White House Chronicle

News Analysis With a Sense of Humor

Now Meet Those Too Big To Be Denied

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We have all heard about “too big to fail.” How about “too big to be denied?”

Step forward two commercial sectors that are certain to get in the way of President Barack Obama’s reform plans: the nation’s health insurers and its defense contractors.

 

The former are bound and determined to hold their lucrative position in any extension of health coverage to the uninsured. In this way, a new health agenda will be designed as much to accommodate the insurers as the patients and providers.

 

Likewise as Defense Secretary Robert Gates struggles to reform defense procurement and to cancel some weapons systems, he has to deal with the massive power of the defense giants. In defense, the customer is always wrong; and the vendors, through their congressional sponsors, overwhelm the department and get what they want, not what field commanders need or the national interest cries out for.

 

Ironically the Clinton administration strengthened the defense lobby, and its ability to push around the Pentagon, by orchestrating the consolidation of defense contractors into a few behemoths, as part of the downsizing of the military in the 1990s. Norman Augustine, chairman and CEO of Lockheed Martin from 1995-97, told me that during his tenure, Lockheed Martin had absorbed 19 small contractors.

 

The big contractors of today–Boeing, Lockheed Martin, General Dynamics, Raytheon, Northrup Grumman, BAE and the European wannabe EADS—have conscientiously scattered their manufacturing among many states. One program has components made in 44 states. That means jobs, and jobs mean political clout.

 

The health insurers, who succeeded in sinking the Clinton health care reform effort, are ready for some concessions, but only enough to insure their dominance. The health insurers and their conservative allies are expert in predicting the arrival of creeping socialism, unless the private insurers retain their supremacy in financing and profiting from the health care system. Ironically, they claim any larger government role in health care will lead to rationing. Yet it is the insurers who ration health care now; and if you are in an HMO they ration it severely, cruelly and sometimes lethally.

 

A favorite argument is that health care reform will substitute the judgment of doctors for the judgment of bureaucrats. One of the more appalling aspects of the current situation is that the insurance companies day to day substitute the judgment of clerks for that of doctors.

 

The health insurers will not be denied, but they feel it is reasonable to deny the evidence against them. When health care was in the operating theater in the l990s, and Hillary Clinton was poised to plunge in the scalpel, the insurers rose up against anyone who had evidence that the system was serving the companies, not medicine and not patients. They succeeded in banning from the debate what they dismissed as “anecdotal evidence.” They wanted the debate discussed on a level where they could dismiss reports of their own shortcomings, and conduct the debate in terms of capitalism versus socialism.

 

It is only now, with business crying out for reform, that the issue is being aired again.

 

My anecdotal evidence is this: I have lived under government-run medicine in England. It works well enough. The young are favored over the old there, whereas here the old are favored over the young here. Now I am on Medicare,which is remarkably like being on the National Health Service in Britain, except I am being favored over the young.

 

For 33 years, I ran my own publishing company in Washington. After payroll, the biggest expense was health care. To keep the cost down we changed the carrier frequently, to everyone’s inconvenience and a lack of continuity. When one employee had a rare and painful cancer, the insurance company paid for radiation and chemotherapy but denied payment for painkillers.

 

For years, ATT ran the telephone system and ordained that plugging in a phone could not be performed by a customer and black instruments were all that should be offered. They were, they thought, too big to be denied.

 

Robert Gates has shown guts in trying to deny the oligarchs of defense. Congress will need bravery in denying rent-takers in health care. Meanwhile, those who are too-big-to-be-denied are pumping dollars into Washington’s K Street, where the lobbyists carry their water.

A Tale of Two Summits: London and Vienna

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Truth be to tell, the Group of 20 meeting in London was not much of a summit. That honor belongs to the Congress of Vienna which met from September 1814 to June 1815, and hammered out a peace that lasted for about a century.

 

The London summit has been a largely a European-American affair. But it did include the next stage in the coming out of China; the first was the Beijing Olympics.

 

It also was the international coming out of President Barack Obama, who was hailed by the European press as the most popular politician in the world. That was a real problem for the continental Europeans, who wanted to be seen to be his best friend while admonishing him that he was, economically speaking, full of it.

