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August 18, 2009

Sausage Eating Lizards: Sonia, Spooks, Death Panels and the Pope

Welcome to "Reset World" where we're having to face up to the last thirty nears of grasshopperian neglect of vital issues and public policy. This is a post we've been holding in the pending file for too long because it's just been one damn thing after another. The bad news is the delay and, perhaps, the amount of reading materials in the excerpts section. The good news is that there's a bunch of stuff to point too. The worse news is that we're going to be trying to weave together a bunch of different threads into a coherent fabric. The possible news is that if we do this bear dance you may get something out of it. Just remember though the miracle of the Dancing Bear is that it dances at all,not how well it dances.

Serendipitously this was the 40th Anniversary of Woodstock, you know the celebration of peace and love that set the tone for the next 40 years ! Yeah, right. Just not quite the way it was intended. That clip was Woodstock then, for Woodstock now try this vidclip of the old surviving hippies who are now tour guides, and the museum, all selling the vision. As David Clayton Thomas of Blood, Sweet and Tears reminds us in this BNN interview it wasn't quite like that. For one thing Kent State had just happened and people were angry, for another none of the headliners got paid so they aren't memorialized in the historical videos. For another there was sure a lot of violence in other places and a lot of folks who didn't buy into the "it's all different now" message. In fact the Greatest Generation who had survived the GD, fought WW2 and built modern America that Woodstock was so against were just in their forties.Woodstock is now twice as far behind us as their adventures were behind them.

BUT...and this is the point...the decisions and divisions we created then have been reverberating every since. Have we done any better ? That's not an easy answer btw - the Boomers fought the Cold War, 'Nam, dealt with the biggest social changes in our history and changes in our society and economy that were phenomenal, to say the least. How we wrestle with the consequences of those legacies going forward is going to define America for the next forty years. How will we deal with our mental imps - rationally with a sense of decency, commonality and public interest ? Or pursuing private agendas that put partisan advantage ahead of the public good ?

One final clip, audio, this time from the historical archives of "This, I Believe":  Our Noble, Essential Decency. Scifi Master Robert A. Heinlein.

Continued...

Inessential Indecencies: Sotomayor, Spy Kicking, and Bashing Ben 

Like we said it's been one damn thing after another this whole month (part of the reason for our delay) where the public discourse started out partisan and got shriller, louder and antagonistic. Start with Sonia Sotomayor's confirmation hearings (which we listened to some and for which the PBS coverage is linked in below), the possible threat to go back and charge members of the CIA with crimes for doing what they were asked to do to protect the country, the partisan, bigoted and abysmally ignorant attacks on Ben Bernanke and the Fed by members of both parties and, the piece de resistance', the Death Panel Wars.

Sonia's Journey in the Inferno

 These hearings and the public statements were amazing, not least because instead of making a decision on qualifications and what's best for the country the decisions appear to have been made by what was best for the party. First off we have 17 years of careful, reasoned, judicious, balanced and mainstream decision making by Judge Sotomayor. Plus a few speeches talking about a "wise Latina women" being better able to understand the facts in some cases. All qualified observers and reasonable ones, including David Brooks of the NYT, concluded that she was eminently qualified, a good judge and dedicated to the law and moderation. In fact she had been a prosecutor for years. Any time before the culture wars got out of hand she would have been a conservative candidate for the High Court. But perhaps the most important point is that the Law is not some magisterial, magic set of machinery that guarantees absolute outcomes. It is a combination of precedent, cases, experience and judgment and a judge needs to understand and allow for their own backgrounds and biases. A point Sotomayor made. To argue otherwise, that she was to biased and empathetic is to argue that a panel of old white men have no biases. But to implicitly admit they do and don't control them.

On the other side, which we won't dive into deeply, we have the threat of legal actions against the staff of the CIA. Back in the mid'-70s the Church Commission passed legal reforms to control CIA abuses. Well intended but leading to perverse consequences, some of which include 911 and the intelligence failures in Iraq. Those so-called reforms put a premium on managing to the rules and not doing what was and is necessary to get good intelligence. To some extent they emasculated the CIA. We got away with it then because technical intelligence (satellites, etc.) could fill in. But in this day and age we need feet on the ground and they have to be qualified feet. A witch hunt against the agency doing what it was authorized to do in our name is going to re-emasculate our national intelligence capabilities, put national security more at risk and when we can least afford it.

Bashing Uncle Ben

 Interestingly enough the case that was potentially the most damaging for the public safety, and still could be, was the public bashing of Ben Bernanke, of the Federal Reserve. There was a recent survey asking what people thought of major public institutions and even the IRS ranked well ahead of the Fed. But for decades, mysterious, arcane, complex and opaque as it's been, the Fed has managed our money supply...which is the lifeblood of the economy. Every time in history for almost ten millenia that political decisions have controlled the money supply the result has been chaos and collapse. It's only recently that we've learned that we need an independent money manager. But the Fed really paid its way over the last 18 months - in fact we were literally hours away last Fall from trigering Depression 2.0 and the Fed and the Tresuary saved us. Don't take my word for it - here's a recent interview with David Wessel of the WSJ discussing the real world and not Congress's fantasies. His reward - to be called in front of Congress, accused of every crime under the Sun and in the Spaceways by politicians on the Left and Right. All of whom were wrong, all of whom were grandstanding, none of whom thanked him for his service or saving the country and, least of all, none of whom were prepared to defend him.

