Magazine April 20, 2009, Issue

The Week

(Roman Genn)

‐ Carter-era Fiat: Fix It Again, Tony. Obama-era Fiat: Fix It Again, Taxpayers.

‐ “What’s good for the country is good for General Motors,” Charles Wilson, the company’s president in the 1940s and early 1950s, is supposed to have said. But it was not until TARP that General Motors and the country were fused, as GM and Chrysler pleaded to be on the federal teat. President Obama’s dismissal of CEO Rick Wagoner was a predictable consequence; who pays the piper calls the tune. Obama was even tougher on Chrysler, telling it to find a viable partner (he suggested Fiat) or fold. These were salutary shocks: Bankruptcy would have administered them earlier, and delay has cost the taxpayer billions in interim life support. Will the Obama administration keep pushing? Many in it hope to use the auto crisis as an occasion for creating budget-busting green cars, and the United Auto Workers will not want its membership gutted. Political considerations inevitably displace economic ones when the government itself takes on the responsibility of micromanaging economic decisions.

‐ The special election in New York’s 20th congressional district, for a seat vacated by newly appointed Sen. Kirsten Gillibrand, won’t be decided for a while. Democrat Scott Murphy had a 65-vote edge over Republican Jim Tedisco, but 6,000 absentee ballots have to be counted. The election was billed, not very convincingly, as an early referendum on Obama’s first 70 days. Should the Democrats have won it because they held the seat, or should the Republicans have won it because it had been a GOP district before Gillibrand’s first victory in 2006? Pundits will have to get their augurs elsewhere.

‐ First, the House passed a 90 percent tax targeted at AIG bonuses. Obama was right to resist that mob maneuver, which has faded. Now, Rep. Barney Frank is attempting an even bigger power play: Recently introduced legislation would give congressional overseers the power to set wages for all employees — not just highly paid executives — at firms in which the government now has a capital interest, meaning that Washington will reserve the right to approve a 5 percent raise for a $10-an-hour drive-thru teller in Toad Suck, Ark. We think this proposal is imprudent but not indefensible: You take Uncle’s money, you get Uncle’s interference. What is indefensible is Representative Frank’s frankly expressed desire to have Congress remodel the entire compensation structure for the financial-services industry, regardless of whether the firms in question have received government money. The itch to control is as boundless as greed.

‐ The president continues to say that he wants Congress to enact a cap on carbon emissions this year. But the Senate looks less and less likely to give him what he wants. In part, that is because the Democratic majority includes many lawmakers from states that depend on coal either for power or for money. It is also because Obama’s bill would inflict severe economic pain in return for benefits that are small, notional, and distant. Let us therefore hope that Obama uses up as much political capital on this issue as possible before moving on to health care.

‐ We once called Arlen Specter “the worst Republican senator.” We’re still not fans, but we did breathe a sigh of relief when the “moderate” senator decided he’d vote against the Employee Free Choice Act — denying Democrats the 60 votes they’d need to force a vote on the bill, which would essentially eliminate the secret ballot in union elections and give government arbiters the right to impose contract terms on workers and employers. There’s a lot of fighting yet to do, but it’s nice to see Specter allying with his own party, even temporarily.

Overstimulated

The radicalism of the Obama administration has startled even European lefties. Writing in the Guardian, Jonathan Freedland remarked on the spectacle: “[Obama] and Brown stand together, supposedly the representatives of Anglo-American turbocapitalism, struggling to push the statist French and Germans — and this is the bit that was in nobody’s script — leftward.”

President Bush seemed to revel in the European indignation his policies aroused, but Obama seems genuinely surprised. Nowhere has this been more apparent than in his failed attempt to convince Europeans to launch Keynesian atomic bombs at the economic crisis. 

French president Nicolas Sarkozy made a classic French drama out of his rejection of “Obama-style” stimulus. Czech prime minister (and current head of the rotating EU presidency) Mirek Topolánek warned that Obama’s plans could destabilize world markets, adding that “all of these steps, these combinations and permanency, is [sic] the road to hell.”

