Bush's Damage

December 30, 2008

The New York Times Op-Ed Columnist

Add Up the Damage

By BOB HERBERT

Does anyone know where George W. Bush is?

You don’t hear much from him anymore. The last image most of us remember is of the president ducking a pair of size 10s that were hurled at him in Baghdad.

We’re still at war in Iraq and Afghanistan. Israel is thrashing the Palestinians in Gaza. And the U.S. economy is about as vibrant as the 0-16 Detroit Lions.

But hardly a peep have we heard from George, the 43rd.

When Mr. Bush officially takes his leave in three weeks (in reality, he checked out long ago), most Americans will be content to sigh good riddance. I disagree. I don’t think he should be allowed to slip quietly out of town. There should be a great hue and cry — a loud, collective angry howl, demonstrations with signs and bullhorns and fiery speeches — over the damage he’s done to this country.

This is the man who gave us the war in Iraq and Guantánamo and torture and rendition; who turned the Clinton economy and the budget surplus into fool’s gold; who dithered while New Orleans drowned; who trampled our civil liberties at home and ruined our reputation abroad; who let Dick Cheney run hog wild and thought Brownie was doing a heckuva job.

The Bush administration specialized in deceit. How else could you get the public (and a feckless Congress) to go along with an invasion of Iraq as an absolutely essential response to the Sept. 11 attacks, when Iraq had had nothing to do with the Sept. 11 attacks?

Exploiting the public’s understandable fears, Mr. Bush made it sound as if Iraq was about to nuke us: “We cannot wait,” he said, “for the final proof — the smoking gun that could come in the form of a mushroom cloud.”

He then set the blaze that has continued to rage for nearly six years, consuming more than 4,000 American lives and hundreds of thousands of Iraqis. (A car bomb over the weekend killed two dozen more Iraqis, many of them religious pilgrims.) The financial cost to the U.S. will eventually reach $3 trillion or more, according to the Nobel laureate economist Joseph Stiglitz.

A year into the war Mr. Bush was cracking jokes about it at the annual dinner of the Radio and Television Correspondents Association. He displayed a series of photos that showed him searching the Oval Office, peering behind curtains and looking under the furniture. A mock caption had Mr. Bush saying: “Those weapons of mass destruction have got to be somewhere.”

And then there’s the Bush economy, another disaster, a trapdoor through which middle-class Americans can plunge toward the bracing experiences normally reserved for the poor and the destitute.

Mr. Bush traveled the country in the early days of his presidency, promoting his tax cut plans as hugely beneficial to small-business people and families of modest means. This was more deceit. The tax cuts would go overwhelmingly to the very rich.

The president would give the wealthy and the powerful virtually everything they wanted. He would throw sand into the regulatory apparatus and help foster the most extreme income disparities since the years leading up to the Great Depression. Once again he was lighting a fire. This time the flames would engulf the economy and, as with Iraq, bring catastrophe.

If the U.S. were a product line, it would be seen now as deeply damaged goods, subject to recall.

There seemed to be no end to Mr. Bush’s talent for destruction. He tried to hand the piggy bank known as Social Security over to the marauders of the financial sector, but saner heads prevailed.

In New Orleans, the president failed to intervene swiftly and decisively to aid the tens of thousands of poor people who were very publicly suffering and, in many cases, dying. He then compounded this colossal failure of leadership by traveling to New Orleans and promising, in a dramatic, floodlit appearance, to spare no effort in rebuilding the flood-torn region and the wrecked lives of the victims.

He went further, vowing to confront the issue of poverty in America “with bold action.”

It was all nonsense, of course. He did nothing of the kind.

The catalog of his transgressions against the nation’s interests — sins of commission and omission — would keep Mr. Bush in a confessional for the rest of his life. Don’t hold your breath. He’s hardly the contrite sort.

He told ABC’s Charlie Gibson: “I don’t spend a lot of time really worrying about short-term history. I guess I don’t worry about long-term history, either, since I’m not going to be around to read it.”

The president chuckled, thinking — as he did when he made his jokes about the missing weapons of mass destruction — that there was something funny going on.

