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December 31, 2009

An Interlude on Good Governance: Iran, Yemen, ME Instabilities and the Theory

Our plan was to pass on to other international issues but this week's news from Yemen, Detroit, Iran, et.al. suggests a brief interlude with some recent news and opinion. It also suggests taking a broader look. Our analysis of the ME is actually drawn from a broader body of work on the nature of good government, how it might be developed, the application of that framework to the specifics of foreign policy and the specific analysis of particular problems, e.g. the ME or Iraq. At this point there's good news and bad news. Having developed the framework over several years and tested it against real world events in the last couple it's working. The bad news? Well, it's working. For example our assessment that good government is necessary for stability and progress but socionomic development is necessary for government stability and legitimacy is being tested to the limits by the Iranian regime.

After the break we'll provide more background links to white paper collections. In case you haven't noticed our postings tend to be mini-essays that fit into these broader frameworks. Over time it turns out we end up with quite a collection of machinery, tools, principles, findings and applications. Taking a brief interruption to point you at them seems like a useful sort of thing to do therefore.

Let me set the stage and reinforce the importance by pointing to a few recent news items that are worthwhile but also support our arguments - more test cases if you will.

 

Rhami Khouri, editor and publisher of the Daily Star in Lebanon, puts it perfectly well in this recent piece:2009 A Bad Year for the Middle East.

An end-of-year glance around the region suggests that political conditions have deteriorated to a large extent in many parts of our region, with very few countervailing improvements to be noted. While existing conflicts or tensions in Palestine and Israel, Iraq, Afghanistan, Iran, Somalia, Sudan and Lebanon continue to plague those lands and ripple out to neighbors, I have no doubt that the single most troublesome new development during the past year has been the escalating fighting in Yemen.
 
When we think things cannot get any worse in the Middle East, they do. This should not surprise anyone, because this has been the pattern for over three decades now – ever since the combination of the 1967 war’s outcome and the advent of the oil boom in the early 1970s cemented the modern Arab security state order, Israeli colonial policies, direct American military involvement to protect the global energy reservoir, and the slow disintegration of the concept of an Arab citizen who has rights he or she expects to be delivered by his or her state. 
 
The fighting and ideological confrontations in Yemen are only the latest and most glaring examples of the wider underlying forces of tension that continue to plague the Middle East. The year now ending is not only a sad one that generates concern; it should also be a learning experience to help us probe why the Arab world persists in being the only collectively turbulent and non-democratic region in the world.
If we turn to Iran our diagnosis that the regime has lost its legitimacy thru the combination of years of accumulated malfeasance, self-interested kleptocracy and is now fighting for its life as theocrats protecting their iron data bowls Emile Hokeyem writing in The National gets some more support and some near street-level information - Iran's Regime Fighting for Its Life:
The popular movement in Iran is rapidly transforming from protest into uprising. Since the death of its spiritual mentor, Grand Ayatollah Hosein Ali Montazeri, there have been the most intense and violent confrontations yet with the Iranian security forces. The question is whether it will become a revolution; and if so, when.
 
Many observers expected the movement, a disparate mix of opposition groups that has taken to the streets since the fraudulent presidential elections of June 12, to lose momentum after the initial protests. Repression, intimidation and disorganisation would lead to resignation among the movement’s followers. That expectation and these assumptions have proved wrong: the depth of discontent with the nature and workings of the regime clearly cuts across social and regional divides. It may seem to be on a roll in the Middle East, boasting of regional political successes against the US and technological prowess in its nuclear programme, but there is something rotten at the heart of the Islamic Republic.

The demonstrations have now spread to the entire country, and anger at the security forces has overcome fear. Poor, it turns out, does not mean blind or stupid. The underprivileged can see that their lot has not improved during the Ahmadinejad years, and that cash handouts are a stopgap measure that cannot compensate for the corruption and mismanagement that plague Iran’s economy. Extraordinary reporting and footage on YouTube, Twitter and Facebook, the main means of communication with the outside world, are evidence of that. A few days ago a crowd attacked Bassiji militiamen and released two men from the gallows. Demonstrators overwhelmed policemen, and then proceeded to protect them.

Faced with a potential loss of legitimacy, the regime could resort only to force.
 Our efforts at understanding, analyzing, framing and prognosticating on these are contained in several essay collections. They attempt to lay out an analytical framework, apply that framework to designing and assessing a constructive strategic foreign policy for the US and apply it to specific problems, specifically the ME and Iraq. They have been published on Scribd and also are on the blog as down-loadable PDF files. After the break we provide the blog listings and a couple of readable embeds but here are the links to the Scribd versions if you want to go there.
On the theory and political economy of good government (Adam Smith meets Machiavelli via Mancur Olson): Good Government for a Stable World
 
On the application of the theory to Foreign Policy (Hans J. Morgenthau meets Henry Kissinger, channeld thru Lee Kuan Yew): Brave New World: Constructive Engagement and US Foreign Policy
 
Testing and evolving the framework to nation-building in Iraq: Iraq Lessons: Looking Back to Look Forward
 
Applying the evolved framework and adding custom machinery and analysis tools for the broader ME:Middle East Solutions: Issues, Relationships, Frameworks and Approaches
We hope that material proves useful to you. It's gotten some mildly favorable interest among some international relations and intelligence professionals to there may be some merit. And of course the ultimate argument - it seems to be working so far.

Here's the downloadable PDF files as promised:

Good Government for a Stable World 

Brave New World: Constructive Engagement and US Foreign Policy

Iraq Lessons: Looking Back to Look Forward

Middle East Solutions: Issues, Relationships, Frameworks and Approaches

 And, something I've not shared publicly before, my early thinking on Iraq starting in January, 2003 with the assessment that it was a necessary and constructive initiative but would face huge challenges in implementation because of the society-building aspects. And goind on to dissect the early failures of implementation and execution: Early Reflections on Iraq.

If you're reading this particular post there's some benefit to carrying off all four for reading and reflection. In some ways we don't care if you necessarily agree. Rather we hope you adopt the frameworks, tools and data to your own purposes so that you can disagree using a rigorous approach. Or find ways to apply them to your own concerns. With that in mind, and if you're reading this post, perhaps the two places to start are:

 

Good Government for a Stable World And for specific applications to the Middle East here: Middle East Solutions: Issues, Relationships, Frameworks and Approaches

December 27, 2009

Vicious Cycle Risks: Instabilities, Upsets and the ME Outlook

The most important issue we face over the next several decades is adapting the the architecture of the world system to the rise of rapidly emerging countries to accommodate the rise of the new powers, incorporating them constructively into that system, supporting their continued growth and responding to collective challenges, e.g. energy, water, environment, et.al. The most important and urgent right now and for at least the rest of this decade, and beyond, is establishing stability and security in the ME and encouraging the socionomic development of that region. Withing that broad umbrella, despite the on-going challenges of Is/Palestine, Iran, Afghanistan and Iraq, the central issue is the stability and survival of Pakistan.

Like a host of other issues many question whether this is either possible or our problem. If you've been following along, now and again, we'd suggest that post-WW2 experiences from Taiwan to South Korea to Turkey to Indonesia (not to mention Japan and Germany) suggests that it is possible. And if you look back at history Central and Southwest Asia were productive and progressive societies, for their time, both in older history and more recently. A final observation - whether you believe that or not it's still better to take our best shot than let things drift into collapse, as they've threatened todo for decades with increasing risks recently. The good news is that after letting them drift it's finally dawned on the major powers that is in their own vital self-interests to encourage the development of the ME. The first step in addressing any problem is accepting that it exists while the second is agreeing to attack it. We've pretty well crossed those barriers - now we "just" have the enormous hard work of figuring out how, of paying for it and then doing it.

At the heart of the challenge is the question of good governance, and the attitudes and values of the people who live there. And on both those fronts the news, while not strongly positive, is getting better. On that front this recent keynote address by Queen Rania tells us a lot, if we're willing to listen.

 

Iran: the Kleptotheocracy Is Illegitimate

 At the end of the day the question of whether a country is making progress boils down to whether or not the lives of its people are improving. Then the next question is whether or not it's likely to improve, given the institutions, policies and people involved. Here we compare South Korea to Iran since 1800. Both clearly suffered major historical catastrophes - SK during WW2 and Iran during the war with Iraq. Iran much more so than SK. Interestingly Iran made significant progress on both health and income under the Shah and under the current regime, with a long period of stagnation and retrogression in between.

 During its long, sustained and effective emergence South Korea was by no means a democracy. In fact it was run by a strong central government, though one that was honest, competent and gave its people significant personal freedom. It's really only within recent memory that the country has moved more strongly toward being a democracy (as recently as 1988 in fact). Comparing the two countries Iran's major weaknesses are in governance and security (some of the other factors are in line with the developmental history and will improve, given time).

Over the last decade the Islamic Republic has become neither but instead an authoritarian government run by a devil's bargain of ideologues, hard-liners and interest groups (who are somewhat indistinguishable) almost entirely for their own benefit. A government survives in the long-run because people view it as legitimate - that is its decisions are taken to be in the best interest of the country and the people as a whole. That legitimacy was fast eroding over this last decade but in the last few minutes (oops, we meant months but ... ) looks to be approaching a state of collapse. The power hierarchy is making the natural response and attempting to maintain control but at the expense of legitimacy. Meanwhile of course they've run the economy into the ground. They've also succeeded, thru active foreign policies admittedly, in making themselves more isolated. We've talked before about the difficulties in either sanctions or military strikes. On balance we follow our earlier conclusions - defer strikes until absolutely necessary, strengthen sanctions to the extent possible but don't look for them to be a magic answer but establish a policy of strategic containment while waiting for the game to be played out.

Governance Challenged: Afghanistan, Iraq & Pakistan

Just prior to Oslo the President announced his Afghanistan policy - we we support, supported and anticipated. In fact it's rather startling how closely the final decisions seem to mirror our assessments. (Boots On The Ground: Realities, Strategies, Policy & Politics, More of the Afghan Debates: Searching for Legitimacy). Since those assessments were reached with the best analysis and data we could manage, with the notions of government, development and security we keep harping on, you could be encouraged or frightened. It is in our interest, given the importance of the ME, to establish a reasonably competent government, security and economic progress, but not to anticipate creating a New Athens. In contrast Iraq, after its own bad problems and challenges, seems to be moving ahead in fits and starts.

The key here is judging a dancing bear by the fact that he dances at all, not how well. In other words our criteria for evaluating Iraq should be based on history, local culture, institutions and capabilities - not on some idealized model of what we'd like. Judged on that score the preparations for upcoming elections, the development of a stronger and more legitimate central government, the improvement of power-sharing and the recent oil development auctions should all be taken as good signs.

Pakistan at Risk

The country we worry most about in the entire region is Pakistan. Partly because they already have nuclear weapons so that instability that breaks down into chaos threatens to see their release into wider access in the region. But mostly because in the last several decades Pakistan has regressed. Though when comparing it to two other emerging Islamic states, Turkey and Indonesia, and applying the Dancing Bear test our first judgment would have to be that it's not doing badly relative to the others. In fact if it could maintain current course and speed the outlook would be positive. The question is can it and will it?

And that's a question of governance. Despite a surface facade of democracy Pakistan has oscillated between military juntas and ostensibly populist parties for decades (the Caudillo problem in a new guise and for similar reasons). We say ostensibly because the parties are actually owned and run by the families of feudal landowners for their own benefit. Worse, they have proven to be corrupt AND incompetent. People are willing to forgive some level of corruption as a trade-off for competence and socionomic progress. Pakistan has really gotten neither. Worse, as a relatively young nation, it's pride is still too easily wounded. Until and unless Pakistan gets a government that puts the interests of the nation as a whole ahead of the interests of narrow power groups the situation will continue to worsen, threatening collapse.

When you compare Pakistan to Turkey and Indonesia several key dimensions are threatening. Security is very poor and personal freedom is low. But its ranking on governance is simply abysmal. Compounding that problem is that the society is NOT cohesive - social capital is also terrible. Which means that there are no informal institutions for the country to fall back on in place of very weak formal ones. Worse, it also implies that Pakistani's have no real sense of country, commitment or legitimacy. Taken all together the on-going threat of collapse that threatens the region causes us to conclude that finding ways of improving governance there is our most urgent and important foreign policy challenge.

Hopes For The Future

Vali Nasr made a recent appearance on Charlie Rose (goto wwww.charlierose.com and search for Nasr) to discuss his thesis of the rise of a Muslim middle class. He's also moved from the Naval Postgraduate School to Tufts, and more importantly, become a senior ad visor to Richard Holbrooke. At least you have to admit that while we may not be able to make it work we won't do so out of blind ignorance and narrow chauvinisms this time (ala Vietnam). Those arguments have been criticized but we think, on the whole, he has the central point right.

It's in our interests for all these countries to develop which means their economies, government and societies have to progress. Turkey has had an effective government since Ataturk but, under pressure from the EU, has made enormous strides in the last several years. Those strides are the result of a deliberate plan being reasonably well executed.

That suggests a direction for our policies to move in with regard to Pakistan. Figure out how to engage the interest groups concerned with becoming involved in the world and bring them into the fold. Attempt to keep the lid on in the meantime, support economic and institutional development and above all, don't walk away (again!). The specifics are left as a take-home test for our policy and foreign affairs mavens. Our course if they screw it up it'll be a take-home for all of us - in the worst case think 911 with nucs!

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Historical Background

Rediscovering Central Asia In AD 998, two young men living nearly 200 miles apart, in ­present-­day Uzbekistan and Turkmenistan, entered into a correspondence. With verbal jousting that would not sound out of place in a ­21st-­century laboratory, they debated 18 questions, several of which resonate strongly even ­today. Few exchanges in the history of science have so boldly leapt into the future as this one, which occurred a thousand years ago in a region now regarded as a backwater. As William Faulkner reminded us in his speech accepting the Nobel Prize in 1950, there is a big difference between surviving and prevailing. Is the best hope of these lands merely to work their way back up to zero? Or can they possibly reclaim some of the luster of their glorious past, and ­prevail? And glorious it was. It is hard to know where to begin in enumerating the intellectual achievements of Central Asians a millennium ago. In mathematics, it was Central Asians who first accepted irrational numbers, identified the different forms of cubic equations, invented trigonometry, and adapted and disseminated the decimal system and Hindu numerals (called “Arabic” numbers in the West). In astronomy, they estimated the earth’s diameter to a degree of precision unmatched until recent centuries and built several of the largest observatories before modern times, using them to prepare remarkably precise astronomical tables.In chemistry, Central Asians were the first to reverse reactions, to use crystallization as a means of purification, and to measure specific gravity and use it to group elements in a manner anticipating Dmitri Mendeleev’s periodic table of 1871. They compiled and added to ancient medical knowledge, hugely broadened pharmacology, and passed it all to the West and to India. And in technology, they invented windmills and hydraulic machinery for lifting water that subsequently spread westward to the Middle East and Europe and eastward to China.

Remembering Afghanistan’s Golden Age From presidential confidants in the White House Situation Room to anchors on cable television to ruminators at the city’s think tanks, the view has settled in: Afghanistan is an ungovernable collection of tribes that has confounded every conqueror since Alexander the Great. Like a lot of received wisdom, it may well be correct.But as President Obama debates whether to send more American troops to Afghanistan, and whether, more pointedly, he might be sending them down a black hole of civic hopelessness, American and Afghan scholars and diplomats say it is worth recalling four decades in the country’s recent history, from the 1930s to the 1970s, when there was a semblance of a national government and Kabul was known as “the Paris of Central Asia.”Afghans and Americans alike describe the country in those days as a poor nation, but one that built national roads, stood up an army and defended its borders. As a monarchy and then a constitutional monarchy, there was relative stability and by the 1960s a brief era of modernity and democratic reform. Afghan women not only attended Kabul University, they did so in miniskirts. Visitors — tourists, hippies, Indians, Pakistanis, adventurers — were stunned by the beauty of the city’s gardens and the snow-capped mountains that surround the capital.

  • Afghan Antiquity Ultimately, "I Tesori Ritrovati" is heartening not because it commemorates an idyllic nomadic past, but because it suggests that beauty, at least, endures. It's an opportunity to see wonderful objects in an atmospheric setting -- and that's enough reason to go.
  • Afghanistan: Hidden Treasures from the National Museum, Kabul
    A magnificent array of recently recovered precious artifacts from ancient Afghanistan, which was home to some of the most complex, rich, and original civilizations on the continent of Asia.
  • Five Best These books afford a deeper understanding of Afghanistan, says Ann Marlowe.
The Arabs: A History Eugene Rogan talks about five centuries of Arab history at an event hosted by the University of Oxford New York Office.  "The Arabs" was named one of the notable books of 2009 by The Atlantic magazine and the Financial Times.

Middle East: Iran

Hypothesizing on the Iran-Russia-U.S. Triangle The Russians see themselves facing an existential threat from the Americans. Whether Washington agrees with Biden or not, this is the stated American view of Russia, and by itself it poses an existential threat to Russia. The Russians need an existential counterthreat — and for the United States, that threat relates to oil. If the Russians could seriously threaten the supply of oil through the Strait of Hormuz, the United States would lose its relatively risk-free position in the FSU. It follows from this that strengthening Iran’s ability to threaten the flow of oil, while retaining a degree of Russian control over Iran’s ability to pull the trigger, would give Russia the counter it needs to American actions in the FSU. Significantly, while this would wreak havoc on Persian Gulf producers and global oil consumers at a time when they are highly vulnerable to economic fluctuations, a spike in the price of oil would not hurt Russia. On the contrary, Russia is an energy exporter, making it one of the few winners under this scenario. That means the Russians can afford much greater risks in this game. We also do not know that the Iranians support this Russian move. Iranian distrust of Russia runs deep, and so far only the faction supporting Ahmadinejad appears to be playing this game. But the more the United States endorses what it calls Iranian reformists, and supports Rafsanjani’s position, the more Ahmadinejad needs the Russian counter. And whatever hesitations the Russians might have had in moving closer to the Iranians, recent events have clearly created a sense in Moscow of being under attack. The Russians think politically. The Russians play chess, and the U.S. move to create pressure in the FSU must be countered somewhere.

From Power to Chaos — Tracking Iran's Four-Month Slide What a difference a few months can make. In early June, Iran was at the apex of its power on the world stage. Aid to insurgents in Iraq, Afghanistan and Lebanon had helped convert Tehran into a regional superpower rivaled only by Israel. At home, hard-liners led by President Mahmoud Ahmadinejad had consolidated control of parliament, the judiciary and the military and marginalized reform parties. This week, however, Iran heads into talks in Geneva with the U.S. and five other world powers more vulnerable at home and abroad than at any time since the revolution's chaotic early days. Despite defiant talk and a weekend display of military force, the world's only theocracy begins its most important diplomatic engagement in three decades in real trouble. Over the past four months, the Islamic Republic has faced two game changers. First, the June 12 presidential election spawned a vibrant new opposition movement, a political schism among the theocrats and popular protests that deeply undermined the hard-line regime's legitimacy among its constituents. Second, the gotcha revelation on Sept. 25 about a secret nuclear plant put Tehran on the defensive with both its enemies and allies — and undermined Ahmadinejad's U.N. media blitz, which had been designed to boost his post-election image. Now those challenges are converging, tightening the squeeze on the regime. Over the weekend, Iran's new opposition chose sides in the nuclear debate — and sided with the world. "The Iranian Green Movement does not want a nuclear bomb, but instead desires peace for the world and democracy for Iran," said a statement issued by filmmaker and opposition spokesman Mohsen Makhmalbouf. "The Green Movement in Iran furthermore understands the world's concerns and in fact has similar concerns itself." Thumbing its nose at the world may not help, since even the skeptical Russians suggested last week that further sanctions may be in order if Iran does not come clean about the secret facility and other older questions about Tehran's nuclear program. "The Iranians are in a very bad spot now because of this deception, in terms of all of the great powers," Defense Secretary Robert Gates told ABC News on Sunday.

Iran Jumps 11 Spots in the Failed States List When the U.N. Security Council slapped a third round of sanctions on Iran for its nuclear program in March 2008, the country's economy, bolstered by record crude prices, still looked set to roar. Oil revenues had helped Iran grow at a healthy 6.9 percent clip during the previous year. Even poverty levels were down, according to the World Bank. So how could the country jump 11 ranks in the Failed States Index this year? The index correctly penalizes Iran for macroeconomic mismanagement. Inflation doubled in annual terms from 15 to 30 percent in 2008 after President Mahmoud Ahmadinejad boosted social spending to "bring the oil money to people's dinner tables." As demand expanded, prices for nontraded goods such as housing rose sharply, squeezing the poor and the middle class. A flood of cheap imports kept inflation from going even higher, but jobs were lost as imports undercut local industries. The central bank restricted credit sharply to reduce inflation, hurting businesses further and putting more people out of work. Inflation did come down to below 20 percent by December, but unemployment probably increased. Iran's jobless rate hovers around 12 percent, with three out of four unemployed Iranians under age 30. Festering discontent about inequality helped inspire Ahmadinejad's drive to redistribute the oil cash. But on this score, the results were also disappointing.

Iran's Crisis of Resistance  But the Islamic Republic is currently experiencing the worst crisis of legitimacy, both at home and abroad, since its founding. In the wake of Iran's controversial presidential elections, and the brutal crackdown on pro-democracy demonstrators that followed, Iran's status as vanguard of the resistance has been eroding. Arabs who have themselves struggled for years under corrupt authoritarian dictatorships, and who have looked longingly at Iran's democracy -- seriously proscribed as it was -- watched in June with horror as truncheon-wielding Basiji thugs ran down demonstrators in the streets, in scenes that echoed their own government's crackdowns. They read of brutal incarcerations, torture, disappearances, and rape by prison authorities.

Cleric's Death, Torture Case Jolt Iran Iran's opposition on Sunday seized upon the death of one of the Islamic republic's founding fathers -- a revered ayatollah who was also a fierce critic of the nation's leadership -- to take to the streets in mourning. Fearing that mourners could quickly turn into antigovernment protesters, Iranian authorities tightened security across the country. In Tehran, crowds held up pictures of the dead cleric and chanted, "This is the month of blood, the regime is coming down," according to eyewitnesses and videos posted on YouTube. But the death of Grand Ayatollah Hossein Ali Montazeri, who passed away in his sleep, was only one of two surprises to shake Iran over the weekend. Hours earlier, on Saturday, military prosecutors alleged that prison guards tortured to death at least three student protesters in July, contradicting months of denials by top leaders. The reversal is one of the biggest blows to Tehran's credibility since government protests first erupted six months ago. Either development, by itself, would provide a rallying point for the opposition, which claims last summer's presidential election was a fraud and is demanding a political overhaul. Together, they represent the widening array of challenges facing the Iranian regime. Complicating matters, the weekend's events coincide with the 10-day Muharram religious holiday, during which Shiite Muslims traditionally hold emotionally charged street processions to honor a revered Shiite saint. The opposition already had vowed to mark this year's ceremonies with massive daily protests against the government. Iran's leadership maintains a firm grip on power and quickly moved to assert its control, using tools that have proved effective in the past to tamp down unrest. Prominent opposition figures and activists reported receiving threatening phone calls from security agents on Sunday, warning them against attending Monday's funeral, according to the International Campaign for Human Rights in Iran. Five prominent opposition figures were reportedly arrested on the road to the holy city of Qom, where the ayatollah's funeral service was planned.

Help Iranians, Never Mind the Bomb - The Islamic republic of Iran’s year of living dangerously is finding an apt end in the extraordinary scenes unfolding after the funeral of Grand Ayatollah Hossein Ali Montazeri. The senior cleric’s funeral has turned into a huge demonstration against the Government, with tens of thousands of protesters descending on the holy city of Qom. The YouTube clip of the murder of the young protester Neda Agha-Soltan in the summer’s demonstrations against the stolen elections symbolised the Tehran regime’s betrayal of its youth. The death of Montazeri was a reminder of how an older generation has been betrayed. Montazeri, a founding father of the republic and once a chosen successor of Ayatollah Khomeini, came to despise the monster that grew out of the revolution. He recently denounced the regime’s shock troops, the Basij, as having chosen the “path of Satan”.  Diplomatic observers in Tehran have no doubt about the potential of this moment to change the course of history. Ambassadors from Eastern European countries sense a familiar spirit in the air, and regale their colleagues with stories of the final days of Honecker and Ceausescu. Its legitimacy eviscerated, support crumbling from top to bottom, you would imagine Tehran to be fielding international protests about its repressive handling of the protests. Instead, it has secured almost a free hand at home by distracting the world with its nuclear ambitions.

Middle East: Afghanistan, Iraq & Pakistan

A Lonely Kind of Courage Cadets are gathered together not infrequently in one of various auditoriums to listen to statesmen, generals, pundits, or performers. But presidents are a special case. “Two presidents in two years!” I overheard one cadet say to another with a kind of wonder as he recollected that then-President Bush had visited only last December.Over the years, the rhetoric directed at the Corps of Cadets has ranged from the lofty to the earthy. There were no jokes last night. The event was prefaced by a colonel’s celebration of the American tradition of a non-partisan military. The president, in keeping with the gravity of the occasion, delegated to the Superintendent the granting of amnesty to cadets being punished for minor infractions—an authority customarily exercised by heads of state on visits to West Point. It seemed to me that the cadets’ response to the announcement of amnesty, made moments before the president’s arrival, was more subdued than usual. They were ready to listen. Service academies theoretically provide safe audiences for the Commander-in-Chief. But to look into the eyes of the people you are sending to war, when what you hope to do is forge a world in which young people, as Truman put it in the language of a veteran artilleryman of the Meuse-Argonne Offensive, “won’t have to go and be cannon fodder,” is, I think, an act of honesty. President Obama’s challenge was twofold of course: to articulate a policy and to attend to an audience that would be directly, materially affected by that policy in ways they can see only too well and in ways they cannot even imagine. The seniors I teach have just chosen the branches of the Army in which they will serve—aviation, infantry, military police, etc. All semester I have watched them devote to this choice, as well as to a consideration of the profession of arms and to the ambiguous situations into which it might deliver them, a substantial amount of thought. How could a Commander-in-Chief’s emphasis on deliberation and restraint, on the “nimble and precise ... use of military power,” and on a set of national values encompassing the value of disagreement, not strike a chord with an audience so circumstanced? When my classes next meet, the cadets will no doubt share their thoughts on the speech, and I will share with them another speech, written, like last night’s, after a decade of national crisis and transformation, a speech that, like President Obama’s, linked domestic prosperity and foreign engagement, civilian and military enterprises. In his 1939 West Point commencement address, FDR refrained from excessive congratulation and challenged his audience to regard their commissioning as a beginning rather than a culmination: “You will find, as I have, that ... service never ends—in the sense that it engages the best of your ability and the best of your imagination in the endless adventure of keeping the United States safe, strong and at peace.” The demand for such imagination on the part of military leaders has only increased since 1939.

  • Panel Criticizes Military’s Use of Embedded Anthropologists A two-year-old Pentagon program that assigns social scientists to work with military units in Iraq and Afghanistan has come under sharp criticism from a panel of anthropologists who argue that the undertaking is dangerous, unethical and unscholarly.

Obama's lonely decision Perhaps the most disturbing thing about the last few years has been the stunningly large number of American thinkers, strategists and pundits who have been perfectly prepared to lose wars in both Iraq and Afghanistan. People talk about American decline these days, but it is not in the basic measurements of national power that American decline is to be found. It is in the willingness of the intellectual and foreign policy establishments to accept both decline and defeat.

Lunch With The President: The Politics Of Obama's War Plan President Obama said today he is "painfully clear" that his revised Afghanistan strategy is "politically unpopular" -- especially within his own party -- and that he expects to be held "fully accountable" if the strategy fails. Obama, speaking with a group of columnists and reporters at a White House lunch today, conceded that Americans "are right to be concerned" about the additional expense of blood and treasure in Afghanistan. "But that's not how I make decisions. If I were basing my decisions on polls, then the banking system might have collapsed and you probably wouldn't have GM or Chrysler, and it's not clear that the economy would be growing again." It's Obama's theory that escalating the Afghanistan conflict provokes anxiety "precisely because the American people are rightly focused on, how do we rebuild America." Later in the hour, Obama supposed that Americans' economic anxiety was linked to their assessment of the war. Here's his explanantion: "The American people are having a really tough time right now, in their own lives. We've got the highest unemployment rate since the early 80s, people are deleveraging from massive amounts of debt, there's a lot of anxiety  out there about losing your  health care, losing their house, losing your job, not being able to finance your kid's college's education and so one speech is not going to suddenly persuade them that investing a lot more blood and treasure in an Afghanistan is an attractive proposition. My goal in the speech tonight is to explain to the American people why we have to finish the job and why the strategy I'm putting forward is not only the best possible strategy for our national security and has the best prospect of stabilizing Afghanistan but also has the best prospect of getting our troops home in some realistic timeframe."

Iraq's Oil and Its Future We Iraqis know that our oil reserves are the baseline of our status in the region and the lubricant of our liberation. We are not ashamed to say so. Blood for oil is our reality, and we intend to redeem the terrible price we have paid. One chance to do that will come in February, when we hold our third free national election since Saddam Hussein was removed from power. Because our people's prosperity depends on oil, each political party must put forward its plan for developing our petrochemical industry. For me and my colleagues who are forming the Iraqi National Alliance (INA), the best way forward is to transform our country and our economy by giving all Iraqis a direct share of our oil income. The INA agrees that significant foreign investment, and the legitimate profit of those who invest, is necessary for successful oil and economic development. The INA also recognizes that Iraq must, at the same time, safeguard its own patrimony. This balance is for the next government to strike. The recent competition for Iraq's resources by international oil companies is welcomed. But a headlong rush to auction those reserves right now—before election day—by the outgoing Iraqi administration will only make it more difficult to developing our oil industry in a way that wins broad support.The INA's domestic oil and petrochemical policy is to transfer Iraq's oil-wealth to the individual Iraqi citizen as much as possible. Decades of dictatorship concentrated wealth in the hands of Saddam and his criminal gang. As the people's representatives, INA pledges to directly enrich Iraq's people.

Iraq's pivotal year The country will hold elections in March to determine its political future. Months of parliamentary horse-trading are likely to ensue, which could provoke a return to violence. The United States still has 120,000 troops stationed in Iraq, and all combat forces are scheduled to leave by August, further testing the country's ability to handle its own security. How we draw down in Iraq is just as critical as how we ramp up in Afghanistan: If handled badly, this withdrawal could be a disaster. Handled well, it could be a significant success. The basic challenge sounds simple but is extremely difficult to meet. Iraq needs a stable power-sharing deal that keeps all three groups invested in the new country. To make this happen, all three will need to compromise. And the central positive force in all of this can be the United States. Yet the United States continues to have considerable influence in Iraq. By all accounts, U.S. diplomacy has been crucial to getting the Kurds to agree to the March elections. But Iraq could still turn out to be an extraordinary model for the Arab world. Its people are negotiating their differences for the most part peacefully; its politics is becoming more pluralistic and democratic; its press is free; its provinces have autonomy; its focus has shifted to business and wealth creation, not religion and jihad. At a conference in Baghdad last October, the Iraq government focused on its current obsession -- investment. It released a well-produced document, "Open for Business," that details the business opportunities that await capitalists in Iraq. Politics in Iraq feels different from other Arab countries. Friday sermons in Baghdad are mostly about the corruption and competence of Iraq politicians, not the evil designs of America of the perfidy of the Jews. It could be the weakening of the victim complex in which the Arab world has been stuck -- forever seeing itself as acted upon by foreign forces and never in charge of its own destiny. In 2010, the Obama administration has a window of opportunity to push these positive trends forward. If they stay engaged, are successful, and get lucky, perhaps this is what America will ultimately be remembered for in Iraq.

