The New York Times reports on the end of today’s bailout hearing:

As Mr. [Barney] Frank adjourns the hearing, he admits that aid for the automakers would likely come in the form of “a bill next week that nobody likes.” Clearly much negotiation will be needed in the days ahead, but he now believes that support among his colleagues is building. “I hope that we will get something acceptable enough to member of both houses that we will avert disaster,” Mr. Frank says. “I have more optimism than I had before.”

Still, there are many in the House who feel the same way as Jackie Speier, Democrat from California. “The American people are damn mad,” Ms. Speier said. “They do not want us to bail out this industry.”

So: we’re either building momentum, or Congressmen would be foolish to give them a dime. We’ll get the money from TARP, or we’ll vote new money. Or they can use the money already allocated for “green” conversion. Or they can fend for themselves. If you’re getting the sense things are adrift and no one wants to really bring this to a head — you’re right.

There is a reason President-elect Obama is laying low. This is a lose-lose. Sure, he’d like to get this “out of the way,” but to forcefully push for money would put him right in the middle of a huge fight — both within his party and with conservatives. So Congress is on its own. This then becomes a a test of sorts for the Democratic Congress — can they make hard choices and navigate through conflicting constituencies? So far the answer is a resounding “no.”

As Michigan Sen. Carl Levin lamely put it: “It’s very cumbersome for Congress to act. There were so many different approaches thrown out there.” Yeah, legislating is hard, Senator. In this case, legislative incompetence and confusion may be a blessing, at least for the taxpayers.

 soccer dad, on Shmuel Rosner:

Well Bush sent Powell to Durban I under pressure from the Congressional Black Caucus. But when the U.S. couldn’t get Durbanites to change the wording of their resolutions, Powell walked out. (And was mocked by the NYT for doing so.)

Now in 2001 there was pretext that Israel’s war against Fatah was so brutal it required international actions. In 2009, Israel is blockading Gaza but giving a lot more freedom to Fatah. Why doesn’t President Elect Obama or someone close to him stand up and say that the pretext for Durban II is lacking?

This is where I see Obama to be inferior to Bush. Bush, while imperfect, took a stand against the virulent antisemitism of the UN and its related organizations. He tried to change the terms of the debate. (Evelyn Gordon wrote an essay “The Frequent Abstainers Club” about this.) I can’t see that Pres. elect Obama will see fit to waste political capital on fighting such fights.

America lost 533,000 jobs in November, according to the Labor Department’s monthly jobs report released today. The unemployment rate now stands at 6.7 percent. The economy has shed 1.9 million jobs since last December.

That’s not all. The underemployment rate hit a record high 12.5 percent. Moreover, more than 420,000 discouraged Americans took themselves out of the job market in November. If they had continued looking for work, the unemployment rate would be around 7.0 percent now.

The disastrous jobs report is just one sign of alarming economic deterioration. Oil, for example, is today trading under $42 a barrel, down from $147 in mid July. A Merrill Lynch report says it could be heading to $25 next year. The stock market panic and financial crisis that froze credit in the banking system is now affecting the underlying economy. President Bush started his short remarks this morning from the South Lawn by saying we are in a “recession.” That’s in line with Monday’s official pronouncement of the National Bureau of Economic Research, which told us the downturn started in December 2007.

We are technically in a recession, but it is more precise to say we are experiencing the first stages of something more severe. This year, the Bush administration has tried all sorts of stimulus measures, including throwing previously unimaginable amounts of money at Wall Street and lesser sums at the rest of the country. The Fed, for its part, has continually cut interest rates this year. Ominously, nothing seems to be working. And nothing the Obama administration will be doing-including sponsoring a possible trillion-dollar stimulus package – will have much effect either. The imbalances in the economy appear simply too large to be unwound by superficial tactics like fiscal spending.

To see why government tactics are not working, let’s look at the job-loss predictions for this month. Analysts believe the December jobs report could be worse than November’s. Why? Businesses will be laying off staff simply because they do not want to be continually chasing the downturn next year. Deflationary psychology, therefore, is gripping Americans.

And not just Americans. The risk is that simultaneous economic failure around the world will exacerbate the situation everywhere. In good times, our trade and financial links to other economies propelled everyone forward. Now, the process is going into reverse. In July, we saw one nation-China-attempt to steal an advantage by artificially depressing the value of its currency to give an added boost to its exporters. On Monday, Beijing made the situation worse by driving the renminbi down almost one percent. At some point, other nations will retaliate with competitive devaluations of their own, and then we will find ourselves in another global trade war.

So, as nations squabble, a bad downturn will undoubtedly become something much worse. Although our elected leaders will not say so, we appear heading for a once-in-a-lifetime downturn. Call it a depression.

