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Column: Financial patch and mend won't do
I'll come back to the Treasury's new proposals for regulation shortly. Meantime, this new column for the FT argues that tweaks won't do. Although, as I point out, what has already happened is pretty radical, even though the Treasury and the Fed are reluctant to own up to it:
For the moment, everybody is advocating patch and mend. The resistance to thinking big extends even to denying the significance of steps already taken. For example, a bright line has been drawn by the Fed, the Treasury and by others between liquidity support for stressed financial companies and the outright taxpayer-funded purchase of impaired assets.
In fact, despite efforts to disguise it, the Bear Stearns operation has already crossed that line.
The Fed is now the de facto owner of $29bn (£15bn) of mortgage-backed securities – in the sense that, upon liquidation of the assets, it bears any losses and keeps any profits. Getting with the times, it has even created an off-balance-sheet vehicle to manage these dud assets and is camouflaging this underlying reality behind Bear’s new owner, JPMorgan, and talk about “loans”. In all but name, the Fed has nationalised the Bear Stearns portfolio of mortgage-backed securities. If a big principle was at stake in this, it has already been flouted – just as with Northern Rock. Whether the cosmetics of the Fed’s move will subtract anything from calls for transparency in financial dealings (when carried out by the private sector, that is) will be interesting to see.
The sensitivity of the Bear Stearns operation, of course, is tied up with concerns about moral hazard. Repeat after me: you encourage recklessness if you protect people from its consequences. The debate about future financial regulation continues to be framed around this concept: safety nets imply supervision because of moral hazard. This maxim is true enough, but I doubt that it gets at the crux of the current problem.
You can read the whole column here.
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The dumbing of America
For the first time in decades, and probably ever, workers retiring from the US labor force will be better-educated on average (according to one measure anyway) than their much younger counterparts. Some 12 per cent of 60-64 year olds have a master's degree or better; less than 10 per cent of 30-34 year olds do. More generally, the decades-long rise in the educational quality of the labor force is coming to an end. This is important, because that rise has been one of the principal forces driving American economic growth.
These findings are from a new study by Jacob Funk Kirkegaard of the Peterson Institute for International Economics: "The Accelerating Decline in America's High-Skilled Workforce: Implications for Immigration Policy". If you are interested in the prospects for American competitiveness and continued economic leadership, Jacob's study is mandatory reading.
Consider this particularly striking chart (from chapter 1 of the study [pdf], page 12), which shows the proportion of the labor force with at least a college degree, by age group, for OECD countries.
Look first at the squares in the diagram, which represent 55-64 year olds. For this age group, the US lags only Russia (whose competitiveness, Jacob points out, was not a problem thanks to communism). But the US is exceptional in the diagram (Germany is the only other instance) in that its younger cohorts, on this measure, are no better educated. In most other countries, the proportion of 25-34 year olds with at least a college degree has soared. (More than half of South Koreans, Japanese and Canadians in this age group have a college degree or better.) As a result, in that cohort, the US is not 2nd, but 11th. At first sight, anyway, it is hard to see how US leadership in per capita incomes can be sustained in the face of this trend.
Jacob cites this and other data as urgent grounds for liberalizing immigration of highly educated workers (a cause to which I would be very sympathetic, I admit, even if it were not for the good of the country, since I am one such immigrant). The point is, the US devotes a lot of effort to keeping such workers out, while other countries try just as hard to attract them. I'll come back shortly in another post to what I think of Jacob's specific recommendations, but for the moment I just wanted to draw your attention to the study--and to that disconcerting chart.
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Hillary on housing
No sooner had I finished berating the candidates for failing to pay attention to the housing-finance meltdown than Hillary Clinton devoted a whole speech to the subject. And a pretty good speech too.
Not that I agreed with it all. I think the proposed 90-day moratorium combined with a "voluntary" five-year freeze on interest-rate resets is a bad idea: a drastic remedy, and yet to little effect. What is the point of prolonging the agony? And I cannot say I am impressed by the call for an "Emergency Working Group on Foreclosures": a working group, even if it is a Working Group, is not a solution--though I grant you that the idea of putting Alan Greenspan (as Hillary suggests) on a panel to sort through a mess somewhat of his own making has a definite appeal. However, much of the rest of what Hillary said seems sensible. For instance, she agrees with Larry Summers' idea for a new bankruptcy procedure that would curb repossessions and allow mortgages to be written down. Though she got the thing a bit muddled:
I’ve also proposed that we amend the bankruptcy code to give judges the discretion to write down the value of struggling families' homes. Believe it or not, bankruptcy judges can write down the value of many other things to help families pay off their debt, but not their homes. They can write off the value or write down the value of second homes, which seems kind of ironic to me. Making this amendment to the code will help families in bankruptcy pay off their mortgages and stay in their homes.
It is not the value of the homes that would be written down, obviously, but the value of the mortgage debts secured against them. Assuming that is what she meant, I agree with her: it's a good idea.
By the way, one argument offered against doing this (though it's debatable whether it is in fact an argument for or against) is that it would discourage future mortgage lending. A recent study, "The Effect of Bankruptcy Strip-Down on Mortgage Markets" by Adam Livitin and Joshua Goodman, pours cold water on that notion.
The most important proposal was that the FHA should start buying impaired mortgage-backed securities--except that, to be precise, she only said that it should "stand ready" to do so. The question is, when and under what circumstances ought the FHA, or some other taxpayer-financed entity, actually start buying up this stuff. But I cannot be too hard on her for failing to answer that question because nobody else appears to know the answer either.
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Bailing out (sic) Bear Stearns
The markets were thrilled by J.P. Morgan’s quintupling (to $10 a share) its offer for Bear Stearns. But does this not make the whole operation, from a public-policy point of view, look like even more of a shambles? The Fed explained that its $30 billion of support for J.P. Morgan, secured against Bear’s most dubious assets, was not a bail-out because Bear’s shareholders were being wiped out. Well, now they aren’t being wiped out. The more general point is this: having secured Fed support for its purchase of Bear, is it now entirely a matter for J.P. Morgan how much it pays for the bank? (The Fed has apparently participated in the revised offer. The terms of its support have been adjusted: it is no longer standing behind the first $1 billion of Bear’s impaired assets.) Was the Fed’s support for the deal in the first place conditional on the price J.P. Morgan was going to pay, or not? To say that the authorities are making this up as they go along is putting it mildly.
I agree with Lex’s take:
Where does this leave the Fed? Outwardly better off. Under the new deal, JP Morgan guarantees the first $1bn of losses on the $30bn of illiquid Bear assets the Fed originally took on. But it also means that the Fed loses its sacrificial Bear. Its intervention has given shareholders $10 a share instead of zero. (Lehman shareholders did even better from the Fed. Lehman’s shares soared from their lows in large part because its future was guaranteed by the Fed’s decision to give investment banks access to the discount window.)
