Recycled Goods is still in semi-retirement. I'm not going very far out of my way, but when I stumble across something that fits, I jot it down and post it end of each month. Back when I was working on it the columns ran 40-60 records per month. In April when I resumed this I had 10; this month it's up to 17, mostly redundant jazz.

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Spent the month trying to keep up with the flood of Jazz Consumer Guide entrants, some of which proved ancient enough to fall through to here. Slipped in a couple of world music delights to encourage publicists to keep sending. Besides, I liked their covers, although it took a while to track down scans, and I had to hack on them a bit to make them fit. Record count is up from the last two months when this column went into semi-retirement. Next month could just as easily go down, especially since I've run out of old jazz.

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The Peter Brötzmann Octet: The Complete Machine Gun Sessions (1968 [2007], Atavistic): Roughly speaking, this is where Europe's jazz avant-garde takes off, building a tradition rooted in brutal cacophony, disjointed rhythm, and cartoonish irreverance. The three saxophonists went on to major careers: Evan Parker, Willem Breuker, and Brötzmann. They turn these long pieces into free fire zones, blaring in unison siren wails, splitting off to scratch through the dirt and the rubble. Two bassists: Peter Kowald and Buschi Niebergall. Two drummers: Han Bennink and Sven-Ake Johansson. One pianist: Fred Van Hove. Each has his own mind, but the piano is especially worth tracking. Original LP ran 37:08. CD reissue added two alternate takes, and now this edition adds a third take of the title piece, done live with extra saxophonist Gerd Dudek. Still fits on one CD, but it's an awful lot to sit through. B+

Classic Piano Blues From Smithsonian Folkways (1944-76 [2008], Smithsonian/Folkways): The small print limits the selection to Moe Asch's folkie-ethnomusicological label, which recorded some 3000 LPs with its eyes and ears fixed on the past -- one result is that real classics like Leroy Carr are too old, and contemporaries like Otis Spann are too modern. Sampled instead are such uncommercial fogeys as Memphis Slim, Speckled Red, Roosevelt Sykes, Champion Jack Dupree, and Little Brother Montgomery, with James P. Johnson a surprise appearance. The booklet often omits recording dates -- 1944-76 covers about half of the songs, but others could be earlier or later -- but otherwise provides a lot of information, often referencing more classic versions of these same songs. B+

Dominique Cravic et les Primitifs du Futur: Tribal Musette (2007-08 [2008], Sunnyside): It's tempting to view this French cabaret group through the prism of their famous cover illustrator and sometime mandoline player, R. Crumb. Like the Cheap Suit Serenaders, guitarist Cravic's band is firmly planted in the past, its embrace of primtivism rooted in the romantic view of anthropology, with a little sci-fi for the future. For me it works not for its longing for other times so much as how disarmingly and charmingly French it all sounds: the accordions, marimba, clarinets, "musicale saw," "finger snapping," rhythm guitar, voices ranging from cigarette-stained poetasting to sweet chorales. Where we tend to think of world music as anything-but-ours, in France the view seems to be everything-including-ours. A-

Gabi Lunca: Sounds From a Bygone Age, Vol. 5 (1956-78 [2008], Asphalt Tango): Even now, nobody would go so far as to claim that Ceausescu's Romania harbored a golden age of pop music, but the German label Asphalt Tango has compiled five volumes without a slip, music no one else seems to have had a clue about. (Buda Musique's Éthiopiques series has done something comparable, but is more hit and miss.) Gypsy lautari music, with accordion and violin and cimbalom, mostly consumed at weddings, only rarely recorded. Lunca was the more refined of two major female singers -- the earthier Romica Puceanu got her props back on Vol. 2. A-

Briefly Noted

Nat Adderley: Work Song (1960 [2008], Riverside/Keepnews Collection): Cannonball's little brother plays a lean, unpolished cornet, backed by a group that straddles Bobby Timmons' funk-groove piano and Wes Montgomery's slickened blues guitar; the irresistibly catchy title cut makes this a minor hard bop classic. A-

Albert Ayler/Don Cherry/John Tchicai/Roswell Rudd/Gary Peacock/Sunny Murray: New York Eye and Ear Control (1964 [2008], ESP-Disk): Ayler's record, but all names are on the cover and all are notable, the four horns churning tumultuously, with Ayler's tenor sax reaching for the sacred, and Rudd's trombone plumbing the profane. B+

Don Cherry: Life at Café Montmartre 1966: Volume Two (1966 [2008], ESP-Disk): Sloppy seconds in Copenhagen, with Gato Barbieri's tenor sax sparring with the leader's trumpet over the fractured field of Karl Berger vibes, playing such complex Cherry compositions as "Complete Communion" loose and short-handed. B

Ornette Coleman: Town Hall, 1962 (1962 [2008], ESP-Disk): Three cuts with the trio that in 1965 cut At the Golden Circle, Stockholm, both volumes highly recommended, this less essential but unmistakable; sandwiched in the middle is a 9:17 string quartet, Coleman's first recorded glimpse of his harmolodic chamber music, something else again. B+

Droppin' Science: Greatest Samples From the Blue Note Lab (1966-74 [2008], Blue Note): With Alfred Lion and Francis Wolf departing, the legendary label foundered, adrift in quasi-commercial soul jazz with languid beats that I suppose have been sampled from time to time -- no details here, just another attempt to turn sows' ears into silk purses. C+

Coleman Hawkins: The Hawk Flies High (1957 [2008], Riverside/Keepnews Collection): Makes it look easy, too, lifted by warm brass from Idrees Suleiman and J.J. Johnson, soaring over a rhythm section that layers Hank Jones bebop on Jo Jones swing, swooping and diving and snatching the listener's attention with surprisingly effortless grace; only complaint is sometimes Hawk makes it look too easy. A-

Frank Lowe: Black Beings (1973 [2008], ESP-Disk): The short middle piece is solo tenor sax, thoughtful and intriguing; the two long pieces sandwiched around the solo are screamers, with Joseph Jarman on second noisemaker, wailing and shrieking spastically around Lowe's meatier riffs. B-

Chris McGregor's Brotherhood of Breath: Eclipse at Dawn (1971 [2008], Cuneiform): A band of South African exiles with their township jive melodies, doubled to big band strength with English avant-gardists, the sounds repressed by apartheid amplified into the cacophonous noise of freedom; a live set from Berlin, not the clearest or the most exhilarating of performances, but a remarkable band. B+

Wes Montgomery: Incredible Jazz Guitar (1960 [2008], Riverside/Keepnews Collection): Not really -- despite his overwhelming influence on two-thirds of the jazz guitarists who followed in his wake, at best he was a subtle craftsman with natural swing on basic blues; nowhere is that more clear than on this elegant quartet with Tommy Flanagan's piano as delectable as the guitar. A-

Art Pepper: Unreleased Art, Vol. III: The Croydon Concert, May 14, 1981 (1981 [2008], Widow's Taste, 2CD): A hot set with a group -- Milcho Leviev on piano, Bob Magnuson on bass, Carl Burnett on drums -- Pepper toured often but recorded rarely with; he calls them his favorite group, and they repay the compliment -- there seems to be no end to wondrous tapes from his last years. A-

Sonny Rollins: Freedom Suite (1958 [2008], Riverside/Keepnews Collection): The 19:37 title cut seems a little subdued, tentative as if freedom is still uncertain; same for the side of standards, expanded with redundant bonus cuts, but they're just tapping into his sentimental side. B+

McCoy Tyner: Fly With the Wind (1976 [2008], Milestone/Keepnews Collection): A symphony of sorts, tempestuous but wildly scattered including some of those dull atmospheric spots, performed by a massive string orchestra plus harp, wind instruments limited to oboe and flutes, a rhythm section with Ron Carter and Billy Cobham frantically struggling to keep up with the pianist. B

James Zitro: Zitro (1967 [2008], ESP-Disk): Percussionist, worked with Sonny Simmons, got a free shot on the label that bragged "the artist alone decide" and turned out an energetic but unexceptional free jazz blast, a sextet with Alan Praskin and Bert Wilson on noisy saxes and Warren Gale riffing high on trumpet. B

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Permanent link.

I feel like I paid my dues this week. Didn't get to everything I wanted to, but took a big chunk out of the incoming pile. There's still a bunch left, but I have more than I need to fill out a Jazz CG column. The new William Parker record gives me one pick hit. I could take either the Ron Brown or the Roy Campbell for a second Vision Festival (AUM Fidelity) pick hit and actually come up with a nice title for once: "Festival Visions." Or I could go with the Vandermark 5 and celebrate the two most fruitful players of the now-closing decade. The duds front is less clear, but I haven't been going out of my way to chase them down.

The main thing that keeps me from closing out this column is that I've been trying to get the book reports squared away. I posted a dozen in the last week, and will probably post another dozen this coming week. Takes a lot of time. While I do manage to skip back and forth, that's easier to do with these crude notes than with trying to write real Jazz CG capsules. So I figure I'm two weeks away from finishing. Should start getting into the replays this coming week, then nail down what I can the following. Unless something tragic happens.

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The Amazing World of Arthur Brown: The Voice of Love (2007 [2008], Zoho Roots): One of the few causes celêbres I flat out missed in the 1960s -- AMG's "similar artists" list includes Jimi Hendrix, HP Lovecraft, Syd Barrett, and Carl Palmer; I had sort of been under the impression he was the English Dr. John, but maybe I'm confusing him with Jethro Dull. Anyway, he's hardly Amazing any more -- sort of a blues rocker with a little folkie twang in the guitar. One hoedown song had enough mustard on it I thought I might not be able to dismiss him out of hand. But then the next song came on. B

The Malchicks: To Kill a Mockingbird (2007 [2008], Zoho Roots): English blues-rock group, duo actually, with vocalist Scarlett Wrench and George Perez on guitars, banjo, bass, with some extra studio help -- drums, anyway, plus Phil May (Pretty Things) and Arthur Brown add some backup vocals. Songs are as stout as "Boom Boom," "House of the Rising Sun," "I Got My Mojo Working," "Baby, Please Don't Go." The female voice provides a slight twist on a genre firmly rooted in Eric Bourdon's testes. Finishes with a Leonard Cohen song, proving that history ambled on past the 1960s. B+(**)

The Pretty Things: Balboa Island (2007, Zoho Roots): British invasion reject from the 1960s, had a reputation as too hard, too low down, too dirty for Hullabaloo and Shindig, which was probably true but less than a crowning achievement. Went prog around 1970 with a Who-ish rock opera, no more successfully than their first phase. Staged another unsuccessful comeback in the late 1970s, aided by pub rock, punk rock, and Led Zeppelin, none of which helped. They're still around, still sounding pretty much like they always did, which with 40 years of perspective now looks a lot like the Aynsley Dunbar Retalliation, the real roots band for these inveterate punters. On the other hand, this is about as strong and a good deal more solid than any album they've turned in. They've never been much good at timing. B+(*)

Bobby Broom: The Way I Play: Live in Chicago (2007 [2008], Origin): Chicago guitarist, b. 1961, sixth album since 1995 (the first of two on Criss Cross), plus more records with Deep Blue Organ Trio. Trio, with Dennis Carroll on bass, Kobie Watkins on drums. Front cover photo is tightly cropped around guitar, and that sums up the album. Plays within Wes Montgomery's framework, but more tightly wound. Set is a mix of standards and bop tunes, most of the former well known from the latter, but none played to type. He meant this as a showcase, and that's what he got. B+(*)

Bridge Quartet: Day (2007 [2008], Origin): First album by group: Alan Jones (drums), Tom Wakeling (bass), Darrell Grant (piano), Phil Dwyer (tenor sax). Jones (from Portland, OR), seems to be the leader, but the group is built to showcase Dwyer (from British Columbia) -- "Bridge" is a Sonny Rollins reference, and Dwyer's likely to be happy with all the Rollins comparisons he can gather. Grant is by far the better known player; he has a relatively small role here, expertly done. Mainstream, but brash, loud, wide open, a mother lode of tenor sax. B+(**)

Doug Miller: Regeneration (2005-06 [2008], Origin): Bassist, originally from Bloomington, IN; studied under John Clayton, a connection to Ray Brown; moved to Indianapolis, then to New York, then to Seattle in 1987. First album under his own name, although he co-founded a big band called Big Neighborhood which has a couple of records, and has 25-30 side-credits since 1990. Miller wrote all of these pieces, which seems to be the point here. I find it hard to judge new mainstream jazz compositions -- they're so tightly bound within convention they hardly ever sound new. The odd thing here is how they vary the lead instrument -- sometimes trumpet or flugelhorn, tenor or soprano sax, or even flute, all wielded by the same Jay Thomas. Dave Peterson also does double duty on guitar and keyboard, with Phil Parisot's drums limited to four cuts. I suppose that's one way to make the bass the focal center, but it's still not clear enough for me. Still, some interesting stuff here. B

Hiromi's Sonicbloom: Beyond Standard (2008, Telarc): Japanese pianist, full name Hiromi Uehara, b. 1979, came to Berklee 1999, has five US albums since 2003, all on Telarc, where she's angling for a big audience with some fancy fusion footwork. It's been hit and miss so far, but she gets some mileage out of these standards, most impressively an uproarious take on "Caravan." The band includes Dave Fiuczynski on guitar, Tony Grey on bass, Martin Valihora on drums. Some things lost me along the way, but at best the guitar can be spectacular. Ends with the fastest "I Got Rhythm" I've ever heard. [B+(**)]

Tony Grey: Chasing Shadows (2008, Abstract Logix): English bassist, also plays keyboards, b. 1975 Newcastle, graduated from Berklee in 2001, something of a protégé of John McLaughlin, plays with Hiromi's Sonicbloom. Fusion album, long groove pieces variously decorated -- Dan Brantigan trumpet, Elliot Mason bass trumpet/trombone, Bob Reynolds soprano/tenor sax, Gregoire Maret harmonica, Lionel Loueke guitar -- none setting a dominant tone, although Maret is the most distinctive. Hiromi plays pianon on one cut, but most of the keyboard work goes to Oli Rockberger. B+(*)

Saxophone Summit: Seraphic Light: Dedicated to Michael Brecker (2007 [2008], Telarc): The last such summit was so dominated by Michael Brecker that I filed it under his name, although the reason could just as well have been that I hated the record, had never cared for Brecker's records, and therefore figured they belonged together. The other pillars were Joe Lovano and Dave Liebman: the former an unimpeachable giant of the era, the latter a fine tenor saxophonist who spends most of his time these days annoying people with his soprano sax. But Brecker's gone now, so I filed this one under Liebman, figuring he'd be the squeak wheel. In any case, the dedication to Brecker here is pro forma. His shoes were easily filled by Ravi Coltrane, especially given that the songbook focuses on his old man. Booklet has no credits beyond the horns, but a group photo hints that the piano is Phil Markowitz, bass Cecil McBee, and drums Billy Hart. Randy Brecker adds his trumpet to the finale. Not much to say about this exercise. It never gets embarrassing like its predecessor, even when the flutes arrive (Coltrane is a saving grace here, with one soprano cut, the rest on tenor). While mostly competent, there are occasional strong moments, including a strong finish on three John Coltrane space elegies, which even Liebman takes on tenor. B

Andy Middleton: The European Quartet Live (2005 [2007], Q-rious Music): OK, this is weird: next up after Saxophone Summit, I pick a CD almost at random -- well, I discarded two singers first -- and get a saxophonist whose website starts off with praise from Joe Lovano, Michael Brecker, and David Liebman (also John Abercrombie). Biography is patchy. Plays tenor sax, maybe a little soprano. Based in New York City, maybe also in Austria (although the record label is in Germany). Has an American Quartet as well as this European Quartet, but the latter includes drummer Alan Jones, who hails from Portland. Has two previous albums on Intuition (2000-02), one earlier one from 1995; played in a group called the Fensters back in 1991. Figure him for postbop: he's not very far out of the mainstream, but he has an arresting sound and some fancy moves. Pianist Tino Derado helps out. Will give it another shot. [B+(***)]

Art Pepper: Unreleased Art, Vol. III: The Croydon Concert, May 14, 1981 (1981 [2008], Widow's Taste, 2CD): A hot set with a group -- Milcho Leviev on piano, Bob Magnuson on bass, Carl Burnett on drums -- Pepper toured often but recorded rarely with. He calls them his favorite group, and they repay the compliment -- there seems to be no end to wondrous tapes from his last years. A-

Sheila Cooper: Tales of Love and Longing (2006 [2007], Panorama): Singer/alto saxophonist, originally from Canada, now based in New York, working in a cozy little duo with Austrian pianist Fritz Pauer. Third album. My "pre-release copy" only identifies Panorama as the label, but it looks like this has been picked up and reissued (or will be -- don't have date) by Candid. Songs, including one original, tend to be slow and torchy, her voice capable and assured but not all that remarkable. I do, however, love the sound of her saxophone in these tight settings. B+(*)

Michael Dessen Trio: Between Shadow and Space (2007 [2008], Clean Feed): Nice new packaging for this batch of Clean Feed releases: a thin cardboard fold-out sleeve with a clear plastic liner for the disc. Dessen plays trombone and computer. Studied at Eastman School of Music, University of Massachusetts, UC San Diego; teaches at UC, Irvine. Has several academic papers, including two on Yusef Lateef. Second album, not counting four with group Cosmologic. Trio includes Christopher Tordini on bass, Tyshawn Sorey on percussion. Free trombone over a dense and intriguing brew of bass, percussion, and whatever. B+(**)

Fight the Big Bull: Dying Will Be Easy (2006 [2008], Clean Feed): Richmond, VA big band (well, nonet), led by guitarist Matt White, who writes the songs but tends to get drowned out by the six horns, especially the dual trombones. Rough and tumble, not quite free, but loud and noisy. On a lark, I checked out a couple of YouTube videos, which are badly shot and even more roughly played, although the recognizable line to "The Night They Drove Old Dixie Down" is amusing. Album with Ken Vandermark is reportedly in the works. B+(*)

Luis Lopes: Humanization 4Tet (2007 [2008], Clean Feed): Don't know much about Lopes -- a couple of google matches appear to be false positives. This one plays guitar, is probably Portuguese, wrote all the pieces on his first album. The other players are slightly more well known: Aaron Gonzalez (double bass) and Stefan Gonzalez (drums) are sons of trumpeter Dennis Gonzalez. Rodrigo Amado is a Portuguese tenor saxophonist who's put together a number of solid albums, both under his own name and with Lisbon Improvisation Players (which has been known to include Gonzalez père). Amado's full-voiced honking dominates here, but a section where the guitar leads takes on much the same melodic shape, so I figure the guitarist is always pushing this music along even when he's not conspicuous. Another clue is that this is probably Amado's strongest outing yet, mostly because he rarely gets a chance to let up. B+(***)

Kirk Knuffke Quartet: Bigwig (2007 [2008], Clean Feed): Trumpet player, originally from Denver, now in New York. First album, with Brian Drye doubling the brass on trombone, Reuben Radding on bass, Jeff Davis on drums. Fairly free. I like the brass dynamics. B+(*)

Carlos "Zingaro"/Dominique Regef/Wilbert DeJoode String Trio: Spectrum (2004 [2008], Clean Feed): A bit from the liner notes (Rui Eduardo Paes): "Violins were forbidden in the 'Machine Gun' years, when 'classical instruments' were seen as symbols of a closed, authoritarian, and hierarchic music system. Even today, there's suspicion. European musicians in the new 'free' music came out of both the classical and jazz traditions but, influenced by the turbulent political climate, rejected their origins." Maybe that's an avant-garde thing, although my impression has long been that the line between avant-jazz and avant-classical has never been clearly drawn in Europe -- e.g., the relationship between Cornelius Cardew and AMM. While there are plenty of bad examples of small and large string groups backing jazz musicians, violin soloists in jazz are more likely to draw on folk fiddle or on the raw noisiness of the instrument -- the Velvet Underground's viola was as ear-opening as anything specifically within a jazz context. I suppose the reason this comes up with Zingaro is that he does have the Euroclassical background and tends to get slotted in avant-classical as much as jazz. Still, this is in no sense a polite piece of chamber music. DeJoode plays bass, but Regef fills the middle ranges with hurdy gurdy, providing buzzes and drones that suggest electronics. Three long pieces, complexly varied textures, with an uncomfortable bite to the sound that never really gets monotonous. Most sources skip the quotes around Zingaro, which may be a nickname or stage name -- Carlos Alves seems to be the given name, although sometimes this just appears as Carlos Zingaro Alves (with or without quotes). He has at least 16 albums since 1989; haven't heard any others, but I've run across him in side roles. This gained enough traction the second play I'm holding it back for a third. [B+(***)]

Elliott Sharp/Scott Fields: Sharfefelder (2007 [2008], Clean Feed): From Fields' notes: "This is what happens when you kid around." Two avant guitarists, both with long discographies, including some together. Chemistry can do amazing things. It can also leave you with nothing but an incoherent mess. More of the latter here. B-

Sten Sandell/Mattias Ståhl: Grann Musik (Neighbour Music) (2007 [2008], Clean Feed): Sandell plays piano, sometimes prepared. He tends to be abstract, sometimes turning out long, dramatic lines that strike me as grandstanding. Ståhl plays vibraphone, marimba, glockenspiel -- instruments that produce tones that fit neatly within the crevices of the piano. They almost fit as one, which is an accomplishemt but not necessarily a plus. B

Todd Sickafoose: Tiny Resistors (2007 [2008], Cryptogramophone): Bassist, probably more electric than acoustic but plays both; originally from San Francisco, now based in New York. Third album. Has a substantial number of side credits since 1998, including Jenny Scheinman, Tin Hat, Ani DiFranco. I figure this as a fusion album, one of those big, sweeping prog things, loud, powerful, always listenable, sometimes interesting. Alan Ferber's trombone stands out among the horns. DiFranco plays some electric ukelele. B+(*)

The Jeff Gauthier Goatette: House of Return (2008, Cryptogramophone): Violinist, b. 1954, based in Los Angeles, had a couple of records on 9 Winds before he founded Cryptogramophone in 2000. This is his third record since. Quintet, with Nels Cline on guitar, David Witham on piano, Joel Hamilton on bass, Alex Cline on drums. Sort of avant-fusion, basically prog rock tweaked into funny shapes -- similar to the Todd Sickafoose record (trading the horns for violin), or various records by the Cline brothers. B+(*)

Freddie Hubbard & the New Jazz Composers Octet: On the Real Side (2007 [2008], 4Q/Times Square): Hubbard's early 1960s, both as a leader and especially as a sideman, made up one of the great individual stretches in jazz history -- hard bop, postbop, avant-garde, he could and did do it all. But after about 1965 he started to thin out, with a couple of superb fusion albums in 1970 (Red Clay, Straight Life), even less after 1980, a rare comeback in 1991 (Bolivia), then he literally blew his lip out in 1992 and that was that. This is his first album since then, produced and carefully shepherded by David Weiss. Not clear how much Hubbard plays. He's credited with flugelhorn, with Weiss on trumpet and a lot of firepower in the group -- three saxes plus guest Craig Handy on three cuts, Steve Davis on trombone, guest Russell Malone on one cut, piano, bass, and drums. Compositions are all by Hubbard. Haven't checked to see if any are new, but they all have arranger credits -- mostly Weiss, Davis on one, bassist Dwayne Burno on two. Weiss is a crack arranger, and if you're into that sort of thing, these pieces are crisp and snappy. I find that it leaves me wondering about the leader. B

Roswell Rudd Quartet: Keep Your Heart Right (2007 [2008], Sunnyside): This reproduces the lineup and two songs from one of my all-time favorite albums, Rudd's Flexible Flyer (1974). That album included Hod O'Brien on piano, Arild Andersen on bass, and Sheila Jordan singing -- Rudd seems to have an aversion to drummers, even when he's playing African music. This time it's Lafayette Harris on piano, Bradley Jones on bass, and Sunny Kim singing -- not a fair comparison, especially pitching any singer up against the incomparable Jordan. More songs this time -- close to all the songs Rudd ever wrote lyrics to. Terrific trombone -- making me wish that was more the focus. Even here, the two repeats stand out. Maybe the others will kick in. [B+(**)]

Scott DuBois: Banshees (2007 [2008], Sunnyside): Guitarist, b. 1978, based in New York. Recorded two previous albums with Dave Liebman on Soul Note. This group consists of Kresten Osgood on drums, Thomas Morgan on bass, and Gebhard Ullman on tenor/soprano sax and bass clarinet. One thing I've noticed lately is that some saxophonists seem to get much sharper with a guitar guding them along. I've heard half-dozen or so albums by Ullman, respect his ambitions as a free player, but until now I've never really seen him hold it all together before. The Luis Lopes is another like this, but DuBois is much more out front -- his solos tend to be short but they strongly reinforce the pieces. Played this half-dozen times and it keeps gaining on me. A-

Guillermo Klein/Los Gauchos: Filtros (2007 [2008], Sunnyside): Pianist, b. 1970 in Argentina, attended Berklee 1990-94, moved on to New York. Los Gauchos is his big band, a mix of Latin players and other New York talents, including some players with substantial discographies of their own: Miguel Zenon, Chris Cheek, Bill McHenry, Ben Monder. Over a half-dozen albums, he's developed into an expansive and inventive arranger -- I'm tempted to compare him to Maria Schneider, but not being a big fan of either that may be too tongue-in-cheek. Still, the Monkish "Vaca" here is pretty irresistible, a good track to check out. Wish he wouldn't sing. B+(**)

Kris Davis: Rye Eclipse (2007 [2008], Fresh Sound New Talent): Canadian pianist, based in New York since 2002, has three albums now with this superb quartet, each showing advance. Group includes Jeff Davis (drums; from Colorado, presumably not related), Eivind Opsvik (bass), and Tony Malaby (tenor sax). The early albums immediately appealed for Malaby's distinctive edge. The pianist is developing a similarly rugged approach -- not just offsetting block chords, but in a piece like "Wayne Oskar" she leads off with intriguing abstractions then backs off as Malaby slips in to finish off her thoughts. A-

Jon Irabagon's Outright! (2007 [2008], Innova): Alto saxophonist, has done some good work lately, appearing on a pick hit (Mostly Other People Do the Killing) and another featured disc (Jostein Gulbrandsen) from the latest Jazz Consumer Guide. This one goes for overkill, starting with cover pics of masses of arm-waving fans -- I could see him moving the people but drawing them is another matter. A lot of talent here: three-fourths of Kris Davis' quartet -- Davis on piano/organ, Eivind Opsvik on acoustic bass, Jeff Davis on drums -- plus Russ Johnson on trumpet and Irabagon. Two cuts expand the group up toward big band mass. I don't much care for the horn duet at the beginning, but there are interesting bits throughout, including a MOPDTK-style assault on "Groovin' High." B+(*)

William Parker: Double Sunrise Over Neptune (2007 [2008], AUM Fidelilty): Recorded live at Vision Festival XII, three long pieces built around repeated bass riffs that the conductor farmed out to Shayna Dulberger, and a short bridge. With sixteen musicians, favoring strings (two violins, viola, cello, bass, guitar or banjo, oud, the leader's doson'ngoni) which elaborate the themes over horns (trumpet, three saxes, whatever "double reeds" Bill Cole plays), with vocalist Sangeeta Bandyopadhyay trading off against the latter. Oh, also two drummers, Gerald Cleaver and Hamid Drake. Whereas Parker's large groups in the past, like his Little Huey Orchestra, tended to go unhinged, this all flows together marvelously. Even a bit of wildness near the end of the second piece, which seems inevitable once you unleash saxophonists Rob Brown and Sabir Mateen, holds tight. The singer runs close to the edge of the high-pitched squeak that east (or southeast) Asian opera is prone to, but never slips over. A remarkable piece of work. A

David Murray/Mal Waldron: Silence (2001 [2008], Justin Time): Duo, recorded in October 2001, a little more than a year before Waldron passed on Dec. 2, 2002. Three Waldron songs, the title cut from Murray, three more (Sammy Cahn, Miles Davis, Duke Ellington). Not sure how to rate Waldron's performance here; Murray runs rings around him, but that's just Murray -- expansive, bracing, sometimes gorgeous (especially on bass clarinet). Both artists have excelled in duos before: Waldron with Marion Brown; Murray on several occasions, my favorite being the ballad set Tea for Two with George Arvanitas on Fresh Sound -- more of an Oscar Peterson-type player. This is much more dry. [B+(***)]

Gerald Cleaver: Gerald Cleaver's Detroit (2006 [2008], Fresh Sound New Talent): Drummer, from Detroit, based in Brooklyn (where this, despite its title, was recorded). Second album, plus 50-60 side credits. I mostly associate him with the avant-garde, since I've often run into him on records by Matthew Shipp, Roscoe Mitchell, Charles Gayle, Joe Morris, Mat Maneri, and Rob Brown. But he also shows up on more conventional postbop fare, including records by his group here: Jeremy Pelt (trumpet), JD Allen (tenor sax), Andrew Bishop (soprano/tenor sax, bass clarinet), Ben Waltzer (piano), Chris Lightcap (bass). (Actually, I don't see Pelt in his credits list.) Some flashy hornwork here, strong moments, although it's a little de trop for my taste. (Too bad he couldn't get his mentor, Detroit's patron saint Marcus Belgrave, instead of Pelt.) B+(*)

Pete Robbins: Do the Hate Laugh Shimmy (2007 [2008], Fresh Sound New Talent): Alto saxophonist. Website describes what he does as "brooklyn prog-modern (post)jazz." B. 1978, moved to New York 2002. MySpace page lists Tim Berne and Lee Konitz at top of list of influences. Two previous albums, the one I'm familiar with on Playscape (Waits & Measures) comes closer to bearing that out. This one doesn't. The keyboards and guitar are soft and moody, and the horns (including Jesse Neuman on trumpet and Sam Sadigursky on tenor sax, clarinet, and bass clarinet) rarely rise above that. Must be that "prog-modern (post)jazz" thing he's looking for. B

Ramón Díaz: Unblocking (2007 [2008], Fresh Sound New Talent): Drummer, originally from the Canary Islands, based in Barcelona, runs a hard bop quintet that last time out (Diàleg) I compared favorably to Art Blakey and the Jazz Messengers. Same group, a little more varied, with one "trad." piece, a slow bit, and some Fender Rhodes separating this from the 1960s. Blakey would have loved to have worked with the front line here -- saxophonist Jeppe Rasmussen, trumpeter Idafe Pérez -- and also with pianist José Alberto Medina (who has good records on his own). But he would think that the drummer should be a bit louder. B+(***)

The Alon Farber Hagiga Sextet: Optimistic View (2006 [2008], Fresh Sound New Talent): Israeli band, led by soprano saxophonist Farber; hagiga means celebration. Has a previous FSNT album by the Hagiga Quintet: nice record, as is this one. Loose rhythm with middle eastern (and possibly Latin) touches, a second horn in Hagai Amir's alto sax; piano and guitar aiding the flow. B+(**)

Norma Winstone: Distances (2007 [2008], ECM): English vocalist, b. 1941, cut a well-regarded record in 1971 (Edge of Time), but more often worked with others: Michael Garrick; Mike Westbrook; John Taylor and Kenny Wheeler in the group Azimuth. AMG counts nine records under her name. This one, like her 2002 Chamber Music (Universal) puts her in front of Glauco Venier (piano) and Klaus Gesing (soprano sax, bass clarinet). Hard to characterize her as a singer: she has a calm, stately voice, seemingly unaffected by the vogue of jazz singers emulating horn players. Gesing is consistently a plus here, especially when he lifts up one of the many slow pieces. Cole Porter's "Every Time We Say Goodbye" is a choice cut, but maybe that's just because it's easiest to relate to. B+(**)

Gary Morgan & PanAmericana!: Felicidade (Happiness) (2007 [2008], CAP): Twenty-piece big band, plays Brazilian music, with pieces by Jobim, Pascoal, Jovino Santos Neto, and others, including five by Morgan. Morgan was born in Chile, moved to Canada very young, played saxophone, later switched to bass. Studied at Berklee in 1980, but he seems already to have immersed himself in Brazilian music. Moved on to New York, where PanAmericana is based, although he also leads another orchestra based in Toronto. He's not in the personnel list here. For that matter, few (if any) of the musicians here are Brazilian. I don't have much feel for bands like this: when they're cruising they make for pleasant but uninteresting background music, when they slow down they get clumsy. Second album for the group. B-

The Joe Ascione Quartet: Movin' Up (2007 [2008], Arbors): Drummer, b. 1961, third album as leader (first was a tribute to Buddy Rich), plus 60 or more side credits, including membership in Frank Vignola projects Travelin' Light and the Frank and Joe Show (he's Joe). Quartet includes Frank Tate on bass, John Cocuzzi on piano and vibes, and Allan Vaché on clarinet, an interesting and somewhat whimsical lineup, especially when the vibes are in play. Mostly tunes from Gershwin and Porter, with some oddities thrown in -- "The Aba Daba Honeymoon," "Zip-A-Dee-Doo-Dah's Got Rhythm." "Norwegian Wood" usually makes me gag, but he almost gets away with it. B+(*)

Larry Ham: Just Me, Just You (2007 [2008], Arbors): Subtitle: Arbors Piano Series, Volume 17. Pianist, b. 1954, played with Lionel Hampton (1986-87) and Illinois Jacquet (1990-95); more recently appeared on several Scott Robinson records. Second album, after debuting in 2007. This one's solo. Mostlys tandards, a couple of originals, a calypso, one from Bud Powell. No complaints -- just doesn't quite break the ice. B

Chris Flory: For You (2007 [2008], Arbors): Guitarist, b. 1953, played with Benny Goodman 1978-83, with Scott Hamilton from 1978 to at least 1989. Has half-dozen albums since 1993, one of many players who started on Concord and wound up on Arbors. Quintet with Dan Block (tenor sax), Jon-Erik Kellso (trumpet), Mike LeDonne (organ), and Chuck Riggs (drums). Like many swing-oriented guitarists, he tends to drop into rhythm when someone else is playing, which is kind of a waste behind the predictable LeDonne. The album fares best when Flory gets a clean lead. The horns aren't very pushy either, but are usually a plus. B+(**)

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No final grades/notes this week on records put back for further listening the first time around.

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For this cycle's collected Jazz Prospecting notes, look here.

Stephen Holmes: The Matador's Cape: America's Reckless Response to Terror (2007, Cambridge University Press)

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Chalmers Johnson wrote a review of Holmes' book for TomDispatch. Holmes provides a guide to 12 books that provide a prism into how the US reacted to the 9/11 attacks. The following is a list of books Holmes covers. The descriptions are edited down from Johnson's review (moving sentences around, cutting surplus, fixing punctuation; the quotes in these paragraphs are from Holmes' book):

• Robert Kagan, Of Paradise and Power: America and Europe in the New World Order (2003, Knopf): Why did American military preeminence breed delusions of omnipotence? While not persuaded by Kagan's portrayal of the United States as "Mars" and Europe as "Venus," Holmes takes Kagan's book as illustrative of neoconservative thought on the use of force in international politics. "Far from guaranteeing an unbiased and clear-eyed view of the terrorist threat, as Kagan contends, American military superiority has irredeemably skewed the country's view of the enemy on the horizon, drawing the United States, with appalling consequences, into a gratuitous, cruel, and unwinnable conflict in the Middle East" (p. 72).

• Michael Gordon and Bernard Trainor, Cobra II: The Inside Story of the Invasion and Occupation of Iraq (2006, Pantheon): How was the war lost? Holmes regards this book as the best treatment of the military aspects of the disaster, down to and including U.S. envoy L. Paul Bremer's disbanding of the Iraqi military.

• James Mann, Rise of the Vulcans: The History of Bush's War Cabinet (2004, Viking): How did a tiny group of individuals, with eccentric theories and reflexes, recklessly compound the country's post-9/11 security nightmares? One of Mann's more original insights is that the neocons in the Bush administration were so bewitched by Cold War thinking that they were simply incapable of grasping the new realities of the post-Cold War world. "In Iraq, alas, the lack of a major military rival excited some aging hard-liners into toppling a regime that they did not have the slightest clue how to replace.  . . . We have only begun to witness the long-term consequences of their ghastly misuse of unaccountable power" (p. 106).

