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June 2006

Ron Suskind's "The One Percent Doctrine"

Ron Suskind (2006), The One Percent Doctrine: Deep Inside America's Pursuit of Its Enemies since 9/11 (New York: Simon and Schuster: 0743271092).

The opening of Ron Suskind's The One Percent Doctrine:

Ron Suskind: The "what ifs" can kill you.... [I]n terms of the tragedy of 9/11, a particular regret lingers for those who might have made a difference. The alarming August 6, 2001, memo from the CIA to [Bush]--"Bin Laden Determined to Strike in US"--has been widely noted in the past few years. But also in August CIA analysts flew to Crawford to personally brief the President--to intrude on his vacation with face-to-face alerts.

The analytical arm of CIA was in a kind of panic mode.... They didn't know place or time... but something was coming. The President needed to know.

Verbal briefings of George W. Bush are acts of almost inestimable import... more so than... for other recent presidents. He's not much of a reader... never has been... not a President who sees much value in hearing from a wide array of voices.... But he's a very good listener and an extremely visual listener. He sizes people up swiftly and aptly... and trusts his eyes. It is a gift, this nonverbal acuity.... What does George W. Bush do? He makes it personal.... The expert... has done the hard work... [Bush] tries to gauge how "certain" they are of what they say....

The trap, of course, is that while these tactile, visceral markers can be crucial... they sometimes are not. The thing to focus on, at certain moments, is what someone says, not who is saying it, or how they're saying it.

And, at an eyeball-to-eyeball intelligence briefing during this urgent summer, George W. Bush seems to have made the wrong choice.

He looked hard at the panicked CIA briefer.

"All right," he said. "You've covered your ass, now."

One thing in Suskind's picture is very different from what I hear. Suskind says that Bush has "a gift, this nonverbal acuity." That's not what my sources who have dealt with Bush say. They say, by contrast, that Bush is quite bad at sizing people up--unable to distinguish who is telling him pleasing lies from who is telling him the truth. In fact, uniquely bad. Vastly worse than any previous president in living memory. And stubborn too: once Bush has made a bad decision, he will not even think of reversing it.

What is The One Percent Doctrine about? It is the CIA-view account of the first three years after 9/11. It tells the story of the War on Terror fought by the CIA. It tells the story of the War on Iraq that Cheney and Rumsfeld convinced Bush had to be fought--although it never explains why they thought it had to be fought, and why they thought it had to be fought with too few and the wrong kind of forces. And it tells the story of the War on the CIA waged by Cheney, Rumsfeld, Bush, and Rice--a war that in the book's view has left us far less able to fight the real War on Terror than we should be today.

Impeach George W. Bush. Impeach him now.

Musing About "Hard Landing" Scenarios

Brad Setser muses about the sitch:

RGE - A hard landing in 2006 -- just not in the US?: Brad Setser | Jun 18, 2006

Nouriel and I postulated back in early 2005 that there was a meaningful risk that the next "emerging market" crisis might come from the US -- and it might come sooner than most expected.... Why the emphasis on central banks? Simple: they have been the lender of last resort for the US, financing the US when private markets don't want to.... [A] truly bad scenario for the US seemed to require a change in central banks' policies.... It sure doesn't look like sudden stops in financial flows and sharp markets moves have been banished from the international financial system. Certainly not this year. They just didn't strike the US, but other countries with large and rising current account deficits.

Iceland's currency is way down.... The Turkish lira is way down....

Currency collapses do not necessarily translate into economic slumps. That was a key point that the Federal Reserve has made in response to fears about a US hard landing. A fall in the currency doesn't always translate into higher interest rates, at least in post-industrial countries.... The US, thankfully, has financed itself by selling dollar-denominated debt, pushing currency risks onto its creditors....


My hypothesis is threefold.

In April, the G-7 communique triggered a fall in the market's willingness to finance US deficits.... Central banks financed the US when markets didn't want to. In May and early June, folks who borrowed dollars and yen to buy emerging market equities... sold their emerging market equities... deleveraging. The net effect has been to help finance the US....

My question: What happens once this process is over?...

If I had to guess, I would say Bill Gross (quoted in Business Week) is right.
It's like Peter Pan who shouts, "'Do you believe?' And the crowd shouts back, in unison, 'We believe.'" You can believe in fairy tales and Peter Pan as long as the crowd shouts back, "we believe." That's what the dollar represents, a store of value that people believe in. They can keep on believing, but there comes a point that they don't.

Greenspan was here two months ago and talked with us for two hours. The most interesting point was his comment that there will come a time when foreign central banks and foreign investors reach saturation levels with their dollar holdings, and so he sort of drew his hand across his neck as if they've had it. Why can't they keep on swallowing dollars? Logic would suggest that these things start to fray at the fringes. Once the snowball starts it can really get going....

A big fall in the dollar isn't bad for the US. A big fall in financial inflows that led to a rise in US interest rates though is another story. A 200 bp move is not so big for emerging economies, but it is big for the US. And because the US financial system is much more leveraged, it would also have much bigger consequences...

Why Oh Why Are We Ruled by These Liars?

Like calling someone who runs a company's in-house travel department the COO:

Ron Suskind, The One Percent Doctrine, p. 101: The first application of the new rules... would be to Zubaydah.... [T]he value of his capture had already been oversold... and Zubayda wouldn't talk. Tenet was pushing... for a surprise... which he could then deliver to Bush--evidence that would, after the fact, support [Bush's] public statements....

"Around the room a lot of people just rolled their eyes.... Bush and Cheney knew what we knew about Zubaydah.... It was like calling someone who runs a company's in-house travel department the COO," said one top CIS official.... What they'd soon realize was that this was [Bush's] management style. A way, as he would often quip, to push people "to do things they didn't think they were capable of."

Impeach George W. Bush. Impeach him now.

Where Oh Where Are the Cedars of Lebanon?

James Wimberley writes:

The Reality-Based Community: Dem dry bones: James Wimberley: In Sunday's C of E lectionary, Ezekiel sees cedar trees like this in Israel (KJV):

17:22 Thus saith the Lord GOD; I will also take of the highest branch of the high cedar, and will set it; I will crop off from the top of his young twigs a tender one, and will plant it upon an high mountain and eminent:

17:23 In the mountain of the height of Israel will I plant it: and it shall bring forth boughs, and bear fruit, and be a goodly cedar: and under it shall dwell all fowl of every wing; in the shadow of the branches thereof shall they dwell.

God's silviculture here is peculiar.

You can't grow a cedar from a cutting.... [T]he natural reading is that... Ezekiel... went into exile in Babylonia with King Jehoiachin. The trees available in [Babylon] place were... fruit trees - olives, apricots - which can reproduce from cuttings.... It seems likely that Ezekiel (writing from 592 to 570 BCE) and his audience had never seen a forest of cedars; probably any forest.

Deforestation in the Near East started long before the time of Ezekiel. Richard Cowen of UC Davis tells the story.... I'll only lift two standard references from him.

In the world's oldest book... Gilgamesh (ca. 2000 BCE), the heroes Gilgamesh and Enkidu go on a destructive logging expedition to Anatolia.... Princes like Gilgamesh and Solomon needed timber for prestige buildings, but the real damage was done by inefficient charcoal smelting on a huge scale....

Plato showed a melancholy understanding of the changes in the Critias:

[T]here are remaining [in Attica] only the bones of the wasted body.... But in the primitive state of the country, its mountains were high hills covered with soil, and the plains... were full of rich earth, and there was abundance of wood in the mountains. Of this last the traces still remain....

The typical Mediterranean mountain landscape left by Bronze and Iron Age asset-stripping is denuded to Plato's skeleton.... Old forests are rare in the region - the Trodos forest in Cyprus was saved by a combination of conservative monkish landowners and a British colonial ban on goats; those of inland Sardinia by remoteness. The cedars of Lebanon are reduced to a few small stands.

Reafforestation in these conditions is painful and expensive.... A word you don't hear much in the climate change debate is hysteresis. Going back on a big environmental change is very hard work...

The Bush Doctrine: Make Enemies Who Broadcast 24/7 Worldwide

The Bush doctrine: make as many enemies with 24/7 access to communications satellites as possible:

Ron Suskind, The One Percent Doctrine, p. 137: Tapes were delivered directly to Al Jazeera.... Bin Laden, and Al Qaeda, were showing that nonstate actors could also mount a kind of message power... speaking in elegant Arabic about the challenge Muslims now face from the American Goliath, was too good a show....


Tenet pressed [al-Thani]--to rein in [Al Jazeera]. The emir explained... a hard-and-fast rule to never get involved in issues of coverage. There was nothing he could do.

The CIA saw its options more broadly. As Krongard sais, "It came down to a principle you'd hear again and again.... Talk to them in a way they understand."

On November 13... a U.S. missile obliterated Al Jazeera's [Kabul] office.... "This office has been known by everybody, the American airplances kno the location of the office," said Al Jazeera's managing director, Mohammed Jasim al-Ali. "They know we are broadcasting from there."

All that, in fact, was correct.

Inside the CIA, and White House, there was satisfaction that a message had been sent to Al Jazeera.

Impeach George W. Bush. Impeach him now.

To Rumsfeld, Al Qaeda Is the Adversary and CIA Is the Enemy

To Donald Rumsfeld, Al Qaeda is the adversary and CIA is the enemy:

Ron Suskind, The One Percent Doctrine, p. 77: Rumsfeld told a group of senior Pentagon aides, "I never again want our army to arrive somewhere and meet the CIA on the ground." to a gathering of top generals in "the tank," the Joint Chiefs' secure conference room, he was even more succinct: "Every CIA success," he told them, "is a DoD failure."...

Impeach George W. Bush. Impeach him now.

More Illusions of George Tenet

Slam dunk:

Ron Suskind, The One Percent Doctrine , p. 188: Bush then turned to Tenet and said, "I've been told all this intelligence about having WMD and this is the best we've got?"

Tenet, according to Woodward's account, then rose, threw up both arms in the air, and said, "It's a slam dunk case!"

The account of the meeting... was provided to Woodward by White House officials.... [Bush]... extensively briefed before his sit-down meeting with Woodward... told [Woodward]... that Tenet's reassurance "was very important."...

Tenet and McLaughlin don't remember the meeting very well. Tenet... doesn't actually remember ever saying "slam dunk." Doesn't dispute it. Just doesn't remember it. McLaughlin said he never remembered Tent saying "slam dunk" either... doesn't recall Tenet ever... jumping up and waving his arms.

He and Tenet have both told close friends that it was a marketing meeting, not about the actual research, but about presentation. This may be a fine point ofr distinction, but... context is important.... [Bush's] question, McLaughlin recalled, was "whether we could craft a better pitch than this--a PR meeting--it certainly wasn't about the nature of the evidence."

There's one other thing McLaughlin remembers clearly.... McLaughlin said something he'd said several times: "George, sometimes I think we need to be very careful about what we say in that room."

Tenet disagreed. "No, what we say in there won't come back to haunt us. It's what we write down. That's the permanent record. That's what'll count."

Impeach George W. Bush. Impeach him now.

The Illusions of George Tenet

The cossacks--in this case, Condi Rice--work for the Czar--George W. Bush

Ron Suskind, The One Percent Doctrine, p. 248: Tenet continued to search for a way to absolve Bush of any involvement. He'd say, several times, to aides and close associated that "this is being driven by Condi" and that "this isn't the President."