Moral hazard is returning to the fore. When the smoke clears, the Fed must get its pound of flesh by regulating Wall Street, and doing it more aggressively, to make sure this never happens again.
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In praise of Joni
Of course the other point of having a blog (see my previous post for the main reason) is to advertise one’s enthusiasms, as if anybody gives a damn. Therefore, while I am in this narcissistic frame of mind, be it known, I am a Joni Mitchell fan. She is one of the greatest musical artists of our time, and a woman I have lusted after (it goes without saying) man and boy. More than 30 years ago I recall attempting to persuade the poet Roy Fuller that many of Joni’s lyrics were capable of being read as serious poetry, no less than his own. He was very nice about it.
The great thing about Joni is that she improves with age. Her artistry soars as her record sales decline. I am not talking about the enviro-politics, I hasten to add—you have to look past the whining apocalyptic gloom. (We make these adjustments for our loved ones.) But the music just gets better, and the lyrical ingenuity is undimmed. I urge you to listen to “Shine”, her newest album (and the first of new songs for nearly 10 years) if you haven’t already. The jazz sensibility is perfectly assimilated. It’s beautiful.
And do listen, also, to Herbie Hancock’s lovely new album of Joni covers, “River”. It features—and I would say stars—Wayne Shorter, my favorite saxophone player and a frequent Joni collaborator. A couple of reviewers have complained that the album is subdued and understated. That’s what I like about it. It’s a dreamy, reverent reflection on Joni’s wonderful melodies. I think he likes her music as much as I do.
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Steve Jobs, I know you’re reading this
What is the point of having a blog, really, if you are not allowed from time to time to vent a personal grievance? No point, you say? I quite agree.
I am a born-again Apple devotee and recidivist iPhone-fondler. However, I am disturbed by a couple of recent developments in the Apple product line, and want to see these errors corrected. I believe I am not alone.
Continue reading "Steve Jobs, I know you’re reading this" »
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The silence is deafening
My Monday column for the Financial Times complains about the presidential candidates' lack of attention to the worsening financial crisis.
What makes this even odder is that the Democrats, at least, continue to hammer away at economic anxiety. The squeeze on “middle-class families” gives them an edge against the Republicans in November, they calculate. But they were saying this last year, and the year before – when unemployment was not rising, the economy looked pretty healthy and most Americans still did not know the difference between an SIV and a CDO. The themes are trade and jobs, shuttered factories, stagnant incomes, unlevel playing fields and labour and environmental standards. As for the complete breakdown of the credit system and the danger of a years-long Japanese-style slump – oh, yes, there’s that as well.
It is as though after 9/11 the candidates headlined their speeches with demands – urgent demands! – for tighter security around embassies. To be fair, at the end of last week Mrs Clinton (“Solutions Not Speeches”) did move to position herself as the most forceful figure in the crisis. She announced that after the Bear Stearns intervention she had called Henry Paulson, the Treasury secretary, to interrupt his afternoon nap and advise him of the urgency of the situation. This was a significant tactical victory, because it showed she had Mr Paulson’s number, whereas Mr Obama’s people had merely called some people and it was unclear whether her rival thought the issue was “urgent” or just “serious”. (Later he clarified and said it was both.)
Personally, I would like to see phone logs and transcripts from both campaigns, so we can know exactly who called whom, and exactly how much urgency was communicated. Without that kind of transparency, it is all just politics as usual.
You can read the whole column here.
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Are the Democrats miscalculating on trade?
Ron Brownstein asks whether the Democrats' increasingly strident anti-trade line might be a political mistake as well as an economic one (the link expires in a week). Writing from Miami, he notes the signs of international connectedness wherever he looks. Can Democrats plausibly tell their supporters in such places that they would be better off if the US retreated from world markets?
This is the side of the international economic story that Barack Obama and Hillary Rodham Clinton obscured in Ohio with their spiraling denunciations of free trade. But many of America's most vibrant communities are benefiting enormously from their connections to the global economy. What's more, most of these communities, the places that would suffer most if America tried to wall out the rest of world, are becoming Democratic strongholds. This means that in seeking to retreat from globalization, Democrats are threatening the interests of voters and communities increasingly central to their electoral coalition. "The Democrats are in all the globally connected places," says Robert Lang, director of the Metropolitan Institute at Virginia Tech University. "They are biting the hands that feed them."
Lang and his colleagues, in a paper dated March 21, identified the 20 American metropolitan areas most thoroughly integrated into the global economy. The researchers ranked the cities along four dimensions: the presence of global service firms (such as advertising, law, and financial services); whether the area has a major port; whether it has an international airport; and the value of exports that pass through it.
At the top of the list stand New York, Chicago, Los Angeles, San Francisco, and Miami. They are followed by Atlanta, Washington, Boston, Dallas, and Houston. The second 10 start with Seattle and Philadelphia and end with Phoenix and San Jose, Calif.
These globally connected cities retain many differences. But they generally share an expansive outlook marked by receptivity to foreign markets, foreign investment, immigration, and ethnic diversity. "They are the places where when you walk into a building, they have clocks set all around the world," Lang says. In the 1980s, as Hispanic immigration surged, a popular South Florida bumper sticker read, "Will the last American to leave Miami bring the flag?" Today, notes Ojeda, most Miami leaders of all races recognize "that our international [population] base has given us the economy we have."
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Where is the floor for house prices?
In this new column for National Journal, I discuss the Fed's latest maneuvers:
If banks are too scared to lend and consumers too scared to borrow regardless of interest rates, even the most aggressive easing of monetary policy might fail to push the economy out of recession. That is why, separately from the push to lower interest rates, the Fed is struggling so hard to maintain structural confidence in the financial system -- by keeping Bear Stearns in business and by promising to give banks (and now, for the first time, many nonbanks) the assurance of access to short-term loans they are no longer willing to extend to each other.
Where does it all end? If the Fed could be granted one wish, it would be that house prices start to bottom out. That would begin to put a floor under losses on mortgage-backed securities, and help to restore banks' confidence in one another. Its biggest fear, conversely, is that house prices fall further and faster. A particular risk in that case is that many more borrowers would find they owed more than their house is worth, so that it would make sense for them to default on their mortgage. (Most mortgages are nonrecourse loans, meaning that in case of default the lender gets the house and has no further claim.) If mortgage defaults catch on in a big way, causing a flood of foreclosures and forced sales, it is hard to say where the floor for house prices might be -- and the losses for lenders could dwarf current estimates.
You can read the whole column here (the link expires at the end of the week).
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Can Hillary still win?
As I've said before, don't count her out just yet. Jay Cost at RCP has a new post summing up his earlier argument that Hillary has a path to the nomination which is "plausible, but unlikely". I think his reasoning is correct, but I would add a couple of things. (And to head off my own batch of emails accusing me of being a Hillary stalwart, I will first repeat right now that I much prefer Obama as the Democratic nominee.)
