Iranians assist cease-fire deal in Iraq
Cleric al-Sadr orders his forces off the street
By Charles Levinson
USA TODAY

BAGHDAD — Iranian officials helped broker a cease-fire agreement Sunday between Iraq's government and radical Shiite cleric Muqtada al-Sadr, according to Iraqi lawmakers.

The deal could help defuse a wave of violence that had threatened recent security progress in Iraq. It also may signal the growing regional influence of Iran, a country the Bush administration accuses of providing support to terrorists in Iraq and elsewhere.

Al-Sadr ordered his forces off the streets of Iraq on Sunday. Iraqi Prime Minister Nouri al-Maliki hailed al-Sadr's action as "a step in the right direction." It was unclear whether the deal would completely end six days of clashes between U.S.-backed Iraqi forces and Shiite militias, including al-Sadr's.

Osama al-Nujaifi, a Sunni lawmaker who oversaw mediation in Baghdad, said representatives from al-Maliki's Dawa Party and another Shiite party traveled to Iran to finalize talks with al-Sadr.

Iran has close ties with both al-Sadr's movement and al-Maliki, who spent several years in exile there. Al-Nujaifi said the agreement was brokered by the commander of Iran's al-Quds Brigade, which the United States considers a terrorist organization.

Haidar al-Abadi, a Dawa legislator who is close to al-Maliki, confirmed that Iranians played a role in the negotiations. Sadiq al-Rikabi, a senior adviser to al-Maliki, said he could not confirm or deny Iranian involvement in the deal.

"The government proved once again that Iran is a central player in Iraq," said Iraqi political analyst and former intelligence officer Ibrahim Sumydai.

The nine-point deal was released by al-Sadr's office and read aloud from the minarets of Shiite mosques across southern Iraq. Al-Sadr called for the government to stop arresting his followers and release prisoners who have not been charged with a crime.

Hours later, rockets continued to shake Baghdad. According to the U.S. military, elements of al-Sadr's militia no longer answer to him.

Al-Rikabi vowed Iraqi forces will continue a broad offensive against "criminal elements" in the southern city of Basra and elsewhere.

Vali Nasr, an Iraq expert at the Council of Foreign Relations, said al-Sadr had emerged stronger from the battle, which killed more than 300 people. "He let the Americans and the Iraqis know that taking him down is going to be difficult."

Al-Sadr's militia stood strong, forcing the government to extend a deadline for them to disarm.

"Everything we heard indicates the Sadrists had control of more ground in Basra at the end of the fighting than they did at the beginning," said al-Nujaifi, the Sunni mediator. "The government realized things were not going in the right direction."





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P.O.T.U.S.

