(BN) NYC Apartment Rents Fall, Led by New Three-Bedrooms (Update1)

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NYC Apartment Rents Fall, Led by New Three-Bedrooms (Update1)
2008-07-10 20:42:29.480 (New York)


(Adds comment from Malin in sixth paragraph.)

By Sharon L. Lynch
July 10 (Bloomberg) -- Manhattan apartment rents fell in the
first half, led by declines of as much as 16 percent for three-
bedroom units in new buildings with doormen, as Wall Street job
cuts and rising fuel and food prices deterred renters from moving.
The average rent of a studio apartment fell 2.1 percent to
$1,887 a month, according to a report today by Manhattan-based
broker Citi Habitats. Two-bedroom apartments also fell 2.1
percent, to an average of $3,769. Three-bedrooms declined 1.8
percent to $4,948. Only one-bedrooms rose, 2.2 percent to $2,623.
Manhattan residents have resisted paying higher rents amid
rising household expenses and uncertainty about the economy.
Gasoline topped $4 a gallon and the U.S. Department of Agriculture
forecast food prices may rise as much as 5.5 percent on an annual
basis, the most since 1989, this year. Wall Street firms have
announced job cuts totaling about 67,000 in the Americas.
``Not a lot of people are moving right now,'' said Clifford
Finn, managing director of new development marketing for Citi
Habitats. ``They are either insecure about their jobs or they
don't want to take on a new financial commitment.''
Because fewer people are looking for apartments, some
landlords are more reluctant to raise rents for fear good tenants
will move out. If that happens today, the unit could go unrented
for a month, wiping out any annual profit the landlord sought.

`Price Sensitivity'

``Price sensitivity is something that they definitely need to
be aware of,'' Citi Habitats President Gary Malin said in an
interview.
The rent declines are the first since at least 2002, when
Citi Habitats started collecting data.
At new developments with doormen, the average rent dropped
1.2 percent to $2,721 for studios, 6.2 percent to $3,802 for one
bedrooms, 2.8 percent to $6,606 for two-bedrooms and 16 percent to
$9,392 for three-bedroom apartments, the broker said.
``There is no question that owners of residential properties
here in Manhattan are certainly feeling a pinch,'' Malin said.
``The question is how much of that can they potentially pass on to
their tenants.''
In 2007, rents rose an average of 5.5 percent and in 2006 the
increase was 10.4 percent, according to Citi Habitats.
``Over the last few years, landlords have been able to get
unbelievable increases,'' Malin said. ``Sooner or later, prices
adjust.''

Move-In Incentives

At the building Dwell 95 Yoo by Starck, located at 95 Wall
St. and designed by Phillippe Starck, developer the Moinian Group
is offering move-in incentives including a month or two in free
rent, depending on the term of the lease.
The building is Starck's first rental project and offers
amenities such as Jenn-Air appliances, indoor and outdoor rooftop
lounges, parking and concierge services. It has 503 units to rent
ranging from $2,760-a-month studios to almost $8,000-a-month two-
bedrooms.
``Even in the good times when owners brought new buildings to
market, there were always incentives,'' Malin said. ``The goal is
to get these buildings leased as fast as humanly possible.''
Vacancy rates are also rising in the city, increasing to 1.21
percent for June, compared with 0.76 percent a year earlier. The
West Village had the lowest level of available apartments, 0.63
percent, and the Upper East Side had the highest proportion, 1.45
percent.
Brokers still advise New York apartment seekers to show up
with tax documents and pay stubs in hand if they don't want
competitors to scoop apartments out from under them.
``Being armed when you get here always is helpful,'' Malin
said.

For related news:
Real estate news: TOPR
News about luxury real estate: TNI LUX REL BN .

--Editors: Rob Urban, Peter S. Green

To contact the reporter on this story:
Sharon L. Lynch in New York at +1-212-617-4993 or
sllynch@bloomberg.net

To contact the editor responsible for this story:
Rob Urban in New York at +1-212-617-5192 or at
robprag@bloomberg.net

Company News:

Will Electric Power Cause the Next Price Shock?

http://seekingalpha.com/article/83366-will-electric-power-cause-the-next-price-shock?source=yahoo

There was recently an interesting, albeit somewhat disturbing

article at Platts discussing something many of us don't want to admit that we know is coming - higher electricity prices.

I know, electricity prices are already high for many of you, along with just about everything else. I am not talking about those high prices, I am talking about the really high ones that are just around the corner. The ones that will result from higher commodity prices, which only seem to keep going higher. The ones that will continue to result from the lack of a coherent energy policy. The ones that result from environmental legislation, which if not carefully considered (no matter how good intentions), may have the ability along with higher commodity prices to bring the power system to its knees. The ones that unlike higher gasoline prices, which are high but still can be paid to purchase the commodity, may not even give us the opportunity to pay higher prices to receive services during a blackout. Yes, those are the ones I am talking about.

