Archive for the ‘Nocera’ Category

Cohen, Nocera and Bruni

August 19, 2014

In “Ambivalence About America” Mr. Cohen tells us that even as Europeans rage at the United States, they love its products.  Mr. Nocera tells us about “The Man Who Blew the Whistle.”  He says when the S.E.C. announced last month that it was awarding $400,000 to a whistle-blower, it didn’t name the recipient per the Dodd-Frank law. His name is Bill Lloyd, and Mr. Nocera gives us his story.  Mr. Bruni tells us all about “The Trouble With Tenure” and says teacher job protections are being challenged, and a lawmaker and former school principal explains why that’s good.  Here’s Mr. Cohen:

Attitudes in Europe toward an America that is regrouping are marked today by extreme ambivalence. Europeans have long been known for finishing their diatribes about the United States by asking how they can get their child into Stanford. These days, European after-dinner conversation tends to be dominated by discussion of the latest episode of “House of Cards” or “Homeland” or “Mad Men.” A French diplomat told me that every meeting he attended at the White House during his tour in Washington ended with one of his party asking if it might be possible to see the West Wing. He found it embarrassing.

Europeans complain of the personal data stored or the tax loopholes exploited by the likes of Amazon, Facebook, Starbucks, Google and Twitter, but they are hooked on them all. Google, as recently reported by my colleague Mark Scott, now has an 85 percent share of search in Europe’s largest economies, including Germany, Britain and France, whereas its share of the American market is about 67 percent. American tech companies operate seven of the 10 most visited websites in Europe. Rage at the practices of the National Security Agency is outweighed by addiction to a cyberuniverse dominated by American brands.

The magnetism of Silicon Valley may suggest that the United States, a young nation still, is Rome at the height of its power. American soft power is alive and well. America’s capacity for reinvention, its looming self-sufficiency in energy, its good demographics and, not least, its hold on the world’s imagination, all suggest vigor.

But geostrategic shifts over the past year indicate the contrary: that the United States is Imperial Rome, A.D. 376, with various violent enemies playing the role of the Visigoths, Huns, Vandals et al.; the loss at home of what Edward Gibbon, the historian of Rome’s fall, called “civic virtue,” as narrow interests paralyze politics; the partial handover of American security to private military contractors (just as a declining Rome increasingly entrusted its defense to mercenaries); the place of plunder rather than productiveness in the economy; and the apparent powerlessness of a leader given to talk of the limits of what the United States can do. There is no record of the Emperor Valens’s saying, as Obama did, “You hit singles, you hit doubles,” but perhaps he thought it.

Ambivalence is not peculiar to Europe, of course. To heck with the world’s problems, many Americans now say, we have done our share over all these decades of Pax Americana. If China and India are really rising, let them take responsibility for global security, as America took the mantle from Britain in 1945.

Barack Obama — professional, practical and prudent — would appear to suit this American zeitgeist. He may not be managing decline but he is certainly resisting overreach. He is not the decider. He is the restrainer.

Why, then, is Obama’s no-stupid-stuff approach to the globe so unpopular? Fifty-eight percent of Americans in a recent New York Times/CBS News poll disapproved of his handling of foreign policy, the highest of his presidency. A strange duality seems to be at work. Americans want the troops to come home. They want investment to prioritize domestic jobs, education, health care and infrastructure.

Yet many seem to feel Obama is selling the nation short. They want a president to lead, not be a mere conduit for their sentiments. Americans, as citizens of a nation that represents an idea, are optimistic by nature. It may be true that there is no good outcome in Syria, and certainly no easy one. It may be that Egyptian democracy had to be stillborn. It may be that Vladimir Putin annexes Crimea because he can. Still, Americans do not like the message that it makes sense to pull back and let the world do its worst. America’s bipolarity sees recent bitter experience vying with the country’s innermost nature, its can-do aspiration to be a “city upon a hill.”

It is not easy to read this world of bipolarity (both European and American), Jihadi Springs and Chinese assertiveness. It is too simple, and probably wrong, to say that the United States is in decline.

But Pax Americana is in decline. America’s readiness to use its power to stabilize the world — the current bombing of the Islamic State in Iraq and Syria notwithstanding — is fading. For that reason, the world is more dangerous than it has been in a long time. The waning under Obama of the credibility of American power has created a vacuum no magnetic soft power fills.

The pendulum always swings too far. Obama the restrainer has been the great corrective to Bush the decider. Far from the magician imagined back in 2008, Obama has been the professional moderator. But the president has gone too far; and in so doing has undersold the nation, encouraged foes, disappointed allies, and created doubts over American power that have proved easy to exploit.

Immediately after this was a notation that Bobo was off today, so I guess Mr. Cohen had to send in his screed and do the saber-rattling and dick swinging instead.  Here’s Mr. Nocera:

Late last month, the Securities and Exchange Commission issued an oblique press release announcing that it was awarding an unnamed whistle-blower $400,000 for helping expose a financial fraud at an unnamed company. The money was the latest whistle-blower award — there have been 13 so far — paid as part of the Dodd-Frank financial reform law, which includes both protections for whistle-blowers and financial awards when their information leads to fines of more than $1 million.

The law also prevents the S.E.C. from doing anything to publicly identify the whistle-blowers — hence, the circumspect press release. But through a mutual friend, I discovered the identity of this particular whistle-blower, who, it turned out, was willing to tell his story.

His name is Bill Lloyd. He is 56 years old, and he spent 22 years as an agent for MassMutual Financial Group, the insurance company based in Springfield, Mass. Although companies often label whistle-blowers as disgruntled employees, Lloyd didn’t fit that category. On the contrary, he liked working for MassMutual, and he was a high performer. He also is a straight arrow — “a square,” said the mutual friend who introduced us — who cares about his customers; when faced with a situation where his customers were likely to get ripped off, he couldn’t look the other way.

In September 2007, at a time when money was gushing into variable annuities, MassMutual added two income guarantees to make a few of its annuity products especially attractive to investors. Called Guaranteed Income Benefit Plus 6 and Guaranteed Income Benefit Plus 5, they guaranteed that the annuity income stream would grow to a predetermined cap regardless of how the investment itself performed.

Then, upon retirement, the investors had the right to take 6 percent (or 5 percent, depending on the product) of the cap for as long as they wanted or until it ran out of money, and still be able, at some point, to annuitize it. It is complicated, but the point is that thanks to the guarantee, the money was never supposed to run out. That is what the prospectus said, and it is what those in the sales force, made up of people like Lloyd, were taught to sell to customers. It wasn’t long before investors had put $2.5 billion into the products.

The following July, Lloyd — and a handful of others in the sales force — discovered, to their horror, that the guarantee didn’t work as advertised. In fact, because of the market’s fall, it was a near-certainty that thousands of customers were going to run through the income stream within seven or eight years of withdrawing money.

Lloyd did not immediately run to the S.E.C. Rather, he dug in at MassMutual and, as the S.E.C. press release put it, did “everything feasible to correct the issue internally.” For a while, he thought he was going to have success, but, at a certain point, someone stole the files he had put together on the matter and turned them over to the Financial Industry Regulatory Authority, which is the industry’s self-regulatory body. It was only when the regulatory authority failed to act that his lawyer told him about the whistle-blower provisions in Dodd-Frank and he went to the S.E.C., which began its own investigation.

The Dodd-Frank law has provisions intended to protect whistle-blowers from retaliation, but there are certain aspects of being a whistle-blower that it can’t do anything about. “People started treating me like a leper,” recalls Lloyd. “They would see me coming and turn around and walk in the other direction.” Convinced that the company was laying the groundwork to fire him, he quit in April 2011, a move that cost him both clients and money. (Lloyd has since found employment with another financial institution. For its part, MassMutual says only that “we are pleased to have resolved this matter with the S.E.C.”)

In November 2012, MassMutual agreed to pay a $1.6 million fine; Lloyd’s $400,000 award is 25 percent of that. It was a slap on the wrist, but more important, the company agreed to lift the cap. This will cost MassMutual a lot more, but it will protect the investors who put their money — and their retirement hopes — on MassMutual’s guarantees. Thanks to Lloyd, the company has fixed the defect without a single investor losing a penny.

Ever since the passage of Dodd-Frank reform, the financial industry has been none too happy about the whistle-blower provisions, and there have been rumblings that congressional Republicans might try to roll back some of it. The S.E.C. now has an Office of the Whistleblower, and a website where potential whistle-blowers can report fraud. It has given out $16 million in whistle-blower awards.

There are, without question, parts of the Dodd-Frank law that are problematic, not least the provisions dealing with the Too Big to Fail institutions.

But the whistle-blower provisions? They are working as intended. That is the moral of Bill Lloyd’s story.

And now here’s Mr. Bruni, writing from Denver:

Mike Johnston’s mother was a public-school teacher. So were her mother and father. And his godfather taught in both public and private schools.

So when he expresses the concern that we’re not getting the best teachers into classrooms or weeding out the worst performers, it’s not as someone who sees the profession from a cold, cynical distance.

What I hear in his voice when he talks about teaching is reverence, along with something else that public education could use more of: optimism.

He rightly calls teachers “the single most transformative force in education.”

But the current system doesn’t enable as many of them as possible to rise to that role, he says. And a prime culprit is tenure, at least as it still exists in most states.

“It provides no incentive for someone to improve their practice,” he told me last week. “It provides no accountability to actual student outcomes. It’s the classic driver of, ‘I taught it, they didn’t learn it, not my problem.’ It has a decimating impact on morale among staff, because some people can work hard, some can do nothing, and it doesn’t matter.”

I sat down with Johnston, a Democrat who represents a racially diverse chunk of this city in the State Senate, because he was the leading proponent of a 2010 law that essentially abolished tenure in Colorado. To earn what is now called “non-probationary status,” a new teacher must demonstrate student progress three years in a row, and any teacher whose students show no progress for two consecutive years loses his or her job protection.

