Bush Didn't Make Any Mistakes, But Obama Should Learn From Them

As part of his continuing series of columns in which he demonstrates his eagerness to be invited to Bush's new Dallas home for supper, Michael Gerson shares more thoughts on the incoming Obama Administration.

Part of the appearance of security is rooted in seven years without additional terrorist attacks in America - itself a triumph against violence. It is difficult for a leader to take credit for a negative achievement - for the absence of failure. But here credit is due.

Apparently we're talking about international terrorism, in which case the seven years Gerson sees as warranting credit to Bush represent almost as much time as the eight year period between the first and second attacks on the World Trade Center. Gerson's correct that the passage of seven years doesn't justify complacency, but so far Bush's track record isn't better than Clinton's. If a terrorist attack were to occur in 2009, is Gerson more likely to pen a column describing the failure of Bush's policies, or to accuse Obama of taking his eye off the ball? As if Obama had warnings from the outgoing administration about the threat of al-Qaeda, and a memo on his desk declaring that they intended to attack within the United States, but focused on other priorities?

But there's another way to look at this: After supposedly ramping up to deal with large-scale terrorist attacks, the consequence of which could mirror the effects of a natural disaster, how did the Bush Administration perform? If anything should move us away from complacency, it's that track record.

Gerson sees the Congressionally approved tools used to combat terrorism as non-controversial, but finds room to learn from Bush's excesses:

Yet some methods designed for exceptional cases, such as waterboarding, were ethically disturbing and eventually counterproductive - causing self-inflicted ideological wounds in a largely ideological struggle.

I had almost forgotten that torturing people is "ethically disturbing". It's good to have a "compassionate Christian" around to remind us of that.

And there is little doubt that some administration claims of executive power invited a judicial backlash and undermined the power of future presidents.

Others might argue that the level of judicial deference to Bush is more problematic than the few cases that went against him. Gerson's right that future Presidents will have to remember that their office has limits, and those limits will at times be enforced by the courts. But he's confused about the source of those limits, as they in fact arise from a document the President is sworn to uphold, the Constitution. Gerson continues to explain the consequence of Bush's extra-constitutional actions:

If the administration had sought congressional backing for military commissions in 2001, and later for rules to hold combatants, the resulting legal framework would probably have been upheld by the courts - and would probably have been closer to administration goals than the eventual result.

So had Bush respected the Constitution and separation of powers, and acted accordingly, there would have been less litigation and the outcome would have been closer to what he wanted? That's the consequence Gerson sees from a "judicial backlash [that] undermined the power of future presidents"? The horror!

Gerson is apparently concerned that "enhanced" forms of interrogation won't be available to the CIA:

Or should the CIA be allowed to employ still-classified "enhanced" techniques short of torture? During his campaign, Obama promised the universal application of the Defense Department approach - but that is easier for a candidate than a president to pledge.

Sure, and Obama will have access to classified information that will help him make that assessment. But if we look at the interrogation techniques that worked in finding and killing Abu Musab al-Zarqawi, not only was torture unnecessary, by all appearances it would have been counter-productive. If one is needed, the fact that the result of the investigation was a bombing run intended to kill al-Zarqawi is a reminder that warfare carries a very different set of ethical balances than peace. But it's one thing when you are forced to make tough decisions that challenge your values due to the realities of war, and quite another to repeatedly make ethical concessions out of loyalty to a particular politician or administration without examining the reasoning behind those policies or considering their efficacy.

The hardest issues concern detained terrorists. Guantanamo will and should be closed as a public diplomacy nightmare. Perhaps half of the detainees will be sent home, leaving about 100 exceptionally dangerous men.

Well, so far that doesn't sound very hard. Why, though, do we still have 250 detainees at Guantanamo if it's so easy to sort out the "really bad ones" from the rest, and to send the others home?

The Obama administration will need to decide on a format for trials - much improved but politically discredited military commissions, ordinary civilian courts or some kind of national security courts created by Congress and supervised by the federal judiciary.

But the administration will not be able to try everyone. Some detainees will be too dangerous to release but too difficult to convict in a normal court setting using unclassified evidence. And any president will need the ability to hold and question newly captured terrorists outside the procedures designed for American criminals.

The reality is that you're unlikely to find any of that 100 who cannot be convicted and sentenced to life in prison based upon less sensational charges that don't require public disclosure of classified evidence or investigative technique. Remember John Walker Lindh, who if convicted at trial could have received up to three life sentences plus an additional 90 years in prison? There are many charges that can be brought against those defendants that will prevent them from ever again stepping outside the walls of a federal prison.

But let's assume for a moment that there are a few whose trials would somehow require public disclosure of material that would undermine our continuing efforts to fight wars and combat terrorism. That no number of court orders or protective measures could allow a fair trial without disclosure of that information. What would Gerson suggest then?

Unless Obama returns to a simple exertion of executive authority, he will require congressional authorization to detain people.

So Gerson is suggesting that Obama can spare himself a lot of headaches and better protect the nation by eschewing Bush's unilateralism in favor of constitutional process?

And this will expose a major tension between the new president's military responsibilities and the views of supporters who believe that detainees should be held only in preparation for trial.

Assuming, in fact, it's necessary for Obama to request extraordinary power in relation to some of the detainees. But you know what? There aren't many Obama supporters who actually fit the description Gerson provides - there may not even be any. The vast majority of Obama's supporters have always acknowledged the reality of the situation. Extending habeas corpus rights to detainees held in U.S. prisons is not the same thing as saying "detainees should be held only in preparation for trial" - it relates to whether or not detention is justified. It's a check on abuses and the potential for abuses. You shouldn't have to be much of a student of history to understand why the Founding Fathers were sufficiently concerned about that potential that they inserted habeas corpus rights into the body of the Constitution.

Friedman's Constant Call for Muslim Protests

It's one of those days when Thomas Friedman phones in his column. Yes, again (and again, and again) it's "if only the Muslim world would take to the streets to protest Muslim terrorism" columns. It's not that in a larger sense he doesn't have a point - it would be nice if there were a greater outcry against terrorism within the Muslim world. But it's just plain silly for Friedman - a man whom I doubt has ever participated in the public protest of anything - to keep returning to this notion that the only meaningful Muslim reaction to terrorism would be their taking to the streets with torches and pitchforks.

Friedman complains that if Muslims take to the streets to protest offenses against other Muslims and their religion, they should take to the streets with the same vigor over crimes committed by other Muslims. We'll leave aside for the moment that nobody seems to actually do that - people sometimes take to the streets to protest the actions of their own government, but I can't recall a single instance, anywhere, of people of any religion taking to the streets to protest the actions of terrorists merely because they happen to share their faith or ethnicity. But let's pretend for the moment that Muslims are unique in that respect. Perhaps we should look at how somebody described protests in the Muslim world:

Where Islam is imbedded in authoritarian societies it tends to become the vehicle of angry protest, because religion and the mosque are the only places people can organize against autocratic leaders. And when those leaders are seen as being propped up by America, America also becomes the target of Muslim rage.

It's also worthy of note that those authoritarian regimes take advantage of what one might deem "fake issues" - things they don't really care about, but which stir up the people - as an opportunity to let the people take to the streets and vent rage that might otherwise be directed at the government.

But where Islam is imbedded in a pluralistic, democratic society, it thrives like any other religion.

That, apparently, is why Friedman doesn't call upon the Muslims of India to protest acts of terror by other Muslims. Although it would be easier for them to do so.

What would be the goals of the protests Friedman wants to see? Somebody once suggested,

Throughout history, successful social protest movements have had one thing in common - a clear, simple message and objective. Whether it was the women's rights movement or the anti-Vietnam-War movement, the mere uttering of the name immediately conjured up who the protesters were and what their objective was.

Friedman takes note of Pakistani expressions of concern, anguish and solidarity, but that's not enough for him:

But while the Pakistani government’s sober response is important, and the sincere expressions of outrage by individual Pakistanis are critical, I am still hoping for more. I am still hoping — just once — for that mass demonstration of “ordinary people” against the Mumbai bombers, not for my sake, not for India’s sake, but for Pakistan’s sake.

Why? Because it takes a village. The best defense against this kind of murderous violence is to limit the pool of recruits, and the only way to do that is for the home society to isolate, condemn and denounce publicly and repeatedly the murderers - and not amplify, ignore, glorify, justify or “explain” their activities.

What's the simple message that Friedman expects the protest to convey? "Hey, hey, ho ho, Lashkar-e-Toiba has got to go"? How many Lashkar-e-Toiba members does Friedman believe hang out in Islamabad? How many members of that group do you think care about the opinion of anybody in Pakistan who is not on board with their cause? A protest is going to change that?

