Who Is Roger Hertog?

Sometime this month -- assuming all the gears are turning according to schedule, on April 16 -- New Yorkers will have walked to their local newsstands and been greeted by a sight the city hasn't seen in more than 50 years: a new daily newspaper. If you think that sounds like some bizarre time warp -- what's next, the Dodgers are coming back? -- well, take a number, because you'll be joining a long line of skeptics. To most observers, the idea of launching a daily in this unforgiving economic climate seems quixotic, or possibly insane. Who would attempt such a thing?

Now throw this into the mix: As if starting a daily newspaper in the only American city that still has three of them weren't enough, two of The New York Sun's 11 key financial angels have also bought two-thirds of The New Republic, at a cost that one of them suggests could approach several million dollars a year in subsidies. For starters, you'd have to conclude that Roger Hertog and Michael Steinhardt are very rich men. And they are. They're two of New York's most successful high-end money managers, and though neither is listed on the Forbes 400, which bottoms out at $600 million, they're probably not far off that pace. There's no fear they'll go broke doing this.

But the question of what they want out of these investments has ramifications that go well beyond two men's bank balances and into the realm of political discourse, in both the nation's capital and its most important city. Why would Steinhardt, a Democrat who essentially seeded and watered the Progressive Policy Institute, the think-tank appendage of the Democratic Leadership Council (DLC), want to finance a newspaper that will have the Sun's conservative politics? Why would Hertog, a man of the right and chairman of the Manhattan Institute, the prominent conservative think tank, want a piece of the liberal (more than not, anyway) New Republic? Why, aside from the obvious relief of financial stress, would TNR owner Martin Peretz reduce himself to a minority interest in the magazine he's supported for 28 years?

The answer may be best expressed not by Hertog, Steinhardt, or Peretz, but by Seth Lipsky, editor of the Sun and a man whose decade-long dream of starting a new New York daily is finally coming to fruition. "The right wing of the Democratic Party," Lipsky told me recently, "is a depressed stock." Interesting that it took a journalist to produce the apposite business metaphor. And though the reference to party label shouldn't be taken too literally, Lipsky is describing both the certain ideological niche of the Sun and a likely trajectory of the Hertog-Steinhardt New Republic with some precision. It's exactly on the right-most edge of the Democratic cliff -- where the DLC begins to morph into, say, the American Enterprise Institute; where neoliberalism and neoconservatism, each of which is a vestigial presence now in the twenty-first century, collapse into some new entity that doesn't yet have a fully formed identity, or a name -- that these four men meet, despite having arrived by vastly different paths.

It may be just an accident of history that Hertog and Steinhardt have chosen this moment to join forces in these two ventures. Hertog merged his longtime high-end investment firm, Sanford Bernstein and Company, with Alliance Capital Management two years ago; he's a vice-chairman at Alliance, but he's well beyond the point of being lean and hungry. They've known each other for 30 years. Steinhardt, who had a reputation as one of Wall Street's most brusque and aggressive managers, has retired from the hedge-fund business and now places his bets only for himself. Both have made their pile and are looking for something to do. It might be that simple.

But if the concurrence of these events has any larger meaning, it's that they give rise to a new and possibly influential strain in American political discourse. If one were to take Hertog, Steinhardt, Peretz, and Lipsky's politics and put them in a centrifuge, the substance that would emerge would be as follows: It would be explicitly neither Democratic nor Republican. It would be right of center, especially on foreign policy (and most especially on Israel). It would be right of center, too, on a good number of domestic questions. But because it would pay some obeisance to the New Deal and even (sometimes) to the Great Society, which neoconservatism refuted thoroughly, and because it would purport to care deeply about poor people of color -- Hertog is messianic on the topic of vouchers and calls urban education "the civil rights issue of this generation" -- it would stand quite apart from, say, the obstreperous conservatism of a Tom DeLay. Indeed, it would claim its roots in a historic pragmatic liberalism that today's wandering liberals, this gang of four would argue, have cashiered out of slavish devotion to quota queens and teachers' unions. So it would fancy itself a truer liberalism. Lipsky, who was a member of The Wall Street Journal's editorial board and believes that the Journal's former editorial-page editor Robert Bartley "is pretty much spot on" regarding policy questions, is also a registered Democrat who voted twice for Bill Clinton.

