The fragile and faltering state of American democracy.
The Yellen era began officially on Monday when Janet Yellen took the oath and became the new chair of the Federal Reserve Board. The very first female to hold that title. And not a day too soon. The New York Times greeted her with a headline that bluntly describes the circumstances. “The Middle Class Is Steadily Eroding. Just Ask the Business World.”
Wouldn’t you know. It took thirty years of guys running the Fed—Volcker, Greenspan, Bernanke—to create this messed-up economy. Now the woman has to clean up after them. From what we know about her, Yellen understands the challenge. She must undo the past. It took a generation of conservative Fed chairmen to tip the balance in one direction and accept the extreme inequalities of income and wealth. It might very well take another generation to correct the damage and restore equity. The Fed, of course, does not control every economic outcome, but, as Yellen knows, its policy levers can have decisive influence on jobs and wages.
What the Times reported—the disintegrating middle class—is not exactly news. But business reporter Nelson Schwartz managed to make the abstraction of rising inequality visible by describing the real-world consequences in the marketplace. Olive Garden and Red Lobster restaurants are losing altitude, while high-end restaurants are surging. General Electric’s mass-market appliances are slowing, while fancier models are hot. Sears and J.C. Penney, which target middle-class consumers, are both in trouble.
Follow the money. Business strategists have this stark choice—either move upscale to target the affluent or down to the very low-end bargain basements where more shoppers are concentrating. The middle buyers are missing in action. Between 2009 and 2012, about 90 percent of the increased consumption came from the top fifth of household incomes, Schwartz reported. The familiar adverse social implications are buried in those business statistics. To put itcrudely, the United States has too many rich people awash with surplus wealth, but not enough healthy consumers with incomes that allow them to both spend and save for the future.
The president and like-minded Democrats are belatedly talking about inequality, but mostly discuss it as a moral issue, a matter of fairness. They will not get serious about finding solutions, I suspect, until they recognize that inequality is, above all, an economic issue. They might consult Janet Yellen about that. Since the crash and tepid recovery, Yellen has been talking consistently about what the economy needs for a healthier recovery—jobs and wages—without going into the obvious implications of inequality.
The twisted nature of American economic life is not new. Nearly a decade ago in 2005, a team of economists at Citigroup identified this new era of inequality and gave it a name, “plutonomy.” The rich are getting richer, these experts agreed, and the US economy has adjusted comfortably to the new reality. Plutonomy, they explained, is an economy “powered by and largely consumed by the wealthy few.” By Citigroup’s reckoning, only the United States, Britain and Canada qualify.
“We project that the plutonomies…will likely see even more income inequality, disproportionately feeding off a further rise in the profit share in their economies, capitalist-friendly governments, more technology-driven productivity, and globalization,” they concluded. The follow-up report a year later was titled “The Rich Are Getting Richer.”
Janet Yellen, if she dares, might ask the Fed’s deep stable of economists to look into the subject. These Citi forecasters did not see the financial crash coming nor the near-death experience of their own institution. Nevertheless, they got the picture right and their provocative projection is clearly back on track. The American plutonomy has recovered smartly. It is just the overall economy that’s still struggling.
Chief Justice Roberts wishes a Happy New Year to all those losers who will not get healthcare insurance, thanks to his clever reading of the Constitution. There are 4.8 million of these losers, and 2.6 million of them are people of color, black and Hispanic mainly. Not that the Chief Justice and his right-wing colleagues on the Supreme Court would make racist distinctions. No, no, no. They assure us their decision is solely driven by a matter of high constitutional principle—states’ rights.
The problem with these people is that they are low-income adults without dependent children—not quite poor enough to qualify for Medicaid nor old enough to qualify for Medicare. President Obama’s original legislation took care of them by expanding Medicaid coverage and putting up the federal money to pay for it. The Roberts decision insisted that state governments have a constitutional right to reject this financial aid from Washington. And twenty-five states took him up on the offer.
This odd failure will probably be blamed on Obama but should rightly be called the “Supreme Court gap” in unversal healthcare coverage. Because these folks do not not quite earn enough to qualify for Obamacare’s tax credits to help people purchase health insurance. A report from the Kaiser Family Foundation outlined the consequences: “Most of these individuals have very limited coverage options and are likely to remain uninsured.”
Of course, they could get a job that pays more. Or maybe get married and have children that would qualify them for Medicaid. State governments set many of the rules for Medicaid coverage and some conservatives think fedeal aid saps individual initiative and rewards indolence. It is not entirely a coincidence that many of these rejectionist states are the same states that defied the Supreme Court half a century ago and resisted racial integration and equal rights for minorities. Some of them are the very states that went to war to defend slavery. Republicans are sometimes called a “neo-Confederate party.” After the Supreme Court gutted the voting-rights act, the neo-Confederates were free to pass restrictive laws designed to shrink minority voting, and so they did.