The law is still being disputed and has not been fully implemented. But since its enactment, a growing number of states have chipped away at traditional tenure or forged stronger links between student performance and teacher evaluations. And the challenges to tenure have gathered considerable force, with many Democrats defying teachers unions and joining the movement.

After a California judge’s recent ruling that the state’s tenure protections violated the civil rights of children by trapping them with ineffective educators in a manner that “shocks the conscience,” Arne Duncan, the education secretary, praised the decision. Tenure even drew scrutiny from Whoopi Goldberg on the TV talk show “The View.” She repeatedly questioned the way it sometimes shielded bad teachers.

“Parents are not going to stand for it anymore,” she said. “And you teachers, in your union, you need to say, ‘These bad teachers are making us look bad.’ ”

Johnston spent two years with Teach for America in Mississippi in the late 1990s. Then, after getting a master’s in education from Harvard, he worked for six years as a principal in public schools in the Denver area, including one whose success drew so much attention that President Obama gave a major education speech there during his 2008 presidential campaign.

Johnston said that traditional tenure deprived principals of the team-building discretion they needed.

“Do you have people who all share the same vision and are willing to walk through the fire together?” he said. Principals with control over that coax better outcomes from students, he said, citing not only his own experience but also the test scores of kids in Harlem who attend the Success Academy Charter Schools.

“You saw that when you could hire for talent and release for talent, you could actually demonstrate amazing results in places where that was never thought possible,” he said. “Ah, so it’s not the kids who are the problem! It’s the system.”

When job protections are based disproportionately on time served, he said, they don’t adequately inspire and motivate. Referring to himself and other tenure critics, he said, “We want a tenure system that actually means something, that’s a badge of honor you wear as one of the best practitioners in the field and not just because you’re breathing.”

There are perils to the current tenure talk: that it fails to address the intense strains on many teachers; that it lays too much fault on their doorsteps, distracting people from other necessary reforms.

But the discussion is imperative, because there’s no sense in putting something as crucial as children’s education in the hands of a professional class with less accountability than others and with job protections that most Americans can only fantasize about.

We need to pay good teachers much more. We need to wrap the great ones in the highest esteem. But we also need to separate the good and the great from the bad.

Johnston frames it well.

“Our focus is not on teachers because they are the problem,” he said. “Our focus is on teachers because they are the solution.”

Nocera and Collins

August 9, 2014

In “This Is Reform?” Mr. Nocera says the real reformer is Judge Claudia Wilken, not the college sports establishment.  In “It’s a Can’t-Lose Year” Ms. Collins says seriously, people. It’s only a bad year if you’re Santa Claus.  Here’s Mr. Nocera:

Too little, too late.

On Thursday, the 18 members of the N.C.A.A.’s Division 1 board of directors voted 16 to 2 to allow the five richest conferences to play by their own rules, at least a little bit.

Those who have been advocating this “reform” — especially the athletic directors and conference commissioners of the Big 5 conferences — have talked endlessly about how it is all about giving the athletes at the 65 big-time schools that make up their conferences a better deal.

If only. To be sure, the new Division 1 plan would give the players some help that they haven’t had before. The schools would be able to offer their athletes a small stipend so their athletic scholarships would cover the “full cost of attendance.” They could pass rules giving their athletes better medical insurance. The players could gain the ability to hire agents and advisers while they are still playing college ball. And so on.

But these changes hardly constitute wholesale reform. Rather, the big conferences thought they were doing the minimum they could get away with to make their problems go away, even as lawsuits have been bearing down on them, a union drive has taken place among the Northwestern University football players, and critics have given full-throated voice to the enormous inequities in big-time college football and men’s basketball, the two sports that generate billions of dollars for everyone in college athletics except the athletes themselves.

Bob Bowlsby, the commissioner of the Big 12, admitted as much to my colleague Juliet Macur the other day. He told her, as she put it in her Times column on Friday, that the conferences “had to make a pre-emptive move to try to save themselves.” Precisely.

As it turns out, it didn’t work. On Friday, in California, Judge Claudia Wilken, who presided over the so-called O’Bannon case in June, ruled that, by limiting the amount of scholarship money the players could get, the N.C.A.A. was in violation of the nation’s antitrust laws. She ruled that not only should players get the full cost of attendance, but that trust funds should be set up for players that could contain $5,000 a year. That may not sound like much, but according to the plaintiffs’ lawyers I spoke to, it could add up to some $300 million.

In a recent article on the sports website Deadspin, the economist Andy Schwarz shrewdly noted that there are actually two very distinct schools of N.C.A.A. critics. He called them Team Reform and Team Market.

Team Reform, he wrote, consists of those who believe that college sports have gotten out of hand, and are not reflective of the values of higher education. They want to put the genie back in the bottle — and they are unlikely to be happy with the judge’s decision.

Team Market, to which Schwarz (and I) belong, believes that there’s nothing all that wrong with commercialized college sports — which has tens of millions of followers, after all — so long as the value, as he puts it, goes to the value creators, which most definitely include the players. Team Market is thrilled with the judge’s decision.

The N.C.A.A. and the big-time college sports establishment are not terribly worried about Team Reform, which has generally been toothless and has no real way to effect its agenda. But they have long been terrified of Team Market, which has the potential to truly change the nature of college sports. The O’Bannon case is only the first lawsuit to go to trial; there are other antitrust lawsuits coming down the pike that could force even bigger changes.

I know there are those who complain that all these changes will allow the rich in college sports to becoming richer, at the expense of all the other schools in Division I. To which I say: so what.

In fact, I think that could potentially be a good thing. If you separate off the 65 schools in the Big 5 conferences — plus a few others like Boise State in football and the University of Connecticut in basketball — and allow their athletic departments to become ever richer and more powerful, they will be more easily seen for what they are: a form of professionalized and commercialized entertainment that has very little to do with higher education. They are the ones that can afford to put money in trust for players — and that is what is likely to happen. They are not going to suddenly join Team Reform.

At the same time, the also-ran schools may be forced to rethink athletics entirely. Unable to pay their players, perhaps they’ll decide that the better part of valor is to de-emphasize sports and make them truly collegiate activities rather than part of a multibillion dollar entertainment complex.

Ultimately the Big 5 conferences hoped the changes they were making would be the last in a process that would shut off further reform. As we learned on Friday, it is more likely to be just the beginning.

Now here’s Ms. Collins:

Wow, it appears that Republicans in Tennessee just gave a vote of confidence to a right-wing congressman-doctor who has a history of having sex with his patients and encouraging the women in his life to end inconvenient pregnancies by abortion.

This would be Representative Scott DesJarlais, one of the most conservative members of the House of Representatives. The vote in Thursday’s primary was so close that they may still be recounting on Inauguration Day.

But the real point is that DesJarlais did not get resoundingly repudiated. When the campaign began, almost everybody expected him to lose big, including the Republican establishment in Tennessee, which piled support and money on his opponent, a state senator named Jim Tracy.

Tracy was, by most reports, a better retail politician. And the only genuine policy issue appeared to be whether the district would rather have, as its socially conservative representative, the doctor who was fined for carrying on sexual affairs with his patients or the other guy.

So how the heck did DesJarlais end up doing so well? Maybe it’s just because he’s already there. It’s been a terrific primary season for incumbents. Only three members of Congress have lost their seats: the House majority leader, Eric Cantor; 91-year-old Representative Ralph Hall of Texas; and Representative Kerry Bentivolio, a Michigan reindeer farmer who once said in a deposition that he sometimes believed he was truly Santa Claus. Bentivolio sort of fell into office two years ago, when a judge tossed the incumbent Republican off the primary ballot for submitting forged nominating petitions.

So despite all the whining about unpredictable voters, a seat in Congress is still a hard thing to lose. Unless you’re over 90. Or if your nickname is “the accidental congressman.” Or you’re so pompous and self-satisfied you become the kind of guy who spends Primary Day out of town, having coffee with lobbyists at a Washington, D.C., Starbucks.

DesJarlais had argued that his sins — which included affairs with patients that won him a fine from the Tennessee Board of Medical Examiners — were all in the distant past.

Indeed, the hanky-panky that’s been made public all dates back before his 2001 divorce. And there definitely should be a statute of limitations on this sort of thing. For instance, absolutely nothing a politician did in college counts, and we have totally forgotten the thing about Rand Paul kidnapping a member of the Baylor swim team and telling her to bow down and worship the god Aqua Buddha. Wiped it from the memory bank.

DesJarlais was first elected during the big anti-Obama Republican sweep of 2010. The stories of his sexual transgressions weren’t really confirmed until the end of the 2012 campaign. But, since then, voters have heard quite a lot about how their anti-abortion congressman’s first wife had two abortions with his consent. DesJarlais said in his divorce trial that the first was “therapeutic” and the second was because “things were not going well between us.”

The transcript from the divorce proceedings also included a phone conversation in which DesJarlais nagged an ex-lover to end her pregnancy. (“You told me you’d have an abortion, and now we’re getting too far along without one.”) He claimed he actually just wanted her to admit that she was making the whole pregnancy story up. In the annals of explanations, it ranks right up there with “I’m leaving you because you’re too good for me.”

It was quite a bit of information for the voters to get past, but many of them did. Maybe the key was right-wing radio hosts, who stuck with their Tea Party favorite. Maybe it was his second wife, who campaigned loyally at his side in yet another example of why being a political spouse is the worst job in America.

Maybe it was God. “I’ve heard him say ‘God has forgiven me’ many times,” said Chas Sisk, the state government reporter for The Tennessean.

Americans do love a repentant sinner, and, to tell the truth, having to campaign through a sexual scandal is punishment enough for a lot of bad behavior.

But then there’s the part about abortion. As a member of Congress, DesJarlais eagerly and persistently urged that women be deprived of the right to do the very thing that he seemed so enthusiastic about when an unwanted pregnancy interfered with his own life. “Dr. D’s Prescription for Tennessee: Protect our traditional Tennessee values: Scott is pro-gun, pro-life and pro-marriage and PROUD OF IT,” announced his first campaign website.

