FRIDAY, SEPTEMBER 10, 2010
KLMNO Washington FORUM
Obama vs. Wall Street: Call a truce
by Chrystia Freeland
specifically for business: research and devel- opment tax credits, for instance, and the small-business tax breaks he is pushing to introduce in the face of Republican congres- sional opposition. But these familiar sweet- eners won’t be nearly enough to reverse one of the most significant estrangements of the first two years of the Obama administration — the rift between the White House and business. Two years ago, candidate Obama was the darling of the CEO class: Hedge fund titans, Silicon Valley entrepreneurs and even regis- tered Republican chief executives from the Midwest flocked to his banner. Today, Amer- ica’s business leaders — even those who raised millions for him in 2008 — have turned on their president: “Socialist” is among the nicer epithets some use when de- scribing Obama. For Democratic politicos, this virulent cri- tique is especially painful because it is so out of sync with the views of the party’s tradi- tional base. The MoveOn activists, union leaders and progressive pundits are as unit- ed as the C-suite in their verdict on the presi- dent — only in their opinion, he has sold out to big business, particularly its Wall Street wing. That’s why conventional wisdom on the
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left is advising the president to abandon his milquetoast ways and go on the offensive against the capitalist overlords. He should model himself, as Chris Matthews suggested last week, on Franklin Roosevelt, who said of the country’s bankers: “They are unanimous in their hate for me — and I welcome their hatred.” In a similar vein, Post columnist Harold Meyerson recently urged Obama to “acknowledge how our power elites have be- trayed Main Street America” and to take a lesson from FDR’s tirades against the “mon- ey-changers” on Wall Street. If you want to play traditional political hardball, that advice makes sense: The bank- ers hate the president anyway, so why not embrace that sentiment and use it to reener- gize his core constituency?
But if the president wants to be true to the worldview that got him elected in 2008 — his pursuit of a “more perfect union” — he should do something completely different. And in the process, he might find himself transforming the American conversation about capitalism and society. Obama needs to reframe the discussion about business and taxes and regulation. Right now, that debate is being waged as a class war. The left rages against “casino cap- italism” and the evil businessmen who wrecked the economy and must now pay to fix it. On the other side of the ring, Wall Street is using the same “warring camps” language. Not everyone (thank goodness!) goes as far as Blackstone Group Chairman Steve Schwarzman, with his ill-judged com- parison to Hitler’s invasion of Poland, but fund manager Dan Loeb spoke for the broader financial fraternity last month when he accused the president of abandoning free-market capitalism and the Constitu- tion’s guarantee of freedom from “nonpuni- tive” taxation. The president is partly to blame for this zero-sum mentality. The business case for ill- treatment by the White House is pretty over- blown — remember the Troubled Assets Re- lief Program (initially ringing up at $700 bil- lion) and the gift that keeps on giving: cheap money from the Fed. Yet when it comes to rhetoric, this eloquent president has made critical missteps. The worst came in spring 2009, when he attacked the “speculators” who held Chrysler bonds. He was also out of line in permitting the denunciation of Gold- man Sachs; all the name-calling notwith- standing, Goldman is probably the Wall Street firm least to blame for the 2008 crisis. Painting affluent bankers as America’s vil- lains is no doubt fun, especially when your base is egging you on. But it is a big philo- sophical mistake. It invites a malign in- terpretation of the tighter regulation Oba- ma’s administration has already imposed and the higher taxes on the rich he has promised. And when you rail against nasty speculators, you shouldn’t be surprised if business accuses you of imposing more rules and higher taxes as a punishment. That’s the wrong way of looking at things.
Stricter regulation of financial services is necessary not because American bankers were bad, but because the rules governing them were. Higher taxes on the rich are nec- essary not because the wealthy are un- deserving or made their money unfairly, but because America is broke and, in this age of income inequality, the super-rich are the people who can best afford to pay more. Tax- es aren’t punishment for a crime; they are how we contribute to the society we inhabit. If Obama really believes in capitalism — as he surely does — he needs to stop demon- izing business. If he gets this right, he might just convince some of his erstwhile banker buddies that higher taxes and more reg- ulation aren’t an attack on capitalism or on capitalists — they are his effort to make this capitalist democracy work better for every- one. Surely that would be change both Wall Street and Main Street could believe in.
