Commentary Magazine


Posts For: April 4, 2009

Re: Imported Soccer Passion Strictly Phony

Jonathan, I completely agree: the Times‘s attempt to portray soccer as popular in America is completely disingenuous.  And while it is true that this “European import will never succeed as an American game,” that won’t stop culturally insecure Americans from trying their hardest to remold our sports culture along European lines.

In this vein, check out F.C. New York, which will play its inaugural season as part of the second-rate United Soccer League in 2010.  Of course, given that “football” refers to a much more intricate sport in this country, this soccer franchise’s “F.C.” (i.e., “Football Club”) prefix is phony enough.  But F.C. New York has taken its campaign to turn the Big Apple into London a step further: its coat-of-arms contains flowers and a crown! Obviously, nothing can be more un-American than royalty.  I just wish that someone would tell this to the Borough of Queens, however, which is apparently in on this Europeanizing conspiracy.

Jonathan, I completely agree: the Times‘s attempt to portray soccer as popular in America is completely disingenuous.  And while it is true that this “European import will never succeed as an American game,” that won’t stop culturally insecure Americans from trying their hardest to remold our sports culture along European lines.

In this vein, check out F.C. New York, which will play its inaugural season as part of the second-rate United Soccer League in 2010.  Of course, given that “football” refers to a much more intricate sport in this country, this soccer franchise’s “F.C.” (i.e., “Football Club”) prefix is phony enough.  But F.C. New York has taken its campaign to turn the Big Apple into London a step further: its coat-of-arms contains flowers and a crown! Obviously, nothing can be more un-American than royalty.  I just wish that someone would tell this to the Borough of Queens, however, which is apparently in on this Europeanizing conspiracy.

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Those Sneaks, Wanting to Talk Substance

Greg Sargent comments on the new anti-Employee Free Choice Act website:

The game here is that EFCA opponents want to force labor to defend the secret ballot and binding arbitration provisions at a time when labor officials want to keep the argument focused on the plight of workers, because when the battle is fought on that rhetorical turf, labor has the upper hand.

Ah, so the “game” is to force the proponents to discuss what is in the bill they are pushing? Interesting. Pretty underhanded stuff, all that discussion of substance, if you ask me.  And presumably the real serious undertaking would not be discussing what’s in the bill, but instead talking generically about the “plight of workers.” Well, then I guess we would get into the correlation between union density and unemployment. (Larry Summers could come testify at hearings on that very important subject.)

I cannot recall another piece of significant legislation in which the proponents wanted to avoid talking about the merits of their own bill. But then I also can’t recall another piece of legislation in which the opponents couldn’t wait to have more and more discussion about the bill — even after they found the votes to defeat it.

Greg Sargent comments on the new anti-Employee Free Choice Act website:

The game here is that EFCA opponents want to force labor to defend the secret ballot and binding arbitration provisions at a time when labor officials want to keep the argument focused on the plight of workers, because when the battle is fought on that rhetorical turf, labor has the upper hand.

Ah, so the “game” is to force the proponents to discuss what is in the bill they are pushing? Interesting. Pretty underhanded stuff, all that discussion of substance, if you ask me.  And presumably the real serious undertaking would not be discussing what’s in the bill, but instead talking generically about the “plight of workers.” Well, then I guess we would get into the correlation between union density and unemployment. (Larry Summers could come testify at hearings on that very important subject.)

I cannot recall another piece of significant legislation in which the proponents wanted to avoid talking about the merits of their own bill. But then I also can’t recall another piece of legislation in which the opponents couldn’t wait to have more and more discussion about the bill — even after they found the votes to defeat it.

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Demand-side vs. Supply-side

Here’s a post from Robert Reich, who was Bill Clinton’s Labor Secretary, and is a union sympathizer and all-around nice guy.

Reich’s thesis is very simple. He says that the economy is now in a depression, with the “fully loaded” unemployment rate (including people who have stopped looking for work and people working part-time) at 15.6%. The top unemployment rate in the Great Depression was 25%.

Reich’s prescription is equally simple. The government has to spend far, far more than it has been. Like Paul Krugman, he faults Obama not for being a radical, but for not being radical enough. Obama, in other words, needs to spend more.

Spend on what? All the same stuff you’ve been hearing about. Solar panels and windmills. Universal health care. Public transportation systems. Reich, refreshingly, goes the full Keynesian mile and speaks what others have merely fantasized about: he also wants to put Americans to work weatherizing other people’s homes and building more (unneeded) buses and trains with Detroit’s unused car-making capacity. In short, it’s the old “pay someone to dig a hole and then fill it up again” idea, refuted by Bastiat and embraced by Keynes.

