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Saturday, April 30, 2011

Revisiting the deficit

With the deficit more in the news than ever, it seems to me appropriate to revisit a post last October on the subject of where it came from and how it might be dealt with. There isn't too much new data available since then, but the political climate has of course changed enormously, and lots of new proposals are on the table. Sadly, very few of them have much to do with the underlying facts. The issue is on my mind because I took a question about it after a lecture yesterday, and having reviewed the data, I would have to revise my answer somewhat, although not fundamentally.

It is something of a shock to discover, first of all, that the budget situation improved significantly in the fiscal year that ended last September 30. The deficit, which had been projected once again to exceed 10% of GDP, fell by an entire percentage point of GDP in comparison to fiscal 2009, from 10.0% to 8.9%. The improvement reflected a fall in outlays owing to the collection of substantial TARP repayments and much lower payments to Fannie Mae and Freddie Mac, while revenues remained stable. Revenues will be worse this year, however, because of the 2% cut in Social Security payroll taxes put through by the Obama Administration last December.

Just ten years ago, in fiscal 2000--the last year fully within the Clinton Administration--we had a surplus of 2.4% of GDP. This still ranks as a financial revolution comparable to what happened from 1933 to 1950, or from 1979 to 1991 or so, and given how heated issues of government finance have become, it behooves us to ask how all this happened. Unfortunately, since I can't find more disaggregated data for the last complete fiscal year, I will have to use the data I used last October, which reflected a deficit for fiscal 2010 that was a full percentage point higher.

Budgets, of course, are composed of revenues (mostly taxes) and expenditures. Let us begin with taxes. In fiscal 2000, federal taxes brought in 20.6 % of GDP, including 10.2% of GDP from federal personal income taxes, 2.1% from corporate income taxes, and 6.6% from Social Security taxes. This year they are estimated to bring in 14.8% of our GDP, that is, almost 6% less. Judging from figures from the last pre-recession year of fiscal 2007, about half of that 6% is due to the Bush tax cuts and the other half is a result of our economic collapse. The composition of that 14.8% has also changed dramatically: only 6.4% of it comes from personal income taxes, 1.1% from corporate, and 6.0% from Social Security taxes. In 2000 the progressive income tax brought in about 66% more than the regressive social security tax. Now they bring in nearly the same amount of money. In short, restoring the Clinton-era level of taxation would significantly reduce the deficit, in and of itself. Howard Dean is the only political figure I have heard suggesting going back to the Clinton tax rates as a solution for everyone, however.

While taxes have gone down, outlays have gone up--way up. Federal spending was 18.2% of GDP in 2000; it is 25.4% of GDP now. We can disaggregate this 33% increase in the budget as a share of GDP. The defense budget took up 2% of GDP in 2000; it now takes up 4%, or twice as much. Most of the increase can be chalked up to the occupations of Iraq and Afghanistan, undertakings of most dubious utility. Spending on human resources has gone up more, from 11.4% of GDP to 17.1%, a 6.7% increase. Within that 6.7%, medicare, other health spending and social security have each added about 1% of GDP to the total, and "income security" payments have added 2% more. Those refer apparently to Supplemental Security Income, a little known program that pays disabled and poor elderly Americans from general revenues. The remaining 1% or so of the increase is divided among veterans' benefits and education.

One astonishing item caught my eye--one that certainly needs more explanation. Thanks to George W. Bush's impact on the budget, the national debt is more than twice what is was in 2000--yet interest payments are actually down as a share of GDP, down an entire point from 2.3% to 1.3%. Thanks to the growth of our economy and above all, I would guess, to the lowest interest rates in history over the last decade, we hardly pay more to service our debt now than we did ten years ago.

The source of our deficit, then, is pretty clear. About 1/4 of it is the responsibility of the Bush tax cuts and the recession, and another 1/6 is the fault of the Afghanistan and Iraq War. Yet another 1/6 comes from rising health care costs, and another 1/4 from increased social security payments and other government income maintenance. TARP initially helped balloon the deficit but TARP is now going to show a profit. And what about the notorious Obama stimulus? As of March 30, 2011, that program had included about $260 billion in tax relief--we have already accounted for that money--and $374 billion in spending over two years. The $187 billion annual spending per year amounts to about 1.2% of GDP, or about 1/8 of the total deficit.

