Archive for November, 2008

How Will History Judge Bush?

A few months ago, a friend started a conversation with the words, “now that George Bush is generally agreed to be the worst president in history…”

I have no idea what she said after that, as my mind was reeling. I silently edited the statement: “Among partisan Democrats who ignore Warren Harding, George W. Bush is generally agreed to be the worst president in history.”

But my friend can point to academic support for her claim, because even some historians, who should know better, have been eager to label George W. Bush the “worst president in history.” They would do well to let some history occur before they presume to speak for the ages, and to remember how Ronald Reagan evolved in a few short years from the bumbler of the Iran-Contra scandal into the hero who won the Cold War.

At Pajamas Media, Ron Radosh discusses an academic who is grappling with the issue of Bush’s legacy:

As Professor Moen points out, Bush’s “ability to actually stay convinced that Iraq had to be won, when nobody else in the world agreed with him…is an aspect of his strong leadership that people will respect more over time.” One can argue that when Bush leaves office, Iraq will be on the way to forging an actual democracy; the war will have been effectively over and Al-Qaeda will have been defeated.

This is not to say that critics are incorrect when they attack the serious mishandling of Iraq after Saddam’s ouster. No one can justify Abu Ghraib, the excesses in interrogation techniques and the sanction of actual torture, or the problems at Guantanamo. Nor can one fail to be critical of the President’s inability to explain to the American public why Iraq had to be won and why they should support Operation Iraqi Freedom.

Future generations will have to assess the final outcome. If Iraq does emerge as a democracy in the Middle East, joining Israel as a state pledged to democracy in a sea of tyrannies, then future historians will see the President in a more favorable light than their contemporaries seem to do today. Whatever their conclusions turn out to be, I have one prediction: Bush’s position in the rankings of American Presidents will have risen close to the center. Check back with me in a decade.

I think it may take longer than a decade, and in any event it will depend on the future course of Iraq and the Middle East. Today, after mismanaging the war for years, Bush can point to a tenuous, fledgling democracy in Iraq. Twenty or forty years from now, if things go well, he may — may — get credit for creating the first stable democracy in the heart of the Arab Middle East. And if Iraq becomes a beacon of hope in the neighborhood, the missteps in the early years of the war will become a mere footnote in the history books.

Reasons for Republicans to be Thankful

Jennifer Rubin offers some Thanksgiving cheer at Pajamas Media. I don’t agree with every word of her post, but I love these parts:

First, President-elect Barack Obama won by assuring voters he would pursue tax cuts, victory in Afghanistan, prevent Iran from acquiring nuclear weapons, and go “line by line” through the federal budget to eliminate waste and unneeded programs. We can doubt his sincerity or ability to achieve these ends, but he won by recognizing and espousing center-right principles. If he pursues some or all of them, the country will be the better for it. If he doesn’t, he is unlikely to succeed or maintain the broad-based popularity needed to keep Democrats in power.

Second, Hillary Clinton, James L. Jones, and Robert Gates are on tap to fill key national security roles. This is not the crew to bug out of Iraq before the job is done, repeal FISA, rush off to meet with Ahmadinejad, or support a 25% cut in defense spending. On national security, the president-elect in essence has conceded that the Left’s vision is impractical and dangerous. …

Ninth, President George W. Bush and General David Petraeus persevered against tremendous odds and have placed us on the verge of one of the great military turnarounds in our history. We can disagree about the wisdom of the decision to go to war in Iraq, but a victory with a stable Iraq allied with the U.S. and a humiliated al-Qaeda is now within our grasp. By avoiding defeat and empowering an Arab nation to take up arms and defeat Islamic terrorists, Bush and Petraeus furthered the security of the U.S., the region, and our allies around the world.

Rubin’s post is headlined “Ten Reasons for Conservatives to be Thankful.” I substituted “Republicans” in my headline because after describing myself as a liberal for most of my life, I can’t quite get my brain wrapped around the idea that I’m a conservative. I’m certainly right-of-center on economic and national security issues, but I’m pro-choice and I favor marriage equality for same-sex couples. I guess that makes me a libertarian… except hard-core libertarians tend to oppose the Iraq war, which I strongly support.