A first point, which should hardly need to be made, is that this race is close. Clinton and Obama have divided the party right down the middle. If you look at that fact alone, what can people calling on Hillary to give up now and drop out be thinking? We know that the pledged-delegate count will not settle this. The outcome will depend on the superdelegate vote, and that is not pre-ordained. Hillary would be mad to surrender in this situation.
Second, especially if Hillary can narrow (or overturn) the various vote-count gaps by August, the candidates' standing in the polls will count too. This is the main thing I would add to Jay's take. Suppose that Obama has a small lead in pledged delegates, and Clinton has forced, in effect, a tie in the popular vote. But also suppose that by then the national head-to-head polls show her with a ten-point lead or better over Obama. That will sway some of the superdelegates--as it damn well ought to, since their most important task is to get a Democrat elected.
A lot can happen between now and the summer. (Despite Obama's fine speech on the subject, it is not yet clear how much harm the Wright affair has done to him. There might very well be more such setbacks, for either side.) By the summer, the polls might be tied too, of course--which would be bad for Hillary, because she has to overturn Obama's pledged-delegate advantage. But they might not be tied--and if they aren't, that will matter.
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Florida has a plan
This just in from CNN:
Two Florida state senators presented a plan Wednesday to seat the state's delegates at the Democratic National Convention, hoping that Sens. Hillary Clinton and Barack Obama will embrace their compromise.
Florida Senate Democratic Leader Steven Geller and Sen. Jeremy Ring outlined a proposal to seat all the delegates at the convention in August. The plan recommends seating half of Florida's 210 delegates based on the results of the January 29 primary. The remaining delegates could be allocated in a number of ways, including evenly, proportionally based on the national popular vote (excluding Florida and Michigan) or proportionally based on the total national delegate count, also excluding Florida and Michigan. "I invite the campaigns to endorse our compromise to ensure victory in November," Ring said.
This was the part that caught my eye:
"There is no do-over, no mail-in ballots, no complicated math. Just the basic process of American democracy is in play here."
That's all right, then.
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Obama's speech on race
My instant reaction to what may have been the most important speech of Obama's candidacy is that it was excellent. Not, for once, because it was all that well delivered. Especially at the beginning, he seemed not just calm and collected, as usual, but downright subdued. He got more comfortable as he went on, but the whole thing felt more like a statement announced under some duress (which I suppose it was) than a speech he was ever keen to deliver. On the substance, though, my feeling is that he hit every target. Perhaps the association with Wright will still prove to be a net negative. We will find out in due course. But I thought Obama dealt with the issues so well that, at least for me, the whole fuss over Wright might turn out to work to his advantage.
In my previous post on the Wright affair I called Obama's first line on the matter--"I wasn't present when he said those things"--a transparent evasion. I was very glad to see no trace of that in the speech:
I have already condemned, in unequivocal terms, the statements of Reverend Wright that have caused such controversy. For some, nagging questions remain. Did I know him to be an occasionally fierce critic of American domestic and foreign policy? Of course. Did I ever hear him make remarks that could be considered controversial while I sat in church? Yes. Did I strongly disagree with many of his political views? Absolutely – just as I’m sure many of you have heard remarks from your pastors, priests, or rabbis with which you strongly disagreed.
Rather than pretending he was unaware of Wright's views, he confronted them:
But the remarks that have caused this recent firestorm weren’t simply controversial. They weren’t simply a religious leader’s effort to speak out against perceived injustice. Instead, they expressed a profoundly distorted view of this country – a view that sees white racism as endemic, and that elevates what is wrong with America above all that we know is right with America; a view that sees the conflicts in the Middle East as rooted primarily in the actions of stalwart allies like Israel, instead of emanating from the perverse and hateful ideologies of radical Islam.
As such, Reverend Wright’s comments were not only wrong but divisive, divisive at a time when we need unity; racially charged at a time when we need to come together to solve a set of monumental problems – two wars, a terrorist threat, a falling economy, a chronic health care crisis and potentially devastating climate change; problems that are neither black or white or Latino or Asian, but rather problems that confront us all.
That seems to me exactly right. But having criticized his pastor so frontally, Obama then had to explain why he nonetheless has remained a member of his church and evidently holds the man in such high regard. He did this too--first in a very personal way, but then in an explanation that broadened out to touch on the main themes of his campaign.
Continue reading "Obama's speech on race" »
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The view from Mount Greenspan
I continue to be astonished by Alan Greenspan’s timing. It is quite uncanny. In a column for National Journal last September (pasted after the jump, if you're curious) I applauded the timing of both his departure from the Fed and the subsequent publication of his memoirs, which coincided beautifully with a spike in concern for the mess he left behind. And now—a smaller achievement, admittedly, but impressive nonetheless—he has a long column in the FT on the very day that the paper leads with news of the extraordinary “rescue” of Bear Stearns by J.P. Morgan and the Fed (something which nobody saw coming when the column was commissioned and written). The man is a magician.
In this new article Greenspan says that the current financial implosion is mainly due not to poor regulation but to the inescapable complexity of modern finance, and to the fact that the science of risk management has not yet caught up.
The essential problem is that our models – both risk models and econometric models – as complex as they have become, are still too simple to capture the full array of governing variables that drive global economic reality. A model, of necessity, is an abstraction from the full detail of the real world. In line with the time-honoured observation that diversification lowers risk, computers crunched reams of historical data in quest of negative correlations between prices of tradeable assets; correlations that could help insulate investment portfolios from the broad swings in an economy. When such asset prices, rather than offsetting each other’s movements, fell in unison on and following August 9 last year, huge losses across virtually all risk-asset classes ensued.
The answer, Greenspan says, is not to move away from “counterparty surveillance and, more generally, financial self-regulation as the fundamental balance mechanism for global finance”. He is less clear on what the answer actually is, except to be patient while the finance experts improve their models.
I do not count myself among the claque of registered full-time Greenspan critics, but I have to say it takes some nerve to contemplate conditions in the financial markets today and talk of the virtues of self-regulation. If that view has not been discredited by recent events, one has to wonder what it would take.
The fundamental problem, in my view, was not insufficiently clever risk-management models. It was moral hazard (operating at multiple levels); a gross failure of regulation in mortgage lending (for which Greenspan is substantially responsible: remember that he was a cheerleader for the subprime lending business); a structure of finance-industry incentives that rewarded greed and recklessness indulged at others’ expense (itself a failure of regulation); and last but not least the most credit-friendly tax regime in the world.
One remedy that Greenspan does advocate in his article is larger “capital buffers” for banks and other lenders—he notes that private investors are already demanding this. Yes, that is putting it mildly. But whether private investors continue to demand it or not, a new and much tougher approach to capital adequacy is (among other changes) something regulators must now insist upon. The real lesson of this crisis is that the authorities will do anything—at any cost to taxpayers—to shore up a financial system on the point of being wrecked by greed and incompetence. For the sake of minimizing the harm to innocent bystanders, they may very well be right to take that view. But the quid pro quo is stricter regulation. Implicit uncapped guarantees plus “self-regulation” is a formula for the very disaster now unfolding.
