Commentary Magazine


Posts For: December 18, 2008

Economic Stimulus Done Right

This must be Keynes’s year:

President-elect Barack Obama’s economic team is crafting a stimulus package to send to Congress worth between $675 billion and $775 billion over two years … The transition team has conveyed the figures to Capitol Hill, where the package is likely to grow as it works its way through the House and Senate. An Obama adviser familiar with the planning said the package could top out around $850 billion.

[The plan] will include a tax cut designed to pump $50 billion to $100 billion into the economy almost immediately; around $100 billion in aid to state governments, primarily to temporarily assume more of the cost of Medicaid, in hopes of staving off benefit cuts or tax increases; and funding in five main areas: traditional infrastructure, school construction, energy efficiency, broadband access and health-information technology.

As if the $700 billion financial-bailout package weren’t already hard to swallow, now a stimulus measure at least as plump is right around the corner. Compounded by the Federal Reserve’s monetary incontinence in the face of financial crisis, all of this adds up to quite a bit of “stimulus.”

If the new administration is seeking maximal stimulant bang for the $850 billion bucks likely to be pledged and is willing to expand the deficit by an equal amount, freezing taxes by the full extent of the stimulus package would be the way to go. Such an implicit fiscal measure would allow the gains to be distributed efficiently wherever the dynamics of supply and demand dictate.

None of this deficit-financed stimulus budget would be wasted on government projects delivering no economic gains, or vanished into leaky bureaucratic channels, or decimated by the prohibitive administrative costs associated with distributing funds. Government spending is about as stimulating to a bruised economy as putting people to work digging holes and filling them up again would be. Yes, that too has been done before, by none other than FDR in comparable economic circumstances.

An aggregate tax cut of $850 billion would allow the corresponding stimulus to be distributed by market forces without any top-down economic engineering. The economy knows how to mend its holes all by itself when left to its own devices. In fact, the results of such a measure may turn out to be so astounding as to undermine the Democratic Party’s anti free-enterprise rhetoric–and the Obama administration cannot afford such a blow, so the next best stimulus option is, of course, the  redistributive, make-work government spending-spree we’re going to get.

This must be Keynes’s year:

President-elect Barack Obama’s economic team is crafting a stimulus package to send to Congress worth between $675 billion and $775 billion over two years … The transition team has conveyed the figures to Capitol Hill, where the package is likely to grow as it works its way through the House and Senate. An Obama adviser familiar with the planning said the package could top out around $850 billion.

[The plan] will include a tax cut designed to pump $50 billion to $100 billion into the economy almost immediately; around $100 billion in aid to state governments, primarily to temporarily assume more of the cost of Medicaid, in hopes of staving off benefit cuts or tax increases; and funding in five main areas: traditional infrastructure, school construction, energy efficiency, broadband access and health-information technology.

As if the $700 billion financial-bailout package weren’t already hard to swallow, now a stimulus measure at least as plump is right around the corner. Compounded by the Federal Reserve’s monetary incontinence in the face of financial crisis, all of this adds up to quite a bit of “stimulus.”

If the new administration is seeking maximal stimulant bang for the $850 billion bucks likely to be pledged and is willing to expand the deficit by an equal amount, freezing taxes by the full extent of the stimulus package would be the way to go. Such an implicit fiscal measure would allow the gains to be distributed efficiently wherever the dynamics of supply and demand dictate.

None of this deficit-financed stimulus budget would be wasted on government projects delivering no economic gains, or vanished into leaky bureaucratic channels, or decimated by the prohibitive administrative costs associated with distributing funds. Government spending is about as stimulating to a bruised economy as putting people to work digging holes and filling them up again would be. Yes, that too has been done before, by none other than FDR in comparable economic circumstances.

An aggregate tax cut of $850 billion would allow the corresponding stimulus to be distributed by market forces without any top-down economic engineering. The economy knows how to mend its holes all by itself when left to its own devices. In fact, the results of such a measure may turn out to be so astounding as to undermine the Democratic Party’s anti free-enterprise rhetoric–and the Obama administration cannot afford such a blow, so the next best stimulus option is, of course, the  redistributive, make-work government spending-spree we’re going to get.

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Commentary of the Day

tom hewitt, on Peter Wehner:

It will be difficult for the public to connect the dots because the media won’t supply enough of those dots. For instance, Bernie Madoff was a big Democrat contributor but no doubt most of the hoi polloi considers him part of the supposedly Republican Wall Street greed machine. Barnie Frank and Christopher Dodd have been supplied with Teflon suits by the media for their role in the Fannie Mae-Freddie Mac debacle. What’s important is that the Dems mean well, the Republicans are simply evil.

tom hewitt, on Peter Wehner:

It will be difficult for the public to connect the dots because the media won’t supply enough of those dots. For instance, Bernie Madoff was a big Democrat contributor but no doubt most of the hoi polloi considers him part of the supposedly Republican Wall Street greed machine. Barnie Frank and Christopher Dodd have been supplied with Teflon suits by the media for their role in the Fannie Mae-Freddie Mac debacle. What’s important is that the Dems mean well, the Republicans are simply evil.

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Re: Democrats and The Culture of Corruption

Pete, the phenomenon which you aptly document is taking a toll on the Democrats. Rasmussen reports:

With the Blagojevich scandal unfolding in Illinois and tainting at least one senior Obama administration official, the number of voters unsure which political party they can trust to deal with government ethics and corruption has climbed to its highest level since June.

A new Rasmussen Reports national telephone survey finds that 39% don’t know which party to trust. Last month, just 30% of voters were undecided.

Trust in both the Democratic and Republican Parties is also at the lowest levels since June. Now, 36% trust the Democrats more, while 26% trust Republicans more. In November, voters trusted Democrats more when it came to corruption by a 38% to 31% margin.

I wonder whether the spate of senate seat appointments by Democratic governors will also sit poorly with voters. Seeing the rich and well connected — and worse, the related — getting positions of great power can be a bit off-putting. Vice President-elect Joe Biden’s stunt –putting his aide in for a couple of years to keep the seat warm for Biden’s son– embodied the perfect nexus of presumptuousness and nepotism. And as lovely as Carline Kennedy might be, her selection would be further evidence that the rich and powerful get what they want. At least Hillary Clinton did the hard work of running for office and winning fair and square.

All in all, it’s not a pretty picture. The Democrats would do well to learn from the Republicans’ mistakes: throw the miscreants out, pick party leaders on merit and be quick and complete in disclosing bad facts. Democrats delude themselves if they conclude their gains are permanent or that voters will be more forgiving of their misdeeds than of the Republicans’.

Pete, the phenomenon which you aptly document is taking a toll on the Democrats. Rasmussen reports:

With the Blagojevich scandal unfolding in Illinois and tainting at least one senior Obama administration official, the number of voters unsure which political party they can trust to deal with government ethics and corruption has climbed to its highest level since June.

A new Rasmussen Reports national telephone survey finds that 39% don’t know which party to trust. Last month, just 30% of voters were undecided.

Trust in both the Democratic and Republican Parties is also at the lowest levels since June. Now, 36% trust the Democrats more, while 26% trust Republicans more. In November, voters trusted Democrats more when it came to corruption by a 38% to 31% margin.

I wonder whether the spate of senate seat appointments by Democratic governors will also sit poorly with voters. Seeing the rich and well connected — and worse, the related — getting positions of great power can be a bit off-putting. Vice President-elect Joe Biden’s stunt –putting his aide in for a couple of years to keep the seat warm for Biden’s son– embodied the perfect nexus of presumptuousness and nepotism. And as lovely as Carline Kennedy might be, her selection would be further evidence that the rich and powerful get what they want. At least Hillary Clinton did the hard work of running for office and winning fair and square.

All in all, it’s not a pretty picture. The Democrats would do well to learn from the Republicans’ mistakes: throw the miscreants out, pick party leaders on merit and be quick and complete in disclosing bad facts. Democrats delude themselves if they conclude their gains are permanent or that voters will be more forgiving of their misdeeds than of the Republicans’.

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Does Being Jewish Make You a Flight Risk?

In a disturbing and apparently unprecedented move, the federal government has claimed that simply being Jewish adds to the flight risk of a defendant facing criminal charges. The prosecutors made the claim—that every American Jew has “de facto dual citizenship”—in their case against Rabbi Sholom Rubashkin, the former head of Agriprocessors, Inc., who has been charged with bank fraud concerning the Iowa kosher slaughterhouse. The Jewish Week reported the news last week, but, deplorably, it has received little attention so far.  According to the newspaper:

a federal prosecutor has argued that Israel’s Law of Return makes American Jews a flight risk and therefore ineligible for bail. . . .

And the federal judge in the case, Magistrate Jon Stuart Scoles, cited the Law of Return in his Nov. 20 decision denying Rubashkin bail.

“Under Israel’s Law of Return, any Jew and members of his family who have expressed their desire to settle in Israel will be granted citizenship,” the judge wrote, adding that the government had claimed that at least one other Agriprocessors’ defendant had already fled to Israel.

I’ve since read the judge’s decision, and it turns out that that the other defendant who allegedly fled to Israel is a Muslim who already held Israeli citizenship. Analogous? I think not.

In their recently filed appeal, Rubashkin’s lawyers made the point that, even in the unlikely event that the defendant were to flee to Israel, Israel has a long-standing extradition treaty with the U.S. that would require Rubashkin to be extradited back to the U.S. Yet the judge did not even mention that treaty in his detention decision. The defense lawyers also noted that “to accelerate the extradition procedure, some courts have required as a condition of bail that defendants with strong ties to Israel (including citizenship) execute irrevocable waivers of extradition. . . . Sholom Rubashkin would execute such a waiver in this case.”

