That fracking hypocrite Billy “I’m a yellow elephant” Kristol typed a piece of shite called “What Obama Left Out,” and whines that Barack Obama’s speech at Wesleyan University about public service tellingly failed to mention the military as an admirable form of service. What branch of service were you in, dipstick? Mr. Cohen says “The World Is Upside Down,” and that it’s time to invert our thinking, to see the developed world as depending on the developing world, rather than the other way around. Mr. Krugman asks us if it’s “A Return of That 70’s Show,” and says there’s no sign this time around of the wage-price spiral that, in the 1970s, turned a temporary shock from higher oil prices into a persistently high rate of inflation. Here’s that poisonous toad Kristol:
Commencement speeches are hard.
I gave one at a college about seven years ago. I labored over it, consulting orations from years past, writing and rewriting drafts. I ended up with remarks that struck me — even while I delivered them — as banal and platitudinous. Luckily, no one seemed to be paying much attention — and at least I kept it short. I don’t think I did too much damage to the enjoyment of the day by the graduating students and their parents.
Since then, whenever I look at the annual roundup of commencement addresses, I can’t help but admire those who can pull off this mode of speechifying.
Barack Obama, you won’t be surprised to learn, can pull it off. He spoke on the Sunday of Memorial Day weekend at Wesleyan University in Middletown, Conn., pinch-hitting for Senator Ted Kennedy, on the theme of service to our country. The speech was skillfully crafted and well delivered, the grace notes were graceful, and the exhortations to public service seemed heartfelt but not cloying.
The speech was a success. It’s also revealing — about Obama’s view of himself and of public service.
Obama chooses to introduce the notion of public service from an autobiographical point of view. In college, he explains, “I began to notice a world beyond myself.” So while his friends were seeking jobs on Wall Street, he applied for jobs as a grass-roots activist. And one day, a group of churches in Chicago offered him a job as a community organizer for “$12,000 a year plus $2,000 for an old, beat-up car.”
“And I said yes.”
Those four words form their own paragraph in the prepared text. Obama wants us to be impressed by the drama of his spurning the big bucks, by his bold acceptance of such a pittance of money in order that he could do good.
Leave aside the fact that two years elapsed between Obama’s graduation from Columbia in 1983 and his heading off to Chicago in 1985. Dramatic foreshortening is, after all, sometimes necessary. And leave aside whether $14,000 in 1985 was really such a shockingly low salary for someone recently out of college — in inflation-adjusted dollars, it’s about what we pay entry-level editorial assistants today at The Weekly Standard.
Obama’s point is that he went on to do good in Chicago — and that the college graduates to whom he’s speaking should follow in his exemplary footsteps. Of course, most politicians do admire themselves and their excellent careers. So perhaps one shouldn’t make too much of Obama’s sin of self-regard.
More striking is Obama’s sin of omission. In the rest of the speech, he goes on to detail — at some length — the “so many ways to serve” that are available “at this defining moment in our history.” There’s the Peace Corps, there’s renewable energy, there’s education, there’s poverty — there are all kinds of causes you can take up “should you take the path of service.”
But there’s one obvious path of service Obama doesn’t recommend — or even mention: military service. He does mention war twice: “At a time of war, we need you to work for peace.” And, we face “big challenges like war and recession.” But there’s nothing about serving your country in uniform.
It can’t be that the possibility of military service as an admirable form of public service didn’t occur to Obama. Only the day before, Obama had been squabbling with John McCain about veterans’ benefits. He said then, “Obviously I revere our soldiers and want to make sure they are being treated with honor and respect.”
And the day after the Wesleyan commencement, Obama was in New Mexico, where he read an eloquent and appropriate Memorial Day tribute to our fallen soldiers.
But at an elite Northeastern college campus, Obama obviously felt no need to disturb the placid atmosphere of easy self-congratulation. He felt no need to remind students of a different kind of public service — one that entails more risks than community organizing. He felt no need to tell the graduating seniors in the lovely groves of Middletown that they should be grateful to their peers who were far away facing dangers on behalf of their country
Nor did Obama choose to mention all those college graduates who are now entering the military, either for a tour of duty or as a career, in order to serve their country. He certainly felt no impulse to wonder whether the nation wouldn’t be better off if R.O.T.C. were more widely and easily available on elite college campuses.
