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Why We're Rescuing Wall Street and Not the Auto Industry: Citigroup Versus General Motors

2008-11-22T18:29:34Z

Citigroup was once the biggest U.S. bank. General Motors was once the biggest automaker in the world. Now, both are on the brink. Yet Citigroup is likely to be rescued within days. General Motors may not be rescued at all. Why the difference?

Viewed from Wall Street, Citi is too big and important to be allowed to fail while GM is simply a big, clunky old manufacturing company that can go into chapter 11 and reorganize itself. The newly conventional wisdom on the Street is that the failure of the Treasury and the Fed to save Lehman Brothers was a grave mistake because Lehman's demise caused creditors and investors to panic, which turned the sub-prime loan mess into a financial catastrophe -- a mistake that must not occur again. So, by this view, the government must do everything and anything to keep Citi alive. But GM? GM is just ... jobs and communities.

The Street's view of the world is fundamentally flawed. Banks are important to the economy because they're financial "intermediaries." They connect savers with investors and borrowers. This is a vital function, but there's nothing magical about it. At any given time the world contains a vast pool of money that can be put to all sorts of uses. Financial intermediaries simply link the pool to the uses.

To be sure, savers need to believe that intermediaries are trustworthy; otherwise, savers will prefer the underside of their mattresses. That's why governments regulate intermediaries, insure deposits, and do whatever else needs to be done to make savers feel safe. What governments and societies fear most are "runs" on banks -- panicked efforts by depositors to pull their money out all at once, before banks can possibly collect the money from all those who have used it to borrow or invest. That's what happened in the 1930s.

But the current panic on Wall Street is not a "run" in this sense. It has almost nothing to do with banks' roles as financial intermediaries. It's a run on the shares of Wall Street banks, not a run on the pool of savings they oversee. The mutual funds, pension funds, and deposits they hold are perfectly safe.

Before the asset bubbles burst, financial institutions were generating whopping profits, so naturally they attracted many investors and creditors. After the burst, the profits disappeared and their share prices plunged. These days, you'd be hard pressed to find many people who want to invest in or lend to financial institutions. So what? You'd be just as hard pressed to find people wanting to invest or lend to the auto companies. Lehman's demise cost many investors and creditors lots of money, but they were investors and creditors in Lehman, not in the real economy. Citigroup had a market value of $274 billion at the end of 2006. Now its value is about $21 billion. That's awful news for Citi, its executives and traders, and its investors and creditors. But it's not necessarily awful news for the economy as a whole. Even if Citigroup were to go belly up, the real economy would not be seriously harmed. The funds overseen by Citi would be remain; fund managers would shift them to other banks.

So Citigroup is not much different from General Motors. It's a company that once made lots of money but, through a series of management blunders, is now losing money big time. Citi's shareholders and creditors are taking a beating, just like the shareholders and creditors of GM.

So why save Citi and not GM? It's not at all clear. In fact, there may be more reason to do the reverse. GM has a far greater impact on jobs and communities. Add parts suppliers and their employees, and the number of middle-class and blue-collar jobs dependent on GM is many multiples that of Citi. And the potential social costs of GM's demise, or even major shrinkage, is much larger than Citi's -- including everything from unemployment insurance to lost tax revenues to families suddenly without health insurance to entire communities whose infrastructure and housing may become nearly worthless. I'm not arguing that GM should be bailed out; as I've noted elsewhere, GM's creditors, shareholders, executives, and workers should have to make substantial sacrifices before taxpayers should be expected to sacrifice as well.

Nonetheless, Citi is about to be bailed out while GM is allowed to languish. That's because Wall Street's self-serving view of the unique role of financial institutions is mirrored in the two agencies that run the American economy -- the Treasury and the Fed. Their job, as they see it, is to keep the financial economy "sound," by which they mean keeping Wall Street's own investors and creditors reasonably happy.

Because the public doesn't understand the intricacies of finance, it's easily persuaded that this is definition of "soundness" is the same as keeping savings flowing to the banks so that the banks can lend to them to Main Street. That's why the public and its representatives have committed $700 billion of taxpayer money to Wall Street and another $500 to $600 billion of subsidized loans to the Street from the Fed -- bailing out the investors and creditors of every major bank, including , any moment, Citi -- only to discover, at the end of this frantic and unbelievably expensive exercise, that American jobs and communities are more endangered than they were at the start.

SOCIALISM IN ONE FAILED INDUSTRY: Onward for Labor

2008-11-22T18:13:36Z

Walter Reuther, the iconic leader of the UAW, had an idea back in the post WW II era. Build America's labor movement by organizing hard, striking and negotiating, but tie the union's future to the companies that keep America moving--GM, Ford, etc. He used to characterize it as 'social democracy' in one union or it could have been called 'social democracy' in one industry--the Wall Street Journal has probably tagged it as such, come to think of it. It was brilliant at the time. Now, not so much.

Reuther built his union by building bargaining power that created a middle class and built an organized progressive left at the same time. Under his leadership the union was key to the burgeoning civil rights movement and even to the creation of the New Left and SDS, many of whose leaders had disdain for this bastion of the old left. (It was at the UAW retreat, Port Huron, where the famous SDS statement was drafted. The retreat had arranged for the young activists by Millie Jeffrey, a Reutherite UAW leader and feminist leader whose daughter was among the SDS founders).

Reuther and his minions formulated a strategy where their members would earn enough to grow their families, retire without fear for want, and have health care for life, all the things that progressives today argue that we want for this nation. But the world has changed so how do we get there from here?

Future Reutherites, like former UAW president Doug Frazer,who came from hearty Scottish socialist stock, bargained themselves a seat on the company board, which was revolutionary at the time--sitting in the board room of Chrysler, but as we've seen, this seat didn't earn the union the ability it needed to swim while the companies sunk.

In hindsight, this strategy, while it worked when a postwar America experienced an economic and industrial boom and did so without the strains and tests of a new global economy, left the union completely at the mercy of bad corporate decisions and greedy corporate ceos. Today, the UAW members await congressional aide to bail out short-sighted corporate players. Countless retirees are holding their breath as current union members get sadly pitted against retirees for benefits and more, and all the workers could end up as just one more set of creditors at the bankrupt companies' door.

All of this is not to say that Reuther was wrong. He was, I think, right for his time--and his boldness allowed him to build a union whose power was masterful, drawing from intellectuals and others to enhance the union's stretch. Moreover, he was a visionary and he saw the labor movement as something beyond simply the shop floor but an engine and a catalyst for making change in the country and the world (he was one of the earliest opponents to the Vietnam War, and as a strong anti-Communist, he articulated a foreign policy for America that promoted democracy abroad by strengthening unions overseas). But the times have changed and in ways that Reuther and others around him could not have been expected to imagine.

