forestall the pain that comes during a major market decline and new regulation always seems to be designed to address the last crisis rather than the next one. The question that will endure––from one market bubble to the next––is whether, when faced with things that appear to be too good to be true––a no-cost mortgage for example––people might pause for a moment before they sign up and consider that maybe they are.
Monday, October 29, 2007
Saturday, October 27, 2007
Winds of war
For those who might have missed the vanguard of the French New Left back in the day, the Situationists were anarchists who sought to create situations that would engender a response that would provide a critique of the system that they sought to destroy. So one day, they put up posters in the metro with pictures of a man sitting behind his desk, in the crosshairs of a gun, with a caption reading, “Wouldn’t you like to kill your boss today?”
Except, of course, that no one got it. No rash of boss-killings ensued, no national debate on the absurdity of work in the capitalist system. Just more ennui.
Osama Bin Laden, on the other hand, was more effective. Sitting in a cave in North Waziristan, his goal was to drive a wedge between the 1.4 billion Muslims and the West, as a first step toward rebuilding the pan-Islamic caliphate. His method was pure Situationist. He would attack America and sit back and wait for the response. It was not his attack that would create the outcome he sought, but the reaction of his adversary, the reaction of the all-powerful, morally corrupt Americans. They would come after him, and in so doing would go to war on Islamic soil. They would slaughter Muslim women and children in their wake, and those images would be broadcast across the world.
He tried for years before we took the bait. He attacked our embassies in Africa. He attacked the Kobar towers. He attacked the USS Cole, but we did not respond. Finally, with the ranks of Al Qaeda reduced to a few dozen stalwarts, they chose to attack the U.S. homeland in a final effort to prod the Americans to come after him.
Bull’s eye.
Six years later, even as the American military trumpets the defeat of Al Qaeda in Iraq and Dick Cheney declares that Bin Laden has been reduced to irrelevance, Al Qaeda has grown from a few dozen men in a cave to a world-wide movement, and the challenge of bridging Islam and the West has become one of the defining societal challenges of this era.
And now a second front has been joined, and we are being baited once again. Iran is working hard to goad the Bush administration to double down on its strategy of preemption and would be quite pleased with an attack, particularly the discrete assault on nuclear facilities that is contemplated in the western media. A limited strike would be the best of all possible worlds. All the benefit, so little destruction.
The Bush administration has become a wonderful foil for the Iranians. After all, little more than a decade after the revolution that brought the clerics to power, the Guardian Council was faced with a popular movement demanding openness, democracy and secularization. Efforts to repress dissent only increased that momentum of the reformists, as the modern Iran that the Ayatollahs sought to forestall grew in the public imagination.
It was the Axis of Evil rhetoric that gave the Guardian Council the latitude to crack down on reform and elevate Mahmoud Ahmadinejad to the Presidency. Since then, the Iranian’s have played a dangerous game, but pursued their strategy diligently, and Ahmadinejad has played the nuclear and Israel cards skillfully.
The Iranians have two goals in this game. First, and foremost, the regime wants to stay in power. This requires an external threat to the regime that can justify the repression of domestic opposition and undermining of democratic institutions, and engender nationalist support for the regime. For this goal, the Americans could not have served interests of the clerical regime any better. Oil revenues are high, Americans are arrayed along their borders beating the drums of war, and even secular Iranians and Iranian ex-patriots support the regime’s assertion of Iran’s national right to pursue its nuclear program.
Second, the regime desires to assert Shi’a leadership in the Islamic world in its struggles with the West and to counter the ascendancy of Al Qaeda. This is an issue that blends ethnic and sectarian rivalry, with substantial historical resonance. After all, the Shi’a lived under the Sunni boot for more than a millennium until the fall of the Caliphate in the 1920s, only to find a new boot appear in its stead, this one made of British and American leather. This goal requires building the Iranian brand in the minds of the far-flung Islamic nation, the Umma, and has been the purpose behind Iranian support of Hamas and Hezbollah, its assault on the Danish cartoons, its Holocaust rhetoric, and Ahmadinejad’s visit to Columbia University, where he took the West’s verbal assaults and gave the lie to the West’s claims of openness and tolerance.
What could be better now for the Iranian regime than to be attacked by the Americans? What better way to in one moment harden domestic resentments against a common external enemy and build sympathy and support across the Islamic world? What better way to establish Iranian bona fides as the Islamic David standing against the American Goliath?
Where in all of this is the American art of strategy in the world? Why are subtlety and nuance the purview of others? Why do we not consider what happens on day two and day three and day four after we utter our words or launch our spears?
Last month, the Iranians showed the other side of their strategy, when, at the request of Lee Hamilton, Iranian supreme leader Ali Khamenei ordered the release of Halah Esfandiari. Esfandiari, an Iranian-born scholar, had been imprisoned for nine months as a “threat to the Iranian state.” Her comments after her release were notable. When she protested to her chief interrogator that she was not a spy, but just “wrote articles and organized symposia,” the Iranian official replied, “Yes, and that is how it started in Ukraine and Georgia.”
The Iranians care first and foremost about the survival of their regime, and the greatest threat the regime is not guns and bullets, but words and ideas.
Now we are at another moment of decision––when we should be thinking clearly about what strategies will best achieve the goals that we seek––before we launch a new war and once again find ourselves doing the bidding of our adversaries. But even as our adversaries in the world have proven adroit at nuanced strategy and asymmetric warfare, our stance in the world has become more linear and less subtle, more bellicose and less thoughtful.
Unfortunately, bellicosity apparently plays in Peoria, so the winds of war may loom as irresistible. Among the leading Republican candidates, war with Iran has become the new national security shibboleth, and with an eye to the general election Hillary Clinton is marching in lock-step. But behind all of the heated words, is there much thought going on? About day two, about day three or about day four?
How is it that five years into the Iraq war, we might once again succumb to the drumbeat of national security populism? Is it possible that our political class has lost the capacity to think about the implications of their words, to be a little more wise and a little less warrior, and to discern whether they are being manipulated by others more thoughtful and strategic than they?
As we dig our hole deeper and deeper, we should remind ourselves that we are neophytes in this neighborhood. When he was in New York, Ahmadinejad made reference to the invasion of Greece by Darius II, over 2,000 years ago. The Sunni and the Shi’a are playing a complex game of tribe and faith that dates back a millennium. The Turks ruled the region for centuries and are loathe to be dictated to. And the Russians, the French and Brits have been contesting the region since before the battle of Yorktown.
We just might not be as smart as we think we are. And everyone else might know a thing or two. And that would be OK.
Except, of course, that no one got it. No rash of boss-killings ensued, no national debate on the absurdity of work in the capitalist system. Just more ennui.
Osama Bin Laden, on the other hand, was more effective. Sitting in a cave in North Waziristan, his goal was to drive a wedge between the 1.4 billion Muslims and the West, as a first step toward rebuilding the pan-Islamic caliphate. His method was pure Situationist. He would attack America and sit back and wait for the response. It was not his attack that would create the outcome he sought, but the reaction of his adversary, the reaction of the all-powerful, morally corrupt Americans. They would come after him, and in so doing would go to war on Islamic soil. They would slaughter Muslim women and children in their wake, and those images would be broadcast across the world.
He tried for years before we took the bait. He attacked our embassies in Africa. He attacked the Kobar towers. He attacked the USS Cole, but we did not respond. Finally, with the ranks of Al Qaeda reduced to a few dozen stalwarts, they chose to attack the U.S. homeland in a final effort to prod the Americans to come after him.
Bull’s eye.
Six years later, even as the American military trumpets the defeat of Al Qaeda in Iraq and Dick Cheney declares that Bin Laden has been reduced to irrelevance, Al Qaeda has grown from a few dozen men in a cave to a world-wide movement, and the challenge of bridging Islam and the West has become one of the defining societal challenges of this era.
And now a second front has been joined, and we are being baited once again. Iran is working hard to goad the Bush administration to double down on its strategy of preemption and would be quite pleased with an attack, particularly the discrete assault on nuclear facilities that is contemplated in the western media. A limited strike would be the best of all possible worlds. All the benefit, so little destruction.
The Bush administration has become a wonderful foil for the Iranians. After all, little more than a decade after the revolution that brought the clerics to power, the Guardian Council was faced with a popular movement demanding openness, democracy and secularization. Efforts to repress dissent only increased that momentum of the reformists, as the modern Iran that the Ayatollahs sought to forestall grew in the public imagination.
It was the Axis of Evil rhetoric that gave the Guardian Council the latitude to crack down on reform and elevate Mahmoud Ahmadinejad to the Presidency. Since then, the Iranian’s have played a dangerous game, but pursued their strategy diligently, and Ahmadinejad has played the nuclear and Israel cards skillfully.