Continue reading "The view from Mount Greenspan" »
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The Bear Stearns bail-out
On Friday Bear Stearns–-even in the throes of a financial collapse that had driven its share price down by three-quarters–-was still worth $3.5 billion. On Sunday night it was worth barely $200m, sold for two bucks a share to J.P. Morgan, in a deal brokered by the Fed. If this is a bail-out (and it is) the shareholders of Bear Stearns are not exactly thrilled about it. They will want to know why giving away their firm (whose book value, they had just been told, was in the neighbourhood of $80 a share, and whose headquarters building is said to be worth $1 billion) to J.P. Morgan was better for them than going bust.
It wasn’t. Bankruptcy would surely have recovered more value for shareholders than this give-away-–but the Fed evidently feared that closure and disposal of Bear’s assets would have jeopardized other parts of the country’s teetering financial system. Preventing that was the Fed’s overriding goal. The firm had to be acquired in a hurry, shored up, and then run, so far as counterparties were concerned, as though nothing had happened. By any measure, Bear Stearns was not that big: it was surely not “too big to fail”. Apparently, though, it was deemed too delicately interconnected to fail. One wonders how many such institutions there now are, and who will carry the burden of keeping them in business.
The Fed, helping to answer that question, simultaneously announced a new lending facility for “primary dealers”–-non-bank financial firms like Bear, which have hitherto been unable to borrow from the Fed. This constitutes a remarkable expansion of the Fed’s financial safety net. Something else Bear’s shareholders will want to know is why this facility was not created in time for them to take advantage of it. At the end of last week, they were having to borrow from the Fed indirectly, through the good offices of J.P. Morgan. Two days later, J.P. Morgan is getting Bear for nothing, and in addition has been promised as much as $30 billion in Fed loans, secured against Bear’s dodgy assets. If the assets turn out to be worth less than the loans, the Fed–-ie, the taxpayer–-shoulders the risk. (And that, by the way, is why these arrangements are indeed a bail-out, though not one that helps Bear’s original owners.)
On the face of it, this looks like a remarkably good deal for J.P. Morgan. We will see whether it turns out to be such good value for taxpayers.
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A Clinton-Obama ticket?
I discuss this possibility in a new column for the Financial Times.
Bill Clinton’s recent claim that a Clinton-Obama ticket would be unstoppable...was an extremely shrewd political manoeuvre. It asserts a presumption, nothing if not bold, that Mrs Clinton is still the senior partner. It nominates Mr Obama as the Democrats’ presidential candidate in 2016 – and he is young enough for that to make sense. And it issues a summons, cynical as this may be coming from the Clintons, to party unity. This way, the Clinton campaign is saying, the party can come together, front both its favourite candidates (two for the price of one, three if you count Bill) and maximise its general election prospects.
If you were a superdelegate, this might seem an attractive proposal and it is likely to become more so as the weeks go by. To deny the superdelegates this possible escape from their dilemma, Mr Obama had to squash the idea flat and he has failed to do it. His instant response to Mr Clinton’s overture was to say such talk was “premature” – exactly what his opponent hoped he would say.
Shortly after, he mocked the offer by reminding the party that he was still the leader both in elected delegates and votes (it is telling that he had to do that) and by accusing the Clinton team of inconsistency – how can they say he is not ready to be commander-in-chief and yet that he would be a good vice-president? Fine, but that was a rhetorical rejoinder, not a decisive rejection.
As long as this possibility is entertained, it puts Mr Obama at a disadvantage. Paradoxically, it licenses Mrs Clinton to persist with her attacks. “It’s nothing personal. I’ve said I’m willing to have the man as my vice-president: all he needs is a bit more experience.” As the fight gets fiercer, the prospect of a negotiated settlement will seem all the sweeter to the party’s leaders.
Also, it weakens Mr Obama’s resolve by giving him an acceptable way to fail. This contest is all or nothing for Mrs Clinton – nobody even needs to ask whether she would be willing to accept the vice-president slot. Mr Obama will have other chances to be president and in low moments he may feel there are worse things in the meantime than being vice-president. Most important, it gives the Clinton campaign a chance to claim the high ground with the superdelegates. “We are willing to put this feud behind us and unify the party. He is not.”
You can read the whole column here.
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Jeremiah Wright
Will the storm over Jeremiah Wright seriously hurt Obama's campaign--and ought it to? This is no trumped-up attack, easy to dismiss. (So much for the Clintons playing the race card.) The video clip that has attracted most attention expresses rage against whites and contempt for the country that Obama is asking to lead. Wright is not another Farrakhan--somebody Obama barely knows and whose endorsement he would rather not have. Wright has been Obama's spiritual mentor for many years: "The Audacity of Hope" is Wright's phrase, chosen for Obama's book as a homage to the man who coined it.
Here is Obama's response: first his statement on the subject, then an interview he gave to Fox.
Most importantly, Rev. Wright preached the gospel of Jesus, a gospel on which I base my life. In other words, he has never been my political advisor; he's been my pastor. And the sermons I heard him preach always related to our obligation to love God and one another, to work on behalf of the poor, and to seek justice at every turn.
The statements that Rev. Wright made that are the cause of this controversy were not statements I personally heard him preach while I sat in the pews of Trinity or heard him utter in private conversation. When these statements first came to my attention, it was at the beginning of my presidential campaign. I made it clear at the time that I strongly condemned his comments. But because Rev. Wright was on the verge of retirement, and because of my strong links to the Trinity faith community, where I married my wife and where my daughters were baptized, I did not think it appropriate to leave the church.
Let me repeat what I've said earlier. All of the statements that have been the subject of controversy are ones that I vehemently condemn. They in no way reflect my attitudes and directly contradict my profound love for this country.
Obama does all right in the interview. (It is good that he laughs at one point at the questioner's comically portentous and inquisitorial demeanor. I thought that was funny too.) But does he bury the issue? By no means. His claim in the interview and in the statement that most of Wright's anger and (in my view) bigotry comes as news to him is just not credible. Tactically speaking, that is a transparent evasion, and will keep the problem alive.
But what I most want to know is why the Obama we thought we knew could hold this man in such esteem. Perhaps it is just a matter of loyalty to a father-figure, flaws and all--which is both understandable and, up to a point, admirable. But does Wright's bitter resentment in fact resonate with Obama, despite all appearances to the contrary? That is a question that will trouble a lot of less-than-fully-invested Obama supporters.
A subsidiary question--one I have been asking of myself--is why the most recent Wright videos seemed to come as such a shock, when neither Obama's close links to the pastor nor the preacher's views about the ongoing evil of white America were any secret. Here is an interesting take on that from Politico:
The fracas started Thursday morning, when ABC’s “Good Morning America” ran a Brian Ross expose on Wright that included old video of him saying: “The government gives them the drugs, builds bigger prisons, passes a three-strike law and then wants us to sing ‘God bless America’? No, no, no. Not God bless America. God [expletive] America.”