According to the

Energy Information Administration [EIA], 49.0% of electricity is generated from coal, 20.0% from natural gas, 19.4% from nuclear, 7% from hydro, 1.6% from petroleum, with the remaining 3.1% from other sources, part of which are alternative energy sources not listed (solar, wind, etc.). Approximately 9.5% of electricity generation is currently from renewable sources. If Congress has its way, this number will increase as restrictions on carbon emissions get enacted.

While everyone would like to see lower carbon emissions and a cleaner environment, such legislation will have consequences, many of which will be unintended (ethanol anyone?). Hopefully some of these consequences will be considered as we move forward as a country toward developing some type of energy policy, because while we all know about the high cost of gasoline, and the impact that burning this fuel has on our environment, we are also beginning to feel the effects of ethanol mandates, which even with their good intentions are producing unintended consequences of higher food and commodity costs. Unfortunately, electricity prices are the next form of energy that is likely to feel the effects of high commodity prices, regulation, and legislation in a way that is similar to the current impact of high crude oil prices.

Edison Electric Institute expects U.S. consumption to grow by 30% by 2030. Currently, the average U.S. household uses 21% more electricity than it did in 1978, and household consumption is expected to grow by 11% more over the next 20 years as home computer and air conditioning usage continues to rise. To support expected increased usage, infrastructure will also need to be improved, but it too is not keeping up. Desire and action are not enough. Even if we begin today to upgrade the power system infrastructure, it will not come cheap. Infrastructure costs are also going up as both copper and steel prices have been on the rise, affecting towers, transmission lines, and transformer cost. Yet demand will not wait as we hope for lower commodity costs in the future. The North American Electric Reliability Corporation expects peak demand to increase by 18% over the next 10 years, while committed resources are expected to only increase by 8.5%. Not only are services in doubt, but reliability is in jeopardy.

But it potentially gets worse. Congress and both of the presidential candidates are taking about instituting some form of cap-and-trade of carbon emissions (see a

previous post for some of the lessons learned from cap-and-trade). The Regional Greenhouse Gas Initiative program begins next year in ten eastern states that already have cap-and-trade rules in place, although some business and governments are already getting nervous and beginning to place ceilings on the RGGI imposed allowance costs - on the order of a $2/allowance cap. Without ceilings, some estimate the RGGI would add up to $120 million per year to electricity rates.

Congress is also considering the Lieberman-Warner Climate Security Act of 2007 for regulating greenhouse gas emissions through market-based solutions. While market-based solutions sound better than regulation to some, the Energy Information Administration is expecting the legislation to add between $30-325 per year per household by 2020 if enacted into law, with costs growing over time. The EIA forecast GDP losses from $444-1,308 billion over the 2009 to 2030 time period.

Fortunately, the U.S. has an abundance of coal, but increases in environmental regulations will prevent it from rising above its current 49% generation use levels, and this number is likely to decrease as companies continue to stop building coal-fired generation, and instead switch to cleaner burning fuels. Even if coal were to be used, coal prices are also going up - doubling over the last year as demand from China and across the globe increases. Alternatives sources such as wind power are increasing, but it is still insignificant, hydro has been decreasing, and nuclear power, even if approved and scaled to the level needed (a big "if") is at least 10 years away from receiving the necessary approvals, components, and build-time necessary to get it on-line. The cost to build and fuel nuclear plants is also not getting any cheaper.

That leaves natural gas, which has been reaching new highs over the last year and does not look to pull back anytime soon. Given that natural gas powered generation sets the marginal prices of electricity in much of the U.S., and that natural gas prices are increasing, it does not take much deductive logic to know that is going to happen to electric power prices. As carbon constraints are imposed, natural gas-fired generation, which is often used for peak generation, will now increasingly be used for normal capacity generation. Yet, as mentioned in a recent

post, domestic LNG stockpiles are falling as shipments of LNG to the U.S. are instead going to Spain and Japan given the willingness of these countries to pay higher prices. Furthermore, if you consider that crude oil has at times traded with a 6-8 multiple to natural gas (see post), and you expect crude oil prices to either rise or not correct much from their current levels, then natural gas is likely to continue to rise from its current price.

And of course, all of this says nothing of the expected increase in hybrids and electric cars, or other green vehicles expected to run on hydrogen (which requires electricity to separate the hydrogen), or even run on natural gas itself. Each will facilitate an increase in natural gas and electricity prices. So in short, if you though that the inconvenience of not being able to take your normal Sunday drive or extra trip to Grandma's house was painful, you may experience even greater stress on your wallet as electricity prices begin responding to current commodity prices. When consumers have to cut back on air conditioning, reduce lighting, realize that their hybrids are not quite as economical as they thought, suffer planned brownouts, or even worse, an unplanned blackout, then Congress will begin to see the you know what hit the fan - assuming of course that there is any inexpensive electricity around to actually power the fan.

