Crisis in the Agora and the Future of the US: Economy, Foreign Affairs, Domestic Policy, and Civitas

We in the United States are facing an existential crisis across many fronts that was created by neglect, willful ignorance and partisan self-interest over the last three decades. Yet we can address and solve these challenges with pragmatic, workable and affordable policies and good citizenship if we so choose. Demagoguery, of either the Right or the Left, will not help however. What is required is “Civitas” – or acting not just in your own interests but as a responsible contributor to the well-being of society as a whole. Which is also, in the long-run our own self-interest. In the cities of the ancient world each city had a central square where citizens came to meet, shop and trade. It was also where they held their public meetings and discussions and was the beating heart of their city-states. We are long past the time when the major issues of the day could be settled in a single public square but there are critical lessons that can be learned from those times. Starting by asking what did they need to function? First off peace and security – the existence of the city and the square had to be defended. Next, since the Agora was the economic engine of the city-state where craftsman met farmer met householder to exchange the product of one for the other, civil peace, justice and honest markets were required. That meant rules to govern the citizenries conduct among themselves and between them and visitors, police to enforce the rules and courts to adjudicate disputes. Third, the city, the square and the population had to live healthy and educated lives. Which meant things as simple and prosaic as sewers, garbage disposal and street sweepers. It also meant apprenticeships, training and education, road and bridge building, harbor construction and maintenance and a whole host of other public projects. Finally it required, most fundamentally, respect for each other, the rules and regulations, and belief in the legitimacy of the government who provided the institutions and decision-making that oversaw the health of the Agora. The Romans called the area surrounding a town subject to the rule of Roman Law the Civitas but the word came to mean more than that. It meant respect for, adherence to and support of those Laws as well as a duty to act in the public interest. In other words a healthy Agora is ultimately governed by Civitas. Now none of these ancient states were perfect by any means and there were lots of warts on these ideals. Socrates was put to death by his fellow citizens for daring to ask questions that challenged their shibboleths. A shibboleth being some sign or action by which members of a group could recognize one another but really meaning the idols they worshiped as measures of their specialness and entitlements to privilege. Rather than flee as his accusers and friends expected him to do Socrates chose suicide, out of respect for his fellow citizens and Civitas. Later Athenian arrogance and exploitation of the members of its naval empire led to the Peloponnesian Wars, which led to the loss of Greek independence and eventual conquest by the Persians, the Macedonians and the Romans. Ironic isn’t it that the peoples who died at Thermopylae and defeated the mightiest empire in the world in defense of their freedom eventually lost it to their own hubris…or lack of Civitas. This collection of blog posts and some related readings looks at the current situation of the US and examines each of the major areas of the Agora (Economy, Foreign Affairs, Domestic Affairs) and Public Values to assess

where we’re at, how current policies work and what they are likely to lead to and the challenges and barriers each face. In each section we try and lay out a framework and explain that particular topic by testing it against the framework as well as provide the URL address for the blog posting that provides extensive backup reading excerpts and suggestions. One consequence is that the arguments and conclusions we offer up are drawn from the best, most reasoned and reasonable and pragmatic sources and synthesized here. Nonetheless you may not find yourselves agreeing with much, if any of our arguments or conclusions. Which is perfectly fine, though admittedly disappointing. What we hope you take away, if nothing else, is a blueprint of the issues that are important and tools and frameworks for debating and understanding them. All too often the human animal is a rationalizing animal who has already decided the answers and looks for the data to distort to support pre-existing conclusions. What we have tried to do is lay out the means and information for starting with the world as it is and ways to get to where we want to go that work. Agree or not you will end up deciding, deliberately or by default, what kind of world we’ll all live in. We hope you choose to make a constructive contribution, one with Civitas. The great paradox of the Agora is that we are all better off when we are each better off, and we are each better off when we are all better off. That has been the underpinning of the development of the US throughout history, and in fact of all great societies. The problem is in figuring how to accomplish our goals.

Table of Contents
Existential Crisis in the Agora I: Economy, Policy and US Strategic Outlook Existential Crisis Around the Agora II: New World Stories Existential Crisis OF the Agora III: Fixing Things Around Home Existential Crisis IV: the Agora, Civitas, Values and Futures Peace in the Public Square: the 100 Days and Re-emergence of Civitas 3 5 8 11 21

Existential Crisis in the Agora I: Economy, Policy and US Strategic Outlook
http://llinlithgow.com/PtW/2009/05/existential_crisis_in_the_agor.html If the news over the last few months hasn'made it crystal clear to you last t Friday' bankruptcy filing by Chrysler, with GM likely to soon follow, should s make it clear that we are in the eye of the biggest economic storms in over sixty years. We' facing fundamental changes in the structure, nature and re direction of the US economy, which will define the limits of policy and prosperity for decades to come. The good news is that the Administration is doing extremely well in putting the right policies in place quickly and implementing them about as well as could be expected. The bad news is two-fold. First we' got a long way to go before this is over and we reach a growing ve economy again. The worse news is that longer-term growth prospects are extremely poor and will be potentially lower than at any time in the postwar period. Now that' big picture stuff but presumably you' all heard s ve about growing income inequality, businesses and industries disappearing forever and all the rest of the symptoms of underlying structural flaws that have been accumulating since 1980. If we' like to return to a modicum of d growth we need to get the economy and society on a new footing. The good news is that not only does the administration realize this but it' already putting in place the necessary programs and investments that stand a s reasonable chance of making it happen. We' heard no better summary of this existential crisis than this Rose ve interview with Lionel Barber, editor of the Financial Times. Memorize it and use it as a checklist! We just put up a major survey of the structure of the US economy which is complementary background reading for how the economy works. In fact we' almost say mandatory: It can be found here: Real Data Interlude I: Econd ecostructure (GDP to Trade) Economic Alternatives: Stagnation vs Re-structure We' been covering the economic news for quite a ve while here, going back to early ' at least so we won' 08 t dive into the details of the cycle, policies and politics as well as budgets. You can check back to skim over all that in the archive and/or we' listed some of the prior ve postings in the readings excerpts (NB: you' also find a ll very extensive collection on the current situation, the long-term prospects for low growth, specific policy areas (Taxes, Regulation, Housing & Autos) and fundamental shifts in strategic policy which represent the biggest shift since 1980. Judging by the most recent poll results (discussed in the last post:Peace in the Public Square: the 100 Days and Re-emergence of Civitas (Updates) ) the public trusts the President and the Administration but still hasn'grasped the implications and is particularly angry about t the on-going rescue of the Finance Industry. While the Administration has clearly laid out it' policies and how the s pieces all work together the explanations are also still lacking something. We' going to take a shot at framing re the discussion using three variations on a conceptual chart to try and read you into the context. No guarantees but let' see what we can do. s

The chart shows the possible alternative timepaths that the economy could end up following - in fact the likely ones. The red line is a sustained "Great Recession" which would be as close to disaster as we' ever want. d Fortunately fast and heavy action by this and the preceding Administration and the Fed have likely avoided that, barring some catastrophe. The real danger, and a real one because of the structural flaws, is that we get trapped into a long-term L-shaped recovery like Japan since the 1990s. The best available alternative is a gradual Ushaped recovery which is what current policy is aimed at creating, unfortunately followed by a very weak recovery with low growth, very low new job creation and a continued deterioration in incomes, well-being and the overall health of society. To get onto the path (green line) of a higher, sustained and self-reinforcing growth path requires that those structural flaws be fixed. From Crisis to Recovery: Phases, Policies and Risks For even a weak recovery a lot of things have to go right and at each major cusp point there will be serious downside risks that could abort the recovery. In a normal economic cycle growth in consumer spending causes business to invest in new capital equipment and hire more workers. The post Tech Bust saw the lowest post-war job creating economy because growth prospects were so poor. In fact the only thing that held up the economy at all was the Housing ATM; without it we' d have the kind of recovery we' now facing again. When both re consumer and business spending are low there' NO source of s demand but government spending. Once the pump gets turning over after the priming it hopefully becomes self-sustaining, organic if you will. Given the cyclic and structural weaknesses we' facing that will require continued government spending for several re years or we' fall back into recession. To get to the higher growth path and make it self-sustaining we need a ll more efficient economy where infrastructure is not a bottleneck, where we aren'vulnerable to surges in energy t prices and healthcare isn'an exponentiating drain on business and the rest of society. More importantly it also t requires new jobs to be created which result from innovation in technology and business that lead to new industries. Finally the potential new jobs have to have the right kind of workers - a real set of inter-connected and complex dependencies. But stop me when you think you haven'heard the rationale for new policy strategies in t Education, Energy and Healthcare as vital to our long-term well-being. We' been deferring these issues - which ve we' known what to do about for at least 30 years. (Oil and Other System Shocks: Beyond Iraq & Georgia, 911 ve Memorial: Fix the Problem Don'Repeat the Crash") Now we no longer have that luxury. t Long-term Economic Policy: From Stimulus to Investment One of the knocks on current policy - actually a twofer - is that we' going to pile up a bunch of debt and trigger a major re inflation. Both are basically unfounded nonsense that don' t understand how things will work out for several reasons. First, on debt, the faster the economy grows the easier it will be to repay any debts and reduce the burden. Investing in that growth is a sensible decision. Government spending that subsidizes consumption in the long-run would create problems but government spending that puts the economy on a new base will grow the economy as a whole. Associated with that is that over the last two decades businesses and consumers have run up huge debts of their own but they are changing to more rational, conservative and prudent savers which will reduce the overall debt levels of society, leave plenty of cash flow for funding constructive investments and put us on that healthier path. As for inflation that will be a risk only if the massive injections of funds by the Fed are left in the system as the economy recovers. Right now the amount of sloshing funds (call it Liquidity) is enormously less than the talking heads tell you because it' not s

