October 28, 2004

The London Economist Joins the Reality-Based Community

Welcome aboard!

The London Economist endorses John Kerry. Bill Emmott said: "It was a difficult call, given that we endorsed George Bush in 2000 and supported the war in Iraq. But in the end we felt he has been too incompetent to deserve re-election."

...we think American readers should vote for John Kerry on November 2nd.

You might have thought that, three years after a devastating terrorist attack on American soil... the campaign for the presidency would be an especially elevated and notable affair. If so, you would be wrong. This year's battle has been between two deeply flawed men: George Bush, who has been a radical, transforming president but who has never seemed truly up to the job, let alone his own ambitions for it; and John Kerry, who often seems to have made up his mind conclusively about something only once, and that was 30 years ago. But on November 2nd, Americans must make their choice, as must The Economist. It is far from an easy call, especially against the backdrop of a turbulent, dangerous world. But, on balance, our instinct is towards change rather than continuity: Mr Kerry, not Mr Bush....

Mr Bush's record during the past three years has been both inspiring and disturbing. Mr Bush was inspiring in the way he reacted to the new world in which he, and America, found itself. He grasped the magnitude of the challenge well. His military response in Afghanistan was not the sort of poorly directed lashing out that Bill Clinton had used in 1998 after al-Qaeda destroyed two American embassies in east Africa: it was a resolute, measured effort, which was reassuringly sober about the likely length of the campaign against Osama bin Laden and the elusiveness of anything worth the name of victory. Mistakes were made, notably when at Tora Bora Mr bin Laden and other leaders probably escaped, and when following the war both America and its allies devoted insufficient military and financial resources to helping Afghanistan rebuild itself.... The biggest mistake, though, was one that will haunt America for years to come. It lay in dealing with prisoners-of-war by sending hundreds of them to the American base at Guantanamo Bay in Cuba, putting them in a legal limbo, outside the Geneva conventions and outside America's own legal system....

Invading Iraq was not a mistake.... But changing the regime so incompetently was a huge mistake. By having far too few soldiers to provide security and by failing to pay Saddam's remnant army, a task that was always going to be long and hard has been made much, much harder. Such incompetence is no mere detail: thousands of Iraqis have died as a result and hundreds of American soldiers. The eventual success of the mission, while still possible, has been put in unnecessary jeopardy. So has America's reputation in the Islamic world, both for effectiveness and for moral stature.

If Mr Bush had meanwhile been making progress elsewhere in the Middle East, such mistakes might have been neutralised. But he hasn't.... To succeed... America needs a president capable of admitting to mistakes and of learning from them. Mr Bush has steadfastly refused to admit to anything: even after Abu Ghraib, when he had a perfect opportunity to dismiss Donald Rumsfeld, the defence secretary, and declare a new start, he chose not to....

If the test is a domestic one, especially an economic crisis, Mr Kerry looks acceptable, however. His record and instincts are as a fiscal conservative, suggesting that he would rightly see future federal budget deficits as a threat. His circle of advisers includes the admirable Robert Rubin, formerly Mr Clinton's treasury secretary. His only big spending plan, on health care, would probably be killed by a Republican Congress.... [O]n social policy, Mr Kerry has a clear advantage: unlike Mr Bush he is not in hock to the Christian right. That will make him a more tolerant, less divisive figure on issues such as abortion, gay marriage and stem-cell research.

The biggest questions, though, must be about foreign policy, especially in the Middle East.... [Kerry] has failed to offer any set of overall objectives for American foreign policy, though perhaps he could hardly oppose Mr Bush's targets of democracy, human rights and liberty. But instead he has merely offered a different process: deeper thought, more consultation with allies.

So what is Mr Kerry's character?... His oscillations this year imply that he is more of a ruthless opportunist. His military record suggests he can certainly be decisive when he has to be and his post-Vietnam campaign showed determination. His reputation for political comebacks and as a strong finisher in elections also indicates a degree of willpower that his flip-flopping otherwise belies....

Many reader... will conclude that the safest option is to leave [Bush] in office.... But our confidence in him has been shattered.... [Kerry's] plan for the next phase in Iraq is identical to Mr Bush's, which speaks well of his judgment. He has been forthright about the need to win in Iraq, rather than simply to get out, and will stand a chance of making a fresh start in the Israel-Palestine conflict and (though with even greater difficulty) with Iran.... [T]here is a need in life for accountability. [Bush] has refused to impose it himself, and so voters should, in our view, impose it on him.... John Kerry, for all the doubts about him, would be in a better position to carry on with America's great tasks.

###

Posted by DeLong at October 28, 2004 01:05 AM | TrackBack
Comments

How conservative is The Economist?

I picked up one issues that dealt with the election and it was giving a lot of credence to the Swift Boat Liars and I didn't know if that was due to distance or they just couldn't trust a Democrat.

