David Bruce Allen

Why Are We In Afghanistan?

Norman Mailer, in 1967, wrote "Why Are We in Vietnam?". The novel is about a businessman and his son who go bear hunting in Alaska. The father brings in a helicopter to get his bear, the son is disgusted, and announces that he is going off to be a soldier in Vietnam.

The novel is not about Vietnam, of course, but about why the United States engages in "stupid wars" (Obama's term in 2002 for the Iraq War). Mailer needed a whole novel to explain what he thought was the American psyche and habits from which the Vietnam War issued. I am not sure he was right, and in any case I don't have a few hundred pages to try to convince you that the war in Afghanistan is not necessarily a stupid war, but it is stupid strategy.

The Obama plan is not a game-changer; it's the same old failed strategy that is draining the United States of the resources needed to reconstruct a devasted country -- the United States -- and confirms to Muslims around the world that we are the enemy. If this weren't stupid enough, the United States continues to foot the bill for everyone else. As I have argued on numerous occasions, the Chinese, the Indians, and  Western Europe have much more at stake in Asia than the United States does. They all have large Muslim populations that the Taliban and Al-Qaeda would be delighted to stir up. Even Iran is worried. Of course, everyone prefers that the Americans die and go bankrupt helping them than their having to take care of the terrorists themelves.

So, "Why Are We In Afghanistan?" In a sentence: The leaders of the United States, including the President, believe that the United States is the leader of the free world and that it is America's mission to keep the world safe for democracy.

Whether President is right or wrong about America's mission does not matter.  Only a strong United States could take on such a mission, and right now the United States is clearly tired and badly need of rest and restoration. When we are healthy again, we can calmly reconsider our mission in the world, decide what we want, and then, and only then, formulate and implement an effective strategy.

Barack Obama's Basketball Jones

President Obama is taking heat for organizing a "boys only" basketball game at the White House. He called the hubbub silly, but the episode is being taken by some, including Obama supporters like NY Times columnist Maureen Dowd, as yet another sign of the boys fraternity feel of the White House, starting with the all-star economics team, headed up by Lawrence Summers, ex-President of Harvard, who got himself fired for pondering aloud the life circumstances of women and their failures in the academic world.

 

Last week, Summers was profiled in exquisitely boring detail in The New Yorker. The most staggeringly boring moments recount Summers childhood among economists and his posterior stumbling up the ladder of power that led to his becoming Obama's number one "economics man". The story is about as interesting as whether Obama goes better to his left or his right off the dribble, or whether he can knock down the 12 foot in-between jumper to keep the defense honest on penetrations, or whether his b-ball buddies put some body on him when he drives to the hoop. Of course, if he were smart he would pull up at the foul line instead of getting into the lane, and that if he did he would push off on his right leg and drift right to open space and give him balance to pop the left-handed jumper.

 

If you think this is stupid, remember that there are professional political analysts out there gleefully examining Obama's basketball playbook to decipher the b-ball coding of his left/right leanings and his skill (or failure) at occupying the vaunted political center. 

 

As if that sufficiently annoying, there are yet others asking whether the President's basketball stints and his preference for television series with real men in them like "Mad Men" and "Entourage" are just a ploy to put us off the trail of a man who really isn't a man's man after all but a priss who can't really take the fight to anyone, not Congress and not the Taliban.

 

 

Though all the metaphor and Presidential character analysis may be amusing for news junkies, it surely takes us nowhere. Predicting behavior is a tough game. As is figuring out how America got into the mess it's in. In its chronicles of the collapse of American society, The New Yorker has shown a hackneyed dependence on the childhood experience routine to explain why the bigshots who run the world are a pack of high-powered screw-ups.

 

They make it sound profound, but it's mostly sophmoric, inverse rationalization, what most of us just call bullshit, or what social scientists term "functionalism". Things turn out the way they turn out because they couldn't have turned out any other way ... given the facts. Any dumbdumb can tell you that the child may be father to the man. The problem is we don't know which man ... or woman ... and nobody else does either. 

 

A better approach would be for The New Yorker writers to follow, as Obama has, the weekly goings on of "Mad Men". If they watched religiously they would realize, as Don Draper/Dick Whitman has, that men have rather little idea why they turn out the way they do. Draper figures that if he is lucky enough to be smart, attractive, healty, rich, and nearly always get what he wants, he would do best to shut up, do his job, and find a way to get through the hard part of life -- i.e., managing to do one's duty as husband and father no matter who play around with -- and lock way the pain of being a real person into the desk drawer.

 

From the outside, Draper is the man's man; from the inside, he is a psychic pit. We know that because we get to see it. During three brilliant television seasons, we've watched Draper in his personal life act like he was at theme park trying out all the equipment and finding out that when the ride takes a loop he wants the throw up and get off.

 

When it comes to life and love, Draper does the Alfred J. Prufrock routine of decisions and revisions that a minute can reverse. Faced with nearly identical situations on two different days, he may very well respond quite differently. We may be a coward one day, a hero the next. He may kiss his child or spouse one day, scream at them the next. Tellingly, we have all suffered from this painful and embarrassing variabiity of energy and will. More importantly, it has little to do with our performance (or Obama's for that matter) at work. 

 

Of course, this facile explanation of human stupidity leaves quite a bit out. There must be some consistency to behavior. For though we are both hero and coward, day after day we work through problems and come to decisions that we believe to be rational. The smart ones among us do a pretty good job of coming to an honest and fair decision, though alas too often the man or woman in us just can't deliver. Unhappily, even the most disciplined, talented, intelligent athletes shoot  only around 50% from the field; and with the shot clock winding down, double-teamed, percentages plummet. That's what happened to Don Draper this week when Betty Draper came home early and confronted him about his life as a lie and he crumbled. He had the pretty young school-teacher outside waiting in the car and he just left her there to sweat it out. The coward.

 

Fortunately, at work there is little necessity to be either a hero and coward. Most of our time is spent with ordinary men and women doing trivial tasks, though fortunately we have the pleasure from time to time of being regaled by an occasional knave and an assortment of office ignoramuses and fools that Melville first depicted for us in "Bartleby the Scrivner".

 

Happily, when it comes to Presidents, I have yet to see a true fool. Obama’s predecessor, Mr. Bush, was not a fool, though he was tagged as such because it made it easier to explain his grievous errors.

 

He was a self-made ignoramus, however. Ignorance of the kind Mr. Bush suffered from is much too big to fix once you are President (or a vice-Presidential candidate like Ms. Sarah Palin). It is not a question of uncooth manners or a grating accent to be handed off for a Henry Higgins do-over, but a long-life commitment to managing what you don't know anything about. 

 

Mr. Bush's responses to America’s and the world’s problems were always circumscribed by his lack of knowledge. Not knowing the name of the President of Pakistan will neither make one a hero or a coward, but the combination of power and incorrigible ignorance made Mr. Bush a willing purveyor of bravado. Bravado is a calculated behavior -- unlike heroism and cowardice which emerge in response to immediate threats -- and for this reason one can be held culpable for it.

 

Mr. Bush's failure was accomplished via the combination of bravado, power, ignorance and acquiescence. Bravado is a characteristic of both the educated and uneducated. Power, on the other hand, is more often granted to those with the appropriate education. There are, nonetheless occasions where power and lack of necessary knowledge are wedded. Rare, however, is the case where power, lack of knowledge, and self-awareness of lack of knowledge are joined together as in President Bush. This unfortunate trifecta was the source of both Mr. Bush's bravado and his acquiescence to those whom apparently knew more than he and who themselves had sufficient bravado to impose their will. Hence, we saw Mr. Bush's bravado on the desks of an aircraft carrier and his acquiescence to Mr. Chaney and Mr. Rumsfeld who claimed to understand how to conduct war and how to torture and subvert freedoms legally. Colin Powell's measured responses did not stand a chance.

 

Both Bill Clinton and Hillary Clinton have Bush-like bravado but none of the acquiescence. This may be because they both also possess an overweening confidence in their impressive knowledge and training, a character trait President Obama seems not to suffer. He listens; he listens to aggressive foul-mouthed economists; he listens to mild-mannered though nonetheless arrogant investment bankers; and he listens to several women, among them one whose access is to an exclusive girl-and-boy club.

 

Which is why Barack Obama did not need to take Michelle Obama on his little golf outing on Sunday. It does not, however, explain, why he took Melody Barnes, his Chief Domestic Advisor, with him instead. (Might I add that golf is not a sport: There is no running, no contact, and no gym rat smell. Given that it is already a non-testosterone activity, no real difference results from inviting a woman.) He took her to quelch the noise about the boys club, but it didn't work. And it shouldn't. Nobody fell for the trick because, like Maureen Dowd, the smart girls know that the boys club is real.

 

Not all men are part of the boys club. Don Draper could give a rats ass about golf and basketball. The childhood experience explanation (acceptable in fictional narrative, particularly when the omniscient narrator actually knows what the child has suffered and at whose hands) says that he was too poor, too abused, too scared and too isolated to ever have that kind of confidence in other men. As a grown man, he found comfort in two things. Firstly, honest success: He is simply better than everyone else at his job. Secondly, dishonest marriage: He has a wife is simply prettier, more elegant, tougher, smarter, more honest, more loyal than the rest... which is, of course, more an incentive than a break on infidelity. After each affair, what he perforce goes back to is higher quality meat than what he has given up. Is it any wonder that audiences love Don Draper and hate Betty Draper?