moving as fast. Think of it this way Liquidity = Money Supply (M) times the speed of circulation (Velocity). Right now M has gone up hugely but V has dropped even more; it' take years to repair the damages done to the ll financial system but when we get there it' be just as easy for the Fed to withdraw the excess funds as it was to ll inject them. Let' hope we manage to get to where that' a problem. s s The real danger is that too many obstreperous orthodoxies will force something premature and do to our economy what the ECB has done to Europe in the downturn; making a bad situation worse. BtW - we got out of the Great Depression because of WW2 spending but didn'have to because the New Deal policies were working until they t were aborted in the mid-30s and re-started the Depression. Let' settle for once-burned thrice-shy please! s Whether we manage to do the right things gets back to the question of can we get the economy on a selfsustaining feedback loop! The short-term emergency spending is designed to arrest a collapse and won'do that, neither will the t short/intermediate-term stimulus spending. Even the current scheduled follow-on spending is likely to lead to an anemic recovery (which is btw the long-term forecast of the Fed, the CBO, OECD and the IMF; sounds like a consensus to me). A prosperous future that' sustainable comes about only from the strategic policies in the key s areas. And one that makes a better life for the next generation comes about only from fundamental change. THAT' the challenges we' facing! s re

Existential Crisis Around the Agora II: New World Stories
http://llinlithgow.com/PtW/2009/05/existential_crisis_around_the.html The point we implied in the last post (Existential Crisis in the Agora I: Economy, Policy and US Strategic Outlook (Addons)) was that we' facing major, multi-part crisis and re challenges which must address key questions that are at cusp points that will define our futures. Last post we focused on the strategic economic situation and pointed back to almost the entire collection of related postings. But more than the US faces these challenges on a shared basis - it' a world wide s phenomenon. Key questions include: 1) how will we organize our economies and the socio-political structures that support them, 2) what institutional and governance frameworks will each country build to sustain itself and become a member of the international community and 3) how will we re-structure the architecture of the international system by evolving the old to something more inclusive, adaptive and connected ? Last time the primary focus was on the first question, now we' going to re focus on the next two by looking at selected individual country stories and some shared challenges. The last post on International Affairs (Brave New World: the Emerging Balance, Pluralities, & Non-zero Sums) summarized a series and inventoried all the prior analysis and surveys as well as wrapped up the most recent series with a checklist that blueprints the things that are happening, and need to happen, for a satisfactory resolution. The central question we' wrestling with is whether or not a plurality of the world' nations realize that this is a re s non-zero sum world where they are each better off with a stable and prosperous world order and act to support it' continued emergence. Or whether they pursue the zero-sum, opportunistic strategies that are the historical s norm. Fortunately more seem inclined to be collaborative than not, despite some opportunism - which is natural and inescapable. But on balance the early signs are encouraging. And make no mistake, these changes are well underway, having already brought more people farther out of poverty than at any time in history. Contemplate the

accompanying graphic, which traces out population and income/capita over the last 200 years and notice how key players are crossing the knee of the development curve. The chart was built using Hans Rosling' Gapminder s World tool to look at the US, Russia, China and India. But besides just looking watch these two videos from Hans that take a quick dive into these changes: 200 Years That Changed the World and Yes they can! - which' give ll you a perspective on bit the changes are and how fast they' happening. re Refreshing the Framework: Governance and the International Architecture Back in the 1830' a Frenchman named Alexis s de Tocqueville visited the US and wrote one of the most astute assessments of American character, institutions and outlooks every conceived. One of the points he made was that in a 100 years or less the two dominant world powers would be the US and Russia. And in a way he got it dead on. Why ? Because he was extrapolating potentials based on resources, trends, character and outlook. This was at a time when the US had a population of 13 million people and a vast, unpopulated continent that was a wilderness to deal with. Prescient indeed. The population, resources, wealth, power and economic influence of the other three "powers" were all out of proportion. So what happened ? Our explanation in the prior Foreign Affairs post was R X P X H X C X I = Power. Or in words the power and wealth of a country is determined not just by raw resources but by Resources, Population to develop them, Human Capital, Economic Capital and Institutions. Tiny little Holland defeated the world' mightiest empire s in the 1500-1600' because it was more efficient and effective than Spain. In other words because of it' s s institutions and governance. As societies become more complex and sophisticated the need for inclusive institutions that act for the betterment of the whole society, not just the privileged power holders. There is a tradeoff between complexity, form of government and the amount of resources that is effective and legitimate for government to collect. When a government is exploitative, that is it extracts more than it gives back, and/or the form is mis-aligned with the history and culture it will collapse. The second major institutional challenge we must deal with is getting each of these governments to be a proactive, constructive and relatively non-opportunistic stakeholder in the world system. One can never expect any nation to act against it' own strategic s interests but you can reasonably expect them to trade-off intelligently between national advantage and world effectiveness from which they benefit in a non-zero world. To the extent that more and more governments see it as in their interests to support the emergence of a constructive international institutional framework the world will establish the kind of foundation needed to keep things on an even keel. And meet the major

challenges of today as well the bigger ones we know are coming tomorrow. Right now the early evidence is that we are collectively opting to move toward and onto the green path toward a more stable and prosperous world. Certainly measured by post-WW2 norms a lot of progress is being made. And measured by prior historical experience there is literally no comparison - we are living thru a fundemantal re-think unique in human history. The emergence of a new, pluralistic international framework evolved from the old and adapting to the new. Interesting times indeed ! Stories From Around the World In the readings after the break you' find ll sections updating you on current US responses, selected country stories from key players, a list of some key emerging issues and a final section of the future of Capitalism. The graphic is the 10-point checklist we developed to summarize what we think is going on at the end of the last series of foreign affairs postings. As we go thru the readings we' like to keep it in mind as measuring d indicator along with the two concepts of the "brave new world" framework.
A. US Update -

... starts with a really fascinating CSpan video of David Kilcullen discussing his conclusions about what we learned in Iraq (Kilcullen was one of the principal architects), how it applies in Afghanistan and Pakistan and broader lessons. Key ones include the fact that military force is a small part of it and the real requirement is for nation-building. There are three other CSpan clips of Clinton or Obama. They' included because a) the enthusiastic re reception of the State, CIA and military for them is indicative of the kind of relationship they' already got, as well as for details on ve our approaches. But, in a few short days, we' already under-taken major new initiatives and established a level of interest and cooperation on a ve worldwide basis we haven'seen in two decades. t
B. Country Stories 1. 2. 3. 4. 5. 6. Japan is struggline mightily to start addressing the re-factoring of it' economy. Something it' put off for two decades s s but with the most severe downturn in a long time can no longer avoid. Europe - as the result of the crisis blind free-market capitalism is loosing a lot of credibility in Europe and the European countries are re-thinking their approaches. At the same time there' been a distinct shift rightward in s politics. Eastern Europe was a major beneficiary of globalization, the EU and the eastward march of NATO but a lot of that is coming under threat. Russia is beginning to face the fact that in twenty years it' gone nowhere, the recent commodity and energy boom s helped but the necessary investments in futures wasn'made and malfeasant government and corruption are t disrupting attempts to adapt. India on the other hand is doing reasonably well while... China has had a severe drop but relative to the rest of the world is doing very well, has responded quickly and forcefully and is in a position to become the US' major partner in crafting this new world. s

7.