They further argued that by invoking the Law of Return, the government violated Rubashkin’s right to equal protection since Jews, as members of either a race or religion, are a “protected class” under the relevant constitutional and statutory law. And to treat Jews differently than non-Jews in determining the risk of flight clearly fails to pass the test of strict scrutiny.

Rubashkin’s appeal also highlighted the reductio ad absurdum in the government’s claim:

In the prosecutors’ view, anyone subject to the Law of Return is an increased flight risk. Consequently, under that view, “every Jew” is to be viewed for bail purposes as a greater risk of flight than a non-Jew. That means that 5,300,000 Americans would be viewed as heightened bail risks simply because they are Jews. . . . It would also extend to the ultimate superior of the prosecutors pressing the Law-of Return argument, i.e., the current Attorney General of the United States Michael B. Mukasey; the ultimate superior of the Homeland Security agents who have investigated this case, i.e., Secretary Michael Chertoff; and two sitting Justices of the Supreme Court, Justices Steven Breyer and Ruth Bader Ginsburg. It is ironic that a law designed to provide refuge to persecuted Jews has now become the basis for detaining a Jew who might otherwise have been released pending trial.

Thankfully, it’s hard to imagine that the court’s reliance on the Law of Return will stand up on appeal.

In a disturbing and apparently unprecedented move, the federal government has claimed that simply being Jewish adds to the flight risk of a defendant facing criminal charges. The prosecutors made the claim—that every American Jew has “de facto dual citizenship”—in their case against Rabbi Sholom Rubashkin, the former head of Agriprocessors, Inc., who has been charged with bank fraud concerning the Iowa kosher slaughterhouse. The Jewish Week reported the news last week, but, deplorably, it has received little attention so far.  According to the newspaper:

a federal prosecutor has argued that Israel’s Law of Return makes American Jews a flight risk and therefore ineligible for bail. . . .

And the federal judge in the case, Magistrate Jon Stuart Scoles, cited the Law of Return in his Nov. 20 decision denying Rubashkin bail.

“Under Israel’s Law of Return, any Jew and members of his family who have expressed their desire to settle in Israel will be granted citizenship,” the judge wrote, adding that the government had claimed that at least one other Agriprocessors’ defendant had already fled to Israel.

I’ve since read the judge’s decision, and it turns out that that the other defendant who allegedly fled to Israel is a Muslim who already held Israeli citizenship. Analogous? I think not.

In their recently filed appeal, Rubashkin’s lawyers made the point that, even in the unlikely event that the defendant were to flee to Israel, Israel has a long-standing extradition treaty with the U.S. that would require Rubashkin to be extradited back to the U.S. Yet the judge did not even mention that treaty in his detention decision. The defense lawyers also noted that “to accelerate the extradition procedure, some courts have required as a condition of bail that defendants with strong ties to Israel (including citizenship) execute irrevocable waivers of extradition. . . . Sholom Rubashkin would execute such a waiver in this case.”

They further argued that by invoking the Law of Return, the government violated Rubashkin’s right to equal protection since Jews, as members of either a race or religion, are a “protected class” under the relevant constitutional and statutory law. And to treat Jews differently than non-Jews in determining the risk of flight clearly fails to pass the test of strict scrutiny.

Rubashkin’s appeal also highlighted the reductio ad absurdum in the government’s claim:

In the prosecutors’ view, anyone subject to the Law of Return is an increased flight risk. Consequently, under that view, “every Jew” is to be viewed for bail purposes as a greater risk of flight than a non-Jew. That means that 5,300,000 Americans would be viewed as heightened bail risks simply because they are Jews. . . . It would also extend to the ultimate superior of the prosecutors pressing the Law-of Return argument, i.e., the current Attorney General of the United States Michael B. Mukasey; the ultimate superior of the Homeland Security agents who have investigated this case, i.e., Secretary Michael Chertoff; and two sitting Justices of the Supreme Court, Justices Steven Breyer and Ruth Bader Ginsburg. It is ironic that a law designed to provide refuge to persecuted Jews has now become the basis for detaining a Jew who might otherwise have been released pending trial.

Thankfully, it’s hard to imagine that the court’s reliance on the Law of Return will stand up on appeal.

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It Gets Better

This New York Times Story broke 15 minutes ago: “Blagojevich Wants to Defend With Election Funds

Come on. They left him no choice:

The decision to try to use campaign funds arose on Thursday after the state attorney general rejected a request by the governor to use state funds to pay for his impeachment defense.

This New York Times Story broke 15 minutes ago: “Blagojevich Wants to Defend With Election Funds

Come on. They left him no choice:

The decision to try to use campaign funds arose on Thursday after the state attorney general rejected a request by the governor to use state funds to pay for his impeachment defense.

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The State of the World

Yesterday, Ban Ki-moon made it clear he will be happy to see the end of 2008.  “This year we have been confronted with so many crises,” the U.N. Secretary-General said at his year-end press conference.  “This has been a really difficult year.”

Will 2009 be any better?  The embattled South Korean held out little hope as he listed current challenges: Somali anarchy, Zimbabwe’s crisis, Afghanistan’s crisis, the crisis in the Middle East, and the global financial crisis, in addition to general problems like poverty and climate change.  Worst of all, nations are not cooperating with the United Nations, he noted.

And we should be surprised?  For the first time in more than a century, the world’s financial architecture and its geopolitical structure are falling apart at the same time.  And as this happens, the authoritarian regimes are banding together.  Each of them, in its own way, is working to change the existing system and replace it with something more to its liking.

We can expect the hardline states to undermine global order, but what makes this period especially dangerous is that the United States and its partners are not willing to confront them.  Prime Minister Putin can invade a neighbor, destabilize others, and proliferate nuclear technology throughout the Middle East with nothing more than an expression of mild concern from the White House.   President Hu Jintao can implement beggar-thy-neighbor economic policies and receive nothing but praise from Treasury Secretary Paulson.

Ban Ki-moon had 350 meetings with presidents, prime ministers, and other government leaders last year and traveled 250,000 miles-ten times around the world-without real accomplishment.  Yet he gets a free pass for ineffectualness because he is supposed to represent all member states, which means his job is to be inane and inoffensive, and because he has no authority.  Yet Western leaders can at least speak out to defend their nations and their values.  With the occasional exception of German Chancellor Angela Merkel, however, they choose to stay quiet.  Have you heard President Bush talk about the “freedom agenda” lately?

In 2008, Western leaders “engaged” the autocrats and saw the world crumble.  In 2009, they have the responsibility to switch course, raise their voices, and accomplish not only what is feasible but also what is necessary.  And if they fail to do all that must be done, we will see more than just uncertainty and turbulence.

Yesterday, Ban Ki-moon made it clear he will be happy to see the end of 2008.  “This year we have been confronted with so many crises,” the U.N. Secretary-General said at his year-end press conference.  “This has been a really difficult year.”

Will 2009 be any better?  The embattled South Korean held out little hope as he listed current challenges: Somali anarchy, Zimbabwe’s crisis, Afghanistan’s crisis, the crisis in the Middle East, and the global financial crisis, in addition to general problems like poverty and climate change.  Worst of all, nations are not cooperating with the United Nations, he noted.

And we should be surprised?  For the first time in more than a century, the world’s financial architecture and its geopolitical structure are falling apart at the same time.  And as this happens, the authoritarian regimes are banding together.  Each of them, in its own way, is working to change the existing system and replace it with something more to its liking.

We can expect the hardline states to undermine global order, but what makes this period especially dangerous is that the United States and its partners are not willing to confront them.  Prime Minister Putin can invade a neighbor, destabilize others, and proliferate nuclear technology throughout the Middle East with nothing more than an expression of mild concern from the White House.   President Hu Jintao can implement beggar-thy-neighbor economic policies and receive nothing but praise from Treasury Secretary Paulson.

Ban Ki-moon had 350 meetings with presidents, prime ministers, and other government leaders last year and traveled 250,000 miles-ten times around the world-without real accomplishment.  Yet he gets a free pass for ineffectualness because he is supposed to represent all member states, which means his job is to be inane and inoffensive, and because he has no authority.  Yet Western leaders can at least speak out to defend their nations and their values.  With the occasional exception of German Chancellor Angela Merkel, however, they choose to stay quiet.  Have you heard President Bush talk about the “freedom agenda” lately?

In 2008, Western leaders “engaged” the autocrats and saw the world crumble.  In 2009, they have the responsibility to switch course, raise their voices, and accomplish not only what is feasible but also what is necessary.  And if they fail to do all that must be done, we will see more than just uncertainty and turbulence.

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Pre-Packaged Penalty

This report suggests that President Bush is contemplating some sort of pre-packaged bankruptcy for the auto companies. The President can’t be accused of ideological rigidity on this one. Indeed it is hard to make any sense of his conflicting statements. On one hand, he doesn’t want to send “good money after bad.” But, then again, he doesn’t want to see the companies fail – his press secretary says that “doing nothing” isn’t an option. And he doesn’t want to make this President Obama’s problem. (Why, I’m not sure since he’s the one to live with the consequences.) Yes, it is all a bit muddled.