The fact is that industrial unionism succeeded; but their industries failed. The economy has shifted and so must our thinking about how to build workers' power.

So, now what? We need a labor movement as bold as Reuther's was before (and it wasn't only Reuther-others like John L. Lewis of the Mineworkers and Sidney Hillman of the Clothing Workers were equally iconoclastic--it's just that their industries--coal and clothing/textile--took a beating long before the auto industry...) with new ideas and strategies. The precondition is there now with the incoming Obama administration, which was a precondition to giving the unions breathing space to move forward.

Fighting now for a national response to issues like health care, pensions and right to organize are key to this new global reality. Minimum wage laws are a model for this; while unions bargain wages for their members, having a federal law with a legally mandated minimum guarantees legal protection for workers whether their company is unionized or not and allows unions a bit of space when negotiating wages so that the wages aren't falling through the floor (which is not to say that the minimum wage is enough--it is, after all, a minimum :-)

There needs to be a universal approach to social justice that will empower workers and put the union movement in the center of the struggle for social change once again. There needs to be a recognition that we live in a global economy, where trade is a factor, and that workers and their unions need to grow together to retool for an ever-changing economic reality. There needs to be a rethinking about how workers identify as union members and what unions can deliver and how they position themselves in the broader progressive sphere. There needs....there needs. The needs are great and finally, we have a playing field upon which the needs can be realized. And probably in ways that past generations never imagined --

Frankenstein in Mesopotamia

2008-11-21T23:22:00Z

The pact being negotiated between the US and Baghdad governments includes a direct rebuff to president-elect Barack Obama's promised policy of withdrawing American combat troops in 16-18 months. The pact instead would leave those troops in place until the end of 2011, a doubling of the timeline to which Obama pledged himself. But that's not all.

The most important things, some say, are the things left unsaid. If so, the unmentionable thing would be the police state America is leaving behind in Baghdad.

Finally, human rights observers agree that there are 40-50,000 Iraqis currently held in detention centers under either US or Iraqi control. Under terms of the pact, "we're getting out of the detainee business", says the US military spokesman in Iraq. The US-run camps, known as Bucca and Cropper, hold at least 17,000 detainees under a US-declared "security detention" doctrine that does not exist in either American or Iraqi law. According to Human Rights Watch, they are held "for indefinite periods, without judicial review, and under military processes that do not meet international standards." Most of them - at least 12,000 - were mistakenly seized in American sweeps or played marginal roles the resistance. Those who are released are often killed by Shi'a death squads.

If the US and Iraqi governments were to seek a renewal of the United Nations reauthorization when it expires on December 31, chances are that accepted human rights standards would be demanded for the Iraqis detainees, such as access to legal council, family members and international observers.

But under the proposed Iraq-US pact, the 17,000 will be shifted from US to Iraqi detention facilities, a transition to even greater darkness. Knowing this, the Sunni parliamentary bloc is demanding amnesty for most of them.

The concerns are deadly serious. I interviewed an American contractor, a former Marine, just returned from Baghdad in 2005, one paid to protect the Sunni delegation in the Green Zone. He bitterly spoke of Sunni bodies, bullets lodged in their heads from short range, lye disfiguring their faces, being dumped in the streets, The 2007 Baker-Hamilton Study group issued a one-sentence confirmation that the Iraqi police "routinely engage in sectarian violence, including the unnecessary detention, torture and targeted execution of Sunni Arab civilians."

Before the Baker-Hamilton finding, there were other revelations. The Times revealed secret prisons and torture sites in Baghdad which reported directly to the Interior Ministry, itself under sectarian Shi'a control. The Times also described "black sites" at Camp Nama, where an American task force beat, kicked, blindfolded and forced Iraqi inmates to crouch in 6-by-8 cubicles in a prison called Hotel California, where the official motto was "No Blood, No Foul."

A Congressionally-created law enforcement commission concluded in September 2007 that the Ministry of Interior is "a ministry in name only...widely regarded as dysfunctional and sectarian."

Even the Bush administration in 2007 confessed "evidence of sectarian bias in the appointment of senior military and police commanders [and] target lists that bypassed operational commanders and directed lower-level intelligence officers to make arrests, primarily of Sunnis."

Dry language, dry bones

Antiseptic language is sometimes necessary in journalism and law to make objective evaluations. But it also can suppress moral and emotional responses to suffering and serve as a sedative in managing public opinion. Riveting stories of torture dungeons don't rate much in the media in comparison to domestic violence between white Americans. For instance, clear evidence that Sunni children were being murdered by the Sunni captors, persuasive to a top US military investigator, made it into the Salt Lake Tribune, but not much further. The US Judge Advocate happened to be from Utah, making it a local story.

Counterinsurgency often is framed as winning hearts and minds, not as crushing the alleged insurgents to protect the civilian population. In South Vietnam, that led to "strategic hamlets" and the Phoenix program. In Central America, it was death squads who killed priests, nuns and thousands of civilians. In both cases, American and world opinion was shocked.

In the case of Iraq, there is silence in the West.

For example, there has not been a single Congressional inquiry into the oblique revelations in Bob Woodward's latest book about secret operations launched in May 2006 to "locate, target, and kill individuals in extremist groups". The top intelligence adviser on these operations, Derek Harvey, told Woodward that the killings gave him orgasms. These were extra-judicial killings, with the Pentagon acting as judge, jury and executioner. The definition of "extremist" was stretched to include anyone named by an informant as a supporter of the Sunni insurgency, supported by an overwhelming majority of Sunnis.

During Vietnam, the Phoenix program, exposed as killing over 20,000 Vietcong suspects, was closed down after an outburst of ethical fury. In 2004, the Phoenix program's revival was recommended by Dr. David Kilkullen, described in the Washington Post as "chief adviser on counterinsurgency operations" to Gen. David Petraeus. Kilkullen advocated a "global Phoenix program" to combat global terror in a 2004 article in Small Wars Journal. He later reissued the article without the Phoenix label, having already described the Phoenix project as "unfairly maligned" and "highly effective." He also advocates applying "armed social science" against the "physical and mental vulnerabilities" of Iraqi detainees. He walks the streets of Washington today, widely accepted in the world of national security advisers. No one in that select establishment has ever criticised his writings.

