Fannie Mae and Freddie Mac (collectively the two largest “GSEs”, or government-sponsored enterprises) have engaged in a broad range of residential mortgage activities for many years.¹ The economic disaster of recent times has drawn considerable attention to Freddie and Fannie, which is not surprising considering the role that the mortgage sector of the U.S. banking system played in that debacle. Together the two institutions hold or pool about $5 trillion worth of mortgages, and so sketchy were their operations that in September 2008 the U.S. government had to bail them out and place them in conservatorship to keep the entire mortgage market from imploding. While the U.S. government has by now been made whole by TARP-assisted banks, it is not clear whether the billions of dollars provided to keep Fannie Mae and Freddie Mac afloat will ever be returned to the U.S. Treasury.

It has not been easy for even well-educated observers to understand the role that Fannie Mae and Freddie Mac have played in our recent economic distress, and how to make sure they never become part of such problems again. By almost any measure, the operation of these GSEs is complex, just as the system in which it operates is fully comprehensible only to those who are experts in knowledge of its inner workings. That is why proposals to reform Freddie and Fannie seem so difficult to construct, explain and implement. Clearly, the Congress has not made much progress in the effort so far.

The Obama Administration provided some clarity by offering policy options in a position paper released in February 2011, Reforming America’s Housing Finance Market: A Report to Congress (the “White House Report”). On August 16, the Washington Post carried a front-page article by Zachary A. Goldfarb that reviewed Obama Administration efforts, revealing that, while the Administration’s economic wizards have not yet decided what plan to put before the President, they are leaning toward a larger role for the Federal government than had been suggested by the February White House Report. According to the article, the approach being pursued by the Administration “could even preserve Fannie Mae and Freddie Mac . . . although under different names and with significant new constraints.”

Names matter, but the character of those constraints matter a great deal more. As the Washington Post article notes, conservatives in general, as well as many economists, believe that any significant government role in the mortgage market is distortionary and likely to contribute to further financial dislocation. It also notes that the Administration has not yet decided whether to pursue this policy development to its final course before the 2012 presidential election, suggesting that it is well aware of the political volatility of the issue.

As detailed as this Washington Post account is, it cannot begin to describe the almost Byzantine complexity of Federal intervention in the housing market. The possibility of coherent thought about the reform of our mortgage GSEs requires one to understand why Fannie and Freddy were established in the first place, how their functions have changed since then, and why they changed. It is not even obvious that we still need these institutions at all. Perhaps whatever useful functions Freddie and Fannie perform could be handled more effectively by other government institutions. If we want effective new policies, we must not shirk from the task of governmental design and redesign. The Administration needs to be bold. Its trajectory so far, unfortunately, suggests retreat.

A Pocket History

Around the time of the Great Depression, mortgages on residential properties were typically short-term loans, with little if any principal paid until maturity. The flaw in this approach to mortgage finance became evident when property values declined precipitously in the 1930s. For many, home loans that were due and payable at maturity could not be refinanced because the amount of mortgage debt exceeded the value of the property. The Great Depression confirmed that Americans needed a more stable system of home mortgage finance.

The New Deal ushered in the first major effort by the Federal government to stabilize mortgage lending through Federal support and regulation. The doyens of the New Deal created two parallel structures that changed the way that residential loans were originated in the United States. For decades, both structures encouraged the financing of home loans without cost to the American taxpayer.

In the first of these new structures, the Federal government became the insurer of home loans. The Federal agency offering the insurance was the Federal Housing Administration, or the FHA, an acronym used to this day despite the fact that the functions of the FHA have been absorbed by the cabinet-level Department of Housing and Urban Development. The FHA, created in 1934, provided insurance to a lender in the event of mortgage default by the borrower. FHA charged a premium for its mortgage insurance that was paid by the lender but borne by the borrower. Loans eligible for insurance met statutory standards designed to keep default risk low.

Second, the Federal government enabled a special type of depository institution—most often known as a thrift or savings-and-loan (S&L) association—to become primarily engaged in the origination of home loans. Through the oversight of various regulatory agencies over the years, the Federal government offered member-paid deposit insurance and reserve credit to participating depository institutions. The S&Ls were willing to pay for this insurance because it allowed them to attract deposits as a secure funding source for home mortgage lending.

During this simpler era of mortgage finance, the Federal government was also instrumental in regulating the interest-rate environment for mortgage lending. Until 1983, the FHA had the authority to set a maximum interest rate for insured mortgages. For approximately the same period, Federal bank regulators effectively controlled a thrift’s cost of funds by regulating the interest rate paid for insured deposits.

The FHA was technically a government-owned insurance company but, by hitting the ground running at the start of the New Deal, it assumed a key standard-setting role in home mortgage lending generally. The FHA developed or implemented borrower underwriting requirements and minimum property standards. It even licensed participating lenders. As an insurer, the FHA collected a vast amount of default and claims experience for underwriting loans that provided insight for future Federal housing initiatives. FHA employees developed the reputation of being hard-nosed actuaries who started the practice of redlining (that is, a blanket denial of credit to anyone located within a struggling, typically minority, geographic location) as a form of underwriting.

Unlike FHA mortgage insurance, which prescribed the type of mortgages that could be insured under the National Housing Act, Federal deposit insurance attached to lender liabilities rather than to those of borrowers. It attached, for example, to certificates of deposit. This was useful because Federal deposit insurance gave thrifts an easy way to attract funds for mortgage lending. Thrift regulators were responsible for the safety and soundness of thrifts, but did not design mortgage lending programs. As a result, thrifts had more flexibility in loan origination than FHA lenders. Thrift officers tended to look and act less like actuaries and more like Jimmy Stewart’s George Bailey character from It’s a Wonderful Life.

Whatever the fragilities of this system, it worked for decades. Compared to the situation before the New Deal, the new Federal role in the mortgage market helped it stabilize and expand. It gave people more confidence in the system, and it is no exaggeration to say that this confidence enabled the housing expansion of the American middle class. Nevertheless, a mid-life legislative makeover for FHA triggered a kind of role reversal for FHA and the thrifts. With the passage of urban renewal legislation in 1949, Congress began to consider how FHA insurance could be used to rejuvenate declining urban areas. On one side, Congress expanded FHA mortgage insurance to include a number of higher-risk initiatives. Congress also enacted programs that for the first time combined FHA insurance with mortgage subsidies for the poor. Many of the new programs required Federal appropriations for continued operations, a radical departure from past years when no taxpayer money whatsoever was involved in the Federal role. As a result of these changes, even the FHA’s profitable insurance programs became less popular due to standard mortgage limits that were often too low to finance entry to a suburban development. By the late 1960s, FHA typically did not cater to the financing of suburban locations and higher income borrowers. Thrifts did.

From the start of the New Deal, most active FHA lenders needed to find a source of funds to originate FHA loans because they were not portfolio lenders; in other words, they did not use their own capital to make loans. The FHA lender was a generally mortgage bank—a company, often with limited capital, that needed to find funds from another institution (such as a bank or insurance company) to make loans. Very early in the life of the FHA, it was clear that FHA lending could be increased if a secondary mortgage facility for the purchase of FHA loans was always available. A secondary market reduces risks for lenders by enlarging the reservoir of money from which the loans flow. (Thrifts, on the other hand, did not need a secondary mortgage market, at least initially, because funds from insured deposits could be aggregated in sufficient volume to fund home loans.)

The congressional response to FHA’s need for a secondary mortgage market was Fannie Mae. Starting its life in 1938 as a Federal agency, Fannie Mae provided a secondary mortgage market for FHA-insured loans by buying loans from FHA lenders. As the Federal government expanded into new mortgage insurance or guarantee programs, Fannie Mae expanded its secondary mortgage market activity in lockstep. For thirty years, Fannie Mae performed the limited but important function of buying and selling Federally insured or guaranteed loans. The FHA and the other Federal agencies that were to assume a role in housing (for example, the Veterans Administration) were responsible for the heavy lifting in setting policy for program eligibility, operations and claims. Fannie Mae, in contrast, conducted purchases and sales of these Federally insured and guaranteed mortgages. In response to market conditions, Fannie Mae served as mortgage owner for periods of time. With a rapid increase in agency mortgage volume after World War II, the funding needs of Fannie Mae continued to increase. Federal funding was the exclusive financing source of Fannie Mae until 1954, when lenders selling mortgages to Fannie Mae were required to buy non-voting common stock in Fannie Mae. This new private source of revenue did not stop Fannie Mae’s need for an ever-larger piece of Uncle Sam’s budgetary pie, however, as its secondary mortgage operations grew.

With the Vietnam War placing increasing demands on the Federal budget, President Johnson decided that Fannie Mae could be converted to a private company as a means to eliminate Fannie Mae’s reliance on Federal funding for operations. This shift was achieved through the Housing and Urban Development Act of 1968 (hereafter the “1968 Act”), which re-engineered Fannie Mae as a Federally chartered corporation. No longer within the Federal government, Fannie Mae became a corporation trading on the New York Stock Exchange. The 1968 Act authorized Fannie Mae to maintain a secondary mortgage market for Federally insured or guaranteed loans with a Federal backstop.

The 1968 Act concurrently provided a Federal charter for another corporation, the Government National Mortgage Association (“Ginnie Mae”), located within HUD. Ginnie Mae continued certain special assistance functions previously performed by Fannie Mae, such as the purchase of below market interest rate FHA multifamily loans that enabled apartment borrowers to offer below market rents to low- and moderate-income tenants. It also became responsible for the development of a program for the guarantee of mortgage-backed securities backed in turn by newly originated FHA/VA loans.

With the spin-off of Fannie Mae from direct Federal control and the creation of Ginnie Mae for FHA/VA securitization, thrifts began to sense the need to change their status as portfolio lenders, and they began to clamor for their own secondary mortgage market facility. Congress responded in 1970 with the creation of the Federal Home Loan Mortgage Corporation (“Freddie Mac”).

The mortgage-backed securities program developed by Ginnie Mae served as a precedent for Freddie Mac’s own program design as it set up shop, and it also became a structural model for the mortgage-backed securities program created by Fannie Mae in the 1980s. Because the FHA had spent decades focused on underwriting and insurance, Ginnie Mae was able to limit its function to securitization. But both Federal agencies had certain similarities. Ginnie Mae as guarantor, like FHA as insurer, did not fund loans. Both the FHA and Ginnie Mae instead provided a Federal backstop for them. The difference between the two resided in the identity of the recipient of the Federal backstop: the FHA insured licensed lenders, nearly always an institutional entity, while Ginnie Mae guaranteed timely payment to any registered certificate holder of its mortgage-backed securities, including individual investors.

In designing a mortgage-backed securities guarantee program, Ginnie Mae made the lender responsible for loan origination and creation of the mortgage-backed securities pool. Ginnie Mae charged a fee for its guarantee, deducted from interest paid by the lender. Ginnie Mae’s guarantee program operated consistently in the black so long as FHA/VA benefits accrued to the lender in the event of loan default, and the lender otherwise complied with program requirements concerning remittance of claim proceeds and so forth. Like the FHA and VA, Ginnie Mae licensed and regulated participating lenders. By attaching the full faith and credit guarantee of the United States Treasury to mortgage-backed securities, Ginnie Mae became the superior placement source for newly originated FHA/VA loans. As a practical matter, the full faith and credit guarantee of Ginnie Mae reduced the role of Fannie Mae as a secondary mortgage facility for FHA/VA loans.

With Ginnie Mae gaining significant market share as an outplacement source for FHA/VA loan originations, Congress began to expand the charter of Fannie Mae. In time, both GSEs received Congressional authority to purchase the same loan menu, although their respective customer bases differed due to historical accident. Fannie Mae’s early customer base tended to be non-depository institutions such as mortgage banks; Freddie Mac’s original customer base was the thrift industry. The two jointly developed a standardized market for conventional loans in the 1970s, similar to the function performed by the FHA in the 1930s for FHA insured loans.

What was slower to change, at least for Fannie Mae as the older GSE, was its capital structure. During its early years as a publicly owned company, Fannie Mae maintained an asset and capital structure closely resembling that of a thrift. Not only were its key assets long-term mortgages, but purchase of these long-term holdings were financed using capital plus short-term debt. In other words, Fannie Mae borrowed short to invest long, and the cumulative difference between the interest rates drove profitability. Thrifts operated under the same financing mismatch for decades, but they did so in a largely regulated environment. Fannie Mae borrowed in an unregulated environment. By the early 1980s, Fannie Mae was borrowing short-term at double-digit interest rates to finance a portfolio of long-term loans at single-digit interest rates. You don’t have to be a banker to see where a situation like that will eventually lead. Fannie Mae avoided a collision course with insolvency by adopting a mortgage-backed security approach similar in structure to the Ginnie Mae program. This enabled it to shift interest rate risk to the security holder because it was not “long” the investment. Fannie Mae simply guaranteed payment under the mortgage-backed security, thus providing a credit back-stop for the security holder should the lender of any pooled mortgage in default fail to make the appropriate advances of principal and interest to the security holder. Once Fannie Mae re-tooled itself from portfolio lender to guarantor in the 1980s, it joined Freddie Mac in finding that rising interest rates could provide a business opportunity.

As high interest rates became part of the financial landscape, many millions of dollars worth of seasoned, low-interest rate loans were stuck in the portfolios of thrifts and other lenders. Each GSE offered a “guarantor” or “swap” program for seasoned loans in response, allowing lenders to swap non-liquid seasoned loans for liquid GSE-guaranteed mortgage-backed securities. Loans eligible for guarantee included seasoned FHA/VA loans, which were traditionally not eligible for guarantee by Ginnie Mae. The GSE swap programs became a popular tool for senior management or investment bankers retained by a portfolio lender to provide exit strategies for large blocks of underwater loans. For each GSE, its swap program provided a large volume of profitable transactional activity; in other words, they made a ton of money off of fees.

With the approach of the 1990s, the increased profitability of the GSEs did not go unnoticed. Fannie Mae topped the list of stock picks among fund managers, including Fidelity Magellan Fund’s Peter Lynch. The increasing depth and sophistication of the financial markets enabled the GSEs to offer an array of mortgage programs to lenders. While the GSEs increasingly offered the same mortgage product line to the same seller/servicers, each had a different regulator. Until 1989, HUD had oversight of Fannie Mae while the Federal Home Loan Bank System maintained responsibility for Freddie Mac.

As the 1980s came to a close, a consensus emerged that these inconsistent regulatory structures made no sense for entities that now performed nearly identical functions. Originally, the structure made sense, but “facts on the ground” that occurred during the 1980s required Congress to revisit the legislation, which it did. At the time, another factor impelled regulatory change of the GSEs: the liquidation of massive numbers of insolvent thrifts. The Depository Institutions Deregulation and Monetary Control Act of 1980 and the Garn-St. Germain Depository Institutions Act of 1982 expanded permitted investments for thrifts. Federally guaranteed certificates of deposit, made attractive to the public under the Acts by allowing thrifts to pay market interest rates and offer increased Federal insurance coverage due to a higher ceiling, funded this high-risk investment spree. What Congress failed to require and the then-thrift regulatory agency, the Federal Home Loan Bank Board, failed to put in place was more thrift capital to provide a cushion for the default of higher risk loans and investments. The legislative and regulatory action–and inaction–of the early 1980s had the effect of giving the already capital-challenged thrift industry more rope to tighten its insolvency noose. By the time Congress responded to the thrift crisis, hundreds of thrifts that were part of Freddie Mac’s customer base were insolvent. The rationale for maintaining Freddie Mac as a captive secondary-market institution for the thrift industry began to disappear as the thrift industry itself shrank.

Enacted with the 1989 thrift clean-up legislation was a temporary regulatory structure for the GSEs, pending further study at the Federal level. At the time, as noted, few questioned the continued need for the GSEs, or for so many of them doing essentially the same thing. Both Freddie and Fannie were at their high point in profitability and Congressional admiration. By comparison, the two original New Deal creations that supported mortgage finance—the FHA and the thrifts—played a more diminished role.

By the time the urge to reform the GSE regulatory structure produced a new approach, it did so by concentrating authority in HUD. The Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (the “1992 Act”) created an independent office within HUD called the Office of Federal Housing Enterprise Oversight with exclusive authority over the financial soundness of the GSEs. In other administrative areas, HUD held general regulatory authority.

Key to HUD’s oversight as “mission regulator” of the GSEs was a detailed set of housing affordability goals requiring the GSEs to lend or purchase specified loan types. HUD determined loan eligibility based on an underserved location or a moderate, low or very low-income borrower. While the GSE housing affordability goals bore some resemblance to old Community Reinvestment Act requirements for depository institutions, in the 1960s the FHA provided subsidies or insurance for borrowers of comparable income or in similar locations. The new arrangement provided no Federal money for the purpose. Congress essentially replaced appropriations to the FHA with housing goals for GSEs as a way to keep the lid on Federal spending for housing programs. In so doing it expected to condition the market by fiat rather than by acting with in. Predictably, the effort had perverse effects.

As a quid pro quo for compliance with the housing affordability goals of the 1992 Act, the GSEs received three benefits. First, the GSEs gained exemption from all state and local taxes except property taxes. Second, they gained exemption from Federal and state securities registration requirements. Third, they gained conditional access to a line of credit from the U.S. Treasury. These benefits helped the GSEs, but once the 1992 Act was firmly in place, Wall Street stopped viewing the GSEs as enablers to bank activity as they had during the swap era of the 1980s. Wall Street now considered the GSEs to be a form of unfair competition, particularly the lower cost of GSE funds based on their implicit Federal guarantee—amounting to something like $2 billion savings per year according to Congressional Budget Office and Treasury Department estimates. Around the same time, the GSEs lost their monopoly on knowledge about mortgage markets. Wall Street had assumed a leading role in the purchase of mortgage assets from Federal thrift liquidators in the early 1990s, developing expertise comparable to the GSEs for a large number of markets.

Despite Wall Street’s growing interest and expertise in the mortgage market, the GSEs could largely determine whether Wall Street would have a bidding opportunity in the first instance for certain specialized types of mortgage origination. The GSE could do this by skewing offer terms to seller/servicers. If a GSE wanted to buy certain mortgages to the exclusion of Wall Street, it could offer more favorable purchase terms given the lower cost of GSE funds. If the GSE did not want to hold a mortgage position, it could skew its offer terms to a guarantee of mortgage-backed securities. Only for guaranteed securities did Wall Street typically have an opportunity to bid. As a result of this practice, some specialized origination types could disappear from the secondary mortgage market for years if the GSE wanted to accumulate a large position in them. What drove the decision by the GSE to purchase or guarantee certain specialized product lines was its own capital limitations or profitability considerations.