Advice from Friedman to Obama

December 14, 2008

New York Times Op-Ed Columnist

Cars, Kabul and Banks

By THOMAS L. FRIEDMAN

If there is anything I’ve learned as a reporter, it’s that when you get away from “the thing itself” — the core truth about a situation — you get into trouble. Barack Obama will have to make three mammoth decisions after he takes the oath of office — on cars, Kabul and banks — and we have to hope that he bases those decisions on the things themselves, the core truths about each. Because many people will be trying to throw fairy dust in his eyes.

The first issue will be whether to bail out Detroit. What is the core truth about Detroit? Auto executives will tell you that it’s the credit crisis, health care, retirement costs and unions. Sure, those are real. But the core truth is that for way too long Detroit made too many cars that too many people did not want to buy. As even General Motors conceded in its apology ad last week: “At times we violated your trust by letting our quality fall below industry standards and our designs become lackluster.” Walk through any college campus today. You don’t see a lot of Buicks.

Over the years, Detroit bosses kept repeating: “We have to make the cars people want.” That’s why they’re in trouble. Their job is to make the cars people don’t know they want but will buy like crazy when they see them. I would have been happy with my Sony Walkman had Apple not invented the iPod. Now I can’t live without my iPod. I didn’t know I wanted it, but Apple did. Same with my Toyota hybrid.

The auto consultant John Casesa once noted that Detroit’s management has gone from visionaries to operators to caretakers. I would say that they have now gone from caretakers to undertakers. If they are ready to bring in some visionaries and totally restructure — inside or outside of bankruptcy — so they can make money selling cars that people will want to buy, then I say help them. I’d hate to see the Detroit auto industry go under. But if all we are doing is prolonging auto undertakers, then we have to let nature take its course.

After Detroit, Mr. Obama will be asked to bail out Afghanistan. Watch out. The tide has turned against us there because too many Afghans don’t want to buy our politics, or, more precisely, the politics of our ally, the corrupt government of President Hamid Karzai. That is “the thing itself.”

The main reason our Iraq bailout — a k a “the surge” — has had a positive effect is because Iraqis voted with their own guns and their own lives, taking on both Al Qaeda and pro-Iranian Shiite militants. Iraq has avoided bankruptcy for the moment — a total meltdown — because enough Iraqis wanted what we were selling: freedom from extremists. That is the thing itself, and right now I’m not seeing enough of that thing in Afghanistan. Beware of a Kabul bailout.

But maybe the most flagrant area where we continue to avoid looking at “the thing itself” is with our banks. What we are dealing with there is the effect of a credit bubble that began in the late-1980s with the advent of global securitization — the chopping up and bundling into bonds of everything from home mortgages to student loans to airplane leases, and then selling them around the world.

When you take this much leverage and this much globalization and this much complexity and start it in America, and then blow it up, you have a nuclear financial explosion. The deflating of this credit bubble is so wealth-destroying that even the most prudent banks have been ravaged by it.

What to do? The smartest people I know in banking are praying that Obama’s Treasury Department will tackle “the thing itself.” That is, do a real analysis of what the major banks are worth in a worst-case scenario. Then determine, if, on that basis, they have viable, survivable equity-to-asset ratios.

Those that do should get more government investment. Those that are close should be forced to find new investors and merge. And those not viable should be shut down and have their bad assets bought by a government-owned body (which would sell them over time) and their deposits shifted to healthy banks to make those banks even healthier. Some experts believe we still need to close 1,000 banks.

This process will be painful, but probably by the end of a year the market will clear, investors will come in, and the surviving banks will be ready to lend to each other and you and me. The “thing itself” here is that banks still don’t want to lend because they still don’t know the true value of their own balance sheets, let alone anyone else’s.

The market has to clear. We can do it painfully and quickly, as we did with the dot-coms, or we can be Japan and drag it out.

So whether its cars, Kabul or banks, we have to stop wishing for the worlds we want and start dealing with the things themselves. If Obama does, his first year will be excruciatingly painful, but he could have three years after that to be creative. If he doesn’t, I fear that cars, Kabul and banks will dog his whole presidency.