Monday, January 28

Whatever happened to "Compassionate Conservatism?" Ultimately, it was easier to say than to do.

The Bush Who Got Away

AS George W. Bush prepares to deliver his final State of the Union address, it’s worth revisiting the first speech he gave to a joint session of Congress. His valedictory words tonight will provide an opportunity to reflect on the kind of president Mr. Bush was. The speech delivered seven years ago points to the very different sort of president he might have been.

Mr. Bush began his February 2001 address by hailing the new spirit of cooperation he hoped would characterize his relations with Congress. “Together we are changing the tone in the nation’s capital,” he declared. The new president’s top priority would be education. He intended to marry the liberal desire for more federal money to the conservative demand for higher standards.

The rest of the speech was similarly moderate in tone and substance. Mr. Bush planned to use part of the enormous fiscal surplus he inherited for a broad-based tax cut. But he also wanted to expand Medicare benefits, preserve Social Security, extend access to health care and protect the environment. He concluded with an exhortation to bipartisanship — in Spanish. “Juntos podemos,” he said. “Together we can.”

Mr. Bush seemed genuinely to want to be the kind of president indicated by that first address. He meant to build a broad coalition on the model of his governorship in Texas, where he worked closely with Democrats in the Legislature, made his chief cause correcting racial disparities in education, and was re-elected in 1998 by an almost 40 percentage point margin, including 27 percent of the black vote and at least a third of Latinos. I always sort of liked that George W. Bush. Whatever happened to him?

Mr. Bush never completely abandoned the compassionate conservatism we glimpsed that night seven years ago. His second speech to Congress, nine days after Sept. 11, 2001, reflected his instinctive response to the attacks, which was to appeal for national unity in a non-partisan manner. Mr. Bush’s third speech to Congress (his first formal State of the Union address, in 2002) is remembered for its reference to the “axis of evil.” But the president also boasted about his cooperation with such Democrats as George Miller and Ted Kennedy on education policy. His strongest emphasis was on public service. He proposed doubling the size of the Peace Corps and called on every American to commit at least 4,000 hours — two full working years — to community service.

The following year, in 2003, Mr. Bush pressed his case for invading Iraq and uttered the infamous 16 words (“The British government has learned that Saddam Hussein recently sought significant quantities of uranium from Africa”). But alongside that disingenuous indictment, Mr. Bush presented Congress with a new raft of centrist-minded initiatives: $450 million to minister to the needs of children of prisoners, $600 million to treat drug addicts, $1.2 billion for hydrogen-powered cars, $10 billion in new money to fight AIDS in Africa and the Caribbean.

And so on, in each subsequent speech. In 2004, Mr. Bush used weasel words to describe the missing Iraqi weapons of mass destruction. He claimed to have disrupted “dozens of weapons of mass destruction-related program activities.” But when he turned to domestic matters, the president unveiled a new science and math program for low-income students and a program to help former prisoners re-enter society. He included an eloquent plea for the kind of immigration reform that would “reflect our values and benefit our economy.”

To this day, Mr. Bush’s compassionate conservatism has never vanished completely. Some of Mr. Bush’s signature programs, like his initiative to provide AIDS drugs to Africans, have had meaningful effects. But others haven’t lived up to their rhetorical promise. What about that special training for defense lawyers in capital cases (pledged in his 2005 State of the Union address)? The initiative to encourage mentoring for at-risk children (2006)? The grants to extend health insurance coverage (2007)? Such gestures tended to linger in the air only as long as it took Mr. Bush to make them.

So often with Mr. Bush, compassionate government began and ended with the heartfelt public avowal. He was too distracted by war and foreign policy, and too bored by the processes of government to know if the people working for him were following through on his proposals.

And of course, Mr. Bush’s left hand acted as if it didn’t know what his right hand was doing. After his first year in office, Democrats burned by his political strategy of polarization were disinclined to work with him on shared goals.

The Compassionate Conservative will surely pay us a final visit tonight. He remains an appealing character, but a largely fictional one. I wonder how the last seven years might have turned out if he had actually existed. In the final year of a failed presidency, I bet Mr. Bush does too.

Jacob Weisberg, the editor of Slate, is the author of “The Bush Tragedy.”

Saturday, January 26

Waving Goodbye to Hegemony

January 27, 2008
NYT Magazine

Turn on the TV today, and you could be forgiven for thinking it’s 1999. Democrats and Republicans are bickering about where and how to intervene, whether to do it alone or with allies and what kind of world America should lead. Democrats believe they can hit a reset button, and Republicans believe muscular moralism is the way to go. It’s as if the first decade of the 21st century didn’t happen — and almost as if history itself doesn’t happen. But the distribution of power in the world has fundamentally altered over the two presidential terms of George W. Bush, both because of his policies and, more significant, despite them. Maybe the best way to understand how quickly history happens is to look just a bit ahead.

It is 2016, and the Hillary Clinton or John McCain or Barack Obama administration is nearing the end of its second term. America has pulled out of Iraq but has about 20,000 troops in the independent state of Kurdistan, as well as warships anchored at Bahrain and an Air Force presence in Qatar. Afghanistan is stable; Iran is nuclear. China has absorbed Taiwan and is steadily increasing its naval presence around the Pacific Rim and, from the Pakistani port of Gwadar, on the Arabian Sea. The European Union has expanded to well over 30 members and has secure oil and gas flows from North Africa, Russia and the Caspian Sea, as well as substantial nuclear energy. America’s standing in the world remains in steady decline.

Why? Weren’t we supposed to reconnect with the United Nations and reaffirm to the world that America can, and should, lead it to collective security and prosperity? Indeed, improvements to America’s image may or may not occur, but either way, they mean little. Condoleezza Rice has said America has no “permanent enemies,” but it has no permanent friends either. Many saw the invasions of Afghanistan and Iraq as the symbols of a global American imperialism; in fact, they were signs of imperial overstretch. Every expenditure has weakened America’s armed forces, and each assertion of power has awakened resistance in the form of terrorist networks, insurgent groups and “asymmetric” weapons like suicide bombers. America’s unipolar moment has inspired diplomatic and financial countermovements to block American bullying and construct an alternate world order. That new global order has arrived, and there is precious little Clinton or McCain or Obama could do to resist its growth.

The Geopolitical Marketplace

At best, America’s unipolar moment lasted through the 1990s, but that was also a decade adrift. The post-cold-war “peace dividend” was never converted into a global liberal order under American leadership. So now, rather than bestriding the globe, we are competing — and losing — in a geopolitical marketplace alongside the world’s other superpowers: the European Union and China. This is geopolitics in the 21st century: the new Big Three. Not Russia, an increasingly depopulated expanse run by; not an incoherent Islam embroiled in internal wars; and not India, lagging decades behind China in both development and strategic appetite. The Big Three make the rules — their own rules — without any one of them dominating. And the others are left to choose their suitors in this post-American world.

The more we appreciate the differences among the American, European and Chinese worldviews, the more we will see the planetary stakes of the new global game. Previous eras of balance of power have been among European powers sharing a common culture. The cold war, too, was not truly an “East-West” struggle; it remained essentially a contest over Europe. What we have today, for the first time in history, is a global, multicivilizational, multipolar battle.

In Europe’s capital, Brussels, technocrats, strategists and legislators increasingly see their role as being the global balancer between America and China. Jorgo Chatzimarkakis, a German member of the European Parliament, calls it “European patriotism.” The Europeans play both sides, and if they do it well, they profit handsomely. It’s a trend that will outlast both President Nicolas Sarkozy of France, the self-described “friend of America,” and Chancellor Angela Merkel of Germany, regardless of her visiting the Crawford ranch. It may comfort American conservatives to point out that Europe still lacks a common army; the only problem is that it doesn’t really need one. Europeans use intelligence and the police to apprehend radical Islamists, social policy to try to integrate restive Muslim populations and economic strength to incorporate the former Soviet Union and gradually subdue Russia. Each year European investment in Turkey grows as well, binding it closer to the E.U. even if it never becomes a member. And each year a new pipeline route opens transporting oil and gas from Libya, Algeria or Azerbaijan to Europe. What other superpower grows by an average of one country per year, with others waiting in line and begging to join?

Robert Kagan famously said that America hails from Mars and Europe from Venus, but in reality, Europe is more like Mercury — carrying a big wallet. The E.U.’s market is the world’s largest, European technologies more and more set the global standard and European countries give the most development assistance. And if America and China fight, the world’s money will be safely invested in European banks. Many Americans scoffed at the introduction of the euro, claiming it was an overreach that would bring the collapse of the European project. Yet today, Persian Gulf oil exporters are diversifying their currency holdings into euros, and President Mahmoud Ahmadinejad of Iran has proposed that OPEC no longer price its oil in “worthless” dollars. President Hugo Chávez of Venezuela went on to suggest euros. It doesn’t help that Congress revealed its true protectionist colors by essentially blocking the Dubai ports deal in 2006. With London taking over (again) as the world’s financial capital for stock listing, it’s no surprise that China’s new state investment fund intends to locate its main Western offices there instead of New York. Meanwhile, America’s share of global exchange reserves has dropped to 65 percent. Gisele Bündchen demands to be paid in euros, while Jay-Z drowns in 500 euro notes in a recent video. American soft power seems on the wane even at home.