Funny, I could have sworn Obama supporters used to say something about his election heralding the end of non-deserving American dynasties?

“The crazy speculation about Hillary Clinton’s Senate seat may not be so crazy after all. A Democrat who would know tells ABC News that New York governor David Paterson has talked to Caroline Kennedy about taking the seat, which was once held by her uncle, Robert F. Kennedy. It’s not exactly shocking that Paterson would reach out to one of the most highly respected public figures in New York, but this is: Sources say Kennedy is considering it, and has not ruled out coming to Washington to replace Hillary Clinton in the Senate.

[...]

When Robert Kennedy, Jr. took himself out of the running for the seat earlier this week, he told Jonathan Hicks of the New York Times, “Caroline Kennedy would be the perfect choice if she would agree to it.” And one more thing: We hear that President-elect Obama has made it clear that he thinks Caroline Kennedy would be a great choice.”

It’s hard to see how promoting a member of the Clinton family and filling her old spot with a Kennedy marks the end of dynastic American politics. 

The best book Senator John Kerry has read in the last year is Bob Woodward’s The War Within:

Bob Woodward’s “The War Within”. Amazing piece of reporting on Iraq and the surge. Boggled my mind to see how much access Woodward was given and how much highly classified information he had—including decision memos to and from the President, for heaven’s sake! Fascinating to read how the President played the players against each other to reach his goal of putting the surge in place. It would be a good read for the President-Elect as an example of how much internecine warfare occurs in a White House, and given the strong willed personalities in his, the Obama White House will not be an exception.

As former White House aide Peter Wehner wrote on this blog after the book was published:

As for the failure to confront reality: it is President Bush who was right and the opponents of the surge who were wrong. The President understood, like many others, that the previous plan was failing. But Bush also possessed the strategic insight and political courage to advocate an increase in troops and a fundamentally different counterinsurgency strategy, which very few others advocated at the time. So who was more in touch with the reality in Iraq during 2006-2008–Bush or those who opposed his plan?

It seems Kerry ultimately takes greater issue with Obama than with Bush. After all, Bush’s plan–despite opposition–has “succeeded beyond our wildest dreams,” according to Obama. And Kerry’s warning to the President-elect–”given the strong willed personalities in his, the Obama White House will not be an exception”–is evidence of Kerry’s severe resentment for not being selected to a cabinet position in Obama’s administration. Will Bob Woodward be around to cover this war within?

Does this sound like a man who’s accepted his place in the shadows?

The United States is at risk of sinking into deflation and president-elect Barack Obama has no choice but to put the country further into debt, former US president Bill Clinton said Friday.

“The big risk now to America and the world is deflation, contraction, dropping asset prices,” Clinton said after giving a lecture in the Malaysian capital.

“We have to stimulate the economy, which means that in the short run he will have to take America into even more debt. There is no alternative.”

[...]

“The economic crisis we have now will not permit president-elect Obama to pursue the economic policy I did. That would be irresponsible now,” he said.

He said that when he was elected, America was suffering from too much debt, insufficient savings and high interest rates that inhibited economic activity.

“Today interest rates are low but there is no money in the system… and asset values are dropping,” he said, urging Obama to address the crisis of negative equity in homes.

Clinton not only knows what Obama “has to” do about this, but is ready with the next step, too:

“He has to put a floor under the asset values and then use the government’s spending ability to stimulate economic activity. Then when we resume growth we should adopt a more conservative and traditional budget policy,” he said.

This is going to be fun.

Charles Krauthammer reminds us that, in the aftermath of the Mumbai massacre, we shouldn’t lose track of the remarkable, once-in-a-generation achievement in the Middle East: ratification of the status of forces agreement between the U.S. and its fledgling ally Iraq. He continues:

Also largely overlooked at home was the sheer wonder of the procedure that produced Iraq’s consent: classic legislative maneuvering with no more than a tussle or two — tame by international standards (see YouTube: “Best Taiwanese Parliament Fights of All Time!”) — over the most fundamental issues of national identity and direction.

That any of this democratic give-and-take should be happening in a peaceful parliament just two years after Iraq’s descent into sectarian hell is in itself astonishing. Nor is the setting of a withdrawal date terribly troubling. The deadline is almost entirely symbolic. U.S. troops must be out by Dec. 31, 2011 — the weekend before the Iowa caucuses, which, because God is merciful, will arrive again only in the very fullness of time.
Moreover, that date is not just distant but flexible. By treaty, it can be amended. If conditions on the ground warrant, it will be.

True, the war is not over. As Gen. David Petraeus repeatedly insists, our (belated) successes in Iraq are still fragile. There has already been an uptick in terror bombings, which will undoubtedly continue as what’s left of al-Qaida, the Sadrist militias and the Iranian-controlled “special groups” try to disrupt January’s provincial elections.

