{"article":{"id":102875,"heading":"Bush, The Wars of the Texas Succession","author":"Paul Krugman","created":"2004-02-13 00:34:09","modified":"2013-11-11 00:28:44","last_modified":"Mon, 11 Nov 2013 07:28:44","article":"

From: \"portside moderator\" <moderator@portside.org<\/a>>

Subject: The Wars of the Texas Succession - By Paul

Krugman

The Wars of the Texas Succession

By Paul Krugman

NY Review of Books, Volume 51, Number 3 · February 26,

2004

http:\/\/www.nybooks.com\/articles\/16911<\/a>

American Dynasty: Aristocracy, Fortune, and the Politics

of Deceit in

the House of Bush

by Kevin Phillips

Viking, 397 pp., $25.95

The Price of Loyalty: George W. Bush, the White House,

and the

Education of Paul O'Neill

by Ron Suskind

Simon and Schuster, 348 pp., $26.00

1.

Here's a true story that came too late to make it into

Kevin

Phillips's American Dynasty: Aristocracy, Fortune, and

the Politics of

Deceit in the House of Bush, but it fits perfectly with

its thesis. As

all the world knows, Halliburton, the company that made

Dick Cheney

rich, has been given multibillion-dollar contracts,

without

competitive bidding, in occupied Iraq. Suspicions of

profiteering are

widespread; critics think they have found a smoking gun

in the case of

gasoline imports. For Halliburton has been charging the

US authorities

in Iraq remarkably high prices for fuel--far above local

spot prices.

The company denies wrongdoing, saying that its prices in

Baghdad

reflect the prices it has to pay its Kuwaiti supplier.

That's not

quite true; Halliburton's reported expenses for

transporting gasoline

are, for some reason, much higher than anyone else's.

But the real

question is why Halliburton chose that particular

supplier--a company

with little experience in the oil business, mysteriously

selected as

the sole source of gasoline after what appears to have

been a highly

improper bidding procedure. Why did it get the job? We

don't know. But

it's interesting to note that the company appears to be

closely

connected with the al-Sabahs, Kuwait's royal family. And

the al-

Sabahs, in turn, have in the past had close business

ties with the

Bush family, in particular the President's brother

Marvin.

In any previous administration--at least any

administration of the

past seventy years--this sort of incestuous relationship

among foreign

governments, private businesses, and the personal

fortunes of people

in or close to the US government would have been

considered unusual

and prima facie scandalous. What we learn from Kevin

Phillips's new

book, however, is that this kind of intertwining of

public policy and

personal self-interest has been standard operating

procedure not just

for George W. Bush, but for his entire family.

American Dynasty and Ron Suskind's new book, The Price

of Loyalty, can

be seen as a second wave of Bush critiques. The first

wave,

exemplified by Molly Ivins's Bushwhacked, Joe Conason's

Big Lies, and

David Corn's The Lies of George W. Bush, described what

Bush has been

doing these past three years. But they offered only

scant explanations

of how and why the Bush administration does what it

does. (I made a

brief stab at an explanation in the introduction to my

own The Great

Unraveling, but it was no more than a sketch.)

The new books go deeper into the agonizing question of

what is

happening to our country. Ron Suskind--an investigative

reporter with

a knack for getting insiders to tell what they know

--offers a

detailed, deeply disturbing look at how the Bush

administration makes

policy. Kevin Phillips--a former Republican strategist

who feels that

his party has betrayed the principles he

supported--investigates the

history of the Bush clan, and argues that this family

history provides

the key to understanding George W.'s motives and even

his technique of

governing.

Phillips is well aware that some will dismiss his work

as \"conspiracy

theory.\" But as he says, such taunts shouldn't prevent

us from looking

at the family history of the people who now rule us:

Worries about conspiracy thinking should not inhibit

inquiries in

a way that blocks sober examination, which often

more properly

identifies some kind of elite behavior familiar to

sociologists

and political scientists alike.

To that end, Phillips offers

an unusual and unflattering portrait of a great

family (great in

power, not morality) that has built a base over the

course of the

twentieth century in the back corridors of the new

military-

industrial complex and in close association with the

growing

intelligence and national security establishments.

And George W. Bush, as the scion of this dynasty, is the

first

president to, in effect, inherit the office. For four

generations the

Bush family has thrived by exploiting its political

connections,

especially in the secret world of intelligence, to get

ahead in

business, as well as exploiting its business

connections, especially

in finance and oil, to get ahead in politics. And

whatever the public

and the pundits may have thought about the 2000

election, for the

Bushes it was a royal restoration.

