Commentary Magazine


Posts For: March 23, 2009

Thank Goodness for the Obama Administration’s Thorough Vetting Process

I had dinner last week with a former student who worked for Obama’s campaign and now, like millions of others, is in town to try to land an administration job.  His complaint was that the administration’s vetting procedures were so thorough that they were slowing him up, a complaint that made me choke on the excellent Pomerol we’d ordered.

I thought of his complaint again today, when a friend pointed out an interesting item in the February 26, 2009, New York Review of Books: a petition calling on the U.S. to withdraw immediately and totally from Afghanistan.  One signatory, predictably, was Norman Finkelstein.  Another, equally predictably, was Chas Freeman.  That petition was published weeks before Freeman’s name was put forward as the arbiter of U.S. intelligence assessments.   Now, naturally, it would never for a moment compromise Freeman’s objectivity that his self-declared political opinions are wildly at odds with those of the administration he sought to join.  Nor is there anything even slightly unseemly about a candidate for such a position publicly stating preferences that would immediately put him at partisan odds with the President.  Nor, of course, need we wonder at the fact that Freeman found himself politically at home with a conspiracy theorist like Finkelstein.

But I do have to wonder about those vetting procedures.  Freeman wanted the job, but it seems unlikely that he informed the administration of his publicly-expressed views.  And amazingly, no one in the administration noticed them.  The press doesn’t get a pass here: it’s astonishing that this publicly-available petition wasn’t immediately brought up as a reason why he was profoundly unsuited for the intelligence job.

Of course, all that may be too generous.  Perhaps it’s not true that no one in the administration noticed his views about their policy.  Perhaps, instead, they noticed and didn’t care.  In that case, we have to ask not about the competence of their vetting process, but about the sincerity of their commitment to the war in Afghanistan.

I had dinner last week with a former student who worked for Obama’s campaign and now, like millions of others, is in town to try to land an administration job.  His complaint was that the administration’s vetting procedures were so thorough that they were slowing him up, a complaint that made me choke on the excellent Pomerol we’d ordered.

I thought of his complaint again today, when a friend pointed out an interesting item in the February 26, 2009, New York Review of Books: a petition calling on the U.S. to withdraw immediately and totally from Afghanistan.  One signatory, predictably, was Norman Finkelstein.  Another, equally predictably, was Chas Freeman.  That petition was published weeks before Freeman’s name was put forward as the arbiter of U.S. intelligence assessments.   Now, naturally, it would never for a moment compromise Freeman’s objectivity that his self-declared political opinions are wildly at odds with those of the administration he sought to join.  Nor is there anything even slightly unseemly about a candidate for such a position publicly stating preferences that would immediately put him at partisan odds with the President.  Nor, of course, need we wonder at the fact that Freeman found himself politically at home with a conspiracy theorist like Finkelstein.

But I do have to wonder about those vetting procedures.  Freeman wanted the job, but it seems unlikely that he informed the administration of his publicly-expressed views.  And amazingly, no one in the administration noticed them.  The press doesn’t get a pass here: it’s astonishing that this publicly-available petition wasn’t immediately brought up as a reason why he was profoundly unsuited for the intelligence job.

Of course, all that may be too generous.  Perhaps it’s not true that no one in the administration noticed his views about their policy.  Perhaps, instead, they noticed and didn’t care.  In that case, we have to ask not about the competence of their vetting process, but about the sincerity of their commitment to the war in Afghanistan.

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Commentary of the Day

David S. Mazel, on Jennifer Rubin:

All these numbers are truly astounding and, frankly, they are hard to fathom. How can one understand a trillion dollars, not to mention multi-trillions of dollars?

A million is somewhat understandable, after all, many houses cost several hundred thousand, so a million is within a person’s thinking. A billion, though, is a thousand times (not addition) a million. That’s a pretty big number. Now, we talk about trillions; that’s a thousand billions, or a million millions. Those numbers, clearly, are beyond a person’s comprehension. People can talk about them, but who can say they have a intuitive notion of them? No one because no one deals with them in any personal way.

(By the way, a mathematics journal I read notes that mathematicians cannot fathom such numbers either. These sorts of numbers are simply out of our everyday thoughts and lives.)

Why is this important?

Because as we talk about these numbers, we should bear in mind that people listening cannot understand, cannot feel, what these numbers truly represent. I certainly cannot.

So, here’s a proposal: How about if we all start talking not only about trillions, but what, for example, an additional “federal deficit [of] $2.3 trillion more over 10 years” would mean to each of us. In fact, it would behoove everyone if this were done. Then we could debate the costs more intelligently and more viscerally than we do now.

So far, these numbers are too abstract, too distant to mean much. It would be great if we started to say what they mean to us and how they would affect each of us. (Sometimes I miss Ross Perot who, with his charts and tables, explained issues so everyone would understand.)

David S. Mazel, on Jennifer Rubin:

All these numbers are truly astounding and, frankly, they are hard to fathom. How can one understand a trillion dollars, not to mention multi-trillions of dollars?

A million is somewhat understandable, after all, many houses cost several hundred thousand, so a million is within a person’s thinking. A billion, though, is a thousand times (not addition) a million. That’s a pretty big number. Now, we talk about trillions; that’s a thousand billions, or a million millions. Those numbers, clearly, are beyond a person’s comprehension. People can talk about them, but who can say they have a intuitive notion of them? No one because no one deals with them in any personal way.

(By the way, a mathematics journal I read notes that mathematicians cannot fathom such numbers either. These sorts of numbers are simply out of our everyday thoughts and lives.)

Why is this important?

Because as we talk about these numbers, we should bear in mind that people listening cannot understand, cannot feel, what these numbers truly represent. I certainly cannot.

So, here’s a proposal: How about if we all start talking not only about trillions, but what, for example, an additional “federal deficit [of] $2.3 trillion more over 10 years” would mean to each of us. In fact, it would behoove everyone if this were done. Then we could debate the costs more intelligently and more viscerally than we do now.

So far, these numbers are too abstract, too distant to mean much. It would be great if we started to say what they mean to us and how they would affect each of us. (Sometimes I miss Ross Perot who, with his charts and tables, explained issues so everyone would understand.)

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Back to Square One

Over the weekend, three retailers, aided by Clintonista Lanny Davis, floated an alternative to the Employee Free Choice Act (EFCA). They nixed the idea of doing away with the secret ballot as well as the proposal for mandatory government arbitration, but they did recycle some language about helping unions organize (e.g. give them access to the employer’s property, shorten the time for election, etc.).

Not unexpectedly, Davis gets no buy-in from Big Labor or business groups. Making clear he’s not interested in any variation of the plan that will take away the secret ballot or impose mandatory arbitration, he nevertheless claims support from 20 senators — who probably see the thin gruel he is peddling as a way to get both sides off their backs.

This sort of approach reminds me of the lyric from My Fair Lady –”so rather than do either you do something else that neither likes at all.” I don’t see Davis’s idea going anywhere. Big Labor can’t possibly cave in this quickly and employers who think they are winning the PR battle have no reason to compromise right now. The pro-EFCA check-forces, having discovered just how negative the three retailers were, have gone mum on the retailers’ proposed compromise.

Over the weekend, three retailers, aided by Clintonista Lanny Davis, floated an alternative to the Employee Free Choice Act (EFCA). They nixed the idea of doing away with the secret ballot as well as the proposal for mandatory government arbitration, but they did recycle some language about helping unions organize (e.g. give them access to the employer’s property, shorten the time for election, etc.).

Not unexpectedly, Davis gets no buy-in from Big Labor or business groups. Making clear he’s not interested in any variation of the plan that will take away the secret ballot or impose mandatory arbitration, he nevertheless claims support from 20 senators — who probably see the thin gruel he is peddling as a way to get both sides off their backs.

This sort of approach reminds me of the lyric from My Fair Lady –”so rather than do either you do something else that neither likes at all.” I don’t see Davis’s idea going anywhere. Big Labor can’t possibly cave in this quickly and employers who think they are winning the PR battle have no reason to compromise right now. The pro-EFCA check-forces, having discovered just how negative the three retailers were, have gone mum on the retailers’ proposed compromise.

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No, Roger Cohen, No!

The New York Times has an op-ed by Roger Cohen today about the future of American Middle East policy under Barack Obama. To start with the end, Cohen concludes that

Obama’s new Middle Eastern diplomacy and engagement will involve reining in Israeli bellicosity and a probable cooling of U.S.-Israeli relations. It’s about time. America’s Israel-can-do-no-wrong policy has been disastrous, not least for Israel’s long-term security.

I always love it when certain Americans advocate the “cooling of U.S.-Israeli relations” as a way of advancing “Israel’s long-term security.” It’s usually a pretty clear flag that the writer is engaging in transparent demagoguery. Cohen’s main thesis is that Iran no longer should be isolated, threatened, or in any way excluded by America. On the contrary, Cohen has discovered that “confrontational American high-handedness has been a disaster; that facile analogies between the Iranian regime and the Nazis dishonor six million victims of the Holocaust; that the regime’s provocative rhetoric masks essential pragmatism; and that the best way to help a young, stability-favoring population toward the reform they seek is through engagement.”

What led him to this conclusion? “I was in Iran in January and February.” He spent time there, and spoke to people there, and this is what they said.

Why does this sound so familiar? Probably because it’s exactly what people who visited the Soviet Union a generation ago tended to say. Yet to take this position with Iran today requires a far greater degree of naivete, if only because (a) Iran is much smaller, and (b) the West has already seen through the Cold War to its end. Ah yes — experience, you ruthless spoiler!

To make his case, Cohen is forced to take a position against none other than Shimon Peres, Israel’s President and no lackey of Netanyahu. Peres, who can be accused of many things but not of deafness to the dream of normalization and peacemaking with tyrants, said in a speech to the Iranian people that he hoped they would rise up and topple a regime led by “a handful of religious fanatics.”

