A step in the right direction

The economy

Even worse than it looks

America's economy shrank sharply in the fourth quarter. There are few reasons for optimism

IT IS a measure of the prevailing gloom that the worst economic performance in 26 years could still be described as better than expected. Real gross domestic product fell at an annual rate of 3.8% in the fourth quarter, below the decline of 5% or more that many economists had anticipated.

However, there is precious little reason for optimism. Almost all the unexpected growth came from a small rise in business inventories. This is almost certainly because firms did not reduce production quickly enough to keep pace with slumping orders. To get inventories back in line, more production cuts in the current quarter are likely. Morgan Stanley had expected GDP to fall by 4.5% in the current quarter, but now thinks it will fall by 5.5%.

Other details are no less grim. Consumer spending sank at a 3.5% annual rate, similar to its third-quarter drop, despite a big rise in real after-tax income, thanks to the huge drop in petrol prices. Spending and incomes went in opposite directions because once-profligate consumers are now trying to save more. They put aside 2.9% of their income (after tax) in the fourth quarter, the highest rate since the beginning of 2002. They are doing so either by choice, because retirement savings have been devastated and they fear losing their jobs, or by necessity, because it has become so difficult to borrow.

Businesses are cutting back more savagely. Their investment sank by 19%, worse than any quarter in the 2001 recession which was, after all, a business investment-led slump. And that was despite some firms boosting spending to exploit a temporary tax benefit that expired at the end of the year.

Both exports and imports fell sharply, leaving no net impact on GDP (lower imports raise the calculation of GDP, while lower exports reduce it). Matters are likely to get worse. The dollar has strengthened in recent months and much of the rest of the world is in worse shape than America. According to JPMorgan, the economy in Britain probably shrank at an annual rate of 5.9% in the fourth quarter, the euro-area by 5%, and Japan by a heart-stopping 9%, in a country with no housing bubble or banking crisis.

If there is any silver lining, it is that while the recession was a year old in December, its first half was not especially deep: net GDP actually rose in the first half, and the downturn is actually a bit milder than the median post-war recession after 12 months. But the typical post-war recession was over (or close to it) by this point; this one is getting worse. Claims for unemployment insurance were high in January, sales of new homes slumped in December, and several big companies, most recently Starbucks, Boeing and Sprint Nextel, have announced thousands of job cuts.

Faint though it is, there is a glimmer of hope in financial markets: interest rates on short-term loans between banks and on longer-term corporate debt have fallen notably since the autumn, and there has been a flood of new bond issues. But that may simply be evidence that investors no longer expect a catastrophic wave of bankruptcies. It does not mean that either companies or consumers are about to open their wallets.

What could turn this around? Most recessions end as companies clear excess inventories and as households, with a boost from lower interest rates, release pent-up demand for cars and houses. This time is different. Tightened credit severely limits the ability of consumers and companies to spend even if they were so inclined.

More than usual, an end to this recession will depend on policy. Enormous hopes are riding on Barack Obama’s $819 billion stimulus package, which has passed the House of Representatives and is now being debated in the Senate. Of that sum, just $170 billion will find its way into the economy before this fiscal year ends on September 30th, largely in the form of expanded unemployment insurance benefits and reduced income tax which will make their mark within months. But most of the impact will be next year because infrastructure funds, even once the money is available, takes a long time to be spent as federal, state and local governments secure the necessary approvals and seek bids for the work. “Even ‘shovel ready’ projects will not need shovels for some time,” notes Economics from Washington, a consultancy.

Still, the package will help. The Congressional Budget Office thinks that GDP by the end of 2009 will be between 1.3% and 3.6% higher than it otherwise would have been, thanks to the stimulus. It had thought that the unemployment rate would rise from 7.2% in December to 9% by the end of this year; with the stimulus in place, it thinks it will only rise to between 7.9% and 8.6%.

But more must be done. “The real problem is a feedback loop from the economy to credit losses,” says Richard Berner of Morgan Stanley. The fiscal stimulus will achieve little until that is fixed. Thus the administration’s real work lies ahead: coming up with a bigger and more comprehensive plan for recapitalising banks and relieving them of bad loans.