President Bush shows his flair for comedy as he attempts to open a locked door at a press conference in Beijing. By Charles Dharapak/A.P. Images.
The Simple Life: White House Edition
From the slapstick genius of his China trip to his spitball contests with the press, Bush has the makings of a major reality-TV star. With some image tweaking, the author proposes, a 24-hour "Prez Channel" could turn the administration's dismal ratings around.
by JAMES WOLCOTT October 2007
If I were programmer in chief of this great, ignoble nation of ours, I would decree the creation of a cable channel devoted entirely to the daily activities of the president of the United States: a continuous feed of every public move and policy implementation the Leader of the Free World makes—every speech, Cabinet meeting, press conference, wreath-laying ceremony, signing statement, fat-cat fund-raiser, factory-floor tour, state dinner, motorcade ride, morning jog with the Secret Service, prayer breakfast, and game of fetch with Barney, the unimpeachable White House dog. In September, XM Satellite Radio launched a new 24-hour channel called P.O.T.U.S. '08 (Secret Service acronymic code for president of the United States), featuring podcasts, field reports, and free blab time for presidential hopefuls, but seeing beats listening, even when there isn't that much to see. This channel, my channel, would combine streaming video with packaged segments exploring a single theme such as "Awkward Moments on the Tarmac" (like when Bush dropped Barney on his head). Some spoilsports might consider such saturation coverage of the chief executive intrusive and excessive, unbecoming of a once respected superpower. But why should the president enjoy more privacy than any other beloved/reviled celebrity in or out of rehab? Washington has so eroded rights to privacy it seems only fair to return the favor. If peekaboo access is withheld because of some carefully concocted national-security concern—when, say, private talks are being held in the Oval Office with lobbyists, members of Congress, foreign dignitaries, and other dubious characters, or when the current occupant and the First Mate are sedately a-slumber while the rest of the country lies awake worried sick about health-care costs—a stationary camera could be trained on the White House from a chaste distance, much as the Empire State Building was enshrined by Andy Warhol's aloof, mystifying gaze in the eight-hour monochromatic epic Empire. If the camera observes a pet chimp being buried in the backyard in the gothic moonlight, so much the better.
Given that unlikelihood, however, a slate of all-president all-the-time programming may not hold the initial promise of a pulse-racing ratings grabber. At first groan, it may sound as enticing as an intravenous drip of slow death, a premature burial in the hourglass sands of time. Aren't the videos posted on the official White House Web site boring enough? cynics will gibe. Ah, oui, they are, unless you're riveted by T-ball festivities featuring former Dodgers manager Tommy Lasorda standing around like a penguin, or a roundtable on the Employment Eligibility Verification System. But the Prez Channel—as I envision this dreambaby—needn't be a passive onlooker deprived of the additives and flavorings that have made American television the finest in the land. A splash of personality here, a spark of friction there—these could make all the diff. It could be reality TV writ large, a Bob Woodward book come to life. We've already got a president capable of playing along.
In Alexandra Pelosi's campaign documentary, Journeys with George, which premiered on HBO in 2002, George W. Bush ably demonstrated that he has the Stove Top Stuffing of a genuine fake reality-TV star. He filled out the part to fit the flight of his ego. According to James Poniewozik's review in Time magazine, "When [then candidate Bush] learned she was making a movie, says Pelosi, 'he realized he was either going to be the butt of the joke or the star of the show. So he decided to be the star.'" Acting like an overgrown Matthew McConaughey with the gaggle of reporters, Bush Jr. joshed, grinned, crinkled, flirted, gamely indulged in self-mockery, proffered big-brotherly advice to Pelosi (the daughter of current Speaker of the House Nancy Pelosi), and, as comic relief from the high-altitude cabin fever, rolled oranges down the aisle of the plane as if it were a bowling alley. In the annals of cinéma vérité, Journeys with George posed no threat to the classic status of such fly-on-the-walls as D. A. Pennebaker's Dont Look Back or Frederick Wiseman's institutional exams (High School, Hospital, Juvenile Court, Public Housing, etc.), but as an inside glimpse of Dubya Unplugged it was judged a P.R. boon for the president, "a rare record of the one-on-one Dubya we've often heard described by his cronies but rarely seen—a loose, funny, people-savvy seducer" (Time again). His vulgarity was interpreted as a by-product of an earthy vitality and authenticity denied his Democratic opponent, that circuit board known as Al Gore. Joe Leydon enthused in Variety, "It's been reported some of President Bush's current handlers are worried that 'Journeys with George' will make Dubya look somehow 'less presidential.' Actually, the only thing they have to complain about is the timing of the pic's release: Had it appeared prior to the 2000 election, there likely would not have been any disputes over the Florida vote count, because Bush's electoral victory would have been all the more resounding." Yup, Bush's likability was still a viable asset way back then in November of '02, when his approval numbers were the highest of any president going into midterm elections since Dwight Eisenhower and Republicans rode the crest of that popularity to recapture the Senate and pad their majority in the House, an almost unprecedented feat. Those were the days when almost every column by Peggy Noonan sounded as if it could be sung by Julie Andrews with a chorus of bluebirds. Today it's boobirds that caw. We're sick of him now and bored beyond exasperation. Following Abu Ghraib, Katrina, the Valerie Plame scandal, his flyboy showboating on the aircraft carrier with the mission accomplished banner as backdrop, the ongoing evisceration of Iraq, and the shaming embarrassment of Alberto Gonzales as attorney general, the majority of us can't wait for Bush to drag himself back to Dodge bearing the invisible stigmata of permanent disgrace to wind down his days in the infernal glow of wildfires heralding the wrath of the global warming he did nothing as president to forestall. Yet although his poll numbers are Nixonian, reflecting low esteem acidifying into outright loathing, his presidential brand still carries enough residual goodwill to enjoy a minor comeback, if only his zoo handlers would allow a spot of image tweaking by the creative team of infotainment pros I intend to assemble at Prez once the phones are installed. Underneath his arid exterior is a deposit of wet clay just dying to be manipulated.
It isn't that the frat-rat funny bones that once beguiled a gullible press have entirely retracted into the rigid armor and determined lockjaw of Unwavering Resolve. His hair may have gone steel gray, his brow may have become furrowed, his gunslinger stride as he ambles to the lectern may betray signs of uncomfortable chafing in the lower 40, but his knack for Red Skelton slapstick remains intact (remember that wacky routine in China when he couldn't get the red door open?—how he milked it for pantomime), as does his ability to surrender to the beat and bust a funky move (as he did with a West African dance troupe to spotlight Malaria Awareness Day). His impish humor and tone-deaf faux pas supply plenty of material that could be spun into gold with the proper editing software. Welcoming N.C.A.A. championship teams to the White House on June 18, Bush reeled off some of the team names of those present: "There's Tigers and Badgers, Huskers and Anteaters. Go Anteaters. Fight Anteaters." Seeing that his Anteaters bit had pretty much run its miniature course (shades of Letterman's "Uma, Oprah; Oprah, Uma"), he returned to his prepared statement, urging the athletes gathered to use their championship status "to help heal a broken heart." He kids because he cares. Vamping a few opening remarks on a drop-in visit with small-business owners and budget balancers in Nashville, Tennessee, on July 19, the Compassionate Conservative cavalierly acknowledged a returning soldier in the audience who had been rendered an amputee. "Good man," he said. "We're going to get him some new legs, and if he hurries up, he can out-run me on the South Lawn of the White House." Bush made it sound as if somebody was going to pop over to the Leg Store and fit the fella up good as new.
In expansive mood, he likes to air out his salted notion of savoir faire. In his first joint press conference with Britain's new prime minister, Gordon Brown, held at Camp David on July 30, Bush administered verbal noogies to reporters as Brown, unused to such nonsense, made murmurous noises to indicate mirth and did his best to hold up his tired end of the banter. Before fielding a question from Jim Rutenberg, of The New York Times, Bush lobbed one of his own.
President Bush: Rutenberg, today's your birthday? How old are you?
J.R.: Thirty-eight.
Prime Minister Brown: My goodness.
President Bush: Here you are—amazing country, Gordon, guy is under 40 years old, asking me and you questions. It's a beautiful sight. (Laughter.)
J.R.: Forty is the new 30, Mr. President.
President Bush: It's a beautiful sight. (Laughter.)
Prime Minister Brown: Six in my Cabinet are under 40.
President Bush: Are they? (Laughter.)
J.R.: Forty is the new 20.
President Bush: You must be feeling damn old, then?
Prime Minister Brown: Absolutely. (Laughter.)
It was like listening to the soft patter of a Smothers Brothers routine gathering moss. Modesty prevented Rutenberg (whom Bush also slanged as "Mr. Birthday Boy") from revealing his integral part in this merriment when he duly wrote up the press conference for the Times the next day. Like most of his colleagues, Rutenberg neglected to take note of the snippy capper to this lukewarm love-in. When Bush spotted the BBC's Nick Robinson, who in a previous press conference had irked the president by asking him if he was "in denial" about Iraq, he acknowledged the correspondent's existence with a tart "You still hanging around?" He had tarter words of farewell, observing Robinson's sweaty pate and advising, "You'd better cover your bald head, it's getting hot out." Whereupon Robinson, as he confided on his blog, "made the fatal error of answering a quip with a quip: 'I didn't know you cared.' To which the president said, quick as a flash [and over his shoulder, I would add], 'I don't.'" Oooh, flash of claws from Miss Thing. I watched this spitball contest broadcast live on TV, yet if it weren't for the British press and Robinson's blog, I wouldn't have had clue one as to what that little spat was about, or known the backstory. It was ignored by journalism's concierges as an anecdotal non sequitur. If Prez were up and running, this incident would have yielded an episode highlight, a classic reality-TV showdown intercut with stunned reaction shots of bystanders and an italicized slash of music to underscore the tension in the air. You know, the way they do on Top Chef when one of the contestants casts aspersions on another's crabmeat appetizer and not even Padma's willowy diplomacy can stem a sulky round of bitter pouts.