This is the wrong way, says Cohen.

The basic problem with his approach, however, is that it really does not matter what people tell you after a two-month visit to a nasty enemy country. Inevitably you will be told you’re making a grave error by isolating, defaming, dishonoring, and alienating their people. And the more successful a confrontational policy is, the more they will tell you to knock it off.

But to believe them — to “go native” as the diplomats say — is to ignore the logic of the regime in question. Other than Israel’s democracy, the Middle East has three kinds of regimes. There are those whose legitimacy is based on monarchy. They tend to be stable and at least carry the pretense of moderation over the long haul. Then there are one-man personality cults, such as Nasser in Egypt or Qaddafi in Libya. These can often be bought, given the right combination of carrots and sticks. Finally you have the ideological revolutionary regimes, the Baathists, the Palestinian nationalists, and Islamic fundamentalists.

Such regimes can moderate or reform a bit at the margins, but will never switch sides when fighting you is the core of their ideology. And since fighting you is always at the core of their ideology, as long as you are a Western democracy, any signal you give them for friendship inevitably ends up being interpreted as a sign of weakness, a proof that the revolution can win. It does not weaken the regime, it strengthens it.
Perhaps a victory for reformists in the Iranian election in June will slow down the nuclear weapons project. But to think that any government under the ayatollahs will cease to be a source of violence, terror, and anti-Western hatred, is to misunderstand the core of their beliefs.

Some day, the Iranians may well replace their regime, as they did a generation ago. When they do, they will find a great deal of support from the democratic West. They know that, even if they don’t say it to Roger Cohen.

The New York Times has an op-ed by Roger Cohen today about the future of American Middle East policy under Barack Obama. To start with the end, Cohen concludes that

Obama’s new Middle Eastern diplomacy and engagement will involve reining in Israeli bellicosity and a probable cooling of U.S.-Israeli relations. It’s about time. America’s Israel-can-do-no-wrong policy has been disastrous, not least for Israel’s long-term security.

I always love it when certain Americans advocate the “cooling of U.S.-Israeli relations” as a way of advancing “Israel’s long-term security.” It’s usually a pretty clear flag that the writer is engaging in transparent demagoguery. Cohen’s main thesis is that Iran no longer should be isolated, threatened, or in any way excluded by America. On the contrary, Cohen has discovered that “confrontational American high-handedness has been a disaster; that facile analogies between the Iranian regime and the Nazis dishonor six million victims of the Holocaust; that the regime’s provocative rhetoric masks essential pragmatism; and that the best way to help a young, stability-favoring population toward the reform they seek is through engagement.”

What led him to this conclusion? “I was in Iran in January and February.” He spent time there, and spoke to people there, and this is what they said.

Why does this sound so familiar? Probably because it’s exactly what people who visited the Soviet Union a generation ago tended to say. Yet to take this position with Iran today requires a far greater degree of naivete, if only because (a) Iran is much smaller, and (b) the West has already seen through the Cold War to its end. Ah yes — experience, you ruthless spoiler!

To make his case, Cohen is forced to take a position against none other than Shimon Peres, Israel’s President and no lackey of Netanyahu. Peres, who can be accused of many things but not of deafness to the dream of normalization and peacemaking with tyrants, said in a speech to the Iranian people that he hoped they would rise up and topple a regime led by “a handful of religious fanatics.”

This is the wrong way, says Cohen.

The basic problem with his approach, however, is that it really does not matter what people tell you after a two-month visit to a nasty enemy country. Inevitably you will be told you’re making a grave error by isolating, defaming, dishonoring, and alienating their people. And the more successful a confrontational policy is, the more they will tell you to knock it off.

But to believe them — to “go native” as the diplomats say — is to ignore the logic of the regime in question. Other than Israel’s democracy, the Middle East has three kinds of regimes. There are those whose legitimacy is based on monarchy. They tend to be stable and at least carry the pretense of moderation over the long haul. Then there are one-man personality cults, such as Nasser in Egypt or Qaddafi in Libya. These can often be bought, given the right combination of carrots and sticks. Finally you have the ideological revolutionary regimes, the Baathists, the Palestinian nationalists, and Islamic fundamentalists.

Such regimes can moderate or reform a bit at the margins, but will never switch sides when fighting you is the core of their ideology. And since fighting you is always at the core of their ideology, as long as you are a Western democracy, any signal you give them for friendship inevitably ends up being interpreted as a sign of weakness, a proof that the revolution can win. It does not weaken the regime, it strengthens it.
Perhaps a victory for reformists in the Iranian election in June will slow down the nuclear weapons project. But to think that any government under the ayatollahs will cease to be a source of violence, terror, and anti-Western hatred, is to misunderstand the core of their beliefs.

Some day, the Iranians may well replace their regime, as they did a generation ago. When they do, they will find a great deal of support from the democratic West. They know that, even if they don’t say it to Roger Cohen.

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A Detour in South Africa’s Long Walk to Freedom

Today brings the disappointing news that the government of South Africa has denied a visa to the Dalai Lama, who was planning to visit next year for a peace conference associated with the World Cup. The event is being organized by three South African Nobel Laureates: former Presidents Nelson Mandela and FW de Klerk, and Archbishop Desmond Tutu. Tutu has announced his decision to back out of the conference due to the government’s action, saying that, “We are shamelessly succumbing to Chinese pressure.”

If only the explanation was so simple. Contrary to Tutu’s assertion, the South African government came out with a statement claiming that China had no role to play in its decision. If true, that makes this episode even more disturbing. Normally when these sorts of choices are made to appease Chinese demands, it’s due to China’s economic leverage over the country in question. But in the Chinese-South African trading relationship the South Africans are hardly the weaker party. Exchange with South Africa represents 20.8% of China’s trade on the entire African continent, putting South Africa in a strong position to say “no” to the inevitable Chinese complaint that arises whenever the Dalai Lama travels anywhere.

There doesn’t need to be an economic rationale for this decision, as South Africa’s relationship with China is deeper than the desire for mere lucre. As I’ve written before, the foreign policy of post-apartheid South Africa has taken on a disturbingly anti-Western and Third-Worldist tone. While the African National Congress has adopted many free market economic policies that angered the populist segments of its broad coalition, on foreign policy it has hewed closely to the “anti-imperialist” precepts espoused by its intellectual leaders — almost all of whom were Soviet-sympathizing leftists who formed close relationships with revolutionary movements around the world. It is for this reason that the ANC is so virulently anti-Israel and supportive of Robert Mugabe, to take just two pressing international controversies. This frame of thinking perceives the United States and European powers as colonialist, while seeing China — whose record in Africa over the past decade is far closer to “imperialism” than than that of the United States — as the savior of the continent.

This latest episode once again reveals the startling hypocrisy of the ANC, which for some 40 years was sustained by the solidarity it earned internationally. Banned in South Africa and with its leaders either in jail or exile, the ANC set up offices around the world and appealed to governments, NGOs, and people of good conscience to join the fight against apartheid. It successfully pressured governments to boycott South Africa economically, and ironically, in international sporting venues as well. The ANC could never have ended apartheid on its own; for most of its history it was a battered and weakened organization that lived off the generosity and sympathy of friends abroad. It says something sad about the legacy of the anti-apartheid movement when the very same people who rightly insisted that to ignore their pleas was to be complicit in a crime against humanity have turned their back on another’s struggle for freedom.

Today brings the disappointing news that the government of South Africa has denied a visa to the Dalai Lama, who was planning to visit next year for a peace conference associated with the World Cup. The event is being organized by three South African Nobel Laureates: former Presidents Nelson Mandela and FW de Klerk, and Archbishop Desmond Tutu. Tutu has announced his decision to back out of the conference due to the government’s action, saying that, “We are shamelessly succumbing to Chinese pressure.”

If only the explanation was so simple. Contrary to Tutu’s assertion, the South African government came out with a statement claiming that China had no role to play in its decision. If true, that makes this episode even more disturbing. Normally when these sorts of choices are made to appease Chinese demands, it’s due to China’s economic leverage over the country in question. But in the Chinese-South African trading relationship the South Africans are hardly the weaker party. Exchange with South Africa represents 20.8% of China’s trade on the entire African continent, putting South Africa in a strong position to say “no” to the inevitable Chinese complaint that arises whenever the Dalai Lama travels anywhere.

There doesn’t need to be an economic rationale for this decision, as South Africa’s relationship with China is deeper than the desire for mere lucre. As I’ve written before, the foreign policy of post-apartheid South Africa has taken on a disturbingly anti-Western and Third-Worldist tone. While the African National Congress has adopted many free market economic policies that angered the populist segments of its broad coalition, on foreign policy it has hewed closely to the “anti-imperialist” precepts espoused by its intellectual leaders — almost all of whom were Soviet-sympathizing leftists who formed close relationships with revolutionary movements around the world. It is for this reason that the ANC is so virulently anti-Israel and supportive of Robert Mugabe, to take just two pressing international controversies. This frame of thinking perceives the United States and European powers as colonialist, while seeing China — whose record in Africa over the past decade is far closer to “imperialism” than than that of the United States — as the savior of the continent.

This latest episode once again reveals the startling hypocrisy of the ANC, which for some 40 years was sustained by the solidarity it earned internationally. Banned in South Africa and with its leaders either in jail or exile, the ANC set up offices around the world and appealed to governments, NGOs, and people of good conscience to join the fight against apartheid. It successfully pressured governments to boycott South Africa economically, and ironically, in international sporting venues as well. The ANC could never have ended apartheid on its own; for most of its history it was a battered and weakened organization that lived off the generosity and sympathy of friends abroad. It says something sad about the legacy of the anti-apartheid movement when the very same people who rightly insisted that to ignore their pleas was to be complicit in a crime against humanity have turned their back on another’s struggle for freedom.

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He Wants to Do What?