The Iranians have two goals in this game. First, and foremost, the regime wants to stay in power. This requires an external threat to the regime that can justify the repression of domestic opposition and undermining of democratic institutions, and engender nationalist support for the regime. For this goal, the Americans could not have served interests of the clerical regime any better. Oil revenues are high, Americans are arrayed along their borders beating the drums of war, and even secular Iranians and Iranian ex-patriots support the regime’s assertion of Iran’s national right to pursue its nuclear program.
Second, the regime desires to assert Shi’a leadership in the Islamic world in its struggles with the West and to counter the ascendancy of Al Qaeda. This is an issue that blends ethnic and sectarian rivalry, with substantial historical resonance. After all, the Shi’a lived under the Sunni boot for more than a millennium until the fall of the Caliphate in the 1920s, only to find a new boot appear in its stead, this one made of British and American leather. This goal requires building the Iranian brand in the minds of the far-flung Islamic nation, the Umma, and has been the purpose behind Iranian support of Hamas and Hezbollah, its assault on the Danish cartoons, its Holocaust rhetoric, and Ahmadinejad’s visit to Columbia University, where he took the West’s verbal assaults and gave the lie to the West’s claims of openness and tolerance.
What could be better now for the Iranian regime than to be attacked by the Americans? What better way to in one moment harden domestic resentments against a common external enemy and build sympathy and support across the Islamic world? What better way to establish Iranian bona fides as the Islamic David standing against the American Goliath?
Where in all of this is the American art of strategy in the world? Why are subtlety and nuance the purview of others? Why do we not consider what happens on day two and day three and day four after we utter our words or launch our spears?
Last month, the Iranians showed the other side of their strategy, when, at the request of Lee Hamilton, Iranian supreme leader Ali Khamenei ordered the release of Halah Esfandiari. Esfandiari, an Iranian-born scholar, had been imprisoned for nine months as a “threat to the Iranian state.” Her comments after her release were notable. When she protested to her chief interrogator that she was not a spy, but just “wrote articles and organized symposia,” the Iranian official replied, “Yes, and that is how it started in Ukraine and Georgia.”
The Iranians care first and foremost about the survival of their regime, and the greatest threat the regime is not guns and bullets, but words and ideas.
Now we are at another moment of decision––when we should be thinking clearly about what strategies will best achieve the goals that we seek––before we launch a new war and once again find ourselves doing the bidding of our adversaries. But even as our adversaries in the world have proven adroit at nuanced strategy and asymmetric warfare, our stance in the world has become more linear and less subtle, more bellicose and less thoughtful.
Unfortunately, bellicosity apparently plays in Peoria, so the winds of war may loom as irresistible. Among the leading Republican candidates, war with Iran has become the new national security shibboleth, and with an eye to the general election Hillary Clinton is marching in lock-step. But behind all of the heated words, is there much thought going on? About day two, about day three or about day four?
How is it that five years into the Iraq war, we might once again succumb to the drumbeat of national security populism? Is it possible that our political class has lost the capacity to think about the implications of their words, to be a little more wise and a little less warrior, and to discern whether they are being manipulated by others more thoughtful and strategic than they?
As we dig our hole deeper and deeper, we should remind ourselves that we are neophytes in this neighborhood. When he was in New York, Ahmadinejad made reference to the invasion of Greece by Darius II, over 2,000 years ago. The Sunni and the Shi’a are playing a complex game of tribe and faith that dates back a millennium. The Turks ruled the region for centuries and are loathe to be dictated to. And the Russians, the French and Brits have been contesting the region since before the battle of Yorktown.
We just might not be as smart as we think we are. And everyone else might know a thing or two. And that would be OK.
Monday, October 22, 2007
Memories of Billy Rohr
It did not take long for the grumbling to start: “Are the Red Sox ready to become the Yankees?”
A knife to the heart of those whose lives have been defined by the seasonal yearnings and disappointments inherent to the chosen path; a sharp rebuke to those whose own human frailty led them over time to root as much for the defeat of their Nemesis, as for that chimerical moment when their own heroes might emerge triumphant.
A close friend––still warm from the heat of Dustin Pedroia’s night––remarked of what the future might hold for a team whose young roster of Beckett and DiceK, Ellsbury and Papelbon, DelCarmen, Lester and Buccholtz––along with the evening’s diminutive star––have their best years before them, but was quick to add that should they sign A-Rod, she would “have a hard time continuing as a Red Sox fan.”
For such is the life. Once the yearning defines the soul, the conditionality is inevitable. We are fans, after all, not whores. We cannot be bought. After a lifetime of waiting, what is another decade? Better that than debasing the very meaning of the journey.
The Red Sox have won nothing yet this year––thought last night was a glorious night––and just one World Series to redeem the hopes of those who forty years ago saw a season begin with Billy Rohr blanking the Yankees, and who believed that with he and Yaz and Rico and Boomer, Santiago and Lonborg, the future was bright. A young roster can come to naught, as the Conigliaro brothers can attest, as the heroics of Bernie Carbo and Hendu and Pudge can so easily be taken away by Calvin Shiraldi and Johnny Mac.
It is way too soon to rest on one night’s laurels, for this may be Colorado’s year, but we learn to love the moment and to feel the warmth from the moment that Coco Crisp––a name for the ages––crashed into the wall with the ball cradled in his grasp––for Siddhartha Gautama and every Red Sox fan knows that such moments are fleeting. Each must be inhaled and savored for what it is, for the journey itself.
The moment is barely past when we are awoken from our reverie.
Unable to tolerate the moment of joy for Red Sox fans, whose torment they have so enjoyed over the decades, New York writers dig deep for a journalistic Haiku, and strike with full force.
“Are the Red Sox ready to become the Yankees? Are they ready?”
A knife to the heart of those whose lives have been defined by the seasonal yearnings and disappointments inherent to the chosen path; a sharp rebuke to those whose own human frailty led them over time to root as much for the defeat of their Nemesis, as for that chimerical moment when their own heroes might emerge triumphant.
A close friend––still warm from the heat of Dustin Pedroia’s night––remarked of what the future might hold for a team whose young roster of Beckett and DiceK, Ellsbury and Papelbon, DelCarmen, Lester and Buccholtz––along with the evening’s diminutive star––have their best years before them, but was quick to add that should they sign A-Rod, she would “have a hard time continuing as a Red Sox fan.”
For such is the life. Once the yearning defines the soul, the conditionality is inevitable. We are fans, after all, not whores. We cannot be bought. After a lifetime of waiting, what is another decade? Better that than debasing the very meaning of the journey.
The Red Sox have won nothing yet this year––thought last night was a glorious night––and just one World Series to redeem the hopes of those who forty years ago saw a season begin with Billy Rohr blanking the Yankees, and who believed that with he and Yaz and Rico and Boomer, Santiago and Lonborg, the future was bright. A young roster can come to naught, as the Conigliaro brothers can attest, as the heroics of Bernie Carbo and Hendu and Pudge can so easily be taken away by Calvin Shiraldi and Johnny Mac.
It is way too soon to rest on one night’s laurels, for this may be Colorado’s year, but we learn to love the moment and to feel the warmth from the moment that Coco Crisp––a name for the ages––crashed into the wall with the ball cradled in his grasp––for Siddhartha Gautama and every Red Sox fan knows that such moments are fleeting. Each must be inhaled and savored for what it is, for the journey itself.
The moment is barely past when we are awoken from our reverie.
Unable to tolerate the moment of joy for Red Sox fans, whose torment they have so enjoyed over the decades, New York writers dig deep for a journalistic Haiku, and strike with full force.
“Are the Red Sox ready to become the Yankees? Are they ready?”
Saturday, October 06, 2007
The problem of Europe
Two weeks ago, Nicholas Sarkozy launched his most direct assault on the European Central Bank. In the view of the new French President, the ECB’s tight money policies threaten to undermine his efforts to open up the French economic system and stimulate economic growth and liberalization. The ECB policies, Sarkozy suggested, were biased toward Germany’s enduring fear of inflation and against his policies of stimulating growth and international competitiveness.
The rift between Sarkozy and the ECB has been exacerbated by the trading relationship between the Euro, the Dollar and the Chinese Yuan. As the value of the Dollar has collapsed under the weight of massive U.S. current account deficits, the Euro has risen to new heights, while the Chinese currency, which does not trade freely, has only risen modestly. The result has been that European goods have become less competitive in the U.S. market. The ECB can ameliorate this problem, as Sarkozy has suggested, by reducing interest rates––at least in concert with U.S. central bankers––which would stem the pace of the Euro’s rise. But this, the Gnomes of the ECB insist, is not their job. Their job is to fight inflation. They are independent. Go away.
