Washington Decoded

Jerry Ford Was No Accidental President

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By Max Holland

   

    Conventional wisdom attributes Gerald R. Ford’s presidency solely to the Watergate scandal of the 1970s. Yet it is no less accurate to say that but for the assassination of John F. Kennedy in 1963, it is likely that Ford never would have become president. His  ascent was the culmination of eleven tumultuous years, not two.

    To be sure, in the early 1960s, many Republicans believed the tall, blond, athletic congressman from Grand Rapids, Michigan represented the GOP’s best response to Kennedy’s youthful appeal, the perfect spokesman for a modern, postwar brand of Republicanism. But at  the time, the 50-year-old Ford had only one great ambition in life, and it certainly did not include running for president. All he yearned to accomplish politically was to preside as  speaker over a House of Representatives firmly in Republican control.

     The November 22nd assassination changed all that. Akin to a political earthquake with large, persistent aftershocks, the assassination marked the first in a series of convoluted,  yet interrelated, developments that would ultimately thrust Ford into the Oval Office. The sequence defied imagination in 1963, and remains astounding even in retrospect.

    The first tangible effect of the assassination on Ford’s career was the new president’s  decision to appoint him to the Warren Commission, the presidential panel charged with  investigating the assassination. That single decision lifted Ford from being a parochial  congressman—apart from his constituents, he was largely known only to the small club of reporters who covered Capitol Hill—and introduced him to the country at large as a politician worthy of national responsibilities.

    When I interviewed Ford in 1996, I asked him about President Johnson’s November 29th telephone call. Effectively, LBJ was asking Ford to serve under Chief Justice Earl Warren, whose competence and jurisprudence Ford harshly and regularly attacked on the House floor. Ford’s recollection was that he was unenthusiastic,  and had to be dragooned by Johnson into serving. Unbeknownst to Ford, however, LBJ was secretly taping their phone conversation, and the extant recording proved the opposite. Judging from the alacrity of Ford’s expressed willingness to serve, he immediately recognized that the new president was handing him a great big political plum. He leapt, in  fact, at the opportunity.

     Ford might well have eventually risen in the GOP ranks on his own merits, but service on the Warren Commission—in its day, the equivalent of the 9/11 Commission—indelibly marked him as a leader, someone who “would rise to the consciousness of responsibility,” as Speaker John McCormack (D-Massachusetts) put it when Johnson asked McCormack what he thought about selecting the little-known Michigan congressman to sit on the Warren Commission. After the 1964 election, in which the GOP suffered a landslide defeat, the so-called “Young Turks” in  the House, led by a newly-prominent Jerry Ford, mutinied against the House minority leader, Representative Charles Halleck (R-Indiana). Ford won the vote to replace Halleck.

     By 1966, Johnson rued the day that he had plucked the Grand Rapids congressman out of relative obscurity and  put him on a national stage. LBJ would complain bitterly about Ford’s hard-ball tactics to Senator Everett Dirksen (R-Illinois), Ford’s counterpart in the upper body. The energetic  Ford had proved to be far tougher in the political clinches than Halleck ever was, or some of the other GOP congressmen Johnson contemplated appointing to the Warren Commission.

    Over the next decade, the landscape that Ford expected to contend with for the balance of his political life shifted dramatically, also precipitated in no small part by John F. Kennedy’s absence. By 1966, the Democrats’ New Deal coalition was coming unglued under the  twin pressures of the Vietnam war and civil rights, and although the party’s congressional  majority would largely persist for another 30 years, decay was in the air. The skillful Texan who succeeded Kennedy might have coped successfully with one of these elemental challenges, but not both taken together. Southerners and conservative whites elsewhere began abandoning the party in droves, effectively ending Democrats’ hegemony.

    Of course, it’s absurd to think that John Kennedy would not have faced the same troubling issues that destroyed Lyndon Johnson’s desire to stay in office until 1972. Still, it’s hard to imagine, had JFK served two terms, that things would have worked out exactly the same for the Democrats, which is to say, as badly as they did. Johnson had to make critical decisions about South Vietnam in his first term, whereas Kennedy, facing the end of his tenure, might have cut American losses with the same cold calculation that prompted him to overthrow Ngo Dinh Diem. It’s also unlikely that JFK would have ever have lost the allegiance of the Democratic Party’s intelligentsia, much less have been subjected to its blistering attacks.

     The 1968 Democratic crackup, symbolized by the party’s unprecedented repudiation of Johnson, culminated in the narrow election of Richard Nixon, who had seemingly been consigned to political oblivion following his defeats in 1960 and 1962. But with Democrats hopelessly split over foreign policy, Nixon could reasonably claim that a return to Republican stewardship was needed, and he augured in a nearly unbroken period of GOP control of the Oval Office until the cold war ended.