The more long-term danger is that Iraq’s reborn central government becomes too strong and, by military or parliamentary coup, the current democratic arrangements are dismantled by a renewed dictatorship that abrogates the alliance with the United States.

Such disasters are possible. But if our drawdown is conducted with the same acumen as was the surge, not probable.

Every conventional wisdom has been turned on its head in the course of the Iraq War. And political ironies abound. The vilified George Bush did largely accomplish his goal of liberating an entire nation. A democratic regime can function in the Middle East. And there was in fact a military “solution”–one  that preceded the political reconciliation. Each of these propositions was hotly disputed by the man who is now President-elect, who rose to power on the promise to end the “disastrous” war. After defeating the man who championed the successful war strategy, he will now preside, if he is competent, over a great diplomatic and military victory.

So President Obama can go wherever he chooses for his address to the Muslim world. But the most critical message has already been sent –via General Petraeus and George W. Bush. The Middle East need not be a bastion of extremism, violence, and anti-Americansim. Radical clerics don’t have the last say unless the population passively consents.  There is another route, one which Muslim countries can freely choose for themselves.  What more need be said?

Claudia Rosett wrote a sensible article about the coming Durban-2 summit in Forbes. For those unfamiliar with Durban-1, or the idea of Durban, what we’re talking about here is an infamous 2001 anti-racism-turned-anti-Israel UN conference, soon to be reconvened:

[T]he U.N.’s Orwellian twist, once again, is that this conference is configured not to end racism, but to stir up hatred. In a series of preparatory meetings over the past 16 months, the organizers have already taken aim at Israel as their prime target. Increasingly, the organizers are also priming the conference for a broader attack on other democratic nations, especially the U.S. Some are pushing for a U.N.-backed gag order that would enlist Islamic anti-blasphemy laws to stifle free speech worldwide.

Rosett is also right to identify Durban as an early foreign policy test for the new Obama administration:

Durban II is not solely a mob move against Israel. It is a dishonor to real heroes of the war on prejudice, such as Martin Luther King. It is an assault on the genuine tolerance of free societies. It is an attempt to commandeer the U.N.–yet again–as a vehicle for the kind of hate that leads to such horrors as the slaughter in Mumbai, or for that matter, Sept. 11. Among the U.N.’s 192 member states, only two have had the backbone to announce that they will boycott the Durban Review: Canada, and for obvious reasons, Israel. In the U.S., President Bush has deferred any final decision to the next administration. President-elect Obama, what will you do about Durban II?

Having made some rounds in the last couple of days, I can tell you this: Israeli officials, while acknowledging that what Obama faces here is a very tricky situation–the new internationalist American President might find it difficult to start his term with the boycotting of a UN sponsored summit–also think of it as a test. Of course, there’s still time, and the U.S. can try, as it did in the past, to pressure Durban’s organizers into crafting a more acceptable, less biased agenda. But even a new agenda will have to be some compromise–and the extent to which the Obama administration will be willing to compromise in order to participate in this dispensable event can serve as an indication from which to learn more about the new team in power. We know very little about the way this man is going to rule, one Israeli official has told me. Durban will give us some early sense of his real priorities.

It seems that the alternative mode of transportation taken by the Big Three CEO’s to Washington D.C. didn’t deliver a different result. At least not now. It appears that the public has had it and Congress is intensely “skeptical” — the new favorite term for “not going to explain to the folks back home why taxpayers should throw more money down a rathole” — about a bailout. This report suggests that, despite their expressed fondness for the car industry, Democrats aren’t much moved to do anything:

Many Democrats, despite the support of party leaders, remain ambivalent. And across the board, sharp disagreements exist over the source of taxpayer funding for any rescue, how much would be committed and under what terms.

Asked Wednesday about Detroit’s appeals for aid, Mr. Obama dodged, saying he would watch the hearings before deciding what assistance is warranted. Transition officials say they see no advantage in shaping legislation that Democrats hope to complete before the Jan. 20 inauguration.

After his electoral triumph, Mr. Obama tapped Michigan Gov. Jennifer Granholm and former Michigan Rep. David Bonior for his economic advisory panel, saying the auto industry is the backbone of U.S. manufacturing.

Ms. Granholm and Mr. Bonior were to be Detroit’s contacts with the Obama transition. Yet people familiar with the matter say that beyond some e-mail discussions and conference calls, their input hasn’t been sought.

You can attribute it to the “power vacuum,” or you can blame the car companies poor PR. But at bottom, the notion of providing billions and billions — maybe as much as $125 billion would be needed – to failing companies with little hope of salvation (as least two of the three) simply isn’t palatable. Sometimes an idea is too dumb, even for Congress.

Next up is the House hearings. We’ll see if the CEO’s do any better there.