Obama failed to challenge — even gently — what he must have assumed would be the prejudices of much of his audience and indulged in a soft patriotism of low expectations.
Was this a public service?
Put a sock in it, Billy. Do us all a favor and STFU. Here’s Mr. Cohen:
For a while the world was flat. Now it’s upside down.
To understand it, invert your thinking. See the developed world as depending on the developing world, rather than the other way round. Understand that two-thirds of global economic growth last year came from emerging countries, whose economies will expand about 6.7 percent in 2008, against 1.3 percent for the United States, Japan and euro zone states.
The sharp rise in prices for energy, commodities, metals and minerals produced mainly in the developing world explains part of this shift. That has created the balance of payments surpluses fueling dollar-dripping sovereign wealth funds in the gulf and East Asia. They amuse themselves picking up a stake in BP here, a chunk of Morgan Stanley there, and why not a sliver of Total.
We of the developed-world Paleolithic species are fair game for the upstarts now, our predator role exhausted. The U.S. and Europe may one day need all the charity they can get.
To place this inversion in focus, it helps to be in Brazil, where winter (so to speak) arrives with the Northern Hemisphere summer, and economic optimism, as exuberant as the vegetation, increases at the same brisk clip as U.S. foreclosures.
Huge offshore oil finds, a sugarcane ethanol boom, vast reserves of unused arable land, mineral wealth and abundant fresh water contribute to Brazilian buoyancy. But natural resources are only part of the story. As in China and India, an expanding internal market is bolstering growth. So is increasing corporate sophistication and global ambition.
At the annual National Forum, a gathering of business leaders, I felt like a first-world pipsqueak as leaders of the national energy company Petrobras (bigger than BP, Shell and Total) and Companhia Vale do Rio Doce, or C.V.R.D. (the world’s second largest mining company), reeled off head-turning statistics.
Petrobras, which has spearheaded Brazil’s push to self-sufficiency from heavy dependence on imported oil 30 years ago, will more than double oil production to 4.2 million barrels a day in 2015 from 1.9 million barrels today.
“With the latest discoveries, the South Atlantic will become a huge oil producer,” predicted Jose Sergio Gabrielli de Azvedo, its chief executive.
Roger Agnelli of C.V.R.D. waved away the United States (“It’s full of debt”) to focus on the company’s ambitions in Asia. It was imperative to be there, he said, because that’s where growth, capital and ambition are. China, he noted, will account for 55 percent of iron ore consumption, 31.6 percent of nickel, and 42 percent of aluminum by 2012. Case closed.
Like many other big emerging-market corporations, C.V.R.D. has been on a buying spree. It’s not just sovereign wealth funds that are acquiring first-world companies these days. It’s the new giants of the NAN (Newly Acquisitive Nations).
Emerging-market mergers and acquisitions are up 17 percent this year to $218 billion, while for the rest of the world they’re down 43 percent to $991 billion, according to Thomson Reuters.
The 2007 Unctad World Investment Report said developing-world direct foreign investment totaled $193 billion in 2006, compared with a 1990s annual average of $54 billion. The U.S. 2006 figure was $216.6 billion.
C.V.R.D. bought Canada’s Inco, a nickel miner, for $17 billion in 2006. It came close to acquiring the Anglo-Swiss miner Xstrata for $90 billion this year. Just last week, India’s Vedanta Resources reached a $2.6 billion deal to buy U.S. copper miner Asarco.
That deal is being challenged by Grupo Mexico, creating a Latin-American-Asian fight for a U.S. company.
If you have trouble getting your mind around that, try standing on your head.
That’s also a good position from which to view India’s Tata Motors agreeing to buy Land Rover and Jaguar from Ford for $2.3 billion, or Tata Steel’s acquisition last year of the Anglo-Dutch Corus Group steel company for $12 billion.
Globalization is now a two-way street; in fact it’s an Indian street with traffic weaving in all directions.
“In an inverted world, not only have developing economies become dominant forces in global exports in the space of a few years, but their companies are becoming major players in the global economy, challenging the incumbents that dominated the international scene in the 20th century,” said Claudio Frischtak, a Brazilian economist and consultant.