The Kaiser Foundation doesn’t get into any of that but simply observed, “These continued coverage gaps will likely lead to widening racial and ethnic as well as geographic disparities in coverage and access.”
Don McCanne of Physicians for a National Health Program circulated the Kaiser report with this comment: “What a terrible way to start the first of the year of what is essentially the full implementation of the Affordable Care Act. It seems pretty obvious what our New Year’s resolution should be. Let’s bring health care to everyone through an improved and expanded Medicare for all.”
Democrats ought to call out Republicans on these questions. And citizens generally ought to call out the Roberts Court. The Supremes have done quite a lot in the last fifteen years to mess up our already weakened democratic system. They stole the presidential election in 2000. They cut loose Big Money to swamp elections by destroying lawful restraints. They are trying step-by-step to restore hoary old legalisms that favor capital over labor, corporations over individuals. Shouldn’t we be talking about how to stop them?
Read Next: William Greider on how to resuscitate the fight for single-payer healthcare.
The Federal Reserve has always been a very masculine institution. In economic affairs, the Fed chairman resembles the stern father figure who disciplines the children and occasionally punishes them for unruly behavior. Only now, for the first time in its 100-year history, the Federal Reserve will be led by a woman—Janet Yellen. But will that make any difference?
In this era of gender equality, the polite answer is, no, a woman in charge of this powerful institution will do pretty much what any man would do in the same circumstances. I devoutly hope not. The confirmation of Janet Yellen as Fed chair raises intriguing possibilities for altering the operating values of the central bank and broadening its obligations to the country. Isn’t that what makes “old boys” of Wall Street nervous? Yellen, of course, is obliged to dismiss the question. Like any woman who manages to break through the glass ceiling, she has to bring superior technical skills and an impressive résumé in central banking. Yellen has both—and a reputation for thinking beyond narrow-minded traditions in economics.
Monetary policy, in other words, is a feminist issue, though in ways that may not be obvious at first. At a very deep level, girls learn to see some things differently from boys, and in Fed policy-making this can put women at odds with men. I witnessed this cultural tension in real personal terms at the Federal Reserve during the 1980s when Paul Volcker was chairman and described it in Secrets of the Temple: How the Federal Reserve Runs the Country (1987).
Listen to how Federal Reserve Governor Nancy Teeters—the very first woman to hold that title—described the experience. Teeters was appointed in 1978 by Jimmy Carter and served during Volcker’s dramatic campaign to defuse inflation with a long and brutal recession. Teeters dissented in meetings of the Federal Open Market Committee as Volcker persisted with the blood-letting. She was politely ignored. Her strong talk irritated the boys.
“I gave the FOMC a lecture,” Teeters told me. “I told them, ‘You are pulling the financial fabric of this country so tight that it’s going to rip. You should understand that once you tear a piece of fabric, it’s very difficult, almost impossible, to put it back together again.’” The metaphor, she pointed out to me, was one only a woman might use. “None of these guys has ever sewn anything in his life,” Teeters said.
Her opposition was not sentimental. As a professional economist, she argued that Volcker’s harsh policy was extreme and unnecessary. “It was very difficult for me philosophically to run the unemployment rate [which reached 12 percent],” Teeters said. “It was perfectly obvious to me we didn’t need to put interest rates up that high. We couldn’t do it without a recession, but recession is still a difficult decision to make. People get hurt. All sorts of nasty things can happen if it gets out of hand.” Which happened. The financial system became so frayed Volcker had to back off.
Teeters acknowledged frankly what most men would never admit. “I was scared and so was everybody else,” she said. Some of her colleagues resented her frankness. One complained, “She never said ‘we.’ She always addressed the other committee members as ‘you.’ ‘If you do this, you’re going to have worse unemployment.’ She was very consciously the outsider.” In practical terms, she truly was an outsider. When Teeters joined the Board of Governors, she found only two women in senior-grade positions.
Behind her back, the male-dominated orthodoxy disparaged Teeters as too liberal, but Governor Martha Seger, a conservative Republican who served after Teeters retired, was left isolated, too. Seger, too, dissented from Volcker’s unrelenting interest rates that kept unemployment higher even after the economy recovered. Seger told me she felt cut out of any policy discussions that mattered. “We have very little input into what I call the formulation stage, which I’m not accustomed to,” she said. “In corporate America, there is input all along the line.”
The differences in reasoning between girls and boys were examined as “gender-related moral differences” by Harvard psychologist Carol Gilligan in her best-selling book, In a Different Voice. Women, Gilligan explained, will usually seek to avoid “the fracture of human relationships that must be mended with its own thread.”