Sensing their inability to move the ECB to act, some European finance ministers have responded to the Euro’s rise by beseeching Ben Bernanke to raise U.S. interest rates to support the Dollar. This, however, is not going to happen. The Federal Reserve just lowered interest rates in response to the sub-prime lending crisis, and any upward move would undermine U.S. markets. The Fed’s mandate is to fight inflation and to support economic growth, and whatever is going on with the Euro is simply not their job.
More to the point, the price of Mephisto shoes might be the symptom, but it is not the problem. The problem is more fundamental. It is the problem of Europe.
The European Union is a nice idea. Like the Iraq War, it is an idea that gained momentum among many constituencies that came to support the same policy, though for different reasons. For some, who saw the emergence of Asia and the United States as two great economic forces, the European Union would create a third trading block to protect the European economies. For others, the EU represented an opportunity to assert Europe as a political counterweight to the United States imperial power in the post-Cold War era. For yet others, the EU was necessary to bind France and Germany together so tightly that a third world war between the historic rivals would become an impossibility.
The reality of creating a European Union has been a tough go. The “domestic” economic strategy of the European Union has mirrored the industrial policy of the United States over the decades. While the United States implemented policies to stimulate economic growth in its poorer states––in the south and in the west––so has Europe invested in the economies of its southern and poorer members. Neo-classical trade theories have been realized, as countries with comparative advantages in labor costs or other attributes have benefited, while growth in the Franco-German heartland has stagnated. Imagine Ireland, Portugal and Spain as the sunbelt of Europe.
However, while the rustbelt gave way in economic and political clout to the sunbelt in the U.S., the rise of new economic powers in Europe threatened the cultural identity of the members, as well as the economies of the older powers. European Unionists have implemented the attributes of nationhood before the participants agreed to become a single nation. They have centralized regulation, asserted legal hegemony and created a single currency, even as the EU constitution has failed to win ratification. The Euro-centrists have said yes, even as the people continue to say no.
In the United States, political union came first, then came the struggle to determine the extent to which the center could impose its will on the member states and undermine local law and custom. As one observer noted, the issue finally came to a head in 1863, when the two sides convened at a small town in Pennsylvania to settle matters. After three days of debate, the supporters of a strong center won the day and the matter was settled.
Sarkozy is raising the central question of how a nation that cannot control their monetary policy can seek to control their future. His policies, his presidency and the ability of France to chart a new economic path––one in which fiscal policy will play a reduced role relative to market forces––depend on a parallel monetary policy that makes capital available to a growing entrepreneurial sector.
Alan Greenspan unwittingly underscored Sarkozy’s point of the important linkage between fiscal and monetary policy during his recent book tour, when he indicated the extent to which he directed monetary policy to support the fiscal policies of the federal administrations. Far from adopting the strict constructionist stance of the current ECB, Greenspan recognized the anti-inflationary impacts of technology and deregulation, and allowed an expansive monetary policy that led to sustained economic growth, even as the Dollar and federal current account deficits might have warranted the tighter monetary stance.
Europe, for anyone who has visited recently, is not what it used to be. The quaint villages are not quite as quaint. The local bakeries are disappearing. Local cultures are ceding to the forces of economic integration. Ironically, it is France’s Hungarian-born President that is raising the central question, not just about whether France can control its economic destiny, but whether, just two years after the French voters rejected the proposed European Constitution, France has already lost its ability, and right, to be La France.
The rift between Sarkozy and the ECB has been exacerbated by the trading relationship between the Euro, the Dollar and the Chinese Yuan. As the value of the Dollar has collapsed under the weight of massive U.S. current account deficits, the Euro has risen to new heights, while the Chinese currency, which does not trade freely, has only risen modestly. The result has been that European goods have become less competitive in the U.S. market. The ECB can ameliorate this problem, as Sarkozy has suggested, by reducing interest rates––at least in concert with U.S. central bankers––which would stem the pace of the Euro’s rise. But this, the Gnomes of the ECB insist, is not their job. Their job is to fight inflation. They are independent. Go away.
Sensing their inability to move the ECB to act, some European finance ministers have responded to the Euro’s rise by beseeching Ben Bernanke to raise U.S. interest rates to support the Dollar. This, however, is not going to happen. The Federal Reserve just lowered interest rates in response to the sub-prime lending crisis, and any upward move would undermine U.S. markets. The Fed’s mandate is to fight inflation and to support economic growth, and whatever is going on with the Euro is simply not their job.
More to the point, the price of Mephisto shoes might be the symptom, but it is not the problem. The problem is more fundamental. It is the problem of Europe.
The European Union is a nice idea. Like the Iraq War, it is an idea that gained momentum among many constituencies that came to support the same policy, though for different reasons. For some, who saw the emergence of Asia and the United States as two great economic forces, the European Union would create a third trading block to protect the European economies. For others, the EU represented an opportunity to assert Europe as a political counterweight to the United States imperial power in the post-Cold War era. For yet others, the EU was necessary to bind France and Germany together so tightly that a third world war between the historic rivals would become an impossibility.
The reality of creating a European Union has been a tough go. The “domestic” economic strategy of the European Union has mirrored the industrial policy of the United States over the decades. While the United States implemented policies to stimulate economic growth in its poorer states––in the south and in the west––so has Europe invested in the economies of its southern and poorer members. Neo-classical trade theories have been realized, as countries with comparative advantages in labor costs or other attributes have benefited, while growth in the Franco-German heartland has stagnated. Imagine Ireland, Portugal and Spain as the sunbelt of Europe.
However, while the rustbelt gave way in economic and political clout to the sunbelt in the U.S., the rise of new economic powers in Europe threatened the cultural identity of the members, as well as the economies of the older powers. European Unionists have implemented the attributes of nationhood before the participants agreed to become a single nation. They have centralized regulation, asserted legal hegemony and created a single currency, even as the EU constitution has failed to win ratification. The Euro-centrists have said yes, even as the people continue to say no.
In the United States, political union came first, then came the struggle to determine the extent to which the center could impose its will on the member states and undermine local law and custom. As one observer noted, the issue finally came to a head in 1863, when the two sides convened at a small town in Pennsylvania to settle matters. After three days of debate, the supporters of a strong center won the day and the matter was settled.
Sarkozy is raising the central question of how a nation that cannot control their monetary policy can seek to control their future. His policies, his presidency and the ability of France to chart a new economic path––one in which fiscal policy will play a reduced role relative to market forces––depend on a parallel monetary policy that makes capital available to a growing entrepreneurial sector.
Alan Greenspan unwittingly underscored Sarkozy’s point of the important linkage between fiscal and monetary policy during his recent book tour, when he indicated the extent to which he directed monetary policy to support the fiscal policies of the federal administrations. Far from adopting the strict constructionist stance of the current ECB, Greenspan recognized the anti-inflationary impacts of technology and deregulation, and allowed an expansive monetary policy that led to sustained economic growth, even as the Dollar and federal current account deficits might have warranted the tighter monetary stance.
Europe, for anyone who has visited recently, is not what it used to be. The quaint villages are not quite as quaint. The local bakeries are disappearing. Local cultures are ceding to the forces of economic integration. Ironically, it is France’s Hungarian-born President that is raising the central question, not just about whether France can control its economic destiny, but whether, just two years after the French voters rejected the proposed European Constitution, France has already lost its ability, and right, to be La France.
Monday, September 10, 2007
Freddy's dead
Bin Laden and Fred Thompson made it official. They both aim to influence the 2008 presidential election.
Bin Laden, in his latest video, offered a message tailored to Democratic and Republican activists alike. First, he offered an end to the war. Second, he offered a massive tax cut and a permanent flat tax of just 2.5%. Blending a message that was overtly part Muhammad and part Chomsky, he asked only that Americans discard their corrupt, corporate-controlled democratic system, and embrace Islam. Small price for a flat tax.
Fred Thompson offered no such message clarity. After six months of planning his entry into the Republican presidential contest, Thompson’s first week on the stump was not encouraging. When right-wing talk show host Sean Hannity popped “The Question,” and asked Thompson why he was running for president and what distinguished him from the other candidates, the newly minted candidate muffed. Well, Sean, the candidate dissembled, I haven’t really thought about it in those terms…
It is an astonishing thing for lay observers of the process to see candidates stumble over The Question, as it would seem to be the single question every candidate knows they are going to be asked. Unlike “How would you get us out of the mess in Iraq?” each candidate can answer this one on their own terms. But when Hannity lobbed the softball his way, Thompson missed.
