Wednesday, October 13, 2004

The Real Bush

October 13, 2004 home

The Real Bush
Issue of 2004-10-18Posted 2004-10-11
This week in the magazine and here online (see Fact), in “Remember the Alamo,” Nicholas Lemann writes about how George W. Bush has pursued a surprisingly radical agenda as President. Here Lemann talks with The New Yorker’s Amy Davidson about Bush’s skills as a politician, his plans for Iraq, and what he might do if reëlected this fall.
AMY DAVIDSON: Your piece in this week’s magazine includes something of a mea culpa—you say that a conclusion you drew about Bush when you wrote about him in 2000 was very wrong. What was that conclusion, and where did you go astray?
NICHOLAS LEMANN: My conclusion last time around was that Bush wanted to be President but did not have a big agenda. I thought of it as a Bush restoration, and that, in Bush’s mind, merely removing the awfulness of Clinton and Gore from the White House would be a major achievement. But I underestimated—and Bush underplayed—the magnitude of his ambition to change government policy.
Was there a bait and switch, or was Bush always up front about what he wanted—whether or not those who were listening to him believed it?
Bush has a politician’s gift for saying things that some people hear one way and other people hear another way. Most of what he has done as President he did say he would do. In the course of a long campaign, a candidate says so much that attention naturally goes mostly to the main slogans. In Bush’s case, these sounded moderate and modest—or, at least, they sounded that way to people who were inclined to hear them that way. I didn’t fully understand until after the election how much Bush had already tilted to the conservative wing of the Republican Party.
The title of your piece is “Remember the Alamo.” What should we remember about the Alamo when thinking about this President?
Texas was, for a short time, an independent republic, and its founding myths are quite different from those of the country’s as a whole. In the Texas story, there’s rather less of a bunch of intellectuals sitting around arguing over the drafting of philosophical documents, and rather more of martial valor on the battlefield.
We hear a lot about the importance of loyalty in this Administration. But is this unusual? Don’t all Presidents demand loyalty from their staffs?
All Presidents want loyalty, but Bush is better than most at getting it. That’s partly because people sense that disloyalty will be punished more severely than it usually is, and partly because Bush insists that his closest advisers give him total devotion. All of the top people on Bush’s campaign team work only for Bush—and this is not true of the top people on Kerry’s campaign team. Bush made Karl Rove sell his consulting business back in the early days of the 2000 Presidential campaign. Mark McKinnon, the media and advertising guy for Bush, and Matthew Dowd, the “chief strategist,” are former Democrats who are Bush people, not established Republican consultants; McKinnon’s company, Maverick Media, works only for Bush. Karen Hughes works only for Bush. And so on.
How does a President who, as you write, was raised in the very epicenter of the American élite manage to come across as anti-élitist?
It all depends on how you define élite, as another President might say. This country doesn’t have one élite, it has competing élites, and the élite that one finds around universities, media companies, foundations, and such institutions is the one that Bush is against. Conversely, that élite wouldn’t have picked Bush as its leader.
When do you think that President Bush decided to go to war in Iraq? And why?
Nobody knows exactly when Bush decided on war with Iraq, or why, and we may not know for sure for many years. Right now it’s a “Rashomon” story—although hardly anybody seems to believe that Bush decided only after the United Nations inspection process. My own favorite theory had been that Bush invaded Iraq because he believed that it was the best way to begin an enormous project of remaking the politics of the Middle East, on the scale of America’s project in Western Europe in the second half of the twentieth century.
In your article, you write that the President’s Iraq policy was formed in a realm of statecraft that was “a natural outgrowth of who he is.” What do you mean by that?
This is not an Administration that has a lot of secret plans. The plan in Iraq seems to be to try to take back the areas of the country held by insurgents, which will be a violent process, to the extent that elections are possible in January. I would assume that after the election the process will become more forceful. Whether meaningful elections can be held on schedule, and whether they can result in a political regime that can control Iraq, is not at all clear. I don’t know what this Administration would do if confronted with a choice between keeping a big armed force there and withdrawing, if that would seem to mean that Iraq would become a “failed state.”
In the Vice-Presidential debate, Dick Cheney complained that the Administration had “not been able to do what the President did in Texas, for example, when he was able to reach across the aisle and bring Democrats along.” Did something change on the way from Austin to D.C.?
In Texas, you don’t have to reach as far across the aisle, because Democrats are much more conservative there than they are nationally. Also, Bush had a stronger incentive to reach out, because his reputation for bipartisanship was a big selling point in his first Presidential campaign. He has not done the kind of reaching out in Washington that he did in Texas.
What can we expect if Bush is reëlected?
If Bush is reëlected, I think that he will move forcefully to reduce taxes further, and to change Social Security and Medicare fundamentally through the introduction of private accounts, as an alternative to a straightforward government-guaranteed pension and health-care system. These changes, if Bush can get them, will substantially reduce the role of the federal government in American life. Foreign affairs is harder to predict, because of the difficulty of figuring out whether Bush has been genuinely chastened by his failure in Iraq. If he hasn’t, he may aggressively seek regime change in more Middle Eastern nations.