And Europe’s influence grows at America’s expense. While America fumbles at nation-building, Europe spends its money and political capital on locking peripheral countries into its orbit. Many poor regions of the world have realized that they want the European dream, not the American dream. Africa wants a real African Union like the E.U.; we offer no equivalent. Activists in the Middle East want parliamentary democracy like Europe’s, not American-style presidential strongman rule. Many of the foreign students we shunned after 9/11 are now in London and Berlin: twice as many Chinese study in Europe as in the U.S. We didn’t educate them, so we have no claims on their brains or loyalties as we have in decades past. More broadly, America controls legacy institutions few seem to want — like the International Monetary Fund — while Europe excels at building new and sophisticated ones modeled on itself. The U.S. has a hard time getting its way even when it dominates summit meetings — consider the ill-fated Free Trade Area of the Americas — let alone when it’s not even invited, as with the new East Asian Community, the region’s answer to America’s Apec.

The East Asian Community is but one example of how China is also too busy restoring its place as the world’s “Middle Kingdom” to be distracted by the Middle Eastern disturbances that so preoccupy the United States. In America’s own hemisphere, from Canada to Cuba to Chávez’s Venezuela, China is cutting massive resource and investment deals. Across the globe, it is deploying tens of thousands of its own engineers, aid workers, dam-builders and covert military personnel. In Africa, China is not only securing energy supplies; it is also making major strategic investments in the financial sector. The whole world is abetting China’s spectacular rise as evidenced by the ballooning share of trade in its gross domestic product — and China is exporting weapons at a rate reminiscent of the Soviet Union during the cold war, pinning America down while filling whatever power vacuums it can find. Every country in the world currently considered a rogue state by the U.S. now enjoys a diplomatic, economic or strategic lifeline from China, Iran being the most prominent example.

Without firing a shot, China is doing on its southern and western peripheries what Europe is achieving to its east and south. Aided by a 35 million-strong ethnic Chinese diaspora well placed around East Asia’s rising economies, a Greater Chinese Co-Prosperity Sphere has emerged. Like Europeans, Asians are insulating themselves from America’s economic uncertainties. Under Japanese sponsorship, they plan to launch their own regional monetary fund, while China has slashed tariffs and increased loans to its Southeast Asian neighbors. Trade within the India-Japan-Australia triangle — of which China sits at the center — has surpassed trade across the Pacific.

At the same time, a set of Asian security and diplomatic institutions is being built from the inside out, resulting in America’s grip on the Pacific Rim being loosened one finger at a time. From Thailand to Indonesia to Korea, no country — friend of America’s or not — wants political tension to upset economic growth. To the Western eye, it is a bizarre phenomenon: small Asian nation-states should be balancing against the rising China, but increasingly they rally toward it out of Asian cultural pride and an understanding of the historical-cultural reality of Chinese dominance. And in the former Soviet Central Asian countries — the so-called Stans — China is the new heavyweight player, its manifest destiny pushing its Han pioneers westward while pulling defunct microstates like Kyrgyzstan and Tajikistan, as well as oil-rich Kazakhstan, into its orbit. The Shanghai Cooperation Organization gathers these Central Asian strongmen together with China and Russia and may eventually become the “NATO of the East.”

The Big Three are the ultimate “Frenemies.” Twenty-first-century geopolitics will resemble nothing more than Orwell’s 1984, but instead of three world powers (Oceania, Eurasia and Eastasia), we have three hemispheric pan-regions, longitudinal zones dominated by America, Europe and China. As the early 20th-century European scholars of geopolitics realized, because a vertically organized region contains all climatic zones year-round, each pan-region can be self-sufficient and build a power base from which to intrude in others’ terrain. But in a globalized and shrinking world, no geography is sacrosanct. So in various ways, both overtly and under the radar, China and Europe will meddle in America’s backyard, America and China will compete for African resources in Europe’s southern periphery and America and Europe will seek to profit from the rapid economic growth of countries within China’s growing sphere of influence. Globalization is the weapon of choice. The main battlefield is what I call “the second world.”

The Swing States

There are plenty of statistics that will still tell the story of America’s global dominance: our military spending, our share of the global economy and the like. But there are statistics, and there are trends. To really understand how quickly American power is in decline around the world, I’ve spent the past two years traveling in some 40 countries in the five most strategic regions of the planet — the countries of the second world. They are not in the first-world core of the global economy, nor in its third-world periphery. Lying alongside and between the Big Three, second-world countries are the swing states that will determine which of the superpowers has the upper hand for the next generation of geopolitics. From Venezuela to Vietnam and Morocco to Malaysia, the new reality of global affairs is that there is not one way to win allies and influence countries but three: America’s coalition (as in “coalition of the willing”), Europe’s consensus and China’s consultative styles. The geopolitical marketplace will decide which will lead the 21st century.

The key second-world countries in Eastern Europe, Central Asia, South America, the Middle East and Southeast Asia are more than just “emerging markets.” If you include China, they hold a majority of the world’s foreign-exchange reserves and savings, and their spending power is making them the global economy’s most important new consumer markets and thus engines of global growth — not replacing the United States but not dependent on it either. I.P.O.’s from the so-called BRIC countries (Brazil, Russia, India, China) alone accounted for 39 percent of the volume raised globally in 2007, just one indicator of second-world countries’ rising importance in corporate finance — even after you subtract China. When Tata of India is vying to buy Jaguar, you know the landscape of power has changed. Second-world countries are also fast becoming hubs for oil and timber, manufacturing and services, airlines and infrastructure — all this in a geopolitical marketplace that puts their loyalty up for grabs to any of the Big Three, and increasingly to all of them at the same time. Second-world states won’t be subdued: in the age of network power, they won’t settle for being mere export markets. Rather, they are the places where the Big Three must invest heavily and to which they must relocate productive assets to maintain influence.

While traveling through the second world, I learned to see countries not as unified wholes but rather as having multiple, often disconnected, parts, some of which were on a path to rise into the first world while other, often larger, parts might remain in the third. I wondered whether globalization would accelerate these nations’ becoming ever more fragmented, or if governments would step up to establish central control. Each second-world country appeared to have a fissured personality under pressures from both internal forces and neighbors. I realized that to make sense of the second world, it was necessary to assess each country from the inside out.

Second-world countries are distinguished from the third world by their potential: the likelihood that they will capitalize on a valuable commodity, a charismatic leader or a generous patron. Each and every second-world country matters in its own right, for its economic, strategic or diplomatic weight, and its decision to tilt toward the United States, the E.U. or China has a strong influence on what others in its region decide to do. Will an American nuclear deal with India push Pakistan even deeper into military dependence on China? Will the next set of Arab monarchs lean East or West? The second world will shape the world’s balance of power as much as the superpowers themselves will.

In exploring just a small sample of the second world, we should start perhaps with the hardest case: Russia. Apparently stabilized and resurgent under the Kremlin-Gazprom oligarchy, why is Russia not a superpower but rather the ultimate second-world swing state? For all its muscle flexing, Russia is also disappearing. Its population decline is a staggering half million citizens per year or more, meaning it will be not much larger than Turkey by 2025 or so — spread across a land so vast that it no longer even makes sense as a country. Travel across Russia today, and you’ll find, as during Soviet times, city after city of crumbling, heatless apartment blocks and neglected elderly citizens whose value to the state diminishes with distance from Moscow. The forced Siberian migrations of the Soviet era are being voluntarily reversed as children move west to more tolerable and modern climes. Filling the vacuum they have left behind are hundreds of thousands of Chinese, literally gobbling up, plundering, outright buying and more or less annexing Russia’s Far East for its timber and other natural resources. Already during the cold war it was joked that there were “no disturbances on the Sino-Finnish border,” a prophecy that seems ever closer to fulfillment.

Russia lost its western satellites almost two decades ago, and Europe, while appearing to be bullied by Russia’s oil-dependent diplomacy, is staging a long-term buyout of Russia, whose economy remains roughly the size of France’s. The more Europe gets its gas from North Africa and oil from Azerbaijan, the less it will rely on Russia, all the while holding the lever of being by far Russia’s largest investor. The European Bank for Reconstruction and Development provides the kinds of loans that help build an alternative, less corrupt private sector from below, while London and Berlin welcome Russia’s billionaires, allowing the likes of Boris Berezovsky to openly campaign against Putin. The E.U. and U.S. also finance and train a pugnacious second-world block of Baltic and Balkan nations, whose activists agitate from Belarus to Uzbekistan. Privately, some E.U. officials say that annexing Russia is perfectly doable; it’s just a matter of time. In the coming decades, far from restoring its Soviet-era might, Russia will have to decide whether it wishes to exist peacefully as an asset to Europe or the alternative — becoming a petro-vassal of China.

Turkey, too, is a totemic second-world prize advancing through crucial moments of geopolitical truth. During the cold war, NATO was the principal vehicle for relations with Turkey, the West’s listening post on the southwestern Soviet border. But with Turkey’s bending over backward to avoid outright E.U. rejection, its refusal in 2003 to let the U.S. use Turkish territory as a staging point for invading Iraq marked a turning point — away from the U.S. “America always says it lobbies the E.U. on our behalf,” a Turkish strategic analyst in Ankara told me, “but all that does is make the E.U. more stringent. We don’t need that kind of help anymore.”

To be sure, Turkish pride contains elements of an aggressive neo-Ottomanism that is in tension with some E.U. standards, but this could ultimately serve as Europe’s weapon to project stability into Syria, Iraq and Iran — all of which Europe effectively borders through Turkey itself. Roads are the pathways to power, as I learned driving across Turkey in a beat-up Volkswagen a couple of summers ago. Turkey’s master engineers have been boring tunnels, erecting bridges and flattening roads across the country’s massive eastern realm, allowing it to assert itself over the Arab and Persian worlds both militarily and economically as Turkish merchants look as much East as West. Already joint Euro-Turkish projects have led to the opening of the Baku-Tbilisi-Ceyhan pipeline, with a matching rail line and highway planned to buttress European influence all the way to Turkey’s fraternal friend Azerbaijan on the oil-rich Caspian Sea.

