Bobo… Just Bobo…

Bob Herbert is off today, so Bobo gets to “shine” alone.  In “Car Dealer in Chief” he gurgles that by enmeshing the White House so deeply into G.M., President Obama has increased the odds that March’s menacing threat will lead to June’s wobbly wiggle-out.  Here he is:

Some companies are in the steel business, some are in the cookie business, but General Motors is in the restructuring business. For 30 years, G.M. has been restructuring itself toward long-term viability.

For all these years, G.M.’s market share has endured a long, steady slide. But this has not stopped the waves of restructuring. The PowerPoints have flowed, and always there has been the promise that with just one more cost-cutting push, sustainability nirvana will be at hand.

There are many experts who think that the whole restructuring strategy is misbegotten. These experts think that costs are not the real problem. The real problem is the product. The cars are not good enough. The management is insular. The reputation is fatally damaged.

But if you are in the restructuring business, you can’t let these stray thoughts get in the way of your restructuring. After all, restructuring is your life. Restructuring is forever. Restructuring is like what dieting is for many of us: You think about it every day. You believe it’s about to work. Nothing really changes.

When the economy cratered last fall, the professionals at G.M. went into Super-Duper Restructuring Overdrive. In October, they warned the Bush administration of a possible bankruptcy filing and started restructuring. In December, they came back asking for a loan while they … (wait for it) … restructured.

The Bush advisers decided in December that bankruptcy without preparation would be a disaster. They decided what all administrations decide — that the best time for a bankruptcy filing is a few months from now, and it always will be. In the meantime, restructuring would continue, federally subsidized.

Today, G.M. and Chrysler have once again come up with restructuring plans. By an amazing coincidence, the plans are again insufficient. In an extremely precedented move, the Obama administration has decided that the best time for possible bankruptcy is — a few months from now. The restructuring will continue.

But this, President Obama declares, is G.M.’s last chance. Honestly. Really.

No kidding.

Could this really be true? Could the Harvard Business Review’s longest-running soap opera possibly be coming to an end? Could President Obama really scare the restructural recidivists in Detroit into coming up with changes big enough to do the job?

Well, the president certainly acted tough on Monday. In a show of force, he released plans from his Office of People Who Are Much Smarter Than You Are. These plans insert the government into the car business in all sorts of ways. They pick winners (new C.E.O. Fritz Henderson) and losers (Rick Wagoner). They basically send Chrysler off into the sunset. Joe Biden will be doing car commercials within weeks.

The Obama team also raised the bankruptcy specter more explicitly than ever before. Even more tellingly, the administration moved to “stand behind” the companies’ service warranties. That lays the groundwork for a bankruptcy procedure and should be a sharp shock to Detroit.

And yet by enmeshing the White House so deeply into G.M., Obama has increased the odds that March’s menacing threat will lead to June’s wobbly wiggle-out. The Obama administration and the Democratic Party are now completely implicated in the coming G.M. wreck. Over the next few months, the White House will be subject to a gigantic lobbying barrage. The Midwestern delegations, swing states all, will pull out all the stops to prevent plant foreclosures. Unions will be furious if the Obama-run company rips up the union contract. Is the White House ready for the headline “Obama to Middle America: Drop Dead”? It would take a party with a political death wish to see this through.

Furthermore, there’s no reason to think the umpteenth restructuring will produce compelling results. Cost control without a quality revolution will make little difference. There’s no reason to think Americans are going to flock to G.M. cars. (The president lauded their fantabulousness, but G.M. sales fell 51 percent during the first two months of this year while the overall market declined by 39 percent.) Politically expedient environmental demands will make the odds of profitability even more remote.

Corporate welfare rarely works when the government invests in rising firms. The odds are really grim when it tries to subsidize fading ones. (In the ’80s, Chrysler already had the successful K-car in the pipeline.)

The most likely outcome, sad to say, is some semiserious restructuring plan, with or without court involvement, to be followed by long-term government intervention and backdoor subsidies forever. That will amount to the world’s most expensive jobs program. It will preserve the overcapacity in the market, create zombie companies and thus hurt Ford. It will raise the protectionist threat as politicians seek to protect the car companies they now run.

It would have been better to keep a distance from G.M. and prepare the region for a structured bankruptcy process. Instead, Obama leapt in. His intentions were good, but getting out with honor will require a ruthless tenacity that is beyond any living politician.

Krugman, solo

Roger Cohen is off today.  Prof. Krugman, in “America the Tarnished,” says these days America is looking like the Bernie Madoff of economies: for many years it was held in respect, even awe, but it turns out to have been a fraud all along.  Here he is:

Ten years ago the cover of Time magazine featured Robert Rubin, then Treasury secretary, Alan Greenspan, then chairman of the Federal Reserve, and Lawrence Summers, then deputy Treasury secretary. Time dubbed the three “the committee to save the world,” crediting them with leading the global financial system through a crisis that seemed terrifying at the time, although it was a small blip compared with what we’re going through now.

All the men on that cover were Americans, but nobody considered that odd. After all, in 1999 the United States was the unquestioned leader of the global crisis response. That leadership role was only partly based on American wealth; it also, to an important degree, reflected America’s stature as a role model. The United States, everyone thought, was the country that knew how to do finance right.

How times have changed.

Never mind the fact that two members of the committee have since succumbed to the magazine cover curse, the plunge in reputation that so often follows lionization in the media. (Mr. Summers, now the head of the National Economic Council, is still going strong.) Far more important is the extent to which our claims of financial soundness — claims often invoked as we lectured other countries on the need to change their ways — have proved hollow.

Indeed, these days America is looking like the Bernie Madoff of economies: for many years it was held in respect, even awe, but it turns out to have been a fraud all along.

It’s painful now to read a lecture that Mr. Summers gave in early 2000, as the economic crisis of the 1990s was winding down. Discussing the causes of that crisis, Mr. Summers pointed to things that the crisis countries lacked — and that, by implication, the United States had. These things included “well-capitalized and supervised banks” and reliable, transparent corporate accounting. Oh well.

One of the analysts Mr. Summers cited in that lecture, by the way, was the economist Simon Johnson. In an article in the current issue of The Atlantic, Mr. Johnson, who served as the chief economist at the I.M.F. and is now a professor at M.I.T., declares that America’s current difficulties are “shockingly reminiscent” of crises in places like Russia and Argentina — including the key role played by crony capitalists.

In America as in the third world, he writes, “elite business interests — financiers, in the case of the U.S. — played a central role in creating the crisis, making ever-larger gambles, with the implicit backing of the government, until the inevitable collapse. More alarming, they are now using their influence to prevent precisely the sorts of reforms that are needed, and fast, to pull the economy out of its nosedive.”

It’s no wonder, then, that an article in yesterday’s Times about the response President Obama will receive in Europe was titled “English-Speaking Capitalism on Trial.”

Now, in fairness we have to say that the United States was far from being the only nation in which banks ran wild. Many European leaders are still in denial about the continent’s economic and financial troubles, which arguably run as deep as our own — although their nations’ much stronger social safety nets mean that we’re likely to experience far more human suffering. Still, it’s a fact that the crisis has cost America much of its credibility, and with it much of its ability to lead.

And that’s a very bad thing.

Like many other economists, I’ve been revisiting the Great Depression, looking for lessons that might help us avoid a repeat performance. And one thing that stands out from the history of the early 1930s is the extent to which the world’s response to crisis was crippled by the inability of the world’s major economies to cooperate.

The details of our current crisis are very different, but the need for cooperation is no less. President Obama got it exactly right last week when he declared: “All of us are going to have to take steps in order to lift the economy. We don’t want a situation in which some countries are making extraordinary efforts and other countries aren’t.”

Yet that is exactly the situation we’re in. I don’t believe that even America’s economic efforts are adequate, but they’re far more than most other wealthy countries have been willing to undertake. And by rights this week’s G-20 summit ought to be an occasion for Mr. Obama to chide and chivy European leaders, in particular, into pulling their weight.

But these days foreign leaders are in no mood to be lectured by American officials, even when — as in this case — the Americans are right.

The financial crisis has had many costs. And one of those costs is the damage to America’s reputation, an asset we’ve lost just when we, and the world, need it most.

Dowd, Friedman and Kristof

Frank Rich is off this week.  MoDo uses a story about the president of Brazil as a jumping off point on a weird rant called “Blue Eyed Greed?” in which she says with the Obamas in the White House, brown eyes may finally — and rightfully — overtake blue as the windows of winners.  I have blue eyes, which I guess makes me either evil or a loser, or maybe an evil loser.  MoDo needs to have her meds checked, and maybe increase her therapy sessions.  The Moustache of Wisdom gives us “Mother Nature’s Dow,” in which he says if Mother Nature had a Dow, you could say that it, too, has been breaking into new (scientific) lows.  Mr. Kristof, in “A Boy Living in a Car,” says if slum-dwelling Haitians can share what little they have, I hope we can be equally generous during this downturn when needs are greatest.  Here’s MoDo, who hated her brown eyes, but now that we have a president with brown eyes feels much, much better:

As international lunacy goes, it was hard to beat the pope saying that condoms spread AIDS.

But Brazil’s president, known simply as Lula, gave it his best shot.

At a press conference Thursday in Brasilia with Prime Minister Gordon Brown of Britain — who has a talent for getting himself into dicey spots — Lula started off coughing from some cheese bread he’d wolfed down. Then he suddenly turned accusatory.

“This crisis was caused by the irrational behavior of white people with blue eyes, who before the crisis appeared to know everything and now demonstrate that they know nothing,” charged the brown-eyed, bearded socialist president.

As the brown-eyed Brown grew a whiter shade of pale, Lula hammered the obvious point that the poor of the world were suffering in the global crash because of the misdeeds of the rich.

“I do not know any black or indigenous bankers,” said Lula.

He also told CNN he would press this theme at the G-20 meeting in London this week. He says his past as a poor, hungry, unemployed lathe operator gives him special insight.

“I lived in houses that were flooded by water,” he said, adding, “Sometimes, I had to fight over space with rats and cockroaches, and waste would come in when it flooded.”

The “Lula lulu” by the “Brazil nut,” as The New York Post dubbed it, became big news just as President Obama met at the White House with Vikram Pandit and a cadre of white-bread bankers who have taken the bailout — some of whom, like Jamie Dimon, have distinctly blue eyes.

And it is true, of course, that the upper-crust, underwhelming Anglo-Saxon leaders who allowed America’s financial markets to morph into louche casinos, George W. Bush and Dick Cheney, were very, very white men with blue eyes.