As a result, European policy has been fairly calm in this storm. The chart at right indicates how dramatically U.S. policy has diverged from world norms this year. It compares the fiscal impact of the stimulus package that Obama and the Democrats enacted to the impact of similar packages adopted by European countries from 2008 to 2010. In each case, the total impact is scaled by GDP.

Source: OECD

Relative to GDP, the fiscal impact of the U.S. stimulus is nearly ten times larger than that of France, and almost double that of Germany. It is significantly larger than that of even the most Keynesian of European countries, Luxembourg. Obama may have a calm presence on television, but his economic policy looks like it has been driven by panic.

Europeans may have been reluctant to adopt massive Keynesian plans because their policy elite have become very data-driven. They know that such plans are unlikely to be effective. In addition, they recognize that stimulus today must eventually be paid for with higher taxes, and Europeans seem to cherish the competitive advantages associated with their low marginal tax rates.

America’s Left spent the last century striving to drive the United States to the European model. But while they were doing that, the Europeans changed. Thus, we can expect another four years of classic European derision targeted at the American president. Only this time, it will be more fun.

 – KEVIN A. HASSETT

‐ The Social Security surplus has vanished, not that anyone has noticed. In February, the program paid out more in benefits than it received in payroll taxes. When the economy recovers, a surplus may reappear temporarily. But the decades of using the payroll-tax surplus to finance the rest of the government have now come to an end. The Democrats, who have spent the last few years insisting that the program will be fine until the 2040s, are left holding the bag. Or, rather, we are.

‐ Everyone knows that the Catholic Church opposes abortion, but the basis and implications of its teaching are surprisingly unfamiliar to many people and even many Catholics. They see that the Church considers abortion immoral but not that it also considers abortion gravely unjust — which is why pro-choice Catholics who claim to agree with their Church about abortion are simply mistaken. Whether or not pro-choicers (of any faith or none) themselves personally wish anyone to have an abortion, all of them by definition wish for unborn children to do without the legal protections against deliberate homicide that apply to everyone else. This widespread confusion provides the backdrop for the controversy over the University of Notre Dame’s invitation to President Obama to give the commencement address and receive an honorary degree. The president favors keeping abortion legal at any stage of pregnancy, subsidizing abortion, funding experiments that kill human embryos, and allowing the killing of previable infants who survive abortions. He pledges to appoint Supreme Court justices who will prevent legislators from correcting the injustice of our abortion laws. He speaks of common ground but has shown no interest at all in compromise. Notre Dame’s invitation sends the message, intentional or not, that the radical injustice of abortion is a matter of interest only to Catholics, and perhaps not even all that much to them.

‐ House Republicans stumbled into a PR disaster when they rushed out a half-baked budget blueprint in response to the Obama administration’s taunts that they were the “Party of No.” The 19-page document contained no numbers or deficit projections, but it did have a few charts depicting platitudinous solutions springing from a box labeled “Republican Road to Recovery.” Republicans need to come up with fresh policy ideas, but they need to take the time to get the details right and not take the bait every time the administration tries to portray them as obstructionists. Obama’s budget calls for the biggest tax and spending increases in American history. There’s nothing wrong with saying no to that. 

‐ George Bush saw an “axis of evil”: America confronted by a trio of rogue nations. Now, Barack Obama gives us the “axis of disobedience”: America as part of a rogue trio — with Saddam Hussein’s terrorist regime and Communist North Korea. That’s the world according to Harold Hongju Koh, Yale Law School dean and Obama’s choice for State Department legal adviser. The U.S. is a renegade, Koh argues, because it “disobeys” global authority. He’d ditch U.S. sovereign self-determination in favor of “a smoothly functioning international legal regime” — the kind where leftist grandstanders like Spain’s Baltasar Garzón invoke “universal jurisdiction” to prosecute Bush officials for human-rights crimes (i.e., what used to be known as “national defense”). Koh would have the Constitution “evolve” to incorporate foreign-law norms — thus invalidating, for example, the death penalty and the right to own guns, while enforcing diktats from the International Court of Justice and the International Criminal Court. This is Obama’s worst appointment, and that’s saying something.