Americans already pay for this sectarian repression - which even includes the diminishment of Christian seats in parliament - with $22 billion in tax dollars from 2003 through 2007 for American advisers to the Interior Ministry, police and prison guards. In 2007, there were 90 American advisers assigned to the interior ministry, which much of training of police and prison personnel is outsourced to contractors like DynCorps, according to Congressional oversight hearings.

One of the trainers has been Gen. James Steele, a veteran of the Central American counterinsurgency wars, who was with the US Civil Police Assistance Training Team when the sectarian Iraqi militias began operating under official cover. He was quoted in 2006 as "not regretting their creation."

How has this happened? Presumably the public lacks any sympathy for individuals accused of Islamic terrorism. But there has been ample uproar over torture at Abu Graeb and US foreign policy generally. The public simply doesn't know much at all about the detention camps in Iraq. Most of the concerned NGOs take up less controversial causes than Iraqi inmates for their fundraising. Human rights insiders accept the paradigm that a democratic, pluralistic Iraq is a work in progress, still lacking an independent judiciary and ACLU watchdogs of their own. The international Red Cross has agrees to keep its findings secret. The peace movement is locked into an exclusive "out now" framework that subordinates police and prison issues to the margins. The Pentagon therefore succeeds in fabricating a new mirage in the desert to replace the discredited one. As our combat troops are replaced by low-visibility advisers, amnesia could take over completely, while shame and hatred beget a new generation of insurgents.

The US administration could do something about this Frankenstein. It could use its remaining leverage to insist on the release of the detainees or the application of enforceable human rights standards and access for the media and human rights workers.

But Congress and the media seem to think that a sectarian police state is the ugly price that must be paid for sharply reducing American casualties and reducing our footprint in Iraq. The hot debate among judge advocates, pro bono lawyers and Congressional investigators, is about a few hundred Guantanamo detainees, not the dark underside of counterinsurgency.

The next stop is Afghanistan, where another 50,000 detainees fester under similar conditions to Iraq, and the British envoy recently recommended an "acceptable dictator." Instead of addressing the human rights crisis in that country, the envoy suggest that "we should think of preparing our public opinion" for dictatorship as the necessary outcome.#

Tom Hayden can be reached at tomhayden.com. His recent books are Ending the War in Iraq [2007] and The Tom Hayden Reader [2008].

Cheney's Esurience

2008-11-21T23:06:18Z

Bart's lengthy and admirably lucid response raises one central point that I would like to underscore: Cheney's concentration of power was not a good thing--not for him, not for Bush, not for the U.S. Exactly as Bart notes, it meant that policy was made without the participation of other top officials. Had the Iraq War been thoroughly debated and studied rather than planned by a small coterie of officials, it would surely have been prepared for more carefully.

Fortunately, a number of conservatives have been critical of the Bush administration, noting that it has run roughshod over traditional constitutional restraints by, again and again, invoking the war on terror. Bush has not governed conservatively. If anything, his goals have been Wilsonian--and it was Woodrow Wilson who locked up thousands during World War I for disagreeing with him, an unhappy precedent for the Bush administration, which has apparently conducted thousands of "renditions", i.e., kidnappings, of foreigners. This will be a permanent blot on the escutcheon of the U.S.

I, for one, have never been able to understand how those conservatives, who profess to admire small government, can countenance the sweeping measures espoused by the likes of Cheney and David Addington and John Yoo, esurient for more and more power. I suspect that Bart was able to tap so many conservative sources for his book precisely because of the incredulity and hostility that Cheney and Addington ended up engendering among principled conservatives. Several tips of the hat, once again, to Bart for his assiduous reporting and meticulous reconstruction of the Cheney era.

Angler Wrap-Up: Some Responses

2008-11-21T23:00:27Z

So many intriguing points, so little time.

Jake asked if I took on Cheney's working style and wrote from a subterranean lair. Can't disclose that. ;-)

On Spencer's quest for a grand unified theory, I generally agree that Cheney did not transform himself from the administration of Bush the father to Bush the son, and that much of the apparent change can be explained by the absence of counterweights the second time around. I also agree that Cheney believes the expansion of executive power is a good thing, regardless of the particular dispute at hand, but I can't endorse Spencer's view that this is a quest for power for its own sake alone. Cheney believes the executive branch, and the president as its chief, is the only one capable of responding with the swiftness and unity of purpose required to defend vital national interests. Anyone would travel part of the way with Cheney on this -- nobody serious could argue for government by plebiscite, or that every executive decision must first be put to Congress and the Supreme Court -- but my book argues that Cheney misreads the Federalist papers and takes the point way too far.

There have been several substantive questions and arguments here about the NSA's warrantless surveillance program. I'll try to address those separately, in one last post.

David asks for more on Cheney's motives for the Iraq war. I'd love to know more myself. The central point made by his own senior staffers -- they include Aaron Friedberg, Steve Yates and David Wurmser, speaking on the record -- was that Cheney sought a "demonstration effect" in Iraq. David sees a conflict between this explanation and Ron Suskind's "one percent doctrine." I see them as two sides of the coin. Cheney really did fear a potential nexus among hostile states, terrorists, and the WMD that one might give the other. Suskind may simplify it a bit too much with his "one percent doctrine," but Cheney did believe in addressing some "high consequence, low probability events" as if they were clear and present. (See e.g. the narrative in Angler about Cheney and the smallpox vaccine.) Yes, Cheney sought to prevent the formation of the much-feared nexus in Iraq, but that was not the biggest thing on his mind. There were hostile governments he worried about even more, but they were less attractive venues of war. The "demonstration effect" explains Iraq, in substantial part, as a war to reestablish deterrence with the others.

On the question of Bush's relationship with Cheney, which David and Jake both ask, there's no single answer. On page 388 I say Cheney acted "sometimes at Bush's direction, sometimes with his tacit consent, and sometimes without the president's apparent awareness." The book has plenty of examples of each. So Paul is correct to say that Cheney can't take the heat for all the procedural fouls:

The president knew he had an EPA administrator and an Attorney General, but apparently thought he could make certain decisions without hearing (or hearing further) from them. Unless Cheney falsely claimed that the official in question was on board, the main issue here is the president's approach, not Cheney's.

But there are other stories in Angler -- and one of them takes up two whole chapters -- in which Cheney left Bush unaware of vigorous debate, and Bush signed orders in the dark. Partly because of these events, the Bush-Cheney relationship changed. Over time, my narrative shows a president who grew more confident in his own judgments and less confident in Cheney's.

In Obama's Washington, Ivy Leaguers Uber Alles?