• Michael Mann, Incoherent Empire (2003, Verso): What roles did Vice President Dick Cheney and Secretary of Defense Donald Rumsfeld play in the Bush administration? He argues that perhaps Mann's most important contribution, even if somewhat mechanically put, is to stress the element of bureaucratic politics in Cheney's and Rumsfeld's manipulation of the neophyte Bush: "The outcome of inter- and intra-agency battles in Washington, D.C., allotted disproportionate influence to the fatally blurred understanding of the terrorist threat shared by a few highly placed and shrewd bureaucratic infighters. Rumsfeld and Cheney controlled the military; and when they were given the opportunity to rank the country's priorities in the war on terror, they assigned paramount importance to those specific threats that could be countered effectively only by the government agency over which they happened to preside" (p. 107)."

• Samuel Huntington, The Clash of Civilizations and the Remaking of World Order (1996, Simon and Schuster): Why did the U.S. decide to search for a new enemy after the Cold War? Holmes regards Huntington's work as a "false template" and calls it misleading. Well before 9/11, many critics of Huntington's concept of "civilization" had pointed out that there is insufficient homogeneity in Christianity, Islam, or the other great religions for any of them to replace the position vacated by the Soviet Union. As Holmes remarks, Huntington "finds homogeneity because he is looking for homogeneity" (p. 136). [Johnson wonders why include this relatively old book. I suspect it because the neocon obsession with the Middle East dates back further, with Huntington and Bernard Lewis providing intellectual cover for the notion that Arabs are insurmountably alien.]

• Samantha Power, "A Problem From Hell": America and the Age of Genocide (2002, Basic): What role did left-wing ideology play in legitimating the war on terror? As Holmes acknowledges, "The humanitarian interventionists rose to a superficial prominence in the 1990s largely because of a vacuum in U.S. foreign policy thinking after the end of the Cold War. . . . Their influence was small, however, and after 9/11, that influence vanished altogether." He nonetheless takes up the anti-genocide activists because he suspects that, by making a rhetorically powerful case for casting aside existing decision-making rules and protocols, they may have emboldened the Bush administration to follow suit and fight the "evil" of terrorism outside the Constitution and the law. The idea that Power was an influence on Cheney and Rumsfeld may seem a stretch -- they were, after all, doing what they had always wanted to do -- but Holmes' argument that "a savvy prowar party may successfully employ humanitarian talk both to gull the wider public and to silence potential critics on the liberal side" (p. 157) is worth considering.

• Paul Berman, Power and the Idealists (2005, Soft Skull Press): How did pro-war liberals help stifle national debate on the wisdom of the Iraq war? Wildly overstating his influence, Holmes writes, Berman, a regular columnist for The New Republic, "first tried to convince us that the Israeli-Palestinian conflict, far from being a tribal war over scarce land and water, is part of a wider spiritual war between liberalism and apocalyptic irrationalism, not worth distinguishing too sharply from the conflict between America and al Qaeda. He then attempted to show that Saddam Hussein and Osama bin Laden represented two 'branches' of an essentially homogeneous extremism" (p. 181). Berman, Holmes points out, conflated anti-terrorism with anti-fascism in order to provide a foundation for the neologism "Islamo-fascism." His chief reason for including Berman is that Holmes wants to address the views of religious fundamentalists in their support of the war on terrorism.

• Francis Fukuyama, America at the Crossroads: Democracy, Power, and the Neoconservative Legacy (2006, Yale University Press): How did democratization at the point of an assault rifle become America's mission in the world? Holmes is interested in Fukuyama, the neoconservatives' perennial sophomore, because he offers an insider's insights into the chimerical neocon "democratization" project for the Middle East. The problem, of course, is that not even the neocons are united on promoting democracy; and, even if they were, they do not know how to go about it. Fukuyama himself pleads for "a dramatic demilitarization of American foreign policy and a re-emphasis on other types of policy instruments." The Pentagon, in addition to its other deficiencies, is poorly positioned and incorrectly staffed to foster democratic transitions.

• Geoffrey Stone, Perilous Times: Free Speech in Wartime From the Sedition Act of 1798 to the War on Terrorism (2004, WW Norton): Holmes has nothing but praise for Stone's history of expanded executive discretion in wartime. A key question raised by Stone is why the American public has not been more concerned with what happened in Iraq at Abu Ghraib prison and in the wholesale destruction of the Sunni city of Fallujah. As Holmes sees it, the Bush administration, at least in this one area, was adept at subverting public protest. Among the more important lessons George Bush, Dick Cheney, Donald Rumsfeld, Karl Rove, and others learned from the Vietnam conflict, he writes, was that if you want to suppress domestic questioning of foreign military adventures, then eliminate the draft, create an all-volunteer force, reduce domestic taxes, and maintain a false prosperity based on foreign borrowing.

• John Ikenberry, After Victory: Institutions, Strategic Restraint, and the Rebuilding of Order After Major Wars (2001, Princeton University Press): How did the embracing of American unilateralism elevate the Office of the Secretary of Defense over the Department of State? This book is Holmes' oddest choice -- a dated history from an establishmentarian point of view of the international institutions created by the United States after World War II, including the World Bank, the International Monetary Fund, and NATO, all of which Ikenberry, a prominent academic specialists in international relations, applauds. Holmes agrees that, during the Cold War, the United States ruled largely through indirection, using seemingly impartial international institutions, and eliciting the cooperation of other nations. He laments the failure to follow this proven formula in the post-9/11 era, which led to the eclipse of the State Department by the Defense Department, an institution hopelessly ill-suited for diplomatic and nation-building missions.

• John Yoo, The Powers of War and Peace: The Constitution and Foreign Affairs After 9/11 (2005, University of Chicago Press): Why do we battle lawlessness with lawlessness (for example, by torturing prisoners) and concentrate extra-Constitutional authority in the hands of the president? In this final section, Holmes puts on his hat as the law professor he is and takes on George Bush's and Alberto Gonzales' in-house legal counsel, the University of California, Berkeley law professor John Yoo, who authored the "torture memos" for them, denied the legality of the Geneva Conventions, and elaborated a grandiose view of the President's war-making power. Holmes wonders, "Why would an aspiring legal scholar labor for years to develop and defend a historical thesis that is manifestly untrue? What is the point and what is the payoff? That is the principal mystery of Yoo's singular book. Characteristic of The Powers of War and Peace is the anemic relations between the evidence adduced and the inferences drawn" (p. 291). His conclusion on Yoo and his fellow neocons: "[I]f the misbegotten Iraq war proves anything, it is the foolhardiness of allowing an autistic clique that reads its own newspapers and watches its own cable news channel to decide, without outsider input, where to expend American blood and treasure -- that is, to decide which looming threats to stress and which to downplay and ignore" (p. 301).

Fred Kaplan: Daydream Believers: How a Few Grand Ideas Wrecked American Power (2008, Wiley)

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(pp. 1-2):

Nearly all of America's blunders in war and peace these past few years stem from a single grand misconception: that the world changed after September 11, when in fact it didn't.

Certainly things about the world changed, not least Americans' sudden awareness that they were vulnerable. But the way the world works -- the nature of power, warfare, and politics among nations -- remained essentially the same.

A real change, a seismic shift in global politics, had taken place a decade earlier, with the collapse of the Soviet Union and the end of the Cold War. Yet America's political leaders at the start of the twenty-first century misunderstood this shift -- and in a way that their misreading of 9/11 would exacerbate.

George W. Bush and his top aides in the White House and the Pentagon came to office believing that the United States had emerged from its Cold War victory as the world's "sole superpower" and that they could therefore do pretty much as they pleased: issue orders and expect obeisance, topple rogue regimes at will, honor alliances and treaties when they were useful, and disregard them when they weren't.

But in fact, the end of the Cold War made America weaker, less capable of exerting its will on others. And its leaders' failure to recognize this, their inclination to devise policies based on the premise of omnipotence, made America weaker still.

The Mirage of Instant Victory (pp. 7-8):

Near the start of his [2000] presidential campaign, Bush had given a speech at The Citadel -- the historic military college in Charleston, South Carolina -- spelling out his top priorities for a new defense policy. He would deploy antiballastic missiles "at the earliest possible date," even if doing so meant withdrawing from the ABM Treaty, the long-standing centerpiece of Russian-American arms control accords. And he would transform the United States military. A "revolution in the technology of war" was in the works, he declared. Battles of the future would be won not by an army's "mass or size," but by its "mobility and swiftness," and vital new roles would be played by information networks and by highly accurate missiles and bombs.

If taken seriously, this was a truly dramatic pronouncement. It would mean a new concept of nuclear deterrence, an overhaul of the Army, a new look for war and peace.

As president, Bush said, he would order his secretary of defense to conduct "an immediate, comprehensive review of our military -- the structure of its forces, the state of its strategy, the priorities of its procurement." The secretary would have "a broad mandate -- to challenge the status quo and envision a new architecture of American defense for decades to come." Now that he was president, he told Rumsfeld to carry out that comprehensive review.

(p. 40):

[Rumsfeld's] disdain toward the Army was reinforced by his frequent dealings with Tommy Franks, the general he had come to know best. Franks, by no means a strategist, was widely regarded as a dim bulb, even by fellow officers. Rumsfeld, by nature impatient with people who weren't smart, despised Franks and wanted to get rid of him after the Afghanistan war. But over the Christmas holidays, Bush invited Franks out to his ranch in Crawford, Texas. Franks was a tall, salty, plain-speaking, profane Texan -- he had gone to the same high school as Bush's wife, Laura -- and he and the president got along like gangbusters. Bush called Rumsfeld and said, "Tommy Franks is a hell of a guy!" Rumsfeld realized that Franks would have to stay.

(p. 49):

The invasion of Iraq began on March 19, 2003. In the battlefield phase, it went, to a remarkable degree, as planned. The second part of the war -- after Saddam fled and his regime crumbled -- went disastrously, in part because it had not been planned at all.

Rumsfeld was so enamored of transformation -- as a theory of war, as a tool for control, and as an explanation for what still seemed the triumph in Afghanistan -- that he forgot, if he ever fully understood, that winning wars means more than hitting targets or winning battles. Rumsfeld didn't plan for Phase IV -- securing and stabilizing the country after the capital had fallen -- because he didn't think it would be necessary. [ . . . ]

Rumsfeld was not alone in his failure to think about the post-battle phase. As Wass de Czege noted in his memo on the war games, senior military leaders weren't thinking about it, either. There were no U.S. Army field manuals still in print on the subject of how to end a war.

Chapter "The Fog of Moral Clarity" -- deals with North Korea (pp. 54-55):

The first President bush launched a policy of "comprehensive engagement" with North Korea -- an all-fronts diplomatic campaign to keep Kim Il Sung from completing the facility or, short of that, from reprocessing the fuel rods. The campaign had little effect until September 27, 1991, when Bush announced that he was unilaterally dismantling all U.S. tactical nuclear weapons worldwide. He made this announcement in the context of rapidly warming relations between the United States and the Soviet Union amid the winding-down of the Cold War. But the move would also eliminate the hundreds of tactical nukes -- most of them on short-range missiles -- that America had deployed in South Korea decades ago to deter a North Korean invasion.

This tangible gesture unleashed a torrent of diplomatic activity. At the end of the year, after American officials confirmed that they had removed all nuclear weapons from the region, the leaders of North and South Korea -- who had never signed a peace treaty to end the war of 1950-1953 -- negotiated a mutual nonaggression pact. And North Korea, which had signed the Nuclear Non-Proliferation Treaty back in 1985, signed the NPT's "safeguards" agreement, allowing the International Atomic Energy Agency to station inspectors and cameras inside its reactors and to place the nuclear fuel rods under lock and key.

By the time Clinton was elected president, relations were breaking down. North Korea refused to let the IAEA's inspectors inside a building that stored nuclear waste. The South Korean government arrested a ring of North Korean spies. The annual U.S.-South Korean military exercises, known as "Team Spirit," which Bush had suspended at the start of 1992, were scheduled to resume.

In March 1993, just over a month after Clinton took office, a Pyongyang spokesman denounced Team Spirit as a "nuclear war game preliminary to the invasion of North Korea." Kim Il Sung put the country on alert, ordering a dusk-to-dawn blackout and holding a massive rally -- over one hundred thousand attended -- in the capital.

This goes on for several more pages with details of ups and downs in suspicions, threats and negotiations; Kim Jong Il replaces Kim Il Sung; George W. Bush replaces Clinton; Kim Dae Jong is elected head of South Korea, favoring a more conciliatory policy toward the North (p. 61):

When Kim Dae Jong arrived in Washington, Bush publicly criticized him and his sunshine policy. Bush and his advisers, especially Donald Rumsfeld and Vice President Dick Cheney, decided not only to isolate North Korea, in the hopes -- in their minds, the near-certainty -- that the regime would crumble, but also to ignore South Korea, in hopes that its next election would restore a conservative to office.

Bush turned out to be the naïf. Kim Jong Il survived U.S. pressure. And Kim Dae Jung was soon replaced by Roh Moo Hyun, a populist who ran on a campaign that was not only pro-sunshine but anti-American.

(p. 70):

As the talks got under way, Jack Pritchard -- one of the few administration officials who had ever talked with North Korean diplomats -- resigned in protest. His job title was envoy for North Korean negotiations, yet he was prohibited from conducting negotiations. He asked himself, "What am I doing in government?" Pritchard had heard, from reliable quarters, that White House and Pentagon higher-ups referred to him as "the Clinton guy" and didn't want him involved in the six-party talks, lest he take them too seriously. Powell asked him not to quit, or at least not to do so publicly. Pritchard respectfully declined on both counts. He helped set up the six-party talks, left when they started, and went to work at the Brookings Institution. He explained his reasons for quitting to anyone who asked.

(p. 74):

The Bush administration's whole approach to North Korea hinged on a premise that turned out to be untrue -- that the United States had the power to set the terms of a new world order and, therefore, didn't need to compromise with competing concepts or interests.

The failure of American policy toward North Korea stemmed from a failure to grasp the implications of this new balance of power in Asia. It also stemmed from a failure to understand -- a willful refusal even to try to understand -- Kim Jong Il's motives in this standoff, the patterns of behavior he displayed, and the strategic options for dealing with them. Kim's eccentricities had little to do with it. Had he been the sanest leader on the planet, he would have had a rational motive to develop a nuclear arsenal. His diplomats had studied the two Gulf Wars carefully, and concluded that Saddam Hussein's big mistake lay in not having nuclear weapons to deter U.S. intervention. They made precisely this point in an official statement released back in April 2003, just after American tanks rolled into Baghdad: "The Iraq war teaches us a lesson that, in order to prevent a war, and defend a country's security and a nation's sovereignty, it is necessary to have a powerful physical deterrent."

Chapter "Chasing Silver Bullets" -- on missile defense (p. 79):

The debate over missile defenses dated not to Reagan's Star Wars or even to the 1972 ABM Treaty but much further back, to the mid-to-late 1950s, when weapons scientists inside the government, carrying high-level security clearances, first discovered the technical obstacles. Roughly every ten years sine, the debate has repeated itself, with the same arguments, often among the same people. And each repetition has followed the same pattern, with the president and his aides at first enthusiastic about some technological advance that makes shooting down missiles seem suddenly feasible -- then realizing that the same old technical obstacles remain.

If Bush and his aides had known this history -- if they had known that the main critique of missile defenses was not political or philosophical but rather technical -- they might have stepped more gingerly before tripling the missile-defense budget yet again, withdrawing from the ABM Treaty, and rushing a brand-new missile-defense system into production and deployment without having any idea whether it could really defend against an attack. But they didn't know the history; they thought that history was irrelevant anyway; and so they plunged ahead.

(p. 85):

It has been a recurring pattern throughout the history of arms procurement: when one rationale for buying a weapon proves untenable, its most impassioned advocates shift to a different rationale. The advocates know that the weapon is vital to the national defense; they figure that opposition stems from some ulterior motive (political hostility or pacifism or a rivalry with the branch of the armed services that's funding the weapon). For many, it would be too drastic a cognitive shift to reassess the wisdom of a project; better to devise a new argument that justifies it. [ . . . ]

This pattern of shifting rationales has been particularly acute in the history of the ABM, because the desire for a nuclear defense is understandably strong -- and because the case for specific ABM systems has fallen apart so repeatedly.

This is followed by various examples from the 1950s, 1960s, and 1970s, including this setback (pp. 88-89):

But a bigger shock came in the spring. On April 9, 1970, Kissinger's assistant on strategic issues, Laurence Lynn, met in DuBridge's White House office with two senior executives from Bell Telephone Laboratories, Safeguard's prime contractor. The executives had called the meeting to announce that they wanted out of the ABM business. They recited all the ways that Safeguard could be overwhelmed by the offense, and concluded -- as Lynn put it afterwards in a secret/eyes-only memo to Kissinger -- that Bell no longer wnted "to be associated with a program which cannot technically perform the missions the government claims it will perform."

Nixon and Kissinger were shocked. Nixon wrote in the margins of the memo, "My guess is that the real reasons are their scientists" -- who might have been influenced by all the Nobel laureates opposing the system -- "and P.R. fears." Whatever the motive, they knew this was a disaster. Once Congress found out that the prime contractor was giving up lucrative business on the grounds that Safeguard wouldn't work, the program was doomed.

Nixon finally negotiated the ABM treaty as a way to cover up the contractor's unwillingness to build the unworkable system. Reagan didn't understand that at all when he came up with his own Star Wars program.

(p. 106):

On September 11, Condoleezza Rice, Bush's national security adviser, was scheduled to give a speech on, as she put it, "the threats the problems of today and the day after, not the world of yesterday." The main topic was to be missile defense; her prepared text which was later leaked to the press, said nothing about terrorism. She never delivered the speech because that morning, terrorists flew two passenger jetliners into the World Trade Center and another one into the Pentagon.

The attack suggested that ballistic missiles might not be the most likely threat facing America; that even if missile defenses could be made to work, a foe could simply strike with other, far cheaper and easier weapons. But it only galvanized Bush and Rumsfeld to push full speed ahead.

(p. 112):

Spending on missile defense continued soaring, to $10 billion a year and beyond, an amount much larger than the budget for any other single weapons program. It remained a great boon for contractors. And Bush still believed in the idea. To cut back would be to admit that the idea was wrong, that the money spent so far -- over $100 billion since Ronald Reagan sparked its revival nearly twenty years earlier -- had been a waste. Maybe it would work one day. Some enemies might think it works now. Menawhile, there was still the hope that America's enemies might be vanquished, that the axis of evil would collapse, and that freedom would supplant tyranny across the planet.

As Bush began his second term, he adopted this hope as an article of faith and as the centerpiece of his foreign policy.

(pp. 126-129):

After September 11, the Bush White House was looking for new ideas to deal with this new threat, ideas that went beyond traditional Realism. The PNAC report seemed to fit the times,a nd the PNAC authors were well placed to argue its case.

On June 1, 2002, President Bush delivered the commencement address at West Point and laid out a new doctrine -- a "Bush doctrine" -- on national security. The doctrines of deterrence and containment, which served the nation well in the Cold War, were, he said, obsolete. "Deterrence -- the promise of massive retaliation against nations -- means nothing against shadowy terrorist networks with no nation or citizens to defend," the speech declared. "Containment is not possible when unbalanced dictators with weapons of mass destruction can deliver their weapons on missiles or secretly provide them to terrorist allies. . . . If we wait for threats to fully materialize, we will have waited too long. . . . We must take the battle to the enemy, disrupt his plans, and confront the worst threats before they emerge." That is, we must take "preemptive action."

The argument in Rice's Foreign Affairs article -- that rogue regimes were living on "borrowed time" and that they can be dealt with through classic deterrence -- fell by the wayside.

At this point, though, Bush had not yet drawn the link between security and freedom, the link that would animate his second inaugural address. That connection clicked three weeks later, on June 20, when Dick Cheney flew to a resort in Beaver Creek, Colorado, to chair the World Forum, the annual conference of the American Enterprise Institute. The AEI was Washington's leading neocon think tank. It has served as a Republican cabinet-in-exile while Clinton was president, and it was riding high now that many of its denizens from those years were back in power.

At that conference, Cheney heard a galvanizing speech by Natan Sharansky. [ . . . ]

Many of those at the AEI World Forum knew that President Bush was about to decide on an administration policy toward the Israeli-Palestinian conflict. Perle, who at the time was chairman of Rumsfeld's Defense Advisory Board, had persuaded Sharansky to deliver the forum's keynote address, in hopes that he might have an impact.

Nine months had passed since the September 11 attacks, but they still shaped the way Americans thought about everything related to foreign policy. Sharansky knew this -- he felt the same way -- and he placed the topic of his speech in that context.

The Israeli-Palestinian conflict, he began, was "not a tribal war between Jews and Arabs in the Middle East," but rather a key battle in "the first world war of the twenty-first century, waged between the world of terrorism and the world of democracy." Just as the Cold War divided the world into democracy and Communism, so, after 9/11, have we returned "to the world of two poles" -- this time, "democracy and terrorism." The West's key task, he said, was "to expand the world our enemies try to destroy" -- that is, "to export democracy."

He urged America not to push for a Palestinian state -- not yet. Yasser Arabat, the PLO chairman, was a dictator and a terrorist; the mere granting of statehood would not turn him into a responsible leader, because he would still be a dictator and, therefore, would still lead a terrorist state. [ . . . ]

Sharansky acknowledged that many people thought Arabs and democracy were incompatible, but he recalled that many people had said the same thing about Russians and, before that, at the end of World War II, about the Japanese. Yet democracy had triumphed in Russia and Japan, and it could triumph in the Middle East, too. "Democracy is for everybody!" he exclaimed. (The text of the speech printed the sentence in italics.) "What a powerful weapon, democracy! What a drug for the people!" Not only does it allow people the freedom to say and d o as they pleased, but -- because it makes leaders accountable to the people, and because people want to live in peace -- it is also, Sharansky said, "the best guarantee of security."

A nation's interests and ideals, as one.

Cheney had spoken with Sharansky a few times over the years. They were scheduled to meet for a half hour after the speech. They ended up talking for an hour and a half. Cheney said he would pass Sharansky's comments on to the president.

Four days later, in the White House Rose Garden, Bush gave his much-anticipated speech about the Israeli-Palestinian conflict. Its theme came straight out of Sharansky's AEI address. The formation of an independent state and Israel's withdrawal from its territories, he said, should be preceded by -- and explicitly linked to -- the Palestinians' move toward democracy.

"I call on the Palestinians to elect new leaders, leaders not compromised by terror," Bush said. "I call upon them to build a practicing democracy, based on tolerance and liberty." These new leaders, Bush predicted (following Sharansky to a T), will be able to work out security arrangements with Israel. And after that, "the United States will support the creation of a Palestinian state."

The problem, of course, was that the Palestinians never got the hang of democracy -- they kept electing unapproved ("compromised by terror") leaders, the proof of their inadequacy being Israel's inability to work out the requisite security arrangements. The neocons are often charged with being agents not just of Israel but of the Likud bloc; in fact, Bush picked an even stranger bed fellow, one far to the right of Likud (pp. 129-130):

Sharansky was on a plane heading back to Israel when Bush delivered the speech. Perle later called him on the phone to tell him about it. "He was speaking your words," Perle told him. Sharansky was thrilled. The news, he wrote later, was "almost too good to be true."

In Israel, Sharansky was widely viewed as an obstructionist to peace talks. Long before the AEI Forum, he had presented his plan to Ariel Sharon's government, which brusquely rejected it. There was no chance Arafat would stp down or allow pluralism. Maybe Sharansky was right; maybe that meant there could be no peace as long as Arafat was in charge. But to make Palestinian democracy a precondition for talks was equivalent to saying there would be no talks, and not even Sharon was willing to go that far.

(pp. 144-145):

The crucial thing was that his views fits. They provided an intellectual foundation, an air of legitimacy, for Bush's view of the world. In a pre-inaugural interview with the Washington Times, Bush said, "If you want a glimpse of how I think about foreign policy, read Natan Sharansky's The Case for Democracy." On CNN, he elaborated on the plug, "Sharansky's book," he said, "confirmed . . . what I believe . . . that deep in everybody's soul -- everybody's soul -- is this deep desire to be free. That's what I believe. No matter where you were raised, no matter your religion, people want to be free. And that a foreign policy, particularly from a nation that is free, ought to be based upon that thought."

(p. 153):

Rumsfeld wanted to get into Iraq, crush Saddam's army, overthrow his regime, then get out. The whole point of military transformation, as he saw it, was to demonstrate that America could project power and topple rogue regimes with a small, light force and that, therefore, it could do so repeatedly, anytime, anywhere, at low cost and little effort. To get involved in a serious postwar occupation -- stabilization, security, nation-building, and all the rest -- would nullify the concept; it would bog down lots of troops for a long time.

In short, Rumsfeld did not miscalculate how many troops would be needed to stabilize Iraq after the war, as some critics later charged; he understood the calculations all too well. Rather than ratchet up the troop levels to meet that mission, he simply side-stepped the mission. He wasn't interested in it, didn't think postwar stabilization was what a modern military -- especially a transformational military -- ought to be doing.

(pp. 155-156):

Here, though, Rumsfeld's plan hit two roadblocks. The first, unexpectedly, was President bush. At an NSC meeting in February, a few weeks before the invasion, Feith mentioned in passing Chalabi's impending government. Bush interrupted him. We're not choosing anybody as Iraq's leader, he said. That's for the Iraqi people to decide. A few days later, Wolfowitz, who had not been at the earlier meeting and apparently had not been briefed on it by Feith, brought up Chalabi again. Bush lashed out. This is about democracy, Bush said. He had nothing for or against Chalabi, but the United States was not going to put its "thumb on the scale."

Now Rumsfeld and his assistants were in a spot. The invasion was about to go forward with the small force that Rumsfeld had demanded. He was convined it would be enough to beat the Iraqi Army and topple Saddam; in that, he turned out to be right and the generals turned out to be wrong. But his solution for postwar order -- his excuse for not thinking about, much less authorizing a plan for, Phase IV -- had just been overridden by the president.

Some defense secretaries might have hurriedly prepared a new plan. Rumsfeld prepared an end run. Right after Saddam's regime fell and American troops took the capital, Wolfowitz supplied Chalabi and more than six hundred of his Free Iraqi Fighters with a transport plane to Nasiriya.

Then came the second roadblock -- the Iraqi people. After a brief flurry of excitement, Chalabi never sparked popular support. He allied himself with one political party after the next, ran some ministries in transition governments, and headed a de-Baathification board for a while. But he alienated the various party chiefs. By the time parliamentary elections took place, he ran on his own ticket -- and didn't attract enough votes to win a seat.

The only option left for Rumsfeld, at this point, was denial. The Department of Defense had executive authority over postwar Iraq. But by June 2003, just a couple months into the occupation, it was clear to several officials who watched him at NSC meetings on the subject that the secretary of defense had lost interest.

(p. 163):

But it indicated no such thing. Had Bush looked at his own country's history, he would have seen that the election sporting one of the highest turnouts ever, with 81 percent of the eligible population voting, was the election of 1860 -- the election right before the American Civil War. He would have seen, in other words, that high turnouts don't necessarily reflect great harmony, that they can also presage implacable conflict and impassioned violence.

In the 2005 Iraqi election, Sunnis voted almost entirely for Sunni parties, Shiites voted almost entirely for religious Shiite parties (the explicitly secular Shiite candidates won only a handful of seats), and the Kurds ratified a nonbinding referendum to secede from Iraq altogether. The Iraqis didn't vote for a free society; rather, each ethnic or religious group voted for a society in which it would dominate the rival groups. And the act of voting that way -- the politicization of social tensions -- hardened their mutual hostilities.

When Israel attacked Lebanon in 2006 (pp. 171-172):

When asked at her press conference why she hadn't embarked on shuttle diplomacy already, Rice replied, "I could have gotten on a plane and rushed over and started shuttling," but "it wouldn't have been clear what I was shuttling to do." She added, "I have no interest in diplomacy for the sake of returning Lebanon and Israel to the status quo ante. I think that would be a mistake."

Then came the remark that dropped jaws and made headlines. "What we're seeing here," she said, "is, in a sense, the growing -- the birth pangs of a new Middle East. And whatever we do, we have to be certain that we're pushing forward to the new Middle East, not going back to the old Middle East."

(p. 178):

However, out in that world, the view was very different. Against the backdrop of Bush's rhetoric about freedom, his maneuverings for material interest appeared more venal than usual; and against those maneuverings, his lofty rhetoric rang especially hollow.

For two brief periods -- just after Saddam Hussein was toppled, when American power seemed supreme, and during the Orange and Cedar Revolutions, when it seemed that freedom might really be "on the march" -- some leaders in the Middle East wondered if their days of unfettered power were numbered, if they might have to adopt political reforms to survive.

But before long, they concluded that Bush's calls for reform were bogus, a cynical veneer for big-power domination. They saw the war in Iraq as purely a play for Middle Eastern oil or as a crusade against Islam or simply as a sign of incompetence. And as American troops became bogged down in Iraq, it became clear that Bush had little leverage to press the issue in any case. Because they tought Bush didn't believe his rhetoric about democracy, they didn't have to take it seriously either. They could clamp down on their oppressed people even more, without consequence.

In their attempt to pass off America's ideals and interests as one and the same, President Bush and his advisers damaged both.

(pp. 183-183):

When Karen Hughes was appointed to the job [Undersecretary of State for Public Diplomacy] in March 2005, Condoleezza Rice introduced her at a press conference, saying, "We must do more to confront the hateful propaganda, dispel dangerous myths, and get out the truth."

A few months earlier, Charles Wolf, a longtime analyst at the RAND Corporation, wrote a paper on the subject entitled "Public Diplomacy: How to Think About It and Improve It." Almost twenty years earlier, Wolf had served with Andy Marshall on the panel that foresaw the economic downfall of the Soviet Union. Now, Wolf wrote, referring to the declining image of the United States, "Misunderstanding of American values is not the principal source of anti-Americanism." Many foreigners understand America quite well; they simply don't like what they see. It isn't myths, Wolf noted, but rather "some U.S. policies" that "have been, are, and will continue to be major sources of anti-Americanism."

Contrasts Bush's strategies with the founding precepts of the cold war era, under Truman, Acheson, Marshall, Kennan (p. 191):

By contrast, Bush's strategies neither succeeded nor endured -- not even through the two terms of his presidency -- because they did not fit the realities of his era. They were based not on a grasp of technology, history, or foreign cultures but rather on fantasy, faith, and a willful indifference toward those affected by their consequences.

Those in charge of his policies cared little about the details of warfare, knew little about the realities of the Middle East, and had not thought through what made freedom work in their own country, much less what might make it work elsewhere.

Richard Rhodes: Arsenals of Folly: The Making of the Nuclear Arms Race (2007, Knopf)

This is Rhodes' third book on nuclear weapons, following The Making of the Atomic Bomb and Dark Sun: The Making of the Hydrogen Bomb, the latter including the early Soviet efforts to join the arms race. Two great books, exactly where to start to learn anything (and pretty much everything) about the strange beauty and terror of nuclear weapons. This book largely completes the story, covering the subsequent arms race, the fitful attempts to rein it in, and the general absurdity of trying to pretend that these bombs are anything but Weapons of Mass Suicide. In typing up these quotes, I'm particularly struck by the political folly of the neocons, and for that matter the long line of trigger-happy anti-communists from Kennan and Nitze up through PNAC.

Extraordinary book.

---

No page number, just a quote on the opening page, from old-time conservative Peter Viereck:

Reality is that which, when you don't believe in it, doesn't go away.

To the Chernobyl Sarcophagus (pp. 5-7):

At 2:30 on Saturday afternoon someone finally called the institute to report an accident at Chernobyl. In the early hours after midnight, Chernobyl Reactor Number Four had run away in four seconds from 7 percent of maximum rated power to about one hundred times maximum rated power, an event called a prompt critical excursion that had flashed the reactor's thousands of gallons of circulating water to high-pressure steam. The graphite core of the massive, concrete-encased reactor was an enclosed cylinder forty feet in diameter and twenty-three feet tall, set on end, with blocks of concrete and a water pool beneath it to absorb the fierce radiation its zirconium-clad uranium fuel elements produced, and a two-million-pound disk-shaped upper biological shield of concrete blocks set over it like a lid to protect workers from radiation exposure. In the same spirit of bravado that had prompted the scientists at Los Alamos during the Second World War to nickname the atomic bomb they were building the "gadget," the men who operated the RBMKs called the upper biological shield the pyatachok, Russian for one of the smallest Soviet coins, the five-kopek piece. When the water flashed to superheated steam and the reactor's steam pipes started exploding, an eyewitness reported later, the pyatachok "began to bubble and dance."

Then two explosions in the space of less than four seconds tore open the reactor and blew out the building. The reactor core was sealed within a metal tank filled with a mixture of helium and nitrogen to prevent the graphite moderator -- four million pounds of pure carbon -- from burning. The prompt critical excursion had heated the graphite red hot. The first steam explosion lifted the two-million-pound pyatachok. At the same time the steam burst down through the metal tank and penetrated the red-hot graphite. Steam combines ferociously with hot carbon to make carbon monoxide, liberating hydrogen; the second and more powerful explosion combined steam and exploding hydrogen gas, tilted up the pyatachok nearly vertical, shattered the upper half of the reactor core, and blew tons of its red-hot radioactive debris -- a rubble of highly irradiated uranium-oxide fuel as well as radioactive graphite and zirconium -- past the pyatachok, through the roof, and half a mile into the air.

It fell out by size. Big blocks of hot graphite landed on the roofs of Number Four's turbine hall and Reactor Number Three. To lower construction costs, the roofs had been covered with flammable asphalt; the hot graphite set them on fire. Blocks and smaller pieces of graphite landed on the grounds around the building and splashed hissing intot he four-mile-long cooling pond that lay between the plant and the Pripyat River. The cooling pond was fed by and drained into the river, which drained in turn into the big reservoir downstream that stored the water supply of the city of Kiev, the Soviet Union's third-largest city, with a population of some 2.5 million people.

Graphite pieces and soot-like particles scattered across a stand of pines southeast of the complex; several weeks later, when the radiation had killed the trees and their chlorophyll had faded, people started calling the dead stand "the Red Forest." About half the total radioactive fission products jettisoned from the reactor fell within a two-mile radius of the building. The gases released in the explosion diluted and dispersed into the upper atmosphere, but the wind carried the finest aerosols and hot, intensely radioactive particles (which lofted on their own heat like microscopic hot-air balloons) northwest toward Minsk, on to Ingalina and then across the Baltic Sea to Finland and Sweden. The explosions also blew out the shield elements below the reactor; with the water channels through the graphite blocks drained, the hot graphite chimneyed air up the channels through the remaining lower half of the reactor core and the graphite began to burn. It turned efficiently, the soot and ash carrying more and more radiation high into the air.

A containment structure such as the concrete-and-steel dome that protects all Western and Japanese power reactors would probably have confined the Chernobyl explosions and their radioactivity, but Soviet reactors of the RBMK type lacked such containment.

In the 1950s, when the RBMK design was developed and approved, Soviet industry had not yet mastered the technology necessary to manufacture steel pressure vessels capacious enough to surround such large reactor cores. For that reason, among others, scientists, engineers, and managers in the Soviet nuclear-power industry had pretended for years that a loss-of-coolant accident was unlikely to the point of impossibility in an RBMK. They knew better. The industry had been plagued with disasters and near-disasters since its earliest days. All of them had been covered up, treated as state secrets; information about them was denied not only to the Soviet public but even to the industry's managers and operators. Engineering is based on experience, including operating experience; treating design flaws and accidents as state secrets meant that every other similar nuclear-power station remained vulnerable and unprepared.

Unknown to the Soviet public and the world, at least thirteen serious power-reactor accidents had occurred in the Soviet Union before the one at Chernobyl. Between 1964 and 1979, for example, repeated fuel-assembly fires plagued Reactor Number One at the Beloyarsk nuclear-power plant east of the Urals near Novosibirsk. In 1975, the core of an RBMK reactor at the Leningrad plant partly melted down; cooling the core by flooding it with liquid nitrogen led to a discharge of radiation into the environment equivalent to about one-twentieth the amount that was released at Chernobyl in 1986. In 1982, a rupture of the central fuel assembly of Chernobyl Reactor Number One released radioactivity over the nearby bedroom community of Pripyat, now in 1986 once again exposed and at risk. In 1985, a steam relief valve burst during a shaky startup of Reactor Number One at the Balakovo nuclear-power plant, on the Volga River about 150 miles southwest of Samara, jetting 500-degree steam that scalded to death fourteen members of the start-up staff; despite the accident, the responsible official, Balakovo's plant director, Viktor Bryukhanov, was promoted to supervise construction at Chernobyl and direct its operation.