As the Who sang: “No one knows what it’s like to be the bad man, to be the sad man behind blue eyes. No one knows what it’s like to be hated, to be fated to telling only lies.”

Every time Cheney looks into the camera with those ice-blue eyes and says President Obama is making us less safe, it sounds as if he’s secretly hoping we do get attacked just to prove his point that Obama is weak, even if he has to go up in smoke, too.

(When I double-checked the color of Cheney’s eyes, his daughter Liz Cheney jokingly e-mailed back, “Sorry, but that information is classified.”)

Before President Obama, whose brown eyes are opaque when you look into them, presidents have been more known for blue eyes. The ones with brown eyes, Richard Nixon and L.B.J., came a cropper.

Throughout history, whether it’s images of Jesus that don’t look Middle Eastern or Barbies who don’t look ethnic, blue eyes and white skin have often been painted as the ideal.

The cerulean-eyed Paul Newman once wryly predicted his epitaph: “Here lies Paul Newman, who died a failure because his eyes turned brown.”

Surveys show that people with blue eyes are considered more intelligent, attractive and sociable.

A 2007 University of Louisville study concluded that people with blue eyes were better planners and strategic thinkers — superior at things like golf, cross-country running and preparing for exams — while people with brown eyes had better reflexes, making them good at hockey and football.

Lula’s rant underscored an ancient rivalry.

When I was little, growing up in a house that prominently displayed a blue-eyed Jesus and a blue-eyed J.F.K., I felt my brown eyes were far less attractive than my brothers’ blue ones.

I obsessed on it so much, cutting out a picture of a beautiful brown-eyed model and keeping it in my scrapbook, that my mother finally reassured me:

“You look at blue eyes. You look into brown eyes.”

Later, of course, there would be the thrill of Van Morrison serenading a “Brown-Eyed Girl.”

Before Barack Obama, when I interviewed the brown-eyed sons of immigrants who were thinking of running for president, Mario Cuomo and Colin Powell, they seemed torn about taking the big plunge, given how far they had come in relation to their dads.

I asked Governor Cuomo if he was leaving the field to “the privileged blue-eyed WASPs” like Bush senior and Dan Quayle who felt entitled and never worried about their worthiness.

Barack Obama and his family have already had a profound effect on the culture in terms of what is beautiful and marketable. Black faces are popping up in all kinds of ads now — wearing straw boaters and other prepster outfits in Ralph Lauren ads.

With Michelle urging students to aim for A’s and the president promising to make school “cool,” brown eyes may finally — and rightfully — overtake blue as the windows of winners.

Words fail me…  Here’s The Moustache of Wisdom:

While I’m convinced that our current financial crisis is the product of both The Market and Mother Nature hitting the wall at once — telling us we need to grow in more sustainable ways — some might ask this: We know when the market hits a wall. It shows up in red numbers on the Dow. But Mother Nature doesn’t have a Dow. What makes you think she’s hitting a wall, too? And even if she is: Who cares? When my 401(k) is collapsing, it’s hard to worry about my sea level rising.

It’s true, Mother Nature doesn’t tell us with one simple number how she’s feeling. But if you follow climate science, what has been striking is how insistently some of the world’s best scientists have been warning — in just the past few months — that climate change is happening faster and will bring bigger changes quicker than we anticipated just a few years ago. Indeed, if Mother Nature had a Dow, you could say that it, too, has been breaking into new (scientific) lows.

Consider just two recent articles:

The Washington Post reported on Feb. 1, that “the pace of global warming is likely to be much faster than recent predictions, because industrial greenhouse gas emissions have increased more quickly than expected and higher temperatures are triggering self-reinforcing feedback mechanisms in global ecosystems, scientists said. ‘We are basically looking now at a future climate that’s beyond anything we’ve considered seriously in climate model simulations,’ Christopher Field, director of the Carnegie Institution’s Department of Global Ecology at Stanford University, said.”

The physicist and climate expert Joe Romm recently noted on his blog, climateprogress.org, that in January, M.I.T.’s Joint Program on the Science and Policy of Global Change quietly updated its Integrated Global System Model that tracks and predicts climate change from 1861 to 2100. Its revised projection indicates that if we stick with business as usual, in terms of carbon-dioxide emissions, average surface temperatures on Earth by 2100 will hit levels far beyond anything humans have ever experienced.

“In our more recent global model simulations,” explained M.I.T., “the ocean heat-uptake is slower than previously estimated, the ocean uptake of carbon is weaker, feedbacks from the land system as temperature rises are stronger, cumulative emissions of greenhouse gases over the century are higher, and offsetting cooling from aerosol emissions is lower. Not one of these effects is very strong on its own, and even adding each separately together would not fully explain the higher temperatures. [But,] rather than interacting additively, these different effects appear to interact multiplicatively, with feedbacks among the contributing factors, leading to the surprisingly large increase in the chance of much higher temperatures.”

What to do? It would be nice to say, “Hey, Mother Nature, we’re having a credit crisis, could you take a couple years off?” But as the environmental consultant Rob Watson likes to say, “Mother Nature is just chemistry, biology and physics,” and she is going to do whatever they dictate. You can’t sweet talk Mother Nature or the market. You have to change the economics to affect the Dow and the chemistry, biology and physics to affect Mother Nature.

That’s why we need a climate bailout along with our economic bailout. Hal Harvey is the C.E.O. of a new $1 billion foundation, ClimateWorks, set up to accelerate the policy changes that can avoid climate catastrophe by taking climate policies from where they are working the best to the places where they are needed the most.

“There are five policies that can help us win the energy-climate battle, and each has been proven somewhere,” Harvey explained. First, building codes: California’s energy-efficient building and appliance codes now save Californians $6 billion per year,” he said. Second, better vehicle fuel-efficiency standards: “The European Union’s fuel-efficiency fleet average for new cars now stands at 41 miles per gallon, and is rising steadily,” he added.

Third, we need a national renewable portfolio standard, mandating that power utilities produce 15 or 20 percent of their energy from renewables by 2020. Right now, only about half our states have these. “Whenever utilities are required to purchase electricity from renewable sources,” said Harvey, “clean energy booms.” (See Germany’s solar business or Texas’s wind power.)

The fourth is decoupling — the program begun in California that turns the utility business on its head. Under decoupling, power utilities make money by helping homeowners save energy rather than by encouraging them to consume it. “Finally,” said Harvey, “we need a price on carbon.” Polluting the atmosphere can’t be free.

These are the pillars of a climate bailout. Yes, some have upfront costs. But all of them would pay long-term dividends, because they would foster massive U.S. innovation in new clean technologies that would stimulate the real Dow and much lower emissions that would stimulate the Climate Dow.

And now here’s Mr. Kristof, writing from Cap Haitien, Haiti:

As America’s unemployment rate rises, those paying the severest price aren’t necessarily in Detroit or Miami. One of the newest street children here in this northern Haitian city is a 10-year-old boy whose father was working in Florida but lost his job and can no longer send money home. As a result, the family here was evicted, the mother and children went separate ways to improve their odds of finding shelter, and the boy found refuge in an abandoned wreck of a car.

The boy is one of 46 million people in the developing world — more than double the New York State population — who will be driven into poverty in 2009, according to a World Bank estimate.

In Haiti’s largest slum, Cité Soleil, in the capital, Port-au-Prince, I stumbled upon a one-room public school. The principal, Claude Lafaille, lamented that enrollment had dropped from 150 at the start of the year to 60 today.

“Haitians in America stopped sending money back, and so their family members can’t pay fees,” he said.

The school used to provide free breakfasts to ensure that students got at least one solid meal a day. But in January, the charity that provided the food had to stop because its donations were dropping, so now the remaining children are often too hungry to concentrate.

In the St. Catherine Labouré hospital in Port-au-Prince, the number of children admitted for malnutrition has approximately doubled since September, said a pediatrician, Dr. Armide Jeanty. She pointed to a 15-month-old child, Richardson, skeletal and covered with sores. He stared blankly, for when children are severely malnourished their bodies shut down and do not waste energy crying, laughing or smiling.

It’s natural in an economic crisis to look inward, to focus on America’s own needs, but it’s worth remembering that the consequence of a deep recession in a poor country isn’t just a lost job but also a lost child.

In Cité Soleil, a woman named Chantal Dorlus told me that her 5-year-old daughter, Nasson, starved to death last month, and neighbors confirmed the account. Ms. Dorlus said that her three other children would have starved as well if not for the generosity of her neighbors, who share their meager food supplies.

If slum-dwelling Haitians can share what little they have, I hope we can be equally generous during this downturn when needs are greatest.

On this trip, I met a couple of American women, Sasha Kramer and Sarah Brownell, both in their early 30s, who offer an example of outward commitment at a time when most of us are retrenching and focusing on ourselves. Sasha and Sarah run a hand-to-mouth aid group, called SOIL; they speak fluent Creole and get around on motorcycle taxis while waving back at legions of fans on every street. (You can watch a video of them at nytimes.com/ontheground.)

I was interested in their work because it addresses two of the developing world’s greatest but least glamorous challenges. One is sanitation, for human waste in poor countries routinely spreads disease and parasites. The second is agriculture, for poor countries must increase crop yields if they are to overcome poverty and hunger.

Sasha and Sarah create dry composting toilets that turn human waste into valuable fertilizer. They say that the yearlong composting process kills the pathogens in the waste, making it safe to use the fertilizer.

Frankly, I was taken aback when, 10 minutes after they had met me, they pulled out a Ziploc bag and proudly declared that it was compost made from their own toilet. They were so impressed with what they had accomplished that I felt obliged to take a whiff and hold it in my fingers; it simply felt and smelled like rich potting soil, and I would never have guessed its origins.

Haitian farmers use virtually no fertilizer — less than a pound per acre, compared with about 90 pounds in the United States — and soils are severely depleted. But Sasha calculates that if half of Haitians’ human waste could be used as fertilizer, that would amount to a 17-fold increase in fertilizer use, more than doubling the country’s agricultural production.

Sasha and Sarah have deployed 45 of their toilets, and now they are trying to introduce a municipal composting system in Cap Haitien.

I don’t know if this is feasible. But I love the idea that even when the needs of the United States are so immense, a couple of young Americans aren’t complaining or finger-pointing, but are hard at work to assist others whose distress is incomparably greater than our own.

