Any doubt that Barack Obama wants to enter into a new version of the 1950s vanished the other night during the State of the Union. He said so virtually in his first words:
We gather tonight knowing that this generation of heroes has made the United States safer and more respected around the world. (Applause.) For the first time in nine years, there are no Americans fighting in Iraq. (Applause.) For the first time in two decades, Osama bin Laden is not a threat to this country. (Applause.) Most of al Qaeda’s top lieutenants have been defeated. The Taliban’s momentum has been broken, and some troops in Afghanistan have begun to come home.
These achievements are a testament to the courage, selflessness and teamwork of America’s Armed Forces. At a time when too many of our institutions have let us down, they exceed all expectations. They’re not consumed with personal ambition. They don’t obsess over their differences. They focus on the mission at hand. They work together.
Imagine what we could accomplish if we followed their example. (Applause.) Think about the America within our reach: A country that leads the world in educating its people. An America that attracts a new generation of high-tech manufacturing and high-paying jobs. A future where we’re in control of our own energy, and our security and prosperity aren’t so tied to unstable parts of the world. An economy built to last, where hard work pays off, and responsibility is rewarded.
We can do this. I know we can, because we’ve done it before. At the end of World War II, when another generation of heroes returned home from combat, they built the strongest economy and middle class the world has ever known. (Applause.) My grandfather, a veteran of Patton’s Army, got the chance to go to college on the GI Bill. My grandmother, who worked on a bomber assembly line, was part of a workforce that turned out the best products on Earth.
The two of them shared the optimism of a nation that had triumphed over a depression and fascism. They understood they were part of something larger; that they were contributing to a story of success that every American had a chance to share -- the basic American promise that if you worked hard, you could do well enough to raise a family, own a home, send your kids to college, and put a little away for retirement.
Those were indeed inspiring words, and we shall see in a moment that Obama has in fact been trying to move in that direction for years; but the analogy, sadly, is false. While the individual soldiers in Iraq and Afghanistan have shown even more dedication than the veterans of the Second World War, measured by the number and length of the tours many of them have spent in combat, they are a tiny minority of the population compared to the ten million men who returned home in 1945. President Obama did not mention the GI bill or the housing programs that made life easier for returning veterans, much less the 91% marginal rates that topped the tax code. And while the problem in 1945 was to maintain the full employment that the war had brought about, today we are struggling with the long-term decline of employment in America driven by market forces and by a business ethos that no longer cares about the impact of decisions upon American society. One of the most important pieces of recent journalism appeared last Sunday: this New York Times account of how Apple decided to locate most of its manufacturing and assembly plants outside the US, most notably in China. It holds out little hope that things will be reversed any time soon.
An equally important piece of reportage was Ryan Lizza's piece on Obama in The New Yorker, drawing on internal White House documents, many of them including check marks and marginal notes from the President himself. The President and his staff have been entirely sincere about striking a non-partisan pose, appealing to moderate voters across the United States--I am tempted to say, all three of them--and finding ways to cut the budget. The trend continued in the state of the union. Any serious attempt to move us away from fossil fuels is obviously dead: the President opened up thousands of square miles of ocean to offshore drilling and extolled our natural gas reserves. We have apparently found the solution to our long-standing energy problems: allow the major financial institutions to bid the price of oil high enough to make domestic production profitable. The President also talked about cutting back regulations--which most of the people I know in business do believe have become much too cumbersome--and about reducing corporate taxes, which are already, in real terms, very low. He drew a surprising amount of perfunctory applause from John Boehner, sitting behind him, but I doubt there is the slightest chance of the Republican Party in Congress passing anything he puts forth. His relationship to them remains similar to that of Andrew Johnson, even though he, unlike Andrew Johnson, is more than willing to meet his radical Republicans half way. How all this will play out in November is hard to say. RealClearPolitics has just run a poll showing that every single presidential candidate has a higher disapproval than approval rating. The President's differential is the smallest, a mere 2%, and the Republican Party is paying the price both for its new style of campaigning and for the Citizens United decision as its competitors devour one another. But Obama will not get--and does not seem to want--a sweeping mandate.
Last but not least, the President has been genuinely committed to debt reduction. The Republicans turned down his grand bargain last summer, but if he wins again they may have no choice but to accept. The Pentagon really faces tremendous cuts. Our last great foreign adventure is winding down and official Pentagon policy says it will not be repeated: there will be no more "long-term, large-scale stability operations," the euphemism for the occupations of Iraq and Afghanistan.
The federal budget moves according to the generational cycle that Strauss and Howe identified, and our periodic national crises always show a huge increase in the national debt. So it has been this time. The debt doubled under George W. Bush and has been increasing even more rapidly ever since as a result of the economic crisis. It is nowhere near as big in real terms as it was in 1945, as I pointed out some months ago, or probably in 1865 either, but it has still become a center of national concern. The terrible thing, this time, is that we have no great achievements to show for it--not even a renewal of belief in our institutions. And now the public is weary of crusades.
The course of the President's first term, as laid out both by Ron Suskind's book which I discussed last week and by Lizza's article, effectively rules out a broad new crusade at home to put people back to work and seriously curtail the power of institutions like big banks and health insurance companies. And to the extent that global warming indeed results from burning fossil fuels--something of which I personally am not certain--it will continue. Yet I do not think the kind of unity the President dreams of is anywhere near, whether he is re-elected or not. In the campaigns of the Gilded Age, Democrats continued to label Republicans the party of tyranny and Republicans called Democrats the party of treason for decades after the war. The President has unilaterally disarmed the Democrats in the similar battle that is being waged today. We shall see whether he can bring the battle to an end, or whether his premature cease-fire will instead lead to new victories for the other side, with incalculable consequences.
At the conclusion of his speech the President returned to where he had started.
One of my proudest possessions is the flag that the SEAL Team took with them on the mission to get bin Laden. On it are each of their names. Some may be Democrats. Some may be Republicans. But that doesn’t matter. Just like it didn’t matter that day in the Situation Room, when I sat next to Bob Gates -- a man who was George Bush’s defense secretary -- and Hillary Clinton -- a woman who ran against me for president.
