Happy Thanksgiving!

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To Siberia by Per Petterson

petterson_to.jpgLast year's translation of Per Petterson's 2003 novel, Out Stealing Horses earned him rave reviews and several prizes (it was a New York Times Best Book of the Year and won the 100,000-euro IMPAC Dublin Award). I greatly admired the book when I read it earlier this year, and I quickly picked up a copy of his other work available in translation, In the Wake. That work, published in 2000, is a deeply personal novel based in part on the deaths of Petterson's parents and sibling in the 1994 sinking of the MS Estonia ferry.

The success of these works led to the recent republication of his 1996 novel, To Siberia, which I purchased the week of its release and read last weekend. The book follows a nameless female protagonist from her childhood in rural northern Denmark until the Nazi occupation of her homeland splits her family and prompts her to leave her home. She is the narrator of her own story, though she is looking back at her life at 60 years old, with a palpable sheen of melancholy.

In childhood, the girl is particularly close to her brother, Jesper, due to the emotional dysfunction of her parents and extended family; by the second chapter her grandfather has hung himself in the cowshed. One of her early memories involves sneaking out with her brother to spy into the windows of a pub, where they watch their grandfather instigate a fight with a local aristocrat. Jesper runs into the bar to join, only to be interrupted by the arrival of his own father, who is then taunted by their grandfather:

"Why don't you just go home if you won't drink with your own father? You were never like others, were you? You have never known why, born in pain and begotten in more than pain, a thorn in the flesh from the start. Go home to your warm house and leave the boy with me."

Jesper leaves with his father, though with some hesitation, a sign of the rebellious spirit that will drive him into the resistance against the Nazis later in the book. Both children dream of flight; he to Morocco, and she to Siberia, which she envisions as "open skies that were cold and clear, where it was easy to breathe and easy to see for long distances" (rumors that Siberia contains prison camps are dismissed as "Nazi propaganda"). This dream, however, is interrupted by the German invasion in April 1940 and the three-year occupation that followed. Her brother Jesper joins the resistance (which did tremendous work in saving Denmark's Jewish population), eventually forcing him to flee the country:

I feel myself stiffen. Of course he must get away. He cannot stay in this shack long, he must have food and drink and someone must get it out to him. No one knows when the war will end, and as long as it lasts he must stay hidden. It's no good. Sooner or later he would be caught. But it had not occurred to me.

Shocked and listless after Jesper's departure, she begins a nomadic life, leading first to Copenhagen, then Sweden, and then to Oslo, Norway. These wanderings make up the latter third of the book, which is notably less evocative than the early chapters, perhaps reflecting the protagonist's growing emotional distance from reality. As a child she noticed great detail in animals and nature; later in life she is barely moved by physical intimacy. Thus the melancholy becomes bleak, and her youth feels like a burden when her hopes and dreams are no more:

I was so young then, and I remember thinking: I'm twenty-three years old, there is nothing left in life. Only the rest.

Dark as it is, To Siberia is still superior to In the Wake. Though surely an important catharsis for the author, In the Wake was simply too detached to make much impact. But To Siberia lacks the maturity of the more recent Out Stealing Horses. There are a multitude of evocative scenes included early in the book which offer a stilted sense of mystery in her family's history, but these are left unexamined, unexplained, unresolved. The protagonist's personal interactions in the latter half of the book serve little function but to exhibit through repetition how broken she is. One hopes that Petterson's work since 2003 is next in the queue to be translated and published here.

The Conscience of a Liberal by Paul Krugman

krugman_conscience.jpgYesterday I discussed the chapter of Paul Krugman's The Conscience of a Liberal dedicated to his political and economic argument for prioritizing health care reform. This chapter comes near the end, and serves as Krugman's plan for reinvigorating and validating America's belief in liberal ideology. This is essential in light of the thesis of the book, which Krugman recognized might be "economic heresy;" that politics and government policy drive economic reality:

Can the political environment really be that decisive in determining economic inequality?... [W]hen economists, startled by rising inequality, began looking at the origins of middle-class America, they discovered to their surprise that the transition from the inequality of the Gilded Age to the relative equality of the postwar era wasn't a gradual evolution. Instead, America's postwar middle-class society was created.

The second and third chapters of the book trace this history, from what Krugman deems "The Long Gilded Age" from the 1870s until the New Deal, "a period defined above all by persistently high levels of economic inequality." Krugman then points to the great contrast posed by the 1950s, when economic equality was at its height; the poor were less poor, the rich were less rich. It was, Krugman argues, "The Great Compression." It was the era of the middle-class. Krugman argues that this was not driven simply by some natural market forces, as was originally believed:

The Long Gilded Age, they thought, was a stage through which the country had to pass; the middle-class society that followed, they believed, was the natural, inevitable happy end state of the process of economic development. But by the mid-1980s it was clear that the story wasn't over, that inequality was rising again.

While some continued to offer market-based explanations for these trends, Krugman looks elsewhere. He argues that "the Great Compression is a powerful antidote to fatalism, a demonstration that political reform can create a more equitable distribution of income--and, in the process, create a healthier climate for democracy." He goes through a variety of factors, including government support for unionization and rules established by the National War Labor Board, all quickly establishing an increased economic equality that remained stable for decades.

Krugman also demonstrates that once Republicans became resigned to the survival of the New Deal, with Truman's victory in 1948, politics became less acrimonious, with room for conservatives in the Democratic Party and liberals in the Republican Party (evidenced by significant overlap between the voting patterns of the centrists in each party, unheard of today).

Of course, if government policy can effectuate a dramatic rise in economic equality, it can also engineer the opposite. Much of the remainder of Krugman's book explores just that story: the rise of movement conservatives, their exploitation of cultural issues to distract voters as they tried to dismantle the New Deal, and the resulting return of vast economic inequality.

Krugman brings up Thomas Frank's What's the Matter With Kansas?, which I discussed last week. Unlike Frank, however, Krugman does not believe movement conservatives rode to power exclusively by converting working-class voters on cultural issues. Though he admits he was "bowled over" when he first read it, Krugman suggests that "voting has become more, not less, class-based over time, which is just what you'd expect given the change in the nature of the Republican Party."

Still, something has allowed movement conservatism to win elections despite policies that should have been unpopular with a majority of the voters. So let's talk about the noneconomic issues that conservatives have exploited, starting with the issue that Frank oddly didn't mention in that glorious rant: race.

Krugman discusses at length the racial component of the so-called "culture wars," and makes a convincing argument that movement conservative outrage over states' rights, welfare, and crime was little more than a series of dog-whistles to tap into conscious or subconscious racial biases and thus successfully sever the New Deal coalition between Southern whites and the rest of the Democratic Party. He also explores the role of the Red Scare, and the "Rambofication" of the Vietnam War, which retroactively claimed the American soldier had been stabbed in the back by weak-kneed liberals back home.

Fortunately, this movement has gone too far, played the race card and the culture war too often. What the 2006 mid-terms suggested, and the recent election has confirmed, is that America can no longer be scared into voting against its self-interest. As Krugman details, the Iraq War has cost the Republicans their credibility on national security. The country is growing less white, and whites are growing less racist. And Americans' views on homosexuality, women's rights, and other culture war issues are becoming increasingly liberal, particularly among the younger demographics. Thus we see the GOP increasingly marginalized as a regional party. No longer are Southern whites the base upon which to build a larger conservative coalition; instead, the lunatics have taken over the asylum.

Krugman's book is an exceptional effort at demonstrating the influence that political decisions can have on economic realities, charting the history of how that influence was wielded by liberals and conservatives in the 20th century, and suggesting a way forward for liberal ideology through progressive politics. Krugman proudly states that "Liberals are those who believe in institutions that limit inequality and injustice. Progressives are those who participate, explicitly, or implicitly, in a political coalition that defends and tries to enlarge those institutions." We are witnessing the rise of both.

Krugman on Health Care Reform

krugman.jpgOver the weekend I finished Nobel laureate Paul Krugman's excellent The Conscience of a Liberal, which I will examine at length tomorrow. Today I want to discuss one particular chapter of the book, in which Krugman argues that the most important issue on the liberal agenda should be "completing the New Deal by providing Americans with something citizens of every other advanced country already have: guaranteed universal health care."

What follows is as good a 30-page summary as exists on the current problems with the health care system, the reasons Democrats failed to fix it in 1993-94, and what the current plans on the table involve:

The fact is that every other advanced country manages to achieve the supposedly impossible, providing health care to all its citizens. The quality of care they provide, by any available measure, is as good as or better than ours. And they do all of this while spending much less per person on health care than we do. Health care, in other words, turns out to be an area in which doing the right thing morally is also a free lunch in economic terms. All the evidence suggests that a more just system would also be cheaper to run than our current system, and provide better care.

Krugman demonstrates how Americans get less service for more money (with a couple cites to Ezra Klein for good measure; go Ezra!), explains the mechanics and costs of our private insurance-based system, shows how this has led to crisis over the past two decades, examines why reform failed in 1993-94, and how things could be different this time. He gives a great outline of why a single-payer system (akin to Medicare for everyone) is both economically superior and political impossible, and then describes the more feasible alternatives that liberals have crafted, based on four elements: 1) community rating, 2) subsides for low-income families, 3) mandate coverage, and 4) public-private competition. While the details are negotiable, Krugman says "the important thing is that universal health care looks very doable, from an economic, fiscal, and even political point of view."

In facft, we have seen a remarkable confluence of opinion that in the midst of all our other economic problems, health care should be a priority. Charles Morris singled it out at the end of a book focused on the financial crisis. Krugman highlights it as the single issue that can renew the promise of liberalism. President-elect Obama hammered the health care issue home in his advertising and the debates (remember when he called health care a right and discussed his own mother's illness?), and it showed: the public trusted him by wide margins on health care, and now they expect reform.

And it looks like they'll get it, if the President-elect's personnel choices give us any sign. Last week I highlighted the choice of Tom Daschle as HHS secretary and White House health care reform czar. Other good signs include the appointment of Peter Orzag to head OMB, since as Ezra points out:

Orszag will be coming from the Congressional Budget Office, OMB's legislative cousin. There, he's shown an almost single-minded focus on health care reform. He's added dozens of health care analysts to the staff, reconstructed the health policy division's management structure, and is readying to release two major books on health policy options and CBO's health care scoring models that will be extremely central in how Congress looks at building a health care bill. Amidst all that, he's toured the country giving a slide show about the problems of the health care system, the overwhelming danger it poses to our fiscal condition, the incredible inefficiencies that beset the delivery, and the research that suggests reform could not only save money but also improve care. He's also acted as a powerful and credible counterweight to those who counsel incrementalism, or delay, on health reform.