Islamic World - is large, complex and convoluted. But nonetheless it' becoming clearer that major steps are s underway to start dealing with and adapting to the modern world. This won'be easy but it' both encouraging and in t s all our best interests.

C. Key Future Challenges 1. 2. The mainstream media has finally noticed that CyberWar is a rapidly escalating challenge though folks like StrategPage have been covering it for years (as have you - just check your spam) The US coasted thru the ' and let it' foreign affairs, defense and security and international development 90s s capabilities wither away with the result that we got caught flat-footed. There' been a major re-direction and res development of Security and obviously of Defense capabilities. Now it' beginning to happen on civilian side of the s house. Nonetheless America, as we' pointed out before, is not in terminal decline. In fact it' reamin the major military, ve ll economic and political power for decades. As a result it must continue to develop and provide leadership. At the same it must also encourage (hence the section above) the growing roles and responsibilities of serious stakeholders.

3.

D. Future of Capitalism

We spent untold millions of lives and billions of $ testing the question of what was the best way to organize the economic and socio-political structure of our societies in the 20thC. In a way the modern version of the European Wars of Religion - literally. The result was pretty clear - there is no more effective organizing principle than market-supporting economies. The problem was in that in settling that issue we went to far and forget that markets themselves must live in institutional frameworks to function. Now the worldwide debate, which will determine the worldwide fate, is on just what form the future of Capitalism will take and how best to govern it. IOHO this is one of the 4/5 most critical questions facing us.

Existential Crisis OF the Agora III: Fixing Things Around Home
http://llinlithgow.com/PtW/2009/05/existential_crisis_of_the_agor.html The last two posts were, in some senses, wrap-ups on the economic and international situations; they were couched in terms of the Agora - the public square and how it functions. A major purpose of the Agora is free exchange, that is trade and the economy, and the public square exists within the context of the relationships among states, hence the international part. Now we want to shift our attention to the third major aspect of the Agora - the behavior and rest of the lives of the citizens. In other words what goes on in the Agora besides "just" being a marketplace, or what is going on with Domestic Policy. Now that' a topic we' covered, in some depth before for s ve it' own sake, as well as in the context of the role of key s policies for the health of the economy (changing the game with regard to Education, Healthcare and Energy are sine qua nons of reaching a new plateau of healthy economic growth that' sustainable for example). But we have serious problems with these policies that will take s serious people to solve them.

Why You Care: Long-running Structural Problems Necessarily we all focus on our own day to day concerns and affairs, hopefully with a weather eye to how the winds and currents are blowing. Letting today' emergencies s swamp all concern for the weather leaves us extremely vulnerable to boiled frog syndrome. Ignoring them entirely and taking a comfortable state of affairs for granted (that' s not a lukewarm bath it the soup water warming up slowly) guarantees it. As we' hopefully made clear in the prior ve two posts we are crossing major cusp points in the economy and in the world that will shape the next decades as much as anything that' happened in the last s six. One way or another they cannot be ignored - our only choice is cope or drift. Let' descend into wonkishness for a minute and consider s another of the major structural trends, and remember this is just one of several major structural challenges we face. The top part shows the cumulative growth in the economy, consumption, investment and saving since 1948. The key thing to note is that when credit-driven consumption led to the relative demise of savings; in other words when immediate gratification became the dominant driver of our socionomic health. At the end of the day growth is jobs, income, prosperity and the well-being of our descendants. You can see the debt vs consumption link more clearly in the second sub-chart while the third comes full-circle back to growth, investment and savings. Growth has been gradually slowing down for many years until it went cliffdiving recently (NB: as badly as it' done in those six s decades!). If we want to create a prosperous new future we need to return to being a nation of ants, not of grasshoppers. Domestic Policy and Future Prosperities Our first post on the health of the Agora took a fairly deep dive on long-term economic prospects, what it' take from ll an economic policy point of view and what it' take for ll those policies to work in terms of re-factoring crucial domestic policies in Education, Energy and Healthcare. In other words our future prosperity is utterly dependent on getting them right and making them work. There' a giant s meme that' set into our politico-cultural DNA that s government should keep hands off on everything, which is something of a natural reaction to the failed social engineering policies of the ' 60s. It also is neither realistic nor reflects the vital roles that are mandatory for government to play if we are to have a healthy society; it' s also appallingly ignorant of history. Each of these topics require not just a post but books to properly dissect and,

unfortunately we' still feeling our way thru on some key ones. re Nonetheless government has a traditional role to play in defense and public safety as well as the creation and maintenance of civil society - which we' known about since the First Cities and continue to work on. A lot of ve folks think free markets came down from on high thru the immaculate conception, but in fact they are a recent invention in human history and require their own institutional infrastructure. Government has also played a role in public investment that' vital to the health of any society from roads and bridges to China' Great Canal. For s s example modern capital markets were created by the Dutch and adopted and grown by the English. The entire notion of reliable financial markets (ahem) and public finance owes a great deal to England, Issac Newton, David Hume and others. The US government has played a vital historical role in jump-shifting US economic growth in investing in all our modes of transportation. And did you know that the entirety of our post-WW2 prosperity, over which we' now haggling, was based on federal investment in pre-war inventions that turned then into major new re products, industries and jobs? Markets don'work well for these sorts of good and are also prone to other systemic (that is self-caused) t breakdowns as well as market failures. The classic example is pollution where no one company can afford to clean itself up if everyone doesn' On a macro-scale modern economies are vulnerable to Black Swan t. breakdowns where the entire system implodes. We experienced one during the Great Depression and are in the middle of another, whose worst potential consequences appear to have been avoided. Another example is the role of publicly funded education - without the widespread adoption of free public high-schools the industrialization of our economy wouldn'have worked very well. And without extensive public health programs the urbanization t that drove it was also infeasible. At the end of the day government is indeed vital - the question is finding the proper balances between public, private and civic policies and the mechanisms to implement them. Getting It Right: Policy Mechanism Many of the public initiatives listed in our shopping list are things that we' been ve working away at for centuries, even millenia and we' gotten to the point where we ve understand what needs to be done and how to do it pretty well. The area where we thought government could do everything led to a rather hubristic set of social engineering policies in the sixties that didn'go at all well t however. And led to the Reagan Backlash as the limits of government intervention were reached and tested beyond workability. Now we' gone to far in the ve other direction, with obvious penalties. Friedrich Hayek arrived at the telling criticism of socialism and communism - if you attempted to determine policy across a large and complex society the efforts at data collection, decision-making, implementation, monitoring, control and enforcement quickly swamp your coordination capabilities and led to a rigid and ossified public policy. That' also s what, IOHO at least, made the social engineering projects of the ' unworkable. 60s Yet the painful burns we' acquired by refusing to do what we' known needs to be done in Education, ve ve Healthcare and Energy, where we' literally been talking about fixes for three decades or more, makes clear that ve the ARE NOT SELF-CORRECTING problems. Which gets us to the fundamental challenge of implementation. In other words we need to set national policy congruent with our long-term goals and find the appropriate mechanisms to get people moving in the right direction voluntarily. Creating such incentives for individual decision-making is how markets work, when they work. Here we know they do not. What may be required remember we' still feeling our way thru these new challenges - is national standards and funding combined with re localized implementation and customization. If you look at the Big Three programs rolling out in D.C. you' find ll

that this is indeed the path they are taking. We' be picking up on that thesis in the future with detailed dives into ll each. In the meantime we suggest you put to bed the "socialism" meme that partisan politics attempted to exploit to win points. It's Time For Every Person Horatio Lord Nelson' final general signal to his fleet s at Trafalgar, which saved England and the modern world as we know it by their victory, was that "England expects every man to do his duty". Since we started with an Aaron Sorkin allusion we' end with ll one as well. Here Ainsley Hayes, newly appointed to the White House Office of the Counsel is challenged on her motives.
"Is it so hard to believe in this day and age that some one would roll up their sleeves, set aside partisanship and ask, what can I do?