Chrystia Freeland is global editor at large for Thomson Reuters. She is writing a book about the global super-elite.
he pre-election economic treats that President Barack Obama handed out this week included several intended
No more delays for New START
by George P. Shultz, Madeleine K. Albright,
Gary Hart and Chuck Hagel T HARVEY GEORGES/ASSOCIATED PRESS President Jimmy Carter speaks in front of the solar panels installed at the White House in June 1979. Solar’s shining White House moment by Bill McKibben A few of us have spent the past week carefully transporting
a relic of American history down the East Coast, trying to return it to the White House, where it belongs.
It’s not a painting spirited from the Lincoln Bedroom or an antique sideboard stolen from the Roosevelt Room by some long-ago servant. No, this relic comes from the somewhat more prosaic Carter roof. It’s a solar panel, one of a large array in- stalled on top of the White House in June 1979. When he dedicated the panels, President Jimmy Carter made
a prophecy that, like many oracles, came true in unexpected fashion — in fact, nothing better illustrates both why the world is heating and why the American economy is falling behind its competitors. “In the year 2000 this solar water heater behind me will still be here supplying cheap, efficient energy,” he said. “A genera- tion from now this solar heater can either be a curiosity, a mu- seum piece, an example of a road not taken, or it can be just a small part of one of the greatest and most exciting adventures ever undertaken by the American people.” What happened?
By 2000, the panels were long gone from the White House, taken down during the Reagan administration. But they were indeed still producing hot water, on the cafeteria roof of Unity College in central Maine. Some have indeed become museum pieces — one is at the Carter Library and another was donated this year by Unity to Huang Ming, the entrepreneur whose Himin Solar has become the world’s preeminent supplier of solar hot water. It is in the gallery at his enormous Sun-Moon Mansion complex, a few hours south of Beijing. The technology has indeed become part of a great and excit- ing adventure. Just not for the American people. Instead, by Huang’s estimate, 250 million Chinese shower with hot water from rooftop panels. There are entire cities where essentially every building heats its water with the sun. Which explains why China leads the world in installed renewable capacity. Meanwhile, in America, the solar industry essentially van-
ished after Reagan stopped supporting it with federal dollars. Less than 1 percent of Americans heat their water with the sun, a number not expected to rise very quickly now that the Senate has punted on even the modest climate legislation passed by
the House. To counter this situation, we’re carrying the panel back to the White House and asking President Obama to put it back on the roof, alongside a full array of new photovoltaic and hot-water panels. Obama has drawn much of the blame for the failure of the climate legislation, which he didn’t push aggressively; this is a chance to make at least symbolic amends. Thus far, how- ever, we have not gotten a firm response from the administra- tion, even though other world leaders have pledged to join a Global Work Party on Oct. 10 (10-10-10). Mohamed Nasheed, president of the Maldive Islands, for instance, will be on the roof of his official residence bolting down panels donated by the American company Sungevity. Clearly, a solar panel on the White House roof won’t solve cli-
mate change — and we’d rather have strong presidential leader- ship on energy transformation. But given the political scene, this may be as good as we’ll get for the moment. The Bush administration, in fact, created an opening — it brought solar energy back to the White House, with some pho- tovoltaic panels on a maintenance shed and a small water heat- ing system for the “presidential spa and cabana.” But the Bush officials purposely did it without fanfare, and fanfare is exactly what we need. Those panels belong on the roof, where every vis- itor can see them. Amemo in the Carter Library, written by domestic policy ad- viser Stuart Eizenstat in May 1978, lays out the case with pres- cient power: “It would provide a symbol of commitment that is understandable to all Americans, and would enable you to re- capture the initiative in the solar energy area. . . . The White House experience will show, to the great number of interested but skeptical Americans, that solar energy is clean, practical, and worth the long-term investment.” He’s still right — when Michelle Obama planted a garden on the White House lawn, it helped boost seed sales 30 percent in the next year. We wasted three decades when, across America, we could
have been using the sun’s power instead of coal to heat our wa- ter. We wasted our technological lead in the most important in- dustry of the future and handed it to countries like China. As scientists tell us with increasing fervor, we’re laying waste to the planet’s climate. Now is the moment to go back to the future.