Fwd: Manhattan Apartment Sales Record Biggest Second-Quarter Decline Since 1997

Manhattan Apartment Sales Record Biggest Second-Quarter Decline Since 1997

---
Sent From Bloomberg Mobile MSG

Manhattan Second-Quarter Apartment Sales Drop Most Since 1998
2008-07-02 00:01 (New York)


By Sharon L. Lynch
July 2 (Bloomberg) -- Manhattan apartment sales dropped the
most for a second quarter since 1998 and unsold inventory
approached an eight-year record, two signs prices may be poised to
drop in the nation's most expensive urban housing market.
Sales fell 22 percent from a year earlier and inventory rose
31 percent to 6,869 units, New York-based real estate appraiser
Miller Samuel Inc. and broker Prudential Douglas Elliman Real
Estate said in a report today. The median price of a co-operative
or condominium apartment increased almost 15 percent to a record
$1.03 million, lifted by new developments.
Transactions are declining as financial firms have announced
plans to cut almost 90,000 jobs after taking more than $400
billion in mortgage-related losses and writedowns. Those companies
may lose as many as 175,000 employees by next June, according to
executive recruiters such as New York's Gerson Group, casting a
pall on a property market driven by Wall Street compensation.
``People are asking: `Am I going to have a job?''' said
Pamela Liebman, chief executive officer of the Corcoran Group, a
Manhattan-based real estate brokerage that also issued a price
report today. ``There is a lot of uncertainty and uncertainty puts
people on the sidelines.''
The U.S. housing slump started in mid-2005 when sales of new
and existing homes began to drop, bringing a five-year boom to a
close. Prices for existing homes started falling last July and
finished the year below 2006 levels, the first annual decline
since the Great Depression, according to the National Association
of Realtors in Chicago.

Longer Selling Time

While prices in New York City are holding up for now, buyers
remain wary and apartments are taking longer to sell. The average
time spent on the market rose 15 percent to 135 days, according to
Miller Samuel. At the end of May, there were 7,320 housing units
for sale in Manhattan, the second-highest number for the month
since Miller began keeping records in 2001.
``There is sort of the anticipation, the expectation that the
other shoe is going to drop,'' Miller Samuel President Jonathan
Miller said. ``I think for this quarter, it hasn't.''
All four reports issued today show price increases. Corcoran,
owned by Apollo Management LP, and the New York-based brokers
Brown Harris Stevens and Halstead Property LLC, owned by Terra
Holdings LLC, produced reports in addition to Miller's. The
figures vary in part because the brokers include some of their own
sales that have yet to show up in the city's public records
database.
Manhattan apartment prices rose 3.6 percent in 2007,
according to Miller Samuel.

Luxury Sales

About a third of second-quarter closings were new
condominiums, some of which went into contract before turmoil hit
the credit markets last August and September, said Gregory Heym,
chief economist for Terra Holdings.
Many of the units closing now are multimillion dollar
condominiums at the recently converted Plaza and at architect
Robert A.M. Stern's 15 Central Park West.
Those properties helped drive the median condominium price up
almost 22 percent to $1.3 million in the three months ended in
June and contributed more than three percentage points to the
city's overall increase in median price, according to Miller.
Without them, the median rose 11.2 percent, Miller said.
Goldman Sachs Group Inc. Chairman Lloyd Blankfein, former
Citigroup Inc. Chairman Sanford Weill and rock star Sting have
bought units at 15 Central Park West, where the apartments have
heated bathroom floors, Vermont marble countertops and six-burner
Thermador ranges.

Future Bonuses

Other buyers there include Nascar Inc. Chairman Brian France,
who paid $10.7 million, and Mitchell Julis, co-founder of the
asset management firm Canyon Partners LLC, who paid $10.2 million,
according to city records.
Once the remaining units in Stern's building and the Plaza
close, average prices may drop as much as $200,000, Heym said.
``I don't expect to see any dramatic price change before the
end of the year,'' Heym said. ``The real telling thing will be
Wall Street bonuses and how the city looks going into 2009.''
Prices of two-bedroom apartments rose 18 percent to $1.65
million, the biggest increase for any size category. Studios rose
almost 12 percent to $480,000, one bedrooms increased 11 percent
to $778,961, three bedrooms by 3 percent to $3.7 million and
apartments with four or more bedrooms climbed 11 percent to a
median of $7.35 million, Miller's data show.