They probably have brown eyes…

Collins, solo

Bob Herbert is off today, and Gail Collins tells us “How to Train a Governor.”  She says the political free fall of Gov. David Paterson of New York isn’t from any big personal scandal. He has alienated the public just by being terrible at his job.  I confess I haven’t been paying much attention to what’s been going on in New York State since I moved down here almost 20 years ago, but it seems that the state legislature hasn’t changed much…  Here she is:

This week, a survey taken by Siena College’s Research Institute found that Gov. David Paterson of New York had a positive job-approval rating of 19 percent.

That’s amazing. As George Bush has demonstrated, you can pretty much destroy an entire country and more than a quarter of the public will still insist you did an O.K. job.

Even more impressive was the fact that Paterson got a 51 percent positive performance rating in a Siena poll just eight weeks ago, then went careening downward in a trajectory that’s been reflected by other public opinion surveys. On the plus side, he’s now got a rejoinder for critics who claim he can’t accomplish anything quickly.

The most remarkable thing of all is that while Paterson certainly did mess up on that Caroline Kennedy-Senate thing, he achieved this political free fall without help from any big personal scandal. In a state capital where anybody who is anybody is under indictment, he managed to completely alienate the public just by being terrible at his job.

Who knew people were paying that much attention?

Old-timers in Albany say this is the worst legislative session they have ever seen, which is like a prisoner on a chain gang saying he really hates Mondays. Still, things are a mess. Paterson’s aides come and go, his commitments ebb and flow. He hasn’t been able to rescue the downstate mass transit system, and the budget is being put together in darkened rooms by people you would not trust to do your mortgage closing.

Meanwhile, the 32 Democrats who control the State Senate by one vote have discovered that a party with a one-vote majority is exactly as good as its weakest, dumbest and most venal member. This in a group where one guy is about to stand trial for beating up his girlfriend and several others give the impression of being willing to trade their vote for a television someone handed them from the back of a stolen truck.

There are lots of reasons for all this chaos, one of course, being overall economic collapse. But another offers, as we like to say, some larger lessons.

New York has always been a place where legislative leaders held their power very close. Committees don’t really function, especially in the Senate. The rank-and-file are rather superfluous and the minority party has no reason for existence whatsoever. Truly, they could send up a bunch of ferrets wearing politician masks to sit in their seats and it would be absolutely the same.

Until 2008, Democrats were the perpetual minority party in the Senate. And what kind of people do you think run for a job that involves collecting a paycheck and staring at the ceiling? A handful of sterling characters bent on change and a large bunch of slugs who spend their entire legislative careers trying to raise enough money to build a new softball field or a Cucumber Museum back in the home district.

Last year, miracle of miracles, the Democrats won control. Now reformers — we are counting here on one hand — are engaged in a struggle that bears a remarkable resemblance to nation-building in Afghanistan. Committees are being tutored in how to write actual reports and the other day, to everyone’s great excitement, a committee chair actually held a public hearing during which people were allowed to express negative sentiments.

Meanwhile, of course, the economy is falling apart, the New York City subway system is reeling, teachers are facing layoffs. It is not the best possible time for on-the-job training.

There’s a moral in there somewhere. Right now in Washington, a great many people would love to lock the Republicans in a closet and keep them there until they promise to behave or hell freezes over. The Democrats are being restrained by their innate belief in the democratic process and the fact that they can’t figure out how to get away with it.

But maybe the lesson of Albany is that it’s just as well they can’t. Keeping the minority so weak it atrophies isn’t really good for anybody. Look at David Paterson. He was first elected to the State Senate in 1985 — the same year Mike Tyson went to Albany to score a knockout in his debut as a professional fighter. Paterson is an intelligent guy, but the only way you could have a worse preparation for being governor than 20-plus years in the New York Senate minority would be to spend your entire adult life entombed in a catacomb.

The good-government mantra about open process, public hearings, transparent committees, etc., has a point beyond civic virtue. The minority party you’re emasculating today may be the majority tomorrow, and it’s better they not be totally unhousebroken. Particularly if there’s any chance your hero-prosecutor chief executive will have to resign in disgrace after getting caught making dates with a hooker.

Really, the way things are going, it’s always better to be prepared.

Bobo and Krugman

Bobo is still addressing military matters.  In “The Winnable War” he opines that at the end of a trip to Afghanistan, despite personal skepticism, it was hard not to be infected by the optimism of the people who are working there.  Mr. Krugman, in “The Market Mystique,” says that the top officials in the Obama administration still believe in the magic of the financial marketplace and in the prowess of the wizards who perform that magic.  Here’s Bobo, writing from the storied Khyber Pass:

I came to Afghanistan skeptical of American efforts to transform this country. Afghanistan is one of the poorest, least-educated and most-corrupt nations on earth. It is an infinitely complex and fractured society. It has powerful enemies in Pakistan, Iran and the drug networks working hard to foment chaos. The ground is littered with the ruins of great powers that tried to change this place.

Moreover, we simply do not know how to modernize nations. Western aid workers seem to spend most of their time drawing up flow charts for each other. They’re so worried about their inspectors general that they can’t really immerse themselves in the messy world of local reality. They insist on making most of the spending decisions themselves so the “recipients” of their largess end up passive, dependent and resentful.

Every element of my skepticism was reinforced during a six-day tour of the country. Yet the people who work here make an overwhelming case that Afghanistan can become a functional, terror-fighting society and that it is worth sending our sons and daughters into danger to achieve this.

In the first place, the Afghan people want what we want. They are, as Lord Byron put it, one of the few people in the region without an inferiority complex. They think they did us a big favor by destroying the Soviet Union and we repaid them with abandonment. They think we owe them all this.

That makes relations between Afghans and foreigners relatively straightforward. Most military leaders here prefer working with the Afghans to the Iraqis. The Afghans are warm and welcoming. They detest the insurgents and root for American success. “The Afghans have treated you as friends, allies and liberators from the very beginning,” says Afghanistan’s defense minister, Abdul Rahim Wardak.

Second, we’re already well through the screwing-up phase of our operation. At first, the Western nations underestimated the insurgency. They tried to centralize power in Kabul. They tried to fight a hodgepodge, multilateral war.

Those and other errors have been exposed, and coalition forces are learning. When you interview impressive leaders here, like Brig. Gen. John Nicholson of Regional Command South, Col. John Agoglia of the Counterinsurgency Training Center and Chris Alexander of the U.N., you see how relentless they are at criticizing their own operations. Thanks to people like that, the coalition will stumble toward success, having tried the alternatives.

Third, we’ve got our priorities right. Armies love killing bad guys. Aid agencies love building schools. But the most important part of any aid effort is governance and law and order. It’s reforming the police, improving the courts, training local civil servants and building prisons.

In Afghanistan, every Western agency is finally focused on this issue, from a Canadian reconstruction camp in Kandahar to the top U.S. general, David McKiernan.

Fourth, the quality of Afghan leadership is improving. This is a relative thing. President Hamid Karzai is detested by much of the U.S. military. Some provincial governors are drug dealers on the side. But as the U.N.’s Kai Eide told the Security Council, “The Afghan government is today better and more competent than ever before.” Reformers now lead the most important ministries and competent governors run key provinces.

Fifth, the U.S. is finally taking this war seriously. Up until now, insurgents have had free rein in vast areas of southern Afghanistan. The infusion of 17,000 more U.S. troops will change that. The Obama administration also promises a civilian surge to balance the military push.

Sixth, Pakistan is finally on the agenda. For the past few years, the U.S. has let Pakistan get away with murder. The insurgents train, organize and get support from there. “It’s very hard to deal with a cross-border insurgency on only one side of the border,” says Mr. Alexander of the U.N. The Obama strategic review recognizes this.

Finally, it is simply wrong to say that Afghanistan is a hopeless 14th-century basket case. This country had decent institutions before the Communist takeover. It hasn’t fallen into chaos, the way Iraq did, because it has a culture of communal discussion and a respect for village elders. The Afghans have embraced the democratic process with enthusiasm.

I finish this trip still skeptical but also infected by the optimism of the truly impressive people who are working here. And one other thing:

After the trauma in Iraq, it would have been easy for the U.S. to withdraw into exhaustion and realism. Instead, President Obama is doubling down on the very principles that some dismiss as neocon fantasy: the idea that this nation has the capacity to use military and civilian power to promote democracy, nurture civil society and rebuild failed states.

Foreign policy experts can promote one doctrine or another, but this energetic and ambitious response — amid economic crisis and war weariness — says something profound about America’s DNA.

Here’s Prof. Krugman:

On Monday, Lawrence Summers, the head of the National Economic Council, responded to criticisms of the Obama administration’s plan to subsidize private purchases of toxic assets. “I don’t know of any economist,” he declared, “who doesn’t believe that better functioning capital markets in which assets can be traded are a good idea.”

Leave aside for a moment the question of whether a market in which buyers have to be bribed to participate can really be described as “better functioning.” Even so, Mr. Summers needs to get out more. Quite a few economists have reconsidered their favorable opinion of capital markets and asset trading in the light of the current crisis.

But it has become increasingly clear over the past few days that top officials in the Obama administration are still in the grip of the market mystique. They still believe in the magic of the financial marketplace and in the prowess of the wizards who perform that magic.

The market mystique didn’t always rule financial policy. America emerged from the Great Depression with a tightly regulated banking system, which made finance a staid, even boring business. Banks attracted depositors by providing convenient branch locations and maybe a free toaster or two; they used the money thus attracted to make loans, and that was that.

And the financial system wasn’t just boring. It was also, by today’s standards, small. Even during the “go-go years,” the bull market of the 1960s, finance and insurance together accounted for less than 4 percent of G.D.P. The relative unimportance of finance was reflected in the list of stocks making up the Dow Jones Industrial Average, which until 1982 contained not a single financial company.

It all sounds primitive by today’s standards. Yet that boring, primitive financial system serviced an economy that doubled living standards over the course of a generation.

After 1980, of course, a very different financial system emerged. In the deregulation-minded Reagan era, old-fashioned banking was increasingly replaced by wheeling and dealing on a grand scale. The new system was much bigger than the old regime: On the eve of the current crisis, finance and insurance accounted for 8 percent of G.D.P., more than twice their share in the 1960s. By early last year, the Dow contained five financial companies — giants like A.I.G., Citigroup and Bank of America.

And finance became anything but boring. It attracted many of our sharpest minds and made a select few immensely rich.

