Josh Marshall

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We'll be reporting much more on this in the coming days. But I just wanted to start off this afternoon by saying that I think James Baker's appointment as President Bush's envoy for settling Iraq's foreign debt issues is a much bigger deal than it seems. Much bigger.

My point isn't that there's anything hidden or conspiratorial about it per se. It's just that cutting the deals surrounding the debt issue is central to much of what happens in Iraq next year. And much of what happens in Iraq period.

Settling this debt issue isn't just a bigger version of refinancing your house. It will involve Baker in critical negotiations with the front-line states in the region as well as Iraq's debtors abroad. Those negotiations in turn will have a lot of influence over how helpful or unhelpful these other states choose to be next year -- with potential troops and a lot of other things. (It is also, as a friend of mine notes, a tacit admission that the Madrid donors' conference was a bit of a flop.) Finally, the terms of the deals -- how they're backed up, especially -- will get right into the matter of how the Iraqi economy itself gets structured: who owns what, how it's structured, what other countries get claims on what assets.

(Baker will be assisted in all of this by the fact that he knows everyone in the region -- and represents a number of them. He will also be able to say -- with no little credibility -- that he had nothing to do with all the unpleasantness of last year. "You don't want to deal with me? How'd you like dealing with Doug?")

We already know in late July there was some effort from some parties in the White House to get Baker into Iraq and possibly edge Bremer out. It didn't come off. But I think this move must be, in some sense, seen in the context of that earlier story.

I don't think Bremer is going anywhere. But I'm also not sure that he has to.

The situation in Iraq has become much more militarized in the last six weeks or so. In practice, that's diminished Bremer's role already. Baker's appointment may diminish his role in another part of running the country -- again, the all important nexus between the economic organization of the country itself and its relations with other states and international financial institutions.

Let's remember what Baker's specialty is. Yes, he was White House Chief of Staff, Treasury Secretary, Secretary of State and various other things. But his real specialty is coming in to save the day when men named George Bush look like they're about to lose their presidencies. He's the family fixer. He did that in 1992 when he gave up State to run Bush's campaign. And he did it eight years later in 2000 when he went to Florida to run the recount battle. The phone just rang again ...

Add to the mix the fact that the neocons react to James Baker's name about the way a gas station attendant does if you try to light a cigarette while you're filling your tank.

So many articles get published every day. And it's a struggle to know which are the must-reads and which can be safely ignored. Read this one ... Jet Lag: How Boeing Blew It by Douglas Gantenbein in Slate.

Richard Perle is now in<$Ad$> yet more hot water over the fact that he wrote an OpEd in the Wall Street Journal supporting the tanker deal now at the center of the Pentagon-Boeing procurement scandal. The reason for the heated water, as we noted yesterday, is the fact that Boeing was a big investor in his 'Trireme Partners.'

But tucked away down in the final graf of this article on the story in the Financial Times is this little nugget ...

Internal Boeing e-mails portray a lobbying campaign the company undertook to have "friends on the Hill" and "think tanks" drum up support for the deal. One Boeing e-mail refers to an Op-Ed article in support of the company by retired Admiral Archie Clemins as being "ghost-written".

I'd say what we might have here is another thread pointing in the direction of the never-truly-busted-open OpEd Payola scandal, which we'll revisit soon.

What a difference an ocean makes ...

The nation's job market continued to strengthen in November, with the unemployment rate falling slightly to 5.9 percent and payroll employment rising for a fourth consecutive month, the Labor Department reported yesterday.

Washington Post, December 6th 2003

The US economy generated significantly fewer jobs than expected in November, according to government figures issued on Friday, damping hopes of a swift revival in the sluggish labour market.

Financial Times, December 5th 2003

We cut-n-paste, you decide.

I've gotten sort of out of the habit <$NoAd$>of linking to Paul Krugman's columns, largely because I think there's so much over overlap between our audiences that the links are redundant.

