Deepish Thought

Atlantic blogger Megan McCardle doesn’t think much of the the ongoing discussion about whether or not the next President should meet with controversial foreign leaders.

To date, the current administration has been pretty resolute in its policy of not talking to people it doesn’t like.  This could reasonably be described as the angry two-year-old approach to foreign policy.

Unsurprisingly, the lack of invitations to the White House has not had a huge impact on the policies of Iran, Venezuela or North Korea.

To be fair, the President’s lack of involvement has little to do with the administration’s difficulties in dealing with the country’s various foreign antagonists.  The fact is, getting unfriendly regimes to do what you want is largely a question of leverage.  For various reasons, the US doesn’t have any.

Going further, the administration’s no talking policy isn’t quite as pigheadedly stupid as it sounds.  A meeting with the President can be a significant carrot.  It’s the kind of thing that you might reasonably want to hold back until the final stages of negotiation.

More importantly high level talks with dictatorships can be dangerous for the President.  In any high profile meeting the administration tends to be under enormous pressure to show results.  Dictators, who don’t have answer to voters or the press, have no such concern.   The playing field is thus not level, which can easily result in the good guys making concessions that they probably shouldn’t.

However, this is a concern that can easily be addressed.  We have tended to get very hung up on whether or not the President should speak to problematic foreign leaders.  What really matters is what the President would say. Obama could largely eliminate concerns about his engagement policy by addressing the issue along the following lines:

“Would I speak with President Ahmadinejad?  Certainly.  Communicating with foreign leaders is part of the President’s job.  Would President Ahmadinejad enjoy the conversation?  Probably not.  I would tell him in no uncertain terms that his country is on a dangerous path that could lead to conflict with the United States.

We should have no illusions that my words alone will change the policies of the Iranian government.  However high level engagement is one of the tools we have at our disposal.  I will not neglect any opportunity to communicate our views and apply pressure to the Iranian regime.  This is one of those times we need a full court press.”

Harvard economist Greg Mankiw supports the “plague on both your houses” view of Congress’ role in the Freddie & Fannie fiasco.

Events are moving so quickly that this post is already two massive bailouts behind the times. However, the quasi-nationalization of Freddie and Fannie is such a significant event in the history of finance and government that it bares belated comment.

One of the (many) great tragedies of the Bush administration is that its reputation for untrustworthiness, incompetence, and blatant political hackery became so overpowering that people stopped listening. So on the rare occasions when the administration displayed the foresight so conspicuously lacking in Iraq and New Orleans, nobody listened.

The Bush administration repeatedly warned that Freddie Mac and Fannie May were dangers to the stability of the financial system. Congress, determined to show that the administration doesn’t have a monopoly on self righteous, arrogant bungling, and always mindful of the flow of campaign contributions, chose not to listen. The result is that taxpayers are on the hook for Freddie and Fannie’s losses.

Congress has (shamefully) shown itself to be not so very different from the administration. When it came to Freddie and Fannie, Congress chose to believe what was personally and politically convenient, regardless of the evidence. Faced with a crisis, Congress reached for the quick fix solution of having Freddie and Fannie expand their operations, without considering the risk. Ignoring outside advice they took their cue from lobbyists who wanted to use the housing crisis to help Freddie and Fannie escape the restrictions imposed as a result of their respective accounting scandals.

Finally, Congress appears to be dead set on learning nothing from the experience. The political groundwork is already being laid for the resurrection of Fannie and Freddie. No doubt bigger, more political and even less transparent than before.

Perhaps the most depressing aspect of this whole sad saga is that it really deosn’t seem to matter much who controls Congress.  Between 2002 and 2006 the Bush administration and the Republican Congress put on a master class in bad government. Sadly, it appears from their recent performance that congressional Democrats were taking notes.

It appears that poor loser Boeing is going to appeal the Air Force’s decision to buy Northrop Grumman/Airbus tankers on the grounds that choosing the winner based on which proposal gave the best value for taxpayer money was patently unfair.

Whatever spurious reasons Boeing actually comes up with for challenging the contract, the real issue is whether the Air Force can weather the political storm it’s decision has created. The key concerns are jobs, the award of a lucrative contract to a foreign company and national security. All these concerns will receive plenty of air time, but none have any real foundation.

Perhaps the most ridiculous claim to date is that the decision will somehow cost thousands of American jobs. Both Boeing and Airbus have global supply chains with a high degree of overlap. US suppliers, who are barely keeping up with with demand for parts for civilian planes, may see a small decline in future orders from Boeing, which will likely be offset by increased orders from Airbus.