What is to be done? We should stop talking about eliminating the deficit. Cutting it in half, to 4.5% of GDP, would bring it to roughly the normal level under recent Republican administrations, even in good times. A convenient table making this point is here. The easiest way to cut expenditures is to bring the troops home from Iraq and Afghanistan and put other limits on the growth of defense spending, which no one is talking about very much now. We must do something about health care costs, which the Obama Administration made a weak and probably unsuccessful attempt to do, and we have to change the formula for social security benefits to bring their increases in line with increased revenues. But above all, we have to raise taxes--not only by returning to the Clinton-era rates, but by raising the cap on taxable income for Social Security over the current $100,000 or so.

Indeed, the table I linked reveals a profound mystery. The recession has had a much worse effect on federal tax revenues than it has on GDP. GDP in constant dollars is now equal to what it was in 2007, but federal taxes are taking only 15% of it instead of 18% of it. Why is this? Is it because incomes are increasing at the high end of the scale, and those increases aren't being reflected in federal tax revenues? This is a mystery we need economists to answer.

The Ryan budget would make the deficit worse and take away the safety net for the elderly in another ten years. The good news is that, like Newt Gingrich's Medicare cuts in 1995-6, it seems likely to burst the Tea Party's political bubble and give the political edge to the Administration. But the Administration has also failed to make any serious proposal to deal with a very real fiscal crisis. The White House seems terrified of conforming to Republican stereotypes of Democrats as soft on defense and strong on taxes--even though right now, the country needs a smaller defense budget and, yes, higher taxes.

Saturday, April 23, 2011

Collapsing authority

I learned long ago that comparison is the best basis for judgements about people, societies, and historical periods. The human race has been measuring itself against ideals at least since Plato, but such measurements are actually quite arbitrary since they take no account of what is possible in real life and what is not. On the other hand, if, confronted with 100 adults, one notes four of them standing higher than the others, one can safely identify them as "tall." A batting average of .350 is outstanding because so few hitters manage to achieve it. Economic growth, unemployment, and even justice can all measure the same way.

And thus, I decided long ago, comparative history is by far the best way to make judgments about societies. One may compare in two dimensions, across space or across time. In Politics and War I did both. Now comparisons are on my mind because I am buried deeply in the early 1940s and, to a lesser extent, in the decades that proceeded them--and certain things are becoming increasingly clear to me. The United States and much of the world are suffering from a terrible crisis of authority, both because of an increasing emphasis on individual self-expression, and because the intellectual basis of authority has been destroyed. And that, I am convinced, is why we are proving largely unable to deal with the fourth great crisis in our national life.

The first half of the twentieth century, turbulent though it was, remains the great age of rationalism in American politics. Two centuries of the Enlightenment had convinced mankind that the application of science and reason could improve their lot. Americans believed in their democracy as a product of this ethos, and beginning around 1900, they began to accept the idea that reason and science could solve social problems as well. They did not, of course, go so far as Soviet Communists or German National Socialists, who claimed to use science and reason totally to transform society, economy, the gene pool, and human nature itself, but they believed in planning. Franklin Roosevelt, himself a farmer, first became interested in agricultural planning designed to match crops with the most suitable soil. Then he adopted the cause of public power, the planned development of energy resources (mainly hydroelectric power) so as to provide this new necessity at reasonable prices. And then, after the Depression struck, he adopted the idea that the nation needed economic planning to assure an essential level of prosperity. As I am discovering, his response to the Second World War also drew on careful calculations, and by 1943 his Administration was busily planning the postwar world that was to follow, including the United Nations, the International Monetary Fund, and the General Agreement on Tariffs and Trade.

Today the idea that reason and science can improve our lives survives, in a much less inspiring form, in graduate institutions like the John F. Kennedy School of Government, which do indeed provide a good deal of the personnel in Democratic institutions. But it is being increasingly driven out of our political life--and for this, there are at least three major reasons.

The first (not necessarily in order of importance) is the renaissance and triumph of free-market economics not only in the business and financial communities, but in the Academy. As a college student in the mid-1960s I learned that the government's role was necessary to keep employment high and prices stable. For several decades now students have learned that government intervention does nothing but harm and markets regulate themselves. We now have all the evidence we need to disprove this, but it looks to me as if the economics profession has recovered from a momentary panic in 2008-9. The idea that government does nothing but economic harm by spending too much money is increasingly the conventional wisdom, and the Republicans are scoring extraordinary successes (the scope of which will only become apparent in the next couple of years) in eliminating much of the domestic role the federal government, using the fiscal crisis as an excuse.