Healther Skelter: HC Reform vs Death Panels

The one that really takes the case for out-of-control polemics is healthcare reform. My favorite quote that's not hyperbolic is the little 'old lady who, literally, called to yell at the President about socializing medicine and wanted to make sure here Medicare wasn't touched. Now if you don't find that funny, sad and scary probably nothing we're saying here is going to mean much for you. Just in case you take the point, and for the record, there's no proposal for death panels. Healthcare is something that's been on our agenda for series of major posts for a long time now and hopefully we'll get to it. In the short-run here's what you need to know for now (taken from an e-mail response of mine to David Axelrod):

Actually it's time for a better communications strategy. A couple of months ago I called the President's Georgetown speech the finest on economic policy I'd ever heard and did so in public several times on my blog. That wasn't entirely an amateur opinion either (Re-building On A Rock: Policy, Economy & Values).I mention that to give some credibility to the following: your communications strategy on healthcare needs work, quite a bit of it.

Here's the central problem - people don't know how the current system impacts them, what the changes are nor how they'll be impacted. You need to fix that. You also need to get yourselves back on a higher plane in the discourse....hard as it is if you can manage to continue turning the other check in the long-run it'll pay off.

Specifically:

1. Total per family healthcare costs are estimated at $15K/year/family and have grown from $8K in the last few years; this has stopped wage growth and harmed the direct well being of all the insured. We think that figure will double in the next 10-15 years. And coverage will get worse and worse..... BRING IT HOME to the average voter.

2. There are large-scale social consequences about which you've talked to much because it's top-down and inside Washington.

3. Everybody's unhappiness with the insurance industry is really a reflection of them trying to control costs while everybody else tries to maximize benefits. Need to face up to that.

4. We think, on the whole, that about 1/3 of current healthcare expenditures are wasted because of excess tests, treatments, etc. We also think admin costs absorb about a 1/3 of total expenditures in practices. Finally the uninsured get treated they just aren't covered; it'll be cheaper to cover them than not.

Those ARE your central arguments. KISS !

 You can add a) the root cause is medical care provided on a piecework basis, b) that moving toward paying for a job, i.e. I pay to have my house roofed not for each laborer's every shingle, c) that over time this moves us more toward preventative medicine, d) that a public option in fact introduces local competition and e) can be made into what the Brits call a quango, i.e. a semi-private enterprise, and finally f) that a huge chunk of costs are incurred in heroic treatments at end of life. Which ought not to be covered by public monies. You can also mention that care is already rationed and that the gov't already dictates healthcare rates thru the Medicare reimbursement rate settings.

 Charity in Truth: Civil Discourse and a Healthy Agora

Lost in all this sturm und drang was Pope Benedict's social encyclical "Caritas en Veritate", or "Charity in Truth" in which he called for a humane capitalism with respect for human dignity and social justice. If you go back and look at the previous four posts in this series on values and citizenship and the preceding five posts on a health public square (the Agora series) you'll find our position is nearly identical to the Pope's. Free markets are the most efficient and effective method for organizing a prosperous, productive and progressive society. But they do NOT work by themselves but require a set of rules to govern their operations and protect their participants, a set of civic institutions to support and protect them and a certain level of support and civil responsibility by the citizenry.

We all do better when we each do better and we each do better when we all prosper, at least ideally.

 Now of the cases we review which satisfies any of those tests ? Certainly Judge Sotomayor, the spooks at the CIA, the Fed and even the Administration are doing the best they know how, doing it well and acting in what they think is the public interest. And, on the whole, being balanced and recoginizing it's an imperfect world, they must be judged to be doing well. From the headlines, talking heads, pandering politicians, and demagogic buffoons and outraged gatecrashers you'd never know that of course. Good intentions are NOT a substitute for knowing how to operate the saw when you working in a lumber mill and ideology is NOT a substitute for understanding how the world works. A proposition we ran the largest field test in history on in the 20thC at the cost of hundreds of millions of lives and trillions in resources and the near death of Western Civilization.

But, in the spirit of charity and compassion, the last two years have under-mined, even destroyed, the certainties of the last forty. The ones where progress and prosperity were our natural right. So we come full circle back to the New Woodstock. We will choose to do what's right and workable or will make our choices blindly out of fear, lack of understanding and demagogic leadership. On the record to date one would have to say we've nothing on the Iranian leadership putting their own personal gain ahead of the welfare of society.

Of course the lumber mill is actually the political sausage factory and if you don't know that you probably shouldn't be trying to make sausage. But a few less mouse droppings and feline innards would sure help us all out as we face these major decisions.

 

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Imps, Wisdom and Mindsets

Boomers: Older and Maybe, Finally Wiser Waiting a while to get everything you want is — or anyhow was — a definition of maturity. Demanding satisfaction right this instant, on the other hand, is a defining behavior of seven-year-olds. The powerful appeal of the Web is not just the "community" it enables but its instantaneity: for better or worse, you can send a message now, get any question answered now, pick your airline seat now, buy anything you want right now. Cell phones and the Internet, together with FedEx and U.P.S., finally and fully satisfy the permanent child within each of us — the impulsive child with zero tolerance for waiting. And as a result, during the last quarter century, delayed gratification itself came to seem quaint and unnecessary. This is not meant as a condemnation of maximizing fun and living casually. I am committed to wearing runner-soled shoes, watching The Simpsons and making back-of-the-classroom wisecracks on Twitter. But the rampant juvenillization of national life does echo and reinforce unfortunate habits of mind. What do the naughtiest children do? They scream and cry and tell outrageous fibs, like Glenn Beck. The postwar generation was the first to refuse to grow up, but Gen-X and the rest have followed in their footsteps. And the selfish, heedless, if-it-feels-god-do-it approach enshrined by young boomers subsequently enabled the risk-taking, party-hearty paradigm that has governed so much of American life, economically and otherwise, for the last quarter century. Now in the twilight of their hegemony, with this crisis and the necessary reshaping of America, the boomers have their last best shot at helping to straighten out the mess they helped make. In their empty-nested years, for instance, perhaps they can channel some of the vast energies and micromanagement they lavished on their children to pro-social enterprises and volunteer work.

