America
Unhappy America
If America can learn from its problems, instead of blaming others, it will come back stronger
NATIONS, like people, occasionally get the blues; and right now the United States, normally the world’s most self-confident place, is glum. Eight out of ten Americans think their country is heading in the wrong direction. The hapless George Bush is partly to blame for this: his approval ratings are now sub-Nixonian. But many are concerned not so much about a failed president as about a flailing nation.
One source of angst is the sorry state of American capitalism (see article). The “Washington consensus” told the world that open markets and deregulation would solve its problems. Yet American house prices are falling faster than during the Depression, petrol is more expensive than in the 1970s, banks are collapsing, the euro is kicking sand in the dollar’s face, credit is scarce, recession and inflation both threaten the economy, consumer confidence is an oxymoron and Belgians have just bought Budweiser, “America’s beer”.
And it’s not just the downturn that has caused this discontent. Many Americans feel as if they missed the boom. Between 2002 and 2006 the incomes of 99% rose by an average of 1% a year in real terms, while those of the top 1% rose by 11% a year; three-quarters of the economic gains during Mr Bush’s presidency went to that top 1%. Economic envy, once seen as a European vice, is now rife. The rich appear in Barack Obama’s speeches not as entrepreneurial role models but as modern versions of the “malefactors of great wealth” denounced by Teddy Roosevelt a century ago: this lot, rather than building trusts, avoid taxes and ship jobs to Mexico. Globalisation is under fire: free trade is less popular in the United States than in any other developed country, and a nation built on immigrants is building a fence to keep them out. People mutter about nation-building beginning at home: why, many wonder, should American children do worse at reading than Polish ones and at maths than Lithuanians?
The dragon’s breath on your shoulder
Abroad, America has spent vast amounts of blood and treasure, to little purpose. In Iraq, finding an acceptable exit will look like success; Afghanistan is slipping. America’s claim to be a beacon of freedom in a dark world has been dimmed by Guantánamo, Abu Ghraib and the flouting of the Geneva Conventions amid the panicky “unipolar” posturing in the aftermath of September 11th.
Now the world seems very multipolar. Europeans no longer worry about American ascendancy. The French, some say, understood the Arab world rather better than the neoconservatives did. Russia, the Gulf Arabs and the rising powers of Asia scoff openly at the Washington consensus. China in particular spooks America—and may do so even more over the next few weeks of Olympic medal-gathering. Americans are discussing the rise of China and their consequent relative decline; measuring when China’s economy will be bigger and counting its missiles and submarines has become a popular pastime in Washington. A few years ago, no politician would have been seen with a book called “The Post-American World”. Mr Obama has been conspicuously reading Fareed Zakaria’s recent volume.
America has got into funks before now. In the 1950s it went into a Sputnik-driven spin about Soviet power; in the 1970s there was Watergate, Vietnam and the oil shocks; in the late 1980s Japan seemed to be buying up America. Each time, the United States rebounded, because the country is good at fixing itself. Just as American capitalism allows companies to die, and to be created, quickly, so its political system reacts fast. In Europe, political leaders emerge slowly, through party hierarchies; in America, the primaries permit inspirational unknowns to burst into the public consciousness from nowhere.
Still, countries, like people, behave dangerously when their mood turns dark. If America fails to distinguish between what it needs to change and what it needs to accept, it risks hurting not just allies and trading partners, but also itself.
The Asian scapegoat
There are certainly areas where change is needed. The credit crunch is in part the consequence of a flawed regulatory system. Lax monetary policy allowed Americans to build up debts and fuelled a housing bubble that had to burst eventually. Lessons need to be learnt from both of those mistakes; as they do from widespread concerns about the state of education and health care. Over-unionised and unaccountable, America’s school system needs the same sort of competition that makes its universities the envy of the world. American health care, which manages to be the most expensive on the planet even though it fails properly to care for the tens of millions of people, badly needs reform.
There have been plenty of mistakes abroad, too. Waging a war on terror was always going to be like pinning jelly to a wall. As for Guantánamo Bay, it is the most profoundly un-American place on the planet: rejoice when it is shut.
