This Recession is Going To Be a Long One
By James Livingston
James Livingston is Professor of History at Rutgers University.
Why do we think we’re in a recovery? What makes us think that the economic crisis has passed? Why don’t we see that it’s getting worse, and now threatens, more than ever, to become a replica of the Great Depression?
Is it because we want Obama to succeed? Is it because we can’t believe that the fabled “safety net” can fail us, no matter what the Republicans have done to “starve the beast” we call the welfare state? Is it because we must believe that the ignorance and barbarism of the radical Right represent nothing more than the spastic, dying gestures of a species that knows it’s endangered?
Or is it because we’ve bought into the two big lies of our time? The first lie is that capitalism is sound. Yes, of course, we say, along with the happy monetarists and the chastened Keynesians, the financial sector got a little carried away there with those securitized investment vehicles and credit default swaps, but the system itself is beyond reproach; like democracy, we tell ourselves, it’s messy, but it’s better than the alternatives.
The second lie is that every company and every individual needs to “deleverage”—that means shed debt, stop spending, and start saving—so that the groundwork for robust growth in the future can be laid. Yes, of course, we say, along with the new Puritans and Hoovers of our time, we consumers went too deep into debt, and now we can change ourselves and the economy for the better; our children will thank us, we tell ourselves, for getting thrifty, balancing budgets, trimming all excess.
We’re in denial on all counts. Maybe worse, maybe we’re just deluded, and by our very own selves.
Consumer spending is still dropping (as of January, by about $120 billion, a 3 percent decline since July 2008) in keeping with a precipitous decline in consumer confidence from January to February; consumer debt contracted in 2009 for the first time since 1945. The Wall Street Journal’s front page of March 12 hails this contraction as an obvious boost for hopes of recovery even as—in the same article—it cites its own survey of economists to the effect that a retrenchment by consumers is the single biggest threat to recovery.
Meanwhile unemployment has become almost normal. 44 percent of families experienced a job loss, a reduction in hours, or a pay cut in the past year. The unemployment rate among men aged 25 to 55 is 19.4 percent. The real unemployment rates in California and Michigan—which counts people who’ve stopped looking for work and who’ve unwillingly accepted part-time employment—is over 20 percent. Nationwide it’s about 16 percent. The “official” unemployment rate among black men aged 20 and older is almost 17 percent, which puts the real rate at about 23 percent.
My prediction in the fall of 2008 was that overall unemployment would exceed 10 percent by the end of 2009; my guess now is that it will reach 12 percent by the end of 2010, and will get worse by 2011. These numbers are causally connected, of course, you don’t spend when you’re out of work, or, more pertinently, when you’re worried about keeping the job you have.
Now consider commercial real estate. I just read the Congressional Oversight Panel’s Report on this impending disaster, and it’s much worse than you think. Between 2010 and 2014, $1.4 trillion in loans will come due—but nearly half of all these mortgages are already “underwater” (the borrower owes more than the property is worth) because commercial property values have fallen more than 40 percent since 2007. You read that right—more than 40 percent, which exceeds even the unprecedented fall in residential property values. Rents are down 40 percent for office space (where vacancy rates are at 18 percent) and 33 percent for retail space.
So the construction business is doomed to a lost decade. I don’t see how it recovers before I’m dead. The local and regional banks that serve this industry—they hold the paper that’s worth half of what they expected—will remain paralyzed as a result. Not that they’ve been loaning to anybody, anyway. Welcome to Dubai.
But what about those improvements in the “housing market,” as the economists like to call the apparent cause and effect of our current predicament? Prices are rising, aren’t they, at least in certain markets? Well, no, they’ve just stopped falling. Or have they? The National Association of Realtors index of house prices in 20 metropolitan areas rose 0.3 percent in December, then fell 3.4 percent in January.
Existing home sales declined 16.2 percent in December, and another 7.2 percent in January. New home sales dropped 9.5 percent in November, 3.9 percent in December, and 11.2 percent in January—to the lowest level since 1963. Inventory of new homes increased to 9.1 months in January, from 6.7 months in December. Big surprise, mortgage applications are down again. And these declines are occurring in the context of a tax credit for home buyers and mortgage rates that are ridiculously low.
The truly scary part of this sorry catalog is the plight of state budgets and their impending impact on employment. California laid off 30,000 teachers last year because of a $9 billion cut to K-12 budgets imposed by the state legislature; it rehired some of these teachers on one-year contracts after the educational stimulus from Washington arrived, but the state’s school system now faces a $113 million shortfall. San Francisco now plans to fire 10 percent of its teachers and staff.
New Jersey’s deficit exceeds $45 billion, and so its school system—including my employer, the State University—will take a similarly catastrophic hit in the absence of a renewed stimulus plan targeted at education. The president of Rutgers just announced a buyout program for senior faculty to save money on salaries, but the new budget cuts there will reduce hiring until 2012. And in Illinois, the state has already announced that it can’t pay its “categoricals” such as Special Education mandates, so that younger teachers will be laid off; 13,000 Reduction in Force memos have already been delivered. The governor announced last week that the $613 million budget shortfall for education can be closed only by means of an increase in the state income tax. Meanwhile the Chicago public schools face a deficit of $1 billion. You read that right. And because the consumer price index has increased only slightly, wage increases for all teachers have been effectively nullified.
In a recent column for the Financial Times (2/24/10), my favorite economist, Martin Wolf, shows that a capital strike is underway—he doesn’t call it that, of course, but he does complain that “the private sector is now spending far less than its aggregate income.” In the US, this surplus profit is already 7.3 percent of GDP. But if neither consumers nor investors are spending, if every company and individual is “deleveraging,” there can be no recovery, because aggregate demand will keep falling unless government spending makes up the difference. But in that case, a “sovereign debt crisis” may well be the outcome—when government deficits become so large that borrowing more becomes impossible.
Wolf’s formula for a successful exit from the lingering economic crisis is that “private sector spending surges anew,” and by this he means investment—“China alone needs higher consumption.” And yet both he and Alan Greenspan noted back in 2007 that retained corporate earnings had already exceeded investment for six years; the surplus profits of the past two years are nothing new. Both men also noted that consumer credit made up the shortfall of aggregate demand and kept the economy afloat.
In the absence of increased consumer spending, in short, recovery is out of the question; for capital will remain on strike until “de-leveraging” is complete and the balance sheets look plausible again. But the only thing that can generate such consumer spending is a substantial reduction in unemployment, simply because consumer credit of every kind is now harder to come by and wages remain stagnant.
You may recall that the winter of despair—the depth of the Great Depression—came in 1932-33, not in 1929 or even 1931, when Herbert Hoover was still convening meetings of businessmen at the White House, hoping to talk them into maintaining their payrolls or enlarging their portfolios, and drafting the daring financial fix that would become the Reconstruction Finance Corporation (which, practically speaking, replaced the banking system over the next eight years). The real descent came as the budgets of private charities as well as state and local governments were busted in 1931 and 1932, two or three years after the Crash.
So batten down the hatches, folks, it’s not going to get any better any time soon. The so-called recovery is a big lie because it is impossible in the absence of significantly increased employment and consumer spending.