So, at best, we have a man who made a decision that worked for him at the time. Then he regretted it and changed his moral principles. Then he decided that nobody else was ever going to have the right to make that moral choice for herself, if he had anything to do with it.

Some things are really unforgivable.

Nocera and Collins

August 2, 2014

In “Sympathy for the Devil” Mr. Nocera has a question:  Should we care if a big corporation that did an awful thing is being hosed?  He’s playing Gunga Din for BP again.  Ms. Collins, in “Congress: The Road to Roads,” says you thought the current Congress never got any work done. Well, how about that Highway Trust Fund fix?  Here’s Gunga Din Mr. Nocera:

What does it mean for a company “to do the right thing” after an industrial accident?

It used to be standard operating procedure that when something went wrong, companies immediately took to the courts to fight over who got compensated and for how much, trying to minimize their own financial liability. Those fights could take years to resolve, with no guarantee that the plaintiffs would be compensated justly.

But then came the Deepwater Horizon spill, which killed 11 people and spewed oil into the Gulf of Mexico for 87 days in the spring and summer of 2010. BP, whose negligence was largely responsible for the spill, decided to take a different tack. It decided to try to make amends immediately, without waiting to get sued. “It was a shocking tragedy,” recalled Bob Dudley, BP’s American-born chief executive, who spoke to me in New York on Thursday in the midst of a day of meetings with investors. (BP had just announced its second-quarter earnings.) “And we immediately knew we wanted to do the right thing.”

BP spent billions on environmental cleanup and billions more compensating the economic victims of the spill. It waived liability limits. It vowed — to the president of the United States, no less — to put aside $20 billion for compensation alone. Most intriguingly, it brought in Ken Feinberg to oversee a claims process that avoided the court system. Feinberg wound up paying $6.3 billion to around 200,000 claimants, people who could show that the spill had in some way harmed them or their businesses economically.

Why? No doubt the awful P.R. that came from having the country watch the oil gushing from the broken well, day after day, had something to do with it. And no doubt only a company as big as BP could spend the billions required to undo the damage of such a massive spill. (It has spent a total of $27 billion so far, much of which came from selling assets.) But, Dudley says, it was also the company’s objective “to reach reasonable settlements and put this behind us. I don’t regret what we did. I feel proud of us as a company.”

As it turns out, the regret came a little later. Despite the Feinberg claims process — and the billions he doled out — the plaintiffs’ bar still wanted its piece of the action. So a group called the Plaintiffs’ Steering Committee sued BP. After that suit was settled, Feinberg was let go, replaced by a local Louisiana lawyer named Patrick Juneau. And Juneau began approving claims from all sorts of businesses that, by any reasonable standard, were never harmed by the oil spill.

The wireless phone retailer who was awarded more than $135,000, even though its building had burned down before the spill. The attorney who was awarded more than $172,000, even though his license had been revoked in 2009. There were dozens — nay, hundreds — of bogus claims like those.

At one point, BP, through Juneau, was spending $100 million a week in claims. Indeed, in the space of two years, Juneau has awarded some $4 billion.

Should you care that a big corporation that did an awful thing — and that has paid mightily for doing so — is now being hosed? “First of all,” said Dudley, “this is the shareholders’ money, not some faceless corporation’s.” Second, said Dudley, it causes other companies to think twice about investing in America. And third, “It’s just not right for people to cash in on an industrial tragedy when they weren’t actually involved.”

So about a year ago, BP changed tack again: It decided to fight the plaintiffs’ lawyers and Juneau’s claims process. Although the plaintiffs say that BP signed a bad agreement — and that it always knew that people who weren’t harmed by the spill were going to get money — BP has put “causation” at the center of its legal claims. In other words, it is arguing that you can’t litigate on behalf of a class of people who weren’t harmed by the accident.

The Fifth Circuit Court of Appeals ruled against BP, in a divided vote. But other circuits have voted the other way in different cases — ruling that no matter what the terms of a settlement, no judge can approve it if there is no causal link between the class members and the accident itself.

Not surprisingly, on Friday afternoon, the day after I spoke to Dudley, BP made a filing to the Supreme Court, asking the court to rule on the Fifth Circuit’s decision. The question remains a simple one: Can you have a class-action lawsuit in which large numbers of the class members have never been harmed by the defendant?

I know what my answer to that question is. Assuming it takes the case, it will be interesting to see what the Supreme Court has to say.

Now here’s Ms. Collins:

Well, all I can say is thank God we’ve got that Highway Trust Fund fixed.

Congress raced for its August break on Friday, with many complaints about voting on legislation nobody had ever seen (“What bill are we talking about?”) and plaintive cries of: “We can do better than this!”

There is actually no evidence whatsoever that the current Congress can do better than this. But good news — the House and Senate did manage a last-minute agreement to keep the nation’s road-building programs going for a few more months by putting some cash into the exhausted Highway Trust Fund.

The money will mainly come from “pension smoothing.” Perhaps you have never heard of pension smoothing. It involves allowing companies to put less than the required amount into their pension funds, thus creating more profit, which leads to more tax revenue for the government. Until later, when the whole thing turns into geysers of red ink.

I think I speak for us all when I respond: “Say what?”

“It’s traditional that if you’re trying to fund something and you don’t have the funds, you screw around with pensions,” sighed Norman Ornstein of the American Enterprise Institute. The current session seems to have nearly exhausted Ornstein’s capacity for shock and awe, but he did call the Highway Trust Fund gambit “outrageous.”

House Republicans rejected an attempt by the Senate to drop the pension smoothing. I would not be wowed by the Democrats’ high sense of fiscal integrity on this point, since they did try to use the very same maneuver earlier this year, in an unsuccessful attempt to extend unemployment benefits. On the other hand, the Democrats are not the party that spends all of its time yelling about unfunded entitlements.

In a perfect world, Congress would figure out a serious, long-term plan to fix bridges, improve roads and update airports. We now make about half as much fiscal effort as Europe does on these matters. You may be tired of hearing people ask why we can’t have day care like Sweden. But it does not seem too much to demand a Spanish level of commitment to infrastructure repair.

The best way to get the things back on track would be by raising the gas tax. Such a plan was proposed in the Senate by Democrat Chris Murphy of Connecticut and Republican Bob Corker of Tennessee. This fine, bipartisan effort went nowhere whatsoever.

“I’ve been here seven and a half years,” Corker said in a phone interview. “We have not solved one single problem since I’ve been here. It’s just so frustrating.”

But thanks to Congress, the Highway Trust Fund lives! For a minute. And in another burst of action, the Senate and House approved a $17 billion bill for veterans’ health care. Without, once again, actually financing it.

And then came the border. President Obama had asked Congress for $3.7 billion to take care of the crisis created when tens of thousands of children from Central America’s most violence-ridden countries began crossing over and asking for permission to stay.

So the Senate:

A. Took up a bill to give the president $2.7 billion. The White House seemed pretty satisfied, since half a loaf is now regarded as the height of near-unattainable bipartisan statesmanship. The bill also included $615 million to fight wildfires and $225 million for Israeli defense systems.

B. Killed the border bill on a 50-to-44 vote when Republicans demand changes in the law that guarantees those children immigration court hearings. We will try not to dwell on the fact that the law in question was passed during the Bush administration to combat child sex trafficking.

C. Failed to approve the nomination of an ambassador to Guatemala, one of the countries at the center of the current crisis. Because they were ticked off about something Majority Leader Harry Reid did. Last year. About procedure.

D. Rallied at the last minute and passed the part about Israeli defense systems.

And what, you may ask, was the House doing all this time? At its highest moment of functionality, the House was considering a $659 million border bill that turned the Senate’s half a loaf into a crouton.

From there things slid downhill. Judge their new leadership’s performance for yourself by choosing among the following:

• Wow! The new House leadership had the chops to pass a bill that will never become law.

• Yipes! The new House leadership could not even pass a bill that will never become law without the help of Michele Bachmann. (Bachmann bragged that she and her cohorts had “completely gutted” the leadership’s own version.)

• Remind me again what their names are? Is John Boehner still around?

During a deeply depressing and meaningless debate about deporting children, Representative Louise Slaughter, Democrat of New York, complained that all the House had done in its last week was vote to “sue the president and deregulate pesticides.”

Not true. Highway Fund. Highway Fund. Highway Fund.

Brooks and Nocera

July 29, 2014

In “No War Is an Island” Bobo tells us that the Israeli-Palestinian conflict is largely a proxy war rooted in broader rivalries throughout the Arab world.  In “Teaching Teaching” Mr. Nocera states teachers shouldn’t be learning on the job as they go.  Here’s Bobo:

It’s amazing how much of the discussion of the Gaza war is based on the supposition that it is still 1979. It’s based on the supposition that the Israeli-Palestinian dispute is a self-contained struggle being run by the two parties most directly involved. It’s based on the supposition that the horror could be ended if only deft negotiators could achieve a “breakthrough” and a path toward a two-state agreement.

But it is not 1979. People’s mental categories may be stuck in the past, but reality has moved on. The violence between Israel and Hamas, which controls Gaza, may look superficially like past campaigns, but the surrounding context is transformed.

What’s happened, of course, is that the Middle East has begun what Richard Haass of the Council on Foreign Relations has called its 30 Years’ War — an overlapping series of clashes and proxy wars that could go on for decades and transform identities, maps and the political contours of the region.

The Sunni-Shiite rivalry is at full boil. Torn by sectarian violence, the nation of Iraq no longer exists in its old form.

The rivalry between Arab authoritarians and Islamists is at full boil. More than 170,000 Syrians have been killed in a horrific civil war, including 700 in two days alone, the weekend before last, while the world was watching Gaza.

The Sunni vs. Sunni rivalry is boiling, too. Saudi Arabia, Qatar, Turkey and other nations are in the midst of an intra-Sunni cold war, sending out surrogates that distort every other tension in the region.

