Sunday, February 11, 2007

Why does the Times still let Brooks babble? Today he’s holding forth on the global economy. Then we have Nicholas Kristof on disinvestment in Sudan. Last, but certainly not least, we have Frank Rich on Barack Obama and the Senate. First up, Bobo:

Once, there was a bridge to the 21st century. But no major Democrat today speaks as confidently about globalization and technological change as Bill Clinton and Al Gore did a decade ago. No major Democrat today speaks as optimistically about free trade as Gordon Brown does in Britain.

In the Democratic Party today, neopopulists and economic nationalists are on the rise. The free-traders are on the defensive. The Democratic view of the global economy has grown unremittingly grim. When John Edwards talks about the economy, you think he’s running for the Democratic nomination of 1932.

Which is why the report to be released tomorrow by the Democratic activist group Third Way is so remarkable. Here is a group of Democratic economists and strategists who are taking on the rising neopopulists.

The first thing their report, “The New Rules Economy,” does is challenge the neopopulist depiction of economic reality. Neopopulists are good at describing the suffering in towns like Mansfield, Ohio, and Flint, Mich. But they act as if they’ve never been to Charlotte or Phoenix, where office parks are shooting up.

The authors of this report, Anne Kim, Adam Solomon, Jim Kessler and Stephen Rose, try to blend all the diverse pieces of American reality, and to expose what they call “the myths of neopopulism.”

The first myth, they write, is the myth of the failing middle class. It’s true there are more households headed by young and old people, who tend to have lower incomes. But if you take households headed by people in their prime working years, 25 to 59, you find those people are not failing. Their median income is $61,000. If they are married, their median income is $72,000. Those are decent incomes in most parts of the country.

Moreover, their living standards are not stagnant. Between 1979 and 2005, the percentage of prime-age households making over $100,000 in current dollars rose by 12.7 percentage points. As Ben Bernanke, the Fed chairman, said last week, incomes at all levels are rising; it’s just that incomes at the upper end are rising much faster.

The Third Way authors also dispute recent warnings of wildly increasing income volatility. The main reason incomes have grown more volatile over the past decades is motherhood, they write. As women play a more significant role in the economy, their movements in and out of the labor force to care for children increase volatility.

The report goes on to challenge the direst warnings about rising credit card debt (household assets have risen faster than debts), rising corporate profits (they are cyclical and pretty much normal for this stage in a recovery) and American decline.

The Third Way authors are not saying everything is hunky-dory — far from it — but they are saying Democrats tend to lose when they are relentlessly grim and when the reality they describe is detached from the reality most Americans experience.

Moreover, they are restating the truth neopopulists are loath to admit: that no nation on earth is better positioned to take advantage of an ever-more-open economy, and today’s challenge is not to retard openness but enable more people to take part in it.

The second half of the report describes how government can help people adjust to the new economic rules. Frankly, I wish the authors had been a bit more creative here, asking, for example, why so many people don’t heed the huge incentives to finish high school and college. There are deeper mental and cultural processes in play than can be dealt with by the usual mix of tax credits.

Still, the significance of the report is that at least some Democrats have the guts to take on the neopopulists, who are masters of vilification.

In fact, their political method is based on vilification over explanation. They vilify unpatriotic executives, but the vast majority of job losses are caused by technological change, not outsourcing. They vilify overpaid C.E.O.’s, even though their pay packages have nothing to do with the stagnant wages of the unskilled. They vilify foreign governments for not living up to the rules of “fair trade,” even though developing countries could enforce every labor and environmental regulation under the sun and their workers would still be cheaper for low-skill tasks.

The neopopulist caucus in the Democratic Party is like the anti-immigrant caucus in the Republican Party. Both speak for loud and angry minorities who have been hurt by globalization. But the party that mistakes their experience for the central reality will doom itself for years to come.

Now here’s Mr. Kristof on how our investments are killing people.