But perhaps there is a silver lining in this dark cloud coming down. As late as October 1932, Roosevelt was accusing Hoover of fiscal profligacy, and saying “I regard reduction in federal spending as one of the most important issues of this campaign. In my opinion, it is the most direct and effective contribution that Government can make to business.” Four years later, having promoted real recovery without any help from the shattered banking system—between 1933 and 1937, the economy grew at the fastest annual rates of the twentieth century—by deficit spending, by supporting the Wagner Act and Social Security, and by using the Temporary National Economic Committee to discipline an unruly capitalist class, FDR won a realigning election that, among other things, brought black voters into the Democratic Party. Maybe Obama can pull off a comparable miracle between now and the election of 2012.

This Recession is Going To Be a Long One
By James Livingston NY TIMES
Professor of History at Rutgers University.
Why do we think we’re in a recovery? What makes us think that the economic crisis has passed? Why don’t we see that it’s getting worse, and now threatens, more than ever, to become a replica of the Great Depression?
Is it because we want Obama to succeed? Is it because we can’t believe that the fabled “safety net” can fail us, no matter what the Republicans have done to “starve the beast” we call the welfare state? Is it because we must believe that the ignorance and barbarism of the radical Right represent nothing more than the spastic, dying gestures of a species that knows it’s endangered?
Or is it because we’ve bought into the two big lies of our time? The first lie is that capitalism is sound. Yes, of course, we say, along with the happy monetarists and the chastened Keynesians, the financial sector got a little carried away there with those securitized investment vehicles and credit default swaps, but the system itself is beyond reproach; like democracy, we tell ourselves, it’s messy, but it’s better than the alternatives.
The second lie is that every company and every individual needs to “deleverage”—that means shed debt, stop spending, and start saving—so that the groundwork for robust growth in the future can be laid. Yes, of course, we say, along with the new Puritans and Hoovers of our time, we consumers went too deep into debt, and now we can change ourselves and the economy for the better; our children will thank us, we tell ourselves, for getting thrifty, balancing budgets, trimming all excess.
We’re in denial on all counts. Maybe worse, maybe we’re just deluded, and by our very own selves.
Consumer spending is still dropping (as of January, by about $120 billion, a 3 percent decline since July 2008) in keeping with a precipitous decline in consumer confidence from January to February; consumer debt contracted in 2009 for the first time since 1945. The Wall Street Journal’s front page of March 12 hails this contraction as an obvious boost for hopes of recovery even as—in the same article—it cites its own survey of economists to the effect that a retrenchment by consumers is the single biggest threat to recovery.
Meanwhile unemployment has become almost normal. 44 percent of families experienced a job loss, a reduction in hours, or a pay cut in the past year. The unemployment rate among men aged 25 to 55 is 19.4 percent. The real unemployment rates in California and Michigan—which counts people who’ve stopped looking for work and who’ve unwillingly accepted part-time employment—is over 20 percent. Nationwide it’s about 16 percent. The “official” unemployment rate among black men aged 20 and older is almost 17 percent, which puts the real rate at about 23 percent.
My prediction in the fall of 2008 was that overall unemployment would exceed 10 percent by the end of 2009; my guess now is that it will reach 12 percent by the end of 2010, and will get worse by 2011. These numbers are causally connected, of course, you don’t spend when you’re out of work, or, more pertinently, when you’re worried about keeping the job you have.
Now consider commercial real estate. I just read the Congressional Oversight Panel’s Report on this impending disaster, and it’s much worse than you think. Between 2010 and 2014, $1.4 trillion in loans will come due—but nearly half of all these mortgages are already “underwater” (the borrower owes more than the property is worth) because commercial property values have fallen more than 40 percent since 2007. You read that right—more than 40 percent, which exceeds even the unprecedented fall in residential property values. Rents are down 40 percent for office space (where vacancy rates are at 18 percent) and 33 percent for retail space.
So the construction business is doomed to a lost decade. I don’t see how it recovers before I’m dead. The local and regional banks that serve this industry—they hold the paper that’s worth half of what they expected—will remain paralyzed as a result. Not that they’ve been loaning to anybody, anyway. Welcome to Dubai.
But what about those improvements in the “housing market,” as the economists like to call the apparent cause and effect of our current predicament? Prices are rising, aren’t they, at least in certain markets? Well, no, they’ve just stopped falling. Or have they? The National Association of Realtors index of house prices in 20 metropolitan areas rose 0.3 percent in December, then fell 3.4 percent in January.
Existing home sales declined 16.2 percent in December, and another 7.2 percent in January. New home sales dropped 9.5 percent in November, 3.9 percent in December, and 11.2 percent in January—to the lowest level since 1963. Inventory of new homes increased to 9.1 months in January, from 6.7 months in December. Big surprise, mortgage applications are down again. And these declines are occurring in the context of a tax credit for home buyers and mortgage rates that are ridiculously low.
The truly scary part of this sorry catalog is the plight of state budgets and their impending impact on employment. California laid off 30,000 teachers last year because of a $9 billion cut to K-12 budgets imposed by the state legislature; it rehired some of these teachers on one-year contracts after the educational stimulus from Washington arrived, but the state’s school system now faces a $113 million shortfall. San Francisco now plans to fire 10 percent of its teachers and staff.
New Jersey’s deficit exceeds $45 billion, and so its school system—including my employer, the State University—will take a similarly catastrophic hit in the absence of a renewed stimulus plan targeted at education. The president of Rutgers just announced a buyout program for senior faculty to save money on salaries, but the new budget cuts there will reduce hiring until 2012. And in Illinois, the state has already announced that it can’t pay its “categoricals” such as Special Education mandates, so that younger teachers will be laid off; 13,000 Reduction in Force memos have already been delivered. The governor announced last week that the $613 million budget shortfall for education can be closed only by means of an increase in the state income tax. Meanwhile the Chicago public schools face a deficit of $1 billion. You read that right. And because the consumer price index has increased only slightly, wage increases for all teachers have been effectively nullified.
In a recent column for the Financial Times (2/24/10), my favorite economist, Martin Wolf, shows that a capital strike is underway—he doesn’t call it that, of course, but he does complain that “the private sector is now spending far less than its aggregate income.” In the US, this surplus profit is already 7.3 percent of GDP. But if neither consumers nor investors are spending, if every company and individual is “deleveraging,” there can be no recovery, because aggregate demand will keep falling unless government spending makes up the difference. But in that case, a “sovereign debt crisis” may well be the outcome—when government deficits become so large that borrowing more becomes impossible.
Wolf’s formula for a successful exit from the lingering economic crisis is that “private sector spending surges anew,” and by this he means investment—“China alone needs higher consumption.” And yet both he and Alan Greenspan noted back in 2007 that retained corporate earnings had already exceeded investment for six years; the surplus profits of the past two years are nothing new. Both men also noted that consumer credit made up the shortfall of aggregate demand and kept the economy afloat.
In the absence of increased consumer spending, in short, recovery is out of the question; for capital will remain on strike until “de-leveraging” is complete and the balance sheets look plausible again. But the only thing that can generate such consumer spending is a substantial reduction in unemployment, simply because consumer credit of every kind is now harder to come by and wages remain stagnant.
You may recall that the winter of despair—the depth of the Great Depression—came in 1932-33, not in 1929 or even 1931, when Herbert Hoover was still convening meetings of businessmen at the White House, hoping to talk them into maintaining their payrolls or enlarging their portfolios, and drafting the daring financial fix that would become the Reconstruction Finance Corporation (which, practically speaking, replaced the banking system over the next eight years). The real descent came as the budgets of private charities as well as state and local governments were busted in 1931 and 1932, two or three years after the Crash.