But if out of this comes a significant restructuring of the recipient companies, it will be a good thing. Or at least a less awful thing than just handing the companies a pot of money with the hope that they’ll “work things out.”  And if the message goes out that bankruptcy, in whatever form, is the price of poor management that would be a good thing as well. A price must be paid before the taxpayers are forced to cough up any more.

This report suggests that President Bush is contemplating some sort of pre-packaged bankruptcy for the auto companies. The President can’t be accused of ideological rigidity on this one. Indeed it is hard to make any sense of his conflicting statements. On one hand, he doesn’t want to send “good money after bad.” But, then again, he doesn’t want to see the companies fail – his press secretary says that “doing nothing” isn’t an option. And he doesn’t want to make this President Obama’s problem. (Why, I’m not sure since he’s the one to live with the consequences.) Yes, it is all a bit muddled.

But if out of this comes a significant restructuring of the recipient companies, it will be a good thing. Or at least a less awful thing than just handing the companies a pot of money with the hope that they’ll “work things out.”  And if the message goes out that bankruptcy, in whatever form, is the price of poor management that would be a good thing as well. A price must be paid before the taxpayers are forced to cough up any more.

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He Gets Credit For Candor

Pro-business groups and conservatives aren’t the only ones, we learn from this report, who see a problem for “card check” legislation in Blago-gate:

Gerald W. McEntee, president of one of the nation’s largest unions, said the labor movement was damaged when the FBI linked a competing union to Gov. Rod R. Blagojevich’s effort to sell Illinois’ U.S. Senate seat and it hurts labor’s push to pass the Employee Free Choice Act, unions’ big legislative priority.

“I don’t think it’s helped, let me say that on the record. I don’t think it’s helped,” Mr. McEntee, president of the American Federation of State, County and Municipal Employees, told editors and reporters at The Washington Times, referring to allegations that the Service Employees International Union was linked to Mr. Blagojevich’s moves in Illinois. “It sure … is a shame it happened.”

But you have to love the candor:

Mr. McEntee said labor must guard against overreaching and should avoid warring with other Democratic-leaning groups – “to turn the other cheek on this and be more interested in the bigger picture,” he said – but he also said unions paid their dues by supporting Democrats and Presidenelct Barack Obama in this year’s election.

He said they expect that effort to be rewarded with action.

“The payback would be Employee Free Choice Act – that would be a vehicle to strengthen and build the American labor movement and the middle class,” he said. “It’s the condition of the country, it’s health care, it’s the Employee Free Choice Act, it’s some kind of effort made in protection of their pensions. These are big and major items.”

Well, there you have it: Millions and millions for the Democrats in exchange for special-interest legislation stripping employees of their right to secret ballots in union elections –a measure which is extremely unpopular with those it affects and voters at large. The New Politics looks surprisingly similar to the old politics. The only elements missing in this particular instance are the standard pretenses for why this piece of legislation is needed (impossible to come up with any: where are the masses of workers currently barred from organizing under existing labor law?) and minimal recognition that the economic timing is not ideal for pushing union-empowering initiatives. After all, excessive union obligations were already suffocating the domestic auto industry long before there was a recession. If Al Sharpton can figure this out, certainly the rest of the public should.

Pro-business groups and conservatives aren’t the only ones, we learn from this report, who see a problem for “card check” legislation in Blago-gate:

Gerald W. McEntee, president of one of the nation’s largest unions, said the labor movement was damaged when the FBI linked a competing union to Gov. Rod R. Blagojevich’s effort to sell Illinois’ U.S. Senate seat and it hurts labor’s push to pass the Employee Free Choice Act, unions’ big legislative priority.

“I don’t think it’s helped, let me say that on the record. I don’t think it’s helped,” Mr. McEntee, president of the American Federation of State, County and Municipal Employees, told editors and reporters at The Washington Times, referring to allegations that the Service Employees International Union was linked to Mr. Blagojevich’s moves in Illinois. “It sure … is a shame it happened.”

But you have to love the candor:

Mr. McEntee said labor must guard against overreaching and should avoid warring with other Democratic-leaning groups – “to turn the other cheek on this and be more interested in the bigger picture,” he said – but he also said unions paid their dues by supporting Democrats and Presidenelct Barack Obama in this year’s election.

He said they expect that effort to be rewarded with action.

“The payback would be Employee Free Choice Act – that would be a vehicle to strengthen and build the American labor movement and the middle class,” he said. “It’s the condition of the country, it’s health care, it’s the Employee Free Choice Act, it’s some kind of effort made in protection of their pensions. These are big and major items.”

Well, there you have it: Millions and millions for the Democrats in exchange for special-interest legislation stripping employees of their right to secret ballots in union elections –a measure which is extremely unpopular with those it affects and voters at large. The New Politics looks surprisingly similar to the old politics. The only elements missing in this particular instance are the standard pretenses for why this piece of legislation is needed (impossible to come up with any: where are the masses of workers currently barred from organizing under existing labor law?) and minimal recognition that the economic timing is not ideal for pushing union-empowering initiatives. After all, excessive union obligations were already suffocating the domestic auto industry long before there was a recession. If Al Sharpton can figure this out, certainly the rest of the public should.

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Re: No Time for Attrition

Writing yesterday on sanctions against Iran, Abe Greenwald wisely noted that

If time is so limited, why aren’t the mullahs sanctioned and embargoed to the hilt in one sweep? We cross our fingers and speculate about falling oil prices destabilizing the Islamic Republic enough to get them to deal. Yet we have the means to fast-forward collapse and we never use it. Steadily increasing sanctions only helps Iran inure itself to deprivation as it enriches material and builds proscribed weapons. One absolute shock to the country’s economy would constitute a crisis. Any infinitesimal hope of a diplomatic breakthrough would only stand a chance of fruition in the wake of such a national trauma. What’s happening now is just failure in slow motion.

Abe is right –an all-out approach would bring Tehran to its knees very quickly. But even gradualism has its merits –including the fact that it cohabits better with political constraints– if it is pursued diligently. The problem is that some of our allies are furiously pedaling against the stream, ensuring that even the limited sanctions so far in place fail to bite.Consider this: Italy’s ministry of foreign affairs, in conjunction with the Italian Institute for Foreign Trade (ICE), has recently released a report on trade with Iran. According to Italy’s President, Italy has reduced its exports to Iran in compliance with sanctions. So he said during a recent visit to Jerusalem in late November, when he announced that Italian exports had dropped by 22 percent in one year. Not so, says ICE:

It is worth highlighting that in the first five months of 2008 one registers a significant increase of Italian exports to Iran in comparison to the same period in 2007 (+35.8%), which confirms an already clear trend from the last months of 2007. In the same period there was a reduction of imports from Iran of about 17 percent.

But despair not the Italians are not alone in trying to reverse the trend:

Eurostat data about EU exports to Iran in the first five months of 2008 show an 18% increase over the same period in 2007. The most important increases are reported by Italy, followed by Germany and France.

An all-out approach would work much better, no doubt. But if only our allies took their commitments seriously instead of talking the talk but not walking the walk, perhaps even gradualism could make a dent.

Writing yesterday on sanctions against Iran, Abe Greenwald wisely noted that

If time is so limited, why aren’t the mullahs sanctioned and embargoed to the hilt in one sweep? We cross our fingers and speculate about falling oil prices destabilizing the Islamic Republic enough to get them to deal. Yet we have the means to fast-forward collapse and we never use it. Steadily increasing sanctions only helps Iran inure itself to deprivation as it enriches material and builds proscribed weapons. One absolute shock to the country’s economy would constitute a crisis. Any infinitesimal hope of a diplomatic breakthrough would only stand a chance of fruition in the wake of such a national trauma. What’s happening now is just failure in slow motion.

Abe is right –an all-out approach would bring Tehran to its knees very quickly. But even gradualism has its merits –including the fact that it cohabits better with political constraints– if it is pursued diligently. The problem is that some of our allies are furiously pedaling against the stream, ensuring that even the limited sanctions so far in place fail to bite.Consider this: Italy’s ministry of foreign affairs, in conjunction with the Italian Institute for Foreign Trade (ICE), has recently released a report on trade with Iran. According to Italy’s President, Italy has reduced its exports to Iran in compliance with sanctions. So he said during a recent visit to Jerusalem in late November, when he announced that Italian exports had dropped by 22 percent in one year. Not so, says ICE:

It is worth highlighting that in the first five months of 2008 one registers a significant increase of Italian exports to Iran in comparison to the same period in 2007 (+35.8%), which confirms an already clear trend from the last months of 2007. In the same period there was a reduction of imports from Iran of about 17 percent.

But despair not the Italians are not alone in trying to reverse the trend:

Eurostat data about EU exports to Iran in the first five months of 2008 show an 18% increase over the same period in 2007. The most important increases are reported by Italy, followed by Germany and France.

An all-out approach would work much better, no doubt. But if only our allies took their commitments seriously instead of talking the talk but not walking the walk, perhaps even gradualism could make a dent.

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Owe Schmo

I found, via Mark Steyn, the “Take Back Barack” blog of the Boston Phoenix. It’s all about Progressive disappointment and frustration with the fact that Barack Obama turned out to be sane. I particularly liked this little gem:

And Obama owes the progressive movement – and the generally progressive American population – much more than he owes the Establishment.

Oh, come on. Why so hung up on who’s owed what? Obama is all about redistributing, remember? He’s not interested in punishing you for backing the successful candidate. He wants to make sure that the “Establishment” guy coming up behind you has the same chance at success you had.