(p. 16):

The RBMK reactor was a dual-use design. It was developed in the 1950s as a production reactor to produce plutonium for nuclear weapons, then adapted for civilian power operation in the 1970s; like its graphite core, its pyatachok was punctured with multiple channels from which irradiated fuel rods could be removed via an overhead crane while the reactor was operating. If the military needed plutonium, on-line refueling would allow fuel rods to be removed early to maximize their bloom of military-grade plutonium. A safety containment structure around such a reactor, which would probably have prevented an accident like the one at Chernobyl, would have also greatly reduced its military value. Military needs thus competed with civilian needs in the choice of the RBMK design when the Soviet Union decided to greatly expand electricity production with nuclear power in the early 1970s; a competing light-water reactor design, the Soviet VVER, was safer but less suitable for the production of military-grade plutonium. The RBMK design was adapted for civilian use primarily for economic and logistic reasons -- the concrete and graphite reactors drew on different industrial resources than the steel VVERs did -- but their dual-use potential weighted the decision as well. From the perspective of the Politburo's old guard, then, publicly discussing an accident at a Soviet nuclear power plant, especially one that revealed such serious design flaws, would be no less subversive than revealing the location and fitness of an army in the middle of a war.

(pp. 24-25):

The struggle to deal with the fallout of radionuclides that had contaminated large areas of Soviet territory continued through the summer and fall and across the next winter. When the leaves fell from the chestnut trees that are the glory of Kiev, proud on its high bluff above the Dnieper River, they had to be raked up, all three hundred thousand tons of them, baled and buried outside the city as low-level nuclear waste. "Liquidators" by the hundreds of thousands, perhaps half a million in all -- 340,000 soldiers, many of them recently returned from service in Afghanistan, new draftees, minor government employees such as teachers and inspectors -- were pressed into service and took their brief turn scraping away topsoil, paving over roads, spraying plastic coatings onto schoolyards and fallow fields, burying gardens, houses, equipment, wells. "We buried the forest," one of them told Alexievich. "We sawed the trees into meter-and-a-half pieces and packed them in cellophane and threw them into graves. . . . It was just your average Russian chaos. That's how we live." In November 1986, after a heroic effort, workers finished entombing Reactor Number Four within a sarcophagus made of half a million cubic yards of reinforced concrete, and only then did it cease releasing radiation into the environment.

"More than 500 residential communities, nearly 60,000 buildings and structures, and several tens of millions of square meters of exposed surfaces of technological equipment and internal surfaces at the [nuclear-power plant] itself have been decontaminated," Colonel-General Vladimir Pikalov of the U.S.S.R. Chemical Forces summarized a year later. "Tens of thousands of cubic meters of contaminated soil has been removed and the same amount brought in and several thousand insulating screens have been laid down. Dust has been suppressed on vast territories and several thousand samples have been taken for radioactive isotope analysis."

Shevardnadze came to call 26 April 1986 "Chernobyl Day." It "tore the blindfold from our eyes," he wrote later. It tore the blindfold as well from the eyes of hundreds of thousands of Soviet citizens living in the western Soviet Union. "Chernobyl happened," a Byelorussian biologist told Alexievich, "and suddenly you got this new feeling, we weren't used to it, that everyone had his separate life. Until then no one needed this life. But now you had to think: what are you eating, what are you feeding your kids? What' dangerous, what isn't? Should you move to another place, or should you stay? Everyone had to make her own decisions. And we were used to living -- how? As an entire village, as a collective -- a factory, a kolkhoz [i.e., a collective farm]. We were Soviet people, collectivized. . . . Then we changed. Everything changed."

Eastern Europe changed. The European Community banned imports of Soviet, Polish, Czechoslovakian, Hungarian, Romanian, and Bulgarian agricultural products worth $500 million annually as of 7 May 1986, inflicting great economic hardship on populations already restive in response to Gorbachev's relaxation of authoritarian control. Ironically, the purpose of recent Soviet nuclear-power development had been to increase electrical capacity available to Eastern Europe. "The decision to accelerate the nuclear-energy program had been taken in 1974," Zhores Medvedev explains, "when the international price of oil rose sharply and export demand increased. Oil became the main source of foreign exchange after 1974. Poor [Soviet] harvests meant that large imports of grain and food were necessary. As a result, the replacement of oil by nuclear energy became a priority." More than any other natural resource, oil propped up the stagnant Soviet economy, but the oil the Soviet Union supplied to Eastern Europe went at subsidized rates. Replacing most of that oil with nuclear electricity would free it up for foreign trade. The new Five-Year Plan that Gorbachev's government had introduced at the 27th Party Congress in February 1986 had called for doubling nuclear-generated electricity, primarily by building reactors in the Ukraine. Those plans were now in doubt.

Next two chapters on Gorbachev (pp. 54-55):

Gorbachev's concerns for the next ten years [after 1970] were largely agricultural: drought, crop failures, dust storms, irrigation projects, road building. His work brought him into regular contact with Moscow and frequent conflict with Kulakov, who by then was the Politburo member responsible for agriculture. Gorbachev saw the economy stagnate, saw regional initiatives rejected, saw "manipulators" become "the heroes of the day," and found himself increasingly disenchanted: "Should you come up with your own ideas -- be prepared for trouble. You could even land in jail. It was actually impossible to do something sensible while complying with all the regulations and instructions. A popular adage hit the mark: 'All initiative is punishable.'"

(p. 56):

Remnick adds: "Gorbachev appears to have few illusions about his double face. Years after coming to power, he told [the journalist] Vitaly Korotich . . . 'In those days, we all licked Brezhnev's ass -- all of us!'" Ass-lickers are a staple of middle bureaucracies, of course, and are certainly not unique to the former Soviet Union. The activist and strategic analyst Daniel Ellsberg identifies the same pattern of behavior in American bureaucrats. The U.S. government, he points out, "does not require true believers to run it. . . . The system consciously runs by men who -- in order to stay in the game, to be close to the center of power, to have the hope that someday the moment may come when their own true values will be served -- will go on for years serving values that are the opposite of what they privately believe." Hence the frequent phenomenon of recantation from retirement.

(pp. 60-61):

Not only second-rank officials such as Baibakov and Gorbachev feared usurping Brezhnev's prerogatives where the military was concerned; so also did Gromyko and Andropov. One consequence of military influence over the Soviet leadership, ultimately devastating, was the 1979 decision to invade Afghanistan. Arbatov believes that "the military-industrial complex had grown to such proportions [by then] that it escaped political control." Brezhnev, Arbatov points out, had been the Central Committee's secretary of defense industries before he became the general secretary, and "treated the military as a very important power base." Ustinov, the minister of defense, "matched Brezhnev in his sycophancy toward the military." Brezhnev's failing health, exacerbated by an addiction to sleeping pills, added to the confusion.

Anatoly Chernyaev, an international analyst for the Central Committee who would become one of Gorbachev's most trusted advisers, points to Ustinov as the instigator of the December 1979 invasion:

I learned that the intervention in Afghanistan was initiated by Ustinov. The project to present this "idea" to Brezhnev was organized by a group of four: Ustinov and Gromyko, plus Andropov and [the Central Committee secretary for international affairs Boris] Ponomarev. Andropov was reserved but didn't object, only noting certain "possible complications." Ponomarev also expressed some doubts, but then quickly joined in.

Both Arbatov and Chernyaev note that the senior military staff objected to the war, "arguing," says Chernyaev, "that it would be impossible and senseless," but according to Arbatov, the Ministry of Defense nevertheless promoted and even insisted upon the intervention, which he calls "a pretty typical escalation of military aid." With the United States covertly supporting the anti-Soviet Afghan mujahideen, Afghanistan in the 1980s became the Soviet Union's Vietnam.

In other words, Afghanistan was the Soviet Union's Vietnam not just in terms of fruitless expense, division, and ultimate defeat; the Soviet Union entered into Afghanistan following the same bureaucratic logic that led the US ever deeper into Vietnam.

(pp. 61-62):

The excesses of the Soviet military-industrial complex in the 1970s were as much the consequence of internal policy as they were of external threat. The complex was "something like a bull in a china shop" according to a former Soviet defense official named Vitaliy Katayev -- " a sort of Soviet Texas." It "always demanded as much weaponry as possible." The decision to produce a new weapons system was usually made "not on the basis of military needs or technical merit . . . but rather on the basis of [the] authority of its sponsors" and their personal relationships with the political leadership. And sine the complex was expected to increase its output by at least 3 percent annually, "production of many types of weapons was not stopped even after the army was saturated with them." The purpose of this overproduction, a former Soviet military economist explains, was "to keep the production base 'warm'" -- to be ready to mobilize production in case war broke out. If mobilizing production -- that is, preparing to fight a long war -- looks like antiquated 1930s policy in a nuclear world, he adds, it was.

Massively overproducing arms, Arbatov concludes, "undermined Western trust toward us. Right-wingers and militarists in the United States and other NATO countries waged a successful campaign to create public mistrust of us. . . . More than that, our actions encouraged Americans to intensify the arms race."

"The Bomber Will Always Get Through" (p. 74-75):

That arms race began with the Anglo-American program itself -- the Manhattan Project -- because the United States and Britain had chosen not to share knowledge of the secret program (not of how to build atomic bombs -- no one proposed to do that -- but simply of the fact that the United States and Britain were developing them) with the Soviet Union even though it was an ally in the fight against Nazi Germany. Since the Soviets had recruited several high-level espionage agents within the Manhattan Project, they were fully aware that they were being excluded.

Stalin drew the logical conclusion that the Americans intended to use their unique weapon to intimidate him after the war. Once the evidence of Hiroshima and Nagasaki overcame his doubts about the authenticity of the bomb plans his spies had delivered, he made the full resources of the state available to the Soviet effort. By 1948, Soviet scientists under the charismatic physicist Igor Kurchatov had not only replicated the American plutonium implosion bomb ("Fat Man") but had also developed an improved design of half the weight and twice the yield. Lavrenty Beria, the brutal KGB chief whom Stalin had appointed to oversee the bomb program, was unwilling to risk the possible failure of an indigenous, untested design and ordered Kurchatov to copy the American design, which the atomic bombing of Nagasaki had proven would work. The Soviet copy, RDS-1 (Joe 1 in U.S. nomenclature), was tested on 29 August 1949 on a tower on the Kazak steppe lands at Semipalatinsk, yielding twenty-two kilotons, matching the yield of the Nagasaki bomb. A pilot series of five RDS-1 bombs inaugurated the Soviet nuclear arsenal in March 1950. Serial production of RDS-1s began in December 1951.

With its four-year lead, the United States was well ahead of the Soviet Union in nuclear-weapons development and production by the end of 1951. Until 1948, the United States had stockpiled slightly improved Fat Man bombs and a few uranium bombs that were ruggedized for attacks on hardened targets such as submarine pens and command bunkers. In its first series of weapons-design tests, Operation Sandstone, which was conducted in the Marshall Islands in 1948, it had proved the principle of core levitation -- suspending the nuclear core within its natural uranium tamper so that the tamper material had a gap across which to accelerate before imploding the core -- and tested both a composite plutonium-uranium core and cores of highly enriched uranium (HEU) alone. These and other evolutionary improvements resulted in yields of up to forty-nine kilotons, effectively increasing the total yield of the U.S. stockpile by 75 percent. In 1951, that stockpile held 438 weapons; by then the Soviet Union had manufactured twenty-five.

Before 1949, the United States had considered its nuclear monopoly to be roughly the equivalent of the superior numbers of Soviet forces occupying the eastern half of Europe, a finding that had allowed President Harry S. Truman to bring U.S. troops home while cutting the defense budget drastically from its wartime highs. From Washington's point of view, adding atomic bombs to Soviet ground-force superiority deprived the United States of a unique capability and tilted the balance decisively in the Soviet Union's favor.

The US responded to accelerating development of the hydrogen fusion bomb. The Soviet Union responded in kind. The arms race continued.

(p. 81):

Both sides took the point. McGeorge Bundy, the national security adviser to Presidents John F. Kennedy and Lyndon Johnson, stated it succinctly for the American side in an essay published in the journal Foreign Affairs in 1969:

In light of the certain prospect of retaliation, there has been literally no chance at all that any sane political authority, in either the United States or the Soviet Union, would consciously choose to start a nuclear war. This proposition is true for the past, the present and the foreseeable future. . . . In the real world of real political leaders . . . a decision that would bring even one hydrogen bomb on one city of one's own country would be recognized in advance as a catastrophic blunder; ten bombs on ten cities would be a disaster beyond history; and a hundred bombs on a hundred cities are unthinkable.

On the Soviet side, Nikita Kruschev recalled in retirement that his first nuclear-weapons briefing after he took power in 1953 had shaken him. "I couldn't sleep for several days," he said. "Then I became convinced that we could never possibly use these weapons, and when I realized that, I was able to sleep again." At least one member of the Soviet general staff, Vladimir Slipchenko, concurs. "The retaliatory strike of even one nuclear warhead," Slipchenko told a post-Cold War conference, "would cause unacceptable damage to a country."

(pp. 85-86):

By 1960, the U.S. arsenal had increased to 18,638 bombs and warheads yielding 20,500 megatons (1.4 million Hiroshimas), of which 3,127 were strategic weapons deployed on B-47 and B-52 bombers, large first-generation Atlas and Titan liquid-fueled ballistic missiles and Polaris nuclear submarines. American megatonnage peaked in 1960. In those years, SAC favored massive ten- to twenty-five-megaton behemoths to maximize its delivery capacity and destroy multiple DGZs simultaneously, but as ballastic missiles came into prominence, the total yield of the U.S. stockpile declined to reflect the missiles' more critical weight requirements and greater accuracy. ("The rule of thumb," write the weapons historians Robert S. Norris and William Arkin, "is that making a weapon twice as accurate allows an eightfold reduction in yield while achieving the same level of destruction.")

Most Soviet nuclear weapons were tactical, designed for crushing NATO in a conflict arose with Warsaw Pact forces in Europe; the total Soviet arsenal in 1960 of seventeen hundred bombs and warheads included only about 350 strategic weapons. The small Soviet bomber force had been supplemented by late 1960 with only four intercontinental ballastic missiles and a limited and primitive force of submarines carrying short-range missiles. The Soviet bombers were slow and vulnerable; the KGB kept missile warheads separate from the missiles, which required up to twenty-four hours to assemble, warm up, and fuel; and the submarines, which were normally kept in port, would have to cross the Atlantic or Pacific to within about two hundred miles of North America and surface to launch their missiles. "The Soviets had paltry forces," comments the former secretary of defense James Schlesinger -- "hardly enough to stage an attack on the United States."

SIOP is Single Integrated Operational Plan (SIOP-62 is the 1962 edition), basically the US contingency plan for launching an all-out attack on the Soviet Union (pp. 87-88):

Contemporary estimates of the consequences of an all-out SIOP attack put the death toll at 285 million Soviet and Chinese citizens and millions more dead in Eastern Europe -- more than twice the dead of all the wars of the twentieth century. The journalist Fred Kaplan reports that General David Shoup, the Marine Corps commandant, asked Thomas Power at a similar SIOP briefing in 1960 if the United States had any options to avoid bombing China if that country happened not to be involved in the conflict that led to nuclear war. "Well, yeah, we could do that," Kaplan reports Power replying, "but I hope nobody thinks of it because it would really screw up the plan." Back in Washington, Kaplan writes, other U.S. military leaders endorsed SIOP-62 to the secretary of defense. "David Shoup stood and said, 'Sir, any plan that kills millions of Chinese when it isn't even their war is not a good plan. This is not the American way."

As if such deliberate democide were not horrific enough, one SIOP reviewer after another discovered that its damage calculations were based only on the blast effects of nuclear weapons, when the primary mode of destruction of weapons with yields greater than one hundred kilotons -- most U.S. strategic weapons -- is fire. Admiral Harry Felt, the commander in chief of the Pacific fleet, cabled the Joint Chiefs in January 1961 after reviewing the SIOP, "only blast effects were considered. . . . other effects such as heat, fire and radiation should be used when drawing up damage criteria for the SIOP."

(p. 93):

At the time of the Cuban Missile Crisis, according to Podvig, the Soviet bomber fleet "could deliver aobut 270 nuclear weapons to U.S. territory." But fear of the SAC commander Thomas Power's bomber fleet, which he maintained on airborne alert throughout the week of the crisis, flying orbits over the Mediterranean and northern Canada, landing only long enough to change crews, led the Soviets to keep their bombers grounded; the Soviet Union was nearly as defenseless against nuclear attack that week as Japan had been at the end of the Second World War, although Soviet submarines in the Caribbean could have launched their missiles against U.S. targets in retaliation. American nuclear assets consisted of several thousand bombs on 1,576 SAC bombers, 183 Atlas and Titan ICBMs, 144 Polaris missiles on nine nuclear submarines, and the first squadron of ten Minutemen I missiles carrying W59 one-megaton warheads, brought to full alert for the first time at the height of the crisis on Friday, 26 October 1962.

(pp. 94-95):

That the United States could force the leaders of the Soviet Union to remove their missiles from Cuba frightened and deeply humiliated them. "The results were very painful and they were taken very painfully by our leadership," the Soviet lieutenant general Nikolai Detinov remembers. "Because of the strategic [imbalance] between the United States and the Soviet Union, the Soviet Union had to accept everything that the United States dictated to it and this had a painful effect on our country and our government." As a result, says Detinov, "all our economic resources were mobilized [afterward] to solve this problem." The Soviet diplomat who negotiated the crisis settlement, Vasily Kuznetsov, had implicitly threatened such a response. "Well, Mr. McCloy," he challenged his American counterpart, John J. McCloy, "we will honor this agreement. But I want to tell you something. You will never do this to us again."

"Humiliatian in Cuba," writes Robert Gates, "galvanized the Soviets into action. The USSR proceeded to undertake the largest military buildup in history over a twenty-five-year period, with profound consequences for the international balance of power, for the United States, and ultimately, and fatefully, for the Soviet economy and state." Detinov concurs:

During the 1960s, the Soviet government mobilized the economy to the point that all industrial facilities were turned to military production. All factories were included. . . . The rate of growth to our national economy went down in all branches. While before the Caribbean crisis we had a very steady rate of production, after the Caribbean crisis all production in other areas started going down thanks to the fact that all factories were mobilized in the name of military technology. Turning the national economy around later on was very hard.

Work on what Podvig calls "a simple and relatively inexpensive missile that could be used to increase the number of missiles in the Soviet ICBM force and provide quantitative parity with that of the United States" was authorized in March 1963, just five months after the resolution of the Cuban Missile Crisis; the light SS-11 would carry a 1.1-megaton warhead to compensate for its inaccuracy. The following September, the Soviets tested a heavier missile already in development, the SS-9, with a 10-megaton warhead. SS-11 flight tests began in 1965, and by 1966 both missiles were being deployed. Soviet Yankee-class nuclear-missile submarines, each carrying sixteen missiles with 1-megaton warheads, began patrolling the coasts of the United States in 1967.

One casualty of the Soviet buildup of missile forces was the nation's program to put men on the moon. Soviet dreams of beating the United States to the moon "were quietly abandoned" in the late 1960s, writes the former Air Force secretary Thomas Reed, "in favor of a massive ICBM buildup."

(pp. 104-106):

The "degree of reality" that Nitze sacrificed to this portrait of implacable evil was considerable. Just five years earlier, the Soviet Union had emerged from a brutal war to count its losses: at least twenty-five million people killed, one-tenth of its population; millions more invalided and twenty-five million made homeless; half its industry destroyed; coal production as of 1945 down 33 percent compared to 1941, oil production down 46 percent, steel 48 percent, meat 40 percent, dairy 55 percent, electricity 33 percent. Yet NSC-68 was asserting that the war-battered nation had recovered sufficiently five years later to muster the energy and resources for an implacable campaign to destroy the United States and rule the world.

The most egregious exaggeration of NSC-68 was its assessment of the Soviet Union's 1950 war-fighting capability. It was certainly true that Stalin had added two million more men to the three million kept under arms facing the West at the end of the war -- his counterpoise to the American nuclear monopoly -- and then had tested an atomic bomb as well. Nitze, however, citing the Joint Chiefs as his authority, claimed that if a major war should occur that year, 1950, the Soviet Union would be capable not only of immediately overrunning Western Europe, but also of "driv[ing] toward the oil-bearing areas of the Near and Middle East," consolidating "Communist gains" in the Far East, launching air attacks against Britain and air and sea attacks against the shipping lanes of both the Atlantic and the Pacific, and attacking "selected targets with atomic weapons, now including the likelihood of such attacks against targets in Alaska, Canada and the United States." (With only five atomic bombs in its arsenal that year, the Soviets would have had to be selective indeed in choosing targets.) [ . . . ]

Nitze underplayed the American deterrent because he wanted his country not simply to deter a theoretical Soviet attack but also "to check and to roll back the Kremlin's drive for world domination." He, Acheson, and the military services thus called for "a rapid build-up of political, economic and military strength in the free world."

Truman, on the other hand, concerned about the federal budget, was skeptical of NSC-68 at first. Following the outbreak of the Korean War, which the president believed to be a Soviet feint into South Asia in preparation for war in Europe, he endorsed it. He had imposed a limit of $14.4 billion on the 1949 defense budget, and beginning in 1950 it was supposed to be cut further to $13 billion. After Truman endorsed NSC-68, he allowed the defense budget to increase almost fourfold; defense outlays in 1953 totaled more than $52 billion.

Even more significantly, NSC-68 began the historic uncoupling of the U.S. defense budget from fiscal policy. Truman and his predecessors had first determined a total budget number, based on available resources, and had then allotted part of that total to defense. Such prudence now became politically dangerous. Most administrations after Truman's determined the defense requirements first and then either allocated what was left to domestic needs or added to the deficit (or, more rarely, raised taxes) to sustain both guns and butter. Determining defense requirements first was the way it worked in the Soviet Union as well, with the significant difference that the far larger U.S. economy cushioned the impact of increasing diversions of federal income to the military.

(pp. 116-117):

Ironically, the anti-détente campaign was launched just as détente was succeeding, and serving as political cover for a U.S. military buildup as well. Nixon and Kissinger, Robert Gates points out, used it "to defend a number of strategic-weapons programs from the budget knife on the Hill -- from ABM to Trident [missile submarines], cruise missiles, and the B-1 bomber." The new generation of weapons systems that Jimmy Carter stalled in 1976 and then restarted in 1979 and that Ronald Reagan greatly expanded in the 1980s "amid applause from conservatives," says Gates, "could not have been started or sustained politically in the Nixon years without détente. During the 1970s, on defense programs, the conservatives were never able to put congressional votes where their mouths were." Meanwhile, the growth in Soviet military spending, Cahn adds, "declined sharply" in 1975, "from 4-5 to 2 percent, and procurement of weapons was flat."

The conservatives responsible for this burgeoning exercise in threat inflation, many of them Democrats allied with Scoop Jackson, fought détente through the inglorious conclusion of the Nixon administration -- the humiliated president resigned his office and flying home to California in August 1974, and a new president, Gerald Ford, taking the reins. These conservatives discerned a nation in decline, reeling from a war lost in Vietnam, dangerously misled by détente -- and themselves ignored and out of power. "Soviet policy never changes," the former undersecretary of state Eugene Rostow, one of the most outspoken, scolded Henry Kissinger at the time. Kissinger responded sharply that "a balance of mutual interest" was a better guide to policy than "ideological dogma." But "the Democratic Party didn't want to hear us," Rostow complained, "and we weren't getting any general publicity" because Americans were sick of domino theories and war-derived domestic conflict.

(p. 119):

"Rumsfeld and Cheney were the right wing of the Ford administration," writes the journalist Sidney Blumenthal, "opposed to the policy of détente with the Soviet Union, and they operated by stealthy internal maneuver." Once Rumsfeld became secretary of defense, he attempted to sabotage Kissinger's SALT II negotiations. An important reason for Colby's replacement with the more pliable George H. W. Bush, Blumenthal, says, was the CIA's unwillingness to cooperate with the Rumsfeld-Cheney effort. "Instead of producing intelligence reports simply showing an urgent Soviet military buildup, the CIA issued complex analyses that were filled with qualifications. Its National Intelligence Estimate on the Soviet threat contained numerous caveats, dissents and contradictory opinions. From the conservative point of view, the CIA was guilty of groupthink, unwilling to challenge its own premises and hostile to conservative ideas."

(p. 124):

The Soviest had demonstrated by their caution and their desperate race to catch up with a technologically and economically superior adversary that they would follow our lead wherever we led them, evidently believing we knew where we were going. They had even sacrificed their cherished goal of putting men on the moon to turn their science and industry to missile building in the years after the Cuban Missile Crisis. The "scientific" view that Pipes despised, based as it was on the fundamental physical reality that nuclear weapons were devastating instruments of terror and mass fire, so destructive that one or two per city would deliver chaos and suffering enough to terminate any war, needed no one's insight or approval. Pipes told the American physicist and government adviser Richard Garwin that his argument was based on "his deep knowledge of the Russian soul." But nuclear reality was never a matter of opinion, however soulful. It was a matter of fact, as political leaders facing the brink seem repeatedly to have understood.

CPD was the Committee on the Present Danger, a name borrowed from a group led by James Bryant Conant during the Korean War; the new group grew out of the 1976 Team B group headed by Richard Pipes, which argued for expanding the US nuclear arsenal; CPD members included: Walt Rostow, Paul Nitze, David Packard, Lane Kirkland, Dean Rusk, Elmo Zumwalt Jr., William Casey, William Colby, Clare Boothe Luce, Richard Perle, Norman Podhoretz, Midge Decter, Richard Scaife, Edward Teller, and Ronald Reagan; some 33 members joined the Reagan administration (pp. 133-134):

When eight CPD members met with Carter at the White House in 1977, Rostow recalled, "we were stunned, just stunned. The notion that that fellow was president was just frightening."

What frightened the CPD was Carter's initial program, as he described it later, "to try to put forward to the Soviet Union a much more dramatic reduction in the total quantity and effectiveness of the nuclear weapons in our arsenals, and to bring about a comprehensive test ban to eliminate the epxlosion of any nuclear devices, either underground or in the air." By March, Carter had dispatched his secretary of state, Cyrus Vance, to Moscow "with what I thought was a very good proposal for dramatic cuts [in the two sides' nuclear arsenals]," Carter said. At that point the CPD declared all-out war, opposing Carter and his "frightening" notions of nuclear sufficiency with a full arsenal of op-eds, talk-show appearances, position papers, and congressional testimony. CPD resistance was all the more odd since the proposal had been drafted by Zbigniew Brzezinski, Carter's anti-Soviet national security adviser, with substantial input from Richard Perle, and was designed to be unacceptable to the Soviet Union.

(pp. 149-150):

Reagan ended up spending almost as much on defense in the first five years of his presidency as had Ford, Nixon, and Carter combined, more than the cost of both the Korean and Vietnam wars -- the largest peacetime buildup in American history. One purpose of the Reagan defense buildup, of course, was to starve the beast of government domestic spending, part of the conservative Republican agenda. As the political scientist Daniel Wirls notes, "for fiscal 1982, Reagan negotiated with Congress for about $35 billion in cuts in hundreds of domestic programs. . . . In budgetary terms, this change is . . . striking: from [fiscal year] 1981 to 1987 discretionary spending on domestic programs decreased by 21 percent in real terms while defense outlays increased by 45 percent." Reagan himself, however, was primarily interested in the United States' relationship with the Soviet Union -- the CPD's bogus "window of vulnerability." His administration's "extraordinary surge in defense spending," Wirls writes, "was devoted to the modernization and expansion of the gamut of military programs, conventional and nuclear, but first and foremost to the nuclear weapons rearmament program."

"In all of their writings on foreign policy," the journalist Frances Fitzgerald writes, assessing what she calls the "warrior intellectuals" of the CPD and the Reagan administration, "they offer not one single constructive suggestion as to what the United States might do to, say, prevent widespread famine, stop the crazy lurches of the economic system, prevent ecological disaster or simply keep the peace and lessen the risk of nuclear war. The solution they have to all problems is confrontation and the threat, or use, of military force. Nowhere do they attempt to count the cost of keeping the Third World down by force, and nowhere do they consider in any serious fashion what risks this policy may pose to the physical security of the United States."

(p. 157):

Reagan, not yet aware of the developing Soviet war scare, ratcheted his rhetoric higher in a March 1983 speech to the annual convention of the National Association of Evangelicals in Orlando, Florida. There he named the Soviet Union "the focus of evil in the modern world" and, famously, "an evil empire." The speech, built in part from paragraphs cut by more cautious advisers from his speech at Westminster, was meant to win the support of fundamentalist Christians against the Nuclear Freeze movement.

The "war scare" alluded to was the Soviet reaction to a particularly aggressive set of war game exercises the US was conducting in a period of massive US military buildup as well as Regan's rhetoric (p. 167):

Reagan was surprised and shocked that the Soviets had taken his years of militant rhetoric and his massive arms buildup seriously. He belittled their concerns in his diary on 14 November: "I feel the Soviets are so defense minded, so paranoid about being attacked that without being in any way soft on them, we ought to tell them no one here has any intention of doing anything like that. What have they got that anyone would want?" A few weeks later Wiliam Casey returned from meeting with British intelligence in London and briefed Reagan further on RYAN and ABLE ARCHER 83. "Do you suppose they really believe that?" the president of the United States asked McFarlane less defensively afterward, the truth finally dawning. "I don't see how they could believe that -- but it's something to think about."

(pp. 170-173):

How Reagan's mind worked was a subject of considerable discussion during the years of his presidency and among his biographers afterward. Most discussants came to similar conclusions, although their estimates of the quality of Reagan's thinking depended on whether they were promoters or detractors of his goals. In a word, Reagan thought "anecdotally, not analytically," as the journalist and former assistant secretary of state Leslie Gelb put it. The president organized events and ideas on a Procrustean bed of personal experiences and rigid beliefs. Taxes stifled enterprise because in the 1950s a top federal income tax rate of 91 percent on earned income had led him and other movie stars to limit their acting work to four films a year. Communists were cynical, brutal, cold-blooded, and completely lacking in morality because the Communists he believed he had fought for control of the Screen Actors Guild when he was its president had seemed to him to be such people. "Firsthand discoveries are the ones that matter to Reagan," Cannon confirms. "When he expressed his view of Communist morality at his first presidential news conference, he believed he was talking from experience."

Cannon found that "most of his aides thought of him as intelligent, but many also considered him intellectually lazy." In fact, they laughed at him behind his back. He was Joe Six-pack, they told each other, his opinions and judgments exactly those guileless truisms you would expect to find among patrons of a neighborhood bar. "The sad, shared secret of the Reagan White House," Cannon writes, "was that no one in the presidential entourage had confidence in the judgment or capacities of the president. Often, they took advantage of Reagan's niceness and naïveté to indulge competing concepts of the presidency and advance their own ambitions. Pragmatists and conservatives alike treated Reagan as if he were a child monarch in need of constant protection. They paid homage to him, but gave him no respect." A book in his hand was more likely to be a Tom Clancy novel than a Henry Kissinger memoir -- though the same could be said for many Americans. "Not one of the friends and aides" Leslie Gelb interviewed "suggested that the President was, in any conventional sense, analytical, intellectually curious or well-informed -- even though it would have been easy and natural for them to say so. They clearly did not think it necessary. Time and again, they painted a picture of a man who had serious intellectual shortcomings but was a political heavyweight, a leader whose instincts and intuition were right more often than their own analyses. His mind, they said, is shaped almost entirely by his own personal history, not by pondering on history books." For George Schultz, in Cannon's paraphrase, "Reagan's seemingly irrelevant anecdotes were tools that the president used to comprehend the world. 'He often reduced his thinking to a joke,' Shultz said. 'That doesn't mean it didn't have a heavy element to it.'" Cannon counters that Reagan "sometimes used humor to avoid facing issues he ought to have faced, particularly the reality that it was impossible to increase military spending, reduce taxes and balance the budget simultaneously." Reagan's difficulty with governing went deeper, Cannon insists:

His biggest problem was that he didn't know enough about public policy to participate fully in his presidency -- and often didn't realize how much he didn't know. Reagan's legal advisers learned that he knew little about the law, his national security advisers found that he was devoid of knowledge on the capabilities of most U.S. and Soviet weapons systems and his economists discovered that he was poorly informed on economics, even though he sometimes reminded them that he had majored in economics and sociology at Eureka College.

("Playing it safe," the cultural historian Garry Wills writes, explaining Reagan's economic lacunae, "he majored in economics -- [economics professor] Archibald Gray was the most notoriously easy grader on the campus.")

Less politely, the political scientist Richard M. Pious, reviewing Cannon's biography and other studies of the president, reduced their findings to three parallel axioms: "Reagan could only understand things if they were presented as a story; he could only explain something if he narrated it; he could only think about principles if they involved metaphor and analogy." For Sidney Blumenthal, who contrasts Reagan's triumphant promotion of political conservatism with Barry Goldwater's failure, the president's storytelling was the secret of his success:

With him, facts don't determine the case; they don't make his beliefs true. Rather, his beliefs give life to the facts, which are tailored to have a moral. Reagan doesn't use stories the way experts use statistics. They seek mathematical certainty, whereas he has moral certainty. He asks listeners to trust the tale, not necessarily the detail. If the facts belie his premises, then the facts are at fault, and he can shift ground without making any fundamental change in his beliefs. His policies might be contradictory and counterproductive, but his mythology remains appealing. . . . His life experience vindicates his nostalgic approach to the future; he feels what he says, and that gives it authenticity and force.

Such a mode of thought, far from being baffling or unique, is characteristic of religious, and particularly of fundamentalist, thinking, an archaic mode in which facts are allegorized into parables or reinterpreted to match doctrine. If the Bible says the world was created in seven days and humankind is a separate creation, then evolution must be an unsupportable theory and fossils simply traps God has set to confound unbelievers. If homosexuality is proscribed in Genesis and Leviticus, then it must be a lifestyle choice, not a biologically determined orientation. If religious belief is necessary to morality, then Communist -- atheists by definition -- must be amoral.

Reagan's fundamentalist mentation encouraged him to find the supernatural as credible as the natural. He had been convinced since at least his days as governor of California that the end of the world was approaching. He believed that the Bible predicted the future. "Everything is in place for the battle of Armageddon and the second coming of Christ," he told a surprised California state senator one day in 1971, citing as a sign his understanding that Libya had gone Communist. The founding of Israel in 1948, the Jews thus reclaiming their homeland, was another sign Reagan credited as meaning that a great final battle between good and evil would soon be fought on the plain of Armageddon. The atomic bombings of Hiroshima and Nagasaki, he believed, fulfilled the prediction in Revelation of an army out of Asia of "twice ten thousand times ten thousand" routed by plagues of "fire and smoke and sulfur." He added Chernobyl to his list when he learned that the name of the old town was the Byelorussian word for wormwood, fulfilling the prophecy of "a great star [that] fell from heaven, blazing like a torch, and it fell on a third of the rivers and on the fountains of water. The name of the star is Wormwood."

(p. 173):

Robert McFarlane concluded that Reagan's commitment to strategic defense derived primarily from his belief that Armageddon was approaching. "From the time he adopted the Armageddon thesis," the national security adviser told Cannon, "he saw it as a nuclear catastrophe. Well, what do you do about that? Reagan's answer was that you build a tent or a bubble and protect your country. This was one of the intellectual contradictions in Reagan's thinking. He sees himself as a romantic, heroic figure who believes in the power of a hero to overcome even Armageddon. I think it may come from Hollywood. Wherever it came from, he believes that the power of a person and an idea could change the outcome of something even as terrible as Armageddon. This was the greatest challenge of all. . . . He didn't see himself as God, but he saw himself as a heroic figure on earth." Frank Carlucci, deputy secretary of defense under Caspar Weinberger and subsequently one of Reagan's five national security advisers, confirmed that Reagan connected Armageddon with nuclear war. "He would say to me that nuclear weapons are inherently evil," Carlucci told Cannon. When Carlucci argued the case for nuclear deterrence, Cannon paraphrases, "he did not convince Reagan, who responded to the argument by telling Carlucci about Armageddon."

