In “The Opportunity Coalition” Bobo gurgles that President Obama should devote the remainder of his term to building governing structures for future presidents for years to come. I guess he’s in a bit of a flop sweat over the idea of executive action… “Michael” from Los Angeles had this to say in the comments: “Aw, c’mon, the Whigs are your model for politics in the 21st century? That is almost as ridiculous as building a coalition with Republicans, whose platform consists of divide and destroy.” Mr. Cohen offers “A Middle Eastern Primer” and says foreign policy is a posh term for managing contradictions. Prof. Krugman is “Talking Troubled Turkey” and says the last thing we needed right now was a new economic crisis in a country overwhelmed with political turmoil. Haven’t we heard this one before? Here’s Bobo, all full of “useful” suggestions:
President Obama can spend the remainder of his term planting a few more high-tech hubs, working on reforming the patent law and doing the other modest things he mentioned in his State of the Union address. And if he did that, he might do some marginal good, and he would manage the stately decline of his presidency during its final few years.
Or, alternately, he can realize that he is now at a moment of liberation. For the past five years he has been inhibited by the need to please donors, to cater to various Congressional constituencies and to play by Washington rules.
But the legislating phase of his presidency is now pretty much over. Over the next few years he will be free to think beyond legislation, beyond fund-raising, beyond the necessities of the day-to-day partisanship. He will have the platform and power of the presidency, but, especially after the midterms, fewer short-term political obligations.
This means he will have the opportunity to build what he himself could have used over the past few years: An Opportunity Coalition. He’ll have the chance to organize bipartisan groups of mayors, business leaders, legislators, activists and donors into permanent alliances and institutions that will formulate, lobby for, fund and promote opportunity and social mobility agendas for decades to come.
There are already signs that President Obama is stepping back to take the long view. In his interviews with David Remnick of The New Yorker, he observed that the president is “essentially a relay swimmer in a river full of rapids.” You are trying to do your leg and pass things along to the next swimmer. As president, he’s been made aware of how little a president can accomplish unless there is organized support from the outside. Obama now has the chance to build that support for future presidents, on the issues that concern him most.
He might start, for example, by scrambling the current political categories. We now have one liberal tradition that believes in using government to enhance equality. We have another conservative tradition that believes in limiting government to enhance freedom. These two traditions have fought to a standstill and prevented Obama from passing much domestic legislation of late.
But there is a third ancient tradition that weaves through American history, geared directly at enhancing opportunity and social mobility. This is the Whig tradition, which begins with people like Henry Clay, Daniel Webster and Abraham Lincoln. This tradition believes in using the power of government to give marginalized Americans the tools to compete in a capitalist economy.
The Whigs fought against the divisive populist Jacksonians. They argued that it is better to help people move between classes than to pit classes against each other. They also transcended our current political divisions.
The Whigs were interventionist in economics while they were traditionalist and family-oriented in their moral and social attitudes. They believed America should step boldly into the industrial age, even as they championed cultural order. The Whigs championed large infrastructure projects and significant public investments, even as they believed in sacred property rights. They believed in expanding immigration along with assimilation and cohesion.
President Obama could travel the country modernizing the Whig impulse, questioning current divisions and eroding the rigid battle lines. More concretely, he could create a group of Simpson-Bowles-type commissions — with legislators, mayors, governors and others brought together to offer concrete proposals on mobility issues from the beginning to the end of the life span:
Is there a way to improve family patterns so disadvantaged young children grow up in more ordered environments? Is there a way to improve Head Start and intelligently expand early childhood education? Is there a way to structure neighborhoods so that teenagers are more likely to thrive? Is there a way to get young men wage subsidies so they are worth marrying? Is there a way to train or provide jobs for unemployed middle-aged workers?
These commissions could issue their reports in the spring of 2016, to make life maximally difficult for the next presidential candidates.
President Obama could also credential a different style of public sector leader. If you are trying to pass legislation, you staff your administration with political operatives. But if you are trying to change the discussion and mobilize the country, you hire and promote social entrepreneurs, people from Ashoka, Teach for America, Opportunity International, the International Justice Mission and the Clinton Global Initiative. Once hired in this White House, these people will be filling senior government jobs for decades to come.