2008-11-21T22:43:44Z

I've seen columnists become obsessed; I've seen them rage at or kiss up to the objects of their obsessions. But nothing - not even my own supposed obsession with New York Times columnist David Brooks -- compares with his decade-long, love-hate fixation on the Ivy League, the "love" side of it on display in his column today celebrating an influx of Clinton Ivy Leaguers into the Obama administration.

In a gloating, 2001 Wall Street Journal essay, "Bush In, Ivy Out," Brooks ridiculed Clinton Administration Ivy leaguers who were then being replaced by real Americans "from inland state schools" under two apostate Yalies, George W. Bush and Dick Cheney: "You couldn't have swung an ax in Bill Clinton's cabinet room without hitting a bunch of Ivy League grads," Brooks snarked, getting meaner from then on. To him, they were all liberal elitists.

Now Brooks is stroking many of the very same people as they return to Washington. He begins by teasing them, much as he did in 2001: "If a foreign enemy attacks the United States during the Harvard-Yale game [in] the next four years, we're screwed." But this time his column gets nicer and nicer, and something deeper and more troubling is driving this than Brooks' desire to have these people return his calls.

For years, Brooks' Ivy fixation has kept him see-sawing: On the one hand, he often displays the pariah's bitter ressentiment toward Yale and Harvard, borne of a slavish attraction to his heart's lost desire (he went to the University of Chicago, so near and yet so far). On the other, Brooks began to display a parvenu's compulsive ingratiation shortly before the Yale Cold War historian John Gaddis, the Reagan diplomat Charles Hill, and other Yale neo-cons welcomed him for a semester in 2002 to teach a course, to sell the Iraq War to students, and to promote his hosts' Bush-worshipping Grand Strategy program in subsequent columns at the Times.

Only a year before, in his Wall Street Journal essay, Brooks had gloated that cleansing Washington of Ivy Leaguers would rid the republic of their characteristic erudite bluffing, arrogant insouciance, and other unrebuttable presumptions of superiority that arouse "both awe and silent hatred" in regular Americans.

Surveying the Bush team, he'd exulted that Condoleezza Rice had gone to the University of Denver, Colin Powell to the City College of New York, Paul O'Neill to Fresno State, and Dick Cheney to the University of Wyoming after dropping out of Yale, and that "Karl Rove, the brains behind the whole operation, has no college degree at all."

At last, Brooks enthused, we'd be free of Ivy Leaguers who "know three facts about absolutely everything, and have been taught to weave these meager strands into conversational patter so fluid that it renders their full-of-it-ness irrelevant." No longer would we suffer the "Paranoiaphilia" of Yalies like Hillary Clinton who assume "that there is a small, tightly knit conspiracy that secretly runs the world" and who, "instead of hating this elite, ...love it because they think they are in it."

No longer would we have to endure these people's "pseudo-omniscience," acquired "only at a truly expensive educational institution, where you spend your hours exhaustively one-upping the know-it-all weenies who share your cafeteria table."

Instead, Brooks announced, "The skills [George Bush] acquired in the Texas oil business are suited for a world in which success and failure are measured by tangible accomplishments, like oil production levels and after-tax profits," so unlike Ivy League presumptions "suited to a world in which the definition of success is totally unrelated to tangible accomplishment of any kind."

If you ask me, Brooks wasn't far off the mark in spotting what mesmerizes but at the same time galls so many about the Ivy League, with good reason. In September, 2003, he devoted his very first Times column, "Bred for Power," to that very subject, the republic's yearning for wise guardians.

Brooks does understand that while America owes much historically to Yale's and Harvard's civic-republican leadership-training, it owes as much to graduates of "inland state schools" and even of no schools at all. I've argued that the Ivies now risk becoming career factories and cultural gallerias for a global ruling class accountable to no polity or moral code. The American republic deserves better than that, and so does the world.

So what does Brooks say now that the pseudo-omniscient Ivy Leaguers he took down a peg in 2001 are returning to Washington under Obama? He writes that they're wonderful! Gone are the know-it-all bluffing, the paranoiaphilia, and the other presumptions he spotlighted in 2001. Now, Brooks avers that "much as I want to resent these overeducated Achievatrons ..., I find myself tremendously impressed....."

Brooks names many of these admirable people. Suffice it to say here that some of them are the same people he had in mind, though he didn't actually name them, when he lampooned Ivy Leaguers in 2001.

This time, the people he called bluffers "are twice as smart as the poor reporters who have to cover them, three times if you include the columnists." This time, they're "open-minded individuals who are persuadable by evidence..... They are admired professionals,..... hardheaded and pragmatic." This time, "They're thinking holistically -- there's a nice balance of policy wonks, governors and legislators. They're also thinking strategically."

Mirabile dictu, they are "the best of the Washington insiders. Obama seems to have dispensed with the romantic and failed notion that you need inexperienced 'fresh faces' to change things."

Isn't that the very notion Brooks touted in 2001? Never mind. This time, "Obama is not bringing along an insular coterie of lifelong aides who depend upon him for their well-being." (Such as Karl Rove, whom Brooks defended to the end?)

Finally, gone is Brooks' contempt for Ivy League posturing "suited to a world in which the definition of success is totally unrelated to tangible accomplishment of any kind," unlike Bush's skills in the oil fields of Texas. This time, the Ivy Leaguers on Obama's team approach problems "with practical creativity. Any think tanker can come up with broad doctrines, but it is rare to find people who can give the president a list of concrete steps he can do day by day to advance American interests."

Have Obama's Ivy Leaguers all had civic-republican epiphanies and moved in Brooks' direction since 2001? Nope. Has Brooks changed, then? Not really, although it's fair to say that lately he's been confused. He knows that the country has repudiated the conservative movement and Republican Party which he defended sinuously for all of his adult life until corruption, Katrina, the revelations of Cobra II about the Iraq War, and the financial meltdown began forcing him to distance himself from most of what he'd championed.

So here he is, a man without a clear partisan position on the media's color-coded spectrum, fighting for a niche by congratulating the "liberal elitist" victors for not veering too far to the left. Yet his emotional Ivy League see-saw continues, and while he'll purr happily if these people return his calls, he'll waste no time rediscovering their arrogance and myopia when they don't.

The moment Obama and the enlarged Democratic Congress take office and begin to manage the mess we're in, conservatives will pretend that it wasn't really George Bush, Henry Paulson, and other Republicans who reconstituted themselves literally, to almost everyone's shock, as Marx's ruling committee of the bourgeoisie and made "the corporate state" not a shibboleth but a reality. No, conservatives will be back to blaming Fanny Mae, Freddie Mac, and Barney Frank for having brought us to statist socialism, and you can bet they'll be railing at Ivy League neo-liberals as the villains pulling the strings.