Also, once you get too far out on the libertarian spectrum you’ve got anarchy. This 64-question libertarian purity test gives you extra purity points for a desire to abolish government, privatize roads, police forces, etc. I’m a big fan of capitalism and market-based incentives, but I think we need some government.

Here’s a much shorter quiz (10 questions) to help locate your political identity. Here’s the result I got:


Bullseye. Happy Thanksgiving.

Mr. Obama: Declare War on Rube Goldberg

In today’s Wall Street Journal, Holman Jenkins identifies the key culprit in the current economic woes. It’s not Hank Paulson or Hank Greenberg or Stan O’Neal or even George Bush. The most formidable enemy of the American economy is Rube Goldberg.

Jenkins starts by discussing the complex set of rules that have enabled autoworkers to win the contracts that have crippled the American auto industry:

… the single biggest factor in preserving the UAW’s monopolistic power has not been labor law but Congress’s fuel-economy rules. These effectively have required the Big Three to lose tens of billions making small cars at a loss in UAW factories. Not only were the companies obliged to forgo profits they might have earned importing such cars, but CAFE deprived them of crucial leverage to control labor costs by threatening to move jobs to a factory in Spain or Taiwan or Poland.

The CAFE standards — a Rube Goldberg system known formally as Corporate Average Fuel Economy standards — distort the automobile marketplace while dismally failing at their fundamental reason for existence, which is to reduce carbon emissions. Jenkins then ties the proposed auto bailout to the financial meltdown and other issues (emphasis added):

A whole lot of Rube Goldbergism is coming home to roost, in the auto business, in the mortgage market, in the health-care market, in farm policy. We need to simple-down. The economy has a giant adjustment ahead, paying off debts, going from a heavy absorber of foreign capital and goods to a rebalanced relationship with the world.

The good news is that we have a natively resilient, flexible economy capable of making these adjustments — unless bound up in Rube Goldbergian mandates. Barack Obama, bless his heart, may or may not be ready for what’s coming his way. Yet his objectives are perfectly amenable to the simple-down approach.

He asked on Monday for Detroit to deliver a “plan” somehow to reconcile, at long last, the fantasy life of Washington, with nobody losing a job, with super energy-efficient cars, and yet somehow all this being done at a profit to Detroit.

Here’s a plan, but it requires Mr. Obama to play a role too, finally relinquishing such chronic free-lunchism where autos are concerned. He should simply get rid of the CAFE rules and impose a gasoline tax to move the country to a “new energy economy,” if he really believes in panicky climate predictions and/or that “energy independence” would be a net improver of American welfare. And be prepared for Detroit to shift jobs offshore if the UAW won’t concede competitive labor agreements.

Economist Greg Mankiw has been a champion of a gasoline tax for years, periodically welcoming new members in the Pigou Club, a collection of economists and pundits who favor Pigouvian taxes, which Wikipedia describes as “a tax levied to correct the negative externalities of a market activity.” Mankiw does a thorough job of advocating for a gas tax in his Pigou Club Manifesto. Here’s my shorthand version: Raising the gas tax substantially would automagically lead to more fuel-efficient cars, and the tax revenues raised could be used for good purposes such as reducing other taxes and remediating carbon emissions.

Having already established my credentials to offer “improvements” to Mankiw’s ideas, I want to point out that his specific proposal, which seemed bold when he unveiled it two years ago, now looks quaint:

I would like to see Congress increase the gas tax by $1 per gallon, phased in gradually by 10 cents per year over the next decade.

After watching gas prices go from $2 to $4 and back to $2 in a matter of months, it now seems clear that a series of annual 10-cent increases would go virtually unnoticed, thereby reducing the desired effect. But that’s a quibble — maybe it should be 50 cents annually for four years, or whatever.

Today’s WSJ also has a tantalizing hint that Mr. Obama might be amenable to taking on Rube Goldberg:

As part of his plan to kill government programs “that have outlived their usefulness,” the President-elect singled out farm subsidies for the rich. If he really means it, this would be big news.

Indeed it would — especially if it were a first step toward eliminating the Goldbergian farm subsidies altogether, along with the negative externalities they entail.