Pakistan Holds Upper Hand in U.S. War The Pakistani army may or may not decide to take power once again in Islamabad. Off and on, for decades, Pakistan has been ruled by its military, usually with American support or acquiescence. To this day, for reasons of state, Pakistan's army continues to support the Taliban. A new round of political upheaval has been triggered in Pakistan, with the Supreme Court's decision to void the National Reconciliation Ordinance (NRO) that provided a get-out-of-jail-free card to key civilian leaders of Pakistan. Included among those leaders are its utterly corrupt president, Asif Ali Zardari, and several top officials, including the minister of defense and the minister of interior. If Pakistan has any hope of breaking the military's stranglehold on power, that hope rests in the civilian parties, including Zardari's Pakistan People's Party -- the party of the late President Bhutto and his daughter, Benazir, Zardari's late wife, who was assassinated on her return from exile -- and the more religious-centered Pakistan Muslim League (N) of the Sharif brothers, including Nawaz Sharif, a former prime minister. Neither the PPP and the Muslim League, however, are true mass-based political parties. Instead, they have become vehicles for the personal and political ambitions of the corrupt families who control them. By default, the leadership of the democratic, civilian movement in Pakistan has fallen instead to the lawyers' movement and to the courts, but it's hard to see how those forces could emerge as a credible political movement that could lead the country. In Pakistan, nominally a democracy, actual democrats are few and far between, and it will take a long time for any of Pakistan's political parties and movements to put down roots and grow into true democratic parties. Meanwhile, it isn't clear that the army will allow that to happen. Will the army take over? Right now, most analysts suggest that the army can bide its time, sitting back and watching the civilians flounder, confident in the knowledge that they can seize power at any time.

Why Does Pakistan Hate the U.S.? This, then, is why the Pakistani elite hates the United States. It hates it because it is dependent on it and is still being bought by it. It is a dislike that is also a form of self-hatred of the sort that often develops between client states and their paymasters. (You can often sense the same resentment in the Egyptian establishment, and sometimes among Israeli right-wingers, as well.) By way of overcompensation for their abject status as recipients of the American dole, such groups often make a big deal of flourishing their few remaining rags of pride. This is, and always was, a sick relationship, and it is now becoming dangerously diseased. It's not possible to found a working, trusting, fighting alliance on such a basis. Under communism, the factory workers of Eastern Europe had a joke: "We pretend to work, and they pretend to pay us." In this instance, the Pakistanis don't even pretend that their main military thrust is directed against the common foe, but we do continue to pay them. If we only knew it, the true humiliation and indignity is ours, not theirs. This will continue to get nastier and more corrupt and degrading until we recognize that our long-term ally in Asia is not Pakistan but India. And India is not a country sizzling with self-pity and self-loathing, because it was never one of our colonies or clients. We don't have to send New Delhi 15 different envoys a month, partly to placate and partly to hector, because the relationship with India isn't based on hysteria and envy. Alas, though, we send hardly any envoys at all to the world's largest secular and multicultural democracy, and the country itself gets mentioned only as an afterthought. Nothing will change until this changes.

  • Pakistan Needs to Grow Up In the 1950s, the constant refrain I heard was how young a state Pakistan was as an excuse and an explanation for the new country’s many failings and shortcomings. Gradually, this mantra has faded as Pakistan grew older, even though things have got worse, not better, with the passage of years. As I look around, I see many signs of a country that has grown older, but has failed to grow up
  • One Pakistani Institution Places His Faith in Another Pakistan’s biggest problem, he believes, is one of leadership. A corrosive system of privilege and patronage has eaten away at merit, degrading the fabric of society and making it more difficult for poor people to rise. The growing tendency to see government positions as chances to profit, together with the explosion in the country’s population, has led to a sharp decline in the services that Pakistan’s government offers its people.

Middle East: Israel and the Arab World

Call White House, Ask for Barack This peace process movie is not going to end differently just because we keep playing the same reel. It is time for a radically new approach. And I mean radical. I mean something no U.S. administration has ever dared to do: Take down our “Peace-Processing-Is-Us” sign and just go home. Right now we want it more than the parties. They all have other priorities today. And by constantly injecting ourselves we’ve become their Novocain. We relieve all the political pain from the Arab and Israeli decision-makers by creating the impression in the minds of their publics that something serious is happening. “Look, the U.S. secretary of state is here. Look, she’s standing by my side. Look, I’m doing something important! Take our picture. Put it on the news. We’re on the verge of something really big and I am indispensable to it.” This enables the respective leaders to continue with their real priorities — which are all about holding power or pursuing ideological obsessions — while pretending to advance peace, without paying any political price. The fact is, the only time America has been able to advance peace — post-Yom Kippur War, Camp David, post-Lebanon war, Madrid and Oslo — has been when the parties felt enough pain for different reasons that they invited our diplomacy, and we had statesmen — Henry Kissinger, Jimmy Carter, George Shultz, James Baker and Bill Clinton — savvy enough to seize those moments. Today, the Arabs, Israel and the Palestinians are clearly not feeling enough pain to do anything hard for peace with each other — a mood best summed up by a phrase making the rounds at the State Department: The Palestinian leadership “wants a deal with Israel without any negotiations” and Israel’s leadership “wants negotiations with the Palestinians without any deal.”  It is obvious that this Israeli government believes it can have peace with the Palestinians and keep the West Bank, this Palestinian Authority still can’t decide whether to reconcile with the Jewish state or criminalize it and this Hamas leadership would rather let Palestinians live forever in the hellish squalor that is Gaza than give up its crazy fantasy of an Islamic Republic in Palestine.

ISRAEL: Firmly Behind The Genocide Solution Peace prospects between Israel and the Palestinians are bleaker than ever. The main reason for this is something that is rarely reported in the mass media; decades of really vile anti-Semitic propaganda in the Arab media (and now in many other Moslem nations as well). This propaganda calls for the destruction of Israel, not peace negotiations. This stuff is very nasty, so much so that even Arab editors know better than to let much of it appear on their English language web sites.

Memo From Tel Aviv: A Tougher Stance on the Use of Military Force Stirs Little Public Debate

In the year since Israel launched its devastating military offensive against Hamas in Gaza, the country’s political and military leaders have faced intense international condemnation and accusations of possible war crimes. But Israel seems to have few qualms. Officials and experts familiar with the country’s military doctrine say that given the growing threats from Iranian-backed militant organizations both in Gaza and in Lebanon, Israel will probably find itself fighting another, similar kind of war. Only next time, some here suggest, Israel will apply more force. “The next round will be different, but not in the way people think,” said Giora Eiland, a retired major general and former chief of Israel’s National Security Council. “The only way to be successful is to take much harsher action.”  Such talk has raised alarm among some critics in Israel, but so far it has stirred little public debate. Both the three-week campaign in Gaza, which ended on Jan. 18, and Israel’s monthlong war in 2006 against the Shiite Hezbollah organization in Lebanon have brought relative quiet to Israel’s borders. Maj. Gen. Amos Yadlin, the chief of Israel’s military intelligence, said the source of the quiet was “not the adoption of Zionism by our enemies.” The main factor, he recently told an audience at the Institute for National Security Studies at Tel Aviv University, is Israeli deterrence, starting with the war in Lebanon and continuing with the Gaza operation that the Israelis called Cast Lead. But decisive victory against irregular forces has been elusive. In the military’s assessment, the calm is temporary and fragile; Hamas and Hezbollah are said to be rearming, making another confrontation only a matter of time. While the Israeli military has a clear advantage in fighting conventional armies, it is still adapting to the new and complicated demands of asymmetric warfare.

Netanyahu Asks Rival to Join Government At the end of an otherwise routine security briefing on Thursday, Prime Minister Benjamin Netanyahu surprised the leader of the opposition, Tzipi Livni, with an offer to join his government, saying Israel was faced with existential choices that required a broad coalition. Ms. Livni, a former foreign minister and the leader of the Kadima Party, did not immediately turn him down, saying the proposal required further exploration. In a statement, Mr. Netanyahu, leader of the hawkish Likud Party, said he made the offer on the basis of his speech in June calling for a two-state solution to the Israeli-Palestinian conflict, the same position held by Kadima. Mr. Netanyahu tried to bring Kadima into the government after last February’s election, but failed because of disagreements both on policy and on power sharing. He succeeded in attracting the smaller Labor Party, but his coalition is otherwise made up of parties from the right. Ms. Livni has been facing a leadership challenge inside her party from Shaul Mofaz, a former defense minister, making her hand weaker now. And since Mr. Netanyahu has shifted somewhat to the center — as evidenced by his endorsement of the two-state solution and a 10-month partial freeze on settlement building in the West Bank — the chances of their joining forces seem greater than before. But many politicians and analysts predicted that the offer would be rejected, and that it was related mostly to Mr. Netanyahu’s recent attempts to destroy Kadima by luring about a dozen members to form a breakaway party and join the government.

The Arab World: Re-wakening and Revival?

The Arab world: Waking from its sleep WHAT ails the Arabs? The United Nations Development Programme (UNDP) this week published the fifth in a series of hard-hitting reports on the state of the Arab world. It makes depressing reading. The Arabs are a dynamic and inventive people whose long and proud history includes fabulous contributions to art, culture, science and, of course, religion. The score of modern Arab states, on the other hand, have been impressive mainly for their consistent record of failure. They have, for a start, failed to make their people free: six Arab countries have an outright ban on political parties and the rest restrict them slyly. They have failed to make their people rich: despite their oil, the UN reports that about two out of five people in the Arab world live on $2 or less a day. They have failed to keep their people safe: the report argues that overpowerful internal security forces often turn the Arab state into a menace to its own people. And they are about to fail their young people. The UNDP reckons the Arab world must create 50m new jobs by 2020 to accommodate a growing, youthful workforce—virtually impossible on present trends. In almost every Arab country, fertility is in decline, more people, especially women, are becoming educated, and businessmen want a bigger say in economies dominated by the state. Above all, a revolution in satellite television has broken the spell of the state-run media and created a public that wants the rulers to explain and justify themselves as never before. On their own, none of these changes seems big enough to prompt a revolution. But taken together they are creating a great agitation under the surface. The old pattern of Arab government—corrupt, opaque and authoritarian—has failed on every level and does not deserve to survive. At some point it will almost certainly collapse. The great unknown is when.

Marrakesh Express If you want an antidote to the photographs of police officers beating demonstrators and girls dying on the streets of the Iranian capital, take a drive through the streets of the Moroccan capital. You might see demonstrators, but not under attack: On the day I visited, a group of people politely waving signs stood outside the parliament. You might see girls, but they will not be sniper targets, and they will not all look like their Iranian counterparts: Though there is clearly a fashion for long, flowing headscarves and blue jeans, many women would not look out of place in New York or Paris. Welcome to the kingdom of Morocco, a place which, in the light of the past two week's events in Iran, merits a few minutes of reflection. Unlike Turkey, Morocco is not a secular state: The king claims direct descent from the prophet Mohammed. Nor does Morocco aspire to be European: Though French is still the language of business and higher education, the country is linguistically and culturally part of the Arabic-speaking world. But unlike most of its Arab neighbors, the country has over the past decade undergone a slow but profound transformation from traditional monarchy to constitutional monarchy, acquiring along the way real political parties, a relatively free press, new political leaders -- the mayor of Marrakesh is a 33-year-old woman -- and a set of family laws that strive to be compatible both with sharia and international conventions on human rights.The result is not what anyone would call a liberal democratic paradise.

  • The king’s friend A NEW political force is emerging in Moroccan politics. The Authenticity and Modernity Party, known by its French acronym, PAM, with a centrist non-ideological platform open to all comers, has been in existence for less than a year. Yet it already seems destined to win the general election in 2012. In its electoral debut in last month’s municipal poll, PAM won the ballot with 22% of the vote. Yet for all its success, the ascent towards the prime ministership of its founder, Fouad Ali El Himma (pictured), is the chronicle of a political elevation foretold.

Indonesia Moves Toward Center in Elections With secular and nationalist parties, like the newly established Greater Indonesia Movement Party and the party of retired Suharto-era General Wiranto, taking the majority of the votes, Indonesian voters appear to be moving toward the center and abandoning parties based on religion, observers say. Grappling with the global economic crisis and considerable challenges at home, a majority of Indonesians have once again shown that they do not want religion leading the national agenda. "Voters have become more pragmatic and rational as opposed to ideological," says Hasibuan. Secular parties appeared to do well even in provinces like Aceh, the only part of the country to have enacted syariah law. Fears in the run-up to the election of violence in the once separatist-minded province failed to materialize although at least five were killed on the opposite end of the country in Papua on election day. Voters in the easternmost province, where separatist sentiment also runs high, went to the polls despite the violence that included attacks on a police station and the burning of a building. "We're seeing the Indonesian voter demonstrating that it is a rational voter, shunning sectarian issues," says Robin

Reform Is Brewing in Arab World The events I participated in were rather routine occurrences that happen every day throughout major Arab cities: an American University of Beirut-sponsored gathering of researchers from around the region who examined the governance systems in Palestinian refugee camps, and explored with Lebanese colleagues means of resolving Palestinian-Lebanese tensions; an Arab youth media forum sponsored by UNICEF regional office that brought together journalists from around the Middle East who explored the world of youth and their rights, and the constraints on quality media work; a seminar by the Arab Reform Initiative, a network of 15 Arab research institutes, to study how traditional power elites and social structures are adapting to the phenomenon of new political actors in society; and a regional symposium at the UN Economic and Social Commission for Western Asia to explore the issues of water, climate change and energy, youth sector employment trends, and integrated regional development. This was just one week, in one Arab city, Beirut. I am sure a hundred such gatherings took place all around the Arab world last week. Most of them were not covered by the international media or reported on by diplomats. They should be, because they may be the single strongest force for imminent change in the Arab region: the insistence by citizens of stressed and often violent Arab states to look within their societies, fearlessly question their prevailing regimes and power structures, honestly study and understand the full ranges of forces, players and constraints at work in them, and generate ideas for orderly change from distortion, dictatorship and disparities to a tantalizing new arena of national normalcy. Two critical first steps to change from within the modern Arab security state clearly are underway: honest Arab men and women are speaking out to identify the ailments and weaknesses of their societies and demand change; they are also undertaking diligent studies and analyses to understand how our otherwise noble Arab culture and warm societies have transformed in the past 40 years to a series of militarized security and police states, where massive shopping malls and real estate extravaganzas seem to matter more than creative young minds and social equity.

Weak States Endanger Entire Middle East But the lesson of the 1950s and early 1960s for the leaders of the Arab states was clear: unless they built real states that could control their societies, their rule would always be challenged by sub-state actors and regional movements – sometimes working in tandem. Thus began the period of Arab state building. It was not a pretty process: states built large armies and police forces and established powerful internal security agencies. They took over large swathes of the economy through nationalisation, snuffing out much of the entrepreneurial energy in economies that had historically depended on trade. The enormous increase in oil prices in the 1970s strengthened the rulers of oil-producing states, many of whom became more autocratic, closing down parliaments, squashing opposition parties and severely limiting free speech. These developments, of course, were not unique to the Middle East: scholars of the state-building process in early modern Europe still write articles with titles like “The Violent Creation of Order” and “State-Making as Organised Crime”. The strengthening of Arab states brought about a decline in the influence of non-state actors across the region: The most important question for the coming decade in the Middle East is whether the stronger states will now begin to weaken. It does not seem likely: those states that grew weaker in the last decade did so under the pressure of external military intervention, and the present stronger states are unlikely to suffer that fate. Coming leadership transitions in several of these states may test their resilience, but Syria and Jordan weathered what many expected would be difficult transfers of power in the late 1990s, and Egypt and Saudi Arabia should be able to do so as well. But the key to stability and peace in the region rests with the weak states – Iraq, Palestine, Lebanon and Yemen – which will have to build up their capabilities, exercise effective authority within their borders, and win the battle against internal non-state actors and outside interference alike. They face an uphill struggle.

The Rising Sons of North Africa The role played by Libyan ruler Muammar al-Qaddafi’s son, Saif al-Islam, in gaining the release of the Lockerbie bomber Abdelbaset Ali al-Megrahi, and Egyptian President Hosni Mubarak’s state visit to Washington accompanied by his son, Gamal, suggest that dynastic successions are underway in both countries. They are not alone. Mubarak and Qaddafi, along with Tunisia’s Zine el-Abidine Ben Ali and Abdelaziz Bouteflika of Algeria, are among the world’s oldest and longest-serving heads of state. All four face the ticklish problem of succession, and speculation has been mounting for some time of possible attempts to keep power in the family. That solution is becoming pretty commonplace, from the Aliyevs of Azerbaijan to the Kims of North Korea to the Assads in Syria. Dynastic succession safeguards the immediate and frequently extensive interests of the ruling family as well as those of the wider political and business elite. But the possibility of near simultaneous successions in North Africa is striking nonetheless. All four North African rulers have, to greater or lesser degrees, made themselves the center of highly opaque power structures. Everything in their countries depends on the person and family rather than the office. Yet, despite these authoritarian leaders’ apparently solid grip on power, ensuring that a relative takes over is not as simple as it seems. The problem boils down to overcoming possible resistance – from both the elite and the public – that could derail the handover or undermine the successor’s authority. Dealing with elite interests requires ingenuity. Lucrative business opportunities can be allocated to soothe the successor’s political adversaries, while renegades can be targeted to discourage others – for example, by being stripped of property or dismissed from positions of influence. Securing popular legitimacy requires equal dexterity, which has played an important role in preventing North African leaders and family members from openly admitting their preparations for dynastic successions.

December 25, 2009

Reflections for the Season: Faith, Hope and Renewal

Let me start by wishing, well and sincerely, all my readers the best wishes and sentiments of the season. It's a season for celebrating many things but at it's heart it is the Solstice - the Season of Re-birth and Renewal. And has been recognized and celebrated by humankind for as long as we know about. Beyond mere sentiments, however well-meant, let us also try to add some reflections on the deeper aspects of the Season.

Seeing Thing For Themselves

Let us start with the great Zen Sage Dogen, in a verse taken from Steve Heine's wonderful translation, "Verses from the Mountain of Eternal Peace". In one of six poems on snow Dogen says:

All my life perplexed by truth and falsity, right and wrong;

Now amusing myself in the moonlight,

Laughing at the wind,

Listening to the songs of birds -

So many years spent idly contemplating

The immense white layer on the mountains;

This winter, all of a sudden,

I see it for the first time as a snow-mountain.

How many times have you looked at a mountain and see something that wasn't there but was constructed out of your own mind? Instead of seeing things for themselves, as they are and without distortion. Personally we find that our views of the world are often distorted like a fun house mirror by the lack of clarity of our thinking, the turbulence of our emotions and the disturbances of our body. We are, in other words, ruled by what has accumulated in our back brain, or as James calls it, the apperceptive mass. The first step forward is often seeing the Mountain.

Reflections While Driving

A couple of weeks ago driving back from a meeting, two big Aha's came to me, or so it seemed to me then. Drivetime is something that I often use for reflection. And sometimes when reflection uses me. Both sort of happened this time when my mind was cleared of preoccupations  So I wanted to testfly them by you. First as the pure ahas and then wrapped in an embryonic argument.
The Two Big Ahas
 
Forgive me if these aren't as well written as they might be, or as powerful as they seemed to me when the lights went off.
 
1. Faith is Beyond Reason: attempting to work one's way to Faith by logic fails because logic doesn't reach that far. At the end of the day you have to make the leap across the chasm, no choice, one way or another.
 
2. Committing to the Rules you live by is the breakthru to living a conscious life: we all live our lives and make decisions on the rules we've accumulated in our subconscious, the apperceptive mass. Mostly these are never considered. Reaching a point where you decide and then commit on the deepest level to adopt chosen rules is life's biggest challenge. (this one in particular is not yet well-formed but, in its own way, was the biggest realization).

Deciding Why & How to Live
 
Normally we lead our lives by rules buried in our backbrains yet those rules often prove unequal to supporting a life of happiness, or to meeting the challenges of living. To change the rules we need to proceed from an intellectual apprehension of things we should do (Sunday sermon syndrome) to conviction to emotional commitment to gut-level reflex that results in disciplined daily practice that becomes a new, but consciously chosen and developed reflex. All to often we read or hear some "neat" idea, say during the Sunday morning sermon, that sounds good but doesn't change our lives. It doesn't count until the reflexes in the backbrain are changed. Or, put more bluntly, until the lizardbrain grunts, agrees and puts his reflexes behind your everyday choices.

From Aha to Practice: Steps Toward Changing Your Mind

 Of course it's one thing to listen to some insight and have some great new truth dawn on us - or have a reflection seize us in a spare moment or three. But to get from Aha to daily practice is another thing entirely. In one of his books the Dalai Lama sketches out an intriguing framework from the journey from neat idea thru intellectual investigation to mental conviction to emotional commitment to daily habit. That's a difficult and arduous journey for even the slightest change in accumulated habits. When we face the challenge to change something deeper and more fundamental, something in our core, or when we face the fears caused by some great disruption in what we thought was the natural order of the Universe finding new paths and foundations becomes even more challenging. Here we just suggest a way of thinking about and framing that journey, to be pursued and investigated in more depth later. But setting the stage for further reflections. In the meantime let us assume the graphic is a fair representation of the process.
 

From Aha to New Rules: Changing Old Habits

Let's take our original two ahas, we hesitate to call them insights (though they were for us), as you'll have to judge where they at least pass the Sunday sermon test. And try and work them out in a little more detail - how do we get from idea to practice?

1. Faith is Beyond Reason (Avveroes, Anselm, Origen, James)

Reason alone cannot encompass all that you see and must deal with. Attempting to bind the Universe to finite chains of logic is, ultimately, impossible. The Hindus, in some practices, use a sacred chant to represent this AUM, slowly said as A .... U.....M.... and then silence. The silence expresses the fact that the ultimate reality is not graspable and words cannot capture it; they can only imperfectly express a simplified interpretation. The gut-check is realizing at the deepest level that you can only have Faith as a leap across this chasm. And your only choice is to Leap or Not Leap. There is no bridge of logic that wil carry you from this observable world to that ultimate certainty.
 
2. Job's Deepest Lesson
 
Job chose to believe, to have Faith, It wasn't forced on him, it wasn't the result of some grand bargain trading off gain for service, it was a choice. He chose for himself alone to make the hardest and most difficult decision, not for what some external force chose to do for or against him. In the end Stockdale is right - you have to decide what you're willing to die for. Or, oftentimes more difficult, what you will live for and how you will live.
 
3. Confronting the Leap
 
Most people never wrestle with these issues and challenges. They are fortunate in that their lives and experiences are such that confronting them has not been forced into their awareness. More power to them since such a confrontation is extremely difficult at best and has no magic resolution. Most of the time because the rules they inherited or accumulated work well enough, or at least are satisfying, help them cope adequately with their lives and the challenges they face are insufficient to call them into question. If you're level of suffering is never enough to exceed the limits well and good.
 
But if and when inescapable Pain causes your Suffering to exceed your limits then you have to start walking the path of the twice-born. We all have pain in our lives and it is possible to learn to cope with the Suffering. Ultimately the real moment of truth arrives when the deepest ground is cut from under you, and the old rules are insufficient.
 
At that point choices are very limited indeed. But even in less difficult circumstances you can learn to live a healthier, happier and more satisfying life.
 
4. Reaching the Break Point
 
Job experienced a level of pain that should have broken his Faith. But one doesn't have to point to religious figures out of history but can instead look at myriad lives of real people in the recent past who were exposed to breaking point stress. A good example is James Stockdale but many people have lived lives at and beyond the breaking point. The fundamental question is then will it cause you to loose your Faith? Or re-discover and re-commit to it at a deeper and more meaningful level?
 
You will loose your Faith unless you can find, develop, learn, commit to and practice new ground - a new bedrock. At minimum you reach a point of forced re-examination.
 
Fundamentalist Christians talk about being re-born in Jesus. Williams James has a similar phrase when he talks about being twice-born. Finding new ground and committing to it consciously and wholeheartedly is being reborn.
 
Perhaps the best example is Mother Teresa who apparantlylived the last decades of her life deep in a crisis of Faith, where her earlier simple truths no longer sufficed, yet continued to live a good life and live it well. Being twice-born is no guarantee of the absence of Doubt, though that may be the result. But it is, in one form or another, learning to live with it.
 
5. Coping, Deciding and Re-birth
 
We all face some level of challenge to the rules we live by, on the daily level, on the major, disruptive cart-tipping level and rarely on the most fundamental level. The level where the disruption is an existential challenge to your existence.
 
It's "easy" to cope with these if the resources, rules and beliefs are adequate answers to the challenges we face. But the real test is what to do when the answers fail you and there is no easy way out.
 
Normal crisis may be painful but they merely stretch us; our answers are adequate no matter the stretch and strains. Major crisis are those which disrupt our lives and strain us beyond mere adequacy. Fundamental crisis are when no answer or resource readily available is adequate to meet our needs.
 
6. Finding New Rules
 
In general the Rules we live by are the ones we inherit, either thru our parents training and examples, the lives we've led or accumulated from experience. Questioning those is not something most people do, or have to do. When the strains reach a major level of disruption then we are usually forced to Re-examine those rules, test them and make a more conscious decision to operate by them. When the strains are truly beyond the breaking point we are Forced to the deepest examinations and re-constructions.
 
Final Thoughts
 
But if no on can do it for us their example is evidence that it can be done... and that we can have Faith in.
 
What I wish for everyone is to not have to walk these paths but when they do to walk them well. May you all find lives of satisfaction and happiness, in the deepest way.
 
Let me make you the Cosmic Wager - if finding the right ground to stand on will make your life better then you have everything to gain and nothing to loose by standing there. Whether you can prove it or not, whether it frees you from Doubt or not or whether it answers all questions and challenges or not.
 
Ganesha is the Hindu deity of obstacles and wisdom and clear-thinking. He seems like the appropriate avatar to invoke, therefore, as we reflect on the season. And think about finding Faith, Hope and Renewal.
 

A Final Word from Dogen

On visiting Mt. Potalok - popularly thought to be the earthly home of the bodhisattva Kuan-yin (or Kannon).
 
Hearing, thinking, and practice alone
 
Actualizes the mind of original enlightenment;
 
Whoever sees a vision of a god in a cave - 
 
Ye seekers must come to understand,
 
Kannon does not abide in this place.

December 23, 2009

Virtuous Cycle in Action: Europe, the BRICs, LA & Africa

This post is by way of exploring cases and proof points. It's also, in an odd way, a sort of Christmas card for the geopolitically realistic idealist. To wit - we think the case is well established not just in history but in pretty hard data that the points we raised in the last post about THE fundamental goal of policy is to establish peace and stability as the foundations for progress and prosperity. Wishful thinking about the world you'd like to have, one without sins of any sort, let along all the original ones, is more dangerous than being willing and able to face the world as it is yet make it a better place. And if that's possible, if we are slowly learning how to do it and if the evidence is clear then that's a pretty good happy holiday message in our books. Which makes the messages lying behind this Doonesbury cartoon self-serving, disingenuous and, even (sad to say) self-decieving. Think about - we may come back to or put up a pop quiz :)!

Considering the Developed Powers: Europe and Japan

Let's start by considering the major developed powers and, courtesy of both Gapminder and the Legatum Institute see how things have played out. Starting with the two "island powers" (a historical comparison oft used) - the UK and Japan. Britain is the home of the Industrial Revolution but it didn't take long for Japan to start catching up despite a much later start. Which is encouraging. NB: notice that per capita/GDP increased much more rapidly than lifespans (health) - this will be important later so take notes.

Like most European power the Brits took a bloody setback in WW1, and again in WW2. But the nation that came as close as any, as a country, to committing hari kari was Japan in WW2 and the aftermath. The drop in life expectancies and income was phenomenal and abysmal - literally. But the came roaring back at an amazing rate to catch, match and surpass Britain. Helped by the Brits giving themselves  the "British diseases' of a sclerotic bureaucracy and state-controlled socialism that stagnated them until Thatcher's revolution.

On that same line of thinking you can compare the olde enemies of France and Germany who both made two major attempts at suicide, almost literally, and suffered accordingly. Since the end of WW2 they've both gone roaring ahead on all cylinders - and we don't consider it coincidental that it was the post-war period that saw the first relative stability in government, firm commitments to democracy and adoption of market-based economies for real.

 

We found it fascinating that the Legatum Institute has been collecting and compiling a wide range of statistical studies and organizing them into analytical indices of the major dimensions of socionomic performance: Legatum Prosperity Index. Fascinating because their structure is a near-match for the one we think is appropriate. So if you look across all the dimensions of Economics, Politics, Society, Education, Values & Culture how do these four developed power stacks up?

On the whole extremely well - which is, if we're right, about what you'd expect. A really interesting study would be to compare the two datasets over time, but alas, enormously easier said than done. Compiling the appropriate data across all the key socionomic dimensions would be an enormous effort.

We do find it interesting that the one key dimension where the countries differ is in Social Capital, which is an indicator of trust, cohesiveness and legitimacy; in other words how well does a society cohere and work together. Are we looking at the reasons for French and Japanese politics and the problems Japan has had in recovering after the Lost (Two) Decade(s)? Certainly a major contributing factor.

Consider the BRICs

Let's shift to look at the major rising powers, Brazil, Russia, India and China and consider them pairwise to start with, beginning with Brazil and Russia. Two very different countries but somewhat similar in that both are somewhat resource dependent and also in that both have been subject to autocratic governments of one form or another thruout their histories.

Brazil is vastly different though in many ways, not least of which is that it's probably got the most balanced economy of any of the BRICs and is farthest along the path to self-sustaining development. Russia on the other hand is entirely resource dependent and has yet to figure out how to escape the resource-dependency trap. If any country in the 20thC would cause you to weep it would be Russia - who suffered devastations in two world wars and a self-inflicted disaster of almost the same magnitude in the Great Purges. Brazil's great problem was to escape the Latin trap - the oscillation between strong-man government and populist government. When Lulu was elected that was the fear but they seem to have found a happy medium, reflected in their steady progress. Russia on the other hand has basically stalled in terms of both health and incomes. It must be judged both the weakest of the BRICs by far (Biden got it right even though that was a little too much truth telling for diplomacy) and the major country most exposed to socionomic devolution.

India and China on the other hand appear to have crossed the self-sustaining growth threshold and are moving merrily along. One of the things to notice is that both countries raised health enormously before really getting income growing - remember the point we made above? The first powers out of the chute did it exactly the other way. In a century we've made enormous progress in public health and it's now working for us.

Now both seem to be on trajectories were health is still improving somewhat, though not quite at the same rates, while income is growing very rapidly. India, as most know by now, has lagged China. Partly by being late to the party but mostly because of differences in governance. The Chinese still have a strong and autocratic central government - what Peking decides goes. This has served them well in maintaining stability but is also their biggest threat for the future. The Indians on the other hand have the opposite problem - how to organize a disputatious and disparate society for necessary socionomic infrastructure improvements.

 The comparisons on the socionomic dimensions get even more interesting, with pronounced differences among the four countries. For comparison Sweden is also shown - as you can the Swedes are about as close to some notion of an ideal system as can apparently be conceived.

