Monday, March 08, 2010

Where are Obama's foreign confidants?

I recently asked several senior administration officials, separately, to name a foreign leader with whom Barack Obama has forged a strong personal relationship during his first year in office. A lot of hemming and hawing ensued.

One official mentioned French president Nicolas Sarkozy, who is scheduled to bring his glamorous wife to the White House residence this month for a couples dinner with Barack and Michelle Obama. But in France, Sarkozy's bitterness toward Obama, the product of several perceived snubs, is an open secret, reported widely in the French press. In a speech at the U.N. General Assembly in September Sarkozy appeared to mock Obama's signature disarmament initiative, saying "we are living in a real world, not a virtual world."

Angela Merkel's name also came up: Obama and the German chancellor, I was told, share a down-to-business pragmatism. But Merkel, too, has been conspicuously cool toward Obama ever since he made Berlin a stop on his 2008 election campaign. She stopped him then from appearing at the Brandenburg Gate and was said to be miffed last November when Obama didn't show for ceremonies celebrating the 20th anniversary of the fall of the Berlin wall. Anyway, diplomats say that Merkel has a much warmer relationship with Secretary of State Hillary Rodham Clinton.

No one named Gordon Brown. That's fairly remarkable: The relationship between the sitting British prime minister and U.S. president has been consistently close over the past 30 years. Think Reagan and Thatcher, Clinton and Blair, Bush and Blair. But Obama has been portrayed as dissing Brown ever since he presented him with a set of DVDs as a gift during their first meeting in Washington a year ago. Last fall the British press reported that the White House had turned down five requests for Obama to meet Brown one-on-one at the United Nations or the G-20 summit.

Finally, I was offered a name I didn't expect: Dmitry Medvedev. Obama, I was assured, has built a solid relationship with the Russian president during their several bilateral meetings, which have focused in part on a new nuclear arms control agreement that both could count as a distinctive achievement. But the deal hasn't been clinched -- maybe because Vladimir Putin, whom Obama has held at arm's length, doesn't like it. And could it really be that an American president has found his closest foreign partner in the Kremlin?

The paradox here is that Obama remains hugely popular abroad -- from Germany and France to countries where anti-Americanism has recently been a problem, such as Turkey and Indonesia. His following means that, in democratic countries at least, leaders have a strong incentive to befriend him. And yet this president appears, so far, to have no genuine foreign friends. In this he is the opposite of George W. Bush, who was reviled among the foreign masses but who forged close ties with a host of leaders -- Aznar of Spain, Uribe of Colombia, Sharon and Olmert of Israel, Koizumi of Japan.

Jealousy or political rivalry may play a part -- Sarkozy is one of several Europeans who have wanted to assume the role of Obama's closest ally and reacted poorly when he didn't respond. But another big cause seems to be lack of interest on Obama's part. Focused intently on his domestic agenda, the president is said to be reluctant to take time to build relationships with foreign leaders. If something has needed to be done or decided, he has readily picked up the phone. If not, he generally hasn't been available.

Obama also hasn't hesitated to publicly express displeasure with U.S. allies. He sparred all last year with Israel's Binyamin Netanyahu; he expressed impatience when Japan's Yukio Hatoyama balked at implementing a military base agreement. He has repeatedly criticized Afghanistan's Hamid Karzai, and he gave up the videoconferences Bush used to have with Iraq's Nouri al-Maliki.

An argument can be made that none of this matters. Bush, after all, was often criticized for depending too heavily on personal relationships -- remember how he looked into Putin's soul? -- and his pals didn't save his administration from being universally condemned as "unilateralist." The Obama administration, in contrast, can argue that it has done pretty well in lining up European support on key matters such as Afghanistan and Iran. And Obama's personal popularity continues to provide leverage with leaders around the world, whether they hit it off with him or not.

Still, it's worth wondering: Would Sarkozy have fought French public opinion and sent more troops to Afghanistan (he has refused) if he had been cultivated more by Obama? Would Israel's Netanyahu be willing to take more risks in the (moribund) Middle East peace process if he believed he could count on this U.S. president? Would Karzai cooperate more closely with U.S. commanders in the field if Obama had embraced him?

The answers seem obvious. In foreign as well as domestic affairs, coolness has its cost.

Saturday, March 06, 2010

Bad publicity new 'risk' factor on Wall St.

Rose Gordon
March 05 2010

In recent months, the financial services industry – banks in particular –
has stepped up its PR and marketing activities, looking to rebuild trust
with a recession-worn public skeptical of its motives. Citibank, for
example, opened a new blog in February, posting video of its executives
explaining how they've changed since the financial meltdown.

On Wall Street, where your brand is one of those intangible assets that
investors consider right along with the P&L statement, banks are
recognizing that their brands need a repositioning in order to not only
ward off regulator scrutiny, but also return to or maintain profitability.

But it was Goldman Sachs that put those concerns into writing last week
when it filed its 2009 10K. The Wall Street Journal noted the curious new
risk of “adverse publicity” in the investment banking firm's February 26
filing. Goldman wrote:

The financial crisis and the current political and public sentiment
regarding financial institutions has resulted in a significant amount
of adverse press coverage, as well as adverse statements or charges
by regulators or elected officials.

Dealing with that attention “is time consuming and expensive,” and can
“have a negative impact on our reputation and on the morale and performance
of our employees, which could adversely affect our businesses and results
of operations,” the bank noted.

To elevate “bad press” to the status of a potential risk to its business
along with market fluctuations and natural disasters, demonstrates how
serious Goldman sees the threat of government and market reaction to public
sentiment.

“This is really a hedge to protect them in case something goes really
wrong,” notes Michael Porter, president and cofounder of New York IR firm
Porter LeVay & Rose.

Goldman Sachs VP of media relations Ed Canaday confirms this is the first
time the firm has added this particular risk, but declines further comment.

Those working in financial and corporate PR likely see their day's work
validated by this admission from the global firm that yes, corporate
reputation management impacts the bottom line.

“I think it is an ‘A-Ha' moment,” says Ryan Barr, SVP and director of
financial relations at Hill & Knowlton in New York. He calls the example a
representation of the continued convergence of corporate and financial
communications work and the need for a fully integrated communications
approach.

