The mantra in Washington these days is "jobs, jobs, jobs." Then, today, for a brief moment, the focus shifted -- to Jobs.
The reaction to the death of Steve Jobs has been remarkable for both what it says about the man and our times. But it is also resonant because of a message it has sent that has yet to be received, it seems.
It has already been observed that it is stunning to see such a seemingly heartfelt, widespread sense of loss and emotion for the death of an American CEO at a moment when Americans are finally and understandably taking to the streets to protest what is seen by demonstrators to be the hostile take-over of the U.S. economy by big business interests.
Somehow, Steve Jobs transcended his role as a business man in much the same way that for many the products his company produces have transcended being seen as mere devices, workaday slabs of technology. Some of that was due to great marketing, of course. But there's nothing inherently wrong with that. Marketing does not work if it doesn't ring true or if the promises made to consumers are not kept by manufacturers. And some of the Steve Jobs difference was due to a willingness to set aside knowledge of the company and its founder's missteps or hard-ball, sometimes, arrogant business tactics. But again, such facts are not easily set aside unless they are overshadowed by other factors.
In the case of Jobs, what set him apart was not just that he was a visionary or that he was successful. There are plenty of other tech titans who made billions who could drop dead tomorrow with nary a notice in the paper or a teardrop being shed outside their immediate families. In some cases, you might even hear the faint sound of cheering within their immediate vicinity.
It was not just that he was a good-looking, thoughtful, articulate spokesperson who combined just the right elements of geek and master of the universe, of everyman and of being the Willy Wonka of the digital era. Because good spokespeople for industries come and go, yet how many of even the very best would have prompted local television stations to pre-empt programming to run announcements of their demise as did my local station in DC, last night?
No, part of what set Steve Jobs apart was that he delivered on a promise that was bigger than any he or Apple or his industry could have made. He delivered on the promise of the future.
Among the most unsettling aspects for this particular observer of Jobs obituaries are the line that reads "1955-2011." Because 1955 doesn't seem that long ago to me. It is, in fact, the year I was born and I for one, am resolutely convinced that I am not old enough for an obituary. But that shared birth year also lets me understand a bit of where Jobs was coming from. It came from a childhood marked by grand promises associated not just with living in the richest and most powerful country in the world at the time of seemingly never-ending ascendancy but with serial technological breakthroughs. There were spaceflights and satellites and color televisions and 8-track tapes and polyester and TV dinners and Tang and oral polio vaccines and computers the size of your high school auditorium. And when there was a lull in innovation there was the Jetsons or "Time Tunnel" or "Star Trek" to double down on the promises.
And then we grew up and we waited for the flying cars to come.
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For years the hackneyed joke about Brazil was that it was the country of tomorrow and always would be. But almost a decade ago, in the wake of the reforms of the Cardoso administration, and then thanks to the remarkable presidential tenure of Luiz Inacio "Lula" Da Silva and the industry and enterprise of the Brazilian people, the joke was overtaken by events. As investors, CEOs, journalists and most of the world's leading powers have recognized, Brazil has arrived.
While U.S. leaders like Presidents George Bush and Barack Obama have acknowledged the change, many in the U.S. policy community remained holdouts or skeptics. Yes, Brazil was on the rise they said, but they always found a way to qualify their views, to establish one criteria or another that Brazil would have to meet before it was finally seen as a "first-class power." While Asia specialists embraced the rise of China and India and quickly began to remake policy based on changing power relationships, Latin specialists clung to the past, to old formulations and prejudices.
In the eyes of these living museum pieces of Washington's small, inbred Latin American affairs community, Brazil might be the country of tomorrow, it might even be the country of later on today, but we would be sticking with the policies of yesterday until further notice.
Today, the Council on Foreign Relations (CFR) has issued a new task force report on U.S.-Brazil relations that goes a long way toward breaking with the past by recommending the U.S. move toward a new policy stance with regard to Brazil. The central point of the report is that Brazil must be liberated from the Latin policy barrio and viewed as one of the most important global powers of today and of the century ahead.