But however it might appropriate the name, its emotional animus would be directed full-bore at traditional liberalism. Lipsky's deputy at the Sun, Ira Stoll, runs a Web site , www.smartertimes.com, devoted to "correcting" the left-liberal excesses of the Newspaper of Record. Peretz's New Republic has become somewhat more liberal (on domestic questions at least) under current editor Peter Beinart, but throughout the 1990s, under editors Andrew Sullivan and Michael Kelly, it preferred to take issue with conservatism while reserving its most churlish tone to mock the nostrums of liberalism. Steinhardt chaired the DLC for six years but left in 1996 in disgust, not over Whitewater or women, but because in his first two years in office, according to Steinhardt, Bill Clinton "went wandering back to his historic, ultra-left-wing home" -- as if Clinton were in league with Amiri Baraka and Noam Chomsky. So: Not the nastiness of Tom DeLay, but for God's sakes not the woolly-headedness of Ted Kennedy or Hillary Clinton. This tendancy would be conservative but elusive; conservative but gently so; conservative but sometimes surprising. Call it a "velvet conservatism."

The description will track for anyone familiar with Lipsky's Forward, the New York-based Jewish weekly he edited for a decade before reaching a final impasse with the Forward Association, a group of old socialists and liberals that owned half the paper. Lipsky and Steinhardt, thanks to Steinhardt's money, owned the other half. (The association tossed Lipsky out.) It will also ring true, with a few discrepancies, to longtime readers of The New Republic, which over the years has roughly followed Peretz's disenchantment with things left. This disaffection has manifested itself most plainly with regard to Peretz's hawkish position on Israel, a stance Steinhardt and Hertog share, and one that occasionally finds Peretz in illiberal company. Just this April 3, for example, Peretz signed an open letter to President Bush insisting that "it can no longer be the policy" of the United States to press Israel to negotiate with Yasser Arafat and urging the administration to move on Iraq post-haste. The letter ran in The Washington Times under the headline CONSERVATIVES TO BUSH, and its signatories included William Kristol, Ken Adelman, Gary Bauer, William Bennett, Norman Podhoretz, and Peretz.

Lipsky and Peretz have editorial track records. Hertog and Steinhardt, by contrast, are just wading into the pool. How they got here, then, seems a relevant question. Roger Hertog's mid-Manhattan office is comfortable, though not the splendid affair the first-time visitor might envision for a man of his means. Its gray hues and standard-issue furniture seem not to reflect any sort of personality, and indeed Hertog takes pains to tell me he leads "a boring life." On a wall are black and white photographs of Joe DiMaggio and Jackie Robinson, but even these don't mean much to him. "I actually don't love baseball so much," he said. "It sort of defines your life at a certain moment."

That moment, for Hertog, is the 1950s, and the place is the Bronx. His parents, German-Jewish, fled Hitler in 1937. He was born stateside in 1941. After public school he attended City College, which was then no longer a hornet's nest of argument between the Trotskyites in Alcove One and the Stalinists in Alcove Two, but still the "Harvard of the poor" and a place of great intellectual fertility. He says he learned a habit of inquisitiveness there that has stayed with him, and it's evident -- in the way he talks about Irving Kristol and Norman Podhoretz, for example -- that some part of him wishes he'd pursued the life of the mind. But to call him an intellectual manqué, insofar as that word connotes the arriviste striving to be something he really is not, wouldn't quite be fair. He's very smart and intellectually curious; on a credenza alongside his desk, he has a copy of The Dialectical Imagination, Martin Jay's study of the Frankfurt School philosophers. It seems clear that he's actually reading the thing.