The Saudi-Iranian rivalry is going strong, too, as those two powers maneuver for regional hegemony and contemplate a nuclear arms race.

In 1979, the Israeli-Palestinian situation was fluid, but the surrounding Arab world was relatively stagnant. Now the surrounding region is a cauldron of convulsive change, while the Israeli-Palestinian conflict is a repetitive Groundhog Day.

Here’s the result: The big regional convulsions are driving events, including the conflict in Gaza. The Israeli-Palestinian conflict has become just a stage on which the regional clashes in the Arab world are being expressed. When Middle Eastern powers clash, they take shots at Israel to gain advantage over each other.

Look at how the current fighting in Gaza got stoked. Authoritarians and Islamists have been waging a fight for control of Egypt. After the Arab Spring, the Islamists briefly gained the upper hand. But when the Muslim Brotherhood government fell, the military leaders cracked down. They sentenced hundreds of the Brotherhood’s leadership class to death. They also closed roughly 95 percent of the tunnels that connected Egypt to Gaza, where the Brotherhood’s offshoot, Hamas, had gained power.

As intended, the Egyptian move was economically devastating to Hamas. Hamas derived 40 percent of its tax revenue from tariffs on goods that flowed through those tunnels. One economist estimated the economic losses at $460 million a year, nearly a fifth of the Gazan G.D.P.

Hamas needed to end that blockade, but it couldn’t strike Egypt, so it struck Israel. If Hamas could emerge as the heroic fighter in a death match against the Jewish state, if Arab TV screens were filled with dead Palestinian civilians, then public outrage would force Egypt to lift the blockade. Civilian casualties were part of the point. When Mousa Abu Marzook, the deputy chief of the Hamas political bureau, dismissed a plea for a cease-fire, he asked a rhetorical question, “What are 200 martyrs compared with lifting the siege?”

The eminent Israeli journalist Avi Issacharoff summarized the strategy in The Times of Israel, “Make no mistake, Hamas remains committed to the destruction of Israel. But Hamas is firing rockets at Tel Aviv and sending terrorists through tunnels into southern Israel while aiming, in essence, at Cairo.”

This whole conflict has the feel of a proxy war. Turkey and Qatar are backing Hamas in the hopes of getting the upper hand in their regional rivalry with Egypt and Saudi Arabia. The Egyptians and even the Saudis are surreptitiously backing or rooting for the Israelis, in hopes that the Israeli force will weaken Hamas.

It no longer makes sense to look at the Israeli-Palestinian contest as an independent struggle. It, like every conflict in the region, has to be seen as a piece of the larger 30 Years’ War. It would be nice if Israel could withdraw from Gaza and the West Bank and wall itself off from this war, but that’s not possible. No outsider can run or understand this complex historical process, but Israel, like the U.S., will be called upon to at least weaken some of the more radical players, like the Islamic State in Iraq and Syria and Hamas.

In 1979, the Arab-Israeli dispute looked like a clash between civilizations, between a Western democracy and Middle Eastern autocracy. Now the Arab-Israeli dispute looks like a piece of a clash within Arab civilization, over its future.

Now here’s Mr. Nocera:

I’m starting to wonder if we’ve entered some kind of golden age of books about education. First came Paul Tough’s book, “How Children Succeed,” about the importance of developing noncognitive skills in students. It was published in September 2012. Then came “The Smartest Kids in the World,” by Amanda Ripley, which tackled the question of what other countries were getting right in the classroom that America was getting wrong. Her book came out just about a year ago.

And now comes Elizabeth Green’s “Building a Better Teacher: How Teaching Works (and How to Teach It to Everyone),” which will be published next week, and which was excerpted in The New York Times Magazine over the weekend. The first two books made the New York Times best-seller list. My guess is that Green’s book will, too. It certainly ought to.

Over the past few decades — with the rise of charter school movement and No Child Left Behind — reformers and teachers’ unions have been fighting over how to improve student performance in the classroom. The reformers’ solution, notes Green, is accountability. The unions’ solution is autonomy. “Where accountability proponents call for extensive student testing and frequent on-the-job evaluations, autonomy supporters say that teachers are professionals and should be treated accordingly,” Green writes. In both schemes, the teachers are basically left alone in the classroom to figure it out on their own.

In America, that’s how it’s always been done. An inexperienced teacher stands in front of a class on the first day on the job and stumbles his or her way to eventual success. Even in the best-case scenario, students are being shortchanged by rookie teachers who are learning on the job. In the worst-case scenario, a mediocre (or worse) teacher never figures out what’s required to bring learning alive.

Green’s book is about a more recent effort, spearheaded by a small handful of teaching revolutionaries, to improve the teaching of teaching. The common belief, held even by many people in the profession, that the best teachers are “natural-born” is wrong, she writes. The common characteristic of her main characters is that they have broken down teaching into certain key skills, which can be taught.

“You don’t need to be a genius,” Green told me recently. “You have to know how to manage a discussion. You have to know which problems are the ones most likely to get the lessons across. You have to understand how students make mistakes — how they think — so you can respond to that.” Are these skills easier for some people than others? Of course they are. But they can be taught, even to people who don’t instinctively know how to do these things.

One of Green’s central characters is a woman named Deborah Loewenberg Ball, who began her career as an elementary school teacher and is now the dean of the University of Michigan’s School of Education. “Watching Deborah teach is like listening to chamber music,” Green quotes an admirer. But she didn’t start out that way. She struggled as a young teacher, and, as she became a better teacher, she began to codify, in her own mind at first, the practices that made her successful. And she asked herself, “Why hadn’t she learned any of this before?”

Green has a chapter about why schools of education value things other than the actual teaching of teachers. But the University of Michigan under Ball is one place that is trying to reverse that trend, not just at Michigan but across the country. Ball is pushing the idea that teachers should be prepared to teach — that they should have the tools and the skills — when they walk into that classroom on the first day on the job. That is rarely the case right now.

“We need to shift teaching to be like other fields where you have to demonstrate proficiency before you get a license,” Ball told me not long ago. “People who cut hair and fly airplanes get training that teachers don’t get.”

One thing that Ball and Green both stress is the importance of scale. I’ve also come to see the ability to scale successful programs as the single biggest issue facing public education. It is great that there are charter schools that give a small percentage of public schoolchildren a chance for a good education — and a good life. And it’s all well and good that Michigan graduates maybe 100 or so teachers a year who genuinely know how to teach by the time they get out of school.

But these small-scale successes won’t ultimately matter much unless they are embraced by the country at large. You can’t teach every kid in a charter school. And schools of education need to change their priorities. Learning on the job just shouldn’t cut it anymore.

Nocera, solo

July 26, 2014

Ms. Collins is off today, so Mr. Nocera has the place to himself.  In “Chamber of Commerce Lost Its Way in Right Turn” he says the U.S. Chamber of Commerce is regretting its one-sided support of Republicans.  Here he is:

Twice a year, the U.S. Chamber of Commerce convenes what it calls its Committee of 100 — which is composed of heads of regional chambers and Washington trade associations. They hear about the business climate from the chamber’s longtime president, Thomas J. Donohue, and about the political landscape from Bruce Josten, its chief lobbyist.

In the summer of 2012, a few months before the elections, the bulk of the meeting, according to people who were there, was devoted to one subject: the importance of electing Republicans. The Chamber of Commerce — which once supported its share of pro-business Democrats — went almost completely to the Republican side, spending millions to oppose such Democratic senatorial candidates as Elizabeth Warren of Massachusetts; Senator Sherrod Brown of Ohio, who was up for re-election; and former Gov. Tim Kaine of Virginia. It ran ads against Senator Claire McCaskill, a Democrat from Missouri who often took pro-business positions, accusing her of being anti-jobs because she supported the Affordable Care Act.

The chamber had done much the same thing during the 2010 midterms, with great success, helping to hand the House of Representatives to the Republicans, thanks largely to the influx of Tea Party freshmen. Now, said the chamber brass, it was time to finish the job and give the country a Republican Senate as well.

As it turns out, the 2012 strategy was a flop. According to The Washington Post, the chamber’s candidates lost in 13 of the 15 Senate races it poured money into. On the House side, the chamber went four for 22. Thus did the chamber find itself in the worst of all worlds. It had alienated Democrats, including the kind of pro-business Democrats who believe in the sort of practical politics that business prefers. Yet it had also helped usher in the Tea Party, only to discover that its strain of right-wing populism was as disdainful of business as it was of government.

What brings this to mind is the continuing fight over the Export-Import Bank. It is the classic kind of issue that used to unite the Republican Party and the Chamber of Commerce, pre-Tea Party: backing a government agency that supports trade by helping to finance deals that involve American exports. That is also the kind of issue that is anathema to Tea Party ideologues, who view it as corporate welfare. The chamber has vowed a “full-court press” to save the Ex-Im Bank, but so far at least, the House is indifferent to its entreaties.

And it’s not just the Ex-Im Bank. As Edward Luce noted this week in The Financial Times, this Congress won’t countenance any of the things that business — and the chamber — care about. Immigration reform is dead. Congress won’t raise the gas tax to fund the Highway Trust Fund. Revamping the corporate tax rate can’t even get a hearing. And on, and on.

It is possible that the chamber didn’t quite realize what it was getting when it helped elect those Tea Party freshmen in 2010 — few people did until they began to flex their muscles. But it is equally possible that it didn’t care.  (“The chamber is not an arm of either party and is not ‘aligned’ with either party,” a spokesman told me in an email.)

In the 16 years he has run the Chamber of Commerce, Donohue has turned it into a potent force, in no small part by making it more partisan. But by being so blindly pro-Republican, the chamber “unleashed a Frankenstein that has spun out of control,” said Robert Weissman, the president of Public Citizen, which monitors the Chamber of Commerce. That became most clear during the debt ceiling and deficit fights of the last few years — when the Tea Party Republicans seemed so determined to shrink government that they were even willing to default on the government’s debt. The chamber reacted in horror.