 

From the start, the G-20 delegates seemed to have only one goal: to write a communique that implied they were all on the same page when clearly they were not. Those in the eurozone could not accede to Obama’s stimulus ideas, even if they wanted to, because legally they cannot go as far in deficit spending as the United States without violating the rules that created the euro. Also the European Central Bank, which just lowered its key interest rate to 1.25 percent, when it was hoped it would go lower, is much more conservative that the Federal Reserve and its independent chairman, Ben Bernanke.

 

The Euros are also deeply suspicious of the Obama administration’s plans to save the car industry. Nearly all of them have been down that road over many years with disastrous results. They also have been trying to create jobs with government programs, incentives and retraining which have not put a dent in their structural unemployment. “Look, we know a thing or two about messing up,” is their message to Obama.

 

The Euro pols could not have agreed with Obama, even if they had wanted to, but they wanted to wrap themselves in the magic, the popularity and the originality of the American president and his wife. Who would have believed that first lady Michelle Obama would outdazzle Nicolas Sarkozy’s wife, the gorgeous former model Carla Bruni.

 

The big news, according to the participants, was the $100-billion trade credit plan and the strengthening of the International Monetary Fund.

 

The real news, not missed by the storied British tabloids, was that the first lady hugged the Queen–something that has not happened in all of recorded English history–and that Canadian Prime Minister Stephen Harper missed the de rigueur group photo because he was answering the call of nature.

 

More than anything else, the London summit was brief. The delegates only met in plenary session for few hours–a time frame that guaranteed that they could neither overhaul the international banking system, nor really get to know each other.

 

How different from that greatest-of-all-summits in Vienna with its parties, Lipizzan stallions walking on their hind legs at the Spanish Riding School, and chefs and musicians composing great dishes and exquisite ballroom music.

 

The congress was convened by the great Austrian foreign minister Klemens Wenzel von Metternich to tidy up after the French revolutionary wars, the Napoleonic wars and the end of the Holy Roman Empire. It never met in plenary session and relied on an endless informal exchanges between the delegates from more than 200 states and princely houses. But the big states dominated and pushed the lesser states around, assigning them new borders, monarchs and sometimes names. Europe was carved up on conservative lines, with a determination to lesson the impact of the French Revolution and the American Revolution.

 

Some of the arrangements had to be modified and there were some wars followed (the Franco-Prussian), but nothing like the endless fighting on the continent that had preceded the congress. It set in motion the consolidation of Germany and established Vienna as the place to be for New Year’s.

 

The London summit may be remembered not for its economic achievements, but for the first American president who has no of hint of Eurocentricity, and cannot trace all of his ancestry to that continent.

 

 

 

 

Fatigue as the Ultimate Healer

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I first encountered the healthy corrective of fatigue when I was a young writer for a television news service in London. I was chronically late. Every interview I did started with an apology. Every day when I showed up for work, I was late. My supervisor would look at me and at the clock and sigh.

 

One day, I decided that the price of being late was too high: If you have to start with an apology, you never get a decent interview and the long face of my supervisor was painfully reproving. I was tired of my self-imposed misery. I was fatigued with my own sloth. Since that time, I have been fairly punctual.

 

Fatigue, it seems to me, can be motivator in governance and foreign policy. Take the three great revolutions of our time: accommodation in Northern Ireland, the collapse of apartheid in South Africa and the end of the Soviet Union. I submit that in all of these, fatigue played a critical if not seminal role.

 

I have been in and out of South Africa all of my life. Sure sanctions and international pressure played a role in bringing about change. But there was something else at work: fatigue. The people of South Africa were very tired of their own creation. Driving across South Africa in the 1970s with an African relief driver, I ran into what used to be called “petty apartheid”: segregated places to eat. As a result, we took out food and ate it in the car. But at two roadside eateries (they were few and far between), the owners apologized to me for the offensive law. The weight of the injustice was getting to them.

 

That was the first time I saw a sufficient glimmer of hope that peaceful change would come, as it did.

