White House Chronicle

News Analysis With a Sense of Humor

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.

 

 

The Placemen Cometh

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After the deluge, the deluge. That is right. The upheaval in Washington that follows every presidential campaign where the incumbent, or his vice president, is not reelected is massive and affects the routine governance of every aspect of the nation.

 

Essentially, it is a period during which much of the federal government is rudderless. Scholars, like John Fortier of the American Enterprise Institute, say it is also a period during which the United States is more than usually vulnerable to its enemies and to crises.

 

Although the framework for transition is put in place before elections, it is immediately afterwards that everything begins to roll. The very first appointments the new president makes are not to the Cabinet but to his transition team, which bears the brunt of seeing that a new government takes over without chaos or endangerment of the country.

 

Think of General Electric. It is a large, diversified company with interests in locomotives, jet engines, nuclear power plants, consumer goods, finance and broadcasting. Now, think of what would happen if all of the company’s executives, from the chairman down to the shop-floor supervisors, were to leave within days of each other. You would expect decision-making to be frozen, and GE franchises to be under attack from competitors. Yet, on a grander scale, that is what will happen in Washington in the weeks ahead.

 

In a hypothetical remaking of GE, the stockholders and their new chief executive officer are free to hire whomever they wish, and to shuffle them without the media blowing a fuse. The president of the United States does not have that luxury. His key managers–all 1,100–have to be confirmed by the Senate. But first, they have to be vetted by the newly installed White House staff. Assuming they will take the jobs, the candidates are cleared informally with their home state senators. Then it is on to confirmation, and all that that has come to entail.

 

For critical Cabinet posts, such as defense, state, treasury and the Office of Management and Budget, the Senate likes to give the president his choice of executive. But in contentious political times, nothing is guaranteed in the confirmation process.

 

Some 7,000 government jobs change hands with a new administration, and the process among the president’s inner circle can be bloody. Those who labored in the campaign believe they are entitled to first dibs. The best thing a new president can do is identify his chief of staff early on, and let this appointee shield him from contention among those who helped elect the candidate.

 

An administration is inevitably shaped by the people a president knew before he was elected. Ronald Reagan had a major advantage. As the former governor of California, and an established national figure, Reagan’s Rolodex was bulging. Jimmy Carter’s Rolodex was not bulging, nor was Bill Clinton’s. George W. Bush had a fat Rolodex, but it was stuffed with the names of his father’s operatives.

 

Each appointment tends to initiate the next one. Caspar Weinberger and George Schultz both worked for the Bechtel Corporation, as did others who served in the Reagan Administration, including Kenneth Davis, deputy secretary of energy.

 

Many ambitious people with institutional backgrounds are poised to serve in government, and they have been advising the campaigns in the hope that this will buy them favor. These potential placemen are poised n their institutions to take up high office in Washington, whether they are at Harvard University, the Rand Corporation, The Brookings Institution, or one of the plethora of new think tanks around the city.

 

The poet Lord Byron said of sex, which he knew a thing or two about, that the pleasure was momentary, the position ridiculous and the scandal damnable. Of politically appointed service, it might be said that the pay is meager, the scrutiny intolerable and the damage considerable. Consider Colin Powell, Scooter Libby, Paul O’Neill and Paul Wolfowitz. Yet still they want to come to Washington, and a huge new crop has to be harvested under pressure between now and Jan. 20, 2009.

 

Presidents do not manage very much, but they do appoint talent and validate the decisions and policies of those they appoint. They also must guard against rogue appointees, like Ollie North and Bob Haldeman, who can hurt and embarrass an administration.

 

 

Requiem for Reporting

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The newspaper of the Newspaper Guild tells the terrible truth: traditional newspaper journalism is dying faster than anyone thought. Almost every major newspaper is making drastic cuts in staffing, from The Washington Post to The Chicago Sun-Times, from The St. Louis Post-Dispatch to The Philadelphia Inquirer, and from The Dallas Morning News to The Modesto Bee. Forty percent of the Newark Star-Ledger’s newsroom staff will depart in a buyout wave. Jim Wilse, editor of The Star-Ledger, said 151 buyout offers were accepted in a newsroom of about 330 people.