A shift in economic power is under way to which the developed world has not yet adjusted. Of course the G-8 and the permanent membership of the U.N. Security Council need to be expanded to reflect this change. The 21st century can’t be handled with 20th-century institutions.
That’s obvious. Less obvious is how the United States, which underwrites global security at vast expense, begins to share this burden, so that the new multi-polarity of wealth is reflected in a multipolarity of security commitments.
Headstands are in order for the next U.S. president.
Here’s Mr. Krugman:
Which decade is it, anyway?
Not long ago it seemed as if everyone watching the carnage in financial markets was drawing scary parallels with the 1930s.
This time, however, Ben Bernanke and his colleagues at the Federal Reserve did what their predecessors failed to do during the banking crisis of 1930-31: they acted forcefully to avert a collapse of the financial system. And their efforts seem, provisionally, to have worked. While things are far from normal in the financial markets, over the last few months the sense of panic has been gradually subsiding.
You might think, then, that everyone would be congratulating Mr. Bernanke and company for their good work. But at an economic conference I recently attended, many of the participants — including people with a lot of influence in the policy world — seemed to be bashing the Bernanke Fed.
You see, fears of a 1930s-style financial meltdown are apparently out; fears of 1970s-style stagflation are in. And the Fed stands accused of being soft on inflation.
The emerging conventional wisdom, if what I heard is any indication, is that Mr. Bernanke has been fighting the wrong enemy all along: inflation, not financial collapse, is the real threat. And to head off that threat, the critics say, the Fed has to reverse course and raise interest rates — never mind the risks of recession.
So this seems like a good time to declare that the new conventional wisdom is all wrong. We’re not watching a rerun of that ’70s show — and the misguided belief that we are could do a lot of harm.
It’s true that the soaring prices of oil and other raw materials have led to public anguish over the rising cost of living. But this time around there’s no sign whatsoever of the wage-price spiral that, in the 1970s, turned a temporary shock from higher oil prices into a persistently high rate of inflation
Here’s an example of the way things used to be: In May 1981, the United Mine Workers signed a contract with coal mine operators locking in wage increases averaging 11 percent a year over the next three years. The union demanded such a large pay hike because it expected the double-digit inflation of the late 1970s to continue; the mine owners thought they could afford to meet the union’s demands because they expected big future increases in coal prices, which had risen 40 percent over the previous three years.
At the time, the mine workers’ settlement wasn’t at all unusual: many workers were getting comparable contracts. Workers and employers were, in effect, engaged in a game of leapfrog: workers would demand big wage increases to keep up with inflation, corporations would pass these higher wages on in prices, rising prices would lead to another round of wage demands, and so on.
Once that sort of self-sustaining inflationary process gets under way, it’s very hard to stop. In fact, it took a very severe recession, the worst slump since the 1930s, to get rid of the inflationary legacy of the 1970s.
But as I said, this time around there’s no wage-price spiral in sight.
The inflation hawks point out that consumers are, for the first time in decades, telling pollsters that they expect a sharp rise in prices over the next year. Fair enough.
But where are the unions demanding 11-percent-a-year wage increases? (Where are the unions, period?) Consumers are worried about inflation, but you have to search far and wide to find workers demanding compensation in the form of higher wages, let alone employers willing to accept those demands. In fact, wage growth actually seems to be slowing, thanks to the weakness of the job market.
And since there isn’t a wage-price spiral, we don’t need higher interest rates to get inflation under control. When the surge in commodity prices levels off — and it will; the laws of supply and demand haven’t been repealed — inflation will subside on its own.
Still, why not raise interest rates a bit, as extra insurance against inflation?
Part of the answer is that the financial crisis, which seems to be in remission right now, could flare up again if money gets more expensive.
And even if the financial crisis doesn’t come back, higher rates would further weaken an already weak real economy. Never mind whether we’re technically in a recession: it feels like a recession to most people, and higher interest rates would make it worse.
The bottom line is that while expensive gas and food are inflicting real harm on American families, they aren’t setting off a ’70s-type inflationary spiral. The only thing we have to fear on that front is inflation fear itself, which could lead to policies that make a bad economic situation worse.