It is striking that Nancy Teeters and Carol Gilligan both used the same metaphor—the torn “social fabric”—to explain what makes girls different. Gilligan argued the society needs sensibilities that make equal space for what women know. “Sensibility to the needs of others and the assumption of responsibility for taking care lead women to attend to voices other than their own and to include in their judgment other points of view,” Gilligan explained.
Achieving that standard would pose a high challenge, not just for the Federal Reserve, but for the entire governing system. A lot of progress has been accomplished since the eighties, both in society and government. Hey, a forward-leaning woman named Yellen is now running the Fed. Maybe Yellen can take that powerful place further down the road to equality.
Read Next: Zoë Carpenter on the NSA’s bad week.
Behind his back, they called him “Tall Paul” in the 1980s and Volcker was indeed awesome then as Federal Reserve chairman alongside Ronald Reagan as president. Together they refashioned government—shifting everything rightward and setting up the triumph of the financial sector that has reigned ever since with its destructive qualities.
The Gipper did the fun part—cutting taxes from the top down—but Volcker did the heavy lifting. He presided over a long, brutal recession that broke inflation and labor wages and lots more. It was a decisive injury to organized labor He was a civil service giant, brave and also scary. At six-foot-seven, Volcker towered over the pedestrian ranks of Washington politics. Also important bankers and the US Senate. Reagan’s White House staff tried to push him around (though not Reagan himself) and Volcker brushed them off like gnats.
For all those reasons, I see his triumph—finally getting federal regulators to adopt his “Volcker amendment” to limit proprietary investing by the mega-banks—as a melancholy moment. It took three years for regulatory agencies to fend off the thousands of bank lobbyists and approve something. That’s better perhaps than a hollow victory but still far short of the reforms that are needed to get control over the out-of-control mega-banks.
I haven’t read the bill, but the financial press and Wall Street talkers are not impressed. It is something like 850 pages and so dense with loopholes and clever snares it will probably take another three years for bank examiners to understand what they are supposed to do with it.
Meanwhile, the too-big-to-fail banks will go on about their business, getting sweet on America’s troubles and pretty much ignoring prudent restraints. The real solution will not come until another Congress or a new president find the courage to break them up, cut them down to size and restore the old Glass-Steagall division of commercial banking from investment banking. A few years of experience with the Volcker Rule will probably be enough to demonstrate that it’s insufficient to change the behavior of JP Morgan and the banker gang. The risk is that the bankers will go wild again in the meantime.
Paul Volcker must be feeling a sense of personal regret if not guilt. He was present at the creation, after all. As Fed chairman. He blessed the first rounds of serious deregulation that repealed the caps on interest rates and doomed the savings and loan industry that financed housing. However reluctantly, Volcker also engineered the first big rescue of a too-big-to-fail bank—Continental Illinois in Chicago. He could have hung tough but he caved to the bankers. The Fed has lived off that precedent many times since.
The Federal Reserve and Treasury Secretary want us to believe they won’t do it again. I judge from his body language and muted comments that Paul Volcker doesn’t believe them.
Read Next: John Nichols on the cruel, irresponsible and dysfunctional budget deal.
The one word you never hear from the lips of a practicing capitalist is “guilt.” Milton Friedman taught a generation of business execs and bankers that their only job is to make as much money as they can. Leave the blame game to dewy-eyed liberals. Economists and business schools picked up on the theme and told losers who didn’t share in the good times it was their own fault. They didn’t work hard enough or get a proper education. Maybe in their next life they can go to grad school or choose a career that doesn’t involve working with their hands.
Only now comes this world-class player from the privileged “1 percent” to admit he is feeling guilty. Two cheers for Bill Gross, the co-founder and managing director of PIMCO, the California-based bond house that manages some $2 trillion in other people’s wealth. Gross himself has accumulated $2.2 billion, which puts him at #252 on the Forbes 400.
“Having gotten rich at the expense of labor,” Gross confessed, “the guilt sets in and I begin to feel sorry for the less well-off.” The message is addressed to fellow rich guys who are IMCO clients, in Gross’s latest monthly Investment Outlook. He calls them “Scrooge McDucks.” He suggests they stop whining about the enormous taxes they pay the government and give more back to the society they degraded with inequality.
“Admit that you and I and others in the ‘magnificent 1 %’ grew up in the gilded age of credit,” Gross wrote. “…You did not create that wave. You rode it. And now it’s time to kick out and share some of your good fortune by paying higher taxes or reforming them to favor economic growth and labor, as opposed to corporate profits and individual gazillions.”
