Review of “The Prize” by Dale Russakoff

The Prize: The High-Stakes, Big-Money Race to Save Our Failing SchoolsThe Prize: The High-Stakes, Big-Money Race to Save Our Failing Schools by Dale Russakoff

My rating: 4 of 5 stars

Dale Russakoff’s “The Prize” is such a good, and important book. It tells us the story of what happened after Mark Zuckerberg donated $100 million to remake the failing Newark Public Schools. The book is refreshing in so many different ways. It looks at what happens AFTER the initial media euphoria died down, when the nuts and bolts of governance make the difference between success and failure. The Zuckerberg/Christie/Booker effort, for all the hype, has to be diagnosed with a failing grade. Russakoff gives us the story from the ground up, where efforts to bring change to political systems are won and lost. This one was lost on the ground, and Russakoff speaks truth to all sides engaging in the debate on how to best educate our children. Charters vs. traditional public schools? Merit pay for teachers? “Corporatists” trying to ram top down educational theories and practices onto school districts, rewarding a network of consultants wired into the “ed reform” movement? All that, and much more is looked at in this book, with no ideological ax to grind (that I can detect).

There are many pervasive problems in government, and solving those problems requires a willingness to expend some political capital, as well as really concentrating, time wise, on the task at hand. From the book:
“The Star-Ledger reported that Booker spent more than one in five days out of the city in 2011. Sandberg had taken charge of vetting the $100 million arrangement, which specified in writing that Christie would delegate “strategic and operational” leadership of the state-controlled schools to Booker. But despite her widely respected business acumen, she too was apparently caught off guard. As Booker traveled the country making speeches and moved from crisis to crisis, the Facebook duo stumbled upon an open secret in Newark. Clement Price, the Rutgers historian, summed it up this way: “There’s no such thing as a rock-star mayor. You’re either a rock star or a mayor. You can’t be both.” Another tidbit from the book: “The public face of the engagement effort, announced by Booker in early November as a campaign of “relentless outreach,” was a series of eleven forums for Newark residents. “We want bottom-up, teacher-driven reforms that will be sustained,” the mayor said at one forum, although he missed most of them. “We can now access the resources—whatever we need—but we need a community vision for change and reform.”
Unfortunately our political system does not lend itself to the necessary investments of time and capital by elected leadership. Mayor Booker and Governor Christie come out relatively badly, in spite of good intentions. Both were looking to political futures beyond the positions they were in, and while in our system that is accepted, we must also accept the downside of looking beyond the current political horizon. Mayor Booker has become Senator Booker, and Governor Christie is looking to become President Christie. Superficial decision making in difficult areas, in so many instances, kicks the difficult into the future, and allows opportunity for progress to dissipate.

Russakoff looks at the particulars of the “reform” movement in Newark post donation, including the Booker effort to raise an additional $100 million to match the Zuckerberg grant, the ignorance of Zuckerberg to the realities of making changes to the teachers contract, and the eventual disconnect between the reform movement and the people they are supposed to be helping. Investing time is not the only requisite for success. Good management and clear lines of authority are a necessity for success. The misstep on the teachers contract, and the crazy system of accountability that existed in the Newark public schools, contributed to the ultimate failure. From the book:
“A striking feature of the Newark reform effort, from the beginning, was that no one was in charge. Cerf’s concept of a “three-legged stool” implied that Zuckerberg, the governor (through the state-appointed superintendent), and the mayor would call the shots together. To those trying to carry out reforms, this arrangement was opaque and baffling. One of the consultants tasked with redesigning the district said in a private conversation, “I’m not sure who our client is. The contract came through Bari Mattes’s office [Booker’s chief fundraiser], so that suggests Booker is the client, but he has no constitutional authority over education. The funding is from Broad, Goldman Sachs, and Zuckerberg, but they have no legal authority. I think Cerf is the client, because the state runs the district. But I’m not positive.” In other words, the consultants worked for the person who originally founded the consulting firm. Although Booker, Christie, and Cerf were emphatic about the need to impose accountability on a notoriously unaccountable bureaucracy, it was becoming apparent that no one of them was ultimately accountable for making it happen.”

