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Why Democrats won't want to oppose Samuel Alito
Tweet Share on Facebook October 31, 2005 Comment (31)George W. Bush has nominated Judge Samuel Alito of the U.S. Court of Appeals for the Third Circuit to the Supreme Court. Judge Alito has a strong record academically and in government. He was U.S. attorney for New Jersey, a high-pressure job in a state where corruption is—how shall we say this?—not unknown. To be confirmed for that position, Alito would have to have been approved by New Jersey's two Democratic senators at the time, Bill Bradley and Frank Lautenberg, the latter of whom is again serving in the Senate. From my knowledge of those two men, I believe they would not have approved Alito unless they were convinced that he was (a) highly competent, (b) completely honest, and (c) not likely to use his power as a prosecutor for political purposes. They certainly understood the importance of the job and would not, I think, have given their approval lightly. Here's what Lautenberg and Bradley said about Alito's appointment as U.S. attorney.
Conservatives who opposed the nomination of Harriet Miers were, as everyone expected, delighted by the choice of Alito. So was Hugh Hewitt, the conservative radio talk-show host, blogger, and lawyer, who steadfastly supported Miers. I think it's safe to predict that all Republican senators will support Alito, with the possible exception of Olympia Snowe. I don't think Lincoln Chafee will oppose him, for reasons that I'll get to later in the post.
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The new conservative leader
Tweet Share on Facebook October 31, 2005 Comment (23)Britain's Conservative Party members will be voting in mail ballots for a new party leader starting soon. The two choices are David Cameron, the 39-year-old shadow education secretary, and David Davis, the 56-year-old shadow home secretary. Davis was the early favorite but delivered what has been considered a disastrous speech at the party conference in Blackpool earlier this month. Cameron delivered, without text or notes, what was widely considered a dazzling speech, and he has been the heavy favorite ever since. Here's the delicious take on Cameron's rise from Matthew D'Ancona in the Sunday Telegraph. And here's a news story on Cameron's support among Conservative MPs rising to a majority of 100. For those hungry for more information on this race, I recommend prowling through the links on the websites of the Telegraph www.telegraph.co.uk, and the Times of London.
I have a fairly wide acquaintanceship in British politics, and I once sat next to Davis at dinner. He's a bit of a bruiser, the kind of fighter who does well in the roughhouse atmosphere of the House of Commons. He has been on the right (which is to say right) side of key issues for most Conservative MPs and party members—Europe, tax, immigration and asylum, etc. He has an interesting life story: He was raised by a single mother on a council estate (public housing for us) and was successful in business. But like the three previous Conservative leaders—William Hague, Iain Duncan Smith, and Michael Howard—he does not seem to have the kind of charm Tony Blair projects. David Cameron evidently does. He has the sort of upper-class background—Eton, Oxford, married to the daughter of a lord—that analysts of British politics have long thought was a liability in Britain's class-conscious politics. The last Conservative party leader with such a background was Alec Douglas Home, the loser in the 1964 election. But it evidently isn't such a liability anymore. Tony Blair was educated at Scotland's leading "public" (i.e., private) school, Fettes, and at Oxford, and it hasn't hurt him a bit. And it turns out that most of the current Labor cabinet members had posh educations.
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The Rove nonindictment
Tweet Share on Facebook October 28, 2005 Comment (18)For more than two years, mainstream media reporters have been looking forward to an indictment of Karl Rove. They didn't get it today. Reportedly, Rove is still under investigation and not out of jeopardy. He will presumably be expected to cooperate in the Libby prosecution. No one can say with confidence how this will play out.
Even so, the nonindictment of Rove is a victory for the Bush administration. Rove has played a role in this White House that is unique in American history. He has been the president's chief policy adviser and his chief political lieutenant, with full authority to speak for the president on all domestic policy and all political matters. He is a serious student of history and an original thinker of the highest ability on both policy and politics. He is as close to being an indispensable and irreplaceable person in this administration as anyone except the president himself could be.