It takes only one glance at Istanbul’s shimmering skyline to realize that even if Turkey never becomes an actual E.U. member, it is becoming ever more Europeanized. Turkey receives more than $20 billion in foreign investment and more than 20 million tourists every year, the vast majority of both from E.U. countries. Ninety percent of the Turkish diaspora lives in Western Europe and sends home another $1 billion per year in remittances and investments. This remitted capital is spreading growth and development eastward in the form of new construction ventures, kilim factories and schools. With the accession of Romania and Bulgaria to the E.U. a year ago, Turkey now physically borders the E.U. (beyond its narrow frontier with Greece), symbolizing how Turkey is becoming a part of the European superpower.

Western diplomats have a long historical familiarity, however dramatic and tumultuous, with Russia and Turkey. But what about the Stans: landlocked but resource-rich countries run by autocrats? Ever since these nations were flung into independence by the Soviet collapse, China has steadily replaced Russia as their new patron. Trade, oil pipelines and military exercises with China under the auspices of the Shanghai Cooperation Organization make it the new organizing pole for the region, with the U.S. scrambling to maintain modest military bases in the region. (Currently it is forced to rely far too much on Afghanistan after being booted, at China’s and Russia’s behest, from the Karshi Khanabad base in Uzbekistan in 2005.) The challenge of getting ahead in the strategically located and energy-rich Stans is the challenge of a bidding contest in which values seem not to matter. While China buys more Kazakh oil and America bids for defense contracts, Europe offers sustained investment and holds off from giving President Nursultan Nazarbayev the high-status recognition he craves. Kazakhstan considers itself a “strategic partner” of just about everyone, but tell that to the Big Three, who bribe government officials to cancel the others’ contracts and spy on one another through contract workers — all in the name of preventing the others from gaining mastery over the fabled heartland of Eurasian power.

Just one example of the lengths to which foreigners will go to stay on good terms with Nazarbayev is the current negotiation between a consortium of Western energy giants, including ENI and Exxon, and Kazakhstan’s state-run oil company over the development of the Caspian’s massive Kashagan oil field. At present, the consortium is coughing up at least $4 billion as well as a large hand-over of shares to compensate for delayed exploration and production — and Kazakhstan isn’t satisfied yet. The lesson from Kazakhstan, and its equally strategic but far less predictable neighbor Uzbekistan, is how fickle the second world can be, its alignments changing on a whim and causing headaches and ripple effects in all directions. To be distracted elsewhere or to lack sufficient personnel on the ground can make the difference between winning and losing a major round of the new great game.

The Big Three dynamic is not just some distant contest by which America ensures its ability to dictate affairs on the other side of the globe. Globalization has brought the geopolitical marketplace straight to America’s backyard, rapidly eroding the two-centuries-old Monroe Doctrine in the process. In truth, America called the shots in Latin America only when its southern neighbors lacked any vision of their own. Now they have at least two non-American challengers: China and Chávez. It was Simón Bolívar who fought ferociously for South America’s independence from Spanish rule, and today it is the newly renamed Bolivarian Republic of Venezuela that has inspired an entire continent to bootstrap its way into the global balance of power on its own terms. Hugo Chávez, the country’s clownish colonel, may last for decades to come or may die by the gun, but either way, he has called America’s bluff and won, changing the rules of North-South relations in the Western hemisphere. He has emboldened and bankrolled leftist leaders across the continent, helped Argentina and others pay back and boot out the I.M.F. and sponsored a continentwide bartering scheme of oil, cattle, wheat and civil servants, reminding even those who despise him that they can stand up to the great Northern power. Chávez stands not only on the ladder of high oil prices. He relies on tacit support from Europe and hardheaded intrusion from China, the former still the country’s largest investor and the latter feverishly repairing Venezuela’s dilapidated oil rigs while building its own refineries.

But Chávez’s challenge to the United States is, in inspiration, ideological, whereas the second-world shift is really structural. Even with Chávez still in power, it is Brazil that is reappearing as South America’s natural leader. Alongside India and South Africa, Brazil has led the charge in global trade negotiations, sticking it to the U.S. on its steel tariffs and to Europe on its agricultural subsidies. Geographically, Brazil is nearly as close to Europe as to America and is as keen to build cars and airplanes for Europe as it is to export soy to the U.S. Furthermore, Brazil, although a loyal American ally in the cold war, wasted little time before declaring a “strategic alliance” with China. Their economies are remarkably complementary, with Brazil shipping iron ore, timber, zinc, beef, milk and soybeans to China and China investing in Brazil’s hydroelectric dams, steel mills and shoe factories. Both China and Brazil’s ambitions may soon alter the very geography of their relations, with Brazil leading an effort to construct a Trans-Oceanic Highway from the Amazon through Peru to the Pacific Coast, facilitating access for Chinese shipping tankers. Latin America has mostly been a geopolitical afterthought over the centuries, but in the 21st century, all resources will be competed for, and none are too far away.

The Middle East — spanning from Morocco to Iran — lies between the hubs of influence of the Big Three and has the largest number of second-world swing states. No doubt the thaw with Libya, brokered by America and Britain after Muammar el-Qaddafi declared he would abandon his country’s nuclear pursuits in 2003, was partly motivated by growing demand for energy from a close Mediterranean neighbor. But Qaddafi is not selling out. He and his advisers have astutely parceled out production sharing agreements to a balanced assortment of American, European, Chinese and other Asian oil giants. Mindful of the history of Western oil companies’ exploitation of Arabia, he — like Chávez in Venezuela and Nazarbayev in Kazakhstan — has also cleverly ratcheted up the pressure on foreigners to share more revenue with the regime by tweaking contracts, rounding numbers liberally and threatening expropriation. What I find in virtually every Arab country is not such nationalism, however, but rather a new Arabism aimed at spreading oil wealth within the Arab world rather than depositing it in the United States as in past oil booms. And as Egypt, Syria and other Arab states receive greater investment from the Persian Gulf and start spending more on their own, they, too, become increasingly important second-world players who can thwart the U.S.

Saudi Arabia, for quite some years to come still the planet’s leading oil producer, is a second-world prize on par with Russia and equally up for grabs. For the past several decades, America’s share of the foreign direct investment into the kingdom decisively shaped the country’s foreign policy, but today the monarchy is far wiser, luring Europe and Asia to bring their investment shares toward a third each. Saudi Arabia has engaged Europe in an evolving Persian Gulf free-trade area, while it has invested close to $1 billion in Chinese oil refineries. Make no mistake: America was never all powerful only because of its military dominance; strategic leverage must have an economic basis. A major common denominator among key second-world countries is the need for each of the Big Three to put its money where its mouth is.

For all its historical antagonism with Saudi Arabia, Iran is playing the same swing-state game. Its diplomacy has not only managed to create discord among the U.S. and E.U. on sanctions; it has also courted China, nurturing a relationship that goes back to the Silk Road. Today Iran represents the final square in China’s hopscotch maneuvering to reach the Persian Gulf overland without relying on the narrow Straits of Malacca. Already China has signed a multibillion-dollar contract for natural gas from Iran’s immense North Pars field, another one for construction of oil terminals on the Caspian Sea and yet another to extend the Tehran metro — and it has boosted shipment of ballistic-missile technology and air-defense radars to Iran. Several years of negotiation culminated in December with Sinopec sealing a deal to develop the Yadavaran oil field, with more investments from China (and others) sure to follow. The longer International Atomic Energy Agency negotiations drag on, the more likely it becomes that Iran will indeed be able to stay afloat without Western investment because of backing from China and from its second-world friends — without giving any ground to the West.

Interestingly, it is precisely Muslim oil-producing states — Libya, Saudi Arabia, Iran, (mostly Muslim) Kazakhstan, Malaysia — that seem the best at spreading their alignments across some combination of the Big Three simultaneously: getting what they want while fending off encroachment from others. America may seek Muslim allies for its image and the “war on terror,” but these same countries seem also to be part of what Samuel Huntington called the “Confucian-Islamic connection.” What is more, China is pulling off the most difficult of superpower feats: simultaneously maintaining positive ties with the world’s crucial pairs of regional rivals: Venezuela and Brazil, Saudi Arabia and Iran, Kazakhstan and Uzbekistan, India and Pakistan. At this stage, Western diplomats have only mustered the wherewithal to quietly denounce Chinese aid policies and value-neutral alliances, but they are far from being able to do much of anything about them.

This applies most profoundly in China’s own backyard, Southeast Asia. Some of the most dynamic countries in the region Malaysia, Thailand and Vietnam are playing the superpower suitor game with admirable savvy. Chinese migrants have long pulled the strings in the region’s economies even while governments sealed defense agreements with the U.S. Today, Malaysia and Thailand still perform joint military exercises with America but also buy weapons from, and have defense treaties with, China, including the Treaty of Amity and Cooperation by which Asian nations have pledged nonaggression against one another. (Indonesia, a crucial American ally during the cold war, has also been forming defense ties with China.) As one senior Malaysian diplomat put it to me, without a hint of jest, “Creating a community is easy among the yellow and the brown but not the white.” Tellingly, it is Vietnam, because of its violent histories with the U.S. and China, which is most eager to accept American defense contracts (and a new Intel microchip plant) to maintain its strategic balance. Vietnam, like most of the second world, doesn’t want to fall into any one superpower’s sphere of influence.