The lack of a level playing field between Wall Street and the GSEs was also evident in the secondary market, where each GSE competed against broker-dealers and other institutional investors for its own guaranteed mortgage-backed securities. As the guarantor, the GSE had more information about the underlying loans than it typically made publicly available to competitors. And due to the implicit Federal guarantee of the GSE, the borrowing costs of the GSE to buy the securities were lower than comparable costs for competitors. An institutional investor simply couldn’t compete with the GSE in profitability in executing an identical trade. The GSE had superior information and a lower cost of funds.

Even smaller loan originators began to view the GSEs suspiciously around this time, as GSE business plans for growth began to invade the turf of direct mortgage lending. Like a drug company that discovers direct consumer advertising to patients, Fannie Mae extensively advertised itself as “America’s Housing Partner” in the 1990s; and even a post-conservatorship Freddie Mae continues to assure a jaded American public that “We Make Home Possible.”

As the 1990s progressed, private lenders stopped thinking of GSEs as useful instruments to develop new mortgage products. Instead, they worried that the GSEs would find ways to enter a developing mortgage market so as to eliminate private sector competition and profitability. The GSEs had turned from partners to predators, forcing private lenders to seek opportunity by increased the volume of niche products outside of the plain vanilla GSE and the relatively safe FHA/VA loan menu. The initial product of entry for many private residential mortgage programs was the “jumbo mortgage”—a mortgage with a loan amount in excess of conventional loan limits. The Federal government annually computed conventional loan limits based on median home prices. Maximum loan limits for FHA loans traditionally were lower than conventional loan limits, but the FHA required only a modest down payment. Congress allowed the GSEs to offer higher loan limits for conventional financing. In setting underwriting standards for most conventional loan types, the GSEs required a down payment higher than the FHA and, depending upon the amount of the down payment, private mortgage insurance. But as the 1990s evolved into the Age of the McMansion, living large translated into a jumbo mortgage. Private lenders lined up to offer them.

The whole jumbo business was risky enough, but what remains insufficiently understood is that the idea of a subprime mortgage also came about as a result of private lenders’ desperation at the invasion of their business turf by the GSEs. Subprime loans began in the mid-1990s as a way for borrowers with impaired credit—even those who could not qualify for FHA financing—to become homeowners. Subprime started as a small specialty, not restricted by FHA mortgage limits, but requiring close attention by loan servicers. Few realize that, at least during the 1990s, subprime was on the path of providing housing for poor credit risks without a run-up in default rates. At the time, lenders followed strict servicing procedures for this new higher-risk mortgage product. Risks were controlled by professional discipline. But after a promising start-up, the profitability of subprime attracted many new lenders without regard for servicing discipline. As a mainstream mortgage product, subprime became an unmitigated disaster for borrowers, lenders and investors, as everybody realized after the fact.

By the time the Millennium arrived, an even more basic change had emerged for many of the newer private label residential mortgage products. The down-payment requirement, a staple of mortgage loan underwriting, began to disappear.

Until this point, little or no down payment was possible only under FHA, VA or other government programs designed to expand housing affordability. Default rates under these programs were inevitably higher due to relaxed down-payment requirements, but those who were able to achieve homeownership without default, in the eyes of the programs’ sponsors, made the tradeoff worthwhile. At least in the FHA experience, the total elimination of even a small down-payment by the borrower tripled the risk of default. Under the 1968 Act, FHA insured approximately 400,000 mortgages that loosened the down-payment requirement for the low-income. Even substantial interest subsidies paid directly to the lender on behalf of the borrower could not prevent higher default rates. As the urban laboratory for then-HUD Secretary George Romney, Detroit became an especially noteworthy casualty of the FHA’s new insurance program for the low-income, with about a third of all of its residential property estimated to have been acquired by HUD in the early 1970s.

Around the same time that private label mortgage programs started to eliminate down-payments, the FHA involuntarily repeated its disastrous claim experience for loans without a down-payment. Non-profit organizations attempting to help the low-income become homeowners started combining FHA insurance with a special “gift” down payment from the seller to the buyer through the non-profit as intermediary. In essence, they hijacked the FHA without its permission. FHA claim statistics revealed high default rates for loans originated through non-profit gift down payment programs. The FHA attempted to stop the use of FHA insurance with non-profit gift down payment programs in court, but failed. It was not until the passage of the Housing and Economic Recovery Act of 2008 (the “2008 Act”) that Congress forbade the practice.

More trouble was brewing elsewhere, however. For example, lender initiatives that began in the 1990s to simplify loan underwriting for borrowers morphed into “no underwriting” programs only a few years later for certain new mortgage types. “Alt A” loans became the best example of this. These private label mortgage products chipped away at the established underwriting standards developed by the FHA and the GSEs. At the same time, a steady decline in interest rates for most of the past decade triggered a grab for yield by mortgage investors with little regard for the increased credit risk. As secondary mortgage markets became more sophisticated, in theory—and certainly more willing to assume higher levels of credit risk—the GSEs were no longer a vital intermediary. Lenders could now pool high-risk loans into private label residential mortgage-backed securities for sale in the secondary mortgage market. They did not need the GSEs. The marketability of these pools to yield-hungry bond buyers, not underwriting fundamentals, ended up driving loan originations.

The reckless lending allowed by the new private residential mortgage programs reduced mortgage origination activity by the GSEs and FHA/VA lenders. By 2005, Ginnie Mae and the GSEs issued or guaranteed, in the aggregate, less than half of all mortgage-backed securities. FHA origination activity, subject to a myriad of rules and red tape long associated with FHA, slipped into the single digits.

Many are of the view that the GSEs did not initiate directly the high-risk mortgage lending practices that were at the source of the credit crisis other than activity required by HUD to meet GSE “housing goals.” Lenders and other intermediaries feeding the private mortgage label programs did that, fueled by a secondary mortgage market willing to accept higher risk mortgage product if accompanied by a seductive agency rating. But if one peels the onion a little deeper, it is clear that this risky behavior was stimulated in the first place by the way the GSEs used their advantages to outflank and out-complete the private label residential mortgage sector. They are the ones whose avaricious business practices drove private lenders to increasingly riskier decisions.

Eventually, however, the proverbial chickens came home to roost. As the private label lenders tried to outflank the GSEs through riskier ventures, the GSEs tried to elbow their way into this riskier action as well. Like any publicly traded company, the GSEs needed to maintain growth in earnings. They are the ones who started buying high-risk loans such as Alt A, and started re-guaranteeing little understood private label mortgage-backed securities backed by high-risk loans (a decision with even more disastrous consequences). This is what did them in financially. Though the GSEs were late to purchase and guarantee higher risk mortgage products, they had a lower capital cushion compared to a commercial bank or even an investment bank. They relied on debt to finance their extensive mortgage activities, and the aggregate amount of GSE debt came to exceed the amount of outstanding Treasury debt as the year 2000 approached.

Given the line of credit to the U.S. Treasury available to the GSEs under the 1992 Act, one might think that Congress watched these developments with some anxiety, to rein in such high-wire acts. Congress did no such thing. As the horse left the barn, Congress passed the 2008 Act to strengthen the safety and soundness of GSE regulation and establish procedures for GSE conservatorship. The latter occurred just in the nick of time. Only a few months later, the GSEs were put into conservatorship by the Federal government.

The private label residential mortgage-backed securities market was in tatters as a result of the 2008 credit crisis. By late 2009, the Treasury lifted all dollar limits on its credit line to the GSEs. The FHA, now enabled with temporary but higher mortgage insurance limits, and the GSEs, despite behavior that had largely instigated the whole mess in the first place, became the source once again for most loan originations in the United States. If this sounds unfair, that’s because it is.

The insolvency of the GSEs shows eerie similarities to the thrift insolvencies that occurred almost twenty years earlier. Like the thrifts then, the GSEs operated with low capital, a continued drive to maintain profit growth, and an unlimited borrowing capacity due to a Federal backstop. The key difference between GSEs and the thrifts, perhaps, was the international implication that trumped all legalities governing the GSEs. The shutdown of a thrift was largely a domestic affair, with detailed regulations in place governing the payment of Federally insured deposits. The implicit Federal guarantee of the GSEs, as a marketing tool for the international placement of GSE debt, gave the Treasury no practical option but to backstop GSE debt to avoid an international debt crisis. Of little surprise, the Treasury allowed only GSE debt obligations to receive this favored treatment. The Treasury credit line was not available to pay common or preferred stock dividends of the GSEs. Holders of GSE common or preferred stock were largely wiped out once the GSEs were placed in conservatorship.

Lessons

It is clear that the GSEs at one time engaged in activities similar to those performed by various Federal agencies. They developed underwriting standards for conventional loans similar to the standard-setting function performed by the FHA in an earlier generation. Fannie Mae, for its first thirty years, bought FHA insured mortgages. And the GSEs developed mortgage-backed programs for conventional loans and seasoned FHA/VA loans, after Ginnie Mae—an agency within the Federal government—developed a mortgage-backed securities program for newly originated FHA/VA loans that continues to this day. While the GSEs designed mortgage-backed securities programs responsive to the needs of seller/servicers, the real source of success for GSE-guaranteed mortgage-backed securities (and GSE mortgage purchases, for that matter) was an implicit Federal guarantee that became explicit under duress. Put a little differently, the GSEs did good things. For a time they helped allocate capital more efficiently than markets alone were able to do, and they performed social equity functions that the national ethos, as expressed through the Executive and Legislative branches of government, deemed more important than what markets by themselves would do.

But whenever government distorts markets, for whatever purposes, it skews incentive structures in ways that have unpredictable outcomes. When that skewing coincides with significant changes in the context of market activity—as with globalized finance as it developed in the past quarter century—one compounds uncertainties to the point where one toys with systemic risk. We have paid the price; the question now is what to do about Freddie and Fanny in circumstances dramatically different from those that existed at their creation.

This closer one looks at the history of Federal support for residential mortgage lending the more one sees that the GSEs and various Federal agencies that supposedly regulated them have performed overlapping functions over the years. The only unique feature of each GSE was its off-budget status. But removing an activity from the Federal budget only served to hide how large, and how expensive, it had become when profits were privatized and losses socialized.

Nevertheless, even as the credit crisis was persisting and the GSEs were placed into conservatorship, Congress transformed the FHA from a declining mortgage insurance program to the center of mortgage lending in the United States simply by increasing the loan limits for FHA insured mortgages. Ginnie Mae mortgage-backed securities served as the primary placement source for such increased lending. (Ginnie Mae is on budget, and it has typically run in the black.) Of course, GSE activities are all off budget and as a de facto intervention into the market will predictably retard and distort the recovery of the private mortgage sector.

Given these realities, GSE housing programs considered worthy of Federal support should be moved back on to the Federal budget. Moreover, GSE activity should continue only as a Federal insurance or guarantee program eligible for placement through Ginnie Mae mortgage-backed securities. GSE mortgage assets that do not fall within these parameters should be sold off through an orderly liquidation process not different in essence from the thrift liquidations of the early 1990s. The GSEs need to stay in their lanes and not compete with the private mortgage sector using their government-associated advantages to tilt the playing field to their own advantage. If we do not ensure this line of separation, then we can expect the same destructive race toward the risky to start up all over again in due course. Recent proposals to incrementally reduce the maximum mortgage amounts eligible for GSE securitization or purchase (that is, the “conforming limits”) are a sound way to gradually scale back GSE origination activity given current fragile housing markets.

What Congress hates about the FHA, the VA and similar Federal housing programs is the line item in the Federal budget needed to cover program losses or subsidies. But what the history of the GSEs makes clear is that the implicit Federal guarantee of an off-balance sheet entity is not in the long run a cheaper or more efficient way to support mortgage finance. It is a far, far more costly method.

Mary Martell, a lawyer in Washington, DC, has worked in the housing finance industry for more than three decades.

Unfortunately such toll booths were just given the go-ahead by a Federal appeals court. In a 2-1 decision issued on July 29, the Court of Appeals for the Federal Circuit overruled a lower court’s decision in Association for Molecular Pathology et al. v. U.S. Patent and Trademark Office et al. holding that private companies and researchers could in fact patent genes and DNA sequences. If not overturned by the Supreme Court, this decision could have harmful impacts on patient health and could limit future genomic and scientific discoveries.

To get a better sense of what this case means and where it is going, we must take a step back and look at the history of gene patenting and the case against it. These patents harm patients and researchers, and they go against years of legal precedent holding that one cannot patent a “fact of nature.”

A Brief History of Gene Patents
Most people are shocked to learn that more than 20 percent of the human genome is patented.¹ Corporations and researchers own patents on genes that correlate diseases such as breast cancer, Alzheimer’s and Huntington’s disease, among others. The U.S. Patent and Trademark Office started granting patents on human genes in the 1980s and has since granted more than 4,300 of them.

In May 2009, the American Civil Liberties Union filed a lawsuit against Myriad Genetics, which owned genes (BRCA1 and BRCA2) that correlate with increased risk for breast cancer and ovarian cancer. The ACLU named the Patent Office as a defendant, too, since it had granted these patents. The lawsuit was filed on behalf of researchers, genetic counselors, women patients, cancer survivors, breast cancer and women’s health groups, and scientific associations representing 150,000 geneticists, pathologists and laboratory professionals.

The plaintiffs claimed that genes are “facts of nature” and are therefore not patentable. Additionally, they argued that Myriad’s patents limited patients’ access to potentially life-saving genetic diagnostic tests and prevented researchers from looking at those genes to help their patients or to develop more effective and affordable tests.

The defendants argued that patents are necessary to protect the time and money invested in identifying disease-gene correlations. Myriad Genetics also claimed that its patents are on “isolated” genes and DNA sequences, and this act of isolating a gene from the genome is an inventive step and worthy of a patent. These patents, the industry claims, are necessary to bring expensive tests and products to market and improve patient health.

In March 2010, a Federal judge agreed with the ACLU and decided that DNA sequences are “facts of nature” and are therefore no more patentable than “isolated” gold from a mine or isolating a natural element. Myriad Genetics quickly appealed the decision.

Do Gene Patents Harm Patients and Innovation?
Contrary to industry claims that gene patents are necessary to bring tests and products to market, such patents are actually detrimental to patient health and researcher access to genetic information. Gene patent holders often use their exclusive control to charge excessive fees for diagnostic testing and to prevent other researchers from utilizing specific genes for research.²

Myriad Genetics, for example, charges up to $4,000 for its breast cancer diagnostic test, a price too steep for many patients and health insurance providers. If allowed, labs could run the same genetic test for only a few hundred dollars.³ Myriad also sent cease-and-desist letters to researchers who were looking at the BRCA1/2 genes in their labs, providing diagnostic tests to patients and even providing patients second-opinion tests to confirm the test provided by Myriad.

Gene patents have a detrimental impact on health care and research.⁴ Gene patents can prevent more accurate, affordable and complex diagnostic tests from being developed.⁵ A survey of genetics labs found that 53 percent stopped doing research due to concerns about patented genes,⁶ and there has been a significant decline in published material on patented genetic information.⁷ The future of personalized medicine may be crushed by the weight of gene patent thickets if a company must ask permission from hundreds of patent holders to scan a single patient’s genome.

Gene patents also drive research towards gene-to-disease correlations and away from factors that actually cause disease, such as exposure to toxic chemicals. Most genetic tests offer only an estimate of the chances for developing a particular disease and fail to account for the influence of other genes and environmental factors that cause disease.⁸ The predictive power of the test for BRCA breast cancer mutations is high for persons from families with a history of particular kinds of breast or ovarian cancer, but very low for women without a family history of breast cancer; many women who test positive for a BRCA1 mutation do not get the disease.⁹ Gene patents lock-in our knowledge on these DNA sequences to only their potential correlation to a disease while preventing others from looking at how that gene may interact with other genes or the outside environment.

Are Genes Patentable?
This brings us to the recent verdict, in which the judges were not asked to rule on whether gene patents are harmful but whether they are patentable. In this respect, the appeals court largely agreed with Myriad Genetics when it determined that “isolated DNA” is patentable since it is not found in nature and is the result of a human process. The appellate court did agree with the lower court on one point when it said the act of comparing two DNA sequences (comparing a normal gene with a mutated gene sequence to identify said mutation) was not patentable since it was simply a mental process.

The majority opinion stated that, since isolated DNA is not found in nature, the act of isolating said DNA is an inventive step worthy of a patent. Since the bonds between the specific gene and the rest of the DNA had been broken, they argued, the isolated DNA is no longer a “fact of nature” but a man-made invention.

This view fails to take into account the unique nature of DNA. As Judge Sweet said in the lower court’s decision originally invalidating the BRCA1/2 genes, the “essential characteristic” of DNA is its nucleotide sequence, which is “defined by nature and central to both its biological function within the cell and its utility as a research tool in the lab.”¹⁰ In other words, DNA sequences have naturally evolved over millennia and are important not simply for their chemical construction but for the information they code for. If the genetic code and its information were different than that found in nature, Myriad’s and others’ genetic diagnostic tests would be worthless. That is why Judge Sweet called attempts to define patented genes as novel as merely a “lawyer’s trick.”

The Supreme Court has repeatedly held that facts of nature are not patentable. In the 1980 landmark case of Diamond v. Chakrabarty, the Court explained how patents can be granted to:

Anything under the sun that is made by man . . . . [T]he laws of nature, physical phenomena, and abstract ideas have been held not patentable . . . a new mineral discovered in the earth or a new plant found in the wild is not patentable subject matter. Likewise, Einstein could not patent his celebrated law that E=mc²; nor could Newton have patented the law of gravity. Such discoveries are manifestations of nature, free to all men and reserved exclusively to none.¹¹ [emphasis added]

The dissenting judge in the appeals court agreed that genes are not patentable and that “extracting a gene is akin to snapping a leaf from a tree.” Since the genetic information in isolated genes is identical to that in genes found in nature, and in our bodies, it should be beyond the scope of patentability.

This case points out an interesting problem: We are asking our judges, who are experts in legal jurisprudence, no doubt, to make decisions about basic facts of biology and genetics. The two judges who supported gene patents, Judge Lourie and Judge Moore, studied chemistry and electrical engineering, respectively, before their legal careers.¹² While they must have consulted experts on the issue, we should not delegate the future of genetic research and access to our common genetic heritage to engineers and chemists. Congress, which has constitutional authority over what is patentable, should pass legislation making it clear that genes are “facts of nature” and are therefore unpatentable. Such a law would tear down the thicket of gene patent “toll booths” that are harming patient health and scientific research.

The Next Battleground
This legal battle is far from over, since the case is expected to be decided by the Supreme Court, and no matter which way the court rules, Congress will likely step in.

As Joseph Stiglitz and John Sulston explained in the Wall Street Journal, “the patenting of human genes is wrong as a matter of science and as a matter of economics.” Lets hope Congress keeps with good science, good economics and good public health policy by declaring, once and for all, that genes and DNA sequences are facts of nature, part of our common genetic heritage, and therefore unpatentable.