Bill McKibben, founder of the global warming campaign
350.org, is a scholar in residence at Middlebury College in Vermont and the author of “Earth: Making a Life on a Tough New Planet.”
he Senate should promptly vote to approve the New Strategic Arms Reductions Treaty (New START)
with Russia for one reason: It increases U.S. national security. This is precisely why Defense Secretary Robert Gates de- clared at the outset of Senate consider- ation of the treaty that it has “the unani- mous support of America’s military lead- ership.” The treaty reduces and caps the Rus- sian nuclear arsenal. It reestablishes and makes stronger the verification pro- cedures that allow U.S. inspectors to con- duct on-site inspections and surveillance of Russian nuclear weapons and facil- ities. It strengthens international efforts to prevent nuclear terrorism, and it opens the door to progress on further critical nonproliferation efforts, such as reducing Russian tactical nuclear weap- ons.
Adm. Mike Mullen, the chairman of
the Joint Chiefs of Staff, has urged the Senate to ratify the treaty, and seven for- mer Strategic Command (STRATCOM) chiefs have called on Senate leaders to move quickly. In addition to our military leadership, there is overwhelming bipartisan sup- port for the treaty among national securi- ty experts. Also, officials from the past seven administrations, Republican and Democrat alike, testified before Senate committees in support of the treaty. In fact, the number of Republican former officials testifying outnumbered the number of Democrats. We were part of a group of 30 former
national security leaders from both polit- ical parties — including former secretary of state Colin Powell, former defense sec- retary Frank Carlucci and former nation- al security adviser Sandy Berger — who published an open letter in support of the treaty. The Senate has done its due diligence: Over the course of 21 hearings and brief- ings during the last five months, senators have had the opportunity to ask ques- tions and put to rest concerns. From the director of the Missile Defense Agency, Lt. Gen. Patrick O’Reilly, senators learned that the treaty in no way limits the ability of our military to deploy the missile de- fenses it needs or wants. From STRAT- COM Commander Kevin Chilton, they learned that with the treaty in place, the United States will retain a strong and re- liable deterrent. Sen. John Kerry, the chairman of the Senate Foreign Relations Committee, even delayed the committee vote on the treaty to give senators an ex- tra month to review background materi- als and seek answers to their questions. Now it is time to act.
While substantive questions about the
what to do with captured terrorists. The Obama administration is stuck about where the Bush administration was, with little hope in sight for progress. Guantanamo Bay has proved harder to close than the Obama administration an- ticipated. Many terrorists there are too dangerous to release and, for a variety of evidentiary reasons, cannot be brought to trial. Our allies have taken fewer detain- ees than we would like. These men will thus have to be held in U.S. custody. But neither Congress nor the American peo- ple is keen on transferring them to the United States. Military commissions have not worked well, either, as recent difficulties with the trials of an alleged USS Cole bomber and a Canadian child soldier have shown yet again. Commissions still pose novel legal and political issues; many in the military charged with operating them don’t like them; and they bring few legitimacy ben- efits, especially abroad, because they low- er civilian justice standards and apply only to non-citizens.
A way past the detention gridlock N
by Jack Goldsmith
ine years after Sept. 11 and 20 months into the Obama presidency, our nation is still flummoxed about
civilian court. Difficulties with trials have left the Oba- ma administration, like its predecessor, relying primarily on military detention without trial to hold terrorists. Courts have given their general blessing to mili- tary detention as a legitimate form of ter- rorist incapacitation. But military deten- tion still raises hard legal questions, about which Congress has said practically noth- ing. As a result, unaccountable judges are making fateful detention decisions, de- manding release of some whom the ad- ministration thinks are dangerous terror- ists. President Obama pledged last May to seek congressional clarity on detention but has yet to follow through. The abundant dysfunctions in our sys- tem for incapacitating terrorists have led to increased reliance on targeted killings and outsourced renditions, neither of which is optimal from an intelligence- gathering perspective. Meanwhile, Khalid Sheik Mohammed spent time in military detention and before a military commis- sion before Holder said he would be tried in a civilian court. Nearly a year has passed, and we still don’t know where Mo- hammed’s fate will be determined. There is no silver bullet for this mess, but a few pragmatic steps can bring real progress toward resolution.
