Friday, February 13, 2004

The long knives of the Democrats

I've discussed previously the role of foreign policy wonks as a leading indicator for presidential campaigns -- click here, here, and here for more.

What I haven't discussed is what happens to those on the losing side of presidential campaigns. Franklin Foer's New Republic cover story on the rise and fall of the inside the Beltway Deaniacs covers this, and as someone acquainted with a lot of the principals, it makes for scary reading. Here's the relevant excerpt:

Last week, I called Ivo Daalder, an alumnus of Bill Clinton's national security team, at his Brookings Institution office. And, while etiquette might dictate that Daalder lavish praise on the vanquished candidate, he spent our phone conversation critiquing Dean's foreign policy. In Daalder's view, the Vermont governor's positions on Iraq range from the facile--"bringing into [Iraq] one hundred thousand Muslim troops that don't exist"--to the self-destructive--"I didn't like that he criticized the [Democrats] senators who voted for the eighty-seven billion dollars. We can't get things right in Iraq without the funding."

What makes this rebuke of Dean's foreign policy particularly odd is that Daalder was himself a primary architect of that policy. It was Daalder who helped draft the speech Dean delivered at the Pacific Council for International Policy last December, outlining his approach to national security. In foreign policy interviews Dean gave to The Washington Post and The New York Times a day before that speech, Daalder sat by the governor's side. Similarly, it was Daalder who presided over a question-and-answer session at the National Press Club, when the Dean campaign unveiled its foreign policy team. According to one of his Brookings colleagues, who watched a procession of high-powered Democrats traipse to Daalder's office to pay respect to Dean, "Ivo was The Guy."

In the wake of Dean's unraveling, however, Daalder is promoting a revisionist history of the campaign, where his status is downgraded to something significantly less than The Guy. "My position is that I'm happy to advise anyone." He pauses before adding, "I don't have a central role, and I never did."

Why is Daalder backpedaling so furiously? Because he understands that he could suffer payback for his Deaniac days.....

By the time Dean began assembling his national security team, though, most of the Democratic foreign policy establishment--which is now heavily clustered at the Brookings Institution--was already quietly committed to the Kerry, Wesley Clark, and John Edwards campaigns (in the case of some wonks, all three at once). Without the party's A-list names, the Dean campaign began searching for advisers in less glamorous quarters. For their foreign policy rollout, they signed up former Secretary of State Warren Christopher and former national security adviser Tony Lake--veterans of Clinton's first term. But, in Democratic circles, Clinton's first term is widely considered a low point in the party's foreign policy, and, in any case, Christopher and Lake weren't substantive advisers. So, last fall, Dean recruited two mid-level Clintonites from Brookings for his day-to-day needs, former Director of European Affairs at the National Security Council Ivo Daalder and former Assistant Secretary of State for African Affairs Susan Rice.

For many in the Democratic foreign policy establishment, Dean was seen as dangerous. They worried that his strident opposition to the Iraq war would revive old clichés about the party's pacifism and that his claim that Saddam Hussein's capture did nothing to enhance U.S. security would prove fodder for countless GOP ads. No one was more concerned on this score than Daalder's Brookings colleague and occasional co-author, Michael O'Hanlon, who penned scathing op-eds in The Wall Street Journal and The Washington Times attacking Dean. O'Hanlon, who advises several of the candidates--including Kerry--told me, "More Democrats should have recognized [Dean's] danger and spoken out against him." Within Brookings, O'Hanlon's pieces were seen as a direct assault on Daalder and Rice and a break with the institution's genteel mores. One Brookings fellow describes them as "just bizarre. Forgive me, but that was personal, not professional." Others at the think tank reported witnessing loud, uncomfortable hallway arguments between Daalder and O'Hanlon over Dean.

At the time, Dean was still riding high, and--O'Hanlon's attacks notwithstanding--so were Daalder and Rice. But now that Dean is done, Rice and especially Daalder may find their career prospects also dimmed. When I spoke with the foreign policy gurus who would likely stock a Democratic administration, they seemed to regard the Dean campaign as a debilitating black mark on one's resumé. It doesn't help Daalder that he took an aggressive posture during Dean's glory days. Instead of privately conceding his candidate's foreign policy shortcomings, Daalder defended him to the hilt. "After Dean delivered the line about Saddam's capture, Ivo was quite animated in defending that sentence," says one Brookings fellow. And, as a former Clinton administration official told me, "If you're a policy adviser, you exist to stop lines like that from being delivered. And, if it gets delivered over your objections, you have an obligation to fall on your sword. This whole campaign causes me to question [Daalder's and Rice's] judgment."

As Kerry's consolidation of power continues, rancorous debates over the Dean campaign will probably disappear from the hallways of Brookings. But that doesn't mean that those disputes will be forgotten. One fellow at the Brookings Institution accuses Dean's foreign policy advisers of "contributing to a [campaign] that could have helped their careers but hurt the party." It doesn't look like Brookings will be regaining its gentility any time soon.

Read the entire piece to see how AFL-CIO and the Democratic Leadership Council are handling the Deaniacs in their midst.

[Wouldn't this happen with Republicans as well?--ed. You'd think so, except that many (though not all) of the neoconservatives believed to be currently running U.S. foreign policy supported John McCain over George W. Bush in 2000.]

posted by Dan at 05:05 PM | Comments (24) | Trackbacks (2)

Help wanted

In theory, trade is a Pareto-improving for an economy as a whole -- that is to say, through free trade, some people can be made better off without others being made worse off. Now, that doesn't necessarily work in practice, unless the losers from trade are compensated by the winners.

In theory, Trade Adjustment Assistance -- a program introduced in 1974 -- provides exactly this form of compensation. According to this Labor Department fact sheet, such benefits include:

Training for employment in another job or career. Workers may receive up to 104 weeks of approved training in occupational skills, basic or remedial education, or training in literacy or English as a second language.