On Friday night, there was Leno on NBC’s “Tonight Show” joshing: “McCain was running so fast from President Bush, he ran into Barack Obama, who was running from his minister.”
The story had burst onto the radar screen of average Americans with as much velocity as any other story during the 2008 campaign.
Political reporters and editors were inundated with e-mails from red-state friends and relatives wanting to know why the brouhaha wasn’t getting more instant and constant coverage from every news outlet.
To reporters who had followed the campaign, it was an old, oft-written story. But this time it had video of Wright saying things like “U.S. of K.K.K.A.,” available on YouTube and played endlessly by cable news channels.
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Dershowitz on Spitzer
In the deluge of commentary on the Spitzer scandal, I thought this piece by Alan Dershowitz in the Wall Street Journal was the best. As he says, what we know of the investigation so far is very odd—not as odd as Spitzer’s behavior, I grant you, but strange nonetheless.
There is no hard evidence that Eliot Spitzer was targeted for investigation, but the story of how he was caught does not ring entirely true to many experienced former prosecutors and current criminal lawyers. The New York Times reported that the revelations began with a routine tax inquiry by revenue agents "conducting a routine examination of suspicious financial transactions reported to them by banks." This investigation allegedly found "several unusual movements of cash involving the Governor of New York." But the movement of the amounts of cash required to pay prostitutes, even high-priced prostitutes over a long period of time, does not commonly generate a full-scale investigation...
In this case, if the serendipitous bank audit really led federal agents to Mr. Spitzer, and Mr. Spitzer led them to the Emperor's Club, and federal prosecutors really wanted to get the Club, they could easily have sent an undercover cop to pose as a john, instead of tapping phones and reading emails -- tactics designed to catch and embarrass Mr. Spitzer with his own recorded words, which could be, and were, leaked to the media. As this newspaper has reported: "It isn't clear why the FBI sought the wiretap warrant. Federal prostitution probes are exceedingly rare, lawyers say, except in cases involving organized-crime leaders or child abuse. Federal wiretaps are seldom used to make these cases . . ."
What exactly were the Feds investigating in the first place, and why? Summing up, Dershowitz quotes Beria, I think aptly:
Lavrenti Beria, the head of Joseph Stalin's KGB, once quipped to his boss, "show me the man and I will find the crime." The Soviet Union was notorious for having accordion-like criminal laws that could be adjusted to fit almost any dissident target. The U.S. is a far cry from the Soviet Union, but our laws are dangerously overbroad.
Both Democrats and Republicans have targeted political adversaries over the years. The weapons of choice are almost always elastic criminal laws. And few laws are more elastic, and susceptible to abuse, than federal laws on money laundering and sex crimes. For the sake of all Americans, these laws should be narrowed and limited to predatory crimes with real victims.
This is one reason I find the chorus of exultation over Spitzer’s downfall hard to take. Another is that it is wrong in any case, in my view, to criminalize prostitution—a victimless crime if ever there was one. But having said all this it is difficult to summon much sympathy for the man. You could never accuse Spitzer of having exercised restraint in his use of broadly framed laws, not to mention the awesome and largely unchecked powers of his office, to coerce his targets into submission without the nuisance of a trial. He was on the right side of a lot of the investor-protection issues he chose to champion as a prosecutor, I think, but still by word and deed he always struck me as a tyrant. It is dangerous to trust that kind of man with that kind of power. It is still a great shame that it took this to stop him in his tracks.
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Updated: Obama for VP?
The Clinton campaign’s offer of the VP slot to Obama is clever politics. Bill pressed the idea more explicitly than before over the weekend, saying that the ticket would be “almost unstoppable”. The idea gels nicely with the Clinton’s argument that Obama is inexperienced: here is his chance for some on-the-job training as number three in the Clinton White House. In due course, they are saying, he might be a pretty good candidate for president.
Best of all, from a tactical point of view, it affirms the idea that Hillary is winning the race—implying there is nothing odd about her offering the VP place to the man who just happens to have the most delegates at the moment, and still will after Pennsylvania. The press mostly went along with this imposture—and so, in a way, did the Obama campaign. Instead of rejecting the overture out of hand, they said that such talk was “premature”. That was a mistake. If I were Obama, I’d be saying that the question of accepting the VP slot on Hillary’s ticket will never arise; if it did I wouldn’t accept it; and that there are no circumstances in which I’d offer her the VP slot on my ticket. (Isn’t it telling that Hillary doesn’t even need to say she’d reject such an offer from Obama?) Even to signal the possibility that he might come around to this idea looks weak.
Update:
Good. This is more like it.
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Column: Coping with the subprime crisis
I have a column in the FT this morning that discusses rival approaches to the subprime mess.
There may be little or nothing the authorities can do to arrest these forces, but politics will insist they try. For the moment, foreclosures are the focus of attention. Congress is considering changes to bankruptcy laws, making it harder for lenders to foreclose and allowing judges to write down mortgage principal as part of a bankruptcy proceeding. Mr Paulson is opposed: he says it would slow the flow of future lending. Moreover, this approach only discourages lenders from foreclosing. Increasingly, borrowers who owe more than their houses are worth are choosing to walk away from their debts.
They call it “jingle mail”: the borrower posts the keys to the lender. Social stigma, together with a self-interested regard for one’s credit status, has inhibited this in the past. But walking away seems to be catching on; it may soon be all the rage. If so, as house prices continue to fall – leaving as many as 20m in negative equity, on some estimates – the lenders’ losses could exceed even Mr Roubini’s estimates.
The line that “falling house prices are good for the economy – they help clear the market” is no doubt correct, but it will be difficult to sustain if anything like that worst-case scenario begins to unfold. Then the challenge will be to confine political action to measures that do relatively little harm, and to avoid palliatives that will only amplify the cycle of recklessness and remorse next time round.
This seemingly obvious point is widely ignored in Washington. The US already has what must be the world’s most generous fiscal dispensation for mortgage borrowers – uncapped tax relief for owner-occupiers, plus colossal “government sponsored entities” to guarantee loans, implicitly subsidise mortgage rates and promote securitisation. This fiscal regime created an environment in which you felt a fool unless you borrowed to the hilt – not just to buy your house but to keep your equity in it to a minimum, so as to liberate cash for other purposes.
This is the very root of the problem. Yet favoured responses to the subprime crisis on Capitol Hill include extensions of tax relief to poorer households (at present, it goes only to taxpayers who itemise their deductions), further vast expansions of the remit of, and resources potentially available to, the GSEs, and assorted new outright subsidies.
You can read the whole article here.
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Column: McCain's muddled math
In a new column for National Journal I argue that John McCain's fiscal arithmetic does not add up.