Does a Nation’s Mood Lurk in Its Songs and Blogs? Neither music historians nor hard-core metal fans will gasp to learn that the band Staind, with songs like “Painful” and “Mudshovel,” tends to go far more negative in its lyrics than did the heavyweight of soul, Luther Vandross, whose many hits included “The Closer I Get to You.” Or that Slayer (“Raining Blood”) paints darker word pictures than Faith Evans (“I’ll Be Missing You”). Yet who knew that Slayer was about 30 percent more negative than Mr. Vandross — and that such calculations might say something about the mood of the country? In a new paper, a pair of statisticians at the University of Vermont argue that linguistic analysis — not just of song lyrics but of blogs and speeches — could add a new and valuable dimension to a growing area of mass psychology: the determination of national well-being. Still, the University of Vermont study presents what could be a complementary measure, and it provides a few decent cocktail-party nuggets along the way. Dr. Dodds and Dr. Danforth downloaded the lyrics to 232,574 songs by 20,025 artists released between 1960 and 2007, from the Web site hotlyrics.net. From another site, wefeelfine.org, they pulled more than nine million sentences that used some form of the verb feel — as in “I feel relieved” — from 2.3 million blogs from 2005 to 2009. They also analyzed State of the Union speeches going back to George Washington’s. They then rated the psychological charge, or “valence,” of a significant subset of the words on a 10-point scale: from triumphant (8.82) and love (8.72) down to disgusted (2.45) and suicide (1.25). The researchers also analyzed the emotional content of blogs by the age of the blogger, and they found a curious pattern. Teenagers, true to form, rated the lowest, with an abundance of “sick,” “hate” and “stupid.” With advancing age the tone gradually softened, rising to a high plateau in apparent emotional well-being through the 50s and 60s, then dropping after age 70 — when the word “sick” began to reappear. “Now, these are bloggers, and they certainly are not representative of everyone,” Dr. Dodds said. “But the pattern is very pronounced.” As for popular music, the University of Vermont researchers found that within each genre, the emotional charge of lyrics remained stable between 1960 and 2007. But the overall trend was downward, as metal came of age in the 1970s, punk in the 1980s, and later hip-hop, each exploring darker themes more explicitly than their predecessors in the 1960s. The low point, lyric-wise, was around 2003. Maybe coincidence, but that was the year Darkthrone released its album “Hate Them.”

Fallout: Coping With the Recession As the recession continues, so does the fallout. How are its poorest victims coping? Its richest? Who is hurting? Who is thriving? Character by character, Washington Post reporters provide answers in a series of intimate profiles.

 Why the Imp in Your Brain Gets Out The visions seem to swirl up from the brain’s sewage system at the worst possible times — during a job interview, a meeting with the boss, an apprehensive first date, an important dinner party. What if I started a food fight with these hors d’oeuvres? Mocked the host’s stammer? Cut loose with a racial slur?  “That single thought is enough,” wrote Edgar Allan Poe in “The Imp of the Perverse,” an essay on unwanted impulses. “The impulse increases to a wish, the wish to a desire, the desire to an uncontrollable longing.” He added, “There is no passion in nature so demoniacally impatient, as that of him who, shuddering upon the edge of a precipice, thus meditates a plunge.” At a fundamental level, functioning socially means mastering one’s impulses. The adult brain expends at least as much energy on inhibition as on action, some studies suggest, and mental health relies on abiding strategies to ignore or suppress deeply disturbing thoughts — of one’s own inevitable death, for example. These strategies are general, subconscious or semiconscious psychological programs that usually run on automatic pilot. Perverse impulses seem to arise when people focus intensely on avoiding specific errors or taboos. The theory is straightforward: to avoid blurting out that a colleague is a raging hypocrite, the brain must first imagine just that; the very presence of that catastrophic insult, in turn, increases the odds that the brain will spit it out. The risk that people will slip or “lose it” depends in part on the level of stress they are undergoing, Dr. Wegner argues. Concentrating intensely on not staring at a prominent mole on a new acquaintance’s face, while also texting and trying to follow a conversation, heightens the risk of saying: “We went to the mole — I mean, mall. Mall!” “A certain relief can come from just getting it over with, having that worst thing happen, so you don’t have to worry about monitoring in anymore,” Dr. Wegner said. All of which might be hard to explain, of course, if you’ve just mooned the dinner party.

Our Noble, Essential Decency I am not going to talk about religious beliefs but about matters so obvious that it has gone out of style to mention them. I believe in my neighbors. I know their faults, and I know that their virtues far outweigh their faults.

Cases in Points : Sonia, Spooks, and Uncle Ben

Sonia's Journey

'Her Journey Is My Journey' South Bronx arrived in pinstripes and was first in line, at about 3 a.m. Albuquerque showed up with sensible tennis shoes, a hot-pink jacket and a fold-up camp chair at 5. Puerto Rico rolled in around 7:30, waving the island's flag. Three Latino strangers were on a pilgrimage to get inside the confirmation hearings for Sonia Sotomayor. Watching on television wasn't an indelible enough experience for them. After passing the hours by exchanging life stories, they felt like friends -- so much in common with each other, so much in common with the self-made arc of Sotomayor's life. "Our stories seem to be unique and yet they're not," said Ephraim Cruz, 36, a union organizer whose Puerto Rican mother raised seven children near Sotomayor's South Bronx, N.Y., neighborhood. He still lives not far away. "People who are working every day, if they apply themselves, they can obtain a certain height." Claudine Martinez, the lawyer in pink, exchanged her sneakers and slacks for elegant wedge-heeled black sandals and a skirt to enter the hearing, all the while thinking of her father, Ted Martinez, a self-made businessman. Whenever Sotomayor credits her own mother's hard work and support, Claudine is reminded of Ted, who told her no one could take away her education. She was the first in the family to leave the ancestral ranch land of Trujillo, N.M., with few models for the new role she was undertaking -- just the simple, unwavering support of home. She remembers what she was doing when she heard President Obama had nominated Sotomayor. Frances Marquez, an assistant professor of American government at Gallaudet University, introduced herself to the out-of-towners. At 41, she's a third-generation Mexican American whose father and grandfather were farmers in California. Her parents raised six children who each graduated from college and, among them, earned seven advanced degrees. "Young Latinos will see her and know anything is possible," Marquez said.