“At the same time, I don't think there's a CEO out there that would say
their reputation doesn't affect multiple aspects of their business,” he
adds.
But on Wall Street, reputation can be a defining factor.

“Wall Street is very emotional,” points out Porter. “This is Goldman…
There's no one in the financial industry that wouldn't do business with
them. That being said, people do get worried because everyone's out there
taking shots at them. It's got to rattle their customers at some point.”

Goldman isn't alone in its concerns. Beth Haiken, SVP in Ogilvy PR's
corporate practice in San Francisco, notes that another image-challenged
company, AIG, posted a similar missive in its 2009 10K.

“Adverse publicity and public reaction to events concerning AIG has had and
may continue to have a material adverse effect on AIG,” it wrote.

Analysts will often dive into the risks contained in an annual 10K to find
the meat of what's going on at a company, points out Haiken, who led global
PR at The PMI Group, a Bay Area mortgage-insurance and credit-enhancement
company, prior to joining Ogilvy.

“It used to be risk factors were pretty straightforward, mostly external,
concrete risks,” she says. “My guess is what you'd see is they are just
getting longer and longer… [It's] where a company can try to head off a
lawsuit. There's a prevention factor here.”

Haiken suggests companies will need to more carefully consider the writing
of their 10Ks in the future as public scrutiny of corporations – and the
risk that comes with it – remains high.

“I think what we may see a bit more of is companies really taking a
reputation risk-management approach, identifying ahead of time what risks
the brand faces,” adds Barr.

Goldman, along with its lawyers, clearly marked its precedent here, but it
is just the start of 10K season and many more companies and their
communications teams have yet to file.

“It'll be interesting to see if this is an isolated incident or the
beginning of a trend,” says Haiken.

Wednesday, March 03, 2010

Obama's Discarded Wisdom

Breitbart.tv has a terrific two-minute video featuring clips of Barack Obama commenting on the need to build consensus before attempting to enact major social legislation. (If the above link doesn't work, try this one.) As a public service, we've transcribed the Obama comments:

• "My understanding of the Senate is, is that you need 60 votes to get something significant to happen, which means that Democrats and Republicans have to ask the question: Do we have the will to move an American agenda forward, not a Democratic or Republican agenda forward?"--CBS-TV election night interview, Nov. 2, 2004

• "The bottom line is that our health-care plans are similar. The question, once again, is: Who can get it done? Who can build a movement for change? This is an area where we're going to have to have a 60% majority in the Senate and the House in order to actually get a bill to my desk. We're going to have to have a majority, to get the bill to my desk, that is not just a 50-plus-1 majority."--Change to Win convention, Sept. 25, 2007

• "You've got to break out of what I call the sort of 50-plus-1 pattern of presidential politics. Maybe you eke out a victory of 50 plus 1, but you can't govern. You know, you get Air Force One--I mean, there are a lot of nice perks, but you can't deliver on health care. We're not going to pass universal health care with a 50-plus-1 strategy."--interview with the Concord (N.H.) Monitor, Oct. 9, 2007

• "You know, one of the arguments that sometimes I get with my fellow progressives--and some of these have flashed up in the blog communities on occasion--is this notion that we should function sort of like Karl Rove, where we identify our core base, we throw them red meat, we get a 50-plus-1 victory. But see, Karl Rove doesn't need a broad consensus, because he doesn't believe in government. If we want to transform the country, though, that requires a sizable majority."--Center for American Progress, July 12, 2006

Who Are The Al Qaeda Seven?

Sunday, February 28, 2010

He's No FDR

President Obama spent seven hours last week acting like a committee chairman, not a president. Rather than preside over the nationally televised health care “summit” of Democratic and Republican members of Congress, Obama was a participant. He big-footed Democrats and responded to Republican statements himself. He talked and talked and talked, considerably more than anyone else and for a total of two hours. When Obama delivered a concluding monologue, the TV cameras panned to a drowsy and bored group of senators and House members, the Republicans especially.

Did Obama lower the presidency to the level of mere legislator? Perhaps. But I think Obama’s behavior at the summit answers a separate question, one that’s lingered since he was elected more than 15 months ago. Is Obama the new FDR? The answer is no.

If Franklin Delano Roosevelt were president today, the summit never would have happened. As the top priority on his agenda, liberal health care reform would have been enacted already. For Obama, the summit was a last-gasp attempt to revive his moribund legislation. More than likely, it will fail.

The reason is tied to what is probably the greatest difference between FDR and Obama. Roosevelt took command of Washington. Obama hasn’t. “FDR became the father of the modern presidency by moving the Chief Executive to the center of the American political universe,” John Yoo writes in his new book on presidential power, Crisis and Command. “Roosevelt’s revolution radically shifted the balance of power among the three branches of government.”

Obama has weakened the presidency and strengthened the power of Congress—a shift in the other direction. FDR seized legislative authority. The bills that Congress passed in his first 100 days and beyond were produced by the Roosevelt administration and ratified reflexively by Congress. There’s a reason you probably don’t know who Henry Rainey and Joe Robinson were. They were rubber stamps, Rainey as House speaker, Robinson as Senate majority leader.

But in Obama’s Washington, Speaker Nancy Pelosi and Majority Leader Harry Reid are powerhouses. The job of actually writing bills—the economic stimulus, health care, cap and trade, the omnibus appropriation—was turned over to them and their colleagues. To put it more bluntly, Obama has abdicated where FDR ruled like a king (at least in his first year in the White House).

Roosevelt’s strategy worked. Obama’s hasn’t. The FDR agenda passed, though the Supreme Court later struck down important parts of it. Except for the stimulus, Obama’s top priorities haven’t passed. FDR moved on, in 1935 and 1936, to getting the so-called Second New Deal (Social Security, the National Labor Relations Act) enacted. Obama’s future looks less rosy.

It’s clear that Roosevelt had an ambitious vision and a far more expansive idea of the presidency than Obama has. When I first heard the tale that Obama had told congressional Democrats to write the bills and he’d sell them, I thought it was apocryphal. Now I’m not so sure. Obama seems to see presidential power as purely rhetorical.

Two appealing aspects of Roosevelt’s public style have not been duplicated by Obama. He hasn’t come close. “In contrast to presidents who inundate the nation with words, Roosevelt rationed his broadcasts,” writes presidential historian Fred Greenstein in The Presidential Difference. He gave four fireside chats his first year, then fewer. In a letter cited by Greenstein, FDR said “the public psychology cannot be attuned for long periods of time to a constant repetition of the highest note in the scale.”

