Bernie Madoff is talking. That's a big deal. Madoff fell off the charts as various crises erupted around the world. Back in the USA, the economy seems to be perking up, which has also relegated Madoff to obscurity, at least where the television cable channels are concerned.
But now Madoff is making his move. In an interview with the New York Times, he announces "they had to know." The "they" requires no explanation. JP Morgan is already howling that the court-appointed trustee Irving Picard (who himself is earning millions off the investigation--hunting down Madoff's misdeeds has become its own industry) is going beyond his mandate. As Frank Rich recently observed, Madoff was a "second-tier player." But he could lead to bigger fry. The Wilpons, who own the New York Mets, are already in big financial trouble for their extensive dealings with Madoff--Donald Trump is angling to buy a majority stake in the team. Then there are the hedge funds and banks that were linked to, or in cahoots with, Madoff.
At this point Madoff has little to lose. President Obama shows little appetite for curbing the excesses that led to the last financial crash. Madoff cannot achieve redemption. His historical role as the biggest Ponizi schemer (so far) in history is set. He became the type-cast bad guy. For awhile Madoff took all the credit, if that's the right phrase, for the malversation he oversaw. That's changed. Now he seems to be interested in ensuring that his collaborators, witting or unwitting, also take the fall (though he is notably exempting his own family members from any knowledge of his transgressions).
Madoff's own crediblity is shot. But if the information that he's apparently providing to Picard pans out, then he may get his own measure of revenge for the humiliations he has suffered, and is suffering. Balzac said that behind every great fortune is a crime. Madoff now seems intent on demonstrating the truth of that axiom. One thing seems clear: Madoff is not going to go down quietly. The aftershocks from his exposure may well continue to roil the financial world.
If Obama had some gumption, he might consider pardoning Madoff and putting him in charge of financial regulation. After all, Franklin Roosevelt made the former bootlegger Joseph P. Kennedy head of the SEC on the theory that he knew full well where and who the criminals were. Kennedy did a spectacular job. Madoff probably would as well. He would have everything to prove. For now, however, the specter of Madoff talking is probably scary enough for the banks that were involved with him.
President Obama was at his most conciliatory at his press conference. To listen to him, you might think that the budget differences between Democrats and Republicans are about as divisive as figuring out which brand of yoghurt to purchase. Obama is a master of sanding down differences, at least rhetorically, emitting a blur of words to disguise conflict. He returned to his familiar evocation of "folks" several times. What "folks," specifically? He never said.
Obama was similarly vague when he said that "somebody" had visited him as part of writing a book about the 10 letters he receives each day. That "somebody" visited him yesterday. Surely Obama knew his or her name. But he never said. As David Bromwich has observed, Obama likes to keep things vague and to talk down to much of his audience, at least when he isn't addressing his fellow elites. Then he talks about people clinging to their guns.
But even Obama couldn't disguise that he feels a little embarrassed about his budget cuts. He made a wincing expression about lopping off Pell grants for the summer, claiming that it would allow him to maintain the viability of the program for the rest of the year. Ditto for heating costs. Somehow helping people to insulate their homes becomes less important when energy costs are down. In any case, the cuts are mostly trivial, at least in relation to the deficit. Social Security and Medicare are not on the table, at least not yet. The GOP, it appears, is talking more seriously about curbing entitlement programs. Now that could get interesting, especially if it wields Obama's own deficit commission against him. For his part, Obama says he is ready to negotiate a deal with Republicans. They should take him up on the offer.
Obama was clearly more at home in discussing Egypt, which turned out OK. At least it seems to have gone well in the sense that a virulently anti-American regime does not appear in the offing. Obama claimed that at every "juncture" history will show he was on the side of the angels. Still, he took a pounding from conservatives and neoconservatives who said he was too slow to embrace the Egyptian revolution. If Obama gets really lucky, then the upheaval will jeopardize the regime in Iran. But that seems about as likely as serious deficit reduction.
It seems clear that in everything he does over the next two years, Obama is fervently going to cast himself as the moderate. That means he's going to leave as little room between himself and the GOP as possible. Obama is showing that he is a master of self-preservation.
