Thursday, July 28, 2005

Oil and Blood - New York Times




OP-ED COLUMNIST
Oil and Blood
By BOB HERBERT
Published: July 28, 2005
It is now generally understood that the U.S.-led war in Iraq has become a debacle. Nevertheless, Iraqis are supposed to have their constitution ratified and a permanent government elected by the end of the year. It's a logical escape hatch for George W. Bush. He could declare victory, as a senator once suggested to Lyndon Johnson in the early years of Vietnam, and bring the troops home as quickly as possible.
His mantra would be: There's a government in place. We won. We're out of there.
But don't count on it. The Bush administration has no plans to bring the troops home from this misguided war, which has taken a fearful toll in lives and injuries while at the same time weakening the military, damaging the international reputation of the United States, serving as a world-class recruiting tool for terrorist groups and blowing a hole the size of Baghdad in Washington's budget.
A wiser leader would begin to cut some of these losses. But the whole point of this war, it seems, was to establish a long-term military presence in Iraq to ensure American domination of the Middle East and its precious oil reserves, which have been described, the author Daniel Yergin tells us, as "the greatest single prize in all history."
You can run through all the wildly varying rationales for this war: the weapons of mass destruction (that were never found), the need to remove the unmitigated evil of Saddam (whom we had once cozied up to), the connection to Al Qaeda (which was bogus), and one of President Bush's favorites, the need to fight the terrorists "over there" so we won't have to fight them here at home.
All the rationales have to genuflect before "The Prize," which was the title of Mr. Yergin's Pulitzer-Prize-winning book.
It's the oil, stupid.
What has so often gotten lost in all the talk about terror and weapons of mass destruction is the fact that for so many of the most influential members of the Bush administration, the obsessive desire to invade Iraq preceded the Sept. 11 attacks. It preceded the Bush administration. The neoconservatives were beating the war drums on Iraq as far back as the late 1990's.
Iraq was supposed to be a first step. Iran was also in the neoconservatives' sights. The neocons envisaged U.S. control of the region (and its oil), to be followed inevitably by the realization of their ultimate dream, a global American empire. Of course it sounds like madness, which is why we should have been paying closer attention from the beginning.
The madness took a Dr. Strangelovian turn in the summer of 2002, before the war with Iraq was launched. As The Washington Post first reported, an influential Pentagon advisory board was given a briefing prepared by a Rand Corporation analyst who said the U.S. should consider seizing the oil fields and financial assets of Saudi Arabia if it did not stop its support of terrorism.
Mercifully the briefing went nowhere. Defense Secretary Donald Rumsfeld said it did not represent the "dominant opinion" within the administration.
The point here is that the invasion of Iraq was part of a much larger, long-term policy that had to do with the U.S. imposing its will, militarily when necessary, throughout the Middle East and beyond. The war has gone badly, and the viciousness of the Iraq insurgency has put the torch to the idea of further pre-emptive adventures by the Bush administration.
But dreams of empire die hard. American G.I.'s are dug into Iraq, and the bases have been built for a long stay. The war may be going badly, but the primary consideration is that there is still a tremendous amount of oil at stake, the second-largest reserves on the planet. And neocon fantasies aside, the global competition for the planet's finite oil reserves intensifies by the hour.
Lyndon Johnson ignored the unsolicited advice of Senator George Aiken of Vermont - to declare victory in Vietnam in 1966. The war continued for nearly a decade. Many high-level government figures believe that U.S. troops will be in Iraq for a minimum of 5 more years, and perhaps 10.
That should be understood by the people who think that the formation of a permanent Iraqi government will lead to the withdrawal of American troops. There is no real withdrawal plan. The fighting and the dying will continue indefinitely.


Thursday, July 07, 2005

Do Tax Cuts for the Wealthy Stimulate Employment? - New York Times

THE centerpiece of the Bush administration's economic policy has been large federal income tax cuts aimed mainly at top earners. These tax cuts account for much of the $2 trillion increase in the national debt projected to occur during the Bush presidency. They prompted a large group of Nobel laureates in economics to issue a statement last year condemning the administration's "reckless and extreme course that endangers the long-term economic health of our nation."

The question of whether to make the tax cuts permanent is still on the Congressional agenda. So it is an opportune moment to examine the president's argument in support of them.

Mr. Bush never pretended that the tax cuts were needed to make life more comfortable for the well to do. After all, with the bulk of all pretax income gains having gone to top earners in recent years, this group has prospered as never before.

Rather, the president portrayed his tax cuts as the linchpin of his economic stimulus package. He argued that because most new jobs are created by small businesses, tax cuts to the owners of those businesses would stimulate robust employment growth. His policy thus rests implicitly on the premise that if business owners could afford to hire additional workers, they would. But whether owners can afford to hire is not the issue. What matters is whether hiring will increase their profits.

The basic hiring criterion, found in every introductory textbook (including those written by the president's own economic advisers), is straightforward: If the output of additional workers can be sold for at least enough to cover their salaries, they should be hired; otherwise not. If this criterion is met, hiring extra workers makes economic sense, no matter how poor a business owner might be. Conversely, if the criterion is not satisfied, hiring makes no economic sense, even for billionaire owners. The after-tax personal incomes of business owners are irrelevant for hiring decisions.

The president's defenders might respond that business owners often need money up front to cover the hiring and training costs incurred before new workers can effectively contribute to extra production. The tax cuts put that money in their pockets. That is true but does nothing to alter the basic hiring rule.

Owners who used their tax cuts to finance the initial costs of new hiring would be acting, in effect, as their own bankers, lending money to themselves in the hope of future returns. The test for whether such internal loans make economic sense is exactly the same as the test for external loans.

A loan from a bank makes sense if the firm's ultimate gain from hiring extra workers is enough to cover not only their salaries but also repayment of the loan plus interest. Internal loans must meet the same standard. They are justified only if the firm's gain from hiring extra workers is enough to cover their salaries and repayment of the loan, including the interest that owners could have earned had they left their tax cuts in the bank. In hiring decisions, the implicit costs of internal loans have exactly the same economic standing as the explicit costs of external loans.

In brief, the president's claim that tax cuts to the owners of small businesses will stimulate them to hire more workers flies in the face of bedrock principles outlined in every introductory economics textbook.

A second way the Bush tax cuts might have stimulated employment is by inducing the wealthy to spend more on consumption. But a large share of the tax windfalls received by the wealthy are not spent in the short run. And even among those who are induced to spend more, the main effect is not increased demand for domestically produced goods and services, but rather increased bidding for choice oceanfront property and longer waiting lists for the new Porsche Carrera GT. Such spending does little to stimulate domestic employment.

Had the dollars required to finance the president's tax cuts been used in other ways, they would have made a real difference. Larger tax cuts for middle- and low-income families, for example, would have stimulated immediate new spending because the savings rates for most of these families are low. And their additional spending would have been largely for products made by domestic businesses - which would have led, in turn, to increased employment.

Grants to cash-starved state and local governments would have prevented layoffs of thousands of teachers and police officers. And many useful jobs could have been created directly. For instance, people could have been hired to scrutinize the cargo containers that currently enter the nation's ports uninspected.

Economists from both sides of the political aisle argued from the beginning that tax cuts for the wealthy made no sense as a policy for stimulating new jobs. And experience has proved them right. Total private employment was actually lower in January 2005 than in January 2001, the first time since the Great Depression that employment has fallen during a president's term of office.


Robert H. Frank, an economist at the Johnson Graduate School of Management at Cornell University, is the author of "Luxury Fever."

Wednesday, July 06, 2005

The New York Review of Books: The New World Order

I have included this essay by Tony Judt because it caused me unprecedented grief. We are watching our Republic being taken over by the twin riders of despotism: religion and militarism. The constraints of religious belief are being sold to us under the guise of freedom to exercise any religion, and the blind conformity of militarism as the supreme form of patriotism. And this is happening on our watch, to increasingly hollow-sounding huzzahs and traditional, beloved patriotic songs. Remember the film Cabaret, that sequence showing the pristine, angelic face of a blond teenager singing longingly of his homeland while the melody slowly morphs into a thumping, syncopated, and deafening Prussian march? These are thoughts for the Fourth of July.
The New York Review of Books: The New World Order

Monday, July 04, 2005

The end of war? by Greg Easterbrook

Daily explosions in Iraq, massacres in Sudan, the Koreas staring at each other through artillery barrels, a Hobbesian war of all against all in eastern Congo--combat plagues human society as it has, perhaps, since our distant forebears realized that a tree limb could be used as a club. But here is something you would never guess from watching the news: War has entered a cycle of decline. Combat in Iraq and in a few other places is an exception to a significant global trend that has gone nearly unnoticed--namely that, for about 15 years, there have been steadily fewer armed conflicts worldwide. In fact, it is possible that a person's chance of dying because of war has, in the last decade or more, become the lowest in human history.