So batten down the hatches, folks, it’s not going to get any better any time soon. The so-called recovery is a big lie because it is impossible in the absence of significantly increased employment and consumer spending.
But perhaps there is a silver lining in this dark cloud coming down. As late as October 1932, Roosevelt was accusing Hoover of fiscal profligacy, and saying “I regard reduction in federal spending as one of the most important issues of this campaign. In my opinion, it is the most direct and effective contribution that Government can make to business.” Four years later, having promoted real recovery without any help from the shattered banking system—between 1933 and 1937, the economy grew at the fastest annual rates of the twentieth century—by deficit spending, by supporting the Wagner Act and Social Security, and by using the Temporary National Economic Committee to discipline an unruly capitalist class, FDR won a realigning election that, among other things, brought black voters into the Democratic Party. Maybe Obama can pull off a comparable miracle between now and the election of 2012.

Fighting Words SLATE
The Pope Is Not Above the Law
The crimes within the Catholic Church demand justice.
By Christopher Hitchens
One by one, as I predicted, the pathetic excuses of Joseph Ratzinger's apologists evaporate before our eyes. It was said until recently that when the Rev. Peter Hullermann was found to be a vicious pederast in 1980, the man who is now pope had no personal involvement in his subsequent transfer to his own diocese or in his later unimpeded career as a rapist and a molester. But now we find that the psychiatrist to whom the church turned for "therapy" was adamant that Hullermann never be allowed to go near children ever again. We also find that Ratzinger was one of those to whom the memo about Hullermann's transfer was actually addressed. All attempts to place the blame on a loyal subordinate, Ratzinger's vicar general, the Rev. Gerhard Gruber, have predictably failed. According to a recent report, "the transfer of Father Hullermann from Essen would not have been a routine matter, experts said." Either that—damning enough in itself—or it perhaps would have been a routine matter, which is even worse. Certainly the pattern—of finding another parish with fresh children for the priest to assault—is the one that has become horribly "routine" ever since and became standard practice when Ratzinger became a cardinal and was placed in charge of the church's global response to clerical pederasty.
So now a new defense has had to be hastily improvised. It is argued that, during his time as archbishop of Munich and Freising, Germany, Ratzinger was more preoccupied with doctrinal questions than with mere disciplinary ones. Of course, of course: The future pope had his eyes fixed on ethereal and divine matters and could not be expected to concern himself with parish-level atrocities. This cobbled-up apologia actually repays a little bit of study. What exactly were these doctrinal issues? Well, apart from punishing a priest who celebrated a Mass at an anti-war demonstration—which incidentally does seem to argue for a "hands-on" approach to individual clergymen—Ratzinger's chief concern appears to have been that of first communion and first confession. Over the previous decade, it had become customary in Bavaria to subject small children to their first communion at a tender age but to wait a year until they made their first confession. It was a matter of whether they were old enough to understand. Enough of this liberalism, said Ratzinger, the first confession should come in the same year as the first communion. One priest, the Rev. Wilfried Sussbauer, reports that he wrote to Ratzinger expressing misgivings about this and received "an extremely biting letter" in response.
So it seems that 1) Ratzinger was quite ready to take on individual priests who gave him any trouble, and 2) he was very firm on one crucial point of doctrine: Get them young. Tell them in their infancy that it is they who are the sinners. Instill in them the necessary sense of guilt. This is not at all without relevance to the disgusting scandal into which the pope has now irretrievably plunged the church he leads. Almost every episode in this horror show has involved small children being seduced and molested in the confessional itself. To take the most heart-rending cases to have emerged recently, namely the torment of deaf children in the church-run schools in Wisconsin and Verona, Italy, it is impossible to miss the calculated manner in which the predators used the authority of the confessional in order to get their way. And again the identical pattern repeats itself: Compassion is to be shown only to the criminals. Ratzinger's own fellow clergy in Wisconsin wrote to him urgently—by this time he was a cardinal in Rome, supervising the global Catholic cover-up of rape and torture—beseeching him to remove the Rev. Lawrence C. Murphy, who had comprehensively wrecked the lives of as many as 200 children who could not communicate their misery except in sign language. And no response was forthcoming until Father Murphy himself appealed to Ratzinger for mercy—and was granted it.
For Ratzinger, the sole test of a good priest is this: Is he obedient and discreet and loyal to the traditionalist wing of the church? We have seen this in his other actions as pope, notably in the lifting of the excommunication of four bishops who were members of the so-called Society of St. Pius X, that group of extreme-right-wing schismatics founded by Father Marcel Lefebvre and including the Holocaust-denying Richard Williamson. We saw it when he was a cardinal, defending the cultish and creepy Legion of Christ, whose fanatical leader managed to father some children as well as to shield the molestation of many more. And we see it today, when countless rapists and pederasts are being unmasked. One of those accused in the Verona deaf-school case is the late archbishop of the city, Giuseppe Carraro. Next up, if our courts can find time, will be the Rev. Donald McGuire, a serial offender against boys who was also the confessor and "spiritual director" for Mother Teresa. (He, too, found the confessional to be a fine and private place and made extensive use of it.)
This is what makes the scandal an institutional one and not a matter of delinquency here and there. The church needs and wants control of the very young and asks their parents to entrust their children to certain "confessors," who until recently enjoyed enormous prestige and immunity. It cannot afford to admit that many of these confessors, and their superiors, are calcified sadists who cannot believe their luck. Nor can it afford to admit that the church regularly abandoned the children and did its best to protect and sometimes even promote their tormentors. So instead it is whiningly and falsely asserting that all charges against the pope—none of them surfacing except from within the Catholic community—are part of a plan to embarrass him.
This hasn't been true so far, but it ought to be true from now on. This grisly little man is not above or outside the law. He is the titular head of a small state. We know more and more of the names of the children who were victims and of the pederasts who were his pets. This is a crime under any law (as well as a sin), and crime demands not sickly private ceremonies of "repentance," or faux compensation by means of church-financed payoffs, but justice and punishment. The secular authorities have been feeble for too long but now some lawyers and prosecutors are starting to bestir themselves. I know some serious men of law who are discussing what to do if Benedict tries to make his proposed visit to Britain in the fall. It's enough. There has to be a reckoning, and it should start now.
Christopher Hitchens is a columnist for Vanity Fair and the Roger S. Mertz media fellow at the Hoover Institution.

A Nope for Pope

By MAUREEN DOWD
WASHINGTON NY TIMES
Yup, we need a Nope.
A nun who is pope.
The Catholic Church can never recover as long as its Holy Shepherd is seen as a black sheep in the ever-darkening sex abuse scandal.
Now we learn the sickening news that Cardinal Joseph Ratzinger, nicknamed “God’s Rottweiler” when he was the church’s enforcer on matters of faith and sin, ignored repeated warnings and looked away in the case of the Rev. Lawrence C. Murphy, a Wisconsin priest who molested as many as 200 deaf boys.
The church has been tone deaf and dumb on the scandal for so long that it’s shocking, but not surprising, to learn from The Times’s Laurie Goodstein that a group of deaf former students spent 30 years trying to get church leaders to pay attention.
“Victims give similar accounts of Father Murphy’s pulling down their pants and touching them in his office, his car, his mother’s country house, on class excursions and fund-raising trips and in their dormitory beds at night,” Goodstein wrote. “Arthur Budzinski said he was first molested when he went to Father Murphy for confession when he was about 12, in 1960.”