All that mattered that day was the mission. No one thought about politics. No one thought about themselves. One of the young men involved in the raid later told me that he didn’t deserve credit for the mission. It only succeeded, he said, because every single member of that unit did their job -- the pilot who landed the helicopter that spun out of control; the translator who kept others from entering the compound; the troops who separated the women and children from the fight; the SEALs who charged up the stairs. More than that, the mission only succeeded because every member of that unit trusted each other -- because you can’t charge up those stairs, into darkness and danger, unless you know that there’s somebody behind you, watching your back.
So it is with America. Each time I look at that flag, I’m reminded that our destiny is stitched together like those 50 stars and those 13 stripes. No one built this country on their own. This nation is great because we built it together. This nation is great because we worked as a team. This nation is great because we get each other’s backs. And if we hold fast to that truth, in this moment of trial, there is no challenge too great; no mission too hard. As long as we are joined in common purpose, as long as we maintain our common resolve, our journey moves forward, and our future is hopeful, and the state of our Union will always be strong.
To rebuild the nation together, I fear, would take far more unity, inspiration and sacrifice than we seem to have available. The re-election of Barack Obama would be far better than any alternative; but we shall continue to mark time on the issues most critical to the country. The State of our Union is not strong, but perilously tenuous. May it slowly knit it self together again as a new generation moves upward in the workplace. Mine, sadly, has had its chance.
Saturday, January 28, 2012
Sunday, January 22, 2012
Update
My last post, which has been up about 36 hours, took a long time in coming. While I am not going to edit it in response to the events of this weekend, its prognostications, such as they are, certainly look a mite overstated this morning. I can't remember, literally, ever seeing such a violent swing on the eve of an election as has occurred in South Carolina, and Gingrich's victory certainly means that Mitt Romney is far from a sure thing. It also means that their rival PACs will be hitting each other with everything they have for weeks to come, all of which suggesting that Barack Obama could face either a critically weak (Gingrich) or seriously weakened (Romney) candidate come the fall. I also wonder whether these results show that the Tea Party rebellion might continue if Romney wins the nomination.
Yet having said that, I will also take this opportunity to make another point that emerged from Ron Suskind's book, one that I found very revealing not only about the President himself, but about the mess liberalism has gotten itself into over the last 40 years.
On several occasions during his first year in office, and especially late in 2009 when we found that unemployment had risen far more than anyone anticipated, some one asked Obama whether he was still optimistic. Of course he was, he replied--"My name is Barack Hussein Obama, and I'm sitting in the White House"--proof, evidently, that good things were bound to happen in the United States of America.
Of course that is proof that good things can happen in the United States of America, and of course the opening of high positions to women, minorities, and uncloseted gays has been a very good thing; but the time has come to recognize that it has very little to do with other equally critical aspects of the health of the American economy and society. The discriminatory part of the system has largely been fixed, but the exploitative aspects of it have gotten much, much worse. Larry Summers and Tim Geithner accept Obama as President but they don't accept serious limits on our new financial system. The system has worked personally for Barack Obama, but that doesn't mean that it is working well for his fellow Americans, male and female, black and white. I am not sure liberalism will score any truly decisive successes before it gets beyond that point.
Yet having said that, I will also take this opportunity to make another point that emerged from Ron Suskind's book, one that I found very revealing not only about the President himself, but about the mess liberalism has gotten itself into over the last 40 years.
On several occasions during his first year in office, and especially late in 2009 when we found that unemployment had risen far more than anyone anticipated, some one asked Obama whether he was still optimistic. Of course he was, he replied--"My name is Barack Hussein Obama, and I'm sitting in the White House"--proof, evidently, that good things were bound to happen in the United States of America.
Of course that is proof that good things can happen in the United States of America, and of course the opening of high positions to women, minorities, and uncloseted gays has been a very good thing; but the time has come to recognize that it has very little to do with other equally critical aspects of the health of the American economy and society. The discriminatory part of the system has largely been fixed, but the exploitative aspects of it have gotten much, much worse. Larry Summers and Tim Geithner accept Obama as President but they don't accept serious limits on our new financial system. The system has worked personally for Barack Obama, but that doesn't mean that it is working well for his fellow Americans, male and female, black and white. I am not sure liberalism will score any truly decisive successes before it gets beyond that point.
Friday, January 20, 2012
The Tragedy of Barack Obama
Three years ago, I, like so many others, felt myself fill with hope as Barack Obama was inaugurated as President, with large Democratic majorities to work with. By then I should have known better. The appointment of Larry Summers, whose path had already crossed mine and whose disastrous tenure as President of Harvard should have ruled him out of any further major responsibility, was such a shock that I went, literally, into denial over it. It was not until 18 months later, on July 4, 2010, right here, that I recognized that things had not, and probably would not, turn out as so many of us had hoped. And now we have the story, in broad lines at least, of how that happened, courtesy of Ron Suskind, the author of Confidence Men, which appeared a few months ago. The newspapers reported at the time that the book had sent the White House into a bit of a panic, and I can see why. Their campaign to reduce its impact to negligible proportions evidently succeeded. To be sure, it is very long and sometimes tedious, but the length serves the purpose of genuinely immersing the reader in the subject at hand. (I have used the same technique myself more than once.) And yes, like Woodward's books, it relies on a number of key sources, although Suskind does not make any effort to disguise who they were. I'm sure I could write 5000 words about it, but I don't have the time to do so, and thus I shall begin, as it were, not at the beginning, but with my own conclusion, based upon his facts.
