Yesterday Rush Limbaugh asked a former U.S. serviceman who called into his show a totally-hypothetical-and-not-in-any-way-designed-to-impugn-the-patriotism-of-the-sitting-president-kind of question: 

Are you aware of any military contingency plans for a president who might not be your prototypical pro-America president? Are there contingency plans to deal with a president who may not believe that the United States is the solution to the world's problems?

Marc Ambinder provides both a succinct ("No.") and a more detailed answer.  Now, some readers might take umbrage at the partisanship of Limbaugh's question, but I think it dovetails nicely with some recent research interests of my own.  In particular:  what would happen if the president was under threat of turning into a zombie? 

Let's break this down into two phases:  A) a president who's been bitten but is still clearly human; and B) an undead POTUS. 

The first situation could distort the government's initial policy responses.    After all, the actors with the most immediate stake in sabotaging any attack on zombies are those who have been bitten by zombies, and the human relatives of zombies. By definition, the moment humans are bitten, they will inevitably become zombies. This fact can dramatically alter their preferences. This change of mind occurs in many zombie films. In George Romero's Land of the Dead (2005), the character of Cholo has the most militant anti-zombie attitude at the outset of the film. After he is bitten, however, he decides that he wants to "see how the other half lives." In Peter Jackson's Dead Alive (2002), as well as Romero's Dawn of the Dead (1978) and Survival of the Dead (2010), family members keep their undead relatives hidden from security and paramilitary forces.  

Clearly, soon-to-be-ghouls and their relatives can hamper policy implementation.  One would expect a soon-to-be POTUS to order research efforts on finding a cure rather than focusing on prevention, for example. 

If the situation is unclear when the president is infected, all hell breaks lose once he becomes a member of the differently animated.  The law here is extremely murky.  From Ambinder:

The Presidential Succession Act of 1947 spells out a procedure. Let's look at 3 USC 19, subsection "E."  We're dealing with a situation where there is no President, no Vice President, no Speaker of the House and no President Pro Tempore. The law then appoints the Secretary of State as President until either the end of the current president's term in office OR someone higher in the chain of command suddenly re-appears or recovers from injuries and is able to discharge the powers of office.  (The Secretary of Defense is sixth in line, after the Secretary of the Treasury.)

This seems clear: If it's not clear, after some sort of decapitation attack, whether the President, the Vice President or the two Congressional successors are alive, or if they're all alive but disabled, then the Cabinet secretaries become acting President -- until and unless a "prior entitled individual" is able to act.

Let's say that the POTUS, the VPOTUS, the Speaker and the President Pro Tempore are all injured; only the Vice President recovers. As soon as that person is eligible, he or she can "bump" the Acting President aside whenever he wants....

The problem is that, in a catastrophic emergency, the people who need to know who is in charge might not have the resources to find this out immediately. These people are, in particular, the Secret Service, and the folks who execute lawful orders from the National Command Authority (which is another name for the commander in chief's executive powers).

Well, then what the hell happens if a president is bitten by a zombie, dies, and then becomes a zombie?  It seems to me that the Presidential Succession Act of 1947 doesn't cover this contingency. 

There is also the question of the conflicting bureaucratic imperatives that some organizations, like the Secret Service, would face in this scenario.  For example, in Brian Keene's The Rising, the U.S. government falls apart almost immediately. A key trigger was the Secret Service's difficulties altering their In divining bureaucratic preferences, where you stand depends on who you eat. standard operating procedures. After the president turned into a zombie, he started devouring the secretary of state. As a result, "one Secret Service agent drew his weapon on the undead Commander-in-Chief, and a second agent immediately shot the first." 

I think the lesson to draw here for Rush and others is that in divining both bureaucratic and presidential preferences, where you stand depends on who you eat. 

I hereby applaud Rush for being brave enough to highlight this troublesome question during a week when nothing else is going on in the world. 

Hmmm.... this is interesting:

Nations on the front lines of the old Cold War divide made clear here Saturday that they want the Senate to ratify the new U.S.-Russia nuclear treaty, and said that Republican concerns about their well-being were misplaced.

In an unannounced group appearance at the end of an administration background briefing on Afghanistan, six European foreign ministers took the stage with a message for Congress.