 

Control, while possible and useful at work, is impossible in private life. Draper tried control. He tried something even trickier -- bundling up his libertine instincts in a mask of control -- but, as we all now know, this past Sunday, October 25th, Episode 11, Season 3, he got turned into a whus when Betty Draper, "his beautiful wife", outted him on his secret past. Poor bastard.

 

Obama, on the other hand, was smart enough to out himself on his past in his autobiographies. No matter that he left out anything that might be really interesting, he know how to manage his popularity with the female vote, which took his emotional venting to mean that he had outgrown slam dunk male lockerroom jive and was a serious man, a grown-up. 

 

This alone is enough to earn him some free-bie boys' space. After all, Michelle had given him the o.k., so how bad could it be?

 

Well, as we all know, Obama got nailed anyway. Like most men, like Freud (and probably me, too) he turned out to have no idea what women really want. To bad the episode in which Draper got nailed came after he had gone to play ball and gold. You see, Betty finally kicked Don's butt across the kitchen where all serious discussions and decisions take place in real (not work) life and where male bravado seems to melt invariably into acquiescence like swiss cheese in a three egg omelette. He was waiting for her to nail him. He wanted her to do it. And when it happened, he knew it was right, what had to be. It was awful.

 

Don Draper acted like he wanted to be held accountable for screwing up the big metaphysical struggle in which we are all, from time to time, turned into mush.

 

Work is physical not metaphysical. Work, including being President of the United States, is simple fare alongside the fate of being a man or a woman, a husband or a wife, a parent or a child. Work is easy. When Don Draper decides on an advertising campaign, when Barack Obama decides on going to war, the ideas, the risk, the pieces being moved approach tangibility. We plan, we decide, we implement, we measure.

 

But how, we ask, do we decide whether to play basketball on the weekend and with whom? And if you think the basketball question is pure cosmology, why don't we try to get Obama to explain away his passion for "Entourage"?

 

I know the problem from experience. Last week, I caught my soon-to-be 16 year old daughther watching my "Entourage" collection. (I have all 6 seasons.) My first reaction was to be furious and remonstrate that under no circumstance was I going to let my underage daughter be subjected to the most explicit, least apologetic, representation of women as silicone receptacles of sex in the history of television.

 

I screamed. My wife ran downstairs to find out what all the fuss was about. Embarrassed, I mumbled,

 

"Nothing. We're just talking."

 

My daughter looked at her mom with understanding and compassion. My spouse returned to doing something useful and I looked over at my daughter once again. I said in my most serious voice,

 

"You know, I shouldn't let you watch this crap."

 

And she said, calmly,

 

"I've seen worse stuff."

 

She looked puzzled for a moment, and asked,

 

"Are all boys like that?"

 

and I said,

 

"All of them except your father."

Roman Polanski: Facts, Desire, Choice, Responsibility

The Roman Polanski Case

Introduction

My admiration for John Dewey, pragmatist, and Ludwig von Wittgenstein, logician, rests on their absolute devotion to facts. Dewey, the pragmatist, worked back from ends; Wittgenstein, the logician-metaphysician, restricted himself to beginnings. They separated sense from nonsense, and exposed false propositions to open up space for truth and reason.

I consider myself a pragmatist, perhaps because I am not gifted enough for Wittgenstein's work. As William James astutely explained, all that pragmatism requires is the discipline to look at results of actions and be willing to step-by-step work through the intervening process. The focus is always on the facts. If my academic field, strategy, were to look for a home within philosophy, pragmatism would be its proper residence.

Now then to the Roman Polanski case, which, predictably, has become a media circus in which various interest groups have chosen to defend or criticize Mr. Polanski. The loudest voices would like us to believe that he is either a victim of life's circumstances and American injustice or he is filthy, sick pederast who should be put away forever. Each position depends on selecting a specific part of the story and spinning out a web of meaning that, in turn, rests primarily on their respective desire either to free or punish Mr. Polanski. These desires care neither for the facts of the case nor for the larger import of Mr. Polanski's actions.

In our examination of the case, we will first describe the disparate, mostly ill-conceived, reactions to Roman Polanski's arrest in Zurich September 26th. We then turn to the facts -- i.e., the legal case against Mr. Polanski in 1997. We set out, as well, the case against the American justice system. With this evidence in hand, we look at the plea bargain and the actual punishment that the accused received. Finally, we evaluate the choices made by Mr. Polanski, the extent of his responsibility for his actions and their impact on others. On this last point, Dewey is quite clear. Ethics and empirical inquiry go together. We judge behavior not based some abstract or a priori universal principle but on the effects of human conduct on others and on the future well-being of society.

The Arrest and Public Reaction

As we all know, Roman Polanski, a French citizen, was arrested in Zurich September 26th on a 32 year old U.S. warrant. Support for Polanski in France was instantaneous. The French minister of Culture and Communication, Frédéric Mitterrand, was adamant: "a film-maker of international dimension .... thrown to the lions for an old story which doesn't make much sense, imprisoned while traveling to an event that was intending to honor him: caught, in short, in a trap, is absolutely dreadful". Mitterand called Polanski "a wonderful man"; about America, he said, there is "a generous America that we love, and a certain America that frightens us. It's that America that has just shown its face." (http://www.time.com/time/world/article/0,8599,1926508,00.html)

French artists were also quick to support Polanski. Le Figaro lead with "Les artistes se mobilisent pour la libération de Polanski", reporting that famous director, actors, as key institutions such as the Cinémathèque Française, le Festival de Cannes, la Société des auteurs compositeurs dramatiques (SACD), l'ARP (Auteurs, réalisateurs et producteurs)  had signed a petition calling on the Swiss to free Polanski immediately.

In the United States, Variety reported that “The French entertainment industry org Societe des Auteurs et Compositeurs Dramatiques claimed that more than 100 filmmakers, writers and thesps -- including Martin Scorsese, Michael Mann, Darren Aronofsky, Wes Anderson, Jonathan Demme, Woody Allen, David Lynch, Pedro Almodovar, Wim Wenders, Tilda Swinton and Tom Tykwer -- had signed a petition demanding that Polanski be freed.”  (http://www.variety.com/article/VR1118009308.html?categoryid=3745&cs=1).

Following this initial outpouring of sympathy for Polanksi, responses have become more guarded. The Directors Guild of America, a key institution in the U.S., has refused comment, as have other U.S. institutions. And in France, public opinion has been negative.

In addition, among French filmmakers, one prominent voice has spoke out against Mr. Polanski is Luc Besson, who works frequently in the U.S. and is best-known for "The Fifth Element" and the blockbuster Transporter series and Arthur and the Invisibles. If these works were the sum total of Mr. Besson's accomplishments, he might be simply dismissed as pro-American. However, in the mid-80's, Mr. Besson was a highly-regarded "independent" "serious" writer-directo, winning Cesar Awards for "Subway" and "The Big Blue". Within the French film industry, Besson is both respected and disliked for his crossover success with French "art" films and American "mass market garbage". Besson commented:

“This is a man who I love a lot and know a little bit,” Mr. Besson said in a radio interview with RTL Soir. “Our daughters are good friends. But there is one justice, and that should be the same for everyone. I will let justice happen.” He added, “I don’t have any opinion on this, but I have a daughter, 13 years old. And if she was violated, nothing would be the same, even 30 years later.” (http://www.liberation.fr/culture/0101594034-luc-besson-la-justice-doit-etre-la-meme-pour-tour-lemonde) (http://www.nytimes.com/2009/09/30/movies/30polanski.html?hp)

Today, September 30th, four days into the crisis, the French media report that opinion on the case in France is divided. "The French intellectual elite" (not my term) support Polanski. French politicians divided between themselves with the left pro-Polanski and the right who want to go after "the pederast" (Le Pen's term, not mine). The French public, Le Figaro reports, is rather more anti than pro, stoked up by Le Pen and others of his ilk.

As is to be expected, among those with firm opinions on the case very few have actually read the legal document the case rests on. To this, we now go.

The Legal Case Against Mr. Polanski

The facts of the case (Case No: A334139, People of the State of California, Plantiff, vs. Roman Polanski, Defendant) as set out by the Los Angeles District Attorney's Office on January 6th, 2009, depict a premeditated rape of a 13 year old girl by the defendent, Roman Polanski, then 43.  You may read the case yourself. The Deputy District Attorney David Walgren's filing in response to Mr. Polanski's motion to dismiss on-line at http://docs.google.com/gview?a=v&q=cache:eLwiW0Zzv54J:hosted.ap.org/specials/interactives/_documents/0106polanski_motion.pdf+david+walgren+january+6+AP+motion+filed&hl=es&sig=AFQjCNEa_ldG3qY8gRPBttzClkFHB7DoBQ

Having read the case, I have little doubt that Mr. Polanski raped the victim, Samantha Greimer. Ms. Greimer, who has publically asked that the case against Mr. Polanski be dismissed, confirmed her testimony in a 2003 interview with ABC television. Mr. Polanksi has admitted that what he did was wrong, but has stuck to his story of consentual sex with a minor.