Income Support known as trade readjustment allowances (TRA) are weekly cash payment available for 52 weeks after a worker's unemployment compensation (UC) benefit is exhausted and during the period in which a worker is participating in an approved full-time training program. Income Support is a combination of UC and TRA benefits for a maximum of 78 weeks (26 weeks for UC and 52 weeks for TRA).

Job Search Allowance may be payable to cover expenses incurred in seeking employment outside your normal commuting area.

Relocation Allowances provide reimbursement for approved expenses if you are successful in obtaining employment outside your normal commuting area for you to relocate to your new area of employment.

In other words, TAA is designed to facilitate workers let go due to trade pressures to find jobs in more competitive sectors.

Sounds great -- but it's not clear that, as currently written, outsourced workers would fit the criteria for inclusion. The criteria are:

(1) that workers have been totally or partially laid off, and

(2) that sales or productions have declined, and

(3) that increased imports have contributed importantly to worker layoffs.

Since a lot of offshore outsourcing takes place within a single firm, and it increases productivity, I doubt (2) would be met -- sales/output would increase and not decrease.

Here's my question to informed readers:

1) Am I reading this correctly?

2) If so, to what extent should the TAA criteria be expanded?

posted by Dan at 04:04 PM | Comments (20) | Trackbacks (0)

What's going on in Fallujah?

It would seem that hostility to the United States has not waned in Fallujah. The attack on General John Abizaid , the top U.S. military commander in Iraq, would seem to confirm this. This reporter's first-hand account of the attack contains this priceless passage:

Abizaid was walking about, seemingly unfazed, talking to some of the Iraqi Civil Defense Corps members he had come to visit. I grabbed my camera and began shooting pictures of him talking to an Iraqi commander. I noticed Abizaid, an expert in Arab affairs, was speaking in Arabic. He told me later the commander said, with regard to the attack: "This is Fallujah. What do you expect?"

This would seem to be Juan Cole's assessment as well. Certainly the increase in attacks in recent weeks is fueling fears of Balkanization.

However, the Chicago Tribune has another story on Fallujah today suggesting that the situation might not be as bleak as first thought:

The reputation of Fallujah is simple and fearsome: It's known as the toughest town in Iraq, the epicenter of the insurgency, the place where more than 35 American soldiers have lost their lives.

An attack Thursday--when a top U.S. general's visit was disrupted by rocket-propelled grenades--added more evidence to the indictment.

But something else is happening in Fallujah as residents look for a less violent way to get the Americans out. This city on the banks of the Euphrates River and at the edge of the desert is taking small but critical steps toward choosing its own government....

there are signs of progress in a city where Hussein recruited the shock troops of his military and industrial complex. Water has been restored to 80 percent of the city and there is more electricity now than immediately after major combat, although blackouts still occur.

And there is growing acceptance here that Fallujah has to join the rest of Iraq--at least politically--to secure a fair share of reconstruction cash.

"I am not cooperating with Americans; I am dealing with them," said Mohammed Hassan al-Balwa, president of Fallujah's provisional city council. "We need to help ourselves."

Read the whole article.

UPDATE: The New York Times has more.

posted by Dan at 10:15 AM | Comments (13) | Trackbacks (0)

To post or not to post

Mark Kleiman believes that it was in "extreme bad taste" for me to post on the Kerry business:

So far only Drezner and some of the British papers, among the non-sleazaloid media, have picked this up. No self-respecting media outlet should be prepared to take this sort of unsourced second-hand sludge and run with it. We don't even know the name of the woman he's supposed to have been dating, making the story completely impossible to check.

Some readers agree.

First off -- Mark's facts are wrong. By the time I got around to posting on it, I'd seen blogposts from DailyKos, Atrios, Instapundit, and Andrew Sullivan, about the story. According to Jonah Goldberg, this allegation was first posted by a Wesley Clark blogger last week.

Mark is also incorrect is saying that the Drudge Report and the National Enquirer story about Kerry are talking about the same thing. See John Hawkins on this.

Second, I linked and quoted the DailyKos post at greater length, in large part because Kos' points on this were way more specific than Drudge's. He also confirmed that Wes Clark made statement about the Kerry situation to reporters. As I said before, what interests me is how the story got to Drudge. If it's from Clark, it would appear to fit in with this characterization of generals who fail at politics.

I'll close with Andrew Sullivan's point on this, because it's true:

[T]he internet has ended any semblance of a barrier between respectable news and gossip. Once Drudge has posted, the story is public. This is an awful development, but it is real. I should also say: I know of no hard evidence that this rumor is even faintly true. But true or not, if the Republicans planted it, they should be excoriated. If a rival Democratic candidate did, ditto.

UPDATE: Tim Noah has the full list of rationales -- mine are #3 and #8.

posted by Dan at 09:04 AM | Comments (18) | Trackbacks (0)

Thursday, February 12, 2004

To care or not to care

Megan McArdle has adopted an official position on the Kerry Kerfuffle:

I don't care. I don't care so much that I wish I could hit myself in the head wtih a hammer right now until all memory of this story falls out and makes room for something useful....

It's mildly interesting from a sociological standpoint --are these guys all having affairs with their interns?-- but in the final analysis, who the hell cares? Not me. I'm going to go have a stiff drink and try to forget I ever heard about this. Not that I imagine my drinking companions will let me. Sigh.

I mostly agree with Megan's first sentence, in that this sort of information would be unlikely to affect my vote. However, I will confess to being interested in a) how this story became a story, and; b) whether Kerry will be able to ride it out. My gut-level responses are a) Lehane and b) yes.

On Megan's socioligical question regarding fascination with interns, David Plotz penned a Slate essay during the Chandra Levy disappearance that's worth excerpting cause it's true:

Washington's interns are valuable more for psychological reasons than economic ones. Though Hill rats would never admit it, interns decynicize D.C.; Washington thrills them (at least for the six weeks till their disillusionment). They may be calculating and ambitious, but they remind their beaten-down editor, their dispirited chief of staff, their venal executive director of why what they do is important and interesting and exciting. Their idealism is fuel for the city.