We will never know what another Democratic President might have done with the opportunity of January 2009, and it is not certain that anyone could have done that much more. Neither Obama nor anyone else could match the enthusiasm that had swept him into office with an army of reformers ready to recreate the American economy. That is the result of 30 years of almost unchallenged free market orthodoxy and tax cuts on the very wealthy. In Obama's case, however, the story is very clear. While he was open to radical steps such as a government take-over of at least one major bank, he was not committed to them. And the appointments of Summers, Tim Geithner and Rahm Emmanuel ensured, in retrospect, that nothing fundamental would happen. Summers was a major architect of the deregulation of the financial sector, and nothing, including the loss of 30% of the Harvard Endowment and the economic collapse of 2008, could persuade him that he had made any major mistakes. Geithner as chief of the New York Fed had worked to insure the continued health of the big banks and continued to do so after becoming Treasury Secretary. Emmanuel, I must admit, emerged as the most contemptible type of all: a Democratic politician who evidently believes that Democratic politicians can remain in power only if they carefully avoid rocking any big boats. Together they were a disastrous triumvirate.
"First do no harm" was Geithner's and Summers's motto in dealing with Citigroup, Bank of America and the rest--and that Hippocratic metaphor says it all. To them the banks were the patients. To other Americans, including the venerable Paul Volcker, who figures memorably in the book, a few other aging veterans of the distant past, and Paul Krugman, the patient was the economy and society of the United States, and the big banks were a cancer that had to be excised to restore the patient's health. Obama is a compromiser and no compromise is possible between those two points of view. The banks won. And the banks, Suskind shows again and again, do not make any pretense of having our interests at heart. The slow recovery has revolved, at least in part, around their refusal to lend money within the United States--but as long as more profitable opportunities exist there is not the slightest reason to think that they might do so. In one of the most devastating moments of the book, Suskind quotes an anonymous banker as saying that he and his colleagues are going long on the developing world, where growth is occurring, and short on the United States. That's more than a metaphor: Mitt Romney, among others, bought several corporations with the goal of loading them up with debt and putting them out of business. Even Herbert Hoover, faced with a similar situation, started the Reconstruction Finance Corporation, which became a key institution both during the New Deal and in the Second World War. No such proposal has emanated from Washington now.
I could write pages and pages about what I learned about the financial world from this book, but I will content myself with two more topics: the regulation of derivatives, and banks' relationships with their customers. It has long been accepted that transparency and collateral are the keys to successful markets, and the whole New Deal regulatory structure was designed to bring these virtues to trading on Wall Street. For two years, Wall Street, with help from Summers and Geithner, struggled to prevent any regulation of derivatives, such as forcing them to be traded on public exchanges, with trades settled through clearinghouses. They did not completely keep such provisions out of the Dodd Frank bill, but they hedged them sufficiently as to make them, in all probability, ineffective. Why? Because it is precisely the lack of transparency in these transactions--the inability of buyers and sellers instantly to find out what the other is asking or bidding--that makes them so enormously profitable for the banks. Playing with rules is less profitable (at least in good times!) than playing without them, and two generations of graduates of our elite universities have now learned in their economics courses that profit trumps all. When they reach Wall Street, as so many of them do, that view is reinforced.
As for banks and their customers, Goldman Sachs has, as you probably remember, been sued by the SEC for having sold their customers subprime collateralized debt obligations that they knew hedge fund trader John Paulsen was shorting--and even accepting his help in deciding which mortgages to put into them. That, once again, was simply doing what comes naturally in the modern world. The complaint has not yet been settled, and it will be interesting to see how it turns out. But unless and until the banks are fundamentally restructured and their income reduced, they will remain dangerous parasites on our system.
Another fascinating fact Suskind expounded concerned "repo" money--funds which the big firms lent one another on a temporary basis to keep their operations going. His account reminded me of one of my father's favorite (though not one of his better) jokes, about a guy who borrowed $100 every other Friday from Farbstein to pay Ginsburg, and borrowed it back from Ginsburg the next Friday to pay Farbstein. I must have heard this story for the first time before I was ten, but I could see there was a problem with the scheme. But this was, apparently, the way the big firms operated, and may still be, to the tune of many millions of dollars. They managed their liquidity on a minute-to-minute basis. It's no wonder so many of them had a weakness for cocaine and paid sex.
As for health care, two issues dominated the debate: the expansion of coverage, and the reform of medical practices, using the best available data substantially to decrease the amount of money spent on health care. As I have already described here, Karen Ignagni, the health insurers' chief lobbyist in Washington, made sure early that the health care bill would include a mandate, a gift to her industry of millions of largely healthy customers. But while the bill made its way through Congress, any large-scale cost control efforts dropped out of it, partly because of Republican "death panel" propaganda. I spent last weekend in the company of a number of conservatives arguing that Obamacare was unconstitutional. I don't think that it is, but I wished I could have been defending a proposal that I believed would do some good. And that leads me to the real heart of the matter.
We are in serious trouble in the United States because the financial community and the health care industry soak up much, much too much of the Gross Domestic Product. Real reform means much less money for them--and they are not going to surrender it gladly. Roosevelt made it possible for industrial workers to get more of their firms' revenues in wages, he saved many, many farmers from foreclosure, and he tried (with how much success I am not sure) to take away some of the power of the energy industry, composed then of power companies. He knew many within these institutions would hate him for this, and he didn't care. In fact, he was proud of it, and he should have been.
Barack Obama is simply not capable of taking such a stand. Roosevelt, who met the President of the United States when he was about five years old, was an insider from the day of his birth. Obama was an outsider at least until he reached Harvard Law School, and he has gotten where he has by working with the system. Nothing has ever happened to him--except, evidently, an unfortunate lease he signed for a car, and perhaps some excessive credit card spending--to make him fundamentally distrust our institutions, or, even more importantly, the kind of men who tend to rise to the top within them and look after each other. The women in the White House, Suskind shows, consistently felt ignored and unheard. I'm sure that was true, but I'm not sure it was because they were women--I doubt very much that men who disagreed with Larry Summers and Rahm Emmanuel would have got more of a hearing. They should be proud to have been ignored for their views, rather than resentful of having been ignored because they were women.
Because they had the wrong priorities, the men in the White House have probably sunk their Administration. (The book ends with a big management shake-up after the midterms but it doesn't seem to have done much good. The new chief of staff, William Daley, lasted only a year.) They obviously had to do more to put people to work, but when that became clear in the middle of 2009, Emmanuel shut off discussion by saying that nothing more could go through Congress. (I am not even sure that is true--it could certainly have gone through the House, whose Democratic members paid the price for their President's pusillanimity in November 2010.) Even before that they had not taken enough trouble to make sure the trillion-dollar stimulus would go where it was most needed. It did not have to be their last chance.