Not long ago John McCain was almost boasting that he knew little about economics. That kind of candor, a distinctive McCain trait, is likable but has its limits. His days of making jokes about his ignorance appear to be over. Worries about the economy began to dominate public opinion even before the current slowdown was properly under way.
Between now and November, those worries will only mount: The faltering economy is likely to get worse before it gets better. McCain is going to need an economic program, and he had better get used to talking about this subject as though it matters.
He obviously understands that -- but his recent statements and interviews suggest that he still has a lot of work to do. McCain is running as an orthodox fiscal conservative, with heavy stress on low taxes and tight control of public spending. He is pro-trade. He has modified, but not dropped, his support for personal retirement accounts alongside Social Security. On health care, he has a bunch of proposals for better cost control, but no plan that would deserve to be called comprehensive reform. And he is for stronger action on global warming: He aims to curb greenhouse gases with a cap-and-trade system that would oblige emitters to buy licenses for the privilege.
Stated that baldly, the platform looks all right. I think that the lack of any grander ambition on health care is a pity on the merits and a political mistake as well, but as for the rest, each element has plenty to recommend it. The problem is that the fiscal conservative core of the program, as it stands, is just not credible. McCain is promising to extend the Bush administration's tax cuts -- and cut some more. He is also promising to reduce and then eliminate the budget deficit. To do both of those things, McCain would need to make correspondingly savage cuts in spending, and he has not come close to saying how.
You can read the rest of the article here (link expires at the end of the week).
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Further updated: Naftagate
Curiouser and curiouser. Commenters on my previous post draw my attention to reports that the Clinton campaign also contacted Canadian officials to tell them the very thing that she excoriated Obama's adviser, Austan Goolsbee, for saying--namely, to take all the anti-NAFTA stuff with a grain of salt, it was all just politics. This is from AFP:
OTTAWA (AFP) — US presidential hopeful Hillary Clinton's campaign, while rapping rival Barack Obama for telling US voters he is anti-NAFTA and saying otherwise to Canada, tried to reassure Canada too, local media said Thursday.
A top aide of Canadian Prime Minister Stephen Harper meanwhile was identified as the likely source of an alleged leak that provoked a diplomatic fiasco involving both US Democratic presidential contenders.
Last month, Harper's chief of staff, Ian Brodie, purportedly made impromptu remarks to journalists about Clinton's US presidential bid, said Canadian reports.
The offhand comments apparently sought to downplay the potential impact on Canada of Clinton and Obama's attacks on the North American Free Trade Agreement (NAFTA) during stops in the US state of Ohio.
Brodie told reporters that the Clinton campaign had called the Canadian embassy in Washington to tell officials to take her anti-NAFTA rhetoric "with a grain of salt," said local media.
It beggars belief that if this is true, and Hillary knew about it, she would have made such a big deal about the Goolsbee meeting. This is what she said just before the Ohio vote:
NAFTA--I don't just criticize it. I don't have my campaign go tell a foreign government behind closed doors, "That's just politics. Don't pay attention to it."
I thought this campaign had eroded my capacity to be surprised by politics. I was wrong.
Update:
The NYT says (after getting around to this in the story's eighth paragraph) that the Canadian official who mentioned the Clinton campaign's intervention was muddled--or created the appearance of being muddled. Or at least, I think that's what it says.
But The Canadian Press said that this year Mr. Brodie did more than talk up the budget. According to the news agency, he also told a group of CTV employees that the campaign of Senator Hillary Rodham Clinton of New York had contacted the Canadian government and told it “not to worry” about her promise to reopen the trade agreement. Canada’s economy is heavily dependent on trade and most of its exports go to the United States, making Nafta a delicate issue.
The news agency suggests that CTV picked up on Mr. Brodie’s remarks and began reporting the story. It apparently found, however, that in fact it was the Obama campaign that had offered the reassurances to Canadian diplomats.
Further update:
Is this the last word on this bizarre tale? (Dumb question, no doubt.)
OTTAWA — Democratic presidential hopeful Hillary Clinton never gave Canada any secret assurances about the future of NAFTA such as those allegedly offered by Barack Obama's campaign, Prime Minister Stephen Harper's office said Friday.
With the NAFTA affair swirling over the U.S. election and Canadian officials skittish about saying anything else that might influence the race, it took the PMO two days to deliver the information.
After being asked whether Canadian officials asked for — or received — any briefings from a Clinton campaign representative outlining her plans on NAFTA, a spokeswoman for the prime minister offered a response Friday.
"The answer is no, they did not," said Harper spokeswoman Sandra Buckler.
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The tenacity of Hillary Clinton
I forgot to post my column from this morning 's FT on Hillary's wins in Ohio and Texas. For the many readers of this page (I know there are dozens of you) who get to the column through my portal, apologies. Here it is, in full, to save you any further clicking around.
Tenacity and hard work check Obama momentum
By Clive Crook
Published: March 5 2008 19:41 | Last updated: March 5 2008 19:41
Barack Obama remains favourite to win the Democratic nomination, but his advantage over Hillary Clinton has diminished.
Thanks to Texas and especially Ohio, there is a gleam in Mrs Clinton’s teeth once more. Just as in New Hampshire, just as on Super Tuesday, she has checked his supposedly irresistible momentum. Will commentators now stop saying that anything about this race is “inevitable”? The answer, inevitably, is no: we are as slow to learn as Mrs Clinton is to know when she is beat.
Mr Obama is still the favourite because he continues to lead in pledged delegates, allocated by the primaries and caucuses. Overturning this lead appears, as a matter of arithmetic, to be beyond Mrs Clinton. However, this by no means assures Mr Obama the nomination. The winner is going to be chosen, in effect, by the party’s unelected “superdelegates”, who can vote as they like.
The two campaigns will bring every pressure to bear. Mr Obama will say his lead in elected delegates obliges them to vote his way. Mrs Clinton will strive to neuter – I mean neutralise – that position. She will call for the disqualified delegates of Florida and Michigan (which broke the rules on the timing of their primaries) to be reinstated; she will call for Mr Obama’s caucus victories to be given less weight (arguing that the caucuses are not proper elections); above all, if she leads in the popular vote, she will say that this trumps Mr Obama’s delegate lead. This last seems especially important and it is now within her reach.
If you include Florida and Michigan (where Mr Obama was not even on the ballot, but so what?) then she already leads in the popular vote. Excluding Michigan but not Florida, she is within 300,000 votes of catching Mr Obama. Without either of those states, she is within 600,000 votes, out of a total cast of nearly 25m. Pennsylvania and the other remaining states give her a reasonable shot at closing that gap. If she does, watch the zeal with which she adopts upholding “the will of the people” as her watchword, elected delegates be damned. If she does not, her chances are less, but there will be other angles to work.
What went wrong for Mr Obama this week? The main answer must be Mrs Clinton’s remarkable tenacity. For once, her posture and her strategy have fully conformed to each other: she has been fighting hard, while making the case that the country needs a fighter in charge. She has also talked up her supposed advantage on national security, using an advertisement that asks voters who they want picking up the White House phone at 3am to deal with some emergency. John McCain also approves of that message, but this fight can wait.