I found, via Mark Steyn, the “Take Back Barack” blog of the Boston Phoenix. It’s all about Progressive disappointment and frustration with the fact that Barack Obama turned out to be sane. I particularly liked this little gem:

And Obama owes the progressive movement – and the generally progressive American population – much more than he owes the Establishment.

Oh, come on. Why so hung up on who’s owed what? Obama is all about redistributing, remember? He’s not interested in punishing you for backing the successful candidate. He wants to make sure that the “Establishment” guy coming up behind you has the same chance at success you had.

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A Time To Count, A Time To Fold

The Minnesota Senate race is still not over, as Sen. Norm Coleman picked up votes from re-examined ballot challenges. Meanwhile, Coleman has gone to the Minnesota Supreme Court to dispute the Democratic Attorney General’s decision to consider a group of rejected absentee ballots that don’t fit one of the statutory reasons for excluding the votes.

No matter who wins this ”round” the other side will claim foul and head for the courts. Even after the highest court has the final say, the loser still won’t be satisfied. I don’t know who is going to prevail as I write this. The situation is another Florida 2000 — the margin of error (and certainly the margin to claim error) is larger than the margin of victory. Is there any satisfactory end in sight? I suspect not. On one level one might hope for a run-off and re-vote in the hope that the new margin is greater. But without the Independent candidate in the race and with Barack Obama not on the ballot, such a solution will certainly not be acceptable to Al Franken.

On we trudge, ballot by ballot and court after court. It may be that Illinois has its replacement senator before Minnesota’s race is decided. It might be a good idea for partisans on both sides to recall that Al Gore’s finest political moment was his concession speech. It was long in coming, but necessary for everyone to move on. Let’s hope whoever comes up on the short end this time can muster the political maturity to discourage bitter allusions to “stolen” elections and “illegitimate” winners.

The Minnesota Senate race is still not over, as Sen. Norm Coleman picked up votes from re-examined ballot challenges. Meanwhile, Coleman has gone to the Minnesota Supreme Court to dispute the Democratic Attorney General’s decision to consider a group of rejected absentee ballots that don’t fit one of the statutory reasons for excluding the votes.

No matter who wins this ”round” the other side will claim foul and head for the courts. Even after the highest court has the final say, the loser still won’t be satisfied. I don’t know who is going to prevail as I write this. The situation is another Florida 2000 — the margin of error (and certainly the margin to claim error) is larger than the margin of victory. Is there any satisfactory end in sight? I suspect not. On one level one might hope for a run-off and re-vote in the hope that the new margin is greater. But without the Independent candidate in the race and with Barack Obama not on the ballot, such a solution will certainly not be acceptable to Al Franken.

On we trudge, ballot by ballot and court after court. It may be that Illinois has its replacement senator before Minnesota’s race is decided. It might be a good idea for partisans on both sides to recall that Al Gore’s finest political moment was his concession speech. It was long in coming, but necessary for everyone to move on. Let’s hope whoever comes up on the short end this time can muster the political maturity to discourage bitter allusions to “stolen” elections and “illegitimate” winners.

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Democrats and the Culture of Corruption

As the Rod Blagojevich scandal continues to unfold, it’s worth recalling that Democrats in 2006 -led by Representative Rahm Emanuel- ran on the theme that they would end “the culture of corruption.” Indeed, Emanuel, in dismissing wrongdoings by Democrats at the time, explained them away as simply the actions of a few individuals. About Republicans, Emanuel said, “They have institutional corruption.” The argument put forth was that Democrats would bring ethics and high standards to public office and that the Democratic Party would embody integrity and police its ranks.

It hasn’t quite worked out that way.

As the sportscaster Warner Wolf used to say, let’s go to the videotape. In 2008 alone, we have the arrest of Democratic Governor Blagojevich on charges of public corruption, which include trying to sell Barack Obama’s vacant Senate seat. Former Democratic Representative William Jefferson, a nine-term incumbent, lost his seat in Louisiana because of corruption charges, including allegations that he took bribes -of which $90,000 were allegedly found in his freezer during an FBI raid- from a company seeking lucrative contracts in the Nigerian telecommunications market. Tim Mahoney, the Democrat who succeeded Republican Mark Foley after the latter resigned due to a sex scandal, lost his seat when he, Mahoney, became embroiled in a sex scandal of his own. Former Democratic Governor Eliot Spitzer resigned in disgrace after he was caught up in a call girl operation. Democratic Representative Charlie Rangel is now under investigation for reportedly helping to retain a multimillion-dollar tax loophole for an oil drilling company at the same time that the company’s CEO was pledging $1 million to the Charles B. Rangel School for Public Service at City College of New York. Also, former Detroit Mayor Kwame Kilpatrick resigned as part of a plea bargain in which he pled guilty to two felonies for obstruction of justice.

Democrats seem to be doing a rather fine job at building on a culture of corruption rather than ending it.

Corruption and scandals plague individuals in both parties, of course, and Republicans have had their fair share of them (including the conviction of Senator Ted Stevens earlier this year). There are scoundrels and honorable people in both political parties. But three things are worth bearing in mind at the moment:

The first is that Democrats, in their effort to gain political power, made ethics a defining issue. They are the ones who set the expectations and the ethics bar very high. Having so far failed miserably to meet their own standards, they are vulnerable to the charge of hypocrisy.

Second, when enough scandals occur in a concentrated time period, they reach a tipping point. The public begins to associate corruption not simply with individuals but with the party they represent; and that, in turn, can do tremendous damage to the “brand” of a political party. Such a thing happened to Republicans in recent years, and they paid an enormous political price for it. Now that same thing may be happening to Democrats.

Third, President-elect Obama made the centerpiece of his campaign the promise that he would “turn the page” on the old politics and clean out our political Augean stables. As head of the Democratic Party, he is now responsible for its conduct, including its ethical behavior. It looks as if he has his work cut out for him.

The Democratic Party has, in a matter of mere months, succeeded in creating a record of corruption that extends from mayors to governors to member of Congress. And the Blagojevich scandal is not only far from over, it may well extend beyond what we now know. It’s fair to assume that a lot of people are beginning to talk to U.S. Attorney Patrick Fitzgerald in the hopes of gaining leniency, so we will see how far the tentacles of this scandal extend.

The “culture of corruption” appears to be alive and well, aided and abetted by Democrats at almost every level. I rather doubt the national media will be as eager to highlight this issue as they were with Republicans. But the public might connect the dots anyway.

As the Rod Blagojevich scandal continues to unfold, it’s worth recalling that Democrats in 2006 -led by Representative Rahm Emanuel- ran on the theme that they would end “the culture of corruption.” Indeed, Emanuel, in dismissing wrongdoings by Democrats at the time, explained them away as simply the actions of a few individuals. About Republicans, Emanuel said, “They have institutional corruption.” The argument put forth was that Democrats would bring ethics and high standards to public office and that the Democratic Party would embody integrity and police its ranks.

It hasn’t quite worked out that way.

As the sportscaster Warner Wolf used to say, let’s go to the videotape. In 2008 alone, we have the arrest of Democratic Governor Blagojevich on charges of public corruption, which include trying to sell Barack Obama’s vacant Senate seat. Former Democratic Representative William Jefferson, a nine-term incumbent, lost his seat in Louisiana because of corruption charges, including allegations that he took bribes -of which $90,000 were allegedly found in his freezer during an FBI raid- from a company seeking lucrative contracts in the Nigerian telecommunications market. Tim Mahoney, the Democrat who succeeded Republican Mark Foley after the latter resigned due to a sex scandal, lost his seat when he, Mahoney, became embroiled in a sex scandal of his own. Former Democratic Governor Eliot Spitzer resigned in disgrace after he was caught up in a call girl operation. Democratic Representative Charlie Rangel is now under investigation for reportedly helping to retain a multimillion-dollar tax loophole for an oil drilling company at the same time that the company’s CEO was pledging $1 million to the Charles B. Rangel School for Public Service at City College of New York. Also, former Detroit Mayor Kwame Kilpatrick resigned as part of a plea bargain in which he pled guilty to two felonies for obstruction of justice.

Democrats seem to be doing a rather fine job at building on a culture of corruption rather than ending it.

Corruption and scandals plague individuals in both parties, of course, and Republicans have had their fair share of them (including the conviction of Senator Ted Stevens earlier this year). There are scoundrels and honorable people in both political parties. But three things are worth bearing in mind at the moment:

The first is that Democrats, in their effort to gain political power, made ethics a defining issue. They are the ones who set the expectations and the ethics bar very high. Having so far failed miserably to meet their own standards, they are vulnerable to the charge of hypocrisy.

Second, when enough scandals occur in a concentrated time period, they reach a tipping point. The public begins to associate corruption not simply with individuals but with the party they represent; and that, in turn, can do tremendous damage to the “brand” of a political party. Such a thing happened to Republicans in recent years, and they paid an enormous political price for it. Now that same thing may be happening to Democrats.

Third, President-elect Obama made the centerpiece of his campaign the promise that he would “turn the page” on the old politics and clean out our political Augean stables. As head of the Democratic Party, he is now responsible for its conduct, including its ethical behavior. It looks as if he has his work cut out for him.

The Democratic Party has, in a matter of mere months, succeeded in creating a record of corruption that extends from mayors to governors to member of Congress. And the Blagojevich scandal is not only far from over, it may well extend beyond what we now know. It’s fair to assume that a lot of people are beginning to talk to U.S. Attorney Patrick Fitzgerald in the hopes of gaining leniency, so we will see how far the tentacles of this scandal extend.