 

In Northern Ireland it appeared that the sectarian violence, which emerged in 1963, would go on forever. Catholics and Protestants were killing each other in barbarous ways and terrorism was spreading into Britain. Over the 15 years I participated in a think tank in Ireland, I heard endless speeches from both sides about the hopelessness of the situation in which the Irish Republican Army, the right-wing Protestant “hard men” and the British Army fought a triangular terrorist war.

 

On a summer’s morning in 1982, there were two terrorist attacks in the center of London. A car bomb was detonated as 16 members of the Queen’s Household Cavalry trotted along a Hyde Park’s South Carriage Drive; and less than two miles away, in Regent’s Park, a military bandstand was blown up. Toll for the day: 10 soldiers killed, 55 injured. The I.R.A. claimed responsibility for the strikes. All of Britain was on a terrorist footing, but that did not stop an attack on Prime Minister Margaret Thatcher in Brighton, England two years later.

 

By the 1990s, you could sense a change in Ireland: People were tired of the killing and living in fear. Without that fatigue, that revolution, the Good Friday agreement of 1998 and power-sharing, would not have happened.

 

Likewise by the late 1980s, the Soviet Union–the edifice of communism with its incompetence, its privations and its paranoia–had lost the loyalty of the people and the terror apparatus of the state was failing. Russians were tired of it and Poland was in near revolt. Mikhail Gorbachov loosened the reins and things hurtled forward.

 

Alas fatigue is not a policy, not even a strategy. It is just a reality; a factor in protracted disputes, oppressive governance and pervasive injustice.

 

When, then, will fatigue set in between combatants in the Middle East, the oppressed of North Korea or the misgoverned of Africa? According to my theory of fatigue, these things are overdue. But it is easier to fix your own timekeeping than history’s.

 

 

 

 

 

 

 

 

The Tricks of Limbaugh’s Trade

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The formula is quite simple really; and it was known many years before Rush Limbaugh ever breathed on a microphone.

It is this: Know your audience’s prejudices. When you know these, blow on them, give them oxygen. Know the frustrations of the audience and articulate them.

British tabloid newspapers have done this for decades. They published editorials that were shrill and polemical, often on the front page. Sometimes the whole paper became the polemic as when, on Nov. 1, 1990, the London Sun blared in its largest type on Page One, “Up Yours Delors,” in response European Commission President Jacques Delors’ supposed attempts to force the Maastricht Treaty upon the United Kingdom. A far leap from the magisterial analysis of most American editorial pages.

However, the restraint of our newspapers is made up for by the abandon of our broadcasters. Hence, Rush Limbaugh and the absurd spectacle of the conservative talk show radio host challenging President Barack Obama to a debate, as though he were really the leader of the opposition. Preposterous, yet entertaining.

Less entertaining, though, for Michael Steele, the newly elected chairman of the Republican National Committee, who had to apologize to Limbaugh for calling him an entertainer and “ugly.” How humiliating for Steele: the sovereign apologizing to the jester.

How discomforting to serious journalist-philosophers of the right, like George Will, Charles Krauthammer and David Brooks. What are they to make of the crude philosophy of Limbaugh, and his sway over the party they have husbanded since the bleak days before Ronald Reagan? Ironically, the best political writers and thinkers of the last 40 years have tended to be from the right rather than the left.

It is unlikely that the philosophical powerhouses of Republicanism will be silenced for long. But they will have to grip with the central weakness of their party. Its appeal is limited to a certain strata of the political body politic: traditional white voters in the upper reaches of the middle class.

To counter this, the Republican Party, indeed the conservative movement, is forever in need of alliances with other groups that can be co-opted for an election or two. These have included the white working-class and the Christian right. And these are, from the conservative point of view, what might be called half-believers—they are on board for some, but not all of the conservative canon.

The white workers feel they are an endangered species, trapped between immigrants and the underclass–to them, loosely, the welfare class. They are scared to look down for fear they will sink and depressed if they look up to a world that requires skills they do not have. Broadcasters like Bill O’Reilly and Limbaugh mine their fears, pump up their jingoism and tell them that they are not alone they have to fight the political Antichrist: socialism. These broadcasters are ready to say it is European evil, planning to take away honest people’s guns and take away freedom.