The recurrent theme to Friedman's columns is his professed belief that, "Muslim protests against terrorism by Muslims would dry up the pool of recruits." The first problem is, Lashkar-e-Toiba isn't focused on the "three rivers of rage" that somebody sees as the basis of al-Qaeda-type terrorism. Its primary goals are territorial - ejecting India from Jammu and Kashmir. So in this context it's much less like the analogy Friedman makes, to protests against cartoons about Mohammed, and is more akin to the IRA - a conflict that was nominally "Catholic versus Protestant", but was in fact grounded in a territorial dispute. (Need it be said that Friedman never called for the world's Catholics to rise up in mass protest of IRA bombings in London, let alone argued that such protests would dry up the IRA's ability to recruit members?)

The second problem is that Friedman's calls for mass protest within the Muslim world is an assignment of collective guilt. He apparently sees all Muslims, whatever their sect or nationality - and perhaps especially those who live under autocratic regimes - as having essentially the same values, beliefs, and sympathies toward terrorism. Despite arguing that the roots of Muslim terror emerge predominantly from living under autocratic governments that keep their people "voiceless and powerless and prevent them from achieving their full aspirations in a world where they know how everyone else is living" and that Islam will peacefully thrive as part of a "Multi-ethnic, pluralistic, free-market democracy", his taking to the streets "solution" does nothing to address what he, himself, has declared to be the cause of the problem.

This leaves the question, does Friedman truly believe that the Islamic world is monolithic, such that a terrorist act by a Muslim is attributable to all Muslims unless it is denounced by a "mass demonstration of 'ordinary'" Muslims? That we should assume in relation to Islam (and only Islam) that if there is not a mass protest then there must be mass acceptance?

But at the end of the day, terrorists often are just acting on what they sense the majority really wants but doesn’t dare do or say.

Is this a dodge, "I don't believe that to be true of Islam, but the terrorists do?" If so, it's a distinction that gets past the biggest fans of this type of column. Oh, I know, it's not Friedman's fault if people misunderstand his columns and use them to advance anti-Islamic bigotry - but it's not something he's going to, you know, protest.

In short, Friedman is correct to call on the Muslim world, and perhaps particularly Muslim communities in the free world, to be much more vocal in deploring terrorism that is committed in the name of Islam. If you oppose terrorism that is being committed in your name, quietude is not the answer. If the Muslim communities of the world can take to the streets over blasphemy against Islam from outside of their faith, there's room for demonstration (in not in the form of protests, then at least in the form of public vigils) protesting blasphemy from within - the acts and attitudes of certain Muslims that suggest that terrorism and violence against civilians and "infidels" is legitimate under Islam. When it comes to condemning terrorism, the words of the Islamic community should be loud and sincere. And Friedman is correct that actions often speak louder than words.

At the same time, I disagree with Friedman's implication all terrorist acts committed by Muslims are rooted in religion and are attributable to the collective attitudes of all Muslims. He's also far too simplistic in his suggestion that the type of mass protest movement he demands would have any appreciable impact on terrorist groups, or that even if some protests occurred there would emerge a coherent, sustainable movement.

The type of attitude shift Friedman wants will have to start with the opinion leaders and religious leaders, particularly those within the Islamic communities that are most inclined to spawn terrorists. And it must be facilitated by the political leaders of Arab states - the same autocratic, non-democratic leaders who facilitate and benefit from the status quo that Friedman deplores and describes as the principal cause of Islamic terrorism. It really wouldn't hurt if the U.S. and the regimes of the Arab world started working to dry up the "three rivers of rage" that Friedman sees as the principal causes of Islamic terrorism.

Bailing Out Chrysler

When Cerberus Capital Management, LP, comes to Washington D.C. to ask taxpayers to bail out its failed investment, I can't help but think, "No!"

My objection doesn't arise from a lack of concern for the workers. I know some Chrysler workers who are likely to be laid off whether or not there is a bailout. Hate unions if you will, but auto industry job losses will cause extreme hardship for a lot of good people.

But here's the wrinkle. Unlike GM and Ford, Chrysler is not a public company. It's in the portfolio of a wealthy private equity firm:

Cerberus Capital Management, L.P. is one of the world's leading private investment firms. Cerberus specializes in providing both financial resources and operational expertise to help transform undervalued companies into industry leaders for long-term success and value creation....

Cerberus holds controlling or significant minority interests in companies around the world. In aggregate, these companies currently generate over $100 billion in annual revenues.

That's right - a company that is supposedly a leader in providing financial resources and operating expertise to failing companies wants U.S. taxpayers to paper over its losses.

As a private company, Chrysler doesn't have to publish financial statements and it doesn't appear that Cerberus is going to open its books. We're told that CEO Bob Nardelli gets a salary of only $1, with no benefits, but he receives other income that's not disclosed - what is it, and why is it a secret? Given his glorious golden parachute from Home Depot, he doesn't actually need to be paid, but let's not pretend he's actually earning a mere dollar. Chrysler has told Congress that it expects an operating profit of $2.6 billion in 2010, with slightly lower profits in 2011 and 2001. If that's what they truly believe, why isn't Cerberus happily financing its own bail-out? Why is it suggesting that absent an infusion of taxpayer money, Chrysler is likely to enter bankruptcy?

If Chrysler is going to fail without additional working capital, it's not because Cerberus can't afford to pay. If it wished, it could sell part or all of one or more of its other holdings or borrow money against those holdings to keep Chrysler running. If it won't, it's safe to conclude that it doesn't think Chrysler is a safe or worthy investment. And if that's what it thinks, why should taxpayers subsidize their billionaire's version of "flip this house"?

Further, there's cause to question whether Chrysler can survive as an independent company. If it cannot, why should taxpayers bear part or all of the loss Cerberus faces as it carves up the company and sells off its viable parts? From what I can see of its present cost-cutting measures, it is not planning to remain independent - given the manner in which it has reduced its professional workforce, it's not even clear that it still has the capacity to develop a new generation of vehicles. At the same time, the announced round of job cuts will save a suitor a lot of trouble, as there will be a much lower level of redundancy if Chrysler is acquired by another auto company.

I would offer Chrysler loans on one of two conditions:

1. Cerberus first sells Chrysler to a publicly traded firm, divesting itself of any and all interest in Chrysler (and yes, this still works as a subsidy to Cerberus, as it will increase the selling price); or
2. Cerberus guarantees the money Chrysler borrows, putting up its portfolio of investments as security.

If they are asking that this money be loaned to Chrysler Holdings LLC, with no recourse against Cerberus itself, I would tell them to kiss off.

Governing Like Bush?

Michael Gerson's the latest to pen an "OMG! He's Just Like Bush!" column about Barack Obama - the type of column that suggests that his only sources of information about Obama are party memos and McCain's campaign ads.

Conservatives have generally feared that Obama is a closet radical. He has uniformly voted with liberal interests and done nothing to justify a reputation for centrism.

Until now.

Because there is no evidence that Obama is a cautious politician with a history of working from consensus and not making waves. Oh, wait. I guess there is plenty of evidence if you base your analysis of Obama's record on, you know, his record. I believe Larison overstates his case in respect to the implications of this:

Most people in the broad “middle” seem to be relieved by Obama’s moves in the last few weeks, so I have to conclude that they don’t have much of a problem with conventional Washington thinking, either. The majority is not just getting the government they deserve, but apparently it is also the government they want. When it fails them, as it is going to do, I don’t want to hear them complaining about the problems of the status quo.

Our system is constructed to impede radical change. If you want disappointment, elect your ideological hero in the form of a Dennis Kucinich or a Ron Paul, and see how his agenda for reform never even gets out of the starting blocks. But that aside, it's always been readily apparent that Obama's far from being the socialist revolutionary the McCain campaign, and portions of the right-wing punditocracy, attempted to argue. But back to Gerson:

Obama's appointments reveal not just moderation but maturity - magnanimity to past opponents, a concern for continuity in a time of war and economic crisis, a self-confidence that allows him to fill gaps in his own experience with outsize personalities, and a serious commitment to incarnate his rhetoric of unity.

Again, which part of this wasn't apparent from Obama's record?

Obama is benefiting from being the only player on the stage - all his pretensions of moderation could be quickly undermined by a liberal Congress, unhinged by its expanded majority. And Obama's social liberalism could still turn Washington into a culture-war battlefield.

I suspect that Gerson means this as a caution, or as a distinction from G.W. - But if you look at the history of G.W.'s administration, perhaps instead he's warning us that Obama's first term could look like G.W.'s administration, during his first eight months and starting again with his reelection, where his popularity plummeted and he ran both his administration and (with their active complicity) his party into the ground.

