James Lewis has a problem, a real problem as the new turtle ad goes. He see Obama as a control freak and a puppet of his own confused psyche. (See 1 below.)
A look back and a lot of OOPS! But with so much skin in the 'change' game it is hard for those duped to see and/or admit they supported an empty suited messiah.(See 2 below.)
It's all about rockets.
Sadaam's rocketing Israel changed the Israeli view towards holding territory. Then Israel abandoned territory and Hamas continued to send rockets and that changed Israeli attitudes again. Now Hamas figures a few rockets a day will not disturb the world and will box in a harsh Israeli response. Hamas will continue to wreak emotional havoc on Israelis and in time Israel will implode due to a diffident world and demographics. Thus, Hamas believes it has perfected the magic formula of continuing to rocket but at a reduced and 'tolerable'level.
Thus, by maintaining the situation Israel finds itself in Hamas believes Israel will eventually be destroyed. (See 3 below.)
Hamas and Fatah agree to hold elections in Jan. 2010. (See 4 below.)
Hamas is not buying Olmert's urging they do a deal regarding Shalit before Netanyahu assumes power. (See 5 below.)
In the final analysis can you, should you, trust any deal struck with those sworn to your destruction? The interview I posted recently with Lebanon's clever Ayatollah tells it all. (See 6 below.)
Do we want America to become Europeanized? Charles Murray rejects the idea but recognizes we are proceeding down that slippery slope with the Obama administration in charge of our Europeanized destiny.(See 7 below.)
If Obama loses the middle then Murray might be able to breathe a bit easier. However, Republicans still must get their act together, offer something that would is an appealing alternative for centrists without abdicating basic sensible conservative principles.
Meanwhile, Shelby Steele writes a very incisive piece explaining why Conservatism offers the Invisible hand which is often no match for the failed largess of Liberal dependency.
The Conservative concept: 'you are free, get up and go for it also carries risk.' A society hooked on Liberal concepts offering government handouts and 'feel your pain' rhetoric understandably is often more appealing even to those who, after acheiving freedom, find government dependency preferable.
Steele is a must read!(See 8 and 8a below.)
What is "The Fat Tail" all about? (See 9 below.)
A very lengthy discussion about what the White House needs to do with Larry Summers. (See 10 below.)
Dick
1) Obama's essence
By James Lewis
Undisciplined. Disorganized. Overreaching. Dangerous. Even the Democrats are taking off the upside-down plastic buckets they've kept over their heads, like David Broder, David Ignatius, and even David Brooks, the house conservative at the NYT, who keeps trying to hug that dangerous median strip on the superhighway of life, dancing and dodging between all the whizzing cars and trucks.
But the commentariat still doesn't understand that Obama is the worst control freak to occupy high office in the history of the United States. Obama is the Nanny to end all Nannies. Socialism is not a political philosophy for him. It's the other way around. Control freakery is Obama's basic personality. Socialism is just his way of making it look good to his buds on the Left.
It's called obsessive-compulsive personality, and if he can get himself a good doctor he might be able to get a pill for it. But he doesn't see it as a problem for one Barack (Barry) Soetoro Obama, the Reinvented Man. He sees it as everybody else's problem, including the stock market, high-paid executives, people who objected to his weird appointee's weird choice of Chas Freeman for a top intelligence post, and just about everybody else who doesn't march in lockstep with his frantic fantasy life. We all just need a leetle more controlling and he'll be just a titch happier with us.
Unfortunately for him this is the most naturally anarchic country in the world: What do you think Rock ‘n Roll is about, not to mention Gangsta Rap? It's not a Mozart minuet. It's the drumbeat of rebellion that has run this country since 1776.
Obama is oddly foreign in that respect. He's more like Kim Jong-Il or Robert Mugabe, or Saddam Hussein for that matter. Control. He is profoundly afraid of losing it, and has learned to project total control in his very persona. That's what earned him the faith of the liberal masses. The trouble is that nobody else will take orders! No wonder he doesn't like Israel, a country that is as wildly anarchic as America. No wonder he admires the disciplined Swedes, and gave his first big speech at the Berlin Prussian victory monument. Citizens of the world, unite! You have nothing to lose but your freedom.
The reason why this White House is so chaotic and can't even staff the Treasury at a time of wild economic turmoil is that Obama needs to micromanage it all. That's why he's got six Secretaries of State. Hillary is just a figurehead. He's got Joe Biden, who's not all that together himself, he's got his special reps to the Middle East and Af-Pakistan, he's got his letter to Khamenei in Iran, he wrote his own letter to Russia's prime minister (which was contemptuously dissed in public), he's got his "Up yours, British Imperialist!" meeting with Gordon Brown, followed by some mysterious "high State Department source" telling the Brits they're no different from all the other 200 countries in the world, and on and on. FDR famously played off his bureaucrats against each other to keep more power in his own hands. Obama is trying the same thing, except that he can't resist the urge to meddle and micromanage. No wonder Warren Buffett is getting freaked out watching it.
Take something as small as Obama's need for a word-for-word script, just to answer questions at press conferences. His teleprompter dependency is simply unprecedented. Any Republican president would be laughed out of the room with that kind of hand-holding from Axelrod, or Bill Ayers, or Michelle, or whoever is dictating the words behind the scenes. No wonder Obama is considered eloquent. Like a talking head on TV he constantly needs his writers to feed him the words, so he can pay total attention to his acting style. But even his acting is degenerating in front of our eyes: Obama is turning Obombastama. You can tell from the tone of hysteria creeping into his operatic baritone. Maybe they need to switch that reverb circuit back on? That should impress all the lickspittles of the White House press.
The paradox of it all is that the free market will have to get us out of this mess, simply because whatever policies Obama conjures up from day to day are contradictory. You can't spend a trillion plus on the phony stimulus bill, and then expect to spend more and more trillions of Monopoly money on your liberal wish list: universal healthcare, carbon trading schemes, declaring CO2 to be a poison. "Pardon me for breathing," as New Yorkers used to say. That was a joke. Soon breathing out CO2 may require a carbon trading license from Carol Browner at the EPA. Not a joke. As for the other end, methane is next.
With Obama running around in all directions at the same time, the market will find ways to get around overregulation. It usually does. The old military maxim is "order, counter-order, disorder." Another useful rule is "never give a command that won't be obeyed." But that's precisely what the Big O keeps doing. It's an odd way to liberate those markets that cannot be controlled -- which is most of them -- but what the hell, it's a libertarian dream.
And when the economy recovers in spite of all that control freakery, Obama will take the credit. In a way, he might deserve it.
2) Formerly Useful Idiots
By Cliff Thier
Lenin famously said of liberals in the West that they were "useful idiots."
A number of really smart (go ahead, ask them) people endorsed Obama only to find out that they were hoodwinked. He's not the guy they fell in love with. It's the morning after, and they've been forced to confront the fact that he's a fraud. A forgery.
In John LeCarre's "Tinker, Tailor, Soldier, Spy" master spy George Smiley points out that "the more one has paid for a forgery, the more one defends it in the face of all the evidence to the contrary." And, these people have paid plenty for their forgery.
They fell in love with the idea of Obama and that blinded them to the reality of the man Obama. The hard leftist. The man with no management skills. The man with no knowledge of history. The man who insults our allies. Now, as the reality of what they have done is hitting them in the face, they are painfully coming to grips with their colossal gullibility.
Alec Guinness brilliantly portrayed the moment of clarity when he contemplated the bridge he had built for the Japanese over the River Kwai and said, "What have I done?"
This occasional column will be a hall of fame for easy marks. If you have evidence of other really smart people waking up and exclaiming "What have I done?" please send it to cliffordthier@mac.com The list will be growing.
Christopher Buckley -- Commentator and Offspring
HALLELUJAH
As for Senator Obama: He has exhibited throughout a "first-class temperament, "pace Oliver Wendell Holmes, Jr.'s famous comment about FDR. As for his intellect, well, he's a Harvard man, though that's sure as heck no guarantee of anything, these days. Vietnam was brought to you by Harvard and (one or two) Yale men. As for our current adventure in Mesopotamia, consider this lustrous alumni roster. Bush 43: Yale. Rumsfeld: Princeton. Paul Bremer: Yale and Harvard. What do they all have in common? Andover! The best and the brightest.
I've read Obama's books, and they are first-rate. He is that rara avis, the politician who writes his own books. Imagine. He is also a lefty. I am not. I am a small-government conservative who clings tenaciously and old-fashionedly to the idea that one ought to have balanced budgets. On abortion, gay marriage, et al, I'm libertarian. I believe with my sage and epigrammatic friend P.J. O'Rourke that a government big enough to give you everything you want is also big enough to take it all away.
But having a first-class temperament and a first-class intellect, President Obama will (I pray, secularly) surely understand that traditional left-politics aren't going to get us out of this pit we've dug for ourselves. If he raises taxes and throws up tariff walls and opens the coffers of the DNC to bribe-money from the special interest groups against whom he has (somewhat disingenuously) railed during the campaign trail, then he will almost certainly reap a whirlwind that will make Katrina look like a balmy summer zephyr.
Obama has in him-I think, despite his sometimes airy-fairy "We are the people we have been waiting for" silly rhetoric-the potential to be a good, perhaps even great leader. He is, it seems clear enough, what the historical moment seems to be calling for.
-- October 10, 2008
OOPS
Hold on-there's a typo in that paragraph. "$3.6 trillion budget" can't be right. The entire national debt is-what-about $11 trillion? He can't actually be proposing to spend nearly one-third of that in one year, surely. Let me check. Hmm. He did. The Wall Street Journal notes that federal outlays in fiscal 2009 will rise to almost 30 percent of the gross national product. In language that even an innumerate English major such as myself can understand: The US government is now spending annually about one-third of what the entire US economy produces. As George Will would say, "Well."...
If this is what the American people want, so be it, but they ought to have no illusions about the perils of this approach. Mr. Obama is proposing among everything else $1 trillion in new entitlements, and entitlement programs never go away, or in the oddly poetical bureaucratic jargon, "sunset." He is proposing $1.4 trillion in new taxes, an appetite for which was largely was whetted by the shameful excesses of American CEO corporate culture. And finally, he has proposed $5 trillion in new debt, one-half the total accumulated national debt in all US history. All in one fell swoop.
-- March 1, 2009
David Brooks: NT Times' Pet Conservative
HALLELUJAH
And it is easy to sketch out a scenario in which he could be a great president. He would be untroubled by self-destructive demons or indiscipline. With that cool manner, he would see reality unfiltered. He could gather - already has gathered - some of the smartest minds in public policy, and, untroubled by intellectual insecurity, he could give them free rein. Though he is young, it is easy to imagine him at the cabinet table, leading a subtle discussion of some long-term problem.
-- October 16, 2008
OOPS
Those of us who consider ourselves moderates - moderate-conservative, in my case - are forced to confront the reality that Barack Obama is not who we thought he was. His words are responsible; his character is inspiring. But his actions betray a transformational liberalism that should put every centrist on notice.
