After ‘The Wire’ ended, actress Sonja Sohn couldn’t leave Baltimore’s troubled streets behind - The Washington Post

After ‘The Wire’ ended, actress Sonja Sohn couldn’t leave Baltimore’s troubled streets behind

By Phil Zabriskie, Published: January 27

Sonja Sohn stood in front of her audience, confident about the performance she was about to give. This wasn’t surprising, considering her history as an actress who was just coming off a five-year run as Det. Shakima “Kima” Greggs on HBO’s “The Wire,” one of the most critically acclaimed shows in television history. To project professionalism, she had pulled her hair back and was wearing pressed slacks and a collared shirt. Her motivation was clear, her research was done, and after many months of preparation, she was ready.

There was no script, though. Her “stage” was a classroom at the University of Maryland School of Social Work, and her “audience” — made up of teenagers and young adults whose lives could have beenmined for “The Wire” — wasn’t about to grant her anything based on her past credits. Not 18-year-old Tyrea Daniels, who guesses he had been arrested eight or nine times by then for selling drugs and stealing cars; 16-year-old Latavia Cornish, who says she was “always outside, stealing, getting locked up”; or 21-year-old Sean Hawkins, who had been “thuggin’ it up” since he dropped out of high school, “selling drugs, partying, stealing, robbing everything in sight.” They and about 15 people from similar backgrounds were slouched in their chairs, warily eyeing Sohn and each other.

This was late in 2009, during the first session of ReWired for Life, a program Sohn had conceived of years earlier and devoted herself to building after “The Wire” signed off. She hadn’t been ready to leave the show behind, neither what it stood for nor the Baltimore streets on which it had filmed. It was more than that, though. “I had an extraordinarily strong sense of purpose,” she says, in the same half-purr, half-growl voice familiar to fans of “The Wire.” “My entire life had become about this.”

All of which meant little to Daniels, Cornish and Hawkins. It was cool to meet Kima because they had loved the show and loved seeing their reality depicted on screen. And free food was never a bad thing. Beyond that, they didn’t expect much. They had all been prodded to come by probation officers, counselors and parents.

“We are talking about a throwaway population that adults think are too far gone,” Sohn says later. “We’re talking about kids that people have given up on over and over and over again. They don’t feel like anyone is there for them. They may have parents who love them, but they’ve been falling back on themselves for so long that if you come in front of their faces talking, and not backing it up with action, you just become another one of the people who have disappointed them.”

Sohn, then in her early 40s, was certain that if the right people came to ReWired at the right time, they could benefit immensely, maybe even transform their lives. She didn’t expect it to happen in that first session, but she believed in herself, she believed in her plan, and she believed that transformation, even here, was possible.

Hawkins, for one, wasn’t buying it. He had grown up near Green Mount Cemetery on the east side, then over by Walbrook Junction on the west side. His father was in jail. His mother and her boyfriend encouraged him, but their voices faded when he stepped out the door and walked past one boarded-up house after another. He was clearly smart, but he quit school because the people he saw getting ahead — getting paid, getting girls, getting respect — were the guys in the game, hustling. After a string of arrests left him facing the possibility of a long prison stretch, however, he began to see things differently. He was about to become a father, and his girlfriend already had another child, meaning he was on the verge of abandoning his kids just like his father had done. He resolved to make changes, but GED programs and job hunting made him feel, he says, like “a blind man in a black room trying to find a black hat.”

Sohn was offering to help, but he figured she must have had an angle. Why else would she be here?

“A lot of the way I live my life has nothing to do with logic,” Sohn says, but Hawkins didn’t know that and didn’t know how committed Sohn would prove to be. Sohn might not have known herself, actually. But she did believe that she could understand what these kids had been through — because she’d been through it, too.

***

Landing the part of Kima was a huge break, but when filming started in 2002, Sohn was awash in anxiety, forgetting lines, feeling disoriented. She was a professional actress in her mid-30s. She had done this before. This shouldn’t have been so hard.

But “The Wire” wasn’t a typical TV series. Over five seasons, it chronicled the uneven, often quixotic efforts of police, drug dealers, junkies, teachers, dock workers, kids and ex-cons to improve their lots. The show’s writing team, led by former Baltimore Sun staffer David Simon and featuring former Baltimore detective and public school teacher Ed Burns, weren’t trying to create entertainment per se, says Simon, but rather “a dialectic about urban issues and poverty, and the drug war and economics.” They pursued authenticity above all else, ruthlessly refusing to provide happy endings and instead using language, location and narrative to pull viewers into a world of, as Simon puts it, “people who have been separated economically, socially, politically from the rest of America” — and then insisting that we all share stakes in, and responsibility for, the future we are building.

For Sohn, though, the material was “kicking my whole thing up,” she says. She had grown up in Newport News, Va., in an area much like the Baltimore neighborhoods in which “The Wire” was set. Cops were not the good guys where she came from, so even acting the part was unnerving. The show’s broader message made it palatable, says Simon. “I think that was a great relief to her, because I think she had some latent sense of horror that she was going to be working on a cop show as a cop,” but the fractured lives in the script conjured barbed memories. Her father was an African American Army vet from the poor side of Winston-Salem, N.C., her mother a Korean he had met while in the service who had grown up during the worst of the Korean War. Sohn was raised in a public housing project that resembled the West Baltimore low-rises the drug crew in “The Wire” controlled in the show’s first season. There was a good deal of fighting in the streets and in her home. Her father was prone to violent rages during which he battered Sohn’s mother and threatened to do worse.

Home became a place of pure misery, even more so when a babysitter, an older girl, started molesting her. She wanted to run away but didn’t want to leave her mother alone to endure her father’s abuse. Ducking down a nearby alley, she’d write her thoughts on the wall with a broken piece of brick. Or she’d go to a school playground, climb a slide shaped like a rocket ship, and say, again and again, “It’s going to get better,” until one day, better wasn’t enough. “It’s going to be great!” she announced.

“I don’t stay disempowered for long,” she says. But while school, sports and poetry kept her going in her youth, she also started using and selling pot and cocaine. She managed to keep up her grades and hold a job through high school, though, then went to New York, where she started, but didn’t finish, design college. She did, however, fall in love with and marry someone she describes as a nice, stable middle-class guy. They had two daughters together and lived comfortably in Brooklyn, but chaos was never far away. Her drug use continued, and her brother, who had drifted to North Carolina and had his own issues with drugs, was shot and killed after befriending a woman with a violently jealous boyfriend.

Sohn realized she had to make some big changes. Intense therapy and painful self-reflection helped her get off drugs and recalibrate her life. Her marriage didn’t survive, but what she calls her “healing” later involved mending hurts she had both endured and inflicted. Over time, she established good relationships with her ex, her daughters, even her parents — who, she came to think, did their best despite their own tumultuous upbringings.

And she was grateful for her mother’s devotion and the protection she tried to provide (she is now deceased). Sohn was grateful, too, for her father’s encouragement and social justice teachings. He had always discussed the issues of the day with young Sonja, always pointed out political and civic leaders he admired for trying to improve the lives of others. The violence, she believes, stemmed from undiagnosed or mistreated mental illness, an outcropping of his youth — for years, he wasn’t allowed to touch his tuberculosis-ridden mother — and his time in Korea. In later decades, he got treatment, found a supportive church and became a positive part of her life again.

***

Kima and Sonja persevered together, the character surviving a shooting, the actress settling into her role and then growing more invested in the real-life narratives all around her.

Simon and Burns, who had spent a year reporting on a single drug-strewn block to co-write a book called “The Corner,” were both intimately familiar with the aching desperation and stagnant resignation afflicting much of Charm City. Brooklyn-born Jamie Hector, who played ascendant drug kingpin Marlo Stanfield, ran a nonprofit theater group in New York for at-risk youth. Gbenga Akinnagbe — a.k.a. Chris Partlow, Stansfield’s dead-eyed hit man — was the son of Nigerian immigrants who spent part of his youth in homeless shelters before riding his wrestling skills to college. To them and others, the material was personal and important, part of something larger.

In 2008, after the final season, Sohn, Hector and Akinnagbe went to North Carolina to campaign for Barack Obama. Sohn was stunned to learn that their work on “The Wire” had bequeathed them a platform. “Something happened to her,” Hector says. “I guess she realized the amount of change she could effect in the lives of young folks.”

Sohn started wondering: What if they took “The Wire” into schools, dissected how characters negotiated their environment and got kids to talk about how they did the same in their lives? Could that help them step outside themselves and see how they were making decisions, how there could be other possibilities?

She shared the idea with Simon, saying she wanted to start an organization called ReWired for Change (ReWired for Life is its pilot program). “I was surprised,” he says. Most TV and movie people who adopt a cause, he adds, “say a few words, they’ll go to a dinner, they’ll give some money, but this is time. Time is the ultimate expenditure.” He gave his blessing but worried about how Sohn would raise money and whether she could succeed where even the best-intentioned Baltimoreans had not. “There was a part of me who wanted to put my arm around her and say” — he takes on an almost pitying tone — “you are about to go on a journey.”

Sohn gathered advice and support at the panels and the college classrooms that cast members from “The Wire” were frequently invited to. She cultivated local contacts and tapped Simon and “Wire” cast mates to join the board and give money. A few Baltimoreans held fundraisers. To cover shortfalls, Sohn figured, “I could drain myself until we got this thing off the ground.”

ReWired for Life, she believed, should be community-based and grounded in both social justice and academic theory. Its facilitators needed credibility, so she recruited “Elder” Ted Sutton, who in the late 1980s had been a shotgun-toting lieutenant under legendary Baltimore drug kingpin Melvin Williams but now counseled gang members looking to get out of the game, and Greg “Shamsuddin” Carpenter, a convert to Islam who spent two decades in prison but now helped former inmates adjust to life on the outside.

Both were there when Sohn met Hawkins, Daniels, Cornish and the others for the inaugural session and explained that they were embarking on four 12-week “modules.” Initially, Sohn said, they’d focus on self-reflection, on ways “to become more aware of yourself and your history, and to understand how you got to where you are.” The second module would break down “how you think and how your thinking informs your decision making.” This was greeted with a collective shrug, but she pressed on. “The next couple of pieces revolve around your understanding of the world around you” — relationships and affiliations with everyone from friends and family to congregations and cops — and then “taking that critical-thinking model to the world around you, so you can give back.”

***

They met twice a week, two hours per day. They watched parts of Season 1, which focused on the drug trade, and Season 4, which centered on the school system. Then, Sutton, Carpenter and Sohn tried to get the participants to discuss what they had seen and relate it to their own lives. Early on, the conversation was muted. That changed after they watched clips from Season 4 during which four eighth-graders — Naimond, Dukie, Randy and Michael — were coming of age and trying to negotiate the streets. The characters were starting to understand what they wanted, what they needed, and the extent to which they were on their own. That day, Hawkins recalls, “we all started to talk.”

Prompted by other episodes and other exercises in the ensuing weeks, they began sharing stories of fractured home lives, friends who had died, close calls and run-ins with the police. They talked about morality, cause and effect, decisions and consequences. Sohn never dismissed their responsibility, but she knew these were people shaped by events that unfolded over generations, people who developed skills they needed to survive, destructive though they may have been. Daniels, for instance, had been in foster care his entire life, moving from home to home, with no money, no real sense of security. “Tyrea has no family,” Hawkins says with astonishment. “I’ve never met anyone who says, ‘I have no family,’ and they really mean it.

“I went out there to hustle because I wanted to, because I felt like doing it. He hustles because he has to. He robs because he has to.”

Daniels himself recalls being urged to stay in school, but school was just another place he had to protect himself. “When I go to school, I got to watch my back,” he says. And after school, “when I walk the streets, I got to watch my back.”

The group dwindled from 20 to 15, then 10. Those who stayed, though, grew more engaged. They knew that Carpenter, Sutton and, especially, Sohn didn’t have to be there. Hawkins says a measure of trust developed. Toward the end of the session, Sohn and Carpenter led a field trip to North Carolina, stopping on the way in Newport News. “She showed us the project she came from, the school she went to,” Daniels recalls. He says it was like she was telling them: “I went through this, I got my [expletive] together,” and they could, too.