Five years ago, two academics--Monty Marshall, research director at the Center for Global Policy at George Mason University, and Ted Robert Gurr, a professor of government at the University of Maryland--spent months compiling all available data on the frequency and death toll of twentieth-century combat, expecting to find an ever-worsening ledger of blood and destruction. Instead, they found, after the terrible years of World Wars I and II, a global increase in war from the 1960s through the mid-'80s. But this was followed by a steady, nearly uninterrupted decline beginning in 1991. They also found a steady global rise since the mid-'80s in factors that reduce armed conflict--economic prosperity, free elections, stable central governments, better communication, more "peacemaking institutions," and increased international engagement. Marshall and Gurr, along with Deepa Khosla, published their results as a 2001 report, Peace and Conflict, for the Center for International Development and Conflict Management at the University of Maryland. At the time, I remember reading that report and thinking, "Wow, this is one of the hottest things I have ever held in my hands." I expected that evidence of a decline in war would trigger a sensation. Instead it received almost no notice.

"After the first report came out, we wanted to brief some United Nations officials, but everyone at the United Nations just laughed at us. They could not believe war was declining, because this went against political expectations," Marshall says. Of course, 2001 was the year of September 11. But, despite the battles in Afghanistan, the Philippines, and elsewhere that were ignited by Islamist terrorism and the West's response, a second edition of Peace and Conflict, published in 2003, showed the total number of wars and armed conflicts continued to decline. A third edition of the study, published last week, shows that, despite the invasion of Iraq and other outbreaks of fighting, the overall decline of war continues. This even as the global population keeps rising, which might be expected to lead to more war, not less.

In his prescient 1989 book, Retreat from Doomsday, Ohio State University political scientist John Mueller, in addition to predicting that the Soviet Union was about to collapse--the Berlin Wall fell just after the book was published--declared that great-nation war had become "obsolete" and might never occur again. One reason the Soviet Union was about to collapse, Mueller wrote, was that its leaders had structured Soviet society around the eighteenth-century assumption of endless great-power fighting, but great-power war had become archaic, and no society with war as its organizing principle can endure any longer. So far, this theory has been right on the money. It is worth noting that the first emerging great power of the new century, China, though prone to making threatening statements about Taiwan, spends relatively little on its military.

Last year Mueller published a follow-up book, The Remnants of War, which argues that fighting below the level of great-power conflict--small-state wars, civil wars, ethnic combat, and clashes among private armies--is also waning. Retreat from Doomsday and The Remnants of War are brilliantly original and urgent books. Combat is not an inevitable result of international discord and human malevolence, Mueller believes. War, rather, is "merely an idea"-- and a really bad idea, like dueling or slavery. This bad idea "has been grafted onto human existence" and can be excised. Yes, the end of war has been predicted before, prominently by H.G. Wells in 1915, and horrible bloodshed followed. But could the predictions be right this time?

First, the numbers. The University of Maryland studies find the number of wars and armed conflicts worldwide peaked in 1991 at 51, which may represent the most wars happening simultaneously at any point in history. Since 1991, the number has fallen steadily. There were 26 armed conflicts in 2000 and 25 in 2002, even after the Al Qaeda attack on the United States and the U.S. counterattack against Afghanistan. By 2004, Marshall and Gurr's latest study shows, the number of armed conflicts in the world had declined to 20, even after the invasion of Iraq. All told, there were less than half as many wars in 2004 as there were in 1991.

Marshall and Gurr also have a second ranking, gauging the magnitude of fighting. This section of the report is more subjective. Everyone agrees that the worst moment for human conflict was World War II; but how to rank, say, the current separatist fighting in Indonesia versus, say, the Algerian war of independence is more speculative. Nevertheless, the Peace and Conflict studies name 1991 as the peak post-World War II year for totality of global fighting, giving that year a ranking of 179 on a scale that rates the extent and destructiveness of combat. By 2000, in spite of war in the Balkans and genocide in Rwanda, the number had fallen to 97; by 2002 to 81; and, at the end of 2004, it stood at 65. This suggests the extent and intensity of global combat is now less than half what it was 15 years ago.

How can war be in such decline when evening newscasts are filled with images of carnage? One reason fighting seems to be everywhere is that, with the ubiquity of 24-hour cable news and the Internet, we see many more images of conflict than before. As recently as two decades ago, the rebellion in Eritrea occurred with almost no world notice; the tirelessly globe-trotting Robert Kaplan wrote of meeting with Eritrean rebels who told him they hoped that at least spy satellites were trained on their region so that someone, somewhere, would know of their struggle. Today, fighting in Iraq, Sudan, and other places is elaborately reported on, with a wealth of visual details supplied by minicams and even camera-enabled cell phones. News organizations must prominently report fighting, of course. But the fact that we now see so many visuals of combat and conflict creates the impression that these problems are increasing: Actually, it is the reporting of the problems that is increasing, while the problems themselves are in decline. Television, especially, likes to emphasize war because pictures of fighting, soldiers, and military hardware are inherently more compelling to viewers than images of, say, water-purification projects. Reports of violence and destruction are rarely balanced with reports about the overwhelming majority of the Earth's population not being harmed.

Mueller calculates that about 200 million people were killed in the twentieth century by warfare, other violent conflicts, and government actions associated with war, such as the Holocaust. About twelve billion people lived during that century, meaning that a person of the twentieth century had a 1 to 2 percent chance of dying as the result of international war, ethnic fighting, or government-run genocide. A 1 to 2 percent chance, Mueller notes, is also an American's lifetime chance of dying in an automobile accident. The risk varies depending on where you live and who you are, of course; Mueller notes that, during the twentieth century, Armenians, Cambodians, Jews, kulaks, and some others had a far higher chance of death by war or government persecution than the global average. Yet, with war now in decline, for the moment men and women worldwide stand in more danger from cars and highways than from war and combat. World Health Organization statistics back this: In 2000, for example, 300,000 people died in combat or for war-related reasons (such as disease or malnutrition caused by war), while 1.2 million worldwide died in traffic accidents. That 300,000 people perished because of war in 2000 is a terrible toll, but it represents just .005 percent of those alive in that year.

This low global risk of death from war probably differs greatly from most of the world's past. In prehistory, tribal and small-group violence may have been endemic. Steven LeBlanc, a Harvard University archeologist, asserts in his 2003 book about the human past, Constant Battles, that warfare was a steady feature of primordial society. LeBlanc notes that, when the aboriginal societies of New Guinea were first observed by Europeans in the 1930s, one male in four died by violence; traditional New Guinean society was organized around endless tribal combat. Unremitting warfare characterized much of the history of Europe, the Middle East, and other regions; perhaps one-fifth of the German population died during the Thirty Years War, for instance. Now the world is in a period in which less than one ten-thousandth of its population dies from fighting in a year. The sheer number of people who are not being harmed by warfare is without precedent.


Next consider a wonderful fact: Global military spending is also in decline. Stated in current dollars, annual global military spending peaked in 1985, at $1.3 trillion, and has been falling since, to slightly over $1 trillion in 2004, according to the Center for Defense Information, a nonpartisan Washington research organization. Since the global population has risen by one-fifth during this period, military spending might have been expected to rise. Instead, relative to population growth, military spending has declined by a full third. In current dollars, the world spent $260 per capita on arms in 1985 and $167 in 2004.

The striking decline in global military spending has also received no attention from the press, which continues to promote the notion of a world staggering under the weight of instruments of destruction. Only a few nations, most prominently the United States, have increased their defense spending in the last decade. Today, the United States accounts for 44 percent of world military spending; if current trends continue, with many nations reducing defense spending while the United States continues to increase such spending as its military is restructured for new global anti-terrorism and peacekeeping roles, it is not out of the question that, in the future, the United States will spend more on arms and soldiers than the rest of the world combined.

Declining global military spending is exactly what one would expect to find if war itself were in decline. The peak year in global military spending came only shortly before the peak year for wars, 1991. There's an obvious chicken-or-egg question, whether military spending has fallen because wars are rarer or whether wars are rarer because military spending has fallen. Either way, both trend lines point in the right direction. This is an extremely favorable development, particularly for the world's poor--the less developing nations squander on arms, the more they can invest in improving daily lives of their citizens.

What is causing war to decline? The most powerful factor must be the end of the cold war, which has both lowered international tensions and withdrawn U.S. and Soviet support from proxy armies in the developing world. Fighting in poor nations is sustained by outside supplies of arms. To be sure, there remain significant stocks of small arms in the developing world--particularly millions of assault rifles. But, with international arms shipments waning and heavy weapons, such as artillery, becoming harder to obtain in many developing nations, factions in developing-world conflicts are more likely to sue for peace. For example, the long, violent conflict in Angola was sustained by a weird mix of Soviet, American, Cuban, and South African arms shipments to a potpourri of factions. When all these nations stopped supplying arms to the Angolan combatants, the leaders of the factions grudgingly came to the conference table.

During the cold war, Marshall notes, it was common for Westerners to say there was peace because no fighting affected the West. Actually, global conflict rose steadily during the cold war, but could be observed only in the developing world. After the cold war ended, many in the West wrung their hands about a supposed outbreak of "disorder" and ethnic hostilities. Actually, both problems went into decline following the cold war, but only then began to be noticed in the West, with confrontation with the Soviet empire no longer an issue.

Another reason for less war is the rise of peacekeeping. The world spends more every year on peacekeeping, and peacekeeping is turning out to be an excellent investment. Many thousands of U.N., nato, American, and other soldiers and peacekeeping units now walk the streets in troubled parts of the world, at a cost of at least $3 billion annually. Peacekeeping has not been without its problems; peacekeepers have been accused of paying very young girls for sex in Bosnia and Africa, and nato bears collective shame for refusing support to the Dutch peacekeeping unit that might have prevented the Srebrenica massacre of 1995. But, overall, peacekeeping is working. Dollar for dollar, it is far more effective at preventing fighting than purchasing complex weapons systems. A recent study from the notoriously gloomy rand Corporation found that most U.N. peacekeeping efforts have been successful.