Here in Washington, the all-important bureaus which make up most of the Washington press corps are being decimated; and I mean that in the current usage of cut by 90 percent, not the original usage of cut by 10 percent. Colleagues and friends abound who are writing books, trying public relations or seeking government jobs.

The cause of the hollowing out of newspapers is well known: the Internet is getting the information out faster, it is mostly free and the reader can access it selectively. The trouble is that the information on the Web is, if it is any good, first appeared in a newspaper somewhere.

Newspapers still keep the record, but they are woefully behind the times. Today’s newspaper makes no concessions to the passage of time. It is produced in a factory in the middle of the night, transported through the traffic, and entrusted to a child for delivery.

 

Worse, the business model is hopelessly outmoded. It relies on a healthy stream of advertising revenue to make up for the poor income from actual sales of the product.

 

The story is the same in all advanced countries. Newspapers are in trouble, serious, mortal trouble. Only in emerging markets are newspaper sales growing, and that often reflects poor penetration of personal computers and government control of broadcasting.

 

Newspapers have suffered electronic competition in the past and survived. They were portable and kept a tangible record of events. You cannot hook up a printer to a radio or a television set, but you can to a computer. Advertisers can even distribute coupons via the Web.

 

H.L. Mencken, America’s greatest journalist, feared for the morning newspapers in his day because all the circulation and wealth was in the evening papers. Television put paid to that.

 

In Washington, until the 1960s, the dominant paper was The Evening Star. After its purchase and merger with The Times Herald (a weak morning paper owned out of Chicago) in 1954, The Washington Post became the most important political newspaper in the country and a cash generator for its owners. The 40-year golden age of the morning newspaper was dawning. Now it is fading.

 

The mighty New York Times lost money in one quarter this year and may repeat the sorry event. The Washington Post is being subsidized by a test-cramming company, Kaplan, Inc. Two once-proud titles, The Chicago Tribune and The Los Angeles Times, are at the mercy of a man who, in newspaper terms, is a Philistine—loud-mouthed, vulgar and insensitive to the journalistic craft.

 

There are those who would take pleasure in the agony, and what might be the death throes, of the mainstream media, but they would be ill advised. With the death of newspapers goes the health of the Republic. Democracy only works with a vigorous, disrespectful press, demanding and providing transparency in every aspect of life. The press may be disreputable and eccentric, but it is the indispensable partner of the ballot box.

 

Freedom of the press is the freedom to comment and to criticize. But more important, it is the freedom to investigate. Without investigation, government, corporations and even science goes about its business in the corrupting dark.

 

Already, reflecting the collapse of the Washington reporter corps, there has been a falloff in the number of Freedom of Information Act requests. There are fewer newspapers which can afford to have correspondents travel with the president. Newspapers are not detaching reporters for investigative work of the kind undertaken by The Washington Post on the Walter Reed Army Medical Center. Foreign bureaus, in critical places like Baghdad and Kabul, are not being staffed, let alone Moscow, Beijing and Tokyo.

 

No entity in the blogosphere has the resources to take up the newspaper role.

Opinion is cheap. Reporting costs money–a lot of money. The unintended consequence of this collapse is that the Associated Press will become more important politically and socially than is good for any organization in the news business. The shafts of light will be fewer in the long winter for news ahead.

 

 

 

 

 

 

Crocodile Tears for Small Business

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There has been a death in my neighborhood. I speak of another independent, small business killed by an influx of chain retailers. In this case a grocery store, which opened its doors in 1875, has expired.

No more will I stop there to buy meat, talk to the butcher about the various merits of New Zealand and American lamb. No more will I ask the manager

to see if he can get yellow corn rather than the white corn favored in Northern Virginia.

One could shrug off another small business going to the wall as a sign of life in the age of chain retailing, if it were not for the relentless rhetoric from politicians about the need for and virtue of small business. John McCain lauds it. Barack Obama genuflects to it. And all 535 members of Congress get weepy about it.

Their argument for small business is that it creates jobs. To me, the job creation is a given. My argument is that entrepreneurism and small business define who we are as a nation and how satisfied millions of Americans are with their lives.

Yet small business is under relentless attack, mostly lacking the basic tools to defend itself. Credit is an important ingredient, but it can be overrated. Startup small businesses have never been able to look to banks for seed money. Banks do not do that kind of lending, which is why so many small businesses are started with credit cards, family loans, or out of the earnings of a working spouse.