I’m told that after the 2012 election, at yet another Committee of 100 gathering, a former Democratic congressman, Dave McCurdy, who now runs the American Gas Association, stood up and criticized Donohue for his “all-in” Republican strategy. He told Donohue that everybody in the room was pro-business, but they weren’t all Republicans, and that if the chamber really wanted to be effective again, it needed to take on the Tea Party and the right wing of the Republican Party in favor of more moderate candidates of both parties.

As the 2014 midterms near, that seems to be the approach the Chamber of Commerce is taking. It has gotten involved in Republican primaries, siding with the more moderate Republican in a race — though perhaps it is more accurate to say the less radical Republican. At the most recent Committee of 100 meeting, Rob Engstrom, the chamber’s national political director, told the group that the chamber planned to support Mary Landrieu, the Louisiana Democrat who is running for re-election to the Senate.

Better late than never.

Cohen and Nocera

July 22, 2014

Bobo and Bruni are off today.  In “The Suns of August” Mr. Cohen says bodies rot, looters roam, and the Russian-enabled downing of Flight 17 marks the nadir of the West.  Mr. Nocera has a question:  “Did Dodd-Frank Work?”  He says we really have no way of knowing whether “too big to fail” is still with us until we have another crisis.  Here’s Mr. Cohen:

A century on from World War I, nobody wants the guns of August.

Yet it must be asked if waiting years for the evasive conclusions of an official investigation into the fate of Malaysia Airlines Flight 17 is better than acting now on what we already know: That the Boeing 777 with 298 people on board was shot down by a missile from a Russian-made SA-11 antiaircraft system fired from an area of eastern Ukraine controlled by Russian-backed separatists, Russian mercenaries and Russian agents. A half-drunk Ukrainian peasant with a 1950s-era rifle doesn’t shoot down a plane at 33,000 feet.

An “enormous amount of evidence,” in Secretary of State John Kerry’s words, points to Russian provision of SA-11 systems and training. The Ukrainian government has damning audio and images that capture the crime. In June, a Ukrainian cargo plane landing in the area was hit with shoulder-fired missiles, killing 49 people. This month, another cargo plane flying at 22,000 feet was hit by a missile. Rocket science is not required.

President Vladimir Putin of Russia has been playing with fire. His irredentism has made him a hero in Russia. It has endangered the world. Crimea was the swaggering precedent to this crime. The shooting down of Malaysia Airlines Flight 17 amounts to an act of war. It was impromptu perhaps, but still. Dutch corpses have rained down on the sunflowers and cornfields of eastern Ukraine, to be defiled even in death, 193 innocent Dutch souls dishonored by the thugs of the Donetsk People’s Republic.

“This is murder, mass murder. Let’s call it what it is,” said Julian Lindley-French, a defense analyst who lives in the small Dutch village of Alphen. “Shock is turning to anger here,” he told me, “and that anger will resonate in the coming weeks. This is the beginning of a period of complex torture for the Netherlands.”

The Dutch response has been of tip-toeing deference to Moscow. As for the European Union, it has been near-nonexistent. When crisis comes, Europe vanishes — the ghost that slithers away. The West has become an empty notion. The Dutch trade a lot with Russia. Europe floats along in a bubble of quasi pacifism. Better to be bullied than belligerent. Nobody wants the guns of August.

“Swift recovery of the victims’ remains is now an absolute necessity and our highest priority,” Mark Rutte, the Dutch prime minister, said in a statement. “I am shocked by the images of completely disrespectful behavior at this tragic place.” He spoke to Putin to express his outrage.

That was pretty much it. Bodies rot in the sun for four days. They are stashed in plastic bags in refrigerated railroad cars at a fly-infested station before finally moving. The black box is a fungible bargaining chip. Louts go looting. It’s a free-for-all! Official investigation teams are barred at the perimeter. Putin spins implausible yarns robed in ghastly official formulas. His plausible deniability is utterly implausible.

A Dutch writer, Sidney Vollmer, addressed a bitter letter to Rutte thanking him for preserving the moral high ground of the Dutch, for “not rushing in for a bunch of rotting corpses” as “their wallets and iPhones make it all the way” to Moscow. The corpses, anyway, “will vanish into the fog of war” and, as everyone knows, “we need Gazprom.”

Dutch passivity has a name: the Srebrenica syndrome. It is becoming the Europe syndrome.

This mass murder is an outrage that should not stand. Falling military budgets have reduced the Dutch special forces to a paltry remnant. Russia would veto any United Nations Security Council Resolution authorizing force for a limited mission to recover the bodies and the evidence. But Ukraine, on whose territory the debris and dead lie, would support it. The American, British, Dutch and Australian governments should set an ultimatum backed by the credible threat of force demanding unfettered access to the site. Putin’s Russia must not be permitted to host the 2018 World Cup. A Western priority must be to transform the Ukrainian army into a credible force.

It won’t happen. Europe is weak. Obama’s America is about retrenchment, not resolve. Putin must be appeased. Nobody is about to call his bluff. The Putin-pacifiers have many arguments. Send forces into Ukraine and you prove the Russian argument that the West has designs on it. Besides, who wants World War III?

The self-styled Donetsk People’s Republic stares down Mark Rutte. The deathly poppy fields of 1914 give way to the deathly sunflower fields of 2014. Dutch flowers wing around the globe, still, a thriving trade.

A reader, Katherine Holden, sent me a poem called “The Flowering of Death.” She writes: “Velvet leaves and sturdy stems transient graves for children mothers lovers doctors teachers fathers students artists siblings seekers fallen from the darkening sky. Flesh-fed rain.”

Everyone wants the suns of August. Summer vacations rule. Nobody wants the guns — and damn the bigger guns appeasement may bring.

This article was updated to reflect news developments.

Yeah.  Let’s rattle the sabers and swing our dicks.  That will be helpful…  Here’s Mr. Nocera:

Ralph Nader has written a new book, entitled “Unstoppable: The Emerging Left-Right Alliance to Dismantle the Corporate State.” If you spend any time looking into the current state of affairs with the Dodd-Frank Act — Monday was the fourth anniversary of the law enacted to ensure that the country never suffers through another financial crisis like the one in 2008 — you’d have to say that he has a point.

There are many aspects of the law on which Democrats and Republicans disagree. But there is one area in which the two sides are largely in agreement: “Too Big to Fail” is still with us.

“In no way, shape or form does the Dodd-Frank Act end too big to fail,” said Representative Jeb Hensarling, the Texas Republican who is chairman of the House Financial Services Committee.

“The chances of another financial crisis will remain unacceptably high as long as there are financial institutions that are ‘too big to fail,’ ” wrote Senator Elizabeth Warren, a Massachusetts Democrat, in an opinion article she co-wrote with, among others, Republican Senator John McCain.

Dodd-Frank, of course, was supposed to end “Too Big to Fail,” the catchphrase for a financial institution whose collapse had the potential to bring down the entire financial system. That prospect is why, less than a month after the bankruptcy of Lehman Brothers, the government handed billions of dollars to the big banks to help stabilize them.

In some ways, eliminating the possibility of future bank bailouts was the whole point of Dodd-Frank. Partly this was for populist reasons: Americans were outraged that the banks were bailed out, while the country got the worst of the Great Recession.

But it was also just good public policy. Karen Petrou, the managing partner of Federal Financial Analytics, told me that if the too-big-to-fail provisions in the law worked, “the rest of the law wouldn’t matter that much because the market would discipline the institutions.” But, she added, “I don’t think the Federal Reserve or the F.D.I.C.” — the Federal Deposit Insurance Corporation — “is prepared to handle a systemic crisis for one of the big banks.”

To be sure, the Treasury Department insists that the days of “Too Big to Fail” are over. In a recent speech, Mary John Miller, the Treasury’s undersecretary for domestic finance, said, “No financial institution, regardless of its size, will be bailed out by taxpayers again.” She added, “Shareholders of failed companies will be wiped out; creditors will absorb losses; culpable management will not be retained and may have their compensation clawed back.” But the markets don’t believe it, and neither do most people who pay attention to Dodd-Frank.

There are two essential problems. The first is that it is hard to imagine that the government wouldn’t blink, as it did in 2008. “Does anyone really believe that if any of the big banks were about to go down, that the government would allow that to happen?” asked Dean Baker, a co-founder of the progressive Center for Economic and Policy Research. “No.”

The second problem is that it is difficult to envision how the law itself would “resolve” these institutions. In one part of Dodd-Frank, the banks are required to write “living wills,” laying out how they could wind down without causing a financial catastrophe. Although they are now on their third round of living wills, the documents are thousands of pages, and the government hasn’t yet told them whether the second round of living wills, filed a year or so ago, passed muster.

The law also says that if the regulators find the living wills too unwieldy and difficult to execute, it can force banks and financial institutions to shed assets and simplify their structures to make them easier to wind down. Warren and other lawmakers have pointed to this provision as something that could — if regulators pushed for it — force the banks to look more like they did pre-deregulation: with a division between commercial banks and investment banks.

Meanwhile, there is another part of Dodd-Frank that calls for banks to wind down through a process called orderly liquidation. In this scenario, the government puts the functioning parts of the bank into a new “bridge financial company,” and forces the private sector — shareholders, certain creditors, even assessments on other financial institutions if it comes to that — to take losses. Although the Treasury Department insists that the law forbids public money from being used, there are a lot of economists who have a hard time believing that taxpayer money would not somehow be used if things got really bad.

One person who does believe is Sheila Bair, the former chairwoman of the F.D.I.C. “I do think they could handle a big bank failure,” she told me. “It would be messy and difficult, but they could do it.”

Which is the ultimate problem: We have no way of knowing whether “too big to fail” still exists until we have another crisis. Let’s just hope we don’t have to find out anytime soon.

Nocera, solo

July 19, 2014

Ms. Collins is off today, so Mr. Nocera has the place to himself.  In “The $300,000 Drug” he says a miracle cystic fibrosis treatment carries a heavy price.  Here he is:

Kalydeco is truly a wonder drug.