Christian Parenti in Afghanistan: Saturday's Elections Were A "Farce"

We go to Afghanistan to speak with The Nation's correspondent covering Saturday's election where all 15 of incumbent Hamid Karzai's opponents announced they were boycotting the election because of voting problems. [includes rush transcript]
Ballots from Afghanistan's first direct presidential election poured into collection centers across the country today.
Several opponents of President Hamid Karzai, including his chief rival Yunis Qanui, have abandoned their boycott of the poll over allegations of fraud, and irregularities.
On Saturday, 15 of Karzai's challengers announced a boycott, saying a system to prevent multiple voting had failed. The indelible ink used to mark voters” fingers after casting their ballots could easily be wiped out in some cases, meaning that illegal multiple voting was possible.
The Afghan-U.N. Joint Electoral Management Body gave candidates until the end of the day Monday to lodge complaints formally, and is setting up a panel to investigate.
The full official count of the vote is likely to take about three weeks, but an exit poll conducted by the Washington-based International Republican Institute, a GOP-associated think tank, showed U.S.-backed President Karzai heading for a landslide win. U.S. Ambassador Zalmay Khalilzad has been an influential behind-the-scenes dealmaker on Karzai”s behalf.
Christian Parenti, correspondent for the Nation Magazine and author of the forthcoming book The Freedom: Shadows and Hallucinations in Occupied Iraq. He joins us on the phone from Mazar-i-Sharif.

Nobel laureate calls for steeper tax cuts in US

Can't believe this BS

Nobel laureate calls for steeper tax cuts in US
Mon Oct 11, 5:21 PM ET
WASHINGTON (AFP) - Edward Prescott, who picked up the Nobel Prize for Economics, said President George W. Bush (news - web sites)'s tax rate cuts were "pretty small" and should have been bigger.
AFP/Royal Swedish Academy of Science-HO/File Photo

"What Bush has done has been not very big, it's pretty small," Prescott told CNBC financial news television.
"Tax rates were not cut enough," he said.
Lower tax rates provided an incentive to work, Prescott said.
Prescott and Norwegian Finn Kydland won the 2004 Nobel Economics Prize for research into the forces behind business cycles.
The American analyst, who is a professor at Arizona State University and a researcher at the Federal Reserve (news - web sites) Bank of Minneapolis, said a large tax cut in 1986 had lowered rates while collecting the same revenue.
But "in the early '90s the economy was depressed by the tax increase in '93 by about four percent, and it's right at that level now," Prescott said.
Bush, who is fighting to get re-elected November 2, has cut taxes by about 1.7 trillion dollars during his term.
The US leader accuses his Democratic rival John Kerry (news - web sites) of favoring tax increases, despite Kerry's promise to cut taxes for everyone earning less than 200,000 dollars a year.

Uh Oh (Seymour Hersh)