Posted by: KevinNYC at October 28, 2004 12:48 AM

anyone got a link?

Posted by: rdg at October 28, 2004 12:53 AM

The Economist is fairly consistently right-wing, taking a free-markets-solve-most-evils stance on most issues. This means they, for example, opposed Bush's steel tariffs, and also recently advocated legalised prostitution. It makes no secret of its editorial bias, and normally has well-argued pieces, even if I often find myself disagreeing with their conclusions. It's very good to see them finally coming out for sanity.

But, Brad, please get the magazine's name right - not every publication has its offices in the title!

Posted by: Tom Hayhurst at October 28, 2004 01:30 AM

I have no problem with getting the Economist's name wrong - they get the name of their own country wrong. They insist on calling it Britain! Fair enough as a shorthand though it is the "United Kingdom of Great Britain and Northern Ireland". It is not just pedantry though to cringe when in their recent survey of Ireland they called Northern Ireland "part of Britain".

I say this because this is how I find the Economist, full of bias underneath a veneer of empiricism and pragmatism. It has been accurately described as having a "superior, faintly ironic, white-male aura" (http://www.economist.com/displaystory.cfm?story_id=2281819) and that was by a retiring writer who loves it.

I love the economist, and look forward to every new edition, but I am glad I know better places where to get my information.


Posted by: irishboy at October 28, 2004 02:55 AM

With The Economist's track record on forecasting, I think we can safely say that the election is now George Bush's. Damn.

Posted by: Matthew at October 28, 2004 05:11 AM

Brad,

Where did you get this, btw? It's not on their website

matthew

Posted by: Matthew at October 28, 2004 05:13 AM

There's a pretty lame regurgitation of the media's "script" on Kerry's "character" in there. The rest has been said repeatedly on the internet for over a year. Clive Crook and company spent a month and half to come up with this dreck?

Posted by: Tom DC/VA at October 28, 2004 05:38 AM

I have to say that this flip-flopping meme is unworthy of anyone who wants to be accepted as a serious thinker.

Either it applies to George Bush even more so, or it should be dropped entirely in favor of an original analysis.

Posted by: sm at October 28, 2004 06:54 AM

I'm with Tom DC/VA here. Isn't sad that the editors could come up with a crime of "deeply flawed" for someone who has changed their mind. They liked Bush in 2000 and now they don't but that isn't a flip flop. Nope, we looked at the issues and saw the consequences and saw the direction of where things were going and we don't like what we see.

Yet Kerry is "deeply flawed" for going through the same process...

Gads.

Posted by: yam at October 28, 2004 06:55 AM

Bush's main claim to deserve re-election, after all, is that he has made such a mess of things it would be dangerous to change horses mid-stream. As for a "deeply flawed" Kerry, I don't think so.
He is by any standard an admirable, accomplished man.

Posted by: Bob H at October 28, 2004 07:09 AM

There have been quite a few realignments over the past few years. It isn't just that many of the saner Republicans have left the Bush camp for Kerry (after all, this election looks about as close as 2000). Many old Democrats (or at least some sort of left) have gone for Bush. What I think is interesting, though, is the quality of the "exchanges." We get The Economist, they get Christopher Hitchens, etc.

Any thoughts on the patterns here? I'm tempted to say that it's rational, analytical thinkers who are leaving the Bush camp for the Kerry camp, and it's mythopoetic romantics who are leaving the Democrats for Bush, but that's a rather too neat and tidy analysis. Of course, there are some who are leaving the Bush camp for rather specific reasons (*cough*AndrewSullivan*cough*), or those who have joined up with the Bush camp after leaving the left for their own reasons (Dick Morris?).

Posted by: Julian Elson at October 28, 2004 07:57 AM

"His military record suggests he can certainly be decisive when he has to be and his post-Vietnam campaign showed determination."

Yes, he was determined to make a name for himself, and betraying his country was how he did it. Admirable. Very admirable.

Posted by: Patrick R. Sullivan at October 28, 2004 08:00 AM

Even I am curious to know where you got the Economist endorsement leader from. The web edition is published today (Oct 28th) and I guess it will be there later in the day. But their John Kerry endorsement seems half hearted, coming so late. The print edition reaches US readers next tuesday and guess what it is already Nov 2nd!

Posted by: Vishwas at October 28, 2004 08:00 AM

I think an Economist endorsement might just unstick a few real conservative (as opposed to neo-conservative) votes. I know several people who are holding their noses and voting for Bush - many of whom, for better or worse, place a great deal of stock in what the Economist says. Then again, none of these folks live in swing states. (Damned sample bias!)

Posted by: LarryB at October 28, 2004 08:08 AM

http://www.nytimes.com/2004/10/28/business/28scene.html?