No clear lines of authority, no one person responsible, and huge change needed. Not a recipe for success. For those thinking that only the “corporatist” reformers come off badly that is not so. The teacher unions get nicked as well, and the status quo is described for what it is, a failure for students. Complicated problems do not lend themselves to easy, or ideologically rigid solutions. When you read this outstanding effort by Dale Russakoff that will become apparent.

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Read “The Atlantic” story on the book here.

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Review of Michael Isikoff’s “Hubris”

My review of the really great book by Michael Isikoff on the invasion of Iraq, with a You Tube video featuring Isikoff discussing the book.

Hubris: The Inside Story of Spin, Scandal, and the Selling of the Iraq WarHubris: The Inside Story of Spin, Scandal, and the Selling of the Iraq War by Michael Isikoff

My rating: 4 of 5 stars

A well researched and ultimately compelling indictment of the Bush 43 rationale for the invasion of Iraq. For those that continue to espouse support for the Iraqi debacle a book like this, with actual details that are pretty hard to refute, is like exposing Count Dracula to sunlight. Isikoff demolishes the WMD rationale for invasion thoroughly; in doing so he brings to light not just “intelligence failures” but the subtle, and not so subtle, pressure on the intelligence community to conform to pre-existing theories on Saddam Hussein brought into the new Administration by the likes of Cheney, Wolfowitz, Feith, and the President.

The book covers the serial incompetence involved in planning the Iraq war, and how specifically the intelligence community was compromised by the strong desire of the Administration to go to war. War apologists generally try to skirt details, since they are so damning; Isikoff gives you those details in several key areas. Want to recollect how the Administration twisted the fact sets on the “tubes” they accused Iraq of purchasing for centrifuges? Isikoff not only shows you what nonsense that was, but more importantly that the Administration was aware of the problems with the conclusions they were trying to sell the public. A favorite tactic? Leak “inside information” to selected journalists, and then go on Meet the Press and cite those very same news stories as “evidence” of Saddam’s WMD Program(s).

“So there was Cheney on television citing the Times. He said that he could not reveal intelligence sources, but with the Times story, “it’s now public that, in fact, [Saddam] has been seeking to acquire” the tubes for his nuclear weapons enterprise. We know this, Cheney claimed, “with absolute certainty.” Millions of Meet the Press viewers could be forgiven for not realizing that Cheney was citing an article based on information that had come from his own administration. And Cheney went further by remarking that he could not say whether or not Saddam already had a nuclear weapon, leaving that an open possibility. It was a disingenuous remark, for no U.S. intelligence analyst at the time believed that Saddam had his hands on a nuclear bomb.”
Many folks were astounded by the outrageous claims, but many went along for the ride.”

“A CIA officer involved in the tubes episode called it a ‘perfect coming together of arrogance, incompetence, and basic human error. These screw-ups happen all the time, just not with consequences this enormous.”

It was not just Cheney, although his complicity in the misinformation campaign was critical. The President sold nonsense enthusiastically.
”Bush and Blair also talked about the aluminum tubes. The president assured the prime minister the IAEA was wrong to conclude that the tubes were for artillery rockets, not for a nuclear program. Bush insisted that the specifications of the tubes indicated they were indeed right for a nuclear centrifuge. And when the two talked briefly about postinvasion Iraq, Bush remarked that it was “unlikely there would be internecine warfare between the different religious and ethnic groups.” Blair agreed.”

The Niger yellowcake debacle, in which, despite repeated entreaties from the CIA, the Administration continued to perpetrate the lie that Iraq had attempted to purchase a vast sum of “yellowcake” for its nuclear program, is covered with great specificity. Another detail that war apologists, and the Bush Administration prefer to forget. The pressure to ignore contrary intel on the yellowcake claim is covered in great detail, leading to the famous use of the sixteen words in a Bush State of the Union Address. A national embarrassment. The Bush Administration attempt to dump that fiasco at the feet of the CIA is fairly easily set aside.