Underlying the glamorous new world of finance was the process of securitization. Loans no longer stayed with the lender. Instead, they were sold on to others, who sliced, diced and puréed individual debts to synthesize new assets. Subprime mortgages, credit card debts, car loans — all went into the financial system’s juicer. Out the other end, supposedly, came sweet-tasting AAA investments. And financial wizards were lavishly rewarded for overseeing the process.

But the wizards were frauds, whether they knew it or not, and their magic turned out to be no more than a collection of cheap stage tricks. Above all, the key promise of securitization — that it would make the financial system more robust by spreading risk more widely — turned out to be a lie. Banks used securitization to increase their risk, not reduce it, and in the process they made the economy more, not less, vulnerable to financial disruption.

Sooner or later, things were bound to go wrong, and eventually they did. Bear Stearns failed; Lehman failed; but most of all, securitization failed.

Which brings us back to the Obama administration’s approach to the financial crisis.

Much discussion of the toxic-asset plan has focused on the details and the arithmetic, and rightly so. Beyond that, however, what’s striking is the vision expressed both in the content of the financial plan and in statements by administration officials. In essence, the administration seems to believe that once investors calm down, securitization — and the business of finance — can resume where it left off a year or two ago.

To be fair, officials are calling for more regulation. Indeed, on Thursday Tim Geithner, the Treasury secretary, laid out plans for enhanced regulation that would have been considered radical not long ago.

But the underlying vision remains that of a financial system more or less the same as it was two years ago, albeit somewhat tamed by new rules.

As you can guess, I don’t share that vision. I don’t think this is just a financial panic; I believe that it represents the failure of a whole model of banking, of an overgrown financial sector that did more harm than good. I don’t think the Obama administration can bring securitization back to life, and I don’t believe it should try.

Collins, Cohen and Kristof

Ms. Collins, in “Everything Bad is Good Again,” says that there might be only two constants in our ever-changing world — Barack Obama is going to be on television and we always need to have somebody we can be really, really angry at.  Mr. Cohen, in “The Fierce Urgency of Peace,” says pressure on President Obama to recast the failed American approach to Israel-Palestine is building.  Mr. Kristof, in “Learning How to Think,” says the marketplace of ideas doesn’t clear out bad pundits and bad ideas partly because there’s no accountability. It is about time that changed.  I have a little list.  They’ll none of them be missed…  Here’s Ms. Collins:

National Consensus Update:

Tim Geithner — Really cool guy. Super job on that bank bailout thing. Look at the way the stock market jumped. Way better Treasury secretary than last week’s Tim Geithner,who seemed a lot … shorter.

Barack Obama — Kinda boring. Did you see the news conference? Same thing over and over again. Not that we mind. In these troubled times, we like stability. Thank God we didn’t elect somebody who was all charisma and exciting speeches.

Eliot Spitzer — He was the only one who got it, really got it, about A.I.G. before the big collapse. Great New York attorney general. What ever happened to him?

TALF (Term Asset-Backed Securities Loan Facility) — This is the thing Tim Geithner is doing, and, you know, whatever Tim wants … We like TALF much, much better than TARP, which was the brainchild of former Treasury Secretary Hank Paulson, who had that dumb idea about buying up all the bank’s toxic assets. Which is what Tim is going to do, except it’s going to be way cooler.

Financial industry — We still hate Wall Street. Although when it sends the stock market up, it makes us like Tim Geithner even more.

In summary, there appears to be only two constants in our ever-changing world. One is that Barack Obama is going to be on television every day forever. No venue is too strange. Soon, he’ll be on “Dancing With the Stars” (“And now, doing the Health Care, Energy and Education tango …”) or delivering the weather report. (“Here we see a wave of systemic change, moving across the nation …”)

The other immutable truth is that we always need to have somebody we can be really, really angry at. The A.I.G. bonus-takers have pretty much worn out their 15 minutes. In an Op-Ed article in The Times on Wednesday, Jake DeSantis, one of the executive vice presidents of the company’s dreaded financial-products unit, offered up his side of the story about how even though he had never met a credit default swap in his life, he had promised to stay around to help clean up the mess for $1 a year and a bonus at the end of the tunnel. And then, suddenly, there was the head of the company throwing him to the wolves, or at least to the House Financial Services Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises.

It reminded me of a time when I was in college and got a summer temp job at the purchasing department of a widget factory in Brooklyn. The office manager, who stayed hidden away in his office, had given all the power to one assistant manager, the golden Colin from England, while Colin’s two co-workers, Bernie and Frank, had nothing to do but sit around grinding their teeth.

Colin was on vacation when I arrived, and as time went on, it became increasingly clear that he was never coming back. The manager stayed in his office — and in denial. The factory started running out of everything, including toilet paper. I invented a new filing system in which all incoming letters and phone messages were divided by the number of times the petitioner had previously attempted to contact Colin. It was a big hit.

The next time I came through Brooklyn, the widget factory was gone. But suppose that instead of a small manufacturing firm, it had been an international insurance giant and Colin was selling complicated financial products based on risky mortgages? Trust me, Bernie and Frank would have expected to be paid really big bucks for cleaning up after him.

The country needs a new, improved villain. This is not a problem in New York, since we have a state government so awful that we barely noticed this week when prosecutors revealed that the state pension fund scandal is intertwined with a deal to sell DVDs of a movie called “Chooch.” The governor is terrible, and the Legislature is terrible and — we need Eliot Spitzer! Whatever happened to him, anyway?

In Congress, the person currently giving the Obama administration heartburn is Senator Kent Conrad of North Dakota, the chairman of the Budget Committee. But this is a guy whose biggest claim to fame is that when making a budget speech, he uses so many charts that the Senate gave him his own printing equipment. I am not seeing a great target for pitchfork-waving.

Something will turn up. If Tim (Great Guy!) Geithner’s bank bailout plan works, it will mean quadrillions of dollars in profits for hedge fund managers who are already billionaires, and I can absolutely guarantee you that we are not going to be pleased. Then we can turn on him again. And Eliot Spitzer can become the next secretary of the Treasury.

Here’s Mr. Cohen:

Pressure on President Obama to recast the failed American approach to Israel-Palestine is building from former senior officials whose counsel he respects.

Following up on a letter dated Nov. 6, 2008, that was handed to Obama late last year by Paul Volcker, now a senior economic adviser to the president, these foreign policy mandarins have concluded a “Bipartisan Statement on U.S. Middle East Peacemaking” that should become an essential template.

Deploring “seven years of absenteeism” under the Bush administration, they call for intense American mediation in pursuit of a two-state solution, “a more pragmatic approach toward Hamas,” and eventual U.S. leadership of a multinational force to police transitional security between Israel and Palestine.

The 10 signatories — of both the four-page letter and the report — include Volcker himself, former national security advisers Brent Scowcroft and Zbigniew Brzezinski, former Senator Chuck Hagel, former World Bank President James Wolfensohn, former U.S. Trade Representative Carla Hills, former Congressman Lee Hamilton and former U.S. ambassador to the United Nations Thomas Pickering.

My understanding is their thinking coincides in significant degree with that of both George Mitchell, Obama’s Middle East envoy, and Gen. James Jones, Obama’s national security adviser who worked on security issues with Israelis and Palestinians in the last year of the Bush administration, an often frustrating experience.

This overlap gives the report particular significance.

Of Hamas, the target of Israel’s futile pounding of Gaza, the eminent Group of 10 writes that, “Shutting out the movement and isolating Gaza has only made it stronger and Fatah weaker.”

They urge a fundamental change: “Shift the U.S. objective from ousting Hamas to modifying its behavior, offer it inducements that will enable its more moderate elements to prevail, and cease discouraging third parties from engaging with Hamas in ways that might clarify the movement’s view and test its behavior.”

Although this falls short of my own recommendation that the United States itself — rather than European allies — engage with moderate elements of Hamas, such a shift is critical.

Without Hamas’s involvement, there can be no Middle East peace. Mahmoud Abbas, the Fatah leader and president of the Palestinian Authority, is a beleaguered figure.

The report goes further: “Cease discouraging Palestinian national reconciliation and make clear that a government that agrees to a cease-fire with Israel, accepts President Mahmoud Abbas as the chief negotiator and commits to abiding by the results of a national referendum on a future peace agreement would not be boycotted or sanctioned.”

In other words, stop being hung up on prior Hamas recognition of Israel and watch what it does rather than what it says. If Hamas is part of, and remains part of, a Palestinian unity government that makes a peace deal with Israel, that’s workable.

Henry Siegman, the president of the U.S./Middle East Project, whose chairman is Scowcroft and board includes all 10 signatories, told me that he met recently with Khaled Meshal, the political director of Hamas in Damascus.

Meshal told him, and put in writing, that although Hamas would not recognize Israel, it would remain in a Palestinian national unity government that reached a referendum-endorsed peace settlement with Israel.

De facto, rather than de jure, recognition can be a basis for a constructive relationship, as Israel knows from the mutual benefits of its shah-era dealings with Iran.

Israeli governments have negotiated a two-state solution although they included religious parties that do not recognize Palestinians’ right to statehood.

“But,” Siegman said, “if moderates within Hamas are to prevail, a payoff is needed for their moderation. And until the U.S. provides one, there will be no Palestinian unity government.”

The need for that incentive is reflected in the four core proposals of what the authors call “a last chance for a two-state Israel-Palestine agreement.” Taken together, they constitute the start of an essential rebalancing of America’s Bush-era Israel-can-do-no-wrong policy.

The first is clear U.S. endorsement of a two-state solution based on the lines of June 4, 1967, with minor, reciprocal, agreed land swaps where necessary. That means removing all West Bank settlements except in some heavily populated areas abutting Jerusalem — and, of course, halting the unacceptable ongoing construction of new ones.

The second is establishing Jerusalem as home to the Israeli and Palestinian capitals. Jewish neighborhoods would be under Israeli sovereignty and Arab neighborhoods under Palestinian sovereignty, with special arrangements for the Old City providing unimpeded access to holy sites for all communities.

The third is major financial compensation and resettlement assistance in a Palestinian state for refugees, coupled with some formal Israeli acknowledgment of responsibility for the problem, but no generalized right of return.

The fourth is the creation of an American-led, U.N.-mandated multinational force for a transitional period of up to 15 years leading to full Palestinian control of their security.

Obama has told Volcker that he would, in time, meet with the signatories of the letter. He should do so once an Israeli government is in place. And then he should incorporate their ideas in laying out the new realism of American commitment to Palestine and the new price of American commitment to Israel.

And now here’s Mr. Kristof:

Ever wonder how financial experts could lead the world over the economic cliff?