Civilian trials for terrorists have also proven difficult. They gathered disfavor when Attorney General Eric Holder said he would prosecute Khalid Sheik Moham- med and other alleged Sept. 11 plotters in civilian court in Manhattan. Disfavor grew when the failed Christmas Day plot- ter, Umar Farouk Abdulmutallab, and the Times Square suspect, Faisal Shahzad, were placed in the civilian criminal sys- tem and read Miranda rights rather than detained and interrogated in the military system. The Bush administration pros- ecuted scores of terrorists in civilian court with little controversy. But the charge that the Obama administration is insufficient- ly tough on terrorists has made it harder for this administration to try terrorists in
First, give up on closing the Guanta- namo Bay facility. The administration has missed its one-year deadline. The symbol- ic benefits of closure have diminished sig- nificantly, because the substitute for de- tention without trial on the island is de- tention without trial inside the United States with little if any change in legal rights. The main reason to close the facil- ity is to fulfill a first-week presidential pledge that now, under different circum- stances, is too costly. Second, acknowledge that military de- tention will remain the primary basis for holding terrorists, and strengthen the sys- tem. The president will eventually need Congress’s help, not only to put Guanta- namo detentions on firmer footing but
also to support the growing global fight against terrorists beyond traditional bat- tlefields. The main legal foundation for targeting and detention in places such as Pakistan, Somalia and Yemen is the Sep- tember 2001 congressional authorization to deal with the Sept. 11 attacks. But as dangerous terrorists have ever-dimmer connections to Sept. 11, the government is bumping up against the limits of what this authorization permits. Third, stop using military commissions, which are a good idea in theory but have for nine years proved unworkable in prac- tice. Military detention and civilian trials provide adequate legal bases for terrorist incapacitation. Fourth, separate the legitimacy of civil- ian trials from the security of such trials. Much of the opposition to trying Moham- med in a New York civilian court was the potential for massive disruption in secur- ing the downtown venue. Objections to ci- vilian trials diminish if they are moved to more remote places in the New York and Virginia districts where the crimes oc- curred. Fifth, do not seek the death penalty at
trial. Many alleged terrorists plead guilty. Most of the hard legal and political prob- lems in trials — including the use of classi- fied information and coerced confessions —arise in the penalty phase, when defen- dants can seek and introduce any conceiv- ably probative evidence. Many problems with terrorist trials go away if we simply deny terrorists their sought-after martyr- dom. These proposals, especially the last, are politically difficult. But not taking bold steps to resolve our terrorist detention quandary will leave the nation in the in- creasingly unfortunate place it has been for nearly a decade.
The writer, a professor at Harvard Law School and a member of the Hoover Institution’s Task Force on National Security and Law, served as an assistant attorney general in the George W. Bush administration.
treaty have been put to rest, some sena- tors are trying to delay consideration of it based on an unrelated funding issue, namely, claims that future funding for the U.S. nuclear arsenal might be insufficient. This is wrong for two reasons. First, these claims fly in the face of the considered opinions of Chilton and Na- tional Nuclear Security Administration head Thomas D’Agostino, the men charged with overseeing our nuclear weapons and weapons laboratories. They, along with Gates and Mullen, have made clear that the administration’s 10- year, $80 billion plan to modernize our nuclear infrastructure, which would re- sult in a 15 percent increase over current spending levels, represents the funding level that is needed and can be executed in a timely manner. More important, delaying this treaty over an unrelated matter undermines our national security. By the time the Senate Foreign Rela- tions Committee votes Sept. 16 on wheth- er to send the treaty to the Senate floor for ratification, it will have been more than 280 days and counting since the United States lost the ability to conduct on-site inspections, monitoring and ver- ification of Russia’s nuclear arsenal. This ability will not begin again until the trea- ty is ratified. As Sen. Richard Lugar (R-Ind.) told the
committee, “The problem of the break- down of our verification, which lapsed Dec. 5, is very serious and impacts our national security.” Given the national security stakes and the overwhelming support from the mili- tary and national security community, we hope that the Senate Foreign Rela- tions Committee will send the treaty to the floor with robust bipartisan backing and that senators will promptly ratify it with the kind of resounding margin such measures have historically enjoyed. Senate approval of New START would send a strong message to the world that the United States can overcome partisan differences and take concrete, practical action to reduce the nuclear threat and enhance our nation’s security.
George P. Shultz was U.S. secretary of state from 1982 to 1989. Madeleine K. Albright was secretary of state from 1997 to 2001. Gary Hart (D-Col.) and Chuck Hagel (R-Neb.) are former members of the U.S. Senate.
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