The group became its own support network. When Cornish saw her uncle get shot and killed at a barbecue, and when Hawkins’s younger stepbrother and another good friend were murdered while sitting on an East Baltimore stoop, they could reach out to others who understood what they were going through. In times past, Hawkins would have sought revenge, but he had taken to heart the lesson that “the choices you make lead to consequences.” (He says the killer was later killed in prison.)

This wasn’t Hawkins’s last challenge, though. Sohn nominated him for a mayoral anti-gang violence initiative, so he’d be receiving an award at City Hall. On the day of the ceremony, while waiting for Sutton to give him a ride, Hawkins got a call telling him that some guys had gone to his mother’s house looking for his twin sister’s boyfriend. Hawkins didn’t know the whole story, but “my twin sister, that’s everything to me,” he says, the anger rising in his voice as he remembers. “When she calls, I come running, because she doesn’t call me for something small.”

Sutton, an imposing man known as “Crazy Ted” in his gangster days, had gone through something similar when he was getting out of the game. On the eve of his college graduation, his crew wanted him to help take care of a rival. He said no, and the next day got his degree. He channeled that experience to counsel Hawkins, who Sutton could see was enraged and thinking about violence. As Sutton recalls: “I was like, ‘Look, this is that fork in the road right now. You can already play this whole scenario out in your mind like a chess game.’ ” There’d be a confrontation, retribution, and someone would end up dead or in prison.

“The 15 bus is right there,” Sutton told him, pointing down the street. “You can go to your mother’s house. Or you can get in this car with me.” At the end of the day, “you can be looking at your award at home and happy, or you can be down at central booking.”

Sutton’s words pierced Hawkins’s rage. “I looked, and I thought, and I went on and did what I was supposed to do, because any setback would not take me forward in life,” he says. “That would have taken me 10 steps back.”

“The possibility of a different way of doing things — that’s the key piece.” Sutton says. “A lot of them, they don’t even see another way.”

***

The second group skewed older and had different needs. Nikita Brady was exhausted from years spent on the corners, dealing, fighting, stealing. Her closest friend had been shot and killed. She had been told she could play basketball in college if she could get in, but “I didn’t have that extra push, that motivation, until I met with Sonja,” she says.

“We started to see,” Sohn said, “that although the program is very useful, if you don’t have your GED, and you don’t have a job, and you’re 19 years old, and you’re quitting drug dealing….” She paused. “If in this very moment, you can’t earn money to help yourself, the rest is a moot point.” The participants needed practical life skills they could not learn watching “The Wire” — résumé writing, opening a bank account, handling job interviews, dealing with legal issues.

So Sohn put the third session on hold and started adapting the original vision. But a new opportunity arose. Maj. Melvin Russell, commander of Baltimore’s Eastern District and an early backer, put Sohn in touch with Pastor Marshall Prentice of Zion Baptist Church in East Baltimore. Prentice said Sohn could use a house the church owned farther up East Lanvale Street if she fixed it up. It stood across from two vacant houses, near known drug corners, and it was yet another project to add to her to-do list. But she had long imagined having a house for the program to serve as an anchor in the community ReWired was trying to engage.

Three months later, a large banner hung from the building, welcoming one and all to a free barbecue at the “Village House.” The interior, once dingy and rundown, was now clean, airy and pleasant. Several dozen people gathered out front, and Sohn, in a burgundy dress, buzzed around shaking hands, dispensing hugs, telling people to get something to eat. Sutton was there — when a well-dressed lady said she had come from a funeral, he asked, “Young or old?” Hawkins was there, too. He had found work with a landscaping company but was hoping to find something that paid better. His wife, Shakiara, was about to start a short prison stint for fraud, so it was on him to care for the kids.

Sohn soon started a new gig, too, as Det. Samantha Baker on ABC’s “Body of Proof,” a crime drama filming in Providence. It was a supporting role on a traditional cop show, but it was also a way to keep working and help fund ReWired. She was driving up and down Interstate 95 on a weekly basis, doing her scenes, then heading back to Baltimore. She sounded and looked tired.

Late in 2010 and into 2011, the third session remained on hold, and she was struggling to find the right people to manage ReWired and the Village House. Early in 2011, Daniels got arrested because he had held up an older couple at a bus stop after his foster mother had thrown him out and he had been homeless for several weeks. Sohn was heartened that he called her and said he knew he had done the wrong thing. It showed reflection and accountability, she thought, part of what she had been trying to instill. The group rallied around him, writing to him in jail, sending money, doing whatever they could — while also stressing that he had to make better choices.

One night in March, Daniels, wearing a black Adidas tracksuit, arrived at the Village House for a ReWired meeting. He wouldn’t be sentenced until the summer, but the weeks since he had gotten out of jail had been dispiriting. He was trying to look after his daughter, but job interviews kept stalling when his record came up. Plus, his sentencing judge had earlier said she’d give him 19 years if she saw him again.

Brady was there. She had stepped up efforts to earn her GED because she had been told it would help her get a scholarship at a community college. Hawkins arrived with his son, still trying to find something better than his $7.50-an-hour landscaping gig. His wife was getting out of Jessup soon, but for the time being, “I’m a 24-hour pop!” he said. “It’s nerve -racking. And a lot of brothers can’t do it, and I lost a lot of friends because people would say the stupidest thing to me, like, ‘Why don’t you just give ’em to your mother, and you get out there and get yours?’ ” The answer was simple: “My father wasn’t there for me, and he coulda been. There’s nothing on this earth that could keep me from my son. And to know that everything I do for him and my family makes me a better person. And this program has made me see that there’s another way.”

***

In July, the ReWired crew gathered again at the Village House for a good-bye of sorts. “Body of Proof” was moving to Los Angeles — and Sohn with it.

The gathering was orchestrated by Koli Tengalla, a veteran community activist and a fellow at the Open Society Institute whom Sohn hired to direct the Village House. The program was always designed to function without her. After she left, however, Hawkins, Brady and others asked for more responsibility and set up a snowball stand to raise funds to pay for GED tutoring for their classmates and school supplies for younger kids.

After leaving prison, Shakiara Hawkins started interning at the Village House and was later hired as a full-time assistant. Sean Hawkins got a better paying job, too, in the warehouse of an event production company run by a man who met Sohn at her favorite Baltimore pub and offered his help. Brady was not only working; she had also enrolled at Baltimore County community college and was on the basketball team. Even Daniels had good news: He was sentenced to 61 days after the judge who said she’d give him 19 years was apparently swayed by his story, his pledge to honor his commitment to the court and his ReWired classmates, several of whom attended the sentencing.

Even with the full schedule in California, and a rash of health issues that plagued her last fall, including a burst blood vessel in her colon that landed her in intensive care, Sohn is working closely with Tengalla to plan the next steps for the Village House, trying to develop a mental health piece for the program and trying to connect people like Hawkins and Brady with services ReWired can’t provide, such as job counseling. She’s also searching out new sources of funding and talking up the program in venues such as panel discussions at Harvard and Attorney General Eric Holder’s “Defending Childhood” task force, chaired by former baseball manager Joe Torre.

In December, soon after getting out of the hospital, she flew to Baltimore to testify at the task force’s first hearing. Her voice shaky, she told her tale of transformation, stressing that she had done it, and that there are many kids in Baltimore and elsewhere who can do it — if they get the right help.

It won’t work every time, but “I know what is possible,” she concluded.

Former foreign correspondent Phil Zabriskie is now a writer based in New York. He can be reached at wpmagazine@washpost.com.

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What They're Drinking at Davos - WSJ.com

What They're Drinking at Davos

By FRANCES DINKELSPIEL

For the past 17 years, the venture capital firm Accel Partners has thrown a hot-ticket party at the World Economic Forum. Held in the modern Kirchner Museum in Davos, Switzerland, the party draws heads of state, leading executives from technology and media companies, and the occasional celebrity.

The 350 guests come not only to mingle with Google's Larry Page and Sergey Brin, hear what Shimon Peres has to say about Middle East peace efforts or to find out when Facebook will go public (Accel owns about a 10% stake in the company). They also come for the wine.

Joe Schoendorf, the Accel partner who started the party as a way to introduce Silicon Valley leaders to European businessmen and politicians, is a serious wine buff, as are Bruce Golden, Jim Breyer and Kevin Comolli, the other Accel hosts. Each year the men, working with the Napa Valley wine company Soutirage, spend months assembling a list that showcases a particular region or varietal. Previous parties have focused on superb Cabernet Sauvignons or Pinot Noirs, with selections from leading wineries in France, Italy, Spain, California and Australia.

We wanted to highlight California wines. We like the parallels between the two great valleys—Silicon and Napa/Sonoma.

For the Friday party, the Accel partners decided to show off California wines made before 2000. Most of California's cult and rare wines are produced in such small quantities and are in such high demand that they are almost impossible to find in Europe. On a continent dominated by Burgundies, Bordeaux and Barolos, Mr. Schoendorf and his colleagues were eager to demonstrate that California wines, particularly those from the 1960s through the '90s, are among the world's best.

"This year we wanted to highlight how extraordinary some California wines become with age," said Mr. Golden, who is based in London but travels frequently to the Bay Area. "We also like the parallels between the two great valleys—Silicon Valley and Napa/Sonoma Valleys—and how California produces both world class tech companies as well as world class wines."

The 15 wines served at the party reflect California's wine history, with a few surprises thrown in, said Soutirage co-founder Matt Wilson. The 1969 BV Georges de Latour Cabernet Sauvignon and the 1962 Inglenook Cabernet Sauvignon are both elegant, rich wines made in the Bordeaux-style, which was the direction of many Napa Valley winemakers at that time, he said. The later wines, including the 1992 Harlan Estate and 1999 Colgin Cariad, are more fruit-forward and lush. And guests may be surprised by the 1996 Williams Selyem Rochioli River Block Pinot Noir. Most consumers drink Pinot Noir within five years, but this wine shows how well that varietal can age, Mr. Wilson said.

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For the past 17 years, the venture capital firm Accel Partners has thrown a hot-ticket party at the World Economic Forum.

All of the wines are donated. "We say to the winemakers, 'This is an opportunity to be in front of some of the most powerful influencers,' " Mr. Wilson said.

Bill Harlan, whose Harlan Estate and Bond bottles have been featured at the Accel Davos party numerous times, said the event serves as an important vehicle to get the word out about California wines. They are not as well known as they should be, particularly in China, which has emerged in recent years as the hottest market for French wine.

"We feel it's important for the world to know that we can produce fine wines in California, and if we can get our wines in the hands of those who have credibility and are people of discernment, we feel that's very good," said Mr. Harlan.

The A List

Wines served at the Accel Party in Davos on Friday

Champagne:

Krug Grande Cuvée

White Wines:

2001 Peter Michael Chardonnay Cuvée Indigène

1976 Chappellet Chardonnay

Red Wines:

1999 Bond Vecina

1999 Colgin Cariad

1996 Williams Selyem Rochioli River Block Pinot Noir

1996 Martinelli Jackass Zinfandel

1994 Dalla Valle Maya

1993 Turley Hayne Petite Syrah

1992 Harlan Estate

1984 Ridge Monte Bello

1975 Chappellet Cabernet Sauvignon

1974 Clos du Val Cabernet Sauvignon

1969 BV Georges de Latour Cabernet Sauvignon

1966 Charles Krug Reserve Cabernet Sauvignon

1962 Inglenook Cabernet Sauvignon

Stephen.Bates | +1 202 730-9760

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Anne Applebaum announced as next Philippe Roman Chair at LSE

Pulitzer Prize winner announced as next Philippe Roman Chair at LSE

Anne ApplebaumThe London School of Economics and Political Science (LSE) is pleased to announce that author and Pulitzer Prize winner Anne Applebaum will take up the post of Philippe Roman Chair in History and International Affairs at the School for 2012-13.

Anne Applebaum, who is director of political studies for the Legatum Institute, and a columnist for the Washington Post and Slate, will succeed Professor Ramachandra Guha. She takes up the post in October 2012. 