In my mind, after credit, habitat is the great burden of small business. By habitat, I mean a place to work out of at a rent that is not exorbitant. If there is a new shopping center in your neighborhood, look and see if there is any new small business there. Probably not. It will be as bland and homogeneous as the last shopping center you visited. It will be as dead, as lifeless, as predictable, and as antithetical to small business as its developers could make it. All right, they let in a sandwich franchise. Those are not really small businesses: they are big businesses that have laid off their risk on the unsuspecting franchisee. Franchisees, in my experience, are the most unhappy and exploited people in business, the victims of a pernicious system of sharecropping.

If you want to feel the life and vitality of small business doing its thing, you must seek out the older strip malls–often awaiting demolition–or the crumbling warehouse district. The lucky new entrepreneur is the one who can operate from the kitchen table, the basement, or the garage.

The next great burden comes with the hiring of staff. It is the high cost of health insurance. This should not involve employers, but it does–and it involves the small as brutally as the large.

For 33 years I operated a small publishing company, which I founded. It was a success, but we were sorely tried by insurers who charged a lot and would not fill all of their obligations (a cancer patient had the care paid for, but not the pain killers.) Rents also escalated, based more on our ability to pay. I hope there is a special enclosure in hell for property company managers and health insurers.

Where then are the politicians, those who weep so copiously for small business? They are mostly between the sheets with big business facilitating the destruction of the small entrepreneur. Mom-and-pop operations do not have lobbyists, cannot afford white shoe law firms and do not run political action committees. The ability, upheld by the courts, of local authorities to use eminent domain to condemn areas of low economic activity in favor of new developments is an example of the war by the big against the small. It would be biblical, except in this case, David looses and Goliath triumphs.

The damage to who we are as a people is hard to calculate, but it is there. Who would rather not run their own restaurant than manage a chain outlet? Ditto a bookstore. Ditto a hardware store. Ditto an auto-repair shop. Ditto every line of endeavor from exporting to consulting. I have yet to meet one individual who preferred being employed in a behemoth to being self-employed.

For me, the latest outrage is learning that airlines are charging $25 for tickets bought through travel agents. The airlines, in good times and bad, have had it in for travel agents: the quintessential small business. Shed a tear for the travel agencies, along with every courageous individual who wants to have the real promise of the American Dream: a business of one’s own. With that comes a dignity, a sense of worth that is good both for the nation and the individual. And,yes, small businesses make life richer for the consumer while creating jobs.

Newt Gingrich And The End Of Ideology

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Newt Gingrich, a former speaker of the House and espouser of big ideas, has discovered two old political verities: our education system is broken and the nation’s infrastructure needs an overhaul. Both have been true for decades. They were true when Gingrich was forcing his tribal doctrines on Congress and when, later, he described George W. Bush as a “transformational” president.

 

For Gingrich, the trouble is he did nothing for education when he had power and he was opposed to funding infrastructural repair. While Gingrich was trumpeting Bush’s ability to change the nation, the president was bringing about change at home through neglect and change abroad through interventionist war.

 

Now, the price is to be paid–the astronomically high price. Get out your wallets, your children’s wallets and your grandchildren’s wallets.

 

Gingrich’s Republican Revolution is a tattered thing now. His “Contract with America” is never mentioned. His term limits idea is no more viable than Esperanto. The man who believes that private enterprise and the free market are the balm of hurt countries is observing the nationalization of a large chunk of the finance sector. It is hardly the kind of transformation Gingrich expected from the Bush administration.

 

Despite this litany of events that has turned Gingrich’s dreams to nightmares, we need thinkers more than ever. If Gingrich had been less wedded to the Republican orthodoxies (now crumbling) and given his ideas free rein, he might have had more enduring successes. Real ideas are more enduring than party fealty expressed though party-speak.

 

Whoever wins in November–now hard upon us–has to approach the business of government in the immediate future as a new paradigm: pragmatism first and ideology second.