Peacekeeping is just one way in which the United Nations has made a significant contribution to the decline of war. American commentators love to disparage the organization in that big cereal-box building on the East River, and, of course, the United Nations has manifold faults. Yet we should not lose track of the fact that the global security system envisioned by the U.N. charter appears to be taking effect. Great-power military tensions are at the lowest level in centuries; wealthy nations are increasingly pressured by international diplomacy not to encourage war by client states; and much of the world respects U.N. guidance. Related to this, the rise in "international engagement," or the involvement of the world community in local disputes, increasingly mitigates against war.

The spread of democracy has made another significant contribution to the decline of war. In 1975, only one-third of the world's nations held true multiparty elections; today two-thirds do, and the proportion continues to rise. In the last two decades, some 80 countries have joined the democratic column, while hardly any moved in the opposite direction. Increasingly, developing-world leaders observe the simple fact that the free nations are the strongest and richest ones, and this creates a powerful argument for the expansion of freedom. Theorists at least as far back as Immanuel Kant have posited that democratic societies would be much less likely to make war than other kinds of states. So far, this has proved true: Democracy-against-democracy fighting has been extremely rare. Prosperity and democracy tend to be mutually reinforcing. Now prosperity is rising in most of the world, amplifying the trend toward freedom. As ever-more nations become democracies, ever-less war can be expected, which is exactly what is being observed.

For the great-power nations, the arrival of nuclear deterrence is an obvious factor in the decline of war. The atomic bomb debuted in 1945, and the last great-power fighting, between the United States and China, concluded not long after, in 1953. From 1871 to 1914, Europe enjoyed nearly half a century without war; the current 52-year great-power peace is the longest period without great-power war since the modern state system emerged. Of course, it is possible that nuclear deterrence will backfire and lead to a conflagration beyond imagination in its horrors. But, even at the height of the cold war, the United States and the Soviet Union never seriously contemplated a nuclear exchange. If it didn't happen then, it seems unlikely for the future.

In turn, lack of war among great nations sets an example for the developing world. When the leading nations routinely attacked neighbors or rivals, governments of emerging states dreamed of the day when they, too, could issue orders to armies of conquest. Now that the leading nations rarely use military force--and instead emphasize economic competition--developing countries imitate that model. This makes the global economy more turbulent, but reduces war.

In The Remnants of War, Mueller argues that most fighting in the world today happens because many developing nations lack "capable government" that can contain ethnic conflict or prevent terrorist groups, militias, and criminal gangs from operating. Through around 1500, he reminds us, Europe, too, lacked capable government: Criminal gangs and private armies roamed the countryside. As European governments became competent, and as police and courts grew more respected, legitimate government gradually vanquished thug elements from most of European life. Mueller thinks this same progression of events is beginning in much of the developing world. Government and civil institutions in India, for example, are becoming more professional and less corrupt--one reason why that highly populous nation is not falling apart, as so many predicted it would. Interstate war is in substantial decline; if civil wars, ethnic strife, and private army fighting also go into decline, war may be ungrafted from the human experience.

Is it possible to believe that war is declining, owing to the spread of enlightenment? This seems the riskiest claim. Human nature has let us down many times before. Some have argued that militarism as a philosophy was destroyed in World War II, when the states that were utterly dedicated to martial organization and violent conquest were not only beaten but reduced to rubble by free nations that initially wanted no part of the fight. World War II did represent the triumph of freedom over militarism. But memories are short: It is unrealistic to suppose that no nation will ever be seduced by militarism again.

Yet the last half-century has seen an increase in great nations acting in an enlightened manner toward one another. Prior to this period, the losing sides in wars were usually punished; consider the Versailles Treaty, whose punitive terms helped set in motion the Nazi takeover of Germany. After World War II, the victors did not punish Germany and Japan, which made reasonably smooth returns to prosperity and acceptance by the family of nations. Following the end of the cold war, the losers--the former Soviet Union and China--have seen their national conditions improve, if fitfully; their reentry into the family of nations has gone reasonably well and has been encouraged, if not actively aided, by their former adversaries. Not punishing the vanquished should diminish the odds of future war, since there are no generations who suffer from the victor's terms, become bitter, and want vengeance.

Antiwar sentiment is only about a century old in Western culture, and Mueller thinks its rise has not been given sufficient due. As recently as the Civil War in the United States and World War I in Europe, it was common to view war as inevitable and to be fatalistic about the power of government to order men to march to their deaths. A spooky number of thinkers even adulated war as a desirable condition. Kant, who loved democracy, nevertheless wrote that war is "sublime" and that "prolonged peace favors the predominance of a mere commercial spirit, and with it a debasing self-interest, cowardice and effeminacy." Alexis De Tocqueville said that war "enlarges the mind of a people." Igor Stravinsky called war "necessary for human progress." In 1895, Oliver Wendell Holmes Jr. told the graduating class of Harvard that one of the highest expressions of honor was "the faith ... which leads a soldier to throw away his life in obedience to a blindly accepted duty."

Around the turn of the twentieth century, a counter-view arose--that war is usually absurd. One of the bestselling books of late-nineteenth-century Europe, Lay Down Your Arms!, was an antiwar novel. Organized draft resistance in the United Kingdom during World War I was a new force in European politics. England slept during the '30s in part because public antiwar sentiment was intense. By the time the U.S. government abolished the draft at the end of the Vietnam War, there was strong feeling in the United States that families would no longer tolerate being compelled to give up their children for war. Today, that feeling has spread even to Russia, such a short time ago a totalitarian, militaristic state. As average family size has decreased across the Western world, families have invested more in each child; this should discourage militarism. Family size has started to decrease in the developing world, too, so the same dynamic may take effect in poor nations.

There is even a chance that the ascent of economics to its pinnacle position in modern life reduces war. Nations interconnected by trade may be less willing to fight each other: If China and the United States ever fought, both nations might see their economies collapse. It is true that, in the decades leading up to World War I, some thought rising trade would prevent war. But today's circumstances are very different from those of the fin de siècle. Before World War I, great powers still maintained the grand illusion that there could be war without general devastation; World Wars I and II were started by governments that thought they could come out ahead by fighting. Today, no major government appears to believe that war is the best path to nationalistic or monetary profit; trade seems much more promising.

The late economist Julian Simon proposed that, in a knowledge-based economy, people and their brainpower are more important than physical resources, and thus the lives of a country's citizens are worth more than any object that might be seized in war. Simon's was a highly optimistic view--he assumed governments are grounded in reason--and yet there is a chance this vision will be realized. Already, most Western nations have achieved a condition in which citizens' lives possess greater economic value than any place or thing an army might gain by combat. As knowledge-based economics spreads throughout the world, physical resources may mean steadily less, while life means steadily more. That's, well, enlightenment.

In his 1993 book, A History of Warfare, the military historian John Keegan recognized the early signs that combat and armed conflict had entered a cycle of decline. War "may well be ceasing to commend itself to human beings as a desirable or productive, let alone rational, means of reconciling their discontents," Keegan wrote. Now there are 15 years of positive developments supporting the idea. Fifteen years is not all that long. Many things could still go badly wrong; there could be ghastly surprises in store. But, for the moment, the trends have never been more auspicious: Swords really are being beaten into plowshares and spears into pruning hooks. The world ought to take notice.

Saturday, June 25, 2005

The Nation | Comment | MIA: News of Prison Toll | Todd Gitlin

The Nation | Comment | MIA: News of Prison Toll | Todd Gitlin

The Nation | Comment | Sins and the Citi | William Greider

The Nation | Comment | Sins and the Citi | William Greider

Cheney says Iraq insurgents are in "last throes"

When rockets fly and battle smoke is thick,
It's good to hear from "Four Deferments Dick."
He's always sure. He knows what warfare is--
Enough to know it's not for him or his.
Insurgents somehow, though they're in the throes,
Kill more GIs--but no one Cheney knows.

The Nation | Subject To Debate | If the Frame Fits... | Katha Pollitt

The Nation | Subject To Debate | If the Frame Fits... | Katha Pollitt

The Nation | Beat The Devil | The History of Smoking Guns | Alexander Cockburn

The Nation | Beat The Devil | The History of Smoking Guns | Alexander Cockburn

A Thirty Years War? - by George Hunsinger

A Thirty Years War? - by George Hunsinger

The Nation | Comment | No Flat World in Europe | Thomas Geoghegan

The Nation | Comment | No Flat World in Europe | Thomas Geoghegan

Three Things About Iraq - New York Times

Three Things About Iraq - New York Times

Saturday, June 18, 2005

Come on, which part don't you understand?

Subject: President Bush Explains His Social Security Plan

WOMAN IN AUDIENCE: I don't really understand. How is the new plan
going to fix the problem?