Though Obama's campaign savaged the administration as incompetent and radical, Obama's personnel decisions have effectively ratified Bush's defense and economic approaches during the past few years. At the Pentagon, Obama rehired the architects of President Bush's current military strategy - Gates, Gen. David Petraeus and Gen. Raymond Odierno. At the Treasury Department, Obama has hired one of the main architects of Bush's current economic approach.

This continuity does not make Obama an ideological traitor. It indicates that Bush has been pursuing centrist, bipartisan policies - without getting much bipartisan support.

Good grief, does Gerson pay attention to anything? When Obama launched his campaign, we were told of the superiority of Bush's war policy, and that Obama's call for ending the war and fixing a date for withdrawal of the troops was defeatism that would reward terrorists. Around that same time, Bush brought in Gates to replace the disastrous leadership of Donald Rumsfeld and within months "every single one of the top commanders running the war ha[d] been replaced." Bush has since negotiated a timetable for the withdrawal of U.S. forces from Iraq. That is, in the face of significant public opposition to his war and his policies, Bush shifted his position from his prior (failed) partisan policies to something to what he would formerly have described as letting the terrorists win.

Gates was appointed by the Senate in a 95-2 vote. When Bush started moving from partisanship toward the positions shared by the majority of Congress and the majority of the American people, he got plenty of support. It isn't Obama who has shifted on these issues - it's Bush.

In terms of treasury, Gerson is apparently talking about Timothy Geithner. There's good reason to believe that Geithner has worked with Henry Paulson to fashion the response to the present crisis in the financial industry, but... you know, funny thing, you would expect the president and CEO of the Federal Reserve Bank of New York to be involved in this sort of crisis. Although I am not at all impressed with Paulson's inconsistent approach to this crisis, or his tendency to indiscriminately and unconditionally throw money at banks while refusing to hold bank executives responsible for their incompetence, he's clearly been given a lot of discretion to respond to this crisis. To some degree you have to credit Bush with giving him that discretion, but Bush's desperation is hardly reflective of centrist policy. In normal times, the political center would be horrified by what Paulson has been doing - actually, it's hard to imagine any segment of the political spectrum that wouldn't be horrified. So again, this is a horrible example of Bush's supposed centrism.

Particularly on the economy, Bush has never been a libertarian; he has always matched a commitment to free markets with a willingness to intervene when markets stumble.

I'm not sure what Bush has been "on the economy", other than a failure by the measure of the political left, political right, job market, stock market, housing market.... But I'll grant, he's no libertarian.

Third, Obama is finding the limits of leading a "movement" that never had much ideological content.

This notion of a "movement" seems to emerge from two separate phenomena - the fact that some individuals and loose-knit groups projected their own political goals onto Obama (as, frankly, happens with pretty much any new, charismatic political leader who builds a coalition sufficient to win a national election), and the caricature advanced by people like Gerson. But you know, there's one person whom I've not once heard speak of Obama as a leader of a cohesive "movement" - Barack Obama. And there's a guy who has been willing to disappoint large groups of his supporters on issues such as Iraq policy and FISA, even before he was elected. (Can Gerson guess his name?) But then, Gerson was apparently taken surprise that Obama reappointed Gates, despite, you know, Obama promising to reach across the aisle when composing his cabinet.

Reappointing Gates is also politically savvy, as it makes it harder for Republicans to blame Obama if the Iraq phase-down goes poorly. But whatever Obama's motivations, take a step back and think about what it means for Gates to be accepting this reappointment. He had the alternative of cashing in, big time with a book deal, private sector jobs... think Cheney at Halliburton. It's a testament to his character that he's continuing in the job, and a testament to Obama that he's again willing to disappoint supporters who wanted a clean break from past war policy in order to retain somebody who may in fact be the best available choice for the job. So with regard to Gates, although my reasoning is different, I'll accede to Gerson's conclusion - That's centrism we can believe in.

As for Gerson's having his hopes raised by Obama's "disappointing the ideologues", he may be onto something. After all, had Bush been more willing to stand up to factions exemplified by PNAC, the Club for Growth, the domestic energy industry, etc., his administration might not have been such a miserable failure.

Doorbuster Sales

Following the death of a Wal-Mart worker, NYC appears poised to require additional security during "major sales". Despite the tragedy, given that security measures appeared to be at least adequate at all stores except the one where the death occurred, it's reasonable to question the necessity of the law.

But if you want to be sure that this won't happen again, is security really the problem? Or is it that the concept of a "doorbuster" sale became too literal. The fact is, when you offer an array of loss leaders designed to attract huge crowds to stores, and offer an additional array of discounts that are only valid for the first few hours of the shopping day, bargain hunters must mass at the doorways at opening time in order to even have a chance for the best deals.

Loss leaders are, of course, quantity limited discounts meant to bring in those big crowds. The idea is that, although few shoppers will be able to take advantage of those discounts, people attracted by the possibility will buy other merchandise. The only thing that differentiates a loss leader from "bait and switch" is that your ads specify that quantities are limited (e.g., "Only 200 available at this price).

If you want to keep crowds from massing at the doorway, classify the advertisement of limited quantity loss leaders as a form of "bait and switch", require issuance of rain checks when quantities run short, and require all specials to be offered through the entire business day. Stores would object, as you would be removing elements that help create the frenzied atmosphere that allows them to clear their shelves of stuff that a calmer crowd would probably leave behind. But you won't have people trampling store clerks, beating up other shoppers, or shooting each other over the possibility of missing that "doorbuster" deal.

Alternatives to the War on Drugs - The (Uncomfortable) Third Way

CrimProf blog tells us what anybody should already know - the "war on drugs" as presently fought is an extraordinarily costly failure, and the drug situation is not likely to improve unless we focus on demand instead of supply. But it's simplistic to suggest that treatment programs are the key to winning the drug war. Unless you're going to expand the meaning of "treatment" beyond the comfort zone of a lot of Americans.

Drug treatment is remarkably ineffective, not because we don't now have some pretty good programs and models for treating addicts, but because until an addict is ready for sobriety the odds of successful treatment are close to zero. If you're not an addict, this is really hard to grasp. I still can't quite fathom why somebody would spend time in a jail or prison, be completely broken from any physiological addiction to cigarettes, but then light up the moment they get out. It doesn't make sense, but that's addiction at work.

In a "war on drugs" parallel, a couple of years ago I met an addict who was in the process of detoxing from heroin, who described how he had previously spent a full year in a very expensive residential treatment center - about $30,000 per month. He had agreed to drug treatment as part of a one year drug diversion sentence for possession. His dad had picked up the tab to keep him out of jail. He indicated that although he was "clean" for the full year and passed all of his drug tests, he spent the entire year waiting for the moment his year was up. Within an hour of the court appearance at which he was discharged as having "successfully" completed the diversion program, he had a needle in his arm. He was back in treatment because he had been arrested again. My guess is that he's since again relapsed.

Meanwhile in Switzerland, they're experimenting with prescription heroin, administered in a clinical setting for a class of addicts for whom all else has failed. It's a bit jarring, but in fact if you want to reduce the demand for street drugs, sometimes you have to make their equivalent available in a clinical setting. This approach offers some benefits that may not be immediately apparent, including providing the addict with pharmaceutically pure drugs (the poisons and toxins in street drugs can carry serious health consequences), and opening the door to drug education, counseling, and the possibility of treatment. The U.S. has moved uncomfortably into the drug substitution and maintenance model, through methadone clinics, but an addict's participation in that type of program is often a result of desperation - they've reached a point in their addiction where their need for drugs exceeds their supply - and not about recovery.

Like it or not (and I don't), addiction is a part of human nature, and a consequence of human biology. There's not a country in this world that doesn't have a "drug problem", and there never will be. It makes sense to move into a model of a "war on drugs" that involves a sensible use of resources, and as much as possible removes the criminal element from the drug trade while treating addiction as a public health problem. But if the only tools we apply to the problem are "drug treatment" and "cutting off supply", we should not expect the situation to improve.

More On The Financial Mess

The AP covers how, in 2005, the Bush Administration's contemptuousness of regulation and deference to lobbyists led to its rejecting regulations that could have helped diminish the bad lending practices that contributed to the housing bubble.

The Bush administration backed off proposed crackdowns on no-money-down, interest-only mortgages years before the economy collapsed, buckling to pressure from some of the same banks that have now failed. It ignored remarkably prescient warnings that foretold the financial meltdown, according to an Associated Press review of regulatory documents.

"Expect fallout, expect foreclosures, expect horror stories," California mortgage lender Paris Welch wrote to U.S. regulators in January 2006, about one year before the housing implosion cost her a job.

Bowing to aggressive lobbying — along with assurances from banks that the troubled mortgages were OK — regulators delayed action for nearly one year. By the time new rules were released late in 2006, the toughest of the proposed provisions were gone and the meltdown was under way.