Vidclips on the Hearings

Retrospective Lynchings: the CIA Controversies

Holder Faces Avalanche Of Work, and Scrutiny The attorney general is, by all accounts across political and legal spectrums, one of the best-prepared people ever to serve as the nation's top law enforcement officer. It was, friends say, his lifelong dream to occupy the same office as Robert F. Kennedy and as Janet Reno, for whom he worked as second in command in the Clinton administration. And yet former colleagues around the District -- in the Superior Court, where Holder was a judge; in the U.S. attorney's office, which he led in the 1990s; and at Covington & Burling, a firm where he practiced after leaving the Clinton Justice Department -- say they are watching him age before their eyes. Five months into his tenure, criticism of Holder is now coming from multiple directions, including conservatives who portray Holder as soft on terrorism and at times hypocritical, as in his controversial decision to overrule department lawyers on the constitutionality of the D.C. voting rights bill. A bipartisan group of lawmakers this summer restricted the Justice Department from bringing suspects detained at the military facility at Guantanamo Bay, Cuba, onto American soil, tying Holder's hands as the one-year clock for closing the prison in January ticks down. Sen. Jeff Sessions (Ala.), the ranking Republican on the Judiciary Committee, last month pronounced himself "disappointed" with Holder's performance. "I do not believe your actions have matched your promises," Sessions said. At the same hearing, Judiciary Chairman Patrick J. Leahy (D-Vt.) praised Holder for an "impressive start" and for showing "great courage in the face of political pressure" on Guantanamo Bay. Sessions's sharp words came even before last weekend, when Holder signaled he was leaning toward naming a prosecutor from inside the Justice Department to examine whether CIA interrogators crossed legal lines set out by Bush lawyers in their handling of terrorism suspects. The inquiry, if it proceeds as expected within a few weeks, is designed to be narrowly confined and would not conflict with messages from President Obama about following the facts and the law where they lead, according to a senior Justice Department official who spoke on the condition of anonymity because the matter is at a delicate stage. At times, Holder also has found himself boxed in by the political left, where old friends such as Sens. Sheldon Whitehouse (D-R.I.) and Richard J. Durbin (D-Ill.) have been urging him to release a biting ethics report on the conduct of Bush lawyers who approved detainee waterboarding and sleep deprivation. On the other side, congressional Republicans batter him for changing course on civil rights enforcement from policies established during the Bush administration. "From what I've heard, he's working like a dog," said James Cole, a Washington lawyer who met Holder in 1980, when they worked together as "puppy prosecutors" in the department's public integrity unit. "The issues he has on his plate are fascinating and frustrating. He's got all the tools to do it, but those are really tough issues. They give you . . . the bad menu of options and you get to pick."

CIA Had Program to Kill Al-Qaeda Leaders The CIA ran a secret program for nearly eight years that aspired to kill top al-Qaeda leaders with specially trained assassins, but the agency declined to tell Congress because the initiative never came close to bringing Osama bin Laden and his deputies into U.S. cross hairs, U.S. intelligence and congressional officials said yesterday. The plan to deploy teams of assassins to kill senior terrorists was legally authorized by the administration of George W. Bush, but it never became fully operational, according to sources briefed on the matter. The sources confirmed that then-Vice President Richard B. Cheney had urged the CIA to delay notifying Congress about the diplomatically sensitive plan -- a bid for secrecy that congressional Democrats now say thwarted proper oversight. The program, which was terminated last month, touched off a political firestorm last week when several Democrats said the CIA had misled Congress by not disclosing its existence. CIA Director Leon E. Panetta gave lawmakers their first overview on June 24, within hours of learning about it, the officials said. Some officials familiar with the program said certain elements of it were operational and should have been disclosed because they involved "significant resources and high risk," as one intelligence official described it. But others said the initiative never advanced beyond concepts and feasibility studies. Intelligence officials also offered conflicting views of Cheney's alleged role. One official recalled that the vice president ordered only a temporary delay in notifying Congress, until the planning for an al-Qaeda hit crossed certain thresholds -- for example, a planned movement of operatives across international boundaries. "What is being labeled now as covert action never reached that point," said the official, who is familiar with intelligence committee briefings on the matter. Three former intelligence officials who were close to the program said it operated within legal guidelines.

Kicking the Spies The latest "scandals" involving the Central Intelligence Agency are genuinely hard to understand, other than in terms of political payback. Attorney General Eric Holder is considering appointing a prosecutor to investigate criminal actions by CIA officers involved in the harsh interrogation of al-Qaeda prisoners. But the internal CIA report on which he's said to be basing this decision was referred five years ago to the Justice Department, where attorneys concluded that no prosecution was warranted.Meanwhile, Democrats in Congress are indignant that they were never briefed about a program to assassinate al-Qaeda operatives in friendly countries. Never mind that the program wasn't implemented, or that the United States is routinely assassinating al-Qaeda operatives using unmanned drones. And never mind that Leon Panetta, the new CIA director -- fearing a potential flap -- briefed Congress about the program soon after he became aware of it. There was a flap anyway -- with a new hemorrhage of secrets and a new shudder from America's intelligence partners around the world. Oversight of these secret activities is necessary. But turning the CIA into a political football, as both Republicans and Democrats have done in recent years, defeats the purpose of oversight. That was true when Republicans were bashing the agency for supposedly obstructing the Bush administration's policies, and it's true now when Democrats are scrounging for evidence to prove that House Speaker Nancy Pelosi was right when she accused the agency of lying about its activities.