PRESIDENT BUSH: "Because the -- all which is on the table begins to
address the big cost drivers. For example, how benefits are calculated,
for example, is on the table. Whether or not benefits rise based upon
wage increases or price increases. There's a series of parts of the
formula that are being considered. And when you couple that, those
different cost drivers, affecting those -- changing those with personal
accounts, the idea is to get what has been promised more likely to be
-- or closer delivered to that ! has been promised. Does that make any
sense to you?

It's kind of muddled. Look, there's a series of things that cause the
--like, for example, benefits are calculated based upon the increase of wages, as opposed to the increase
of prices. Some have suggested that we calculate -- the benefits will
rise based upon inflation, posed to wage increases. There is a reform
that would help solve the red if that were put into effect. In other
words, how fast benefits grow, how fast the promised benefits grow, if
those -- if that growth is affected, it will help on the red."

Guardian Unlimited | Special reports | Revealed: how oil giant influenced Bush

Lies have short legs, used to say my mother. So now from Britain comes this insight on the composition of the energy task force that Cheney so zealously wants to keep undisclosed. We knew that big corporations slept in the Lincoln bedroom, but this report from the British Guardian shows how EXXON advised the White House on energy policy. Condoleeza Rice is a shareholder in Texaco, so we now know why all of them want nothing to do with Kyoto, or want to hear about global warming, world oil production peaking or any scenario that does not depict massive oil production and energy consumption for ever. We suspected as much, but we are moving towards certainty. This Administration is wrong on energy policy as it is on almost everything else. As we say in Spain: "Let God catch me duly confessed!". Guardian Unlimited | Special reports | Revealed: how oil giant influenced Bush

Friday, June 17, 2005

Don't Follow the Money - New York Times

Memory being what it is, ergo wishy-washy, who remembers exactly what happened at Watergate? And as they often say on TV, what year did it happen? Was it 1922, 1972 or 1865? After the disgraceful reemergence of Mr. Colson, the indicted and jailed Nixon aide, Frank Rich draws parallels to to-day's crimes and cover-ups: "In the most recent example, all the president's men slimed and intimidated Newsweek by accusing it of being an accessory to 17 deaths for its errant Koran story; led by Scott McClellan, they said it was unthinkable that any American guard could be disrespectful of Islam's holy book. These neo-Colsons easily drowned out Gen. Richard Myers, the chairman of the Joint Chiefs of Staff, and Afghanistan's president, Hamid Karzai, both of whom said that the riots that led to the 17 deaths were unrelated to Newsweek. Then came the pièce de résistance of Nixon mimicry: a Pentagon report certifying desecrations of the Koran by American guards was released two weeks after the Newsweek imbroglio, at 7:15 p.m. on a Friday, to assure it would miss the evening newscasts and be buried in the Memorial Day weekend's little-read papers.

At other times the new Colsons top the old one. Though Nixon aspired to punish public broadcasting by cutting its funding, he never imagined that his apparatchiks could seize the top executive positions at the Corporation for Public Broadcasting. Nor did he come up with the brilliant ideas of putting journalists covertly on the administration payroll and of hiring an outside P.R. firm (Ketchum) to codify an enemies list by ranking news organizations and individual reporters on the basis of how favorably they cover a specific administration policy (No Child Left Behind). President Bush has even succeeded in emasculating the post-Watergate reform that was supposed to help curb Nixonian secrecy, the Presidential Records Act of 1978." Read on
Don't Follow the Money - New York Times

What's the Matter With Ohio? - New York Times

What's the Matter With Ohio? - New York Times

Thursday, June 09, 2005

The Nation | Article | Urban Archipelago | John Nichols

The Nation | Article | Urban Archipelago | John Nichols

The Nation | Article | Cities: The Vital Core | Joel Rogers

the cities as spawning ground of the new progressive thinking: a novel idea: This week The Nation, the most interesting newsweekly being published now, examines what is happening in the cities, as a counterweight to the rural, each person for her/himself culture that now contaminates Government thinking. City living is more energy efficient, condos offer a low-maintenance lifestyle that will stand us in good stead in the coming future of energy scarcity in an oil-depleted world.
The Nation | Article | Cities: The Vital Core | Joel Rogers

Sunday, May 22, 2005

Decoding Health Insurance - New York Times

Decoding Health Insurance - New York Times

Guardian Unlimited | In the belly of the beast

And here is also an old friend of ours, our regional celebrity, Scott Ritter, on the Galloway story. Enjoy! Guardian Unlimited | Guardian daily comment | In the belly of the beast

Guardian Unlimited | Hell is 57 varieties

If you spend useless hours in the supermarket aisle trying to decide what pasta sauce you would like to pour over your spaghetti tonight (they all taste like curdled brick powder anyway) or sit fretting in a restaurant chair trying to hide your shame behind the grease-spotted newspaper-sized menu, this article is for you, from our friends, The Guardian.
Guardian Unlimited | Guardian daily comment | Hell is 57 varieties

Guardian Unlimited | Guardian daily comment | The ouster of democracy

Guardian Unlimited | Guardian daily comment | The ouster of democracy

Guardian Unlimited | Guardian daily comment | The unknown unknowns of the Abu Ghraib scandal

Hey, it has been a long time that I have blogged Seymour Hersh. But, yes, he is alive and kickin' albeit from the other side of the pond. This good piece is from the Guardian.
The Guardian also, commenting on the Galloway (you remember him, the UK politician accused of having profited from the oil for food program in Iraq?) deposition in the Senate, depicts him as an underdog maverick on a mission to show up the pompousness and hollowness of American politicians and journalists. In an unquoted (by both the Washington Post and The New York Times) he states to have met Saddam Hussein about as often as Donald Rumsfeld, who also sold him arms.
replyGuardian Unlimited | Guardian daily comment | The unknown unknowns of the Abu Ghraib scandal

It's All Newsweek's Fault - New York Times

It's All Newsweek's Fault - New York Times

China, the World's Capital - New York Times

China, the World's Capital - New York Times

Saturday, May 14, 2005

The Vatican's Sin of Omission - New York Times

The Vatican's Sin of Omission - New York Times

Read Bob Herbert: The Young and the Jobless



OP-ED COLUMNIST
The Young and the Jobless
By BOB HERBERT
Published: May 12, 2005
There were high fives at the White House last week when the latest monthly employment report showed that 274,000 jobs had been created in April, substantially more than experts had predicted.
The employment bar has been set so low for the Bush administration that even a modest gain is cause for celebration. But we shouldn't be blinded by the flash of last Saturday's headlines. American workers, especially younger workers, remain stuck in a gloomy employment landscape.
For example, a recent report from the Center for Labor Market Studies at Northeastern University in Boston tells us that the employment rate for the nation's teenagers in the first 11 months of 2004 - just 36.3 percent - was the lowest it has ever been since the federal government began tracking teenage employment in 1948.
Those 20 to 24 years old are also faring poorly. In 2000, 72.2 percent were employed during a typical month. By last year that percentage had dropped to 67.9 percent.
Even the recent modest surge in jobs has essentially bypassed young American workers. Gains among recently arrived immigrants seem to have accounted for the entire net increase in jobs from 2000 through 2004.
Over all, only workers 55 and up have done reasonably well over the past few years. "Younger workers," said Andrew Sum, the center's director, "have just been crushed."
Whatever the politicians and the business-booster types may be saying, the simple truth is that there are not nearly enough jobs available for the many millions of out-of-work or underworked men and women who need them. The wages of those who are employed are not even keeping up with inflation.
Workers have been so cowed by an environment in which they are so obviously dispensable that they have been afraid to ask for the raises they deserve, or for their share of the money derived from the remarkable increases in worker productivity over the past few years. And from one coast to the other, workers have swallowed draconian cuts in benefits with scarcely a whimper.
Some segments of the population have been all but completely frozen out. In Chicago, only one of every 10 black teenagers found employment in 2004. In Illinois, fewer than one in every three teenage high school dropouts are working.
Last month's increase of 274,000 jobs was barely enough to keep up with the increase in the nation's working-age population.
"The economy is growing and real output is up," said Mr. Sum, who is also a professor at Northeastern. "But the distribution of income, in terms of how much is going to workers - well, the answer is very little has gone to the typical worker."
The squeeze on the younger generation of workers is so tight that in many cases the young men and women of today are faring less well than their parents' generation did at a similar age. Professor Sum has been comparing the standard of living of contemporary families with that of comparable families three decades ago.
"Two-thirds of this generation are not living up to their parents' standard of living," he said.
College graduates today are doing better in real economic terms than college graduates in the 1970's. But everyone else is doing less well. "If you look at families headed by someone without a college degree," said Professor Sum, "their income last year in real terms was below that of a comparable family in 1973. For dropouts it's like 25 percent below where it was. And for high school grads, about 15 to 20 percent below."
It shouldn't be surprising that the standard of living of large segments of the population is sinking when employers have all the clout, including the powerful and unwavering support of the federal government. Workers can't even get a modest increase in the national minimum wage.
Globalization was supposed to be great for everyone. Nafta was supposed to be a boon. Increased productivity was supposed to be the ultimate tool - the sine qua non - for raising the standard of living for all.
Instead, wealth and power in the United States has become ever more dangerously concentrated, leaving an entire generation of essentially powerless workers largely at the mercy of employers.
A remark by Louis Brandeis comes to mind: "We can have democracy in this country, or we can have great wealth concentrated in the hands of a few. But we can't have both."
E-mail: bobherb@nytimes.com

I want my safety net!