Eric Hoffman is biotechnology policy campaigner at Friends of the Earth.

²Mildred K. Cho, Preparing for the Millennium: Laboratory Medicine in the 21st Century (American Association for Clinical Chemistry Press, 2d ed., 1998), pp. 47–58.

³Joseph Stiglitz and John Sulston, “The Case Against Gene Patents”,  Wall Street Journal, October 7, 2010.

⁴See Jon F. Merz, Antigone G. Kriss, Debra G. B. Leonard and Mildred K. Cho, “Diagnostic Testing Fails the Test”, Nature, February 7, 2002; David Blumenthal et al., “University-Industry Research Relationships in Biotechnology”, Science, June 13, 1986; David Blumenthal et al., “Withholding Research Results in Academic Life Sciences”, Journal of the American Medical Association, April 16, 1997; David Blumenthal et al., “Data Withholding in Academic Genetics”, Journal of the American Medical Association, January 23/30, 2002.

⁵Gene Patents and Licensing Practices and their Impact on Patient Access to Genetic Tests, report of the Secretary’s Advisory Committee on Genetics, Health and Society.

⁶Mildred K. Cho, Samantha Illangasekare, Meredith A. Weaver, Deborah G. Leonard and Jon F. Merz. “Effects of Patents and Licenses on the Provision of Clinical Genetic Testing Services”, Journal of Molecular Diagnostics (February 2003).

⁷Fiona Murray, Scott Stern, “Do Formal Intellectual Property Rights Hinder the Free Flow of Scientific Knowledge? An Empirical Test of the Anti-Commons Hypothesis,” prepared for the NBER Academic Science and Entrepreneurship Conference (June 2005).

⁸Michael J. Malinowski and Robin J.R. Blatt, “Commercialization of Genetic Testing Services: The FDA, Market Forces, and Biological Tarot Cards”, Tulane Law Review, vol. 71, no. 4 (1997).

⁹Wylie Burke, “Genetic Testing”, New England Journal of Medicine, December 5, 2002.

¹⁰Association for Molecular Pathology et al. v. U.S. Patent and Trademark Office et al., 132, U.S. District Court, Southern District of New York, March 29, 2010.

¹¹Diamond v. Chakrabarty, U.S. Supreme Court, June 16, 1980.

¹²Andrew Cohen, “Like a Leaf From a Tree: The Gene Patent Ruling”, The Atlantic Online, August 1, 2011.

But no routine answers may be possible in a conflict whose shape keeps morphing.  Lately, the Gulf of Aden has become a new hotspot, endangering international shipping’s route to the Suez Canal in a militant vise between the radicals of Yemen and the radicals of Somalia.  The year before September 11, a U.S. warship was bombed and nearly sunk by a skiff in a Yemeni harbor.  Al Qaeda’s new juvenile ideologue, an American named Anwar al-Awlaki, has lately taken up residence in the hills of northern Yemen, answerable only to visiting drones.  Much of Somalia’s territory is in the thrall of the radical Islamic leaders of the al Shabab militia, reducing the formal government of Somalia to a footnote in Mogadishu, even with the presence of African Union peacekeepers.

International real estate values in the Gulf of Aden have also been diminished by the fact that for the last six years, the waterway has been crowded with pirate crews who specialize in raiding container vessels, oil tankers, and yachts, seizing multi-million cargos and holding hostage the crews and passengers. Collaboration between the radicals of al Shabab and the seaside pirates is not a pleasant prospect, and same is true of Islamist cooperation across the Aden Gulf.

For that reason, one should be thrilled by the successful capture of any al Shabab leader who is cooperating with al Qaeda.  This includes the mala fides of a suspect named Ahmed Abdulkadir Warsame, who was seized last April from a fishing skiff bobbing in the waters between Yemen and Somalia.  The capture was made by the U.S.S. Boxer, an amphibious assault ship with a brig and an attitude.  Mr. Warsame was held on board the ship for the next two months while he was interrogated by U.S. intelligence specialists flown in for the purpose.  This is the kind of unconventional operation that counter-terrorism specialists such as John Brennan can brag about.

But there is one problem.  With rope work worthy of any cowpoke, the Obama Administration has captured itself in its own legal lasso.

President Obama came into office pledging that his view of the law would be different from George W. Bush and that he would close the prison facilities at Guantanamo within a year. But governing is always harder than the sound bites of a campaign trail. And though this is no surprise to anyone with radar, there appear to be dangerous leaders of al Qaeda and its affiliates still parked at Guantanamo, against whom there is not sufficient evidence for a criminal conviction by proof beyond a reasonable doubt, either under the restrictive common law rules of evidence in a federal district court or even in a military commission.  And where intelligence was first obtained from a prisoner under unconventional circumstances, the path to trial is even murkier. Thus, President Obama may—like it or not—end up far closer to the policies of George W. Bush than some of his supporters will like.

Yet the difficulty in the handling of Ahmed Abdulkadir Warsame is more basic. The Supreme Court ruled in 2004 that even in the fight against al Qaeda, one basic feature of the 1949 Geneva Conventions has to be observed: namely, the guarantees of common Article 3.  This requires “humane” treatment and the avoidance of “outrages upon personal dignity” including “degrading treatment” as well as trials that include “all the judicial guarantees which are recognized as indispensable by civilized peoples.”  In ruling that the military commissions originally constituted by George Bush did not pass this test, the Supreme Court adopted a rule of soft incorporation—namely, that the most vital norms recognized elsewhere in the Geneva Conventions may  be “read into” common Article 3.

Well, there is one rule that the White House and the Defense Department seem to have overlooked in this inconvenient instance.  It is the rule that flatly forbids holding prisoners captured in war in any locale other than “on land”—a rule with a history that stems from the American Revolution itself, when rebellious Americans caught by the British were interned in the death-dealing  conditions of British prison ships hulking in New York harbor.

While the healthy conditions of the U.S.S Boxer might seem the exception that a situational rule should permit, the norm in the Third Geneva Convention is absolute on its face—namely, as Article 22 states, “prisoners of war may be interned only in premises located on land.” President Obama could now be ready to admit that al Qaeda combatants are not, as such, fully privileged prisoners of war, but rather unlawful combatants.  Nonetheless, the avoidance of incarceration at sea is part of the fundamental protections of Geneva, rather than its privileges.

The canonical commentary on the Geneva Conventions published in 1960, summarizing the evolution of the treaty provisions, is plain spoken.  This long-standing commentary by Jean Pictet, who was the legal director of the International Committee of the Red Cross, states that “the place of internment of prisoners of war may be either in an urban area or in the country, but it must be located on land.  The use of boats, rafts or ‘pontoons’ is therefore absolutely forbidden.” It is more than possible that some American judges would conclude that the extended use of floating prisons (for any longer than is required for a transfer) is inconsistent with the standards of “humane” treatment required by common Article 3—even in the war against al Qaeda, and even if the suspect turns out to be an unlawful combatant.

Thus, it’s hard to see why it was adjudged as convenient to hold the al Shabab leader as a shipboard prisoner for more than two months, with intelligence officials flying in and flying out, rather than transporting him to Guantanamo.  Of course, there are no defense lawyers with writs of habeas corpus congregating on shipboard, and the courts have had little occasion (at least for the last 150 years) to address a writ of habeas corpus to a ship’s captain.  But by the logic of the decision on Guantanamo habeas corpus, a military ship that is not engaged in combat might—if the lingering presence of a prisoner were known—also be the subject of demands for presentment in a federal court.

It is thus another occasion when the pledge to live by the letter of the law has tripped up the Obama administration.  And in this case, it’s ironic that the unyielding presidential pledge to shut down Guantanamo may have been the tripwire for failing another test of humanitarian law.

But then, Davy Jones has not been this Administration’s strong suit. Of all people on earth, Osama bin Laden deserves to sleep with the fishes.  But the Administration did not stop to explain why the provisions of Article 20 of the Second Geneva Convention (requiring ordinary burial “[i]f dead persons are landed”) and Article 17 of the First Geneva Convention (requiring a marked grave that may be found) also did not apply.  There are strong reasons of state and prudence that might tempt one to vary from these texts.  But this requires a pragmatism of the very sort that President Obama has professed to eschew in so many other settings.

Ruth Wedgwood is the Burling professor of international law at Johns Hopkins School of Advanced International Studies, and a member of the Hoover Institution Task Force on Law and National Security.

This was professional business for Judge Goldstone, a South African newly arrived in the international arena after helping to reform the apartheid state’s intelligence agencies through an internationalized investigation that won the gratitude of Nelson Mandela.  The task at the U.N. war crimes tribunal in The Hague—to which he was appointed with high expectations though he was to depart two years later—was to enforce the laws of war and deter future war crimes in the Balkans, as the ragged and bitter conflict continued to rage among Serbs, Croats, and Muslims in Bosnia even after the fighting subsided in Slovenia and Croatia.   Srebrenica was a small market town crowded with Muslim refugees from the surrounding farms and villages who hoped for protection from the Bosnian war’s cruel violence.

A U.N. Security Council resolution proclaimed this Muslim locale, and several others, to be “safe areas” even amidst territory controlled by Bosnian Serb militia.  Many people believed this promise of protection, for the currency of multilateral peacekeeping had not yet been devalued by a decade’s cascade of subsequent failures.  Certainly the idea of a safe area was well established, dating from the rules of war accepted even in the First World War—namely, that an open city should not be bombed or destroyed by enemy troops when it was “undefended,” for what would be the point? In the nineteenth century view, resorting to war was not illegal as such or even exceptional in the carnal pursuit of national ambition, so why should any war suffice as a reason to destroy the urban cultural achievements of a common European civilization and the prerequisites of decent life?  Destruction of an open city would be pointlessly cruel and unrelated to victory in the war.  And of course, civilians had to be treated fairly.

But there were ample warning signs of the potential hazards awaiting the civilians in U.N. safe areas in the Drina Valley.  Despite repeated requests, the U.N. refused to demarcate the outer boundaries of the Srebrenica safe zone, and Bosnian Muslim fighters (in particular, a hard-bitten commander named Naser Oric) used the movable limits of the zone as a platform for launching attacks against nearby Serb villages in the area. And as a further invitation to mischief, the U.N. troop strength in the town was limited. When the use of safe areas was first proposed in the U.N. Security Council as a way to protect refugees “in place”—avoiding the need for them to scatter across Europe—Secretary-General Boutros Boutros-Ghali had estimated that 34,000 troops were needed.  The Security Council (with U.S. concurrence) authorized 7,400.

It was a time of wide-eyed post-Cold War innocence, hard to describe to anyone who did not live through it.  Blue berets were supposed to have power almost as amulets in preventing violence, even without firing a shot.  Who, after all, would dare to defy the world community?  The answer could have been found, of course, in the memoir of Sir Brian Urquhart, a British hero of the Second World War who served with Ralph Bunche in the Congo in 1960.  As a locomotive with U.N. troops aboard steamed towards Katanga, one local tribesman asked, “L’ONU?  C’est quel tribu?” Which tribe is the United Nations?  A fine question, indeed.

But after the end of the Cold War, U.N. romanticism revived, and the petals had not yet left the rose at the time of Bosnia.  The Wilsonian dream of a league of nations was supposed to be fulfilled, this time for real, and the grim realities of low-level insurgencies were forgotten.

And then, of course, the prevailing ethos was Hippocratic, if not hypocritical. U.N. peacekeeping operations were designed to avoid the use of military force, if at all possible, even though field personnel were dressed like soldiers. In the view of the U.N.’s wartime comptrollers, even if a U.N. armored personnel carrier was attacked by a Serb tank, it could respond only while the shooter’s engine was hot, and only if a forward spotter could direct the shot. Too often, U.N. peacekeepers were used as a concierge service, tasked to deliver food to isolated Bosnian villages, but instructed to ignore the carnage in the vicinity.  Sometimes pity moved a multilateral heart to evacuate a few old people. But generally speaking, civilians were not to be rescued, only fed.  The war was likened to a football match where the referee had no stake.  And then there was the issue of numbers—the troops deployed to protect the civilians gathered in the safe zones of Srebrenica, Tuzla, Zepa, Goradze, Sarajevo, and Bihac were far too few. Perhaps Boutros-Ghali should have pulled the plug and announced the mission was unachievable. But he went ahead with a drastically reduced force.

What then happened in Srebrenica was one of the greatest stains on Europe’s moral history since the Soviet interventions in Hungary and Czechoslovakia.  Serb commanders proudly announced that for centuries past, they had saved Europe from the military progress of the “Turks” into Europe—and any Muslim in Srebrenica was to be likened to the Janissary troops of the Ottoman Empire.

After the enclave’s handover, Ratko Mladic, acting as the self-annointed savior of the Bosnian Serbs, loaded the 8,000 captured Srebrenica men and boys onto trucks.  They were driven into the forest, lined up in small groups, and executed by gunfire.  One young man, later tried for several of the murders, reported that his commander had threatened him with death when he hesitated to take part.  Serb bulldozers were used to attempt to mask the mass graves, but the sites remained visible from the air with NATO’s infrared photography.  And it was, indeed, these rancid executions that finally pushed the West to intervene in the Bosnian war in a more robust way, using air power and a Croatian military advance in Western Slavonia to force Serbia to the bargaining table.

For their crimes, Bosnian Serb leader Radovan Karadzic and Serb military commander Ratko Mladic were indicted in the U.N. war crimes tribunal in The Hague.  The peace accord negotiated in Dayton, Ohio in 1995 brought an uneasy end to the fighting in Bosnia, but the ultimate author of ethnic strife in Yugoslavia, federation president Slobodan Milosevic, was allowed to play a starring role at the peace conference in exchange for calling a halt to the war he started.  And even then, the NATO forces that enforced the Dayton peace claimed to have no obligation under the Fourth Geneva Convention to search for war crimes suspects, for fear this would unsettle the locals. There were even reports that some NATO forces chose to inform the Serb authorities of their movements in the wreckage of Bosnian territory to allow the wanted men to stay out of plain sight.

And thus things remained until Milosevic was finally arrested in Serbia following his role in starting another war in Kosovo in 1998.  It took an extraordinarily brave young prime minister of the Serb republic, Zoran Djindjic, to carry out that arrest and ship Milosevic to The Hague for trial.   Despite some fine British and American trial work, the prosecution erred by insisting that all his crimes should be tried in one endless proceeding, and by the end of four years both the presiding judge and the defendant were dead, with no verdict taken.  Karadzic remained at large for another decade, until he was found living near Belgrade disguised as an alternative health worker.  Mladic is the last to be unearthed, and the completion of these two trials is seen as prerequisite to any dignified conclusion to the work of the international criminal tribunal for Yugoslavia.  Meanwhile, Serbia hopes to qualify for a slow-burn track for candidacy in the European Union in order to outgrow its recent past.

Why is this history worth recalling around the Fourth of July? For one, it’s the calendar. Wittingly or not, with his name sounding like a Popeye villain, Serb commander Ratko Mladic chose the season of our national holiday to try to embarrass NATO and steamroll the protected population of Srebrenica. It is one thing to choose your fights, and another to be mocked. The rebirth of a Europe whole and free under NATO’s fifty-year guardianship was not superintended in order to allow genocidal bullying by a local thug.

And secondly, perhaps, Bosnia’s events recall the great virtues of the democratic independence of America gained two centuries ago.  As the offshore balancer, historically aloof from Europe’s wars and remote from the Christian-Turkish confrontation in the crucible of the Balkans, the United States has nonetheless been available when circumstances permit to make a timely difference in the fate of peoples who are at death’s door.  The democratic state created some two centuries ago—through a brash declaration of independence—more than once has given a second wind to an exhausted Europe.  In celebrating our own independence, we are also marking two centuries in which we have served as guardians of the values of the West.  For universities that are just now permitting ROTC to reenter the college yard, it is worth recalling the consanguinity of liberty and valor.

Ruth Wedgwood is the Burling professor of international law at Johns Hopkins School of Advanced International Studies, and a member of the Hoover Institution Task Force on Law and National Security.

The EMU crisis is only one of the several wake-up calls the nations of Europe have received in recent months: disarray over how to react to the Arab Spring, the proliferation of failed states, the widening internal EU divide and growth of internal political unrest, failure of the 2010 (now 2020) competitiveness program and the dramatic criticisms of Europe’s weakness by outgoing Defense Secretary Robert Gates.   These are all signs of deeper problems that have become too obvious to be ignored.

When the euro crisis hit, EU governments appeared to be both surprised and disoriented.  They had apparently come to believe so completely in the inevitability of the euro that   warning signals were ignored or considered too delicate to raise in ECB councils.   German leaders first blamed speculators and hedge funds, before it became clear that Europe had lost control of its monetary policy to new sorts of global market dynamics for which EU structures had not been devised.

What has gone wrong?  Anyone who has worked with the EU over the years is familiar with the problem.  The Rome Treaty in 1957 was intended to overcome war-time conflicts through consensus and stability.  The original EEC was designed for evolution rather than decision; for consultation rather than action.  Its crises were ones of bureaucratic one-upmanship rather than strategic reality.  That part was handled by the United States. With the end of the Cold War, Europe no longer lived in an enclave protected by the US from the winds of change.  But its leaders had forgotten how to think strategically.  They ignored signals of an encroaching outside world, and were unprepared for the new  strategic challenges to their  interests.

For leaders conditioned primarily to maintain internal equilibrium, the natural reaction after 1990 was to do more of the same,  i.e. to work even harder to “deepen and widen” the institutional Europe of the EU.  Just as the world was becoming more multi-facetted and ever faster-moving, the EU turned in upon itself and built an even larger and more unwieldy system of internal consensus which made strategic thought almost impossible.   For example, in the aftermath of the Balkan debacle, Europe did not to seek wider strategic unity with the United States in NATO.  Instead it tried to cope institutionally.  The solution was to build a competing European defense identity, which looked primarily inward.

All this isolated European leaders even more from what was happening elsewhere.  An Obama Administration insider described the goals of the President’s recent trip to Europe as follows:  “There are a lot of forces trying to pull European attention inside. Obama is trying to make the case to both the publics and the leaders  that there are international challenges we can’t draw away from.”

Angela Merkel’s increasingly blunt language may upset some Europeans, but economic necessity has taught the Germans the importance of holding fast to the cutting edge of globalization. Their export industries know better than most how ruthless the process of change has become.  They know that they cannot maintain their position unless they continue to clear an ever higher series of  global benchmarks.  Criticisms of imbalances caused by German policies are not unwarranted.  But the German approach must be viewed against the backdrop of immobility which it sees in the rest of the European Union.

Hopefully global events will make the euro crisis into a spark for change that was coming anyway.  It has given Germany and northern Europeans a justification to push relentlessly for new standards of performance that would have been unthinkable only a few years ago.

