Commentary Magazine


Posts For: February 20, 2009

Re:Re: Buck Up,Team Obama

Abe, in some ways Obama is turning out to be the anti-FDR. FDR said we have nothing to fear but fear itself. Obama keeps stoking our fears. FDR stopped a run on the banks. Obama and his Democratic allies caused one. Not physically at the bank doors, but on their stocks as we saw once again today:

The Dow slumped 6 percent and the S.&P. 500 fell 6.5 percent as fears about the stability of banks in the United States, Eastern Europe and elsewhere pummeled financial stocks. As the recession drags on and banking losses pile up, investors have been concerned that the administration could step in and take over some large banks, effectively wiping out stockholders, analysts said. Senator Christopher J. Dodd of Connecticut, chairman of the Senate Banking Committee, told Bloomberg Television on Friday that a short-term nationalization might be necessary.

Funny, how when the president talks about using the “Sweeden” approach everyone wants to dump their bank stocks. The prospect of “cram down” mortgages and forced renegotiation with high risk borrowers didn’t do much to lift spirits on Wall Street. The White House press secretary tried to walk back all the nationalization talk, but the damage had been done.

However the damage is not limited to the financial sector:

The Dow Jones Industrial Average was off almost 220 points at its intraday trough, which put it slightly below its closing low set in October 2002 after the Internet bubble burst. It ended down 100.28 points, off 1.3%, at 7365.67, less than 80 points above the 2002 low.

On the week, the Dow industrials declined by 6.2%, the worst weekly decline since the week of October 10, 2008, when the Dow fell by a harrowing 18%.

“We don’t have investors,” says Alan Valdes, a trader with JJB Hilliard, W.I Lyons. “We have flippers and some traders, but no investors.”

Hmm, we’re only a month into the First 100 Days, another bit of FDR symbolism. Let’s hope the rest of it isn’t quite as harrowing.

Abe, in some ways Obama is turning out to be the anti-FDR. FDR said we have nothing to fear but fear itself. Obama keeps stoking our fears. FDR stopped a run on the banks. Obama and his Democratic allies caused one. Not physically at the bank doors, but on their stocks as we saw once again today:

The Dow slumped 6 percent and the S.&P. 500 fell 6.5 percent as fears about the stability of banks in the United States, Eastern Europe and elsewhere pummeled financial stocks. As the recession drags on and banking losses pile up, investors have been concerned that the administration could step in and take over some large banks, effectively wiping out stockholders, analysts said. Senator Christopher J. Dodd of Connecticut, chairman of the Senate Banking Committee, told Bloomberg Television on Friday that a short-term nationalization might be necessary.

Funny, how when the president talks about using the “Sweeden” approach everyone wants to dump their bank stocks. The prospect of “cram down” mortgages and forced renegotiation with high risk borrowers didn’t do much to lift spirits on Wall Street. The White House press secretary tried to walk back all the nationalization talk, but the damage had been done.

However the damage is not limited to the financial sector:

The Dow Jones Industrial Average was off almost 220 points at its intraday trough, which put it slightly below its closing low set in October 2002 after the Internet bubble burst. It ended down 100.28 points, off 1.3%, at 7365.67, less than 80 points above the 2002 low.

On the week, the Dow industrials declined by 6.2%, the worst weekly decline since the week of October 10, 2008, when the Dow fell by a harrowing 18%.

“We don’t have investors,” says Alan Valdes, a trader with JJB Hilliard, W.I Lyons. “We have flippers and some traders, but no investors.”

Hmm, we’re only a month into the First 100 Days, another bit of FDR symbolism. Let’s hope the rest of it isn’t quite as harrowing.

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Commentary of the Day

Dave, on Jennifer Rubin:

“But they aren’t very good at “stabilizing” things because governments never are. Command economies run by bureaucrats (or 535 legislators) have a rather poor record of improving economic growth, increasing employment, providing opportunity, and the like.”

Jennifer, you’re close to the answer, but not completely there. This isn’t a case of bureaucrats or legislators being unable to do this because they lack skills, authority, resources. It’s a case of a a command economy being a *structural impossibility*.

The decisions made by a central authority will never have the information available to them that lower-level economic actors have, nor will the effects of bad decision-making ever have as immediate or lasting impact as they do on the economic actors who make them– Washington is, by definition, insulated from these choices (either from the rational incentives to make them– looking after your neighbor to be a good neighbor is a defensible emotional or political decision, not a rational economic one– or the consequences of screwing them up, i.e. sure, legislators may lose their elections, but that’s a very, very diffuse theoretical consequence).

Interestingly, this is why market economics and small-r republican federalism have such a long & happy history together: both are mechanisms for increasing local autonomy AND local responsibility for decision making in order to provide not just the most effective decisions, but also the fairest. Washington can’t efficiently make my grocery store shopping decisions anymore than they can efficiently staff my county school board or paint my road signs.

Then again, since when has ineffectiveness ever stopped any politician from trying to increase their power and authority over other people’s freedom to make decisions for themselves– and their responsibility to live with the consequences of unsound choices?

Dave, on Jennifer Rubin:

“But they aren’t very good at “stabilizing” things because governments never are. Command economies run by bureaucrats (or 535 legislators) have a rather poor record of improving economic growth, increasing employment, providing opportunity, and the like.”

Jennifer, you’re close to the answer, but not completely there. This isn’t a case of bureaucrats or legislators being unable to do this because they lack skills, authority, resources. It’s a case of a a command economy being a *structural impossibility*.

The decisions made by a central authority will never have the information available to them that lower-level economic actors have, nor will the effects of bad decision-making ever have as immediate or lasting impact as they do on the economic actors who make them– Washington is, by definition, insulated from these choices (either from the rational incentives to make them– looking after your neighbor to be a good neighbor is a defensible emotional or political decision, not a rational economic one– or the consequences of screwing them up, i.e. sure, legislators may lose their elections, but that’s a very, very diffuse theoretical consequence).

Interestingly, this is why market economics and small-r republican federalism have such a long & happy history together: both are mechanisms for increasing local autonomy AND local responsibility for decision making in order to provide not just the most effective decisions, but also the fairest. Washington can’t efficiently make my grocery store shopping decisions anymore than they can efficiently staff my county school board or paint my road signs.

Then again, since when has ineffectiveness ever stopped any politician from trying to increase their power and authority over other people’s freedom to make decisions for themselves– and their responsibility to live with the consequences of unsound choices?

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A Dangerous Game

Caroline Glick explains why the U.S. effort to restyle Durban II is doomed to fail:

First, since the stated purpose of the Durban II conference is to oversee the implementation of the first Durban conference’s decisions, and since those decisions include the anti-Israel assertion that Israel is a racist state, it is clear that the Durban II conference is inherently, and necessarily, anti-Israel.

The second reason that both the State Department and the White House must realize that they are powerless to affect the conference’s agenda is because that agenda was already set in previous planning sessions chaired by the likes of Libya, Cuba, Iran and Pakistan. And that agenda includes multiple assertions of the basic illegitimacy of the Jewish people’s right to self-determination.