COVER STORY

"I Want My Safety Net"
Why so many Americans aren't buying into Bush's Ownership Society

George Silli, a 66-year-old waiter from suburban Philadelphia, had a brush with President Bush's Ownership Society, and it was an experience he'll not soon forget. Silli's psyche and his wallet still bear the scorch marks of the 2000 market meltdown. He saw the value of his mutual funds drop by 60% and is convinced that opening Social Security to individual investing would produce similar results on a massive scale. ``If people are left to their own devices, we'll become top-heavy with poor people,'' Silli says.

A political independent, Silli has learned enough about the market to be pessimistic about a small fry's chances. He not only wants to leave Social Security alone but also thinks politicians should expand entitlements by mandating near-universal health insurance as a shield against soaring medical bills.

Although Silli may not know it, he has plenty of company from all walks of American life. He's part of a diverse group that includes the pathologically risk-averse and those who are willing to take the Ownership Society for a spin -- as long as it's equipped with air bags.

April Tsirigotis, a 30-year-old Republican and an information technology executive from Lusby, Md., is a big fan of the President and applauds his efforts to solve Social Security's fiscal woes. But, says Tsirigotis, the divorced mother of a 7-year-old, ``I disagree with the idea of giving people private accounts in which their annual returns and their eventual benefits would be based on the stock market. It's too risky. No one knows how much will be there in the end.''

While many members of Safety Net Nation have nothing against investing and choice, they're worried that the country's web of public and private social protections is fraying. They believe in more, not fewer, safeguards against downward mobility in a world that's already pulsing with economic uncertainty. Safety Netters include plenty of card-carrying Republicans and independent swing voters, and the group may represent a broader swath of America than the White House imagines.

A Sept. 2-5, 2004, survey by the Civil Society Institute, a Newton Centre (Mass.) nonprofit group, found 67% of Americans think it's a good idea to guarantee health care for all U.S. citizens, as Canada and Britain do, with just 27% dissenting. Support for a government-directed universal insurance system is strong, despite GOP warnings about socialized medicine. Similarly, a Feb. 3-5 Washington Post/Kaiser Family Foundation poll found that 47% of respondents believe the government ought to guarantee a minimum standard of living for retirees, vs. 35% who felt that was an individual's responsibility.

The most predictable members of Safety Net Nation are liberals who favor activist government. The really crucial bloc, however, is made up of those who backed Bush in 2004. They still approve of his overall job performance but have soured on Wall Street and dislike the President's approach to Social Security. This faction -- estimates range from 17% to 22% of the electorate -- rejects both traditional liberalism and conservative laissez-faire. In an era of rampant job insecurity, when employer-provided pensions and health coverage can no longer be taken for granted, they want a middle-class security blanket that gives them protection as they build wealth.

Stretched Thin
Safety netters' fear of social unraveling comes amid some disquieting trends. Big swings in family income, according to studies by Yale University political scientist Jacob S. Hacker, have increased markedly over the past two decades as the finances of two-earner households have been stretched thin. Even houses -- most Americans' entrée to the Ownership Society -- are increasingly in hock: In the past 15 years, mortgage and home-equity borrowing has risen from 35.1% of home values to 43.9%. That has made families, especially those with unskilled workers, more vulnerable to a catastrophic jolt such as job loss or serious illness. Personal bankruptcies increased fivefold from 1980 to 2002, with many filers citing a layoff or medical emergency as the tipping point.

As income volatility has grown, government -- prodded by free-market Republicans out to reverse the New Deal -- has been offloading ever more responsibility onto individuals. The financial pressure has become much more acute because of another squeeze occurring in the private sector. Corporations vying to compete globally have steadily shifted costs and responsibility for pensions and health care to their employees as part of the restructuring wave that began in the 1970s.

The Sellathon That Didn't
Conservatives see disentitlement as a recognition of new economic realities -- and the death rattle of the Nanny State. But skeptics, among them prominent New Democratic thinkers, counter that America's safety net can be both modern and market-based without piling still more financial burdens onto the stooped shoulders of Joe and Jane Average.

Because social engineering through tax breaks, preferential loan and savings plans, and other indirect subsidies favors those with good jobs and income to invest, New Democrats advocate policies that tilt savings incentives toward lower-income Americans. They include universal 401(k)s, compulsory savings plans set up for kids, and mandated social insurance -- a subsidized rainy-day fund for financial emergencies. Hacker is working on ``a kind of catastrophic insurance plan that could be administered by the private sector but heavily regulated by the government.'' Employers would be required to match employee contributions to the new financial umbrella. The price tag, he concedes, ``would not be trivial'' -- meaning a multibillion-dollar commitment.

Conservatives dismiss such proposals as security pie-in-the-sky. But they've got their own problems in the here and now trying to generate momentum for personal accounts and other becalmed elements of the Bush ownership initiative.

The centerpiece is an audacious bid to ``modernize'' the government's retirement system by letting workers divert part of their payroll taxes into stocks and bonds. On the road, Bush tells audiences he's selling a retirement iPod -- sleek, shiny, and designed for the Digital Age -- while Democrats cling to a system as retro as an LP record. Besides, he says, the downside of personal accounts will be limited. Those who opt in will have a carefully chosen range of investment options, selections modeled on conservative fund choices found on 401(k) menus.

Trouble is, the President, in his guise as Salesman-in-Chief, may have done too good a job raising alarms about Social Security's imminent implosion. ``Bush said, 'We're going to have a crisis,' and offered private accounts as part of the solution,'' says James K. Glassman, an American Enterprise Institute scholar. ``But the two things are really separate, and the President was never able to make a connection between them.'' What's more, the crisis-mongering only served to heighten anxiety among the risk-averse cohort.

Bush made an overture to critics on Apr. 28 when he offered to protect payouts for the poor. His idea: preserve the current benefit structure for the bottom third of wage earners while progressively reducing guaranteed payments for those up the income scale. The result is a means-tested version of Social Security. But despite such gambits, the President has little to show for a 60-day national sellathon that took him to 23 states. If Congress enacts Social Security reform this year, it could be a far cry from reformers' dreams of big private accounts carved out of payroll taxes. ``Bush will come out of this with something, some change or other that allows him to say he moved the ball,'' predicts pollster John Zogby. ``But it won't be what he wanted.''


Down on Wall Street
Objectively, this is not a bad time to be raising the issue of reform. Baby boomers are about to retire en masse and on paper, family balance sheets have improved. Americans' household wealth has floated upward of late, propelled by recovering stock valuations and soaring real estate values. Moreover, real wages for the civilian workforce have grown 8% in the past decade after a long stretch when they fell. And the family poverty rate, tallied at 10% in 2003, has improved from the 13.9% numbers recorded four decades earlier.

Still, what private-account backers seem to have misjudged is the public's current jaundiced view of Wall Street and investing risk. America, unlike most other advanced nations, has a dual welfare system. There are direct government-transfer payments to the poor and elderly -- programs such as Medicare, Medicaid, food stamps, and Temporary Assistance for Needy Families. But there is also a huge set of private-sector protections for workers, largely underwritten by employers -- items such as subsidized life insurance, disability coverage, and help with day care. Plus, powerful groups in society snare subsidies in the form of preferential loans offered to farmers, disaster relief, tax-deductible flood insurance for beachfront property owners, and a fistful of tax breaks for small businesspeople.

While federal spending on the safety net for the poor has grown briskly, it hasn't kept pace with society's needs. Medicare is straining to cover seniors' bills, and some states are downsizing Medicaid programs. In 1996, strict time limits were put on welfare dependency, a step that slashed the rolls by half. Meantime, huge holes have been ripped in the private safety net as the cost shift to workers has accelerated.

The result is riskophobia. ``With a far greater portion of family budgets devoted to the mortgage, car payment, and health insurance, a transitory shock to wages becomes much more menacing,'' says Raj Chetty, a University of California at Berkeley economics professor who studies risk. ``Equities are seen as risky, and if people aren't jumping for the investment option [as part of Social Security reform], there's a reason. Risk in general has become a much more pervasive issue.''

In January, 2000, before the dot-com bubble burst, 67% of Americans said that if they had $1,000 to spare, investing it in stock would be a good idea, according to the Gallup Poll. By April, 2005, that percentage had fallen to 45%, with 51% saying the stock market would be a bad choice. Among the groups whose faith in the market dipped most are three key Bush constituencies: baby boomers, college grads, and suburbanites.


Chasing Gushers
To George W. Bush, a Texan who revels in the myth of the wildcatter, running risks in pursuit of the big gusher is a quintessential part of the American character. But as the scion of an aristocratic Eastern dynasty, the budding young tycoon always had a network of family friends and relations to call on. Those golden connections bailed George W. out of his early forays into the oil business.

The not-as-well-fixed Net Setters want some bedrock guarantees in turbulent times, too. Private Social Security accounts? Sure, in addition to core benefits. Portable medical savings accounts? Fine, but not as a replacement for employer-provided health insurance. ``They want the Ownership Society -- but they want it with a warranty,'' says Representative Rahm Emanuel (D-Ill.), who has introduced legislation to expand tax credits for lower-tier families and to make college savings easier.