October 12, 2004
Uh Oh
Seymour Hersh spoke at Berkeley last Friday, October 8th. He told a story about recently receiving a call from an American lieutenant in Iraq who'd just witnessed other American soldiers massacring Iraqis.
I typed up what he said from the Real Video file here. The story begins at about 41:45.
UPDATE: I'm told Hersh has said much the same at other events, including this October 1 appearance on the Diane Rehm Show. I haven't listened to it myself, however.
HERSH: I got a call last week from a soldier -- it's different now, a lot of communication, 800 numbers. He's an American officer and he was in a unit halfway between Baghdad and the Syrian border. It's a place where we claim we've done great work at cleaning out the insurgency. He was a platoon commander. First lieutenant, ROTC guy.
It was a call about this. He had been bivouacing outside of town with his platoon. It was near, it was an agricultural area, and there was a granary around. And the guys that owned the granary, the Iraqis that owned the granary... It was an area that the insurgency had some control, but it was very quiet, it was not Fallujah. It was a town that was off the mainstream. Not much violence there. And his guys, the guys that owned the granary, had hired, my guess is from his language, I wasn't explicit -- we're talking not more than three dozen, thirty or so guards. Any kind of work people were dying to do. So Iraqis were guarding the granary. His troops were bivouaced, they were stationed there, they got to know everybody...
They were a couple weeks together, they knew each other. So orders came down from the generals in Baghdad, we want to clear the village, like in Samarra. And as he told the story, another platoon from his company came and executed all the guards, as his people were screaming, stop. And he said they just shot them one by one. He went nuts, and his soldiers went nuts. And he's hysterical. He's totally hysterical. And he went to the captain. He was a lieutenant, he went to the company captain. And the company captain said, "No, you don't understand. That's a kill. We got thirty-six insurgents."
You read those stories where the Americans, we take a city, we had a combat, a hundred and fifteen insurgents are killed. You read those stories. It's shades of Vietnam again, folks, body counts...
You know what I told him? I said, fella, I said: you've complained to the captain. He knows you think they committed murder. Your troops know their fellow soldiers committed murder. Shut up. Just shut up. Get through your tour and just shut up. You're going to get a bullet in the back. You don't need that. And that's where we are with this war.

Terror-Fearing Sen. Shuts Office

Al CIA da is indeed a fearsome foe!

Terror-Fearing Sen. Shuts OfficeWASHINGTON, Oct. 12, 2004Sen. Mark Dayton said Tuesday he is closing his Washington office because of a classified intelligence report that made him fear for the safety of his staff. Dayton, D-Minn., said the office will be closed while Congress is in recess through Election Day, with his staff working out of his Minnesota office and in Senate space off Capitol Hill. "I take this step out of extreme, but necessary, precaution to protect the lives and safety of my Senate staff and my Minnesota constituents, who might otherwise be visiting my Senate office in the next three weeks," he said on a call with reporters. "I feel compelled to do so because I will not be here in Washington to share what I consider to be an unacceptably greater risk to their safety," he said. CBS News Correspondent Bob Orr reports that federal officials said they knew of no new, specific intelligence information that would have prompted Dayton to close his office. U.S. officials say they "know of no specific intelligence that al Qaeda is targeting Capitol Hill, Washington or any U.S. site, reports Orr. And there is no information that any attack is imminent. Intelligence analysts from the Terror Threat Integration Center did brief members of Congress recently. But, officials say the information shared was "very general in nature -- along the same lines of the threat reporting we've been talking about all summer," reports Orr. Brian Roehrkasse, a Homeland Security Department spokesman, said the department had no intelligence indicating al-Qaida intends to target any specific U.S. locations. Added Capitol police spokesman Michael Lauer: "There's been no specific threats against the Capitol complex. We continue to be on guard now, all the way up to the election and all the way through the inauguration." Dayton said he could not describe the contents of the top-secret intelligence report, which was presented to senators at a briefing two weeks ago. "None of us can predict the future," he said. "I hope and pray that the precautions I've taken will prove unnecessary." Asked what advise he would have for Minnesotans who want to travel to Washington over the next few weeks, Dayton said, "I wouldn't advise them to come to Capitol Hill. I would not bring my two sons to the capitol between now and the election." Dayton issued a written statement that complained of inaction by Senate Majority Leader Bill Frist, R-Tenn. "On three occasions, I have spoken personally with the majority leader and asked him to convene a meeting of all Senators to discuss this situation. I am dismayed, and perplexed, by his unwillingness to meet with us further about the information, which he initially brought to our attention. In the absence of that further discussion, I have made my own decision about my office, as is my responsibility," Dayton said. ©MMIV, CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.

FCC Commissioner Copps Criticizes Sinclair

Tue Oct 12 2004 13:39:02 ET


Commissioner Michael J. Copps reacted to reports that Sinclair Broadcast Group will preempt more than 60 local stations across the country to air an overtly political program in the days prior to the Presidential election.

Copps stated: “This is an abuse of the public trust. And it is proof positive of media consolidation run amok when one owner can use the public airwaves to blanket the country with its political ideology -- whether liberal or conservative. Some will undoubtedly question if this is appropriate stewardship of the public airwaves. This is the same corporation that refused to air Nightline’s reading of our war dead in Iraq. It is the same corporation that short-shrifts local communities and local jobs by distance-casting news and weather from hundreds of miles away. It is a sad fact that the explicit public interest protections we once had to ensure balance continue to be weakened by the Federal Communications Commission while it allows media conglomerates to get even bigger. Sinclair, and the FCC, are taking us down a dangerous road.”