In her journalism, Anne Applebaum writes about US and international politics, with a focus on issues of economic and political transition. She began her career covering the collapse of communism as the Warsaw correspondent for the Economist in 1989.  In the early 1990s,  she was the foreign editor, and then the deputy editor, of the Spectator magazine.  She then wrote columns for the Daily Telegraph, the Sunday Telegraph, and the Evening Standard newspapers before joining the Washington Post in 2001 

Her best known book, Gulag: a history, narrates the history of the Soviet concentration camps system and describes daily life in the camps. Making extensive use of recently opened Russian archives, as well as memoirs and interviews, Gulag: a history won the 2004 Pulitzer Prize for non-fiction, as well as Britain's Duff-Cooper Prize. It was also a finalist for the National Book Award, the National Book Critics Circle Award, the LA Times Book Award and the Samuel Johnson Prize.

Anne Applebaum said: "I'm delighted to be given this wonderful opportunity to meet and work with the students and faculty of the LSE, one of the few truly global institutions."

The Philippe Roman Chair is based at LSE IDEAS, the centre for international affairs, diplomacy and strategy. The post gives LSE the chance to bring a renowned expert from another part of the world to the School for a year of research, teaching and discussion. Previous holders have been Professors Niall Ferguson, Paul Kennedy, Chen Jian and Giles Keppel.

Professor Arne Westad, co-director of LSE IDEAS, said: "We are delighted that Anne Applebaum will be joining LSE IDEAS for the next academic year. Her current focus on the Stalinization of post-war Central Europe will greatly enhance the centre's research on European affairs and the history of the Cold War and we look forward to welcoming her to LSE in October."

The other co-director, Professor Michael Cox, added: "This is a top appointment, not only is Anne Applebaum the first woman ever to hold this prestigious position, she is also the first Chair to have a real interest and expertise in Central Europe."

Ends

Contact:

Emilia Knight, LSE IDEAS, 020 7107 5363, e.knight@lse.ac.uk

Jess Winterstein, LSE Press Office, 020 7955 7060 or email Pressoffice@lse.ac.uk

27 January 2012

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Supply chains: Apple and the American economy | The Economist

Apple and the American economy

THE macroeconomic discussions that Apple's success prompts tend to be very curious things. Here we have a company that's been phenomenally successful, making products people love and directly creating nearly 50,000 American jobs in doing so, criticised for not locating its manufacturing operations in America, even as Americans complain to Apple about the working conditions of those doing the manufacture abroad: life in dormitories, 12-hour shifts 6 days a week, and low pay. It isn't enough for Apple to have changed the world with its innovative consumer electronics. It must also rebuild American manufacturing, and not just any manufacturing: the manufacturing of decades ago when reasonable hours and high wages were the norm.

The utility of Apple, however, is that it does provide a framework within which we can discuss the significant changes that have occurred across the global economy in recent decades. Contributing to that effort is a very nice and much talked about piece from the New York Times, which asks simply why it is that Apple's manufacturing is located in Asia.

You should read that piece for yourselves, but the story, in a nutshell, is this. Apple's products are assembed in massive factory complexes in China, run by Foxxconn, which also handles the production of consumer electronics for many other large players in the industry:

The facility has 230,000 employees, many working six days a week, often spending up to 12 hours a day at the plant. Over a quarter of Foxconn’s work force lives in company barracks and many workers earn less than $17 a day. When one Apple executive arrived during a shift change, his car was stuck in a river of employees streaming past. “The scale is unimaginable,” he said.

Foxconn employs nearly 300 guards to direct foot traffic so workers are not crushed in doorway bottlenecks. The facility’s central kitchen cooks an average of three tons of pork and 13 tons of rice a day. While factories are spotless, the air inside nearby teahouses is hazy with the smoke and stench of cigarettes.

Foxconn Technology has dozens of facilities in Asia and Eastern Europe, and in Mexico and Brazil, and it assembles an estimated 40 percent of the world’s consumer electronics for customers like Amazon, Dell, Hewlett-Packard, Motorola, Nintendo, Nokia, Samsung and Sony.

“They could hire 3,000 people overnight,” said Jennifer Rigoni, who was Apple’s worldwide supply demand manager until 2010, but declined to discuss specifics of her work. “What U.S. plant can find 3,000 people overnight and convince them to live in dorms?”

The components that go into the phone are quite often assembled in China, or elsewhere in Asia, as well:

Manufacturing glass for the iPhone revived a Corning factory in Kentucky, and today, much of the glass in iPhones is still made there. After the iPhone became a success, Corning received a flood of orders from other companies hoping to imitate Apple’s designs. Its strengthened glass sales have grown to more than $700 million a year, and it has hired or continued employing about 1,000 Americans to support the emerging market.

But as that market has expanded, the bulk of Corning’s strengthened glass manufacturing has occurred at plants in Japan and Taiwan.

“Our customers are in Taiwan, Korea, Japan and China,” said James B. Flaws, Corning’s vice chairman and chief financial officer. “We could make the glass here, and then ship it by boat, but that takes 35 days. Or, we could ship it by air, but that’s 10 times as expensive. So we build our glass factories next door to assembly factories, and those are overseas.”

All told, the physical production of Apple's products accounts for hundreds of thousands of manufacturing jobs. America, which finds itself several million jobs short of where it would like to be, and particularly short of the middle-skill manufacturing positions that once powered growth in the middle class, seems to want some of those back. Is that a reasonable desire?

How did we get here? A new paper by Richard Baldwin helps lay out some of the story. We can summarise it briefly by noting that specialisation is limited by the extent of the market. When transport costs are very high, the accessible market is quite small, perhaps no more than a village, which will then make nearly everything it needs for itself. As transport costs decline, economic activities may begin to unbundle. As overseas shipping costs fell during the industrial revolution, it became possible for massive industrial cities to specialise in large-scale production and ship their goods to customers all over the world. The concentration of industry in cities, however, was still largely a product of the fact that it was costly to move goods over land. In a port city, you could bring in inputs, process them into outputs, and ship them back out. If it had been necessary to move intermediate goods well inland for manufacture at any point, costs would have soared, making profitable production impossible.

But transport costs continued falling. Shipping became much cheaper and more efficient. Air freight became an economic possibility. And improvements in trucking and freight rail led to stunning drops in the cost of moving goods over land. And so where once producers had crowded on top of each other in cities to take advantage of specialisation without blowing their budget on transport costs, they now began to spread out: first into the suburbs, then into cheaper regions of the same economy, and then, finally, into vastly cheaper economies abroad. This process facilitated the rapid industrialisation of Asian giants like Japan and Korea, while also speeding along the process of deindustrialisation in expensive markets in America and Europe.

At this point, many seemed to conclude that distance was if not dead then dying, and that continued fracturing of supply chains was likely to continue. What actually seems to have occurred is a bit more interesting. Supply chains have indeed continued fracturing, but distance has reasserted itself in two important ways. First, in the advanced world, agglomerations of the talented individuals who design these products have become increasingly important. And secondly, information technology, which allows for better coordination of production processes, has once again made proximity a relevant concern in manufacturing. It's possible to coordinate a supply chain that's draped across an archpelago of Asian economies. To maximise the return to this chain, however, it's still necessary to keep plants reasonably close together. A plant located in America is too distant from Asia to make much economic sense; transit time to the rest of the supply chain in Asia is sufficiently long, in most cases, as to erode the gains to just-in-time production, or unexpected changes in designs or orders. Changing transportation and communication technologies facilitated a shift in manufacturing to Asia, then reinforced its presence there.

It's not necessary to talk about this as an entirely organic process. Unquestionably, Asian governments aggressively pursued manufacturing and subsidised it heavily, both directly and through advantageous exchange rates. As the story points out, Asia has capitalised on other advantages, as well. Cheap labour is one. More flexible land-use, labour, and environmental rules are another; China can erect a massive operation in no time at all, staffed with compliant labour and with little concern about the impact of the factory on watersheds, air quality, and traffic. Skill supply seems to matter as well. China is churning out engineers with basic technical competence (but less, it appears, than a bachelor's degree) by the hundreds of thousands. It would be incorrect to point to any one of these characteristics as the driving force behind the global shift. Rather, these are self-reinforcing factors within a global economy that has multiple stable equilibria. After some level of Asian development and integration, it became more attractive for manufacturers to locate there as more manufacturers located there.

What does this mean for the American economy? The Times piece quotes Steve Jobs as telling President Obama that those jobs aren't coming back, and they probably aren't. Attracting firms back to America wouldn't simply be a matter of helping reduce production costs in America. You'd have to replicate the convenience of the entire supply chain, which would likely be an enormously costly enterprise. Given the quality of the jobs characteristic of these production chains, one should ask whether it might not be a better idea to invest that money elsewhere.

Apple, it's worth pointing out, continues to capture most of the value added in its products. The most valuable aspects of an iPhone, for instance, are its initial design and engineering, which are done in America. Now, one problem with this dynamic is that as one scales up production of Apple products, there are vastly different employment needs across the supply chain. So, it doesn't take lots more designers and programmers to sell 50m iPhones than it does to sell 10m. You have roughly the same number of brains involved, and much more profit per brain. On the manufacturing side, by contrast, employment soars as scale grows. So as the iPhone becomes more popular, you get huge returns to the ideas produced in Cupertino, and small returns but hundreds of thousands of jobs in China.

This discrepancy manifests itself in America as rising income inequality, which makes Apple's choices somewhat politically fraught. At the same time, it's worth asking how the American government might alter its policies so as to make life better for middle- and low-skill workers in America at reasonable cost. Offering heavy subsidies to Apple to get it to relocate production would reduce inequality in America; you'd increase the tax burden which would mostly affect richer households and you'd create low-wage jobs, which would mostly benefit underemployed, low-skill workers. Now, perhaps after we add up everything Americans will decide that this kind of massive intervention in the economy and associated efficiency cost is worth it, in order to provide the dignity of employment, such as it is, to millions of workers. It's worth asking, however, whether there might not be a different and better way forward.

For one thing, it's far from obvious that the embrace of this system by Asian economies is a good thing for them over the long run. In the short term, as Mr Baldwin points out in his paper, industrialisation via biting off bits of global supply chains is in many ways a more superficial form of development than was achieved in earlier periods by Europe, America, Japan, and Korea, all of which developed an entire production capacity from the ground up. There is far less technology transfer in the newer, supply-chain model, for instance, and so it is less clear that Chinese manufacturing hubs will develop the innovative hubs and headquarters that did emerge in America and Japan. Furthermore, technology can change quite rapidly. It is stunning how quickly the present system emerged it might well go away just as quickly, either through mass automation or changes in input costs or shifts in the cost of moving goods and ideas. Who knows, rapid improvements in 3-d printing could take the world economy back to the days of hyperlocalisation in manufacturing.

America has also done very well in the past by looking forward toward the unseen opportunities ahead rather than the obvious opportunities currently being exploited. Think for a moment about the world Apple has created: one in which a very large share of the population is connected to each other and to all sorts of data resources via remarkable and powerful little hand-held computers. The potential to develop new business models for the production and delivery of goods and services is almost unimaginable, and it's safe to say we've only begun to scratch the surface. One can't say in advance what the impact of such businesses will be on employment and earnings, but it might well change the demand for skills within America in unexpected ways. To the extent that China's government is encouraging resources to flow toward manufacturing and assembly, it is reducing its ability to experiment with and develop these new technologies and businesses.

Jobs matter. They certainly matter to the well-being, material and psychological, of those who struggle to find one. Whether they matter enough—and specifically whether these low-skill manufacturing jobs matter enough—to undertake major and costly government interventions in the economy, in the process potentially harming the effectiveness of America's innovative businesses, is the question with which American workers and leaders are now wrestling. The answer seems clear enough to me, though my perspective is obviously different from those elsewhere in the economy. Until there is a meaningful improvement in American labour markets, however, especially for those without a college degree, recapturing those assembly jobs from China will continue to linger as a policy temptation.

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Barack Obama, Post-Partisan, Meets Washington Gridlock : The New Yorker

THE OBAMA MEMOS

On a frigid January evening in 2009, a week before his Inauguration, Barack Obama had dinner at the home of George Will, the Washington Post columnist, who had assembled a number of right-leaning journalists to meet the President-elect. Accepting such an invitation was a gesture on Obama’s part that signalled his desire to project an image of himself as a post-ideological politician, a Chicago Democrat eager to forge alliances with conservative Republicans on Capitol Hill. That week, Obama was still working on an Inaugural Address that would call for “an end to the petty grievances and false promises, the recriminations and worn-out dogmas that for far too long have strangled our politics.”