Gross propose this reform: “The era of taxing ‘capital’ at lower rates than ‘labor’ should now end.” That heresy is a little like punching PIMCO customers where they live, but Gross will no doubt get away with it. They are used to hearing his occasional heresies and Gross has made them lots of money over the years. Besides, the capitalists are counting on the politicians to protect them from higher taxes.
Some other wealthy capitalists like Warren Buffett have made similar raise-my-taxes pleas, but Bill Gross’s is distinctive because, first, he acknowledges a personal sense of guilt and, second, he bluntly describes the fundamental conflict as capital versus labor. You seldom hear that kind of talk any longer in American politics and certainly not from financial-market billionaires. Gross is not a closet commie. He is simply acknowledging in plain English the underlying ideological contest that has dominated the last thirty years.
Capital won and labor lost. Not just union workers but middle-class people of all kinds, especially “those who used their hands for a living,” as Gross puts it. That verdict is now so obvious that even timid commentators talk about it obliquely. The middle class is breaking up, while the largest capital owners continue to claim an ever larger share of the nation’s wealth, even during the economy’s bad years. This trend has been obvious to working people for years while elite opinion was celebrating the triumph of market economics. Neither political party wishes to inquire too deeply into the causes since both Republicans and Democrats are implicated.
Maybe it requires unorthodox sources of truth-telling—odd heretics like Bill Gross—to put these questions on the table. Certainly, the political system will not find any real answers as long as most politicians are afraid to ask real questions. Gross expressed his own frustration with reluctance of elected officials to face hard truths about the hollowing US economy.
He cited Barack Obama’s recent speech sounding “a faint alarm” about the failure of corporations and capitalists to invest in US productivity. Obama said, “It’s time for folks to…focus on doing everything we can to spur growth and create new, high-quality jobs.” Gross was exasperated. “Folks?” he responded. “Ordinary folks, the 99 percent, don’t have money any more. Mr. President. The rich and corporations do.”
I am a little biased in Gross’s favor because I first encountered him fifteen years ago with my book on the globalizing economy—One World, Ready or Not—which described the capital-labor struggle and the threatening consequences I foresaw for Americans. Gross invited me to address the semi-annual conference PIMCO has its bond traders from around the world. I asked him why. Prominent economists and financial reporters were disparaging my fears as silly. Bill Gross said he thought I had the story right and his people needed to hear it. The bond traders, rather loudly, did not agree.
The latest hot controversy launched by Citizen Snowden’s revelations involves the National Security Agency’s listening to the personal cellphone of Angela Merkel, Chancellor of Germany. Embarrassment all around and the White House now says it is “reviewing” what other foreign leaders the NSA may be eavesdroping on.
But here Is a more explosive question that needs an answer: Is the NSA eavesdropping on Barack Obama?
Officially, this will be promptly denied, of course. But can we believe opaque denials from the same intelligence officials who have previously lied to the press and misled Congress about the unlimited range of NSA snooping? More to the point, can Barack Obama believe them?
This question will doubtless be dismissed as a paranoid conspiracy theory. Surely, officials of this super-secret government agency would not use its vast technological capabilities to spy on their own boss, our president. But why not? Information is power. Bureaucracies typically use their information power to protect themselves or weaken their political rivals. As investigators dig into the secret world of NSA power, I expect they will sooner or later have to examine this possibility.
As it happens, there is a scandalous precedent for this kind of abuse, and his name is J. Edgar Hoover. During the long reign of Hoover as FBI director, the agency was notorious for “keeping a file” on all sorts of political figures and leaking the damaging content to the press. But Washington politicians—senators and even presidents—faced a more dangerous threat. The FBI was most likely keeping files on each of them. A politician would know his own personal transgressions, but so might J. Edgar.
Hoover curried favor in Congress by letting friendly politicians sneak a peek at salacious material agents collected on left-liberal-labor figures. The FBI campaign to ruin the Rev. Martin Luther King Jr. was perhaps its most notorious effort. Only after King’s death and Hoover’s did the stories surface to confirm the Director’s legendary power over politicians. The mere threat of exposure—even if the accusations were fabricated—was enough to freeze many politicians from acting.
When Congress finally confronted the scandal and reformed the FBI, it enacted limited terms for the FBI director and chose people with exemplary records of public service. That didn’t entirely eliminate politics from the agency’s behavior but it put each new director on notice that his performance would be subsequently examined by his successor.
Among other reforms, the NSA will need similar restraints to restore a modicum of public trust but, above all, to change the poisonous culture that politicians have allowed to flourish in the institution. President Obama should start by dismissing NSA Director Keith Alexander and National Intelligence Director James Clapper, neither of whom seem to grasp that their evasive behavior is deepening suspicion and making the broad public even more distrustful.
If Obama fiddles around with inquiries that do not change much of anying for the spy masters, then the president himself may be incorporated in the suspicions. Some people will ask: what did the NSA or CIA have on Obama?
