I watched two older men (late 40s early 50s, older than me) while I sat at McDonalds for lunch. They could be described as maybe a homosexual, liberal, artsy set (well kept hair, not a business style of hair, well kept skin, unusual jewelry including a thumb ring, tattoos) or just very unique. What caught my eye initially, though, was the fact that both men ordered happy meals. They sat next to a father (older, also, possibly grandfather), with two young (under seven) children. The men compared their toys, then handed them to the kids at the next table. A small act of kindness in a world that often overlooks such acts. All of this made me think, from a sociological perspective, how we try so hard to catalogue, place, and fit others into boxes that we construct in our minds. We have a need to label and understand, even if this really doesn’t help our understanding. What box would I put them into? I wish I had the guts to approach them and ask to take their photo. I wish I had the guts to talk to people. I am terrified of the phone, and stumble through small talk with people. I am the poster child for dramaturgy (look it up in the text book). I would love to have posted their photo and asked what stood out in this photo. By the time I worked up some nerve to stand up (a couple with a baby carrier needed to sit down, and I was in the handicap seat), the men had finished, and were heading to their car. They got in a truck (veers away from liberal, although it wasn’t a super duty) and the passenger (the younger looking) put out a plastic powerade bottle beneath the car, littering (obviously, not too green). I guess that breaks the easy liberal stereotype. Boxes aren’t so easy to fill we find, or we should realize. Soon, I hope to have the courage to document tattoos and piercings that interest me as I see them in the world. If I find the courage.
Saturday, August 14, 2010
Monday, May 17, 2010
Men and War
Why Men Love War
The reasons and causes—territory, ideology, WMDs—may change with the times, but our lust for it is eternal.
By Evan Thomas NEWSWEEK
Published Apr 30, 2010
From the magazine issue dated May 10, 2010
Theodore Roosevelt wanted a war, and almost any war would do. In 1886, when he was a 27-year-old gentleman rancher in the Dakota Territory, he proposed raising "some companies of horse riflemen out here in the event of trouble with Mexico." He wrote his friend Congressman Henry Cabot Lodge: "Will you telegraph me at once if war becomes inevitable?" In 1889, while agitating for military "preparedness," he wrote British diplomat Cecil Spring-Rice: "Frankly, I don't know if I should be sorry to see a bit of a spar with Germany; the burning of New York and a few other seacoast cities would be a good object lesson on the need of an adequate system of coastal defenses." Roosevelt loved hyperbole, but he was apparently serious. He wrote Spring-Rice, "While we would have to take some awful blows at first, I think in the end we would worry the Kaiser a little." A few years later, in 1894, he wrote a family friend, Bob Ferguson, that he longed for "a general national buccaneering expedition to drive the Spanish out of Cuba, the English out of Canada."
In my new book, The War Lovers, I tell this story—of Roosevelt, and of how we became involved in the Spanish-American War—as a way of understanding the ancient pull of the battlefield. I was, in part, trying to understand my own attitude on the Iraq War. As a NEWSWEEK journalist writing about that conflict (from a safe distance), I had initially been hawkish, then regretful as the costs mounted. The war may, in some muddled way, achieve some of its objectives, but it is clear that too many journalists, including me, caught at least a mild dose of war fever between 9/11 and the 2003 invasion of Iraq. I looked to the past to come to terms with those impulses.
Now we're almost a decade into "the Long War," as some call our engagement in Iraq and Afghanistan and the ongoing struggle with Islamic extremism. A kind of war weariness has set in. To most people the fighting seems far off and, in a way, easy to ignore. Not coincidentally, perhaps, a recent spate of books and movies has arrived seeking to make graphic and realistic the true experience of war, most notably the Oscar-winning film The Hurt Lockerand War, the Sebastian Junger volume of war reportage we excerpted in the previous article. These are cautionary tales that seek to make us understand and remember. They may for a time dampen the age-old atavistic lust for war, though war fever, I believe, never really goes away. It is too fundamental to the male psyche.
Roosevelt was a true war lover. Whether he was trying to compensate for his beloved father, who bought a draft substitute in the Civil War, or because, as he often wrote, he feared that the Anglo-Saxon "race" was becoming "overcivilized" and weak, Roosevelt wanted to test himself in the crucible of battle. He got his wish on July 1, 1898, charging up Kettle and San Juan hills with his Rough Riders in Cuba. ("Did I tell you that I killed a Spaniard with my own hand?" Roosevelt exclaimed in a letter to Lodge.) That seemed to satisfy his war lust, for a time. As president, TR preferred to "talk softly but carry a big stick." Still, in 1917, overweight and increasingly infirm at 58, the former president of the United States volunteered to raise a division to fight in France. (Not wanting to make Roosevelt a hero or a martyr, President Woodrow Wilson declined.)
Roosevelt was an extreme case. But how many men, over how many millennia, have wanted to know how they would do in combat? Would they be brave and fight? Or would they cringe and run? War has been, for almost all peoples and all times, the purest test of manhood. It is a thrilling addiction and a wretched curse—"a force that gives us meaning," as former New York Times war correspondent Chris Hedges has written—and the ruination of peoples and nations.
Men and (now increasingly) women fight wars for all sorts of reasons, sometimes out of nobility or at least necessity. We think of the "Good War," World War II, whose warriors are fast dying off now, honored in their passing. But before the Good War was the Great War, as it was known at the time. The outbreak of the First World War in August 1914 was greeted with something like euphoria by the young men who flocked to the colors. British schoolmates and teammates formed "Pals Battalions," and sometimes advanced on German positions while passing a soccer ball. They were slaughtered. At the Battle of the Somme in 1916, roughly 20,000 British soldiers perished in a single day.