It was only when the sanctity of the confessional was breached that an archbishop in Wisconsin (who later had to resign when it turned out he used church money to pay off a male lover) wrote to Cardinal Ratzinger at the Vatican to request that Father Murphy be defrocked.
The cardinal did not answer. The archbishop wrote to a different Vatican official, but Father Murphy appealed to Cardinal Ratzinger for leniency and got it, partly because of the church’s statute of limitations. Since when does sin have a statute of limitations?
The pope is in too deep. He has proved himself anything but infallible. And now he claims he was uninformed on the matter of an infamous German pedophile priest. A spokesman for the Munich archdiocese said on Friday that Ratzinger, running the diocese three decades ago, would not have read the memo sent to him about Father Peter Hullermann’s getting cycled back into work with children because between 700 to 1,000 memos go to the archbishop each year.
Let’s see. That’s two or three memos a day. And Ratzinger was renowned at the Vatican for poring through voluminous, recondite theological treatises.
Because he did not defrock the demented Father Murphy, it’s time to bring in the frocks.
Pope Benedict has continued the church’s ban on female priests and is adamant against priests’ having wives. He has started two investigations of American nuns to check on their “quality of life” — code for seeing if they’ve grown too independent. As a cardinal he wrote a Vatican document urging women to be submissive partners and not take on adversarial roles toward men.
But the completely paternalistic and autocratic culture of Il Papa led to an insular, exclusionary system that failed to police itself, and that became a corrosive shelter for secrets and shame.
If the church could throw open its stained glass windows and let in some air, invite women to be priests, nuns to be more emancipated and priests to marry, if it could banish criminal priests and end the sordid culture of men protecting men who attack children, it might survive. It could be an encouraging sign of humility and repentance, a surrender of arrogance, both moving and meaningful.
Cardinal Ratzinger devoted his Vatican career to rooting out any hint of what he considered deviance. The problem is, he was obsessed with enforcing doctrinal orthodoxy and somehow missed the graver danger to the most vulnerable members of the flock.
The sin-crazed “Rottweiler” was so consumed with sexual mores — issuing constant instructions on chastity, contraception, abortion — that he didn’t make time for curbing sexual abuse by priests who were supposed to pray with, not prey on, their young charges.
American bishops have gotten politically militant in recent years, opposing the health care bill because its language on abortion wasn’t vehement enough, and punishing Catholic politicians who favor abortion rights and stem cell research. They should spend as much time guarding the kids already under their care as they do championing the rights of those who aren’t yet born.
Decade after decade, the church hid its sordid crimes, enabling the collared perpetrators instead of letting the police collar them. In the case of the infamous German priest, one diocese official hinted that his problem could be fixed by transferring him to teach at a girls’ school. Either they figured that he would not be tempted by the female sex, or worse, the church was even less concerned about putting little girls at risk.
The nuns have historically cleaned up the messes of priests. And this is a historic mess. Benedict should go home to Bavaria. And the cardinals should send the white smoke up the chimney, proclaiming “Habemus Mama.”

Obama's Power Surge
by Peter Beinart Daily Beast
Ever since health care passed, the president is getting comfortable with flexing his muscles. Peter Beinart on the rise of the liberal Reagan.
Is it just me, or does Barack Obama seem different since health care passed? He’s sticking it to the Senate by appointing 15 nominees while it is on recess; he’s sticking it to Benjamin Netanyahu by not backing down from demands that Israel halt building in East Jerusalem; he’s sticking it to the banks by aggressively pushing financial reform. It’s hard to believe that only two months ago, Paul Krugman announced that “I’m pretty close to giving up on Mr. Obama, who seems determined to confirm every doubt I and others ever had about whether he was ready to fight for what his supporters believed in.”
What’s happened? Obama fired his air traffic controllers.
In Washington, for the first time in his presidency, Obama is feared.
Let me explain. A president doesn’t define his political era merely by getting elected. Dwight Eisenhower got elected twice, but never challenged the welfare state built by the Franklin Roosevelt. Bill Clinton got elected twice too, but never successfully challenged the dismantling of the welfare state undertaken by Ronald Reagan. A president defines his age by changing the rules of the game, altering the conventional wisdom about what is politically possible.
In that sense, Ronald Reagan was our last era-defining president. But the Age of Reagan didn’t begin when he took the oath of office. Initially, many observers suspected that the Gipper would have to sharply curtail his right-wing ambitions in order to politically survive. At the 1980 convention, Reagan had almost made Gerald Ford his running mate, thus giving the moderate ex-president (and Henry Kissinger, who would have become secretary of State as part of the deal) veto power over his agenda. Reagan ended up winning without Ford’s help, but he didn’t even crack 51 percent of the vote, and Democrats retained their four-decade-old majority in the House.
The Age of Reagan only really began seven months into his presidency, when he fired the air traffic controllers. By law, the controllers weren’t allowed to strike. But they had legitimate complaints, and most observers assumed that the Reagan administration would negotiate a compromise, which was what most former presidents had done in high-profile labor disputes. A delegation of former Republican secretaries of Labor even offered to mediate. Reagan, however, didn’t want to help labor and management reach a deal. He wanted to send a message that 45 years after FDR’s Wagner Act, which had made labor unions a powerful force in American life, labor was about to be crushed. He gave the striking air traffic controllers 48 hours to return to work; then fired the lot of them. America’s air traffic control system didn’t fully recover until 1988, but Reagan was suddenly feared, not only at home, but abroad. The rules of the political game had changed. When House Speaker Tip O’Neill visited Moscow a year later, the thing that Soviet leaders wanted to talk about most was Reagan’s handling of the air traffic controllers’ strike.
With the passage of health care, Obama has now had his air-traffic controllers’ moment. When Scott Brown won in Massachusetts, it convinced many political observers that the old rules still applied. The country was still basically suspicious of big government, and thus, the only way for a Democratic president to survive was to do what Bill Clinton did after 1994: content himself with incremental change, accept the political parameters that Reagan established, be a Democratic Eisenhower.
When Obama decided to push for comprehensive reform anyway, he signaled that he would not play that role. And when he and the Democrats won, they blew up the old political order. In Washington, for the first time in his presidency, Obama is feared. Suddenly, Democrats are not so terrified about the midterm elections. Influential conservatives like David Frum are scolding their party’s leaders for not cutting a bipartisan deal. The Russians have backed down and signed an arms-control pact that doesn’t scrap missile defense in Eastern Europe. As Helene Cooper of The New York Times recently put it, “there is a swagger emanating from the White House that suggests he may now have acquired a liking for the benefits of sticking his neck out to lead.”
Will Obama become hugely popular anytime soon? Probably not. Reagan and the GOP still got clobbered in the 1982 midterm elections, largely because the country was in deep recession. And Obama and the Democrats will probably suffer this fall as well. But if the economy recovers in 2011 and 2012, and Obama rides that recovery to reelection, as Reagan did in 1984, he will be able to say he changed the rules of the political game, and won a mandate from the country. Then we’ll know for sure what more and more people already suspect: The Age of Reagan is over. Welcome to the Age of Obama.
Peter Beinart, senior political writer for The Daily Beast, is associate professor of journalism and political science at City University of New York and a senior fellow at the New America Foundation. His new book, The Icarus Syndrome: A History of American Hubris, will be published by HarperCollins in June. Follow him on Twitter and Facebook.
