Iran’s new president-elect Hassan Rohani is being praised as a “moderate” who might bring change to Iran and transform Tehran’s international relationships. ”What does he want?” is the question most analysts now ask, and, critically, “What can he achieve?”

The answer may be: a great deal. If he is given the right support — domestically and internationally.

For Rohani possesses the single most important qualification for any president in Tehran: He knows how to negotiate the pit of vipers that is Iranian politics.

Rohani has survived for more than 30 years in Tehran. He is the Beria of the Islamic Republic – as able as Laventy Beria to skillfully negotiate the whims of his autocratic masters to safeguard his position at all times.

As a cleric of the Islamic Republic, who followed its founder, Ayatollah Ruhollah Khomeini into exile in Paris, Rohani is a true child of the Islamic Revolution. Yet he is also, comparatively speaking, a “moderate.”

His first post-election promises to improve Iran’s image are positive — contrasting starkly to President Mahmoud Ahmadinejad’s 2005 arrival to the world stage with an offensively defiant speech at the United Nations.

Whether Rohani will deliver, however, is another matter.

But he has already vowed to release Mir Hussein Mousavi and Mehdi Karoubi, the two reformist leaders held under house arrest since 2011. Iran’s supreme leader, Ayatollah Ali Khamanei, is likely loathe to free the men he blames for the unrest that so badly shook the regime in 2009. So this will be Rohani’s first test — of his sincerity and, more importantly, his ability to get things done.

There have already been some positive changes in Tehran since the election. Internet censorship, according to my friends in Iran, has eased somewhat since Saturday. Many long-blocked reformist sites are mysteriously accessible.

Yes, Rohani is only the president. He does not run the country — which is under the tight control of the supreme leader, Ayatollah Ali Khamenei.  But anyone who thinks the Iranian president makes no difference should spend some time in Iran.

I was there in 2005. when Ahmadinejad had just taken office — succeeding the more reformist Mohammad Khatami. Ahmadinejad rapidly set about rolling back the freedoms his predecessor had instituted. Newspapers closed down almost daily. My female friends were roughly accosted on the street by state officials unhappy with their revealing veils and overtly Western clothing.

Rohani can make a difference to ordinary Iranians. As president he is in charge of the economy — Iran’s greatest weakness. International sanctions have slashed the country’s oil earnings, and inflation levels are devastating. Tehran needs to alleviate at least some of the economic pressure before it morphs into social unrest.

We could be witnessing that most necessary of things in international politics: good timing. For Rohani’s ascension to power combines with Tehran’s desperate need for sanctions relief.

This coincidence of forces could persuade Khamenei to bend. The supreme leader asserts that the Islamic Republic’s very essence is to stand up the “Western aggressor.” Sanctions are not negotiated, they are “resisted.

But Iran’s leaders have compromised before in the national interest. They may do so again — and Rohani may be the man to do it.

For this to happen, though, he will have to make good on his promise to heal Iran’s international relations — his biggest challenge. Can he do it?

Consider how and why he made the boldest decision of his long political career: to suspend Iran’s uranium enrichment program.

He announced this on Oct. 21, 2003 inside Sa’dabad, the shah’s old palace in north Tehran, at a meeting with the foreign ministers of France, Germany and Britain.

It was a fraught time in the nuclear crisis, which had begun in August 2002. when the Iranian opposition group, the MKO, revealed full details of two nuclear plants in Iran and brought the world’s suspicion down on Iran. Washington was then seeking to drag Iran to the Security Council — repeating its actions that led to the toppling of Saddam Hussein in Iraq.

Rohani was particularly nervous. He had battled hardliners (who objected to negotiations on principle) to arrange the Tehran meeting. Now, inside Sa’dabad, no one could agree on anything.

After almost two hours of fruitless talks, Rohani requested a pause in the negotiations. He used this to make two calls: one to then-President Khatami, and one to the supreme leader’s office.

Iran must suspend enrichment, he told Khatami, or face possible military consequences. Khatami agreed. Rohani then called Khamenei’s office — but could not get hold of his boss. The supreme leader was most likely ducking the call, realizing the danger of the situation but unwilling to personally countenance a suspension.

So Rohani decided to act on his own initiative. When the meeting resumed, he announced he was taking a huge, personal risk, since he had received no instructions on this. But he said he willing to suspend uranium enrichment while negotiations on the overall nuclear file took place.

It remains the biggest diplomatic breakthrough in the history of the nuclear crisis.

The Tehran Agreement resulted, almost entirely, from Rohani’s understanding of the need to compromise, his ability to negotiate with the West and, most critical, his ability to make decisions that he knows are unpalatable to the supreme leader.

If the regime wants to make life easier for itself, then such decisions need to be made once more. Rohani is unlikely to be able to bring democracy to Iran. But he has a chance of lessening its international isolation, and its suffering.

During his presidential campaign, he repeatedly pointed out that on his watch as chief nuclear negotiator (from 2003 to 2005) Iran was never referred to the Security Council and suffered none of the sanctions currently crippling it.

Now, the big question is: Will he be allowed to do so?

Even in desperate economic times it won’t be easy. Khatami promised to bring change to Iran in 1997. He did — but it was temporary and largely cosmetic. Hardliners stifled his efforts to liberalize the Islamic Republic at every turn.

But Rohani is not Khatami — whose only public office before taking office was running Iran’s National Library. Rohani has been a player in the Islamic Republic’s political life since its founding in 1979. Consider that even Ahmadinejad ultimately fell afoul of Khamenei and saw his influence wane dramatically — he will need all his political skills and experience if he is to avoid the same fate.

Rohani’s power is limited, but he can change the tone of Iran’s diplomacy; and, if allowed, he can compromise on the nuclear program.

This time, Khamenei refrained from meddling with the election results. He should now refrain from meddling in Rohani’s attempts to undo the considerable damage of the Ahmadinejad years.

If Khamenei allows him the freedom to negotiate as he sees fit, he may just be able to help make the diplomatic breakthrough the world is waiting for.

PHOTO (Insert A): Lavrenty Beria sits with Joseph Stalin (R) and his daughter (center) in an undated photograph. WIKIMEDIA COMMONS

PHOTO (Insert B): Supporters of moderate cleric Hassan Rohani celebrate his victory in Iran’s presidential election on a street in Tehran, June 15, 2013. REUTERS/Fars News/Sina Shiri

PHOTO (Insert C): Iranian Supreme National Security Council Chief Hassan Rohani (L) welcomes European Foreign Ministers Jack Straw of Britain, Joschka Fischer (R) of Germany and Dominique de Villepin (2nd-R) of France at Tehran’s Saadabad Palace, Oct. 21, 2003.  REUTERS/Morteza Nikoubazi

The effects of climate change, driven by carbon pollution, hit Americans harder each year. Extreme weather events like hurricanes, wildfires and droughts are growing ever more frequent and severe.

Beyond our borders, these changes are hitting developing nations.

Since our nation’s founding, America has stood as an example for the world. Now, we owe it to ourselves and to other nations, who look to Washington, to lead the way on climate change by putting a price on carbon pollution and taking other steps to minimize the harm being done to developing nations — and our own.

In many of the world’s poorest regions, the sun scorches drought-stricken farmland and parches freshwater sources. Fierce storms bring ravaging floods. Warming, rapidly acidifying oceans and shifting seasons drive off economically valuable species and foster pests and disease.