All we have done, she argues, is bestow the patina of legitimacy to the planning conference and make it that much harder for our allies to boycott Durban II. She concludes:

Some might argue that no Israeli interest is served by openly condemning the White House. But when the White House is participating in a process that legitimizes and so advances the war against the Jewish state, such condemnation is not only richly deserved but required. It is the administration, not Israel that threw down the gauntlet. If Israel and its supporters refrain from vigorously criticizing this move, we guarantee its repetition.

But the question remains why we have engaged in this halfhearted attempt to refashion what cannot be refashioned. It is clear from Glick’s account and others‘ that our low-level representatives have done precious little to alter the agenda or tenor of the planned confab. So is this some elaborate bit of stagecraft to demonstrate that as hard as we tried (which was really not at all), we could not alter the outlines of Durban II ? If so, this is a dangerous and disingenuous game. It is hardly the model of transparency, good faith and engagement which the Obama administration has pronounced as the cornerstones of their foreign policy.

And if the U.S. government summons up the nerve to avoid Durban II, will the Obama team really have demonstrated their superior diplomatic skills — or simply given material to our opponents to claim that the U.S. carried out a charade in order to curry favor, albeit temporarily, with Israel’s enemies? This sort of deceptive, split-the-difference operating-style signals a lack of confidence in our our aims and portends further confusion about the intentions and policies of U.S. That, it seems, is what passes for the Obama foreign policy these days.

Caroline Glick explains why the U.S. effort to restyle Durban II is doomed to fail:

First, since the stated purpose of the Durban II conference is to oversee the implementation of the first Durban conference’s decisions, and since those decisions include the anti-Israel assertion that Israel is a racist state, it is clear that the Durban II conference is inherently, and necessarily, anti-Israel.

The second reason that both the State Department and the White House must realize that they are powerless to affect the conference’s agenda is because that agenda was already set in previous planning sessions chaired by the likes of Libya, Cuba, Iran and Pakistan. And that agenda includes multiple assertions of the basic illegitimacy of the Jewish people’s right to self-determination.

All we have done, she argues, is bestow the patina of legitimacy to the planning conference and make it that much harder for our allies to boycott Durban II. She concludes:

Some might argue that no Israeli interest is served by openly condemning the White House. But when the White House is participating in a process that legitimizes and so advances the war against the Jewish state, such condemnation is not only richly deserved but required. It is the administration, not Israel that threw down the gauntlet. If Israel and its supporters refrain from vigorously criticizing this move, we guarantee its repetition.

But the question remains why we have engaged in this halfhearted attempt to refashion what cannot be refashioned. It is clear from Glick’s account and others‘ that our low-level representatives have done precious little to alter the agenda or tenor of the planned confab. So is this some elaborate bit of stagecraft to demonstrate that as hard as we tried (which was really not at all), we could not alter the outlines of Durban II ? If so, this is a dangerous and disingenuous game. It is hardly the model of transparency, good faith and engagement which the Obama administration has pronounced as the cornerstones of their foreign policy.

And if the U.S. government summons up the nerve to avoid Durban II, will the Obama team really have demonstrated their superior diplomatic skills — or simply given material to our opponents to claim that the U.S. carried out a charade in order to curry favor, albeit temporarily, with Israel’s enemies? This sort of deceptive, split-the-difference operating-style signals a lack of confidence in our our aims and portends further confusion about the intentions and policies of U.S. That, it seems, is what passes for the Obama foreign policy these days.

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Tehran Is Open for Business

European energy giants are flocking to Tehran once again. The word in Brussels was that Europeans are hesitant to adopt new sanctions because they wish to know first where President Obama’s Iran foreign policy will be heading. To the politicians’ and officials’ credit, at least the list of sanctions being circulated by the EU-3 has considerably more teeth than ever before. But clearly, as indicated in this recent news report, energy giants have already concluded that sanctions will soon be out of fashion. Why waste time then? Clearly, they have made up their mind about where the wind is blowing.

European energy giants are flocking to Tehran once again. The word in Brussels was that Europeans are hesitant to adopt new sanctions because they wish to know first where President Obama’s Iran foreign policy will be heading. To the politicians’ and officials’ credit, at least the list of sanctions being circulated by the EU-3 has considerably more teeth than ever before. But clearly, as indicated in this recent news report, energy giants have already concluded that sanctions will soon be out of fashion. Why waste time then? Clearly, they have made up their mind about where the wind is blowing.

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Hillary’s Human Rights Shuffle

The New York Times reports on Hillary Clinton’s tough human rights stance in China:

Speaking more forcefully on human rights than any American dignitary has on Chinese soil, Hillary Rodham Clinton catalogued a devastating litany of abuse that has afflicted women around the world today and criticized China for seeking to limit free and open discussion of women’s issues here.

[…]

Continuing with references to domestic violence, genital mutilation, coercive abortions and sterilizations, Mrs. Clinton told the delegates from more than 180 countries, “If there is one message that echoes forth from this conference, let it be that human rights are women’s rights and women’s rights are human rights, once and for all.”

Or at least for a dozen years. That New York Times story is from 1995. This AP report is from today:

U.S. Secretary of State Hillary Rodham Clinton said Friday that the debate with China over human rights, Taiwan and Tibet cannot be allowed to interfere with attempts to reach consensus on other broader issues.

[…]

Instead, she said it might be better to agree to disagree on long-standing positions and focus instead on U.S.-Chinese engagement on climate change, the global financial crisis and security threats.

Put aside the philosophical vacuum that constitutes the Clinton core (Is there any doubt that if circumstances found her secretary of state in a McCain administration, she’d have delivered a speech about the importance of not letting human rights abuses be overshadowed by immediate financial and security concerns?); China, more than any other country, has made human rights violations an integral condition of a state machinery that threatens the financial, environmental, and national security of the rest of the world. In other words, Hillary Clinton has it exactly backwards – Chinese human rights violations cannot be separated from the “broader issues.”

Financial collapse in China is so potentially threatening because substandard living conditions and a class of industrial slaves make for dangerously fertile ground in the event of cataclysmic deprivation. Stirred up nationalist sentiment in a spiraling China could lead to extreme regional destabilization.

Moreover China is able to undermine American efforts at recovery through free trade because of a dirt cheap production system that enslaves workers or loses them to on-site illness or death. It should go without saying that Chinese industrial pollution is a by-product of the same inclination to flout acceptable standards of production.

The kind of shoddy realism Hillary Clinton is passing off as “smart power” always comes back to bite the West in the end. Particularly in times of global crisis, liberal capitalist countries should remember to use their firmer footing to work from an agenda that serves our immediate interests while organically advancing our ideals. The only way to get China to make a lasting contribution to global recovery would be to tilt Beijing toward improved human rights and fair trade practices.

The New York Times reports on Hillary Clinton’s tough human rights stance in China:

Speaking more forcefully on human rights than any American dignitary has on Chinese soil, Hillary Rodham Clinton catalogued a devastating litany of abuse that has afflicted women around the world today and criticized China for seeking to limit free and open discussion of women’s issues here.

[…]

Continuing with references to domestic violence, genital mutilation, coercive abortions and sterilizations, Mrs. Clinton told the delegates from more than 180 countries, “If there is one message that echoes forth from this conference, let it be that human rights are women’s rights and women’s rights are human rights, once and for all.”