"Every war is ironic because every war is worse than expected," wrote Paul Fussell in The Great War and Modern Memory. "The Somme affair, destined to be known as the Great F--k Up, was the largest engagement fought since the beginning of civilization." There have been larger and deadlier battles since, though, as war has become at once more modern and more primitive; the armed conflicts increasingly involved civilians, not just soldiers.
And yet, somehow, we forget. A collective amnesia afflicts young men who wish to live up to their fathers, and old men who missed war as young men. In the 1890s, not just Roosevelt but a good slice of his countrymen were possessed by a hunger for war. Oliver Wendell Holmes Jr., later perhaps the greatest of U.S. Supreme Court justices, put on his Civil War uniform and lectured young Harvard students that war was "divine," not to be missed. The U.S. president, William McKinley, who had seen the dead stacked up at Antietam as a Civil War soldier, tried to resist the rush to battle. But he was swept aside by hawks like Roosevelt and William Randolph Hearst, the newspaper publisher who would claim, with some exaggeration, that he personally caused the Spanish-American War with his sensationalist crusading.
"It was a splendid little war," John Hay, the U.S. ambassador to Britain, wrote Roosevelt in August 1898. The Americans had driven the Spanish from Cuba. But another, unexpected conflict was just starting in the Philippines, halfway around the world. The U.S. Navy had defeated a Spanish fleet at Manila Bay, and now the Americans were unintentional occupiers of a country that President McKinley said he could barely find on a map. The fighting in the Philippines dragged on for four more years and cost 4,000 men, roughly the same number we have lost so far in Iraq. There were atrocities on both sides in the long-forgotten counterinsurgency against the Filipinos, and for the first time Americans used an interrogation method called waterboarding.
My own appreciation of war, while particular to my generation, is an uncomfortably familiar history lesson in war and remembrance—or forgetting. I graduated from college in 1973, too late for Vietnam and in any case shielded by a high number in the national draft lottery. I was, like almost all my peers, opposed to the war and glad to miss it. Yet as time went on I felt increasingly uneasy about the realization that my type had been able largely to avoid the war, while less well-educated and poorer young men were drafted and killed. (In Memorial Church at Harvard, one can read the names of 234 students and faculty who died fighting in World War II, which cost 405,399 American lives, and 22 who perished in Vietnam, where 59,000 Americans died.)
For a long time, it seemed, we wanted to forget about Vietnam, to turn away from its cost and futility. But watching the movie Forrest Gump in 1994, I had a flash of recognition. The unlikely hero was Gump, unself-conscious in his Army dress uniform with combat medals at a peace rally on the Washington Mall. The villains were the scruffy antiwar protesters (Gump got the girl). It was apparent to me that the national mood was changing; Hollywood certainly could sense it. We were over Vietnam—and ready for the next war.
The Gulf War of 1991 was, curiously, not sufficiently bloody to be glorious—fought and won in less than 100 hours at the cost of fewer than 300 Americans (half of those the result of noncombat accidents). It was quickly overlooked. As the 1990s went on, there was a feeling that we hadn't finished the job of getting rid of Saddam Hussein—I know I felt it. But since 9/11, with the prolonged wars in Iraq and Afghanistan, we've now had our fill of fighting. We're back to the phase where movies and memoirs capture war's darker side. War should not be mythologized, but it should be remembered. "It is well that war is so terrible," Gen. Robert E. Lee once observed, "lest we grow too fond of it."
Find this article at http://www.newsweek.com/id/237223
© 2010
War in its modern telling
Videos depicting the gruesome deaths of enemy soldiers—and civilians—have taken the Internet by storm.
By Jessica Ramirez NEWSWEEK
Published Apr 30, 2010 From the magazine issue dated May 10, 2010
The video isn't quite clear. Three Iraqis stand in a field, unaware that a U.S. Apache helicopter is eyeing them from afar. Two of the men are handling what looks like a weapon, but there's no time to check. The Apache pilot gets an order: hit them. The 30mm bullets go clack-clack-clack. "Got [one]," says the pilot. "Good, hit the other one," says a voice on the radio. Clack-clack-clack. No. 2 goes down. The third man tries to hide behind a truck as bullets slam into the vehicle. After a few seconds a figure crawls into the open. "He's wounded," says the pilot. "Hit him [again]," says the voice. Clack-clack-clack. When the dust settles, the third man is dead.
Some 7,000 miles away, Nate J. sat in front of his computer, mesmerized by these images. It was 2006, and Nate, who owns a decal company, got his first taste of what soldiers and scholars call war porn. Although he's never been a soldier, Nate loves all things military. But this was better than anything he'd seen on the Military Channel. "I was just like 'Wow,' " he recalls. " 'I have to find more.' "
That was easy enough. Although the recently released footage of U.S. Apache helicopters gunning down two Reuters journalists appalled many, similar war videos are plentiful on Web sites like GotWarPorn.com and YouTube. Nate, who asked NEWSWEEK not to use his last name because he's received death threats, has uploaded more than 800 to his own channel on LiveLeak.com and other sites.
When the Afghanistan and Iraq conflicts broke out, the military officially released some of the raw combat footage now on the Internet to build a stronger bond between the home front and the battlefield. Soldiers also took their own videos or pulled them from cameras on military systems like Predator drones. But almost as soon as these images became available, civilians and soldiers alike started splicing the clips together, often adding soundtracks and spreading them across the Web. Today there are thousands of war-porn videos, and they've been viewed millions of times. Like sexual porn, they come in degrees of violence, ranging from soft-core montages of rocket-propelled grenades blowing up buildings to snuff-film-like shots of an insurgent taking a bullet to the head. And even as the U.S. begins its march toward the end of two long conflicts, these compilations continue to attract viewers. With a videogame sensibility, they fetishize—and warp—the most brutal parts of these high-tech wars.