(In Venn Diagram terms, overlap in the sense of my little circle off in some out of the way part of his big circle.)

But Friday's column is a true stand-out for its unadorned enumeration of what's happening.

Note the last four grafs ...

Awhile back, George Akerlof, the Nobel laureate in economics, described what's happening to public policy as "a form of looting." Some scoffed at the time, but now even publications like The Economist, which has consistently made excuses for the administration, are sounding the alarm.

To be fair, the looting is a partly bipartisan affair. More than a few Democrats threw their support behind the Medicare bill, the energy bill or both. But the Bush administration and the Republican leadership in Congress are leading the looting party. What are they thinking?

The prevailing theory among grown-up Republicans — yes, they still exist — seems to be that Mr. Bush is simply doing whatever it takes to win the next election. After that, he'll put the political operatives in their place, bring in the policy experts and finally get down to the business of running the country.

But I think they're in denial. Everything we know suggests that Mr. Bush's people have given as little thought to running America after the election as they gave to running Iraq after the fall of Baghdad. And they will have no idea what to do when things fall apart.

I made a series of similar points in my column in The Hill this week, and many others are putting the pieces together too.

Now back to the Empire essay.

My kingdom for an empire ... essay.

Some random thoughts about the Democratic primary race.

I had lunch today with someone who is not a politician but a fairly prominent Washington Democrat -- certainly not someone from the party's liberal wing. And in the course of answering a question, I said "If it [i.e. the nominee] ends up being Dean ..." At which point, with the rest of my sentence still on deck down in my throat, my friend shot back : "It's Dean."

It was effortless. He wasn't happy or sad about it. He wasn't trying to convince me -- more like letting me in on something I apparently wasn't aware of yet.

We went back and forth over the various factors that play into the race. But the conclusion was that Dean is just in the zone, hitting on every cylinder, doing almost everything right tactically, and having the added benefit of having tons of money. Plenty of candidates have money and go nowhere because they don't know what to do with it. But at least at the moment that doesn't apply to Dean -- and that's certainly related to the fact that the money itself stems from campaign ingenuity, thus creating a sort of virtuous circle of fundraising success.

(I also keep running into McCain types who are very into Dean -- something which is on one level pretty surprising, but on another not surprising at all.

I was reminded of this when I read this post by Eric Alterman about John Kerry's campaign -- a meditation on a meeting Kerry held recently with Alterman and a bunch of other journalists, intellectuals and scribblers at Al Franken's apartment in New York. The broader theme was reconciling Alterman's belief that Kerry could beat President Bush and could even be a great president with the reality that Kerry's campaign appears to be disintegrating in New Hampshire. And because New Hampshire, essentially everywhere.

Alterman says Kerry ...

still has the problem—perhaps unsolvable—of how to break through to Dean voters in the short amount of time he has left when the media has their storyline already and no candidate gets to say anything that lasts more than a few seconds.

And how!

I like Kerry -- I find the smarm attacks on him revolting. But, in a situation like this, it's really hard for me to see how you can recover the support of voters that you once had in New Hampshire, but then lost.

I think Clark clearly has momentum. But he'll need a lot of momentum to make a fight of this.

Edwards and Lieberman? Somewhere between off the map and non-existent.

I find myself torn because I see great promise in the resurgence of energy among grassroots Democrats -- something that has made Dean's campaign possible, but which he himself has also significantly helped to catalyze. The novel methods of fundraising and networking are extremely important -- something that Dems allowed to atrophy literally decades ago. And I definitely think that the going models that Democrats have in DC just aren't working, demonstrably aren't working.

Yet my wariness remains -- on various counts.

Of late, a lot of folks, playing off the McGovern analogy, have started talking up the Goldwater one. Perhaps the Dems lose this one, but it's a campaign that germinates into a political realignment one or two or three elections later.


The problem is that I'm not sure we can afford another four years of this. And I don't consider that hyperbole, but cold fact. Plus, I think Bush is beatable.