What' your answer ? Whatever it might be let' hope s s the people in D.C., or at least the White House, agree with Miss Ainsley. Clearly many do not and put partisan victory ahead of duty to country. And duty to country is NOT blind - it doesn'require blind acquiescence. t It requires coming up with the best answers of which one is capable and making one' best efforts to shape public s policy. It then requires doing one' best to make the decisions reached effective and successful - not continuing a s constant search for advantage at the expense of the country.

Existential Crisis IV: the Agora, Civitas, Values and Futures
http://llinlithgow.com/PtW/2009/05/existential_crisis_iv_the_agor.html An existential crisis is one that threatens the existence of the entity in questions - the Hudson plane crash was that for the passengers, WW2 and the Cold War were such for the US and the world order as know and love it. By those standards the current multi-part crisii aren'quite existential but in each t domain (Economic, Foreign Policy and Domestic) we are faced with disruptive threats to the structure of the system as it exists. In other words if/when/as we get thru all this the nature and structure of the US and World economies will be radically different than what' evolved over the last 3-5 decades, the s world system is being re-architected as we watch and key domestic policy issues (Education, Healthcare, Energy) that have been allowed to metastasize into systemic, disruptive threats by willful neglect have all reached cusp points. As existential as we care to get. Yet, by and large, in a few weeks a lot has been done to address them. The prior three posts were wrap-up and summary assessments for each of the three and were preceded by series exploring each. With the release of the new Star Trek movie everybody and their siblings have been using it to re-visit history, the culture wars and current events. Newsweek for example gifted us with this Star Wars vs Trek

poster, which is both amusing and rings true (or truish). Jon Meachem, the managing editor, was on Charlie Rose the other night and gave his impressions of Barry after the first 100 Days. [A conversation with Jon Meacham] Pretty inside baseball stuff and it misses some of the key points, which are critically important. Not least of which is not just the speed, force, magnitude and scope/number of major policy initiatives being put into place, nor how well the process is being managed or even - so far - how decently they are being implemented. What Meachem and the rest of the beltway observers are missing is the processes that are being used to apply rigor, logic, experience, multiple points of view and consensus building to arrive at pragmatic, workable and implementable solutions. Revisiting the Policy Blueprint This particular graphic evolved to try and compress and represent the fundamental themes we face as a nation. Its genesis begins back in 2004 and it was put together almost three years ago. The point was that these were and are the changes in philosophy, policy and values needed to meet the existential challenges we faced... and still face. If you skim back over the prior readings you' find that each one is ll being tackled, being tackled with a strategic policy that meets the test of being the best thinking that has evolved over the last three decades and is, therefore, the "right" thing to do. The readings provide current updates coupled with structural graphics illustrating each area in all of the major policy areas, politics and value development. While each deserves it' own series s consider two key examples - mileage standards and Healthcare. The US auto industry has fought standards for years because it' profit-dynamics s favored large vehicles while it gave ground to the Japanese. What' been needed is a set of national standards s that reduce consumption, decrease pollution and avoid the expense of a single company trying to invest in multiple standards from many states. This legislation was put together over several months and is a consensus among the stakeholders, especially including the manufacturers, on how to proceed collectively. Similarly the biggest momentum for HC Reform since 1992 has been built up and, as shown by recent industry payors and other players, it too represents a coalescing consensus that' been carefully built up in the public s square. As opposed to being crafted by a small team in a backroom and forced down the throats of the polity, of Congress and the stakeholders. On all these fronts we have the best chances we' had to do something ve reasonable and constructive we' had in two generations. If they fail it won'be because the best we can think ve t isn'being put on the table. Nor will it be because the right steps to building political support and putting workable t implementation are not being put in place. It'll be because narrow interests can't help themselves or because we haven't yet come up with the right mechanisms for implementation.

Making It So: Policy From Vision to Selling It To get a new idea from vision to implementation there are several components that have to be put in place. First is the overall Vision - what principles, values and directions are suited to the time, which direction do we need to head, how do we judge? Next is Leadership - or character, integrity, explanations (Voice) and delivery (making it happen; approach). Finally there are the wonkish specifics - what, where, when, why and how? Especially mechanism! Over the course of the last two years Barry started out focused on the Vision Thing while John-boy had some old principles lying around but was mainly focused on specific policies. As the election evolved Barry got more and more into details and strategies (his acceptance speech, his victory speech, his inaugural and every subsequent major policy speech could almost be a single book as they are consistent from beginning to end). Meanwhile JB retreated more and more to vituperative specifics based on old philosophies and shibboleths that were and are out-dated. Though he redeemed himself with a noble and public-spirited concession speech, as fine as anyone could make. His party on the other hand is turning out to be a bunch of angry, old white mean, I mean men, who are getting angrier and angrier about narrower and narrower concerns. Concerned that they are not only losing on each issue but are proving to be wrong, which is more important. The Agora and Civitas:
Tolerance, Civility, Open-Mindedness & Public Responsibility

Having a different point of view is all well and good but it should come with two critical characteristics. A willingness to display tolerance for alternative perspectives and to reason together in resolving disagreements. And a commitment to abiding by the decisions reached in the public square - the Agora. At the end of the day we all benefit from a functioning public square and it is healthy if and only if we all exhibit civility, manners, tolerance and a commitment to its health. Each of the last two administrations, in their own ways, contributed to the disruption of the Agora. Clinton by chasing after the latest polls and swinging with the wind, looking not for the right thing to do but the thing that would win. Bush by trying to force what he and his people "knew" was right and govern

not for the good of the majority but trying to find the 50 + .01% that would allow them to force a decision. If you actually listen to President Obama' Notre Dame speech he' not insisting that he' right. Rather he asks for open s s s minds and a willingness to tackle collectively difficult and divisive issues. And live with the collective decision. So, at the end of the day, the pundits are missing the two most important things that are happening. 1) Each major policy decision is being arrived at by open dispute among the involved parties until the issues and alternatives are clear when a decision is arrived at. 2) The Administration is treating the public and it' opponents as adults who are open to discussing complex s issues with difficult answers. And who are also willing to govern themselves with Civitas - that is with a sense of public responsibility. MUCH more importantly we can slowly see the tenor of the debates change and evolve more toward a sense of Civitas - tolerance, open-mindedness and a willingness to roll up our sleeves.

READINGS for Part IV
Economy and Policy
It’s No Time to Stop This Train CONTRARY to what you may have heard from some doomsayers, 2009 is not 1930 redux. What we must guard against, instead, is 2010 or 2011 becoming another 1936. Realistically, there is little danger that the economy is heading toward a repeat performance of the Great Depression — when real gross domestic product in the United States declined 27 percent and unemployment soared to 25 percent. What we have is bad enough: our worst recession since the 1930s. But unless our leaders behave unbelievably foolishly, we will not repeat the tragic slide into the abyss of 1930 to 1933 — for two main reasons. That’s the good news. But even if another depression is next to impossible, there is still the danger that next year, or the year after, might turn into 1936. Let me explain. From its bottom in 1933 to 1936, the G.D.P. climbed spectacularly (albeit from a very low base), averaging gains of almost 11 percent a year. But then, both the Fed and the administration of Franklin D. Roosevelt reversed course. In the summer of 1936, the Fed looked at the large volume of excess reserves piled up in the banking system, concluded that this mountain of liquidity could be fodder for future inflation, and began to withdraw it. This tightening of monetary policy continued into 1937, in a weak economy that was ill-prepared for it. About the same time, President Roosevelt looked at what seemed to be enormous federal budget deficits, concluded that it was time to put the nation’s fiscal house in order and started raising taxes and reducing spending. This tightening of fiscal policy transformed the federal budget from a deficit of 3.8 percent of G.D.P. in 1936 to a surplus of 0.2 percent of G.D.P. in 1937 — a swing of four percentage points in a single year. (Today, a swing that large would be almost $600 billion.) Thus, both monetary and fiscal policies did an abrupt about-face in 1936 and 1937, and the consequences were as predictable as they were tragic. The United States economy, which had been rapidly climbing out of the cellar from 1933 to 1936, was kicked rudely down the stairs again, and America experienced the so-called recession within the depression. Real G.D.P. contracted 3.4 percent from 1937 to 1938; the total G.D.P. decline during the recession, which lasted from mid-1937 to mid-1938, was even larger. The moral of the story should be clear: Prematurely changing fiscal and monetary policies — from stepping hard on the accelerator to slamming on the brake — can be hazardous to the economy’s health. Wow, we’ve learned a lot since the ’30s, right? Well, maybe not. For the echoes of 1936 are being heard right now, even before the current recession hits bottom. Condemned to Repeat? Romer has a right to optimism. Managed adroitly, crashes need not take a catastrophic toll. A year or two after the 1929 panic on Wall Street, there was no inevitability about calamity, as Philip Zelikow of the University of Virginia recalled recently. There were signs of an economic rebound; Germany' democratic government was holding s together; Japan remained a responsible player in the international system. It took the policy errors of the early 1930s to change all that. Those errors need not be repeated now. What errors? In 1930, the United States imposed the notorious