Where Are the Economists?
By JEFF MADRICK

WHEN you think about the economic issues facing the next president, you have to wonder why either candidate wants the job. There are the outsize budget deficits, high levels of private debt, a soaring trade deficit, growing numbers of Americans without health insurance, a possible bust in the housing bubble and an expansion that is not creating enough jobs and is probably already tapering to a crawl.

But at least these issues have come up in the campaign. One issue that has not is the corporate scandals that rocked the nation two years ago. Now Eliot Spitzer, New York's attorney general, has uncovered another dark hole of apparent corporate wrongdoing among the nation's largest, most respected insurance companies.

It is fair to ask where the federal government has been. But it is also fair to ask where the economists are.

"The economists are leaving this mostly to the law schools," said the Yale economist Robert J. Shiller, author of "Irrational Exuberance," the best seller about the overvalued stock market. "They are not comfortable with issues concerning human behavior."

To be a little more precise, there is a lot of economic research in the field, but it often reduces behavior to a set of predictable possibilities. "They see the organization as merely a nexus of individual contracts," complains Rakesh Khurana, an assistant professor of organizational behavior at the Harvard Business School and author of "Searching for a Corporate Savior" (Princeton University Press, 2002). "This is a highly unrealistic description and has no support in any social science other than economics."

Of course, knowing economists, that might make them proud. But the result is that many economists lean against financial regulation in general and have been in favor of only modest reforms in the wake of the scandals.

The general argument they make is that free markets check corrupt behavior more than is realized, the courts can handle other disputes, and government regulations often serve business interests anyway.

To David A. Skeel, a University of Pennsylvania law professor, however, reforms are badly needed to correct conflicts of interest and abuses in executive compensation. And the opportunity to adopt them does not come around often.

Interest in any serious reform almost fizzled, in fact, after the Enron scandal in late 2001, and was revived only with revelations that WorldCom misstated profits by roughly $11 billion.

"After WorldCom, President Bush made a speech saying it was just a few bad apples," Mr. Skeel says. "But that didn't go over well in the financial community any longer. They wanted firmer action. Finally, he supported the Sarbanes-Oxley bill."

Mr. Skeel and others say Sarbanes-Oxley, the principal reform measure to come out of the scandals, is inadequate. It largely calls for new disclosure requirements and more independent auditors. In a new book, "Icarus in the Boardroom" (Oxford University Press), Mr. Skeel proposes a number of new reforms, including more stringent demands for independent auditing. He would require auditors to be assigned by the stock exchanges themselves.

The true measure of the lame regulatory environment, however, has been the lack of action, either by the accounting standards organization or the government, to restrain the stock options so generously given to top executives.

Academic research strongly supported aligning executives' incentives with rising stock prices. But when options gave them the right to buy shares in the future at a given price, executive income soared.

In 1991, the average chief executive of a large company earned 140 times the pay of an average worker. By 2003, it was 500 times.

Lucian A. Bebchuk, professor of law, economics and finance at Harvard Law School, and Yaniv Grinstein of Cornell Business School find that a proper calculation of the total compensation of the top five executives of all companies, including salaries, stock options and pensions, came to a stunning $260 billion over the last 10 years.

This might be justifiable if there were ample evidence it was based on market performance or corporate earnings. But Mr. Bebchuk and Mr. Grinstein find that since the early 1990's pay has risen about twice as fast as the market value of stocks and much faster than corporate income. Total compensation was 5.7 percent of total corporate income in the early 1990's; it is now under 10 percent.

Mr. Bebchuk concludes that, contrary to arguments made by many economists, compensation agreements between boards and high-level executives are not done at arm's length; managers have a great deal of influence over what they get paid. Moreover, the options so widely advocated by these economists can often induce misbehavior as executives misstate earnings and liabilities, and take on dubious projects, to pump up stock prices in the short run.

Posted by: anne at October 28, 2004 08:10 AM

Y'know, Patrick: that reminds me of my algebra exam. I was workin' on group theory, and I got this tough question on "involutions," cases where a * a = e. Now, I was supposed to show that all groups of even order have at least one involution. I had no idea how to do so, so I wrote down a 4x4 group table, filled it in, tried to show there was an involution, and eventually went onto the next question, which I also answered badly. Now, I flunked that test.

So I talk to my professor. "Damnit! You stabbed me in the back by giving me this grade!"

"Well, objectively, you didn't answer the question right, Julian," he says.

"Yes, but you pointed that out! If you hadn't brought UP the fact that I botched the answers, then no one would have been the wiser, and I would have gotten a good grade," I say.

"But... you didn't know the material. My ignoring that wouldn't have changed that fact."

"You betrayed me to make a name for yourself. Admirable, very admirable."

You see, I think you're right, Patrick. The causes of failure in a project are never the failings of the people who are executing the project. They are the failings of the people who criticize the failings of the project. I'm confident that I will get through my algebra class on this principle, in spite of not knowing any algebra, on this principle, so long as I am not betrayed by self-aggrandizing, critical professors.