Obama, in contrast, talks incessantly on practically any subject. He was interviewed at halftime of the recent Duke-Georgetown basketball game on—you guessed it—basketball. He has debased the value of the “exclusive” interview with the president by granting so many. Obama is ubiquitous, and always talking. He’s lost his connection with millions of Americans, who’ve tuned him out. He’s sparked a political backlash. FDR didn’t until his second term.

Then there’s the mystery of FDR the man. “The man behind the style was an enigma,” Greenstein writes. This created a mystique and enhanced his influence. Obama is relatively transparent and has less clout. When he tries to promote a deal in public or intimidate an opponent—he tried both at last week’s summit—he comes across as a bossy senator or chief of staff.

To Obama’s credit, he hasn’t claimed to be the reincarnation of FDR. At a fundraiser last year, he said he’d put his “first four months (in office) up against any prior administration since FDR.” The “since” gets Obama off the hook. The FDR issue has been raised mostly by friendly liberals in the media.

It’s an unfair comparison. Roosevelt’s reputation for imposing a liberal makeover on America is impossible to match. But Obama has tried. And in one significant way he’s been successful. Like FDR, he’s broadened the size and scope of the federal government. Should his health care and cap and trade bills pass, along with the authority to seize any financial institution whose collapse would be “a systemic risk” to the economy, Obama would put himself in FDR’s class as a supersizer of Washington’s power. He’s not there yet.

By following another Roosevelt example, Obama has bought trouble. FDR thought government spending would spur economic recovery. It didn’t. And his surge in regulation and tax increases actually impeded economic growth and job creation.

So, too, with Obama. Same policies, same result. Yet he appears puzzled why there were 4 million fewer jobs in the country after a year of his presidency. Liberal critics such as economist Paul Krugman insist FDR’s stimulus wasn’t large enough and neither is Obama’s. Conservatives believe Obama’s policies are wrong, and what works are across-the-board individual and corporate tax cuts. Either way, Obama comes up short.

For Obama, the most brutal disparity between him and FDR is likely to come in November. After the Democratic landslide of 1932, Democrats won still more seats in Congress in 1934. In this year’s midterm congressional elections, that’s an outcome Obama can only dream about.

Fred Barnes is executive editor of The Weekly Standard.

Our own Greek tragedy

While President Obama was making his latest pitch for a brand new, even more unsustainable entitlement at the health care "summit," thousands of Greeks took to the streets to riot. An enterprising cable network might have shown the two scenes on a continuous split screen - because they're part of the same story. It's just that Greece is a little further along in the plot: They're at the point where the canoe is about to plunge over the falls. America is further upstream and can still pull for shore, but has decided instead that what it needs to do is catch up with the Greek canoe. Chapter One (the introduction of unsustainable entitlements) leads eventually to Chapter 20 (total societal collapse): The Greeks are at Chapter 17 or 18.

What's happening in the developed world today isn't so very hard to understand: The 20th century Bismarckian welfare state has run out of people to stick it to. In America, the feckless insatiable boobs in Washington, Sacramento, Albany and elsewhere are screwing over our kids and grandkids. In Europe, they've reached the next stage in social democratic evolution: There are no kids or grandkids to screw over. The United States has a fertility rate of around 2.1, or just over two kids per couple. Greece has a fertility rate of about 1.3: 10 grandparents have six kids have four grandkids - i.e., the family tree is upside down. Demographers call 1.3 "lowest-low" fertility - the point from which no society has ever recovered. And compared to Spain and Italy, Greece has the least worst fertility rate in Mediterranean Europe.

So you can't borrow against the future because, in the most basic sense, you don't have one. Greeks in the public sector retire at 58, which sounds great. But, when 10 grandparents have four grandchildren, who pays for you to spend the last third of your adult life loafing around?

By the way, you don't have to go to Greece to experience Greek-style retirement: The Athenian "public service" of California has been metaphorically face-down in the ouzo for a generation. Still, America as a whole is not yet Greece. A couple of years ago, when I wrote my book "America Alone," I put the Social Security debate in a bit of perspective: On 2005 figures, projected public pensions liabilities were expected to rise by 2040 to about 6.8 percent of GDP. In Greece, the figure was 25 percent. In other words, head for the hills, Armageddon, outta here, The End. Since then, the situation has worsened in both countries. And really the comparison is academic: Whereas America still has a choice, Greece isn't going to have a 2040 - not without a massive shot of Reality Juice.

Is that likely to happen? At such moments, I like to modify Gerald Ford. When seeking to ingratiate himself with conservative audiences, President Ford liked to say: "A government big enough to give you everything you want is big enough to take away everything you have." Which is true enough. But there's an intermediate stage: A government big enough to give you everything you want isn't big enough to get you to give any of it back. That's the point Greece is at. Its socialist government has been forced into supporting a package of austerity measures. The Greek people's response is: Nuts to that. Public sector workers have succeeded in redefining time itself: Every year, they receive 14 monthly payments. You do the math. And for about seven months' work - for many of them the workday ends at 2:30 p.m. When they retire, they get 14 monthly pension payments. In other words: Economic reality is not my problem. I want my benefits. And, if it bankrupts the entire state a generation from now, who cares as long as they keep the checks coming until I croak?

We hard-hearted, small-government guys are often damned as selfish types who care nothing for the general welfare. But, as the Greek protests make plain, nothing makes an individual more selfish than the socially equitable communitarianism of big government. Once a chap's enjoying the fruits of government health care, government-paid vacation, government-funded early retirement, and all the rest, he couldn't give a hoot about the general societal interest. He's got his, and to hell with everyone else. People's sense of entitlement endures long after the entitlement has ceased to make sense.

The perfect spokesman for the entitlement mentality is the deputy prime minister of Greece. The European Union has concluded that the Greek government's austerity measures are insufficient and, as a condition of bailout, has demanded something more robust. Greece is no longer a sovereign state: It's General Motors, and the EU is Washington, and the Greek electorate is happy to play the part of the United Auto Workers - everything's on the table except anything that would actually make a difference. In practice, because Spain, Portugal, Italy and Ireland are also on the brink of the abyss, a "European" bailout will be paid for by Germany. So the aforementioned Greek deputy prime minister, Theodoros Pangalos, has denounced the conditions of the EU deal on the grounds that the Germans stole all the bullion from the Bank of Greece during the Second World War. Welfare always breeds contempt, in nations as much as inner-city housing projects. How dare you tell us how to live! Just give us your money and push off.