The second is the destruction of the rationalist ideal in the humanities. English and history departments no longer acknowledge the existence of objective reality. Language, many professors will now tell you, cannot mirror objective reality, only the feelings and interests of individual speakers, or of their gender, race, or class. In short, they have destroyed the Tower of Babel that had been built up over the past two centuries, enabling us to use a common language to speak of the common good. I don't suppose many professors who have embraced the new orthodoxy read this blog, but I can imagine them right now arguing that the rationalism which I revere simply enforced the interests of white males. But it didn't. The abolition of slavery and the advent of women's suffrage were both supported on rationalist grounds. Indeed, it was the use of language that did not acknowledge class, race or gender in the U.S. Constitution that allowed the excluded to claim their rights.

Thus, conservatives, relying on the ideal of the free market, argue that any "common good" can only come from the relentless pursuit of individual, private goods, while academic liberals argue that the very idea of the common good is an illusion. It's no wonder under the circumstances that we now accept 9.5% unemployment, almost unprecedented inequality of wealth, and the relentless movement of jobs overseas as normal. What basis is left on which to criticize these decisions? And now the control of American institutions is passing into the hands of Generation X, which with rare exceptions has never had any faith in institutions, since they grew up in an era of failing institutions, especially, in many cases, the institution most important to them, their families.

It is a great irony that participation at the highest levels of our society has been opened up to women, minorities, and gays during the same period in which the idea of "common good" has gone into eclipse. And while these changes certainly mean greater justice for minority individuals, there is not much evidence that they mean more justice for all. Last week I watched a Frontline documentary, now almost a year old, Obama's Deal, the passage of the health care bill. I learned a great deal, and I was introduced to Janet Ignagny, a Boomer who surely must be one of the ten most powerful women in America. I had not yet heard of her and I doubt many of you had either, but she is the President of the trade association of American health insurance companies, and she played a key role in the design of the health care bill, insisting that it had to include a mandate that would force every American to buy health insurance. (Candidate Barack Obama had opposed such a measure, and it is that measure that may result in the bill being declared unconstitutional by the Supreme Court.) She essentially sold the support of the industry in exchange for various safeguards for its interests--just as anyone in her position, man or woman, black or white, gay or straight, would have done. Women frequently argued in the 1970s that the ascendance of women to leading positions would humanize our institutions and make them run according to different, more feminine values. The evidence is now overwhelming that that will not happen. Three or our last four Secretaries of State have been women, but none of them has demonstrated any inclinations towards pacifism--Colin Powell, indeed, was more restrained in his attitude towards force than any of them.

We must take our history as it comes. To one brought up on progress in the 1950s and early 1960s the last 45 years have been a great disappointment, but they obviously represented a necessary stage. Eventually the problems of the free market will demand another serious attack. Eventually rewards in our society will be sufficiently widely distributed among genders and races so that we can once again focus on peoples' performance in office, rather than their genitalia or skin color. I hope I can be around at least to see the beginning of these changes.

Saturday, April 16, 2011

How laws are passed

Late in my elementary school career, I remember, we had what amounted to a civics textbook. It included a complicated diagram describing how the U.S. Congress passed laws. First they were introduced in one chamber, let us say the House of Representatives. They were referred to a committee for hearings, and the committee called witnesses, questioned them, and wrote a report. The bill went to the floor for passage (I don't think the textbook mentioned the then-crucial role of the House Rules Committee), and if it passed, it went over to the Senate. Hearings took place there, too, and after another report, the bill reached the floor for debate, possible amendment, and passage. If the two versions now differed, the leaders of the two chambers appointed a conference committee to work the differences out--and if all went well, the bill then passed.

That system operated during the greatest era of American legislative history, from 1933 to sometime in the 1970s. I saw it in action in the summer of 1963 when I worked on Capitol Hill myself. That was a momentous year in American history, and I (and many other Senators) spent many hours in two hearings in particular. While the Senate Commerce Committee considered the public accomodations portion of the Civil Rights Bill, I saw testimony from George Wallace, from the commissioners of the major American sports leagues, from Mayor Ivan Allen of Atlanta (who, in an act of supreme political courage, supported the bill), and from an unreconstructed bigot invited to testify by Strom Thurmond who quoted data on the brain weights of various races. (Even Strom realized he had gone to far that time.) Later I heard testimony on the Test Ban Treaty, including opposition from the father of the H-Bomb, Edward Teller.

Times have changed.