This vitality is also why it's so easy to understand the not-infrequent affairs between female interns and powerful men. (Though there are no good numbers on this, anecdotal evidence suggests that females are a growing majority of D.C. interns.) The intern is attracted to the man for obvious reasons: The interns are young, they're hormonal, and they're political junkies. To them, a second-rate congressman looks like Mick Jagger.

And why are the men infatuated? It's not just because the interns are young and sexy. It's because the interns still honestly believe in Washington, believe that a congressman is just as important as he thinks he is. In a jaded city, that faith is the rarest and most enticing quality of all.

UPDATE: Sorry about the technical errors in the first version of this post.

posted by Dan at 06:20 PM | Comments (35) | Trackbacks (3)

Hidden tech in rural Massachusetts

I've blogged before about how rural areas can sustain economic growth in the wake of factory shutdowns. Now, Virginia Postrel links to a fascinating Red Herring article about "hidden tech" -- self-employed techies migrating away from urban areas to places like the Pioneer Valley and the Berkshires in Western Massachusetts:

With the rapid adoption of inexpensive broadband technology, and the cost of urban living still high despite the downturn, tech communities are popping up in unlikely places. Migratory entrepreneurs have set up shop in places as diverse as Grand Forks, North Dakota, Wenatchee, Washington, Bozeman, Montana, and Amherst, Massachusetts – scrapping the rat race and cutting back on their business costs, to boot. Many of these businesses are home-based and unincorporated, literally hidden from view and flying under the radar of government statisticians. Still, these "hidden tech" communites are getting VC [venture capital] attention....

Going solo certainly has its upside, according to the study: hidden tech entrepreneurs often pull six figures, and claim clients as powerful, and diverse, as the Vatican, the Thomas Register, and Boeing....

Why does the hidden tech trend matter?

In a "jobless recovery," with the government reporting growth in self-employment nationwide, economic development experts believe that the hidden tech population may be a badly needed shot in the arm for the American economy. In some cases, with manufacturing increasingly moving offshore, these entrepreneurs may be the only growing economies in some regions, especially in rural areas....

These new communities are also fresh, fertile ground for venture capitalists, as Village Ventures of Williamstown, Massachusetts has discovered. Analysts there have identified 101 emerging tech communities nationwide – from Lexington, Kentucky to Charleston, West Virginia – and have located new funds in areas such as Tucson, Arizona, and Lexington and Worcester, Massachusetts.

For another story about this phenomenon, click here. Other reports can be found at the Hidden Tec website.

Postrel points out, "[T]his is yet another suggestion--admittedly anecdotal--that the economy may be shifting toward work that doesn't get counted in the jobs data."

Is this true? Elise Gould makes a powerful argument that the payroll survey is more reliable than the household survey on job creation (link via Brad DeLong). But on the self-employment question, she says:

A... critique of the payroll survey is that it leaves out self-employment. However, because the household survey employment reports do not distinguish between the self-employed who are gainfully employed and those who are searching for work—and because the numbers of self-employed nonearners would be expected to increase during tough economic times—the omission of self-employment numbers from the payroll survey may more accurately reflect overall employment trends.

Here's my question: what happens when economic times are improving, but payroll data about job creation remains sluggish? This could be an explanation.

A question to readers -- is hidden tech an important trend that captures job creation, or is it more of a "boutique" phenomenon?

posted by Dan at 04:14 PM | Comments (24) | Trackbacks (0)

Will the Kerry bubble pop?

As Josh Chafetz pointed out, an awful lot of centrist media pundity (Jonathan Chait, Will Saletan, Mickey Kaus, Noam Scheiber) predicted earlier this week that the Democratic primary this year resembles a speculative bubble -- a candidate retains their value only if everyone shares the same common conjecture that the candidate is "electable." According to this logic, Kerry is just as vulnerable to crashing and burning as Dean.

Which leads to Matt Drudge reporting today that a scandal is brewing over Kerry's relationship with a woman other than Theresa Heinz:

A frantic behind-the-scenes drama is unfolding around Sen. John Kerry and his quest to lockup the Democratic nomination for president, the DRUDGE REPORT can reveal.

Intrigue surrounds a woman who recently fled the country, reportedly at the prodding of Kerry....

A serious investigation of the woman and the nature of her relationship with Sen. John Kerry has been underway at Time magazine, ABC News, the Washington Post, The Hill and the Associated Press, where the woman in question once worked....

In an off-the-record conversation with a dozen reporters earlier this week, General Wesley Clark plainly stated: 'Kerry will implode over an intern issue.'"

Now, to be blunt, the Drudge story is pretty incoherent except in saying that there's a brewing scandal involving a women and Wesley Clark said "intern." Editor & Publisher says:

Reached by E&P for comment, AP spokesman Jack Stokes said, "We simply don't comment on stories we are pursuing or not pursuing."

Leonard Downie Jr., executive editor of The Washington Post, acknowledged that his staff had begun to dig deeper into the life and career of Kerry, but said he had not heard anything about an alleged infidelity. "What we're finding, I don't know," he said. "This is the first we are looking into him this way."

The Scotsman has a straight news summary

Here's the DailyKos report:

[T]his isn't Drudge's story. It's been around for several weeks. Clark was talking about it to reporters (I confirmed it independently from the Drudge piece). It was common knowledge, but the press sat on it for whatever reason (looking for confirmation? Hoping to avoid being labeled as gossip mongers?).

That said, it's a bullshit story. Kerry had an active and public romantic life in between his first wife and Theresa. I remember reading about his "wild" days in the Senate somewhere. But he was single (or at worst legally separated), and darn it, being single and having sex is a good thing. And the dalliances weren't even with his interns. (emphases in original)

I have absolutely no idea how this story will play itself out.