Or at least for a dozen years. That New York Times story is from 1995. This AP report is from today:

U.S. Secretary of State Hillary Rodham Clinton said Friday that the debate with China over human rights, Taiwan and Tibet cannot be allowed to interfere with attempts to reach consensus on other broader issues.

[…]

Instead, she said it might be better to agree to disagree on long-standing positions and focus instead on U.S.-Chinese engagement on climate change, the global financial crisis and security threats.

Put aside the philosophical vacuum that constitutes the Clinton core (Is there any doubt that if circumstances found her secretary of state in a McCain administration, she’d have delivered a speech about the importance of not letting human rights abuses be overshadowed by immediate financial and security concerns?); China, more than any other country, has made human rights violations an integral condition of a state machinery that threatens the financial, environmental, and national security of the rest of the world. In other words, Hillary Clinton has it exactly backwards – Chinese human rights violations cannot be separated from the “broader issues.”

Financial collapse in China is so potentially threatening because substandard living conditions and a class of industrial slaves make for dangerously fertile ground in the event of cataclysmic deprivation. Stirred up nationalist sentiment in a spiraling China could lead to extreme regional destabilization.

Moreover China is able to undermine American efforts at recovery through free trade because of a dirt cheap production system that enslaves workers or loses them to on-site illness or death. It should go without saying that Chinese industrial pollution is a by-product of the same inclination to flout acceptable standards of production.

The kind of shoddy realism Hillary Clinton is passing off as “smart power” always comes back to bite the West in the end. Particularly in times of global crisis, liberal capitalist countries should remember to use their firmer footing to work from an agenda that serves our immediate interests while organically advancing our ideals. The only way to get China to make a lasting contribution to global recovery would be to tilt Beijing toward improved human rights and fair trade practices.

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The Fallacy of Government Stabilization

David Brooks sounds conflicted. On one hand, he seems to realize the ruinous nature of the policies we have embarked upon:

Our moral and economic system is based on individual responsibility. It’s based on the idea that people have to live with the consequences of their decisions. This makes them more careful deciders. This means that society tends toward justice — people get what they deserve as much as possible

Over the last few months, we’ve made a hash of all that. The Bush and Obama administrations have compensated foolishness and irresponsibility. The financial bailouts reward bankers who took insane risks. The auto bailouts subsidize companies and unions that made self-indulgent decisions a few decades ago that drove their industry into the ground.

On the other hand, he backpedals, arguing:

To stabilize that communal landscape, sometimes you have to shower money upon those who have been foolish or self-indulgent. The greedy idiots may be greedy idiots, but they are our countrymen. And at some level, we’re all in this together. If their lives don’t stabilize, then our lives don’t stabilize.

This is a lovely sentiment, but premised on a false notion that if the “smart” people in Washington think hard enough they can figure out how to “stabilize” the economy.  They can’t, of course. They can spend billions of dollars expanding government and doing non-stimulative things (e.g. expanding the welfare rolls). They can run up the debt. They can rob Peter to pay Paul. They can keep funneling billions to failing auto companies. But they aren’t very good at “stabilizing” things because governments never are. Command economies run by bureaucrats (or 535 legislators) have a rather poor record of improving economic growth, increasing employment, providing opportunity, and the like.

And we have seen what happens when they try. All sorts of “smart” people have been racing hither and yon trying this and that plan for six months or so. We gave the banks TARP money. But then we were supposed to force them to renegotiate with shaky borrowers. And now the banks need yet more money so we’ll give them more. But they can’t pay their executives more than a third of their salaries in bonuses, so some of the smarter ones will go and the others will spend their time figuring out how to evade the 1/3 rule. And if the borrowers still default after the government aid, then the banks will need even more government help. It’s a nasty cycle meddling here and tampering there. In the meantime, the prospect of modeling our bank rescue plan on Sweden has sent bank stocks plummeting. Ah, they’ll clearly need more money now!

And those auto companies are yet another example of the fallacy of government “stabilization.” Is there an “inter-agency task force” on the planet able to “stabilize” GM? I think not, especially since the government demands nonprofitable clean cars and defends union benefits and work rules.  Moreover, the money used to do all of this ($100B? $125B?) — and all other ventures — comes from somewhere and has to be repaid sometime.

Despite all the good intentions, it is plain we are making things worse, not better. It is not that we should begrudge the “idiots” the help.  (And indeed very few object in hard times to government spending in the form of “relief” to cushion the blow both for the capable and the idiotic.) But relief is not economic policy. As to the latter, the hitch is that the endeavor to help the “idiots” by a series of exquisitely detailed and mutually contradictory government fiats will make for more idiots, less productive economic activity, and ultimately less stability.

David Brooks sounds conflicted. On one hand, he seems to realize the ruinous nature of the policies we have embarked upon:

Our moral and economic system is based on individual responsibility. It’s based on the idea that people have to live with the consequences of their decisions. This makes them more careful deciders. This means that society tends toward justice — people get what they deserve as much as possible

Over the last few months, we’ve made a hash of all that. The Bush and Obama administrations have compensated foolishness and irresponsibility. The financial bailouts reward bankers who took insane risks. The auto bailouts subsidize companies and unions that made self-indulgent decisions a few decades ago that drove their industry into the ground.

On the other hand, he backpedals, arguing:

To stabilize that communal landscape, sometimes you have to shower money upon those who have been foolish or self-indulgent. The greedy idiots may be greedy idiots, but they are our countrymen. And at some level, we’re all in this together. If their lives don’t stabilize, then our lives don’t stabilize.

This is a lovely sentiment, but premised on a false notion that if the “smart” people in Washington think hard enough they can figure out how to “stabilize” the economy.  They can’t, of course. They can spend billions of dollars expanding government and doing non-stimulative things (e.g. expanding the welfare rolls). They can run up the debt. They can rob Peter to pay Paul. They can keep funneling billions to failing auto companies. But they aren’t very good at “stabilizing” things because governments never are. Command economies run by bureaucrats (or 535 legislators) have a rather poor record of improving economic growth, increasing employment, providing opportunity, and the like.

And we have seen what happens when they try. All sorts of “smart” people have been racing hither and yon trying this and that plan for six months or so. We gave the banks TARP money. But then we were supposed to force them to renegotiate with shaky borrowers. And now the banks need yet more money so we’ll give them more. But they can’t pay their executives more than a third of their salaries in bonuses, so some of the smarter ones will go and the others will spend their time figuring out how to evade the 1/3 rule. And if the borrowers still default after the government aid, then the banks will need even more government help. It’s a nasty cycle meddling here and tampering there. In the meantime, the prospect of modeling our bank rescue plan on Sweden has sent bank stocks plummeting. Ah, they’ll clearly need more money now!

And those auto companies are yet another example of the fallacy of government “stabilization.” Is there an “inter-agency task force” on the planet able to “stabilize” GM? I think not, especially since the government demands nonprofitable clean cars and defends union benefits and work rules.  Moreover, the money used to do all of this ($100B? $125B?) — and all other ventures — comes from somewhere and has to be repaid sometime.

Despite all the good intentions, it is plain we are making things worse, not better. It is not that we should begrudge the “idiots” the help.  (And indeed very few object in hard times to government spending in the form of “relief” to cushion the blow both for the capable and the idiotic.) But relief is not economic policy. As to the latter, the hitch is that the endeavor to help the “idiots” by a series of exquisitely detailed and mutually contradictory government fiats will make for more idiots, less productive economic activity, and ultimately less stability.