Less than two weeks ago, Representative Paul Ryan, the new Republican star, introduced his plan to cut, in theory, $4 trillion from the federal budget over the next decade. (That is not, by the way, nearly as much as it sounds--$400 billion a year just happens to equal the permanent deficit that George W. Bush created with a combination of tax cuts and wars.) His plan, as everyone knows by now, would turn Medicaid into a block grant to the states and make Medicare a subsidy allowing seniors to buy private insurance plans. That last provision is so outrageously bad for America that it is hard to believe it was ever adopted. Medicare's administrative costs are notoriously much lower than those of private insurance. Nor does Medicare pay its executives multi-million dollar salaries or its shareholders handsome dividends. There is no way that private insurance is going to deliver care more cheaply than Medicare does. Ryan, of course, claimed that "competition" would lower costs, but he didn't mention that the health care industry is already exempt, disgracefully, from the antitrust laws. Ryan claims to be a devotee of the free market--perhaps he should try reading Adam Smith. "People of the same trade seldom meet together, even for merriment and diversion," Smith wrote more than two hundred years ago, "but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices." The Ryan budget would not just extend the Bush tax cuts: it would cut the top marginal rate further, down to 25%.

Yesterday, just ten days after Ryan unveiled the plan, the Republican House passed it unamended. There were no hearings, no expert testimony, and virtually no debate over an attempt to undo about 80 years of American public policy. The Tea Party Republicans are acting with the fervor of the French Jacobins in the Convention (1792-94). The Republicans in Congress now consist of those who belong to the Tea Party and those terrified of primary defeat by some one who does. They have no time for discussion, for evidence, or for rational thought. They have rammed the legislation through.

Of course, it is not going to pass--although the possibility of the Republicans securing full control of the government in less than two years cannot be ruled out. But they don't care about that either. Their vote was a sound bite, a video clip, nothing more. And that is what has happened to our political system. President Obama has at last found the courage to stand up for the America he grew up in; but his speech was in its own way a sound bite as well. If anyone wanted realistically to rewrite the diagram I read in elementary school about how legislation is made, they would do it with sound bites, clips from press conferences, brief debates, and signing ceremonies. Meanwhile, the actual details of legislation are written largely by lobbyists, or in think tanks. The Republicans at the Heritage Foundation and the American Enterprise Institute live in an echo chamber dominated by libertarian ideologies, and certainly can't be bothered to do a reality check on their free-market fantasies.

Now let me see if I can my own small bit to re-introduce facts into the discussion. The Ryan Plan is forcing everyone to look seriously at budget numbers, and on NPR the other day I heard Howard Dean boldly make the rather obvious statement that we would have to go back to the Clinton era tax rates not just for the wealthy, but for everyone. President Obama may indeed have to go that far in the end, as he most certainly should have last fall, because the Republican House will never pass a bill simply restoring the higher rates for the wealthy, and he will be forced to let all the Bush-era tax cuts expire. Here is a table showing the evolution of top marginal tax rates over the last 100 years.

[I wanted to put the table in the blog but I am running into a common malfunction with the blog editor and it is not adding images. If anyone knows the fix, please let me know.

The table illustrates the paradox of twentieth century history: the two world wars, catastrophic for western civilization, also gave the national government the resources to do a great deal of good. It also shows that it is possible without drastic consequences to raise the top rates in the midst of a depression even worse than this one. And look at the table, as well as the graph, to see the levels--equivalent to several million dollars at today's prices--at which income was capped during the 1950s. There were, of course, loopholes. Those who possessed a large fortune could invest it in municipal bonds tax free. But those rates corresponded with robust economic growth.

I return to the theme of last week's post. Emotion, not rationality, dominates our politics today. One of our parties has become entirely faith-based, abandoning any pretense of gathering evidence to support its propositions. The other is too beholden to corporate interests actually to put forward an alternative to social Darwinism as a world view. The Enlightenment dream, that knowledge alone would improve the world, has turned out to be false. Knowledge is not enough. But it can help.

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Friday, April 08, 2011

The End of an Era?

The government shutdown is in the news, but I doubt very much that it will look extremely significant thirty years from now. Yes, the Democrats may successfully save funding for Planned Parenthood, but they have already agreed to cuts big enough to do a great deal of harm to important parts of the federal government without making any significant impact upon the deficit. We all remember that Bill Clinton prevailed politically the last time we had a shutdown, but I also remember that he had reacted to the Republican victory in 1994 by announcing that the era of big government was over. Now it looks to me as if an era of American civilization--though not, perhaps, western civilization--that has lasted about a century is coming to an end.