The depth of the destruction that George W. Bush has done to the Republican Party is evidenced by the lack of an anointed candidate just four months before the first nominating votes are tallied. Not since 1964 have the Republicans had a wide-open contest for the party nomination, as both the party’s famed internal discipline and candidate adherence to the shibboleths––pro-Life, anti-gay, pro-gun, anti-tax, pro-faith––have come undone. Fred Thompson may catch fire, and don the mantle of Reagan that slipped from George Allen's grasp as the word macaca left his lips, but if his first week is any indication, he may never reach the levels of popularity he held before he formally entered the race.
It just isn’t supposed to be this way. The right people have not been consulted. Whether dead, disgusted or indicted, the powerbrokers who are supposed to take care of these things are nowhere to be seen, and the two leading choices for Republican primary voters are a pro-choice, pro-gay, anti-gun, multiple divorcee married to a Jew, and a formerly pro-gay, pro-choice Mormon from a family with a polygamous past.
A choice between Liberal and an Apostate. Just friggin’ great. Now along comes Fred, and he can't say why.
Among the Democratic candidates, message clarity has become the central debate, now reduced to the parsing of single words. Hillary has chosen the mantle of Experience, while Obama has embraced Change. This past week, Hillary showed her Clintonian bloodlines when she took it to Obama by questioning what the meaning of the word Change is, and claiming that she is in fact the candidate offering both Experience and Change.
God help Obama. For surely the game will be up if he loses both words.
The real word that the Clinton campaign is relying on is Inevitability. After staunching Obama’s initial momentum, Hillary now sits around 35-40% among Democratic voters in national polls and holds a 15-20% lead over Obama. In Democratic debates she has been a dominant voice and successfully stoked the emerging sense of inevitability. And it is a strategy that offers increasing returns. The more inevitable she seems, the more likely are others to drop out, temper their rhetorical attacks and pay obeisance to her as the presumptive nominee.
But the funny thing is that the closer people look, the less they seem to like. In Iowa, the first state to put their delegates on the line, five polls taken since August 1st show a very tight race: Clinton 25%, Edwards 25%, Obama 21%, Richardson 12%. Therefore, even as the fires of Inevitability are stoked, on the ground Iowa is a horse race, Nevada and South Carolina--western and southern respectively--are less naturally hospitable terrain for Clinton, and only polling in New Hampshire mirrors the national trends. Accordingly, the prospect looms that the juggernaut could derail in the early weeks of voting, a risk that can be effectively eliminated if Michigan and Florida--states in which her lead exceeds 20%--successfully move forward in the process.
What is most puzzling about the meta-debate between the forces of Experience and the forces of Change, is that Hillary is conceded the mantle of experience, while the best Obama can do is suggest that experience isn’t all it’s cracked up to be, as he proffers Cheney and Rumsfeld as his cases in point. But this is a specious argument. Experience matters deeply in foreign affairs, particularly in a world where our antagonists and counterparts, be they Osama Bin Laden, Ayatollah Ali Khamenei, Vladimir Putin or the Chinese Central Committee, have proven a capacity to think strategically, take a long view of history and see foreign relations a web of complex, interconnected relationships. It would indeed be reassuring to believe that our President was able to see and navigate the world in all its complexities, set forth a vision of the world twenty or thirty years down the road, engage other nations in embracing that future, and lead the world toward that end. To say the experience is not of value seems, somehow, to miss the point.
Even as Hillary is accorded the mantle of Experience, she has in fact held no executive post and stood accountable for her choices in that capacity. Like Obama and Edwards, she is a one-term U.S. Senator and a lawyer with a keen mind. And she was First Lady, and present in the halls of power for eight years. But she was neither the President nor the Vice President, and at best can sell herself as a co-conspirator for the best of her husband’s years.
The experience that Hillary can validly claim, and which should be no small consideration, is her proven ability to withstand the slings and arrows that lie ahead for whichever candidate emerges as the party nominee. From healthcare reform, to the death of Vincent Foster, to the selling of the Lincoln Bedroom, to her husband’s philandering, to the pardoning of Marc Rich, Hillary Clinton has taken the bullets, looked into the camera and never blinked. This is the Experience that Hillary brings as a candidate, and it is no small offering.
But it is not Change.
Perhaps this is what the Iowa voters see. And it is enough to give them pause.
Bin Laden, in his latest video, offered a message tailored to Democratic and Republican activists alike. First, he offered an end to the war. Second, he offered a massive tax cut and a permanent flat tax of just 2.5%. Blending a message that was overtly part Muhammad and part Chomsky, he asked only that Americans discard their corrupt, corporate-controlled democratic system, and embrace Islam. Small price for a flat tax.
Fred Thompson offered no such message clarity. After six months of planning his entry into the Republican presidential contest, Thompson’s first week on the stump was not encouraging. When right-wing talk show host Sean Hannity popped “The Question,” and asked Thompson why he was running for president and what distinguished him from the other candidates, the newly minted candidate muffed. Well, Sean, the candidate dissembled, I haven’t really thought about it in those terms…
It is an astonishing thing for lay observers of the process to see candidates stumble over The Question, as it would seem to be the single question every candidate knows they are going to be asked. Unlike “How would you get us out of the mess in Iraq?” each candidate can answer this one on their own terms. But when Hannity lobbed the softball his way, Thompson missed.
The depth of the destruction that George W. Bush has done to the Republican Party is evidenced by the lack of an anointed candidate just four months before the first nominating votes are tallied. Not since 1964 have the Republicans had a wide-open contest for the party nomination, as both the party’s famed internal discipline and candidate adherence to the shibboleths––pro-Life, anti-gay, pro-gun, anti-tax, pro-faith––have come undone. Fred Thompson may catch fire, and don the mantle of Reagan that slipped from George Allen's grasp as the word macaca left his lips, but if his first week is any indication, he may never reach the levels of popularity he held before he formally entered the race.
It just isn’t supposed to be this way. The right people have not been consulted. Whether dead, disgusted or indicted, the powerbrokers who are supposed to take care of these things are nowhere to be seen, and the two leading choices for Republican primary voters are a pro-choice, pro-gay, anti-gun, multiple divorcee married to a Jew, and a formerly pro-gay, pro-choice Mormon from a family with a polygamous past.
A choice between Liberal and an Apostate. Just friggin’ great. Now along comes Fred, and he can't say why.
Among the Democratic candidates, message clarity has become the central debate, now reduced to the parsing of single words. Hillary has chosen the mantle of Experience, while Obama has embraced Change. This past week, Hillary showed her Clintonian bloodlines when she took it to Obama by questioning what the meaning of the word Change is, and claiming that she is in fact the candidate offering both Experience and Change.
God help Obama. For surely the game will be up if he loses both words.
The real word that the Clinton campaign is relying on is Inevitability. After staunching Obama’s initial momentum, Hillary now sits around 35-40% among Democratic voters in national polls and holds a 15-20% lead over Obama. In Democratic debates she has been a dominant voice and successfully stoked the emerging sense of inevitability. And it is a strategy that offers increasing returns. The more inevitable she seems, the more likely are others to drop out, temper their rhetorical attacks and pay obeisance to her as the presumptive nominee.
But the funny thing is that the closer people look, the less they seem to like. In Iowa, the first state to put their delegates on the line, five polls taken since August 1st show a very tight race: Clinton 25%, Edwards 25%, Obama 21%, Richardson 12%. Therefore, even as the fires of Inevitability are stoked, on the ground Iowa is a horse race, Nevada and South Carolina--western and southern respectively--are less naturally hospitable terrain for Clinton, and only polling in New Hampshire mirrors the national trends. Accordingly, the prospect looms that the juggernaut could derail in the early weeks of voting, a risk that can be effectively eliminated if Michigan and Florida--states in which her lead exceeds 20%--successfully move forward in the process.
What is most puzzling about the meta-debate between the forces of Experience and the forces of Change, is that Hillary is conceded the mantle of experience, while the best Obama can do is suggest that experience isn’t all it’s cracked up to be, as he proffers Cheney and Rumsfeld as his cases in point. But this is a specious argument. Experience matters deeply in foreign affairs, particularly in a world where our antagonists and counterparts, be they Osama Bin Laden, Ayatollah Ali Khamenei, Vladimir Putin or the Chinese Central Committee, have proven a capacity to think strategically, take a long view of history and see foreign relations a web of complex, interconnected relationships. It would indeed be reassuring to believe that our President was able to see and navigate the world in all its complexities, set forth a vision of the world twenty or thirty years down the road, engage other nations in embracing that future, and lead the world toward that end. To say the experience is not of value seems, somehow, to miss the point.