The differences and/or weaknesses highlight the challenges for each country. Economically there are in the same ballpark but have significant differences in entrepreneurship. China has a millenia old tradition to rely on for example. There's a real split on democratic institutions but that falters when you realize that all four suffer serious governance problems, i.e. graft, corruption, malfeasance, inefficiency, etc. etc. Which is not independent of the fact that all have major problems with Security.

As we've repeatedly pointed out ostensibly democratic government is NOT a panacea unless is leads to good government AND security. Good government historically is not necessarily democratic.

But each also has strengths to play to as well as challenging opportunities to work on. India for example has a deep reservoir of social capital to draw on, something nowhere near that well-developed in the others. Russia on the other hand has enormous strengths in Education. Their challenge will be to free up and apply that human capital by improving their governance. Though those problems are merely challenging in Brazil and India and are regime-threatening in China and Russia. Thruout their histories what has brought down governments has been corruption and malfeasance - so much so that the cycle is built into Chinese cultural DNA. If they don't fix those problems nothing else will matter.

And that's the ultimate bottom line - on which all else depends. The BRICs that establish the best government that adapts and evolves into a more representative form while becoming more effective and efficient will be the BRIC that does the best. But, in the grand sweep of history, none of these countries can be judged not to have made enormous progress in just a few recent decades. Now that's a Christmas present in our books!

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Key Countries and Regions

Europe's Voters Reward the Right In the midst of a financial downturn, with big government back in fashion and capitalism badly bruised, the left should have swept the European Parliament elections that took place over four days last week. But instead, voters emphatically punished socialist and social-democrat parties — when they could be bothered to show up to the polls.While there were many messages from the election that took place between June 4 and 7 — including the record low turnout and the rise of the fringe vote — the main one appeared to be a ringing rejection of the centre-left. Across the E.U.'s 27 member states, the story was the same regardless of who the incumbent national government was: voters were shifting rightwards, leaving many social-democrat parties hurting from historic defeats. The result is almost perverse. At a time when the left's longstanding complaints about the free market and the lack of workers' protection are being widely acknowledged and agreed with, voters are turning their backs on those parties that now seem to have been so prophetic. "There is an existential crisis for the socialists. Voters do not want socialism, they want a market system that works," says Corien Wortmann-Kool, who was re-elected for the Dutch center-right CDA party. "But the socialists are still rooted in the 20th century. They have not yet broken away from their ideological tradition of opposing capitalism."The most spectacular result was in the U.K., where beleaguered Prime Minister Gordon Brown's Labour Party scraped a mere 15.7% of the national vote. It limped into third place behind the Conservative Party, with 28.5%, and the U.K. Independence Party (UKIP) — campaigning to pull Britain out of the E.U. — which mustered 17.4% of the vote.

Goal of Unified Europe Falters Amid Downturn The drive toward European unity required big doses of both political and financial capital, with Western European banks showering cash on Eastern European entrepreneurs like Mr. Seres, who used the money to build hundreds of thousands of square feet of office space for a booming Budapest, Hungary’s capital. Mr. Seres is just one of Mr. Stepic’s 15 million customers at the huge bank Raiffeisen International, served by some 3,200 branches across Eastern Europe. This eastward Manifest Destiny seemed for years an inexorable and predictable process, with membership in the European Union followed by entry into the euro currency zone. But as money from the West fueled a debt-laden binge in the East, that grand vision may have blinded investors to the risks of cross-border, cross-currency lending.

Young Japanese Raise Their Voices Over Economy A group of young people recently gathered in a darkened park here. Holding placards and megaphones, they chanted slogans condemning the Japanese government and a lack of jobs and opportunity. The scene, which is repeated often in the gritty Tokyo neighborhood of Koenji, is nothing close to the protests that have recently shaken Iran. Indeed, the protests would hardly raise an eyebrow in most parts of the world, but in this country, which values conformity, they represent a stark departure from the norm. Since the 1960s, when youth protests turned violent, even the mildest form of protests by young people has been viewed as taboo. But the pain of recession is changing that, giving rise to a new activism among Japan’s youth, who have long been considered apathetic. Unlike the ’60s generation, which agitated to change the bourgeois basis of Japanese society, Mr. Sato and other young people are today fighting to join it. They are demanding greater professional opportunities, more job security and a stronger social safety net. After so many decades without a grass-roots movement, protests are so rare here that many who wish to take part require basic training. The Tokyo-based Pacific Asia Research Center, an institute that typically runs seminars on social issues like poverty, organized the recent march. After a surge of interest from young people who said they wanted to get more involved in social issues but did not know how, the center started offering what it says is Japan’s first activist training program. The sessions include poster-making and campaigning on the Web. “Once we’re done, we’ll overrun Japan with demonstrations,” Seiko Uchida, the head of a research center, told a cheering crowd. That may be hyperbole, but the deteriorating economy has inarguably affected young people more than any other demographic. Unemployment was 9.6 percent in April for Japanese aged 15 to 24, compared with 5 percent unemployment over all.

Failure Offers Lessons Japan Would Rather Forget In the two decades since Japan devolved from a supposedly indomitable economic juggernaut in the 1980s into a stagnant economy mired in a Lost Decade, the country tried myriad reforms in the name of reinvigorating its economy. It took stabs at rooting out bad loans from the banking system and ending the inside dealing that had long defined Japanese business culture. It sought to pare down government-financed public works projects, a major source of jobs. Yet all the while, Japan remained an economic laggard, a shadow of the nation that had previously occasioned overheated talk of Japanese global dominance. Despite the pain of reform, Japan never seemed to get the gain. Many economists argue that Japan never shook off the hangover of speculative excesses on real estate that fueled the 1980s because it never genuinely reformed. Money-losing “zombie” companies were allowed to keep drawing fresh credit and survive. Insolvent banks were spared from collapse because they were deemed “too big to fail.” Regardless, among ordinary people, the sense took hold that the reforms were both harsh and ineffective. Despite its capitalist trappings, Japan has sometimes been referred to as the world’s most successful socialist economy, a land in which life-long job security seemed a birthright. Amid the attempts to rein in government spending and pressure banks to cut off money-losing clients, Japanese workers learned the humiliation of unemployment; Japanese companies confronted the embarrassment of going out of business. More than an economic event, this tore at the fabric of Japanese life. Japanese voters did not appear to be approving a coherent economic policy so much as rejecting a seemingly bankrupt one. The new ruling Democratic Party of Japan gained votes with vague promises of subsidies and job protections. Ultimately, the vote seemed to signal Japan’s verdict that the embrace of failure had, in the end, proven a failure, opting instead for the comfort of trying to muddle through.

A Retreating West Watches Asia Rise This hubris also explains how Western minds failed to foresee that instead of the triumph of the West, the 1990s would see the end of Western domination of world history (but not the end of the West) and the return of Asia. There is no doubt that the West has contributed to the return of Asia. Several Asian societies have succeeded because they finally understood, absorbed and implemented the seven pillars of Western wisdom, namely free-market economics, science and technology, meritocracy, pragmatism, culture of peace, rule of law and education. Notice what is missing from the list: Western political liberalism, despite Mr. Fukuyama’s claim that “The triumph of the West, of the Western idea, is evident first of all in the total exhaustion of viable systematic alternatives to Western liberalism.” The general assumption in Western minds after reading Mr. Fukuyama’s essay was that the world would in one way or another become more Westernized. Instead, the exact opposite has happened. Modernization has spread across the world, but it has been accompanied by de-Westernization. Consequently, in the 21st century, history will unfold in the exact opposite direction of what Western intellectuals anticipated in 1991. We will now see that the “return of history” equals “the retreat of the West.” One prediction I can make confidently is that the Western footprint on the world, which was hugely oversized in the 19th and 20th centuries, will retreat significantly. This will not mean a retreat of all Western ideas. Many key ideas like free-market economics and rule of law will be embraced ever more widely. However, few Asians will believe that Western societies are best at implementing these Western ideas. Indeed, the assumption of Western competence in governance and management will be replaced by awareness that the West has become quite inept at managing its economies. A new gap will develop. Respect for Western ideas will remain, but respect for Western practices will diminish, unless Western performance in governance improves again.

How India Must Counter China's Threat Surrounded with sullied strategic environment and the spreading fire that engulfs the region, New Delhi can either continue to live in fear as it has in the past, or fight back. There are two distinct threats that endanger the existence of the Union.First are China's imperial ambitions that threaten to ultimately dismember India into 20 to 30 parts. To succeed in its aim, Beijing over a period of time unleashed the first phase of the strategy and intelligently encircled India. This initial phase resulted in shrinking New Delhi's strategic frontiers in its vicinity. The Indians unwittingly made the Chinese task a cakewalk as they were preoccupied with internal bickering for short-term personal gains, overlooking the vicious expansionist agenda designed jointly by Beijing and Islamabad to tear apart the country.

Africa and Latin America

Rebuilding Liberia Feeling protected — surrounding an enterprise with the law and security to allow it to prosper — is essential to business and development, no matter where you are. But it has been Africa's pre-eminent blight in the half-century since colonialism that many of its rulers offered nothing of the sort. The businesses that thrived amid the war, autocracy and corruption of postindependence Africa were of a depressing sort: emergency aid, arms-dealing, disaster journalism and security-ringed extractive industries for whom development was too often someone else's problem. There were exceptions, countries like Botswana and Mauritius and businessmen like Bsaibes, whose 19th century Lebanese forebears were tricked into disembarking in Liberia after buying passage to America, but who thrived anyway. But the exceptions only highlighted how far the rest of Africa was falling short. That's changing. Africa still has too many catastrophes, places like Darfur, the Democratic Republic of Congo and Somalia. But in other parts of the continent — Ghana, Rwanda, Tanzania and much of southern Africa — a new generation of African leaders has embraced democracy and the rule of law, and is making clear a preference for business and self-reliance over aid. Despite the global downturn, the International Monetary Fund predicts sub-Saharan Africa will grow by an average of 1.5% this year. Seven African countries will grow by 5% or more, with Liberia expecting 4.9% growth in 2009 and 7.5% next year. While the G-8 leaders discuss how to help, some parts of Africa are getting on with business. "Whereas Africa had military rule and dictatorships, today we have 18 or 19 functioning democracies," Johnson Sirleaf tells TIME. "Africa is growing equal to or better than all other regions. We have gone from 
 [a stance of] noninterference in our internal affairs to respect for the principle of the responsibility to protect, so that today Africa is intervening in African countries where governments have suppressed the rights of their people. Major changes are happening."

The Cult of the Caudillo To understand what is happening in Honduras today, it helps to know a bit more about Latin America’s long love affair with caudillos, how these larger-than-life but power-hungry men damaged their countries, and why so many people are terrified that they are making a comeback. Some argue that Latin America’s single most important—and colorful—contribution to political science is the caudillo. A Spanish word, caudillo is derived from the Latin capitellum or small head, and refers to a military or political leader. Caudillismo is so deeply rooted it has spawned its own literary genre. In Latin America, the strength of the caudillo weakened the region’s institutions. Political parties centered on caudillos often collapsed after the caudillo’s death and never professionalized. As a result, Latin Americans seem perennially ready to trust their fate to a providential “man on horseback” who comes to their nation’s rescue, rather than on the ability of the nation’s institutions to provide security and prosperity. While democracy has spread throughout Latin America, caudillos never vanish, they just adapt to changing times. Gone is the old-fashioned military coup, replaced with a new strategy for power that could be called “coup by stealth,” or “coup by democratic means.”  The primary architect of this new blueprint is Mr. Chávez, a strongman with one foot grounded in the past and the other firmly placed in the future of caudillismo.

Key Countries: Brazil

Zakaria: It's Booming in Brazil It is becoming increasingly clear that the story of the global economy is a tale of two worlds. In one, there is only gloom and doom, and in the other there is light and hope. In the traditional bastions of wealth and power—America, Europe and Japan—it is difficult to find much good news. But there is a new world out there—China, India, Indonesia, Brazil—in which economic growth continues to power ahead, in which governments are not buried under a mountain of debt and in which citizens remain remarkably optimistic about their future. This divergence, between the once rich and the once poor, might mark a turn in history.Over the past six months, much conventional wisdom about the economy has been discredited. Compare the two worlds. On the one side is the West (plus Japan), with banks that are overleveraged and thus dysfunctional, governments groaning under debt, and consumers who are rebuilding their broken balance sheets. America is having trouble selling its IOUs at attractive prices (the last three Treasury auctions have gone badly); its largest state, California, is veering toward total fiscal collapse; and its budget deficit is going to surpass 13 percent of GDP—a level last seen during World War II. With all these burdens, even if there is a recovery, the United States might not return to fast-paced growth for a while. And it's probably more dynamic than Europe or Japan. Meanwhile, emerging-market banks are largely healthy and profitable. (Every Indian bank, government-owned and private, posted profits in the last quarter of 2008!) The governments are in good fiscal shape. China's strengths are well known—$2 trillion in reserves, a budget deficit that is less than 3 percent of GDP—but consider Brazil, which is now posting a current account surplus. Or Indonesia, which has reduced its debt from 100 percent of GDP nine years ago to 30 percent today. And unlike in the West—where governments have run out of ammunition and are now praying that their medicine will work—these countries still have options. Only a year ago, their chief concern was an overheated economy and inflation. Brazil has cut its interest rate substantially, but only to 10.25 percent, which means it can drop it further if things deteriorate even more.

Still a lot to learn GOD may be Brazilian, as citizens of South America’s largest country like to say, but he surely played no part in designing its education system. Brazil has much going for it these days—stable politics, an open and fairly harmonious society, an economy that has remembered how to grow after decades of stagnation—but when it comes to the quality of schools, it falls far short even of many other developing countries despite heavy public spending on education. In the OECD’s worldwide tests of pupils’ abilities in reading, maths and science, Brazil is near the bottom of the class (see chart). Until the 1970s South Korea was about as prosperous as Brazil but, helped by its superior school system, it has leapt ahead and now has around four times the national income per head. World domination, even the friendly and non-confrontational sort Brazil seeks, will not come to a place where 45% of the heads of poor families have less than a year’s schooling. Brazil began its education late. When the country was a Portuguese colony even the elite had little access to education at home. The first printing press did not arrive until the 19th century, hundreds of years after books were first printed in the region’s Spanish-speaking countries. Before then presses were illegal. In 1930 just one in five children went to school. When Brazil did decide to build a nationwide education system, the wants of the elite came first. As in India, Brazil still spends a lot on its universities rather than on teaching children to read and write. President Luiz Inácio Lula da Silva came to power criticising his predecessor’s achievements and promising rapid improvements. In fact, his successes have largely come from continuing and expanding the initiatives he inherited.

Key Countries: Russia

A new sick man This transformation of Soviet state plants into private firms run by young MBA graduates is perhaps the biggest achievement of the Russian economy over the past two decades. It is far from complete. But it has probably gone far enough to pull businesses like Mr Gartung’s through the crisis. The immediate problem for Russian businesses, small and big, is lack of credit. Despite massive injections of liquidity into the banking system, loans are hard to come by. The severity of the credit crunch is the price Russia is paying for failing to develop its own financial markets and to tame inflation. The two are connected: ordinary Russians feel life is too short and uncertain to put money into pension funds or insurance companies, and prefer to spend it as quickly as possible. Although a big chunk of oil revenues was channelled into a stabilisation fund, large state firms and many private ones borrowed heavily from foreign creditors, amassing nearly $500 billion of external debt. Most of the foreign money that flowed to Russia took the form of loans rather than direct investment, which would have required a more hospitable investment climate. To make things worse, the government increased its public spending by nearly 40%. Inevitably the economy, which is constrained by crumbling infrastructure, a dwindling workforce and pervasive corruption, could not absorb this amount of money. Inflation soared to nearly 15%. As many Russian developers know, few projects can go ahead without kickbacks to local authorities or utilities. In many cities the mayor is also the main developer. It is common, too, for police to extract bribes from retailers. This is a view supported by a recent study by McKinsey, a consultancy. It looked into five sectors of the Russian economy and found that, although productivity has improved over the past decade, it is still only 26% of American levels. Bureaucracy and corruption are stifling it. It takes six times as long to obtain construction permits in Russia as in Sweden and, despite cheaper labour and land, the cost of building a distribution centre is a third more expensive than in London, according to McKinsey. When profit margins were 25%, construction firms could afford to pay off bureaucrats. Now they cannot. Much of Russia’s growth over the past decade was achieved by using existing capacity more efficiently. But this slack has now been taken up. The present anti-crisis measures are often geared more towards subsidising the inefficient.

  • Russia's ailing economy  NOT long ago, Russia proudly counted itself as one of the BRICs—with Brazil, India and China, the four emerging-market giants that were outgrowing the rich world. Yet it now makes more sense to talk of the BICs. With GDP shrinking by almost 10% in the year to the first quarter, Russia is in deep recession.
  • False Choices For Russia Russian society views its national interests differently than does Russia's leadership. Polling has found that Russians are interested in making their country more open to the world and that they want to limit governmental abuse and corruption and create an independent judiciary. So we think that Americans ought to be clear, when referring to "Russian national interests," whether they mean those of the country at large or the current political regime.
  • Russia Ranked Among Least Trade-Friendly A new report ranked Russia among the world's most closed trading economies, as U.S. President Barack Obama used a speech in Moscow to call for free trade. A study by the World Economic Forum, a think tank that holds a high-profile annual meeting in Davos, Switzerland, placed Russia 114th out of 121 nations in terms of ease to trade with, behind such economies as Ethiopia, Mauritania and Pakistan.

Point of View: Decoding Russia: A Six-Step Plan The United States and Russia (or its Soviet predecessor) have circled each other warily for decades. And often enough at these meetings, the Americans have been frustrated, mumbling “I don’t get these people” all the way home. The issues that Mr. Obama is tackling with the Kremlin’s tandem — Prime Minister Vladimir V. Putin and President Dmitri A. Medvedev — range from arms control to Iran’s nuclear ambitions to Russian assistance for NATO troops in Afghanistan. Mr. Obama’s success will depend in part on his grasp of the mentality of today’s Russia. Here are how things look on this side:

U.S.-Russian Summit Ends With Mixed Results President Barack Obama concluded a two-day summit with conciliatory words for Russian Prime Minister Vladimir Putin and an address that praised Russia's contribution to culture and the arts while challenging the Kremlin to change its behavior and policies. Following some tough talk before his trip, Mr. Obama's visit to Moscow is likely to fuel criticism from some in the U.S. who see the "reset" he has proposed for relations with Russia as a series of concessions by Washington. Whether Mr. Obama will profit from his efforts to make Russia a stronger ally depends in part on the magnanimity of Moscow, which has been skeptical of his administration. With a tight lock over all the major television channels, the Kremlin has in recent years relied on a steady anti-American message to stoke national pride and shore up its control in the country. Cordial talks with Russian President Dmitry Medvedev on Monday were followed on Tuesday by what appears to have been a much tougher working breakfast with Mr. Putin, in which both sides stood their ground. Though Mr. Putin is widely considered the dominant partner in Russia's ruling tandem, Mr. Obama has recently highlighted his common views with Mr. Medvedev, a longtime Putin aide who has cast himself as a progressive, modernizing president. Last week, Mr. Obama criticized Mr. Putin, saying he has "one foot in the old ways of doing business." But after Tuesday's meeting with the former KGB agent, Mr. Obama emerged "convinced the prime minister is a man of today and he's got his eyes firmly on the future," said a senior U.S. administration official who attended the three-course breakfast at Mr. Putin's residence. Russian officials said Mr. Putin did most of the talking. In an interview with Fox News, Mr. Obama said he found the Russian prime minister to be "tough, smart, shrewd, very unsentimental, very pragmatic. And on areas where we disagree, like Georgia, I don't anticipate a meeting of the minds anytime soon." The White House's top Russian expert, Michael McFaul, urged that the summit's successes be judged by how relations have improved from the depths they reached in the latter years of the Bush administration. But mistrust still runs deep on both sides. The main results of the summit -- agreements to wrap up a new arms-control treaty and permission from Moscow for the U.S. to fly war materiel through Russian airspace to Afghanistan -- were relatively modest, analysts said.

Medvedev urges modernization of Russian economy President Dmitry Medvedev laid out his plan Thursday to move Russia's economy into the modern age and overcome the grim industrial legacy of the Soviet Union. In his annual state-of-the-nation address, he took a few digs at Vladimir Putin, his predecessor and mentor, but made clear that the tightly controlled political system Putin created is here to stay. Medvedev warned the opposition that any attempts to upset the current order will not be tolerated. He ordered a sweeping modernization of the Soviet-built military arsenals. But he also called for a "pragmatic" foreign policy aimed at attracting investment and improving living standards, rather than "chaotic actions driven by nostalgia and prejudice." As in the past, Medvedev avoided direct criticism of Putin, still seen as the more powerful figure. But he criticized parts of Putin's legacy, including an inflated state role in the economy. Medvedev said Russia can no longer afford to rely on an aging Soviet industrial base and to draw most of its revenues from exports of oil and gas, while trusting its security to Soviet-built nuclear arsenals. The oil- and gas-driven economy was hit hard as commodities prices plunged late last year. Russia emerged from recession in September — months after its European neighbors — with its gross domestic product still 9.4 percent below year-earlier levels. While Putin methodically increased the state role in the economy during his eight-year presidency, Medvedev said Thursday that Russia needs to reduce the role of the state, which now controls up to 40 percent of the economy. He singled out a key part of Putin's legacy — giant state corporations that have been granted broad privileges and been widely criticized as inefficient. "I believe this form has no future in the long term," Medvedev said.He repeated his support for democracy and called for an "honest competition" of ideas. But he also suggested he shared Putin's intolerance for dissent.  Medvedev said Russia's political system had stabilized with the four parties voted into the Kremlin-controlled parliament having "withstood the test of time."

Key Countries: India

Does the elephant dance? THE news in May that the Congress party had won India’s elections by a big margin electrified the political establishment and sent shares soaring. Manmohan Singh, back as prime minister, still needs coalition partners, but no longer relies on Communists for his majority, and needs not pay so much heed to small, venal regional parties. At home, he pledges to forge ahead with liberal reforms. Abroad, too, says Shyam Saran, a special envoy for Mr Singh on climate change, his government “will enjoy greater room for manoeuvre than in its earlier incarnation”. If this freedom produces a robust, coherent foreign policy, it will be a post-cold-war first. “Does the elephant dance?” is the title of a forthcoming book on India’s foreign policy, by a former Canadian envoy, David Malone. Until now the country has been a wallflower and it is about time it put on its pumps. India enjoys huge global respect as a successful democracy. In marked contrast to China’s, its rise raises few hackles in the West. And its formidable intellectuals, entrepreneurs, Bollywood stars and diaspora give tremendous “soft” power. But in comparison with its stature, its influence remains pitiful, despite its recognition by America as a member of the nuclear club—the main (perhaps only) foreign-policy achievement of Mr Singh’s first term.

Indian governments’ main preoccupations are domestic—unsurprisingly, given a riotous Bartholomew Fair of a political system, and huge economic problems. India’s immediate region has also frustrated its great-power ambitions, with Pakistan chiefly to blame. Much of Pakistan’s elite continues to view India as a threat to their country’s existence. This is misguided, and in the case of the army, self-serving. Pakistan’s own jihadists remain a bigger danger. But Pakistan’s morbid obsessions tie India down, too. In Mr Singh’s second term, say his advisers, India will attempt to vault beyond concerns in its near-abroad. And, having appointed, in S.M. Krishna, a foreign minister expected to be grateful and ineffectual, he will be unfettered either by carping Communists or ambitious colleagues. He will be able to toe his own foreign-policy line. Top of his agenda will be trade, climate change and responding to China’s rise.

Don’t hold your breath on the first two. Mr Singh has liberal views on trade, and his cabinet shuffle notably got rid of the commerce minister, who was widely blamed for scuppering trade talks under the Doha round in Geneva last July. An early signing of a free-trade agreement between India and the ten-country Association of South-East Asian Nations (ASEAN) is expected. Yet such agreements offer more political than economic advantage. And the old domestic constraints remain.

Zakaria: India's Coming-Out Party We might look back a few years from now and date India's coming-out party to May 18, 2009, the day its most recent election results were announced. But the global significance of the election—and the reason it might usher in a new age for India on the world stage—was not the fact of it, but the results. Over the past two decades, India has been consumed by its internal divisions: of caste, ethnicity and religion. This has made it difficult for the government in New Delhi to mobilize national power to any purposeful end in global affairs. A decentralized and divided polity has punched well below its weight internationally. That's bad for India and bad for the world. This could all change now. For the first time in three decades, a single party—the Indian National Congress— was given a clear and broad mandate.

India's hamstrung visionary WHILE sipping syrupy tea and watching television in a Mumbai slum, Banyan was once cheered to see the kindly face of Manmohan Singh, the prime minister, appear on screen. What a gift to India he is: honest, accomplished, wise—a leader-sage. But not to everyone. “World Bank gangster!” one tea-drinker hissed. Admittedly, the venue was a haunt of India’s biggest communist party, whose devotees are especially resentful of Mr Singh’s two big achievements: the programme of economic reforms he unleashed as finance minister in 1991; and the nuclear co-operation deal he struck with America and pushed through India’s rowdy parliament last year. The first unshackled India’s mixed economy, releasing the entrepreneurial vigour of millions. The second made its unlicensed nuclear programme more legitimate, removing the main objection to India’s presence among great powers. For these boons, obtained in the teeth of jealous bureaucrats and political rivals, Mr Singh may be remembered as one of India’s most transformational leaders. So it is remarkable how widely the left’s antipathy towards him is shared. In parliament he is a misfit—a long-serving prime minister who lost the only election he has ever fought (it was for a Delhi parliamentary seat). Sonia Gandhi, the Italian-born leader of the ruling Congress party, has twice picked him to rule in her stead. Yet within the party Mr Singh inspires conflicting feelings. They are jealous of the favour Mrs Gandhi shows him; his political instincts are deemed poor; his economic views are to the right of many Congressmen. Even the great praise Mr Singh wins abroad—recently from President Barack Obama—sits awkwardly with some Indians. Proud as they are to have a well-regarded leader, many would prefer Mr Singh to annoy his Western admirers by sticking it to them more forcefully. These shortcomings help explain how dramatically Mr Singh ran aground after launching himself on a third great transformation: peace with Pakistan.

Key Countries: China

A stab at reform A PEDICURIST in a mountain town in central China has become a heroine to many of the country’s internet-users and a bane to many bureaucrats. The woman, Deng Yujiao, has been accused of killing an official who allegedly attempted to molest her. Her story has unleashed an outpouring of public contempt for the sleaze that surrounds so many civil servants. The police say Ms Deng, who is 21, stabbed the official on May 10th in the health centre of a hotel where she worked in the town of Yesanguan in the province of Hubei. Also present were two of his colleagues, one of whom was injured. The official who died had allegedly asked Ms Deng to perform “special services”, ie, sex, and was angered by her refusal. At first the police accused Ms Deng of murder, but later revised the charge to one of using excessive force to defend herself. She has returned home, under police surveillance, while prosecutors decide what to do. The toning down of the charges is a big concession. In China police rarely change their minds and defendants are scarcely ever found innocent. Some internet commentators have hailed it as a victory for public opinion. Ms Deng’s case has been widely likened to that of Yang Jia, a man who won extraordinary public sympathy after he killed six policemen in Shanghai in July last year. Both Mr Yang and Ms Deng are seen as having been driven over the edge by brutish, arrogant officialdom. Mr Yang was executed last November. The unrest in China 20 years ago was also fuelled by anger over corruption and other official misconduct. But the party has less to fear now. Discontent is mainly directed at the actions of local bureaucrats rather than national leaders. The Deng Yujiao case has not led to calls for an end to one-party rule, only for more enlightened government. To the extent that officials do sometimes cave in to online sentiment, change is already happening. The danger now, as an article on a Chinese legal website argued, is of trials by the media.

China at war with itself(1989) THE soldiers are divided, the Communist party tortured by its leaders' fratricidal struggle for power, the centre of Beijing scarred with the burn and bullet marks of military repression. This week China looked into the abyss of coup, counter-coup and civil war. Nobody could tell what it saw there. Beijing was rife with rumours. One said that Mr Deng Xiaoping, the 84-year-old paramount leader, was dying of prostate cancer, or had already died. Another that his conservative acolyte, the prime minister Mr Li Peng, had survived an assassination attempt. A third that rival troops were moving towards the capital for a violent showdown with the bloodstained 27th army. A fourth that President Yang Shangkun, at the age of 81, was making a last bid to succeed the decrepit Mr Deng. All or none may be true, but all raised tensions in the capital. Even without them, the reality of what happened on the night of June 3rd-4th was a ghastly cause for fear. For the first time in Communist China's 40 years, the People's Liberation Army turned on the people themselves—not with tear-gas and batons, but with tanks, armoured personnel carriers and volley after volley of automatic rifle fire.

Beijing Always Wins THE riots in the Xinjiang region, the home of China’s Muslim Uighur minority, will affirm to many analysts outside the country that social unrest is a direct threat to the continued rule of the Communist Party. If officials don’t take a long, hard look at how to avoid such uprisings, this argument will run, the government could eventually fall. If only Chinese officials saw things that way. But even after at least 156 people have been reported dead in the city of Urumqi, many officials here see the recent violence — with Uighur rioters torching businesses owned by Han Chinese, China’s ethnic majority — as simple ingratitude. A front-page editorial in the state-run People’s Daily described the protests as criminal actions by rioters, not as the manifestation of complaints of citizens angered by discriminatory policies. That view is already popular here in the capital. Few are surprised by the violence meted out by the state, and more than a few applaud it. A merchant in east Beijing expressed allegiance with his fellow Han entrepreneurs and, referring to the large outlays of aid to Xinjiang, asked of the Uighurs, “Where is their thanks for all the money we provide them?” Both nationalistic fervor and the fear that instability might reverse the hard-won individual gains of economic reform combine to create more support for the government’s hard-line approach. Less discussed are the Uighurs’ real grievances: Beijing’s tight control over the practice of Islam; Han Chinese who migrate to Xinjiang and take the better jobs there; and the fact that ethnic minorities lack regular access to the government bureaucracy, where business in China is largely done.

China’s Ethnic Fault Lines The myth of a monolithic China was shattered this past week. Running barely beneath the surface of what the government has sought to portray as a “harmonious” society, the fracture created by the Urumqi and Lhasa riots threatens to shake the country. Foreigners and the Chinese themselves typically picture China’s population as a vast Han majority with a sprinkling of exotic minorities living along the country’s borders. This understates China’s tremendous cultural, geographic, and linguistic diversity—in particular the important cultural differences within the Han population. Across the country, China is experiencing a resurgence of local ethnicity and culture, most notably among southerners such as the Cantonese and Hakka, who are now classified as Han. Cultural and linguistic cleavages could worsen in a China weakened by internal strife, an economic downturn, uneven growth, or a struggle over future political succession. The initial brawl between workers in a Guangdong toy factory, which left at least two Uighur dead on June 25, prompted the mass unrest in Xinjiang on July 5 that ended with 156 dead, thousands injured and 1,500 arrested, with ongoing violence spreading throughout the region. China is also concerned about the “Kosovo effect,” accusing its Muslim and other ethnic minorities of seeking outside international (read Western) support for separatist goals. But ethnic problems in President Hu Jintao’s China go far deeper than the “official” minorities. Sichuanese, Cantonese, Shanghainese, and Hunanese are avidly advocating increased cultural nationalism and resistance to Beijing central control. Ethnic strife did not dismantle the former Soviet Union, but it did come apart along boundaries defined in large part by ethnic and national difference. The unprecedented early departure of President Hu from the G-8 meetings in Italy to attend to the ethnic problems in Xinjiang is an indication of the seriousness with which China regards this issue. The National Day celebrations scheduled for October 2009 seek to highlight 60 years of the “harmonious” leadership of the Communist Party in China, and like the 2008 Olympics, its enormous success. The rioting threatens to derail these celebrations.