Quite simply, that was the era in which Americans believed that they could, through their government, apply reason and science to improve their lives and insure a certain degree of justice within the framework of a modern, capitalist economy. Capitalism's extraordinary capacity to generate inequality had become apparent before the First World War, and two younger generations--the Progressives (born about 1842-62) and the Missionaries (about 1863-1884) had reacted with various reform movements. The accidental accession of Theodore Roosevelt in 1901 brought these ideas into the White House, and Roosevelt talked specifically about using the power of the executive branch and the Sherman Anti-Trust Act to curb monopoly power and give the American people a "square deal." He did not get far, but the new generation got its chance in 1932 as a result of the Depression--and as the British say, they took it. The New Deal aimed specifically at regulating the excesses of the financial system, regulating agricultural and industrial markets, insuring the rights of labor, increasing the tax burden on the wealthy even in the midst of the depression, putting the unemployed to work, and providing social security in old age. While far from a complete success, it won the support of well over half the American people and enshrined a new way of thinking. The Nomadic Lost generation (b. about 1885-1904) was not won over to the New Deal, but some of its more liberal members played key roles in it nonetheless. The sacrifice of hundreds of thousands of the GI generation in the Second World War created a new sense of government responsibility to the people, and even the Lost collaborated in the construction of a new postwar society. By the time the Republicans regained the White House in 1953 they had no real desire to undo the achievements of the last twenty years.

"When I was a young man," the great Missionary W. E. B. Dubois (1868-1963) wrote in the late 1930s, "the foundations of present culture were laid, the way was charted, the progress toward certain great goals was undoubted and inevitable. There was room for argument concerning details and methods and possible detours in the onsweep of civilization, but the fundamental facts were clear, unquestioned and unquestionable." So it was too in my youth, and especially in the first half the 1960s, when JFK and LBJ tried to extend the New Deal tradition still further. Yet as so happens, the apotheosis of that particular civilization also marked the beginning of the end. The Vietnam War, that awful product of GI hubris, accelerated the process, but perhaps it was inevitable in any case. In 2000, at the end of my book American Tragedy, I drew on Strauss and Howe and predicted some kind of crisis and civic rebirth. I was right about the former; it seems now I was wrong about the latter, and I can see why.

The United States has in many ways been on a downward path since the age of Reagan. Reagan introduced two critical new trends: the gradual erosion of our progressive tax code (Reagan did not, in fact cut taxes--he shifted them to the middle and lower classes), and the decline of union rights and the de-industrialization of America. But Reagan was a GI, as were the leaders of the Congress in the 1980s, and the process was not allowed to go that far. The deregulation of the S & L industry in the late 1980s was catastrophic, but then, at least, the perpetrators faced punishment. 5000 industry insiders drew jail time for S & L fraud; not one major player has been convicted of anything for the crash of 2007. That is because in the interim new generations have come to the fore, with completely new principles.

The Silent generation (born 1925-42) got the deregulatory ball rolling. Alan Greenspan, Robert Rubin, and many of the other key players in the process were Silents. But a Boomer President and an increasingly Boomer Republican Congress repealed the Glass-Steagall Act. The process accelerated under George W. Bush. By cutting taxes and embarking upon two very long wars at the same time, Bush created a new permanent federal deficit even in good times. That has turned out to be a critical achievement for him and those on his side of the aisle, because it has made it absolutely impossible for the federal government to respond adequately to the economic crisis that deregulation brought about.

To Prophet generations like the Boomers, Strauss and Howe argued, falls the duty of giving society a new direction when the old order collapsed. We have failed that test, and our day in power is just about over, even though the youngest Boomers have only just turned 50. Why? Conservative Boomers, like conservatives of every generation except perhaps the GIs, have been devotees of the free market, which is really another form of social Darwinism. The most transformational Boomer President was George W. Bush, who crippled the finances of the federal government and started an endless involvement in the Middle East. But what about liberal Boomers?

Forty years ago our parents viewed liberal Boomers protesting the Vietnam War as spoiled children. It turns out that they were right, although not perhaps in exactly the way we believed. Liberal Boomers--including the few liberal politicians of any importance like Bill Clinton--have pretty much abandoned the New Deal tradition. They have stood by or collaborated in the de-industrialization of America and the deregulation of the financial system. Instead, they have focused on the rights of minorities, women, and gays. Those were important issues, but they stood out in the 1960s and 1970s largely because other at least equally important economic issues had been solved by our parents. We took those achievements for granted and assumed they would go on forever. They would not. We have secured minorities' equal right to participate--but in what?

Universities were a big part of the New Deal coalition, and provided a lot of the ideas that went into social and economic reform from the 1930s through the 1960s. The economists who taught me as a freshman were focused above all on keeping employment high, the legacy of their youth. They gave way to free-marketeers who almost totally dominate the economics profession now--and who, as the film Inside Job showed, are rewarded with six-figure consulting contracts. Many historians also focused upon the role of the state in society and the economy. Now those topics are virtually ignored by the faculty of our leading colleges and universities.