Continued in extended body . . .

Jeremy Bernstein, Nuclear Weapons: What You Need to Know (2007, Cambridge University Press)

One of the best science writers around, just the sort of person to answer such questions with authority.

---

(pp. 123-124):

One of the first things that Oppenheimer asked Serber to do was to give a series of lectures -- in the event there were five -- that would serve as an introduction to the physics of the bomb for new arrivals. It is worth commenting on this. First of all, from a fundamental point of view there was no new physics required to make a bomb. The Los Alamos physicists often said that when they came back from the war they found the same set of problems on their desks that they had left. However, building nuclear weapons required using what was then standard physics in novel ways. This is what Serber explained in his lectures. The lectures were attended by some fifty people and were taken down by the well-known physicist E. U. Condon. Afterward, he and Serber wrote up the notes. They were of course classified. They became declassified in 1965 and were published in book form with Serber's commentaries in 1992.

No doubt because of the secrecy, physicists who had not been involved with the bomb knew very little about it. And even the physicists who did know weren't talking. When I was an undergraduate at Harvard in the late 1940s many of my teachers had been involved. John Van Vleck, who had been Serber's Ph.D. advisor at Wisconsin and then had gone to Harvard, was one of the people who attended the 1942 conference that Oppenheimer organized in Berkeley. Kenneth Bainbridge, who was for a while chairman of the department, had chosen the test site for the first atomic bomb explosion in Almogordo, New Mexico. Norman Ramsey, from whom I took a course, had supervised the armoring of the Hiroshima bomb on Tinian Island in the South Pacific. Roy Glauber, who was just starting his academic career -- he shared the Nobel Prize in Physics for 2005 -- went to Los Alamos immediately after finishing the course work for his bachelor's degree. And the president of the university, James Conant, had been one of the original civilian leaders of the program. Despite all of this, I do not remember a single part of any course in which the physics of nuclear weapons was discussed. I do not even remember any of these people mentioning any of this in any context. I can understand this at the time. The war had been over for only a very few years and the Cold War was just beginning. However, not long ago I decided to make a little survey. I went to a physics library and looked at every textbook of nuclear physics I could find. There was not a single one of them that explained how to find the critical mass of a uranium sphere. Most of them did not even explain what a critical mass was. This disturbed me, especially in view of what seemed to be happening in the world.

(pp. 169-170):

Smoky and Galileo were part of the longest and most extensive test series ever done at Mercury. It was called "Operation Plumbbob." It consisted of twenty-nine detonations, beginning with Boltzmann on the 28th of May and ending with Morgan on the 7th of October. Some of the tests were on towers, others from balloons, one in a shaft, and another in a tunnel. In a "boys will be boys" gesture the one in the shaft had an odd twist that resembled what we used to do with firecrackers when we were kids. We'd put them in a tin can to see what happened when they went off. Here the grown-up boys put a lid on the shaft to see what would happen. They figured that so much energy would be imparted to the lid that it would reach a velocity greater than that needed to escape the gravitation of the Earth. It would become, before Sputnik, the first space vehicle. It is not likely that this happened, but the lid was never found after the explosion. The Plumbbob explosions ranged in yield from half a ton -- Lassen -- to seventy-four kilotons -- Hood. They released 58,300 kilocuries of radio iodine into the atmosphere. A "curie" is a unit of radioactive disintegration that is equivalent to thirty-seven billion decays of anything per second. To get some idea of scale, one thousandth of a curie is about what would be used in a liver scan. The amount of radio iodine that Plumbbob put into the atmosphere was estimated to have caused an additional 38,000 cases of thyroid cancer, leading to some 2,000 deaths. Most of this radiation was deposited in the northeastern, far western, and midwestern states. There was a cluster in Maine. But this is not the only thing that made the Plumbbob tests notorious. The Department of Defense decided that this would be a splendid opportunity to study the reactions of soldiers and marines to atomic warfare. During the series some 18,000 servicemen participated. Because the tests were frequently postponed they were able to make substantial contributions to the Las Vegas economy at all levels. At Smoky, some three thousand soldiers were brought close to ground zero not long after the explosion. They had watched the explosion from trenches about a mile away. This explained the sound of helicopters that I had heard that morning. It is difficult to imagine now that our defense establishment would have done something so absurd. But there it was. The health of the Smoky soldiers was followed for several decades. In 1980, a survey showed that their leukemia rates were elevated. Four would have been a baseline number of cases expected in the general population, whereas there were ten.

(p. 178):

Not to be outdone, in 1962, Los Alamos supplied a hydrogen bomb to be detonated in outer space. As we will see in the next chapter, such weapons have yields equivalent to millions of tons -- megatons -- of TNT. The Los Alamos bomb was put on a Thor rocket and launched on July 9th above Johnson Island in the Pacific -- project Starfish. It exploded at an altitude of 250 miles with a yield of 1.4 megatons. The result was more than was bargained for. An electron belt was temporarily created that managed to destroy seven satellites, including the first commercial communications satellite.

(p. 211):

Oppenheimer, who was busy beyond human endurance, had to spend time every week with Teller, listening to his latest failed ideas for making the super. I have never really understood Teller's obsession. Why were fission bombs not enough for him? Was it the intellectual challenge? Was he worried that the Russians would get there first, although this was probably not a consideration during the war? Was he angry that Oppenheimer had made Bethe head of the theory division instead of him and he wanted to carve out a new domain? A combination>? I don't know. I have asked myself what would have happened if, at Nagasaki, we had dropped a twenty-megaton hydrogen bomb instead of a twenty-kiloton fission bomb. The fission bomb killed 75,000 people and devastated everything within a radius of one mile from ground zero. A twenty-megaton bomb would have inflicted third-degree burns on everyone within a distance of twenty miles and would have devastated everything up to a distance of fourteen miles. Would the Japanese have surrendered sooner? Nagasaki was bombed on August 9th and the Emperor surrendered on the 14th. What would a hydrogen bomb have accomplished? In the years following the war, Oppenheimer often said that the problem with the hydrogen bomb was that the targets were too small.

(pp. 213-214):

While Teller and his group were knocking their heads together trying to make the classical super work, there was another activity going on that did not seem to attract much attention. This was the work of Klaus Fuchs and von Neumann. Klaus Fuchs, of whom we will hear much more in the next chapter, came to Los Alamos as part of the British delegation in August 1944. He had already been working on aspects of the bomb in England and soon proved himself to be an invaluable member of Bethe's theoretical division. He was known to have a photographic memory and to have involved himself in all aspects of the program. Almost no one was better informed. He was also a Russian spy -- surely one of the most successful that has ever lived. By the fall of 1945, he had turned over to the Russians what amounted to a detailed blueprint of the gadget, whose test he had witnessed. The Russian physicists were ordered to duplicate the gadget, which they did. It was successfully tested in August 1949. Considering the effort the Russians put in and the ability of their scientists, it is certain that they would have gotten the bomb sooner or later. Fuchs probably saved them a couple of years. But, in 1946, Fuchs had turned his attention to the super. He and von Neumann patented their work and, as far as I can tell, the patent is still classified. However, in the spring of 1948, Fuchs turned it over to the Russians. Some of what he turned over has found its way back here by the back door, so to speak. In particular there is a diagram that has now been widely circulated. Much of this diagram is of no interest because it is connected to the classical super. But a part of the diagram is of great interest because it is the first inkling of how to make a hydrogen bomb. After Fuchs was exposed as a spy, both Bethe and Oppenheimer belittled anything that Fuchs could have told the Russians about the hydrogen bomb. They even said that they hoped the Russians would use Fuchs as a guide because that would lead them down a blind alley. I have often wondered if they actually knew what Fuchs turned over and, if they had seen this diagram, whether they still would have been quite so cavalier.

(pp. 222-223):

Finally, I want to discuss the question of whether the hydrogen bomb should ever have been built in the first place. Let us recall the events that led up to President Turman's decision. In August 1949, the Russians successfully tested their first fission bomb. On January 27, 1950, Fuchs confessed to his espionage. In October 1949, there was a four-day meeting of the General Advisory Committee of the Atomic Energy Commission. This committee consisted of the highest-level people in the weapons program. Rabi and Fermi were members, as was Conant. Oppenheimer was chairman. The committee decided for various reasons that there should not be a crash program to build the hydrogen bomb and, above all, not one that was publicly announced. Some members of the committee thought that the hydrogen bomb was not a weapon of war but a method of genocide. Rabi and Fermi thought there should be a conference with the Russians to seek an agreement not to build it. If that failed, nothing would have been lost because, at the time, no one had a clear idea of how to build one anyway. But, after Fuchs's confession, the pressure on Truman to do something was irresistible, and four days later he publicly announced a crash program to build the hydrogen bomb. The predictable happened -- a hydrogen bomb race. The Russians exploded theirs in 1952, the British in 1955, the Chinese in 1967, and the French in 1968. Probably every country that has atomic weapons is engaged in building the hydrogen bomb. There is some sad irony in all of this. In the same 1952 Ivy series there was a test called Ivy King. This was a pure fission bomb -- no boosting -- that had been designed by Theodore Taylor of Los Alamos. It produced a 500-kiloton yield. Now here is the irony. In recent years the Russian and American nuclear strategists have concluded that megaton bombs are unnecessary. The arsenals have been cut back to bombs of several hundred kilotons. Put another way, if the hydrogen bomb had never been built and pure fission bombs had continued to be developed, then the Russian and American nuclear arsenals would look about the same as they do now.

Daniel Cohen: Globalization and Its Enemies (2006; paperback, 2007, MIT Press)

---

(pp. 35-37):

However, a principal fact disarms the theory according to which colonialism would be a significant factor in Western wealth: the colonial powers all experienced slower growth rates than non-colonial powers. "The correlation is almost perfect," according to Paul Bairoch. Germany and the United States, latecomers to the colonial scene, experienced faster economic growth than France or the United Kingdom; Sweden and Switzerland experienced faster economic development than the Netherlands or Portugal. Better, if it dare be said, Belgium saw its growth rate slow the moment it became a colonial power, at the turn of the nineteenth century. Conversely, the Netherlands saw its growth rebound upon losing its colonial empire. Similarly, according to Bairoch, "it is very probable that one of the reasons for the relative absence of the United Kingdom from 'new' industrial sectors at the end of the nineteenth century was precisely its very great access to colonial empires."

The idea that wealthy countries got rich thanks to the exploitation of raw materials imported from poor countries is false for one simple reason: rich countries themselves have long produced said raw materials. The fate of the developing countries was already sealed with importing raw materials became the norm for the rich countries. As Paul Bairoch explains once more, on the eve of World War I, while the developed world already possessed a manufacturing productive capacity 7-9 times the global average in 1750, 98 percent of metallic ore and 80 percent of textile fibers came from industrialized countries themselves. Energy production does not escape the rule either. Until the 1930s, the developed countries produced more energy than they consumed and released a gross excess, notably coal. The biggest energy exporter was, in fact, England, the first industrialized country. It is only due to the role played by Middle East petroleum after World War II that the scheme was reversed. Even in this case, it was not until 1957 that the United States became a net energy importer. Until World War II, energy self-sufficiency was practically assured in the West, whence comes Bairoch's formula that "rich countries did not need poor countries."

(pp. 76-77):

The simple lesson that Mexico is learning anticipates what China may learn one day: that a country cannot hope to prosper solely on the basis of the international division of labor. Just as yesterday the industrialization of rich countries was responsible for the South's poverty, the deindustrialization of advanced economies will not by itself create tomorrow's prosperity in the developing world. In order to grow, a country must become a "center" in its own right; that is to say, a place dense with production and consumption. Because the new economy gives rise to the illusion of a world without borders, it fosters the hope that the North-South tension is going to be resolved. However, reducing the costs of distance does not bring either people or wealth any closer. It tends, moreover, to heighten the polarity between the center and the periphery, in the image of the town center and its suburbs. Contrary to the Braudelian plan, according to which the periphery lives a "history [that passes] in slow motion, lives repeat themselves from generation to the next," the suburban life illustrates the novelty of the new world economy. Through the commuter railway or the movies, the suburbs of Paris, Cairo, Mexico, and China all evenly gaze upon the world. It is the world which ignores them.

(pp. 144-145):

The nature of intellectual property is entirely different. A song or a chemical formula is neither bought nor consumed in the usual sense of the term that describes the use of physical goods. These are ideas and not objects; they survive the various private uses made of them. When an idea is discovered, nothing stops everyone from using it if not intellectual property rights, such as patents or copyright. Whereas physical property alone makes the appropriation of an object possible, intellectual-property laws restrict the free use of something that theoretically has no limits. Deprived of an owner, an ordinary good is not consumable. In the case of intellectual property, nothing of the sort takes place. An idea can be used by everyone without contradiction, and nothing guarantees that a system in which all potential ideas would be protected by property rights would be efficient.

In principle, the best way to find a new idea with which to solve a given problem is to coordinate the research of those whose work in the area and, once the discovery is made, to put the result at everyone's disposal. The reference model here is not the market but academic research, which compensates the researcher while leaving the discoveries free to all. The intellectual-property system manages to do exactly the opposite. Competing teams researching the same topic (for example, a drug for a certain illness) do not share their knowledge, and once the discovery is achieved it will be the exclusive property of the one who first realized it. For the contemporary world, here is an extension of an idea articulated by Marx, a contradiction between productive forces (here, innovation) and property rights.

Jared Bernstein: Crunch: Why Do I Feel So Squeezed? (And Other Unsolved Economic Mysteries) (2008, Berrett-Koehler)

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(p. 9):

Something's wrong, something fundamental. Not Third World-poverty fundamental, nor blood in the streets, massive homelessness, or Great Depression fundamental. If the problem were that obvious, it would be less amorphous, less indecipherable, less of a head-scratcher.

The name of the problem is economic inequality, and it's been on the rise for decades. It's at the heart of th squeeze, and it's a sign that something important is broken: the set of economic mechanisms and forces that used to broadly and fairly distribute the benefits of growth. What "mechanisms" am I thinking of? They are unions, minimum wages, employer and firm loyalty, global competitiveness, full employment, the robust creation of quality jobs, safety nets, and social insurance, all of which are discussed in the following pages.

On the measurement of poverty (pp. 38-39):

The official thresholds were based on food costs of low-income families in the mid-1950s. Surveys showed that these families spent about a third of their income on food, so we simply tripled the value of the "economy food plan" (the cheapest nutritionally adequate food plan derived by the Department of Agriculture) for a given family size.

Amazingly, with very few changes and with adjustments for inflation, this remains the official poverty measure to this day. Food consumption represents a much smaller share of family budgets than was the case 50 years ago (its average share has fallen by about half), while housing, transportation, and health care, for example, constitute larger shares. Simply updating the official thresholds for this change alone would lead poverty thresholds (and poverty rates) to be much higher today.

But there's a deeper problem with the official approach: As living standards rise for the rest of society, those deemed poor by a fixed income level that is adjusted solely for price changes will fall behind the rest of us. Back in 1960, the official poverty threshold for a family of four was about half the typical (median) income for a four-person family. Today, it's around 30 percent of the four-person median.

(p. 50):

When too many economic resources are held by too few, when the benefits of growth elude broad swaths of working families, opportunity itself becomes a rare commodity, out of the reach of the majority. Too much inequality precludes a meritocracy. We see this most clearly in educational opportunity, where college-completion rates for high-score poor kids are about equal to those of low-score rich kids.

(pp. 51-52):

There have never been signs of greater effort in periods of high levels of inequality. If anything, the opposite has occurred, as the have-nots drop out of a game they perceived to be rigged against them, and the haves, content that the game [is] rigged in their favor, chill by the swimming pool (that's just snark -- the rich work a lot, but their effort is uncorrelated with inequality). Some interesting behavioral research has shown that the inequality incentive structure does have one noticeable impact: It leads insiders to cheat more, because they figure the system is tilted their way anyway, so who'll notice if they cut a corner? Call it the Halliburton effect.

A recent variant of this "greed is good" motif has been applied to college attendance. Some prominent economists, including Nobel laureate Gary Becker, claim that high inequality sends a market signal to high school grads that they should attend college. They even go so far as to oppose progressive tax changes as a move that would dampen people's incentives to get more education. Raising taxes on wealthy people, in their model, would be advocating "a tax on going to college and a subsidy for dropping out of high school."

(pp. 77-78):

That's the what. Here's the why: Recessions result from some shock to the economic system. As of this writing, the last recession hit in March 2001 and was the result of the bursting of speculative bubbles in financial markets and IT (information technology) investment. Investment is a key components of GDP, and when it headed south in late 2000, it triggered a recession that was quite mild in GDP terms, though acutely felt on the jobs side. Once we got that recession out of our system, a housing bubble inflated and then burst circa 2007, and this too put a hurtin' on the economy.

(p. 97):

I wrote about this (d-)evolution in my last book, under the heading of YOYO economics. That's an acronym for "You're on your own," and it embodies a political philosophy that got us in our current mess. Under YOYO economics, the sole plan to meet any economic challenge we face, from globalization to health care, is a tax cut, a private account, and a solid push off the plank into the deep and murky waters of competitive market forces, where "you're on your own" to sink or swim.

Operating in this mode leads its proponents to oppose worthy ideas that strengthen the diminished bargaining power of most working persons -- ideas like minimum wages; a level playing field for those who would organize unions; a universal, nonmarket-driven approach to health care and pensions; progressive taxes; and less porous safety nets. Each of these ideas strikes at the heart of YOYOism, as they seek to pool the risks of economic insecurity over large groups of people, while unifying less advantaged groups under a WITT ("We're in this together") agenda.

(p. 99):

Let's consider how it works. The sweat from the brows of today's workforce generates the wealth that helps to fund the economic security of those who came before us. (OK, I only break a sweat at the office when the AC goes down, but you get the point.) At the same time, when those of us at work today finally call it a day, we will leave behind an economy that is a lot more productive than when we found it. The investments we made, in both human and physical capital, will help the next generation create yet more wealth. And yes, we will skim some of that wealth off the top -- that is, we tax some of that income -- for Social Security, as did our forebears.

The key point here is that Social Security solves an intergenerational problem -- the natural dependence of those whose working years are behind them on the working-age population -- with an intergenerational solution: the transfer of a portion of today's wealth to today's retirees.

(pp. 115-116):

Most economists are pretty hawkish about the deficit, meaning they're against it. The main reason is, they worry that the big gorilla in the room -- the government -- will gobble up all the savings in the room, leaving too little for the private sector. This gobbling, they fear, will push up interest rates -- the cost of borrowing money -- and depress productive investments in the private economy. They call this phenomenon crowding out, as Uncle Sam swaggers into the bank, elbows his way to the front of the line, and borrows all the capital in the vault, leaving nothing for the rest of us.

Not an unreasonable hypothesis, but recalling principle #3 from crunch economics, many of the simple, sensible, logical economic relationships don't always play out in the way you'd expect. What with all the moving parts -- and in this case, with globalizaiton hugely boosting the supply of capital available for borrowing -- evidence for the crowding-out hypothesis is surprisingly elusive.

So, with moderate deficits, it's pretty unlikely that you'll see any upward pressure on interest rates associated with your mortgage, car loan, and so on.

(p. 142):

Factory workers who go over to th services usually lose a lot. We're often talking here about moving someone from a high-productivity, unionized job with high-tier wages and fringes to a sector that's less productive, has much less collective bargaining, and has a much wider dispersion of compensation. Recent research into the consequences of layoffs reveals that just under three-quarters of reemployed factory workers suffer a real pay cut, and for 40 percent, it's a cut of at least 20 percent.

(pp. 145-146):

Those of us who bemoan "protectionism" need to recognize that for the first time in years, poll results reveal a majority of people worried that the next generation won't do as well as they did. One representative poll from March 2007 found that 69 percent of respondents said the "American Dream" will be harder to reach for the next generation. Reporting on exit polls from the 2006 midterm elections, the New York Times wrote: "In exit polls on Election Day, fewer than one in three people said they expected life for the next generation of Americans to be better than life today." A Pew Research Center poll from 2006 found that half of the respondents worried that children growing up today will be worse off than people are now.

(p. 165):

This puts us on a collision course with the power principle. It's tough to get to the inconvenient truths regarding the potential damage of inaction when deep-pocketed interests are relentless in their pushback. If you want to swim in these waters, never forget this immortal sentence from Upton Sinclair: "It is difficult to get a man to understand something when his salary depends upon his not understanding it." Junk science and its purveyors appear to be pretty deeply embedded in government. Even the venerable Smithsonian Institution, reacting to fears "that it would anger Congress and the Bush administration," recently altered an exhibition on climate change to inappropriately inject some doubt into the mix.

(p. 177):

We've been fed a very divisive political gruel for the past few decades, and it has served to empower many mean-spirited, greedy people. They have revealed themselves to be incapable of recognizing that some problems -- and health care is the best example -- are more efficiently solved by collective cooperation than by individuals competing. The glaring failures of their "You're on your own" philosophy are becoming clear in many areas of our political life, from Middle East policy to taxes, globalization, and health care. With that, their influence appears to be waning.

(p. 181):

The next PPP comes from research that shows the following: College-completion rates are about the same for smart, poor kids as they are for -- hmmm . . . how shall I put it? -- less-than-smart rich kids. About a third of low-income kids with test scores in the top tier complete college. That's about the same share for rich kids with low test scores. Again, I suspect I don't need a lot of research to drive this point home. While it's true that few even upper-income kids pay the sticker price for college, the real costs of tuition have been surpassing income growth, and that's average income growth. For those at the low end, college is increasingly out of reach. This, as much as any problem I've raised in this book, is a pure violation of what we ought to be about in America. As a result, college-completion rates are now rising considerably more slowly than they did even in recent years.

Ha-Joon Chang: Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism (2007, Bloomsbury Press)

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Chang starts with a future story about Mozambique, then points out that Korea was as poor in the early 1950s, when he was young, as Mozambique is today (p. 5):

Years later, in 2003, when I was on leave from Cambridge and staying in Korea, I was showing my friend and mentor, Joseph Stiglitz, the Nobel Laureate economist, around the National Museum in Seoul. We came across an exhibition of beautiful black-and-white photographs showing people going about their business in Seoul's middle-class neighbourhoods during the late 1950s and the early 1960s. I twas exactly how I remembered my childhood. Standing behind me and Joe were two young women in their early twenties. One screamed, 'How can that be Korea? It looks like Vietnam!' There was less than 20 years' age gap between us, but scenes that were familiar to me were totally alien to her. I turned to Joe and told him how 'privileged' I was as a development economist to have lived through such a change. I felt like an historian of mediaeval England who has actually witnessed the Battle of Hastings or an astronomer who has voyaged back in time to the Big Bang.

(pp. 14-15):

The popular impression of Korea as a free-trade economy was created by its export success. But export success does not require free trade, as Japan and China have also shown. Korean exports in the earlier period -- things like simple garments and cheap electronics -- were all means to earn the hard currencies needed to pay for the advanced technologies and expensive machines that were necessary for the new, more difficult industries, which were protected through tariffs and subsidies. At the same time, tariff protection and subsidies were not there to shield industries from international competition forever, but to give them the time to absorb new technologies and establish new organizational capabilities until they could compete in the world market.

The Korean economic miracle was the result of a clever and pragmatic mixture of market incentives and state direction. The Korean government did not vanquish the market as the communist states did. However, it did not have blind faith in the free market either. While it took markets seriously, the Korean strategy recognized that they often need to be corrected through policy intervention.

Now, if was only Korea that became rich through such 'heretical' policies, the free-market gurus might be able to dismiss it as merely the exception that proves the rule. However, Korea is no exception. As I shall show later, practically all of today's developed countries, including Britain and the US, the supposed homes of the free market and free trade, have become rich on the basis of policy recipes that go against the orthodoxy of neo-liberal economics.

(p. 16):

Today, there are certainly some people in the rich countries who preach free market and free trade to the poor countries in order to capture larger shares of the latter's markets and to pre-empt the emergence of possible competitors. They are saying 'do as we say, not as we did' and act as 'Bad Samaritans,' taking advantage of others who are in trouble. But what is more worrying is that many of today's Bad Samaritans do not even realize that they are hurting the developing countries with their policies. The history of capitalism has been so totally re-written that many people in the rich world do not perceive the historical double standards involved in recommending free trade and free market to developing countries.

(pp. 17-18):

In the main chapters of the book that follow the historical chapters (chapters 3 to 9), I deploy a mixture of economic theory, history and contemporary evidence to turn much of the conventional wisdom about development on its head.

• Free trade reduces freedom of choice for poor countries.
• Keeping foreign companies out may be good for them in the long run.
• Investing in a company that is going to make a loss for 17 years may be an excellent proposition.
• Some of the world's best firms are owned and run by the state.
• 'Borrowing' idea from more productive foreigners is essential for economic development.
• Low inflation and government prudence may be harmful for economic development.
• Corruption exists because there is too much, not too little, market.
• Free market and democracy are not natural partners.
• Countries are poor not because their people are lazy; their people are 'lazy' because they are poor.

(p. 31):

To sum up, the truth of post-1945 globalization is almost the polar opposite of the official history. During the period of controlled globalization underpinned by nationalistic policies between the 1950s and the 1970s, the world economy, especially in the developing world, was growing faster, was more stable and had more equitable income distribution than in the past two and a half decades of rapid and uncontrolled neo-liberal globalization. Nevertheless, this period is portrayed in the official history as a one of unmitigated disaster of nationalistic policies, especially in developing countries. This distortion of the historical record is peddled in order to mask the failure of neo-liberal policies.

On British development under Robert Walpole, from 1721 (p. 45):

Walpole's protectionist policies remained in place for the next century, helping British manufacturing industries catch up with and then finally forge ahead of their counterparts on the Continent. Britain remained a highly protectionist country until the mid-19th century. In 1820, Britain's average tariff rate on manufacturing imports was 45-55%, compared to 6-8% in the Low Countries, 8-12% in Germany and Switzerland and around 20% in France.

Tariffs were, however, not the only weapon in the arsenal of British trade policy. When it came to its colonies, Britain was quite happy to impose an outright ban on advanced manufacturing activities that it did not want developed. Walpole banned the construction of new rolling and slitting steel mills in America, forcing the Americans to specialize in low value-added pig and bar iron, rather than high value-added steel products.

Britain also banned exports from its colonies that competed with its own products, home and abroad. It banned cotton textile imports from India ('calicoes'), which were then superior to the British ones. In 1699 it banned the export of woollen cloth from its colonies to other countries (the Wool Act), destroying the Irish woollen industry and stifling the emergence of woollen manufacture in America.

Finally, policies were deployed to encourage primary commodity production in the colonies. Walpole provided export subsidies to (on the American side) and abolished import taxes on (on the British side) raw materials produced in the American colonies such as hemp, wood and timber. He wanted to make absolutely sure that the colonists stuck to producing primary commodities and never emerged as competitors to British manufacturers. Thus they were compelled to leave the most profitable 'high-tech' industries in the hands of Britain -- which ensured that Britain would enjoy the benefits of being on the cutting edge of world development.

(pp. 73-74):

In recommending free trade to developing countries, the Bad Samaritans point out that all the rich countries have free(ish) trade. This is, however, like people advising the parents of a six-year-old boy to make him get a job, arguing that successful adults don't live off their parents and, therefore, that being independent must be the reason for their successes. They do not realize that those adults are independent because they are successful, and not the other way around. In fact, most successful people are those who have been well supported, financially and emotionally, by their parents when they were children. Likewise, as I discussed in chapter 2, the rich countries liberalized their trade only when their producers were ready, and usually only gradually even then. In other words, historically, trade liberalization as been the outcome rather than the cause of economic development.

(pp. 86-87):

These flows are not just volatile, they tend to come in and go out exactly at the wrong time. When economic prospects in a developing country are considered good, too much foreign financial capital may enter. This can temporarily raise asset prices (e.g., prices of stocks, real estate prices) beyond their real value, creating asset bubbles. When things get bad, often because of the bursting of the very same asset bubble, foreign capital tends to leave all at the same time, making the economic downturn even worse. Such 'herd behaviour' was most vividly demonstrated in the 1997 Asian crises, when foreign capital flowed out on a massive scale, despite the good long-term prospects of the economies concerned (Korea, Hong Kong, Malaysia, Thailand and Indonesia).

(pp. 118-119):

Privatization of natural monopolies or essential services will also fail if they are not subject to the right regulatory regime afterwards. When the SOEs concerned are natural monopolies, privatization without the appropriate regulatory capability on the part of the government may replace inefficient but (politically) restrained public monopolies with inefficient and unrestrained private monopolies. For example, the sale of the Cochabamba water system in Bolivia to the American company Bechtel in 1999 resulted in an immediate tripling of water rates, which sparked off riots that resulted in the renationalization of the company. When the Argentinian government partially privatized roads in 1990 by awarding contractors the right to collect tolls in return for road maintenance, '[c]ontractors in control of a road leading to a popular beach resort sparked protests by building earthen barriers across alternative routes in order to force motorists to pass through their pay booths. And after travellers complained about the rip-off along another highway, contractors parked a fleet of phony squad cars at tollbooths to give the appearance of police backing.' Commenting on the privatization of the Mexican state-owned telephone company, Telmex, in 1989, even a World Bank study concluded that 'the privatization of Telmex, along with its attendant price-tax regulatory regime, has the result of "taxing" consumers -- a rather diffuse, unorganized group -- and then distributing the gains among more well-defined groups; [foreign] shareholders, employees and the government.'

(p. 125):

This is not a fringe phenomenon. A lot of research is conducted by non-profit-seeking organizations -- even in the US. For example, in the year 2000, only 43% of US drugs research funding came from the pharmaceutical industry itself. 29% came from the US government and the remaining 28% from private charities and universities. So, even if the US were to abolish pharmaceutical patents tomorrow and, in response, all the country's pharmaceutical companies shut down their research labs (which will not happen), there would still be more than half as much drugs research as there is today in that country. A slight weakening of patentee rights -- for example, being forced to charge lower prices to poor people/countries or being made to accept a shorter patent life in developing countries -- is even les likely to result in the disappearance of new ideas, despite the patent lobby mantra.

(pp. 158-159):

Gore Vidal, the American writer, once described the American economic system as 'free enterprise for the poor and socialism for the rich.' Macroeconomic policy on the global scale is a bit like that. It is Keynesianism for the rich countries and monetarism for the poor.

When the rich countries get into recession, they usually relax monetary policy and increase budget deficits. When the same thing happens in developing countries, the Bad Samaritans, through the IMF, force them to raise interest rates to absurd levels and balance their budgets, or even generate budget surplus -- even if these actions treble unemployment and spark riots in the streets. As noted above, during Korea's financial crisis in 1997, the IMF allowed the country to run budget deficits equivalent to only 0.8% of GDP (and, at that, after trying the opposite for several months, with disastrous consequences); when Sweden had a similar problem (due to the ill-managed opening-up of its capital market, as was the case with Korea in 1997) in the early 1990s, its budget deficits were, in proportional terms, ten times that (8% of its GDP).

Zaire vs. Indonesia, both countries with similar records of corruption, different records of development (pp. 160-161):

Zaire's income per capita in purchasing power terms in 1997, when Mobutu was deposed, was one third of its level in 1965, when he came to power. In 1997, the country stood 141st among the 174 countries for which the UN calculated a 'human development index' (HDI). The HDI takes into account not only income but also 'quality of life' measured by life expectancy and literacy.

Considering the corruption statistics, Indonesia should have performed even worse than Zaire. Yet where Zaire's living standards fell by three times during Mobutu's rule, Indonesia's rose by more than three times during Suharto's rule. Its HDI ranking in 1997 was 105th -- not the score of a 'miracle' economy, but creditable nonetheless, especially considering where it had started.

The Zaire-Indonesia contrast shows the limitations of the increasingly popular view propagated by the Bad Samaritans that corruption is one of the biggest, if not necessarily the biggest, obstacle to economic development. The argument goes that there is no point in helping poor countries with corrupt leaders, because they will 'do a Mobutu' and waste the money. This view is reflected in the World Bank's recent anti-corruption drive, under the leadership of former US deputy defence secretary Paul Wolfowitz, who declared: 'The fight against corruption is a part of the fight against poverty, not just because corruption is wrong and bad but because it really retards economic development.' After Wolfowitz assumed leadership in January 2005, the World Bank suspended loan disbursements to several developing countries on grounds of corruption. Wolfowitz resigned from the Bank in 2007 [because of his own corruption scandal], but its campaign against corruption continues.

Corruption is a big problem in many developing countries. But the Bad Samaritans are using it as a convenient justification for the reduction in their aid commitments, despite the fact that cutting aid will hurt the poor more than it will a country's dishonest leaders, especially in the poorest countries (which tend to be more corrupt, for reasons I shall explain).

(pp. 172-173):

The answer is no. Unlike what neo-liberals say, market and democracy clash at a fundamental level. Democracy runs on the principle of 'one man (one person), one vote.' The market runs on the principle of 'one dollar, one vote.' Naturally, the former gives equal weight to each person, regardless of the money she/he has. The latter gives greater weight to richer people. Therefore, democratic decisions usually subvert the logic of market. Indeed, most 19th-century liberals opposed democracy because they thought it was not compatible with a free market. They argued that democracy would allow the poor majority to introduce policies that would exploit the rich minority (e.g., a progressive income tax, nationalization of private property), thus destroying the incentive for wealth creation.

Kevin Phillips: Bad Money: Reckless Finance, Failed Politics, and the Global Crisis of American Capitalism (2008, Viking)

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(p. 16):

For the more sophisticated in Washington, the $60- to $95-a-barrel cost prevalent in 2006 and 2007 was only the most obvious of the energy-related problems. Dismissing memories of $12 oil in 1998 and $25 oil in 2003, the expert consensus was that the era of low-cost petroleum was done and gone. With the United States of 2007 producing only 35 percent of the crude it consumed -- by 2010, possibly as little as 30 percent -- the cost of buying the remainder elsewhere had become inescapable. Annual outlays for imported petroleum, $50 billion to $75 billion during most of the late eighties and nineties, had swollen to $100 billion in 2002, $130 billion in 2003, $180 billion in 2004, $232 billion in 2005, and $302 billion in 2006. The ever-larger checks written for black gold also weighed heavily in the broadest annual measurement of the U.S. trade gap: the current account deficit ($857 billion in 2006). Overall, oil-related optimism and promises by the U.S. government had not worked out since peace in occupied Iraq deteriorated into insurgency and regional separatism.

(pp. 16-17):

In 2006, Charles Weeden of Maxwell & Company, a top U.S. oil analyst, dramatized the simultaneous shortfall in new discoveries: "In 1930, we found 10 billion new barrels of oil in the world and we used 1.5 billion. We reached a [new discovery] peak in 1964 when we found 48 billion barrels and used approximately 12 billion barrels. In 1988, we found 23 billion barrels and used 23 billion. That was the crossover when we started finding less than we were using. In 2005, we found about 5 billion to 6 billion and we used 30 billion. These numbers are just overwhelming." Many well-informed geologists and industry consultants considered top producers like Russia, Saudi Arabia, and Mexico to have reserves well below what their governments publicly claimed. Each year, when members of the Association for the Study of Peak Oil convened in congenial cities like Uppsala, Sweden; Pisa, Italy; or Cork, Ireland, new evidence seemed to support their pessimistic calculations, while new speakers added luster to the cause. The sixth annual meeting in autumn 2007 saw Lord Oxburgh, a former chairman of Shell UK, predict $150-per-barrel petroleum, while James Schlesinger, the former U.S. CIA director and energy secretary, told the attendees that "the battle is over and the partisans of peak oil have won."