Also, CJR covers a Wall Street Journal article observing that, while the financial industry is presently being given a free pass for the incompetence of its management, it has a lot more in common with the auto industry than Congress has so far acknowledged:

For their part, banks have found lots of causes for their predicament aside from their own failings. The crisis, they have argued, is down to an impossible-to-predict perfect storm, predatory hedge funds, panicked investors, unrealistic accounting rules and economic changes that emerged so quickly there was no way to be prepared for them.

If only. The reality is the crisis is due to bad lending and investment decisions. And those, after all, form the core of the banking business. In auto terms, it’s as if banks designed cars that suffer from catastrophic mechanical failures, or can’t be driven during snow storms.

CJR concludes that the author is "right to point out there’s more urgency with fixing the banking system, and right to point out that doesn’t mean they should come out looking the same."Bush

The Lori Drew Case and Prosecutorial Grandstanding

Reactions to the Lori Drew verdict seem to come primarily in two forms:

• Lori Drew is such a horrible person that even if the law is bent to the point of breaking, or even if it sets a really bad precedent, the verdict should stand so that she is punished for her bad acts (see, e.g., news articles that cover the actual charges, yet still describe this as a "cyber-bullying case"); or

• It's really bad public policy and a distortion of the law (18 USC § 1030) to criminalize the violation of a website's terms of service, even if you really want to punish the person who committed the violation. (i.e., "Bad facts make bad law.")

There's another side to this: If the verdict does not stand, and there's a good chance that it will not, the shameless grandstanding by U.S. Attorney Thomas P. O'Brien will have expanded the injustice. It will have given Megan Meier's family the false sense that Lori Drew would go to prison for crimes that should never have been charged. Oh, probably O'Brien will harrumph about how he was right, about how Drew is evil incarnate, and how either the trial court or appellate court has unreasonably second-guessed the good men and women of the jury. Such a reaction would be consistent with what this prosecution is about - the furtherance of Mr. O'Brien's personal and political goals.

Seriously.

Had Mr. O'Brien gone to MySpace and said, "I want to set an example for the nation by prosecuting somebody for violating your terms of service", what are the odds they would have picked this case? If they wished to go after people who create accounts to harass or annoy other users, there are people they can document as having created scores of fake accounts for that purpose. If they wished to go after the misconduct that most affects their bottom line, they would have directed Mr. O'Brien to professional spammers who create hundreds or thousands of fake MySpace accounts to spam MySpace users. You want evidence of MySpace's priorities? If you look at where MySpace expends its own money, it's in the pursuit of spammers.

Further, if MySpace were to go to Mr. O'Brien with it's latest stack of TOS violators - no doubt many thousands per day - and ask Mr. O'Brien to prosecute them, he would reject their proposal as ridiculously burdensome. Prior to seeing the opportunity to grandstand in the Lori Drew case, he most likely would have told them to pursue the violations by terminating accounts, or through the civil courts. Realistically, MySpace wouldn't have even asked.

Right now, Megan Meier's family would have the right to feel underserved by the legal system. Her local prosecutor didn't find that any crime was committed, and Missouri's federal prosecutor passed on the case. Mr. O'Brien was able to produce convictions only on a number of misdemeanors. Meier's mother is, predictably, calling for the maximum sentence, apparently out of recognition that this case is really about what happened to her daughter and not what was prosecuted - an offense against MySpace. Assuming that the sentencing occurs, and that the trial judge is not as interested in self-aggrandizement and grandstanding as Mr. O'Brien, her first disappointment will be that Ms. Drew's sentence is far more lenient. A bigger disappointment is probably forthcoming - If the trial court or appellate courts do their job, it is likely that Ms. Drew will end up having her convictions reversed.

Assuming the verdict is upheld, what's the lesson? That we'll see selective prosecution based upon the outcome to a third party, without regard to the magnitude of harm to the ostensible victim (the online service)? That we're going to be held to an absolute standard of knowing the current terms of service of every Internet service we use (hours of reading per day for an active Internet users), at risk of criminal prosecution if we violate those terms? Are we supposed to be reassured that, although far more egregious violations of the statute occur every minute of every day, that a federal prosecutor is not likely to act unless he gets an opportunity for self-aggrandizement? And the only cost is that an occasional, possibly unpleasant person will be dragged across the country for a show trial, at considerable public and private expense, principally for the benefit of that prosecutor? How... comforting.

Pumpkin Pie, Reinvented

The recipe highlighted here is quite good - it really does garner, "I don't like pumpkin pie, but I like this" reactions - and it's easier to make than it initially might appear. I might try a graham cracker crust instead of a regular pie crust next time. But really, if you're gathering recipes for next Thanksgiving, it's one for the file.

Conrad Black's Lament

You know, for many years Conrad Black and his wife were positioned to do a lot to bring attention to the flaws in the criminal justice system, the manner in which the cards are stacked against a defendant, the dismal state of prisons and the limited chance that they'll inspire an inmate to reform.... And if they were now addressing the problems from an insider's perspective - an inmate and his wife, waiting on the outside - their words might still have some resonance. But their words are lost in a sea of self-pity.

Here's Conrad Black - "From my cell I scent the reeking soul of US justice ". Oh, smell that smell. No really, it sounds like he's in a rather nice prison:

Many of the other co-residents are quite interesting and affable, often in a Damon Runyon way, and the regime is not uncivilised. In eight months here there has not been the slightest unpleasantness with anyone. It is a little like going back to boarding school, which I somewhat enjoyed nearly 50 years ago (before being expelled for insubordination) and is a sharp change of pace after 16 years as chairman of The Daily Telegraph.

Black complains,

US federal prosecutors, almost all of whom would be disbarred for their antics if they were in Britain or Canada, win more than 90% of their cases thanks to the withering of the constitutional guarantees of due process – that is, the grand jury as an assurance against capricious prosecution, no seizure of property without just compensation, access to counsel, an impartial jury, speedy justice and reasonable bail.

He seems to have crossed his constitutional protections - the Fourth Amendment protection against unreasonable search and seizure with the Fifth Amendment's prohibition on taking private property for public use without just compensation. But he gets at some of the complaints against the system, particularly the manner in which the grand jury has been transformed from what was intended to be a safeguard against prosecutorial abuse, into what often amounts to an investigative arm of the prosecutor's office, to the point that Judge Wachtler's observation that a Grand Jury can be easily persuaded to "indict a ham sandwich" is met not with surprise, but with a shrug.

The problem with Conrad Black's laments is that they turn from broad statement to personal lament. Does he share the experiences of other inmates or their families? People far less fortunate than him, with far fewer resources to throw into their defense? No, and from his tone he probably hasn't even taken the time to ask. It's not even apparent that he regards his broad statements against the justice system as being particularly true or salient, except in relation to his own case and his own circumstances. It's all about him.

The US is now a carceral state that imprisons eight to 12 times more people (2.5m) per capita than the UK, Canada, Australia, France, Germany or Japan. US justice has become a command economy based on the avarice of private prison companies, a gigantic prison service industry and politically influential correctional officers’ unions that agitate for an unlimited increase in the number of prosecutions and the length of sentences. The entire “war on drugs”, by contrast, is a classic illustration of supply-side economics: a trillion taxpayers’ dollars squandered and 1m small fry imprisoned at a cost of $50 billion a year; as supply of and demand for illegal drugs have increased, prices have fallen and product quality has improved.

Black rattles off these complaints and statistics without relating them to his own case. It wouldn't necessarily be that hard to do - a weakening of civil liberties and protections offered to criminal defendants in the name of looking "tough on crime" or fighting the unwinnable "war on drugs", but alas, Black isn't offering this out of concern for its having been the wrong path to take. Was there any time during his career, when he could have directed scores of investigative reporters to delve into the flaws of the criminal justice system or hired editorial columnists who would have directed scorn and scrutiny at its flaws and excesses, that he had anything to say about these issues? The argument's still about him; he's tossing in the kitchen sink.

A few months back, I read a similar column by Barbara Amiel, Conrad Black's wife. I created a draft blog post, but let it go unpublished.

Writing about Conrad Black's prison sentence, his wife Barbara Amiel has is concerned about the little people:

So what, you ask. What does it matter if one well-off, elderly white woman with too many pairs of expensive shoes now finds her social life largely limited to visiting her dearly missed husband in a US federal correctional institution? Should be interesting material for her as a writer.

But if the rich and well-connected cannot get justice, what chance for anyone else — a question I asked in columns about the law long before I married Conrad. What chance for the orange jump-suited, marginalised young men I saw shuffling in front of the judge in Chicago, silent while their court-appointed attorneys negotiated their freedom away in that tight little legal world, where a client’s fate never disturbs the bonhomie between lawyers.

I would love to see one of those columns... anybody have a piece of yellow, crumbling newsprint where Amiel set aside her typically right-wing views to fret about the quality of criminal defense services?

