A week of living perilously

By Martin Wolf in London

Panic seized markets this week. Just one asset class is deemed safe: the liabilities of highly-rated governments.

The price of a barrel of oil is below $50. The dividend yield on the S&P 500 is higher than the yield on US 10-year treasuries. The yield on short-dated US inflation-indexed bonds is higher than on their conventional equivalents. The yield on ten-year government bonds is now 3.2 per cent in the US and 3.8 per cent in the UK.

This is pricing for deflationary Armageddon. The fundamental rule of investment is: buy when others are frightened and sell when others are confident. The economic position looks ghastly. But, at least for those with sufficiently long time horizons, the investment position does not.

Yet good economic news is likely to take a long while in coming. All the principal advanced countries are now in recession. According to the November Consensus Forecasts, gross domestic product is forecast to contract in the advanced countries next year, with world growth down to a miserable 1.1 per cent. It is almost certain to end up lower still – perhaps with a reduction in global output.

Meanwhile, the financial system remains dysfunctional. With liquidity still hoarded by banks, heavily indebted investors – hedge funds and private equity funds – are compelled to retrench. So-called “carry trades” – inherently absurd notions – are imploding, generating flight back to lower-yielding currencies, principally the yen and the dollar.

The leverage machine is operating in reverse and, as it generated fictitious profits on the way up, so it takes those profits away on the way down. As unwinding continues, highly indebted consumers cut back, corporations retrench and unemployment soars. Round after further round of losses befall the lenders.

Yet governments are not helpless. They can continue to recapitalise financial institutions. The entire funding of the US TARP – the “troubled asset relief program” – should be used for this purpose. It is ridiculous to conserve ammunition until after the battle is lost. But banks must also be forced to lend. Today, everybody is losing out, because lenders are too cautious, just as they loved risk two years ago.

As the deflationary danger comes closer, central banks can finance anything – above all, government borrowing. This will work much better, however, if all countries act together. For surplus countries with limited financial fragility to choose this moment to creep willingly into recession – thereby exacerbating the difficulties of the indebted, on whose demand they depended – is economic vandalism.

Deep depressions deliver not healthy cleansing of excess, but social and political catastrophe. The time for aggressive countervailing action is now. Patient investors may be able to wait for a long term reward. The rest of the world cannot.

Sounding the Nuclear Alarm

The U.S. will not have a credible arsenal unless Washington acts soon to replace aging warheads.

MELANIE KIRKPATRICK

New York

Gen. Kevin Chilton, a former command astronaut, is no stranger to cutting-edge technology. But these days the man responsible for the command and control of U.S. nuclear forces finds himself talking more often about '57 Chevys than the space shuttle. On a recent visit to The Wall Street Journal he wheeled out the Chevy analogy to describe the nation's aging arsenal of nuclear warheads. The message he's carrying to the Pentagon, Capitol Hill, the press and anyone else who will listen is: Modernize, modernize, modernize.

Ismael Roldan

Since the end of the Cold War, the U.S. nuclear weapons program has suffered from neglect. Warheads are old. There's been no new warhead design since the 1980s, and the last time one was tested was 1992, when the U.S. unilaterally stopped testing. Gen. Chilton, who heads U.S. Strategic Command, has been sounding the alarm, as has Defense Secretary Robert Gates. So far few seem to be listening.

The U.S. is alone among the five declared nuclear nations in not modernizing its arsenal. The U.K. and France are both doing so. Ditto China and Russia. "We're the only ones who aren't," Gen. Chilton says. Congress has refused to fund the Department of Energy's Reliable Replacement Warhead program beyond the concept stage and this year it cut funding even for that.

Gen. Chilton stresses that StratCom is "very prepared right now to conduct our nuclear deterrent mission" -- a point he takes pains to repeat more than once. But the words "right now" are carefully chosen too, and the general also conveys a sense of urgency. "We're at a point where we need to make some very hard choices and decisions," he says. These need to be "based on good studies that would tell us how we would modernize this force for the future to incorporate 21st century requirements, which I believe are different than in the Cold War."