 

The problem with ideology is that it inhibits ideas and produces rigidities that inhibit the natural immune systems of countries from functioning. If the Democrats had not been so ideologically wedded to the purposes of Fannie Mae and Freddie Mac, they would have sided with conservatives to control these monsters before things went hopelessly wrong. Likewise, if conservatives had not developed a pathological hatred of regulation (oversight, really), some alarms over the house of cards on Wall Street may have been noticed. As a prophylactic, regulation can only be measured in its absence. There are no bonuses for good regulation.

 

It is up to creative people, like Gingrich, to introduce House Republicans and the party’s base to this big idea: things have changed. All of those robust slogans of the 1990s are obsolete. So is the idea that good results in government will axiomatically flow from personal rectitude, including faith, family, patriotism, a love of small government, and a belief that our institutions of government are irresistible to the rest of the world.

 

In many ways, Republicans are better equipped to prepare themselves for the future than Democrats. Republicans do have leaders, like Gingrich and Rep. Roy Blunt, who are equipped to mold a new party philosophy. They also have a corps of literate thinkers on the op-ed pages, including George Will, David Brooks, Bill Kristol, Kathleen Parker and Charles Krauthammer.

 

These days the Democrats have no living heroes. The Clintons are contentious and Jimmy Carter is a liability. In both the House and the Senate

Democratic leadership is weak. Neither Nancy Pelosi nor Harry Reid can stir the emotions.

 

Most of the print liberals lag their conservative counterparts. Harold Meyerson is the most articulate; but outside of the liberal circle, he is unknown. Maureen Dowd writes well but is too shrill to be taken seriously. And Richard Cohen is read for pleasure, not ideology. Hence, the ridiculous expectations Democrats have for Rachel Maddow, the MSNBC talkmeistress.

 

But one commentator cannot turn back the dominance of broadcast commentary enjoyed by conservatives. Gingrich had a lot to do with that, too. He welcomed right-wing radio-talkers into Congress and gave them workspace.

 

They will not like what, I believe, they will hear from Newt and others next year. The page is turned.

 

 

 

 

 

 

When Peer Pressure Took the Hand of Greed

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I once asked the chairman of Wells Fargo how his bank had gotten sucked into dubious Third World loans. “Greed,” he responded. “Just greed.”

 

He might have added another motive: peer pressure. We think of peer pressure as the force that gets kids into trouble, but business is as subject to it as teenagers are.

 

When a lot of states deregulated their electric utilities in the 1990s, these formerly conservative companies went on an international binge. They started buying up utilities around the world with a passion—a passion often fed by the fear that they were being left out of the great global bonanza. Some believed that they would not be able to hold up their heads at the meetings of the Edison Electric Institute unless they could discuss their latest acquisition in a faraway land. From Brazil to Indonesia, American electric utilities were into globalizing and loving it.

 

Of course, most of these investments went sour. The expected profits were as often as not consumed by currency variations, confiscatory local taxes and dishonest politicians, who sought to extract bribes from the operators as soon as the ink was dry on the contracts. Many American executives did not know anything about local conditions. For example they were unaware that in much of Latin America, and parts of Asia, up to 50 percent of the electricity is stolen. Governments are powerless to stop the theft for fear of social upheaval.

 

Helping the electric utilities make their mistakes were the investment banks. Mergers and acquisitions, are the mother’s milk of investment banking. The banks often found the deals, researched them and took them to the American companies. Their reward: giant fees.

 

One of these investment houses was the now bankrupt Lehman Brothers. At the height of the madness, as the publisher of The Energy Daily, I was invited to give a lecture to Lehman clients. The audience was half Lehman executives and half newly-minted internationalists. I told them the truth about investing in other people’s infrastructure: It looks good on paper, but it does not work in practice because you will be resented as an absentee landlord. Populist politicians will run against you.

 

On the face of it, this was not what they wanted to hear. They wanted wilder music and stronger drink. One major utility executive who was also something of a king-maker in the Democratic Party told me I did not know what I was talking about. He was invested in Pakistan, and thought it was a great place to do business,

 

Yet privately, the Lehman executives were glad I had called for a reality check. One managing director told me: “We should take their passports away.”

 

As investment after investment went south, many of the utility travelers came to wish they had stayed at home. Lehman, other investment banks and their lawyers knew better, but those lovely fees were irresistible.