Developed by Vertex Pharmaceuticals, it is the first drug that attacks not just the symptoms but the underlying cause of cystic fibrosis, a genetic lung disease that usually kills victims by the time they reach their 40s. It doesn’t work for every sufferer of the disease, but rather for a small subset — probably around 2,000 people — who have a specific genetic mutation that the drug targets. But for those it helps, it is life changing.

“I still pinch myself every day,” says Emily Schaller, 32, who has been taking the drug since she participated in its Phase III trials five years ago. “I can take deep breaths. I can run without coughing.”

Two years ago, as it was coming to market, Dr. Margaret Hamburg, the head of the Food and Drug Administration, described Kalydeco an “an excellent example of the promise of personalized medicine.” Personalized medicine describes drugs that treat so-called orphan diseases — that is, diseases with a small population — or subsets of people with broader diseases. This kind of targeted medicine has been the Holy Grail ever since the genome was first sequenced about a decade ago. Now it is becoming a reality.

There is one other way that Kalydeco is an excellent example of personalized medicine: its cost. It’s more than $300,000 a year. Because patients will likely be taking the drug for the rest of their lives, it could cost millions of dollars to keep just one patient on Kalydeco. That raises another important question about the coming of personalized medicine. How are we, as a society, going to pay for it?

What brings this question to the fore is a fight taking place in Arkansas, where the state’s Medicaid program is balking at paying for Kalydeco for a handful of young patients with cystic fibrosis. Although state officials won’t say so publicly, it is clear that cost is a key issue; The Wall Street Journal got ahold of emails that show Arkansas officials “discussing Kalydeco’s cost, and their worries about the expense of future cystic fibrosis drugs.”

It’s likely that Arkansas will eventually fold. Most state Medicaid programs — and private insurers — are paying Kalydeco’s cost because it works so well, and because the patient population is so small.

What happens, though, when there are 200 such drugs? Or when they are targeted not at cystic fibrosis, which has maybe 30,000 sufferers, but at diabetes or (heaven forbid) cholesterol? A drug called Sovaldi, marketed by Gilead Sciences, takes aim at hepatitis C. It is described as a “breakthrough” drug. But each pill costs $1,000 — and the full regimen costs $84,000. And the hepatitis C population isn’t 30,000 — it is over 3 million. If everyone with hepatitis C took Sovaldi, it would cost something like $300 billion, which is about what the country now pays for all prescription drugs combined.

“This is the future of medicine,” says Barry Werth, “and there’s going to be a reckoning.” Werth is the author of “The Antidote,” a terrific book about Vertex and its race to discover and bring to market these new kinds of drugs. “Everyone wants to see these drugs succeed,” he told me. “Wall Street is all charged up. There really hasn’t been any pushback yet on cost.”

And even when the pushback comes, as it surely will, how will we get the pharmaceutical companies to change their pricing? Brian O’Sullivan, a cystic fibrosis specialist at the University of Massachusetts Medical School, told me that he thought the price of drugs like Kalydeco was “not sustainable.” But in the next breath, he marveled at how well the drug worked and said he didn’t want to “scare companies away from doing cystic fibrosis research” by focusing too much on the cost.

When I asked Vertex how it could possibly justify charging $300,000 for Kalydeco, a company spokesman pointed to the small patient population and “the benefit that the medicine provides.” He also said that the company had spent $6.5 billion on research in its existence, and had only two drugs approved by the F.D.A. In effect, he was saying that the Vertex drug was priced, in part, to recoup not just the research and development that led to Kalydeco but all the company’s R&D. (For cystic fibrosis sufferers with no insurance, Vertex provides the drug for free.)

When I asked Werth how Vertex could charge $300,000, he had a much simpler answer: “Because they can.”

Vertex has another cystic fibrosis drug that has just come through its Phase III trial and is likely to be on the market soon. It attacks a different, more common problem than Kalydeco and may broaden the number of patients who can be helped to more than 15,000. In my talks with people in the cystic fibrosis community, I got the strong sense that they are hoping this next drug will cost less.

Dream on.

 

Cohen and Nocera

July 15, 2014

Bobo and Mr. Bruni are off today.  In “Israel’s Bloody Status Quo” Mr. Cohen says the Jews and Arabs of the Holy Land are led by men too small to effect change.  In “Helping Big Companies Compete” Mr. Nocera explains why killing the Export-Import Bank would be damaging to the economy.  Here’s Mr. Cohen:

Sheldon Adelson’s right-wing Israel Hayom, the biggest-selling newspaper in Israel, has called for Gaza to be “returned to the Stone Age.” During the last Israeli bombing campaign in Gaza, in 2012, a government minister called for Gaza to be consigned “to the Middle Ages.” Before that, there was the Gaza War of 2008-2009, in which 1,166 Palestinians died and 13 Israelis, according to the Israel Defense Forces.

The story goes on and on. There is no denouement. Gaza, a small place jammed with 1.8 million people, does not recess to the Stone, Iron, Middle or other Ages. It does not get flattened, as Ariel Sharon’s son once proposed. The death toll is overwhelmingly skewed against Palestinians. Hamas, with its militia and arsenal of rockets, continues to run Gaza. The dead die for nothing.

Israel could send Gaza back to whichever age it wishes. Its military advantage, its general dominance, over the Palestinians has never been greater since 1948. But it chooses otherwise. Prime Minister Benjamin Netanyahu’s talk of a ground invasion is empty. The last thing Israel wants, short of a cataclysm, is to go into Gaza and get stuck.

What Israel wants is the status quo (minus Hamas rockets). Israel is the Middle East’s status quo power par excellence. It seeks a calm Gaza under Hamas control, a divided Palestinian movement with Fatah running the West Bank, a vacuous “peace process” to run down the clock, and continued prosperity. Divide and rule. Hamas is useful to Israel as long as it is quiescent.

Mahmoud Abbas, the president of the Palestinian Authority, is also a status quo man. Late in his life, he is not prepared to make the painful decisions necessary to attain a two-state peace, decisions that would include relinquishing, against compensation, the so-called “right of return” for millions of Palestinian refugees. He prefers the comforts of his position and the ambiguity of concessions not formalized.

The Palestinian unity government recently established with Hamas is no more than a marriage of convenience, sought by a weakened, unpopular Hamas to escape isolation and unmet salary obligations in Gaza, and by Abbas as a distraction from his failures. There is no unity of Palestinian national purpose. There is no Palestinian democratic accountability; election talk evaporates. As for Israel, the fig-leaf Palestinian reconciliation was a godsend for its status-quo objective. Netanyahu was in sound-bite heaven, his favorite environment, on the risible notion of peace with Hamas.

None of this is edifying. Much is abhorrent: indiscriminate Hamas rockets on Israel, Israeli killing of Palestinian civilians in “collateral damage.” Yet I find myself short on moral outrage. It is all so familiar, a recurrent curse. It is a sham fight, and so doubly inexcusable. The Jews and Arabs of the Holy Land are led by men too small to effect change. Shed a tear, shed a thousand, it makes no difference.

Of course the status quo is illusory. As Secretary of State John Kerry said in Munich (to a chorus of Israeli fury), “It cannot be maintained.” True, this violence will subside. Gaza will revert to its routine misery. Peacemakers may bestir themselves. Netanyahu will find another sound bite. Things may look the same; and the next 150 dead will be part of that sameness.

But at a deeper level, things will change. Life is flux, even in the Middle East. Nothing feeds on a vacuum like radicalization. Hamas is back from the brink.

Images of blown-up Palestinian children, and that skewed death toll, will hurt Israel. Its drift toward a culture of hatred toward Arabs will continue. The murder of Muhammad Abu Khdeir in revenge for the murders of three Israeli teenagers, and the brutal police beating of his cousin, were signs. Netanyahu called the Israeli teenagers’ killers “human animals.” The liberal daily Haaretz rightly observed: “Abu Khdeir’s murderers are not ‘Jewish extremists.’ They are the descendants and builders of a culture of hate and vengeance.”

That culture is reciprocated by Palestinians toward Jews. Last month Mohammed Dajani, a professor at Al Quds University, quit after being hounded with death threats for taking a group of Palestinian students to Auschwitz. He thought young Palestinians should learn about the Holocaust, a heinous affront to the ruling order in the West Bank and Gaza. Enough said. Palestinians get weaker — a 66-year trend now — because they fail to look reality in the face.

Jews should study the Nakba. Arabs should study the Holocaust. That might be a first step toward two-state coexistence. And everyone should read the Israeli poet Yehuda Amichai’s lines about redemption only coming for all the peoples of the Holy Land when a Jerusalem guide tells his tour group:

“You see that arch over there from the Roman period? It doesn’t matter, but near it, a little to the left and then down a bit, there’s a man who has just bought fruit and vegetables for his family.”

Now here’s Mr. Nocera:

Last week, Standard & Poor’s issued a short report about Boeing. “Boeing Co. Faces Long-Term Credit Risks If The U.S. Export-Import Bank Isn’t Reauthorized,” read the alarming heading.

In dollar volume, Boeing is America’s single largest exporter. It is one of our country’s strongest manufacturers. It employs more than 150,000 people, and last year it sent checks worth $48 billion to some 15,600 subcontractors. In competing with the likes of Europe’s Airbus and Canada’s Bombardier, it takes advantage of loan guarantees and financings offered by the Export-Import Bank — just as those competitors rely on their own export credit agencies for loan guarantees and financings. Without the help it gets from the Ex-Im Bank, Boeing would undoubtedly lose business to those competitors.

And, as S.& P. was suggesting, it could also see its credit rating lowered if it had to finance and guarantee loans to its airline customers “in order to remain competitive.” Clearly, S.& P. did not view this a positive development. Nonetheless, on Monday, The Wall Street Journal’s editorial page — which is among the conservative voices leading the charge against the reauthorization of the Ex-Im Bank — hailed that same S.& P. report because it also said that, in the short term, Boeing would be able to find financing. Thus has the Ex-Im Bank become the current Rorschach test of American politics.