No one doubted that more fuel could be had from ultradeep drilling in the Gulf of Mexico and the South Atlantic; from submerged Arctic mountain ranges claimed by nearby Russia; from the western Canadian oil sands; from the heavy and superheavy oil deposits in the Orinoco Belt of eastern Venezuela; from shale oil in the U.S. Rocky Mountains; and from hard-to-reach, expensive portions of already-tapped fields the world over. The catch was twofold: deepwater drilling aside, new production was unlikely to be great, and these prospects assumed costly technology and prices remaining at or above $50-$60 per barrel. Furthermore, the up and down "market" forces generally prevalent during the twentieth-century heyday of the privately owned American and European oil giants, the famed Seven Sisters, were giving ground to the realities of lopsided control (three-quarters of world reserves) and overtly national ist agendas of the leading state-owned oil companies. In 2007, the Financial Times described Saudi Aramco, Gazprom, Petro-China, National Iranian Oil Company, Petrobras (Brazil), Petronas (Malaysia), and Petróleos de Venezuela as the "New Seven Sisters." Christophe de Margerie, the chief executive of Total,t he top French firm, described the supramarket calculus of these state companies, now that global capacity no longer sufficed to meet global demand, as marking "a revolution" in the industry.

Note that the $50-$60 per barrel minimum cited above, which seems like a bargain with oil prices running double that less than a year later, does not guarantee that Phillips' list of future oil projects can actually be developed economically. The oil sands, oil shales, and superheavy oil projects, in particular, are very energy-intensive, so their cost rises with the rising cost of oil -- all the more so when you start factoring the environmental costs in. Some substantial percentage of those reserves may never be economically developed at any marke price, for the simple reason that they produces less energy than it takes to extract and refine them.

(p. 44):

Clinton, somewhat like conservative Democratic president Grover Cleveland at the height of the late-nineteenth-century Gilded Age, slowly drifted into the orbit of New York finance. He got along well with the Republican chairman of the Federal Reserve Board; promoted Rubin to treasury secretary; raised a lot of reelection money on Wall Street (which, as will see, was also becoming more Democratic); joined with Citigroup chairman Sanford Weill, an active Democrat, to promote the sweeping federal financial deregulation act of 1999; exulted over the rocketing stock market averages; gravitated to resorts like the Hamptons and Martha's Vineyard; and on the occasion of one visit found himself hailed by a Hamptons chronicler who called the ebullient president "the spirit of the bull market." Before leaving the White House in 2001, Bill and Hillary Clinton moved their residence to New York, where Mrs. Clinton had won a U.S. Senate seat in 2000.

(p. 48):

Over the last three decades, finance cannily sidestepped the spotlight, like mushroom cultivation doing best in rich soil and darkness. Far from flagging its ascendancy with every new track or belching smokestack in the nineteenth-century manner, the financial sector -- not that the singular noun implies any single voice -- practiced a form of false modesty. References to the "real economy" in 2007 continued to suggest that U.S. finance occupied some small periphery where a hundred thousand Masters and Mistresses of the Universe collected rare wines and endlessly bought and sold structural products and derivatives with a notional value of $500 trillion [nb: he must mean billion], all the while never -- or hardly ever -- disturbing the safety and serenity of West Virginia, Wisconsin, and Wyoming. Even as the August 2007 panic subsided into autumn jitters, no serious debate about the transformation of the U.S. economy had been sparked.

(p. 62):

During his years as Fed chairman, Alan Greenspan kept a close eye on the nation's net worth numbers: Are assets rising faster than liabilities? If so, god. Back in 2002 the Fed needed housing values to climb so that net worth gains in that category would compensate for the $7 trillion lost between the stock market top in 2000 and its nadir in 2002. Then in 2006, as housing weakened, Treasury Secretary Paulson reinvigorated the Plunge Protection Team -- even the nickname smacked of assets worship -- to keep a close watch. Achieving and consolidating a 2,000-point climb in the Dow Jones Industrial Average could restore wealth in those financial ledger accounts even as home values dipped. Through mid-2007, that seemed to be on track. Financial journalists, in turn, noted how the Dow, since Paulson had taken over, had broken records for the amount of time passing without a 10 percent correction. And revealingly, on August 15 and 16, at the peak of financial market nervousness, wave after wave of stock index buys kept the correction from reaching 10 percent at any market close and thereby establishing bear market or correction status.

On jerryrigging the Consumer Price Index -- long because it wasn't obvious where to stop, and the issue is important because we depend on CPI to adjust "real" economic indicators (pp. 81-87):

The larger problem is that the federal government just isn't measuring inflation the way it used to. Until the 1990s, the CPI quite straightforwardly measured the cost of a fixed basket of goods using prevailing market prices. No statistical opportunity for clipped coinage or reminting to a lower standard existed in that constant. The current interlacing of gimmicks, by contrast, far from representing the costs of a constant standard of living, has been described by critics as measuring downward mobility -- an index that, in the words of one, "more closely represents the costs of holding to an ever declining standard of living," such as a family shifting between hamburger, pork, and chicken depending on the price."

The push to abandon the longtime fixed-basket-of-goods yardstick began in the early 1990s with Federal Reserve chairman Alan Greenspan and Michael Boskin, chairman of the Council of Economic Advisers under President George H. W. Bush. During the 1980s, Greenspan had chaired a presidential commission on Social Security that achieved no great long-term benefits changes, and by the mid-1990s he wanted to reduce Social Security outlays in the worst way, arguably just what the Boskin Commission, appointed by the new GOP Congress, recommended in its 1995 report. Social Security payments were not vulnerable to frontal political and legislative attack, so attention shifted to the CPI determination of how much retiree payments would rise each year. Greenspan and Boskin charged that the CPI overstated inflation by as much as 1.5 percent, and the Boskin Commission recommended a set of revisions to the Bureau of Labor Statistics, which generally concurred. These changes were implemented between 1997 and 1999, while the public and the politicians were preoccupied by bull market euphoria and the actions in Congress to impeach Bill Clinton.

Unfortunately for the government, a former journalist in Oakland, California, named John Williams took it upon himself and his small firm, ShadowStats.com, to calculate the CPI using the old criteria and to publish those figures alongside the new numbers. The results are disconcerting. As figure 3.3 [see below; not the exact same figure, as it extends into 2008 and includes the extra Experimental C-CPI-U line] shows, if the methodology used in 1990 still held sway, the government would have been reporting 5 to 7 percent inflation between 2005 and 2007 instead of essentially 2 to 4 percent. Statistically, that's a huge difference. For example, if 2 to 3 additional percentage points had been subtracted from the official GDP numbers in order to give inflation its due, that would have dropped the U.S. economy into recession or to its borderline.

Critics of the new methodology usually emphasized three or four deceptions. The best place to start is with the emphasis on consumer substitution that so inspired Greenspan and Boskin. The 1990-92 downturn was deep enough that suburbanites from Denver to Washington to Boston were turning to food stamps and charitable pantries; there is little reason to doubt that many were also price-shopping between hamburger, chicken, and canned stew. But we can assume others had also done so in the deep recession troughs of 1958 and 1974 without prompting the government to institutionalize such defensive approaches as a normal feature of the American dream.

Yet just this occurred in 1999, when the Bureau of Labor Statistics adopted so-called geometric weighting for its now-flexible basket of goods. Items going up received less weight, thereby easing inflation, while items becoming less expensive received more weight, likewise easing inflation. As critic Joseph Stroupe explained, "Since, in the absence of significant price inflation, consumers would be unlikely to engage in substitution on a meaningful scale, then it is also an indirect but powerful admission that significant price inflation does exist, for why else would consumers switch from more expensive items to less expensive ones?"

Which brings us to the born-again CPI's principal controversy -- the use of "hedonics" (a government attempt to measure increased pleasure) in order to moderate prices by reducing them for the increased satisfaction a consumer derives from some improvement. Caught out on a shaky limb, the government dropped its large-scale hedonic reduction of computer prices in 2003 after a critical letter from the National Science Foundation's Committee on National Statistics. Moreover, according to the BLS, the consumer electronics category, heavy with declining prices (usually exaggerated by hedonics), accounted for only 1 percent of the CPI, minimizing its practical importance.

What remained, however, was powerful data on how hedonic calculations had falsely ballooned computer sales and thereby artificially enlarged GDP growth. Steve Milunovich, a well-regarded computer analyst at Merrill Lynch, explained in a 2004 report that the federal Bureau of Economic Analysis, responsible for ascertaining the gross domestic product each quarter, had stopped reporting the real computer hardware shipment figure that was used to calculate GDP growth. The government, it seemed, decided that between the second quarter of 2000 and the fourth quarter of 2003, real tech spending had risen by $111 billion, from $446 billion to $557 billion. However, in nominal (price-tag) terms, it had climbed only from $42 billion to $88 billion. The BEA hypothesized the rest to represent the added value it perceived in computer quality! In 2007, economic historian Peter Bernstein wrote in the New York Times that because of the distortions of hedonic pricing, it might be more realistic to have a new auxiliary CPI measure that included food and energy but excluded consumer durables. Other nations have declined to use the hedonic approach. The Japanese earlier took the matter under study, and Germany's Bundesbank noted that hedonics would have increased that nation's GDP by 0.5 percent.

Even critics acknowledge that the great majority of U.S. economists favor some sort of hedonic adjustment in the CPI. One wonders if economic historians would share that view. Why now? Why not earlier? I was a teenager in the 1950s, and after spending a year in Europe, I came home in 1960 well reminded that the United States was paradise for the middle-class consumer. If hedonics properly apply to watching a current-day fifty-inch high-definition television by upgrading from a forty-two-inch version, why not back in 1952, when TV screens got big enough to watch from more than five feet away? A short list of legitimate fifties hedonics could include air conditioners, air travel (jet), automatic transmissions, barbecues, color photography, dishwashers, drugs (over-the-counter and prescription), electric shaves, Frigidaires, frozen foods -- and that's just to the letter F. To answer the question "Why now?" we must look at the historical trajectory -- and the answer is essentially inglorious.

The third fiddle in the ever-changing CPI involves how the 70 percent of Americans who own homes fail to see anything resembling their actual expenses included in the official measurement. Housing represents 40 percent of the CPI, but what the BLS computes is quite misleading. The bureau's yardstick is called "owners' equivalent rent" -- the amount that homeowners could get were they to rent out their homes. To illustrate how unresponsive this figure has been to recent homeowning realities, consider three situations. First, let us suppose the Smiths just bought a house that they had previously rented for $2,000 a month, and that their new monthly total of mortgage, insurance, and property taxes if $3,000. The effect on the CPI: zero, no increase. Now suppose they had always owned and their property tax bill just went up 40 percent. Effect on the CPI? Nil. Now suppose they bought in 2005 under an "exotic" mortgage, an dthe monthly payment has just reset from 4.5 percent to 7.5 percent. What would be the effect of those circumstances on CPI? Again nil. None of these would affect owners' equivalent rent, even though in the real world, they were out of pocket mightily.

Here, just as with food and energy, the measurement shunned because of "volatility" -- yes, housing costs are volatile -- is the one that meaningfully reflects trends. Consider, for example, the 2003-6 difference between the 5 percent yearly increase in owners' equivalent rent and the 10 to 20 percent annual increase in the S&P/Case-Shiller Home Price Index. Obviously, the OER and the home price index are not parallel. An index of mortgage payments, insurance costs, and property taxes would serve better. Still, the comparison shown in figure 3.4 is worth noting. Using the housing price data yields a CPI increase 2.5 to 4 percentage points above the official one released by the Bureau of Labor Statistics.

(p. 88):

Beginning in March 2006, the new Fed chairman, Ben Bernanke, ordered that the government cease publishing data on changes in the boradest measurement of the U.S. money supply, the so-called M3. It was expanding at a 10-12 percent annual rate in 2006; outsiders calculated that as of August 2007, that growth had accelerated to a high-powered 14 percent. This category, pulling away from the narrower measurements, M1 and M2, was arguably the one that picked up the explosion of money and credit taking place in financial sector debt. Continued publication of M3 reports would have undercut the assertion of Bernanke and Federal Reserve Board colleague Frederic Mishkin that the inflationary expectations of the public had been safely "anchored" at a low level by the tame core CPI. This suppression of data, alas, went a long way to prove Sir Walter Scott's adage about what a tangled web people weave when first they practice to deceive.

(p. 91):

Arguably, though, such religion was a logical outgrowth of an angst-threaded economic consumerism, powered by incessant "be all you want to be" advertising and funded by home equity withdrawals and credit card debt, in which a relatively small population at the top reveled in a large and rising percentage of the nation's income and wealth. While this took place, average household incomes stagnated, personal debt soared, and hints of a credit and housing crash added new worries. For some among America's less successful, the prosperity preachers and churches were probably the last resort between lost jobs or ambitions and the deeper embarrassments of home foreclosures, divorces, or bankruptcy courts.

(pp. 120-122):

Being precise about how often Britain and the United States have invaded Iraq because of petroleum -- or, for the naive among us, intervened to etablish or secure democracy -- isn't easy. In 1991, of course, and arguably in 2003. The first British military incursions, during World War I, took place while oil-rich Mesopotamia was still a provine in the Ottoman Empire. In 1941, just before Hitler's troops invaded Russia and reached as far as the Caucasus, British troops went into Iraq to stave off an oil-motivated German attack abetted by the Vichy French regime next doorin Syria. Clearly, we can't count the 1959 plot by the Central Intelligence Agency to kill Iraqi strongman Abdul Karim Qasim -- incredibly, the young Saddam Hussein was among those enlisted by the CIA -- because that did not involve an actual invasion. Neither did Washington's success, way back in the 1920s, in persuading Britain to cut the United States in for a partial share of the oil in what had become British-occupied Iraq. Petroleum-driven Anglo-American interest in the Persian Gulf goes back a long way.

Denying that the motive is oil is often wise, though, and sometimes even necessary. Lord Curzon, the British foreign secretary, drew mockery in the press and in Parliament for insisting such in 1924, although similar assertions by the U.S. president and the British prime minister in 2003 were treated respectfully. In 2007, former Federal Reserve chairman Alan Greenspan caused a stir when he stated matter-of-factly that the 2003 invasion had been about oil. Perhaps he knew, as did others, about the amount of time that Vice PResident Richard Cheney's high-powered task force on energy had spent studying the maps of the various Iraqi oil fields. In Cheney's mind, it was probably always about oil.

In any event, the apparent American attempt to make U.S. energy policy from bomb bays and guided-missile cruisers misfired in 2003. The botched occupation of Iraq boiled up into a serious local insurgency, destroying Washington's private dream of throwing open Iraqi oil spigots, driving down oil prices, and breaking the power of OPEC and its state-owned oil companies. Predictably, these producers more than shared the worldwide dismay over U.S. actions, and not just because they feared competition. By 2006 OPEC and non-OPEC petroleum exporters were also becoming more concerned about the peak-oil thesis, inasmuch as global crude oil production seemed to plateau after 2005 despite increasing world demand.

What Cheney may have feared about supply and upward price pressure in 2001 seems to have taken place, and then some. During the five years after the invasion, petroleum prices ballooned from $25 per barrel to the $100 range. This was the cause, but also the effect, of a steady slippage in the value of the U.S. dollar. The burden for the United States of having to import two-thirds of the oil it consumed became more and more costly. The price of oil rose, and Washington's credibility declined, and this double blow undermined the dollar's long-standing role in global petroleum sales -- since 1974, greenbacks had been the semiofficial currency of international oil transactions. The dollar's weakening only increased interest within a number of producing nations in two possible responses: reducing, or ending, the role of the dollar as the world's reserve currency, or pricing petroleum sales in some other currency or combination of currencies. Watchful experts in the United States knew that if producers did either, it would only add to a perception of U.S. weakness.

Actually, it's always been hard to pin down what Cheney et al. wanted to accomplish regarding Iraq's oil. To the extent that they represent oil producers as opposed to oil consumers they are most likely satisfied to have taken so much Iraqi oil off the market, in turn pushing up prices and profits for their sponsors, regardless of the harm they do to other sectors of American business. The weak dollar also helps them in some sectors, while hurting them in others. I don't know that anyone has really worked their balance sheets out, even them.

(p. 123):

Which brings us to a too-little-examined dimension of our current energy predicament: how the prior eminence of the United States in global petroleum matters has left not only an outdated infrastructure but a spectrum of disabilities, unwarranted smugness, vested interests, and booby traps. These range from currency vulnerabilities and lack of a serious national energy strategy to apparent policy inertia in Washington, where many officeholders eem unable to understand how much has changed for the United States over the last decade.

(p. 130):

At September's annual international conference of the Association for the Study of Peak Oil an dGas (ASPO) in Ireland, Lord Oxburgh, the retired chairman of Shell UK, predicted that oil would climb to $150 a barrel, while former U.S. energy secrtary and CIA director James Schlesinger, in one of a number of pithy comments, said, "The battle is over, and the oil peakists have won. Current U.S. energy policy and the administration's oil strategy in Iraq and Iran are deluded." October brought two more major conferences -- one in Texas cosponsored by the University of Houston and the U.S. section of ASPO, the second thematically named "Oil and Money" and held in London. Once again, blunt comments flowed. Speaking at the ASPO meeting in Houston, oilman T. Boone Pickens and Texas investment banker Matthew Simmons agreed that 2005 had been the global production peak year, with Simmons also reiterating his widely reported doubts about Saudi Aramco output claims.

Conference-goers in London heard experts from two OPEC nations -- Sadad al-Husseini, former chief of exploration and production at Saudi Aramco, and Shokri Ghanem, chief executive of Libya's National Oil Company. Ghanem told the audience that world production could not go above 100 million barrels a day, and that when that ceiling was reached -- optimistic U.S. officials projected that level of output by 2015 to 2020 -- global production would start to decline. Al-Husseini was even more provocative. In one of the interviews he gave at the London conference, the candid Saudi more or less agreed with the Pickens-Simmons thesis. He indicated that world production was in the process of making a 2005-7 top and would plateau for ten to fifteen years at roughly the same level, assuming prices were raised some $12 a year to incentivize the continued output of oil and other related liquids. He further suggested that world oil reserves were inflated and that 300 billion of the 1.2 trillion barrels -- mostly in the OPEC countries -- should be reclassified as speculative resources.

(p. 153):

Here we must turn to a second semantic issue -- the extent to which energy terminology has begun to change in a highly significant way. Professor Michael Klare summarizes it this way: In May, the Energy Department "stopped talking about 'oil' in its projections of future petroleum availability and began speaking of 'liquids.' The global output of 'liquids,' the department indicated, would rise from 84 million barrels of oil equivalent (mboe) per day in 2005 to a projected 117.7 mboe in 2030 -- barely enough to satisfy anticipated world demand of 117.6 mboe." Peak-oil stalwarts like Simmons have made the same point: crude-oil production is what has peaked, and the liquids -- from tar sands, oil shale, biofuels, coal-to-liquids, and gas-to-liquids -- must now be included to keep things on track. Perhaps they can do so; certainly they can for several years. But that is not the only issue. If crude production has peaked, with its many ramifications, that in itself conveys an enormously significant message.

It's worth noting here that recent announcements of Saudi plans to increase production are totally dependent on gas-to-liquids. One problem here is that light hydrocarbon liquids like butane cannot be used to produce such needed petroleum-based products as gasoline and kerosene. Such liquids have their uses, but are far more limited than crude oil.

(p. 159):

That certainly included politics. Celebrity was a boon to fundraising, if not necessarily to competence. Among the 535 members of the 107th Congress, elected in 2000, 77 were relatives of senators, representatives, governors, judges, state legislators, or local officials. In Rhode Island, after Republican Lincoln Chafee was named to his father's U.S. Senate seat, Democratic congressman Patrick Kennedy made this joke at a local roast: "Now when I hear someone talk about a Rhode Island politician whose father was a senator and who got to Washington on his family name, used cocaine and wasn't very smart, I know there is only a 50-50 chance it's me."

Phillips is refreshingly consistent in his opposition to political dynasties (pp. 161-162):

Although [Grover] Norquist and other Republicans suffered from convenient blindness and inattention in 2000 and 2004, George W. Bush from the first represented an extension of his family's biases and favoritisms. He also had family access to a huge GOP big-contributor base, was committed to Texas and oil-industry interests, and was willing to pander to the religious Right. He respected his family's long-standing alliances with the Saudis and othe rPersian Gulf elites, inherited the family's personal grudges against Saddam Hussein, and had an intense desire to attack Iraq. In winning back the White House, he also brought along employment commitments to a plethora of family political retainers, GOP lobbyists and fixers, loyal fund-raisers, and others, frequently above and beyond the usual duties and engagements of a presidential nominee. Most of the connections and commitments were visible from the start -- the big-contributor contacts smoothed the way to nomination -- although the younger Bush's intoxication by Iraq and the religious Right turned out to be particularly self-defeating.

Drawing up a similar list of the familial baggage of Hillary Clinton is in some ways easier but in other ways more difficult. In contrast to George W. Bush -- during his father's four-year term from January 1989 to January 1993, the younger bush was mostly back in Texas and not taken very seriously -- Mrs. Clinton during her husband's eight years in office was very openly and closely involved in White House policymaking. No one could call her inexperienced or unskilled. On teh contrary. Indeed, the most prominent analyses published in 2007 -- A Woman in Charge by Carl Bernstein and Her Way by New York Times reporters Jeff Gerth and Don Van Natta Jr. -- elevated her role to being almost a co-president or suggested that the Clinton blueprint had always involved a commitment to his presidency first, followed by hers. For better or worse, and despite her independent career after 2000, that legacy in itself hinted at a continuity between the policies and people of January 1993 to January 2001, and the probable policies and people should a Clinton again occupy the White House between January 2009 and January 2013. Dynasty became more of an issue in 2008 than it had been in 2000.

(pp. 177-178):

To be sure, there is some overlap betwen ardent believers in peak oil and persons worried about emissions, global warming, and a dangerous climatic tipping point. Many in both camps agree on the need to cut back on the 50 percent of U.S. oil consumption that is required to gas up fuel-guzzling automobiles. But there's much less concurrence on new fuel sources -- oil sands, coal-to-liquids, nuclear power, and the like. If one of the two energy-related showdowns can be shown as holding off until 2030 while the other lay just ahead, priorities could develop. But if one worries about both, in proximate but unknowable time frames, the pressures and potential politics get tough. Assuming that both concerns have merit, but that there is some leeway, perhaps 2016-20 could see a double dimension: rising seas and small islands going under, oil-linked civil wars in Africa, $8.75-a-gallon gasoline in California, abandoned housing in U.S. towns where commuting is no longer affordable. However, if the true believers are right about problems being nearer at hand, then the tension could intensify between 2012 and 2016. Or if the most panicked experts are correct, then the regime taking over Washington in 2009 will face the crisis.

(p. 200):

The underlying question before us in this last chapter is whether the housing and credit crisis expected to span the 2007-10 period constitutes the global crisis of American capitalism, in the sense of being the one that signals the Great Transferal to Asia. Based on the points I have made in this book, that outcome certainly seems possible. Global respect for the Unitd States slumped drastically in 2002 and following the invasion of Iraq, and then again in 2005-7 as the survey data in the appendix so unfortunately illustrates. The value of the U.S. dollar has followed pretty much the same course. Between the deepening dislike of the United States in much of teh Muslim world and the decline of the greenback, Persian Gulf states that once reinvested most of their oil revenues in U.S. bonds and kept their currencies peggedf to the dollar no longer believe that Washington is a capital city that keeps faith. Given U.S. dollar policy in 2007, it is easy to see why.

(pp. 203-204):

As suggested in chapter 2, a case can be made that Washington partially shifted to policies of financial mercantilism as early as the 1980s. This happened through that decade's series of federally orchestrataed domestic and international bailouts, accompanied in 1988 by the presidential order to set up the Working Group, with its probable covert mandate to repeat where necessary the interventions employed during the tense days of the October 1987 crash. At very least, both the facts and the inferences suggest a mockery of strict free-market economics.

No one should be surprised to read someday that during the eighties, senior officials established at least vague guidelines for a policy of maintaning national assets. Such an intention would have stretched from bank, credit, and currency bailouts to a collusive monetary poicy designed to drown any threatened asset deflation in liquidity and never, ever to pop an asset bubble. Here Greenspan and his successor, Ben Bernanke, put themselves at odds with views elsewhere in central banking circles that asset bubbles should indeed be popped -- and that U.S. unwillingness to do so might even imperil global markets. We have certainly had the bailouts and off-and-on gushes of liquidity, and the most freewheeling treasury secretaries of the last two decades, Henry Paulson and Robert Rubin, have shown a rare protectiveness toward the sanctity of stock market advances. Even Paulson's de facto soft-dollar policy of 2006 and 2007 makes sense if one takes a Machiavellian view of a commitment to maintain assets.

The cynic's explanation is this: A weak dollar stimulates exports, therby narrowing the trade deficit. A weak dollar also allows multinational corporations to (1) show larger overseas earnings (as local currencies translate into more dollars) and (2) increase the worth of their foreign holdings and subsidiaries as stated in dolllars. For Americans, a cheap currency also keeps up the nominal value of the Dow Jones, the S&P 500, and other U.S. stock market averages. Measured in euros, British pounds, or Brazilian reals, these indexes did much lesswell over the last five years than when measured in (cheap) dollars. columnist John Authers half joked that "whether they realise it or not, investors' positive sentiment int he U.S. may rest on the weak dollar."

(pp. 206-207):

There is no better distillation of the harm inflicted -- and probably yet to be inflicted -- than that of hedge fund manager Richard Bookstaber in his 2007 volume, A Demon of Our Own Design: Markets, Hedge Funds, and the Perils of Financial Innovation. His underlying point is that even though financial strategists can keep dreaming up new instruments, it's not a good idea to do so, because each innovation adds layers of increasing complexity, tight coupling, and risk. By way of comparison, "consider the progress of other products and services over the past century. From the structural design of buildings and bridges , to the opdration of oil refineries or power plants, to the safety of automobiles and airplanes, we learned our lessons. In contrast, financial markets have seen a tremendous amount of engineering in teh past 30 years, but the result has been more frequent and severe breakdowns. . . . The integration of the financial markets into a global whole, ubiquitous and timelymarke information, the array of options and other cerivative instruments -- have exaggerated the pace of activity and the complexity of financial instruments that makes crises inevitable."

Robert Kuttner: The Squandering of America: How the Failure of Our Politics Undermines Our Prosperity (2007, Knopf)

---

(p. 6):

The failure of politics to seriously engage national problems goes hand in hand with the disrepair of democracy itself. For the first time in more than a century, the national government in the Bush era has spent more effort on suppressing voting than on expanding it. Serious people have good reason to believe that one or both of the last two presidential elections were stolen. Political participation is declining, as money crowds our civic engagement.

When politics does not deliver for people, the people give up on politics. Or they see politics as a realm mainly for cultural warfare, for battles over patriotism, or as something for other people. People internalize economic reversals. Pocketbook troubles seem to be private failures rather than the consequence of political choices. The very citizens most exposed to the most severe economic stress have been deserting politics at the most accelerating rate.

This disconnection of the people from their politics, in turn, leaves democracy far less energized. Consequently, when an autocratic administration ignores rights and laws, invents extraconstitutional doctrines such as presidential "signing statements," uses a state of permanent warfare to undermine free debate, or colludes in the suppression of the fundamental right to vote and to have every vote counted, there is far too little popular outcry. This is a recipe for losing both a tolerably just society and our democracy.

(p. 8):

Elites have not always been heedless of the common good. The American Republic was invented by a planter class that nonetheless believed deeply in democratic values and wanted to improve daily life for the common citizen. Many Americans of financial means were among the leaders of the abolitionist movement. In the Progressive Era, the robber barons who wanted to seize as much as possible for themselves were balanced by patrician reformers who cared about the well-being of the collectivity. Many reforms were the handiwork of the latter. Franklin D. Roosevelt, famously, was a class traitor, as were many of his New Deal colleagues. As recently as the Nixon era, there were influential progressive Republicans who supported universal health insurance, strict environmental regulation, and even a guaranteed annual income. Republicans were the stewards of fiscal responsibility. Today, it is hard to find a patrician who cares more about the republic than his own tax breaks and stock options.

(p. 11):

Politically and ideologically, the regulatory revolution of the 1930s and 1940s was possible because the usually dominant business elite was enfeebled (temporarily, as it turned out) by the practical failure of laissez-faire. Government enjoyed rare prestige in a normally libertarian country, because the federal government, under Franklin Roosevelt and Harry Truman, put people back to work, rescued capitalism from itself, then mobilized public resources to win a total-commitment war, and also underwrote new benefits, such as Social Security, unemployment compensation,the G.I. Bill of Rights, and Federal Housing Administration (FHA) loans, which allowed the Depression generation to graduate into the postwar middle class. The enterprise of managed capitalism was a practical success. Though few ordinary Americans understood this success as the achievement of a managed form of capitalism,much less knew the term, the idea was firmly implanted in the popular culture as a broadly shared premise about how the economy is supposed to work.

(p. 20):

In September 2005, Robert Gordon, an eminent and mainstream economist at Northwestern University, and his colleague Ian Dew-Becker presented a scholarly paper at the Brookings Institution entitled "Where Did the Productivity Growth Go?" They found, studying Census Bureau and Bureau of Labor Statistics data, that during the entire period 1966-2001, "Only the top ten percent of the income distribution enjoyed a growth rate of real wage and salary income equal to or above the average rate of economy-wide productivity growth." Just one American in ten captured the lion's share of society's productivity growth -- for three decades. And even this understates what actually occurred. It was the top one tenth of 1 percent that gained the very most. Those between the 80th and 90th percentiles about held their own. Those between the 95th and 99th percentiles gained 29 percent, those from 99 to 99.9 gained 73 percent, and the top one tenth of 1 percent of the population -- one American in a thousand -- gained a staggering 291 percent. By 2004, more income went to the top 1 percent than to the entire bottom 50 percent.

(pp. 20-21):

The Economic Policy Institute reported that in 1979, the top 1 percent had 9.3 percent of all income. By 2000, this share had almost doubled, to 17.8 percent. Were it not for the fact that the average family was working at least 500 more hours a year in 2000 than in 1970, mainly because of women's mass entry into the paid labor force, incomes for the vast middle would have fallen even farther behind. This increase in the work hours required to make ends meet, and the concomitant reduction in leisure and in time for child rearing, is also a real decline in living standards that doesn't show up in the household income statistics.

(p. 27):

For example, economists calculate that helping young adults to get on the home ownership ladder earlier in their lives offers a very substantial economic boost. They begin accumulating equity sooner, they realize tax benefits, and they are spared from having to pay exorbitant and rising shares of their incomes for rent as they have children and need more space. They are likely to acquire better first homes and build wealth earlier in life -- and for most Americans, the equity in their homes is their principal form of net worth. As housing prices have outstripped income, delaying first-time home ownership also increases the entry cost.

(p. 32):

In truth, the ideal of an Ownership Society in America is more than two hundred years old, and it has entailed the affirmative use of government mainly to help ordinary people -- exactly the opposite of the radical individualism plus tax incentives commended by the Right. America has a high rate of home ownership because Thomas Jefferson was committed to land tenure policies that favored small freeholders; Lincoln gave us the Homestead Acts, which allowed people without financial wealth to become farmer-owners; Roosevelt's administration invented the federally insured self-amortizing mortgage; and Truman's offered even cheaper mortgages via the G.I. Bill of Rights. We are a well-educated nation because we were the first to have free, tax-supported public schools, and government began subsidizing broad-based higher education with land-grant colleges beginning in 1862. We have enjoyed secure retirement because of a blend of Social Security and tax-favored private pensions. In every case, government serves the goal of individual self-reliance and achievement. In no case is the risk piled solely onto the individual. The Right has sought to appropriate this legacy, but its policies would actually reverse it.

(p. 35):

The two generations that reached retirement age after 1955 benefited not just from more reliable private pensions. Social Security payouts as a share of lifetime income steadily increased until the early 1980s. Real incomes rose, making it easier to save. And there was a one-time windfall in the rising value of owner-occupied housing. Every one of these supports is going into reverse. A 2006 study by Munnell and Sundén on retirement insecurity calculates the combined effect of all these factors in income adequacy for the elderly. They find that 35 percent of "early boomers," those born between 1946 and 1954, will be at serious risk of not having enough income when they begin retiring late in this decade. For "late boomers," born between 1955 and 1964, the proportion at risk rises to 44 percent. And for "Generation X," born between 1965 and 1972, the number is 49 percent. Of course, it is lower-income people who fave the greatest risk, while those who inherit substantial sums from affluent parents, whatever their own lifetime earnings and savings habits, face little risk at all.

(pp. 44-45):

As government has largely ceased to offset the instability of markets, ordinary voters have given up on government making much of a difference in their lives. The ideology of deregulation has become dominant in both political parties. Republicans have been so successful at two rounds of tax cutting and deficit deepening (in the eras of Reagan and Bush I, and then again under Bush II) that many Democrats now see their main task as balancing the budget rather than restoring economic opportunity. This has the handy side effect of neutering the Democrats politically. Budget balancing is not exactly a clarion call to economically frustrated citizens, so the potential alliance between Democrats and alienated voters is never consummated. In addition, since Jimmy Carter's presidency, many Democrats have colluded in the Republican project of government bashing. Even when they don't openly disparage government, most Democrats are unfriendly to economic regulation.

(pp. 47-48):

None of this pulling away at the top and widened inequality is the result of "the market," as if markets were spontaneous creations of nature. All functioning markets are creatures of laws, beginning with laws defining and protecting basic property rights, laws creating and privileging corporations as legal "persons," and laws defining the right of shareholders and duties of corporate boards. Laws can lead to a narrower or broader diffusion and an economy's benefits. In the past three decades, because of the capture of the political process by economic elites, the movement in the evolution of laws governing capitalism has been entirely in one direction -- toward a legal conception of markets that narrows rather than broadens concentrations of wealth.

(pp. 60-61):

Plenty of innovation will still occur. Back in the era of a more equal America, entrepreneurs innovated even though their financial returns were only in the tens of millions rather than the billions. And some, like Jonas Salk, or Tim Berners-Lee, who created the World Wide Web, did it for the sheer joy of making a better world and settled for a decent professional income. Indeed, the whole culture of windfall gain is at risk of crowding out the necessary public-mindedness of scientists, doctors, and educators, most of whom would happily take a congenial work environment and a good professional salary, but whose peer culture is signaling them that they are suckers unless they go for astronomical incomes. This trend is corrupting the values of fields like scientific research.

(pp. 68-69):

For every genuine entrepreneur who invents something truly new and who arguably "deserves" annual income in the tens or hundreds of millions, there are countless routine corporate CEOs tending mature companies who have increased their typical earnings tenfold sine the 1980s without adding anything like that multiple to the corporation's wealth creation. They are simply taking a free ride on the shifting norms of what CEOs are paid, norms that are largely the fruits o the winner-take-all psychology promoted by deregulation. Every year, the financial press reports on innumerable CEOs whose pay rose while the company's earnings fell.

(pp. 73-74):

In their essence, the Wall Street scandals of the 1990s were about conflicts of interest -- invited by deregulation and abused by insiders to their own financial advantage. In almost every case, the speculations involved borrowed money, often deliberately concealed and thus exponentially increasing the risk of loss in the event of a sudden downturn, miscalculation, or exposure of fraud. Far from enhancing economic efficiency -- always the rationale for giving financial markets and their speculators more license -- deregulation promoted insiders' enrichment at the expense of small investors, ordinary employees, and pensioners and jeopardized the efficiency and solvency of the system as a whole.

(pp. 74-75):

In the 1980s and 1990s, however, every element of agency failed. Deregulation and lax enforcement of the regulations that remained eroded professional norms that had constrained rank opportunism. Supposedly independent auditors colluded with management to dress up corporate books. Ostensibly fair-minded securities analysts serving investors turned out to be stock touts looking to bring their firm underwriting business based on their success in running up a client company's share price. Boards of directors that allegedly represented shareholders helped crony CEOs reap astronomical compensation packages largely disconnected from actual company performance. Corporate boards promoted stock options that gave executives incentives not to optimize true performance but to inflate the share price in the short run. Mutual funds, rather than serving as the agents of investors, took huge transaction fees and invariably voted their shares with management. Brokers and investment bankers helped themselves and their favorite clients to new stock issues (IPOs) at preferential prices not available to the public. Institutions of self-regulation, such as the National Association of Securities Dealers, the American Institute of Certified Public Accountants, and the New York Stock Exchange, went after minor infractions but not the deeper corruption.