This year, the worst flood in a decade killed at least 38 people in Mozambique and left 150,000 homeless. Warmer weather allows malaria-bearing mosquitoes to move into previously unaffected altitudes, infecting cities like Nairobi, which had purposely been built above the “malaria line.” Ten of the 15 largest cities in the developing world, including Shanghai, Mumbai and Cairo, are at risk of flooding from rising sea levels or coastal storm surges. Rising seas are swallowing low-lying land in countries such as Bangladesh and India.

Climate change endangers much of the world economy as well. Economists calculate that a 3.5°F rise in global temperature would reduce global gross domestic product by 1 percent. But loss will be 4 percent in Africa, and 5 percent in India. The United Nations estimates that environmental disasters could drive as many as 3 billion people into extreme poverty by the year 2050.

These regions face a crisis not of their making. Developed countries have churned out two-thirds of all the carbon dioxide pollution since the Industrial Revolution — one-quarter of that from the United States alone.

We have much to gain here at home from efforts to mitigate the effects of climate change: safer coastal communities, healthier farming and fishing industries, and cleaner air to breathe. But the American experiment has always been about more than that.

Indeed, as one of the largest emitters of carbon pollution, the United States has a responsibility to help emerging nations adapt to the stark reality of a changing climate, lest, as Daniel Webster warned, our own example “become an argument against the experiment.”

We are now taking important steps to help poorer nations cope with climate change. Indeed, federal agencies, from the U.S. Agency for International Development and the Environmental Protection Agency, to the Agriculture and Defense Departments, support adaptation strategies in the developing world. We provide financing to support construction and hardening of physical infrastructure. We make available technology to improve weather forecasting and irrigation techniques. While these physical adaptation programs are crucial, the crisis of climate change also requires political and diplomatic adaptation.

This is the mission of the State Department’s Environment, Science and Technology and Health (ESTH) officers. These officers engage on both a bilateral and a regional basis to promote good environmental governance, enable sustainable trade practices, advance resource and wildlife conservation, and improve access to healthcare. Many work closely with our allies around the globe, helping make communities more resilient to the devastating effects of climate change.

This is still a small effort. As of 2011, 260 of the State Department’s more than 13,000 Foreign Service officers handled environment, science, technology and health issues in our embassies. Only 76 were full-time ESTH officers. Theirs is vital work. It is worth replicating on a larger scale.

The United States must also set an example by putting a price on carbon pollution. I’m working with Representative Henry Waxman (D-Calif.) and others to finalize legislation that would do so. Right now, the big polluters pump billions of tons of carbon into our atmosphere, forcing the rest of us to pay the price through higher healthcare costs, higher rebuilding costs after carbon-driven extreme weather events, and more.

Our proposal would put those costs back on the polluters. It would generate billions of dollars in new revenue, which could produce substantial benefits for the U.S. economy. But, just as important, it would improve the global environment by encouraging reduced emissions. It would also send a message that we are ready to lead once more on one of the great issues of our time.

The effects of more than a century of Western pollution bear heavily on less-developed countries. The eyes of the world are on us. Without concerted action, we run the risk of allowing climate change to destabilize entire nations — and their confidence in America’s leadership.

PHOTO (Insert A): An aerial view shows the path of destruction in the aftermath of a tornado, at a neighborhood in Moore, Oklahoma May 21, 2013.  REUTERS/Rick Wilking

We bristle at the scent of whistle-blowers for atavistic reasons: They've violated the norms that bind the group together and must be scorned and punished, and their only allies are like-minded individuals who've deserted the pack—or joined opposing packs—and portions of the press, which occupies a floating niche somewhere between the individual and the group that allows it to thrive on such principled perfidy.

But even the press in aggregate is not a friend to whistle-blowers, as its recent treatment of Snowden attests, what with the deep dives into his teen years (including photos), his education and employment history, his reputation as a loner and a "brainiac," his pants-down hijinks, his online scribblings, his dancer girlfriend, his predilection for (in his own words) "post-coital Krispy Kremes." Squeezing every possible query at every known commercial database, journalists worldwide have aped the National Security Agency's snooping skills to track down Snowden's friends, associates, neighbors, schoolmates, relatives and colleagues to instapaint his portrait.

No matter how generously you read the team portrait, Snowden comes off as a bit of a cocky know-it-all. And how could he not? He did a bodacious, criminal thing; threatens to commit additional acts of criminal bodaciousness; and maintains the cool-customer persona in his video and print interviews. And he comes off as a little squirrelly and ego-swollen.

But what mortal wouldn't come off a little squirrelly and ego-swollen after nonstop scrutiny by the press, even if they hadn't leaked NSA secrets? I guarantee you that if the press ever gets around to vacuuming your every posting, scrapbooking your most dishy teen pix, and interviewing all the people in your past, it will depict a creep of some variety. Not because you're a creep but because the language and methodology of journalism are ill-equipped to capture normalcy—even when its subjects project normalcy. Journalism is about finding flaws and magnifying them, and surely someone who would spill massive loads of state secrets must contain a few broken parts, right?

Whether Snowden is more psychologically integrated than your average 29-year-old makes for stimulating conversation and fun clicks, but it's not really germane to the secrecy "debate" that even President Barack Obama claimed to "welcome" last week. Once we (the press and readers) exhaust ourselves on the Snowden, Up Close and Personal, angle, the debate will likely be interrupted, just as the debate about the Pentagon Papers was interrupted by the White House back in 1971, when Daniel Ellsberg dumped them to the press.

About two weeks after the New York Times began publishing the papers in June 1971, President Richard Nixon told National Security Adviser Henry Kissinger and Attorney General John Mitchell that he didn't want Ellsberg to get a fair trial for leaking. "Let's get the son-of-a-bitch in jail," Nixon said. "Don’t worry about his trial. Just get everything out. Try him in the press. Try him in the press. Everything, John, that there is on the investigation, get it out. Leak it out. We want to destroy him in the press. Is that clear?"

As Tom Wells wrote in his 2001 book, Wild Man: The Life and Times of Daniel Ellsberg, "The FBI pursued leads on Ellsberg's past, personality, and lifestyle." The White House could easily tag Ellsberg as a sex maniac because he had loads of sex and liked to talk about it; a pervert because he collected pornography; as nuts because he saw a psychiatrist; and a swinger because, as Gay Talese wrote in Thy Neighbor's Wife, he swung. This, of course, had nothing to do with the substance of the Pentagon Papers, but it was the weapon Nixon—who was bragging to his White House underlings that he had convicted Alger Hiss in the press "before he ever got to the grand jury"—liked to stockpile.

Nixon's men planted with conservative columnist Victor Lasky the baseless smear that Ellsberg had given the papers to the Soviet Union, as well. In a memo to Nixon aide John Ehrlichman, White House special counsel Charles Colson wrote (pdf) of his disappointment with the response to Lasky's column, "which got the predictable reaction because of its author," and of the similar briefings he'd given to Howard K. Smith of ABC News and Jerald terHorst of the Detroit News to "develop the Ellsberg conspiracy." I suspect we won't have to wait long for the "Snowden conspiracy" to manifest itself. Just the other day, Bill Gertz of the Washington Free Beacon reported Pentagon "concerns" that Snowden might give intelligence secrets to the Chinese. (He rejects the notion that he’s a Chinese spy.)