Historically, combat images have been captured and disseminated by a handful of professionals, such as the photographers Mathew Brady during the Civil War and Robert Capa during World War II. Now the immediacy of the Internet, coupled with the spread of cheap video technology, allows anyone to document war as they see it. "There's a new order," says James Der Derian, a professor at Brown University's Watson Institute for International Studies. "Unlike the photograph, the moving image creates a feeling that it more accurately depicts what it is representing, whether it does or not."
Academics date the origins of war porn to the scandalous images from Abu Ghraib Prison, in which Iraqi prisoners were stacked on top of each other to form naked pyramids, forced to simulate sexual acts, or otherwise abused. The snapshot of Pvt. Lynndie England holding a naked prisoner by a leash became an iconic representation of the war. The acts were born of an aimless power and a pornographic sensibility, argued the French social theorist Jean Baudrillard, who defined this form of "war porn" in a 2004 essay in the French newspaper Libération.
After Abu Ghraib the floodgates burst, with U.S. soldiers even trading war porn for real porn. Chris Wilson was running a user-generated porn site when he started getting requests for sexual material from soldiers in both war zones. But when paying via credit card proved problematic, Wilson let them swap war footage for access to the site's sexual content. The first images he received were fairly tame. But as the Iraq War took a turn for the worse in late 2004, the photos and footage got bloodier and included shots of headless corpses and body parts like intestines, brains, and what appeared to be limbs. By 2005, Wilson had an estimated 30,000 U.S. military personnel as members. "It was a view of war that had never been seen," he says.
Eventually the Office of the State Attorney in Polk County, Fla., charged Wilson with 300 obscenity-related misdemeanor counts and one felony count. A Pentagon investigation into the war footage on his site led to no charges against him or military members. (The Department of Defense says it is against its policy to show "recognizable photos of wounded or captured enemy." The Marines, Air Force, and Navy haven't prosecuted anyone for such posts; the Army says it has no way to track this.) Wilson did plead no contest to five of the misdemeanor charges; he served no time, but his site was shut down. He believes that decision had more to do with the war porn than the sexual content. "If you're curious, and you're an adult, and you live in a free country, there should be no reason why you can't look at this stuff," he says. "I don't think there's any harm in it."
Critics disagree. The videos, after all, depict attacks only on enemy combatants and civilians—never American troops. (In many ways they're strikingly similar to jihadist propaganda.) Aside from providing a one-sided perspective of conflict, war porn soft-pedals the horrors of battle. "People watching it on their iPhone or on their home computer don't generally do it for the information; they do it because it's entertainment," says P. W. Singer, author of Wired for War. "That's the porn part of it. The soldiers use the word because they know there's something wrong with it."
What gets lost in the highlight reels of explosions and bodies is the moral complexity of war, says Bryant Paul, an expert on the psychological and sexual effects of media. He points to a video of American soldiers making fun of a dog eating a dead Iraqi. "The behavior may be a coping mechanism for war, because they might have to normalize what is not normal in order to survive," he says. "But the people who watch this stuff can't know that, so they can't understand the entirety of what they're seeing."
Yet these images will perpetuate a particular version of these wars, says Paul. It is a version that does not treat the enemy as human, or life as valuable. It is a version that does not recognize the pain of some of the U.S. soldiers who pull the trigger. And as realistic as these videos might seem, they do not show war for what it actually is: terrifyingly real.
Find this article at http://www.newsweek.com/id/237182
Sunday, May 16, 2010
"Can 'Energy Star' Ratings be Trusted?"
Can 'Energy Star' Ratings Be Trusted?
Many shoppers pay extra for Energy Star-certified products to save on utility bills and help the environment by reducing energy use. But a recent report from the Government Accountability Office (GAO) suggests that some Energy Star products aren't all they're cracked up to be.
Responding to a request for investigation from Sen. Susan Collins (R., Maine), the GAO submitted 20 fictitious products between June 2009 and March 2010 for certification by Energy Star, a joint program of the Environmental Protection Agency (EPA) and the Department of Energy (DOE). Fifteen of the fakes--including a phony "room-air cleaner" that was little more than a space heater with a feather duster taped to it--received an Energy Star label.
In response, federal officials announced plans to strengthen the program. From now on, each application will be reviewed individually by an EPA staff member (as opposed to the automated approval process previously in place). By the end of the year, companies that want Energy Star certification for their products will be required to submit lab results from an independent testing agency rather than conduct their own evaluations.
Meanwhile, consumer advocates say we can still have faith in our Energy Star appliances: Most Energy Star brands on the market are about 10% more energy-efficient than their counterparts. All the same, advocates are relieved that the government is getting serious about testing. As Tyson Slocum of the watchdog group Public Citizen says: "For too long, the appliance-manufacturing industry took advantage of lax regulation to mislead consumers."
Sen. Collins applauds the reforms, calling them long overdue. "Energy Star wasn't just slipping a bit," she says. "It was in danger of falling off the quality cliff--putting taxpayers at risk of getting ripped off. Now that the EPA and DOE are moving to put more stringent oversight in place, I believe consumers will be better served and the integrity of the program will be restored."
— Maura Kelly
"Can
Can 'Energy Star' Ratings Be Trusted?