In a January 2005 "conversation" on Social Security "reform," Bush asked the age of an official at the Social Security Administration who was about to address him. Andrew Biggs said he was 37. Bush responded, "Thirty-seven, talking to the president. That's great." At another Social Security event, in March 2005, he found out the age of a student asking him a question was 20: "[A]nd so here you are talking to the president about Social Security." And, at a Medicare prescription drug benefit "conversation" in April 2006, Bush found out that a Dr. Wang was from another place, making him exclaim, "Shanghai. And here he sits, as well, talking to the President of the United States." Bush had commented earlier about how great it was that an immigrant had gotten to sit next to him. —The Rude Pundit blog, August 1, 2007.
Cheap laughs, cutting repartee, petty one-upmanship—essential elements in any reality-TV enterprise. But they aren't enough to keep the riverboat afloat for a multi-year run, except perhaps on VH1, that freak emporium of damaged goods (such as The Surreal Life and the 'roid-raging Breaking Bonaduce). It takes a stronger, deeper sealant. To ensure audience identification with the glue gun of empathy, you've got to have a little thing that we in the trade like to call "heart," gobs and gobs of heart. George Bush has a heart, a two-fisted heart that he wears on his sleeve, his belt, and anywhere else it'll do the job God intended. One of his signature gestures is to emphasize the forceful truth of what's in his heart by fanning the fingers of one or both hands around his chest as if illustrating bra-cup size. Not only does he know what's in his heart, the uncounterfeitable proof of his sincerity, he knows what's in others' hearts—he's an organ reader. Asked at a 2004 press conference if he wasn't offended that then secretary of defense Donald Rumsfeld didn't personally sign condolence letters to the families of soldiers slain in Iraq, he prefaced his testimonial to Rumsfeld's sensitive nature by saying, "Listen, I know how—I know Secretary Rumsfeld's heart." When he nominated White House counsel and former personal attorney Harriet Miers to the Supreme Court, one of his assurances was "I know her heart." I don't need to explain to you English majors that the heart is a symbol of love, and "love" is another major unit in the president's vocabulary, to the point of his championing medical-liability reform during the 2004 re-election campaign by warning, "Too many good docs are getting out of the business. Too many ob-gyns aren't able to practice their love with women all across the country." Unfortunate innuendo aside, the president believes the best, safest way to practice love is with a hug—that, to paraphrase the Beatles, the hug you give is equal to the hug you get. Be a hugger, he urged those gathered at a Rose Garden event on July 26 honoring the Special Olympics ("If you've never been a hugger, I strongly advise you to be one. That means you stand at the end of the finish line of a race and you hug the people coming across the line"), and even those of us who believe a second Nuremberg jury should be convened to try the president, the vice president, and a host of neoconservative architects for Iraq war crimes would concede that this sentiment presented the president at his most sympathetic and human-seeming. It would have made a helluva lead-in to a very special episode of Extreme Makeover: Home Edition, with host Ty Pennington on hand to help dole out the hugs.
By and large, however, Bush's second term has been an emotional bust, with its dearth of warm fuzzies and feel-good moments. The chrome peeled off of Bush's halo as national healer in the post-Katrina tragedy of errors, the commendation "Heckuva job, Brownie" tied like a tin can to his legacy no matter how they try to paper things over at the future Bush presidential library and car wash. The post-Katrina squalor and corruption has made it difficult for the president to milk pathos out of subsequent disasters. Bridge falls down in Minnesota, he shows up in his monogrammed jacket, mushmouths the usual platitude about good people who are hurtin', then turns things over to some inept crony to handle as he hugs a few locals and pats a few manly shoulders in an assuredly not-gay way. Bush's outreach efforts have gone stale and are in dire need of an undo. He and his staff should take a page from reality-TV demigoddess Kathy Griffin, stand-up comic and self-deprecating star of Bravo's My Life on the D-List. In Season Three, Episode Five, the acrylic-haired half-pint was booked to entertain prisoners at the Arizona State Prison Complex in Perryville in a pair of sexually segregated performances, her routines interspersed with sit-down chats with the orange-suited inmates—conversations that were often sadly moving, especially those with the female inmates. Many of the women were in for drug-related charges involving their husbands or boyfriends and were separated from their children. The threat they posed to society seemed minuscule and the pain and suffering of their incarceration disproportionate, their plight leaving even Griffin choked up. Not everyone within the confines of the Arizona pen was as deserving of the sympathy vote. As Griffin was escorted through one enclosure, a female voice shouted from a cell, "I want to kill you!," a threat Griffin deflected with an offhand "Oh yeah, take a number, honey," and soon after she was strapped into a protective "stab vest" for a visit to the maximum-security wing. "Stab vest" is not a term often bandied about on reality TV, even when Scott Baio comes a-calling on his former bedmates on VH1's new "celebreality" series Scott Baio Is 45 … and Single, and Griffin's prison tour—like her visit to Iraq in Season Two—was a gutsy eye-opener without being preachy or hyped-up. Imagine the illuminating good that could be done if President Bush took a similar field trip, actually sitting down and powwowing with drug addicts at a rehab clinic, cons in a work-release program, or returning vets coping with disabilities without his huge banana-republic entourage functioning as a mile-long bulletproof prophylactic. He might learn something, we might learn something; it could be one more of those "teaching moments" we hear so much about and almost never witness, and, more important, it would make fabulous television.
Bonus points if Laura Bush or the twins Jenna and Barbara could be conscripted to tag along and lend appropriate facial expressions. They have been woefully under-utilized in the second term of the Bush presidency, and "family" is a necessary component of the reality-TV gestalt—it's where the first hugs that matter originate. As any viewer of the Bush presidency can testify, Laura Bush and her rainbow palette of pantsuits have been both ubiquitous and invisible in Term Two. Lillian Ross's memoir of The New Yorker editor William Shawn was titled Here but Not Here; Laura Bush's presence alongside her husband could be called There but Not There. Through some strange optical illusion or Jedi mind trick she manages to recede into the foreground or project into the background—it's hard to decide which. Either way, she hasn't been supplying the warmthiness that every presidency and reality-TV series requires and desires as a sweetener. As for the daughters—they've been completely awol, utterly useless. Sure, they have their own lives to lead and it's better for humanity that they're not running red lights with Lindsay or Paris. But their conspicuous absence could be interpreted as estrangement or outright desertion by busybodies with wicked imaginations, which offers an exploitable opportunity for those who think bold. With a wee helping of cooperation from the First Family, the bold thinkers at Prez could tastefully exploit Jenna's forthcoming nuptials and rig up a reconciliation scene that would leave the entire country mopping up tears. You have to tailor the story line to the perceived dysfunction—that's the philosophy at Prez. Such a scenario wouldn't suit a Mitt Romney reality show, because he and his strapping sons get along so handsomely it's sickening.
Candidate Romney would no doubt consider even the bare hint of such a proposal beneath his dignity, having expressed similar disdain regarding the YouTube-formatted debate on CNN, where the Democratic contestants were quizzed by, among others, a citizen pretending to be the voice of a snowman. "I think the presidency ought to be held at a higher level than having to answer questions from a snowman," huffed Romney. Oh you do, do you? He and his fellow Republicans need to get over their fine selves, let go of their death grip on standard operating procedure. Genuflecting before the Reverend Pat Robertson; doing a Stepin Fetchit before Focus on the Family chairman James Dobson (yessboss!); backpedaling on every moderate, sensible position you've ever held on abortion, capital punishment, illegal immigration, gun control, and the Confederate flag; going maudlin about embryonic stem cells as if you knew each one personally—these aren't beneath your dignity but you draw the line at a talking snowman? Such false pride helps explain why the Republicans are falling behind the Democrats digitally and in danger of fossilizing themselves with their prissy refusal to embrace new media and hybrid narrative modalities, such as YouTube mashups and reality soap opera. What we at Prez could do with the Giuliani clan! He has a son who can't stand him, a daughter who's backing Barack Obama, an aggrieved ex-wife named Donna Hanover who co-hosts a New York radio show and occasionally plays a judge on Law & Order, a cannonball from the past named Bernard Kerik rolling around on the deck, and a wife so wide-eyed it's scary. But Rudy, as everyone knows, is a control freak, and there's no room for a control freak on reality TV, except for Donald Trump, whose ratings slippage indicates that he too needs to let go.
James Wolcott is a Vanity Fair contributing editor