The Wall Street Journal editors have had enough:

President Obama’s 2010 budget looks more astounding by the day, especially when someone other than the White House budget office is analyzing it. The latest case of epic sticker shock came Friday when the Congressional Budget Office published its assessment, which found that the proposals would increase the federal deficit by $2.3 trillion more over 10 years than the White House had claimed.

Hey, what’s a little rounding error among friends?

Mr. Obama keeps saying he has “inherited a trillion dollar deficit,” which is true. But he’s hardly an innocent bystander. CBO shows that the President is seeing that $1 trillion and raising it again and again, as far as the eye can see. In only two months, since the last CBO budget review in January, Democrats have passed laws that increase spending by $134 billion in the last six months of this fiscal year alone, and $1.2 trillion over the next 10 years. And that’s all before his 2010 budget proposals.

Lost in the torch and pitchfork display over the AIG bonuses (totaling a whole $165 million, which used to be a lot of money but isn’t anymore) was the administration’s enormous fiscal irresponsibility, which CBO has now clarified for all who are interested. The numbers are staggering:

This year’s deficit will hit 13.1% of GDP and next year’s will still be at 9.6%, assuming a healthy recovery, and then never get below 4.1% for the entire decade. These deficits assume the passage of Mr. Obama’s enormous tax increases in 2011 and $629 billion in new cap-and-tax carbon revenues. The share of debt held by the public will double — to 82.4% in 2019 from 40.8% in 2008.

So the Congress has two choices: enable this leap into fiscal madness, or try to put on the brakes.  As Judd Gregg declared, that the budget may “bankrupt” the country. Aside from inflating our currency there simply is no way to manage a debt as large as what would result from Obama’s budget plan.

The most critical question for Congress is not, then, how much anger to channel or whether Chris Dodd or Tim Geithner is the culprit in the AIG bonus mess. It is whether  they will “slow down this express train to a European welfare state.” On that issue the country’s economic future will turn.

The Wall Street Journal editors have had enough:

President Obama’s 2010 budget looks more astounding by the day, especially when someone other than the White House budget office is analyzing it. The latest case of epic sticker shock came Friday when the Congressional Budget Office published its assessment, which found that the proposals would increase the federal deficit by $2.3 trillion more over 10 years than the White House had claimed.

Hey, what’s a little rounding error among friends?

Mr. Obama keeps saying he has “inherited a trillion dollar deficit,” which is true. But he’s hardly an innocent bystander. CBO shows that the President is seeing that $1 trillion and raising it again and again, as far as the eye can see. In only two months, since the last CBO budget review in January, Democrats have passed laws that increase spending by $134 billion in the last six months of this fiscal year alone, and $1.2 trillion over the next 10 years. And that’s all before his 2010 budget proposals.

Lost in the torch and pitchfork display over the AIG bonuses (totaling a whole $165 million, which used to be a lot of money but isn’t anymore) was the administration’s enormous fiscal irresponsibility, which CBO has now clarified for all who are interested. The numbers are staggering:

This year’s deficit will hit 13.1% of GDP and next year’s will still be at 9.6%, assuming a healthy recovery, and then never get below 4.1% for the entire decade. These deficits assume the passage of Mr. Obama’s enormous tax increases in 2011 and $629 billion in new cap-and-tax carbon revenues. The share of debt held by the public will double — to 82.4% in 2019 from 40.8% in 2008.

So the Congress has two choices: enable this leap into fiscal madness, or try to put on the brakes.  As Judd Gregg declared, that the budget may “bankrupt” the country. Aside from inflating our currency there simply is no way to manage a debt as large as what would result from Obama’s budget plan.

The most critical question for Congress is not, then, how much anger to channel or whether Chris Dodd or Tim Geithner is the culprit in the AIG bonus mess. It is whether  they will “slow down this express train to a European welfare state.” On that issue the country’s economic future will turn.

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Afghanistan Action Plan

I don’t often look for political wisdom from NPR reporters but Sarah Chayes is no ordinary NPR reporter.  Actually she’s now an ex-NPR reporter and, as her website makes clear, she has developed on-the-ground familiarity with Afghanistan matched by few Westerners:

Sarah Chayes has been living and working in Kandahar, Afghanistan since 2001, when she covered the fall of the Taliban for National Public Radio. In 2002 she decided to leave journalism to help rebuild the shattered country, whose fate will help determine the shape of the 21st century.  Currently she runs a cooperative in the former Taliban stronghold, producing fine skin-care products from local fruits, nuts, and botanicals.

Thus when she presents an “action plan” for Afghanistan, it’s worth paying attention. Her plan concentrates mainly on governmental and economic development because, as she rightly points out, creating a working government and peaceful society in Afghanistan is a realistic goal: “For much of the past century, and certainly within living memory (1950s-1979), Afghanistan was governed from Kabul by a well-constituted and legitimate authority, which enjoyed monopoly of the use of force, wielded sophisticated judicial processes, both governmental and traditional, and fostered cultural dynamism and expanding civil liberties.”

To recreate what may be called Afghanistan’s golden age, she offers a number of good ideas.  I was particularly  impressed by these two:

– One of the most successful international programs in Afghanistan has been the embedded mentoring of the Afghan National Army by US and other NATO military officers. … The United States and its NATO allies should [now] provide trained mentors for government officials, not just at the ministerial level in Kabul, but especially in the provinces and municipalities, where Afghan people experience their government.”

– The political system built under international tutelage since the fall of the Taliban is bereft of effective checks and balances. Temporary, ad hoc mechanisms must be created to provide that function, while more robust and independent institutions develop. Every province or at least every regional command zone should have a joint committee for redress of grievances — a kind of ombudsman committee — made up of representatives from the battle group and PRT, the key donor agency, the lead country political advisor or diplomatic representative, an international law enforcement professional, and three to five Afghans of stature whose integrity and courage are prized by the community.

The whole plan is well worth reading and mulling over.

I don’t often look for political wisdom from NPR reporters but Sarah Chayes is no ordinary NPR reporter.  Actually she’s now an ex-NPR reporter and, as her website makes clear, she has developed on-the-ground familiarity with Afghanistan matched by few Westerners:

Sarah Chayes has been living and working in Kandahar, Afghanistan since 2001, when she covered the fall of the Taliban for National Public Radio. In 2002 she decided to leave journalism to help rebuild the shattered country, whose fate will help determine the shape of the 21st century.  Currently she runs a cooperative in the former Taliban stronghold, producing fine skin-care products from local fruits, nuts, and botanicals.

Thus when she presents an “action plan” for Afghanistan, it’s worth paying attention. Her plan concentrates mainly on governmental and economic development because, as she rightly points out, creating a working government and peaceful society in Afghanistan is a realistic goal: “For much of the past century, and certainly within living memory (1950s-1979), Afghanistan was governed from Kabul by a well-constituted and legitimate authority, which enjoyed monopoly of the use of force, wielded sophisticated judicial processes, both governmental and traditional, and fostered cultural dynamism and expanding civil liberties.”

To recreate what may be called Afghanistan’s golden age, she offers a number of good ideas.  I was particularly  impressed by these two:

– One of the most successful international programs in Afghanistan has been the embedded mentoring of the Afghan National Army by US and other NATO military officers. … The United States and its NATO allies should [now] provide trained mentors for government officials, not just at the ministerial level in Kabul, but especially in the provinces and municipalities, where Afghan people experience their government.”

– The political system built under international tutelage since the fall of the Taliban is bereft of effective checks and balances. Temporary, ad hoc mechanisms must be created to provide that function, while more robust and independent institutions develop. Every province or at least every regional command zone should have a joint committee for redress of grievances — a kind of ombudsman committee — made up of representatives from the battle group and PRT, the key donor agency, the lead country political advisor or diplomatic representative, an international law enforcement professional, and three to five Afghans of stature whose integrity and courage are prized by the community.

The whole plan is well worth reading and mulling over.

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The Blame Game

One of the primary strands in the AIG story is “Who knew what and when?” Chris Dodd has been fingered as the protector of AIG’s bonus plan. Then the blame shifted to Treasury, as details of the involvement of Tim Geithner and his aides came to surface. But what about the administration itself?

This article suggests Rahm Emanuel was intimately involved in the final negotiations. One Capitol Hill adviser tells me, “I don’t know if he signed off, but he was definitely in the room with Reid and Pelosi while they were finishing the stimulus bill.” So why does this matter?

For starters, it is a simple matter of honesty and, dare I say, transparency. Now that the White House is feigning a “stunned” reaction, voters have a right to know if the president’s right-hand man was instrumental in crafting the bonus protection language. If Dodd was leaned on by Emanuel, it does not lessen the former’s responsibility but it explains why a senior senator would agree to shield bonuses he suspected as problematic. That the White House is willing to hang Geithner out to dry on this debacle says something about the relationship between the two.

The president is perfecting the art of taking responsibility without taking responsibility. (Former Bush and McCain aide Nicole Wallace recounts: “CNN’s Jessica Yellin summed it up well: ‘Each time he takes responsibility, it’s followed with a but.’”) One of Obama’s primary claims was that his team didn’t draft the AIG contracts. But Geithner did structure the AIG bailout and it seems that both Geithner and Emanuel had plenty to do with determining how those bonuses were to be handled. Perhaps it is time for everyone to come clean.

One of the primary strands in the AIG story is “Who knew what and when?” Chris Dodd has been fingered as the protector of AIG’s bonus plan. Then the blame shifted to Treasury, as details of the involvement of Tim Geithner and his aides came to surface. But what about the administration itself?

This article suggests Rahm Emanuel was intimately involved in the final negotiations. One Capitol Hill adviser tells me, “I don’t know if he signed off, but he was definitely in the room with Reid and Pelosi while they were finishing the stimulus bill.” So why does this matter?

For starters, it is a simple matter of honesty and, dare I say, transparency. Now that the White House is feigning a “stunned” reaction, voters have a right to know if the president’s right-hand man was instrumental in crafting the bonus protection language. If Dodd was leaned on by Emanuel, it does not lessen the former’s responsibility but it explains why a senior senator would agree to shield bonuses he suspected as problematic. That the White House is willing to hang Geithner out to dry on this debacle says something about the relationship between the two.