A step in the right direction

Elections in Iraq

A step in the right direction

Nervous and hopeful, Iraqis vote in provincial elections on Saturday

LOCAL elections can often pass unnoticed by the world beyond. But Iraq’s provincial elections on Saturday January 31st are of greater importance than most. The polls are a first test of strength for Iraq’s political factions since a flawed vote in 2005 and should also give some guide to a general election that is due before the end of the year. If the polls on Saturday attract a decent turnout and pass off fairly and peacefully, Iraq will have taken a big step towards becoming a functioning democracy. But much could go badly.

Only 14 of Iraq’s 18 provinces will take part in the regional vote. The three Kurdish provinces in the north, and the disputed province of Kirkuk, will hold their elections later, marking that region’s semi-detached status. Better security, with American troops sitting back and leaving it to local forces, should ensure that most Iraqis with a vote will go to the polls. To this end, some 620,000 police, soldiers and other were allowed to cast advance ballots on Wednesday, freeing them for weekend duties. In a gratifying sign of how the main vote will go, turnout for early voting was said to be high.

This time around Iraq’s minority Sunnis are likely to be drawn into the political process. Dominant under Saddam Hussein, himself a Sunni, they felt shut out and demonised after the American invasion in 2003. As a result most Sunnis boycotted the vote for both national and provincial power in 2005. Therefore this election will be the first real test of Sunni loyalties. If they turn out in large numbers, that would suggest that Sunnis feel they play an important role in the new Iraq. They have begun to claim a role in rebuilding Iraq; their tribal “awakening” of recent years has helped pacify parts of the country and weaken al-Qaeda.

A Sunni resurgence threatens the grip on power of Shia parties (and the Kurds in the north). And unlike the election of 2005, when the factions stood together as one group, this time the separate Shia parties are standing against one another. The vote will pit two big Shia coalition partners against each other, in the form of Dawa and the Islamic Supreme Council of Iraq (ISCI). The ISCI is close to Iran, and complains that Dawa, the party of Nuri al-Maliki, Iraq’s prime minister, is using the organs of the state to benefit politically.

Dawa, riven by factionalism, is a shadow of its former self. Mr Maliki has thrown his support in the provincial elections behind a wide coalition of parties called State of Law, stressing populist measures to buttress security and restore power and water. This coalition prefers secular to overt religious messages. In general, fewer parties are styling themselves as explicitly Islamic in this election, with less explicit emphasis, too, on identities as Sunni or Shia.

Polling information is patchy. But Mr Maliki’s bunch, who advocate a strong centralised Iraq (as opposed to ISCI, which wants a federal Iraq with a strong Shia super-region in the south), is expected to do well. So too the block of Iyad Allawi, the secular Shia interim prime minister who was installed by the coalition shortly after the American-led invasion. Mr Allawi’s candidates did poorly in 2005, disappointing his Western patrons, but if his party prospers on Saturday he may enjoy a second political life.

A smooth election is far from guaranteed, of course. Some 14,400 candidates from 400 parties are seeking 440 seats on provincial councils. Allegations of vote-buying—telephone cards and other small gifts have been passed out with registration materials—have marred the run-up to the election. Security remains a pervasive concern. On Thursday three candidates were killed in separate incidents across the country. Stories of intimidation and violence are expected on polling day, too.

The results will take a long time coming in, perhaps fuelling fears of vote-rigging and perhaps giving losers an excuse not to accept the outcome. Armed troublemakers associated with Muqtada al-Sadr, a firebrand cleric, have been banned from running, since he violated Iraqi law by running a militia. Independent Sadrists will stand, but this does not mean they are ready to accept the democratic order.

Getting Iraqis to accept the rules of the game, rather than seeing politics as a zero-sum scramble for spoils, will take a few elections yet. Mostly clean and peaceful provincial elections on Saturday would set Iraq on a firmer course. National elections at the end of the year will be even more important. If both elections were to go smoothly, an exit for American soldiers—such as that promised by Barack Obama within a couple of years—will be more likely too.