"We've done a pretty good job of maintaining our delivery platforms," the general says, by which he means submarines, intercontinental ballistic missiles and intercontinental bombers. But nuclear warheads are a different story. They are Cold War legacies, he says, "designed for about a 15- to 20-year life." That worked fine back when "we had a very robust infrastructure . . . that replenished those families of weapons at regular intervals." Now, however, "they're all older than 20 years . . . . The analogy would be trying to extend the life of your '57 Chevrolet into the 21st century."

Gen. Chilton pulls out a prop to illustrate his point: a glass bulb about two inches high. "This is a component of a V-61" nuclear warhead, he says. It was in "one of our gravity weapons" -- a weapon from the 1950s and '60s that is still in the U.S. arsenal. He pauses to look around the Journal's conference table. "I remember what these things were for. I bet you don't. It's a vacuum tube. My father used to take these out of the television set in the 1950s and '60s down to the local supermarket to test them and replace them."

And here comes the punch line: "This is the technology that we have . . . today." The technology in the weapons the U.S. relies on for its nuclear deterrent dates back to before many of the people in the room were born.

The general then pulls out another prop: a circuit board that he holds in the palm of his hand. "Compare that to this," he says, pointing to the vacuum tube. "That's just a tiny, little chip on this" circuit board. But replacing the vacuum tube with a chip isn't going to happen anytime soon. The Department of Energy can't even study how to do so since Congress has not appropriated the money for its Reliable Replacement Warhead program.

It ought to go without saying, but the general says it anyway: His first priority for nuclear weapons is reliability. "The deterrent isn't useful if it's not believable, and to be believable you got to have tremendous, complete confidence that your stockpile will work. . . . We have that today. Let me be clear: We have that. We've monitored the stockpile, made adjustments as necessary, but, again, we're on the path of sustaining your '57 Chevrolet."

Security is another priority -- especially keeping nuclear weapons from falling into the hands of terrorists. This, he says, is another vital reason to modernize weapons that were designed and built in another era.

"In the Cold War you didn't worry about the Soviets coming over here and stealing one of our weapons. They had plenty of their own. . . . But now you worry about these things."

It's possible to design a terrorist-proof nuke, the general says. "We have the capability to design into these weapons today systems that, should they fall into wrong hands -- [should] someone either attempt to detonate them or open them up to take the material out -- that they would become not only nonfunctional, but the material inside would become unusable."

The general stresses the need to "revitalize" the infrastructure for producing nuclear weapons. The U.S. hasn't built a nuclear weapon in more than two decades and the manufacturing infrastructure has disappeared. The U.S. today "has no nuclear weapon production capacity," he says flatly. "We can produce a handful of weapons in a laboratory but we've taken down the manufacturing capability." At the height of the Cold War, the U.S. produced 3,000 weapons a year.

Under the Moscow Treaty, signed in 2002, the U.S. has committed to reducing its strategic nuclear arsenal by two-thirds -- to between 1,700 and 2,200 deployed nuclear weapons from about 10,000 at the height of the Cold War. "Deployed means they're either on top of an ICBM, on top of a submarine, or in a bunker on the base where the aircraft are located," Gen. Chilton says. "We're supposed to be down to those numbers by 2012, but we're on a glide path to actually get down to those numbers by the end of next year."

But these already-old weapons aren't going to last forever, and part of the general's job is to prepare for their refurbishing or replacement. "Think about what it's going to take to recapitalize or replace those 2,000 weapons over a period of time. . . . If you could do 10 a year, it takes you 200 years. If you build an infrastructure that would allow you to do 100 a year, then you could envision recapitalizing that over a 20-year-period."

There's also the issue of human capital, which is graying. It's "every bit as important as the aging of the weapon systems," the general says. "The last individual to have worked on an actual nuclear test in this country, the last scientist or engineer, will have retired or passed on in the next five years." The younger generation has no practical experience with designing or building nuclear warheads.

Generals don't talk politics, and the closest Gen. Chilton gets to the subject is to say that he had spoken to no one from either of the campaigns in the recent presidential election. It's a fair bet, though, that Barack Obama's comments on the campaign trail will not have escaped his notice. The president-elect likes to talk about a nuclear-free world and has said, "I will not authorize the development of new nuclear weapons." He has not weighed in on the Reliable Replacement Warhead program.