One explanation is that so-called experts turn out to be, in many situations, a stunningly poor source of expertise. There’s evidence that what matters in making a sound forecast or decision isn’t so much knowledge or experience as good judgment — or, to be more precise, the way a person’s mind works.

More on that in a moment. First, let’s acknowledge that even very smart people allow themselves to be buffaloed by an apparent “expert” on occasion.

The best example of the awe that an “expert” inspires is the “Dr. Fox effect.” It’s named for a pioneering series of psychology experiments in which an actor was paid to give a meaningless presentation to professional educators.

The actor was introduced as “Dr. Myron L. Fox” (no such real person existed) and was described as an eminent authority on the application of mathematics to human behavior. He then delivered a lecture on “mathematical game theory as applied to physician education” — except that by design it had no point and was completely devoid of substance. However, it was warmly delivered and full of jokes and interesting neologisms.

Afterward, those in attendance were given questionnaires and asked to rate “Dr. Fox.” They were mostly impressed. “Excellent presentation, enjoyed listening,” wrote one. Another protested: “Too intellectual a presentation.”

A different study illustrated the genuflection to “experts” another way. It found that a president who goes on television to make a case moves public opinion only negligibly, by less than a percentage point. But experts who are trotted out on television can move public opinion by more than 3 percentage points, because they seem to be reliable or impartial authorities.

But do experts actually get it right themselves?

The expert on experts is Philip Tetlock, a professor at the University of California, Berkeley. His 2005 book, “Expert Political Judgment,” is based on two decades of tracking some 82,000 predictions by 284 experts. The experts’ forecasts were tracked both on the subjects of their specialties and on subjects that they knew little about.

The result? The predictions of experts were, on average, only a tiny bit better than random guesses — the equivalent of a chimpanzee throwing darts at a board.

“It made virtually no difference whether participants had doctorates, whether they were economists, political scientists, journalists or historians, whether they had policy experience or access to classified information, or whether they had logged many or few years of experience,” Mr. Tetlock wrote.

Indeed, the only consistent predictor was fame — and it was an inverse relationship. The more famous experts did worse than unknown ones. That had to do with a fault in the media. Talent bookers for television shows and reporters tended to call up experts who provided strong, coherent points of view, who saw things in blacks and whites. People who shouted — like, yes, Jim Cramer!

Mr. Tetlock called experts such as these the “hedgehogs,” after a famous distinction by the late Sir Isaiah Berlin (my favorite philosopher) between hedgehogs and foxes. Hedgehogs tend to have a focused worldview, an ideological leaning, strong convictions; foxes are more cautious, more centrist, more likely to adjust their views, more pragmatic, more prone to self-doubt, more inclined to see complexity and nuance. And it turns out that while foxes don’t give great sound-bites, they are far more likely to get things right.

This was the distinction that mattered most among the forecasters, not whether they had expertise. Over all, the foxes did significantly better, both in areas they knew well and in areas they didn’t.

Other studies have confirmed the general sense that expertise is overrated. In one experiment, clinical psychologists did no better than their secretaries in their diagnoses. In another, a white rat in a maze repeatedly beat groups of Yale undergraduates in understanding the optimal way to get food dropped in the maze. The students overanalyzed and saw patterns that didn’t exist, so they were beaten by the rodent.

The marketplace of ideas for now doesn’t clear out bad pundits and bad ideas partly because there’s no accountability. We trumpet our successes and ignore failures — or else attempt to explain that the failure doesn’t count because the situation changed or that we were basically right but the timing was off.

For example, I boast about having warned in 2002 and 2003 that Iraq would be a violent mess after we invaded. But I tend to make excuses for my own incorrect forecast in early 2007 that the troop “surge” would fail.

So what about a system to evaluate us prognosticators? Professor Tetlock suggests that various foundations might try to create a “trans-ideological Consumer Reports for punditry,” monitoring and evaluating the records of various experts and pundits as a public service. I agree: Hold us accountable!

If that ever comes to pass Bloody Billy Kristol will spend the rest of his life asking “You want fries with that?”

The Moustache of Wisdom, flying solo

MoDo is off today, and The Moustache of Wisdom is letting us in on “The Secrets of a Pollster.”  He informs us that Stan Greenberg, who polled for Bill Clinton, Nelson Mandela, Ehud Barak and Tony Blair, says that the best leaders learn from their crashes, adjust, persist and succeed.  Here he is:

Stan Greenberg, one of America’s most experienced pollsters, sums up the key lesson he learned polling for Bill Clinton, Nelson Mandela, Ehud Barak and Tony Blair: “Bold leaders in tumultuous times always have at least one crash.”

They never come out of the box and deliver the scale of progress and change they promise — not because they are cynical, but because events conspire against them and they encounter competing power centers. What distinguishes the best leaders, he says, is that they learn from their crashes, adjust, persist and succeed.

President Obama has hardly crashed. He’s just getting started. And many, many people — at home and abroad — are rooting for him to succeed. But he definitely is navigating tumultuous times. So when Greenberg called to share the lessons from his new book, “Dispatches from the War Room” — an insider’s account about how the world leaders for whom he polled handled their crashes — I thought: “Those insights might be very useful right now.”

Greenberg kicks off with Bill Clinton. One of his most vivid memories was trying to judge how voters would react to Clinton breaking his oft-stated promise to cut middle-class taxes, right after his 1992 election. They held focus groups in New Jersey. What struck him most, said Greenberg, was that these voters “just didn’t believe any politician would cut their taxes.” That wasn’t how they were judging Clinton.

“They didn’t care about his specific promises,” said Greenberg. “They wanted the new president to act in the long-term economic interests of the country. They wanted to make sure everyone was part of the solution, not like in Reagan’s years when the wealthy didn’t pay their fair share. And they wanted to know that the president wouldn’t lose his instinct to look out for ordinary people.”

Lesson: “Don’t be too literal about campaign promises,” said Greenberg. “There is a lot of scope for governing, if the people think you’re acting in the country’s long-term interests and that you’re working for them.”

Tony Blair crashed over New Labor’s core identity as a party. Labor had been out of power for 18 years. It got back in thanks to Blair’s ability to assure voters that they could trust Labor to be fiscally prudent and, simultaneously, to upgrade Britain’s decrepit government hospitals and schools.

In truth, Blair had to do these serially — first fix the economy and then the hospitals and schools. But he implied that he would do them simultaneously. When, three years into his term, the lack of new investment became obvious — crystallized by the story of a cancer patient who could not get a surgery scheduled and by the time she did the cancer had become inoperable — Blair crashed on the issue of trust. “Blair and New Labor were forever associated after that with being more spin than real,” said Greenberg.

Lesson: Be honest with the public early on when facing huge challenges. They will let you off the hook on a literal campaign promise — if you level with them early about the difficulties and how long it will take to see progress.

Ehud Barak became the prime minister of Israel in 1999, and a pillar of his campaign was that Jerusalem must remain Israel’s eternal, undivided capital. Yet, at Camp David with President Clinton in 2000, Barak offered the Palestinians a division of Jerusalem. What was most striking, said Greenberg, was how readily the Israeli public accepted that shift.

“A position that six months earlier was completely off the table — dividing Jerusalem — was now on it,” said Greenberg. Once the taboo against even hinting at dividing Jerusalem was broken, even Likud voters polled by Greenberg started asking: “Why should we want to keep these Palestinian neighborhoods?” Conventional wisdom just fell apart under the logic of it.

Lesson: “Nothing,” said Greenberg, “is off the table for a leader who wants to make a bold move” in the fundamental interest of the country.

Finally, Nelson Mandela. Four years after he became South Africa’s president in 1994, “people were demoralized about the lack of change and felt that the African National Congress had betrayed its promise,” said Greenberg. “It had failed to deliver housing and jobs, but had delivered a lot of corruption and was at risk of losing its moral authority.”

That was hard for liberation movement leaders to swallow, but the humble citizens wanted their now remote leaders to acknowledge their plight. Lesson: Mandela was humble enough to say that we haven’t brought enough change — that even he was disappointed — without threatening the ANC’s claim to govern. “He began to tell a compelling story that explained why advances were slow, pointed to areas of progress and allowed people to be hopeful about future changes,” said Greenberg.

The über-lesson for presidents? You can’t be too honest in describing big problems, too bold in offering big solutions, too humble in dealing with big missteps, too forward in re-telling your story or too gutsy in speaking the previously unspeakable.

Bobo the Military Strategist

Oh, sweet baby Jesus…  Bobo has the floor to himself again today because Bob Herbert is off.  Today, writing from Wardak Province, Afghanistan, he’s putting on his military strategist hat, and becoming an authority on “Combat and Community.”  He says that when you put more boots on the ground in Afghanistan, you not only augment your army’s firing power, you give it the capacity to experiment.  The first sentence alone is enough to give you the image of Bobo popping a chubby, what with that machine gunner’s butt so close to his head…  Here he is.  I’m going to get the brain bleach…

You drive up to the forward operating base in Wardak Province in an armored Humvee, with the machine-gunner sticking up through the roof and his butt swinging on a little perch just by your head. Outside there’s a scraggly downtown, with ragamuffin Afghan children, almost no old people (the median life expectancy is 45) and dust everywhere. The dust of Afghanistan piles up in front of the storefronts and covers the ruins of the buildings destroyed during the Soviet period, or during the civil war or during some lost conflict from centuries past.

The Humvee takes the serpentine path through the checkpoint and you pass a double line of soldiers heading out on foot patrol. There’s a soldier that looks from a distance like a child in gear, but it turns out to be a tiny American woman smiling under her armor, pack and rifle, and you think that of all the great powers who’ve humped their way over these mountains, not another one sent out warriors as unlikely or effective as these.

After the checkpoint, there’s a parking lot with great lines of heavy vehicles. For years, the coalition forces fought this war on the cheap, but that’s changing. The U.S. has just increased troop levels tenfold in Wardak. The parking lots are bursting with hulking machinery, the avalanche of metal America brings to a war it takes seriously.

There’s a line of porta-potties and you’re brought into a plywood room. There are about 25 Army Rangers inside, linebacker types with crew cuts, except for a special-ops guy, Major Moses, who is dark-skinned with a thick beard. These men have been through Iraq, and they now have the habits of counterinsurgency warfare deep in their bones in a way they didn’t just a few years ago.

As they talk, it becomes clear that aside from killing bad guys, they’re also trying to figure out how to reweave Afghan society.