According to a BusinessWeek analysis of data compiled by the Pew Research Center for the People & the Press, at the core of Safety Net Nation are white men. You read that right. These are the same white-male swing voters who have been trending strongly Republican in recent Presidential contests. They tend to be socially conservative and patriotic. They have average incomes and are slightly less educated than the citizenry as a whole.

The Safety Netters are not monolithic, however. They include aging men who are suspicious of Big Government and Big Business and who view private accounts as a giveaway to Wall Street and a gamble for their children and grandchildren. There are suburban Security Moms -- convinced by Bush that Uncle Sam should aggressively protect them from terrorists and cultural pollution -- who worry that the President is making retirement dicier. And there are the burned investors of the Baby Boom generation, who want some government safeguards from the serrated edge of globalism -- from corporate downsizing to vaporware pensions and rampant outsourcing.

Bush über-strategist Karl Rove, who commands the White House's Social Security war room, sees personal accounts as vital to shifting the allegiance of younger voters to the GOP. But there's a glitch in Rove's machine: Polls show that, rather than flocking to Bush over Social Security, the under-40s are growing skeptical of his approach.

Among those resisting a Bush move to pare middle-class entitlements are thirtysomethings who feel squeezed between saving for their kids' college education and taking care of retired or soon-to-retire parents. Then there are disillusioned techies who once wanted government to get out of the way and let them get rich by age 30 but who now favor a federal role in shielding them from the excesses of capitalism.

Put these pieces of the electorate together, and you have the makings of a political boulder that stands between Bush and his shining city on Ownership Hill. ``We are now living in the Security Society,'' says independent pollster Thomas H. Riehle. ``People say, 'Protect me.'''

If the President can't win over some of these skeptics, GOP knees will continue to buckle on Capitol Hill. More important, other elements of his agenda, from new savings plans to personal health-care accounts, could be imperiled by the flight to safety. ``If Social Security reform stalls, blood will be in the water,'' warns Daniel J. Mitchell, a senior fellow at the conservative Heritage Foundation. ``Democrats fighting for what I prefer to call the Dependency Society will be emboldened to oppose all of Bush's ownership agenda.''

To complicate the President's push for private accounts, the performance of stocks in what was supposed to be a sprightly spring has led to more skepticism. In April, the Dow Jones industrial average hit a new low for the year on stagflation worries, and the major indexes gave up most of their '05 gains as investors fled from risk.

``Bush's timing is not good,'' notes Eva Bertram, a political scientist at the University of California at Santa Cruz. ``The public is leery of becoming more dependent on the market, and there is great anxiety over employment prospects and stagnant incomes. Right now it's just very hard to give up the security offered by things like Social Security and traditional Medicare.''

Shifting the Risk
Democratic pollster Stanley B. Greenberg is more blunt. ``I never believed this Investor Class hype for a minute,'' he says. ``What happened is that Bush gave the nation an extended tutorial on risk, and that came on top of growing awareness of the risk shift from private institutions to individuals'' as both traditional pensions and 401(k)s fell short of offering true security. The result, Greenberg's data show, ``is a collapse in support for Social Security reform.''

What the White House proposes, in fairness, is not a complete swap of a public retirement supplement for a private one. Bush says that letting workers voluntarily set aside a chunk of their payroll taxes -- say, 4 points of the 12.4% tax -- in conservative investment options will let retirees reap a richer reward than the government system's puny 2% return. But if guaranteed benefits are slashed for the middle class and above, more Americans will be drawn into private accounts to make up the difference, changing the nature of Social Security. ``The plan does have a guarantee in it in the form of the core benefit,'' says Kent Smetters, a Wharton School associate professor and former Bush Treasury official. ``Since it's only partial privatization, Bush needs to play up the safety net angle.''

The model for private accounts is the 401(k) system of workplace savings. But critics claim Bush is overselling the ability of such self-directed plans to build a nest egg. Former Clinton economist Alicia H. Munnell, director of Boston College's Center for Retirement Research and an expert on 401(k)s, says the numbers don't bode well for Social Security.

Skimpy Savings
Munnell's research shows that 26% of eligible people never opt in to 401(k)s, fewer than half of the participants take the advice of financial planners and diversify their holdings between stocks and bonds, and 55% cash out their savings when they change jobs -- which is frequently. Models project that a median-wage worker contributing 6% of pay, plus a 3% employer match, should have about $300,000 in his 401(k) as he approaches retirement. The actual figure: $42,000.

``People have not done a very good job with 401(k)s, and it weighs on them,'' Munnell says. ``I don't see any sign that they're dying to take on still more of this kind of responsibility. The Social Security debate may be testing the limit of the swing to individualism we have seen for the last 20 to 30 years.''

To the counter-reformers who believe Bush is misguided in his ownership strategy, the question is not whether to kill off market-based measures that aim to increase family savings or health-care security. It's how to use markets and choice in a more effective way.

Democrats would keep core Social Security intact but are willing to augment it with an add-on investment option. ``If the President says individual accounts would be separate from Social Security and was willing to make the financing of reform progressive, he could get Democrats to sit down, and [he would] have a shot,'' says Gene Sperling of the Center for American Progress, a Democratic think tank. ``If he wants to start down the slippery slope toward privatization, why should we work toward goals that are the antithesis of what Democrats believe in?''

Other Dems are more forgiving. ``The President has the right idea to strive and make more people own more of America,'' says Ray Boshara, director of the asset-building program at the New America Foundation (NAF), a centrist think tank. ``Owners are better citizens. But we need to preserve the safety net while helping people build wealth.''

The NAF is pushing two pet ideas: a tax-favored savings account for every child, seeded with a $500 grant at birth and with government subsidies for low-income kids, and an option for taxpayers to direct the IRS to channel part of their tax refunds into savings accounts. If savings can be made automatic, backers claim, taxpayers are less likely to spend refunds.

An Elemental Struggle
The ``kid-save'' idea is no pipe dream. An early fan was former Bush Treasury Secretary Paul H. O'Neill, and conservatives such as Senator Rick Santorum (R-Pa.) are mulling legislation to create the accounts. Projected cost over 10 years: $38 billion.

Yale political scientist Hacker and economist Peter R. Orszag of the Brookings Institution are thinking on a larger scale. Hacker's plan for a universal family savings account is being fleshed out and is scheduled to be unveiled in August. ``You have to provide workers with a basic form of protection that follows them from job to job and covers big risks,'' Hacker says. Universal insurance would be regulated by the government, and employers would have to kick in mandated matching payments. But administration of accounts would be left to the private sector.

Not so long ago, Republican economists would have been delighted to hear political rivals floating ideas for boosting savings and shoring up Social Security's solvency. But in today's hyper-partisan climate, the fight over the ownership agenda has taken on a larger dimension. Bush wants to wind down dependence on the bureaucratic welfare state. Democrats want to revalidate government by weaving costly new safety nets for workers. It's an elemental struggle, but one in which outcomes can be perverse.

In 2003, for instance, the White House set out to revamp Medicare by putting a lid on runaway costs of the huge entitlement program for seniors. GOP lawmakers, though, feared they would be hammered over the issue in the '04 election, so tough cost controls went out the window. What Bush wound up signing into law still has many conservatives seething: a $1.3 trillion expansion of entitlements in the form of a new Medicare prescription-drug benefit. It was hardly the monument he envisioned. But it was a testament to the raw power of Safety Net Nation, which -- for now -- seems to be just saying no to more financial risk.


By Lee Walczak and Richard S. Dunham, with Mike McNamee in Washington and Ann Therese Palmer in Chicago


Copyright 2005, by The McGraw-Hill Companies Inc. All rights reserved.
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United's Pension Debacle - New York Times

United's Pension Debacle - New York Times

Friday, May 13, 2005

Bush asked to explain British memo of 2002


Bush asked to explain UK war memo

Thursday, May 12, 2005 Posted: 2:49 AM EDT (0649 GMT)

WASHINGTON (CNN) -- Eighty-nine Democratic members of the U.S. Congress last week sent President George W. Bush a letter asking for explanation of a secret British memo that said "intelligence and facts were being fixed" to support the Iraq war in mid-2002.
The timing of the memo was well before the president brought the issue to Congress for approval.
The Times of London newspaper published the memo -- actually minutes of a high-level meeting on Iraq held July 23, 2002 -- on May 1.