How Confucianism could curb global warming Kingston, Ontario – Now here's a curveball to secular Western policy experts: China's intellectuals are openly debating the role of Confucianism, Buddhism, and Taoism in promoting the Communist Party's vision of a harmonious society and ecologically sustainable economic development. Nowhere is the question of what to do about the environment more vital than in China, the world's largest emitter of greenhouse gases – especially because scientists agree that climate change disproportionately affects the poor and the disenfranchised and that climate change will affect future generations far more than the present. Yet the general impression of China's role in issues relating to environment is one of foot-dragging because it hasn't bought into a Western model to address it. But Pan Yue, China's vice minister for environmental protection, is calling for China to capitalize on traditional Chinese religions in promoting ecological sustainability. He says, "One of the core principles of traditional Chinese culture is that of harmony between humans and nature. Different philosophies all emphasize the political wisdom of a balanced environment. Whether it is the Confucian idea of humans and nature becoming one, the Taoist view of the Tao reflecting nature, or the Buddhist belief that all living things are equal, Chinese philosophy has helped our culture to survive for thousands of years. It can be a powerful weapon in preventing an environmental crisis and building a harmonious society."

Everything You Know About China Is Wrong The conventional wisdom is that China is steaming through the global financial crisis by building on the momentum generated by its 30-year boom. Indeed, ever since it sailed through the last big global crisis—the Asian contagion 10 years ago—Beijing has been feted for uniquely steady helmsmanship in financial storms. So perhaps it's natural for forecasters to assume that the Chinese supertanker of state is not turning sharply now, particularly since it continues to grow rapidly even as other economies sink in the recession. Yet this crisis is different—bigger and more damaging than any seen in generations—and it is exposing limits and forcing change in just about every key piece of the China model: the supremacy of the one-party state, the smart economic management, the export-driven growth, the emerging consumer class, the burgeoning private sector, the headlong focus on growth at any environmental cost, and the drive to build world-class companies. What follows is a look at why these common assumptions about China are increasingly inaccurate or just plain wrong.

December 20, 2009

Pragmatic Idealism: Peace, Stabililty, Progress & Prosperity

In the course of our taking up various topics it's time to cycle back around to Foreign Policy. At the same time it's also drawing toward the close of the year and some sort of wrap up and status check is appropriate. We started the year in the middle of the worst worldwide economic crisis we've seen since the Great Depression and WW2, and have avoided the first. It's not as likely that if we hadn't we'd have seen another world war but there were legitimate worries about major sociopolitical collapses that would have been too close for comfort. Organizing and leading concerted world action to deal with these crisis were the principal foreign policy challenge that started the year and the successful navigation, despite almost nobody really acknowledging the US's role as leader, wasn't a bad way to begin the year. Especially when it was done so that it lays the foundation for new institutional frameworks for future collaboration and development.

Did we say that nobody noticed? Well, that's not quite true. As it happens the last several years have seen the emergence of new tools to measure the value of a country's "global brand", which is not as wacky as you might think. By using very large surveys, among other data sources, you get a certain quantitative and analytical rigor (though that can be distorting). But there's a real value - "brand" measures influence, ability to attract investment and trade and otherwise influence the course of events. Interestingly country rankings tend to be relatively stable from year-to-year, very stable. This year the US brand value not only shot way up from $9.7 to $11.9T ($2T jump of 23%) but the US had the biggest jump in relative rankings ever seen in the studies.


Sources and Means: the Oslo Speech as Pragmatic Idealism

Of course #7 didn't mean we were without influence it just meant we were fighting a few classes below our weight thru our own fault. Now we're not going to lay all that on a few speeches by the new President but if you've been paying attention there's been a lot of substance, as we discussed in a previous post (It's Your Life: Change Is Hard, Change We Must, Changing We Are!), that's faded off the front pages and most radar screens. If they hadn't worked is when you really need to worry because right now we're in a world where continuing crisis means some other disruptions is just around the corner. The Oslo Nobel speech was both an exemplar of the reasons for those improvements in tone and substance, a rigorous presentation of the framework behind it and one of the finest and most well-argued foreign policy speeches we've ever heard. We managed to catch it live on C-Span but it's not up there just yet so you can find it on YouTube (Part 1, Part 2, Part 3, & Part4).Clicking on the clip takes you to Part 2.

The Rule of Law

The reasons we like it so much are that it was indeed rigorous, realistic, idealistic, confronted the realities of a harsh world, talked about how to make it a better one, why it was in all our best interests to cooperate and collaborate in making it so and, honestly and forthrightly, presented and defended the seminal contributions of the US in crafting and mentoring the post-WW2 world. But central to all of that was the recognition that force underpins any government and that the judicious use of force is sometimes necessary to establish and maintain order. All in all it was a very Bismarckian speech (you may have noticed over time that we're very fond of the Furst, the real Bismarck, not the caricature). The major reason we liked the speech was that it was a superb expression of a pragmatic idealism entirely in line with our own arguments for a constructive and engaged U.S. Foreign Policy; the arguments for which we've collected in this white paper (Brave New World: Constructive Engagement and US Foreign Policy).

Peace, Stability and Progress

That, as you'll find if you read the white paper, is not a casual statement but one we've investigated, developed a framework for analyzing and tested against multiple real world cases, including Afganistan, the Middle East as a whole, Iraq and others. The entire framework is set out in this white paper, along with some historical examples from China, Russia and Iraq. (Good Government for a Stable World). The gist of which is represented in this graphic of the favorable (virtuous) feedback loop between stability, peace, the rule of law and a prosperous society.

As contrasted between the extremely unfavorable feedback (vicious) loop  between a lack of peace, instability and the devolution and eventual dissolution of a large-scale social order. Too many people look for simple solutions to the complex problems of peace and stability. One approach, the realist, simply says that we look out for our own interests. That was the historical norm that kept so much of humanity in the red for so long and lead to two World Wars, and almost a third when the European nations were pursuing it again in the late 40s. 

It is in fact the US that has sacrificed so much blood and treasure providing the underpinnings of judicious force that have moved so much of the world, painfully and slowly to be sure but in the blink of an eye when measured against history.

Progress in Human History

 Even in recent history the progress that has occurred is not solely the result of US actions of course. That's the other lesson, it's a non-zero sum game. In other words we are all better off when we are each better off, whether we're talking about individuals, communities or states.

Nonetheless, each and every time in history, if you look back, that there has been progress that benefits large numbers of people it has been because of the actions of good government providing the rule of law, security, fair and reasonably honest justice, public investment in essential services and infrastructure and overall defense.

When, for whatever reasons, that breaks down then we end up in the red (so-to-speak). Which is also to say that the world hasn't undergone enormous changes in the last few decades, over even in the last 200 years. At the start of the 19thC China and India were the largest economies, having been not just the largest but the most dominant for centuries before that. In fact it was only between 1820 and 1870 that the West over took the East! Thru the provision of relatively good government. During the 19thC Europe and then other developed nations conceived and implemented new socionomic institutional frameworks that enabled historically unique growth and prosperity. Again, though, on the foundation of effective institutions. Now we're in a world that's learned to adopt and is adapting those institutions to their own needs.

Progress, Governance and Prosperity

More people have made more substantive progress in the last twenty years than at any previous time in human history. Having conducted giant field experiments during the 20thC in whether capitalism or totalitarianism were the best solutions we settled that. Though not without a lot of challenges and issues with Capitalism that have been re-born in the current crisis. And, most especially, not without paying the most horrendous lab fees in human history.

But that progress has been real, it's been widespread and it's been substantive. It has also proceeded in phases and stages percolating from the leading countries to the immediate followers and then, slowly, around the world.

 World Futures: 21stC Challenges & Opportunities

But a lot of countries have a long way to go, including ones like the BRICs, who still have large majorities of their populations in dire circumstances. And who also have almost all their populations with a long way to go until their entire populations enjoy a standard of living similar to that in the most developed countries. But, as these charts should make crystal clear, that path has been established and is being followed. Hopefully it will continue percolating until all populations everywhere are on it.

And that's why Oslo was and is so important. It laid out the intellectual and policy framework required to establish and sustain good governance that is the sine qua non of world progress. If  you are a self-interested realist pragmatism should cause you to endorse the principles laid down. If you are an idealist then a concern for actually accomplishing your goals leads, ultimately, to the same conclusion.

Continuing to improve worldwide governance and increase general prosperity is THE central challenge of the 21rst Century.

Let's hope we keep on keeping on!

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The World in Review and Outlook

A New Balance of Global Power Cast around for the figures who shaped the geopolitics of the opening decade of the 21st century and Osama bin Laden and George W. Bush spring to mind. Al Qaeda’s terrorist spectacular on September 11 2001 seemed to describe a new epochal challenge to a west grown complacent after the defeat of communism. The US president’s response defined first the reach, and then the limits, of American power. Some might add Vladimir Putin to such a list. I am not so sure. Mr Putin has salved Russia’s wounded pride. He now plans to win back the presidency. Yet neither high oil prices nor bare-chested machismo have reversed the underlying trajectory of Russian decline. Eight years after the destruction of New York’s twin towers, Afghanistan and Pakistan are still the cockpit of a conflict rooted in fractured states, violent extremism and a wider struggle against modernity. Mr Bin Laden has evaded capture; Barack Obama, Mr Bush’s successor, confronts in the war against the Taliban the most dangerous enemy of his presidency. The risk of unconventional weapons falling into the hands of jihadists – think about Pakistan’s nuclear stockpile – amplifies western anxieties. For all that, there have been bigger, more enduring, changes in the global landscape. Seen through the long lens of history, Mr Bin Laden and Mr Bush may turn out to be relatively minor players in an era of tumultuous upheaval. The big clashes of coming decades are more likely to be between states as ideologies. The prevailing tensions will be between co-operation and competition, rules and anarchy, order and disorder. The rise of Asia maps the most obvious of the geopolitical shifts. At the turn of the millennium, the talk was of a unipolar world in which US hegemony stretched into an indefinite future. The startling speed of China’s rise has confounded all expectations. In a blink of history’s eye, the march of power from west to east has become the central, unnerving fact of geopolitical life. It is not just China. India has made its presence felt, even if many of its political leaders cling to the mindset of a middle-ranking nation. After a century or more as a “coming” power, Brazil may finally be in sight of its destination. South Africa, Mexico, Indonesia and, in the unsettling context of its nuclear ambitions, Iran are among those clamouring for due recognition in the councils of world affairs.

Obama at the Helm With the World in Recession America's recession has spread worldwide, and there has been no decoupling--for any country--from the American economy. If the U.S. does not recover, the EU will not bounce back. Other economies cannot make up the decline in demand. Asia's leaders hope that America's $800 billion-plus stimulus package will create the 3.7 million jobs President Barack Obama is targeting, which in turn will generate a more confident mood. Asians are rooting for the new President and his team to succeed. Mr. Obama has chosen some of the most experienced and able minds to fill key economic positions in his Administration. Tim Geithner, Larry Summers, Paul Volcker and Christina Romer are four of the most highly respected experts in their fields. The next nine months will give us a fair assessment of how long and how deep this downturn is going to be. The President has also not been hesitant to appoint men and women to other Cabinet posts who are more capable and knowledgeable in their areas of expertise than he is: General James Jones as National Security Adviser, Robert Gates as Secretary of Defense and Hillary Clinton as Secretary of State. But when these powerful, strong-willed individuals clash on policy--as they inevitably will--the President will have to make decisions. Obviously he has confidence that he can master their detailed arguments and decide among differing solutions. For America to retain its role in global affairs, President Obama will have to exercise wise leadership--as thoughtful and effective as that shown in his quest for the presidency. America's friends hope he will succeed in remaking America.

A New World Architecture Twenty years after the fall of the Berlin Wall and the collapse of communism, the world is facing another stark choice between two fundamentally different forms of organization: international capitalism and state capitalism. The former, represented by the United States, has broken down, and the latter, represented by China, is on the rise. Following the path of least resistance will lead to the gradual disintegration of the international financial system. A new multilateral system based on sounder principles must be invented. Reorganizing the world order will need to extend beyond the financial system and involve the United Nations, especially membership of the Security Council. That process needs to be initiated by the US, but China and other developing countries ought to participate as equals. They are reluctant members of the Bretton Woods institutions, which are dominated by countries that are no longer dominant. The rising powers must be present at the creation of this new system in order to ensure that they will be active supporters. The system cannot survive in its present form, and the US has more to lose by not being in the forefront of reforming it. The US is still in a position to lead the world, but, without far-sighted leadership, its relative position is likely to continue to erode. It can no longer impose its will on others, as George W. Bush’s administration sought to do, but it could lead a cooperative effort to involve both the developed and the developing world, thereby reestablishing American leadership in an acceptable form. The alternative is frightening, because a declining superpower losing both political and economic dominance but still preserving military supremacy is a dangerous mix. We used to be reassured by the generalization that democratic countries seek peace.

Too big to fail? In four decades -- a blink of history's eye -- Americans have gone from the national certitude that there should be no U.S. combat troops stationed in what was once called the "arc of crisis" -- the view of the expert community (and my own) when I lived and worked in the Middle East and Persian Gulf in the 1970s -- to broadly accepting the notion that it is possible to devise an optimal U.S. military presence there. Obama's aides have even sold the narrative that through disciplined presidential quizzing of his own policymakers, we can arrive at the answer to whether 20,000, 40,000 or some other number of new troops will bring success in Afghanistan. In Oslo and earlier this month at West Point, Obama sketched the stakes of the U.S. war on fanaticism centered now in Afghanistan. He is challenging the world to assess the global consequences of permitting the United States to fail there without significant help. In the end, the international community should decide that the United States is too big -- and too important to global stability -- to fail.

Obama Added $2 Trillion to Brand America As 2009 winds down, the pundits are already beginning to tally what Barack Obama has achieved during his first year in office. Even his more well-intentioned detractors contend that, though he may have made a high-profile speech or two, the new U.S. president can boast of few concrete achievements in foreign policy. Obama himself accepted the Nobel Peace Prize as a "call to action," rather than a reward for his work, and gave himself only a "B+" grade during his recent interview with Oprah Winfrey. Yet in one sense, Obama achieved more in the first 11 months of his presidency than his predecessor managed to in eight years. My research clearly shows that he has begun to restore America's good name, an intangible asset with highly tangible (read: lucrative) consequences. As head of state, Obama has boosted the value of "Brand America" by just over $2 trillion, up from $9.7 trillion in 2008 to $11.8 trillion this year. That means U.S. goods, services, people, and even the country's landscape are about 20 percent more enticing to the global market than they were in 2008. I know this because I track the value of countries' brand images closely from year to year. Since 2005, my Anholt-GfK Roper Nation Brands Index (NBI) has regularly measured the international perceptions of 50 countries by polling between 20,000 and 40,000 people in 20 to 40 countries. Indeed, hardly any country's image has altered more than 1 or 2 percent since the NBI was launched. Perceptions about a given place remained more or less constant even as it was hit by political and economic upheaval, terrorist attacks, and natural disasters. Nor did the countless, ruinously expensive publicity campaigns optimistically designed to "brand" countries push up any ratings for the better. There have been just two exceptions to this remarkable inertia: Denmark in 2006 and the United States today. The second exception occurred this year and was even more dramatic. The United States, which had languished around seventh place in my index since 2005, shot up to first place, and not just in the perceptions of one or two countries. For a sample representing some 60 percent of the world's population and 77 percent of its economy, America is suddenly the most admired country on Earth.

Foreign Affairs and the US: Pressures for Adjustment

Budget Pact Deepens California's Pain Defense Secretary Robert Gates scored a key victory Tuesday against the F-22 Raptor fighter in Congress, part of his battle to reshape Pentagon priorities. In a 58 to 40 vote, the Senate approved an amendment to cancel $1.75 billion that had been set aside by lawmakers to purchase seven additional F-22s in the 2010 Defense Department budget. Mr. Gates is adamantly opposed to buying more of the highly sophisticated fighters, which he says have little relevance to today's conflicts in Iraq and Afghanistan. While the money sought for the jets represents a fraction of the Pentagon's total annual budget of approximately $664 billion, the fight over the F-22 has become emblematic of Mr. Gates's broader effort to rebalance the priorities of the U.S. military toward counterinsurgency and away from conventional warfare. Members of Congress have resisted that change by trying to take control of the purse strings and funding several costly weapons systems that Mr. Gates has sought to kill. This is the first case in recent years when Congress, the defense industry and the dissident voices in the military haven't been able to prevail in a contest with a Defense secretary over the fate of a weapons program, said Jeffrey Bialos, a partner at Sutherland Asbill & Brennan in Washington and a former deputy undersecretary of defense during the Clinton administration. "This may change the politics of defense acquisition programs," said Mr. Bialos. The jet still has plenty of support in Congress. One of its biggest champions is Sen. Saxby Chambliss (R., Ga.), who doesn't want the F-22 assembly line in Marietta, Ga., to shut down. Some prominent Democrats also voted to keep funding for the planes. Among the Democratic supporters for more F-22s were California Sens. Diane Feinstein and Barbara Boxer, as well as Hawaii Democrat Sen. Daniel Inouye, who chairs the Senate Appropriations Committee. Connecticut Democrat Chris Dodd vowed to keep fighting for more F-22s. "We may not have prevailed in this round, but we are not out—not by a long shot," he said in a statement. In the House, lawmakers are working to add hundreds of millions of dollars to the Pentagon budget as a sort of down payment on additional planes.

Hillary Clinton's Quiet Revolution Amid all the distractions, what is Clinton actually doing? Only overseeing what may be the most profound changes in U.S. foreign policy in two decades -- a transformation that may render the presidencies of Bill Clinton and George W. Bush mere side notes in a long transition to a meaningful post-Cold War worldview. The secretary has quietly begun rethinking the very nature of diplomacy and translating that vision into a revitalized State Department, one that approaches U.S. allies and rivals in ways that challenge long-held traditions. And despite the pessimists who invoked the "team of rivals" cliche to predict that President Obama and Clinton would not get along, Hillary has defined a role for herself in the Obamaverse: often bad cop to his good cop, spine stiffener when it comes to tough adversaries and nurturer of new strategies. Recognizing that the 3 a.m. phone calls are going to the White House, she is instead tackling the tough questions that, since the end of the Cold War, have kept America's leaders awake all night. Given the challenges involved, it was perhaps natural that the White House would have a bigger day-to-day hand in some of the nation's most urgent foreign policy issues. But with Obama, national security adviser Jim Jones, Vice President Joe Biden and Secretary of Defense Robert Gates absorbed by Iraq, Afghanistan and other inherited problems of the recent past, Clinton's State Department can take on a bigger role in tackling the problems of the future -- in particular, how America will lead the world in the century ahead. This approach is both necessary and canny: It recognizes that U.S. policy must change to fulfill Obama's vision and that many high-profile issues such as those of the Middle East have often swamped the careers and aspirations of secretaries of state past. Which nations will be our key partners? What do you do when many vital partners -- China, for example, and Russia -- are rivals as well? How must America's alliances change as NATO is stretched to the limit? How do we engage with rogue states and old enemies in ways that do not strengthen them and preserve our prerogative to challenge threats? How do we move beyond the diplomacy of men in striped pants speaking only for governments and embrace potent nonstate players and once-disenfranchised peoples? In searching for answers, Clinton is leaving behind old doctrines and labels. She outlined her new thinking in a recent speech at the Council on Foreign Relations in New York, where she revealed stark differences between the new administration's worldview and those of its predecessors: The recurring themes include "partnership" and "engagement" and "common interests." Clearly, Madeleine Albright's "indispensable nation" has recognized the indispensability of collaborating with others.

  • Clinton Speech on Foreign Policy Before departing for India and a conference in Thailand, Sec. of State Clinton discussed the framework of her "smart power" approach to foreign policy. Sec. Clinton discussed how nuclear nonproliferation and counterterrorism efforts work into the Administration's foreign policy strategy.
  • Clinton Address on U.N. Agenda Ahead of the United Nations General Assembly 64th session, Sec. of State Hillary Clinton outlined the U.S. goals for the meeting at the Brookings Institution. The UN session is the first for Pres. Obama, whose agenda includes addressing the conflict in the Middle East, nuclear proliferation in Iran and climate change.

Victory for Obama Over Military Lobby  When the Obama administration proposed canceling a host of expensive weapons systems last spring, some of the military industry’s allies in Congress assumed, as they had in the past, that they would have the final say. But as the president signed a $680 billion military policy bill on Wednesday, it was clear that he had succeeded in paring back nearly all of the programs and setting a tone of greater restraint than the Pentagon had seen in many years.  Now the question is whether Mr. Obama can sustain that push next year, when the midterm elections are likely to make Congress more resistant to further cuts and job losses. White House officials say Mr. Obama took advantage of a rare political moment to break through one of Washington’s most powerful lobbies and trim more weapons systems than any president had in decades. “They probably get an ‘A’ from the standpoint of their success on their major initiatives,” said Fred Downey, a former Senate aide who is now vice president for national security at the Aerospace Industries Association. “They probably got all of them but one or maybe two, and that’s an extraordinarily high score.” Mr. Obama has said that he does not intend to reduce military spending while the nation is engaged in two wars. But Mr. Gates also wants to cut more futuristic programs to free money for simpler systems like helicopters and unmanned spy planes that can help the troops now. Winslow T. Wheeler, a military analyst at the Center for Defense Information, a Washington analytical organization, said another key to Mr. Gates’s success was regaining control of the budget from the armed services.

Obama and the U.S. Strategy of Buying Time Strategy, as we have argued, is less a matter of choice than a matter of reality imposing itself on presidents. Former U.S. President George W. Bush, for example, rarely had a chance to make strategy. He was caught in a whirlwind after only nine months in office and spent the rest of his presidency responding to events, making choices from a menu of very bad options. Similarly, Obama came into office with a preset menu of limited choices. He seems to be fighting to create new choices, not liking what is on the menu. He may succeed. But it is important to understand the overwhelming forces that shape his choices and to understand the degree to which whatever he chooses is embedded in U.S. grand strategy, a strategy imposed by geopolitical reality. There are Obama supporters and opponents who also dream of the perfect balance: security for the United States achieved by not interfering in the affairs of others. They see foreign entanglements not as providing homeland security, but as generating threats to it. They do not understand that what they want, American prosperity without international risks, is by definition impossible. The U.S. economy is roughly 25 percent of the world's economy. The American military controls the seas, not all at the same time, but anywhere it wishes at any given time. The United States also controls outer space. It is impossible for the United States not to intrude on the affairs of most countries in the world simply by virtue of its daily operations. The United States is an elephant that affects the world simply by being in the same room with it. The only way to not be an elephant is to shrink in size, and whether the United States would ever want this aside, decreasing power is harder to do than it might appear -- and much more painful. Obama's challenge is managing U.S. power without decreasing its size and without imposing undue costs on it. This sounds like an attractive idea, but it ultimately won't work: The United States cannot be what it is without attracting hostile attention. For some of Obama's supporters, it is American behavior that generates hostility. Actually, it is America's presence -- its very size -- that intrudes on the world and generates hostility.

Foreign Affairs in a Changing World: Key Issues

We Had Our Perestroika. It's High Time for Yours. In the West, the breakup of the Soviet Union was viewed as a total victory that proved that the West did not need to change. Western leaders were convinced that they were at the helm of the right system and of a well-functioning, almost perfect economic model. Scholars opined that history had ended. The "Washington Consensus," the dogma of free markets, deregulation and balanced budgets at any cost, was force-fed to the rest of the world. But then came the economic crisis of 2008 and 2009, and it became clear that the new Western model was an illusion that benefited chiefly the very rich. Statistics show that the poor and the middle class saw little or no benefit from the economic growth of the past decades. The current global crisis demonstrates that the leaders of major powers, particularly the United States, had missed the signals that called for a perestroika. The result is a crisis that is not just financial and economic. It is political, too. The model that emerged during the final decades of the 20th century has turned out to be unsustainable. It was based on a drive for super-profits and hyper-consumption for a few, on unrestrained exploitation of resources and on social and environmental irresponsibility. But if all the proposed solutions and action now come down to a mere rebranding of the old system, we are bound to see another, perhaps even greater upheaval down the road. The current model does not need adjusting; it needs replacing. I have no ready-made prescriptions. But I am convinced that a new model will emerge, one that will emphasize public needs and public goods, such as a cleaner environment, well-functioning infrastructure and public transportation, sound education and health systems and affordable housing. Elements of such a model already exist in some countries. Having rejected the tutorials of the International Monetary Fund, countries such as Malaysia and Brazil have achieved impressive rates of economic growth. China and India have pulled hundreds of millions of people out of poverty. By mobilizing state resources, France has built a system of high-speed railways, while Canada provides free health care. Among the new democracies, Slovenia and Slovakia have been able to mitigate the social consequences of market reforms. The time has come for "creative construction," for striking the right balance between the government and the market, for integrating social and environmental factors and demilitarizing the economy. Washington will have to play a special role in this new perestroika, not just because the United States wields great economic, political and military power in today's global world, but because America was the main architect, and America's elite the main beneficiary, of the current world economic model. That model is now cracking and will, sooner or later, be replaced. That will be a complex and painful process for everyone, including the United States. However different the problems that the Soviet Union confronted during our perestroika and the challenges now facing the United States, the need for new thinking makes these two eras similar.

Whatever happened to the food crisis? World food prices soared in 2007-08, pushing hundreds of millions into poverty. But—said people at the time—there was a silver lining: high prices would be good for farmers, especially smallholders in poor countries such as Mr Tegegn. Higher returns would suck money into farming, leading to higher yields, bigger harvests and stable or falling food prices. Eventually, the argument ran, farmers and consumers would all be better off. This happy state of affairs seemed to be coming to pass in the second half of 2008. Ethiopia reported a record cereals harvest this January, up 10% on the previous year. Across the world, the picture was similar. After the price spike in the first half of 2008, farmers harvested 2.3 billion tonnes of cereals in 2008/09, the biggest crop ever seen. Big exporters began lifting the trade bans they had imposed to keep local prices from rising, so more food became available to world markets. The sharp fall in the price of oil, which occurred at the same time, increased food supplies further because, by making oil cheaper than ethanol, it encouraged farmers to sell for feed the maize they would otherwise have turned into biofuels. As food supplies surged (and demand, hit by the global recession, stagnated), prices plummeted. Between its peak in July and a trough in December 2008, The Economist’s index of food prices fell by 40%. All that seems fairly rational and hopeful. But this year’s changes have been more puzzling. Between December and mid-June, the food index rebounded by a third, even though this year’s total cereals crop is expected to be another bumper (2.2 billion tonnes, says the Food and Agriculture Organisation, second only to 2008/09, see chart left). Meanwhile, soyabean and sugar prices have risen by nearly half from trough to peak—see chart below—and the index of “non-food agriculturals” (plants such as cotton or rubber) also rose by a quarter between December and mid-June. Prices have been increasing at a time of plenty. The price fluctuations of 2007-09 suggested that uncertainty in the world of agriculture was deepening under the influence both of oil prices and capital flows. The fact that prices are still well above their 2006 average, even in a recession, suggests that the spike of 2008 did not signal a mere bubble—but rather, a genuine mismatch of supply and demand. And this year’s price increase suggests that there is a long way to go before that underlying mismatch is eventually addressed. “I don’t see that anything has fundamentally changed,” says Mr Abbassian. “That means we cannot go back to where we were in 2007.”

  • Shooting Ourselves in the Food Rising food prices are eroding the real income of people all over the world, undoing some of the last decade's progress in combating poverty. More than 100 million people in developing countries are now at risk of once again falling below the poverty line.
  • Is There Such a Thing as Agro-Imperialism? A variety of factors — some transitory, like the spike in food prices, and others intractable, like global population growth and water scarcity — have created a market for farmland, as rich but resource-deprived nations in the Middle East, Asia and elsewhere seek to outsource their food production to places where fields are cheap and abundant. Because much of the world’s arable land is already in use — almost 90 percent, according to one estimate, if you take out forests and fragile ecosystems — the search has led to the countries least touched by development, in Africa.

The future of Africa? Foreign investment can do wonders but the interaction between such investment and corrupt foreign governments can also be negative if workers and citizens are not granted adequate rights.  This article caused me to revaluate possible paths for some African futures.  The Coase theorem is finally kicking in.  I see corrupt politicians deciding it is more profitable, and also more secure, to "sell off" their countries than to oppress them in the traditional manner. 

Climate Summit Accord Is a Step Toward Progress  Word was that the talks might continue through the night, perhaps even through Saturday and Sunday. Yvo de Boer, the United Nations climate chief, said he had made sure to keep his hotel room through the weekend. Suddenly, it was over. After a meeting between President Barack Obama and Chinese Premier Wen Jiabao, Indian Prime Minister Manmohan Singh, and South African President Jacob Zuma, Obama announced at a press conference that an agreement had been reached. It still has to be officially accepted by the other countries and it wasn't nearly as strong as many had hoped. But an Obama Administration statement called it "a meaningful and historic step forward, and a foundation from which to make progress." That's too harsh a judgement, says Robert Stavins, director of the Harvard Project on International Climate Agreements. "It's obviously less than hoped for, and less than some people expected. But given the status of the negotiations on Tuesday [when talks came to a halt], this is the most that could be hoped for. And if not for the President of the United States, we wouldn't even have gotten this."In fact, says Steve Howard, founder and CEO of the Climate Group, a nonprofit group whose members include companies such as Google (GOOG), Duke Energy (DUK), and China Mobile (CHL), the idea that the world has failed to act is "a lot of rubbish." Howard adds: "This is the biggest peacetime mobilization of global effort on anything." Both Stavins and Howard point out that one of the most important outcomes of the process may not be the deal itself, but the fact that a number of countries made their own commitments to reduce emissions along the way to the agreement. "If you think back a year or so, imagine the U.S., Brazil, China, India, Australia, and Russia all turning up and making definitive national commitments to significant emissions reductions—and the world committing to $100 billion a year for the developing world," says Howard. "It would have been inconceivable a year ago." The fact that those countries are now heading toward a lower carbon-emitting future is a big deal for business. It adds up to far more certainty—and opportunities. Meeting the national targets of each country will mean a major shift to renewable power, to fuel-sipping cars, to efficiency steps such as a smart grid and green buildings, and to efforts to capture the carbon dioxide spewing from power plants. The Copenhagen Accord will continue to be criticized as a half-measure or even a failure. But in retrospect, it may be considered a turning point.