Many shoppers pay extra for Energy Star-certified products to save on utility bills and help the environment by reducing energy use. But a recent report from the Government Accountability Office (GAO) suggests that some Energy Star products aren't all they're cracked up to be.
Responding to a request for investigation from Sen. Susan Collins (R., Maine), the GAO submitted 20 fictitious products between June 2009 and March 2010 for certification by Energy Star, a joint program of the Environmental Protection Agency (EPA) and the Department of Energy (DOE). Fifteen of the fakes--including a phony "room-air cleaner" that was little more than a space heater with a feather duster taped to it--received an Energy Star label.
In response, federal officials announced plans to strengthen the program. From now on, each application will be reviewed individually by an EPA staff member (as opposed to the automated approval process previously in place). By the end of the year, companies that want Energy Star certification for their products will be required to submit lab results from an independent testing agency rather than conduct their own evaluations.
Meanwhile, consumer advocates say we can still have faith in our Energy Star appliances: Most Energy Star brands on the market are about 10% more energy-efficient than their counterparts. All the same, advocates are relieved that the government is getting serious about testing. As Tyson Slocum of the watchdog group Public Citizen says: "For too long, the appliance-manufacturing industry took advantage of lax regulation to mislead consumers."
Sen. Collins applauds the reforms, calling them long overdue. "Energy Star wasn't just slipping a bit," she says. "It was in danger of falling off the quality cliff--putting taxpayers at risk of getting ripped off. Now that the EPA and DOE are moving to put more stringent oversight in place, I believe consumers will be better served and the integrity of the program will be restored."
— Maura Kelly
"Making Elections Less Safe"
Making Elections Less 'Safe'
Every 10 years, lawmakers in most states redraw voting districts based on the latest Census results. They can divide neighborhoods, pull in distant blocks of voters, or even exclude potential challengers' homes in an attempt to increase the odds that a candidate from the party in power will be re-elected.
Reps. John Tanner (D., Tenn.) and Michael Castle (R., Del.) hope their proposed Redistricting Transparency Act will change that. The bill would require each state to set up a website through which the public can monitor and comment on proposed redistricting before plans are finalized.
Some policy analysts maintain that the federal government shouldn't issue national mandates on voting districts. "The framers of the Constitution provided that power to the states," notes Tim Storey of the National Conference of State Legislatures.
But supporters of greater transparency in redistricting say it would benefit democracy. "More people would be engaged in the process, and voters would have a better chance of holding their representatives accountable," explains J. Gerald Hebert of the nonpartisan Campaign Legal Center. Says Tanner: "The idea is to encourage more fairly drawn, competitive districts so that voters choose their politicians, rather than politicians choosing their voters."
Reps. John Tanner (D., Tenn.) and Michael Castle (R., Del.) hope their proposed Redistricting Transparency Act will change that. The bill would require each state to set up a website through which the public can monitor and comment on proposed redistricting before plans are finalized.
Some policy analysts maintain that the federal government shouldn't issue national mandates on voting districts. "The framers of the Constitution provided that power to the states," notes Tim Storey of the National Conference of State Legislatures.
But supporters of greater transparency in redistricting say it would benefit democracy. "More people would be engaged in the process, and voters would have a better chance of holding their representatives accountable," explains J. Gerald Hebert of the nonpartisan Campaign Legal Center. Says Tanner: "The idea is to encourage more fairly drawn, competitive districts so that voters choose their politicians, rather than politicians choosing their voters."
Wednesday, February 3, 2010
The Force of Populism in Politics
The Wisdom of Crowds
When populist rage leads to smart policy.
By Michael Hirsh and Daniel Gross NEWSWEEK
Published Jan 29, 2010
From the magazine issue dated Feb 8, 2010
John Dingell is one of the few people in Washington who remembers the last time so much populist anger gripped the country. It was early 1933, the worst year of the Great Depression. The Michigan congressman, now 83, was a wide-eyed kid listening to his father—also a congressman—speak at the family dinner table about losing his entire net worth of $7,500. "Americans all hated the damn bankers, they hated Wall Street," Dingell tells NEWSWEEK. "We had more communists in this country than there were in the Soviet Union because" of rage against the so-called banksters. No one knew this better than the incoming president, Franklin D. Roosevelt. The story is told that a supporter warned FDR that if he failed now, with the nation in chaos, he'd be known as "our worst president," and Roosevelt supposedly replied: "If I fail, I'll be your last president." FDR exhorted his New Dealers, "Above all, try something!" While it took time to get going, the hodgepodge of recovery programs he came up with—some successful, others not—managed to appease most of the populist outrage.
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Barack Obama isn't saddled with the same degree of economic disaster as Franklin Roosevelt; the nation suffers 10 percent unemployment, which is bad, but it's not 25 percent. Yet the 44th president may face a political problem almost as sticky. Obama, like FDR, must appease populist anger rising from both left and right. Obama's giant stimulus, his health-care plan, and his continuation of the Bush administration's various bailout programs have ignited a prairie-fire backlash from the right (fueled in part by cynical Beltway Republicans). They call themselves tea partiers. The left's outrage is less organized (it's the left, after all), but reflects a visceral sense that the president has coddled Wall Street and given short shrift to Main Street. "The Democratic base is out of patience here," says a senior labor leader. "We're at a breaking point." There's something deeper at work beyond politics. We've witnessed an epic failure of the establishment—political, financial, business, even cultural.