And for the progressives decrying the key role Larry Summers looks to be getting in the White House economics shop (based on a lot of silly nonsense, in my opinion), it is worth mentioning that he is "a true believer in health care reform, both as a way to alleviate economic insecurity and to address the country's long-term fiscal crisis."

With the public clamoring for change and the new President-elect and Democratic majority in Congress ready to deliver, things should go smoothly, right? Don't count on it. In fact, expect all out war. Because this is not just about health care. It's about the public's confidence in the liberal welfare state as we know it. As Krugman says, if Democrats enact effective universal health care:

Universal health care could, in short, be to a New Deal what Social Security was to the original--both a crucially important program in its own right, and a reaffirmation of the principle that we are our brother's keepers.

It is for this reason that Republicans blocked reform under Clinton, as Krugman mentions, and Steve Benen laid out in a blast-from-the-past post about a memo Bill Kristol circulated to congressional Republicans in 1993 opposing the Clinton health care plan because "Its passage will give the Democrats a lock on the crucial middle-class vote and revive the reputation of the party." Krugman explains Kristol's motivation:

[H]is main concern, clearly, was that universal health care might actually work--that it would be popular, and that it would make the case for government intervention... The most dangerous government programs, from a movement conservative's point of view, are the ones that work the best and thereby legitimize the welfare state.

And we are seeing exactly the same rhetoric again. After a US News editorial favorably quoted a Cato Institute blogger's argument that "Blocking Obama's health plan is key to the GOP's survival," Hilzoy summed up the state of thinking in the minority party:

Pethokoukis and Cannon claim that if Obama succeeds in passing health care, then people who might have been conservatives will like it, and will be more likely to vote for the people who passed it. This is unexceptional. An honest conservative might accept this claim and say: well, I guess our ideas are unpopular, so we'll just have to make our case more persuasively.

But that's not the conclusion they draw. Pethokoukis and Cannon say: because people will like health care reform, if we do not block it, our party will lose support. So precisely because people would like it if they tried it, we need to make sure that it fails.

The self-perpetuation of the Republican party, is, at this point, its only purpose.

De Niro's Game by Rawi Hage

hage_deniros.jpgOne of the better books I have read this year was Per Petterson's Out Stealing Horses, which came to my attention through a number of positive mentions on literary blogs. I enjoyed it so much that I soon read Petterson's prior work, In the Wake, and I have just started his recently re-published 1996 novel, To Siberia. Part of Petterson's good press came from winning the IMPAC Dublin Award, which carries a hefty 100,000-euro purse. Thus when I saw that the 2008 winner had been announced, and was also getting some positive reviews, I thought it was worth a try.

De Niro's Game is the debut novel of Lebanese-born Canadian author Rawi Hage. Set in Beirut during the Lebanese Civil War of the late 1970s and early 1980s, the book follows two young friends, Bassam and George, who are stumbling toward adulthood in a society that lacks a rule of law or even basic behavioral norms. Readers of Khaled Hosseini's books will hear echoes of his depictions of Afghanistan, and surely there is are unfortunate parallels between any war-torn failed states:

Ten thousand bombs had landed, and I was waiting for George.

So the novel begins, with violence, and violence permeates the story through and through. When George arrives, it is to relay to Bassam a problem he has with a man monopolizing the parking in front of his aunt's home:

When he leaves, he still reserves the space for himself. I moved the two poles marking his spot so my aunt can park. So she parks, and we go up to have coffee at her place. This Chafiq fellow knocks at my aunt's door and asks her to move her car. It is his space, he says. My aunt says, It is a public space... He insults her... She shouts... I pull out my gun, put it in his face, and kick him out of the house. He runs down the stairs and threatens me from below. But we will show him, won't we, quiet man?

And indeed, later that night Bassam and George shoot holes in the man's car. Shortly thereafter, the man comes to George's aunt to apologize. And thus we see that for these boys growing up in a lawless city, violence is not just an option, it is an instinct. It is the first resort. George is and remains the more violent of the two, but as the novel passes the violence of both will escalate. It is how they interact with and understand the world; with merchants, with employers, with women.

The greater contrast is that while both are Lebanese, George is of Lebanon, he belongs to the country, feels a part of it, and has no wish to depart. Bassam's desire to leave Lebanon is made manifest in the third sentence of the book, and most of his actions thereafter are motivated toward that end: petty theft to obtain money, remaining unattached from any person or group that would hold him back. Much of the book is taken up with this quest, the challenge of obtaining enough money to depart, and the one attachment that Bassam cannot seem to escape: George. As George joins the militia and rises through the ranks, Bassam is drawn closer to that most dangerous sphere.

Hage excels at portraying this world turned upside down. Lebanon was one of the most prosperous, advanced nations in the Middle East, but a few years have utterly displaced its standards of civilization. Yet life goes on. Hage finds a strangely effective symbol of this paradox in the animals of Beirut:

Bombs fell, warriors fought, people ate, and the garbage piled up on the corners of our streets. Cats and dogs were feasting and getting fatter. The rich were leaving for France and letting their dogs roam loose on the streets: orphan dogs, expensive dogs, potty-trained dogs, dogs with French names and red bowties, fluffy dogs, well-bred dogs, china dogs, genetically modified dogs, and incestuous dogs that clung to one another in packs, covered the streets in tens, and gathered under the command of charismatic three-legged mutt. The most expensive pack of wild dogs roamed Beirut and the earth, and howled to the big moon, and ate from mountains of garbage on the corner of our streets.

It is this city turned on its side that Bassam seeks to flee, but it is not so easy to flee when the world is broken; he must endure the stress, the unexpected, and the violence himself. As with so many books, things are steady until the end, when a series of implausible revelations seek to overturn some of the reader's basic assumptions but succeed only in muddling the meaning of the acts that led Bassam and George to their eventual destinations. Still, worthy until that point and an author to keep an eye on in the future.

The English Patient by Michael Ondaatje

ondaatje_english.jpgI have a standing rule that if a book I want to read has made into a movie, I try not to see the movie until after I have read the book. That's not to say I've never seen a movie and then subsequently read the book; Michael Chabon's Wonder Boys, Daniel Wallace's Big Fish, and Nick Hornby's High Fidelity come to mind. But in those cases, I had no preexisting desire to read the book; it was the quality of the movie that drew my attention to the source material.

In other cases, though, I have long delayed seeing a film in anticipation of first reading the novel. In the past year, I have made some real advances on that front, reading Charles Frazier's Cold Mountain, Ian McEwan's Atonement, and Arthur Golden's Memoirs of a Geisha. Of the three, I have already seen Atonement, which I found to be a surprisingly effective adaptation.

Thus when I finished Michael Ondaatje's The English Patient this week, I made progress on multiple fronts. It was the 90th book I read this year, making this my most prolific year in reading yet. It was the basis for a widely acclaimed film that I put off viewing for over a decade but am now eager to see. And it won the Booker Prize, furthering my circuitous quest to read all the winners of that award.

Though The English Patient was published more than 15 years ago, and turned into a successful film just a few years later, I managed to remain ignorant about the content beyond its title character being a plane crash survivor with severe burns. So I entered the story with few preconceptions or foreknowledge of what was to come. And this is certainly the way to read a book like this; Ondaatje has made an art of the slow reveal. In the waning days of World War II, four people have been drawn together to a crumbling Italian villa. The English patient, whose identity is a mystery, and his Canadian nurse Hana are leftovers from the building's time as a military hospital. Hana refused to let her patient (or herself) be moved when the rest were relocated to safer confines, and she has been alone with him for some time:

Some nights she opened doors and slept in rooms that had walls missing. She lay on the pallet on the very edge of the room, facing the drifting landscape of stars, moving clouds, wakened by the growl of thunder and lightning. She was twenty years old and mad and unconcerned with safety during this time, having no qualms about the dangers of the possibly mined library or the thunder that startled her in the night. She was restless after the cold months, when she had been limited to dark, protected spaces. She entered rooms that had been soiled by soldiers, rooms whose furniture had been burned within them. She cleared out leaves and shit and urine and charred tables. She was living like a vagrant, while elsewhere the English patient reposed in his bed like a king.

They are eventually joined by Caravaggio, a friend of Hana's father whose skills as a thief were put to use by Allied intelligence; captured, mutilated, and released, he overheard talk of Hana's whereabouts while in another hospital and left his bed to join her. The foursome is complete upon the arrival of Kip, an Indian volunteer in the British Army whose job as a sapper has him roaming the Italian landscape in search of mines planted by retreating Germans soldiers:

At first he will not come into the house at all. He walks past on some duty or other to do with the dismantling of mines. Always courteous. A little nod of his head. Hana sees him wash at a basin of collected rainwater, placed formally on top of a sundial. The garden tap, used in previous times for the seedbeds, is now dry. She sees his shirtless brown body as he tosses water over himself like a bird using its wing. During the day she notices mostly his arms in the short-sleeved army shirt and the rifle which is always with him, even though battles seem now to be over for them.

From this point, Ondaatje uses his poet's touch to slowly unveil the stories of each of the four. The English patient's story is, of course, the most enigmatic, with hints of a love affair and wanderings in the desert unfolding as the others, particularly Caravaggio, converse with the patient. But I was particularly moved by Kip's tale, how he came to England as an outsider, despite the Indian nationalism of his older brother, how he was initially shunned as a foreigner but found a group to welcome him, only for that to end in tragedy.

These four people are linked not just by physical proximity, but a shared status as victims of trauma. Hana's work as a nurse exposed her to the extremes of death and destruction and she is still in shock over the death of her father. Caravaggio was mutilated by his captors. Kip fled to Italy to escape his own losses in Britain and constantly undergoes the stress of defusing bombs that might kill him. The English patient's physical wounds are obvious, but his psychological wounds are revealed to be equally damaging.

Their isolation in this abandoned villa heightens the awareness of their every physical movement; the lack of activity elevates the drama of their memories. The way they seek solace, distraction, and recovery in each other, within themselves, and the ways in which these attempts fail, is the heart of the book. It is an exploration of the meanings and consequences of warfare at an individual level, the lovely frailty of human bodies and human psyches and human interdependence. A book well worth your time.

Waxman Takes Energy and Commerce Committee Chair

waxman.jpgNow this may seem like major inside-baseball stuff, but when energy and health care reform are at the top of a new President's agenda, the House Energy and Commerce Committee is an important place. And for 300 years, the senior Democrat on the committee has been Michigan's John Dingell, the House's longest serving representative (by 10 years!) and a longtime ally of Detroit. Needless to say, Detroit's interests in energy and health care reform are not necessarily aligned with the interests of the nation.