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Here’s a post from Robert Reich, who was Bill Clinton’s Labor Secretary, and is a union sympathizer and all-around nice guy.

Reich’s thesis is very simple. He says that the economy is now in a depression, with the “fully loaded” unemployment rate (including people who have stopped looking for work and people working part-time) at 15.6%. The top unemployment rate in the Great Depression was 25%.

Reich’s prescription is equally simple. The government has to spend far, far more than it has been. Like Paul Krugman, he faults Obama not for being a radical, but for not being radical enough. Obama, in other words, needs to spend more.

Spend on what? All the same stuff you’ve been hearing about. Solar panels and windmills. Universal health care. Public transportation systems. Reich, refreshingly, goes the full Keynesian mile and speaks what others have merely fantasized about: he also wants to put Americans to work weatherizing other people’s homes and building more (unneeded) buses and trains with Detroit’s unused car-making capacity. In short, it’s the old “pay someone to dig a hole and then fill it up again” idea, refuted by Bastiat and embraced by Keynes.

You couldn’t get a more pure expression of demand-side dogma.

And unless the political winds take a 180-degree turn, some version of this is precisely what is going to happen in America. No one who has the attention of the administration is making the case that there might be something wrong with this picture.

Let’s go back to Economics 101 (and please forgive me for repeating things you already know). The government can effectively substitute public demand for private demand at a time (like now) when private demand has become severely diminished. But it doesn’t necessarily follow that demand creates supply.

Macroeconomic policy is measured these days in terms of the unemployment rate. Fair enough, that’s the most politically meaningful barometer of economic health, and macroeconomic management in a democracy is at root a political exercise.

But over time, it’s just as important to increase the aggregate production of goods and services in the economy. You really can’t have a sustainable government-driven economy unless it’s a highly productive one. Socialism is a luxury affordable only by rich societies, a lesson learned before our eyes by the USSR.

And that’s where the supply-side comes back into play. As I said, supply doesn’t necessarily increase just because demand does. Supply only increases when the risk-adjusted returns to capital are high enough to justify the additional investments in productive capacity. And that goes double in a time like now, when a big part of the cost of capital consists of retiring obsolescent capacity.

That’s where Obama is making his biggest mistake. He has chosen to make business, and business leaders, the bad guys in his crusade to remake American life in his own image. CEOs are today’s serpents in the garden of Eden.

How wrong he is. His vision of an American economy operating of the government, by the government, and for the government simply can’t work unless business leaders are able to make the needed investments.

How? Easy. Eliminate all taxes on business income and capital gains, eliminate export tariffs, and reduce regulation. Now that would be a radical.

Is that going to happen? Well, Mr. Obama? Just how much of a radical are you, really?

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He Forgot about the Poisoned Wells

The New York Times publishes an op-ed today by George Bisharat, the U.S. academic whose professional mission is the indictment of Israel for war crimes, no matter how implausible. His piece starts with a lie that the Times itself had an important hand in promoting:

Chilling testimony by Israeli soldiers substantiates charges that Israel’s Gaza Strip assault entailed grave violations of international law.

Except that there never was any “chilling testimony” — there were rumors circulated by an anti-IDF activist, which were breathlessly republished by Haaretz and its American counterpart, the Times. His opening claim does, however, set an appropriately mendacious tone for the rest of the piece. Bisharat says that Israel committed six separate violations of international law during Operation Cast Lead, and the first one he cites lays the foundation for the five that follow:

[Israel violated] its duty to protect the civilian population of the Gaza Strip. Despite Israel’s 2005 “disengagement” from Gaza, the territory remains occupied. Israel unleashed military firepower against a people it is legally bound to protect.

Bishara doesn’t explain how it is conceivable under international law that Israel is still occupying Gaza, but consistency has never been the hobgoblin of international law fetishists. He cites the Fourth Geneva Convention elsewhere in his piece, so he must be familiar with its definition of occupation: “the Occupying Power shall be bound, for the duration of the occupation, to the extent that such Power exercises the functions of government in such territory.” As Dore Gold wrote in an analysis after the Gaza disengagement,

what creates an “occupation” is the existence of a military government which “exercises the functions of government.” This is a confirmation of the older 1907 Hague Regulations Respecting the Laws and Customs of War on Land, which state, “Territory is considered occupied when it is actually placed under the authority of the hostile army.” The Hague Regulations also stipulate: “The occupation extends only to the territory where such authority has been established and can be exercised.” What follows is that if no Israeli military government is exercising its authority or any of “the functions of government” in the Gaza Strip, then there is no occupation.