All of which adds up to a very unhappy moment for Obama. The president and the Ivy Leaguers he has surrounded himself with are not natural populists. Since its appearance on the scene in the late 19th century, the language of populism has been one of opposition and incitement, clashes and fights—the Eastern bankers vs. the Midwestern farmers, rich white urban elites vs. poorer rural whites. That's not the language Obama traffics in. When the cerebral Obama inveighs against "fat-cat bankers," the phrase doesn't trip off his tongue. He's a community organizer, not a rabble-rouser. And he must know that populism, generally speaking, has been the refuge for losers in the American political process. No populist candidate has even come close to the presidency, though Teddy Roosevelt hit the 27 percent mark with his Bull Moose run in 1912 (he'd already been president, after all) and Ross Perot amassed an impressive 19 percent in 1992. William Jennings Bryan, the original Populist candidate, was the Democratic nominee in 1896, 1900, and 1908, but received fewer votes in each successive campaign.
Above all, populist uprisings usually careen out of control, driven by mindless anger. To some extent that's what is happening now. By the time of his confirmation vote last week, Federal Reserve chairman Ben Bernanke had been blamed for everything from Alan Greenspan's deregulatory policies to the flawed oversight of Wall Street, even though most of the worst-hit financial institutions were outside the Fed's supervisory reach. Yes, Bernanke made mistakes—serious ones—in the run-up to the financial crisis. But he also arguably did more than anyone to pull the global economy back from the brink of a Great Depression. Bernanke survived, but his populist penance was to suffer the largest "no" vote ever in the history of the Fed chairmanship, 70 to 30, with damage to the Fed's reputation that could be permanent.
Even so, smart presidents don't confront the populists head-on, they defang them by giving them some of what they want. After FDR launched the New Deal—and John Dingell's father helped to write the Glass-Steagall law separating commercial from investment banking—the nation slowly recovered and Roosevelt's personal popularity soared. Populist rabble-rousers like Huey Long on the left and Charles Coughlin on the right lost their resonance (or, in Long's case, were assassinated).
In recent weeks Obama has tried to mollify both populist camps. To satisfy the left, he announced a $100 billion fee on large banks, a new jobs program, infrastructure investments, and middle-class tax cuts. He also abruptly embraced a proposal from one his most prominent progressive critics, former Federal Reserve chairman and sometime adviser Paul Volcker, to ban banks from risky trading. Appealing to the right—and, increasingly, a piqued center that includes deficit-hawk Dems like Evan Bayh—Obama has announced a three-year spending freeze for discretionary programs that don't include defense and national security, Medicare, or Social Security. Above all, hoping to appeal to both sides, Obama has become far more strident in speaking against Wall Street.
But Obama is going to need a lot more than his usual rhetorical flourishes in the months ahead. There's a perception, largely accurate, that one set of rules applies to one group of people—generally wealthy and well connected—and another set of rules applies to the rest. And worse, that the many are subsidizing the few, cleaning up the messes they made. In too many areas, there are zero-sum games, in which the private interests of those who have access to the levers of power are arrayed against the interests of the large mass of American citizens. Generally speaking, the people have come out losers: insurance companies against policyholders, borrowers against lenders, and, most recently and explosively, taxpayers against the banks. Regardless of how much of the bailout money comes back, there's no way to spin it other than as a transfer of wealth from public taxpayers to the shareholders, bondholders, and managers of large, poorly run financial institutions.
The bottom line: there can be such a thing as smart populism, too—and if there ever were a time for it, it's now. (As Treasury Secretary Timothy Geithner recently said: "Just because [ideas] seem populist doesn't mean they're not the right thing to do.") Accordingly, here's a NEWSWEEK guide to smart populism in the Age of Obama. If implemented correctly, these proposals would not only help to bring us out of recession, they could also begin to fix the deeper problems in the economy. And they might go a long way toward mollifying both left and right (though the right is likely to stay unhappy no matter what is done with the Dems in power). The general principles: replace policies that pander to corporations with ones that help people, give companies incentives to be better citizens, finance government operations more equitably, and stop the pernicious practice of socializing losses and privatizing gains.
Slash Wall Street compensation, systemically and permanently, and provide carrots and sticks to make the financial industry behave more responsibly. If Washington can create new laws to regulate Wall Street's trading practices, there's no reason our legislators can't do the same thing with compensation. One smart proposal has been offered by FDIC chairwoman Sheila Bair, a Republican; she would tie insurance premiums charged to the banks to how risky their business models are. Another proposal would tie any compensation to long-term performance and add "clawback" provisions—rescinding pay and bonuses—if trades go bad. Yes, Wall Street CEOs will surely whine that without giant pay-and-bonus packages, they'll lose their best talent. But guess what: that would also be good for the economy. In recent years those enormous pay packages have lured America's best and brightest students to the Street, and away from more productive endeavors. Math whizzes became "quants," inventing products like CDOs that added almost no real economic growth and nearly sank the global economy. If Wall Street compensation is reduced enough, maybe then our best brains will go into real engineering, or bioengineering, or medicine. Or making better iPads.
Cram down mortgages. Everyone in Washington is worried about the "moral hazard" of forgiving home-owner debt on bad mortgages—it will make borrowers lazy and careless in the future, critics say. (The tea-party movement was launched by CNBC reporter Rick Santelli's rant about this.) Funny, nobody makes the same argument when giant investment firms walk away from billion-dollar mortgages on apartment complexes and office buildings. Economists agree that one of the biggest dead weights on the economy is the vast number of mortgagees whose homes are underwater, amounting to at least a quarter of the nation's 45 million mortgages, according to the Center for Responsible Lending. Yet the Obama administration's ultracautious program for inducing lenders to give easier terms, called the Home Affordable Modification Program, simply isn't enough. Every time there's a renegotiation of terms, the banks earn another fee—and the rate of new defaults after a year under the program is as high as 75 percent.