And that is why, it seems to me, today, in the midst of an economic, budgetary and political crisis, there is really no counterpoint to Republicans' continuing efforts to destroy the government. Roosevelt seized on the Great Depression as an opportunity to build up the federal government. They have seized upon the Great Recession as an opportunity to destroy government at every level. The punditocracy, with virtually no exceptions, has cooperated now in promoting the idea that cutting the deficit is our most important task--and no one takes the idea of tax increases seriously any more. There will be no Boomer President to restore a stronger role of government in the economy.

Generation X has gained enormously in power during the last three years. It occupies the White House and makes up most of the Republican leadership in the House of Representatives. And Generation X has no memory either of the New Deal or the postwar High. It spent its childhood amidst collapsing institutions, particularly the institution of the family, and it emerged with a lifelong distrust. The vast majority of Gen Xers view our crisis as a purely individual matter and are not interested in uniting for the common good. A Gen X Congressman, Paul Ryan, has just introduced a plan to destroy Medicare just in time for his own generation to retire. One cannot understand how that could happen without generational theory.

The attack on government has also become an attack on reason in public life. It is no accident that the darlings of the new right have included people like Dan Quayle, Sarah Palin, and Michelle Bachmann, who actually thought that the Revolutionary War had begun in Concord, New Hampshire. Intelligence is now seen as an attribute of an out-of-touch elite. It is clear that the Republican plans for health care, the economy and the budget are catastrophic--cutting government at all levels will impede recovery, not help it, and the free market is what has gotten us where we are today. But they do not care. The rationalist impulse is only one human impulse, and not by any means the strongest one. For the time being it seems that it has had its day. We live in a world of sound bites and images, with little time for reflection and understanding, and that is making it harder and harder to deal with our problems.

The Millennial generation (born about 1982-2002) might have been the new GIs, had the older generations enlisted them, too, in a great crusade. Now it seems that will not happen. Some of them are engaged in small-scale crusades of their own, using their own brains and their cooperative spirit to solve problems. That holds out a little hope for the present and more for the future. But for the next decade or two there seems little hope for any escape from our new Gilded Age. Boomers lived through a great era of American politics. Unfortunately for them and their children and grandchildren, it came to an end as they reached adulthood. Yet we can remain faithful to the best of our past, just as Europeans like Stendhal kept alive the ideals of the French Revolution in the 1820s, secure in their faith that such times would come again--as indeed, eventually, they did.

P.S. Last night, after an agreement was reached to avert a shutdown, President Obama said that Americans of different beliefs had come together and hailed "the biggest annual spending cut in history." Yes: the Republicans won on the principle of dismantling the federal government at home, the Democrats won on funding for planned parenthood and powers for the EPA that will never be effectively applied. (As of 8:20 this morning EDT, no one seems to know whether funding for PBS survived or not.) That is a fitting commentary on the power of the two parties today, and on how President Obama increasingly sees himself: a Democrat on social issues and a moderate Republican on economic ones.

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Sunday, April 03, 2011

Bismarck, Kissinger, and the New York Times

Yesterday the New York Times printed one of the funniest corrections that has appeared in that august paper for some time. It read:

"Because of a production error, a review on the cover of the Book Review, about 'Bismarck: A Life,' by Jonathan Steinberg, omits the byline in some copies. As noted in the table of contents and in the contributor’s biographical note, the review is by Henry A. Kissinger."

The review arrived on my doorstep this morning and I read it with interest. Henry Kissinger has never been more than a part-time historian. He was trained as a political scientist and became a Presidential adviser, diplomat, and Secretary of State. While his books, such as Diplomacy, are full of provocative observations about historical events, they do not always show, shall we say, a determination to get to the bottom of them. My late adviser Ernest R. May noted in the Times when Diplomacy appeared that it was full of errors that would have drawn a marginal comment on an undergraduate paper. To my amazement, Kissinger's review of this book also contains two such errors.