So is your Fidelity account underwriting genocide in Sudan? Is your pension fund helping finance the janjaweed militias that throw babies into bonfires in Darfur and Chad?

The answer to both questions is complicated but may be yes, and that’s one reason a divestment campaign is gaining strength around America and abroad. Six states (including California) have already begun divesting from companies active in Sudan, and legislation is pending in 23 more states, including New York.

More than 30 universities, beginning with Harvard in 2005, have sold certain Sudan-related investments. Five cities have divested, and New York is considering doing so. A bill before Congress would bar certain companies active in Sudan from receiving federal contracts.

Let’s start by acknowledging that divestment and economic sanctions generally fail. The closest thing to a success was the way they helped topple white rule in South Africa in the 1980s, but even there one result was greater hardship for ordinary blacks.

Elsewhere, divestment and economic sanctions have mostly been counterproductive. Our Cuban embargo has hurt Cubans but cemented Fidel Castro in power; our sanctions against Myanmar have inflicted tremendous pain on Burmese without dislodging the brutal government.

So I’m against economic sanctions in almost every case. But Sudan is an exception, a rare instance where narrowly focused divestment makes practical as well as moral sense.

Partly that’s because Sudan’s economy depends on foreign oil companies, giving the outside world leverage. And 70 percent of Sudan’s oil revenue goes to weaponry, like bayonets used to gouge out people’s eyes.

The oil companies in Sudan aren’t American; the biggest players are Chinese companies. Pressure on them is also one way to get the attention of the Chinese government, which is Sudan’s main protector in the U.N. Security Council.

So in this case pressure on a small number of foreign companies could help get Sudan’s attention, and that of its protectors in China, without hurting ordinary people. And Sudan has shown that it can be nudged and embarrassed into behaving better: the best example is the way that pressure (including economic sanctions) led Sudan’s leaders to end their brutal war in southern Sudan in 2005.

Fortunately, the Darfur divestment campaign has been remarkably restrained in choosing targets. Organizers are not seeking divestment from all of the more than 400 foreign companies that operate in Sudan, but only from a few dozen that are complicit in genocide without helping ordinary Sudanese. (See the guidelines at www.SudanDivestment.org, developed largely by a recent U.C.L.A. graduate, Adam Sterling.)

“People are surprised to find out that Royal Dutch Shell is not a targeted company by us, even though they are an oil firm and operate in Sudan,” notes Mark Hanis, who runs the Genocide Intervention Network (which has a divestment hot line, 1-800-GENOCIDE). That’s because Shell sells gas in Sudan at a retail level, rather than enriching the army through production, Mr. Hanis said, and less than 5 percent of those sales are believed to be to the government.

More than other money managers, Fidelity has resisted the pressure and clung firmly to Sudan-related investments. So Darfur campaigners are urging investors to avoid Fidelity mutual funds: more information is at www.FidelityOutofSudan.com.

The biggest U.S. investor in Class H shares of PetroChina, a Chinese oil concern whose parent company is active in Sudan, is Warren Buffett’s Berkshire Hathaway. I have huge respect for Mr. Buffett, and he may be thinking: My obligation is to make money for shareholders, not to use their investments in a dubious attempt to save the world. But surely if Berkshire Hathaway and Fidelity mutual funds saw lucrative opportunities in selling bayonets to the janjaweed, they would balk at that. We do have limits; the question is where we draw them.

In this case, the cost of divestment to fund managers or investors is negligible, and there is a real prospect that the strategy will add enough attention, embarrassment and pressure that Sudan will stop slaughtering Darfuris — just as it has stopped massacring people in southern Sudan.

It’s not a sure thing. But remember that in Darfur and Chad, aid workers — some of them Americans — are being killed, raped and beaten as they try to alleviate the slaughter. So shouldn’t we make the minimal sacrifice of divestment, rather than blithely continue to invest in ways that provide grenades and guns to kill aid workers and Darfuris alike?