Even as Hillary is accorded the mantle of Experience, she has in fact held no executive post and stood accountable for her choices in that capacity. Like Obama and Edwards, she is a one-term U.S. Senator and a lawyer with a keen mind. And she was First Lady, and present in the halls of power for eight years. But she was neither the President nor the Vice President, and at best can sell herself as a co-conspirator for the best of her husband’s years.
The experience that Hillary can validly claim, and which should be no small consideration, is her proven ability to withstand the slings and arrows that lie ahead for whichever candidate emerges as the party nominee. From healthcare reform, to the death of Vincent Foster, to the selling of the Lincoln Bedroom, to her husband’s philandering, to the pardoning of Marc Rich, Hillary Clinton has taken the bullets, looked into the camera and never blinked. This is the Experience that Hillary brings as a candidate, and it is no small offering.
But it is not Change.
Perhaps this is what the Iowa voters see. And it is enough to give them pause.
Thursday, May 03, 2007
George Tenet goes public
Dick Cheney must get a kick out of watching George Tenet and Hilary Clinton try to change the subject.
Tired of being Dick Cheney’s bitch, and remaining silent as the Vice President repeatedly and publicly blamed the decision to go to war on his assurances that Iraq had stockpiles of WMD, George Tenet is lashing back. In his new book, At the Center of the Storm, Tenet contends that the Vice President and the Administration were intent on going to war all in Iraq along, and that WMD merely served as a pretext.
This is old news. After all, in a 2003 interview in Vanity Fair magazine, then-Deputy Secretary of Defense Paul Wolfowitz forthrightly explained that the Bush Administration had several reasons for launching its war with Iraq––none of which, incidentally, suggested Iraqi complicity in the 9/11 events or constituted a casus belli under the generally accepted laws of war––but chose WMD as the central rationale because it was the easiest to sell.
Much to Tenet’s chagrin, the WMD narrative––including the ensuing claims of intelligence failure and political manipulation––remains central to public discourse around the history of the war, and continues to obscure the more wide-ranging motivations. Riding the talk show circuit, interviewers ignore the substance of his book––the threats the to the nation, the depth and breadth of Al Qaeda's capabilities––and return to the WMD soap opera. What did he know? When did he know it? What did others know? Did he want to apologize to the American people? [Wolf Blitzer, CNN, 5/2/07.]
Bush, Cheney and their acolytes are indifferent to the public WMD debate, however, because it was never determinative. Prior to September 11th, as Tenet suggests, the Bush Administration was intent on removing Saddam Hussein from power for a range of reasons, which reflected the perspectives of different groups within the Administration. First, there were the Neoconservatives. As typified by Wolfowitz and Bill Kristol, this group saw the institution of democratic governments in the Middle East as critical to regional stability and global security, and supported military action in Iraq as a means to establish a beachhead from which to catalyze political transformation.
Second, there was the Office of the Vice President. While Cheney was a member of the neoconservative Project for a New American Century, his strategic focus was on energy security. This group saw Saddam’s commitment to give Russian, Chinese and French oil companies leases to develop the massive Iraq oil fields––after United Nations sanctions were removed––as a fundamental threat to American commercial interests and economic security, and supported military action as a means to achieve three goals: Preventing Russo-Sino control of vital resources, establishing a regime that would direct those contracts to American and British companies, and putting boots on the ground within striking distance of both Saudi and Kuwait, to deter future threats to America’s interests in the region.
Third, there was the group whose views in many respects most closely mirrored those of the Clinton Administration that first promulgated the policy of regime change in Iraq. Led by Rumsfeld, this group saw Saddam as a proven threat to the region, and international terrorism as a growing strategic threat to America’s interests. They viewed action in Iraq as imperative both to forestall further aggression by Saddam, and to prevent an alliance with terrorist groups that had declared war on America and the west years earlier.
For each group, the attacks on September 11th escalated the urgency of acting, and Tenet’s assurance that Iraq harbored WMD provided a compelling narrative for selling a war that each group believed critical to the nation’s interests. While Tenet blames Cheney for continuing with the public charade and hanging him out to dry, others across the political spectrum have found it useful to stick to the script. Among Democratic presidential aspirants who voted for the war, the formulation of blaming bad intelligence and manipulation has become the accepted route for appeasing the Party faithful. For his part, John Edwards has elevated apologizing to a central campaign theme as he expresses his regret for trusting the intelligence rather than his own judgment, while Hillary Clinton clings to the “If I knew then what I know today…” formulation.
Hillary Clinton continues to resist John Edwards full-throated apologia because she wants to be President more than she wants to be the Democratic nominee, and this chosen path grates against her––and no doubt her husband’s––instincts. From a strategic standpoint, the clamor for an exit from Iraq is fraught with risk for the nation and the region. While not necessary a neocon-petrocentric-militarist, she is probably closer to the Administration’s world view than Edwards––and no doubt shares Joe Biden’s assessment that he is “clueless” on matters of foreign affairs. She understands that the prospect of American disengagement from the Middle East is already creating fear across the region, and leading the Sunni states––among them Egypt, Jorden and Saudi Arabia––rushing to develop nuclear programs as a deterrent to growing Iranian and Shia power, and that the next President must have a mandate to build a new strategic framework for the region. Almost alone among the Democratic candidates, she embraces Anthony Zinni's view that no Democrat, if elected, will be able to deliver on the withdrawal commitments they are now so eagerly proffering.
Politically, Clinton views Edwards’ apology-as-job-qualification as suicide for a Democratic nominee come November 2008. Edwards’ account––that as a Senator, he trusted the CIA rather than his own judgment––is simply a more convenient history to embrace than the less convenient truth that he did trust his own judgment. In the toxic political climate of the day, with the drums beating and the rhetoric flying, when it came time to vote, it was easier to fly the flag and vote Aye than to vote Nay and risk the scorn that would ensue. For Edwards the Presidential aspirant, it is better now to plead guilty to having been duped than to face the far worse indictment of having lacked the courage to vote Nay, of having chosen to vote for war and to send soldiers to die, in order to preserve––in Bill Clinton’s words––his own future political viability.
When the general election rolls around 18-months from now, neither George Bush nor Dick Cheney will be on the Republican ticket, and while Iraq looms to be a central issue, the protagonists of that war will be leaving the theatre. It is notable that even as the Democrats are being pushed to the left by their base, the Republican field is notably lacking in fire-breathing partisans, and that the Democratic debate two weeks ago included more Senators who voted for the war than the Republican debate this evening. In a sense, the Republican field may actually be less captive of the war, and may be adapting more quickly to a new political landscape where a resurgent Independent center looms to be critical once again, comprising voters for whom apologies for bad judgment will do little to win votes for the highest office, and Out Now will not suffice for a strategic vision for America’s role in the world.
Hillary Clinton and Dick Cheney both understand what George Tenet seems to have missed, the WMD narrative worked––and it is still working. And Clinton and Cheney also understand that the longer it remains central to the Democratic campaign, the more it will weaken and diminish the ultimate victor, and the more likely it is that a Republican will the White House 18 months from now.
Tired of being Dick Cheney’s bitch, and remaining silent as the Vice President repeatedly and publicly blamed the decision to go to war on his assurances that Iraq had stockpiles of WMD, George Tenet is lashing back. In his new book, At the Center of the Storm, Tenet contends that the Vice President and the Administration were intent on going to war all in Iraq along, and that WMD merely served as a pretext.
This is old news. After all, in a 2003 interview in Vanity Fair magazine, then-Deputy Secretary of Defense Paul Wolfowitz forthrightly explained that the Bush Administration had several reasons for launching its war with Iraq––none of which, incidentally, suggested Iraqi complicity in the 9/11 events or constituted a casus belli under the generally accepted laws of war––but chose WMD as the central rationale because it was the easiest to sell.
Much to Tenet’s chagrin, the WMD narrative––including the ensuing claims of intelligence failure and political manipulation––remains central to public discourse around the history of the war, and continues to obscure the more wide-ranging motivations. Riding the talk show circuit, interviewers ignore the substance of his book––the threats the to the nation, the depth and breadth of Al Qaeda's capabilities––and return to the WMD soap opera. What did he know? When did he know it? What did others know? Did he want to apologize to the American people? [Wolf Blitzer, CNN, 5/2/07.]
Bush, Cheney and their acolytes are indifferent to the public WMD debate, however, because it was never determinative. Prior to September 11th, as Tenet suggests, the Bush Administration was intent on removing Saddam Hussein from power for a range of reasons, which reflected the perspectives of different groups within the Administration. First, there were the Neoconservatives. As typified by Wolfowitz and Bill Kristol, this group saw the institution of democratic governments in the Middle East as critical to regional stability and global security, and supported military action in Iraq as a means to establish a beachhead from which to catalyze political transformation.