The Perils of Blogging


Like many (most?) bloggers, I crave a bigger audience, and I thought I had found a gambit that might tempt James Taranto to link to me from his “Best of the Web Today.” Yesterday’s BotWT included one of his “Wannabe Pundit” items, quoting a journalist taking a pot shot at the Bush Administration in the context of a non-political article. Here’s the quote, which was from an article about buying Oriental rugs:

“Hizballah has re-armed, Israel could attack Lebanon again at any time, Iran is probably building nuclear weapons, the surge in Iraq is a mirage, and America is falling apart,” reports Time magazine’s Andrew Lee Butters.That’s the bad news. The good news is, you now know how to buy an Oriental rug.

Wait a minute — “the surge in Iraq is a mirage”? In September, even Candidate Obama was forced to admit that the “surge has succeeded beyond our wildest dreams”! My outrage gets my creative juices flowing — I’ll do a chart!! I’ll show how U.S. casualties have declined over the duration of the surge, and I’ll add famous surge quotations!!! It’ll graphically illustrate what a nonsensical statement Butter made!!!! How could he even write such a thing, more than two months after Obama said the surge succeeded?

Well, he didn’t. I discovered this when I was putting the finishing touches on my chart. I just needed the original date of the Butters quote… oops. It was in BotWT yesterday, but apparently the normally careful Taranto didn’t notice that the quote on Time’s website was dated April 18, 2008.

Anyway, there’s the chart. (What, I’m not gonna post it after I go to all that trouble?)

Update — I sent the item to James Taranto anyway, and here is his response:

Sorry about that. I don’t normally use such old items, and indeed I didn’t notice how old it was. However, since I wasn’t making fun of him specifically for the surge quote, I didn’t make an actual error and thus will not run a correction. Feel free to note on your blog that I acknowledge your point, however.

Fair enough — even if the statement were accurate or defensible, it would still qualify as a Wannabe Pundit on the basis of irrelevance to the rest of the article.

Many, many people spent a busy weekend hammering out the details of the government rescue of Citigroup that was announced last night. The rescue clearly is a Portentous Event, so I went searching this morning for insights about what the portents are portending.

I got as far as the third paragraph of the Wall Street Journal story, where it says Citigroup is “in 106 countries.”

“Oh yeah?” I thought. “Name them.”

Several years ago, around 2001, I was, briefly, among the world’s foremost experts on How Many Countries Citigroup Is In. I was part of the company’s employee communications team at the time, and someone higher on the food chain had gotten impatient with seeing vague references to Citigroup as being in “more than 100 countries” (which is how other news organizations are describing Citi today). I was tasked to track down the precise, official number of how many countries Citigroup is “in.”

Oh my goodness.

Let’s start with public sources. As of today (the numbers back then were probably slightly different), Citigroup.com lists precisely 100 countries. The 2007 Annual Report lists 97. Hmm…

OK, let’s look at internal websites. I’m no longer an employee, so I can’t view these sites now, let alone post links. But suffice it to say there were conflicting numbers and lists of countries on various intranet sites. The most popular numbers were something like 101 and 103.

I reported back to my betters that there appeared to be a good reason to cite “more than 100″ countries. Now, if you’ve ever been a corporate gumby in a huge organization, you know how that was received: not good enough. “It’s a simple question, you ought to be able to track down a simple answer.”

There were at least two different keepers of what was described as the “official” number. I think one was the Corporate Secretary’s office (since they had to know where the company was incorporated), and the other was the global real estate department. So I got the two lists and compared them, expecting to find two additional countries on the larger list. Well, no… each list had a handful of countries not on the other list. I don’t remember which countries were on the bubble, but I came up with half a dozen questionable countries, and started trying to verify them one by one. It turns out that whether or not Citigroup is “in” a particular country is sometimes a matter of opinion.

Do you go by whether we have a subsidiary incorporated there, or whether there is a physical office vs. a mail drop, or whether we have employees domiciled there full-time? What if there are no longer any employees, but we’re still incorporated there? Does a joint venture count? When I talked to the various regional headquarters offices, sometimes they were unwilling to talk about whether we were actually “in” such and such a country, because of local political considerations. There were differences of opinion about when or whether the Country X office had closed.