In such areas America is already showing its genius for reinvention. Both the Republican and Democratic presidential candidates promise to close Guantánamo. As his second term ticks down, even Mr Bush has begun to see the limits of unilateralism. Instead of just denouncing and threatening the “axis of evil” he is working more closely with allies (and non-allies) in Asia to calm down North Korea. For the first time he has just let American officials join in the negotiations with Iran about its fishy nuclear programme (see article).
That America is beginning to correct its mistakes is good; and there’s plenty more of that to be done. But one source of angst demands a change in attitude rather than a drive to restore the status quo: America’s relative decline, especially compared with Asia in general and China in particular.
The economic gap between America and a rising Asia has certainly narrowed; but worrying about it is wrong for two reasons. First, even at its present growth rate, China’s GDP will take a quarter of a century to catch up with America’s; and the internal tensions that China’s rapidly changing economy has caused may well lead it to stumble before then. Second, even if Asia’s rise continues unabated, it is wrong—and profoundly unAmerican—to regard this as a problem. Economic growth, like trade, is not a zero-sum game. The faster China and India grow, the more American goods they buy. And they are booming largely because they have adopted America’s ideas. America should regard their success as a tribute, not a threat, and celebrate in it.
Many Americans, unfortunately, are unwilling to do so. Politicians seeking a scapegoat for America’s self-made problems too often point the finger at the growing power of once-poor countries, accusing them of stealing American jobs and objecting when they try to buy American companies. But if America reacts by turning in on itself—raising trade barriers and rejecting foreign investors—it risks exacerbating the economic troubles that lie behind its current funk.
Everybody goes through bad times. Some learn from the problems they have caused themselves, and come back stronger. Some blame others, lash out and damage themselves further. America has had the wisdom to take the first course many times before. Let’s hope it does so again.
Obama on tour
Obamamania grips Europe
Barack Obama delivers a largely successful speech to a massive crowd in Berlin
BARACK OBAMA set himself a difficult task for his extraordinary appearance in Berlin on Thursday July 24th. He said that he came not to campaign but to deliver a “substantive address” on the pointy-headed subject of trans-Atlantic relations. Yet the crowd was expected to number in the tens of thousands. The listeners were mainly European, but the real audience was in America. He needed to tell voters what they want to hear, while rousing those who had flocked to see him. He sought to remind people of American presidents who had become legends by winning Berliners’ hearts and minds, but could not afford to appear presumptuous.
In the end he largely pulled it off, though the speech was not quite as substantive as advertised. The police estimated that 200,000 people—perhaps the largest live audience that Mr Obama has ever addressed—thronged the boulevard that stretches between the Prussian Victory Column and the Brandenburg Gate. Despite jams at the entrances and poor reception at the back of the crowd, most did not appear to be disappointed. He was “cosmopolitan, not only American,” said Garunya Karunahramoorthy, a student of international relations from Berlin. “He’s a world citizen”. In bowing to a foreign audience, Mr Obama seemed to give new life to the idea of the American century.
Mr Obama achieved that by fusing an older tradition of American beneficence with a contemporary emphasis on multilateralism, which he was careful to call “partnership”. The Berlin setting gave him a chance to make partnership seem the most patriotic thing in the world, and he exploited it to the full. He began by reminding Berliners that America had helped them to break the Soviet-imposed blockade of 1948-49 and to knock down the Berlin wall four decades later. But he acknowledged that the relationship had lately become troubled. “On both sides of the Atlantic, we have drifted apart”, he admitted. Europe began to see America “as part of what has gone wrong”, overlooking its sacrifices for “freedom around the world”. And America, he confessed, “had made our share of mistakes”.
The bits of Mr Obama’s rhetoric that were most popular with the locals were aimed at convincing them that America would make fewer mistakes in an Obama presidency. It would “reject torture and stand for the rule of law”, strive for “a world without nuclear weapons” and follow the Germans’ example in setting ambitious targets for reducing carbon emissions that cause global warming. The American Mars would no longer trample the sensitivities of the European Venus. “America has no better partner than Europe”, he declared.