"The hawks' whole plan rests on the assumption that we can turn [Iraq] into a self-governing democracy--that the very presence of that example will transform politics in the Middle East. But what if we can't really create a democratic, self-governing Iraq, at least not very quickly? What if the experience we had after World War II in Germany and Japan, two ethnically homogeneous nations, doesn't quite work in an ethnically divided Iraq where one group, the Sunni Arabs, has spent decades repressing and slaughtering the others? As one former Army officer with long experience with the Iraq file explains it, the "physical analogy to Saddam Hussein's regime is a steel beam in compression." Give it one good hit, and you'll get a violent explosion. One hundred thousand U.S. troops may be able to keep a lid on all the pent-up hatred. But we may soon find that it's unwise to hand off power to the fractious Iraqis. To invoke the ugly but apt metaphor which Jefferson used to describe the American dilemma of slavery, we will have the wolf by the ears. You want to let go. But you dare not."

"Practice to Deceive"
The Washington Monthly
April 2003

Still ugly, still apt.

All in the Family ...

President Bush named James A. Baker III, the <$NoAd$>former secretary of state, as his personal envoy to Iraq today to help the country grapple with its debt problem.

"Secretary Baker will report directly to me," Mr. Bush said in a statement, "and will lead an effort to work with the world's governments at the highest levels, with international organizations and with the Iraqis, in seeking the restructuring and reduction of Iraq's official debt."

New York Times, December 5th 2003

Saudi Arabia will withhold the $1 billion in loans and credits that it pledged last month for Iraq's reconstruction until the security situation is stabilized and a sovereign government takes office, U.S. and Saudi officials said.

Los Angeles Times, December 1st 2003

Baker is one of the Saudi government's chief supporters in the US. His law firm, Baker Botts, is now representing the Saudi government in the $ 1 trillion law suit filed against Saudi Arabia for its alleged role in the 9/11 attacks by the victims' families. Baker also serves as senior counsel and partner in the Carlyle investment group, which is a financial adviser to the Saudi government.

Jerusalem Post, August 15th 2003

For more than three decades, Saudi Arabia has sought to influence American politicians, often through investment in American business. While they have occasionally sought out Democrats, they are far more comfortable with Republicans -- and in particular, with Bush Republicans. At the moment, for example, the kingdom's defense attorney in a lawsuit brought by families of 9/11 victims happens to be James Baker, that ultimate Bushie whose resume includes stints as Secretary of State and Treasury. (Mr. Baker's last big court case was Bush v. Gore.)

New York Observer, August 11th 2003

A fine illustration of this Washington tradition took place at the capital's Ritz-Carlton Hotel on Sept. 11, 2001. On that day, former secretary of state James Baker, former secretary of defense Frank Carlucci and a parade of other former government officials convened at those swank quarters to attend the annual investor conference of the Carlyle Group, a private investment company known for putting lucrative business deals together for the Saudi royal family (and also known for its roster of all-star advisers, including Baker and the elder George Bush). Among those gathered to schmooze with Washington's power brokers was one Shafiq bin Laden, a Saudi captain of industry whose brother would slaughter thousands of Americans before the conferees broke for lunch. The meeting, notes Robert Baer, whose Sleeping With the Devil catalogs many others like it, "was the perfect metaphor for Washington's strange affair with Saudi Arabia."

Washington Post, July 27th 2003

I'm not a Saudi-basher. But it seems to me that there's some difficulty with this appointment.

We'll be talking more about this in coming days. But there are more and more signs of the IRS and other arms of the federal government taking a conspicuous interest in the finances and political spending of Democratic-leaning organizations.

Most establishment, mainstream Dems don't want to think this sort of thing is happening. But I've spoken to several in recent days who are starting to think that it is. The IRS, for instance, has just began a top-to-bottom audit of the NEA's (the National Education Association, the country's largest teachers' union) finances.