The “culture of corruption” appears to be alive and well, aided and abetted by Democrats at almost every level. I rather doubt the national media will be as eager to highlight this issue as they were with Republicans. But the public might connect the dots anyway.

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The Meaning of “Passing Familiarity”

Eric Holder will be grilled at his confirmation hearing about his conduct in the Marc Rich affair. But the stickiest problem may be whether he lied in previous testimony to Congress on the matter. This report sets out the issue:

Attorney General-designate Eric H. Holder Jr. told Congress under oath that he had “only a passing familiarity” with the criminal case against billionaire Marc Rich before President Clinton pardoned the fugitive financier in 2001- testimony that is now raising concerns among lawmakers reviewing Mr. Holder’s nomination.

Correspondence with the Justice Department and testimony secured by Congress from other witnesses show that 15 months before the pardon, Mr. Holder met privately with Mr. Rich’s attorney and received a presentation about what Mr. Rich’s defense believed were flaws in the government’s case.

But Holder had plenty of involvement with the Rich pardon request and, therefore, possessed more than “passing familiarity” with the matter. Indeed, he got a briefing on it — directly from Rich’s counsel:

Mr. Holder told the House committee in sworn testimony in February 2001 that he was not “intimately involved or overly interested” in the government’s $48 million fraud case against Mr. Rich, that the investigation “did not stand out as one that was particularly meritorious,” that he “never devoted a great deal of time to this matter” and that it “does not now stick in my memory.”

He also testified, according to a committee transcript, that he had “only a passing familiarity with the underlying facts” of the case and that after New York prosecutors refused his invitation to meet with Mr. Rich’s attorney, former Clinton White House Counsel Jack Quinn, he had “no reason to delve further into this matter.”

Mr. Holder also said he had “no memory” of Mr. Quinn telling him that he would file a pardon request on behalf of Mr. Rich directly with the White House, bypassing the normal Justice Department pardon process.

But public records, including a 467-page House Government Reform Committee report, show that Mr. Holder’s interest in the Rich case surfaced during the October 1999 contacts with Mr. Quinn. At the time, Mr. Rich had been a fugitive from justice since a 1983 indictment in what was described as the biggest tax fraud case in U.S. history.
. . .

The report cited as evidence, among other things, a typewritten note sent by Mr. Quinn to Mr. Holder 10 days before the Jan. 20, 2001, pardon. It said, “Your saying positive things, I’m told, would make this happen. Thanks for your consideration.”

A Nov. 18, 2000, e-mail from Mr. Quinn to his Washington law firm also acknowledged Mr. Holder’s involvement in the pardon process. The e-mail said: “Subject: Eric … spoke to him last evening. he says go straight to wh. also says timing is good. we shd get in soon. will elab when we speak.”

“Assuming the ‘eric’ referenced is Eric Holder, this e-mail contradicts the heart of Holder’s defense,” the House report said, noting that Mr. Holder testified he was “not focused on the Rich pardon until late in the process, at first on January 6 [2001] … and then, not really until January 19 [2001].

“This e-mail indicates that Holder suggested that Quinn file the petition with the White House and circumvent the Justice Department,” the report said. “It indicates that Holder was a willing participant in the plan to keep the Justice Department from knowing about and opposing the Marc Rich pardon.”

In testimony in February 2001 before the Senate Judiciary Committee, Mr. Quinn said he went to Mr. Holder about the Rich case in late October 1999 to “provide him with an overview of the flaws in the outstanding indictment against Mr. Rich.” He said he then wrote to U.S. Attorney Mary Jo White in New York about the Rich case at Mr. Holder’s suggestion, asking that her office re-examine the charges against his client.

“I was denied even a meeting. This left us at an intractable impasse. And so eventually I sought a pardon,” he said. “I personally notified Mr. Holder in his office on Nov. 21, 2000, that I would be sending a pardon application directly to the White House. I told him then that I hoped to encourage the White House to seek his views.

“He said that I should do so, and I did later encourage the White House to seek his views,” Mr. Quinn said. “I hoped the consultation with Mr. Holder by the White House would help me make my case for Mr. Rich, because I believed Mr. Holder was familiar with the charges and with our arguments as to the flaws in the indictment.”

Mr. Quinn also told the committee that he called Mr. Holder on the evening of Jan. 19, 2001, to tell him Mr. Rich’s pardon was receiving serious consideration at the White House, and “that I understood he would, in fact, be contacted before a decision was made.” He said Mr. Holder was consulted and “the position he expressed was important to the ultimate decision to grant the pardon.”

The House report said that as Mr. Rich’s attorneys prepared to file their pardon petition, Mr. Holder “provided pivotal assistance to their effort.”

“After first succeeding in keeping the career prosecutors at the Justice Department from having any input in the Rich pardon, Holder informed the White House on the last day of the Clinton administration that he was ‘neutral, leaning towards favorable’ on the Rich and Green pardons,” the report said. “Together, these actions had a dramatic impact on ensuring that the pardons were ultimately granted.”

So central to the confirmation inquiry will be the very real question as to whether Holder accurately portrayed his behavior to Congress. The President-elect and his advisors have called the Rich pardon the “one mistake” in Holder’s career. But there were, if this information proves to be accurate, two errors: the underlying conduct – and his misleading testimony.

Lack of candor with Senators is the sort of thing that got Alberto Gonzales in hot water — and brought bipartisan calls for him to step down. Unless Holder and the Democrats can square the seemingly direct contradiction between Holder’s claim of “only a passing familiarity” with Rich and a record replete with talks between Holder and Quinn on the merits and progress of the pardon, there may be grounds on which to oppose his confirmation. Really, how can the Senate confirm a nominee for attorney general who lied to Congress?

Eric Holder will be grilled at his confirmation hearing about his conduct in the Marc Rich affair. But the stickiest problem may be whether he lied in previous testimony to Congress on the matter. This report sets out the issue:

Attorney General-designate Eric H. Holder Jr. told Congress under oath that he had “only a passing familiarity” with the criminal case against billionaire Marc Rich before President Clinton pardoned the fugitive financier in 2001- testimony that is now raising concerns among lawmakers reviewing Mr. Holder’s nomination.

Correspondence with the Justice Department and testimony secured by Congress from other witnesses show that 15 months before the pardon, Mr. Holder met privately with Mr. Rich’s attorney and received a presentation about what Mr. Rich’s defense believed were flaws in the government’s case.

But Holder had plenty of involvement with the Rich pardon request and, therefore, possessed more than “passing familiarity” with the matter. Indeed, he got a briefing on it — directly from Rich’s counsel:

Mr. Holder told the House committee in sworn testimony in February 2001 that he was not “intimately involved or overly interested” in the government’s $48 million fraud case against Mr. Rich, that the investigation “did not stand out as one that was particularly meritorious,” that he “never devoted a great deal of time to this matter” and that it “does not now stick in my memory.”

He also testified, according to a committee transcript, that he had “only a passing familiarity with the underlying facts” of the case and that after New York prosecutors refused his invitation to meet with Mr. Rich’s attorney, former Clinton White House Counsel Jack Quinn, he had “no reason to delve further into this matter.”

Mr. Holder also said he had “no memory” of Mr. Quinn telling him that he would file a pardon request on behalf of Mr. Rich directly with the White House, bypassing the normal Justice Department pardon process.

But public records, including a 467-page House Government Reform Committee report, show that Mr. Holder’s interest in the Rich case surfaced during the October 1999 contacts with Mr. Quinn. At the time, Mr. Rich had been a fugitive from justice since a 1983 indictment in what was described as the biggest tax fraud case in U.S. history.
. . .

The report cited as evidence, among other things, a typewritten note sent by Mr. Quinn to Mr. Holder 10 days before the Jan. 20, 2001, pardon. It said, “Your saying positive things, I’m told, would make this happen. Thanks for your consideration.”

A Nov. 18, 2000, e-mail from Mr. Quinn to his Washington law firm also acknowledged Mr. Holder’s involvement in the pardon process. The e-mail said: “Subject: Eric … spoke to him last evening. he says go straight to wh. also says timing is good. we shd get in soon. will elab when we speak.”

“Assuming the ‘eric’ referenced is Eric Holder, this e-mail contradicts the heart of Holder’s defense,” the House report said, noting that Mr. Holder testified he was “not focused on the Rich pardon until late in the process, at first on January 6 [2001] … and then, not really until January 19 [2001].

“This e-mail indicates that Holder suggested that Quinn file the petition with the White House and circumvent the Justice Department,” the report said. “It indicates that Holder was a willing participant in the plan to keep the Justice Department from knowing about and opposing the Marc Rich pardon.”

In testimony in February 2001 before the Senate Judiciary Committee, Mr. Quinn said he went to Mr. Holder about the Rich case in late October 1999 to “provide him with an overview of the flaws in the outstanding indictment against Mr. Rich.” He said he then wrote to U.S. Attorney Mary Jo White in New York about the Rich case at Mr. Holder’s suggestion, asking that her office re-examine the charges against his client.

“I was denied even a meeting. This left us at an intractable impasse. And so eventually I sought a pardon,” he said. “I personally notified Mr. Holder in his office on Nov. 21, 2000, that I would be sending a pardon application directly to the White House. I told him then that I hoped to encourage the White House to seek his views.

“He said that I should do so, and I did later encourage the White House to seek his views,” Mr. Quinn said. “I hoped the consultation with Mr. Holder by the White House would help me make my case for Mr. Rich, because I believed Mr. Holder was familiar with the charges and with our arguments as to the flaws in the indictment.”