The Anti-Imperial Belt

The new multicolor map of influence — a Venn diagram of overlapping American, Chinese and European influence — is a very fuzzy read. No more “They’re with us” or “He’s our S.O.B.” Mubarak, Musharraf, Malaysia’s Mahathir and a host of other second-world leaders have set a new standard for manipulative prowess: all tell the U.S. they are its friend while busily courting all sides.

What is more, many second-world countries are confident enough to form anti-imperial belts of their own, building trade, technology and diplomatic axes across the (second) world from Brazil to Libya to Iran to Russia. Indeed, Russia has stealthily moved into position to construct Iran’s Bushehr nuclear reactor, putting it firmly in the Chinese camp on the Iran issue, while also offering nuclear reactors to Libya and arms to Venezuela and Indonesia. Second-world countries also increasingly use sovereign-wealth funds (often financed by oil) worth trillions of dollars to throw their weight around, even bullying first-world corporations and markets. The United Arab Emirates (particularly as represented by their capital, Abu Dhabi), Saudi Arabia and Russia are rapidly climbing the ranks of foreign-exchange holders and are hardly holding back in trying to buy up large shares of Western banks (which have suddenly become bargains) and oil companies. Singapore’s sovereign-wealth fund has taken a similar path. Meanwhile, Saudi Arabia plans an international investment fund that will dwarf Abu Dhabi’s. From Switzerland to Citigroup, a reaction is forming to limit the shares such nontransparent sovereign-wealth funds can control, showing just how quickly the second world is rising in the global power game.

To understand the second world, you have to start to think like a second-world country. What I have seen in these and dozens of other countries is that globalization is not synonymous with Americanization; in fact, nothing has brought about the erosion of American primacy faster than globalization. While European nations redistribute wealth to secure or maintain first-world living standards, on the battlefield of globalization second-world countries’ state-backed firms either outhustle or snap up American companies, leaving their workers to fend for themselves. The second world’s first priority is not to become America but to succeed by any means necessary.

The Non-American World

Karl Marx and Max Weber both chastised Far Eastern cultures for being despotic, agrarian and feudal, lacking the ingredients for organizational success. Oswald Spengler saw it differently, arguing that mankind both lives and thinks in unique cultural systems, with Western ideals neither transferable nor relevant. Today the Asian landscape still features ancient civilizations but also by far the most people and, by certain measures, the most money of any region in the world. With or without America, Asia is shaping the world’s destiny — and exposing the flaws of the grand narrative of Western civilization in the process.

The rise of China in the East and of the European Union within the West has fundamentally altered a globe that recently appeared to have only an American gravity — pro or anti. As Europe’s and China’s spirits rise with every move into new domains of influence, America’s spirit is weakened. The E.U. may uphold the principles of the United Nations that America once dominated, but how much longer will it do so as its own social standards rise far above this lowest common denominator? And why should China or other Asian countries become “responsible stakeholders,” in former Deputy Secretary of State Robert Zoellick’s words, in an American-led international order when they had no seat at the table when the rules were drafted? Even as America stumbles back toward multilateralism, others are walking away from the American game and playing by their own rules.

The self-deluding universalism of the American imperium — that the world inherently needs a single leader and that American liberal ideology must be accepted as the basis of global order — has paradoxically resulted in America quickly becoming an ever-lonelier superpower. Just as there is a geopolitical marketplace, there is a marketplace of models of success for the second world to emulate, not least the Chinese model of economic growth without political liberalization (itself an affront to Western modernization theory). As the historian Arnold Toynbee observed half a century ago, Western imperialism united the globe, but it did not assure that the West would dominate forever — materially or morally. Despite the “mirage of immortality” that afflicts global empires, the only reliable rule of history is its cycles of imperial rise and decline, and as Toynbee also pithily noted, the only direction to go from the apogee of power is down.

The web of globalization now has three spiders. What makes America unique in this seemingly value-free contest is not its liberal democratic ideals — which Europe may now represent better than America does — but rather its geography. America is isolated, while Europe and China occupy two ends of the great Eurasian landmass that is the perennial center of gravity of geopolitics. When America dominated NATO and led a rigid Pacific alliance system with Japan, South Korea, Australia and Thailand, it successfully managed the Herculean task of running the world from one side of it. Now its very presence in Eurasia is tenuous; it has been shunned by the E.U. and Turkey, is unwelcome in much of the Middle East and has lost much of East Asia’s confidence. “Accidental empire” or not, America must quickly accept and adjust to this reality. Maintaining America’s empire can only get costlier in both blood and treasure. It isn’t worth it, and history promises the effort will fail. It already has.

Would the world not be more stable if America could be reaccepted as its organizing principle and leader? It’s very much too late to be asking, because the answer is unfolding before our eyes. Neither China nor the E.U. will replace the U.S. as the world’s sole leader; rather all three will constantly struggle to gain influence on their own and balance one another. Europe will promote its supranational integration model as a path to resolving Mideast disputes and organizing Africa, while China will push a Beijing consensus based on respect for sovereignty and mutual economic benefit. America must make itself irresistible to stay in the game.

I believe that a complex, multicultural landscape filled with transnational challenges from terrorism to global warming is completely unmanageable by a single authority, whether the United States or the United Nations. Globalization resists centralization of almost any kind. Instead, what we see gradually happening in climate-change negotiations (as in Bali in December) — and need to see more of in the areas of preventing nuclear proliferation and rebuilding failed states — is a far greater sense of a division of labor among the Big Three, a concrete burden-sharing among them by which they are judged not by their rhetoric but the responsibilities they fulfill. The arbitrarily composed Security Council is not the place to hash out such a division of labor. Neither are any of the other multilateral bodies bogged down with weighted voting and cacophonously irrelevant voices. The big issues are for the Big Three to sort out among themselves.

Less Can Be More

So let’s play strategy czar. You are a 21st-century Kissinger. Your task is to guide the next American president (and the one after that) from the demise of American hegemony into a world of much more diffuse governance. What do you advise, concretely, to mitigate the effects of the past decade’s policies — those that inspired defiance rather than cooperation — and to set in motion a virtuous circle of policies that lead to global equilibrium rather than a balance of power against the U.S.?

First, channel your inner J.F.K. You are president, not emperor. You are commander in chief and also diplomat in chief. Your grand strategy is a global strategy, yet you must never use the phrase “American national interest.” (It is assumed.) Instead talk about “global interests” and how closely aligned American policies are with those interests. No more “us” versus “them,” only “we.” That means no more talk of advancing “American values” either. What is worth having is universal first and American second. This applies to “democracy” as well, where timing its implementation is as important as the principle itself. Right now, from the Middle East to Southeast Asia, the hero of the second world — including its democracies — is Lee Kuan Yew of Singapore.

We have learned the hard way that what others want for themselves trumps what we want for them — always. Neither America nor the world needs more competing ideologies, and moralizing exhortations are only useful if they point toward goals that are actually attainable. This new attitude must be more than an act: to obey this modest, hands-off principle is what would actually make America the exceptional empire it purports to be. It would also be something every other empire in history has failed to do.

Second, Pentagonize the State Department. Adm. William J. Fallon, head of Central Command (Centcom), not Robert Gates, is the man really in charge of the U.S. military’s primary operations. Diplomacy, too, requires the equivalent of geographic commands — with top-notch assistant secretaries of state to manage relations in each key region without worrying about getting on the daily agenda of the secretary of state for menial approvals. Then we’ll be ready to coordinate within distant areas. In some regions, our ambassadors to neighboring countries meet only once or twice a year; they need to be having weekly secure video-conferences. Regional institutions are thriving in the second world — think Mercosur (the South American common market), the Association of Southeast Asian Nations (Asean), the Gulf Cooperation Council in the Persian Gulf. We need high-level ambassadors at those organizations too. Taken together, this allows us to move beyond, for example, the current Millennium Challenge Account — which amounts to one-track aid packages to individual countries already going in the right direction — toward encouraging the kind of regional cooperation that can work in curbing both terrorism and poverty. Only if you think regionally can a success story have a demonstration effect. This approach will be crucial to the future of the Pentagon’s new African command. (Until last year, African relations were managed largely by European command, or Eucom, in Germany.) Suspicions of America are running high in Africa, and a country-by-country strategy would make those suspicions worse. Finally, to achieve strategic civilian-military harmonization, we have to first get the maps straight. The State Department puts the Stans in the South and Central Asia bureau, while the Pentagon puts them within the Middle-East-focused Centcom. The Chinese divide up the world the Pentagon’s way; so, too, should our own State Department.

Third, deploy the marchmen. Europe is boosting its common diplomatic corps, while China is deploying retired civil servants, prison laborers and Chinese teachers — all are what the historian Arnold Toynbee called marchmen, the foot-soldiers of empire spreading values and winning loyalty. There are currently more musicians in U.S. military marching bands than there are Foreign Service officers, a fact not helped by Congress’s decision to effectively freeze growth in diplomatic postings. In this context, Condoleezza Rice’s “transformational diplomacy” is a myth: we don’t have enough diplomats for core assignments, let alone solo hardship missions. We need a Peace Corps 10 times its present size, plus student exchanges, English-teaching programs and hands-on job training overseas — with corporate sponsorship.

That’s right. In true American fashion, we must build a diplomatic-industrial complex. Europe and China all but personify business-government collusion, so let State raise money from Wall Street as it puts together regional aid and investment packages. American foreign policy must be substantially more than what the U.S. government directs. After all, the E.U. is already the world’s largest aid donor, and China is rising in the aid arena as well. Plus, each has a larger population than the U.S., meaning deeper benches of recruits, and are not political targets in the present political atmosphere the way Americans abroad are. The secret weapon must be the American citizenry itself. American foundations and charities, not least the Gates and Ford Foundations, dwarf European counterparts in their humanitarian giving; if such private groups independently send more and more American volunteers armed with cash, good will and local knowledge to perform “diplomacy of the deed,” then the public diplomacy will take care of itself.