Unfortunately, Germany is no longer an economic powerhouse. As Angela Merkel pointed out a year ago, for Germany, an Obama-sized stimulus was out of the question simply because its foreign creditors know there are not enough young Germans around ever to repay it. Over 30 percent of German women are childless; among German university graduates, it's over 40 percent. And for the ever dwindling band of young Germans who make it out of the maternity ward, there's precious little reason to stick around. Why be the last handsome blond lederhosen-clad Aryan lad working the late shift at the beer garden in order to prop up singlehandedly entire retirement homes? And that's before the EU decides to add the Greeks to your burdens. Germans, who retire at 67, are now expected to sustain the unsustainable 14 monthly payments per year for Greeks who retire at 58.

Think of Greece as California: Every year an irresponsible and corrupt bureaucracy awards itself higher pay and better benefits paid for by an ever-shrinking wealth-generating class. And think of Germany as one of the less profligate, still just about functioning corners of America such as my own state of New Hampshire: Responsibility doesn't pay. You'll wind up bailing out anyway. The problem is there are never enough of "the rich" to fund the entitlement state, because in the end, it disincentivizes everything from wealth creation to self-reliance to the basic survival instinct, as represented by the fertility rate. In Greece, they've run out Greeks, so they'll stick it to the Germans, like French farmers do. In Germany, the Germans have only been able to afford to subsidize French farming because they stick their defense tab to the Americans. And in America President Obama, Nancy Pelosi and Harry Reid are saying we need to paddle faster to catch up with the Greeks and Germans. What could go wrong?

Mark Steyn is the author of the New York Times best-seller "America Alone" (Regnery, 2006).

U2 Lists: Top 10 Types of Sustenance in U2's Lyrics

I'd break bread and wine, but far less often than honey


[Ed. note: This is the 17th in a "U2 Lists" series, where @U2 staffers pick a topic and share their personal rankings on something U2-related.]

Any way you slice it, U2's music feeds the soul in more ways than you'd realize. When you think of U2's lyrics, typically people think of the holy trinity of political, spiritual and emotional to describe what their music is all about. If you dig deeper, you'll find an overlooked theme in their music that Bono alludes to in their unreleased song, Mercy: "If you hunger, baby, let me feed it." Nourishment comes in many forms, and I would like to propose a list of the top 10 types of sustenance inspired in U2’s music.

1) Honey

This sweet regurgitation from honey bees is the leading food item Bono takes inspiration from. It is referenced in at least 10 U2 songs, with Wild Honey being the most obvious tribute to this yummy delight. Bono explains how honey is made in the outtake Levitate: "To be the bee / To be the bee and the flower / Before the sweetness / Before the sweetness turns to sour." He tightened up the lyric when Levitate became Always: "To be a bee and the flower / Before the sweetness turns to sour." Even Better Than the Real Thing brings us "You're honey, child, to a swarm of bees." A Man and a Woman tells us "But you're like honey on my tongue," which is the same reference Bono gives in both Hawkmoon 269 and Summer Rain. The Rattle and Hum b-side A Room at the Heartbreak Hotel gives us "You let them suck your life out like honey." Passengers' Elvis Ate America mentions "honey, potato chips and cheese." Not to mention, I Still Haven't Found What I'm Looking For states "I have kissed honey lips."

2) Alcohol

For a band from Ireland, it's no surprise that alcohol in some form would be mentioned in song. From the band's earliest days, Cartoon World mentions "He didn't give me a lot of beer." To the best of my knowledge, that is the only reference to beer. Holy Joe gives a nod to champagne, but it's wine that seems to inspire Bono more. I suppose wine is a better sounding word in songs, especially since it can rhyme with many things. Wine has also been a bigger influence to Bono since Paul McGuinness first taught him to appreciate the beverage. Lyrics with Bible scripture references are where wine is used mostly: Until the End of the World, Mercy, and Acrobat. The Unforgettable Fire gives us "red wine that punctures the skin." And there's the outtake Xanax and Wine.

Bono's not afraid to write about hard liquors as well. He mentions "Tequila and orange, Jamaica and rum" in Summer Rain. He also alludes to hard liquor in the title Two Shots of Happy, One Shot of Sad. While it's a stretch, cocoa butter can be made from chocolate liquor, which would put the line "She's cocoa butter, baby, she's the glue" in Big Girls Are Best in this category too.

3) Fruit

From wearing Lemon, and bringing oranges from a tank in Cedars of Lebanon, fruit has been used in a few ways by Bono. The earliest reference to fruit can be found in Boy/Girl to describe complexion "her skin is coloured strawberries and cream." He also uses "cherry red" to describe lips in Walk to the Water. Edge also gets into the fruit action when he tells us to "have another grape" in Numb.

4) Non-Alcoholic Beverages

Bono must have a thirst that needs quenching while in the studio because he sings about many types of drinks other than alcoholic ones. Coffee and water are the most popular (Cedars of Lebanon, Electrical Storm, Hawkmoon 269, and Trip Through Your Wires). Bono's soft drink of choice appears to be Coca-Cola, as sung in Promenade and The Playboy Mansion. Even Better Than the Real Thing was a coy nod to Coca-Cola's slogan "The Real Thing" from around the same era. Mofo mentions lemonade, and "If O.J. is more than a drink" is cleverly used in The Playboy Mansion.

5) Fast Food

Bono has given lyrical equal time between McDonald’s and Burger King. The Playboy Mansion gives props to McDonald's with "A Big Mac bigger than we think." In Elvis Ate America, Burger King gets the spotlight with "ate a king burger and kept getting bigger."

6) People

As crazy as it sounds, if you take Bono's lyrics literally, he references cannibalism twice in U2's discography. Bono sings "Every artist is a cannibal" in The Fly. He chose to be a bit more descriptive in Crumbs From Your Table, by singing "With a mouth full of teeth, you ate all your friends."