Here at Les Recontres Economiques d'Aix-en-Provence we are ostensibly discussing "The States of the World" but in reality the buzz around the event is about the global economic ugly pageant. Although much of the conversation among delegates --whether at the venerable conference sites like the law school of the Universite Paul Cezanne or the local outpost of Sciences Po -- focuses on the harrowing state of the Eurozone, one can regularly hear concern expressed for the other contestants in the current perverse competition among the world's economies.
To understand the competition, you just have to understand the old joke about the group of friends whose picnic is disturbed by a hungry grizzly bear. As the friends bolt from their campsite, one stops to put on his sneakers. The others ask what he is doing, worried that he will never be able to outrun the bear if he stops. The one in the sneakers observes as he starts sprinting away, "I don't have to outrun the bear, I just have to outrun the rest of you."
So it is now with the global economic ugly pageant. While most of the major economies of the world are spluttering and the possibility of an unprecedented geoeconomic disaster remains palpably real, what money there is does have to go somewhere. That place is likely to be the least ugly of the world's economies. In other words, absent a true safe haven, capital will seek the safest haven of those available. It's one reason the dollar has done fairly well recently, for example. While the U.S. government seems to do everything in its power to screw things up economically, investors buy dollars because the managers of the world's other big currencies, the Europeans and the Japanese, are screwing things up worse.
The question now is will our "luck" remain the same going forward? How will the world's economies fare in the next round of this contest? Here's the current betting line based on my scientific eavesdropping on conversations here in Provence, appropriate discounting for self-interest and biases of the speakers and my own reading of the tea leaves that get floated as economic news in the world's newspapers. (Note: I am focusing only on national and regional economies here. Suffice it to say that almost certainly the big losers of the coming months -- whether policymakers accidentally blow up the world economy or they dodge disaster through a judicious combination of austerity and stimulus -- will be the poor. They have no voices advocating for them (as do, for example, the makers of private jets currently lobbying to keep the corporate tax breaks their purchasers receive under present U.S. law). Austerity programs will squeeze them further. Disaster will crush them. And almost certainly the biggest winners will be big corporations and the super-rich who will venue-shop and use their access to cash to buy up devalued assets including fire-sales among privatizing formerly state-owned bric a brac like roads, ports, powerplants and water rights.)
Scrooge. The Grinch. Critics calling out the cinematic deficiencies of "Love Actually." Christmas humbuggery is a cliché.
I however, am a New Year's curmudgeon. The holiday is a fraud celebrated by idiots. Our arbitrary slicing of time into comprehension-sized chunks and then celebrating the false distinctions between December 31 and the first of January is a big honking nonsense.
The fact that this ersatz holiday then motivates people to put on silly hats and drink to excess to celebrate the non-event event compounds the ridiculousness of it all and makes it dangerous to leave the safety of your couch. The only thing that adds any gravity to the activity at all is America's tradition of spending part of the evening watching Dick Clark slowly losing body functions on live national television. (I sympathize with the man and admire his courage. But he seems to be crowning a lifetime of cashing in on his bad taste with an ultimate grotesqueness: a multi-year, hard-to-watch reality show about his own demise.)
That said, you don't have to be a drunken lunatic who spends 10 hours trapped in the freezing cold in Times Square waiting for Snooki to be dropped in a glass hamster ball to add to the absurdity of this annual ritual about nothing. No, even very serious types like commentators and still grave but less credible types like bloggers regularly mark the holiday in ways that make them bigger laughingstocks than the insurance salesmen with lampshades on their heads who made the holiday famous: They make predictions.
Invariably the predictions do not come true. There is a charming irony in this: celebrating a non-event through the ritual listing of other soon-to-be non-events. (The New York Times has even run an entertaining discussion forum this week on why we seem to need predictions and how hard they are to make.) It is all a cousin to our penchant for marking the "new" year with resolutions to distinguish the year from that which came before it -- and which are all soon forgotten in ways that should remind us of the falseness of such distinctions.