RECKONING
The Economic Consequences of Mr. Bush
The next president will have to deal with yet another crippling legacy of George W. Bush: the economy. A Nobel laureate, Joseph E. Stiglitz, sees a generation-long struggle to recoup.
by JOSEPH E. STIGLITZ December 2007

The American economy can take a lot of abuse, but no economy is invincible. Illustration by Edward Sorel.
When we look back someday at the catastrophe that was the Bush administration, we will think of many things: the tragedy of the Iraq war, the shame of Guantánamo and Abu Ghraib, the erosion of civil liberties. The damage done to the American economy does not make front-page headlines every day, but the repercussions will be felt beyond the lifetime of anyone reading this page.
I can hear an irritated counterthrust already. The president has not driven the United States into a recession during his almost seven years in office. Unemployment stands at a respectable 4.6 percent. Well, fine. But the other side of the ledger groans with distress: a tax code that has become hideously biased in favor of the rich; a national debt that will probably have grown 70 percent by the time this president leaves Washington; a swelling cascade of mortgage defaults; a record near-$850 billion trade deficit; oil prices that are higher than they have ever been; and a dollar so weak that for an American to buy a cup of coffee in London or Paris—or even the Yukon—becomes a venture in high finance.
And it gets worse. After almost seven years of this president, the United States is less prepared than ever to face the future. We have not been educating enough engineers and scientists, people with the skills we will need to compete with China and India. We have not been investing in the kinds of basic research that made us the technological powerhouse of the late 20th century. And although the president now understands—or so he says—that we must begin to wean ourselves from oil and coal, we have on his watch become more deeply dependent on both.
Up to now, the conventional wisdom has been that Herbert Hoover, whose policies aggravated the Great Depression, is the odds-on claimant for the mantle “worst president” when it comes to stewardship of the American economy. Once Franklin Roosevelt assumed office and reversed Hoover’s policies, the country began to recover. The economic effects of Bush’s presidency are more insidious than those of Hoover, harder to reverse, and likely to be longer-lasting. There is no threat of America’s being displaced from its position as the world’s richest economy. But our grandchildren will still be living with, and struggling with, the economic consequences of Mr. Bush.
Remember the Surplus?
The world was a very different place, economically speaking, when George W. Bush took office, in January 2001. During the Roaring 90s, many had believed that the Internet would transform everything. Productivity gains, which had averaged about 1.5 percent a year from the early 1970s through the early 90s, now approached 3 percent. During Bill Clinton’s second term, gains in manufacturing productivity sometimes even surpassed 6 percent. The Federal Reserve chairman, Alan Greenspan, spoke of a New Economy marked by continued productivity gains as the Internet buried the old ways of doing business. Others went so far as to predict an end to the business cycle. Greenspan worried aloud about how he’d ever be able to manage monetary policy once the nation’s debt was fully paid off.
This tremendous confidence took the Dow Jones index higher and higher. The rich did well, but so did the not-so-rich and even the downright poor. The Clinton years were not an economic Nirvana; as chairman of the president’s Council of Economic Advisers during part of this time, I’m all too aware of mistakes and lost opportunities. The global-trade agreements we pushed through were often unfair to developing countries. We should have invested more in infrastructure, tightened regulation of the securities markets, and taken additional steps to promote energy conservation. We fell short because of politics and lack of money—and also, frankly, because special interests sometimes shaped the agenda more than they should have. But these boom years were the first time since Jimmy Carter that the deficit was under control. And they were the first time since the 1970s that incomes at the bottom grew faster than those at the top—a benchmark worth celebrating.
By the time George W. Bush was sworn in, parts of this bright picture had begun to dim. The tech boom was over. The nasdaq fell 15 percent in the single month of April 2000, and no one knew for sure what effect the collapse of the Internet bubble would have on the real economy. It was a moment ripe for Keynesian economics, a time to prime the pump by spending more money on education, technology, and infrastructure—all of which America desperately needed, and still does, but which the Clinton administration had postponed in its relentless drive to eliminate the deficit. Bill Clinton had left President Bush in an ideal position to pursue such policies. Remember the presidential debates in 2000 between Al Gore and George Bush, and how the two men argued over how to spend America’s anticipated $2.2 trillion budget surplus? The country could well have afforded to ramp up domestic investment in key areas. In fact, doing so would have staved off recession in the short run while spurring growth in the long run.
But the Bush administration had its own ideas. The first major economic initiative pursued by the president was a massive tax cut for the rich, enacted in June of 2001. Those with incomes over a million got a tax cut of $18,000—more than 30 times larger than the cut received by the average American. The inequities were compounded by a second tax cut, in 2003, this one skewed even more heavily toward the rich. Together these tax cuts, when fully implemented and if made permanent, mean that in 2012 the average reduction for an American in the bottom 20 percent will be a scant $45, while those with incomes of more than $1 million will see their tax bills reduced by an average of $162,000.
The administration crows that the economy grew—by some 16 percent—during its first six years, but the growth helped mainly people who had no need of any help, and failed to help those who need plenty. A rising tide lifted all yachts. Inequality is now widening in America, and at a rate not seen in three-quarters of a century. A young male in his 30s today has an income, adjusted for inflation, that is 12 percent less than what his father was making 30 years ago. Some 5.3 million more Americans are living in poverty now than were living in poverty when Bush became president. America’s class structure may not have arrived there yet, but it’s heading in the direction of Brazil’s and Mexico’s.
The Bankruptcy Boom
In breathtaking disregard for the most basic rules of fiscal propriety, the administration continued to cut taxes even as it undertook expensive new spending programs and embarked on a financially ruinous “war of choice” in Iraq. A budget surplus of 2.4 percent of gross domestic product (G.D.P.), which greeted Bush as he took office, turned into a deficit of 3.6 percent in the space of four years. The United States had not experienced a turnaround of this magnitude since the global crisis of World War II.
Agricultural subsidies were doubled between 2002 and 2005. Tax expenditures—the vast system of subsidies and preferences hidden in the tax code—increased more than a quarter. Tax breaks for the president’s friends in the oil-and-gas industry increased by billions and billions of dollars. Yes, in the five years after 9/11, defense expenditures did increase (by some 70 percent), though much of the growth wasn’t helping to fight the War on Terror at all, but was being lost or outsourced in failed missions in Iraq. Meanwhile, other funds continued to be spent on the usual high-tech gimcrackery—weapons that don’t work, for enemies we don’t have. In a nutshell, money was being spent everyplace except where it was needed. During these past seven years the percentage of G.D.P. spent on research and development outside defense and health has fallen. Little has been done about our decaying infrastructure—be it levees in New Orleans or bridges in Minneapolis. Coping with most of the damage will fall to the next occupant of the White House.