    Nixon shared some of Johnson’s demons, specifically, paranoia about war protestors and the Kennedy mystique. Yet in his lawlessness Nixon was so brazen that it eventually  threatened his own tenure in office. When he needed to appoint a vice president who might actually succeed him in office, the pool of plausible GOP candidates for a national office was not that large. Former New York governor Nelson Rockefeller was anathema to GOP conservatives, and former Texas governor John Connally (another political phenomena formed by the shots in Dealey Plaza) was unacceptable to the GOP rank-and-file, not to mention a Democratic Congress. The GOP leadership in the Senate, after decades of being in the minority, was relatively old and uninspiring, which left the stolid, vigorous Ford as the only Republican who could plausibly claim to have national standing.

    Rather than label Ford the accidental president, because he was never elected, it might make more sense to place him in the same category as a Harry Truman or Dwight Eisenhower. These were also men who, initially, never yearned for the presidency with every fiber of  their being. Only events, and their performance in positions of responsibility, conspired to put them into the Oval Office.

This article first appeared on History News Network, 29 December 2006
© 2006 by Max Holland

Senators Beat the Market with Insider Information

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By Max Holland

   

    The United States Senate is often called “the most exclusive club in Washington,” or exalted by its members as the “world’s greatest deliberative body.” But a new appellation may be in order: the world’s best investment club.

    According to a study conducted by four business professors, in any given year between 1993 and 1998, roughly 1/3 of all senators played the stock market, and those who did enjoyed an “abnormal” rate of return, meaning they out-performed the market. Senators consistently anticipated movements in stock prices: they often purchased stocks just before prices took off like a rocket, and revealed an uncanny ability to sell just when a stock was about to flatten out.

    For some perspective, the authors of the study (university professors Alan Ziobrowski from Georgia State; Ping Cheng from Florida Atlantic; James Boyd from Kent State; and Brigitte Ziobrowski from Augusta State) compared the senators’ performance with that of two groups. The first is the investing public: 66,465 randomly selected households in the United States that were studied in 2000. This group underperformed the market by approximately 1.4 percent annually from 1991 to 1996. The authors also compared the senators’ performance with a 2001 study of corporate insiders during the period 1975 to 1996. This group beat the market by about 6 percent annually—lending credence to the old Wall Street adage that you rarely go wrong if you buy and sell when the insiders do.

    Yet being a corporate insider, and presumably trading on the basis of privileged information, apparently pales next to being a senator. The Ziobrowski et al. study found that senators (including their spouses and dependents) outperformed the market by around 10 percent annually. “Nobody gets results like this in the financial world consistently and over the long term,” notes Professor Tom Ferguson, who studies money in politics at the University of Massachusetts-Boston. Any manager of a mutual fund, in fact, who regularly beats the market by as little as two percent annually is considered an investment genius.

Reel History: Should ABC Have Yanked The Path to 9/11?

The Path to 9/11
Directed by David L. Cunningham
Written by Cyrus Nowrasteh
Produced by Marc Platt/Touchstone Television
Drama. 240 Minutes. 2006

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By Max Holland

 

    It’s an argument as old as the movies themselves: what obligation does Hollywood have to history? When filmmakers claim they are depicting a real event, do they enjoy complete dramatic license? Are they free to create fictional characters, compress time, conflate some events and erase others, invent dialogue, and put real people in fictional situations? Is there a point after which filmmakers risk having their license revoked?

    If there is such a limit, the ABC-TV network would seem to have violated it, judging from the public outburst over its docudrama The Path to 9/11, which was televised over two days in September and touted as “based on the 9/11 Commission Report.” Former President Clinton denounced the $40 million miniseries for not telling the truth, as did his former national security adviser Sandy Berger, former Secretary of State Madeleine Albright, and Richard Clarke, Clinton’s counter-terrorism chief, who labeled the five hours an “egregious distortion.”

    Most irksome to Berger is a fictional scene in which he declines to give the go-ahead to CIA-supported raiders in Afghanistan who have Osama bin Laden in their gunsights prior to 9/11. Before the drama was broadcast, a group of historians, headed by Arthur M. Schlesinger, Jr., wrote to ABC stating that the broadcast would be a “gross disservice” to the public and urged ABC to cancel it.

    ABC, owned by the Walt Disney corporation, was also the target of attacks by elements of the left/liberal blog-osphere, which were hoping to replicate an earlier and successful Internet revolt against CBS. In the fall of 2003, conservative bloggers and their supporters pummeled CBS with an estimated 80,000 angry e-mails demanding the cancellation of a planned miniseries about Ronald Reagan that was less than favorable to him. Under intense fire, CBS eventually caved and relegated what conservatives maintained was a “hit job” on Reagan to its affiliated Showtime channel and a much smaller, cable audience.

