Commentary Magazine


Posts For: March 20, 2009

Commentary of the Day

Mmargo, on Linda Chavez:

The variety of seeming well-founded opinions on this thread convinces me that Linda Chavez is right on the big picture–the Treasury, White House, and Congress do not know enough to make good decisions on how AIG should fix its problem.

I think it would be wise for all parties, including citizens, to admit as much.

Why are usually rational people asking whether these bonuses are “justified” against any one of a number of possible criteria? Why are we taking our eyes off the big question, which is why the government decided to handle this by buying AIG rather than by lending to it? We are seeing this banking crisis being used to insert government into the market as a competitor. At the same time, we are seeing government undertake to regulate business in ways never seen before. And finally, we are seeing how incompetent government is to do all this. That’s the 1000-lb. gorilla in the room and a lot of people are trying to keep us from seeing.

Mmargo, on Linda Chavez:

The variety of seeming well-founded opinions on this thread convinces me that Linda Chavez is right on the big picture–the Treasury, White House, and Congress do not know enough to make good decisions on how AIG should fix its problem.

I think it would be wise for all parties, including citizens, to admit as much.

Why are usually rational people asking whether these bonuses are “justified” against any one of a number of possible criteria? Why are we taking our eyes off the big question, which is why the government decided to handle this by buying AIG rather than by lending to it? We are seeing this banking crisis being used to insert government into the market as a competitor. At the same time, we are seeing government undertake to regulate business in ways never seen before. And finally, we are seeing how incompetent government is to do all this. That’s the 1000-lb. gorilla in the room and a lot of people are trying to keep us from seeing.

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And Then There’s the CBO Report

The week that the Obama administration wishes would vanish into the memory hole ends on a particularly troublesome note. No, it’s not the gaffe about the Special Olympics. Politico reports:

President Barack Obama’s new budget will produce a string of annual deficits averaging in excess of $926 billion over the next 10 years and dramatically add to the national debt, according to new estimates released Friday by the Congressional Budget Office.

To say this puts a crimp in the president’s budget plans is to greatly understate the problem. Even before the CBO’s report, Republicans and some Red state Democrats were making a racket about the president’s gargantuan spending plans and funny-money accounting tricks. This will add to the din. Politico explains:

The immediate impact of the new estimates is two fold:

First, Democrats, who begin writing their own spending plans next week, will be under pressure to find more short term savings in the president’s budget in order to show more progress toward deficit reduction. The administration had hoped to see the deficit down to $570 billion by 2014, for example, but CBO puts the number at $749 billion—a very hard target for Congress to accept.

The pressure to make cuts has already begun in the Senate Budget Committee where Chairman Kent Conrad is pressing to scale back new appropriations requested by the president for the fiscal year that begins Oct. 1. At the same time, the North Dakota Democrat may come under pressure himself to go after agriculture subsidies, which he has thus far protected but are being targeted by Obama in the case of wealthy farmers.

Second, and more long term, the greater message of the CBO numbers is the nation faces a major fiscal crisis with the exploding levels of debt.

To be clear, CBO is saying that the debt will total $9.27 trillion for the next 10 years, or more than $2.2 trillion above the White House’s figure.

At this point, I think it’s safe to assume the White House budget is DOA. The question remains: what will take its place and what consensus is there for a more restrained blueprint? Stay tuned.

The week that the Obama administration wishes would vanish into the memory hole ends on a particularly troublesome note. No, it’s not the gaffe about the Special Olympics. Politico reports:

President Barack Obama’s new budget will produce a string of annual deficits averaging in excess of $926 billion over the next 10 years and dramatically add to the national debt, according to new estimates released Friday by the Congressional Budget Office.

To say this puts a crimp in the president’s budget plans is to greatly understate the problem. Even before the CBO’s report, Republicans and some Red state Democrats were making a racket about the president’s gargantuan spending plans and funny-money accounting tricks. This will add to the din. Politico explains:

The immediate impact of the new estimates is two fold:

First, Democrats, who begin writing their own spending plans next week, will be under pressure to find more short term savings in the president’s budget in order to show more progress toward deficit reduction. The administration had hoped to see the deficit down to $570 billion by 2014, for example, but CBO puts the number at $749 billion—a very hard target for Congress to accept.

The pressure to make cuts has already begun in the Senate Budget Committee where Chairman Kent Conrad is pressing to scale back new appropriations requested by the president for the fiscal year that begins Oct. 1. At the same time, the North Dakota Democrat may come under pressure himself to go after agriculture subsidies, which he has thus far protected but are being targeted by Obama in the case of wealthy farmers.

Second, and more long term, the greater message of the CBO numbers is the nation faces a major fiscal crisis with the exploding levels of debt.

To be clear, CBO is saying that the debt will total $9.27 trillion for the next 10 years, or more than $2.2 trillion above the White House’s figure.

At this point, I think it’s safe to assume the White House budget is DOA. The question remains: what will take its place and what consensus is there for a more restrained blueprint? Stay tuned.

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Tennis, Anyone?

Serve. On February 17, the United Arab Emirates refused to grant an entry visa to Israeli player Shahar Peer to play in the Barclays Dubai Tennis Championships.  U.S. networks boycotted the tournament, the World Tennis Association fined the tournament organizers, and last year’s champion American Andy Roddick refused to defend his title, saying, “I really didn’t agree with what went on over there.”

Smash.  On March 5, the International Tennis Federation canceled a junior tennis tournament to be held in Karachi, Pakistan, because of security concerns in the wake of an attack on Sri Lanka’s cricket team.

Volley.  On March 7, the Davis Cup tennis match between Israel and Sweden in Malmo had to be defended by hundreds of riot police against attacks from anti-Israeli “activists.”  Sweden’s Left Party leader Lars Ohly told the crowd that the European Union and the rest of the world should “boycott the racist regime in Israel.”  Israeli tennis star Andy Ram wrote that the Swedish players were embarrassed by it all, and that the Israeli team had only been able to leave the hotel three times in a week.  In 2004 in Malmo, the most popular boy’s name was Mohammed.

Double Fault.  Washington DC’s mayor, Adrian Fenty, made an unscheduled visit to the UAE during the Barclays tournament.  The Hill Rag, the local paper, quotes Fenty as saying that the UAE government paid for his trip, which was “a family vacation.”  He was aware that Peer had not been allowed to participate, but decided to go anyway.  Rabbi Shmuel Herzfeld, the rabbi of congregation Ohev Sholom — The National Synagogue — has called on Fenty to apologize.  Fenty’s public schedule did not reflect his absence.

It’s almost as though he might have thought the visit would be embarrassing.  I can’t imagine why.

Serve. On February 17, the United Arab Emirates refused to grant an entry visa to Israeli player Shahar Peer to play in the Barclays Dubai Tennis Championships.  U.S. networks boycotted the tournament, the World Tennis Association fined the tournament organizers, and last year’s champion American Andy Roddick refused to defend his title, saying, “I really didn’t agree with what went on over there.”

Smash.  On March 5, the International Tennis Federation canceled a junior tennis tournament to be held in Karachi, Pakistan, because of security concerns in the wake of an attack on Sri Lanka’s cricket team.

Volley.  On March 7, the Davis Cup tennis match between Israel and Sweden in Malmo had to be defended by hundreds of riot police against attacks from anti-Israeli “activists.”  Sweden’s Left Party leader Lars Ohly told the crowd that the European Union and the rest of the world should “boycott the racist regime in Israel.”  Israeli tennis star Andy Ram wrote that the Swedish players were embarrassed by it all, and that the Israeli team had only been able to leave the hotel three times in a week.  In 2004 in Malmo, the most popular boy’s name was Mohammed.