The president is perfecting the art of taking responsibility without taking responsibility. (Former Bush and McCain aide Nicole Wallace recounts: “CNN’s Jessica Yellin summed it up well: ‘Each time he takes responsibility, it’s followed with a but.’”) One of Obama’s primary claims was that his team didn’t draft the AIG contracts. But Geithner did structure the AIG bailout and it seems that both Geithner and Emanuel had plenty to do with determining how those bonuses were to be handled. Perhaps it is time for everyone to come clean.

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Losing the Times

The New York Times carries a good deal more weight in Obamaland than it did within the Bush Administration. (It was a Times editorial that convinced Senator Daschle to withdraw his nomination as HHS Secretary, for example.) And so, as Politico.com pointed out, yesterday could not have been a good day for President Obama and his aides, particularly given the fawning coverage and commentary reserved for Obama in the past.

From columnist Frank Rich, we read this:

A charming visit with Jay Leno won’t fix it. A 90 percent tax on bankers’ bonuses won’t fix it. Firing Timothy Geithner won’t fix it. Unless and until Barack Obama addresses the full depth of Americans’ anger with his full arsenal of policy smarts and political gifts, his presidency and, worse, our economy will be paralyzed. It would be foolish to dismiss as hyperbole the stark warning delivered … in a letter to the editor published by The Times last week: “President Obama may not realize it yet, but his Katrina moment has arrived.”

From Maureen Dowd, this:

The tableau of Michelle Obama hoisting a pitchfork on Friday with her sinewy arms and warning that the commander in chief would be commandeered into yard work left me wondering if the wrong Obama is in the Oval.

From Tom Friedman, this:

I ran into an Indian businessman friend last week and he said something to me that really struck a chord: “This is the first time I’ve ever visited the United States when I feel like you’re acting like an immature democracy.” You know what he meant: We Americans are in a once-a-century financial crisis, and yet we’ve actually descended into politics worse than usual. There don’t seem to be any adults at the top — nobody acting larger than the moment, nobody being impelled by anything deeper than the last news cycle.

From the Times lead editorial, this:

But we did not expect that Mr. Obama, who addressed these issues [terrorism, prisoners, the rule of law and government secrecy] with such clarity during his campaign, would be sending such confused and mixed signals from the White House. Some of what the public has heard from the Obama administration on issues like state secrets and detainees sounds a bit too close for comfort to the Bush team’s benighted ideas.

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The New York Times carries a good deal more weight in Obamaland than it did within the Bush Administration. (It was a Times editorial that convinced Senator Daschle to withdraw his nomination as HHS Secretary, for example.) And so, as Politico.com pointed out, yesterday could not have been a good day for President Obama and his aides, particularly given the fawning coverage and commentary reserved for Obama in the past.

From columnist Frank Rich, we read this:

A charming visit with Jay Leno won’t fix it. A 90 percent tax on bankers’ bonuses won’t fix it. Firing Timothy Geithner won’t fix it. Unless and until Barack Obama addresses the full depth of Americans’ anger with his full arsenal of policy smarts and political gifts, his presidency and, worse, our economy will be paralyzed. It would be foolish to dismiss as hyperbole the stark warning delivered … in a letter to the editor published by The Times last week: “President Obama may not realize it yet, but his Katrina moment has arrived.”

From Maureen Dowd, this:

The tableau of Michelle Obama hoisting a pitchfork on Friday with her sinewy arms and warning that the commander in chief would be commandeered into yard work left me wondering if the wrong Obama is in the Oval.

From Tom Friedman, this:

I ran into an Indian businessman friend last week and he said something to me that really struck a chord: “This is the first time I’ve ever visited the United States when I feel like you’re acting like an immature democracy.” You know what he meant: We Americans are in a once-a-century financial crisis, and yet we’ve actually descended into politics worse than usual. There don’t seem to be any adults at the top — nobody acting larger than the moment, nobody being impelled by anything deeper than the last news cycle.

From the Times lead editorial, this:

But we did not expect that Mr. Obama, who addressed these issues [terrorism, prisoners, the rule of law and government secrecy] with such clarity during his campaign, would be sending such confused and mixed signals from the White House. Some of what the public has heard from the Obama administration on issues like state secrets and detainees sounds a bit too close for comfort to the Bush team’s benighted ideas.

And today, Paul Krugman weighs in with this:

Mr. Obama has apparently settled on a financial plan that, in essence, assumes that banks are fundamentally sound and that bankers know what they’re doing. It’s as if the president were determined to confirm the growing perception that he and his economic team are out of touch, that their economic vision is clouded by excessively close ties to Wall Street. And by the time Mr. Obama realizes that he needs to change course, his political capital may be gone.

These judgments are significant because they are coming from people who were once strong, even worshipful, Obama supporters. If this is how America’s new president is viewed in those precincts, it’s fair to say that Obama has a real and growing problem on his hands.

I have some sympathy for Team Obama. As many of us have been saying for a while now, governing is a lot harder than campaigning. I would hold off on making definitive judgments about Obama (or anyone else) just two months into an administration.

At the same time, there is no question that Obama’s first eight weeks in office have been rocky, and sometimes in politics a series of missteps metastasize into a durable impression. President Obama and his Administration are edging dangerously close to that point at neck-breaking speed. It’s never a good sign when your core supporters in the commentariet are beginning to turn on you: it influences the rest of the coverage, including television coverage, and alters the public’s perception over time.

The most important thing to remember is that events are what matter — and here, too, Obama can take little comfort so far. His priorities seem out of touch with the moment. He and his Treasury Secretary/economic team appear over-matched by events. At times they have even appeared clueless. Obama has deferred to Congressional Democrats to an astonishing degree, and we are seeing early signs of skittishness and concern from them about the President’s agenda. In a terribly damaging blow, the Congressional Budget Office’s report on Friday is projecting that Obama’s budget will produce annual deficits that would force the nation to borrow nearly $9.3 trillion over the next decade — $2.3 trillion more than what the President predicted when he unveiled his budget a few weeks ago. Regimes like Iran are mocking Obama’s efforts at outreach. Obama jettisoned almost immediately any serious effort to make good on his promises to transcend ideology and usher in an era of bipartisanship, ethics reform, the end of earmarks, and a “new politics” characterized by seriousness rather than pettiness, and candor rather than spin.

Right now things that were viewed as his strengths are beginning to transmute into weaknesses. He has unified the Republican Party in opposition to his radically liberal agenda. He’s losing the support of moderates. Various polls show the GOP drawing even with Democrats on the generic ballot. And Obama’s core supporters are either turning on him or beginning to hedge their bets. To think he’s only been President for just over two months. This can’t possibly be what he expected.

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Iraq: Obama’s Bright Spot

Imagine for a moment that you are George W. Bush. You switch on 60 Minutes last night and there is Barack Obama telling Steve Kroft, “Sometime my team talks about the fact that if you had said to us a year ago that the least of my problems would be Iraq . . .”

Strange, you think. The man who devoted his entire presidential campaign to running against you (even though you were not running against him); who took shots at you during his inauguration; who has, bizarrely, continued to run against you since taking office; whose only presidential triumphs so far have consisted of high-profile signed denunciations of your policies, has just acknowledged that the undertaking with which you are most closely associated — and for which you’ve been most brutally vilified — is  now the brightest star on his horizon.

One must remember that Barack Obama is not referring to the benefits of any change that he’s made in Iraq policy — because he hasn’t made any. He is saying that the Iraq War and the future U.S. commitment there, as outlined by the Bush and Maliki governments, have left him with the smoothest, most promising issue on his daily agenda. It turns out that with the heat of campaigning lifted, the Iraq War is finally acknowledged as what it is: a success.

Ironically, and tragically, Obama won’t use this as an issue around which to rally much needed American support. He has spent too long talking down the war to now cite it as an example of American endurance. But for the former president, sitting in Texas, this must have felt pretty good. No matter how many signing ceremonies are to follow.

Imagine for a moment that you are George W. Bush. You switch on 60 Minutes last night and there is Barack Obama telling Steve Kroft, “Sometime my team talks about the fact that if you had said to us a year ago that the least of my problems would be Iraq . . .”

Strange, you think. The man who devoted his entire presidential campaign to running against you (even though you were not running against him); who took shots at you during his inauguration; who has, bizarrely, continued to run against you since taking office; whose only presidential triumphs so far have consisted of high-profile signed denunciations of your policies, has just acknowledged that the undertaking with which you are most closely associated — and for which you’ve been most brutally vilified — is  now the brightest star on his horizon.

One must remember that Barack Obama is not referring to the benefits of any change that he’s made in Iraq policy — because he hasn’t made any. He is saying that the Iraq War and the future U.S. commitment there, as outlined by the Bush and Maliki governments, have left him with the smoothest, most promising issue on his daily agenda. It turns out that with the heat of campaigning lifted, the Iraq War is finally acknowledged as what it is: a success.

Ironically, and tragically, Obama won’t use this as an issue around which to rally much needed American support. He has spent too long talking down the war to now cite it as an example of American endurance. But for the former president, sitting in Texas, this must have felt pretty good. No matter how many signing ceremonies are to follow.

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Pitch Problems

As a candidate, Barack Obama got kudos for temperament — his coolness under stress was supposed to provide reassurance that we’d have a competent and commanding presence in the White House. Those days seem like a distant memory.

We’ve seen three extremes, none of which have garnered praise. First, Obama tried the the gloom-and-doom routine that was intended to lower expectations and help get his gargantuan stimulus plan through. Everyone from Bill Clinton to the Wall Street Journal editorial staff panned that approach, so it was promptly dropped.