Re-Thinking the Foundations: Fragilities and Risks

Think Again: Asia's Rise Sustained, rapid economic growth since World War ii has undeniably boosted the region's economic output and military capabilities. But it's a gross exaggeration to say that Asia will emerge as the world's predominant power player. At most, Asia's rise will lead to the arrival of a multi-polar world, not another unipolar one. Asia is nowhere near closing its economic and military gap with the West. The region produces roughly 30 percent of global economic output, but because of its huge population, its per capita gdp is only $5,800, compared with $48,000 in the United States. Asian countries are furiously upgrading their militaries, but their combined military spending in 2008 was still only a third that of the United States. Even at current torrid rates of growth, it will take the average Asian 77 years to reach the income of the average American. The Chinese need 47 years. For Indians, the figure is 123 years. And Asia's combined military budget won't equal that of the United States for 72 years. In any case, it is meaningless to talk about Asia as a single entity of power, now or in the future. Far more likely is that the fast ascent of one regional player will be greeted with alarm by its closest neighbors. Asian history is replete with examples of competition for power and even military conflict among its big players. China and Japan have fought repeatedly over Korea; the Soviet Union teamed up with India and Vietnam to check China, while China supported Pakistan to counterbalance India. Already, China's recent rise has pushed Japan and India closer together. If Asia is becoming the world's center of geopolitical gravity, it's a murky middle indeed. Those who think Asia's gains in hard power will inevitably lead to its geopolitical dominance might also want to look at another crucial ingredient of clout: ideas. Pax Americana was made possible not only by the overwhelming economic and military might of the United States but also by a set of visionary ideas: free trade, Wilsonian liberalism, and multilateral institutions. Although Asia today may have the world's most dynamic economies, it does not seem to play an equally inspiring role as a thought leader. The big idea animating Asians now is empowerment; Asians rightly feel proud that they are making a new industrial revolution. But self-confidence is not an ideology, and the much-touted Asian model of development does not seem to be an exportable product.

Tamed Tigers, Distressed Dragon Of all the unprecedented things that have happened during the global economic crisis, perhaps the most startling and ominous so far occurred in early 2009: shipping rates between southern China and Europe temporarily fell to zero dollars. As consumer demand in the West dried up and exports dwindled, brokers actually waived the transport fee and only charged a minimal handling cost. By April, hundreds of empty ships, representing over ten percent of the world's cargo capacity, floated idly in Asian waters. After traffic in South Korea's Pusan Harbor, one of the world's busiest, dropped by 40 percent in March, the port ran out of space to store the 32,000 unused containers that had piled up. The collapse in shipping is more than simply a proxy for the woes facing the global economy; it also underscores the degree to which Asia is bearing the brunt of the global slowdown. On an annualized basis, Taiwan's exports shrank in the last quarter of 2008 by 42 percent, and its industrial production fell by 32 percent -- the latter a bigger annual decline than the United States experienced in the Great Depression. Japan ended 2008 with its first annual trade deficit in almost 30 years. This spring, its industrial production retreated to the level of the early 1980s. Singapore's patriarch, Lee Kuan Yew, has predicted that the city-state's economy may shrink by as much as ten percent in 2009, the steepest contraction since its independence in 1965. To be sure, trade is starting to improve, and government stimulus programs have produced a pleasant blip. But the underlying problems have not gone away. Even China, on track to achieve GDP growth of between six and eight percent this year, has seen its growth rate, which was 13 percent in 2007, fall dramatically. Across the region, economies that just a year ago were celebrated for their consistently strong performance have stalled or gone into reverse. This was not meant to happen. Asia resisted the financial follies of recent years. The region's financial institutions largely eschewed the toxic assets that have hobbled their peers in the United States and Europe, governments displayed fiscal integrity, corporations maintained healthy balance sheets, and individuals saved rather than splurged. The cause of Asia's current economic despair, ironically, is the very development model that was the source of its prior success: its heavy dependence on exports. By deciding to hitch their wagons to manufactured exports, Asian leaders left themselves inherently vulnerable to a drop-off in Western consumption. The growth was also built on weak social and political foundations, from underinvestment in public education, health care, and social services to poor governance and a weak rule of law. These concerns were ignored by the business and political leaders who benefited the most from rapid economic growth, and the masses generally did not quibble so long as their incomes increased year after year.

December 17, 2009

Change is Necessary: Current Course and Speed = ROCKS!

We're going to follow along with the "change is hard" theme by a semi-wonkish dissection of why it's necessary, including a look back at the history, how we got here and what's next. But the bottomline is that the last two posts inventoried the changes that are necessary (and their scope and scale) and why it's so hard to change, given we're working in a sausage-factory. But, remember, somebody buys the sausage - and that's you! At the end of the day we weren't concerned about making our lives, those of families and friends and the world around us better this would all be irrelevant. Instead we could focus on having a good time. The problem is when you wake up the next morning and the party of the last three+ decades is over and it's time to deal with the hangover (always an extremely painful process in our experience).

The bottomline is that America has become an increasingly stratified society where the rewards for growth and progress go to fewer and fewer people. That's not (just) an issue of social justice because it's people's commitment to the strong and working society that's required. Which means, in turn, that they have to believe that society treats them fairly and with justice. The fundamental social contract in America is that if you work hard, play by the rules and help out your neighbors you can get ahead and make life better for your family, now and in the future. These days people are more than seriously questioning that - just ask your neighbors the next time you're having a beer or three.

Jobs, Jobs, Jobs: It's All About the Jobs

Everything we want to do in live ultimately rests on the ability to earn a decent living - a fair day's pay for an honest day's work. That was always our core belief and, we think, most peoples. What the chart above shows you is that's no longer entirely true. Underneath all this is the bedrock requirement for a growing economy that creates good jobs for everybody who wants to work that is fairly paid and qualified (those are all critically important caveats). That's the day-to-day translation of the social contract and what allowed us to build the society we have. The good news in all this btw is that we can get there again. The bad is that it'll take time, hard work, discipline, being willing to give up things to get ahead and the death of the "instant gratification" culture.

O.K. - here's we get a little wonkish, or worse. Sorry but it's necessary.

 These charts capture the last five decades of job creation. We've had flat periods before but this is the first time that we've had more than a decade where new private jobs created is zero! No jobs, no income, no pay raise, no gifts for the kids at Xmas, no....well you get the picture. The top chart set is the result of this one - poor job creation (again for which people are qualified) means that the few who have the right skills (or connections truth be told) are the ones the economy values. What created the modern middle class was the huge surge in good-paying jobs in industries where a h.s. education was good enough. This time last century a H.S. education was about like a graduate degree now. We need to do it again.

Please Mr. Obama, Make it Go Away

The last post inventoried the roster of major policy issues and where we're at on them. The funny thing is that in any of the last 3-4 administrations any line item would have been the central concern. Now we have double baker's dozen or more. On which we are making progress, believe it or not (and it's incumbent on you to do your home work and test our arguments). The President has spent a lot of political capital getting thru each of these barriers yet we're in better shape than you'd expect and much better than we deserve. Check out these poll results from the latest WSJ/NBC poll.

Overall the Prez's popularity has declined, some of which you'd expect and some of which is because he didn't magically manage to fix all these problems instantly. When you start with euphoria based on illusion the only way to go is for the bubble to pop. When you go look at the original poll some of what struck us is how reasonable some of the feedback is, e.g. Afghanistan has more support than you'd have thought. The other thing of course is the expectations gap but what's also interesting is how well respected the President is. Maybe there's a bit of realism there after all. A key finding though is how dis-enchanted folks are with a gridlocked Congress playing partisan politics. They're your representatives folks - and they're doing what their constituents asked for. This comes back to you doorstep, in other words. In particular we'll point out the Republicans have fought every single item, gone straight-line party votes, proposed no alternatives and tried to sell their opposition as idealism. A friend constantly accuses of dissing those who disagree. Maybe. On the other hand good intentions and sincerity describes a lot of villains who thought they were doing the right thing. Now that's NOT an accusation we're leveling but on the acid test of proposing their own alternatives and working for compromise the Rips fail three tests: no proposals, strict partyline votes (nobody's that cohesive thru analysis, strictly politics) and emotional appeals to the hindbrain (otherwise known as selling to the fear, death panels anyone). The real problem is that on the whole that's a fair summary of each policy issue.

Consider the Economy and the Stimulus

Let's take the "simple" example of the Economy and the stimulus package which was wrong, should have more tax cuts in it and nothing else, hasn't worked and isn't creating jobs. Remember that's being said by the same people who this time last year voted down the financial rescue package that saved Western Civilization out of sincere adherence to their ideals - the fact that it served their own partisan interests and still does is entirely coincidental. Now we did a detailed pure look at the economy and the related policy just a bit ago (The Sine Qua Non: Economy, Stimulus and Outlook) and you might want to go back for a refresh.

We "borrowed" this pair of charts from Nate Silver over at FiveThirtyEight:Politics Done Right. He starts by breaking up the initial pacakge into its pieces - you'll notice tax cuts were a big chunk of it. The problem is that tax cuts aren't very effective, they're just fast. Higher impacts comes from direct spending on making things but that takes longer and you can't exceed the ability of the government departments to manage the huge surge within existing staff and capabilities. On the whole, give or take 2-4% sausage-making fudging around the corners to get support (consider it the political tax for the speed and getting passed at all) {Think It's Been A Bad Year For The Federal Budget? Think Again.} this was a pretty darn well crafted package. True we haven't made up the ground in lost jobs and won't for a long time, but the situation ain't nowhere near loosing 3/4 of a million jobs/month either. Without the stimulus that's probably where we'd be. (Slapshot in Time: Economy Status and Appalling Military Metaphors).

Now with all that level setting, hopefully evidence-based and reasonably well-argued, that's really about fixing the things that are leaking right now. Now we happen to think to get back to the kind of society we want we need to create 46 million jobs in the next decade and are likely to get 20 (Antipasto Appetizer, Bouillabaisse Main Course: Markets, Economy, Policy, Outlook). The BLS just said we're going to get 15. How do we fix that? Well we've actually been talking about that for a while now and it rather looks like the current policy agenda, again believe it or not. Put to put that in place it can't be business as usual and to fix that you need to understand where we're at, what it's cost us and how we got here.

Growth IS Jobs, Jobs are Wages, Wages Are Growth

Economic growth is what creates jobs. The top chart is more than a little wonkish but we wanted you to believe our arguments, or at least that we'd looked at it pretty hard. We need to grow jobs at 2.5%/year to breakeven and we need to get better than that to get that brave new world. You can read the requirements right off the chart - go to the vertical side, look up the number you want, run across to the red line and down to growth. If you do that you'll find that 4-5% growth is what we'd like. Oh lordy, would we like it. Remember, those aren't just numbers - it's who eats, who goes to college, who's kids get shoes. They may be just numbers but the lives behind them are really real.

Back in the '60s we sorta were getting those numbers and then the 70's caught up with us. We did a little better but not much in the 80's but it wasn't until the Tech Boom of the late 90's that we started gaining ground. All of which has been more than wiped away (again, look back: no new jobs in over a decade...OOPS!).

A Fair Day's Work, a Fair Day's Pay

Yeah, right. Now you tell one. This chart tells us the stories of real wages (after inflation) and personal income. Both went down in the 60s, crawled back in the 80's and started moving up again in the 90's. Then wages stalled and income get the crap beat out of it. But neither did very well - go back to the first chart on incomes. If jobs are poor and wages worse is it any surprise that incomes stalled out? In the 50's and 60's the distribution was kind of like a picket fence. Everybody got better together, roughly, give-or-take. From the '80s onward it got to be more and more like a stand of trees planted at different times (and to beat up with the analogy major differences in water, sunlight and fertilizer. Most of the fertilizer went to the tall trees).

Bring Out the Pitchforks: the Story of Profits

So where did the wages of sin, ahem, excuse us the returns from growth, go? Well on thing you might expect depending on which conspiracy theory you read last night is to evil corporations. A theory it turns out was not entirely far-fetched. If you deconstruct this pair there's plenty for discussion (economics is life, just in disguise). From 47-mid60's wages grew very nicely thank you and then went in the tank until they began stabilizing. But it wasn't profits, which also went down, it was capital investment (remember that was when safety regulation hit, we had two major oil shocks, women entered the labor force - in other words huge changes that need a lot of new stuff to make it work). But then this last decade wages really went into the crapper while profits soared. What happened there?

A Tale of Two Profits: Finance vs. the Rest of US!

Well now that's an interesting story indeed. It seems when you break it up into companies who make things and those who finance things the first set ran for decades behind the economy while the second set ran so far ahead of it was like power vs. horses. The doommongers may have a point - we quite making stuff and started financing it. Now you need to take a look at this decade where real company's profits went thru their own little mini-bubble because they weren't hiring or investment in equipment. Instead they were doing buybacks and buyouts, using some of that financing truth be told. But no company hires, builds plants or buys equipment unless they see future growth in demand. A no growth economy means you don't have to so you don't. Simple as that.

The guys who made loans, funded your last vacation, gave you a credit card or traded on their own account on the other hand made money hand over fist. It turns out there really are some greedy capitalists out there who also seem to be tone-deaf to smoldering firestorms and the sound of pitchforks being sharpened. (Paying the Piper: Finance Industry, Performance, Value & Regulation,Beginning a Great Debate: People Singing, Politicians Making Sausage).

Debt, Debt, Debt and More Debt

But they sure didn't do it all by themselves. In fac the had the wholehearted cooperation of the rest of us. There's all sorts of talk about government debt running out of control these days that's not accurate, distorts the state of things (and the dire circumstances) and is selling to the hindbrain. In fact the Federal and State&Local governments (S&L) were the folks writing down their debt (here shown as multiples of GDP to scale it). Who really started running up their debt, beginning in the mid-80's, were Consumers (you) and Businesses (the people selling stuff to you). And the guys who just exploded were our favorite Financial types. Interestingly btw, if you read the charts, the biggest surges in Federal debt were under Reagan and Bush II. Our most conservative President's no less! This chart is only try 2008 and private borrowing has dropped like a rock - which means that all the government is doing is taking up the slack, largely to get us out of this mess (though 90% of the debt is directly due to Bush's tax cuts and two wars). But Consumers were borrowing to a fare-the-well also (you can see the relative growth in the different sectors in this chart by clicking on thru). All of those mortgages, credit cards and vacation loans you know.

Paying the Danegeld

There's an old English saying to the effect that if you pay the Dane his gold he'll just want more. The alternative of course being having your villages destroyed but at some point you don't have any more gold. And oh what a price we've paid and oh what trouble we've created for ourselves by living for today on borrowed money. From this chart it looks to us that after the virtuous 60s where growth was higher we quit saving and that started impacting growth. It's really pretty simple - if you save then financial institutions, the right kind anyway, turn around and lend that to companies to invest in new plants and equipment. If they've made the right choices then they grow, and if there are enough of them, they grow the economy. Which means more jobs and higher wages.

In other words by borrowing to party we cooked and ate the goose who laid the first batch of golden eggs. Which makes the remedy really simple and really...really....really hard. Start saving more and put it into productive investments. The problem with that "simple" remedy is that it's going to take us a long-time to rebuild our personal balance sheets and then start saving enough to start really growing again (remember 4% growth = 2.5% jobs). And that's where we need to get back to.

Your Grandparents Were Right

 Which means some pretty fundamental changes in behavior for all of us together. Right now we're standing between the blades of the giant scissors of Debt vs. Savings. You grandparents were right - work hard, get a good job, don't spend more than you make and save....save...save. Better yet invest...invest...invest. And not in tanning booth salons either but in real stuff making real products that people really want to buy.

The world we inherited was created by the people who lived their lives that way. Now it's up to us to get back to there.

But this is actually good news - there are reasons for optimism. The only real requirement is that we all stop drinking the koolaid of easy answers, magic fixes and something for nothing and get back to the notion of a fair day's pay for a fair day's work.

As simple as that....as hard as that. But you'll decide, you really will. One way or another because not deciding is not an option. One way or another.

December 13, 2009

It's Your Life: Change Is Hard, Change We Must, Changing We Are!

The question, and challenge, that immediately follows from the last post on the challenges of change and the internecine battles (as well as its predecessors) is what changes? As well as how are we doing, what's the situation and, in general what's going on? Let's set the stage with a little Bon Jovi riff channeled thru Dragon Ball Z - It's Your Life. In other words you, we and us can choose to tackle these things or continue to pretend, posture and politic. Letting a heroic fantasy cartoon be the front page for a teen angst and rebellion warsong carries a bunch of mixed and subliminal messages, don't you think? You pick what you want but at heart they are about change, tackling things and a belief that it can be done.

So think what you like, take what you want and/or think we're reaching to far for metaphors and implicit puns (we readily admit) but hey, if they can't take a leg-pull then F em.

Getting Serious: Inherited Major Challenges

A little more seriously one of the major agenda problem sets is all the major domestic issues that have accumulated and metastasized over three decades. Here we pick up on several of the major ones that we're actually tackling, at very deep levels indeed. that are mandatory to fix if we're going to re-ground our society and economy on a sounder footing.

Each of these is a serious national problem, and one we've had a pretty good idea how to tackle for years. Take Energy for example. The current Climate/Energy proposals in Congress and the regulatory changes that have been decided by the EPA move us rather far along. But just as an example of mis-interpretation the Climate Change Bill(s) aren't about climate, or just about climate. They're about Energy, Economics and National Security. Do you think we'd be spending $Bs in the ME were it not for oil? Or that it helps our economy to be hostage to desert oil reserves and have to keep shipping money we could better use here, as well as lives, over their? With the best intent of course it'll still take 30 years to change our dependencies. But it didn't have to be that way. The current energy policy actually bear a striking resemblance to the National Energy Policy published as the first major policy framework by the Bush Administration around Sept. 9, 2001! Think about it and the ironies. To make it worse both bear a striking resemblance to the proposals put forth in the late 1970s, at a very detailed level.

 

Change IS Hard: the Depth Problem

How much West Wing did you ever watch? We readily admit to being a die-hard fan on many levels - not least because it captures the personalities, accurately represents the day-to-day hecticisms and the politics. You could teach graduate workshops on politics, policy and change management from those shows. Not least because their representation of the policy issues is pretty accurate. One thing you might not have noticed, telling in that the arc of the show is pretty much an accurate reflection of the 90's and the Clinton Administration as well as some more au courant problems, is that what's under discussion is almost always incremental, tuning changes.

Anytime any policy is being proposed you have to look far ahead (look back at the first chart and notice the multiple steps in the timewave ripples of any decision, especially if the original good intentions didn't take them into account). In the UL you get a sense of this by an expanding band of uncertainty, which means that the straightline intended policy will have to be tuned and administered. It also means that if the band is to wide, or more typically, not well thought thru and implemented it's easy to fall outside into disasters (the good surprises are few and far between). The problem (the UR corner) is that incrementalist policy change, while intending to build on a presumed steady-state foundation, all too often leads to a deeper deterioration. That's in essence where we're at now.

What we need to do, for each of these major policy areas and myriad others, is re-think and re-initiate policy, define a new and more thoughtful trajectory and (in the LL corner) move ourselves close to the green boundary of constructive implementation. That means, wherever we're at, that Policy has to start with where we're at and look for non-incremental change (LR corner). In the readings you'll find a sampling of readings excerpts across the foreign, economic/financial and domestic policy areas taken over the last several months that sample the state of things. You may be surprised to see how far we've come in how short a time.

The Power of Interests and Partisans

Other sections of the readings start with a quick introductory summary of where we're at as a whole (sort of to frame the whole evidence-based collection and define the context), surveys the positioning of interest groups and the political opposition and then moves on to discuss (and provide assessments of) the decision-making processes and principles, including some assessments of the President's character and style. Including, for example, his marriage; about which he and Michelle were remarkably candid as well as realistic, pragmatic and modern. Really fascinating, at least to us, is the evolution of key commentators opinions over these last six months. From David Brooks' "The Question of Tenacity" to the widespread applause for his West Point and Nobel speeches, especially the latter. Which is, IOHO, the finest foreign policy speech we've ever heard. And lines up startlingly well with our take on what US foreign policy should be, philosophically, politically and implementation-wise.(Our complete strategic framework and assessment, which again line up startlingly well the Oslo speech, are embodied in these two white papers: Good Government for a Stable World and Brave New World: Constructive Engagement and US Foreign Policy).

The problem we all face is that in any given situation, as it evolves over time and previous incremental decisions accumulate, that interest groups coalesce around the state of things as they are. Which leads to the "Iron Rice Bowl" effect. They find it more rewarding to invest resources to tuning policy decisions to their own advantage and become rent-seeking instead of focusing on what really needs to be done. This has happened thruout history, recent and ancient. In fact the accumulation of organizational sclerosis (a hardening of the administrative apparatus and its capture by interest groups) has brought down ever major civilization in history. Beyond that certain power groups both align with the interest groups and fight to protect their own positions. Sad to say, very sad in fact, in wrestling with the biggest serial set of crisis in generations the political opposition has chosen to maneuver in pure opposition instead of being constructive. Possibly the worst possible strategy from the view of the well-being of the whole country though tactically advantageous for the opposition. You could call it irresponsible independence where having no responsibilities for effective governance they are free to pursue their own partisan advantages - and have!

So Where Are We At? Strategic Policy Inventory & Assessments

Let's get to the most important part of this dicussion and look at where we're at in this summary graphic. Part of the message here is for us all to realize the sheer number of policy challenges and decisions that have had to be faced up to. And to think about how serious they are. For example in the ForPol arena Pakistan almost collapsed this last Spring and was only held together by US intervention. For another major decisions that's received almost no public attention Gates and the President have changed spending priorities and decisions in the Pentagon more than they've been changed since Truman's days. A final point you really need to grasp - actually a twofer - about all these changes. Each of them is huge and composed of many major subparts, each of which would have been major policy items and agendas for previous Administrations. The other thing to know is that on each of them, which are being attacked systematically and systemically instead of piecemeal, that the level of change being proposed is appropriate to the scope and scale of the problem. And on each and every one we've made more progress in less than a year than, in almost all cases, has been made in decades.

So look at the Inventory, sorted in categories and, roughly, by time within category. And the four assessment criteria we applied to define a framework for judgment and analysis. The criteria we used were Importance, Threat, Urgency and Status. By Importance we meant the impact, size and effort associated with the problem (bearing in mind that nothing on this level is anything like merely major). We define Threat by the harm that can be caused by the current state of things, relative to the nature of the problem, an assessment that varies with the nature of the problem. So, for example, the G20 meeting in the Spring HAD to arrive an an agreed and coordinated worldwide response to the Financial/Economic crisis yet no clear consensus emerged. Somehow or another the President, inaugurated less than two months (closer to six weeks before) stepped into the breech and provided the leadership that has brought the entire world to a much healthier place. Urgency is defined as the immediacy of a problem, that is must it be worked on now. That has to vary by problem and approach. When Pakistan was about to blow that could have become immediately existential. The problems with our relationships with China, Asia and India weren't and aren't resolvable in anything short of decades of sustained and consistent effort. What was urgent was to take effective first steps to re-establishing the relationships on a workable foundation for going forward. And some things were Urgent, Important and immediate Threats. Like the Stress Tests for the Banks whose successful implementation and conclusions restored confidence in the Banking sector that might otherwise have been lost and resulted in another credit and financial crisis as bad as last Fall.

Existential Angst: My Neighbors Scream

Looking at this picture you can probably already guess what our point is going to be. It was painted by the Norwegian painter Edvard Munch in the early 20thC, before WW1 be it noted (if you want to see real anguish of the rawest sort go look up the German post-war Expressionists painters. Since this is a family blog we chose not to reproduce any of them; plus they were a little off topic). The real point is that the last "Long Decade" (as discussed and dissected by Jacques Barzun in his monumental magnum opus From Dawn to Decadence (From Dawn to Decadence: 500 Years of Western Cultural Life 1500 to the Present ) from 1890-1910 is when European Civilization reached a point of exhaustion. That is when the arc, arguably. of "progress" over the last 400-500 years had reached the point where reason and rationalism weren't going to create a perfect world.

 My neighbor and I got into a rather spirited discussion at this year's neighborhood Christmas party, engendered by the agita and anxiety she was feeling at the tough times. And much more so about the scope and size of the changes and challenges sweeping around. She expressed a natural concern that too much was being tackled to soon. A fear that is widely shared, compounded by the lack of clear explanations and the speed and force of changes and turned nearly carcinogenic by the partisanship of many in our so-called political leadership. NB: for a detailed discussion of what we should, and have a right to expect, from morally responsible public leadership please see this whitepaper: Heroes, Leaders and Public Morality: Values and a Healthy Public Square.

The problem, to put this whole long post/essay in a nutshell, is that we have no choice. It's either cope or drown. And on our assessment we're coping much better than we have any right to expect in spite of what many spear-carriers have done to try and prevent that. All with the best of pure-hearted intentions of course. Now you tell me - do pure-hearted intentions make up for being a public danger?

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Quick Introduction: Representative Readings

Obama in Chains. It is hard for international observers of the United States to grasp the political paralysis that grips the country, and that seriously threatens America’s ability to solve its domestic problems and contribute to international problem solving. America’s governance crisis is the worst in modern history. Moreover, it is likely to worsen in the years ahead. The difficulties that President Barack Obama is having in passing his basic program, whether in health care, climate change, or financial reform, are hard to understand at first glance. Part of the cause for these huge divergences in views is that America is an increasingly polarized society. Political divisions have widened between the rich and poor, among ethnic groups (non-Hispanic whites versus African Americans and Hispanics), across religious affiliations, between native-born and immigrants, and along other social fault lines. American politics has become venomous as the belief has grown, especially on the vocal far right, that government policy is a “zero-sum” struggle between different social groups and politics. Moreover, the political process itself is broken. An equally deep crisis stems from the role of big money in politics. Backroom lobbying by powerful corporations now dominates policymaking negotiations, from which the public is excluded. Finally, policy paralysis around the US federal budget may be playing the biggest role of all in America’s incipient governance crisis. These paralyzing factors could intensify in the years ahead. The budget deficits could continue to prevent any meaningful action in areas of critical need. The divisions over the wars in Iraq and Afghanistan could continue to block a decisive change in policy, such as a withdrawal of forces. The desire of Republicans to defeat the Democrats could lead them to use every maneuver to block votes and slow legislative reforms. A breakthrough will require a major change in direction.

Think Obama Hasn't Gotten Much Done? Think Again. About one thing left and right seem to agree: Obama hasn't done anything yet. Maureen Dowd and Dick Cheney have found common ground in scoffing at the president's "dithering." NEWSWEEK recently ran a sympathetic cover story titled "Yes He Can (But He Sure Hasn't Yet)." The sarcasm brigade thinks it has finally found an Achilles' heel in his lack of accomplishments. "When you look at my record, it's very clear what I've done so far, and that is nothing. Nada. Almost one year and nothing to show for it," Obama stand-in Fred Armisen recently riffed on Saturday Night Live. Jon Stewart asserts "it’s chow time" for a president who hasn't followed through on his promises. This conventional wisdom about Obama's first year is sure to be flipped on its head by the anniversary of his inauguration on Jan. 20. If, as seems increasingly likely, Obama wins passage of a health-care-reform bill by that date, he will deliver his first State of the Union address having accomplished more in his first year than any other postwar American president. This isn't an ideological judgment. It's a neutral assessment of his emerging record. The case for Obama's successful freshman year rests above all on the health-care legislation now awaiting action in the Senate. Democrats have been trying to pass national health insurance for 60 years. Past presidents who tried to make it happen and failed include Harry Truman, Lyndon Johnson, Jimmy Carter, and Bill Clinton. Through the summer, Obama caught flak for letting Congress lead the process, as opposed to setting out his own proposal. Now his political strategy is being vindicated. We are so submerged in the details of this debate—whether the bill will include a "public option," limit coverage for abortion, or tax Botox—that it's easy to lose sight of the magnitude of the impending change. For the federal government to take responsibility for health insurance will be a transformation of the American social contract and the single biggest change in government's role since the New Deal. If Obama accomplishes nothing else, he may be judged the most consequential domestic president since LBJ. He will also undermine the view that Ronald Reagan permanently reversed a 50-year tide of American liberalism. Obama's claim to a fertile first year doesn't rest on health care alone. There's mounting evidence that the $787 billion economic stimulus he signed in February—combined with the bank bailout package—prevented a depression. Should the stimulus have been larger? Should it have been more weighted to short-term spending as opposed to long-term tax cuts? Would a second round be a good idea? Pundits and policymakers will argue these questions for years to come. But few mainstream economists dispute that Obama's decisive action prevented a much deeper downturn and restored economic growth in the third quarter. The New York Times recently quotedeconomist Mark Zandi, who advised candidate John McCain (and who now offers guidance to the Democrats), on this point: "The stimulus is doing what it was supposed to do—it is contributing to ending the recession," he said. "In my view, without the stimulus, GDP would still be negative and unemployment would be firmly over 11 percent." When it comes to foreign policy, Obama's accomplishments have been less tangible but hardly less significant: he has put America on a new footing with the rest of the world. In a series of foreign trips and speeches, which critics derided as trips and speeches, he replaced George W. Bush's unilateral, moralistic militarism with an approach that is multilateral, pragmatic, and conciliatory. Obama has already significantly reoriented policy toward Iran, China, Russia, Iraq, Israel, and the Islamic world. Next week, after a much-disparaged period of review, he will announce a new strategy in Afghanistan. No, the results do not yet merit his Nobel Peace Prize. But not since Reagan has a new president so swiftly and determinedly remodeled America's global role.

One problem with Republicans: They've got the wrong Mitch Earlier this week, I found myself in the majestic office of Indiana's diminutive governor, Mitch Daniels, talking about health care. Daniels is a rarity these days, an incredibly popular Republican politician who overcame last year's Democratic tide in his state to win a second term as governor with nearly 60 percent of the vote. His Republican pedigree includes service to Indiana Sen. Richard Lugar and Ronald Reagan before being named director of the Office of Management and Budget in George W. Bush's first cabinet. His belief in free markets, and dislike of high taxes and regulation, puts him squarely in the conservative camp. On this day, Daniels is describing how, in his first term, he won bipartisan support for a program known as Healthy Indiana, which provides health insurance for Hoosiers who aren't poor enough to qualify for Medicaid but earn too little to afford buying coverage for themselves. So far, 50,000 residents have signed up for the program, under which the state contributes up to $1,100 each year to each enrollee's individual health savings account. Participants also contribute according to their income, and when the account is depleted, a catastrophic insurance plan kicks in to cover any additional expenses. It's all paid for with a portion of the state's Medicaid funds, along with an increase in the cigarette tax that Daniels pushed through a reluctant legislature. In fact, Daniels is such a believer in health savings accounts and consumer-directed health plans that he made sure one was offered to state employees. So far, he reports, 70 percent of state workers have signed up -- including himself -- saving millions of dollars each year for themselves and taxpayers. As he's talking, a thought suddenly occurs to me: They've got the wrong Mitch! Instead of relying on Mitch McConnell to lead Senate Republicans into battle over health care (or anything else, for that matter), they should have turned to Daniels instead.

How Politics Changes Our View of Science The fact that Republicans and Democrats differ on whether health-care reform should include a public option is no surprise. That they differ on setting a date for exiting Afghanistan, sure. On Sarah Palin, of course. But on physics? And biology? That the growing list of issues where there is a partisan divide now includes the accuracy of scientific findings may be lamentable for a democracy (if we can't agree on facts, how can we agree on policy?), but it's a gold mine for research on how personality and other psychological factors influence political ideology. The red-blue split on mammograms is particularly striking. In a recent poll, the Pew Research Center asked 1,002 American adults about a preventive-health task force's conclusion that most women can safely begin mammograms at age 50, not 40, and have one every two years, not annually. (Large studies have found that earlier mammograms save almost no lives; since the radiation can cause cancer, it therefore makes sense to minimize them.) Among Republicans, 15 percent agreed with that. Among Democrats? Twice as many. As with mammograms, climate change is also a matter of trust and belief (or not) in experts: physicists, or Glenn Beck? In addition, denying environmental reality reflects, in part, a tendency to justify the existing order, argues Jost. Conservatives, part of whose ideology is to respect and protect the status quo, tend to engage in this "systems justification" more than liberals, tending to view corporations, markets, government, and other institutions as legitimate and benign. Acknowledging climate change means recognizing "shortcomings of the current system" and "admitting that the status quo must change," Jost and colleagues write in a paper to be published early next year. They find that a desire to justify the status quo (gauged by agreement with such statements as "Most policies serve the greater good" and "Society is set up so people usually get what they deserve") accounts for much of the variability in people's likelihood of denying climate change. It's comforting to believe our views on political and empirical questions are the product of rational thought and analysis. But belief doesn't make it so.

