WEDNESDAY, JULY 28, 2010 DAVID IGNATIUS


n the almost nine years the United States has been fighting in Afghani- stan, any thoughtful person who fol- lows the war has had a recurring worry: Can America rely on Pakistan? Can our al- lies in that turbulent country close the Tal- iban’s havens along the border? And, for that matter, are the Pakistanis really try- ing? The massive disclosure of war-related


The Pakistan conundrum I


tion.


documents this week by Wikileaks raised a number of questions, but none more im- portant than the Pakistan conundrum. Al- though the Obama administration has played down the leaks in general, senior officials agree that Pakistan’s ability to close the sanctuaries is an absolutely cru- cial issue. “These safe havens are a big question mark in terms of our success rate,” Gen. Jim Jones, the national security adviser, said in an interview Tuesday at the White House. He noted that the Taliban and its affiliates have used these havens to arm, train, regroup and gather intelligence — confounding U.S. strategy. The Pakistanis have denied that their


intelligence service is aiding the Taliban, and they have noted the raw and frag- mentary nature of the Wikileaks informa-


HAROLD MEYERSON


End of the jobs machine A


in’t no hiring. And ain’t likely to be any for a good long time. The problem isn’t merely the greatest


downturn since the Great Depression. It’s also that big business has found a way to make big money without restoring the jobs it cut the past two years, or increasing its in- vestments or even its sales, at least domes- tically. In the mildly halcyon days before the 2008


crash, the one economic outlier was wages. Profit, revenue and GDP all increased; only ordinary Americans’ incomes lagged behind. Today, wages are still down, employment re- mains low and sales revenue isn’t up much, either. But profits are the outlier. They’re pos- itively soaring. Among the 175 companies in the Standard


& Poor’s 500-stock index that have released their second-quarter reports, the New York Times reported Sunday, revenue rose by a ti- dy 6.9 percent, but profits soared by a stun- ning 42.3 percent. Profits, that is, are in- creasing seven times faster than revenue. The mind, as it should, boggles. How can America’s corporations so defy


gravity? Ever adaptive, they have evolved a business model that enables them to make money even while the strapped American consumer has cut back on purchasing. For one thing, they are increasingly selling and producing overseas. General Motors is going like gangbusters in China, where it now sells more cars than it does in the United States. In China, GM employs 32,000 assembly-line workers; that’s just 20,000 fewer than the number of such workers it has in the States. And those American workers aren’t making what they used to; new hires get $14 an hour, roughly half of what veterans pull down. The GM model typifies that of post-crash American business: massive layoffs, produc- tivity increases, wage reductions (due in part to the weakness of unions), and reduced sales at home; increased hiring and booming sales abroad. Another part of that model is cash re- tention. A Federal Reserve report last month estimated that American corporations are sit- ting on a record $1.8 trillion in cash reserves. As a share of corporate assets, that’s the high- est level since 1964. Why invest in new plants, offices and work-


ers, particularly here at home? Spooked by the 2008 crash, corporations want to keep more money under the mattress. More impor- tant, they’re sitting pretty as profits rise. Is this model sustainable? It’s hard to say —


a double-dip recession could plunge their profits yet again. But from the American


But the fact remains that the Taliban continues to operate effectively from bases inside Pakistan — and, indeed, is es- calating its attacks. Unless this changes, the American effort in Afghanistan is like- ly to fail. Jones praised the Pakistani military for stepping up its operations in the border region over the past 18 months, but he stressed: “There’s much more to do and not a lot of time to do it.” Jones drew on his own travels to the re- gion over the past decade to explain why Pakistan is a “hinge” in the war effort. He noted that from 2003 to 2005, the orga- nized enemy presence in Afghanistan was relatively low, with perhaps 100 al-Qaeda and 3,000 Taliban fighters there. A“pivotal time” came in 2006, Jones ar- gued, when the Pakistani military decided to “cut a deal” with tribal leaders that al- lowed the Taliban insurgents to cross free- ly from Afghanistan if they didn’t attack Pakistani forces. Jones, who was serving as NATO commander at the time, said he was “incredulous” at the truce and warned the Pakistanis it would never work. Opening this “highway from Afghani- stan to Pakistan” allowed the Taliban a