`Kiss the Ground'

The top end of the residential market remained the strongest
as wealthy buyers bought condominiums with amenities such as gym
and spa services, hotel-style room service and swimming pools.
The median price of a luxury apartment rose almost 38 percent
to $4.95 million in the Miller Samuel survey and 35 percent to
$4.88 million, according to Corcoran. Both companies consider
apartments of more than $3.1 million as luxury.
``Real estate markets go up and down, and when it comes to
New York City, it's an island. There's not a lot of land, and
it'll survive,'' said Dottie Herman, chief executive officer of
Prudential Douglas Elliman. ``I think we need to kiss the ground
because we live in New York.''

For related news:
Today's top Bloomberg News real estate stories: TOPR
News about luxury real estate: TNI LUX REL BN

--With reporting by Laura Marcinek in New York. Editors: Alan
Mirabella, Rob Urban.

To contact the reporter on this story:
Sharon L. Lynch in New York at +1-212-617-4993 or
sllynch@bloomberg.net

To contact the editor responsible for this story:
Rob Urban at +1-212-617-5192 or at robprag@bloomberg.net.

Company News
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##
-0- Jul/02/2008 04:01 GMT


(BN) If Hedge Funds Kept Cows, Your Milk Would Go Sour: Mark Gilbert

If Hedge Funds Kept Cows, Your Milk Would Go Sour: Mark Gilbert
2007-02-08 19:04 (New York)


Commentary by Mark Gilbert
Feb. 9 (Bloomberg) -- A famous series of jokes attempts to
define political systems. In communism, for example, you have two
cows, your commune seizes them and charges you for milk. In a
democracy, you have two cows, the cows outvote you 2-1 to ban all
meat and dairy products, and you go bankrupt and starve to death.
Similar thinking can be applied to financial markets. Here,
then, is the world of money recast in bovine terms.

Leveraged Buyouts
You have two cows. You come home from the fields one day to
find Henry Kravis chatting to your spouse at the dining-room
table. Two days later, you have no spouse, no farm, and no table.
Two guys the size of sumo wrestlers have saddled up the cows and
are riding them around the farmyard.

Currency Market
You have two cows. China has 1 trillion cows. Guess who sets
the price of milk?

Bond Market
You have two cows. One is Brazilian, one is Australian. They
yield 25 quarts of milk per day. That's half as much as three
years ago, when you traded your less-lactiferous German and U.S.
cows for them. You are thinking of swapping for a pair of
Namibian cows. They only have three legs but, hey, they produce
26 quarts per day.

Derivatives
You have two cows. You repackage five of them into a
Collateralized Lactating Obligation, pay for a AAA credit rating,
slice the CLO into 10 pieces and sell it to investors, skimming
the cream from the milk for yourself. Three of the cows fall ill,
and the credit rating plummets. You get to keep the cream.

Hedge Funds
You have two cows. A guy in an open-necked shirt drives up
in his Bentley and offers to take care of them for you in return
for a year's supply of steak and 50 percent of their milk. They
won't be allowed to leave his compound for two years.
Six months later, you have half a cow, producing sour milk.
``You have to be willing to lose rump today to get rib-eye
tomorrow,'' the hedge-fund guy mumbles through a mouthful of
sirloin and champagne.

Economics
Assume two cows.

Carbon-Emissions Trading
You have two cows. They produce 1.2 tons of methane gas per
day. After a hefty donation to the re-election campaign of your
local representative, the government gives you enough emission
permits for six cows. You sell three permits, buy another cow,
and apply for a European Commission grant to build a methane-gas
power station.

Microsoft Corp.
You have one old, tired cow. A recent heart transplant may
have come too late to save the beast.

Google Inc.
You have no cows. You slap advertisements on everyone else's
cows. The milk floods in. You use the proceeds to reinvent the
cow.

Apple Inc.
Nobody wants your cows. You design the cutest little milk
bottle. Now, everybody wants your cows.

Goldman Sachs Group Inc.
You have 26,467 cows. They are strapped into the milking
machines 24/7. Some of them have more hay than they could ever
hope to eat. Others aspire to one day having more hay than they
could ever hope to eat. The cows with the most hay end up with
big government jobs.

Pension-Fund Management
You have two cows. How boring is that? You pay a month's
supply of milk to a consultant, who advises you to sell one cow
and buy two aardvarks instead. The aardvarks die. The consultant
charges you four months of your (now reduced) milk supply and
advises you to sell half of your remaining cow and buy a wombat.
The wombat dies. The consultant charges eight months of milk for
a copy of his new report, ``Two-Cow Strategies for Alleviating
the Impending Pensions Crisis.''