And pity Austan Goolsbee, Mr Obama’s brilliant economic adviser, who dropped his boss in it by apparently assuring Canadian diplomats that Mr Obama’s tough talk on the North American Free Trade Agreement was political positioning and no cause for alarm. The timing could not have been worse, since no state is more sensitive to the supposed hurricane of destruction unleashed by imports than Ohio. Unfortunately, Mr Goolsbee’s steer was probably wishful thinking on his part. In any event, Mr Obama will now need to toughen up his anti-Nafta line even more, if that were possible.
Months more of vicious intra-party strife, and a tainted winner at the end. Of course, John McCain, as of Tuesday the anointed Republican nominee, is still favourite to lose in November. Many commentators regard it as inevitable.
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Updated: The race goes on
In the spirit of my previous post, I'm not much interested for now in the elected-delegate count. I'm trying to keep tabs on the popular vote, on the theory that this will carry great weight with the superdelegates. As I write, only two-thirds of the Texas votes are in, but it looks as though Obama might eke out a narrow win there, to set against Hillary's comfortable--though not crushing--win in Ohio. In terms of the popular vote, Vermont and Rhode Island will roughly cancel out. My back of the envelope (please don't hold me to this) says that Hillary is on course to win a little over 53 percent of the votes cast on Tuesday, trimming Obama's overall lead on that measure from roughly 900,000 to around 600,000. If she performs this well in the remaining primaries taken together, she would just fail to win a majority of the popular vote--excluding Florida. Add Florida back in, and she is almost exactly on schedule to tie the popular vote.
Whatever happens, she is not going to have a majority of elected delegates by the convention. But if she does as well as she did tonight or better for the rest of the nomination race, and if you count Florida (but not Michigan), she will have a case to put to the superdelegates. So the race goes on--and without a doubt it will be an increasingly bitter one.
All in all, a good night for Republicans.
Update:
Hillary is projected to win Texas narrowly. Let's say 53.5 percent of the popular vote, reducing Obama's lead to a little under 600,000. A further boost to morale and momentum, of course. But I think the rest of what I said stands.
Further update:
As I retire for the night I notice that the popular vote tally now puts Hillary ahead of Obama, so long as you add both Florida and Michigan (where, you recall, Obama was not on the ballot). Including Florida but not Michigan, Obama is about 300,000 votes ahead. Excluding both Florida and Michigan, he is a little less than 600,000 votes ahead.
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Updated: And now for the Clinton comeback?
The first Super Tuesday checked Obama’s momentum—but then he recovered with 11 straight wins in the following contests. That second remarkable surge had his campaign hoping for a knockout blow today—and even had many commentators calling for Hillary to withdraw. The Clinton campaign, playing the expectations game with some success, is now getting ready to deem anything but a clean sweep by Obama in the second Super Tuesday a setback for him. On the face of it, that seems absurd, but if Hillary wins comfortably in Ohio, and holds Obama to a draw in Texas—which is what the late polls are pointing to—the momentum will be back with her going into Pennsylvania, and this thing is by no means over.
Note that what follows is laid out in much more detail by the excellent Jay Cost at Real Clear Politics. This is just an abridged version of his analysis here and here. His line seems dead right to me.
The ceaseless focus on the elected delegates exaggerates the difficulty Hillary faces in turning this around. Unless Obama buries Hillary today—and the polls say that won’t happen—this race will go on, and it will turn in the end not on the ordinary delegates, but on the superdelegates. The question is, how will they decide which candidate to back? There are several scenarios, but the most likely is that they will be swayed by the popular vote. If Hillary can get ahead of Obama in the popular vote, she will have a strong moral claim to the support of the superdelegates. With the race for ordinary delegates inconclusive whatever happens in the remaining primaries, competition for the popular vote is the race that matters.
As of this morning, Hillary was behind roughly 52-48 in the popular vote. With the states remaining, she can still turn that around. Essentially she needs big winning margins—but not huge winning margins—in Texas, Ohio and Pennsylvania combined. That might not put her ahead in the elected-delegate count, but if she ends up ahead in the popular vote she can hope to get the superdelegates on side. The necessary winning thresholds for a lead in the popular vote depend on whether you take Michigan and Florida into account. Without those states (disqualified, for now, from the elected-delegate count) Hillary needs to win more than 55 percent of the popular vote, starting today, in all the remaining states taken together. If you include Florida (where Obama was at least on the ballot, unlike in Michigan) she needs to win more than 53 percent. If you include both Florida and Michigan (which would seem indefensible, though that will not trouble Hillary) the requirement shrinks to 52 percent. Reaching even the most demanding of those thresholds is hardly impossible.
Obama is still the favorite—and will remain the favorite unless Hillary crushes him today (in absolute terms, not relative to expectations). But if she does enough to stop the Obama momentum again, she will have a fighting chance of emerging the eventual winner. And, as Hillary never tires of saying, she is nothing if not a fighter.
Update:
This piece by Jonathan Alter goes through the delegate arithmetic. On the assumptions he describes--which are indeed quite favorable to Hillary--she can't catch Obama on the elected-delegate count. But consider this paragraph:
So no matter how you cut it, Obama will almost certainly end the primaries with a pledged-delegate lead, courtesy of all those landslides in February. Hillary would then have to convince the uncommitted superdelegates to reverse the will of the people. Even coming off a big Hillary winning streak, few if any superdelegates will be inclined to do so. For politicians to upend what the voters have decided might be a tad, well, suicidal.
"Reverse the will of the people." But what if these assumptions put Hillary ahead in the popular vote? I can't run those numbers, and they depend in any case on further assumptions about turn-out. (Jay, help me.) But I'm guessing that the scenario Alter describes could be enough to put Hillary in front on the popular vote (especially if you include Florida). In which case, it would be Obama, not her, who could be accused of using the superdelegates to reverse the will of the people.
This is still unlikely, because Alter's assumptions do, as he says, lean heavily in Hillary's favor. But the point is, she can lose the elected-delegate count and win the popular vote--and that, in the end, may be the vote that matters most.
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Where Hillary's campaign went wrong
My new column for the FT asks why Hillary's campaign has stumbled. A main reason, I argue, is the sincerity deficit.
When Texas and Ohio vote in Tuesday’s Democratic primaries, they may bring Hillary Clinton’s campaign for the presidency to an end. If she loses either of those states, her bid is over barring the formalities. This is a position few expected her to be in. Not long ago, success in the primaries and victory in the general election were regarded as almost inevitable. What went wrong?
For the answer, one should turn (as always) to the teachings of Marx. “The secret of success in life is sincerity,” Groucho once famously observed. “If you can fake that, you’ve got it made.”