Time and again, the same response would come back: "Jesus, George. She works for him."

Greg Mankiw Refers Everyone to Jason Furman on Health Insurance

Greg Mankiw approvingly cites Jason Furman on health insurance:

Greg Mankiw's Blog: Furman on Health Insurance: Economist Jason Furman, a frequent adviser to Democratic candidates, has a new article on health insurance that is well worth reading. In this excerpt, Jason points out that our tax code leads to excessive use of health insurance:

[I]f your employer pays $1,000 in premiums to your insurance company, that money is effectively tax deductible to you. But if your employer raises your salary by $1,000 and you use the extra money to pay for medical bills, you generally will not get a tax deduction. As a result, many people end up with more-generous health insurance plans than they would otherwise choose to have. These plans have lower deductibles, lower co-payments, and lower co-insurance and are often focused around providing first-dollar coverage for routine medical expenses, rather than genuine insurance. As a result, individuals in the health system are often spending someone else's money, which is never a recipe for cost consciousness. Unfortunately, ultimately it is not really someone else's money: the cost is paid in higher premiums, which in turn are reflected in lower wages.

Most economists agree with this analysis (see my previous post on health insurance).

Jason suggests several policy responses, such as limiting the amount of health insurance that is tax-deductible. That proposal has my vote.

Here is Jason's close:

Jason Furman: Congress could cap the amount of health insurance that is tax-deductible... limiting the deductibility of employer-premium contributions to... $7,500 for a family policy.... Those savings, in turn, could be used to expand coverage in a variety of ways, such as by guaranteeing Medicaid to all Americans below the poverty level (or an even higher threshold), by providing progressive tax credits to strengthen the weakest link in the employer-sponsored system (coverage by small businesses) or by funding subsidies for new mechanisms to make insurance affordable for all Americans, such as allowing them to buy into a plan like the Federal Employees Health Benefit Plan (FEHBP), the same health plan available to members of Congress.

In such a scenario, there is little risk of undermining the employer-sponsored health system, because the proposal would retain the current structure of tax subsidies for employer-sponsored insurance.... It is also unlikely that a generous employer who contributes $10,000 toward annual premiums would drop coverage altogether just because the employee’s tax benefit is trimmed....

This approach would buy the health care system some time, but would not cure it. To do that, policymakers should consider scrapping the deductibility of health insurance entirely and replacing it with a progressive tax credit. Individuals could count the value of their health insurance as part of their income when calculating their taxes, but they would get a new progressive tax credit instead of a deduction. The tax credit would be the reverse of the current system, more like $4,000 going to the cleaner and $1,000 to the investment banker.... This could create the basis for a simpler, fairer system of universal health insurance. Although health benefits might be slightly less generous, higher out-of-pocket costs would be offset by higher wages.

Ultimately, the best plan might include many elements from the recent health reform in Massachusetts while also addressing that scheme’s biggest shortcoming, its lack of sufficient funding. Under a plan of this type, people would have the responsibility to ensure that their families are insured.... [T]he federal government would have the responsibility to make insurance affordable for all through a combination of progressive tax credits, employer mandates (or penalties for firms not offering insurance), a new pooling mechanism for small businesses and higher risk individuals, and expansions in Medicaid. The money saved by ending the tax deductibility of health insurance, plus the existing funding for Medicare and Medicaid, might be enough to pay for a well-designed, universal health-insurance plan....

The principal goal of universal insurance is to provide more health care for the uninsured and to reimburse them for more of the costs they are currently paying themselves.... [T]he total bill for universal insurance is likely to be anywhere from $50 billion to $200 billion....

Nevertheless, there are many areas in which our tax code’s perverse incentives take us in the wrong direction, wasting money and exacerbating inequality.... Progressives should focus more on efficiency, not just in the traditional economic sense but also in terms of ensuring that our limited resources are put to the best use in achieving those social goals–-like helping families pay for college or health care–-that are increasingly being funded through the tax system. There is no better place to start than with our number-one national problem: health care. And if we cure what ails our tax code, making it more progressive and fair, we can put health care within reach for all Americans.

Edmund Burke: "A War of a Peculiar Nature"

Edmund Burke:

Burke, "Letters on a Regicide Peace": We are in a war of a peculiar nature. It is not with an ordinary community, which is hostile or friendly as passion or as interest may veer about; not with a State which makes war through wantonness, and abandons it through lassitude. We are at war with a system... with an armed doctrine.... It has, by its essence, a faction of opinion, and of interest, and of enthusiasm, in every country.... Thus advantaged, if it can at all exist, it must finally prevail...

The Bells of St. Martin's

Boing Boing gives a rave review to Jo Walton's very good Farthing:

Boing Boing: Farthing: Heart-rending alternate history about British-Reich peace: Jo Walton's new alternate history novel Farthing manages the incredible, heart-rending trick of being a quiet little story about quiet, brave people while simultaneously conjuring the kind of haunting dystopia that rips your guts out.

In the Farthing timeline, Britain made peace with Hitler, through the intervention of a faction within the Tories called "the Farthing set," for the Farthing manor house on which they gather. Hitler has taken Europe and is warring on Russia, while Britain barely tolerates the Jewish refugees that have come to its shores.

The story opens with a weekend on the Farthing estate in 1949, and Lucy, the sole surviving child of the family that owns the estate, has come back to her girlhood home with her husband, David, a Jewish banker who escaped Hitler's France. David is cordially loathed by all present -- the Farthing set -- who nevertheless tolerate him with hypocritical good cheer.

Then the architect of the peace with Hitler is found murdered in his bed in Farthing manor, and all suspicion turns to David. Even those who suspect that this is a setup nevertheless choose to believe that it isn't, preferring to blame the interloping Jew to one of their number.

The story proceeds in chapters told by Lucy and chapters told by a likable, sharp Scotland Yard detective, but this is no detective story. It's a thorough study on evil, a meditation of how people betray that which is good for that which is expedient, or self-serving. It is never cynical -- the world of Farthing has at least as many heroically selfless angels as cheap sellouts, but where this book really goes on a tear is in showing how even the good can be easily boxed into doing ill.

Farthing is clearly a parable about Britain and America in the wake of the 9/11 and 7/7 attacks, when commonsense, humanism, and a commitment to liberty and justice has been easily set aside in a fury of bloodlust and a dismal, shrugging apathy. Walton's deft touch is like Orwell's, tender but unflinching, and it's easy to see why she won the Campbell Award and the World Fantasy Award.

Once I hit the home stretch, the last hundred pages, I couldn't put this down. Like the last act of 1984, Farthing's conclusion inspires a simultaneous round of dread and hope that I couldn't walk away from. Few books have moved me as much as Farthing, it's one of those novels I'll be recommending to friends and returning to many, many times.

As a political novel, it is superb. As a novel novel, it is--I found, YMMV--a hair below Jo Walton's other (excellent) work: the principal narrator grows a bit too much a bit too fast during the course of the book, and while my disbelief remained suspended there were some red lights on the control board and some stomach-unsettling fluctuations in the local antigravity field.

Nevertheless, highly recommended.

From TOR, as is an increasingly large proportion of high-quality smack-for-the-eyes-and-brain these days.

Judd Gregg Tries to Revive Gramm-Rudman

The problem with Judd Gregg's proposal is that Gramm-Rudman didn't work when we tried it in the 1980s. It, I think, made matters worse--members of congress became more eager to vote for budget-busting measures when they could claim that Gramm-Rudman placed a cap on the total deficit, and then the congress was unwilling to apply the cap medicine when the dose turned out to be unexpectedly high, and so the process died.

The Budget Enforcement Act framework seemed to work much better in the 1990s than Gramm-Rudman worked in the 1980s.

The shift to two-year budgeting, however, does seem like a very good idea.

House Panel Approves Line-Item Veto Bill: Senate Budget Committee Chairman Judd Gregg, R-N.H., unveiled a broader budget overhaul plan. In addition to a similar mechanism to require revotes on projects deemed wasteful by the president, the bill would revive the old Gramm-Rudman mechanism of setting hard deficit targets and requiring across-the-board cuts if they are not met. The measure sets a target of a reducing the deficit to .5 percent of the size of the economy within six years.

"It will lead to a balanced budget for sure by 2012," Gregg said.

Unlike the Gramm-Rudman law, the across-the-board cuts would apply not just to programs passed by Congress each year but also to benefit programs such as Medicare, welfare and unemployment insurance.

Gregg's proposal, which is likely to clear the Budget Committee but stall thereafter, would also put Congress on a two-year budget cycle and establish a commission to make recommendations to keep Medicare, Social Security and Medicaid solvent...

The Cheney Supremacy

Dan Froomkin on The Cheney Supremacy:

The Cheney Supremacy: By Dan Froomkin: [T]he longer-term significance of [Ron] Suskind's new book... how it documents Vice President Cheney's singularly dominant role in the foreign policy and national security decisions typically attributed to President Bush.

Where other journalists smarmily imply that Cheney is in charge, or credulously relate White House assurances that he's not, Suskind appears to have gotten people with first-hand experience to actually describe how Cheney operates -- and what he has wrought.... Writes Suskind on his Web site:

What is the guiding principle of the world's most powerful nation as it searches for enemies at home and abroad? The One Percent Doctrine is the deeply secretive core of America's real playbook: a default strategy, designed by Dick Cheney, that separates America from its moorings, and has driven everything -- from war in Afghanistan to war in Iraq to the global search for jihadists.

Time magazine this week is running an excerpt from Suskind's book. In an introduction, Time writes:

Two months had passed since 9/11, and at the highest levels of government, officials were worrying about a second wave of attacks. CIA Director George Tenet was briefing Vice President Dick Cheney and National Security Adviser Condoleezza Rice in the White House Situation Room on the agency's latest concern: intelligence reports suggesting that Osama bin Laden and his No. 2, Ayman al-Zawahiri, had met with a radical Pakistani nuclear scientist around a campfire in Kandahar, Afghanistan.

Absorbing the possibility that al-Qaeda was trying to acquire a nuclear weapon, Cheney remarked that America had to deal with a new type of threat -- what he called a 'low-probability, high-impact event' -- and the U.S. had to do it 'in a way we haven't yet defined,' writes author Ron Suskind in his new book, The One Percent Doctrine: Deep Inside America's Pursuit of Its Enemies Since 9/11.

And then Cheney defined it: 'If there's a 1% chance that Pakistani scientists are helping al-Qaeda build or develop a nuclear weapon, we have to treat it as a certainty in terms of our response. It's not about our analysis.... It's about our response.' Suskind writes, 'So, now spoken, it stood: a standard of action that would frame events and responses from the Administration for years to come.'

In an appearance on NBC's Today Show this morning, Suskind had this to say about the "one percent doctrine" -- which he also calls the "Cheney doctrine": "What it does is it embraces suspicions as a threshold for action."...

[H]ere's another telling scene: When Tenet and some of his briefers initially headed over to the White House to tell Bush about the new threat, Tenet has to go first, to "prebrief Bush for four or five minutes," which Suskind writes is "common practice" so that "Bush could be authoritative and updated when others arrived."