Russian Energy
You have two cows. Comrade, those cows are an environmental
hazard. We suggest you hand one of them over to us.

Credit-Default Swaps
You have two cows. You buy insurance against them dying, and
tuck the contracts into the middle of that tottering pile of
documentation on your desk. One dark night, Henry Kravis sneaks
off with your cows. By the time you track down the paperwork,
your now worthless contracts have expired.

Interest-Rate Swaps
You have two cows. You pledge one of them to me as
collateral in a swap for some of my pigs. I pledge the cow to my
neighbor as collateral in a swap for some of his sheep. He
pledges the cow to his cousin as collateral in a swap for some of
his cousin's goats. Better pray the livestock market doesn't
crash and we have to try and round up that cow.

Commodities
You have lots of stocks and bonds, but no cows. Are you
crazy? Cows are the hot new market. Here, buy this exchange-
traded cow futures contract. It can't lose. It gained 40 percent
in the past six months.

Gold
You have two cows. You wear a cap you made out of tin foil
so that the tiny black helicopters can't read your thoughts. You
spend your days blogging about how the government's decision to
abandon the cattle standard in 1933 was part of a global
conspiracy by the world's central banks to destroy the value of
your herd.

(Mark Gilbert is a Bloomberg News columnist. The opinions
expressed are his own.)

--Editor: Henry (jmg).

Story illustration: for a table of financial market information,
click on {MRKT }. For more of Mark Gilbert's writing,
click on {NI GILBERT BN }. To comment on this article by
sending a letter to the editor, click on {LETT }.

[TAGINFO]

To contact the writer of this article:
&cls;Mark Gilbert&cle; in London at +44-20-7073-3051 or
magilbert@bloomberg.net

To contact the editor responsible for this article:
&cls;James Greiff&cle; at +1-212-617-5801 or
jgreiff@bloomberg.net

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##
-0- Feb/09/2007 00:04 GMT


'The White Whale' from The Nation

If you like this article, please consider subscribing to The Nation at
special discounted rates. You can order online at
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at 1-800-333-8536.

The White Whale by E.L. Doctorow

In April 2007 in Washington there was a joint meeting of the American
Academy of Arts and Sciences and the American Philosophical Society on
the theme of "The Public Good: Knowledge as the Foundation for a
Democratic Society." E.L. Doctorow's keynote address was titled "The
White Whale." --The Editors