In the next ten months Barack Obama will have to endure the most overwhelmingly hostile volley of propaganda that any sitting President has faced in an election since Herbert Hoover. Sadly, he will have no real achievements to show for it. Health Care reform was simply not the place to put his priorities in the midst of an economic crisis, even if he could have passed a good bill. The President has retreated from New Deal liberalism, as Bill Clinton also did, in a thousand ways. He cannot accomplish anything substantial domestically in the coming year and he may suffer the indignity of having his health care law declared unconstitutional. With Mitt Romney virtually assured of the Republican nomination, he is likely, as of this moment, to be President one year from today as well. The President, sadly, will have no one to blame but himself.
We will never know what another Democratic President might have done with the opportunity of January 2009, and it is not certain that anyone could have done that much more. Neither Obama nor anyone else could match the enthusiasm that had swept him into office with an army of reformers ready to recreate the American economy. That is the result of 30 years of almost unchallenged free market orthodoxy and tax cuts on the very wealthy. In Obama's case, however, the story is very clear. While he was open to radical steps such as a government take-over of at least one major bank, he was not committed to them. And the appointments of Summers, Tim Geithner and Rahm Emmanuel ensured, in retrospect, that nothing fundamental would happen. Summers was a major architect of the deregulation of the financial sector, and nothing, including the loss of 30% of the Harvard Endowment and the economic collapse of 2008, could persuade him that he had made any major mistakes. Geithner as chief of the New York Fed had worked to insure the continued health of the big banks and continued to do so after becoming Treasury Secretary. Emmanuel, I must admit, emerged as the most contemptible type of all: a Democratic politician who evidently believes that Democratic politicians can remain in power only if they carefully avoid rocking any big boats. Together they were a disastrous triumvirate.
"First do no harm" was Geithner's and Summers's motto in dealing with Citigroup, Bank of America and the rest--and that Hippocratic metaphor says it all. To them the banks were the patients. To other Americans, including the venerable Paul Volcker, who figures memorably in the book, a few other aging veterans of the distant past, and Paul Krugman, the patient was the economy and society of the United States, and the big banks were a cancer that had to be excised to restore the patient's health. Obama is a compromiser and no compromise is possible between those two points of view. The banks won. And the banks, Suskind shows again and again, do not make any pretense of having our interests at heart. The slow recovery has revolved, at least in part, around their refusal to lend money within the United States--but as long as more profitable opportunities exist there is not the slightest reason to think that they might do so. In one of the most devastating moments of the book, Suskind quotes an anonymous banker as saying that he and his colleagues are going long on the developing world, where growth is occurring, and short on the United States. That's more than a metaphor: Mitt Romney, among others, bought several corporations with the goal of loading them up with debt and putting them out of business. Even Herbert Hoover, faced with a similar situation, started the Reconstruction Finance Corporation, which became a key institution both during the New Deal and in the Second World War. No such proposal has emanated from Washington now.
I could write pages and pages about what I learned about the financial world from this book, but I will content myself with two more topics: the regulation of derivatives, and banks' relationships with their customers. It has long been accepted that transparency and collateral are the keys to successful markets, and the whole New Deal regulatory structure was designed to bring these virtues to trading on Wall Street. For two years, Wall Street, with help from Summers and Geithner, struggled to prevent any regulation of derivatives, such as forcing them to be traded on public exchanges, with trades settled through clearinghouses. They did not completely keep such provisions out of the Dodd Frank bill, but they hedged them sufficiently as to make them, in all probability, ineffective. Why? Because it is precisely the lack of transparency in these transactions--the inability of buyers and sellers instantly to find out what the other is asking or bidding--that makes them so enormously profitable for the banks. Playing with rules is less profitable (at least in good times!) than playing without them, and two generations of graduates of our elite universities have now learned in their economics courses that profit trumps all. When they reach Wall Street, as so many of them do, that view is reinforced.
As for banks and their customers, Goldman Sachs has, as you probably remember, been sued by the SEC for having sold their customers subprime collateralized debt obligations that they knew hedge fund trader John Paulsen was shorting--and even accepting his help in deciding which mortgages to put into them. That, once again, was simply doing what comes naturally in the modern world. The complaint has not yet been settled, and it will be interesting to see how it turns out. But unless and until the banks are fundamentally restructured and their income reduced, they will remain dangerous parasites on our system.
Another fascinating fact Suskind expounded concerned "repo" money--funds which the big firms lent one another on a temporary basis to keep their operations going. His account reminded me of one of my father's favorite (though not one of his better) jokes, about a guy who borrowed $100 every other Friday from Farbstein to pay Ginsburg, and borrowed it back from Ginsburg the next Friday to pay Farbstein. I must have heard this story for the first time before I was ten, but I could see there was a problem with the scheme. But this was, apparently, the way the big firms operated, and may still be, to the tune of many millions of dollars. They managed their liquidity on a minute-to-minute basis. It's no wonder so many of them had a weakness for cocaine and paid sex.
As for health care, two issues dominated the debate: the expansion of coverage, and the reform of medical practices, using the best available data substantially to decrease the amount of money spent on health care. As I have already described here, Karen Ignagni, the health insurers' chief lobbyist in Washington, made sure early that the health care bill would include a mandate, a gift to her industry of millions of largely healthy customers. But while the bill made its way through Congress, any large-scale cost control efforts dropped out of it, partly because of Republican "death panel" propaganda. I spent last weekend in the company of a number of conservatives arguing that Obamacare was unconstitutional. I don't think that it is, but I wished I could have been defending a proposal that I believed would do some good. And that leads me to the real heart of the matter.
We are in serious trouble in the United States because the financial community and the health care industry soak up much, much too much of the Gross Domestic Product. Real reform means much less money for them--and they are not going to surrender it gladly. Roosevelt made it possible for industrial workers to get more of their firms' revenues in wages, he saved many, many farmers from foreclosure, and he tried (with how much success I am not sure) to take away some of the power of the energy industry, composed then of power companies. He knew many within these institutions would hate him for this, and he didn't care. In fact, he was proud of it, and he should have been.