The Case Against the American Justice system

The handling of the case by the Los Angeles Police Department (L.A.P.D.) and the D.A.'s office appear to have been less than exemplary. The plea bargain between the D.A.'s office and Mr. Polanski's attorneys, recommended a 90-day psychiatric observation, after which time the defendant would be freed. However, following a 42-day psychaitric observation in Chino prison hospital, Polanski was released only to learn that Judge Lawrence Rittenband, in charge of sentencing, was planning to send Mr. Polanski to a prison term.

Not surprisingly, Mr. Polanski fled the United States. Mr. Polanski’s unpleasant experience with American justice was subject of, "Roman Polanski: Wanted and Desired", a HBO documentary aired in 2008.

During the three decades years that Mr. Polanski was a fugitive, the L.A. District Attorney's Office made several unsuccessful attempts to arrest him. Nonetheless, why they moved now in Zurich is unclear, though the D.A.'s Office insists that they would have acted earlier had there been the right opportunity and has provided a timeline of their efforts to detain Mr. Polanski.

In sum, it seems clear that Mr. Polanski was subject to capricious, and possibly unfair, treatment by the California criminal justice system. During these last 32 years, Mr. Polanski has sought to have the charges dismissed on several occasions.

Crime and Punishment

Mr. Polanski raped a 13 year old girl. He was never tried for that crime. Instead, via a plea bargain, he was convicted of having sex with a minor, and served 42 days in a prison psychiatric ward.

I have long opposed plea bargaining in criminal cases, as it institutionalizes dishonesty within the justice system. Like Mr. Polanski, men and women are asked to plead guilty for lesser crimes in exchange for not be charged for greater crimes; often the lesser crime is simply an invention. Without plea bargaing, Mr. Polanski would have been tried for rape and either convicted or declared innocent.

Plea bargaining became standard procedure in the U.S. during the high-crime 1960's. Considered a "necessary evil" in the U.S., plea bargaining is banned in many countries. Nonetheless, several European countries, among them France, have experimented with plea bargaining for the same reasons as U.S. -- relieve court overloading and battle organized crime. Justice, it turns out, is an expensive exercise in freedom.

And What About Mr. Polanski?

The arguments that have been made on Mr. Polanski's behalf mix the following elements:

1. 32 years have passed.

2. Mr. Polanski has suffered terribly (I will not recount the murder of Sharon Tate or Mr. Polanksi horrific childhood).

3. Judge Rittenband was using the Polanski case to make himself famous.

4. The entire case was marked by violations of due process, and there is no reason to believe that if Mr. Polanski returned to the U.S. that he would be treated fairly.

5. The victim has asked that the case be dismissed.

All these statements are true. Now we must answer the question of whether they are exculpatory.

Let us begin with the fifth reason. The charges against Mr. Polanski were brought by the "People of the State of California” not Ms. Geimer. We are, collectively, victims of any criminal act. Rape is a special and exceptional example of why this is so. Every time a girl or woman is raped, the freedom of every girl and every woman is aggrieved. Every time a girl or woman is raped, the freedom of men and women to interact without fear is diminished. The sexual act – private, intimate, vulnerable, glorious and sacred – is estranged from us and our collective humanity is thereby diminished as well. Ms.  Geimer’s continued distress merits our concern and sympathy; however, insuring that rapists are properly brought to trial, prosecuted and convicted is of greater weight.

The fourth reason – due process violations – is a serious issue. There is, however, legal recourse. This legal recourse must be effective. The complaint that the U.S. legal system does not guarantee due process is a serious charge that, too often, is true. It is also true that the French, Italian, German, British, etc. suffer from serious flaws in their due process. It is debatable whether the U.S. system is worse than others in the developed world. As I argued in my opposition to plea bargaining. Justice is expensive. In a free, open, and complex society, justice will always be expensive. We all need to pay up.

The third reason, Judge Rittenband’s motivations are part of the due process argument and do not require additional explanation.

Reasons one and two can be handled together.  Personal suffering is never a justification for causing harm to others. Having fled, Mr. Polanski is responsible for the time that has passed, not the California courts. Nonetheless, the elapsed time and who Mr. Polanski is today (suffering included) do affect what happens now. These questions, I would argue, are the province of the California courts and should be decided accordingly. My recommendation is that Mr. Polanski be extradited to California where the prosecution and the defense will present their respective arguments. This time, with the whole world watching, we expect due process to be awarded greater respect than it was last time.

Finally, the renewed suffering of Ms. Geimer and her family, as well as the pain felt by Mr. Polanski’s wife and their two children, are the responsibility of Mr. Polanski alone. Unlike the suffering inflicted on Mr. Polanski by the psychopathology of the Nazis and the Manson sect, the pain of the Geimer family and Mr. Polanski’s family are the product of Roman Polanski’s will, desires, and choices. The curious title of the 2008 documentary “Roman Polanski: Wanted and Desired” was meant to refer to his being “wanted” by the law in America, and “desired” as an artistic and cultural icon in France. The sad truth is that Mr. Polanski is wanted in America because of his own desires. As is true of all men and women, Mr. Polanski is a machine for producing desires, both good and bad. We choose. Mr. Polanski chose. He made the wrong choices.

In criticizing Mr. Polanski, Mr. Besson made a choice as well. No doubt, he understood that his statement would radically change his relationship to Polanski, and the relationship between their daughters. The French film community will see Mr. Besson differently, and there will, most likely, be events at which the two men coincide. Further choices will be made. Ethical maturity, Dewey argued, is the result of reflexity about the choices we have made. It is, perhaps, not just an bizarre coincidence that in Besson's 1994 film, The Professional, that when the 12 year old heroine, played by Natalie Portman, asks a much older man to be her first lover, he politely refuses.

V.P. Joseph Biden is right about Afghanistan

V.P. Joseph Biden wants to forget about the Taliban and go after Al-Queda, focusing on Pakistan.

This is the right strategy!

The Taliban are tribal, medieval, warlords whose principal interest is in holding on to what they have -- guns, drugs, and slaves. Al-Qaeda is an international terrorist organization run by a sophisticated, worldly man with a mission to eliminate decadent Western culture and "The International Jewish Conspiracy".

Biden's plan calls for letting the Taliban compete with other local yokels -- e.g. corrupt politicians like Karzai -- for control. They will kill each other, make bargains, and generally continue Afghanistan in its descent into medieval superstition and darkness. (No melodrama, here, just the facts. Read Aravind Adiga's "The White Tiger" for a proper definition of "the darkness.")

The V.P.'s plan, which calls for selective military and paramilitary action against Al-Qaeda targets in Afghanistan and, more importantly, Pakistan, may or may not work, but it has one certain, and several potential, benefits. The sure bet is that the U.S. will spend less in money and lives, and this can only be good for the U.S. after a decade of profilgate military spending and the general damage to the national character and culture that fighting wars and losing them begets.

The other potential benefits are a bit more complicated. If we go after just Al-Qaeda and leave the Taliban alone and they take over Afghanistan, this will create cosmic shifts in the balance of power in Asia. The Pakistanis will have to decide whether they want to accompany The Taliban in the darkness. They appear divided on the question and there is the possibility of civil war with atomic weapons in play.This would be awful, but my read is that as long as the U.S. and its half-hearted allies are fighting the Taliban, the risk of spreading the conflict is even greater.

Now to the fun part. The Taliban are Sunni, Iran is 90% Shi'a. The Iranians and the Taliban should be enemies. The strategist says maneuver the conflict so that the Iranians end up fighting the Taliban, not us.The Iraqis are mostly Shi'a as well. They may want to fight the Taliban as well. There is also the possibility that one day the Taliban are going to find Al-Qaeda an uncomfortable partner/neighbor. With luck, they may start killing each other.

Which brings us to India and China. They both have a great deal more at stake than the U.S. in fighting the Taliban. India is already active in Afghanistan, though this makes matters even more complicated with the Pakistanis. The China and India governments are both worried that the hundreds of millions of Muslims that live inside their borders are watching a fundamentalist movement that Asian governments have let prosper. Up to now, the Chinese and the Indians have had no qualms about watching Americans die in Asia. I say, let them the Asias deal with the Asian problem.

And so, Joe Biden is right for once: If we can't get out of Asia, at least we can make sure that we take aim at the bad guys who want to kill us.

Biden's solution, however, is not preferred, though impossible, option: An international, all-women's army prepared to fight and die, if necessary, to free the women of Afghanistan. Of course, this would just be the start. There are military operations necessary all over the world to free women from sexual slavery. Mexico, just south of the U.S. border, would be the right place to start. This is just my way of letting V.P Joseph Biden know that America's greatest challenge is just a few paces to the south. It's a problem we helped to create. It's also problem we can fix, if we want to.

P.D. Like many of you, I have read General McCrystal's brilliant strategic assessment of the war in Afghanistan. I was saddened, once again, that we know what the right strategy is, yet we are incapable of convincing our allies to back us (Germany and Italy are increasingly nervous about their involvement in Afghanistan). The cost is too great to go alone,and so we wobble, and end up in a half-way house of misery.