Double Fault.  Washington DC’s mayor, Adrian Fenty, made an unscheduled visit to the UAE during the Barclays tournament.  The Hill Rag, the local paper, quotes Fenty as saying that the UAE government paid for his trip, which was “a family vacation.”  He was aware that Peer had not been allowed to participate, but decided to go anyway.  Rabbi Shmuel Herzfeld, the rabbi of congregation Ohev Sholom — The National Synagogue — has called on Fenty to apologize.  Fenty’s public schedule did not reflect his absence.

It’s almost as though he might have thought the visit would be embarrassing.  I can’t imagine why.

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Re: Re: Get Real

Linda, you’ve cogently illustrated why government shouldn’t get into the messy business of managing distressed companies. Bankruptcy is in fact the ideal place to work these issues out. In Chapter 11, judgments can be made as to which employment agreements are really required and which need to be modified or abandoned altogether. In the current arrangement, none of that clear-eyed analysis is possible.

Geithner and the Fed certainly didn’t finesse this one. Leaning on AIG to delay or renegotiate these deals, at least in the short term, likely would have been one of those “right moves” the president references. In the private sector, these arrangements are entirely rational, but we are no longer in the “private sector.” And there’s the rub. Now, it may be too much to ask of any government official, even one considerably more competent than Geithner, to find the balance between employee retention needs and public support for keeping AIG afloat.

Meanwhile, the government has handed out another $5B to help rescue auto suppliers before any concessions are finalized by the Big Two car companies — another example of government’s ill-advised efforts to relieve private companies of the consequences of their actions.

In the future, politicians and the public should think twice before taking on responsibilities for which they are unfit.

Linda, you’ve cogently illustrated why government shouldn’t get into the messy business of managing distressed companies. Bankruptcy is in fact the ideal place to work these issues out. In Chapter 11, judgments can be made as to which employment agreements are really required and which need to be modified or abandoned altogether. In the current arrangement, none of that clear-eyed analysis is possible.

Geithner and the Fed certainly didn’t finesse this one. Leaning on AIG to delay or renegotiate these deals, at least in the short term, likely would have been one of those “right moves” the president references. In the private sector, these arrangements are entirely rational, but we are no longer in the “private sector.” And there’s the rub. Now, it may be too much to ask of any government official, even one considerably more competent than Geithner, to find the balance between employee retention needs and public support for keeping AIG afloat.

Meanwhile, the government has handed out another $5B to help rescue auto suppliers before any concessions are finalized by the Big Two car companies — another example of government’s ill-advised efforts to relieve private companies of the consequences of their actions.

In the future, politicians and the public should think twice before taking on responsibilities for which they are unfit.

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The Reality of Greatness

We’d like to join the President in his Happy Nowruz wishes. But as we watch him briefly yet poignantly remind us of the greatness of Iran’s ancient civilization, we cannot but be reminded of the fact that such greatness today clashes with the brutality of Iran’s regime, its backwardness, and the misery it inflicts on its people.

An Iranian-American journalist — held in Tehran in solitary confinement now for 47 days — has reportedly been broken by Iranian prison brutality. A blogger whose crime was to have “insulted” the Supreme Leader, is reported to have died in prison. Iran recently televised the government blinding of a man by means of sulfuric acid poured on the eyes. Hangings continue, making Iran a leader in the number of yearly executions carried out, including the gruesome sub-category of child executions.

A great civilization does not commit such atrocities. We hope President Obama never forgets this, as his dialogue with Tehran begins.

We’d like to join the President in his Happy Nowruz wishes. But as we watch him briefly yet poignantly remind us of the greatness of Iran’s ancient civilization, we cannot but be reminded of the fact that such greatness today clashes with the brutality of Iran’s regime, its backwardness, and the misery it inflicts on its people.

An Iranian-American journalist — held in Tehran in solitary confinement now for 47 days — has reportedly been broken by Iranian prison brutality. A blogger whose crime was to have “insulted” the Supreme Leader, is reported to have died in prison. Iran recently televised the government blinding of a man by means of sulfuric acid poured on the eyes. Hangings continue, making Iran a leader in the number of yearly executions carried out, including the gruesome sub-category of child executions.

A great civilization does not commit such atrocities. We hope President Obama never forgets this, as his dialogue with Tehran begins.

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Choose Your Storyline

There are multiple currents feeding the AIG debacle and keeping it in the headlines, to the chagrin of the administration.

First, there is the familiar “Who knew what and when?” As we have learned from Tim Geithner’s controversies, the question is whether he is hiding the ball or distracted. The New York Times makes a case for the latter:

Interviews with senior Federal Reserve and Treasury officials, as well as members of Congress, leave little doubt that the bonus program was a disaster hiding in plain sight. Mr. Geithner is not the only one who appears not to have understood the populist fury the bonuses would set off. Career staff officials at the Treasury, Fed and Federal Reserve Bank of New York exchanged e-mail messages about the A.I.G. bonus program as early as late February, according to a person familiar with the matter. A.I.G. itself revealed the bonus plan in regulatory filings last September.

But it seems Geithner never quite understood the specifics of the AIG bonuses until last week, and when asked about them by a congressman earlier this month, he didn’t know or bother to find out what the congressman was talking about. Incompetency is the perpetual Geithner defense, it seems.

Next there is the “How is the president handling it?” angle. So far, not so well. From the usually sympathetic Politico:

The sluggish and unsteady response to the uproar over AIG bonuses highlights a larger problem of his White House: Obama’s surprisingly uneven campaign to educate people about the economic crisis and convince Washington and the broader public that he is in command of circumstances.

On the Left, Josh Marshall wants Obama to look like he’s in control. And at the other end of the political spectrum, Stephen Hayes thinks AIG “means big trouble for Obama’s big agenda.” The consensus: so far, really not so good on the crisis management front.

Then there is the “What will Congress do?” storyline. The House easily passed the tax-the-AIG-bonuses-which-Treasury-originally-said-the-employees-were-entitled-to-receive bill. Republicans were divided between those who don’t approve of the mob grabbing citizens’ wallets and those who feel compelled to join in the populist fury. Meanwhile, the Senate slows down the rush for vengeance for two reasons: “There’s reluctance by some Republicans to use the tax code to go after the bonus money, and some Democrats don’t want to draw attention to Dodd’s role in the matter.” Something for everyone.

But the most critical storyline in all this is how it affects the critical task before us: putting our financial sector in order. Charles Krauthammer notes the president has repeatedly placed key components of his agenda in unsteady hands, the stimulus in Nancy Pelosi’s and bank bailout in Geithner’s. But he has not confronted this central issue, and indeed by fanning the populist flames, has worsened our predicament:

It is time for the president to state the obvious: This recession is not caused by excessive executive compensation in government-controlled companies. The economy has been sinking because of a lack of credit, stemming from a general lack of confidence, stemming from the lack of a plan to detoxify the major lending institutions, mainly the banks, which, to paraphrase Willie Sutton, is where the money used to be.

So choose your favorite storyline. Just like the recession and the hypocrisy festival in Washington, there is no end in sight to any of them. And so long as they all go on, there is precious little political oxygen for anything else.

There are multiple currents feeding the AIG debacle and keeping it in the headlines, to the chagrin of the administration.

First, there is the familiar “Who knew what and when?” As we have learned from Tim Geithner’s controversies, the question is whether he is hiding the ball or distracted. The New York Times makes a case for the latter:

Interviews with senior Federal Reserve and Treasury officials, as well as members of Congress, leave little doubt that the bonus program was a disaster hiding in plain sight. Mr. Geithner is not the only one who appears not to have understood the populist fury the bonuses would set off. Career staff officials at the Treasury, Fed and Federal Reserve Bank of New York exchanged e-mail messages about the A.I.G. bonus program as early as late February, according to a person familiar with the matter. A.I.G. itself revealed the bonus plan in regulatory filings last September.