If generals are prone to fight the last war, a similar phenomenon may occur with historians and political scientists who read contemporary political events through the lens of the past. Specifically, they often assume that a replay of the past is inevitable. But it isn't.
To be sure, as the Arab revolutions sweep through the region--for something like this is happening--it is possible that old regimes will simply be replaced by more subtle authoritarians. There is no guarantee, after all, that Egypt's military will actually cede the democratic reforms it has promised. The protesters may have succeeded in ousting Hosni Mubarak with little to show for it.
But that is probably too sullen an analysis. Unrest, as the Wall Street Journal observes, is spreading in the Middle East. It's becoming a little more uncomfortable if you're in the dictator line of work. The portraits of Mubarak are coming down. While Mubarak presumably won't have to flee to a spider hole, he is now in a form of internal exile. The army has suspended the Constitution, dissolved the bogus parliament, and promised new elections.
The peaceful resolution of the crisis is emboldening protesters in Yemen, Libya, and Iran, where chants of "Death to the dictator" resounded on Sunday night. The Egyptian example would seem to suggest that perhaps the Arab world can, at least in some areas, transition to some form of democratic government. This, at its core, is the question that has tormented the region for over a century.
If the answer is yes, then the real loser will be the Israeli right. Israel trembled as it watched the Egyptian uprising. Had Egypt been taken over by radical Islamic forces, the hardliners in Israel would have been immeasurably strengthened. And now? Any move toward democracy weakens the last-ditchers who want no peace agreement with the Palestinians. It's already clear from the WikiLeaks that the Palestinian Authority was prepared to compromise with Israel and desperate to reach a peace agreement. Benjamin Netanyahu, however, couldn't, or wouldn't, take yes for an answer. He stalled, obfuscated, punted.
Now a wave of revolutions in the Arab world, particularly in Iran, would upset those calculations. Israel has been moving toward a more authoritarian form of government as the right takes over. If the Arab world moves, however haltingly, toward more freedom, Israel's current stance will become unsustainable. It faces the prospect of tumult in the Arab world that may increase the pressure on it to reach an accommodation with the Palestinians.
The bustling atmosphere of the Conservative Political Action Conference (CPAC) last night testifies to the ferment that has swept the right. Where else can you find someone wearing a dark suit coupled with a fluorescent red T-shirt that has the word "capitalism" emblazoned on it in white letters? More significantly, at last night's dinner House Speaker John Boehner made it clear that the Tea Party will not be held at arms-length but embraced. There is "no limit" to government cuts in spending that he is prepared to institute, Boehner declared.
It was a bold statement. Already House Republicans, under pressure from the Tea Party, are pushing for broader cuts for this fiscal year, seeking at least $60 billion. It actually shouldn't be that hard to find them. But of course with the Senate and presidency controlled by the Democrats, it's more of a rhetorical exercise than a practical one. Or is it? It could have real consequences if the GOP rebels at raising the debt debt (something that President Obama, by the way, voted against doing when he was a Senator and George W. Bush was president). Now the administration is warning that it would lead to world financial chaos if the GOP stymies raising the limit, which it could and might.
But such considerations seemed remote at last night's affair, where American Enterprise Institute head Arthur Brooks, who had been preceded by country western singer Ray Stevens, a foe of big government, both in its economic and security manifestations, warned about the perils of statism. Even Brooks' speech, however, had a somewhat folksy character as he recounted to the audience that he came from a liberal family and that his mother told him about a decade ago that she had a "personal question": "Are you voting for Republicans?"
Of course that question will loom large in 2012; as the savvy Boehner observed, the GOP must keep up its "momentum" and could only accomplish so much given Democratic dominance. The GOP has a treacherous road ahead of it as it attempts to navigate between establishment Republicans and the Tea Party. But so far, little has been able to disturb the festive spirit of CPAC as its founder David Keene goes on to become president of the National Rifle Association. It was a colossal error for Sarah Palin not to show up. CPAC has become an integral part of the GOP and the right. As Keene proudly observed, CPAC had about 750 attendees at its outset. Now it boasts over 11,000.