Before the Soviet invasion in 1979, Afghan towns had three parallel authority structures: the tribal elders, the religious clerics and the government representatives. The Soviets decimated the tribes and the indigenous government. That left only the mullahs, and their sudden unchecked prominence helped explain the rise of the Taliban.

The terror and the fall of the Taliban reduced clerical authority, too. By 2002, when the coalition forces arrived, village society was fractured, social capital decimated. The resulting disorder has been a perfect nesting ground for the insurgents. The insurgents are not popular in Afghanistan, the way they sometimes were in Iraq. But they have money, and young men in the villages talk about “taking a Taliban day” — that is, accepting a few hundred bucks to plant an I.E.D.

Between 2002 and 2005, the coalition and the Afghans were slow to recognize the perils of social fragmentation. The general view was that warlordism and civil war were the biggest threats. Therefore, power should be centralized with the national government. The country should be restored through a strong national government spreading outward.

That approach has had some success. The Afghan National Army is the country’s most trusted institution. But it’s also had many shortcomings. The national police force is ineffective. The central government has rarely been able to reweave the social fabric at the village level. Nobody’s been able to establish rule of law or end rampant corruption.

So the Afghans and the coalition are adapting. There’s been a shift to supplement central authorities with village authority structures. Under the National Solidarity Project, villages elect Community Development Councils. Western aid agencies give the councils up to $60,000 to do local projects, but it’s not the projects that matter most. It’s the creation of formal community structures. These projects are up and running in 23,000 villages.

Mohammad Halim Fidai, the governor of Wardak Province, and the guys in the plywood room are creating the Afghan Public Protection Program. Under it, villages would no longer depend solely on the national police sent from Kabul. Local committees would hire their own constabulary to guard schools, bridges and neighborhoods. Alongside just 26 national policemen in the area, there will be 250 local men from the A.P.P.P.

The program is controversial. Many feel it will lead to a return to local militias and warlordism. But if Afghanistan is to stabilize, there have to be local authority structures. The culture of conversation and consensus has to be formalized in institutions. These local structures have to be connected upward to the central state. And that’s beginning to happen amidst the armored Humvees and the daily threat of death.

When you put more boots on the ground, you not only augment your army’s firing power, you give it the capacity to experiment. A few years ago, the good guys had only vague ideas about how to win this war. Now they’re much smarter.

If I want to hear about changes in military tactics in Afghanistan I most assuredly don’t need to hear the news from Bobo.  The only more horrifying choice would be if Bloody Billy Kristol were still polluting the pages of the Times.

Cohen and Krugman

Mr. Cohen, in “From Tehran to Tel Aviv,” says one of the strategic issues of the Obama presidency will be a painful but necessary redefinition of America’s relations with Israel as differences over Iran sharpen.  Mr. Krugman, back from Yurp, writes about “Financial Policy Despair.”  He says if Barack Obama’s bank rescue plan fails, it is unlikely that Congress will come up with more funds to do what should have been done in the first place.  Here’s Mr. Cohen:

With his bold message to Iran’s leaders, President Obama achieved four things essential to any rapprochement.

He abandoned regime change as an American goal. He shelved the so-called military option. He buried a carrot-and-sticks approach viewed with contempt by Iranians as fit only for donkeys. And he placed Iran’s nuclear program within “the full range of issues before us.”

By doing so, Obama made it almost inevitable that one of the defining strategic issues of his presidency will be a painful but necessary redefinition of America’s relations with Israel as differences over Iran sharpen. I will return to that below.

The innovations in the president’s Persian New Year, or Nowruz, overture to Tehran were remarkable. He referred twice to “the Islamic Republic of Iran,” a formulation long shunned, and said that republic, no other, should “take its rightful place in the community of nations.” Here was explicit American acceptance of Iran’s 30-year-old clerical revolution.

He said establishing constructive ties would “not be advanced by threats,” a retreat from his own campaign position that the military option must always remain on the table. Instead he offered “mutual respect.”

I was in Iran in January and February. The visit convinced me that confrontational American high-handedness has been a disaster; that facile analogies between the Iranian regime and the Nazis dishonor six million victims of the Holocaust; that the regime’s provocative rhetoric masks essential pragmatism; and that the best way to help a young, stability-favoring population toward the reform they seek is through engagement.

Obama has now taken all the steps I called for then. The policy changes emerged from an interagency review of the failed Iranian policy of recent years. The shift demanded courage.

One of the people involved in the review told me he had been bombarded by warnings from Israel and Sunni Arab states that engagement with Iran would lead nowhere. Of course they would say that; any Iran breakthrough will shake up current cozy U.S. relationships from Jerusalem to Riyadh.

Obama’s overture represented a victory not only over such lobbying but also over officials’ favoring tightened sanctions or delaying any American initiative until after Iran’s June presidential election.

The hard part has just begun.

Iran’s supreme leader, Ayatollah Ali Khamenei, responded to Obama with a scathing speech at the country’s holiest shrine in Mashad, recalling every past U.S. misdeed, describing prerevolutionary Iran as “a field for the Americans to graze in,” and demanding concrete steps — like a lifting of sanctions — rather than words.

View all that as an opening gambit. Khamenei also quieted the crowd when it began its ritual “Death to America” chant and he said this: “We’re not emotional when it comes to our important matters. We make decisions by calculation.”

That’s right: the mullahs are anything but mad. Calculation will demand that Iran take Obama seriously.

The country’s oil revenue has plunged, its economy is in a mess, its oil and gas installations are aging. It has deepening interests in a stable Iraq and an Afghanistan free of Taliban rule. Its nuclear program involves a measure of brinkmanship that must be carefully managed. Khamenei’s essential role is conservative — the preservation of the revolution. He can only be radical up to a point.

Iran’s apparent inclination to take up a U.S. invitation to attend a conference on Afghanistan later this month may be more significant than Khamenei’s words. In any event, overcoming a 30-year impasse will take time and consistency.

The clock is ticking — and Obama’s will not be the same as that of Israel’s prime minister designate, Benjamin Netanyahu.

Already divergent U.S. and Israeli approaches to Iran were evident in Israeli President Shimon Peres’s coupling of his own Nowruz address to the Iranian people (not its leaders) with a statement predicting that they would rise up and topple “a handful of religious fanatics.”

A senior Israeli official told me Iran has 1,000 kilos of low-enriched uranium and will have 500 more within six months, enough to make a bomb. It could then opt for one of three courses.

Rush for a bomb by shredding the nuclear nonproliferation treaty, adapting its centrifuges and producing enough highly enriched uranium within a year.

Move the process to a secret site, in which case getting a bomb would take longer, perhaps two years.

Or continue making low-enriched uranium so that “it would have enough for 10 bombs if it decides to rush at a later stage.”

And where, I asked, is Israel’s red line? “Once they get to 1,500 kilos, nonproliferation is dead,” he said. And so? “It’s established that when a country that does not accept Israel’s existence has such a program, we will intervene.”

I think there’s some bluster in this. Israel does not want Obama to talk, talk, talk, so it’s suggesting military action could happen in 2009, within nine months.

Still, this much is clear to me: Obama’s new Middle Eastern diplomacy and engagement will involve reining in Israeli bellicosity and a probable cooling of U.S.-Israeli relations. It’s about time. America’s Israel-can-do-no-wrong policy has been disastrous, not least for Israel’s long-term security.

Here’s Prof. Krugman:

Over the weekend The Times and other newspapers reported leaked details about the Obama administration’s bank rescue plan, which is to be officially released this week. If the reports are correct, Tim Geithner, the Treasury secretary, has persuaded President Obama to recycle Bush administration policy — specifically, the “cash for trash” plan proposed, then abandoned, six months ago by then-Treasury Secretary Henry Paulson.

This is more than disappointing. In fact, it fills me with a sense of despair.

After all, we’ve just been through the firestorm over the A.I.G. bonuses, during which administration officials claimed that they knew nothing, couldn’t do anything, and anyway it was someone else’s fault. Meanwhile, the administration has failed to quell the public’s doubts about what banks are doing with taxpayer money.

And now Mr. Obama has apparently settled on a financial plan that, in essence, assumes that banks are fundamentally sound and that bankers know what they’re doing.

It’s as if the president were determined to confirm the growing perception that he and his economic team are out of touch, that their economic vision is clouded by excessively close ties to Wall Street. And by the time Mr. Obama realizes that he needs to change course, his political capital may be gone.

Let’s talk for a moment about the economics of the situation.

Right now, our economy is being dragged down by our dysfunctional financial system, which has been crippled by huge losses on mortgage-backed securities and other assets.

As economic historians can tell you, this is an old story, not that different from dozens of similar crises over the centuries. And there’s a time-honored procedure for dealing with the aftermath of widespread financial failure. It goes like this: the government secures confidence in the system by guaranteeing many (though not necessarily all) bank debts. At the same time, it takes temporary control of truly insolvent banks, in order to clean up their books.

That’s what Sweden did in the early 1990s. It’s also what we ourselves did after the savings and loan debacle of the Reagan years. And there’s no reason we can’t do the same thing now.

But the Obama administration, like the Bush administration, apparently wants an easier way out. The common element to the Paulson and Geithner plans is the insistence that the bad assets on banks’ books are really worth much, much more than anyone is currently willing to pay for them. In fact, their true value is so high that if they were properly priced, banks wouldn’t be in trouble.

And so the plan is to use taxpayer funds to drive the prices of bad assets up to “fair” levels. Mr. Paulson proposed having the government buy the assets directly. Mr. Geithner instead proposes a complicated scheme in which the government lends money to private investors, who then use the money to buy the stuff. The idea, says Mr. Obama’s top economic adviser, is to use “the expertise of the market” to set the value of toxic assets.

But the Geithner scheme would offer a one-way bet: if asset values go up, the investors profit, but if they go down, the investors can walk away from their debt. So this isn’t really about letting markets work. It’s just an indirect, disguised way to subsidize purchases of bad assets.

The likely cost to taxpayers aside, there’s something strange going on here. By my count, this is the third time Obama administration officials have floated a scheme that is essentially a rehash of the Paulson plan, each time adding a new set of bells and whistles and claiming that they’re doing something completely different. This is starting to look obsessive.

But the real problem with this plan is that it won’t work. Yes, troubled assets may be somewhat undervalued. But the fact is that financial executives literally bet their banks on the belief that there was no housing bubble, and the related belief that unprecedented levels of household debt were no problem. They lost that bet. And no amount of financial hocus-pocus — for that is what the Geithner plan amounts to — will change that fact.