Smoot-Hawley tariff, setting up a pattern of retaliation that exacerbated the downturn and splintered the world. This time, by contrast, there has been surprisingly little backlash against open trade. In 1931, the U.S. Federal Reserve hiked interest rates aggressively. This time the Fed, led by another scholarly expert on the 1930s, is forcing down interest rates by printing money. In 1932, the U.S. government tightened fiscal policy. Again, the lesson of that error has been absorbed aggressively -- witness the enormous fiscal stimulus. But there is one less comforting part of the 1930s comparison. The international tensions of the 1930s were not just about trade; they were also about exchange rates. If the United States, Germany, Japan and China all aim to boost exports, we are in for trouble. It is impossible for all the big economies to improve their trade positions simultaneously; a jockeying for advantage, through the manipulation of exchange rates or through other measures, is certainly conceivable. Just as in the Depression, we have no rules for governing the disputes that may arise out of such conflict. It is too early to congratulate the scholar-statesmen for banishing all whiff of 1930s-style tensions. The Great Right North Reports last week that the recession is draining Social Security and Medicare funds were just one more reminder that the United States needs to fix its finances. For inspiration, why not look to Canada? Long derided by American conservatives as "socialist" and praised by the left for its generous government spending, Canada is casting off those stereotypes. Over the past few years, while U.S. politicians presided over huge increases in spending and debt, the Canadian government tightened its belt, slashed tax rates and balanced budgets. Consider these trends: Too often in the United States, Democrats reject cuts in taxes and spending because they consider them Republican causes. Yet in Canada, center-left governments implemented many of the reforms that made these impressive numbers possible. Perhaps we have something to learn from those "socialists" to the north. Obama's Auto Plan Is Capitalism at Work Contrary to what many pundits claim, the Obama administration' approach to the s auto industry is not anticapitalist. Without a drastic restructuring neither Chrysler nor GM would have a chance for long-term success. Not only would thousands of workers lose their jobs, but the government would lose tens of billions of taxpayers' dollars. So rather than simply writing a check to the auto industry -- the policy of the previous administration -- the Obama team is focused on fundamentally restructuring these two businesses. So far, the auto task force has done an admirable job of refusing to rubber stamp the industry' proposals. It' used rigorous analysis to make tough decisions. These decisions include s s "right sizing" industry capacity by cutting many union and white-collar jobs and closing numerous manufacturing plants and dealerships; making the unions accept lower wages and benefits so that these companies can compete; and cutting the debt crushing these companies by forcing many of the stakeholders -- workers, retirees and creditors (including the government) -to take equity rather than cash for their obligations. And yet the Obama administration has been strongly criticized for not adequately respecting the rights of creditors. That charge is false. Not a single creditor right has been altered during this process. The banks had the same choice they always face in similar situations: accept a modification in their loans or take over the struggling companies. A substantial majority of the banks initially accepted the government' offer as fair. They s recognized that Chrysler could not survive without enormous additional funding and realized that the value they would receive in liquidation would likely be less than what the government offered. They understood that the billions of dollars Chrysler desperately needed wouldn'materialize without a dramatic restructuring. All debtholders have now agreed to the t government' plan.The creditors are also reasonable and sophisticated capitalists who clearly recognized the risks they were s taking when they purchased these Chrysler loans. Many probably bought these loans at prices below the 29 cents on the dollar that the government is offering since this debt often traded below that level. While these creditors were hopeful that the Obama administration might bless them with an enormous windfall -- a reasonable thought given the actions of the last administration -- they certainly knew that these loans were incredibly risky and that Chrysler survived only by the grace of taxpayer financing.

Foreign Affairs
Counterinsurgency Is King Counterinsurgency doctrine is on the verge of becoming an unquestioned orthodoxy, a far-reaching remedy for America' security challenges. But this would s be a serious mistake. Not all future wars will involve insurgencies. Not even all internal conflicts in unstable states -- which can feature civil wars, resource battles or simple lawlessness -- include insurgencies. Yet COIN is the new coin of the realm, often considered the inevitable approach to fighting instability in foreign lands. Now the Pentagon is shifting its budget and seeking to "rebalance" U.S. military power in order to institutionalize counterinsurgency doctrine. Clearly some of these capabilities are needed, but like many useful concepts that gain

currency in Washington, counterinsurgency risks being taken too far, distracting us from other threats, challenges and strategic debates.

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McChrystal Represents a New Direction at the Pentagon and in Afghanistan LEADERSHIP: New Boss In Afghanistan Adm. Mike Mullen, JCS Chair, Future of Global Engagement CIA Director Leon Panetta on Global Challenges A conversation with David Ignatius

The Best Guide for Gitmo In 2001, Singapore' authorities had no idea that they had a terrorist problem. But after the Sept. s 11 attacks, the government was tipped off that a cell of Jemaah Islamiyah, the Southeast Asian militant group with links to alQaeda, was planning attacks across the city-state. In raids in late 2001 and 2002, more than 30 members of the terrorist outfit were arrested; more arrests followed. So, while the United States was filling its detention center at Guantanamo with foreign fighters, Singapore began to house its own population of Muslim extremists in its jails. Singapore' strict law-and-order s government, which famously enforced a ban on chewing gum, may seem an unlikely candidate for believing terrorists could be reformed. But Singapore -- often referred to as "the little red dot" in Southeast Asia' Islamic sea -- is in a precarious position, s and its government felt compelled to take action that would not only disrupt the terrorist group' operations, but also counter its s ideological appeal. "We are what we are out of necessity," says Singapore' Foreign Minister George Yeo. "[Islamic s extremism] is a long-term problem, and it' not going to go away in our lifetime. The only way you can combat it is to have an s immune system." Singaporean officials said they decided to use Islamic clerics because they were convinced that only religious leaders could "de-program" the detainees. "Once you have taken an oath of God, it will take another man of God to undo it," a senior security official told me. Governing Party in India Scores Victory The governing coalition led by the Indian National Congress sailed to a surprisingly decisive victory in India’s grueling parliamentary elections, vaulting Manmohan Singh, a soft-spoken economic reformer, to a second term as prime minister, and sweeping away the prospect of political instability in the world’s most populous democracy. Mr. Singh, 77, called the victory “a massive mandate” on Saturday afternoon, hours after the opposition Bharatiya Janata Party conceded defeat. The victory, in what is apparently a Congress landslide, signals the possibility of a stable and strong government in the face of stiff challenges: a sharp slowdown in economic growth, abiding poverty and instability in the region. It also sidelines a slew of small, regional party bosses whose influence had steadily grown in Indian national politics, and potentially cuts down the power of Communists who had blocked economic reforms for most of Mr. Singh’s first five-year term. The Congress Party’s showing vindicates the prime minister’s efforts to deepen a strategic partnership with the United States at a time when the Obama administration is deeply concerned about security in the region, chiefly in Pakistan and Afghanistan. A stronger government will also be better able to tackle issues of crucial importance to Washington, from economic reforms to climate change, although there is not necessarily agreement with the Americans on how to proceed.