Brooks is too smart for that, and he desperately wants these likely targets of right-wing venom to talk to him. But he'll betray them in the end, because his damning and praising of these Ivy League neo-liberals are but two sides of the same coin -- the coin of an obsession and ressentiment he shares with many of his readers, including some Ivy League students themselves. More of his record on this some other time.

Facts, Not Fiction

2008-11-21T22:39:37Z

I doubt I can break much ground on whether Angler is pro- or anti-Cheney, or sufficiently balanced, or correct in its judgments. I'm happy to leave that judgment to readers. I do not claim, as I think my interlocutors here understand, that Angler is objective if that means it has no point of view. Not only is that impossible, but it's not what I wanted. Most of the work of the book is to tell new stories about what really happened, but Angler also tries to say why and how it happened, too, and in some cases to describe the consequences. I intended to make judgments on those things from a critical distance. I don't preoccupy myself as often with the normative, but I don't think that lands me in a "soup of relativisim," either. Reporting, analysis and commentary are not fully separable, probably, but that does not mean they are not fundamentally different things.

That's why I'm unpersuaded by many of Paul's examples:

He finds that Cheney ... produced a backlash that nearly brought down President Bush....

Bart finds that, thanks to Cheney, "the government collected information on a scale that potentially touched every American" (page 146). In a chapter called "Dark Side," he finds that the U.S. flouted "the negotiating history, and decades of practice under U.S. leadership" when, under Cheney's direction, we looked for "loopholes" to the Geneva Convention that would enable us to say accused terrorists have no Geneva rights (page 169)....

Bart finds that Cheney's policies environmental policies ran contrary to law and science (page 200) and harmed the environment ("no one filed an environment impact statement on the vice president," page 198). He suggests a number of times that, with respect to the war on terrorism, the overall policy Cheney pushed for and implemented produced something akin to "1967" (the beginning of the end in Vietnam), not "1947" (the beginning of a successful approach to the Cold War).

With due respect, those are are not commentaries on my part. They are facts, with substantial evidence marshalled for each of them, and thus far they are not even disputed by Cheney or his aides. The 1947-or-1967 comparison was made by Aaron Friedberg, Cheney's chief strategic planner for foreign affairs, and the verdict I described was his.

I wrote earlier that I'd describe some of my personal assessments of Cheney. Some are explicit in the book, others not. David summarized one set of judgments when he wrote:

Cheney is routinely described with awe and reverence by many of the sources here--and by and large Bart lets these judgments stand without challenge. Old colleagues and new visitors to Cheney's office alike paint the vice president as a quick study, exhibiting a command of policy minutiae, an iron will, and a finely honed strategic sense. In an administration that has become infamous for its incompetence, Cheney is the man who knows what he's doing.

I agree with all of that, with the proviso that Cheney had a tendency to overreach and defeat his own objectives. (Sometimes he was too dominant on an operational level for his own strategic good, as he defined his goals.) There's more in the plus column in the book: the narrative shows consistently that Cheney displayed, in addition to the qualities named just above, an enormous capacity for hard work, indifference to personal gain, and a consistent drive toward what he believed to be the common good. Those are no small virtues.

Angler displays other Cheney qualities that I do not admire. Cheney showed himself willing to break the rules of good process that he long espoused as essential, and the book shows the costs to the president and the nation. Process can be slow and muddy, but -- other things being equal -- I suppose I do believe it's better not to cut out the president's top advisers (secretaries of state and treasury, national security adviser, homeland security adviser, counterterrorism adviser, attorney general, etc.) when making decisions that fall smack into their portfolios. Other things being equal, we might prefer that a vice president tell the truth about a matter of vital national interest to the House majority leader in advance of a big vote. We have only Dick Armey's word that Cheney lied, but he was an old friend and ally of Cheney's with no known personal grudge apart from the issue at hand. Leaking a distorted version of Frank Keating's confidential questionnaire to Newsweek was also unattractive behavior, and suggested a certain ruthlessness about rivals. (This is Spencer's point, I believe.) Here again the accusers are old Cheney allies and rock-ribbed Republicans -- Keating and former Gov. John Engler of Michigan -- and it's a fact that Cheney had sole control of Keating's closely held vetting file. If Cheney did all these things, as strong evidence suggests, I do not doubt he believed he was serving a greater good. And we all would grant that ends justify means in some circumstances, up to a point. Many people, myself included, would say Cheney crossed the line. Readers of Power Line might even speak of "moral relativism."

Cheney crossed the line on secrecy, too. As so often, Cheney began with an obvious point -- that advice and deliberations work better with some shield of privacy -- and took it to an extreme. Improving White House deliberations is one valid public good, but secrecy works against others. Cheney did more than any predecessor to shield himself and others from scrutiny of their work, not only in real time but in the record left for history. Here I display the bias of my profession. I think public debate is central to self-government, not only for improving policy choices but as a foundational requirement of sovereignty for "We the People." (For more on that, look here.) Cheney's concept of democracy, Angler argues, is Burkean, and it misses half of what "representation" means. The vice president agrees that leaders must be authorized by the people to govern on their behalf, but he makes very little concession to accountability. Thus comes what I describe as his contempt for public opinion, and I do not think that is too strong a word.

The rightness or wrongness of Cheney's policy preferences are seldom addressed in the book, but I'll cop to Paul's charge that my disagreements are sometimes implied.

I think the evidence is pretty clear that Cheney manipulated environmental science in his intervention in the Klamath River basin. If he was prepared to risk the extinction of endangered species to protect Oregon farmers, he could have invoked the cabinet panel empowered to make that choice -- and subject it to public debate. There is no doubt, as far as the courts are concerned, that native tribes had the rightful legal claim to the economic value of the water that Cheney diverted to farmers.

I am skeptical of too much concentration of power, and so I do not approve of Cheney's contention that the president's decisions as commander in chief and as chief law enforcement officer are entirely beyond the rightful power of Congress and the courts to restrain.

As a citizen, I cannot countenance the use of torture -- and here I use the long-established U.S. government term for some of the Cheney-backed "enhanced interrogation techniques" -- in my name. I think Paul may have misread, however, the passage he cites in my book. (On page 179, I ask whether we were "prepared to be a nation that did this sort of thing, torture or not-quite torture, if it worked.) That's equally a rebuke to liberals who want to say that torture is ineffective anyway, which would make the government's interrogation policy pointlessly monstrous. I think that's a copout, and my reporting suggests it is almost certainly untrue, even if rapport-building techniques are often more effective. As John McCain has testified, anyone will do as he is told under torture. As critics suggest, the victim of torture will happily make up stories if he thinks he'll be believed. But some of what interrogators want to know is factual and checkable. If a man discloses the password of an encrypted file, or the location of a buried cache, or the phone number last used by a confederate, his interrogators will find out fast whether he has told the truth. My point is that opponents of "cruelty" (in the sense meant by Geneva's Common Article 3 and the War Crimes Act) must be willing to make their case regardless of cruelty's effectiveness.

