Saturday, February 7, 2009

Back on World Stage, a Larger-Than-Life Holbrooke

Back on World Stage, a Larger-Than-Life Holbrooke. By Jodi Kantor
TNYT, February 7, 2009

Stashed in a drawer in his Manhattan apartment between snapshots of family vacations, a photograph shows Richard C. Holbrooke on a private visit to Afghanistan in 2006. He is mugging atop an abandoned Russian tank, flashing a sardonic V-for-victory sign and his best Nixon-style grin. The pose is a little like Mr. Holbrooke himself: looming, theatrical, passionate, indignant.

Three years later, he has inherited responsibility for the terrain he surveyed from that tank. As President Obama’s special representative to Afghanistan and Pakistan, Mr. Holbrooke will help reformulate and carry out American policy in what many call the most problematic region on earth.

Between them, the two countries contain unstable governments, insurgencies, corruption and a narcotics trade, nuclear material, refugees, resentment of American power, a resurgent Taliban, and in the shadows of the tribal region that joins the two countries, Al Qaeda and presumably Osama bin Laden.

“You have a problem that is larger than life,” said Christopher R. Hill, a longtime colleague expected to be named as the new ambassador to Iraq. “To deal with it you need someone who’s larger than life.”

Few other diplomats can boast of the accomplishments of Mr. Holbrooke, 67, who negotiated the Dayton peace accords to end the war in Bosnia. But as he lands in Pakistan on Monday, back on duty after eight years of a Republican administration, he is still an outsider in the Obama circle, having only recently developed a relationship with the new president. His longtime foreign policy pupil, Hillary Rodham Clinton, has the secretary of state job he has always wanted. And he has taken on a task so difficult that merely averting disaster may be the only triumph.

“We are still in the process of digging our way into the debris,” Mr. Holbrooke said in an interview. “We’ve inherited an extraordinarily dysfunctional situation in which the very objectives have to be reviewed.” Mr. Obama and Mrs. Clinton chose Mr. Holbrooke because of his ability to twist arms as well as hold hands, work closely with the military and improvise inventive solutions to what others write off as insoluble problems. But no one yet knows how his often pyrotechnical style — he whispers, but also pesters, bluffs, threatens, stages fits and publicizes — will work in an administration that prizes low-key competence or in a region that is dangerously unstable.

“Richard C. Holbrooke is the diplomatic equivalent of a hydrogen bomb,” said Strobe Talbott, a former deputy secretary of state and a friend.

Return to Washington

Already, Mr. Holbrooke’s return to Washington has caused tremors. His arrival at the State Department has rattled colleagues who remember him as someone who cultivates the powerful and tramples those with less to offer. Others worry about his assiduous courtship of the media. Judging from interviews with several officials, there seems to be confusion about whether the American Embassies in Pakistan and Afghanistan will be controlled by Mr. Holbrooke or the regular State Department overseers.

And even friends acknowledge that Mr. Holbrooke is intently focused on his own legend. (Many people have personal trainers; Mr. Holbrooke has a personal archivist.)

For now, Mr. Holbrooke is both raising expectations and lowering them. He is talking about Afpak — Washington shorthand for his assignment — as his last and toughest mission. But along with the rest of Mr. Obama’s foreign policy staff, he is also trying to redefine success in the region, shifting away from former President Bush’s grand, transformative goals and toward something more achievable.

On Monday, Mr. Holbrooke begins a 10-day tour of the region, where he will try to vacuum up as much information as possible, he said, visiting high-level officials and local ones, women who serve in the Afghan National Assembly, military bases, nongovernmental organizations, antinarcotics programs, refugee camps and the perilous tribal region.

There is a reason for this wide-ranging tour: because official Afghan and Pakistani leaders are seen as weak, Mr. Holbrooke may have to seek alternative partners, a task to which he is naturally suited, according to Wesley K. Clark, the retired Army general.

“Richard Holbrooke sees power the way an artist sees color,” General Clark said.

Studying Afghanistan

Until a few years ago, Mr. Holbrooke had been to Afghanistan exactly once: in 1971, when he wandered around with a backpack, he said in the interview last week as he frowned at television reports of a kidnapping in Pakistan. The setting of the interview, Perseus LLC, a Manhattan private equity firm where he worked as vice chairman until recently, was an elegant one, at least until he began clipping his fingernails with office shears.

During the Bush years, Perseus was Mr. Holbrooke’s base, providing him with what friends say was a relatively undemanding job and lavish compensation as he bounced from topic to topic, almost as if seeking a problem tough enough to rivet all of his attention. He founded the American Academy in Berlin, which promotes cultural relations, and used a formerly quiet nonprofit called the Global Business Coalition to match corporate leaders with public health issues. He became chairman of the Asia Society, an institution mostly known for art exhibits, and pushed it toward more policy discussions.