Robert Scheer thinks President Obama should thank Edward Snowden.
James Dimon, chairman and CEO of JP Morgan Chase & Co., speaks at a conference, Tuesday, October 27, 2009 in New York. (AP Photo/Mark Lennihan)
JPMorgan Chase, the star of mega-banks, is up against the wall at the Justice Department, trying to settle its myriad crimes for $13 billion. That’s real money, even for a trillion-dollar bank. So this is progress. After years of scandalous indifference, the Obama administration appears to have found its backbone.
Better late than never, grumpy citizens can say. But that doesn’t settle the matter. Four years ago, Senator Ted Kaufman of Delaware crisply described the more fundamental problem posed by the wantonly reckless behemoths of Wall Street.
“People know that if they rob a bank they will go to jail,” Kaufman said. “Bankers should know that if they rob people they will go to jail too.” Can we hear an amen on that? Not yet. But the complaint Kaufman voiced repeatedly is now on the table. “At the end of the day,” the senator warned, “This is a test of whether we have one justice system in this country or two. If we do not treat a Wall Street firm that defrauded investors of millions of dollars the same way we treat someone who stole $500 from a cash register, then how can we expect our citizens to have any faith in the rule of law?” (See my piece from April 2011, “How Wall Street Crooks Get Out of Jail Free.”)
Attorney General Eric Holder was stung, his reputation severely damaged. His lieutenants in the criminal division explained repeatedly that while the megacrimes seemed obvious, it is fiendishly difficult to locate the people in a huge, complex financial organization who can be successfully prosecuted as criminals. The popular anger did not go away, however, because in JPMorgan’s case the outrages only got larger and more obvious.
So here we are four years later and leading newspapers report that Justice is on the brink of a record-setting settlement—$13 billion. Jamie Dimon, JPMorgan CEO and formerly the president’s favorite banker, has personally negotiated the terms with the attorney general. The Morgan bank started with an offer of $1 billion and quickly raised it to $4 billion. Holder’s office kept saying, no, not enough. According to The New York Times, seven federal agencies are investigating the bank, plus state banking regulators and a couple of foreign governments.
The offenses include an all-star list of duped victims—of mortgage fraud against home-buyers, investor fraud against people and pension funds that purchased the rotten mortgage securities and defrauded the federal agencies (Fannie Mae and Freddie Mac) that bought the mortgage bonds and applied federal guarantees to them. Nevertheless, if there is no identifiable “criminal” who can be sent to jail, the case could be treated as merely another bureaucratic crime and adjudicated with lots of cash, a very familiar exercise in this era of high-flying capitalist buccaneers and bandits.
But here is the exciting and suspenseful element in this story. Eric Holder and his prosecutors have so far refused to settle on such amicable terms. Federal prosecutors in Sacramento believe they have established the personal linkage—who ordered the dirty deals, who carried them out—that could support criminal indictments of individuals or against the corporate “person” known as JPMorgan Chase. That would be truly unprecedented—a “game changer” in Wall Street/Washington parlance—and with threatening potential for the defendant bank.
In the negotiations, Holder has refused to give Dimon what he seems to want most—an agreement to drop the criminal charge and settle for bigger money instead. That might weaken the storm of private lawsuits already filed by the victims of JPMorgan’s fraudulent profiteering. The star banker kept raising his bid. The AG kept saying no way. Americans should stay tuned and maybe send fan mail to the Justice Department, urging the prosecutors to hang tough.
But you can’t send a bank to jail, can you? No, but you could place it under court supervision and empower a federal judge to order and supervise internal reforms in the megabank, perhaps even downsizing. Does that sound too harsh? If the feds can do this to a corrupt labor union like the Teamsters, why not to an outlaw bank like JPMorgan?
Larry Summers. (Reuters/Jason Reed)
The Sunday afternoon announcement that Larry Summers is giving up his quest to become Federal Reserve chairman resonates with meaning for reform—both for government and the Democratic party. After several decades of dominance by the center-right financial perspectives of New Democrats, this is a huge loss for the Rubin-Clinton wing. And it foretells more to come.
When the Obama White House let it be known in early summer the president expected to appoint Summers as successor to Fed chairman Ben Bernanke, the party erupted in rage and rebellion. It amounted to rewarding the very policy architects who led the country into ruin with their financial deregulation and Wall Street–friendly non-enforcement and bailouts for the too big to fail bankers. Instead of going along meekly, progressive Dems built a firestorm against Summers and kept throwing on new logs.