Gen. Chilton says the modernization of U.S. nuclear weapons is "an important issue for the next administration in their first year." At the very least, he says, the U.S. needs to "go out and do those studies" on design, cost and implementation. As for his own role: "You've got to talk about it. You can't just one day show up and say we have a problem."

Ms. Kirkpatrick is a deputy editor of the Journal's editorial page.

Geithner Nets 500 Points

With all due respect, the Dow average didn't surge 500 points on the unconfirmed story late yesterday that Hillary Clinton had "accepted" the office of Secretary of State. That remarkable stock-market run belongs to New York Federal Reserve President Tim Geithner, who is reported to become Treasury Secretary. The Obama camp hadn't confirmed this as we went to press, but assuming it is true, we wish Mr. Geithner luck, though he probably shouldn't count on too many more 500-point performances in the long season ahead.

AP

Tim Geithner

We take the market's reaction as a strong sign of the price that was being paid in uncertainty over this choice and the direction of the incoming Administration's economic policy. There could hardly be a clearer signal that addressing the immediate panic in the credit markets and its impact on the real economy is priority No. 1 for the new President and that all involved want to get the Obama show on the road.

We will have more to say later on the presumptive Treasury Secretary's economic worldview. Suffice to say that Mr. Geithner has been in the cockpit for better or worse as financial authorities wrestled with the deteriorating economic conditions the past 18 months. There is no need for the appointee to relearn the arcane details of the rescue so far.

Amid the brief market euphoria, it is hard not to notice the leaks and air of disorganization coming from the Obama transition team on these important appointment decisions. The new President may come to appreciate George W. Bush's experience with lower-tier political players who put their own compulsions above his desire to govern.

A new interconnected world

Globalist Perspective > Global Trade New President, Different World By Edward Gresser During the last decade, little has been accomplished in terms of trade policy. However, global trade has not slowed. In fact, far from it. As Edward Gresser explains in this Globalist Perspective, new technology for importing and exporting goods — and for sharing information — has caused globalization to increase at a dizzying pace.

As our 44th President of the United States prepares to take office, the financial winds are howling and trade policy has been sluggish for a decade. Since 2001, 150 governments have been debating the WTO’s Doha Round in Geneva, with some progress — but no resolution.

Over the same period, the U.S. Congress has debated a series of free trade agreements — although much smaller ones, together covering just 5% of U.S. world trade. Even so, it has deferred judgment on the three most recent.

Surface storms

But the sluggishness of trade policy seems to have meant little. Instead of slowing in sequence, globalization seems to be accelerating. To choose a simple measure, trade — the imports and exports of goods and services — has jumped from 26% to 32% of U.S. GDP. Worldwide, trade has risen from 50% to nearly 70% of world GDP.

The global economy President-elect Barack Obama inherits looks much more "connected" and "webbed" than the one George W. Bush found in 2000.

And at deeper levels, the effectiveness of tariff systems and preferential agreements seems to be eroding. To choose our largest and most controversial agreement, for example, the share of NAFTA partners Canada and Mexico has dropped from 29% to 25% of U.S. imports in this decade.

So in some metaphorical sense, trade policy debates seem to have been the storms and waves on the surface of the ocean. They are flashy, controversial and getting lots of attention, but less meaningful than the ocean currents flowing beneath.

These currents, the main drivers of global integration in this first decade of the 21st century, turn out not to be the decisions of government. Rather, they are structural trends in communications technology, logistics industries and demographics.

A sample of each:

Ideas: Each year, tens of thousands of miles of fiber-optic cable and dozens of communications satellites click on. Combined with steady growth in computing power, they mean lower communication costs at a higher quality. A simple index is the cost of an international phone call — it has dropped by over 80% since 2000, after a 50% fall in the 1990s and a 25% drop in the 1980s. Here one can see the foundation of the global services economy.

Things: In the physical world, shipping and air-freight match the virtual world’s computers, cables and satellites by cutting the cost of moving things around. Here the simple index is the growth of the world’s container-ship fleet.

Trade policy debates are the storms and waves on the surface of the ocean — but less meaningful than the ocean currents flowing beneath.

In the year 2000, the fleet totaled 2,433 ships with an average capacity of 1,700 20-foot containers. This year there are 4,276 ships with an average capacity of over 2,500 containers, meaning capacity has more than doubled — after doubling in the 1980s, and more than doubling in the 1990s.

