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September 25, 2005
David Warsh, Proprietor


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Reversal of Fortune?

The risk with George Bush always was that good luck had made him somewhat reckless. (He was risk-prone enough to begin with.)  He won the Republican nomination on a flier and the White House on a bluff. He escaped what might have been a sharp recession with a series of well-timed tax cuts. Then success in Afghanistan emboldened him to send the American army to march on Baghdad, over many objections.

Now Bush’s many bets are beginning to catch up with him. Hurricane Katrina has eclipsed the big gamble of the second term, Social Security reform (which already had collapsed.)  His party is in open rebellion over the costs of his Gulf Coast rebuilding plan. And the war in Iraq, the big gamble of the first term, threatens to devolve into a horrible, Balkans-like civil war as Bush prepares to pull out large numbers of US troops next year.

So what next? If you’re George Bush, probably it’s time to turn over the doubling cube once again. Clearly, the president must seek to rebuild a consensus, if he doesn’t want to end his second term on top of a fuel tank, shouting “Top of the world, Ma!” New York Times columnist Thomas Friedman wants him to do “his own Nixon-to-China turnaround,” by championing a 50-cent-a-gallon gasoline tax increase to reduce the deficit and work towards energy self-sufficiency.

But there is another stratagem available, subtler and more effective. To understand it, it’s necessary to look a little closer at the populist, anti-expertise policies that Bush has pursued so far.

Take global warming. It was not just New Orleans’ vulnerability to the sea that Katrina demonstrated.  Every coastal city in the world is exposed in varying degrees to the possibility of flooding in an era of greenhouse warming.  Last week Science magazine reported that that “mounting evidence suggests that tropical cyclones around the world are intensifying, perhaps driven by greenhouse warming.”

It’s not enough that the Bush administration pulled out of the Kyoto Treaty in 2001 without articulating a vision of any alternative mechanism by which global emissions of greenhouse gases might be slowed and capped. The notion that climate change may be part of the problem exemplified by Katrina and Rita was conspicuously missing from Bush’s televised speech from the French Quarter of New Orleans.

Or consider deficits. Vice president Dick Cheney was famously quoted as saying that Ronald Reagan had shown that deficits don’t matter. Katrina demonstrated even more forcefully than the Great Communicator that they do. In one September evening, the president sought to commit his administration to a reconstruction program whose price- tag has been estimated at around $200 billion, or about as much as has been spent so far in Iraq, though far less than the estimated $400 billion his new Medicare pharmaceutical benefit is expected to add to government health care casts over the next ten years.

Where’s the money going to come from? Republican lawmakers left their regular meeting with White House budget director Joshua Bolten without any idea.  Meanwhile, the president, having dumped the thoroughly serious Paul O’Neill as Treasury Secretary after two years, was once again said to be thinking about replacing the man whio succeeded him, John Snow — perhaps with White House chief of staff Andrew Card, a political operative with no experience in finance. That would, of course, just make matters worse.

About the adventure in Iraq, the less said the better, at least for now. There will be plenty of opportunity to discuss matters when things heat up next year. However well-intentioned the 2003 invasion was, it is clear that things haven’t turned out the way the officials had hoped when they began.  It is equally clear that getting out has become the Bush administration’s top priority.

Even in the seemingly apolitical matter of “intelligent design,” Bush has staked out a position that seems impossible to defend on legal grounds as well as intellectual grounds. (Emotional grounds are something else again.)  Last month the president said that he believed schools should teach the view that life on earth is too complex to have developed through evolution. But in central Pennsylvania a group of parents has gone to court to argue that such teaching is an unconstitutional establishment of religion.

Tomorrow a trial begins in Harrisburg — Kitzmiller et al. v. Dover Area School District–that could rival the famous 1925 Scopes trial in significance. The two top witnesses for intelligent design, both of them affiliated with the Discovery Institute, have pulled out before they could be deposed. It was at the Discovery Institute (formerly the Hudson Institute) that the idea of asserting that “intelligent design” had scientific standing was more or less invented by president Bruce Chapman and his old friend George Gilder over dinner in 1995, according to a remarkable article in The New York Times last month. (It costs $3.95 to read it.)

Running opposition to scientific communities, Big Deficits, an assault on the Social Security system, the invasion of Iraq — President George H. W. Bush, Bush’s father, steered away from them all and won himself a pretty good place in history (but not a second term) as the American leader who presided over the end of the Cold War. So how is his one-time scamp of a son ever to recover the mantle of leadership?

George W. Bush should think about nominating former Treasury secretary Robert Rubin to a four year term of office as chairman of the Federal Reserve Board when Alan Greenspan steps down some time early next year. He’s going to get it anyway, in four years.

Like Paul Volcker and Greenspan, Rubin is a man who plays to history. Offering him the job now would go a long way towards re-establishing the strong spirit of bipartisanship that prevailed for a time in the days after 9/11 and reassuring global markets to boot..(President Jimmy Carter’s decision to appoint Volcker in 1979 in order to appease the bond market is probably the closest precedent: same political party but very different orientation.)

The great thing would be that, by choosing Rubin, Bush wouldn’t openly affront his base. He wouldn’t have to repudiate any of his positions. Yet he could appeal very directly to the sizeable number of American, probably a majority, who long for what they think of as responsible government.  And that would put Bush back in some semblance of control. It has become a very dangerous time. Nobody wants an American president who is a three-year lame duck.

* * *

What transpired in Germany last week reminded me of something that happened in Massachusetts in 1982. An unknown Republican candidate named Ray Shamie ran against incumbent Senator Edward M. (Teddy) Kennedy.  The high tech entrepreneur ran a dogged race.  But Kennedy staffers learned that Shamie, a political novice, had briefly flirted with the John Birch Society many years before. They played the issue for all it was worth.

Shamie lost by a large margin.  But afterwards he became chairman of the state Republican Party and considerably rebuilt it. Massachusetts has had an uninterrupted string of Republican governors since 1991.

In a somewhat similar way, Gerhard Schroeder, one of the most gifted politicians that Germany has produced since World War II, used Angela Merkel’s decision to appoint a flat tax law professor as her finance adviser as a club against her.  It worked.  The 35 percent showing of Merkel’s Christian Democratic Union was keenly disappointing to those who expected her to become the next German chancellor.

I don’t know what’s going to happen next in German politics. But humiliating the neophyte is not always the best strategy in the long run.

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