If ostensibly privileged defendants like us can be baselessly smeared, wrongfully deprived, falsely accused, shamelessly persecuted, innocently convicted and grotesquely punished, it doesn’t take much to figure out what happens to the vulnerable and the powerless: they land, finally, in the 8:45am courtroom parade that takes place all over “America the Free” — the country that “wins” 90% of cases and imprisons more people than any other in the world.

Ostensibly.... That would mean "seemingly" or "apparently". There's no "ostensibly" about it - people with hundreds of millions or billions of dollars in wealth are privileged. And Amiel's over-the-top comparisons only serve to highlight how she elevates her own situation over that of the jump-suited little people:

In any event, were I a clothes-crazy predator and were my husband the arrogant and pompous caricature of the books and films depicting him, what then? ... If Dreyfus had been a loud and vulgar Jew instead of an officer and a gentleman, would his case have been any the less important or his persecution less unjust?

I'm sorry - she just compared Conrad Black's conviction to the Dreyfus Affair? No, wait....

Conrad had no idea, and one could not convince him, that he was in Salem, in the middle of an American witch-hunt. There is no defence against false accusations in Salem.

He's a witch being burned at the stake after a trial by ordeal!

I'm not sure that responding to this level of self-pity and self-righteousness serves to advance any cause, and it seems to me that if anything, it's probably counterproductive to Black's cause. Black now makes it clear that he and his wife are on the same page.

Are Law Degrees Versatile?

The National Law Journal recently asked, Is the Versatility of a Law Degree Just a Myth? Well, yes and no. If you go to law school without any real desire to practice law, and with no concept of where your career might go afterward, you're probably going to find out that there are many degrees that are far more versatile than law. If you then try to enter a field outside of law, what employer wouldn't be curious as to why you sought the law degree, or how your law degree better qualifies you for the job than the degree of a more typical applicant?

And then there's often the question of why you're choosing a career path that pays less than legal practice. Is your explanation that you're looking for greater job satisfaction, and are willing to take a pay cut for a job you love? Is it, "Legal practice (or at least the practice I was in) doesn't pay what you think"?

When you look around and see lawyers in a wide range of fields, ask yourself how they got there? If they're older, and entered a business field back before the MBA was created, there's no direct comparison. When the degree of preference in a field has changed, the easiest way to enter that field is with the preferred degree. But what of the others? Are they truly there because of their law degree and its versatility, or because they found a way into a field by virtue of their personal interests and skills and, assuming their legal background remains relevant to their job duties, found a way to make their law degrees work for their employer.

I would not suggest to somebody who simply can't decide what they want to do "when they grow up", that they go to law school. For that matter, I would have words of caution for somebody who understands what legal practice entails and wants to join the legal profession. But really, if you're meandering, an MBA is generally going to be cheaper and will likely provide more flexibility (save for getting you a license to practice law). The flexibility I see in a law degree often has more to do with the person holding the degree than the degree itself.

Still, if you're from a modest background and are willing to put in the effort it takes to get through law school, position yourself to get into a well-paid legal position, and work yourself ragged for enough years to build up some capital, it's a slow, tedious way to get to the point that you can afford to truly follow your dreams.

An Ineffective Protest?

As we were driving to my in-laws' house for Thanksgiving dinner, we had to brake to avoid a wild turkey that suddenly flew in front of our car. It had been at the side of the road with a second turkey that, one would hope, had been clucking the equivalent of "Don't do it. Not only is it dangerous, what self-respecting turkey plays chicken?"

Strangely, if you tell people that you stopped on the way to a family gathering for wild turkey, some of them get the wrong idea.

Heads Should Be Rolling

Thomas Friedman, following up on this New York Times article, makes the case that the leaders of the financial industry, now reaping the benefits of the gargantuan, taxpayer-funded bailout, are incompetent or worse:

Why? Because in searing detail it exposed - using Citigroup as Exhibit A - how some of our country’s best-paid bankers were overrated dopes who had no idea what they were selling, or greedy cynics who did know and turned a blind eye. But it wasn’t only the bankers. This financial meltdown involved a broad national breakdown in personal responsibility, government regulation and financial ethics.

With due respect to Friedman's acknowledgement that responsibility spreads well beyond those financial institutions, and duly acknowledging his focus on the leaders of finance and that he's not defending Paulson's decision to treat them with kid gloves, how can you argue but that those at the top of the financial industry who were either too stupid or too greedy to put on the brakes should be keeping their jobs, even as they get tens to hundreds of billions of dollars of taxpayer money and guarantees for their junk securities?

Also check out Michael Lewis’s superb essay, “The End of Wall Street’s Boom,” on Portfolio.com. Lewis, who first chronicled Wall Street’s excesses in “Liar’s Poker,” profiles some of the decent people on Wall Street who tried to expose the credit binge — including Meredith Whitney, a little known banking analyst who declared, over a year ago, that “Citigroup had so mismanaged its affairs that it would need to slash its dividend or go bust,” wrote Lewis.

“This woman wasn’t saying that Wall Street bankers were corrupt,” he added. “She was saying they were stupid. Her message was clear. If you want to know what these Wall Street firms are really worth, take a hard look at the crappy assets they bought with huge sums of borrowed money, and imagine what they’d fetch in a fire sale... For better than a year now, Whitney has responded to the claims by bankers and brokers that they had put their problems behind them with this write-down or that capital raise with a claim of her own: You’re wrong. You’re still not facing up to how badly you have mismanaged your business.”

Corrupt? Stupid? Or is it that they are so used to being lionized by a nation captivated by wealth, despite their limited knowledge and skills, and so immersed in a culture where almost anything goes in the name of profits, that they weren't aware that they should even try to look past their greed?

A few months ago, with this crisis looming, Friedman wrote,

Come August, though, I predict both men will be looking for a financial wizard as their running mates to help them steer America out of what could become a serious economic tailspin.

I wish he had "named names", as I am curious as to whether the reputations of the "financial wizards" he had in mind would have survived the past five months.

Coordinated Bankruptcy for the Auto Industry

The Times offers an interesting editorial proposing that the federal government facilitate the simultaneous bankruptcy of the "Big Three" auto makers, accompanied by extension of sufficient credit to sustain their operations through that process. This beats the current congressional proposal of, "Come to us with a business plan we like and maybe we'll lend you money," as it would allow the auto companies to address problems they cannot discuss as part of such a business plan - for example, how to eliminate failing brands and close hundreds of auto dealerships. If Ford announces, "We're going to close down Mercury," or even more modestly, "We're going to close it down as an independent line, while making select Mercury models available through Lincoln dealerships", they would create immediate consumer concern about Mercury vehicles, and would be immediately sued by Mercury dealers. If they say, "To control expenses, we need to cut the number of dealerships by a third," again they would be facing lawsuits by car dealers afraid of being among that third.

Meanwhile, the fact is that the manner in which cars are sold and distributed in this country is out-of-date, excessively costly, and anything but consumer friendly. At this point if you want to buy an iPod and only an iPod, you can go online to the Apple Store and buy one. But if you want to price shop or compare the iPod to other brands, you can choose from thousands of online and retail vendors who carry multiple brands of MP3 players. While iPhone sales are more constrained, once again you can find stores that offer contracts through multiple services, so you can go in and choose between an iPhone and a variety of service plans, and similar products from other vendors and service providers.

Try that with a car.

What if you're interested in offering a new type of dealership - a concierge type service that caters to professionals at their offices, allows them to arrange to drive a car model of their choice on their schedule, and offers the full range of makes and models they are apt to want to buy? Good luck with that.

What if an auto maker wishes to take the Saturn model to its next logical level, and build a Dell-style website where customers can pick a model - any model they offer - customize it, and have it delivered in days to a dealership with them with no haggling, no surprises, no post-sale pressure for "paint protection" or similar add-ons, no concern about financing (you've already been approved online) or confusing over rates. Get a good price, don't worry that you're paying more than the next guy or being otherwise hoodwinked, and show up at the dealership to inspect your vehicle, go over any special features, and drive away. The manufacturers are already about 90% of the way there with their "design your own vehicle" features on their websites. But do you think there's any chance that the crucial remaining 10% will get past NADA?

Bankruptcy only touches on these issues - facilitating the dropping of brands and closure of dealerships - but it doesn't do anything to overcome anachronistic, protectionist state laws that prevent innovation in vehicle distribution and sales, reduce manufacturer and customer cost, and increase customer convenience. But really, you're unlikely to hear anything about this from the CEO's of the Big Three.