To comment on this column, go to Nicholas Kristof’s blog, On the Ground.

And now here’s Frank Rich, who just could not resist a swipe at Joe Biden:

As the official Barack Obama rollout reaches its planned climax on “60 Minutes” tonight, we’ll learn if he has the star power to upstage Anna Nicole Smith. But at least one rap against him can promptly be laid to rest: his lack of experience. If time in the United States Senate is what counts for presidential seasoning, maybe his two years’ worth is already too much. Better he get out now, before there’s another embarrassing nonvote on a nonbinding measure about what will soon be a four-year-old war.

History is going to look back and laugh at last week’s farce, with the Virginia Republican John Warner voting to kill a debate on his own anti-surge resolution and the West Virginia Democrat Robert Byrd seizing the occasion for an hourlong soliloquy on coal mining. As the Senate pleasured itself with parliamentary one-upmanship, the rate of American casualties in Iraq reached a new high.

The day after the resolution debacle, I spoke with Senator Obama about the war and about his candidacy. Since we talked by phone, I can’t swear he was clean, but he was definitely articulate. He doesn’t yet sound as completely scripted as his opponents — though some talking-point-itis is creeping in — and he isn’t remotely defensive as he shrugs off the race contretemps du jour prompted by his White House run. Not that he’s all sweetness and light. “If the criterion is how long you’ve been in Washington, then we should just go ahead and assign Joe Biden or Chris Dodd the nomination,” he said. “What people are looking for is judgment.”

What Mr. Obama did not have to say is that he had the judgment about Iraq that his rivals lacked. As an Illinois state senator with no access to intelligence reports, he recognized in October 2002 that administration claims of Saddam’s “imminent and direct threat to the United States” were hype and foresaw that an American occupation of Iraq would be of “undetermined length, at undetermined cost, with undetermined consequences.” Nor can he be pilloried as soft on terrorism by the Cheney-Lieberman axis of neo-McCarthyism. “I don’t oppose all wars,” he said in the same Chicago speech. “What I am opposed to is a dumb war.”

Now that Mr. Obama has passed through Men’s Vogue, among other stations of a best-selling author’s cross of hype, he wants to move past the dumb phase of Obamamania. He has begun to realize “how difficult it is to break through the interest in me on the beach or that my wife’s made me stop sneaking cigarettes.” He doesn’t expect to be elected the leader of the free world because he “can tell a good joke on Jay Leno.” It is “an open question and a legitimate question,” he says, whether he can channel his early boomlet into an electoral victory.

No one can answer that question at this absurdly early stage of an absurdly long presidential race. But Mr. Obama is well aware of the serious criticisms he engenders, including the charge that he is conciliatory to a fault. He argues that he is “not interested in just splitting the difference” when he habitually seeks a consensus on tough issues. “There are some times where we need to be less bipartisan,” he says. “I’m not interested in cheap bipartisanship. We should have been less bipartisan in asking tough questions about entering into this Iraq war.”

He has introduced his own end-the-war plan that goes beyond a split-the-difference condemnation of the current escalation. His bill sets a beginning (May) and an end (March 31, 2008) for the phased withdrawal of combat troops, along with certain caveats to allow American military flexibility as “a big, difficult, messy situation” plays out during the endgame. Unlike the more timid Senate war critics, including Hillary Clinton, Mr. Obama has no qualms about embracing a plan with what he unabashedly labels “a timeline.”

But he has no messianic pretensions and is enough of a realist to own up to the fact that his proposal has no present chance of becoming law. Nor do any of the other end-the-war plans offered by Congressional Democrats — some overlapping his, some calling for a faster exit than his. If a nonbinding resolution expressing mild criticism of President Bush’s policy can’t even come to a vote in the Senate, legislation demanding actual action is a nonstarter. All the Democrats’ parrying about troop caps, timelines, benchmarks, the cutting off of war funding, whatever, is academic except as an index to the postures being struck by the various presidential hopefuls as they compete for their party’s base. There simply aren’t 60 votes in the Senate to force the hand of a president who, in Mr. Obama’s words, “is hellbent on doing what he’s been doing for the last four years.”