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From The Sunday London Times
Obama tears up Israel’s carte blanche
It used to be above US reproach, but Tel Aviv is now in the firing line
Andrew Sullivan

‘Let me know if there is anything new,” was Barack Obama’s final, somewhat contemptuous, instruction to Binyamin Netanyahu, the Israeli prime minister, whom he left in a room at the White House and subsequently stiffed for dinner. Those who believe that Obama is incapable of anger are, it appears, being proven wrong. Buoyed by his healthcare victory, and still smarting from Netanyahu’s previous refusal last year to co-operate over the building of new homes for Jewish settlers in occupied east Jerusalem, the president simply refused to listen to the latest excuses, arguments and prevarications.
There’s now a widening irritation in Washington over Netanyahu’s refusal to accept that Israeli intransigence over settlements is badly hurting America’s interests around the world. This is a real change. To suggest that any conflict exists between Israel’s interests and America’s has been a virtual taboo in Washington for as long as I’ve lived here. Since the end of the cold war, the battle against jihadist terrorism had seemed to place Israel firmly in the camp of those on America’s side.
With Obama’s election and his attempt to target Al-Qaeda more precisely in Pakistan and Yemen, to withdraw from Iraq, to win over the Muslim middle and to defang the Islamist extremes, Israel’s role as an ally has become muddied. How do you trust an ally that steals British citizens’ identities for an assassination? How can the United States make overtures to moderate Arab regimes concerning, say, Iran if the Israelis keep poking the Arab world in the eye over settlements?
More to the point, General David Petraeus, head of US Central Command, agrees with Obama. His recent report to the Senate armed services committee is striking because it contains the kind of truth that official Washington prefers never to utter: “The enduring hostilities between Israel and some of its neighbours present distinct challenges to our ability to advance our interests ... IsraeliPalestinian tensions often flare into violence and large-scale armed confrontations. The conflict foments anti-American sentiment, [because of] a perception of US favouritism for Israel. Arab anger over the Palestinian question limits the strength and depth of US partnerships with governments and peoples in the [region] and weakens the legitimacy of moderate regimes in the Arab world. Meanwhile, Al-Qaeda and other militant groups exploit that anger to mobilise support. The conflict also gives Iran influence in the Arab world through its clients, Lebanese Hezbollah and Hamas.”
This is all indisputably true, which is why it is in America’s interest to resolve the matter. It is also in America’s interest to show the world that there is indeed daylight between Obama and those who want Israel to retain all of Jerusalem for ever — which would mean no two-state solution could ever work. Netanyahu blames his right-wing coalition parties. But on the day that the US vice-president arrived in Israel for his recent visit, Netanyahu welcomed 1,000 pro-settlement American evangelicals to Jerusalem, which he called “the undivided, eternal capital of the Jewish people”.
In America, Israel is still popular as the second real democracy in the Middle East (if we’re now counting Iraq); in the most recent Gallup poll, support for Israel was at a near-record high of 63%. But beneath that number are signs of real change. More and more Republicans back Israel (85%) yet fewer and fewer Democrats do (48%) — a record 37-point gap. Moreover, younger generations and Democrats tend to think more positively of all foreign countries than do older Americans and Republicans. The only exception to that rule is now Israel.
More worrying, the Republican embrace of Israel is fuelled in large part by the evangelical base, many of whom see the influx of Jews into the West Bank as a prerequisite for the doomsday scenario of End Times. If you want to hear what evangelical America thinks, ask Sarah Palin. “I believe that the Jewish settlements should be allowed to be expanded upon, because that population of Israel is going to grow,” she said. “More and more Jewish people will be flocking to Israel in the days and weeks and months ahead. And I don’t think that the Obama administration has any right to tell Israel that the Jewish settlements cannot expand.”
Palin wore two entwined flags on her lapel when addressing the Tea Party convention last month: American and Israeli. For her and many other Republicans, America and Israel face the same enemy and are defined by the same JudaeoChristian heritage.
As Republicans have embraced Israel more firmly for religious reasons, many Democrats have begun to question the once unquestionable. There is now a real rival to the arch-conservative American Israel Public Affairs Committee, and it’s called J Street. It’s more reflective of the next generation of Jewish Democrats, who want a two-state solution and don’t just pretend to want one. The blogosphere has also opened up debate on the question — especially in the wake of the Gaza war — in a way that simply wouldn’t have been possible in the past.
The Washington Post’s editorial board remains Netanyahu’s primary channel in the Capitol, but its voice is much less authoritative than it once was, and the rigidly pro-Israel Weekly Standard and New Republic are now balanced by the many bloggers, with large readerships, who openly lacerate Israel’s intransigence. The critics have been called “self-hating Jews” if they are Jewish, or anti-Semites if they are not, but these barbs — once sufficient to end someone’s career — have failed to have an effect this time.
So who will blink first? Netanyahu can tolerate only a certain amount of international isolation, especially if he wants real American support on Iran. And, in truth, very few of either party support expansion of settlements on the West Bank or in the part of Jerusalem that would be a future Palestinian capital. If Obama were to propose a detailed American two-state solution, he could move the ball forward. In many ways he already has. Simply by challenging Netanyahu so publicly, he has made the Cairo speech he delivered last June seem less of a mirage.
Remember healthcare. The key thing to understand about Obama is his persistence. And the key thing Netanyahu needs to be reminded of is: Obama has a gift for getting his enemies to destroy themselves.
andrewsullivan.com

NY TIMES
Russia to Alter System of Penal Colonies

By ANDREW E. KRAMER
VLADIMIR, Russia — In Russian prisons, the inmates are divided into barracks housing a hundred or so men without regard to the severity of their crimes. At night, a guard locks the door and walks away, leaving first-time offenders and people convicted of nonviolent crimes to fend for themselves in a crowd of gang members, hit men and other career criminals.
Beginning this year, however, first-time offenders may no longer have to live in fear. In the first major effort to upgrade a prison system that has changed little since Stalin established it more than 70 years ago, career criminals will be separated from the general prison population and housed in new prisons with cellblocks, rather than barracks.
President Dmitri A. Medvedev, a lawyer by training who has championed an overhaul of the justice system, is pushing the measure to first break up the culture of barracks life and then to do away with common inmate housing almost entirely.
Common barracks are unusual outside the former Soviet Union and parts of Africa, according to a London-based advocacy group, Penal Reform International. Western European and American correctional institutions typically rely on large cellblocks, with a few inmates to a cell.
Yet the vast majority of Russian prisoners — 724,000 out of a total prison population of 862,000 — still live in freestanding barracks, rough-hewn, low-slung buildings of wood or brick encircled by barbed wire, usually in a remote place. Low-cost and high-volume, they are modest upgrades of the camps of the 1930s to 1950s and hold the second largest per capita inmate population in the world, trailing only the United States.
The overhaul calls for a three-stage unwinding of the barracks housing system and the abolition of all 755 penal colonies, what remains of Stalin’s gulag, by 2020.
Under the plan, some sites will be renamed “settlement colonies,” a sort of minimum security prison. Hardened prisoners will be moved to cellblocks, though only just over 2,700 inmates live in cells in Russia today.
In the first stage, recidivists will be put in separate colonies apart from the general prison population. So far, officials have relocated 64,000 of 149,000 prisoners scheduled for transfer.
By 2016, prison officials say, they intend to separate the most violent first-time offenders from petty criminals, and by 2020 move them and the recidivists into new prisons with cellblocks. After that, the category of “correctional colony” would cease to exist in the Russian penal system.