Barack Obama is simply not capable of taking such a stand. Roosevelt, who met the President of the United States when he was about five years old, was an insider from the day of his birth. Obama was an outsider at least until he reached Harvard Law School, and he has gotten where he has by working with the system. Nothing has ever happened to him--except, evidently, an unfortunate lease he signed for a car, and perhaps some excessive credit card spending--to make him fundamentally distrust our institutions, or, even more importantly, the kind of men who tend to rise to the top within them and look after each other. The women in the White House, Suskind shows, consistently felt ignored and unheard. I'm sure that was true, but I'm not sure it was because they were women--I doubt very much that men who disagreed with Larry Summers and Rahm Emmanuel would have got more of a hearing. They should be proud to have been ignored for their views, rather than resentful of having been ignored because they were women.
Because they had the wrong priorities, the men in the White House have probably sunk their Administration. (The book ends with a big management shake-up after the midterms but it doesn't seem to have done much good. The new chief of staff, William Daley, lasted only a year.) They obviously had to do more to put people to work, but when that became clear in the middle of 2009, Emmanuel shut off discussion by saying that nothing more could go through Congress. (I am not even sure that is true--it could certainly have gone through the House, whose Democratic members paid the price for their President's pusillanimity in November 2010.) Even before that they had not taken enough trouble to make sure the trillion-dollar stimulus would go where it was most needed. It did not have to be their last chance.
In the next ten months Barack Obama will have to endure the most overwhelmingly hostile volley of propaganda that any sitting President has faced in an election since Herbert Hoover. Sadly, he will have no real achievements to show for it. Health Care reform was simply not the place to put his priorities in the midst of an economic crisis, even if he could have passed a good bill. The President has retreated from New Deal liberalism, as Bill Clinton also did, in a thousand ways. He cannot accomplish anything substantial domestically in the coming year and he may suffer the indignity of having his health care law declared unconstitutional. With Mitt Romney virtually assured of the Republican nomination, he is likely, as of this moment, to be President one year from today as well. The President, sadly, will have no one to blame but himself.
Friday, January 13, 2012
Health Care and the Constitution
I am spending a long weekend at an academic conference on the judicial thinking of the early Republic--not my specialty, of course, but as you all know, there's very little political history I can't get interested in. The conferees include academics and lawyers and represent a very broad spectrum of opinion, and at lunch today we got into a big argument about the health care law, which many of today's conservative intellectuals feel must be declared unconstitutional so as to put some limit on governmental power. Several of them believe that health care, like everything else, should be left to market forces. It has set me thinking on a number of levels.
To begin with, for the conference we have read the opinions of Jefferson and Hamilton on Hamilton's First US Bank, which Hamilton persuaded Washington to approve. That was an interesting argument because it showed Hamilton to be clearly in favor of the modern liberal position about government: that it should exercise its powers to promote the public good. The argument turned on the clause giving the Congress the power to pass laws "necessary and proper" to carry out its enumerated powers, which included, of course, raising taxes and borrowing money. Jefferson (and Madison, in Congress) took a very strict and suspicious view of this clause, arguing that since the government could borrow money without a national bank, it was not necessary, and thus, not allowed by the Constitution. Hamilton on the other hand argued that the national bank would be able to borrow more cheaply and efficiently, thus contributing to the nation's financial health and prosperity, and that this was more than enough to make it "necessary and proper" to the carrying out of the government's enumerated functions.The great arguments over New Deal legislation were not all that different, and the argument over the health care law isn't either.
At bottom, that argument comes down to one's view of government: is it a necessary evil whose functions must be as limited as possible, or is it potentially an engine of good, which can increase the security, the prosperity, and yes, even the liberty of its citizens? Jefferson, the Republicans of the Gilded Age, 20th-century Southern Democrats (for the most part) and the modern Republican Party hold the former view; Hamilton, the two Roosevelts, Wilson, Truman, Kennedy and Johnson held the latter. The question that we spent some time on was whether the Constitution takes sides in this debate, and it is my firm belief that it does not. The "necessary and proper clause" allows for either interpretation, and thus guarantees in practice that the people and their elected representatives will interpret it according to their beliefs, the particular situation they face, and the distribution of political power at any particular moment. That has been the essence of our democracy for more than 200 years and it so remains, even though I regret to say that my side of the argument seems to be losing at the moment.
As for health care, I have begun to think that we shall never make real progress until we clearly define it not as a consumer good, but as a public necessity. We accept that we cannot use the market to provide us with an army and navy, or police forces, or roads and bridges, and thus in theory at least we try to provide those things with maximum efficiency and with the lowest cost. When we view health care in the same way--as something necessary both to individuals and to society as a whole--we will be able to make a whole series of difficult decisions relatively easily. Whether we will be forced into that decision any time soon I do not know. I am sad that President Obama did not take this aspect of the question on.
To begin with, for the conference we have read the opinions of Jefferson and Hamilton on Hamilton's First US Bank, which Hamilton persuaded Washington to approve. That was an interesting argument because it showed Hamilton to be clearly in favor of the modern liberal position about government: that it should exercise its powers to promote the public good. The argument turned on the clause giving the Congress the power to pass laws "necessary and proper" to carry out its enumerated powers, which included, of course, raising taxes and borrowing money. Jefferson (and Madison, in Congress) took a very strict and suspicious view of this clause, arguing that since the government could borrow money without a national bank, it was not necessary, and thus, not allowed by the Constitution. Hamilton on the other hand argued that the national bank would be able to borrow more cheaply and efficiently, thus contributing to the nation's financial health and prosperity, and that this was more than enough to make it "necessary and proper" to the carrying out of the government's enumerated functions.The great arguments over New Deal legislation were not all that different, and the argument over the health care law isn't either.