I continue to favor something similar to bankruptcy but legislated by Congress, as opposed to Chapter 11, as being a possible path to reforming the auto industry with a much lower risk of failure. For those who complain, "Foreign auto makers will think it's unfair," I say, "They're not complaining about protectionism in their own nations, and you know what else - they're welcome to join in." If Congress is unwilling to act, cannot act with sufficient speed (as the authors of the editorial surmise), or forces bankruptcy upon the domestic auto industry, I think it's fair to say that it will be the result of a failure of leadership - in Congress, the auto industry, the UAW, and the nation's auto dealers and their "union", NADA (who are strangely omitted from most discussions of the industry's problems).

"If We Keep Throwing Cash On The Fire...."

"... Surely we'll eventually smother the flames."

Watching Paulson and friends scurry around pouring money on one fire after another, with no apparent concern for consistency other than protecting the jobs of their peers and the wealth of stockholders, is fascinating. It's a mad world.

Mad World....

Had Kerry been elected in 2004 and had he initiated a similar "bail-out", can you imagine how Republicans would be responding to the near random manner in which Bush and Paulson are running around, throwing bushels of money at the financial industry? Or that the auto industry's request for $25 billion in federal loans would seem miniscule as opposed to the Bush/Paulson blank check for the financial industry? A year, or even six months ago, could you have imagined a blasé reaction by Congressional Republicans to a Democratic President-Elect's proposed two-year $600 trillion economic stimulus package?

You can blame whomever you want for those aspects of this crisis that predate Bush's tenure. Certainly, financial deregulation that occurred under Clinton played a role in this mess. But it's difficult to get past the top-to-bottom, front-to-back incompetence of the Bush Administration. And despite their lies protestations, the leaders of financial giants like Citigroup knew that they had flushed lending standards down the toilet and were taking enormous risk in the hope of reaping huge profits - and paychecks. I don't want to seem vindictive, but if they've run their companies into the ditch to the point that they need these multi-billion dollar handouts, given that context their CEO's should be tendering their resignations.

As recently as March, we were given projections like this:

You can see this for yourself in Table VI.F8 in Social Security's 2007 trustees' report. Compare "income excluding interest" with "cost," and you get cash flow numbers. (I'm ignoring interest, because it's paid with Treasury IOUs, not with cash.) You see that the system's cash flow is projected at about positive $92 billion this year. Nice. But by 2020 it's negative $96 billion, rising to about negative $280 billion in 2025, half a trillion in 2030.

Oh my.... half a trillion dollars in twenty-two years? Strangely, back in March that seemed like a big number. So what's the cure?

It would be nice to have $2.3 trillion in useful assets in an equivalent of a sovereign wealth fund - but we can't turn back time.

We can still buy time by investing current cash surpluses in non-Treasury assets. But that would require a change in the law and a change in the Washington mindset, neither of which seems to be in the offing.

Darn shame, because if we had invested the Social Security trust fund in private securities that follow the Dow, we would have earned, no wait, lost $800 billion. You know, on paper. I think Social Security privatization is off the table for a while.

What I wonder is, has the scale of this bail-out blown any notion of fiscal responsibility straight out of the budget. What will it take to get us back into a world where a half-trillion dollars is a "big deal"?

Because Without Political Progress....

A reminder from the Kurdish region of Iraq: Without political progress, at least by his original measure G.W. is right - the surge will have been a failure.

Kurdish officials this fall took delivery of three planeloads of small arms and ammunition imported from Bulgaria, three U.S. military officials said, an acquisition that occurred outside the weapons procurement procedures of Iraq's central government.

The large quantity of weapons and the timing of the shipment alarmed U.S. officials, who have grown concerned about the prospect of an armed confrontation between Iraqi Kurds and the government at a time when the Kurds are attempting to expand their control over parts of northern Iraq.

How well is "national reconciliation" coming along?

"Yes, the Kurds have this autonomous region and they're authorized to keep the pesh," one of the [U.S.] officials said, referring to the militia. "But arming themselves and bringing in weapons stealthily like that - if I were the Iraqi government, I'd be pretty concerned."

While violence in Iraq has decreased markedly in recent months, political tension is rising as Iraqi leaders gear up for provincial and national elections scheduled to take place next year, and as they prepare for an era in which the U.S. military will have a smaller presence there.

Of the primary fault lines - which include tension between Sunnis and Shiites and rivalry among Shiite political parties - the rift between Kurds and the Arab-dominated Iraqi government has become a top concern in recent months. Senior government officials have engaged in a war of words, and Iraqi army and pesh merga units have come close to clashing.

"You could easily have a huge eruption of violence in the north," said Kenneth B. Katzman, a Middle East specialist at the Congressional Research Service in Washington. "Nothing having to do with the Kurds is resolved."

And of course, the Kurds welcome us to stay:

Central government officials recently bristled at Barzani's offer to allow U.S. troops to establish bases in the Kurdish autonomous region, saying the regional government had no authority to make such an overture, especially as Iraqi officials are calling for a gradual withdrawal of U.S. troops.

The factions that want us in and the factions that want us out, it seems, are all trying to advance their own agendas. But reconciliation isn't very high on anybody else's list of priorities and... for that matter, may not even be on any list but ours.

Take What You Can Get....

The bad news, for GNR fans, is that the album doesn't seem to be well-reviewed. (If you care about reviews.)

The good news? You can still get free Dr. Pepper until 6:00 PM EST.

For those who love GNR and hate Dr. Pepper, or hate them both... sorry, no good news for you. Unless you count the fact that traffic to drpepper.com is so heavy, and people seeking a coupon are so likely to encounter a problem or error, that this could turn into a public relations boondoggle.

Mitch Albom Plays Auto Executive

And in their (hypothetical) voice notes,

Ask fair questions. Demand accountability. But knock it off with the holier than thou crap, OK? You got us into this mess with greed, a bad Fed policy and too little regulation. Don't kick our tires to make yourselves look better.

I'm really not a fan of gotcha politics; the grandstanding over auto executives' flying in by private jet was cute, but politicians should remember that turnabout is fair play. If the new rule is that executives of troubled or failing businesses, or those seeking tens of billions of dollars in federal aid can't fly their corporate jets, where is the comeuppance for AIG and Citigroup? (And dare I joke about G.W. having two spectacular private jets, given the mess he's made of pretty much everything he's touched?)

Like 'Em Or Hate 'Em....

Whatever your personal position on cases like Heller and Roe, today George Will does a pretty good job of explaining how those decisions lead to cases that require judges to substitute their policy preferences for actual interpretation and application of the Constitution. In terms of Roe,

Parental consent? Spousal consent? Spousal notification? Parental notification? Waiting periods? Lack of funding for nontherapeutic abortions? Partial-birth abortion procedures? Zoning ordinances that exclude abortion facilities? The court has tried to tickle answers for these and other policy questions from the Constitution.

In terms of Heller,

Now the court must slog through an utterly predictable torrent of litigation, writing, piecemeal, a federal gun code concerning the newfound individual right. What trigger locks or other safety requirements impermissibly burden the exercise of this right? What registration requirements, background checks, waiting periods for purchasers, ballistic identifications? What restrictions on ammunition? On places where guns may be purchased or carried? On the kinds of people (e.g., those with records of domestic violence) who may own guns? On the number of gun purchases in a month?

Where do I disagree with Will? While he, as a pundit, has fully embraced the notion that conservatives favor judicial restraint, the reality is quite different. Heller is not an exceptional ruling following a history of conservative deference to constitutional language and state and federal legislatures, it's a continuation of an activist history masquerading behind claims of "originalism" or "textualism". For the most part, political partisans either don't pay attention to the other side's judicial excesses, or simply don't care about their own. Will's column suggests that he falls into the former category, but now that he is aware of the issue it's up to him to demonstrate how much he actually cares about judicial activism that advances his own political agenda.

It has been said that the most important word in the Supreme Court's lexicon is not "liberty" or "equality" or even "justice," it is "five." But whereas in baseball a tie goes to the runner, in controversies about the constitutionality of legislation, a tie between serious arguments should, Wilkinson says, tilt judicial judgment to the democratic side - the legislature.

Except if the subject is campaign finance reform? Seriously, when it's your own ox that's being gored, it's really difficult to take a step back and say, "We should defer to the legislature," as opposed to, "Those judges are gutting the Constitution and stripping this right of any meaning." Moreover, whatever the right, there's a point where that will be true. Then what? Do we simply check to see whether or not the legislation under review includes "findings" that nominally support the legislation? Legislatures figured that game out a long time ago.

Will closes,

So, regarding judging, too, conservatism is a house divided. And as Lincoln said (sort of), a house divided against itself is really interesting.

And Will raises interesting issues that, unfortunately, aren't likely to be resolved at any time during the next two centuries of constitutional litigation.

Remember When We Had a Chance of Turning a Profit?