7) Ice Cream

Sorbet and sherbet just aren't cool enough when it comes to frozen dairy products in U2 songs. Ice cream is where it's at in Elvis Ate America, Holy Joe and Get On Your Boots.

8) The Sweetest Things

"Ain't love the sweetest thing?" Not really when bubble gum and sugar are used in U2 lyrics. Bubble gum can be found in Discotheque. Bono finds "sugar" both as a term of endearment in Original of the Species, and a way to describe someone as "Some sweet delight, a sugar rush" in Love You Like Mad. Get On Your Boots refers to "candy floss," which is blown sugar. Even the outtake Flower Child refers to sugar.

9) Special Ingredients

There are several songs with a single referenced ingredient, all of which are worth noting. Beautiful Day mentions tuna being cleared out by the fleets. "I can taste the salt in the sea" is found in Kite. U2 performs the Allen Ginsberg poem, Drunk Chicken/America. There's even "butter on toast" in Winter.

10) Artificial Ingredients

It would seem that U2 inspires many comedians with food-related parodies. Two worth bringing up in this list include Chris Kattan and Ben Stiller. Chris Kattan parodied Bono during episode 2 of season 25 of Saturday Night Live. This parody pokes fun at NetAid, and the fact that no one showed up for it. Kattan sings "Salami, cheese and pickles help make starving people strong" to the tune of One. Ben Stiller also uses One to parody U2 with a commercial for "Lucky Clovers" cereal.

Monday, February 22, 2010

The Stimulus Evidence One Year On. Over five years, my research shows an extra $600 billion of public spending at the cost of $900 billion in private

The first anniversary of the Obama stimulus package generated a lot of discussion about whether and how much the package (originally estimated at $787 billion but now priced at $862 billion) moderated the recession. These are complex questions, and their answers require more than merely counting the quantity of goods and services that the government purchased or the number of people that the government hired.

We need to ask whether the government's spending reduced or enhanced private spending and whether public-sector hiring lowered or raised private hiring. This requires an empirical model based on the history of past fiscal actions in the U.S. or other countries. The administration must have such a model, but my own analysis makes me skeptical about the numbers they've reported about GDP increases and saved jobs.

To realistically evaluate the stimulus, I've been using long-term U.S. macroeconomic data to estimate some key economic relationships: the effects on GDP from increased government purchases (the spending multiplier) and from increased taxes (the tax multiplier).

For spending, the main results come from fluctuations in defense outlays associated with major wars such as World War I, World War II and the Korean War. The data feature large positive values in the early stages of wars (extra spending of 26% of GDP in 1942) and large negative values in war aftermaths (27% of GDP in 1946).

Although stimulus packages usually concentrate on nondefense outlays, the information from defense spending is useful for two reasons. First, the defense-spending multiplier can be precisely estimated from the available data and, second, this multiplier provides a reasonable gauge (and likely an upper bound because of the strong wartime boost to labor supply due to patriotism) for the effects of nondefense government purchases.

I estimate a spending multiplier of around 0.4 within the same year and about 0.6 over two years. Thus, if the government spends an extra $300 billion in each of 2009 and 2010, GDP would be higher than otherwise by $120 billion in 2009 and $180 billion in 2010. These results apply for given taxes and, therefore, when spending is deficit-financed, as in 2009 and 2010. Since the multipliers are less than one, the heightened government outlays reduce other parts of GDP such as personal consumer expenditure, private domestic investment and net exports.

For taxes, I focus on a newly constructed measure of average marginal income-tax rates; these rates apply to federal and state income taxes and the Social Security payroll tax. I estimate that an increase in marginal tax rates reduces GDP, particularly in the next year. When one factors in the typical relationship between tax rates and tax revenue, the multiplier is around minus 1.1. Hence, an increase in taxes by $300 billion lowers GDP the next year by about $330 billion.

Christina Romer, the chair of President Obama's Council of Economic Advisers, and her husband, David, have been major contributors to research on tax multipliers. Their results, which rely on the history of U.S. tax legislation since 1945, show tax multipliers of larger magnitude than the one I found. (So my conclusions here—based on the coming increases in taxes—would be strengthened if I switched to their estimates.) By contrast, I have not seen serious scientific research by Ms. Romer on spending multipliers, so I cannot understand her rationale for assuming values well above one, as she has apparently done when evaluating the fiscal stimulus plan. If the spending multiplier were really larger than one, it would mean that GDP would rise by even more than the rise in government spending.

My estimates allow me to assess the 2009-10 fiscal-stimulus package, which I characterize as roughly $300 billion of added government purchases in each of 2009 and 2010. I assume that, as of 2011, government spending goes back down to its 2008 level, although I could assume—perhaps more realistically—that the added spending is permanent.

I suppose that taxes do not change in 2009-10, so that the incremental spending is deficit-financed. The spending multipliers that come from my research imply that GDP rises by $120 billion (or 0.8% of GDP) in 2009 and $180 billion (or 1.2% of GDP in 2010)—all compared to the baseline of no stimulus package. These results imply that other parts of GDP fall by $180 billion in 2009 and $120 billion in 2010.

In other words, the deal looks pretty good in the short run because we "buy" the added government outlays by paying 60 cents on the dollar in 2009 (losing 180 in private spending to get 300 in government spending) and 40 cents on the dollar in 2010.

How attractive this short-run deal looks depends on how much one values the added governmental activity. If it's considered useful public investment—such as building a needed highway or, more modestly, fixing potholes—it might look good. If it's wasteful spending in a hastily constructed and highly political stimulus package, it looks bad.

But these calculations are not nearly the end of the story, because the added $600 billion of government spending leads to a correspondingly larger public debt. These added obligations must be paid for sometime by raising taxes (unless future government spending declines below its 2008 level, an unlikely scenario).

I suppose that the government collects an additional $300 billion of taxes in each of 2011 and 2012. The timing of the future taxes does not matter for the main calculations—the key point is that the government has no free lunch and must collect the extra taxes eventually. Since I assume a tax multiplier of minus 1.1, applying with a one-year lag, the higher taxes reduce GDP by $330 billion in each of 2012 and 2013.