I studied enough moral philosophy to know there are probably extreme circumstances in which any president might order torture, just as any president might suspend fundamental civil liberties in a moment of extreme crisis. I think it's dangerous and undemocratic to accept those things as a matter of constitutional doctrine. If a president crosses a line like that, he should acknowledge it as a breach of law and mount a necessity defense in the court of public opinion. In some ways, his conduct is civil disobedience writ large, and like other practitioners of civil disobedience he must be prepared to face the consequences. Lincoln did exactly that after suspending habeas corpus, and the public backed him.

Anyone who wants my fuller verdict on Cheney can open Angler to page 388. The next seven pages, which close the book, put the matter as clearly as I know how.

A Model We Won't Soon See Again

2008-11-21T21:58:51Z

Let me begin my final post by thanking TPMCafe and Bart for inviting me into this discussion, and the other members of the discussion group for their thoughtful and respectful posts.

Second, I'd like to revise a statement I made at the outset, namely that I would recommend Angler only to those who wish to read an "anti-Cheney brief." Actually, I would recommend Angler to anyone who wants to read about Cheney, but with the proviso that, in my view, it is somewhat slanted against the vice president.

Third, how do I see the Cheney vice presidency? I certainly have my disagreements with aspects of it. For example, I've never liked the Bybee (Yoo) memorandum which contains an untenable definition of torture and an overreaching view of presidential power. And as a general matter, I think Cheney was mistaken to the extent he declined to cooperate with Congress, where doing so would have formed a stronger basis for vigorous prosecuting the war on terror, in order to uphold abstract principles of executive power. Given the importance I attach to the war on terror, a more flexible and pragmatic approach was in order.

Overall, however, I think Cheney (along with President Bush) was just the leader the country needed to spearhead the war on terror, especially in its early years. I suspect that the forceful nature of the administration's response to 9/11 prevented subsequent attacks and saved lives. It certainly seems to have dealt a series of powerful blows against al Qaeda. But even if it didn't, the Bush-Cheney response was, on balance, the correct approach to the threat and the uncertainty that we faced.

I'm pretty sure we would have invaded Iraq if, say, Frank Keating had been vice president instead of Cheney. In any case, I think (as many prominent Democrats did) that this was the right decision based on the available information. Nor do I fault Cheney for believing that the "demonstration effect" of a successful military action against this enemy was a substantial argument in favor of the war.

As Bart points out, this argument was contingent on success, and success was far too long in coming. But if, as now seems likely, success is achieved, I believe the U.S. will be better off for having replaced Saddam Hussein's regime with a functioning democracy in the heart of the Middle East, one with whom we can expect to have decent relations. Time will tell on this question, if Barack Obama permits it to.

I also give Cheney credit for things he wanted to do but was unable to accomplish. At the top of the list is his energy policy, which called for offshore drilling and the development of nuclear power. The nation would be in much better shape, I think, if these ideas had been implemented early in the first Bush term.

Finally, a note on the idea of the Vice President as uber-Chief-of-Staff. Cheney is different from others who have served presidents aggressively through the gate-keeping, information processing role for a number of reasons. First, he was more canny and (for a long time) more effective than most. Second, his portfolio was more wide-ranging than most. Third, he was the vice president.

Bart stresses that, unlike a traditional Chief-of-Staff, the vice president can't be fired by the president. But he can be cut out of the loop. The more salient point may be that, unlike the normal chief, the vice president has been vetted by the electorate. Voters witnessed Cheney go through two presidential campaigns and two vice presidential debates. At least during the period when Cheney was so influential, voters seemed to like what they saw. If anything, it seems desirable that the vice president be the president's most influential adviser.

I doubt, however, that we will soon see this model again. On this, we probably all can agree.

Cheney's Shadow

2008-11-21T21:09:12Z

David Greenberg eloquently defends Bart's approach to Cheney and I think we see eye-to-eye. The sheer accumulation of detail and fact makes for an overwhelming portrait of executive manipulation redolent of the Nixon White House. But--you knew that "but" was coming--Paul might seem to have something when he pleads for more context. But I don't think Paul would be happy with the result. Had Bart delved more fully into the relationship between Donald Rumsfeld and Cheney, for example, I suspect he would have unearthed even more unflattering information.

Where David's defense might run aground, I think, is that it skirts the shoals of self-complacency. There's a fine line between adversarial journalism and a journalistic lynching. Lincoln Steffens and Ray Stannard Baker had what we would today call "agendas"--Steffens to expose the iniquity of Wall Street potentates, Baker to burnish Woodrow Wilson's reputation. Bart, by contrast, does not seem to have an axe to grind, at least not one that I could detect.

My problem with conservatives, by contrast, is that they invoke the term "bias" to dismiss the kind of objective reporting David is praising. Just because they don't like a piece of news doesn't mean that it is automatically "biased." That amounts to special pleading in my opinion.

In any case, in discussing Angler, it had not occurred to me that we would be discussing these angles. As the good ship Obama comes to port in Washington, DC, perhaps the storm clouds that have beset journalism in recent years will lift as well.

Settling A Score With A Cheneyite

2008-11-21T20:52:32Z

I really have no interest in debating whether Angler is slanted against Dick Cheney. David really says it all. What I do have an interest in is settling a score with an old Cheney staffer, and, in the process, illustrating a small slice of how the Office of the Vice President worked under Dick Cheney.

In 2003, Frank Foer and I worked for months on a profile of Cheney for The New Republic. (Sadly, TNR's web archives are all messed up, but you can read our 7000-word piece from the Dec. 1, 2003 issue of the magazine here.) We interviewed a lot of people for the piece, and at the end of the process, we reached out to Cheney's office. We wanted to check some basic facts, to get their perspective for the piece and to have them respond to some of the criticisms we'd turned up. Pretty basic journalistic fare. Then we met a man named Kevin Kellems.

Kellems was a communications staffer at the Office of the Vice President. He and another colleague, who I won't name because we don't have issues, agreed to set up a conference call with us -- Cheney, alas, wasn't interested in being interviewed -- to answer our questions. We did it on background, meaning we could cite them as Cheney staffers or some such, but not by name. It all seemed helpful enough. With me taping the conversation on our end, we spoke with Kellems and his colleague at length, and he even facilitated further interviews with other Cheney confidantes.

