At Large

Quick, Rahm, a New Bag of Merlin Dust

The act is beginning to wear thin.

By 7.15.09

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Barack Obama's Merlin Dust supply must have run out when he arrived in Moscow last week. On previous trips to Europe crowds swooned and the news media gasped in awe, but in Moscow this didn't happen. He was treated politely, but as if the folks on the street saw heads of state every day. It was quite a contrast to the heroic reception Ronald Reagan received in 1988 and 1990.

He went on to Italy for one those Grand Kabuki meetings of the heads of the Group of Eight leading industrial states. He regained some of the approving respect of the social democrats among them by apologizing once again for the United States, this time in terms of carbon emissions. He returned home claiming that he and the others had reached yet another historic agreement, this one to reduce those carbon emissions sharply by 2050. Of course the agreement was not binding and China and India rejected the notion of limits. So, in sum, the Merlin Dust was ineffective.

The Obama Merlin Dust doesn't seem to be working with stimulus packages, either. Of the $787 billion one he got from an obliging Congress in February, only about 10 percent has been spent so far and most of that on extending unemployment payments and other "safety net" services. Regardless of how worthy those efforts may be, they do not stimulate the economy.

Earlier in the year the president was pressing many other nations, especially those in Europe, to adopt stimulus packages à la the U.S. model. There was general reluctance to rely on these historically dubious devices to jump-start flagging economies, but several did develop them.

Mr. Obama, in effect, said to his international colleagues, "Ours is going to work just fine, so you should try it."

Now comes Kroll, the world's largest risk consultancy, with a new study showing that with a world total of $5 trillion in stimulus spending out in process, governments can expect as much as $500 billion, or 10 percent, to be lost to fraudulent procurement practices (such as bribes or selection of less efficient vendors) and/or waste. The study warns that, in the face of economic downturns, many governments have cut back on compliance budgets.

The Kroll report pegs capital improvement projects (the "shovel-ready" projects Obama et al. touted) as especially vulnerable to corruption. The reports states, "Governments need to be aware of the heightened risk of corruption that goes along with stimulus funding, and for companies to ensure [that] robust anti-corruption and compliance practices are in place."

According to the watchdog group Transparency International, companies are most likely to be pressed for bribes in Russia, China, Mexico and India. 

While the Obama Merlin Dust may have passed its sell-by date, the U.S. Department of Justice is actively pursuing 29 corruption investigations under the Foreign Corrupt Practices Act. 

As for the Merlin Dust, we can imagine the president calling Chief in Staff Rahm Emanuel in for a stern talking to: This damned stuff isn't working. Get me a new supply by tomorrow so I can sprinkle it around town hall meetings to sell my health reform plan. The polls are beginning to show that people think it's a thinly veiled attempt to drive private insurance and medical practice out of business. Imagine!

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About the Author
Peter Hannaford was closely associated with the late President Reagan for a number of years. He is a member of the board of the Committee on the Present Danger. His latest book is “Presidential Retreats.”