Then, in the AIG flap, we saw the populist-angry-man routine. Susan Garment explains:

Presidential adviser David Axelrod, explaining why Mr. Obama supplanted Mr. Summers’s early statement about the bonuses with an angrier one, said that while Mr. Summers had to weigh the effect of the government’s actions on its ability to manage the financial system, “the president’s job is to speak for the country.”

That is deeply wrong. Precisely because the president speaks for the country, it is his job, and not just Mr. Summers’s job, to weigh the economic consequences of his words. The president’s job is not to express populist anger but to address the anger and talk sense to it.

And sure enough the White House has to reel that in to get on with the business of fixing the financial sector.

We also saw the comedian-in-chief. That got him in hot water with Jay Leno and prompted a rebuke from Steve Kroft:

“You’re sitting here. And you’re—you are laughing. You are laughing about some of these problems. Are people going to look at this and say, ‘I mean, he’s sitting there just making jokes about money—’ How do you deal with— I mean: explain. . .” Kroft asked at one point.

“Are you punch-drunk?” Kroft said.

“No, no. There’s gotta be a little gallows humor to get you through the day,” Obama said, with a laugh.

A regular laugh riot.

We don’t want a gloomy, angry, or wise-cracking president. We would like a sober and mature one. Perhaps he will try that persona next.

As a candidate, Barack Obama got kudos for temperament — his coolness under stress was supposed to provide reassurance that we’d have a competent and commanding presence in the White House. Those days seem like a distant memory.

We’ve seen three extremes, none of which have garnered praise. First, Obama tried the the gloom-and-doom routine that was intended to lower expectations and help get his gargantuan stimulus plan through. Everyone from Bill Clinton to the Wall Street Journal editorial staff panned that approach, so it was promptly dropped.

Then, in the AIG flap, we saw the populist-angry-man routine. Susan Garment explains:

Presidential adviser David Axelrod, explaining why Mr. Obama supplanted Mr. Summers’s early statement about the bonuses with an angrier one, said that while Mr. Summers had to weigh the effect of the government’s actions on its ability to manage the financial system, “the president’s job is to speak for the country.”

That is deeply wrong. Precisely because the president speaks for the country, it is his job, and not just Mr. Summers’s job, to weigh the economic consequences of his words. The president’s job is not to express populist anger but to address the anger and talk sense to it.

And sure enough the White House has to reel that in to get on with the business of fixing the financial sector.

We also saw the comedian-in-chief. That got him in hot water with Jay Leno and prompted a rebuke from Steve Kroft:

“You’re sitting here. And you’re—you are laughing. You are laughing about some of these problems. Are people going to look at this and say, ‘I mean, he’s sitting there just making jokes about money—’ How do you deal with— I mean: explain. . .” Kroft asked at one point.

“Are you punch-drunk?” Kroft said.

“No, no. There’s gotta be a little gallows humor to get you through the day,” Obama said, with a laugh.

A regular laugh riot.

We don’t want a gloomy, angry, or wise-cracking president. We would like a sober and mature one. Perhaps he will try that persona next.

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The Economic Contradictions of Obama-ism

On February 9th, President Obama visited Elkhart, Indiana, the American community with the country’s highest unemployment rate, 15.3 percent. (It had been only 4.7 percent the year before.) He was there to sell his stimulus bill, then moving through Congress and since signed. He noted that the bill would provide help for the workers who had lost their jobs and, more important, help them get their jobs back by reviving the economy.

The jobs that have vanished in Elkhart are predominantly in the recreational-vehicle industry, which is concentrated in the city of 52,000. With the severe recession the country is now experiencing, it is hardly surprising that this industry has been devastated. After all, an RV is expensive both to purchase and to operate and is hardly a necessity. But when the economy recovers, will those jobs come back as demand for RV’s returns? Or, in the meantime, will new environmental regulations championed by Obama work to impede the sales of vehicles that get only a few miles to the gallon and thereby make job growth in Elkhart an impossibility?

The latter seems to be the case. In its proposed budget for fiscal year 2010, the Obama administration has also said it would inaugurate a “cap-and-trade” program to reduce the emission of carbon dioxide into the atmosphere. This program would require all companies to buy at auction the right to emit the gas, which all fossil fuels-oil, gasoline, coal, natural gas, etc.-do, in varying amounts. The total amount of emissions allowed would be strictly limited.

Click here to read the rest of this SPECIAL PREVIEW from the April issue of COMMENTARY.

On February 9th, President Obama visited Elkhart, Indiana, the American community with the country’s highest unemployment rate, 15.3 percent. (It had been only 4.7 percent the year before.) He was there to sell his stimulus bill, then moving through Congress and since signed. He noted that the bill would provide help for the workers who had lost their jobs and, more important, help them get their jobs back by reviving the economy.

The jobs that have vanished in Elkhart are predominantly in the recreational-vehicle industry, which is concentrated in the city of 52,000. With the severe recession the country is now experiencing, it is hardly surprising that this industry has been devastated. After all, an RV is expensive both to purchase and to operate and is hardly a necessity. But when the economy recovers, will those jobs come back as demand for RV’s returns? Or, in the meantime, will new environmental regulations championed by Obama work to impede the sales of vehicles that get only a few miles to the gallon and thereby make job growth in Elkhart an impossibility?

The latter seems to be the case. In its proposed budget for fiscal year 2010, the Obama administration has also said it would inaugurate a “cap-and-trade” program to reduce the emission of carbon dioxide into the atmosphere. This program would require all companies to buy at auction the right to emit the gas, which all fossil fuels-oil, gasoline, coal, natural gas, etc.-do, in varying amounts. The total amount of emissions allowed would be strictly limited.

Click here to read the rest of this SPECIAL PREVIEW from the April issue of COMMENTARY.

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Too Big to Fail

Congress debated a very important subject this past week: how to regulate the financial industry in order to reduce what is called “systemic risk.” Although the debate was overshadowed by the flap over bonus payments at AIG, the insurance industry is playing an important behind-the-scenes role.

Senators Dodd and Shelby (respectively the Chairman and ranking minority member of the Finance Committee) are involved in the debate, but the key individual is Chairman Barney Frank of the House Financial Services Committee. Questions have been raised about the degree to which Dodd is even interested in the debate, and, as a Republican, Shelby hasn’t much of a voice anyway.

But Frank is engaged, highly knowledgeable, and determined to aggressively re-regulate the financial sector. The problem with Frank is that, as he disclosed in vivid public statements last week, he doesn’t trust private enterprise to get things right.

The insurance industry badly wants to escape new curbs on its activities from the ineluctable wave of new regulations Frank will lead. Insurance companies are regulated by the states rather than by the federal government. They don’t take deposits from the public so they escape the purview of the FDIC.

But the emergency bailout of AIG last September was engineered by the Federal Reserve, which is perhaps the only entity on earth that could conjure up an $85 billion credit line on a single day’s notice. Thus the question for Frank is which federal agency should be given the task of regulating systemic risk: the Fed? The SEC? The FDIC? All of the above? Some totally new, as yet uncreated agency?

Insurance-industry lobbyists have been making the case to Frank that he should find a way to manage systemic risk before he goes about regulating individual sectors of the financial industry. They want him to find a way to prevent coordinated collapses across many markets before he starts rewriting the rules for their industry.

But the lobbyists rolled snake-eyes this week, with the vicious flap over AIG. It’s perfectly clear insurance companies that participate heavily in the shadow banking system, contribute to systemic risk.

Many suppose we need to prevent financial companies from getting too big (and by extension, to prevent their employees from making unseemly amounts of money). If no one is allowed to become Too Big, then no one can become Too Big To Fail, and thus no future bailouts will be required.

But this ignores that systemic risk can arise when nearly every financial actor (large or small) makes a similar bet, in this case that mortgage-backed securities purchased with borrowed money would not collapse in value. There simply isn’t enough capital in the world to reserve against such a “meta-systemic” configuration of risk, especially when market liquidity disappears, as it reliably does in times of crisis.

To Barney Frank, the problem is designating a regulator for systemic risk so that he can get on with whatever will come next. But after he does so and declares the systemic-risk problem to be definitively solved, we’ll still be left with no one knowing what the next source of systemic risk will be.

Investors aren’t in business to lose money. They already know enough to avoid the specific errors that led to this crisis. But systemic risk is a built-in feature of highly-liquid financial markets, and it doesn’t disappear just because Congress says so. Naming a regulator simply papers over the fact that no one knows how to mitigate systemic risk, short of outlawing financial innovation altogether.

Congress debated a very important subject this past week: how to regulate the financial industry in order to reduce what is called “systemic risk.” Although the debate was overshadowed by the flap over bonus payments at AIG, the insurance industry is playing an important behind-the-scenes role.

Senators Dodd and Shelby (respectively the Chairman and ranking minority member of the Finance Committee) are involved in the debate, but the key individual is Chairman Barney Frank of the House Financial Services Committee. Questions have been raised about the degree to which Dodd is even interested in the debate, and, as a Republican, Shelby hasn’t much of a voice anyway.

But Frank is engaged, highly knowledgeable, and determined to aggressively re-regulate the financial sector. The problem with Frank is that, as he disclosed in vivid public statements last week, he doesn’t trust private enterprise to get things right.

The insurance industry badly wants to escape new curbs on its activities from the ineluctable wave of new regulations Frank will lead. Insurance companies are regulated by the states rather than by the federal government. They don’t take deposits from the public so they escape the purview of the FDIC.

But the emergency bailout of AIG last September was engineered by the Federal Reserve, which is perhaps the only entity on earth that could conjure up an $85 billion credit line on a single day’s notice. Thus the question for Frank is which federal agency should be given the task of regulating systemic risk: the Fed? The SEC? The FDIC? All of the above? Some totally new, as yet uncreated agency?

Insurance-industry lobbyists have been making the case to Frank that he should find a way to manage systemic risk before he goes about regulating individual sectors of the financial industry. They want him to find a way to prevent coordinated collapses across many markets before he starts rewriting the rules for their industry.