Everything seemed above board. It was fairly clear, I thought, that we would be writing a pretty harsh, critical profile, but we discussed our concerns in the open. Or so I thought.

Shortly after the piece ran, TNR received a letter to the editor from Kellems. (It ran in the Feb. 2, 2004 edition of the magazine, for those of you with Nexis accounts.) And it accused us of being sloppy and lazy -- in fact, professionally deficient. Kellems referred to unspecific "misstatements in the article" that "could have been avoided if the reporters had checked their facts." What Kellems didn't say in the letter is that we checked our facts with him.

How could he get away with this? Because most mainstream news organizations don't have opt-out clauses for grants of anonymity. Knowing this, Kellems was in an excellent position to misrepresent our reporting on our magazine's own letters page. And what's more, because news outlets believe in the right-of-reply, TNR would have been hard-pressed to edit out the bit about checking our facts, lest the Cheneyites further accuse us of papering over a complaint. It all played out as I suspect he'd gambled it would. We responded to Kellems' letter, but didn't say anything about how he used our grant of anonymity as a weapon with which to shank us.

Well, I don't work for TNR anymore, and I don't believe in respecting grants of anonymity for people who act in bad faith. (Kellems went on to work for Paul Wolfowitz, and went to the World Bank with him.)

I hope the broader significance is clear. That sort of hardball is pretty indicative of how the Cheneyites act. Using an institution's rules against it is a clever trick. I would later find out just how bare-knuckled the Cheneyites fight when, in 2005, Patrick Fitzgerald revealed that Scooter Libby responded to a piece that John Judis and I wrote -- in which we quoted a then-anonymous Joe Wilson about his trip to Niger -- by setting in motion the events that outed Valerie Plame.

Is Cheney a singular figure? I leave that for you to judge, and Bart's instant-classic book is an excellent guide. I have to admit I have a certain respect for just how gangster the Cheneyites are. But it stops at a point. You might say that I should hate the game, and not the player. But why choose?

Searching For Context

2008-11-21T19:15:18Z

Yesterday, I tried to defend my view that Angler presents not a "mixed" view of the Cheney vice presidency but a rather thoroughly negative one. Now I want to defend my view that Angler is slanted to some extent against Cheney.

To make my complete case would require a closer textual analysis than is amenable to this forum. So I will focus on concepts that I think Bart either overlooks or, in my view, should have paid more attention to.

The most important of these is one I've discussed already, and which Bart has graciously acknowledged has some foundation -- the lack of discussion of the extent to which hardball is played in Washington. Unless one counts Christie Todd Whitman asking for a meeting with President Bush, Angler has no one in the executive branch outside of Cheney's circle throwing an elbow until late in the book when Bart's "law" -- that actions produce reactions -- finally kicks in. Cheney's tactics are thus made to seem like "original sin."

This is an unfair picture. Angler would be a truer, more balanced account if Bart had stipulated, as he did in one of his recent posts, that Cheney did not invent the "Cheney rules."

To understand the context in which Cheney operated, I recommend two books: War and Decision, an inside account of the early years of the war on terror by former Under Secretary of Defense Douglas Feith and Failure Factory: How Unelected Bureaucrats, Liberal Democrats, and Big Government Republicans Are Undermining America's Security and Leading Us to War by Bill Gertz of the Washington Times. (Gertz takes a far less sanguine view than Bart of the CIA's good faith in assessing whether Iran stopped developing nuclear weapons).

Bart does a better job of providing context when he acknowledges that some of what Cheney did was a reaction to the post-Watergate assault on presidential power. Bart suggests, however, that Cheney overreacted because under Reagan the president's powers were "substantially restored" (page 101). But he doesn't provide any analysis of this question; instead he cites David Gergen. Yet Gergen's view is far from universally accepted, and by citing only Gergen, Bart gives short shrift, in my opinion, to the Cheney side of the story.

Bart also does not sufficiently entertain the possibility (I would say probability) that Cheney's views nearly always prevailed for a long while, not for any nefarious reason or as the result of devious methods, but because (a) as a former Secretary of Defense, former White House Chief of Staff, and important one-time member of Congress, he was hugely respected and (b) the things he was saying made great sense (correctly so, I think) to key players, especially the president, during the first administration. In the second administration, when Cheney's views stopped seeming quite so self-evident, they began to prevail far less frequently. All of this is normal.

Bart salutes this concept, but I think Angler would have been more balanced had he paid more attention to it.

But what of the fact that Bush, apparently with a push from Cheney, sometimes approved measures without consulting the relevant official, e.g., the EPA administrator or the Attorney General? Here, I think Bart puts too much emphasis on Cheney and not enough on Bush. The president knew he had an EPA administrator and an Attorney General, but apparently thought he could make certain decisions without hearing (or hearing further) from them. Unless Cheney falsely claimed that the official in question was on board, the main issue here is the president's approach, not Cheney's.

This is also true to some extent of the officials Cheney dealt with. In the discussion of the NSA surveillance program, Bart mentions several times how few officials were "read-in," i.e., were informed about the program. We are told that David Addington wouldn't hear of this or that important official being read-in.

But wouldn't it be General Hayden, then the head of the NSA, who determined in the first instance who was read-in? By what authority would Addington (or Cheney) have that power, or the power to overrule Hayden? If General Hayden did not challenge Addington, was it because he agreed that a program for which secrecy was of the essence should be "closely held" or was it because Addington (with Cheney behind him) intimidated this three-star General? If intimidation is the answer, isn't the main issue Hayden's failure to do his job?

More generally, is it possible that some of Bart's sources are blaming vice presidential intimidation or end-runs for their "complicity" in policies that seemed like good ideas at the time but are now unpopular? I wish Bart had explored these kinds of questions.

Objective vs. Subjective: The Circular Debate

2008-11-21T17:35:13Z

I want to join the debate about whether Bart's picture of Cheney is negative or objective (or, if you find "objective" too problematic a term, let's say fair, impartial, unbiased, or some other similar word). I think it's both.