(p. 96):

The oil shock of 1973 and higher inflation created an opening for financial deregulation in several ways. The fixed exchange rates that had anchored the global trading system failed to hold. With U.S. inflation rising and foreigners clamoring to exchange dollars for gold, President Richard Nixon abruptly delinked the dollar from gold and shifted to a regime of floating exchange rates. Floating rates, whose values were set daily by trading markets, quickly offered a whole new set of opportunities to speculate in currencies, often destabilizing entire economies. Inflation also played havoc with the regulation of the interest that federally insured banks and thrift institutions could pay on savings and checking accounts. The regulatory premise was that if banks got into the game of bidding for deposits, as they had done in the 1920s, they would then need to earn higher rates of return and might take unacceptable risks with depositors' money (which in fact they did, both then and now).

(pp. 112-113):

In an era of derivatives, margin regulation has become a joke, something that restricts only the small and the unsophisticated. Banks collude in the circumvention of margin limits, and regulators collude in the banks' behavior. Hedge funds borrow their money from the largest money center banks, often at preferential rates because they are such large borrowers. The transactions are presumably safe, because many trades in derivatives are settled daily, although some hedge funds have bargained for, and received, long-term lines of credit. In ordinary transactions, banks are owed the money to settle a hedge fund market play. But in another major hedge fund collapse, there would be no market for these derivatives, the hedge fund would quickly run out of money to pay off the banks, and liquidity would dry up. Moreover, with the merger and consolidation of major lending institutions into a handful of trillion-dollar behemoths, a great many hedge funds are making essentially the same bets, financed by the same banks.

(pp. 120-121):

Burger King was taken private in 2002. In February 2006, it was taken public again. The private owners, a consortium of the Texas Pacific Group and Bain Capital, more than tripled their stake in less than four years. Burger king is roughly as profitable today as it was in 2002, though its market share has continued to fall. Is it really possible to triple the efficiency of a commodity business such as selling fast food? Or were these private-equity firms cooking the books along with the burgers? Barring a lawsuit charging outright fraud (which is far more difficult today, thanks to the legislation passed by the Republican Congress in 1996), we'll never know, since once a company is taken private it enters a regulatory black hole.

Private-equity funds promote these deals not just for the opportunity to make a quick killing on the acquisition and resale. There are also lucrative fees to be had. For instance, in the Burger King buyout from a British-owned chain, the two private investment firms collected an initial $22.4 million in unspecified fees. Burger King then began paying its new owners quarterly management fees for monitoring its business and serving on its board. In 2006, these fees added up to $29 million. And just before the new public offering, the owners voted themselves a handsome $367 million dividend. Finally, the two private investment firms collected a $30 million "termination fee" from the company for selling it off.

One of the owners who flipped Burger King for a quick profit, Bain Capital, is a well-established private investment firm cofounded by former Massachusetts governor Mitt Romney. In 2005, it tried to buy the entire National Hockey League. The other owner, Texas Pacific Group, works closely with Goldman Sachs. With private-equity firms proliferating, the big, established Wall Street houses are not about to let independent operators make off with this lucrative business. Goldman has so many fingers in so many pies that it can make money on fees, commissions, underwriting, lending, and in this case as an owner/speculator. When Burger King started selling shares to the public again, Goldman reaped another $6.3 million in underwriting fees. The two private-equity firms ended up tripling their original investment, yet, after selling some shares to the public, still retained a 76 percent stake. What, exactly, did the new owners contribute?

(p. 124):

As evidence, Pearlstein got hold of a memo from another private-equity pioneer, Bill Conway, a founder of the Carlyle Group. Conway warned: "Frankly, there is so much liquidity in the world that lenders (even 'our' lenders) are making very risky credit decisions. . . . I know the longer it lasts the more money our investors (and we) will make. . . . And I know that the longer it lasts, the worse it will be when it ends." Pearlstein and other commentators pointed to the huge potential for conflicts of interest between the general and limited partners of Blackstone and their public shareholders. "[W]hen the market finally turns and deals blow up," Pearlstein warned, "you can be pretty sure that fund managers will do everything they can to protect themselves and the interests of their limited partners and let the saps who are public shareholders take it on the chin."

(p. 136):

If public policy makers wish to help more low-income Americans become home owners, there is a far better approach than relying on sleazy mortgage brokers peddling bait-and-switch products that leave a trail of foreclosure and heartbreak. At other times in our history, the government has offered subsidized mortgages to first-time home buyers through the VA and FHA. The 3 percent down payment loans offered through FHA have a far lower default rate than those of subprime lenders. Government-backed nonprofits such as Neighborhood Housing Services of America are not in the mortgage business for a quick buck but to counsel low-income home buyers and to work with them for the long haul. Neighborhood Housing Service's foreclosure rate is close to zero.

(pp. 170-171):

Today there is a deficit problem once again, because of the huge holes blown in the tax code by several rounds of tax cuts. Vice President Dick Cheney said out loud in 2002 what as lot of Republican politicians privately believed: "Deficits don't matter." The public outcry of 1992 had come and gone. Republicans and the business elite seemed to care about deficits when they could be blamed on Democratic "tax and spend" but not when they resulted from Republican tax cuts. Grover Norquist, the Republican tax-cut strategist, articulated the real game: "Starve the beast." The real point of the tax cuts was to create an endless cycle of deficit crises whose cure would be more cuts in spending.

Precious few Republicans put fiscal balance ahead of tax cutting. That left the Democrats as the paladins of deficit reduction. In July 2006, the Democratic House leader and later Speaker, Nancy Pelosi, solemnly pledged that every penny of money gleaned from any reduction in the Bush tax cuts would go for deficit reduction, not new social outlay. This deficit-hawk role is not only thankless but self-defeating. As a matter of politics, Cheney is right. After seeing the deficit wolf banished in the 1990s, most voters don't care much about deficits in the 2000s. But by sticking Democrats with the green-eyeshade role, Republicans astutely deprive Democrats of pocketbook themes that might actually rally voters. And as a matter of economics, Stiglitz is right: too much deficit reduction is as bad for the economy as too little.

(p. 200):

In the United States, median-income workers in 2006 paid a much higher combined rate in payroll taxes, income taxes, and sales taxes than they did in 1966, even though total public outlay relative to GDP was almost identical. In the 1960s, corporate tax receipts produced 16.1 percent of all federal revenue. Though corporate profits are a higher fraction of GDP than ever, corporate tax revenues fell to 9.4 percent in the 1990s and around 7 percent of federal tax receipts today. The same pattern has occurred in nearly every OECD member country.

A related effect of globalization is a huge increase in the opportunities for semilegal tax avoidance as well as criminal tax evasion, both abetted by conservative governments that are happy to see corporations escape taxation one way or another. Arguably legal tax avoidance schemes have become so complex in recent years that national tax authorities mostly throw up their hands. Even mainstream corporate tax planning, using global accounting maneuvers, costs national treasuries several hundreds of billions of dollars each year. Meanwhile, the auditing resources of the IRS have been shifted from corporations and the complex tax avoidance partnerships used by the wealthy to investigations of the modest earned income tax credit available to the working poor.

A multinational corporation with operations in several countries can arrange its internal bookeeping to minimize taxes owed. Within limits, this tactic, known as transfer pricing, is legal. It is the reason that the tax counsels of large corporations can earn seven-figure salaries for saving their companies nine-and ten-figure tax bills.

(pp. 202-203):

In principle, it would not be difficult for the advanced countries to put tax havens out of business. The major trading nations would simply enact reciprocal national laws, requiring any bank, corporation, partnership, or individual doing business both in the treaty country and with a bank or corporation located in a tax haven to report to domestic tax authorities all financial transactions using the tax haven. Alternatively, the major nations could flatly prohibit commerce with countries that refused to sign tax enforcement treaties. What prevents governments from doing this is of course the political power of organized business.

(pp. 219-220):

Instead, American leaders beginning with Alexander Hamilton thought it was smarter for the nation to pursue advantage in industry as well as agriculture. So the United States industrialized behind high tariff walls. Not only did we have tariffs, but we used what today would be called an industrial policy. The railroads were given land grants equal to 8 percent of the surface area of the United States -- land that they could rent or sell to finance construction. It was a pure government subsidy of an emerging industry. Beginning in 1862, the government invested in public universities to promote the mechanical arts and in agricultural extension to foster technical advances in farming. World War II and the Cold War functioned as immense, if tacit, technology policies.

Every other emergent nation reached similar conclusions. Each practiced its own variations on economic nationalism, many with far more direct government involvement in the industrial economy than in the United States and far more nakedly protectionist policies. France and Germany, and later Japan, Korea, Brazil, India, and China, all developed their industries pursuing diverse forms of what economists today call strategic trade, or neomercantilism.

The appeal of acquiring industry is not hard to discern. Even if a nation has plenty of raw materials, extractive industries tend to be economically static. Many economists have commented on the paradox of mineral-rich nations being mired in poverty. In practice, mineral wealth is often exploited by foreign corporations, and of course the materials eventually run out. Even agriculture, though more technically dynamic, is less so than industry and is dependent on fluctuations of world commodity prices.

Manufacturing allows nations to begin with fairly simple production and move quickly up the ladder. There are multiple linkages among manufacturing, technology, education, workers' skills, high-productivity jobs, and national wealth. Though the theory of comparative advantage counsels that nations should maximize their well-being simply by importing such products from the most efficient current exporter, the leaders of most developing nations are more astute than the standard economic model. It makes sense to use government policies to capture leadership in dynamic sectors of the economy.

(pp. 227-228):

Though some East Asian nations became more marketlike in some respects, such as having somewhat open consumer economies, in their production systems they continued to use various forms of state assistance and state-guided development strategies combined with high domestic savings rates, and they became export powerhouses. With the United States as the only major nation whose government did not care where production was located, the American economy became the residual recipient for the exports of these rapidly growing economies. Our manufacturing economy suffered, and our trade deficit became permanent and structural. India's fast-growing economy, for example, sends about 65 percent of its exports to the United States and only 3 percent to Japan. With Japan having roughly half the GDP of the United States, its share of India's exports should be about ten times as large as it currently is.

(p. 229):

Because the United States' trade policy lacks a strategic focus, its response to foreign challenges has been episodic and inconsistent. The consequence is that vital industries and technologies developed in the United States are losing market share, leaving it with a structural trade imbalance. It is this reality of other nations' practicing strategic trade -- not the low U.S. domestic savings rate or the federal budget deficit -- that explains most of the wide and growing trade gap, which will soon top one trillion dollars. Even more significant than the size of the trade deficit is the percentage of imbalance. Our imports are fully 57 percent higher than our exports, and that ratio is growing. The U.S. trade imbalance increased by 17.5 percent in 2005 alone. In 2005, our negative trade balance with China was $201 billion. That imbalance was the result of $243 billion in imports and just $42 billion in exports. For Japan, the figures were $138 billion in imports and $55 billion in exports. As other nations capture advantage in technology-intensive products, we are increasingly importing the most advanced products and exporting raw materials, or we are exporting materials for assembly and reimport. Given the truculence with which the U.S. government advances its perceived national interest in military and geostrategic areas, it seems almost bizarre that we should be so weak when it comes to advancing our trade interests.

(p. 230):

According to an authoritative review by Owen Herrnstadt of the cost of offsets, between 1993 and 2005, U.S. companies reported 8,007 offset transactions in 45 countries. The monetary value of these transactions totaled $37.3 billion. Nearly all of this represented manufacturing production that could have been done in the United States, improving our trade balance, providing good jobs for U.S. workers, and keeping American industry at the forefront of production technology. Instead, because Washington places military goals ahead of economic ones, this economic activity went overseas. Boeing, for example, has a $4.4 billion contract to provide forty F-15 fighters to South Korea. The South Koreans (who enjoy a lopsided trade surplus with the United States) negotiated a deal to have most of the parts made locally, creating high-wage jobs that otherwise would have stayed in the United States, improving our manufacturing base and balance of trade. The Koreans are also allowed to supply parts for F-15s that Boeing sells elsewhere. Sometimes the negotiated offsets are far removed from the immediate sale. After Poland joined NATO, Lockheed won a contract to supply $3.8 billion worth of F-16s. According to The New York Times, the offsets from Lockheed and its industrial partners, which Lockheed pays, include subcontracts for Poles to make commercial jet trainers as well as parts for business aircraft like the Gulfstream and Piper for export to the United States and to make the Pratt & Whitney engine for the F-16. There is also a venture with Accenture for a new technology company in Lodz and a partnership with the University of Texas to start a technology accelerator at the University of Lodz.

(pp. 245-246):

Though it is little appreciated today, global fiance built on principles of managed capitalism did not occur without a political fight. As the Roosevelt and Truman administrations promoted public institutions such as the IMF, World Bank, and Marshall Plan, the financial conservatives of that era argued that private financial flows would be ample to restart normal international commerce and to rebuilt war-torn Europe and Japan. Conservatives had made the same argument after World War I, with catastrophic results. They had added war reparations to the burden of Germany's economic recovery and created no transnational public institutions to temper the speculative, destabilizing, and ultimately deflationary influence of private capital flows. Their legacy was the Great Depression.

The difference between the 1920s, the 1940s, and our own era has nothing to do with economic fundamentals, which are unchanging. The main difference is in who had the political power to make these decisions. Of these three economic period, only in the 1940s did sponsors of managed capitalism prevail.

(p. 254):

Likewise, in the summer of 2006, oil prices soared. Hedge funds had become nervous about the Middle East summer gasoline demand slightly exceeded projections, and supply was tight. These speculative forces bid up the price of crude oil to unsustainable levels. As autumn came, and with it a supply glut, prices at the pump tumbled by more than a dollar. Political cynics imagined the Bush family calling their Saudi friends to increase supply or Dick Cheney getting on the phone to oil executives, asking them to lower retail prices in anticipation of the election. That may even have happened, but it didn't need to. The extreme swings in retail gas prices reflect how speculative hedge funds needlessly exaggerated economic, seasonal, and geopolitical factors.

(p. 259):

In recent years, the IMF has pulled back from its recipe of enforced austerity and mandatory financial market opening. Nothing fails like failure. After the East Asian collapse, many governments vowed never again to work with the IMF. The correlation between the developing nations that have followed the IMF recipe and those that have prospered is nearly a perfect refutation of the IMF's view of how economies work. In this decade, there has been a quiet financial revolution in South America, as Argentina and Brazil have paid off the last of their debts to the IMF, and most Latin American countries have just stopped doing business with the Fund, whose outstanding loans are now just a fraction of their peak.

(p. 260):

The net debt owed by the United States to foreigners rose to about $2.7 trillion in 2005, an increase of $333 billion over the previous year. In fact, the current account (mostly trade) deficit is much higher than that increase in the debt -- in 2005 it was $792 billion. The reason our total debt to foreigners did not increase by that full amount is that Americans also make investments overseas. Even with such investments, however, our net foreign indebtedness has been rising at a very rapid rate. Foreigners now hold almost 60 percent of all outstanding Treasury securities, up from 20 percent in the mid-1990s.

The excessive dependence of the U.S> economy on foreign borrowing increases the risk of a domestic depression and even a global one. The problem is not the national debt but the reliance on foreign creditors. The foreign debt, in turn, reflects the structural trade deficit. We have been borrowing our prosperity for better than two decades, and the ratio of foreign borrowing to GDP is growing. The longer an adjustment is deferred, the more serious will be the collapse.

(pp. 261-262):

A real decline in American living standards has already been baked into the national cake. It has simply been disguised, for now, by the borrowing from abroad, which must eventually be paid -- in ever-higher interest payments, the sell-off of U.S. assets that generate income, or an eventual dollar crash. About half of our foreign debt is held by foreign governments. However, the central banks of allied nations cannot keep this game going indefinitely, much as they might wish to help, because the other half of America's international creditors are still private. [ . . . ]

Eventually, a country that runs a chronic trade deficit must suffer a decline in the value of its currency. Most economists calculate that it would take a devaluation in the range of 30 percent to put America's trade deficit on a downward path. Some contend that a decline of 30 percent of the value of the dollar would not be bad. Imports would become more expensive, but that would be good for both domestic production and exports. Since virtually all of our foreign debt is denominated in dollars, a cheaper dollar would mean a write-off of that much debt. Paul Volcker points out that the dollar went through a period of overvaluation in the 1980s and declined by about 25 percent against major foreign currencies, and nothing terrible happened. However, that occurred during a period when the dollar was artificially high because of Volcker's own policies of very high interest rates and there was no overhang of foreign debt. As the Fed relented and allowed interest rates to come down, it was natural that the dollar should depreciate. Today, by contrast, dollar interest rates are low. The only reason the dollar is holding its value is that foreign central banks want it that way and manipulate their own currencies accordingly.

E.g., the dollar has declined well over 30% against the Euro and the UK Pound, but remains pegged to the Chinese Yuan, so the dollar has not gained any trade advantage against one of America's largest trading partners.

(p. 278):

Kerry, in 2004, wanted to show the Democratic base that he was on their side economically. But he also wished not to offend the economic elites. So the best he could manage was to call for arcane changes in the tax code, so that the tax system would not reward "Benedict Arnold CEOs" for moving jobs offshore. This pol-tested slogan sounded good, but few knew exactly what Kerry meant. The slogan did not bespeak any serious understanding of the trade problem or any commitment to fundamental change, nor did Kerry. Tax favoritism for offshoring jobs is perhaps a third-tier cause of job loss, if that. Nor did the slogan, in the end, resonate with voters. It was more weak tea.

(p. 280):

The politics of permanent deficits and the shift of taxes onto ordinary working people at a time of pocketbook distress has done just what Republicans hoped. It has largely depoliticized economic hardship. It has made voters resistant to any kind of taxation -- and Democrats averse to proposing even progressive tax reforms that would raise taxes only at the top and cut net taxes for most people. In the Bush era, Republicans who sponsored politics and programs opposed by substantial majorities of Americans invariably fell back on two trumps: "Democrats Won't Keep You Safe" and "Democrats Will Raise Your Taxes." Strip government of resources, put cronies in charge who are incompetent at running it, and people will stop seeing government as their ally. Even Democrats will think twice about defending government.

(pp. 294-295):

"To seniors in this country," Bush earnestly declared, "you earned your benefits, you made your plans, and President George W. Bush will keep the promise of Social Security -- no changes, no reductions, no way."

"Medicare," he added, "does more than meet the needs of our elderly; it reflects the values of our society. We will set it on firm financial ground, and make prescription drugs available and affordable for every senior who needs them."

In the third presidential debate, Bush told Gore, "You know I support a national patients' bill of rights, Mr. Vice President. And I want all people covered." He called for grants to the states "so that seniors -- poor seniors -- don't have to choose between food and medicine."

Bush pledged to change the tone in Washington, to govern as a bipartisan the way he had done as governor of Texas. "I know it's going to require a different kind of leader to go to Washington and say to both Republicans and Democrats, 'Let's come together,'" he said.

Bush repeatedly promised to balance the budget and insisted that the nation could afford a tax cut without slipping into deficit. He even criticized a House Republican plan to achieve budget savings by cutting the Earned Income Tax Credit. "I don't think they ought to balance their budget on the backs of the poor," he said.

All these declarations were, of course, lies. While all recent presidents have periodically gone back on promises and some have told explicit untruths, what's interesting is that the multiple untruths told by this president are something very rare in politics: ideological lies.

Hypocrisy, as La Rochefoucauld observed, is the homage that vice pays to virtue. In the case of Bush, campaign lies were the homage that Republican sloganeering paid to the popularity of progressive Democratic ideology.

Imagine instead that Bush had hit the campaign trail promoting a Social Security shift that would increase the system's deficits, requiring cuts in benefits and an increase in the retirement age; that he promised a tax cut that cost more than twice Social Security's long-term shortfall. Imagine that his patients' rights bill was advertised as authored by the HMO industry -- and as prohibiting patients denied care from suing their insurer; that he touted a Medicare drug plan written by the drug and insurance industries that left a $2,250 "doughnut hole" in annual coverage; that his environmental policy would scrap one protection after another and let industry rewrite the rules; that he pledged to demonize Democrats who resisted his policies; that his No Child Left Behind program pledged to freeze funding for Head Start and money for child care -- and to go back on a bipartisan deal to increase federal funds for poor public schools in exchange for high-stakes testing.

Campaigning on that set of views, Bush would have been the minority candidate of a minority party. There would have been no cliff-hanger in Florida and no narrow Supreme Court resolution of Bush v. Gore, Yet that set of views has been his actual program. And his need to prevaricate suggests the popularity of progressive economic themes.

Greg Anrig: The Conservatives Have No Clothes: Why Right-Wing Ideas Keep Failing (2007, Wiley)

Anrig works for Twentieth Century Fund, a left-ish think tank. I don't think he gets very deep into why conservative ideas so bad in practice, but he provides a lot of examples. I believe that conservatives have a significantly wrong view of human nature -- they don't much like it, and believe it has to be controlled with threats of coercion managed by an elite who, quel surprise, are the conservatives. They also misunderstand the economy, thinking it's about money when it's really about labor. They also take a very cynical view of politics, mostly because deep down the understand that they deserve to be in the minority, so can only seize power through chicanery and confusion. That cynicism breeds all sorts of bad faith: lying, cheating, schemes to divide their opponents into warring camps, etc. These are deeper level problems with most of the things that Anrig lists.

---

(pp. 8-9):

The sponsors of the right-wing ideas industry simply wanted to roll back government, through any means necessary. In contrast to the intellectuals who reveled in the conservative canon, the central financiers of the modern conservative movement were successful men of action with enormous wealth, in most cases built on inherited assets. Most of them harbored a barely contained sense of fury over their own personal encounters with the government -- especially despising taxes and regulation. Not coincidentally, the Coors, Bradley, and Koch families all had roots extending to the John Birch Society, the secretive organization founded in the late 1950s that suspected that communists were taking over the U.S. government, among other conspiracies. Scaife believed that Clinton aide Vince Foster's death was "the Rosetta stone" that would explain what he believed to be untold conspiracies related to the president he abhorred. The leading funders of movement conservatism didn't think twice about what the consequences for the public -- intended or unintended -- might be of getting rid of this or that program or regulation or tax or policy. Just do whatever it takes to get on the offensive, attack, and beat back the government. Those were the kinds of results they wanted.

(p. 12-13):

Because the ultimate goal of movement conservatives is to roll back the government, the answer to domestic problems as they have defined them almost invariably entails the simple panacea of substituting the private sector for the public sector. Just turn everything over to markets, and let the collective wisdom of consumers, free enterprise, competitive pressures, and Adam Smith's "invisible hand" fix everything. Yet most existing government domestic programs came about in the first place because of what economists call "market failures." Experience over more than a century, consistent with economic theory, demonstrated that competitive firms acting to maximize profits in the absence of rules will impose harms on the broader public -- harms that voters through the democratic process insisted be curtailed. So the government created laws, regulations, and enforcement systems to help ensure that the food supply would be untainted, that drugs and medical devices would be safe and effective, that price-gouging monopolies be broken up, that securities markets be fair, that transportation systems be safe, that the environment be protected, that racial discrimination be outlawed, that fraudulent sales practices be criminalized, that workplaces be safe, and so on. It also created economic protections such as Social Security, Medicare, Medicaid, unemployment insurance, and food stamps to cushion economic blows for citizens who fared poorly in the rough and tumble of the marketplace, and for older and disabled Americans out of the workforce.

(pp. 34-35):

The politicization of FEMA did, however, generate a certain sort of productivity when four successive hurricanes slammed the pivotal election state of Florida during the 2004 presidential campaign season. An investigation of the South Florida Sun-Sentinel found that concerns about the damage the storms could do to the president at the ballot box prompted FEMA to dole out disaster relief checks with unprecedented generosity. The paper reported that two weeks after a FEMA consultant raised alarms that the second of the hurricanes was creating a "huge mess" that could reflect poorly on Bush, a Florida official wrote that FEMA was handing out housing assistance "to everyone who needs it without asking for much information of any kind." Subsequent investigations by the DHS's inspector general and the Senate Committee on Homeland Security and Governmental Affairs confirmed the Sun-Sentinel reports, finding that FEMA paid more than $31 million to thousands of Florida residents who were unaffected by the hurricanes. As Senator Susan Collins (R-Maine) descried it at a contentious May 2005 hearing at which Brown parried heated questions, "FEMA approved massive payouts to replace thousands of televisions, air conditioners, beds and other furniture, as well as a number of cars, without receipts, or proof of ownership or damage, and based solely on verbal statements from the residents, sometimes made in fleeting encounters at fast-food restaurants."

(p. 35):

The conservative movement produces leaders who are committed to Ronald Reagan's core belief that government is the problem, not the solution. The right also insists that after political victories, as many like-minded leaders as possible should be planted throughout the government to "exert control" over civil servants, who typically have much more experience and knowledge about public activities such as responding to emergencies. Allbaugh and Brown were exactly the kinds of leaders the conservative movement promised the public that it would bring to the executive branch: advocates of "limited" government; suspicious of career bureaucrats; believers in outsourcing, downsizing, and devolution; recruiters tot he government hierarchy of more ideologues just like them. People who describe Allbaugh and Brown as simply incompetent or unqualified misunderstand why conservative government is failing. They did precisely what the right said its leaders would do.

(p. 47):

Established in 1982 by a group of conservative lawyers and law students at the University of Chicago, Yale, and Harvard, the Federalist Society was initially conceptualized as a networking organization on campuses opposed to what was perceived to be liberal orthodoxy taught at law schools. The idea was to identify and feed promising young conservative attorneys into clerkships and positions in the Reagan administration, while winning over and indoctrinating law students who would be exposed to the insights of leading conservative legal figures. Early founders and supporters of the society included such icons of the right as Edwin Meese, Irving Kristol, William Rehnquist, Antonin Scalia, and Robert Bork. Over the years, money supporting the Federalist Society has flowed from the always generous Scaife, Olin, Bradley, and Earhart foundations. It has grown to include lawyers' chapters in about sixty cities and student chapters on almost all of the nation's accredited law school campuses.

(pp. 92-93):

As it turned out, the 1993 budget bill was the catalyst setting in motion a virtuous sequence of economic changes that produced an extended period of strong, broadly shared prosperity for the first time in more than two decades. Because Americans across the income spectrum earned higher incomes than anyone had predicted, more tax revenue flowed to the government -- substantially reducing budget deficits. But the end of the 1990s, the federal budget was running large and growing surpluses that enabled the government to pay down some of the national debt that had built up over the preceding decades.

The unemployment rate, which reached a decade high of 7.8 percent in June 1992, fell steadily to 4.1 percent by the end of the 1990s -- the lowest level since the late 1960s. The inflation rate defied economic theory and declined in tandem with unemployment, dropping from a peak of 6.3 percent in October and November 1990 to 2.7 percent by December 1999. Over the second half of the decade, the annual productivity growth rate -- which had languished near 1.4 percent for more than twenty years -- averaged about 2.5 percent. In the five booming years from 1995 to 2000, the U.S. economy grew faster (more than 4 percent annually), maintained a lower unemployment rate, and generated less inflation than in the whole of the 1970s or the 1980s. Even workers at the low end of the income ladder received wage increases above the inflation rate for the first time in decades, though rising inequality continued because the highest earners (the ones who bore the brunt of the Clinton tax increase) did even better. A federal budget deficit of 4.7 percent of gross domestic product (GDP) in 1992, projected at the time to rise to 5.5 percent of GDP by 2000, transformed into an actual surplus of 2.4 percent of GDP by the end of the decade -- un unprecedented swing of 7.9 percentage points.

I suspect that if you look closer several of those number will lose some of their lustre. In the mid-1990s the government changed the way it calculates inflation, reducing the results in numerous ways -- the main purpose was to reduce cost-of-living increases to Social Security beneficiaries. Depressing the inflation rate has the side effect of making real wages (wages adjusted for inflation) look better. Unemployment figures are also affected by reductions in unemployment compensation. Welfare reform also worked to improve the numbers, although that was largely the good fortune to do the reform during a period of strong economic growth. The growth itself was largely driven by a huge one-time expansion of the computer and telecommunications sectors, primarily due to the World Wide Web. Fiscal policies, as well as Clinton's decision to shelter internet sales from state and local sales taxes, helped. But a fair chunk of that growth turned out to be a bubble which burst following the fizzle of the Y2K pseudo-crisis. The bubble was duly embraced as real by Clinton and others looking for good news. My view is that it was mostly driven by the longer term (at least since 1970) trend concentrating of wealth, which has generally worked to inflate the value of assets. The surplus proved chimerical, not least because it was achieved by sleight-of-hand in the first place: the last piece was achieved by cutting capital gains taxes, which on top of the stock market bubble led to a one-time asset sell-off. This got Clinton his momentary surplus, but by lowering taxes made it harder to sustain surpluses. Bush's tax cuts were all the worse because they claimed to redistribute a surplus that didn't really exist in the first place.

Still, one thing that Clinton's fiscal policies do clearly prove is that it is possible to raise marginal income taxes without doing any significant damage to the economy. That in itself undermines a huge chunk of Republican ideology.

(p. 99):

Countercyclical Keynesian tax cuts, which first took hold as a strategy to jump-start the economy during the Kennedy administration, are supposed to work by giving people more money to spend. But to the extent the Keynesian approach retains any theoretical credibility based on its checkered history -- more often than not ending up in the hands of taxpayers well after the downturn as already ended -- it needs to be implemented during a period of prolonged stagnation after it has become clear that lower interest rates and subdued inflation haven't self-corrected the economy. Still, Bush left his tax-cut proposal essentially intact while insisting that it would lead to a quick economic turnaround. The Washington Post columnist Sebastian Mallaby, a moderate, wrote in February, "This weird revival of Keynesianism says a lot about the rickety intellectual basis for a large tax cut."

(p. 100):

Even as the rebate checks were flowing through the mail in August 2001, President bush interpreted the near-complete evaporation of the $4 trillion to $5 trillion in previously projected surpluses during his eight short months in office as "incredibly positive news." Why? Because it would put Congress in a "fiscal straitjacket." With that remark, the president endorsed what has become the dominant conservative rationale for tax cuts in the wake of the failures of supply-side economics to live up to its theoretical promise during the Reagan administration. The argument is known as "starving the beast," a phrase widely attributed to the former Reagan budget director David Stockman. As Grover Norquist, a modern-day kingpin of the conservative movement, explained it to U.S. News and World Report: "The goal is reducing the size and scope of government by draining its lifeblood."

(p. 111):

To convey how the modern conservative movement is responsible for corrupting the concept of "fiscal conservatism" to the point that it has become an oxymoron, a little history is useful. In the three decades preceding the Reagan administration, revenues as a share of national income were roughly stationary while expenditures rose only modestly. Each president, from Truman to Eisenhower to Kennedy to Johnson to Nixon to Ford to Carter, handed a lighter or comparable debt as a share of the economy to his successor. But during every single year of the presidencies of Reagan, George H. W. Bush, and George W. Bush, the national debt rose relative to the size of the economy. Combined, the debt-to-GDP ratio climbed by nearly 40 percentage points on their watch, while it fell by 6 points during the Clinton administration. It's a record of irresponsibility and failure that speaks for itself.

TABOR stands for TAxpayer Bill Of Rights, a law that was originally passed in Colorado and touted as a model for other states -- there's a crowd that's been pushing it in Kansas for years, but it always gets beat back by pointing to how much damage it has caused in Colorado (pp. 131-132):

One of the remarkable aspects of the conservative movement's success has been its effectiveness at imposing a blur of confusion when it identifies a threat to its agenda created by readily discernible objective reality. Studies with misleading if not outright bogus claims are cranked out whenever facts emerge that contradict their belief system. Journalists compelled by the mores of their profession to present both sides of issues usually quite with equal weight the "experts" of the right situated in their well-financed "policy institutes" alongside others who actually understand public policy and believe in effective government. It took thirteen years for a majority of the voters of Colorado to discern through that fog that TABOR really was causing serious harm to their state. But because the stakes for the right are so high nationwide in perpetuating the myth that TABOR is working in Colorado, the passage of Referendum C is just another inconvenient development to be processed through the movement's well-oiled spin machine.

(pp. 146-147):

Tabulating the benefits of any given regulation is a far squishier enterprise. By their very nature, regulations are intended to prevent harms that don't have a price tag on them. But cost-benefit analysis doesn't take you very far unless you can compare dollars to dollars. So, for one thing, a human life is assigned with a value so that the benefit of saving one can be computed. The number chosen matters a lot. For example, in the Environmental Protection Agency's analysis of the proposed rules for the Clear Skies initiative, it originally valued a life at $6 million, based on studies of wages for high-risk jobs and surveys asking people what they think a life is worth. In 2003, Graham's OIRA asked the EPA to slash that figure to $3.7 million -- based on surveys alone -- and reduce it by another 27 percent for people over seventy, based on a twenty-year-old British survey that found that older people valued their lives less than younger people did.

(pp. 175-176):

Theories about the virtues of testing linked to some kind of accountability system, whether for students who are denied degrees because they scored low or for schools that face the stigma of being labeled as failing, rest on the presumption that threats provide effective incentives to perform better. No one disputes that setting clear standards and administering exams help to clarify what is expected of students and provide useful information about whether they have lived up to those aspirations. Traditionally, teachers have used test performance to help determine if students need more help in a particular area or if the teachers themselves need to do a better job of communicating material that doesn't seem to be getting through. But it very much remains an open question whether sanctions of one sort or another do anything to improve the educational process.

(p. 180):

NCLB[No Child Left Behind]'s shortcomings also share some of the flaws of Colorado's TABOR amendment. In both cases, the ideologically driven reliance on rigid requirements to produce the desired results assumes that saying it shall be so, will make it so. In the real world, as must parents who have tried that strategy with their children will recognize, strict dictators, in and of themselves, rarely work and often backfire. Like TABOR, NCLB isn't so much about faith in markets as it is a mindset that government workers on their own have little incentive to perform effectively. As it turns out, predictably, ordering them to produce the desired result doesn't do much to lead to that outcome, at least not without producing unhappy consequences. If legislators in Colorado could have magically cut nothing but purported "waste, fraud, and abuse," and public school teachers could heroically improve student performance, democracy already provided plenty of incentives to produce those outcomes. All that inflexible strictures to on their own is create new problems while exacerbating the impression that government is failing -- when it's really the conservative movement's ideas that are failing.

(p. 191):

In the same Economics 101 class where students learn that higher prices reduce demand, they are also told that Adam Smith's "invisible hand" works magic only when a number of conditions are met -- one of which is that consumer must have "perfect information" enabling them to make choices that will satisfy their desires. In health care, the information available tot he public couldn't be much more imperfect. Nonetheless, the conservative movement insists that a higher dose of the market in the form of increased out-of-pocket costs won't harm public health. It's a testament to how successful the right has been in selling its belief system that such a threadbare claim so deeply disconnected from consistently observed real-world experience -- not to mention economic theory -- has become such a dominant force in the debate over health-care reform.

(pp. 209-210):

But proposals to partially privatize Social Security -- all of them, regardless of the particulars -- are less than half baked. That is, the changes that privatization plans would set in motion would directly and inevitably undercut the purported goals of the legislation. All privatization proposals inherently weaken, rather than strengthen, Social Security, the federal budget, and the retirement security of Americans. Those fundamental flaws are matters of mathematics -- rather simple mathematics at that. Dismantling Social Security -- not "saving" or strengthening it -- is precisely the reason why conservatives support privatization. It's the reason why the libertarian Cato Institute has for more than two decades spent untold resources trying to spread fear about the existing system and imparting egregiously misleading claims about private accounts. To pass the political laugh test, privatization proponents have to try to fool people into thinking that somehow their plan will bolster Social Security and the retirement prospects for tomorrow's elderly. but as long as the laws of subtraction and multiplication remain sound, their proposals would inherently do the opposite. That's why Social Security privatization -- far and away the conservative movement's highest domestic aspiration -- was a political failure in 2005 and would inevitably be a policy failure if, save us, it ever became law in the future.