The Patriot Act failed to pass the House, thanks to some recalcitrant Tea Party members who refused to vote for it. It was supposed to be put on a fast track that required a two-thirds majority. House members, who are usually easily rolled, finally showed a little gumption by rebelling. The vote suggests that the GOP will have increasing difficulties with the Tea Party whose anti-government credo isn't just rhetoric. No doubt the Patriot Act will be muscled through. But the vote has symbolic importance.
It should have been an easy vote. But it wasn't. As the National Journal put it,"Deserting and embarrassing their GOP House leadership, 26 Republicans—including several members of the Tea Party Caucus—bolted Tuesday night to join Democrats in a surprise rejection of a centerpiece of Bush-era powers to fight terrorism that curbed American civil liberties." The Patriot Act is one of those anti-terrorism measures, all too common in the age of the Transportation Security Agency and the Homeland Security Department and a CIA that seem to get caught napping again and again, that provides the illusion but not the substance of security. What's more, the very name of the act is itself repugnant, suggesting that anyone who would vote against it is unpatriotic. They aren't. They are, in fact, the true patriots.
One thing the vote suggests is that it will be more difficult for the GOP to demagogue national security as it did during the George W. Bush era. Bush used the Patriot Act as a club to bash Democrats as soft on fighting terrorism. If you think that the government should be allowed to roam through your medical and library records, and, furthermore, that this will help stop terrorists in their tracks, then I suppose the failure of the House to renew the legislation will come as a blow. But the 26 Republicans who voted against reauthorization deserve praise. The Patriot Act, which President Obama is cravenly supporting, represents a flagrant intrusion on the civil liberties of Americans. Adam Serwer argues in the Washington Post that it wasn't really a vote en masse by Tea Party members against the Patriot Act.
Which is why it's fair to wonder if this vote doesn't presage more hiccups for the GOP. The fact is that on defense spending the Tea Party represents a hope that big government can be slashed in an area that has traditionally been regarded as sacrosanct by conservatives. But their conservatism in name only. A true conservative seeks to conserve. There is no reason that the Pentagon should be exempt from worries about the budget deficit and big government.
The question for the GOP, then, will be whether it can fully emancipate itself from the Bush legacy in the next two years or whether it will cling to it. Reinventing the party would require a wholesale makeover that has only partially begun. The GOP has rhetorically shed the profligate approach to budgets that epitomized Bush. But it will have to demonstrate that it is doing so in deed as well. Otherwise, it will simply be further contributing to another kind of inflation--verbal--that continually afflicts Congress.
Known and Unknown: A Memoir Donald Rumsfeld is a serious man. The cover of his engrossing, informative, and well-written memoir shows the former two-time defense secretary and fighter pilot wearing a fleece vest, brown shirt open at the neck, and blue jeans. He is casual but confident, at peace with himself, leaning against a wooden fence with mountains faintly in the background, presumably at his Jackson Hole retreat. He could be a wealthy business executive enjoying his retirement about to go horseback riding on his ranch. Not, in other words, the kind of guy who would order the torture of foreigners or anything else unpleasant. The photo on the back of the jacket flap displays a quite different Rumsfeld--middle-aged, probing, questioning, earnest, wearing large glasses, a suit and tie, and leather shoes with a hole in the sole. Deep cerebration is the message.
In many ways, the photos in Rumsfeld's book, and there are dozens of them, form some of the most interesting parts of it. They remind us not only of Rumsfeld's saga, but America's odyssey. The photos gradually become more complex, giving way from the assemblages of white men forming government cabinets to the multi-racial ones of the George W. Bush presidency. Rumsfeld zipped in and out of public life over the decades, seemingly a spent political force by the 1990s, only to reemerge in 1998 with his Rumsfeld Commission issuing dire warnings of a North Korean missile aimed at America in a few years (where is it?), then total, or seeming, resurrection when George W. Bush, in an act of filial impiety, tapped his father's former adversary to become his defense secretary.
Perhaps Rumsfeld's reemergence shouldn't have been altogether surprising. In the various photos of him a shrewd and sly grin often crosses his face. Rumsfeld, the former Princeton wrestler, has been a fighter all his life. His memoir is his last battle and one, it must be said, that, by and large, he fights well, collapsing only at the end when he retreats into defenses of the Iraq War that don't withstand serious scrutiny. Rumsfeld's tenure is a reminder of how a hugely popular official, which he was during the outset of the Iraq War, can come crashing down into utter ignominy. Rumsfeld went almost overnight from seer to villain. By 2006, after the GOP's drubbing in the midterm congressional elections, even the Decider decided that he had had enough and evicted Rumsfeld from the Pentagon.