Second, there was the Office of the Vice President. While Cheney was a member of the neoconservative Project for a New American Century, his strategic focus was on energy security. This group saw Saddam’s commitment to give Russian, Chinese and French oil companies leases to develop the massive Iraq oil fields––after United Nations sanctions were removed––as a fundamental threat to American commercial interests and economic security, and supported military action as a means to achieve three goals: Preventing Russo-Sino control of vital resources, establishing a regime that would direct those contracts to American and British companies, and putting boots on the ground within striking distance of both Saudi and Kuwait, to deter future threats to America’s interests in the region.
Third, there was the group whose views in many respects most closely mirrored those of the Clinton Administration that first promulgated the policy of regime change in Iraq. Led by Rumsfeld, this group saw Saddam as a proven threat to the region, and international terrorism as a growing strategic threat to America’s interests. They viewed action in Iraq as imperative both to forestall further aggression by Saddam, and to prevent an alliance with terrorist groups that had declared war on America and the west years earlier.
For each group, the attacks on September 11th escalated the urgency of acting, and Tenet’s assurance that Iraq harbored WMD provided a compelling narrative for selling a war that each group believed critical to the nation’s interests. While Tenet blames Cheney for continuing with the public charade and hanging him out to dry, others across the political spectrum have found it useful to stick to the script. Among Democratic presidential aspirants who voted for the war, the formulation of blaming bad intelligence and manipulation has become the accepted route for appeasing the Party faithful. For his part, John Edwards has elevated apologizing to a central campaign theme as he expresses his regret for trusting the intelligence rather than his own judgment, while Hillary Clinton clings to the “If I knew then what I know today…” formulation.
Hillary Clinton continues to resist John Edwards full-throated apologia because she wants to be President more than she wants to be the Democratic nominee, and this chosen path grates against her––and no doubt her husband’s––instincts. From a strategic standpoint, the clamor for an exit from Iraq is fraught with risk for the nation and the region. While not necessary a neocon-petrocentric-militarist, she is probably closer to the Administration’s world view than Edwards––and no doubt shares Joe Biden’s assessment that he is “clueless” on matters of foreign affairs. She understands that the prospect of American disengagement from the Middle East is already creating fear across the region, and leading the Sunni states––among them Egypt, Jorden and Saudi Arabia––rushing to develop nuclear programs as a deterrent to growing Iranian and Shia power, and that the next President must have a mandate to build a new strategic framework for the region. Almost alone among the Democratic candidates, she embraces Anthony Zinni's view that no Democrat, if elected, will be able to deliver on the withdrawal commitments they are now so eagerly proffering.
Politically, Clinton views Edwards’ apology-as-job-qualification as suicide for a Democratic nominee come November 2008. Edwards’ account––that as a Senator, he trusted the CIA rather than his own judgment––is simply a more convenient history to embrace than the less convenient truth that he did trust his own judgment. In the toxic political climate of the day, with the drums beating and the rhetoric flying, when it came time to vote, it was easier to fly the flag and vote Aye than to vote Nay and risk the scorn that would ensue. For Edwards the Presidential aspirant, it is better now to plead guilty to having been duped than to face the far worse indictment of having lacked the courage to vote Nay, of having chosen to vote for war and to send soldiers to die, in order to preserve––in Bill Clinton’s words––his own future political viability.
When the general election rolls around 18-months from now, neither George Bush nor Dick Cheney will be on the Republican ticket, and while Iraq looms to be a central issue, the protagonists of that war will be leaving the theatre. It is notable that even as the Democrats are being pushed to the left by their base, the Republican field is notably lacking in fire-breathing partisans, and that the Democratic debate two weeks ago included more Senators who voted for the war than the Republican debate this evening. In a sense, the Republican field may actually be less captive of the war, and may be adapting more quickly to a new political landscape where a resurgent Independent center looms to be critical once again, comprising voters for whom apologies for bad judgment will do little to win votes for the highest office, and Out Now will not suffice for a strategic vision for America’s role in the world.
Hillary Clinton and Dick Cheney both understand what George Tenet seems to have missed, the WMD narrative worked––and it is still working. And Clinton and Cheney also understand that the longer it remains central to the Democratic campaign, the more it will weaken and diminish the ultimate victor, and the more likely it is that a Republican will the White House 18 months from now.
Saturday, April 28, 2007
Reality Bites: Exhibit A
We have a problem accepting reality when it threatens our preferred historical narrative.
Exhibit A is Kirk Radomski.
As reported today above the fold in the New York Times, Radomski, now 37, has admitted in federal court to distributing a range of performance enhancing drugs––including anabolic steroids, amphetamines and human growth hormone––as a batboy and equipment manager in the clubhouse of the New York Mets during the period 1985-1995.
Perhaps Radomski’s admission can bring to an end the roiling debate over the use of performance-enhancing drugs in baseball, to say nothing of the rest of professional sports. If a 15-year-old batboy was distributing drugs in the Mets clubhouse to “dozens of players,” one can safely conclude that the practice was pervasive.
This is not a Claude Rains moment. Learning of Radomski’s admission, no one can reasonably be “Shocked, shocked, that there were illegal drugs being used in baseball.” After all, any baseball fan worthy of the name read Jim Bouton’s classic Ball Four, which exposed––among other crude habits––the widespread use of amphetamines––or “greenies”––in the Yankees clubhouse during the 1963 and 1964 seasons. And while Bouton’s revelations about America’s heroes earned him the enduring enmity of his teammates and the Yankees organization, no one seriously challenged the veracity of his claims.
Today, several years after the Senate charade that marched players before the cameras to buttress the careers of the Senators and destroy those of the players, Mark McGwire is still pilloried for declining to state what everyone knew, his bash-brother Jose Canseco is still shunned for stating what everyone knew and writing a book about it, and the Baseball Commissioner and team owners who deflected questions from the Senators with the skill of cigarette company executives, still invoke the name of Senate titan George Mitchell as their agent in their efforts to “get to the bottom of the situation.”
Well, maybe the image of the 15-year-old Radomksi offering up anabolic steroids and methamphetamines to Ray Knight and Mookie Wilson and David Cone will finally allow people to come to grips with the long history of drug use in Major League locker rooms, and cease the fatuous effort to lay baseball’s problem with performance-enhancing drugs at the feet of McGwire, Sammy Sosa and Barry Bonds. The impact of money on the purity of America’s Game dates back at least to the Black Sox scandal in 1919, and the casual use of illegal drugs in the clubhouse dates at least to the early 1960s. The advent of free agency, and the ensuing growth in player performance-based compensation, magnified the incentives for players to seek out ways to improve their performance. And as Radomski and Bouton both suggest, the teams were co-conspirators in the effort.
Radomski’s “revelations” are particularly timely, as the ongoing steroid drama is reaching its apotheosis. One day over the next few months, Barry Bonds will break Hank Aaron’s long-standing home run record, and Bonds pursuit of Aaron’s record has become a national morality play. Hank Aaron is an historic figure in American sports, a man who endured the barbs of the civil rights struggle, and yet remains a figure of stature and grace. In contrast, Barry Bonds is, well, Barry Bonds. Surly and aloof, Bonds is widely vilified as a cheater and remains the protagonist in the steroid controversy. Major League Baseball, which profited greatly from the race between McGuire and Sosa to break Roger Maris’ single season home run record, is at a loss about how and whether to recognize Bonds when he hits home run 756. Aaron himself refuses to acknowledge Bonds, and Aaron’s disdain supports those who view Bonds as the villain in the drama.
The fact is, however, that Barry Bonds is not destroying America’s Game. America’s Game is an American game, part of our commercial popular culture, with its rules and rewards. It is possible that Barry Bonds may have outstripped his peers in his use of steroids––as he has in all other aspects of the sport––and certainly today’s Barry Bonds physically bears little comparison with the Barry Bonds who came into the League. However, the same can be said of Roger Clemens, and other players whose records are steadily displacing those of players from earlier eras.
As one looks back over the past 40 years, it is impossible to know who benefited and who did not from performance-enhancing drugs, and therefore how their records should be compared. Bonds vs. A-Rod? Clemens vs. Maddox? Ricky Henderson vs. Maury Wills. In each case, the first player seems the more likely beneficiary than the second. We only know from the testimony of Radomksi, and the supporting observations of Bouton and Canseco, that the opportunity was there, and that many took advantage. Yet no player has been targeted, vilified and ostracized like Bonds.