The family history of the Bushes helps us to understand

one of the

great tragedies of American political history. After the

disputed

election of 2000, the nation badly needed a president

who would seek

reconciliation. Instead it got a deeply divisive leader,

who made a

mockery of his campaign promise to be a \"uniter, not a

divider.\" It's

all in the family, Phillips tells us:

When Bush took office in 2001, a parallel to Stuart

and Bourbon

arrogance quickly emerged in the new regime's

insistence on

ideological conservatism despite the lack of any

such national

mandate. Restoration drinks from its own special

psychological

well.

So what kind of family has, in its own eyes, regained

its rightful

inheritance? It's a family that has become accustomed to

privilege:

By the mid-twentieth century, connections and crony

capitalism had

become the family economic staple, with emphasis on

the rewards of

finance, and instinctive policymaking fealty to the

investment

business. The Bushes have produced no college

presidents or

stonemasons, no scientists or plumbing

contractors--generally

speaking, their progeny have become almost

exclusively financial

entrepreneurs.

As this quote suggests, the Bush dynasty differs from

other American

families that have mixed wealth with political

prominence. While the

Kennedys and the Rockefellers may have a sense of

entitlement, they

also display a sense of noblesse oblige--what one might

call an urge

to repay, with charitable contributions and public

service, their good

fortune. The Bushes don't have that problem; there are

no

philanthropists or reformers in the clan. They seek

public office but,

if anything, they seem to feel that the public is there

to serve them.

Let's put W. to one side for a moment, and look at how

his brothers

used their political connections to enrich themselves.

Here are a few

highlights:

* Before he was elected governor of Florida, Jeb Bush,

in partnership

with a Cuban refugee whom Phillips suggests had CIA

connections,

bought an office building with $4.6 million borrowed

from a savings

and loan. When the S&L went bankrupt, the loan was taken

over by the

federal Resolution Trust Corporation, which for some

reason allowed

the partners to settle their debt for only $500,000. In

another deal,

Jeb was paid handsomely by a company selling pumps to

Nigeria that

somehow received large-scale financing from the US

Export-Import Bank.

* Neil Bush sat on the board of another S&L, Silverado,

which made

$200 million in loans--subsequently defaulted--to an oil

company that

in turn gave Neil large loans with no obligation to

repay. In recent

divorce proceedings it has emerged that a firm backed by

Chinese

businessmen, including the son of former Chinese

president Jiang

Zemin, paid Neil large sums in return for vaguely

defined services.

* After the first Gulf War Marvin Bush, who went to

Kuwait seeking

business in 1993, served on the boards of several

companies controlled

by the Kuwait-American Company. A member of Kuwait's

royal family is

one of Kuwait-American's major shareholders, and it

seems reasonable

to say that in effect Marvin works for the al-Sabahs.

And then there's the story of how George W. himself

became rich. Many

people now know the tale--the failed companies that

somehow got bought

out at premium prices, the insider stock sale that

somehow was never

properly investigated, the government generosity that

made the Texas

Rangers such a good deal for the businessmen who picked

W. to be their

public face. Several of these deals, like those of

brother Marvin, had

Middle East connections. Bush's first venture, Arbusto,

may have

involved bin Laden family money. The story of George

W.'s stake in

Harken Energy--which he sold two months before it

announced large

losses--involved a puzzling surprise deal with the

government of

Bahrain.

Here's how Phillips summarizes the picture:

All in all, if presidential family connections were

theme parks,

Bush World would be a sight to behold. Mideast banks

tied to the

CIA would crowd alongside Florida S&Ls that once

laundered money

for the Nicaraguan contras. Dozens of oil wells

would run

eternally without finding oil, thanks to periodic

cash deposits by

old men wearing Reagan-Bush buttons and smoking

twenty-dollar

cigars. Visitors to \"Prescott Bush's Tokyo\" could

try to make an

investment deal without falling into the clutches of

the

yakuza....

But aside from casting some light on the President's

character, why

does this shady family history matter? Phillips makes a

convincing

case that Bush family crony capitalism is closely

intertwined with

Bush administration policy.

In part, it's a matter of values, W.'s \"instinctive

policy fealty\" to

the activities that made his family rich. Although he

ran in 2000 as a

moderate, his policies, from the tax cuts to the

scrapping of the

Kyoto Protocol, have been relentlessly in favor of both

the rich and

the energy industry. And according to Suskind's The

Price of Loyalty,

W. appears to have a visceral dislike for corporate

reform.