‐ Though reputed to be extremely bright, Rep. Barney Frank (D., Mass.) has made a fool of himself in attacking Justice Antonin Scalia as “homophobic.” Representative Frank maintained that he was not just hurling epithets at his opponents: Justice Clarence Thomas, he said, was an opponent of same-sex marriage but not a phobe. Scalia, in contrast, thought it was “a good idea” for governments to punish homosexual sex. Look through the case law, however, and you will find, first, that Justice Scalia merely ruled that states have the power to prohibit such behavior, not that they should exercise it; and second, that Justice Thomas endorsed Scalia’s opinion while adding that in his view they should not exercise it. Our preliminary diagnosis is that  Frank suffers from a case of blindness to the Constitution aggravated by logicphobia.

‐ At a news conference held by retired admiral Dennis Blair, our new director of national intelligence, the issue of terrorists detained at Guantanamo Bay came up. What’s the administration going to do with them? the DNI was asked. He replied, in part: “If we are to release them in the United States, you can’t just . . . put them on the street . . . We need some sort of assistance to them to start a new life and not return to some of the conditions that may have inspired them in the first place.” So apparently foreign terrorists are to receive stipends. What else are we to give them, free flying lessons?

‐ The first to go was “enemy combatants.” The Obama administration eliminated that term and made sure that everybody knew; after all, Americans don’t want “enemy combatants” released into their neighborhoods, as will soon be done with some of Guantanamo’s trained practitioners of terror. Sorry, did we say “terror”? That’s out, too. Janet Napolitano, the secretary of homeland security, prefers to say “man-caused disaster,” because “it demonstrates that we want to move away from the politics of fear”; like FDR, she seems to think that all we have to fear is fear itself. Presumably someone who perpetrates one of these acts will be called a “man-caused-disaster-causing man.” The latest term sent down the memory hole for being too honest is “War on Terror.” No replacement has been specified, though the bloodless phrase “Overseas Contingency Operation” is becoming popular around Foggy Bottom and the Pentagon. Obama got elected by endlessly repeating meaningful-sounding slogans that amounted to nothing at all. Now, in office, he is doing the opposite: attaching bland phrases to things of great consequence in hopes that it will make people forget their importance.

‐ According to Obama administration lawyers, the McCain-Feingold campaign-finance law empowers the federal government to censor books and films if their content and funding do not conform to its stipulations. At issue is a film called Hillary: The Movie, a documentary produced by the nonprofit group Citizens United, which did not wish to see Senator Clinton elected president. McCain-Feingold prohibits so much as mentioning a candidate’s name in pre-election communications paid for by unions or corporations, so the government forbade distribution of the film, which was to have been made available on a pay-per-view basis. The filmmakers sued, and the case, Citizens United v. Federal Election Commission, has been heard by the Supreme Court. In a remarkable exchange with Justice Alito, Deputy Solicitor General Malcolm Stewart argued that the law entitles the government to censor any political communication that runs afoul of McCain-Feingold’s statutory requirements — and he is quite correct in that argument. The Supreme Court should agree and then nullify most of McCain-Feingold. 

‐ New Hampshire, which already has civil unions for same-sex couples, is considering treating such couples as though they were married. The Democratic governor, John Lynch, has said he may veto a same-sex-marriage bill. We hope that it does not come to that, but that he will follow through if it does. Governmental recognition of marriage is pointless except as a way to nurture the vital but delicate relationship between sex and the raising of children. Same-sex marriage does not expand the institution so much as empty it of content.

‐ New York governor David Paterson and the state legislature have agreed to undo the last vestiges of the Rockefeller drug laws: 1970s legislation that imposed draconian penalties on drug offenders. The tough penalties went by the wayside five years ago; the new laws propose to give discretion in sentencing to judges, which worries prosecutors, with some reason: Will crooks who were also drug users or pushers get revolving-door doses of rehab, rather than hard time? New York’s prison population is falling, even as crime rates remain low. “If you saw something that was so successful, why would you tinker with it?” asked the Staten Island DA. How to administer the law justly and humanely in the midst of a drug war is a conundrum that will be with us as long as the drug war is.

