The Great Debate

Mahmoud Ahmadinejad, the impenitent president of Iran, arrived in New York for his eighth, and presumably last, official visit on a late September Saturday night. The media hung on his every belligerent, homophobic or anti-Israeli word — while at the same time dismissing him as a lame duck, irrelevant to Iran’s future. But missing in all the coverage was what Ahmadinejad’s legacy may be and whether he’ll have a political future beyond Iran’s presidential election in June.

Beleaguered at home by infighting and the dire economic situation – due to sanctions, but also his administration’s mismanagement – Ahmadinejad seemed even more eager to enjoy his usual week of Western media attention. His schedule was packed – not just with media appearances but also meetings with peace groups, anti-capitalist protest groups and scholars.

Ahmadinejad’s U.N. lecture, the reason for his visit, was surprisingly mild. He essentially laid out a personal philosophy on world governance, cloaking it as Iran’s, that was based on religion. He understood this speech might well help define his legacy – at least for an audience back home or in the Muslim world.

Ahmadinejad has had a profound effect on Iran domestically, and has affected its international standing to a greater degree than anyone could have imagined when he was first elected eight years ago.

He has made many domestic political enemies – from fellow conservatives to the reformists he’s vanquished. But he also set a precedent with his independence. He was fearless in clashes with other branches of government – even with the ayatollahs, who wield the real power in Iran. So it’s hard to imagine him quietly fading away next year – no matter how eagerly many Iranians look forward to this.

President Barack Obama’s lackluster, let’s-work-together performance in Wednesday night’s presidential debate stoked the fears of his liberal backers that Democrats simply won’t fight for them the way Republicans relentlessly battle for their wealthier, aging, corporate constituents.

After four years of Republican intransigence – even when Democrats have championed Republican ideas – the Democratic left insists that the White House hasn’t grasped that the 2012 campaign is not about policy. So far, Republicans are proving more adept at speaking, in both coded and direct terms, to Americans’ stark demographic and psychological divisions.

That Republican nominee Mitt Romney stood before the nation and all but disowned the tax-cut, Medicare, health policy and other GOP doctrines he had campaigned on for months is likely to matter little to his backers. The last three Republican presidents, as MSNBC commentator Chris Hayes pointed out, also campaigned on promises of economic growth, deficit reduction and tax relief – and all left behind a faltering economy and ballooned deficits. What they reliably delivered was tax cuts benefiting the wealthy.

Do you recall just seven months ago when Romney campaign aide Eric Fehrnstrom let slip that having won the Republican primaries, his candidate would “shake it up and restart it all over again” as if wiping clean an Etch-a-Sketch screen? Romney did just that last night. From a standing start Romney executed a perfect backward somersault, landing with both feet slap-bang in front of a bemused president, who appeared quite taken aback that his rival should plant his feet firmly in the middle ground where elections are won and lost.

Take Romney’s view of regulating the market. In his personal manifesto No Apology, Romney trod a careful path, suggesting that, like his primary opponents who unwaveringly support the untrammeled free market, he was wary of overregulating business. “Excessive regulation slows the creation of new businesses and the expansion of existing businesses,” he wrote. On his website, he promises to “act swiftly to tear down the vast edifice of regulations the Obama administration has imposed on the economy.”

But in Denver last night, Romney changed his tune, suggesting that he had always been in favor of regulation, whatever impression he may have given in the past. “Regulation is essential,” he declared. “You can’t have a free market work if you don’t have regulation … Every free economy has good regulation.”

Gasoline prices are at all-time highs. As a result, energy policy concerns echo in boardrooms and family rooms across the U.S. At a recent House Energy Committee hearing on “The American Energy Initiative,” Harold Hamm, the top energy adviser of Republican presidential candidate Mitt Romney, warned that President Obama’s proposed repeal of the energy tax provisions for oil and natural gas producers (including a manufacturing tax deduction that all U.S. manufacturers receive) would decrease drilling activity by 40 percent. Can the U.S. afford that?

President Obama wants to end the right of major U.S.-based oil companies to deduct tax payments they make to foreign governments for their overseas operations. He also wants to end tax credits that are allowed to every oil and gas company. Romney wants to protect American competitiveness by keeping the tax benefits intact for oil companies. Let’s look deeper at the energy industry and the taxes energy companies pay.

According to the American Petroleum Institute, the oil and natural gas industry pays more than $30 billion on average to the federal government in taxes, rents and royalties every year. The industry is taxed at an effective rate of 60 percent – higher than any other domestic industry.

The words “communist” and “socialist” are now used so recklessly in the United States that their meaning has been devalued. But Eric Hobsbawm, the British historian who died Oct. 1, was the real deal.

Born in 1917, the year of the Bolshevik Revolution in Russia, Hobsbawm used Karl Marx as the inspiration for both his personal politics and his successful transformation of our understanding of history. He was an unabashed and unwavering supporter of communism in theory and practice, who only let his party membership lapse at the final moment, when the Berlin Wall fell.