 Saving the World (Literally)

Dr. Bernanke’s Emergency Room  On Wednesday morning, Sept. 17, Ben Bernanke and his lieutenants assembled. Lehman was in bankruptcy; AIG was not, only because the Fed had intervened. The Dow Jones Industrial Average was at a nearly three-year low. Yields on the safest securities of all, short-term U.S. Treasury bills, fell nearly to zero because so many investors wanted to park their money there. “It was becoming clear that the markets were going into anaphylactic shock, and that we needed to do something,” Mr. Bernanke said in an interview a few weeks later. The Fed could no longer cope with the Great Panic by itself. The Federal Reserve chairman had suspected for months that he and then-Treasury Secretary Henry Paulson would eventually end up asking Congress to spend substantial sums of taxpayer money to rescue the banks, as every other country had been forced to do in a major banking crisis. So far, Mr. Bernanke had deferred to Mr. Paulson on the timing of going to Congress, while Mr. Paulson had been reluctant to propose anything that Congress might, in an election year, reject. Mr. Bernanke saw this as the inevitable politics of responding to banking crises in a democracy. The most effective solution always called for lots of taxpayer money upfront. The usual political solution was to wait until the crisis was bad enough to dominate the headlines, even if that drove up the ultimate cost. In hindsight, the U.S. economy would have been much better off had Messrs. Bernanke and Paulson gone to the president and Congress sooner. “Our political calculation was that we had to wait until we got to the point where the case would be palpable and clear—that it would be early enough to do some good, but not so early that it wouldn’t be given serious consideration,” Mr. Bernanke said a few months later in an interview. Second-guessing himself for a moment, he added, “If we had, we wouldn’t have gotten it... but at least we would have been able to say we tried.” Looking back, he said soberly, “We came very close in October to Depression 2.0.”

Congress Is Told to Lay Off the Fed  More than 250 prominent economists warned that critics of the Federal Reserve are putting "the independence of U.S. monetary policy...at risk," and they urged Congress to back off lest it undermine the Fed's ability to manage the economy and thwart inflation. The petition reflects growing unease among professors, former Fed officials and some investors that the vehemence of the criticism from Congress of the Fed's handling of the financial crisis suggests a readiness to weaken the freedom the Fed has to move interest rates as it sees fit. "The interactions with Congress are becoming increasingly hostile," said Anil Kashyap, a University of Chicago finance economist who was among the initiators of the 185-word petition. "Competent monetary policy needs to be forward looking. So at some point the Fed is going to have to act to tighten policy before the economy is booming. If that gets stopped for political reasons it would be a disaster, and just the perception that it might be stopped could be costly."

 Crisis Turned Federal Reserve Into Fourth Branch of Government, Author SaysJEFFREY BROWN: You have covered this every day, the daily news that we're both part of. When you step back from all those little pieces and take a look at the big picture, what struck you most?DAVID WESSEL: I think two things strike me. One is just how enormous the threat was to the financial system and the whole economy.You know, when you write about this one company, one day of the market at a time, it's hard to realize just how big a threat it was. And when I talked to Bernanke a few weeks after the Lehman Brothers thing, and he says to me, "We came very close to Depression 2.0," it sort of took my breath away.And the second thing is that...JEFFREY BROWN: That will take your breath away, when...DAVID WESSEL: Yes. Yes. And it wasn't clear then we'd avoided it. The other thing was that these people seem larger than life on TV and in the papers, but they're -- you know, they're smart people, but they're ordinary people, and the number of decisions they had to make under fire, with no owner's manual, with very little precedent to go on, I mean, it was exhausting. And it's kind of amazing how much we depended on a very small group of people to basically save us from that economic calamity.

Heathcare as Exemplar

A 9-1-1 for Health-Care Reform: Send Leadership Now There are moments in the life of any important policy debate when things hit a dead end. There aren't any easy answers, any options that don't involve real political risk. And it's at those moments when you discover who the real leaders are. We are at just such a moment with health-care reform. The roadblock right now is finding a way to pay for the short-run costs of reform before the benefits of longer-run cost containment begin to kick in. There's general agreement that those initial costs should be no more than $1 trillion over the next decade, and that the money should come from some combination of increased revenue and reductions in the growth of spending for existing government health programs. Nearly all health experts agree about where to begin this search: the tax break for employer-paid health insurance. Unlike most other forms of compensation, health benefits are not subject either to income or the payroll taxes. Because people prefer untaxed compensation, there's been a natural tendency for health benefits to grow at the expense of cash wages. As a result, we've bought so much insurance that we've become cavalier not only about the price of health care, but the amount of it that we consume. The result: The cost of health insurance has risen nearly twice as fast as the cost of everything else. What's crazy is not to use some cap to raise $30 billion to $50 billion over the next decade in additional tax revenue to pay for health reform. That's why it was pushed so hard by Sens. Max Baucus and Charles Grassley, the chairman and ranking Republican on the Senate Finance Committee who together offer the best hope of fashioning a bipartisan consensus on reform. And that's why it was such a setback when the rug was pulled out from under them over the past week by Senate Majority Leader Harry Reid and then President Obama. Labor unions are the main culprit here. One reason organized labor is in such bad odor these days is that, while they claim to represent the working class and the downtrodden, they are often about protecting wage and benefit packages that most nonunion workers can only dream about. Now they're at it again. It requires a special sense of social justice to issue a call to the barricades to defeat a modest tax on health insurance plans that alone cost more than the average worker without health insurance earns each year. It also requires a certain sophistry to calculate the cost of this additional tax on middle-class households to pay for health reform without also calculating the benefits those households would realize from reform in terms of lower premiums and improved coverage. Earlier in the week, I spoke with a top lobbyist for the American Federation of State, County and Municipal Employees, which has been particularly vocal on the tax issue. I noted that under most reform plans, some sacrifice would be required of almost every interest group -- drug companies, doctors, insurers, hospitals, employers that don't offer insurance and workers who don't now buy it. What, I asked, was organized labor willing to throw into the pot? All I got was an angry retort about how strapped local governments were laying off workers and cutting back on pay, as if gold-plated fringe benefits had no role in creating the fiscal crisis in the first place. There is nothing surprising in a union position that hasn't changed since the last failed round of health reform. What is disappointing is that Obama and Democratic leaders have allowed themselves to be hemmed in by it even when they and their advisers know it is wrong.