Such changes could gradually result in a new foundation for governance of the European Union, based more on performance than on consensus.  The irony is that the European movement was stimulated 60 years ago by a desire to ensure that German power never again dominated the continent.   But increasingly other Europeans are asking the Germans to exert a leadership role.  German leaders are  more fearful of their voters than of EU dynamics.  Decisions are likely to emerge not from the Kanzleramt, but from public debates in the press, the German parties and  from the courts.  As the emotional confrontation over nuclear power demonstrates, a long period of uncertain transition has already begun.

John C. Kornblum was Assistant Secretary of State for European Affairs and Special Envoy to the Balkans from 1995–97, and as U.S. Ambassador to Germany from 1997–2001. This article originally appeared in the German newspaper Handelsblatt on June 20, 2011.

As in the past when I have used this method, I comment on the art of speechwriting as well as the substance of the speech. Sometimes it is possible to keep those tasks separate, but in this speech I find that they tend to blur more than usual because the sloppy use, or curious use, of language elides more than usual on matters of substance. As you might guess from this hint, I did not think that the speech was very good.

There are at least three levels on which one can comment on a presidential speech, or any high-level political speech. The first concerns its big idea, its grand theme—the new and valuable conceptual innovation that gives the speech its purpose. The second level one might call structural—namely, how the speaker, along of course with the listener, gets from beginning to middle to end without losing the logical and emotional flow. And the third level is the more discreet use of language, the sentence-by-sentence and phrase-by-phrase crafting of the language. All three of these levels combine, when they are executed properly, to produce a high-quality speech. If any one of them is messed up, the speech will suffer. If all three are substandard, as is the case here, a disservice to the office will have been done.

Before beginning my annotation, let me talk generally about this speech to try to set out a context for my more specific comments.

The elite press has been buzzing for a week or so that the Administration has been searching for some grand narrative to accomplish a “reset” for the Middle East. There have been New York Times articles, Washington Post articles and other usual suspects who have allowed themselves to be spun by their White House sources. This is par for the course––no big surprise. At least according to these accounts, the President was seeking some way to connect the upheavals of what is generically called the Arab Spring with both the so-called peace process and the epochal events that took place in Abbottabbad on May 2. Personally, I think the choice of the word “reset” was unfortunate. It assumes that the original use of the term, in relation to policy toward Russia, has been a grand success, and I would disagree with that assessment.

But it is not clear to me still why the search for a synoptic understanding of the region has to be the occasion for a presidential speech. I am all for synoptic understandings and for strategic thinking, and if the prospect of the President giving a speech is the only thing that can get this Administration to seek that understanding and do that thinking, then I’m all for it. But of course that is silly. Intelligent leaders do not say everything they think, and high-level government assessments of important developments are not meant to be pondered in public.

This speech, however, comes across precisely as a form of thinking out loud. It contains no grand narrative except, I suppose, for the very general and generic idea that the United States now supports democratic change in the Arab and Muslim worlds. But that is nothing even remotely new, and the “new” policy is not described in any particularly noteworthy way. Moreover, the speech does not link Arab political upheaval, peace process dilemmas and the war on terror in any novel or interesting way either.

The peace process content of the speech comes only at the very end and looks like a tag on. In my view, aside from being awkward in terms of structure, the fact that it is there at all detracts from what the President was really trying to say which, as best I can make out, is that the citizens, the people, of individual Arab states are now taking their destiny into their own hands and that this is on balance a good thing that the United States will support. Since the obsession with Israel has been a chronic distraction from that potentially healthy process, as the President himself noted in one of the speech’s best passages, why is he referring to it? Moreover, as was known before he delivered the speech, he was going to address the AIPAC yearly conference on Sunday, which is a natural occasion to talk about Israel/Palestine and peace process issues. At this point one had to wonder what he would say on Sunday that could be any different from what he said yesterday. And indeed, what he said on Sunday did not differ in any significant way on this point from what he said on Thursday. (More on this matter below.)

I should not be too critical of the President on this point, however, because there were many things he might have said and didn’t say that I’m very glad he did not say about the supposed relationship among these three topics. At the beginning of his Administration, both he and his national security advisor and several others around him were of the view that the Arab-Israeli conflict is the be-all and end-all, the central node, of all problems in the region from political and economic development to the danger of terrorism. At least he did not repeat this erroneous statement about the centrality of the Arab-Israeli conflict. Nor did he repeat his demand that all Israeli settlement activity stop as a precondition for negotiations. Sometimes what is not said is more important than what is.

Nevertheless, the lack of any novelty or creativity in expressing U.S. support for liberal reform leaves the speech sort of loosely hanging in the air. In the very second paragraph of the speech the President refers to “a new chapter” in American diplomacy, begging the question of what the title to that new chapter is or should be. After reading the speech twice and listening to it I still cannot figure out what that chapter tiAs I have done on a few occasions before, I comment here on President Obama’s speech of May 19 by annotating his text. I do this by attaching footnotes to those passages on which I wish to comment. These notes show up best in this electronic medium simply by placing your cursor on the footnote number.

As in the past when I have used this method, I comment on the art of speechwriting as well as the substance of the speech. Sometimes it is possible to keep those tasks separate, but in this speech I find that they tend to blur more than usual because the sloppy use, or curious use, of language elides more than usual on matters of substance. As you might guess from this hint, I did not think that the speech was very good.

There are at least three levels on which one can comment on a presidential speech, or any high-level political speech. The first concerns its big idea, its grand theme—the new and valuable conceptual innovation that gives the speech its purpose. The second level one might call structural—namely, how the speaker, along of course with the listener, gets from beginning to middle to end without losing the logical and emotional flow. And the third level is the more discreet use of language, the sentence-by-sentence and phrase-by-phrase crafting of the language. All three of these levels combine, when they are executed properly, to produce a high-quality speech. If any one of them is messed up, the speech will suffer. If all three are substandard, as is the case here, a disservice to the office will have been done.

Before beginning my annotation, let me talk generally about this speech to try to set out a context for my more specific comments.

The elite press has been buzzing for a week or so that the Administration has been searching for some grand narrative to accomplish a “reset” for the Middle East. There have been New York Times articles, Washington Post articles and other usual suspects who have allowed themselves to be spun by their White House sources. This is par for the course—no big surprise. At least according to these accounts, the President was seeking some way to connect the upheavals of what is generically called the Arab Spring with both the so-called peace process and the epochal events that took place in Abbottabbad on May 2. Personally, I think the choice of the word “reset” was unfortunate. It assumes that the original use of the term, in relation to policy toward Russia, has been a grand success, and I would disagree with that assessment.

But it is not clear to me still why the search for a synoptic understanding of the region has to be the occasion for a presidential speech. I am all for synoptic understandings and for strategic thinking, and if the prospect of the President giving a speech is the only thing that can get this Administration to seek that understanding and do that thinking, then I’m all for it. But of course that is silly. Intelligent leaders do not say everything they think, and high-level government assessments of important developments are not meant to be pondered in public.
This speech, however, comes across precisely as a form of thinking out loud. It contains no grand narrative except, I suppose, for the very general and generic idea that the United States now supports democratic change in the Arab and Muslim worlds. But that is nothing even remotely new, and the “new” policy is not described in any particularly noteworthy way. Moreover, the speech does not link Arab political upheaval, peace process dilemmas and the war on terror in any novel or interesting way either.

The peace process content of the speech comes only at the very end and looks like a tag on. In my view, aside from being awkward in terms of structure, the fact that it is there at all detracts from what the President was really trying to say which, as best I can make out, is that the citizens, the people, of individual Arab states are now taking their destiny into their own hands and that this is on balance a good thing that the United States will support. Since the obsession with Israel has been a chronic distraction from that potentially healthy process, as the President himself noted in one of the speech’s best passages, why is he referring to it? Moreover, as was known before he delivered the speech, he was going to address the AIPAC yearly conference on Sunday, which is a natural occasion to talk about Israel/Palestine and peace process issues. At this point one had to wonder what he would say on Sunday that could be any different from what he said yesterday. And indeed, what he said on Sunday did not differ in any significant way on this point from what he said on Thursday. (More on this matter below.)

I should not be too critical of the President on this point, however, because there were many things he might have said and didn’t say that I’m very glad he did not say about the supposed relationship among these three topics. At the beginning of his Administration, both he and his national security advisor and several others around him were of the view that the Arab-Israeli conflict is the be-all and end-all, the central node, of all problems in the region from political and economic development to the danger of terrorism. At least he did not repeat this erroneous statement about the centrality of the Arab-Israeli conflict. Nor did he repeat his demand that all Israeli settlement activity stop as a precondition for negotiations. Sometimes what is not said is more important than what is.

Nevertheless, the lack of any novelty or creativity in expressing U.S. support for liberal reform leaves the speech sort of loosely hanging in the air. In the very second paragraph of the speech the President refers to “a new chapter” in American diplomacy, begging the question of what the title to that new chapter is or should be. After reading the speech twice and listening to it I still cannot figure out what that chapter title is or might be. The speech offers no take-away line that sums up its essence. There are no nuggets of language, no novel formulations, no insightful typological heuristics to be found anywhere in this long speech.

In short, in my view, the speech was not ready for prime time. It should not have been delivered because it was not finished. It strikes me as a passable first or maybe second draft, but no more than that. As I will demonstrate below, its rough edges are multitudinous.

But of course the speech had been announced, and it is rather embarrassing to cancel a presidential speech after one has been announced. Word to the wise then: Better to finish the assignment before promising the venue. The President of United States can always get an audience. He does not need to announce many days beforehand that he is going to give a speech; he can just do it when he feels ready to do it and, believe me, people will pay attention.

It is important not to give a speech of this kind before its time, and I frankly don’t see what the rush was. The upheavals in the Arab world are ongoing and they will continue going for many weeks and months ahead. If this target is to warn the Palestinians and their supporters off from declaring an independent state at United Nations in September, a plausible target, he had plenty of time to do that and he could’ve done that in a separate speech dealing with Israel/Palestine matters––like the one he gave on Sunday. The May 19 speed could have been delivered at any time over the next several weeks or months. Presidential speeches are not free. They represent a spending of political capital. They raise expectations and mobilize constituencies. So if you are not sure as President that a speech is going to stick to the wall, that it’s going to leave the impression and do the job you intend, it is better not to give it. A speech that doesn’t work is a wasted opportunity, and this is one of them.

Finally, by way of prolegomenon, I find myself forced to speculate about two related and very key questions. Before any speech of this nature is drafted, the principal needs to define the purpose of the speech and the key audience or audiences to which it is being addressed. If you do not know those two things, you are not ready to begin. So when I reverse engineer this speech, as delivered and as it reads, I wonder how those questions were answered. The timing of the speech, late morning, suggests that perhaps the audience in the main is the Arabs. When the President spoke it was late afternoon in the region, perfect timing to get on all the evening news shows in that part of the world. But which Arabs? Did the President mean to address the mobilized pro-democracy or at any rate anti-status quo demonstrators, those with the Facebook accounts and twitter habits? Was he also trying to address the palaces in the region, like that of the Al-Khalifa in Bahrain? If so, what was his purpose in doing so? Was it to get that first constituency to believe that the United States was basically on its side? Was it to actually persuade the leaders of Bahrain to change policy?

Since I was obviously not part of the process that led to the speech, I don’t know the answers to these questions. All I can say is that perhaps young Arabs in Cairo and in the cities of Syria and in the eastern parts of Libya will be cheered by what the President had to say. He has had the reputation, exaggerated in my view, of being a heartless realist for most of his two years in office. But even if this is so, and young middle class protesters across the region now think the United States is their friend (highly unlikely), exactly how is that going to help them? And what if they suspect or hope that somehow, sub rosa, we are going to help them and then we don’t in any practical way? I have difficulty connecting the dots here, between the sentiment expressed and its real world consequences in the present tumultuous context.

Otherwise, for any practical purpose, I don’t see how the speech helps United States at all on the state to state level where policy actually happens. Where things really count, which is to say in the palaces of the Middle East, and by that I mean the upper echelons of leadership in both monarchical and republican states, he has not done himself any favors. He certainly has not endeared himself to the Syrian leadership, to which for the first time he has gotten verbally tough, saying change or leave. But, then again, those words were long overdue, and so have lost a good deal of their impact in the delay. But he has not endeared himself to many of the United States’ most useful associates, and here one must include not only Bahrain, which the President mentioned, but also Saudi Arabia, the UAE, Oman, Qatar and Kuwait. It’s a fair bet that the President has pissed off all of these leaderships, who were anyway none too happy with him over American policy toward Bahrain. Some of these countries have been more helpful than others over the years, and here I note especially the UAE.

I think the worst consequence of the speech concerns Egypt. The speech treats Egypt as though it is already a successful democracy. It is rewarding Egypt with debt forgiveness and discussing all sorts of ways to improve the Egyptian economy as if, again, the main drama in Egypt is over and only details are yet to be worked out. I think this is quite mistaken. Egypt at present has a transitional military government, which differs only from its longtime regime structure, a military government, in its personnel roster and in the fact that in the current situation military officers are wearing their uniforms, whereas in the previous epoch they did not. That isn’t much of a difference. Note too that Egypt’s constitutional referendum of several weeks back suggested that the military is being very cautious about how it builds Egypt’s new political economy. We do not know yet what sort of election Egypt may have in September – – whether it will be constrained or fair, whether the vote count will be honest or fraudulent, or what sort of deals the Army will insist upon before it lets candidates run for high office. To assume in public in the name of the President of the United States that Egypt is already a certified member of the democratic community is to give transitional junta a free pass come September. I just don’t see that this is a wise thing to have done.

Nor has the President necessarily helped himself with either Israelis or Palestinians, neither of which trusts the man anyway after the mess he and he and his Administration made with the peace process during the Administration’s first year. The general language the President used in speaking to Israel and to the Palestinian Authority was quite crisp, strong and right. All that he said is true. But just because something is true doesn’t mean it’s wise to say it. When you look into the details, beyond the general rhetoric, there is plenty for both sides to intensely dislike. From the Israeli point of view, there is a case to be made that the specifics the President mentioned lean away at least a little from the Clinton parameters in favor of the Palestinian position. I will discuss this in detail below. From the Palestinian point of view, the very direct statements about Israel’s legitimacy and right to exist are sure to inflame the souls of Palestinian zealots. The President warned directly against trying to use the United Nations and other external organizations to pressure Israel, implying strongly that the United States would veto any such attempts. He offered nothing new to help either side, however. The result is that, most likely, both this Israeli government and the PA leadership are pissed off even more than they were before the President spoke. And of course, just in passing, he pissed off the Yemeni leadership, the Iranian leadership and, at least by indirection in criticizing the Arab monarchies, also two reasonably close allies – – Jordan and Morocco—who have recently been invited to join the GCC.

Now, there have been some quick commentaries on the speech, out on the Internet within minutes, it seemed, after the President finished his remarks, claiming that he is channeling George W. Bush and that he is for all practical purposes a neocon. Just as President Obama’s reputation as a hardhearted realist was exaggerated before, I think these interpretations are exaggerated now. Alas, as the President illustrated in his Nobel Prize acceptance speech, he is Mr. Half Measure. He cannot decide between the two magnetic poles of the desirable and the necessary. I think the speech illustrates that same characteristic. The events of the day have forced him, in this case, to lean to one side, but there are several elements in the speech—I will point them out below—that show that he is still attempting a balancing act.

I think that is normal and actually heartening. The idea that democracy promotion, for example, did not exist in US foreign policy before George W. Bush is silly. The idea that the second George W. Bush Administration repudiated the idealism of the first is a vast exaggeration of reality. (Condoleezza Rice is often blamed for this, the presumption being that she somehow transformed from being the President’s most trusted and hard-line adviser when she was National Security Advisor to being a mere shell of herself, captured by the relentless pull of Department of State weenie-ism.) The idea that democracy promotion in terms of actual programs and budget had been completely eliminated during the first two years of the Obama administration is also silly. Both of these elements of American policy are always present, even if the rhetoric of the moment seems to elevate one at the expense of the other.

It sometimes strikes me that only those who have never been in government could possibly see this as an either/or choice. Now, if I thought that the President’s remarks on Thursday were the harbinger of the second coming of “the forward strategy for freedom”, I would be worried. I am worried a little, I admit. But Barack Obama is not, at least in foreign policy, the kind of ideological thinker that George W. Bush was. And the deliverables in the speech were far too underwhelming to be scary in any way at all. So I am reserving judgment.

Of course it is wise for the United States to say, and to mean, that it supports the expansion of freedom and liberty in the world – – regrettably in the speech the term “self-determination” is used, of which more below. It is also wise to then go in private to the leaders of the UAE and say something to the effect, “Now don’t get excited; we had to say this and you know why; it doesn’t mean we don’t still love you.” So I do not necessarily think that the speech means that the United States has now chosen to have bad relations with at least ten useful countries in the region. At least I hope that’s not what it means, certainly in a situation where our insinuation that they should change or leave drops into a context in which we have no means to ensure that what might follow them would be any better either for their own people or for U.S. interests.

Some have suggested that politics, that is to say American domestic politics, constitutes the real purpose of the speech. It has to do, some claim, with the start of his 2012 reelection campaign. That is not difficult to believe given how political this President is, but looking at the text of the speech it’s far from obvious how it helps the President politically. As I will note further below, what he had to say about Israel/Palestine may end up hurting him with American Jews, as Republicans try to interpret the speech far beyond its actual content. Many American Jews have already been made uneasy by his policies, so even distorted interpretations may affect them. He cannot have gained very much more by talking about bin Laden’s death; that is already a wasting political asset.

In short, I am not sure what the purpose of the speech was, or what the main audience was intended to be. I suppose one might claim that the speech had as its main purpose to announce the deliverables within it, namely debt forgiveness for Egypt, sanctions on the Syrian leadership already announced the day before, and the other programs the President mentioned. This is not a very persuasive possibility, however, because those deliverables could have been announced in all sorts of ways. A presidential speech has to do more than that, and this one did not. At the very least, a presidential speech must do no harm. It is not even clear to me that this speech gets over even that rather low bar.

I want to thank Hillary Clinton, who has traveled so much these last six months that she is approaching a new landmark – one million frequent flyer miles. I count on Hillary every day, and I believe that she will go down as of the finest Secretaries of State in our nation’s history.¹Every speech has what are called grace notes. They invariably thank the person who introduced the speaker, in this case Secretary of State Hillary Clinton, and they generally say something about the venue or the tradition of the organization doing the hosting. This grace note is striking for its brevity and for its oddity. The President says he thinks that Hillary Clinton will go down as one of the greatest Secretaries of State in the nation’s history, but from context what is the reason adduced for that? That she travels a lot. This is sort of insulting. The use of the phrase “she will go down” also struck me as either a Freudian slip or just an unfortunate turn of phrase. It may mean nothing and it may have been intended to mean nothing but, given the history between these two people, it stopped me short. Anything that stops a listener or a reader short, and thus detracts from the flow of what the speaker is saying, is not good.