Compare Ellsberg's treatment to early press coverage of Snowden's personal life, which injured his standing. Not for a moment do I allege that the Obama White House has assigned a Plumbers unit to spread the hype. I allege something much worse—the readiness of some in the press to contort into something bizarre the sort of behaviors and personal history they would shrug off as "normal" if exhibited by a family member. Is Snowden paranoid? Well, yes, they're after him, aren't they? Wouldn't you be? Is Snowden a tad grandiose in his interviews? Well, yes, but if you were the leaker and had never taken media training classes, you'd probably sound grandiose in your interviews. Do his statements seem unsatisfying and inconsistent? Well, wouldn't yours if you were attempting to describe the entirety of the national security state in such limited space?

Although Snowden has been exiled for breaking the compact he made with his employers and his government, his rebellion rings too many notes from heroic literature for us to automatically dismiss him. How many times have we read the story (or played the video game) about the brilliant and brave young man who hears the call; defies the established order; goes on a sacrificial quest to a magical place where he defeats evil monsters that menace mankind; battles madness; and after many, many tests (and at some personal loss) finally returns with a boon for all mankind? The rebel in this version even has a pole-dancing princess that he's been separated from! Snowden combines elements of Luke Skywalker, King Arthur, Frodo Baggins, Harry Potter, Dorothy from The Wizard of Oz, Jesus Christ, and Neo from The Matrix into one modern tale. Being an egomaniac and a narcissist are just part of the job description.

As a student of anime and a cultural child of the Star Wars saga, Snowden can't help but notice that by stealing the NSA documents and flying off to Hong Kong to share them, he's living our most enduring myths, following the instructions laid down in church, in books, at the cinema, on television, in comic books and in video games. And unlike earlier whistle-blowers, who ordinarily suffer for decades for their transgressions, Snowden appears to be working from a complete script in which he's the ultimate victor.

******

Right now I think we're still in the "battle monsters and madness" phase. I'll update when Edward Snowden action figures are released. Send ideas for future quests to Shafer.Reuters@gmail.com. I wear a toga and sandals on my Twitter feed. Sign up for email notifications of new Shafer columns (and other occasional announcements). Subscribe to this RSS feed for new Shafer columns.

PHOTO: A bus passes by a poster of Edward Snowden, a former contractor at the National Security Agency (NSA), displayed by his supporters at Hong Kong's financial Central district during the midnight hours of June 18, 2013, while Snowden is engaged in a live chat online believed to be in Hong Kong. REUTERS/Bobby Yip

Apple is not unique in its attraction to the game of monopoly and tax dodging, but it sure is creative. The firm has helped to pioneer the exploitation of loopholes and the setting up of subsidiaries where profits are stashed offshore through a fantastically complex maneuver known as the “Double Irish with a Dutch Sandwich” which seems to involve, among other things, a mysterious Irish company with no employees. The upshot? Apple pays only 2 percent of its $74 billion in overseas income in taxes. According to Senator Carl Levin, that translates to ducking $1 million an hour.  Surely Apple qualifies for the tax avoidance Olympics.

During a recent Senate hearing, CEO Tim Cook spun Apple’s tax stance as a model of corporate stewardship, explaining that the firm had a duty to shareholders to pay as little as possible. Many senators agreed, including Rand Paul, who offered that the committee should “apologize” for forcing Apple to sit through a “show trial” concerning “a bizarre and Byzantine tax code.”

Few would defend the U.S. tax code as fair. But what about Cook’s notion of his responsibility to shareholders? Economist and business historian William Lazonick at the University of Massachusetts Lowell has studied the emergence of the idea that companies have a duty, first and foremost, to maximize profits for shareholders — a line that allows executives to argue that doing things like avoiding taxes is not only a good business practice, but a solemn duty.

According to Lazonick, this philosophy took off in the go-go ‘80s and is linked to the financialization of corporations that started in the ‘60s. In 1983, two financial economists, Eugene Fama of the University of Chicago and Michael Jensen of the University of Rochester, wrote two papers promoting the idea that corporate executives should focus their attention on maximizing returns to shareholders because they are the ones who make the investments and take the risks. Jensen landed a job at Harvard Business School in 1985 and, as Lazonick writes, “soon shareholder value ideology became the mantra of thousands of MBA students who were unleashed on the corporate world.”

Many have come to believe that maximizing shareholder value is actually a legal requirement, but as Vanderbilt law professor Margaret Blair explained to Congress in 2008, that is almost never true. The shareholder value ideology is nothing more than a trend, and perhaps a very bad one.

One of the problems with the Fama/Jensen argument is that shareholders are not the only stakeholders in companies who invest and take risks. Employees do this. So do taxpayers. Just look at the case of Apple.

During his Senate grilling, Cook said, “the most important objective at Apple will always be creating the most innovative products.” That sounds good, but Cook seems to have forgotten that it was the taxpayers, through the U.S. government, who funded many of the key innovations that makes Apple’s products possible. The iPhone would not be the iPhone without touch screen technology. The fact that you can use your phone to guide a mountain hike with GPS, ask for a quick weather-check from your voice-activated personal assistant, and even access the Internet, are all examples of the magic that happens when the government takes risks and spends money to drive innovation that eventually helps companies like Apple flourish.

Economist Mariana Mazzucato has noted that executives of companies like Apple enjoy boasting about their entrepreneurial muscle, but if you look closely, you see that they have actually “surfed the wave of U.S. government-funded investments.” Siri, for example, started out as a twinkle in the eye of government officials who envisioned software that could help overloaded military commanders. In 2003, the Defense Department’s investment arm, DARPA, chose the nonprofit research institute SRI International to lead a gigantic, five-year push to build a virtual assistant that ultimately provided the inspiration for Siri. The Defense Department’s $150 million financial support made it possible for artificial intelligence experts to work together on a mission likely far too risky for most corporations. Apple, which bought Siri in 2010, has reaped the benefits of that taxpayer-funded research.

That’s not all. Mazzucato points out that in its early stages, Apple enjoyed funding from the U.S. government’s Small Business Investment Company program — well before the venture capitalists came on the scene. Later, once the company found its footing, Apple was under constant siege from rivals. Where does Apple turn when it wants to guard patents against competitors? The U.S. court system, of course. Where does it look for favorable international trade agreements? To government agencies, naturally. Then there’s the infrastructure and networks — things like electricity grids and public highways — that allow Apple devices to find their way to customers and do all those things that make us marvel. And you can’t forget the public schools and universities that educate Apple’s workers, including many of its executives, like Cook, who went to Auburn.

Taking advantage of all this taxpayer largesse without giving much back is what some might call a free ride. Taxpayers have invested a lot in Apple. Maybe it’s time for Apple to “think different” about returning the favor. Otherwise, a lot of Apple’s customers may start doubting the story that St. Patrick drove all the snakes out of Ireland.

PHOTO: Apple CEO Tim Cook testifies at a Senate homeland security and governmental affairs investigations subcommittee hearing on offshore profit shifting and the U.S. tax code, on Capitol Hill in Washington, May 21, 2013. REUTERS/Jason Reed

“All the past we leave behind.” So insisted America’s poet, Walt Whitman, a man who would not be encompassed by any one identity — who refused to be constrained by birth, by place, by experience.

Americans, following Whitman, have long celebrated their nation as a redemptive land, a place where the past leaves few traces, where people possess almost infinite capacity to rewrite their own stories and restart their lives.

The nation’s politicians have long enjoyed the license to reinvent themselves that Whitman celebrated. From President William Henry Harrison, the Virginia aristocrat who recast himself as the “poor farmer of North Bend” summoned from his log cabin, to President George W. Bush, the Yale and Andover-trained preppie turned Texas oilman, they have fabricated entirely new identities. Even more remarkable, politicians ousted from office for a wide range of lies, scandals and even crimes have won re-election, sometimes from the very same voters that previously dismissed them.