The appeal to the religious right centers on the abortion issue more than any other. To conservative Christians, it is central to their faith. But is it central to conservatism? This is the fault line between social conservatives and the affluent stalwarts of the party, and those it cultivates with the aid of sympathetic broadcasters like Limbaugh, who keep the faithful faithful.

It is great fun for liberals to see Republicans groveling to an absurd figure like Limbaugh and to savor Steele’s humiliation. But they should be wary of Limbaugh’s strength. While it lasts, it is to punish errant Republicans, like Sen. Arlen Specter of Pennsylvania, making bipartisanship in the Senate hard to come by. For now, Limbaugh is a force to be reckoned with on both sides of the aisle.

 


Sam Donaldson Moves Out of Focus

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Sam Donaldson has retired from ABC News after 41 tumultuous years. His going–without an official send-off or even a press release–was the way he wanted it. A loud man, Donaldson elected to go quietly. We all should miss him. He was good for his audience and a tonic for his colleagues.

 

As controversial as he was competent, Donaldson is not so much remembered for his reporting around the world as for his years as ABC’s chief White House correspondent–and for his antics in that role.

 

Sam covered Presidents Jimmy Carter, Ronald Reagan and Bill Clinton. But, he told me when I interviewed him on my television program, “White House Chronicle,” that Reagan was his favorite. Donaldson famously shouted questions at Reagan, who clearly enjoyed the repartee–sometimes breaking away from his staff to answer one of the questions Donaldson shouted from behind the rope line.

 

The public–and maybe some of the suits at Disney, which owns ABC—thought Donaldson rude. Clearly, Reagan did not. Two fine actors were enjoying their roles, feeding off each other.

 

And that is the thing about Donaldson; he is always on. The energy he showed in bawling at presidents was the same energy that invigorated the White House press corps.

 

Make no mistake, Donaldson has always been an invigorator, a controlled explosion of a man. When he was in the White House briefing room, it was palpably alive. When he was not there, it was as it is today: earnest, serious and subdued. The closest personality to Donaldson’s for sparking up the briefing room has now moved on: David Gregory. Without big energy, the place lacks a robust sense of itself.

 

Television and print both seek to tell the news, but they are not the same animal. Shouting out at presidents, or anyone else, will not help a print reporter. Deft cultivation of sources and a sensitive ear are the tools of great White House scribes. But for television, the getting of the story can be as much the story as what is elicited. On a TV news program, the quarry pushing away the camera is significant. It is just a frustration to a newspaperman.

 

Donaldson knew so well that a question avoided by the subject on television amounts to a question answered. In an interview with The Washington Post, Donaldson said he might have gone for a contract renewal if ABC had a program like CBS’s “60 Minutes.” Clearly, Donaldson misses the years of confrontation.

 

As a White House reporter, Donaldson’s strength was an indifference to what people thought about him. He did not care whether his antics annoyed his colleagues. And he had the good sense to ignore his peers.

 

At the end of Clinton’s visit to China in 1998, there was a full press conference in Hong Kong. That was before former President George W. Bush insisted on having a list of reporters to call on and the questioning became formulaic–something, sadly, President Barack Obama has continued to do.

 

Donaldson failed to find a front-row seat, where he could be heard. Undeterred he found a chair at the back of the room, carried it to the front, set it up with the back facing forward, and sat with his arms resting on the back. Simply, his action said: “I am Sam Donaldson, and I am here to question the president of the United States.”

It was pure chutzpah; and it worked. I doubt the preselecting of questioners by the current White House staff would have survived the Donaldson treatment.

 

He could also be considerate. In Uganda, during Clinton’s extended African trip, a large gathering of schoolchildren, local officials and, of course, the traveling press was assembled in an arena under a broiling African sun. As usual, Clinton was inconsiderately late. Everyone baked, but none more than the video crews in the “pod,” which is the structure in front of the podium from which the president is to speak. They were trapped, unable to leave in case Clinton appeared. The rest of us were given crates of life-saving ice water.

