Is This a Claude Rains Moment?

Claude Rains as Captain Renault

I love old movies. Perhaps it’s because I grew up watching them. In those pre-Sesame Street days, after school television was largely a choice between soap operas and the Million Dollar Movie. Independent NY channel 9 (WOR-TV) would run the same movie twice a day for five afternoons. So, I grew up watching old movies from the 30’s and 40’s. Perhaps that would explain my poor social skills.



One of my favorites (and, I am not alone on this) was Casablanca. The romantic WW II classic starring Humphrey Bogart and Ingrid Bergman had a great supporting cast including Claude Rains as a corrupt French policeman.

The ordering by the Nazi’s to find a reason to shut down Rick’s Café (Bogart’s establishment) elicits the following dialog between Rick and Rain’s Captain Renault

Rick: How can you close me up? On what grounds?
Captain Renault: I'm shocked, shocked to find that gambling is going on in here!
[a croupier hands Renault a pile of money]
Croupier: Your winnings, sir.
Captain Renault: [sotto voce] Oh, thank you very much.

I thought of him this week when the news broke of members of the Secret Service and (gasp!) our very own military were discovered to have engaged the services of prostitutes in Colombia. I am shocked, shocked to find that members of our military and Secret Service engaged the services of prostitutes.

But, this is not a joke. There are a couple of issues here:

Prostitution is legal in Colombia. What's the controversy? Are we to hold these public servants to a standard that is above the law? Who sets the standard? How does a member of the Secret Service know what the standard is?

Well, there is a higher standard. It’s called a security clearance. And, though I seriously doubt that everyone who engages the services of a prostitute has had theirs lifted, in this case, that’s exactly what happened.

But, I wonder. Are activities that are legal some places but not others permissible? Drugs are legal in Switzerland and prostitution is legal in the Netherlands. Should members of the Secret Service be precluded from engaging in legal activities in other countries if they are not legal in the US?

The larger issue, of course, is the potential security risk associated with inviting prostitutes into a hotel room that houses the President's itinerary and other details of his trip to South America. What's to stop a potential terrorist or assassin from paying a prostitute to spirit away some of the confidential documents that contain these details in the middle of the night?

Something nearer to me personally is the scandal that just broke about alleged rapes at West Point and Annapolis and the associated cover-up. Two women – one from each of the Academies – have alleged that they were raped as students (cadets, midshipmen) and that senior officers were unresponsive to their complaints. If true, it is unconscionable. Women were first admitted to the Academies in 1976. By now, their participation in our armed forces and their evaluation on the basis of merit should be a matter of routine.

I am reminded of the Tailhook scandal in 1992. Navy Lt. Paula Coughlin was forced to run a gauntlet of drunken pilots who groped her and tore at her clothes. The annual Tailhook convention was attended by some of the same senior officers who should have been preventing this type of behavior.

When the story broke, then Secretary of Defense Dick Cheney asked for and received the resignation of the Secretary of the Navy (the Navy’s CEO), Lawrence Garrett III. Several senior officers were relieved of their responsibility and punished for the cover-up. The Navy embarked upon an education program to prevent future occurrences of sexual harassment.

It’s time for a refresher course.

There will always be breaches of acceptable conduct and there will always be cover-ups. The larger question is how will the leadership of these important institutions respond?

The Catholic Church covered up sexual abuse of children for decades, a breach that I still find the most egregious of any in my lifetime. Richard Nixon and his close advisors engaged in a cover-up of the Watergate burglary. The cover-up was worse than the crime.

So, it will be interesting to watch the events of the next few weeks. How will the LEADERS of these important institutions respond as the facts unfold? What will the current Secretaries of the Army and Navy do? How about the head of the Secret Service? How will they respond?

Will they act like true LEADERS? Or, will they act like Claude Rains?

WHO WILL LEAD?

Precious Dollars

My last post (One Issue and One Issue Only) stimulated a variety of responses. Many fell into the “Right On!” category; others were more circumspect. Over lunch, one of my readers commented that “every dollar in the federal budget is precious to someone”. That’s a great insight. It explains why pollsters tell us that the vast majority of Americans agree we should balance the budget but few agree that we should cut something that affects them – Social Security or the home mortgage deduction, for example.