I do wonder if Mark Kleiman's admiration for Wes Clark's candidacy might have been misplaced. [Kos' suspicions focus on Chris Lehane, not Clark. And Drudge has an e-mail saying Lehane was shopping this around--ed. Regardless of how the story plays out, one thing is absolutely clear -- Clark was a willing mouthpiece.]

UPDATE: OK, now this gets really bizarre. From the Associated Press:

Wesley Clark will endorse presidential contender John Kerry, a high-profile boost for the front-runner as he looks to wrap up the party's nomination, according to Democratic officials.

With next week's Wisconsin primary looming, Clark plans to join Kerry at a campaign stop in Madison, Wis., Friday to make a formal endorsement, said officials, speaking on condition of anonymity.

Clark spokesman Matt Bennett would not confirm the endorsement, and would only say, "General Clark is looking forward to going to Wisconsin to be with Senator Kerry."

ANOTHER UPDATE: Glenn Reynolds acts as the focal point with lots of links, all of them suggesting Chris Lehane as the instigator.

Wonkette asks, "Is Kaus too busy celebrating to post on this?" She's right -- a story that could potentially drag down Lehane and Kerry? It's Mickey's Zarqawi memo! [UPDATE: he's now posted]

posted by Dan at 02:55 PM | Comments (36) | Trackbacks (3)

Follow-up on the global Southern Strategy

A few months ago I wrote a TNR Online essay about large developing countries trying to form a coalition to counter the United States and the European Union. The Economist has more on Brazilian president Luiz Inácio Lula da Silva's role in this. Key grafs:

Lula looks like an ardent promoter of an old idea, fashionable in the Non-Aligned Movement in the 1970s: that poor countries can stand up to rich ones and achieve development by co-operating with each other. In 20 foreign trips since taking office in January 2003, Lula has tried to rally developing countries like the union organiser he used to be. He has formed a co-operation pact with India and South Africa, two other emerging democracies. In Geneva last week he joined UN chief Kofi Annan and the presidents of Chile and France in calling for a noble-sounding fund to fight world hunger, whose details are vague....

South-south trade is unlikely to pay off so handsomely soon. China will be a fierce competitor for Brazil's manufacturers, as well as a promising market for its commodities. India is one of the world's most protected economies. Even Argentina, Brazil's closest diplomatic friend, is trying to reduce imports of Brazilian textiles without flouting the rules of Mercosur. Lula's wariness in dealing with the United States is understandable, especially in the absence of progress in the global trade talks. But that need not make it wise.

I doubt the Economist intended to paint France as a developing country.

posted by Dan at 10:45 AM | Comments (2) | Trackbacks (0)

Follow-up on Carmen Electra


Last month I blogged about how Carmen Electra had won back her Internet domain name from Celebrity1000. Barring an appeal, this meant that the domain name had to be transferred to Miss Electra within ten days.

In an effort to sustain the high standards of investigative journalism of, I clicked on again yesterday, and the domain name has indeed been transferred. Carmen writes:

Welcome to my new official website. I'm so excited to have a place to communicate with everyone. Finally...the real facts, latest projects, and all the juicy parts of my life.

Apparently, there are a few pictures of her as well.

I certainly hope all of this blog's readers have taken this anecdote about the role of the United Nations and World Intellectual Property Rights Organization to heart.

posted by Dan at 10:40 AM | Comments (6) | Trackbacks (3)

Wednesday, February 11, 2004

The marketplace of ideas in Iraq

The Chicago Tribune's Stephen Franklin reports on how life has changed for Baghdad's booksellers:

Up and down al-Mutanabbi Street, business was booming like never before. Buyers were bunched up in groups, studying piles of new and used books sprawled on the sidewalk or on carts. People wandered in and out of stores, carrying off several books at a time.

A thick crowd of shoppers ruminated over Iyad Nowfal's collection of used English and French historical and political texts, an eclectic assortment that included a worn paperback copy of Golda Meir's autobiography.

But the brisk trade failed to lift the spirits of the middle-age bookseller, a veteran of the street in a slightly decrepit Ottoman-era section of Baghdad that is famous for its printing presses, calligraphers, a coffeehouse frequented by intellectuals and an open-air book market every Friday.

"Freedom is good and not good," Nowfal grumbled, hunching his shoulders against a cold wind. "The good thing is that now you can express yourself. You can read whatever you want. But the bad thing is competition. There are a lot more bookstores, a lot more people selling books, and prices have gone down."

A few other veteran booksellers shared his dismay, recalling the days during Saddam Hussein's regime when they got high prices for forbidden books about politics or Shiite Islamic topics.

"Now you have bad people," complained Hussan al Fadhli, a seller of maps, among them a large, colorful 1990 chart that showed Kuwait as an Iraqi province. Bad people, he explained with a scowl, are merchants who do not respect each other and offer price cuts to customers....

One day Sadek Khadir was arrested because he had let a popular Arab world newsmagazine slip into the offerings he usually spreads out on the sidewalk. But Khadir, a government engineer who moonlights at the Friday book market, was lucky. He spent only a day in the police station, while others were imprisoned for years for selling banned publications. Now his sales of newspapers and magazines have doubled, and he sells whatever he can get his hands on.

Iyad Hamid similarly keeps running out of books for customers. He specializes in works written by Shiite scholars, books that he previously would have sold only to people he knew or who came with good recommendations. He was strict about such precautions because he didn't want to join his colleagues in prison.

With the regime's fall, his prices have come down because it is easier to buy such books. But that doesn't bother him because he sells so much more. His hottest items are anything written by or about Mohammad Baqir al-Sadr, a revered Shiite cleric assassinated by the government in 1980. It is rare, he said, for one of those books to sit for more than a day.