What does it say about the United States today that this fellowship of
the arts and sciences and philosophy is called to affirm knowledge as a
public good? What have we come to when the self-evident has to be argued
as if--500 years into the Enlightenment and 230-some years into the life
of this Republic--it is a proposition still to be proven? How does it
happen that the modernist project that has endowed mankind with the
scientific method, the concept of objective evidence, the culture of
factuality responsible for the good and extended life we enjoy in the
high-tech world of our freedom, but more important for the history of
our species, the means to whatever verified knowledge we have regarding
the nature of life and the origins and laws of the universe.... How does
it happen for reason to have been so deflected and empirical truth to
have become so vulnerable to unreason?
For some time now we have been confronted by a religiously inspired
criminal movement originated in the Middle East that advertises its
values by suicidal bombings, civilian massacres and the execution of
arbitrarily selected victims by the sawing off of their heads. However
educated, well-to-do and politically motivated the leaders of this
conspiracy may be, they have invoked an extreme fundamentalist reading
of their sacred text to mentally transport their rank and file back into
the darkness of tribal war and shrieking, life-contemptuous jihad.
So that history, as we look to that part of the world, seems to be
running backward, as if civilization is in reverse, as if time is a
loop.
And here? The scientists this evening may have to correct me as I invoke
the term "quantum nonlocality." As I understand the term and make
metaphorical use of it, electrons shot from an atom will mirror one
another no matter how far apart they are driven: a mile, ten miles, a
hemisphere apart--you look at one and you have a reflection of the
other, a kind of weird subatomic dance in celebration of the mimetic
proclivities of everything in the universe, is quantum nonlocality.
This is not to suggest that our waterboarding and sensory-deprivation
torture techniques, that Abu Ghraib and the incarceration in perpetuity
without trial of terrorist suspects at Guantánamo, are the moral
equivalent of 9/11. Only that a declared enemy with the mind-set of the
Dark Ages throws his anachronistic shadow over us and awakens our
dormant primeval instincts.
Apart from this uncanny synchronous spin, the domestic political fantasy
life of these past seven years finds us in an unnerving time loop of our
own making--in this country, quite on its own, history seems to be
running in reverse and knowledge is not seen as a public good but as
something suspect, dubious or even ungodly, as it was, for example, in
Italy in 1633, when the church put Galileo on trial for his heretical
view that the earth is in orbit around the sun.
I am not a scientist and don't deal in formulas, but as a writer I
would, in the words of Henry James, take to myself "the faintest hints
of life" and convert "the very pulses of the air into revelations." That
surely provides me with a line to unreason. And so when I read that the
President of Iran denies the historical truth of the Holocaust, and when
I hear the President of the United States doubting the scientific truth
of global warming, I recognize that no matter what the distance they
would keep between them, and whatever their confrontational stance, they
are fellow travelers in the netherworld.
Two things must be said about knowledge deniers. Their rationale is
always political. And more often than not, they hold in their hand a
sacred text for certification.
But, you may say, am I not narrowing this issue, politicizing it by
speaking of our President? In this discussion of knowledge as a
foundation for a democratic society, am I not misusing this forum to
broadcast a partisan point of view? Albert Einstein once said that even
the most perfectly planned democratic institutions are no better than
the people whose instruments they are. I would translate his remark this
way: the President we get is the country we get. With each elected
President the nation is conformed spiritually. He is the artificer of
our malleable national soul. He proposes not only the laws but the kinds
of lawlessness that govern our lives and invoke our responses. The
people he appoints are cast in his image. The trouble they get into, and
get us into, is his characteristic trouble. Finally, the media amplify
his character into our moral weather report. He becomes the face of our
sky, the conditions that prevail.
From those fundamentalist leaders who proclaimed 9/11 as just deserts
for our secular humanism, our civil libertarianism, our feminists, our
gay and lesbian citizens, our abortion providers, and in so doing
honored the foreign killers of nearly 3,000 Americans as agents of God's
justice... to the creationists, the biblical literalists, the
anti-Darwinian school boards, the right-to-lifer antiabortion activists,
the shrill media ideologues whose jingoistic patriotism and ad hominem
ranting serves for public discourse--all of it in degradation of the
thinking mind, all of it in fear of what it knows--these phenomena are
summoned up and enshrined by the policies of this President. At the same
time he has set the national legislative program to run in reverse as he
rescinds, deregulates, dismantles or otherwise degrades enlightened
legislation in the public interest, so that in sum we find ourselves
living in a social and psychic structure of the ghostly past, with our