If Mr Obama had left it at that, his Republican rivals might have put together a case that he was keener to defend European values than American ones. But he was staunch in defence of American interests, and made it plain that partnership would come with a price. “We must defeat terror and dry up the well of extremism that supports it”, he declared. “Iran must abandon its nuclear ambitions.” But the United States cannot accomplish such tasks on its own. And that means that reluctant Europeans—Germans in particular—will have to contribute more than they have done to such ventures as the war in Afghanistan. “My country and yours have a stake in seeing that Nato’s first mission beyond Europe's borders is a success.”
Participants in Mr Obama’s meetings with German chancellor Angela Merkel and foreign minister Frank-Walter Steinmeier report that he charmed and impressed them. The throng was also content, although one man rightly wondered “how he could deliver” on everything he promised.
Mr Obama’s view of the world is no sunnier than George Bush’s: it is equally menaced by terrorists and weapons of mass destruction and genocide and more so by global warming. But Mr Obama promises—in fact demands—a more co-operative approach to solving such problems. New walls threaten to divide religions, tribes and classes. The answer, he said, attempting to sound like Kennedy and Reagan rolled into one, is to tear them down.
Thursday Night Lineup
On CNBC's Kudlow & Company at 7pm ET tonight:INSIDE TODAY'S HOUSING NUMBERS, STOCK MARKET & ECONOMY...Our stock market all-stars will discuss and debate all the latest news and developments affecting investors including whether today's housing numbers might actually be hiding some good news.
On board:
*Noah Blackstein, portfolio manager at Dynamic Mutual Funds
*Jack Gage, Forbes magazine associate editor
*Jason Trennert, chief investment strategist and managing partner at Strategas Research Partners
*Stefan Abrams, Bryden-Abrams Investment Management managing partner
SENATE OFFSHORE ACCOUNT PROBE...Sen. Chuck Grassley (R., Iowa) ranking member of the Senate Finance Committee, will discuss tax evasion in offshore accounts.
PRIMARY POLITICS...Our political panel will offer its perspective on all the latest presidential election developments including Obama's speech in Berlin earlier today.
On board:
*Scott Rasmussen, pollster & president of Rasmussen Reports
*Jay Campbell, pollster, Hart Research
*Kellyanne Conway, pollster & president of the polling company
Please join us at 7pm ET on CNBC for another free market edition of Kudlow & Company.
posted by Money Politic$ at 4:06 PM 
McCain on Fan and Fred Is McCain at His Very Best
“Americans should be outraged at the latest sweetheart deal in Washington,” writes McCain. “Congress will put U.S. taxpayers on the hook for potentially hundreds of billions of dollars to bail out Fannie Mae and Freddie Mac. It’s a tribute to what these two institutions — which most Americans have never heard of — have bought with more than $170-million worth of lobbyists in the past decade.”
This is right on the money. This is the straight-talk McCain as true Washington reformer. The senator goes right to the heart of what Wall Street Journal editor Paul Gigot describes as a bad mix of government power backing private profit.
McCain goes on to argue that Fannie employees manipulated financial reports to line the pockets of senior executives. Freddie did likewise. Big Mac calls them a danger to financial markets. He says if one dime of taxpayer money ends up in those institutions “the management and the board should immediately be replaced, multimillion dollar salaries should be cut, and bonuses and other compensation should be eliminated. They should cease all lobbying activities and drop all payments to outside lobbyists.”
Sen. McCain argues that government backing is no longer needed for their original mission. He writes, “There are lots of banks, savings and loans, and other financial institutions that can do this job.”
Later on in the piece he argues for strong regulation of Fan and Fred “that limits their ability to borrow, shrinks their size until they are no longer a threat to our economy, and privatizes and eliminates their links to the government.”
This is as clear a statement as I’ve seen any politician make regarding the absolute folly of the GSE bailout that unfortunately will probably be passed by the Congress before the week is out. This is McCain at his very best. This is shot-across-the-bow stuff. I hope the voting public gets the message.