Unless, of course, Republicans join in. The real point of every Iraq proposal, Mr. Obama observes, is to crank up the political heat until “enough pressure builds within the Republican Party that they essentially revolt.” He argues that last week’s refusal to act on a nonbinding resolution revealed just how quickly that pressure is building. If the resolution didn’t matter, he asks, “why were they going through so many hoops to avoid the vote?” He seconds Chuck Hagel’s celebrated explosion before the Senate Foreign Relations Committee, when “he pointed at folks” and demanded that all 100 senators be held accountable for their votes on what Senator Hagel called “the most divisive issue in this country since Vietnam.”

That’s why Mr. Obama is right when he says that the individual 2008 contests for the Senate and the House are at least as important as the presidential race when it comes to winding down the war: “Ultimately what’s going to make the biggest difference is the American people, particularly in swing districts and in Republican districts, sending a message to their representatives: This is intolerable to us.”

That message was already sent by many American voters on Election Day in 2006. Rahm Emanuel, the Illinois congressman who, with his Senate counterpart, Chuck Schumer, oversaw that Democratic takeover, smells the blood of more Republicans in “marginal districts” in 2008. His party is now in the hunt for fresh candidates, including veterans of Iraq and Afghanistan. Such is the sense of impending doom among House Republicans that their leader, John Boehner, told CNN on Jan. 23 that he could render a verdict on whether the latest Bush Iraq strategy is “working” in a mere “60 to 90 days.”

In the Senate, even the rumor of a tough opponent is proving enough to make some incumbents flip overnight from rubber-stamp support of the White House’s war policy to criticism of the surge. Norm Coleman of Minnesota started running away from his own record the moment he saw the whites of Al Franken’s eyes. Another endangered Republican up for re-election in 2008, John Sununu of New Hampshire, literally sprinted away from the press, The Washington Post reported, rather than field questions about his vote on the nonbinding resolution last week.

My own guess is that the Republican revolt will be hastened more by the harsh reality in Iraq than any pressure applied by Democratic maneuvers in Congress. Events are just moving too fast. While senators played their partisan games on Capitol Hill, they did so against the backdrop of chopper after chopper going down on the evening news. The juxtaposition made Washington’s aura of unreality look obscene. Senator Warner looked like such a fool voting against his own principles (“No matter how strongly I feel about my resolution,” he said, “I shall vote with my leader”) that by week’s end he abruptly released a letter asserting that he and six Republican colleagues did want a debate on an anti-surge resolution after all. (Of the seven signatories, five are up for re-election in 2008, Mr. Warner among them.)

What anyone in Congress with half a brain knows is that the surge was sabotaged before it began. The latest National Intelligence Estimate said as much when it posited that “even if violence is diminished,” Iraq’s “absence of unifying leaders” makes political reconciliation doubtful. Not enough capable Iraqi troops are showing up and, as Gen. Peter Pace told the Senate last week, not enough armored vehicles are available to protect the new American deployments. The State Department can’t recruit enough civilian officials to manage the latest push to turn on Baghdad’s electricity and is engaged in its own sectarian hostilities with the Pentagon. Revealingly enough, the surge’s cheerleaders are already searching for post-Rumsfeld scapegoats. William Kristol attacked the new defense secretary, Robert Gates, for “letting the Joint Chiefs slow-walk the brigades in.”

Washington’s conventional wisdom has it that the worse things go in the war, the more voters will want to stick with the tried and true: Clinton, McCain, Giuliani. But as Mr. Obama reminds us, “Nobody had better Washington résumés than Dick Cheney or Donald Rumsfeld.” In the wake of the catastrophe they and their enablers in both parties have made, the inexperienced should have a crack at inheriting the earth, especially if they’re clean.

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