-- March 2, 2009
Martin Peretz: Publisher of The New Republic
HALLELUJAH
Obama's points, which he has made many times, should reassure anyone who is concerned about what his presidency would mean for the security of Israel. And yet many are not reassured. They are alarmed by e-mails, saying that Obama's middle name is Hussein (true, and so what?), that he is a Muslim and not a Christian (untrue, and so what if it was?), that he took the oath of office as a Senator on the Koran rather than the Bible (utterly untrue and, once again, so what?). All these charges have been aired and negated often enough that anyone interested in hearing the truth about them has heard it. But another charge, circulating on the Internet, has not yet been sufficiently refuted. This is that he has advisers on the Middle East who despise Israel.
Let's take one example. There are all kinds of spooky rumors that a man named Robert Malley is one of Obama's advisers, specifically his Middle East adviser. His name comes up mysteriously and intrusively on the web, like the ads for Viagra. Malley, who has written several deceitful articles in The New York Review of Books, is a rabid hater of Israel. No question about it. But Malley is not and has never been a Middle East adviser to Barack Obama. Obama's Middle East adviser is Dan Shapiro. Malley did, though, work for Bill Clinton. He was deeply involved in the disastrous diplomacy of 2000. Obama at the time was in the Illinois State Senate. So, yes, this is a piece of experience that Obama lacks.
-- January 31, 2008
OOPS
Here is the most stunning prospective appointment of the Obama administration as yet. Not stunning as in "spectacular" or "distinguished" but stunning as in bigoted and completely out of synch with the deepest convictions of the American people. What's more, Charles "Chas" Freeman is a bought man, having been ambassador to Saudi Arabia and then having supped at its tables for almost two decades, supped quite literally, and supped also at home, courtesy of Prince Bandar, confidante of the Bushes who as everybody knows became extremely wealthy through the intimacy with the royal house, a story that has not been done adequately ever. [snip]
Chas Freeman is actually a new psychological type for a Democratic administration. He has never displayed a liberal instinct and wants the United States to kow-tow to authoritarians and tyrants, in some measure just because they may seem able to keep the streets quiet. And frankly, Chas brings a bitter rancor to how he looks at Israel. No Arab country and no Arab movement--basically including Hezbollah and Hamas--poses a challenge to the kind of world order we Americans want to see. He is now very big on Hamas as the key to bringing peace to Gaza, when in fact it is the key to uproar and bloodletting, not just against Israel but against the Palestinian Authority that is the only group of Palestinians that has even given lip-service (and, to be fair, a bit more) to a settlement with Israel.
That Freeman would be chosen as the president's gatekeeper to national intelligence is an absurdity. It would be as if I were appointed the gatekeeper to that intelligence.
But Freeman's real offense (and the president's if he were to appoint him) is that he has questioned the loyalty and patriotism of not only Zionists and other friends of Israel, the great swath of American Jews and their Christian countrymen, who believed that the protection of Zion is at the core of our religious and secular history, from the Pilgrim fathers through Harry Truman and John F. Kennedy. And how has he offended this tradition? By publishing and peddling the unabridged John Mearsheimer and Stephen Walt book, The Israel Lobby and U.S. Foreign Policy, with panegyric and hysteria. If Freeman believes that this book is the truth he can't be trusted by anyone, least of all Barack Obama. I can't believe that Obama wants to appoint someone who is quintessentially an insult to the patriotism of some many of his supporters, me included.
3) The racist Israeli fascist in me
By Bradley Burston
I was determined to duck it. I was resolved to fly to the States, speak about the situation in Israel, and reply with nothing more than a half-smile and a "next question, please," to the well-read and otherwise openhearted people who ask questions of the tenor of "Between you and me, what is wrong with these people, your friends, the Israelis?"
Subtextual Translation of the question: What is with these blights on the backside of humanity? A vast war machine pretending to be a tiny country, a mobilized citizenry sterilized of morality, drained of compassion, bereft of conscience, bestial in war, imperial in ambition, Goliathized in its marriage of high tech and high explosive; incorrigibly bigoted bullying simpletons, little more than racists who vote for racists, fascists who fall for fascists, an embarrassment to the West, an embarrassment to the Jews, an embarrassment, at root, to the progressive individual who asks the question.
I was all set to say nothing. On the plane coming over, however, I read an essay about Israel and Israelis that changed my mind. I have the extraordinary novelist Anne Roiphe to thank for writing the piece, which made my blood boil, and, in the process, forced me to say what I honestly thought.
Ms. Roiphe, it must be said, is a compelling, wonderfully compassionate writer, who clearly cares about Israelis and knows just about everything about them, except for the first, most basic thing.
"I couldn't feel worse," Ms. Roiphe begins her essay about the recent Israeli election, and especially about the Israeli Jews who voted for Avigdor Lieberman, whom she accurately terms dangerously demagogic and deeply unkind. "I feel as if my spouse had cheated on me with Mussolini."
Perhaps as a consequence, it develops that Ms. Roiphe has begun to see Israel, and Israelis, with the kind of tunnel vision that allows no light at its end. She suggests that the import of the election was a vote against peace.
"I would call it pathological that Israel is listening to leaders who don't understand that the entire West Bank cannot belong to Israel without making it a pariah nation, without violating the spirit of the Torah, and the scared memory of the Jewish people."
With a smirk and a slap, she lets us know that she gets us. "I understand peace has been so long in coming and that Palestinians have done stupid things: electing Hamas, tossing rockets into Israel, mocking those of us who thought that leaving Gaza might be a fine first step. I understand the despair and the frustration and the need to jump around waving one's sword in the air, slicing up whatever clouds appear in the sky."
May Ms. Roiphe pardon me, but she does not understand. I'm not sure that, at a distance of thousands of miles, anyone could. Examine the results of the election closely, and you'll find that a clear majority voted for parties who have gone on record as favoring an eventual Palestinian state in the West Bank and Gaza, and less than six percent voted for parties who categorically reject that solution.
What, then, explains the incomprehensible behavior of these people, my friends? What common denominator, other than evil intention, can explain the continued occupation of the West Bank, the risk of demographic disaster, the ill-understood rage of a people cast as the sole perpetrator of and, if at times the victim, then certainly the deserving victim of, wrongdoing?
You won't like the answer. But in all the blindingly complex bazaar of the Middle East equation, it really comes down to one word: rockets.
It was Saddam Hussein's rockets in 1991 that got us into this peace process, and it is Palestinian rockets right now, day after day after day, that sent that peace to its grave and which cover it with a little more silt and rubble every few hours.
It was fundamentally rockets and not racism that put Avigdor Lieberman where he is today. And it is rockets, more than any other single factor, that explains what happened to the Israeli left, to Meretz, and, in particular, to the Labor Party.
When Saddam Hussein fired 39 ballistic missiles into Tel Aviv, Haifa and Dimona, he radically changed the way Israelis viewed the importance of holding on to the territories. Overnight the threat was coming from 1500 kilometers away, so what good was it to hang onto and permanently settle the hills of Samaria in the West Bank, or the sand dunes of northern Gaza?
It was this, as much as any other factor, that paved the way for the opening of what we've come to know as the peace process, beginning at the Madrid conference in 1991.
In 2005, less than a day after Israeli forces removed every last Jew from Gaza, Palestinians set up rocket launchers on the ruins of settlements that had been just been evacuated. They took aim not only at Sderot, but at some of the very kibbutzim who had most strongly championed the cause of an independent Palestine alongside Israel.
This act, and the thousands of rockets that followed, utterly changed Israelis again. It put a sudden end to the idea of land for peace, because no one, even some of the most ardent advocates of Palestinian statehood in the West Bank, was about to agree to leave Ben-Gurion airport, Tel Aviv and Jerusalem within range of the rockets. Suddenly there was a consensus again. And the peace process, the peace movement, and with it Labor and Meretz, were kicked to the curb.
Ten years ago, Hassan Nasrallah, the head of Hezbollah in Lebanon, electrified radical Islam and particularly the Palestinians, when he said that Israel was as fearsome and as fragile as a spider's web.
Push Israel with suicide terrorists, he indicated, and the whole web will tear and collapse. It didn't work. Suicide terror, in fact, acted to strengthen and unify Israel. In the eyes of the post-9/11 world, suicide terror changed Israelis from villains to victims, and Palestinians from an image of the valiant David to a creepy, loathsome version of Goliath.
The best way to destroy Israel
But now, Hamas is beginning to see something else. At this point, the best way to destroy Israel, is to leave it exactly as it is.
Titrate, adjust the flow of rockets fired at Israeli civilians to a level which is thoroughly acceptable to the rest of the world, but which is also entirely unbearable to Israelis.
Then, sit back and watch demographics and despair work their magic. No wonder Hamas officials who are seen as moderates urge a 50-year truce. By that time, Israeli Arabs will be able to simply vote the Jewish state off the map.
A clear majority of Israeli Jews know this as well. But I have yet to meet one Israeli, Meretz voters included, who is willing to hand over the West Bank while Ashkelon is even now in the gunners' sights, and rockets fly unabated.
I have long believed that in terms of their destructive effects on peace prospects, the settlements are the Qassams of the Jews. What I failed to recognize at first, was that the effect of Qassams is to enshrine West Bank settlements, and, more than any other single factor, protect them from eviction.
In the main, the world has no idea - nor does it particularly care - that when a rocket up to nine feet long rocket flies up to 25 miles traveling at half a mile per second and lands with up to 44 pounds of explosives packed into its warhead - the human consequence could easily be carnage.
As far as the world knows, that rocket will fall without a sound. A house may be destroyed, childrens' nerves shot to shreds, perhaps for life. Entire communities, whole cities, suffer from post-traumatic stress. But unless 10 Israelis are killed, or 20, that rocket never existed. 10,000 rockets, fired at civilian areas, unprotected by anything - I am truly ashamed to acknowledge - other than miracles.
It is these miracles, these barely averted catastrophes, literally thousands of them, which have become the central fact of Israeli life. That, and an anger which no one outside Israel can know or fully comprehend, an aching, soul-deep frustration, an always humming fear, a sickness and fever over the nearness of true disaster, as well as a sense of abandonment by those abroad who cannot be expected to know what these people, my friends, are going through or why.
It is not the world's fault if it believes that Israelis do not have a right to their anger. The world is really not at all to blame if it prefers to view Israelis as ferocious without provocation, hateful without just cause.
The world only knows what we in the media choose to reveal. For a decade, we have dismissed the rockets as little more than toylike, backroom-cobbled nuisances, convenient pretexts for military onslaughts by Israeli politicians keen to evade graft raps.
The fact, however, remains. Day in and day out, Palestinian rockets target and, at times, demolish, homes, day care centers, health clinics, synagogues, kibbutz dining halls, town squares, factories, elementary schools, high schools, apartment houses. For years now, by some miracle, an enormous number of Israeli lives have been spared. These are people trying to live their everyday lives under fire, and who have no other defense, no protection whatsoever, except the intercession of some form or another of poorly understood providence.
On the weekend that Ms. Roiphe's article appeared, I wonder how many of her fellow New Yorkers heard at all that a Katyusha rocket had crashed into a empty schoolroom in Ashkelon, close to where worshippers were gathered in a synagogue, and, soon thereafter, another landed 600 feet from that city's Barzilai Hospital and its thousands of patients and staff. No one killed = Nothing happened.
The world long ago grew tired of its Israelis and their whining. The world could not care a whit less about the miracles that save them. The world has even had time to grow tired of its Palestinians as well.