‐ The trial of abortionist George Tiller resulted in no conviction, but it did serve to remind any who needed reminding of the seediness of the abortion racket. Tiller, who performs late-term abortions that kill viable babies, is required by Kansas law to do so only after receiving a second opinion from an independent physician. For this grim task he chose Dr. Ann Kristin Neuhaus, who during that time was operating with a restricted medical license because of controlled-substances violations — and she “needed the money,” as Tiller wrote in his journal. Neuhaus was paid, in cash, by Tiller’s patients, whose appointments with her were scheduled by Tiller’s office, and she endorsed their abortions on forms drawn up by Tiller’s attorneys. But she was, in the judgment of the jury, something short of a full-time employee, and so Tiller was acquitted of the charges against him. His license will be reviewed by a panel that rejoices in the title Kansas State Board of Healing Arts. 

‐ Bill “We Didn’t Do Enough” Ayers was invited to speak at Boston College by two student groups (one of them was the College Democrats), but after talk-radio host Michael Graham kicked up a fuss, BC administrators cancelled the event, “out of concern for the safety and well being of our students.” Perhaps they were worried that some student soul-mates of Ayers’s might blow themselves up (that’s happened before), or that they might blow other people up (that would have happened if the Weather Underground had been more competent bomb makers). Ayers has changed his m.o. over the years, preferring now to work as a termite in the bureaucracies of foundations and universities; he’s a friend of the president of the United States. But his past is scarlet, and he regrets it only when it is necessary to make a show of contrition. Good for Graham for calling him out, and good for BC for dishonoring him.

‐ Mickey Kaus, sprightly e-pundit, posts a thread from JournoList, the secret online barbershop where liberal pundits share story ideas, but so much more. How much more? Well, the thread — called “Breaking: Marty Peretz is a crazy-a** racist” — flays the editor-in-chief of The New Republic, wonders to what degree it is permissible to discuss the sex lives of (non-list) journalists, and weighs the relative sanity of Michael Savage and Keith Olbermann. It’s as lively as a flock of crows, and as interesting as a collection of navel lint. Rob Long would write about it, but he’s waiting until the JournoListers show up on Larry King.

‐ In Mexico, Secretary of State Hillary Clinton spoke of America’s “shared responsibility” for the horrific drug violence now plaguing that nation: “We know very well that the drug traffickers are motivated by the demand for illegal drugs in the United States, that they are armed by the transport of weapons from the United States.” Well, yes and no. She is right, of course, that the drug trade is demand-driven, but on the supposed flow of guns southward, she is on much shakier ground. At a recent Senate hearing, law-enforcement personnel testified that firearms smuggling from the U.S. is a minor problem, with most of the Mexican kingpins’ guns coming from other sources. The Los Angeles Times says the drug gangs are switching to higher-powered weapons, most of which are “smuggled from Central American countries or by sea.” Secretary Clinton’s admission about supply and demand, which is obvious but too often denied or ignored, could be the basis for more sensible drug policies, but probably won’t; her assertion about gun-running, which is questionable at best, should not be the basis for firearms policy, but probably will.

‐ Clinton also visited the basilica of Our Lady of Guadalupe, where she was given a special up-close viewing of the cloak on which Catholics believe that an image of the Virgin Mary was miraculously imprinted almost 500 years ago. Said Mrs. Clinton to the monsignor who was escorting her: “Who painted it?” “God,” he answered. One does not have to agree with the monsignor to know that the image, displayed in millions of Mexican homes and stores, is a national icon, and that to show ignorance of it is rather like asking, on a visit to Valley Forge, say, or Gettysburg, “Now what happened here again?” We suspect that George W. Bush, former governor of Texas, would not have made such a mistake when he was representing the U.S., and we strongly suspect that if he had, the press would have been less charitable than it was to Mrs. Clinton — or than Our Lady was (for better reasons).