Combined with air freight, port improvements and express delivery, this has made manufacturing trade faster, cheaper and more precise, encouraging the global supply webs that are replacing national industry and country-to-country exchange of finished goods.

People: Cross-border migration gets attention and controversy, but internal migration from land to town is the main event. Since 2000, the world’s cities have grown by 550 million people — after adding 600 million in the 1990s and 450 million in the 1980s. (For context, the world’s cross-border migrant population is 200 million.)

China’s urban population alone has jumped from 400 million to 550 million since 2000. The vast new urban populations are the men and women driving growth and industrialization in China and other big developing countries.

As they move from farms to factories, restaurants, beauty salons, construction projects, research parks and advertising agencies, these countries' share of the world economy is rising fast — and the world’s globalized labor pool grows.

A new era

Together these trends mean the cost of moving things — especially weightless services, but also cars, potato chips, metals, shirts, TV sets and other physical goods — is steadily falling.

The sluggishness of trade policy seems to have meant little. Instead of slowing, globalization seems to be accelerating.

The operation of multinational supply chains and webs is becoming easier, making older preferential agreements less attractive. And the pool of urban entrepreneurs, workers, scientists, artists and shoppers available to participate in the world economy grows by about 70 million a year.

Yes, trade policy has moved slowly. But as this five-issue table below shows, the global economy President-elect Barack Obama nonetheless inherits looks much more "connected" and "webbed" than the one George W. Bush found in 2000, and vastly different than those Bill Clinton found in 1992 and Ronald Reagan met in 1980.

Obama's Webbed Economy

UK doctor admitted "I am a terrorist"

Doctor admits he is 'a terrorist'

Dr Abdulla denies trying to kill or injure anyone through car bomb attacks An NHS doctor accused of attempted car bombings in London and at Glasgow Airport has admitted that according to English law he is a terrorist. Bilal Abdulla, 29, is alleged to have crashed into the airport in a Jeep laden with petrol and gas canisters. But he told a jury he never wanted to kill or injure anyone. Dr Abdulla, from Paisley, and Dr Mohammed Asha, 27, from Newcastle-under-Lyme, deny conspiracies to murder and to cause explosions. The defence has said that Dr Abdulla and friend Kafeel Ahmed, 28, wanted to highlight the plight of people in Iraq and Afghanistan with a series of incendiary device attacks in June 2007. Dr Asha is accused of supplying them with cash and advice. A jury at Woolwich Crown Court heard Dr Abdulla had told police in Scotland "something along those lines" that he was a terrorist shortly after being arrested. From day one - we said we will not kill or injure any innocent person. Dr Bilal Abdulla Dr Abdulla told the court: "Everyone was saying you are a terrorist, you are arrested under the Terrorism Act and so forth. "That is my case in a nutshell. I am told I am a terrorist, but is your government not a terrorist, is your army not a terrorist? "By the definition of the Act, according to English law, yes. That is my aim to change opinion using violence, using fire devices." Dr Abdulla told the jury that after attacks on London's West End had failed, he planned to flee to Iraq, via Turkey, because it would be "much easier to disappear" in a lawless country. But as he approached the airport, Ahmed suddenly swerved the Jeep into the terminal building without warning. Petrol bombs "He drove through the barrier and I got alarmed and I shouted 'What are you doing, what is happening?'," said Dr Abdulla. "I had never seen Kafeel's face like that in my life. He was determined, his foot was on the accelerator and he did not respond to me at all." Dr Abdulla admitted throwing petrol bombs as he got out of the burning vehicle. But he claimed he had tossed them away to protect himself after Ahmed had passed one to him, accidentally lighting the others in the process. He said he could not recall exactly what happened afterwards, adding: "I know that I had struggled with people, I received punches and I punched back." Ahmed, an Indian engineering student, died one month after the attack from critical burns after dousing himself in petrol. Dr Abdulla told the court: "From day one, we said we will not kill or injure any innocent person. "This incident, if it was to kill people or cause an explosion, we would not have done it that way. It looks very clumsy." The trial continues.