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The Libby indictment
Tweet Share on Facebook October 28, 2005 Comment (21)Now it's official. Vice President Cheney's chief of staff, Lewis "Scooter" Libby, has been indicted for perjury, making a false statement, and obstruction of justice. Evidently, this is for not testifying that he had heard from Cheney that Valerie Plame was a CIA employee. This is a serious charge. I have long said that I would be astonished if someone as smart and savvy as Libby had testified untruthfully. So I am astonished now. There was nothing legally dubious about Cheney disclosing this to Libby. Both had the highest possible intelligence clearances. So it is puzzling that Libby apparently didn't testify truthfully or fully about this.
Note what Libby was not charged with: violating the Intelligence Identities Protection Act of 1982. To violate that act, the agent whose identity has been disclosed must have been serving abroad within five years of the disclosure. According to a book by Plame's husband, Joseph Wilson, Plame had not served abroad since 1997, more than five years before the 2003 disclosure. So the act was not violated by anyone. This was an investigation of people who were telling the truth about a person, Joseph Wilson, who was telling lies. For background, see my Creators Syndicate column of last week. The Libby indictment raises in my mind the question of whether it is just to indict someone for false statements in the course of the investigation of what was never a crime.
Politically, this is obviously a blow to the Bush administration. Libby was an important White House aide who played a key role on foreign policy.
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Oil money for the Iraqi people
Tweet Share on Facebook October 17, 2005 CommentTamara Chalabi has written an article urging that oil profits should be distributed to the Iraqi people. Chalabi is described on the website as an independent scholar in London. She's the daughter of Ahmed Chalabi, the often vilified head of the Iraqi National Congress and now cabinet minister in the Iraqi government. Chalabi played a part in putting Section 109, declaring oil the property of the Iraqi people, into the Iraqi constitution. I think people should stop vilifying him and start regarding him as a farsighted statesman.
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The elections in Iraq
Tweet Share on Facebook October 17, 2005 Comment (19)I am writing far from Iraq and with less than ideal access to information, but it appears that the elections Saturday were a success. Turnout was higher than in the January elections, and the constitution appears to have been approved by a wide majority. The Sunnis seem to have been split: Two Sunni provinces voted heavily against the constitution, but the vote in other Sunni-dominated provinces appears to have been in favor.
Here's an interesting metric, subject to revision in light of later or better information. There were 347 attacks against Iraqis and Americans in the January elections. There were 13 such attacks in the October election. That's 347 versus 13: a big difference, even if the numbers turn out to be somewhat different. What could account for this?
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Lying as a qualification for office
Tweet Share on Facebook October 14, 2005 CommentEd Whalen, head of the Ethics and Public Policy Center, quotes me in this item on National Review Online's Bench Memos blog as saying that a willingness to lie is an essential quality in a university president these days. The quote is accurate but may seem puzzling to some readers. Let me explain.
One of the things university administrators do these days—I'm thinking primarily of selective universities, but I'm sure it's true of others—is to use racial quotas and preferences in admissions. Only they can't say so out loud. Justice Sandra Day O'Connor's unfortunate opinion in the Grutter case makes this clear. So they have to lie about what they are doing. They lie when they say they don't have racial quotas and preferences: They make sure that a certain percentage of blacks are admitted. They lie when they say that the credentials of blacks admitted are the equivalent of everyone else's: Sadly, they aren't. And everyone knows they are lying about these things. That encourages people to presume that individual blacks at any institution tend to be less qualified than others. I try never to make that presumption and to judge individuals by their demonstrated talents and performance. But I fear others may not.
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Delphi
Tweet Share on Facebook October 14, 2005 Comment (14)The bankruptcy of Delphi is hometown news for me. When I visit my home state of Michigan, I often drive by the Delphi headquarters on I-75 in Troy. Delphi was spun off from General Motors in 1999; as I understand it, it used to be GM's Delco parts division. Delco, by the way, was the company acquired by GM that brought to the larger corporation Alfred P. Sloan, the longtime GM chairman and architect of what became the dominant U.S. auto company from the 1920s to the 1960s. Sloan's book, My Years With General Motors, was long considered the primer of how to organize and manage a large manufacturing corporation.
When I was growing up in the Detroit area, GM was so successful that people speculated it was trying to hold down sales to protect itself from a government antitrust suit. Now GM is in serious trouble, for the same reasons that Delphi has gone into bankruptcy: the huge legacy costs of pensions and healthcare plans for retirees and the high wages and generous healthcare plans secured by the United Auto Workers in their contracts with GM and Delphi in the decades since World War II. Thomas Bray explains in the Detroit News how these costs have become unsustainable. Harold Meyerson, the left-wing columnist who would like to see unions expand, also provides in the Washington Post a thoughtful take on the situation.