Adorno and Horkheimer aside, Hertog's political views have been fairly constant. "I was more or less conservative when I was 20," he said. "But I mean conservative not in political terms. I was conservative in my dress, in my respect for the system, my respect for my parents, for my professors. My deep abiding belief in the country. That's what I mean by conservative." He was sympathetic, he says, to the civil rights and women's rights struggles, and convinced that society needed to change, "but that didn't mean I thought you had to destroy everything in its wake to get there." He doesn't seem particularly enthusiastic about sharing any of this. He winces when I pull out a tape recorder; at several points, as I repeat back to him my understanding of something he's told me, his face looks like he's just sucked on a lemon, and he politely, but forcefully, protests: I wouldn't put it that way; I don't know; no, it's not like that.

What it is like, Hertog said flatly, is this: "I'm not a particularly partisan person. I've almost never really been involved in campaigns. I've never been to the White House. It's never interested me. What interested me was ideas." The New Republic and the Sun, he says, will be idea factories. He insists that he doesn't especially care, within certain broad parameters, what the ideas are; merely that they be generated in a high-minded and debate-influencing manner. He's prepared for the inevitable questions about whether he might lend the magazine a more conservative slant, and he's ready with his answer. "Marty is the editor in chief," he said. "Peter is the editor. Leon [Wieseltier] is in charge of the cultural side. They define the magazine's vision. Do I have an interest in what they write? Yes. Will I read it? Yes. Will I talk about it? Yes. But that's different than making an effort to change who or what the magazine should support. The answer is no, absolutely not." For what it's worth, Myron Magnet, the editor of the Manhattan Institute's City Journal, adores Hertog and says the journal has had "complete editorial independence." Of course, Hertog would be far more likely to agree with the conservative City Journal on most issues than with The New Republic.

Hertog seems to mean what he says about the magazine; on some level, maybe many levels, his stated belief in the purity of ideas is genuine. But inevitably there will be flash points where the magazine's position will clash with his. And one could argue that based on the record, he is a particularly partisan person. In addition to the Manhattan Institute -- respected, but never known for recidivist bipartisanship -- he contributes to the American Enterprise Institute. He gives some money to the Club for Growth, a political-action committee that aggressively backs only the most conservative, free-market candidates. Already this year it has financed commercials for Republican John Thune in the contentious Senate race in South Dakota. The point of these ads, in addition to helping Thune, is to hit Tim Johnson, Thune's Democratic opponent, and to weaken Tom Daschle in his home state (ultimately, of course, to make him minority leader). The club is also backing many congressional candidates it seems likely that The New Republic would oppose.

A March 18 TNR piece on Democratic strategy in the by-elections mentioned the South Dakota ads. The piece didn't note that the club financed them, and it was probably under no special obligation to do so. But how will the magazine cover these elections, in which it would presumably prefer to see Democratic victories by and large, while its new one-third owner helps finance GOP control of Congress? The question is a fair one.

So is the question of how the magazine will handle Hertog's business interests. Alliance Capital has been subpoenaed by the state of Florida because, while advising the state's pension fund, Alliance executives -- though not Hertog -- advised that the fund buy Enron stock even after the energy firm was under investigation. The shares were purchased at prices ranging from $9 to $23, but ultimately dumped for 28 cents. The fund lost $334 million -- a large number, but, to be fair, a very small percentage of the fund's total value of around $100 billion. The state attorney general's office and the state board of administration, which oversees the fund, are both investigating.

Hertog had no role in the Enron debacle. Even so, for The New Republic, a magazine whose editorial pursuits may take it in any number of directions, the presence of an owner whose business interests will also range far and wide is new and potentially fraught. It was always unlikely, for example, that TNR editors would face a crisis of conscience over how to cover the Singer sewing machine company, the source of Peretz's wealth.