Also, how do you define a “country”? Each list broke out Puerto Rico, for example, as a separate country. There is a logic to that, even though Puerto Rico is part of the United States, because there are important jurisdictional differences that affect companies doing business in Puerto Rico. Also, if you toss out Puerto Rico, Guam, US Virgin Islands, Macao, Hong Kong, Isle of Man and Jersey, all of a sudden you may no longer be able to say “more than 100 countries.” Heaven forfend.

Eventually, to get the poobahs off my back, I abandoned the search for Truth, picked one of the “official” numbers, and prepared to start defending it. I envisioned saying to anyone who challenged my number, “oh yeah? Here’s my list, let’s see your list. What’s that? You don’t even HAVE a list?” But I left the company before I had an actual opportunity to have that conversation.

The moral of the story: If you know how many countries your company is in, you’re not truly a global company.

All you gumbies and ex-gumbies out there — what’s the stupidest thing you’ve ever spent far too much time tracking down in corporate America?

Quote of the Day

The internets are a-twitter with news that the Detroit automakers flew on private corporate jets to argue for bailouts in front of Congressional committees in Washington.

“There’s a delicious irony in seeing private luxury jets flying into Washington, D.C., and people coming off of them with tin cups in their hands,” Rep. Gary L. Ackerman (D-N.Y.) advised the pampered executives at a hearing yesterday. “It’s almost like seeing a guy show up at the soup kitchen in high-hat and tuxedo. . . . I mean, couldn’t you all have downgraded to first class or jet-pooled or something to get here?”

Former presidential hopeful Mitt Romney has an op-ed in today’s New York Times titled “Let Detroit Go Bankrupt.” His prescription for saving American automakers through Chapter 11 begins with these two steps:

First, their huge disadvantage in costs relative to foreign brands must be eliminated. That means new labor agreements to align pay and benefits to match those of workers at competitors like BMW, Honda, Nissan and Toyota. Furthermore, retiree benefits must be reduced so that the total burden per auto for domestic makers is not higher than that of foreign producers.

That extra burden is estimated to be more than $2,000 per car.

So far so good — overly generous union agreements are widely agreed to be at the heart of the problem, and bankruptcy would provide a mechanism for overturning those agreements.

Second, management as is must go. New faces should be recruited from unrelated industries — from companies widely respected for excellence in marketing, innovation, creativity and labor relations.

I’m still with him — I don’t know whether the current auto executives have been incompetent or, more generously, have simply been unable to play the very bad hand they were dealt. But in any event, wrenching corporate change requires new corporate leadership, almost by definition.

The new management must work with labor leaders to see that the enmity between labor and management comes to an end.

Oops. Is it just me, or does anyone else see a bit of tension between new cram-down contracts in Step One and improved labor relations in Step Two?

Step One is clearly essential. I wouldn’t pin a whole lot of hopes on Step Two.

Bankruptcy is the Right Medicine for Automakers

Look at the bright side – GM stock
only has $3 farther to fall. (From Yahoo Finance)

The more I read and think about a potential further bailout of the auto industry, the nuttier the idea sounds.

Michael E. Levine is a former airline executive, so he knows about bankruptcy. He puts it this way in today’s Wall Street Journal:

General Motors is a once-great company caught in a web of relationships designed for another era. It should not be fed while still caught, because that will leave it trapped until we get tired of feeding it. Then it will die. The only possibility of saving it is to take the risk of cutting it free. In other words, GM should be allowed to go bankrupt.

Even one of the auto industry’s hometown papers, the Detroit News, said in an editorial Friday that bankruptcy might be preferable to the appointment of an automotive “czar,” an idea that has been floated by the Obama transition team.

It’s also been suggested that the government will take an equity stake in the companies and demand seats on their boards. That would almost certainly restrict the ability of the automakers to shut plants and lay off workers.

For all practical purposes, these moves would nationalize the auto industry and make its return to profitable, independent operation even more of a long shot. Presumably, an automotive “czar” could manage all of this meddling.

If that’s the case, Detroit’s automakers might want to rethink whether it’s safer for them to be in the bankruptcy courts than beneath the oppressive wing of a federal overseer.

Bankruptcy doesn’t mean GM goes out of business, and it certainly doesn’t mean the entire American car industry goes out of business. Bankruptcy protection would allow GM to reorganize, shrink substantially, and renegotiate its ruinous contracts with unions and dealers.

