Saturday, February 28, 2009

Same as the Old Boss?

Two full days ago, the following appeared in the Wall Street Journal (emphasis mine):
CIA Director Leon Panetta, in his first meeting with reporters, said the agency will continue to carry out drone attacks on militants in Pakistan. He also said that while CIA interrogations will have new limits, President Barack Obama can still use his wartime powers to authorize harsher techniques if necessary.
Is he saying that the President’s powers as Commander-in-Chief under Article II give him the power to override the law of the land, which includes our treaty obligations such as the Convention Against Torture? I thought we got rid of the people who told us that last election.

Then this is somewhat comforting…
The main change Mr. Panetta has planned, he said, is to establish "a clear set of ground rules" for interrogations and detainee treatment that are "in line with our ideals."
But you have to wonder what he could possibly mean by that, because the big slap in the face is yet to come:
On interrogations, Mr. Panetta said he believes the CIA can be effective if it limits itself to the 19 techniques the military is allowed to use. He said the administration is evaluating the effectiveness of so-called enhanced interrogation tactics such as waterboarding and will make recommendations to the president on what techniques should be allowed. In the interim, only the 19 techniques will be used.
Leon Panetta, head of the Agency that was given leeway to torture during the Bush administration, is now saying that waterboarding not only would be legal but is under active consideration?

I believe profoundly in President’s Obama’s governing project. In the joint address to Congress he said:
And that is why I can stand here tonight and say without exception or equivocation that the United States of America does not torture.
Did he just mean right now? It should be the position of this administration that neither the President nor anyone in his administration has the authority to order torture; that it is already illegal and illegitimate.

What I find a little surreal is the almost perfect silence in the blogosphere about this. Glenn Greenwald? Nothing. Andrew Sullivan? Nothing. Josh Marshall? Nothing. Atrios? Nothing. All the powderkegs of outrage are suddenly powderpuffs of indifference.

The Director of Central Intelligence has just told us that torture is an option… we’re just not choosing to exercise it right now. We are one election away from a torture regime again, and they will be able to say "not only did Bush say we have the right to torture, but Obama agreed." It seems like our national shame is not over.

Tuesday, February 17, 2009

The Fifth Age

After two disappointing elections, conservatives are wondering where their future lies. The clear-eyed ones realize that their project, as Reagan defined it, is finished if not complete. From 1980 to 2008, the highest marginal tax bracket was lowered from 70% to 35%. Welfare was reformed. The Soviet Union collapsed. Many businesses were deregulated. (Plainly, these items weren’t all their doing, but their wishing was in them.) On the other hand, the more ambitious conservative goals – privatization of Social Security, school vouchers, an imperial American presence worldwide, drastic reduction in the size of government – have little, if any, chance of coming to fruition.

We sometimes see the affinities of our ideological side as permanent. Of course, nothing could be further from the truth. Today, conservatives are known for wanting to shrink the size of the state, but in the first age of American politics, it was the Jeffersonian liberals who wanted to limit the federal; they thought that power should lie with the people, not a King-like figure. The Hamiltonian conservatives, on the other hand, argued for a strong central authority; they considered it necessary in order to resist the passions of the mob. It was an age that was both inspired and spooked by revolutions, both here and abroad.

Since that time we’ve had many inflection points, when the dividing lines between parties shifted. Are we coming to one of those moments? First, let’s consider the prior ones.

The second age of American politics was dominated by the Civil War; it runs from Jackson to the end of reconstruction. The issue that dominated the era was how much power should lie with the federal government, and how much of it should be retained by the states. The south saw the war as a conservative revolution… an attempt to protect a way of life.

The age of reform comes next. It runs from reconstruction to 1932. It is the only age that is not dominated by a single issue, but rather, many discrete questions. During this time, the mechanics of industrial capitalist democracy are refined, and it is largely (though not exclusively) the Republicans who are leading the way, doing some things that today we don’t usually associate with them, like taming large companies and conserving wild land.

The fourth age begins with Roosevelt’s coming to office in 1932. Beginning here, the primary argument is the size and scope of government. In many ways, the debate is framed by the rise and fall of the Soviet Union. Roosevelt wanted to save capitalism from itself, to institute reforms that averted the real possibility of social unrest and even revolt. Reagan wanted to diminish any resemblance to the old Soviet Union, to return to a primacy of the individual and the marketplace.

Today, the argument is largely – though not completely – concluded. “The era of big government is over,” announced Bill Clinton. Barack Obama described the role of government modestly: “Government must do what we cannot do for ourselves.”

Transformational liberal projects remain – universal health care, day care, perhaps others – but liberals have been chastened by their 28 years in the wilderness. Hardly anyone in the Democratic Party hankers for a return to the 70% top marginal rate or welfare as we knew it. Sometime in the next decade or two we will still have arguments about the extent of government… but probably without even realizing it, we will come to some sort of near-consensus on the role of government.

Even today, the size and scope of government is no longer the dominant issue. We are at the dawn of the fifth age of American politics. The great tectonic shift of our lifetime is globalism. China, India, and much of the rest of the developing world are enjoying an unprecedented growth spurt; they will demand power comparable to their financial gains. Problems such as global warming will require coordinated international responses. The great technological innovation of our times, the Internet, is a beast that knows no borders; it will need international authorities. Perhaps as a reaction to globalism, tribal conflicts seem to be on the upswing; they will necessitate multi-lateral responses. Our current financial crisis illuminates how completely trade and investment have bound us together; financial coordination and regulation will need to develop.

It is around these questions that the fifth age of American politics will be organized: pro-globalist vs. anti-globalist; free trade vs. ‘fair’ trade; submission to international authorities vs. maintenance of sovereignty; pro-immigrant vs. anti-immigrant; multilateralism vs. unilateralism; pro-foreign aid vs. anti-foreign aid; seeing the U.S.A as a leader of a new, multi-polar world vs. looking backwards to the U.S. as unipolar superpower.