How Not to Talk About Health Care Public discourse necessarily and legitimately involves the clash of interests and opinions: that’s what politics is. But that clash, rough as it may be, must still be conducted with intellectual integrity, not as the oratorical equivalent of Ultimate Fighting. This is a matter of honesty and thus of ethics. When an argument is disingenuous and thwarts meaningful discussion (and induces migraine in the spectators in the Capitol gallery), it should be ruled out of bounds by the Debate Umpire, an official who, as I read our Constitution, seems not to exist (a lapse I blame on Jefferson). Other institutions have such a referee. In a courtroom, for example, the judge can disallow certain affronts to ratiocination, pseudo-thinking that subverts effective inquiry. Respect for logic is essential in pursuing justice; it is equally necessary in making law. I do not know if the public option is a wise law — health policy is beyond my purview — but I do know what it is not: unusual in its general approach. Public and private institutions have long undertaken similar tasks and without dire consequences. Private schools survive public education: Brearley and Bronx Science peacefully coexist. FedEx tolerates the U.S. Postal Service. Six Flags is facing bankruptcy, but no one proposes that we close down Yosemite or Yellowstone to protect it.

Blue Dogs in the Way Watching the centrist Democrats in Congress create more and more reasons why health care can't be fixed, I've been struck by a disquieting thought: Suppose our collective lack of response to Hurricane Katrina wasn't exceptional but, rather, the new normal in America. Suppose we can no longer address the major challenges confronting the nation. Suppose America is now the world's leading can't-do country. Every other nation with an advanced economy long ago secured universal health care for its citizens -- an achievement that the United States alone finds beyond the capacities of mortal man. It wasn't ever thus. Time was when Democratic Congresses enacted Social Security and Medicare over the opposition of powerful interests and Republican ideologues. In fact, our government used to actually pave roads, build bridges and allow for secure retirements by levying taxes on those who could afford to pay them. To today's centrist Democrats, this has become a distant memory, a history lesson they cannot grasp. The notion that actual individuals might have to pay to secure the national interest appalls them. In the House, the Blue Dogs doggedly oppose proposals to fund universal coverage by taxing the wealthiest 1 percent of the nation's households. Their deference to wealth -- whether the consequence of our system of funding elections or a byproduct of the Internet generation's experience of free access to information and entertainment -- is not to be trifled with. Centrist Democrats' opposition to health reform verges on the incoherent.

Joe Klein: How Special Interests Could Block Reform One of the most difficult things to do in a democracy is react to a problem that is real, but not immediately threatening. Obama is trying to do this in two monster areas, health care and climate change. "He's killing me," says Senator Debbie Stabenow of Michigan, referring to the hordes of special-interest groups that have camped on her doorstep and clogged her phone lines. Stabenow is smiling as she says it. She supports the broad thrust of Obama's initiatives. "But you can't believe all the groups that want to make their case. There are the doctors, the nurses, the cancer society," she continues, raising the specter of a conga line of disease groups bending her ear. "All of them have legitimate concerns. And that's just health care." As long ago as 1982, the economist Mancur Olson made the argument, in The Rise and Decline of Nations, that as a democracy matures, special interests grow more entrenched. Their intense dedication to their own specific needs, Olson wrote, often trumps the broader, but less focused, interests of society. And that was before the rise of cable news and talk radio. It was before the utterly corrupting effect of televised advertising on politicians really kicked in — the need to raise money (from interest groups, mostly) and to exercise extreme caution lest one of your votes be used to decapitate you in a 20-second ad. It was before the Democrats and Republicans transformed themselves into more strictly ideological parties. Put all these factors in the cauldron and you create a poisonous atmosphere that makes legislative action on big issues almost impossible. It is also a prescription for conservative governance of the sort that has thrived since Ronald Reagan. Doing nothing is the easiest thing.

FACT CHECK: Distortions rife in health care debate Confusing claims and outright distortions have animated the national debate over changes in the health care system. Opponents of proposals by President Barack Obama and congressional Democrats falsely claim that government agents will force elderly people to discuss end-of-life wishes. Obama has played down the possibility that a health care overhaul would cause large numbers of people to change doctors and insurers. To complicate matters, there is no clear-cut "Obama plan" or "Democratic plan." Obama has listed several goals, but he has drawn few lines in the sand. The Senate is considering two bills that differ significantly. The House is waiting for yet another bill approved in committee. A look at some claims being made about health care proposals: CLAIM: The Democrats' plans will lead to rationing, or the government determining which medical procedures a patient can have. "Expanding government health programs will hasten the day that government rations medical care to seniors," conservative writer Michael Cannon said in the Washington Times. THE FACTS: Millions of Americans already face rationing, as insurance companies rule on procedures they will cover. Denying coverage for certain procedures might increase under proposals to have a government-appointed agency identify medicines and procedures best suited for various conditions.