But the world should know this: No matter how progressive the government in Israel, no matter how grave the suffering of the Palestinians in Gaza, without an end to the rockets, there will be no peace process and certainly no peace. While the rockets are flying, nothing else moves.
Nothing that Israel has tried, neither diplomacy nor brutality, has been able to stop the rockets. Only Hamas can do that. The world and Washington could have made the rockets a priority years ago, and perhaps brought this to resolution. But the world has other things to think about, and Washington as well.
Back in New York, Anne Roiphe seems to have given up on her brethren in Israel. "Under the present conditions, it is vitally important that American Jews, liberal, decent, democratic, continue to play a major role. We may have to be the ones to carry the Jewish nation forward, in all its intelligent moral purposes."
I wish a had as much faith as she in her fellow American Jews, my direct people of origin.
As it is, I have next to nothing in common with my direct neighbors, Russian Jewish immigrants to Israel, other than the fact that, in a sense, I am one of them. I guess destiny will out. Had my family stayed in Russia before the war and not emigrated to Los Angeles, had they survived the Holocaust and Stalin, had I been one of the million former Soviet Jews who moved to Israel 20 years ago, I might well have found myself a proud voter for Avigdor Lieberman, angry with my fellow Israelis who disdain them me non-Israeli, angrier with the Arabs that toss rockets, furious with Israeli Arabs who support the tossing of rockets, and finally, contemptuous of - even as I uselessly blare my loyalty to - a place which is contemptuous of me.
Ours are dreadful times. Ours are ugly choices. You want to see peace, Ms. Roiphe? Pray for a miracle. But more so, pray for the event that no one expects, the shocking occurrence that no one could have foreseen - a journey by Netanyahu or Lieberman that resembles those of Begin and Sadat, Rabin and Sharon - the event that jars everyone from their accustomed outlook and despair, and forces them to reconsider the possibility that the humans of the Holy Land might still someday have a common future.
4) Hamas and Fatah agree to hold elections by January 2010
Rival Palestinian groups agreed Sunday that general elections in the
West Bank and Gaza should be held by January 2010, but remained at odds over
the terms of a joint government, a negotiator said.
Fatah and Hamas, the largest two Palestinian groups, differ fundamentally on
how to deal with Israel. Hamas believes in armed struggle, though it is
willing to consider a truce, while Abbas backs negotiations Israel
The talks, mediated by Egypt, had aimed to lay the groundwork for a
transitional government followed by presidential and legislative elections.
Delegates to the talks were trying to end divisions that deepened when the
Islamic militants of Hamas violently took control of Gaza in June 2007,
leaving the more moderate Fatah movement in charge only of the West Bank.
The formation of a unity government would also clear the way for desperately
needed aid to be delivered to the Gaza Strip. The disagreements between the
rivals has held up some $5 billion in international aid for Gaza, which was
devastated by Israel's three-week offensive to stop Hamas rocket fire.
Hamas and Fatah had been talking in Cairo since last Tuesday. But when the
talks ended last night, significant differences remained, especially on the
timing and supervision of elections and whether a power-sharing deal would
see Hamas become part of the Fatah-led Palestine Liberation Organization.
The PLO is the body that has signed previous agreements with Israel, and the
inclusion of Hamas could give it a say over the future of negotiations.
Several delegates to the talks detailed the main sticking points earlier
Sunday. They agreed to speak only on condition of anonymity because the
talks were then still in progress.
Fatah wanted to form a government of technocrats under a political program
that stated clearly that it fully complies with past PLO agreements with
Israel. That would amount to Hamas' recognition of Israel.
Hamas, however, refused to abandon the call in its founding charter for
Israel's destruction. It was willing only to say it respects PLO agreements
with Israel.
This disagreement was confirmed by Hamas spokesman Fawzi Barhoum and Samir
Ghosheh, a member of the PLO's executive committee.
The two sides have tried to solve this thorny issue through different
wordings before, including in the short-lived unity government of 2006, but
the results fell short of demands by the international community that Hamas
clearly recognize Israel.
There were also disagreements over how to organize presidential and
legislative elections, the delegates said. Hamas wanted a new, more
independent electoral commission that represents all Palestinian factions.
5) Analysis: Hamas is not afraid to wait for Netanyahu
By Khaled Abu Toameh
Hamas is as desperate as Israel to find an "honorable" solution to the case
of St.-Sgt. Gilad Schalit.
Hamas knows that Schalit's release could mean the reopening of the border
crossings into Gaza Strip - a move that would facilitate the movement's
mission of rebuilding the houses destroyed during Operation Cast Lead,
further boosting Hamas's popularity and solidifying its control over the 1.4
million Palestinians living there.
But as of Sunday night, it did not seem that the Islamist movement was in a
rush to sign a deal just for the sake of handing Prime Minister Ehud Olmert
and Foreign Minister Tzipi Livni some kind of victory as they prepare to
leave office.
Nor do the soldier's captors seem to be afraid of dealing with a new
right-wing coalition headed by the Likud's Binyamin Netanyahu and Israel
Beiteinu chairman Avigdor Lieberman.
Olmert has been trying to exert pressure on Hamas by warning that unless an
agreement is reached by Monday morning, he will refer the case of Schalit to
the next government.
In a message to Hamas, Olmert warned the movement that it would not get a
better offer, if any, from Netanyahu and Lieberman.
Accept my offer now, or else you will have to deal with Netanyahu and
Lieberman, who are not going to give you as much as I'm willing to give, was
the message delivered to Hamas through Egyptian security officials over the
weekend.
Hamas spokesmen in the Gaza Strip dismissed Olmert's threat as "nonsense"
and "comical." One of them said Hamas did not distinguish between Kadima and
the Likud, or between Olmert and Netanyahu or Livni and Lieberman.
"The last two wars, the one in Lebanon and the one in the Gaza Strip, were
launched by a government that claims to be leftist and centrist in its
policies," the Hamas spokesman noted. "When it comes to dealing with the
Arabs, there is no difference between the right wing and the left wing in
Israel."
According to the official, Olmert and Livni are desperate to leave office
with some sort of an achievement that would make them look good in the eyes
of the Israeli public.
"After all the massacres the two committed against our people in the Gaza
Strip, they now want us to help them by releasing the soldier," he
continued. "I don't believe that Hamas should reward Olmert and Livni."
Another Hamas spokesman said that had Olmert wanted to resolve the case of
Schalit, he could have done so shortly after the soldier was kidnapped.
Hamas's demands have not changed since then, he said.
"We have been providing Israel with the same list of prisoners for almost
three years," he said. "The list that we recently delivered to Israel
through the Egyptian mediators is almost the same one we presented back
then."
Schalit, he added, could have been returned to his family a few months after
his abduction had the government accepted the captors' demands for the
release of several hundred security prisoners.
"It seems that Olmert is now prepared to release more than 70 percent of the
prisoners who are on the list," the Hamas spokesman said. "This means that
we have made some progress, given the fact that in the past, Israel refused
to release more than 70% of the prisoners."
But as far as Schalit's captors are concerned, it's either 100% or nothing.
They are convinced that the new government will have to resume the
negotiations over a prisoner exchange from the point where they ended. They
also have no doubt that a Netanyahu-led coalition will pay a heavy price in
return for a soldier or an Israeli civilian.
Hamas and the other groups holding Schalit can't afford to make the
slightest concession to Israel, particularly since the price the
Palestinians have paid since the abduction in the summer of 2006 has been
very high - almost 2,500 killed and thousands wounded.
The kidnappers need to show the Palestinian public that the price was not
unjustified. This can be achieved only if Israel releases hundreds of
security prisoners, including ones with Jewish blood on their hands. And
some Hamas officials really believe that Netanyahu and Lieberman might have
the guts to do what Olmert and Livni are reluctant to do.
6) Gilad: Hamas, Hizbullah can't be trusted
By Roee Nahmias
Terror groups can agree to 30-year truce, violate it 30 days later, top security official says
Both Hamas and Hizbullah will continue to seek Israel's destruction and must not be granted any legitimacy, top security official Amos Gilad said Monday.
Speaking at a conference at the Interdisciplinary Center, the head of the Defense Ministry's Diplomatic-Security Bureau said terror groups were "decent enough to say what they think – that Israel has no right to exist." He said both Hamas and Hizbullah are "entities with an incredibly radical worldview, but they're flexible in terms of timetable. For them, there is no such thing as defeat or surrender."
"If they sustain a blow, as happened in Operation Cast Lead for example, they may accept a temporary agreement. However, in terms of their value system, they can always violate such deal the moment they feel strong enough," he said.
"This is what happened with the previous lull," Gilad said, noting that he was deeply familiar with the issue. "I'm telling you that the lull was unlimited and was not restricted to six months, as Hamas claimed. They violated it because they thought Israel is weak and won't enter Gaza."
"They are capable of agreeing to a 30-year ceasefire and violating it after 30 days," he said. "Those who think that such agreements can serve as a basis for negotiation are wrong. We should never be tempted into strategic negotiations with Hamas."
'No chance for peace deals'
Turning his attention to the recent British willingness to engage in dialogue with Hizbullah, Gilad said: "I see elements in the Western world that are considering dialogue with these groups in an attempt to convince them, but it won't make a difference. It's possible to reach agreements with them, but we should never think this will lead to peace treaties."
Replying to Ynet's question about whether Hizbullah leader Hassan Nasrallah's latest speech, where he hinted of willingness to engage in talks with the US, constituted a change in policy, Gilad replied: "Hamas and Hizbullah are open to any kind of dialogue. Legitimacy is very important to them. If the Western world is willing to recognize them, they will of course accept that, and this is what Nasrallah meant. However, they will not change their ways, and Israel will always be a target for elimination in their eyes."
During the evening, Gilad refused to respond to questions regarding the Gilad Shalit negotiations.
7) Europe Syndrome and the Challenge to American Exceptionalism
By Charles Murray
America’s elites must once again fall in love with what makes the United States different.
The advent of the Obama administration brings this question before the nation: Do we want the United States to be like Europe? President Obama and his leading intellectual heroes are the American equivalent of Europe’s social democrats. There’s nothing sinister about that. They share an intellectually respectable view that Europe’s regulatory and social welfare systems are more progressive than America’s and advocate reforms that would make the American system more like the European system.
Not only are social democrats intellectually respectable, the European model has worked in many ways. I am delighted when I get a chance to go to Stockholm or Amsterdam, not to mention Rome or Paris. When I get there, the people don’t seem to be groaning under the yoke of an evil system. Quite the contrary. There’s a lot to like—a lot to love—about day-to-day life in Europe.
But the European model can’t continue to work much longer. Europe’s catastrophically low birth rates and soaring immigration from cultures with alien values will see to that.
So let me rephrase the question. If we could avoid Europe’s demographic problems, do we want the United States to be like Europe?
I argue for the answer “no,” but not for economic reasons. The European model has indeed created sclerotic economies and it would be a bad idea to imitate them. But I want to focus on another problem.
My argument is drawn from Federalist Paper No. 62, probably written by James Madison: “A good government implies two things: first, fidelity to the object of government, which is the happiness of the people; secondly, a knowledge of the means by which that object can be best attained.” Note the word: happiness. Not prosperity. Not security. Not equality. Happiness, which the Founders used in its Aristotelian sense of lasting and justified satisfaction with life as a whole.