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What’s Good for General Motors

Today, a Swedish court approved an application to restructure carmaker Saab under the protection of Sweden’s bankruptcy laws.  The General Motors subsidiary will now undergo a reorganization resembling one under our Chapter 11.  Said Jan Ake Jonsson, Saab’s managing director, “It was determined a formal restructuring would be the best way to create a truly independent entity that is ready for investment.”

Is that so?  Perhaps he should have a conversation with his boss, Rick Wagoner, who continually maintains bankruptcy is not a good idea for vehicle companies.  Says the General Motors chief, “We don’t have any strategy or plan to file for bankruptcy.”

Of course that’s right – General Motors does not have a plan for anything other than accepting more Federal money.  On Tuesday, it asked for a $16.4 billion “loan,” a sum on top of the $13.4 billion approved in December.  And it will undoubtedly ask for more funds soon because, among other things, Americans are not buying vehicles, the United Auto Workers is not making meaningful concessions, bondholders are intransigent, and GM’s managers are idiots.  Today, David Brooks, in a column entitled “Money for Idiots,” writes that “sometimes you have to shower money upon those who have been foolish or self-indulgent.”  Maybe that’s right, but, as Saab showed us today, there are alternatives to enormous and inadequate bailouts.  Oh, almost forgot: Saab’s bankruptcy filing immediately followed a rejection from the Swedish government for a bailout.

So perhaps we should conclude that what’s good for Saab is also good for General Motors.  And that, by the way, would also be good for the United States.

Today, a Swedish court approved an application to restructure carmaker Saab under the protection of Sweden’s bankruptcy laws.  The General Motors subsidiary will now undergo a reorganization resembling one under our Chapter 11.  Said Jan Ake Jonsson, Saab’s managing director, “It was determined a formal restructuring would be the best way to create a truly independent entity that is ready for investment.”

Is that so?  Perhaps he should have a conversation with his boss, Rick Wagoner, who continually maintains bankruptcy is not a good idea for vehicle companies.  Says the General Motors chief, “We don’t have any strategy or plan to file for bankruptcy.”

Of course that’s right – General Motors does not have a plan for anything other than accepting more Federal money.  On Tuesday, it asked for a $16.4 billion “loan,” a sum on top of the $13.4 billion approved in December.  And it will undoubtedly ask for more funds soon because, among other things, Americans are not buying vehicles, the United Auto Workers is not making meaningful concessions, bondholders are intransigent, and GM’s managers are idiots.  Today, David Brooks, in a column entitled “Money for Idiots,” writes that “sometimes you have to shower money upon those who have been foolish or self-indulgent.”  Maybe that’s right, but, as Saab showed us today, there are alternatives to enormous and inadequate bailouts.  Oh, almost forgot: Saab’s bankruptcy filing immediately followed a rejection from the Swedish government for a bailout.

So perhaps we should conclude that what’s good for Saab is also good for General Motors.  And that, by the way, would also be good for the United States.

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Re: Buck up, Team Obama

Jen, the funny thing is the one positive that even Barack Obama’s detractors counted on was that Obama would get Americans excited about America – something George W. Bush ultimately failed to do. By January 20, even the most hardened anti-changeists had bought into the “right man for the times” line just a little bit.

But what the times demand – above all else – is certainty. The markets are screaming for certainty; our men and women in uniform, fighting two wars overseas, only need to hear some resolve from the commander in chief; our allies, as Robert Kagan notes, need to know that we still believe in the fight we’re asking them to join. And yet, within his first month, panic, ambivalence, and procrastination, have become the pillars of Obama’s governing style. Everything is at once dire, not of his own making, and, incidentally, under review until further notice: this is incoherent.

We’ve quickly reached the point where even the wrong decisions would be preferable to another day of scaring, equivocating, and blaming Bush. Markets know how to handle bad decisions, but they go into freefall when faced with no decisions. World leaders resent aggression or appreciate cooperation, but they don’t respect indecision. The president will inevitably disappoint people by decisively ruling out a speedy drawdown in Iraq, or getting behind a renewed effort to win in Afghanistan (he’s already walking back the additional 17,000 troops he agreed to earlier this week), or erecting a missile defense shield in Eastern Europe, or forcing banks to recognize that worthless loans are indeed worthless. He’ll also enrage people by making the opposite decisions. But decide he must — because if there’s anything that gets people excited about America it’s our country’s historical ability to point the way forward. The president would do well to remember John McCain’s campaign highpoint: his stirring declaration in Minnesota that Americans “never hide from history. We make history.”

Jen, the funny thing is the one positive that even Barack Obama’s detractors counted on was that Obama would get Americans excited about America – something George W. Bush ultimately failed to do. By January 20, even the most hardened anti-changeists had bought into the “right man for the times” line just a little bit.

But what the times demand – above all else – is certainty. The markets are screaming for certainty; our men and women in uniform, fighting two wars overseas, only need to hear some resolve from the commander in chief; our allies, as Robert Kagan notes, need to know that we still believe in the fight we’re asking them to join. And yet, within his first month, panic, ambivalence, and procrastination, have become the pillars of Obama’s governing style. Everything is at once dire, not of his own making, and, incidentally, under review until further notice: this is incoherent.

We’ve quickly reached the point where even the wrong decisions would be preferable to another day of scaring, equivocating, and blaming Bush. Markets know how to handle bad decisions, but they go into freefall when faced with no decisions. World leaders resent aggression or appreciate cooperation, but they don’t respect indecision. The president will inevitably disappoint people by decisively ruling out a speedy drawdown in Iraq, or getting behind a renewed effort to win in Afghanistan (he’s already walking back the additional 17,000 troops he agreed to earlier this week), or erecting a missile defense shield in Eastern Europe, or forcing banks to recognize that worthless loans are indeed worthless. He’ll also enrage people by making the opposite decisions. But decide he must — because if there’s anything that gets people excited about America it’s our country’s historical ability to point the way forward. The president would do well to remember John McCain’s campaign highpoint: his stirring declaration in Minnesota that Americans “never hide from history. We make history.”

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Iran’s Perfect Nuclear Storm

The latest IAEA report is out and makes for some interesting reading (also see David Albright’s analysis).

What’s important in the report?

First, Iran has crossed the finish line in terms of breakout capacity — it has 1010 kilograms of low enriched uranium (LEU) in store. These remain under IAEA surveillance and seal, and diversion efforts could be easily detected. Regardless, Iran now has enough fissile material to produce a nuclear weapon if it chooses to reprocess its stocks of LEU and if it can enrich it to weapons grade. In practical terms, Iran can continue to play cat and mouse while its clandestine military program advances. Once the other components are available and the new centrifuges enable Iran to enrich to weapons-grade level, Iran can choose whether to kick the inspectors out and denounce the treaty, or simply give evidence to the world that it has all the necessary ingredients.

In terms of projection of power, there is little difference.

Second, the Agency has measured an enrichment level of 4.2%, well below the critical threshold of 5% but also an indication of improved Iranian capabilities.