The White House leakers kept reassuring favored reporters that the deal was done, the president really wants Larry in this pivotal position determining policy on money and credit for the country. Leading reform senators—Sherrod Brown, Elizabeth Warren and Jeff Merkley—fired back and raised the ante. If Summers is nominated, these key members of the Senate banking committee intend to vote against his confirmation. That could well be fatal to Summers’s and Obama’s ambitions. To make it worse, Senator John Tester of Montana, a moderate by any measure, let it be known he would join them in voting to block Summers. Among other disabilities, Summers was contemptuous of policy opponents and known for refusing to acknowlege collosal errors—the very opposite of a consensus leader.
Finally, the White House mercifully pulled the plug on flawed Larry. (It seems very unlikely Summers got the message on his own, considering his record for stubborn egotism.)
This is a huge victory for the prospects for genuine economic reform—well beyond anything Obama has so far proposed or accepted. The president might fumble around for a similarly conservative appointment, but he has a chance to change the outlook dramatically by appointing a new Fed chair who understands the deep dislocations created in part by Federal Reserve policy during the last three decades, from Volcker to Greenspan to Bernanke, under Democrats as well as Republicans.
Obama can start the healing by naming Janet Yellen, the moderately liberal vice chair of the Federal Reserve, who well understands that much deeper change must be considered to get the US economy back in balance again. It will not come quickly, but this can be the political watershed—the moment when this Democratic president chose to focus on the future rather than clinging to the failed past.
In other words, Obama can create a quite different legacy for himself by restarting his economic policy and encouraging serious reform at the central bank and in traditonal policies. The president of course cannot complete this new agenda in his remaining years, but he can launch the action and teach public opinion what the task of economic reconstruction should involve. That is, he can begin the “new politics” many of us had hoped he would bring to Washington.
In the next few months, as it happens, President Obama will appoint four and as many as five new governors for the seven-member Federal Reserve Board. That is an unprecedented opportunity to influence the future if he chooses wisely and reaches beyond the usual list of safe choices with conventional views. The best part is this power is unilateral. This is one instance where Barack Obama doesn’t have to make nice with know-nothing Republicans or seek permission from Wall Street titans. He can do this on his own.
But the defeat of Larry Suummers tells the White House and this president they had better start listening to the restless reformers on the left of the party. Senators and progressive Democrats in the House have serious ideas for reform. Having won this pivotal victory, they are sure to push for larger goals. Instead of running away from the liberal-labor progressives, Obama’s presidency should put an arm around them.
John Nichols rejoices in the populist rebellion that brought down Larry Summers.
Secretary of State John Kerry, flanked by Joint Chiefs Chairman General Martin E. Dempsey and Defense Secretary Chuck Hagel, testifies on Capitol Hill in Washington, Tuesday, September 3, 2013, during a Senate Foreign Relations Committee hearing on Syria. (AP Photo/Jacquelyn Martin)
Whatever Congress decides to do about bombing Syria, the United States is still trapped by a historic contradiction of its own invention. Our open-ended commitment to deter or punish bad guys anywhere around the world has not led to the peaceful vision of military planners and humanitarian hawks. It leads instead to more war—longer and more ambiguous conflicts in which there will be no victory, only abstract claims about teaching lessons to wayward nations.
The American Goliath, armed with awesomely superior weaponry and described as “indispensable” by admiring scholars, seems to have forgotten an ancient truth the Greeks and Romans understood. War is about purposeful violence, not diplomacy by other means.
In history, the fundamental objective of war has always been brutally obvious: the conquest of real estate and resources, the subjugation of other peoples. For two generations, the US has gone to war claiming nobler purposes, the protection and liberation of helpless others. But, our statesmen add, the defense of world peace requires us occasionally to go to war pre-emptively. Shoot the bad guys before they can shoot us.
The American people evidently understand this now and want no part of it. They are overwhelmingly fed up with intervening in other people’s wars. Iraq and Afghanistan taught bitter lessons. The experiences told Americans to disregard whatever presidents and intelligence officials claim to see as an imminent threat. The patriotic exhortations from governing elites in Washington now disparage “isolationist” sentiments, but constituents back home simply want a more rational definition of “national self-interest.”
Goliath may be having some sort of nervous breakdown. He sounds confused and conflicted, muscle-bound and unsure of himself. The American arsenal can destroy targets and people 1,000 miles away but it now promises it won’t deploy any American soldiers to the battlefields where people are being killed. US war plans keep changing—hotter, colder, then limited or maybe not. Our moral justifications get muddied when we learn that the supposed good guys in Syria—our rebel allies—commit war crimes too (executing prisoners with a bullet to the back of the head).
Nobody knows, of course, but it is conceivable this war of confusion could evolve into a stunning historical shift—the moment when militarism and the military-industrial complex begin to lose their iron grip on US politics. The arms industry still dominates the domestic economy and will remain influential when good jobs are still scarce. In past wars, whenever Americans were sent to fight abroad, the people quickly rallied ’round the flag. Popular patriotism soars in wartime. Only after bitter losses accumulate do people begin to turn against the war and want out.