Thus it was big news when Henry Waxman, the committed environmentalist and progressive California congressman, took the extraordinary step of challenging Dingell for the committee chair, which has been granted via seniority in the Democratic Caucus for decades. Perhaps even more extraordinary, Waxman won:

In a secret ballot vote in the Cannon Caucus Room, House Democrats ratified an earlier decision by the Steering and Policy Committee to replace the 82-year-old Dingell with his 69-year-old rival. The vote was 137-122 in favor of Waxman.

The ascension of Waxman, a wily environmentalist, recasts a committee that Dingell has chaired since 1981 with an eye toward protecting the domestic auto industry in his native Michigan. The Energy and Commerce Committee has principal jurisdiction over many of President-elect Barack Obama's top legislative priorities, including energy, the environment and health care.

Well, Dingell hasn't actually chaired the committee since 1981. Some, though apparently not anyone working at Politico, may remember that Republicans controlled the House from 1995 until 2007.

Anyhow, Waxman had been chair of the Oversight and Government Reform Committee, where he has done some excellent work, but which was unlikely to be a position of much power with Democrats in control of the White House and Congress. This is good news. Ezra has more:

If you care about action on global warming, that's a very big deal indeed. And frankly, a bit unexpected. Dingell is an old lion in Congress. He's got a lot of friends and has done a lot of people favors. His loss isn't personal. Rather, it's evidence that Democrats are serious enough about climate change to want the relevant committee to be something more than an arm of Detroit.

And though this is a direct victory for Waxman, it's a quiet triumph for Pelosi. Without her tacit support, Waxman's campaign would have quietly died... Recalcitrant chairmen are going to be far more afraid of crossing Pelosi this afternoon than they were this morning.

For why this is not just good news for Waxman and Pelosi, but for progressive policy in this country, check out Harold Meyerson's latest column, in which he describes Waxman as "probably the House's most accomplished legislator in three issue areas that are high on the agendas of the nation and President-elect Barack Obama: universal health care, global warming and enhanced consumer protections" and brands him a "legislative genius." And even more insider-baseball from Ezra: "Waxman's chief of staff, Phil Schiliro, was named last week as Barack Obamas director of legislative affairs. Energy and Commerce is probably the most important committee for Obama's agenda. With Schiliro in the White House and Waxman holding the chairmanship, you're likely to see an intense and easy cooperation between the two branches." Over at TNR, Bradford Plumer and Christopher Orr have more.

As Greg Sargent says, "This is big, big, big."

UPDATE: This also has me wondering about the seniority system in the Democratic Caucus. Technically, the caucus votes to elect each chairmen, and has been doing so since 1974. But custom has been to perpetually elect the senior member of each committee. We'll see if that changes in years to come, or whether this was the exception that proves the rule.

What's the Matter With Kansas? by Thomas Frank

frank_whats.jpgThe recent election dramatically renewed my interest in politics, an interest that had been relatively dormant for quite some time. Even when I was attuned to the political world, it was usually limited to a breaking news, current events level of attention. But the recent campaign season had me wanting to dig deeper, think harder about politics in this country. That's why I am about four years late in reading Thomas Frank's What's the Matter With Kansas?, which made big waves in the lead-up to President Bush's re-election. A native of Kansas, Frank's basic quest in the book was to understand how working class people from the heartland, once the radical supporters of John Brown and 19th-century leftist populism, became reliable Republican voters.

His thesis is that Republican politicians perfected the art of cultural warfare, convincing white, working class Americans to vote their outrage about sex, drugs, and rock & roll (and abortion, gay marriage, school prayer, evolution, etc) above their economic self-interest. In the mean time, Democratic politicians ceded the leftist economic agenda in favor of pro-business centrism, thus giving working class people no economic reason to favor Democrats any longer. Thus the Wall Street Republicans obtain working class votes, proceed to cut their own taxes and lower economic regulations that favor their own interests, and suffer no harm at the ballot box:

For decades Americans have experienced a populist uprising that only benefits the people it is supposed to be targeting. In Kansas we merely see an extreme version of this mysterious situation. The angry workers, mighty in their numbers, are marching irresistibly against the arrogant. They are shaking their fists at the sons of privilege. They are laughing at the dainty affectations of the Leawood toffs. They are massing at the gates of Mission Hills, hoisting the black flag, and while the millionaires tremble in their mansions, they are bellowing out their terrifying demands. "We are here," they scream, "to cut your taxes."

Frank also addresses the conundrum of why these working class voters harbor no resentment that, in addition to their economic interests being flushed, they also seem to make no progress on the cultural front. After all, in the long view, how much progress has been made in the restoration of school prayer, the end of legal abortion, and the suppression of gay rights? Virtually none. Yet they keep giving their vote to the Wall Street Republicans:

As culture war, the backlash was born to lose. Its goal is not to win cultural battles but to take offense, conspicuously, vocally, even flamboyantly. Indignation is the great aesthetic principle of backlash culture; voicing the fury of the imposed-upon is to the backlash what the guitar solo is to heavy metal. Indignation is the privileged emotion, the magic moment that brings a consciousness of rightness and a determination to persist.

Can there be a better example of this than the late campaign of Senator McCain and Governor Palin? These two brought the reductionist culture wars to a new level, and Palin virtually personifies the concept of indignant anti-intellectualism. It is Christians that are oppressed, Real America that is under attack, and it is some hazy, mysterious, socialist, effeminate, arugula-loving liberal elite that is to blame.

The book's strength lies in Frank's anecdotal journeys through the modern Kansas landscape, such as the travails of once-proudly unionized Wichita, or the rise of conservative Republicans like Sam Brownback and the battle between these "Cons" and the "Mods," the old-school Republicans of the country-club variety. But these anecdotes are all Frank really offers to support his thesis. You won't see any charts in this book, no detailed statistical analysis. At the time it was published, though, the thesis was ready made for Democrats frustrated at a series of unsuccessful elections, and it gained even greater currency with Bush's re-election, attributed by some to Karl Rove's leveraging of anger about gay marriage into Republican votes in Ohio.

Frank's critics, however, say he simply has his facts wrong, and that as nice as the story sounds anecdotally, it doesn't hold up empirically. At the forefront has been Princeton political science professor Larry Bartels, whose lengthy rebuttal challenged a number of Frank's conclusions. Bartels raised the issue again this spring, in the context of Barack Obama's comments about bitter voters clinging to guns and religion (a seeming endorsement of the Frank thesis):

It is true that American voters attach significantly more weight to social issues than they did 20 years ago. It is also true that church attendance has become a stronger predictor of voting behavior. But both of those changes are concentrated primarily among people who are affluent and well educated, not among the working class.

Mr. Obama's comments are supposed to be significant because of the popular perception that rural, working-class voters have abandoned the Democratic Party in recent decades and that the only way for Democrats to win them back is to cater to their cultural concerns. The reality is that John Kerry received a slender plurality of their votes in 2004, while John F. Kennedy and Hubert Humphrey, in the close elections of 1960 and 1968, lost them narrowly.

Mr. Obama should do as well or better among these voters if he is the Democratic candidate in November. If he doesn't, it won't be because he has offended the tender sensitivities of small-town Americans. It will be because he has embraced a misleading stereotype of who they are and what they care about.

Well the President-elect certainly won a resounding victory, doing better than any Democratic candidate since LBJ. So who was right? If Frank's thesis is correct, than Obama's victory requires some explanation of how this Democrat turned things around. One possibility is that Obama's victory does not reflect gained support amongst the white working class, but simply the decreasing importance of that bloc with the growth of minority voters and Obama's overwhelming youth appeal. Another possibility is that the economic crisis was severe enough to shock voters back toward their own self-interest, and caused Democrats to re-embrace the economic rhetoric that had been abandoned by the centrists. The latter is Frank's own thesis, which he published in an editorial the day after the election:

Acknowledging class was always difficult for "New Democrats" -- it was second-wave, it was divisive -- but 2008 made retro politics cool again. Watching the Dow get hacked down, seeing the investment banking industry collapse, hearing about the lavish rewards won by the corporate officers who brought this ruin down on us -- all these things combined to make a certain Depressionesque fury the unavoidable flavor of the year. When your mortgage is under water and your neighbors are being laid off, the need to take up the sword against arrogant stem-cell scientists becomes considerably less urgent.

He also suggests that McCain and Palin's over-the-top red meat appeal may have been counterproductive ("a flamboyant pantomime, grotesquely exaggerated in each of its parts"), though whether it has done permanent damage to the tactic is yet to be seen.

The other possibility, of course, is that Frank was wrong in the first place, that Democrats don't have a particular problem with the white working class, and that Obama's sweeping victory demonstrates his across the board appeal, unrestrained by the particular quirks of the Frank focus group. It will likely take a few more election cycles before we can make any kind of firm conclusions. Any single campaign has too many variables, from the quality of the candidates to the campaigns they ran to the question of incumbent effects, and on and on. But I'm sure Frank and/or Bartels will be back with more, soon enough.

Tom Daschle to Run HHS, Lead Health Care Reform

daschle.jpgThe elite cabinet posts (State, Defense, Justice, Treasury) usually get all the press, and with good reason. These are the elite posts because they have authority over the most powerful departments, where big policy decisions are made and implemented.

This administration may be different. With reports that Tom Daschle has been offered and accepted the job of Secretary of Health and Human Services, we are getting the strongest signs yet that health care reform, real health care reform, is coming. Leading that reform is likely to be as high-profile and meaningful a portfolio as any over the next few years, and the President-elect has sent a strong signal with his choice. As Ezra Klein says:

You don't tap the former Senate Majority Leader to run your health care bureaucracy. That's not his skill set. You tap him to get your health care plan through Congress. You tap him because he understands the parliamentary tricks and has a deep knowledge of the ideologies and incentives of the relevant players. You tap him because you understand that health care reform runs through the Senate. And he accepts because he has been assured that you mean to attempt health care reform.

Daschle will serve not just as a department head, but reportedly will "also oversee Mr. Obama's health policy working group to develop a health care plan." As Jonathan Cohn points out, Daschle has not only the legislative knowledge and connections to get a plan passed, he knows a thing or two about what the plan should look like:

Although he was always been interested in health care, in the last few years he's become a true wonk on the subject, publishing a book called Critical: What We Can Do About the Health-Care Crisis. It urges precisely the sorts of reforms President-Elect Obama and his congressional allies are promoting right now.

Not more than an hour ago, I sent Ezra an email asking for some suggested reading on health care reform. Seems like Daschle's book would be a decent place to start.