As the Bonds drama unfolds, we will most certainly continue to recite the preferred narrative––that Barry Bonds is a unique villain in this saga, rather than just the most recognized actor in what has been a decades-long play in which many are complicit. New York fans will certainly prefer to cling to their image of Lenny Dykstra as a hard-scrapple, tobacco-chewing, throw-back player, and view today’s story as an aberration. Others will argue that unlike Bonds, Dysktra and the other heroes of summers’ past were the unwitting victims of team doctors and trainers, and perhaps even an occasional 15-year-old batboy, pushing their wares.
But as it ain’t so. It just ain’t so.
Exhibit A is Kirk Radomski.
As reported today above the fold in the New York Times, Radomski, now 37, has admitted in federal court to distributing a range of performance enhancing drugs––including anabolic steroids, amphetamines and human growth hormone––as a batboy and equipment manager in the clubhouse of the New York Mets during the period 1985-1995.
Perhaps Radomski’s admission can bring to an end the roiling debate over the use of performance-enhancing drugs in baseball, to say nothing of the rest of professional sports. If a 15-year-old batboy was distributing drugs in the Mets clubhouse to “dozens of players,” one can safely conclude that the practice was pervasive.
This is not a Claude Rains moment. Learning of Radomski’s admission, no one can reasonably be “Shocked, shocked, that there were illegal drugs being used in baseball.” After all, any baseball fan worthy of the name read Jim Bouton’s classic Ball Four, which exposed––among other crude habits––the widespread use of amphetamines––or “greenies”––in the Yankees clubhouse during the 1963 and 1964 seasons. And while Bouton’s revelations about America’s heroes earned him the enduring enmity of his teammates and the Yankees organization, no one seriously challenged the veracity of his claims.
Today, several years after the Senate charade that marched players before the cameras to buttress the careers of the Senators and destroy those of the players, Mark McGwire is still pilloried for declining to state what everyone knew, his bash-brother Jose Canseco is still shunned for stating what everyone knew and writing a book about it, and the Baseball Commissioner and team owners who deflected questions from the Senators with the skill of cigarette company executives, still invoke the name of Senate titan George Mitchell as their agent in their efforts to “get to the bottom of the situation.”
Well, maybe the image of the 15-year-old Radomksi offering up anabolic steroids and methamphetamines to Ray Knight and Mookie Wilson and David Cone will finally allow people to come to grips with the long history of drug use in Major League locker rooms, and cease the fatuous effort to lay baseball’s problem with performance-enhancing drugs at the feet of McGwire, Sammy Sosa and Barry Bonds. The impact of money on the purity of America’s Game dates back at least to the Black Sox scandal in 1919, and the casual use of illegal drugs in the clubhouse dates at least to the early 1960s. The advent of free agency, and the ensuing growth in player performance-based compensation, magnified the incentives for players to seek out ways to improve their performance. And as Radomski and Bouton both suggest, the teams were co-conspirators in the effort.
Radomski’s “revelations” are particularly timely, as the ongoing steroid drama is reaching its apotheosis. One day over the next few months, Barry Bonds will break Hank Aaron’s long-standing home run record, and Bonds pursuit of Aaron’s record has become a national morality play. Hank Aaron is an historic figure in American sports, a man who endured the barbs of the civil rights struggle, and yet remains a figure of stature and grace. In contrast, Barry Bonds is, well, Barry Bonds. Surly and aloof, Bonds is widely vilified as a cheater and remains the protagonist in the steroid controversy. Major League Baseball, which profited greatly from the race between McGuire and Sosa to break Roger Maris’ single season home run record, is at a loss about how and whether to recognize Bonds when he hits home run 756. Aaron himself refuses to acknowledge Bonds, and Aaron’s disdain supports those who view Bonds as the villain in the drama.
The fact is, however, that Barry Bonds is not destroying America’s Game. America’s Game is an American game, part of our commercial popular culture, with its rules and rewards. It is possible that Barry Bonds may have outstripped his peers in his use of steroids––as he has in all other aspects of the sport––and certainly today’s Barry Bonds physically bears little comparison with the Barry Bonds who came into the League. However, the same can be said of Roger Clemens, and other players whose records are steadily displacing those of players from earlier eras.
As one looks back over the past 40 years, it is impossible to know who benefited and who did not from performance-enhancing drugs, and therefore how their records should be compared. Bonds vs. A-Rod? Clemens vs. Maddox? Ricky Henderson vs. Maury Wills. In each case, the first player seems the more likely beneficiary than the second. We only know from the testimony of Radomksi, and the supporting observations of Bouton and Canseco, that the opportunity was there, and that many took advantage. Yet no player has been targeted, vilified and ostracized like Bonds.
As the Bonds drama unfolds, we will most certainly continue to recite the preferred narrative––that Barry Bonds is a unique villain in this saga, rather than just the most recognized actor in what has been a decades-long play in which many are complicit. New York fans will certainly prefer to cling to their image of Lenny Dykstra as a hard-scrapple, tobacco-chewing, throw-back player, and view today’s story as an aberration. Others will argue that unlike Bonds, Dysktra and the other heroes of summers’ past were the unwitting victims of team doctors and trainers, and perhaps even an occasional 15-year-old batboy, pushing their wares.
But as it ain’t so. It just ain’t so.
Sunday, March 04, 2007
The Jazzman's Wife
Sitting alongside her husband in Alabama this week, Hillary Clinton looked small. Diminished.
This is, no doubt, why her strategists have been determined to keep the two apart in public appearances. Not because as the publicly cuckolded and humiliated spouse she must detest him, but because seeing her sitting alongside him evokes so many images––images that do not serve her well.
Hillary is small and diminished next to Bill exactly because he is large, and larger than life. He is a titanic political figure, and as much as she struggles to emit the intellectual grasp that was one aspect of his persona, she has none of his touch of the common man. She lacks any measure of his deeply felt empathy for the individual, whether in Appalachia, the inner ring suburb or the inner city. Sitting there, as much as we might feel her pain, we know that she does not feel ours.
Worse still, sitting next him, one knows that behind all of her pretenses to being the candidate with real experience in the world, she is a one-term Senator––much as Obama and Edwards––and two-term First Lady. Internationally, she is a rock star, but the image of her sitting next to her husband reinforces, visually and viscerally, that she is the first derivative of a powerful political figure, and that her rise to Senator, and any hope she might have of the Presidency, demands that he be at her side. She had no choice to leave him in the wake of his infidelities if she was to achieve her own ambitions.
And that is the other image that strikes the observer, for Bill is nothing if not authentic, while Hillary sits as yin to his yang, the candidate who is packaged and careful and whom one never really believes that one can ever know.
As George W. Bush settles in for his last two years with approval ratings below 30%, and with America’s image in the world lying in tatters at his feet, do we really want another President who is driven to define herself against someone else, or some image of whom people think them to be? The Bush Presidency was undone in the beginning by the President and team’s rejection of all things Clinton. From their rejection of the outgoing administration’s concerns over Al Qaeda to the dismantling of FEMA, decisions early on derived from a compulsion to reject any notion that their hated predecessor––the Slick Willy who continually confounded their best-laid plans––could have gleaned any wisdom about the world during his eight years in office. Then, as Iraq loomed, the Bush Presidency was further damaged by the President’s determination to turn away from his father’s path, and to reject the entreaties of his father’s advisors, from Scowcroft’s plea to stay out of Iraq early on, to the President’s skillful marginalization of Jim Baker and the Iraq Study Group just a few months ago.
Now, Hillary looms as a candidate similarly defined by the struggle to be her own self, even as the world knows that she would never be where she is but for Him. Her struggle against the shadow of the man sitting next to her in Alabama this week was demonstrated by her overreaction to David Geffen’s suggestion that lying comes too easily to the Clintons. Rather than simply suggest that Geffen never disparaged them when he was spending the night in the Lincoln Bedroom, or that his bitterness dated to Bill Clinton’s decision not to pardon American Indian leader and convicted murderer Leonard Pelletier, Hillary lashed out at Geffen and attacked him for engaging in the “politics of personal destruction.”
Of course, it wasn’t about personal destruction. But it was intensely political, as Hillary was stuck––as she often will be as she continues on the long sprint to Iowa and New Hampshire––between her desire to leverage the patina of the Clinton Presidency, while rejecting ties to its more sordid moments. She could not give a straightforward response to Geffen, because it suggest her complicity in the selling of the Lincoln Bedroom for campaign contributions, and worse, the selling of Presidential Pardons to the likes of Billionaire tax cheat Marc Rich.