What We Are Becoming

By: Wesley J. Smith
The Center for Bioethics and Culture Network

I am having trouble keeping up: Every day now almost, it is one once unthinkable thing after another.

In the UK, a woman tried to commit suicide by swallowing anti-freeze, and doctors refused to save her! From the story:

Kerrie Wooltorton arrived fully conscious in hospital clutching a 'living will' in which she stated she did not want to be saved and was '100 per cent aware of the consequences'. The former charity shop worker called an ambulance after drinking the anti-freeze at her flat...

Consultant renal physician Alexander Heaton Alexander Heaton told the inquest in Norwich that the hospital's medical director and legal adviser informed him Miss Wooltorton clearly had the mental capacity to make the decision about her treatment…'She had made them abundantly clear and I was content that that was the case. It's a horrible thing to have to do but I felt I had not alternative but to go with her wishes. Nobody wants to let a young lady die."

Well, then why prevent a person from jumping off a bridge? Indeed, why not just get it over with and set up the euthanasia clinics to make sure nobody is hurt by jumpers! Remember the death of E.G. Robinson's character in Soylent Green at the death center? It's almost not science fiction anymore.

This is runaway terminal nonjudgmentalism. We are so lost in the fog of relativism and amorality that we can't even save suicidal people's lives anymore.

Indeed, we have gotten to the point that some families think it is their duty to help suicidal loved ones kill themselves, vividly in a tragic case, again out of the UK. After Daniel James became paralyzed, he wanted to kill himself--and was taken by his parents to Switzerland for an assisted suicide with the help of a suicide group called Dignitas.

The case has been seized by euthanasia proponents as a cause célèbre for legalizing assisted suicide, aided by his grieving parents aggressive self justifications in the media, for example, claiming that "nobody but nobody should judge him."

Absolutely. James was lost in the labyrinth of catastrophic despair. He should neither be judged nor condemned.

But that does not mean that we should allow ourselves to be bullied into silence. We can, nay must, draw conclusions about how those involved in this tragedy behaved. For it isn't being suicidal that is the moral problem--none of us can know if we might not one day fall prey to such existential despair--it is the alarming changes in how we react to suicidal desires that we must urgently face.

Dignitas, the Swiss suicide facilitating organization, is the worst. These ideologues are paid to assist suicides of people who are dying, who have disabilities, and thanks to a Swiss Supreme Court ruling, will soon be legally able to assist the suicides of the mentally ill. They are utterly culpable morally.

We can also, I think, condemn the media that is using cases like Daniels as one big Oprah show. Oprahtization is about making people feel good about whatever they do, and in that unprinciplism (if you will) are sown the seeds of individual and societal destruction.

Daniel's parents are a more difficult matter. No one can be unmoved by the deep anguish they must have felt in seeing their son in such howling grief--and their grief today at his death. But while we certainly cannot judge them--as in saying they are horrible people, clearly they are not--we must not condone their actions.

Moreover, it seems fair to ask some questions: Did they seek psychiatric help for him with specialists who deal with the wrenching adjustments sudden paralysis involves? Did they contact disability rights groups who could have had people with similar injuries visit with Daniel to help him understand that life with disabilities can be very good? Did they know that studies have shown that the levels of depression of people who become paralyzed later in life--five years post injury--become the same levels as those of people who are able bodied? These questions are important--not to find ammunition to use against the parents--but to bring the full picture into the public eye in the hope others in similar situations can benefit.

It strikes me forcefully that Kerrie and Daniel were literally abandoned to death by well meaning and loving people who thought they were doing the right things by them. This is what advocacy for the death culture is making of us. And so the foundations crumble.

Evidence of a Designer's Purpose

By: David Klinghoffer

Most of us find it annoying to be forced into a false dilemma. In a false dilemma, alternatives and gradations of belief are arbitrarily excluded as a technique of manipulation. Accept my version of orthodoxy or you're a heretic!

Jews and Christians employ this argumentative strategy, not least when conversation turns to emotionally charged subjects - like Darwinian evolution. And not least when it is those on Darwin's side who are talking.

But in explaining how life developed, aren't there just two alternatives? That's what we're always told in the media. Either life accumulated complex features through a purely Darwinian process of natural selection, or the universe was created in six literal, 24-hour days, less than six thousand years ago.