I'm not sure that Paulson's current plans are any better, but remember when we were told that we should buy up the financial industry's garbage, and could (or, in the mind of some people, inevitably would) even turn a profit after a few years? If you believed it then what do you make of the collapse of Citigroup's stock? The WSJ has an explanation:

Weighing down the shares has been the Treasury Department’s decision last week not to buy troubled assets from banks. Citigroup’s balance sheet includes battered securities and loans that many investors hoped could be offloaded to the government.

Go figure.

Making a Success of Foster Care

Britain's model of child protection and foster care (which sounds a lot like ours) is compared to Germany's:

Almost three quarters of [children in foster care] will leave care with no formal qualifications. Only one per cent will go on to enter any kind of university education. One fifth of looked-after children are homeless two years after leaving care; 25 per cent of our prison population has been through the care system. Things have to be really bad at home before care looks like a better option.

Yet in other countries the picture is very different. In Germany looked-after children do extremely well, with 95 per cent of children in the German care system going on to vocational education. Crime committed by looked-after children in Germany runs at 5 per cent of the rate of crime committed by those in our care.

This comes at a price:

Money is important. In Germany most looked-after children live in small community homes, with fewer than 16 residents. By contrast, more than two-thirds of our looked-after children are placed in foster families which cost less than a quarter of a residential placement in Germany.

But as compared to the up-front cost of effective foster care, are diminished productivity among foster care graduates and increased cost of incarceration the proverbial "pound of cure"?

To Call This Bad Judgment....

Please, tell me this is a joke....

A couple weeks ago, when I was biking to the store, I saw this one guy with a bike exactly like my boyfriend’s that got stole some time ago. So I rode ahead and stopped in front of him. He end up stop and when I tried to talk with him, he just acted dumb and never say a word. After a while, I gave up and head home to tell my boyfriend about this. Since this guy look easily intimidated and my boyfriend hate polices.

It kinda goes downhill from there. What, with the guy on the bicycle being a hearing-impaired, award winning kickboxer....

Okay, That's Just Weird....

Does anybody know why more than 5,000 people have visited this archive page in the past 24 hours, because they're searching for variations of "pygmy tarsier"? (Yes, I recognize that there's a reference to a "pygmy marmoset" on the page, but still.)

Meanwhile in England

Because the domestic auto industry's situation is unique.

I Wonder If We'll Ever Learn....

A few months back, I suggested that Mitt Romney's campaign song should be Everclear's "Everything to Everyone".

A song about a habitual appeaser for a man who will say anything to get elected, even if he said something completely different fifteen seconds earlier. The song is about how appeasement leads to failure, and I suspect that it will prove to be on the mark.

You remember Mitt Romney - the guy who got rich as a corporate raider, trading in no small part on his daddy's name and connections, became governor in Massachusetts, despite being a Republican professed a wide range of beliefs better associated with liberalism, passed a bunch of expensive legislation, and skipped town to run for President before his popularity might be tarnished by its cost. Oh, you can find more flattering biographies, even hagiographies, I'm sure... But from what I saw of the man running for President, I can't see how they're deserved. Oh, I know, his defenders say he never got a chance to "introduce himself", but... why are we still waiting for this mythic figure to step forward and fill the shoes of the doppleganger we have met?

Oh yeah, you do what they tell you to do,
You say what you say,
You try to be everything to everyone...

Not quite a year ago, when campaigning in Michigan, Mitt had this to say:

“If we are going to be the world’s greatest economic power, we must invest in our future. It’s time to be bold.” He continued, “First, I will make a five-fold increase – from $4 billion dollars to $20 billion dollars – in our national investment in energy research, fuel technology, materials science, and automotive technology.”

He said Washington has to invest in Michigan and not just bemoan the high unemployment rate and failing economy:

“Look how industries in other states have thrived from the spin out of technologies from our investment in these areas. So if we can invest in health care, in defense, and in space, why not also invest in energy and fuel technology here in Michigan?”

In a veiled attack on his rival here, he said that Washington is pessimistic about jobs coming back to Michigan, something John McCain has said previously, but has backed away from in the days before the primary:

“Washington politicians look at Michigan and see a rust belt. But the real rust is in Washington.” The former Massachusetts governor continued, “The pessimist will point to an empty factory and a laid off worker and say they have no future. Instead, I see a vital infrastructure, a skilled workforce, and an innovative spirit all worthy of an optimistic vision and deserving of a leader who will work tirelessly to deliver the power and potential of Michigan and the American people.”

In addition to offering to throw as much as $20 billion at the auto industry, Romney took a decidedly anti-environmentalist, anti-conservationist stance, but seemed to stand squarely behind the CEO's of the Big Three with no doubt about their ability to lead the transformation of the auto industry:

He criticized Mr. McCain for backing a bill that would have pushed to cap and trade greenhouse gas emissions, which Mr. Romney called a "job killer." And he promised to bring representatives from the automotive industry, unions, Congress, and the state of Michigan together in his first 100 to come up with a plan to "rebuild America's automotive leadership."

He unabashedly courted the union vote:

"I'm committed to fighting for every good job in this country and Michigan and across the country, and that connection I have to the state is just enough to help bring people who are normally thinking to vote toward the Democratic side to vote for me," he said.

When John McCain offered some genuine straight talk, that there had been a significant loss of manufacturing jobs in Michigan and "some of those jobs aren't coming back", Romney jumped down his throat:

Mr. Romney seized on Mr. McCain's "straight talk" as an example of Washington's pessimism and indifference to Detroit.
"A lot of Washington politicians are aware of Michigan's pain, but they haven't done anything about it," Mr. Romney said. "There are some people who don't think there's a future for the domestic automobile industry. They think the industry and its jobs are gone forever. They are wrong."

But remember, that wasn't the real Mitt Romney - we hadn't been introduced to him at that point.

You know all the right people,
You play all the right games,
You always try to be everything to everyone...

Now, unbelievably, it appears that Mitt Romney is trying to position himself as the heir to the Republican Party. This puts him in a rarefied league presently otherwise composed of Sarah Palin and, yes, Newt Gingrich. So what does Mr. Appeaser do when confronted with a crisis in the auto industry, and finds the leadership of his party suggesting that good manufacturing jobs are gone forever, don't have any concern for Michigan's pain, and have even less desire to do something about it? People he says are "wrong"? Did he hold true to his promise to bring the auto executives together to forge a new path for the industry? You guessed it - he's arguing that we should Let Detroit Go Bankrupt....

First, their huge disadvantage in costs relative to foreign brands must be eliminated. That means new labor agreements to align pay and benefits to match those of workers at competitors like BMW, Honda, Nissan and Toyota. Furthermore, retiree benefits must be reduced so that the total burden per auto for domestic makers is not higher than that of foreign producers.

* * *

Second, management as is must go. New faces should be recruited from unrelated industries — from companies widely respected for excellence in marketing, innovation, creativity and labor relations.

Break the union and fire the management teams for the Big Three? He's not making a policy statement - he's pandering to a faction of the Republican Party that sees little value in maintaining an American industrial base, and sees union busting as a leading civic virtue. As Motor Trend puts it,

"The financial straits that the Big Three find themselves in is not the product of our current economic downturn," harrumphed Senator Richard Shelby, senior Republican on the Banking Committee in a written statement, "but instead is the legacy of its manufacturing and labor force."

Well, yes, GM and Ford Motor Company haven't posted profits for years. And Chrysler, shielded first by Daimler and now Cerberus, is in worse shape. Cerberus has finally dropped the ruse that it's in the car business for the long-term.

Most of us would love just a portion of the UAW's health care benefits. But Shelby is typical of so many of our leaders who don't care about manufacturing, let alone automobile manufacturing. He's senior Republican of the Senate Banking Committee, after all.

Please excuse the following redundancy, but I can't emphasize it enough: making cars and trucks takes loads of time and money.

If you work for, or with, the banking or finance industries, you might someday come to realize this (as Cerberus has), but you won't like it. Wall Street, and much of Capitol Hill, likes "industry" to make "financial products," computer software and websites, things that can be made out of thin air or by college grads who don't ask for health benefits. Ask New York Times Pulitzer winner Thomas Friedman, who apparently believes Steve Jobs could have a Chevy iCar on the road in a year if the Apple chief took over GM.

We knew all along that Mitt was most at home in the banking and finance industries; he's apparently now out to prove that, with all of his claims of inherited wisdom about autos, he's not just another anti-manufacturing, anti-union Republican, he's ready to be their leader.

I think you like to be their simple toy,
I think you like to be their clown....

As Motor Trend notes, even those most sympathetic to the auto industry are anticipating significant structural changes, plant closures and union concessions, in all likelihood including the resignation of GM's CEO.