But while I may condemn the holiday -- which is why on New Year's Eve I will sit here in Paris in our rented digs in the Sixth Arrondissement listening to the nearby revelry on the Boulevard Montparnasse and the Boulevard Raspail while quietly sipping Diet Coke and irritating my very patient wife just as I do each and every other night -- I am not so egotistical as to think my protests can undo the culturally embedded traditions of the season. I also don't think I can ignore the requests of the editors at FP any longer. So I too will now offer some New Year's predictions.
However, in an effort to avoid the kind of pitfalls of which I am critical, I will skip right over the dubious maybes of most pundits and cut right to what you want to know the most: I will list only those things that are absolutely certain to happen in 2011.
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Every school child knows that the U.S. government has three branches: the Executive, the Legislative, and the Judicial. And, as recent international test results have demonstrated, every school child is wrong.
Because there is a fourth branch of government that operates alongside the other three and plays a central and increasingly active role in the system of checks and balances the founders designed to keep any one group from getting too much power.
This fourth branch however, has been gaining power in ways that the forefathers never imagined -- largely because they didn't conceive of it in their political calculus. You see they were focused on mechanisms that were created to reflect the will of the people and to advance their interests. This mechanism was created independently and serves only a comparative handful of individuals.
But make no mistake, it is as essential a player as the Supreme Court, either house of Congress or the White House. And when those players stumble or fail to provide leadership, this fourth branch quickly and decisively fills the void. Indeed, it has special powers that trump presidential vetoes, filibusters, judicial reversals, and all the other tools given government officials. It advises and in the end, it provides the necessary consents. It deliberates and decides and reserves the right to change its mind. It is not only where the buck stops, it is where it starts and where it goes round and round till it comes out here.
It's the markets and if you merely take the time to look over the news of this week and last you can see it flexing its muscles and sending a message that it is prepared not only to contradict governments and institutions, it is, if necessary prepared to topple them.
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We are not in Kansas anymore. More importantly, Kansas is not even where it once was.
Once upon a time and in the minds of most living Americans, Kansas was more than just a synonym or a metaphor for America's heartland, it was the actual geographic mid-point of the United States. You could debate whether the exact location deserving of this honor was closer to Lebanon or Grenola, but at the end of the day, all would agree that by virtue of the power and position of the United States, somewhere out there in the middle of nowhere was the center of the world.
No more. America may be the richest and most powerful nation on earth. But the world's economic center of gravity is shifting away from Kansas much more rapidly than anyone had any reason to expect it would even a decade or so ago. (I know this for a fact -- as a senior economic official in the Clinton Administration who helped put together and run the first U.S. inter-agency effort focused on the world's largest emerging markets, I remember how officials would smile patronizingly and roll their eyes, "Yes, China, India, Brazil, yes... important, but not in our lifetimes.")
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In today's Financial Times, Gideon Rachman has written a compelling piece called "Sweep economists off their throne." You can guess at the substance from the title, but the thrust is that Rachman was trained as a historian with a resulting bias toward basing conclusions on things that actually happened and that he has grown tired of the claims of economists that theirs is a field that "resembles hard science such as physics or chemistry" concluding, "maybe it is time for an alternative to the brash certainties, peddled by those pseudo-scientists, otherwise known as economists."
His use and reuse of the term "science" underscores just how abused it is by economists who claim rigor and scientific method but regularly produce work that is seldom more than guess-work clouded by politics. Evidence is everywhere to support this view, which is precisely why so many economists seem to have missed the point given that evidence-based analysis has never been their forte. If it was, perhaps there might be a consensus among them on even one of the great economic issues of our time. But there is not.
Take this weekend's suggestion by President Obama that the U.S. ought to spend more on infrastructure as a way of strengthening the U.S. economy. He was immediately assailed by Republican economists and their spokespeople for going back to stimulus approaches that have already proven to be failures (see the editorial in today's Wall Street Journal.) Yet over the weekend, we heard, for example, from CNBC reporter Erin Burnett on "Meet the Press," that in speaking to Wall Street economists she found widespread agreement that the stimulus program had actually helped avoid even more dire outcomes for the U.S. economy than we have already seen.