Although it railed against entitlement programs for the needy, the administration enacted the largest increase in entitlements in four decades—the poorly designed Medicare prescription-drug benefit, intended as both an election-season bribe and a sop to the pharmaceutical industry. As internal documents later revealed, the true cost of the measure was hidden from Congress. Meanwhile, the pharmaceutical companies received special favors. To access the new benefits, elderly patients couldn’t opt to buy cheaper medications from Canada or other countries. The law also prohibited the U.S. government, the largest single buyer of prescription drugs, from negotiating with drug manufacturers to keep costs down. As a result, American consumers pay far more for medications than people elsewhere in the developed world.
You’ll still hear some—and, loudly, the president himself—argue that the administration’s tax cuts were meant to stimulate the economy, but this was never true. The bang for the buck—the amount of stimulus per dollar of deficit—was astonishingly low. Therefore, the job of economic stimulation fell to the Federal Reserve Board, which stepped on the accelerator in a historically unprecedented way, driving interest rates down to 1 percent. In real terms, taking inflation into account, interest rates actually dropped to negative 2 percent. The predictable result was a consumer spending spree. Looked at another way, Bush’s own fiscal irresponsibility fostered irresponsibility in everyone else. Credit was shoveled out the door, and subprime mortgages were made available to anyone this side of life support. Credit-card debt mounted to a whopping $900 billion by the summer of 2007. “Qualified at birth” became the drunken slogan of the Bush era. American households took advantage of the low interest rates, signed up for new mortgages with “teaser” initial rates, and went to town on the proceeds.
All of this spending made the economy look better for a while; the president could (and did) boast about the economic statistics. But the consequences for many families would become apparent within a few years, when interest rates rose and mortgages proved impossible to repay. The president undoubtedly hoped the reckoning would come sometime after 2008. It arrived 18 months early. As many as 1.7 million Americans are expected to lose their homes in the months ahead. For many, this will mean the beginning of a downward spiral into poverty.
Between March 2006 and March 2007 personal-bankruptcy rates soared more than 60 percent. As families went into bankruptcy, more and more of them came to understand who had won and who had lost as a result of the president’s 2005 bankruptcy bill, which made it harder for individuals to discharge their debts in a reasonable way. The lenders that had pressed for “reform” had been the clear winners, gaining added leverage and protections for themselves; people facing financial distress got the shaft.
And Then There’s Iraq
The war in Iraq (along with, to a lesser extent, the war in Afghanistan) has cost the country dearly in blood and treasure. The loss in lives can never be quantified. As for the treasure, it’s worth calling to mind that the administration, in the run-up to the invasion of Iraq, was reluctant to venture an estimate of what the war would cost (and publicly humiliated a White House aide who suggested that it might run as much as $200 billion). When pressed to give a number, the administration suggested $50 billion—what the United States is actually spending every few months. Today, government figures officially acknowledge that more than half a trillion dollars total has been spent by the U.S. “in theater.” But in fact the overall cost of the conflict could be quadruple that amount—as a study I did with Linda Bilmes of Harvard has pointed out—even as the Congressional Budget Office now concedes that total expenditures are likely to be more than double the spending on operations. The official numbers do not include, for instance, other relevant expenditures hidden in the defense budget, such as the soaring costs of recruitment, with re-enlistment bonuses of as much as $100,000. They do not include the lifetime of disability and health-care benefits that will be required by tens of thousands of wounded veterans, as many as 20 percent of whom have suffered devastating brain and spinal injuries. Astonishingly, they do not include much of the cost of the equipment that has been used in the war, and that will have to be replaced. If you also take into account the costs to the economy from higher oil prices and the knock-on effects of the war—for instance, the depressing domino effect that war-fueled uncertainty has on investment, and the difficulties U.S. firms face overseas because America is the most disliked country in the world—the total costs of the Iraq war mount, even by a conservative estimate, to at least $2 trillion. To which one needs to add these words: so far.
It is natural to wonder, What would this money have bought if we had spent it on other things? U.S. aid to all of Africa has been hovering around $5 billion a year, the equivalent of less than two weeks of direct Iraq-war expenditures. The president made a big deal out of the financial problems facing Social Security, but the system could have been repaired for a century with what we have bled into the sands of Iraq. Had even a fraction of that $2 trillion been spent on investments in education and technology, or improving our infrastructure, the country would be in a far better position economically to meet the challenges it faces in the future, including threats from abroad. For a sliver of that $2 trillion we could have provided guaranteed access to higher education for all qualified Americans.
The soaring price of oil is clearly related to the Iraq war. The issue is not whether to blame the war for this but simply how much to blame it. It seems unbelievable now to recall that Bush-administration officials before the invasion suggested not only that Iraq’s oil revenues would pay for the war in its entirety—hadn’t we actually turned a tidy profit from the 1991 Gulf War?—but also that war was the best way to ensure low oil prices. In retrospect, the only big winners from the war have been the oil companies, the defense contractors, and al-Qaeda. Before the war, the oil markets anticipated that the then price range of $20 to $25 a barrel would continue for the next three years or so. Market players expected to see more demand from China and India, sure, but they also anticipated that this greater demand would be met mostly by increased production in the Middle East. The war upset that calculation, not so much by curtailing oil production in Iraq, which it did, but rather by heightening the sense of insecurity everywhere in the region, suppressing future investment.
The continuing reliance on oil, regardless of price, points to one more administration legacy: the failure to diversify America’s energy resources. Leave aside the environmental reasons for weaning the world from hydrocarbons—the president has never convincingly embraced them, anyway. The economic and national-security arguments ought to have been powerful enough. Instead, the administration has pursued a policy of “drain America first”—that is, take as much oil out of America as possible, and as quickly as possible, with as little regard for the environment as one can get away with, leaving the country even more dependent on foreign oil in the future, and hope against hope that nuclear fusion or some other miracle will come to the rescue. So many gifts to the oil industry were included in the president’s 2003 energy bill that John McCain referred to it as the “No Lobbyist Left Behind” bill.