"The Bankruptcy of the Industrial Welfare State" is the headline of Bray's column. How did this come to pass? Most of the leaders of the UAW and the Big Three companies who negotiated these generous contracts were very smart men, and they thought that the costs could be passed along to consumers. For the two decades immediately after World War II, they were, because the Big Three auto companies had no effective competition. Then sales of imported cars started rising. The Big Three executives can be criticized for not responding to this challenge. They, like the UAW, sought to wall themselves off from competition by getting the government to limit imports or to require certain percentages of "domestic content" in autos sold in the United States. But those policies triggered a response by Japanese, German, and ultimately Korean firms: They built plants in the United States, almost all of them with nonunion workforces. Pay was generous, but the costs imposed on companies were much less than those imposed by UAW-Big Three contracts. The workforces of the Big Three are much smaller than they once were, so the companies have many more retirees to provide for than active workers.
In his book The New Industrial State, economist John Kenneth Galbraith argued that companies like the Big Three could stimulate, through advertising, as much demand for their products as they wanted and that high capital costs protected them against competition. That was arguably true in 1967, when Galbraith's book was published. It ceased to be true, at least for the Big Three, shortly afterward. Delphi's bankruptcy raises the question of whether its pension costs will be handed off to the government-backed Pension Benefit Guaranty Corp., as the pension costs of so many steel companies and airlines have been. And it also raises the question of whether GM, Ford, and Chrysler will go into bankruptcy and hand off their pension costs to the PBGC. Such things were unthinkable in the Detroit I grew up in. The era of Big Three dominance seemed sure to go on and on forever. Now that time seems long gone.
The lesson: In a dynamic economy, it's a bad idea for individuals to depend entirely on one large corporation. Large corporations can get smaller.
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Opinion on Iraq
Tweet Share on Facebook October 14, 2005 CommentGreenspan's Olympian view of the economy over decades and even centuries is surely worth pondering. The Economics 1 I learned at Harvard in 1964 said that Keynesian economics had all the answers: The course of progress in history is to move from less to more government regulation and government manipulation of the private sector economy, and today (that is, 1964), we have figured out just how to manipulate it.
Ten years later it was apparent that all that was wrong; but it wasn't apparent how the economy or economic policy could be fixed so as to perform better. The answer, according to Greenspan, turned out to be: Let free markets work with less regulation, and in time they would produce better financial mechanisms and information technologies. Interestingly, a case could be made from his remarks that the political marketplace worked, if unknowingly, to help produce these results. Greenspan made the point that presidents and politicians of both parties have moved toward deregulation. True: Jimmy Carter and Edward Kennedy played major roles in airline deregulation, for example. Ralph Nader was a force for deregulation, as were market economists like Milton Friedman. Lower taxes were largely a Republican contribution but not entirely: Bill Bradley and Dan Rostenkowski played critical roles in the 1986 tax law lowering rates and eliminating preferences. The political marketplace was sending signals that the results of heavy regulation and high taxation weren't acceptable, and politicians, Democrats as well as Republicans, responded to the signals in the political marketplace, as they usually but not always do.
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Can we measure resilience?
Tweet Share on Facebook October 13, 2005 Comment (96)Federal Reserve Chairman Alan Greenspan spoke yesterday at a breakfast sponsored by the National Italian American Foundation at Georgetown University. I was in attendance. Greenspan said gracious words about NIAF and presented a fascinating long-term view of changes in the economy. He spoke in clear and comprehensible language here, as opposed to the complex Greenspan-speak he employs when testifying before Congress on short-term trends.
In my more than 18 years at the Federal Reserve, much has surprised me, but nothing more than the remarkable ability of our economy to absorb and recover from the shocks of stock market crashes, credit crunches, terrorism, and hurricanes–blows that would have almost certainly precipitated deep recessions in decades past. This resilience, not evident except in retrospect, owes to a remarkable increase in economic flexibility, partly the consequence of deliberate economic policy and partly the consequence of innovations in information technology.