“Eleven days previously, the White House had blamed the CIA for the sixteen words. Now aides were aware of documents showing that the national security adviser, the deputy national security adviser, and the chief speechwriter had ignored clear warnings from the CIA.”

Eventually the White House would have to acknowledge that the clear and unambiguous warnings were ignored. The CIA, eager to please, gave warnings but did not do the independent job that should be expected from them. They seemed to realize, at some level, that the Administration was selling snake oil, but ultimately were compromised themselves, especially Director George Tenet. A good snippet from the book gets right to the fundamental question of what the intel actually showed, with Tenet not able to answer a simple question from Joe Biden:”But when Biden and other committee members pressed Tenet on the sourcing for these claims, they got little in the way of answers. During the questioning, a committee staff member slipped Biden a note with a suggested query, and Biden put this question to Tenet: What “technically collected” evidence did the CIA have of Iraqi weapons of mass destruction? What the staffer had in mind was physical proof: radioactive emissions from nuclear sites, electronic intercepts, samples of biological agents. Anything that would be hard and irrefutable. “None, Senator,” Tenet replied. There was a hush in the room. Oh my God, the staffer thought. “ ‘None, Senator’—that answer will ring in my ears as long as I live,” the aide remarked later. Biden appeared bothered. He asked Tenet, “George, do you want me to clear the staff out of the room?” It was a way of asking if Tenet possessed superclassified information, some technical evidence that was so black, so secret, that it couldn’t be shared.”

How did we get to the idea of invading Iraq? Maybe the most important piece of this outrageous series of lies by the Administration was the role of Ahmad Chalabi, and his direct connection to the State of Iran. Chalabi led the Administration by the nose, and even when he was exposed as a total fraud continued to enjoy political support from within the Administration. And what was the connection with Iran, and their intelligence services?

“In late May, Iraqi police, supported by American soldiers, raided the Baghdad home and offices of Ahmad Chalabi, who had become a member of the Iraqi interim governing council created by the U.S. government. U.S. troops seized computers, records, and rifles from two offices of Chalabi’s Iraqi National Congress. An Iraqi judge said the raids were part of an investigation of assorted crimes: torturing people, stealing cars, seizing government facilities. One of the arrest warrants was for Aras Habib, the INC’s intelligence director. Habib had run the group’s controversial “intelligence collection program,” which had supplied fabricating defectors and bogus information to dozens of media outlets before the war. He also had been suspected by the CIA of being an Iranian agent for years—ever since Bob Baer and Maguire had dealt with him in the mid-1990s.”

“As for Habib, he vanished around the time of the raid on the INC headquarters. His suspicious disappearance raised an intriguing and significant question: Had the fellow responsible for slipping bogus INC “intelligence” on Iraq’s supposed WMDs to U.S. officials and journalists—information concocted to start a war—done so at the behest of Iranian intelligence? Had the U.S. government and the American public been the target of an Iranian intelligence operation designed to nudge the United States to war? These were questions U.S. intelligence agencies never seriously investigated.”

Chalabi’s role is one of the greatest outrages of the adventure, and must lead to an examination of the geo-political ramifications of the war. That piece is not covered in the book, but any discussion of the war should reference the fact that the regional player most positively impacted by the U.S. invasion of Iraq was Iran. The Shia assumption of power in Iraq, and the direct connection of many of the new members of the Iraqi government to Iran, made this connection easy to discern not only while it was happening, but before the invasion as well. The neo-cons displayed a shocking lack of even the most fundamental understanding of the regional equilibrium, and how this invasion would tip that equilibrium over in a very negative way for the United States. We continue to suffer the ill effects to this very day, with the ironic twist that many of the same neo-cons who advocated the Iraqi debacle today decry the potential for regional hegemony by Iran.

