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May 8 - 14, 2008
Life is short, but campaigns are long. And during the course of them, each candidate will have impressive and pathetic moments. But underlying the highs and lows, there are the fundamentals. The fundamentals of the Obama-Clinton race were on display Sunday morning. Hillary Clinton went on “This Week With George Stephanopoulos” incarnating her role as the first Democratic Rambo. The Clinton campaign seems to want to reduce the entire race to one element: the supposed masculinity gap. And so everything she does is all about assertion, combat and Alpha dog dominance. A few questions in, Clinton rose from her chair and loomed over Stephanopoulos. The country hasn’t seen such a brazen display of attempted middle-aged physical intimidation since Al Gore took a walkabout on the debate stage with George Bush. It was like watching someone get elbowed in a dark alley by their homeroom teacher. But her attempt to take over the show was nothing compared with her attempt to dominate the truth. For the first 30 minutes, she did not utter a single candid word, including, as Mary McCarthy would say, “and” and “the.” She peddled her sham gas-tax holiday and repeated her attempt to blame Indiana’s job losses on outsourcing and NAFTA. Stephanopoulos asked her to name a single economist who thinks a tax-holiday plan would work, and the daughter of Wellesley and Yale took the chance to shove the geeks into their lockers: “I’m not going to put my lot in with economists.” When Stephanopoulos pointed out that Paul Krugman, a New York Times columnist, has raised doubts about the plan, Clinton lumped Krugman in with the Bush administration and said she wasn’t going to listen to the people responsible for the last seven years. This wasn’t just shameless spin, it was shamelessness with a purpose. Clinton signaled that she wasn’t going to concede even an inch to the vast elitist conspiracy. She wasn’t going to feel guilty about ignoring the evidence. She was going to stomp on it, flay it and leave it a twisted mass of jelly quivering on the ground. She was going to perform the primordial duty of an alpha dog leader -- helping one’s own. Barack Obama gave off an entirely different vibe
on “Meet the Press.” His campaign has been in the doldrums for the past few months. He’s never come up with an explanation about how he would actually transform politics, and his conventional substance is beginning to overshadow his unconventional style. But, as Sunday’s contrast made clear, Obama still seems like a human being. He still seems to return each night to some zone of normalcy where personal reflection lives. He wasn’t fully candid when answering questions about the Rev. Jeremiah Wright, but there are some inner guardrails that prevent the spin from drifting too far from the truth. Thoughtful and conversational, he doesn’t seem to possess the trait that Clinton has: automatically assuming that critics are always wrong. Obama still possesses his talent for homeostasis, the ability to return to emotional balance and calm, even amid hysteria. His astounding composure has come across as weakness in the midst of combat with Clinton, but it’s also at the core of his promise to change politics. He vows to calm hatred and heal division. This contrast between combat and composure defines the Democratic race. The implicit Clinton argument is that politics is an inherently nasty business. Human nature, as she said Sunday, means that progress comes only through conquest. You’d better elect a leader who can intimidate. You’d better elect someone who has given herself permission to be brutal. Obama’s campaign grows out of the longstanding reform tradition. His implicit argument is that politics doesn’t have to be this way. Dishonesty and brutality aren’t inevitable; they’re what gets in the way. Obama’s friend and supporter Cass Sunstein described the Obama ideal in The New Republic: “Obama believes that real change usually requires consensus, learning and accommodation.” That’s regarded as naive drivel in parts of Camp Clinton. Campaign issues come and go, but this is a thread running through the race. One believes in the raw assertion of power, the other the power of communication. They are imperfect messengers for their creeds. Clinton rails against “Wall Street money-grubbers,” but her policies are often drawn from the Wall Street wing of the party. Obama talks about postpartisan compromise in the abstract, but rarely in the particular. Still, amid the storms of the presidency, their basic worldviews would shape their presidencies. Obama is instinctively a conversationalist and community-mobilizer. Clinton, as she says, will fight and fight. If elected, she’ll have the power to take the Hobbesian struggle she perceives, and turn it into remorseless reality.