But it seems Geithner never quite understood the specifics of the AIG bonuses until last week, and when asked about them by a congressman earlier this month, he didn’t know or bother to find out what the congressman was talking about. Incompetency is the perpetual Geithner defense, it seems.

Next there is the “How is the president handling it?” angle. So far, not so well. From the usually sympathetic Politico:

The sluggish and unsteady response to the uproar over AIG bonuses highlights a larger problem of his White House: Obama’s surprisingly uneven campaign to educate people about the economic crisis and convince Washington and the broader public that he is in command of circumstances.

On the Left, Josh Marshall wants Obama to look like he’s in control. And at the other end of the political spectrum, Stephen Hayes thinks AIG “means big trouble for Obama’s big agenda.” The consensus: so far, really not so good on the crisis management front.

Then there is the “What will Congress do?” storyline. The House easily passed the tax-the-AIG-bonuses-which-Treasury-originally-said-the-employees-were-entitled-to-receive bill. Republicans were divided between those who don’t approve of the mob grabbing citizens’ wallets and those who feel compelled to join in the populist fury. Meanwhile, the Senate slows down the rush for vengeance for two reasons: “There’s reluctance by some Republicans to use the tax code to go after the bonus money, and some Democrats don’t want to draw attention to Dodd’s role in the matter.” Something for everyone.

But the most critical storyline in all this is how it affects the critical task before us: putting our financial sector in order. Charles Krauthammer notes the president has repeatedly placed key components of his agenda in unsteady hands, the stimulus in Nancy Pelosi’s and bank bailout in Geithner’s. But he has not confronted this central issue, and indeed by fanning the populist flames, has worsened our predicament:

It is time for the president to state the obvious: This recession is not caused by excessive executive compensation in government-controlled companies. The economy has been sinking because of a lack of credit, stemming from a general lack of confidence, stemming from the lack of a plan to detoxify the major lending institutions, mainly the banks, which, to paraphrase Willie Sutton, is where the money used to be.

So choose your favorite storyline. Just like the recession and the hypocrisy festival in Washington, there is no end in sight to any of them. And so long as they all go on, there is precious little political oxygen for anything else.

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Re: Get Real

I am really astounded by the backlash on the AIG retention bonuses. It may come from having actual experience in corporate America (I chair the comp committee of a NYSE company and have sat on boards of directors of public companies for more than a dozen years).  Most of the people weighing in on this issue seem not to have a clue about the ubiquity and reasonableness of such plans.

These are not bonuses based on performance — which is what we usually think of when we hear the word bonus: a reward for good performance.  These are financial incentives being given to people to stick around as a company is unraveling and the employees have safer and possibly more lucrative opportunities elsewhere. You often see such bonuses put in place when companies are about to go into Chapter 11 and bankruptcy judges usually approve them, with creditors’ assent, because without them you would lose key employees critical to reorganizing the company.

I don’t claim to be an expert on AIG’s problems.  But it seems to me entirely reasonable that the company needed experienced people in their Financial Products division to try to unravel the credit default swap mess.  The geniuses that got the company into trouble in the first place when these instruments were set up (and their risk not properly understood) have long gone.  Those employees left in the division, however, are still necessary to ensure that the company not implode but wind down in an orderly fashion.  And the U.S. taxpayer now has a direct stake in seeing this happen.

Congress has now decided to scapegoat these employees and is doing so in ways that will cause enormous harm.  There is plenty of blame to go around in the current financial mess, but Congress shares some significant burden in this regard.  The idea that Barney Frank is trying to tell anyone how to run a business is ludicrous.  Most politicians couldn’t assess a P&L statement if their life depended on it. Many of them have been on public payrolls or in the non-profit world all their lives, starting with the president.  This whole thing is not only unseemly, it’s dangerous.

Greed is certainly a vice; but so is envy. And the latter is not only one of the Seven Deadly Sins, it happens to be forbidden by the Ten Commandments.  We’re not going to be better off if we get rid of excessive greed but replace it with something just as unsavory.

I am really astounded by the backlash on the AIG retention bonuses. It may come from having actual experience in corporate America (I chair the comp committee of a NYSE company and have sat on boards of directors of public companies for more than a dozen years).  Most of the people weighing in on this issue seem not to have a clue about the ubiquity and reasonableness of such plans.

These are not bonuses based on performance — which is what we usually think of when we hear the word bonus: a reward for good performance.  These are financial incentives being given to people to stick around as a company is unraveling and the employees have safer and possibly more lucrative opportunities elsewhere. You often see such bonuses put in place when companies are about to go into Chapter 11 and bankruptcy judges usually approve them, with creditors’ assent, because without them you would lose key employees critical to reorganizing the company.

I don’t claim to be an expert on AIG’s problems.  But it seems to me entirely reasonable that the company needed experienced people in their Financial Products division to try to unravel the credit default swap mess.  The geniuses that got the company into trouble in the first place when these instruments were set up (and their risk not properly understood) have long gone.  Those employees left in the division, however, are still necessary to ensure that the company not implode but wind down in an orderly fashion.  And the U.S. taxpayer now has a direct stake in seeing this happen.

Congress has now decided to scapegoat these employees and is doing so in ways that will cause enormous harm.  There is plenty of blame to go around in the current financial mess, but Congress shares some significant burden in this regard.  The idea that Barney Frank is trying to tell anyone how to run a business is ludicrous.  Most politicians couldn’t assess a P&L statement if their life depended on it. Many of them have been on public payrolls or in the non-profit world all their lives, starting with the president.  This whole thing is not only unseemly, it’s dangerous.

Greed is certainly a vice; but so is envy. And the latter is not only one of the Seven Deadly Sins, it happens to be forbidden by the Ten Commandments.  We’re not going to be better off if we get rid of excessive greed but replace it with something just as unsavory.

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From Bad to Worse

The Washington Post dryly informs us:

Congress today moved to levy punitive taxes on bonuses at financial firms receiving government aid, threatening to undermine the government’s rescue of the financial system. The taxes imposed would be so high that the result would likely drive away nearly all firms participating in the federal assistance program.

We have, it seems, converted an error in oversight (Tim Geither and the Fed failing to stave off embarrassing bonuses) into a feeding frenzy which will undermine the effort to steady the financial sector — which was the purpose of the AIG takeover in the first place.

Once the president took the plunge into the pool of populist rage, there was no turning back. As the Post tells us, House Ways and Means Chairman Charlie Rangel, who first raised qualms about using the tax code as a punitive cudgel, soon was leading the confiscatory charge.

Some Republicans, either for sound policy reasons or out of good old fashioned political spite, are seeking to hold back the tide. The report noted, “Rep. Mike Pence (R-Ind.) called the tax measure a ‘constitutionally questionable bill to paper over’ changes supported by Democrats that he said made the bonuses possible.” And over in the Senate, the Republicans are heckling the president for spending his time on brackets and Jay Leno, and they are asking for a “who knew and when did they know it” inquiry about the AIG bonus-protection plan.

And now after fanning the flames the president seems worried by the bonfire. He told Jay Leno:

It’s important, he said, not to “lurch from thing to thing” in trying to address the nation’s big problems.

“Look, I understand Congress’ frustrations,” he said on “The Tonight Show with Jay Leno.” But he suggested that legislators were being more vindictive than constructive.

“Everybody’s angry… but I think that the best way to handle this is to make sure that you close the door before the horse gets out of the barn. And what happened here was the money’s already gone out, and people are scrambling to try to find ways to get back at them,” he said.

So he’ll veto the bill? And if he thought this was the wrong approach it might have been a good idea to tell Nancy Pelosi before the torches were lit and the pitchforks sharpened in the House. The mind reels.