At night, he retreated to his softly lighted, wood-paneled apartment in the Beresford, the grand Central Park West building, or to the homes in Colorado or the Hamptons that he shares with his wife, Kati Marton, a journalist and human rights advocate.

But with a Republican president, Mr. Holbrooke’s nose was pressed to the glass of the statecraft window. On the morning of the Sept. 11 attacks, when the greatest foreign policy challenge in generations came crashing into his own city, Mr. Holbrooke, the former American ambassador to the United Nations, sat in traffic like any other New Yorker.

Few New Yorkers, though, decide to inspect Afghanistan for themselves. By 2006, alarmed at the deteriorating conditions there and lured by a relative working for the United Nations, Mr. Holbrooke traveled privately around the country, returning for another visit in 2008. He went to a police training center in Herat, near the Iranian border, where he watched retired policemen from Alabama try to train Afghans. In Khost, Mr. Holbrooke slept on a cot at a reconstruction project office and met with madrasa students and former Taliban fighters, pouring the tea himself to convey respect, according to Kael Weston, a State Department political officer who served as his guide.

At another stop, Mr. Holbrooke met with newly elected female leaders who barely seemed to know the basics of legislation. Everywhere, Mr. Holbrooke passed enormous new villas built by narcotics smugglers.

At a maximum-security prison north of Kabul, the capital, Mr. Holbrooke fell into a long conversation with a senior Taliban operative, a mullah who patiently answered questions and then asked one of his own:

“When will you and the Americans be leaving?”

Mr. Holbrooke told him he did not know. “The more you think about it, the more it highlights the dilemma,” he said in the interview: the United States cannot say it is leaving, nor can it say it is staying forever.

At home, Mr. Holbrooke used the Asia Society to assemble his own personal think tank on Afghanistan. The group, which included Gen. James L. Jones until he became national security adviser, will soon release a study recommending that the United States declare an end to President Bush’s “war on terror” and negotiate with Taliban members willing to separate from Al Qaeda. Mr. Holbrooke has now left the group, but thanks to him, some of the regional experts who wrote the study are now briefing Mrs. Clinton.

Cultivating the Powerful

Every December, Mrs. Clinton can be found in Mr. Holbrooke and Ms. Marton’s apartment, laughing through an annual dinner they throw in her honor. The guests and the entertainment have varied — Glenn Close has sung carols, Robert De Niro and Matt Damon have sat alongside business figures and writers, and one of the tamer toasters called Mrs. Clinton the nation’s “first shiksa,” or gentile. But Mr. Holbrooke and Ms. Marton always give Mrs. Clinton fulsome toasts of their own.

From the beginning of her Senate career, Mr. Holbrooke served as a foreign policy adviser to Mrs. Clinton, contributing ideas for major speeches and weighing in on crises. Sometimes, Mrs. Clinton or her staff reached out to him, aides said. But Mr. Holbrooke was not exactly shy about calling or sending e-mail messages on his own. The moment the Democratic primaries ended, Obama aides say, Mr. Holbrooke showered them with ideas as well.
“I did not cross the DMZ until a cease-fire was declared,” he now says jokingly.

By the time Mr. Obama sat down for a sustained conversation with Mr. Holbrooke, he was president-elect, and Mrs. Clinton was already the leading candidate for secretary of state. Once she took the job, Mr. Holbrooke was considered for the deputy post, but the idea was quickly rejected: he was a negotiator, not an administrator, and the secretary and the president wanted to put a powerful person in charge of dealings with Afghanistan and Pakistan, State Department officials said.

“Richard represents the kind of robust, persistent, determined diplomacy the president intends to pursue,” Mrs. Clinton said in an interview. “I admire deeply his ability to shoulder the most vexing and difficult challenges.”

Thanks to Mr. Holbrooke’s negotiating skills, he won himself an unusual title: representative rather than envoy, meaning that his responsibilities extend beyond the State Department and that he will report to the president, but through Mrs. Clinton. It is a bit of Washingtonese whose precise meaning will become clear only with time.

His first task is to help lead a total review of American policy in the region, an assignment on which Mr. Obama has imposed a 60-day deadline. Another is to learn as much about Pakistan as Mr. Holbrooke has about Afghanistan; he is hiring staff members to fill some of the gaps in his knowledge, according to colleagues.