2009 is ending. But is it history? We saw anti-tax tea parties and White House party-crashers; climate summits and beer summits; one war start to wind down and another begin to ramp up. We watched a plane float miraculously on the Hudson, making a pilot famous, and a balloon float aimlessly across Colorado, making a family infamous. We loathed Bernie, mourned Teddy and mispronounced "Sotomayor." We tweeted Iran, lost out to Rio and looked back on Neverland. We inaugurated hope, bailed everyone out -- and then went a little rogue. 2009 had something for everyone, more than enough to fill the top-10 lists and cable news video mash-ups that make up our year-end rituals. But in the sweep of history, where will '09 rate? Will it be deemed a truly pivotal year, or merely another random collection of 365 days, featuring one damn thing after another? Turns out there is plenty of competition in the Big Years department; identifying history's most consequential calendar is a well-worn genre for journalists and historians, producing books such as David McCullough's "1776," Margaret MacMillan's "Paris 1919," Ray Huang's brilliantly titled "1587: A Year of No Significance" and countless more. In 2009, in particular, several works have declared that a given year "changed the world" or was the one in which "everything changed." In an homage to anniversaries divisible by 10, they focus on 1959, 1969, 1979 and, of course, 1989 (though '99 is absent. Too soon?).

Policy Surveys: Foreign Policy,

A surge to believe in President Obama has embraced a strategy for Afghanistan and Pakistan that deserves bipartisan support. Its success is crucial to the security of our nation and that of our allies. Despite some well-grounded concerns, the president and his national security team have said there is no arbitrary withdrawal schedule or exit date. Secretary of State Hillary Clinton was explicit, saying on Sunday that "we're not talking about an exit strategy or a drop-dead deadline." Defense Secretary Robert Gates said that the transition to Afghan responsibility "will be the same kind of gradual conditions-based transition, province by province, district by district, that we saw in Iraq," where the decision of when a district or province "is ready to be turned over to the Afghan security forces is a judgment that will be made by our commanders on the ground, not here in Washington." Equally important as more troops is the strategy of using these troops to provide security for the Afghan people, operating space for the accompanying "civilian surge" and an opportunity for Afghans to build their own governmental and security institutions. It will take time and great effort, but we can succeed by convincing friends, foes and our own forces that we are committed to success and will not fail; motivating and enabling the Afghan government and people to accept greater responsibility for their future; and helping Pakistan in its effort to put down its own Taliban threat and control its territory. The last goal is paramount. A destabilized Pakistan would threaten regional stability and ensure that Afghanistan could not be stabilized. Success will depend on proving to Pakistan that it has an enduring partner in the United States.Our strategy can succeed in Afghanistan if we are committed to succeeding, not just getting out.

Nobel lecture unlike others The traditional Nobel Peace Prize lecture, given every year at Oslo's modernist City Hall, does not usually include such words as: "I'm responsible for the deployment of thousands of young Americans to battle in a distant land. Some will kill, and some will be killed." President Obama accepted the Nobel for peacemaking by delivering an eloquent, often grim treatise on the nature and necessity of warfare. Anyone who doubts his commitment to the war in Afghanistan, which he has escalated with an "extended surge" of 30,000 new U.S. troops, should read a transcript of the Oslo speech. Hawks who suspected -- and doves who hoped -- that Obama was a secret pacifist will see that although he did not set out to be a "war president," he has accepted his fate. Obama's major speeches often lay out not just what position he is taking or what decision he has made, but also the thinking process that led him there. Listening to his lecture Thursday, I had the sense that we were hearing arguments and counterarguments that might have been running through his mind during the long policy review leading to the Afghanistan surge. A senior administration official, speaking not to be quoted by name, told me this week that the day Obama decided on the troop increase was the toughest so far for the president. The options, according to this official's account, were all bad. In his Oslo speech, the president gave a brief history of war -- from the "dawn of history" through the terrible conflicts of the 20th century to the messy "wars within nations" of today, in which "many more civilians are killed than soldiers; the seeds of future conflict are sown, economies are wrecked, civil societies torn asunder, refugees amassed, children scarred." His basic conclusion is that war is always tragic but sometimes necessary: "Negotiations cannot convince al-Qaeda's leaders to lay down their arms." And while he reiterated his support of multilateralism, he vigorously defended the role the United States has played since the end of World War II as a military superpower, acting in "enlightened self-interest." So the question about the use of military force is not if, but how and when.

Uphill fight for Wall Street crackdown President Barack Obama plans to use the one-year anniversary of Lehman Brothers' collapse to prod Congress to crack down on Wall Street. It may not do much good. Democrats have vowed to overhaul the nation's financial regulatory scheme this year, but stakeholders on all sides of the issue are feeling increasingly uncertain about the prospects for legislative action this fall. The war over health care reform may leave Obama without the political capital for another huge fight. The death of Sen. Ted Kennedy (D-Mass.) has set off a chain reaction of committee chairmanship changes that could leave a reform skeptic in charge of the Senate Banking Committee. And lawmakers - especially vulnerable House Democrats who've taken a tough vote on climate change and are looking ahead to a no-win vote on health care - may not be up for taking on another high-profile controversy for the administration. "It's once bitten, twice shy," said one financial industry lobbyist, summarizing sentiments he said he's heard from several members. In a press briefing Wednesday, Treasury Secretary Timothy Geithner said that it's "very important" that the federal government "move quickly" to ramp up consumer protections and create "a much more stable, resilient, less vulnerable financial system." But even supporters of regulatory reform say that's easier said than done. Their most immediate concern is whether Sen. Chris Dodd (D-Conn.) will decide to give up his chairmanship of the Banking Committee to take the Senate Health, Education, Pensions and Labor Committee, which his friend Kennedy chaired before his death last month. Dodd and the White House both want to create a new independent agency to oversee mortgages, credit cards and other financial products. But if Dodd gives up the Banking Committee chairmanship, next in line is Sen. Tim Johnson, an industry-friendly Democrat from South Dakota - and he may be inclined to nix the independent agency idea. If Dodd stays put as banking chairman, the fate of regulatory reform will still be dictated by the health care debate. "The problem right now is that nobody's talking about anything except health care," said a House Democratic aide. "So all this other [legislation] that we need to get done, that everybody knows is really important, it's hard to get any momentum on it because nobody's got the time." Health care legislation, along with climate change and other priority proposals, have "really just clogged up the legislative pipeline," said Tom Quaadman, head of the U.S. Chamber of Commerce's capital markets center. "And that's not only true for financial services reform, its true for the general legislative process." Lobbyists on all sides of the issue say regulatory reform hinges on the success or failure of health care reform legislation. If Democrats manage to pass a bill and claim victory, Obama will have plenty of mojo to apply to financial reform. But if health care fails or if what passes is so watered down that the White House can't claim a real win, there won't be much momentum for regulatory reform.

Wall Street's Mania for Short-Term Results Hurts Economy Their complaint is that the focus on short-term financial performance by investors, money managers and corporate executives has systematically robbed the economy of the patient capital it needs to produce sustained and vigorous economic growth. Their complaint is that the focus on short-term financial performance by investors, money managers and corporate executives has systematically robbed the economy of the patient capital it needs to produce sustained and vigorous economic growth.

House Passes Far-Reaching Bill Tightening Financial Rules The House on Friday approved a Democratic plan to significantly tighten federal regulation of Wall Street and the financial sector, advancing a far-reaching Congressional response to the financial crisis still reverberating through the economy. After three days of floor debate, the House voted 223 to 202 to approve the measure, which did not get a single Republican vote. It creates a new agency to oversee consumer lending, establishes new rules for transactions that contributed to the meltdown, and seeks to reduce the threat that one or two huge companies on the verge of collapse could bring down the economy.

You Be Obama Let’s say that you are President Obama. You’ve inherited a health care system that is the insane spawn of a team of evil geniuses from an alien power. Pay is divorced from performance. Users are separated from costs. Rising costs threaten to destroy your nation and everything you hold dear. Because you have a lofty perspective on things, you know there are basically two ways to fix this mess. There is the liberal way, in which the government takes over the health care system and decides who gets what. And then there is the conservative way, in which cost-conscious consumers make choices in the context of a competitive marketplace. You also know that these two approaches have one thing in common. They are both currently politically unsellable. Others have tried and perished. There are vast (opposing) armies arrayed against them. The whole issue is a nightmare. This brings you to the final stage, the scrum. This is the set of all-night meetings at the end of the Congressional summer session when all the different pieces actually get put together. You want the scrum to be quick so that the bill is passed before some of the interests groups realize that they’ve been decapitated. You want the scrum to be frantic so you can tell your allies that their reservations might destroy the whole effort (this is how you are going to get the liberals to water down the public plan and the moderates to loosen their fiscal rectitude). The scrum will be an ugly, all-out scramble for dough. You can probably get expanded coverage out of it. You can hammer the hospitals and get much of the $1.2 trillion to pay for the expansion. But you won’t be able to honestly address the toughest issues and still hold your coalition. You won’t get the kind of structural change that will bring down costs long-term. In the scrum, Congress will embrace the easy stuff and bury the hard stuff. Which is why you have MedPAC. That’s the Medicare Payment Advisory Commission that you want to turn into a health care Federal Reserve Board — an aloof technocratic body of experts that will make tough decisions beyond the reach of politics. You can take every thorny issue, throw it to MedPac and consider it solved.

Health-care help from the rookies Finally, there is some good news on the health-care front. The headlines went to a possible compromise on the contentious issue of the public option, but the greater victory may lie in less-publicized Senate action that might actually cut the costs of our impossibly expensive health-care system. This week, the outlines of such a change emerged in a package of amendments proposed by 11 freshman Democratic senators -- who have an abundance of common sense that more than compensates for their lack of seniority and renown. So they reached out to some of the major players outside Congress and, as several of those interest-group experts told me, did the hard work of exploring for themselves how the emerging legislation might be improved. The product of their exercise is a series of amendments that they argue will "broaden and accelerate efforts to encourage innovation and lower costs for consumers across the U.S. health care system." Their work was praised by many who helped develop it for recognizing that parallel changes must come in Medicare and Medicaid, as well as in the private sector of medicine. They also grasped that we need to make more robust use of field experiments in how to do that. This builds on a growing awareness of the fact that buried in the thousands of pages of the legislation passed by the House and pending in the Senate are authorizations for pilot programs testing a wide variety of changes to coordinate care and reduce costs. They have been there all along, but until recently were obscured by the fight over the public option, abortion and other headline-grabbing issues. These pilots would test such approaches as offering a comprehensive fee, rather than billing for each doctor or test when, for example, a heart attack or diabetes patient is first treated, or rewarding or penalizing a hospital depending on its rate of hospital-incurred infections.

Testing, Testing Health-care costs are strangling our country. Medical care now absorbs eighteen per cent of every dollar we earn. here are, in human affairs, two kinds of problems: those which are amenable to a technical solution and those which are not. Universal health-care coverage belongs to the first category: you can pick one of several possible solutions, pass a bill, and (allowing for some tinkering around the edges) it will happen. Problems of the second kind, by contrast, are never solved, exactly; they are managed. Reforming the agricultural system so that it serves the country’s needs has been a process, involving millions of farmers pursuing their individual interests. This could not happen by fiat. There was no one-time fix. The same goes for reforming the health-care system so that it serves the country’s needs. Much like farming, medicine involves hundreds of thousands of local entities across the country—hospitals, clinics, pharmacies, home-health agencies, drug and device suppliers. They provide complex services for the thousands of diseases, conditions, and injuries that afflict us. They want to provide good care, but they also measure their success by the amount of revenue they take in, and, as each pursues its individual interests, the net result has been disastrous. Our fee-for-service system, doling out separate payments for everything and everyone involved in a patient’s care, has all the wrong incentives: it rewards doing more over doing right, it increases paperwork and the duplication of efforts, and it discourages clinicians from working together for the best possible results. Knowledge diffuses too slowly. Our information systems are primitive. The malpractice system is wasteful and counterproductive. And the best way to fix all this is—well, plenty of people have plenty of ideas. It’s just that nobody knows for sure.

The Key to Fixing Health Care and Energy: Use Less Our health-care crisis and our energy crisis are complex dilemmas made of many complex problems. But our biggest problem in both health care and energy is essentially the same simple problem: we use too much. And in both cases, there's a simple explanation for much of the problem: our providers get paid more when we use more. Undoing these waste-promoting incentives — the "fee-for-service" payment system that awards more fees to doctors and hospitals for providing more services, and the regulated electricity rates that reward utilities for selling more power and building more plants — would not solve all our health-care and energy problems. But it would be a major step in the right direction. President Obama has pledged to pass massive overhauls of both sectors this year, but if Congress lacks the stomach for comprehensive reforms — and these days it's looking like Kate Moss in the stomach department — a more modest effort to realign perverse incentives could take a serious bite out of both crises. Everyone knows we use too much energy. Our addiction to fossil fuels is torching the planet, empowering hostile petro-states and straining our wallets. Meanwhile, studies by scientists at the Lawrence Livermore National Laboratory and elsewhere suggest that more than half of our energy is lost through inefficiencies, calculations that don't even include the energy we fritter away through wasteful behavior like leaving lights on or idling cars. We're on course to increase electricity usage another 30% by 2030, which could require trillions of dollars worth of new emissions-belching power plants, so it would be much better to eliminate the usage that doesn't add to our quality of life. By contrast, not everyone realizes that we use too much health care; most of us assume that more treatment is better, that the best doctors are the ones who do the most to us, that our health costs are the world's highest because our health care is the world's most thorough. But a slew of research by the Dartmouth Institute for Health Policy and Clinical Practice has found that as much as 30% of our annual $2 trillion–plus medical bill may be wasted on unnecessary care, mostly run-of-the-mill diagnostic tests, office visits, hospital stays, minor procedures and prescriptions for brand-name wonder drugs advertised on TV. Our soaring health spending is on course to bankrupt the Treasury — along with state and local governments, big and small businesses, and millions of families — so again, it would be nice to cut out the usage that doesn't make us healthier, and can even make us sicker.

A Share in Children's Success With the economic downturn squeezing budgets, college tuition and child care are becoming unaffordable for an increasing number of families. For many, the American dream is seeming more like, well, just a dream. But while you're dreaming, imagine a kid from rural Montana who, after scoring high on the SAT, has investors clamoring to finance his college education. Imagine General Motors investing in Detroit public schools as a long-term survival strategy. Imagine America's largest corporations and investors, after generations of putting fiduciary responsibility before social responsibility, suddenly finding the two to be inextricably intertwined. Imagine that we realize it is insufficient to be a stakeholder society; that we must also be a shareholder society. It seems far-fetched, but we could make this vision a reality by creating an equity market for human capital. It starts with a number: 17. A 17 percent compound annual growth rate, to be precise. That's the astronomical potential return on investment of educational intervention on young children, according to the Nobel laureate economist James Heckman. The return manifests itself in increased future earnings and reduced social costs. Today, that 17 percent compound annual growth rate is inaccessible to investors, but if people could issue shares of their future cash flow, it would unleash that potential, initiating a massive influx of investment in children.

Colleges Failing to Graduate Many If you were going to come up with a list of organizations whose failures had done the most damage to the American economy in recent years, you’d probably have to start with the Wall Street firms and regulatory agencies that brought us the financial crisis. From there, you might move on to Wall Street’s fellow bailout recipients in Detroit, the once-Big Three. But I would suggest that the list should also include a less obvious nominee: public universities. At its top levels, the American system of higher education may be the best in the world. Yet in terms of its core mission — turning teenagers into educated college graduates — much of the system is simply failing. Only 33 percent of the freshmen who enter the University of Massachusetts, Boston, graduate within six years. Less than 41 percent graduate from the University of Montana, and 44 percent from the University of New Mexico. The economist Mark Schneider refers to colleges with such dropout rates as “failure factories,” and they are the norm. The United States does a good job enrolling teenagers in college, but only half of students who enroll end up with a bachelor’s degree. Among rich countries, only Italy is worse. That’s a big reason inequality has soared, and productivity growth has slowed. Economic growth in this decade was on pace to be slower than in any decade since World War II — even before the financial crisis started. Congress and the Obama administration are now putting together an education bill that tries to deal with the problem. It would cancel about $9 billion in annual government subsidies for banks that lend to college students and use much of the money to increase financial aid. A small portion of the money would be set aside for promising pilot programs aimed at lifting the number of college graduates. All in all, the bill would help. But it won’t solve the system’s biggest problems — the focus on enrollment rather than completion, the fact that colleges are not held to account for their failures. “Crossing the Finish Line” makes it clear that we can do better. The first problem that Mr. Bowen, Mr. McPherson and the book’s third author, Matthew Chingos, a doctoral candidate, diagnose is something they call under-matching. It refers to students who choose not to attend the best college they can get into. They instead go to a less selective one, perhaps one that’s closer to home or, given the torturous financial aid process, less expensive.

Government-haters lose Here's a story you may have missed because it flies in the face of the dreary conventional wisdom: When advocates of public programs take on the right-wing anti-government crowd directly, the government-haters lose. This is what happened in two statewide referendums last week that got buried under all of the attention paid to the governor's races in Virginia and New Jersey. In Maine, voters rejected a tax-limitation measure by a walloping 60 percent to 40 percent. In Washington state, a similar measure went down, 57 percent to 43 percent. They lost in part because opponents of the so-called Taxpayer Bill of Rights measures (known as TABOR) did something that happens too rarely in the national debate: They made a case for what government does, why it's important and why cutbacks in public services can be harmful to citizens and the common good. The idea that most voters hate government has an outsize influence on the thinking of both parties. Republicans try to exploit this feeling; Democrats try to get around it. Only rarely do those who believe in active government take the argument head-on and insist that many of the things government does are necessary and, yes, good. The media almost never discuss what the sweeping dismantling of public services inherent in the rhetoric of the anti-government movement would mean in practice. It's far easier to replay footage from a few tea-party rallies over and over, and discuss some vague "mood" in the electorate.

The Betrayal So long as Budweiser, the King of Beers, was enthroned in this pleasant and nobly resilient middle American city, the blows of corporate condescension from the other giants who abandoned the Gateway Arch could be endured.But then, last year, came a kidney punch that still hurts: Anheuser-Busch, which had survived Prohibition and the micro-brew craze, was sold to a Belgian brewer. Bud was now Euro-beer. Next they’ll tell us Huck Finn had a taste for éclairs as he floated down the Mississippi.Board members, those solid citizens of St. Louis, made a pile in the merger that created the world’s largest brewer. But everyone else lost, including more than a 1,000 longtime employees given pink slips.It takes quite a bit for Americans to say that the social contract is broken, or look upon concentrated wealth as anything except a virtue.But we may have reached that breach. Our politics are not simply left and right, conservative and liberal. Never have been. Every once in a while, the great middle of independents are stirred to one side. My guess is, if the drift caused by recent actions continues, the United States will be consumed in the coming year by the politics of betrayal, and the winner will be ahead of the rage.Right now, a time when only 20 percent of Americans call themselves Republicans and Democrats are shrinking as well, the independents are disgusted with both parties. In large part, it’s because neither one seems to be on their side.

Re-framing Politics and Civic Discourse

Obama strategy: Marginalize critics President Obama is working systematically to marginalize the most powerful forces behind the Republican Party, setting loose top White House officials to undermine conservatives in the media, business and lobbying worlds. With a series of private meetings and public taunts, the White House has targeted the U.S. Chamber of Commerce, the biggest-spending pro-business lobbying group in the country; Rush Limbaugh, the country’s most-listened-to conservative commentator; and now, with a new volley of combative rhetoric in recent days, the insurance industry, Wall Street executives and Fox News. The campaign underscores how deeply political the Obama White House is in its daily operations — with a strong focus on redrawing the electoral map and discrediting the personalities and ideas that have powered the conservative movement over the past 20 years. This determination has manifested itself in small ways: This president has done three times as many fundraisers as President George W. Bush had at this point in his term. And in large ones: Beginning with their contretemps with Limbaugh last winter, Obama’s most important advisers miss few opportunities for public and highly partisan shots at his most influential critics. It’s too early to tell if the campaign is working, but it’s clearly exacerbating partisan tensions in Washington. “They won — why don’t they act like it?” said Dana Perino, former White House press secretary to Bush. “The more they fight, the more defensive they look. It’s only been 10 months, and they’re burning bridges in a lot of different places.” White House officials see things differently. They see an opportunity to corner critics of the president’s policies, especially on health care and financial regulations, and, in the process, further marginalize the Republican Party. Privately, officials have talked with relish for months of the potential to isolate the GOP as a narrow party of white, Southern conservatives with little appeal to independent-minded voters. This won’t happen overnight, but a combination of demographics — especially the explosion of a Hispanic population that has been voting for Democrats — the near-extinction of Republicans in the Northeast and the steady rightward drift of the GOP’s grass-roots activists at least makes it a plausible goal. So is the strategy working? White House officials point to a new ABC News/Washington Post poll to argue the answer is emphatically yes. Only 20 percent of those surveyed identified themselves as Republicans, the lowest in 26 years of asking the question. As bad as that number is, the news about independents is arguably worse. A staggering 83 percent of all independents surveyed said they don’t trust Republicans to make the right decisions.

Enduring Partisan Divide Stokes Skepticism of Washington Americans have concluded within the past year that their financial firms and auto companies don't work very well. Many now seem to be drawing the same conclusion about their government, which, ironically, has been charged with saving those financial firms and auto companies. The evidence for that conclusion arrives in the form of a new Wall Street Journal/NBC News poll, which finds Americans holding in low esteem the government -- and, in fact, much of Washington. To some extent, that's natural in a country weary of war and still scared by the economy. But the level of skepticism -- even cynicism -- is high by historical standards and surprising given the extent to which whole swaths of the nation have leaned on their government for a bailout in recent months. What accounts for this sentiment? Maybe a clue can be found in new congressional voting statistics showing that partisanship is just as entrenched in Washington in the age of Obama as it was before. In the Journal/NBC News poll, Americans were asked how much of the time they trust the government in Washington to do the right thing; 65% said "only some of the time" and a stunning 11% said "never." Various polling organizations have been asking that question for decades, and they've rarely found that level of skepticism about government. It may be telling that the last time the numbers were even comparable was in the midst of the last great recession, in 1982. So is it just the recession, or something else going on? Wasn't last year's election victory by Democrats, combined with a virtual national consensus that the government needed to step in to stem the bleeding caused by the economic meltdown, supposed to signal a renewed appreciation for government's role in America? Maybe not. Here's a not-so-sophisticated theory: Americans certainly want their politicians to debate strenuously about important issues -- the poll's findings confirm that -- but they also want them, at the end of the day, to figure out a way to compromise, come together and solve problems. That's particularly so in times of crisis. For most of the past two decades, though, they've mostly seen the arguing part, not the coming together part. For the past several years, voting patterns tracked by Congressional Quarterly have confirmed that Congress is locked in a deep, partisan divide in which Republicans and Democrats rarely reach across party lines.

The Great American Ideological Crackup The whole thing feels like the last war, or a song that has not worn well, or a guest who has overstayed his welcome. The White House–vs.–Fox News mini-saga belongs to an era that effectively ended last fall, when President Bush radically enlarged the role of the federal government in the economy and Obama won the presidency. It was clear then, and is even clearer now, that the issues which long defined the right-left divide (hawkishness abroad, a limited role for government at home) are in spectacular disarray. We have been here before. The analogous moments that most easily come to mind—moments of economic turmoil and political realignment—are 1933 and 1981. And so the 44th president has the chance—only the chance; success is not at all certain—to follow in the tradition of the two men who defined politics in the last 70 years: Franklin Roosevelt and Ronald Reagan. FDR's transformed the role of the state, shaping reality for presidents from Truman to Carter. Then, after 1981, the eponymous Reagan Revolution politically replaced the ethos of the New Deal. Bill Clinton's announcement of the death of big government was, in its way, the apogee of Reaganism. But we are now living in a post-Roosevelt, post-Reagan universe. What comes next will not be post-partisan, because faction is an intrinsic human impulse. Nor, for the same reason, will it be post-ideological. The question, rather, is what new ideologies—or what new permutations of perennial ideological impulses—will form to order our politics in the face of asymmetrical warfare, religious extremism, and an intensely globalized economy. That is a developing story that no cable channel is likely to cover very well.

Self-Image and Party Politics I have to say, I’m baffled by what the political parties are doing. The Republicans are behaving like a party with a death wish. They have a golden opportunity to make substantial inroads in Congress next year and set the stage for a possible White House comeback in 2012. But as you point out, a rigid hard-right strategy that undermines G.O.P. candidates who might appeal to moderate and independent voters is exactly the wrong way to proceed. I don’t get it. The Democrats have their problems too. And if anything, their problems are deeper because they are intellectual, not merely partisan. The Obama administration has sent the country off to the right. The president is creating a counter-realignment. Voters don’t identify with the G.O.P. but the number of people who call themselves conservative is now near an all-time high. Meanwhile, Bill Galston, who served in the Clinton administration and is one of the smartest political observers I know, sums up the public mood nicely in an article in The New Republic: Far more independents (35 percent) consider themselves conservative than was the case a year ago (only 29 percent). These findings would be less compelling if they were not linked to conservative shifts on specific issues — but they are, and the Gallup organization enumerates a considerable list. The disenchantment I’m hearing from people who wholeheartedly supported Obama, and not just liberals, is palpable and growing. It’s early, but the big changes people were hoping for have not materialized, and voters don’t seem to be in the mood now for initiatives — even necessary ones — that will cost a lot of money. The Democrats were given a very strong political hand when Obama took office, and they have not played it well.

Chamber Chief Battles Obama Agenda  With President Barack Obama bidding to overhaul the health-care system, tighten bank oversight and make industries pay for their greenhouse-gas emissions, some trade-association chiefs have decided to compromise with the party in power. Not Thomas Donohue. On many of Mr. Obama's priorities, the president and chief executive of the U.S. Chamber of Commerce is working to defeat the administration—delighting some members, causing some to quit and sparking a furious reaction from the White House and left-wing activists. In the process, he has made the Chamber one of Mr. Obama's most visible opponents.On climate change, Mr. Donohue's group says warmer temperatures could help by reducing deaths related to cold weather.On health care, a Chamber ad says Democrats' approach will kill jobs and slow growth. On financial regulation, one ad says the administration's plan will hurt small businesses, "even the small butcher"—a line that prompted Mr. Obama to denounce the Chamber from the presidential podium this month. Now, Mr. Donohue aims to spend $20 million annually for several years advocating free-market policies such as open trade and less regulation, taking aim at much of the Democrats' agenda. The public-relations campaign is the biggest undertaking in the Chamber's 100-year history. A question hanging over all this is whether Mr. Donohue's aggressive stance will work better than compromise. The Chamber, which says it has 300,000 dues-paying members, has become a political target in Washington's partisan atmosphere. Though Mr. Donohue has strong supporters, a vocal minority of companies, including Apple Inc. and Nike Inc., have recently quit the Chamber or its board.

The Obama-Bush Connection The common wisdom—a phrase 41 uses more often than "conventional wisdom"—is that Obama is an heir of 41's style, particularly in the diplomatic realm. The storyline is clear: Obama is more like George W. Bush's father than George W. Bush ever was. That argument is at best incomplete and at worst wrong. The photograph of the two men, taken from the back (Ike is carrying his hat), shoulder to shoulder, embodies a truth that remains relevant now: for all the sound and fury of the arena, on big issues American presidents tend to have more in common with one another than one might at first think. There is a presidential character intrinsic to the office. Part of this is because what seemed black and white while you were running looks a lot grayer once ultimate power is yours, and part of it is that the country changes presidents more frequently than the country changes itself. We are a center-right nation politically and culturally, which means we value moderate governance—and we punish those who stray too far one way or the other.

What Independents Want Liberals and conservatives each have their own intellectual food chains. They have their own think tanks to provide arguments, politicians and pundits to amplify them, and news media outlets to deliver streams of prejudice-affirming stories. Independents, who are the largest group in the electorate, don’t have any of this. They don’t have institutional affiliations. They don’t look to certain activist lobbies for guidance. There aren’t many commentators who come from an independent perspective. Independents are herds of cats who find out what they think through a meandering process of discovery. Right now, independent voters are astonishingly volatile. Democrats did poorly in elections on Tuesday partly because of disappointed liberals who think that President Obama is moving too slowly, but mostly because of anxious suburban independents who think he is moving too fast. If I were a politician trying to win back independents, I’d say something like this: When I was a kid, I had a jigsaw puzzle of the U.S. Each state was a piece, and on it there was a drawing showing what people made there. California might have movies; Washington State, apples; New York, fashion or publishing. That puzzle represented an economy that was diverse and deeply rooted. We’ve lost that. First Wall Street got disproportionately big, then Washington. It’s time to return to fundamentals. No short-term fixes. Government should do what it’s supposed to do: schools, roads, basic research. It should not be picking C.E.O.’s or setting pay or fizzing up the economy with more debt. It should give people the tools to compete, not rig the competition. Lines of restraint have dissolved, and they need to be restored.Independents support the party that seems most likely to establish a frame of stability and order, within which they can lead their lives. They can’t always articulate what they want, but they withdraw from any party that threatens turmoil and risk. As always, they’re looking for a safe pair of hands.

Tea partiers turn on each other After emerging out of nowhere over the summer as a seemingly potent and growing political force, the tea party movement has become embroiled in internal feuding over philosophy, strategy and money and is at risk of losing its momentum. The grass-roots activists driving the movement have become increasingly divided on such core questions as whether to focus their efforts on shaping policy debates or elections, work on a local, regional, state or national level or closely align themselves with the Republican Party, POLITICO found in interviews with tea party organizers in Washington and across the country. Many of these differences date to the movement’s beginnings last winter in an outpouring of anger about the huge increases in government spending enacted by President Barack Obama and the Democratic Congress. But they were overshadowed by the initial explosion of activism that culminated during the congressional town hall meetings in August. Now the disagreements and the sense of frustration they have engendered could diminish the movement’s potential influence in state and national politics. The organizational chaos — combined with a widening apathy at the edges of the movement — has produced a growing consensus among local, state and national tea party leaders that for the movement to evolve from the loose conglomeration of fired-up activists who mobilized this summer to register their dissatisfaction with Obama and Congress at town hall protests and marches across the country into a sustainable bloc with the power to shape the GOP and swing elections, it will require the emergence of a national leader, group or structure.