"Don't stop START before it's started," Bulgarian Foreign Minister Nickolay Mladenov said.

Conservative Republican senators have said the New Strategic Arms Reduction Treaty, or New START, signed early last year, needs more work and have rejected the administration's hopes of bringing it to a vote in the lame duck session before the end of the year.

The ministers insisted that Obama administration officials, some of whom stood at the back of the room as they spoke, did not put them up to the appeal. All are here participating in the NATO summit.

"I'm the one who initiated this initiative," Danish Foreign Minister Lene Espersen said. The idea, she said, was to "at least make the Republican Party [aware] of how important this is."

In addition to being her country's foreign minister, Espersen said with some indignation, "I'm also the chairman of the Conservative Party of Denmark. Nobody can ever accuse me of being soft on security."

"We're all conservatives," Hungarian Foreign Minister Janos Martonyi added.

So is this:

Polish Foreign Minister Radoslaw Sikorski had endorsed the treaty Friday, saying a failure to ratify it this year "will embolden those in Moscow who would rather have the West as an enemy than as a partner – and who thus would like to see the tenuous progress made in recent months to be undone."

And this:

Two major Jewish groups came out Friday in favor of ratification of the START treaty.

Both the Anti-Defamation League (ADL) and the National Jewish Democratic Council (NJDC) cited the importance of passage of the U.S.-Russian nuclear arms reduction treaty in order to maintain American-Russian cooperation in pressuring Iran to curtail its nuclear program.

"We are deeply concerned that failure to ratify the New START treaty will have national security consequences far beyond the subject of the treaty itself," the ADL said in a letter sent to every senator Friday.

"The U.S. diplomatic strategy to prevent Iran from developing nuclear weapons requires a U.S.-Russia relationship of trust and cooperation," ADL continued. "The severe damage that could be inflicted on that relationship by failing to ratify the treaty would inevitably hamper effective American international leadership to stop the Iranian nuclear weapons program."

The National Jewish Democratic Council, meantime, issued a statement Friday urging citizens to call Senate Minority Whip Jon Kyl (R-Ariz.) and tell "him to put politics aside, and join the broad bipartisan consensus behind START."

Will this have any effect on START's ratification chances?  Earlier this week Fred Kaplan observed that passage might still be a possibility:

If Kyl thinks that the treaty will get ratified anyway—or that, if it doesn't get ratified, he will lose all the extra money for nuclear modernization—then maybe he'll jump onboard. That way he could preserve his standing as a security hawk and, perhaps more important, an effective power broker.

Of course, he and his colleagues in the Republican leadership might think it's more important to deny Obama any victory, to make him seem ineffective and thus erode his chances of re-election in 2012 (the GOP's No. 1 priority, according to Senate minority leader Mitch McConnell). If that's what ends up happening, at least Obama will know the name of the game for the next two years—and, maybe, figure out how to play it.

The first couple of stories suggest that maybe, just maybe, the GOP would pay a price for out-and-out obstructionism -- and let's be blunt, that's really what Kyl's behavior is at this point.  Sure, pissing off France or South Korea comes with few downsides for U.S. Senators, but Poland and other former Warsaw Pact countries are another kettle of fish.  If neoconservatives Jews Eastern Europeans powerful interest groups within the GOP have bigger fish to fry than relations with Russia, then they will make life somewhat more difficult to Republican Senators.   Just how much more difficult remains to be seen, however. 

Developing....

The Troubled Assets Relief Program expired yesterday. I've blogged about how this program was both cost-effective and a pretty significant policy achievement. This appears to be the expert assessment as well. The Wall Street Journal's Deborah Solomon and Naftali Bendavid explain:

It will ultimately cost far less than the initial $700 billion price tag that stunned a nation. Major banks are profitable and can raise capital. Credit spreads -- a key measurement of risk -- are down to pre-crisis levels.

The White House now projects TARP will lose at most $50 billion, down from $105 billion projected earlier this year. Privately, Treasury Department officials say the U.S. may not lose a dime, and could ultimately make money depending on how some investments fare, in particular American International Group Inc. and General Motors Corp. In a $14 trillion economy, $50 billion is less than 1% of economic output.