This time feels different. People generally are already antiwar. The high-minded Goliath devoted to defending global peace is now preoccupied with crippling domestic weaknesses. This is new ground for the world’s only superpower—unlike anything that has faced Washington since its triumphant role in World War II. Governing authorities, if they are wise, ought to recognize the longstanding political order is now highly vulnerable and back away before there are explosive reactions. Yet it is not easy for either the president or Congress to accept strategic retreat from the nation’s bloated ambition to run the world. Ultimately, these adjustments cannot be avoided but they can also not be achieved without producing humiliation and recrimination for the country.
Oddly enough, Americans will probably feel safer once they are liberated from the all-purpose myth of an all-powerful Goliath who is always ready to fight another war. But here is the hard part: digging out of decades of myth-making and propaganda, asking honest questions about how the country got into its peculiar dilemma and how it might get out. I tried to explain the core problem with our military strategy in a book I wrote four years ago, Come Home, America:
“The US military, despite its massive firepower and technological brilliance, has itself become the gravest threat to our peace and security. Americans may find this accusation disturbing, but I hope they will consider it seriously. Our risks and vulnerabilities around the world are magnified and multiplied because the American military has shifted from providing national defense to taking the offensive worldwide, from being a vigilant defender to being an adventurous aggressor in search of enemies.”
Go looking for enemies in the world, you are likely to find some. How did this happen? Officials still talk about “national defense” as though Americans only want to protect their homeland—to be left alone in Fortress America. But that hasn’t been US strategy for more than sixty years. After the triumphant US role in World War II, America and allies agreed they should not dismantle peace-keeping military power and allow rabid dictators to arise unchallenged. Never again. The United Nations and NATO and the Marshall Plan were intended remedies.
Rearmament seemed reasonable until it swiftly became the Cold War rivalry and nuclear arms race. Starting in Korea, both super powers underwrote or clandestinely fought scores of shadowy proxy wars for hegemony in developing countries. It was ugly business with staggering bloodshed. Millions died in the name of competing ideology.
The basic problem was this: given the nuclear threat, neither side could really afford to win. They could injure the opposition, decapitate its leadership, cause economic havoc and foment social rebellions. But the one thing neither side dared was to fight a full-out war and win total victory.
This practical legacy of stalemate led to bitter frustrations, at least on the American side, first in Korea, then Vietnam. The United States bombed the stuffings out of North Vietnam but always rejected hawkish fervor for using nukes. American conservatives like Senator Strom Thurmond sounded a bristling campaign declaration: “Why not victory?”
For many Americans, it sounded like a fair question, maybe still does for some. But the battle cry also revealed the essential trap that still binds the hands of America and other major powers. Yes, the US could totally obliterate any minor country that gives us a hard time. But, no, that would not bring peace to the world nor stability. More likely, it would produce horrendous bloodshed and perhaps a twenty-first-century version of world war.
So the United States plays peacemaker and pleads for cooperation from friendly allies and on occasion drops a few explosives here and there to demonstrate its sincerity. But, no, it doesn’t want to do a war. Or at least it doesn’t want to win the war. The US only wants to send to a message: behave or we will rough you up. If you listen to Barack Obama’s rhetoric, you can hear the contradictions. He is simultaneously asking to enforce world order and uphold moral principle, but not by conquering Syria or Iran or any other uncooperative nations. He proposes to bomb a little here and there, win their respect by degrading their capabilities, then talk. These are the new euphemisms for humanitarian war-making, and they are not very convincing.
Killing is still killing. The political debate dumps blame on Obama or Congress or the Pentagon, but the dilemma really belongs to the nation and to other nations trying to uphold principles. My notion of progress would be a rule that says no country can go to war for diplomatic purposes or to demonstrate a bargaining position. If victory is unimaginable, then maybe the war should be unlawful. Killing people to influence negotiations seems about as as immoral as spraying innocent bystanders with poison gas.
The Friday and Thursday editions of The Washington Post are seen in Washington, Friday, August 3, 2007. (AP Photo/Haraz N. Ghanbari)
When the news broke that The Washington Post had been sold to Amazon CEO Jeff Bezos, Linda and I were lost in melancholy for awhile. It felt like a death in the family, the fond uncle we hadn’t seen in years. Or maybe we were simply mourning our own lost youth and those golden memories of fast times at the Post.
It was exhilarating to be part of the Post crowd in those scrappy days of the late 1960s and ’70s. I was on the national staff and Linda contributed articles, reviews and essays on food, family life, gardening and design. We felt in the midst of national tumult and tragedy, the dreadful war in Vietnam, racial upheavals and triumphs. In DC, these felt like local stories, and the Post was always in the middle of events.