But while many Republicans see the fall of Detroit as just reward for the UAW, Democrats in Congress are ready to impose sacrifice on the UAW as well as automakers, in exchange for loan guarantees. Congressman [Elijah] Cummings [(D-MD)]... told MSNBC he supports bailing out GM, Ford and Chrysler, but that the automakers "may have to change union contracts."

The problem here isn't that Romney has pulled yet another of his flip-flops - his abdications of everything he once supposedly stood for in the name of advancing himself politically. If you've watched Romney at all, you know that the man (again, doppleganger Romney, as we haven't yet met the real one) will say and do anything to advance himself, even if it means repudiating what he professed only minutes before to be his deepest and most heart-felt beliefs. The problem isn't that he's calling for serious reforms by the beneficiaries of federal aid before it's granted (not that he's in favor of granting it... today). It's not that he's stupid. Perhaps it's the opposite. The man has an above-average mind, yet he spews nonsense that betrays either that he's fundamentally ignorant of his area of supposed expertise, or that he's lying.

Let's take a look at his two main criticisms of the auto industry. First, they're supposedly being broken by labor costs, and apparently nothing has been done to address this problem:

First, their huge disadvantage in costs relative to foreign brands must be eliminated. That means new labor agreements to align pay and benefits to match those of workers at competitors like BMW, Honda, Nissan and Toyota. Furthermore, retiree benefits must be reduced so that the total burden per auto for domestic makers is not higher than that of foreign producers.

Oh, you mean like, to a substantial degree, what they've already done? If I assumed Romney to be an idiot, his ignorance might be excusable, but he's not an idiot. Also, just because the process of shifting responsibility for retiree benefits and pensions from the Big Three onto the unions isn't yet complete doesn't mean it's not well underway. Does he truly not know this, or is he lying?

That extra burden is estimated to be more than $2,000 per car. Think what that means: Ford, for example, needs to cut $2,000 worth of features and quality out of its Taurus to compete with Toyota’s Avalon. Of course the Avalon feels like a better product — it has $2,000 more put into it. Considering this disadvantage, Detroit has done a remarkable job of designing and engineering its cars. But if this cost penalty persists, any bailout will only delay the inevitable.

This man has been in business? Truly? If we accept his figure, he believes that costs are fixed per vehicle, such that you should assign the same labor cost to a subcompact sedan as you would assign to a luxury SUV? With no consideration of actual cost or plant efficiency? He doesn't understand that the Big Three aren't building vehicles using $2,000 less in materials per car - they don't build cars for less, which is why on a per vehicle basis they lose money on those sales. As somebody who supposedly knows about business, if he truly believes that the Big Three are producing competitive products with better paid labor for $2,000 less per vehicle, why isn't he championing their management (like he used to) instead of calling for a decapitation?

Second, management as is must go. New faces should be recruited from unrelated industries - from companies widely respected for excellence in marketing, innovation, creativity and labor relations.

That's great idea! Ford should bring in a CEO from a company like Boeing! Oh... They did that? Then Chrysler should get taken over by a covey of Romney-style corporate raiders who can take it private, clean house and... Oh... They did that? Beyond that, did Romney fail to notice, growing up, that his Daddy rose to be CEO of AMC by virtue of his years of experience within the auto industry? Is his present contempt for industry experience, if not feigned, some sort of Oedipal thing? Really, assuming that it's dead wrong to use executives who are experienced with an industry to run or revive that industry, whence Romney's "magic men" from the outside who will achieve a 21st century transformation? According to Romney, after all, Cerberus couldn't find one, and their financial wizards are paying tens of millions in bonuses to hang on to the "failed" team they have in place.

The new management must work with labor leaders to see that the enmity between labor and management comes to an end. This division is a holdover from the early years of the last century, when unions brought workers job security and better wages and benefits. But as Walter Reuther, the former head of the United Automobile Workers, said to my father, “Getting more and more pay for less and less work is a dead-end street.”

Wait a minute... so forty or fifty years ago his father, either on his way to being or already installed as CEO of AMC, discussed these crucial issues with the head of the UAW, the UAW guy described them as being on an unsustainable path and... daddy squandered the opportunity? Seriously, what am I supposed to make of this anecdote?

I love this part, not because it's not a valid point, but because it's industry-specific:

Get rid of the planes, the executive dining rooms - all the symbols that breed resentment among the hundreds of thousands who will also be sacrificing to keep the companies afloat.

Where's Romney's similar call for sacrifice by the financial industry? No more executive dining rooms, corporate jets and the like, until the economy's back on track? There's unquestionably a culture of overcompensation among this nation's executive class, but it's silly to use the issue to attack the auto industry or to pretend that it is somehow unique. Assuming that it truly has ended its post-collapse luxury junkets, has AIG shuttered its executive dining room and grounded its corporate jets? Where's Romney's lament? Scheduling conflicts excluded, has Mitt himself ever declined a ride on a corporate jet or a free dinner in an executive dining room?

As a practical matter, the "fixes" Romney proposes can't go through unless the Big Three go through bankruptcy or something like it. And (assuming he doesn't flip-flop again tomorrow, or hasn't flip-flopped while I was writing this), if we don't put form over substance, I'm on the same page as him in terms of their being a need for some serious changes. But Romney's eager pandering to anti-union factions of the Republican Party, in breach of both word and supposed bond with the state he sort of claims as his own, is pretty revolting. I'm not willing to pretend that his flip-flops and misrepresentations are anything but posturing and positioning, in the hope of advancing himself politically - even if it harms the country.

"You Give Me... Money?"

Many years ago when I was in Paris, a young man approached me. He launched into an extensive narrative, in rapid-fire French. When he finished, I indicated to him in my very limited French that I didn't understand him. He paused for a moment then, you guessed it, asked, "You Give Me... Money?"

Some things just don't sound as good in translation.

Executives from the Big Three and the President of the UAW testified before the Senate today. The short version seems to be, "You give us money, and everything will work out." There seems to be a general unwillingness to even admit to some of the structural problems that will continue to cause problems with profitability and complicate the streamlining of their businesses. They were able to identify a lot of problems that could or would result from Chapter 11 bankruptcy, but skipped over the benefits of that process (or a "bankruptcy lite" conducted under the auspices of federal bailout legislation). And while I don't want to understate the amount of progress the Big Three have made in recent years, to overcome years of poor management decisions and business planning, I am left with the question of, "What happens if the economy doesn't pick up (big time) before the money runs out?" And the answer seems to be, a call for bailout, round two.

"Vous me donnez... l'argent?"

I don't want to dwell on the negative, and maybe (as Annie says) the sun will come out tomorrow, but I would have liked to have heard some more candid statements about the state of the industry and those factors that are unlikely to improve without some form of bankruptcy or "bankruptcy lite". Admittedly, it would be very difficult for these executives to discuss those issues in public. How could you discuss the need to eliminate brands or close hundreds of dealerships without creating anger and fear among your dealers, or making customers wary of any brand you mention is on the chopping block (or all of your brands if you are circumspect)?

Yet dealerships aren't going to close without a very expensive buyout and inevitable litigation (as happened with Oldsmobile), unless the closure is part of a bankruptcy process or a federal bill that preempts state laws on manufacturer-dealer relations. How do you admit that a huge factor in your not wanting your company to go through bankruptcy is that the people you work for - be they the shareholders or a private equity fund - and both you and the people you work with (who hold a lot of stock options, and probably also a whole lot of stock), really fear being wiped out? Chrysler CEO Robert Nardelli is apparently willing to work for $1/year, but tell me that will hold true if his equity stake is wiped out.

And tell me it's not about the share values and equity stakes when you have Cerberus "generously" offering to give up its profit in a future sale of Chrysler if it gets bailed out. Here's an idea - go to a Chrysler dealer, buy a car, drive it around the block, then ask them to loan you almost the entire value of the car on the promise that if you later sell it you'll waive your profit. Seriously - they paid $7.4 billion for Chrysler, and now they propose borrowing $7 billion.

My answer to Cerberus, really, is "I would be happier if you paid off your loan and still made a profit". Why? Because that would mean they turned the business around. I understand not wanting to tell your investors, "We lost your entire investment inside of two years," but the bailout should be about helping these companies succeed in the long-term, not just to let them scrabble through a year until they can find a way to dump their stake somewhere near break-even.

This is really tough - I'm not trying to kill off the UAW, and I care about the U.S. economy and industrial base, so I'm not among those who are happy to dig the Big Three a grave. But if we're putting this much (and probably more) taxpayer money on the line, I think we deserve something better than the status quo and the promise, "Even though we haven't changed our business models as a consequence of this unexpected crisis, what we're already doing is working. Trust us." And I suspect that the Big Three need a dose of tough love, something that both enables and compels their making serious structural reforms if they want billions of federal dollars, even if it causes their owners and shareholders to lose some equity, or the unfortunate closure of some plants and dealerships.