Obama sprang coatless from his limousine and headed up the steps of Will’s yellow clapboard house. He was greeted by Will, Michael Barone, David Brooks, Charles Krauthammer, William Kristol, Lawrence Kudlow, Rich Lowry, and Peggy Noonan. They were Reaganites all, yet some had paid tribute to Obama during the campaign. Lowry, who is the editor of the National Review, called Obama “the only presidential candidate from either party about whom there is a palpable excitement.” Krauthammer, an intellectual and ornery voice on Fox News and in the pages of the Washington Post, had written that Obama would be “a president with the political intelligence of a Bill Clinton harnessed to the steely self-discipline of a Vladimir Putin,” who would “bestride the political stage as largely as did Reagan.” And Kristol, the editor of the Weekly Standard and a former aide to Dan Quayle, wrote, “I look forward to Obama’s inauguration with a surprising degree of hope and good cheer.”

Over dinner, Obama searched for points of common ground. He noted that he and Kudlow agreed on a business-investment tax cut. “He loves to deal with both sides of the issue,” Kudlow later wrote. “He revels in the back and forth. And he wants to keep the dialogue going with conservatives.” Obama’s view, shared with many people at the time, was that professional pundits were wrong about American politics. It was a myth, he said, that the two political parties were impossibly divided on the big issues confronting America. The gap was surmountable. Compared with some other Western countries, where Communists and far-right parties sit in the same parliament, the gulf between Democrats and Republicans was narrow.

Obama’s homily about conciliation reflected an essential component of his temperament and his view of politics. In his mid-twenties, he won the presidency of the Harvard Law Review because he was the only candidate who was trusted by both the conservative and the liberal blocs on the editorial staff. As a state senator in Springfield, when Obama represented Hyde Park-Kenwood, one of the most liberal districts in Illinois, he kept his distance from the most left-wing senators from Chicago and socialized over games of poker and golf with moderate downstate Democrats and Republicans. In 1998, after helping to pass a campaign-finance bill in the Illinois Senate, he boasted in his community paper, the Hyde Park Herald, that “the process was truly bipartisan from the start.”

A few years later, Obama ran for the U.S. Senate and criticized “the pundits and the prognosticators” who like to divide the country into red states and blue states. He made a speech against the invasion of Iraq but alarmed some in the distinctly left-wing audience by pointing out that he was not a pacifist, and that he opposed only “dumb wars.” At the 2004 Democratic Convention, in Boston, Obama delivered a retooled version of the stump speech about ideological comity—“There is not a liberal America and a conservative America; there is the United States of America!”—and became a national political star.

In 2006, Obama published a mild polemic, “The Audacity of Hope,” which became a blueprint for his 2008 Presidential campaign. He described politics as a system seized by two extremes. “Depending on your tastes, our condition is the natural result of radical conservatism or perverse liberalism,” he wrote. “Tom DeLay or Nancy Pelosi, big oil or greedy trial lawyers, religious zealots or gay activists, Fox News or the New York Times.” He repeated the theme later, while describing the fights between Bill Clinton and the Newt Gingrich-led House, in the nineteen-nineties: “In the back-and-forth between Clinton and Gingrich, and in the elections of 2000 and 2004, I sometimes felt as if I were watching the psychodrama of the Baby Boom generation—a tale rooted in old grudges and revenge plots hatched on a handful of college campuses long ago—played out on the national stage.” Washington, as he saw it, was self-defeatingly partisan. He believed that “any attempt by Democrats to pursue a more sharply partisan and ideological strategy misapprehends the moment we’re in.”

If there was a single unifying argument that defined Obamaism from his earliest days in politics to his Presidential campaign, it was the idea of post-partisanship. He was proposing himself as a transformative figure, the man who would spring the lock. In an essay published in The Atlantic, Andrew Sullivan, a self-proclaimed conservative, reflected on Obama’s heady appeal: “Unlike any of the other candidates, he could take America—finally—past the debilitating, self-perpetuating family quarrel of the Baby Boom generation that has long engulfed all of us.”

Obama was not exaggerating the toxic battle that has poisoned the culture of Washington. In the past four decades, the two political parties have become more internally homogeneous and ideologically distant. In “The Audacity of Hope,” Obama wrote longingly about American politics in the mid-twentieth century, when both parties had liberal and conservative wings that allowed centrist coalitions to form. Today, almost all liberals are Democrats and almost all conservatives are Republicans. In Washington, the center has virtually vanished. According to the political scientists Keith T. Poole and Howard Rosenthal, who have devised a widely used system to measure the ideology of members of Congress, when Obama took office there was no ideological overlap between the two parties. In the House, the most conservative Democrat, Bobby Bright, of Alabama, was farther to the left than the most liberal Republican, Joseph Cao, of Louisiana. The same was true in the Senate, where the most conservative Democrat, Ben Nelson, of Nebraska, was farther to the left than the most liberal Republican, Olympia Snowe, of Maine. According to Poole and Rosenthal’s data, both the House and the Senate are more polarized today than at any time since the eighteen-nineties.

It would be hard for any President to reverse this decades-long political trend, which began when segregationist Democrats in the South—Dixiecrats like Strom Thurmond—left the Party and became Republicans. Congress is polarized largely because Americans live in communities of like-minded people who elect more ideological representatives. Obama’s rhetoric about a nation of common purpose and values no longer fits this country: there really is a red America and a blue America.

Polarization also has affected the two parties differently. The Republican Party has drifted much farther to the right than the Democratic Party has drifted to the left. Jacob Hacker, a professor at Yale, whose 2006 book, “Off Center,” documented this trend, told me, citing Poole and Rosenthal’s data on congressional voting records, that, since 1975, “Senate Republicans moved roughly twice as far to the right as Senate Democrats moved to the left” and “House Republicans moved roughly six times as far to the right as House Democrats moved to the left.” In other words, the story of the past few decades is asymmetric polarization.

Two well-known Washington political analysts, Thomas Mann, of the bipartisan Brookings Institution, and Norman Ornstein, of the conservative American Enterprise Institute, agree. In a forthcoming book about Washington dysfunction, “It’s Even Worse Than It Looks,” they write, “One of our two major parties, the Republicans, has become an insurgent outlier—ideologically extreme, contemptuous of the inherited social and economic policy regime, scornful of compromise, unpersuaded by conventional understanding of facts, evidence and science, and dismissive of the legitimacy of its political opposition.”

Three years ago, when Obama explained to George Will and his guests his theory of a centrist Washington, he had some reason to believe it. After all, the pillars of his agenda seemed to enjoy bipartisan support. To some extent, his health-care plan had been designed and employed by a Republican governor, Mitt Romney, of Massachusetts. His policy for addressing climate change, known as “cap and trade,” had its roots in the first Bush White House. The Troubled Asset Relief Program, a bipartisan policy to rescue failing banks, was designed by the second Bush Administration. As for the economy, conservative and liberal economists agreed that fiscal stimulus was the necessary response to a recession; the only question was how much stimulus. Politics in America, Obama confidently told people in Washington just before taking office, is played “between the forty-yard lines.”

As a new President, Obama did not anticipate how effectively his political opponents would cast him as a polarizing figure. Despite the bonhomie at Will’s house, most Republicans viewed him as a wily Chicago politician cosseted by a sympathetic liberal media. The over-all description was a caricature, but there is enough in Obama’s political biography for Republicans to make a case. In fact, his ascent from law professor to President in a decade was marked by a series of political decisions that undercut some of his claims on the subject of partisanship and political reform.

In 1996, during his first run for office, in the Illinois State Senate, Obama defeated his former political mentor Alice Palmer by successfully challenging her nominating petitions and forcing her off the ballot, effectively ending her career. A few years later, Illinois Democrats, after toiling in the minority in the Senate, gerrymandered the state to produce a Democratic majority. While drafting the new political map, Obama helped redraw his own district northward to include some of Chicago’s wealthiest citizens, making the district a powerful financial and political base that he used to win his U.S. Senate seat, a few years later.

Another hard-edged decision helped make him the Democratic Presidential nominee. In early October, 2007, David Axelrod and Obama’s other political consultants wrote the candidate a memo explaining how he could repair his floundering campaign against Hillary Clinton. They advised him to attack her personally, presenting a difficult choice for Obama. He had spent years building a reputation as a reformer who deplored the nasty side of politics, and now, he was told, he had to put that aside. Obama’s strategists wrote that all campaign communications, even the slogan—“Change We Can Believe In”—had to emphasize distinctions with Clinton on character rather than on policy. The slogan “was intended to frame the argument along the character fault line, and this is where we can and must win this fight,” the memo said. “Clinton can’t be trusted or believed when it comes to change,” because “she’s driven by political calculation not conviction, regularly backing away and shifting positions. . . . She embodies trench warfare vs. Republicans, and is consumed with beating them rather than unifying the country and building consensus to get things done. She prides herself on working the system, not changing it.” The “current goal,” the memo continued, was to define Obama as “the only authentic ‘remedy’ to what ails Washington and stands in the way of progress.”

Obama’s message promised voters, in what his aides called “the inspiration,” that “Barack Obama will end the divisive trench warfare that treats politics as a game and will lead Americans to come together to restore our common purpose.” Clinton was too polarizing to get anything done: “It may not be her fault, but Americans have deeply divided feelings about Hillary Clinton, threatening a Democratic victory in 2008 and insuring another four years of the bitter political battles that have plagued Washington for the last two decades and stymied progress.”

Neera Tanden was the policy director for Clinton’s campaign. When Clinton lost the Democratic race, Tanden became the director of domestic policy for Obama’s general-election campaign, and then a senior official working on health care in his Administration. She is now the president of the liberal Center for American Progress, perhaps the most important institution in Democratic politics. “It was a character attack,” Tanden said recently, speaking about the Obama campaign against Clinton. “I went over to Obama, I’m a big supporter of the President, but their campaign was entirely a character attack on Hillary as a liar and untrustworthy. It wasn’t an ‘issue contrast,’ it was entirely personal.” And, of course, it worked.

The fourth momentous decision of Obama’s political career provided the financial boost that made him President. On June 19, 2008, he announced that he would be the first Presidential candidate since 1976 to forgo public funds, which allow candidates to run in the general election while limiting the corrupting influence of fund-raising. This was an awkward and hypocritical decision, given that in 2007 Obama had explicitly promised that he would stay in the system. David Plouffe, his campaign manager, wrote in his memoir, “The Audacity to Win,” that the promise had been a mistake: “We were overly concerned with making sure the reform community and elites like the New York Times editorial board, which care deeply about these issues, would look favorably on our approach.” Obama, Plouffe noted, was “genuinely torn,” but was eventually convinced that victory trumped idealism. Obama’s choice allowed him to raise unlimited amounts of money while John McCain, who remained in the system, was limited to a check from the government for eighty-four million dollars. From September 1st to Election Day, Obama outspent McCain by almost three to one, and, as many Republicans are quick to note, ran more negative ads than any Presidential candidate in modern history.

There are obvious justifications for these four decisions. Alice Palmer had used phony signatures to get on the ballot, and Obama’s challenge was perfectly legal. The Democrats’ gerrymandering of Illinois was routine and no more outrageous than what happens in most other states. Compared with other Presidential primaries, Obama’s attacks against Hillary Clinton were relatively mild. Finally, if McCain could have raised more money outside the public-financing system, he surely would have. Still, Obama’s actual political biography is more partisan and ruthless than the version he has told over the years in countless “post-partisan” speeches and in “The Audacity of Hope.”

At George Will’s house, Obama impressed his companions. He got a big laugh when he teased David Brooks, a Times columnist who is a less orthodox conservative than the others, by asking him, “What are you doing here?” Kudlow said that the tone of the dinner was essentially “We’re going to disagree, but we wish you well.” As the President-elect departed, Rich Lowry grabbed Obama’s hand and said softly, “Sir, I’ll be praying for you.”

The premise of the Obama campaign was unusual. “Change We Can Believe In” wasn’t just about a set of policies; it was more grandiose. Obama promised to transcend forty years of demographic and ideological trends and reshape Washington politics. In the past three years, though, he has learned that the Presidency is an office uniquely ill-suited for enacting sweeping change. Presidents are buffeted and constrained by the currents of political change. They don’t control them.