Begich Wins Alaska Senate Seat

Mark Begich's narrow victory over Ted Stevens in the Alaska Senate race is tremendous news for several reasons. It is the seventh Senate seat Democrats have picked up this year, besting the already tremendous 2006 cycle and guaranteeing at least 58 members of the Democratic Caucus, with Minnesota and Georgia still to be decided. It is also a seat Democrats should have had no business winning, considering how red Alaska is, and how long it has gone without a Democrat in its congressional delegation (1980). Mark Begich has the makings of a great senator, with the potential to hold this seat for some time, since he'll have all the advantages of incumbency come 2014.

That's the good news for Democrats. The good news for all Americans is that there will not be a convicted felon seated in our next Congress. And it also denies the opportunity, should Stevens have won reelection but then resigned or been expelled, for Sarah Palin to maneuver her way to Washington.

This is change we can believe in.

The Trillion Dollar Meltdown by Charles Morris

morris_trillion.jpgYesterday I discussed Kevin Phillips' Bad Money, which was the first book on finance I turned to after the shock of this fall's crises on Wall Street. While the book had its strengths, it was really a regurgitation of Phillips' theories of American politics and economics as previously examined in several other books he has written, with a single chapter on securitization added in to tie his theories to current events. That chapter succinctly summarized the problem, but did not delve deep enough into the causes and consequences for my satisfaction.

The next book I turned to was Charles Morris' The Trillion Dollar Meltdown. Like Phillips' text, this was written in the aftermath of the credit crisis of summer 2007. But while it predates the bailout of Bear Stearns to the takeover of Fannie Mae and Freddie Mac to the collapse of Lehman Brothers, Morris' book provides such a cogent analysis of the underlying currents of the crisis that those who read it when published in March were surely not surprised by the events that followed.

Morris starts the book with a chapter titled "The Death of Liberalism," in which he gives a brief outline (including a reference to Kevin Phillips' The Emerging Republican Majority) of the decline of Keynesian liberalism, with "its central premise... that an economic intelligentsia could reliably employ government lever to achieve specific outcomes in the real world." In its place comes the rise of Milton Friedman's monetarism:

Monetarists taught that the supply of money was the product of the stock of money--just the sum of spendable coins, bills, checking accounts, etc.--times its turnover rate, or its velocity. Friedman's historical research showed that velocity was roughly constant, so government policy need concern itself only with the money stock.

As such, government regulation of anything other than the amount of money in the system was unnecessary at best, and more likely counterproductive. So the monetarists would have us believe. Morris takes us through the supposed triumph of the free-market after a sharp 1978 capital gains tax cut (which conservatives credit with the rise of venture capitalist investment; Morris says it was the growth of pension funds in the 70s) and Reagan's elimination of oil price controls (which conservatives credit with the fall in oil prices; Morris says it was the market doing its job over the course of the previous decade through efficiency gains and a recession). This faith in the free market was bolstered by a blinkered view of the economic gains made in the 1980s and 1990s, ignoring the lessons learned from the end of the leveraged-buyouts and the S&L crisis.

Morris lays out this history as an extended introduction to the new types of "investment technologies" that were largely responsible for a variety of economic crises from the late 1980s to late 1990s:

The new "quants" could carve up and reassemble old-fashioned asset classes so they were custom-fit to investor needs. Large-volume computerized trading could exploit tiny changes in stock prices or interest rates. Very broad new classes of complex, structured investment instruments revolutionized wholesale banking. All the new technologies and strategies harbored dangerous flaws that tended to reveal themselves only at points of great stress. Bigger, better, even more far-reaching versions of these strategies have now, in 2008, placed the entire global economy at risk.

Morris details the three "practice runs" that fit this model, from the 1987 stock market crash (portfolio insurance) to the 1994 mortgage crisis (collateralized mortgage obligations) to the 1998 collapse of Long-Term Capital Management (mathematical arbitrage models). Morris explains what ties all three crises together:

In the first place, all three of the crises developed in market pockets that were mostly outside the oversight of federal authorities. The relentless deregulation drive that started during the Reagan administration steadily shifted lending activities to the purview of nonregulated entities, until by 2006, only about a quarter of all lending occurred in regulated sectors, down from about 80 percent twenty years before...

A second fault line is a worsening of the "Agency" problem--or the problem of ensuring that an employee, a contractor, or a company performing a service doesn't act against your interest... But the new generation of mortgage banks sells off mortgages in weeks or months, brokers are usually compensated strictly from the fees they generate, and they often work with a customer entirely by e-mail or phone... As financial machinery fragments, Agency problems abound; in the brave new world of absolute markets, it is not only dangerously naive to trust your mortgage broker, but based on recent scandals in college tuition lending, even your student aid counselor...

Finally, a third dangerous trend is the increased dominance of investment decisions by mathematical constructs. The mathematics of big portfolios analogizes price movements to models of heat diffusion and the motions of gas molecules, in which uncountable randomized micro-interactions lead to highly predictable macro-results... But the analogies break down in times of stress.... Humans hate losing money more than they like making it. Humans are subject to fads. even the most sophisticated traders exhibit herding behavior... In other words, as all three of this chapter's crises suggest, in real financial markets, air molecules have a disturbing knack for clumping on one side of the room.

In the following chapter, Morris indicts Alan Greenspan's insistence on keeping the funds rate low (in fact, cutting it further to 1.00% for a full year) even after the second quarter of 2003 showed strong growth that would continue through 2004. He also goes after Greenspan's "resolute insistence on focusing only on consumer price inflation, while ignoring signs of rampant inflation in the price of assets, especially houses and bonds of all kinds." This became known as the "Greenspan Put," in which the Fed cuts interest rates any time the financial sector screws up and sends us toward recession: "No matter what goes wrong, the Fed will rescue you by creating enough cheap money to buy you out of your troubles."

With that in mind, Morris tackles the housing boom of 2000-2005. Unlike most housing booms, which are caused by demographic shifts (either increased birth rates, immigration, or mobility), Morris posits that the "2000s real estate bubble may be one of those rare beasts conjured into the world solely by financiers." But how did they do it?

Since houses are so leveraged, their prices are hypersensitive to changes in interest rates. As long-term rates trended steadily downward in the second half of the 1990s, the big banks plunged headlong into the refinancing, or "refi," business. It took a couple of years for consumers to catch on--extracting money from your house was an exotic concept. Banks mount lavish advertising campaigns to stoke their enthusiasm. Refis jumped from $14 billion in 1995 to nearly a quarter-trillion in 2005, the great majority of them resulting in higher loan amounts. Lower interest rates let you borrow more for the same monthly payment, pay off your old loan, and buy a new car with the difference.

That explains how consumers got on board, but that leaves the question of how banks got involved. Morris goes through the litany: automated credit scoring, automated underwriting allowing higher loan-to-income ratios, trimmed-back documentation requirements, and the advent of "devices to make housing more available to marginal credits" like ARMs, piggyback loans, and subprime loans. As we all know, this story does not end well:

As of the end of 2007, the industry borders on catastrophe. The housing boom is over: The widely followed Case-Shiller index of home resales shows that real home prices have fallen steadily throughout 2007. (As late as 2006, the forecasting consensus was that house prices never fall.) Delinquencies have been rising rapidly and, given the very low quality of recent-vintage loans, can only accelerate... Lender bankruptcies, with their attendant legal tangles, are spreading among the industry's erstwhile roman-candle growth stars.

All of this I can understand. This is relatively straightforward bad business practice, taking advantage of cheap money and loose regulations to pump up fees and commissions. But it also seems like a manageable problem. As Morris says, "[s]ubprime and similarly risky mortgages... still account for no more than 15 to 20 percent of all outstanding mortgages. Even assuming a high rate of delinquencies within that group, in the context of a $12 trillion economy, it looks like small potatoes." Exactly. Which is why it came as such a shock to me when this housing crisis started tearing down the giants of Wall Street.

To understand that "takes us to the heart of the giant credit bubble that we have so willy-nilly constructed." Morris outlines the creation of commercial mortgage-backed securities, followed by asset-backed securities for any asset that could be valued, and then collateralized debt obligations. The capstone to all this ingenuity, however, was the credit default swap:

To take a simple case: Suppose US Bank decides it is underexposed to credits in Southeast Asia. The old way to fix that was to buy some Asian bank branches or partner with a local bank. A credit default swap short-circuits the process. For a fee, US Bank will guarantee against any losses on a loan portfolio held by Asia Bank and will receive the interest and fees on those loans. Asia Bank will continue to service the loans, so its local customers will see no change, but Asia Bank, in Street jargon, will have purchased insurance for its risk portfolio, freeing up regulatory capital for business expansion.

Note the distinction of "regulatory capital," which refers to capital which is subject to a variety of government regulations. But the reason credit default swaps are called swaps, rather than insurance (which is what they are), is because insurance is highly regulated. Swaps are not. So all of this is going on with little or no supervision. To make matters worse, the only people who were asked to put their stamp of approval were the credit agencies:

The public may think of them as detached arbiters of security quality, like a financial Supreme Court. In fact, they were building booming, diversified, high-margin business. Between 2002 and 2006, for instance, Moody's doubled its revenue and more than tripled its stock price. Their core customers, however, were the big banks and investment banks, and since CDO bond ratings were usually heavily negotiated, it seems clear that the agencies slanted their ratings to please their clients.

The result of all this was to essentially take a tangible set of questionable debts (residential mortgages), repeatedly repackage them in dozens of complicated securities, the riskiest tranche of which the hedge funds would stake out absurdly leveraged positions (e.g. for every dollar of its own capital, the fund invests four more borrowed from one of its prime broker banks; in a risky tranche, this can multiple exponentially). Then, to get some protection from this risk, the banks and hedge funds sell each other credit default swaps and are on the hook for each other's risk; but since its not insurance, it does not have to be reported the same way.

In a sense, everybody's money was tied up in the same small subset of extremely risky loans; this led to great profits in the boom times, and the near destruction of the industry in the bust. Morris saw what was coming, and laid out a variety of end-game scenarios, including recession, and a credit meltdown, For those who read this book in March 2008, the events that followed were surely little surprised. Lehmann Brothers did not go bankrupt just because homeowners were not repaying the loans Lehmann Brothers made to them (though its ownership of subprime lender BNC Mortgage exacerbated the underlying problem). It went bankrupt because it left itself overexposed to large positions in subprime and other lower-rated mortgage tranches when securitizing the underlying mortgages (e.g. it kept the riskiest pieces for itself and sold the rest) and was tremendously over-leveraged, even beyond healthy levels of Wall Street leverage.