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This weekend the Obama Administration will send a team to China headed by the somewhat unlikely duo of Larry Summers, head of the National Economic Council, and Tom Donilon, deputy national security advisor. The purpose is to send a clear message that the U.S. is approaching its relations with China strategically, with a view that integrates the full range of economic and security concerns.
While such trips are old hat for Summers, the journey represents a bit of a change of pace for Donilon, the inside guy who is credited with having done a great job making sure the policy process trains have been running on time within the National Security Council. Some in Washington are buzzing that this is a profile- and skill-raising trip intended to make Donilon a better candidate to replace National Security Advisor James L. Jones should Jones decide to depart, as many expect he will. Others grumble that the trip represents precisely the kind of "operational" role for the NSC and NEC that many cabinet departments have long thought should be out of bounds for White House policy coordinators.
But beyond the Washington gossip the trip has caused, the juxtaposition of economic and security concerns offers an illustration of an often over-looked fact -- the centrality of economic issues to current U.S. national security concerns. In China, the tricky calculus is fostering collaboration on security issues from North Korea to Iran in the face of political pressure back home to press Beijing harder on issues like currency valuation and unfair competitive practices (especially those associated with pressuring foreign firms to transfer proprietary technologies).
The U.S. has never been especially effective at coordinating its multiple interests in China so that pressure in one policy area produces progress in another -- or even simply avoids causing setbacks. So this trip, in concept at least, represents a step in the right direction -- at least if Congress doesn't undercut the administration's efforts by, for example, drafting its own legislation on currency issues.
But China is just one of a host of current hotspots where Summers, Geithner, and the international economic team are playing a central role on national security issues.
For example, in Afghanistan, the story of the week turns on the amazingly brazen behavior of the Karzai gang in trying to pressure the United States into bailing out a clearly corrupt and mismanaged bank in which President Hamid Karzai's brother, Mahmood Karzai, is the third largest shareholder. Mahmood has publicly called for a bailout even though his affiliation with a bank through which U.S. funds flow to Afghan security forces compromises both him and the president. Both remain unabashed, however, behaving like the proverbial kids who murder their parents and seek the mercy of the court on the grounds that they are now orphans. So the United States is in a pickle: Step in and support the Afghan kleptocracy and its culture of corruption or stand on principle (and law), and run the risk that the bank falters. It's not a situation that General David Petraeus can handle, but how the economic team manages it will have direct ramifications for him.
In the same way, some of the most sensitive concerns regarding Pakistan turn on economic policy. Will the Zardari government pump too much cash into the economy to deal with the aftereffects of the devastating flooding, and risk a major inflationary episode? Or will it introduce price controls and a set of micro economic measures that, if mismanaged, could produce social tensions or even rioting? The wrong mix of policies could plunge the already fractured and battered country into political turmoil and perhaps the reintroduction of military rule.
In talks with the Israelis and the Palestinians, many of the core concerns will turn on how to improve the economic conditions for the Palestinian people. If they can get past initial hurdles, they will, of course, ultimately have to move to a state structure that will enable organic economic growth in a Palestinian state, actually fostering job and wealth creation for people who have lived in an economic no man's land for too long.
In North Korea, it is reported that the administration, conducting high level meetings on the subject this week, is seeking to explore "engagement." In the case of the economically isolated and struggling North, that inevitably will mean economic packages in exchange for gradual normalization of relations or reductions of threats. At the same time, this week, the administration widened sanctions intended to force Pyongyang to give up its nuclear weapons.
In Iran, the core initiative at the moment is making targeted economic sanctions work. In Iraq, the issue is fostering economic growth to help "purchase" social stability. The list goes on. It is clear that wherever the stakes are highest for the United States in the world, even as military and diplomatic initiatives garner most of the attention, behind the scenes much of the most critical work is being undertaken by international economic officials.
It is interesting to note in this respect that the responsibility for conceiving and coordinating most of these activities lies in the White House to a much greater degree than it does with military or diplomatic initiatives. The White House team on these issues is excellent. But in the end, these functions are so fundamental that the real leadership capabilities need to be cultivated elsewhere.
