Monday, March 22, 2010

A Way Out of Soviet-Style Health Care

Editor's note: The following is excerpted from an article with the same headline by Nobel Prize winning economist Milton Friedman that was published in the Wall Street Journal on April 17, 1996. Friedman died in 2006. A related editorial appears nearby:

In a chapter in his novel "The Cancer Ward" titled "The Old Doctor," Alexander Solzhenitsyn compares "private medical practice" with "universal, free, public health service" through the words of an elderly physician whose practice predated 1918. . .

Mr. Solzhenitsyn himself had no personal experience on which to base his account and yet, in what I have long regarded as a striking example of creative imagination, his character presents an accurate and moving vision. The essence of that vision is the consensual relation between the patient and the physician. The patient was free to choose his physician, and the physician free to accept or reject the patient.

In Mr. Solzhenitsyn's words, "among all these persecutions [of the old doctor] the most persistent and stringent had been directed against the fact that Doctor Oreschenkov clung stubbornly to his right to conduct a private medical practice, although this was forbidden."

In the words of Dr. Oreschenkov in conversation with Lyudmila Afanasyevna, a longtime patient and herself a physician in the cancer ward: "In general, the family doctor is the most comforting figure in our lives. But he has been cut down and foreshortened. . . . Sometimes it's easier to find a wife than to find a doctor nowadays who is prepared to give you as much time as you need and understands you completely, all of you."

Lyudmila Afanasyevna: "All right, but how many of these family doctors would be needed? They just can't be fitted into our system of universal, free, public health services."

Dr. Oreschenkov: "Universal and public—yes, they could. Free, no."

Lyudmila Afanasyevna: "But the fact that it is free is our greatest achievement."

Dr. Oreschenkov: "Is it such a great achievement? What do you mean by 'free'? The doctors don't work without pay. It's just that the patient doesn't pay them, they're paid out of the public budget. The public budget comes from these same patients. Treatment isn't free, it's just depersonalized. If the cost of it were left with the patient, he'd turn the ten rubles over and over in his hands. But when he really needed help he'd come to the doctor five times over. . . .

"Is it better the way it is now? You'd pay anything for careful and sympathetic attention from the doctor, but everywhere there's a schedule, a quota the doctors have to meet; next! . . . And what do patients come for? For a certificate to be absent from work, for sick leave, for certification for invalids' pensions: and the doctor's job is to catch the frauds. Doctor and patient as enemies—is that medicine?"

"Depersonalized," "doctor and patient as enemies"—those are the key phrases in the growing body of complaints about health maintenance organizations and other forms of managed care. In many managed care situations, the patient no longer regards the physician who serves him as "his" or "her" physician responsible primarily to the patient; and the physician no longer regards himself as primarily responsible to the patient. His first responsibility is to the managed care entity that hires him. He is not engaged in the kind of private medical practice that Dr. Oreschenkov valued so highly.

For the first 30 years of my life, until World War II, that kind of practice was the norm. Individuals were responsible for their own medical care. They could pay for it out-of-pocket or they could buy insurance. "Sliding scale" fees plus professional ethics assured that the poor got care. On entry to a hospital, the first question was "What's wrong?" not "What is your insurance?" It may be that some firms provided health care as a benefit to their workers, but if so it was the exception not the rule.

The first major change in those arrangements was a byproduct of wage and price controls during World War II. Employers, pressed to find more workers under wartime boom conditions but forbidden to offer higher money wages, started adding benefits in kind to the money wage. Employer-provided medical care proved particularly popular. As something new, it was not covered by existing tax regulations, so employers treated it as exempt from withholding tax.

It took a few years before the Internal Revenue Service got around to issuing regulations requiring the cost of employer-provided medical care to be included in taxable wages. That aroused a howl of protest from employees who had come to take tax exemption for granted, and Congress responded by exempting employer- provided medical care from both the personal and the corporate income tax.

Because private expenditures on health care are not exempt from income tax, almost all employees now receive health care coverage from their employers, leading to problems of portability, third party payment and rising costs that have become increasingly serious. Of course, the cost of medical care comes out of wages, but out of before-tax rather than after-tax wages, so that the employee receives what he or she regards as a higher real wage for the same cost to the employer.

A second major change was the enactment of Medicare and Medicaid in 1965. These added another large slice of the population to those for whom medical care, though not completely "free," thanks to deductibles and co-payments, was mostly paid by a third party, providing little incentive to economize on medical care. The resulting dramatic rise in expenditures on medical care led to the imposition of controls on both patients and suppliers of medical care in a futile attempt to hold down costs, further undermining the kind of private practice that Dr. Oreschenkov "cherished most in his work."