The Media Are Missing the Housing Bottom
Media reports painted a pessimistic picture of today’s release on existing home sales, which fell 15 percent from a year ago and recorded higher inventories. But inside the report was an awful lot of very good new news, which appear to be pointing to a bottom in the housing problem; in fact, maybe the tiniest beginnings of a recovery.For example, the median existing home price has increased four consecutive months and is up 10 percent since February. Yes, it’s down 6 percent over the past year. But the monthly numbers show a gradual rebound. Actually, this median home price is $215,000 in June, compared to $196,000 last winter.
And there’s more. One of the hardest hit regions is the West, including California, Arizona, and Nevada. The other two bad states are Florida and Michigan. However, existing home sales in the western region are up four straight months, and are 17 percent above the low in October. At the same time, prices in the West have increased three straight months.
Meanwhile, overall national existing home sales are basically stabilizing at just under five million. And in the first and second quarters of 2008, these sales dropped slightly by 3 percent in each case, which is a whole lot better than the roughly 30 percent sales drops of the prior three quarters.
It’s a pity the mainstream media keeps searching for more and more pessimism. The reality is a possible upturn in the housing trend, and at the very least we are getting a bottom. Stocks sold off 165 points largely on media reports of terrible home sales and prices. But I am hoping the market comes to its senses and realizes the data are a whole lot better.
And on top of all that, just as housing may be on the mend, Congress is about to ratify a huge FHA-based bailout that could total $42 billion. Congressional solons are putting up $300 billion to refinance and insure distressed loans through the Federal Housing Administration. But this dubious government agency, with a whole history of bad portfolio management, may wind up taking in the very worst loans on the books.
Of course, taxpayers are on the hook. More government semi-socialism.
LIBERALISM AND FOREIGN POLICY
The intersection of liberalism and foreign policy is complex; as is the pursuit of a sound ‘liberal foreign policy’. Security is a primary duty of government and essential for the enjoyment of freedom in a liberal, open society; yet we cannot accept security at any price. On the one hand, Australian foreign policy must respond to threats to our immediate security and anticipate developments beyond our borders with the potential to harm our interests in the future. On the other, we need to exercise restraint and caution against unbridled and ill thought-out enthusiasm for foreign policy activism that is against the principles of limited and responsible government; and is likely to do more harm than good. Importantly, determining an appropriate balance and asking the most important questions – in particular, how these challenges and our responses relate to the promotion of global liberal order, free markets, transparent and limited governments subject to the rule of law, and sustainable prosperity for these peoples - is critical.
Much of foreign policy is about shaping an immediate tactical and diplomatic response to current developments. However, CIS is taking the lead in identifying underlying current and future trends and issues; and introducing themes that will define and shape future policy. This includes contributions to debate and discussion on issues such as immigration and refugee policy, foreign aid, and international trade that have had significant policy impact. Investigations into current and future developments in Papua New Guinea and the Pacific, as well as China and Asia in general are designed not just to inform but shape diplomatic and strategic interaction with these regions and countries. Thematic work on aspects such as American hegemony and nuclear proliferation offer fresh tools that will help advance a more responsible foreign policy.
Ultimately, the purpose of our work here is to help shape and influence a foreign policy that will promote the twin goals of a more secure Australia and an international order based on liberal values, rules of engagement and outcomes.
Leaking Crimes of State
Daniel Ellsberg's Lessons for Our Time
By JAMES BOVARD
Daniel Ellsberg is the kind of American who should receive a Medal of Freedom. Except that the Medals of Freedom are distributed by presidents who routinely give them to “useful idiots” and apologists for their wars and power grabs. It should be renamed the Medal for Enabling or Applauding Official Crimes in the Name of Freedom.
Ellsberg knowingly risked spending a life in prison to bring the truth about the Vietnam War to Americans. He had hoped truth would set Americans free from the spell of official lies. But the experience in Iraq indicates that Americans have learned little if anything from the Vietnam-era deceits.
Flora Lewis, a New York Times columnist, writing three weeks before 9/11, commented in a review of a book on U.S. government lies on the Vietnam War, “There will probably never be a return to the discretion, really collusion, with which the media used to treat presidents, and it is just as well.” But within months of her comment, the media had proven itself as craven as ever.