Fourth, make the global economy work for us. By resurrecting European economies, the Marshall Plan was a down payment on even greater returns in terms of purchasing American goods. For now, however, as the dollar falls, our manufacturing base declines and Americans lose control of assets to wealthier foreign funds, our scientific education, broadband access, health-care, safety and a host of other standards are all slipping down the global rankings. Given our deficits and political gridlock, the only solution is to channel global, particularly Asian, liquidity into our own public infrastructure, creating jobs and technology platforms that can keep American innovation ahead of the pack. Globalization apologizes to no one; we must stay on top of it or become its victim.

Fifth, convene a G-3 of the Big Three. But don’t set the agenda; suggest it. These are the key issues among which to make compromises and trade-offs: climate change, energy security, weapons proliferation and rogue states. Offer more Western clean technology to China in exchange for fewer weapons and lifelines for the Sudanese tyrants and the Burmese junta. And make a joint effort with the Europeans to offer massive, irresistible packages to the people of Iran, Uzbekistan and Venezuela — incentives for eventual regime change rather than fruitless sanctions. A Western change of tone could make China sweat. Superpowers have to learn to behave, too.

Taken together, all these moves could renew American competitiveness in the geopolitical marketplace — and maybe even prove our exceptionalism. We need pragmatic incremental steps like the above to deliver tangible gains to people beyond our shores, repair our reputation, maintain harmony among the Big Three, keep the second world stable and neutral and protect our common planet. Let’s hope whoever is sworn in as the next American president understands this.

Parag Khanna is a senior research fellow in the American Strategy Program of the New America Foundation. This essay is adapted from his book, “The Second World: Empires and Influence in the New Global Order,” to be published by Random House in March.

Friday, January 25

Crashing the Subprime Party

Crashing the Subprime Party
How the feds stopped the states from averting the lending mess.
By Nicholas Bagley
Posted Thursday, Jan. 24, 2008, at 11:19 PM ET

As the federal government scurries to prevent the subprime mortgage crisis from sending the economy into a deep recession, many of us are asking why it waited so long to intervene. As it turns out, the government wasn't exactly sitting on its hands. Instead, for reasons that now appear hopelessly shortsighted, an obscure federal agency torpedoed legislation from a handful of states that would have made institutional investors far charier of buying mortgage loans that were likely to go belly-up. If the legislation had been permitted to go into effect, the crisis we now face would probably look a lot less grim. The right question, then, is not why the feds did so little. It's why they did so much.
Historically, few lenders would make subprime loans—that is, mortgage loans to borrowers with poor credit. The risk of default was simply too great. For a variety of reasons during the 1990s, however, major institutional players became more willing to purchase subprime loans as investments. Those loans would be pooled with similar subprime loans, and slices of that pool would be bought and sold as mortgage-backed securities. With the rise of this new secondary market, a lender could issue a subprime loan and immediately sell its interest in that loan for a lump sum. The ready flow of capital from the secondary mortgage market led, predictably, to an explosion in subprime lending. Unscrupulous lenders could reap the greatest profits by issuing subprime loans packed with unfavorable terms and subject to exorbitant interest rates, and only then selling them for cold, hard cash. A rash of borrowers found themselves saddled with predatory loans they had no hope of paying off.

To combat this surge in predatory lending, several state legislatures decided to stanch the flow of easy credit to subprime lenders. In 2002, Georgia became the first state to tell players in the secondary mortgage market that they might be on the hook if they purchased loans deemed "predatory" under state law. This worked a dramatic change. Before, downstream owners of mortgage-backed securities might see the value of their investments drop, but that was generally the worst that could happen. Under the Georgia Fair Lending Act, however, players in the secondary mortgage market could face serious liability if they so much as touched a predatory loan. The AARP, which drafted the model legislation that formed the basis for the Georgia law, explained that imposing liability on downstream owners would "reduce significantly the amount of credit that is available to lenders who are not willing to ensure that the loans they finance are made in accordance with the law."

The secondary market has an extraordinarily difficult time, however, distinguishing predatory loans (bad) from appropriately priced subprime loans (good). Even if the line could be drawn with confidence, the market lacked the resources to gather the necessary information. As the General Accounting Office noted in its comprehensive review of predatory-lending legislation, "even the most stringent efforts cannot uncover some predatory loans."

Inevitably, then, the secondary mortgage market in Georgia's subprime loans ground to a halt. And that was the point: If buyers couldn't satisfy themselves that the loans they bought weren't predatory, they should take their money elsewhere. Georgia understood that impeding the capital flow to subprime loans might raise the cost of borrowing for some state residents—those who, for one reason or another, had poor credit but could and would repay high-priced loans. But Georgia judged that this was more than balanced by protection for its most vulnerable from the scourge of predatory lending and the wrenching costs associated with overpayment and eventual foreclosure. New York, New Jersey, and New Mexico made the same judgment and within two years had enacted their own versions of laws exposing downstream owners of loans to fines if they bought predatory loans.

That's when the feds came in. Some of the biggest players in the secondary mortgage market are national banks, and the states' efforts to curb predatory lending clashed with the banks' fervent desire to keep the market in subprime loans rolling. And so the national banks turned to the Treasury Department's Office of the Comptroller of the Currency. The OCC is a somewhat conflicted agency: While its primary regulatory responsibility is ensuring the safety and soundness of the national bank system, almost its entire budget comes from fees it imposes on the banks—meaning that its funding depends on keeping them happy. It was unsurprising, then, that the OCC leapt to attention when the national banks asked it to pre-empt the Georgia-like subprime laws on the grounds that they conflicted with federal banking law.

While the banks' legal arguments were thin, the OCC issued regulations in early 2004 nullifying the state laws as they applied to national banks. In part, the OCC reasoned that the states just got it wrong: As the then-comptroller explained in a speech to the Federalist Society, "We know that it's possible to deal effectively with predatory lending without putting impediments in the way of those who provide access to legitimate subprime credit." With the state laws nullified, national banks were free to engage in the sharp practices the states were hoping to stamp out. (Indeed, Georgia scuttled its law because it didn't want to give national banks a competitive advantage over its state institutions.) Facing intense pressure from subprime lenders and Wall Street, and left without a real chance of holding investors responsible for purchasing ill-advised loans, state legislatures gave up.

In retrospect, the OCC's decision looks boneheaded. What the OCC took to be shortsighted consumer-protection laws laden with hidden costs turned out to be prescient market-correcting reforms. It's impossible, of course, to know for sure what might have happened had the OCC stayed its hand. Subprime lenders have lobbied hard against the state laws, and the incipient legislation could have been strangled in its infancy anyway. But the bottom line is that, had the state laws been permitted to go into effect, investors would now be sitting on fewer subprime loans that will never be repaid. The subprime catastrophe might have been more like a mini-crisis.

The feds really should have known better. Yet they ignored a basic principle—that no level of government has a monopoly on good policy—to brush aside state legislatures' thoughtful efforts to protect their citizens from rapacious lenders. As the feds move to clean up the subprime mess, it's worth remembering that they helped create it. Maybe the next time around, they'll remember that sometimes the states know best.

A version of this article also appears in the Washington Post op-ed page.

Nicholas Bagley is an attorney in Washington, D.C.
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Copyright 2008 Washingtonpost.Newsweek Interactive Co. LLC

Tuesday, January 22

The Blight that is Still with Us

The political mantra this year is “change.” But South Carolina, where the Confederate flag still flies on the grounds of the State Capitol, is a disturbing example of how difficult it is for people of good will to dispose of the toxic layers of bigotry that have accumulated over several long centuries.

On Saturday, in a cold, steady rain, voters turned out for the Republican primary. Nearly all of them — close to 100 percent — were white. At a dinner here Saturday night, I was reminded ruefully by one of the guests: “It used to be the Democratic Party that was the white man’s party in South Carolina. Now it’s the G.O.P. The black people vote next Saturday.”

They still honor Benjamin Tillman down here, which is very much like honoring a malignant tumor. A statue of Tillman, who was known as Pitchfork Ben, is on prominent display outside the statehouse.

Tillman served as governor and U.S. senator in the late 19th and early 20th centuries. A mortal enemy of black people, he bragged that he and his followers had disenfranchised “as many as we could,” and he publicly defended the murder of blacks.

In a speech on the Senate floor, he declared:

“We of the South have never recognized the right of the negro to govern white men, and we never will. We have never believed him to be the equal of the white man, and we will not submit to his gratifying his lust on our wives and daughters without lynching him.”

Real change is more than problematic in a state so warped by its past that it can continue to officially admire a figure like Tillman.

The host of a dinner party I attended was Bud Ferillo, a white public relations executive who produced and directed a documentary called “Corridor of Shame” to call attention to the terrible neglect of rural schools in South Carolina.

If you were to walk into some of those schools — which are spread along a crescent-shaped corridor on either side of Interstate 95 from the southern edge of North Carolina to the northern edge of Georgia — you might forget that you were in the United States.

A former South Carolina commerce secretary, Charles Way, talks in the film about the time his car broke down near one of these schools and he went inside to use a phone.

“I just couldn’t really believe my eyes,” he said. “It was the most deplorable building condition that I’ve ever seen in my life. How the hell somebody could teach in an environment like that is really just beyond me.”