More ominous, perhaps, is Phillips's contention that

family history

has shaped Bush foreign policy. It's a great irony that

George W.

Bush, beloved by red-blooded, red-state Americans for

his down-home

manner, comes from a family with deep political and

business

connections to the Middle East. As someone once pointed

out, it's a

lot easier to document links between the bin Laden

family and the

Bushes than it is to document links between the bin

Ladens and Saddam

Hussein.

I've already mentioned some of the business links. There

are others,

like George H.W. Bush's post-presidential employment by

the Carlyle

Group, the private global investment firm whose Saudi

investors

included members of the bin Laden family.

But perhaps more important is the policy connection. One

way to look

at the younger Bush's confrontational policies in Iraq

is that they

are a rejection of a traditional US strategy of making

alliances of

convenience with some of the area's regimes. And who was

responsible

for that earlier strategy? Few were more involved than

George H.W.

Bush, as CIA director, vice-president, and

finally--until Saddam

overstepped the line--as president. Phillips puckishly

describes the

two Gulf Wars as \"the wars of the Texas succession.\"

Along the way, Phillips reminds us of a series of actual

or potential

scandals surrounding US Middle Eastern policy, all of

which involved

the Bush family in some way. Phillips suggests that

there may be some

substance to old rumors that Republican operatives with

CIA

connections negotiated with Iran's mullahs to delay the

release of the

hostages in 1980--dooming Jimmy Carter's reelection

chances. He also

places the elder George Bush squarely at the center of

the Iran-contra

affair, citing the 1992 indictment of then Defense

Secretary Casper

Weinberger, which claimed that Bush participated in the

arms-for-

hostages swap.

For me, however, the most striking story was his

recounting of

\"Iraqgate.\" In this largely buried scandal, officials of

the Reagan

administration and the first Bush administration not

only supplied

Saddam Hussein with arms and turned a blind eye to his

use of chemical

weapons, but later signaled fairly clearly that it would

be okay with

them if he occupied part of Kuwait--a signal that Saddam

apparently

misunderstood as a license to swallow the whole thing.

This history

sheds an ironic light on the efforts of some of those

same officials,

notably Donald Rumsfeld, to retroactively justify last

year's invasion

of Iraq by a concern for human rights and democracy. 2.

Still, the fundamental question isn't what motivates the

Bush family

and its retainers. It's how such a self-interested clan,

with little

by way of a redeeming record of public service, could

have come to

such a position of power. And here Phillips offers only

a partial

explanation, though it's a good start.

There are three strands to Phillips's thesis. First is

the effect of

surging economic inequality, which has led to a

broad-based

\"dynastization of America.\" To put the matter simply,

the economic

elite has become far more elite than it was a generation

ago. Since

the late 1970s, the top 1 percent of the population has

more than

doubled its share of national income, and the top 0.01

percent has

increased its share by a factor of six. Today there is,

to an extent

not seen since the 1920s, a substantial class of people

wealthy enough

to form their own dynasties. And in a variety of ways,

from political

contributions to more subtle shaping of culture, for

example by

promoting aristocratic values, this class has created an

environment

favorable for dynastic ambitions.

Second is the, um, unholy alliance between the dynastic

class and the

religious right. I found Phillips's explanation of how

Bush uses

religiously charged language to signal his alliance with

fundamentalists revelatory:

Bush's day-to-day language was a veritable biblical

message

center. Besides the ever-present references to

\"evil\" and \"evil

ones,\" chief White House speechwriter Michael

Gerson, a onetime

college theology major, filled George W. Bush's

delivery system

with phrases that, while inoffensive to secular

voters, directed

more specific religious messages to the faithful....

Biblical scholar Bruce Lincoln's line-by-line

analysis of Bush's

October 7, 2001, address to the nation announcing

the US attack on

Afghanistan identified a half dozen veiled

borrowings from the

Book of Revelation, Isaiah, Job, Matthew, and

Jeremiah. He

concluded that for those with ears to hear a

biblical subtext, \"by

the [speech's] end America's adversaries have been

redefined as

enemies of God and current events have been

constituted as

confirmation of scripture.\"

What Phillips doesn't explain, or at least not to my

satisfaction, is

why crony capitalists have been able to make an

effective alliance

with the religious right, while other groups--say,

Democrats tied to

the labor movement --have not. After all,

fundamentalists in America

are, on average, relatively poor, and tend to be hurt by

right-wing

economic policies. It's true that, as Phillips points

out, modern

fundamentalist doctrine encourages a belief in

self-reliance, with a

corresponding benign attitude toward wealth and

hostility to policies

that redistribute income. But the Bush family does not,

to say the

least, consist of self-made men, and its policies

actually do involve

redistribution--from the have-nots to the haves. What

makes religious

leaders see an elite dynasty as their friend?