The State Department is a fitting venue to mark a new chapter in American diplomacy.²Well, duh. Could the speechwriter not have done better than this? For six months, we have witnessed an extraordinary change take place in the Middle East and North Africa. Square by square; town by town; country by country; the people have risen up to demand their basic human rights.³There is a universe of comment inherent in this choice of words. In the first place, the President decided to use the word “people” very generically. This is very common in American political rhetoric but it is worth pointing out, I think, that the way this word translates into Arabic can be tricky. If indeed the Arabs are his main audience, then this should have mattered to the speechwriters and others who helped prepare the text. But in my experience there is very little attention paid to such matters at high levels of the U..S. government. There are a few words to choose from in Arabic to translate “ people”, and they do not mean the same thing by way of connotation to the listener. The translator might use a word that connotes membership in a tribal group (ahl), or he might use the word that connotes membership in a sectarian group. The way the President is using the word, namely as a synonym for citizens, barely exists at all in the Middle East.
The reference to human rights is also problematical. Westerners tend to think that there are such things as universal human rights. They think that because they are children of the Enlightenment, and because the Enlightenment ultimately takes as its source for such judgments the Judeo-Christian tradition. But the Western idea of universal rights, at least as encoded in the Universal Declaration of Human Rights in 1945, does not sit simply or easily on all cultures. A good example, which arises later in the speech, concerns gender equality. I think I can assure the President that at least some of the men out protesting in Syria against the Assad regime do not consider gender equality to be among their demands. So the statement actually hovers somewhere between misleading and untrue. None of this hurts the speech as it comes across to an American audience because most members of that audience have no idea about any of this. Two leaders have stepped aside. More may follow. And though these countries may be a great distance from our shores, we know that our own future is bound to this region by the forces of economics and security; history and faith.⁴I would have cut this last sentence in this paragraph. I think the paragraph ends well enough without it, and I don’t think the American people need reminding that we have interests of various sorts in the Middle East. I think the paragraph is weaker for that ending that it would have been without the sentence.

Today, I would like to talk about this change—the forces that are driving it, and how we can respond in a way that advances our values and strengthens our security.⁵The sentence would’ve sounded better if it had read “in ways that advance our values and strengthen our security.” If you pluralize “way” to allow you to remove the letter “s” from the end of advance and strengthen it makes the sentence more musical and also easier to read. It is also technically more accurate, because there isn’t just one way to approach these challenges but several ways. Mistakes like this suggest to me, as I already have intimated above, that this speech was rushed and is not really finished. Already, we have done much to shift our foreign policy following a decade defined by two costly conflicts. After years of war in Iraq, we have removed 100,000 American troops and ended our combat mission there.⁶This is a fundamentally misleading and ungenerous remark. The Obama Administration has done nothing different in essence about the endgame in Iraq that its predecessor had not planned to do. The drawdown of combat troops was Bush Administration policy too. The President is trying to take credit for something he did not initiate, for a policy he essentially inherited. Perhaps the President is trying to balance off against the impression that his policies in what used to be called the war on terror have been remarkably consistent with those of his predecessor, because those impressions are true—and it is good that they are true. In policy area after policy area—and I don’t need to name them because they are well known—this Administration came into office asserting that it would change this and that supposedly egregious policy and then learned that it either could not or should not do so. Nevertheless, anyone who was fooled by this statement about Iraq policy is either hopelessly partisan or simply has not been paying attention. In Afghanistan, we have broken the Taliban’s momentum⁷This is a debatable statement, to say the least., and this July we will begin to bring our troops home and continue a transition to Afghan lead.⁸The language here, “a transition to Afghan lead”, is very clumsy. It sounds like the sort of language military types would use in a memorandum. Again, to me it is evidence that this text is just a first or second draft and that it is not finished, not polished, not really of presidential quality. And after years of war against al Qaeda and its affiliates, we have dealt al Qaeda a huge blow⁹This is another debatable statement. On balance, I agree that killing bin Laden is important, but that interpretation is not self-evident and it is hotly debated in the expert community both here and abroad. I think that as a speechwriter I would have tried to express this in a way that did not lay open a disagreement that I was not prepared to spend time closing. by killing its leader—Osama bin Laden.

Bin Laden was no martyr.¹⁰A remarkably strange statement. One does not say that someone “was” a martyr. A martyr is by definition someone who is dead, so the only way to be a martyr is in the present tense in the eyes of living others. I suppose one could say that someone who was killed a long time ago, and who used to be venerated as a martyr, “was” a martyr, but it makes no sense to say this about bin Laden. It could have been, I thought maybe, that the President misread his text, so I checked against the official version, and no, he did not misread it. He read it as it was written. How weird. He was a mass murderer who offered a message of hate—an insistence that Muslims had to take up arms against the West, and that violence against men, women and children was the only path to change. He rejected democracy and individual rights for Muslims in favor of violent extremism¹¹Let me preface my remark here by simply noting that I am not and never have been a fan of Osama bin Laden. But the statement is condescending to the point of offense. In the first place, of course Osama bin Laden rejected what the President calls individual rights for Muslims. No Muslim cleric (which bin Laden was not) places the Western concept of individual rights above the welfare of the community (maslaha al-umma). This is a category error which has as its source a deep ignorance of the cultural differences between the West and the Islamic world. This sort of thing happens all the time. It happened repeatedly during the Bush Administration and it is happening all over again now. I have come to believe that bridging this gap is hopeless. But more important for now, the President insinuates that Osama bin Laden’s goal, juxtaposed against democracy, was violent extremism. That is a nonsensical statement. Violent extremism was his means, not his goal. As everyone knows, his goal was to create a unified caliphate that Muslims would then employ to spread their presumably true religion across the globe. Islam is a universalist religion, like Christianity, and like Christianity it is an evangelical religion. Bin Laden was not in fact a nihilist, employing violence for the sake of violence. He did have a purpose, warped and fancifully romantic as it was. To misunderstand or misrepresent this is really to belittle ourselves, not bin Laden.; his agenda focused on what he could destroy—not what he could build.¹²This of course is true, and it is one reason why there have been so many defectors from al-Qaeda over the years. At least some of its sympathizers came to realize that bin Laden had no plan that could be remotely described as a social or economic program for his brand of Islamic politics. This is one of the reasons that he had already become almost obsolete as the symbol of a cause by the time of his death. That doesn’t mean it was pointless to kill him., however. Indeed, we should have done it a long time ago.

Bin Laden and his murderous vision won some adherents. But even before his death, al Qaeda was losing its struggle for relevance, as the overwhelming majority of people saw that the slaughter of innocents did not answer their cries for a better life. By the time we found bin Laden, al Qaeda’s agenda had come to be seen by the vast majority of the region as a dead end, and the people of the Middle East and North Africa had taken their future into their own hands.¹³Yes, as I just said. But here in the speech is where the President, if he or his advisers had had any conceptual innovation to put forth, is where that idea belongs. Simply to say that the people of the Middle East and North Africa have taken the future into their own hands is, frankly, pretty lame. First of all, it is not true. Not all the people of this region have risen up. Nothing much is happening Algeria, for example, and nothing at all is happening in Sudan – – a country which has plenty of local problems of its own. But second, this was the place to actually lay down some thinking, and there is none. Just to give one example of how this might have been done, as a result of what has been happening over the past several months, divisions among groups of countries in the region are now far more clear than they were in the past. In the past, the region could be said to have been divided between traditional monarchies of one stripe or another and republican governments that in almost every case had devolved to military or police states, again of one stripe or another. This is the simple typology, for example, that informed Malcolm Kerr’s classic book on the Arab Cold War. Now things really have changed. We have a group of conservative monarchies, some of which are farther along on the road to political pluralism than others. But these define a coherent group and within that group, with the exception of Bahrain because of its peculiar sectarian balance, there have not been serious uprisings. Second, we have a small group of non-monarchical authoritarian regimes that have not yet been challenged by their peoples, and that includes Sudan, Algeria for all practical purposes, and Mauritania as an outlier (in more ways than one). Third, we have a group of countries now actively assaulting their own people: Libya, Syria, and Yemen. Two of these countries have not been American friends or associates for a very long time, and the third of these, like Pakistan, has been playing a necessary double game – – but we have been playing, too, for lack of any better available alternative. And then last, fourth, we have at least three countries that have made it to the other side or at least have a good chance of doing so. That group includes, first and foremost, Tunisia, which has the best chance of ending up some kind of recognizable democracy. It also includes Egypt, and of course it includes Iraq. Between these three countries live more than half of all Arabs, so this is hardly an insignificant group. (As usual, no one knows where to put Lebanon because it is sui generis.) Now this is hardly the only way to think about the region these days, a typology that Amir Taheri referred to rather creatively as the Broken Crescent, or something very similar. That is the kind of concept, that is the kind of language nugget that one of the President’s speechwriters should have been able to come up with. And didn’t. So we’re left with this hopelessly vague statement about the region as a whole that adds absolutely nothing to our stock of knowledge or our way of understanding what is happening.

That story of self-determination began six months ago in Tunisia. On December 17, a young vendor named Mohammed Bouazizi was devastated when a police officer confiscated his cart. This was not unique. It is the same kind of humiliation that takes place every day in many parts of the world—the relentless tyranny of governments that deny their citizens dignity.¹⁴Two remarks on the sentence. First, there is a difference between a government that is authoritarian, that is despotic and that is tyrannous. But American politicians, whether they be Presidents or Congressman or what-have-you, seem never to make any distinctions among the nondemocratic regimes in the region or, for that matter, in the world. They lump them all together as though they were the same—as though very nasty police states like the old regime in Iraq and the one today and Syria are essentially the same as the soft authoritarianism of Jordan or of Oman. No one should be surprised that this, because there is a similar tendency to think that all democracies are the same, whether they are parliamentary or presidential or partial or firmly institutionalized or again what-have-you. Americans are Manichaean at heart, incapable of recognizing more than two sides of anything, so there is nothing the least bit surprising in this. Of course, I do not expect a political speech to be didactic. That would be asking too much, and it would be ineffective as a political speech in any event. But I do still hope, sometimes, for little more subtlety and a little less mindlessness when other parts of the world are described for American audiences. I probably hope in vain. Second, it was a good idea to use the word dignity here. That word resonates loudly and well in translation. It is a concept, like justice, that makes deep sense to Arabs. Only this time, something different happened. After local officials refused to hear his complaint, this young man who had never been particularly active in politics went to the headquarters of the provincial government, doused himself in fuel, and lit himself on fire.

Sometimes, in the course of history, the actions of ordinary citizens spark movements for change because they speak to a longing for freedom that has built up for years. In America, think of the defiance of those patriots in Boston who refused to pay taxes to a King,¹⁵This is an amazing remark for any educated Americans to make. The people who protested in Boston back in 1773 were not protesting the fact that they were asked to pay taxes to a king. They had been paying taxes to a king for a long time, and never thought anything of it. The problem here was that the taxes that were being assessed were being assessed without reference to local authority. Not that Britain back then was a democracy, but it did have both the rule of law and means of political accountability. The colonists were sensitive to the fact that they were involved in a social contract and that they had rights as Englishmen. Now, just incidentally, the President’s use of the word king here probably was not intended as a direct insult or affront to the Saudi monarchy, but that is almost certainly how it will be read. So I don’t know if this sentence was written simply out of ignorance or if it was meant to be a poke in the chest in Riyadh. It is, either way, a real corker. or the dignity of Rosa Parks as she sat courageously in her seat. So it was in Tunisia, as that vendor’s act of desperation tapped into the frustration felt throughout the country. Hundreds of protesters took to the streets, then thousands. And in the face of batons and sometimes bullets, they refused to go home—day after day, week after week, until a dictator of more than two decades finally left power.

The story of this Revolution, and the ones that followed, should not have come as a surprise. The nations of the Middle East and North Africa won¹⁶The use of the word “won” is interesting here. I am sure that the speechwriter never gave it a second thought, but it is not actually an accurate word to describe what happened. Some countries won their independence, like Algeria against France. Some countries, like Saudi Arabia, were never colonized in the first place. Saudi Arabia in its current territorial configuration is the result of an aggression against the Hejaz in 1924 and, in a minor key, another aggression against Yemen for the province of Asir a few years later. As for most of the Gulf sheikdoms, they were given independence by Britain when it decided to withdraw East of Suez in the early 1970s. The United Arab Emirates, and there are seven of them, were cobbled together by the British and called the Trucial States. They did not want the British to leave; they did not want to become an independent country. They liked things the way they were. But the British left anyway. So what exactly did they win? To say that Egypt or Iraq or Syria won independence is also rather excessively simplified. As those who know their history understand, these political entities became more or less sovereign in a process that had to do with the devolution of the British and French empires and the advent of the Second World War. Again, one does not expect a political speech to be didactic. A little more care with vocabulary would be nice once in a while, however, because it would prevent those who do know the history of the area, and that includes a great number of those who live in the area, from wondering whether American political leaders are really as ignorant as they sound. their independence long ago, but in too many places their people did not. In too many countries, power has been concentrated in the hands of the few.¹⁷Again, an unfortunate remark. Of course we know what the President means, and we know what the speechwriter tried to do, but the fact of the matter is that political power always rests in the hands of a few. Democracy is not synonymous with plebiscite. The difference between a democracy and political systems that are not democratic is not that power itself rests in the hands of a few people, it is how those few people come to acquire and how they exert power. It is about legitimacy and authority and accountability, not about numbers. In too many countries, a citizen like that young vendor had nowhere to turn—no honest judiciary to hear his case; no independent media to give him voice; no credible political party to represent his views; no free and fair election where he could choose his leader.

This lack of self determination—the chance to make of your life what you will—has applied to the region’s economy as well.¹⁸As I mentioned above, I find the use of this term self-determination very odd in this context. That term is most commonly associated with group phenomena. It is a Wilsonian piece of vocabulary in its most common uses. I do not recall ever having heard it used before as a synonym for two terms very common in the history of American political speech, namely liberty and freedom. Why a speechwriter or a President would conclude that there is something wrong with the word liberty or the word freedom I simply do not know. Maybe the word freedom was avoided so that Obama would not be accused of parroting Bush. But why not use the word liberty, which is actually what the sentence is talking about? Yes, some nations are blessed with wealth in oil and gas, and that has led to pockets of prosperity. But in a global economy based on knowledge and innovation, no development strategy can be based solely upon what comes out of the ground.¹⁹I apologize for being so pedantic, but again this is just not a very good sentence. In the first place, only parts of the global economy are knowledge-based economies so it would have been better to have said, “As the global economy becomes increasingly based on knowledge and innovation…” And then it makes no sense to use as the noun “development strategy.” It is not a development strategy we’re talking about here, but an actual economy. This is just sloppy expression, again, typical of an early draft. Nor can people reach their potential when you cannot start a business without paying a bribe.

In the face of these challenges, too many leaders in the region tried to direct their people’s grievances elsewhere. The West was blamed as the source of all ills, a half century after the end of colonialism. Antagonism toward Israel became the only acceptable outlet for political expression. Divisions of tribe, ethnicity and religious sect were manipulated as a means of holding on to power, or taking it away from somebody else.²⁰This is the first paragraph in the speech with which I have absolutely no quarrel.

But the events of the past six months show us that strategies of repression and diversion won’t work anymore. Satellite television and the Internet provide a window into the wider world – a world of astonishing progress in places like India, Indonesia and Brazil. Cell phones and social networks allow young people to connect and organize like never before. A new generation has emerged. And their voices tell us that change cannot be denied.²¹I find it interesting that the President seems to be endowing technology with causal power. This may prove to be correct, at least in part. But it seems to me a very desiccated theory of political change. Is the President saying that had it not been for this technology no level of repression, no level of heroism, no other way for young people to develop political ideas would’ve been enough to stimulate protest? This is the logical extension of the remark, and I find it improbable.

In Cairo, we heard the voice of the young mother who said, “It’s like I can finally breathe fresh air for the first time.”

In Sanaa, we heard the students who chanted, “The night must come to an end.”

In Benghazi, we heard the engineer who said, “Our words are free now. It’s a feeling you can’t explain.”

In Damascus, we heard the young man who said, “After the first yelling, the first shout, you feel dignity.”²²We speechwriters, or recovering speechwriters in my case, call these last four remarks concretizing. This has become a very popular trope in American speechmaking in recent decades. I think it got its greatest boost during the Reagan Administration, and because President Reagan was so good at this sort of thing subsequent speechwriting teams figured it would work for their principals too. I am not particularly fond of the technique; if you’re not really careful it comes out just sounding cheesy. In this case I don’t mind it so much, but later on in the speech the President does it again in the context of Israelis and Palestinians. And there it does come off cheesy to me. I guess the rule is, you can do this once in a speech and get away with it, but more than once is probably not a good idea.

Those shouts of human dignity are being heard across the region. And through the moral force of non-violence, the people of the region have achieved more change in six months than terrorists have accomplished in decades.²³I would not have said this in this fashion, because it implies that although terrorists accomplished less than nonviolent protesters, they nevertheless did accomplish something. I don’t think the President meant to say that, but that’s what he said. He should not have.

Of course, change of this magnitude does not come easily. In our day and age—a time of 24 hour news cycles, and constant communication—people expect the transformation of the region to be resolved in a matter of weeks. But it will be years before this story reaches its end. Along the way, there will be good days, and bad days. In some places, change will be swift; in others, gradual. And as we have seen, calls for change may give way to fierce contests for power.²⁴I’m glad the President said this, obvious as it is. This remark also helps him set up his later remark that long-term and short-term aims do not always match. This is one reason why I said above that President Obama is neither completely a sudden idealist now anymore that he was ever completely a realist before.

The question before us is what role America will play as this story unfolds. For decades, the United States has pursued a set of core interests in the region: countering terrorism and stopping the spread of nuclear weapons; securing the free flow of commerce, and safe-guarding the security of the region; standing up for Israel’s security and pursuing Arab-Israeli peace.²⁵This paragraph marks a transition into the next section of the speech. So far the President has described what has been going on in the region although, in my opinion, not particularly successfully. Now comes what this has to do with United States. There’s nothing the matter with this transition. It might have been done a bit more elegantly, but it works. I do think, however, that the order in which American goals are stated leaves something to be desired. I would’ve started with the free flow of commerce and safeguarding the security of the region, then moved to talking about not just Israeli security but the security of all American allies – – we did after all go to war to liberate Iraq. And I would’ve mentioned the terrorism and counter proliferation set third not only because it is the newest in terms of chronology but also because it would’ve been helpful as a segue had the President decided to discuss the implications of Middle Eastern democracy for regional and international security. That would’ve been an obvious thing to do and I am somewhat puzzled that no attempt whatsoever was made here to connect the potential future of a democratic Arab world with the security implications for the region and beyond. When the President was said in advance of the speech to be in search of a new concept, a new way to conceive what has been going on as whole, this is what I thought he meant to discuss at the least. He does suggest below that there is a connection between repression in the region and threats to the United States. This is very Bush Administration-like. But there is nothing about the implications of political pluralism within the region for relations among the states of the region. I find this omission very curious.