This is Suskind's second major book-length contribution to understanding the Bush White House. His first... "The Price of Loyalty: George W. Bush, the White House, and the Education of Paul O'Neill."... Its two main themes: 1) That the president was disengaged ("like a blind man in a room full of deaf people") and managed by his staff (encircled by "a Praetorian guard"); and 2) That the White House was intent on overthrowing Saddam Hussein long before 9/11 ("It was all about finding a way to do it.") Both of those points slowly but surely made their way to becoming conventional wisdom in Washington.

Dan Froomkin on Tony Snow talking to Wolf Blitzer:

BLITZER: The Washington Post published a fascinating cable today, a report written by the U.S. embassy in Baghdad to the State Department -- it was signed by Ambassador Khalilzad -- in which it painted a very, very grim -- you read this cable.

SNOW: Yes.

BLITZER: ...Let me just read a line for you. 'Beginning in March and picking up in mid-May, Iraqi staff in the public affairs section have complained that Islamists and/or militia groups have been negatively affecting their daily routine,' and it goes on to the harassment and the threats and the killings that have been going on. It's a pretty damning indictment of the current situation.

SNOW: No, it's actually a reflection of the realities there. And....

BLITZER: And the reality is gloomy.

SNOW: Well, that's taken in mid-May.

Snow thinks things have gotten better in the past month?

Dan Froomkin on Tony Snow II:

One of my readers, Derek Todd, recently pointed out that Snow complains about negative coverage in Iraq -- except when he complains there isn't enough.

Case in point: Snow's June 8 briefing. First came the standard line: "We have been crushing the opposition, but what happens is the opposition has been controlling the airwaves with scattered, fragmentary acts of violence."

But then came reversal: "Now, I think it's important for the American people to understand the nature of what's going on in Iraq, which is -- this gives us a chance to illustrate it -- nobody carried a big story over the weekend about the fact that Zarqawi's people had deposited eight or nine heads in a box -- I say eight or nine because the press accounts vary. That's grotesque. It had enormous effect there, didn't get reported here."

Says Todd, my reader: "You guys can't win." No kidding.

Odious Governments...

Odious governments. Tim Burke muses on how the world should treat thieves who hold nations hostage--and on what duties we owe to their hostages:

Tim Burke: Rentiers of Sovereignty: I've had to deal with a situation this week that involves some complicated transactions over the title to a used car, on behalf of someone else. The mechanisms of title transfer are a hassle, but I'm also largely glad that we have them. This seems to me a function of a modern state that even a libertarian has to love: mechanisms ensuring that people who claim and transfer expensive property are entitled to those claims and rights....

[Y]ou may have seen a story about Angola... conforming to the conventional wisdom that Africa defines the worst of the human condition in the 21st Century. I wouldn't challenge that conventional wisdom in this case, or many others. Angola's tiny governmental elite is raking in huge sums from smaller multinationals involved in pumping out offshore petroleum, and virtually none of that money is going to any public function of any kind....

Angola is the kind of situation that made me think very differently about sovereignty, and about the kinds of politics, both conservative and leftist, that mark the achievement of sovereignty as the initial and necessary condition of achieving prosperity and freedom. Sovereignty is the material resource that the Angolan elite controls and sells, not oil. They are rentiers who extract wealth from selling permission for extraction... no different than a car thief who hotwires a car parked outside a suburban home, drives it fifty miles, and then sells the car on eBay.... The car thief is going to run into trouble establishing a title that can be transferred legitimately. The Angolan elite has no such difficulty.

All the international institutions which exist recognize them as possessing title to sovereignty.... That's not a conservative or liberal thing... [but] an indictment of the entire interstate system built up over the course of the 20th Century, in all its parts and particulars. That system gives titles and ownership to thieves, and allows thieves to sell their goods to supposedly legitimate businesses....

I can't buy a hot car and expect the government to sanction my ownership. If I pass cash under the table to get the car, the car stays hot, and I can expect it to be taken from me at any time to be returned to its rightful owner. All the petroleum that comes out of Angola today is equally stolen. The people who peddle Angola's sovereignty have no right to sell it, and those who buy it know that perfectly well. We need some kind of global system that refuses that transfer of title.

I still feel, for all the water that has flowed under this particular bridge, that this is one case where dissatisfactions with sovereignty on both the right and the left ought to be able to meet productively. The problem of Angola and the problem of Iraq before the war have some real resemblances, and in both cases, passive defenses of sovereignty are unacceptable answers. The war in Iraq wasn't the right alternative; neither would be an extensive ambition to govern Angola through international institutions in productive ways that its own elite will not. The gut-wrenching truth of the human condition in the 21st Century is that some suffering cannot be easily abated or forcibly relieved. But we should imagine what we can do, not merely accept what we cannot. I think that the beginning of a new era of action involves a steady contempt for sovereignty and the claims made in its name, and the construction of a new international system that reflects that contempt. Let's call Angola's elite what they are: thieves. Let's call the companies pumping oil out of Angola what they are: the purchasers of stolen property. Let's make it as difficult as we can for thieves to fence stolen sovereignties, and for purchasers to buy the same.

The question is: How far do you go? What do you do with somebody like Ibrahim Babangida of Nigeria--ex-dictator, called by some (according to Wikipedia) the most corrupt man in Africa, who stole more than $10 billion from Nigeria for himself and his cronies? What do you do with those who worked for him? With their families? With those who advocate "culturally sensitive account[s]" of Babangida's rule "as a corrective to standardized journalistic and political science cliches"?

I might be in favor of a system in which by unanimous vote the UN Security Council could declare governments to be "odious" and to put those who lend to or trade with them on notice that recompense will someday be demanded. But would this do much to help the people who are victims of such governments? I might also be in favor of a system in which by unanimous vote the UN Security Council could call for theoverthrow of governments--and assemble coalitions to do the job. But trade embargoes are dangerous things, and often counterproductive. Who has gained, really, from the U.S. decision that Castro's regime in Cuba was odious?

And wars are terrible things.

Why Oh Why Can't We Have a Better Press Corps? (Joe Klein Edition)

John Cole finds himself amazed by journamalist Joe Klein:

Balloon Juice: Joe Klein Makes No Sense By: John Cole: When I see that the President's polling numbers are stuck in the mid-30's, I scratch my head in disbelief when I read stuff like this:

Why Bush Is (Still) Winning the War at Home [by Joe Klein]: "I was up there in the cockpit of that airplane coming into Baghdad," the President told the press corps assembled on the White House lawn after his dash into and out of the war zone last week. "It was an unbelievable, unbelievable feeling." In fact, George W. Bush's body language--let's call it the full jaunty--was reminiscent of his last, infamous cockpit trip, onto the deck of the U.S.S. Abraham Lincoln in May 2003 to announce the "end" of major combat operations in Iraq, beneath a mission accomplished sign. His public language is more cautious than it used to be, but he seemed downright frothy in a private session with the congressional leadership after his press conference.

He called the new Iraqi Defense Minister an "interesting cat" and Abu Mousab al-Zarqawi, the deceased al-Qaeda leader, "a dangerous dude." Bush had reason, finally, to strut. The al-Zarqawi raid had netted valuable intelligence data that were enabling U.S. and Iraqi forces to roll up al-Qaeda cells--the best haul since the capture of Saddam Hussein, which made it possible for U.S. forces to disable much of the dictator's inner circle in early 2004. What's more, the first elected Iraqi government was finally fully in place. Back home, Karl Rove was officially unindicted in the cia leak case, and the Democrats were busy being Democrat--divided, defensive and confused about the war, with Bush's favorite punching bag, Senator John Kerry, leading the charge.

Bottomed out in the polls, a government is finally in place months (years) after it should be, troops abducted, chaos everyday, and the White House is "celebrating" the fact that the President's closest advisor was not indicted.

Ron Suskind's New Book

Ron Suskind has a new book. Barton Gellman reviews it:

The Shadow War, In a Surprising New Light: By Barton Gellman: THE ONE PERCENT DOCTRINE: Deep Inside America's Pursuit of Its Enemies Since 9/11 By Ron Suskind: This is an important book, filled with the surest sign of great reporting: the unexpected. It enriches our understanding of even familiar episodes from the Bush administration's war on terror and tells some jaw-dropping stories we haven't heard before.

One example out of many comes in Ron Suskind's gripping narrative of what the White House has celebrated as one of the war's major victories: the capture of Abu Zubaydah.... Described as al-Qaeda's chief of operations... shipped to a secret prison abroad. Suskind shatters the official story line here. Abu Zubaydah, his captors discovered, turned out to be mentally ill... nothing like the pivotal figure they supposed him to be... appeared to know nothing about terrorist operations; rather, he was al-Qaeda's go-to guy for minor logistics -- travel for wives and children and the like.

That judgment was "echoed at the top of CIA and was, of course, briefed to the President and Vice President," Suskind writes. And yet somehow, in a speech delivered two weeks later, President Bush portrayed Abu Zubaydah as "one of the top operatives plotting and planning death and destruction on the United States." And over the months to come, under White House and Justice Department direction, the CIA would make him its first test subject for harsh interrogation techniques.

How could this have happened? Why are we learning about it only now? Those questions form the spine of Suskind's impressively reported book....

[T]he intelligence and counterterrorism professionals whose point of view dominates this book... came to believe, Suskind reports, that "their jobs were not to help shape policy, but to affirm it." (Some of them nicknamed Cheney "Edgar," as in Edgar Bergen -- casting the president as the ventriloquist's dummy.)...

Tenet and his loyalists also settle a few scores with the White House here. The book's opening anecdote tells of an unnamed CIA briefer who flew to Bush's Texas ranch during the scary summer of 2001, amid a flurry of reports of a pending al-Qaeda attack, to call the president's attention personally to the now-famous Aug. 6, 2001, memo titled "Bin Ladin Determined to Strike in US." Bush reportedly heard the briefer out and replied: "All right. You've covered your ass, now."...

Tora Bora... Henry A. Crumpton... was blunt: The surrogate forces were "definitely not" up to the job, and "we're going to lose our prey if we're not careful."...

Which brings us back to the unbalanced Abu Zubaydah. "I said he was important," Bush reportedly told Tenet at one of their daily meetings. "You're not going to let me lose face on this, are you?" "No sir, Mr. President," Tenet replied. Bush "was fixated on how to get Zubaydah to tell us the truth," Suskind writes, and he asked one briefer, "Do some of these harsh methods really work?" Interrogators did their best to find out, Suskind reports. They strapped Abu Zubaydah to a water-board, which reproduces the agony of drowning. They threatened him with certain death. They withheld medication. They bombarded him with deafening noise and harsh lights, depriving him of sleep. Under that duress, he began to speak of plots of every variety -- against shopping malls, banks, supermarkets, water systems, nuclear plants, apartment buildings, the Brooklyn Bridge, the Statue of Liberty. With each new tale, "thousands of uniformed men and women raced in a panic to each... target." And so, Suskind writes, "the United States would torture a mentally disturbed man and then leap, screaming, at every word he uttered."

Two points in Barton Gellman's review cannot be allowed to pass without comment. The first is his description of how Abu Zubaydah was treated:

...water-board[ing], which reproduces the agony of drowning.... threatened... with certain death... withheld medication... bombarded him with deafening noise and harsh lights, depriving him of sleep... he began to speak of plots of every variety -- against shopping malls, banks, supermarkets, water systems, nuclear plants, apartment buildings, the Brooklyn Bridge, the Statue of Liberty...