Human rights groups praised the new approach, but given Russia’s recent track record on rights, they said they doubted whether it would be fully carried out. “Russian prisons are widely acknowledged to be troubled institutions with poor conditions, torture and ill treatment,” said Allison Gill, director of Human Rights Watch in Russia.
The effort represents a departure from a long tradition of Russian corrections philosophy. Correctional officers had openly — and legally until this January — used the coarse social groupings that arose in the barracks to help run the colonies.
“Packed into these common spaces at night, inmates confronted a Hobbesian nightmare that was resolved through a crude, four-level hierarchy,” said Lyudmila I. Alpern, deputy director of the Center for Criminal Justice Reform, a Moscow rights group. “This is how a male tribe lives, and it cannot be any other way.”
Kirill A. Kharnuzhin, a boyish 37-year-old inmate serving 10 years for growing marijuana in his Moscow apartment, said that when he arrived in his camp he was forced to contend with a violent career criminal, a former professional boxer, who would spring from his bunk at night to pummel other inmates.
The beatings ranged from the alarming — wool blankets flying and men cursing — to the disturbing, he said, like the time the boxer attacked a Roma man and knocked out several of his teeth.
After the beating, the Roma man took to sleeping under a bottom bunk. But cowering there was a sign he had accepted placement in the lowest of the four broad categories of prisoners, “the degraded.”
The degraded do menial chores, like cleaning bathrooms, and are sexually abused, Mr. Kharnuzhin said. Men convicted of child molesting and former policemen automatically tumble into this caste, but most other inmates obviously try to avoid it.
The boxer, a repeat offender and a member of an ethnic Georgian criminal gang, belonged to the group at the top of the hierarchy, the “thieves in law” also known as “authorities.”
Inmates known as “activists,” who worked with the corrections officers to enforce order, made up a second privileged class. They were organized into formal Discipline and Order Squads, until those were disbanded in January. Not surprisingly, the squad members were widely hated and subject to violent revenge attacks, either within the prison system or later on the outside.
The rest fell into a broad category known simply as “the men,” acquiescing to the criminal “authorities,” refraining from cooperation with the guards and avoiding the abuse of the degraded. A system of rituals kept the hierarchy intact. Men, for example, never shared silverware with the degraded. “It’s like the caste system in India,” Mr. Kharnuzhin said, with a shrug.
Until the changes, all groups lived packed in the same barracks. And though rights groups say murders are common, the Russian prison service provides no data on violent death.
The overall mortality rate of 464 deaths from all causes per 100,000 inmates in Russian prison colonies, though, is well above the 251 deaths per 100,000 inmates in state prisons in the United States, the institutions where the vast majority of American convicts do time.
Aleksandr N. Khramov, a lanky 22-year-old convicted murderer, wore the red armband of an activist as he kept watch in a barracks corridor. Mr. Khramov said he chose to become an activist while still on the train to the colony, after a fellow inmate advised him that it was the best tactic for survival or early release.
The ranks of the activists were greatly increased over the past decade under a strategy to regain control of the barracks from gangs headed by the so-called authorities, said Valery V. Borshov, a former member of Parliament who oversaw a committee on prison reform. Reinforcing the Discipline and Order Squads, he said, harked back to the Soviet-era technique for barracks management.
“It was reminiscent of the kapo in the fascist camps,” Mr. Borshov said of empowering some prisoners to act as guards. The activists would do things like beat confessions out of prisoners, an activity that was tantamount, he said, to outsourcing abuses of human rights. “It’s a very dangerous system, and it was only abolished in Russia this year.”
Aleksei V. Chudin, the deputy warden at Mr. Khramov’s colony, and a lifelong guard in the gulag, said he saw the wisdom in the new policy to limit barracks violence. But he said the hierarchies created by male criminals in prison would never go away. Breaking up barracks of a hundred inmates into cells with four men, he said, will just create more of them.

The Sunday London Times
Win on health and Barack Obama wins around the world
Securing reform at home will help the president in Afghanistan and the Middle East
Andrew Sullivan
Obama making his argument for healthcare reform last week; he knows it is crucial to his future
Andrew Sullivan In Barack Obama’s agonising, year-long effort to pass universal health insurance, the latest bump in the road may seem trivial, and the president must surely hope the Indonesians don’t take it personally. At the last minute, he cancelled his trip to the place he grew up in. The visit was actually of great personal importance to him and a critical part of his message that America and a moderate Islam can and will get along.
But he also knows that his clout abroad depends on his success at home. The linkage matters. There is a connection between healthcare reform and the war on terror, and between relations with China and the entire Obama narrative. His opponents know this, which is why one Senate Republican said he wanted to make healthcare Obama’s Waterloo. If they could defeat him there, they could defeat him elsewhere: on Guantanamo, on financial regulation, on Israel, on withdrawal from Iraq and on torture.
Until Christmas the narrative had gone largely his way: his first year saw a huge stimulus package passed, a bank bailout succeed, military strategy in Afghanistan transformed, a car industry restructured, big investments in green energy, an unwinding of the legacy of George W Bush and Dick Cheney in foreign affairs. It was not without struggle or failure: Guantanamo remained open, Iraq stayed unstable, recovery was slow and health reform kept slipping from his grasp. But the narrative was his.
That changed in January with the freak Massachusetts Senate byelection. That stray event gave his opponents a jolt of energy, affirmed the Republicans’ strategy of total opposition and prompted the first real wobble in the chattering classes about the man who had walked on water but was suddenly up to his neck in it. The conventional wisdom — he should have gone right instead of left; he’s weak when he should be strong; he should have done financial reform before healthcare ... well, you’ve heard it all before. The truth is: he was losing the narrative.
This is not unnoticed in foreign capitals. A presidency failing at home only undermines Obama abroad. Dmitry Medvedev knows this as he negotiates with Washington over Iran; Binyamin Netanyahu knows this as he stays on the phone with Washington’s neoconservatives, who are promising that if he holds on they can destroy Obama for him; Ayatollah Khamenei and Mahmoud Ahmadinejad know this as they assess whether they can outlast this frustrating leader of the Great Satan; the Saudis know this; China knows this. A new president always has a steep learning curve in foreign affairs, especially when confronting massive problems at home, and so most seasoned allies and enemies take their time to make assessments. But the most powerful assessment comes from home.
Healthcare matters because Obama’s entire presidency matters. That’s been the White House message to nervous Democrats in Congress under acute pressure from the right. And in this gruelling grind, there is some evidence that Obama is actually slowly winning.
Polls show the public believes Obama is more open to compromise than the Republicans, and the direction of the polling on healthcare in turn has shifted in the past two months. The bill is still — in most polls — more unpopular than popular. But only just. The trend in all of them since January has been declining opposition and rising support.
Liberals who didn’t like the bill because it was too centrist realised Obama was their best bet in decades and came home. The Republican opposition got so shrill it began to alienate moderates. The crucial Congressional Budget Office fiscal assessment came in with a lower price tag than expected. Some Catholic groups — the Catholic Health Association and an eloquent lobby of nuns — rebuked the hierarchy and declared the bill acceptably pro-life. The bill is still on a knife-edge, but the odds in favour of health reform kept going up last week. Watching the various whip counts going back and forth reminded me of the agonising, delegate-counting path to primary victory that Obama took. It works your last nerve. It’s like England in extra time at the World Cup.