It is a sorry tale. Poor oversight by the Fed and Treasury begets a populist frenzy, begets a collapse of an orderly approach to straightening out our financial sector. And this is what flows once we decided to let government “manage” a business — and then entrust it all to an administration with too little business acumen and too little toleration of public criticism.

If these developments have undermined the public’s willingness to indulge in the fantasy that government is equipped to orchestrate huge enterprises, then perhaps there is a silver lining to all of this. Those hoping for an era of sage technocratic rule by the best and the brightest must be disappointed. For those who thought it was folly from the get-go, there is no joy in watching the whole experiment implode.

The Washington Post dryly informs us:

Congress today moved to levy punitive taxes on bonuses at financial firms receiving government aid, threatening to undermine the government’s rescue of the financial system. The taxes imposed would be so high that the result would likely drive away nearly all firms participating in the federal assistance program.

We have, it seems, converted an error in oversight (Tim Geither and the Fed failing to stave off embarrassing bonuses) into a feeding frenzy which will undermine the effort to steady the financial sector — which was the purpose of the AIG takeover in the first place.

Once the president took the plunge into the pool of populist rage, there was no turning back. As the Post tells us, House Ways and Means Chairman Charlie Rangel, who first raised qualms about using the tax code as a punitive cudgel, soon was leading the confiscatory charge.

Some Republicans, either for sound policy reasons or out of good old fashioned political spite, are seeking to hold back the tide. The report noted, “Rep. Mike Pence (R-Ind.) called the tax measure a ‘constitutionally questionable bill to paper over’ changes supported by Democrats that he said made the bonuses possible.” And over in the Senate, the Republicans are heckling the president for spending his time on brackets and Jay Leno, and they are asking for a “who knew and when did they know it” inquiry about the AIG bonus-protection plan.

And now after fanning the flames the president seems worried by the bonfire. He told Jay Leno:

It’s important, he said, not to “lurch from thing to thing” in trying to address the nation’s big problems.

“Look, I understand Congress’ frustrations,” he said on “The Tonight Show with Jay Leno.” But he suggested that legislators were being more vindictive than constructive.

“Everybody’s angry… but I think that the best way to handle this is to make sure that you close the door before the horse gets out of the barn. And what happened here was the money’s already gone out, and people are scrambling to try to find ways to get back at them,” he said.

So he’ll veto the bill? And if he thought this was the wrong approach it might have been a good idea to tell Nancy Pelosi before the torches were lit and the pitchforks sharpened in the House. The mind reels.

It is a sorry tale. Poor oversight by the Fed and Treasury begets a populist frenzy, begets a collapse of an orderly approach to straightening out our financial sector. And this is what flows once we decided to let government “manage” a business — and then entrust it all to an administration with too little business acumen and too little toleration of public criticism.

If these developments have undermined the public’s willingness to indulge in the fantasy that government is equipped to orchestrate huge enterprises, then perhaps there is a silver lining to all of this. Those hoping for an era of sage technocratic rule by the best and the brightest must be disappointed. For those who thought it was folly from the get-go, there is no joy in watching the whole experiment implode.

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Happy Old Year!

Barack Obama released a video message intended for Iranians and their leaders, wishing them a happy Nowruz (Iranian New Year) and stressing all the usual Obamisms about hope, diplomacy, togetherness, and mutual respect. Obama supporters can swoon and Obama detractors can stew, but trying to establish a connection across intense cultural lines is nothing that Obama brought to the presidency. It is perfectly in keeping with George W. Bush’s unstinting effort to appeal to the world’s Muslims at every opportunity.

In early 2002, Bush initiated the first annual Iftar dinner at the White House, to break the Ramadan fast. Fifty ambassadors and clerics from Muslim nations were in attendance when the Crusading Cowboy said, “America is made better by millions of Muslim citizens,” and, “America has close and important relations with many Islamic nations. So it is fitting for America to honor your friendship and the traditions of a great faith by hosting this Iftar at the White House,” and “So tonight we are reminded of God’s greatness and His commandments to live in peace and to help neighbors in need. According to Muslim teachings, God first revealed His word in the holy Qur’an to the Prophet Muhammad during the month of Ramadan. That word has guided billions of believers across the centuries, and those believers built a culture of learning and literature and science.”

In ways both formal and informal, the last president reiterated his belief in the respectability and wonder of Islam too many times to count. For all the talk of Obama-Clinton envoy diplomacy, Bush, the stubborn unilateralist, put together the first U.S. envoy to deal directly with the Organization of the Islamic Conference, “to listen and to learn from representatives from Muslim states.”

Instead of extending an open hand for Iranian leaders to chop off, George W. Bush appealed directly to Iran’s pro-democracy movement. “The Iranian government must listen to the voices of those who long for freedom,” he said in a 2004 speech, adding, “We stand strongly with those who demand freedom.”

There are two main differences between Bush’s Muslim outreach and Obama’s ambidirectional variety. First, as a man in whose life faith plays a central role, Bush could simply appeal to Muslims as members of an Abrahamic religion. He didn’t gild the lily, as Obama does, by condescending to one “great culture” after another, and citing the universal peace dreams of tyrants. Second, Bush never thought embracing the world’s peaceful Muslims was a substitute for threatening, or using, force against the world’s less peaceful Muslims. He knew that saying nice things was less important than doing necessary things. When it comes to Iran, there’s no indication that Obama sees a difference between the two.

Barack Obama released a video message intended for Iranians and their leaders, wishing them a happy Nowruz (Iranian New Year) and stressing all the usual Obamisms about hope, diplomacy, togetherness, and mutual respect. Obama supporters can swoon and Obama detractors can stew, but trying to establish a connection across intense cultural lines is nothing that Obama brought to the presidency. It is perfectly in keeping with George W. Bush’s unstinting effort to appeal to the world’s Muslims at every opportunity.

In early 2002, Bush initiated the first annual Iftar dinner at the White House, to break the Ramadan fast. Fifty ambassadors and clerics from Muslim nations were in attendance when the Crusading Cowboy said, “America is made better by millions of Muslim citizens,” and, “America has close and important relations with many Islamic nations. So it is fitting for America to honor your friendship and the traditions of a great faith by hosting this Iftar at the White House,” and “So tonight we are reminded of God’s greatness and His commandments to live in peace and to help neighbors in need. According to Muslim teachings, God first revealed His word in the holy Qur’an to the Prophet Muhammad during the month of Ramadan. That word has guided billions of believers across the centuries, and those believers built a culture of learning and literature and science.”

In ways both formal and informal, the last president reiterated his belief in the respectability and wonder of Islam too many times to count. For all the talk of Obama-Clinton envoy diplomacy, Bush, the stubborn unilateralist, put together the first U.S. envoy to deal directly with the Organization of the Islamic Conference, “to listen and to learn from representatives from Muslim states.”

Instead of extending an open hand for Iranian leaders to chop off, George W. Bush appealed directly to Iran’s pro-democracy movement. “The Iranian government must listen to the voices of those who long for freedom,” he said in a 2004 speech, adding, “We stand strongly with those who demand freedom.”

There are two main differences between Bush’s Muslim outreach and Obama’s ambidirectional variety. First, as a man in whose life faith plays a central role, Bush could simply appeal to Muslims as members of an Abrahamic religion. He didn’t gild the lily, as Obama does, by condescending to one “great culture” after another, and citing the universal peace dreams of tyrants. Second, Bush never thought embracing the world’s peaceful Muslims was a substitute for threatening, or using, force against the world’s less peaceful Muslims. He knew that saying nice things was less important than doing necessary things. When it comes to Iran, there’s no indication that Obama sees a difference between the two.