Third, the Agency is still being denied access to the Arak Heavy Water reactor, but a number of important  findings in the reports emerge: the Heavy Water facility appears ready to operate. Iran has completed production of natural uranium pellets for the heavy-water reactor and fuel rods are being produced. The heavy water reactor could thus begin work soon — but the international community hasn’t got the faintest idea of what is going on inside that facility.

Fourth, Iran has notified the Agency that fuel will be fed into the now completed Bushehr nuclear reactor in the second trimester of this year — between late March and the end of June, that is.

Fifth, Iran keeps mum on the military components of the program, refuses to discuss any matter (and El Baradei, as usual, is lamenting the fact that the countries who supplied the intelligence should not have prevented him from showing it to Iranian authorities…) and is even stalling on the demand by the IAEA to supply information about the newly planned nuclear power-plant in Darkhovin (a suspected site of clandestine activities to begin with).

These elements — together with the successful launching into space of Iran’s first indigenous satellite and Iran’s successful test, last November, of its first homemade solid fuel propelled two-stage ballistic missile (the Sejjil) — produce the perfect storm and are the ingredients for a rapid escalation. After all, Israel attacked Osirak and Dair Alzour soon before the reactor became operational.

The latest IAEA report is out and makes for some interesting reading (also see David Albright’s analysis).

What’s important in the report?

First, Iran has crossed the finish line in terms of breakout capacity — it has 1010 kilograms of low enriched uranium (LEU) in store. These remain under IAEA surveillance and seal, and diversion efforts could be easily detected. Regardless, Iran now has enough fissile material to produce a nuclear weapon if it chooses to reprocess its stocks of LEU and if it can enrich it to weapons grade. In practical terms, Iran can continue to play cat and mouse while its clandestine military program advances. Once the other components are available and the new centrifuges enable Iran to enrich to weapons-grade level, Iran can choose whether to kick the inspectors out and denounce the treaty, or simply give evidence to the world that it has all the necessary ingredients.

In terms of projection of power, there is little difference.

Second, the Agency has measured an enrichment level of 4.2%, well below the critical threshold of 5% but also an indication of improved Iranian capabilities.

Third, the Agency is still being denied access to the Arak Heavy Water reactor, but a number of important  findings in the reports emerge: the Heavy Water facility appears ready to operate. Iran has completed production of natural uranium pellets for the heavy-water reactor and fuel rods are being produced. The heavy water reactor could thus begin work soon — but the international community hasn’t got the faintest idea of what is going on inside that facility.

Fourth, Iran has notified the Agency that fuel will be fed into the now completed Bushehr nuclear reactor in the second trimester of this year — between late March and the end of June, that is.

Fifth, Iran keeps mum on the military components of the program, refuses to discuss any matter (and El Baradei, as usual, is lamenting the fact that the countries who supplied the intelligence should not have prevented him from showing it to Iranian authorities…) and is even stalling on the demand by the IAEA to supply information about the newly planned nuclear power-plant in Darkhovin (a suspected site of clandestine activities to begin with).

These elements — together with the successful launching into space of Iran’s first indigenous satellite and Iran’s successful test, last November, of its first homemade solid fuel propelled two-stage ballistic missile (the Sejjil) — produce the perfect storm and are the ingredients for a rapid escalation. After all, Israel attacked Osirak and Dair Alzour soon before the reactor became operational.

Read Less

Obama Meets the Real World

Charles Krauthammer has a compelling and alarming column today that documents the “supine posture” of President Obama’s diplomacy. A day earlier, my former colleague Karl Rove documented the missteps and unforced errors made by Team Obama on the domestic front. He concludes Obama & Company are “winging it.” Many people voted for Barack Obama aware of the fact that he had done nothing in his life that commended him to be President. What they were reassured by was Obama’s intelligence and temperament, his superbly run campaign, and the sense that he was something special, in terms of his capacity to usher in a “new” and “post-partisan” age in American politics. Some of us admired Obama’s obvious talents, even as we were concerned about his qualifications and his history (which was markedly left-leaning).

It was an open question, then, as to how he would perform. The early signs are not terribly reassuring, for all the reasons Krauthammer, Rove, and others have documented. The sense one gets is that Obama and his administration appear somewhat overmatched by events — not in every respect, of course, but in important ways for sure. And in some instances, they look like they are not yet ready for primetime. Some of this is understandable; every administration needs time to adjust to the staggering burdens of the Presidency. But some of what we have seen is surprising carelessness.

Charm can carry a president for a while; so can political skills and the public’s good will. But those sources of political sustenance have limits. What’s happening, I think, is that gravity is re-asserting itself. The days of Obama’s Magic Tour — of the soaring expectations, of people swooning at the sight of The One, of his audience being caught up in his vague promise of “change” — are ending; he and his team now have a country to govern and an untidy world to deal with. Nice speeches and glib answers aren’t sufficient. Insisting that he is the non-ideological Voice of Reason grows tiresome after a while. So while Obama’s approval ratings remain fairly strong, the ground beneath his feet is beginning to crack just a bit.

One cannot help but hope that this is a useful early lesson for Team Obama, which even by the standards of politics is a very self-satisfied lot. And while Obama has sent of jolt of energy through the GOP, which is in far stronger shape than anyone could have imagined just a month ago, I hope Obama and his administration can adjust in time. After all, the fate of our country is now tied in large measure to his actions. It’s a bad thing to have as our commander-in-chief a person with, in Krauthammer’s vivid phrase, a “kick me” sign on his back.

The first month has been ragged, and some disturbing signs have arisen. It’s still very early — Obama has yet to complete his first full month in office, after all — and he may get his sea legs soon.  He remains a formidable political figure. And sending 17,000 additional troops to Afghanistan, while done in a somewhat haphazard way, was reassuring. But one thing is for sure: the adjustment has been harder than he and his team envisioned, and the results are underwhelming. The problems are more complicated than they said. It seems as if President Obama is spending half his time trying to lower the expectations of what he can achieve.

Welcome to life in the Oval Office.

Charles Krauthammer has a compelling and alarming column today that documents the “supine posture” of President Obama’s diplomacy. A day earlier, my former colleague Karl Rove documented the missteps and unforced errors made by Team Obama on the domestic front. He concludes Obama & Company are “winging it.” Many people voted for Barack Obama aware of the fact that he had done nothing in his life that commended him to be President. What they were reassured by was Obama’s intelligence and temperament, his superbly run campaign, and the sense that he was something special, in terms of his capacity to usher in a “new” and “post-partisan” age in American politics. Some of us admired Obama’s obvious talents, even as we were concerned about his qualifications and his history (which was markedly left-leaning).

It was an open question, then, as to how he would perform. The early signs are not terribly reassuring, for all the reasons Krauthammer, Rove, and others have documented. The sense one gets is that Obama and his administration appear somewhat overmatched by events — not in every respect, of course, but in important ways for sure. And in some instances, they look like they are not yet ready for primetime. Some of this is understandable; every administration needs time to adjust to the staggering burdens of the Presidency. But some of what we have seen is surprising carelessness.