We will continue to do these things, with the firm belief that America’s interests are not hostile to peoples’ hopes; they are essential to them. We believe that no one benefits from a nuclear arms race in the region, or al Qaeda’s brutal attacks. People everywhere would see their economies crippled by a cut off in energy supplies.²⁶This would’ve been a good opportunity to make the point that when energy prices go up it actually hurts poor people more than it hurts the world’s affluent people. It might’ve been an opportunity too to make just a passing comment indicating an understanding that changes in American energy policy are relevant here, but I can see why a speechwriter would not have wanted to broaden the subject matter, fearing too much diffusion. As we did in the Gulf War, we will not tolerate aggression across borders, and we will keep our commitments to friends and partners.

Yet we must acknowledge that a strategy based solely upon the narrow pursuit of these interests will not fill an empty stomach or allow someone to speak their mind.²⁷I do not think that these three interests are reasonably defined as narrow. The President just said that American interests fulfilled are good for everybody, or nearly everybody, and he was right. A well governed whole, and a peaceful and prosperous international order, are not narrow goals and they do not lack a very significant moral component. The fact of the matter is that a well ordered international economic system based on open trade does too fill stomachs. Let me say also in passing that the word “speak” is used twice out of seven words spanning two sentences, and it is used in different contexts—that is awkward and is further sign of a speech draft not yet polished. Moreover, failure to speak to the broader aspirations of ordinary people²⁸This reference to speaking to the aspirations of ordinary people is the best evidence I have of the purpose of the speech, that he wishes to go over the heads of the region’s rulers and talk to the people, as he very generically understands the use of the word people. There is a case to be made for this. This is what many observers have been meaning for a while now by the phrase transformational diplomacy, the idea that just engaging with other countries through the diplomatic process as traditionally conceived, and through civil society and other nongovernmental contacts on the other end, with nothing in between, no longer suffices as a way of operating in a far more complex and integrated world. I agree with that. But as I suggested earlier, we have to ask the question: What does getting the street in the Middle East on your side actually accomplish in terms of policy? It is not as though any country in the region is going to turn out to be a plebicitory democracy. There will always be elites to deal with, and we will never be better at manipulating popular opinion in other countries than the leaders of those countries are likely to be most of the time. So it sounds very noble to talk directly to the people of other countries, and as I say there is a place for it. But I don’t think it’s obvious how we connect the dots to achieve discrete policy outcomes that we wish to achieve. will only feed the suspicion that has festered for years that the United States pursues our own interests at their expense. Given that this mistrust runs both ways—as Americans have been seared by hostage taking, violent rhetoric, and terrorist attacks that have killed thousands of our citizens—a failure to change our approach threatens a deepening spiral of division between the United States and Muslim communities.²⁹Of all of the unfortunate locutions in this speech, this sentence contains the worst one of all. This reference to Islam, to “Muslim communities”, is just flat a bad idea. The President’s Cairo speech of 2009, which he mentions just below, was suffused with pan-Islamic assumptions. I did not particularly like it then, but it makes no sense at all now to conflate what has been going on in individual countries of the region into something that has to do with Islam or with Muslims. In Egypt it is about Egyptians, and that includes Christians as well as Muslims in Egypt. In Tunisia it is about Tunisians, and in Yemen it is about Yemenis and so on. Of course, religion in the form of political theology plays a major role in all these countries, as it also does in ours, however dimly aware of that fact we may be. But it is not the job of the President of the United States to encourage that. The less we try to turn our engagement with the Middle East into being about religion the better. A most unfortunate choice of words.

That’s why, two years ago in Cairo, I began to broaden our engagement based upon mutual interests and mutual respect. I believed then – and I believe now – that we have a stake not just in the stability of nations, but in the self determination of individuals.³⁰Yet again this weird phrase. Why could the President not have said that we care about the freedom or the liberty of individuals? The status quo is not sustainable. Societies held together by fear and repression may offer the illusion of stability for a time, but they are built upon fault lines that will eventually tear asunder.³¹Here there is an unwarranted assumption about the nature of political economy in the Arab world. I do not want to spend a lot of time talking about this, or we could be here for days. But I want just to point out that the formula for legitimacy of government is not the same from culture to culture. In some Arab countries fear and repression are manifest, no doubt about it. But it is a leap from that fact to assume that because large numbers of Arabs do not like their governments it means ipso facto that they are illegitimate in their eyes. That makes sense to Americans, but it doesn’t necessarily make sense to Arabs. The way one becomes a leader in that culture is to assemble and master a network of personal relationships, the character of which is best described as an interlocking web of ongoing unbalanced indebtedness. Anyone who will climb to the pinnacle of power must get there this way. Even when there are elections in Arab countries they are not actual decision points as they are in Western democracy; they are acclamations of facts already in being. So the idea the President is asserting here, that fear and repression are the only reasons why Arabs do not revolt, or have not revolted in the past, is simply not true. For good historical reasons, Arabs fear social chaos. They are prepared to put up with even a very unpleasant order for a long time rather than risk anarchy. As I say, much more could be discussed on this point, but I think it’s enough for the purpose at hand.

So we face an historic opportunity. We have embraced the chance to show that America values the dignity of the street vendor in Tunisia more than the raw power of the dictator. There must be no doubt that the United States of America welcomes change that advances self-determination and opportunity. Yes, there will be perils that accompany this moment of promise. But after decades of accepting the world as it is in the region, we have a chance to pursue the world as it should be.³²An absolutely breathtaking remark. Those decades during which we “accepted the world as it is” obviously don’t include the period from October 2001 to January 2009—nearly a decade. Interesting that the President does not see fit to even mention any of that.

As we do, we must proceed with a sense of humility. It is not America that put people into the streets of Tunis and Cairo—it was the people themselves who launched these movements, and must determine their outcome. Not every country will follow our particular form of representative democracy, and there will be times when our short term interests do not align perfectly with our long term vision of the region.³³Here is where the President leaves himself an out to act like a realist when he needs to. I’m glad he said this. But we can—and will—speak out for a set of core principles—principles that have guided our response to the events over the past six months:

The United States opposes the use of violence and repression against the people of the region.³⁴A very broad and general statement. One supposes that the President means to refer to domestic political affairs, but the sentence could be interpreted more broadly than that. It could be used by some to refer to Israeli occupation of the West Bank or military action against terrorists in Gaza. Maybe there is a reason the statement is so broad but I don’t know what it is. There is also a possibility that the rebels in Libya might feel they need some point to use violence against tribal elements in the west of the country that do not support them. In the context of a civil war will the United States also oppose all use of violence against people? That sounds rather quixotic.

We support a set of universal rights. Those rights include free speech; the freedom of peaceful assembly; freedom of religion; equality for men and women under the rule of law; and the right to choose your own leaders – whether you live in Baghdad or Damascus; Sanaa or Tehran.³⁵This comes up again later, but I would’ve left out this business about gender equality. And of course the President means rights which we think are universal, but which as a matter of social science we ought to know are not, or at least not yet. I will explain in a bit more detail below why I would’ve left out the gender equality remark.

And finally, we support political and economic reform in the Middle East and North Africa that can meet the legitimate aspirations of ordinary people throughout the region.

Our support for these principles is not a secondary interest– today I am making it clear that it is a top priority that must be translated into concrete actions, and supported by all of the diplomatic, economic and strategic tools at our disposal.³⁶Okay, the President is trying to stress something here. He’s trying to say that political reform is now a top priority matter. But he says it as though it is something new, when it is clearly what the Bush Administration tried also to make a high priority. The President doesn’t even mention the forward strategy for freedom, or the Middle East Partnership Initiative, or any of the programs—and there were dozens of them and many are ongoing even his Administration—that were put together for precisely this purpose. This is what led some early commentators to claim that Obama is really a neoconservative. As I have already suggested, this does not start in the Bush Administration either. It goes back a very long way in American history, certainly at least to the Franklin Delano Roosevelt Administrations, which determined that democratic outcomes in Germany, Japan, and Italy had to be primary war aims and that the dissolution of the colonial empires of our allies were also firm American policy. All that said, it does indeed ring strange to hear President Obama say these things as though they have never before been said, as though somehow only in the past few months his Administration thought of this. It is actually sort of embarrassing to listen to because it can easily be seen or interpreted as an admission that the Administration had it all wrong until Thursday. Why do this, especially when it is at best a partial truth?

Let me be specific. First, it will be the policy of the United States to promote reform across the region, and to support transitions to democracy.

That effort begins in Egypt and Tunisia, where the stakes are high—as Tunisia was at the vanguard of this democratic wave, and Egypt is both a longstanding partner and the Arab World’s largest nation. Both nations can set a strong example through free and fair elections; a vibrant civil society; accountable and effective democratic institutions; and responsible regional leadership. But our support must also extend to nations where transitions have yet to take place.

Unfortunately, in too many countries, calls for change have been answered by violence. The most extreme example is Libya, where Moammar Gaddafi launched a war against his people, promising to hunt them down like rats. As I said when the United States joined an international coalition to intervene, we cannot prevent every injustice perpetrated by a regime against its people, and we have learned from our experience in Iraq just how costly and difficult it is to impose regime change by force – no matter how well-intended it may be.

But in Libya, we saw the prospect of imminent massacre, had a mandate for action, and heard the Libyan people’s call for help. Had we not acted along with our NATO allies and regional coalition partners, thousands would have been killed.³⁷It is not obvious, at least not to me, that thousands would’ve been killed, and is not obvious that the path the United States chose will eventually produce an outcome with fewer civilian deaths in Libya then would’ve been the case had we properly minded our own damned business. We have abetted a civil war that is likely to remain stalemated in violence for a long time. The message would have been clear: keep power by killing as many people as it takes.³⁸If the President thinks that the intervention in Libya has warned Arab rulers in other authoritarian states away from using violence against their own people, then how does he explain what is going on in Syria? Does he think that if violence breaks out in Sudan between North and South that the example of Libya is going to make any difference to how Omar al-Bashir conducts himself? The fact of the matter is that when authoritarian rulers think that their backs are against the wall, examples from other countries are not going to make one damned bit of difference to how they respond. There is a limit to the demonstration effect in cases like this. Now, time is working against Gaddafi.³⁹An arguable assertion. Will the President still say that time is working against Gadhafi if he manages to pull off a major deadly terrorist attack via proxies against American interests? He does not have control over his country. The opposition has organized a legitimate and credible Interim Council. And when Gaddafi inevitably leaves or is forced from power, decades of provocation will come to an end, and the transition to a democratic Libya can proceed.

While Libya has faced violence on the greatest scale, it is not the only place where leaders have turned to repression to remain in power. Most recently, the Syrian regime has chosen the path of murder and the mass arrests of its citizens. The United States has condemned these actions, and working with the international community we have stepped up our sanctions on the Syrian regime – including sanctions announced yesterday on President Assad and those around him.⁴⁰These sanctions are risible. They will have no effect on Syrian policy. The President is suggesting here that the humanitarian situation was much worse in Libya then it is in Syria. I don’t think that is at all obvious. And so far there is no indication of possible use of American force or even any other sort of policy exertion below the line of sight against Syria. Maybe those exertions below the line of sight are going on and by their very nature we are not supposed to know about them. I hope that is true, but I have no evidence that it is.

The Syrian people have shown their courage in demanding a transition to democracy.⁴¹Some Syrian protesters have demanded democracy, true. But most are simply demanding that the regime cease. They are united on that point, but they are not likely to be united, assuming they get their way, on what should follow. We already see a similar dynamic in Egypt. It is characteristic of Americans to think that all protests must have as one of their main elements a demand for democracy. This is simply a case of Americans thoughtlessly projecting their own frame of reference onto other people. As I have said before, there are lots of reasons, good reasons, why Syrians and other long-abused citizens of Arab countries are now prepared to take to the streets on behalf of their rights, but it does not follow that they in their majority either understand or want the kind of procedural democracy that we take as second nature when we use the word. Do I think that the President and his speechwriters actually know this quite well indeed but have simply decided for the sake of parsimony not to complicate an otherwise useful point in a speech? Actually, no; I don’t think they understand this. I see no evidence that they do. President Assad now has a choice: he can lead that transition, or get out of the way. The Syrian government must stop shooting demonstrators and allow peaceful protests; release political prisoners and stop unjust arrests; allow human rights monitors to have access to cities like Dara’a; and start a serious dialogue to advance a democratic transition. Otherwise, President Assad and his regime will continue to be challenged from within and isolated abroad.⁴²The President says nothing here about the American role in this pressure on Syria from without. What are the Syrian supposed to think when they read this sentence? Do the protesters understand it to mean that we will help them in some way? On what basis could they reach such a conclusion? Will the Assad regime now fear us more and change its ways? To ask the question is to know the answer. So we start a war against Libya, for humanitarian reasons supposedly, in a situation where no vital national security interests or foreign policy goals are really at issue, yet in Syria, which is allied with Iran, which continuously befouls the politics of Lebanon, which has been complicit in killing American soldiers in Iraq over the years, which is a supporter of terrorism, and which exerts itself in every way possible to foil progress in the peace process, we do what? We offer words entirely bereft of specific promises or threats.

Thus far, Syria has followed its Iranian ally, seeking assistance from Tehran in the tactics of suppression. This speaks to the hypocrisy of the Iranian regime, which says it stand for the rights of protesters abroad, yet suppresses its people at home.⁴³This is an oddly muddled sentence. The point here is supposed to be that the Iranians are helping the Syrians suppress the Syrian people. The reference to suppressing its own people inside Iran obscures the point. The way to have said this, then, is “this speaks to the hypocrisy of the Iranian regime which says it stands for the right of protesters abroad even as it suppresses its own people at home”, or something like that. Let us remember that the first peaceful protests were in the streets of Tehran, where the government brutalized women and men, and threw innocent people into jail. We still hear the chants echo from the rooftops of Tehran. The image of a young woman dying in the streets is still seared in our memory.⁴⁴A missed opportunity here to mention her name. Neda Agha-Soltan has justifiably become iconic in Iran and in the region. Here was an opportunity to concretize a point without all the cheesy accoutrement. Of course the President doesn’t mention that when all this happened in the streets of Tehran, he did his best to ignore it while still futilely trying to “engage” the Iranian regime. Maybe this statement suggests that the President at least has some kind of learning curve when it comes to this part of the world. One can hope so. And we will continue to insist that the Iranian people deserve their universal rights⁴⁵This sentence would’ve been more accurate and just as powerful had the word universal been left out. Why raise a distracting dispute when there is no reason to?, and a government that does not smother their aspirations.

Our opposition to Iran’s intolerance—as well as its illicit nuclear program, and its sponsorship of terror—is well known. But if America is to be credible, we must acknowledge that our friends in the region have not all reacted to the demands for change consistent with the principles that I have outlined today. That is true in Yemen, where President Saleh needs to follow through on his commitment to transfer power. And that is true, today, in Bahrain.

Bahrain is a long-standing partner, and we are committed to its security. We recognize that Iran has tried to take advantage of the turmoil there, and that the Bahraini government has a legitimate interest in the rule of law. Nevertheless, we have insisted publically and privately that mass arrests and brute force are at odds with the universal⁴⁶Ditto. The constitution and legal code of Bahrain is what establishes the rights of all citizens in that country. There is no need to invoke any other authority. And it is actually much more effective in a case like this to tell a leader you don’t like that we’re not asking you to behave like us, but only asking to enforce your own laws and principles. rights of Bahrain’s citizens, and will not make legitimate calls for reform go away. The only way forward is for the government and opposition to engage in a dialogue, and you can’t have a real dialogue when parts of the peaceful opposition are in jail. The government must create the conditions for dialogue, and the opposition must participate to forge a just future for all Bahrainis.⁴⁷It will be noted here that there is not a single word in the speech about Saudi Arabia, as if it is not really a very important country. The country’s name is never mentioned. If the President had really been brave, or foolhardy, depending on one’s point of view, this is the place to have mentioned it. I’m glad he did not. The Saudis are deeply irritated with us, largely over Bahrain, and they are very afraid of what is going on, or else they would not be prepared to tilt now toward favoring the survival of the Syrian regime that for all sorts of excellent reasons they despise. I am no friend of the Saudi regime; I think we have coddled them beyond need for much too long. They are part of our 911 problem far more than they have been part of the solution to it. Still, I am not eager to push them over the edge until I am confident that what would follow would represent an improvement, if not for the Saudi population, then for U.S. interests. I am not there yet.

Indeed, one of the broader lessons to be drawn from this period is that sectarian divides need not lead to conflict. In Iraq, we see the promise of a multi-ethnic, multi-sectarian democracy. There, the Iraqi people have rejected the perils of political violence for a democratic process, even as they have taken full responsibility for their own security. Like all new democracies, they will face setbacks. But Iraq is poised to play a key role in the region if it continues its peaceful progress. As they do⁴⁸Here we have a bald grammatical mistake. In the previous sentence the noun is Iraqi, singular. Suddenly the pronoun now is “they”. Did anyone even proofread this thing?, we will be proud to stand with them as a steadfast partner.⁴⁹Of course everybody knows, if they think about it, that whatever potential Iraq has to be a leader in the region as a democratic country is a function of the fact that the United States led a war to get rid of the Baathist regime before it. Barack Obama opposed that war. Now, this does not mean that going to war when and how we did was on balance a wise decision. But for an American President to get up on a podium and praise the situation in Iraq while ignoring completely how that situation came about is passing strange. Only in the world of American partisan politics is such a thing not only possible, but likely to barely cause an eyelash to bat when it happens.

So in the months ahead, America must use all our⁵⁰As I have said before using this method of annotating speeches, I really dislike this grammatical liberty. America should use all of “its” assets. influence to encourage reform in the region. Even as we acknowledge that each country is different, we will need to speak honestly about the principles that we believe in, with friend and foe alike. Our message is simple: if you take the risks that reform entails, you will have the full support of the United States. We must also build on our efforts to broaden our engagement beyond elites, so that we reach the people who will shape the future—particularly young people.

We will continue to make good on the commitments that I made in Cairo—to build networks of entrepreneurs, and expand exchanges in education; to foster cooperation in science and technology, and combat disease. Across the region, we intend to provide assistance to civil society, including those that may not be officially sanctioned, and who speak uncomfortable truths. And we will use the technology to connect with—and listen to—the voices of the people.