But the very qualities that enraged Rumsfeld's detractors when he was defense secretary--his tart judgments and impatience--ensure that his book is extremely lively. Much of it is devoted to chronicling his early career as a congressman in the 1960s, when he supported civil rights legislation, and his service to Richard Nixon and Gerald Ford. Rumsfeld knew how to manuever to protect himself, turning down Richard Nixon, not once but twice when asked to take on political jobs. In 1972 Nixon asked him to become head of CREEP--the Committee to Reelect the President. Rumsfeld refused, telling him that the "`organ-grinders will all be in the White House.' I didn't have any desire to be the trained monkey." He also turned down becoming chair of the Republican National Committee. Years later he recounts that Nixon would seek to counsel him on his career, instructing him in a classic Nixon aside that "I should stop wearing glasses and use contact lenses instead."
He also settles scores. Condoleezza Rice, at a National Security Council meetings, took umbrage at Rumsfeld's attire. According to Rumsfeld,
one time Rice and I were sitting together in an NSC meeting, and I was wearing a pinstripe suit--one that I very well might have owned since the Ford administration. The suit was so well used that the pinstripes on the right leg above the knee were worn off. Rice noticed this, frowned, and pointed disreetly at my leg. Looking down at my suit, I noticed for the first time the missing pinstripes. `Gee,' I whispered to her with a smile, `maybe Joyce [Rumsfeld's wife] can sew them back on.' Condi's eyes widened."
The thrust is that Condi, always dressed elegantly, was a superficial twit, while he, Rumsfeld the stolid Midwesterner, was focused on the real task at hand. He sticks the shiv into her, observing that "I knew the burdens of the job of national security adviser were taxing for even the most seasoned foreign policy specialist and could be particularly so for someone with modest experience in the federal government and management." Her meetings, he says, were "not well organized." Rumsfeld tried to help her by sending notes that, he complains, seemed to be unappreciated: "She seemed unaccustomed to constructive suggestions, and not much changed for the better." Bad Condi!
Colin Powell gets drubbed as well. "Some of Powell's actions fostered an impression," Rumsfeld writes, "that he saw his service in the cabinet as a means of representing the State Department to the President as much as he saw it as representing the President at the State Department." Powell, in other words, had been captured by the State Department bureaucracy. L. Paul Bremer III is dismissed as being oblivious to indigenous Iraqi concerns: "it remained difficult to get him to accept the idea that Iraq belonged to the Iraqis, and that the Iraqis were entitled to their own culture and institutions." So the insurgency that developed was Bremer's fault, not Rumsfeld's. Even Bush comes in for a few jabs. While Bush was not the dope that he was often made out to be, Rumsfeld says, "NSC meetings with the President did not always end with clear conclusions and instructions."
But what would have been clear-cut? The problem isn't necessarily that the decisions about the Iraq War were ambiguous. It is that the premise for war was itself fatally flawed. On the issue of intelligence about Saddam's weapons of mass destruction, Rumsfeld breezily observes that "recent history is abundant with examples of flawed intelligence..." Well, yes. But not on the scale of launching a preemptive war against another country. Rumsfeld concludes that the "limits of intelligence...are a reality that should make us all humble."
But humility has never been Rumsfeld's long suit. It would be kind of shocking if he were to confess to the errors that led up to the Iraq War or that resulted in Abu Ghraib, probably the single biggest blow to America's image abroad in decades. It would create shock but not awe among readers of his tome if a penitent Rumsfeld were to emerge. No McNamarian effusion of tears for him. But if Rumsfeld is reluctant to concede error, he is hardly the first high-ranking official to do so. His memoir may be evasive, but evasion is the calling card of most memoirs. Trenchant and never less than stimulating, Rumsfeld's memoir perfectly reflects his character. In that sense it is entirely truthful.