President Obama began his career as an organizer. His mobility agenda floundered because the governing majority he needed to push it forward does not exist. He has the chance to remedy that, to organize, to convene, to build, and to make life a lot easier for the next swimmer in the race.
Anything to keep him from, you know, acting… Here’s Mr. Cohen, writing from Gstaad, Switzerland:
Events in the new Middle East, which is located in western Asia like the old Middle East, can seem confusing. In the belief that clarity leads to understanding, which in turn leads to good policy, here is a primer for the region.
1) The United States invaded Iraq in 2003 because of its weapons of mass destruction program. However, Iraq did not have any weapons of mass destruction. The invasion brought the Shiite (see below) majority to power, so advancing the interests of Shiite Iran, America’s enemy. It ousted the Sunnis, upsetting the Sunni-Shiite balance in the Middle East. This infuriated Sunni Saudi Arabia, America’s ally (in theory).
2) To redress the balance, the wealthy Saudi royal family backs Sunni Islamists in Syria against the country’s despot, Bashar al-Assad (who is from the quasi-Shiite Alawite sect), but at the same time is bankrolling the destruction of Sunni Islamists in Egypt. This wrong sort of Sunnis, known as the Muslim Brotherhood, commits the ultimate lèse-majesté of believing in the ballot box as a source of authority rather than royal lineage.
3) In the aftermath of the Arab Spring (see below) the three main Arab states — Egypt, Syria and Iraq — are in disarray. The functioning or semi-functioning states in the Middle East are non-Arab: Israel, Turkey and Iran. Israel has been in a stop-go war with Arabs since 1948 over claims to the same land but is most angry with Iran, which is not Arab, not Sunni and not on its border.
4) Sunni-Shiite tensions have escalated through the Syrian war. They are now regional. The Sykes-Picot Middle Eastern order is in tatters. Sir Mark Sykes and François Georges-Picot were dyspeptic European diplomats who drew lines on maps that became the borders of the modern Middle East (don’t sweat the details).
5) Let’s talk Turkey: It backs the Sunni fighters battling to oust Assad in Syria. But it is close to Iran, which supports Assad against this very Sunni insurgency. The Turkish government is furious about a military coup in Egypt that last year ousted a democratically elected Muslim Brotherhood president. The United States declines to call this coup a coup. It is wise not to ask why if you plan to visit Egypt, which you probably don’t.
6) Think of the Middle East as a huge arms bazaar. The United States plans to sell Apache helicopters to the Shiite government of Iraq, with which to suppress Sunni revanchist stirrings, while the United States is (sort of) supporting the Sunnis against the Shiite-backed Assad in Syria.
7) Saudi Arabia thinks the United States is not backing the Sunnis enough in Syria. The Saudis blame Iran for everything, including (but not limited to) unrest in Bahrain, the Arab Spring, terrorism and the melting of the polar ice cap. The Sunni Wahhabi Islamism trafficked by the Saudi royal family sees Zionism as its enemy. However, Saudi views are often identical to Israeli views (again, don’t sweat the details).
8) Like the old Middle East the new Middle East has a cottage industry called the peace process. This involves Israelis, Palestinians and various mediators, principally the United States. Palestinians are represented by the Palestinian Authority, an authority that has no authority over Palestinians in Gaza, no democratic legitimacy, and no obvious claim to represent anything but itself.
9) Israel has a nuclear deterrent but tries to pretend it does not because if it did it could presumably deter Iran, which does not have a nuclear weapon. The United States and Israel have agreed never to talk about the Jewish state’s alleged nuclear weapons (again, don’t ask).
10) The Arab Spring happened three years ago. Several nasty despots were swept out. This event demonstrated that nobody controls the new Middle East: No nation could produce that much change that fast. The revolutions produced a vacuum. Sectarianism loves a vacuum. Sectarianism means looking out for your own and brutalizing the rest (see Egypt, Syria etc.).
11) Iran is a theocracy. The supreme leader stands in for the hidden imam, who disappeared long ago but could show up any time. (Sunnis and Shiites had an inheritance wrangle after Muhammad’s death in 632, which led to a split. One thing they don’t agree about is the hidden imam.) Iran has something called a nuclear issue. The United States and other powers have reached an interim nuclear accord with Iran opposed by Israel, Saudi Arabia, the largest American pro-Israel lobby, and many members of the U.S. Congress who have drafted a bill President Obama vows to veto that says America should “stand with Israel” and provide “diplomatic, military and economic support” to Israel if it goes to war with Iran, which it has been threatening to do for a very long time.