‐ Daniel Hannan is one of a number of conspicuously bright young Conservatives in Britain. He happens to be a member of the European Parliament in Brussels, a splendid irony as he is a preeminent critic of the whole European project and deploys his great gift for the striking phrase to ridicule what’s going on around him. In an address to the Brussels Parliament, British prime minister Gordon Brown as usual claimed that everything was fine because he has the economic crisis under his sole control. Daniel Hannan’s reply was electrifying. “When you repeat in that wooden and perfunctory way, that our situation is better than others,” he said in particularly choice language, “I have to tell you that you sound like a Brezhnev-era apparatchik giving the party line.” A video showed Hannan’s command performance and Brown squirming as he listened. Posted on YouTube, this video has been the sensation of the moment, with more than a million hits, and taken up by news outlets from Australia to America, including Rush Limbaugh. Hannan has helped boost himself into a future Conservative cabinet.

‐ Watch the skies over the Pacific these days and you are likely to see an intercontinental missile with a range of 6,000 miles winging from North Korea over Japan and towards Hawaii. Satellite photos have confirmed that this missile has been on its launch pad for some time, and there may even be a second missile ready to go. The North Koreans say that they are merely putting a satellite into orbit, but truth for them is a variable concept, and everybody takes it for granted that this is a stage in the development of their nuclear weapon. The United Nations specifically bans North Korea from testing missiles and nuclear devices, and it would be possible, legal, and in the interests of world security to shoot down any and every North Korean missile. But South Korea opposes any such response and the Japanese limit themselves to saying that they might destroy any debris falling on them. The United States has sent two ships on a mission to observe, and in a television interview a flummoxed Secretary of Defense Robert Gates spelled out that there are no plans to take military action to halt the launching or to shoot any missiles down — unless one does actually head for Hawaii. Take comfort in that if you can.

‐ In a (related?) development, at the behest of dictator Kim Jong-il, North Korea has opened its first pizzeria. We hear the Pyongyang eatery is preparing a promotional campaign: “Delivery radius of 6,000 miles — get it in 30 minutes, or it’s free! Now delivering to Japan!”

‐ The International Atomic Energy Agency (IAEA) is commonly known as “the U.N.’s nuclear watchdog.” There are two main candidates to run it: Yukiya Amano of Japan and Abdul Minty of South Africa. The agency’s board votes them in, and, in the early voting, neither man won the required two-thirds majority. As a Wall Street Journal article put it, “The deadlock reflects the different views of the IAEA’s mission. Mr. Amano’s candidacy was backed by developed countries in the European Union and the U.S. who emphasize the agency’s role in monitoring the nonproliferation of nuclear weapons. Mr. Minty found support in non-aligned developing countries that seek development of nuclear technology for peaceful purposes.” Shouldn’t there be quotation marks around “peaceful”? (And what does “non-aligned” mean in the post–Cold War context, by the way?) It sounds like Mr. Amano is the better horse — but the IAEA should be taken with many grains of salt anyway. Someone will have to be watching the “watchdog,” regardless. It can fall asleep on the job — which is one reason the George W. Bush administration had to create the Proliferation Security Initiative, which actually got results. See Libya.

‐ The Iranian new year is called “Nowruz,” and President Bush used to send a message of solidarity to Iranians on that day. This year, President Obama did something quite different. He addressed his message to “the people and leaders of Iran.” He did not go in much for freedom and democracy and all that Bushian jazz. Instead, he appealed to Iran for a relationship based on “mutual respect.” Bear in mind, the Iranian government stones young girls to death for the crime of having been gang-raped. Just a day before Obama sent his message, we learned that a young Iranian blogger, Omid Mir Sayafi, had died in an Iranian prison: Evin, that torture chamber and graveyard for so many good people. An American journalist, Roxana Saberi, is being held in that prison right now. Her fate is unknown. In his Nowruz message, President Obama said, “The United States wants the Islamic Republic of Iran to take its rightful place in the community of nations.” The Islamic Republic of Iran: Obama said it twice, accepting the theocrats’ view of Iran. That is not the view of most Iranians. Obama’s performance was of a piece with the interview he gave to al-Arabiya, the Middle Eastern television network, in his first days as president. Fouad Ajami wrote a column about that interview for the Wall Street Journal. It was headed, “Obama Tells Arabia’s Despots They’re Safe: America’s diplomacy of freedom is officially over.” We fear that Obama will learn the hard way that abasing ourselves does not advance our interests.