Hertog's role, he being the conservative, is more interesting, but Michael Steinhardt was the man who made the deal happen. Peretz and Hertog did not know each other, but Steinhardt has known them both for around 30 years. He says he'd known for some time that Peretz was in the market for co-investors, and once he introduced Peretz and Hertog, the deal "happened very, very quickly. And I felt that if I was introducing Roger to a losing investment, I had a certain obligation to lose some money myself." The deal, giving each man one-third of the magazine, was sealed over Thanksgiving weekend at Peretz's house in Truro, Massachusetts, on Cape Cod.

A beefy 61-year-old with darting blue eyes, Steinhardt is one of his era's true celebrity investors, notwithstanding a scrape with the government over an alleged T-note scandal, for which he paid a $40 million fine (without any admission of wrongdoing). His office is decorated with the kind of art that suggests an adventurous eye. He collects Judaica, and pre-Columbian Peruvian feather textiles. On a 51-acre farm in northern Westchester County, he keeps, literally, a private zoo: kangaroos, wallabies, camels, zebras, an antelope, and other fauna corralled into four paddocks of a few acres each. The animals, he said, "somehow have to make it together….Sometimes I make mistakes, but, you know…."

As a self-styled contrarian who grew up in a "very liberal" Brooklyn household, Steinhardt voted for Barry Goldwater in 1964, couldn't bear John Lindsay, and only started inching leftward when Richard Nixon came along. When Al From launched the DLC in the 1980s, a relationship seemed natural. "Steinhardt liked things like the earned-income tax credit," From said. "You know, no one who works full-time ought to be poor. He always used to come around to that principle."

If there's a tie that binds Steinhardt's roles with The New Republic and the Sun, he says, "it's personal loyalty" to both Lipsky and Peretz. And though he likes to debate ideas, he seems to have little interest in politicians, and little taste for politics. He claims he didn't cast a vote in the 2000 presidential election, but he speaks glowingly of Bush's presidency. When I ask him to cite a contemporary politician he admires, the first name he produces is Democrat Cory Booker, the African-American Newark City Councilman who is running for mayor against incumbent Sharpe James. He invokes Booker with an air of grave solemnity, but the answer is a cop out: Booker seems great, but at this point he's more a vessel of expectation than an actual political leader. He hasn't had to wrestle publicly with dissatisfying choices, risking voters' disapproval and contributors' judgment.

Whereas Hertog selects his words with prolonged care, Steinhardt seems to grab them out of the air as they appear before him. After about 15 minutes of why-he's-doing-this, he smiles and stops himself: "What I should have said and didn't say is that I made both these investments to get rich. Shouldn't that be the reason you make investments?" When I ask the obligatory editorial independence question, he's a little more frank than Hertog: "If tomorrow Peter wrote an editorial that I clearly didn't understand the justification for, I would ask him, sure." (Neither Beinart nor Wieseltier would agree to speak for this article, though Beinart did send along an e-mail comment to the effect that Hertog and Steinhardt have been supportive and cooperative). When I ask how much money he's in for, guessing that between The New Republic and the Sun it must be several hundred thousand dollars a year, he fixes me with a stare that means business: "Oh, no, no, no, it's more than that. Because Marty doesn't have to come up with any money unless the losses exceed a certain number, and that number is several million dollars." Finally, asked how he plans to get the magazine in the black, he speaks with a candor that a staffer in the middle of the masthead might find a touch ominous: "The New Republic has probably not been looked at with a sharp business eye in a long, long time. Maybe it shouldn't. I'm not sure. But to the degree that Roger and I bring something to the party, it's the likelihood that we will ask questions that haven't been asked until now. And how that will change The New Republic remains to be seen." So far, the staff has accepted a 10 percent pay cut in exchange for no layoffs, and the Washington offices are relocating from Dupont Circle to the earthier precincts around Metro Center.