Women of the World Unite

Life, we all know, is a bazaar; we barter, we exchange. In politics, exchange can be excellent and fair, as when power is passed from one democratically elected government to another in an inaugural ceremony where the victors celebrate and the losers acclaim the just victor. Exchange can be marvellous and exalting, as when men and women freely exchange vows to love, honor and respect. Exchange can be sad and honest, when vows are freely undone and we face sadness alone.

Or exchange can be done Taliban style. The Taliban men exchange women. They are quite smart about how they do it. They have a complex cosmological system they call Shariah that explains all the W's -- who, what, when, where, how and for how much. The only W they don't explain is why. They say God designed the system for our benefit so who the hell are we to so much as ask.

For the most part, male Taliban are tribesmen who, like most human beings, enjoy puffing themselves up over what they own and can exchange. They have pretty much nothing, but they do have women. So they exchange women. It's a one time exchange model, which means the upmost care is required. Fortunately, since God designed the system, there is a wel-defined social system and cultural edifice that spells out the behavior of men and women up until the big day of the exchange and comes with complete instructions on the proper use of the acquired merchandise. It's all great fun for the guys who now will never want for someone they can tell what to do. For the girls, they can be secure knowing that they will never have to take a decision for themselves ever again. For a sociologist, it's a funcionalist's dream; unless you don't like the role you have been given because there is no way out. Funny thing about the arrangement is that the guys almost never complain, but the girls, sometimes the girls get weird ideas...

To be honest, the "developed" world wouldn't give a damn about the Taliban except that Bin Laden hung out with them and now the Taliban now run large parts of Afghanistan and are some 70 miles from Islamabad, the Pakistani capital. The Pakistani Army, nice guys, are not willing to die to stop the Taliban from imposing their version of the happy family. Some of them actually like the idea. 

This has the Obama Administration worried since Pakistani government has nuclear weapons to manage. The rest of the world ought to be worried too, but appparently they don't really believe the Taliban will conquer Islamabad and get the nuclear weapons; or maybe they don't believe the Taliban could read the instructions on how to use them.

For whatever reason, there just aren't enough governments willing to send their boys to die to save the Pakistani girls from the Taliban rules. In any case, they`re just girls. Girls who will become somebody's woman.

Women of the world, you can stop this. Women of the world you can unite and form an all-women armed forces to defeat the Taliban and wipe out Shariah rule. Us men, we cowards, we will fund you. We will write comic books about you. We will convert the Che Guervara t-shirt factories of the world to "Women of the World Unite" t-shirt factories. We will buy millions of coffee mugs with Michelle Obama flexing a bicep. There will be a concert in Central Park by famous women artists, and anonymous male musicians will volunteer to play back up. We will get rich while you die fighting the Taliban, fighting for freedom.

... Women of the world unite!

P.S. Book leave starts tomorrow.

Checking in with Obama; Checking Out

Over the past year, I have been setting out positions that are signficantly different from President Obama's. In this last post before I go on book leave, a brief summary and assessment are in order. Please keep in mind that I am an Obama supporter, delighted to have left behind the worst Administration in the history of the United States. To the issues.

1. I said no to giving money to the banks. I said "maybe" to buying the banks. I said do everything we can to say people's homes. Obama's team made less of mess than Bush's, but we could have done better. For example, they bungled corporate governance and the new board at AIG. Unhappily, a lot of this work is quite technical, and unpredictable. I am going to leave the Obama team to keep muddling through this one. It's an important problem, but far from our worst.

2. No bail out for Detroit. I did say, Yes, however, to funding efforts to create a new car company that builds cars people want and that protects the environment. High-profile firing of car company executives satisfies the mob, but it won't do very much. A big minus for the Obama Administration.

3. Get out of Iraq and Afghanistan. Obama's team, led by Clintonites and Bush holdovers, has gotten us deeper into Afghanistan, languishing in Iraq, and fumbling with prospect of Pakistan falling apart. Obama's strategy is to get or allies on board. Unfortunately, our allies jumped ship ages ago. From the beginning, my proposal was to get out and let the Chinese, the Indians and the Iranians, all of whom really have something to worry about in Asia, deal with the Taliban. Let them take the hit while we watch and monitor. As for Iran, in particular, Ahmadinejad is slowly preparing his own exit. He can not manage the Taliban, drug addiction and economic failure. Iran has educated women and achieved low-birth rates; Iran is far more modern than Ahmadinejad. Appealing to nationalist fervor won't work much longer.

4. Now to the war I'm worried about. The war began in Mexico and has spilled across the border. On the Mexican side, human decency is losing the battle against human and drug trafficking and politics by murder. The hopeful news is that the Mexican President is the good guy. Calderón may be the first real Latin American hero since Ché Guevara. (That comparison should make some people crazy.) Obama should spend whatever it takes and do whatever it takes to support Calderón. It won't be easy. As the war spreads to the U.S. side, Arizona has asked for helped and other states may soon follow. Obama will be pressured to herd up illegal immigrants,throw them out, and forget about the real problem. The U.S. cannot live with a failed state on its southern border. Unhappily, the U.S. has not had a coherent immigration, border or drug policy for a quarter-century. We desperately need them now. I am not sure the Obama Administration has any idea what to do. This is a human tragedy aching to become an international disaster.

5. I asked for a children's bill of rights. It all starts with education and health care for ALL kids. We are failing on both. Obama has a few nice programs, but there is no comprehensive strategy. Every study of the last 20 years starting with the famous 1983 "A Nation at Risk" report has the U.S. near the bottom of the pile in education with few prospects of improving. Local control and funding of educational standards no longer works, particularly as increasingly class-segregated housing patterns condemn the neediest children to the underfunded, crumbling facilities. No patchwork of well-intented programs can substitute for a real national program. On health care, none of the current proposals on the table (none yet seriously under review) will provide the comprehensive community-based health care children need.

If Obama can take care of these five tough problems, he will be my hero. That's not fair; he already is my hero. If Obama can take care of half of this, he will pass from hero to miracle worker.

*    *    *

As I am neither a hero nor a miracle worker, and as I have no influence on Obama Administration policy, there is no reason to be concerned about my taking leave from this blog until September to work on my long-delayed book on corporate social strategy. See you all in the fall.

Best regards,

David 

Barack Obama Meet Clint Eastwood

"Gran Torino" gives us Walt Kowalski, a sanitized version of Clint Eastwood's "Dirty Harry", the vigilante cop who frees the hippie-sogged, sexy streets of San Francisco from vermin (less politely called human scum) leaving the hippies free to do their dirty stuff -- and Harry Callahan free to get down and dirty, too. That's democracy, for you.

"Gran Torino" aims for higher truths than those of the groin and the guts. It's the wrong choice. In "Gran Torino", the Oscarized Clint Eastwood plays to his sensitive (insufferable) "Bridges of Madison County" persona, and we feel ripped off.

Let's face it, we should have never believed the adverts claiming that we were going to get the best of both Clints. We should hav been wary of the 90% of www.rottentomatos.com extolling Mr. Eastwood's development into a cinema auteur demi-god.

One should never forget that apotheosis is just one more step on the evolutionary road to boredom and B.S. But Eastwood is crafty, and like Woody Allen on the downhill, there's always reminders of a more glorious past. Your entire macho would have to be dead not to enjoy as Mr. Eastwood impishly pointing his finger at the enemy as if it were a gun. And then there's the high point of the entire movie, when Eastwood beats up a young bully three score years less than his four score years. There was so much macho macho juice on the screen that I forgot that Kowalski had been spitting up blood like a consumption victim in "Death in Venice".

Eastwood is as smart a filmmaker. He uses all that nifty foreplay to trick us into thinking that Walk Kowalski is going to give us a Hally Callahan catharsis made of pure adolescent male voyeurism ... But no! In the final act, Eastwood makes a last minute appeal for sainthood and he sends Kowalski down in a hail (shitstorm) of bullets. [I should be sorry to have ruined the ending for those who have yet to seen the flick... but I am not.]

This was more than some of my movie cronies could take. A rather mean-spirited, politically incorrect acquaintance of mine (certainly not a friend) insisted that it all makes sense because Harry Callahan is Irish and San Francisco is hot, white, and a paradise for straight males (all those women and so few real men), while Walt Kowalski is Polish and Detroit is cold, black, and a paradise for absolutely nothing except the depression of your choosing, be it psychological or financial.

A literary-minded acquaintance did a hermeneutic riff on this and stated that In our post-American, post-contemporary world in which national identity is dead and cities take on their own social structure and cultural identity sometimes known as neo-tribalism, San Francisco IS LOST IN TRANSLATION without the sex and Detroit IS TRANSFORMERS without the bateries..

This analysis was stupid, but it sounded good it at the time. Which is about the best I can say about "Gran Torino".

 "Gran Torino" is a simple, Frank Capra update about sacrifice and doing the right thing. Like Capra, and the Obama Administration, Eastwood offers his own impossible, "Mr. Smith Goes to Washington" blueprint for re-building America. In the best Hollywood-Washington tradition, "Gran Torino" wears its heart on its sleeve and asks us not us not that a movie make sense, but rather whether a movie can help us save do our duty to save our country.