Actually, there are gradations between the extremes of Darwinism and creationism. That fact often gets lost.

Consider Rabbi Shlomo Brody who writes the Jerusalem Post's interesting "Ask the Rabbi" column. In a recent article ("Intelligent design?," October 31), a reader queried him: "Why don't more Orthodox Jews support the intelligent design movement against evolution?"

Rabbi Brody, rejecting intelligent design as "pseudo-science," proceeded to state the case not against intelligent design at all, but against the very different doctrine of biblical literalist creationism.

He seemed unaware that intelligent design theory (ID) is a gradation of thought that may be identified neither with creationism nor with Darwinism. A scientific critique of Darwinian evolution, supported by the think tank I'm associated with, the Discovery Institute, ID finds positive evidence of a designer's purpose in the fossil record, in the nanotechnology at work in the living cell, in the origins of life itself. It entirely accepts paleontology's evidence that life changed and developed, with most animal body plans or phyla having appeared some 530 million years ago in the Cambrian Explosion. However, ID rejects Darwinism's insistence that evolution may be explained as unguided, purposeless, meaningless churning.

Yet, from Jewish Darwinists, you'll often hear the claim that, in the evolution debate, we must choose between enlightened science, which is no threat to Judaism, and scriptural literalism, which Judaism historically rejected anyway. "Judaism has never rejected science," we are frequently assured. This is wildly simplistic.

INEVITABLY, MAIMONIDES is brought forward as an authority. In the Guide for the Perplexed (II:25), he wrote that when a surface-level reading of the Bible is convincingly refuted by science or logic, then "the gates of interpretation remain open."

But Jewish Darwinists often forget to read to the end of that chapter. In Maimonides's day, Aristotelians argued that the universe had no beginning, that it existed eternally. Maimonides responded that he rejected the Aristotelian thesis for two reasons. First, because it "has not been demonstrated." And second, because it made nonsense of Judaism: "If the philosophers would succeed in demonstrating eternity as Aristotle understands it, the Torah as a whole would become void, and a shift to other opinions would take place. I have thus explained to you that everything is bound up with this problem."

Maimonides was not saying that any scientific theory can be reconciled with theistic belief, that our liberty to interpret has no limit, and certainly not when the science itself is wrong or unproven.

Another favorite authority of Jewish Darwinists is the 19th-century German rabbi Samson Raphael Hirsch. Again, Hirsch is presented simplistically as a supporter of evolution. Jewish Darwinists always forget to mention his explicit comment on "Darwinism" in the context of the idol, Baal Peor, worshipped in the most grotesquely animalistic fashion. To illustrate: "the kind of Darwinism that revels in the conception of man sinking to the level of beast and stripping itself of its divine nobility, learns to consider itself just a 'higher' class of animal" (Numbers 25:3).

ON EVOLUTION, Rabbi Brody is right in perceiving "widespread fear and ignorance." It can be observed in the Christian world as well. When Jews and Christians alike aren't being forced into false dilemmas, we are given alternatives to Darwinian theory that can be imagined as reconciling science and theology only if the whole subject is kept cloudy and confused.

Thus the two most recent popes have appeared to speak of the Church's comfort with "evolution" but without defining the term. Does it mean an unguided process or a guided one? One that gives scientific evidence of a Designer's purpose, or not?

The ambiguity and hedging probably comes from a fear of putting their Church on the losing side of a historic controversy, and an unfamiliarity with the scientific details.

Last month, Pope Benedict spoke to a conference on cosmic and biological evolution held by the Pontifical Academy of Sciences. His words were beautiful but gaseous, taking no clear position. The invited scientists at the conference included cosmologist Stephen Hawking, whose work denies that the universe had a beginning as Aristotle's did, undercutting basic theistic belief. Scientists who perceive evidence of design in nature were excluded from the conference. No wonder Catholics are confused about what their Church believes.

Thanks to the prevailing murkiness, Catholic doctrine is often identified in the media with "theistic evolution." Theistic evolution is another gradation of belief between creationism and Darwinism, but an unsatisfactory one. It boils down to the proposition that life's history was guided by natural laws that God designed but in such a way as to leave no evidence of that fact.