Yet Gellman cannot write the word "torture." The most he can bring himself to write is "harsh interrogation methods."

The second is Barton Gellman's question:

How could this have happened? Why are we learning about it only now?

I know that I am not learning about "this"--if the "this" is the Bush administration's inept, cruel, and immoral botching of the War on Terror--now, and I don't think Barton Gellman is learning about it now. He may be pretending to be learning about it now. But the big picture has been clear for years.

Impeach George W. Bush. Impeach Him Now

Spencer Ackerman writes:

The Plank: on Friday the Pentagon finally declassified a missing piece of the grim portrait of American torture: a November 2004 report about detainee abuse by Special Operations Forces in Iraq... conducted by Brigadier General Richard Formica.... Formica opted to investigate specific allegations of abuse about certain units rather than the broader conduct of Special Operation troops who seize detainees.... He told reporters on Friday that it was "regrettable" that the troops he did investigate had inadequate guidance about detention policy, but singled out no one as ultimately responsible. Indeed, going by The New York Times, there are some serious questions about Formica's judgment here:

General Formica found that in the third case at a Special Operations outpost, near Tikrit, in April and May 2004, three detainees were held in cells 4 feet high, 4 feet long and 20 inches wide, except to use the bathroom, to be washed or to be interrogated. He concluded that two days in such confinement "would be reasonable; five to seven days would not." Two of the detainees were held for seven days; one for two days, General Formica concluded.

Here are two such questions you can puzzle over from your home or office. Take all the shelving out of a typical filing cabinet. (My own office cabinet happens to be slightly smaller than the cell described here.) Now lock yourself in it for two days. You may notice you can neither stand up straight nor lie down, and crouching gets really uncomfortable extremely fast. Remember that as an Iraqi detainee, the Geneva Conventions apply to you. Now ask yourself: Why would Formica consider such treatment "reasonable" for two days? And if someone put an American soldier in such conditions for two days--or authorized doing so--what should happen to that person?

They do realize that every Iraq detainee so treated--and all their relatives--are now supporters of Al Qaeda, don't they?

Impeach George W. Bush. Do it now.

More AEI-Quality Reasoning...

Mark Kleiman looks at the latest from the anti-immigration right, and laughs:

The Reality-Based Community: Not that I really feel sorry for the Beloved Leader, but being accused of "demagogy" by the likes of Bennett, Bork, and Schlafly is like being called ugly by a warthog. This may also be the first time in history that refusal to appeal to ethnic hatred has been used as a demagogic device. It's true: Rove and his sock puppet really are fiendishly clever...

Why Oh Why Are We Ruled by These Liars?

Worst administration ever. Emptywheel surveys the blowback from the lies to motivate the Iraq war:

The Next Hurrah: Crying Wolf: Laura Rozen offers a long excerpt from Chris Nelson on North Korea. Nelson seems to be describing what happens to a country's foreign policy when a country has fluffed the intelligence too many times.

S. Korean officials had spent the past couple of weeks, since the rumors began, sounding both tougher and more upset at N. Korean behavior than has been their norm. But as the weekend progressed, there began to be news stories indicating doubts that US-supplied intelligence was 100% reliable...that is, that perhaps what is on or close to the launch pad is NOT actually a Taepodong-2 ICBM, but perhaps even just another Nodong.

That’s worth noting, as some non-government but expert US sources, themselves up to speed on the available classified intel, have been warning for more than a week that we should not jump to conclusions about what the DPRK is prepared to launch, and specifically hinting (can one hint specifically? Oh well...) that the rocket may turn out to be less than a Taepodong-2, when all the smoke clears.

Today, there were hints from S. Korea officials they may be starting to doubt the key parts of the story, at least as it has been spun by US “official sources”, specifically challenging “intel” that fueling has been completed. And one Korean “source who asked not to be named” in a Korea Times story went to far as to charge ulterior motive in all the US-based leaks, “Frankly speaking, aren’t the United States and Japan in a position that could enjoy the current situation?” [emphasis mine]

So let's see. The US announces that North Korea will test a long-range missile, one that could reach the US. It gets South Korea on board to support the threats it is issuing against North Korea. And then...

And then the questions come. North Korea isn't testing a long-range missile, it's testing the same old missile it has had. North Korea isn't launching a missile, it's launching a satellite (followed by assertions that even a satellite launch is a nuclear threat to the US).

And then, our allies the South Koreans, begin to doubt. Um, maybe not, they say.

Now frankly, I don't know whether the apparent preparation to launch something is a threat or not. Though I tend to trust William Arkin when he notes that launching a missile is one thing, and scaling down a nuclear bomb sufficiently to fit in that missile is entirely a different issue.

Much ado about nothing I say.

North Korea, starved for attention and with its own fish to fry domestically and in its own region, may or may not be preparing some rocket for launch, and it may or may not be attempting to use its missile as a bargaining chip or a PR stunt, and it may just be attempting to put its own satellite into space. What should crystal clear though in a world of risks and balances is that North Korea's missile, even if it exists, is hardly a threat to us.


The suggestion is that a nuclear weapon could be place on the Taepo Dong 2. It would indeed be a grave and provocative act, one that would be technically feasible by, say, 2016 at the earliest. And that's if we did nothing between now and then to help North Korea along in changing the situation.

Also, I hate to say it, but I've begun instinctively distrusting stories leaked to the NYT--Oh how the Grey Lady has fallen. But this story is as much about the US' credibility as it is about the NYT's diminishing credibility. South Korea was cooperating in our stern stance. And then it began to doubt us. Not only doubt us, but suggest that the warmongering obviously served US (and Japanese) purposes. It gave the US reason to dump more money into its defense contractor friends to develop a missile defense shield. And it gave Japan one more excuse to reconsider its non-nuclear stance.

You see, gaming intelligence does have consequences. It has the consequences of the 2500 numbers service men and women who sacrificed their life based on a lie. And it makes us absolutely untrustworthy with some of our closest allies.

Thanks Dick, for crying wolf.

That Triangulating B------ Grover Cleveland...

Paul Krugman thinks about class-war politics in American history:

Class War Politics - New York Times: By PAUL KRUGMAN: In case you haven't noticed, modern American politics is marked by vicious partisanship, with the great bulk of the viciousness coming from the right. It's clear that the Republican plan for the 2006 election is, once again, to question Democrats' patriotism.

But do Republican leaders truly believe that they are serious about fighting terrorism, while Democrats aren't? When the speaker of the House declares that "we in this Congress must show the same steely resolve as those men and women on United Flight 93," is that really the way he sees himself? (Dennis Hastert, Man of Steel!) Of course not.

So what's our bitter partisan divide really about? In two words: class warfare. That's the lesson of an important new book, "Polarized America: The Dance of Ideology and Unequal Riches," by Nolan McCarty of Princeton University, Keith Poole of the University of California, San Diego, and Howard Rosenthal of New York University.... What the book shows... is that for the past century, political polarization and economic inequality have moved hand in hand. Politics during the Gilded Age, an era of huge income gaps, was a nasty business -- as nasty as it is today. The era of bipartisanship, which lasted for roughly a generation after World War II, corresponded to the high tide of America's middle class. That high tide began receding in the late 1970's, as middle-class incomes grew slowly at best while incomes at the top soared; and as income gaps widened, a deep partisan divide re-emerged....

When the elite once again pulled away from the middle class, however, Republicans turned their back on the legacy of Dwight Eisenhower and returned to a focus on the interests of the wealthy. Tax cuts at the top -- including repeal of the estate tax -- became the party's highest priority. But if the real source of today's bitter partisanship is a Republican move to the right on economic issues, why have the last three elections been dominated by talk of terrorism, with a bit of religion on the side? Because a party whose economic policies favor a narrow elite needs to focus the public's attention elsewhere. And there's no better way to do that than accusing the other party of being unpatriotic and godless....

Pre-New Deal G.O.P. operatives followed the same strategy. Republican politicians won elections by "waving the bloody shirt" -- invoking the memory of the Civil War -- long after the G.O.P. had ceased to be the party of Lincoln and become the party of robber barons instead. Al Smith, the 1928 Democratic presidential candidate, was defeated in part by a smear campaign -- burning crosses and all -- that exploited the heartland's prejudice against Catholics.

So what should we do about all this? I won't offer the Democrats advice right now, except to say that tough talk on national security and affirmations of personal faith won't help: the other side will smear you anyway.

But I would like to offer some advice to my fellow pundits: face reality. There are some commentators who long for the bipartisan days of yore, and flock eagerly to any politician who looks "centrist." But there isn't any center in modern American politics. And the center won't return until we have a new New Deal, and rebuild our middle class.

Perhaps the advice Paul should give Democratic politicians seeking national office is that they should emulate the triangulating b------ Grover Cleveland--who pursued free trade and regulation of railroad monopolies, navy modernization and avoidance of foreign entanglements, attacked "unworthy" Republican clients--union army veterans who were claiming pensions for non-war related disabilities--and had his own Sister Souljah moment by using the U.S. army to break the Pullman strike over the objections of Illinois governor John Peter Altgeld.

Perhaps not: I've always thought Gilded Age America would have been a better place had the Eugene Debs-led Pullman strike succeeded. I've always been on the side of John Peter Altgeld and Clarence Darrow and Jane Addams.

Zalmay Khalilzad Is Shrill

While George W. Bush says:

I was impressed with [Malaki] the [new] Prime Minister [of Iraq], the team he has assembled, and the plan he has set for his government. I appreciate his determination, and the determination of his Cabinet, to make his agenda work. I told them that the future of Iraq is in their hands. And I told them that America is a nation that keeps its word, and America will stand with them as we work toward our shared goal: a free Iraq that can govern itself, sustain itself, and defend itself. By seizing this moment of opportunity, we will defeat our common enemies and build a lasting democracy in the heart of the Middle East, and that will make Americans, Iraqis, and the world more secure.

U.S. ambassador to Iraq Zalmay Khalilzad has a very different view of the situation: in a cable from Baghdad he joins the shrill unbalanced critics of the just-enough-troops-in-Iraq-to-lose grand strategy of George W. Bush.

Zalmay Khalilzad is perhaps the only person working for the Bush administration who has a chance of emerging from it with an undiminished reputation.

The Situation in Iraq

Digby writes:

Hullabaloo: Iraqi Nervous Breakdown

Al Kamen:

Hours before President Bush left on a surprise trip last Monday to the Green Zone in Baghdad for an upbeat assessment of the situation there, the U.S. Embassy in Iraq painted a starkly different portrait of increasing danger and hardship faced by its Iraqi employees. This cable, marked "sensitive" and obtained by The Washington Post, outlines in spare prose the daily-worsening conditions for those who live outside the heavily guarded international zone: harassment, threats and the employees' constant fears that their neighbors will discover they work for the U.S. government.

In a very straighforward descriptive style, Khalilzad writes that Iraqis must hide the fact that they work for the US or face ostracism or worse. Women are being treated only slightly better than if they were living under the Taliban in 1999 --- and they are being asked to wear clothing that Khalilzad admits was not even required by the most repressive Iranian Ayatollahs. They are losing their driving privileges and are considered suspicious if they use a cell phone -- they might be calling a lover, you see. (This is your fundamentalist religion working to "free" women from the burden of being full citizens.)