 

It was Donaldson who realized their predicament and struggled through the crowd with ice water for the crews. It was thoughtful and observant.

It was the softer side of Sam Donaldson: correspondent extraordinaire.

 

 

 

 

Changing Direction in the Drug War

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Mexico is being torn apart by drug gangs, often wrongly called cartels. Cartels are created to uphold prices. In the case of Mexico, it is law enforcement and the prohibition of drugs that upholds prices–and makes drug dealing irresistibly profitable.

 

All along the drug chain there is death, from the campesino in the jungle who runs afoul of a drug lord to the overdosed addict.

 

The libertarian solution is legalization. It was endorsed by the late conservative William F. Buckley Jr. and by The Economist magazine. This would work if not one new user were to come into the drug culture. But drugs are aggressively proselytized.

 

The British learned this the hard way. In the early 1960s, they thought they had the hard drug problem licked with a form a legalization that worked. Heroin addicts—and there were few, just 27 in London–were under the care of a doctor and they would line up at pharmacy, waiting to get their prescriptions filled. This was fairly easily managed because heroin is a legal medicine in Britain, used as a pain suppressant for the terminally ill. The British were so proud of how they handled the hard drug problem that they liked to lecture Americans on how it should be done.

 

Then it all fell apart. An addict broke into a storage unit and introduced a wide range of people to heroin. The speed at which heroin addiction spread frightened the authorities. From a little over two dozen addicts, the number in London jumped to over 250. The government was shocked by the dependence and the proselytizing effect. Additionally, immigrants were pouring into Britain and bringing with them a culture of drug use.

 

The flood gates were open. Britain is now overwhelmed with drugs and no solution to the problem is in sight.

 

Here is a modest proposal: legalize marijuana. It is widely available and is used at every stratum of society. The economy of Mendocino County in

California is dependent on it and the Florida Keys are awash in smuggled pot. The Royal Canadian Mounted police told me they believe there are more than 10,000 grow houses around Toronto. They cannot compete with the growers.

 

The horticulture of marijuana is improving–the latest advance is cold light and hydroponic tanks. More the active ingredient, THC, is getting stronger and plant yields are way up.

 

The war on marijuana cannot be won because society does not take the consumption seriously. I have seen it smoked everywhere by journalists, musicians, a publisher and a Wall Street analyst. Sometimes, you can smell it in the park across from the White House.

 

I never fancied it myself. I tried it but I did not get high or develop the munchies. A stronger drug, alcohol, has been my downfall. I would have got in less trouble with pot.

 

Stabilized, taxed and supervised marijuana would be an advance on today’s hodge podge of tolerance and intolerance. Federal law is intolerant and state law can be quite lenient. Some states tolerate personal use but cultivation is frowned on. This prohibition is expensive, ineffective and contributes to the woes in Mexico.

 

Pot has been legal in Amsterdam for decades. The Dutch prefer those seeking a changed state to smoke a joint rather than use a hard drug or get falling-down drunk.

 

We also can do something about hard drugs. Considering the British experience, it has to be done with care. However, there is a road map. The French banned absinthe, a liquor distilled from wormwood, because it caused such damage to drinkers—the artist Henri de Toulouse-Lautrec comes to mind. But rather than driving the fierce spirit underground, they introduced a substitute, Pernod. No underground bootleg trade resulted.

 

Therefore, we ought to throw science at the two big imported tropical drugs, heroin and cocaine, with a view to neutering them. If you cannot, as you cannot, end the human desire for changed states, make drug use safe—that is non-addictive but enjoyable.

 

So there are two possibilities for winning the war on drugs: unbundle them, and take marijuana out of the mix, and throw science at the dangerous drugs. There are other wars to be fought and won. Winable wars.

Zimbabwe’s Days of Yore and Plenty

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The pictures are harder to take than the words. The words you can skip over; the pictures take you by the throat. All of my boyhood in Southern Rhodesia, now Zimbabwe, came surging back to me with choking sorrow when I saw press pictures of Zimbabwean children digging through the roadside gravel, in the hopes of finding kernels of maize–corn in American English–that may have blown off passing trucks.