(pp. 216-217):

President Ronald Reagan, who had expressed hostility toward Social Security as "a sure loser" from the 1950s onward, initially assigned David Stockman, the director of the Office of Management and Budget, with the task of responding to the problem. Stockman deeply shared the contempt of his boss for big government and saw an opportunity in the looming shortfall, crafting a package of benefit cuts. Eligibility rules for collecting disability benefits would be tightened. A new cap would be placed on the total Social Security benefits in certain categories that a single family could receive. Payments to particular kinds of dependents would be eliminated. And, most important, benefits to workers who retire before age sixty-five would be reduced by about a third. Under Stockman's plan, assembled with only a handful of others, the penalty for leaving the workforce between the ages of sixty-two and sixty-five would be boosted from 20 percent of the normal Social Security benefit to 45 percent. The changes would take effect almost immediately after enactment, meaning that workers approaching retirement suddenly would discover that they would receive substantially less than they had been expecting. In his book The Triumph of Politics, Stockman describes with a curious sense of pride how he conveyed the proposals to the president in a background paper written in "perfectly incomprehensible Social Security Administration format and jargon which obscured almost everything." The cover memo "explained almost nothing." When Stockman presented the plan directly to Reagan, who was still recuperating from John W. Hinckley Jr.'s assassination attempt just a few weeks earlier, "Only 60 minutes had been allotted for that meeting on May 11 with the president -- not much time to review a plan which in both philosophy and detail reversed 45 years of Social Security history."

Reagan signed off, word got out, and the country went nuts. A little more than a week after the May 11 meeting, the Republican-led Senate voted 96 to 0 for a resolution rejecting Stockman's Social Security cuts. The political debacle sent Reagan's poll ratings into a tailspin and, in the words of the Reagan biographer Lou Cannon, ended "any major assault against the basic premises of the federal budget."

(p. 219):

Twenty-two years after Reagan signed those [Social Security] adjustments into law, without any significant intervening legislation, the Trustees' forecasts showing that the next shortfall isn't due until 2041 demonstrated just how effective the 1983 reforms had been. Nonetheless, at one point Bush even went to the Bureau of the Public Debt in West Virginia as a photo-op before a speech in which he said, "A lot of people in America think there is a trust -- that we take your money in payroll taxes and then we hold it for you and then when you retire, we give it back to you. But that's not the way it works. There is no 'trust fund' -- just IOUs that I saw first hand." In other words, Reagan's "ironclad commitment" was a ruse pulled on the American people. Tarnishing the reputation of the conservative movement's foremost icon is a small price to pay for the right's ultimate prize of tearing down the government's biggest, most successful program.

(pp. 230-231):

It was movement conservatism's approach to public management that caused FEMA to revert from a model agency to a turkey farm, producing the inept response to Hurricane Katrina that appalled all Americans. Movement conservatism gave us the unitary executive doctrine, which, in its disparagement of historical precedent and consensus constitutional scholarship, contributed mightily to the horrors of Abu Ghraib and elsewhere -- undermining America's long-standing moral authority while exacerbating the risk of future terrorism against us. The conservative movement's advocacy of "benevolent hegemony" offered a philosophical justification for invading Iraq even in the absence of indisputable evidence that it was building and stockpiling weapons of mass destruction. Conservatism falsely promised, again, that large tax cuts for the rich would produce broadly shared economic benefits without leading to large federal deficits. A conservative idea for constraining state taxes and spending caused public services to deteriorate dramatically in Colorado -- an outcome that hasn't stopped the movement from peddling the same idea in other states. Conservative regulatory policy has significantly curtailed the enforcement of laws intended to protect public health and the environment, with harmful consequences. Conservative school reforms, which have shown little sign of working, have sidetracked efforts to pursue other ideas that have demonstrated success. The conservative remedies for what ails the health-care system, which don't even broach the huge problem of uninsured and underinsured Americans, are more than anything a diversion intended to stave off universal coverage. And, finally, conservatism continues to advocate killing Social Security to save it.

The right's ideas, one after another, have failed. Often they have failed in vivid ways that a large swatch of the public reacts viscerally against -- the debacles of FEMA, Iraq, Abu Ghraib, and Social Security privatization. The core reason why conservatism is failing is also easy to explain. The job of elected officials is to govern. But the modern conservative movement, which flourished from the seeds of deep hostility toward government, produced ideas implicitly designed to weaken the public sector. The right paid lip service to goals like fiscal responsibility, better schools, health care, retirement security, and so on, but that rhetoric's purpose was mainly to generate political support for actions that would have the effect of rolling back government -- the movement's overriding priority. You have to actually believe that government can work to make it work effectively.

Jonathan Chait: The Big Con: The True Story of How Washington Got Hoodwinked and Hijacked by Crackpot Economics (2007, Houghton Mifflin)

---

Charlatans and Cranks (pp. 13-15):

For many, many years, Republican economics was relentlessly sober. Republicans concerned themselves with such ills as deficits, inflation, and excessive spending. They did not care very much about cutting taxes, and (as in the case of such GOP presidents as Herbert Hoover and Gerald Ford) they were quite willing to raise taxes in order to balance the budget. By temperament, such men were cautious rather than utopian. Over the last three decades, however, such Republicans have passed almost completely from the scene, at least in Washington, to be replaced by, essentially, a cult.

All sects have their founding myths, many of them involving circumstances quite mundane. The cult in question generally traces its political origins to a meeting in Washington in late 1974 between Arthur Laffer, an economic consultant, Jude Wanniski, an editorial page writer for the Wall Street Journal, and Dick Cheney, then chief of staff to President Ford. Wanniski, an eccentric and highly excitable man, had until the previous few years no training in economics whatsoever, but he had taken Laffer's tutelage. His choice of mentor was certainly unconventional. Laffer had been an economics professor at the University of Chicago since 1967. In 1970 his mentor, George Schultz, brought him to Washington to serve as a staffer in the Office of Management and Budget. Laffer quickly suffered a bout with infamy when he made a wildly unconventional calculation about the size of the 1971 Gross Domestic Product. President Nixon seized on Laffer's number, which was far more optimistic than estimates elsewhere, because it conveniently suggested an economic boom under his watch. When it was discovered that Laffer had used just four variables to arrive at his figure -- most economists used hundreds if not thousands of inputs -- he became a Washington laughingstock. [ . . . ]

Starting in 1972, Wanniski came to believe that Laffer had developed a blinding new insight that turned established economic wisdom on its head. Wanniski and Laffer believed it was possible to simultaneously expand the economy and tamp down inflation by cutting taxes, especially the high tax rates faced by upper-income earners. [ . . . ]

That fateful night, Wanniski and Laffer were laboring with little success to explain the new theory to Cheney. Laffer pulled out a cocktail napkin and drew a parabola-shaped curve on it. The premise of the curve was simple. If the government sets a tax rate of zero, it will receive no revenue. And if the government sets a tax rate of 100 percent, the government will also receive zero tax revenue, since nobody will have any reason to earn any income. Between these two points -- zero taxes and zero revenue, 100 percent taxes and zero revenue -- Laffer's curve drew an arc. The arc suggested that at higher levels of taxation, reducing the tax rate would produce more revenue for the government.

There are several obvious problems with this explanation. For one thing, there's no reason to suppose that any of the principals were even remotely concerned with maximizing government's tax cut of the economy. Conservatives are more likely to argue the opposite: that taxes should be minimized (e.g., to "starve the beast"). So it's unlikely that the Laffer Curve was ever anything more than tax cut camouflage. There's also the question of how much more growth is generated by not taxing the rich than would result from the government spending the foregone tax. I can think of several reasons why that might not even be positive, let alone large enough to recoup the tax loss.

(p. 22):

So if supply-side economics did not come out of the economics profession, where did it originate? It emerged from the writings and discussions of Laffer, Wanniski, and the late Wall Street Journal editorial page editor Robert Bartley. Those three did not do the kinds of things that real economists do, such as write academic papers or submit their findings to peer review. Instead they wrote editorials and columns or sometimes longer articles for magazines like Irving Kristol's The Public Interest. Now, I'm a journalist myself, and obviously I see nothing wrong with journalists writing about economic policy. But Wanniski, Bartley, and their crowd were not merely commenting on economic policy; they were claiming to have disproven the collective wisdom of the economics establishment.

Enter George Gilder and his book Wealth and Poverty (p. 24):

Gilder articulated the new philosophy of the Reagan era in admirably straightforward fashion. "To help the poor and middle classes," he wrote, "one must cut the taxes of the rich." In reflecting the new prestige Republicans wished to see afforded the rich, Gilder defended capitalists as not merely necessary or even heroic but altruistic. "Like gifts, capitalist investments are made without a predetermined return," he wrote. In fact, while capitalists may not be sure of their exact return, they do expect to make more than they put in, which makes an investment unlike a gift in a fairly crucial way. Yet there was enough of an audience for such sentiments that Gilder's book sold more than a million copies. President Reagan handed the book to friends, and advisers such as David Stockman hailed its "Promethean" insight. "Wealth and Poverty," reported the New York Times, "has been embraced by Washington with a warmth not seen since the Kennedys adopted John Kenneth Galbraith.

Wanniski wrote his own influential book, How the World Works (pp. 28-29):

Five years before he wrote his book, Wanniski knew nothing about economics. Within a few years he had formulated a new creed and sold it to a series of powerful opinion leaders and politicians. By 1977, the Republican National Committee formally called for an across-the-board tax cut modeled on the one proposed by Wanniski's closest disciple, Jack Kemp. The next year, Congress enacted a capital gains tax cut that he lobbied for in the halls of the Capitol and championed in the Journal's columns. Two years after the publication of his book, Wanniski found himself advising Ronald Reagan, who ran for president on ideas Wanniski had developed.

A good deal more on Wanniski here, including a spat with Reagan: "Wanniski gave an interview in 1980 about the battle for Reagan's mind among his advisers, all but openly saying that the candidate was a creature of his staff. This brought about a quick expulsion from the inner circle." Also his relationship with Steve Forbes and Bob Dole (after Dole picked Jack Kemp as his 1996 running mate). Also his praise for Louis Farrakhan, Lyndon LaRouche, Slobodan Milosevic (whom he likened to Abraham Lincoln), and Saddam Hussein ("There is no possibility that Saddam gassed his own people"). Also his argument that Hitler invaded Poland because he failed to understand the need to lower taxes.

Chait provides four reasons for the ascendancy of the supply side theories: cracks in the Keynesian consensus due to new problems like "stagflation"; political opportunism ("The Laffer Curve held out the possibility of handing tax cuts to the voters without fretting about the resulting deficits. The GOP would be transformed into the party of Santa Claus, with Democrats, if they stood in the way, stuck playing the Grinchy"); favoritism to the rich ("The lesson for cranks everywhere is that your theory stands a stronger chance of success if it directly benefits a rich and powerful bloc, and there's no bloc richer and more powerful than the rich and powerful"); and widespread ignorance of economics (p. 32):

Irving Kristol, the conservative intellectual who arranged funding for a number of supply-side tracts, including The Way the World Works, has been remarkably candid on this point at least in retrospect. Kristol recalled that when Wanniski tried to convert him to supply-side economics, "I was not certain of its economic merits but quickly saw its political possibilities." And in 1995 Kristol breezily confessed in an article: "The task, as I saw it, was to create a new majority, which evidently would mean a conservative majority, which came to mean, in turn, a Republican majority, so political effectiveness was the priority, not the accounting deficiencies of government."

Then in 1993 Clinton tried raising tax rates, especially for the critical highest bracket (pp. 36-37):

The supply-siders were absolutely certain Clinton's plan would fail. According to their view of the world, deficits matter very little. Raising tax rates would discourage work and investment, causing economic growth to shrink, and ultimately causing tax revenues to wither. The most respectable iteration of this view came from Martin Feldstein, a conservative Harvard economist. Feldstein is a legitimate academic who accepts the tenets of mainstream economics, but he is close to the supply-siders in that he has an unusually high estimation of the effects of tax rates on the rich. This viewpoint has made him an influential conduit to Republican politicians: Bush's top two economic advisers, Lawrence Lindsey and Glenn Hubbard, were both Feldstein protégés. And Feldstein's Harvard credentials gave his opinions a resonance that extends beyond GOP circles. Therefore, when he repeatedly wrote things such as "there is no possibility that the Clinton plan will produce the deficit reduction that it projects" and that the plan "reflects a fundamentally incorrect view of how taxes affect individual behavior," his view was not dismissed as voodoo economics.

In fact, compared to many conservatives, Feldstein was an optimist. A paper by the conservative Heritage Foundation concluded: "Higher taxes will shrink the tax base and reduce tax revenues." The GOP House whip Newt Gingrich, giving voice to the conservative consensus, predicted that the "three hundred billion in new taxes is going to shrink the economy, put people out of work, lower tax revenues."

It is worth recalling some of the conservative rhetoric of the time to see just how vehemently the supply-siders believed this. The Wall Street Journal ran a series of editorials denouncing the tax hike under the headline "The Class Warfare Economy," complete with a graphic of a guillotine. Bartley warned ominously that the tax hike would "cripple" the economy. Lawrence Kudlow, one of the high priests of the supply-side temple, confidently asserted: "There is no question that President Clinton's across-the-board tax increases . . . will throw a wet blanket over the recovery and depress the economy's long-run potential to grow." Indeed, by the time Clinton's plan passed the House of Representatives, the Journal's editorial page stated that the recession had already begun: "We are seeing," the editors opined, "the early signs of the stagflation that we knew so well during the Carter presidency."

Next paragraph goes on to talk about "wealthy citizens who, fearing Clinton's tax policies, decided to flee the country altogether." The result: "The stock market boomed, and the economy enjoyed its longest expansion in U.S. history. Revenues soared higher than the cheeriest optimists could have predicted. Not only was the deficit cut in half, in keeping with Clinton's goal, but it disappeared altogether, to be replaced by a surplus."

Chait moves on to the history of lobbying (p. 50):

As John Judis notes in The Paradox of American Democracy, businessmen saw themselves as responsible for the good of the country as a whole, not just their immediate bottom line. It seems not to have occurred to corporate America to enter the political arena to fight for a bigger piece of the pie. In 1961, just fifty corporations retained Washington lobbyists; these were mainly firms that sold products directly to the federal government. Business went about its business and did not see the need to dominate Washington.

(p. 52):

In a 1971 memo to the Chamber of Commerce, the corporate lawyer and future Supreme Court justice Lewis Powell urged business to fund a massive offensive against the left. "The painfully sad truth," he wrote, "is that business . . . often have responded -- if at all -- by appeasement, ineptitude and ignoring the problem . . . The time has come -- indeed, it is long overdue -- for the wisdom, ingenuity and resources of American business to be marshalled [sic] against those who would destroy it." Corporations had grown accustomed to seeing themselves as guardians of the broader national interest, not ideological combatants seeking to maximize their own share. Traditionally they had directed their public involvement toward institutions like the Committee for Economic Development or the Brookings Institution, which steered a center course between capital and labor. Conservatives now insisted that business must abandon this noblesse oblige. As Irving Kristol wrote, "Corporate philanthropy should not be, and cannot be, disinterested." In part as a result of these exhortations, corporations began funding a vast apparatus of foundations, think tanks, pressure groups, and media to advance views congenial to their bottom line.

(p. 55):

Republicans, for both partisan and ideological reasons, wanted to kill health care reform and were enraged at business's conciliatory posture. The conservative activist Grover Norquist began convening a weekly meeting of business lobbyists opposed to health care (mostly representing small businesses, which for the most part did not insure their workers and did not want to start) along with conservative groups like the National Rifle Association and right-leaning pundits. These strategy sessions produced, among other things, a concerted effort to pressure business lobbies to withdraw their support for reform. The conservatives denounced groups like the Chamber of Commerce as a sellout to big government and disseminated their attacks through talk radio, taped television spots, and Wall Street Journal editorials. Congressional Republicans boycotted a Chamber awards ceremony and threatened to ignore Chamber lobbying on other issues. Under this pressure, the Chamber reversed itself, and corporate support for health care reform collapsed.

(pp. 58-59):

The Bush administration has routinely -- so routinely it no longer makes news -- appointed lobbyists to oversee their former employers. Harvey Pitt, Bush's first choice to head the Securities and Exchange Commission, had made his name defending the accounting industry, Ivan Boesky, and anybody else seeking more lenient treatment of financial malfeasance. Pitt took the helm of the SEC and promised a "kinder, gentler" agency where "we aren't going to play gotcha." William Geary Myers III, a lobbyist for cattle grazers seeking to preserve federal subsidies, received an appointment to the Interior Department. Mark Weinberger, the Bush treasury official charged with regulating tax shelters, is a former lobbyist for purveyors of tax shelters. Soon after taking office he declared, "I want to change the 'us' versus 'them' mentality -- the 'us' being government, the 'them' being business."

That is a fitting summation of modern Republicanism. It has become increasingly difficult to distinguish between business and government, with the former regularly taking on the duties of the latter. In 2001, Enron interviewed several candidates to head the Federal Energy Regulatory Commission, and Bush ultimately appointed two who met with their approval. Enron's chairman Ken Lay met with the holdover FERC chairman and instructed him that he could keep his job only if he reversed his opposition to energy deregulation. The next year, two of Bush's appointees to a commission regulating lead poisoning revealed that they were first approached not by the administration but by the lead industry itself. The pattern is not merely "influence," it is the wholesale delegation of the tasks of governing.

(pp. 61-62):

The GOP, on the other hand, faces minimal divisions within its economic base. Yes, social conservatives do not always agree with economic conservatives, but the social conservatives focus almost exclusively on social issues and so do not usually weigh in with much force on economic issues. In the economic realm, Republicans enjoy no significant labor, consumer, or environmental support. Their economic base is uniformly corporate. And while businesses can disagree over certain issues -- most notably foreign trade -- they all want to pay as little in taxes, face the least amount of government regulation, and enjoy the most generous subsidies that they possibly can.

(p. 66):

By the time Bush signed an energy bill in 2005, the thin veneer of public purpose behind it had been stripped away almost entirely. It was neither a deregulation bill nor an effort to shift production to certain industries deemed more environmentally sound. It simply consisted of a massive wish list of subsidies for just about every segment of the energy industry. A single sentence, published in the Washington Post in 2003, tells you all you need to know: "The assembled lobbyists -- representing farm, corn, soybean, wind, geothermal, coal, oil and gas interests that benefit from provisions in the 1,100-page bill -- gave [the GOP senator and energy bill champion Pete] Domenici a standing ovation, and he thanked them for helping to push the legislation to the brink of passage, according to one person who was present." One analyst called the energy bill "the sum of all lobbies."

(p. 73):

One of the consistent tasks of the Republican agenda over the last decade has been to nurture the K Street machine. Every new subsidy directed to the business lobby creates a new sector of the economy dependent in some way on its relationship with Washington. The Medicare bill is a classic example. Here is how Robert E. Moffitt, a policy analyst at the conservative Heritage Foundation, put it in an interview with the Boston Globe: "The Medicare system has now become a vast arena of special interest politics. It has been transformed from a system where we were providing health care for seniors into a system where there is a massive redistribution of income among health care providers." The various tariffs, the corporate tax bill, the pork barrel spending, and the like all have the same effect. The beneficiaries understand that their interests are best served if they return a portion of their largesse in the form of donations and contribute to the spreading patronage network by employing Republicans in their Washington offices.

(pp. 96-98):

Unlike other ideological radicals, [Grover] Norquist did not wind up cranking out obscure pamphlets or hoarding handmade bombs in a mountain cabin. Instead, he channeled his energies into the Republican Party. Norquist has described himself, aptly, as a "Market-Leninist." In Leninist fashion, he sees politics as a Manichean struggle between what he calls "our team" and "their team." He does not see power as something that can be shared between the two sides -- he famously compared bipartisanship to date rape -- or as something that naturally swings back and forth over time. Rather, he deals in dialectical shifts, such as the inevitable death of the World War II generation, a group that Norquist has called "anti-American" for its statist proclivities, or the rise of stock ownership, which conservatives call "the investor class." "You can't have a hate-and-envy class if 80 percent of the public owns stock," he once declared, "That makes it impossible for Democrats to govern. It spells the end of their world." He frequently refers to the conservative struggle, and its inevitable triumph, as "the revolution."

Norquist, like a James Bond villain, has an irrepressible penchant for spelling out his master plans in their full, nefarious detail. He delights in casting his goals in the coarsest and most sinister terms. According to the journalist Nina Easton, he kept a pet boa constrictor and fed it a series of mice named after the former Democratic whip David Bonior. After the 2004 election, he proposed to the Washington Post that Democrats would become content once they accepted their permanent minority status. "Once the minority of House and Senate are comfortable in their minority status, they will have no problem socializing with the Republicans," he noted. "Any farmer will tell you that certain animals run around and are unpleasant, but when they've been fixed, then they are happy and sedate." He once railed against a group of millionaires seeking to preserve the estate tax, which was already scheduled for termination. "They're embarrassing," he said. "They're flopping around like that stupid fish in the boat. It's over, fish! It's done! You're dinner!"

Norquist boasts close links with powerful Republicans, having conferred regularly with Newt Gingrich during his heyday and currently maintaining close ties with Karl Rove and the GOP leadership. he also presides over the Wednesday Group, a weekly meeting often called "the Grand Central Station of the conservative movement." There, the sundry elements of the GOP coalition hash out the party line. Lobbyists, partisans, activists, and conservative journalists all commingle, with the shared sense that they are all part of what Norquist calls "our team." Slate's editor, Jacob Weisberg, once described the vanguard of the conservative movement as the "conintern" -- an apparatus, like the old Bolshevik comintern, designed to encourage intellectual accord within the movement. Norquist's meetings are the heart of the conintern. I spend a lot of time working with the conservative press to make sure that we're all thinking alike and talking alike," Norquist once said. Once hashed out in the Wednesday Group, the party line will soon emanate throughout the conservative media.

(pp. 108-109):

A lone exception to this trend proves the rule. In 2006, William Niskanen, the chairman of the libertarian Cato Institute, measured the relationship between changes in tax levels and changes in spending. He found that the premise of the "starve the beast" strategy was wrong. Indeed, it was backwards. Since 1981, tax cuts tended to spur higher levels of spending, while tax hikes tended to produce lower spending. (In fact, Richard Kogan of the Center on Budget and Policy Priorities had found the same thing in 2002, but Kogan was a liberal and therefore predictably ignored.) The moderate columnists Jonathan Rauch of the Atlantic and Sebastian Mallaby of the Washington Post excitedly wrote up Niskanen's findings. Surely this would demonstrate to the starve-the-beats conservatives the folly of their ways.

Not surprisingly, no rethinking whatsoever ensued.

(pp. 123-124):

All this is to say that Bush seized upon the pretext of a recession to impose the changes he had always wanted. Indeed, he first unveiled his tax cut with the economy at its peak. (He called it "an insurance policy" against recession, which sounds like spraying a fire hose on a house to make sure it doesn't catch fire.) When deficits appeared, Republicans insisted it would be the height of folly to raise taxes during a recession. Then the recession ended, but deficits remained. No problem. The fact that the economy was growing again proved "the tax cuts have worked," and therefore should be repeated. When, inevitably, the economy slowed down again, it was held up as evidence not that the tax cuts failed but that still more are needed.

(pp. 126-127):

This is more or less how conservatives feel about their alliance with the rich. They believe very earnestly that what is good for the rich is good for the country. Some do so from their adherence to the tenets of supply-side economics. Probably a greater number simply believe it in their gut. This isn't the sort of sentiment politicians like to advertise, but it slips out every once in a while. Bill Archer, the Republican former head of the Ways and Means Committee and a current tax lobbyist, once declared, "The engine that pulls the train must continue to be fueled." Phil Gramm, the conservative former senator, used to say, "No poor man ever gave me a job." This is a very old conservative sentiment -- less Adam Smith than Edmund Burke, and one verging on outright plutocracy. It has less to do with the Laffer Curve than an almost mystical faith in the centrality and virtue of the upper class. Tony Snow gave this view a particularly blunt expression when, as a columnist and Fox News talking head, he wrote: "Upper classes have always pulled societies forward economically -- and their conspicuous prosperity has always aroused the jealousies of the lower classes. The envious set out to strip the rich of their lucre, believing mistakenly that by redistributing income they could make everybody affluent."

Section on "Media: The Dog That Didn't Watch" -- starting with an example from Joe Klein where he went soft on Bush in 2000 (Klein wrote: "But, most important, it revealed an essential truth about the current Bush project. This is not a new Republican party but a souped-up version of a previous one: the very proper, mostly eastern-establishment party of the Eisenhower era; the party that existed before the Nixon-Reagan-Gingrich sunbelt rebels used racial fears to crack open the solid Democratic south; the Party that Martin Luther King, Sr., belonged to, for lack of a better option. It was Senator Prescott Bush's party, and it might have been President George H.W. Bush's natural home, too, if all those voodoo economists and gun lovers and abortion haters hadn't been riding so high in the prop wash of the Reagan revolution.") (p. 141):

We shouldn't be too hard on Klein. While his article has proven to be utterly wrong, it was the most common kind of wrongness, shared and repeated endlessly by the most influential journalistic minds. A discerning reader might have noticed at the time Klein's odd belief that the "voodoo economists" -- that is, supply-siders -- had been driven from power when in fact they supported the Texas governor in lockstep and accounted for every one of his economic advisers. But the rest was pure conventional wisdom, assertions that did not have to be supported with any evidence because they were so widely shared. Bush, it was held, represented a new, moderate kind of Republicanism. From this everything else followed: Gore's attacks on Bush's program were silly and overwrought; the election meant little (a premise from which some two and a half million left-liberals concluded that it was as good a year as any to cast a protest vote for Ralph Nader); and, finally, the candidates were properly judged not on their insignificant ideological differences but on aesthetics -- i.e., the superior calmness and tidiness of the GOP ticket.

Actually, we should go hard on Klein, not just for this mistake but for many of the others he's made, like not realizing the Iraq war wouldn't work out so swell. Anyone who thought the Republicans of 2000 had gotten past their "gun lovers and abortion haters" had a pretty weak grasp of their rank and file.

(pp. 180-181):

The line of conservative George W. Bush books is, not surprisingly, a mirror image of this. George W. Bush comes across as a paragon of virtue, all his political triumphs ultimately emanating from the strength of his character. In The Right Man, David Frum, a Bush speechwriter, spoke mostly of Bush's punctuality, his formal attire, and the way he "opened every cabinet meeting with a prayer and scorned the petty untruths of a politician." And his subordinates rightly adored him. Unlike the previous White House, where the staff remained seated when the president entered the room, "the Bush staff rose to their feet with a snap that would have impressed a Prussian field marshal."

The succession of paeans to Bush all followed this formula. They praised his policies, but they inevitably portrayed them as an outgrowth of the great man's personal qualities. Where the Clinton books were characterized by revolting personal detail, the Bush books were characterized by inspiring personal detail. The genre could be called leadership pornography. To wit, John Podhoretz wrote in Bush Country, without any hint of irony, that "those closest to Bush say that his extraordinary physical condition has allowed him to maintain a dazzling degree of focus and concentration on the details of the war on terror and the war in Iraq." It puts one in mind of the stories of Mao's swimming the Yellow River.

(pp. 181-182):

Liberals have produced their own shelf of books about Bush. They are, to be sure, deeply unflattering, and the tone is hardly measured. Unlike the books damning Clinton, though, they generally eschew wild or salacious tales of personal misconduct. (There are, of course, a few notable exceptions, such as James Hatfield's Fortunate Son.) These traditional polemics are dedicated to impugning the Bush administration's policies. The table of contents of The Book on Bush, by Eric Alterman and Mark Green, begins:

1. Introduction: The Power of Audacity
2. Drill and Cough: W.'s Environmental and Energy Policies
3. Déjà Vu-doo Economics: The Real Faith-Based Policy
4. When Laissez Isn't Fair: How a Business President Handles Business Fraud
5. Secrecy and Civil Liberties: "Watch What [You] Say"

And so on, marching earnestly through the forty-third president's domestic and foreign agenda.

Even a book with an inflammatory title, The Bush-Hater's Handbook, by Jack Huberman, is organized alphabetically, and the beginning lists the issue-based offerings: "Abortion, Birth Control, and Reproductive Health; AIDS; Air Pollution; Ashcroft; Axis of Evil; Biological Weapons; Budget and Taxes," etc. It does allow itself a few quick diversions into the personal, but even these instances are limited to public actions or statements -- Bush's mockery of a woman he executed, his crony capitalist business history, and the like -- and they are utterly pallid compared with the hysterical charges leveled against the Clintons.

(pp. 194-195):

The most charitable interpretation of this wanton secrecy is that the Bush administration is fixated on the theory of "executive privilege" -- the belief that the Oval Office needs to assert its legal prerogatives -- and that the president has carried this fixation to zealous extremes. This is not, obviously, a very flattering interpretation -- information, after all, is the lifeblood of democracy. Yet even the charitable explanation is too, well, charitable. In fact, the Bush administration has been notoriously promiscuous about releasing official secrets when doing so suits its own political ends. In 2002, Bush declassified portions of a transcript of a conversation in which Israel's prime minister, Ehud Barak, asked Bill Clinton to pardon the fugitive tax-evader Marc Rich. (It was the first time in American history that a president's discussion with a foreign head of state was declassified.) Clinton asked that the rest of the conversation be declassified as well, insisting that the context would make him look better. Bush refused. Bush has also declassified numerous documents that either seem to make his administration appear vigilant against terrorism or his predecessor appear lax. "Bush is the first president sine Richard Nixon to try to brandish declassification as a political weapon," concluded John Prados, an analyst with the National Security Archive. There is no real executive privilege principle at work here. The only principle is the Bush administration's consistent desire to expand its control over what information makes it into the public discourse.

(p. 237):

It is not that conservatives shy away from internal debate, but rather that those debates have a frantic orthodoxy about them. Conservative debates, unlike liberal ones, begin with the premise that there is a single belief system. The debate usually takes the form of an accusation, or mutual accusations, of ideological heresy. Intramural conservative disputes are almost always confined to those few areas, like immigration or certain foreign policy issues, where the conservative litany is not well defined. As we saw earlier, they usually take the form of rival claimants to the true spirit of Reaganism. Conservatives regularly allude to "the conservative movement." Liberals have no corresponding term. This is because there is no liberal movement in anything like the sense that there is a conservative movement.

(pp. 239-240):

After his reelection in 2004, Bush's popularity sank and his legislative agenda ground to a halt. In the conservative mind there was only one possible explanation: Bush had abandoned the faith. As the liberal writer Rick Perlstein has observed: "Conservatism never fails. It is only failed." The swift collapse of Bush's presidency after his reelection was therefore evidence that he could not be a true conservative. The conservative press reverberated with denunciations of him as an ideological turncoat. Where once they spoke of Bush in the same breadth as Reagan, they now compared him to Richard Nixon or George H. W. Bush -- hated moderates who curried favor with the liberal establishment. A previously unknown and unimaginable genre appeared: the conservative anti-Bush book, with titles like Imposter or Conservatives Betrayed. The cult of personality dissipated all at once. Bush's ideological transgressions, once dismissed as a mere annoyance, suddenly came to define him. Before, conservatives had insisted that Bush's lack of enthusiasm for budget-cutting mattered little in the face of his passion for cutting taxes. In its enthusiastic endorsement of Bush in 2000, for instance, the National Review insisted that his "support for tax cuts and Social Security reform is more important than his spending initiatives -- not least because if he succeeds on taxes and Social Security, it will be easier to limit government in the future." The Bush presidency was a test of this starve-the-beast strategy, which is the essential premise of conservative domestic policy. But the conservatives could not admit that their own theory had fallen short, that the strategy and the assumptions behind it had failed. Betrayal was the only explanation.

(p. 247):

Mainstream think tanks -- or, as we now call them, "liberal" think tanks -- grew out of the Progressive Era belief in public policy informed by disinterested expertise and social science research. The Brookings Institution is the preeminent example of a think tank that grew out of this ethos, but many others followed. The scholars at such institutions are not omniscient, and obviously they disagree with one another and get things wrong more than occasionally, but their work grows out of Robert Brookings's goal of promoting research "free from any political or pecuniary interest." (Two of Brookings's former presidents, Michael Armacost and Bruce MacLaury, were Republicans.) The scholars at liberal think tanks move comfortably in the world of academia. The worst thing that could happen to them would be to have their research seen as partisan hackwork.

(pp. 257-258):

Another way to look at the asymmetry between liberal and conservative commentators is to consider Fred Barnes, the executive editor of the Weekly Standard and a regular commentator on Fox News Channel. In the world of conservative commentary, perhaps only George Will enjoys more prestige.

Barnes is widely and eagerly read by political junkies for the same reason that Pravda was devoured by Kremlinologists: he faithfully reflects the thinking of the party leadership, whether or not it has anything to do with conservative principle. In December 2001, for instance, the Bush administration was soaring in opinion polls on the basis of a patriotic upsurge after September 11. It decided to use this political capital to pass through Congress a "stimulus bill," consisting in large part of permanent tax breaks for business favored by K Street long before September 11. Tom Daschle, the Democratic Senate leader, was reluctant to cooperate, and Bush decided to launch a public relations campaign assailing Daschle for his lack of cooperation. As a White House official told the Washington Times, another faithful movement organ, "The orders came down from high to start getting tougher [on Daschle]."

Conservative opinion writers dutifully sprang into action, none more dutifully than Barnes. Barnes wrote a lengthy article laying into Daschle for failing to support Bush's domestic goals. Daschle's theory, Barnes explained disgustedly, was to offer unqualified support for Bush's foreign policy while resisting things like long-term business tax cuts or opening the Arctic Wildlife Refuge for oil drilling. Barnes labeled this approach "crass maneuvering."

I must admit that I thought Daschle's support of Bush's wars was indeed pretty crass, but that's another matter. One of our favorite scenes in The Sopranos was noticing Carmella reading Barnes' Bush hagiography, Rebel in Chief.

(pp. 262-263):

Of the many taboos that prevail among conservatives, the one forbidding any serious discussion of inequality is perhaps the strictest. Any forthright examination of this topic will lead one quickly to the realization that American society has been spreading apart rapidly for three decades and that Republican economic policies have without a doubt contributed mightily to this gulf. So conservatives usually ignore the subject of inequality, except perhaps to minimize its scale or importance.

(pp. 264-265):

The current predicament is not altogether unfamiliar to America. A century ago, there were vast disparities in wealth and income, and the political system was dominated by a self-serving elite. What finally turned the tide was a wave of labor violence and radical activism, first around the turn of the century and again during the Great Depression. The business and political elite feared that capitalism itself was under siege and might not survive, and in time it embraced the palliative of modern liberal reform in order to safeguard the free enterprise system.

The elite of that generation, like the elite of today, was conservative by temperament. But their conservatism meant something else -- a sense of social responsibility, a commitment to preserving peace between economic classes. The conservatives of today, on the other hand, have redefined conservatism as an expression of their material self-interest, defined in the narrowest and most short-sighted terms. They have forgotten the lessons of their forebears, and if sanity is to be restored to our political order, they must relearn them.

Jacob S Hacker: The Great Risk Shift: The New Economic Insecurity and the Decline of the American Dream (2006; revised and expanded edition, paperback, 2008, Oxford University Press)

---

(pp. 7-8):

The United States does spend less on government benefits as a share of its economy, but it also relies more -- far more -- on private workplace benefits, such as health care and retirement pensions. Indeed, when these private benefits are factored into the mix, the U.S. framework of economic security is not smaller than the average system in other rich democracies; it is actually slightly larger. With the help of hundreds of billions in tax breaks, American employers serve as the United States' unique mini-welfare states -- the first line of defense for millions of workers buffeted by the winds of economic change.

The problem is that these mini-welfare states are coming undone, and in the process, risk is shifting back onto workers and their families. Employers want out of the social contract forged in the more stable economy of the past. And because they do no not need to answer to the broader public that depends on the jerry-rigged systems of security they provide, employers are getting what they want. Meanwhile, America's framework of government support is also strained. Patently inadequate to deal with families' growing risks, it is nonetheless attacked for costing and doing too much -- by critics who claim that the ideal of insurance is both outmoded and harmful to economic growth and advancement.