Asked about Mr. Holbrooke’s sometimes overbearing qualities, Mrs. Clinton replied with mock innocence. “Gee, I’d never heard that he could be any of those things before,” she said. Then she turned serious. “Occasionally he has to be, you know, brought down to earth and reined in.”
Ms. Marton, in defending her hard-driving husband, said, “Richard is all about outcome.” She described him and the new president as “kindred spirits” in their views on diplomacy in Afghanistan and Pakistan.

Both Ms. Marton and Mr. Holbrooke sounded relieved, even a little surprised, that he found a place in the Obama administration. Now, she said, “he won’t be able to look back and say he didn’t get a shot.”

Conservative Views: Obama’s SG Pick Elena Kagan—Establishment Clause

Obama’s SG Pick Elena Kagan—Establishment Clause. By Ed Whelan
Bench Memos/NRO, Saturday, February 07, 2009

Last month, I discussed (here and here) SG nominee Elena Kagan’s vigorous opposition to the Solomon Amendment and the extremist rhetoric (“a profound wrong—a moral injustice of the first order”) she deployed against the Don’t Ask, Don’t Tell law.

I’d now like to call attention to a memo (dated October 22, 1987) that Kagan wrote as a law clerk to Justice Thurgood Marshall in the case of Bowen v. Kendrick. As Kagan’s memo explains, at issue in that case was the Adolescent Family Life Act, which authorized federal funds to support demonstration projects designed to discourage adolescent pregnancy and to provide care for pregnant adolescents. AFLA specifically contemplated that “religious organizations” could receive funds under the Act. The district court ruled that the inclusion of religious organizations violated the Establishment Clause.

In her memo to Justice Marshall, Kagan agrees with the district court’s Establishment Clause ruling and adds this remarkable explanation (underlining in original; italics added):
The funding here is to be used to support projects designed to discourage
adolescent pregnancy and to provide care for pregnant adolescents. It
would be difficult for any religious organization to participate in such
projects without injecting some kind of religious teaching.… [W]hen the
government funding is to be used for projects so close to the central concerns
of religion, all religious organizations should be off limits.

The italicized sentences reflect a bizarre understanding of religious organizations. How is it that it “would be difficult for any religious organization to participate in [projects designed to discourage adolescent pregnancy and to provide care for pregnant adolescents] without injecting some kind of religious teaching”? Kagan offers no explanation. Either she had a remarkably narrow understanding of how many religious organizations operate, or she had a remarkably expansive view of what counts as “religious teaching”.

It’s also strange that Kagan, in the context of Establishment Clause concerns, would label projects designed to discourage adolescent pregnancy and to provide care for pregnant adolescents “so close to the central concerns of religion”. How do such projects in the abstract (apart from any particular concerns that could arise in their application) remotely raise genuine Establishment Clause concerns?

In (very limited) defense of Kagan, the aggressive and reflexive secularism that her comments reflect was part of a liberal orthodoxy on the Establishment Clause that had much greater currency in the mid-1980s than it does now.

President Obama purports to have grand plans for his faith-based office. If Kagan’s current Establishment Clause views are anything like they were two decades ago, they ought to set off alarm bells for those who recognize that the Establishment Clause should not be misused to discriminate against religious organizations.

Barney Frank: TARP's compensation curbs could be extended to all businesses

Barney Frank: TARP's comp curbs could be extended to all businesses. By Neil Roland
Would be part of broader bill limiting hedge funds, credit-raters, and mortgage securitizers; 'deeply rooted anger'
Financial Week, February 3, 2009 3:01 PM ET

Congress will consider legislation to extend some of the curbs on executive pay that now apply only to those banks receiving federal assistance, House Financial Services Committee Chairman Barney Frank said.

“There’s deeply rooted anger on the part of the average American,” the Massachusetts Democrat said at a Washington news conference today.

He said the compensation restrictions would apply to all financial institutions and might be extended to include all U.S. companies.

The provision will be part of a broader package that would likely give the Federal Reserve the authority to monitor systemic risk in the economy and to shut down financial institutions that face too much exposure, Mr. Frank said.

Also included in the legislation: registration requirements for hedge funds and proposals aimed at curbing conflicts of interest at credit-rating agencies such as Standard & Poor’s.

The bill, which the committee is working on in consultation with the Obama administration, also will require financial institutions that bundle mortgages into securities to share in potential losses. This would give banks and mortgage-specialists an incentive not to make bad loans, he said. Institutions that securitize loans improperly will incur tougher penalties.

“There have been too few constraints on major financial institutions incurring far more liability than they could handle,” Mr. Frank said.

The committee hopes to have a general outline of the legislation by early April, he said. It will be the panel’s first priority in its effort to restructure financial regulation in the wake of the worst economic crisis since the Great Depression.