But the lobbyists rolled snake-eyes this week, with the vicious flap over AIG. It’s perfectly clear insurance companies that participate heavily in the shadow banking system, contribute to systemic risk.

Many suppose we need to prevent financial companies from getting too big (and by extension, to prevent their employees from making unseemly amounts of money). If no one is allowed to become Too Big, then no one can become Too Big To Fail, and thus no future bailouts will be required.

But this ignores that systemic risk can arise when nearly every financial actor (large or small) makes a similar bet, in this case that mortgage-backed securities purchased with borrowed money would not collapse in value. There simply isn’t enough capital in the world to reserve against such a “meta-systemic” configuration of risk, especially when market liquidity disappears, as it reliably does in times of crisis.

To Barney Frank, the problem is designating a regulator for systemic risk so that he can get on with whatever will come next. But after he does so and declares the systemic-risk problem to be definitively solved, we’ll still be left with no one knowing what the next source of systemic risk will be.

Investors aren’t in business to lose money. They already know enough to avoid the specific errors that led to this crisis. But systemic risk is a built-in feature of highly-liquid financial markets, and it doesn’t disappear just because Congress says so. Naming a regulator simply papers over the fact that no one knows how to mitigate systemic risk, short of outlawing financial innovation altogether.

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Who Would Do This?

Tim Geithner is unveiling a public-private partnership to try to deal with the toxic assets still on the books of the nation’s banks. One wonders how a private component will change the central dilemma that has hobbled officials: how to price those assets.

But the administration and the financial hooligans in Congress made this entire enterprise a whole lot harder. The New York Times reports:

The plan relies on private investors to team up with the government to relieve banks of assets tied to loans and mortgage-linked securities of unknown value. There have been virtually no buyers of these assets because of their uncertain risk.
As part of the program, the government plans to offer subsidies, in the form of low-interest loans, to coax private funds to form partnerships with the government to buy troubled assets from banks.
But some executives at private equity firms and hedge funds, who were briefed on the plan Sunday afternoon, are anxious about the recent uproar over millions of dollars in bonus payments made to executives of the American International Group.
Some of them have told administration officials that they would participate only if the government guaranteed that it would not set compensation limits on the firms, according to people briefed on the conversations. The executives also expressed worries about whether disclosure and governance rules could be added retroactively to the program by Congress, these people said.

Honestly, wouldn’t you be stark raving mad to go into business these days with the investment firm of  Geithner, Rangel, Reid & Pelosi? Let’s say you’re the CEO of a hedge fund or another financial institution. You’ve watched AIG executives cowering in their homes as the mobs descend. You know that if you accept aid from the government every corporate expenditure and salary will now be fodder for the populist mob in Congress. You are expected to undertake all of that, plus the risk that the assets you are acquiring are of unknown value, to help out the Obama administration? It’s hard to imagine what CEO would do that.

Tim Geithner is unveiling a public-private partnership to try to deal with the toxic assets still on the books of the nation’s banks. One wonders how a private component will change the central dilemma that has hobbled officials: how to price those assets.

But the administration and the financial hooligans in Congress made this entire enterprise a whole lot harder. The New York Times reports:

The plan relies on private investors to team up with the government to relieve banks of assets tied to loans and mortgage-linked securities of unknown value. There have been virtually no buyers of these assets because of their uncertain risk.
As part of the program, the government plans to offer subsidies, in the form of low-interest loans, to coax private funds to form partnerships with the government to buy troubled assets from banks.
But some executives at private equity firms and hedge funds, who were briefed on the plan Sunday afternoon, are anxious about the recent uproar over millions of dollars in bonus payments made to executives of the American International Group.
Some of them have told administration officials that they would participate only if the government guaranteed that it would not set compensation limits on the firms, according to people briefed on the conversations. The executives also expressed worries about whether disclosure and governance rules could be added retroactively to the program by Congress, these people said.

Honestly, wouldn’t you be stark raving mad to go into business these days with the investment firm of  Geithner, Rangel, Reid & Pelosi? Let’s say you’re the CEO of a hedge fund or another financial institution. You’ve watched AIG executives cowering in their homes as the mobs descend. You know that if you accept aid from the government every corporate expenditure and salary will now be fodder for the populist mob in Congress. You are expected to undertake all of that, plus the risk that the assets you are acquiring are of unknown value, to help out the Obama administration? It’s hard to imagine what CEO would do that.

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Hey, Anybody Want Another AMT?

The Wall Street Journal today compares the House of Representatives’s action against corporate bonuses to the Smoot-Hawley tariff that effectively began the Great Depression. I have another analogy for you — the Alternative Minimum Tax. In 1969, the country became consumed with rage when it discovered that 155 millionaires had paid no income tax because they had successfully and within the bounds of the law arranged to lower their tax burden to zero. To ensure that this outrage would never again happen, Congress passed the Tax Reform Act of 1969–also known as the Millionaires’ Tax–which eliminated deductions for certain types of earners and instead placed the under a flat tax of 10 percent.

Well, here we are today, forty years later. And the separate tax system that was instituted to deal with 155 people has now grown to encompass somewhere between 10 and 20 percent of all taxpayers at a flat-tax rate approaching 27 percent. How did this happen? Originally, you could not be brought into the AMT if you had an income under $150,000. But that amount was not indexed to inflation. According to the Congressional Budget Office in 2004, “In 2010…one in five taxpayers will have AMT liability and nearly every married taxpayer with income between $100,000 and $500,000 will owe the alternative tax. Rather than affecting only high-income taxpayers who would otherwise pay no tax, the AMT has extended its reach to many upper-middle-income households. As an increasing number of taxpayers incur the AMT, pressures to reduce or eliminate the tax are likely to grow.” Congress acted to alleviate this specific scenario, but not by much. The AMT brings in too much money, it turns out, to be done away with.

For those captured by it — often freelancers and others who make their annual salaries outside the withholding system — the whole business is a nightmare, making calculations about home purchases and other deductible expenses nearly impossible.

So here we are today, with the House’s decision to tax bonuses handed out by companies that have received in excess of $5 billion in bailout money at a rate of 90 percent. The purpose here, as with the AMT, was to nail a few hundred bonus recipients at AIG. But as the AMT story indicates, legislation takes a life of its own after its passage, with consequences felt decades later by people who had nothing whatsoever to do with the populist offense that gave rise to the foolish law-writing in the first place.

Welcome back to 1969.

The Wall Street Journal today compares the House of Representatives’s action against corporate bonuses to the Smoot-Hawley tariff that effectively began the Great Depression. I have another analogy for you — the Alternative Minimum Tax. In 1969, the country became consumed with rage when it discovered that 155 millionaires had paid no income tax because they had successfully and within the bounds of the law arranged to lower their tax burden to zero. To ensure that this outrage would never again happen, Congress passed the Tax Reform Act of 1969–also known as the Millionaires’ Tax–which eliminated deductions for certain types of earners and instead placed the under a flat tax of 10 percent.

Well, here we are today, forty years later. And the separate tax system that was instituted to deal with 155 people has now grown to encompass somewhere between 10 and 20 percent of all taxpayers at a flat-tax rate approaching 27 percent. How did this happen? Originally, you could not be brought into the AMT if you had an income under $150,000. But that amount was not indexed to inflation. According to the Congressional Budget Office in 2004, “In 2010…one in five taxpayers will have AMT liability and nearly every married taxpayer with income between $100,000 and $500,000 will owe the alternative tax. Rather than affecting only high-income taxpayers who would otherwise pay no tax, the AMT has extended its reach to many upper-middle-income households. As an increasing number of taxpayers incur the AMT, pressures to reduce or eliminate the tax are likely to grow.” Congress acted to alleviate this specific scenario, but not by much. The AMT brings in too much money, it turns out, to be done away with.

For those captured by it — often freelancers and others who make their annual salaries outside the withholding system — the whole business is a nightmare, making calculations about home purchases and other deductible expenses nearly impossible.

So here we are today, with the House’s decision to tax bonuses handed out by companies that have received in excess of $5 billion in bailout money at a rate of 90 percent. The purpose here, as with the AMT, was to nail a few hundred bonus recipients at AIG. But as the AMT story indicates, legislation takes a life of its own after its passage, with consequences felt decades later by people who had nothing whatsoever to do with the populist offense that gave rise to the foolish law-writing in the first place.

Welcome back to 1969.

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Home Is Where You Hang Your Hat

Since certain vocal factions are interested in scrutinizing the homes of American citizens, perhaps we should consider the domestic arrangements of our lawmakers. Serving in Congress is an expensive proposition. Many members of Congress find that they have to maintain two separate homes — the first in their home state, the other near the Capitol. Congress is in session so much, it only makes sense to set up housekeeping in or around DC.

But the cost of living around DC can be quite high. Members of Congress have to find ways to save money wherever they can. One way they’ve found is to take advantage of a loophole in Maryland’s property tax and claim the “homestead” exception — a rule that lets one save on property taxes by declaring a home their “primary” residence. This lets them avoid the higher rates on second homes.

What defines a “primary” residence? Well, it’s the place where you spend most of your time living, the address you list for voting, driver’s license, and other official purposes. In recent years, several members of Congress have used this to economize — Representative Pete Stark (D-CA), Representative Eliot Engel (D-NY), and former Senator Tom Daschle (D-SD) all tried this. And Senator Ted Kennedy (D-MA) was among 22 Senators caught in 2005 trying to declare his Washington, DC home as his primary residence.

In most years, these homes are where these people spend the majority of their time. What’s the problem?

The Constitution of the United States.

On paper, the requirements for Congress are deceptively simple: to qualify as a Representative or Senator, one must be elected, be a certain age (25 for the House, 30 for the Senate), and — here’s the killer — be a resident of the state or district they represent. (Article I, Sections 2 and 3).

The instant these worthies all declared their primary residence outside of their home states, they disqualified themselves from office.