I have two points to make. First, I will argue that the European model is fundamentally flawed because, despite its material successes, it is not suited to the way that human beings flourish—it does not conduce to Aristotelian happiness. Second, I will argue that 21st-century science will prove me right.
First, the problem with the European model, namely: It drains too much of the life from life. And that statement applies as much to the lives of janitors—even more to the lives of janitors—as it does to the lives of CEOs.
I start from this premise: A human life can have transcendent meaning, with transcendence defined either by one of the world’s great religions or one of the world’s great secular philosophies. If transcendence is too big a word, let me put it another way: I suspect that almost all of you agree that the phrase “a life well-lived” has meaning. That’s the phrase I’ll use from now on.
And since happiness is a word that gets thrown around too casually, the phrase I’ll use from now on is “deep satisfactions.” I’m talking about the kinds of things that we look back upon when we reach old age and let us decide that we can be proud of who we have been and what we have done. Or not.
To become a source of deep satisfaction, a human activity has to meet some stringent requirements. It has to have been important (we don’t get deep satisfaction from trivial things). You have to have put a lot of effort into it (hence the cliché “nothing worth having comes easily”). And you have to have been responsible for the consequences.
There aren’t many activities in life that can satisfy those three requirements. Having been a good parent? That qualifies. A good marriage? That qualifies. Having been a good neighbor and good friend to those whose lives intersected with yours? That qualifies. And having been really good at something—good at something that drew the most from your abilities? That qualifies. Let me put it formally: If we ask what are the institutions through which human beings achieve deep satisfactions in life, the answer is that there are just four: family, community, vocation, and faith. Two clarifications: “Community” can embrace people who are scattered geographically. “Vocation” can include avocations or causes.
It is not necessary for any individual to make use of all four institutions, nor do I array them in a hierarchy. I merely assert that these four are all there are. The stuff of life—the elemental events surrounding birth, death, raising children, fulfilling one’s personal potential, dealing with adversity, intimate relationships—coping with life as it exists around us in all its richness—occurs within those four institutions.
Seen in this light, the goal of social policy is to ensure that those institutions are robust and vital. And that’s what’s wrong with the European model. It doesn’t do that. It enfeebles every single one of them.
Put aside all the sophisticated ways of conceptualizing governmental functions and think of it in this simplistic way: Almost anything that government does in social policy can be characterized as taking some of the trouble out of things. Sometimes, taking the trouble out of things is a good idea. Having an effective police force takes some of the trouble out of walking home safely at night, and I’m glad it does.
The problem is this: Every time the government takes some of the trouble out of performing the functions of family, community, vocation, and faith, it also strips those institutions of some of their vitality—it drains some of the life from them. It’s inevitable. Families are not vital because the day-to-day tasks of raising children and being a good spouse are so much fun, but because the family has responsibility for doing important things that won’t get done unless the family does them. Communities are not vital because it’s so much fun to respond to our neighbors’ needs, but because the community has the responsibility for doing important things that won’t get done unless the community does them. Once that imperative has been met—family and community really do have the action—then an elaborate web of social norms, expectations, rewards, and punishments evolves over time that supports families and communities in performing their functions. When the government says it will take some of the trouble out of doing the things that families and communities evolved to do, it inevitably takes some of the action away from families and communities, and the web frays, and eventually disintegrates.
If we knew that leaving these functions in the hands of families and communities led to legions of neglected children and neglected neighbors, and taking them away from families and communities led to happy children and happy neighbors, then it would be possible to say that the cost is worth it. But that’s not what happened when the U.S. welfare state expanded. We have seen growing legions of children raised in unimaginably awful circumstances, not because of material poverty but because of dysfunctional families, and the collapse of functioning neighborhoods into Hobbesian all-against-all free-fire zones.
Meanwhile, we have exacted costs that are seldom considered but are hugely important. Earlier, I said that the sources of deep satisfactions are the same for janitors as for CEOs, and I also said that people need to do important things with their lives. When the government takes the trouble out of being a spouse and parent, it doesn’t affect the sources of deep satisfaction for the CEO. Rather, it makes life difficult for the janitor. A man who is holding down a menial job and thereby supporting a wife and children is doing something authentically important with his life. He should take deep satisfaction from that, and be praised by his community for doing so. Think of all the phrases we used to have for it: “He is a man who pulls his own weight.” “He’s a good provider.” If that same man lives under a system that says that the children of the woman he sleeps with will be taken care of whether or not he contributes, then that status goes away. I am not describing some theoretical outcome. I am describing American neighborhoods where, once, working at a menial job to provide for his family made a man proud and gave him status in his community, and where now it doesn’t. I could give a half dozen other examples. Taking the trouble out of the stuff of life strips people—already has stripped people—of major ways in which human beings look back on their lives and say, “I made a difference.”
I have been making a number of claims with no data. The data exist. I could document the role of the welfare state in destroying the family in low-income communities. I could cite extensive quantitative evidence of decline in civic engagement and document the displacement effect that government intervention has had on civic engagement. But such evidence focuses on those near the bottom of society where the American welfare state has been most intrusive. If we want to know where America as a whole is headed—its destination—we should look to Europe.
Drive through rural Sweden, as I did a few years ago. In every town was a beautiful Lutheran church, freshly painted, on meticulously tended grounds, all subsidized by the Swedish government. And the churches are empty. Including on Sundays. Scandinavia and Western Europe pride themselves on their “child-friendly” policies, providing generous child allowances, free day-care centers, and long maternity leaves. Those same countries have fertility rates far below replacement and plunging marriage rates. Those same countries are ones in which jobs are most carefully protected by government regulation and mandated benefits are most lavish. And they, with only a few exceptions, are countries where work is most often seen as a necessary evil, least often seen as a vocation, and where the proportions of people who say they love their jobs are the lowest.
What’s happening? Call it the Europe syndrome. Last April I had occasion to speak in Zurich, where I made some of these same points. After the speech, a few of the twenty-something members of the audience approached and said plainly that the phrase “a life well-lived” did not have meaning for them. They were having a great time with their current sex partner and new BMW and the vacation home in Majorca, and saw no voids in their lives that needed filling.
It was fascinating to hear it said to my face, but not surprising. It conformed to both journalistic and scholarly accounts of a spreading European mentality. Let me emphasize “spreading.” I’m not talking about all Europeans, by any means. That mentality goes something like this: Human beings are a collection of chemicals that activate and, after a period of time, deactivate. The purpose of life is to while away the intervening time as pleasantly as possible.
If that’s the purpose of life, then work is not a vocation, but something that interferes with the higher good of leisure. If that’s the purpose of life, why have a child, when children are so much trouble—and, after all, what good are they, really? If that’s the purpose of life, why spend it worrying about neighbors? If that’s the purpose of life, what could possibly be the attraction of a religion that says otherwise?
The same self-absorption in whiling away life as pleasantly as possible explains why Europe has become a continent that no longer celebrates greatness. When life is a matter of whiling away the time, the concept of greatness is irritating and threatening. What explains Europe’s military impotence? I am surely simplifying, but this has to be part of it: If the purpose of life is to while away the time as pleasantly as possible, what can be worth dying for?
I stand in awe of Europe’s past. Which makes Europe’s present all the more dispiriting. And should make its present something that concentrates our minds wonderfully, for every element of the Europe Syndrome is infiltrating American life as well.
We are seeing that infiltration appear most obviously among those who are most openly attached to the European model—namely, America’s social democrats, heavily represented in university faculties and the most fashionable neighborhoods of our great cities. We know from databases such as the General Social Survey that among those who self-identify as liberal or extremely liberal, secularism is close to European levels. Birth rates are close to European levels. Charitable giving is close to European levels. There is every reason to believe that when Americans embrace the European model, they begin to behave like Europeans.
This is all pretty depressing for people who do not embrace the European model, because it looks like the train has left the station. The European model provides the intellectual framework for the social policies of the triumphant Democratic Party, and it faces no credible opposition from Republican politicians.
And yet there is reason for strategic optimism, and that leads to the second point I want to make tonight: Critics of the European model are about to get a lot of new firepower. Not only is the European model inimical to human flourishing, 21st-century science is going to explain why. We who think that the Founders were right about the relationship of government to human happiness will have an opening over the course of the next few decades to make our case.
The reason is a tidal change in our scientific understanding of what makes human beings tick. It will spill over into every crevice of political and cultural life. Harvard’s Edward O. Wilson anticipated what is to come in a book entitled Consilience. As the 21st century progresses, he argued, the social sciences are increasingly going to be shaped by the findings of biology; specifically, the findings of the neuroscientists and the geneticists.
What are they finding? I’m afraid that I don’t have anything to report that you will find shocking. For example, science is proving beyond a shadow of a doubt that males and females respond differently to babies. You heard it here first. The specific findings aren’t so important at this point—we are just at the beginning of a very steep learning curve. Rather, it is the tendency of the findings that lets us predict with some confidence the broad outlines of what the future will bring, and they offer nothing but bad news for social democrats.
Two premises about human beings are at the heart of the social democratic agenda: What I will label “the equality premise” and “the New Man premise.”
The equality premise says that, in a fair society, different groups of people—men and women, blacks and whites, straights and gays, the children of poor people and the children of rich people—will naturally have the same distributions of outcomes in life—the same mean income, the same mean educational attainment, the same proportions who become janitors and CEOs. When that doesn’t happen, it is because of bad human behavior and an unfair society. For the last 40 years, this premise has justified thousands of pages of government regulations and legislation that has reached into everything from the paperwork required to fire someone to the funding of high school wrestling teams. Everything that we associate with the phrase “politically correct” eventually comes back to the equality premise. Every form of affirmative action derives from it. Much of the Democratic Party’s proposed domestic legislation assumes that it is true.
Within a decade, no one will try to defend the equality premise. All sorts of groups will be known to differ in qualities that affect what professions they choose, how much money they make, and how they live their lives in all sorts of ways. Gender differences will be first, because the growth in knowledge about the ways that men and women are different is growing by far the most rapidly. I’m betting that the Harvard faculty of the year 2020 will look back on the Larry Summers affair in the same way that they think about the Scopes trial—the enlightened versus the benighted—and will have achieved complete amnesia about their own formerly benighted opinions.
There is no reason to fear this new knowledge. Differences among groups will cut in many different directions, and everybody will be able to weight the differences so that their group’s advantages turn out to be the most important to them. Liberals will not be obliged to give up their concerns about systemic unfairnesses. But groups of people will turn out to be different from each other, on average, and those differences will also produce group differences in outcomes in life, on average, that everyone knows are not the product of discrimination and inadequate government regulation.
And a void will have developed in the moral universe of the Left. If social policy cannot be built on the premise that group differences must be eliminated, what can it be built upon? It can be built upon the restoration of the premise that used to be part of the warp and woof of American idealism: people must be treated as individuals. The success of social policy is to be measured not by equality of outcomes for groups, but by open, abundant opportunity for individuals. It is to be measured by the freedom of individuals, acting upon their personal abilities, aspirations, and values, to seek the kind of life that best suits them.
The second bedrock premise of the social democratic agenda is what I call the New Man premise, borrowing the old Communist claim that it would create a “New Man” by remaking human nature. This premise says that human beings are malleable through the right government interventions.