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He’s not in the Connect the Dots Business

Chris Dodd is under fire. Lots and lots of it. To his credit, unlike Harry Reid, he’s not running from the media. But maybe he should not be so forthcoming:

“The administration sought changes in [executive compensation rules],” Dodd told reporters outside his office Thursday. “At the time they seemed, at least in one case, relatively technical to me, having no connection whatsoever to the AIG issue. So we agreed to a couple of those changes in order to preserve the amendment.”

“Had there been any connection at the time or any notification that somehow this was involved with AIG we would have rejected that entirely,” he said. “But at the time that was not the connection.”

Well, yes, “AIG” didn’t appear in the legislation. But he knows about AIG and he presumably understood the language was crafted to allow government-rescued firms to keep paying certain bonuses. So he just didn’t put two and two together, or understand the potential implications of what he was doing — allowing very troubled firms on the public dole to give out potentially embarrassing bonuses. Quite a defense.

This report from Politico comes as no surprise:

Republican Senate candidate Rob Simmons said Sen. Chris Dodd (D-Conn.) has “failed in his oversight duties” as chairman of the Senate Banking Committee for allowing a legislative loophole into the stimulus bill that allowed AIG to expend bonus money.

The role of luck in politics is vastly underrated. And Rob Simmons is one lucky guy.

Chris Dodd is under fire. Lots and lots of it. To his credit, unlike Harry Reid, he’s not running from the media. But maybe he should not be so forthcoming:

“The administration sought changes in [executive compensation rules],” Dodd told reporters outside his office Thursday. “At the time they seemed, at least in one case, relatively technical to me, having no connection whatsoever to the AIG issue. So we agreed to a couple of those changes in order to preserve the amendment.”

“Had there been any connection at the time or any notification that somehow this was involved with AIG we would have rejected that entirely,” he said. “But at the time that was not the connection.”

Well, yes, “AIG” didn’t appear in the legislation. But he knows about AIG and he presumably understood the language was crafted to allow government-rescued firms to keep paying certain bonuses. So he just didn’t put two and two together, or understand the potential implications of what he was doing — allowing very troubled firms on the public dole to give out potentially embarrassing bonuses. Quite a defense.

This report from Politico comes as no surprise:

Republican Senate candidate Rob Simmons said Sen. Chris Dodd (D-Conn.) has “failed in his oversight duties” as chairman of the Senate Banking Committee for allowing a legislative loophole into the stimulus bill that allowed AIG to expend bonus money.

The role of luck in politics is vastly underrated. And Rob Simmons is one lucky guy.

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An Opening for Ayman Nour?

On Wednesday, I interviewed Egyptian opposition leader Ayman Nour, who was released from prison last month.  During our discussion, Nour mentioned that an Egyptian court had recognized him as leader of the liberal democratic Ghad party.  In turn, the court had reversed previous rulings that awarded the Ghad chairmanship to businessman Moussa Moustafa Moussa — a government-backed puppet who was propped up to split the party into irrelevance.

Egyptian pro-democracy activists are hailing the court’s decision, hopeful that it will allow Nour to resume his political career.  “It shows that judges in Egypt are sometimes independent,” one prominent blogger told me.

Yet a few major obstacles still stand in Nour’s way.  First, Moussa is trying to use the regime’s institutions to circumvent the court’s decision.  In an interview on Wednesday, Moussa said he had appealed to the Shura Council‘s Committee on Party Issues, which is chaired by Hosni Mubarak’s own National Democratic Party and is responsible for approving political parties.  The committee’s decision is due on March 31st, and there is every reason to believe that the committee will rule in Moussa’s favor.  If this happens, it will put the regime directly in conflict with the courts — the kind of conflict the regime typically wins.

Second, even if the Committee on Party Issues improbably rules in his favor, Nour cannot legally run for president until the 2017 elections.  Under Egyptian law, anyone convicted of a felony is prohibited from running for six years after being released from prison, and the official reason for Nour’s imprisonment was his dubious conviction for forging signatures (such as his father-in-law’s!) on his party registration forms.  Nour has vowed to challenge this law, but his prospects for success appear exceedingly low.

Third, Nour is facing challenges from civil society organizations that have traditionally supported dissident movements.  In this vein, the Lawyers’ Syndicate — which was active in supporting last year’s April 6th protests against the Mubarak regime — removed Nour from its list of members earlier this week without giving a reason.  Indeed, it is unclear whether this action came as a consequence of regime pressure, though this seems likely.  Either way, the Syndicate’s decision closes off one critical venue to Nour as he tries to revive support for the Ghad party ahead of the 2011 presidential elections.

For these reasons, I would caution against optimism regarding the recent court ruling that recognized Nour as leader of the Ghad party.  Egypt’s recent history suggests that the Mubarak regime possesses many options against courts and politicians that challenge its authoritarianism.  And, for the moment, there is no reason to believe that the regime is prepared to back down.

On Wednesday, I interviewed Egyptian opposition leader Ayman Nour, who was released from prison last month.  During our discussion, Nour mentioned that an Egyptian court had recognized him as leader of the liberal democratic Ghad party.  In turn, the court had reversed previous rulings that awarded the Ghad chairmanship to businessman Moussa Moustafa Moussa — a government-backed puppet who was propped up to split the party into irrelevance.

Egyptian pro-democracy activists are hailing the court’s decision, hopeful that it will allow Nour to resume his political career.  “It shows that judges in Egypt are sometimes independent,” one prominent blogger told me.

Yet a few major obstacles still stand in Nour’s way.  First, Moussa is trying to use the regime’s institutions to circumvent the court’s decision.  In an interview on Wednesday, Moussa said he had appealed to the Shura Council‘s Committee on Party Issues, which is chaired by Hosni Mubarak’s own National Democratic Party and is responsible for approving political parties.  The committee’s decision is due on March 31st, and there is every reason to believe that the committee will rule in Moussa’s favor.  If this happens, it will put the regime directly in conflict with the courts — the kind of conflict the regime typically wins.

Second, even if the Committee on Party Issues improbably rules in his favor, Nour cannot legally run for president until the 2017 elections.  Under Egyptian law, anyone convicted of a felony is prohibited from running for six years after being released from prison, and the official reason for Nour’s imprisonment was his dubious conviction for forging signatures (such as his father-in-law’s!) on his party registration forms.  Nour has vowed to challenge this law, but his prospects for success appear exceedingly low.

Third, Nour is facing challenges from civil society organizations that have traditionally supported dissident movements.  In this vein, the Lawyers’ Syndicate — which was active in supporting last year’s April 6th protests against the Mubarak regime — removed Nour from its list of members earlier this week without giving a reason.  Indeed, it is unclear whether this action came as a consequence of regime pressure, though this seems likely.  Either way, the Syndicate’s decision closes off one critical venue to Nour as he tries to revive support for the Ghad party ahead of the 2011 presidential elections.

For these reasons, I would caution against optimism regarding the recent court ruling that recognized Nour as leader of the Ghad party.  Egypt’s recent history suggests that the Mubarak regime possesses many options against courts and politicians that challenge its authoritarianism.  And, for the moment, there is no reason to believe that the regime is prepared to back down.

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Get Real

After his last column critical of the Obama administration David Brooks was visited by four “top administration” figures — sort of like a Dickens’s tale without the period set design and costumes. Now he is certainly going to get a visitation from a flock of spin doctors after complaining that the president is taking his eye off the ball:

The president of the United States has decided to address this crisis while simultaneously tackling the four most complicated problems facing the nation: health care, energy, immigration and education. Why he has not also decided to spend his evenings mastering quantum mechanics and discovering the origins of consciousness is beyond me.

The results of this overload are evident on Capitol Hill. The banking plan is incomplete, and there is zero political will to pay for it. The president’s budget is being nibbled to death. The revenue ideas are dying one by one, while the spending ideas expand. By the latest estimate, the health care approach will cost $1.5 trillion over 10 years and the national debt will at least double, while the Chinese publicly complain about picking up the tab.