Boeing itself will have to shut down it’s 767 production line sooner than it might like. However this will only be a pause for retooling. The company currently has an epic backlog of civilian aircraft orders, which means that there is precisely zero chance of layoffs.

You could argue that Boeing might have hired more people in the future had it won. Of course these hypothetical jobs are balanced by the actual hiring Northrop Grumman will be doing in Alabama, where the Airbus tankers are to be assembled.

The national preference and national security concerns are only marginally less idiotic. EADS (the corporate parent of Airbus) is a joint French/German company. France and Germany are of course close NATO allies, who already have access to any military secrets likely to be involved in what is essentially a flying fuel truck.

If anything, the Airbus tanker represents a major opportunity to strengthen trans-Atlantic military co-operation. Committing to a partly European tanker is an obviously friendly gesture, which may will be reciprocated in the form of better access to the European market for US military suppliers. Over the long run, a reduction in irrational national preference biases in arms purchases would increase supplier competition and decrease costs for all NATO countries. In addition, it would likely result in greater commonality of equipment, and thus greater interoperability, amongst NATO forces.

Perhaps the most important aspect of the whole situation is that Air Force has demonstrated the ability to make a purchasing decision based solely on military considerations. This will, assuming the decision is allowed to stand, have a very salubrious effect on future acquisition contests. If suppliers get the idea that their efforts are best spent on engineering rather than lobbying, the result will be a military that is both better equipped and much less expensive.

The only real losers will be Boeing shareholders. Right from the start, Boeing’s tanker proposal was basically a scam designed to keep the obsolete 767 in production. This would have been a fabulous deal for Boeing. The development and tooling costs for the 767 were paid off long ago, so every additional 767 sold would have had a very pleasing effect on the bottom line.

While I’m sure Boeing stockholders are rooting for the Airbus deal to be overturned, such an outcome would be a travesty of justice and a gross insult to common sense. Still, this is an election year, so anything is possible.

In contrast to the previous post, from time to time data emerges that illustrates how wealthy New Zealand is in ways that are not really captured by GDP. The fascinating book Microtrends contains the following, very encouraging, observation:

“And who gets the most sleep? New Zealanders and Australians, where 28 and 31 percent, respectively, get more than nine hours of sleep a night.”

By contrast, the average American apparently sleeps less than seven hours a night, while four out of ten Japanese sleep less than six hours a night. Inspired by this evidence of cultural superiority I think I will take a relaxing mid-morning nap.

One of the things that has always struck me about the US is what a spectacularly wealthy country it is. Or alternatively, how pathetically poor New Zealand is by comparison. Occasionally data crops up that depressingly reinforces this impression.

The cunning cartographers responsible for this map of the US have replaced the name of each state with the name of a country that generates similar GDP.

Embarrassingly, it turns out that New Zealand’s GDP roughly approximates that of Washington DC (population 580,000, area 177 square km).

In a revolutionary move your faithful correspondent is going to actually offer some evidence of his competence as a pundit. While the value of his opinions on politics, culture, economics and business are still in doubt, his brilliance in the arena of American Football can no longer be denied. In the Peter King Challenge your favorite blogger proved better than Sports Illustrated correspondent Peter King at predicting the results of NFL games.

Your inestimable reporter is so pleased with this unprecedented triumph that he has begun to refer to himself in the third person. The inevitable fall to earth is anticipated shortly.

The Iowa caucuses are done and results have confirmed that the nomination races are just about as wide open as they have ever been. This being the case, it seems like now would be a good time to consider how some interested observers who will not be voting in the remaining primaries would like the races to turn out.

If I were a Republican party strategist my choices for the Democratic nominee would be:

(1) John Edwards
(2) Hillary Clinton
(3) Barack Obama

Edwards is running to the left of the Democratic party, which puts him well to the left of the average general election voter. He also made his millions suing doctors, which would be a gift for Republican speech writers in an election where health care is shaping up to be a big issue.

Hillary of course would carry all the accumulated baggage from the Clinton administration. Republican campaigners would relish the opportunity to dust off all those old files and nothing would fire up the Republican base more than the prospect of a second Clinton presidency.

By contrast, Obama has a short political record, which makes inexperience the only real angle Republicans can attack. In addition, his likable personality and the historic nature of his candidacy could potentially generate enormous crossover appeal.