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A15 RUTH MARCUS Quack


“momentum change” from 2007 to 2009, and it began to gain the upper hand, Jones recalled. It’s this continuing momentum that the Obama administration has tried to check with its troop surge. The Wikileaks hemorrhage has been damaging partly because it came at a time when the Washington mood about Af- ghanistan was darkening. Even hawkish officials have become increasingly con- cerned that success — even a minimal “C- plus” version — may not be possible with- in a realistic time frame. White House officials talk these days about seeking an “acceptable end state” in Afghanistan, rather than victory. This means a patchwork process that brings greater security through a stronger Af- ghan national army and police, plus the tribally based “local police.” The crucial driver will be a political process of recon- ciliation, brokered partly by Pakistan. Administration officials agree on the need for diplomatic engagement with the enemy, but they see no sign that the Tali- ban is willing to play — with one possible exception. Jones noted that elements of the Taliban might be willing to meet one U.S. condition for talks, which is to disa- vow al-Qaeda. “The Taliban generally as a


group has never signed on to the global ji- had business and doesn’t seem to have ambitions beyond its region,” he said. Senior officials denied another seeming Wikileaks revelation — that the Taliban has been using shoulder-fired missiles to down U.S. aircraft. One said he hadn’t seen any reliable confirmation of these re- ports, but he stressed such missiles would “be a big change in battlefield geometry.” As to recent rumors that Iran may be ship- ping such weapons, the official said he had no confirmation but that if such game-changing weapons entered Afghan- istan, “we will not be able to sit idly by.” It’s usually a mistake to try to “call” a


faraway conflict — up or down, success or failure — on the basis of fragmentary in- formation. But right now, any observer would say that Afghanistan is going badly, that the U.S. counterinsurgency strategy hasn’t been proved and that the American public’s patience is dwindling. That brings us back to closing the Tali-


ban havens in Pakistan. It’s a measure of America’s strategic difficulty that this un- certain option with a reluctant partner may now offer the best possibility for reaching the “acceptable end state.” davidignatius@washpost.com


medicine on taxes


Taxes can be reduced, but they can nev- er be allowed to go up. And whatever level taxes are at, they are too high. Think back to the beginning of the Bush administration tax cuts. It seems almost impossible to believe, but the ar- gument then was that the budget sur- plus was too large. There was, or so President George W. Bush assured us, ample cash to cut taxes for everyone and protect the Social Security surplus and set aside $1 trillion over the next decade for “additional spending needs” and pay down the national debt. “The people of America have been overcharged, and, on their behalf, I’m here asking for a refund,” Bush told Congress in February 2001. You know what happened next. The


T


worker’s perspective, the model, no less than a new downturn, is an unqualified disaster. It portends the kind of long-term, structural un- employment that we haven’t seen since the 1930s. It locks into place a generation of re- duced incomes. This dystopian America already stares us in the face. Fully 46 percent of the unem- ployed have been without work for six months or more — the highest level since the Bureau of Labor Statistics began measuring such things in 1947. Two years ago, just 18 per- cent of the unemployed were jobless for more than six months. America’s private-sector job machine — the marvel of the world since 1940 — has clanged to a halt, and there’s no place for it in corporations’ new business model. The restoration of American prosperity, then, isn’t likely to be driven by our corporate sector. Across-the-board business tax cuts make no sense when business is already sit- ting on oceans of cash. Targeted tax cuts and credits for strategic investment and hiring within the United States, on the other hand, make excellent sense. The Obama adminis- tration has proposed expanding the tax credit for the manufacture of green technology here at home, and congressional Democrats will soon unveil legislation creating further incen- tives for domestic manufacturing. Another source of jobs would be public, and public-private, investment in infrastruc- ture. As Michael Lind and Sherle Schwen- ninger of the New America Foundation have argued, building a new American infrastruc- ture of roads, rail and broadband is not only an economic necessity but also the invest- ment with the highest multiplier effect in cre- ating new jobs. A U.S. infrastructure in- vestment bank, such as that proposed by Rep. Rosa DeLauro (D-Conn.), could leverage sig- nificant private capital to begin America’s re- building, though the idea has encountered rough sledding in (surprise) the Senate. What won’t work as an economic solution


— indeed, it amounts to cruel and unusual punishment — is blaming the unemployed for their failure to find jobs. There are now roughly five unemployed Americans for every open job, according to the Economic Policy Institute’s most recent calculations, and that ratio isn’t likely to decline much if we leave it to the corporate sector to resume hiring. Cor- porations have figured out a way to make money without resuming hiring. Their model is premised on not resuming hiring. If the public sector doesn’t fill the gap, the era of American prosperity is history. meyersonh@washpost.com


POST PARTISAN


Excerpts from The Post’s opinion blog, updated daily at washingtonpost.com/postpartisan


JACKSON DIEHL


Britain’s Cameron panders to Turkey


Western leaders have been puzzling over how to respond to the Turkish government of Recep Tayyip Erdogan, which in recent months has abandoned its policy of seeking integration with Europe and begun seeking to establish itself as an Islamic power — with cozy relations with Iran and Syria. On Tuesday, Britain’s new prime minister,


David Cameron, tried shameless pandering. In a speech delivered in Ankara, Cameron first denounced European opponents of Tur- key’s membership in the European Union, saying it was motivated by protectionism or prejudice against Islam.