"Gran Torino" is Clint Eastwood's plan to bail out Detroit. Following his wife's death, Walt Kowalski has nothing better to do than polish his Gran Torino and "bail out" the Hmong immigrant boy, Thao, who lives next store. Poor Thao. Not only does he get bossed around by his smart ass sister, he has no luck with the girls, and, to top it off, Thao is getting harrassed by a Hmong gang led by his bad, faux doppelgänger cousin who has given him an ultimatum: Join us, Momma's boy, or you're dead meat.

You see, the cops can't do anything about the gang because the gang has the neighborhood is terrorized and nobody will testify against them. So when gang forces Thao to try to steal Kowalski's Gran Torino, Thao can't say no. And to make a long story a bit less tedious, Kowalski will end up stepping in to save the "gouks" the "slopes", as he calls them, the same S.O.B.s he sliced and diced in Korea 50 years ago. He does it, we learn, because Thao's family has real family values, the one's Kowalski's own kids and grandchildren have lost.

For 90 odd minutes, Eastwood stacks up the events of America's decline until 80-year old Kowalski is all that is left between Thao getting his ass kicked forever, the end of America, anarchy and the demise of mankind.

It's a tough, convoluted sell. The whole, orchestrated point of "Gran Torino" is to get Walk Kowalski to the moment when he organizes his own death by gangland assassination in front of the entire hood so that there will be so many witnesses, this time, that the police can finally arrest the bad guys.

To make sure we get the point, Eastwood show us Kowalski riddled with bullets, the arrival en masse of the police, several takes of the handcuffed killers getting carted away, and we even hear the voice of authority intone, THIS TIME THERE ARE PEOPLE WHO WILL TESTIFY.

All of which means: for years the gangs have ruled the streets and only human sacrifice can put a stop to the violence and lawlessness. (By the way, just so we don't think Kowalski is a fool, we are led to believe earlier that he may be dying of an incurable disease and thus his act of heroism is more like euthanasia than suicde.)

Now that I have spoiled the plot of the movie for those of you who haven't seen it yet, let's turn to the slippery slope (Kowalski calls the Asians "slopes") of symbolism on which Gran Torino treads.

Setting: Detroit, working class neighborhood, Kowalski, disciplined craftsman who worked all his life in a car factory, now lives in a neighborhood "taken over" by immigrants, good and bad, who will either save the neighborhood or kill it. The "Gran Torino" is a Ford, Kowalski's baby. The Gran Torino, like the cars still built in Detroit, just sits there on the driveway, looking pretty, doing nothing. The Gran Torino is a plot device. The boy tries to steal it to impress his cousin, gets caught, his mother does the traditional thing, putting Thao at the service of Kowalski whom he has harmed, and Kowalski takes on the reformation of the boy, and in so doing, changes himself.

But if Kowalski can save his own soul, that does not mean for a minute that he can save the neighborhood, just as Obama has not chance of saving Detroit.

That's where the symbol of the The Gran Torino comes in. You can polish the damn thing until you are the Karate Kid, but the Gran Torino was always just a gas-guzzling hunk of metal, not even much good for stock car racing. It was third-rate even in its own class -- sometimes called "muscle car" -- because, it was supposed, you needed muscles not a brain to drive one. It was precisely one of the losers that Detroit turned out year after year. The lifetime of the Ford Torino, 1968-1976, dovetails with Vietnam (we got symbols upon symbols upon symbols in this movie), and with the successful incursion of Japanese cars into the U.S. market. It was the beginning of the end for Kowalski, Kowalski's neighborhood and American industry.

Ford phased out the Torino 1976, five years after the first DIrty Harry came out. It was now 1976. The VIetnam War had just ended, and the Hmong, whom the U.S. had recruited from Laos to fight on the losing side, were brutally persecuted and ended up seeking asylum in the U.S. This didn't go so well, at first, either, with entry restricted mostly to men who had fought with General Vang. The passage of the Refugee Act of 1980 permitted Hmong families to reunite. Eventually more than 270,000 emigrated to the United States.

In 1971, when "Dirty Harry" came out, Americans worried mostly about drugs and crime. We were flush, fighting the war in Vietnam was good for the economy. Besides only "expendibles" went to Vietnam -- blacks and poor whites. We didn't say poor blacks, back then, because black meant poor. I saw "Dirty Harry" in a theatre in Syracuse, New York. The audience was mostly Walt Kowalski types, but my age, and they howled every time Dirty Harry mowed down one of the dirty slime that were making our streets unsafe. The critics called the movie sick, fascist, but it was brilliant, honest, deplorable movie-making.

In 1976 the that last Torino came off the assembly line, Gerald Ford was President.and the sexual revolution was now part of popular culture. Now it wasn't just hippies and "Dirty Harry" having a good time. It was everyone. Though there were some rumblings about those Japanese cars taking over the market, no in Detroit was much worried about the car business -- except, apparently, Walt Kowalski. Only Walt knew that that the Gran Torino would sit in his driveway three decades later all dressed up with nowhere to go. That is, until Thao showed up and a needed a car to go out on a date. Only it wasn't that easy. For Thao to get any, Walt would have to get himself killed and leave the Gran Torino to Thao in his will so his stupid niece didn't get her hands on it and ruin it, the same way America had ruined her.

That's the story of "Gran Torino". Eastwood leaves us feeling good that Kowalski died in peace. You walk out the theatre thinking, "There's a real man. Those Hmong ain't so bad. Maybe there is hope for America."

But then you start thinking. There are more bad guys like that Hmong gang and now there's no Kowalski to fight against them. And poor Thao. He got stuck with the Gran Torino, living in a neighborhood where there's no work and no more Kowalskis to die so he can live in peace. No one expect Thao to become the next Kowalski, do they?

Suddenly, you don't feel so good. And starting thinking about Obama. Poor Obama. He's got to save Thao, the Gran Torino, the automobilie industry, Detroit, and the rest of America. And he's got to do without Kowalski. Maybe Clint Eastwood should have killed off the old guy so fast.

I posted a comment

I did it. I promised never to. I just posted a comment on Paul Krugman's column. It is simple and direct, a concession to newspaper readers who probably aren't interested in reading what I have to say and open Krugman's column to read Krugman (or on his blog) -- which is the reason, of course, why I don't post comments on other people's columns, much less a man who walks around with a Nobel Prize taped to his forehead.

And so in order to justify to myself what I have done and to avoid a punishment of 300 hours of community service, I am recycling the commment here in my blog. This will also save you from having to click through to Krugman's column, though of course you may want to know what a Nobel prize-winner had to say himself.

Dear Prof. Krugman,

Your analysis is right, but you don't provide solutions. Here goes.

The first step is to reinstitute the key previsions of Glass-Steagall separating investment banking from commercial and retail banking and to regulate (perhaps prohibit) the securitization of home mortgages.

Only through legal and regulatory restrictions will it be possible to reduce the destructive effects of an overblown financial services sector. Yet while regulatory reform can help fix some of the worst practices of the financial services industry, modifying self-destructive consumer behavior is much more difficult. You correctly cite the damage done by credit card debt. The extraordinarily high interest rates charged by banks on credit card debt is an institutionalized system of taxation on the unsophisticated. This noxious system is maintained by aggressive marketing that legitimizes self-destructive behavior.

What's the solution? The quickest way is to apply interest rate laws (usury laws) already on the books in most states in the United States. These rates are mostly between 5% - 15%; some states use a Federal Reserve rate plus scheme. Unfortunately, banks are permitted to sign private contracts setting higher interest rates.

If we take these measures, we can begin to reduce the size of the financial services industry in the economy, and we might even bring back the days when banks did banking and the real economy grew at reasonable, healthy clip.

No doubt, none of the measures I am suggesting will be taken.

David Bruce Allen

It's a dog's life

With my kids, I been singing a silly little ditty that goes,

O Obama ... now don't you cry for me ... Instead of 20 in the slammer, I got millions from AIG.

"Populist backlash." That's what they are calling it -- all those angry Americans venting and venting, in need of anger control therapy.

The problem has been around for a long time. Clint Eastwood did some venting in Dirty Harry (1971). Then there was Howard Beale in Network (1976). Remember Albert Finney and his huge, tortured face screaming at the cameraI don't want you to protest. I don't want you to riot. I don't want you to write to your Congressman, because I wouldn't know what to tell you to write. I don't know what to do about the depression and the inflation and the Russians and the crime in the street. All I know is that first, you've got to get mad. You've gotta say, "I'm a human being, goddammit! My life has value!"  So, I want you to get up now. I want all of you to get up out of your chairs. I want you to get up right now and go to the window, open it, and stick your head out and yell,

"I'm as mad as hell, and I'm not going to take this anymore!!"

30 plus years later, Americans are still mad, are lame protesters, and hardly ever get up out their chairs. Since the Vietnam War, one administration after another has flubbed the opportunity to use the great wealth of America to build a better and more just society. It feels awful to say, but the last President with the brains and gumption actually do something was that crafty puller of dogs' ears Lyndon Johnson. Nixon spent all his vulgar energy on foreign policy (the Democratic Party was on the list of foreign enemies), then along came Jimmy Carter who seemed like a nice guy but turned out to be clueness, which brought us Ronald Reagan.  Reagan ushered in three decades dedicated to building the economic pie. The pie got bigger and bigger, and as it did we got 50 million without health insurance, a third-rate education system that consigns the poor to ignorance, the largest prison population in the world, global warming, terrorisim, endless wars ... and a severe recession that melted the pie that paid for the loan that paid for the house that Jack built ... and lived in ... and went bankrupt in ...