It's time to reconsider some intelligent proposals that the financial industry hates but is now wealthy enough again to endure: writing down principal on the mortgages, and for those who are seriously underwater, letting bankruptcy judges "cram down" or reduce the amount of mortgage owed. This would give indigent mortgage holders the right to work through debts over several years under Chapter 13 of the bankruptcy code. It's analogous to what happens to troubled corporations when they declare Chapter 11: a judge oversees a deal between them and their creditors, and they often emerge with a clean slate. One such proposal by Sen. Dick Durbin, Democrat of Illinois, was defeated last year.
Fix "too big to fail" once and for all. Obama was correct when he said in his State of the Union that everyone is united in their hatred of the bank bailout. The progressives have always mistrusted Big Finance, and conservatives are upset that the proper functioning of free markets has been undermined by behemoths that no longer have to play by free-market rules. There are actually some signs that both sides are beginning to unite around the "Volcker rule." Even Brink Lindsey of the libertarian Cato Institute says that there's probably no other way but to keep traditional banks away from Wall Street wizardry. "If there's got to be a [federally] guaranteed sector, it at least should be boring," he says.
Crack down on market manipulation that is driving up the cost of basic commodities. Everyone's focused on mortgage debt. But one reason people can't pay it on time is the high cost of oil, gas, and food. To little notice, the actual physical supplies of commodities have not been determining market prices as much as the frenzy of buying and holding by customers of the big investment banks. A few simple rules curbing big-time commodity speculators by imposing "position limits" could help, but the Obama administration has not been backing up a few progressives on the Hill, like Sen. Maria Cantwell, Democrat of Washington, who've been fighting for such rules.
Cut payroll taxes while adding a tax on speculation. Here's another area where left and right might be able to agree. Conservatives note that if government wants to discourage something, it should impose more taxes on that activity. If it wants to encourage something, it should reduce those taxes. Fine, we want more payrolls—jobs, in other words—and less Wall Street–style gambling. So resurrect the idea of a tax on financial trading, which was floated many years ago by Nobel Prize–winning economist James Tobin—no radical populist. This would both raise revenue and send a signal. Meanwhile Sens. Chuck Schumer, Democrat of New York, and Orrin Hatch, Republican of Utah, have proposed a plan to boost hiring by exempting any company that brings on a worker who has been unemployed for at least two months from the 6.2 percent of Social Security payroll tax for the rest of the year.
More broadly, come up with a more rational, more progressive set of national tax policies. The right won't like this one, but it's a key way to restore long-term health to the economy. The Bush-era tax cuts gave us all that long-term fiscal budgetary pain without any of the macroeconomic gain. They are slated to expire, and so they should. Returning much of the tax code to the state it was in the 1990s—higher estate taxes, higher taxes on capital gains and dividends, higher taxes on the highest income brackets—is a necessary and responsible move.
What's more, the tax code persists in treating certain income—mostly that made by really rich people—as more equal than other income. A loophole in the tax code allows private-equity- and hedge-fund managers to pay capital-gains rates (as low as 15 percent) on income they get for managing money for other people. This should be eliminated. Here's the ultimate irony: during the Bush era in the 2000s, the tax climate for investing was never more favorable, and it was the worst decade for stocks in recent memory.
This is hardly a cure-all for what ails America, but then most of the populists aren't asking for a panacea. They're asking for answers. Barack Obama is still in a position to supply them, and here he might take some encouragement from FDR. Historian Alan Brinkley points out there are "interesting similarities between the trajectory of Roosevelt's presidency and Obama's. Both began with tremendous popularity and hopes and expectations, and by end of the first year of both of their terms there was quite a lot disillusionment." FDR responded with what became known as his "second New Deal"—ramming through an astonishing flurry of legislation that included the creation of Social Security and the Securities and Ex-change Commission and the Wagner Act (giving labor the right to organize and bargain collectively). "Roosevelt went through very much the same kind of uprising of anger in 1934 as Obama is experiencing," says Brinkley, but ultimately FDR managed to "outflank" it. Obama's got a more recalcitrant Congress to deal with, Brinkley notes, but he still has three more years (at least) to recover from a crisis that's far less serious.
If the president can manage to get ahead of the populist sentiment, rather than merely chase it as he's currently doing, he will begin to fulfill the hopes and expectations he raised in his campaign, and which now seem so deflated.
Find this article at http://www.newsweek.com/id/232856
When populist rage leads to smart policy.
By Michael Hirsh and Daniel Gross NEWSWEEK
Published Jan 29, 2010
From the magazine issue dated Feb 8, 2010
John Dingell is one of the few people in Washington who remembers the last time so much populist anger gripped the country. It was early 1933, the worst year of the Great Depression. The Michigan congressman, now 83, was a wide-eyed kid listening to his father—also a congressman—speak at the family dinner table about losing his entire net worth of $7,500. "Americans all hated the damn bankers, they hated Wall Street," Dingell tells NEWSWEEK. "We had more communists in this country than there were in the Soviet Union because" of rage against the so-called banksters. No one knew this better than the incoming president, Franklin D. Roosevelt. The story is told that a supporter warned FDR that if he failed now, with the nation in chaos, he'd be known as "our worst president," and Roosevelt supposedly replied: "If I fail, I'll be your last president." FDR exhorted his New Dealers, "Above all, try something!" While it took time to get going, the hodgepodge of recovery programs he came up with—some successful, others not—managed to appease most of the populist outrage.