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Victorious Coalition in India Now Choosing Allies Vote in India Reshapes Landscape Singh's `Game Changer' Election Victory May Unlock India's Economic Growth

The Six Issues That Divide Bibi from Barack President Barack Obama welcomes Prime Minister Benjamin Netanyahu to the White House on Monday, at a moment when the White House and the Israeli leadership are undeniably at odds over the path to Middle East peace. While the Obama Administration remains steadfastly committed to Israel' security, its ideas on how to achieve that security differ markedly from those of the hawkish s Netanyahu government. As Obama moves to revive the stalled Middle East peace process, Monday' meeting s has been widely predicted to be a tense affair, but that may be overstating the drama. Netanyahu, like any Israeli Prime Minister, has an overwhelming incentive to get along with Israel' single most important ally; Obama, for his s part, needs to fashion a peace process that produces results, for which he requires Netanyahu' cooperation. So s Monday' encounter won'be a showdown as much as the opening exchange of a difficult conversation that could s t continue for months. Herewith, a short guide to the issues that divide Obama and Netanyahu: A Two-State Solution? The idea of creating an independent Palestinian state alongside Israel on the territory it occupied in 1967 is the overwhelming international consensus, accepted even - according to opinion polls - by a majority of Israelis Iran First? Netanyahu will argue that Washington' goals are best achieved if it gives priority to curbing s Iran' nuclear and geopolitical ambitions before separating Israel from the Palestinians. What's the Hurry? s Netanyahu will argue that whether the outcome is two states or something less, this is not the moment to try to conclude the peace process. Freeze the Settlements Obama will tell Netanyahu that stability is undermined, potentially fatally, by Israel' continued expansion of its settlements in the West Bank, and by its moves to extend s

control over East Jerusalem, captured by Israel in the 1967 war but claimed by the Palestinians as their future capital. Unfreeze Gaza The Gaza war earlier this year forced the Israeli-Palestinian issue to the top of the Obama Administration' agenda, and although the fighting has ended, no formal cease-fire has been agreed, and the s Israeli blockade - and Palestinian political infighting - has prevented any of the $4.5 billion pledged for reconstruction by international donors from actually reaching the territory. How to Handle Iran While supporting Obama' diplomatic efforts, Israel wants to see time limits imposed to prevent Iran playing for time while s increasing its nuclear capabilities. • • •
Israel's Netanyahu: Taking a Turn Toward Pragmatism? A Dangerous Deadlock Persists in Gaza Can Obama Change the Game on Middle East Peace?

Ready for a Fight: Russia's New Security Policy Diminishing supplies of oil and natural gas will push countries into violent competition, the Kremlin predicted in a long-awaited national security strategy paper released this week. The document foresees these struggles playing out in the Arctic as well as the Middle East, the Barents Sea, the Caspian Sea and Central Asia — and states that Russia is prepared to fight for its share of the world' s resources. Although it vividly outlines the worsened relations between Russia and the West, the anti-Western rhetoric is tempered with acknowledgment of the beginning of rapprochement with the Obama Administration. But while the new paper maintains the belligerent stance displayed last summer and admits that Russia, one of the world' largest exporters of oil and gas, is willing to use military force to protect and even expand its reserve of s resources, the tone has been softened. Although the paper focuses on foreign military policy, there is also a significant domestic socioeconomic element that was missing from the 2000 version. The document itself was supposed to be released in March, but was delayed possibly for this very reason. Media speculation abounds that the hold-up was due to the Obama Administration' less aggressive policy towards Russia, which forced a rethink s on the tone of the document. However, observers believe that specific socioeconomic benchmarks such as poverty, food costs and education were removed from the document — which had been in draft form for over a year — as a result of the global financial crisis. • •
Alexei Bayer: Floundering in Self-Delusion A System Under Stress

Domestic Policy Credit-Card Fees Curbed consumers with more information on their debts. Starting in February 2010, a Senate bill passed Tuesday would ban practices such as charging consumers to pay by phone and sudden surges in interest rates. Payments above the minimum due would be applied to balances with the highest interest rates. Information once relegated to tiny print must be made clearer, and consumers will soon be told how long it would take to pay off a balance if they pay only the minimum due. The credit-card overhaul is set to become the first major legislative change to financial regulation outside housing since the emergency bank bailout enacted last fall, and it' not the last expected this year. Tuesday' s s 90-5 vote followed pressure from the White House on card issuers to improve fairness and transparency for the three-fourths of U.S. households that use credit cards. The measure is likely to pass the House in the coming days, and President Barack Obama is expected to

sign it into law next week. For consumers, the legislation aims to change habits -- perhaps leading them to make fewer big-ticket purchases with credit cards -- by clarifying the cost of using card debt. Several provisions in the legislation are geared toward forcing consumers to recognize how much they' paying in interest. Card issuers re would also have to provide information on consumer-counseling and debt-management services. Consumers also wouldn'face a retroactive interest-rate increase on existing balances unless payments are 60 days overdue. t Even after that rate increase, a consumer could get the old rate reinstated by paying on time for six months. The legislation bans a practice known as double-cycle billing, in which a late-paying consumer is assessed interest on a prior month' balance that had been paid in full, in addition to the late balance. Issuers also will have to send s bills 21 days before the due date and provide at least 45 days' notice before changing any significant terms on a card. •
WSJ Vidclip on Credit Card Reform

Game-Changer for Health Costs? The announcement that health-care industry groups plan to voluntarily shave $2 trillion off the rate of increase in health spending over the next 10 years reminded me of the voluntary effort launched with similar fanfare in the Carter administration. Then, industry groups fended off Jimmy Carter' efforts to aggressively control the costs of s hospital care by offering to do it themselves. Their efforts helped slow the rate of increase in health spending for a few years -and helped defeat Carter' plan -- but then the rate of increase in costs spiked again. Historically, efforts to control growth in s health costs have sometimes achieved successes, but higher rates of increases have always returned. Meanwhile, health costs continue to consume a bigger and bigger share of our economy. Ever since the Carter presidency the voluntary effort has been viewed in health policy circles as something of a farce -- a president diverted by an industry trying to fend off costcontainment actions it views as more harmful to its bottom line. Today, though, the industry is at the table in an unprecedented way, and its efforts are not an attempt to block action on health reform legislation. But this private effort -- which President Obama has been clear is compatible with, but not a replacement for, Congress' challenge of designing and paying for health s reform legislation -- underscores how the prospect of broader action by a president and Congress, including specific ideas industry groups don'like, such as a public plan option, can motivate industry to do more than it otherwise would. The good t news is that the health-care industry has publicly recognized that the rate of growth in health spending is unsustainable and needs to be reduced (even if the announced goals do not prove fully achievable, either because national associations cannot deliver their members or expected savings do not materialize). Such recognition will provide cover for other efforts to reduce health spending. And it' possible that some of the ideas the industry groups propose, or similar ones, will emerge in health s reform legislation on Capitol Hill. The bigger test will come once health reform legislation is written and details about how it will be financed become clear. Will the industry remain supportive or will it revert to form and protect its bottom line? At that point, the debate will enter a critical phase -- and if the industry is still at the table then, health care' legendary interest groups will s really have changed their ways, and prospects for reform will be vastly improved.

Automakers, Obama announce mileage, pollution plan President Barack Obama wants drivers to go farther on a gallon of gas and cause less damage to the environment — and be willing to pick up the tab. Obama on Tuesday planned to announce the first-ever national emissions limits for cars and trucks, as well as require a 35.5 miles per gallon standard. Consumers should expect to pay an extra $1,300 per vehicle by the time the plan is complete in 2016. Carol Browner, the White House energy and climate director, publicly confirmed the new initiative in appearances on morning network news shows Tuesday, calling it a "truly historic" occasion and saying that such tougher environmental standards have been "long overdue." The plan also would effectively end a feud between automakers and statehouses over emission standards — with the states coming out on top but the automakers getting the single national standard they' been seeking and more time to make the changes. ve Obama' plan couples for the first time pollution reduction from vehicle tailpipes with increased efficiency on the s road. It would save 1.8 billion barrels of oil through 2016 and would be the environmental equivalent to taking 177 million cars off the road, senior administration officials said Monday night. New vehicles would be 30 percent cleaner and more fuel-efficient by the end of the program, according to officials familiar with the administration' s discussions. The officials also spoke on condition of anonymity because the formal announcement had not been made. The plan still must clear regulatory hurdles at the Environmental Protection Agency and the Transportation Department. Automakers appear to be in support.Administration officials said consumers were going to pay an extra $700 for mileage standards that had already been approved. The comprehensive Obama plan would add another $600 to the price of a vehicle, a senior administration official said. The extra miles would come at roughly a 5 percent increase each year. By the time the plan takes full effect, at the end of 2016, new vehicles would cost an extra $1,300. That official said the cost would be recovered through savings at the pump for consumers who choose a standard 60-month car loan and if gas prices follow government projections. "We worked very, very closely with all the car companies, with California, with the environmental groups," Browner said Tuesday. "This is