Consider Mark Sanford, the disgraced South Carolina governor who recently won re-election to Congress after being driven from office when a “walk along the Appalachian Trail” turned out to be a not-very-good cover story for an affair with his Argentine mistress. Former Representative Anthony Weiner, who is now running for mayor of New York, has become the latest in a long line of disgraced officials seeking not only absolution, but political resurrection.

It is an ancient and familiar feature of American politics: Voters have been willing to re-elect their fallen leaders, whether they found them in the arms of a stripper, the pocket of corrupt supporters or even behind the bars of a penitentiary.

What explains this willingness not only to forgive, but to hand back power to these straying politicians? To be sure, the profoundly religious nature of the United States contributes to this ethos of forgiveness. In a nation where so many experience spiritual regeneration, “born-again politicians” are no oddity.

Powerful secular traditions reinforce this tendency. After all, millions immigrated to the United States, altering their names, their stations and their destinies — experiences that inspired abiding admiration for people who make new starts.

But another venerable tradition also played a pivotal role in Americans’ willingness to forgive fallen leaders: partisanship. As deposed politicians have found from the 1790s to Sanford in the heavily Republican South Carolina of today, voters most happily forgive fallen leaders when they champion their partisan interests in tough fights. Bribery, drunkenness, infidelity, even racketeering: When the villain’s one of us, forgiveness comes that much more easily.

History offers several instructive examples.

Among the first American politicians to navigate the cycle of controversy and redemption was Matthew Lyon. He immigrated to Vermont from Ireland and fought (or, as opponents chided, evaded combat) in the American Revolution. Lyon then published a highly partisan newspaper and won a seat in the House of Representatives. In Congress, the ardent Jeffersonian spit in the face of a Federalist colleague and when the recipient of that insult accosted him with a cane, Lyon fought back with a pair of fireplace tongs.

Convicted for violations of the Sedition Act, Lyon, while in prison, published an account of his trial and ran successfully for re-election. After his second term in 1801, Lyon faced new charges in Vermont for libel. He ultimately moved to Kentucky and there twice more won election to Congress.

He achieved this by repeatedly persuading his constituents that he was as much a victim as perpetrator. In returning him to office, voters not only granted redemption to a politician with a checkered past and a violent temper, but also vindicated Jeffersonian charges of Federalist tyranny.

A similar mix of forgiveness and gratitude motivated 20th-century voters to return to office two urban bosses notorious for corruption, though they also campaigned from behind bars.

In Massachusetts, fabled pol James Michael Curley served as a congressman, governor and four-term mayor of Boston. The “rascal king” modernized his beloved city — building parks, roads, bridges and hospitals, while making sure his supporters received lavish public works contracts and his constituents got jobs and services.

Curley twice ended up in jail on fraud charges. During both sentences Boston voters forgave and forgot — electing him to the Board of Alderman while he was in prison in 1904 and enthusiastically greeting his return to City Hall after he spent five months of his final mayoral term as an inmate in the federal correctional facility in Danbury, Connecticut.

The good people of Union City, New Jersey, showed even greater generosity toward their charismatic mayor, William J. Musto. An early supporter of bilingual education, with a famously large appetite for Italian sandwiches and a fondness for the racetrack, Musto went to prison in 1982 for diverting funds meant for public schools to mobsters and shady contractors. Yet almost immediately after being sentenced to serve time on federal racketeering charges, Musto won another term as mayor of Union City.

American voters have offered absolution for personal malfeasance as well as abuses of the public trust. In October 1974, Washington police stopped the car of Arkansas Representative Wilbur Mills, long-serving chairman of the House Ways and Means Committee, for driving at night without headlights. The officers found Mills intoxicated, his face scratched from a scuffle with his passenger, a stripper from Argentina who worked under the stage name of Fanne Foxe. (She attempted to elude the police by leaving the car and jumping into the Tidal Basin.)

A few days later, newspapers reported that Mills frequented the Silver Slipper, a strip club where Foxe performed as “the “Argentinian Firecracker,” spent lavishly at that establishment and often got into arguments. In addition, when police dragged Foxe out of the water, Mills could not explain why she had two black eyes.

Yet one month later, Mills’ constituents re-elected him with nearly 60 percent of the popular vote. Their patience went only so far, however. After a second drunken incident, Mills acknowledged his alcoholism, apologized to his family and resigned his position.

Last month South Carolina’s voters returned Sanford to Congress, just a few short years after driving him from the governor’s mansion when he tearfully confessed, in an extended news conference, to lying and adultery. “We have a tradition in the South, and in South Carolina, of forgiveness,” Sanford noted last month, expressing gratitude for “this larger notion of human grace.”

Like his infamous predecessors,  Weiner hopes to tap into the strain of redemption in American public life — to benefit from what Whitman identified as a national willingness to leave the past behind. Weiner has apologized repeatedly and asked for some of that same forgiveness that Sanford received.

But in an overwhelmingly Democratic city where Weiner’s principal opponents come from the same side of the aisle, the man famous for his inappropriate tweets may need more than grace. Invoking a great American tradition, the former congressman who made his political reputation as a thorn in the side of national conservatives, needs to do more than convince constituents that he has repented his sins.

Like Musto and Curley and Lyon, Weiner must prove that he can still deliver the partisan goods.

PHOTO (Insert A): Representative Anthony Weiner (D-N.Y.) pauses as he announces his resignation from the House of Representatives during a news conference in Brooklyn, New York, June 16, 2011. REUTERS/Shannon Stapleton

PHOTO (Insert B): South Carolina Governor Mark Sanford speaks to the media about his secret trip to Buenos Aires, Argentina and admits to an extramarital affair at the State House in Columbia, South Carolina, June 24, 2009. REUTERS/Tim Dominick/The State

PHOTO (Insert C): Boston Mayor James Michael Curley, who spent time in jail even while in office. LIBRARY OF CONGRESS

PHOTO (Insert D): Representative Anthony Weiner (D-N.Y.) reacts as he speaks to the press in New York, June 6, 2011.REUTERS/Brendan McDermid

We just had five congressional hearings about the Internal Revenue Service, full of sound and fury, but, we now know, signifying nothing.

Despite all the hoopla and headlines about IRS personnel targeting conservative tax-exempt organizations, there is no real scandal here. IRS staffers acted not only legally but, given their impossible task, quite rationally.

They forgot, however, that they not only work in a political fishbowl, they swim in a sea of politics. Faced with internally contradictory regulations laid out in vague terms, and with little guidance from higher-ups, they botched it. Republicans may now finally get the chance to pour unlimited amounts of secret money into elections.

The Internal Revenue Code provides a tax exemption under section 501(c)(4) for nonprofit groups “operated exclusively for the promotion of social welfare” (emphasis added). In classic oxymoronic bureaucratic doublespeak, however, a 1959 regulation decided “exclusively” really meant “primarily.”

Though the courts have ruled that a tax-exempt group’s political activity must be “insubstantial,” lawyers have argued this means it can be as much as 49 percent – and the IRS has gone along. Even that has been flagrantly violated by both Democratic and Republican 501(c)(4)s.

The regulation also states “direct or indirect participation in political campaigns” to support or oppose political candidates “is not considered ‘promotion of social welfare.’” “Participation” in a political campaign is determined, however, by considering “the facts and circumstances.”