The economic team at the State Department could and should play a greater role in this respect; Undersecretary for Economic Affairs Robert Hormats is a talented and experienced official. As I have written before, State also could and should develop a dramatically enhanced capability when it comes to emergency economic intervention -- pre- or post-crisis. And all the other economic agencies need to be prepared to collaborate on this, not on an ad hoc basis but through a permanent program promoting cross-training and what the military might call inter-operability. Call it an economic rapid response capability -- or call them economic green berets.
We need people we can drop into critical situations and help manage them with an eye to our security and political needs rather than traditional purely economic metrics. That's a critical role for which development officials are ill-suited, and we still don't really have the fully developed institutional structure we need to support it.
Looking at the issues faced by the United States today, while one can't help but admire much of what is being done, the strategic side of the international economic agenda is such that it warrants some real thought about how and with whom we should be meeting such challenges in the future.
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"Wait a minute..."
Those were allegedly the final words of Pope Alexander VI back in August of 1503. I was thinking of fat, old, syphilitic, corrupt, murdering, adulterous Alexander just this morning. This particular Pope, known before his papacy as Rodrigo Borgia, who had so many mistresses he makes modern America's politicians and talk show hosts look chaste by comparison, is also distinguished by the fact that he was the father of, among many others, Cesare and the notorious Lucrezia Borgia. (To give you a taste for the man, upon becoming Pope he annulled his daughter's previous marriage so he could marry her off in a lavish Vatican ceremony to a relative of one of the cardinals who supported his papacy even as rumors circled of her incestuous relationship with one of her brothers. And the Heene family thought they had what it takes to make a good reality show...)
I thought of old Rodrigo as I flipped through a pile of clippings that I had set aside during the past couple of days. I started collecting the stories last week. The first were clippings about the record round of financial community bonuses in the U.S. and in the U.K. Then, as all this was happening, was Goldman Sachs' CEO Lloyd Blankfein's FT op-ed calling for financial reform. As I mentioned before I found the juxtaposition uncomfortably calculated.
A couple days later, there was the story announcing that former Goldman Sachs' VP Adam Storch was being named Chief Operating Officer of the "new and improved" SEC enforcement division. I have no doubt that Mr. Storch is an excellent fellow and a perfect choice ... other than the fact that he worked at Goldman. Does anyone think about the optics of these things? Or more than the optics, do they ever consider just how genuinely inappropriate such a hiring might be?
Of course, that's a rhetorical question. Some people do think about it. Just not people doing the hiring in the administration. Hence the articles in my pile of clips about the big bonuses that senior advisors to Tim Geithner got from big Wall Street houses prior to signing up to help devise the plans to "fix" Wall Street. I know some of these guys very well, consider them friends, consider them eminently qualified to be doing their jobs ... and yet, something gnaws at me about all this, an insensitivity on the part of the people who were putting together the administration team about what was really at stake in the financial crisis. It seems they felt the issue was more fixing the immediate problem than it was fixing the enduring problems in a system that once again has Wall Street executives lighting cigars with hundred dollar bills while unemployment hits record levels (see Mort Zuckerman's strong piece on this in today's FT) and home foreclosure are forcing former homeowners to live on the streets as never before. In any event it seems like they were really stopping to ask whether something big had changed ... or needed to.
Paul Krugman gets it, has all along and has written about it again in today's Times. Frank Rich, in yesterday's Times wrote a column capturing some of the anger that people feel about the power of Goldman and the other big banks and the utter unwillingness of Washington to do anything other than offer the occasional talk show tsk-tsk in response to the current return to profligacy (or the return of big lenders like Citi and Bank of America to losses after a momentary, bailout induced spate of profits).