Of course the Iraqi debacle contains not only the Bush Administration cooking the intel books to justify invasion, but also displaying some of the greatest incompetence in managing Iraq as an occupying power after the fall of the Saddam regime. The book highlights some of the greatest errors committed, but is not strong on post war management. For that I will re-read Bob Woodward’s “State of Denial”. Isikoff gives a very detailed examination of the so called Valerie Plame affair, with Bush Administration officials blowing the cover of CIA operative Valerie Plame Wilson in an attempt to discredit her husband, a vocal critic of the Bush Administration on the interpretation of the so called “Niger-Iraq Yellowcake” intel. Maybe a bit much on this subject, but certainly shows the mindset that brought us to this disaster.

A highly recommended book by an author not afraid to bring the light of day to the dishonest and incompetent handling of the Iraq debacle by the Bush Administration.

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Review of Bismarck by Jonathan Steinberg

Bismarck:A LifeBismarck:A Life by Jonathan Steinberg

My rating: 3 of 5 stars

I enjoyed the book, although it was, in my opinion, light on the the great achievements of Bismarck in foreign policy. Bismarck was a truly monumental historical figure who dominated his era, both domestically and internationally. Steinberg, while writing a strong book in many respects, betrays his anti-Bismarck bias throughout. Steinberg acknowledges Bismarck as a genius, but takes great pains to point out some of the “character flaws” of the great man. Such flaws include losing friends (always the fault of Bismarck), being less than honest as he made the substantial changes to Prussia that resulted in a unified German state that became, and remains, a colossus ,having no real ideological or governing philosophy, (Bismarck did what was good for Bismarck),and the most serious charge, that a straight line existed between Bismarck and Hitler. Without question it must be granted that the edifice of government set up by Bismarck had strong deficiencies that contributed to the German disasters of the 20th century. But most certainly Bismarck’s statesmanship was not practiced by the venal, and quite frankly ignorant, Kaiser Wilhelm II, who dismissed Bismarck and promulgated policies that Bismarck spent his entire foreign policy career seeking to avoid. The German foreign policy, post Bismarck and pre-World War One, cannot be entirely blamed on the “edifice of government” in Prussia and Germany, but should be seen as the result of the Kaiser and other Bismarck opponents throwing off the shackles of Bismarck’s policies that they felt constrained Germany from achieving its dominant role in Europe. Rather than blaming Bismarck I look at it, at least in part, as the ankle-biters of government finally taking down the Iron Chancellor and getting a chance to put forward alternative strategies for Germany. Those policies led to the First World War, and the massive errors made after that war brought us Hitlerism.The Wikipedia entry for Wilhelm II notes: “Upon his enforced retirement and until his dying day, Bismarck was to become a bitter critic of Wilhelm’s policies, but without the support of the supreme arbiter of all political appointments (the Emperor) there was little chance of Bismarck exerting a decisive influence on policy.” Henry Kissinger, in his review of the Steinberg book, repudiated the “direct line from Bismarck to Hitler” theory: “The second caveat concerns the direct line Steinberg draws from Bismarck to Hitler. Bismarck was a rationalist, Hitler a romantic nihilist. Bismarck’s essence was his sense of limits and equilibrium; Hitler’s was the absence of measure and rejection of restraint. The idea of conquering Europe would never have come to Bismarck; it was always part of Hitler’s vision.”

Bismarck was indeed a “rationalist” unconstrained by ideology in determining the best way forward for Germany. That “rationalism” led him to accept restraint, and to attempt to preserve, rather than destroy, the European equilibrium. The original practitioner of “realpolitik’ explained his thoughts in a letter sent to an old friend, appalled that Bismarck would contemplate accommodation with Napoleon III:

“What the principle is that I am supposed to have sacrificed, I cannot correctly formulate from what you write … France only interests me as it affects the situation of my Fatherland, and we can only make our policy with the France that exists … Sympathies and antipathies with regard to foreign powers and persons I cannot reconcile with my concept of duty in the foreign service of my country, neither in myself nor in others. There is in them the germ of disloyalty to the lord or the land which one serves … As long as each of us believes that a part of the chess board is closed to us by our own choice or that we have an arm tied where others can use both arms to our disadvantage, they will make use of our kindness without fear and without thanks.”