As private and public support erodes, workers and their families must bear a greater burden. This is the essence of the Great Risk Shift. Through the cutback and restructuring of workplace benefits, employers are seeking to offload more and more of the risk once pooled under their auspices. Facing fiscal constraints and political opposition, public social programs have eroded even as the demands on them have risen. And if critics have their way, these programs will erode even further. The next frontier in the Great Risk Shift is the transformation of existing programs -- Medicare and Social Security chief among them -- from guaranteed benefits defined by law to individual private accounts that leave workers and families shouldering more and more of the risks that these programs once covered.

(pp. 13-14):

Consider some of the alarming facts. Personal bankruptcy has gone from a rare occurrence to a relatively common one, with the number of households filing for bankruptcy rising from fewer than 290,000 in 1980 to more than two million in 2005. The bankrupt are pretty much like other Americans before they file: slightly better educated, more likely to be married and have children, roughly as likely to have had a good job, and modestly less likely to own a home. They are not the persistently poor, the downtrodden looking for relief. They are refugees of the middle class, frequently wondering how they fell so far so fast.

Americans are also losing their homes at record rates. Sine the early 1970s, the mortgage foreclosure rate has increased fivefold. From 2001 to 2005, even before the housing bubble burst, an average of one in every sixty households with a mortgage fell into foreclosure a year -- a legal process that begins when homeowners default on their mortgages and can end with homes being auctioned to the highest bidder in local courthouses. [ . . . ]

Meanwhile, the number of Americans who lack health insurance has increased with little interruption over the last twenty-five years as employers have cut back on workplace coverage for employees and their dependents. Over a two-year period, more than 80 million adults and children -- one out of three nonelderly Americans, 85 percent of them working or the kids of working parents -- spend some time without the protection against ruinous health costs that insurance offers.

(p. 24):

These up-and-down swings are what get missed when we use annual snapshots to look at the income distribution. There are not just the well off and the poor. There are Americans who are doing well one year and poorly the next -- and vice versa. In fact, a surprisingly big chunk of the inequality that we see across families at any point in time is due to transitory shifts of family income, rather than to permanent differences across families.

(p. 24):

The evidence shows, moreover, that income mobility across generations is actually lower in the United States than in other affluent nations. According to recent studies, there is more social mobility in European nations such as Sweden than in the United States, and in fact only South Africa and Britain have as little mobility across generations.

(p. 25):

The difference between these two scenarios is profound, because both research and common sense suggest that downward mobility is far more painful than upward mobility is pleasurable. In fact, in the 1970s, the psychologists Amos Tversky and Daniel Kahneman gave a name to this bias: "loss aversion." Most people, it turns out, aren't just highly risk-averse -- they prefer a bird in the hand to even a very good chance of two in the bush. They are also far more cautious when it comes to bad outcomes than when it comes to good outcomes of exactly the same magnitude. The search for economic security is, in large part, a reflection of a basic human desire for protection against losing what one already has.

(p. 32):

The flipside of this picture, however, is that poverty afflicts many more Americans at some point in their lives than is commonly believed. Take the U.S. child poverty rate of 20 percent -- a rate three times higher than the norm in northern Europe. Most people look at this number and think that "only" one in five kids experience poverty in the United States. That's true in any given year, but the kids who are poor change from year to year. If we want to know how many kids experience poverty at some point in their childhood, we need to count up the total number who spend at least a year beneath the poverty line by the age of eighteen. The answer, it turns out, is shocking: More than half of American kids spend at least a year in poverty by the time they're eighteen -- compared with less than a quarter of German children.

The picture is similar for adults. Using the PSID, the sociologist Mark Rank has calculated that a stunning 58.5 percent of Americans will spend at least a year in poverty between the ages of twenty and seventy-five.

(p. 43):

Today, critics of Social Security often describe it as "outmoded" -- a program built for a very different set of circumstances. But the ideal of insurance wasn't meant to deal with the calamity of the Depression; it was meant to provide a secure foundation for economic activity and advancement for decades to come. The architects of the Social Security Act contrasted insurance for working Americans with relief for those who were already destitute. Relief was reactive, demeaning, inevitably stingy. Insurance was proactive, uplifting, generous. Relief was backward looking; insurance was forward looking. By creating a basic floor of protection, it allowed Americans to seize on economic opportunities they might otherwise view with anxiety and fear.

On Harvard economist Martin Feldstein (pp. 50-51):

A Feldstein article had two parts, now familiar after years of repetition by disciples and emulators. First, find a well-meaning law, regulation, or program that was designed to protect workers and their families from harm by indemnifying them against certain risks. Second, show that by reducing the costs of these risks, the law, regulation, or program created perverse incentives, making the problem it was meant to solve worse, or at least not much better. For example, Feldstein attacked both unemployment insurance and Social Security on the grounds that they encouraged the very thing they were supposed to prevent -- namely, time out of the workforce and inadequate retirement income. The Feldstein one-two punch was always backed up with impressive economic techniques and delivered with an air of regret rather than anger. "You may not like the truth," was Punch 1. "But you cannot deny it," was Punch 2.

Over the course of the 1970s, Feldstein churned out a series of highly technical but hugely influential studies showing that Americans, because of tax breaks and public programs, were excessively insured against health costs and other financial risks. Not only were all existing policies inefficient, Feldstein argued, the taxes used to support them were a huge drain on the economy, drastically reducing the incentives of higher-income Americans to work and invest. (In his classes, Feldstein liked to describe the three U.S. tax rates as "high," "higher," and "highest.") When Ronald Reagan was elected in 1980, he tapped the forty-one-year-old economist to head the White House's Council of Economic Advisers.

(p. 52):

This was -- and is -- the central message of the Personal Responsibility Crusade: Government should get out of the way and let people succeed or fail on their own. Government insurance upsets the natural working of a free society. It takes from the most energetic individuals and enterprises in society to subsidize those who are a costly drag on a vibrant economy. "Government insurance," in the words of one critic, "taxes the most productive activities to redistribute to the most risky" -- one reason why "the government that governs least, governs best." In the early 1980s, conservative scholar Charles Murray coined a simple syllogism to explain why good-intentioned programs inevitably went bad: "Any social transfer increases the net value of being in the condition that prompted the transfer." In other words, helping people just creates more people who need help -- moral hazard with a vengeance.

Who's Afraid of Personal Responsibility? (pp. 59-60):

Picture our liberated worker. A hardworking professional, he takes time each morning to check the level of his IRA, rebalance the portfolio in his 401(k), see if his medical spending is depleting his Health Savings Account, and make sure the Education Savings Account he set up for his kids is accumulating enough for sixteen or more years of private schooling for his twin daughters. If he were to lose his job, he would draw on his Temporary Unemployment Savings Account -- which, of course, he's diligently contributed to, knowing full well the risks that all professionals face in today's hyperdynamic, free-agent economy. If he were somehow disabled, he could draw on his Disability Savings Account, as well as the tax-advantaged private disability coverage that he purchased on his own and religiously renews each year.

His wife is staying home to care for their two new children, courtesy of a Caregivers' Account in which the couple socked away money from their first day out of college. Soon, they will draw on the Caregivers' Account to pay for a full-time nanny so his wife can go back to her own professional job. Ever resourceful, he has not only bought a standard life insurance policy but also set up a Long-Term Health Savings Account, which will cover his and his wife's expenses if they ever need nursing home care -- and, like all the other accounts, can be passed on to the kids if they don't use the money by their deaths. He often finds himself shaking his head when he hears about young workers who have passed up all these extravagantly subsidized options. To each his own, he shrugs. He is certainly not going to bail them out when they find themselves out of a job or in need of round-the-clock care. And when his kids are older, he will tell them what he has learned from a life of hard work and prudent saving: The entitlement age is over.

Jimmy Richter was making nearly $100,000 per year at Nortel Networks before his job was cut in 2002. No one in the field was hiring, so he wound up taking a supervisory job at a cable company paying half of what he was making (p. 72):

The only truly unusual aspect of Richter's experience is how common it is at a time when the unemployment rate is so low. Why aren't employers scrambling for workers, and workers bidding up wages, when only one in twenty workers if out of a job? The answer is that many who find themselves, like Jimmy Richter, without a good job eventually give up looking for one. These are the shadow unemployed -- people who want to work , who would work, but who aren't counted as unemployed because, in the parlance of unemployment statistics, they're not "actively seeking work" when they're surveyed. And however you count them, the shadow unemployed have grown.

(p. 80):

The shift is etched on our economic landscape: In the late 1960s, the nation's largest employer was General Motors, which paid its workers solidly middle-class incomes ($29,000 on average, in current dollars) and provided generous benefits. Today, the largest employer is Wal-Mart, which pays roughly $17,000 on average, offers no guaranteed pension, and covers less than half its workers through its health plan.

Wal-Mart and GM, of course, represent extremes. But they give a sense of the scale and scope of the change. For decades U.S. manufacturing has been in steep decline, as an increasing share of employment has moved into the service sector -- industries like medical care and teaching that do not turn out physical products. In 1960 almost 40 percent of nonagricultural employment was in manufacturing. By 2002 only 14 percent was, and more than 80 percent of nonfarm work was in services. Manufacturing has not just fallen in relative terms but in absolute terms, too, with 5.2 million manufacturing jobs lost between 1979 and early 2004 -- over half that total since 2000 alone.

(pp. 88-89):

A generation ago, families' dependence on financial contributions from women like Julie and Vicki was relatively rare. Most married women with kids stayed at home while their husbands worked for pay. Today, almost all husbands still work, but married women -- even married women with very young children -- are much more likely to work than not. Roughly six in ten married mothers of infant children work. In 1975, only three in ten did. At the same time, the contribution of women's earnings to household income has grown dramatically. In 1970, less than a third of married couples worked roughly equal numbers of hours a week, and in about half of families, men earned essentially all of the family's income. By 2000 more than 60 percent of married couples worked approximately equal hours, and only about a fifth of families featured the Leave It to Beaver male-breadwinner model. In the course of a single generation,t he norm for married women with children has shifted form staying home to care for children to working (often full time) in the paid labor force to bolster family finances.

And bolster family finances women have. Although the median family income has grown only modestly in the last generation after adjusting for inflation, married-couple families have seen stronger growth, with their median income rising around one-third between 1973 and 2003. As this comparison suggests, much of the rise in what American families take home is due not to higher wages or salaries, but to the fact that women are working many more hours outside the home than they once did. Indeed, without the increased work hours of women, the rise of real middle-class incomes between 1979 and 2000 would have been less than a fourth as large as it was, while low-income families would actually have experienced a substantial real income drop. In short, middle-class families have gotten richer mainly because women have started working for pay or stepped up their work hours -- and this is one reason why these families' standard of living is now at greater risk.

(pp. 98-99):

We can see this in the Panel Study of Income Dynamics, which has asked questions about wealth on a regular basis since 1984. Young families whose heads grew up in the 1940s and early 1950s entered middle-age (age thirty-five to forty-four) in 1983 with a median household wealth of $57,393. For young families whose heads grew up in the 1960s and early 1970s, by contrast, the middle-aged situation reached in 2002 was not nearly as bright: The median family held only $31,800, or more than $25,000 less (all these numbers are in 2002 dollars). At the same time, according to a recent study by the think tank Demos, the youngest of adult Americans are piling up vastly more debt than their parents did at the same stage of life, particularly credit-card debt. In 1992, 7.9 percent of young adults (aged twenty-five to thirty-four) faced "debt hardship" -- spending more than 40 percent of their income on debt payments, including mortgages, student loans, and minimum credit-card payments. By 2001 the percentage facing debt hardship was 13.3 percent.

Not surprisingly, the gap in wealth between young and old families has grown: In 1984, median household wealth of older families (whose heads were age fifty-five to sixty-four) was four and a half times the median for young families (age twenty-five to thirty-four). By 2003 it was nearly thirteen and a half times as great. And rising debt and falling wealth for younger Americans haven't been accompanied by higher consumer spending. To the contrary, young Americans in the 1990s (so-called Generation X) spent less than their baby-boomer parents did in the 1970s. "With the possible exception of having a larger array of entertainment and other goods to purchase, " write two economists, "members of Generation X appear to be worse off by every measure."

(pp. 100-101):

At the root of the dilemma is the simple reality that raising children is long, hard (and, yes, terrifically rewarding) work -- costly in terms of both time and money. Over the last generation, the expectations on parents have grown dramatically, even as the costs of parenthood have risen and the tangible rewards have evaporated. Parents are expected to devote eighteen years of their lives and tens of thousands of dollars to provide continuous guidance, love, education, and care to each of their offspring. Indeed, our society depends on these massive investments to flourish and grow. But most of the costs of raising children are not borne by the societies that reap the benefit; they are borne by parents. The result is a wholesale transformation of the economic effects of kids. In the not-so-distant past, children were an insurance policy for parents -- an additional worker on the farm, a helping hand when parents grew older. Today, for all the joy and love children bring into a family, they are, in simple economic terms, a risk -- and a risk that parents bear almost wholly on their own.

(p. 122):

To be sure, defined-contribution accounts grew handsomely during this period, especially in the 1990s. Yet, at the same time, median defined-benefit holdings declined as employers stopped offering defined-benefit plans. So too did expected Social Security benefits, thanks to the cutbacks in Social Security passed in 1983. When all the gains and losses are added up, the median family approaching retirement -- that is, the family exactly in the middle of the retirement wealth distribution -- ended the 1990s with 11 percent less in retirement wealth than the median family had in 1983. And the story gets worse. The proportion of near-retirement families that are likely to live on less than halfof their prior income in retirement increased substantially between 1989 and 1998 -- from less than 30 percent to more than 40 percent. In other words, more than two out of five families nearing retirement in 1998 were likely to be living on less than half of their present income -- a sharp increase in less than a decade.

(pp. 130-131):

Guerilla warfare was a team sport. In what would become a standard cycle, trumped-up complaints against Social Security moved from conservative intellectual circles to policy experts in antigovernment think tanks into the mouths of Republican politicians -- becoming, as in a childhood game of "telephone," more grandiose and inaccurate at each step of the journey. Thus the respected Harvard economist Martin Feldstein wrote a series of highly influential -- and, it soon became clear, highly flawed -- analyses arguing that Social Security was not only inherently unsound but a massive drag on the economy. His complaints were picked up by anti-Social Security policy experts who dumbed them down for a broader audience and trumped them up for the press-release world of Washington. Within a matter of years, these talking points became the standard mantra of Republican leaders: Social Security was going broke; it was drastically reducing national savings; it was bad for widows and blacks; it was a form of fiscal child abuse that allowed greedy seniors to rob from the younger generation.

The claims were often as preposterous as they were powerful. (How, for example, could Social Security so grievously disadvantage women when they received so much more back from the program relative to what they had paid in than did men? How could the program be running on empty when Republicans were calling for using the surplus in the program's trust fund to pay for new tax cuts?) But the plausibility of the Chicken Little chorus was less important than its overall impact. What Social Security had going for it, besides the fact that people liked its basic goal, was that millions of Americans had paid into it and expected to get back what they had been promised when they retired. Convincing Americans that the chance of getting full Social Security benefits was lower than the chance of aliens landing on Earth -- as one humorous but completely bungled anti-Social Security survey suggested most younger workers felt -- made the task of blowing up the present system that much easier.

(pp. 138-139):

Consider the grim statistics. Among insured Americans, 51 million spend more than 10 percent of their income on medical care. One out of six working-age adults are carrying medical debt, and 70 percent had insurance when they incurred it. Of those with private insurance and medical debt, fully half have incomes greater than $40,000, and of this group a third are college graduates or have had postgraduate education. In the twelve months prior to May 2007, around three in ten nonelderly adults who had health insurance lacked adequate coverage. These "underinsured" Americans are the hidden blot on American health care, missed by the binary categorization of the population into the insured and uninsured. Nearly six in ten of the underinsured postponed needed medical care because of the cost, nearly four in ten had to put off medical care because of the cost, nearly four in ten had to put off home or car maintenance or repairs due to medical expenses, a third had to dig deep into their savings to pay for medical care, and more than one in five made job-related decisions based mainly on their health care needs. Strikingly, the median family income of the underinsured was $58,000 -- almost exactly the same as the median income of those with adequate coverage. The underinsured were just as likely to be white as the well insured, nearly as well educated, and just as likely to work full-time and in large or medium-sized companies. The only consistent way in which the underinsured appear to differ from those who are better protected is that they are at grave economic risk.

Meanwhile, millions upon millions of otherwise fortunate Americans find themselves uninsured at some point, and often at several points, during their lives. Everyone has heard the numbers: 47 million Americans without health insurance, the vast majority of them in working families. But the uninsured are a constantly shifting group that includes many more people than that. In the two years beginning in 2002, a stunning 82 million people -- one out of three nonelderly Americans -- went without health insurance at some point. Most were uninsured for at least half a year; more than half were uninsured for at least nine months. And yet these ordinary Americans at extraordinary risk have for years remained largely unnoticed, an inconvenient blot on the heralded success story of the American economy.

(p. 142):

To start with the most fundamental issue, health care is not like other goods. Most of us think it's fine that some people can't buy fancy clothing or fast cars, or have to eat at home instead of going out to splendid restaurants. But most of us draw the line at basic health care. Someone who is gravely ill or injured needs treatment -- period. This "rule of rescue" builds on a broader conviction: that everyone in an affluent society needs to have at least some protection against conditions and events that cripple their ability to participate as citizens and workers.

And since health care isn't an optional luxury, it's also an expense that almost everyone wants to have insurance against. Health insurance was once called "sickness insurance" -- for a simple reason: the main cost of health care used to be the time spent out of the workforce due to sickness. Today, however, the costs of medical treatment vastly dwarf the forgone earnings due to sickness, mostly because medicine can do so much more than it once did. In 2003, according to my own analysis of data from the Medical Expenditure Panel Survey, nearly 40 percent of Americans had medical expenses (covered by insurance or not) that exceeded 10 percent of family income, a third had expenses that were larger than 20 percent, and more than a tenth had expenses that exceeded their entire income. There is simply no way that families can finance expenses like this on their own. Insurance, like basic health care, is not optional.

(p. 143):

All this would be less of a problem if the insurance market in health care worked smoothly, but it does not. When insurance is for discrete, discernable risks that are easily assessed and not easily faked, private insurance markets perform splendidly. Unfortunately, the health insurance market isn't at all like this. Perhaps the biggest difference is that the likelihood of needing insurance and the magnitude of future health costs are very difficult for insurers to estimate. As a result, insurers frequently know less -- much less -- about applicants' need for insurance than applicants themselves, and this gives rise to the great bugbear of private insurance markets: "adverse selection."

Adverse selection is a fancy phrase for a simple fact -- people who most need insurance are most likely to buy it. The problems begin when insurers try to protect themselves against adverse selection. Once obvious response is to try to weed out or charge exorbitant rates to the highest-risk groups. Yet the ability of insurers to do this is limited by knowledge, by technology, and sometimes by law. And, of course, these practices undercut the ability of those who truly need insurance to obtain it. The other response is to raise premiums, but this simply reduces the number of people who have coverage. It cannot eliminate adverse selection, because at any premium, those most likely to need coverage are most likely to see it as in their interest to pay the premium.

(p. 178):

The starting point for a new vision is a simple but forgotten truth: economic security is a cornerstone of economic opportunity. Like businesses, people invest in the future when they have basic protection against the greatest downside risks of their choices. The worker who fears being laid off at any moment may be more productive in the short run. But in the long run, insecure workers tend to underinvest in specialized training; they are more reluctant to change jobs; they try to minimize their sense of job commitment to protect themselves against psychological loss. Similarly, the family barely scraping by may work more hours; but in the long run insecure families are not going to be able to make the investments in education and other keys to their future that they should. And, of course, none of these costs include the huge emotional, psychological, and economic losses absorbed by workers and their families when they lose their incomes, their homes, and their dreams.

(pp. 179-180):

These strains reported by middle-class Americans are staggering. Among adults with family incomes between $36,000 and $58,000, one in eight say they were involuntarily unemployed in the previous year, one in five didn't go [to] the doctor because of the cost, more than one in five said they went without health insurance at least once, nearly two in five said they didn't have access to an employment-based retirement plan, more than half said they didn't have enough savings to handle a personal economic crisis, and roughly two in three said they weren't saving enough for retirement. Among Americans as a whole, the biggest worries -- reported as "very stressful" by more than 40 percent of adults -- are "having enough for retirement," "having enough savings," and the "cost of health care," the number-one worry.

(p. 189):

Few Americans, I am certain, are ready to accept this dismal conclusion -- not at least in the world's richest nation. And rightly so: Almost every other advanced industrial country provides insurance not just to the aged but to all citizens, while spending much less on a per-person basis than the United States' incomplete system does. Many of these nations, furthermore, have much older populations than we do, have citizenries that go to the doctor more often, and have better basic health outcomes. Yet their overall health spending remains far below ours and, in many, has also been growing more slowly.

Jacob S Hacker/Paul Pierson, Off Center: The Republican Revolution & the Erosion of American Democracy (2005, Yale University Press)

I actually read this book after I read Hacker's more recent book, The Great Risk Shift: The New Economic Insecurity and the Decline of the American Dream, which focuses more on the effects of the Republican ascendency than on the political techniques surveyed here.

---

(pp. 2-3):

Today's governing Republican majority can justly claim that it has defied these normal laws of political gravity. It has ruled with the slimmest of majorities and yet overseen a major transformation of America's governing priorities. It has been locked in tight competition with its political rivals and yet shown little inclination to tack to the political center. It has strayed dramatically from the moderate middle of public opinion and yet faced little public backlash. Again and again, it has sided with the extremes. And much more often than not, it has come out on top.

This book explains why. It shows that those who run our nation are committed to ideas and laws that are at odds with the moderate center of American opinion. It explains why our nation's political leaders have veered so far right and why the normal mechanisms of democratic accountability have not been able to bring them back. And it explores how the interwoven forces that have created this troubling state of affairs can be overcome. America's great democratic experiment is under assault. Restoring its health requires understanding how those that hold the reins of political power in the United States have succeeded in pushing American government so far off center.

(p. 13):

Students of politics, even professional ones, frequently take for granted the agenda of political debate -- as if everyone agrees what issues should be debated and what alternatives should be considered to address them. This is a profound error. The great political scientist E. E. Schattschneider once observed: "There are billions of potential conflicts in any modern society, but only a few become significant. . . . [T]he definition of the alternatives is the supreme instrument of power. He who determines what politics is about runs the country." One does not have to believe in a cohesive power elite pushing all conflict to the side to recognize that the power to set the terms of debate is a hugely important mechanism of influence. As we shall see, it is a mechanism that the increasingly coordinated GOP establishment has skillfully used to shift American governance to the right.

(p. 45):

Republicans like tax cuts. The party that emphasized fiscal discipline int he face of the Great Depression now touts tax cuts no matter the budgetary consequence. Tax cuts are Republicans' all-purpose policy tonic, a solution perpetually in search of a problem. If the economy is doing poorly, taxes must be cut to promote growth. If the economy is roaring like a late-night party, the government needs to "open the doors and windows and invite everybody in." As the United States prepared to invade Iraq, Tom DeLay felt moved to declare that it was Congress's patriotic "duty" to cut taxes. "Nothing is more important in the face of a war," DeLay insisted, "than cutting taxes."

(pp. 48-49):

And yet, this conventional portrait of American politics completely fails to explain the tax-cut party. The tax cuts did not pass because ordinary voters wanted them. They passed because Republican political elites were eager to please their base -- the partisans, activists, and moneyed interests that are their first line of support. And they passed because GOP leaders were able to manipulate the public face of the tax cuts through their language, their control over the governing agenda, and their crafting of the tax cuts themselves. What the tax cuts reveal is that Republicans now have the motive and the means to get into law major policies that few Americans support -- and to shield themselves from the risk that the millions on the losing end of the bargain will realize they've been had.

(pp. 52-53):

Thanks to disillusioned former Treasury Secretary Paul O'Neill and journalist Ron Suskind, a number of important internal memos from the early Bush administration are now in the public domain. One that is particularly revealing dates from the unveiling of the Bush administration's first round of tax cuts in 2004 (fig. 3). It was written by Michele Davis, a top Treasury official and participant in daily meetings on the administration's communications strategy. Her prescriptions regarding "message" undoubtedly reflect strategies developed at the highest level. The memo begins innocently enough, asking O'Neill to plug tax cuts at a press event unveiling the president's budget. then, however, Davis warns: "The public prefers spending on things like health care and education over cutting taxes." This is a stunning admission. If the Bush administration had cared about responding to public opinion, it presumably would have counseled a much more modest plan. But to Davis, the views of the public on this profound question of governance offer only a motivation to spin. O'Neill is reminded to avoid talking about any possible tradeoffs that tax cuts might entail. "It's crucial that you make clear that there is no tradeoff here," Davis writes. "Roll-out events like this are the clearest examples of when staying on message is absolutely crucial. Any deviation . . . will change the way coverage plays out from tomorrow forward."

(pp. 71-72):

Republicans have developed what we will call, with apologies to left-wing organizer Saul Alinsky, the "new rules for radicals." Alinsky's original rules for radicals were designed to mobilize public opposition to corporate and elite power. The Republicans' new rules are designed to minimize popular concern about policies and actions that frequently cater to these same corporations and elites. If we are to understand how Republicans have successfully pursued policies inconsistent with the popular wishes, we need to understand each of the six strategies they live by.

• Rule 1: Control the Agenda. Political elites know well that they are advantage don certain issues, and they try to stay on the terrain that serves them best. Even when elites don't control which exact issues come up, they may be able to dictate which proposals receive attention -- a formidable political weapon.
• Rule 2: Don't Focus on the Label; Worry about What You Can Put in the Box. Political analysts too often judge victories by looking only at the label slapped onto whatever has passed. But politicians know well that an enormous range of government activities can fall under the heading of any broad label. To see off-center policymaking in all its dark glory requires looking past labels and examining what legislation actually does.
• Rule 3: Run from Daylight. Passing laws is generally a high-profile venture and therefore potentially risky. But there are powerful ways to change policy without changing laws. And these alternative routes typically throw up fewer roadblocks and attract less attention, which makes them especially attractive for moving public policy off center.
• Rule 4: Don't Just Do Something; Stand There. In American politics, power often means the ability to block things you don't like. And sometimes, to block new policies is to change existing policies. When policies have to be updated to achieve their goals or deal with pressing social problems, successful obstruction means government does less.
• Rule 5: Starve the Beast -- Later. Most of what our government does requires money. As a result, conservatives have long argued that the way to downsize government is to "starve the beast" by slashing taxes. But much of what government does is also very popular. So conservatives have learned to delay the starvation diet for later. Chip away at the financial foundations of government today, so that, down the road, it finds itself -- like Wile E. Coyote in the old Road Runner cartoons -- running in thin air, with nowhere to go but down.
• Rule 6: Tilt the Playing Field. The powers of a coordinated, aggressive political majority can be used to change policy. They can also be used to change the rules of the game, so that the room to pursue off-center initiatives will be greater in the future.

(pp. 79-80):

In 2005, for instance, the Coalition for the Modernization and Protection of America's Social Security (known as "Compass") launched a $20-million campaign on behalf of the president's still-undefined privatization proposal. Although Compass is a collection of major business and trade associations, the effort had all the trappings of a grassroots campaign. Similar efforts were launched by the anti-tax Club for Growth and by Progress for America, an ultraconservative activist network -- both of which targeted the Republican base in key GOP districts. All told, at least $100 million was on tap for the lobbying blitz, most of it coordinated by the White House. "With the president's leadership and the White House leadership, they have really put together a campaign-style effort to enact Social Security reform," said a leader in the Compass coalition. "They've got all their assets involved in this thing."

Even with outside support, however, Bush's overhaul of Social Security will require fiscal chicanery and manipulative policy design at least rivaling that of the tax cuts. There is simply no way to divert so much of younger workers' payroll taxes out of the traditional Social Security system otherwise. In light of strategies chosen in the tax-cut debate, we can expect highly creative attempts to borrow the trillions needed to fund private accounts and even more creative measures to obscure the benefit cuts that privatization will require. The new accounts will be offered up front as manna from heaven that, once granted, can never be taken away. The benefit cuts will be delayed, hidden in the obscure language of cost-of-living increases, or ultimately left to future Congresses to deal with. But the basic strategy will be clear. Get private accounts into law in any way possible. Assure their recipients that these accounts are theirs, never to be altered or touched. Hide the huge costs and risks. And hope that, when the day of reckoning comes, voters won't recognize how and when America's most popular program was hijacked.

(pp. 114-115):

Political inequality of this sort is a cause for concern whichever party it favors. But make no mistake: A system biased in favor of well-off voters is also a system biased in favor of the Republican Party. New York Times columnist David Brooks and others have had much fun casting the battle between Republicans and Democrats as a clash of civilizations between decadent, highbrow coastal regions and the patriotic, lowbrow heartland. Yet traditional economic divisions have not been supplanted by a culture war between tolerant, latte-sipping progressives and patriotic, NASCAR-loving traditionalists. To the contrary: Class is actually an increasingly important dividing line between the parties. Sine the 1950s, the relation between income and party allegiance -- with poor and working-class voters favoring the Democrats -- has become stronger, not weaker.

(p. 115):

Consider trade unions, which once represented more than one in three workers in the United States (and, indirectly, those workers' families). Since the 1970s, the proportion of workers that is unionized has plummeted, and today less than a tenth of private-sector workers belong to a union. Amid the ongoing debate over whether unions are good for the economy, we often forget that they have always been crucial political actors, helping workers identify common issues, informing them about political and policy considerations, and shaping political debates. No organization representing working families today has anything remotely like the same reach, influence, or cohesion as American unions did during their halcyon years.

(p. 116):

Rising economic inequality, in short, has abetted political inequality, hardened the class divisions between the parties, and bolstered the GOP in particular. For well-off Americans, the political world is increasingly their oyster: They vote in high numbers, contribute with abandon, and happily watch as politicians compete for their favor. For less well-off Americans, the political world looks ever more forbidding. Largely neglected by the parties, reliant on the media and candidates for basic information, they have to work ever harder just to have their voices heard. And as the political influence of business and the well off has grown, the political influence of the Republican Party has grown, too.

(p. 141):

Indeed, while expensive lobbying has long been prevalent in Washington, it has recently exploded. The cost of direct lobbying -- personal contact with lawmakers -- has nearly doubled since 1997, to almost $2 billion per year. Indirect lobbying (such as telemarketing and issue advertising) raises the total to roughly triple that amount. Lobbying is a big and rapidly growing business. And it grows, presumably, because people with money think it's worth investing in. They wouldn't be writing bigger and bigger checks unless they expected that the added investment would more than pay for itself.

(p. 142):

As House Republicans worked on these deregulatory initiatives, reporters commented on the remarkable prominence of business lobbyists. Interest group representatives took up positions in committee staff offices, where they drafted legislative text on office computers, conducted briefings for congressional staff, and generally acted as expert consultants on the details of legislation. The picture was one of powerful interests, with huge financial stakes in proposed policies, dictating to elected officials. Yet DeLay's own comments at the time offer a revealing glimpse at a more complicated relationship. "You've got to understand, we are ideologues," DeLay told the reporter Elizabeth Drew. "We have an agenda. We have a philosophy. I want to repeal the Clean Air Act. No one came to me and said, 'Please repeal the Clean Air Act.' We say to the lobbyists, 'Help us.' We know what we want to do and we find the people to help us do that."

Indeed, there is much to suggest that the New Power Brokers have worked diligently to turn the stereotyped relationship between the lobbyists and the lobbied on its head. The most publicized example has been the "K Street Project," begun shortly after the sweeping victory of congressional Republicans in 1994. Unsurprisingly, DeLay and Norquist were at the center of this initiative, too. The K Street Project was designed to pressure lobbyists to adopt a more pronounced Republican slant in both their campaign contributions and their hiring practices. Using figures compiled by Norquist, DeLay called lobbyists into his office to discuss whether their contribution and hiring practices qualified them as "friendly" to the GOP. "If you want to play in our revolution," he announced, "you have to live by our rules."

(p. 159):

As [John] DiIulio noted in his confessional memo, "In eight months, I heard many, many staff discussions, but not three meaningful, substantive policy discussions. There were no actual policy white papers on domestic issues. There were, truth be told, only a couple of people in the West Wing who worried at all about policy substance and analysis. . . . Every modern presidency moves on the fly, but, on social policy and related issues, the lack of even basic policy knowledge, and the only casual interest in knowing more, was somewhat breathtaking." But perhaps DiIulio's most revealing revelation was who was in charge of policy design in the Bush White House -- not the Office of Management and Budget, not the White House policy staff, and certainly not the executive departments. Rather, all policy ran through one man, Karl Rove. "Little happens on any issue without Karl's okay, and, often, he supplies such policy substance as the administration puts out," wrote DiIluio. The reason? "The Republican base constituencies, including beltway libertarian policy elites and religious right leaders, trust him to keep Bush '43' from behavior like Bush '41' and moving too far to the center or inching at all center-left."

(pp. 176-177):

This economic and technological upheaval has dictated a sharp turn from "hard news" toward entertainment. Every story has to grab the viewer immediately, because a single dull moment risks the dreaded click of a remote control. As a result, stories have become shorter, and the emphasis has shifted to those that can best exploit the visual power of television: scandal, crime, celebrities, natural disasters, and "soft" news items like personal health and personal finance. What has been squeezed out is hard news, especially concerning relatively complex issues of policy or politics that require many words to explain and typically yield poor visuals. During the presidential campaign of 1968, candidates could expect to speak on camera for an average of forty seconds without interruption; two decades later, the average is just nine seconds. Not surprisingly, detailed discussions of policy that would allow voters to get a better sense of the stakes in ongoing political conflict fare especially poorly in this environment.

(pp. 177-178):

Certainly most newspapers provide very limited information related to the content of policy -- information that we have demonstrated is crucial for accountability. Consider how USA Today, the nation's largest circulation daily, covered the Bush tax cuts in 2001. We and a team of researchers examined every story written in the newspaper on the 2001 tax cuts. Recall again that this was the president's top domestic priority and the most important piece of domestic legislation in two decades. The stakes for Americans were huge. Appropriately, USA Today ran 78 stories about the tax cuts, many of them on the front page. But of those 78 stories, only 6 were primarily about the content of the legislation. Only one was about the remarkable distributional effects of the proposed changes in policy. Instead, the focus of reporting was the political saga: the president's efforts to rally support, the tactics of opponents, and the slow but steady march of the Republicans' agenda through Congress. The bastion of detailed reportage, the New York Times, performed noticeably better, but the same bias was evident. The Times ran 126 stories, almost a third on the front page. But almost 60 percent were principally on the politics of the plan, whereas only 7 stories focused on distributional issues. And, of course, most Americans are not getting their news from the New York Times.

(p. 197):

Whether sympathetic or hostile to organized labor's decline, Americans are conditioned to think of it as natural, even inevitable. As globalization spreads and the American workforce shifts from blue-collar manufacturing into new service industries, according to this common view, unions are gradually rendered obsolete. This conventional wisdom is simply false. All affluent democracies are undergoing these large social transitions. Most are actually more exposed to the forces of globalization than is the United States. But in many of these countries, rates of unionization have declined little if at all. And none has experienced the precipitous decline in unions experienced in the United States.

The scale of union decline in the United States cannot be explained by anything distinctive about the composition of the American workforce or patterns of American economic activity -- the United States is not, for instance, more "postindustrial" or "globalized" than other countries. Instead, the dramatic fall of unions most clearly reflects two distinctively American realities. The first is the acute difficulties that American unions have confronted in adapting to a new economic environment given their high levels of fragmentation and their very uneven geographic reach. These features have made it easier for employers to pit one group of workers against another and to move their activities -- or threaten to move their activities -- to areas where unions are weak or absent, whether inside or outside the United States.

The second reality is more overtly political,a nd it gets to the heart of the problem. The capacity of unions to organize depends on the rules governing collective bargaining, and these rules have grown steadily less favorable to their cause. Unions organize far more workers in other countries not just because workers there are more sympathetic to unions but also because the law makes it much easier for unions to organize. Over the past twenty or so years, in a wide range of settings, American employers have worked steadily and effectively to tilt the rules of collective bargaining in their favor, and they have received a very sympathetic ear from the Right.