Charm can carry a president for a while; so can political skills and the public’s good will. But those sources of political sustenance have limits. What’s happening, I think, is that gravity is re-asserting itself. The days of Obama’s Magic Tour — of the soaring expectations, of people swooning at the sight of The One, of his audience being caught up in his vague promise of “change” — are ending; he and his team now have a country to govern and an untidy world to deal with. Nice speeches and glib answers aren’t sufficient. Insisting that he is the non-ideological Voice of Reason grows tiresome after a while. So while Obama’s approval ratings remain fairly strong, the ground beneath his feet is beginning to crack just a bit.

One cannot help but hope that this is a useful early lesson for Team Obama, which even by the standards of politics is a very self-satisfied lot. And while Obama has sent of jolt of energy through the GOP, which is in far stronger shape than anyone could have imagined just a month ago, I hope Obama and his administration can adjust in time. After all, the fate of our country is now tied in large measure to his actions. It’s a bad thing to have as our commander-in-chief a person with, in Krauthammer’s vivid phrase, a “kick me” sign on his back.

The first month has been ragged, and some disturbing signs have arisen. It’s still very early — Obama has yet to complete his first full month in office, after all — and he may get his sea legs soon.  He remains a formidable political figure. And sending 17,000 additional troops to Afghanistan, while done in a somewhat haphazard way, was reassuring. But one thing is for sure: the adjustment has been harder than he and his team envisioned, and the results are underwhelming. The problems are more complicated than they said. It seems as if President Obama is spending half his time trying to lower the expectations of what he can achieve.

Welcome to life in the Oval Office.

Read Less

Why the Left Lost

The Israeli Left is undergoing political introspection – an obligatory process for every party in the wake of electoral defeat. What went wrong? The Left finds itself so weakened post-election that as former leader of leftist Meretz Yossi Sarid remarked today, it is not even certain whether it will be able to lead the opposition! He explained the tendency of Left-wing voters to support Tzipi Livni in this election in terms of “strategic voting” gone awry: it did not block Benjamin Netanyahu; it just tore the left to shreds. In the aftermath, the Right captured not only the government, but also the opposition.

There is certainly something to the above interpretation, but it’s still too mechanical to capture the essence of why the peace camp fell out of favor with Israeli voters. Obviously, strategic voting by those opposed to the rise of Netanyahu played a significant part in obliterating the electoral standing of parties like Meretz and Labor. However, focusing the debate on voting patterns rather than political principles is counterproductive to the Left’s efforts at rehabilitating itself. Until the Left grasps that its core failure was one of ideology – not of political tactics – its self-corrective measures will be superficial and ineffectual at persuading a majority, or even a significant minority of voters, that its leaders and political platforms deserve another opportunity.

So – what’s the fundamental problem with the Left? Popular Israeli author Eshkol Nevo has got it right: the Left lost because voters are convinced that it is excessively concerned with the welfare of Palestinians and insufficiently invested in Israel’s interests. His recipe for the successful resurrection of the Left starts with the following points:

Stop mortgaging all resources in favor of the Palestinian issue: Throughout the Western world, the Left entails a comprehensive worldview that includes civil, moral, economic, and environmental aspects. Only around here, being part of the leftist camp means mostly worrying about Mahmoud Abbas’ wellbeing. Resolving the conflict with the Palestinians is critical, yet in practical and moral terms it can’t be the only thing that matters.

And speaking of the Palestinians: Perhaps the time has come to admit that the idea of “land for peace” was attempted twice in recent decades and achieved problematic results? The Left is allowed to keep on believing that the Gaza disengagement failed because it was not coordinated properly and that the Oslo Accord collapsed because Netanyahu violated it, yet perhaps it would be more productive to think in new directions: The Arab League’s proposal? A diplomatic breakthrough vis-à-vis Syria? More massive international involvement in the negotiations?

Making peace with the Palestinians and “ending the occupation” have become the Left’s overarching goals — to be achieved at all costs. That’s the real reason most Israelis — even some who are generally sympathetic to the Oslo days’ principles — are uncomfortable with its platforms. They want leaders working toward peace while keeping clear priorities: Israel first, the rest of the world second; Israel first, “ending the occupation” second; Israel first, making life better for Palestinians second. Of course, many Leftist leaders argue that their passion for the Palestinians’ interests is motivated by their concern over what’s best for Israel. I actually believe in the sincerity of their conviction. But along the way they’ve lost the Israeli public’s confidence; not simply the confidence in the policies they have been prescribing – but also the confidence that they can keep their priorities straight.

The Israeli Left is undergoing political introspection – an obligatory process for every party in the wake of electoral defeat. What went wrong? The Left finds itself so weakened post-election that as former leader of leftist Meretz Yossi Sarid remarked today, it is not even certain whether it will be able to lead the opposition! He explained the tendency of Left-wing voters to support Tzipi Livni in this election in terms of “strategic voting” gone awry: it did not block Benjamin Netanyahu; it just tore the left to shreds. In the aftermath, the Right captured not only the government, but also the opposition.

There is certainly something to the above interpretation, but it’s still too mechanical to capture the essence of why the peace camp fell out of favor with Israeli voters. Obviously, strategic voting by those opposed to the rise of Netanyahu played a significant part in obliterating the electoral standing of parties like Meretz and Labor. However, focusing the debate on voting patterns rather than political principles is counterproductive to the Left’s efforts at rehabilitating itself. Until the Left grasps that its core failure was one of ideology – not of political tactics – its self-corrective measures will be superficial and ineffectual at persuading a majority, or even a significant minority of voters, that its leaders and political platforms deserve another opportunity.

So – what’s the fundamental problem with the Left? Popular Israeli author Eshkol Nevo has got it right: the Left lost because voters are convinced that it is excessively concerned with the welfare of Palestinians and insufficiently invested in Israel’s interests. His recipe for the successful resurrection of the Left starts with the following points:

Stop mortgaging all resources in favor of the Palestinian issue: Throughout the Western world, the Left entails a comprehensive worldview that includes civil, moral, economic, and environmental aspects. Only around here, being part of the leftist camp means mostly worrying about Mahmoud Abbas’ wellbeing. Resolving the conflict with the Palestinians is critical, yet in practical and moral terms it can’t be the only thing that matters.

And speaking of the Palestinians: Perhaps the time has come to admit that the idea of “land for peace” was attempted twice in recent decades and achieved problematic results? The Left is allowed to keep on believing that the Gaza disengagement failed because it was not coordinated properly and that the Oslo Accord collapsed because Netanyahu violated it, yet perhaps it would be more productive to think in new directions: The Arab League’s proposal? A diplomatic breakthrough vis-à-vis Syria? More massive international involvement in the negotiations?

Making peace with the Palestinians and “ending the occupation” have become the Left’s overarching goals — to be achieved at all costs. That’s the real reason most Israelis — even some who are generally sympathetic to the Oslo days’ principles — are uncomfortable with its platforms. They want leaders working toward peace while keeping clear priorities: Israel first, the rest of the world second; Israel first, “ending the occupation” second; Israel first, making life better for Palestinians second. Of course, many Leftist leaders argue that their passion for the Palestinians’ interests is motivated by their concern over what’s best for Israel. I actually believe in the sincerity of their conviction. But along the way they’ve lost the Israeli public’s confidence; not simply the confidence in the policies they have been prescribing – but also the confidence that they can keep their priorities straight.