But Erdogan lost interest in the European


Union some time ago. So Cameron em- braced the Turkish leader’s new favorite sub- ject: the evils of Israel. “The Israeli attack on the Gaza flotilla was


completely unacceptable,” Cameron said. Then he added: “Gaza cannot and must not be allowed to remain a prison camp.” A prison camp? Israel’s enemies are fond of using that term, with its implicit hint that the Jewish state has adopted the policies of Nazi Germany. But according to the BBC, no British prime minister has ever spoken so harshly of Israel’s handling of Gaza. Asked about it later, Cameron protested


that he was only repeating what he had said in a House of Commons debate several


weeks ago. But the Guardian checked: In that instance, the prime minister referred to Gaza as “a giant open prison,” not a prison camp.


Erdogan, of course, was delighted to have Cameron join his anti-Israel campaign. His Islamist ruling party encouraged the Turk- ish ferry whose attempt to break Israel’s sea blockade of Gaza at the end of May led to a clash in which nine Turks — all of them members or supporters of a militant Islamic “charity” — died. Since then Erdogan has been using the incident in a bid to compete with Iran’s Mahmoud Ahmadinejad and Hezbollah’s Hassan Nasrallah for leadership of the Middle East’s Israel-hating “street.” Standing alongside Cameron, Erdogan compared Israel to the “pirates of Somalia” and added that people in Gaza “are living under constant attacks and pressure in an open-air prison.” That was fairly mild stuff for the Turkish prime minister, who regular- ly accuses Israel of “state terrorism” and last month called it an “adolescent, rootless state.”


If Cameron was troubled by such rhetoric,


or by Turkey’s role in the ferry incident, he gave no indication. Instead, he proclaimed that “when I think about what Turkey has done to defend Europe as a NATO ally . . . it makes me angry that your progress toward E.U. membership can be frustrated in the way it has been.” That may win the new British government some points in Ankara. But the price will be paid by Israel, which has just seen the inter- national campaign to delegitimize it gain a little more momentum.


refund came. The supposed surplus evaporated. The Social Security surplus was spent. Instead of being paid down, the $3.3 trillion national debt bal- looned to $9 trillion. The only thing that remained the same was the clamor for tax cuts. Same argument, different rationale. The Bush tax cuts are set to expire at the end of this year, and the argument now is that they must be extended — for everyone. This time not because the fis- cal bottom line is too healthy but be- cause the economy is too shaky. I expressed frustration a few weeks


SUSAN WALSH/ASSOCIATED PRESS


Women of the Storm on Capitol Hill to call for Katrina relief in 2006. KATHLEEN PARKER


Riders on the storm Women rally to aid the ravaged Gulf Coast


W


hen people think of New Orleans, most think of jazz, hurricane cocktails,


Katrina — and now the oil spill in the Gulf of Mexico. But there’s another stormy con-


coction barreling toward the na- tion’s capital — in the nicest pos- sible way. They call themselves “Women of the Storm,” and they want new money to go with old promises to restore the Gulf Coast. Meet Anne Milling, who formed the organization with a diverse group of women after Hurricane Katrina to educate policymakers and communicate the needs of their communities. A lifelong volunteer, Milling speaks with the distinctive New Orleans accent as she describes her group and its mission. Think of them as happy warriors — nonpartisan and nonpolitical — who have learned that you can get more with honey than with vinegar. This isn’t to say that they’re de- mure. After Katrina, Milling and 130 others twice hopped a char- tered plane to Washington, raised blue-tarp umbrellas and visited congressional offices, urging elected representatives to visit their hurricane-ravaged region and help the coastal region re- cover. More than 50 senators and about 150 representatives made their way to Louisiana to see the devastation for themselves. Milling’s group plans to stage a


reenactment in September, in the wake of Katrina’s five-year anni- versary (Aug. 29), this time bear- ing a petition with, they hope, hundreds of thousands of signa- tures demanding money to re- store the gulf ecosystem damaged by the BP oil spill. The petition has been posted online, along with a video of local and national celebrities calling for all Americans to “Be the One” to help save the coast. Some of the familiar faces include James Car- ville and Mary Matalin, musi- cians Dave Matthews and Lenny Kravitz, actors Sandra Bullock and John Goodman, chefs Emeril Lagasse and Leah Chase, “Mad Men” actor Bryan Batt and Indi- anapolis Colts quarterback Pey- ton Manning. Each holds up an index finger, reminiscent of Iraqi voters without the purple stain, and entreats viewers to “be the one” to save the pelicans, sea tur- tles, seafood, coastal culture, wet- lands and so on. In a crisis-saturated world sod- den with cynicism and conspira- torial ennui, these women in- spire. And their petition, which has attracted more than 100,000