    It can be hard to find one’s bearings when such controversies erupt. Defending provably false history, or an unprovable version of events, is not a comfortable position to assume. But the alternative—censorship—is equally discomfiting. The biopic CBS axed was also insightful, in that it suggested Reagan was suffering from the onset of Alzheimer’s disease while still occupying the Oval Office. It seems only a matter of time before historians recognize that keeping Reagan’s mental condition secret will rank somewhere next to Edith Wilson’s de facto role as the first woman president, i.e., running the White House after Woodrow Wilson had suffered an incapacitating stroke.

    Holding filmmakers to a standard that historians struggle to achieve misunderstands the admittedly more powerful medium, and its antecedent, the theatrical play. As Past Imperfect: History According to the Movies points out, Laurence Olivier’s 1944 film of Shakespeare’s Henry V neglected to mention that the English king ordered the slaughter of hundreds of French prisoners at Agincourt. Yet no one protested Olivier’s war-time rendering of Shakespeare’s play (the great dramatist, interestingly, did not ignore the episode).

    A written history may be fully accurate without being truthful—which come to think of it, is not a bad way of thinking about the 9/11 Commission’s report. Films, on the other hand, distill and unavoidably mangle the past, even while the best ones manage to retain and convey the spirit of what happened. But attempting to censor them is ill advised. As Mark Carnes, the editor of Past Imperfect, told The Washington Spectator, “Filmmakers always manipulate the past to serve their own purposes. . . . Better to remind people incessantly that films are not history.”

    Postscript: According to a September 2007 article in the Los Angeles Times, the DVD version of The Path to 9/11 has not been released because ABC and Disney executives fear stirring up more controversy. The DVD might remind Americans, at a time when Hillary Clinton is vying for the  Democratic presidential nomination, of the Clinton administration’s abject failure to protect the nation.

This article first appeared in The Washington Spectator, 15 September 2006
© 2006 by Max Holland

One Year After a Major Realignment, The Intelligence Community Is in Disarray

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By Max Holland   

    In the short space of five years, Americans have witnessed two major intelligence debacles: first, a sin of omission in 2001 (failure to detect and prevent the 9/11 attacks), followed by a sin of commission in 2002–03 (the estimate that Saddam Hussein had stockpiled weapons of mass destruction). These failures produced four major investigations, two by Congress and two by special commissions, and eventually the most drastic restructuring of the intelligence apparatus since 1947.

    The press is currently focused on the White House’s calculated leaks, undertaken to mask their misuse of bad pre-war intelligence. Yet the reordering of intelligence agencies is vastly more significant, albeit less titillating. This reorganization shows signs of creating a system more dysfunctional than the one it replaced. If nothing else, the revamped intelligence apparatus is going to cost U.S. taxpayers a lot more money with no discernible gains.

    The centerpiece of the reorganization enacted into law in December 2004 was the creation of the Office of Director of National Intelligence (ODNI). It had been argued that the three-hatted job of Director of Central Intelligence (DCI) was too much responsibility for any one person. Managing the CIA, along with serving as the president’s principal intelligence adviser, was said to be a full-time job, one that left the DCI too little time for, and not enough authority over, the 17 other agencies that constitute the “intelligence community.”

    The 9/11 Commission made reallocation of these three responsibilities one of its top recommendations in its effort to “rebuild the bloated and failed intelligence bureaucracies,” as John Lehman, one of the commissioners, put it in a November 2005 op-ed article. “We wanted a strong national intelligence director to smash bureaucratic layers, [and] tear down information ’stovepipes.’”

    After George Bush appointed John Negroponte, a career diplomat, as the first DNI in March 2005, all eyes immediately focused on whether Negroponte would assert for himself the role of principal intelligence briefer of the president; that was not a foregone conclusion, not having been legislated. Negroponte did in fact step into that role—“face time” with the president being the single most precious commodity in Washington—and that marked a turning point. Besides representing a demotion for the CIA director and the agency as a whole, it turned the ODNI away from the lean structure touted by the 9/11 panel. Instead of presiding over the intelligence community as an overall coordinator, the DNI suddenly needed troops, and lots of them.

    The ODNI now reportedly boasts 1,000 employees, including a principal-deputy DNI, three associate DNIs, four deputy DNIs, and 19 assistant-deputy DNIs; not to mention its own general counsel, inspector general, and all the other accouterments of any self-respecting federal entity. The restructuring has led (some would say all too predictably) to an entirely new bureaucracy on top of the already swollen bureaucracy that was supposedly a prime cause of the intelligence failures.