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Barack Obama isn't saddled with the same degree of economic disaster as Franklin Roosevelt; the nation suffers 10 percent unemployment, which is bad, but it's not 25 percent. Yet the 44th president may face a political problem almost as sticky. Obama, like FDR, must appease populist anger rising from both left and right. Obama's giant stimulus, his health-care plan, and his continuation of the Bush administration's various bailout programs have ignited a prairie-fire backlash from the right (fueled in part by cynical Beltway Republicans). They call themselves tea partiers. The left's outrage is less organized (it's the left, after all), but reflects a visceral sense that the president has coddled Wall Street and given short shrift to Main Street. "The Democratic base is out of patience here," says a senior labor leader. "We're at a breaking point." There's something deeper at work beyond politics. We've witnessed an epic failure of the establishment—political, financial, business, even cultural.
All of which adds up to a very unhappy moment for Obama. The president and the Ivy Leaguers he has surrounded himself with are not natural populists. Since its appearance on the scene in the late 19th century, the language of populism has been one of opposition and incitement, clashes and fights—the Eastern bankers vs. the Midwestern farmers, rich white urban elites vs. poorer rural whites. That's not the language Obama traffics in. When the cerebral Obama inveighs against "fat-cat bankers," the phrase doesn't trip off his tongue. He's a community organizer, not a rabble-rouser. And he must know that populism, generally speaking, has been the refuge for losers in the American political process. No populist candidate has even come close to the presidency, though Teddy Roosevelt hit the 27 percent mark with his Bull Moose run in 1912 (he'd already been president, after all) and Ross Perot amassed an impressive 19 percent in 1992. William Jennings Bryan, the original Populist candidate, was the Democratic nominee in 1896, 1900, and 1908, but received fewer votes in each successive campaign.
Above all, populist uprisings usually careen out of control, driven by mindless anger. To some extent that's what is happening now. By the time of his confirmation vote last week, Federal Reserve chairman Ben Bernanke had been blamed for everything from Alan Greenspan's deregulatory policies to the flawed oversight of Wall Street, even though most of the worst-hit financial institutions were outside the Fed's supervisory reach. Yes, Bernanke made mistakes—serious ones—in the run-up to the financial crisis. But he also arguably did more than anyone to pull the global economy back from the brink of a Great Depression. Bernanke survived, but his populist penance was to suffer the largest "no" vote ever in the history of the Fed chairmanship, 70 to 30, with damage to the Fed's reputation that could be permanent.
Even so, smart presidents don't confront the populists head-on, they defang them by giving them some of what they want. After FDR launched the New Deal—and John Dingell's father helped to write the Glass-Steagall law separating commercial from investment banking—the nation slowly recovered and Roosevelt's personal popularity soared. Populist rabble-rousers like Huey Long on the left and Charles Coughlin on the right lost their resonance (or, in Long's case, were assassinated).
In recent weeks Obama has tried to mollify both populist camps. To satisfy the left, he announced a $100 billion fee on large banks, a new jobs program, infrastructure investments, and middle-class tax cuts. He also abruptly embraced a proposal from one his most prominent progressive critics, former Federal Reserve chairman and sometime adviser Paul Volcker, to ban banks from risky trading. Appealing to the right—and, increasingly, a piqued center that includes deficit-hawk Dems like Evan Bayh—Obama has announced a three-year spending freeze for discretionary programs that don't include defense and national security, Medicare, or Social Security. Above all, hoping to appeal to both sides, Obama has become far more strident in speaking against Wall Street.
But Obama is going to need a lot more than his usual rhetorical flourishes in the months ahead. There's a perception, largely accurate, that one set of rules applies to one group of people—generally wealthy and well connected—and another set of rules applies to the rest. And worse, that the many are subsidizing the few, cleaning up the messes they made. In too many areas, there are zero-sum games, in which the private interests of those who have access to the levers of power are arrayed against the interests of the large mass of American citizens. Generally speaking, the people have come out losers: insurance companies against policyholders, borrowers against lenders, and, most recently and explosively, taxpayers against the banks. Regardless of how much of the bailout money comes back, there's no way to spin it other than as a transfer of wealth from public taxpayers to the shareholders, bondholders, and managers of large, poorly run financial institutions.
The bottom line: there can be such a thing as smart populism, too—and if there ever were a time for it, it's now. (As Treasury Secretary Timothy Geithner recently said: "Just because [ideas] seem populist doesn't mean they're not the right thing to do.") Accordingly, here's a NEWSWEEK guide to smart populism in the Age of Obama. If implemented correctly, these proposals would not only help to bring us out of recession, they could also begin to fix the deeper problems in the economy. And they might go a long way toward mollifying both left and right (though the right is likely to stay unhappy no matter what is done with the Dems in power). The general principles: replace policies that pander to corporations with ones that help people, give companies incentives to be better citizens, finance government operations more equitably, and stop the pernicious practice of socializing losses and privatizing gains.
Slash Wall Street compensation, systemically and permanently, and provide carrots and sticks to make the financial industry behave more responsibly. If Washington can create new laws to regulate Wall Street's trading practices, there's no reason our legislators can't do the same thing with compensation. One smart proposal has been offered by FDIC chairwoman Sheila Bair, a Republican; she would tie insurance premiums charged to the banks to how risky their business models are. Another proposal would tie any compensation to long-term performance and add "clawback" provisions—rescinding pay and bonuses—if trades go bad. Yes, Wall Street CEOs will surely whine that without giant pay-and-bonus packages, they'll lose their best talent. But guess what: that would also be good for the economy. In recent years those enormous pay packages have lured America's best and brightest students to the Street, and away from more productive endeavors. Math whizzes became "quants," inventing products like CDOs that added almost no real economic growth and nearly sank the global economy. If Wall Street compensation is reduced enough, maybe then our best brains will go into real engineering, or bioengineering, or medicine. Or making better iPads.