‐ Almost miraculously, there is a youth orchestra in the Palestinian refugee camp at Jenin. At least there was. It was called Strings for Freedom, and they were conducted by Wafa Younis. Now Palestinian officials have shut down the orchestra, boarded up its rehearsal studio, and banned Ms. Younis from the camp. Why? She had taken the group to play for Holocaust survivors in Israel. As the Associated Press said, “The discord highlights both the distrust many Palestinians have of any engagement with Israel, as well as their reluctance to acknowledge Jewish historical suffering because of concerns that it weakens their own claim to this disputed land.” There is a sickness in the Middle East — a sickness that says, “Playing music for Holocaust survivors is an act of treason.” When this sickness will pass, no one knows. 

‐ Khaled Abu Toameh is a Palestinian journalist who knows as much about the Palestinian world as anybody: its history, its players, its contentions. He is also extraordinarily conscientious. So when he says something about thought on American campuses, it pays to listen. In an article for the Hudson Institute, he wrote, “During a recent visit to several university campuses in the U.S., I discovered that there is more sympathy for Hamas there than there is in Ramallah. Listening to some students and professors on these campuses, for a moment I thought I was sitting opposite a Hamas spokesman or a would-be suicide bomber. I was told, for instance, that Israel has no right to exist, that Israel’s ‘apartheid system’ is worse than the one that existed in South Africa, and that Operation Cast Lead was launched only because Hamas was beginning to show signs that it was interested in making peace,” etc. Welcome to American higher learning.

‐ Ileana Ros-Lehtinen is the senior Republican on the House Committee on Foreign Affairs. Recently she issued a statement with several of her colleagues. It called for a cessation of U.S. funds to UNRWA. What is UNRWA? The United Nations Relief and Works Agency, set up to benefit one group of people: Palestinians. As Ros-Lehtinen & Co. wrote, “For six decades, the United States has voluntarily contributed billions of dollars” to UNRWA. “In return for our generous investment, UNRWA subverts our laws, aids violent Islamist extremists, propagandizes against our ally Israel and in favor of Hamas, and works with banks targeted by the United States for money laundering and terrorist financing.” They suggested that Congress “cut off funding to UNRWA and use our foreign aid to advance, rather than undermine, American interests and values.” Sounds good to us. And one more thing: Palestinians do not benefit from a U.N. agency that mires them in grievance rather than lifting them out of it.

‐ Was there a more inspiring story last month than the people of Fargo, and other Red River towns, tirelessly filling and piling sandbags in hellacious weather, in a mostly successful attempt to stop the waters, swollen by rain and snow and jammed by ice, from flooding their homes and businesses? They showed the dogged relentlessness of some Fifties existentialist drama, and the pull-together can-do spirit of America: Camus meets Booth Tarkington. After the flood crested came the next danger: an early-spring snowstorm that threatened the improvised levees with wave damage. When Nature wants to overwhelm us, she simply does: the Black Death, Krakatoa. How nobly the people of the upper plains responded to their chance to fight her to a draw.

‐ The image is lurid: a headless, goose-stepping soldier, pushing a Star of David whose front-most points are transformed into a shark’s jaws, pursuing a tiny mother and child, labeled “Gaza,” off a cliff. The Simon Wiesenthal Center said it mimicked “venomous anti-Semitic propaganda of the Nazi and Soviet eras.” The cartoonist was Pat Oliphant, who wields a sharp pen, whatever his subject, and sticks up for fellow cartoonists who do the same (he defended NR’s Roman Genn). The issue is not the image, but the point of view: Israel is a brutal, destructive power, driving hapless Gazans to their deaths. This is increasingly the mainstream view of Israel, whenever it responds militarily to asymmetrical warfare, whether in Gaza, Lebanon, or the West Bank. One of the goals of asymmetrical warfare — launching terrorist provocations from civilian neighborhoods — is to create that impression. The transformation of Israel into an imperialist oppressor (cf. Chas Freeman, Mearsheimer and Walt) proceeds apace. How odd to find Pat Oliphant in a herd.