In fact, real reform will not come at the ballot box alone. Through our efforts we must support those basic rights to speak your mind and access information. We will support open access to the Internet, and the right of journalists to be heard – whether it’s a big news organization or a blogger. In the 21st century, information is power; the truth cannot be hidden; and the legitimacy of governments will ultimately depend on active and informed citizens.⁵¹I have thought about this remark a lot, trying to understand what it means to say that the legitimacy of the government depends on active and informed citizens. The legitimacy of government depends on different things in different cultures, as we have already said. In a democracy, the legitimacy of government depends upon whether the procedures of its coming into being aligned with constitutional law. Strictly speaking, an active and informed citizenry has nothing to do with it. In a young democracy, should one begin to put down roots in Tunisia or Egypt or Libya or other countries in the region, I suppose public pressure for staying on the straight and narrow is a good thing, because there will be old regime elements opposed and trying to subvert the processes of reform. But the fact of the matter is that information technology can be used by the bad guys as well as good guys. It can be used by religious fanatics as well as by democratic reformers. One only has to remember at an earlier time that the technology of the cassette played an enormous role in helping the mullahs in Iran come to power. So while this sentence sounds good, like many other remarks in the speech, it actually doesn’t make much sense.

Such open discourse is important even if what is said does not square with our worldview. America respects the right of all peaceful and law-abiding voices to be heard, even if we disagree with them. We look forward to working with all who embrace genuine and inclusive democracy. What we will oppose is an attempt by any group to restrict the rights of others, and to hold power through coercion—not consent. Because democracy depends not only on elections, but also strong and accountable institutions, and respect for the rights of minorities.

Such tolerance is particularly important when it comes to religion. In Tahrir Square, we heard Egyptians from all walks of life chant, “Muslims, Christians, we are one.” America will work to see that this spirit prevails—that all faiths are respected, and that bridges are built among them. In a region that was⁵²Another example of the use of language indicating an early and unpolished draft: the region “is” the birthplace of three world religions, not “was” the birthplace. The religions still exist, after all, and so does the place. the birthplace of three world religions, intolerance can lead only to suffering and stagnation. And for this season of change to succeed, Coptic Christians must have the right to worship freely in Cairo, just as Shia must never have their mosques destroyed in Bahrain.

What is true for religious minorities is also true when it comes to the rights of women. History shows that countries are more prosperous and peaceful when women are empowered. That is why we will continue to insist that universal rights apply to women as well as men – by focusing assistance on child and maternal health; by helping women to teach, or start a business; by standing up for the right of women to have their voices heard, and to run for office. For the region will never reach its potential when more than half its population is prevented from achieving their potential.⁵³I will now explain why this insistence on gender equality is not a good idea on balance. Of course we want gender equality and of course we should fund programs that support it. But in this part of the world, where a civilizational dispute about religion and politics is ongoing, for a country outside the region that is identified as a Christian country and with Western secularism at the same time to try to lecture Islamic societies about how to treat women has the general effect of empowering those who use religion for political purposes. This is a complicated subject about which many pages have been written, and I do not intend to repeat them all here, but, in short, religious radicals in the region seek to use religion and religious symbols in their battles against those with whom they disagree. For a country like the United States, which for a variety of reasons is not wildly popular on the street in most countries of the Arab world, this kind of lecturing just helps the bad guys.
There is a deeper point to be made here. These upheavals in the Arab world probably do hurt al- Qaeda and related groups, as has been widely asserted, because what has happened in Egypt and Tunisia shows that there are other and better ways to bring about change than to use of terrorism. But what has happened is likely also to open up space for a more explicit religious politics in most countries, and to help organizations like the Muslim Brotherhood in the fullness of time. This does not mean that the Muslim Brotherhood or similar organizations will resort to violence either within their countries or projected from them in the form of terrorism. But it does mean, to the extent that these kinds of groups gain political power, that these societies will look increasingly unpleasant to Westerners, and especially to Western liberals, and gender discrimination is likely to be prominent in that unpleasantness. There is simply no basis within Islamic thinking or experience for gender equality. But the choice in these societies is not between secular humanism and wild-eyed Islamic fanaticism. The former is pretty much out of the question and the latter is not very likely. I, for one, am content with the idea that these societies will for a long time be very different from Western ones, so long as they do not constitute a national security threat to the United States or its allies. That is a situation I can live with; it is preferable, I think, to trying to force them to be like us only to end up helping our worst enemies in these countries. Besides, in order for these countries to move toward more plural political orders they will have to reconstitute the rule of law in their societies, and perhaps the only way they can do this is by adopting a rule of law much closer to religious tradition then we might like. Our kind of rule of law is not the only kind. The danger here is that out a generation or two, based on a more explicitly religious politics than has been the case in most of these countries since their gaining independence, a new wave of Salafi fanaticism and terrorism might be born. But that depends on whether the societies manage to face up to and conquer the challenges before them. If they do, there is no reason in particular to fear such a second wave. If they don’t, there is.

Even as we promote political reform and human rights in the region, our efforts cannot stop there. So the second way that we must support positive change in the region is through our efforts to advance economic development for nations that transition to democracy.

After all, politics alone has not put protesters into the streets. The tipping point for so many people is the more constant concern of putting food on the table and providing for a family. Too many in the region wake up with few expectations other than making it through the day, and perhaps the hope that their luck will change. Throughout the region, many young people have a solid education, but closed economies leave them unable to find a job. Entrepreneurs are brimming with ideas, but corruption leaves them unable to profit from them.⁵⁴No quarrels with this paragraph. You see, it does happen.

The greatest untapped resource in the Middle East and North Africa is the talent of its people. In the recent protests, we see that talent on display, as people harness technology to move the world. It’s no coincidence that one of the leaders of Tahrir Square was an executive for Google. That energy now needs to be channeled, in country after country, so that economic growth can solidify the accomplishments of the street. Just as democratic revolutions can be triggered by a lack of individual opportunity, successful democratic transitions depend upon an expansion of growth⁵⁵More odd language. What does an expansion of growth mean? It sounds almost definitionally redundant. What would’ve been wrong with saying that successful democratic transitions depend on economic growth and broad-based prosperity? and broad-based prosperity.⁵⁶The President makes the statement as though it is obvious. It is not. A great deal of social science research has been done on the connection between political pluralism and levels of economic growth and distribution. On balance, I would say the President is probably right, if he means not that democratic transitions themselves depend on economic growth, but that their capacity to endure depends on economic growth. The exception, however, is when growth is so rapid and so mal-distributed—as is often the case in periods of rapid growth—that it becomes politically destabilizing. The idea that rapid economic growth is socially and politically stabilizing is an old American assumption, and it is completely wrong. People throw around the term “creative destruction” all the time, but few ever think about why Joseph Schumpeter came up with it in the first place.

Drawing from what we’ve learned around the world, we think it’s important to focus on trade, not just aid; and investment, not just assistance.⁵⁷These are words that could come from any Republican. It is good to hear them now coming quite often also from Democrats. The goal must be a model in which protectionism gives way to openness⁵⁸Yet another example of just strange language, not thought through. How can the goal of anything be a model? A model is a means, not an end. The goal has to be an economy, a real situation, in which good things are true.; the reigns of commerce pass from the few to the many, and the economy generates jobs for the young. America’s support for democracy will therefore be based on ensuring financial stability; promoting reform; and integrating competitive markets with each other and the global economy—starting with Tunisia and Egypt.

First, we have asked the World Bank and the International Monetary Fund to present a plan at next week’s G-8 summit for what needs to be done to stabilize and modernize the economies of Tunisia and Egypt. Together, we must help them recover from the disruption of their democratic upheaval, and support the governments that will be elected later this year.⁵⁹This statement and others to follow should have been more carefully conditionalized. As I explained in my preamble, Egypt is not yet a democracy. The old regime, the military/bureaucratic regime, is still in place and it still has life and the capacity to defend itself against genuine reform. As I’ve already said, it sends a bad signal to the present transitional military junta in Egypt to simply assume that Egypt is a democracy. It might tempt them to do things with regard to the September election that they might not otherwise have been tempted to do. We have leverage over Egypt and particularly over the Army. We now suggest that we will not use this leverage. Possibly a serious tactical misjudgment; time will tell. And we are urging other countries to help Egypt and Tunisia meet its near-term financial needs.

Second, we do not want a democratic Egypt to be saddled by the debts of its past. So we will relieve a democratic Egypt of up to $1 billion in debt, and work with our Egyptian partners to invest these resources to foster growth and entrepreneurship. We will help Egypt regain access to markets by guaranteeing $1 billion in borrowing that is needed to finance infrastructure and job creation. And we will help newly democratic governments recover assets that were stolen.

Third, we are working with Congress to create Enterprise Funds to invest in Tunisia and Egypt. These will be modeled on funds that supported the transitions in Eastern Europe after the fall of the Berlin Wall. OPIC will soon launch a $2 billion facility to support private investment across the region. And we will work with allies to refocus the European Bank for Reconstruction and Development so that it provides the same support for democratic transitions and economic modernization in the Middle East and North Africa as it has in Europe.⁶⁰I hope the President and his associates do not repeat the mistake of their predecessors by imagining that Arabs will use investment funds the same way that East and Central Europeans did after the end of the Cold War. There is such a thing called political economy. It is a concept that expresses the relationship between power and money in a society. There are several models of political economy; they tend to be shaped by experience—which is to say by a combination of culture and history. What went on in Central and Eastern Europe after 1991 will not be the same thing that goes on now in the Middle East and North Africa. I’m almost embarrassed to have to point this out, but it appears that someone has to point it out.

Fourth, the United States will launch a comprehensive Trade and Investment Partnership Initiative in the Middle East and North Africa. If you take out oil exports, this region of over 400 million people exports roughly the same amount as Switzerland. So we will work with the EU to facilitate more trade within the region, build on existing agreements to promote integration with U.S. and European markets, and open the door for those countries who adopt high standards of reform and trade liberalization to construct a regional trade arrangement. Just as EU membership served as an incentive for reform in Europe, so should the vision of a modern and prosperous economy create a powerful force for reform in the Middle East and North Africa.⁶¹Two comments on this paragraph. First, the idea of a Middle East free trade area is not new. This idea may have even preceded the Bush Administration—I frankly don’t know—but it was part of the Bush Administration. That I do know, because I had to draft speeches over at the State Department in which that idea was fairly prominent. Again, the President trots out this idea as though he or his Administration thought it up. Second, the reference to the European Union here is really very weird. It is true of course that the strictures that the European Union laid down for the expansion of its membership did a world of good in encouraging recently freed Soviet satellite countries to reform their institutions in all the right ways. But the European Union was created by Europeans, not by outsiders. The way this paragraph reads, it is the United States, together with the European Union, that is going to be the leading edge for forming someone else’s regional trade arrangement. To those in the region who are suspicious of Western economic exploitation, this might come across as something quite sinister. I have to give this more thought. But what I do know is that the invocation of the EU example here just doesn’t fit.

Prosperity also requires tearing down walls that stand in the way of progress – the corruption of elites who steal from their people; the red tape that stops an idea from becoming a business; the patronage that distributes wealth based on tribe or sect. We will help governments meet international obligations, and invest efforts anti-corruption; by working with parliamentarians who are developing reforms, and activists who use technology to hold government accountable.

Let me conclude by talking about another cornerstone of our approach to the region, and that relates to the pursuit of peace.⁶²As I have already said, this is where the speech should have ended. This last tacked-on section about Israel/Palestine detracts from the focus on what is really going on in the Arab world today. As I have also said, I’m grateful at least that the President did not excessively link Israel/Palestine to these other dynamics, as seemed to be his wont when the Administration began. But it seems that in no longer making that claim he seems to be at a loss for making any claim at all about the relationship of domestic politics in the region broadly construed to the Israel/Palestine dilemma. The only rationale for talking about Israel/Palestine, then, it seems, is his acknowledgment that a lot of people care about it. For speech that was supposed to create a new overarching concept of the region, this is pretty weak brew.

For decades, the conflict between Israelis and Arabs has cast a shadow over the region. For Israelis, it has meant living with the fear that their children could get blown up on a bus or by rockets fired at their homes, as well as the pain of knowing that other children in the region are taught to hate them. For Palestinians, it has meant suffering the humiliation of occupation, and never living in a nation of their own. Moreover, this conflict has come with a larger cost the Middle East, as it impedes partnerships that could bring greater security, prosperity, and empowerment to ordinary people.

My Administration has worked with the parties and the international community for over two years to end this conflict, yet expectations have gone unmet.⁶³In the past the President has been more candid about the Administration’s responsibility for the current situation. I wish he had been as candid this time. Obviously, there is plenty of blame to go around for why things are the way they are, but the mistakes the Administration made its first year are clearly responsible for the situation to some degree. Israeli settlement activity continues. Palestinians have walked away from talks. The world looks at a conflict that has grinded on for decades, and sees a stalemate. Indeed, there are those who argue that with all the change and uncertainty in the region, it is simply not possible to move forward.

I disagree. At a time when the people of the Middle East and North Africa are casting off the burdens of the past, the drive for a lasting peace that ends the conflict and resolves all claims is more urgent than ever.⁶⁴The President makes a fairly bold statement here, namely that because the region is changing a solution to the Israel/Palestine conflict is more urgent than ever. Notice, however, that he never says why. He makes no attempt whatsoever to link the two causally, except to say that the conflict prevents many potentially beneficial relationships coming into being, which is true but which is also just pablum. There is no analytic element here, none whatsoever. I think the reason why there is no analytical element is obvious: these guys simply don’t know what the connections are.

For the Palestinians, efforts to delegitimize Israel will end in failure. Symbolic actions to isolate Israel at the United Nations in September won’t create an independent state. Palestinian leaders will not achieve peace or prosperity if Hamas insists on a path of terror and rejection. And Palestinians will never realize their independence by denying the right of Israel to exist.⁶⁵These are bold, clear, powerful formulations. Why couldn’t the rest of the speech been as skillfully drawn?

As for Israel, our friendship is rooted deeply in a shared history and shared values. Our commitment to Israel’s security is unshakeable. And we will stand against attempts to single it out for criticism in international forums. But precisely because of our friendship, it is important that we tell the truth: the status quo is unsustainable, and Israel too must act boldly to advance a lasting peace.

The fact is, a growing number of Palestinians live west of the Jordan River. Technology will make it harder for Israel to defend itself.⁶⁶Probably true, but not self-evident. Defensive and offensive military technology rock back and forth, or at least they have historically. But in a speech, the statement is defensible. A region undergoing profound change will lead to populism in which millions of people – not just a few leaders – must believe peace is possible.⁶⁷This is garbled. I’m not sure the speechwriter knows what populism is. I’m not exactly sure what this sentence is supposed to mean, but I think it means that with the region changing and popular opinion becoming more directly relevant to state policies throughout the region, that it is important for people to believe in the possibility of a negotiated peace that is just and stable. I think that is right. Unfortunately, that is not what the sentence says. Far more likely, actually, more democratic polities in the Arab world become less likely peacemaking with Israel will thrive, not more. The governments in this part of the world have been in the main far more pragmatic and moderate than popular opinion. Popular opinion in many, if not most, countries of the Arab world is not just anti-Zionist and anti-Israeli but also anti-Semitic. And many of them are anti-Semitic in truly classical, clinical, highly irrational ways. We have already seen this phenomenon at work in Egypt, where the government, in order to ingratiate itself to a newly mobilized mass, has tilted sharply against Israel and toward Hamas. That is part of the explanation for the unity agreement between Hamas and Fatah. Again, I don’t expect the President in a speech of this kind to tell the truth about the volatile potential of democratic public opinion in the Arab world just because it’s true. But I have to wonder whether he knows it’s true. The international community is tired of an endless process that never produces an outcome. The dream of a Jewish and democratic state cannot be fulfilled with permanent occupation.⁶⁸This is a strange and actually quite offensive remark, although I’m sure it is not deliberately offensive. The dream of a Jewish state that is also a democratic state has already been fulfilled. It is no longer a dream; it is a reality. What the President is saying, or trying to say, is that that achievement is vulnerable. And in this he is correct. I suppose the question here is just how many garbled sentences one speech can carry without falling flat on its face. This one is getting very close.

Ultimately, it is up to Israelis and Palestinians to take action. No peace can be imposed upon them, nor can endless delay make the problem go away.⁶⁹This is a nice sentence but I would’ve broken it into two. For the sake of emphasis I would’ve let the assertion that no peace can be imposed stand by itself. Then I would’ve said, after a brief pause, “On the other hand”, or something like that, infinite delay will not make the problem disappear. I think it just would’ve been a better presentation done that way. But what America and the international community can do is state frankly what everyone knows: a lasting peace will involve two states for two peoples. Israel as a Jewish state and the homeland for the Jewish people, and the state of Palestine as the homeland for the Palestinian people; each state enjoying self-determination, mutual recognition, and peace.⁷⁰Here the speech uses the term self-determination properly, which only makes those earlier uses in which the term is used improperly all the more glaring. I am also glad that the Administration reasserted the inevitability of a two state solution, because not only is it the only possible solution of any practical kind, but also because it is important for others to see that the United States government has not lost its mind on this subject as have so many so-called Western intellectuals.

So while the core issues of the conflict must be negotiated, the basis of those negotiations is clear: a viable Palestine, and a secure Israel. The United States believes that negotiations should result in two states, with permanent Palestinian borders with Israel, Jordan, and Egypt, and permanent Israeli borders with Palestine. The borders of Israel and Palestine should be based on the 1967 lines with mutually agreed swaps, so that secure and recognized borders are established for both states.⁷¹A very hot argument has arisen just in the past 24 hours over this sentence. Some people are claiming that the explicit mention of the 1967 lines is a change in American policy, and that it raises the prospect that when the Palestinians do reengage negotiations they will start from the 1967 borders and try to pinch Israel inward so that land exchanges will involve territory that was Israeli also before 1967. This is possible. This is why, evidently, Prime Minister Netanyahu has already reportedly written to the President objecting to this formulation. I don’t see that it is necessarily so, however. The Clinton parameters spoke of the West Bank being returned, or rather turned over to a Palestinian state, in the mid-90%s—94% to 96%. Those were the numbers that President Clinton used. Since land swaps were also contemplated here, it means that if Israel annexes 4-6% of the West Bank then the area that has to be swapped over to the Palestinians logically cannot come from anywhere except from land that was Israel before 1967. So there is really no difference here. The President merely stated a point that the last half-dozen U.S. administrations have taken for granted. There are only two possible reasons why some people got so upset about this, and claimed that Obama was throwing Israel under the axle and other such grossly exaggerated phrases. Either they are ignorant or they are spinning for political purposes, trying to prey upon those who are ignorant. The Palestinian people must have the right to govern themselves, and reach their potential, in a sovereign and contiguous state.