Fantasy v. Reality in the Federal Budget

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By Max Holland

   
    In case you missed it—and the Bush administration was certainly hoping that you would—the federal government’s operating deficit for 2005 was $760 billion, or a whopping 138 percent higher than the much more widely reported budget deficit of $319 billion.

    The Bush administration hailed the lesser amount when it was announced last October by the Office of Management and Budget (OMB), largely because at a projected $319 billion, the budget deficit came in significantly lower than most estimates. But there was no fanfare when the Treasury Department reported the negative $760 billion net operating cost to Congress in mid-December—not so much as a press release. The Treasury’s figure, contained in the annual Financial Report of the United States Government, gives the lie to Bush’s contention that his fiscal policies pose no threat to the nation’s economic well-being and security.

    What is the difference between the budget deficit and the net operating figure? They describe virtually the same thing: the difference between what the government spends, and what it takes in, during a given fiscal year. But there is a world of difference in how they are calculated.

    The OMB’s budget deficit is based on simple cash accounting, a method appropriate to a business, oh, say, the size of a corner newsstand. In cash-based accounting, an expense is logged only when it’s actually paid. Under the more accurate system, called accrual-based accounting, expenses are recorded when a business becomes obligated to pay them; that reveals the long-term implications of current spending decisions. The necessity of taking into account future obligations is a major reason why under U.S. law every enterprise with more than $5 million in revenues is required to use accrual-based accounting, and also why David Walker, the U.S. comptroller general, notes that cash accounting paints a “potentially unrealistic and misleading picture of the federal government’s overall performance.”

    The government only began releasing an accrual-based budget figure in 1997, after it was mandated by an act of Congress. Getting the vast federal apparatus to abide by the buzz phrase “generally accepted accounting principles” was an enormous undertaking. It wasn’t until 2000, for example, that reliable figures for Social Security and Medicare could be incorporated into the annual Financial Report.

    When the Bush administration issued its first financial statement in early 2001, it reported a net operating surplus of $46 billion. Since then, there has been a flood tide of red ink. Every year the net operating cost has grown larger, exceeding the more widely known OMB figure by hundreds of billions of dollars. In 2005 alone, as noted, the difference was $441 billion ($319 billion versus $760 billion). Looking at it another way, from 2001 to 2005 Bush’s spending and tax policies resulted in budget deficits totaling $1.1 trillion, according to OMB’s calculations. The Treasury’s accrual-based figure is $2.9 trillion, or 164 percent larger.

    The lion’s share of this difference comes from a sober, accrual-based accounting of the long-term costs of the war in Iraq and the global war on terror. In the 2005 Financial Report, Treasury Secretary John Snow attributed the $441 billion increase over the OMB’s figure “principally to a $198 billion increase in Veterans Affairs’ actuarial costs,” including higher interest rates that will have to be paid because of mounting public indebtedness (from $5.7 trillion on the day Bush took office to more than $8.4 trillion today).

    Accrual accounting also paints a drastically different portrait of whether Bush’s deficits are shrinking or growing ever larger. When the OMB deficit shrank from $413 billion in 2004 to the lower-than-expected $319 billion in 2005, the Bush administration touted the reduction as proof that it was reining in government spending, and that it had been justified in pushing for tax cuts. Slashing taxes reinvigorated the economy, the administration said, resulting in increased revenues. But the accrual-based numbers tell a different story. From 2004 to 2005, the net-operating-cost deficit increased from $616 billion to the aforementioned $760 billion.

    The harsh truth of accrual-based accounting underscores just how reckless the administration is. Lyndon Johnson’s guns-and-butter policy during the Vietnam war looks almost prudent juxtaposed against Bush’s policy of fighting a major war while cutting taxes necessary to pay for it. Bush has deployed the fiscal equivalent of having an all-volunteer armed forces. Just as the absence of a draft diminishes widespread opposition to military adventures, sloughing off the cost of the Iraq war by citing unrealistic OMB budget numbers defers pressure on the administration. Americans aren’t bearing anything close to the economic burden that corresponds to the true cost of the war. Add in budget-busting costs from demographic trends starting in the next decade, and an economic meltdown is on the horizon.

    One of the members of Congress to take notice of this legerdemain has been Representative Allen Boyd, Jr. (D-Florida), a member of the Blue Dog Coalition, a group of 37 moderate-to-conservative Democrats. Boyd warns that “viewing the budget through rose-colored glasses” is “an unhealthy and damaging practice that will affect our economy, our standard of living, and ultimately, our national security.”

This article first appeared in The Washington Spectator, 1 May 2006
© 2006 by Max Holland