Relocation has commenced as well for Seth Lipsky, who gained wide esteem in the 1990s as editor of Forward. It seems hard to imagine now, but Forward was published in Yiddish as recently as 1990. It was Lipsky who persuaded the Forward Association to publish an English-language version. His dream had been to make the weekly paper a daily, and when he broached the subject with Steinhardt at a Brooklyn Heights restaurant in 1993, "he was so derisive of me and my ideas," Lipsky said, "that my wife" -- that would be Amity Schlaes, erstwhile of the Journal, now a Financial Times columnist -- "left the dinner and went to smoke a cigarette with the owner." By 1995, Steinhardt had stopped being derisive, and at Lipsky's urging he bought half the paper. The arrangement lasted five years, until the association, which retained the right under the contract to control the editorship, sent Lipsky packing, threatening to close down the paper if he didn't leave.

It was a shame that it came to that, because Lipsky's Forward was widely admired, even by many liberals, as a conservative but unpredictable and engaging voice. The paper's coverage of the 1991 Crown Heights riots, for example, was some of the best that appeared in the city. Two years later, the paper went on to shock the conservative Jewish political movement it had helped create in New York by endorsing David Dinkins over Rudolph Giuliani (Lipsky says this was a decision of the old liberals and socialists that he merely chose not to fight). The paper added new cultural elements and sought a younger audience. "He could provoke the Jewish establishment in ways that I thought were just joyous," Steinhardt said.

Lipsky doesn't want to discuss his departure from the paper, but he does invoke Forward as a model for the Sun. "The Forward," he said grandly, "literally won the Cold War." He means that it was Jay Lovestone, working out of Forward's offices and with Forward money, who sent Irving Brown to Europe to found the anti-Communist International Confederation of Free Trade Unionists, which spawned Solidarity, which notched the first chinks in the totalitarian armor, which ultimately brought the whole shebang tumbling down.

He tells me this history in some detail because he wants me to understand his conception of what a newspaper is capable of. He chose the name Sun because the old Sun, whose most famous nineteenth-century editor was abolitionist Charles A. Dana, had, in Lipsky's view, high standards and a clear sense of mission. In the new Sun, which will publish five days a week, Lipsky hopes to bring that clarity to bear on a city that he believes still labors under the oppressive legacy of decades of liberal turpitude. "I don't feel that the crisis is over in New York," he said. "I don't feel it came upon this city with the attack on the World Trade Center, and I don't feel that it's over." Added managing editor Ira Stoll: "The debate is so skewed here. Where's the voice that's saying we need further reductions in taxes? Where's the voice that's saying we need to continue to take a hard look at rent control?"

Well, it's here. Hertog put up the initial money for the business plan; Steinhardt and the other investors, who include Conrad Black, a conservative Canadian press baron, came later. Hertog says all will be well if the paper has a circulation of 30,000 after a year. No one will talk money too specifically, of course, but one gets the sense that this is no Washington Times, drinking from a bottomless well of resources. The Sun's editorial operation is shoestring; its news-gathering staff numbers 10, including Lipsky and Stoll. Lipsky says he sees no point in "being a success d'estime without making a profit." The suggestion is that the circulation target is rather firm.

Watching to see whether the paper hits that mark should be fascinating business. New York does not, of course, lack for a conservative voice; the New York Post sees to that. But the Post's conservatism is suffused with the kinds of confused elements one might expect to find when servants (the editors) attempt to anticipate the whims of the master (Rupert Murdoch). Sometimes it's principled, sometimes it's knee-jerk. Other times it's nativist. Periodically it's tarted up with too much T & A. Overall it's more clearly consistent about what it doesn't approve of than what it does. One can expect, by contrast, that Lipsky and Stoll's Sun will be crystal clear about what it wants. It'll be the voice of this velvet conservatism, particularly on the domestic issues about which it's passionate, most of which are also urban: vouchers; education standards; sclerotic municipal unions; the accumulated state, local, and federal tax burden; and crime. These issues constitute the "crisis" to which Lipsky refers. He reckons himself its Paine and has a year to make 30,000 other people reckon likewise.