Friday, January 30, 2009

Now Is No Time to Downplay North Korea

Now Is No Time to Downplay North Korea

JOHN R. BOLTON

Yesterday, North Korea declared all its political and military agreements with the South "dead" -- the latest in a string of confrontational moves taken by Pyongyang against Seoul and the U.S. In the past few weeks, the North confirmed it possessed enough plutonium for four to five nuclear warheads; threatened to retain its nuclear weapons until America withdraws its nuclear protection from the South; denounced the appointment of Seoul's new unification minister as "an open provocation"; and proclaimed that a routine South Korean military exercise had so inflamed tensions that "a war may break out any time."

The Associated Press concluded from all this that North Korea "sounded open to new ideas to defuse nuclear-tinged tensions." Some State Department quarters will warmly receive that analysis; a senior careerist at State once called earlier North Korean provocations "a desperate cry for help." Others will say Kim Jong Il just wants attention, that these moves are simply a "coming out" exercise after his recent illness.

Unfortunately, early signs are that Secretary of State Hillary Clinton is falling prey to such logic and downplaying the significance of Pyongyang's nuclear program. It may well be that the Obama administration wants to emphasize domestic economic issues and limit foreign affairs priorities to the Arab-Israeli conflict. But neglecting North Korea is a dangerous gamble with very high stakes.

Most troubling is Mrs. Clinton's unwillingness to acknowledge North Korea's uranium-enrichment efforts. In her confirmation hearing, she said these efforts were "never quite verified." Although we know precious little about the North's progress, including how much weapons-grade uranium may have been produced, Mrs. Clinton cast doubt on whether uranium enrichment was a serious subject at all. Pressed on this point on Jan. 23 at State's daily briefing, the department spokesman said "we don't know" whether such a program exists.

Of course, the easiest way to solve a difficult problem is to conclude there really isn't one. (This was John Kennedy's technique for eliminating the U.S. "missile gap" with the Soviet Union, which he had deployed so effectively against Richard Nixon.) For years, State's permanent bureaucracy has been trying to wish away North Korea's uranium-enrichment program. If President Barack Obama's State Department takes this strategy, Pyongyang will once again have occasion to contemplate the profound wisdom of the ancient North Korean riddle: Why negotiate with the Americans when we do so well by letting them negotiate with themselves?

Equally tempting -- and equally dangerous -- is the notion that North Korea is not a truly pressing problem. After all, the argument goes, the North already has nuclear weapons, so unlike Iran there is no line to prevent it from crossing. Accordingly, there is no urgency to reconvene the six-party talks with the Koreas, Russia, China and Japan to end the North's nuclear program, and certainly not to take any concrete measures to apply meaningful pressure to Kim Jong Il's regime.

By contrast, George Mitchell, the newly appointed special envoy to the Middle East, arrived in the region five days after being named, and the endless cycle of meetings on Iran's nuclear program among the U.N. Security Council's five permanent members and Germany will resume in days. The special envoy for Afghanistan-Pakistan is gearing up rapidly. And there's now even a special envoy for climate change.

But so far, there is no special envoy for North Korea. Mrs. Clinton's first press conference last Tuesday provided another opportunity to announce the position and name the envoy, but she passed, even though she was asked specifically about the six-party talks. There are persuasive arguments against reviving the unhappy Clinton administration practice of unleashing numerous Big Beast envoys in the State Department. But make no mistake: In such an ecosystem, if your issue does not have a Big Beast, then it is not a Big Issue.

The belief that North Korea is not an imminent danger is closely related to the fallacy that it is "merely" a threat to peace and security in Northeast Asia, a longstanding State Department fixation. In fact, North Korea is an urgent threat in the Middle East, both because of its nuclear program and its strenuous efforts to proliferate ballistic missile technology there.