 

When hunger stalks Africa, maize is more important than gold–the difference between living and dying. It is eaten in several ways; even the stalks are chewed in the way Latin Americans chew sugar cane. Mostly, it is made into a stiff porridge called sadza.

 

Some of my earliest memories of the vital importance attached to maize go back to when I was nine years old and was awarded the job in our household of measuring the weekly maize ration to each employee. By law, every man–and domestic helpers were mostly men–received 15 pounds of maize each week.

 

My job was to watch the precious ground maize—grits to Americans–weighed out of 100 lb. sacks into smaller sacks. The weekly weighing was a jolly time, with much joking and laughing (and you have not laughed, until you have laughed in Africa) while the meal was dispensed, weighed with a scale hung on a tree limb.

 

This weekly ceremony, together with the distribution of stewing beef, was symptomatic of everything that was right and wrong with life in colonial Africa. It was humanitarian; it was generous; and it was patronizing. The amount of meal far exceeded the daily consumption of one person and was designed, although this was not mentioned, to feed more than one hungry mouth. It was a government-abetted welfare; paternalism in action.

 

I have often thought about this conscious food distribution from the better-off whites to the poor blacks as less an act of racism than of British class snobbery: noblesse oblige in the colonial context. It was the same instinct that caused the viceroy of India to pretend to find work for 5,000 people at his palace in New Delhi.

 

Much of the meal ration found its way to extended families in the townships or to peddlers who came around on bicycles. None of it went to waste. The classic meal, eaten with little variation, was sadza, which is a dumpling that diners shape with their hands and dip into a stew made ideally with meat, but sometimes with other protein-rich ingredients like beans, or termites and caterpillars, which were harvested as delicacies. I ate a lot sadza with various stews, but the caterpillars were beyond me.

 

The question I have most often been asked is, “What was it like in Rhodesia?” I have never had a good answer except to say that it was like living in a good London suburb, but with a back story of indigenous people who came and went in our lives without really registering. British author Evelyn Waugh described this phenomenon as far back as 1937, when he wondered at the “morbid lack of curiosity” of the settlers for the indigenous people. He might have been told that it was the selfsame lack of curiosity that his characters in “Brideshead Revisited” had about the workers in the rest of England.

 

At this passage of time, it is almost possible to defend the British in Rhodesia. Their greatest gift, I sometimes think, was not democracy, law, literacy or religion, but the golden maize they brought with them in l890, which replaced rapoco, a low-yield grain grown in the region. Maize was produced in such abundance in Zimbabwe, before President Robert Mugabe destroyed the commercial farms, that it was exported throughout southern Africa.

 

Now the breadbasket is empty; and children sift through roadside gravel for corn kernels blown from trucks. Would I could fix my scale to a tree and weigh out a plentiful measure for those children, who are no older than I was, when I was the quartermaster in another time.

The Battle Lines over Energy Are Drawn

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It has been said, and repeated in articles and books, that Ben Bradlee, the legendary executive editor of The Washington Post, managed his newsroom through dynamic tension. The idea here is that two people are left to fight it out for the same job.

 

I never saw that anything was gained by this in my time at The Post. But what I did see was Ben’s habit of hiring the smartest, most ambitious people he could find. It wasn’t tension between two, but among many.

 

The problem was that there weren’t enough great jobs to accommodate the best and the brightest coming across the threshold. People would be hired who thought they were going to rise to the top in weeks and report their way to great glory.

But the people who had the great jobs, like David Broder, the chief political reporter, and diplomatic correspondent Carroll Kilpatrick were not about to surrender their turf to the latest aspirant.

 

In the end, Bradlee’s innocent desire to hire the best had a toxic effect. Rather than creating a newspaper of happy savants, it made for one with the worst internal politics of any paper outside of The New York Times, where, for different reasons, the same degree of infighting was part of the culture.

 

On the face of it, newspaper management may not have much in common with political administration. But I aver that it does, or at least it will for Barack Obama.