Hillary’s over-wrought reaction to Geffen, and her subsequent appearance with Bill in Alabama, do not speak well for her ability to navigate her campaign through the long months ahead. Despite an overwhelming advantage in fundraising, name recognition and organization, there is a sense of incipient panic in the Clinton camp, and tetchiness in her public comments. On the fundraising side, the Clinton finance team has threatened that donors must get on board early, or lose any credit later on, and warned them against giving to “both sides.” On the political side, bringing Bill down to Alabama showed an inability to stick to the game plan, and an astonishing lack of confidence in the candidate to deal with the problem at hand.
And the problem, of course, is Barack Obama. For months, the question on the Democratic side was who would emerge as the anti-Clinton, and over the course of 2006, several candidates took their turn in the sun. First there was Gore, then Mark Warner and then John Edwards. Each star rose and then set as the media moved on. Now, it is Obama’s turn, and he has begun to separate himself from the pack. But the Clinton campaign was not content wait to see if he would stumble along the way in the face of public and media scrutiny, perhaps because of the threat he posed to Clinton’s African American base, or perhaps just because he is so comfortable in his own skin and as such looms as such a stark contrast.
The numbers are only just beginning to justify such a strong response on the Clinton side. On Intrade, the online trading site that has emerged as a force in measuring political trends, the odds of a Clinton nomination remains around 50%, though they dropped to 46% in the wake of the Geffen dust-up. However, Obama has emerged as the clear threat, rising to 25% as Edwards odds have dropped from 20% to below 10%, and he has been lapped by resurgent Gore speculation. Polling results, which measure popularity rather than expected outcome, have been worse for Clinton, with some showing the gap narrowing toward 10%, with Obama a growing favorite among Black voters. Clearly, whatever gauge one chooses, the aura of inevitability has been pierced.
Hillary Clinton’s struggles as a candidate are just beginning. As she sat in Alabama next to Bill, the comparison did not serve her will. Unlike Maggie Thatcher, who when shown the Bronze statue of her that was unveiled before Parliament last week, commented that she would have preferred Iron, but Bronze would have to do, Hillary’s problem is that she lacks authenticity, and without authenticity, how can there be trust? When she voted for the war, was it out of conviction, or because she believed that to win the Presidency as a woman she needed to be tough? If she declines to apologize, is it because her original vote was one of conviction, or because as a female candidate she has determined that she must show a steel backbone? When all that she does reeks of strategy and tactics, how does one know who she really is?
Or, as an observer had to wonder as she sat next to Bill this week, did she stay with him because she loves him and forgave him his faults, or because she knew that without him, and the embrace of his success and popularity, she had no chance to win the White House? Is it personal, or is it just politics. Just strategy and tactics, but for which she would just be another one-term Senator with big ambitions, or more likely another Wall Street banker dreaming dreams of what might have been.
This is, no doubt, why her strategists have been determined to keep the two apart in public appearances. Not because as the publicly cuckolded and humiliated spouse she must detest him, but because seeing her sitting alongside him evokes so many images––images that do not serve her well.
Hillary is small and diminished next to Bill exactly because he is large, and larger than life. He is a titanic political figure, and as much as she struggles to emit the intellectual grasp that was one aspect of his persona, she has none of his touch of the common man. She lacks any measure of his deeply felt empathy for the individual, whether in Appalachia, the inner ring suburb or the inner city. Sitting there, as much as we might feel her pain, we know that she does not feel ours.
Worse still, sitting next him, one knows that behind all of her pretenses to being the candidate with real experience in the world, she is a one-term Senator––much as Obama and Edwards––and two-term First Lady. Internationally, she is a rock star, but the image of her sitting next to her husband reinforces, visually and viscerally, that she is the first derivative of a powerful political figure, and that her rise to Senator, and any hope she might have of the Presidency, demands that he be at her side. She had no choice to leave him in the wake of his infidelities if she was to achieve her own ambitions.
And that is the other image that strikes the observer, for Bill is nothing if not authentic, while Hillary sits as yin to his yang, the candidate who is packaged and careful and whom one never really believes that one can ever know.
As George W. Bush settles in for his last two years with approval ratings below 30%, and with America’s image in the world lying in tatters at his feet, do we really want another President who is driven to define herself against someone else, or some image of whom people think them to be? The Bush Presidency was undone in the beginning by the President and team’s rejection of all things Clinton. From their rejection of the outgoing administration’s concerns over Al Qaeda to the dismantling of FEMA, decisions early on derived from a compulsion to reject any notion that their hated predecessor––the Slick Willy who continually confounded their best-laid plans––could have gleaned any wisdom about the world during his eight years in office. Then, as Iraq loomed, the Bush Presidency was further damaged by the President’s determination to turn away from his father’s path, and to reject the entreaties of his father’s advisors, from Scowcroft’s plea to stay out of Iraq early on, to the President’s skillful marginalization of Jim Baker and the Iraq Study Group just a few months ago.
Now, Hillary looms as a candidate similarly defined by the struggle to be her own self, even as the world knows that she would never be where she is but for Him. Her struggle against the shadow of the man sitting next to her in Alabama this week was demonstrated by her overreaction to David Geffen’s suggestion that lying comes too easily to the Clintons. Rather than simply suggest that Geffen never disparaged them when he was spending the night in the Lincoln Bedroom, or that his bitterness dated to Bill Clinton’s decision not to pardon American Indian leader and convicted murderer Leonard Pelletier, Hillary lashed out at Geffen and attacked him for engaging in the “politics of personal destruction.”
Of course, it wasn’t about personal destruction. But it was intensely political, as Hillary was stuck––as she often will be as she continues on the long sprint to Iowa and New Hampshire––between her desire to leverage the patina of the Clinton Presidency, while rejecting ties to its more sordid moments. She could not give a straightforward response to Geffen, because it suggest her complicity in the selling of the Lincoln Bedroom for campaign contributions, and worse, the selling of Presidential Pardons to the likes of Billionaire tax cheat Marc Rich.
Hillary’s over-wrought reaction to Geffen, and her subsequent appearance with Bill in Alabama, do not speak well for her ability to navigate her campaign through the long months ahead. Despite an overwhelming advantage in fundraising, name recognition and organization, there is a sense of incipient panic in the Clinton camp, and tetchiness in her public comments. On the fundraising side, the Clinton finance team has threatened that donors must get on board early, or lose any credit later on, and warned them against giving to “both sides.” On the political side, bringing Bill down to Alabama showed an inability to stick to the game plan, and an astonishing lack of confidence in the candidate to deal with the problem at hand.
And the problem, of course, is Barack Obama. For months, the question on the Democratic side was who would emerge as the anti-Clinton, and over the course of 2006, several candidates took their turn in the sun. First there was Gore, then Mark Warner and then John Edwards. Each star rose and then set as the media moved on. Now, it is Obama’s turn, and he has begun to separate himself from the pack. But the Clinton campaign was not content wait to see if he would stumble along the way in the face of public and media scrutiny, perhaps because of the threat he posed to Clinton’s African American base, or perhaps just because he is so comfortable in his own skin and as such looms as such a stark contrast.
The numbers are only just beginning to justify such a strong response on the Clinton side. On Intrade, the online trading site that has emerged as a force in measuring political trends, the odds of a Clinton nomination remains around 50%, though they dropped to 46% in the wake of the Geffen dust-up. However, Obama has emerged as the clear threat, rising to 25% as Edwards odds have dropped from 20% to below 10%, and he has been lapped by resurgent Gore speculation. Polling results, which measure popularity rather than expected outcome, have been worse for Clinton, with some showing the gap narrowing toward 10%, with Obama a growing favorite among Black voters. Clearly, whatever gauge one chooses, the aura of inevitability has been pierced.
Hillary Clinton’s struggles as a candidate are just beginning. As she sat in Alabama next to Bill, the comparison did not serve her will. Unlike Maggie Thatcher, who when shown the Bronze statue of her that was unveiled before Parliament last week, commented that she would have preferred Iron, but Bronze would have to do, Hillary’s problem is that she lacks authenticity, and without authenticity, how can there be trust? When she voted for the war, was it out of conviction, or because she believed that to win the Presidency as a woman she needed to be tough? If she declines to apologize, is it because her original vote was one of conviction, or because as a female candidate she has determined that she must show a steel backbone? When all that she does reeks of strategy and tactics, how does one know who she really is?
Or, as an observer had to wonder as she sat next to Bill this week, did she stay with him because she loves him and forgave him his faults, or because she knew that without him, and the embrace of his success and popularity, she had no chance to win the White House? Is it personal, or is it just politics. Just strategy and tactics, but for which she would just be another one-term Senator with big ambitions, or more likely another Wall Street banker dreaming dreams of what might have been.
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