Among many other problems, ancient plumbing has resulted in raw sewage backing up into some schools, bringing in vermin and unbearable odors. The first school profiled in “Corridor of Shame” was built in 1896.

Some 700,000 students attend these rural schools, and they are being left behind in droves. One principal complained about nonfiction books in the school library that dated back to the 1940s and ’50s, including a volume that promised “one day man will land on the moon.”

The rural schools in South Carolina are symptoms of a much wider problem. Only about 50 percent of the state’s children graduate from high school.

There has been a spasm of political campaigning here, but that will soon end. In presidential elections, South Carolina is reliably Republican. A state with Pitchfork Ben standing guard at the Capitol hardly could be otherwise.

The Democrats are here this week fighting over the black vote. It’s ironic that in a state so racially polarized, there is so little serious discussion among the candidates of the race issue.

Senator Barack Obama, with his message of unity and healing (and not wanting to be seen solely as a black candidate), has tried to avoid addressing the issue of race head-on. Bill and Hillary Clinton have worked hard at turning that posture into a negative, aggressively courting the black vote, while at the same time spotlighting (directly and through surrogates) the fact that Mr. Obama is black.

The result has been a churning of the issue of race to no constructive effect, even during last night’s debate sponsored by the Congressional Black Caucus Institute.

This was probably inevitable. In South Carolina the Confederate flag is flying right out there in the open and Pitchfork Ben is on display for all to see. But in most other places, the hostility to blacks remains on the down-low. No one wants to deal with it.

Despite big and important advances over the past several decades, including Senator Obama’s crossover campaign, racism remains alive and well in much of the country. And yet no one — not Bill Clinton, the man touted (absurdly) as the first black president; or Hillary Clinton, who’s running for president; or Barack Obama, the first black person with a real shot at the White House — is willing to talk honestly and openly about it.

Monday, January 21

Against Independent Voters

Stanley Fish

We’re in that season now when we hear the same things being said over and over again, and nothing is said more often by political pundits than this election (it doesn’t matter which one) will be decided by independent voters. Accompanying this announcement is the judgment – sometimes implicit, sometimes explicit – that this state of affairs is to be welcomed, even encouraged: it’s good that the independent voters are making themselves heard and forcing candidates to think outside their partisan boxes. And this judgment itself implies another: independent voters are better, in the sense of being more reflective and less ideological, than voters who identify themselves strongly with one or the other of the two major parties. The assumption is that if we were all independent voters, the political process would be in much better shape.

This seems to me to be a dubious proposition, especially if the word “political” in the phrase “political process” is taken seriously. Those who yearn for government without politics always invoke abstract truths and moral visions (the good life, the fair society, the just commonwealth) with which no one is likely to disagree because they have no content. But sooner rather than later someone gives these abstractions content, and when that happens, definitional disputes break out immediately, and after definitional disputes come real disputes, the taking of sides, the applying of labels (both the self-identifying kind and the accusing kind) and, pretty soon, the demonization of the other. In short, politics, which is what independent voters hate.

They tend to agree with (and quote) George Washington. In his farewell address (1796), Washington spoke of the “baneful effects of the spirit of party,” which includes “ill founded jealousies and false alarms,” “the animosity of one part against another” and the propagation of the “belief that there is a real difference of local interests and views.” Parties, he concluded, “make the public administration the mirror of the ill-concerted…projects of faction rather than the organ of consistent and wholesome plans digested by common counsels and modified by mutual interests.”

Consistent, wholesome, common vs. conflicted, divided, factional. Mutual interests – interest that are shared – are what we want rather than special interests. This is the rhetoric and vocabulary of the independent voter, for whom it is an article of faith that differences are inessential and that what unites us is larger and more important than what divides us. Why can’t we all just get along?

Washington himself knows why. The spirit of party, he says, “unfortunately is inseparable from our nature,” from our tendency, that is, to identify our passions with what is right and true. Factionalism is not a deviation from ordinary human behavior; it is ordinary human behavior. (That is why checks and balances figure so prominently in The Federalist Papers.) Human beings are situated creatures; they see things not from a God’s-eye point of view, but from the point of view of the beliefs, allegiances, aspirations and fears they bring with them into the ballot box.

Floating independently above the fray and inhabiting the marketplace of ideas as if were a shopping bazaar rather than a battlefield is an unnatural condition. The natural condition is to be political. To be political is to believe something, and to believe something is to believe that those who believe something else are wrong, and after all you don’t want people who believe (and would do) the wrong things running your government. So you organize with other like-minded folks and smite the enemy (verbally) hip and thigh. You join a party.

What do independent voters do? Well, most of all, they talk about the virtue of being an independent voter. When they are asked to explain what that means, they say, “I can’t stand the partisan atmosphere that has infected our politics” (forgetting that politics is partisan by definition); or “we like to make up our own minds and don’t want anyone telling us what to do (as if Democrats and Republicans were sheep eager to go over whatever cliff the leadership brings them to) or (and this was a favorite of those interviewed in Iowa and New Hampshire), “We vote the person rather than the party.”

Now, voting the person rather than the party is about the dumbest thing you can do for a reason I elaborated in an earlier column (“Parties Matter”). The party affiliation of a candidate tells you what kind of appointments he or she is likely to make. Do you think that regulations of industry stifle productivity and damage the economy, or do you think that unregulated industries endanger the environment? Do you think that illegal immigrants are just that – illegal – and therefore should be deported when detected, or do you think that we should figure out a way to legitimize their status and make the best of what has already happened? Do you think that Iran poses a threat that must be countered before it is too late, or do you think that military action should be resorted to only after every avenue of diplomacy has been exhausted, even if it takes years or decades?

If you feel strongly about these and other matters, it is incumbent upon you to take into consideration the positions of the two major parties, for the successful candidate can be counted on to appoint to the offices responsible for answering these questions men and women whose views reflect the party’s platform. Voting the person, however attractive or impressive he or she may be, could very well get you four years of policies you detest. In other words, policy differences are party differences, and it is hard to see how you could be a responsible voter if you held your nose at a whiff of party politics. If you are really interested in the way things should go in the country, come off the high pedestal and join the rest of us in the nurturing (and, yes, dirty) soil of the partisan free-for-all.

To this an independent voter might reply that the two-party structure is the problem, and if we could only elect an independent candidate, he or she wouldn’t be beholden to any party and could make appointments on the basis of merit. But even if this miracle were to occur, the parties would still be in control of federal and state legislative bodies, and in order to do anything at all, an independent president would have to negotiate with the very political forces he or she beat up on in the course of getting elected. (There goes independence.) And what leverage would a president in that position have?

In the end, there is nothing to be said for independent voters and a lot to be said against them. Remember, a bunch of them voted for Ralph Nader. Case closed.

Huckabee's "full-blooded and full-throated bellow of old-fashioned authentic racism" and the media's unusual silence

Why are the media ignoring Mike Huckabee's remarks about the Confederate flag?
By Christopher Hitchens

In this country, it seems that you can always get an argument going about "race" as long as it is guaranteed to be phony, but never when it is real. Almost every day brings news of full-dress media-oriented spats about Don Imus, Bob Grant, or the recent nonstory about how some golf show had managed to mention Tiger Woods and the word lynch in the same news cycle. The preceding week had involved some trivial but intense parsing of an exchange between Sens. Hillary Clinton and Barack Obama about Dr. Martin Luther King. But just let the real thing occur, with a full-blooded and full-throated bellow of old-fashioned authentic racism, and you can see the entire press refusing to cover it for fear of having to confront the real and unvarnished thing (and perhaps for reasons having to do with other "sensitivities" as well).

Gov. Mike Huckabee made the following unambiguously racist and demagogic appeal in Myrtle Beach, S.C., last week:

You don't like people from outside the state coming in and telling you what to do with your flag. In fact, if somebody came to Arkansas and told us what to do with our flag, we'd tell 'em what to do with the pole; that's what we'd do.

This is a straightforward racist appeal for the following reasons:

1) The South Carolina flag is a perfectly nice flag, featuring the palmetto plant, about which no "outsider" has ever offered any free advice.

2) The Confederate battle flag, to which Gov. Huckabee was alluding, was first flown over the South Carolina state capitol in 1962, as a deliberately belligerent riposte to the civil rights movement, and is not now, and never has been, the flag of that great state.

3) By a vote of both South Carolina houses in the year 2000, the Confederate battle flag ceased to be flown over the state capitol and now only waves (as quite possibly it should) over the memorial to fallen Confederate soldiers.

Thus, as well as crassly behaving exactly like someone "from outside the state coming in and telling you what to do with your flag," former Gov. Huckabee of Arkansas deliberately aligned himself with the rancorous minority who are still not reconciled to the idea that South Carolina may not officially consecrate racism and slavery and secession. "Your flag"? What an insult, not just to the descendants of slavery but to the many, many other loyalists and Unionists who fought and died to bring their state back into the Union. And what is the point of the "outside the state" slur? Wasn't this exactly what Gov. Orval Faubus of Arkansas used to say, as if to make it seem that all was hunky-dory in his own tight little dominion until them goddam "outside agitators" arrived? In the end, as Gov. Huckabee may or may not recall, the 101st Airborne Division, most of them "outsiders" not from Arkansas, had to be sent by a Republican president to integrate the schools of Little Rock. That was a lot of trouble and expense that the big-mouth rednecks put us all to, but it was worth it. It's insufferable to hear this glib idiot make a mockery of it now in order to try to get the Klan vote in South Carolina.