At bottom, that argument comes down to one's view of government: is it a necessary evil whose functions must be as limited as possible, or is it potentially an engine of good, which can increase the security, the prosperity, and yes, even the liberty of its citizens? Jefferson, the Republicans of the Gilded Age, 20th-century Southern Democrats (for the most part) and the modern Republican Party hold the former view; Hamilton, the two Roosevelts, Wilson, Truman, Kennedy and Johnson held the latter. The question that we spent some time on was whether the Constitution takes sides in this debate, and it is my firm belief that it does not. The "necessary and proper clause" allows for either interpretation, and thus guarantees in practice that the people and their elected representatives will interpret it according to their beliefs, the particular situation they face, and the distribution of political power at any particular moment. That has been the essence of our democracy for more than 200 years and it so remains, even though I regret to say that my side of the argument seems to be losing at the moment.
As for health care, I have begun to think that we shall never make real progress until we clearly define it not as a consumer good, but as a public necessity. We accept that we cannot use the market to provide us with an army and navy, or police forces, or roads and bridges, and thus in theory at least we try to provide those things with maximum efficiency and with the lowest cost. When we view health care in the same way--as something necessary both to individuals and to society as a whole--we will be able to make a whole series of difficult decisions relatively easily. Whether we will be forced into that decision any time soon I do not know. I am sad that President Obama did not take this aspect of the question on.
Saturday, January 07, 2012
How Colleges Admit
It comes as something of a shock to one like myself who has spent his entire adult life in higher education to discover how our top institutions actually work, and, critically, what they value. To be sure, I have always been a somewhat naive idealist about higher education, and I have been away from traditional university life for most of the last twenty years, and away from big-time academia since 1980. Still I have continued to follow what has gone on and for some time I cherished the forlorn hope that I might return. Now, thanks to a remarkable book by a sociologist and fellow Harvard grad named Jerome Karabel called The Chosen,, I understand how I got into big-time academia in the first place, how my classmates did, and a lot more besides.
Karabel's work is more institutional history than traditional sociology. It came out in 2005 and should have gotten a lot more attention than it did, but it's very long, detailed, and carefully researched, and few people, including reviewers, take the time to read such books any longer. I have to admit that I haven't read all of it yet. It covers essentially the whole of the twentieth century, but I focused on the period 1920-1990, roughly. It deals fairly equally with Harvard, Yale and Princeton, whose policies differed in many ways. I'm going to spend most of my time on the discussion of Harvard, which has consistently cultivated an image as a meritocratic institution. Karabel shows that that image is largely false--and false in different ways than I realized.
In the late 19th and very early twentieth centuries, Harvard was mainly a preserve of the WASP establishment, drawing heavily for its student body on the new New England private schools like Groton, St. Paul's and St. Mark's, as well as the larger and slightly more democratic ones like Andover and Exeter. This Yankee stock was leavened by some bright local boys, including my grandfather, Harvard '09, a graduate of Lexington High School, and Joseph P. Kennedy, a bright young Irishman from East Boston. It also included a miscellaneous selection of bright young men from all over the country. This was the work of Charles W. Eliot, probably the greatest of Harvard Presidents, whose tenure included most of Progressive era. In
1908, his last year in office, 45% of freshmen came from public school and 9% and 7% of them were Catholic and Jewish, respectively. Eliot put by far the highest value on intellectual ability and even quarreled with his most famous alumnus, Theodore Roosevelt, over the value of football. But he was the exception, and his successor, Abbot Lawrence Lowell,saw things very differently. Lowell's tenure coincided with another fateful development: the production of a large new class of bright young men, immigrants from Eastern and Southern Europe, many of them Jews, who were congregating in large eastern cities and graduating from outstanding high schools. In fact, by 1920 Columbia was already known within the Ivy League as a school that had ruined itself by admitting so many Jews that the better sort of gentile no longer wanted to attend it.
Lowell, who was personally responsible for the execution of Sacco and Vanzetti, which he recommended in 1927 to Governor Alvin Fuller, determined that Harvard should not suffer a similar fate. One fascinating thing about The Chosen is the degree to which even in the 1920s, overt, public ethnic prejudice was no longer tolerated, perhaps because millions of young men had just been drafted for the First World war. Lowell had to be coy about what he was doing, and he encountered plenty of opposition within and outside Harvard, but he devised a clever strategy which, with modifications, has been the key to Ivy League admissions policy ever since. By defining the ideal Harvard man not as an intellectual, but as a well-rounded gentleman combining brains with athletic ability, public-spiritedness, and mysterious, intangible qualities of character, Lowell provided his admissions officers with everything they needed to shape incoming classes to their liking And this they did. (Curiously, Lowell's idea of the ideal Harvard man was quite similar to Cecil Rhodes's desiderata for the recipients of his Oxford scholarships for Americans, Germans, and Commonwealth students.) In 1925, in the midst of Lowell's tenure, the freshman class was at least 28% Jewish--almost three times the proportion of Yale freshmen and almost ten times the percentage of Princeton frosh. But by 1933 (when James Bryant Conant took over as President) the percentage of Jewish freshman at Harvard was down to 12%. One casualty of this new policy, I am almost certain, was my own father, a Jewish graduate of New Utrecht High School in Brooklyn in 1930. He was evidently informed that he had done poorly on the math exam, but he was the salutatorian of his class and I frankly doubt that was the reason. On the other hand, had he been admitted, you would be doing something else at this moment, because had he not gone to the University of Wisconsin instead he would never have met my mother, whose Harvard- and Radcliffe-educated parents had settled in Madison in the 1930s.
Now it became somewhat easier for Jews to enter Harvard after the Second World War, although their numbers from the leading competitive high schools in the country, particularly Bronx Science and Stuyvesant in New York and Central High in Philadelphia, had to be severely restricted. But what is most striking about the many arguments over admissions during the 1950s and well into the 1960s, when I arrived myself (in 1965), is the continuing anti-intellectualism of most admissions officers and much of the higher administration. Again and again some one would ask whether Harvard wanted to be the American Ecole Normale--the elite national French school that trains lycee teachers--and again and again, the answer was a resounding no. Bright boys, it was said, suffered from all sorts of social disabilities, and in any case few of them ascended to the highest leadership positions in our society. (France may indeed remain unique in this respect: several "grandes ecoles" train most of the French elite, and it is my understanding that consistent, top quality academic performance remains the only way to get into them. It shows.) Carabel has a lot of data about the consequences of this policy, which was designed both to limit the number of Jews and to maintain Harvard's relationship with elite boarding schools. And here is where I got a real shock.