The clone of North Korea's Yongbyon reactor -- under construction in Syria until it was destroyed by Israel in September 2007 -- demonstrates beyond debate how the North's nuclear program contributes directly and palpably to Middle East tensions. Trying to ignore or downplay the relationship guarantees that we will resolve neither Pyongyang's, nor Tehran's, nuclear ambitions.

Ironically, North Korea's provocations may well precipitate the appointment of a U.S. special envoy to continue the six-party talks. If so, the North will have succeeded yet again, suckering Washington into more fruitless negotiations which have no prospect of eliminating the North Korean threat. By whittling away our time, they will continue to prevent the U.S. from implementing stronger measures to undermine Kim Jong Il's regime.

Mr. Bolton, a senior fellow at the American Enterprise Institute, is the author of "Surrender Is Not an Option: Defending America at the United Nations" (Simon & Schuster, 2007).

California's 'Green Jobs' Experiment Isn't Going Well

California's 'Green Jobs' Experiment Isn't Going Well

STEPHEN MOORE

Los Angeles

Gov. Arnold Schwarzenegger was all smiles in 2006 when he signed into law the toughest anti-global-warming regulations of any state. Mr. Schwarzenegger and his green supporters boasted that the regulations would steer California into a prosperous era of green jobs, renewable energy, and technological leadership. Instead, since 2007 -- in anticipation of the new mandates -- California has led the nation in job losses.

The regulations created a cap-and-trade system, similar to proposed federal global-warming measures, by limiting the CO2 that utilities, trucking companies and other businesses can emit, and imposed steep new taxes on companies that exceed the caps. Since energy is an input in everything that's produced, this will raise the cost of production inside California's borders.

Now, as the Golden State prepares to implement this regulatory scheme, employers are howling. It's become clear to nearly everyone that the plan's backers have underestimated its negative impact and exaggerated the benefits. "We've been sold a false bill of goods," is how Republican Assemblyman Roger Niello, who has been the GOP's point man on environmental issues in the legislature, put it to me.

The environmental plan was built on the notion that imposing some $23 billion of new taxes and fees on households (through higher electricity bills) and employers will cost the economy nothing, while also reducing greenhouse gases. Almost no one believes that anymore except for the five members of the California Air Resources Board (CARB). This is the state's air-quality regulator, which voted unanimously in December to stick with the cap-and-trade system despite the recession. CARB justified its go-ahead by issuing what almost all experts agree is a rigged study on the economic impact of the cap-and-trade system. The study concludes that the plan "will not only significantly reduce California's greenhouse gas emissions, but will also have a net positive effect on California's economic growth through 2020."

This finding elicited a chorus of hallelujahs from environmental groups. The state finally discovered a do-good policy that pays for itself. Californians can still scurry around in their cars, heat up their Jacuzzis, and help save the planet. But there was a problem. The CARB had commissioned five economists from around the country to critique this study. They panned it.

Harvard's Robert Stavins, chairman of the federal Environmental Protection Agency's economic advisory committee under Bill Clinton, told me that "None of us knew who the other reviewers were, but we all came up with almost the same conclusion. The report was severely flawed and systematically underestimated costs." Another reviewer, UCLA Prof. Matthew E. Kahn, a supporter of the new regulations, criticized the "free lunch" aspect of the report. "The net dollar costs of each of these regulations is likely to be much larger than is reported," he concluded. Mr. Stavins points out that if these regulations are a net boon for businesses and the economy, "why would you need to impose regulations like cap and trade?"

The Sacramento Bee, which has editorialized in support of the new regulations, was aghast at CARB's twisted science. We have to "be candid about the real costs of the transition," a cautionary editorial advised. "Energy prices will rise, and major capital investment will be needed in public transit and new transmission lines. Industries that are energy intensive will move elsewhere."

The green lobby has lectured us for years that global warming is all about the sanctity of science. Those who question the "scientific consensus" on catastrophic atmospheric changes are belittled as "deniers." Now, in assessing the costs, the greens readily cook the books and throw good science out the window. "To most of the most strident supporters of this legislation," says Mr. Niello, "the economic costs don't really matter anyway, because we are supposedly facing an environmental apocalypse."