You might say, why not try the plan and see what happens? One answer is that time is wasting: every month that we fail to come to grips with the economic crisis another 600,000 jobs are lost.

Even more important, however, is the way Mr. Obama is squandering his credibility. If this plan fails — as it almost surely will — it’s unlikely that he’ll be able to persuade Congress to come up with more funds to do what he should have done in the first place.

All is not lost: the public wants Mr. Obama to succeed, which means that he can still rescue his bank rescue plan. But time is running out.

I wonder if I should go and slit my wrists now, or wait until next week….

Dowd, Friedman, Kristof and Rich

MoDo, in “Toxic R Us,” says the tableau of Michelle Obama hoisting a pitchfork on the South Lawn and warning that the commander in chief would be commandeered into yard work left her wondering if the wrong Obama is in the Oval.  The Moustache of Wisdom asks “Are We Home Alone?”  He says the country is in a once-a-century financial crisis, and the adults at the top have descended into politics worse than usual.  Mr. Kristof writes about “Education’s Ground Zero,” and says Michelle Rhee, the chancellor of schools, has high aims in Washington, D.C., including setting an example for education reform across the country.  Mr. Rich also has a question.  He asks “Has a ‘Katrina Moment’ Arrived?” and says until Barack Obama addresses Americans’ anger with his full arsenal of policy smarts and political gifts, his presidency and our economy will be paralyzed.  Here’s MoDo:

It’s an image that could have come straight out of a McCain campaign ad: Barack Obama growing organic arugula at the White House.

But there was Michelle on Friday, the first day of spring, with a bunch of fifth graders, digging a veggie garden on the South Lawn.

She told The Times there would not be beets, because her husband doesn’t like them, but there would be arugula. And she promised that the entire Obama family, including the president, would go out and pull weeds, “whether they like it or not.”

The tableau of Michelle Obama hoisting a pitchfork on Friday with her sinewy arms and warning that the commander in chief would be commandeered into yard work left me wondering if the wrong Obama is in the Oval.

It’s a time in America’s history where we need less smooth jazz and more martial brass.

Barack Obama prides himself on consensus, soothing warring sides into agreement. But the fury directed at the robber barons by the robbed blind in America has been getting hotter, not cooler. And that’s because the president and his Treasury secretary have been coddling the Wall Street elite, fretting that if they curtail executives’ pay and perks too much, if they make the negotiations with those who siphoned our 401(k)’s too tough, the spoiled Sherman McCoys will run away, the rescue plan will fail and the markets will wither. (Now that Mr. Obama has made $8,605,429 on his books — including $500,000 for letting his memoir be condensed into a kids’ book — maybe he’s lost touch with his hole-in-the-shoe, hole-in-the-Datsun, have-not roots.)

The shafters of the universe have been treated with such kid gloves that they remain obnoxiously oblivious. Vikram “Pandit the Bandit” at Citigroup, which received $50 billion in bailout money, is pulling a Thain, spending $10 million to renovate his Park Avenue offices, complete with a Sub-Zero refrigerator and premium millwork (whatever that is).

Fannie Mae, the mortgage finance behemoth that had $59 billion in losses last year when the government was forced to take it over, and since has asked for $15 billion in taxpayer money, brazenly intends to give $1 million apiece in retention bonuses to four top executives, even though the word retention in a depression is pure Ionesco. Freddie Mac, which has sought $45 billion in aid, has yet to disclose its planned bonuses.

Asked by Jay Leno why our loans to Wall Street haven’t trickled down to Main Street, President Obama conceded that the banks “haven’t started lending it yet.”

Treasury Secretary Tim Geithner, who grew up as a Republican and was head of the New York Fed for five years, sees things from the point of view of that wellspring of masters of the universe, Goldman Sachs. (His Treasury chief of staff was a Goldman lobbyist, who fought then-Senator Obama’s attempt to curb executive compensation — just as Geithner has done within the administration.)

At the New York Fed, Geithner helped preside over the A.I.G. bailout in September. But in October, it was Andrew Cuomo, the New York attorney general, who had to threaten to sue unless A.I.G. canceled $160 million in planned expenses for conferences and a $600 million bonus pool.

Virtually unnoticed amid the bonus imbroglio was A.I.G.’s grudging disclosure that it had funneled $93 billion — more than half its federal money to date — to its high-flying insurees, including Goldman Sachs, Merrill Lynch and a group of European banks.

Goldman Sachs separately got $10 billion in bailout money last year, but recently asserted snootily that it’s doing well enough and doesn’t want our money because of the restrictions attached. Yet as Goldman sneers at the federal money at the front door, it’s taking delivery of billions in no-strings federal money through the back door. Can we taxpayers deduct the difference?

Our gift to Goldman demonstrates why the government’s headless and heedless bailout of A.I.G. is so wrong.

And why are we bailing out foreign banks, including a couple of French ones and UBS, a Swiss bank currently tussling with the I.R.S. because it refuses to hand over the names of thousands of U.S. tax-dodgers?

The issue is how much we must pay to preserve financial stability over all, not how much one company promised to pay. At this point, A.I.G. seems to be the only party paying face value on toxic derivatives.

Ed Liddy was put in charge of an essentially bankrupt company, but he never drove a hard bargain on bonuses or counterparty debts. He honored contracts made by an organization that had become a fraudulent scheme. He could have told the leeches inside the company and out that the world had utterly changed, so the contracts would too — as Michelle would say, “whether they like it or not.”

Here’s The Moustache of Wisdom:

I ran into an Indian businessman friend last week and he said something to me that really struck a chord: “This is the first time I’ve ever visited the United States when I feel like you’re acting like an immature democracy.”

You know what he meant: We’re in a once-a-century financial crisis, and yet we’ve actually descended into politics worse than usual. There don’t seem to be any adults at the top — nobody acting larger than the moment, nobody being impelled by anything deeper than the last news cycle. Instead, Congress is slapping together punitive tax laws overnight like some Banana Republic, our president is getting in trouble cracking jokes on Jay Leno comparing his bowling skills to a Special Olympian, and the opposition party is behaving as if its only priority is to deflate President Obama’s popularity.

I saw Eric Cantor, a Republican House leader, on CNBC the other day, and the entire interview consisted of him trying to exploit the A.I.G. situation for partisan gain without one constructive thought. I just kept staring at him and thinking: “Do you not have kids? Do you not have a pension that you’re worried about? Do you live in some gated community where all the banks will be O.K., even if our biggest banks go under? Do you think your party automatically wins if the country loses? What are you thinking?”

If you want to guarantee that America becomes a mediocre nation, then just keep vilifying every public figure struggling to find a way out of this crisis who stumbles once — like Treasury Secretary Timothy Geithner or A.I.G.’s $1-a-year fill-in C.E.O., Ed Liddy — and you’ll ensure that no capable person enlists in government. You will ensure that every bank that has taken public money will try to get rid of it as fast it can, so as not to come under scrutiny, even though that would weaken their balance sheets and make them less able to lend money. And you will ensure that we’ll never get out of this banking crisis, because the solution depends on getting private money funds to team up with the government to buy up toxic assets — and fund managers are growing terrified of any collaboration with government.

President Obama missed a huge teaching opportunity with A.I.G. Those bonuses were an outrage. The public’s anger was justified. But rather than fanning those flames and letting Congress run riot, the president should have said: “I’ll handle this.”

He should have gone on national TV and had the fireside chat with the country that is long overdue. That’s a talk where he lays out exactly how deep the crisis we are in is, exactly how much sacrifice we’re all going to have to make to get out of it, and then calls on those A.I.G. brokers — and everyone else who, in our rush to heal our banking system, may have gotten bonuses they did not deserve — and tells them that their president is asking them to return their bonuses “for the sake of the country.”

Had Mr. Obama given A.I.G.’s American brokers a reputation to live up to, a great national mission to join, I’d bet anything we’d have gotten most of our money back voluntarily. Inspiring conduct has so much more of an impact than coercing it. And it would have elevated the president to where he belongs — above the angry gaggle in Congress.

“There is nothing more powerful than inspirational leadership that unleashes principled behavior for a great cause,” said Dov Seidman, the C.E.O. of LRN, which helps companies build ethical cultures, and the author of the book “How.” What makes a company or a government “sustainable,” he added, is not when it adds more coercive rules and regulations to control behaviors. “It is when its employees or citizens are propelled by values and principles to do the right things, no matter how difficult the situation,” said Seidman. “Laws tell you what you can do. Values inspire in you what you should do. It’s a leader’s job to inspire in us those values.”

Right now we have an absence of inspirational leadership. From business we hear about institutions too big to fail — no matter how reckless. From bankers we hear about contracts too sacred to break — no matter how inappropriate. And from our immature elected officials we hear about how it was all “the other guy’s fault.” I’ve never talked to more people in one week who told me, “You know, I listen to the news, and I get really depressed.”

Well, help may finally be on the way: one reason we’ve been sidetracked talking about bonuses is because the big issue — the real issue — the president’s comprehensive plan to remove the toxic assets from our ailing banks, which is the key to our economic recovery, has taken a long time to hammer out. So all kinds of lesser issues and clowns have ballooned in importance and only confused people in the vacuum. Hopefully, that plan will be out by Monday, and hopefully the president will pull the country together behind it, and hopefully the lawmakers who have to approve it will remember that this is not a time for politics as usual — and that our country, alas, is not too big to fail. Hopefully …

Here’s Mr. Kristof:

The most unlikely figure in the struggle to reform America’s education system right now is Michelle Rhee.

She’s a Korean-American chancellor of schools in a city that is mostly African-American. She’s an insurgent from the school-reform movement who spent her career on the outside of the system, her nose pressed against the glass — and now she’s in charge of some of America’s most blighted schools. Less than two years into the job, she has transformed Washington into ground zero of America’s education reform movement.

Ms. Rhee, 39, who became Washington’s sixth school superintendent in 10 years, has ousted one-third of the district’s principals, shaken up the system, created untold enemies, improved test scores, and — more than almost anyone else — dared to talk openly about the need to replace ineffective teachers.

“It’s sort of a taboo topic that nobody wants to talk about,” she acknowledged in an interview in her office, not far from the Capitol. “I used to say ‘fire people.’ And they said you can’t say that. Say, ‘separate them from the district’ or something like that.”

But pussyfooting around difficult issues hasn’t helped America’s schoolchildren, and Ms. Rhee is equally candid about the challenges she faces in a district where only 8 percent of eighth graders meet expectations in mathematics.