The best way to restore freedom of choice to both patient and physician and to control costs would be to eliminate the tax exemption of employer-provided medical care. However, that is clearly not feasible politically. The best alternative available is to extend the tax exemption to all expenditures on medical care, whether made by the patient directly or by employers, to establish a level playing field, in terms of the currently popular cliche.

Many individuals would then find it attractive to negotiate with their employer for a higher cash wage in place of employer-financed medical care. With part or all of the higher cash wage, they could purchase an insurance policy with a very high deductible, i.e., a policy for medical catastrophes, which would be decidedly cheaper than the low-deductible policy their employer had been providing to them, and deposit all or part of the difference in a special "medical savings account" that could be drawn on only for medical purposes. Any amounts unused in a particular year could be allowed to accumulate without being subject to tax, or could be withdrawn with a tax penalty or for special purposes, as with current Individual Retirement Accounts—in effect, a medical IRA. Many employers would find it attractive to offer such an arrangement to their employees as an option. . . .

The Iran Problem with Hanson & Baer

FRIDAY, OCTOBER 30, 2009
The Iran Problem with Hanson & Baer: Chapter 5 of 5
How should Obama deal with both Iran and Israel? Victor Davis Hanson and Robert Baer summarize the options.
PERMALINK

THURSDAY, OCTOBER 29, 2009
The Iran Problem with Hanson & Baer: Chapter 4 of 5
Will Israel strike first against Iran? Victor Davis Hanson and Robert Baer discuss the politics and ramifications of this prospect.
PERMALINK


WEDNESDAY, OCTOBER 28, 2009
The Iran Problem with Hanson & Baer: Chapter 3 of 5
What can the U.S. do about Iran? Victor Davis Hanson and Robert Baer offer their prescriptions.
PERMALINK


TUESDAY, OCTOBER 27, 2009
The Iran Problem with Hanson & Baer: Chapter 2 of 5
Victor Davis Hanson and Robert Baer describe the motivations and goals of the regime in Tehran.
PERMALINK


MONDAY, OCTOBER 26, 2009
The Iran Problem with Hanson & Baer: Chapter 1 of 5
Is the Iranian nuclear threat real? Victor Davis Hanson and Robert Baer say yes.
PERMALINK

War & History with Victor Davis Hanson

FRIDAY, MARCH 19, 2010
War & History with Victor Davis Hanson: Chapter 5 of 5
Victor Davis Hanson offers some insight into his life as a war historian — and more.
PERMALINK

THURSDAY, MARCH 18, 2010
War & History with Victor Davis Hanson: Chapter 4 of 5
Victor Davis Hanson talks about the study of war.
PERMALINK


WEDNESDAY, MARCH 17, 2010
War & History with Victor Davis Hanson: Chapter 3 of 5
Victor Davis Hanson discusses error and war, including the errors made in the War in Iraq.
PERMALINK


TUESDAY, MARCH 16, 2010
War & History with Victor Davis Hanson: Chapter 2 of 5
Victor Davis Hanson describes the several ways in which the American way of war is distinctive.
PERMALINK


MONDAY, MARCH 15, 2010
War & History with Victor Davis Hanson: Chapter 1 of 5
Victor Davis Hanson explains why war is inseparable from the human condition.
PERMALINK

About Victor Davis Hanson
Victor Davis Hanson is the Hoover Institution’s Martin and Illie Anderson Senior Fellow. He is the author of many books, including The Father of Us All: War and History, Ancient and Modern. A contributor to National Review Online, Hanson has written hundreds of articles for major American periodicals. He was one of ten recipients of the National Humanities Medal in 2007.

Sunday, March 21, 2010

Meet U2’s ‘War’ child

To millions of U2 fans, Peter Rowen is the child whose mournful face stares out from the covers of “Boy” and “War.” Now, 30 years since he modeled for the iconic images, he still attracts attention.

Peter grew up in Dublin, where his older brother Guggi befriended Bono, when he was still known as Paul Hewson.

“Bono [came] over to our house quite a bit,” Rowen says. “My eldest brother, Clive, says Bono used to eat us out of jam sandwiches! I remember Bono and [his wife] Ali coming, much later, for Sunday dinner.”

U2 first had Rowen photographed in 1979 for the EP “Three.” He later appeared on the European version of “Boy” and the breakthrough third album, 1983’s “War.”

Peter Rowen in 1983 and now (inset).
Peter Rowen in 1983 and now (inset).

“For the ‘War’ shoot, I went to photographer Ian Finlay’s house in Dun Laoghaire [a seaside suburb of Dublin], where his wife made soup, which I didn’t like. When we returned to town, Bono was driving and came close to running into the back of another car!