There is, I think, a problem of expectations here. Implicit in this criticism is the notion that if the president didn’t have such a darned inquisitive mind and such wonderful ideas for rearranging our lives he could use all that brainpower and economic expertise, point his brainy team in the right direction and solve the financial mess.

Does this week give anyone a sense that there are oodles of economic smarts and financial acumen floating around the administration waiting to be pointed in the right direction? Do we really think the president has accumulated the best and the brightest talent for this task?

It is a bit hard to understand how a relatively small item like the AIG bonuses got to be such a mess. None of the usual excuses apply here. It took a while, but we found one that can’t be fobbed off on George W. Bush. This is not an overly complicated issue (i.e. how to balance reasonable compensation with political appearances). This was not even one involving huge sums of money or complex financial instruments.

So we are left with the suspicion that if this was beyond the administration’s collective abilities, then those really hard and complex questions may not be subject to resolution anytime soon. It just might be that the president is filling up his day with summitry and basketball brackets, among other things, because he and his current crop of advisers simply don’t have a clue about the really big financial problems. So it’s understandable that the president might want to master quantum mechanics — or run off to California.

After his last column critical of the Obama administration David Brooks was visited by four “top administration” figures — sort of like a Dickens’s tale without the period set design and costumes. Now he is certainly going to get a visitation from a flock of spin doctors after complaining that the president is taking his eye off the ball:

The president of the United States has decided to address this crisis while simultaneously tackling the four most complicated problems facing the nation: health care, energy, immigration and education. Why he has not also decided to spend his evenings mastering quantum mechanics and discovering the origins of consciousness is beyond me.

The results of this overload are evident on Capitol Hill. The banking plan is incomplete, and there is zero political will to pay for it. The president’s budget is being nibbled to death. The revenue ideas are dying one by one, while the spending ideas expand. By the latest estimate, the health care approach will cost $1.5 trillion over 10 years and the national debt will at least double, while the Chinese publicly complain about picking up the tab.

There is, I think, a problem of expectations here. Implicit in this criticism is the notion that if the president didn’t have such a darned inquisitive mind and such wonderful ideas for rearranging our lives he could use all that brainpower and economic expertise, point his brainy team in the right direction and solve the financial mess.

Does this week give anyone a sense that there are oodles of economic smarts and financial acumen floating around the administration waiting to be pointed in the right direction? Do we really think the president has accumulated the best and the brightest talent for this task?

It is a bit hard to understand how a relatively small item like the AIG bonuses got to be such a mess. None of the usual excuses apply here. It took a while, but we found one that can’t be fobbed off on George W. Bush. This is not an overly complicated issue (i.e. how to balance reasonable compensation with political appearances). This was not even one involving huge sums of money or complex financial instruments.

So we are left with the suspicion that if this was beyond the administration’s collective abilities, then those really hard and complex questions may not be subject to resolution anytime soon. It just might be that the president is filling up his day with summitry and basketball brackets, among other things, because he and his current crop of advisers simply don’t have a clue about the really big financial problems. So it’s understandable that the president might want to master quantum mechanics — or run off to California.

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Bayoneting the Wounded

Well, it looks like those companies who took federal bailout money are learning an old lesson: When you take the king’s gold, you play the king’s tune.

Congress, outraged that employees of companies they feel they bought and paid for are getting bonuses, are moving to impose hefty taxes — as high as 100% — on those bonuses. Never mind that the bonuses were allowed under the very bailout laws Congress itself passed.

Wednesday, AIG’s chairman, Ed Liddy, spent most of his day not trying to salvage the tattered giant, but sitting on Capitol Hill getting excoriated by members of Congress for his choice to honor legally-binding employment contracts and not refuse to pay legally-obligated bonuses.

It is imperative to note that Mr. Liddy was not even part of AIG when the ruinous decisions and actions were taken. He was retired when the federal government brought him in — for the annual salary of $1.00 — to try to keep the company from complete and utter collapse.

Had I been Mr. Liddy, I would have entered the hearing room with a single dollar bill in my shirt pocket. And when the lambasting got more than I could stand, I would state “I didn’t seek this job, you sought me,” return my salary, and walk out.

In AIG’s case, the bonuses do rankle a bit. How does one justify them?

Well, for starters, most of the people who brought the company down have left the company. Those still working in the divisions that caused the problems are working to stem the hemorrhaging in preparation for amputation. They are in jobs that hold no future; the bonuses and whatnot are to keep them from just walking out.

Other companies that took federal bailout money are now seeing that money from the federal government comes with strings attached. They have added to their old management structure a whole new set of bosses: 535 members of Congress, many of whom have never run any kind of business.

And if getting their way means passing laws that violate — at least in spirit — the Constitutional prohibitions against ex post facto laws (you can’t make things illegal retroactively) and bills of attainder (you can’t write a law that punishes an individual or a specific group), then so be it. If they choose to publicly flog you and make it clear they have no faith or confidence in you, you take it. If they second-guess your every move and deride your decisions and make dire threats for doing what they disapprove of, too bad.

You do all this because they can’t only fire you. They can strip you of your legally-contracted payments (including bonus and severance packages), and they can destroy your reputation.

That is the risk you run when you go to the federal government, hat in hand.  Those are the strings — or chains — that come attached to government money.

The kings and queens of Capitol Hill are calling the tune. Those who took their gold must play it, or suffer.

And those of us who fill the coffers of the government can only watch and weep, for we are the ones who coronated them.

Well, it looks like those companies who took federal bailout money are learning an old lesson: When you take the king’s gold, you play the king’s tune.

Congress, outraged that employees of companies they feel they bought and paid for are getting bonuses, are moving to impose hefty taxes — as high as 100% — on those bonuses. Never mind that the bonuses were allowed under the very bailout laws Congress itself passed.

Wednesday, AIG’s chairman, Ed Liddy, spent most of his day not trying to salvage the tattered giant, but sitting on Capitol Hill getting excoriated by members of Congress for his choice to honor legally-binding employment contracts and not refuse to pay legally-obligated bonuses.

It is imperative to note that Mr. Liddy was not even part of AIG when the ruinous decisions and actions were taken. He was retired when the federal government brought him in — for the annual salary of $1.00 — to try to keep the company from complete and utter collapse.

Had I been Mr. Liddy, I would have entered the hearing room with a single dollar bill in my shirt pocket. And when the lambasting got more than I could stand, I would state “I didn’t seek this job, you sought me,” return my salary, and walk out.

In AIG’s case, the bonuses do rankle a bit. How does one justify them?

Well, for starters, most of the people who brought the company down have left the company. Those still working in the divisions that caused the problems are working to stem the hemorrhaging in preparation for amputation. They are in jobs that hold no future; the bonuses and whatnot are to keep them from just walking out.

Other companies that took federal bailout money are now seeing that money from the federal government comes with strings attached. They have added to their old management structure a whole new set of bosses: 535 members of Congress, many of whom have never run any kind of business.

And if getting their way means passing laws that violate — at least in spirit — the Constitutional prohibitions against ex post facto laws (you can’t make things illegal retroactively) and bills of attainder (you can’t write a law that punishes an individual or a specific group), then so be it. If they choose to publicly flog you and make it clear they have no faith or confidence in you, you take it. If they second-guess your every move and deride your decisions and make dire threats for doing what they disapprove of, too bad.

You do all this because they can’t only fire you. They can strip you of your legally-contracted payments (including bonus and severance packages), and they can destroy your reputation.

That is the risk you run when you go to the federal government, hat in hand.  Those are the strings — or chains — that come attached to government money.

The kings and queens of Capitol Hill are calling the tune. Those who took their gold must play it, or suffer.

And those of us who fill the coffers of the government can only watch and weep, for we are the ones who coronated them.