No wonder those bitter folk in Pennsylvania cleave to their guns and their religion.

Obama promised to fix everything -- even the recession if we just gave him enough time. He got off to a pretty good start -- bye bye Guantánomo, a little house-cleaning at Justice, an improvised $115 billion education rescue, a Presidential order banning torture, D.O.D. contracting reform, Hillary Clinton sanitizing America's reputation. There's even a national service bill working its way through Congress, and promises of immigration reform. It all sounds good.

And yet the people are mad.

Yesterday, March 23rd, Geithner presented his new improved toxic asset buy back; two ex-Clinton policy wogs were appointed to top posts, Neal S. Wolin to be Mr. Geithner’s deputy Treasury secretary, and Lael Brainard to be under secretary for international affairs. The Dow Jones rebounded to 7,775.

And yet the people are mad.

But the Clinton clan is happy as a clam. They are proud of themselves. They work 15 hours a day to bravely provide the American people with liberal politics and liberal programs everyone can feel good about.

And yet the people are mad.

Don't get me wrong, the Clinton clan is smart and the programs are worthy. My problem is that their strategic objectives are restoring America to what it was before Bush and then strutting around Washington. That's not quite what we're looking for.

The purpose of Geithner's financial rescue package is to restore Wall Street to what it was, what Don DeLillo so incisively described in Cosmopolis. The Clinton clan who run the Obama Administration are happy ambling down the same short, windy, winding streets home to Robert Rubin, John Thain, Abe Greenburg, Edward Lilly and several thousand other Wall Street moguls and hedge fund whizzes whose extraordinary wealth is proof to them that the system works. Some are Republicans, a good many are Democrats; in either case, they pay for the election campaigns. Some, the Republicans, are social Darwinists; for them, the losers are simply losers, and the system doesn't make mistakes. The many are Democrats, willing and able to help those with less. They support liberal social polities; they give much to charity; they hold dinners to honor themselves and other like themselves who help make the world a better place.

For lots of us, the Republican litany is a bit hard to take. The Democrats at least profess to wanting to make sure all children have health care coverage, whatever the sins of their parents. The differences  between the two parties do matter. Even so, they share a big piece of our ideology: the rich know better and they decide policy.

They used to call it noblesse noblige.  We bless, you please. You spend, we squeeze. The trick is to pretend that we and you is the same. Get on message: WE, the rich, and WE, the people, are in this together.

Understand the social contract. We, the rich, make the rules that keep us rich, but we promise not to make we, the people, more miserable. On the liberal side of the Wall Street sidewalk the message has not changed since Merrill Lynch got bullish on America and Smith Barney stopped making money the old-fashioned way and between this takeover and that takeover ended up as a piece of Citibank where they helped melt the pie. The medium, the money, is always on message.

And I'm mad. I admit that the Clinton Democrats throw serious money at social ills, but they are not committed to addressing the fundamental problems of social structure and institutionalized legal corruption that have prevented us from fulfilling the promise of America.

I believe Obama truly wants to attack poverty, provide health care, fix education, but that won't happen as long as he is tied to the Clinton clan. It won't happen without campaign finance reform and Congressional reform, without assisting Mexico to remove the drug mafia from power (the Mexican border is our Afghanistan), without national prison reform, without education and health care reform that guarantees every child's right to achieve his or her potential. The obstacles to each are great. If Obama can't even keep his promise to campaign on public funds or to stop earmarks, it is hard to be optomistic.

No doubt, we will take small steps forward, we will work on education, energy, regulatory reform. It will be intense, bills will be passed and money spent and some good will be done. But little will change. It makes you want to sit Obama down with season 1 and 2 of The West Wing and explain to him how a bunch of very smart, well-intention (and also sexy) people can get nowhere. Is there any better description of the Clinton clan?

The Obama of these first two months is not what, we, the people, voted for.  We elected Obama, hoping against hope that he was sane, honest, independent, and would get us out of this mess. We voted for Obama because he was not John McCain. We voted for Obama and against an incompetent candidate running in the shadow of the worst President in the history of the United States. And we did not ask Obama to load up his administration with Clinton retreads and Wall Streeters, like Tim Geithner and Larry Summers. We simply don't trust those people. We threw them out of office eight years ago.

And still we want to believe in Obama.

At least I did, and then Jay Leno came along to take away from me the Obama I had invented in Iowa last year. Jay Leno took Obama on one of his famous Jay-walking tours during which he asks inane questions to ordinary men and women and getting seriously inane answers back. Obama's people had set it up perfectly. Leno asked about the feckless Wall Street monsters who had gotten us into the trouble, and Obama told us that the worst, most evil part of it was what that the crimes were "legal" and that it would take a long time to undo the damage. Obama told us that he, too, had been stunned by the AIG bonuses, that he, too, like us, was angry.

Jay, regular guy, was helping us to get to know Barack Obama, regular guy. Except, we did not vote for Barack Obama, regular guy. We had 16 years of regular guys, one a smart smart ass the other a not so smart smart ass. One peeking under skirts under desks, the other peeking under desks for missing WMD.  We voted for Obama because he wasn't part of that ugly White House. We voted for someone who could make a speech, loft up an ideal in his hands. We voted someone who did not need us to love or like him, but someone we can trust to do what needs being done and then take the heat.

That's not the Obama I saw on Jay Leno. As the interview wound down, Leno, as scripted, tried to help us to see the human side of our President . Leno asked about the yet to be acquired White House dog. Obama bantered. It was cute. Obama said the dog was a campaign promise. The audience laughed. The laugh was phony, desperate, false. It's awful learning things about the President we don't need to know. It's like those bad joke where the patient goes to psychiatrist and helps the psychiatrist with his problems. It was painful, awkward, un-Presidential. And then, suddenly, chatting about the dog, President Obama made his only useful policy statement of night. He said,

"You know, they say in Washington that if you want a friend, get a dog."

Maybe it's not too late. If that dog is smart enough ...

... And the people shouted "Death to AIG"

As small but angry crowds of Americans hit the streets in nearly 100 cities to protest against the $165 million in bonuses to AIG,it is the perfect moment to reaffirm why I have insisted that AIG should have entered bankruptcy months ago. Bankruptcy is the normal course of events when a firm can't pay its debts and its debtors "demand satisfaction". Instead, the government stepped in to prevent what we were told would be chaos in the financial markets.

Unfortunately, first the Bush Administration and now the Obama Administration have made a mess, leaving us with bankruptcy as the only option for AIG.

Businesses are supposed to die when they fail. That's how it works. Wisely, we have built the institution of bankruptycy to make failure as orderly as possible. Accordingly, we have bankruptcy law and bankruptcy courts. Bankruptcy is a complex institution that requires other institutions to function properly. We must have a regulatory system that prevents business firms from putting the entire economy at risk. This is the purpose of competitive policy -- the prohibiliton of monopolies, collusion, dumping, etc. Governments set the rules of the game. The current crisis and severe recession is a result of regulatory failure. When AIG went bust, we were told that the economic system was threatened, which eliminated bankruptcy as an option. Now, we, the people, own 80% of a company that is nothing more than financial market detritus.

Was the government right to rule out bankruptcy?

We all know that firms only should exist when they can make a profit, or, can be reorganized, often via bankruptcy. to make a profit. Eliminating insolvent firms is good for us. We create greater social welfare if inefficient firms are weeded out. The process is not painless. In normal economic conditions, we take care of employees who lose their jobs via unemployment insurance and a healthy job market. In a severe recession, additional measures are taken to assist the unemployed including extended benefits, re-training, increased government spending on infrastructure, etc. It's social democracy, and it works better than anything else we have come up with. (By the way, social democracy includes free health care for everyone under 18 and over 65 and guaranteed low-cost health care for everyone else. We are working on that.)

Returning to the issue at hand. In a financial crisis, which is preferable, intervention or bankruptcy?

The easy answer: it depends. The problem with intervention is that it is very difficult to get right. It is customary at this juncture in the discussion to point to Sweden. Sweden's intervention in the 1990s did not include saving banks where there was no value to be rescued. Instead the shareholders of dead banks were wiped out, the economic clock was turned back to zero, and the state took over. The employees kept working at their jobs. The liabilities and assets were taken over, but the banks died. The old owners were replaced by a new owner and a new firm was born. When those banks could turn a profit, the owner put them up for sale and pocketed the profit. Chapeau.

To be fair,the Swedish government did buy toxic assets from banks, and bad banks were set up to take on the bad assets. Yes, it was all a bit messy, as these things are. The big difference between the Swedish and American interventions was that Sweden acted to protect its citizens and the financial system rather than the bank and its shareholders, while in the U.S. we have acted to save the banks and their shareholders believing that this would save the financial system which would somehow save our citizens.