“One of my older brothers who lived in London at the time said he thought it was cool to see posters of me everywhere. I’d get phone calls from girls in America. How they got my family’s number, I don’t know.”

When he was 21, Rowen became a photographer. In 2001, a newspaper asked him to cover a U2 concert at Slane Castle.

“I was in the pit with all the press photographers. The band wouldn’t have known I was there. At one point, Bono was lying on the stage right in front of me, which was kinda funny. Not long later, I bumped into The Edge at a nightclub and told him about that assignment. He asked to see some of the pictures and, after doing so, sent me a note saying they were really good.

“The [band is] well aware I was the child in their photos, but it’s [never] cropped up in conversation. The connection I had with them was when I was a child. I know them to say hi and they are always nice to me. They’re older than me, so I would never have hung around with them.

“Some of my brothers and friends have got more mileage out of it than I ever have. The biggest buzz I get out of it is having my 10-year-old daughter thinking it’s cool.

“The funny thing is, I never used it for pulling the birds. I would have felt an idiot trying to use it as a chat-up line. It’s a bit cringey, you know: ‘I was on the U2 album covers.’ ‘Were you? So what!’

“Technically, they’re very simple pictures, but they’re powerful. What’s important about a picture is atmosphere and feeling. I gather the whole idea of “Boy” was the innocence of youth. “War” shows a much more disturbed-looking child, and I guess shows what the world can do to a child — a loss of innocence.”

Sunday, March 14, 2010

Admirals Adventure @ Papa Forty Navy; Retired Navy Pals Run The Bands And Pile Ups From Aruba

By Jamie Dupree NS3T radio-sport.net
Posted March 15, 2010

It didn't matter that conditions in the 2010 ARRL DX SSB Contest weren't as good as two weeks earlier in the CW leg. It didn't matter that one of the operators hadn't contested in years. But it still added up to a winning formula for K0DQ and N4OC at "Papa Forty Navy".


(Retired U.S. Navy colleagues K0DQ and N4OC)

For Scott Redd K0DQ and Ed Giambastiani N4OC, the story of the 2010 ARRL DX SSB Contest is a combination of contesting and military service, two colleagues who are more than enjoying their retirement with a dose of ham radio.

The Admirals Adventure - 2010 ARRL DX SSB

The plan was for an "easy, laid back M/S" at the QTH of Carl Cook P49V in Aruba, said Redd before ARRL SSB.

"I think we're the top seed in the "Old Admirals" class, but not much more," he joked.

In fact, Redd and Giambastiani were both Admirals in the U.S. Navy, both rising very high in the ranks.

Redd retired in 2007 as the head of the National Counterterrorism Center, capping a career that included 36 years of active duty in the U.S. Navy.

Giambastiani retired in 2007 as well, his last post as Vice Chairman of the Joint Chiefs of Staff, one of the highest ranking U.S. military jobs.

Both had a love for the Navy and both had a love for ham radio contesting as well.

Redd said Giambastiani came to him about a year ago to talk about getting back into the game.

"He had operated from W1ZM 30+ years ago," Redd said. "We decided a Caribbean vacation combined with a low key phone operation would be just trick."

It also worked out well that the Admirals could take their wives along too for a warm, wintertime vacation.

The Goal Was to "Have Fun"

While K0DQ had managed to squeeze in some major contests during his Navy career, N4OC for the most part had only been keeping his license active.

"Ed had made maybe a few dozen contacts in the last decade and none from a DX location," Redd said. "He'd never used a computer in a contest."

The contest started on Friday night local time with K0DQ at the mic for the first four hours. Then it was time for a change of command on the bridge.

"Ed took the chair about 04Z and I went to bed," Redd recounted. "He went from zero to 60 in short order."

At first, "typing and talking simultaneously were a challenge" for Giambastiani, known as "Admiral G" by many in the Navy during his later years.

"Within a few hours he was hitting 150/hour rates," said Redd, who said his fellow operator ended up operating "probably over 60 percent of the time."

How well did the pair of Retired Admirals do? Right now, P40N is in first place on the DX side for Multi-Single claimed scores, with 7.52 million, almost a million points up on Team PJ4G.

"Did a lot better than I thought we would," Redd told radio-sport.net after returning to the U.S.

"Lots of fun running the big piles while Ed kept the steady rate going."

"As for Ed, he's hooked," said Redd.

"What's the next contest?" was the response from Admiral G.

So if you hear "Papa Forty Navy" again in the future, you might just be chatting with a pair of pretty happy Navy buddies.

Saturday, March 13, 2010

Forbidden Fruit: Microsoft Workers Hide Their iPhones

REDMOND, Wash.—Microsoft Corp. employees are passionate users of the latest tech toys. But there is one gadget love that many at the company dare not name: the iPhone.