The following year, Ellsberg’s book — Secrets: A Memoir of Vietnam and the Pentagon Papers — came out. I should have read this book before writing the “Lying and Legitimacy” chapter in Attention Deficit Democracy. Ellsberg’s bitter experiences would have curbed my youthful idealism. His book hit the streets at a time when Americans were still inclined to see Bush through a 9/11 holy haze. His lies on Iraq were not widely recognized until after Baghdad had fallen and the WMDs failed to materialize.
Ellsberg tells the story of how, as a former Marine lieutenant with a doctorate from Harvard, he was hired by John McNaughton, the assistant secretary of defense, and started work in August 1964 on the day the Gulf of Tonkin crisis ignited. He relates receiving the “flash” wire dispatches from the USS Maddox.
Within hours after the U.S. destroyer reported being attacked by North Vietnamese PT boats, the ship’s commander had wired Washington that the reports of an attack on his ship may have been wildly exaggerated: “Entire action leaves many doubts.”
But it didn’t matter, because this was just the pretext that Lyndon Johnson was looking for. Johnson and Defense Secretary Robert McNamara raced to proclaim that the attack was unprovoked. But at a National Security Council meeting on the evening that the first report came in, Johnson asked, “Do they want war by attacking our ships in the middle of the Gulf of Tonkin?” CIA chief John McCone answered, “No. The North Vietnamese are reacting defensively to our attack on their off-shore islands. They are responding out of pride and on the basis of defense considerations.”
The fact was that the United States had orchestrated an attack by South Vietnamese commandos on North Vietnamese territory before the alleged conflict began. But Johnson lied and commenced bombing, and Congress rushed to cheer him on.
In Vietnam, as in Iraq, the U.S. government pushed hard to get an election to sanctify its puppet regime. Ellsberg, who spent two years in Vietnam after his time in the Pentagon, aided some of the key U.S. officials in this effort who sought an honest vote. But when U.S. Ambassador Henry Cabot Lodge heard their pitch, he replied, “You’ve got a gentleman in the White House right now [Johnson] who has spent most of his life rigging elections. I’ve spent most of my life rigging elections. I spent nine whole months rigging a Republican convention to choose Ike as a candidate rather than Bob Taft.” Lodge later ordered, “Get it across to the press that they shouldn’t apply higher standards here in Vietnam than they do in the U.S.”
But Lodge’s comments were downright uplifting compared with a meeting that Ellsberg attended with former Vice President Richard Nixon, who was visiting Vietnam on a “fact-finding mission” to help bolster his presidential aspirations. Former CIA operative Edward Lansdale told Nixon that he and his colleagues wanted to help “make this the most honest election that’s ever been held in Vietnam.” Nixon replied, “Oh, sure, honest, yes, honest, that’s right … so long as you win!” With the last words he did three things in quick succession: winked, drove his elbow hard into Lansdale’s arm, and slapped his own knee.
It’s hard to imagine any U.S. government official even suggesting to Bush, in his fly-bys at Camp Cupcake in Iraq, that the United States should make sure that the Iraqi elections were fair and square.
Ellsberg’s memoirs vividly explain how top officials are corrupted by possession of what they consider to be top-secret information. Ellsberg warned Henry Kissinger shortly after Nixon’s 1968 election victory that having access to classified information is “something like the potion Circe gave to the wanderers and shipwrecked men who happened on her island, which turned them into swine.”
This is the one message of the book that no longer seems relevant, since there haven’t been any swine in the White House or Pentagon for a long time.
The Pentagon Papers
In 1967, the Pentagon ordered top experts to analyze where the war had gone wrong. The resulting study contained 47 volumes of material exposing the intellectual and political follies that had, by that time, already left tens of thousands of Americans dead. After the study was finished, it was distributed to the key players and federal agencies. However, the massive study was completely ignored. At the time the New York Times began publishing excerpts in 1971, “the White House and the State Department were unable even to locate the 47 volumes.” New York Times editor Tom Wicker commented at the time that “the people who read these documents in the Times were the first to study them.”