The Swedes were right. They would have killed AIG. AIG is worth nothing; the brand name is worth less than nothing. Foolishly, the U.S. government took 80% of nothing. With close to $200 billion sunk into AIG, as of today, March 21st 2009, the firm has a market capitalization of $3,4 billion. The $3.4 billion is a gift to AIG investors. And as the U.S. government continues to pump in money, these shareholders stand to profit from the investment of we, the people, in a "private" company whose managers, incidentally, haven't figured out yet that they work for a state-owned company. No wonder people are confused and angry.

Why did the U.S. government get this wrong? Our problem is that we can't fathom why a government would want to own a business. And so, Barack Obama insists on telling us that the government is not interested in owning banks, though since we did invest in AIG we have a right to "claw back" the $165 million in bonuses to the bad bad people who got us into this bad bad mess.

The really bad news is that we do own AIG, but since won't admit it, we can't even begin to figure out how to run it. The only solution is to let AIG go into bankruptcy where the sum total of its parts will mercifully be valued at nothing, and the company will effectively die. We can hope that when whatever new company (companies) emerge from the salvagable parts the new owners will be smart enough not to call it AIG.

The Obama Administration readily admits that the investment in AIG had nothing to do with the value of AIG assets, and all to do with trying to prevent AIG's diseased parts from infecting other parts of the financial system and the economy as a whole. Unfortunately, the government "investment" strategy in AIG was a failure from the start, as was the other "investments" in banks and toxic assets and the rest of the grabbag of measures. Unhappily, the financial system freezed up and we have the severest recession since the Depression.

From the beginning, there were only two legitimate choices AIG and the rest of dead banks. One, wipe out the shareholders and turn them and their horrifying balances into state-owned enterprises. Two, send them to bankruptcy court. The Barack Administration swore that bankruptcy would mean chaos. Afraid to take outright ownership, the Adminstration chose "investment". The goverment invested nearly $200 billion in AIG and then handed the hot potato over Mr. Liddy, and now an outraged citizenry is in the streets protesting.

Bankruptcy and chaos sounds like a pretty good deal.

AIG + ALM + SOL = $165 million x 1,000 = $165 billion + $5 billion + ....

You all, no doubt, know that AIG stands for American International Group. SOL, ignoble acronym, is the familiar "shit out of luck".

On the other hand, not many people know that ALM is Asset and Liability Management. ALM is old-fashioned bankers' work. You lend money (credits) and call them assets; you borrow money from customers (deposits) and call them liabilities. 

Here's the tricky part. Deposits, since the banks have the money, seem like they ought to be assets. But they are not. That`s because customers can come to teller window and ask for their money back. At the same time, assets can also be very annoying. The bank can call in loans whenever it wants because people pay home loans back on a schedule. This is asset and liability mismatch. Hence, the need for ALM. It is the banking business take on the old cash flow problem. Banks call it liquidity. 

AIG is not a bank, but an insurance company. But AIG was happy to help the banks get pesky assets of all kinds off the books by turning them into off-balance sheet finanacial instruments. They sold the financial instruments to thier clients, who sold them to other clients, who repackaged them and sold them back to AIG and so on. No one worried because the off-balance sheet financial instruments were backed by solid assets.

And so AIG made scads of money playing the ALM game for the banks and other companies and so did their sophisticated employees. AIG's employees realized that they could make ALM game as complicated as their imaginations and computer skills would allow. It was fun. They made bets about bets about bets ad nauseum. Ad infinitum.

AIG ad nauseum-ed ad infinitum until ad infinitum turmed into simple nausea. The assets that backed the paper that backed the paper that made AIG rich went bust and then we, the people, were told that if we did not pay for the mess, all hell would break loose. We did not know what that meant, but we got the living bejesus scared right out of us by Hank Paulsen and friends and we put up the money. And we hoped that the injection of coritsoned billions and more billions into AIG would do the trick and kill the pain of the damaged assets and AIG go away and leave us alone.  

No such luck (NSL). Our new President, Barack Obama, held a press conference yesterday for us to vent our righteous indignation right alongside him over $165 million in contractual bonuses to the same AIG geniuses (SOBs) who got us into the mess. Live on national television, President Obama, instructed ourTreasury Secretary, Tim Geithner, to leave no stone unturned in order to find a way  to stop the checks from going into the mail.

NSL. President Obama knows that we can't undo the contracts, and Secretary Geithner also knows that the $165 million is actually an investment in trying to get back some of the more than $165 billion we, the people, have invested (sunk) in AIG. Our stake in AIG is more than 1,000 times more than the bonuses.

If we stop the bonuses, the people who got us into this mess will have no incentive to help us get some of our money back. We could try moral suasion with them, but I suspect most them don't know that term. We could threaten to send them to Guantánomo, but Obama has promised to close it down. We could try to bar them from working for other companies where they could bet against AIG positions and cause us, the people, to lose even more money, but that is also illegal. We could draft them into the Armed Forces and send them to Ciudad Juarez. I have lots of evil ideas about what to do with these people, but none will get our money back for us.

What I would really want to do is go back in time and let AIG go bankrupt. Bankruptcy is what happens to companies that have more liabilities than assets on their balance sheets and not enough cash to pay the bills. It is what should have happened when the paper that AIG swapped (off the balance sheet) went AWOL. AIG you are SOL. 

Getting out of Afghanistan, Getting out of Iraq

I admit that I am gloating. Support for bailing out of Afghanistan is growing. Today, Lawrence Gelb in the New York Times made the same argument I made last year: 1) The Taliban and Muslim terrorism are a bigger threat to China, Russia, Iran and Pakistan then they are to the United States; 2) Our goal is to stop Muslim terrorism not save Iraq and Afghanistan; 3) We can't win in Afghanistan without losing at home. Of course, Mr. Gelb said this much more politely and professionally, including all the necessary historical and geo-political references, etc. and so on.

Mr. Gelb calls his approach "common sense". I don't much like common sense. I prefer strategy. To President Obama, his common sense and common decency tells him that Americans have a responsibility to the Iraqis and the Afghans now that we are involved in their lives. The strategist in me says, Oops we got this wrong, let's get out of her as fast as we can. (Out of politeness, the strategist does say he is sorry as he leaves.)

The apology is probably unnecessary. It turns out that the strategist's approach has two fundamental advantages. It works better, and it may even be morally superior. Psychologists agree. Rule number 1. Bad relationships make you crazy. In order think straight, you have to get out first. Once you are out, then you can think about how to fix the mess left behind. Rule number 2. You end up hurting yourself and others less when you close down bad relationships. It's the right thing to do. 

Unhappily, Obama remains trapped in our never-ending Iraqi guilt trip. He wants to "withdraw responsibly" from Iraq. The phrase sounds likes something teenager lovers say when it is already too late. I realize the joke is in bad taste, but that precisely why it is necessary. The consequences in Iraqi are shocking and in even worse taste. Every day American soldiers are fighting in Iraq means that more young American are wounded or killed unnecessarily.

We need to withdraw from Iraq now in an orderly fashion. Orderly is not the same as responsible. Orderly means that we announce that we have achieved our goals and we organize the logistics of withdrawal. I expect to be accused of cynicism and ignorance. I am happy to take the risk, and I accept part of the charge of ignorance. I have no idea what will happen in when we withdraw from Iraq, but I suspect that no one else does either.

Obama and the generals prefer to pretend that they have things under control. This means pulling out in stages, leaving a contingent behind to help the Iraqis, and so on. If it works, Obama can take the credit; if it doesn't work, Obama can say he did the right thing. In either case, Obama will feel good about himself, though this will be small consolation for wounded and dead Americans and their families.

On the other hand, if Obama does it my way and Iraq falls apart, he will be villified. He might even feel guilty. Of course, the American soldiers who went home won't complain, nor will the rest of Americans whose tax dollars may go to something useful for a change.

Ditto on Afghanistan. As I have said on numerous occasions, let the Iranians, Pakistanis and the Chinese fight the Taliban and Muslim terrorism. This a backyard problem for them, not for us.

Obama's voice

Greek myth gave us Caco, half man, half satyr, who vomited flames and smoke after swallowing and chewing up men. As humankind advanced, we sought to banish Caco, and invented cacophony, by which poets intentionally eat up consonants and breathe out harsh sounds. For example, "Dick Chaney takes kick backs from contractors."

The Bush administration invited Caco to the party with his old brutal deadly habits. Caco skilfully forged an unholy alliance with cacophony. Men, women and children were tortured and immolated and made the detritus of suicide bombers and collateral damage while the caophonists (e.g., Fox News, Rush Limbaugh) provided (and still provide) apology.

Fortunately, civilization has resurfaced in America. Our election of Obama was as much a rejection of Caco and cacophony as it was a celebration of Obama's mellifluous and inspirational idiom. Now that Obama is in office and Caco on the run, the next challenge is to restore rational behavior and dialogue. If the campaign trail, Obama gave us cadence and metaphor, soft consonants and soaring vowels, as President, Obama has taken on a plainer speaking style, the euphony expunged, as if by effacing voice and self we might hear once again the common sounds of men and women struggling to make a living, stay healthy, educate their children, care for the aged.