The only question is where it all stops. Morris points out a variety of issues still unresolved today, including credit card debt and credit default swaps. He also discusses other underlying problems facing the U.S. economy as it tries to stabilize and recover, including the "dramatic shift of taxable incomes toward the wealthiest people" over the past 25 years and the continued socialization of Wall Street risk. In a brief chapter entitled "Recovering Balance," he emphasizes the need for renewed regulation, and interestingly, the need for an overhaul of our health care system. These are little more than bullet points at the end of the book, but Morris hits the right tone, which is that if nothing else the current crisis requires "coming face-to-face with the past quarter-century's ruling ideology that expanding public resources is always wrong."

On a side note: in a twisted bit of irony, the events of this year were so cataclysmic that when Morris' book is published in paperback in February 2009, it will be titled The Two-Trillion Dollar Meltdown.

Lieberman Keeps His Chairmanship

lieberman_mccain.jpgAfter a couple weeks of wrangling and rumormongering, the Democratic caucus decided today to let Joe Lieberman keep his chairmanship of the Homeland Security & Governmental Affairs Committee.

I'm pretty conflicted on this one. On the one hand, I strongly share the nearly unanimous sense in the liberal blogosphere that Lieberman's actions over the past two years have been reprehensible and that he should be stripped of his committee chair. Failing to endorse Barack Obama would have been awkward for a Democratic senator. Endorsing John McCain would have been inappropriate. But actively campaigning on behalf of McCain, repeatedly questioning the qualifications and judgment of Obama, and praising Sarah Palin, was simply beyond any notion of acceptable behavior for someone who wants to be rewarded for his seniority as a member of the Democratic caucus. Furthermore, from a policy standpoint, Lieberman has been a mess. As I said back in June:

On most issues, he is a liberal. On the war in Iraq, he has allied himself with the neo-con right. The war in Iraq is and has been the most important issue for the last 5 years, and the one in which a strong, bipartisan centrist voice has been needed to walk the administration off the ledge. So Senator Lieberman's failure to be a voice of restraint and his enabling of the worst of the neoconservative tendencies has been most disappointing.

So from both a political and a policy standpoint, there are good reasons he should not be rewarded. On the other hand, if the President-elect and Harry Reid wanted him stripped of his committee chair, it would have happened. I simply refuse to believe this was a problem of getting enough votes. So there is something else at work here. Perhaps there have been behind-the-scenes discussions about Lieberman's role in supporting some particularly controversial upcoming agenda items. Or perhaps this is another step in the President-elect's efforts to genuinely repair much of the damage that vindictive partisanship has already done in the halls of Congress.

So I'm faced with a choice between my personal anger and belief that punishment is due, and my recognition that politicians I respect and trust have gone in another direction. While I don't plan on accepting everything the new administration offers us with blind faith, we are still in the early stages of the transition, and the President-elect still has trust capital to spend with this voter.

Bad Money by Kevin Phillips

phillips_bad.jpgWhen the turmoil in the financial sector exploded into full blown crisis with the collapse of Lehman Brothers in September, I found myself disturbingly unfamiliar with the basic subject matter of the ensuing debate. I had a basic understanding of the mortgage market, and knew enough about subprime loans and ARMs to have secured a 30-year fixed rate when we bought our condo. I also had a wealth of anecdotal information from my father in southern California about the skyrocketing home prices and the absurd practices of his neighbors, who were perpetually re-financing in order to put in pools or buy new cars with the equity from these inflated values.

But the terms "collateralized debt obligation" and "credit default swap" were meaningless to me. There was a time when I paid much closer attention to the financial world, but it has been a few years. It seems, though, that even if I had been paying attention, I might not have understood these subjects. They are essentially designed not to be understood. Because as soon as people started paying close enough attention, and realized what was going on, the bottom fell out.

Fortunately (and unfortunately), there were already a few books out that touched on this subject matter with a more popular audience in mind. Fortunately because I had something other than Wikipedia to rely on. Unfortunately because the reason these books had been published was that the crisis really first hit in July 2007 with the collapse of two Bear Sterans hedge funds (which I somehow failed to really notice). This gave book publishers enough time to get books into print by the spring. Yet federal regulators apparently did not act with similar speed; every step in the crisis that has unfolded since them seems to have caught them off guard, from the bailout of Bear Stearns to the takeover of Fannie Mae and Freddie Mac to the collapse of Lehman Brothers.

The first book I turned to was Bad Money by Kevin Phillips. Phillips has made a name for himself over the years for his prophetic analysis of American politics. His rise to prominence came with his 1969 book, The Emerging Republican Majority, which many believe foresaw the rise of Reagan and the conservative realignment (which appears to be over as of November 4, 2008). At that time, Phillips was a major Republican strategist, but over the years he has moved dramatically away from the party. Along the way, he has expanded the scope of his writing to include a focus on the interaction of money and politics, in such books as The Politics of Rich and Poor, Wealth and Democracy and most recently, American Theocracy, in which Phillips discussed the dangerous confluence of expanding debt, financial misbehavior, and the rising cost of oil.

In Bad Money, Phillips opens with a chapter on the rise of financial services and the decline of manufacturing in the U.S. economy. He starts there because it is only once we understand that financial services now account for 20% of America's GDP can we understand how deeply invested we have become in the success of this industry, how reliant we are on it for stability, and thus how important it is that it be properly regulated. This is not something most people understand, and Phillips suggests that government leaders want it this way; that's how they reassured us that a crisis on Wall Street need not become a crisis on Main Street, and thus little regulation was necessary. We know now how wrong that notion was.

Phillips digs deeper into the rise of financial services and suggests that this growth was systematically encouraged by Washington, by what he calls "financial mercantilism." By this, Phillips means the bailouts and socialization of credit risk going back almost three decades, from the 1984 rescue of Continental Illinois through the saving and loans crisis to the Mexican peso rescue to Long-Term Capital Management to the interest rate cuts of the early 2000s (Phillips' book came out too early to include this fall's mother of all bailouts):

After the financial markets' narrow escape in the stock market crash of 1987, some kind of high-level decisions seems to have been reached in Washington to loosely institutionalize a rescue mechanism for the stock market akin to that pursued on an ad hoc basis (by the Fed and the U.S. Treasury) to safeguard major U.S. banks from exposure to domestic and foreign loan and currency crises. Thus the coinage of the phrase "financial mercantilism." For Washington to have made such a tentative choice in 1988 was momentous. Finance became the chosen sector of the U.S. economy--the one that would be protected and promoted because it was too important to fail. Manufacturing would receive no such help, however excited members of Congress might get from time to time.

And it does not appear that the traumas of 2008 have changed anything yet. Just look at the disparate reactions from Republican leaders to the crisis on Wall Street and in the auto industry. The former merits a $700b bailout, the latter can't even get $25b.

Phillips follows this with a chapter on "Bullnomics" in which he reflects on the way that Americans have been manipulated to support an economic system that offers vast rewards to the elite and little for anything else. He touches on such things as the manipulation of the consumer price index and the rise of the prosperity gospel, in which religious Americans are taught that God wants them to be materially rich.

In Chapter 4, Phillips hits the subject I'd been looking for: securitization, which is defined simply as "the process of taking an illiquid asset, or group of assets, and through financial engineering, transforming them into a security." It is through the repeated packaging and re-packaging of assets, particularly houses bought via subprime or exotic loans, that what might have been a troubling housing crisis came to nearly destroy the entire U.S. financial industry:

Instead of being kept on firm ledgers, mortgage loans could be stripped of risk by a derivative contract, or in most circumstances old off in a mortgage-backed security or structured CDO. The money received could be used for another loan or mortgage, then again--and again. Lending limitations became nonlimitations. However, as volume swelled, loan- and mortage-making standards dropped. Enticements to sign up marginal borrowers--through the "exotic" forms of mortgages little used boefore--took on an ever-larger role.

The growing disconnect between the broker writing the mortage and the hedge fund that would end up owning a leveraged piece of a CDO that contained the mortgage, destroyed the traditional incentives by which mortgages were made, e.g. a bank only lent money it reasonably expected would be repaid with sufficient interest. Phillips goes through a number of root causes for this phenomena, including the declining importance of depository institutions in the face of mutual funds, hedge funds, security brokers and others, all of which did business largely outside existing government regulations:

Small wonder that.. buyers worldwide found themselves with structured products that lacked (1) opacity and responsible description, (2) disinterested and careful credit ratings, (3) reliable markets to which they could be marked, and (4) practical testing under major credit-crisis conditions. Manufacturers negligent in these ways would be facing large fines or even jail terms.

This securitization process led to a downward spiral in the housing market, with the expansion of easy money and subprime loans, all of which were packaged up into complex CDOs and split a dozen ways so that no one knew how much anything was worth. When people finally started paying attention after the collapse of Bear Stearns, well... check your 401(k).

In the remainder of the book, Phillips reiterates his belief that American reliance on oil will prove to be a crippling failure in this century, with analogies to the decline of the inabilities of the Dutch Empire (reliant on wind and water) and the British Empire (reliant on coal) to adapt to new energy technologies. He further laments the weakness of the dollar, its vulnerability to foreign manipulation, and its dependence on being the principal currency for pricing oil, before a concluding chapter exploring the possibilities that we are seeing the initial signs of the United States as an empire in decline.

The major weakness of the book is that beyond the short chapter on securitization, this is just a regurgitation of what Phillips has already written. His analogy to the Dutch and British empires goes back at least as far as The Politics of Rich and Poor, which he published in 1990. The focus on the rise of the financial sector echoes that of Wealth and Democracy, the discussion of dynastic politics was covered in American Dynasty, and the chapter on peak oil and the dollar-oil nexus is straight out of American Theocracy. So while this serves as a decent first-line introduction to these topics, Phillips himself has recognized that each deserves a book of its own. Tomorrow, I will discuss a short text that serves as a better introduction to the financial crisis itself, Charles Morris' The Trillion Dollar Meltdown.

The Audacity of Hope by Barack Obama, III

obama_audacity.jpgFor the past several days I have been discussing President-Elect Obama's 2006 book, The Audacity of Hope. On Friday I focused on the first half of the text, and yesterday I discussed the chapters on faith and race. Today I want to finish with the last two chapters of this extraordinary book, which cover foreign policy and family.

This seems a strange way to end the book. Certainly each is an important topic, and there is no requirement that each chapter flow easily into the next. But the initial sense that these chapters don't fit next to one another is misplaced. Look at what they tell us about this man, our next President. He is a Democrat who knows Democrats can own foreign policy, that, "We are the party of Roosevelt. We are the party of Kennedy." And he is a loving husband and father, who understands why America needs to be safe and strong, not for the sake of power, but for the sake of preserving the American dream that has been our motivating force for centuries. He is a man comfortable in his own skin, who knows why he sought the position he just won.