Mr. Frank has summoned the CEOs of Citigroup, J.P. Morgan Chase and the seven other U.S. financial firms that got $125 billion from TARP to testify at a Feb. 11 committee hearing.

Mr. Frank seems to be in synch with the Obama administration in his plans for executive compensation.

Treasury Secretary Timothy Geithner said last month that he might try to extend to all U.S. companies a restriction that prohibits bailout banks from taking a tax deduction of more than $500,000 in pay for each executive.

The Troubled Assets Relief Program legislation enacted in October seeks to give companies receiving aid under the $700 billion bailout a number of incentives to curb what it calls excessive executive pay.

Mr. Geithner said he would consider “extending at least some of the TARP provisions and features of the $500,000 cap to U.S. companies generally.”

Under the legislation, banks receiving bailout money must limit golden parachute payments to senior executives to no more than three times the executives’ base pay. The companies also must subject any bonuses or incentives to clawbacks if the payouts are based on bank’s misleading financial statements.

In addition, bailout recipients can’t offer top managers incentives that “encourage unnecessary excessive risks that threaten the value of the financial institution.”

These limits apply to the chief executive officer, chief financial officer and the next three most highly compensated executives in a bank receiving rescue funds.

Mr. Frank said provisions on golden parachute payments and bonus clawbacks would probably be in the legislation, though he declined to provide more detail because “we’re early in the process.”

A congressional oversight panel headed by Harvard Law professor Elizabeth Warren also recommended last week that Treasury consider revoking executive bonuses at failed institutions getting federal aid.

Currently, these institutions must subject bonuses to clawbacks only if the payouts are based on banks’ misleading financial statements.

The top Republican on the committee, Spencer Bachus of Alabama, said last month he has reservations about giving the Fed new powers, such as the authority to monitor systemic risk.

Mr. Frank said today that after lawmakers address issues on systemic risk, they will consider how to bolster investor protection via changes at the Securities and Exchange Commission. The committee also will review proposals to assist struggling homeowners and expand the housing supply, and to strengthen international financial institutions such as the World Bank, he said.

Federal president's weekly address

White House, Saturday, February 7th, 2009 at 5:00 am

There was bad news and then there was good news.

Yesterday we learned that in January, the country suffered its largest one-month job loss in 34 years.

But last night, the Senate struck a compromise on the economic recovery plan and put us on our way to giving the economy the short-term jolt and long-term investments it needs.

"Americans across this country are struggling, and they are watching to see if we're equal to the task before us," the President says in this morning's Weekly Address. "Let's show them that we are."

Watch the President's address and read the full text here.

Industry views: EPA Decision to Move Towards Costly Regulations Disappointing

EPA Decision to Move Towards Costly Regulations Disappointing
IER, Feb 06, 2009

Washington, DC – Institute for Energy Research (IER) President Thomas J. Pyle today issued the following statement on the Obama Administration’s decision to move forward in the process to allow California to designate its own emissions standards for automobiles, which will force the American auto industry to take on massive new cost and compliance burdens and likely raise car and truck costs for consumers across the country:

“It is disappointing that the Obama Administration chose to move towards imposing this regulation—which basically creates a $3,000 car tax—at a time when our nation faces record unemployment, a struggling auto industry, and a troubled economy. Only a few months ago, taxpayers sent billions of their hard-earned and much-needed money to bail out the auto industry. That investment will surely be a waste if we allow Sacramento to set the standards for Detroit’s business plan.

“Alarmingly, there is no real evidence to support claims that the heightened emissions standards will even affect the environment. In fact, if all cars and trucks in the United States met this standard today, emissions increases from the rest of the world would more than replace those California reduced within a mere five months. Now is not the time to hike costs for consumers and hurt our auto industry to attempt a proposal that probably won’t meet its goals.”

NOTE: The Environmental Protection Agency (EPA) today began the legal process required to green light California’s request to create its own emissions standards for automobiles. The Auto Alliance has estimated that the mandate will add up to $3,000 to the cost of each car and will cause the auto industry to slip further behind the technological curve as it struggles to adjust to California’s choices, rather than taking much-needed steps to meet the imperatives of customer choice.

Does SCHIP Work?

Does SCHIP Work? By Michael F. Cannon
Obama wants to expand the program, but eliminating it would be best for all involved.
NRO, February 02, 2009, 4:00 a.m.

Pres. Barack Obama proclaimed in his inaugural address, “The question we ask today is not whether our government is too big or too small, but whether it works.” If he was serious, he should veto the $115 billion expansion of the State Children’s Health Insurance Program that is soon to reach his desk—and insist that Congress eliminate the program entirely.