signatures since it was posted a week ago, offers a vehicle for channeling the frustration many Americans feel toward what sometimes seems a hopeless situ- ation. A signature may not seem like much, but it will help Milling & Co. make their point. Which is: The Gulf Coast crisis affects all Americans, not just coastal resi- dents. Indeed, about 30 percent of the nation’s seafood comes from waters off Louisiana. The oil spill has resulted in an indefinite ban on fishing in 35 percent of federal waters in the gulf, while the long-term environmental ef- fects are still being determined. Meanwhile, the fishing com- munities and coastal culture unique to the area have been de- stroyed. As just one example, Venice, La., 50 miles from the Deepwater Horizon oil rig, is fac- ing extinction. Tourism has taken a huge hit as beaches have closed and vacation packages have been canceled. The port of New Orleans, one of


the nation’s busiest, is expected to lose business as cleanup efforts hinder traffic flow. Finally, the re- gion provides 30 percent of the crude oil and 13 percent of all nat- ural gas produced in the United States. While a moratorium on drilling may be a popular notion given the circumstances, the im- pact from loss of jobs and rev- enue will be felt beyond Louisi- ana. Milling hopes to recruit women from other coastal states to join her in pressuring Washington to act. She notes, always graciously, that Washington is good about creating programs but not so good at following through with funding.


Congress passed the Water Re- sources Development Act of 2007, specifically authorizing projects that would do much to restore the gulf wetlands. But so far, no mon- ey. Environmental groups with which Milling’s group have been working published an open letter Tuesday to Navy Secretary Ray Mabus urging him to call for im- mediate funding of the act. Among the priorities is recon-


necting the Mississippi River with its delta wetlands and re- storing barrier islands. For an administration that fa- vors shovel-ready jobs and has stimulus funds idling, not to mention about $32 billion in BP monies, the gulf restoration proj- ect would seem a worthy and ur- gent target. A perfect storm for a region that has seen too many. kathleenparker@washpost.com


back with the denialism among some liberal Democrats about the need to curb entitlement spending and the con- viction that simply socking it to the rich would solve the fiscal problem. But the Republican position seems even more intransigently divorced from reality. Perhaps there is some magical point at which Republicans might accept the re- ality that the government needs more revenue than it is currently set to take in — but I haven’t heard it yet. Quite the opposite. At a breakfast with reporters the other day, Minnesota Gov. Tim Pawlenty, one of the GOP’s ris- ing stars and a more-likely-than-not 2012 presidential candidate, was asked what his reaction would be if the presi- dent’s debt commission were to recom- mend a mix of spending cuts and tax increases. “Not good,” Pawlenty said. “I don’t think the argument can be credibly made that the United States of America is undertaxed compared to our com- petitors.” Actually, the United States is on the low end in terms of the overall tax burden — 28 percent of gross do- mestic product in 2007, according to the Organization for Economic Cooper- ation and Development, compared with an average of 36 percent in the 30 OECD countries. Only South Korea, Mexico and Turkey were lower. Of course, Pawlenty is hardly alone in his tax delusions. Senate Minority Leader Mitch McConnell proclaimed the other day that the Bush tax cuts ac- tually raised money. “There’s no evi- dence whatsoever that the Bush tax cuts actually diminished revenue,” the Kentucky Republican told Brian Beut- ler of the Web site TPMDC. “They in- creased revenue, because of the vibran- cy of these tax cuts in the economy.” Here’s some evidence. Tax revenue fell from 21 percent of GDP in fiscal 2000 to 17.5 percent in 2008. (I’m leav- ing out the recession-induced plunge, to under 15 percent this year and last.) Which takes us back to the matter of


whether it would be risky to let any of the Bush tax cuts expire. As a practical matter, Democrats and Republicans agree that the cuts should remain in place, at least temporarily, for families making less than $250,000 a year. That’s a debatable point. Former Feder- al Reserve Board chairman Alan Green- span, whose blessing was responsible for propelling the tax cuts forward in the first place, said recently that Con- gress should let them lapse. The real disagreement is over ex- tending the high-end tax cuts, and on this even some supposedly fiscally re- sponsible Democrats — I’m talking to you, Kent Conrad — have gone wobbly. The no-new-taxes-now crowd cautions against raising taxes in a recession — a fair point, except that there are more ef- ficient ways to spur the economy than giving more money to those least likely to spend it. Alternatively, they cite — and inflate — the supposed impact on small business of raising the upper-end rates. This would be more convincing if the Republican line were something other than “no new taxes, ever.” The eco- nomic and fiscal circumstances may change, but the prescription remains the same. And the patient is too ill to tolerate another dose of this quack medicine.


marcusr@washpost.com CORRECTION


A July 27 op-ed calling for federal sup- port for scientific research on the ef- fects of the Gulf of Mexico oil spill re- ferred to the Natural Resources Dam- ages Assessment process as prescribed by the Ocean Pollution Act of 1990. It is the Oil Pollution Act of 1990.


he modern Republican argument about taxes seems to boil down to two principles, both misguided:


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