The first error is subtle, but nonetheless highly significant. Bismarck, Kissinger writes, "won over public opinion by granting universal manhood suffrage--making Prussia one of the first states in Europe to do so." Now Prussia, Bismarck's country of origin, was the largest, by far, of the German states that Bismarck forged into a single unit in 1866 and 1871. But Bismarck made no changes to the suffrage laws in Prussia. Prussia had secured "universal manhood suffrage" as a result of a revolution in 1848-9--but not universal equal manhood suffrage. The voters in Prussia were divided into three classes based upon income, and votes of members of the richest class were worth about 20 times as much as those of the majority of voters in the poorest class. Bismarck never changed this system withing Prussia. He did grant universal equal manhood suffrage for the Reichstag, the legislative body in the new North German Confederation (1866) and German Empire (1870) that he created, but limited the powers of that legislature mainly to economic issues. He made certain, in short, that Prussia itself--which included more than half of the new German state--would be dominated by conservative aristocrats like himself. To confuse so badly the distinction between Prussian institutions on the one hand, and those of the German Empire on the other, is an astonishing mistake for one of Kissinger's background to make.

Secondly, Kissinger writes, "Until Bismarck appeared on the scene, it had generally been assumed that nationalism and liberalism represented opposite poles; he rejected that proposition." The exact opposite is true. Liberalism, especially in Germany, had been completely nationalistic, and German liberals had tried and failed to unify Germany in 1848-9. Conservatism and nationalism had been thought of as opposites before Bismarck, because conservatism believed in the rights of individual monarchs, which unification would reduce or even destroy. As a contemporary observer noted, “Count Bismarck made liberal ideas and energies subservient to conservative ends.”

When one reaches a certain level of eminence one's thoughts automatically become publishable. That in turn leads to temptations to which I am glad never to have been exposed. I'm glad I was taught to get my facts straight and to read the most authoritative works on subjects of interest. None of this is designed, by the way, to make any judgment about Jonathan Steinberg's book--I doubt very much that these errors originated with him.

Saturday, April 02, 2011

The U.S. and the Middle East

For the last 40 years I have been a thorough skeptic about the wisdom of American intervention in the politics of other nations, especially in the Third World. I was one of those identified by my friend Andrew Bacevich in his last book, such as retired Marine Corps Commandant and Senator J. William Fulbright, who re-evaluated the assumptions of US foreign policy as a result of the Vietnam War, and it took some time to realize how exceptional we were. (There were a few others, such as George F. Kennan, who didn't have to re-evaluate because they had been skeptical already.) With the optimism of youth, I assumed that many other Americans, particularly in my own generation, had reached the same conclusion. I was wrong. While one can, with some difficulty, distinguish between liberal and conservative interventionists within our foreign policy and political elites, non-interventionists are nearly extinct. I am increasingly concerned by this because I don't see how anything but non-intervention can have disastrous results around the Muslim World today.

So far during the last decade we have removed and attempted to replace governments in two large Moslem nations, Afghanistan, where we have really had very little political success, and Iraq, where a government is barely functioning and significant tensions persist. More recently we have encouraged the fall of governments in Tunisia and Egypt, while saying nothing about revolts in Jordan, Syria, Yemen and Bahrain--where our ally Saudi Arabia has moved in troops to quiet things down. Last but hardly least, we have bombed Libyan government forces for two weeks to halt their advance against the rebels. I gave the Administration the benefit of the doubt about that decision last week because it seemed to be working fairly well, at least in the short run. This week things look murkier. The rebels have lost ground despite the bombing, but on the other hand, prominent officials are defecting from Qaddafi's regime. It has become clear that while the decision to bomb Libya probably originated in the White House with help from Samantha Power and was endorsed by the State Department, it got essentially no support at the Department of Defense, where Secretary Gates has made his dislike for the campaign and his eagerness to get the United States out of it as soon as possible well known.

Let me try, sitting here on the fly, to list factors militating in favor of, or against, intervention.

1. The government of the United States in principle dislikes authoritarianism and supports democracy.

2. American Presidents like to bring home the scalps of well-known anti-American dictators.

3. The government of the United States is supporting various authoritarian governments who are actively engaged against Islamic militants.

4. The government of the United States desperately wants to improve its standing among Arab public opinion.

5. Parts of the government of the United States believe in intervention to stop war crimes and massacres.

6. One part--the Department of Defense--has no more resources for major involvements anywhere, and the government in general obviously doesn't want to commit itself to a losing side in a civil war.

And thus, so far, we are supporting, in effect, the governments of Yemen, Bahrain (now occupied by Saudis, and Jordan, because they stand, respectively, in the way of Al Queda operations in Yemen, another Iran-sponsored Shi'ite victory in Bahrain, and Palestinian control of Jordan. On the other hand, we took the initiative to encourage or demand changes of government in Tunisia and Egypt because their leaders seemed in any case to be doomed and their people were obviously united against them. It is not in the least clear, however, that those decisions are going to pay off for us. Today's New York Times includes a very disturbing story about agitation by militants for a conservative Islamic state in Egypt--including one of Anwar Sadat's assassins, whom the government just released from prison after 30 years. The Army meanwhile is showing no eagerness to surrender power there. We will have more difficult choices to make.