A Federal Inflation Conspiracy?

Business Week Online
OCTOBER 12, 2004

By Amey Stone

A Federal Inflation Conspiracy?
Influential bond guru Bill Gross says the government is intentionally understating the CPI -- and what a howl that has raised
Pimco bond-fund manager Bill Gross has done it again. With his October investment outlook, titled "Haute Con Job," Gross has taken on the government's statisticians and Fed Chairman Alan Greenspan. He accuses them of purposefully underestimating inflation to make the economy look stronger than it is and keep Uncle Sam's costs artificially low.

In the two weeks since Gross's thesis appeared, critics have roared, government statisticians have laughed out loud, academics have expressed disbelief, and portfolio managers have scratched their heads. But everyone has read it. "It has been the talk of the market over the past couple of weeks," says Mike Englund, chief economist at research firm Action Economics and a frequent contributor to BusinessWeek Online.

Gross struck a nerve because he offers an explanation for what seems to be a growing point of confusion among the general public: Why are personal expenses rising so quickly when the government's consumer price index is rising at just 2% to 3% a year? The typical American household budget has seen major price hikes this year for health care, food, energy, and college tuition, points out Peter Cohan, a management consultant and author in Marlborough, Mass. "There is just no way the CPI is reflecting the actual increase in costs that the typical American family faces," he says. "It doesn't pass the smell test."

"RUNNING AMOK." Case in point: One restaurateur in Pennsylvania e-mailed BusinessWeek Online in response to a recent story citing tepid inflation statistics: "Being one who considers himself 'in the trenches,' what the heck is everyone (government, business publications) talking about inflation being kept in check? Talk to the folks down here to get the real deal. Inflation has been running amok for a year and a half."

According to Gross, the government is "fudging on inflation" by adjusting many of the prices that go into its calculation for improvements in quality (for example, a standard-issue corporate laptop computer has declined in price in the past five years, but it also has a lot more memory and capability overall). Gross also says the feds are adjusting for the fact that if the price of beef goes up, people eat more chicken. Therefore, it doesn't matter so much if a steak costs more. Economists call this phenomenon "substitution bias."

Due to these adjustments, Gross figures inflation is really about a percentage point higher and gross domestic product about a percentage point lower than official statistics. Such an error would have huge ramifications for government payouts due for Social Security or TIPS (inflation-protected bonds). It would also affect bond prices and interest rates. He calls the lower levels of official inflation "a con job foisted on an unwitting public by government officials."

OR IS IT OVERSTATED? For most economists and portfolio managers, however, Gross's arguments are pure heresy. David Kotok of Cumberland Advisors called the fund manager "unduly and extremely harsh," in an Oct. 1 e-mail to clients and leaped to the defense of government economists who "are highly skilled professionals who take their work very seriously" and "do not engage in governmental conspiratorial activities of the type Gross suggests."

Action Economics' Englund says academics have been studying this question for over a decade and have sophisticated research to back up the need for adjustments. "It is irrefutable that some adjustments have to be made for quality," he says, even if their size is open to healthy debate. Ironically, he says, much of the discussion before Gross's missive was that inflation is overstated and that the adjustments don't go far enough.

Right or wrong, Gross's argument has portfolio managers thinking, which could ultimately affect the market, even if the government doesn't change its methodology. Bob Sitko, lead portfolio manager for USAA Investment Management's private-account business, says one of his analysts brought the piece to his attention. "It's a tricky issue, and I don't feel equipped to adjudicate the issue [Gross is] raising," he says, but he believes Gross and others who have voiced this concern may generate some response from the Fed.

WRATH, RIDICULE, AND CREDIT. And Sitko says the debate has spurred him to do some deeper thinking about the way productivity increases in Corporate America have contributed to low inflation. He worries now that business reluctance to spend on new technology could suppress productivity growth and lead to more inflation in the future than would otherwise occur.

While Gross has raised wrath and even ridicule, he deserves credit for addressing head-on a central economic paradox that many ordinary folks are wondering about. The truth about the inflation number is probably somewhere between his claims and those of his critics, but based on the reaction Gross is getting, he's clearly asking the right question.

Stone is a senior writer for BusinessWeek Online in New York

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