Wealth of Nations July 2007

How Rove Charmed a Clinton Crowd

The real star of the show at last week's Aspen Ideas Festival wasn't Bill Clinton. It was Karl Rove.

Later he was asked, twice, about a report in that day's New York Times that said that an opportunity to attack Al Qaeda's leaders in Pakistan had recently been allowed to slip by. Was the administration serious about trying to catch or kill Osama bin Laden and the others?

It seemed odd to press Rove hard on this—as though the White House did not have the strongest possible incentive to kill or capture bin Laden and his people.

Rove then dwelt at length on the Senate's recently aborted immigration reform, which the White House had backed. The plan aimed to balance tighter security at the border and behind it with a) easier entry for temporary workers and for immigrants with skills, and b) steps to regularize the status of the 12 million or so illegal immigrants in the U.S.

Rove argued that resistance to the bill was driven mainly by fear that the border could not be policed more effectively—so that the bill's "amnesty" for illegal workers already here would not be the last (any more than the amnesty of 1986 had been). But this was a misunderstanding, Rove said. Efforts to tighten the border had already been stepped up. Last year, authorities detained and returned 1.3 million illegal immigrants—far more, Rove said, than people most worried about the bill had imagined. The restricted flow of immigrants is already producing labor shortages.

He also described a 2005 experiment in border security, Operation Texas Hold 'Em, which concentrated on apprehending illegal Brazilian immigrants who were crossing at a particular section of the Texas border. As Rove related it, this was a no-expense-spared undertaking. Instead of releasing captured immigrants, often the standard practice, the policy was switched to detaining and deporting them. It was a success, he said, but at a cost; scaling it up for the whole border would be very expensive. Rove's point was that further tightening of the border—which the abandoned bill provided for—was not a hopeless endeavor. It could be done and had been done.

On energy, he seemed equally in command of his material. He made the case for the administration's "20 in 10" program, which aims to reduce use of petroleum by 20 percent in 10 years, urging a switch from the fleet-based corporate average fuel economy standards for passenger cars (which are set by Congress) to a weight-based standard (like the one administered by the Transportation Department for light trucks). This is less susceptible to gaming by vehicle manufacturers and less likely to confer a competitive advantage on foreign companies, which may have more small vehicles in their fleets. He also surprised the audience by saying that the United States was the only country in the world to reduce its greenhouse-gas emissions in 2006 (partly, as he noted, because of unusually favorable weather).

The administration's optimistic view that technology can painlessly solve the problems of climate change and energy security was, in fact, in tune with the ideas favored by most other speakers on energy at the conference. The case for greater reliance on nuclear power was not pressed hard: Bad idea, no need for it, was the view expressed at many panels. Even in Aspen's green-tinged intellectual environment, there was little support for a carbon tax—the simplest way to fold the external costs of carbon emissions into the price of energy.

Rove argued that a carbon tax would not be so simple. Adjusting the impact so that, for instance, it did not fall too heavily on people forced to drive long distances because of where they live would be complicated. He said that a carbon tax was not necessary, and many of the technology mavens brought in for the gathering (including Amory Lovins, doyen of energy-efficiency experts) seemed to agree. By this time, Rove's audience was listening attentively. Boundless faith in technology solutions with no growth penalty seems to unite Rove and Al Gore, unlikely as that might seem.

It amused me that Rove and Clinton both cited the United Kingdom as a country that is successfully curbing its carbon emissions and reaping a growth premium in return. Rove gave the credit to Margaret Thatcher for crushing the coal miners union and starting a big switch to nuclear. Clinton gave it to a drive for alternative fuels, which had also boosted growth and cut poverty. Neither was right, but Rove was closer: It was the post-Thatcher switch from coal to natural gas, not nuclear, that mainly brought emissions down. Britain has little to boast about on the alternative-fuels front, or for that matter, on poverty reduction.

Rove was given no ovation, just polite applause. But that was a far greater success than Clinton's ecstatic reception, and yet another reminder that one of the greatest assets in politics is to be underestimated.

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