People are being gouged for electricity, to which they barely have access anyway (in 115 degree heat!) They face kidnappings and violence every day of their lives. Sectarian divisions are showing up in all their social interactions, even among families. They must adopt separate customs, dress and manner of speaking to travel freely through various neighborhoods in Baghdad or risk violence. They cannot trust the security forces, who seem to be getting more hostile to the population, especially those who work for the US. Their anxiety is palpable as they feel their lives are hurling out of control.

Did I mention that the people he is talking about in this cable are all employees of the US embassy in Baghdad? That's right. These are the highly privileged, educated elite who work inside the Green Zone. Imagine what it's like out in the hinterlands.

He does touch upon this with one very disturbing observation:

One colleague beseeched us to weigh in to help a woman who was uprooted in may from her home after 30 years on the pretext of some application of a long-disused lawy that allows owners to evict tenents after 14 years. The woman, who is gayli Kurd, says she has nowhere to go, no other home, but the courts give them no recourse to this new assertion of power. Such uprooting may be a response by new Shiite government authorities to similar actions against Arabs by Kurds in other parts of Iraq. (Note: an arab newspaper editor told us he is preparing an extensive survey of ethnic cleansing, which he said is taking place in almost every Iraqi province, as political parties and their militias are seemingly engaged in tit-for-tat reprisals all over Iraq. One editor told us that the KDP is planning to set up tent cities in Irbil, to house Kurds being evicted from Bagdad.)

The country has obviously already spiraled into a state of civil war. It's not surprising that it's taken on this character of secret informants, ethnic cleansing, paranoia and neighborhood militias because the whole society was shaped by an authoritarian police state. But civil war it is, and from the sound of this cable, it's happening on a far more fundamental level than we knew. The whole society is breaking down from inside out.

Although out staff maintain a professional demeanor, strains are apparent. We see that their personal fears are reinforcing divisive sectarian or ethnic channels, despite talk of reconciliation by officials. Employees are apprehensive enough that we fear they may exaggerate developments or steer us toward news that comports with their own worldview. Objectivity, civility and logic that make for a functional workplace may falter if social pressures outside the Green Zone don't abate.

He pretty much says that he doesn't know if he can trust his own employees much longer because they are being driven a little bit crazy by fear and paranoia. Heckuva job, there, Uncle Sammy.

This seems like a pretty interesting document. I have to wonder why it was merely linked by pdf in a throwaway paragraph in Al Kamen's Sunday column...

Into the Frying Pan

It says:

Vous venez detrer en possession d'un ustensile de cuisson Le Creuset de haute qualite en fonte emaillee, qui vous apportera de longues annees de satisfaction...

These are truly serious frying pans that my mother has given us...

Next to Our Liberties Most Dear...

The Washington Post covers the Bush administration's persecution of the Harrisonburg Kurds:

Kurdish Defendants Find Support in Town's Clasp: Four Kurdish refugees, among nearly 70 Iraqi Kurd families who settled in this town 100 miles southwest of Washington... were swept up in a federal government anti-terrorism net.... "These are men who were trying to do good things and who were good citizens and who were reaching out to needy people," said Michael Medley, an associate English professor at Harrisonburg's Eastern Mennonite University, who has helped drum up support for the defendants. "I just think local folks here, when they hear that, they get pretty upset."

Supporters, many of them strangers to the Kurds, have escorted them to churches to tell their side... collected donations... [demanded] that government officials drop the cases and "apologize for their actions."...

The government has not said that it thinks any of the four men have ties to terrorism. Still, in January, one of the Kurds, a poultry plant supervisor, was convicted in federal court of transferring money to northern Iraq without a business license, one of many cases in a crackdown after Sept. 11, 2001, on operations that authorities say can fund terrorism, drug trafficking and other crimes. Two more Harrisonburg Kurds have pleaded guilty to the same offense, and a fourth has been charged.

The four defendants, who do not deny that they transferred several hundred thousand dollars, say they were simply helping loved ones in a region ravaged by Saddam Hussein's persecution and now by war. All face up to five years in prison....

Rasheed Qambari, who was convicted in January, and his fellow defendants worked for U.S. or British-funded aid groups in Kurdistan, a region established as a haven for Iraqi opposition and the Kurdish minority after the 1991 Persian Gulf War. When Hussein's tanks rolled in five years later, the United States evacuated the four men and more than 6,000 other Kurds to Turkey and later to Guam, where they spent months undergoing security checks. In 1997, they were given tickets to freedom in the United States....

Many in Harrisonburg say the Kurds are good for the town, too: hardworking, well-educated family people who stay out of trouble.

"They are real Americans, you know?" said Mayor Larry Rogers, though he reserves judgment on the cases, adding, "we have bad seeds in all cultures."

Soon after they arrived, the refugees wanted to aid those left behind, and Qambari, Noroly, Rashid and Abdullah emerged as the mediums. They said they sent their own money and that of other Kurds to family or charities. The funds paid for utilities, medicine and food, they said. "Big families. No work," said Noroly, 40. "They need money."

But Kurdistan's banks were unequipped to handle international transfers. So Noroly and the other men said they resorted to depositing it in accounts in neighboring nations and having it carried across the border....

Before 2001, the section of the U.S. criminal code under which the men were charged applied to those who operated money-transmitting businesses and knew they were doing so illegally. Under the Patriot Act, operators no longer have to know they are transmitting money illegally.... In August 2004, agents raided several Kurdish homes in Harrisonburg. In October 2005, agents arrested the four men.

Through spokesmen, the U.S. attorney for the Western District of Virginia and the FBI, which led the investigations, declined to comment. But Dean Boyd, a spokesman for the U.S. Immigration and Customs Enforcement agency, said it does not matter whether unlicensed transmitters help criminals -- they are soft targets all the same....

Even as their fellow Kurds reel from the raids and arrests, and even as they face uncertain futures, the defendants say that message has resonated.

"We were thinking before, I have a brother here and a couple of cousins in another state," Abdullah said. "But now we see we are a big family here."

Why Oh Why Can't We Have a Better Press Corps? (Washington Post Strikes Again Edition)

Greg Sargent wonders just what Jonathan Weisman and Charles Babbington are thinking:

The Horse's Mouth: REPUBLICAN FALSEHOODS GO UNCORRECTED IN WASHINGTON POST. Today's Washington Post piece on yesterday's congressional debates about Iraq floated two key GOP falsehoods without debunking them. The first:

"I'm not surprised at John Kerry switching his position yet again," [Dick] Cheney said on Sean Hannity's radio talk show. Kerry is charging "that somehow he was misled," the vice president said. "He wasn't misled. He saw the same intelligence all the rest of us saw."

Lies, lies, lies. The falsehood that the President and Congress had access to the same intel in the runup to Iraq has been thoroughly debunked numerous times. Yet the administration has continued to peddle this line for years. And here it is again, quoted in the Post, with not a single word providing this crucial context or noting that it is simply false.

The second:

Central to the House Republicans' argument was the much-disputed link between the attacks of Sept. 11, 2001, and the war in Iraq.

Much-disputed? Not a single scrap of real evidence has ever emerged linking Sept. 11 to Iraq. No one with any credibility at all believes there were any such links. Hence, there are no meaningful connections between Sept. 11 and "the war in Iraq," only rhetorical ones conjured up by people who want to cloud the issue and retroactively justify our failing Iraq venture. To describe this as "much-disputed" creates the false impression that the jury's still out on the question of whether there's some sort of real, meaningful link between the two.... [L]ittle by little, such journalistic failures add up. The numbing repetition of uncorrected falsehoods creates a phony atmosphere of uncertainty around key questions which in fact have already been resolved. Eventually voters throw up their hands and accept the fact that they'll never know for sure what the truth is, and confusion ensues. If the media more aggressively debunked such lies -- every single time, and in every single context -- voters just might stand a chance.

In my view, it's simple: getting the story right is simply not on the list of things they care about. All else follows from that. Trust nothing in the Washington Post until it is independently verified.

Fiscal Policy Multipliers

Ummm... No. This is not good:

Greg Mankiw's Blog: Monetary vs Fiscal Policy: [M]uch of the short-run stimulus effect of fiscal policy comes about because it induces a monetary expansion. This monetary expansion is automatic if the Fed is holding the interest rate fixed or if it is following something like a Taylor rule, which is approximately what it is doing now. The effects of fiscal policy would be very different if the Fed were holding the money supply constant in response to a fiscal change.... One way to answer this question is to look at the fiscal-policy multiplier. In chapter 11 of my intermediate macro text, I give the government-purchases multiplier from one mainstream econometric model. If the nominal interest rate is held constant, the multiplier is 1.93. If the money supply is held constant, the multiplier is 0.60. If the LM curve were completely vertical, the second number would be zero...

The Federal Reserve today does not react to a fiscal expansion by increasing the money stock. The Federal Reserve today reacts to a fiscal expansion by raising interest rates and contracting liquidity so as to try to still hit its inflation target. As Larry Meyer said once, "if you don't know that the Fed has been targeting a 2% CPI inflation rate, you simploy haven't been paying attention."

These days, except in exceptional circumstances--in a liquidity trap, when interest rates are already so low that the Fed can't or daren't lower them further, or when the fiscal expansion comes as a sudden surprise that the Fed does not have time to immediately offset--fiscal policy has next to no stimulative effect at all because the Federal Reserve takes steps to make sure that it does not. That's the big reason that claims in 1993 that the Clinton tax increases were going to send the economy into recession were wrong.

We do our students no good service if we teach them that in today's economy, in normal times outside of a liquidity trap, expansionary fiscal policy "creates jobs" in even a temporary and ephemeral sense.

UPDATE: Greg Mankiw writes:

It might be worth pointing out to your readers that the example I was discussing, raised by the question from Bryan Caplan, was the WWII fiscal expansion. Maybe you guys think the Fed was targeting Y at Y* back then, but I doubt it.

The only thing I said about the current situation is that the Fed is following something like a Taylor rule. This is hardly a radical idea: it dates back to Taylor himself.

Paul Krugman on the Fiscal Multipliers

Paul Krugman writes:

A couple of weeks ago I went out to Lincoln, Nebraska (the AP graders - an institution you don't learn about until you're hawking a principles book) and they asked me to give my views on crowding out. I think my formulation is close to yours.

Here's how I explained it. Think of a standard IS-LM picture. Does that match current reality? Obviously not: the Fed doesn't target the money supply, so holding M constant is not a useful thought experiment, and actually confuses students. In fact, since the Fed actually targets the Fed funds rate rather than the money supply, you might think that the LM curve should be replaced with a horizontal FF curve. This would seem to suggest no crowding out at all.

But except in the very short run the Fed doesn't set the interest rate passively; instead, it tries to stabilize output around potential. A reasonable way to represent a Taylor rule or something like that in a simple diagram is to draw a vertical line, the BB curve (for Ben Bernanke). This gives us 100% crowding out.

And I think that's right. Except in liquidity-trap conditions or in the very short run, before the Fed has a chance to catch up, fiscal policy doesn't change aggregate demand, only the mix. The exceptions are important: we had a near-liquidity trap experience in 2003, and it was a good thing that we had some fiscal stimulus (and a bad thing that the stimulus was so poorly designed). But the normal rule is that fiscal policy is fully crowded out.

I think this is important. Fiscal prudence--budget balance--is a politically unpopular but economically important cause. The last thing we need is people claiming that budget deficits have, in our current economy, virtues they do not possess.