However, none of these worthies ever faced the true price for their error — loss of their seat. Instead, they were allowed to “amend” their tax filings and pay the difference, along with a penalty.

What would it take for some member of Congress to begin the expulsion process for those who resort to such chicanery to avoid paying “their fair share” of taxes? Why aren’t these tax cheats treated with the type of scorn and contempt heaped on, say, the executives of AIG?

Gee, couldn’t be because they have the right letter after their title, could it?

Nah.

Since certain vocal factions are interested in scrutinizing the homes of American citizens, perhaps we should consider the domestic arrangements of our lawmakers. Serving in Congress is an expensive proposition. Many members of Congress find that they have to maintain two separate homes — the first in their home state, the other near the Capitol. Congress is in session so much, it only makes sense to set up housekeeping in or around DC.

But the cost of living around DC can be quite high. Members of Congress have to find ways to save money wherever they can. One way they’ve found is to take advantage of a loophole in Maryland’s property tax and claim the “homestead” exception — a rule that lets one save on property taxes by declaring a home their “primary” residence. This lets them avoid the higher rates on second homes.

What defines a “primary” residence? Well, it’s the place where you spend most of your time living, the address you list for voting, driver’s license, and other official purposes. In recent years, several members of Congress have used this to economize — Representative Pete Stark (D-CA), Representative Eliot Engel (D-NY), and former Senator Tom Daschle (D-SD) all tried this. And Senator Ted Kennedy (D-MA) was among 22 Senators caught in 2005 trying to declare his Washington, DC home as his primary residence.

In most years, these homes are where these people spend the majority of their time. What’s the problem?

The Constitution of the United States.

On paper, the requirements for Congress are deceptively simple: to qualify as a Representative or Senator, one must be elected, be a certain age (25 for the House, 30 for the Senate), and — here’s the killer — be a resident of the state or district they represent. (Article I, Sections 2 and 3).

The instant these worthies all declared their primary residence outside of their home states, they disqualified themselves from office.

However, none of these worthies ever faced the true price for their error — loss of their seat. Instead, they were allowed to “amend” their tax filings and pay the difference, along with a penalty.

What would it take for some member of Congress to begin the expulsion process for those who resort to such chicanery to avoid paying “their fair share” of taxes? Why aren’t these tax cheats treated with the type of scorn and contempt heaped on, say, the executives of AIG?

Gee, couldn’t be because they have the right letter after their title, could it?

Nah.

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Surfer Dude as President?

On Fox News Sunday, Mara Liasson commented on the AIG bonus tax frenzy, calling it “a dangerous game to play”:

When you’re trying to surf a wave of popular anger — I think a lot of people in Congress, not just the president, said, “Look. We have to vent our outrage, show we identify with the American people, because otherwise we’ll get run over by this.”

I think what they’re hoping is now that this thing is going to the Senate, which is, you know, in the cliche, the saucer where these passions cool, that they can rein some of this stuff in.

This is a danger to two things. Number one, it’s going to make it — it was already almost impossible, now it’s going to make it completely impossible to go back to Congress for any more bank bailout money should they need it. And number two, it’s going to make it harder for them to do the number one job which is get these toxic assets off the banks’ books and get them lending again.

She’s right on both counts. But more important, this speaks volumes about the level of  presidential leadership we are witnessing. Is the president there just to surf populist anger ? Some might have hope he is actually there to lead, to demonstrate a degree of emotional and political maturity.

It was bad enough when he admitted to having been “stunned” by bonuses which his Treasury Secretary helped secure. But the real lapse was in play-acting anger to ingratiate himself with the mob and then cheering Congress along.  But wait. Now he appears to be reversing course. This is what he gets from an aide on a Sunday talk show:

“I think the president would be concerned that this [House] bill would have problems going too far,” said Jared Bernstein, chief economic adviser to Vice President Joe Biden. “That said, let’s see what comes out of the Senate.”

“He has not said he won’t sign that bill,” Bernstein added of the president’s position on the House surtax legislation.

Got that?  We are left to wonder what is next. We are witnessing a heretofore unique style of fickle presidential leadership. Emotions — real or feigned – rather than clear legislative direction rule the day. His mood swings in the space of forty-eight hours. And once again he is cast in the role of passive observer of Congressional action. None of this bodes well for the future.

On Fox News Sunday, Mara Liasson commented on the AIG bonus tax frenzy, calling it “a dangerous game to play”:

When you’re trying to surf a wave of popular anger — I think a lot of people in Congress, not just the president, said, “Look. We have to vent our outrage, show we identify with the American people, because otherwise we’ll get run over by this.”

I think what they’re hoping is now that this thing is going to the Senate, which is, you know, in the cliche, the saucer where these passions cool, that they can rein some of this stuff in.

This is a danger to two things. Number one, it’s going to make it — it was already almost impossible, now it’s going to make it completely impossible to go back to Congress for any more bank bailout money should they need it. And number two, it’s going to make it harder for them to do the number one job which is get these toxic assets off the banks’ books and get them lending again.

She’s right on both counts. But more important, this speaks volumes about the level of  presidential leadership we are witnessing. Is the president there just to surf populist anger ? Some might have hope he is actually there to lead, to demonstrate a degree of emotional and political maturity.

It was bad enough when he admitted to having been “stunned” by bonuses which his Treasury Secretary helped secure. But the real lapse was in play-acting anger to ingratiate himself with the mob and then cheering Congress along.  But wait. Now he appears to be reversing course. This is what he gets from an aide on a Sunday talk show:

“I think the president would be concerned that this [House] bill would have problems going too far,” said Jared Bernstein, chief economic adviser to Vice President Joe Biden. “That said, let’s see what comes out of the Senate.”

“He has not said he won’t sign that bill,” Bernstein added of the president’s position on the House surtax legislation.

Got that?  We are left to wonder what is next. We are witnessing a heretofore unique style of fickle presidential leadership. Emotions — real or feigned – rather than clear legislative direction rule the day. His mood swings in the space of forty-eight hours. And once again he is cast in the role of passive observer of Congressional action. None of this bodes well for the future.

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The Petraeus Model Won’t Work for Israel

Andrew Exum, founder of the fine counterinsurgency blog Abu Muqawama, wrote a short piece for the New York Times in which he suggested Israelis could learn something from Americans in Iraq and make a greater effort to reduce civilian casualties during future conflicts in Gaza and Lebanon.

“[I]t may be in the best interests of the dominant military actor to adhere to rules of engagement that go beyond the laws of land warfare and international conventions,” he wrote. “The time may arrive when Israel decides that highly kinetic, enemy-centric military operations do not necessarily serve Israel’s longer-term strategic aims. Instead, Israel may want to adopt lessons learned from the United States experience in Iraq and Afghanistan and place a higher emphasis on the prevention of civilian casualties at the expense of lethality and force protection.”

Israelis already go far out of their way to reduce civilian casualties, even when doing so puts the lives of their own soldiers at risk. Nevertheless, as Exum says, the Unites States goes even further. When General David Petraeus took over as commander in Iraq, protecting civilians from insurgent and terrorist violence was made top priority. The most effective way to protect the lives of American soldiers, it was decided,  was by first protecting the lives of Iraqi civilians. This, I believe, is what Exum is getting at. He’s a former U.S. Army captain in Iraq, and he knows what he’s talking about.

The Army’s new counterinsurgency manual explains why this works. “Ultimate success in COIN [counterinsurgency] is gained by protecting the populace, not the COIN force. If military forces remain in their compounds, they lose touch with the people, appear to be running scared, and cede the initiative to the insurgents. Aggressive saturation patrolling, ambushes, and listening post operations must be conducted, risk shared with the populace, and contact maintained…These practices ensure access to the intelligence needed to drive operations. Following them reinforces the connections with the populace that help establish real legitimacy.”

Read More

Andrew Exum, founder of the fine counterinsurgency blog Abu Muqawama, wrote a short piece for the New York Times in which he suggested Israelis could learn something from Americans in Iraq and make a greater effort to reduce civilian casualties during future conflicts in Gaza and Lebanon.

“[I]t may be in the best interests of the dominant military actor to adhere to rules of engagement that go beyond the laws of land warfare and international conventions,” he wrote. “The time may arrive when Israel decides that highly kinetic, enemy-centric military operations do not necessarily serve Israel’s longer-term strategic aims. Instead, Israel may want to adopt lessons learned from the United States experience in Iraq and Afghanistan and place a higher emphasis on the prevention of civilian casualties at the expense of lethality and force protection.”

Israelis already go far out of their way to reduce civilian casualties, even when doing so puts the lives of their own soldiers at risk. Nevertheless, as Exum says, the Unites States goes even further. When General David Petraeus took over as commander in Iraq, protecting civilians from insurgent and terrorist violence was made top priority. The most effective way to protect the lives of American soldiers, it was decided,  was by first protecting the lives of Iraqi civilians. This, I believe, is what Exum is getting at. He’s a former U.S. Army captain in Iraq, and he knows what he’s talking about.

The Army’s new counterinsurgency manual explains why this works. “Ultimate success in COIN [counterinsurgency] is gained by protecting the populace, not the COIN force. If military forces remain in their compounds, they lose touch with the people, appear to be running scared, and cede the initiative to the insurgents. Aggressive saturation patrolling, ambushes, and listening post operations must be conducted, risk shared with the populace, and contact maintained…These practices ensure access to the intelligence needed to drive operations. Following them reinforces the connections with the populace that help establish real legitimacy.”

David Kilcullen, an Australian counterinsurgency expert and advisor to General Petraeus, said something similar in an interview published in yesterday’s Washington Post when asked which lessons learned in Iraq can be applied in Afghanistan. “I would say there are three,” he said. “The first one is you’ve got to protect the population. Unless you make people feel safe, they won’t be willing to engage in unarmed politics. The second lesson is, once you’ve made people safe, you’ve got to focus on getting the population on your side and making them self-defending. And then a third lesson is, you’ve got to make a long-term commitment.”