Mr. Quinn also told the committee that he called Mr. Holder on the evening of Jan. 19, 2001, to tell him Mr. Rich’s pardon was receiving serious consideration at the White House, and “that I understood he would, in fact, be contacted before a decision was made.” He said Mr. Holder was consulted and “the position he expressed was important to the ultimate decision to grant the pardon.”

The House report said that as Mr. Rich’s attorneys prepared to file their pardon petition, Mr. Holder “provided pivotal assistance to their effort.”

“After first succeeding in keeping the career prosecutors at the Justice Department from having any input in the Rich pardon, Holder informed the White House on the last day of the Clinton administration that he was ‘neutral, leaning towards favorable’ on the Rich and Green pardons,” the report said. “Together, these actions had a dramatic impact on ensuring that the pardons were ultimately granted.”

So central to the confirmation inquiry will be the very real question as to whether Holder accurately portrayed his behavior to Congress. The President-elect and his advisors have called the Rich pardon the “one mistake” in Holder’s career. But there were, if this information proves to be accurate, two errors: the underlying conduct – and his misleading testimony.

Lack of candor with Senators is the sort of thing that got Alberto Gonzales in hot water — and brought bipartisan calls for him to step down. Unless Holder and the Democrats can square the seemingly direct contradiction between Holder’s claim of “only a passing familiarity” with Rich and a record replete with talks between Holder and Quinn on the merits and progress of the pardon, there may be grounds on which to oppose his confirmation. Really, how can the Senate confirm a nominee for attorney general who lied to Congress?

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Why the Guilty Conscience?

Governor Rod Blagojevich is certain to go down in flames, but Barack Obama should make it through this scandal just fine.  Why, then, is the President-elect acting so guilty?

For example, Obama came out immediately and denied that he had any talks with Blagojevich or his folks about filling Illinois’ vacant Senate seat. That is just not credible. Obama was one of two senators representing Illinois. Blagojevich is the governor of Illinois, and he has the power to name Obama’s successor. It would be entirely natural, appropriate, and even almost required for Blagojevich to discuss the matter with Obama. After all, Obama held the seat for almost four years and has an obligation to the people he promised a full six-year term to see they get the best representation. Moreover, as president, he will have to work with the new senator on getting his legislative agenda passed.

But perhaps Obama is too busy to manage the discussions. So he ought to delegate the matter to a trusted close aide. And who would be better than his chief of staff-to be, Rahm Emanuel? Also, Emanuel had succeeded Blagojevich in the House, when Blagojevich left to run for governor. (A campaign with Barack Obama as a senior advisor, it should be noted.)  So it should be no surprise if Emanuel was talking with the Blagojevich people about the Senate appointment.

But no, that never happened. There were no contacts. Period. Obama had thoroughly washed his hands of the Senate seat the instant he won the election.

At least, that was the story. It’s now coming out that there were numerous contacts, and Emanuel was indeed in the thick of it.

Even that is not so bad. Emanuel is pretty much exonerated by the recordings of Blagojevich so far, in which the Governor profanely lays into Obama for not wanting to play ball and put in a bid for the Senate seat.

That just isn’t enough, though. Not for the Obama camp. They must not be touched by the slightest taint of a scandal.  So Emanuel never ever spoke with Blagojevich or his people. No matter what any records might indicate.

And it isn’t just Emanuel whose Blagojevich ties are being buried. Attorney General nominee Eric Holder has his own extremely questionable past. He was instrumental in helping Marc Rich obtain his pardon in the waning days of the Clinton administration,  he was involved in the Elian Gonzalez deportation at gunpoint (even denying that it was at gunpoint), and he co-wrote a brief backing the DC gun ban that was ruled unconstitutional by the Supreme Court in the Heller case. Most importantly, he was hand-picked by Governor Blagojevich himself to deal with some controversies surrounding a casino license.

Yet again, nothing scandalous about it. But it was still concealed from the public.

A lot of people have been saying that President Obama will govern much like Jimmy Carter. While that may ultimately prove correct, right now he’s acting a lot more like Richard Nixon during the Watergate investigation. We’ve already had a few rounds of “this is the operative statement. The others are inoperative,” and signs that the Obama team is trying to pull a “modified limited hangout.”

The most infuriating thing is that Obama likely did nothing wrong himself. In fact, he apparently managed to wade through the open sewers of Chicago Democratic politics and not get dirty. But like Nixon, his instinct to protect himself and issue denials that can’t survive scrutiny merely provokes people to ask “what is he trying to hide?”

In Nixon’s case, his paranoia eventually led to his downfall. Here’s hoping Obama manages to avoid that pitfall and eventually remembers that “honesty is the best policy.”

Governor Rod Blagojevich is certain to go down in flames, but Barack Obama should make it through this scandal just fine.  Why, then, is the President-elect acting so guilty?

For example, Obama came out immediately and denied that he had any talks with Blagojevich or his folks about filling Illinois’ vacant Senate seat. That is just not credible. Obama was one of two senators representing Illinois. Blagojevich is the governor of Illinois, and he has the power to name Obama’s successor. It would be entirely natural, appropriate, and even almost required for Blagojevich to discuss the matter with Obama. After all, Obama held the seat for almost four years and has an obligation to the people he promised a full six-year term to see they get the best representation. Moreover, as president, he will have to work with the new senator on getting his legislative agenda passed.

But perhaps Obama is too busy to manage the discussions. So he ought to delegate the matter to a trusted close aide. And who would be better than his chief of staff-to be, Rahm Emanuel? Also, Emanuel had succeeded Blagojevich in the House, when Blagojevich left to run for governor. (A campaign with Barack Obama as a senior advisor, it should be noted.)  So it should be no surprise if Emanuel was talking with the Blagojevich people about the Senate appointment.

But no, that never happened. There were no contacts. Period. Obama had thoroughly washed his hands of the Senate seat the instant he won the election.

At least, that was the story. It’s now coming out that there were numerous contacts, and Emanuel was indeed in the thick of it.

Even that is not so bad. Emanuel is pretty much exonerated by the recordings of Blagojevich so far, in which the Governor profanely lays into Obama for not wanting to play ball and put in a bid for the Senate seat.

That just isn’t enough, though. Not for the Obama camp. They must not be touched by the slightest taint of a scandal.  So Emanuel never ever spoke with Blagojevich or his people. No matter what any records might indicate.

And it isn’t just Emanuel whose Blagojevich ties are being buried. Attorney General nominee Eric Holder has his own extremely questionable past. He was instrumental in helping Marc Rich obtain his pardon in the waning days of the Clinton administration,  he was involved in the Elian Gonzalez deportation at gunpoint (even denying that it was at gunpoint), and he co-wrote a brief backing the DC gun ban that was ruled unconstitutional by the Supreme Court in the Heller case. Most importantly, he was hand-picked by Governor Blagojevich himself to deal with some controversies surrounding a casino license.

Yet again, nothing scandalous about it. But it was still concealed from the public.

A lot of people have been saying that President Obama will govern much like Jimmy Carter. While that may ultimately prove correct, right now he’s acting a lot more like Richard Nixon during the Watergate investigation. We’ve already had a few rounds of “this is the operative statement. The others are inoperative,” and signs that the Obama team is trying to pull a “modified limited hangout.”

The most infuriating thing is that Obama likely did nothing wrong himself. In fact, he apparently managed to wade through the open sewers of Chicago Democratic politics and not get dirty. But like Nixon, his instinct to protect himself and issue denials that can’t survive scrutiny merely provokes people to ask “what is he trying to hide?”

In Nixon’s case, his paranoia eventually led to his downfall. Here’s hoping Obama manages to avoid that pitfall and eventually remembers that “honesty is the best policy.”

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Not Everything Can Be “Saved”

Roger Cohen writes in defense of dynamic capitalism:

Pan Am, which had been a leading U.S. international airline since the 1930s, collapsed in 1991. Like other great U.S. companies, it died in the marketplace because it blundered. Churn — of people and businesses — has always defined America. Nobody subsidized U.S. Steel or the automaker Packard in the belief that the world without them was unthinkable.

Coming to the United States from Europe, I found this constant reinvention bracing. Look at the top 40 companies by market capitalization in Europe and most have been there for decades. Not in the United States, land of Google and eBay. Churn requires death as well as birth. The artificial preservation of the inert dampens the quest for the new.

America let Pan Am die. Italy keeps Alitalia going although the airline’s been a dead man walking for years. There you have it: two continents, two business cultures. At least until recently, when the sheer extent of the U.S. financial collapse led the Treasury to discover forms of life-support that refuse to utter a taboo word — socialism — but resemble it nonetheless.

Let’s face it, the American International Group has no right to be around, if risk, markets, transparency, accountability and other foundations of American capitalism mean anything.

Which brings us to Grand Theft Auto, not the video game, but the ongoing drama starring General Motors and Chrysler in a desperate quest for billions of dollars of taxpayers’ money that they say is essential to their survival. (Ford has said it does not need federal money now to survive; it’s in somewhat better shape.)

I know, hundreds of thousands of jobs are directly at stake, hundreds of thousands more indirectly. This is not an economy that’s creating new jobs for those lost. Why should autoworkers get worse treatment than bankers?

These are agonizing questions. But it’s equally agonizing to contemplate the United States becoming the land of Alitalia-style life-support rather than Pan Am-style churn. If the Big Three, their heads in the sand, have made the wrong models with the wrong technologies for years, while their competitors adapted to a changing world, at least one must pay the price.