Abe makes some excellent points regarding the probable meaninglessness of President-Elect Barack Obama’s proposed address to the Muslim world from an Islamic capital.  Justin‘s question regarding the value of an English-language speech to non-English speakers is also well taken.

Still, I’m all for experimentation when it comes to public diplomacy–after all, relatively little is at stake.  So here’s one approach that might yield positive results: Obama could use his speech to address our differences with the Muslim world directly, and then highlight areas of prospective consensus to calm hostilities towards key U.S. foreign policy objectives.

Obama used this kind of argument very effectively as a candidate.  For example, while addressing Republican voters during his speech at the Democratic National Convention, Obama unloaded this stunning rhetorical flourish:

We may not agree on abortion, but surely we can agree on reducing the number of unwanted pregnancies in this country. …

I know there are differences on same-sex marriage, but surely we can agree that our gay and lesbian brothers and sisters deserve to visit the person they love in a hospital and to live lives free of discrimination.

You know, passions may fly on immigration, but I don’t know anyone who benefits when a mother is separated from her infant child or an employer undercuts American wages by hiring illegal workers.

So, with this approach in mind, imagine a speech with this sound bite:

We may not agree on the 2003 decision to invade Iraq.  But surely we can agree in 2009 that a stable Iraq – free from tyranny, terrorism, and bloodshed – is a worthwhile goal.

And I know that we have strong differences regarding our stances on Israel.  But surely we can agree that the Palestinians deserve a homeland – and that justice for the Palestinians cannot rightfully mean injustice for Israelis.

You know, passions fly on the proper execution of our War on Terrorism – as much in Cairo cafes as in Washington coffee shops.  But surely we can agree that deliberately killing innocent civilians – no matter the culprits’ political agenda – is the greatest crime known to mankind, and that preventing it is a just cause that demands a globally unified front.  I invite you to join and support this front for peace and tolerance today.

Take note: this speech concedes nothing, while pitching key aspects of our foreign policy by emphasizing consensus principles to which reasonable people might subscribe.  This is the essence of public diplomacy: selling policies that are otherwise unpopular to moderate sectors of foreign publics.

Of course, it’s impossible to predict whether this might work. It’s also hard to determine what success might look like.  But insofar as Obama’s unique background might make the Muslim world more receptive to him, a properly framed address is certainly worth a shot.

From the “Ya think?” file on Chris Matthews’ very public consideration of a Senate run: “If Matthews is serious about running, some within the network hope he commits to the Pennsylvania Senate race sooner rather than later. Otherwise, his nightly presence on ‘Hardball’ provides easy fodder to critics fueling the narrative that MSNBC is in the tank for the Democratic party. [Query-- isn't that true without the Senate run?] After NBC News was stung by criticism during the presidential campaign — charged with bias resulting from the antics of more outspoken personalities on MSNBC — staffers worry the situation will be repeated over the next six months.”

When Media Matters and Brent Bozell both agree on something — Matthews’ departure — maybe it’s time for NBC to consider if its journalistic brand is becoming as worthless as GM’s stock.

But this takes the prize for the most obvious headline of the week: “Matthews could be haunted by his own words.”

I agree with this take on the money gap in the presidential election. It was a symptom, not the cause of the Republicans’ predicament. Other factors (e.g., a problematic nominee, poor party building, a depressed base) had much more to do with it. But it sounds better to blame the rich guys on the other side.

Is GM engaged in magical thinking? They came to the right place. Washington is full of that sort of hooey (e.g. “government creates jobs”).

Okay, one Senator was on the ball at the Big Three hearing: “Senator Corker says G.M. can’t survive with its current capital structure, and complains that G.M. is not seeking a big enough haircut from bondholders. He also says the U.A.W. concessions did not amount to much. In a bankruptcy, he says, the obligations to the post-retirement beneift fund known as VEBA ‘are toast.’ He demands promises of big concessions from the U.A.W., and does not get them. Instead, he hears about a poor old lady who needs her pension.” (Others liked what Corker had to say as well.)

And is Sen. Corker the only to notice that “Chrysler” is really owned by a private equity fund, Cerberus? You remember them? The same gang that stripped Mervyn’s retail chain store bare and left the employees without so much as their accrued vacation pay. These are the people Democrats want to give money to?

And in case you still weren’t convinced the car bailout is a bad idea: “All three automakers promised that they would not be back in front of Congress next year if they got the funds — assuming the economy doesn’t go completely down the tubes in the next few months. Moody’s Economy.com chief economist, Mark Zandi, questioned that prediction. He said the $34 billion wouldn’t be nearly enough and put the total price tag at between $75 billion to $125 billion. ”

Sorry, but Al Franken’s “missing ballots” remind me of another famous missing item from a classic movie. Didn’t end well in the latter case either.