This provides no real guidance. Not surprisingly, the Treasury inspector general for tax administration, who investigated the IRS “scandal,” concluded that personnel in the Exempt Organizations Division “lack knowledge” of what 501(c)(4)s are allowed to do.

This division receives about 60,000 applications for nonprofit status each year, largely for 501(c)(3)s that don’t engage in any political campaign activity. With so many applications, the division has a heavy backlog. After the 2010 Citizens United and SpeechNow decisions, the floodgates were further opened to huge amounts of campaign money whose donors wanted secrecy. As one Tea Party leader noted: “It would have a very chilling effect on our donor base if they thought  [their names] would be made public.” So 501(c)(4)s became the most-favored campaign vehicle.

To operate as a 501(c)(4), it is not necessary to be officially approved. Nonetheless, the number of these applications, many involving complex questions, almost doubled in less than two years, from 1,741 in 2010 to 3,357 in 2012. All the 2010 applications went to the Cincinnati exempt organization office, which was quickly overwhelmed.

In addition, the IRS budget was cut by 8 percent, or nearly $1 billion. The original EO roster of 946 employees was reduced to 876. Employee training has been especially hard-hit, falling 83 percent since FY 2010.

To deal with the wave of 501(c)(4) applications, IRS personnel looked for ways to quickly spot groups that might warrant further inquiry. A manager at the Cincinnati EO office, John Shafer, a self-described “conservative Republican,” decided to focus on Tea Party cases. Shafer assigned a subordinate to develop the initial search criteria.

This was revealed in a transcript of a private interview with IRS personnel conducted by House Oversight and Government Reform Committee Chairman Darrell Issa (R-Cal.). Yet this information was not public until Sunday, June 9, when Representative Elijah Cummings (D-Md.) released a video and transcript of the interview.

Shafer’s subordinate, according to the testimony, said “no one” from Washington “said to make such a search.” The division focused on organizational names, including “Tea Party,” “patriots” and “9/12” (a Glenn Beck group). This approach using search terms was similar to IRS practice in other investigations.

These groups seeking tax-exempt status had spent most of the previous summer and fall engaged in rough political warfare aimed at Democratic members of Congress. In a well-organized campaign, town hall meetings of Democratic House members were disrupted; the elected official was hanged in effigy; and Democratic programs attacked as “socialistic” and even “Nazi.” All this played out on national television and websites.

The IRS did not only pick on conservative groups. It also flagged liberal groups, using word searches for “progressive” in their names, though fewer. Data just released of 175 approved applications reveals that about 122 were conservative and 48 liberal or simply publicly involved, with six indeterminate. Right-wing or conservative groups, however, were responsible for more than 80 percent of the roughly $260 million spent by 501(c)(4)s on the 2012 election cycle.

Though some of the 300 groups under investigation complained about IRS harassment, tax experts and former IRS officials contacted by the New York Times said the groups’ actions “provide a legitimate basis for flagging them for closer review.”

For example, the Wetumpka Tea Party in Alabama sponsored training for a get-out-the-vote initiative dedicated to the “defeat of President Barack Obama”; the Ohio Liberty Coalition organized members to distribute Mitt Romney’s presidential campaign literature; and the CVFC, a conservative veterans group, bought radio ads in San Diego supporting Republican Michael Crimmins for the House of Representatives. Yet all still checked the “No” box when asked about any political activity.

The actions of CVFC were not unique. Five other 501(c)(4)s assured the IRS that they would not spend any money on elections, but then contributed more than $5 million as a group, largely to support Mitt Romney, according to two recent ProPublica reports. In 2010, many conservative tax-exempt groups spent much more than that for GOP candidates. Some of these groups disbanded soon after the election.

Many conservative big spenders also lied to the IRS. The Koch brothers’ Americans for Prosperity spent $39.4 million on political ads and organizing in 2010, helping Republicans to sweep the midterm elections that year. But before those elections, when the organization applied to the IRS for 501(c)(4) status, it said it would spend nothing on electoral campaigns.

These false statements are probably the only real criminality in this IRS scandal. Yet House Speaker John Boehner (R-Ohio) is still insisting that someone must go to jail. He may get his wish – but it may not be to his liking.

To date, no conservative group, flagged or otherwise, has been turned down. This is almost certainly a mistake – and probably an overreaction to the protests from angry Republican members of Congress, who were responsive to the Tea Party complaints. By contrast, several liberal applications were rejected.

Some GOP complaints were justified – though not as many as these organizations claimed. There were indeed some lengthy delays. These resulted from a failure of communication and misunderstandings between Washington and Cincinnati – which led the division to stop processing applications from October 2010 through November 2011. That lengthy a delay was inexcusable and shows an appalling lack of supervision.

The EO staff was justified, however, in asking for more information than was disclosed in the applications. The groups may have deeply resented the repeated requests for donor names, but the Tax Court had already approved this request – not once but several times. But after the outcry, the agency withdrew all its requests.

Liberal groups also faced delays and many follow-up questions. Progress Texas was asked 21 additional questions and had to wait 479 days for approval.

On the other hand, a few agents clearly overstepped the bounds. One agent advised a group not to protest against abortion at a Planned Parenthood clinic, and there were other excesses. These seem to have been isolated incidents, however, for the IRS-targeted groups who complained at one congressional hearing had virtually all engaged extensively in electoral campaigns.

So far there is no evidence that the IRS division has done anything criminal or otherwise unlawful. Nor did the inspector general find any such wrongdoing, only ignorance and mismanagement. He specifically found that the IRS “was not politically biased.” He also found no evidence tying the administration to what happened, despite the almost desperate efforts by Republicans to find such a tie.

Ultimately, the IRS is guilty of not having trained its EO personnel to be politically sensitive, and of a management failure to closely supervise so sensitive a matter.

As rewritten and interpreted by the IRS, the tax-exempt statute cannot be applied in any clear and consistent way – particularly by a shell-shocked, under-staffed and under-trained agency. The agency’s primary purpose is to collect money, yet it was mandated to evaluate partisan political activity.

The only way the IRS can properly apply the law is as Congress wrote it: 501(c)(4)s must limit themselves exclusively to public welfare activity, and not engage in any political activity at all.

Odds are, this won’t happen. Because the IRS has now been condemned so harshly on all sides, it may approve just about anything. Big money will likely be able to continue spending billions of secret dollars – and making a mockery of democracy.

That’s the real scandal.

PHOTO (Insert A): Representative Darrell Issa (R-Calif.) (R), chairman of the House Oversight and Government Reform Committee, confers with ranking member Representative Elijah Cummings (D-Md.) (L) during a hearing on targeting of political groups seeking IRS tax-exempt status, on Capitol Hill in Washington, May 22, 2013. REUTERS/Jonathan Ernst

PHOTO (Insert B): J. Russell George, Treasury inspector general for tax administration of the U.S. Treasury, testifies before the Senate Finance Committee in Washington May 21, 2013. REUTERS/Gary Cameron

PHOTO (Insert C): Director of Exempt Organizations for the Internal Revenue Service Lois Lerner (L) is shielded by Capitol police officers as she boards an elevator after being excused from a House Oversight and Government Reform Committee hearing on targeting of political groups seeking tax-exempt status from by the IRS, on Capitol Hill in Washington, May 22, 2013.  REUTERS/Jonathan Ernst 

PHOTO (Insert D): David (L) and Charles Koch in a combination image. REUTERS/Courtesy Koch Industries

President Barack Obama and Russian President Vladimir Putin are expected to discuss missile defense, their thorniest bilateral problem, at the G8 summit in Ireland on June 17 and 18. Previous talks between Russia and the North Atlantic Treaty Organization have floundered over the alliance’s refusal to give Moscow legal guarantees that the system would not undermine Russian nuclear forces.