I went to a good private school myself, Loomis as it was then, north of Hartford, Connecticut. Loomis was not in the same league as Andover or Exeter, but it was relatively cheap, cheap enough for the average New England professional family to afford, and one-third of its students were day students, most of them from the best-off and brightest families in West Hartford. Loomis was a Yale feeder, not a Harvard one. Checking the 100 or so students in my yearbook, I find 9 who went to Yale and 5 who went to Harvard. Four of the Harvard admits, including myself, were academic standouts. Yet as I look back on it, Harvard used leadership criteria at Loomis as well. The President of the Student Council and the President of the Senior Class were almost automatic admits for Harvard, although in my year neither one decided to take advantage of the opportunity.
In any case, when I got to Harvard, various elements of my environment had brainwashed me to believe that the private school kids were, on the whole, a little smarter. Carabel has statistics showing how wrong I was. The majority of the admits from private schools--and this may even have included the two best, Andover and Exter--would have had no chance making it in from public school based on their academics. This was especially true of those from the smaller schools known collectively as "St. Grottlesex," including St. Paul's, Middlesex, and Groton, many of whom had SATs in the 1100-1200 range. Harvard was, in short, still cultivating its relations with the elite, and with alumni--largely for financial, as well as social reasons.
Did things change in the late 1960s? Yes and no. On the one hand, the civil rights movement led to an attempt to raise black admits (about 35 out of 1500 in my freshman year) to their proportion in the population, and pressure to admit more Hispanics and Asians followed. That did not however reflect any attempt to improve the overall intellectual level of the class, but rather an attempt to widen the elite which Harvard was training, partly as a matter of social justice and partly as an adjustment to new political realities. Indeed, the Asians seem to have posed a problem similar to the Jews half a century earlier--as the university admitted to the US civil rights commission in the mid-1980s, were admissions based purely on intellectual ability, there would have been more of them, not fewer.
Karabel's book, in my opinion, missed one important part of the story. While he makes it clear that all the big three catered shamelessly to the social and economic elite, he treats this mainly as a matter of "legacy" admissions, that is, the admission of children of prominent alumni. I think he missed something else: a weakness for the children of the political, cultural and economic elite, whether they had any previous ties to the admitting school or not. Karabel spends some time on the case of George W. Bush, Andover '64, Yale '68, making clear that he would never have been admitted to Yale (or probably, to Andover) but for his family connections. But he says nothing about Al Gore, a classmate of mine whom I knew as a freshman in Economics 1, and who I have plenty of reason to believe would never have been admitted had his father not been a U.S. Senator. Thus the 2000 election pitted a Yale grad against a Harvard grad--neither of whom could have gotten in on their own merits, a pattern that continued when they embarked upon their poltiical careers. This was the theme of a book by Daniel Golden, The Price of Admission: How America's Ruling Class Buys Its Way into Elite Colleges -- and Who Gets Left Outside the Gates, which appeared just a year after Karabel's. Focusing on Harvard, Brown, and Duke, Golden showed what an extraordinary advantage both celebrity children and the children of wealthy families had. Even if they have never given substantial amounts to the admitting institution, that institution is willing to bet that they will.
My own experience with universities, of course, has been of a different kind--and thus the book left me with a somewhat different insight. Clearly our top universities cater to, perpetuate, and to some degree diversify our elites--but what, exactly, does this have to do with their original educational mission? In short, it occurred to me that universities that do not primarily value intellectual ability in picking their students would find it very easy to downgrade pure intellectual ability among their faculty, as well. It has been my experience that that is, indeed, the case.
Karabel's work is more institutional history than traditional sociology. It came out in 2005 and should have gotten a lot more attention than it did, but it's very long, detailed, and carefully researched, and few people, including reviewers, take the time to read such books any longer. I have to admit that I haven't read all of it yet. It covers essentially the whole of the twentieth century, but I focused on the period 1920-1990, roughly. It deals fairly equally with Harvard, Yale and Princeton, whose policies differed in many ways. I'm going to spend most of my time on the discussion of Harvard, which has consistently cultivated an image as a meritocratic institution. Karabel shows that that image is largely false--and false in different ways than I realized.
In the late 19th and very early twentieth centuries, Harvard was mainly a preserve of the WASP establishment, drawing heavily for its student body on the new New England private schools like Groton, St. Paul's and St. Mark's, as well as the larger and slightly more democratic ones like Andover and Exeter. This Yankee stock was leavened by some bright local boys, including my grandfather, Harvard '09, a graduate of Lexington High School, and Joseph P. Kennedy, a bright young Irishman from East Boston. It also included a miscellaneous selection of bright young men from all over the country. This was the work of Charles W. Eliot, probably the greatest of Harvard Presidents, whose tenure included most of Progressive era. In
1908, his last year in office, 45% of freshmen came from public school and 9% and 7% of them were Catholic and Jewish, respectively. Eliot put by far the highest value on intellectual ability and even quarreled with his most famous alumnus, Theodore Roosevelt, over the value of football. But he was the exception, and his successor, Abbot Lawrence Lowell,saw things very differently. Lowell's tenure coincided with another fateful development: the production of a large new class of bright young men, immigrants from Eastern and Southern Europe, many of them Jews, who were congregating in large eastern cities and graduating from outstanding high schools. In fact, by 1920 Columbia was already known within the Ivy League as a school that had ruined itself by admitting so many Jews that the better sort of gentile no longer wanted to attend it.