WASHINGTON -- Some readers resented The Washington Post for publishing an Associated Press photograph of a critically wounded Iraqi child being lifted from the rubble of his home in Baghdad’s Sadr City “after a U.S. airstrike.” Two-year-old Ali Hussein later died in a hospital. As the saying goes, the picture was worth a thousand words because it showed the true horrors of this war. Neither side is immune from killing of Iraqi civilians. But Americans should be aware of their own responsibility for inflicting death and pain on the innocent. The Post’s ombudsman, Deborah Howell, said about 20 readers complained about the photo, while a few readers praised the Post for publishing the stark picture on page one. Some mothers said they were offended that
their children might see the picture, though one wonders whether their youngsters watch television and play with violent videos in a pretend world. From the start of the unprovoked U.S. “shock and awe” invasion of Iraq on March 20, 2003, the government tried to bar the news media from photographing flag-draped coffins of American soldiers returning from Iraq. A Freedom of Information lawsuit forced the government to release pictures of returning coffins. Howell said some readers felt the photo of the Iraqi boy was “an anti-war statement; some thought it was in poor taste.” Well, so is war. Howell said her boss, Executive Editor Len Downie, “is cautious about such photos.” “We have seldom been able to show the human impact of the fighting on Iraqis,” Downie was quoted as saying. “We decided this was a rare instance in which we had a powerful image with which to do so.” It’s unclear to me why this was deemed to be Continued on Page 46
Knock on wood: it’s possible, though by no means certain, that the worst of the financial crisis is over. That’s the good news. The bad news is that as markets stabilize, chances for fundamental financial reform may be slipping away. As a result, the next crisis will probably be worse than this one. After the financial crisis that ushered in the Great Depression, New Deal reformers regulated the banking system, with the goal of protecting the economy from future crises. The new system worked well for half a century. Eventually, however, Wall Street did an end run around regulation, using complex financial arrangements to put most of the business of banking outside the regulators’ reach. Washington could have revised the rules to cover this new “shadow banking system” -but that would have run counter to the market-worshiping ideology. Instead, key officials, from Alan Greenspan on down, sang the praises of financial innovation and pooh-poohed warnings about the growing risks. And then the crisis came. Last August, as investors began to realize the scope of the mortgage mess, confidence in the financial system collapsed. We’ve been lucky to have Ben Bernanke as Federal Reserve chairman during these trying times. He may lack Greenspan’s talent for impersonating the Wizard of Oz, but he’s an economist who has thought long and hard about both the Great Depression and Japan’s lost decade in the 1990s, and he understands what’s at stake. Bernanke recognized, more quickly than others might have, that we were in a situation bearing a family resemblance to the great banking crisis of 1930-31. His first priority, overriding every other concern, had to be preventing a cascade of financial failures that would cripple the economy. The Fed’s efforts these past nine months remind me of the old TV series “MacGyver,” whose ingenious hero would always get out of difficult situations by assembling clever devices out of household objects and duct tape. Because the institutions in trouble weren’t called banks, the Fed’s usual tools for dealing with financial trouble, designed for a system centered on traditional banks, were largely useless. So the Fed has cobbled together makeshift arrangements to save the day. There was the TAF and the TSLF (don’t ask), there were credit lines to investment banks, and the whole thing culminated in March’s unprecedented, barely legal Bear Stearns rescue -- a rescue not of Bear itself, but of its “counterparties,” those who were on the other side of its financial bets. It’s still far from certain whether all this improvisation has resolved the crisis. But it was the right thing to do, and for the moment things seem to be calming down. So, two cheers for Bernanke. Unfortunately, his very success -if he has succeeded -- poses another problem: it gives the financial industry a chance to block reform. We now know that things that aren’t called banks can nonetheless generate banking crises, and that the Fed needs to carry out bank-type rescues on their behalf. It follows that hedge funds, special investment vehicles and so on need bank-type regulation. In particular, they need to be required to have adequate capital. But while our out-of-control financial system has been bad for the country, it has been very good for wheeler-dealers, who collect huge fees when things seem to be going well, then get to walk away unscathed -- indeed, often with large severance packages -- when things go wrong. They don’t want regulations that would stabilize the economy but cramp their style. And now that the financial clouds have lifted a bit, the pushback against sensible regulation is in full swing. Even the Fed’s very modest proposal to curb abusive mortgage lending with new standards is under fire, and there are signs that the Fed may back down. Maybe a Democratic sweep can revive the cause of financial reform, but it looks as if we’ll soon return to business as usual. The parallel that worries me is what happened a decade ago, after the hedge fund Long-Term Capital Management failed, temporarily causing the whole financial system to freeze up. Through luck and skill, that crisis was contained -- but rather than serving as a warning, the episode nurtured the false belief that the Fed had all the tools it needed to deal with financial shocks. So nothing was done to remedy the vulnerabilities the LTCM crisis revealed -- the same vulnerabilities that are at the heart of today’s much bigger crisis. And if we don’t fix the system now, there’s every reason to believe that the next crisis will be bigger still -- and that the Fed won’t have enough duct tape to hold things together.