For two years, SCHIP has been mired in an ideological standoff. Republicans described the Democrats’ proposed expansions—which were more moderate than those in the current bill—as “socialized medicine.” SCHIP supporters, like Nobel Prize-winning economist Paul Krugman and columnist E.J. Dionne, claim the program works.

Researchers who actually study the program find that SCHIP does help uninsured children find coverage, but at great expense. They find no evidence that SCHIP actually improves health outcomes, or that the program addresses the systemic quality problems that confront even insured children.

SCHIP’s great expense stems from the fact that in many cases, it simply enrolls children who were already insured privately. Economists Jonathan Gruber and Kosali Simon estimate that out of every ten children added to the SCHIP rolls, six already had private coverage. Only in government is a program deemed to “work” when it covers four uninsured children for the price of ten.

The current proposal will only exacerbate this problem. Congressional Democrats want to expand SCHIP to children in families of four earning up to $80,000 per year. The Congressional Budget Office reports that 77 percent of such children already have private health insurance.

In terms of actually improving health outcomes, SCHIP looks even worse. Economist Robert Kaestner and his colleagues conclude, “The proposition that health insurance is the cure for adverse health outcomes among poor and near-poor children has not been adequately demonstrated.” About SCHIP specifically, they write, “It is remarkable that there is so little empirical evidence to support so large an expenditure.”

Economists Helen Levy and David Meltzer write that there is “no evidence” that SCHIP and similar programs are a cost-effective way of improving children's health. They observe that targeted health programs, policies that increase incomes, or even improved educational opportunities could deliver greater health improvements per dollar spent.

It’s not even clear that SCHIP’s method for improving children's health—expanding insurance coverage—is the right one. The New England Journal of Medicine reports large gaps between the quality of care children receive and what they should receive, even if the children have insurance. That study’s authors conclude, “Expansion of access to care through insurance coverage, which is the focus of national health care policy related to children, will not, by itself, eliminate the deficits in the quality of care.”

One thing SCHIP does accomplish is to discourage work. SCHIP and similar programs create enormous disincentives to climb the economic ladder. A single mother of two earning minimum wage in New Mexico who increased her earnings by $30,000 would find no change in her net income: She would pay an additional $4,000 in taxes and lose $26,000 in SCHIP and other government benefits, according to data compiled by the Urban Institute for the federal government.

Expanding SCHIP would pull even more families into that low-wage trap. Since income is an important determinant of health outcomes, expanding SCHIP could actually harm many children’s health.

The one positive thing that can be said of SCHIP is that, for all the inefficiencies and perverse incentives it creates, it does insure some children who wouldn’t have had coverage otherwise. But oddly enough, eliminating SCHIP could have this effect to an even greater degree.

When Congress eliminated Medicaid benefits for non-citizen immigrants in 1996, opponents predicted an explosion in the number of uninsured immigrants. But according to Harvard economist George Borjas, that didn’t happen: Immigrants sought out jobs that provided benefits, and were so successful that the employer-provided insurance completely offset the loss in government benefits. In fact, in the states that offered the fewest benefits, the immigrant insurance rate rose.

SCHIP families, which are more affluent than the families affected by the 1996 policy, would likely fare even better.

If President Obama wants to cover more uninsured children, he should set ideology aside and repeal SCHIP. After all, you can’t argue with what works.

Michael F. Cannon is director of health-policy studies at the Cato Institute and co-author of Healthy Competition: What’s Holding Back Health Care and How to Free It.

State Dept on Russian Bases in Georgia

Russian Bases in Georgia, by Robert Wood, Acting Department Spokesman
US State Dept, Washington, DC, Fri, 06 Feb 2009 17:36:46 -0600

The United States regrets the Russian Federation’s expressed intention to establish bases in the territory of Georgia as contrary to the spirit and the letter of Russia’s existing commitments. These Russian plans include a naval base at the port of Ochamchire, army bases in the Abkhazia and South Ossetia regions of Georgia, and the possible deployment of combat aircraft.

Under the August 12 and September 8 ceasefire agreements between Georgia and Russia, mediated by the French EU Presidency, Russia committed to return its forces to their pre-war numbers and locations in South Ossetia and Abkhazia. This latest announced build-up of the Russian Federation’s military presence in the Georgian regions of Abkhazia and South Ossetia without the consent of the Georgian Government would clearly violate that commitment. Implementation of these basing plans would also violate Georgia’s sovereignty and territorial integrity, to which Russia repeatedly committed itself in numerous United Nations Security Council resolutions.

The U.S. urges Russia to respect Georgia’s sovereignty and territorial integrity and facilitate stability in the region through implementation of its commitments and participation in the Geneva Process.

PRN: 2009/110