“D.C. is known as the most dysfunctional and worst-performing school district in the country,” she said, noting that the failures are particularly acute for poor students and members of minority groups. A black child from a low-income family in Washington enters kindergarten at the same level as a comparable child in New York City but is two years behind by the fourth grade, she said.

“Public education is supposed to be the great equalizer in this country,” Ms. Rhee said, adding, “That’s not the reality we have in D.C.” Instead, she said, children who grow up in Georgetown and those who grow up in the poor, mostly black neighborhood of Anacostia “get two wildly different educational experiences. There’s a lot of data showing that we’re utterly failing our children in this district.”

This is Ms. Rhee’s second school year, and there is upheaval and recrimination — but also progress. Test results showed more educational gains last year than in the previous four years put together.

Her aim is for Washington to become, in just six years, one of the best-performing urban school districts in the country, while drastically reducing the black-white achievement gap. “A byproduct of that,” she added, “will be that we will take away from all the other school districts and schools across the country the excuse that because the kids are poor, minority, whatever it might be, that they can’t achieve at the same high levels.”

Ms. Rhee’s weakness is her bedside manner. Her transition from rebel to chancellor has been a little rough, and she is often perceived as trying to mount a cultural revolution in a way that antagonizes teachers and itself can undermine education. Surveys show that when teachers leave their jobs, it’s not just because of low pay but also because of unhappiness with their bosses or work environment. Perhaps recognizing the problem, Ms. Rhee lately has reached out to teachers to try to explain her ideas.

The reform camp is driven partly by research suggesting that great teachers are far more important to student learning than class size, school resources or anything else. One study suggests that if black kids could get teachers from the profession’s most effective quartile for four years in a row, the achievement gap would disappear.

As a result, Ms. Rhee has proposed that teachers surrender some job protections in exchange for the chance to earn more money — up to $131,000 annually, more than double the average salary for an American public school teacher. But teachers worry, not unreasonably, that their performance is difficult to measure, that they will be judged by incompetent principals, and that promised bonuses may later dry up. For now the two sides seem stalemated.

“If we come to an impasse, we’re going to move forward with our reforms anyway,” Ms. Rhee said. “Then it potentially gets uglier.”

She’s right on both counts — it could get very ugly, and Washington’s children shouldn’t suffer indefinitely in broken schools just because of a collective-bargaining stalemate. It would help if President Obama firmly backed Ms. Rhee.

Education reform could be the most potent antipoverty program in the country, and Ms. Rhee represents the vanguard in this struggle to try new tools to revive American schools. Unless we succeed in that effort and get more students through high school and into college, no bank bailout or stimulus package will be enough to preserve America’s global leadership in the long run.

And now here’s Mr. Rich:

A charming visit with Jay Leno won’t fix it. A 90 percent tax on bankers’ bonuses won’t fix it. Firing Timothy Geithner won’t fix it. Unless and until Barack Obama addresses the full depth of Americans’ anger with his full arsenal of policy smarts and political gifts, his presidency and, worse, our economy will be paralyzed. It would be foolish to dismiss as hyperbole the stark warning delivered by Paulette Altmaier of Cupertino, Calif., in a letter to the editor published by The Times last week: “President Obama may not realize it yet, but his Katrina moment has arrived.”

Six weeks ago I wrote in this space that the country’s surge of populist rage could devour the president’s best-laid plans, including the essential Act II of the bank rescue, if he didn’t get in front of it. The occasion then was the Tom Daschle firestorm. The White House seemed utterly blindsided by the public’s revulsion at the moneyed insiders’ culture illuminated by Daschle’s post-Senate career. Yet last week’s events suggest that the administration learned nothing from that brush with disaster.

Otherwise it never would have used Lawrence Summers, the chief economic adviser, as a messenger just as the A.I.G. rage was reaching a full boil last weekend. Summers is so tone-deaf that he makes Geithner seem like Bobby Kennedy.

Bob Schieffer of CBS asked Summers the simple question that has haunted the American public since the bailouts began last fall: “Do you know, Dr. Summers, what the banks have done with all of this money that has been funneled to them through these bailouts?” What followed was a monologue of evasion that, translated into English, amounted to: Not really, but you little folk needn’t worry about it.

Yet even as Summers spoke, A.I.G. was belatedly confirming what he would not. It has, in essence, been laundering its $170 billion in taxpayers’ money by paying off its reckless partners in gambling and greed, from Goldman Sachs and Citigroup on Wall Street to Société Générale and Deutsche Bank abroad.

Summers was even more highhanded in addressing the “retention bonuses” handed to the very employees who brokered all those bad bets. After reciting the requisite outrage talking point, he delivered a patronizing lecture to viewers of ABC’s “This Week” on how our “tradition of upholding law” made it impossible to abrogate the bonus agreements. It never occurred to Summers that Americans might know that contracts are renegotiated all the time — most conspicuously of late by the United Automobile Workers, which consented to givebacks as its contribution to the Detroit bailout plan. Nor did he note, for all his supposed reverence for the law, that the A.I.G. unit being rewarded with these bonuses is now under legal investigation by British and American authorities.

Within 24 hours, Summers’s stand was discarded by Obama, who tardily (and impotently) vowed to “pursue every single legal avenue” to block the bonuses. The question is not just why the White House was the last to learn about bonuses that Democratic congressmen had sought hearings about back in December, but why it was so slow to realize that the public’s anger couldn’t be sated by Summers’s legalese or by constant reiteration of the word outrage. By the time Obama acted, even the G.O.P. leader Mitch McConnell was ahead of him in full (if hypocritical) fulmination.

David Axelrod tried to rationalize the lagging response when he told The Washington Post last week that “people are not sitting around their kitchen tables thinking about A.I.G.,” but are instead “thinking about their own jobs.” While that’s technically true, it misses the point. Of course most Americans don’t know how A.I.G. brought the world’s financial system to near-ruin or what credit-default swaps are. They may not even know what A.I.G. stands for. But Americans do make the connection between their fears about their own jobs and their broad understanding of the A.I.G. debacle.

They know that the corporate bosses who may yet lay them off have sometimes been as obscenely overcompensated for failure as Wall Street’s bonus babies. As The Wall Street Journal reported last week, chief executives at businesses as diverse as Texas Instruments and the home builder Hovnanian Enterprises have received millions in bonuses even as their companies’ shares have lost more than half their value.

Since Americans get the big picture of this inequitable system, that grotesque reality dwarfs any fine print. That’s why it doesn’t matter that the disputed bonuses at A.I.G. amount to less than one-tenth of one percent of its bailout. Or that CNBC — with 300,000 viewers on a typical day by Nielsen’s measure — is a relatively minor player in the crash. Or that Edward Liddy had nothing to do with A.I.G.’s collapse, or that John Thain, of the celebrated trash can, arrived after, not before, others wrecked Merrill Lynch.

These prominent players are just the handiest camera-ready triggers for the larger rage. Passions are now so hot that even Bernie Madoff’s crimes began to pale as we turned our attention to A.I.G.’s misdeeds, just as A.I.G. will fade when the next malefactor surfaces.

What made Jon Stewart’s takedown of Jim Cramer resonate was less his specific brief against CNBC’s cheerleading for bad stocks than his larger indictment of the gaping economic inequality that defined the bubble. As Stewart said, there were “two markets” — the long-term market that Americans earnestly thought would sustain their 401(k)’s, and the fast-moving, short-term “real market” in the back room where high-rolling insiders wagered “giant piles of money” and brought down everyone with them.

No one is more commanding on this subject than our president. In his town-hall meeting in Costa Mesa, Calif., on Wednesday, he described the A.I.G. bonuses as merely a symptom of “a culture where people made enormous sums of money taking irresponsible risks that have now put the entire economy at risk.” But rhetoric won’t tamp down the anger out there, and neither will calculated displays of presidential “outrage.” We must have governance to match the message.

To get ahead of the anger, Obama must do what he has repeatedly promised but not always done: make everything about his economic policies transparent and hold every player accountable. His administration must start actually answering the questions that officials like Geithner and Summers routinely duck.

Inquiring Americans have the right to know why it took six months for us to learn (some of) what A.I.G. did with our money. We need to understand why some of that money was used to bail out foreign banks. And why Goldman, which declared that its potential losses with A.I.G. were “immaterial,” nonetheless got the largest-known A.I.G. handout of taxpayers’ cash ($12.9 billion) while also receiving a TARP bailout. We need to be told why retention bonuses went to some 50 bankers who not only were in the toxic A.I.G. unit but who left despite the “retention” jackpots. We must be told why taxpayers have so little control of the bailed-out financial institutions that we now own some or most of. And where are the M.R.I.’s from those “stress tests” the Treasury Department is giving those banks?

That’s just a short list. In general, it’s hard to imagine taxpayers shelling out billions for a second bank bailout unless there’s a full accounting of every dime of the first, and true transparency for the new plan whose rollout is becoming the most attenuated striptease since the heyday of Gypsy Rose Lee.

Another compelling question connects all of the above: why has there been so little transparency and so much evasiveness so far? The answer, I fear, is that too many of the administration’s officials are too marinated in the insiders’ culture to police it, reform it or own up to their own past complicity with it.

The “dirty little secret,” Obama told Leno on Thursday, is that “most of the stuff that got us into trouble was perfectly legal.” An even dirtier secret is that a prime mover in keeping that stuff legal was Summers, who helped torpedo the regulation of derivatives while in the Clinton administration. His mentor Robert Rubin, no less, wrote in his 2003 memoir that Summers underestimated how the risk of derivatives might multiply “under extraordinary circumstances.”

Given that Summers worked for a secretive hedge fund, D. E. Shaw, after he was pushed out of Harvard’s presidency at the bubble’s height, you have to wonder how he can now sell the administration’s plan for buying up toxic assets with the help of hedge funds. It will look like another giveaway to his own insiders’ club. As for Geithner, people might take him more seriously if he gave a credible account of why, while at the New York Fed, he and the Goldman alumnus Hank Paulson let Lehman Brothers fail but saved the Goldman-trading ally A.I.G.

As the nation’s anger rose last week, the president took responsibility for what’s happening on his watch — more than he needed to, given the disaster he inherited. But in the credit mess, action must match words. To fall short would be to deliver us into the catastrophic hands of a Republican opposition whose only known economic program is to reject job-creating stimulus spending and root for Obama and, by extension, the country to fail. With all due deference to Ponzi schemers from Madoff to A.I.G., this would be the biggest outrage of them all.