Contempt for the World
America’s budget and trade deficits have grown to record highs under President Bush. To be sure, deficits don’t have to be crippling in and of themselves. If a business borrows to buy a machine, it’s a good thing, not a bad thing. During the past six years, America—its government, its families, the country as a whole—has been borrowing to sustain its consumption. Meanwhile, investment in fixed assets—the plants and equipment that help increase our wealth—has been declining.
What’s the impact of all this down the road? The growth rate in America’s standard of living will almost certainly slow, and there could even be a decline. The American economy can take a lot of abuse, but no economy is invincible, and our vulnerabilities are plain for all to see. As confidence in the American economy has plummeted, so has the value of the dollar—by 40 percent against the euro since 2001.
The disarray in our economic policies at home has parallels in our economic policies abroad. President Bush blamed the Chinese for our huge trade deficit, but an increase in the value of the yuan, which he has pushed, would simply make us buy more textiles and apparel from Bangladesh and Cambodia instead of China; our deficit would remain unchanged. The president claimed to believe in free trade but instituted measures aimed at protecting the American steel industry. The United States pushed hard for a series of bilateral trade agreements and bullied smaller countries into accepting all sorts of bitter conditions, such as extending patent protection on drugs that were desperately needed to fight aids. We pressed for open markets around the world but prevented China from buying Unocal, a small American oil company, most of whose assets lie outside the United States.
Not surprisingly, protests over U.S. trade practices erupted in places such as Thailand and Morocco. But America has refused to compromise—refused, for instance, to take any decisive action to do away with our huge agricultural subsidies, which distort international markets and hurt poor farmers in developing countries. This intransigence led to the collapse of talks designed to open up international markets. As in so many other areas, President Bush worked to undermine multilateralism—the notion that countries around the world need to cooperate—and to replace it with an America-dominated system. In the end, he failed to impose American dominance—but did succeed in weakening cooperation.
The administration’s basic contempt for global institutions was underscored in 2005 when it named Paul Wolfowitz, the former deputy secretary of defense and a chief architect of the Iraq war, as president of the World Bank. Widely distrusted from the outset, and soon caught up in personal controversy, Wolfowitz became an international embarrassment and was forced to resign his position after less than two years on the job.
Globalization means that America’s economy and the rest of the world have become increasingly interwoven. Consider those bad American mortgages. As families default, the owners of the mortgages find themselves holding worthless pieces of paper. The originators of these problem mortgages had already sold them to others, who packaged them, in a non-transparent way, with other assets, and passed them on once again to unidentified others. When the problems became apparent, global financial markets faced real tremors: it was discovered that billions in bad mortgages were hidden in portfolios in Europe, China, and Australia, and even in star American investment banks such as Goldman Sachs and Bear Stearns. Indonesia and other developing countries—innocent bystanders, really—suffered as global risk premiums soared, and investors pulled money out of these emerging markets, looking for safer havens. It will take years to sort out this mess.
Meanwhile, we have become dependent on other nations for the financing of our own debt. Today, China alone holds more than $1 trillion in public and private American I.O.U.’s. Cumulative borrowing from abroad during the six years of the Bush administration amounts to some $5 trillion. Most likely these creditors will not call in their loans—if they ever did, there would be a global financial crisis. But there is something bizarre and troubling about the richest country in the world not being able to live even remotely within its means. Just as Guantánamo and Abu Ghraib have eroded America’s moral authority, so the Bush administration’s fiscal housekeeping has eroded our economic authority.
The Way Forward
Whoever moves into the White House in January 2009 will face an unenviable set of economic circumstances. Extricating the country from Iraq will be the bloodier task, but putting America’s economic house in order will be wrenching and take years.
The most immediate challenge will be simply to get the economy’s metabolism back into the normal range. That will mean moving from a savings rate of zero (or less) to a more typical savings rate of, say, 4 percent. While such an increase would be good for the long-term health of America’s economy, the short-term consequences would be painful. Money saved is money not spent. If people don’t spend money, the economic engine stalls. If households curtail their spending quickly—as they may be forced to do as a result of the meltdown in the mortgage market—this could mean a recession; if done in a more measured way, it would still mean a protracted slowdown. The problems of foreclosure and bankruptcy posed by excessive household debt are likely to get worse before they get better. And the federal government is in a bind: any quick restoration of fiscal sanity will only aggravate both problems.
And in any case there’s more to be done. What is required is in some ways simple to describe: it amounts to ceasing our current behavior and doing exactly the opposite. It means not spending money that we don’t have, increasing taxes on the rich, reducing corporate welfare, strengthening the safety net for the less well off, and making greater investment in education, technology, and infrastructure.
When it comes to taxes, we should be trying to shift the burden away from things we view as good, such as labor and savings, to things we view as bad, such as pollution. With respect to the safety net, we need to remember that the more the government does to help workers improve their skills and get affordable health care the more we free up American businesses to compete in the global economy. Finally, we’ll be a lot better off if we work with other countries to create fair and efficient global trade and financial systems. We’ll have a better chance of getting others to open up their markets if we ourselves act less hypocritically—that is, if we open our own markets to their goods and stop subsidizing American agriculture.
Some portion of the damage done by the Bush administration could be rectified quickly. A large portion will take decades to fix—and that’s assuming the political will to do so exists both in the White House and in Congress. Think of the interest we are paying, year after year, on the almost $4 trillion of increased debt burden—even at 5 percent, that’s an annual payment of $200 billion, two Iraq wars a year forever. Think of the taxes that future governments will have to levy to repay even a fraction of the debt we have accumulated. And think of the widening divide between rich and poor in America, a phenomenon that goes beyond economics and speaks to the very future of the American Dream.
In short, there’s a momentum here that will require a generation to reverse. Decades hence we should take stock, and revisit the conventional wisdom. Will Herbert Hoover still deserve his dubious mantle? I’m guessing that George W. Bush will have earned one more grim superlative.
Anya Schiffrin and Izzet Yildiz assisted with research for this article.
Joseph Stiglitz, a leading economic educator, is a professor at Columbia.

