Nation building needed

June 29, 2008
Op-Ed Columnist
Anxious in America
By THOMAS L. FRIEDMAN
Just a few months ago, the consensus view was that Barack Obama would need to choose a hard-core national-security type as his vice presidential running mate to compensate for his lack of foreign policy experience and that John McCain would need a running mate who was young and sprightly to compensate for his age. Come August, though, I predict both men will be looking for a financial wizard as their running mates to help them steer America out of what could become a serious economic tailspin.
I do not believe nation-building in Iraq is going to be the issue come November — whether things get better there or worse. If they get better, we’ll ignore Iraq more; if they get worse, the next president will be under pressure to get out quicker. I think nation-building in America is going to be the issue.
It’s the state of America now that is the most gripping source of anxiety for Americans, not Al Qaeda or Iraq. Anyone who thinks they are going to win this election playing the Iraq or the terrorism card — one way or another — is, in my view, seriously deluded. Things have changed.
Up to now, the economic crisis we’ve been in has been largely a credit crisis in the capital markets, while consumer spending has kept reasonably steady, as have manufacturing and exports. But with banks still reluctant to lend even to healthy businesses, fuel and food prices soaring and home prices declining, this is starting to affect consumers, shrinking their wallets and crimping spending. Unemployment is already creeping up and manufacturing creeping down.
The straws in the wind are hard to ignore: If you visit any car dealership in America today you will see row after row of unsold S.U.V.’s. And if you own a gas guzzler already, good luck. On Thursday, The Palm Beach Post ran an article on your S.U.V. options: “Continue to spend upward of $100 for a fill-up. Sell or trade in the vehicle for a fraction of the original cost. Or hold out and park the truck in the driveway for occasional use in hopes the market will turn around.” Just be glad you don’t own a bus. Montgomery County, Md., where I live, just announced that more children were going to have to walk to school next year to save money on bus fuel.
On top of it all, our bank crisis is not over. Two weeks ago, Goldman Sachs analysts said that U.S. banks may need another $65 billion to cover more write-downs of bad mortgage-related instruments and potential new losses if consumer loans start to buckle. Since President Bush came to office, our national savings have gone from 6 percent of gross domestic product to 1 percent, and consumer debt has climbed from $8 trillion to $14 trillion.
My fellow Americans: We are a country in debt and in decline — not terminal, not irreversible, but in decline. Our political system seems incapable of producing long-range answers to big problems or big opportunities. We are the ones who need a better-functioning democracy — more than the Iraqis and Afghans. We are the ones in need of nation-building. It is our political system that is not working.
I continue to be appalled at the gap between what is clearly going to be the next great global industry — renewable energy and clean power — and the inability of Congress and the administration to put in place the bold policies we need to ensure that America leads that industry.
“America and its political leaders, after two decades of failing to come together to solve big problems, seem to have lost faith in their ability to do so,” Wall Street Journal columnist Gerald Seib noted last week. “A political system that expects failure doesn’t try very hard to produce anything else.”
We used to try harder and do better. After Sputnik, we came together as a nation and responded with a technology, infrastructure and education surge, notes Robert Hormats, vice chairman of Goldman Sachs International. After the 1973 oil crisis, we came together and made dramatic improvements in energy efficiency. After Social Security became imperiled in the early 1980s, we came together and fixed it for that moment. “But today,” added Hormats, “the political system seems incapable of producing a critical mass to support any kind of serious long-term reform.”
If the old saying — that “as General Motors goes, so goes America” — is true, then folks, we’re in a lot of trouble. General Motors’s stock-market value now stands at just $6.47 billion, compared with Toyota’s $162.6 billion. On top of it, G.M. shares sank to a 34-year low last week.
That’s us. We’re at a 34-year low. And digging out of this hole is what the next election has to be about and is going to be about — even if it is interrupted by a terrorist attack or an outbreak of war or peace in Iraq. We need nation-building at home, and we cannot wait another year to get started. Vote for the candidate who you think will do that best. Nothing else matters.

Whiskey River II

Our next stop was the Woodford Reserve distillery. They had a large new gift shop and visitors center but the heart of the facility was a set of buildings constructed in the early 19th century that have earned a place on the National Register of Historic Places. The story goes back to when the Scots-Irish raised their rebellion against taxes on whiskey in Pennsylvania in the 1790s. Led by George Washington, federal forces quickly routed the farmers and Woodford Reserves claims (apparently with some authority) that they fled down the Ohio River and set up shop in Kentucky. That, they say, helps explains some of the characteristics of their distillery. For example, the old stone buildings do look as though they were hauled out of the Edinburg area of Scotland. And they argue that the copper kettles (naturally imported from Scotland) used in the process at Woodford help give their whiskey the distinctive taste.

At top, the three large copper kettles. Next is a close up of one of the kettles. Click on it to read the sign. Next is the ramp that is used to roll the filled barrles from the distillery to the warehouse. Next is a view of one of the distinctive stone buildings. At bottom, is a view inside the huge warehouse where roughly $35 million worth of whiskey is aging.

Whiskey river trip I

Some university colleagues and I embarked recently on a long planned trip to some bourbon distilleries across the river in Kentucky. We thought Willie Nelson's Whiskey River wouldd be a good theme song for us. We went in two cars with each having a designated sober driver just in case, although in the end we never had enough of the beverage to make us illegal.

Bourbon whiskey production has a long history in the Bluegrass State and each of the distilleries has a particular story to tell. They also each have a particular twist about their whiskey that they believe makes their potion special. Our first stop was at Four Roses distillery. One of the unique things about this was distillery was that the original buildings, constructed in 1910, were done in Spanish Mission style, common in California but unusual in Kentucky. For many decades, Four Roses was owned by a large Japanese company and sold its product exclusively in Japan. But in the early 2000s, they introduced theiir bourbon gradually across the United States. Four Roses's special production aspect is that none of their warehouses where the beverage is held while it is aging in thousands of barrels are over two stories, or about six barrels, high. Because temperature varies in tall warehouses, bourbon at the top where the temperatures are higher, matures faster. Low warehouses, Four Roses says, makes for a more uniform product.

At top, we begin the tour. A stack of whiskey barrels on display. We walk into the little laboratory where the whiskey is tested for quality. Then we walk through one of the newer parts of the distillery and at bottom is one of the huge vats bubbling away.

Party on the bridge

Some friends have decided to have an occasional party on the Purple People Bridge across the Ohio. The PPB is an od railroad bridge that has been been turned into a pedestrian bridge, said to be the only walking bridge connecting two states. At top is a photo of some of the group. We were celebrating the birthday of Carlos Diaz, the guy with the shades. In the middle is a riverboat with passengers cruisting upstream. At bottom is a barge full of Cincinnati Reds baseball fans. They party on the Kentucky side of the river where it is easier to park and then get a free ride across the river sponsored by some of the watering holes on the south bank.

Oklahoma or bust!

I had a great time visiting my nephew in Tulsa, Okla., recently. AJ introduced me to some good Irish pubs and restaurants in Tulsa. We visited a western art museum that was very impressive and featured a lot of paintings by Montana's own Charley Russell. And we enjoyed a visit to the local aquarium, too. One of the interesting things about the visit was to see the declining signs of the Oral Roberts University era in Tulsa. The huge hospital complex, the tallest building in the area, is not longer the church-related hospital and is looking for tenants. The praying hands is a feature near the ORU campus.