Read Less

Buck up, Team Obama

Robert Kagan supports the ramp up of forces in Afghanistan but sounds a note of caution:

The only worrying aspect of administration actions so far has been the (largely self-serving) tendency on the part of some key officials to declare the situation hopeless, which raises doubts about the administration’s staying power. The worst thing the administration can do, both strategically and politically, is to give the impression that it doesn’t have the stomach for this fight. Then support, both in the U.S. and, even more, such support as still exists among NATO allies, will begin to evaporate.

But that has been the pattern for the Obama team on virtually every major policy front. The economy is a heartbeat away from catastrophic failure. Afghanistan is near hopeless. All the war on terror policies are “very complicated.” The mix of fretting and fear-mongering seems to be the automatic reaction to every difficult challenge.

Why do they fret and moan so? This is, after all, a team that is obsessed with politics and campaigning. So the political spinners must be whispering night and day, “lower expectations.” It is a defensive, poll-driven approach to governance, which puts primary emphasis on “how will it play?” Or even worse, “how do we avoid blame if this fails?”

But, if you think the Obama team is above mere politics, the alternative explanation is even more troubling. What if they really are overwhelmed and uncertain, lacking confidence in their own abilities? That’s what it sounds like to domestic and international audiences. It sure comes across as “we know this may not work but…” Let’s be honest, not even the best actor could look as bedraggled and uncertain as Tim Geithner during his bank bailout-plan’s roll-out.

Much hay was made of George W. Bush’s refusal to express doubts and question his own approach to hard policy decisions. But perhaps he understood something fundamental to leadership which the Obama team has yet to master: unless you project confidence, others won’t follow you. Even Bill Clinton is imploring him to pep up: “I just would like him to end by saying that he is hopeful and completely convinced we’re gonna come through this.”

Americans and our international allies don’t need worry warts in the White House. They need resolute, optimistic, and firm leadership. Let’s see if the Obama team can muster some of that.

Robert Kagan supports the ramp up of forces in Afghanistan but sounds a note of caution:

The only worrying aspect of administration actions so far has been the (largely self-serving) tendency on the part of some key officials to declare the situation hopeless, which raises doubts about the administration’s staying power. The worst thing the administration can do, both strategically and politically, is to give the impression that it doesn’t have the stomach for this fight. Then support, both in the U.S. and, even more, such support as still exists among NATO allies, will begin to evaporate.

But that has been the pattern for the Obama team on virtually every major policy front. The economy is a heartbeat away from catastrophic failure. Afghanistan is near hopeless. All the war on terror policies are “very complicated.” The mix of fretting and fear-mongering seems to be the automatic reaction to every difficult challenge.

Why do they fret and moan so? This is, after all, a team that is obsessed with politics and campaigning. So the political spinners must be whispering night and day, “lower expectations.” It is a defensive, poll-driven approach to governance, which puts primary emphasis on “how will it play?” Or even worse, “how do we avoid blame if this fails?”

But, if you think the Obama team is above mere politics, the alternative explanation is even more troubling. What if they really are overwhelmed and uncertain, lacking confidence in their own abilities? That’s what it sounds like to domestic and international audiences. It sure comes across as “we know this may not work but…” Let’s be honest, not even the best actor could look as bedraggled and uncertain as Tim Geithner during his bank bailout-plan’s roll-out.

Much hay was made of George W. Bush’s refusal to express doubts and question his own approach to hard policy decisions. But perhaps he understood something fundamental to leadership which the Obama team has yet to master: unless you project confidence, others won’t follow you. Even Bill Clinton is imploring him to pep up: “I just would like him to end by saying that he is hopeful and completely convinced we’re gonna come through this.”

Americans and our international allies don’t need worry warts in the White House. They need resolute, optimistic, and firm leadership. Let’s see if the Obama team can muster some of that.

Read Less

Re: This Seal is Real

Yesterday, in recounting the critical decisions the Obama team is postponing (until such time as they can” review” matters), I forgot to mention the question of missile assets in Eastern Europe. The AP reports:

[U.S. Defense Secretary Robert] Gates said Friday that Washington would review the plan “in the context of our relationship with both Poland and the Czech Republic, our relationship with the NATO alliance, the commitments we have made as members of the alliance in terms of European missile defense — and also in the context of our relationship with the Russians.”

Meantime, Gates says he “asked the Polish leaders for a little time for the administration to be able to do that.”

Warsaw will just have to take a number and get in line.

Yesterday, in recounting the critical decisions the Obama team is postponing (until such time as they can” review” matters), I forgot to mention the question of missile assets in Eastern Europe. The AP reports:

[U.S. Defense Secretary Robert] Gates said Friday that Washington would review the plan “in the context of our relationship with both Poland and the Czech Republic, our relationship with the NATO alliance, the commitments we have made as members of the alliance in terms of European missile defense — and also in the context of our relationship with the Russians.”

Meantime, Gates says he “asked the Polish leaders for a little time for the administration to be able to do that.”

Warsaw will just have to take a number and get in line.

Read Less

Better Late Than Never

Michael Kinsley has it mostly correct as he wonders about all that debt we’re ringing up. But he seems to have missed the hue and cry in opposition to the stimulus plan:

The reasons that made it a bad idea to run up all that debt haven’t disappeared just because something even worse came along. Almost no one in Washington is talking about this.  . . But even if the stimulus is a magnificent success, the money still has to be paid back. The plan of record apparently is that we keep borrowing, spending and stimulating, faster and faster, until suddenly, on some signal from heaven or Timothy Geithner, we all stop spending and start saving in recordbreaking amounts. Oh sure, that will work.

Well, of course, virtually every Republican who voted against the stimulus and many, many conservative pundits and think tanks have been making this point all along. The spend-a-thon is going to leave us with two options (or a combination): massive tax hikes or inflating our debt away. This is the “cure is worse than the disease” argument which the Obama administration has given the back of the hand to. Failed theories! Do nothingism!

It is delightful to have Kinsley join the chorus of those who have been worried about this all approach all along. Perhaps he should attend the “fiscal responsibility” summit next week. (I know, you can’t make this stuff up.) Had they had it last week there would have been a way right up front to save $787B plus interest.

Michael Kinsley has it mostly correct as he wonders about all that debt we’re ringing up. But he seems to have missed the hue and cry in opposition to the stimulus plan:

The reasons that made it a bad idea to run up all that debt haven’t disappeared just because something even worse came along. Almost no one in Washington is talking about this.  . . But even if the stimulus is a magnificent success, the money still has to be paid back. The plan of record apparently is that we keep borrowing, spending and stimulating, faster and faster, until suddenly, on some signal from heaven or Timothy Geithner, we all stop spending and start saving in recordbreaking amounts. Oh sure, that will work.

Well, of course, virtually every Republican who voted against the stimulus and many, many conservative pundits and think tanks have been making this point all along. The spend-a-thon is going to leave us with two options (or a combination): massive tax hikes or inflating our debt away. This is the “cure is worse than the disease” argument which the Obama administration has given the back of the hand to. Failed theories! Do nothingism!

It is delightful to have Kinsley join the chorus of those who have been worried about this all approach all along. Perhaps he should attend the “fiscal responsibility” summit next week. (I know, you can’t make this stuff up.) Had they had it last week there would have been a way right up front to save $787B plus interest.