Now it seems to me that in Libya, the Administration, in the first instance, allowed itself to be carried away by what had happened on either side of that unhappy land. Muammar Qaddafi had grown much closer to the West in the last decade, paying reparations for the Lockerbie airplane bombing, striking new oil deals with the British, renouncing his nuclear program under Bush II, and sending his son to meet the current Secretary of State. But when rebel outbreaks occurred in much (not all) of the country, it seemed his time had come. When he seemed ready and willing to fight back, the humanitarian impulse took over. Now suddenly we are involved in what may become a very long and indecisive civil war. That decision was evidently reached without any real consultation at the highest levels of the government, and certainly without any agreement on the basic questions of exactly what we were trying to do, how we hoped to get it, and what our next move would be if we could not. There is now talk of a cease-fire, which would probably be one of the more desirable possible outcomes now.

Meanwhile, I cannot escape the feeling that the White House enjoys these foreign crises because the President has become relatively helpless at home. Yes, the drop in unemployment was welcome news, even though it remains catastrophically high, but the Republican House will surely block any new Democratic initiatives, and the President is going to have to give in to at least $30 billion of discretionary spending cuts, on paper at least. The President remains so under-exposed in the media that I am beginning to wonder if White House pollsters have concluded that exposure is bad for his poll numbers. Our involvement in the turmoil in the Middle East gives an illusion of activity. Our goals, however, are so contradictory that it's extremely unlikely that anything good will come of it.

It looks increasingly impossible that the old order in the Middle East can be propped up much longer. It is gone in Tunisia and Egypt and it is apparently shaky in Syria, Jordan, Yemen (where there has never been much order to speak of anyway), and perhaps in other Gulf states too. It also seems clear that militant Islamists make up one of the more committed political forces in many of those countries and will probably strengthen themselves as a result of any further revolutions, as they already have in Egypt.

What might the President say?

"Two hundred and forty years ago, the United States introduced modern democracy to the world. The ideals of 1776 rapidly spread across the Atlantic and touched off new revolutions, but their progress remained slow and uneven for well over a century. Even in Europe and parts of the Americas, democracy has often been in retreat during the last two centuries. We all rejoiced in 1990-1 when Communism collapsed and new democracies emerged in Eastern Europe and Central Asia, but we must recognize that some have been far more durable and successful than others.

"Now the Muslim world is struggling to realize new aspirations for popular rule. Democracy is hardly unknown there--Turkey has lived under democracy for most of the last century, and many other nations have some democratic institutions. Yet the spread of democracy there, as in Europe, South America, Asia, and indeed virtually the whole world, is likely to be an uneven and incomplete process for a very long time. We wish the peoples of the Muslim world well in their quest for better institutions. We shall not presume to tell them what forms of government they should adopt, or how quickly. Meanwhile, we hope that all governments, however chosen, will respect their peoples' fundamental rights and behave as responsible members of the international community. We also hope that today's revolutionaries will pay due attention to the great non-violent revolutions of the twentieth century, those of Gandhi and Martin Luther King, Jr., that they may lead their countrymen into new territory without great bloodshed.

"The western world no longer dreams of imposing its institutions around the globe--and many areas of the world are uneasy about the western model. Our task here at home is to rebuild our own economy and society, not only for our own sake, but once again to provide a hopeful example to others, as Franklin Roosevelt, Harry Truman, Dwight Eisenhower and John F. Kennedy managed to do in the middle of the last century. We shall continue to try to lead by example as we watch other peoples in other lands grapple with the questions that have been the source both of conflict and achievement over the last three centuries."

I no longer expect to hear words like that from any President.

P.S. (updated Sunday.) I regret to note that I did not mention one sentence from the President's address on Libya that had jumped out at me at the time:

"Yes, this change will make the world more complicated for a time. Progress will be uneven, and change will come differently to different countries. There are places, like Egypt, where this change will inspire us and raise our hopes. And then there will be places, like Iran, where change is fiercely suppressed. The dark forces of civil conflict and sectarian war will have to be averted, and difficult political and economic concerns will have to be addressed.

That reminded me of Freud's advice on dream interpretation: it's the thing you don't understand, that doesn't seem to belong in the dream, that is significant. Why did the President bring Iran into this discussion? Today's New York Times, in the Week in Review, supplies the answer: the decision to bomb Libya was designed partly to put the fear of American action into the Iranians. We shall be tempted to intervene if there is another outbreak of violence there.

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