‐ The little town of Eufaula, Ala., is home to Alatech Healthcare, which boasts on its website of being the “largest state-of-the-art condom production facility in the U.S.” and “exclusive American supplier of condoms to USAID.” That would be the U.S. Agency for International Development, which distributes millions of condoms to Third World nations via HIV-prevention programs. The agency, however, has announced plans to change suppliers. Alatech charges five cents per condom; USAID can get the item for two cents in China. Alatech CEO Lawrence Povlacs says that about 300 workers could lose their jobs as a result of the outsourcing. In this Age of Stimulus, should not the federal government display extra sensitivity towards decisions affecting American workers? And why are Chinese condoms so much cheaper? A theory comes to mind . . . but this is really not a suitable topic for ribbing.

‐ Nagasaki resident Mr. Tsutomu Yamaguchi was on a business trip in Hiroshima on August 6, 1945. The atom bomb caught him in the open, and he was badly burned. After stumbling through the shattered city and its horrors for some hours, Mr. Yamaguchi managed to get on a train back to his home town. After treatment for his injuries, he dutifully reported back to work at his company in Nagasaki on the morning of August 9. His boss demanded an explanation for his bandaged appearance, and was incredulous when told of the destruction of Hiroshima (of which the Japanese media had said nothing). He had just lost his temper and accused Mr. Yamaguchi of lying when there was an almighty flash . . . Mr. Yamaguchi, now 93 years old, has been formally certified as one of the very few to have survived both nuclear blasts; and, of that few, to have been closest to both — about two miles in each case.

AT WAR

The Cautious Surge

Barack Obama took a big step toward making the Afghan war his own with a speech explaining why he is sending an additional 21,000 troops. 

Obama argued that we need the “comprehensive” approach of a full-scale counterinsurgency — encompassing security, governance, and development — rather than the narrow counterterrorism strategy some of his advisers favored. That minimalist strategy would have risked making all of Afghanistan into the equivalent of the tribal areas of Pakistan, where al-Qaeda operatives go unmolested except by the occasional Predator strike.

U.S. troops have been too thin on the ground and unable to hold areas after clearing them. That should change now, at least in crucial areas in the Pashtun South, where the Taliban is strongest. The summer will bring a tough season of fighting. The rest of the coalition effort has to be ramped up as well, with a greater civilian footprint, with more trainers for Afghan security forces, and with more focus on improving Afghan governance. Obama committed to all that.

Afghanistan need not make a grand leap into the First World for our effort to have been successful. It just needs to return to the relative stability of, say, 2004, or to a version of its golden period prior to the coups and the Soviet invasion of the 1970s. This is not merely a goo-goo project. If we do not want to keep a large force in Afghanistan for decades or to leave the country to the tender mercies of the Taliban and its allies, we need to foster an Afghan government competent enough to field a substantial army and decent enough not to send disaffected Afghans into the arms of the insurgency. 

It is an important fight not just because we want to deny al-Qaeda safe havens again in Afghanistan, but because the future of Pakistan is caught up in it. If we demonstrate staying power in Afghanistan and stabilize the situation, it will be a blow to the extremists threatening the nuclear-armed Pakistani state. But our work in Afghanistan is made all the harder by the non-cooperation of the Pakistani government, and the active support for the insurgency by its security service, the ISI. Obama promised to impose more accountability on the Pakistani government at the same time as he called for more aid to the country — another $1.5 billion a year for the next five years. We hope he can manage to get the Pakistanis to perform rather than just vacuuming up our aid dollars as they play the same old double game.

What is most disturbing about Obama’s position is the hint of hedging. Commanding general David McKiernan had asked for even more troops. Obama approved only part of his request, preferring to wait and make a call on the balance later. But it will likely get politically harder, not easier, to send them. Obama declined to explicitly endorse an expensive doubling of Afghan security forces, as some in his administration have advocated, saying only that further “increases in Afghan forces may very well be needed.” And he talked of benchmarks for progress in the war, a politically seductive notion that proved useless at best — and often counterproductive — in the Iraq War. 