British officials did not dispute the document's authenticity, and Michael Boyce, then Britain's Chief of Defense Staff, told the paper that Britain had not then made a decision to follow the United States to war, but it would have been "irresponsible" not to prepare for the possibility.
The White House has not yet responded to queries about the congressional letter, which was released on May 6.
The letter, initiated by Rep. John Conyers, ranking member of the House Judiciary Committee, said the memo "raises troubling new questions regarding the legal justifications for the war as well as the integrity of your own administration..."
"While various individuals have asserted this to be the case before, including Paul O'Neill, former U.S. Treasury Secretary, and Richard Clarke, a former National Security Council official, they have been previously dismissed by your administration," the letter said.
But, the letter said, when the document was leaked Prime Minister Tony Blair's spokesman called it "nothing new."
In addition to Blair, Foreign Secretary Jack Straw, Defense Secretary Geoff Hoon, Attorney General Peter Goldsmith, MI6 chief Richard Dearlove and others attended the meeting.
A British official identified as "C" said that he had returned from a meeting in Washington and that "military action was now seen as inevitable" by U.S. officials.
"Bush wanted to remove Saddam, through military action, justified by the conjunction of terrorism and WMD. But the intelligence and facts were being fixed around the policy.
"The NSC had no patience with the U.N. route, and no enthusiasm for publishing material on the Iraqi regime's record. There was little discussion in Washington of the aftermath after military action."
The memo further discussed the military options under consideration by the United States, along with Britain's possible role.
It quoted Hoon as saying the United States had not finalized a timeline, but that it would likely begin "30 days before the U.S. congressional elections," culminating with the actual attack in January 2003.
"It seemed clear that Bush had made up his mind to take military action, even if the timing was not yet decided," the memo said.
"But the case was thin. Saddam was not threatening his neighbors, and his WMD capability was less than that of Libya, North Korea or Iran."
The British officials determined to push for an ultimatum for Saddam to allow U.N. weapons inspectors back into Iraq to "help with the legal justification for the use of force ... despite U.S. resistance."
Britain's attorney general, Peter Goldsmith, advised the group that "the desire for regime change was not a legal base for military action" and two of three possible legal bases -- self-defense and humanitarian intervention -- could not be used.
The third was a U.N. Security Council resolution, which Goldsmith said "would be difficult."
Blair thought that "it would make a big difference politically and legally if Saddam refused to allow in the U.N. inspectors."
"If the political context were right, people would support regime change," the memo said.
Later, the memo said, Blair would work to convince Bush that they should pursue the ultimatum with Saddam even though "many in the U.S. did not think it worth going down the ultimatum route."

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A Time Warner Company. All Rights Reserved.

Tuesday, May 10, 2005

Now they tell us!!!

April 29, 2005

National Briefing | Washington: About Those Weapons



George J. Tenet, former director of central intelligence, said he regretted assuring President Bush in 2002 that he had ''slam dunk'' evidence that Iraq had unconventional weapons. ''Those were the two dumbest words I ever said,'' Mr. Tenet told 1,300 people at a Kutztown University forum Wednesday in Kutztown, Pa. The theory was a leading justification for the war in Iraq. Such weapons were not found.



Copyright 2005 The New York Times Company | Permissions | Privacy Policy

Stranger Than Fiction - New York Times

Stranger Than Fiction - New York Times

The Final Insult - New York Times

The Final Insult - New York Times

Saturday, May 07, 2005

The Gravest Generation - New York Times

Günter Grass, the German novelist, reflects on the realities of the modern world in which Germany and us are immersed, and, incidentally, or not so incidentally, on the role of government. Are the economic pressures in the world really irresistible or are they only so portrayed by the now dominant ideology? Please note the contrast between the reconstruction of Germany "In the rebuilding phase businessmen were exemplary in investing every penny of profit into job creation.", and the present situation in East Germany where" West German industry and banks withheld the necessary investment and loans and, consequently, no jobs were created." He asks the decisive question :" As conscious democrats, we should freely resist the power of capital, which sees mankind as nothing more than something which consumes and produces."
The Gravest Generation - New York Times

A Serious Drug Problem - New York Times

A Serious Drug Problem - New York Times

Thursday, May 05, 2005

How conveniently they forget!

Stephen Zunes writes: Amid the blare of the Bush Administration's alarms about Iran's alleged nuclear weapons capabilities, few remember that the United States, from the Eisenhower through the Carter presidencies, played a major role in the development of Iran's nuclear program. In 1957 the United States and Iran signed their first civil nuclear cooperation agreement. Over the next two decades, the United States not only provided Iran with technical assistance but supplied the country with its first experimental nuclear reactor, complete with enriched uranium and plutonium with fissile isotopes. Despite the refusal of the Shah to rule out the possibility of Iran's developing nuclear weapons, the Ford Administration in 1975 approved the sale of up to eight nuclear reactors with fuel to Iran and, in 1976, approved the sale of lasers believed to be capable of enriching uranium. The Washington Post reported that an initially hesitant President Ford was assured by his advisers that Iran was interested only in the peaceful uses of nuclear energy. Ford's Defense Secretary was Donald Rumsfeld, his Chief of Staff was Dick Cheney and his man in charge of nonproliferation efforts at the Arms Control and Disarmament Agency was Paul Wolfowitz.

Wednesday, May 04, 2005

V. Media Credibility Declines: News Audiences Increasingly Politicized

V. Media Credibility Declines: News Audiences Increasingly Politicized

The New York Times > Opinion > Editorial: An Unrealistic 'Real ID'

The New York Times > Opinion > Editorial: An Unrealistic 'Real ID'

The New York Times > Opinion > Op-Ed Columnist: A Gut Punch to the Middle

The New York Times > Opinion > Op-Ed Columnist: A Gut Punch to the Middle

The New York Times > Opinion > Op-Ed Columnist: Laura Bush Talks Naughty

The New York Times > Opinion > Op-Ed Columnist: Laura Bush Talks Naughty

Where is the outrage?, By Mark Shields

WHERE THE HELL IS THE OUTRAGE?

by Mark Shields

I cannot recall being this angry.

On Tuesday, April 25, Michael Moss' superb story about E Company of the First Marine Division, which during its six-month stay in Ramadi last year had more than one-third of its 185 troops either wounded or killed -- the highest casualty rate of any unit in Iraq -- was on the front page of The New York Times. It is a story about the extraordinary courage of the young Marines of E Company, both enlisted and officers, and about the cowardly callousness of this nation's civilian and military leadership.

The Marines of E Company were assigned the task by their superiors of rooting out one of Iraq's most determined insurgencies. They endured 26 firefights, 90 mortar attacks and more than 90 homemade bombs. The Marines were sent on this deadly mission into the jaws of Hell in unarmored Humvees. U.S. defense spending for this year is already $ 501 billion -- which is more than the total spent by the next 25 countries of the world -- and American heroes in Iraq are forced to scrounge for scrap metal to make more safe the unarmored vehicles that carry them into combat.

Even though Moss' story about E Company was on the front page of what is called the nation's most influential newspaper, as of this writing, there has not been one word spoken by any of the 535 members of Congress in public debate expressing outrage, demanding answers from the secretary of defense, or the Joint Chiefs of Staff, or the man in the White House. If any of the syndicated talk-show hosts who endorsed the invasion of Iraq has even mentioned the tragic subject, I have missed it.

Ten times in the last year alone, the Pentagon has changed its orders for Humvees. Here we are in the third year of the war, spending a half a trillion dollars on national defense, and American soldiers and Marines face enemy machine guns, bombs and, yes, death in unarmed vehicles. Doesn't that make you angry?

To compound the betrayal of the men of E Company who have risked their careers by publicly speaking about the cobbled-together armor that did not save their comrades, Capt. Kelly D. Royer, the company commander, is paying the price for his candor about his men's safety. His fitness report of May 31, 2004, concluded, "He has single-handedly reshaped a company in sore need of a leader; succeeded in forming a cohesive fighting force that is battle-tested and worthy." But after confronting the brass about the shortages threatening his men, Royer's superiors found him to be "dictatorial," with "no morale or motivation in his Marines." To put it bluntly, Royer is almost surely being railroaded out of the Marine Corps he has served so bravely. Why is there no outrage?

Where is the anger of all those stateside patriots with their "Support Our Troops" decals on their SUVs and Old Glory pins on their tailored lapels? Are they too busy fighting for the preservation of their share of the wartime tax-cuts? Does any of them really give a damn whose brother, whose father, whose husband, whose son because of negligent lack of protection will be next to die?

Lance Cpl. Rafael Reynosa from Santa Ana, Calif., whose wife was expecting twins and PFC. Cody S. Calavan, 19, from Lake Stevens, Wis., both of E Company, were killed last May 29 in an unarmored Humvee on a highway in Ramadi by explosives. Their families were not famous. They were not Rangers or Pioneers, did not make "soft money" contributions or "summer" in Kennebunkport or Nantucket. They were American heroes, and their lives mattered to those they loved -- and their lives ought to matter to the leaders and people of the nation for which they gave them.

Our outrage -- or the continued lack thereof -- will tell us all we need to know about who we really are and what we truly value.

To find out more about Mark Shields, and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate web page at www.creators.com.

Tuesday, April 26, 2005

Reform Is Good, But PSAs Are Not So Good

By ARTHUR LEVITT JR.
Mr. Levitt is a former chairman of the SEC.
April 26, 2005; 

President Bush's proposal to create private savings accounts out of traditional Social Security has inflamed political passions on both sides of the aisle. One perspective, however, has been shortchanged in debate: Although this may be the single biggest change in a generation in how Americans save for retirement, few have looked at the plan through the eyes of the investor.

One of the most remarkable developments that I have witnessed over my 40 years working in and around Wall Street -- a trend I saw accelerate during my tenure at the SEC -- was the opening up of our capital markets and the accompanying potential for wealth creation to millions of Americans. The president's Personal Savings Account plan promises to give millions more the opportunity to join this investor class. It stands to boost overall financial literacy and could encourage Americans to invest and save more.