The second tendency of the new findings of biology will be to show that the New Man premise is nonsense. Human nature tightly constrains what is politically or culturally possible. More than that, the new findings will broadly confirm that human beings are pretty much the way that wise human observers have thought for thousands of years, and that is going to be wonderful news for those of us who are already basing our policy analyses on that assumption.
The effects on the policy debate are going to be sweeping. Let me give you a specific example. For many years, I have been among those who argue that the growth in births to unmarried women has been a social catastrophe—the single most important driving force behind the growth of the underclass. But while I and other scholars have been able to prove that other family structures have not worked as well as the traditional family, I cannot prove that alternatives could not work as well, and so the social democrats keep coming up with the next new ingenious program that will compensate for the absence of fathers.
Over the next few decades, advances in evolutionary psychology are going to be conjoined with advances in genetic understanding and they will lead to a scientific consensus that goes something like this: There are genetic reasons, rooted in the mechanisms of human evolution, that little boys who grow up in neighborhoods without married fathers tend to reach adolescence unsocialized to norms of behavior that they will need to stay out of prison and hold jobs. These same reasons explain why child abuse is, and always will be, concentrated among family structures in which the live-in male is not the married biological father. And these same reasons explain why society’s attempts to compensate for the lack of married biological fathers don’t work and will never work.
Once again, there’s no reason to be frightened of this new knowledge. We will still be able to acknowledge that many single women do a wonderful job of raising their children. Social democrats will simply have to stop making glib claims that the traditional family is just one of many equally valid alternatives. They will have to acknowledge that the traditional family plays a special, indispensable role in human flourishing and that social policy must be based on that truth. The same concrete effects of the new knowledge will make us rethink every domain in which the central government has imposed its judgment on how people ought to live their lives—in schools, workplaces, the courts, social services, as well as the family. And that will make the job of people like me much easier.
But the real effect is going to be much more profound than making my job easier. The 20th century was a very strange century, riddled from beginning to end with toxic political movements and nutty ideas. For some years a metaphor has been stuck in my mind: the 20th century was the adolescence of Homo sapiens. Nineteenth-century science, from Darwin to Freud, offered a series of body blows to ways of thinking about human beings and human lives that had prevailed since the dawn of civilization. Humans, just like adolescents, were deprived of some of the comforting simplicities of childhood and exposed to more complex knowledge about the world. And 20th-century intellectuals reacted precisely the way that adolescents react when they think they have discovered Mom and Dad are hopelessly out of date. They think that the grown-ups are wrong about everything. In the case of 20th-century intellectuals, it was as if they thought that if Darwin was right about evolution, then Aquinas is no longer worth reading; that if Freud was right about the unconscious mind, then Nicomachean Ethics had nothing to teach us.
The nice thing about adolescence is that it is temporary, and, when it passes, people discover that their parents were smarter than they thought. I think that may be happening with the advent of the new century, as postmodernist answers to solemn questions about human existence start to wear thin—we’re growing out of adolescence. The kinds of scientific advances in understanding human nature are going to accelerate that process. All of us who deal in social policy will be thinking less like adolescents, entranced with the most titillating new idea, and thinking more like grown-ups.
That will not get rid of the slippery slope that America is sliding down toward the European model. For that, this new raw material for reform—namely, a lot more people thinking like grown-ups—must be translated into a kind of political Great Awakening among America’s elites.
I use the phrase “Great Awakening” to evoke a particular kind of event. American history has seen three religious revivals known as Great Awakenings (some say four). They were not dispassionate, polite reconsiderations of opinions. They were renewals of faith, felt in the gut.
I use the word “elites” to talk about the small minority of the population that has disproportionate influence over the culture, economy, and governance of the country. I realize that to use that word makes many Americans uncomfortable. But every society since the advent of agriculture has had elites. So does the United States. Broadly defined, America’s elites comprise several million people; narrowly defined, they amount to a few tens of thousands.
When I say that something akin to a political Great Awakening is required among America’s elites, what I mean is that America’s elites have to ask themselves how much they really do value what has made America exceptional, and what they are willing to do to preserve it.
American exceptionalism is not just something that Americans claim for themselves. Historically, Americans have been different as a people, even peculiar, and everyone around the world has recognized it. I’m thinking of qualities such as American optimism even when there doesn’t seem to be any good reason for it. That’s quite uncommon among the peoples of the world. There is the striking lack of class envy in America—by and large, Americans celebrate others’ success instead of resenting it. That’s just about unique, certainly compared to European countries, and something that drives European intellectuals crazy. And then there is perhaps the most important symptom of all, the signature of American exceptionalism—the assumption by most Americans that they are in control of their own destinies. It is hard to think of a more inspiriting quality for a population to possess, and the American population still possesses it to an astonishing degree. No other country comes close.
Underlying these symptoms of American exceptionalism are the underlying exceptional dynamics of American life. Alexis de Tocqueville wrote a famous book describing the nature of that more fundamental exceptionalism back in the 1830s. He found American life characterized by two apparently conflicting themes. The first was the passion with which Americans pursued their individual interests, and made no bones about it—that’s what America was all about, they kept telling Tocqueville. But at the same time, Tocqueville kept coming up against this phenomenal American passion for forming associations to deal with every conceivable problem, voluntarily taking up public affairs, and tending to the needs of their communities. How could this be? Because, Americans told Tocqueville, there’s no conflict. “In the United States,” Tocqueville writes, “hardly anybody talks of the beauty of virtue…. They do not deny that every man may follow his own interest; but they endeavor to prove that it is the interest of every man to be virtuous.” And then he concludes, “I shall not here enter into the reasons they allege…. Suffice it to say, they have convinced their fellow countrymen.”
The exceptionalism has not been a figment of anyone’s imagination, and it has been wonderful. But it isn’t something in the water that has made us that way. It comes from the cultural capital generated by the system that the Founders laid down, a system that says people must be free to live life as they see fit and to be responsible for the consequences of their actions; that it is not the government’s job to protect people from themselves; that it is not the government’s job to stage-manage how people interact with each other. Discard the system that created the cultural capital, and the qualities we love about Americans can go away. In some circles, they are going away.
Why do I focus on the elites in urging a Great Awakening? Because my sense is that the instincts of middle America remain distinctively American. When I visit the small Iowa town where I grew up in the 1950s, I don’t get a sense that community life has changed all that much since then, and I wonder if it has changed all that much in the working class neighborhoods of Brooklyn or Queens. When I examine the polling data about the values that most Americans prize, not a lot has changed. And while I worry about uncontrolled illegal immigration, I’ve got to say that every immigrant I actually encounter seems as American as apple pie.
The center still holds. It’s the bottom and top of American society where we have a problem. And since it’s the top that has such decisive influence on American culture, economy, and governance, I focus on it. The fact is that American elites have increasingly been withdrawing from American life. It’s not a partisan phenomenon. The elites of all political stripes have increasingly withdrawn to gated communities—“gated” literally or figuratively—where they never interact at an intimate level with people not of their own socioeconomic class.
Haven’t the elites always done this? Not like today. A hundred years ago, the wealth necessary to withdraw was confined to a much smaller percentage of the elites than now. Workplaces where the elites made their livings were much more variegated a hundred years ago than today’s highly specialized workplaces.
Perhaps the most important difference is that, not so long ago, the overwhelming majority of the elites in each generation were drawn from the children of farmers, shopkeepers, and factory workers—and could still remember those worlds after they left them. Over the last half century, it can be demonstrated empirically that the new generation of elites have increasingly spent their entire lives in the upper-middle-class bubble, never even having seen a factory floor, let alone worked on one, never having gone to a grocery store and bought the cheap ketchup instead of the expensive ketchup to meet a budget, never having had a boring job where their feet hurt at the end of the day, and never having had a close friend who hadn’t gotten at least 600 on her SAT verbal. There’s nobody to blame for any of this. These are the natural consequences of successful people looking for pleasant places to live and trying to do the best thing for their children.
But the fact remains: It is the elites who are increasingly separated from the America over which they have so much influence. That is not the America that Tocqueville saw. It is not an America that can remain America.
I am not suggesting that America’s elites sacrifice their own self-interest for everybody else. That would be really un-American. I just want to accelerate a rediscovery of what that self-interest is. Age-old human wisdom has understood that a life well-lived requires engagement with those around us. That is reality, not idealism. It is appropriate to think that a political Great Awakening among the elites can arise in part from the renewed understanding that it can be pleasant to lead a glossy life, but it is ultimately more fun to lead a textured life, and to be in the midst of others who are leading textured lives.
What it comes down to is that America’s elites must once again fall in love again with what makes America different. I am not being theoretical. The possibility that irreversible damage will be done to the American project over the next few years is real. The drift toward the European model can be slowed by piecemeal victories on specific items of legislation, but only slowed. It is going to be stopped only when we are all talking again about why America is exceptional, and why it is so important that America remain exceptional. That requires once again seeing the American project for what it is: a different way for people to live together, unique among the nations of the earth, and immeasurably precious.
8a) Why the GOP Can't Win With Minorities
By SHELBY STEELE
Today conservatism is stigmatized in our culture as an antiminority political philosophy. In certain quarters, conservatism is simply racism by another name. And minorities who openly identify themselves as conservatives are still novelties, fish out of water.
Yet there is now the feeling that without an appeal to minorities, conservatism is at risk of marginalization. The recent election revealed a Republican Party -- largely white, male and Southern -- seemingly on its way to becoming a "regional" party. Still, an appeal targeted just at minorities -- reeking as it surely would of identity politics -- is anathema to most conservatives. Can't it be assumed, they would argue, that support of classic principles -- individual freedom and equality under the law -- constitutes support of minorities? And, given the fact that blacks and Hispanics often poll more conservatively than whites on most social issues, shouldn't there be an easy simpatico between these minorities and political conservatism?
But of course the reverse is true. There is an abiding alienation between the two -- an alienation that I believe is the great new challenge for both modern conservatism and formerly oppressed minorities. Oddly, each now needs the other to evolve.
Yet why this alienation to begin with? Can it be overcome?
I think it began in a very specific cultural circumstance: the dramatic loss of moral authority that America suffered in the 1960s after openly acknowledging its long mistreatment of blacks and other minorities. Societies have moral accountability, and they cannot admit to persecuting a race of people for four centuries without losing considerable moral legitimacy. Such a confession -- honorable as it may be -- virtually calls out challenges to authority. And in the 1960s challenges emerged from everywhere -- middle-class white kids rioted for "Free Speech" at Berkeley, black riots decimated inner cities across the country, and violent antiwar protests were ubiquitous. America suddenly needed a conspicuous display of moral authority in order to defend the legitimacy of its institutions against relentless challenge.
This was the circumstance that opened a new formula for power in American politics: redemption. If you could at least seem to redeem America of its past sins, you could win enough moral authority to claim real political power. Lyndon Johnson devastated Barry Goldwater because -- among other reasons -- he seemed bent on redeeming America of its shameful racist past, while Goldwater's puritanical libertarianism precluded his even supporting the 1964 Civil Rights Act. Johnson's Great Society grandly advertised a new American racial innocence. If it utterly failed to "end poverty in our time," it succeeded -- through a great display of generosity toward minorities and the poor -- in recovering enough moral authority to see the government through the inexorable challenges of the '60s.