Meanwhile, John Harwood in the Times writes about Larry Summers' wise silence on sensitive economic questions while failing to go further and ask why it was that this week's tsk-tsking assignments went to Rahm Emanuel, David Axelrod, and Valerie Jarrett -- successors in function to the troika that once ran Ronald Reagan's White House (James Baker, Michael Deaver and Ed Meese). On the one hand the question is interesting because it leads one to other questions, like why the folks from the president's morning economic briefing who are being most prominently rolled out are not actually the ones who are the economic professionals? Could it be that the administration political brain trust feels the economic team has lost too much credibility by their minimalist, go-slow approach to reform? I think that would be a miscalculation because the future effectiveness of Geithner and Summers will depend on their being seen as the architects of substantially (and accelerating) reforms.
(Of course another question raised by the appearance of the Big Three on the Sunday shows is whether or not the administration really is being some so Office-of-the-President centric that it is all head and no arms and legs, kind of like one of those big-brained creatures from outer space or our future that we were led to believe would evolve from societies that didn't require physical exercise. The critique, provided to me this weekend by a prominent diplomat who has lived in Washington a long time, is that the administration has no trouble coming up with ideas or giving speeches but it has yet to put an effective implementation apparatus in place. It is kind of the Marvin the Martian model of governance.)
That particular aside aside, the pile of clippings grew this morning with the Wall Street Journal noting in its particularly "fair and balanced" way that the criticism of Wall Street from Emanuel and Axelrod was more tempered than in the recent past, suggesting that at least as far as the newspaper of record of the financial community was concerned, the White House wasn't too het up about all these fat pay checks. Apparently swine flu worries us but an epidemic of swinishness does not. At least the Journal seems to hope so.
And so, reflecting on all these clips, I started thinking to myself, is it capitalism? Could Michael Moore be right? (That seems so unlikely...) It's troubling to me, a dyed-in-the-wool practicing capitalist. And I'll have to admit I am still a long way from coming to a good answer about just how we have gone wrong and what needs to be done to fix a system that is producing greater inequality than ever and that is so apparently corrupt that even those from whom you expect big reform have either been co-opted or, alternatively, are simply reluctant to toss these particular money changers out of our particular temple (the small "d" democratic one).
But my first instincts are what brought me back to good old Pope Rodrigo the Base and Repulsive. Because it strikes me that the issue isn't capitalism per se. Because 21st Century Wall Street is to capitalism as Pope Alexander VI was to the teachings of Jesus Christ. There was a connection but it was remote and observed more in the breach than in the honoring of the essentially good underlying ideas.
And that's where I take some comfort. It's not that we need a new economic ideology. We're just in dire need of a Reformation. (Although I for one could do without some of the wars, inquisitions, and public executions of the last one.)
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Attention blogosphere: By attacking Hormats, you're going after the wrong man.
Once again, it's time to slow down the blogosphere and wait for the facts to catch up to another story. (I'm starting to conclude that despite all the technical evidence to the contrary, the Internet actually runs on hormones rather than electrons.)
This time the story is about the nomination of Goldman Sachs International Vice Chairman Robert Hormats to be Under Secretary of State for Economic, Agricultural and Energy Affairs and the allegation by several small advocacy groups that he is somehow tainted by some brief comments he made about a Goldman deal that pumped cash into a division of a Chinese company whose parent organization had some ties to bad guys in the Sudan.
The problem is that in going after Hormats, they are likely going after one of the people most likely to be an effective ally for the alleged goal of these groups to further constrain any sort of private funding that might support genocide anywhere in the world.
Now as any reader of this blog knows, I am no fan of the oversized role Goldman Sachs has come to play in shaping economic policy in America. I am on the record as saying that far too many senior Goldman executives have played top roles in the United States government. I am also deeply concerned at the lack of progress the world has made to contain genocide or threats of future genocides. To me, it should -- along with combating the proliferation of weapons of mass destruction -- be a top priority of the entire international security community.
What readers of this brief post should also know is that I have known Bob Hormats for many years and that while we probably should be entering a phase in which we bend over backwards to dial down the number of Goldman appointments, this is certainly a case where an exception is warranted. I'd go further, it is a case where an exception should be actively sought.
Let's frame the question in the words of one of the appointment's critics, journalist Matt Taibbi who wrote the scorching Rolling Stone attack on Goldman that I recommended to readers very recently. He writes:
"You've got to fill a key post at State, and you can't find someone who isn't a former Goldman banker with a controversial human-rights profile? There are an awful lot of people on the earth; why this clown?"