With Bismarck there was not going to be any foreclosure of options due to ideological straightjackets imposed by those who wished to play chess with part of the board covered.

Bismarck was a true giant of history. Like many practitioners of government and diplomacy he was far from perfect, and as you read Steinberg’s biography you will get a good flavor for those deficiencies. The Kissinger review, in the New York Times Book Review, is worth a look if you are interested in Bismarck and this book.

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The book review by Henry Kissinger.

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Barry Eichengreen on Greek Crisis- From The Conversation Blog

Reprinted from The Conversation by Barry Eichengreen, Professor of Political Science and Economics at the University of California- Berkeley.

Path to Grexit tragedy paved by political incompetence

Barry Eichengreen, University of California, Berkeley

Since our last episode, the crisis in Greece has escalated further. Negotiations between the government and its creditors collapsed over the weekend, and restrictions on bank withdrawals will now follow.

The next step is for the government to issue the equivalent of IOUs to pay salaries and pensions. The country is seemingly on the slippery slope to exiting the euro.

Many of us doubted that it would come to this. In particular, I doubted that it would come to this.

Nearly a decade ago, I analyzed scenarios for a country leaving the eurozone. I concluded that this was exceedingly unlikely to happen. The probability of a Grexit, or any Otherexit, I confidently asserted, was vanishingly small.

My friend and UC Berkeley colleague Brad DeLong regularly reminds us of the need to “mark our views to market.” So where did this prediction go wrong?

Why a euro exit didn’t make sense

My analysis was based on a comparison of economic costs and benefits of a country exiting the euro. The costs, I concluded, would be severe and heavily front-loaded.

Raising the possibility, however remote, of exit from the euro would ignite a bank run in said country. The authorities would be forced to shutter the financial system. Economic activity would grind to a halt. Losing access to not just their savings but also imported petrol, medicines and foodstuffs, angry citizens would take to the streets.

Not only would any subsequent benefits, by comparison, be delayed, but they would be disappointingly small.

With the government printing money to finance its spending, inflation would accelerate, and any improvement in export competitiveness due to depreciation of the newly reintroduced national currency would prove ephemeral.

In Greece’s case, moreover, there is the problem that the country’s leading export, refined petroleum, is priced in dollars and relies on imported oil, which is also priced in dollars. So much for the advantages of a depreciated currency.

Agricultural exports for their part will take several harvests to ramp up. And attracting more tourists won’t be easy against a drumbeat of political unrest.

What went wrong?

How did Greece end up in this pickle? Some say that the specter of a bank run was no longer a deterrent to exit once that bank run started anyway due to the deep depression into which the Greek economy had sunk.

But what is remarkable is how the so-called bank run remained a jog – it was still perfectly manageable until the Greek government called its referendum on the terms of the bail out deal offered by international creditors, negotiations broke down and exit became a real possibility.

Nonperforming loans — ones that are in default or close to it — were already rising, to be sure, but the banks still had all the liquidity they needed. The European Central Bank supported the Greek banking system with emergency liquidity assistance (ELA) right up to the very end of June. Only when Greece stopped negotiating did the Central Bank stop increasing ELA. And only then did a full-fledged bank run break out.

So I stand by the economic argument. Where I need to mark my views to market, however, is for underestimating the role of politics. In particular, I underestimated the extent of political incompetence – not just of the Greek government but even more so of its creditors.

In January Syriza had run on a platform of no more spending cuts or tax increases but also of keeping the euro. It should have anticipated that some compromise would be needed to square this circle. In the event, that realization was strangely late in coming.