Mr. Schwarzenegger fits into that camp. He recently declared: "I recommend very strongly that we move forward . . . . You will always have people saying this will lose jobs."

Meanwhile, the state is losing jobs, a lot of them. California's unemployment rate hit 9.3% in December, up from 4.9% in December 2006. There are now 1.5 million Californians out of work. The state has the fourth-highest housing foreclosure rate in the nation, has lost more businesses than any state in recent years, and is facing a $40 billion deficit. With cap and trade firmly in place, the economic situation is only likely to get worse.

Other states are plundering the Golden State's industries by convincing businesses to pick up stakes and move out before the cap-and-trade earthquake hits. Governors and Washington politicians who want to reduce their "carbon footprint," but are worried about the more immediate crises of cascading unemployment, unbalanced budgets, and the housing-market collapse, would be wise not to follow California's lead. Green policies have a tendency to push states into the red.

Mr. Moore is senior economics writer for the Wall Street Journal editorial page.

The Coach's Keys to the Game

The Coach's Keys to the Game

MATTHEW KAMINSKI

Raleigh, N.C.

As coach, Bill Cowher won and lost a Super Bowl. Tomorrow, at the 43rd installment of the greatest sporting show in the land, he may be the only football fan genuinely able to relish any outcome. Though he left the NFL two years ago, his spirit will be on both sides of the field in Tampa.

The Steelers kept the main ingredients of his 2006 championship squad -- including stars Ben Roethlisberger, Hines Ward and Troy Polamalu, as well as the defensive coaching staff. Set those Allegheny loyalties against close Cardinal links. Head Coach Ken Whisenhunt and assistants Russ Grimm and Kevin Spencer worked for him in Pittsburgh before "Whis" -- his prominent jaw and high forehead vaguely evoking his mentor -- got the top job in Arizona in 2007.

Even "off the record," Mr. Cowher won't reveal his favorite in this game. "However it turns out, I'll be happy," he says over coffee this week near his home here. "Pittsburgh and the Rooneys [who own the Steelers] have a chance to separate themselves from every other franchise with a sixth championship -- deservedly so. . . . It is a class organization, starting at the top." At the same time, by bringing the perennially woeful Cardinals to their first Super Bowl, "what Kenny's done is almost change the whole culture in Arizona, it's been nothing less than spectacular." He's talked to the Cardinals coach throughout the season.

Ismael Roldan

Bill Cowher

With the Super Bowl not on CBS -- where he works for its "NFL Today" show -- Coach Cowher's keys to the game this week come exclusive to this newspaper. "The one thing Arizona can do is score, the one thing Pittsburgh can do is defend," he says, but keep an eye on the "undercards" on the other side of the line. In the playoffs, the unheralded Arizona defense forced critical turnovers while Pittsburgh's offense, not always pretty, found ways to win in the fourth quarter. "A big thing, I know it seems obvious, will be the turnover-takeaway [ratio]."

At quarterback, the game offers a wonderful contrast. Kurt Warner, 37-years-old, resurrected his career, leading a second team to the championship; he was the most valuable player for the victorious St. Louis Rams in 2000. A decade his junior, "Big Ben" will be looking for his second ring with Pittsburgh. Warner has already earned his place in the Hall of Fame, says Mr. Cowher, staking out a mildly controversial position, "but obviously a win here will cement him." As for his former quarterback, "he could go down as one of the greatest quarterbacks to play the game." Even with Roethlisberger's not-so-great statistics? "He's never been about stats, he's about winning," Mr. Cowher says. "There's a lot to be said for that. Ben has a way of making a play that's not there."

Speaking from experience, he continues, "Undesigned plays will take place more with him than with Kurt. Kurt is more of a pocket quarterback who runs an offense that's designed. The success of Ben is more things that are improvised. Let me tell you, when it's in the fourth quarter and you get the look on his face, he's got the confidence he's not going to be denied. If I was Arizona I would not want Pittsburgh within a touchdown of me in the fourth quarter because he has done this time and time again and he will be in his domain."