We can now put the elements together to form a "five-year plan" from 2009 to 2013. The path of incremental government outlays over the five years in billions of dollars is +300, +300, 0, 0, 0, which adds up to +600. The path for GDP is +120, +180, +60, minus 330, minus 330, adding up to minus 300. GDP falls overall because the famous "balanced-budget multiplier"—the response of GDP when government spending and taxes rise together—is negative. This result accords with the familiar pattern whereby countries with larger public sectors tend to grow slower over the long term.

The projected effect on other parts of GDP (consumer expenditure, private investment, net exports) is minus 180, minus 120, +60, minus 330, minus 330, which adds up to minus 900. Thus, viewed over five years, the fiscal stimulus package is a way to get an extra $600 billion of public spending at the cost of $900 billion in private expenditure. This is a bad deal.

The fiscal stimulus package of 2009 was a mistake. It follows that an additional stimulus package in 2010 would be another mistake.

Mr. Barro is a professor of economics at Harvard University and a senior fellow at Stanford University's Hoover Institution.

Sunday, February 21, 2010

Rumsfeld's Rules: Advice on government, business and life.

By Donald Rumsfeld

The Wall Street Journal, Monday, January 29, 2001

Many of these rules, reflections and quotations came from my role as chairman of the “transition team” for President Ford and my service as White House chief of staff. Others came from experiences as a U.S. naval aviator, a member of Congress, ambassador to the North Atlantic Treaty Organization, secretary of defense, presidential Middle East envoy, business executive, chairman of the U.S. Ballistic Missile Threat Commission, and other experiences.

These reflections and quotations have been gathered over the past 40 years. Credit is given where known. As the quotation has it, “If it's not true, it's still well founded.” -- Unknown

Serving in the White House
(for the White House chief of staff and senior staff)

  • Don't accept the post or stay unless you have an understanding with the president that you're free to tell him what you think “with the bark off” and you have the courage to do it.

  • Visit with your predecessors from previous administrations. They know the ropes and can help you see around some corners. Try to make original mistakes, rather than needlessly repeating theirs.

  • Don't begin to think you're the president. You're not. The Constitution provides for only one.

  • In the execution of presidential decisions work to be true to his views, in fact and tone.

  • Know that the immediate staff and others in the administration will assume that your manner, tone and tempo reflect the president's.

  • Learn to say “I don't know.” If used when appropriate, it will be often.

  • If you foul up, tell the president and correct it fast. Delay only compounds mistakes.

  • Walk around. If you are invisible, the mystique of the president's office may perpetuate inaccurate impressions about you or the president, to his detriment. After all, you may not be as bad as they're saying.

  • In our system leadership is by consent, not command. To lead, a president must persuade. Personal contacts and experiences help shape his thinking. They can be critical to his persuasiveness and thus to his leadership.

  • Be precise. A lack of precision is dangerous when the margin of error is small.

  • Preserve the president's options. He may need them.

  • It is easier to get into something than to get out of it.

  • Don't divide the world into “them” and “us.” Avoid infatuation with or resentment of the press, the Congress, rivals, or opponents. Accept them as facts. They have their jobs and you have yours.

  • Amid all the clutter, beyond all the obstacles, aside from all the static, are the goals set. Put your head down, do the best job possible, let the flak pass, and work toward those goals.

  • Don't say “the White House wants.” Buildings can't want.

  • Leave the president's family business to him. You will have plenty to do without trying to manage the first family. They are likely to do fine without your help.

  • Make decisions about the president's personal security. He can overrule you, but don't ask him to be the one to counsel caution.

  • Being vice president is difficult. Don't make it tougher.

  • Don't automatically obey presidential directives if you disagree or if you suspect he hasn't considered key aspects of the issue.

  • The price of being close to the president is delivering bad news. You fail him if you don't tell him the truth. Others won't do it.

  • You and the White House staff must be and be seen to be above suspicion. Set the right example.

  • The role of White House chief of staff is that of a “javelin catcher.” -- Jack Watson

  • Don't speak ill of your predecessors or successors. You didn't walk in their shoes.

  • Remember the public trust. Strive to preserve and enhance the integrity of the office of the presidency. Pledge to leave it stronger than when you came.

  • Don't blame the boss. He has enough problems.

Keeping Your Bearings in the White House

  • Enjoy your time in public service. It may well be one of the most interesting and challenging times of your life.

  • Don't think of yourself as indispensable or infallible. As Charles de Gaulle said, the cemeteries of the world are full of indispensable men.

  • Let your family, staff and friends know that you're still the same person, despite all the publicity and notoriety that accompanies your position.

  • Have a deputy and develop a successor. Don't be consumed by the job or you'll risk losing your balance. Keep your mooring lines to the outside world -- family, friends, neighbors, people out of government and people who may not agree with you.

  • When asked for your views, by the press or others, remember that what they really want to know is the president's views.

  • Most of the 50 or so invitations you receive each week come from people inviting the president's chief of staff, not you. If you doubt that, ask your predecessor how many he received last week.

  • Keep your sense of humor. As Gen. Joe Stillwell said, “The higher a monkey climbs, the more you see of his behind.”

  • Be yourself. Follow your instincts. Success depends, at least in part, on the ability to “carry it off.”

  • Know that the amount of criticism you receive may correlate somewhat to the amount of publicity you receive.

  • If you are not criticized, you may not be doing much.

  • From where you sit, the White House may look as untidy as the inside of a stomach. As is said of the legislative process, sausage making and policy making shouldn't be seen close-up. Don't let that panic you. Things may be going better than they look from the inside.

  • Be able to resign. It will improve your value to the president and do wonders for your performance.

  • If you are lost -- “climb, conserve, and confess.” -- U.S. Navy SNJ Flight Manual

Doing the Job in the White House

  • Your performance depends on your people. Select the best, train them, and back them. When errors occur, give sharper guidance. If errors persist or if the fit feels wrong, help them move on. The country cannot afford amateur hour in the White House.

  • You will launch many projects but have time to finish only a few. So think, plan, develop, launch and tap good people to be responsible. Give them authority and hold them accountable. Trying to do too much yourself creates a bottleneck.

  • Think ahead. Don't let day-to-day operations drive out planning.

  • Plan backward as well as forward. Set objectives and trace back to see how to achieve them. You may find that no path can get you there. Plan forward to see where your steps will take you, which may not be clear or intuitive.

  • Don'tovercontrol” like a novice pilot. Stay loose enough from the flow that you can observe, calibrate and refine.