Posted by: Julian Elson at October 28, 2004 08:16 AM

Is this 'The Economist'? It's not on their web site. I had thought they were going to chicken out completely and endorse no-one.

To address some of the questions above, the Economist has historically been Liberal -- as in 19th century secular humanist Liberal -- with a strong libertarian bent.

Over the past 10 years the US circulation has grown sharply and the influence of the GOP has also risen. I've long suspected they were getting too many WSJ alumni.

Over this time they abandoned much of their historic legacy and began to track republican doctrine. Their attacks on Clinton has an amazing component of right wing moralizing -- in no way libertarian or liberal. Their endorsement of Bush was amazingly vacuous, and their editorial pages have sought every excuse to support him.

Meanwhile, in the back pages, a rebellion has simmered. A recent very positive review of Seymour Hersh's book is a case in point.

So if The Economist is indeed backing Kerry (remains to be seen!), then a revolution has occurred. It doesn't matter what sniveling excuses they give or what empty protests they make, it's a big move for them. It will sting a great deal at the White House. It will have no effect on the election, I doubt any readers of the Economist are in the "undecided" category.

Posted by: John Faughnan at October 28, 2004 08:20 AM

"I was workin' on group theory, and I got this tough question on "involutions," cases where a * a = e. Now, I was supposed to show that all groups of even order have at least one involution. I had no idea how to do so, so I wrote down a 4x4 group table, filled it in, tried to show there was an involution, and eventually went onto the next question, which I also answered badly. Now, I flunked that test."

Have you worked it out by now? A question like this practically *screams* "PARITY" to me when I see it.

I realize this is a bit of a diversion from the real topic of discussion, but it just seems awfully strange to me that anyone would think of explicitly writing out an actual group in order to tackle a problem of this variety.

Posted by: Abiola Lapite at October 28, 2004 08:43 AM

Yeah... I actually learned the correct answer from the professor (rather than accusing him of betraying me). :^)

Posted by: Julian Elson at October 28, 2004 08:47 AM

"We get The Economist, they get Christopher Hitchens, etc."

Don't look now, but Hitchens claims he's voting for Kerry...whether he's kidding or not is hard to tell:

http://www.slate.com/id/2108714/

Posted by: ben at October 28, 2004 08:54 AM

Julian has already done the clever take on Patrick, so i'm just going to do the dullard's take on Patrick's remark: of all the obnoxious, ill-informed, horse's ass remarks that Patrick has made here on this site, his 8:00 a.m. "betraying his country" is certainly in the top 3.

The people who betrayed the country, Patrick, were lyndon johnson and richard nixon. john kerry called them on it. it's not hard to learn actual information about these things, although patrick certainly seems to enjoy the parallel world approach.

Posted by: howard at October 28, 2004 09:20 AM

It's back to 1968, and Pat Sullivan puts on his helmet and flak jacket and picks up his M-16. It's another bad day, with the war going badly at home and abroad. Even some Marines are saying it's a crock.

And even worse for Pat, it seems that his beloved commander, Lt George W. Bush, might be what we called a "short timer" back then.

Five more days and a wake-up Pat.

Posted by: Steve at October 28, 2004 09:58 AM

"The biggest questions, though, must be about foreign policy, especially in the Middle East.... [Kerry] has failed to offer any set of overall objectives for American foreign policy, though perhaps he could hardly oppose Mr Bush's targets of democracy, human rights and liberty"

I disagree. My sincere hope and belief is that Kerry would oppose backing and supporting a coup d'etat of a democratically elected venezuelan president.

If this is the Economist, why don't they spend more time critiqing GWBs economic initiatives in their endorsement. Over the last 4 years i think almost every article related to economic, health, and energy related legislation was preceeded by some variation of the adjective clause "pork barrel loaded"

I think im still gonna let my subscription run out. As a non recipient of that pork, the playing field is uneven where i have been economically marginalized to the point where i can't justify $150 a year for a flip-flop type magazine.

Posted by: Clayton at October 28, 2004 10:17 AM

The link for the endorsement below
http://www.economist.com/opinion/displayStory.cfm?story_id=3329802

"But our confidence in him has been shattered."

"After three necessarily tumultuous and transformative years, this is a time for consolidation, for discipline and for repairing America's moral and practical authority. Furthermore, as Mr Bush has often said, there is a need in life for accountability. He has refused to impose it himself, and so voters should, in our view, impose it on him, given a viable alternative. John Kerry, for all the doubts about him, would be in a better position to carry on with America's great tasks.
"


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Posted by: refinance mortgage at October 29, 2004 03:39 AM

oooh, i love all this talk of group theory :)...
i am a second year maths student in UK, and just doing some Linear Algebra. its really cool

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