Lowell, who was personally responsible for the execution of Sacco and Vanzetti, which he recommended in 1927 to Governor Alvin Fuller, determined that Harvard should not suffer a similar fate. One fascinating thing about The Chosen is the degree to which even in the 1920s, overt, public ethnic prejudice was no longer tolerated, perhaps because millions of young men had just been drafted for the First World war. Lowell had to be coy about what he was doing, and he encountered plenty of opposition within and outside Harvard, but he devised a clever strategy which, with modifications, has been the key to Ivy League admissions policy ever since. By defining the ideal Harvard man not as an intellectual, but as a well-rounded gentleman combining brains with athletic ability, public-spiritedness, and mysterious, intangible qualities of character, Lowell provided his admissions officers with everything they needed to shape incoming classes to their liking And this they did. (Curiously, Lowell's idea of the ideal Harvard man was quite similar to Cecil Rhodes's desiderata for the recipients of his Oxford scholarships for Americans, Germans, and Commonwealth students.) In 1925, in the midst of Lowell's tenure, the freshman class was at least 28% Jewish--almost three times the proportion of Yale freshmen and almost ten times the percentage of Princeton frosh. But by 1933 (when James Bryant Conant took over as President) the percentage of Jewish freshman at Harvard was down to 12%. One casualty of this new policy, I am almost certain, was my own father, a Jewish graduate of New Utrecht High School in Brooklyn in 1930. He was evidently informed that he had done poorly on the math exam, but he was the salutatorian of his class and I frankly doubt that was the reason. On the other hand, had he been admitted, you would be doing something else at this moment, because had he not gone to the University of Wisconsin instead he would never have met my mother, whose Harvard- and Radcliffe-educated parents had settled in Madison in the 1930s.
Now it became somewhat easier for Jews to enter Harvard after the Second World War, although their numbers from the leading competitive high schools in the country, particularly Bronx Science and Stuyvesant in New York and Central High in Philadelphia, had to be severely restricted. But what is most striking about the many arguments over admissions during the 1950s and well into the 1960s, when I arrived myself (in 1965), is the continuing anti-intellectualism of most admissions officers and much of the higher administration. Again and again some one would ask whether Harvard wanted to be the American Ecole Normale--the elite national French school that trains lycee teachers--and again and again, the answer was a resounding no. Bright boys, it was said, suffered from all sorts of social disabilities, and in any case few of them ascended to the highest leadership positions in our society. (France may indeed remain unique in this respect: several "grandes ecoles" train most of the French elite, and it is my understanding that consistent, top quality academic performance remains the only way to get into them. It shows.) Carabel has a lot of data about the consequences of this policy, which was designed both to limit the number of Jews and to maintain Harvard's relationship with elite boarding schools. And here is where I got a real shock.
I went to a good private school myself, Loomis as it was then, north of Hartford, Connecticut. Loomis was not in the same league as Andover or Exeter, but it was relatively cheap, cheap enough for the average New England professional family to afford, and one-third of its students were day students, most of them from the best-off and brightest families in West Hartford. Loomis was a Yale feeder, not a Harvard one. Checking the 100 or so students in my yearbook, I find 9 who went to Yale and 5 who went to Harvard. Four of the Harvard admits, including myself, were academic standouts. Yet as I look back on it, Harvard used leadership criteria at Loomis as well. The President of the Student Council and the President of the Senior Class were almost automatic admits for Harvard, although in my year neither one decided to take advantage of the opportunity.
In any case, when I got to Harvard, various elements of my environment had brainwashed me to believe that the private school kids were, on the whole, a little smarter. Carabel has statistics showing how wrong I was. The majority of the admits from private schools--and this may even have included the two best, Andover and Exter--would have had no chance making it in from public school based on their academics. This was especially true of those from the smaller schools known collectively as "St. Grottlesex," including St. Paul's, Middlesex, and Groton, many of whom had SATs in the 1100-1200 range. Harvard was, in short, still cultivating its relations with the elite, and with alumni--largely for financial, as well as social reasons.
Did things change in the late 1960s? Yes and no. On the one hand, the civil rights movement led to an attempt to raise black admits (about 35 out of 1500 in my freshman year) to their proportion in the population, and pressure to admit more Hispanics and Asians followed. That did not however reflect any attempt to improve the overall intellectual level of the class, but rather an attempt to widen the elite which Harvard was training, partly as a matter of social justice and partly as an adjustment to new political realities. Indeed, the Asians seem to have posed a problem similar to the Jews half a century earlier--as the university admitted to the US civil rights commission in the mid-1980s, were admissions based purely on intellectual ability, there would have been more of them, not fewer.
Karabel's book, in my opinion, missed one important part of the story. While he makes it clear that all the big three catered shamelessly to the social and economic elite, he treats this mainly as a matter of "legacy" admissions, that is, the admission of children of prominent alumni. I think he missed something else: a weakness for the children of the political, cultural and economic elite, whether they had any previous ties to the admitting school or not. Karabel spends some time on the case of George W. Bush, Andover '64, Yale '68, making clear that he would never have been admitted to Yale (or probably, to Andover) but for his family connections. But he says nothing about Al Gore, a classmate of mine whom I knew as a freshman in Economics 1, and who I have plenty of reason to believe would never have been admitted had his father not been a U.S. Senator. Thus the 2000 election pitted a Yale grad against a Harvard grad--neither of whom could have gotten in on their own merits, a pattern that continued when they embarked upon their poltiical careers. This was the theme of a book by Daniel Golden, The Price of Admission: How America's Ruling Class Buys Its Way into Elite Colleges -- and Who Gets Left Outside the Gates, which appeared just a year after Karabel's. Focusing on Harvard, Brown, and Duke, Golden showed what an extraordinary advantage both celebrity children and the children of wealthy families had. Even if they have never given substantial amounts to the admitting institution, that institution is willing to bet that they will.
My own experience with universities, of course, has been of a different kind--and thus the book left me with a somewhat different insight. Clearly our top universities cater to, perpetuate, and to some degree diversify our elites--but what, exactly, does this have to do with their original educational mission? In short, it occurred to me that universities that do not primarily value intellectual ability in picking their students would find it very easy to downgrade pure intellectual ability among their faculty, as well. It has been my experience that that is, indeed, the case.
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