Phillips stresses the personal side-- George W. Bush's

ability to

convince many on the religious right that in spite of

his silver-spoon

background he really is one of them, for example in his

born-again

belief in the \"power of prayer.\" I suspect there must be

more to it

than that. Phillips also writes, \"Could 75 to 80 percent

of the

believers in Armageddon have voted for Bush? So it

appeared.\" But in

any case, for now the fact of the alliance with the

religious right

is, as Phillips says, a crucial part of the political

story.

But what about the rest of the population? The third

strand in

Phillips's explanation of the Bush dynasty's success is

its virtuosity

in misrepresenting what it's up to:

If hypocrisy is the tribute vice pays to virtue,

compassionate

conservatism is the policy hypocrisy uses to

disguise economic

vice. While it has been three generations in the

making, its

rhetorical embrace by the Bushes has come to display

less and less

genteel upper-class pretense...and instead to

manifest a higher

and higher ratio of outright deception: saying one

thing and

meaning another.

In describing this deception, Phillips invokes the term

\"Mayberry

Machiavellis\"--referring to Mayberry, North Carolina,

the fictional

small-town setting of The Andy Griffith Show. This label

for Bush

officials was originally used by John DiIulio, the

former head of the

White House's \"Faith-Based and Community Initiatives,\"

in a revealing

interview with the freelance journalist Ron Suskind

about the

political opportunism of the White House. And Suskind

has done it

again. His new book, The Price of Loyalty: George W.

Bush, the White

House, and the Education of Paul O'Neill, is based

partly on

discussions with Paul O'Neill, the former Treasury

secretary, partly

on 19,000 documents supplied by O'Neill, and partly on

other, unnamed,

insider sources. And it provides a devastating portrait

of Bush

policymaking that dovetails perfectly with Phillips's

analysis of

Bush's motives.

It was unfortunate, in a way, that so much of the

initial press

coverage of Suskind's book focused on O'Neill's

revelation that the

administration was obsessed with the idea of invading

Iraq from day

one, long before September 11. Not that his point has

been refuted --

in fact, other sources have come forward to confirm it.

But the main

virtue of The Price of Loyalty is what it tells us about

the

administration's values and mode of operation.

Let's start at the end--a discussion of economic policy

in November

2002, shortly before O'Neill was fired. Remember that

2002 was the

year of corporate scandals; for a brief period the

revelations of

chicanery at Enron, WorldCom, and other pillars of the

economy seemed

likely to dominate the midterm election. Instead, the

administration--

after making a few gestures toward corporate reform and

grudgingly

agreeing to a small increase in the SEC's budget--beat

the drums of

war, and drowned the issue out.

Still, officials remained concerned about a sluggish

economy. But what

was the cause of that sluggishness? The President,

according to his

secretary of the Treasury, had a simple answer: \"SEC

overreach.\" That

is, those nasty regulators, in their attempt to crack

down on

corporate malfeasance, were making executives and

investors nervous,

depressing the economy. Here's how Suskind describes the

moment:

O'Neill couldn't quite believe what he was

hearing--SEC overreach?

No wonder the White House had backed off from the

toughest

medicine for crooked executives and eventually ceded

the corporate

governance debate to Congress. How, though, could

the President

believe that the largely overwhelmed SEC had any

significant

effect on the vast US economy?

Kevin Phillips could, of course, have told him:

Bush--whose own

business career had involved some remarkably Enron-like

moments--was

revealing his instinctive, indeed inbred sympathy for

corporate

insiders, and his antipathy toward anyone who might try

to enforce

accountability.

Aside from the report of Bush's amazing outburst, what

we learn from

Suskind's description of that meeting is that, in

private, top

administration officials conceded the very points that

they vehemently

denied when responding to outside critics. They knew

that they were

being fiscally irresponsible. \"The budget hole is

getting deeper,\"

warned budget director Mitch Daniels. \"We are projecting

deficits all

the way to the end of your second term.\" (And this was

before the 2003

tax cut.)

They also knew that their policies heavily favored rich

people--

indeed, in an uncharacteristic moment Bush himself

seemed uneasy over

the tilt, asking, \"Didn't we already give them a break

at the top?\"

And when Bush asked, \"What are we doing on compassion?,\"

no one

answered.

