Fan mail from some flounder: Putting a Times quote in context

Earlier today I received the following email from an admirer:

You are a disgusting pig. I pray to God that you get brain cancer."

This was noteworthy on several levels. First, I don't even know the person who sent this. Typically, I need to know someone for a while before they reach that kind of conclusion. Second, the recent economic shocks have not, as one might have hoped, sent a message to America that we are all in this together and it is time for a new civility in public discourse. Third, for sure I will never use my cell phone again without a hands free device.

My fan was responding to a quotation attributed to me that appeared in the New York Times. The article, by the dependably insightful Helene Cooper, was entitled "A Test for Obama's View of a One-Term Presidency." It was an otherwise excellent piece which addressed Obama's stated desire to be a good one-term president rather than a mediocre two-term president. Its point was that the current challenges faced by the United States may force him to choose between these two options because of the fearsome demands running for re-election is likely to make on his time and thus his ability to effectively lead the country through and out of the current, enduring, complex economic crisis.

Personally, as I have stated before, even the president's most ardent supporters have to acknowledge the realities of a modern presidential campaign: He must work tirelessly to raise perhaps $1 billion and then spend essentially a year fending off attacks and implementing a complex, demanding strategy likely to be so taxing that it will be very, very difficult for him. Oh yeah and he also needs to give the rescue of the U.S. economy the attention it warrants. I'm a supporter of the president and I think he is a considerably better choice to hold the office than anyone who is a declared Republican candidate for president or who has been mentioned as a potential such candidate. In some extreme cases, the Republican candidates would have me shopping for real estate in New Zealand.

That said, the Times article due to the limits of space involved truncated one of my views in a way that I believe triggered the brain cancer greeting I received this morning. The story said:

Mr. Obama, Mr. Rothkopf argues, has to focus in the next 18 months on getting the economy back on track for the long haul, even if that means pushing for politically unpalatable budget cuts, including real - but hugely unpopular - reductions in Social Security, other entitlement programs and the military."

While everything in this statement is true with respect to my views, it is distorted because it refers to only part of what I said when I was interviewed. The question posed to me was, to paraphrase, "How does the president get a meaningful deal done and what would the deal look like?"

My response was that in order to address our twin crises--- unemployment and the deficit -- he would have to seek to produce significant, job-creating stimulus and in exchange for that, which will be resisted by the Republicans, do a serious budget deal. That serious deal in turn would have to involve painful concessions on entitlements by the president and the Democrats in order to win Republican concessions on increasing revenues and producing meaningful defense cuts. While such an approach sounds implausible, it is also the only way for America to get back on our feet.

Reasonable observers -- and even angry, frustrated, hurlers of invective at strangers -- will have to admit that regarding all the elements of such a grand bargain there are ways to approach the problem that could appeal to both sides, to reason and stay within the rules of arithmetic (the real kind you learned in elementary school, not the Washington variety). So, for example, you could produce a stimulus that made sense to fiscal conservatives by embracing and building up ideas like an infrastructure bank that would use limited federal funds leveraged up by major private investment to provide the urgently need renovation America's transportation and IT networks require. It's an idea that is supported by both the AFL-CIO and the U.S. Chamber of Commerce, and by Sens. John Kerry and Kay Bailey Hutchison. You could also move investment spending onto a capital budget thus forcing the Congress to treat money that is likely to bring a return differently from that which is going straight out the window … as companies already do.

On the budget deal, any superficial consideration of our debt problems has to acknowledge that the current structure of our entitlement programs is unsustainable. Further, proposals like raising the retirement age or reducing benefits for rich people who don't need them or creating more competition and fairer pricing, make sense in any case. Personally, just so you know where I am coming from, I believe the only way we will get there is some kind of new, national single-payer plan that encourages competition … see, for example, how they handle this in Switzerland. But since that's not going to happen soon, we should consider some of these other basic steps. And one reason we need to is in order to pry loose more revenue. We're going to have to accept a value-added tax (VAT) and/or a carbon tax very soon. We can trade some of those revenues for tax reform that the Republicans want, especially for a corporate tax code simplification that will help attract needed foreign investment to the United States. Should the Bush tax cuts be allowed to expire? Of course. Urgently. It was a mistake to extend them. It was a mistake to implement them in the first place. And America needs to get over the idea that we need to spend more than every other country in the world on defense added up in order to be secure. Want a place to start there? Let's get the heck out of Afghanistan and Iraq ASAP.

The point is, my quote in the Times offered only a shard of my views, and one that might understandably offend when taken out of context. That said, when put into context, I am sure there is something in my views to offend everyone. Going forward we need to look for that. If everyone is howling, then we are probably doing something right.

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The List

From Bad to Worse

It's not just a double-dip recession we should be worried about. Here are ten ways the world could get a whole lot scarier ... and why Barack Obama shouldn't run in 2012.

It is hard to deny. Things are looking bleak. But are they as bad as they could get?

The answer, of course, is no.

Here are 10 things that could happen between now and the end of next year that could make things much worse and why President Obama should consider not running for reelection.