And, of course, the alternative in the case of  the U.S. car companies – a government managed, subsidized and money-losing car industry – is the worst of all worlds. Indeed the image of Hank Paulson, who lacks any expertise in managing an industrial enterprise and already has a poor record in the “picking winners and losers” department, playing “Car Czar” is ludicrous. (One wonders if he knows much about negotiating when he declares up front that the companies are getting the money and won’t be going home empty-handed.)

A Paulson-devised bailout conveys the wrong message to risk takers and managers (“Don’t worry, the government is here for you.”) But that’s not the worst of it. It robs the taxpayers of money that should go to something else –  for example, investment in companies that will profit, employ more workers and create wealth. (Yes, it is the taxpayers’ money we’re still talking about — that mound of debt will have to be repaid by current and future generations.)

Lost in the “UAW vs. Republicans” argument is a more fundamental one: a car bailout is a perfectly horrid use of taxpayers’ money. Rather than asking if we should bailout the car companies, a better question would be: isn’t there something better to be done with tens if not hundreds of billions of dollars? Certainly we can come up with something better than a batch of nationalized Pan Am’s.

Roger Cohen writes in defense of dynamic capitalism:

Pan Am, which had been a leading U.S. international airline since the 1930s, collapsed in 1991. Like other great U.S. companies, it died in the marketplace because it blundered. Churn — of people and businesses — has always defined America. Nobody subsidized U.S. Steel or the automaker Packard in the belief that the world without them was unthinkable.

Coming to the United States from Europe, I found this constant reinvention bracing. Look at the top 40 companies by market capitalization in Europe and most have been there for decades. Not in the United States, land of Google and eBay. Churn requires death as well as birth. The artificial preservation of the inert dampens the quest for the new.

America let Pan Am die. Italy keeps Alitalia going although the airline’s been a dead man walking for years. There you have it: two continents, two business cultures. At least until recently, when the sheer extent of the U.S. financial collapse led the Treasury to discover forms of life-support that refuse to utter a taboo word — socialism — but resemble it nonetheless.

Let’s face it, the American International Group has no right to be around, if risk, markets, transparency, accountability and other foundations of American capitalism mean anything.

Which brings us to Grand Theft Auto, not the video game, but the ongoing drama starring General Motors and Chrysler in a desperate quest for billions of dollars of taxpayers’ money that they say is essential to their survival. (Ford has said it does not need federal money now to survive; it’s in somewhat better shape.)

I know, hundreds of thousands of jobs are directly at stake, hundreds of thousands more indirectly. This is not an economy that’s creating new jobs for those lost. Why should autoworkers get worse treatment than bankers?

These are agonizing questions. But it’s equally agonizing to contemplate the United States becoming the land of Alitalia-style life-support rather than Pan Am-style churn. If the Big Three, their heads in the sand, have made the wrong models with the wrong technologies for years, while their competitors adapted to a changing world, at least one must pay the price.

And, of course, the alternative in the case of  the U.S. car companies – a government managed, subsidized and money-losing car industry – is the worst of all worlds. Indeed the image of Hank Paulson, who lacks any expertise in managing an industrial enterprise and already has a poor record in the “picking winners and losers” department, playing “Car Czar” is ludicrous. (One wonders if he knows much about negotiating when he declares up front that the companies are getting the money and won’t be going home empty-handed.)

A Paulson-devised bailout conveys the wrong message to risk takers and managers (“Don’t worry, the government is here for you.”) But that’s not the worst of it. It robs the taxpayers of money that should go to something else –  for example, investment in companies that will profit, employ more workers and create wealth. (Yes, it is the taxpayers’ money we’re still talking about — that mound of debt will have to be repaid by current and future generations.)

Lost in the “UAW vs. Republicans” argument is a more fundamental one: a car bailout is a perfectly horrid use of taxpayers’ money. Rather than asking if we should bailout the car companies, a better question would be: isn’t there something better to be done with tens if not hundreds of billions of dollars? Certainly we can come up with something better than a batch of nationalized Pan Am’s.

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Kadima, Left or Right?

Israel’s ruling Kadima Party has revealed its new team to the public. The choice before Israeli voters now becomes clearer. Over the next couple of weeks, all three parties – Likud, Kadima, Labor – vying for control of the next coalition will reposition themselves. Kadima, with its new list, lies at the heart of this repositioning.

Kadima was formed as a centrist party, but with Ariel Sharon as the founding father and with most of the members coming originally from the Likud party, it was more a center-right than squarely center. Sharon had a unique appeal in that he could pursue a dovish policy and still be seen by most voters as a hawkish-enough leader. Criticizing Sharon for dovishness was not a sustainable political strategy. It seemed absurd. This was a part of Kadima’s success.

But things became much different with Ehud Olmert and Tzipi Livni at the helm. Those leaders, with no Sharon-like credentials for fighting terrorism and building settlements, could be more easily portrayed as born-again doves. Olmert might even be one, having made dovish comments that no Israeli Prime Minister before him dared to make (or believed to be correct). Livni is more complicated: she seems to have some hawkish instincts, but in the position of Foreign Minister she was highly attuned to the voices coming from the “international community,” and to what she believes is Israel’s need to sometimes accommodate such voices. Making Olmert, and now Livni look dovish is less complicated – and this is exactly what the Likud Party was doing. A vote for Kadima, it argues, is a vote for the Left.

For the Labor Party, this means disaster: if Kadima represents the center-left (and Meretz is the far-left), there’s no role, or reason, left for Labor. So the Labor Party pushed back, and will now double its effort to do so. Labor speakers, reacting to the Kadima primaries, have emphasized the fact that Kadima’s list contains a fair number of former Likud-members. They also claimed, not without merit, that it is not at all clear whether Livni has real control over her party, and raised time and again a familiar speculative scenario according to which some members of Kadima might be ready to abandon ship as soon as Election Day is over. This scenario assumes that former Defense-Minister Shaul Mofaz – both more hawkish than Livni and still disappointed by the fact that he was defeated in his attempt to be Kadima’s leader – is ready to cut a deal with Likud’s Netanyahu and join his coalition. To do such a thing, Mofaz will need a third of Kadima’s newly elected members to follow him (that’s the law), rather than stick with Livni. So both the press and Labor speakers were busy yesterday, counting the possible deserters – not an easy task, as Mofaz was not very successful in trying to have more of his people on the list.

But while Labor was pushing Kadima to the Right, the speakers of the Likud Party were pushing Kadima to the Left. And they also had some effective tools. For example: the fact that Dalya Itzik, formerly a Labor member, was elected first in the primaries (Livni and Mofaz were secured as number one and number two without the need to run again). For another example: the fact that all orthodox members of Kadima have been pushed to the bottom of the list and will most-probably not have a chance to serve again in the Knesset.

Kadima may find being pushed from both sides is beneficial – as it gives its leaders the pretext to argue that Kadima is, truly, at the center. But is the center – the exact center – really where they want to be? One might think that this will make them more vulnerable to claims from both sides: They will lose the center-left voters to Labor, because those voters want the Party that will not join a right-of-center coalition. And they will lose the center-right voters to Likud, assuming those voters want to make sure there’s no Kadima-Labor-Meretz in the making.

For Kadima, repositioning is a dangerous game it will try to avoid. Instead of this ideology contest, they will proceed with a workable strategy: presenting Kadima as the only way to prevent Netanyahu from becoming Israel’s best Prime Minister, and hoping that the number of people wary about Netanyahu is large enough to give them the boost they need in the polls. Of course, Kadima’s tendency to focus on the anything-but-Netanyahu argument – and avoid the more ideological debate – will expose the party to other allegations, made against them mostly by Labor speakers: Kadima is not the party of  “anything but Netanyahu” – but rather the party of “anything”, namely “nothing”.

Israel’s ruling Kadima Party has revealed its new team to the public. The choice before Israeli voters now becomes clearer. Over the next couple of weeks, all three parties – Likud, Kadima, Labor – vying for control of the next coalition will reposition themselves. Kadima, with its new list, lies at the heart of this repositioning.

Kadima was formed as a centrist party, but with Ariel Sharon as the founding father and with most of the members coming originally from the Likud party, it was more a center-right than squarely center. Sharon had a unique appeal in that he could pursue a dovish policy and still be seen by most voters as a hawkish-enough leader. Criticizing Sharon for dovishness was not a sustainable political strategy. It seemed absurd. This was a part of Kadima’s success.

But things became much different with Ehud Olmert and Tzipi Livni at the helm. Those leaders, with no Sharon-like credentials for fighting terrorism and building settlements, could be more easily portrayed as born-again doves. Olmert might even be one, having made dovish comments that no Israeli Prime Minister before him dared to make (or believed to be correct). Livni is more complicated: she seems to have some hawkish instincts, but in the position of Foreign Minister she was highly attuned to the voices coming from the “international community,” and to what she believes is Israel’s need to sometimes accommodate such voices. Making Olmert, and now Livni look dovish is less complicated – and this is exactly what the Likud Party was doing. A vote for Kadima, it argues, is a vote for the Left.