 

In two of the areas where much is expected of the president-elect, foreign policy and energy, I detect Bradlee’s management style. In foreign policy, Obama has set up an incipient tension on a grand scale. There is the imperious Hillary Clinton, who has many virtues, one of which is not diplomacy. Those who know her say that if she is crossed or undercut, the secretary of state-designate will strike with the stealth, speed and ferocity of a crocodile taking a wildebeest.

 

Besides Clinton, three others on team-Obama will want to make their mark on foreign policy: Vice President Joe Biden, National Security Adviser James Jones and Secretary of Defense Robert Gates.

 

Similarly energy policy, and the implementation of the president’s policy, has all the ingredients for covert warfare.

 

Obama has chosen to make Carol Browner the energy czarina, complete with an appointment at the office of the president and all the authority that implies. Ostensibly, her role is to coordinate the energy activities of the Department of Energy, the Department of the Interior and the Environmental Protection Agency.

 

However ideology, rather than coordination, may be the order of the day.

 

The energy secretary nominee, Steven Chu, is a Nobel Prize-winning nuclear physicist who quoted William Faulkner in his acceptance speech. Browner and Lisa Jackson, who has been tapped to head the Environmental Protection Administration, are not energy experts. Instead, they are the products of the environmental movement and service in the Clinton-Gore administration with its suspicion of big energy; its pathological hesitation about nuclear; and its belief that somewhere out there is the soft path which, if taken, leads on to reduced oil imports, cleaner skies and millions of jobs.

 

Chu will have his hands full just keeping the Department of Energy functioning. It is poorly constructed, designed around fuels without an integrating purpose. Also in 2000, Congress established the National Nuclear Security Administration as a separately organized agency within the DOE. Consuming $20 billion of the department’s $25 billion budget, it is a managerial problem. For the money, the NNSA refreshes the nation’s weapons stockpile; designs and computer-tests new weapons; manages the legacy nuclear wastes from earlier weapons work; conducts monitoring and surveillance of weapons programs, both legal and illegal, around the world. Prima facie, this is more than Browner, a former EPA administrator, may be ready for.

 

Finally, the new team has implicitly been charged with creating millions of new jobs. Alas, that may take more than the first Obama administration to implement. Notoriously, energy has always been capital-intensive and labor-light. It is not a big employer. Only in the extraction of coal was it once a big employer, but mechanization has reduced the need for men with picks and shovels.

 

It is a good guess that Browner will tell Chu what is expected, and he will tell her what is possible. And there’s the rub.

Wanted: Renaissance Person for Energy Secretary

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While most of Washington is fascinated with the triangle of strong personalities that President-elect Barack Obama has empowered to preside over foreign policy (Jones, Clinton and Biden), another constituency is wracked with the agony of hope. It is the bitterly divided energy constituency which hopes that a new secretary of energy will lean their way.

The most hopeful of these are the greens who have taken Obama at his word, and who expect a flood of money for wind, solar and biomass; great new jobs; and crippling limits to the use of coal and nuclear.

But there is another constituency that believes that it is the real green alternative: coal. Or, more precisely clean coal. Already, this receives nearly $1 billion a year in funding, much of it going to carbon capture and sequestration–a concept fraught with legal, political and technical difficulties but popular with the utilities and the miners. Died-in-the-wool environmentalists look at it as a trick at best and a semantic obfuscation, designed to deceive the public, at worst. Clean or otherwise, coal will be burned for decades to come–most of it in its dirty form, the experts tacitly acknowledge.

Another constituency, which was just feeling it could be listened to is nuclear. John McCain raised hopes when he talked about 45 new reactors, and nuclear advocates hoped that Obama heard that loud and clear.

Now, two clouds hang on the nuclear horizon: opposition in the Democratic Congress and the credit drought. The advocates believe they can coax the Congress to their point of view, especially with a pro-nuclear secretary. But they are not so sure about the credit markets, even with loan guarantees. A new plant could cost between $10 billion and $14 billion. That is a lot of borrowing and John Rowe, the chief of mighty Exelon Corporation, has said no utility can build the plants unaided.