Finally, there's Peretz. He would, I gather, bristle at being called any kind of conservative. "I've never been uncomfortable," he said, "calling myself a liberal." Fine, but for most of the last decade his magazine has moved away from the kind of liberal standard-bearing that animated it in the Michael Kinsley and Hendrik Hertzberg years of the 1980s. In fairness, the magazine had conservative writers then -- Fred Barnes, Charles Krauthammer -- but its editorial policies usually reflected a robust anti-Reaganism.

For much of the 1990s, it engaged instead in a degree of liberal open-mindedness and interest in debate that, on several well-known occasions, transmuted into liberal self-flagellation, whose antipode one somehow never sees in the conservative journals. Possibly the two most famous pieces the magazine ran in the 1990s were Betsy McCaughey Ross's attack on the Clinton health bill, which helped kill it, and a piece by Charles Murray adapted from The Bell Curve. Kinsley, no longer at The New Republic by then, shredded McCaughey Ross's flimsy scholarship, and she went on to embarrass herself as an actual politician in continually imaginative ways. The Bell Curve was racism pretending to be science. Both, the Murray piece especially, scandalized many liberals. I ask Peretz if he now regrets either. After long -- that is, long -- pauses, he decides not to defend the substance of either, but to defend the editor's decisions to publish them (in both cases, Sullivan). "The New Republic has a history of doing exactly that kind of thing," he said. "A lot of things that editors have set down as an issue of their own independence."

The irony is that lately, under Beinart, some of the magazine's liberal spark has returned, on domestic and cultural questions in particular (a recent cover story attacked Bernard Goldberg's Bias). Peretz didn't like the fact that during the last presidential election the magazine went along with many of "the cliches I thought the rest of the press was pushing" about his friend Al Gore. That aside, he said, "I haven't gotten along better with any editor than Peter."

But will Hertog and Steinhardt? Peretz says that once they stepped forward as suitors, all other considerations were quickly dropped. He says that he and Steinhardt have "virtually identical" politics, while in Hertog he found "a very interesting man and a rare character type -- a real businessman-intellectual."

He had had several conversations with Joel Hyatt, an Ohio native and founder of Hyatt Legal Services who now teaches at Stanford. In fact it was Gore who put Peretz and Hyatt in touch, but Hyatt says "my offer was to buy 100 percent" and to become, in essence, the new Marty Peretz. For his part, Peretz asserts that "I wasn't ready to quit being me." Another suitor was Haim Saban, creator of the Teenage Mutant Ninja Turtles and a major Democratic contributor. But Saban, Peretz says, "was too much a 'party man' for my tastes. It was just sociologically wrong." Peretz wanted passive, not active, investors.

Hertog and Steinhardt are sociologically right in every way. They are committed Zionists. They are intelligent and engaging men. They are interested in ideas and debate. But one thing they might not be -- something they seem rarely to have been, in their political activities or their business careers -- is passive. It may be premature to say that what these "velvet conservatives" are doing with The New Republic and the Sun will become something bigger; on the other hand, it's already something bigger than it was this time last year. Hertog, Steinhardt , Peretz, and Lipsky have the money, the acumen, and the forums to do whatever they wish. "I'm not sure this represents anything more than these two guys getting together to do something," said Weekly Standard editor William Kristol, a friend of Hertog's for a decade. "But yeah, the tectonic plates are due for a shift, and there's a reform Republicanism that can marry up fairly comfortably with the sort of center-right Democrat."

Hertog and Steinhardt may not see themselves as the vanguard of a movement -- yet. But it's difficult to imagine them as modern-day Banquo's ghosts, invisible to the larger world, checking Macbeth's conscience. They're learned men; I'm sure they know how much impact Banquo's ghost finally had.

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