But the diplomatic dance around missile defense cooperation has always been like Kabuki theater — with officials playing out their designated roles. There is only the illusion of real engagement.

Thirty years after President Ronald Reagan’s famous “Star Wars” speech, Washington is still light years away from developing technology capable of distinguishing missile decoys from real warheads. Yet the United States is again talking about this expensive missile defense program as a viable system.

To allay Moscow’s concerns, Washington has invited Russia to participate in the defensive system, helping NATO guard against Iran. But Moscow is unlikely to cooperate on a flawed system against a threat it doesn’t see as imminent.

So during this conference at Lough Erne Resort in Northern Ireland expect to see more luncheons, talks and coffee breaks. But don’t expect anything of military significance to happen. Which is for the best.

Missile defense cooperation between NATO and Russia could produce serious blowback. An alienated China may build up its nuclear arms, and create a domino effect — with both India and Pakistan shoring up their nuclear arsenals in response.

The irony of the entire charade is that the NATO system is known to have serious technological flaws and has never been scientifically tested. Why would Russia want to cooperate on an expensive system that does not work — especially against a threat from Iran and North Korea, which Russia discounts?

The defensive system is designed to intercept enemy warheads in the “midcourse” phase —  after launch and before reentry — several hundred kilometers up in space. The big problem, however, is that such a system can be easily short-circuited and rendered toothless.

The CIA’s top specialist in strategic nuclear programs attested to this in 2000. North Korea and Iran, he explained, “probably would rely…on readily available technology to develop penetration aids and countermeasures.” He continued, “These countries could develop countermeasures based on these technologies by the time they flight-test their missiles.”

Nothing has changed this calculus over the last decade. In fact, no dark technical secrets are needed to defeat the missile defense program.

The easiest countermeasures are still cheap inflatable balloon decoys, like the shiny ones at children’s birthday parties. Because the missile defense interceptors are designed to strike warheads during midcourse — in the vacuum of space — these balloons and any warheads would be traveling together, making it impossible to tell the decoys apart from the real thing.

An enemy bent on launching a missile attack against the United States could just inflate many balloons near the warhead. This would confuse the defense system, swamping it with fake signals. If the defensive system cannot discriminate between a warhead and the many decoys, it won’t work.

American scientists have repeatedly pointed out these weaknesses since the 1960s. Yet they have not been addressed, much less corrected.

The new director of the Missile Defense Agency, Vice Admiral James Syring, cited this key problem during House Armed Services Subcommittee hearings last month. Syring talked about “the very difficult problems of lethal object discrimination, limited inventory and cost per kill.”

He explained that the defense system is both costly and ineffective. If the missile interceptors can’t discriminate between the lethal object — the warhead — and the decoys, then limited (and costly) inventory is used up chasing fakes.

The Pentagon’s director of operational test and evaluation, Michael Gilmore, reaffirmed this challenge. “If we can’t discriminate what the real threatening objects are,” Gilmore said, “it doesn’t matter how many ground-based interceptors we have, we won’t be able to hit what needs to be hit.”

Similarly, Pentagon scientists reported “the importance of achieving reliable… discrimination [between the warhead and any decoys or debris] cannot be overemphasized.”

Missile defense, the scientists point out, is “predicated on the ability to discriminate” real warheads from other targets, “such as rocket bodies, miscellaneous hardware and intentional countermeasures.”

If “the defense should find itself in a situation where it is shooting at missile junk or decoys, the impact on the regional interceptor inventory would be dramatic and devastating!”

So NATO’s interceptor inventory would be exhausted in chasing decoy warheads. For the system still has this fundamental architectural flaw.

How did an untested and unworkable technology make it so far in the Defense Department procurement process? A recent Government Accountability Office report reveals that instead of flying before buying, the Missile Defense Agency has been doing the opposite. Its cart-before-the-horse methodology has resulted in “unexpected cost increases, schedule delays, test problems, and performance shortfalls.”

The agency’s “tests” are more like rigged “demonstrations.” The intercept team knows all the incoming missile’s parameters ahead of time — a luxury it won’t have during a real attack. Even with this, however, many “demonstrations” ended in dismal failure.

So, the question is: If Iran or North Korea could so easily circumvent this vaunted missile defense system, why are the Russians (and Chinese) so up in arms against it?

The answer is simple: Russian and Chinese military planners — like those at the Pentagon — are paid to be paranoid. They must assume the worst-case scenario. Which, in this case, means they must treat a missile system as being highly effective —  even when it isn’t.

Russian and Chinese analysts might also be worried about the potential for a major expansion in defensive missile arsenals; technical changes in the systems (such as nuclear-tipped interceptors); and the diversity and scale of sensor systems that are being brought online to support the system.

But the Russians have political as well as scientific concerns. The House Republicans, in particular, are creating diplomatic problems.

Representative Michael Turner (R-Ohio), former chairman of the Strategic Forces Subcommittee of the House Armed Services Committee, and other House Republican leaders have said that if the Obama administration hands over to Moscow technical data on the missile defense interceptors — as the White House has proposed — then this could persuade Moscow that the system is not targeting Russian missiles.

So while the administration has insisted it doesn’t intend to target Russia, the House Armed Services Committee leadership appears nostalgic for the Cold War — and wants to use the system against the Russians. Is it any wonder Moscow remains skeptical?

These worries about the capability and intentions behind the defensive system are beginning to give Moscow cold feet about its arms reduction commitments. The Russian articles of ratification to the New START arms reduction treaty allow Moscow to withdraw if there is deployment by the “United States of America, another state, or a group of states of a missile defense system capable of significantly reducing the effectiveness of the Russian Federation’s strategic nuclear forces.”

The Chinese, because of their smaller nuclear arsenal, have also been concerned about the expanding ship-based missile defense system. They fear it may be used to neutralize some of their deterrent forces. The bipartisan Strategic Posture Commission pointed out, “China may already be increasing the size of its ICBM [intercontinental ballistic missile] force in response to its assessment of the U.S. missile defense program.”

These stockpile increases will likely pressure India, and, in turn, Pakistan to also ramp up their nuclear weapon arsenals.

Again, the House Armed Services Committee leaders are fanning the flames. With Beijing in mind, these lawmakers are seeking to prohibit Washington from removing missile defenses from Asia — even if the threat posed by a nuclear-armed North Korea is eliminated.

So Russian and Chinese fears that the U.S. missile defense system has been developed to counter their strategic arsenals are being legitimized by these congressional legislators’ actions and statements.

What should we expect if — by some miracle — Russia and NATO reach an agreement on missile defense cooperation? Aside from being a waste of Russian taxpayers’ money, it is almost certain that China would react with alarm to such a development. As the bipartisan Strategic Posture Commission suggested, China would likely increase its nuclear arsenal at an accelerated pace.

Missile defense strengthens the hands of over-cautious, misinformed, opportunistic or hawkish elements within the Iranian and North Korean political and military establishments — as well as hardliners in Moscow and Beijing.

This interplay between unknown future capabilities and intentions, as well as domestic pressures for Moscow and Beijing to respond to NATO missile defenses would likely increase military expenditures and nuclear deployment.