One might add a couple of other points. The political flag of the Confederacy—the so-called "Stars and Bars"—is one thing. The battle flag of the Confederate army; the most militant symbolic form that secession and slavery ever took, is quite another. Under this fiery cross of St. Andrew, the state of Pennsylvania was invaded and free Americans were rounded up and re-enslaved. Under this same cross, it was announced that any Union officer commanding freed-slave soldiers, or any of his men, would be executed if captured. (In other words, war crimes were boasted of in advance.) The 13 stars of the same flag include stars for two states—Kentucky and Missouri—that never did secede, and they thus express a clear ambition to conquer free and independent states. And this is the symbol that Huckabee, seeking to ingratiate himself with the lowest element and lowest common denominator, calls "your flag." You might as well do a cross-burning and have done with it, and we all know how the networks would react if some ignorant kids did that.

But when real political racism rears its head, our easily upset media falls oddly silent. Can you guess why? Of course you can. Gov. Huckabee is the self-anointed candidate of the simple and traditional Christian folk who hate smart-ass, educated, big-city types, and if you dare to attack him for his vulgarity and stupidity and bigotry, he will accuse you of prejudice in return. What he hopes is that his neo-Confederate sickness will become subsumed into easy chatter about his recipes for fried squirrel and his other folksy populist themes. (By the way, you owe it to yourselves to watch the exciting revelations about his squirrel-grilling past; and do examine his family Christmas card while you're at it.) But this drivel, it turns out, is all a slick cover for racist incitement, and it ought not to be given a free pass.

And not merely racist incitement. So slack is our grasp of history and principle that we seem unable to think of the Confederacy as other than "offensive" to blacks. But there are two Republican candidates in this election—the absurd and sinister Ron Paul being the other—who choose this crucial moment in our time to exalt those who attempted to destroy the Union by force, and those who solicited the help of foreign powers in order to do so, and whose treason led to the violent deaths of hundreds of thousands of Americans. Should their patriotism be questioned? I would say most definitely yes, and questioned repeatedly, at that, perhaps especially if they are seeking the nomination of the party of Lincoln.

In Washington, D.C., Gov. Huckabee has hired as smooth and silky a pair of big-city insiders as you could meet in a day's march: Ed Rollins and James Pinkerton. Elegant ornaments of many a past administration and many a well-heeled think tank (Pinkerton describes himself loftily as "a Burkean conservative and a Nixonian foreign-policy realist"), they know exactly what calculation lies behind their boss' smarmy appeals to the uneducated racists and losers and to the fools who believe that Adam and Eve were real (and recent) people. But do they endorse his street tactics as well? I, for one, would rather like to find out. Here's a genuine scandal about racism, and waddaya know? My great profession is absolutely determined to overlook it.

Christopher Hitchens is a columnist for Vanity Fair and the author of God Is Not Great: How Religion Poisons Everything.
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Why Obama is wrong to credit Reagan's "revolution"

Debunking the Reagan Myth

Historical narratives matter. That’s why conservatives are still writing books denouncing F.D.R. and the New Deal; they understand that the way Americans perceive bygone eras, even eras from the seemingly distant past, affects politics today.

And it’s also why the furor over Barack Obama’s praise for Ronald Reagan is not, as some think, overblown. The fact is that how we talk about the Reagan era still matters immensely for American politics.

Bill Clinton knew that in 1991, when he began his presidential campaign. “The Reagan-Bush years,” he declared, “have exalted private gain over public obligation, special interests over the common good, wealth and fame over work and family. The 1980s ushered in a Gilded Age of greed and selfishness, of irresponsibility and excess, and of neglect.”

Contrast that with Mr. Obama’s recent statement, in an interview with a Nevada newspaper, that Reagan offered a “sense of dynamism and entrepreneurship that had been missing.”

Maybe Mr. Obama was, as his supporters insist, simply praising Reagan’s political skills. (I think he was trying to curry favor with a conservative editorial board, which did in fact endorse him.) But where in his remarks was the clear declaration that Reaganomics failed?

For it did fail. The Reagan economy was a one-hit wonder. Yes, there was a boom in the mid-1980s, as the economy recovered from a severe recession. But while the rich got much richer, there was little sustained economic improvement for most Americans. By the late 1980s, middle-class incomes were barely higher than they had been a decade before — and the poverty rate had actually risen.

When the inevitable recession arrived, people felt betrayed — a sense of betrayal that Mr. Clinton was able to ride into the White House.

Given that reality, what was Mr. Obama talking about? Some good things did eventually happen to the U.S. economy — but not on Reagan’s watch.

For example, I’m not sure what “dynamism” means, but if it means productivity growth, there wasn’t any resurgence in the Reagan years. Eventually productivity did take off — but even the Bush administration’s own Council of Economic Advisers dates the beginning of that takeoff to 1995.

Similarly, if a sense of entrepreneurship means having confidence in the talents of American business leaders, that didn’t happen in the 1980s, when all the business books seemed to have samurai warriors on their covers. Like productivity, American business prestige didn’t stage a comeback until the mid-1990s, when the U.S. began to reassert its technological and economic leadership.

I understand why conservatives want to rewrite history and pretend that these good things happened while a Republican was in office — or claim, implausibly, that the 1981 Reagan tax cut somehow deserves credit for positive economic developments that didn’t happen until 14 or more years had passed. (Does Richard Nixon get credit for “Morning in America”?)

But why would a self-proclaimed progressive say anything that lends credibility to this rewriting of history — particularly right now, when Reaganomics has just failed all over again?

Like Ronald Reagan, President Bush began his term in office with big tax cuts for the rich and promises that the benefits would trickle down to the middle class. Like Reagan, he also began his term with an economic slump, then claimed that the recovery from that slump proved the success of his policies.

And like Reaganomics — but more quickly — Bushonomics has ended in grief. The public mood today is as grim as it was in 1992. Wages are lagging behind inflation. Employment growth in the Bush years has been pathetic compared with job creation in the Clinton era. Even if we don’t have a formal recession — and the odds now are that we will — the optimism of the 1990s has evaporated.

This is, in short, a time when progressives ought to be driving home the idea that the right’s ideas don’t work, and never have.

It’s not just a matter of what happens in the next election. Mr. Clinton won his elections, but — as Mr. Obama correctly pointed out — he didn’t change America’s trajectory the way Reagan did. Why?

Well, I’d say that the great failure of the Clinton administration — more important even than its failure to achieve health care reform, though the two failures were closely related — was the fact that it didn’t change the narrative, a fact demonstrated by the way Republicans are still claiming to be the next Ronald Reagan.

Now progressives have been granted a second chance to argue that Reaganism is fundamentally wrong: once again, the vast majority of Americans think that the country is on the wrong track. But they won’t be able to make that argument if their political leaders, whatever they meant to convey, seem to be saying that Reagan had it right.

Friday, January 18

'Have Not' Colleges Need New Ways to Compete With Rich Ones


Last month's announcement by Harvard University that it will eliminate loans and ask families making between $120,000 and $180,000 a year to pay no more than 10 percent of their incomes brought into bold relief a misguided debate that has erupted around other, less-elite private colleges' use of merit aid to attract students.

Many of the students who receive such aid from those private colleges come from affluent families, and, according to the critics, the awards ultimately result in less money for low-income students. Robert Kuttner, co-founder and co-editor of The American Prospect, has argued, for example, that colleges grant merit scholarships to top students as a way to improve SAT scores and, hence, institutional rankings in the survey published by U.S. News & World Report. Sam Allis, a Boston Globe columnist, takes the complaint a step further by characterizing such institutions as "merit-aid addicts" that "should enter a 12-step program to get morally clean and sober."

At first glance, that argument seems compelling. But upon reflection, it is both simplistic and misleading. Kuttner, Allis, and others are overlooking the economic imperatives driving financial-aid policy at institutions that are highly dependent on tuition revenue to survive — in other words, the great bulk of American private colleges.

Well-intentioned diatribes against the supposed overuse of merit aid often don't mention that the Ivies like Harvard and other elite institutions with huge endowments are already heavily discounting their tuitions by infusing their budgets with tens of thousands of endowment dollars. That allows them to not only offer far-richer financial-aid packages but to also set their sticker prices well below the true cost of the education they provide their students — who have access to better faculties (attracted by higher salaries), a wider array of courses, better libraries, and other amenities than less well-to-do colleges, with similar base sticker prices, can offer. Thus those wealthier institutions attract a disproportionate share of smart, rich kids — who later, as rich and powerful alumni, further feed those already bloated endowments by "bringing more sand to the beach."

Public universities that charge significantly lower tuitions to in-state residents can count on some degree of geographic insulation from competition for top-notch students. But most private colleges and universities have no such protection from the seductive blandishments of their elite, heavily endowed competitors.

In fact, nonelite private institutions are not necessarily granting so-called merit aid at the expense of need-based aid. Allocating more dollars to merit aid — a better term would be non-need-based aid — can, if done properly, actually provide more support for needy students, by filling classroom seats with students who have at least some capacity to pay a significant portion of their tuition bills. The additional revenue can then be used to support more generous aid for low-income students or to pay for more remedial services, better facilities, and more faculty resources. In some extreme cases, that approach can literally save a tuition-starved institution from closing — an outcome that everyone must agree would render it inaccessible to poor and wealthy students alike.

Indeed, using merit aid judiciously can be described as "strategic pricing." Like the airline that selectively discounts fares to avoid taking off with an empty seat, the college that selectively discounts its tuition to attract a student capable of paying some increment above direct costs — rather than see its fall semester "take off" with an empty classroom seat or one that contributes no revenue — is simply exercising prudent fiscal management.