  • A president needs multiple sources of information. Avoid excessively restricting the flow of paper, people, or ideas to the president, though you must watch his time. If you overcontrol, it will be your “regulator” that controls, not his. Only by opening the spigot fairly wide, risking that some of his time may be wasted, can his “regulator” take control.

  • If in doubt, move decisions up to the president.

  • When you raise issues with the president, try to come away with both that decision and also a precedent. Pose issues so as to evoke broader policy guidance. This can help to answer a range of similar issues likely to arise later.

  • See that the president, the cabinet and the staff are informed. If cut out of the information flow, their decisions may be poor, not made, or not confidently or persuasively implemented.

  • Don't allow people to be excluded from a meeting or denied an opportunity to express their views because their views differ from the president's views, the views of person who calls the meeting, or your views. The staff system must have integrity and discipline.

  • When the president is faced with a decision, be sure he has the recommendations of all appropriate people, or that he realizes he does not have their views and is willing to accept the consequence. They will be out of sync, unhappy and less effective if they feel they are or are seen as having been “cut out.”

  • Don't be a bottleneck. If a matter is not a decision for the president or you, delegate it. Force responsibility down and out. Find problem areas, add structure, and delegate. The pressure is to do the reverse. Resist it.

  • If the staff lacks policy guidance against which to test decisions, their decisions will be random.

  • One of your tasks is to separate the “personal” from the “substantive.” The two can become confused, especially if someone rubs the president wrong.

  • Test ideas in the marketplace. You learn from hearing a range of perspectives. Consultation helps engender the support decisions need to be successfully implemented.

  • If a prospective presidential approach can't be explained clearly enough to be understood well, it probably hasn't been thought through well enough. If not well understood by the American people, it probably won't “sail” anyway. Send it back for further thought.

  • Many people around the president have sizeable egos before entering government, some with good reason. Their new positions will do little to moderate their egos.

  • Move decisions out to the cabinet and agencies. Strengthen them by moving responsibility, authority and accountability their direction.

  • Control your time. If you're working off your in-box, you're working off the priorities of others. Be sure the staff is working on what you move to them from the president, or the president will be reacting, not leading.

  • Look for what's missing. Many advisers can tell a president how to improve what's proposed or what's gone amiss. Few are able to see what isn't there.

  • Think of dealing with Congress as a “revolving door.” You'll be back to today's opponents for their help tomorrow. Presidential proposals will need a member of Congress's support on some issue, at some time, regardless of philosophy, party or their positions on other issues. Don't allow White House links to members to be cut because they may disagree on some or even many issues.

  • Work continuously to trim the White House staff from your first day to your last. All the pressures are to the contrary.

  • Don't do or say things you would not like to see on the front page of the Washington Post.

Serving in Government

  • Public servants are paid to serve the American people. Do it well.

  • Congress, the press and the bureaucracy too often focus on how much money or effort is spent, rather than whether the money or effort actually achieves the announced goal.

  • It is very difficult to spend “federal (the taxpayers') dollars” so that the intended result is achieved.

  • Beware when any idea is promoted primarily because it is “bold, exciting, innovative and new.” There are many ideas that are “bold, exciting, innovative and new,” but also foolish.

  • The federal government should be the last resort, not the first. Ask if a potential program is truly a federal responsibility or whether it can better be handled privately, by voluntary organizations, or by local or state governments.

  • As former Rep. Tom Curtis of Missouri said, “Public money drives out private money.”

  • Strive to make proposed solutions as self-executing as possible. As the degree of discretion increases, so too do bureaucracy, delay and expense.

  • Presidential leadership needn't always cost money. Look for low- and no-cost options. They can be surprisingly effective.

  • Include others. As former Sen. Pat Moynihan (D., N.Y.) said, “Stubborn opposition to proposals often has no other basis than the complaining question, 'Why wasn't I consulted?' ”

  • Watch for the “not invented here” syndrome.

  • “The atmosphere in which social legislation is considered is not a friend of truth.” -- Pat Moynihan

  • If in doubt, don't.

  • If still in doubt, do what's right.

  • Treat each federal dollar as if it was hard earned. It was -- by a taxpayer.

  • “Try to analyze situations intelligently, anticipate problems and move swiftly to solve them. However, when you're up to your ears in alligators, it is difficult to remember that the reason you're there is to drain the swamp.” -- Unknown

  • “In Washington, D.C., the size of a farewell party may be directly proportional to the honoree's new position and their prospective ability to dispense largess.” -- D.G. Cross

  • “Every government looking at the actions of another government and trying to explain them always exaggerates rationality and conspiracy, and underestimates incompetency and fortuity.” -- Silberman's Law of Diplomacy, U.S. Circuit Court Judge Laurence Silberman

Politics, Congress and the Press

  • First rule of politics: you can't win unless you're on the ballot.

  • Second rule: If you run, you may lose.

  • And if you tie, you do not win.

  • Politics is human beings; it's addition rather than subtraction.

  • “The winner is not always the swiftest, surest or smartest. It's the one willing to get up at 5 a.m. and go to the plant gate to meet the workers.” -- Unknown

  • In politics, every day is filled with numerous opportunities for serious error. Enjoy it.

  • The most underestimated risk for a politician is overexposure.

  • When someone with a rural accent says, “I don't know much about politics,” zip up your pockets.

  • If you try to please everybody, somebody's not going to like it.

  • Don't necessarily avoid sharp edges. Occasionally they are necessary to leadership.

  • “The oil can is mightier than the sword.” -- former Sen. Everett Dirksen (R., Ill.)

  • Arguments of convenience lack integrity and inevitably trip you up.

  • Remember where you came from.

  • Members of the House and the Senate are not there by accident. Each managed to get there for some reason. Learn what it was and you will know something important about them, about our country and about the American people.

  • With the press there is no “off the record.”

  • “There are only three responses to questions from the press: (1) 'I know and will tell you'; (2) 'I know and I can't tell you'; and (3) 'I don't know.' ” -- Dan Rather

For the Secretary of Defense

  • The secretary of defense is not a super general or admiral. His task is to exercise civilian control over the department for the commander in chief and the country.

  • Reserve the right to get into anything, and exercise it. Make your deputies and staff realize that, although many responsibilities are delegated, no one should be surprised when the secretary engages an important issue.