Lest you believe that theological texts are the only things selling, let's move on to this anecdote:

Amir Nayef Toma, a translator, English teacher and self-professed guiding spirit for al-Mutanabbi Street's intellectuals, was studying an assortment of popular U.S. paperbacks. He was glad to see that they were cleaner than a few months ago.

The books came from American troops, who got them full of flies and dust during their time at war in the desert, he explained. Toma and other customers persuaded the booksellers to clean them up.

A lifetime devotee of popular American novels, Toma's guru is Sidney Sheldon, and he has an ambitious dream for the new Iraq. He wants to open a Sidney Sheldon Institute for Modern English, where he will teach English to Iraqis and reveal to them the literary magic of the blockbuster American novelist.

UPDATE: Juan Cole has useful thoughts about how the U.S. government could assist the spread of American ideas in the Middle East. One wonders if it will be a component of this initiative.

posted by Dan at 10:15 AM | Comments (19) | Trackbacks (4)

Mankiw speaks the truth on trade, and everyone goes postal

N. Gregory Mankiw, chairman of the White House Council of Economic Advisers, testified before Congress yesterday to present the Economic Report of the President. Here's what he said about outsourcing:

New types of trade deliver new benefits to consumers and firms in open economies. Growing international demand for goods such as movies, pharmaceuticals, and recordings offers new opportunities for U.S. exporters. A burgeoning trade in services provides an important outlet for U.S. expertise in sectors such as banking, engineering, and higher education. The ability to buy less expensive goods and services from new producers has made household budgets go further, while the ability of firms to distribute their production around the world has cut costs and thus prices to consumers. The benefits from new forms of trade, such as in services, are no different from the benefits from traditional trade in goods. Outsourcing of professional services is a prominent example of a new type of trade. The gains from trade that take place over the Internet or telephone lines are no different than the gains from trade in physical goods transported by ship or plane. When a good or service is produced at lower cost in another country, it makes sense to import it rather than to produce it domestically. This allows the United States to devote its resources to more productive purposes.

Although openness to trade provides substantial benefits to nations as a whole, foreign competition can require adjustment on the part of some individuals, businesses, and industries. To help workers adversely affected by trade develop the skills needed for new jobs, the Administration has worked hard to build upon and develop programs to assist workers and communities that are negatively affected by trade.

Later on, he told reporters, "Outsourcing is just a new way of doing international trade. More things are tradable than were tradable in the past and that's a good thing."

As I've argued ad nauseum, Mankiw's correct on the economics. Alas, on the politics, it looks like he's stepped on a land mine. Here's the Washington Post lead:

Democrats from Capitol Hill to the presidential campaign trail lit into President Bush's chief economist yesterday for his laudatory statements on the movement of U.S. jobs abroad, seizing on the comments to paint Bush as out of touch with struggling workers.

"They've delivered a double blow to America's workers, 3 million jobs destroyed on their watch, and now they want to export more of our jobs overseas," said John F. Kerry, the Massachusetts senator and front-runner for the Democratic presidential nomination. "What in the world are they thinking?"

Kerry's statement is a shame -- until now, he had been the most adult Democratic candidate when it came to foreign economic policy save Lieberman [Given the rest of the field, he could say this and still be the most adult candidate on this issue!--ed. Plus, he needed to get out in front on the issue.]. What's more worrisome is that Republicans are making similar noises:

Rep. Donald Manzullo (R-Ill.) called for the resignation of N. Gregory Mankiw, the chairman of the White House Council of Economic Advisers and a prominent Harvard University economist. Manzullo said industrial state Republicans are furious.

"I know the president cannot believe what this man has said," Manzullo said. "He ought to walk away, and return to his ivy-covered office at Harvard."

More from the New York Times:

Democrats in Congress and on the campaign trail, citing remarks by a top White House economic adviser, accused President Bush on Tuesday of encouraging companies to export jobs overseas....

Asked about the role of farming out production and services to low-wage countries like China and Mexico, Mr. Mankiw acknowledged that the practice was on the rise but said it would ultimately benefit the United States.

"I think outsourcing is a growing phenomenon, but it's something that we should realize is probably a plus for the economy in the long run," Mr. Mankiw told reporters on Monday.

"We're very used to goods being produced abroad and being shipped here on ships or planes," Mr. Mankiw continued. "What we are not used to is services being produced abroad and being sent here over the Internet or telephone wires. But does it matter from an economic standpoint whether values of items produced abroad come on planes and ships or over fiber-optic cables? Well, no, the economics is basically the same."

Many if not most economists contend that the expansion of free trade, in goods as well as services, ultimately benefits all countries that participate....

"If this is the administration's position, I think they owe an apology to every worker in America," said Senator Tom Daschle of South Dakota, the Senate Democratic leader. "There is absolutely no justification for arguing that we could support jobs going overseas, especially under these circumstances."

Actually, the Senator owes an apology to every consumer in America, but I'm not going to hold my breath in wait.

An interesting question is whether economists who are also Democrats -- and generally support free trade -- will defend Mankiw on this point.

UPDATE: Drezner gets results from Brad DeLong!! The Wall Street Journal gets results from other Democratic-leaning economists -- Janet Yellen and Laura D'Andrea Tyson.

FINAL UPDATE: Virginia Postrel chips in with this point:

More important than the election-year political bias is the subtle but extremely important difference between supporting "shift of jobs overseas" and supporting trade and specialization--the processes on which economic growth depends. Expanding the international division of labor doesn't shift "jobs" overseas. It shifts "some jobs" overseas, while creating new ones at home. The transition can be extremely painful for the workers affected, but the process itself is valuable. That's why government policies should address the specific problems of specific people, not attack the process as a whole.


posted by Dan at 12:33 AM | Comments (50) | Trackbacks (5)

Tuesday, February 10, 2004

And that's the ballgame

Exit polls from the Tenessee and Virginia primaries, courtesy of Jack Shafer:

Kerry: 44%
Edwards: 26%
Clark: 18%
Dean: 6%

Kerry: 54%
Edwards: 25%
Clark: 9%
Dean: 7%

I'll let the post title speak for itself.