Unfortunately, this won’t work in Gaza and Lebanon. At least it won’t work right now. Lebanese and Palestinian civilians don’t need nearly as much protection from Hezbollah and Hamas as Iraqis needed from Al Qaeda and sectarian death squads.

Hamas has been waging a murder and intimidation campaign against the rival Fatah party in Gaza, and Hezbollah violently seized West Beirut for a few days last May, but neither group wantonly massacres Palestinian or Lebanese civilians on a regular basis. Hamas is opposed by a significant number of Palestinians, and Hezbollah is met by even more resistance in Lebanon, but neither faces molten hatred from their own long-brutalized civilian population. General Petraeus’s strategy never would have worked if insurgents in Iraq resembled Hamas and Hezbollah and directed most of their violent energy against foreign enemies. General Petraeus effectively won the Iraq war because the enemy in Iraq killed more Iraqis than anyone else.

Plenty of Lebanese and Palestinians hate Hezbollah and Hamas, but they don’t worry they’ll be killed in a massacre of random civilians tomorrow. If Hamas exploded car bombs every day in downtown Gaza City, Israelis might have a shot at waging an American-style counterinsurgency. Palestinians might very well welcome the Israeli destruction of Hamas even if they still didn’t think much of Israel.

Anti-Israeli sentiment is much deeper and broader in Lebanon, the West Bank, and Gaza than anti-Americanism has ever been in Iraq. Israelis have no chance of getting the majority of Lebanese or, especially, Palestinians onto their side right now. They have little political capital in Lebanon, the West Bank, and Gaza, and they won’t be able to acquire much more no matter what they do under the present regional circumstances.

“It makes no sense to a Palestinian to think about a Palestinian state alongside Israel,” Martin Kramer from the Washington Institute for Near East Policy said to me a few months ago in Tel Aviv. “From the Palestinian perspective, Israel will always exist inside Palestine.”

America has never existed inside Iraq the way Israel exists “inside Palestine,” from the Palestinian point of view. No Iraqi thinks New York and Washington belong to Iraq, but a huge number of Palestinians believe Jerusalem and Tel Aviv should be incorporated into a Palestinian state. The Israeli-Palestinian conflict is the mother of all quagmires. It has been raging for more than sixty years now, with no end in sight, while the American-led war in Iraq is winding down after six.

Kilcullen’s third point, “you’ve got to make a long-term commitment,” is also critical here. There is almost no chance Israelis will make a long-term commitment in Gaza, and there’s even less chance they’ll do it in Lebanon. Hardly anyone in Israel is interested in reconquering Gaza. A long-term occupation of Lebanon is about as popular an idea in Israel as re-igniting the Vietnam War is inside the United States. Israelis likely don’t have the manpower for that even if they wanted to do it. Effective American-style counterinsurgency takes years to succeed.

None of this means Israelis shouldn’t continue to keep civilian casualties at a minimum, as long as their efforts don’t void their right and ability to defend themselves when attacked. Any reasonable person should hope to see fewer women and children killed in Gaza and Lebanon. The strongest case to be made here is on moral and ethical grounds. Israelis, to their credit, fret about killing innocents because it’s the right thing to do. They don’t gain much strategically or politically from it.

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Flotsam and Jetsam

Judd Gregg is on fire — warning about the president’s budget.

He’s got company: “Stung by popular anger over the AIG saga, several other Democratic senators have been quietly distancing themselves from the Obama team, suggesting it may have bitten off more than it can chew. Senator Daniel Inouye of Hawaii, chairman of the appropriations committee, said: ‘ To maintain a schedule like the one we’ve got at this moment, throughout the year, I don’t know if it will be healthy.’ Even Peter Orszag, Obama’s budget director, was obliged to concede that the CBO-projected deficits, if accurate, were ‘ultimately not sustainable.’”

Meanwhile, the adults in the Senate have decided the House has gone too far in taxing the AIG bonuses, as Budget Chairman Kent Conrad (D-N.D.) and Sen. Susan Collins (R-Maine) “both openly questioned the legality and effectiveness of the 90 percent surtax on bonuses approved by the House on Thursday. ‘I’ve got my doubts whether that’s the best way to do this,’ Conrad said. . . ‘I think there are certain constitutional problems about imposing a tax on a certain group of people.’”

Brit Hume on the AIG fallout: “I think Dodd’s in more trouble than Geithner. I mean, the Treasury encouraged him to do this. Dodd did it and then mounted this incredibly evasive explanation of it in which every single — in his initial explanation, Dodd’s initial explanation, everything he said was literally true and utterly misleading, and then he subsequently came out and said, ‘Yeah, yeah, I did it. The Treasury made me do it.’ Well, wait a minute. If he’d looked at it and thought it was a bad idea, he would have said, ‘I’m sorry, Treasury, I’m not doing it.’ I mean, Treasury doesn’t hold a whip hand over the chairman. He’s one of the barons of Capitol Hill, after all.”

This cogent analysis of the Virginia political scene makes the case that Independents are still key. Sen. Mark Warner has a tricky problem, trying to “reconcile what may prove irreconcilable: the demands of a liberal Senate Democratic leadership committed to dramatic new rules favoring organized labor — and the wishes of moderate-conservative voters back home who prize the job-producing benefits of Virginia’s Right to Work law.” In the gubernatorial race, Bob McDonnell is “seeking to give the GOP a more optimistic, inclusive, problem-solving image.” And meanwhile, Terry McAuliffe “renowned for bashing Republicans, seeks the party’s nod for governor.”

You say you want a revolution? Charlie Rangel does: ” The only way for us to get out of this is to change our way of living in this country, and that’s the direction in which the Obama budget is going. And I strongly support it.”

Politico reports: “The leading liberal voices of the New York Times editorial pages all criticized—and, in some cases, clobbered—President Obama on Sunday for his handling of the economy and national security.”

And he gets chewed out by Steve Kroft for laughing at the country’s economic woes. Yikes.

Compare the crowd size — Obama canvassers and tea party demonstrators. (Glenn Reynolds appears to be covering the latter so the MSM doesn’t have to. Hmm.)

TNR asks: “New Deficit Numbers Are Out. Time to Panic? ” Well, only if you are wedded to defending the budget and the president’s image of fiscal responsibility.

Obama’s teleprompter is on Facebook.

The GM bondholders fight back — why should they take a bigger hit than the UAW? Well, there is no real reason – aside from the fact that Big Labor and the Obama administration are joined at the hip, the administration’s chief car advisor worked for unions, and the administration thinks they can get away with beating up on bondholders who don’t represent a distinct political constituency.

Judd Gregg is on fire — warning about the president’s budget.

He’s got company: “Stung by popular anger over the AIG saga, several other Democratic senators have been quietly distancing themselves from the Obama team, suggesting it may have bitten off more than it can chew. Senator Daniel Inouye of Hawaii, chairman of the appropriations committee, said: ‘ To maintain a schedule like the one we’ve got at this moment, throughout the year, I don’t know if it will be healthy.’ Even Peter Orszag, Obama’s budget director, was obliged to concede that the CBO-projected deficits, if accurate, were ‘ultimately not sustainable.’”

Meanwhile, the adults in the Senate have decided the House has gone too far in taxing the AIG bonuses, as Budget Chairman Kent Conrad (D-N.D.) and Sen. Susan Collins (R-Maine) “both openly questioned the legality and effectiveness of the 90 percent surtax on bonuses approved by the House on Thursday. ‘I’ve got my doubts whether that’s the best way to do this,’ Conrad said. . . ‘I think there are certain constitutional problems about imposing a tax on a certain group of people.’”

Brit Hume on the AIG fallout: “I think Dodd’s in more trouble than Geithner. I mean, the Treasury encouraged him to do this. Dodd did it and then mounted this incredibly evasive explanation of it in which every single — in his initial explanation, Dodd’s initial explanation, everything he said was literally true and utterly misleading, and then he subsequently came out and said, ‘Yeah, yeah, I did it. The Treasury made me do it.’ Well, wait a minute. If he’d looked at it and thought it was a bad idea, he would have said, ‘I’m sorry, Treasury, I’m not doing it.’ I mean, Treasury doesn’t hold a whip hand over the chairman. He’s one of the barons of Capitol Hill, after all.”

This cogent analysis of the Virginia political scene makes the case that Independents are still key. Sen. Mark Warner has a tricky problem, trying to “reconcile what may prove irreconcilable: the demands of a liberal Senate Democratic leadership committed to dramatic new rules favoring organized labor — and the wishes of moderate-conservative voters back home who prize the job-producing benefits of Virginia’s Right to Work law.” In the gubernatorial race, Bob McDonnell is “seeking to give the GOP a more optimistic, inclusive, problem-solving image.” And meanwhile, Terry McAuliffe “renowned for bashing Republicans, seeks the party’s nod for governor.”

You say you want a revolution? Charlie Rangel does: ” The only way for us to get out of this is to change our way of living in this country, and that’s the direction in which the Obama budget is going. And I strongly support it.”

Politico reports: “The leading liberal voices of the New York Times editorial pages all criticized—and, in some cases, clobbered—President Obama on Sunday for his handling of the economy and national security.”

And he gets chewed out by Steve Kroft for laughing at the country’s economic woes. Yikes.

Compare the crowd size — Obama canvassers and tea party demonstrators. (Glenn Reynolds appears to be covering the latter so the MSM doesn’t have to. Hmm.)

TNR asks: “New Deficit Numbers Are Out. Time to Panic? ” Well, only if you are wedded to defending the budget and the president’s image of fiscal responsibility.

Obama’s teleprompter is on Facebook.

The GM bondholders fight back — why should they take a bigger hit than the UAW? Well, there is no real reason – aside from the fact that Big Labor and the Obama administration are joined at the hip, the administration’s chief car advisor worked for unions, and the administration thinks they can get away with beating up on bondholders who don’t represent a distinct political constituency.

Read Less




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