Many self-described liberals reacted negatively though none challenged the economics. One described the post as “more blah, blah, blah”. Others merely asserted that I “must be for” raising taxes, eliminating the Bush tax cuts or reducing defense spending. I was a bit taken by surprise as I didn’t intend the post as a political statement but rather a brief on economics. I believe the economics are important because we are sitting on a ticking time bomb.

Sometime late this year or early next, Congress will have to approve another increase in the debt ceiling. Almost simultaneously, the Bush tax cuts will expire – not just those on the rich but the middle class as well. The last debt ceiling deal requires that mandatory cuts be made across the board unless a new deal can be made. So, we will have a sharp increase in taxes accompanied be a dramatic reduction in government spending. In the context of today’s political environment, it’s hard to envision a solution.

If you’re into shock therapy, you may think this will be a good thing for us. However, the abrupt cessation of government deficits is likely to be a shock to the economy, leading to massive unemployment and stalled growth.

It’s easy to buy into the theory that one cannot get out of debt by taking on more debt. It sounds logical. But, an economic collapse will likely result from putting it into practice. We have seen evidence of this in Greece, Ireland and Spain.

It is better to come up with a plan for sustainability that adjusts the current course over time. The President recently submitted his idea to Congress in the form of a budget for fiscal 2013. It was rejected by, not only Republicans, but also every Democrat in the House of Representatives – a vote of 414 to 0.

There are other approaches. Congressman Paul Ryan (R-WI) has put forth his Roadmap for America (see, Every Dogma Has Its Day). It was the basis for his 2013 budget proposal. Now the Chairman of the House Budget Committee, Ryan’s budget proposal has lost some of the bi-partisan approach evident in the original Roadmap.

There is much to criticize in the Ryan budget plan. MIT's Simon Johnson points out that, while Ryan would make substantial cuts to government expenditures, he does little to “stabilize revenues”. He also points out that the Ryan plan is regressive. That is, it cuts substantially from programs that affect the poor. All of that said Ryan does get us on the path to fiscal sustainability according to the bi-partisan Congressional Budget Office.

A more bi-partisan approach was taken by the President’s own commission. The National Commission on Fiscal Responsibility and Reform (often called Simpson-Bowles) first met in April of 2010. Their charter was, according to the President, to identify “policies to improve the fiscal situation in the medium term and to achieve fiscal sustainability over the long run”.

Alan Simpson

Recently, the commission’s co-chairs, Alan Simpson (former Republican Senator) and Erskine Bowles (former Clinton chief of staff), were interviewed by Charlie Rose. Simpson joked that his wife noted the “lilt” in his step of late. She said it was because he had finally pissed off everyone in America instead of just a few.

He cited cuts that his bi-partisan commission recommended to student loans, Medicare, defense spending, farm subsidies and veterans benefits. There were increases in gas taxes and the elimination of tax deductions that would affect the middle class.

The plan was criticized by those on the left (Paul Krugman, Nancy Pelosi) who don’t want cuts to government programs and the right (Defense contractors, the American Enterprise Institute) who don’t want to see taxes increased.

Those who occupy the middle of the political spectrum (including me, see "Why I Like Ike") were more friendly, viewing it as a starting point for compromise (Third Way, Concord Coalition).

Personally, I remember being hopeful when the commission’s report was released. I thought perhaps the President would take up the banner and fight the good fight as he had promised – the “grand bargain” he has called it. I wrote about it in a blog post the morning of last year’s State of the Union address (see "Adam Smith: Communitarian").

Everyone will hate getting to a balanced budget. Simpson was only half joking when he talked about pissing off everyone one in America. But, perhaps that is the only way this will work – if everyone makes a sacrifice.

So, how do we get out of this mess? There is only one answer in my view: presidential LEADERSHIP.

Apologists for our current President will point out that the Republican opposition won’t pass anything the President proposes. But, didn’t both Clinton and Reagan have their way with a Congresses of the opposing party? And, didn’t George W. Bush get anything he wanted from a Democratic Congress – the Iraq War, the Patriot Act, the tax cuts?

Has our current President abandoned the hope of his “grand bargain”? Is he capable of leading the nation to a more sustainable course? Is it time for a change?

WHO WILL LEAD?