This truth about the human condition applies with particular force to politics. Mrs Clinton tries hard to fake sincerity – so hard it is painful to watch. Sometimes, in fact, I suspect that she really is sincere and only looks as though she is faking. Barack Obama, on the other hand, may actually be sincere – and if he is not, he fakes it so well it makes no difference. Elections are won and lost formany reasons, but if I had to point to just one in the present case, this would be it.
You can read the whole column here.
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On Obama's speeches, cont'd
Gideon Rachman has posted a response to my post on his column about Obama's speeches. I'll offer a last brief word, and then leave the verdict on Obama's speeches to history. First of all, though, on a personal note, let me say how stunned I am to be accused of (in my previous life at The Economist) "remorseless logic, fierce invective, and a total lack of sentimentality". Gideon, you wound me, I bleed. Surely not. I was universally regarded as a complete softy--or so it seemed to me, at least. Don't tell me that wasn't so.
Though he still stops short of saying it outright, in his response Gideon relies more explicitly than before on the "Obama's fans are all idiots" explanation of the candidate's appeal. Obama, he suggests, is the Barbara Cartland of American politics. (I have to wonder how many people have been inspired by Barbara Cartland, but let that pass.) Gideon's tastes are more refined than that--as are mine, needless to say. But Obama's speeches impress a surprisingly wide demographic, if this point is correct. In fact, Obama seems especially liked by the kind of metropolitan intellectuals who share Gideon's and my disdain for brainless romantic fiction. Something about him, whatever it is, clicks with poor urban blacks and with Harvard academics. As I pointed out, many of his political enemies--smart ones and stupid ones alike--think he gives a great speech.
If somebody is unmoved by a speech, there is nothing anyone can say to change his mind. It is a personal thing, no doubt. But the "Obama's fans are all idiots" theory that underlies Gideon's view seems to me just a case of poor observation. It simply isn't true.
Continue reading "On Obama's speeches, cont'd" »
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On Obama's "lousy, empty speeches"
I’ve been giving some thought to a column by Gideon Rachman in last week's FT on the “lousy, empty speeches” of Barack Obama. Gideon is a brilliant fellow and, it so happens, an old friend. It has troubled me that he could be so wrong about this, and I feel I owe it to him to set him straight.
Surely the simplest test of a speaker is the effect he has on his audience. It is indisputable that Obama has moved and even inspired hundreds of thousands of listeners. This is something that even his political enemies concede. His speeches might be “empty”—I’ll come back to that—but how can a political speech be “lousy” if it does exactly what a great political speech is supposed to?
One answer of course might be that the people Obama impresses are all idiots, or more than usually susceptible to mass hysteria. Since I myself find his speeches moving, this argument does not much appeal to me—but that might be how Gideon accounts for Obama’s success. Some of the adulation is exaggerated enough, I admit, to lend this view credence. But it isn’t just Obamaniacs, or Democrats, or wavering independents such as myself who admire the man’s way with a speech. People who would never dream of voting for him agree that he is a fabulous speaker. Has the whole country lost its mind over Obama’s oratory? I think I would rather say, “He is a great speaker. Just look at the results.”
Gideon is on firmer ground when he calls the speeches vacuous. The problem here, though, is that the best political speeches are almost always vacuous, at least in the sense that Gideon invokes—namely, failing to get “stuck into the detail”.
Continue reading "On Obama's "lousy, empty speeches"" »
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Hillary's objection to politics
I filed a column yesterday that the FT will run on Monday (it will be posted on the blog Sunday night), asking what went wrong with Hillary Clinton’s campaign. The answer of course is many things, not least Barack Obama, but the thing I focus on is Hillary’s difficulty with seeming genuine—such a contrast with Barack's seemingly effortless authenticity. So much about her, so much of what she says, seems plotted, rehearsed, and false.
But I wish I had read this excellent article by Gloria Borger in US News first (thanks to Real Clear Politics for the link), because it might have made me tweak my argument somewhat. She concentrates on something very important which I think has been too little commented on--the fact, which is both obvious and astonishing when you think about it, that Hillary evidently does not care for politics. William Jefferson Clinton, AKA the "Comeback Kid," survived Paula Jones, Monica Lewinsky, impeachment, and open-heart surgery. He became a money-raising proposition for conservatives who hated him; a magnet for Democrats who loved his ideas and energy. During campaigns, the incorrigible candidate shook every hand and lingered in every crowd, as if he himself had been waiting hours in line to hear his own speech. Even in the darkest moments, a former staffer recalls, he always believed the sunny leader survives. "Hillary's husband taught us all that the optimistic, positive candidate is the one who wins," says a former Bill Clinton aide who supports Hillary Clinton. "He would tell us that constantly. And he was right."
But there is no joy in Hillaryville. In its place are anger (at the press, for being soft on Barack Obama), angst (at losing 11 straight contests), and apoplexy (at Obama, for daring to challenge a nomination that was supposed to have been wrapped up by now). In an aside at last week's Ohio debate, Clinton herself noted she hasn't found much happiness lately. "It's hard to find time to have fun on the campaign trail," she said, by way of explaining an anti-Obama screed she had delivered a few days earlier. Translation: This should have been over with already. This wasn't the plan. I don't like it.
Yes. Exactly right. Can you imagine Bill ever saying, “It’s hard to find time to have fun on the campaign trail”? The point of course is not that Bill always makes time for fun, it is that he so obviously loves campaigning itself: the campaign is not something he puts up with, it is something he lives for. Bill adores politics, Hillary does not. She wants power, and then to be left alone to exercise it. Politics is something you have to do to get there, a tiresome exhausting nuisance— and a process all too likely to choose the wrong person.
This impatience and exasperation with the prelude to power is another dimension of the larger falseness I’m complaining about—but it’s worse than that. Would the country be well-served by a president who thinks she has all the answers, and has no patience for the views of other, inevitably much less well-informed, people? (This is the Hillary of Hillarycare. She says she learned from that experience. Did she?) However competent she may be—and her record in fact is mixed—I doubt that America wants another president whose watchword is “Leave me alone, I know what I’m doing."
Just one thing in Gloria Borger’s piece I disagree with:
Obama…ran on one big idea. And while his notion of change remained constant, the candidate himself evolved and is still capable of surprise. Indeed, at the debate, Obama refreshingly admitted that "there's a vanity aspect and ambition aspect to politics." And when Clinton admonished him to reject—and not just denounce—the endorsement of Nation of Islam leader Louis Farrakhan, what did Obama do? He said, OK, fine, I'll do it. As if he had nothing left to prove.
I don’t think Obama has evolved in the sense she seems to intend. He is a more relaxed debater, yes, but he still seems the same man. When you listen to Obama—now, as at the beginning—you think you know him. That disarming admission about vanity and ambition does not signal a new trait. That glimpse of a real and unrehearsed person underneath is absolutely Obama, and has been all along.
One needs to keep reminding oneself, this isn’t necessarily going to make him a good president. But it is a big part of what has made him, from the outset, a uniquely attractive candidate.
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