Well, let's take his questions one at a time. First, he suggests Hormats has a controversial human-rights profile. his is clearly a reference to the current dust up in which several small groups including the Genocide Intervention Network, Investors Against Genocide and the Public Accountability Initiative all suggest that Hormats is at fault because in 2000 he made two on the record statements asserting that precautions had been taken in an upcoming PetroChina financing to ensure funds did not go to its parent company CNPC which had dealings in Sudan.
Here's what Hormats said to the Wall Street Journal at the time: "Sudan should not be an issue because of extensive legal firewalls in place to ensure that IPO proceeds are used domestically in China." But later the SEC fined Goldman $2 million for a number of minor securities law violations suggesting they had improperly promoted PetroChina stock including a reference to statements from an unnamed executive who might be Hormats that the SEC felt might have prematurely promoted interest in the stock. The statements in question were allegedly those made to the Journal and to the Washington Post by Hormats concerning the firewalls between PetroChina and CNPC.
As a result of the above and invoking the horrors in Darfur throughout, these advocacy groups have determined that Hormats nomination should be called into question. At least, they suggest, when he comes before the Senate in early September, he should face tough questioning on his views on these issues. I say, by all means question him, because I think this is what they will find:
1. Hormats statements to the press in 2000 were, as such statements always are (and as the SEC acknowledged they were) simply lawyer language provided to Hormats by Goldman attorneys. He was saying what the firm requested him to say. And furthermore, he was not only articulating what the firm saw as the truth but he was reflecting efforts by Goldman to try to keep proceeds of the financing away from operations of CNPC that might impact Sudan. Finally the IPO was, to my knowledge, structured in strict compliance with U.S. sanctions law at the time of filing.
2. That despite the implications in almost all the releases that what Goldman did is somehow connected to Darfur, the financing was in 2000 and the genocide in Darfur did not start until 2003.
3. That Hormats involvement in the deal beyond the statements he was requested to make was virtually nil.
Of course, what they will also find is that Hormats is, sorry Matt Taibi, no clown. First, he probably has one of the most exceptional records of public service of any nominee to high office in this administration. He has served in four different prior administrations for both parties. He has served as both Deputy United States Trade Representative (under Jimmy Carter) and as Assistant Secretary of State for Economic and Business Affairs.
He has managed international economic issues on the National Security Council. He has also got a long background of work on Africa and I know him to be highly sensitive to the issues of the sort raised by these advocacy groups. (He spent a year working on development issues in Kenya and Tanzania.) I have known him over 20 years and I can say also that he is undoubtedly one of the most decent (not to mention intelligent and capable) guys I have ever met in any line of work.
I'm all for going after half-baked appointments of money guys. I do it all the time. But this is actually one of the good guys. My guess is that he would give these genocide groups one of their best advocates in the administration... and that working with an administration with real sensitivities in this area, they could significantly enhance safeguards against all forms of support of genocide.
But there is an easy way to find out. They should ask him during the hearings. And if his answers are as his life's work suggests they will be, they should recognize the wisdom behind this particular nomination and support it without reservation.
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In March, for the third month in a row, more cars were sold in China than in the United States. Admittedly, there are many more Chinese. But this is a sign of a permanent change in the structure of the global auto industry that even an army of car czars will not be able to reverse. Even if we had car czars that actually knew something about the industry. Even if the American auto industry did not think the height of innovation was the reintroduction of a 1960s muscle car for the Vin Diesel crowd like the new(ish) Camaro. (Although even tuners prefer to nitro boost foreign-made vehicles as well illustrated in this week's gearhead superhit, the subtle and heart-breakingly beautiful, Fast and Furious.)