When redemption became a term of power, "redemptive liberalism" was born -- a new activist liberalism that gave itself a "redemptive" profile by focusing on social engineering rather than liberalism's classic focus on individual freedom. In the '60s there was no time to allow individual freedom to render up the social good. Redemptive liberalism would proactively engineer the good. Name a good like "integration," and then engineer it into being through a draconian regimen of school busing. If the busing did profound damage to public education in America, it gave liberals the right to say, "At least we did something!" In other words, we are activists against America's old sin of segregation. Activism is moral authority in redemptive liberalism.
But conservatism sees moral authority more in a discipline of principles than in activism. It sees ideas of the good like "diversity" as mere pretext for the social engineering that always leads to unintended and oppressive consequences. Conservatism would enforce the principles that ensure individual freedom, and then allow "the good" to happen by "invisible hand."
And here is conservatism's great problem with minorities. In an era when even failed moral activism is redemptive -- and thus a source of moral authority and power -- conservatism stands flat-footed with only discipline to offer. It has only an invisible hand to compete with the activism of the left. So conservatism has no way to show itself redeemed of America's bigoted past, no way like the Great Society to engineer a grand display of its innocence, and no way to show deference to minorities for the oppression they endured. Thus it seems to be in league with that oppression.
Added to this, American minorities of color -- especially blacks -- are often born into grievance-focused identities. The idea of grievance will seem to define them in some eternal way, and it will link them atavistically to a community of loved ones. To separate from grievance -- to say simply that one is no longer racially aggrieved -- will surely feel like an act of betrayal that threatens to cut one off from community, family and history. So, paradoxically, a certain chauvinism develops around one's sense of grievance. Today the feeling of being aggrieved by American bigotry is far more a matter of identity than of actual aggrievement.
And this identity calls minorities to an anticonservative orientation to American politics. It makes for an almost ancestral resistance to conservatism. One's identity of grievance is flattered by the moral activism of the left and offended by the invisible hand of the right. Minorities feel they were saved from oppression by the left's activism, not by the right's discipline. The truth doesn't matter much here (in fact it took both activism and principle, civil war and social movement, to end this oppression). But activism indicates moral anguish in whites, and so it constitutes the witness minorities crave. They feel seen, understood. With the invisible hand the special case of their suffering doesn't count for much, and they go without witness.
So here stands contemporary American conservatism amidst its cultural liabilities and, now, its electoral failures -- with no mechanism to redeem America of its shames, atavistically resisted by minorities, and vulnerable to stigmatization as a bigoted and imperialistic political orientation. Today's liberalism may stand on decades of failed ideas, but it is failure in the name of American redemption. It remains competitive with -- even ascendant over -- conservatism because it addresses America's moral accountability to its past with moral activism. This is the left's great power, and a good part of the reason Barack Obama is now the president of the United States. No matter his failures -- or the fruitlessness of his extravagant and scatter-gun governmental activism -- he redeems America of an ugly past. How does conservatism compete with this?
The first impulse is to moderate. With "compassionate conservatism" and "affirmative access" and "faith-based initiatives," President George W. Bush tried to show a redemptive conservatism that could be activist against the legacy of America's disgraceful past. And it worked electorally by moderating the image of conservatives as uncaring disciplinarians. But in the end it was only a marketer's ploy -- a shrewd advertisement with no actual product to sell.
What drew me to conservatism years ago was the fact that it gave discipline a slightly higher status than virtue. This meant it could not be subverted by passing notions of the good. It could be above moral vanity. And so it made no special promises to me as a minority. It neglected me in every way except as a human being who wanted freedom. Until my encounter with conservatism I had only known the racial determinism of segregation on the one hand and of white liberalism on the other -- two varieties of white supremacy in which I could only be dependent and inferior.
The appeal of conservatism is the mutuality it asserts between individual and political freedom, its beautiful idea of a free man in a free society. And it offers minorities the one thing they can never get from liberalism: human rather than racial dignity. I always secretly loved Malcolm X more than Martin Luther King Jr. because Malcolm wanted a fuller human dignity for blacks -- one independent of white moral wrestling. In a liberalism that wants to redeem the nation of its past, minorities can only be ciphers in white struggles of conscience.
Liberalism's glamour follows from its promise of a new American innocence. But the appeal of conservatism is relief from this supercilious idea. Innocence is not possible for America. This nation did what it did. And conservatism's appeal is that it does not bank on the recovery of lost innocence. It seeks the discipline of ordinary people rather than the virtuousness of extraordinary people. The challenge for conservatives today is simply self-acceptance, and even a little pride in the way we flail away at problems with an invisible hand.
10) Free Larry Summers
By Noam Scheiber
Why the White House needs to unshackle its economic oracle.
On a typical day, Larry Summers, the top White House economic adviser, sits in his office overlooking the Rose Garden and receives a near-endless succession of aides working on a stunning variety of issues. In a single, several-hour bloc, Summers might have meetings on housing, the auto industry, health care, technology policy, and the financial crisis, all of which he's exploring in subatomic detail. Summers is said to be fascinated with such off-the-beaten-path topics as the switch to digital television--he insists on understanding the physics behind the technology.
This image of Summers weighing bit rates and digital compression was somewhat daunting as I prepared to visit him on a recent Monday afternoon. All the more because Summers is known not just for his intellect, but for a bluntness that was legendary in his years as a Harvard professor. One former student recalls trying to explain his progress on a paper only to have Summers interrupt with: "So you're nowhere, right?" For days, I'd worried that Summers would dress me down like a frivolous undergraduate if I ventured something moronic.
It turns out I was hardly alone in this. Since the fall, when Barack Obama appointed Summers to head his National Economic Council (NEC), capital denizens have presumed the president's economic program will rise and fall on Summers's temperament, which some feared could undermine the administration's effectiveness. "Even Mr. Summers's allies," The New York Times wrote in December, wonder if he can "nurtur[e] the proposals of others." Much of the concern revolved around Summers's difficult tenure as president of Harvard, which ended amid controversy over his impolitic remarks about women.
When Summers trooped out to greet me, his shirt was still tucked in, but his pants had sagged several inches below their natural resting place. It gave him a vaguely grunge look--that is, if Nirvana fans preferred sleek brown slacks and salmon-colored ties. Summers eagerly shook my hand, then led me back to his wood-paneled office. Inside, he sank into an oversized yellow armchair. He is not exceptionally tall, but has a head out of proportion to the rest of his body. The longer we spoke, the more the chair seemed to swallow him up, until only the head remained. At a certain point I couldn't shake the impression it was just me and Summers's brain.
As at Harvard, Summers functions on exceedingly little sleep. (A former student told me Summers once praised his dedication after noticing he'd run a computation at 4 a.m.; the student didn't have the heart to tell him he'd queued it up at six the night before.) To power through the day, Summers relies on a punishing Diet Coke regimen. The combination of fatigue and extreme caffeine intake can produce the occasional verbal and physical tic: Summers is a chronic foot-tapper and sometimes turns over words and clauses like an engine that won't start.
Still, it was the contrast with Summers's graceless image that was most striking. On some level what I wanted from Summers was reassurance about the economy, and he seemed happy to oblige. When I asked about the differences between our current crisis and the Japanese "lost decade" of the 1990s, Summers soothingly explained that the Fed and the Obama administration had intervened much earlier and more aggressively than their Japanese counterparts, and that our bubble wasn't nearly as inflated. History suggests that "recovery doesn't come quickly and that the ultimate fiscal cost is high," he said, "but I don't think we are looking at the same set of challenges as Japan." When I wondered what steps he would take if there were no checks on his decision-making, Summers was deferential. "I think the right approach here is the president's approach," he cooed.
I'd gotten what I'd hoped for, in other words. Not a battering-ram but a warm, avuncular presence. Others have noticed this change, too. "Mindful of his reputation as an intellectual bulldozer, Mr. Summers is working hard to rein himself in," the Times followed-up in February. Newsweek recently found "signs that Summers really is learning to play well with others." And yet, once our interview was over, I felt strangely unfulfilled. Like I'd shown up for a deep- tissue massage, only to be rubbed down gently with pleasant-smelling oils. Without the pain and abrasiveness, how do you know it's really working?
At which point I began to worry: What if we in the press have gotten it wrong? Collegiality is all well and good. But, in this moment of global crisis, when indecision could be disastrous and a wrong decision even worse, shouldn't we want to unleash our hard-charging geniuses and get out of their way? Maybe the issue isn't whether Summers plays well with others, but whether Obama's economic effort should be led by a an ensemble cast or a single virtuoso performer.
Personality aside, Summers has long been associated with a certain tactical and strategic brashness. "I'm somebody who wants their errors to be of trying to do too much rather than trying to do too little," he told Portfolio magazine last September. One early outlet for this instinct was the college debate circuit, which Summers joined while an undergrad at MIT. Policy debate was a labor-intensive activity. The best college programs--Georgetown, Northwestern, Harvard--had professional coaches and up to two dozen debaters. The teams would spend hundreds of man-hours in the library each week researching proposals they would defend in tournaments. (The national-championship-winning proposal in 1974: a cap-and-trade program for limiting sulfur-dioxide emissions.) MIT was, by comparison, a relatively small program with only intermittent coaching. Unlike their rivals at other schools, who could take less demanding classes, the students' course loads often limited their prep time. Nonetheless, Summers was able to make himself into a top-flight debater.
Summers was known in debate circles for two qualities. The first was his unusual pace. Elite debaters in those days spoke at dizzying speeds so as to cram as many arguments and data points as possible into their allotted time. To the untrained ear, a matchup between top debaters would be an incomprehensible hum of varying pitches. But Summers spoke about 25 percent slower than most of his rivals. "He was not a speed king," says Tom Rollins, a friend and debate contemporary. This left Summers at a critical disadvantage, since, according to the rules, an unanswered argument is a conceded argument. It also elevated the importance of the second feature of Summers's debating style: a tactical sophistication that often allowed him to overcome his deficit of verbiage.
In one semi-famous episode, Summers and a partner appeared in the final round of a tournament at the University of Redlands. As usual at this stage of a competition, Summers was overmatched speed-wise--the opposing team had put forth several arguments in support of a plan to feed the starving masses. "Larry obviously saw that, if the round was judged conventionally, it would have been a wholesale slaughter," recalls Greg Rosenbaum, a friend who was in attendance. So, rather than rebut each argument, Summers simply ignored them. Instead, he alleged that they all relied on a key misinterpretation of an academic article, thereby collapsing the debate to a single question. Summers was, in effect, challenging the entire case against world hunger on a technicality. Amazingly, it half-worked. "The judges came to the conclusion that Larry was right, there was only one argument," recalls Rosenbaum. "They just happened to conclude he lost that one."
Summers's audacity succeeded more often than not. He was, for example, a feared practitioner of the so-called "business confidence disadvantage," or "biz con." The idea was to show that the other team's proposals were so radical they would send panic through the stock market and trigger an economic collapse. "He would force the debate onto his terms," says John Graham, another debate contemporary. One minute a debater would be arguing for a minimum wage or consumer-product regulation; the next, Summers would make him answer for a second Great Depression.
During his senior year of college, Summers was considering graduate school in both theoretical physics and economics. For weeks, he anguished over whether to pursue his passion (physics) or the family business (in addition to his economist parents, Summers has two uncles--Paul Samuelson and Kenneth Arrow--who won Nobel prizes in the field). After he finally decided on the latter, he explained his thinking to Rollins: "What does a bad theoretical physicist do for a living? He walks into an office, sits at a desk, and stares at a plain white sheet of paper." "But," Summers added, "there's a lot of work in the world for a bad economist."