Mr. Cowher played linebacker at North Carolina State and in the NFL, and started as defensive coach. But the most important player in the pros, he says, is the field general. "Let's face it: In the NFL, it's about the quarterback. If you don't have a good quarterback, if you don't have a guy who can win a game for you, what that says is you have a smaller margin of error." In his 15 years at Pittsburgh, Mr. Cowher got his team to the playoffs 10 times and advanced to six conference championship games. He won the Super Bowl only after Ben Roethlisberger came to town.

In any case, free agency and the salary cap greatly reduce the margin of error for professional teams. This Super Bowl is an unexpected finale to one of the most entertaining seasons in memory. The top seeds in both conferences went down in the playoffs and the 9-7 Cardinals dispatched three strong teams to get to Florida. Anyone can win. Which puts a bigger burden on coaches and the front office to plan constantly as players come and go and teach them quickly once they get there. With teams no longer able to build chemistry over the years, management chemistry is the critical off-field ingredient, this coach says. "You have to have everyone reading from the same page. If there is division within the structure of the organization, it'll seep down onto the field."

Today's NFL also makes a good college draft more crucial than ever. If good, the young players will stay at least four years, providing the nucleus of a team. "Younger players are having to play quicker," Mr. Cowher says. "Even if it's just a role, they're the guys you have because you can't build through free agency. A lot of guys are trying to buy themselves a winning team. It just doesn't work that way."

He won't name owners' names.

Coach Cowher, who stepped down voluntarily to see his kids finish school, may be on the job market soon. The latest spate of coach firings -- with 11 new faces set to lead next season -- reflects a recognition of the coach's all-important role in the sport, and an eagerness for quick results. But Mr. Cowher, the longest-serving coach of the past two decades, doesn't like the trend.

"When you see some of the people coming around and have immediate success" -- rookie coaches broke out in Atlanta, Miami and Baltimore this season -- "there are some teams that are less patient. I've never been one to be too judgmental because whoever you are has a right to run his team the way he deems it should be run. . . . [But] there's a lot to be said for continuity. When you start over, everyone has to start over."

Pittsburgh's Rooney family, stewards of the unique Steeler culture the past 76 years, hired only three coaches since the NFL merged in 1970, each time tapping a young, relative unknown, the latest being 36-year-old Mike Tomlin.

Coach Cowher grew up outside Pittsburgh and on the Steelers. "Even though there are no more steel mills there, it's always been a town that has taken pride in being hard working, blue collar, no-nonsense, roll up your sleeves," he says in his thick Pittsburgh accent. "It's one of those places when you run the ball for four yards you get a standing ovation. In other places it'd be a 15 yard pass."

The game has changed greatly for players since his playing days. Mr. Cowher cites the media scrutiny, the increasing specialization, and the complexity of play schemes. And of course the money. During the off-season while with the Browns in the early 1980s, Mr. Cowher worked as a substitute teacher in Cleveland. Now football's a year-around job.

But he doesn't think millionaire salaries spoil the game, or make players harder to discipline. "Yeah, you say they make this, this and this, but they're still playing a kid's game, they're still driven by the crowd, they still want to be recognized as the best at what they do," he says. "They're prideful men. You don't get to that level unless you've been pretty good at what you've done. In hard times the greatest motivation you want to hear is: Tell me I can't do something, I'll show you that I can."

On the sidelines during games, Mr. Cowher's twisted, angry face took on mythical status among Pittsburgh fans. He wore his emotions openly and had no problem chewing players out: "No, because I think they respect that. I think the fact that you've played the game, that you've had success coaching the game, they respect that. Treat them like men. But you make sure you also pat them on the back. You know the one thing I always tried to do is I was always the first one to tell them they were doing it right. That way when you tell them it's not being done right, they'll listen to you."

Here's the Cowher method in action, from his talk to the team before Super Bowl XL: "They don't think that you can do it, that you can sustain it. It's about every man playing hard on every snap. You go out there, you have fun and you hit them right in the face."