 'Filibusted' In their quest to thwart President Obama, Republicans do not fear the hobgoblin of consistency. For much of this decade, Sen. Jeff Sessions of Alabama, now the top Republican on the Judiciary Committee, led the fight against Democratic filibusters of George W. Bush's judicial nominees. He decried Democrats' "unprecedented, obstructive tactics." To have Bush nominees "opposed on a partisan filibuster, it is really wrong," he added. He demanded they get "an up-and-down vote." He praised Republican leaders because they "opposed judicial filibusters" and have "been consistent on this issue even when it was not to their political benefit to do so." So now a Democratic president is in the White House and he has nominated his first appellate judicial nominee, U.S. District Judge David Hamilton. And what did Sessions do? He went to the floor and led a filibuster. "I opposed filibusters before," the Alabaman said with his trademark twang. But in this case, he went on, "I don't agree with his judicial philosophy. Therefore, I believe this side cannot acquiesce into a philosophy that says that Democratic presidents can get their judges confirmed with 50 votes." Uh-huh. Ten of the Senate's 40 Republicans, attempting some measure of consistency, parted ways with Sessions and voted with Democrats in a resounding 70 to 29 vote to break the filibuster. But the rest abandoned their deeply held views of just a few years ago. There was, for example, Minority Leader Mitch McConnell (Ky.). Back in 2005, he demanded "a simple up-or-down vote" for nominees and urged the Democrats to "move away from advise and obstruct and get back to advise and consent." He declared that Democrats wanted to "take away the power to nominate from the president and grant it to a minority of 41 senators." On Tuesday, McConnell voted to sustain the filibuster.

The GOP's no-exit strategy But it's also time to start paying attention to how Republicans, with Machiavellian brilliance, have hit upon what might be called the Beltway-at-Rush-Hour Strategy, aimed at snarling legislative traffic to a standstill so Democrats have no hope of reaching the next exit. We know what happens when drivers just sit there when they're supposed to be moving. They get grumpy, irascible and start turning on each other, which is exactly what the Democrats are doing. Republicans know one other thing: Practically nobody is noticing their delay-to-kill strategy. Who wants to discuss legislative procedure when there's so much fun and profit in psychoanalyzing Sarah Palin? The rules have changed. The extra-constitutional filibuster is being used by the minority, with extraordinary success, to make the majority look foolish, ineffectual and incompetent. By using Republican obstructionism as a vehicle for forcing through their own narrow agendas, supposedly moderate Democratic senators will only make themselves complicit in this humiliation.

They Chose Celebrity Before the 2008 election, almost nobody outside Alaska and Arkansas had heard of Sarah Palin or Mike Huckabee. But in a long and crowded campaign season, they were the only Republican politicians who inspired any genuine enthusiasm. And both had the same Achilles’ heel: They seemed unready for high office, and owed their appeal more to personality than to substance. This meant that both faced the same post-election choice. Did they want to take their newfound eminence seriously? Or did they want to cash in on their celebrity? So far, they’ve chosen celebrity instead But they were the wrong moves if either wanted to become president someday. It’s possible to be a celebrity and a serious politician at the same time: Barack Obama’s career proves as much. But Obama’s celebrity status is frequently a political liability, and he’s (usually) wise enough to know it. That’s why he plays the wonk as often as he plays the global icon. For now, no Republican leader projects a similar level of seriousness. Late in the Bush years, it was easy to dismiss conservatism as brain-dead. Among policy thinkers, that isn’t true anymore: the advent of Obama seems to have provided just the jolt that right-of-center wonks needed. But innovative proposals are useless without politicians willing to champion them. True, these ideas won’t sell millions of books, or excite the crowd on Huckabee’s talk show. But they’re what the Republican Party needs if it’s going to be more than just a brake on liberalism’s ambitions. And they’re what voters are going to be looking for, in 2012 and beyond, as proof that conservatives can be trusted once again. This means that there are substantial political rewards awaiting the politician who becomes the voice of an intellectually vigorous conservatism. It probably won’t be Mike Huckabee or Sarah Palin. If Republicans are lucky, though, it will be somebody who shares their charisma — but who prefers the responsibilities of leadership to the pleasures of celebrity.

Republicans Eye the Tiger of Populism Via Oprah, Facebook and a bus trip that resembled a campaign swing more than a book tour, Sarah Palin reappeared on the national stage last week, minus her governorship and running-mate status, but with a new role as principled “rogue” to add to her previous credits as plain-spoken patriot and hockey mom. Whatever else it said about America, her return brought into focus a big question for Republicans as they watched the intense reactions she generated: To what extent should they try to energize their electoral prospects by hitching themselves to the powerful but volatile strain of populism — characterized by anti-elitism and deep skepticism of government — that Ms. Palin has come to embody? The renewed potency of populist conservatism has been on display since the summer, when health care town hall meetings became a forum for frustrated voters, angry at President Obama and Congressional Democrats over the issue of government expansion, and also at Republicans suspected of not fighting aggressively enough. But even as conservatives exult in Mr. Obama’s declining job approval ratings, the drive for ideological purity inspired by the populists of the right has left many elected Republicans nervous and concerned. Just ask Senator Lindsey Graham of South Carolina or Gov. Charlie Crist of Florida, rock-solid Republicans who now are accused of being insufficiently ideological. Consider too the recent election in upstate New York, in which a dispute between conservatives and moderates cost Republicans a House seat they had held for generations. At a time when grass-roots anger is being fed by government bailouts of powerful Wall Street firms, Republicans could find themselves as politically vulnerable as the Democrats now seem. It was, after all, President Bush who initiated the rescues on Wall Street in 2008. Even so, the issues now animating tea partiers and other grass-roots activists reflect the Republican Party’s core values: less government spending, lower taxes, lighter regulation. The trick, some Republicans said, is to guide populists’ energies toward an optimistic agenda built on those themes. “If we don’t take this anger and frustration, as legitimate as I believe it is, and channel it into a good, a positive, then we won’t be successful,” said Rick Santorum, a former Republican senator from Pennsylvania.

President and the People: Decision-making Processes & Perspectives

The PDQ Presidency Obama had been secretly plotting his transition since the spring of 2008. He enjoyed reciting the line from the 1972 movie The Candidate in which Robert Redford turns to an aide just after winning the election and mournfully asks, "What do we do now?" Obama insisted that he would not be that man. He had launched a massive transition project involving more than 200 policy wonks offering advice. Everyone knew Obama intended to get going quickly after the election. They just didn't expect that "quickly" to Obama meant hours, not days. Obama's leadership style falls somewhere between Bill Clinton's wide--ranging deliberations and George W. Bush's snap judgments. His ability to integrate complex facts, summarize competing arguments, then announce a crisp decision impressed the more experienced officials around him, including Joe Biden. After one conference call about the economy in early December, the vice president–elect and two-time presidential candidate told his aide Ron Klain, "We got this ticket in the right order." Critics say that Obama's hurry to inject money into the economy resulted in wasteful spending. But contrary to public perception, the vast bulk of stimulus spending went to worthy programs, including long-neglected infrastructure projects like roads, bridges, and local sewage systems. It also included one of the largest tax cuts ever. But here Obama was hampered by political naiveté. Instead of holding his cards close, the president-elect offered huge tax cuts from the get-go—giving Republican critics what they wanted nearly three weeks before taking office. "He should have said, 'Here's the thing: no tax cuts,' " says close friend Marty Nesbitt. "And then he could have said, 'OK, you make some solid arguments—OK, it's $280 billion.' " (The final bill called for $288 billion.) That way, Obama could have made the tax cuts a useful bargaining chip, Nesbitt says, though he doesn't believe the Republicans were ever negotiating in good faith.

The Recession’s Over, but Not the Layoffs Has Mr. Obama lost his oratorical touch? Is the magic finally beginning to fade? Does the White House rely too heavily on his skills on the stump to advance his priorities? It may be too soon to reach such conclusions. The Democrats who lost last week, after all, had fatal flaws all their own. But the results do suggest that Mr. Obama’s addresses these days may not resonate quite the way they did. Speeches that once set pulses racing now feel more familiar. And if that remains the case heading into next year, it could make it more difficult for the Democrats’ own Great Communicator to promote his program and carry along allies in crucial midterm elections. Speechmaking as a president often presents a sharper challenge than it does on the campaign trail. The audience is different, the desired goals are different, the platform is different. Selling another candidate, as Mr. Obama tried to do for Jon Corzine in New Jersey and Creigh Deeds in Virginia, is invariably harder than selling yourself. And pushing policies requires more explanation than inspiration. “The difference now is it’s much more difficult to have to explain complicated policies consistently day in and day out,” said Josh Gottheimer, a speechwriter for President Bill Clinton who now teaches the history of presidential speechwriting and is working on a book on the subject. “The stakeholders have changed. Congress matters a lot more. When you’re on the campaign trail, they don’t matter as much.” Unlike Mr. Bush, who recognized his limitations as a public speaker, Mr. Obama and his team have enormous faith in his capacity for communicating with the American people. Mr. Obama’s aides point to several such moments this year — his first address to a joint session of Congress as he was advocating a large spending package to stimulate the economy, his speech at Georgetown University laying out his vision of a “new foundation” for a post-recession nation, his Cairo speech, his commencement address at Notre Dame where he tried to bridge the divide over abortion and his September return to Congress to argue for his health care plan. While Mr. Gerson contends that months of Obama speeches have not erased deep public concerns with his health care plan, Geoff Garin, a Democratic strategist, called the address to Congress “the best policy address by a president since Lyndon Johnson talked about the Voting Rights Act in 1965.” Following an August dominated by attacks on the health care plan, Mr. Garin said Mr. Obama “was able to lift a debate that had got stuck in the mud up to a much higher place and let Obama and supporters of health care reform retake the high ground.” But the risk for any president is that at some point the public begins to tune out.

Hope Springs Eternal From time to time the American people participate in a mass delusion about how their government works. Such a delusion took place exactly a year ago, when a 47-year-old African-American who had once been accorded little chance of prevailing was elected president of the United States. History will judge Barack Obama over the long haul. But we've learned something in the short term that is simple, obvious, and has less to do with him than with the Founding Fathers. This is a country that often has transformational ambitions but is saddled with an incremental system, a nation built on revolution, then engineered so the revolutionary can rarely take hold. placeAd2(commercialNode,'bigbox',false,'') Checks and balances: that's how we learn about it in social-studies class, and in theory it is meant to guard against a despotic executive, a wild-eyed legislature, an overweening judiciary. And it's also meant to safeguard the rights of the individual; as James Madison, president and father of the Constitution, once said, "I believe there are more instances of the abridgement of freedom of the people by gradual and silent encroachments by those in power than by violent and sudden usurpations." But what our system has meant during the poisonous partisan civil war that has paralyzed Washington in recent years is that very little of the big stuff gets done. It simply can't. This president promised to tackle the big stuff, swiftly, decisively, and in a fashion about which he was unequivocal, and voters took him at his word a year ago. For those who yearned for a progressive agenda that would change the playing field for the disenfranchised, he promised to do good. So far he has mainly done government, which overlaps with good too little in the Venn diagram of American public policy. It's best summed up by the historian Doris Kearns Goodwin. She served as an aide in the Johnson White House, and her voice still carries the vibrato of excitement when she recalls that time. "LBJ promised the members of Congress that they could someday say they'd made history," she says. "This Congress has never known the joy of that accomplishment. They haven't ever been part of an institution that moves collectively to change history for the benefit of the American people." She also notes that the presidents who have made real change have always done so in the same way: "Each of them had the country pushing the Congress to act, the people and the press both. The pressure has to come from outside." So if the American people want the president to be more like the Barack Obama they elected, maybe they should start acting more like the voters who elected him, who forcibly and undeniably moved the political establishment to where it didn't want to go. After all, in our system, even great, audacious change is never as audacious as it seems: calls for a national health-care system can be traced all the way back to Roosevelt—Teddy Roosevelt, in 1912. When Sen. Olympia Snowe, Republican of Maine, broke with her party to vote a health-care bill out of committee, she said, "When history calls, history calls." And it's not asking for baby steps.

Reactions, Judgment & Judgments and Assessments

The Tenacity Question Today, President Obama will lead another meeting to debate strategy in Afghanistan. He will presumably discuss the questions that have divided his advisers: How many troops to commit? How to define plausible goals? Should troops be deployed broadly or just in the cities and towns? For the past few days I have tried to do what journalists are supposed to do.I’ve called around to several of the smartest military experts I know to get their views on these controversies. I called retired officers, analysts who have written books about counterinsurgency warfare, people who have spent years in Afghanistan. I tried to get them to talk about the strategic choices facing the president. To my surprise, I found them largely uninterested. Most of them have no doubt that the president is conducting an intelligent policy review. They have no doubt that he will come up with some plausible troop level. They are not worried about his policy choices. Their concerns are more fundamental. They are worried about his determination. The determination vacuum affects the debate in this country, too. Every argument about troop levels is really a proxy argument for whether the U.S. should stay or go. The administration is so divided because the fundamental issue of commitment has not been settled.

The Analytic Mode Many Democrats are nostalgic for Barack Obama’s 2008 presidential campaign — for the passion, the clarity, the bliss-to-be-alive fervor. They argue that these things are missing in a cautious and emotionless White House. But, of course, the Obama campaign, like all presidential campaigns, was built on a series of fictions. The first fiction was that government is a contest between truth and error. In reality, government is usually a contest between competing, unequal truths. The second fiction was that to support a policy is to make it happen. In fact, in government power is exercised through other people. It is only by coaxing, prodding and compromise that presidents actually get anything done. The third fiction was that we can begin the world anew. In fact, all problems and policies have already been worked by a thousand hands and the clay is mostly dry. Presidents are compelled to work with the material they have before them. The fourth fiction was that leaders know the path ahead. In fact, they have general goals, but the way ahead is pathless and everything is shrouded by uncertainty. All presidents have to adjust to these realities when they move to the White House. The only surprise with President Obama is how enthusiastically he has made the transition. He’s political, like any president, but he seems to vastly prefer the grays of governing to the simplicities of the campaign. The election revolved around passionate rallies. The Obama White House revolves around a culture of debate. He leads long, analytic discussions, which bring competing arguments to the fore. He sometimes seems to preside over the arguments like a judge settling a lawsuit. His policies are often a balance as he tries to accommodate different points of view. He doesn’t generally issue edicts. In matters foreign and domestic, he seems to spend a lot of time coaxing people along. His governing style, in short, is biased toward complexity. The advantage of the Obama governing style is that his argument-based organization is a learning organization. Amid the torrent of memos and evidence and dispute, the Obama administration is able to adjust and respond more quickly than, say, the Bush administration ever did.

The disadvantage is the tendency to bureaucratize the war. Armed conflict is about morale, motivation, honor, fear and breaking the enemy’s will. The danger is that Obama’s analytic mode will neglect the intangibles that are the essence of the fight. It will fail to inspire and comfort. Soldiers and Marines don’t have the luxury of adopting President Obama’s calibrated stance since they are being asked to potentially sacrifice everything. Barring a scientific breakthrough, we can’t merge Obama’s analysis with George Bush’s passion. But we should still be glad that he is governing the way he is. I loved covering the Obama campaign. But amid problems like Afghanistan and health care, it simply wouldn’t do to give gauzy speeches about the meaning of the word hope. It is in Obama’s nature to lead a government by symposium. Embrace the complexity. Learn to live with the dispassion.

Opinion: Obama defines the use of war in an age of terror I’ve covered the wars in Iraq and Afghanistan and many insurgencies and acts of terrorism for the last 15 years and I have never heard anyone more clearly and powerfully articulate what it means to conduct a “just war” or to strive for a “just peace” amid the dark and shadowy struggles against terrorism, a struggle made more ominous by the nuclear threat. Despite the soaring rhetoric, a loud irony echoed inside the hallowed halls of Oslo City Hall as Obama was made a Nobel Prize laureate. What made the speech more than just lofty oratory was the way in which he presented a list of deliverables that he will need to achieve to deserve the award he has already received. And what made it resonant was the way in which he captured the hope and hard work that goes on every day in every corner of the world in trying to work toward peace:

  • A Noble Lecture How does a rookie President, having been granted the Nobel Peace Prize, go about earning it? Well, he can start by giving the sort of Nobel lecture that Barack Obama just did, an intellectually rigorous and morally lucid speech that balanced the rationale for going to war against the need to build a more peaceful and equitable world.
  • War and peace Obama's eloquent, often grim treatise on the nature and necessity of warfare
  • An American triumph at Oslo Obama's Nobel speech marked the moment he became a leader.

The Obamas’ Marriage In the end, what seems more unusual than the Obamas’ who-does-what battles — most working parents have one version or another — is the way they turned them into a teachable moment, converting lived experience into both a political message and what sounds like the opposite of standard political shtick. “If my ups and downs, our ups and downs in our marriage can help young couples sort of realize that good marriages take work. . . .” Michelle Obama said a few minutes later in the interview. The image of a flawless relationship is “the last thing that we want to project,” she said. “It’s unfair to the institution of marriage, and it’s unfair for young people who are trying to build something, to project this perfection that doesn’t exist.”  IN THE HISTORYof Barack Obama, his landslide loss against Rush is now regarded as a constructive political failure, the point at which he shed some early dreaminess and hubris and became a cannier competitor. For the Obamas, this period was also one of constructive personal failure, forcing them to reckon with their longstanding differences. Michelle Obama accepted that she was not going to have a conventional marriage, that her husband would be away much of the time.

Words that matter One of the things that sets Barack Obama apart from most politicians is how much can be learned from listening to his speeches. The president is sometimes criticized for the volume of his public appearances, and, in truth, he is out there orating a lot. But we learned in the course of his campaign -- and it was reinforced in this first year of his term -- that it's a mistake to think of these talks as routine. They have no equal in providing insights into the way his mind works and the context that guides his decisions. The striking thing is the consistency with which he places concrete actions into the broadest historical or philosophical setting, and how much he is influenced in his decision-making by the reach of his intellectual exercise. In Oslo, the obvious challenge was to explain why a president leading a nation engaged in two wars should be singled out for the peace prize. Rather than avoiding the issue or burying it in cliches, Obama took it head-on, beginning in the first minute of his speech and devoting half the text to that question. He focused on the meaning in today's world of the ancient concept of "the just war" and found himself arguing that, contrary to the wishes of those who awarded him this prize, "We will not eradicate violent conflict in our lifetimes. There will be times when nations -- acting individually or in concert -- will find the use of force not only necessary but morally justified." Afghanistan is such a case, he said, as was the Persian Gulf War to repulse Iraq's invasion of Kuwait. But he made no such claim for the war in Iraq that George W. Bush launched, and he insisted that the many moral compromises made by the previous administration in the war on terrorism were unjustified as well.

December 10, 2009

Hard Problems, Deep Changes, Bitter Fights: Framework to Power Politics

The changes just keep coming fast and hard. Last week saw the announcement of the new Afghanistan strategy, this week a major compromise in the Senate on the Healthcare bill, financial reform continues to make progress, on both a legislative and regulatory base and last Friday saw job numbers that were much better than anyone anticipated. Simultaneously but farther out of the limelight we continue to evolve our Foreign Policy, keynoted today by the award of the Nobel Peace Prize to the President, and on Education and Energy. Both of which have also seen significant strides. At the same time, while people are feeling more comfortable, in some quarters even complacent and ready to return to business-as/was-usual (we're particularly thinking of Wall St. there!) most people are still in a bit of shock and very unsure of what the brave new world we'll look like.

After the last three posts on specific policy problems (Healthcare, the Economy and Financial Reform) preceded by several posts riffing on the related themes of Veterans Day, Ft. Hood and coping with change and stress, we're going to pop up a couple of levels. In that pop up we want to frame the approach to roadmap where we're at and going, do a little survey of the changes swirling around us (mostly in the readings) and talk about change management. Along the way we hope this helps you get oriented, sort things into buckets but see how they are related and agree that there's actually some method to our madnesses. In an ideal world we'd even like to argue that our approach works fairly well. Just an an example our Healthcare analysis pretty well captures what's going on and the pros and cons while our early October assessment of what Afghanistan strategy should be bears more than a passing resemblence to last week's announcement had to say. That's either encouraging and confirmatory or really.....really scary. In effect we're picking back up on a theme we set in an earlier post on change being hard and the breadth and depth and number of changes we needed to adapt to this Brave New world. In fact you might want to go back and review it as it lays out some useful background and machinery (Change is Hard: Policy, Politics, Partisans and Gumption). You might even say that one has led to this one, if you like.

Framing Complex Problems: the Digital vs. the Organic

Let's pop way/weight up the stack if you'll bear with me. When we deal with complex real world problems we're almost always wrestling with complex issues that involve multiple disciplines, perspectives and datasets. The problem is that the world doesn't care. Several years back a sketch and performance artist put on a childrens show at the Berkeley Livermore Labs telling an ancient Indian creation myth and illustrated it with her own on the spot drawings, using her own organic colors made from natural materials. She explained that she did that because natural colors were so much richer because they were complex compounds of many elements instead of the chemically derived industrial colors we tended to use from Industrial processes. Looking back on her drawings that had a richness and complexity unmatched by the typical commercial color. Ever since I've thought of the argument as the digital vs. the analog theory, or the organic vs. the artificial. Ever wonder why electronic synthesizers aren't used much any more? Or why we tried digital dashboards but found them over-precise but hard to read and therefore inaccurate?

The accompanying graphic is the best illustration I've ever seen of how complex real-world problems are organic; composed of many elements which must all be addressed to deal with the problem at hand. Normally we drift along and only deal with the tip of one particular pipette stem. Incremental change in other words. The result of drifting with incremental tunings of problems is that, sooner or later, they shift from being minor to major. And we're facing major problems on each of several areas. from Foreign Policy to the Economy to Domestic issues. And the world doesn't care that we'd like to think about them one specialty at a time. It's organic, a whole and insists on serving us with the whole bouillabaisse with everything thrown into the stew. At some point we need to wrestle with all the parts to get to the wholes.

 

Re-Introducing the Socionomic Framework

That means that for problems taken as a whole and for each particular problem we need a fairly powerful framework to tie things together, organically. It's always amused me, speaking somewhat loosely, that analysts don't do history but historians don't do analysis. But organic things evolve from where they were to where they are. That means today's problems are rooted in yesterday's history, no matter what issues you're dealing with. Which means that your "framework" has to be tested against history and current events.

Our approach to thinking about current events tries to look at the whole "Socionomic Ecology" and identify the parts, their linkages and dynamics and see things as a whole. If, for example, you look back at the Afghanistan assessment you'll find a direct application of this framework, or for the Middle East as a whole. Of course it needs to be adapted and customized. And often ones needs to build a new framework that captures the specifics of a particular problem, as we tried to do with Healthcare. The chart tries to represent how we view the parts and their inter-connections and whether you're talking about historical developments in different societies or current relations with China or nation-building in Afghanistan or Iraq we think they are all firmly rooted in this graphic. You might want to take a moment or so to give it some study. Better yet take it away with you and start reading the news or history or whatever and see if it works for you.

Did you know for example that fishing boats in the Eastern Mediterranean still have eyes painted on them - similar to what you can see on 2500 year old Greek pottery? Or that the practice data back 2500 years before that to ancient religious beliefs and practices rooted in religions that are no longer practiced per se but are firmly embedded as values and concepts in most modern religions? In our day to day lives we deal with the gyrations of politics and economics and make our decisions based on our values and culture. So our lives are governed by the blue circuit and the turqoise (light blue) circuits but we decide using the inheritances of the green circuit. All of which is rooted in the accumulated foundations we've put in place over millenia, our Institutions. Which can be as formal as the legal system and the supreme court or as informal as the question of who opens the door for whom, or paints which boats with what graphics. The opening scene in the Da Vinci Code gets it exactly right when it traces modern iconography back to ancient roots - yet those roots change, morph and adapt as well.

The Inventory of Challenges, Changes and Choices & Choosers

Like we said, the reach and range of problems we're wrestling with is huge but we've no choice. For each of the problems we need an organic framework that inventories and relates all the piece-parts and links them together. We also need to understand where we're at, where we need to go and what needs to be done to get there. One framework(s) is this one which lists out the major policy challenges we faced and are facing. It also, it two variations, lists out some of the other issues we have to deal with to address them. The original version of that chart dates back a few years but the red line is an accurate depiction of our status while the yellow tells us where we need to go in the near future. We're not going to get back to health though until we're on the other side of "5s"!

By-the-way that inventory and assessment is about as far from casual as we could manage and reflects our examination of each of those problems seperately and all together. Rather than make you hunt thru them we collected all the previous blog essays into a white paper and published it on Scribd: Crisis in the Public Square: Thinking About Futures, Policy and Politics. That's our best definition of where we're at, what we need to do and how we need to go about it including attitudinal and related changes, e.g. in politics and civil respect.

The graphics illustrate two other major aspects of tackling huge problems. First off good intentions count for nothing without good works. And without understanding the strategies, mechanisms, actions and resources policy is mere intention. At the end of the day there is no substitute for understanding how a buzz saw works (call that the lumber factory factor). The second sub-chart raises the other issue - lots of folks are wedded to the ways things are because they've invested decades in tuning the incremental changes to their own goals and needs. If you're going to change you need to under each of the major Players, their Positions and Interests and their Power, or clout. So we call that chart the 4P (Policy, Player, Position, Power) chart. Think of it as the layout diagram, or at least the sketch for how to build it, for each of the changes. Put another way it's the layout of the Sausage-factory (a lable we started using months ago which we've noticed was picked up fairly widely and is now in common re-use - maybe somebody's reading this blog after all :) ).

The Bigger the Change the Harder the Climb

We're in a world where incremental change on one major problem won't cut it. Instead we need to address every single one of those listed in the inventory, come up with the operating plan and resources and line up the Players. The reason Healthcare Reform failed in 94 was that the Clinton Administration gored everybody's oxen and didn't manage the buying and commitment processes. The difference now is that the Obama Administration has put enormous effort on each and every one of those problems into getting the various interest groups on board. With the obvious exception of their political opponents of course.

The readings provide a broad survey of each of the issues as well as the politics and decision-making process so we recommend you at least skim. Reading the headlines alone will take you quite a ways. Reading the excerpts will give you some real meat and if something's sufficiently interesting clicking on the title will take you to the original source. We mention that because one of the surprises in the last year has been the virulent and nearly blind opposition to the Republicans of each and every one of these initiatives. That's taken an already hard change and made it orders of magnitude worse. Sadly they haven't done so on the basis of constructive counter-proposals but have simply chosen to say NO on everything. For one example at this time last year we were literally faceing Great Depression 2.0, and we came within a gnat's eyelash of a complete collapse of the tne entire financial system. The problems were almost that bad after the Inauguration when the stimulus bill was passed. Yet, despite a very weak outlook, we have literally saved the economy and the country; we just have some very tough sledding in front of us to get back to that 5 level.

The bigger and deeper the changes the more interest groups and the opposition tend to fight to preserve what was. Worse yet opposition doesn't just increase at the same rate as the change but goes up non-linearly. So we're seeing fight after fight. One interesting thing about it just saving the Economy was a bigger challenge in more difficult and dangerous circumstances than any faced, at least in some ways, by any of the previous three administrations. Yet we've made enormous progress in the Economy, in Iraq and Afghanistan, in foreign policy in general, and in Education, Healthcare, Energy and Financial Reform. In most cases, e.g. HC, more than we've seen in decades. Interesting is it not?

Yet if you want to get to that Level 5 or beyond we need to do better.

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Surveying the Landscape

Obama in Chains. It is hard for international observers of the United States to grasp the political paralysis that grips the country, and that seriously threatens America’s ability to solve its domestic problems and contribute to international problem solving. America’s governance crisis is the worst in modern history. Moreover, it is likely to worsen in the years ahead. The difficulties that President Barack Obama is having in passing his basic program, whether in health care, climate change, or financial reform, are hard to understand at first glance. Part of the cause for these huge divergences in views is that America is an increasingly polarized society. Political divisions have widened between the rich and poor, among ethnic groups (non-Hispanic whites versus African Americans and Hispanics), across religious affiliations, between native-born and immigrants, and along other social fault lines. American politics has become venomous as the belief has grown, especially on the vocal far right, that government policy is a “zero-sum” struggle between different social groups and politics. Moreover, the political process itself is broken. An equally deep crisis stems from the role of big money in politics. Backroom lobbying by powerful corporations now dominates policymaking negotiations, from which the public is excluded. Finally, policy paralysis around the US federal budget may be playing the biggest role of all in America’s incipient governance crisis. These paralyzing factors could intensify in the years ahead. The budget deficits could continue to prevent any meaningful action in areas of critical need. The divisions over the wars in Iraq and Afghanistan could continue to block a decisive change in policy, such as a withdrawal of forces. The desire of Republicans to defeat the Democrats could lead them to use every maneuver to block votes and slow legislative reforms. A breakthrough will require a major change in direction.

The GOP's no-exit strategy But it's also time to start paying attention to how Republicans, with Machiavellian brilliance, have hit upon what might be called the Beltway-at-Rush-Hour Strategy, aimed at snarling legislative traffic to a standstill so Democrats have no hope of reaching the next exit. We know what happens when drivers just sit there when they're supposed to be moving. They get grumpy, irascible and start turning on each other, which is exactly what the Democrats are doing. Republicans know one other thing: Practically nobody is noticing their delay-to-kill strategy. Who wants to discuss legislative procedure when there's so much fun and profit in psychoanalyzing Sarah Palin? The rules have changed. The extra-constitutional filibuster is being used by the minority, with extraordinary success, to make the majority look foolish, ineffectual and incompetent. By using Republican obstructionism as a vehicle for forcing through their own narrow agendas, supposedly moderate Democratic senators will only make themselves complicit in this humiliation.

Can Irving Kristol Fix the Broken GOP? The passing of Irving Kristol last month at the age of 89 coincided with the death, at a much younger age, of the intellectually serious conservatism he did so much to foster. As a liberal who was fond of both, I've been feeling the loss. In the heyday of Kristol's influence in the 1980s, Republicans styled themselves the party of ideas. Whatever you thought of those ideas—challenging Soviet power, cutting taxes, passing power back to the states, cutting welfare for the undeserving poor—they represented a coherent attempt to remodel government around a conservative vision. How did this prudent outlook devolve into the spectacle of ostensibly intelligent people cheering on Sarah Palin? Through the 1980s, the neoconservatives became more focused on political power and less interested in policy. They developed their own corrupting welfare state, doling out sinecures and patronage subsidized by the Olin, Scaife, and Bradley foundations. Alliances with the religious right skewed their perspective on a range of topics. They went a little crazy hating on liberals. Over time, their best qualities—-skepticism about government's ability to transform societies and rigorous -empiricism—fell by the wayside. In later years, you might say Kristol and the neoconservatives got mugged by ideology. Actually, they were the muggers. There was no clearer sign of the shift than the effort by Kristol's son, William, to prevent health-care-reform legislation from passing in 1993—on the grounds that the political benefit would accrue to Bill Clinton. Today, that sort of Carthaginian politics has infected the entire congressional wing of the GOP, which equates problem solving with treasonous collaboration. Though President Obama has tried to compromise with them in crafting the last missing piece of the social--insurance puzzle, even allegedly moderate Republicans are not interested in making the legislation more conservative. They are only interested in handing Obama a political defeat. This is no good at all. Without a substantive challenge, liberals grow smug and lazy. They overreach and overspend. Conservatives need to return to civic responsibility, not just to check their opponents but to offer the country a real choice. They need some new neoconservatives. They need the old Irving Kristol.