On rare occasions, some of us were invited to attend a sit-down dinner party with the power elite at the Georgetown mansion of Katharine Graham, the Post’s patrician publisher. I remember one of these where reporters and wives (not many female reporters in those days) were huddled in one drawing room while the “war criminals” (her friends Kissinger and McNamara) were in another. Mrs. Graham tried without much success to get the two sides to mingle. She thought we should talk.
It was thirty years ago when I left the Post. Yet the news of its fate still feels personal to us. The newsroom was intense in those days, because executive editor Ben Bradlee inspired an edgy, competitive attitude among the reporters. Get it first, get it right. Go for impact. Tell the story with style and drama. And keep your elbows up, lest “bigfoot” reporters try to horn in on your story. The place often resembled a locker room at halftime, loose and profane, very masculine.
A French sociologist hung out with us in the newsroom for several months in order to compare The Washington Post with Le Monde. His study concluded that Bradlee had created an “entrepreneurial” spirit among reporters and editors (though Bradlee would never have said anything that stuffy). Bradlee was a Boston Brahmin who majored in classics at Harvard, but he talked like a street-smart sailor. I remember columnist Mark Shields once teased him for being one of those high-born characters with a three-syllable middle name—Benjamin Crowninshield Bradlee. Bradlee smiled and may have responded with an obscene hand gesture.
This is part of where the Post’s greatness came from. The paper in those days was utterly outmatched by The New York Times and its thorough, sober coverage. But we played off the Times’s stuffiness. We had fun puncturing conventional wisdom and telling the informal truth about the powerful (sometimes including the publisher’s best friends). We were encouraged to take chances. If you fell on your butt, nobody helped you up.
Into this volatile stew in the early ’70s came two very young reporters from the metro staff, which only covered local news. They picked up on a third-rate police story and stayed with it until they eventually brought down the president. What is the chance of that ever happening again? It is still breathtaking to recall that Woodward and Bernstein were only in their late 20s at the time. Imagine the risks. Older heads from the national staff urged Bradlee to put more experienced reporters on the case before these two kids got the Post into deep trouble. He listened and worried, but he stuck with them. Their lack of cynicism is what got the story.
Katharine Graham, the gutsy publisher, was the other part of the greatness. She was stuck with the epic risk—a live possibility that her family’s newspaper could be destroyed if Woodward and Bernstein were wrong. Given her status among Washington’s governing elite, her fortitude was especially impressive. Graham and Bradlee, working together, were like an electrical charge—a self-sustaining mix of audacity and courage.
Notwithstanding her boarding-school good manners, Mrs. Graham had a bluntness that, if anything, was more sharp-pointed than Bradlee’s. I experienced this several times in the newsroom when she stopped by my desk to express her strong feelings about something I had written. On one occasion, I had disparaged some of her best friends as the “junior varsity” of the Best and Brightest who got us into the Vietnam War. She didn’t like this at all, but conceded that my view was probably shared by many readers. On another occasion, her tone was considerably harsher. I had written about the Post’s labor troubles and expressed some sympathy for the union printers being displaced by new technology. As she talked to me, almost nose to nose, other reporters backed away as if the publisher had dropped a grenade at my feet.
The point, however, is that nothing happened afterward. My career did not go up in flames. She expressed herself and walked away and that was it. She became my model of the ideal publisher—candid in her strong views but not vindictive. After all, it was her newspaper.
Don Graham, her son, inherited very different challenges—technological changes that basically destroyed the business model for profitable newspapers. Until digital came along, he focused on building a broader base of localized support for the Post and largely succeeded when other newspapers were withering. He wanted a newspaper that would feel close to an extraordinary diversity of people, rich and poor, white and black and Asian and Latino, city and suburbs and small towns. For many years, he succeeded while other big-city newspapers were shrinking, though he probably didn’t get the credit he deserved. The digital revolution changed all that.
In the end, Don Graham’s singular act of courage in selling the paper was in recognizing that the Post probably has a more promising future with Jeff Bezos as the innovative owner instead of the Graham family. We do not yet know if Bezos will be up to maintaining the same public values. This requires more than money.
The more Linda and I talked over our warm memories, we came out at the same place: feeling good about the past. Feeling very lucky to have been there. For fifteen years or so we got to experience what was maybe the very best time and place ever to be a reporter and writer at the most dynamic newspaper in the country. Because we know something about how and why that came about, we do not expect the same combination of people and events to come again anytime soon, or maybe ever again. The past was rare, but it is also past. We feel grateful we were there.
What does Jeff Bezos have to do with neoliberal education reforms and charter schools?