The iPhone is made, of course, by Microsoft's longtime rival, Apple Inc. The device's success is a nagging reminder for Microsoft executives of how the company's own efforts to compete in the mobile business have fallen short in recent years. What is especially painful is that many of Microsoft's own employees are nuts for the device.

AFP/Getty Images

In a discussion about employee iPhone use, Microsoft CEO Steve Ballmer once told executives that when his father worked at Ford, his family drove Fords. Mr. Ballmer is pictured at an industry conference in February.

The perils of being an iPhone user at Microsoft were on display last September. At an all- company meeting in a Seattle sports stadium, one hapless employee used his iPhone to snap photos of Microsoft Chief Executive Steve Ballmer. Mr. Ballmer snatched the iPhone out of the employee's hands, placed it on the ground and pretended to stomp on it in front of thousands of Microsoft workers, according to people present. Mr. Ballmer uses phones from different manufacturers that run on Microsoft's mobile phone software.

A Microsoft spokeswoman declined to comment and declined to make executives available for this story.

Apple CEO Steve Jobs referred an email asking about iPhone use at Microsoft to a spokeswoman, who declined to comment.

Despite Mr. Ballmer's theatrics, iPhone users are in plain sight at Microsoft. At the sprawling campus here in a Seattle suburb, workers peck away on their iPhone touch-screens in conference rooms, cafeterias and lobbies. Among the top Microsoft executives who use the iPhone is J Allard, who helped create the Xbox game console and is chief experience officer for the entertainment and devices division.

Nearly 10,000 iPhone users were accessing the Microsoft employee email system last year, say two people who heard the estimates from senior Microsoft executives. That figure equals about 10% of the company's global work force.

Employees at Apple, in contrast, appear to be more devoted to the company's own mobile phone. Several people who work at the company or deal regularly with employees there say they can't recall seeing Apple workers with mobile phones other than the iPhone in recent memory.

IPhone usage at Microsoft is the latest twist in the rivalry between Apple and Microsoft, tech-industry titans that have mixed it up in everything from computer operating systems to digital music players.

For many top Microsoft executives, seeing so many iPhones around the office is a bit like how a Coca-Cola Co. manager might feel seeing underlings drink Pepsi—especially since Microsoft makes its own operating system, Windows Phone, that powers handsets.

Employee iPhone use has led to some spirited discussions among Microsoft executives. At a retreat last March for dozens of senior Microsoft executives at its corporate campus, someone asked about employee use of iPhones in a question-and-answer period.

According to several people present, Andy Lees, a Microsoft senior vice president who oversees development of the mobile-phone software business, and his boss, Robbie Bach, explained that Microsoft workers often use rival products to better understand the competition.

Kevin Turner, chief operating officer, scoffed at that explanation, these people said. Mr. Turner said he discouraged Microsoft's sales force from using the iPhone, they added. "What's good for the field is good for Redmond," Mr. Turner said, recalls one of the people who heard his comments.

Mr. Ballmer took a similar stance at the meeting.

He told executives that he grew up in Detroit, where his father worked for Ford Motor Co., and that his family always drove Fords, according to several people at the meeting.

In what some employees interpreted as a sign that Microsoft was clamping down on the iPhone, the company in early 2009 modified its corporate cellphone policy to only reimburse service fees for employees using phones that run on Windows Phone software.

Microsoft has said it made the change as part of a broader cost-cutting plan.

Some Microsoft workers take pains to hide their iPhones. While rank-and-file workers tend to use the iPhone openly around peers, some conceal them within sight of more senior executives. One Microsoft worker said he knows several colleagues who try to disguise their iPhones with cases that make them look more like generic handsets.

"Maybe once a year I'm in a meeting with Steve Ballmer," said this employee. "It doesn't matter who's calling, I'm not answering my phone."

Some executives have openly renounced their iPhones. Stephen Elop, president of Microsoft's business division, used Apple products before Mr. Ballmer lured him to Microsoft in early 2008. But at a meeting of Microsoft sales representatives after joining, Mr. Elop placed his personal iPhone into an industrial-strength blender and destroyed it in a reenactment of a popular Internet video, says one witness.

Others remain less shy about their iPhones. Microsoft software engineer Eugene Lin recently gave a public talk in Seattle about developing software for the iPhone in his spare time. One of his creations: a racy application called Peekaboo that lets people ogle scantily clad cartoon women. A YouTube video of the Seattle talk by Mr. Lin, who didn't respond to messages seeking comment, has been viewed more than 73,000 times.

Microsoft isn't uniformly opposed to employees using Apple products, in part because it makes some software and services for them. Apple's Macintosh computers are common in the Microsoft group that makes the Mac version of its Office software.