Geopolitical Diary: Russian Revival Challenges U.S. Interests

April 1, 2008

Rumors of a soon-to-be-signed bilateral “roadmap” for cooperation and strategic relations between Washington and Moscow emerged Tuesday. While U.S. President George W. Bush and Russian President Vladimir Putin have had on the face of it cordial personal relations during their tenures, there is little room for common ground on issues like Ukrainian membership in NATO or U.S. ballistic missile defense installations in former Warsaw Pact nations. However, whatever the White House might sign with the Kremlin, the U.S. is not one to trust a potential rising continental power in Eurasia.
The United States has long operated under five geopolitical imperatives. First, it needed to consolidate control over North America and secure strategic depth for the continental United States. Then it needed to control sea approaches to the North American continent and dominate the oceans. Finally, it sought to keep Eurasia divided.
Washington has enjoyed the rare freedom of struggling with its final imperative from a position of strong geographic advantage and consolidated geopolitical imperatives for more than fifty years. Even before that consolidation, U.S. grand strategy had a divided Eurasia as a core objective. A unified power that can harness the people and resources of the Eurasian land mass has the capacity to overwhelm U.S. control of the oceans, the sea approaches and ultimately the continent itself. But since the collapse of the Berlin Wall, even the spectre of such a threat has evaporated. The former Soviet Union sank into a deep and precipitous economic and military decline. Although European unity was on the rise in the 1990s, the repeated failure of Brussels and the major regional powers to act effectively in the Balkans – their own backyard – gave credence to the fact that the underlying balanced and divided structure of the European Union necessarily prevented the emergence of a coherent leadership and thus blocked any potential rise as a continental power.
The confusion of the September 11th attacks momentarily gave rise to the phantom threat of a unified Caliphate in the Middle East. But despite the sincerest hopes of al Qaeda, the geopolitical structure of that region was and is far too fragmented for even the possibility to warrant much discussion.
Nevertheless, the spectre of a dominant continental Eurasian power is firmly planted in the U.S. psyche. After nearly two decades of unprecedented unilateral hegemony, Washington for the first time has a power on its hands with at least the capability to rise to that status: Russia.
We have spent the last few weeks highlighting the potential for Cold War II. This has never been to suggest that 50,000 Soviet tanks are about to spring up along Eastern European borders or that the Berlin Wall will pop back out of the ground. But Russia may be emerging in a position to exercise significant power over the continent – in some ways with old Soviet tricks and in some ways with new tricks.
But the bottom line is that Moscow does have all the makings for a dominant continental Eurasian power:

Economically, Russia enjoys significant industrial capacity, although it is only now being brought back online in a meaningful way. The Kremlin has also felt the geopolitical heft of its resources in a world of rising global commodity and energy prices. It has the resources to sustain its own growth and the export capacity to exercise influence through foreign dependencies.

