Daily Archives: May 16, 2013

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Washington’s need for periodic scandal is almost biological. For legislators, it is the opportunity to strut on the national stage. For the party out of power, it is politics by other means. For the press, it is an escape from the boredom of a second term. Scandal means a break in the routine, a thrilling emergency. How else to explain the excitement with which two events – an attack on a US consulate in Libya and tax audits of conservative institutions – have been elevated into scandals? At some level, the political class loves it.

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This is not to say that scandal is never real. Watergate was real. The Whitewater affair was not real, but was quite damaging to the Clinton administration anyway. Iran-Contra was real, but not damaging enough to turn Republicans out of office in 1988. Plamegate, which began with the question of who leaked the name of a clandestine CIA agent to a reporter, was not real or damaging, though it did result in Dick Cheney barely speaking to George W. Bush since they left office.

What a scandal needs to count as real is an underlying crime. What it needs to be damaging is a strong storyline. The recent Benghazi affair falls short on both counts. This investigation posits that the top administration officials conspired to hide the truth about the September attack on a US consulate that resulted in the death of four diplomats, including the ambassador to Libya. Republican accusations about Benghazi derailed the nomination of Susan Rice to succeed Hillary Clinton as secretary of state.

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The charge against Ms Rice was essentially that she delivered political spin by calling the attacks riots rather than a planned act of terrorism – the theory being that before the 2012 election, the Obama administration did not want to tarnish its success against al-Qaeda. It emerged this week that Ms Rice’s much-parsed Sunday television talking points were prepared not by the state department but by the more politically independent CIA. But in an inquisitorial frenzy, dead ends are synonymous with new avenues. Republican investigators recently unearthed a diplomat serving in Tripoli at the time, who claims he was punished for speaking frankly to Republican investigators.

This claim, too, is weak. Benghazi was a tragedy, a chain of errors that left the outpost vulnerable. Even clearer is the political motivation behind that investigation, which seeks to embarrass Hillary Clinton, frontrunner for the 2016 Democratic presidential nomination. When Senator Lindsey Graham of South Carolina fulminates that Benghazi is “every bit as damaging as Watergate”, the most accurate translation is: “I am facing a Republican primary challenge.” Last week Mr Graham survived that challenge, so he can now be expected to calm down.

The internal revenue service scandal, in which tax enforcement agents are alleged to have targeted conservative organisations for examinations, looks similarly unreal, but has much more potential to be damaging. This is because it has a readily comprehensible narrative: that the Obama administration used the tax system to harm its political enemies. This surely did not happen, but it is something, unlike Benghazi, that people can understand. Richard Nixon used tax audits as a tool of political persecution during Watergate. It is the kind of abuse that Obama’s paranoiac enemies believe him to be capable of.

What seems to have happened is this: in 2010, a spate of conservative groups applied for tax-exempt status. This designation is not available to mainly political organisations, so most of the groups were running a kind of scam by asking for it. Low-level employees in an Ohio field office thought they could create a shortcut by watching out for red-flag political terms such as “patriots” and “9/12” on the applications. The IRS inspector general has concluded that this was an instance of bureaucratic overzealousness – not politically motivated and not criminal.

This kind of scandal can succeed, however, even where it fails the reality test, thanks to bipartisan cowardice. No politician wants to defend the IRS. So the president has done his best to appear furious, the justice department has announced a criminal investigation and the Treasury has forced the IRS acting commissioner, who may or may not have done anything wrong, to resign. Feeding the wolves in this way is a bad idea; they know where their next meal is to be had. As the fever takes hold, any additional controversy – such as the justice department’s subpoena of Associated Press phone records in pursuit of a leak – is accorded scandal status. The administration is officially “beset” and “besieged.“

The final requirement of a successful scandal is that it be less boring than what people would be talking about otherwise. Here Benghazi and the IRS are up against implementation of the Affordable Care Act, round 17 of the budget battles, and a stalemate over immigration reform. Washington is desperate for diversion. But it is going to have to try harder – these scandals aren’t any fun.

The writer is chairman of the Slate Group

Markets have not been enthused by the numbers coming out of China in recent months. Typical headlines are “China’s production indicators disappoint” or “analysts are worried that rapid expansion is faltering”. Estimates of China’s economic growth this year are slipping from more than 8 per cent to something closer to 7.5 per cent. Those concerned about the country’s longer-term growth challenges, however, tend to be more relaxed about near-term outcomes but preoccupied with the new leadership’s commitment to reforms.

Is there a trade-off between reviving the economy and establishing a sustainable basis for longer-term growth? Unfortunately there is. Beijing has run out of good options to further stimulate the economy as a strategy to buy time until western economies rebound.

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