Then there are the seldom heard but influential nuclear weapons hawks who would like to see a secretary who understands the aging nuclear stockpile, and worries about the effectiveness of weapons that have not been tested in a generation. They want the stockpile updated; new weapons designed and built and, if feasible, tested underground. They are said to be lead by that grand old man of Washington policy wonks, former national security adviser Brent Scowcroft. They point out that $20 billion of the Department of Energy’s $25 billion budget is earmarked for weapons. It goes to the somewhat autonomous National Nuclear Security Administration.

To be secretary of energy is to preside over a complex archipelago of almost totally unrelated responsibilities. The department has nuclear waste, nuclear verification, nuclear stockpiles, warhead decommissioning, and various black programs to deal with before one calorie of energy is produced.

A source with 30 years of experience in the DOE warns: “You can’t turn a battleship around in the bathtub, and budgeting here is like that.”

The department is not only remarkable in its reach but also in its staffing. It directly employs about 7,000 people. But through the big nine national laboratories, it has dominion over 130,000 people. This makes the DOE unique and, in some respects, advantages it. While the labs work on far-flung projects for other agencies, and sometimes private corporations, they are controlled and funded by DOE. One secretary told me: “It’s like having a private army. The labs, with all of their Ph.Ds will do anything so long as you fund them.”

What is certain is that the new secretary, unless he or she has had extensive experience with the department, will be shocked to learn that the DOE has little to do with energy today. It is really a series of giant sandboxes for scientists to play in.

Bad Choices about Detroit

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The case for saving Detroit is lame. The case for letting the three domestic car companies fail is terrifying. Good choices, there are none. It is reasonable to expect a third way to be proposed, but it has not yet. It is urgently needed.

 

The nation needs a capable domestic vehicle manufacturing base for defense capability; but does it need three moribund companies that have lost their way, compared to their global rivals who are, in some cases, manufacturing competitively in the United States.

 

When a choice between two is too fraught, the need is another option. Fail or nationalize is too stark a choice. Something else is needed and the time-honored option is to appoint a commission to weigh the assets of the car companies and to decide on how they can be capitalized upon.

 

The three domestic vehicle manufacturers, which are far from being wholly domestic, do have assets, mostly overseas–especially General Motors and Ford. For decades, their operations in Europe have been prosperous. For more than 20 years, Ford has looked to Europe for its profits and GM has been enormously successful in China and Russia and with its German subsidiary.

 

 

It is one of the mysteries of the automobile world that Japanese and German manufacturers have been able to bring to America successful cars first marketed somewhere else, but the Big Three have not. Never was this more apparent than after the first oil crisis in the l970s. Detroit did try to meet the demand for smaller cars but by producing some ghastly lemons: cars with a poor power-to-weight ratio, while the Japanese and the Germans simply upped their imports of proven cars. The choice between the Ford Pinto and Volkswagen Rabbit was no choice. Remember the Chevrolet Chevette? Bet you’d rather not.

But at the time a whole crop of lemons was coming out of Detroit, the same companies were making excellent small cars in Europe: GM under the Opel name in Germany, Chrysler as Simca in France, and Ford under its own name in England. Why did these companies have to make small cars from the bottom up in America? I have asked this question many times and have received no good answer. Only guff about the American consumer being different. Put that in your Toyota and smoke it.

 

A bailout on the basis now being discussed has another problem. If Congress directly finances the Big Three, it is only a matter of time–a short time–that Congress will be designing cars. That will guarantee catastrophe.

 

If you doubt it, look what happened to the motorcycle industry in Britain. As company after company fell to the twin evils of bad management and Japanese competition, the government, under the socialist leader Wedgwood Benn, stepped in to consolidate the one proud and dominant world of British motorcycles—marques like Aerial, BSA, Matchless, Norton and Triumph were swept together to make the super British bike. The only thing missing from the mix were the customers; they bought Hondas, Suzukis and Yamahas.

 

There is an old joke about a refusenik family that resettled in Israel. They wanted to operate a shoe shop and the Jewish Agency, which handled such things, provided them with a great little emporium, complete with stock. They were delighted. A month later, the father was back at the agency. “We have a small problem,” he said. “You forgot to order our customers.”

 

The empirical evidence is not reassuring that American consumers will again want to buy from Detroit’s finest.