And Prime Minister Alexis Tsipras and his government should have had the courage of its convictions. If it was unwilling to accept the creditors’ final offer, then it should have stated its refusal, pure and simple. If it preferred to continue negotiating, then it should have continued negotiating. The decision to call a referendum in midstream only heightened uncertainty. It was a transparent effort to evade responsibility. It was the action of leaders more interested in retaining office than in minimizing the cost to the country of the crisis.

A hard lesson learned

Still, this incompetence pales in comparison with that of the European Commission, the ECB and the IMF.

The three institutions opposed debt restructuring in 2010 when the crisis still could have been resolved at low cost. They continued to resist it in 2015, when a debt write-down was the obvious concession to Mr Tsipras & Company. The cost would have been small. Pretending instead that Greece’s debts could be repaid hardly enhanced their credibility.

Instead, the creditors first calculated the size of the primary budget surpluses that Greece would have to run in order to hypothetically repay its debt. They then required the government to raise taxes and cut spending sufficiently to produce those surpluses.

They ignored the fact that, in so doing, they consigned the country to an even deeper depression. By privileging their own balance sheets, they got the Greek government and the outcome they deserved.

The implication is clear. Never underestimate the ability of politicians to do the wrong thing. I will try to remember next time.

The Conversation

Barry Eichengreen is Professor of Economics and Political Science at University of California, Berkeley.

This article was originally published on The Conversation.
Read the original article.

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Review of Steve Rattner’s “Overhaul” on Auto Industry Bailout.

Overhaul: An Insider's Account of the Obama Administration's Emergency Rescue of the Auto IndustryOverhaul: An Insider’s Account of the Obama Administration’s Emergency Rescue of the Auto Industry by Steven Rattner

My rating: 4 of 5 stars

A very good accounting of the events surrounding the U.S. Government bailout of the American auto industry. Rattner did not pull very many punches in his analysis of the problems facing the auto industry or of the individuals involved in the massive restructuring that saved G.M. and Chrysler. Rattner gave out some pretty harsh criticism of auto industry executives as well as some notable politicians, and the criticism, from my perspective, was fair and deserved. The condition of General Motors, and the absolute blindness of top executives to the management rot that brought an American manufacturing giant to the cusp of ruin, is highlighted through this book. Lots of money being paid to top managers at G.M. for negative results. Rattner goes through some of the details, including the fate of bondholders and the terms ultimately accepted by the U.A.W. , two of the areas where the results of the restructuring have come in for the most criticism. His defense of those terms is spirited, and takes into account Rattner’s fundamental understanding of what could be achieved politically with the UAW. Rattner couples his criticism of the auto industry with a fairly harsh attack on Congress, and that criticism is bi-partisan. He shows the hypocrisy on both sides of the aisle, but points at Congress as an institution:
“The auto rescue succeeded in no small part because we did not have to deal with Congress. Before taking up my post, I didn’t realize how important this would be. I went to Washington thinking I understood the strengths and weaknesses of our legislative branch. Either I’d been hopelessly naive when I’d covered Congress as a reporter or it had changed for the worse. I was stunned to realize that if the task force had not been able to operate under the aegis of TARP, we would have been subject to endless congressional posturing, deliberating, bickering, and micromanagement, in the midst of which one or more of the troubled companies under our care would have gone bankrupt. Congress yields authority only under the direst of circumstances, as the example of TARP shows.”
Spoken like a true executive! But despite Rattner’s pro-executive bias his estimations of Congressional preening and ego driven meddling ring true. Legislative bodies tend to be alike in many ways. Congress is at the top of the food chain in terms of the very worst tendencies of legislative bodies to ignore substance in favor of uninformed politics.
Rattner, for a guy with $200 million in the bank, makes it a point to highlight all the times he picked up a dinner or lunch tab. But his personal parsimony does not take away from what is a pretty good book. This issue, if handled differently by Mitt Romney, who comes from a family that ran American Motors, might have tipped the 2012 election in a different direction. At the end of the day the decision to save the U.S. Auto industry was indeed the correct course of action. Rattner helps us to understand the details that went into that decision.

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