Still, Apple's ascendancy in mobile phones has been tough to stomach.

The iPhone accounted for 25.1% of the U.S. smartphone market during the three months ending Jan. 31, compared with 15.7% for phones running Windows Phone software, according to comScore Inc.

Windows mobile phones have lagged some of the innovations of the iPhone, including Apple's slick Web browser and the App Store for downloading software onto the device.

But there's positive buzz among Microsoft employees and others in the technology industry about an overhauled version of its software, Windows Phone 7 Series, expected to be on handsets in time for the holidays.

One person who isn't jumping on the iPhone bandwagon is co-founder and chairman Bill Gates. In an appearance on "The Daily Show" in January, host Jon Stewart asked Mr. Gates if he can have an iPhone since leaving full-time duties at Microsoft in 2008 to focus on philanthropy.

"I'm a very loyal Microsoft user," Mr. Gates replied.

Tuesday, March 09, 2010

CMOs, Go Beyond a PR Plan to Prepare for an Inevitable Product Crisis

If You Haven't Already Convened Some Serious Internal Firepower, You're Borderline Negligent

I'm going to go out on a limb and propose that product crises aren't communications crises. Suggesting otherwise is like giving the play-by-play announcer credit for a sports score, or holding a translator responsible for presenting an untenable negotiating position. Our selective vision makes us focus on how issues are communicated at risk of losing sight of the business reality it narrates. Bad news doesn't influence or have an impact on brands as much as reveal them for what they are. CMOs need to see someone else's misfortune as the opportunity to review and perhaps change how you see your function before the inevitable spotlight finds you.

The first step is to stop seeing crises as somehow "outside" the purview of normal behavior: Customers are surprised; employees chagrined; whatever occurred was an affliction, something that happens to businesses, even if the culpability rests firmly within. Lead paint, wing fasteners that don't fit, or gas pedals that stick are exceptions to policies and perceptions that otherwise remain irresponsibly pure, only they're not and they don't. Crises don't as much violate the status quo as they're an integral part of the outsourced, networked way most big businesses are run. I say they're likely to become the new normal (notice how many major vehicle recalls have happened since Toyota's woes first surfaced). You can depend on facing a major product crisis. The only question is when.

So if you haven't already convened some serious internal firepower to consider your preparation, you're borderline negligent in your CMO-ly duties. Revisiting the PR plan isn't enough, however. I'm talking about analyzing how your business is operationally configured to identify emerging crises and gather resources to respond to them meaningfully and quickly. Again, this is not a PR discussion, it is an executive-level business conversation, so stop carping about being included at the C-suite table and bring something worthy to the meeting. It's probably one of the most important marketing-relevant (and job-keeping) things you could do.

Here's my three-step action plan to help you prepare for your upcoming crisis:

Identify the risks
You and your fellow corporate mucky-mucks could already name the top 10 crises you'd most likely face, and a simple research project on your competitors could confirm it. You know, things you tolerate with one eye closed, like your offshore factories that pay their employees in minutes spent out of their shackles, or the chance that one of the gazillion transistors involved in keeping Part A and Part B of your leading product attached will disconnect unexpectedly. Your auditing programs, philanthropy and other marketing blather won't excuse you when the inevitable occurs (and your risk-assessment studies that inanely tag some failure percentage as "acceptable" seem quaintly hollow), and the pain your brand suffers will be appropriate and deserved. Get real and lead the internal program to name these events, understand in excruciatingly vivid detail how they might impact your business, and analyze what operational changes might be warranted before something fails or explodes. Talk about business, not marketing.

Empower your networks
Do you actually believe that a behemoth of corporate everything like Toyota doesn't have a crisis-communications plan? They all do, and when they don't work, we're supposed to believe it's because they weren't implemented properly. Nope. Talking is pointless, however reassuring or photogenically you deliver it, so your plans need to skip presumptions about "managing" the conversation and instead map what you will ask your employees, vendors, suppliers, and friends and family to do. You can't narrate the problem to them; they're inexorably involved, so what's your strategy to get them taking action? When something bad happens you need spot checks, improvements, whatever. There are no audiences for your crisis, only varying levels of participants.

Commit to decisions
The hardest part about leadership is keeping a level head and trusting your judgment. Most PR crisis plans don't get executed as planned, as the human tendency (and most exhortations from legal counsel) default to inaction. It seems easier to duck, only it isn't. Sticking to a plan is how most stocks on Wall Street get traded, and it's built into the technology that keeps iPhones running and nuclear power plants from melting. As a leader, you need to step up and get your management team to commit to what the business will do when it discovers issues -- public or nascent -- and then help build the processes and systems to deliver those actions. Every little thing that doesn't happen as you've planned will be something you'll waste time publicly apologizing for afterward.