truly historic. It is long overdue. ... Congress stood in the way of tougher fuel standards." "Historically, the program was a fleet average," said Browner, who headed the EPA during the Clinton administration. "What we' doing re here is proposing standards for every category of car." Browner said the administration worked closely with the industry on this issue. "What they told us over and over again," she said, "was they wanted to make more fuelefficient, they wanted to make cleaner cars and what they needed was the government to give them predictability and certainty so that they could make the investments toward cleaner cars."
Preventing Another Camp Liberty How has the military's focus on mental health changed since your time in Iraq? There' s such an increased awareness, not just in the medical communities of the military but in the line -- in the warriors themselves. The leadership is really behind the idea that what we' talking about here is an injury, not an illness. That these are normal re people in an extraordinary circumstance, under extreme pressure and possibly exposed to trauma, and that those people can be injured. Just like those same normal, healthy people could have turned their ankle. Those injuries require both rest and proper treatment. But they can and will heal and actually have the potential to be better, more resilient. How so? Just like if you were to go through [physical therapy] for a badly sprained ankle -- your ankle might get stronger. And by taking away the idea of mental illness, we' trying to reduce the stigma. There' a huge, huge stigma in the military culture about seeking mental re s health care and treatment, and that' a culture that' longstanding, so it' quite a battle against it. s s s

Politics, Partisans and Civitas
Obama makes quiet play for GOP aid President Barack Obama’s first date with House Republicans didn’t end so well: He made a high-profile trip to the Capitol to ask for their help with his economic stimulus plan, and they said no — unanimously, twice. Now Obama is trying again — more quietly and with a smaller group of moderate Republicans who might be more willing to say yes. The goal: Try to get at least some Republicans to back big-ticket items such as Obama’s health care plan, but avoid the public spectacle of being rejected a second time around. Rather than have the president, his motorcade and his press pool trek to Capitol Hill, White House chief of staff Rahm Emanuel last week invited about a dozen or so moderate House Republicans to meet with him in a small outdoor courtyard just off the West Wing. According to members who attended, Emanuel acknowledged that even moderate Republicans might not support Obama’s health care plan in the end, but he said that the White House wanted to maintain an open dialogue throughout the process — and that some of their ideas might be included. The president stopped by for about 15 minutes. He listened to the Republicans’ ideas for overhauling the health care system and agreed to review an energy bill authored, in part, by Rep. Tim Murphy (R-Pa.). At least one Republican walked away impressed. “I believe they’re making an honest and overt effort to deal with Republicans,” said Delaware Rep. Mike Castle. “The White House is genuinely interested in resolvable issues.” Administration officials, including Emanuel, thought their efforts at bipartisanship during the stimulus debate at times got in the way of promoting the substance of the bill. Receiving such little Republican support on the stimulus was something of a wake-up call, and Obama’s advisers have since made clear that they’d prefer to move their priorities on health care and energy than win praise from processobsessed Beltway types for being inclusive of the minority.

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Dick Cheney is Mr. Republican Dick Cheney is 68, white and bitter. He is the Republican Party today. The Republican Party has no serious wing other than the Cheney wing. The moderate wing of the Republican Party is distinguished by the fact that it does not exist, and yet it is still shrinking. The Country Is Evolving; Will the GOP? Analysis: Obama moving to center on some issues

At Notre Dame, Obama Calls for Civil Tone in Abortion Debate President Obama directly confronted America’s deep divide over abortion on Sunday as he appealed to partisans on each side to find ways to respect one another’s basic decency and even work together to reduce the number of unwanted pregnancies. As anti-abortion demonstrators protested outside and a few hecklers shouted inside, Mr. Obama used a commencement address at the University of Notre Dame to call for more “open hearts, open minds, fair-minded words” in a debate that has polarized the country for decades. The audience at this Roman Catholic institution cheered his message and drowned out protesters, some of whom called him a “baby killer.” “Maybe we won’t agree on abortion,” Mr. Obama told graduating students, relatives and professors, “but we can still agree that this heart-wrenching decision for any woman is not made casually. It has both moral and spiritual dimension. “So let us work together to reduce the number of women seeking abortions. Let’s reduce unintended pregnancies. Let’s make adoption more available. Let’s provide care and support for women who do carry their children to term.” The encounter was a rare foray into one of the most volatile areas of public life for Mr. Obama, who supports abortion rights but has sought to avoid becoming enmeshed in the issue. As recently as last week, aides said he would mention the controversy in his speech without dwelling on it. But ultimately, he decided to devote most of his address to bridging the chasm over abortion and other moral issues.

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President Obama’s Notre Dame Speech JK Rowling’s Harvard Commencement Speech, Part 2, Part 3 General Peter Pace at The Citadel Top 10 Commencement Speeches

Obama at Notre Dame For his part, Obama gave what may have been both the most radical and the most conservative speech of his presidency. Acknowledging the Roman Catholic Church' role in supporting his early s community organizing work, the president drew on the resources of Catholic social thought. It combines opposition to abortion with a sharp critique of economic injustice and thus doesn'squeeze into the round holes of t contemporary ideology. "Too many of us view life only through the lens of immediate self-interest and crass materialism," Obama declared. "The strong too often dominate the weak, and too many of those with wealth and with power find all manner of justification for their own privilege in the face of poverty and injustice." Yet his argument drew on very old ideas, notably original sin and the common good. Obama was as explicit in talking about his faith as George W. Bush ever was about his own but with distinctly different inflections and conclusions. The former president often emphasized the comfort and certainty he drew from his religious beliefs. Obama said that "the ultimate irony of faith is that it necessarily admits doubt." "This doubt should not push away our faith," Obama preached. "But it should humble us. It should temper our passions, cause us to be wary of too much selfrighteousness." It was a quietly pointed response to his critics. •
Who Is a Real Catholic?

Values and Behaviors
Kentucky Healthy Chicken? But fast food executives have also found ways to exploit consumer anxieties over nutrition, by introducing allegedly "healthy" menu options. These items serve two crucial functions. First, they attract a segment of the population that otherwise might never set foot in a fast food restaurant. My friend Billy, for instance, is able to convince his vegetarian wife to visit McDonald' because salads and yogurt parfaits are s on the menu. Second, these "healthy" options wind up allowing consumers to feel okay about frequenting what amount to dietary houses of sin. After all, the barrier to purchase when it comes to fast food isn' t cost, convenience or taste. It' guilt. And fast food s executives are well aware of this psychological dynamic. It' their job, basically, to draw customers s who want to gorge themselves but know that they shouldn' I myself have played this game plenty of t. times. If I get the Diet Coke and the side salad, I' ll have "earned" the large fries. What' more s remarkable is that the very presence of healthy items

on a fast food menu can induce consumers to feel better about ordering a high-fat alternative. A recent study of fast food eating habits revealed an effect known as "vicarious goal fulfillment." This means that the simple act of considering a healthy item makes people feel justified in ordering the high-fat option. Even more astonishing is the fact that the pattern is more pronounced among eaters who normally exhibit high levels of self-control. This may come as a revelation to academics, but I' d be willing to bet my last Whopper that the fast food brass has known about it for years. After all, their profit margins depend on an acute psychological understanding of their paying customers. McDonald' most recent quarterly earnings statement tells s the whole story. In these difficult times, they' seen profits climb due to increased sales of their core products, such as the ve 410-calorie Quarter Pounder, not their Garden Salads.

Eating Food That’s Better for You, Organic or Not

'A-Rod' And now when she reveals that Rodriguez is a vulgar cad who wipes his mouth with $100 bills, signals to opposing hitters what pitch is coming for the return favor that swells his personal statistics, and requires clubhouse attendants to have a toothbrush squirted with toothpaste waiting for him, presumably so that after games he can more efficiently resume his practice of listening to the tapes of broadcasters praising his play, you’ll be inclined to believe him capable of just about anything — including Ms. Roberts’s contention that Rodriguez began using the drugs as a gangly and mediocre high school shortstop. You may also suspect him of more recent transgressions. You cannot read a book like Ms. Roberts’s, or “American Icon,” the just-published investigation of the Faustian fall of the great pitcher Roger Clemens, without outrage at how shamefully complicit baseball’s leadership has been in the contamination of the game. Ms. Roberts’s depiction of Rodriguez’s agent, Scott Boras, as a greedy, vengeful manipulator in league with the feckless Players’ Association and a pliant commissioner’s office, to help ballplayers inflate their statistics, and so their attendance figures, and so their salaries, is the most devastating part of her book. It is a dismaying reminder that baseball continues to enable the tawdry likes of Rodriguez at deliberate cost to those who play it straight. Even today the game resists the Olympic standard of drug testing that would screen players for the freely abused human growth hormone. Ms. Roberts’s subtext — how glibly baseball’s power brokers have compromised their game and the long-term health of young athletes — makes you forgive all her breathless piling on.