The next conservative movement will be populist and nativist. They will inherit the socially conservative, church-going constituency of today’s Republican party (social conservatism will never disappear, although with the baby boomers aging past their child-rearing years, it will lose some ferocity.) It will be an anti-immigrant and protectionist movement, strong on defense, but inward-looking in foreign policy. They will heap scorn on treaties, as well as international organizations such as the United Nations, the WTO, the IMF, and others yet to be conceived. On global warming some will be denialists, some will fatalists, others will point to the sins of other nations as an excuse to avoid action ourselves. The new conservatives will lose support from the business community, but they will gain it from an increasingly disenfranchised working class. They will not be scared of government programs, and indeed, will advocate them for their constituencies.

Most surprisingly, these new conservatives are probably just as likely to take over the Democratic Party as the Republican Party. If it were the Republicans, we would probably see the new movement as son-of-Pat Buchanan, a new breed of paleocons. If it were the Democrats, we would probably see them as son-of-Dick Gephardt, pro-union pols in touch with their constituency’s conservative side.

Conservatism is not just a philosophy; it is a temperament. Liberals see social bonds as fraternal; conservatives see them as filial. Liberals identify with the collective, the people; conservatives identify with the nation – the motherland or fatherland. Globalism, the great seismic event of our lifetimes, will inspire a complex of passions close to the conservative heart. The emotions these questions raise will in coming years eclipse the old arguments about how much government we need.

Tuesday, February 3, 2009

Fix Social Security... So We Can Afford the Stimulus

A couple of weeks before his inauguration, Barack Obama was asked the following:
QUESTION: Mr. President-elect, budget experts, as you know, agree that the real key to controlling federal spending lies with the entitlement programs. How early do you plan on addressing Medicare and Social Security? And what will your approach be?
OBAMA: Well, first of all, as I noted in my remarks, we’re going to be inheriting a $1 trillion-plus deficit. And if we do nothing, then we will continue to see red ink as far as the eye can see.[…] We are working currently on our budget plans. We are beginning consultations with members of Congress around how we expect to approach the deficit. We expect that discussion around entitlements will be a part, a central part, of those plans. And I would expect that by February, in line with the announcement of at least a rough budget outline, that we will have more to say about how we’re going to approach entitlement spending, how we’re going to approach eliminating waste in government, one of Nancy’s tasks.

This is tantalizing, but not an indication that Obama -- in the first year of his first term -- will plunge headlong into the mythical third rail of American politics. Still... should he? Sadly, if Obama were to tackle Social Security most of the resistance would come from his own side. The reasonable argument the left wielded to defeat Bush’s privatization effort was the following: “Social Security ain’t broke. Yes, it will start running deficits in about a decade and exhaust its trust fund in about three decades, but all that is necessary to fix it is some small tweaks – if the assumptions are too pessimistic, maybe not even that. So let’s wait and see how it works out, and in the meantime, let's concentrate on more important matters.”

True at the time, but this position needs to be revised. Why?

First of all, the assumptions don’t look so pessimistic any more. For the 2008 report, the trustees assumed 2.4% GNP growth from 2007 until 2017. We missed that number in 2007, 2008, almost certainly will in 2009, and probably 2010 too. The assumptions are starting to look a little on the rosy side.

Secondly, saying all it needs is some small tweaks was always disingenuous. Yes, the changes necessary aren't large, but in political terms they are monstrously difficult.

But more importantly, there’s this (click to enlarge):


Our debt level as a percentage of GDP is the highest it has been since the Eisenhower administration, when we were paying down the cost of the World War II buildup. Are we at the point when creditors might start wondering about our ability to repay this debt? Are we risking a currency devaluation, massive inflation, a dumping of U.S. debt, the loss of the dollar’s status as the world’s reserve currency, and perhaps in the worst case, a loss of the enormous privilege of servicing our debt in our own currency? We would not be able to fix some of these consequences… they would be a serious and permanent injury to American power, prestige, and well-being.

What is the level of debt where these kinds of risks come into play? People that tell you they know are lying. But informed experts, including Larry Summers, are said to be worrying about such an eventuality.

It’s time to get beyond the liberal orthodoxy and look at a way to reestablish our fiscal credibility –- so that we can afford this stimulus plan and avoid punishment by the debt markets. Social Security is the way to do it. Look at this chart:

Starting around 2035, the difference between outlays and revenues is around 1 percent of GDP. Say we spent $825 billion on the stimulus and did absolutely nothing to pay it off. In three decades it would balloon to $3 or $4 trillion in debt in a $27 trillion economy. It would still probably be cheaper to finance that debt than to make up the Social Security shortfall, which would be around $270BN. By fixing Social Security, we can offset the perceived danger we add to our credit profile by spending on stimulus. And by showing the political will to control our spending, we add even more value to our creditor cred.

Need more reasons? The Democrats will have 58, 59… maybe even 60 seats in the Senate and a very popular President in the White House. When are we going to have more leverage in negotiating a Social Security fix? There is a real possibility we could make this most regressive tax just a little more fair. How to do it? I would favor raising the cap; if that is a non-starter because of the President’s campaign promises, maybe add a surtax for income over $250,000. Ramesh Ponnuru has an interesting suggestion: slow benefit growth to the rate of inflation for those that are well off.

Fixing Social Security would have another significant benefit… it would solidify Obama’s centrist credentials and probably guarantee his re-election. 63% of Americans don’t think they’re going to receive the full benefits they’re entitled to. An electorate that is re-assured on this matter would be enormously grateful.