I hope you're not just tsk-tsking the product crisis du jour, but rather taking the substance of true preparedness to the executive boardroom. Identify problem areas. Plan for networked action. Commit to your decisions. You have the most to gain from doing so, and the most to lose if you don't.

ABOUT THE AUTHOR
Jonathan Salem Baskin is a global brand strategist, author, and speaker. Read his blog at dimbulb.typepad.com and follow him on Twitter: @jonathansalem.

Monday, March 08, 2010

Friedman Aflame: The Times columnist’s mind melts fact and reason into nonsense

Dostoevsky’s 1872 novel, The Possessed, is a tale about a small town overcome by revolutionary ideas. After an intense meeting of a literary salon, a fire breaks out and one of the villagers comments, “The fire is in the minds of men, not in the roofs of buildings.” The historian James Billington used that phrase — “the fire in the minds of men” — to describe the incendiary ardor of Russian revolutionaries of all stripes, making it the title of his epic history of the subject.

Now, in the hands of New York Times columnist Tom Fried­man, this scene could be a profound metaphor for the need to “green-size” housing in the developing world. Or it might be a perfect symbolic encapsulation of how the battle for the commanding heights of the economic future is really a branding competition between two theories of civilization. Or it might be a cautionary allegory imparted to him over a private dinner in Davos, Switzerland, by the Indian CEO of a Chinese company operating in over 70 nations, manufacturing solar-powered waterless toilets for hearing-impaired Muslims, in what amounts to a “soft power” victory in the war for the hearts and minds of the Islamic world. Then again it might illustrate the ease of communication in our “flattened” world. Or it might be a glimpse into the dangers of Sarah Palin’s “drill, baby, drill” myopia.

Really, it could represent anything, because for Friedman everything is connected to everything else, so everything is a metaphor for everything. “In the Friedman mind,” writes Ian Parker in a 2008 profile for The New Yorker, “things tend to be like something else. The new is like the old. The foreign is like the American. The scattered has a pattern.” Sometimes a cigar is just a cigar, Freud famously observed — but not for Tom the Magic 8 Ball of cliché generation, the maestro of mixed metaphors. A cigar could be the key to understanding why geo­thermal energy is the only way to save the panda. Like the China Syndrome that inexorably leads to the perfect storm that breaks the camel’s back, Tom Friedman encounters no obstacles — factual, logical, or literary — between himself and the points he wants to make.

Consider this classic line from his book The World Is Flat: “The walls had fallen down and the Windows had opened, making the world much flatter than it had ever been — but the age of seamless global communication had not yet dawned.” (Just for the record, the capitalized “Windows” is a reference to the operating system. That makes it crystal clear, right?) Or consider this sentence from his latest epic, Hot, Flat, and Crowded: “The demise of the Soviet Union and its iron curtain was like the elimination of a huge physical and political roadblock on the global economic playing field.”

Playing fields do not have roadblocks; windows in fallen walls, even when opened, do not reveal much. Of course, the reader understands what he is reading, just as the diner might grasp that he is eating possum scat — but that doesn’t really excuse the cook.

Attacking Friedman’s writing style is something of a bipartisan pastime. The gold standard of the genre is Matt Taibbi’s 2005 New York Press disembowelment, “Flathead.” Describing his mounting dread at the prospect of reading and reviewing The World Is Flat, Taibbi writes: “Thomas Friedman in possession of 500 pages of ruminations on the metaphorical theme of flatness would be a very dangerous thing indeed. It would be like letting a chimpanzee loose in the NORAD control room; even the best-case scenario is an image that could keep you awake well into your 50s.” According to The New Yorker, The World Is Flat contains roughly 600 variants of the word “flat”: “Age of Flatism,” “coefficient of flatness,” “compassionate flatism,” “half-flatness,” “flatburger.” There are “ten great flatteners,” each of which is the sort of thing you’d associate with the familiar argument that we live in an interconnected world.

All this reductio ad flatus stemmed from a conversation Friedman had with Nandan Nilekani, the CEO of Infosys, in Banga­lore, India. Nilekani said something that was intellectu­ally, uh, flat about the effects of globalization on international competition: “Tom, the playing field is being leveled.”

“As I left the Infosys campus that evening along the road back to Bangalore,” Friedman explains, “I kept chewing on that phrase: The playing field is being leveled.” Indeed, he masticated it to the point where it was meaningless cud and then had his eureka moment: “What Nandan is saying, I thought, is that the playing field is being flattened . . . Flattened? Flattened? My God, he’s telling me the world is flat!”