For the Labor Party, this means disaster: if Kadima represents the center-left (and Meretz is the far-left), there’s no role, or reason, left for Labor. So the Labor Party pushed back, and will now double its effort to do so. Labor speakers, reacting to the Kadima primaries, have emphasized the fact that Kadima’s list contains a fair number of former Likud-members. They also claimed, not without merit, that it is not at all clear whether Livni has real control over her party, and raised time and again a familiar speculative scenario according to which some members of Kadima might be ready to abandon ship as soon as Election Day is over. This scenario assumes that former Defense-Minister Shaul Mofaz – both more hawkish than Livni and still disappointed by the fact that he was defeated in his attempt to be Kadima’s leader – is ready to cut a deal with Likud’s Netanyahu and join his coalition. To do such a thing, Mofaz will need a third of Kadima’s newly elected members to follow him (that’s the law), rather than stick with Livni. So both the press and Labor speakers were busy yesterday, counting the possible deserters – not an easy task, as Mofaz was not very successful in trying to have more of his people on the list.

But while Labor was pushing Kadima to the Right, the speakers of the Likud Party were pushing Kadima to the Left. And they also had some effective tools. For example: the fact that Dalya Itzik, formerly a Labor member, was elected first in the primaries (Livni and Mofaz were secured as number one and number two without the need to run again). For another example: the fact that all orthodox members of Kadima have been pushed to the bottom of the list and will most-probably not have a chance to serve again in the Knesset.

Kadima may find being pushed from both sides is beneficial – as it gives its leaders the pretext to argue that Kadima is, truly, at the center. But is the center – the exact center – really where they want to be? One might think that this will make them more vulnerable to claims from both sides: They will lose the center-left voters to Labor, because those voters want the Party that will not join a right-of-center coalition. And they will lose the center-right voters to Likud, assuming those voters want to make sure there’s no Kadima-Labor-Meretz in the making.

For Kadima, repositioning is a dangerous game it will try to avoid. Instead of this ideology contest, they will proceed with a workable strategy: presenting Kadima as the only way to prevent Netanyahu from becoming Israel’s best Prime Minister, and hoping that the number of people wary about Netanyahu is large enough to give them the boost they need in the polls. Of course, Kadima’s tendency to focus on the anything-but-Netanyahu argument – and avoid the more ideological debate – will expose the party to other allegations, made against them mostly by Labor speakers: Kadima is not the party of  “anything but Netanyahu” – but rather the party of “anything”, namely “nothing”.

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Flotsam and Jetsam

2/3 of Illinois voters want a special election for senator. You know what Blago’s thinking:”Hey, this is golden — what could I get for it?”

And Lynn Sweet reports: “Emanuel privately urged Gov. Blagojevich’s administration to appoint Obama confidante Valerie Jarrett, and the Sun-Times learned Tuesday that he also pressed that it be done by a certain deadline.Jarrett was initially interested in the U.S. Senate post before Obama tapped her to be a White House senior adviser, sources say. The disclosure comes days after Obama’s camp downplayed Jarrett’s interest in the post.”

But many in the MSM are convinced there is nothing suspicious and there’s no doubt Emanuel will be one of the most powerful chiefs of staff, ever. He might be, and Emanuel’s behavior might be entirely exemplary. But the MSM’s degree of faith in Emanuel and others — based on nothing more than self-serving comments from the Obama camp – is startling. Well, if not startling, par for the course.

Illinois Democrats, the ball is in your court: “Chances that Illinois would swiftly oust its governor faded Wednesday.The combative new lawyer for Gov. Rod Blagojevich arrived at the state capitol with a host of objections to the impeachment process just getting under way. Committee members themselves at times seemed unsure about how to proceed. And the state Supreme Court declined to hear a motion by state Attorney General Lisa Madigan to rule that the governor was unfit to serve. ‘I don’t think it’s realistic that this is going to get done’ anytime soon, says Kent Redfield, professor of political science at the University of Illinois at Springfield.” How long will they insist Illinois go without a senator in order to avoid a special election?

Card check” loses a Democratic Senator. Wait until the rest of them find out how unpopular it is.

Chrysler shuts down its plants for a month. Will they come back? I think we’ve gone from the “car bailout” to the “GM bailout,” which is progress of a sort.

Meanwhile Hank Paulson, that noted auto business expert, is now playing the role of Car Czar. If you think it’s not a good idea to let government bureaucrats with no business experience run “private” companies, too bad. There’s more where that came from.

Camelot gets poor reviews off Broadway.

Law professor Kenneth Scott: “Congress seems to be becoming more like the House of Lords — some seats are hereditary.  Not merely for the Kennedy dukedom, but for Biden II (when he comes of age).  We are copying the non-democratic part of parliamentary democracy.”

And it only adds to the merriment that the accidental New York Governor, who didn’t get his position on his own, is deciding between two dynastic progeny – Andrew Cuomo and Caroline Kennedy. But in fairness to Cuomo, he has run for office and done something in his career. He’s actually qualified. Which used to be important when considering the vice presidency, but isn’t anymore when you’re pondering a real job with actual power.

Karl Rove points out some legal traps for the Obama administration if it insists on running a grassroots, campaign-style organization out of the White House. But aside from the legal issues, is this what the voters want to be done out of the White House? Has it been that long since the public recoiled at the “sale” of nights in the Lincoln bedroom? It’s the White House, for goodness sakes, not some field office in Hyde Park.

President-elect Obama learns you can’t really please all of the people all of the time: “Barack Obama’s choice of a prominent evangelical minister to perform the invocation at his inauguration is a conciliatory gesture toward social conservatives who opposed him in November, but it is drawing fierce challenges from a gay rights movement that – in the wake of a gay marriage ban in California – is looking for a fight.”

Aside from the conflicting advice on this “to-do” list for Sarah Palin (“Be a good governor!” “No, develop a policy infrastructure!”) the reporter clearly has one thing wrong: it’s more a help than a hindrance that she isn’t John McCain’s declared pick.

Howard Fineman is backing Chris Matthews for senate. You get the feeling there should be a real media just to cover the pretend media’s political activities (e.g. running for office, snagging good jobs in the Obama administration, endorsing their colleagues).

2/3 of Illinois voters want a special election for senator. You know what Blago’s thinking:”Hey, this is golden — what could I get for it?”

And Lynn Sweet reports: “Emanuel privately urged Gov. Blagojevich’s administration to appoint Obama confidante Valerie Jarrett, and the Sun-Times learned Tuesday that he also pressed that it be done by a certain deadline.Jarrett was initially interested in the U.S. Senate post before Obama tapped her to be a White House senior adviser, sources say. The disclosure comes days after Obama’s camp downplayed Jarrett’s interest in the post.”

But many in the MSM are convinced there is nothing suspicious and there’s no doubt Emanuel will be one of the most powerful chiefs of staff, ever. He might be, and Emanuel’s behavior might be entirely exemplary. But the MSM’s degree of faith in Emanuel and others — based on nothing more than self-serving comments from the Obama camp – is startling. Well, if not startling, par for the course.

Illinois Democrats, the ball is in your court: “Chances that Illinois would swiftly oust its governor faded Wednesday.The combative new lawyer for Gov. Rod Blagojevich arrived at the state capitol with a host of objections to the impeachment process just getting under way. Committee members themselves at times seemed unsure about how to proceed. And the state Supreme Court declined to hear a motion by state Attorney General Lisa Madigan to rule that the governor was unfit to serve. ‘I don’t think it’s realistic that this is going to get done’ anytime soon, says Kent Redfield, professor of political science at the University of Illinois at Springfield.” How long will they insist Illinois go without a senator in order to avoid a special election?

Card check” loses a Democratic Senator. Wait until the rest of them find out how unpopular it is.

Chrysler shuts down its plants for a month. Will they come back? I think we’ve gone from the “car bailout” to the “GM bailout,” which is progress of a sort.

Meanwhile Hank Paulson, that noted auto business expert, is now playing the role of Car Czar. If you think it’s not a good idea to let government bureaucrats with no business experience run “private” companies, too bad. There’s more where that came from.

Camelot gets poor reviews off Broadway.

Law professor Kenneth Scott: “Congress seems to be becoming more like the House of Lords — some seats are hereditary.  Not merely for the Kennedy dukedom, but for Biden II (when he comes of age).  We are copying the non-democratic part of parliamentary democracy.”

And it only adds to the merriment that the accidental New York Governor, who didn’t get his position on his own, is deciding between two dynastic progeny – Andrew Cuomo and Caroline Kennedy. But in fairness to Cuomo, he has run for office and done something in his career. He’s actually qualified. Which used to be important when considering the vice presidency, but isn’t anymore when you’re pondering a real job with actual power.

Karl Rove points out some legal traps for the Obama administration if it insists on running a grassroots, campaign-style organization out of the White House. But aside from the legal issues, is this what the voters want to be done out of the White House? Has it been that long since the public recoiled at the “sale” of nights in the Lincoln bedroom? It’s the White House, for goodness sakes, not some field office in Hyde Park.

President-elect Obama learns you can’t really please all of the people all of the time: “Barack Obama’s choice of a prominent evangelical minister to perform the invocation at his inauguration is a conciliatory gesture toward social conservatives who opposed him in November, but it is drawing fierce challenges from a gay rights movement that – in the wake of a gay marriage ban in California – is looking for a fight.”

Aside from the conflicting advice on this “to-do” list for Sarah Palin (“Be a good governor!” “No, develop a policy infrastructure!”) the reporter clearly has one thing wrong: it’s more a help than a hindrance that she isn’t John McCain’s declared pick.

Howard Fineman is backing Chris Matthews for senate. You get the feeling there should be a real media just to cover the pretend media’s political activities (e.g. running for office, snagging good jobs in the Obama administration, endorsing their colleagues).

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