Obama opens the chapter on foreign policy with a lengthy discussion of his experience as a child in Indonesia, followed by a brief outline of the country's history since that time. Combined with having a Kenyan-born father, it seems fair to suggest that Obama has the most personal connection to the world beyond our shores than previous occupants of the Oval Office. He uses American involvement in Indonesia as a start point for analyzing the isolationist/expansionist/internationalist cycles that our foreign policy has experienced since the country's founding.

As the campaign debates over Iran and "preconditions' made clear, Obama is in favor of expanding the use of high-level diplomacy far beyond what the current administration pursued for most of the past eight years. And his rhetoric on Iraq has been consistent: it was a mistake to go there and we need to figure out a responsible way to leave. He pulls no punches in the book, calling the invasion "a strategic blunder" and squarely rejecting the Bush doctrine:

[W]e have the right to take unilateral military action to eliminate an imminent threat to our security--so long as an imminent threat is understood to be a nation, group, or individual that is actively preparing to strike U.S. targets... and has or will have the means to do so in the immediate future. Al Qaeda qualifies under this standard, and we can and should carry out preemptive strikes against them wherever we can. Iraq under Saddam Hussein did not meet this standard.

It was really amazing to see how over the course of 2008, the Bush administration slowly began to adopt so many of the Obama foreign policy positions. Obama favored talks with Iran and North Korea, and we had talks in North Korea. Obama favored striking into Pakistan against high-value Al Qaeda targets, and we struck into Pakistan. Obama pushed for a firm timeline for U.S. troop withdrawal from Iraq, and we negotiated a timeline. Now comes word that Obama's election has already created progress in Iraq:

Iraqi Shiite politicians are indicating that they will move faster toward a new security agreement about American troops, and a Bush administration official said he believed that Iraqiscould ratify the agreement as early as the middle of this month.

"Before, the Iraqis were thinking that if they sign the pact, there will be no respect for the schedule of troop withdrawal by Dec. 31, 2011," said Hadi al-Ameri, a powerful member of the Islamic Supreme Council of Iraq, a major Shiite party. "If Republicans were still there, there would be no respect for this timetable. This is a positive step to have the same theory about the timetable as Mr. Obama."

What a change for foreigners to believe in the good faith of the American President.

In the final chapter of his book, Obama turns inward once again, to the family that has been his sustaining force these past few strenuous years. He recounts how he met and fell in love with the beautiful, powerful woman who would be his wife, how he was welcomed into her extended family, conventional in a way he'd never enjoyed in his own. He segues from their experience to the nationwide shift toward dual-income households where both parents work, often because they have to, and this is having an effect on their children. But he rejects the notion that this implies less care for the children, pointing out that there are sacrifices either way:

[F]or the average American woman the decision to work isn't simply a matter of changing attitudes. It's a matter of making ends meet... for most families, having Mom stay at home means living in a less-safe neighborhood and enrolling their children in a less-competitive school. That's not a choice most Americans are willing to make. Instead they do the best they can under the circumstances, knowing that the type of household they grew up in.. has become much, much harder to sustain.

He reflects on the hardships his own career ambitions placed on Michelle, and is sufficiently self-aware to recognize that she was the one who make adjustments. He also recognizes that as professionals, they had more flexible schedules than most, "enough income to cover all the services that help ease the pressures of two-earner parenthood," and a semi-retired mother-in-law to babysit. Since these luxuries are unavailable to most Americans, however, he recognizes that additional support is needed. An opportunity for government, not to solve the problem, but to assist those who are working diligently to better themselves and their families:

[I]f we're serious about family values, then we can put policies in place that make the juggling of work and parenting a little bit easier. We could start by making high-quality day care affordable for every family that needs it. In contrast to most European countries, day care in the United States is a haphazard affair. Improved day-care licensing and training, an expansion of the federal and state child tax credits, and sliding-scale subsidies to families that need them all could provide both middle-class and low-income parents some peace of mind during the workday--and benefit employers through reduced absenteeism.

He has further proposals centered on investments in education, flexible work schedules and mandated paid family leave (the U.S. stands nearly alone among wealthy nations in its failure to provide this benefit). What is striking about all his ideas is that they do not presume that government should be a big brother, dictating the terms and conditions of parenting. They presume that government should be more like that semi-retired mother-in-law, giving that extra bit of support that gives parents the time and energy to fulfill their own plans to raise successful children.

Again, a truly extraordinary book. I'm eager to see these ideas put into action.

The Audacity of Hope by Barack Obama, II

audacity2.jpgOn Friday I discussed the first half of President-Elect Obama's 2006 book, The Audacity of Hope, which I read in the week before the election in order to better understand the man I would be voting for, and reinvigorate my passion for seeing him in the White House. The early chapters of the book lay out his vision of the political process, the purposes of government, and the supremacy of the Constitution. The middle of the book is dominated by his now familiar domestic policy agenda, focusing on education, energy, and economics.

Obama follows these chapters with a focus on two traditional minefields for Democrats: faith and race. It is in these areas that he has probably shown the greatest innovation. He has demonstrated the possibilities of common ground and the power of a progressive agenda on these issues in a way that no other Democrat, even those who are great leaders on policy matters, has been able to achieve. First, his focus on faith, which was a major area in which his campaign deliberately departed from those of Kerry and Gore:

When we abandon the field of religious discourse--when we ignore the debate about what it means to be a good Christian or Muslim or Jew; when we discuss religion only in the negative sense of where or how it should not be practiced, rather than in the positive sense of what it tells us about our obligations toward one another; when we shy away from religious venues and religious broadcasts because we assume that we will be unwelcome--others will fill the vacuum. And those who do are likely to be those with the most insular views of faith, or who cynically use religion to justify partisan ends.

More fundamentally, the discomfort of some progressives with any hint of religiosity has often inhibited us from effectively addressing issues in moral terms. Some of the problem is rhetorical: Scrub language of all religious content and we forfeit the imagery and terminology through which millions of Americans understand both their personal morality and social justice. Imagine Lincoln's Second Inaugural Address without reference to "the judgments of the Lord," or King's "I Have a Dream" speech without reference to "all of God's children." Their summoning of a higher truth helped inspire what had seemed impossible and move the nation to embrace a common destiny.

He goes on to emphasize that the "failure as progressives to tap into the moral l underpinnings of the nation is not just rhetorical," but "may also lead us to discount the role that values and culture play in addressing some of our most urgent social problems." Like Robert Reich, Obama believes that the mantle of public morality is one that can be harnessed to advance the progressive agenda.

His perspective on race, discussed so eloquently in his speech last March, is explored at length via anecdotes about his childhood, his campaigns in Illinois, and his observations of modern American life. Though some of the discussion centers on aspects unique to African-Americans, for the most part Obama is explicitly inclusive of the growing Hispanic community in his exploration of the continuing racial divide, and the inequality that accompanies it. He somehow anticipates the campaign John McCain would come to run in the last two weeks of the election, in which the implication would be made that the black candidate wanted to take white money and "spread the wealth" to minorities, and rejects this dichotomy out of hand:

These days, what ails working-class and middle-class blacks and Latinos is not fundamentally different from what ails their white counterparts: downsizing, outsourcing, automation, wage stagnation, the dismantling of employer-based health-care and pension plans, and schools that fail to teach young people the skills they need to complete in a global economy. And what would help minority workers are the same things that would help white workers: the opportunity to earn a living wage, the education and training that lead to such jobs, labor laws and tax laws that restore some balance to the distribution of the nation's wealth, and health-care, child care, and retirement systems that working people can count on.

By emphasizing solutions that do not rely on racial preferences, even though they might dramatically benefit the minority community, Obama removes the racial wedge that conservatives have relied on for so long. He also speaks with authority in his admonition of minority communities that have failed to do everything in their own power to improve their lot:

We should agree that the responsibility to close the gap can't come from government alone; minorities, individually and collectively, have responsibilities as well. Many of the social or cultural factors that negatively affect black people, for example, simply mirror in exaggerated forms problems that afflict America as a whole: too much television (the average black household has the television on more than eleven hours per day), too much consumption of poisons (blacks smoke more and eat more fast food), and a lack of emphasis on educational achievement.

Then there's the collapse of the two-parent black household, a phenomenon that is occurring at such an alarming rate when compared to the rest of American society that what was once a difference in degree has become a difference in kind, a phenomenon that reflects a casualness toward sex and child rearing among black men that renders children more vulnerable--and for which there is simply no excuse.

Like Nixon going to China, this is the sort of stuff that even the most trusted white politicians simply cannot say; for all the talk of Bill Clinton as the "first black president," he could never have made headway on the deterioration of black fatherhood. But Obama is not conceding to the conservative smear that lazy blacks are responsible for their own misfortune. He recognizes systemic disadvantages and has reasonable proposals for how government can give a hand up:

Strategies like an expanded Earned Income Tax Credit that helps all low-wage workers can make an enormous difference in the lives of these women and their children. But if we're serious about breaking the cycle of intergenerational poverty, then man of these women will need some extra help with the basics that those living outside the inner city take for granted. They need more police and more effective policing in their neighborhoods, to provide them and their children some semblance of personal security. They need access to community-based health center that emphasize prevention--including reproductive health care, nutritional counseling, and in some case treatment for substance abuse. They need a radical transformation of the schools their children attend, and access to affordable child care that will allow them to hold a full-time job or pursue their education.

By combining a recognition that minority communities bear a great responsibility for self-improvement and agreement that the welfare reform of the 1990s was a valid first-step, Obama has the credibility to establish that demands on the community must be matched by social programs that create the environment in which self-improvement can take place. There is just no sense in talking about minority parents taking a greater role in their children's education when they are working two jobs. How much blame can be placed on a young black or Hispanic child for dropping out of a school that could not meet basic educational standards?

The very fact of Obama's victory in this election is an opportunity to turn a page, and write a new chapter. But it is only an opportunity, not a fait accompli. And while the President-Elect must lead, he can't be the only leader. The rest of us need to shoulder our share of the burden.

The last two chapters of the book are dichotomous, focusing on foreign policy and then family, but they demonstrate in their own ways the professional and personal strengths of our next President. I'll wrap up that discussion tomorrow.

The Audacity of Hope by Barack Obama, I

audacity.jpgThough I had been supporting his candidacy for months, and felt pretty comfortable with my knowledge of his positions, before actually casting my ballot for Barack Obama on Tuesday I thought it would be nice to actually read his own words. So I started The Audacity of Hope, which he published in October 2006. At the time, he had been a U.S. Senator for 20 months, and had a bright future ahead of him.