As for security, every state has the right to self-defense, and Israel must be able to defend itself—by itself⁷²This little phrase, made up of just two words, is good to see. It is code for opposition to elaborate schemes of NATO or international forces inserted into the area that would be purportedly able to defend Israel in what would otherwise be indefensible borders.—against any threat. Provisions must also be robust enough to prevent a resurgence of terrorism; to stop the infiltration of weapons; and to provide effective border security. The full and phased withdrawal of Israeli military forces should be coordinated with the assumption of Palestinian security responsibility in a sovereign, non-militarized state.⁷³Now here there is a difference between this statement and the Clinton parameters. In the latter Israel retains three facilities inside the West Bank, with Palestinian liaison, to monitor security situations. This implies that Israel is to have no such stations inside West Bank. That is a clear tilt toward the Palestinians. As others have pointed out, to make a speech that tilts at least in this way if not also in others toward the Palestinians right after Fatah has made a unity agreement with an organization that does not recognize Israel’s right to exist amounts to a rewarding bad behavior. I agree with that assessment. On the other hand, perhaps the President is trying to get the Palestinians to back away from UN unilateralism this coming September, and wants to create a more appealing track for them. If that is the intent, then it makes some sense. We will have to wait to see if this is so. The duration of this transition period must be agreed, and the effectiveness of security arrangements must be demonstrated.

These principles provide a foundation for negotiations. Palestinians should know the territorial outlines of their state; Israelis should know that their basic security concerns will be met. I know that these steps alone will not resolve this conflict. Two wrenching and emotional issues remain: the future of Jerusalem, and the fate of Palestinian refugees. But moving forward now on the basis of territory and security provides a foundation to resolve those two issues in a way that is just and fair, and that respects the rights and aspirations of Israelis and Palestinians.⁷⁴It is also something of a novelty to separate borders and security from Jerusalem and refugees. I can understand why the President wants to do this. He wants to break down the problems into more manageable chunks. Maybe if a trade can be agreed on the first two issues, then it makes tea latter two easier to handle. There is, however, another way to look at this. From the Israeli point of view, the refugee issue is all bound up in security. They are not separate issues. What the Israelis want and have always wanted from the negotiations is an end of conflict conclusion. Israel wants an agreement that prevents the Palestinians from raising new demands after the ink has dried. No Israeli government will sign an agreement just on borders and security when the Palestinians are able to negate the practical implications of the agreement by raising the refugee issue after the fact. So in practice all four of these issues must be done together, or none of them will be done at all. I therefore do not like this innovation as stated.

Recognizing that negotiations need to begin with the issues of territory and security does not mean that it will be easy to come back to the table. In particular, the recent announcement of an agreement between Fatah and Hamas raises profound and legitimate questions for Israel—how can one negotiate with a party that has shown itself unwilling to recognize your right to exist. In the weeks and months to come, Palestinian leaders will have to provide a credible answer to that question. Meanwhile, the United States, our Quartet partners, and the Arab states will need to continue every effort to get beyond the current impasse.

I recognize how hard this will be.⁷⁵If the President really recognizes how hard this will be then he wouldn’t disagree so readily with people who say this is not a propitious time to try to move forward. He still seems to have not learned one thing: that if you force a negotiation against the grain of any possibility that it might succeed, you actually do harm. You raise expectations only to dash them, and that tends to drive political power into the arms of those least amenable to compromise. Suspicion and hostility has been passed on for generations, and at times it has hardened. But I’m convinced that the majority of Israelis and Palestinians would rather look to the future than be trapped in the past. We see that spirit in the Israeli father whose son was killed by Hamas, who helped start an organization that brought together Israelis and Palestinians who had lost loved ones. He said, “I gradually realized that the only hope for progress was to recognize the face of the conflict.” And we see it in the actions of a Palestinian who lost three daughters to Israeli shells in Gaza. “I have the right to feel angry,” he said. “So many people were expecting me to hate. My answer to them is I shall not hate…Let us hope,” he said, “for tomorrow.”⁷⁶As I have already said, I would’ve left this stuff out. There are plenty of other ways to have knitted up the text in order to get off the stage.

That is the choice that must be made – not simply in this conflict, but across the entire region – a choice between hate and hope; between the shackles of the past, and the promise of the future. It’s a choice that must be made by leaders and by people, and it’s a choice that will define the future of a region that served as the cradle of civilization and a crucible of strife.

For all the challenges that lie ahead, we see many reasons to be hopeful. In Egypt, we see it in the efforts of young people who led protests. In Syria, we see it in the courage of those who brave bullets while chanting, ‘peaceful,’ ‘peaceful.’ In Benghazi, a city threatened with destruction, we see it in the courthouse square where people gather to celebrate the freedoms that they had never known. Across the region, those rights that we take for granted are being claimed with joy by those who are prying lose the grip of an iron fist.

For the American people, the scenes of upheaval in the region may be unsettling, but the forces driving it are not unfamiliar. Our own nation was founded through a rebellion against an empire. Our people fought a painful civil war that extended freedom and dignity to those who were enslaved. And I would not be standing here today unless past generations turned to the moral force of non-violence as a way to perfect our union – organizing, marching, and protesting peacefully together to make real those words that declared our nation: “We hold these truths to be self evident, that all men are created equal.”⁷⁷I was waiting for this. I’m glad I found it. Every presidential speech of significance must be enmeshed in a sacred narrative of one kind or another. It sure did take long enough for the speech to get around to it, but better late than never.

Those words must guide our response to the change that is transforming the Middle East and North Africa – words which tell us that repression will fail, that tyrants will fall, and that every man and woman is endowed with certain inalienable rights. It will not be easy. There is no straight line to progress, and hardship always accompanies a season of hope.⁷⁸This could’ve been done better. It sort of sounds like a mixed metaphor; “hardship” and “season” just don’t seem really go together. I would’ve said it this way: “Hardship always accompanies hope and there is always disappointment even in a new season of growth.” I think that sounds a lot better, more musical and I think it achieves the elevation you want toward the end of the speech like this. I suppose it’s a matter of taste. But the United States of America was founded on the belief that people should govern themselves. Now, we cannot hesitate to stand squarely on the side of those who are reaching for their rights, knowing that their success will bring about a world that is more peaceful, more stable, and more just.⁷⁹Well here, finally at the very end of the speech, we have at least some attempt to connect what is happening in the region to their broader consequences for security, prosperity, and regional if not global peace. I suppose better late than never, again, but I wish more thought had been put into this critical subject. What we have here is a restatement of democratic peace theory in a nutshell – – that democracy is good for peace, stability and justice. I believe that, too, at least in the long run. The problem is getting to the long run. The social science and historical data do not support the contention that young democracies are peaceful, stable or capable of dispensing justice. Young, under-institutionalized democracies are in fact rather bellicose, prone to political temper tantrums and very uneven on the question of justice. Mature democracies, however, are very good for peace and for stability and for justice, and also for prosperity in case anyone is interested in that. At least he tried. Besides, he had to end the speech some way. But as with most of the speech, the speechwriter could’ve done better.

From the perspective of pure craft, Adam gave the speech relatively low marks. He also struggled to come up with a reason for why this speech needed to be given in the first place. Even though he thought the Israel-Palestine remarks were the best-executed section, those could have waited for this weekend’s talk at AIPAC. Have a listen:

[audio:http://the-american-interest.com/podcast/audio/052011-AI-Podcast.mp3]

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He’s since gone on to become Director of the Afghanistan Study Group, which last year published a report titled A New Way Forward. The report counseled in no uncertain terms that we should seriously rethink our approach to the 10 year effort in that beleaguered country, because what we were doing was clearly not working.

Now, with the death of Osama Bin Laden, the United States is poised, many hope, to take a different tack. Following on the heels of Hoh’s group’s report, the Century Foundation task force co-chaired by Lakhdar Brahimi and Thomas R. Pickering released a roadmap for how we might go about negotiating with the Taliban. No less an eminence grise than Richard Haass testified to the Senate Foreign Relations Committee that it’s high time that we thought about disengaging. Can Administration thinking be far behind?

Matthew Hoh is cautiously optimistic that the stars might be aligning for a re-evaluation of our policy, but he walked me through his thinking as to why this can be such a difficult thing to achieve in government, and why he chose to fight his fight outside the walls of officialdom, unstymied by victory narratives and the siren song of counterinsurgency doctrine as cure-all.

[audio:http://the-american-interest.com/podcast/audio/051611-AI-Podcast.mp3]

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Jeffrey Goldberg, in his infamous New Yorker article from 2002, wrote the following about Saddam Hussein’s heinous campaign against the Kurds:

The Anfal campaign was not an end in itself, like the Holocaust, but a means to an end—an instance of a policy that Samantha Power, who runs the Carr Center for Human Rights, at Harvard, calls “instrumental genocide.” Power has just published A Problem from Hell, a study of American responses to genocide. “There are regimes that set out to murder every citizen of a race,” she said. “Saddam achieved what he had to do without exterminating every last Kurd.” What he had to do, Power and others say, was to break the Kurds’ morale and convince them that a desire for independence was foolish.

Max Boot, writing in yesterday’s Wall Street Journal, presented the following argument for why the United States should not be keen on leaving Iraq any time soon:

U.S. forces play a particularly important role as a peacekeeper between the Kurdish peshmerga militia and the Iraqi Security Forces along the ill-defined frontier (the “Green Line”) between Iraq proper and the Kurdish Regional Government. On a visit to Iraq last month, I encountered the umpteenth crisis between the Kurds and Arabs. The peshmerga had come down south of the Green Line to surround the disputed city of Kirkuk. The Iraqi army was moving troops to the area. Shooting could have broken out were it not for the presence of the U.S. army in the middle.

Now, though it would be disingenuous to argue that we invaded Iraq primarily in order to save the Kurds (a people who were doing fairly well for themselves under the no-fly zone we had established in the north after the first Gulf war), it wouldn’t be too much of a stretch to say that “helping the Kurds” was a side benefit widely trumpeted by Iraq war supporters. The Kurds were pro-American and anti-Saddam and would prove a reliable ally in a volatile and hostile Middle East. Indeed, there was talk about the Kurdish nation as some kind of second bulwark of American influence in the region, standing alongside Israel as a beacon of what was possible when democracy was allowed to flourish.

Without casting aspersions on the historical right of the Kurdish nation to self-determination or getting into the thorny question of who should control the oil-rich city of Kirkuk, it is painfully clear from reading Goldberg’s description of Saddam’s murderous policies exactly where we went wrong. Saddam’s genocide was “instrumental” after all: It served as a gruesome means to the very definite political end of discouraging Kurdish independence. While this should not excuse Anfal one bit, it does once again reveal how harmful “feel-good” policies are if they are not examined carefully in light of political realities. It verges on irresponsible that our method of dealing with the Kurdish question was to throw democracy at it in hopes that differences could be worked out.

That the Kurds were able to set up relatively functional democratic institutions for themselves during the 1990s shouldn’t have indicated to us that a multi-ethnic Iraqi democracy is particularly likely. On the contrary, it should have suggested that the Kurds were preparing themselves for a fairly autonomous existence after the fall of Saddam, and that their dream of independence was undimmed. By removing Saddam, we removed a major obstacle standing in the way of their dream. Yet insofar as we’re committed to Iraq’s territorial integrity and a reasonably strong central government (and we absolutely are as long as we count Turkey as an ally and Iran as an adversary), the Kurdish question is nothing short of a serious problem for us. If Max Boot is right and Arab-Kurdish tensions are indeed on a knife’s edge as he describes, then Iraq as we’ve set it up may not be workable, and we’re faced with the choice between additional years of triage (with perhaps no end in sight, like in Bosnia) or the outbreak of hostilities.

The Libya parallels are suggestive, if not perfect. Even if we grant that NATO’s action averted a genocide (and, although there is ample historical evidence that Qaddafi is capable of severe brutality, the claim that he was about to embark on a policy of extermination rather than urban conquest remains dubious), the fact remains that Qaddafi was contemplating the “instrumental” form of the crime: using violence against civilians in order to forestall rebellion to his rule. By acting to prevent his barbarity, we have implicitly (and then explicitly) endorsed the politics of his opposition without giving adequate thought as to what that might mean. Just as with Iraq’s Kurds, the idea was that a pro-American and pro-democratic faction would form the foundation of a new and prosperous Libya, which would serve at least as a symbol of the West’s benevolent attitude towards the new people-powered revolutions in the Middle East. Unfortunately for us, there is an increasing volume of evidence that the legitimacy of the revolution is not being recognized across the entire country, with some of the principal tribes of the south and west throwing their weight behind Qaddafi.

Just like in Iraq, our options aren’t particularly pleasant. Given the very explicit demands by Presidents Obama and Sarkozy and Prime Minister Cameron that Qaddafi step down, short of regime decapitation we’ve limited ourselves to cease-fire agreements that provide for Qaddafi’s departure. The situation is fluid and anything is still technically possible, but the conflict seems to be grinding to a stalemate. Qaddafi feels comfortable enough to take a mid-day drive through downtown Tripoli, thumbing his nose at our efforts to unseat him. De facto partition via Western air cover may not be perfectly workable in all seasons due to crippling sandstorms, and redrawing international boundaries due to our intervention is probably as much a non-starter in North Africa as it is in the Middle East. And even in the best case scenario in which Qaddafi somehow disappears, we’d still have the difficult job of helping the various parties reconcile. Saying that this is a “task for the Libyan people themselves” is misleading at best.

In any case, the “days, not weeks” prediction may come to be seen as Obama’s “Mission Accomplished” moment—the ironic inflection point after which our prolonged involvement in a riven country is virtually ensured.

I was struck by more than just the tone (though the thought of one of our doyens of foreign policy presuming to lecture members of a beleaguered militia on how to properly behave is galling enough). It’s that this brief late-night missive captured precisely how liberal interventionists misunderstand reality. I’m not alluding here to the oft-repeated criticism of this intervention which states that we don’t really know anything about these Libyan rebels we’re supporting. Though that argument is indeed valid and should give us pause as we pick our course in this unfortunate war, I’m getting at something more fundamental. Liberal interventionists tragically misunderstand the nature of politics and war, and the consequences of this misunderstanding could be grave and costly.

On March 30, Dr. Slaughter penned a brief article in the New York Review of Books defending President Obama’s conflation of American values and interests as being the only sensible approach in the modern world. The reason, she says, is that the world is no longer merely made up of states, but is rather now composed of societies and governments. Those in favor of a state-centered approach to foreign affairs are in denial of this new reality, she contends. “US foreign policy must change fairly dramatically to prosper in this [new] world,” and Obama’s foray into Libya in support of the aspirations of the Libyan people is a good template for how and when we should intervene.

What is this new organizational paradigm of “societies and governments?” Slaughter provides some comparisons:

In a world of states, geography is still a function of bounded physical borders. In a world of governments and societies, geography includes the unbounded virtual world in which social networks operate despite the efforts of some governments to control them. In a world of states, we look to the distribution of natural resources among them and favor those states that have more. In the world of governments and societies, we must look not only at natural resources but also at the distribution of the wealth they generate. In a world of states, governments can be bribed, coerced, and cajoled into pursuing a desired course of action. In a world of governments and societies, we must take account of the power of citizens to constrain their governments in ways that are directly contrary to our ability to solve global problems.

She seems to be implying that this new paradigm has come about through technological progress—namely through the rise of Twitter and Facebook. Though she doesn’t go so far as to argue that the state-centered model is to be discarded, she cites Hillary Clinton being snubbed by Egyptian youth activists—and “young people now make up 60 percent of the population of the Middle East” she tells us—as a grievous cost of privileging the state-centered approach. By standing on what she thinks is the right side of history in the Libyan war, America is rectifying these mistakes and supporting what is a new global organizing principle of people-powered, accountable governance. These values, she says, are our new interests. Defending them is of paramount importance.

Evidence paints a different picture. Though Facebook and Twitter provide unprecedented opportunities for non-state actors to organize and raise awareness of injustice among the public, the state remains defined by its monopoly over the use of violence. Though the Egyptian and Tunisian episodes occurred (and continue to evolve) without excessive carnage, the unrest in Bahrain, Yemen, Syria and of course Libya show that people armed with ideals and values are not sufficient agents of change. Indeed, as an article in the upcoming issue of The American Interest will argue, the reason for the relative success in Tunisia and Egypt had everything to do with the political realities and power relationships within these very different polities, and very little to do with each country’s military recognizing the legitimacy of the people’s grievances. Furthermore, in Egypt, the entrenched power of the army and the superior organization of existing parties such as the Muslim Brotherhood is tempering reform, as evidenced by the carefully choreographed constitutional referendum of March 22. Twitter and Facebook are, to be sure, unprecedentedly powerful tools for organization, but they do not change the primordial, sharp-elbowed nature of politics.

The state-centered approach is not blind to the new popular internet-fueled movements and political realities in the Middle East, but it does question the likelihood of their success. (A survey of the recent “color” revolutions, also forthcoming in our pages, paints a mixed picture.) It posits that the deciding factor in the early days of these Middle Eastern revolutions is not primarily the values being fought for, but violence—whether, and how decisively, it is used. The Libyans, accustomed to 40-odd years of brutal rule by Qaddafi, understood this all too well and chose to respond in kind. What may have started as a protest for democratic change is now very much a war over the state itself. The discussion is no longer about values, but over power, territory, and sovereignty.

Slaughter’s tweet in particular is emblematic of a worldview blind to all of this. And insofar as decision-makers within the Obama Administration persist in sharing Slaughter’s blind spots, we may be in for even more perverse outcomes before this is all said and done. A NATO spokesperson announced that if the rebels were to shell cities in trying to unseat Qaddafi, they too will be bombed, as the UN resolution “applies to both sides.” If our imperfect proxies do not live up to the standards we have set for them in their fight against a dictator we seem to want unseated, some are sure to end up in the dock at the Hague, right next to Qaddafi and his sons. These are the paradoxical wages of an intervention focused on values rather than interests, and on ideals rather than concrete goals.

None of this is to argue that we should applaud the rebels if they brutalize their way to Tripoli, nor to mythologize this ragtag group as lightly-armed Davids in a fight with their Goliath in the desert. On the contrary, it’s an argument for staying out of the whole mess, as civil wars and revolutions tend to beget this kind of stuff. Now that we’re in well past our knees, the best outcome would be for Qaddafi to be forced out somehow, as the Administration seems to hope will come to pass. But it would surely be compounding the mistake of entering this war in the first place if our role devolves to playing human rights referee in what could be an increasingly brutal and drawn out conflict.

I argued in my previous post that liberal interventionists systematically ignore political realities and privilege moral concerns in making their decisions. It may be closer to the truth to say that they just don’t understand reality very well at all, and that this often results in a morally muddled, deplorable outcome.