Obama’s strategic review is a start. Much will depend on how he performs later, when the Left is more restive and the politics of the war more parlous.

THE GEITHNER PLAN

Toxic for Taxpayers

Treasury secretary Tim Geithner finally released the details of his plan to create a public-private partnership to buy toxic assets from banks. It is unfortunately as bad as we thought it would be. Intentionally or not, the plan is structured to transfer, as much as possible, the losses on bad assets to taxpayers. 

It would work like this. The Treasury would partner with private entities, such as hedge funds, to buy pools of mortgage-backed securities from banks. More than 80 percent of each purchase would be financed through a non-recourse loan from the Federal Deposit Insurance Corporation, using the assets as collateral. Any assets that appreciate in price would yield profits that the Treasury and the private entities would split 50/50. Any assets that go bad could be forfeited to the FDIC, with the taxpayer eventually eating the loss. 

It is no mystery why the markets liked this proposal. For investors, it presents an opportunity to buy the best of the banks’ distressed assets for less than they are probably worth. For the banks, it presents an opportunity to offload their most toxic paper for more than it is probably worth. The investors get to keep the good assets; the taxpayers get stuck with the junk. 

Geithner’s plan also faces two logistical problems. First, mark-to-market accounting rules might cause the plan to backfire. Let’s say a healthier bank like Wells Fargo decides to take advantage of this program and sell a pool of mortgage-backed securities to Geithner and Co. for 70 cents on the dollar. This becomes the new market price for these assets, even if their underlying value — the cash flow from people paying their mortgages — turns out to be higher. Mark-to-market rules would force a weaker firm like Citigroup to mark its assets to the new price, which could precipitate the collapse we are trying to avoid.

The government could dodge this problem by temporarily loosening mark-to-market rules — something policymakers are finally showing an inclination to do. But that wouldn’t solve the second problem: The plan relies on the heroic assumption that the government can still find willing partners in the private sector after last month’s Bonusgate inquisition, in which the House reacted to public outrage over compensation at AIG by passing a 90 percent retroactive tax on bonuses paid to employees at bailed-out firms. 

If anything, Geithner’s public-private partnership would be more offensive than the AIG bonuses: It would very plainly use taxpayer funds to finance new Wall Street fortunes. How many news stories do you think it would take to generate hearings, public recriminations, and ex post facto laws targeting those fortunes? How many investors want to find out?

THE G20 MEETING

Globaloney

Nobody expects much to come out of the Group of 20 meeting of the leaders of the world’s largest economies, thank goodness. There are too many different agendas at play, and all of them are destructive. President Obama would like an internationally coordinated fiscal stimulus. French president Nicolas Sarkozy wants international financial regulations. The Chinese and Russians want to displace the dollar as the world’s reserve currency.

Within the Keynesian model, international fiscal coordination makes sense: Otherwise the stimulators end up partially subsidizing non-stimulators. But many G20 countries rightly worry about rising debt and rightly doubt the power of fiscal stimulus. Within limits, international financial regulation makes sense, as when setting capital standards for companies with global operations. But previous attempts at international financial standards have arguably made the current crisis worse, so we should tread more carefully than Sarkozy seems inclined to do.

China has expressed reasonable concern about the future of the dollar — which is to say, concern that the U.S. will be tempted to inflate its currency to reduce the real value of its foreign debt. But there are no serious candidates for replacements for the dollar. Who would issue the new monetary unit? Far the better course would be for the U.S. to bring down its long-term debt by reining in the growth of its entitlement spending.

If the G20 leaders cannot do much useful as a group to advance global economic recovery, they can at least refrain from impeding it. Protectionist pressures are predictably rising in all of the afflicted countries.

Free trade and entitlement reform may not match the political needs of any of these leaders or the mood of the public. They are nonetheless the right prescription.

Members of the National Review editorial and operational teams are included under the umbrella “NR Staff.”

In This Issue

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Sections

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Letters

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