In this, our age of exhibitionism, Obama has wisely chosen to turn down the volume so that we might concentrate on the facts of our situation and reason together. This is far harder than he imagined. Obama wagered that the quieting of voices itself would change behavior. Perhaps, in a different age, he might have been proven right. But in our age of exhibitionism, the louder and more strident the voice, the more likely it is to be heard ... and rewarded.
 
The meritocracy Americans extol never existed. Institutions, custom, habit, inscribe our lives and the powerful have always been able to structure social and economic institutions to their advantage. Left to their de-regulated, meritocratic devices, we get not Plato's Republic but rather a sanctimonious, self-serving cacophonous defense of the status quo as the god-given order of things. This is a clear and present danger that requires our constant vigilance. We ought never to forget that our collective well-being has always depended on our ability to build and sustain institutions that encourage the moderation of those in power.

This the principal message of Gibbon's "Decline and Fall of the Roman Empire". Our better institutions  may tame Caco via a collective will to make a society that limits power in a civilized manner. Gibbon gave us three virtues that defined Rome: its principles of government, its universal spirit of toleration, and the commitment of the people to the nation. Today, we add a fourth virtue, a voice both powerful and soothing enough to suppress cacophony. We were warned by Orwell, Huxley and McLuhan: The voice itself sometimes is the message.

America, Europe, Spain: Do you want to get depressed?

Fortunately for Americans, the Presidential elections coincided with the country sinking into chaos. In crisis, Obama feels free to clean the Augean filth that clogs our institutions. He has started where the stench is worst, Guantánamo, closing down the military courts. He then signed an executive order to curb the worst lobbying abuses, and has set in motion military withdrawal from Iraq. The stimulus package is underway. The new budget is on the table. It's all messy and difficult, but at least headed in the right direction. Iraq and Afghanistan are headed in the wrong direction, but that for another day. Today is to talk about the economic mess in Europe, in particular Spain.

The Europeans are just starting to figure out that they may be in even worse shape than the United States. All the leaders of the big five -- France, U.K., Germany, Italy and Spain (where I live) -- remain in office though their countries confront severe recessions. Each head of state -- Sarkozy, Brown, Merkel, Berlusconi and Zapatero -- has opted for an expensive ramshackle patchwork of local programs that work against a coordinated EU response.

In Spain, where I live, President Rodríguez Zapatero has been reduced to begging Obama to help make the crisis as short and painless as possible. His Finance Minister, Pedro Solbes, announced that Spain was "out of options". In order to find good news, Spain has fixated on Obama's inauguration, Obama's first day in the White House, the First Family, and so on. When Rodríguez Zapatero came into office nearly 5 years ago, his first act was to fulfill his election promise of pulling Spain's troups out of Iraq. This was probably the last time he made most Spaniards happy.

Spain's economic situation far worse than in the U.S. Unemployment is expected to reach 18%-20% in 2010. The government's big plan includes 8,200 million Euros for municipal governmentsto spend on small "necessary" projects to create jobs, few of which are likely to last more than a few months. Much of Spain's basic government services, e.g., health care, have been devolved to the 16 autonomous regions, each specialize in inventing rules, procedures and IT systems that are incompatible with the others. The Autonomous Regions  spend and spend and spend and then complain that they are not getting their fair share of the pie from the national government, which promptly promises to recalculate allocation of funds in the manner most beneficial to that particular region.
 
It would also unfair of me to lash out at my adopted home's President without offering a few ideas for helping Spain get through the bad times.

1. Raise gasoline taxes and spend the money on public infrastructure projects.
2. Offer tax incentives (not subsidies) for couples to have children. Spain's birth rate is dismally low. Moreover, births are concentrated among the poor and immigrants, who generally require more services. The while middle-class has little interest in providing services for these children since middle-class couples customarily have but 1 child. (This is a wonderful case for friki econ; and I suspect I will be accused of all manner of illiberal sins for suggesting that it makes sense to provide incentives to the white middle-class to make babies when my only point is that it is good economic policy.)
3. Negotiate a deal with the banks to provide a 1-yr. interest only moratorium on home loan payments.
4. Suspend the government-funded home building program and use the money to underwrite the sales of already built but unsold housing to low-income families (not just the white middle class). Fixed-rate 30-year mortgages included in the package.

Now to Spain's worst and most intractable problem. Spain's autonomous regional and local governments are out-of-control, debt-ridden and rotten with corruption largely due to an absurd system of financing. (Another case of friki incentives.) These governments are months, even years behind paying suppliers and contractors, many of which have gone out of business. One owner of a small firm walked out onto the boom of a crane and refused to come down until he was promised payment. The town government agreed, demonstrating that everything is negotiable and that, in fact, they had no supplier payment plan in place.

Much of the mess comes from financing local government through tax revenues from construction and housing sales. During the boom years, this worked, and there were hundreds of millions left over for local politicians and bureaucrats. In many towns it was normal to find rags-to-riches stories of politicians and small-time contractors. In Spain, it is also customary to find elected officials who have spent there entire working lives as politicians. Spain's President is a professional politician. Many professional politicians have been elected to various legislative bodies as number "X" on a list of the party's candidates. Most have never been elected to office in a head-to-head contest. They have never even had to win a party primary. Political careers are made within parties by men andwomen whom no one outside the political party knows anything about. Young men and women start out working for the party in their early twenties and are proteges of and apprentices to more powerful party members. The stench is medieval. When the opposition Partido Popular lost the Presidential/Parliamentary  elections, the losing candidate, Mariano Rajoy, went right on being the head of the opposition party, enjoying all the privileges as the opposition leader, challenging Zapatero in Congress and travelling around the country extolling his virtues and those of his party. From time to time he is reminded that he's lost the Presidential elections twice, but he's not going anywhere. He has nowhere to go.

Back then to pretending to fix the financing problem. A special office in the Ministry of Finance should be set up to monitor government spending at all levels; the office must have the power to enforce fiscal responsibility and root out corruption. The Parliament should act by abolishing voting for lists of candidates and offer match candidates to specific offices. The byzantine system of financing the autonomous regions and local governments also needs a complete overhaul -- not to mention the educational and judicial systems, the last of which seems straight out of Bleak House.

None of what I am suggesting has any possibility whatsoever of coming to pass. Neither of the two leading parties nor any of the regional nationalist parties have the remotest interest in reform. In Spain, like the rest of Europe, pessimism is realism -- just a little more so. 

Bogus Bonuses

President Obama called the bonuses paid to banking sector executives, "shameful". He then said,“There will be time for them to make profits, and there will be time for them to get bonuses.”

He was right about "shameful", but he fudged it on bonuses, as if there were good old days we could go back to when a CEO received an "honest day's pay for an honest day's work". In a complex economy, this is close to impossible. It is inevitable earnings of investment bankers, hedge fund managers and CEOs of large companies will depend far more on social norms than long-term economic performance. Don't get me wrong. The elite of big business and finance are talented people; there is, however, scant economic justification for the pay they receive.

Even when firms do well, pay is not truly linked to performance because firm success does not usually depend on asset specific human resources. In simple English, there are thousands of people who could and would do the same work as well for a lot less money. Economist call this market failure. The rest of us use words like "unfair", "it's all about who you know not what you know", and so on. Obama, in writing the new rules on employment in his administration, is trying to put a dent into this sort of "legal corruption". In publically traded corporations, this job belongs to the Boards of Directors; they have failed miserably despite reform by the major stock exchanges.

The "man in the street" firmly believes that the market for the big money-making positions is rigged. He is right. You need to be part of the right circles to bring in the big deals, big clients, and big payoffs.

No, this does not mean that you can be a dolt and run a successful hedge fund or be CEO of General Motors. You need to be smart enough and focused enough to get the necessary education and professional and personal polish to be accepted as part of the economic elite.

However, there are thousands of people who qualify, but don't get to the top. We are told that the weeding out is meritocratic and that the incentives and rewards for success are such that the best are tapped for the most important and most lucrative posts.

Unfortunately, management research shows little correlation between pay and performance, though this only covers those who are in the elite. It is difficult to compare the potential performance of those who don't make it to those who do. Anecdotal evidence from my 20 years of consulting and teaching, I have been involved in a number of CEO searches and replacements, I nearly always found men and women further down the food chain who I was certain could do the job just as well, or better, than the individual selected. I have confirmed this with other consultants and academics.

Social norms are a more powerful determinant of CEO selection and pay than individual or firm performance. Our problem is that we have constructed the wrong social norms.

Nonetheless, there are people who make millions and earn it. For example, I have argued that professional athletes are worth what they get paid. Christian Ronaldo, striker at Manchester United, put a price tag on himself the other day at 100 million pounds. There will be takers, I promise. Kobe Bryant and Lebron James are worth even more. In fact, the NBA had to invent salary caps to prevent the stars from taking all the money and ruining the game. Here we have market failure invoked to save an industry. It's a nice turnaround on CEO market faiture; in team sports the stars make more than their coaches.

Why are Ronaldo, Bryant and James worth so much? Quite simply, nobody else can do what they do as well as they do and there are hundreds of millions of people who want to see them do it. There are thousands, perhaps millions, however, who can do what John Thain did at Merrill Lynch, perfecting his toilet training in a $35,000 commode.