  • Manage the interaction between the Pentagon and the White House. Unless you establish a narrow channel for the flow of information and “tasking” back and forth, the process can quickly become chaotic.

  • Normal management techniques may not work in the department. When pushing responsibility downward, be sure not to contribute to a weakening of the cohesion of the services; what cohesion exists has been painfully achieved over the decades.

  • When cutting staff at the Pentagon, don't eliminate the thin layer that assures civilian control.

  • Avoid public spats. When a department argues with other government agencies in the press, it reduces the president's options.

  • Establish good relations between the departments of Defense and State, the National Security Council, CIA and the Office of Management and Budget.

  • Be sure key U.S. ambassadors are informed on defense activities in their countries.

  • Develop a personal relationship with the chairman and each of the Joint Chiefs of Staff. They are almost always outstanding public servants. In time of crisis, those relationships can be vital.

  • “If you get the objectives right, a lieutenant can write the strategy.” -- Gen. George Marshall

  • Napoleon was asked, “Who do you consider to be the greatest generals?” He responded, “The victors.”

On Business

  • When you initiate new activities, find things you are currently doing that you can discontinue -- whether reports, activities, etc. It works, but you must force yourself to do it. Always keep in mind your “teeth-to-tail ratio.”

  • Watch the growth of middle-level management. Don't automatically fill vacant jobs. Leave some positions unfilled for six to eight months to see what happens. You will find you won't need to fill some of them.

  • Reduce the layers of management. They put distance between the top of an organization and the customers.

  • Find ways to decentralize. Move decision-making authority down and out. Encourage a more entrepreneurial approach.

  • Prune -- prune businesses, products, activities, people. Do it annually.

  • Know your customers!

  • Develop a few key themes and stick to them. It works. Repetition is necessary. “Quality.” “Customers.” “Innovation.” “Service.” Whatever!

  • That which you require be reported on to you will improve, if you are selective. How you fashion your reporting system announces your priorities and sets the institution's priorities.

  • People do better in staff jobs if they have had operational experience. It helps to look at things from others' perspectives.

  • Reduce the number of lawyers. They are like beavers -- they get in the middle of the stream and dam it up.

  • Beware of the argument that “this is a period for investment; improvements will come in the out years.” The tension between the short term and long term can be constructive, but there is no long term without a short term.

  • Too often management recommends plans that look like Bob Hope's nose or a hockey stick. The numbers go down the first year or so and then up in the later years. If you accept hockey-stick plans, you will find they will be proposed year after year.

  • The way to do well is to do well.

  • Don't let the complexity of a large company mask the need for performance. Bureaucracy is a conspiracy to bring down the big. And it can. You may need to be large to compete in the world stage, but you need to find ways to avoid allowing that size to mask poor performance.

  • “No plan survives contact with the enemy.” -- Old military axiom

  • Remember: A's hire A's and B's hire C's.

  • “The advantage of a free market is that it allows millions of decision-makers to respond individually to freely determined prices, allocating resources -- labor, capital and human ingenuity -- in a manner that can't be mimicked by a central plan, however brilliant the central planner.” -- Friedrich A. Hayek

On Life (and Other Things)

  • “You can't pray a lie.” -- Mark Twain, “Huckleberry Finn”

  • “It takes everyone to make a happy day.” -- Marcy Rumsfeld, age seven

  • “The most important things in life you cannot see -- civility, justice, courage, peace.” -- Unknown

  • “Persuasion is a two-edged sword -- reason and emotion -- plunge it deep.” -- Prof. Lewis Sarett Sr.

  • “The art of listening is indispensable for the right use of the mind. It is also the most gracious, the most open and the most generous of human habits.” -- Attributed to R. Barr, St. John's College, Annapolis, Md.

  • “In writing if it takes over 30 minutes to write the first two paragraphs select another subject.” -- Raymond Aron

  • “In unanimity there may well be either cowardice or uncritical thinking.” -- Unknown

  • “If you're coasting, you're going downhill.” -- L.W. Pierson

  • “What's the difference between a good naval officer and a great one? Answer: About six seconds.” -- Adm. Arleigh Burke

  • “First law of holes: If you get in one, stop digging.” -- Anonymous

  • “Behold the turtle. He makes progress only when he sticks his neck out.” -- James B. Conant

  • “When drinking the water, don't forget those who dug the well.” -- Chinese proverb

  • “The harder I work, the luckier I am.” -- Unknown

  • “If it doesn't go easy, force it.” -- G.D. Rumsfeld's assessment of his son Don's operating principle at age 10

  • “But I am me.” -- Nick Rumsfeld, age nine

  • “You learn in life there are few plateaus; you are either going up or down.” -- Unknown

  • Perspective -- Maurice Chevalier's response when asked how it felt to reach 80: “Pretty good, considering the alternative.”

  • “For every human problem there is a solution that is simple, neat and wrong.” -- H.L. Mencken

  • Simply because a problem is shown to exist doesn't necessarily follow that there is a solution.

  • “If a problem has no solution, it may not be a problem, but a fact, not to be solved, but to be coped with over time.” -- Shimon Peres

  • “If a problem cannot be solved, enlarge it.” -- Dwight D. Eisenhower

  • “Most people spend their time on the 'urgent' rather than on the 'important.' ” -- Robert Hutchins

  • “If you think you have things under control, you're not going fast enough.” -- Mario Andretti, racecar driver

  • “Victory is never final. Defeat is never fatal. It is courage that counts.” -- Winston Churchill

  • “Intellectual capital is the least fungible kind.” -- Unknown

  • “The better part of one's life consists of friendship.” -- Abraham Lincoln

  • “When you're skiing, if you're not falling you're not trying.” -- Donald Rumsfeld

  • “The test of a first-rate intelligence is the ability to hold two opposed ideas in the mind at the same time, and still retain the ability to function.” -- F. Scott Fitzgerald

  • “It is seldom that liberty of any kind is lost all at once.” -- David Hume

  • “History marches to the drum of a clear idea.” -- W.H. Auden

  • “Demographics is destiny.” -- John Scanlon

  • If you develop rules, never have more than 10.

Mr. Rumsfeld is secretary of defense.

Blinded by Science


President Obama's Dangerous Game of Politics


Unsustainable Spending