Last week, in the lead story in the New York Times, we also saw that China was actually going to have something like twice as many electric cars as the United States in the next couple years and that the country was poised to lead in electric car technology. While we actually could be competitive on the technology front, the problem we have with electric cars runs deeper. American car owners want longer range, faster, more powerful vehicles than the Chinese (and consumers in many other countries). Sure, I'll take your damn green car, we say helpfully, but only if it is the same as the gas-guzzling, road-rocket I'm used to. Oh, and please be sure it has three rows of seats, a beer cooler in the glove compartment and twin flat panel screens so the kiddies don't have to watch the same episode of Sponge Bob Square Pants (because we don't want them fighting over which life lesson they will gather from their favorite gay underwater kitchen implement).
In other words, our consumers don't look like the consumers in the rest of the world. That's been a challenge to American car makers for some time (the appetite of international consumers for smaller cars led to the rise of the Japanese, European, and later Korean auto industries at the expense of American manufacturers). But with the rise of China and India and other emerging car markets and the more willing embrace of greener standards in everything by Europeans, our consumers are sending a market signal to car makers in the United States that is just completely out of whack with much of the rest of the planet.
Some of that is, of course, due to the success car manufacturers, oil companies and others have had in keeping U.S. mileage standards artificially low and in dragging their feet on efficiency. Some of it may be due to the same auto manufacturers' ability to persuade American men that cars are somehow direct extensions of their penises. (Oddly, I don't know that the reputation of French lovers or other Latin lovers has suffered because they drove Renaults or Fiats...even if it should have. In fact, I know for a fact that the very handsome and irresistible editor of Foreign Policy drives a Smart car that looks like a toaster on a roller skate and yet, still the legions of policy groupies gather each day outside the FP headquarters just to catch a glimpse of him.) But part of it is that American consumers are spoiled and have gigantic rear-ends that don't fit in little tiny car seats. The Obama administration can help to change this (the auto innovation and buying habits parts) with new standards and with incentives for car makers and car buyers to invest in more efficient cars going forward. U.S. consumers will also have a role to play in all this too, of course...they will have to respond to the incentives. (As for the rear ends, all of you now: clench...maintain...release...clench...maintain...release.) But the cultural shift we need can't just stop there. For one thing, it might be helpful if U.S. politicians stopped referring to the Big Three as "the U.S. auto industry," since there are hundreds of thousands of Americans employed by great companies that contribute to American growth like Toyota, Honda, Nissan, Hyundai, Mercedes, and BMW. And who knows, if we took that step, we might actually be a step closer to tuning out the idiot-populism currently clouding this issue such as that by people like noted auto industry economist John Rich (of country music's only economically titled duo Big and Rich). Writes Rich in his current hit "Shuttin' Detroit Down"...
Cause in the real world they're shuttin' Detroit down,
While the boss man takes his bonus paid jets on out of town.
DC's bailing out them bankers as the farmers auction ground.
Yeah while they're living up on Wall Street in that New York City town,
Here in the real world they're shuttin' Detroit down."
Admittedly, this is poetry. Neither Shakespeare nor later day innovators like Bukowski never dared
experiment with anything quite so incomprehensibly moving as "DC's bailing out
them bankers as the farmers auction ground." But the song does have so many flaws you couldn't have hid them all
Underwood's gigantic dress at last Sunday's Academy of Country Music
Awards. Not the least of them being that
a.) as noted earlier many of the auto companies in America are neither the "big
three" nor are they doing anywhere as badly as the big three and, oh yes, b.)
D.C. is actually bailing out Detroit, too. (Although it's still a horse race to see which bailout packages are
actually less successful. I'm splitting
my bet. We'll waste more money on Wall
Street but dollar for dollar we'll be less successful in Detroit.)
Because in the end, we also need to recognize, adjust to and respond with creativity and innovation to the fact that there are secular trends afoot that make it increasingly unlikely that so-called American brands will ever dominate worldwide as they once did. Even if we do reduce the size of those ginormous tushies.
JIM WATSON/AFP/Getty Images
David Rothkopf is the CEO and Editor-at-Large of Foreign Policy. His new book, "Power, Inc.: The Epic Rivalry Between Big Business and Government and the Reckoning that Lies Ahead" is due out from Farrar, Straus & Giroux on March 1.