Ellsberg helped write a portion of the papers dealing with the Kennedy administration. He was struck by the incorrigibility of U.S. policy. No matter how many Ivy League grads and whiz kids were at the helm, “There was a general failure to study history or to analyze or even to record operational experience, especially mistakes. Above all, effective pressures for optimistically false reporting at every level, for describing “progress” rather than problems or failure, concealed the very need for change in approach or for learning.”
The same failures permeate the U.S. military’s experience in Iraq. The Pentagon and White House have concocted one bogus standard after another to sanctify whatever recent policy change they announced.
Ellsberg was a gung-ho liberal Cold Warrior until the late 1960s. As he read the confidential documents that formed the basis of the Pentagon Papers, he realized that he had greatly underestimated the amount of perennial presidential deceit in America. He grasped that
the concentration of power within the executive branch since World War II had focused nearly all responsibility for policy “failure” upon one man, the president. At the same time, it gave him enormous capability to avert or postpone or conceal such personal failure by means of force or fraud. Confronted by resolute external resistance, as in Vietnam, that power could not fail to corrupt the human who held it.
Ellsberg became active with anti-war demonstrators and has great anecdotes of idiot cops at D.C. protests. The motto of the 1971 May Day anti-war protests was “If they won’t stop the war, we’ll stop the government.” This is an ideal that should not be forgotten by those in our time who have wearied of surge and postsurge nonsense.
Publishing the Papers
I was surprised to learn how hard Ellsberg had to struggle to find anyone with the gumption to go public with the 7,000 pages. Sen. George McGovern at first was interested but ducked out on putting the Papers in the Congressional Record, as did Sen. William Fulbright. On the other hand, Sen. Mike Gravel of Alaska had no fear and pulled out all the stops to get the information out.
The New York Times’s publication of the Pentagon Papers was the big breakthrough. Nixon’s Justice Department raced to get an injunction blocking publication, and later did the same when the Washington Post began publishing material Ellsberg sent it. Ellsberg responded by sending chunks of his report to newspapers around the country. The Nixon administration’s rage and machinations were the best PR the Pentagon Papers could have received.
Nixon henchman H.R. Haldeman said to Nixon on the day the Papers first hit the New York Times that the result would be that “the ordinary guy” comes to believe that “you can’t trust the government; you can’t believe what they say; and you can’t rely on their judgement. And the implicit infallibility of presidents, which has been an accepted thing in America, is badly hurt by this.”
Unfortunately, Haldeman’s fear was not borne out. Ellsberg was disappointed at the response to the Pentagon Papers: “There remained enormous resistance in the minds of voters and commentators to believing that these generalizations applied to an incumbent president.” This has been a perennial pitfall for American democracy: assuming that the most recently elected politician is an entirely different species from all the rascals who preceded him. It was especially ironic that so many Americans were so slow to recognize Nixon’s treachery.
At the start of his trial for leaking the Pentagon Papers, Ellsberg declared, “This has been for me an act of hope and of trust. Hope that the truth will free us of this war. Trust that informed Americans will direct their public servants to stop lying and to stop the killing and dying by Americans in Indochina.”
This was the type of idealism that spurred Henry Kissinger to label Ellsberg “the most dangerous man in America.”
In the new century, Ellsberg has continued speaking out, condemning official lies, and appealing to Americans to recognize that wars are far bloodier and more costly than leaders claim. In July 2006, he warned that if the United States attacks Iran, “I have no doubt that there will be, the day after or within days an equivalent of a Reichstag fire decree that will involve massive detentions in this country.” He has publicly urged other Pentagon and administration insiders to take the risk to leak key documents in order to serve truth instead of the current regime.
Unfortunately, even when government officials risk their freedom and careers to leak information, the media sometimes refuse to publish it — or they bury it until after an election — as the New York Times did with its information on Bush’s illegal warrantless wiretapping of Americans’ phone calls.
Who knows how many other leaks have never seen the light of day because of a media that kowtowed to President Bush and Vice President Cheney as if they were gods?
James Bovard serves as a policy advisor for The Future of Freedom Foundation and is the author of Attention Deficit Democracy, The Bush Betrayal, Terrorism and Tyranny, and other books.
No comments:
Post a Comment