"The incredible irony here is that TARP probably succeeded wildly beyond anybody's imagination," said Alan Blinder, a Princeton University economist who co-authored a paper crediting the administration's economic policies with preventing a second Great Depression. "Suppose the original TARP bill had been to spend $50 billion to avert a catastrophe. Would anyone have blinked?"

Or consider the Financial Times story by Tom Braithwaite:

[A]ll of the consequences have to be judged against late 2008 and early 2009 when fear stalked the markets and nationalisation of the biggest US banks looked a possibility.

Making a play on a famous MasterCard commercial, Mr [Lee] Sachs outlines what the country got in return for its investments in the banks. “Dividends? Five per cent. Equity warrants? Two per cent. The economy not turning into the second Great Depression? Priceless.”

Despite this fact, however, TARP is ridiculously unpopular with the American people. 

Oddly enough, this might be a very good thing, for two reasons. First, the likelihood that the latest financial reform bill will prevent a future financial crisis is exactly nil. There will be moments down the road when the financial sector will come crying to Washington.   

TARP's biggest problem, however, was that it badly exacerbated the moral hazard problem. If banks know that they are insured against catastrophe, this gives them an incentive to act in a more risk-loving manner to maximize profits -- thereby increasing the probability of a catastrophe. While this might be a good thing in some sectors of the economy, finance is not one of them. 

TARP's political unpopularity, however, could help to eliminate the moral hazard problem. As Solomon and Bendavid observe: 

Perhaps the biggest fallout from TARP is that it precludes another TARP. Should the financial sector run into trouble, the chances of another government bailout are essentially nil. For many on Capitol Hill and beyond, the end of bailouts is a good thing. But some worry TARP's legacy could be a more devastating financial crisis down the road.

"The greatest consequence of the TARP may be that the government has lost some of its ability to respond to financial crises," concluded the Congressional Oversight Panel, which oversees TARP and has been one of its biggest critics.

Now, truth be told, I'm not sure this is entirely accurate. Sure, rescue packages are unpopular now -- but let the Dow Jones Industrial Average fall 800 points and politicians might react differently. If, however, the political perception is that no more bailouts from D.C. will be forthcoming, then it might condition financial players to act in a more prudential manner.

In other words, the Tea Party activists on the right and the netroots activists on the left might be the political lobbies that do the most to preserve the integrity of the U.S. financial system. 

I'll be spending the rest of the day savoring this irony. I welcome commenters trying to burst my cognitive bubble, however. 

The Financial Times has been working overtime to discussing an emergent trend: multinational CEOs in Europe and the United States ripping into China.

In some ways, this started earlier this year. There was Google's complaint, of course. And, as TNR's James Mann noted, "Both the American Chamber of Commerce in Beijing and the European Chamber of Commerce in China have issued reports in recent months conceding that the business climate for foreign companies there has steadily worsened."

Things have been heating up in July, however. First, as Guy Dinmore and Jamil Anderlini report, GE CEO Jeffrey Immelt ripped into China while in Europe:

He warned that the world’s largest manufacturing company was exploring better prospects elsewhere in resource-rich countries, which did not want to be “colonised” by Chinese investors. “I really worry about China,” Mr Immelt told an audience of top Italian executives in Rome, accusing the Chinese government of becoming increasingly protectionist. “I am not sure that in the end they want any of us to win, or any of us to be successful."....

“China and India remain important for GE but I am thinking about what is next,” he said, mentioning what he called “most interesting resource-rich countries” in the Middle East, Africa, Latin America plus Indonesia. “They don’t all want to be colonised by the Chinese. They want to develop themselves,” he said. The comments echo a rising chorus of complaints from foreign business groups in China about the regulatory environment they face.

Gideon Rachman notes that Immelt is hardly alone in his complaints:

[W]hen Google, Goldman Sachs, and GE all run into difficulties simultaneously, it seems clear that a bigger trend is at work. Privately, senior US officials have been worrying for some time that Chinese trade and economic policy is taking a more nationalist direction that is penalising US companies. They worry that, after 30 years of strong economic growth, China believes it can now afford to take a less welcoming attitude to foreign investment, and instead concentrate on promoting national champions.