Looking for a True Conservative One has only to list these first four varieties of conservatism to realize that there is no possibility of its death. The instinct to resist change, to recover the past or to romanticize it are part of human nature and will always find political expression. Capitalism is merely a term for the investment of money in wealth creation. Conservatism, indeed, is so protean that one of its most powerful expressions is now found with the radical left. In all this topsy-turvy confusion what's needed is a clearheaded philosopher who can sort out the various forms of conservatism and show sensible-minded people, such as the regular readers of Forbes, which of the many varieties they should support. A true conservative today should stress construction, encouragement, moderation and understanding instead of destruction, prohibition, extremism and slogans. A conservative thinks in terms of countless minor corrections and improvements based on experience and experiment rather than in terms of a universal, uniform solution based on theory and enforced by inflexible law. A conservative, in the best sense, sees the world and its inhabitants as an interdependent organism, comprising innumerable local communities and territories, each adapting to particular conditions. A conservative is someone who goes with the grain of humanity and the nature of the physical world, rather than trying to regiment and fashion a utopia through force of law. And, needless to say, an acceptable conservative is not one who thinks all the answers are obvious but is a modest person who admits that problems are not easily solved, that perfection is unattainable in this world and that it is often necessary to admit mistakes, change one's mind and start again.

Think Obama Hasn't Gotten Much Done? Think Again. About one thing left and right seem to agree: Obama hasn't done anything yet. Maureen Dowd and Dick Cheney have found common ground in scoffing at the president's "dithering." NEWSWEEK recently ran a sympathetic cover story titled "Yes He Can (But He Sure Hasn't Yet)." The sarcasm brigade thinks it has finally found an Achilles' heel in his lack of accomplishments. "When you look at my record, it's very clear what I've done so far, and that is nothing. Nada. Almost one year and nothing to show for it," Obama stand-in Fred Armisen recently riffed on Saturday Night Live. Jon Stewart asserts "it’s chow time" for a president who hasn't followed through on his promises. This conventional wisdom about Obama's first year is sure to be flipped on its head by the anniversary of his inauguration on Jan. 20. If, as seems increasingly likely, Obama wins passage of a health-care-reform bill by that date, he will deliver his first State of the Union address having accomplished more in his first year than any other postwar American president. This isn't an ideological judgment. It's a neutral assessment of his emerging record. The case for Obama's successful freshman year rests above all on the health-care legislation now awaiting action in the Senate. Democrats have been trying to pass national health insurance for 60 years. Obama's claim to a fertile first year doesn't rest on health care alone. There's mounting evidence that the $787 billion economic stimulus he signed in February—combined with the bank bailout package—prevented a depression. But few mainstream economists dispute that Obama's decisive action prevented a much deeper downturn and restored economic growth in the third quarter. The New York Times recently quoted economist Mark Zandi, who advised candidate John McCain (and who now offers guidance to the Democrats), on this point: "The stimulus is doing what it was supposed to do—it is contributing to ending the recession," he said. "In my view, without the stimulus, GDP would still be negative and unemployment would be firmly over 11 percent." When it comes to foreign policy, Obama's accomplishments have been less tangible but hardly less significant: he has put America on a new footing with the rest of the world. In a series of foreign trips and speeches, which critics derided as trips and speeches, he replaced George W. Bush's unilateral, moralistic militarism with an approach that is multilateral, pragmatic, and conciliatory. Obama has already significantly reoriented policy toward Iran, China, Russia, Iraq, Israel, and the Islamic world. Next week, after a much-disparaged period of review, he will announce a new strategy in Afghanistan. No, the results do not yet merit his Nobel Peace Prize. But not since Reagan has a new president so swiftly and determinedly remodeled America's global role.

Economic Policy

Slouching Toward Sanity In America today – and in the rest of the world – economic-policy centrists are being squeezed. The Economic Policy Institute reports a poll showing that Americans overwhelmingly believe that the economic policies of the past year have greatly enriched the bankers of Midtown Manhattan and London’s Canary Wharf (they really aren’t concentrated along Wall Street or in the City of London anymore). In America, the Republican congressional caucus is just saying no: no to short-term deficit spending to put people to work, no to supporting the banking system, and no to increased government oversight or ownership of financial entities. And the banks themselves are back to business-as-usual: anxious to block any financial-sector reform and trusting congressmen eager for campaign contributions to delay and disrupt the legislative process. I do not claim that policy in recent years has been ideal. Nevertheless, policy over the past two and a half years has been good. A fundamental shock bigger than the one in 1929-1930 hit a financial system that was much more vulnerable to shocks than was the case back then. Despite this, unemployment will peak at around 10%, rather than at 24%, as it did in the US during the Great Depression, while nonfarm unemployment will peak at 10.5%, rather than at 30%. Nor will we have a lost decade of economic stagnation, as Japan did in the 1990’s. Admittedly, the bar is low when making this comparison. But our policymakers did clear it. It is worth stepping back and asking: What would the world economy look like today if policymakers had acceded to the populist demand of no support to the bankers? What would the world economy look like today if Congressional Republican opposition to the Troubled Asset Relief Program (TARP) program and additional deficit spending to stimulate recovery had won the day? The only natural historical analogy is the Great Depression itself.

The Great Escape How close did we come to the Great Depression 2.0? Doubtless, that question will spawn a cottage industry of books, studies, and conferences. But Christina Romer, the head of President Obama's Council of Economic Advisers, already has an answer: pretty darn close. Her conclusion deserves attention because Romer, in her previous academic career, was a scholar of the Great Depression. ("Depression" is a term of art. It's more than a serious economic downturn. What distinguishes a depression from a harsh recession is paralyzing fear—fear of the unknown so great that it causes consumers, businesses, and investors to retreat and panic. They hoard cash and desperately curtail spending. They sell stocks and other assets. A devastating loss of confidence inspires behavior that overwhelms the normal self-correcting mechanisms (lower interest rates, inventory resupply, cheap prices) that usually prevent a recession from becoming deep and prolonged: a depression. placeAd2(commercialNode,'bigbox',false,'') Comparing 1929 with 2007–09, Romer finds the initial blow to confidence far greater now than then. True, stock prices fell a third from September to December 1929, but fewer Americans then owned stocks, and prices had risen early in the year. Moreover, home prices barely dropped. From December 1928 to December 1929, total household wealth declined only 3 percent. By contrast, the loss in household wealth between December 2007 and December 2008 was 17 percent—more than five times as large. Both stocks and homes, more widely held, dropped more. Thus traumatized, the economy might have gone into a free fall ending in depression.

Economic Moves the Government Got Right Back in early May, the stock market looked as though it had rebounded from the depressing lows it had reached in March, but stocks still seesawed as investors vacillated between hope that the worst was behind and fear that nasty surprises still lay ahead. Then on May 7, the Federal Reserve released the results of its "stress tests" of the nation's 19 biggest banks. They showed that half were healthy, most of the rest would be OK if they raised reasonable amounts of capital, and only two or three were really in bad shape. The markets yawned. On CNBC and Fox News, critics of the Fed rolled their eyes. Some said the Fed's methodology was too soft, others said its analysis was a whitewash that hid catastrophic problems at the banks. But over the next few weeks, that attitude changed as most banks raised the required capital, investors gained confidence, and a huge rally in financial stocks led the strongest bull market in decades. In retrospect, the stress tests, piled upon a huge stimulus plan and a series of corporate bailouts, seem like the turning point that helped the economy regain forward momentum. It's fashionable (and effortless) to bash the government these days, since it's a fat target for anybody dissatisfied with some aspect of the economy. And there certainly have been some screw-ups, like the black-hole bailout of AIG and the $3.6 billion in bonuses that went to executives at Merrill Lynch while its parent company, Bank of America, was effectively a ward of the state. But you'd have to be Ayn Rand's evil twin to believe government intervention hasn't helped the economy at all. It's perfectly valid to question whether $787 billion in stimulus money could have been better deployed or whether the Wall Street bailouts will ever trickle through to Main Street and the real economy, as intended. But antigovernment, tea-party nihilism overlooks the fact that when free markets fail, the government is usually the only party able to restore order. And determining what the government accomplished over the past 18 months will guide the fierce debate in Washington over how to regulate the banks and prevent more meltdowns in the future. So here's a short list of what the government got right:

Social Policy: Healthcare, Education, Energy

We can deliver health reform  The nation stands on the verge of achieving fundamental health-care reform. For the first time in history, the House of Representatives has enacted comprehensive health-reform legislation, and the Senate has begun its own debate. These bills will provide a bedrock sense of security and stability for Americans who have health insurance, and quality, affordable options for Americans without it.But health reform has an economic and fiscal dimension, too. For more than 30 years, health-care costs have risen much more rapidly than either inflation or the growth of the economy -- yet these higher costs are not delivering higher-quality care for Americans.Looking forward, if we do nothing to slow the skyrocketing cost of health care, the federal government will eventually be spending more on Medicare and Medicaid than all other government programs combined. It's time to move toward the high-quality, lower-cost health system of the future, and the reforms under discussion in the House and Senate will put us firmly on that path.For example, bundled payments and accountable-care organizations, as well as incentives to prevent harmful and avoidable readmissions and health-facility-acquired infections, will induce physicians and hospitals to innovate and redesign the way they deliver care through better coordination that will keep people healthy and avoid unnecessary complications. As we enter the homestretch, the greatest risk we run is not completing health reform and letting this chance to lay a new foundation for our economy and our country pass us by. We have the building blocks to construct a health-care system that provides the highest quality of care while embodying a process of continuous improvement -- a leap forward for the health of Americans and the fiscal health of the entire nation.

Op-Ed Columnist: Reform or Else Health care reform hangs in the balance. Its fate rests with a handful of “centrist” senators — senators who claim to be mainly worried about whether the proposed legislation is fiscally responsible. But if they’re really concerned with fiscal responsibility, they shouldn’t be worried about what would happen if health reform passes. They should, instead, be worried about what would happen if it doesn’t pass. For America can’t get control of its budget without controlling health care costs — and this is our last, best chance to deal with these costs in a rational way. Some background: Long-term fiscal projections for the United States paint a grim picture. Unless there are major policy changes, expenditure will consistently grow faster than revenue, eventually leading to a debt crisis. What’s behind these projections? An aging population, which will raise the cost of Social Security, is part of the story. But the main driver of future deficits is the ever-rising cost of Medicare and Medicaid. If health care costs rise in the future as they have in the past, fiscal catastrophe awaits. You might think, given this picture, that extending coverage to those who would otherwise be uninsured would exacerbate the problem. But you’d be wrong, for two reasons. First, the uninsured in America are, on average, relatively young and healthy; covering them wouldn’t raise overall health care costs very much. Second, the proposed health care reform links the expansion of coverage to serious cost-control measures for Medicare. Think of it as a grand bargain: coverage for (almost) everyone, tied to an effort to ensure that health care dollars are well spent. Are we talking about real savings, or just window dressing? Well, the health care economists I respect are seriously impressed by the cost-control measures in the Senate bill, which include efforts to improve incentives for cost-effective care, the use of medical research to guide doctors toward treatments that actually work, and more. This is “the best effort anyone has made,” says Jonathan Gruber of the Massachusetts Institute of Technology. A letter signed by 23 prominent health care experts — including Mark McClellan, who headed Medicare under the Bush administration — declares that the bill’s cost-control measures “will reduce long-term deficits.” The fact that we’re seeing the first really serious attempt to control health care costs as part of a bill that tries to cover the uninsured seems to confirm what would-be reformers have been saying for years: The path to cost control runs through universality. We can only tackle out-of-control costs as part of a deal that also provides Americans with the security of guaranteed health care. That observation in itself should make anyone concerned with fiscal responsibility support this reform.

Ground Game on Schools Beneath all this headline turmoil, Obama is overseeing a quiet upheaval in the nation's approach to education from preschool through college. I've been somewhat skeptical of the president's ability to pull this off, questioning his determination to stand up to two political giants: the student-lending lobby and teachers unions. The final results aren't in. The biggest challenge -- overhauling the No Child Left Behind law -- has no clear legislative path in sight. But when the National Education Association unloads on an Obama administration proposal to promote charter schools and teacher accountability as a "series of top-down directives," you know the administration is doing something bold. So this is an appropriate moment for me to eat at least a spoonful of crow. "There's this sort of slow, persistent progress," says Amy Wilkins of the Education Trust, a leading advocacy group for education reform. "If this were a football game, there are not a lot of those long dramatic passes, but this is a ground game where they are grinding out big important change without a lot of fanfare." As with any major renovation, money helps -- a lot. Meanwhile, the administration has seized on education funding in the stimulus bill to push its reform agenda. The stimulus included $4.35 billion for competitive grants to states to improve elementary and secondary education -- the largest-ever amount of discretionary federal funding for school reform. The administration's proposed regulations on these Race to the Top funds require that any state wishing to compete for the money must lift restrictions on the number of charter schools and get rid of laws or rules that prohibit linking teacher pay to student performance. Seven states -- Tennessee, Rhode Island, Indiana, Connecticut, Massachusetts, Colorado and Illinois -- have revoked their limits on charter schools. The California legislature set aside a 2006 law that prohibited using student performance data to evaluate teachers. Finally, the appropriations bills moving through Congress would further the reform push. Most important, they would dramatically boost funding -- from $97 million in 2009 to as much as $446 million in 2010 -- to offer higher pay to teachers and principals who improve performance in high-poverty schools. So far, so good -- assuming that squeals from the teachers unions don't result in watering down the Race to the Top rules. But the real test will be whether the administration takes on the task of overhauling No Child Left Behind to maintain the law's focus on holding schools accountable while building some needed flexibility into judging school performance. On education, the administration gets high marks for its first semester. The final exam is still to be administered.

Analysis: Climate bill may spur energy revolution Congress has taken its first step toward an energy revolution, with the prospect of profound change for every household, business, industry and farm in the decades ahead. It was late Friday when the House passed legislation that would, for the first time, require limits on pollution blamed for global warming — mainly carbon dioxide from burning fossil fuels. Now the Senate has the chance to change the way Americans produce and use energy. What would the country look like a decade from now if the House-passed bill — or, more likely, a water-down version — were to become the law of the land? Energy touches every corner of the economy and in countless ways can alter people's lives. Such a law would impact how much people pay to heat, cool and light their homes (it would cost more); what automobiles they buy and drive (smaller, fuel efficient and hybrid electric); and where they will work (more "green" jobs, meaning more environmentally friendly ones). Critics of the House bill brand it a "jobs killer." Yet it would seem more likely to shift jobs. Old, energy-intensive industries and businesses might scale back or disappear. Those green jobs would emerge, propelled by the push for nonpolluting energy sources. Energy would cost more because it would become more expensive to produce. For the first time there would be a price on the greenhouse gas pollution created when coal, natural gas or oil are burned. Energy companies would have to pay for technologies that can capture the carbon emissions, purchase pollution allowances or shift to cleaner energy sources. Energy experts in government and industry say a price on carbon pollution would lead to new ways to make renewable energy less expensive, while emphasizing how people can use it more wisely. Potential changes to how homes are built and even financed seem likely as energy efficiency is taken into account in building codes and the cost of mortgages. With the cost of energy increasing, homeowners and businesses would have greater incentive to use more energy efficient lighting, windows and insulation. But don't think that the traditional sources of energy would disappear. Coal, which today accounts for half the electricity produced, would continue as a major energy source, though a less polluting one, energy experts forecast. That would mean capturing the carbon released when coal is burned. It's a technological hurdle with a complication: "not in my back yard" complaints over what to do with the billions of tons of carbon dioxide captured from power plants and pumped beneath the earth. Would people feel comfortable having it stored near or under their homes, factories and businesses? Scientists studying climate change say carbon capture from power plants is essential if the country is to take up the challenge against global warming. The cleaner energy economy also put nuclear energy front and center. Does the U.S. build new power plants? If so, where, and where does all the waste go? Nuclear energy makes up about one-fifth of the nation's electricity today. The House-passed bill contains provisions to make it easier to get loan guarantees and expands the nuclear industry's access to loans for reactor construction. An Environmental Protection Agency analysis that shows modest future costs from a low-climate energy world assumes a significant expansion of nuclear energy. The Senate could add more incentives for the nuclear industry. The new energy world would rely more on natural gas. This abundant fossil fuel emits carbon but is relatively clean when compared with coal. But people would have to decide whether to accept new pipelines that are needed to ship the gas around the country — just as they would have to deal with the need for new power lines to move solar and wind energy to where it's needed.

Foreign Policy

Hillary Clinton's Quiet Revolution Amid all the distractions, what is Clinton actually doing? Only overseeing what may be the most profound changes in U.S. foreign policy in two decades -- a transformation that may render the presidencies of Bill Clinton and George W. Bush mere side notes in a long transition to a meaningful post-Cold War worldview. The secretary has quietly begun rethinking the very nature of diplomacy and translating that vision into a revitalized State Department, one that approaches U.S. allies and rivals in ways that challenge long-held traditions. And despite the pessimists who invoked the "team of rivals" cliche to predict that President Obama and Clinton would not get along, Hillary has defined a role for herself in the Obamaverse: often bad cop to his good cop, spine stiffener when it comes to tough adversaries and nurturer of new strategies. Recognizing that the 3 a.m. phone calls are going to the White House, she is instead tackling the tough questions that, since the end of the Cold War, have kept America's leaders awake all night. Given the challenges involved, it was perhaps natural that the White House would have a bigger day-to-day hand in some of the nation's most urgent foreign policy issues. But with Obama, national security adviser Jim Jones, Vice President Joe Biden and Secretary of Defense Robert Gates absorbed by Iraq, Afghanistan and other inherited problems of the recent past, Clinton's State Department can take on a bigger role in tackling the problems of the future -- in particular, how America will lead the world in the century ahead. This approach is both necessary and canny: It recognizes that U.S. policy must change to fulfill Obama's vision and that many high-profile issues such as those of the Middle East have often swamped the careers and aspirations of secretaries of state past. Which nations will be our key partners? What do you do when many vital partners -- China, for example, and Russia -- are rivals as well? How must America's alliances change as NATO is stretched to the limit? How do we engage with rogue states and old enemies in ways that do not strengthen them and preserve our prerogative to challenge threats? How do we move beyond the diplomacy of men in striped pants speaking only for governments and embrace potent nonstate players and once-disenfranchised peoples? In searching for answers, Clinton is leaving behind old doctrines and labels. She outlined her new thinking in a recent speech at the Council on Foreign Relations in New York, where she revealed stark differences between the new administration's worldview and those of its predecessors: The recurring themes include "partnership" and "engagement" and "common interests." Clearly, Madeleine Albright's "indispensable nation" has recognized the indispensability of collaborating with others.

A Lonely Kind of Courage Cadets are gathered together not infrequently in one of various auditoriums to listen to statesmen, generals, pundits, or performers. But presidents are a special case. “Two presidents in two years!” I overheard one cadet say to another with a kind of wonder as he recollected that then-President Bush had visited only last December.Over the years, the rhetoric directed at the Corps of Cadets has ranged from the lofty to the earthy. There were no jokes last night. The event was prefaced by a colonel’s celebration of the American tradition of a non-partisan military. The president, in keeping with the gravity of the occasion, delegated to the Superintendent the granting of amnesty to cadets being punished for minor infractions—an authority customarily exercised by heads of state on visits to West Point. It seemed to me that the cadets’ response to the announcement of amnesty, made moments before the president’s arrival, was more subdued than usual. They were ready to listen. Service academies theoretically provide safe audiences for the Commander-in-Chief. But to look into the eyes of the people you are sending to war, when what you hope to do is forge a world in which young people, as Truman put it in the language of a veteran artilleryman of the Meuse-Argonne Offensive, “won’t have to go and be cannon fodder,” is, I think, an act of honesty. President Obama’s challenge was twofold of course: to articulate a policy and to attend to an audience that would be directly, materially affected by that policy in ways they can see only too well and in ways they cannot even imagine. The seniors I teach have just chosen the branches of the Army in which they will serve—aviation, infantry, military police, etc. All semester I have watched them devote to this choice, as well as to a consideration of the profession of arms and to the ambiguous situations into which it might deliver them, a substantial amount of thought. How could a Commander-in-Chief’s emphasis on deliberation and restraint, on the “nimble and precise ... use of military power,” and on a set of national values encompassing the value of disagreement, not strike a chord with an audience so circumstanced? When my classes next meet, the cadets will no doubt share their thoughts on the speech, and I will share with them another speech, written, like last night’s, after a decade of national crisis and transformation, a speech that, like President Obama’s, linked domestic prosperity and foreign engagement, civilian and military enterprises. In his 1939 West Point commencement address, FDR refrained from excessive congratulation and challenged his audience to regard their commissioning as a beginning rather than a culmination: “You will find, as I have, that ... service never ends—in the sense that it engages the best of your ability and the best of your imagination in the endless adventure of keeping the United States safe, strong and at peace.” The demand for such imagination on the part of military leaders has only increased since 1939.

  • Panel Criticizes Military’s Use of Embedded Anthropologists A two-year-old Pentagon program that assigns social scientists to work with military units in Iraq and Afghanistan has come under sharp criticism from a panel of anthropologists who argue that the undertaking is dangerous, unethical and unscholarly.

Obama's lonely decision Perhaps the most disturbing thing about the last few years has been the stunningly large number of American thinkers, strategists and pundits who have been perfectly prepared to lose wars in both Iraq and Afghanistan. People talk about American decline these days, but it is not in the basic measurements of national power that American decline is to be found. It is in the willingness of the intellectual and foreign policy establishments to accept both decline and defeat.

A New World Architecture Twenty years after the fall of the Berlin Wall and the collapse of communism, the world is facing another stark choice between two fundamentally different forms of organization: international capitalism and state capitalism. The former, represented by the United States, has broken down, and the latter, represented by China, is on the rise. Following the path of least resistance will lead to the gradual disintegration of the international financial system. A new multilateral system based on sounder principles must be invented. Reorganizing the world order will need to extend beyond the financial system and involve the United Nations, especially membership of the Security Council. That process needs to be initiated by the US, but China and other developing countries ought to participate as equals. They are reluctant members of the Bretton Woods institutions, which are dominated by countries that are no longer dominant. The rising powers must be present at the creation of this new system in order to ensure that they will be active supporters. The system cannot survive in its present form, and the US has more to lose by not being in the forefront of reforming it. The US is still in a position to lead the world, but, without far-sighted leadership, its relative position is likely to continue to erode. It can no longer impose its will on others, as George W. Bush’s administration sought to do, but it could lead a cooperative effort to involve both the developed and the developing world, thereby reestablishing American leadership in an acceptable form. The alternative is frightening, because a declining superpower losing both political and economic dominance but still preserving military supremacy is a dangerous mix. We used to be reassured by the generalization that democratic countries seek peace.

Ideology, Politics and Change

Shake the Government's Helping Hand. Or Bite It. Summoning visions of a Frankenstein-like debacle, Republicans have labeled the Democratic approach a “risky health care experiment.” They have allied themselves with — and stoked the fears of — older voters. Sensing that economic insecurity can be channeled into resisting change, they are trying to persuade Americans that they are better off with the system they know, however flawed and fiscally unsustainable it may be in the long run, than with one that would require a leap of faith. But the two showdowns are more than mirror images of political gamesmanship. Taken together, they help define the current boundaries of the unending American debate over how to balance big government against market forces. And the similarities help to explain the political climate President Obama faces as he tries to salvage his health care initiative with a take-charge address Wednesday evening to a joint session of Congress. His job that night will be not just to sell a health care plan, but to reassure Americans that his approach will remain within their ideological comfort zone. To do so, he will have to convince the nation — to a degree not required of him as he rushed to pass the economic stimulus package and take other emergency actions — that it can trust government to be both competent and restrained. His success or failure will not only have big political implications for him and his agenda. The outcome will say a lot about the nation’s ability to deal with one of its biggest long-term problems, the huge and growing costs of supporting an aging population. While left-right arguments can be abstract to the average voter, the relative benefits of the free market and the government come home to people when they determine the quality of their health care and the security of their retirement. Looking back on it, the failure of the Social Security proposal in 2005 marked the symbolic end of more than two decades in which conservatives had pushed — successfully, more often than not — to diminish the role of government and to elevate the role of the market in the national economy and the lives of individuals. Ever since, the ideological pendulum has swung leftward: the election of a Democratic Congress in 2006; the economic meltdown last year and the ensuing massive intervention in the private sector by Washington; President Obama’s support for tighter regulation of Wall Street and other industries. Now the question is whether that swing is already hitting its limit in the health care fight. The outcome will not be known for weeks or months, and it is still a matter of debate whether the opposition that flared over the last month represents a broad-based discomfort with the government’s presumed role in a new system or just noise generated by conservative interest groups. The most relevant political framework instead appears to be a more problematic one inherited from his predecessor: a general loss of faith in government. Four years after the botched response to Hurricane Katrina deepened skepticism about Washington’s ability to help ordinary people, Mr. Obama’s opponents are benefiting from intense suspicion in some quarters about the government’s motives and capabilities, helping them blunt the drive to give government a more active role in health care. So while Republicans would still have trouble these days sustaining an argument in favor of greater reliance on market forces, they are having little trouble mounting a defense against a larger role for government.

The Lost Weekend The Republicans are the fiscal conservatives in Congress, at least in the years when they aren’t actually in power. They were never going to rally around an expensive new government program that fails to provide a single new market for corn-based products. But you would expect them to try to push the whole project in the most economical direction possible. For instance, the bill would establish an independent commission on Medicare payment rates. This is a very big deal and you are going to have to take my word that health care economists fall over with excitement when it comes up. But the Senate Democrats’ current version of the bill would only allow the panel experts to act when Medicare spending rises at a faster rate than other health care spending. Since health care spending has been going through the roof, we’re talking about waiting until Medicare spending goes through the ozone layer. Obviously, this is an area where the Republicans would want to swing into action. And they did. They prepared an amendment eliminating the Medicare panel entirely. In fact, G.O.P. senators appear to have amendments aimed at wiping out virtually all the cost-cutting the Democrats have put in the bill, including productivity adjustments and incentives for innovation in health care delivery.If they can’t kill the bill completely, Republicans who are not from Maine seem intent on raising its price tag. While terrifying senior citizens in a cynical attempt to influence their vote in the next election cycle. Although I’m sure Senator Tom Coburn of Oklahoma just misspoke when he said: “I have a message for you: You’re going to die sooner." There is no sane explanation for all this other than crass political calculation. On Thursday, Senator Michael Bennet, a Colorado Democrat who’s up for election next year, introduced an amendment specifically promising that Medicare recipients would not lose any of their current guaranteed benefits. It passed 100 to 0. Meanwhile, Colorado voters were getting robocalls from John McCain warning that the health care bill was going to cut their “vital Medicare coverage.”

The Great American Ideological Crackup The whole thing feels like the last war, or a song that has not worn well, or a guest who has overstayed his welcome. The White House–vs.–Fox News mini-saga belongs to an era that effectively ended last fall, when President Bush radically enlarged the role of the federal government in the economy and Obama won the presidency. It was clear then, and is even clearer now, that the issues which long defined the right-left divide (hawkishness abroad, a limited role for government at home) are in spectacular disarray. We have been here before. The analogous moments that most easily come to mind—moments of economic turmoil and political realignment—are 1933 and 1981. And so the 44th president has the chance—only the chance; success is not at all certain—to follow in the tradition of the two men who defined politics in the last 70 years: Franklin Roosevelt and Ronald Reagan. FDR's transformed the role of the state, shaping reality for presidents from Truman to Carter. Then, after 1981, the eponymous Reagan Revolution politically replaced the ethos of the New Deal. Bill Clinton's announcement of the death of big government was, in its way, the apogee of Reaganism. But we are now living in a post-Roosevelt, post-Reagan universe. What comes next will not be post-partisan, because faction is an intrinsic human impulse. Nor, for the same reason, will it be post-ideological. The question, rather, is what new ideologies—or what new permutations of perennial ideological impulses—will form to order our politics in the face of asymmetrical warfare, religious extremism, and an intensely globalized economy. That is a developing story that no cable channel is likely to cover very well.

Lunch With The President: The Politics Of Obama's War Plan President Obama said today he is "painfully clear" that his revised Afghanistan strategy is "politically unpopular" -- especially within his own party -- and that he expects to be held "fully accountable" if the strategy fails. Obama, speaking with a group of columnists and reporters at a White House lunch today, conceded that Americans "are right to be concerned" about the additional expense of blood and treasure in Afghanistan. "But that's not how I make decisions. If I were basing my decisions on polls, then the banking system might have collapsed and you probably wouldn't have GM or Chrysler, and it's not clear that the economy would be growing again." It's Obama's theory that escalating the Afghanistan conflict provokes anxiety "precisely because the American people are rightly focused on, how do we rebuild America." Later in the hour, Obama supposed that Americans' economic anxiety was linked to their assessment of the war. Here's his explanantion: "The American people are having a really tough time right now, in their own lives. We've got the highest unemployment rate since the early 80s, people are deleveraging from massive amounts of debt, there's a lot of anxiety  out there about losing your  health care, losing their house, losing your job, not being able to finance your kid's college's education and so one speech is not going to suddenly persuade them that investing a lot more blood and treasure in an Afghanistan is an attractive proposition. My goal in the speech tonight is to explain to the American people why we have to finish the job and why the strategy I'm putting forward is not only the best possible strategy for our national security and has the best prospect of stabilizing Afghanistan but also has the best prospect of getting our troops home in some realistic timeframe."

The Analytic Mode Many Democrats are nostalgic for Barack Obama’s 2008 presidential campaign — for the passion, the clarity, the bliss-to-be-alive fervor. They argue that these things are missing in a cautious and emotionless White House. But, of course, the Obama campaign, like all presidential campaigns, was built on a series of fictions. The first fiction was that government is a contest between truth and error. In reality, government is usually a contest between competing, unequal truths. The second fiction was that to support a policy is to make it happen. In fact, in government power is exercised through other people. It is only by coaxing, prodding and compromise that presidents actually get anything done. The third fiction was that we can begin the world anew. In fact, all problems and policies have already been worked by a thousand hands and the clay is mostly dry. Presidents are compelled to work with the material they have before them. The fourth fiction was that leaders know the path ahead. In fact, they have general goals, but the way ahead is pathless and everything is shrouded by uncertainty. All presidents have to adjust to these realities when they move to the White House. The only surprise with President Obama is how enthusiastically he has made the transition. He’s political, like any president, but he seems to vastly prefer the grays of governing to the simplicities of the campaign. The election revolved around passionate rallies. The Obama White House revolves around a culture of debate. He leads long, analytic discussions, which bring competing arguments to the fore. He sometimes seems to preside over the arguments like a judge settling a lawsuit. His policies are often a balance as he tries to accommodate different points of view. He doesn’t generally issue edicts. In matters foreign and domestic, he seems to spend a lot of time coaxing people along. His governing style, in short, is biased toward complexity. The advantage of the Obama governing style is that his argument-based organization is a learning organization. Amid the torrent of memos and evidence and dispute, the Obama administration is able to adjust and respond more quickly than, say, the Bush administration ever did.The disadvantage is the tendency to bureaucratize the war. Armed conflict is about morale, motivation, honor, fear and breaking the enemy’s will. The danger is that Obama’s analytic mode will neglect the intangibles that are the essence of the fight. It will fail to inspire and comfort. Soldiers and Marines don’t have the luxury of adopting President Obama’s calibrated stance since they are being asked to potentially sacrifice everything. Barring a scientific breakthrough, we can’t merge Obama’s analysis with George Bush’s passion. But we should still be glad that he is governing the way he is. I loved covering the Obama campaign. But amid problems like Afghanistan and health care, it simply wouldn’t do to give gauzy speeches about the meaning of the word hope. It is in Obama’s nature to lead a government by symposium. Embrace the complexity. Learn to live with the dispassion.