great national needs--healthcare, education, disaster relief--going
unmet. The President may speak of the nation in idealistic terms, but
his actions demonstrate that he has no real concept of national
community. His America, like that of his sponsors, is a population to be
manipulated for the power to be had, for the money to be made. He is the
subject of jokes and he jokes himself about his clumsiness with words,
but his mispronunciations and malapropisms suggest a mind of
half-learned language that is eerily compatible with his indifference to
truth, his disdain for knowledge as a foundation of a democratic
society.
It will take more than revelations of an inveterately corrupt
Administration to dissolve the miasma of otherworldly weirdness hanging
over this land, to recover us from our spiritual disarray, to regain our
once-clear national sense of ourselves, however illusory, as the last
best hope of mankind. What are we become in the hands of this President,
with his relentless subversion of our right to know; his unfounded
phantasmal justifications for going to war; his signing away of laws
passed by a Congress that he doesn't like; his unlawful secret
surveillance of citizens' phone records and e-mail; his dicta time and
time again in presumption of total executive supremacy over the other
two branches of government; his insensitivity to the principle of
separation of church and state; his obsessive secrecy; his covert
policies of torture and extraordinary rendition, where the courtroom
testimony of the tortured on the torture they've endured at our hands is
disallowed on the grounds that our torture techniques are classified;
his embargoing of past presidential papers, and impeding access to
documents of investigatory bodies; his use of the Justice Department to
bring indictments or quash them as his party's electoral interests
demand.... Knowledge sealed, skewed, sequestered, shouted down, the
bearers of knowledge fired or smeared, knowledge edited, sneered at,
shredded and, as in the case of the coffins of our dead military brought
home at night, no photography allowed, knowledge spirited away in the
dark.
Now, I realize that with these remarks I may be violating the linguistic
proprieties of an academic convocation. I realize, in the tenor of these
times, that anyone who speaks of the broad front of failure and
mendacity and carelessness of human life in so much of our public
policy, in terms any louder than muted regret, is usually marginalized
as some sort of radical--that is, as someone so "out of the mainstream"
as not to be taken seriously. But I believe what I have described so far
is an accurate and informed account of the present state of the Union.
We must ask if this rage to deconstruct the Constitution and the Bill of
Rights has any connection with the prevalence of God in the mind of this
worshipful President. We must ask to what extent, and at however
unconscious a level, a conflict arises in the pious political mind when
it is sworn to uphold the civil religion of the Constitution.
The idea of the United States may have had its sources in the European
Enlightenment, but it was the actions taken by self-declared Americans
that brought it into focus and established it as an entity. America is a
society evolved from words written down on paper by ordinary mortals,
however extraordinary they happened to be as human beings. When
constitutional scholars speak of the American civil religion, they
recognize that along with its separation of church and state our
Constitution and its amendments establish as civil law ethical
presumptions common to Judaism, Christianity and Islam.
But if you have extracted the basic ethics of religious invention and
found the mechanism for installing them in the statutes of the secular
civic order, but have consigned all the doctrine and rite and ritual,
all the symbols and traditional practices, to the precincts of private
life, you are saying there is no one proven path to salvation, there are
only traditions. If you relegate the old stories to the personal choices
of private worship, you admit the ineffable is ineffable, and in terms
of a possible theological triumphalism, everything is up for grabs.
Our pluralism cannot be entirely comfortable to someone of evangelical
faith. But to the extreme fundamentalist--that member of the evangelical
community militant in his belief, an absolutist intolerant of all forms
of belief but his own, all stories but his own--our pluralism has to be
a profound offense. I speak of the so-called "political base" with which
our President has bonded. In our raucous democracy, fundamentalist
religious belief has organized itself with political acumen to
promulgate law that would undermine just those secular humanist
principles that encourage it to flourish in freedom. Of course, there
has rarely been a period in our history when God has not been called
upon to march. Northern abolitionists and Southern slave owners both
claimed biblical endorsement. Martin Luther King Jr.'s civil rights
movement drew its strength from prayer and examples of Christian
fortitude, while the Ku Klux Klan invoked Jesus as a sponsor of its
racism. But there is a crucial difference between these traditional
invocations and the politically astute and well-funded activists of
today's Christian right who do not call upon their faith to certify
their politics as much as they call for a country that certifies their
faith.
Fundamentalism really cannot help itself--it is absolutist and can
compromise with nothing, not even democracy.