At the same time, excessive or inappropriately applied discounting can seriously erode an institution's revenue and prevent it from meeting its enrollment goals. Using merit aid merely to make SAT numbers look good in the rankings, for example, can be self-defeating. We know of more than one college that has chased prestige by offering merit aid only to find the loss in revenue has undercut its ability to serve the very students that the aid has attracted.

Sadly, however, most colleges find themselves forced into deploying non-need-based aid whether they would like to or not. Why? Not because they want to give rich kids a free ride, but because of the inherent unfairness of a system that rewards the haves at the expense of the have-nots. And here we come to the crux of the problem. The haves and have-nots at issue are not families, but institutions.

What we now have is a kind of caste system in American higher education: Brahmin institutions — by virtue of their implicit, endowment-supported, non-need-based discount — are able to have their pick of the best candidates in every category of students, including minority students. Hidden from view, expanding year by year, that implicit discount is constantly widening the gap between the haves and have-nots.

About 50 private institutions now control more than half of college and university endowment money while educating fewer than 2 percent of the nation's students — a 2 percent that is disproportionately drawn from wealthy families. Such elite institutions are able to spend many millions of dollars on fancy new facilities that may not educate any additional students, while most other colleges across the country are experiencing belt tightening and deferred maintenance.

To put it bluntly, the massive endowments of elite universities confer on them an unassailable competitive advantage in the form of a hidden discount that forces the less well-endowed institutions to deploy merit aid in a scramble for a diminished pool of the best and most-diverse students. Unless those who decry the use of merit aid as "immoral" are willing to factor into their thinking such hidden discounts, they will continue to go after the wrong folks in making charges about poor moral choices. Plenty of solid data demonstrate how less wealthy colleges are able to use non-need-based aid to improve overall financial solvency and quality and diversity. Those colleges are simply taking on the highly endowed institutions at their own game and reducing elitist stratification in the process.

The wealthiest institutions would argue, of course, that because they are blessed with the luxury of more aid dollars they are already doing their share. And, in fairness, some of them are re-examining their policies to try to attract more low-income applicants. But there are not nearly enough spaces at the wealthiest institutions to meet the needs of the vast numbers of worthy have-not students.

Let's face it, serving the have-not students has become, by default, the disproportionate responsibility of the have-not private institutions and the public four-year and community colleges. Such institutions struggle to survive even without the added burden of financially needy students who are often more challenging to educate.

Why, then, should we criticize such private institutions for a savvy use of non-need-based aid? Their other choices are all too recognizable and not pretty. Water down the curriculum, reduce student workloads and inflate grades to attract and retain less academically ambitious but better-heeled students? Invest heavily (and incur costly debt-service burdens) to provide amenities like fitness centers and other nonacademic frills? Unfortunately, far too many colleges have been lured into compromising their academic principles in order to survive within a system that in many ways is rigged against them.

Instead of blaming the institutions — or even the third-party rankers like U.S. News — we should be talking about how to level the playing field in our higher-education system. We need to be open to new ideas, however unworkable they may, at first glance, appear.

For example, how about offering donors bigger tax breaks for gifts to private institutions with smaller endowments? Or maybe we should call for universities with huge endowments to share the wealth by partnering with less-well-endowed institutions to extend the benefits of a high-quality education to a broader array of students.

Better yet, let's encourage the wealthiest institutions (with the support of their donors) to get together, establish a private foundation, and support it with, say, one-third of the annual yield from their respective endowments. The foundation would distribute grants that increase the need-based financial-aid budgets at selected have-not private institutions. Consider the impact that would have: The combined endowments of the top 50 private institutions amount to around $180-billion. One-third of an assumed average 10-percent yield would be $6-billion a year. That would be enough to support full scholarships, at $30,000 on average, for 200,000 students — $10,000 scholarships for 600,000 students.

Some people will dismiss such an admittedly immodest proposal as a pipe dream. But judging from the rapidly growing number of voices reacting against the widening gap between the have and have-not institutions — evident in alumni who give to needy colleges rather than their own wealthy alma maters and in calls by policy makers for differential tax treatment of capital gains earned on exceptionally large endowments. At the very least, the have-not institutions should be empowered to compete in every way possible to be sure that the next $180-billion of endowment dollars are not as unfairly apportioned as the last.

Perhaps the time has come for the haves to deliver some of their abundant endowment sand to the rapidly eroding beaches of the have-nots.

John Maguire is chairman and founder of Maguire Associates, a higher-education market-research firm. Lawrence Butler is a senior consultant at the firm.
Section: Commentary
Volume 54, Issue 19, Page A33
Copyright © 2008 by The Chronicle of Higher Education

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Policy Makers Must Recognize Higher Education's 2-Tiered System


The news media have extensively documented how many college applicants receive rejection letters from the country's most-elite higher-education institutions. The coverage has focused on the effort and expense that students and their parents put forth, only to be turned away.

While many private colleges and universities have always been highly selective, what has changed is the degree of selectivity — at the Ivy Leagues and their ilk as well as at lesser-known institutions. Last year Princeton University rejected more than 90 percent of its applicants, and Stanford rejected 89.7 percent. Harvard turned down 1,100 students who scored 800 on the math portion of the SAT, while Yale reported rejecting several students who scored a perfect 2400 overall. Even Pitzer College got into the act, accepting only 26 percent of its applicants.

Yet there is a striking dissonance between how educational value is viewed by the news media and many students and their families, and how it is viewed by the head of the U.S. Education Department, Secretary Margaret Spellings, and the commission she appointed in 2006 to review the state of American higher education. The Spellings Commission calls for greater accountability, efficiency, and cost controls at our nation's colleges — a demand that seems out of step with the very features that make elite colleges and universities so attractive to prospective students and their families. Although the commission concluded that our higher-education system "needs to improve in dramatic ways," it did not differentiate between elite and nonelite institutions, which brings the credibility of its recommendations into question.

The fact is that elite colleges and universities in the United States, although perceived by would-be matriculants and their parents as highly effective, are relatively inefficient organizations — at least according to the Spellings Commission's measure of choice: cost per student. The commission's final report last year called on higher-education institutions to become "more transparent about cost, price, and student success outcomes" and argued that traditional input measures like SAT scores and selectivity indicators were "no longer adequate" for ensuring accountability.

But consider the information you're likely to find in the viewbooks or on the Web sites of our most selective institutions: low student-faculty ratios; images and descriptions of recently renovated residence halls with costly, high-tech additions; and accounts of faculty members who, as a result of low teaching loads, have the time to work closely with undergraduates. Prospective students and their parents are not given detailed information on student learning or institutional spending; they are instead wowed with qualitative and quantitative information describing the accomplishments of faculty members and the quality of the student-life experience.

As headlines suggest, that strategy appears to work: More students than ever want to attend those dazzling-sounding institutions, and employers continue to hire their graduates. What's more — the Spellings Commission's recommendations notwithstanding — it does not seem that those colleges and universities are interested in holding down their costs. Quite the opposite, in fact: They are spending more and touting their spending as a selling point. Elite institutions have the largest endowments per student in the country (although their tuition prices seem disconnected to this reality). Harvard, which has seen its endowment more than double since 1999 to nearly $29-billion, raised its tuition price 3.9 percent this year, to $31,456.

So the commission and its experts on higher education are asking colleges and universities to adopt businesslike "cost-cutting and productivity improvements" while, simultaneously, students and their parents are clamoring to gain admission to a group of institutions openly disdainful of any need to cut costs and become more efficient. The commission report and Secretary Spellings's public comments calling for institutions to cut costs and operate more efficiently and transparently are plainly not aimed at those top-tier colleges and universities.

The report's recommendations fly in the face of what we see at our nation's most prestigious colleges and universities, and are cynical and impractical. The commission's recommendations, if adopted by less-prestigious institutions, would amount to a unilateral decision to disengage from what many scholars of higher education have described as an arms race of spending. Why would any college or university with aspirations of breaking into the top tier choose to drop out of the race? If anything, the increasing attractiveness of prestigious institutions is tangible proof that they should emulate, rather than distance themselves, from the competition.

The Spellings Commission might have made it clear that its report's findings and recommendations were not to be applied to all institutions of higher education — specifically, those receiving record numbers of applications despite their spending habits. The commission didn't do that, though, because doing so would have exposed the duplicity in the way we evaluate our higher-education system.

The United States has at least two different higher-education subsystems. The first serves the vast majority of students, teaching them and helping them to develop literacy and job skills. It is underfinanced, at least in comparison to its more-elite counterpart, and is under increasing attack from the public and politicians for failing to be innovative, efficient, transparent, and subservient to what business leaders say they want in college graduates.

The other subsystem is much smaller and consists primarily of the top-tier institutions that are receiving record numbers of applications. Those institutions are competing among themselves to see who can spend the most money per student to attract the best and brightest. They are increasingly attractive to well-educated parents and students who understand that a comprehensive education in the liberal tradition will provide access to what the economist Richard Florida describes as the "creative class" and a better quality of life. Leaders at those colleges and universities know that, by offering prospective students a rigorous undergraduate curriculum with all the trappings of student life, they need not worry about cost per student.

The Spellings Commission's failure to recognize and speak to the existence of the two subsystems of higher education illustrates why many people remain skeptical about the secretary's agenda and don't take the commission or its final report seriously. If and when the next Spellings Commission produces a report with workable, realistic recommendations that acknowledge the lure of elite colleges and the educational experience they provide, perhaps that skepticism will abate.

Christopher C. Morphew is an associate professor of higher education at the Institute of Higher Education at the University of Georgia. He is the author, with Peter Eckel, of The Privatization of the Public Research University, to be published by Johns Hopkins Press this year.