After the Steelers beat the Seattle Seahawks in that game, Mr. Cowher's three daughters and wife, Kaye, rushed out to give him hugs -- a touching glimpse of a testosterone-charged coach surrounded by the women of his life. His daughters followed in the footsteps of their mother, Kaye, a basketball standout at N.C. State and in the first women's professional league. Meagan, the eldest, was a three-time All-Ivy player at Princeton. Smiling, Mr. Cowher says he can coach them on their mindset but "I'm not allowed to talk to them about their technique. My wife thinks I don't know anything.

"To me sports is about mental toughness," he says. "When you take a mentally tough individual, someone who is not gonna be deterred by getting knocked down and not gonna be thinking they can walk on water when they have success, that's to me someone who's tough, mentally tough. I want my kids to be able to do that because I think it carries over in life."

With the nest emptying this fall when his youngest heads off to college, Mr. Cowher figures in speculation any time an opening comes up -- at the Jets and Browns last month, maybe with the Giants or Redskins down the road. He misses Sundays, he says, but not the coach's lifestyle. For now, regular racquetball and golf, a young yellow Labrador, and piano lessons keep him happy in Raleigh. And he seems to like TV more than he expected to. Sitting alongside Boomer Esiason, Dan Marino and Shannon Sharpe each Sunday in New York, he is calm and focused, leaving his sideline outbursts behind him. James Brown, the "NFL Today" host, says he brings a coach's intensity to the set that makes "you see why he was so successful."

Mr. Cowher marvels at the game's status as America's real pastime, but sees some clouds on the horizon. Possible labor strife looms with the expiration of the collective bargaining agreement. A possible outcome could be the end of a salary cap, perhaps for the 2010 season, favoring deep-pocketed teams in bigger media markets. Mr. Cowher thinks parity gives the NFL the edge over other sports. Fans like the game as it is today. "We just talked about this being one of the most exciting years, where the Arizonas are competing with the New Yorks and playing Pittsburgh in the Super Bowl. My worry is you get into an uncapped system, does that just bring the New Yorks and Chicagos into the forefront?"

Joe Gibbs and Bill Parcells, who also took breaks after their Super Bowl wins, came back to coaching but never managed to win another championship. I ask if he worries he might lose his edge on this sabbatical? "The one thing I've always been driven by is when someone tells me I can't do something."

Mr. Kaminski is a member of the Journal's editorial board.

Bush Hatred and Obama Euphoria Are Two Sides of the Same Coin

Bush Hatred and Obama Euphoria Are Two Sides of the Same Coin

PETER BERKOWITZ

Now that George W. Bush has left the harsh glare of the White House and Barack Obama has settled into the highest office in the land, it might be reasonable to suppose that Bush hatred and Obama euphoria will begin to subside. Unfortunately, there is good reason to doubt that the common sources that have nourished these dangerous political passions will soon lose their potency.

At first glance, Bush hatred and Obama euphoria could not be more different. Hatred of Mr. Bush went well beyond the partisan broadsides typical of democratic politics. For years it disfigured its victims with open, indeed proud, loathing for the very manner in which Mr. Bush walked and talked. It compelled them to denounce the president and his policies as not merely foolish or wrong or contrary to the national interest, but as anathema to everything that made America great.

In contrast, the euphoria surrounding Mr. Obama's run for president conferred upon the candidate immunity from criticism despite his newness to national politics and lack of executive experience, and regardless of how empty his calls for change. At the same time, it inspired those in its grips, repeatedly bringing them tears of joy throughout the long election season. With Mr. Obama's victory in November and his inauguration last week, it suffused them with a sense that not only had the promise of America at last been redeemed but that the world could now be transfigured.

In fact, Bush hatred and Obama euphoria -- which tend to reveal more about those who feel them than the men at which they are directed -- are opposite sides of the same coin. Both represent the triumph of passion over reason. Both are intolerant of dissent. Those wallowing in Bush hatred and those reveling in Obama euphoria frequently regard those who do not share their passion as contemptible and beyond the reach of civilized discussion. Bush hatred and Obama euphoria typically coexist in the same soul. And it is disproportionately members of the intellectual and political class in whose souls they flourish.