What's interesting is that European firms are now joining in the chorus of complaints. Furthermore, as Jamil Anderlini notes, they're not doing it in private dinners -- they're blasting the Chinese leadership publicly and directly:

Two of Germany’s most prominent industrialists have attacked the business and investment climate in China during a meeting with Wen Jiabao, the Chinese premier.

The criticism from the businessmen, the chief executives of Siemens and BASF, came against a backdrop of rising discontent among foreign businesses operating in China.

The German executives’ comments were all the more striking as they were made directly to the Chinese premier, and in public, as part of Angela Merkel’s four-day state visit to the country.

Jürgen Hambrecht, chief executive of BASF, the chemical producer, hit out at restrictions on foreign business and complained of foreign companies being forced to transfer business and technological know-how to Chinese companies in exchange for market access.

“That does not exactly correspond to our views of a partnership,” Mr Hambrecht told Mr Wen at the weekend meeting in the western Chinese city of Xi’an.

Addressing government procurement practices, a recent area of complaint by foreign executives and governments, Peter Loescher, chief executive of Siemens, the industrial conglomerate, said foreign companies operating in China “expect to find equal conditions in the fields of public tenders”.

Mr Loescher, who is also chairman of the Asia-Pacific Committee of German Business, called on Beijing rapidly to remove trade and investment restrictions in sectors such as automobiles and financial services.

BASF and Siemens had combined sales in greater China of more than €9bn ($11.6bn) last year and employ more than 36,000 people in the area.

Mr Wen responded to the criticism by telling Mr Hambrecht to calm down, insisting that China remained open to foreign investment and did not discriminate against foreign companies. “Currently there is an allegation that China’s investment environment is worsening. I think it is untrue,” Mr Wen said.

Alan Beattie and the ubiquitous Mr. Anderlini provide some general context for the latest venting:

The risk-reward calculation between staying quiet and speaking up has shifted towards the latter. With China employing policies including ignoring intellectual property rights, forced technology transfer and government procurement skewed towards domestic companies, some foreign businesses feel they are being pushed out of the country. “We are feeling less and less welcome in China, which is why you are seeing more people speaking out and reconsidering their futures in China,” says John Neuffer of the US Information Technology Industry Council.

Business leaders say Beijing’s appetite for more liberalisation of foreign investment has waned after a rapid burst of reform around China’s accession to the World Trade Organisation in 2001. So even when current policies only represent a standstill, they feel like going backwards.

At best, current policies are moving very slowly towards liberalization. The good news is that China is seeking to join the WTO's Government Procurement Agreement, which liberalizes trade among participating countries for government-commissioned projects. The bad news is that China's latest offer is half-assed tokenism underwhelming in terms of what's on offer, and likely to be rejected by the US and EU.

So, why is China suddenly so hostile towards western multinationals? The simple realpolitik answer is that China is simply more powerful than it used to be, and its flexing its muscles now because it has them. In the Wall Street Journal, David Wessel offered a revealing anecdote that suggests President Obama shares this quasi-relative gains view:

Mr. Obama, who took office in an economy far worse and far more hostile to trade than the one Mr. Clinton inherited, appears less convinced of the virtues of free trade per se. He loves exports, easily sold as creating jobs. But he seems to view world trade like a basketball game: He wants to win, and doesn't like feeling that others are taking advantage of his team. He needles aides who worked in the Clinton administration that they let China into the WTO with a better hand than the one he has to play. Aides counter that China would be even more of a threat if not bound by WTO rules. He is unpersuaded....

Mr. Obama's trade strategy is becoming clearer. In international forums, as he did at the Copenhagen climate-change talks, he is arguing that China is posing as a developing country even though it has grown up and needs to be treated like the economic powerhouse it is. At home, he knows—no matter what his economists tell him—that neither voters nor Democrats in Congress will be convinced that free trade is good for them. So he is styling himself as a tough bargainer, who can beat other countries at their own game.

Obama could be right, but on one key dimension his bargaining hand will actually be stronger than those of past presidents. China, by continuing to alienate and frustrate western multinational corporations, is also effectively weakening the strongest pro-China lobbies in both Washington and Brussels. As Rachman notes:

Were it not for the power of big business, the relationship between the US and China might have gone sour years ago. There are forces on both sides of the Pacific – Chinese nationalists, American trade unionists, the military establishments of both countries – that would be happy with a more adversarial relationship. For the past generation it has been US multinationals that have made the counter-argument – that a stronger and more prosperous China could be good for America.