Gonna be a long year for Mickey Kaus!! [You're still going to have to live down this post--ed. Oh, I beg to differ -- this post looks far worse in retrospect].

posted by Dan at 05:14 PM | Comments (8) | Trackbacks (1)

Monday, February 9, 2004

The Australia free trade pact

The United States and Australia have signed a free trade deal that virtually eliminates all tariffs on manufactured products between the two countries. And the bitching has just started --some justified, some not.

One of the more absurd objections comes from the Australian entertainment sector:

Despite the Federal Government's assurances that it has retained the right to protect the Australian film and television industry from the onslaught of US product under the new trade deal, local screen producers and directors are not convinced.

"We are very disappointed," said the national director of the Media Entertainment and Arts Alliance, Simon Whipp.

"On the information we have so far, Australian audiences of the future will not enjoy anywhere near the same access to Australian programs as today's Australian public does," he said, referring to pay TV, digital TV and new media.

This would ordinarily be the point where one would snarkily observe the number of Hollywood stars that are Australian, but Tim Blair makes better and more serious points (link via Glenn Reynolds).

A more substantive objection is made by the Cato Institute's Aaron Lukas who points out that big sugar strikes again:

In August 1940, after the Battle of Britain, Prime Minister Winston Churchill famously remarked that, "Never in the field of human conflict was so much owed by so many to so few." In the considerably lower stakes field of trade policy, a variation of that phrase aptly captures the perverse standing of the U.S. sugar industry: "Never have so few taken so much from so many."....

In contrast to some proposed trade agreements, an FTA between the United States and Australia should be an easy sell in Congress. Both parties to the agreement are wealthy countries with high wages. Both have stringent laws intended to protect labor and the environment. The argument that free trade spurs a "race to the bottom" was always flawed, but it lacks even the patina of plausibility in this case.

Yet sugar's absence from this FTA is disappointing on three counts. First, sugar stands out as a symbol of a perceived American hypocrisy on trade. The unwillingness of the administration to even attempt to dismantle self-defeating protectionism in a relatively insignificant sector of the economy calls into question its larger commitment to open markets. Second, in order to get a pass on sugar, U.S. negotiators were forced to overlook Australian protectionism on wheat, broadcasting and audio-visual services, and other areas. Third, the exclusion of sugar from free-trade disciplines sets a terrible precedent that emboldens other import-competing producers to demand similar favors. The U.S. dairy market, for example, will also be spared from full competition under this FTA.

A sour aftertaste on what would otherwise be a sweet deal.

UPDATE: My brother blogs from Australia:

It's pretty embarassing when my brother, who lives in Chicago, writes about a Free Trade Agreement between the United States and Australia before I do.


To be fair, he provides a link to the Australian government's official web page on the agreement.

posted by Dan at 06:40 PM | Comments (17) | Trackbacks (0)

John Lewis Gaddis on Bush

Back in 2002 I highlighted a John Lewis Gaddis essay in Foreign Policy that stoutly defended the National Security Strategy. The Boston Globe reports that post-Iraq, Gaddis hasn't changed his mind:

Every President makes foreign policy. Only a select few, over the sweep of history, design what scholars term grand strategy.

Grand strategy is the blueprint from which policy follows. It envisions a country's mission, defines its interests, and sets its priorities. Part of grand strategy's grandeur lies in its durability: A single grand strategy can shape decades, even centuries, of policy.

Who, then, have been the great grand strategists among American statesmen? According to a slim forthcoming volume by John Lewis Gaddis, the Yale historian whom many describe as the dean of Cold War studies and one of the nation's most eminent diplomatic historians, they are John Quincy Adams, Franklin Delano Roosevelt, and George W. Bush....

The Bush doctrine is more serious and sophisticated than its critics acknowledge -- but it is also less novel, Gaddis maintains. Three of its core principles -- preemptive war, unilateralism, and American hegemony -- actually hark back to the early 19th century, to the time of John Quincy Adams....

Gaddis begins ''Surprise, Security, and the American Experience'' (Harvard, March) with the observation that thanks to its geographical isolation, the United States has experienced only three surprise attacks on its soil: the British burning of Washington in 1814, Pearl Harbor in 1941, and the terrorist attacks in 2001. Each time, American leaders responded by rethinking grand strategy.

After the British attack on Washington, Gaddis recounts, John Quincy Adams, then secretary of state to James Monroe, perceived that weakly governed states along US borders invited dangers, whether from marauding bands of Native Americans, pirates, and escaped slaves in Florida (before General Andrew Jackson invaded it in 1817), or from European powers who might seize vulnerable territories such as California as staging grounds from which to threaten the United States. And so America achieved its security through territorial expansion -- by filling a perceived power vacuum before hostile powers could do so. Gaddis describes the invasions of such territories as ''preemptive.''

Read the whole thing. Later on in the piece, Walter Russell Mead makes a point that's worth repeating:

What is perhaps most important about the Bush doctrine is also very specific to its era, says Walter Russell Mead, a senior fellow at the Council on Foreign Relations and author of the forthcoming ''Power, Terror, Peace, and War: America's Grand Strategy in a World at Risk'' (Knopf, April): It shifts the geographical center of American strategy.

''The Cold War was fundamentally about Europe,'' says Mead. ''Whatever happened anywhere in the world, the basic question was how it would affect the standoff with the Soviets in Europe. Now the Bush people are saying that whatever happens anywhere in the world, the question is, how will it affect the Middle East and the war on terror?''

posted by Dan at 06:15 PM | Comments (23) | Trackbacks (0)

Does Al Gore read this blog?

The right half of the blogosphere is getting exercised about Al Gore's speech to a rally of Tennessee Democrats yesterday. The reason is the New York Times lead:

In a withering critique of the Bush administration, former Vice President Al Gore on Sunday accused the president of betraying the country by using the Sept. 11 attacks as a justification for the invasion of Iraq.