Arianna Huffington is now officially one of the biggest media stars in America. AOL's purchase of the Huffington Post for $315 million ratifies her importance. It's an amazing feat for a woman who began on the right side of the political ledger, ended up on the left, and has created a major media organization almost singlehandedly. The web is clearly far from done in shaking up the media landscape. Whether or not Huffington succeeds in solidifying the success of her website, she has already established herself as a major media presence. One thing is clear: you underestimate Huffington at your peril.
Her task now will be to transform the Huffington Post, where I've occasionally contributed, into the New York Times of the web, which is clearly her goal. Huffington has been on a hiring spree. Among her recent hires is Newsweek's Howard Fineman and she'll hardly stop there. She might also hire foreign correspondents. In any case, she's branching out into a variety of fields, ranging from food to sex advice.
The real risk is for AOL. It needs the Huffington Post more than the Huffington Post needs it. What is it getting for its money? The real question about most internet sites is whether they can create an actual revenue stream. Success, at this point, is counted in terms of breaking even.
But if anyone can pull it off, apparently Huffington can. A Greek immigrant to England, she studied at Cambridge and wrote her first book called the Female Woman at age twenty-two. It decried the feminist movement. She herself was something of a femme fatale. She dated the columnist Bernard Levin and went on to write books about Maria Callas and Pablo Picasso. She also married Michael Huffington, an oil heir, in 1985. The wedding party was thrown by Ann Getty. Divorce followed. Huffington turned out to be gay. Arianna herself morphed into a liberal. But she didn't really hit the big time until the Huffington Post became a wild success, thanks largely to the Bush administration.
It will be interesting to see if the Huffington Post now begins to publicize some more conservative voices as well. If the website is to grow, it will have to continue to turn itself into a slightly racier version of the New York Times or the Washington Post. For the old media the portents remain grim. The Los Angeles Times still doesn't have a buyer. Newsweek is on the ropes. Subscriptions to the Washington Post keep going down. AOL has to hope that its $315 million isn't simply an act of faith, but an investment in the future, which is here now.
Image (c) World Economic Forum
Sen. Rand Paul did it. He told CNN's Wolf Blitzer that all foreign aid should be halted. Even the $3 billion a year that Israel collects. Paul's point is simple: we can't afford it. Keep shelling out precious American money to foreign mendicants and soon enough we won't be able to fund Medicare.
To be sure, it took some prodding from Blitzer. Paul prefaced his remarks with some pious bows toward Israel's great worthiness as a fount of democracy in the Middle East. But he didn't flinch.
Paul's remarks signify that he is set to become a disaster for the GOP and to remain a hero for the Tea Party. The GOP actually might have made inroads with Jewish voters in 2012. But if Paul sends up enough signal flares against Israel, he's going to make Jewish voters extremely nervous about the GOP's overall position. For House Republican leader Eric Cantor, a pal of William Kristol, Paul is a certified nightmare. Already Democrats are seizing upon Paul's remarks to trumpet their own Israel bona fides and induce doubts about the GOP's loyalty to the Jewish state.
Paul evinces every sign of sticking to his Tea Party positions. His maiden address in the Senate, as Dana Milbank pointed out in the Washington Post, consisted of a lengthy denunication of the "Great Compromiser" Henry Clay. How weird is that? Talk about dissing a Kentucky homestate hero. That's like saying Seattle Slew wasn't really a great race horse. Paul's point was that he won't compromise and that Clay foolishly did. (In fact Clay helped keep the United States from splitting in two. He also happened to be a hero of Abraham Lincoln's. But never mind.)
The real story is that Paul is going to give the GOP heartburn over the next few years, as he drubs Israel, attacks the size of the Pentagon budget, and demands retreat from Iraq and Afghanistan. Paul is going to be a media lightning rod. Most politicians work to try and sand off their edges. Not Paul. There may not be a Pauline conversion in the GOP, but it can hardly be doubted that Rand Paul will journey far and wide to spread his credo. Could he even be preparing for a run for the presidency? Stranger things have happened.