12) Got it now? Good. If not, don’t worry. Foreign policy is a posh term for managing contradictions.
And now here’s Prof. Krugman:
O.K., who ordered that? With everything else going on, the last thing we needed was a new economic crisis in a country already racked by political turmoil. True, the direct global spillovers from Turkey, with its Los Angeles-sized economy, won’t be large. But we’re hearing that dreaded word “contagion” — the kind of contagion that once caused a crisis in Thailand to spread across Asia, more recently caused a crisis in Greece to spread across Europe, and now, everyone worries, might cause Turkey’s troubles to spread across the world’s emerging markets.
It is, in many ways, a familiar story. But that’s part of what makes it so disturbing: Why do we keep having these crises? And here’s the thing: The intervals between crises seem to be getting shorter, and the fallout from each crisis seems to be worse than the last. What’s going on?
Before I get to Turkey, a brief history of global financial crises.
For a generation after World War II, the world financial system was, by modern standards, remarkably crisis-free — probably because most countries placed restrictions on cross-border capital flows, so that international borrowing and lending were limited. In the late 1970s, however, deregulation and rising banker aggressiveness led to a surge of funds into Latin America, followed by what’s known in the trade as a “sudden stop” in 1982 — and a crisis that led to a decade of economic stagnation.
Latin America eventually returned to growth (although Mexico had a nasty relapse in 1994), but, in the 1990s, a bigger version of the same story unfolded in Asia: Huge money inflows followed by a sudden stop and economic implosion. Some of the Asian economies bounced back quickly, but investment never fully recovered, and neither did growth.
Most recently, yet another version of the story has played out within Europe, with a rush of money into Greece, Spain and Portugal, followed by a sudden stop and immense economic pain.
As I said, although the outline of the story remains the same, the effects keep getting worse. Real output fell 4 percent during Mexico’s crisis of 1981-83; it fell 14 percent in Indonesia from 1997 to 1998; it has fallen more than 23 percent in Greece.
So is an even worse crisis brewing? The fundamentals are slightly reassuring; Turkey, in particular, has low government debt, and while businesses have borrowed a lot from abroad, the overall financial situation doesn’t look that bad. But each previous crisis defied sanguine expectations. And the same forces that sent money sloshing into Turkey also make the world economy as a whole highly vulnerable.
You may or may not have heard that there’s a big debate among economists about whether we face “secular stagnation.” What’s that? Well, one way to describe it is as a situation in which the amount people want to save exceeds the volume of investments worth making.
When that’s true, you have one of two outcomes. If investors are being cautious and prudent, we are collectively, in effect, trying to spend less than our income, and since my spending is your income and your spending is my income, the result is a persistent slump.
Alternatively, flailing investors — frustrated by low returns and desperate for yield — can delude themselves, pouring money into ill-conceived projects, be they subprime lending or capital flows to emerging markets. This can boost the economy for a while, but eventually investors face reality, the money dries up and pain follows.
If this is a good description of our situation, and I believe it is, we now have a world economy destined to seesaw between bubbles and depression. And that’s not an encouraging thought as we watch what looks like an emerging-markets bubble burst.
The larger point is that Turkey isn’t really the problem; neither are South Africa, Russia, Hungary, India, and whoever else is getting hit right now. The real problem is that the world’s wealthy economies — the United States, the euro area, and smaller players, too — have failed to deal with their own underlying weaknesses. Most obviously, faced with a private sector that wants to save too much and invest too little, we have pursued austerity policies that deepen the forces of depression. Worse yet, all indications are that, by allowing unemployment to fester, we’re depressing our long-run as well as short-run growth prospects, which will depress private investment even more.
Oh, and much of Europe is already at risk of a Japanese-style deflationary trap. An emerging-markets crisis could, all too plausibly, turn that risk into reality.
So Turkey seems to be in serious trouble — and China, a vastly bigger player, is looking a bit shaky, too. But what makes these troubles scary is the underlying weakness of Western economies, a weakness made much worse by really, really bad policies.