So it is ominous, not just for business but for international politics, that corporate America is showing increasing signs of disillusionment with China....

In the past, American business has acted as the single biggest constraint on an anti-Chinese backlash in the US. If companies such as GE, Google and Goldman Sachs qualify their support for China or refuse to speak up, the protectionist bandwagon will gather speed.

The Chinese government, of course, is not stupid. China’s growing confidence in dealing with the US, and the world in general, is still matched by a cautious desire to avoid conflict. At strategic moments, the Chinese government is likely to make tactical concessions – whether on Google or the currency – in an effort to head off a damaging conflict with the US. But with American business and the American public increasingly restive, the risks of miscalculation are growing.

And here I must dissent from Rachman. In some ways, I do think the Chinese government has been pretty stupid over the past year in executing its "Pissing Off As Many Countries As Possible" strategy. China rankled the Europeans over its climate change diplomacy at Copenhagen. For all of Beijing's bluster, it failed to alter U.S. policies on Tibet and Taiwan. It backed down on the Google controversy. It overestimated the power that comes with holding U.S. debt. It alienated South Korea and Japan over its handling of the Cheonan incident, leading to joint naval exercises with the United States -- exactly what China didn't want. It's growing more isolated within the G-20. And, increasingly, no one trusts its economic data.

This doesn't sound like a government that has executed a brilliant grand strategy. It sounds like a country that's benefiting from important structural trends, while frittering away its geopolitical advantages. Alienating key supporters in the country's primary export markets -- and even if Chinese consumption is rising, exports still matter an awful lot to the Chinese economy -- seems counterproductive to China's long-term strategic and economic interests.

Developing.... in a very interesting way.

Analysts are trying to decipher the content and implications of the Senate's financial regulation bill. Noam Scheiber and James Pethokoukis have surprisingly similar takes, in that the bill doesn't directly address the "too big to fail" problem, though Scheiber thinks it does address the problem indirectly. 

Both takes are worth reading. Touching on a point I have made previously, however, I was struck by this Pethokoukis point: 

Wall Street has an enduring PR problem. Yes, big banks are unpopular. But it has gotten so bad that they may not be able to so easily counter their image issues with campaign cash. Getting Wall Street money now has a stigma attached to it like oil and tobacco money. Candidates like Meg Whitman in California and John Kasich are getting hammered for their Wall Street ties. The industry’s continued unpopularity will no doubt spawn further attempts to tax, regulate and restrict the sector.

If the public stays this outraged for this lomg, then Pethokoukis is right. The political problems of finance are becoming so great that we could be talking about a shift in social norms with regard to what is considered "honorable" work.  

Of course, paradoxically, this could serve to increase the salaraies of those still willing to go into finance. As Adam Smith pointed out in Wealth of Nations: 

[T]he wages of labour vary with... the honourableness or dishonourableness of the employment.... Honour makes a great part of the reward of all honourable professions. In point of pecuniary gain, all things considered, they are generally under-recompensed, as I shall endeavour to show by and by. Disgrace has the contrary effect. The trade of a butcher is a brutal and an odious business; but it is in most places more profitable than the greater part of common trades. The most detestable of all employments, that of public executioner, is, in proportion to the quantity of work done, better paid than any common trade whatever.

Question to readers: Will the social stigma against Big Finance persist or fade as the economy bounces back? 

I think it's safe to say that the financial regulation bill has not evolved the way that Simon Johnson predicted last year.  Johnson's thesis was pretty simple -- because of the structural dependence of politicians on financial capital, neither the executive nor the legislative branches would be willing to regulate that sector. 

Johnson wasn't necesaarily wrong in making that prediction -- when in doubt, political scientists follow the money as well.  Still, the regulation that is likely to emerge is clewarly stronger than expected.  In The New Republic, Noam Scheiber has offers his explanation for why: 

Basic political science tells us that, when Congress targets a complex industry with billions of dollars at stake, the legislation should weaken as it moves toward passage. The industry will plead its case with vehemence, while voters will be oblivious to the importance of subtle changes. “Words on the page are not that critical to the public,” one derivatives industry lawyer told me in March, conveying a general truism. But something unforeseen is happening as Congress wraps up its overhaul of Wall Street: Key elements of the bill are getting tougher—in some cases markedly so....