George C. Edwards III, a political scientist at Texas A. & M., who has sparked a quiet revolution in the ways that academics look at Presidential leadership, argues in “The Strategic President” that there are two ways to think about great leaders. The common view is of a leader whom Edwards calls “the director of change,” someone who reshapes public opinion and the political landscape with his charisma and his powers of persuasion. Obama’s many admirers expected him to be just this.

Instead, Obama has turned out to be what Edwards calls “a facilitator of change.” The facilitator is acutely aware of the constraints of public opinion and Congress. He is not foolish enough to believe that one man, even one invested with the powers of the Presidency, can alter the fundamentals of politics. Instead, “facilitators understand the opportunities for change in their environments and fashion strategies and tactics to exploit them.” Directors are more like revolutionaries. Facilitators are more like tacticians. Directors change the system. Facilitators work the system. Obama’s first three years as President are the story of his realization of the limits of his office, his frustration with those constraints, and, ultimately, his education in how to successfully operate within them. A close look at the choices Obama made on domestic policy, based on a review of hundreds of pages of internal White House documents, reveals someone who is canny and tough—but who is not the President his most idealistic supporters thought they had elected.

2. AN ECONOMIC JUDGMENT

Mario Cuomo said that Presidents campaign in poetry and govern in prose, and Obama’s shift from Keats to Keynes was abrupt. Before he even entered office, he had to deal with an economic cataclysm. The initial debate was framed by a fifty-seven-page memo to the President-elect, dated December 15, 2008, written by Larry Summers, his incoming director of the National Economic Council. Marked “Sensitive and Confidential,” the document, which has never been made public, presents Obama with the scale of the crisis. “The economic outlook is grim and deteriorating rapidly,” it said. The U.S. economy had lost two million jobs that year; without a government response, it would lose four million more in the next year. Unemployment would rise above nine per cent unless a significant stimulus plan was passed. The estimates were getting worse by the day.

Summers informed Obama that the government was already spending well beyond its means. Yet in the coming months Obama would have to sign, in addition to a stimulus bill, several pieces of legislation left over from the Bush Administration: a hundred-billion-dollar funding bill for the wars in Afghanistan and Iraq; perhaps three hundred and fifty billion dollars more in funds from Bush’s TARP program, to prop up banks; and a four-hundred-and-ten-billion-dollar spending bill that was stuck in Congress. Obama would need resources to save G.M. and Chrysler, which were close to bankruptcy, and to address the collapsing housing market, which he was told would be hit with five million foreclosures during his first two years in office. Summers cautioned Obama, who had run as a fiscal conservative and attacked his Republican opponent for wanting to raise taxes, that he was about to preside over an explosion of government spending: “This could come as a considerable sticker shock to the American public and the American political system, potentially reducing your ability to pass your agenda and undermining economic confidence at a critical time.”

Obama was told that, regardless of his policies, the deficits would likely be blamed on him in the long run. The forecasts were frightening, and jeopardized his ambitious domestic agenda, which had been based on unrealistic assumptions made during the campaign. “Since January 2007 the medium-term budget deficit has deteriorated by about $250 billion annually,” the memo said. “If your campaign promises were enacted then, based on accurate scoring, the deficit would rise by another $100 billion annually. The consequence would be the largest run-up in the debt since World War II.”

There was an obvious tension between the warning about the extent of the financial crisis, which would require large-scale spending, and the warning about the looming federal budget deficits, which would require fiscal restraint. The tension reflected the competing concerns of two of Obama’s advisers. Christina Romer, the incoming chairman of the Council of Economic Advisers, drafted the stimulus material. A Berkeley economist, she was new to government. She believed that she had persuaded Summers to raise the stimulus recommendation above the initial estimate, six hundred billion dollars, to something closer to eight hundred billion dollars, but she was frustrated that she wasn’t allowed to present an even larger option. When she had done so in earlier meetings, the incoming chief of staff, Rahm Emanuel, asked her, “What are you smoking?” She was warned that her credibility as an adviser would be damaged if she pushed beyond the consensus recommendation.

Peter Orszag, the incoming budget director, was a relentless advocate of fiscal restraint. He was well known in Washington policy circles as a deficit hawk. Orszag insisted that there were mechanical limits to how much money the government could spend effectively in two years. In the Summers memo, he contributed sections about historic deficits and the need to scale back campaign promises. The Romer-Orszag divide was the start of a rift inside the Administration that continued for the next two years.

Since 2009, some economists have insisted that the stimulus was too small. White House defenders have responded that a larger stimulus would not have moved through Congress. But the Summers memo barely mentioned Congress, noting only that his recommendation of a stimulus above six hundred billion dollars was “an economic judgment that would need to be combined with political judgments about what is feasible.”

He offered the President four illustrative stimulus plans: $550 billion, $665 billion, $810 billion, and $890 billion. Obama was never offered the option of a stimulus package commensurate with the size of the hole in the economy––known by economists as the “output gap”––which was estimated at two trillion dollars during 2009 and 2010. Summers advised the President that a larger stimulus could actually make things worse. “An excessive recovery package could spook markets or the public and be counterproductive,” he wrote, and added that none of his recommendations “returns the unemployment rate to its normal, pre-recession level. To accomplish a more significant reduction in the output gap would require stimulus of well over $1 trillion based on purely mechanical assumptions—which would likely not accomplish the goal because of the impact it would have on markets.”

Paul Krugman, a Times columnist and a Nobel Prize-winning economist who persistently supported a larger stimulus, told me that Summers’s assertion about market fears was a “bang my head on the table” argument. “He’s invoking the invisible bond vigilantes, basically saying that investors would be scared and drive up interest rates. That’s a major economic misjudgment.” Since the beginning of the crisis, the U.S. has borrowed more than five trillion dollars, and the interest rate on the ten-year Treasury bills is under two per cent. The markets that Summers warned Obama about have been calm.

Summers also presumed that the Administration could go back to Congress for more. “It is easier to add down the road to insufficient fiscal stimulus than to subtract from excessive fiscal stimulus,” he wrote. Obama accepted the advice. This view—that Congress would serve as a partner to a popular new President trying to repair the economy—proved to be wrong.

At a meeting in Chicago on December 16th to discuss the memo, Obama did not push for a stimulus larger than what Summers recommended. Instead, he pressed his advisers to include an inspiring “moon shot” initiative, such as building a national “smart grid”—a high-voltage transmission system sometimes known as the “electricity superhighway,” which would make America’s power supply much more efficient and reliable. Obama, still thinking that he could be a director of change, was looking for something bold and iconic—his version of the Hoover Dam—but Romer and others finally had a “frank” conversation with him, explaining that big initiatives for the stimulus were not feasible. They would cost too much, and not do enough good in the short term. The most effective ideas were less sexy, such as sending hundreds of millions of dollars to the dozens of states that were struggling with budget crises of their own.

The stimulus was the first test of Obama’s theory that politics is played in the center of the field—and of the G.O.P.’s ability to define him as a liberal wastrel. By late January, 2009, the bill had cleared the House without a single Republican vote, and was stuck in the Senate, where the reception from the right was also antagonistic. Senator Jim DeMint, of South Carolina, an emerging leader of the grassroots opposition to the President, declared that the stimulus was “the worst piece of economic legislation Congress has considered in a hundred years.” Not since the creation of the income tax, he said, “has the United States seriously entertained a policy so comprehensively hostile to economic freedom, or so arrogantly indifferent to economic reality.” Obama had loaded his bill with tax cuts in order to lure Republicans, but DeMint dismissed them. “Think of it this way,” he said. “If nearly every Democrat in Congress supports a tax cut, it’s not really a tax cut.” DeMint called his alternative to the President’s plan “the American Option.”

On February 1st, a day before Obama was scheduled to meet with congressional leaders from both parties to make his case for the stimulus, his advisers wrote him a memo recommending that he keep the stimulus package from growing: “We believe that it is critical to draw a sharp line not to exceed $900 billion, so that the size of the package does not spiral out of control.” Senators would likely amend the bill to add about forty billion dollars in personal projects—some worthy, some wasteful. At the same time, Obama hadn’t abandoned his dream of a moon-shot project. He had replaced the smart grid with a request for twenty billion dollars in funding for high-speed trains. But including that request was risky. “Critics may argue that such a proposal is not appropriate for a recovery bill because the funding we are proposing is likely to be spent over 10+ years,” the advisers wrote.

To find the extra money—forty billion to satisfy the senators and twenty billion for Obama—the President needed to cut sixty billion dollars from the bill. He was given two options: he could demand that Congress remove a seventy-billion-dollar tax provision that was worthless as a stimulus but was important to the House leadership, or he could cut sixty billion dollars of highly stimulative spending. He decided on the latter.

Obama was then presented with a chart of six stimulus policies—Making Work Pay, a tax credit for jobholders that was a centerpiece of his campaign; education spending; state fiscal relief; funding for the National Institutes of Health; tax-credit bonds; and Social Security and veterans’-benefits payments—with recommendations for cuts in the programs that would save sixty-one billion dollars. Obama’s advisers told him, “A key part of the strategy involved in these savings is that you are putting your priorities—for example, Making Work Pay and education—on the table in order to get this deal done.” His aides had hoped that the Senate would pass the legislation with eighty votes, including more than twenty Republicans. At the bottom of the chart, the President wrote “OK.”

Even as the severity of the economic crisis became clear, Obama and Congress worked together to make the stimulus smaller. The bill, known as the Recovery Act, passed at $787 billion, with three Republican votes in the Senate, including that of Arlen Specter, of Pennsylvania, who later became a Democrat. It was the Administration’s first recognition that congressional Republicans had little interest in the President’s offer to meet them halfway. It turned out that the ideological divide he had set out to bridge was not just a psychodrama.

3. WORTH DISCUSSING

Each night, an Obama aide hands the President a binder of documents to review. After his wife goes to bed, at around ten, Obama works in his study, the Treaty Room, on the second floor of the White House residence. President Bush preferred oral briefings; Obama likes his advice in writing. He marks up the decision memos and briefing materials with notes and questions in his neat cursive handwriting. In the morning, each document is returned to his staff secretary. She dates and stamps it—“Back from the OVAL”—and often e-mails an index of the President’s handwritten notes to the relevant senior staff and their assistants. A single Presidential comment might change a legislative strategy, kill the proposal of a well-meaning adviser, or initiate a bureaucratic process to answer a Presidential question.

If the document is a decision memo, its author usually includes options for Obama to check at the end. The formatting is simple, but the decisions are not. As Obama told the Times, early in his first term, Presidents are rarely called on to make the easy choices. “Somebody noted to me that by the time something reaches my desk, that means it’s really hard,” he said. “Because if it were easy, somebody else would have made the decision and somebody else would have solved it.”

On February 5, 2009, just as Obama was negotiating the final details of the stimulus package, Summers and Timothy Geithner, the Treasury Secretary, drafted a memo to the President outlining a plan to save the collapsing banks. TARP, they believed, wouldn’t be enough. Seventy per cent of Americans’ assets were in four banks, three of which were in serious trouble. If the situation worsened, Obama might need to nationalize one or more institutions that were “at the doorstep of failure.” Indeed, “there is a significant chance that Citigroup, Bank of America, and possibly others could ultimately end up in this category.” Nationalization would expose the government to enormous financial risk and political peril. Obama would be forced to take “actions to get the government a dominant ownership position,” and the banks would then “be subject to substantial restructuring and government control including the replacement of long-standing top management and long-standing directors.” It was unclear whether such a takeover was legal. Moreover, there was a “real risk” that seizing control of banks could, in fact, destroy them.

Obama would need congressional support if he pursued nationalization. Geithner and Summers recommended that, if necessary, the F.D.I.C., which provides deposit insurance to millions of Americans, be used to take over the troubled banks. The F.D.I.C. was partly funded by small community banks, which garnered more sympathy than Wall Street firms.

They warned Obama, “We may, by being proactive, be blamed for causing the problems we are seeking to preempt. Further, there is the risk that by attempting a program of this kind, we will pull the ‘band-aid’ off a wound that we lack the capacity to sterilize and thus exacerbate problems.”