I am returning to this subject because I continue to find it mind-boggling that anyone in Washington would want to pursue a path that is so clearly destructive to the economy. But that is exactly what is happening. Conservative organizations like Heritage Action for America and Americans for Prosperity (financed by the Koch brothers) have made killing the Ex-Im Bank their cause. And it has been taken up by Tea Party Republicans in the House, as well as Jeb Hensarling, the powerful chairman of the House Financial Services Committee. Although it is likely that the Senate will pass a reauthorization bill this month, if the House doesn’t follow suit by the end of September, the Ex-Im Bank will not be reauthorized. Companies that rely on the Ex-Im Bank’s array of financing products to complete deals will, unquestionably, be hurt. Many of them will be small and medium-size companies that are able to export only because of the assistance they get from the Ex-Im Bank. I have written about them in previous columns.

But some will be big guns like Boeing, Caterpillar and General Electric. It’s worth dwelling on these large companies for two reasons. First, customers of these big companies get the bulk of the Ex-Im Bank’s assistance. Though this seems completely logical — the biggest companies do the biggest deals, after all — this has also made them a target of the right, which views the relationship between the bank and American multinationals as the paradigmatic example of “crony capitalism.”

Second, most of the arguments made against the Ex-Im Bank revolve around its help to the big companies, not the small ones. For instance, it is argued that big companies have their own means of helping customers finance deals. That’s true, but it’s the customers, not the companies, that are pushing for export credit guarantees. A Boeing source told me that it is hearing from customers and potential customers about the fate of the Ex-Im Bank. “It’s a big deal,” my source said, especially in places like Africa, where conventional financing for aircraft is hard to come by.

“Nobody is saying these companies are going to die if they can’t use the Ex-Im Bank,” said Gary Clyde Hufbauer, a senior fellow at the Peterson Institute for International Economics and a member of the Ex-Im Bank’s advisory board. “The issue is their ability to meet their competition.” Hufbauer ticked off some of the competitors: Siemens of Germany is a huge company that competes with G.E.; Komatsu of Japan competes with Caterpillar; and, of course, Airbus competes with Boeing. Each of them gets assistance from their own export credit agency, none of which will go away if the U.S. decides not to reauthorize the Ex-Im Bank.

One thing the House Republicans have sought is a commitment from the Treasury Department to lobby for the elimination of export credit agencies around the world. But this is an ideological pipe dream. Other countries have no interest in walking away from export assistance; indeed, countries like China and Japan are far more wedded to this kind of assistance than the U.S. is.

In its editorial on Monday, The Journal mocked the phrase “unilateral disarmament” in regards to the Export-Import Bank. But that is what it would be. There are times when we have to accept the world as it is, rather than how we wish it would be. And like other countries, we ought to be helping our companies get business, and thus increase employment and economic growth — not forcing them to compete with one hand tied behind their backs.

Nocera and Collins

July 12, 2014

In “American Apparel Is a Lesson in How Not to Run a Company” Mr. Nocera says the juvenile antics of American Apparel’s founder finally catch up with him.  Ms. Collins has some “Rules to Run By.”  She says there’s good news, people!  There have already been many insightful and helpful hints gleaned from this election year that we can now share with 2014 hopefuls.  Here’s Mr. Nocera:

In the same week that a hedge fund, Standard General, essentially took over American Apparel, Bloomberg Businessweek published an eye-opening story about the company and its founder and former chief executive, Dov Charney. Eye-opening not in the usual manner when it comes to Charney: The magazine didn’t uncover any new allegations of sexual harassment, nor did the reporter watch him engaging in oral sex, as a writer from Jane magazine once famously witnessed.

Instead, the Businessweek story focused primarily on Charney as a businessman. That’s pretty salacious too, or at least it is if you’re a management wonk. As it turns out, both Charney and the American Apparel board offer a case study in how not to run a company. Here’s the money quote: “All along they were thinking that anything goes in Charneyville,” Thomas White, a professor of business ethics at Loyola Marymount University, told Businessweek, speaking of the directors. “They only started to worry when they looked up and saw financial disaster.”

Anything goes indeed. That infamous Jane magazine story was written a decade ago: That is how long the board has known about his antics. By the middle of 2005, reports Businessweek, Charney was facing two sexual harassment suits. (One was dismissed in arbitration; the other was settled for $1.3 million.) Yet when asked about these early allegations, Allan Mayer, a public relations executive who is co-chair of the board, said, “One of the things you learn when you do crisis management is that where there is smoke, there isn’t always fire.” Of course, another thing you learn in crisis management is that quite often when there is smoke, there really is fire. But Mayer and the rest of the board simply didn’t want to know about it.

Why was the board so willing to look the other way? One reason is that Charney had founded the company. Its identity and that of its founder were intertwined. Charney himself had no other interests outside his company — and his sex life. He viewed himself as indispensable, and the board went along with him. And if his sexually charged advertising helped make American Apparel a hit, well, you could hardly expect the office to be run like a convent.

But he also had the classic flaws of a founder. Though his passion got the company up and running, he lacked the skills necessary for guiding a large enterprise. His micromanaging drove off virtually every talented executive he ever hired. In 2007, after the company went public and he had to bring in a chief financial officer, he told The Wall Street Journal that the man he hired was a “complete loser.” Which of course caused the man to quit.

He dreamed oversized dreams — even Charney now acknowledges that after the company’s I.P.O. he probably expanded more quickly than he should have. He took pride in the fact that American Apparel’s clothes were made in America, but when the company was subjected to an immigration audit in 2009, it had to lay off half of its factory workers, according to Businessweek. “The disruption led to delayed shipments and an expensive hiring and training program.”

It has basically been downhill ever since. The company has consistently lost money — while piling up expensive debt — over the last four years. Its sales slowed dramatically. The stock has tanked. It built a new automated distribution center in 2013 that was supposed to save $5 million a year. Instead, it was so error-riddled that it cost the company “at least $15 million,” says Businessweek.

In February, Mayer, the board director, and a consultant close to Charney took him out to dinner and advised him to bring in some seasoned executives. Instead, in May, Charney forced out the general counsel.

To Businessweek — and to anyone else who will listen — Mayer insists that the board fired him because of his behavior. But it is hard to imagine that it would have done so if the company was still making money. Although American Apparel is still using Charney as a consultant, my guess is that he’ll never have a meaningful role at the company again. It needs executives who are grown-ups.

One person who saw it all coming was Robin Lewis, who writes The Robin Report, a blog about retailing. In 2011, he noted the departure of a man named Marty Staff, who had been American Apparel’s president of business development — and the former chief executive of Hugo Boss. Describing the loss of a pro like Staff as American Apparel’s “last chance for survival, lost,” he wrote: “Quite frankly, it amazes me that as C.E.O. of a publicly owned company, given American Apparel’s financial condition and his questionable and storied behavior, Charney still has a job.”

And to think: It only took the American Apparel board three more years to come to the same obvious conclusion.

Now here’s Ms. Collins:

The 2014 election year is just kicking into gear, but we’ve learned so much already. Among the political pointers for candidates of the future:

Do not attempt to curry favor with the voters by changing your name.

Scott Fistler tried to improve his extremely remote chance of winning the Democratic Congressional nomination in a largely Hispanic Arizona district by legally changing his name to Cesar Chavez. After a relative of the deceased farm labor leader filed a complaint, Fistler/Chavez was thrown off the ballot. The disappointed ex-candidate told reporters that politics is “a vicious game.”

… although it’s totally fair to go with the one you’ve already got.

Beleaguered Democrats in Texas are nurturing at least faint hopes for their current attorney general candidate, Sam Houston. “I try not to be so cynical to think that people just go in and vote for a name,” Houston said.

Try not to run ads with pictures of local residents who are actually Parisian office workers.

Mike Rounds, a Republican candidate for the U.S. Senate in South Dakota, unveiled a video in which he bragged about how much the rest of the country could learn from the folks who live in his state. It was illustrated with stock photos of models portraying wholesome average citizens, one of whom turned out to be a woman holding a pen in an office in Paris.

… or European coal miners.

Alison Grimes, the Democratic Senate candidate in Kentucky, sent reporters copies of an ad she planned to run expressing her wrath at President Obama’s new clean air rules and showing an angry-looking miner. The man was actually a Ukrainian model holding up a piece of coal. Grimes campaign aides said they had discovered the problem themselves and replaced it with a picture of an American model holding up a piece of coal.

… or maybe you should just take the pictures yourself.

Joni Ernst, the Republican Senate candidate in Iowa, became famous for her video bragging that she had spent her youth on a farm castrating hogs. She urged voters to watch the video in a posting that featured a stock photo of a pig from Denmark.

Try not to compare things to slavery.

Dr. Ben Carson, up-and-coming star of the G.O.P. right wing, spent a good part of the season denying that he had compared the Affordable Care Act to African-American enslavement. When all he actually said was that Obamacare is “the worst thing that has happened in this nation since slavery, and … it is slavery in a way because it is making all of us subservient to the government.”

… or spousal abuse.

Sarah Palin, calling for the impeachment of the president, said the influx of young illegal immigrants over the southern border “is the last straw that makes the battered wife say, ‘no mas.’ ”

Have a staff aide explain how people can take videos of you talking to private groups even when you’re totally off the record.

At a fund-raiser in Texas, Bruce Braley, a candidate for the Senate in Iowa, got caught warning a group of well-to-do trial lawyers that if Democrats don’t keep control of the Senate, the Judiciary Committee would be run by “a farmer from Iowa who never went to law school.”

Watch it when you bring up people’s sexual preference.

Texas governor and potential presidential candidate Rick Perry said people could decide whether or not they wanted to be homosexual just as “I may have the genetic coding that I’m inclined to be an alcoholic, but I have the desire not to do that.”

… or fantasy abductors.