Loose Network Drives Health Reform Protests The rowdy protests that threaten President Obama's health-care reform efforts have been spurred on by a loose network of activists -- from veteran advocacy groups with millions of dollars in funding to casual alliances of like-minded conservatives unhappy over issues from taxes to deficits to environmental laws.Most of the groups helping to organize protests view the proposed health-care overhaul as just one part of a broader assault by government on free markets and individual liberty, their leaders say. Conservatives portray the movement as largely organic, fueled by average citizens alarmed at the direction the country has taken since Obama moved into the White House.Several of the biggest efforts are led by established veterans in the conservative movement, whose organizations receive heavy funding from industry groups and sympathetic billionaires.One of the most prominent organizers is FreedomWorks, a Washington-based advocacy group headed by former House majority leader Richard Armey (R-Tex.) that is also pushing to defeat Democratic climate-change legislation. FreedomWorks's major financial backers have included MetLife, Philip Morris and foundations controlled by the arch conservative Scaife family, according to tax filings and other records.

 Cases: Exemplary Performance vs Protestors

Mindsets, Hardball and “Selling”

Whiz Kids, Wall Street Division The death of Robert McNamara has confronted the architects of another massive national catastrophe with a challenge: Will they, like McNamara in his post-Vietnam agony, acknowledge their failings and confess the error of their ways? Will they come up with a list, as McNamara did, of what to do differently next time? Our time is no stranger to the hubris of the brilliant, though. To find it, we need to look not to Washington but to Wall Street. The real successors to McNamara's whiz kids are the economic geniuses, the "quants," who figured out how to build a tower of investment on a dot of assets, arbitrage everything, and hedge any risk, except, of course, the ones that plunged us into a depression.  Will the creators of this crisis wander through an intellectual and moral desert as McNamara did for decades? As yet, the mea culpas have been few and, like McNamara's, incomplete. Alan Greenspan did admit to a congressional committee that his belief in the rational behavior of financial institutions had been shattered. But the confessions of failure and assumptions of responsibility from Chicago School economists, leading Wall Street bankers and lax governmental regulators, all of whom assured us that the very profitable financial vehicles they had devised also reduced the risk to the rest of us, are almost nowhere to be found.

Why Language May Shape Our Thoughts A psychologist at Stanford University, she has long been intrigued by an age-old question whose modern form dates to 1956, when linguist Benjamin Lee Whorf asked whether the language we speak shapes the way we think and see the world. If so, then language is not merely a means of expressing thought, but a constraint on it, too. Although philosophers, anthropologists, and others have weighed in, with most concluding that language does not shape thought in any significant way, the field has been notable for a distressing lack of empiricism—as in testable hypotheses and actual data. That's where Boroditsky comes in. In a series of clever experiments guided by pointed questions, she is amassing evidence that, yes, language shapes thought. The effect is powerful enough, she says, that "the private mental lives of speakers of different languages may differ dramatically," not only when they are thinking in order to speak, "but in all manner of cognitive tasks," including basic sensory perception. "Even a small fluke of grammar"—the gender of nouns—"can have an effect on how people think about things in the world," she says.

The White House strikes back On the defensive over the economy and health care, the White House is shooting back with a double-barreled message for its critics and skeptics. To Republicans who say the stimulus isn’t working: Back off. To moderate Democrats wary of health care reform: We’re watching you. Earlier this week, the administration launched a coordinated effort to jam Senate Minority Whip Jon Kyl, an Arizona Republican who’s argued that the government should “cancel the rest of the stimulus spending.” No fewer than four Cabinet secretaries wrote to Arizona Gov. Jan Brewer — also a Republican — to ask her if she agreed with Kyl that it was time to turn off the state’s stimulus spigot. “If you prefer to forfeit the money we are making available to your state, as Sen. Kyl suggests, please let me know,” wrote Transportation Secretary Ray LaHood. For good measure, he attached a three-page addendum listing each of the Arizona projects paid for by the $521 million the state is getting. Brewer knew she’d been thrown a high, hard one. “The governor is hopeful that these federal Cabinet officials are not threatening to deny Arizona citizens the portion of federal stimulus funds to which they are entitled,” her spokesman said in a statement. “She believes that would be a tremendous mistake by the administration. And the governor is grateful for the strong leadership and representation that Arizonans enjoy in the United States Senate.” The administration took a gentler approach with its own Wednesday, when Organizing for America, President Barack Obama’s campaign-in-waiting, launched ads in a handful of states aimed at pushing centrist Senate Democrats to get behind health care reform. The ads don’t identify their targets by name, and they talk up the urgency of passing a bill without talking down its skeptics. “It’s time for health care reform,” implores a woman in the ad who’s struggling with health care bills because of her son’s cerebral palsy and epilepsy. The two different approaches — a fist to the nose and a gentle elbow nudge — reflect a White House that increasingly recognizes the political stakes at play in reviving the economy and passing health reform this year. Republicans are hammering the White House and its allies in Congress on the $1 trillion Congressional Budget Office price tag for the House health care plan and the tax on the wealthy that some Democrats would use to pay for it. At the same time, polling suggests that the GOP is making a dent with its arguments that the Democrats are spending too much with too little to show for it. The coordinated assault against Kyl came after weeks of frustration in watching GOP members of Congress trash the stimulus as ineffective while their own states and districts received millions in funding thanks to the act. In some cases, congressional Republicans have even sought to claim credit for the money in a bill they opposed. There hadn’t been an aggressive pushback,” lamented one administration official. So after seeing Kyl and House Minority Whip Eric Cantor (R-Va.) again paint the legislation as a failure on Sunday talk shows, White House chief of staff Rahm Emanuel directed that the letters from the Cabinet secretaries be sent to Brewer, according to two administration officials. And then the DNC made sure other Republicans saw the message being delivered to Arizona by touting the letters.