Europe's debt crisis could deepen
The European Central Bank's interventions to prop up Spain and Italy could prove inadequate. EU leaders will continue to avoid real structural reform. European banks, now showing a reluctance to lend (akin to their mood immediately after the collapse of Lehman Brothers) could themselves teeter, burdened by the prospects of sovereign debt defaults and a global slow down. Spain and Italy could take a turn for the worse. The rest of the world, preoccupied with their own problems, might be as distracted as are the northern Europeans frustrated with bailing out their feckless southern neighbors.


Tensions tighten
Europe's economic problems could beget deepening social tensions. Unrest like that seen in the United Kingdom could become more commonplace. With jobs drying up, anti-immigrant violence could grow. Nationalism could feed off these tensions and fuel more steps like Denmark's move away from the EU's commitment to open borders among its states.

LEON NEAL/AFP/Getty Images

U.S. recession regression
The United States could officially enter recession. Reduced tax revenues will be one painful consequence of the slow down. Politicians will struggle to reduce debt but find it hard to do so in the near term. The problem will burgeon. Small- and medium-sized communities will default. Several large cities and perhaps one or two significant states will be at risk of being unable to pay their bills. Draconian cutbacks in police and social services will blend with high unemployment and growing inequality to produce social unrest in the United States. Stock markets will continue their slide.

Mario Tama/Getty Images

Global contagion
We could enter a global recession. Downturns in the United States and the European Union could feed off of one another and the fragile Japanese economy would almost certainly sink as a result. Credit tightness and political indecisiveness will deepen the gloom.


Inflation hits the BRICs
While emerging markets like China and Brazil might see inflation worries ebb due to the global recession and falling demand for high-priced commodities ... they might not. Their currencies could strengthen as established ones falter, making exports more costly at just the wrong moment. Secular growth in demand for commodities may slow declines somewhat reducing the "benefits" of declining demand. Alternatively, or additionally, real estate and financial bubbles might burst in each of these countries as investor doubts grow. Note that Brazil took a particular beating during the recent downward market spike.


Middle East meltdown
Tensions in the Middle East could grow. Palestine's push for statehood might be followed by massive displays of civic unrest. An Israeli government burdened with economic problems of its own and a little arthritic when it comes to its willingness to show flexibility with its near-neighbors will move too slowly. States elsewhere in the region grappling with their own problems -- a more anti-Israel Egypt, Syria, Iran, and others -- will fan the flames. Meanwhile, the problems in those states will put the entire region on the edge of an unprecedented meltdown. Thus, even with falling global demand and the recent downturn in oil prices, you could see upward pressure on petroleum as well. Then, Iran announces it has successfully tested a nuclear weapon.


Sub-continental showdown
The government in Pakistan could totter or be decapitated thus heightening fears of even more pronounced Islamist influence and of growing tension with India. Indian markets fall. The Indian government is unable to pursue needed economic reforms. Social unrest might be seen throughout the sub-continent.


Another Eyjafjallajokull
One or more exogenous events of the type that regularly occur without warning -- a terror attack, an earthquake, a tsunami, a devastating hurricane or typhoon, the eruption of an Icelandic volcano -- could slam a major economy weakening the global situation further.


Expect the unexpected
An unexpected or unexpectedly intense conflict could erupt in the Russian near abroad, in Central Asia, in Turkey, in Africa, or in the Middle East creating even more uncertainty. With economically unsteady and politically hesitant leadership in the world's most important powers growing instability fueled by rogue opportunists seems increasingly likely.


Some combination of the above could then turn the global recession plus related banking, derivatives and stock-market crises into a depression. 

It is undeniable that many of the above developments are not highly likely. But what is striking is just how plausible most of them are. These are the kind of medium-to-low probability outcomes with significant consequences that planners must take into account.  It is also easy to see how further inaction, half-steps, and wrong steps by leaders could make these and other grim turns much more likely.

Such possibilities should not trigger panic. They should however, focus the minds of politicians, bankers, and electorates everywhere. The problem with the leadership failures of the recent past is not just that they have slammed the world economy yet again, it is that they have made the future more dangerous than it was. 

My fantasy is that recognizing this, President Obama would do as he once promised he would do, set personal ambition aside and announce he is not running for re-election. Instead, he would say that he wanted to shrug off the straight jacket of political considerations and focus exclusively on finding bi-partisan solutions to America's problems. Perhaps he would make a bold gesture, like appointing Erskine Bowles and Alan Simpson co-secretaries of the Treasury or, at least, give both economic leadership roles on his team. Others in the Democratic Party can focus on 2012 and beyond. There are many qualified to lead. (Who knows, perhaps the next candidate we find can actually have experience with markets and with the rest of the world.) There are certainly plenty of Democrats who stand head and shoulders above the current, feeble array the Republican Party has rolled out, which will only grow more feeble with the likely addition of Rick Perry this weekend. And then Barack Obama, a decent, talented, and gifted man, can fashion a unique legacy for himself, as a public servant who actually thought his first duty was to serve the public.

But, I'll admit it, that fantasy is less likely to occur than any of the other events I listed above.  And so I will continue to hope for the next best thing: The president and his fellow heads of state and government worldwide begin to govern as though they didn't care whether they won re-election or not, but instead as though their top priorities was rolling back the risk that calamities like those described above actually occur.

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