"He betrayed this country!" Mr. Gore shouted into the microphone at a rally of Tennessee Democrats here in a stuffy hotel ballroom. "He played on our fears. He took America on an ill-conceived foreign adventure dangerous to our troops, an adventure preordained and planned before 9/11 ever took place." (emphasis added)

I've explained why this "preordained and planned" meme is a pile of horses--t here and here.

Here's the thing that scares me -- there are parts of this speech where Gore is not only correct, but he's channeling this blog!!

Don't believe me? Here's what I wrote ten days ago:

More and more, Bush reminds me of Nixon.... On domestic policy, Bush seems like he'll say or do anything, so long as it advances his short-term political advantage. If Karl Rove thought imposing wage and price controls would win Pennsylvania and Michigan for Bush, you'd see an Executive Order within 24 hours.

Chris Sullentrop posted large chunks of the speech in this Slate story. Here's the relevant portion:

I say that President George W. Bush reminds me more of former President Richard Nixon than any of his other predecessors. Nixon was no more committed to principle than the man in the moon. He, as a conservative Republican, imposed wage and price controls. Hard to believe in this day and time. But he did. And he cared as little about what it meant to be really conservative as George W. Bush has cared in imposing $550 billion budget deficits and trillions in additions to the national debt. That has nothing to do with conservatism and everything to do with his effort to get re-elected!

[You aren't the only blogger to make this point. Maybe he's reading the Decembrist instead--ed. Mark Schmitt spoke favorably about Nixon's policies -- I didn't, and neither is Gore.]

Al, if you're reading this, seriously, good point on Nixon, but I think you're overreaching on this pre-meditation thing. Check out those Paul O'Neill posts. Because Sullentrop's concluding graf is spot-on:

[T]he question for the party's nominee has to be, do you want this man to speak at the convention in Boston? Even if you like the sentiment behind this speech, if Gore delivers an address like this one in July, the historical analogy won't be to the Democrats of 1976 or to the Republicans of 1994. Instead, the comparison will be to the disastrous Republican convention of 1992.

[You seem freaked out about this--ed. Remember that Seinfeld episode when Elaine says, "I've become George!!"? I don't ever want to say, "I've become Gore!"]

UPDATE: Darn my language!! Guaranteed, any time I cuss in my post it prompts a rash of swearing in the comments. I gotta learn to speak in hyphens more quickly.

posted by Dan at 05:33 PM | Comments (36) | Trackbacks (2)

Al Qaeda is losing in Iraq

The New York Times reports on a 17 page memo seized in Badhdad in mid-January that was allegedly written by Abu Musab al-Zarqawi, a Jordanian Al Qaeda operative who the Bush administration argued was the main conduit between the terrorist network and Iraq.

Glenn Reynolds links to the story and is concerned about media coverage. I'm more interested in the substantive implications.

This story makes me feel better about the security situation in Iraq than anything since Hussein's capture. Why? Because it's clear that the Al Qaeda-backed portion of the insurgency is running into serious difficulties:

[The memo] calls the Americans "the biggest cowards that God has created," but at the same time sees little chance that they will be forced from Iraq.

"So the solution, and only God knows, is that we need to bring the Shia into the battle," the writer of the document said. "It is the only way to prolong the duration of the fight between the infidels and us. If we succeed in dragging them into a sectarian war, this will awaken the sleepy Sunnis who are fearful of destruction and death at the hands" of Shiites....

The Iraqis themselves, the writer says, have not been receptive to taking holy warriors into their homes.

"Many Iraqis would honor you as a guest and give you refuge, for you are a Muslim brother," according to the document. "However, they will not allow you to make their home a base for operations or a safe house."

The writer contends that the American efforts to set up Iraqi security services have succeeded in depriving the insurgents of allies, particularly in a country where kinship networks are extensive.

"The problem is you end up having an army and police connected by lineage, blood and appearance," the document says. "When the Americans withdraw, and they have already started doing that, they get replaced by these agents who are intimately linked to the people of this region."

With some exasperation, the author writes: "We can pack up and leave and look for another land, just like what has happened in so many lands of jihad. Our enemy is growing stronger day after day, and its intelligence information increases.

"By God, this is suffocation!" the writer says.

But there is still time to mount a war against the Shiites, thereby to set off a wider war, he writes, if attacks are well under way before the turnover of sovereignty in June. After that, the writer suggests, any attacks on Shiites will be viewed as Iraqi-on-Iraqi violence that will find little support among the people.

"We have to get to the zero hour in order to openly begin controlling the land by night, and after that by day, God willing," the writer says. "The zero hour needs to be at least four months before the new government gets in place."

That is the timetable, the author concludes, because, after that, "How can we kill their cousins and sons?"

"The Americans will continue to control from their bases, but the sons of this land will be the authority," the letter states. "This is the democracy. We will have no pretexts." (emphasis added)

Assuming that the memo is real (and the Times does a good job discussing its provenance; I particularly love the circumlocution used to indicate that this didn't come from the INC: it "did not pass through Iraqi groups that American intelligence officials have said in the past may have provided unreliable information." See the Washington Post story for more) then U.S. efforts at statebuilding have been more successful than media coverage would have suggested to date.

Iraq might not have proven to be as hospitable to American troops as was previously thought -- but it's not fertile soil for Al Qaeda either.

[But would the Shia strategy work?--ed. Unlikely -- even Juan Cole points out that "So far most Shiites have declined to take the bait." Now that the strategy has been made public, it will be that much more difficult to implement.]

UPDATE: Josh Chafetz has further thoughts. Greg Djerejian thinks I'm being over-optimistic. Spencer Ackerman doubts the memo's provenance and logic.