But what they said in public was the exact opposite. In

private Bush

might worry that his tax plan was too friendly to the

rich; in public

he insisted that \"the vast majority of my tax cut goes

to the bottom

of the economic spectrum.\" In private Dick Cheney told

O'Neill that

\"Reagan proved deficits don't matter.\" In public he

described himself

as a \"deficit hawk.\"

So Phillips is right: the Bush administration is deeply

hypocritical

with regard to its core policies; what it says is at

odds not only

with what it does, but with what it really thinks. But

then what does

drive its policy decisions?

Let's flash back to what John DiIulio told Suskind in

late 2002:

There is no precedent in any modern White House for

what is going

on in this one: a complete lack of a policy

apparatus. What you've

got is everything--and I mean everything--being run

by the

political arm. Everything--and I mean everything--is

being run by

the Mayberry Machiavellis.

O'Neill confirms DiIulio's picture, with a vengeance.

Consider, for

example, what may in the long run be considered the

administration's

most fateful decision: to abandon the Kyoto Protocol

and, in effect,

abandon any attempt to face up to global warming.

O'Neill's account

makes it clear that nobody even tried to ask what the

facts were, what

the tradeoffs might involve. Instead, \"energy concerns

and the thinly

supported jeremiad by industry lobbyists had eclipsed

considerations

about action on global warming. Period.\" Or as O'Neill

summarized this

approach to policymaking, \"The base [i.e., Bush's

Republican political

base] likes this and who the hell knows anyway.\"

Or take the steel tariff. The decision to impose a

tariff on steel

imports was a terrible one in every way one can think

of. It was bad

for the economy; it was obviously illegal under

international law. It

squandered US credibility on trade issues; it was a

clear betrayal of

the administration's own rhetorical commitment to free

trade and free

markets. But throwing steel-producing regions a bone

might--just

might--yield some small political gains.

The Clinton administration refused to impose a steel

tariff even

during the 2000 campaign; had it betrayed its

principles, West

Virginia might have gone to Al Gore, who would now be in

the White

House. When the issue arose again in early 2002, Bush

was still

immensely popular. \"If you can't do the right thing when

you're at 85

percent approval, when can you do the right thing?\"

asked one

official. But politics prevailed, and the tariff went

through. (The

tariff was later rescinded, after the World Trade

Organization--

predictably--ruled that it violated international law.

But the damage

was done: US credibility on trade issues had been

damaged severely.

Partly because of this loss of credibility,

international trade

negotiations--supposedly an administration priority

--have stalled.)

What emerges from Suskind's book is a picture of an

entirely cynical

administration--much more cynical than Nixon's, in which

the

corruption was localized, and large parts of the policy

process

continued to be run by serious, even idealistic people.

(Old hands at

the Environmental Protection Agency describe the Nixon

administration

as a golden age.) Under Bush, it seems, political

rhetoric bears no

relation to reality--what officials say has nothing in

common with

what they do, or what they think. And policy decisions

are driven

almost entirely by politics, by what the political arm

thinks will

play well with \"the base.\"

But in that case, what's it all about? If everything

Bush and his

officials do is political, what is that they want to do

with their

power?

Old-line Republicans that I know cling to the belief

that the

Machiavellianism is only temporary, that it's embraced

in service to a

higher goal. Once the 2004 election is over, they say

Bush will show

his true colors as an idealist, someone who genuinely

believes in

small government and free markets.

But if Phillips is right--and I think he is--there is no

higher goal.

Bush's motivations are dynastic--to secure his family's

rightful

place. While he may have some policy biases--like that

\"instinctive

policy fealty\" to the investment business--policy is

basically there

to serve the acquisition of power, and not the other way

around.

According to people who observed him in Texas, Karl Rove

is a devotee

of Machiavelli, and particularly of The Prince. And as

Phillips points

out, \"Twenty-first-century American readers of The

Prince may feel

that they have stumbled on a thinly disguised Bush White

House

political memo.\" For Machiavelli's book was all about

how to gain and

hold power, not about what to do with it.

So what is the state of the union? Let Phillips have the

last word:

The advent of a Machiavelli-inclined dynasty in what

may be a

Machiavellian Moment for the American Republic is

not a happy

coincidence.... National governance has, at least

temporarily,

moved away from the proven tradition of a leader

chosen

democratically, by a majority or plurality of the

electorate, to

the succession of a dynastic heir whose unfortunate

inheritance is

privileged, covert, and globally embroiling.

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