Summers, of course, would go on to be one of the top economists of his generation. Several of the papers he wrote as a Harvard graduate student redefined whole swaths of the discipline, and they remain influential to this day. Summers would accept an assistant professorship at MIT long before submitting his dissertation and, three years later, win a tenured position back at Harvard. (At 28, he was among the youngest ever to achieve that status at the university.)
If Summers had one fault as a debater, it's that he was sometimes too unorthodox. "There were times I tried to convince him he should debate a little more from conventional wisdom," recalls Dallas Perkins, who coached Summers his senior year. But what was a weakness in the insular world of college debate drove Summers's success as a scholar. One paper he wrote as a grad student overturned economists' long-standing belief that the social costs of unemployment were low. The assumption had been that most people are out of work only briefly; Summers and a colleague found that a significant number went without work for long periods of time.
Other Summers papers chipped away at the idea that stock markets are efficient (that is, that prices move in response to real-world developments rather than investor psychology) and at the concept of "Ricardian equivalence." The conceit was that, under certain circumstances, cutting taxes or raising government benefits has little effect on people's spending habits. Because parents know their kids will eventually face higher taxes to close the deficit, they save the additional income and pass it down. Summers thought the idea was a stretch--that parents were far more greedy and self-serving than many economists assumed. He helped design a study showing that parents don't bequeath wealth to their kids for altruistic reasons; they bequeath it as a way to manipulate them into visiting more often.
When Summers took issue with a colleague's work, he would strafe them with questions from a seat in a seminar room, a style not uncommon in economics. "Isn't it obvious that the assumption on which your whole analysis rests is unrealistic?" he once demanded, in the presence of a Boston Globe reporter. And yet, for all his apparent gruffness, Summers's interaction with students had undeniable warmth. At any given moment, there might be a handful of students waiting outside his office. Some didn't even attend Harvard. An adviser at MIT or Yale had given up on their project and, in a final act of desperation, sent them to the young oracle on Massachusetts Avenue. Summers would briefly inspect the student's work, then start spewing ideas while the supplicant scribbled frenetically. "He'd say, 'Here's why what you're thinking is wrong. Here's what you should think instead,'" recalls MIT's Jonathan Gruber. The people on the receiving end are now some of the most prominent economists in the world. But many still credit Summers for the fact that they have a Ph.D. "Larry was basically the inspiration for [my dissertation]," says Gruber. "I was floundering."
Even as a young professor, Summers would attempt to restrain his own worst impulses, sometimes in poignantly ham-handed ways. Alan Krueger, an economics professor at Princeton, once earned a rare A-plus on Summers's public-finance exam. (After Krueger and I spoke, the administration nominated him to be assistant Treasury secretary for economic policy.) When Krueger got the test back, he noticed that Summers had written him a note. "You've clearly mastered the material," it said. "I'd be interested in having you work for me." But the words "having you work for me" had been crossed out. In their place, Summers had written "working with you on a paper this summer."
In truth, Summers had an ulterior motive for courting so many students. Perhaps ironically for someone so worried about stock-market bubbles, his research style could best be described as "highly leveraged." That is, Summers was most comfortable thinking up big ideas, then partnering with capable students and colleagues to execute them. Among other things, this methodology helped him publish more than 100 academic papers in roughly 15 years--an output that exceeds the entire life's work of many lesser economists. (More than one Summers protege joked to me about initially being flattered by his invitations, then learning, as one put it, that "Larry will work with anybody.")
By the late 1980s, Summers was brushing up against the limits of his ability to leverage himself. Jonathan Gruber recalls co-writing a paper not long after that came back from a journal with a number of proposed revisions. Many of the points were just wrong, prompting Summers to tell the editor, "Now I understand why guys of a certain age stop sending stuff to journals. It's annoying when people who don't know what they're talking about decide on whether your paper should get published." To get his ideas out, Summers still had to deal with all manner of scholarly bureaucracy--what Gruber calls "the stuff of life"--and it was beginning to create a bottleneck.
Around the same time, Summers made his first foray into politics. In the late '80s, an acquaintance introduced him to Robert Rubin, then a top executive at Goldman Sachs and a major Democratic donor. Rubin eventually helped pull Summers into the Dukakis campaign as an unpaid economic adviser.
Summers was a well-intentioned flop. He sometimes pushed the kind of proposals academic economists love--say, raising gasoline taxes or eliminating the minimum wage for teenagers--and which drive political hands batty. But the experience did, for the first time, cast his worldview in a more overtly political light. At the broadest level, Summers was a moderate liberal: deferential to markets when feasible (as in international trade), but convinced they fail with some regularity (hence his foray into behavioral finance). He believed the government should provide opportunity (especially educational) to those who lack it, in addition to cushioning the business cycle. Over the long term, he felt, a country's budget should balance and take up a modest, stable percentage of GDP.
Years later, the left would deride Summers as a crypto-conservative in part because of his coolness toward regulation during the go-go '90s. But this imputes far more ideology to Summers than he actually has. Unlike his friend Alan Greenspan, whose faith in markets has been near-theological, the source of Summers's hesitation was practical and intellectual. Summers believed financial market innovation was creating vast new efficiencies. He was fond of comparing it to the arrival of the jet engine, which spurred economic growth but made the inevitable crash much deadlier. The solution, he told The New Yorker's John Cassidy, was to lengthen runways, not limit travel. The elegance of such analogies clearly led him astray. (Summers jettisoned his earlier skepticism as the breadth of regulatory failure became apparent in recent years.)
Summers was living in Washington for a stint as the World Bank's chief economist when Bill Clinton ran for president in 1992. After Clinton won, Summers opted to place himself in consideration for a top economic job rather than return to Harvard in 1993. As Gruber puts it, a policy job was the perfect solution to Summers's bottleneck problem. In the academy, students were too inexperienced to flesh out the finer details of his papers, while colleagues would have been insulted by the suggestion. But, in Washington, you could give a staffer an assignment and ask them to report back in six months. Not only were they being paid to do it--they would be delighted by the attention.
In the end, Summers left the academy for the same reason he decided not to pursue theoretical physics: because he wanted his ideas to have broad reach. Another former student recalls Summers once telling him he'd consider a paper they were writing a success if it inspired 100 other economists to work on the same topic. The student had never heard someone so ambitious about influencing the profession.
Summers initially had his heart set on becoming chairman of the Council of Economic Advisers (CEA)--the White House's in-house think tank--like his mentor Martin Feldstein. (Feldstein had held the position under Reagan.) But liberal opponents torpedoed his chances by releasing a memo he'd signed during his World Bank days. The document, a provocative thought experiment about environmental policy, earned Summers the ire of Vice President Al Gore, who blocked his ascension to the post. (Thereafter, recalls one White House aide from the early '90s, "[Summers] would avoid the vice president like the plague. At meetings together, he would keep quiet.") Instead, Summers found himself at Treasury as undersecretary for international affairs.
Early on, Summers's political skills were raw. His unfailing directness, endearing to many in Cambridge, could be downright jarring in Washington. Bill Barreda, then a senior official on Treasury's international side, recalls preparing a memo for the new undersecretary. Summers began reading it in his presence, and, before finishing, opined: "You really like [topic] sentences." When testifying before Congress, Summers often wore a pained expression, as if somehow surprised by the quality of the questioning. In 1997, Summers famously complained to reporters that the evidence behind the GOP's argument for repealing the estate tax was "about as bad as it gets." "When it comes to the estate tax," he added unhelpfully, "there is no case other than selfishness."
And yet, whatever his liabilities, Summers was highly effective from the get- go. In December of 1994, the Mexican finance ministry alerted Summers's assistant secretary, Jeff Shafer, that the country was nearing a currency crisis. During the early '90s, Mexico had started down two paths that, together, proved unsustainable. First, the country ran large trade deficits. To pay for all the goods it was importing, Mexico needed dollars, which meant it had to sell government bonds. This led to the second problem: To appease all the foreign investors who worried the peso would lose value, Mexico issued certain short-term bonds--called "Tesobonos"--that were linked to the dollar.
This worked fine for a while. Foreign money flooded in as investors snatched up the Tesobonos. But, as the years passed, creditors began doubting that the government would pay off its bonds at the fixed exchange rate. Many began withdrawing their money, forcing the Mexicans to redeem the bonds for dollars. By the time Treasury tuned in, in late 1994, the dollars had almost run out and the government could no longer defend the peso-dollar exchange rate. The imminent decline of the peso would make Mexico's foreign debt more expensive and raise the risk of a default.
Worse, Treasury itself was in limbo. Then-Secretary Lloyd Bentsen had announced his retirement, but Bob Rubin, his successor, had yet to replace him. It fell to Summers--whose team included Shafer and a young deputy assistant secretary named Tim Geithner--to figure out the consequences of a Mexican collapse. By January 10, 1995, the Summers group had a tentative answer: The fallout could be several hundred thousand U.S. jobs and a 30 percent spike in illegal immigration. If Mexico infected other emerging markets, it could wind up shaving a point off U.S. GDP growth.
That same day, Summers accompanied Rubin to his Oval Office swearing in. Once President Clinton administered the oath, Rubin recalls in his memoir, the new Treasury secretary turned to the president and urged a massive loan package. He then gave the floor to Summers, who briefed the president and concluded that something on the order of $25 billion would be necessary. Surely he meant twenty-five million, George Stephanopoulos interjected. No, Summers said, "billion with a 'B.'" Clinton swallowed hard and, after weighing every angle, signed on.
The initial response from congressional leaders was also favorable. But the rank and file was hostile. Vermont's then-congressman, the socialist Bernie Sanders, told Rubin to "go back to your Wall Street friends [and] tell them to take the risk and not ask the American taxpayers." A freshman Republican named Steve Stockman accused Rubin of arranging a bailout to protect the investments he'd made while a partner at Goldman Sachs. Soon, even the once-supportive leaders were either quietly backtracking (Senate Majority Leader Bob Dole) or railing against the package outright (Banking Committee Chairman Alfonse D'Amato). It was what High Noon might have looked like if Gary Cooper had played a policy wonk.
As it became obvious that cooperation from Congress wouldn't be forthcoming, Rubin and Summers began to consider plan B. Back in 1934, Congress had given Treasury a pool of money called the "Exchange Stabilization Fund" (or ESF) to help smooth out exchange rates. Sixty years later, the fund stood at about $35 billion, and Treasury lawyers believed they had the authority to draw on it. And so, on January 30, with no congressional help in sight, Summers, Rubin, and Clinton's top White House aides decided to tap the ESF to the tune of $20 billion.
Still, even this amount was unlikely to restore confidence in Mexico. The only other source of money was the International Monetary Fund, and here's where Summers's occasional bullying actually served him (and the country) well. To help cajole what eventually became a $17.8 billion contribution out of managing director Michel Camdessus, Summers pushed and prodded relentlessly. "I remember late the night that this unfolded, in the early morning, Larry was in an adjoining office in rather strong terms telling the IMF they had to step up to the table here in a major way," recalls one former colleague.
By early March, the first U.S. installment of the nearly $40 billion package was flowing. By mid-May, there were signs it was working. By early '97, the Mexican government had completely paid off the loan--three years ahead of schedule.