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Card Check Dance

The good news for the pro-card check forces is that the entire country is absorbed by the AIG debacle. Otherwise the public, or at least the punditocracy, might focus on the worst legislative initiative rollout in memory. The Arlen Specter saga has become a story within a story. After much buzzing, Specter  says he isn’t leaving the Republican Party. And as for the heavy-handed offer from Big Labor — support card check and he gets the unions’ nod and their independent financing — even wishful pro-Big Labor bloggers are worried that this gambit could backfire . But really, anyone who thinks his vote on this (or much of anything else) is “safe” is engaged in wishful thinking.

Meanwhile, card check works its way around the country as a looming issue. Is card check a “defining issue” in the Virginia gubernatorial race? If the Republican candidate has his way, it will be. Sooner or later the Democrats in that race, as in others, are going to make clear what their position is.

I suspect this is going to drift off into the atmosphere for awhile — if the Democrats have their way. So far the notion that a relatively obscure piece of labor legislation could be raced through Congress, catching conservatives and business groups unaware, has proven to be wrong. Republicans, however, seem happy to keep the issue alive — so long as there is no immediate chance it will pass.

The good news for the pro-card check forces is that the entire country is absorbed by the AIG debacle. Otherwise the public, or at least the punditocracy, might focus on the worst legislative initiative rollout in memory. The Arlen Specter saga has become a story within a story. After much buzzing, Specter  says he isn’t leaving the Republican Party. And as for the heavy-handed offer from Big Labor — support card check and he gets the unions’ nod and their independent financing — even wishful pro-Big Labor bloggers are worried that this gambit could backfire . But really, anyone who thinks his vote on this (or much of anything else) is “safe” is engaged in wishful thinking.

Meanwhile, card check works its way around the country as a looming issue. Is card check a “defining issue” in the Virginia gubernatorial race? If the Republican candidate has his way, it will be. Sooner or later the Democrats in that race, as in others, are going to make clear what their position is.

I suspect this is going to drift off into the atmosphere for awhile — if the Democrats have their way. So far the notion that a relatively obscure piece of labor legislation could be raced through Congress, catching conservatives and business groups unaware, has proven to be wrong. Republicans, however, seem happy to keep the issue alive — so long as there is no immediate chance it will pass.

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An Israel Reality Check

According to the New York Times, Israel is “facing its worst diplomatic crisis in two decades.” And, as always, we learn, “The issue of a Palestinian state is central to Israel’s reputation abroad, because so many governments and international organizations favor its establishment in the West Bank, Gaza and East Jerusalem.”

And so, one more time, it seems necessary to point out several historical facts, starting with this one: if so many governments, international organizations, and Arab nations have such a profound interest in a Palestinian homeland, why didn’t they work together to grant one to Palestinians when they had the opportunity? From 1948 through 1967, neither Jordan nor Egypt made any effort to establish a Palestinian state in either the West Bank or the Gaza strip. In fact, the Jordanians were in conflict with Yasser Arafat in the 1970s, with King Hussein eventually expelling him and Palestinians from Jordan. And of course the PLO was founded in 1964, three years before Israel controlled the West Bank or Gaza. Israel was targeted for destruction long before the “occupied territories” and settlements ever became an issue. And the bloodiest wars in the Middle East have been intra-Arab and intra-Arab-Persian conflicts (like the Iraq-Iran war).

And more: in 2000, Israeli Prime Minister Ehud Barak offered the Palestinians their cherished homeland; Arafat responded by declaring a second intifada. The Israelis did in 2005 (in Gaza) what no other nation — Arab or non-Arab — has ever done: allow Palestinians the chance for self-rule. In return for this unilateral concession, Israel found itself on the receiving end of thousands of rockets and mortar attacks.

The Times begins its story by reminding us that Israel’s founding idea, Zionism, was branded as racism by the United Nations General Assembly in 1975. One can do no better than recall the words of the late, great Daniel Patrick Moynihan, who was then the U.S. Ambassador to the United Nations when he said this: “The United States rises to declare before the General Assembly of the UN, and before the world, that it does not acknowledge, it will not abide by, it will never acquiesce in this infamous act.”

On the matter raised in the Times‘s story about the need for Israel to “re-brand” itself: perhaps Israel could become a democratic and lawful nation. But I guess it already is. Perhaps it could grant its Arabs full citizenship, the right to vote, and the right to serve in Israel’s Parliament. But I guess that’s already the case. Perhaps Israel could grant its Arab citizens more rights and freedoms than Arabs living in Arab countries enjoy. Come to think of it, Israel already does. Perhaps Israel could take extraordinary steps to avoid killing innocent civilians in war instead of using them as human shields. But I guess it already is. Perhaps it could create a thriving civil society and entrepreneurial spirit. But I guess it already has.

Maybe the problem isn’t a matter of “re-branding.” Maybe the problem exists only in the heads of those who hate Israel for irrational and prejudicial reasons.

The founding of Israel in 1948 was one of the greatest historical moments we have ever witnessed; its flourishing over the years is a source of amazement and encouragement. America, we can only hope, will keep faith with the Jewish state, even if other nations in the world — many of them home to barbaric and lawless regimes — don’t.

According to the New York Times, Israel is “facing its worst diplomatic crisis in two decades.” And, as always, we learn, “The issue of a Palestinian state is central to Israel’s reputation abroad, because so many governments and international organizations favor its establishment in the West Bank, Gaza and East Jerusalem.”

And so, one more time, it seems necessary to point out several historical facts, starting with this one: if so many governments, international organizations, and Arab nations have such a profound interest in a Palestinian homeland, why didn’t they work together to grant one to Palestinians when they had the opportunity? From 1948 through 1967, neither Jordan nor Egypt made any effort to establish a Palestinian state in either the West Bank or the Gaza strip. In fact, the Jordanians were in conflict with Yasser Arafat in the 1970s, with King Hussein eventually expelling him and Palestinians from Jordan. And of course the PLO was founded in 1964, three years before Israel controlled the West Bank or Gaza. Israel was targeted for destruction long before the “occupied territories” and settlements ever became an issue. And the bloodiest wars in the Middle East have been intra-Arab and intra-Arab-Persian conflicts (like the Iraq-Iran war).

And more: in 2000, Israeli Prime Minister Ehud Barak offered the Palestinians their cherished homeland; Arafat responded by declaring a second intifada. The Israelis did in 2005 (in Gaza) what no other nation — Arab or non-Arab — has ever done: allow Palestinians the chance for self-rule. In return for this unilateral concession, Israel found itself on the receiving end of thousands of rockets and mortar attacks.

The Times begins its story by reminding us that Israel’s founding idea, Zionism, was branded as racism by the United Nations General Assembly in 1975. One can do no better than recall the words of the late, great Daniel Patrick Moynihan, who was then the U.S. Ambassador to the United Nations when he said this: “The United States rises to declare before the General Assembly of the UN, and before the world, that it does not acknowledge, it will not abide by, it will never acquiesce in this infamous act.”

On the matter raised in the Times‘s story about the need for Israel to “re-brand” itself: perhaps Israel could become a democratic and lawful nation. But I guess it already is. Perhaps it could grant its Arabs full citizenship, the right to vote, and the right to serve in Israel’s Parliament. But I guess that’s already the case. Perhaps Israel could grant its Arab citizens more rights and freedoms than Arabs living in Arab countries enjoy. Come to think of it, Israel already does. Perhaps Israel could take extraordinary steps to avoid killing innocent civilians in war instead of using them as human shields. But I guess it already is. Perhaps it could create a thriving civil society and entrepreneurial spirit. But I guess it already has.

Maybe the problem isn’t a matter of “re-branding.” Maybe the problem exists only in the heads of those who hate Israel for irrational and prejudicial reasons.