Michael Barone Takes the Side of that Third-Rate Burglar, Richard Nixon

Why oh why can't we have a better press corps?

Outsourced to David Gross:

Daniel Gross: June 11, 2006 - June 17, 2006 Archives: DEFEAT FOR AMERICA?; It wouldn't be a complete week without at least a few lines of shockingly stupid analysis from the Wall Street Journal editorial page, the kind of sentence (or sentences) that make you spit your coffee onto the desk and then launch into a paroxysm of sustained laughter. Thank you, Michael Barone, for making my week complete. He writes, in a piece about Vietnam, Watergate and Karl Rove.

Vietnam and Watergate were... defeats for America -- and for millions of freedom-loving people in the world. They ushered in an era when the political opposition and much of the press have sought not just to defeat administrations but to delegitimize them...

Read it again. Barone apparently believes Watergate was a defeat for America -- and for millions of freedom-loving people in the world.

Let's let Michael Barone's hero speak for himself:

Nixon: Did they get the Brookings Institute raided last night? No? Get it done. I want it done. I want the Brookings Institute's safe cleaned out and have it cleaned out in a way that it makes somebody else responsible....

Stanley L. Kutler, ed. (1997), Abuse of Power: The New Nixon Tapes (New York: Free Press: 0684841274), pp. 7-8.

Mark Schmitt Is Displeased with the "Spectacularly Wrong" Peter Beinart

Mark Schmitt writes:

The Decembrist: The Completely Incorrect History of the Democratic Party: I know we're done with the Peter Beinart book club, and the poor guy is getting picked on a lot this week. But I can't resist, and as President Bush said after teasing a legally blind reporter for wearing sunglasses, "I needle you guys out of affection." (The bully's excuse, doubly vicious because so plainly untrue, and forces the victim to be courteous.) I wouldn't say that I needle Beinart out of affection -- I don't know him well, but I admire him for trying to produce something of substance out of the admission that he was wrong about Iraq -- but out of frustration with the fact that he so often seems to start off o.k. and then gets things so spectacularly wrong.

So here's his latest. In a defense of the Clinton Administration (which I'm totally comfortable with, by the way, having seen myself recently described as a "Clinton Democrat" and not flinching) Beinart gives the following thumbnail history of the Democratic Party in the 1970s:

In reality, the Democratic Party didn't lose the confidence of its convictions when Clinton became president; it lost them when he was in graduate school. From Harry Truman through Lyndon Johnson, Democrats stood for three basic things: enlightened anti-communism, an expanding welfare state, and racial integration.

Between 1968 and 1972, under pressure from Vietnam and racial conflict, two of those three collapsed. By 1972, George McGovern was urging the virtual abandonment of anticommunism and advocating racial quotas. Then, in 1976, Democrats nominated a relative economic conservative, Jimmy Carter, who showed little interest in extending Johnson's Great Society largesse. And, poof--there went principle number three.

In The Good Fight, it's not quite so clear that this is how he would sum up the history, but Wow! Let's take that second paragraph one point at a time:

By 1972, George McGovern was urging the virtual abandonment of anticommunism,

Um, don't know what you're talking about here. McGovern was opposed to the Vietnam War, which was a war against communism. But the "enlightened" anti-communist liberals also opposed that war. To say that opposing the Vietnam is tantamount to "virtual abandonment of anticommunism" is the same as arguing that opposing the Iraq war is a virtual abandonment of opposition to terrorism. Since Beinart is not now willing to make either argument, he cannot keep baiting McGovern as insufficiently anti-communist, in the same way that he cannot continue to bait Iraq war opponents (among whom he now counts himself) for being insufficiently anti-terrorist. Although he makes a good rhetorical effort to do so.

and advocating racial quotas

o.k., the point here seems to be that the Truman-through-Johnson Democrats stood for "racial integration," whereas McGovern abandoned that principle by "advocating racial quotas." That assumes that affirmative action is somehow antithetical to integration, rather than a means to achieve it....

I have no gripe with Beinart's rehabiliation of Clinton. I was never very critical of Clinton, and now that we really understand just how vicious the right-wing machine is, we have to appreciate that he did not have the freedom of movement that LBJ had, and that he made almost as much as could be made of his severely constrained political circumstances. It should be possible to make that case without trashing a couple decades of well-meaning, serious liberals -- as committed to anti-communism, racial fairness and broadly shared economic security as their elders -- who just happened to lack the policial skills of an LBJ or Clinton.

Inequality of Opportunity

Tocqueville warned of a hereditary aristocracy of manufacturers:

The Reality-Based Community: The rich man in his castle: Posted by James Wimberley

-- The poor man at his gate
God made them high and lowly
And ordered their estate.

Welcome to America at the end of the twentieth century. The Economist does what it used to see as a central task and reports on a striking new piece of comparative economic research. The May 27 Charlemagne column "Snakes and Ladders" describes work by a Nordic team (Bernt Bratsberg, Markus Jäntti et al.) on the transmission of income inequality between generations. The paper is here and an earlier version here. Money quote:

Mobility [in intergenerational income] among men is lower in the U.S. than in the U.K., where it is lower again compared to the Nordic countries. .... The main driver of the difference in the pattern of male intergenerational mobility in the U.S. from that of each of the other countries in our study is the low mobility out of the lowest quintile group in the United States.

The elasticity of a man's income with respect to his father's is about 0.2 for the Nordic countries, 0.36 for Britain, and 0.54 for the United States.... It should actually not surprise us. In the Nordic countries, reducing inequality of condition is the central aim of huge and expensive welfare states, with not only income support for the poor, but excellent education and health care at all income levels. Britain is somewhat less serious, and the USA hasn't been serious since Roosevelt. The American left has come to focus its efforts on discrimination....

The report punctures the American illusion that socio-economic gravity does not apply in the land of the free; that you can have the pleasant fiction called equality of opportunity without equality of condition. The sad truth is that inequality, like soft discrimination, works patiently throughout a child's life, adding a minute but cumulative bias every day....

It's an old truism of political theory that democracy and republican government are at risk from great inequalities of fortune. The collapse of the Roman Republic had a lot to do with the widening gap between the great senatorial families, who did well out of the expanding empire, and the ordinary Roman for whose vote they bid more and more cynically...

Economist's View: Paul Krugman: The Phantom Menace

Paul Krugman says that we should fear the fear of inflation. Via Mark Thoma:

Economist's View: Paul Krugman: The Phantom Menace: Paul Krugman wonders why the Fed is so concerned with inflation when wage growth isn't keeping up with productivity:

The Phantom Menace, by Paul Krugman, Commentary, NY Times: Over the last few weeks monetary officials have sounded increasingly worried about rising prices. On Wednesday, Richard Fisher, the president of the Federal Reserve Bank of Dallas, declared that inflation "is running at a rate that is just too corrosive to be accepted by a virtuous central banker."

I'm worried too... but not about recent price increases. What worries me, instead, is the Fed's overreaction to those increases.... Fed officials now seem worried that we may be seeing the start of another round of self-sustaining inflation. But is that a realistic fear? Only if you think we can have a wage-price spiral without, you know, the wages part.

The point is that wage increases can be a major driver of inflation only if workers consistently receive raises that substantially exceed productivity growth. And that just hasn't been happening....

It would be an exaggeration to say that there's no inflation threat at all. I can think of ways in which inflation could become a problem. But it's much easier to think of ways in which the Federal Reserve, wrongly focused on the phantom menace of a new wage-price spiral, could be slow to respond to bigger threats, like a rapidly deflating housing bubble. So I don't fear inflation nearly as much as I fear the fear of inflation...

Bad News on the International Finance Numbers

Daniel Gros writes in the FT: / Comment & analysis / Comment - Discrepancies in US accounts hide black hole: By Daniel Gros: The global financial system seems to have a black hole at its centre. Over the last two decades, US residents have sold a total of about $5,500bn worth of IOUs to foreigners, yet the officially recorded net investment position of the US has deteriorated only by a little more than half of this amount ($2,800bn). The US capital market seems to have acted like a black hole for investors from the rest of world in which $2,700bn vanished from sight -- or at least from the official statistics.

How can $2,700bn disappear?

It is often argued that the US can simply make large capital gains on its gross positions because its assets are denominated in foreign currency and its liabilities in dollars. However, the available data indicate that over the last two decades this factor has netted the US at most $300bn-$400bn. This still leaves a loss of well over $2,000bn to be explained.

The explanation comes in two tranches of about $1,000bn each.

The first source of accounting revenues for the US derives from an anomaly in the item "reinvested earnings" on foreign direct investment in the US balance of payments... foreign companies systematically report abnormally low profits for their US operations to avoid US corporate income taxes.... [T]he country's current account deficit would thus be about 1 per cent of gross domestic product larger than officially reported.

The underreporting of the current account deficit implies that US indebtedness is also underestimated... about $1,000bn.

A second source of gains comes from very large residuals... in... statistics on the evolution of the net US international investment position... also... about $1,000bn over the past two decades....

The discrepancy arises for a simple reason: the current account data are based on actual flows of payments recorded in the balance of payments. By contrast, the data on the US international investment position are based on surveys of depository institutions, which year after year tend to lose sight of US assets held by foreigners, especially portfolio investment and real estate....

[I]t is likely that the true US net external debtor position is around $4,000bn (about 40 per cent of GDP) rather than the $2,500bn reported officially for end-2004... both the current account deficit and the net debtor position of the US are even worse than officially reported. This can only mean that the need for a substantial depreciation of the dollar and/or a period of sub-par growth is even bigger than generally accepted...

Views of the Economy

Daniel Gross writes:

Daniel Gross: June 11, 2006 - June 17, 2006 Archives: MISLEADING AGGREGATES, CONT'D: From John Harwood's story in the Wall Street Journal on the latest WSJ/NBC poll.

"The economy--an issue Republicans, as the governing party, hoped to capitalize on--is providing little traction. Reminded of a host of posisitve statistics on job growth, overall growth and tax cuts, just one in four Americans say those reflect their personal view of the economy.

Even among Americans earning more than $75,000 a year, just one-third embrace the positive view. The top economic concerns cited by respondents: health-care and education costs, gas prices, the federal budget deficit and inflation."

Once again, beware the misleading aggregates.

Morning Coffee Videocast: PAYGO

In which I hog Google's bandwidth, drink my morning coffee, and talk about how to return reality-based budget policy to the federal budget:

PAYGO: Brad DeLong 2 min 58 sec -- Jun 16, 2006

Brad DeLong's Morning Coffee. Tax cuts should be paid for by spending cuts. Spending increases should be paid for" by tax increases. This was the secret principle behind the Clinton administration's success. The right wing will acknowledge the force of this principle--but only when a Democrat wins the White House.

Morning Coffee Videocast: The Inflow of Capital to the United States

In which I drink my morning coffee, hog Google's bandwidth, and muse on the many reasons contributing to the massive inflow of capital from abroad into the United States:

The Inflow of Capital: Brad DeLong 6 min 11 sec - Jun 16, 2006:

Brad DeLong's Morning Coffee. Capital is flowing into the United States for a number of reasons: (i) people think that the complementarity between capital and technology makes investments in the U.S. highly profitable; (ii) foreigners think that U.S.-located assets would be a wonderful thing to have in the event of "political instability" in their home countries; (iii) foreign governments think an undervalued currency and huge exports are a wonderful thing to have to avoid "political instability" by maintaining full employment; (iv) foreigners are overoptimistic about investments in the U.S.; (v) America's budget deficit means that we are printing lots of Treasury bonds which must be sold to somebody; (vi) the Federal Reserve's low-interest rate policy (which I don't think was a mistake) pushed up housing prices, made Americans feel rich, and so they looked around for people to borrow from to turn their home equity into liquid cash--and foreigners are a convenient source of funds.