But as any financial planner will tell you before committing to any investment option, a plan needs to be judged ultimately by its risks, its potential returns, and how the mix of the two fit the goals of an investor. As currently structured, the PSA plan avoids some of the pitfalls seen when the U.K. undertook a similar reform almost two decades ago. In particular, by limiting investment options and placing its administration in the hands of the federal government, this plan would curb the potential for excessive fees, fraud, and shady sales practices. In addition, by making the default investment for these accounts a life-cycle fund that is both diversified and adjusted to reflect an investor's changing tolerance for risk over their lifetime, the PSA plan decreases the likelihood that novice investors will make spectacularly bad choices.

Yet there are other, more fundamental, aspects of the PSA proposal's structure that merit serious concerns: The funds deposited in a PSA account are not free money. Every dollar you take out of traditional Social Security and put into a PSA must be paid back out of your Social Security benefit -- plus interest. If this sounds a lot like margin investing, it should not be a surprise since the PSA plan is modeled on that concept: A worker investing in a PSA would hope -- like a margin investor -- that assets accrued were greater than debts (money lent plus interest). If not, he would end up with a smaller Social Security benefit than if he stayed in the traditional system. To come out ahead, then, an investor would have to earn a rate of return that exceeds the interest of the loan, plus expenses.

Could one make this return within an acceptable degree of risk? According to a study by Robert Shiller of Yale, the answer is: not that often. Using adjusted stock market data to reflect the expected decreases in future market rates of return, he found that investors would do worse in the default life-cycle portfolio of the PSA accounts than in traditional Social Security 71% of the time, leaving an average worker with $2,000 less in annual benefits. Even if one opted out of the default and decided to invest entirely in stocks, this riskier strategy would not guarantee coming out ahead: Prof. Shiller predicts a worker would lose money 33% of the time.

Borrowing against one's Social Security to invest in the markets is a risky strategy that would only make sense for certain high net-worth investors who can afford to lose their entire investment. Prof. Shiller's calculations demonstrate that for the majority of workers who make less than $50,000 a year, the PSA is not a good investment not just because the odds of coming out behind are high, but also because these investors very likely may have nothing to fall back on if they lose that money.

While I do not think that his PSA plan is a good deal for investors, opponents must give President Bush credit for bringing this discussion about Social Security's future to the fore. There is a long-term financing problem, and we should make the tough decisions now so our children won't have to. We also should follow his call to encourage Americans to save and invest more, and there are steps we can take to do this that do not imperil Social Security's solvency:

• First, by switching the default option for 401(k) participation to automatic enrollment, we could boost participation in these plans to between 85% and 95%. Also, we can steer workers out of risky and costly investments and boost retirement savings for millions by setting the default investments for 401(k) plans to low-cost, diversified index funds -- a smart way to begin.
 
• Second, for those who are not offered 401(k)s, the IRS should permit taxpayers to split their tax refund into more than one account. As the Brookings Institution's Retirement Security Project notes, with the average tax refund amounting to about $2,000 or 5% of median income, refunds can be a large source of savings. Right now, taxpayers can have the IRS directly deposit a refund into one bank account. Yet, many people need a portion of this money immediately so they choose to save none of it in a retirement account. By allowing taxpayers to split their refunds, we would enable them to deposit a portion in a checking account to cover immediate expenses and a portion in a tax-preferred savings account for retirement.
 
• Third, Congress should make it easier for companies to provide unbiased, third-party financial education. Currently, most employers avoid giving investment advice in order to avoid exposing themselves to fiduciary liability. Congress should explore clarifying the provisions of the Erisa law to encourage employers to provide much-needed, non-conflicted investment advice.
 
These proposals to boost retirement savings enjoy bipartisan support. Congress should move on solutions such as these, and then work on a separate track with the administration to devise a plan of sensible changes -- such as increasing wages subject to the Social Security tax, adding newly hired state and local workers to the Social Security system, or improving the long-term fiscal health of the country -- that can guarantee Social Security's solvency for decades to come.

I have spent a good deal of my life encouraging Americans to become investors, yet I don't believe Social Security is the way to do so. For me, this is a financial question as much as it is a philosophical one. As a society, are we prepared to replace the basic, guaranteed retirement benefit of Social Security with the potential of greater risk and -- to be fair -- greater reward of an investment account? Let's keep Social Security intact, and at the same time, encourage more Americans to invest for their retirements. We can do both.

The Post-Star :: Local News

The Post Star of Glens Falls was also there. The Post-Star :: Local News

Albany, N.Y. -- timesunion.com

More on Social Security, this time local. The Saratoga Springs town meeting was a big success with 125 attendees, standing room only. The only empty chair was on stage, and reserved for Congressman Sweeney, District 20, who did not make an appearance. This is what the Albany Times Union had to say about it.
Albany, N.Y. -- timesunion.com

Sunday, April 24, 2005

The New York Times > Business > Your Money > Economic View: Private Accounts, and Priorities

More on the Social Security privatization proposal, and a good phrase: "Leave Huge Debts Behind". The New York Times > Business > Your Money > Economic View: Private Accounts, and Priorities

The New York Times > Opinion > Op-Ed Columnist: A High-Tech Lynching in Prime Time

Separation of Church and State, the basis of a healthy democracy because it avoids tilting the playing field towards the oppression of some over very divisive questions of belief, is being obviously subverted by opportunistic and coldly calculating politicians a la Bill Frist. As Bernard Henry Lévy reminded us in this month's Atlantic Monthly, the American people are entering the field of religious strife that the Europeans had put behind them a couple of centuries ago. Today's Frank Rich column is juicy and to the point. The New York Times > Opinion > Op-Ed Columnist: A High-Tech Lynching in Prime Time

The Observer | Review | My heartlands

From England this portrait of the Tony Blair Labour achievements. I have included it because this lady has a way with words. At turns sarcastic, nostalgic and matter-of-fact, the scenes are vivid and compelling. Some of our illusions get lost in the reading: man is not good to man when desperate and good supervision, even if draconian, will improve the Hobbesian picture of life. The Observer | Review | My heartlands

Saturday, April 23, 2005

The New York Times > Opinion > Op-Ed Columnist: Passing the Buck

Today, Paul Krugman explains why our medical system is so expensive comnpared to everybody else's. Private insurance based, the administrators are not concerned with the efficient delivery of care, but in risk avoidance, i.e. how to deny coverage to the most sick people. As a result the medical practitioner's daily battle is not with germs and disease, but with the insurance company.
Who said that the great virtue of entrepreneurship is the willingness to take risks?
The New York Times > Opinion > Op-Ed Columnist: Passing the Buck

Thursday, April 21, 2005

Guardian Unlimited | Life | The end of oil is closer than you think

If $2 per gallon gas has not shaken you yet, you better tighten your seat belt and start spitting into your gas tank, hoping the car will keep running. Of course it is not only your car you should be worrying about, but your heating and air conditioning, the saran wrap around your food, the coating on your surfboard, and yes, all the plastic gadgets that go into your body and health care.Guardian Unlimited | Life | The end of oil is closer than you think

The Nation | Column | The Rise of Disaster Capitalism | Naomi Klein

When Paul Wofowitz was tapped to go to the World Bank, many of us saw it as "kick upstairs" for the inaccurate and unsuccesful policies leading to the Iraq debacle. However Naomi Klein disabuses us: Wolfowitz is only off to his next vision, an effort to finance the capitalistic rebuilding of disaster areas under the cloak of altruism. Once more the little people, fishermen, peasants, providentially ruined by the December tsunami, will now be pushed off their lands and shores to make way for resorts and shrimp farms, reshaping the coasts of Indonesia into playgrounds for tourists and international capital. Read on.... The Nation | Column | The Rise of Disaster Capitalism | Naomi Klein

Friday, April 15, 2005

The New York Times > Opinion > Op-Ed Columnist: Bush Disarms, Unilaterally

Today's NYT has two columns that address two aspects of the same problem. As Friedman points out "It's as if we have an industrial-age presidency, catering to a pre-industrial ideological base, in a post-industrial era.". That the US standing, in anything but its military capacities, is plummeting in reference of the rest of the industrial world does not seem to concern President Bush, who feels, like General Franco before him, answerable only "to God and to History". While Bush spends political capital on privatizing Social Security, an ideological goal if there ever was one, many of the problems of adjusting our society to the needs of the post-industrial age go unattended. The country seems all effervescent about gay marriage, but unconcerned about the high poverty rate. This administration has grabbed all slogans, any slogans, to misrepresent the fact that its policies are regressive and not in the public interest. Elected representatives, like Tom Delay, put bluster before honesty. Not that there never was corruption in high places before, but the brazenness is prodigious. How long will it take before the backlash comes?
The New York Times > Opinion > Op-Ed Columnist: Bush Disarms, Unilaterally

The New York Times > Opinion > Op-Ed Columnist: The Medical Money Pit

The New York Times > Opinion > Op-Ed Columnist: The Medical Money Pit
We are so proud of our health care system! Or at least that is what we are told. Yet, as Krugman points out, we spend close to double what other advanced economies do, per capita, and our results are much inferior to theirs. Manufacturers in the USA are at a competitive disadvantage because they cover their employees' health through the present, insurance run, system. GM has such health liabilities that, if the present cost run-up continues, it will have to make a choice between not providing any company paid health insurance to its employees and retirees, or to go out of business.
But the Bush administration keeps focussing on the much less dire predicament of Social Security. This, the most ideological and partisan of Administrations, does not care about finding solutions to problems, but wants only to shape an ideologically correct way to run the country into the ground.
That's what I think.