The founding of Israel in 1948 was one of the greatest historical moments we have ever witnessed; its flourishing over the years is a source of amazement and encouragement. America, we can only hope, will keep faith with the Jewish state, even if other nations in the world — many of them home to barbaric and lawless regimes — don’t.

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Flotsam and Jetsam

Definitely not comedy gold: Obama insults the disabled on the Tonight Show. When it rains it pours.

Keith Olbermann worries what “we” should do about it. Hmm, nothing like that ferocious independent media.

Don’t blame the teleprompter.

If he was “stunned” to find out about the bonuses, wait until the president finds out Tim Geithner asked for the legislative loophole to protect them.

Okay, not a good idea to have Charlie Rangel talking about taxes and violating the public trust.

The Washington Post editors don’t much care for anyone’s conduct: “Yesterday, the House had the feel of a mob scene. . Rather than bringing reason to the debate, President Obama has stoked the anger, and last night, the White House commented favorably on the House action.” But then on a late night comedy show the president said all that anger was a bad idea. Glad we’ve put away “childish things”?

Eugene Robinson has a nagging suspicion that Tim Geithner doesn’t “get it.” No! Couldn’t be. Not since Alexander Hamilton. . .

I wonder if mainstream media support for the stimulus plan is draining.

Gerald Seib has it right on the lesson of the the AIG bonuses: “the government by and large has no business owning and running businesses — and it is the majority owner of AIG. The cultures of the public and private sectors are simply too different.” So where is the exit strategy?

Rupert Murdoch’s must-read speech includes this: “I do not pretend to have all the answers to Gaza this evening. But I do know this: The free world makes a terrible mistake if we deceive ourselves into thinking this is not our fight. In the end, the Israeli people are fighting the same enemy we are: cold-blooded killers who reject peace, who reject freedom and who rule by the suicide vest, the car bomb and the human shield.”

Will CBO give Kent Conrad and other Red state Democrats the ammunition they need to overhaul Obama’s budget? Right now the administration is low on credibility so it might be an opportune time for fiscal conservatives to strike.

Ross Baker: “I want to know who, in the Obama Administration, was responsible for the proposal to compel combat-wounded veterans to use their private insurance to pay hospital and rehabilitation costs.  . . It was a move that even the Clinton Administration wouldn’t have tried in their worst anti-military snit. . . If you can vet people for non-payment of taxes, you should also vet them for stupidity.” Well, then Washington would be a ghost town.

Is the AIG vortex going to suck in Richard Holbrooke? It is sort of like a sci-fi movie wreaking havoc and gobbling up anything in its path.

And it’s headed for the NY-20 race.

Clearly, it is taking its toll on Chris Dodd: “The fierce reaction back in his home state, however, underscores the peril the usually politically invulnerable senator faces.In dozens of interviews, residents said they were appalled by Mr. Dodd’s ties to financial firms and believed that he had damaged himself as he prepares to run for re-election next year. Even some who have been steadfast supporters worry that after 28 years in the Senate, Mr. Dodd, 64, has been seduced by the power of Washington and grown distant from his constituents in this heavily Democratic state, which has been hit hard by the economic downturn.”

Or maybe, as Tom Maguire points out, it’s just a “distraction” — to anyone getting their JournoList talking point of the day.

Michael Gerson is on to something: “‘I’ll take responsibility,’ says the president — before, in the next few breaths, explaining, ‘We didn’t grant these contracts.’ And, ‘We’ve got a lot on our plate.’ And, ‘It’s my job to make sure that we fix these messes, even if I don’t make them.’ So Obama seems to be saying: I’ll take credit for taking the blame for something that is entirely the fault of others. Positively Clintonian.”

Exactly right: “‘Meet the Press’ is now the de facto safe show on Sunday morning – ‘safe,’ that is, for those being interviewed. [David]Gregory has been handed perhaps the most important program in television journalism.  It’s time to start acting like the king who rules wisely yet ruthlessly.”

If you thought those AIG bonuses were undeserved, you’re probably not going to think much of the ones paid to Freddie Mac and Fannie Mae execs. A helpful analysis is here.

Definitely not comedy gold: Obama insults the disabled on the Tonight Show. When it rains it pours.

Keith Olbermann worries what “we” should do about it. Hmm, nothing like that ferocious independent media.

Don’t blame the teleprompter.

If he was “stunned” to find out about the bonuses, wait until the president finds out Tim Geithner asked for the legislative loophole to protect them.

Okay, not a good idea to have Charlie Rangel talking about taxes and violating the public trust.

The Washington Post editors don’t much care for anyone’s conduct: “Yesterday, the House had the feel of a mob scene. . Rather than bringing reason to the debate, President Obama has stoked the anger, and last night, the White House commented favorably on the House action.” But then on a late night comedy show the president said all that anger was a bad idea. Glad we’ve put away “childish things”?

Eugene Robinson has a nagging suspicion that Tim Geithner doesn’t “get it.” No! Couldn’t be. Not since Alexander Hamilton. . .

I wonder if mainstream media support for the stimulus plan is draining.

Gerald Seib has it right on the lesson of the the AIG bonuses: “the government by and large has no business owning and running businesses — and it is the majority owner of AIG. The cultures of the public and private sectors are simply too different.” So where is the exit strategy?

Rupert Murdoch’s must-read speech includes this: “I do not pretend to have all the answers to Gaza this evening. But I do know this: The free world makes a terrible mistake if we deceive ourselves into thinking this is not our fight. In the end, the Israeli people are fighting the same enemy we are: cold-blooded killers who reject peace, who reject freedom and who rule by the suicide vest, the car bomb and the human shield.”

Will CBO give Kent Conrad and other Red state Democrats the ammunition they need to overhaul Obama’s budget? Right now the administration is low on credibility so it might be an opportune time for fiscal conservatives to strike.

Ross Baker: “I want to know who, in the Obama Administration, was responsible for the proposal to compel combat-wounded veterans to use their private insurance to pay hospital and rehabilitation costs.  . . It was a move that even the Clinton Administration wouldn’t have tried in their worst anti-military snit. . . If you can vet people for non-payment of taxes, you should also vet them for stupidity.” Well, then Washington would be a ghost town.

Is the AIG vortex going to suck in Richard Holbrooke? It is sort of like a sci-fi movie wreaking havoc and gobbling up anything in its path.

And it’s headed for the NY-20 race.

Clearly, it is taking its toll on Chris Dodd: “The fierce reaction back in his home state, however, underscores the peril the usually politically invulnerable senator faces.In dozens of interviews, residents said they were appalled by Mr. Dodd’s ties to financial firms and believed that he had damaged himself as he prepares to run for re-election next year. Even some who have been steadfast supporters worry that after 28 years in the Senate, Mr. Dodd, 64, has been seduced by the power of Washington and grown distant from his constituents in this heavily Democratic state, which has been hit hard by the economic downturn.”

Or maybe, as Tom Maguire points out, it’s just a “distraction” — to anyone getting their JournoList talking point of the day.

Michael Gerson is on to something: “‘I’ll take responsibility,’ says the president — before, in the next few breaths, explaining, ‘We didn’t grant these contracts.’ And, ‘We’ve got a lot on our plate.’ And, ‘It’s my job to make sure that we fix these messes, even if I don’t make them.’ So Obama seems to be saying: I’ll take credit for taking the blame for something that is entirely the fault of others. Positively Clintonian.”

Exactly right: “‘Meet the Press’ is now the de facto safe show on Sunday morning – ‘safe,’ that is, for those being interviewed. [David]Gregory has been handed perhaps the most important program in television journalism.  It’s time to start acting like the king who rules wisely yet ruthlessly.”

If you thought those AIG bonuses were undeserved, you’re probably not going to think much of the ones paid to Freddie Mac and Fannie Mae execs. A helpful analysis is here.

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