Levine describes the problem:

Foreign-owned manufacturers who build cars with American workers pay wages similar to GM’s. But their expenses for benefits are a fraction of GM’s. GM is contractually required to support thousands of workers in the UAW’s “Jobs Bank” program, which guarantees nearly full wages and benefits for workers who lose their jobs due to automation or plant closure. It supports more retirees than current workers. It owns or leases enormous amounts of property for facilities it’s not using and probably will never use again, and is obliged to support revenue bonds for municipalities that issued them to build these facilities. It has other contractual obligations such as health coverage for union retirees. All of these commitments drain its cash every month. Moreover, GM supports myriad suppliers and supports a huge infrastructure of firms and localities that depend on it. Many of them have contractual claims; they all have moral claims. They all want GM to be more or less what it is.

But GM can’t continue to be what it is. The beauty of the bankruptcy system is that it would give GM leverage to pursue cost-cutting more aggressively than would otherwise be possible. The longer that corrective action is delayed, the more traumatic the eventual restructuring will be.

Yes, there’s a perception issue involved in bailing out the “Wall Street fat cats” while refusing to help manufacturing industries and their blue-collar workers. That’s why it’s a bad idea for government to get involved in picking winners and losers in the first place. But the financial industry is special a special case, because of its critical role in making the entire economy function. The purpose of the rescue plan was not to bail out financial firms, but to unfreeze the credit markets, the lifeblood of the entire economy. Any proposed bailouts of other industries have to be held to a much higher standard

Yesterday, Barack Obama used YouTube to deliver the Democrats’ response to President Bush’s weekly radio address. Obama, who took full advantage of the power of the internet in his successful campaign, plans as President to transplant the weekly radio message onto YouTube.

Today comes the revelation in the NYT that Obama, who like many hard-charging professionals of a certain age is addicted to his BlackBerry, probably will have to give it up as President, because of security concerns and the strictures of the Presidential Records Act.

It’s even worse than that, however — by focusing on the BlackBerry, the Times actually buries the lead. It looks like Obama will have to give up email altogether:

In the closing stages of the campaign, as exhaustion set in and the workload increased, aides said Mr. Obama spent more time reading than responding to messages. As his team prepares a final judgment on whether he can keep using e-mail, perhaps even in a read-only fashion, several authorities in presidential communication said they believed it was highly unlikely that he would be able to do so.

Diana Owen, who leads the American Studies program at Georgetown University, said presidents were not advised to use e-mail because of security risks and fear that messages could be intercepted.

Talk about a life-changing experience. Here’s the video:

He looks a bit stiff, especially at the beginning. The President’s weekly address to the nation is always a tightly scripted thing, and generally not terribly interesting. It will be more personal on streaming video, even though he’s reading off a teleprompter.

Bailouts: Further Down the Slippery Slope

David Brooks makes the case against an auto industry bailout more eloquently than I did:

A Detroit bailout would set a precedent for every single politically connected corporation in America. There already is a long line of lobbyists bidding for federal money. If Detroit gets money, then everyone would have a case. After all, are the employees of Circuit City or the newspaper industry inferior to the employees of Chrysler?

But the larger principle is over the nature of America’s political system. Is this country going to slide into progressive corporatism, a merger of corporate and federal power that will inevitably stifle competition, empower corporate and federal bureaucrats and protect entrenched interests? Or is the U.S. going to stick with its historic model: Helping workers weather the storms of a dynamic economy, but preserving the dynamism that is the core of the country’s success.

Now the states are getting into the act in seeking a federal bailout:

The idea is getting a strong bipartisan push from governors across the country, with California Republican Gov. Arnold Schwarzenegger and New York Democratic Gov. David Paterson among the chief proponents. Both are blaming Washington for their states’ mounting troubles. …

California Assembly Speaker Karen Bass said Congress should view states “as deserving of help as much as banks and automakers and everyone else in line for funds.” If Congress can give $700 billion to financial institutions, she asked: “Can we have $5 (billion) or $6 (billion)?”

Never mind $5 billion — a mere $5 million would have a profoundly positive effect on another deserving recipient. What I envision here is not exactly a bailout, but rather an innovative “pay-for-work” program…

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