If I were a Democratic party strategist my choices for the Republican nominee would be:

(1) Rudi Giuliani
(2) Fred Thompson
(3) Mike Huckabee
(4) Mitt Romney
(5) John McCain

Giuliani has an erratic and abrasive personality, is widely disliked by socially conservative Republicans, who might well stay home rather than vote for him, and has a cupboard chock full of skeletons. If there is any Republican candidate more or less guaranteed to melt down it’s Rudi Giuliani.

Thompson is a notoriously lazy actor with an unimpressive political track record. He has loser written all over him (of course there is good chance he won’t be in the race much longer).

Huckabee is beloved by evangelical christians, but doesn’t really impress anyone else. However there is some danger for Democrats in a Huckabee candidacy. He does have a very likable personality and espouses populist positions that could generate some crossover appeal.

Romney is another candidate strongly disliked by parts of the Republican base. However he has deserved reputation for competence, was a Republican governor in a Democratic state, which indicates considerable ability to appeal to independents and moderate Democrats, and he has a bucket load of cash.

McCain would be a real threat in the general election. He was a vocal critic of the Bush administration, so it is difficult to hold him responsible for it’s mistakes. Generally speaking McCain has genuine crossover appeal, a reputation for taking principled stands and a done everything resume. There is also the military record to contend with. In addition, while he might not be trusted by social conservatives, they don’t despise him in they way they do pro-choice Giuliani. The only real knock on him as a general election candidate is that he’s about 2,000 years old.

Today Justice Minister Annette King tabled 150 amendments to the government’s highly controversial Electoral Finance Bill.  A couple of these amendments “urge the Electoral Commission, which deals with parties, and the Chief Electoral Officer, who deals with individuals, to use their discretion to not refer ‘inconsequential’ cases to the police for prosecution.”

This is a very slick trick.  Instead of putting in all the tiresome effort required to put together a coherent piece of legislation the government is proposing to ram through a thoroughly hashed up law that people will then be invited to ignore.

Were this simply a case of governmental ineptitude it might be forgivable, however the this particular legislative boondoggle may well have a chilling effect on future political campaigns.  What constitutes a ‘consequential’  breech is going be a highly subjective judgment with serious political implications.  Would anyone be surprised if, in the midst of future elections, the government demonstrates extraordinary enthusiasm for investigating possibly ‘consequential’ breeches on the part of the opposition?

The current scandal of the week in the NFL is the “poor sportsmanship” shown by New England Patriots when they continued to play aggressively against the Washington Redskins long after the result of the game was beyond doubt (a Google news search on “running up the score” this afternoon yielded over 600 hits).

Sportsmanship aside, there are practical reasons for taking your foot off the gas in these situations. Taking key players out of the game eliminates the risk of injury to those players and also allows their backups to gain valuable game experience. While this is a perfectly valid argument, there are several equally practical considerations that may have led Bill Bellicheck to keep the starters on:

1. It is difficult for the starters to prepare for a 60 minute grudge match against a good team, like for example the Colts (their next opponent), sitting on the sideline. As bad as the Redskins proved to be, there is no substitute for game time.
2. It appears that Bellicheck is trying to foster a play full throttle for 60 minutes mentality, which is just the kind of mindset that you would want a team with superbowl aspirations to have.
3. Absolutely walloping the Redskins, who were considered to have a solid defense, is the kind of thing that puts fear in the minds of the Patriots future opposition and gives them an advantage every time they step on the field.
4. It was a home game and the home fans did not buy their expensive tickets to see the second string come on in the third quarter and run out the clock. They came to see Tom Brady score touchdowns, which is exactly what they got.

Considering the sportsmanship aspect, it seems incredible that playing hard play hard till the final whistle could possibly be considered incompatible with sporting values. This attitude is certainly not prevalent in other sports. In soccer it is considered insulting to the opposition to substitute in second string players regardless of the score. While in rugby, kicking for points (rather than attempting to score tries) while sitting on a big lead is liable to get a team vigorously booed.

From my own experience of being on the short end of sporting blowouts, there is nothing worse than a team that lets up on you. There is a particularly hollow feeling that comes from not being worthy of an opponent’s best effort and little to no satisfaction in consolation points scored against a team that isn’t really trying to stop you.

Regardless of what you believe to be sporting, calling the game early is not what fans pay to see and is definitely not what professional athletes are very well paid to do.