Cram down mortgages. Everyone in Washington is worried about the "moral hazard" of forgiving home-owner debt on bad mortgages—it will make borrowers lazy and careless in the future, critics say. (The tea-party movement was launched by CNBC reporter Rick Santelli's rant about this.) Funny, nobody makes the same argument when giant investment firms walk away from billion-dollar mortgages on apartment complexes and office buildings. Economists agree that one of the biggest dead weights on the economy is the vast number of mortgagees whose homes are underwater, amounting to at least a quarter of the nation's 45 million mortgages, according to the Center for Responsible Lending. Yet the Obama administration's ultracautious program for inducing lenders to give easier terms, called the Home Affordable Modification Program, simply isn't enough. Every time there's a renegotiation of terms, the banks earn another fee—and the rate of new defaults after a year under the program is as high as 75 percent.
It's time to reconsider some intelligent proposals that the financial industry hates but is now wealthy enough again to endure: writing down principal on the mortgages, and for those who are seriously underwater, letting bankruptcy judges "cram down" or reduce the amount of mortgage owed. This would give indigent mortgage holders the right to work through debts over several years under Chapter 13 of the bankruptcy code. It's analogous to what happens to troubled corporations when they declare Chapter 11: a judge oversees a deal between them and their creditors, and they often emerge with a clean slate. One such proposal by Sen. Dick Durbin, Democrat of Illinois, was defeated last year.
Fix "too big to fail" once and for all. Obama was correct when he said in his State of the Union that everyone is united in their hatred of the bank bailout. The progressives have always mistrusted Big Finance, and conservatives are upset that the proper functioning of free markets has been undermined by behemoths that no longer have to play by free-market rules. There are actually some signs that both sides are beginning to unite around the "Volcker rule." Even Brink Lindsey of the libertarian Cato Institute says that there's probably no other way but to keep traditional banks away from Wall Street wizardry. "If there's got to be a [federally] guaranteed sector, it at least should be boring," he says.
Crack down on market manipulation that is driving up the cost of basic commodities. Everyone's focused on mortgage debt. But one reason people can't pay it on time is the high cost of oil, gas, and food. To little notice, the actual physical supplies of commodities have not been determining market prices as much as the frenzy of buying and holding by customers of the big investment banks. A few simple rules curbing big-time commodity speculators by imposing "position limits" could help, but the Obama administration has not been backing up a few progressives on the Hill, like Sen. Maria Cantwell, Democrat of Washington, who've been fighting for such rules.
Cut payroll taxes while adding a tax on speculation. Here's another area where left and right might be able to agree. Conservatives note that if government wants to discourage something, it should impose more taxes on that activity. If it wants to encourage something, it should reduce those taxes. Fine, we want more payrolls—jobs, in other words—and less Wall Street–style gambling. So resurrect the idea of a tax on financial trading, which was floated many years ago by Nobel Prize–winning economist James Tobin—no radical populist. This would both raise revenue and send a signal. Meanwhile Sens. Chuck Schumer, Democrat of New York, and Orrin Hatch, Republican of Utah, have proposed a plan to boost hiring by exempting any company that brings on a worker who has been unemployed for at least two months from the 6.2 percent of Social Security payroll tax for the rest of the year.
More broadly, come up with a more rational, more progressive set of national tax policies. The right won't like this one, but it's a key way to restore long-term health to the economy. The Bush-era tax cuts gave us all that long-term fiscal budgetary pain without any of the macroeconomic gain. They are slated to expire, and so they should. Returning much of the tax code to the state it was in the 1990s—higher estate taxes, higher taxes on capital gains and dividends, higher taxes on the highest income brackets—is a necessary and responsible move.
What's more, the tax code persists in treating certain income—mostly that made by really rich people—as more equal than other income. A loophole in the tax code allows private-equity- and hedge-fund managers to pay capital-gains rates (as low as 15 percent) on income they get for managing money for other people. This should be eliminated. Here's the ultimate irony: during the Bush era in the 2000s, the tax climate for investing was never more favorable, and it was the worst decade for stocks in recent memory.
This is hardly a cure-all for what ails America, but then most of the populists aren't asking for a panacea. They're asking for answers. Barack Obama is still in a position to supply them, and here he might take some encouragement from FDR. Historian Alan Brinkley points out there are "interesting similarities between the trajectory of Roosevelt's presidency and Obama's. Both began with tremendous popularity and hopes and expectations, and by end of the first year of both of their terms there was quite a lot disillusionment." FDR responded with what became known as his "second New Deal"—ramming through an astonishing flurry of legislation that included the creation of Social Security and the Securities and Ex-change Commission and the Wagner Act (giving labor the right to organize and bargain collectively). "Roosevelt went through very much the same kind of uprising of anger in 1934 as Obama is experiencing," says Brinkley, but ultimately FDR managed to "outflank" it. Obama's got a more recalcitrant Congress to deal with, Brinkley notes, but he still has three more years (at least) to recover from a crisis that's far less serious.
If the president can manage to get ahead of the populist sentiment, rather than merely chase it as he's currently doing, he will begin to fulfill the hopes and expectations he raised in his campaign, and which now seem so deflated.
Find this article at http://www.newsweek.com/id/232856
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