The rational response to this is: “My God! That is so not what he’s saying!” As countless others have noted, saying that a playing field is level is not remotely the same thing as saying that the world is flat, even metaphorically. Playing fields are defined by rules, often highly complex, that the participants agree to in advance; “leveling the playing field” means making competition in a specified arena fair. “The world is flat,” on the other hand, suggests flat-earthism, which implies that the speaker is crazy, ignorant, or idiotic. Presumably, Nilekani is none of those things. And even in the days when rational people thought the world was flat, they never suggested it was easy to traverse, borderless, or characterized by level playing fields. Highwaymen lurked just over every hill, and cartographers labeled any unexplored realm with “Here be dragons.” That’s not exactly a celebration of a borderless world.

In the newer editions of The World Is Flat, Friedman addresses the “cottage industry” of critics who attack his reliance on “flatness” to describe the new world order and defends himself on the grounds that he is a popularizer. “Whenever you opt for a big metaphor like ‘The World Is Flat,’” he writes in The World Is Flat 3.0 (get it?), “you trade a certain degree of academic precision for a much larger degree of explanatory power. Of course the world is not flat. But it isn’t round anymore, either. I have found that using the simple notion of flatness to describe how more people can plug, play, compete, connect, and collaborate with more equal power than ever before — which is what is happening in the world — really helps people who are trying to understand the essential impact of all the technological changes coming together today.” “I don’t mind using rhetoric,” he told The New Yorker. “I get criticized for that a lot: it’s ‘too cute,’ too this or that. But I’ve never had a reader come up to me and say, ‘That book was too easy to read. That anecdote went down too easily.’ To simplify something accurately, you’ve got to understand it deeply.”

But there’s the rub. He claims to be simplifying complex ideas and making them more understandable. But what he is in fact doing is taking an already simple idea — say, that of a level playing field — and making it meaningless. You can boil something down to the essentials, but if you keep boiling it you’re just left with nonsense. The level playing field is already a boiled-down idea, comprehensible by high-school sophomores and Charlie Rose alike. Friedman’s alchemist’s brain transmutes the dross of the banal into the bullion of bull.

His reporting and opining on the Middle East was great and Pulitzer-worthy because he actually knew what he was talking about. He spent years reporting from the region, is a serious student of its history, and speaks Arabic. But when he applies his distilling powers to his other hobbyhorses, the result is an ungodly mess.

Which brings us to his jihad for a “green revolution” (a revolution he will watch from the comfort of his mammoth compound in Bethesda, Md.). Over and over again (dear reader, I’ll stop using the phrase “over and over again” if you’ll take it to heart that anything Friedman has said once he has said many, many times), he insists that all of our problems can, will, and must be fixed by accepting his vision for dealing with the climate/energy challenge.

His arguments by now are familiar, because the Democratic party and the Obama administration have adopted them, in toto, as talking points. Friedman’s case for a green revolution, like most such cases, involves jumping to a new argument every time the present one collapses. Like Indiana Jones leaping just in time from one cave-in beneath his feet to the next, whenever the case for “green jobs” falls apart, Friedman leaps to “energy security.” When that crumbles under him, it’s a quick hop to the seeming terra firma of global warming. And when that disintegrates, he falls back on “so what?” Here’s how he put it on Meet the Press: “What I say is if climate change is a hoax, it’s the greatest hoax ever perpetrated on the United States of America. Because everything we would do to get ready for climate change, to build this new green industry, would make us more respected, more entrepreneurial, more competitive, more healthy as a country.”

Tom Friedman
Newscom

Thus Plato’s noble lie is resuscitated in a pas de deux of flimflammery. The diagnosis might be fake, but the cure will still fix your lumbago, whiten your teeth, and give your horse a shiny coat.

Friedman is of late very frustrated with America for its failure to do what he says it must. Last September, in one of many columns lamenting that China does things better than we do, he wrote: “Watching both the health care and climate/energy debates in Congress, it is hard not to draw the following conclusion: There is only one thing worse than one-party autocracy, and that is one-party democracy, which is what we have in America today.” He continues: “One-party autocracy certainly has its drawbacks, but when it is led by a reasonably enlightened group of people, as China is today, it can also have great advantages.”