I value the point of view of Professor Mark Noll, who speaks of the
"historical American merger of the forces of traditional Christianity
with the forces of Enlightenment." It is a serious misreading of
American history, he says, "to portray the tangled cultural and
political conflicts of our time as pitting the pre-critical hordes of
religion against the hyper-critical avatars of science." Historically
there has tended to be a religious accommodation of science, according
to Professor Noll: in nineteenth-century America, theological
conservatives could also be Darwinists. And even in the strident debates
of today, fundamentalists still proclaim their allegiance to facts as
loudly as their opponents. And theories such as intelligent design and
creation science implicitly accept the modern scientific consensus on
evolution while maintaining a confident belief in a traditional deity.
But all contrarian movements, like revolutions, devolve to their
extremist expression, do they not? The theorists of creation science and
intelligent design have marching on their right flank, with or without
their approval, if not pre-critical hordes of religion, a militantly
censorious, well-funded political movement that a President of the
United States has tapped into for his and their benefit. I am not aware
that American history as invoked by Professor Noll has a precedent for
this. Nor am I aware that the hypercritical avatars of the secular
scientific method have an equivalent hard-nosed political organization
behind them.
The President has said the war with terrorists will last for decades and
is a confrontation between "good and evil." Whether he means the evil of
specific terrorist organizations or the culture from which they spring,
his vision is necessarily Manichaean. There is immense political power
in such religiously inspired reductionism. Thus, no matter how he lies
about the reason for his invasion of Iraq, or how badly it has gone,
bumblingly and tragically ruinous, with so many lives destroyed, and no
matter how many thousands of terrorists it has brought into being, to
criticize his policy or the architects of it is said to aid the enemy.
The President's inner circle of advisers, who conspire in this
Manichaean worldview, have the unnatural vividness of personality of
Shakespearean plotters. While the original think-tank theorists and
proponents of the war have quietly and understandably withdrawn from
public view, the Vice President and the President's chief policy adviser
have stood tall--the first contemptuous of his critics, his denials of
reality and obfuscations delivered in the dour tones of unquestionable
authority, the second too clever by half, and because he spent his years
developing a theocratic constituency and wearing such blinders as an
exclusive concern with party power has attached to him, most clearly has
a future in the culture of antidemocracy he has so deviously and
unwisely nurtured.
A Manichaean politics reduces the relevance of knowledge and degrades
the truth that knowledge discovers. The past seven years of American
political life are an uncanny cycle we've slipped into, or slid into,
that foresees the democratic traditions of this country as too much of a
luxury to be maintained. We have seen, since the 2006 election, the
struggle for the legislative branches to regain some of their
constitutional prerogatives. They struggle not only with a recalcitrant
President and Vice President who impugn their motives but against the
precedents of the imperial presidencies of Richard Nixon and Ronald
Reagan, each of whom added another conservative shock to the principle
of separation of powers. Many of the executive practices today--the
blatant cronyism, the political uses of the Justice Department, the
evisceration of regulatory agencies and so on--are empowered by these
precedents. And so we have marched along from the imperial presidency to
the borders of authoritarianism.
To take the long view, American politics may be seen as the struggle
between the idealistic secular democracy of a fearlessly self-renewing
America and our great resident capacity to be in denial of what is
intellectually and morally incumbent upon us to pursue.
Melville in Moby-Dick speaks of reality outracing apprehension.
Apprehension in the sense not of fear or disquiet but of
understanding... reality as too much for us to take in, as, for example,
the white whale is too much for the Pequod and its captain. It may be
that our new century is an awesomely complex white whale--scientifically
in our quantumized wave particles and the manipulable stem cells of our
biology, ecologically in our planetary crises of nature, technologically
in our humanoid molecular computers, sexually in the rising number of
our genders, intellectually in the paradoxes of our texts, and so on.
What is more natural than to rely on the saving powers of simplism?
Perhaps with our dismal public conduct, so shot through with piety, we
are actually engaged in a genetic engineering venture that will make a
slower, dumber, more sluggish whale, one that can be harpooned and
flensed, tried and boiled to light our candles. A kind of water
wonderworld whale made of racism, nativism, cultural illiteracy,
fundamentalist fantasy and the righteous priorities of wealth.
I summon up the year 1787, when the Constitutional Convention had done
its work, and the drafted Constitution was sent out to the states for
ratification. The public's excitement was palpable. Extended and
vigorous statehouse debates echoed through the towns and villages, and
as, one by one, the states voted to ratify, church bells rang, cheers
went up from the public houses, and in the major cities the people
turned out to parade with a fresh new sense of themselves as a nation.
Everyone marched--tradespeople, workingmen, soldiers, women and clergy.
They had floats in those days, too--most often a wagon-sized ship of
state called the Union, rolling through the streets with children waving
from the scuppers. Philadelphia came up with a float called the New
Roof, a dome supported by thirteen pillars and ornamented with stars. It
was drawn by ten white horses, and at the top was a handsome cupola
surmounted by a figure of Plenty bearing her cornucopia. The
ratification parades were sacramental--symbolic venerations, acts of
faith. From the beginning, people saw the Constitution as a kind of
sacred text for a civil society.
And with good reason: the ordaining voice of the Constitution is
scriptural, but in resolutely keeping the authority for its dominion in
the public consent, it presents itself as the sacred text of secular
humanism.
When the ancient Hebrews broke their covenant, they suffered a loss of
identity and brought disaster on themselves. Our burden, too, is
covenantal. We may point to our 200-some years of national survival as
an open society; we may regard ourselves as an exceptionalist,
historically self-correcting nation, whose democratic values locate us
just as surely as our geography--and yet we know at the same time that
all through our history we have brutally excluded vast numbers of us
from the shelter of the New Roof, we have broken our covenant again and
again with a virtuosity verging on damnation and have been saved only by
the sacrificial efforts of Constitution-reverencing patriots in and out
of government--presidents, senators, justices, self-impoverishing
lawyers, abolitionists, muckrakers, third-party candidates, suffragists,
union organizers, striking workers, civil rights martyrs.
Because this President's subversion of the Constitution outdoes anything
that has gone before, and as it has created large social constituencies
ready to support the flag-waving ideals of an incremental fascism, we're
called upon to step forward to reaffirm our covenant like these
exemplars from the past.
Philosopher Richard Rorty has suggested in his book Achieving Our
Country that the metaphysic of America's civil religion is
pragmatism and its prophets are Walt Whitman and John Dewey. "The most
striking feature of their redescription of our country is its
thoroughgoing secularism," says Rorty. "The moral we should draw from
the European past, and in particular from Christianity, is not
instruction about the authority under which we should live but
suggestions about how to make ourselves wonderfully different from
anything that has been."
To temporize human affairs, to look not up for some applied celestial
accreditation but forward, at ground level, in the endless journey to
resist any authoritarian restrictions on thought or suppression of
knowledge that is the public good--that is the essence of our civil
religion.
It is Whitman, our great poet and pragmatic philosopher, who advises us
not to be curious about God but to affix our curiosity to our own lives
and the earth we live on, and then perhaps as far as we can see into the
universe with our telescopes. This was the charge he gave himself, and
it is the source of all the attentive love in his poetry. If we accept
it as our own and decide something is right after all in a democracy
that is given to a degree of free imaginative expression that few
cultures in the world can tolerate, we can hope for the aroused witness,
the manifold reportage, the flourishing of knowledge that will restore
us to ourselves, awaken the dulled sense of our people to the public
interest that is their interest, and vindicate the genius of the
humanist sacred text that embraces us all.

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