Great Experiments in History

Dead end WHY did communism take root? Given its sorrowful harvest, why did it keep spreading? And what ever enabled it to last so long? Archie Brown’s new history of communism identifies three big questions, perhaps even the biggest, of the past century. At first sight, all seem puzzling. Communism was an impractical mishmash of ideas, imposed by squabbling zealots that promised much, delivered little and cost millions of lives. It is striking that 36 countries at one time or another adopted this system and that five—Cuba, Laos, North Korea, Vietnam and the biggest of them all, China—still pay lip service to it. Communism’s first big advantage was that it played on two human appetites—the noble desire for justice and the baser hunger for vengeance. The communist block also had two bits of good fortune. The economic slump of the 1930s discredited democracy and capitalism. Then came Hitler’s disastrous attack on the Soviet Union. The victory over fascism in Europe gave the Soviet Union, an ally of America and Britain, renewed moral weight. Given what had happened in Russia under Stalin in the 1930s, that hardly seemed deserved. As Mr Brown notes, Stalin trusted the Nazi leader more than he trusted his own generals. The Soviet Union killed more top German communists than Hitler’s regime did. The promised communist nirvana brought a mixture of mass murder, lies and latterly the grey reality of self-interested rule by authoritarian bureaucrats. But it was a bit late for second thoughts. Communist regimes proved remarkably durable, partly thanks to the use of privileges for the docile and intimidation of the independent-minded. Another source of strength was tight control of language and information that deemed most criticism unpatriotic. Cracks came as information spread, especially about the system’s bogus history and economic failings. Nationalism was a potent solvent too, particularly in places such as the Baltic states, that felt they were captive nations of a foreign empire.

America's future  AMERICA’S recent history has been a relentless tilt to the West—of people, ideas, commerce and even political power. California and Texas, the nation’s two biggest states, are the twin poles of the West, but very different ones. For most of the 20th century the home of Silicon Valley and Hollywood has been the brainier, sexier, trendier of the two: its suburbs and freeways, its fads and foibles, its marvellous miscegenation have spread around the world. Texas, once a part of the Confederacy, has trailed behind: its cliché has been a conservative Christian in cowboy boots, much like a certain recent president. But twins can change places. Is that happening now? It is easy to find evidence that California is in a funk (see article). At the start of this month the once golden state started paying creditors, including those owed tax refunds, business suppliers and students expecting grants, in IOUs. California’s governor, Arnold Schwarzenegger, also said that the gap between projected outgoings and income for the current fiscal year has leapt to a horrible $26 billion. With no sign of a new budget to close this chasm, one credit agency has already downgraded California’s debt. As budgets are cut, universities will let in fewer students, prisoners will be released early and schemes to protect the vulnerable will be rolled back. Plenty of American states have budget crises; but California’s illustrate two more structural worries about the state. Back in its golden age in the 1950s and 1960s, it offered middle-class people, not just techy high-fliers, a shot at the American dream—complete with superb schools and universities, and an enviable physical infrastructure. These days California’s unemployment rate is running at 11.5%, two points ahead of the national average. In such Californian cities as Fresno, Merced and El Centro, jobless rates are higher than in Detroit. Its roads and schools are crumbling. Every year, over 100,000 more Americans leave the state than enter it. The second worry has to do with dysfunctional government. No state has quite so many overlapping systems of accountability or such a gerrymandered legislature. Ballot initiatives, the crack cocaine of democracy, have left only around a quarter of its budget within the power of its representative politicians. By contrast, Texas was the best state in that poll. It has coped well with the recession, with an unemployment rate two points below the national average and one of the lowest rates of housing repossession. In part this is because Texan banks, hard hit in the last property bust, did not overexpand this time. But as our special report this week explains, Texas also clearly offers a different model, based on small government. It has no state capital-gains or income tax, and a business-friendly and immigrant-tolerant attitude. It is home to more Fortune 500 companies than any other state—64 compared with California’s 51 and New York’s 56. And as happens to fashionable places, some erstwhile weaknesses now seem strengths (flat, ugly countryside makes it easier for Dallas-Fort Worth to expand than mountain-and-sea-locked LA), while old conservative stereotypes are being questioned: two leading contenders to be Houston’s next mayor are a black man and a white lesbian. Texas also gets on better with Mexico than California does.

New sins, new virtues GLOBALISATION, technology and growth are in themselves neither positive or negative; they are whatever humanity makes of them. Summed up like that, the central message of a keenly awaited papal pronouncement on the social and economic woes of the world may sound like a statement of the obvious. But despite some lapses into trendy jargon, Caritas in Veritate (Charity in Truth), a 144-page encyclical issued by Pope Benedict XVI on July 7th, is certainly not a banal or trivial document. The document accepts the legitimacy of markets or profits, as long as they are not idolised, or elevated far above the human beings who are affected by economic decisions. But Benedict’s proposal for discerning the difference between healthy markets and pathological ones is uncompromising and offers no sops to the secular. An economy, he suggests, is working well when it allows individuals and societies to fulfil themselves in every way—something that in his view can happen only when God is involved. The encyclical grafts this ideal of development in the service of God and man onto an insistence on Catholic morality in ethics. In any case, Benedict finds the roots of the economic crisis in wickedness. The global recession, he argues, is merely the latest effect of a tendency to confuse happiness and salvation with prosperity. But economic activity “cannot solve all social problems through the simple application of commercial logic”. And the market should not be a place “where the strong subdue the weak”. Throughout the document, leftish ideas about economics nestle alongside the austere moral reasoning that is a hallmark of the German-born pontiff.

 

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