First a little background: I think it's a good thing that we have news media outlets in this country that aspire to be objective and non-partisan, and it's good that the journalists who work for them strive to keep their personal political opinions from influencing their duty to report the news without fear or favor. For all the heat that the Washington Post and the New York Times take from the left and the right, they are national treasures. You might find bias in a gossipy story about a picked-over issue like Hillary Clinton's possible appointment at State (the Times recently used the occasion to flog a long-dead story about a speech Bill Clinton once gave in Kazakhstan), but when Lehman Brothers collapses or war ravages the Congo, we turn desperately to these papers--implicitly acknowledging their indispensable role as disinterested providers of news. And when Bart and Jo Becker, or James Risen, or Dana Priest, or Charlie Savage any number of the other superb reporters at these (and other) papers disclose valuable information to the public about lawless, duplicitous, or improper actions about the Bush administration, they are not acting from any liberal or anti-Bush bias. They are acting from a sense of professional duty.

All of which is a long way of saying that I can see why Bart wants to protect his reputation as not having it in for Cheney. And I don't think anyone reading Angler could conclude that he has it in for Cheney. Too often in the past eight years, we've seen the armies of the right seek to discredit a messenger because they don't like the message--Richard Clarke and Joe Wilson come to mind as victims of this sort of attack--and reporters have not been spared. Bart has taken pains to write a well reported, fact-heavy, closely argued account of some of the most shocking cases of Cheney's use of power from his vice presidential perch. He avoids cheap shots, invective, and even explicit political and moral judgments. It's not "prosecutorial," and I didn't mean to imply that I thought it was. I imagine Angler has found many readers not just among confirmed Cheney haters but also on the right. Future historians will rely on it.

But I don't think anyone can deny that it is, in the end, a negative portrait of Cheney--based not on bias but on the accumulation of material that can only reflect ill on Cheney overall. I agree with Jacob's post that in the course of writing a book like this, your selection of material itself is a choice that influences the tone of the book. I don't see this as a criticism--and when I said that Bart's praise for Cheney's skills as an infighter amounted to a form of damnation, that wasn't meant critically either. To say the Cheney that emerges from this book is a menacing or malign figure is not to call the book a hit job or to impugn Bart's objectivity as a reporter.

Our journalism these days is filled with circular and unproductive debates about bias and objectivity. Most of it fails to reckon with something that many of the muckrakers of Lincoln Steffens' and Ray Stannard Baker's era knew: that reporting in the service of exposing high-level wrongdoing could be both "objective," in that the facts stood up to independent verification from any angle, and "adversarial" in that it revealed unflattering or even appalling aspects of government officials (or any other subject). So I think Bart has clearly given us a "negative" portrait of Cheney, but only because that it what his fair-minded reporting has unearthed.

Report Abuse Button

2008-11-21T17:04:18Z

So, those of you accustomed to surfing the waves of TPM reader blogs and comment threads have probably noticed by now that on each individual comment, a report abuse button has been added.

The idea is pretty simple-- if you think a comment is in violation of our terms of use, click the button and let us know. Note: this isn't where you go to express general dissatisfaction with a comment. Only click it if you find it to be genuinely abusive. It's important to us that TPM is a place where people treat each other with basic respect-- and that no one is personally attacked based on gender, age, political orientation, and so forth. Though of course-- feel free to aggressively argue the ideas themselves...

Let me know if you have any thoughts or questions in the comment threads here.

Stimulate Greening

2008-11-21T16:21:48Z

A good debate has started as to the size of the stimulus package the economy badly needs, and what it should include. I suggest that paying in part for the greening of all public facilities should be included. Such greening should be required of all federal facilities (from office buildings and prisons, to courts and military bases), and of all corporations that receive a substantial amount of federal funds in grants or contracts (e.g., Halliburton and Boeing). It should be demanded of all that receive bailout money, of state and local government, as well as of other public agencies (e.g., the nation's 35,000 school boards) and the hundreds of thousands of not-for-profit organizations, such as the Gates, Ford, and Rockefeller foundations, that benefit from tax privileges. (Granted, some public agencies already participate in some greening measures, but it's sporadic and not on a national level.)

The greening of the public square should apply to all new facilities and tools (e.g., all new buildings should be required to meet basic green standards, all new vehicles to meet higher and rising CAFE standards, etc.) as well as to the retrofitting of old ones (through improved insulation, green roofs and so on). It should encompass both conservation (e.g., by turning off computers at night and on weekends and holidays) and requirements to purchase power from alternative, renewable sources (say, electricity produced by windmills rather than oil).

Such greening is for the common good to the fifth degree. Environmentalists have already pointed out (albeit not in these exact words) that green acts are winners to the fourth degree. They reduce our dependence on foreign oil; generate jobs at home; improve the climate; and stimulate our research and development, a major engine of a strong economy that is especially well-suited for the American place in the global economy. I add only that the greening of the public square also creates a powerful and reliable demand for new or improved green products by securing a mass market for them. Take the example of vehicles that are much more energy efficient than existing ones. To develop such vehicles requires a major outlay. If there is no secure and sizable market for such vehicles, car manufacturers and investors will be reluctant to make such investments. If, however, they knew that all new vehicles purchased by millions of public entities in the future would be required to meet ever higher CAFE standards, such investments would become much less risky. Moreover, such an ensured mass market would reduce the unit cost for the private sector.

Most discussions of greening focus on the private sector. However, the public sector is the best place to rush greening forward. It is much more amenable to national guidance than the private sector.

In short, there is much to be gained from greening the public square. The main losers would be the adversaries who are confronting us from Latin America to Eastern Europe, drawing on the funds and political leverage sky-high oil prices have granted them. That is, such greening provides yet another "win": more funds in our pockets, less in the hands of those who do not particularly love us.

Amitai Etzioni is Professor of International Relations at The George Washington University. For more discussion, see his book: Security First (Yale, 2007) or www.securityfirstbook.com email: comnet@gwu.edu

The Stock Market, the Government Just Needs to Spend Money

2008-11-20T22:13:54Z

The Great Depression was a horrible and extremely painful experience. But we did learn something extremely valuable from this experience: how to get out of a depression. The answer came in the form of the massive government stimulus associated with World War II. At the peak of the war, our deficits exceeded 20 percent of GDP. This would imply deficits of more than $3 trillion in today's economy.

This is important. We know how to keep the economy from collapsing. We didn't have this information 80 years ago. The secret is to spend money, lots of it.

CEPR just circulated a letter that garnered 375 economists' signatures arguing for a stimulus between $300 billion and $450 billion. This might be too small given all the bad news that we are seeing. We may need to spend $500 billion or $600 billion a year to get the economy back on its feet, possibly more. The key point is that we can get the economy back on its feet; we just have to spend the money to do it.

The stock market is driven by fear and greed. Today fear dominates. That should not be our concern. We must force the politicians to do what is necessary to get the economy moving. They must spend lots of money.