So the central conundrum of midcourse missile defense remains that while it creates incentives for U.S. adversaries and competitors to increase their nuclear stockpiles, it offers no credible protection for the United States or its allies. Instead of focusing on this system, if Washington genuinely wants to achieve some new diplomatic breakthrough during the G8 meeting in Northern Ireland, it could focus on realistic mutual threats: For example, a U.S.-Russian plan to address the real threat from asteroids. Cooperating on this could indeed bring about rapprochement and goodwill.

Many in the policy community — even those who favor arms control — are advocating for Russia-NATO missile defense cooperation. But why should we expect Moscow to play nice and cooperate on an expensive and dysfunctional system?

Instead of indulging in this Kabuki theater, chasing the chimera of cooperation that is unlikely to happen — and could be disastrous if it did — Moscow and Washington should reaffirm that they will pare down their bloated nuclear arsenals unilaterally — regardless of how the flawed NATO missile defense plan develops.

PHOTO (Insert A): U.S. officials announce test prototype weapon that could lay the groundwork for a national missile defense system. Oct. 3, 1999. REUTERS/Archive

PHOTO (Insert B): Russian President Vladimir Putin (R) and Defense Minister Sergei Shoigu watch a parade on Moscow’s Red Square, May 9, 2013.REUTERS/Sergei Karpukhin

PHOTO (Insert C): United Launch Alliance Delta II rocket successfully launches the Space Tracking and Surveillance System Advanced Technology Risk Reduction mission for the Missile Defense Agency at Vandenberg Air Force Base, California, May 5, 2009.  REUTERS/United Launch Alliance/Carleton Bailie/Handout

PHOTO (Insert D): Representative Michael Turner (R-Ohio)

PHOTO (Insert E): Ground-based Interceptor breaks cloud cover, shortly after launch from Vandenberg Air Force Base, California, Sept. 1, 2006.REUTERS/Defense Department/Handout

“No right is absolute. And even the press has certain restrictions,” King told Fox News’s Megyn Kelly on Wednesday, “I think it should be very targeted, very selective, and certainly a very rare exception, but in this case, when you have someone who has disclosed secrets like this and threatens to release more, then to me, yes, there has to be, there should be legal action taken against [Greenwald].”

For all King’s bluster, he knows perfectly well that the U.S. is unlikely to prosecute Greenwald. No U.S. journalist has ever been successfully prosecuted for publishing classified information. This may seem counterintuitive. If it’s against the law to leak classified information, why is it legal for journalists to publish it?

The answer lies in a carefully engineered balance between the government’s prerogative for secrecy and the press’s freedom to report the news. Many core government functions, like national defense, depend on the state’s ability to maintain control of sensitive information. Officials and contractors with security clearances take an oath to keep the secrets they are shown and they are warned that if they fail to do so, they may be prosecuted.

Journalism is constitutionally protected because it serves as a check on power of all kinds. We count on journalists to expose wrongdoing and force transparency on the institutions that affect our lives. We want to live in a world where every decision maker knows that, at least in principle, her orders could end up on the front page of tomorrow’s paper, because the mere possibility of accountability serves as a check on abuse of power. Every decision maker needs to know that if she pushes her underlings to violate their core values, she is ultimately at their mercy.

In practice, not many people are willing to risk jail time in order to expose wrongdoing. However, if a figure like Snowden feels so strongly about an alleged injustice that he’s willing to risk jail time to reveal it, the public ought to be able to hear what he has to say. That’s why journalists need broad legal leeway to publish leaked information.

If a government has too much power to enforce secrecy it becomes unaccountable to its people. This lack of accountability increases the risk that the government will break the law behind closed doors and it also stunts the public’s ability to decide what the law should be. In the post-9/11 era, our leaders have assembled a huge and largely opaque national security bureaucracy that is supposedly tasked with keeping us safe from terrorism. The American people are largely left in the dark about how well these programs work, how much they cost, and what tradeoffs are being made between liberty and security. When secrecy is taken to extremes, it becomes paternalistic and anti-democratic. We couldn’t have a national conversation about whether the NSA should be tracking the  metadata of our phone calls until journalists revealed that the program existed.

Some Snowden critics have attempted to deny him the mantle of “whistleblower” because he leaked information about a program that was being overseen by the FISA courts. They maintain that a true whistleblower would only sound the alarm against an illegal program. However, just because a program is being overseen by a secret court doesn’t guarantee that it is constitutional. Only the Supreme Court can decide that. But as long as a program remains secret, there’s a Catch-22 in effect: The Supreme Court can’t review the constitutionality of the program until someone sues to challenge it, but if nobody knows they’ve been targeted by a secret program, nobody has standing to bring a lawsuit.

Snowden’s revelations broke that impasse. On Tuesday, the American Civil Liberties Union announced that it had filed a court challenge to the program. Snowden’s leak revealed that Verizon Business Network Services had been ordered to give up the  metadata for all the calls made by its customers. As a customer of VBNS, the ACLU has standing to sue.

The impact of Snowden’s leak provides a compelling example of what University of Chicago law professor Geoffrey Stone was talking about when he told the House Judiciary Committee that the solution to reconciling government secrecy and press freedom was to guarantee “both a strong authority of the government to prohibit leaks and an expansive right of others to disseminate them.” Someone should read those words to Peter King.

PHOTO: U.S. Representative Peter King (R-NY) talks to the media after meeting with House Speaker John Boehner (R-OH) to discuss the relief fund hold up in Congress for Hurricane Sandy victims at the United States Capitol in Washington January 2, 2013.   REUTERS/Gary Cameron 

As a teenager when World War Two was ending, he switched from chemistry and physics to study economics at Cornell because he feared, as did others, that when military spending was withdrawn the economy might retrench and sink back into a reprise of the Great Depression. It didn’t turn out that way.

Governments in the Western world switched from spending money on arms to spending on hospitals and schools and the buoyancy kept another slump at bay until the economy was on its feet. Fascinated by figures, as an academic Fogel applied quantitative methods used in economics to test whether historians’ hunches about the cause and effect of events were correct. His findings led to immense controversy and, eventually, a Nobel Prize.

He first tested whether, as was then commonly thought, railroads opened up America and provoked the surge in economic growth in the nineteenth century. When he looked closely at the data and ran it through computers, which had only recently become available, Fogel found that the great railroad barons had little to do with spurring growth.

Indeed, the building of railroads coast to coast amounted to a mere 2.7 percent extra growth. Different parts of America would have been turned over to agriculture, Fogel discovered, but the nation would have been almost as prosperous without Cornelius Vanderbilt, Leland Stanford, Jay Gould and the like.

The railroad barons made themselves immensely rich, but the nation was little richer for their energy and scheming. Traditional historians, disabused of their theory that America was founded upon the heroic individual efforts of “great men,” were furious.

Fogel then turned to an even more tricky subject: slavery in the Southern states. The conventional wisdom among Southern historians was that the emancipation movement achieved little and the Civil War was fought in vain because the use of slaves in the cotton trade was uneconomic and would eventually have disappeared without Abraham Lincoln or the Union Army.

Again using hard data, Fogel discovered that this version of history was flat wrong, though his findings would not make him popular among Northern historians either. His research revealed that slave masters generally looked after their charges well. They treated their human assets with the care that good farmers tend their livestock. Such cruel acts as whipping were comparatively rare and used mostly to intimidate slaves and make them more docile.

Fogel’s conclusion was that slavery would have operated in perpetuity had it not been for the political will to abolish it. Liberals who inappropriately accused him of excusing slaveholding -- he did not no such thing; he merely reported how the economics of slaveholding worked -- perhaps did not know that Fogel’s wife Edith was an African-American whom he referred to lovingly as “the overseer of my social conscience.”