When Summers emerged as a leading candidate to be Obama's Treasury secretary, the biggest obstacles were lingering questions from his searing experience at Harvard. Summers's remarks about the underrepresentation of women among scientists received most of the headlines. But it was his constant warring with the faculty over an ambitious reform agenda that probably did him in. (His rapport with the students, on the other hand, remained exceptional throughout. Even after he resigned, Summers would stop by pizza parties and dorm gatherings, according to the Times.)
As it happens, Summers's problem at Harvard wasn't his lack of political skill per se. It's that he'd misunderstood the kind of institution he was running. Summers had assumed Harvard was a pure meritocracy--where ideas win out on the basis of their strength and little else. His own experience as a professor there had taught him as much. When he proposed, say, revising the undergraduate curriculum to focus more on basic knowledge than on the latest intellectual fashions, he was prepared to defend the logic of the plan, not sweet-talk professors who felt threatened by it. But, as Summers told ProPublica's Paul Steiger early last year, "I just didn't fully appreciate the extent to which the university ... was a political kind of institution."
In truth, Summers's political aptitude had steadily risen throughout his tenure at Treasury. By the end of the Clinton administration, he'd mostly learned to check his legendary bluntness. He'd even let his playful side out. As a way of bonding with his charges, he once trekked to the Secret Service training facility in Beltsville, Maryland, where he learned to perform the so-called "J-turn"--a 180-degree maneuver at 60 miles per hour. (The Secret Service was one of the many agencies Treasury oversaw at the time, along with Customs and the ATF.)
Nowhere was the progress more evident than his dealings with Congress. The Summers who once rolled his eyes at questions from members was now catering to their every need. Summers traveled to Representative Charlie Stenholm's rural Texas district to talk Social Security reform with local farmers. He visited Representative Jim Kolbe in Arizona to inspect Customs enforcement procedures, a subject close to Kolbe's heart. When the administration asked Congress to re-up its IMF contribution, Summers painstakingly explained the issue to Representative Sonny Callahan of Alabama. "He learned to focus on how to make it very local, very specific to person X, madame Y, congressman Z," says Linda Robertson, a longtime Treasury legislative aide. "[Like] why someone like Sonny Callahan from Mobile, Alabama would care about the IMF being able to utilize some of its gold, replenish its resources--the fact that, okay, he's got manufacturing ... that translates into exports."
These skills served Summers well when he succeeded Rubin as Treasury secretary in 1999--as they did at the outset of the Obama administration. On December 16, Obama gathered his top advisers in Chicago to set the broad parameters of the stimulus plan. In addition to Summers, chief of staff Rahm Emanuel attended, as did Treasury Secretary Tim Geithner, budget director Peter Orszag, environmental czar Carol Browner, and a handful of other senior aides. The early discussions had centered on a measure in the neighborhood of $500 billion over two years, perhaps slightly higher. But, the week after Thanksgiving, Christina Romer, Obama's choice for CEA chair, had produced numbers suggesting the economic deterioration was much worse than expected.
It was Summers who concluded that the bill would have to be larger. "He was very, very focused on the macro impact--job creation, the magnitude of fiscal stimulus in 2009, the magnitude of fiscal stimulus in 2010," recalls one White House aide. The group accepted Summers's recommendation for up to $775 billion--then a very large number with few historical precedents--after four hours of deliberation. No one was bitterly opposed, but several questioned whether a stimulus of that size was truly necessary. Some wondered if it could survive Congress, and if it was even possible to spend so much so quickly. In the end, Summers helped persuade his colleagues that "doing too little poses a greater threat than doing too much," as he later explained in a Washington Post op-ed.
Summers's political touch was even more visible in his dealings with Congress. In early January, he trekked to the Hill to unveil the stimulus plan before the full complement of Senate Democrats. The meeting did not go well. The senators were exercised over Obama's proposed job-creation tax credit, which they said would be a windfall for companies already hiring, and the stinginess of its allocation for energy. "Not to overdramatize it, but he got an earful," recalls one Senate aide. Summers took it all in cheerfully. He pledged to take the senators' ideas back to the White House and, says the aide, remained in "listening mode" throughout. By the time Summers returned a few weeks later, the mood among the senators had lightened considerably. Summers, Emanuel, and White House congressional lobbyist Phil Schiliro had decided to drop the controversial tax provision and add more energy money (after Emanuel got a green light from the president). The Democratic senators were grateful for the responsiveness.
Within the administration, Summers also appears to be something of a political success. He and David Axelrod, Obama's top political adviser, are by all accounts mutual fans--Axelrod is regularly among the aides who prep him for Sunday talk shows. (In an e-mail, Axelrod raves about Summers's ability to talk "about the plight of the middle class, and how most people judge the economy, not by arcane economic formulas, but by how far their paychecks go.") Summers also remains close to Tim Geithner, his one-time special assistant. He spent much of February 10, the day Geithner announced the outlines of his widely panned Financial Stability Plan, on the phone heatedly defending the secretary to any reporter who would listen. (Summers insisted Geithner had been a victim of unfair expectations-setting in the press.)
At first glance, Summers might appear to have less to contribute on the bank and credit-market front, the most dangerous part of the current situation. His exposure to Wall Street over the years has been limited, and, in his scholarship, he has written only sparingly about financial crises and depressions. But, as a professor, Summers was often preoccupied with these phenomena in his endless banter with students and colleagues. The way Summers saw it, the Great Depression had been a problem of "multiple equilibria" gone awry. That is, he believed the economy could just as easily have been booming as shrinking. All it took was for everyone to believe that everyone else would start producing again, and they would too. But, since everyone believed everyone else would stay idle, they had no incentive to produce anything either. There was no good reason the economy should have been in this rut. But, once there, it was spectacularly difficult to get out.
Jim Hines, who was a grad student in those days, recalls Summers grappling with this idea at length. He'd often compare it to the market for men's suits, which are typically sold in even sizes but not odd ones. "How did we settle on forty, forty-two, forty-four?" he'd ask, "and not thirty-nine, forty-one, forty-three?" Summers could think of no explanation. But what was evident was that, once everyone had settled on 40s and 42s, almost no off-the-rack manufacturer would make a 41. "Larry likened that"--being stuck in a world of even sizes--"to the Great Depression," Hines recalls.
In 1991, Summers collected some of his thoughts on the subject in an informal paper for a volume edited by Martin Feldstein. At the time, the economics profession was still consumed by the market crash of October 1987--the largest one-day percentage drop in stock-market history. Perhaps more importantly, many economists wondered why the crash hadn't triggered a recession. Some suggested that the link between Wall Street's performance and the economy's performance--so devastating in the pre-war era--had been severed by modern policymaking.
Summers countered that it would be a mistake to draw confidence from 1987. He spent part of the paper constructing a nightmare scenario: In the run-up to a boom, regulators approved "mini-stock market futures contracts" that allowed investors to control $35,000 worth of stock with just $2,000 in cash. "Lawyers and dentists explained to one another that investing without margin was a mistake," Summers drolly observed. Then came the crash, which, in an eerily prescient detail, ensued "after a poorly supervised trader lost $500 million ... in the newly developed foreign-mortgage-backed securities market."
Before long, banks were failing, credit was contracting, and bodies were piling up faster than in an '80s slasher flick. "The result was the worst recession since the Depression," Summers wrote. And none of it had required a leap that was implausible in the early '90s or today. The only way to avoid this gruesome fate, Summers concluded, was for the government to take quick, bold steps to restore confidence.
As head of the National Economic Council, Summers should be well-situated to impose this vision. Though the traditional role of the NEC chairman is to synthesize all the economic options that bubble up from various corners of an administration and present them dispassionately to the president, no one pretends that Summers's NEC much resembles this model. Thanks to his vast intellectual range and the urgency of the moment, Summers has thus far taken a leading role in the housing plan, the auto industry rescue, health care, and energy, in addition to the stimulus. But, when it comes to the bank bailout, the consensus is that Summers has scrupulously respected Geithner's turf. It's not that Summers doesn't have opinions of his own, or that he doesn't share them with Geithner. But, to the extent the two disagree, it's Geithner who gets his way. This is perhaps one reason why the bank bailout seems, in terms of its aggressiveness and boldness, the least Summers-like of all the administration's economic plans.
In July, when he was still a civilian, Summers argued in the Financial Times that the government should use its "receivership power" over Fannie Mae and Freddie Mac to wipe out holders of regular and preferred stock and certain types of bonds, "conserving cash for the benefit of taxpayers." He said it should run the companies until the financial crisis passed--perhaps a period of several years--before selling off certain components to the private sector. "It is a time for decisive action," Summers wrote.
As the financial crisis has deepened, many economists have proposed something roughly analogous for the country's largest commercial banks. Geithner has so far resisted. The Treasury secretary has opted instead to bolster the balance sheets of hard-up banks with capital from last fall's bank bailout, and to provide government financing for investors interested in purchasing depressed assets. In fairness, there are any number of reasons why someone might support nationalization for Fannie and Freddie but oppose it for large banks, whose balance sheets and business models are far more complex. Still, one can't help wondering if the administration might now be inching toward some version of Summers's FT approach had he been in charge at Treasury. (Summers declined to comment on hypotheticals.)
There is surely real value to Summers's respect for institutional boundaries. And no one thinks Larry Summers has suddenly become Sally Quinn. Colleagues say he remains fiercely opinionated in meetings; his humor is sometimes cutting.
Still, the question arises: If the Obama administration fails to revive the economy, will it be because Summers is too influential over economic policy, or not influential enough? If not for the Harvard flap, Summers might be running Treasury, which, owing to its size, can bring far more infrastructure to bear on the economic crisis than NEC. But the Obama administration reportedly feared a difficult confirmation battle, making the White House post more attractive. (To be sure, there were other reasons Summers didn't get the job, like Obama's desire for a fresh face.)
Of course, even if Summers had overcome concerns about his abrasiveness and ascended to the Treasury job, he would face still another set of hurdles. There is, for example, the lesson Rubin shares in his book--"the difficulties our political processes have in dealing effectively with issues that involve technical complexities, shorter-term cost to achieve longer-term gain, incomplete information and uncertain outcomes, opportunities for political advantage, and inadequate understanding." Which is to say, it's not clear our political system is even equipped to deal with economic crisis. With the financial markets teetering and Congress refusing to give the administration another cent to save the crumbling banking system, one could be forgiven for thinking the lesson still applies. Even the stimulus, bold when it was conceived, no longer looks sufficient. But Congress is unlikely to part with more money any time soon.
When I asked Summers about Rubin's worry, he was mostly at ease. Then I reminded him that he'd once expressed similar concerns himself. In the scenario he'd cooked up for his article in 1991, Congress had insisted on cutting the deficit in the middle of the crisis, taking money out of the economy at the very moment it was needed most. Political leaders feared that "increases in budget deficits would have disastrous consequences for business confidence," Summers had written. "Spending was cut, and even some minor taxes were increased." The effect was to push the country into the abyss.
Summers thought for a minute and conceded the point: "There are times when it would be far easier as an economist to make a recommendation and move forward." Then he added, quite diplomatically, "But checks and balances, including the give and take with Congress, are an essential part of democracy, and we are far better with the process we have in place than without."
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