Gilded Era Is Going, Going, Gone Fire-sale auctions of mansions, yachts, sports cars and other trappings of wealth have become increasingly common as the rich become less rich.

Peace in the Public Square: the 100 Days and Re-emergence of Civitas
Welcome to the "Brave New World", or as we like to call the land of reset. If you listened to the 100-day press conference we think the President did a decent job but not a great one, unlike his economic situation and policy review. Nonetheless, excepting the die-hard ideologues, this is a remarkable performance. And, in our judgment, an effort to find centrist, pragmatic and workable policies domestically, economically and internationally. In each of these areas thoughtful, informed, bold and potentially revolutionary policies have been put forth. An assessment put forth by a wide range of pundits (some of whom you' find in the readings). We' going to try and take ll re that apart a bit and look at what went on (though there' too much to review in s ANY detail), what some of the assessments are and, our typical schtick, what the context and consequences are and how things will play out structurally. Setting aside partisan posturings the three major criticisms that have been voiced (many by David Brooks initially and then picked up by others) are: 1) too much, to quick, 2) workability and execution (not in so many words but it is THE issue now that we' moving beyond ideological posturings) and 3) a radical re shift in the line between the public and private spheres. All of them are legitimate, raise serious concerns and need to be addressed. But the bottomline here is that we' seen a remarkable 100 Days where critical markers have been laid down that re set the tone, direction and strategies for most of the rest of the term and beyond. We are in fact engaged in an audacious reset at the most fundamental levels that will frame our outlook for decades. Perhaps most importantly we "Coach Carter" treating the voters like responsible adults and a slow shift in how they respond: from poll-

driven policy-faking to principle-based decisions that try to balance what' best with with what' feasible and s s saleable. Now it' time to execute, execute, execute. s A 100-Day Assessment: Brooks, et.al. In the readings you' find selected excerpts and URL links to some of the more ll thoughtful pundits but so far the doyen and dean of reasonably balanced commentary is Mr. Brooks. Who, despite being a moderate conservative and a Burckian who worries about disrupting complex socionomic systems and unintended consequences, has applauded many of the decisions. For example calling the new Afghanistan policy bold but the war winnable or describing the economics speech as stunningly good or being dazzled and amazed at the sheer managerial competence of the Administration and how much they' ve managed to get done on so many fronts. We strongly suggest you invest the 30 min. required in watching the interview and taking notes because he covers an immense amount of ground quickly but insightfully. Some of the those major points deserve long essays in response. On the workability question we' pursue some critical aspects later in ll policy focused posts but what Brooks and the others are missing is the repeated application of a systematic and systemic decision-solving methodology that seems to permeate each issue, gather the best people and ideas, pull them together, put a framework down, work out the details, start working the legislative process and selling to the voters. Review, revise, verify and extend as circumstances evolve. Policy, Politics, Lizard-brains and the Disruptive Opposition Let' get a little more analytical about some of s the things swirling around. The accompanying graphic is a little busy but instead of building it up we compress several key ideas so that you can see how they all work together. Policy and politics have at least three key dimensions that must be addressed to be effective: what' the right s policy, what constituencies does it impact and how do they react (the Political Spectrum) and how do you persuade sufficient support (the Mental Spectrum). Political interest combines the moderate and centrist leanings of the polity with the tendencies of party activists to retreat to the extremes. Selling a policy has to balance the depth and density of information with the appeals to the hindbrain where decisions are really made. Clinton sold to the polls and told us what we wanted to hear - he got away with it because the times were good. Bush II told us what he thought we ought to hear based on his own ideologies. Obama is telling us what we must hear and not sugar-coating it. We' see if the polity evolves itself enough to continue to respond constructively - so far there' more faith in the ll s President than in his policies. We first used this chart during the elections and have modified it to show how a centrist candidate (Barry) sold his intent while a wannabe centrist (McCain) retreated to the right and more and more appealed to the hindbrain. Now President Obama has gotten even more information-rich and is doing a

fabulous job explaining things. It' not clear he' selling them - which is in fact one of the two major weaknesses s s he' got so far. That' not a problem that goes away until more pudding is eaten for proof however. s s On the other hand the Rips are retreating faster and faster into pure hindbrain appeals and bad policies. It' all s very well and good to be "sincere" but right counts first and foremost and they' pushing shibboleths that were re appropriate in Reagan' day, had a positive impact for a while but are badly outdated and deeply flawed. But s instead of re-thinking themselves the True Believers are getting increasingly self-destructive. Too bad for them and ultimately for the country - a set of observations that roughly Brooks agrees with btw ! Ironically (cf. the readings, especially the assessment by Matt Miller) Obama' major initiatives in Healthcare, Education and s Energy are closer to a combination of a) what Bush tabled in several State of the Union speeches (on Energy for example what' emerging is pretty close to his 2001 National Energy Strategy) and b) what other moderate s Republicans have proposed over the last 20+ years. The Republicans, as opposed to the Rips, should be getting behind these instead of pursuing power and advantage at the cost of what' best for the country. s The Public Square: What Makes the Agora Work Any society consists of a private sphere where people conduct their lives and make a living, a public sphere where the society makes decisions for everyone and a civic sphere where culture, religion and values define the ecology of the private and public sphere. If you go to almost any city in the world you' find a public ll square which typically has shoppers strolling around, shops and commerce, public buildings and civic institutions (libraries, schools and churches for example). In Ancient Greece the called it the Agora where all the myriad facets of the life of the city-state came together into one organic whole. Have you ever stopped to wonder what makes the public square work? Like our mutual agreement that we have to have rules of the road so that we can operate our highways safely and efficiently we have to have rules that govern the Agora. Key among which is the agreement to abide by the rules, a recognition that they are necessary, tolerance for anybody who follows the rules to have the right to come to the square and be heard and a willingness to cooperate in it' creation, maintenance and safety. The public square has defined Civilization for millennia and, in s it' modern, complex and gigantic form, it still does. s We' spent the last two or more decades abusing the rules necessary for the long-term health of the public ve square and damaged both the private and civic spheres as a result. Largely thru the opportunistic pursuit of various interest groups of their own advantages and interests at the expense of the general health and well-being. Now the question is will we all be citizens together and act in our collective self-interest to return the square to health or not ? Changes in Attitude: Paco vs the Consumer This might be an odd sort of source to look at but Paco Underhill, who is one of the best consultants and strategists in the world when it comes to retail and consumer behavior, was interviewed on the Newshour last week. He had a lot to say that was "ostensibly" about change in consumer behavior. But his critical observations and insights were really about whether or not we can continue to sustain our old behaviors. This

economic crisis is forcing major and radical changes in shopping but Paco think the changes in attitudes are going to be permanent. We happen to agree. As he points out - we can no longer afford to consume beyond our means. More importantly, fundamentally and even philosophically, we don'need to. t Perhaps his most startling observation is that people need to learn, and are learning, that the next car or house or vacation is not only unnecessary. IT' NOT SATISFYING ! Now that' a SEE-change in our books. And when it s s comes from a guy who makes his living getting you to buy more and he' calling for changes in basic attitudes s something’s up. UPDATES: the Difference Between Pundits and Executive Responsibility Here' the link for the CSpan: Obama 100 Day Press Conference and the post-conference Rose panel that s discussed it. We were struck in the first case by how closely our assessment of things mirrored the President' s directional intent while at the same time it was reinforced by the pundits. BUT that' NOT the most important thing s - THE important things are that the pundits don'talk at all about: t 1) whether the policies are right (which we' argued at length that they are), ve 2) 2) what it takes to implement them (the question never came up among them) and 3) 3) what it takes to explain and sell them to motivate the country in support of them. Yet as a matter of fact those are the central questions that must concern the Administration. The difference is between outside observers who've never stepped in front of the gun, even in a small way and the people who see dealing with all the elbow jostlers as just another part of their job but who's primary concern is getting it done, and getting it done right, workably and sustainably.