Imagine the narrative shift if this bill is passed. Obama will not have imposed this monstrosity on the country from on high; he will have ground it through the bloggers, and the pundits will declare a resurrection. The narrative will be about his persistence and his grit, rather than his near-divinity and his authority. And suddenly it will appear — lo! — as if this lone figure has not just rescued the US economy from the abyss, but also passed the biggest piece of social legislation in decades.
There is only one story better than Icarus falling to earth; and it’s Icarus getting back up and putting on some shades. The media will fall for it. The public will merely notice that the guy can come back and fight. Even when they don’t always agree with such a figure on the issues, they can admire him.
Again, the real parallel is Ronald Reagan. People forget how unpopular Reagan was at the same point in his presidency — and passing a big tax cut was legislatively a lot easier than reforming a health sector the size of the British economy. But like Obama he persisted and, with luck and learning, aimed very high.
Obama has bet that this is his destiny. He is extremely cautious from day to day, staggeringly flexible on tactics, but not at all modest when you look at the big picture. He still wants to rebuild the American economy from the ground up, re-regulate Wall Street, withdraw from Iraq, win in Afghanistan, get universal health insurance and achieve a two-state solution in Israel/Palestine in his first term. That’s all. And although you can see many small failures on the way, and agonising slowness as well, you can also see he hasn’t dropped his determination to achieve it all.
This is what we’ve learnt this year: Obama does not mind defeats if they are procedural or about others saving face. He’s happy to admit error; to give his opponents a chance to lunge at his jugular; to let opponents enjoy a day in the sun; to shave off any small stuff as long as the big stuff remains. He seems oddly impervious to personal insult: he doesn’t mind being affronted by the Chinese or humiliated by Netanyahu as long as it’s a matter of symbolism. On substance, he wants what he wants; and, on the big stuff, he has given up on nothing yet.
And so we dig in, with the sole relief of knowing that Obama seems as serenely confident as ever. This fight is real and bloody and gruelling. But if he succeeds — from healthcare to Israel to Wall Street — he will bring real change, at home and abroad. And abroad because of at home.

Yes, Indonesia can wait.

andrewsullivan.com

Israel Feeling Rising Anger From the U.S.

By MARK LANDLER and ETHAN BRONNER
WASHINGTON — An ill-timed municipal housing announcement in Jerusalem has mutated into one of the most serious conflicts between the United States and Israel in two decades, leaving a politically embarrassed Israeli government scrambling to respond to a tough list of demands by the Obama administration.
The Obama administration has put Prime Minister Benjamin Netanyahu in a difficult political spot at home by insisting that the Israeli government halt a plan to build housing units in East Jerusalem. The administration also wants Mr. Netanyahu to commit to substantive negotiations with the Palestinians, after more than a year in which the peace process has been moribund.
With the administration’s special envoy, George J. Mitchell, suddenly delaying his planned trip to Israel, the administration was expecting a call from Mr. Netanyahu, after a tense exchange last week with Secretary of State Hillary Rodham Clinton.
On Monday, however, Mr. Netanyahu sounded a defiant note, telling the Israeli Parliament that construction of Jewish housing in Jerusalem was not a matter for negotiation.
He is struggling to balance an increasingly unhappy ally in Washington with the restive right wing of his coalition government.
The prospects for peace in the Middle East seemed murkier than ever, as a year’s worth of frustration on the part of President Obama and his aides seemed to boil over in its furious response to the housing announcement, which spoiled a visit to Israel by Vice President Joseph R. Biden Jr.
“What happened to the vice president in Israel was unprecedented,” said a senior administration official, who spoke on the condition of anonymity. “Where it goes from here depends on the Israelis.”
But the diplomatic standoff also has repercussions for the Obama administration. Its blunt criticism of Israel — delivered publicly by Mrs. Clinton in two television interviews on Friday and reiterated Sunday by Mr. Obama’s political adviser, David Axelrod — has set off a storm in Washington, with pro-Israel groups and several prominent lawmakers criticizing the administration for unfairly singling out a staunch American ally.
“Let’s cut the family fighting,” said Senator Joseph I. Lieberman, independent of Connecticut. “It’s unnecessary; it’s destructive of our shared national interest. It’s time to lower voices, to get over the family feud between the U.S. and Israel. It just doesn’t serve anybody’s interests but our enemies’.”
Relations between Israel and the United States have been uneasy ever since Mr. Obama took office with a plan to rekindle the peace process by coupling a demand for a full freeze in Jewish settlement construction with reciprocal confidence-building gestures by Arab countries.
Neither happened, and Mr. Obama, who is not as popular in Israel as he is elsewhere around the world, was forced last September to make do with Mr. Netanyahu’s offer of a 10-month partial moratorium on settlements in the West Bank. But the president was outraged by the announcement of 1,600 housing units in an ultra-Orthodox neighborhood in East Jerusalem during Mr. Biden’s visit, administration officials said.
Mr. Obama was deeply involved in the strategy and planning for Mr. Biden’s visit and orchestrated the response from Mr. Biden and Mrs. Clinton after it went awry, these officials said.
The administration has used language intended to telegraph anger, defining the dispute not only in terms of the damage it could cause to the peace process but to the American relationship with Israel.
“That is a whole different order of magnitude of importance,” said Daniel Levy, a former peace negotiator who is senior fellow and head of the Middle East Initiative at the New America Foundation, a research group.
The last time relations between the United States and Israel became this strained, analysts said, was when James A. Baker, then secretary of state, clashed with the Israeli government in the early 1990s, also over settlement policy. The United States ended up withholding loan guarantees from Israel for a time.
Mr. Netanyahu said the announcement of the housing development had surprised even him, and he apologized for its timing. But Mr. Obama feels that Mr. Netanyahu should have been in clearer control of the construction process and that he should have done what was needed to stop it, according to officials in Jerusalem and Washington.
There is a feeling among officials in Washington that the Netanyahu government does not fully grasp how angry Obama officials have grown. But there are signs that it is sinking in.
The Israeli ambassador in Washington, Michael B. Oren, used the word “crisis” about his country’s relations with Washington for the first time since taking up his job last year, in a telephone briefing to colleagues over the weekend, according to an Israeli official.
Still, American and Israeli officials also made clear that the core security issues binding the two countries were not in jeopardy, and that what was happening was closer to a married couple having a bad fight rather than seeking a divorce.
In the murky vocabulary of diplomacy, the scheduled talks due to start under American supervision are viewed by the Israelis mostly as “proximity” discussions, in other words procedural talks rather than substantive negotiations. But the Palestinians want the discussions to be as substantive as possible, an approach Mrs. Clinton demanded in her call to Mr. Netanyahu on Friday.
The Israeli leader has said he is open to direct negotiations with the Palestinians. But the chief Palestinian negotiator, Saeb Erekat, said in an interview in his Ramallah office that the Palestinians and Israelis had exhausted direct negotiations and that it was time for America to take a more direct role. “We have a trust level below zero between the two sides,” he said.
The settlement episode has enabled the administration to turn the tables on Mr. Netanyahu, some analysts say. But the question is whether it will be able to extract more concessions from him now.
“The heart of the matter is whether the proximity talks are going to be productive, in the sense of opening a corridor to direct negotiations that will lead to a peace agreement,” said Martin Indyk, a former American ambassador to Israel.
The timing of the dispute could not be more awkward for the administration, coming a week before the American Israel Public Affairs Committee, the most influential pro-Israel lobbying group, meets in Washington. Mr. Netanyahu and Mrs. Clinton are both scheduled to speak to the group, which has condemned the White House’s tough stance.