Image © Gage Skidmore
Steve Clemons, the editor of the Washington Note, can leave behind a vertiginous feeling, as you try and follow his various activities, ranging from blogging to worldwide travel, from holding forth at his perch at the New American Foundation to holding salons at Restaurant Nora with Washington figures. One day he's arranging an open letter of bigwigs pushing the Obama administration to denounce Israeli settlements. The next day he's halfway around the world. On another he's hosting Grover Norquist or Zbigniew Brzezinski at a dinner.
At the same time, a profusion of blogs is emanating from his website. Nobody does it better. So it all prompted former Council on Foreign Relations head Leslie Gelb to muse in the New York Times that if the White House is looking for a new social secretary, which it is, who better than Clemons?
Clearly the White House has been struggling with its previous picks. Desiree Rogers flamed out. Julianna Smoot never caught on fire in the first place. Now the word is that a man should be considered for the post as well, a real master, as opposed to mistress, of ceremonies. And, indeed, if Obama were serious about bipartisan outreach, he would consider appointing Clemons, who has deep connections among both Democrats and Republicans.
The real post that Clemons might have snagged, however, was White House press secretary. Clemons, as I'm sure he would be the first to admit, likes to talk. But he also knows when not to. In the Washington Post, Dana Milbank notes that Jay Carney, the new press secretary, looks, at first sight, like a massive improvement over the dolorous Robert Gibbs, widely loathed by the press corps. But Carney, Milbank suggests, may be set up for failure. As a former reporter for Time, he's got to prove his cojones--that he hasn't been coopted by the press. He may prove as big a dud as Gibbs, or even bigger, in the end.
A move up to the White House would be good for Clemons. But would it be good for Washington? There will be no one who can replace the blur of activity that is Clemons. And the pundit class, not to mention Restaurant Nora, would sorely miss Clemons' salons, run at a far higher level than anything the White House has experienced in a long time. Meanwhile, Clemons has already added a new feather in his cap as editor-at-large of TalkingPointsMemo.
Image © LuMaxArt
A big event is often seen as the precursor to a breakthrough in the Middle East peace process between Israel and the Palestinians. Saddam Hussein has been defeated? Time for peace. Now the latest ructions in Egypt are reigniting the call for peace. German chancellor Angela Merkel told Benjamin Netanyahu on Monday that it's time for--what else?--new talks with the Palestinians, citing the "troubled times" in Egypt and Tunisia as rendering it "even more important to get on with the peace process."
Here at the National Interest the same plea has been made by Bruce Riedel and Paul Pillar. The argument seems to be something along the lines that there's never been a more urgent time to try and tamp down Islamic radicalism. The peace process can play an integral role.
To which one can only wonder, what peace process? There is a lot of toing and froing between the Israelis and Palestinians. So it has gone for decade after decade. Israel continues to build settlements. The Palestinians wallow in their plight. And the Arab world remains blind to the fact that it threw away most of its crediblity by rejecting the 1947 UN Partition plan, which was far more advantageous than anything it would get in negotiations today. It may well figure that time is on its side. The longer the Arabs and Palestinians hold out, the weaker Israel's strategic position becomes, both because of the Arabs living inside it and its longterm inability to digest the West Bank.
The truth is that renewed negotiations could actually inflame the Arab world, which might see them as a sellout to the Israelis. Radical Muslims probably figure they've never had it so good. Egypt and Jordan could fall under the sway of Islamic radicals. What's the incentive for the Arab world to endorse negotiations?
For Israel to embark upon serious negotiations would be tantamount to negotiating with a loaded revolver to its head. It doesn't know how Egypt is going to play out, either. Might Egypt turn into an actively hostile foe after decades of a cold peace? Is Israel's "strategic space" about to shrink further? The odds are that Israel will turn even further to the right should Egypt devolve back into nationalism, or some syncretic form of "isms" that includes radical Islam.
If Egypt turns out well, and some form of tender democratic shoots take hold, then the pressure on Israel would mount considerably to reach some kind of deal with the Palestinians. But the situation is far too murky to expect more than bluff and bombast to emanate from both the Israelis and Palestinians about the peace process for weeks to come.
Anyway, the problem in the Middle East right now isn't Israel. It's radical Islam. Pakistan, Jordan, and Saudi Arabia could all face internal turmoil should the Tunisian revolt continue to spread. Perhaps this really will be 1989 all over again. But there is plenty of room to wonder.