The plan was dropped in mid-March after a scandal erupted over lucrative bonuses paid to executives at A.I.G. At a pivotal meeting, according to the notes of someone who participated, Emanuel warned the President of “sticker shock” in Congress, and, he said, “There’s just no appetite for more money.” Obama, whose approval rating was still above sixty per cent, was more confident than his aides in his abilities to change public opinion and persuade Congress he needed the resources. “Well, what if we really explain this very well?” he asked. But the judgment of the political advisers prevailed. In hindsight, the case for nationalization was weak, but even if Obama had wanted to pursue it he couldn’t have. For the second time in as many months, a more aggressive course of action on the economy was thwarted by fears of congressional disapproval.

Obama began to subtly adjust his domestic strategy. Even as he fought the recession, he had decided to pursue health-care reform as well, and during the spring he had to make a series of decisions about the legislation. Its fate in the Senate was largely in the hands of Max Baucus, of Montana, the chairman of the Finance Committee, which had jurisdiction over much of the bill. White House aides noted in a March memo that Baucus was in many ways an Obama Democrat, someone who “prefers to work out legislation on a bipartisan basis.”

There were two ways for the Senate to approach Obama’s health-care plan: the normal process, which required sixty votes to pass the bill, or a shortcut known as “reconciliation,” which required only a simple majority and would bypass a possible filibuster. Baucus and several other key Senate Democrats opposed reconciliation, and Republicans decried its use on such major legislation as a partisan power grab. Mitch McConnell, the Republican leader in the Senate, complained that using reconciliation would “make it absolutely clear” that Obama and the Democrats in Congress “intend to carry out all of their plans on a purely partisan basis.” On April 10th, Obama’s aides sent him a memo asking him to decide the issue. The White House could still fashion a bipartisan bill, but it was important to have the fifty-one-vote option as a backup plan, in case they weren’t able to win any Republican support and faced a filibuster. They recommended that he “insist on reconciliation instructions for health care.” Below this language, Obama was offered three options: “Agree,” “Disagree,” “Let’s Discuss.” The President placed a check mark on the line next to “Agree.”

By the spring, Republicans had settled on a simple and effective plan of attack against Obama. His policies, they repeated over and over, “spend too much, tax too much, and borrow too much.” Obama, who made it all the way through his U.S. Senate campaign without ever having a single negative television advertisement aired about him, began to feel the effects of an energized opposition. As his approval rating declined through 2009, he looked for ways to restore his credibility as a moderate. He became intent on responding to critics of government spending and, as White House memos show, he settled into the role of a more transactional and less transformational leader.

In February, he authorized his staff to plan a bipartisan “fiscal summit” that would include politicians, like the conservative Wisconsin congressman Paul Ryan, and think-tank policymakers, like the liberal Robert Greenstein. “What are the follow-ups, takeaways afterwards?” Obama wrote. They responded that he could publicly ask the attendees for a continued dialogue on the best way to address the fiscal crisis or he could create a fiscal task force that would tackle the issue comprehensively. They warned him that among Democrats who then ran the House and the Senate there was resistance to the task force. Rather than pick a fight with his friends over spending, he decided to start a conversation. The summit came and went, with nothing to show for it.

The President’s notes reflected a tension between his determination to pass his agenda and his hope of maintaining his reformist reputation. At the end of another memo about fiscal discipline after the summit, he asked his staff to seek out ideas from one of the most conservative members in the House. “Have we looked at any of the other GOP recommendations (e.g. Paul Ryan’s) to see if any make sense?” he wrote.

Obama could be unsentimental toward liberal piety. In May, 2009, his advisers informed him that his budget for global health assistance, much of which goes to combat H.I.V., would increase by a hundred and sixty-five million dollars yet would still face “opposition from the very vocal HIV/AIDS activist community.” He wrote back, “How can they complain when we are increasing funding?” At the end, he added, “In announcing this, we should be very complimentary of the Bush Administration.”

He also could be ruthless toward members of his party in Congress. When he was informed in a memo that Representative Jim Oberstar, a Minnesota Democrat, wanted to write a highway bill that included a hundred and fifteen billion dollars more in spending than Obama had proposed, and which would be funded by a gas-tax increase, Obama wrote “No,” and underlined it. When he was informed that the Census Bureau had spent six hundred million dollars over two years in a failed attempt to use handheld computers for the census, “and is reverting to paper-based data collection,” he wrote, “This is appalling.” Obama was eager to get credit as a penny-pincher. When his aides submitted a detailed plan to improve government performance and reduce waste, he wrote back, “This is good stuff—we need to constantly publicize our successful efforts here.”

In June, 2009, he was told that Congress had whittled down by more than two thirds his ten-billion-dollar proposal to fund childhood nutrition, and he was asked if he would like to fund the initiative out of a thirty-five-billion-dollar pot that had appeared fortuitously during the budget process. The White House planned to use the money for community colleges and early education, and Obama was told that, if he didn’t allocate some of the funds, he couldn’t finance his child-nutrition agenda. His advisers suggested that he could make a point about political reform and offered him a plan to “ask Congress to fund as much of your original request as possible through reductions in agriculture subsidies.” They expected the ploy to fail but argued, “You would be able to say that you had offered a serious plan to fund the full bill, and Congress had fallen short.” Next to this more cynical option, Obama wrote, “Yes.”

The President’s caution, and his concern about business, can be seen in the way he dealt with major interest groups. His policy to limit global warming, cap and trade, threatened the oil companies. Health-care reform threatened insurers. Financial regulatory reform threatened the banks. With great specificity, the concerns of these and other interest groups were brought inside the Oval Office by Obama’s aides. His health-insurance bill was crafted by building support from a delicate alliance of interest groups, and Obama personally guided the effort. On July 1, 2009, his top health-care adviser, Nancy-Ann DeParle, submitted a detailed nine-page policy memo asking whether the White House should consider including medical-malpractice reform in the legislation. Most Democrats opposed the idea, but the American Medical Association was pushing for it. “Obviously, we shouldn’t do anything that weighs down the overall effort,” Obama wrote back, in his characteristically cautious and reasonable style, “but if this helps the AMA stay on board, we should explore it.”

Later in the year, Geithner and Summers outlined the objections of the business lobby to Obama’s plan to close corporate tax loopholes that benefitted multinational companies and to encourage American companies to create more jobs in the U.S. “As you know,” they wrote, “our FY 2010 international tax proposal received a strong negative reaction from the business community—and in particular from large U.S. multinational firms.” They offered him a modified plan that would raise sixteen billion dollars less, and that would “address the business community’s arguably most reasonable concerns.” They noted that “some critics may argue that we are caving to the multinationals,” but pointed out that the plan would still raise revenues from such conglomerates. They leaned on the opinion of Obama’s most trusted political adviser. “David Axelrod thinks it is important that we continue to voice our support for this proposal which was a key commitment you made before coming into office,” they wrote. Next to this, Obama wrote, “Agree.”

But Geithner and Summers warned that if Obama was not willing to personally “defend” the plan he should not send it to Congress. In that case, they offered him an even more defanged alternative, one that would be “more responsive to the business community’s concerns” but would certainly “be criticized by some as caving.” Campaign promises were easy, but, as President, Obama could fight only so many legislative battles. Next to the dramatically scaled-back option, Obama wrote, “Worth discussing.” But in the end it was only worth discussing. Obama didn’t completely capitulate to the multinationals, and he adopted his aides’ modestly clipped package.

4. NEED TO BE CAREFUL HERE

Obama’s moderation didn’t sway Republicans, nor did his attention to interest groups or his cuts to beloved liberal programs. Through the rest of 2009, as the anti-government Tea Party movement gathered strength, and conservative voters began to speak of creeping American socialism, Obama’s aides quarrelled over how the President should respond. Romer wanted him to press the Keynesian case for his policies—to defend the proposition of increased government spending to fight the recession. Orszag argued that he needed more support from Washington’s deficit hawks, and urged him to create a deficit commission, partly because “it can provide fiscal credibility during a period in which it is unlikely we would succeed in enacting legislation.”

It presented Obama with a common Presidential dilemma: Should he use the White House bully pulpit to change minds or should he accept popular opinion? He chose the latter. In his speeches, he began saying, “Americans are making hard choices in their budgets. We’ve got to tighten our belts in Washington, as well.” Romer fought to get such lines removed from his speeches, arguing that it was “exactly the wrong policy.” She thought the President should emphasize that the government would seek to use taxpayer money wisely, and leave it at that. Instead, he seemed to be accepting the Republican case against stimulus and for austerity. She thought he was losing faith in Keynesianism itself.

Obama was learning the same lesson of many previous occupants of the Oval Office: he didn’t have the power that one might think he had. Harry Truman, one in a long line of Commanders-in-Chief frustrated by the limits of the office, once complained that the President “has to take all sorts of abuse from liars and demagogues. . . . The people can never understand why the President does not use his supposedly great power to make ’em behave. Well, all the President is, is a glorified public relations man who spends his time flattering, kissing and kicking people to get them to do what they are supposed to do anyway.”

When it came time for Obama to write his fiscal 2011 budget, which was his next big opportunity to help the economy, he began to chip away at some dramatic campaign commitments. For instance, in 2008 he had promised a bold space program. “As President,” he had said, “I will establish a robust and balanced civilian space program” that “not only will inspire the world with both human and robotic space exploration but also will again lead in confronting the challenges we face here on Earth, including global climate change, energy independence, and aeronautics research.” In November, 2009, his advisers, in a memo, delivered some bad news: “The 10-year deficit has deteriorated by roughly $6 trillion.” The next sentence was in boldface type and underlined: “Especially in light of our new fiscal context, it is not possible to achieve the inspiring space program goals discussed during the campaign.”

Obama was told that he should cancel NASA’s Bush-era Constellation program, along with its support projects, like the Ares launch vehicles, which were designed to return astronauts to the moon by 2020. The program was behind schedule, over budget, and “unachievable.” He agreed to end it. During the stimulus debate, Obama’s metaphorical moon-shot idea—the smart grid—was struck down as unworkable. Now the Administration’s actual moon-shot program was dead, too.

As he worked on his budget, Obama scoured his briefing materials for ways to cut spending. Next to a discussion of continuing “spending levels associated with the Recovery Act,” he wrote, “Not possible.” He even questioned funding for the Department of Veterans Affairs, which is generally considered politically untouchable. It was going to receive a 7.2-per-cent increase, the largest two-year percentage increase in the department’s budget in more than thirty years. Obama was informed that it would “underscore the Administration’s commitment to our veterans. Specifically, it will do so by continuing to improve care for our wounded warriors, expand programs to reduce and prevent the incidence of homelessness among veterans.” Obama wrote, “Given what we did last year, does the increase need to be this high?”

Obama knew that his most ardent supporters would attack the budget. He planned to increase Pentagon funding while decreasing some popular domestic programs. He was told that the proposal presented him with “a broad vulnerability.” For example, the Low Income Home Energy Assistance Program, which helps many poor people, especially in the Northeast, was to be cut in half. “Not good,” Obama wrote. The Small Business Administration “should do more with what it has,” he wrote. Poorly performing job-training centers “have to be replaced w/ something that does work.” He underlined “does.”

His aides also recommended that he give back to the government two hundred and four million dollars left over from the Presidential Election Campaign Fund, the campaign-financing program that, in 2008, Obama had decided not to use. Obama’s controversial decision now had a chance to save the government money, but there was a hitch. The program is financed by taxpayers who ask the I.R.S. to send three dollars from their annual taxes to the program. “Rescinding the dollars in the fund may be seen as overriding taxpayer choice,” he was told, “and also as an attack on public financing that would decrease the funds available for the 2012 election.” He wrote, “Need to be careful here.”

One Cabinet official made it clear that she did not share the President’s growing commitment to coupon-clipping: Secretary of State Hillary Clinton. She rejected the White House’s budget for her department, and wrote the President a six-page letter detailing her complaints. Some in the White House saw the long letter as a weapon, something that could be leaked if Clinton didn’t get her way. “At

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NYT: What You (Really) Need to Know (Dr. Larry Summers)

What You (Really) Need to Know Lawrence H. Summers is former president of Harvard University and former secretary of the Treasury. This essay is based on a speech Dr. Summers gave at The New York Times’s Schools for Tomorrow conference.