The publication of this book would, in fact, fast-forward that future, and play a role in his decision to run for President, as we've learned from Evan Thomas' new account in Newsweek. One of the early backers of his candidacy was D.C. powerhouse attorney Gregory Craig, a former aide to Senator Kennedy and personal lawyer to President Clinton:

Craig read Obama's book "The Audacity of Hope," which, Craig said, "floored me," and later chanced to ride with Obama on the Washington shuttle. He read Obama's earlier autobiography, "Dreams From My Father," and was "blown away," he recalled. "In my judgment, he showed more insight and maturity than Bill Clinton at the age of 60 in terms of understanding himself." In November 2006, Craig sat next to George Stevens, an old friend of the Robert Kennedy clan, at another Obama speech. Stevens leaned over to Craig and said, "What do you think of this guy for president? I haven't heard anybody like this since Bobby Kennedy." Craig instantly replied, "Sign me up." Stevens and Craig approached Obama coming out of the speech and asked, "What are you doing in 2008?" Obama gave them a big grin and said, "Oh, man, it wasn't that good."

Well, I don't know about the speech he gave that day, but this book is that good. It is easily the best writing I have ever seen from a politician, and probably the best political writing from any source. Obama has a rare talent for sounding both intelligent and genuine; he addresses the issues, but gives his perspective roots in his personal experience. His ability and willingness to reflect on his own mistakes and weaknesses is something normally seen only in retired politician looking back on his career, not rising stars looking for the next step up:

I am new enough on the national political scene that I serve as a blank screen on which people of vastly different political stripes project their own views. As such, I am bound to disappoint some, if not all, of them. Which perhaps indicates a second, more intimate theme to this book--namely, how I, or anybody in public office, can avoid the pitfalls of fame, the hunger to please, the fear of loos, and thereby retain that kernel of truth, that singular voice within each of us that reminds us of our deepest commitments.

Recently, one of the reporters covering Capitol Hill stopped me on the way to my office and mentioned that she had enjoyed reading my first book. "I wonder," she said, "if you can be that interesting in the next one you write." By which she meant, I wonder if you can be honest now that you are a U.S. senator.

I wonder, too, sometimes.

If the rest of the book is any indication, he could. Or at least to a vastly greater extent than we've come to expect from our politicians. Much of what he writes seems familiar now. After all, his first chapter is a discussion of the partisan rancor that has consumed Congress for the past decade and a half, and the need to end the "trivialization of politics." And having just read Robert Reich's Reason, I couldn't help but hear echoes of that text as well. Consider seize the mantle of public morality, and compare it to Obama's discussion of values:

I think Democrats are wrong to run away from a debate about values, as wrong as those conservatives who see values only as a wedge to pry loose working-class voters from the Democratic base. It is the language of values that people use to map their world. It is what can inspire them to take action, and move them beyond their isolation... [T]he broader question of shared values--the standards and principles that the majority of Americans deem important in their lives and in the life of the country--should be the heart of our politics, the cornerstone of any meaningful debate about budgets and projects, regulations and policies.

Reich argued that the values argument could be made effectively against the culture of corporate greed and corruption, and Obama agrees, pointing out that "conservatives should at least be wiling to speak out against unseemly behavior in corporate boardrooms with the same moral force, the same sense of outrage, that they direct against dirty rap lyrics." What Reich and Obama share is a confidence that liberal ideas are not just right, but worthy of being lauded in public rhetoric.

Obama is also particularly skilled at pointing out conservative straw-man attacks, explaining why they are wrong, and then re-framing the discussion to demonstrate the strength of his own position. One of the standard Republican lines of attack for decades has been that liberals are fans of big government and believe that government can solve all your problems. John McCain tried to use this line of attack at various times, particularly in response to the health care question at the second debate. But Obama has figured out the perfect response. First, he points out that he does not, in fact, believe that government can solve every problem. He triumphs, for example, the importance of family in educating children. He then re-frames the discussion:

Like many conservatives, I believe in the power of culture to determine both individual success and social cohesion, and I believe we ignore cultural factors at our peril. But I also believe that our government can play a role in shaping that culture for the better--or for the worse.

This message, that while government can not solve all our problems, it can solve some of them and help with others, is resonating at this moment for good reason. The country is bearing the burden of eight years of excessive deregulation and governmental indifference to issues that beg for collective action: health care, renewable energy, the environment. So to have a presidential candidate tell us that government can help, and will help... well you saw the election results.

Another strength that Obama's candidacy brought, of special importance to those of us with legal minds, is his deep understanding and respect for the Constitution. A former law professor, Obama speaks with great conviction about the importance of that document in our civic life, a welcome change after an administration that seemed to view it as, at best, an obstacle. Obama dedicates the entire third chapter of his book to this topic, and he covers a range of issues from the filibuster to strict constructionism, finally stating his own preference for "Justice Breyer's view of the Constitution--that it is not a static but rather a living document, and must be read in the context of an ever-changing world." Sure, I love this; that's my position as well. But what is really moving to me is to have a man in the Oval Office who can think so intelligently about what these positions mean:

It's not just absolute power that the Founders sought to prevent. Implicit in its structure, in the very idea of ordered liberty, was a rejection of absolute truth, the infallibility of any idea or ideology or theology or "ism," any tyrannical consistency that might lock future generations into a single, unalterable course, or drive both majorities and minorities into the cruelties of the Inquisition, the pogrom, the gulag, or the jihad. The Founder may have trusted in God, but true to the Enlightenment spirit, they also trusted in the minds and senses that God had given them.

Obama follows with chapters exploring the nature of modern politics and the meaning of opportunity and how to expand it through investments in education, science, and energy. Much of what he lays out in these chapters took real form in his campaign: his refusal to take money from lobbyists or PACs, the democratizing of fundraising through small online donors, and his repeated emphasis on investment in schools, research, and renewable sources of energy. The midsection of this book, written and published in 2006 before his candidacy was even announced, remain the core of Obama's policy proposals.

In the last third of the book, Obama tackles several of the most difficult topics for any Democratic politician: faith, race, and national security. More on this Monday.

David Axelrod, Senior White House Adviser

axelrod2.jpgCould the Obama White House get any more West Wing? Lots of ink has been spilled about life imitating art imitating life, what with the Obama-inspired Matt Santos character winning the presidential election against an aging, maverick Republican senator from a western state, only for Obama to do the same. And yesterday we saw it again, with Rahm Emanuel following the character he inspired (Josh Lyman) into the position of Chief of Staff.

Now comes word that David Axelrod will take a position as a Senior Adviser in the White House. While this does not come as much surprise, come on. Look at this guy. Could he be any more Toby Ziegler if he tried? Note that Axelrod/Ziegler is close friends with Emanuel/Lyman, and it is reported that like Ziegler, of the major campaign players he has known the candidate the "longest and has the most interwoven relationship with [him]."

On a more serious note, this is great news for the Obama White House. Axelrod has a long personal and working relationship with Emanuel and the President-Elect, and if Emanuel understands Washington politics, Axelrod understands electoral realities.

Democrats Gain 6 Senate Seats

Just two years after gaining six seats in the Senate, Democrats are poised to at least match that total again this year. With the mail-in votes finally being tallied in blue strongholds, Jeff Merkley has defeated incumbent Gordon Smith in Oregon. Here are the six newest members of the Senate's Democratic Caucus:

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mark_udall.jpgtom_udall.jpgmark_warner.jpg

Clockwise from top left: Kay Hagan (D-NC), Jeff Merkley (D-OR), Jeanne Shaheen (D-NH), Mark Warner (D-VA), Tom Udall (D-NM), Mark Udall (D-CO).

These are, of course, not all the new Democratic senators that we'll be seeing in the next Congress. There are still close races not yet called in Minnesota and Alaska, as well as a likely run-off here in Georgia. More obviously, though, we are soon to have new senators from Illinois and Delaware to replace a couple of guys who've found work elsewhere.

Robert Gibbs, Press Secretary

Robert GibbsAnother face we will be seeing a lot of over the next several years belongs to Robert Gibbs, who will be the next White House Press Secretary, according to Politico. Gibbs has been around for awhile. He was the communications director for the early part of Kerry's 2004 campaign, worked on a variety of Senate campaigns, and has been Obama's communications director since the start of the campaign. He "has unquestioned authority, access and institutional memory," which will boost his credibility with the press.

He's also as tough as they come. Just check out this clip of Gibbs on Hannity & Colmes from a few weeks ago. This was during that ten days or so when the McCain theme of the moment was Obama's guilty-by-association with William Ayers. Sean Hannity had just done an hour-long smear job on Obama that was largely based on the frivolous claims of a fellow named Andy Martin, a documented anti-Semite. So when Hannity started going after the Obama-Ayers smear, Gibbs asked Hannity, "Are you anti-Semitic?":

Robert Gibbs taking over from the sycophantic Dana Perino? That's change we can believe in. Unfortunately, it does break the streak of parallels to The West Wing, as C.J. Cregg was loosely based on Dee Dee Myers, and most definitely not Robert Gibbs.

Rahm Emanuel

Rahm EmanuelThis is a face we might be seeing a lot of over the next several years. If you don't recognize it, you obviously weren't paying enough attention to the Clinton White House, where Rahm Emanuel served as a senior adviser to the President until 1998. Or maybe you were paying more attention to the spunky little Greek guy. Emanuel ran for Congress in 2002, led the Democratic Party to major gains in 2006 as chairman of the Democratic Congressional Campaign Committee, and is now the caucus chairman. It was assumed he had his eye on the Speakership. Now it seems he may have another job in mind:

In his first major move as president-elect, Barack Obama has asked Rep. Rahm Emanuel (D-Ill.), a tough-minded tactician with West Wing experience, to serve as his White House chief of staff, Democratic sources tell Politico.

Emanuel has said to friends that he wants and will take the job, but it was not a done deal as of early this morning. Obama plans to move swiftly with his transition announcement and could name Emanuel this week, the sources said.

I like this pick. It means Obama is serious about getting things done. Emanuel knows the White House, he knows Congress, and he knows the Democratic Party. That's the triangle that Obama's plans will live or die in. And it is a good indication that Obama recognizes that while his own power stems from an ability to inspire and unite, that's not always enough:

Some Democrats have warned that Emanuel's take-no-prisoners style could hurt Obama. But the president-elect wants to move fast to push his legislative agenda through the Democratic-controlled Congress -- and Emanuel knows the Hill and power politics as well as anyone in town.

"Obama wants a bad cop, so he can be good cop 90 percent of the time," an adviser said.

Emanuel is also a strong advocate on Jewish issues; his father was a member of the militant Irgun in British Palestine, and Emanuel himself served as a civilian volunteer in Israel during the Persian Gulf War. He accompanied Obama to a meeting with the AIPAC executive board after endorsing him in early June.