I'm worried because I think a big part of the story is reason (iv).

Morning Coffee Videocast: ENRON

In which I hog Google's bandwidth, drink my morning coffee, and think about the fraud at ENRON:

ENRON: Brad DeLong 6 min 6 sec - Jun 15, 2006:

Brad DeLong's Morning Coffee. ENRON collapsed because most of the profits reported by Enron Energy Services were really losses: when you give your dealmakers the power to value the deals they make, watch out. Even with this major fraud in process, ENRON's profits were still too low to make Lay and Skilling happy--and so they commissioned Fastow to further pretty up their numbers. ENRON was not a sound company.

The Car Seat and the Volonte Generale

Glenn Reynolds whines about having to put his children in car seats, whines about having to drive them to soccer practice, whines about being asked to help out on field trips, and whines about being expected to be a presence in his children's education:

OpinionJournal - Federation: We've taken a lot of the fun out of parenting.... [A]side from the economic payoffs, parents used to get a lot of social benefits, too. Yet in recent decades, a collection of parenting "experts" and safety-fascist types have extinguished some of the benefits while raising the costs, to the point where what's amazing isn't that people are having fewer kids, but that people are having kids at all....

[Today] the burden on parents is much, much higher. And it's exacted in a million tiny yet irritating other ways. Some are worthwhile--car seats, for example, are probably a net gain in safety--but even there the cost is high. I heard a radio host in Knoxville, Tenn., making fun of SUVs and minivans: When he was a kid, he boasted, his parents took their five children cross-country in an Impala sedan. Nowadays, you'd never make it without being cited for neglect. And you can't get five kids in a sedan if they all have to have car seats, which these days they seem to require until they're 18....

[T]he pressure to take children for a seemingly endless array of after-school activities, most of which require parental chauffering. Add to this the increasing amount of parental responsibility for things their children do wrong, coupled with steady legal diminution of parental authority (Ms. Flanagan mentions an incident in which Caroline Kennedy was spanked for running off and notes that today it might result in jail time--an exaggeration, perhaps, but not by much.) You're responsible for your kids in ways previous generations weren't, but your ability to discipline them is much reduced; and as my wife, a forensic psychologist, notes, the bad kids know that they can cow most adults by threatening to call 911 and make a bogus abuse charge.

And forget disciplining your child, even with a harsh word, in a public place. At the very least, if you do you'll be looked on not as a virtuous parent helping to preserve the social fabric, but as that worst of all sinners in contemporary American culture: a meanie. And schools, anxious for parental "involvement," place far more demands on parents than they did when I was a kid...

I had forgotten he was such a whiner.

Let me assure him that here in glorious San Francisco, parents discipline their children with harsh words in public all the time: "Mandala! Have respect for different faiths! Mormons are people!" "Ezekiel! Stand up straight! Your body can't be in harmony with your Manipura Chakra that low!" Let me assure him that we have songs in our hearts and springs in our steps as we strap our children into their car seats and think, "Thank God! We've just greatly reduced the odds that an accident will be serious! All praise the wisdom of the NHTSA, part of the Federal Department of Transportation, and its role in the process by which we make the laws that we then ourselves obey!" And let me say that driving the Sixteen-Year-Old to track practice so that he can break 5:20 for the metric mile is a great delight.

The Structure of Republican Thought

John of Vegacura has a nice post on the Structure of Republican Thought:

Vegacura]( The evolution of Republican thought It would be amusing -- if not so devastating -- to note the parallels in the way Republicans have chosen to address two of the more significant issues facing us during their long, painful reign as the single party in power.

Climate change: "It's a hoax" becomes "the science is still in dispute" becomes "Crazy Al Gore wants to do away with the internal combustion engine" becomes "let's study it for another 10 years" becomes "ok, it's real, but it would be too expensive to do anything about it so learn to live with it."

Massive budget deficits: "Fuzzy math!" becomes "lower taxes on the rich will generate more taxes, really" becomes "deficits don't matter; we won" becomes "the deficit is so huge that doing small things, like maintaining the Estate Tax for the wealthiest inheritors, won't really help."

The Republican mantra, after six long years of holding all three branches of the federal government and finding that governing is "hard, real hard," seems to be, "aw, f--- it."

UPDATE: Well, at least Fafnir and Giblets are back to help us understand this mode of thinking.

Land of the Free

Fareed Zakaria on green cards:

To Become an American: By Fareed Zakaria: Seven years ago, when I was visiting Germany, I met with an official who explained to me that the country had a foolproof solution to its economic woes. Watching the U.S. economy soar during the 1990s, the Germans had decided that they, too, needed to go the high-technology route. But how? In the late '90s, the answer seemed obvious: Indians. After all, Indian entrepreneurs accounted for one of every three Silicon Valley start-ups. So the German government decided that it would lure Indians to Germany just as America does: by offering green cards. Officials created something called the German Green Card and announced that they would issue 20,000 in the first year. Naturally, they expected that tens of thousands more Indians would soon be begging to come, and perhaps the quotas would have to be increased. But the program was a flop. A year later barely half of the 20,000 cards had been issued. After a few extensions, the program was abolished.

I told the German official at the time that I was sure the initiative would fail. It's not that I had any particular expertise in immigration policy, but I understood something about green cards, because I had one (the American version) myself. The German Green Card was misnamed, I argued, because it never, under any circumstances, translated into German citizenship. The U.S. green card, by contrast, is an almost automatic path to becoming American (after five years and a clean record).

The official dismissed my objection, saying that there was no way Germany was going to offer these people citizenship. "We need young tech workers," he said. "That's what this program is all about." So Germany was asking bright young professionals to leave their country, culture and families; move thousands of miles away; learn a new language; and work in a strange land -- but without any prospect of ever being part of their new home. Germany was sending a signal, one that was accurately received in India and other countries, and also by Germany's own immigrant community.

Many Americans have become enamored of the European approach to immigration -- perhaps without realizing it. Guest workers, penalties, sanctions and deportation are all a part of Europe's mode of dealing with immigrants. The results of this approach have been on display recently in France, where rioting migrant youths again burned cars last week. Across Europe one sees disaffected, alienated immigrants, ripe for radicalism. The immigrant communities deserve their fair share of blame for this, but there's a cycle at work. European societies exclude the immigrants, who become alienated and reject their societies.

One puzzle about post-Sept. 11 America is that it has not had a subsequent terror attack -- not even a small backpack bomb in a movie theater -- while there have been dozens in Europe. My own explanation is that American immigrant communities, even Arab and Muslim ones, are not very radicalized.... Compared with every other country in the world, America does immigration superbly. Do we really want to junk that for the French approach?

The United States has a real problem with flows of illegal immigrants, largely from Mexico (70 percent of illegal immigrants are from that one country). But let us understand the forces at work here. "The income gap between the United States and Mexico is the largest between any two contiguous countries in the world," writes Stanford historian David Kennedy. That huge disparity is producing massive demand in the United States and massive supply from Mexico and Central America. Whenever governments try to come between these two forces -- think of drugs -- simply increasing enforcement does not work. Tighter border control is an excellent idea, but to work, it will have to be coupled with some recognition of the laws of supply and demand -- that is, it will have to include expansion of the legal immigrant pool.

Beyond the purely economic issue, however, there is the much deeper one that defines America -- to itself, to its immigrants and to the world. How do we want to treat those who are already in this country, working and living with us? How do we want to treat those who come in on visas or guest permits? These people must have some hope, some reasonable path to becoming Americans. Otherwise we are sending a signal that there are groups of people who are somehow unfit to be Americans, that these newcomers are not really welcome and that what we want are workers, not potential citizens. And we will end up with immigrants who have similarly cold feelings about America.

Why Oh Why Can't We Have a Better Press Corps?

Duncan Black thinks that Mark Leibovich of the New York Times should eschew the passive voice:

Eschaton: Fresh from obsessing about Hillary Clinton's panties the New York Times has moved on to treating Nancy Pelosi, the longest-serving member of the House Intelligence Committee, as a 17 year old girl about to have her coming out party. My favorite was this paragraph:

As the prospect of a Democratic majority gains credibility and Ms. Pelosi is more visible, she is also subjected to the speculation and analysis about her hair, makeup and clothes that any woman positioned for such a big job often must endure.

Ah, the passive voice. Who is subjecting her to such speculation? Why, Mark Leibovich is! In the pages of the paper of record.

Strunk and White would agree.

Andrew Samwick Worries About Inflation and Real Earnings

He writes:

Vox Baby: Real Earnings, Not So Much: The BLS released the May CPI report and the associated Real Earnings report. The news is not pretty.

The former reports that the CPI (CPI-U) rose by 5.2 percent at a seasonally adjusted annual rate in the first 5 months of the year of the year. It is not all energy costs--the CPI excluding food (another volatile sector) and energy rose at a 3.1 percent rate during that period. Even the lower number, if it reflected the whole index, should be enough to incline the Fed toward continued rate increases (spoken by a novice Fed watcher). Over the twelve months ended in May, the two indexes are up 4.2 and 2.4 percent, respectively.

But I've never been one to spend a lot of time thinking about inflation per se. What matters to me is whether the price level has risen relative to other macro variables, like compensation. The second report tells us that:

Real average weekly earnings fell by 0.7 percent from April to May after seasonal adjustment, according to preliminary data released today by the Bureau of Labor Statistics of the U.S. Department of Labor. A 0.3 percent decline in average weekly hours and a 0.5 percent increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) were partially offset by a 0.1 percent rise in average hourly earnings.

And the failure for real earnings to advance is evident in every major sector, as shown in this table (focus on the bottom panel, so that the impact of declining hours is reflected). There isn't a single broad industry group where the real average weekly earnings have risen more than 0.8 percent over the past year, and all but two are actually negative.

This isn't the entire workforce--only the 80 percent or so who are production or non-supervisory workers on private, nonfarm payrolls. It isn't total income--just the (pre-tax) earnings component of it. It isn't the whole economy--just the returns to this segment of the labor market. But it isn't good.

Fafblog! Has Returned!

Fafblog is back.

BoingBoing sings the hosannas:

Boing Boing: Lampooning the American dismissal of Gitmo suicides: Fafblog today features a scathing, brilliant satirical look at the US characterization of the Guantanamo Bay suicides as an attack on America. Fafblog is consistently the best political satire/commentary on the net, the Web equivalent of Jon Stewart and Stephen Colbert, and they're finally back after a too-long hiatus. The characterization of the Gitmo suicides as an act of terrorism is so ugly and disingenuous that it begged to be punctured. I'm thankful that Fafblog is back to perform that service.

Run for your lives - America is under attack! Just days ago three prisoners at Guantanamo Bay committed suicide in a savage assault on America's freedom to not care about prisoner suicides! Oh sure, the "Blame Atrocities First" crowd will tell you these prisoners were "driven to despair," that they "had no rights," that they were "held and tortured without due process or judicial oversight in a nightmarish mockery of justice." But what they won't tell you is that they only committed suicide as part of a diabolical ruse to trick the world into thinking our secret torture camp is the kind of secret torture camp that drives its prisoners to commit suicide!...