A PARADOX of American higher education is this: The expectations of leading universities do much to define what secondary schools teach, and much to establish a template for what it means to be an educated man or woman. College campuses are seen as the source for the newest thinking and for the generation of new ideas, as society’s cutting edge.

And the world is changing very rapidly. Think social networking, gay marriage, stem cells or the rise of China. Most companies look nothing like they did 50 years ago. Think General Motors, AT&T or Goldman Sachs.

Yet undergraduate education changes remarkably little over time. My predecessor as Harvard president, Derek Bok, famously compared the difficulty of reforming a curriculum with the difficulty of moving a cemetery. With few exceptions, just as in the middle of the 20th century, students take four courses a term, each meeting for about three hours a week, usually with a teacher standing in front of the room. Students are evaluated on the basis of examination essays handwritten in blue books and relatively short research papers. Instructors are organized into departments, most of which bear the same names they did when the grandparents of today’s students were undergraduates. A vast majority of students still major in one or two disciplines centered on a particular department.

It may be that inertia is appropriate. Part of universities’ function is to keep alive man’s greatest creations, passing them from generation to generation. Certainly anyone urging reform does well to remember that in higher education the United States remains an example to the world, and that American universities compete for foreign students more successfully than almost any other American industry competes for foreign customers.

Nonetheless, it is interesting to speculate: Suppose the educational system is drastically altered to reflect the structure of society and what we now understand about how people learn. How will what universities teach be different? Here are some guesses and hopes.

1. Education will be more about how to process and use information and less about imparting it. This is a consequence of both the proliferation of knowledge — and how much of it any student can truly absorb — and changes in technology. Before the printing press, scholars had to memorize “The Canterbury Tales” to have continuing access to them. This seems a bit ludicrous to us today. But in a world where the entire Library of Congress will soon be accessible on a mobile device with search procedures that are vastly better than any card catalog, factual mastery will become less and less important.

2. An inevitable consequence of the knowledge explosion is that tasks will be carried out with far more collaboration. As just one example, the fraction of economics papers that are co-authored has more than doubled in the 30 years that I have been an economist. More significant, collaboration is a much greater part of what workers do, what businesses do and what governments do. Yet the great preponderance of work a student does is done alone at every level in the educational system. Indeed, excessive collaboration with others goes by the name of cheating.

For most people, school is the last time they will be evaluated on individual effort. One leading investment bank has a hiring process in which a candidate must interview with upward of 60 senior members of the firm before receiving an offer. What is the most important attribute they’re looking for? Not GMAT scores or college transcripts, but the ability to work with others. As greater value is placed on collaboration, surely it should be practiced more in our nation’s classrooms.

3. New technologies will profoundly alter the way knowledge is conveyed. Electronic readers allow textbooks to be constantly revised, and to incorporate audio and visual effects. Think of a music text in which you can hear pieces of music as you read, or a history text in which you can see film clips about what you are reading. But there are more profound changes set in train. There was a time when professors had to prepare materials for their students. Then it became clear that it would be a better system if textbooks were written by just a few of the most able: faculty members would be freed up and materials would be improved, as competition drove up textbook quality.

Similarly, it makes sense for students to watch video of the clearest calculus teacher or the most lucid analyst of the Revolutionary War rather than having thousands of separate efforts. Professors will have more time for direct discussion with students — not to mention the cost savings — and material will be better presented. In a 2008 survey of first- and second-year medical students at Harvard, those who used accelerated video lectures reported being more focused and learning more material faster than when they attended lectures in person.

4. As articulated by the Nobel Prize-winner Daniel Kahneman in “Thinking, Fast and Slow,” we understand the processes of human thought much better than we once did. We are not rational calculating machines but collections of modules, each programmed to be adroit at a particular set of tasks. Not everyone learns most effectively in the same way. And yet in the face of all evidence, we rely almost entirely on passive learning. Students listen to lectures or they read and then are evaluated on the basis of their ability to demonstrate content mastery. They aren’t asked to actively use the knowledge they are acquiring.

“Active learning classrooms” — which cluster students at tables, with furniture that can be rearranged and integrated technology — help professors interact with their students through the use of media and collaborative experiences. Still, with the capacity of modern information technology, there is much more that can be done to promote dynamic learning.

5. The world is much more open, and events abroad affect the lives of Americans more than ever before. This makes it essential that the educational experience breed cosmopolitanism — that students have international experiences, and classes in the social sciences draw on examples from around the world. It seems logical, too, that more in the way of language study be expected of students. I am not so sure.

English’s emergence as the global language, along with the rapid progress in machine translation and the fragmentation of languages spoken around the world, make it less clear that the substantial investment necessary to speak a foreign tongue is universally worthwhile. While there is no gainsaying the insights that come from mastering a language, it will over time become less essential in doing business in Asia, treating patients in Africa or helping resolve conflicts in the Middle East.

6. Courses of study will place much more emphasis on the analysis of data. Gen. George Marshall famously told a Princeton commencement audience that it was impossible to think seriously about the future of postwar Europe without giving close attention to Thucydides on the Peloponnesian War. Of course, we’ll always learn from history. But the capacity for analysis beyond simple reflection has greatly increased (consider Gen. David Petraeus’s reliance on social science in preparing the army’s counterinsurgency manual).

As the “Moneyball” story aptly displays in the world of baseball, the marshalling of data to test presumptions and locate paths to success is transforming almost every aspect of human life. It is not possible to make judgments about one’s own medical care without some understanding of probability, and certainly the financial crisis speaks to the consequences of the failure to appreciate “black swan events” and their significance. In an earlier era, when many people were involved in surveying land, it made sense to require that almost every student entering a top college know something of trigonometry. Today, a basic grounding in probability statistics and decision analysis makes far more sense.

A good rule of thumb for many things in life holds that things take longer to happen than you think they will, and then happen faster than you thought they could. Think, for example, of the widespread use of the e-book, or the coming home to roost of debt problems around the industrialized world. Here is a bet and a hope that the next quarter century will see more change in higher education than the last three combined.

http://www.nytimes.com/2012/01/22/education/edlife/the-21st-century-education.html?pagewanted=print

This article has been revised to remove an editing error. Derek Bok was not Lawrence Summers’s immediate predecessor as president of Harvard. Dr. Bok first served from 1971 to 1991; Dr. Summers took office in 2001.

Lawrence H. Summers is former president of Harvard University and former secretary of the Treasury. This essay is based on a speech Dr. Summers gave at The New York Times’s Schools for Tomorrow conference.

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Genius Princetonians Will Reform Wall Street by Working for Wall Street > daily princetonian, Occupy Princeton, occupy wall street, Princeton, princetonian, wall street, “goldman partners of tomorrow" | IvyGate

Genius Princetonians Will Reform Wall Street by Working for Wall Street

by | January 15, 2012 at 3:34 pm

No matter how many famous novelists in its employ, Princeton University is firstly a grooming school for bankers. With that in mind, the student-led Occupy Princeton has, for about a month now, protested (i.e., TERRORIZED) several recruitment events hosted by human rights organizations such as J.P. Morgan and Goldman Sachs. Which has struck many of the group’s betters as kind of . . . bizarre, yeah? Don’t these people want . . . money? And a summer property in an equatorial country? What else are we here for??

Fortunately, chipper Prince contributor Elise Backman ’15 and Prince columnist Aaron Applbaum ’14 have offered a time-tested solution to appeasing Occupy Princeton: Just work for Wall Street! Easy! You’ll fit right in!

Applbaum, from January 9:

It is true that the Princeton students of today traditionally become the Goldman partners of tomorrow, but chanting at them repetitively only serves to alienate them, not to change their minds.

Traditionally? Unless that awful Henry Moore sculpture is in fact a secret wormhole to Lower Manhattan, working for Goldman Sachs is about money, not one’s ride on the Long Orange Line.

Becoming more politically engaged and discussing fiscal policy, I believe, is the way to shift the dialogue and create the change sought after by the Occupy contingency. I see this as a way to alter, and break through our [in]famous complacency. This is not to say that Washington is exclusively at fault for New York’s behavior — both financiers and policy makers are to blame for their actions — but the two are inextricably tied and an opening for change right now lies in the political arena.

This is the counter-argument to the Occupy movement’s rather explicit charge that money has corrupted American politics? Unless Alan Greenspan recently rewrote several founding documents, no, “financiers” and politicians are not “inextricably tied.” Well, they are, of course. But that’s the problem, not an a priori truth.

And here’s Prince contributor Elise Backman, from January 11:

When I have tried to discuss Occupy Princeton with my friends affiliated and unaffiliated with the movement, at the first sign of a critique I am met more often than not with, “Oh, of course, you just want to go make money on Wall Street,” “Don’t you care about the economy at all?” or my favorite: “You’re so politically apathetic — how Princeton of you.” Are we all suddenly politically apathetic if we don’t support Occupy Princeton?

Oh yes, the very reasonable “friends” argument: my friends said something, so everyone thinks it. QED! But wait:

Since Occupy has come to Princeton, a student planning to work on Wall Street is “in the nation’s disservice,” is simply another hamster on the proverbial wheel. Occupy Princeton is, of course, entitled to its numerous opinions, but I ask whether they have ever considered the possibility of Princeton students planning to change Wall Street from the inside. Many of us do agree that the wealth gap in our country is a serious issue, and one that is related to the financial market. To that end, many are working toward their diploma and their Wall Street positions in an effort to learn how to execute reforms.

Princeton students might be scheming to change the financial industry from within? Like, what—Inception? That’s the plan?

It is kind of sweet that Backman believes that Wall Street is interested in finding new ways to regulate itself, however absurd that idea is. But even if an individual infiltrated Wall Street for the intent of exposing malfeasance, he would never have graduated from Princeton. This is obvious. Think about it: after such whistleblower’s face is inevitably splattered across DealBook or wherever, he could never attend Reunions again. Not because of regret or shame, but because he’d encounter, and be shunned by, at least forty of his former co-workers. To blow the whistle on Wall Street is to blow the whistle on Princeton itself. Is any Princeton alumnus willing to sacrifice his good standing for a principle (like justice)? Just a guess, but: no.

Stephen.Bates | +1 202 730-9760

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The Benefits of Bain Capitalism - NYTimes.com

The Benefits of Bain Capitalism

THE debate over Mitt Romney’s career at Bain Capital, in which several of his Republican rivals sound as if they’re auditioning for a production of “Les Misérables,” is at heart a debate about the last 30 years of American capitalism.

In the decades after World War II, the United States economy was highly regulated, highly taxed and highly successful. War, tyranny and ideological mania had devastated our competitors, and while Asia stagnated and Europe struggled to rebuild, America grew and grew and grew. It was a golden age for the liberal model of political economy, with a powerful regulatory state presiding over labor-management cooperation and a steadily expanding middle class.

But like all golden ages it passed. First in Europe and then in Asia, competitors emerged to challenge the United States’ economic dominance. In this new landscape, the pillars of the postwar economic order began to look like liabilities. Our heavily unionized industries seemed sclerotic, our regulatory system stifling, our tax rates punitive. And so American policy makers, C.E.O.’s and investors responded by changing their priorities — privileging growth over security, efficiency over equality, and embracing creative destruction on a scale that would have been unthinkable in the America of 1955.

In the private sector, this revolution was driven by men like Mitt Romney. As Ben Wallace-Wells put it in a New York magazine profile last October, Romney has spent his entire career seeking to “perfect” the American corporation, stripping “its inefficiencies until it might function as a perfectly frictionless economic unit.”

This process didn’t just involve pillaging companies and throwing their employees out onto the street, as Romney’s more overheated critics charge. While Bain’s record is hard to assess from the outside, one comprehensive study cited by Reihan Salam in The Daily suggests that private equity buyouts in general tend to have “only a modest net impact on employment” in the companies involved.

But neither was Romney the Henry Ford-esque job creator he’s tried to play on the campaign trail. He served his investors, not his employees, and his goal was always to make an uncompetitive company competitive, even if that required cutting paychecks and shuttering plants along the way. What’s more, Bain usually found a way to reap profits even when the overhaul failed and the company went belly-up.