What explains the unexpected success? The financial-services industry had counted on public passion subsiding with time. As the derivatives lawyer told me a few weeks ago, “The current strategy you’re hearing is basically to keep Republicans together till cooler heads prevail.” But cooler heads aren’t prevailing. As the bailed-out banks have surged back to profitability while unemployment hovers near 10 percent, the public has, if anything, grown crankier. By holding the line on a tougher reform package, the White House has been able to ride the anger rather than get trampled by it. In a moment of rising public frustration, the populist argument gains force the longer the debate continues.

So does this contradict basic political science?  Yes and no.  The outcome is still consistent with political science odels -- just not the ones that focus on interest groups.  Any Americanist will tell you that interest group politics matters a lot.  If public opinion is pretty unified around a high-profile issue, however, then there are hard political constraints that block the ability of lobbyists to do that voodoo that they do so well.  And it's pretty clear that the public is thermonuclearly pissed at the financial sector. 

Still, this is pretty surprising, because financial regulation is so friggin' arcane.  Quick, what's a credit default swap?  A collateralized debt obligation?  Are they examples of derivatives or not?  Sure, readers of this blog likely know the answers to those questions, but I guarantee you that 99% of registered voters do not know the answer.  The fact that public pressure and attention is still mobilized on this issue is unusual. 

I think it's tied into the one part of the story that Scheiber failed to mention -- the SEC indictment of Goldman Sachs.  Whether what Goldman did or not was actually illegal is not the issue.  There was a lot of reporting about what Goldman actually did -- and it seems like they weren't acting like  just a couple of bookies.  The indictment changed the political optics of financial regulation and dramatically reduced the utility of lobbying from the financial sector. 

Finreg isn't law yet, and experts like Johnson might argue that their "capture" story works on other dimensions of the regulation.  Still, I don't think this is a case where basic political science failed -- unless you think that poli sci should have predicted the SEC indictment. 

What do you think? 

I've received a bunch of e-mail queries asking me what I think of the Charles Freeman affair.  One could argue that Freeman's actual policy positions got him into trouble.  (When a letter to the Wall Street Journal on his behalf allows that "Chas has controversial political views, not all of which we share," it suggests that something is amiss).  One could also argue pretty persuasively that the Israel Lobby flexed its muscle (as Freeman himself argues in his missive to FP's Laura Rozen). 

In the wake of Freeman's withdrawal, I think everyone is vastly overestimating the influence of outside forces and underestimating the idiosyncracies of Freeman in trying to interpret what the hell happened.  I don't mean his positions -- I mean his relative eagerness to get back into the game.  Freeman's statements on the matter suggests that he was not all that eager to re-enter government life: 

"As those who know me are well aware, I have greatly enjoyed life since retiring from government.  Nothing was further from my mind than a return to public service.  When Admiral Blair asked me to chair the NIC I responded that I understood he was “asking me to give my freedom of speech, my leisure, the greater part of my income, subject myself to the mental colonoscopy of a polygraph, and resume a daily commute to a job with long working hours and a daily ration of political abuse.”  I added that I wondered “whether there wasn’t some sort of downside to this offer.” 

"I wasn't so eager to go back to the government, anyway."

Sometimes these statements are boilerplate, but I don't get that sense from Freeman.  

To put it another way -- if Hillary Clinton had been in the same situation as Freeman, there's no way in hell that she withdraws her name. 

Steve Walt claims that, "this incident reinforces my suspicion that the Democratic Party is in fact a party of wimps."  He's got a point, but I'm not sure it's the one he intended to make.  Freeman is just one of a longer list of policy wonks -- Wendy Sherman, Caroline Atkinson, Robert Gallucci, etc. -- who have either declined or changed their minds about high-ranking postings.  While none of these other names were targeted by the Israel Lobby, they all found the opportunity costs of entering goverment service too onerous.  

Question to readers: Has the vetting process in DC become too absurd, or are Obama's subcabinet candidates too thin-skinned?