Fogel was taught economics by the best. Though he began, like the conservative saint Friedrich Hayek, as a socialist, he learned fast at the knee of the Nobel-winning George J. Stigler, Austrian School economists Abba Lerner and Fritz Machlup, and the Keynesian Evsey Domar. His doctoral thesis supervisor was the Nobelist Simon Kuznets, whose pioneering work in econometrics led to the accurate measurement of economic growth.

As a relentless measurer and collator himself, Fogel was one of the best sort of economists, like Milton Friedman and Anna Schwartz, devoted to determining cause and effect through a meticulous study of the facts. Not for him the faith-based notion, so commonly expressed in the half-educated “economics” debaters in the blogosphere, that if only we were to throw away the last 80 years of macroeconomic thought and revert to a mythical lost Eden where the free market was allowed to rip unhindered we would all live for the rest of time in clover. Fogel didn’t win a Nobel for crossing his fingers and hoping for the best.

When Fogel was awarded his own Nobel, he gave a lecture in Stockholm on the subject that occupied his latter years – good health and its effect on economic growth. The lecture is worth reading in full,  but he discovered that better diet, clothing, housing and healthcare alone accounted for 50 percent of Britain’s growth between 1790 and 1980. (Britain has been keeping records longer than most countries.)

He cited alarming findings about our current hectic work rate: “During the mid-nineteenth century only slaves on southern gang-system plantations appear to have worked at levels of intensity per hour approaching current standards.” But the general takeaway from his talk is this: the greatest drivers of economic growth are improvements in diet, housing and healthcare.

All credit to Hayek for intuitively understanding this simple economic fact; it is why, in an aspect of his landmark Road to Serfdom that seems to escape many contemporary readers, w he advocated the state provision of housing, a generous social safety net, and universal healthcare.

So ensuring that a whole population is healthy is not only a prerequisite for a civilized nation, it makes good economic sense. That goes a long way to explain why countries in Western Europe since World War Two have put as a top priority a universal healthcare system, some single payer, like Britain, and some based on mandated private insurance, like France.

The schemes have proved so hugely popular that any politician who suggests returning to a “devil take the hindmost” health policy is doomed to oblivion. That is why Margaret Thatcher, who received an annual audience with Hayek, toyed with privatizing healthcare but ended up announcing, “The National Health Service is safe in our hands.”

How do Fogel’s findings feed into today’s debate about Obamacare, which will not be fully operational until January 1, 2014? It will, eventually, be good for growth, though it may take awhile to filter through. As Fogel explained, there are “extremely long lags” before the benefits of investments such as good diet, housing and health translate into higher growth.

And it will take some considerable time before the 48.6 million Americans who will now be treated by primary care physicians rather than expensive emergency rooms come to benefit in their pocketbooks from the better jobs they will gain from their improved health.

Nicholas Wapshott is the author of Keynes Hayek: The Clash That Defined Modern Economics. Read extracts here.

PHOTO: Robert W. Fogel, winner of the 1993 Nobel Prize in Economics, addresses a press conference October 12, 1993,  at the University of Chicago, where Fogel is the Director of the University's Center for Population Economics.

The media and a surprisingly high proportion of business leaders, financiers and economic analysts seem to believe that policies which are dishonest, intellectually inconsistent or obviously self-interested in their motivation are ipso facto doomed to fail or to damage the public interest. But this is manifestly untrue. The effectiveness of public policies and their ultimate desirability is in practice judged not by their motivations, but by their results.

Which brings me to the real subject of this column: the improving outlook for the world economy and why many economists and financiers cannot bring themselves to acknowledge it. Let me begin with a striking example anticipated in this column back in March: the boom in house prices and debt-financed consumption that the British government is pumping up in preparation for the general election in May 2015.

In the British budget announced on March 20, George Osborne, the British finance minister, announced a spectacular pre-election giveaway: a program of highly leveraged mortgage lending guaranteed by the government with the stated intention of pumping up British household debt by up to £130 billion. The enormity of this number can be gauged by translating it into an equivalent stimulus relative to the size of the U.S. economy: $1.7 trillion.

Despite this audacious debt plan, the almost unanimous response among British pundits went something like this:

George Osborne based his entire economic program on deficit and debt reduction. He even started his budget speech with the Cameron government’s mantra since it came to power: “You cannot cure debt with more debt.” To tempt British consumers into taking on bigger debts would therefore be intellectually incoherent and blatantly hypocritical. And even if Osborne did want to tempt mortgage borrowers he would fail, because people would recognize his efforts as electoral manipulation and refuse to take the bait.

Three months later, this conventional moralizing has proved completely wrong. The British housing market has sprung to life, even though the full lending program does not begin until 2014. A monthly survey of realtors published this week revealed the strongest sales expectations since 2005, and the third best in the series’ 15-year record. Home builders’ shares are soaring. House prices in depressed regions such as Scotland are rising by double digits for the first time since 2007. And in the affluent areas of London never hit by the housing bust, dinner conversations are turning to how government-backed mortgages might be used to finance vacation homes, investment properties and children’s flats.

In short, Osborne’s transparently political plan to create a housing and mortgage boom in time for the 2015 election seems to be working already, even before the gusher of credit from the Treasury and the Bank of England has begun.

Assuming this trend continues – and there is every reason to believe that it will – a large part of the new mortgage debt will flow into consumer spending, growth will accelerate, unemployment will fall and Britain will enjoy decent economic conditions by the time the Cameron government faces the voters in May 2015.  If a pre-election boom helps to ensure Cameron’s re-election, it will obviously be bad news for anyone eager to see a change of government. A housing boom will also raise genuine misgivings in Britain about reverting to property speculation and consumption, instead of rebalancing the economy towards exports and investment as many economists had recommended.

But whether a housing boom proves politically expedient for the Cameron government and whether it is good or bad for the British economy’s long-run structure has no bearing on whether it will actually happen. This obvious distinction between what ought to happen and what is likely to happen is one that economists and financiers are surprisingly reluctant to draw.

Similar confusion between moral and analytical judgments can be observed all over the world these days in economics and finance. Many investors on Wall Street believe that stock prices cannot keep rising because they have been propelled by monetary manipulation which they consider irresponsible or immoral. Yet the bull market continues, despite this manipulation or maybe because of it. Many German political analysts argue that Angela Merkel cannot continue to back the euro because this means saying one thing to domestic voters and another to European leaders and financial markets. Yet the euro survives, despite this hypocrisy or maybe because of it. In Japan, the Abe administration is planning to increase inflation to 2 percent but trying to prevent bond yields from rising above 1 percent, which can only be done by getting cynically persuaded savers to disregard rational investment strategy.  Yet the Japanese economy is palpably improving, despite this cynicism or maybe because of it.

In sum, economic conditions are gradually improving around the world despite government and central bank policies that seem to be incoherent or self-serving in many different ways. But that is the normal course of human affairs. So as the world pulls out of its five-year slump and gradually returns to normal economic conditions in response to limitless printing of money and unprecedented government borrowing, the sentence at the beginning of this article may be worth repeating:

It is cynical, manipulative and hypocritical - and it looks like it is going to work.

PHOTO: Britain's Prime Minister David Cameron delivers a speech to workers at the new London Gateway container port, which is under construction on the banks of the River Thames, near Tilbury in southern England June 10, 2013. REUTERS/Stefan Rousseau/Pool