In the broadest sense, though, the competitiveness revolution was good for the United States. In the 1970s, there were sound economic reasons to expect that other developed nations would gradually catch up to American living standards and per capita G.D.P. Instead, our rivals got rich, but we stayed richer. As Adam Davidson noted in last weekend’s Times Magazine, “even Europe’s best-performing large country, Germany, is about 20 percent poorer than the U.S. on a per-person basis.”

But keeping America’s edge came at a cost. Our economy became more efficient, but also more ruthless and Darwinian. Our G.D.P. kept rising, but the new wealth was less evenly distributed. The revolution delivered growth, but at the expense of stability and certainty. And for many Americans, even the “modest net impact” of private equity buyouts cost them a solid, good-paying job.

On the left, and now apparently in Newt Gingrich’s campaign shop, there’s a persistent suggestion that it could have been entirely otherwise — that the midcentury model could have somehow been sustained, that the private equity “vultures” could have been held at bay, and that what worked for the United States when Europe was in ruins and half the world was Marxist-Leninist could have worked in the age of globalization as well.

This is a fantasy, unfortunately — one that belongs to the world of Hollywood endings, where Gordon Gekko is defeated, Blue Star Airlines stays in business and Bud Fox’s dad gets to retire with a solid pension. Indeed, it’s such a fantasy that even Oliver Stone didn’t quite believe in it: In “Wall Street,” Blue Star was saved from Gekko’s clutches — and presumably, from the real-life fate of an Eastern Airlines or a Pan Am — not by a government subsidy or a benevolent Daddy Warbucks, but by a rival buyout specialist.

Still, just because the private equity revolution was necessary doesn’t mean that it was an unmitigated good. And for Mitt Romney to frame criticisms of Bain as just “the bitter politics of envy,” as he did last week, displays a tone-deafness that could cost him the presidency. No one — and certainly no politician — who has profited so immensely from an age of insecurity should ever appear to be lecturing the people who’ve lost out.

Instead, Romney needs to prove to anxious voters that he and his party have more to offer them than just Bain capitalism alone. To win the White House, he’ll need to promise not only competition that leads to growth, but growth that leads to broadly shared prosperity. To defend his revolution, he’ll need to show that he’s reckoned with its costs.

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Big Data Analytics: Trends to Watch For in 2012 - Harlan Smith - Voices - AllThingsD

Big Data Analytics: Trends to Watch For in 2012

Over the last several years, there has been a massive surge of interest in Big Data Analytics and the groundbreaking opportunities it provides for enterprise information management and decision making. Big Data Analytics is no longer a specialized solution for cutting-edge technology companies — it is evolving into a viable, cost-effective way to store and analyze large volumes of data across many industries. But how will this translate to adoption of these new technologies? How will companies incorporate Big Data into their existing business intelligence and data warehouse (BI/DW) infrastructure? How can end users take advantage of the power Big Data has to offer?

What is Big Data?
Big Data technologies like Apache Hadoop provide a framework for large-scale, distributed data storage and processing across clusters of hundreds or even thousands of networked computers. The overall goal is to provide a scalable solution for vast quantities of data (terabytes/petabytes/exabytes) while maintaining reasonable processing times. These systems are incredibly effective for storing and analyzing large volumes of structured as well as unstructured or semi-structured data such as text, web or application logs, email, web pages, documents, and images.

Big Data in the Enterprise
Companies are capturing and digitizing more information than ever before. According to IDC, the world produced one zettabyte (1,000,000,000,000 gigabytes) of data in 2010. Fueling this data explosion are over five billion mobile phones, 30 billion pieces of content shared on Facebook per month, 20 billion Internet searches per month, and millions of networked sensors connected to mobile phones, energy meters, automobiles, shipping containers, retail packaging and more. Big Data is a platform for transforming all of this data into actionable items for business decision making.

The barriers to entry for Big Data analytics are rapidly shrinking. Big Data cloud services like Amazon Elastic MapReduce and Microsoft’s Hadoop distribution for Windows Azure allow companies to spin up Big Data projects without upfront infrastructure costs and allow them to respond quickly to scale-out requirements. Commercial vendor support from companies like Cloudera can speed development and deliver more value from Big Data projects. Bundled server options such as Oracle’s Big Data Appliance offer fast setup and scale-out solutions. Finally, modular data center designs are emerging as a way to efficiently manage hardware and scale-out rapidly and cost-effectively.

Companies likely to get the most out of Big Data analytics include:

  • Supply chain, logistics, and manufacturing — With RFID sensors, handheld scanners, and on-board GPS vehicle and shipment tracking, logistics and manufacturing operations produce vast quantities of information offering significant insight into route optimization, cost savings and operational efficiency
  • Online services and web analytics — Internet companies invented Big Data specifically to handle processing information at Internet scale. Implementation of these analytical platforms is now viable for smaller online services companies to provide an edge over competitors for advertising, customer intelligence, capacity planning and more. Companies who don’t offer online services but do have an ecommerce or other online presence will benefit greatly from understanding customer behavior and buying patterns via clickstream, cohort analysis and other advanced analytics.
  • Financial services — Financial markets generate immense quantities of stock market and banking transaction data that can help companies maximize trading opportunities or identify potentially fraudulent charges, among various other uses. New regulations also require detailed financial records to be maintained for longer periods.
  • Energy and utilities — Smart instrumentation such as “smart grids” and electronic sensors attached to machinery, oil pipelines and equipment generate streams of incoming data that must be stored and analyzed quickly to uncover and fix potential problems before they result in costly or even disastrous failures.
  • Media and telecommunications — Streaming media, smartphones, tablets, browsing behavior and text messages are captured at ever-increasing rates all over the world, representing a potential treasure trove of knowledge about user behavior and tastes.
  • Health care and life sciences — Electronic medical records systems are some of the most data-intensive systems in the world and making sense of all this data to provide patient treatment options and analyze data for clinical studies can have a dramatic effect for both individual patients and public health management and policy.
  • Retail and consumer products — Retailers can analyze vast quantities of sales transaction data to unearth patterns in user behavior and monitor brand awareness and sentiment with social networking data.

Data Warehouse Integration
To apply this new technology effectively, it is important to understand its role and when and how to integrate Big Data with the other components of the data warehouse environment. In a vast majority of cases, Big Data does not replace the data warehouse. Hadoop is built for speed and flexibility across huge sets of often unstructured data, but is best used for fairly simple workloads, such as sorting, aggregating, converting, and filtering. Hadoop is also not intended to manage schema structure, referential integrity or security. Database management systems are therefore still a vital part of the overall solution architecture. So how will Big Data Analytics be incorporated with existing BI/DW investments?

Hadoop provides an adaptable and robust solution for storing large data volumes and aggregating and applying business rules for on-the-fly analysis that crosses boundaries of traditional ETL and ad-hoc analysis. It is also common for the results of Big Data processing jobs to be automated and loaded into the data warehouse for further transformation, integration and analysis. This allows Big Data to be integrated with data from other sources and exposed to users via BI tools, dashboards and reports. Several options are available for extracting data from Hadoop into the data warehouse. IBM, Informatica, Microsoft, Oracle and SAP have released or announced tools to interface between Hadoop and relational database management systems.

User-Friendly Tools for Big Data
Tools like Apache Pig and Apache Hive provide SQL-like frameworks for advanced data analysts to run queries directly against data stored in Hadoop. This is an effective way to do targeted, one-time analysis, perform exploratory data mining, or develop queries that may later be automated and loaded into a data warehouse. However, these tools require technical expertise and do not cater to end users.

Luckily, there are some exciting end-user tools coming in 2012. Tableau has support for drag and drop Hadoop reporting currently in beta and Microsoft recently announced the Hive ODBC driver and the Hive add-in for Excel which will allow end-user access to data stored in Hadoop through Excel, PowerPivot and Analysis Services. Tools that enable end users to slice, dice and visualize data in Hadoop will become increasingly important components of a company’s Big Data analytics arsenal over the coming years.

Big Data adoption will continue to be driven by large and/or rapidly growing data being captured by automated and digitized business processes. Successful adoption of this technology requires turning this raw information into usable knowledge throughout the enterprise. To accomplish this, companies will need to intelligently incorporate Big Data into their existing information management systems and take advantage of the developing ecosystem of integration and analysis tools. As we move into the age of Big Data, companies that are able to put this technology to work for them are likely to find significant revenue generating and cost savings opportunities that will differentiate them from their competitors and drive success well into the next decade.

Harlan Smith is a Manager in the Business Intelligence and Performance Management practice at Hitachi Consulting, specializing in business intelligence engineering, architecture and project/program management. Harlan is a graduate of the University of Puget Sound in Tacoma, WA, and currently lives in Seattle where he has been a consultant since 2005. Follow him @smithharlan on Twitter.

Stephen.Bates | +1 202 730-9760

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Have We All Gone to the Dogs? WSJ.com

This country is long overdue for a serious conversation about dogs. You know what I'm talking about. Carnac the Alsatian, who busts loose from his leash, bounds across the field and flattens Grandma. Pendleton the remorseless Bichon Frise, who saunters down the sidewalk on his 12-foot leash and then clotheslines you ankle-high. While you're clutching your shattered patella, the dog tears loose from the retracting leash, and the handle jerks back, smacking some innocent passerby right in the kisser. Naturally, it's the victim's fault. "You must have scared him," the owner chides you. "Pendleton never bites unless he feels threatened."

There's more. You go over to a friend's house to watch a football game and some sausage-shaped mutt howls and whines and goes hysterical every time you swear at the ref. When you get up to grab a handful of Doritos, he bounds across the room and rips a chunk out of your calf, then acts like you deserved it.

What's up with these dysfunctional quadrupeds? Why can't they get it through their heads: It's not about you. OK? Parakeets understand this. Turtles do, too. So why not dogs?

Dogs used to be fully integrated into the culture. They ate their disgusting food, slept 18 hours a day and kept their yaps shut. They understood that their mission in life was to go for long walks, kill squirrels, stick their tongue out for photo-ops with the kiddies and scare away intruders. But that was when dogs had names like Rover and Fido and Skippy. Dogs knew their place. They knew where they stood on the depth chart. They never mistook a fire engine or a bawling infant or a grunt from a geriatric house-guest for a Mongol invasion.

But now that dogs have names like Scheherazade and Mr. Bingley and Mingus, they think they own the joint. My sister has a couple of those yappy dogs that look like filthy dust mops, and I'm always getting in trouble for stepping on their paws or accidentally drop-kicking them across the living room. My feeling is: If you don't want to get stepped on, stop impersonating a bedroom slipper. Didn't you guys ever hear of Darwin? And get that hair out of your eyes and try shaking a tail feather every once in a while so the rest of us can tell you're still breathing.

The other day a friend was telling me that "Leo" inadvertently wandered directly into the path of a cow and got spooked. Leo is a dog. The cow didn't have a name. With the exception of Daisy, cows never have names, which is what I love about them. And they don't expect to have names. They're cows. You don't give goldfish, hyenas or future entrées at Smith & Wollensky names like Leo or Daphne or Barnabas. Once you start doing that, they forget pretty soon that they're animals.

People get all weepy when they tell you that their dog just died. They expect you to be compassionate and understanding, as if they'd just lost four sons at Bull Run. Not me. "Valjean did have 17 kinds of cancer and was deaf and blind before you finally had the common decency to put him down," I point out. "So get your chin up, buy another dog. It's not like the dog store's running low on inventory."

When I first moved to my cute little town, it was filled with big, stupid mongrels with loads of time on their hands. They would lie in the sun, snooze and mind their own business. Now my town is filled with Patagonian snow bitches and neurotic dogs that get carted around in iPad cases. Pretty soon you won't be able to live here anymore.

And don't get me started on people who talk about their dogs as if they were children. Nobody ever drove 400 miles round-trip in a single day just to have lunch with their dog on their birthday. And nobody ever spent $200,000 to send a Pekinese to Princeton.

My mom had a cat that lived 15 years. I loved that cat because for 15 solid years it stayed out of my way. We had a good working relationship: You're a pet; I'm a human. Let's keep it that way. Cats get the big picture. Cats stick to the agenda. Cats keep a low profile. To paraphrase Bob Dylan: Cats don't need you and, man, they expect the same.

Just for the record, my mom's cat was named Tom.

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