 

The utility madness was not earth-shaking, but it was symptomatic of how investment banks regarded money itself as the client not the fee-payers.

 

About this time the world became aware that an obscure and arcane branch of finance, derivatives, was growing and attracting not financiers, but mathematicians and physicists to slice and dice away from prying regulators, troublesome politicians and curious journalists. The linkage between collateral and loans was obscured. A change in the regulations in 2004 enabled investment banks to borrow or leverage their assets by 30-to-1 when it had been 12-to-1. No worries. The market would discipline itself, said the players.

 

Mortgages were the new financial manna. You could package them and sell them around the world. But Wall Street was not satisfied with the volume of mortgages being written in the old-fashioned way and thousands of mortgage brokers started loosening the criteria, until there was really no threshold for getting a mortgage.

 

Now the party is over and the administration of George W. Bush, a conservative, is nationalizing a large chunk of the financial markets. He is also tying the hands of the next president, and there is still no transparency. The only thing that is clear is that the taxpayer will pay.

Sarah Palin as Joan of Arc

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You see Sarah Palin, governor of Alaska; I see Joan of Arc, the peasant girl who vanquished the English in France and facilitated the crowning of Charles VII as King of France, thus ending English claims to the French throne.

Like Palin, Joan was an invigorator: She inspired the French to fight the English. When she failed to win over the generals and the nobles, she went over their heads to the people of France. Soon she had liberated Orleans, after a string of victories, and cleared the way for Charles’s investiture at Reims. Even before his ascent to the French throne, Charles had made the teenager co-commander of his army.

There is dispute over whether Joan actually fought or just carried the French standard in battle. No matter. She electrified the French. And although the 100 Years War dragged on for another generation, Joan had shaped the future of the French nation, giving it a sense of national identity that it had lacked:

She galvanized all levels of French society, revitalized a sick and cautious political establishment, and ignited the new feelings of nationalism in the French army and the peasantry. Essentially, what Palin has done so far for the Republicans.

Joan believed that she was the instrument of God; that she had heard voices from the age of 12, urging her to expel the English from France. Unfortunately, the voices were to be her death knell. She was captured by the English, who handed her over to the Ecclesiastical Court in Rouen, which tried her for heresy. She was convicted and burned at the stake. She was just 19, but she had changed the course of European history.

Later, the Roman Catholic Church decided that it had made a terrible mistake and denounced the trial, finding her innocent after the fact. But Joan was not canonized for another 500 years.

Look at Palin and see the “Maid of Orleans”: She has fought the Republican establishment and energized the rank and file of the party. And that is probably where the similarity ends, although she seems to be quite certain about God’s purposes.

The speculation in Washington is: When will the Palin bubble burst? So far, she has been repeating the same speech on the stump and has only granted one television interview.

The strategy of keeping Palin from the public is beginning to wear thin. And even John McCain himself seems to be hankering for the recognition that he is the nominee for the presidency not the trophy vice presidential candidate from Alaska.

Yet for McCain, it is also all about Palin. If he wins the presidency, she will be credited with attracting women and blue-collar voters to the Republican standard. If she falls apart in the next month, through a combination of hubris and ignorance, she will take down the McCain candidacy.

Also, the speculation in Washington is that Barack Obama’s forces are retooling for an assault to coincide with the one and only vice presidential debate. It is a debate fraught for both the Democratic vice presidential nominee, Joe Biden, and for Palin.

Biden is given to talking too much and he knows too much, which is sometimes a disadvantage. He will be struggling to appear neither avuncular nor condescending. Palin needs to memorize talking points on every issue and stick to them. This is a dangerous tactic, but it is her best option. And it more or less worked in her interview with Charles Gibson of ABC.

Henry “Scoop” Jackson, the late senator from Washington state, who I interviewed on many occasions, answered the question he thought you should ask not the one you asked. He did this especially on television, as I found out when I was part of a panel on NBC’s “Meet the Press.”

Palin’s strategists will probably also try to give her a disarming one-liner that she can repeat frequently, which George W. Bush did with “fuzzy math” in debating Al Gore. People tend to remember the one-liner and forget the rest of the question.

Although Charles ennobled St. Joan and her family, he resented the fact that she had done what he had failed to do against the English aggressor. History may be repeating itself with John McCain.