One problem with theistic evolution is that natural laws are predictable whereas Darwinian evolution, according to its own theorists, is entirely unpredictable. Think of those laws that govern weather patterns or the formation of geological features. Not so with Darwinian evolution, which can take any of countless very different directions. How could such a purposeless process reflect divine purpose?

The question is far from merely academic. If we are the product of design, then the designer sets the moral order in which we operate. If we were cast up on the cosmic shore by a purposeless, unguided natural process, then every person can decide for himself what is right and wrong. Or maybe the idea of right and wrong is itself illusory. Darwin watered the seeds of modern nihilism.

To be sure, secular opinion has contributed mightily to constructing the false dilemma of evolution versus creationism, which well suits anti-religious purposes. What a pity that in religious circles, we are so easily intimidated or overawed by secularism's prestige, automatically surrendering to its deceptive framing of this important debate.

Obama Said to Pick Geithner as Treasury Secretary (Update2)

Nov. 21 (Bloomberg) -- President-elect Barack Obama picked Timothy Geithner, head of the Federal Reserve Bank of New York, to be his Treasury secretary, with Lawrence Summers getting a senior White House role, a Democratic aide said.

Obama is also likely to nominate New Mexico Governor Bill Richardson as Commerce Secretary, and to announce his picks on Nov. 24, the person said on condition of anonymity.

Geithner has helped lead U.S. efforts to combat the deepest financial crisis in seven decades, helping oversee the decisions this year to intervene in American International Group Inc., rescue Bear Stearns Cos. and leave Lehman Brothers Holdings Inc. to fail. Summers was Bill Clinton’s last Treasury secretary, and is now a professor at Harvard University.

Both Geithner and Summers are veterans of managing financial turmoil, having worked together on the Asian financial crisis of 1997-98 and helping prevent a Mexican default earlier that decade. They will be charged with shepherding Obama’s plans for a fiscal stimulus to cushion an economy that analysts say is in its deepest recession in a quarter century.

Geithner, 47, served as an undersecretary for international affairs under Summers, 53, and has served at the helm of the New York Fed since November 2003.

Stocks Rally

Stocks rallied after news of Obama’s choice, with the Standard & Poor’s 500 Stock index rising 5.2 percent to 791.54 at 3:54 p.m. in New York. The index is still heading for its biggest annual decline on record.

Kevin Warsh, a Fed Board governor, is a leading contender to succeed Geithner at the New York Fed, a U.S. official said on condition of anonymity.

As head of the New York Fed, Geithner has served as the central bank’s top liaison with Wall Street. Geithner oversaw meetings at his bank to attempt to head off Lehman’s failure in September, later hosting gatherings on how to resolve AIG.

Geithner is no stranger to Washington or the Treasury. Before taking over the New York Fed in 2003, he spent most of the previous 18 years working in the nation’s capital, first at Kissinger Associates, then at the Treasury and finally at the International Monetary Fund.

Over that time, Geithner earned what his one-time mentor Summers called a “doctorate in financial policy.” He also developed a skill-set his supporters say makes him well suited for his new job: calmness under pressure, an ability to see many sides of a problem and a sense of the politically possible.

‘Calm Guy’

“During the Mexico crisis, some of us would occasionally be emotional about something,” said Jeffrey Shafer, who served with Geithner at the Treasury from 1993 to 1997 and who is now Vice Chairman of Global Banking for Citigroup Inc. in New York. “Tim was the calm guy in the room who made sure we looked at all sides of the issue.”

Geithner, who has studied Japanese and Chinese and has a Master of Arts in international economics from Johns Hopkins University, also played a key role in the Treasury’s dealings with the Finance Ministry in Tokyo. He was less inclined to intervene in currency markets than some other officials at the time, according to Shafer.

Dino Kos, a former New York Fed official, described Geithner as a “pragmatist, not an ideologue” who has a good sense of the political dynamics in Washington and the need to keep lawmakers in the loop about what’s going on. That’s been especially important in the current crisis as the Fed has taken extraordinary actions to limit the financial fallout, including its rescue of insurer American International Group in September.

“If you’re going to push the envelope -- as the Fed has been doing -- you need to keep legislators informed about what you’re doing and why you’re doing it,” said Kos, who’s now a managing director at Portales Partners in New York.