Mr. Biden may meet with Mr. Netanyahu while he is here, officials said. But there is no meeting planned between Mr. Obama and Mr. Netanyahu because the president will be traveling in Indonesia and Australia, a conflict which one official joked suits the administration well right now. “This may not be the best time for a face-to-face,” he said.
Mark Landler reported from Washington, and Ethan Bronner from Jerusalem. Helene Cooper contributed reporting from Washington

Why don't honest journalists take on Roger Ailes and Fox News?
By Howell Raines
One question has tugged at my professional conscience throughout the year-long congressional debate over health-care reform, and it has nothing to do with the public option, portability or medical malpractice. It is this: Why haven't America's old-school news organizations blown the whistle on Roger Ailes, chief of Fox News, for using the network to conduct a propaganda campaign against the Obama administration -- a campaign without precedent in our modern political history?
Through clever use of the Fox News Channel and its cadre of raucous commentators, Ailes has overturned standards of fairness and objectivity that have guided American print and broadcast journalists since World War II. Yet, many members of my profession seem to stand by in silence as Ailes tears up the rulebook that served this country well as we covered the major stories of the past three generations, from the civil rights revolution to Watergate to the Wall Street scandals. This is not a liberal-versus-conservative issue. It is a matter of Fox turning reality on its head with, among other tactics, its endless repetition of its uber-lie: "The American people do not want health-care reform."
Fox repeats this as gospel. But as a matter of historical context, usually in short supply on Fox News, this assertion ranks somewhere between debatable and untrue.
The American people and most of our great modern presidents have been demanding major reforms to the health-care system since the administration of Teddy Roosevelt. The elections of 1948, 1960, 1964, 2000 and 2008 confirm the point, with majorities voting for candidates supporting such change. Yet congressional Republicans have managed effective campaigns against health-care changes favored variously by Presidents Truman, Kennedy, Johnson, Nixon and Clinton. Now Fox News has given the party of Lincoln a free ride with its repetition of the unexamined claim that today's Republican leadership really does want to overhaul health care -- if only the effort could conform to Mitch McConnell's ideas on portability and tort reform.
It is true that, after 14 months of Fox's relentless pounding of President Obama's idea of sweeping reform, the latest Gallup poll shows opinion running 48 to 45 percent against the current legislation. Fox invariably stresses such recent dips in support for the legislation, disregarding the majorities in favor of various individual aspects of the reform effort. Along the way, the network has sold a falsified image of the professional standards that developed in American newsrooms and university journalism departments in the last half of the 20th century.
Whatever its shortcomings, journalism under those standards aspired to produce an honest account of social, economic and political events. It bore witness to a world of dynamic change, as opposed to the world of Foxian reality, whose actors are brought on camera to illustrate a preconceived universe as rigid as that of medieval morality. Now, it is precisely our long-held norms that cripple our ability to confront Fox's journalism of perpetual assault. I'm confident that many old-schoolers are too principled to appear on the network, choosing silence over being used; when Fox does trot out a house liberal as a punching bag, the result is a parody of reasoned news formats.
My great fear, however, is that some journalists of my generation who once prided themselves on blowing whistles and afflicting the comfortable have also been intimidated by Fox's financial power and expanding audience, as well as Ailes's proven willingness to dismantle the reputation of anyone who crosses him. (Remember his ridiculing of one early anchor, Paula Zahn, as being inferior to a "dead raccoon" in ratings potential when she dared defect to CNN?) It's as if we have surrendered the sword of verifiable reportage and bought the idea that only "elites" are interested in information free of partisan poppycock.
Why has our profession, through its general silence -- or only spasmodic protest -- helped Fox legitimize a style of journalism that is dishonest in its intellectual process, untrustworthy in its conclusions and biased in its gestalt? The standard answer is economics, as represented by the collapse of print newspapers and of audience share at CBS, NBC and ABC. Some prominent print journalists are now cheering Rupert Murdoch, the head of News Corp. (which owns the Fox network) for his alleged commitment to print, as evidenced by his willingness to lose money on the New York Post and gamble the overall profitability of his company on the survival of the Wall Street Journal. This is like congratulating museums for preserving antique masterpieces while ignoring their predatory methods of collecting.
Why can't American journalists steeped in the traditional values of their profession be loud and candid about the fact that Murdoch does not belong to our team? His importation of the loose rules of British tabloid journalism, including blatant political alliances, started our slide to quasi-news. His British papers famously promoted Margaret Thatcher's political career, with the expectation that she would open the nation's airwaves to Murdoch's cable channels. Ed Koch once told me he could not have been elected mayor of New York without the boosterism of the New York Post.
As for Fox's campaign against the Obama administration, perhaps the only traditional network star to put Ailes on the spot, at least a little, has been his friend, the venerable Barbara Walters, who was hosting ABC's Sunday morning talk show. More accurately, she allowed another guest, Arianna Huffington, to belabor Ailes recently about his biased coverage of Obama. Ailes countered that he should be judged as a producer of ratings rather than a journalist -- audience is his only yardstick. While true as far as it goes, this hair-splitting defense purports to absolve Ailes of responsibility for creating a news department whose raison d'etre is to dictate the outcome of our nation's political discourse.
For the first time since the yellow journalism of a century ago, the United States has a major news organization devoted to the promotion of one political party. And let no one be misled by occasional spurts of criticism of the GOP on Fox. In a bygone era of fact-based commentary typified, left to right, by my late colleagues Scotty Reston and Bill Safire, these deceptions would have been given their proper label: disinformation.
Under the pretense of correcting a Democratic bias in news reporting, Fox has accomplished something that seemed impossible before Ailes imported to the news studio the tricks he learned in Richard Nixon's campaign think tank: He and his video ferrets have intimidated center-right and center-left journalists into suppressing conclusions -- whether on health-care reform or other issues -- they once would have stated as demonstrably proven by their reporting. I try not to believe that this kid-gloves handling amounts to self-censorship, but it's hard to ignore the evidence. News Corp., with 64,000 employees worldwide, receives the tender treatment accorded a future employer.
In defending Glenn Beck on ABC, Ailes described him as something like Fox's political id, rather than its whole personality. It is somehow fitting, then, that Sigmund Freud's great-grandson, Matthew Freud, might help put mainstream American journalism back in touch with its collective superego.
This year, Freud, a public relations executive in London and Murdoch's son-in-law, condemned Ailes in an interview with the New York Times, saying he was "ashamed and sickened by Roger Ailes's horrendous and sustained disregard" of proper journalistic standards. Meanwhile, Gabriel Sherman, writing in New York magazine, suggests that Freud and other Murdoch relatives think Ailes has outlived his usefulness -- despite the fact that Fox, with its $700 million annual profit, finances News Corp.'s ability to keep its troubled newspapers and their skeleton staffs on life support. I know some observers of journalistic economics who believe that such insider comments mean Rupert already has Roger on the skids.
It is true that any executive's tenure in the House of Murdoch is situational. But grieve not for Roger Ailes. His new contract signals that when the winds of televised demagoguery abate, he will waft down on a golden parachute. By News Corp. standards, he deserves it. After all, Ailes helped make Murdoch the most powerful media executive in the United States.
As for Fox News, lots of people who know better are keeping quiet about what to call it. Its news operation can, in fact, be called many things, but reporters of my generation, with memories and keyboards, dare not call it journalism.
Howell Raines is a former executive editor of the New York Times and the author of "The One That Got Away: A Memoir."
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