Financially, it has prudently ridden those rising prices and amassed vast currency reserves in the process. Put simply, it has the money to do things.

Politically, few countries in the world can claim the single, coherent, unified political leadership that the Kremlin enjoys.

Militarily, Russia maintains a standing military in excess of 1 million (though significant questions remain about Russia’s ability to improve qualitatively), deploys a nuclear arsenal second only to the United States and enjoys the accumulated knowledge of late Soviet technology, despite the fact that revitalization is still underway and significant challenges remain.

Geographically, although Russia suffers from long, difficult to defend borders, it has maritime access and (as a whole) stretches across the continent, giving it peripheral geographic influence from Finland to China.

Thickening the plot is the fact that Moscow also exercises one of the most practiced and skilled foreign intelligence services in the world. Between poisonings in London and Kiev to the use of oil and gas exports as a tool in foreign policy, Russia has no shortage of geopolitical levers it might cultivate.
Russia is now the first real legitimate, near-term threat to U.S. interests across Eurasia since the collapse of the Soviet Union. But the country has many challenges ahead. Moscow is now fighting along its own periphery to re-establish some semblance of strategic depth while the U.S. continues to enjoy its geographic and geopolitical strengths — and the lack of a threat to the underlying factors of those strengths. But the real potential for a rising Eurasian power has always had a tendency to weigh heavily on the architects of U.S. grand strategy. But just the same, Moscow would do well to remember how Washington treats those it perceives as challenger

http://news.yahoo.com/s/ap/20080402/ap_on_re_la_am_ca/cuba_consumer_goods

Castro reforms: DVDs, farms for Cubans
By WILL WEISSERT, Associated Press Writer
1 hour, 2 minutes ago
Cubans snapped up DVD players, motorbikes and pressure cookers for the first time Tuesday as Raul Castro's new government loosened controls on consumer goods and invited private farmers to plant tobacco, coffee and other crops on unused state land.

Combined with other reforms announced in recent days, the measures suggest real changes are being driven by the new president, who vowed when he took over from his brother Fidel to remove some of the more irksome limitations on the daily lives of Cubans.

Analysts wondered how far the communist government is willing to go.

"Cuban people can't survive on the salaries people are paying them. Average men and women have been screaming that at the top of their lungs for many years," said Felix Masud-Piloto, director of the Center for Latino Research at DePaul University. "Now after many years, the government is listening."

Many of the shoppers filling stores Tuesday lamented the fact that the goods are unaffordable on the government salaries they earn. But that didn't stop them from lining up to see electronic gadgets previously available only to foreigners and companies.

"They should have done this a long time ago," one man said as he left a store with a red and silver electric motorbike that cost $814. The Chinese-made bikes can be charged with an electric cord and had been barred for general sale because officials feared a strain on the power grid.

On Monday, the Tourism Ministry announced that any Cuban with enough money can now stay in luxury hotels and rent cars, doing away with restrictions that made ordinary people feel like second-class citizens. And last week, Cuba said citizens will be able to get cell phones legally in their own names, a luxury long reserved for the lucky few.

The land initiative, however, potentially could put more food on the table of all Cubans and bring in hard currency from exports of tobacco, coffee and other products, providing the cash inflows needed to spur a new consumer economy.

Government television said 51 percent of arable land is underused or fallow, and officials are transferring some of it to individual farmers and associations representing small, private producers. According to official figures, cooperatives already control 35 percent of arable land — and produce 60 percent of the island's agricultural output.

"Everyone who wants to produce tobacco will be given land to produce tobacco, and it will be the same with coffee," said Orlando Lugo, president of Cuba's national farmers association.

The change is a sharp contrast to the early days of Cuba's revolution, when the government forced or encouraged private farmers to turn their land over to the state or form government-controlled collective farms. But without more details, it was difficult to tell the significance of program, which began last year but was announced only this week.

"If this means all land that's not being used, like for private farmers, cooperatives and state farms, is available, that's positive," said Carmelo Mesa-Lago, a Cuba economics expert at the University of Pittsburgh. "Assuming, of course, they have the freedom to sow and sell whatever they want."

Lines formed before the doors opened at the Galerias Paseos shopping center on Havana's famed seaside Malecon boulevard, and shoppers wasted little time once inside. But there was no sign yet of computers and microwaves, highly anticipated items that clerks across Havana insisted would appear soon on store shelves, with desktop computers retailing for around $650.

Cuba's communist system was founded on promoting social and economic equality, but that doesn't mean Cubans can't have DVD players, said Mercedes Orta, who rushed to gawk at the new products.

"Socialism has nothing to do with living comfortably," she said.

Lines outside electronics boutiques and specialty shops are common in Cuba because guards limit how many people can be inside at a time. But waits were longer and aisles more packed than usual at Havana's best-known stores.

"DVDs are over there, down that aisle," an employee in a white short-sleeved shirt repeated over and over as shoppers wandered into La Copa, an electronics and grocery store across from the Copacabana Hotel.

"Very good! DVD players on sale for everybody," exclaimed Clara, an elderly woman peering at a black JVC console. "Of course nobody has the money to buy them." Like many Cubans, Clara chatted freely but wouldn't give her full name to a foreign reporter.

Government stores offered all products in convertible pesos — hard currency worth 24 times the regular pesos state employees get paid. The government controls well over 90 percent of the economy and the average state salary is just 408 regular pesos a month, about $19.50.

Still, most Cubans have access to at least some convertible pesos thanks to jobs with foreign firms or in tourism, or cash sent by relatives living in the United States.

Graciela Jaime, a 68-year-old retired clothes factory employee, complained that widespread corruption and greed has created a class of rich Cubans.

"Everyone wants to spend money and that is what's happening," she said. "If everything they earned went to the state like it should, there wouldn't be as much corruption as there is."

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Associated Press writer Katherine Corcoran in Mexico City contributed to this report.