Just to clarify, according to Friedman, America is a one-party democracy not because the Democrats control the White House, the House, and the Senate. No, no. The U.S. suffers under the yoke of one-party democracy because the Republicans refuse to be steamrolled by the Democrats.Our one-party democracy is worse” than China’s one-party autocracy, he explains:

The fact is, on both the energy/climate legislation and health care legislation, only the Democrats are really playing. With a few notable exceptions, the Republican Party is standing, arms folded and saying “no.” Many of them just want President Obama to fail. Such a waste. Mr. Obama is not a socialist; he’s a centrist. But if he’s forced to depend entirely on his own party to pass legislation, he will be whipsawed by its different factions.
So what are the advantages of China’s “enlightened” one-party autocracy? To borrow a phrase from Elvis, the autocrats take care of business, in a flash. In a chapter of The World Is Flat titled “China for a Day (But Not for Two)” Friedman rhapsodizes about the glories of China’s statism. And in 2005 he began a column with this avowedly tongue-in-cheek prayer:

Dear God in Heaven: Forgive me my sins, for I have been to China and I have had bad thoughts. Forgive me, Heavenly Father, for I have cast an envious eye on the authoritarian Chinese political system, where leaders can, and do, just order that problems be solved. . . . I cannot help but feel a tinge of jealousy at China’s ability to be serious about its problems and actually do things that are tough and require taking things away from people. Dear Lord, please accept my expression of remorse for harboring such feelings. Amen.
Among the myriad problems with this cutesy-wutesy-ootseyness is the simple fact that Friedman should actually be offering a sincere prayer for forgiveness of his Durantyesque sycophancy in behalf of a totalitarian regime with the blood of 65 million people on its hands. If he’d written a chapter called “Nazis for a Day,” this point would be more obvious to more people. But instead of contrition we get scores more columns gushing about how great China is for being able to get all of the policies right.

For instance, Friedman particularly loves the fact that China’s State Council banned plastic bags. “Bam! Just like that — 1.3 billion people, theoretically, will stop using thin plastic bags,” he writes in Hot, Flat, and Crowded. “Millions of barrels of petroleum will be saved, and mountains of garbage avoided.” It’s as if Madison, Hamilton, and Jefferson had been morons for not decreeing an annual Tyranny Day when all the work can get done. Regardless, as usual, “theoretically” means “not in reality.” China never did any such thing. It simply required that stores charge customers for bags. They do the same thing at my local Safeway, yet plastic bags continue to lurk, threatening all we hold dear. More to the point, it is either deranged or dishonest to suggest that China — with its ever-growing tally of coal factories, poisoned rivers, corrupt regulators, etc. — is some great steward of the environment. It may or may not be leading in the manufacture of green technologies — though don’t take Friedman’s word for it; he rarely sources his too-good-to-check claims — but it is also burning fossil fuels faster than any other country.

It’s telling that the beat Friedman covers most adroitly in his column is his own brain. The datelines are often from Shanghai or Cairo, but they should really be from his frontal lobe. As with the Nilekani story, Friedman thinks the real news is how he came up with his latest idea, his next burning insight on the world. These “eureka moments”¬ — as he likes to call them — usually come in conversations with rich CEOs and high-ranking international cookie-pushers in places like Davos. For instance, in his January 31 column, Friedman writes: “‘Political instability’ was a phrase normally reserved for countries like Russia or Iran or Honduras. But now, an American businessman here remarked to me, ‘people ask me about “political instability” in the U.S. We’ve become unpredictable to the world.’” And from there Friedman is back on autopilot, visiting the same argument he makes in just about every other column: China is beating Amer­ica because China isn’t hobbled by a broken-down, outdated, inefficient political system known to its fans as “democracy.”

Friedman told The New Yorker that his analogizing instinct, which allows him to compare everything to anything and vice versa, is like a “pinball game going on in my head. Balls bouncing around.” The more apt metaphor would be a furnace. Every distinction, every objection to his vision for the world, every bit of countervailing evidence inconveniently popping up in reality simply melts away. He honestly believes that the year 2000 will be known as the first year of the Energy Climate Era: Jan. 1, 2000, really began 1 e.c.e. His panic that America can’t get important things done while the mandarins of Red China fiat utopia intensifies as Obama’s New Progressive Era retreats into a sad and strange historical parenthesis.

One doesn’t have to read Dostoevsky to know this sort of thing is hardly new — the envy for authoritarian regimes that can force the wheel of history in the right direction; the contempt for the messiness of democracy; the conviction that all good things go together and that certain enlightened and visionary revolution­aries can apply their intellects to any problem, can pick the lock of History and start over at Year Zero. This all-consuming passion for a unified theory of everything and the indomitable conviction that you are right has consumed many a brilliant mind.

Friedman doesn’t want America to become a totalitarian country — at least not for more than 24 hours. Whenever he goes too far in that rhetorical direction he pulls back a few paragraphs later, but his to-be-sures about how America is still better become less convincing every time, more pro-forma and cutesy. He is possessed by his own prophecy, consumed by his clairvoyance about the One Right Way. Half-measures succumb to the mental furnace; the case for democratic deliberation cannot withstand the heat. Everything fuels the fire in Tom’s mind.

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.