His singular contribution to the telling of the human story was to reject the traditional method of viewing history through the actions of great men and women, in favor of describing the larger economic and social tides on which leading figures are often mere flotsam. Though history was usually taught through the lives of kings and queens, Hobsbawm demonstrated that economic and social history offered a fuller explanation of why events happened. He also gave prominence to previously ignored political agitators, whose courageous actions obliged leaders to agree to benign reforms.

Tonight’s debate could be the most negative presidential debate ever. That’s because the best thing each candidate has going for him is negative opinion of the other guy.

This election was supposed to be a referendum on President Barack Obama. That’s what usually happens when an incumbent is running for re-election. Sometimes the incumbent is popular enough to win re-election (Ronald Reagan in 1984, Bill Clinton in 1996). Sometimes he’s not (Jimmy Carter in 1980, George H.W. Bush in 1992).

The biggest single factor determining the incumbent’s popularity is the economy: good in 1984 and 1996, terrible in 1980 and 1992. By that standard, Obama should be in deep trouble. That’s the big surprise this year. He’s not.

If you think of the current presidential campaign as a movie, the economy, by all rights, should have pre-empted most of the drama and handed the lead role to the lantern-jawed financier. The movie would have told of a decent man, so unflappable that he never broke a sweat, who tried his best but couldn’t work his will on the world and make things right. Into that void, walked Republican nominee Mitt Romney, who vowed that he had the experience and strength to turn things around.

Here was a simple plot pitting weakness against strength, a well-meaning amateur against a tough-minded business titan – essentially, the professor against the industrialist.

But that’s not the way it seems to be turning out. And the reason why may have as much to do with movies as politics. We love the idea of civic responsibility, of an informed citizenry boning up on the issues. But what we really do when we vote nowadays is cast our preference for the candidate who proposes the better movie – who seems to make the better protagonist in the national drama.

The following is an excerpt from MAKERS: The New Industrial Revolution, by Chris Anderson, published by Crown Business. It is released October 2.

Lego, as a family-oriented company, has some rules about guns.

With few exceptions, it doesn’t make twentieth-century weapons. You can go farther back into history and have Lego swords and Lego catapults, but not Lego M-16 automatic rifles or rocket-propelled grenade launchers from today. Or you can go forward into fantasy and have Lego laser blasters and plasma cannons, but you can’t have World War II machine guns and bazookas.

That’s a perfectly fine policy for Lego, but the consequence is that it tends to lose its customers around the age of ten, when they go through their war phase. That included Will Chapman’s sons. In 2006 his youngest one wanted to replicate a World War II battle in Lego and was disappointed that he couldn’t do it with the Lego figures he already had.

It is easy to imagine the look on the faces of Rupert Murdoch’s children when they read the obituaries of New York Times owner Arthur “Punch” Sulzberger, whose father thought him too stupid to run the company. Particularly when they came to the line: “It’s impossible to be an assistant to your father.”

Rupert Murdoch’s eldest son, Lachlan, is exiled to Australia after complaining his father wouldn’t let him do his job at News Corp. His daughter Elisabeth’s movie company, Shine, may be owned by News Corp, but she lives in London and keeps her interfering father at arm’s length. And after disappointing his old man by failing to smother the phone-hacking scandal at his British papers, James is scrabbling around at corporate headquarters on Sixth Avenue in New York, trying to make it work at his new job leading the company’s television interests – everything, that is, except his father’s “fair and balanced” baby, Fox News.

It is one of the truisms of business that media companies are traditionally owned by strong-willed, dynasty-obsessed, egotistical patriarchs – and in some cases, such as Katharine Graham at the Washington Post, matriarchs. It is the common thread that links Murdoch to Sumner Redstone and Mike Bloomberg to Si Newhouse. Not only do such alpha-male types revel in the power and influence they can exert atop a company reaching into the homes of millions. But these larger-than-life moguls unencumbered by interfering shareholders and fastidious directors are the only ones who can make the quick decisions and fast moves that media companies need to make it in a world of fast-changing technologies.

One of the few thin­gs that President Obama and Mitt Romney are likely to agree on when they debate next week is the need for tax reform. Both candidates have backed streamlining America’s crazy-quilt tax code, and both have said that reforms could boost economic growth. Meanwhile, two key congressional committees held a rare bipartisan hearing last week – with lawmakers from both parties saying that tax reform is needed to rev up the economy.

Yet exactly how and why tax reform would spur growth is far from clear. Many proponents of reform, including Romney, want to lower tax rates while retaining the same level of revenue. But doing that means reducing major individual tax breaks that subsidize key sectors of the economy – including housing and healthcare. Long term, there are good arguments for whacking such subsidies, which tilt heavily in favor of affluent households and distort our economy. But curbing these freebies doesn’t offer a short-term economic fix and, in fact, could hurt growth.

Let’s start with the best-known big tax break – the mortgage interest deduction, which will cost the U.S. Treasury about $100 billion next year, according to the Congressional Research Service. Shrinking this loophole is a good idea in principle, since it primarily benefits more affluent households who have big mortgages and itemize their taxes, but it would be a blow to a housing sector that is still struggling. Smaller subsidies for home buyers would mean weaker sales and less new construction and would keep home values depressed – not an outcome that anyone wants to see right now. Among other things, such reform could be another severe blow to construction workers, who now have the highest unemployment rate of any group.