To be sure, democratic debate has always been a messy affair in which passion threatens to overwhelm reason. So long as citizens remain free and endowed with a diversity of interests and talents, it will remain so.

In October 1787, amid economic crisis and widespread fears about the new nation's ability to defend itself, Alexander Hamilton, in the first installment of what was to become the Federalist Papers, surveyed the formidable obstacles to giving the newly crafted Constitution a fair hearing. Some would oppose it, Hamilton observed, out of fear that ratification would diminish their wealth and power. Others would reject it because they hoped to profit from the political disarray that would ensue. The opposition of still others was rooted in "the honest errors of minds led astray by preconceived jealousies and fears."

Indeed, the best of men, Hamilton acknowledged, were themselves all-too-vulnerable to forming ill-considered political opinions: "So numerous indeed and so powerful are the causes, which serve to give a false bias to the judgment, that we upon many occasions, see wise and good men on the wrong as well as on the right side of questions, of the first magnitude to society."

In surveying the impediments to bringing reason to bear in politics, it was not Hamilton's aim to encourage despair over democracy's prospects but to refine political expectations. "This circumstance, if duly attended to," he counseled, "would furnish a lesson of moderation to those, who are ever so much persuaded of their being in the right, in any controversy."

As Hamilton would have supposed, the susceptibility of political judgment to corruption by interest and ambition is as operative in our time as it was in his. What has changed is that those who, by virtue of their education and professional training, would have once been the first to grasp Hamilton's lesson of moderation are today the leading fomenters of immoderation.

Bush hatred and Obama euphoria are particularly toxic because they thrive in and have been promoted by the news media, whose professional responsibility, it has long been thought, is to gather the facts and analyze their significance, and by the academy, whose scholarly training, it is commonly assumed, reflects an aptitude for and dedication to systematic study and impartial inquiry.

From the avalanche of vehement and ignorant attacks on Bush v. Gore and the oft-made and oft-refuted allegation that the Bush administration lied about WMD in Iraq, to the remarkable lack of interest in Mr. Obama's career in Illinois politics and the determined indifference to his wrongness about the surge, wide swaths of the media and the academy have concentrated on stoking passions rather than appealing to reason.

Some will speculate that the outbreak of hatred and euphoria in our politics is the result of the transformation of left-liberalism into a religion, its promulgation as dogma by our universities, and students' absorption of their professors' lesson of immoderation. This is unfair to religion.

At least it's unfair to those forms of biblical faith that teach that God's ways are hidden and mysterious, that all human beings are both deserving of respect and inherently flawed, and that it is idolatry to invest things of this world -- certainly the goods that can be achieved through politics -- with absolute value. Through these teachings, biblical faith encourages skepticism about grand claims to moral and political authority and an appreciation of the limits of one's knowledge, both of which well serve liberal democracy.

In contrast, by assembling and maintaining faculties that think alike about politics and think alike that the university curriculum must instill correct political opinions, our universities cultivate intellectual conformity and discourage the exercise of reason in public life. It is not that our universities invest the fundamental principles of liberalism with religious meaning -- after all the Declaration of Independence identifies a religious root of our freedom and equality. Rather, they infuse a certain progressive interpretation of our freedom and equality with sacred significance, zealously requiring not only outward obedience to its policy dictates but inner persuasion of the heart and mind. This transforms dissenters into apostates or heretics, and leaders into redeemers.

Consequently, though Bush hatred may weaken as the 43rd president minds his business back home in Texas, and while Obama euphoria may fade as the 44th president is compelled to immerse himself in the daunting ambiguities of power, our universities will continue to educate students to believe that hatred and euphoria reflect political wisdom. Urgent though the problem is, not even the efficient and responsible spending of a $1 trillion stimulus package would begin to address it.

Mr. Berkowitz is a senior fellow at Stanford University's Hoover Institution.