Read Less

Flotsam and Jetsam

Nearly 2/3 of Americans oppose any further car bailouts.

Only 38% support the mortgage bailout.

Not a headline the White House wants to see: “No Confidence: Dow Closes At Six-Year Low; Wall Street Drops 800 Points on Heels of Obama’s Plan to Save Economy.” But the facts are the facts: “The Dow Jones Industrial Average lost nearly 90 points today and 800 points, or 9.7 percent, in the 10 days since the Obama administration announced major reforms to stimulate the economy, keep banks afloat and save millions of homeowners from foreclosure. But since the banking reforms were unveiled Feb. 10, the Dow has reached a new bear market low — the lowest since Oct. 9, 2002.”

Larry Kudlow picks up where his colleague Rick Santelli left off: “President Obama’s massive mortgage-bailout plan is nothing more than a thinly disguised entitlement program that redistributes income from the responsible 92 percent of home-owning mortgage holders who pay their bills on time to the irresponsible defaulters who bought more than they could ever afford. This is Obama’s spread-the-wealth program in action. Team Obama is rewarding bad behavior. It is enlarging moral hazard. It is expanding its welfarist approach to economic policy.” Really, if you are going to get cash from the government for not paying your mortgage why keep paying it?

Paul Krugman keeps wondering ” Who’ll stop the pain?” Should we break it to him that there is no tooth fairy and no recession-ending fairy either?  It is a recession for goodness sakes — asset values have to fall, businesses need to reorganize, and individuals need to get their personal balance sheets in order before we can recover. He knows that, right?

Peter Baker explains how the Census figured in Judd Gregg’s departure, and why it really does matter.

Michael Ledeen suggests Eric Holder go visit Quantico where there is ample diversity and not much rumination about race — they are too busy building a cohesive organization to fight our real enemies. Read the whole thing, as they say.

Perhaps it was a slow news day at A.P.: “President Obama walks briskly in rain, with no umbrella, for helicopter ride to Andrews AFB.” No umbrella!? How daring, how fascinating!

Mark McKinnon tells the president to knock it off: “It’s time for less mope and more hope. You were elected because you are a walking, talking hope machine. Plug that sucker back in and crank it up to ten. There has been some debate in the opinion pages about whether the FDR or Ronald Reagan approach to a bad economy is the best remedy. Putting that aside, there is one thing they had in common: They were unblushing optimists. And they communicated their enthusiasm until their half-full cups ranneth over.”

On a similar note, Newt Gingrich think this administration “is beginning to resemble Jimmy Carter all over again.” Well, ever since Obama started with the doom and gloom routine, and pumping up the size of government, those Ronald Reagan analogies sure disappeared.

Charles Krauthammer is worried about the “supine diplomacy”: “I would like to think the supine posture is attributable to a rookie leader otherwise preoccupied (i.e., domestically), leading a foreign policy team as yet unorganized if not disoriented. But when the State Department says that Hugo Chávez’s president-for-life referendum, which was preceded by a sham government-controlled campaign featuring the tear-gassing of the opposition, was ‘for the most part . . . a process that was fully consistent with democratic process,’ you have to wonder if Month One is not a harbinger of things to come.”

Jake Tapper notes that the Vatican didn’t give Nancy Pelosi her photo-op. And he boils down the Vatican’s statement: “The Pope told Speaker Pelosi that abortion is a sin and always has been (see ‘consistent teaching’) — and that she as a Catholic legislator is especially responsible for doing all she can to stop it.” Whatever your views on the topic, it is amusing, to say the least, that Pelosi thought she’d avoid getting rebuked by the Pope (indeed get some brownie points for her devotion to Catholicism) after her public misstatement of Church doctrine.


Nearly 2/3 of Americans oppose any further car bailouts.

Only 38% support the mortgage bailout.

Not a headline the White House wants to see: “No Confidence: Dow Closes At Six-Year Low; Wall Street Drops 800 Points on Heels of Obama’s Plan to Save Economy.” But the facts are the facts: “The Dow Jones Industrial Average lost nearly 90 points today and 800 points, or 9.7 percent, in the 10 days since the Obama administration announced major reforms to stimulate the economy, keep banks afloat and save millions of homeowners from foreclosure. But since the banking reforms were unveiled Feb. 10, the Dow has reached a new bear market low — the lowest since Oct. 9, 2002.”

Larry Kudlow picks up where his colleague Rick Santelli left off: “President Obama’s massive mortgage-bailout plan is nothing more than a thinly disguised entitlement program that redistributes income from the responsible 92 percent of home-owning mortgage holders who pay their bills on time to the irresponsible defaulters who bought more than they could ever afford. This is Obama’s spread-the-wealth program in action. Team Obama is rewarding bad behavior. It is enlarging moral hazard. It is expanding its welfarist approach to economic policy.” Really, if you are going to get cash from the government for not paying your mortgage why keep paying it?

Paul Krugman keeps wondering ” Who’ll stop the pain?” Should we break it to him that there is no tooth fairy and no recession-ending fairy either?  It is a recession for goodness sakes — asset values have to fall, businesses need to reorganize, and individuals need to get their personal balance sheets in order before we can recover. He knows that, right?

Peter Baker explains how the Census figured in Judd Gregg’s departure, and why it really does matter.

Michael Ledeen suggests Eric Holder go visit Quantico where there is ample diversity and not much rumination about race — they are too busy building a cohesive organization to fight our real enemies. Read the whole thing, as they say.

Perhaps it was a slow news day at A.P.: “President Obama walks briskly in rain, with no umbrella, for helicopter ride to Andrews AFB.” No umbrella!? How daring, how fascinating!

Mark McKinnon tells the president to knock it off: “It’s time for less mope and more hope. You were elected because you are a walking, talking hope machine. Plug that sucker back in and crank it up to ten. There has been some debate in the opinion pages about whether the FDR or Ronald Reagan approach to a bad economy is the best remedy. Putting that aside, there is one thing they had in common: They were unblushing optimists. And they communicated their enthusiasm until their half-full cups ranneth over.”

On a similar note, Newt Gingrich think this administration “is beginning to resemble Jimmy Carter all over again.” Well, ever since Obama started with the doom and gloom routine, and pumping up the size of government, those Ronald Reagan analogies sure disappeared.

Charles Krauthammer is worried about the “supine diplomacy”: “I would like to think the supine posture is attributable to a rookie leader otherwise preoccupied (i.e., domestically), leading a foreign policy team as yet unorganized if not disoriented. But when the State Department says that Hugo Chávez’s president-for-life referendum, which was preceded by a sham government-controlled campaign featuring the tear-gassing of the opposition, was ‘for the most part . . . a process that was fully consistent with democratic process,’ you have to wonder if Month One is not a harbinger of things to come.”

Jake Tapper notes that the Vatican didn’t give Nancy Pelosi her photo-op. And he boils down the Vatican’s statement: “The Pope told Speaker Pelosi that abortion is a sin and always has been (see ‘consistent teaching’) — and that she as a Catholic legislator is especially responsible for doing all she can to stop it.” Whatever your views on the topic, it is amusing, to say the least, that Pelosi thought she’d avoid getting rebuked by the Pope (indeed get some brownie points for her devotion to Catholicism) after her public misstatement of Church doctrine.


Read Less




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