A "Third Way" on Network Neutrality

The highly intelligent Lynne Keisling finds something interesting on net neutrality:

Knowledge Problem: A "Third Way" on Network Neutrality: Regular KP readers might have noticed my reticence to opine on the current net neutrality roilings (which is why I am grateful to Mike for picking up the slack). There's a good reason for that: I don't find either of the polemic, binary, extreme positions that are being argued and memorialized in legislative proposals compelling or fully correct. I find the arguments in favor of so-called net neutrality histrionic and likely to lead to stagnation of the Internet. I am (much) more compelled by the arguments in favor of not regulating net neutrality, but I still have concerns about owners of the fixed wires infrastructure being able to earn uneconomic rents during the process of Schumpeterian competition for the post-broadband platform. Given that position, I thought it better to keep my mouth shut.

But no longer! I have ammunition! This ammunition takes the form of Rob Atkinson's and Phil Weiser's paper, A "Third Way" on Network Neutrality. Phil is one of the most thoughtful and knowledgeable scholars on this question (and I'm sure I'd say the same about Rob if I knew him!), so I take his arguments seriously. And this argument deserves to be taken seriously. For example,

We believe that the current state of the network neutrality debate, like many polarized issues, denies the reasonable concerns articulated by each side and obscures the contours of a sensible solution. In this paper, we outline both the reasonable concerns of each side in the debate with respect to the future of the Internet, as well as the claims made by each side that we believe are not factually correct or economically supportable. We hope that by doing so, and by placing the issues into a proper context, we can shed light on the underlying issues as well as articulate the essential elements of a sensible and effective solution.

Their "sensible and effective solution" involves three basic concepts: open information (broadband providers should state their access terms and usage policies clearly) for consumer protection, an ex post antitrust-competition policy approach instead of an ex ante preventive regulation approach, and targeted tax policy to encourage broadband investment. They take seriously the issue of complementarity within networks; in other words, for example, the idea that access to Google and other applications increases the value of broadband access, so what economic incentive do they have to limit your access if it means you would be willing to pay less for their broadband service?

I heartily encourage you to read this short, concise, well-written, reasonable argument. I don't agree with all of it (not surprisingly, I'm not a big fan of social engineering through tax policy), but I think this approach strongly dominates all of the polemic legislative proposals that are being considered.

Greg Mankiw Praises John McCain

Greg Mankiw praises John McCain and suggests everyone read his speech to the Economic Club of New York:

Greg Mankiw's Blog: McCain on the Economic Challenges: John McCain gave a speech to the Economic Club of New York yesterday.... (Full disclosure: I was among a handful of economists working for Senator McCain during the 2000 presidential primary, and I even rode the campaign bus with him for a couple days, but I have not talked with him since then.) The whole speech is worth reading....


McCain passes [the test] with flying colors. What the speech does not do, however, is propose specific policies consistent with these admirable generalities. But maybe that is too much to hope for at the beginning of a presidential campaign.

Here's what John McCain says about the fiscal policies of George W. Bush's administration and the Republican congressional leadership:

U.S. Senator John McCain: While booming entitlement spending threatens us in the long run, our short term fiscal situation is terrible as well. In the past six years, government spending has gone from irresponsible to utterly indefensible. The numbers should shock us, and government's indifference to them should shame us....


Legislators pass pork-filled bills without the fear of public retribution or presidential veto. Federal spending, and the special interest earmarks that destroy the budget process and waste taxpayer dollars by the billions continues at a breakneck pace. Sadly, we haven’t reformed the bankrupt “tax and spend” policies.... We have, it is now evident, merely replaced them with a new and even more insidious scheme of “borrow and spend.”...

Twenty Four Things

Susan Rasky and I are live at Nieman Watchdog with our twenty-four things:

Berkeley economics professor Brad DeLong teams up with journalism professor Susan Rasky on a quick guide for journalists who talk to economists and want to be in the information -- rather than disinformation -- business.

Twelve Things Journalists Need to Remember to Be Good Economic Reporters

Twelve Things Economists Need to Remember to Be Helpful Journalistic Sources:

Nieman Watchdog > Commentary > Twelve Things Journalists Need to Remember to Be Good Economic Reporters

Nieman Watchdog > Commentary > Twelve Things Journalists Need to Remember to Be Good Economic Reporters: Twelve Things Journalists Need to Remember to Be Good Economic Reporters COMMENTARY | June 13, 2006

Berkeley economics professor Brad DeLong teams up with journalism professor Susan Rasky on a quick guide for journalists who talk to economists and want to be in the information -- rather than disinformation -- business.

By Brad DeLong and Susan Rasky and

  1. Everybody's got an angle. The initials "Ph.D." don't guarantee impartiality. Ask your experts what their ideological opponents would say on the issue. Take what your experts say and advocate only as seriously as they can make a strong case for the other side--the side they oppose. Talking to "experts" who are interested not in educating but in confusing you is at best a waste of your time. Journalists are valuable and useful only to the extent that they are in the information rather than in the disinformation business.

  2. Never write "economists disagree." No matter how limited your space or time, never write "economists disagree." Write WHY economists disagree. An expert who cannot explain why other experts think differently isn't much of an expert. A reporter who can't fit an explanation of where the disagreement lies into the assigned space isn't much of a journalist. A journalist who cannot figure out the source of the disagreement is a journalist who is working for whoever has the best-funded public-relations firm--and is working for them for free.

  3. No naked numbers. Don't report numbers by themselves. Numbers have meaning only in context. And context is almost always impossible without explicit comparisons to other numbers. How does this number compare to other cities, other states, other countries, other eras? How does this number compare to total spending, spending on necessities, spending on luxuries, spending on other kinds of goods?

  4. No meaningless numbers. Do not report budget, trade, tax, or other numbers in billions or trillions or even millions. Use per capita or per worker or per household or per share terms to make them meaningful. It's not a $70 billion tax cut--it's $43,000 per recipient millionaire per year. It's not a $300 billion deficit--it's an extra $4,000 per family of four per year that the government has charged and is expecting you to pay through additional taxes sometime in the future.

  5. No fake trends. Three anecdotes do not a trend make. No matter what they told you on the features desk, three anecdotes do not a trend make. Make sure anecdotes that "fit just perfectly" are not grossly unrepresentative. Talk to people who know the Statistical Abstract and the National Income and Product Accounts and Historical Statistics.

  6. No invisible people. Don't tell half the story. Make sure you find all the players at the table, all the stakeholders in the outcome, all the participants in the market. Everywhere there are consumers and producers, bosses and workers, Americans and foreigners. An immediate corollary: Make sure you find all the moving economic parts--demand and supply, wages and profits, costs and prices.

  7. Follow the real-life incentives. Economists will tell you people respond to incentives. Journalists know that people are not quite so predictable--they respond to the incentives they see. The best stories are about unintended consequences. Always ask what incentives people see, how they react to them, and why they often don't see what economists think they should.

  8. Consider other perspectives. People make bargains or choices or contracts because they think they are good deals. Whenever people make what look to you like bad choices, ask what they see that you do not (and what you see that they do not).

  9. Consider the alternatives. People make lousy bargains or choices or contracts because they think their other options are even worse. Remember, always, to ask "compared to what?"

  10. It's all just transactions. Your calling as a journalist is to give the public the tools to evaluate government policies and actions. Government is not a glamorous gathering of celebrities. Government is not a sports cage match. Journalism is not a gossip circle. Report on government as you would report to your siblings on the rental agent your mother hired to handle her Florida condo.

  11. Know your sources. Don't ask international economists about the minimum wage; don't ask labor economists about global reserve demand.

  12. Know your customer. See Twelve Things Economists Need to Remember to Be Helpful Journalistic Sources.

Nieman Watchdog > Commentary > Twelve Things Economists Need to Remember to Be Helpful Journalistic Sources:

Nieman Watchdog > Commentary > Twelve Things Economists Need to Remember to Be Helpful Journalistic Sources:: COMMENTARY | June 13, 2006

In an accompanying piece to Twelve Things Journalists Need to Remember to Be Good Economic Reporters, Berkeley economics professor Brad DeLong teams up with journalism professor Susan Rasky on a quick guide for economists who talk to journalists and want to help, rather than hurt.

By Brad DeLong and Susan Rasky and

  1. Know your customers. Is the journalist who has just contacted you for comment on taxing internet services looking for a broadcast soundbite, for two paragraphs of context, or help in understanding how taxes work? Is she on a tight deadline?

  2. Be especially kind to the uninformed journalist. He gets ten points for calling you in the first place, and with rare exceptions, is almost surely working for editors who know less than he does. Encourage him, help him figure out what he should be asking you, and you'll be surprised about how much smarter he seems the next time he calls.

  3. Get over your snobbery about local television news. This is a genuine opportunity to reach the public. Learn to use it. Remember that the local TV reporter's gasoline-price story this evening will be seen by 300,000 people. Your op-ed will be read by 20,000, if you are lucky. Your journal articles will be seriously read by 12.

  4. Never say, "on the one hand, on the other hand." Always say, "I think X because I believe Y is most important; other economists will tell you Z because they think Q is most important. They're probably wrong because of R."

  5. Keep your sentences short. This is particularly important on radio and television. But it is wise for print as well. Pith and wit are always desirable. They are especially desirable if you are making fun of how economists talk.

  6. Use examples. Every theoretical point you make needs to be illustrated by a concrete example. Don't say: "It's supply and demand--long-term interest rates are low because the supply of capital is high." Say, instead: "Because the central bank of China has bought up $500 billion of Treasury bonds, the American banks that would have otherwise bought those Treasury bonds need to put their money somewhere, and that's why they are so anxious to make you a home-equity loan." Examples based on typical workers, typical households or typical families are the easiest for journalists and their readers, listeners and viewers to understand.

  7. Remember that the plural of anecdote is data. Help journalists understand how to find and use anecdotes that are representative of genuine trends. See Number 5 in Twelve Things Journalists Need to Remember to Be Good Economic Reporters.

  8. Look for teaching moments. Journalists are trained to believe that the cost of knee surgery for pets is as interesting and as important as the long-run cost of the Medicare Drug Benefit. They are not trained to distinguish between issues that are of vital importance to everybody and issues that are important only to a few unrepresentative yuppies. Clearly mark out where the water is, and lead journalists to it--they won't find it without you.

  9. Take control of the narrative. For instance, the story is how the oil market works in a time of high demand, not how evil the oil companies are. The oil companies' degree of evilness has not risen since 1998. But industrializing China now wants to burn a bunch more oil, and two decades of low oil prices have turned the U.S. into a land where Honda civics have been replaced by SUVs.

  10. Bust myths. For instance, people shouldn't think that suspending the pumping of oil into the Strategic Petroleum Reserve materially changes the worldwide cost of a gallon of gasoline.

  11. Be generous to your peers. Reporters have fairly loose criteria for expert comment, especially when they are hunting for quotes on deadline. Answer questions, but tell reporters who would answer them better.

  12. Just Say No. The corollary to the admonition above. Beware of getting overexposed. If you are quoted too frequently on too many general economic subjects, reporters will lose respect for your academic expertise.