FINAL UPDATE: Here's a link to the full text.

posted by Dan at 04:02 PM | Comments (29) | Trackbacks (1)

Still undecided

Other Republicans join the ranks of the undecided. Here's Venomous Kate:

[A]lthough I am a registered Republican, although I contribute regularly to the Republican National Committee and proudly display my personally-signed portrait of George and Laura Bush in my den, although I have voted Republican in every election since turning 18, I don't cast my vote based on a candidate's vision for America. I vote based on my vision for America, and I cast my vote for the candidate who seems not just more likely to move in the direction that I think is best for our country but also more capable of keeping our country from going in directions we should never go.

The fact is, I voted for George W. Bush to be my President. I knew when I voted for him that, like all his predecessors, he would delegate responsibility to others. That's part and parcel of being a good executive, whether that be in business or in politics. But I did not vote for four years - nor will I vote for four more years - of Donald Rumsfeld's worldviews in which so many "possible threats" are overstated while so many realities are misstated. So if George Bush wants my vote he needs only do one thing: take charge of the White House by clearing out the cobwebs that are clouding that vision of his.

Until then, I'm going to sit here on this fence and watch the various candidates grapple with their pasts as they each try to wrest hold of our country's future. May the best man win.

I'm omitting a ton of links in the post. Go check out the entire post at Electric Venom, which includes a hard look at the Democratic alternatives.

posted by Dan at 10:34 AM | Comments (66) | Trackbacks (2)

To believe or not to believe

That is the question after reading this Ha'aretz report:

Al-Qaida have possessed tactical nuclear weapons for about six years, the London-based Al-Hayat newspaper reported Sunday.

The Arabic daily reported that sources close to Al-Qaida said Osama bin Laden's group bought the nuclear weapons from Ukrainian scientists who were visiting Kandahar, Afghanistan, in 1998.

The report has not been confirmed.

However, the sources said Al-Qaida doesn't intend to use the weapons against American forces in Muslim countries, "due to the serious damage" it could cause. But that decision is subject to change, the sources said, if Al-Qaida "is dealt a serious blow that won't leave it any room to maneuver."

The possibility of detonating the nuclear devices on American soil was also raised in the report, although no details were given.

My first thought is that I find it hard to believe. If Al Qaeda had these weapons for six years, there would have been at least an attempt to detonate one inside the United States.

Here's another thought -- maybe, "as the operational power of Al Qaeda appears diminished" according to the New York Times, this is a propaganda effort to rally support among regional terrorist groups?

Greg Djerejian has similar thoughts, but with more vivid phrasing.

posted by Dan at 12:55 AM | Comments (11) | Trackbacks (4)

Sunday, February 8, 2004

Now it's a depression

A few years ago, the Economist reworded an old aphorism:

When your neighbour loses his job it’s a slowdown; when you lose yours, it’s a recession; when an economic journalist loses his, that’s a depression.

If this New York Times report is accurate, expect to hear a lot of depression talk from Reuters:

Outsourcing has become all the rage in recent years, and India has become a favorite destination for Western companies that want to send jobs to cheaper markets. Companies as different as Delta Air Lines and Dell Computer have hired workers or subcontractors to perform customer service, data entry or other computer-related jobs once done in the United States.

Now, Reuters is going a step further. It told its editorial employees in an electronic posting late last week that it planned to hire six journalists in Bangalore, India, to do basic financial reporting on 3,000 small to medium-size American companies.

"It's a place where you can get people who understand English, understand financial statements, understand journalism and who are educated to a very high standard and eager to do this kind of work,'' David Schlesinger, global managing editor of Reuters, said in a telephone interview. They are also relatively inexpensive, he added....

In the message to employees about the journalism project, which will deal with companies Reuters does not cover regularly now, Mr. Schlesinger did not rule out expanding the project.

"I'll keep you informed as how this develops,'' he wrote. "This could be a very exciting way to get more news on our wires in a more efficient way.'' (emphasis added)

Given the underlined passage, it probably won't generate many complaints, since the idea is to get greater coverage for less money.

posted by Dan at 10:15 PM | Comments (17) | Trackbacks (4)

Bush meets the press

I caught most of Bush's Meet the Press appearance, and was neither overwhelmed nor underwhelmed. Let's face it -- this is not his best format, and there were definitely a few moments when I winced. That said, it was a pretty competent performance. Glenn Reynolds has a reaction roundup, but I find it telling that both Josh Marshall and Brad DeLong grudgingly concede that Bush did OK. [UPDATE/CORRECTION: Brad doesn't think Bush did well as much as Russert did poorly; Josh, after seeing the whole thing, thinks "he and his advisors made a mistake scheduling this interview."

Two things struck me overall. First, the word that kept ringing in my ears was "context." Bush used it six times during the hour. I don't think that's an accident -- he's trying to frame his decision-making to the voters. His response to the "no WMD" question is twofold -- 1) We're better off without Saddam anyway; 2) In context, the intelligence looked solid and sensible. Whether this works remains to be seen.

Second, I found his response to Russert's last question, "Biggest issues in the upcoming campaign?" to be revealing:

Who can properly use American power in a way to make the world a better place, and who understands that the true strength of this country is the hearts and souls of the American citizens, who understands times are changing and how best to have policy reflect those times.

First response was foreign policy. Despite the WMD imbroglio, that's still Bush's comparative strength compared to a Democratic challenger.

Which leads to an intriguing paradox. The more successful Bush's foreign policy is, the more secure Americans will feel, and the more the economy will become issue #1 -- which could put Bush at a disadvantage. The less successful Bush's foreign policy is, the less secure Americans will feel, and the more national security becomes issue #1 -- which could put Bush at an advantage.

Obviously, if the security situation collapses, Bush will lose. But the overall relationship between Bush's foreign policy and Bush's political standing is decidedly nonlinear.

UPDATE: David Adesnik has the best summary analysis I've seen.

posted by Dan at 09:41 PM | Comments (21) | Trackbacks (0)