The pick would also be fitting if for no other reason than to continue the West Wing parallels that so many have seen in this election. Emanuel was reportedly the inspiration for the character of Josh Lyman, President Bartlet's Deputy Chief of Staff. For those who followed the series to its conclusion, Josh Lyman leaves the White House to run the presidential campaign of Matt Santos, a character inspired in part by Barack Obama. When Santos wins the election against the older, white maverick Republican Senator from a western state, he makes Lyman his Chief of Staff. And now the circle is complete.

UPDATE: Ezra Klein has more.

UPDATE II: Michael Crowley at TNR raises the question of why this is being played out so publicly in the press. I've been wondering the same thing. Emanuel should either take the job or not; going on television to ponder taking the job is ridiculous.

Hillary Clinton

Hillary ClintonHillary Clinton's role in this campaign was... complex. My initial support for Barack Obama was in some ways a reaction to the "coronation" of her candidacy, and I was very frustrated with her during the primary campaign, often venting this frustration by putting cash in the Obama campaign coffers.

It is clear to me now, however, that the extended primary was very positive for the Democratic Party. It energized Democrats in states that are often ignored, and forced the Obama campaign to build an infrastructure in those states that they were then able to transition straight into the general election. I'm thinking especially of North Carolina and Indiana, which look like they'll go blue by the narrowest of margins. I have no doubt that had Hillary Clinton dropped out before those primaries, they would still be red states.

Now that is a process argument as to why we should no longer be mad that Hillary stayed in the race so long. It is also important to recognize that Hillary Clinton is a tremendous asset to the Democratic Party and to this country. Once she conceded the nomination, and thus her likeliest shot at the presidency, she made a serious commitment to getting Barack Obama into the White House. Kevin Drum says it well:

She ran in one of the toughest Democratic primaries ever, against one of the party's most talented politicians in recent memory, and she took a lot of abuse during that primary -- some of it deserved, most of it not. But in the end, despite what must have been a bitter and searing loss, she campaigned tirelessly and wholeheartedly for the man who beat her. This is something that a lot of people doubted she'd do, and frankly, we all owe her some recognition and gratitude for her role in tonight's victory.

I have no doubt we are going to be seeing some tremendous things from her. In his speech last night, President-elect Obama said he would be reaching out to Senator McCain for his leadership in the days ahead. That's nice, but that's certainly not the first phone call he should make when looking for some Senate leadership on the issues that count. With Senator Kennedy's health and age forcing him to the , there is a real opportunity for Senator Clinton to emerge as the new leader of progressive ideas in that august chamber.

UPDATE: Karen Tumulty at Time has a story on what the future holds for Senator Clinton.

Unwritten Books about Election 2008

David Axelrod & Barack ObamaAlready I am excited at the thought of a couple really good books that I am sure will be written about the historic election we have just concluded.

The first would focus on the Obama campaign, how he went from state senator to President in four years, how he defeated the two most powerful brands in American politics to get there, and how he was able to do it with such little drama. As President-elect Obama said last night, with a touch of hyperbole, this was:

[T]he best campaign team ever assembled in the history of politics.

On second thoughts, maybe that isn't hyperbole. After all, these folks managed to take a first-term African-American Senator with the middle name Hussein to the White House. The inside story of this campaign, when it is finally told, will be an instant purchase for me.

Lieberman, Salter, McCain, DavisAnother must-read, for other reasons, will be the dissection of just what happened in the McCain campaign. Contrary to current GOP spin, the economy was not the sole factor dooming the McCain campaign. Certainly it didn't make things easier, as the incumbent party is always punished in tough times. But it was McCain's reaction to the crisis, his lurching around in contrast to Obama's steady hand, that was more damaging. And the VP pick.... oh my. We've already got a taste of what's to come, from Robert Draper's lengthy essay from a couple weeks back. But if that sort of dirt was being dished even before the election, just imagine what's to come. We've already got these new tidbits from Newsweek:

McCain himself rarely spoke to Palin during the campaign, and aides kept him in the dark about the details of her spending on clothes because they were sure he would be offended. Palin asked to speak along with McCain at his Arizona concession speech Tuesday night, but campaign strategist Steve Schmidt vetoed the request.

Some have said it looked like Palin tried to move to the mic after McCain finished last night, only to be mic-blocked by an aide. We'll have to look for video of that one. Another bit on one of Palin's notorious rogue moments:

Palin launched her attack on Obama's association with William Ayers, the former Weather Underground bomber, before the campaign had finalized a plan to raise the issue. McCain's advisers were working on a strategy that they hoped to unveil the following week, but McCain had not signed off on it, and top adviser Mark Salter was resisting.

I'm sure one of the post-mortem talking points on the fringe right will be that the McCain campaign mistakenly restrained Palin from going after Obama as hard as she wanted, thus knee-capping themselves. I have a feeling this narrative will be met by quite a bit of resistance by the McCain camp. Remember, Steve Schmidt was brought in to win. Mark Salter has been there all along. It was Salter, no doubt, who wrote the conciliatory speech last night, and it will be he who leads McCain's rehabilitation, including, if necessary, exposing Palin for what she really is.

UPDATE: While we wait for these books to be written, check out the first three (of seven) articles in Newsweek's behind-the-scenes look at the campaign: "How He Did It," "Back From the Dead," and "The Long Siege." Great stuff here, all written by Evan Thomas (whose biography of RFK is excellent).

Blues States Getting Bluer

2004 ElectionOf course the sexy part of President-Elect Obama's victory was seeing so many red states from 2000 and/or 2004 turn blue. He could have won with just Iowa, New Mexico and Colorado or Virginia, but that wouldn't have been nearly so sweet. It is, in fact, difficult to say which formerly red state was the most gratifying to see shaded blue.

Florida turning blue is cathartic for all Democrats who suffered through the 2000 debacle. Ohio for similar, if less visceral reasons, and to emphasize just how stupid that Joe-the-Plumber nonsense was. Virginia has personal resonance for me, having lived there through the 2004 election, when it was a major disappointment. North Carolina, if the results hold, offers a further beachhead for Democratic inroads in the South. Iowa is a welcome consolidation of the blue Midwest. Colorado, New Mexico and Nevada reflect the new blue power in the West; as those states gain electoral votes, the map is going to look uglier and uglier for Republicans. I think Arizona would be blue if its native son had not been on the Republican ticket. And some will be most satisfied by the unlikely victory in Indiana, a state that went to George Bush by 21% just four years ago.

That's a lot of states that have turned blue since 2004. But take a moment and look at just how blue some of them turned. It looks like the popular vote victory will be around 6%, which is D+8 from 2004. Note how many of these formerly red states went even further blue than that. That's the really remarkable story here, and shows why this was a) a blowout and b) a sign of bad things for Republicans in 2012:

Florida
2008: Obama 51 - McCain 48
2004: Bush 52 - Kerry 47
Difference: D+7

Ohio
2008: Obama 51 - McCain 47
2004: Bush 51 - Kerry 49
Difference: D+6

Virginia
2008: Obama 52 - McCain 47
2004: Bush 54 - Kerry 46
Difference: D+13

North Carolina
2008: Obama 50 - McCain 50
2004: Bush 56 - Kerry 44
Difference: D+12

Iowa
2008: Obama 54 - McCain 45
2004: Bush 50 - Kerry 49
Difference: D+10

New Mexico
2008: Obama 57 - McCain 42
2004: Bush 50 - Kerry 49
Difference: D+16

Colorado
2008: Obama 53 - McCain 46
2004: Bush 52 - Kerry 47
Difference: D+12

Nevada
2008: Obama 55 - McCain 43
2004: Bush 50 - Kerry 48
Difference: D+14

Indiana
2008: Obama 50 - McCain 49
2004: Bush 60 - Kerry 39
Difference: D+22

That's not the whole story, however. There are also a number of states that were light blue in 2004 that are now a very dark blue. In other words, these are states that Bush actually contested, and which McCain might have hoped to pick off. They are going to look awfully frightening for Republicans come 2012. Note how most also ran at or ahead of the D+8 national trend. The most obvious, and most satisfying, is Pennsylvania:

Pennsylvania
2008: Obama 55 - McCain 44
2004: Kerry 51 - Bush 48
Difference: D+8

New Hampshire
2008: Obama 55 - McCain 44
2004: Kerry 50 - Bush 49
Difference: D+10

Wisconsin
2008: Obama 56 - McCain 43
2004: Kerry 50 - Bush 49
Difference: D+12

Minnesota
2008: Obama 54 - McCain 44
2004: Kerry 51 - Bush 48
Difference: D+7

Michigan
2008: Obama 57 - McCain 41
2004: Kerry 51 - Bush 48
Difference: D+13

There are other examples, but these are the most important. What the Democrats have now, and may very well have for the next decade, are three solid electoral blocs: the Northeast, the Midwest, and the West. Consolidating gains made in Virginia and North Carolina could leave the Republicans in the wilderness even longer than they expect.

President-Elect Obama

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Election Day

This is a day I have been waiting for months. It is the greatest secular ceremony that our society performs. Every four years, we collectively make a choice about what direction our nation should take. It is always a beautiful thing.

This is the first year I've lived in a state that was actually contested. I voted for Al Gore in Massachusetts in 2000. I voted for John Kerry in Virginia in 2004. Barack Obama does not need Georgia's electoral votes to win, but I did my part to get them for him this morning.

My wife and I woke up at 6am, anticipating long lines at the polls based on the news about recent days at the early voting locations. After a quick stop at Starbucks for some fuel, we walked the six blocks or so to our polling location, All Saints' Episcopal Church. While I can't say I am 100% pleased with the notion of voting at a church, this location was wonderfully free of any partisan signs or campaigning. The polls opened at 7am, and we arrived about a quarter after. It took a long time to find the end of the line.

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The line wrapped all the way down the block, around the corner, to the end of the other block. While we waited, we made pleasant conversation with the gentleman in front of us, who happened to share my wife's alma mater, and enjoyed the pleasant if cool November morning. After about 35 minutes, we had made it to the corner.

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There is a deceiving "vote here" sign visible in that photo. While it points to the correct building, it comes about 50 yards before the actual entrance to the church. Another hour later, and we made it inside the building. From there, it took about fifteen minutes to make it to the table where we were issued our electronic key cards to activate the touchscreen voting machine. There were eleven "pages" of ballots (judges are elected in Georgia, and there were a number of ballot referendums) on the machine. I cycled through them all, then went back to the first line, the election for the next President of the United States, and cast the proudest vote of my life.

Now I will spend the rest of the day making pies, to distract myself.