“What are your thoughts about Thad Cochran being in with Slender Man?” Glenn Beck asked Chris McDaniel, who was running against Senator Cochran in the Mississippi Republican primary. Slender Man is a weird Internet character who abducts children. McDaniel, who laughed, lost the primary.

When you get the urge to suggest that a politician might be assassinated, repress it.

Johnny Rhoda, a Republican official in Arkansas, said that if Hillary Clinton returned there as a presidential candidate “she’d probably get shot at the state line.” He claimed he was quoted out of context, then turned in his resignation.

… in fact, think twice before discussing anything that involves people being shot.

A candidate for a Republican Congressional nomination in Arizona apologized after saying during a debate that “99 percent” of the mass shootings in America “have been by Democrats.”

If you can’t say anything nice …

Eric Cantor used part of his vast pile of campaign cash to launch a series of attack ads against his totally unknown primary opponent in Virginia. Cantor’s constituents were surprised and delighted to hear that there was actually someone running against him, and promptly voted the House majority leader out of office.

… really, stop advertising.

A new report from the Brookings Institution suggests higher spending on anti-Obamacare ads may lead to higher Obamacare enrollment.

Brooks and Nocera

July 8, 2014

Mr. Bruni is off today.  Bobo thinks he can tell us all about “The Creative Climate.”  He gurgles that creative tension between people and within individuals is fundamental to social evolution.  He uses Lennon and McCartney as examples.  “Gemli” from Boston begins a lengthy comment with this:  “The whirring sound you hear is John Lennon spinning in his grave, disturbed from his rest by being used as a prop to promote conservative political ideology. He doesn’t look happy.”  Mr. Nocera takes a look at “The Messy World of Smart Guns” and says advancements in technology and legislation run up against the N.R.A.   In the comments “Craig Geary” of Redlands, FL had this to say:  “The NRA stance against smart gun technology is about as honest as the claimed patriotism of NRA Grand Panjandrum Wayne La Pierre.  Old Blood, Guts and Dead School Children holds himself out as a red blooded American.  Always failing to mention he got himself exempted from the Viet Nam draft for an alleged ‘anxiety disorder’.  As in, little Wayne was a tad anxious about the possibility of getting shot.”  Here’s Bobo:

In the current issue of The Atlantic, Joshua Wolf Shenk has a fascinating description of how Paul McCartney and John Lennon created music together. McCartney was meticulous while Lennon was chaotic. McCartney emerged out of a sunny pop tradition. Lennon emerged out of an angst-ridden rebel tradition.

Lennon wrote the song “Help” while in the throes of depression. The song originally had a slow, moaning sound. McCartney suggested a lighthearted counter melody that, as Shenk writes, fundamentally changed and improved the nature of the piece.

Lennon and McCartney came from different traditions, but they had similar tastes. They brought different tendencies to the creative process but usually agreed when the mixture was right. This created the special tension in their relationship. They had a tendency to rip at each other, but each knew ultimately that he needed the other. Even just before his death, Lennon was apparently thinking of teaming up with McCartney once again.

Shenk uses the story to illustrate the myth of the lone genius, to show that many acts of genius are the products of teams or pairs, engaged in collaboration and “co-opetition.” And we have all known fertile opposites who completed each other — when they weren’t trying to destroy each other.

But the Lennon-McCartney story also illustrates the key feature of creativity; it is the joining of the unlike to create harmony. Creativity rarely flows out of an act of complete originality. It is rarely a virgin birth. It is usually the clash of two value systems or traditions, which, in collision, create a transcendent third thing.

Shakespeare combined the Greek honor code (thou shalt avenge the murder of thy father) with the Christian mercy code (thou shalt not kill) to create the torn figure of Hamlet. Picasso combined the traditions of European art with the traditions of African masks. Saul Bellow combined the strictness of the Jewish conscience with the free-floating go-getter-ness of the American drive for success.

Sometimes creativity happens in pairs, duos like Lennon and McCartney who bring clashing worldviews but similar tastes. But sometimes it happens in one person, in someone who contains contradictions and who works furiously to resolve the tensions within.

When you see creative people like that, you see that they don’t flee from the contradictions; they embrace dialectics and dualism. They cultivate what Roger Martin called the opposable mind — the ability to hold two opposing ideas at the same time.

If they are religious, they seek to live among the secular. If they are intellectual, they go off into the hurly-burly of business and politics. Creative people often want to be strangers in a strange land. They want to live in dissimilar environments to maximize the creative tensions between different parts of themselves.

Today we live in a distinct sort of creative environment. People don’t so much live in the contradiction between competing worldviews. We live in a period of disillusion and distrust of institutions.

This has created two reactions. Some monads withdraw back into the purity of their own subcultures. But others push themselves into the rotting institutions they want to reinvent. If you are looking for people who are going to be creative in the current climate, I’d look for people who are disillusioned with politics even as they go into it; who are disenchanted with contemporary worship, even as they join the church; who are disgusted by finance even as they work in finance. These people believe in the goals of their systems but detest how they function. They contain the anxious contradictions between disillusionment and hope.

This creative process is furthest along, I’d say, in the world of B corporations. There are many people today who are disillusioned both with the world of traditional charity and traditional capitalism. Many charities have been warmheartedly but wastefully throwing money at problems, without good management or market discipline. Capitalists have been obsessed with the short-term maximization of shareholder return without much concern for long-term prosperity or other stakeholders.

B corporations are a way to transcend the contradictions between the ineffective parts of the social sector and myopic capitalism. Kyle Westaway, a lawyer in this field and the author of the forthcoming “Profit & Purpose,” notes that benefit corporation legal structures have been established in 22 states over the last four years. The 300 or so companies that have registered in this way, like Patagonia or Method, can’t be sued if they fail to maximize profits in order to focus on other concerns. They are seeking to reinvent both capitalism and do-gooder-ism, and living in the contradiction between these traditions.

This suggests a final truth about creativity: that, in every dialectic, there is a search for creative synthesis. Or, as Albert Einstein put it, “You can never solve a problem on the level on which it was created.”

I wonder if Bobo is ever going to address politics again, or if he’s too ashamed to admit he’s a member of the party of the Mole People…  Here’s Mr. Nocera:

The Andy Raymond rant is a thing to behold.

Raymond, the co-owner of Engage Armament in Montgomery County, Md., is one of the two gun dealers who, a few months ago, tried to sell the Armatix iP1 — a.k.a., the first commercially available “smart gun” — to his customers. He thought that not only did he have every right to sell a smart gun, but that he was doing the gun world a favor by offering a gun that had the potential to expand the universe of gun owners. Instead, both Engage Armament and Oak Tree, a California-based gun dealer, backed away after receiving a torrent of hate mail and death threats from gun-rights absolutists.

In the rant, which he posted on his Facebook page, Raymond is sitting in front of an array of semiautomatic weapons. He has a bottle of what appears to be whiskey next to him. He acknowledges that he’s been drinking. From time to time, he takes a puff on a cigarette. (I don’t have a Facebook page, so I relied on excerpts from the rant that were shown on Chris Hayes’s MSNBC show, “All In.”)

“How can the N.R.A. want to prohibit a gun when we’re supposed to be pro-gun?” he says. “How hypocritical is that?” Then, after an angry, expletive-filled shout-out to those who sent him death threats, he changes direction. He denies ever selling an Armatix pistol. And then he says, “I thought my principles were correct, but maybe I was wrong.” And he apologizes. And with one last gulp of whiskey, he is done.

Which is to say, he epitomizes the state of smart guns right now. The whole thing is a bit of a mess.

I last looked into smart gun technology about a year and a half ago, and what I saw then was a lot of ferment — and genuine excitement about the potential of smart-gun technologies. I found people who had been working on smart guns for years, like Don Sebastian of the New Jersey Institute of Technology, and newcomers to the field like Ron Conway, the Silicon Valley investor who was galvanized by the massacre in Newtown, Conn., and began backing a smart-gun effort. It was also the first time I heard about a New Jersey law that said that if smart guns became commercially available anywhere in the country, New Jersey gun dealers would be required, within three years, to sell only guns that had smart-gun technology.

The idea, said Loretta Weinberg, the New Jersey Senate majority leader who sponsored the legislation 12 years ago, was partly to spur gun innovation. Instead, it held back innovation, as traditional gun manufacturers saw no incentive in investing in smart-gun technology. It was also vehemently opposed by the National Rifle Association, which viewed it, not incorrectly, as a gun control effort. Gun advocates mocked smart-gun technologies, claiming the “bad guys” with normal guns would have the advantage over the “good guys” with smart guns.

The New Jersey law was at the heart of the objections to Oak Tree and Engage Armament selling the Armatix smart gun. The fear of gun advocates is that if someone did start selling a commercialized smart gun, the three-year clock would start ticking in New Jersey.

When I spoke to smart-gun advocates this time around, I found a great deal of mixed emotions about the New Jersey law. Jonathan Mossberg, who runs something called the iGun Technology Corporation — and is an avowed gun advocate — told me that the New Jersey mandate “needs to be repealed.”

Stephen Teret, the co-director of the Center for Law and the Public’s Health at Johns Hopkins University — and an expert on smart-gun technology — said that he thought the law would soon be irrelevant. “There will be a personalized gun sold very soon,” he told me. “It will be the Armatix gun that people are talking about.” He wouldn’t tell me who the seller would be, however.

Senator Weinberg acknowledged that her bill may have become an impediment rather than a spur to gun safety.

There is still a lot going on in smart-gun technology. Sebastian continues to plug away at a technology that would recognize an owner’s grip, and only allow that person to use the gun. Ron Conway’s group, the Smart Tech Foundation, just awarded a total of $1 million to 15 grantees that are working on promising smart-gun technologies.

As for Weinberg, she told me that she had approached the N.R.A. as recently as two weeks ago and said she would try to get her law repealed if the N.R.A. would promise not to block smart-gun technology from reaching the marketplace. “I said we might have some common ground here.” The N.R.A. did not reply.

What a surprise.


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