Bisharat continues by charging that Israel is violating Article 33 of the Geneva Conventions by imposing “collective punishment” on Gaza. This claim depends on every resident of Gaza being considered a “protected person” under the Geneva Conventions, which they are not, because Israel is not occupying Gaza. The blockade may be a bad policy, an ineffective policy, or an immoral policy — but it is not a violation of the Geneva Conventions. Side question: Why do people like Bisharat never condemn Egypt for its involvement in the blockade?

Bishara continues his indictment by saying that Israel was

Deliberately attacking civilian targets. The laws of war permit attacking a civilian object only when it is making an effective contribution to military action and a definite military advantage is gained by its destruction.

The level of dishonesty on display here is pretty amazing. Throughout Cast Lead, Hamas used all of the “civilian objects” cited by Bisharat as military installations. Rockets were fired from schools, mosques were used as weapons depots, and the Islamic University of Gaza was used as an explosives production facility and rocket storehouse. Why does Hamas use conspicuously civilian infrastructure for terrorist purposes? One reason is to make the job of Hamas’ western apologists and useful idiots so much easier.

And because, in Bishawat’s telling, Israel intentionally destroyed civilian targets, Israel also became guilty of “Willfully killing civilians without military justification.”

Two other charges round out the indictment: that Israel “deliberately employed disproportional force” — a discredited and misrepresented charge — and that the IDF illegally used white phosphorous on the battlefield. Catch Bisharat’s evasion:

Israel was finally forced to admit, after initial denials, that it employed white phosphorous in the Gaza Strip, though Israel defended its use as legal. White phosphorous may be legally used as an obscurant, not as a weapon, as it burns deeply and is extremely difficult to extinguish.

So, did Israel use white phosphorous illegally as a weapon or legally as an obscurant? Bisharat never says, although he categorizes the issue in his list of Israeli war crimes, letting the implication speak for itself. But Israel only used white phosphorous as an obscurant. Bisharat would rather you believe otherwise — and so would the Times editors who chose to publish such a deceptive op-ed.

The New York Times publishes an op-ed today by George Bisharat, the U.S. academic whose professional mission is the indictment of Israel for war crimes, no matter how implausible. His piece starts with a lie that the Times itself had an important hand in promoting:

Chilling testimony by Israeli soldiers substantiates charges that Israel’s Gaza Strip assault entailed grave violations of international law.

Except that there never was any “chilling testimony” — there were rumors circulated by an anti-IDF activist, which were breathlessly republished by Haaretz and its American counterpart, the Times. His opening claim does, however, set an appropriately mendacious tone for the rest of the piece. Bisharat says that Israel committed six separate violations of international law during Operation Cast Lead, and the first one he cites lays the foundation for the five that follow:

[Israel violated] its duty to protect the civilian population of the Gaza Strip. Despite Israel’s 2005 “disengagement” from Gaza, the territory remains occupied. Israel unleashed military firepower against a people it is legally bound to protect.

Bishara doesn’t explain how it is conceivable under international law that Israel is still occupying Gaza, but consistency has never been the hobgoblin of international law fetishists. He cites the Fourth Geneva Convention elsewhere in his piece, so he must be familiar with its definition of occupation: “the Occupying Power shall be bound, for the duration of the occupation, to the extent that such Power exercises the functions of government in such territory.” As Dore Gold wrote in an analysis after the Gaza disengagement,

what creates an “occupation” is the existence of a military government which “exercises the functions of government.” This is a confirmation of the older 1907 Hague Regulations Respecting the Laws and Customs of War on Land, which state, “Territory is considered occupied when it is actually placed under the authority of the hostile army.” The Hague Regulations also stipulate: “The occupation extends only to the territory where such authority has been established and can be exercised.” What follows is that if no Israeli military government is exercising its authority or any of “the functions of government” in the Gaza Strip, then there is no occupation.

Bisharat continues by charging that Israel is violating Article 33 of the Geneva Conventions by imposing “collective punishment” on Gaza. This claim depends on every resident of Gaza being considered a “protected person” under the Geneva Conventions, which they are not, because Israel is not occupying Gaza. The blockade may be a bad policy, an ineffective policy, or an immoral policy — but it is not a violation of the Geneva Conventions. Side question: Why do people like Bisharat never condemn Egypt for its involvement in the blockade?

Bishara continues his indictment by saying that Israel was

Deliberately attacking civilian targets. The laws of war permit attacking a civilian object only when it is making an effective contribution to military action and a definite military advantage is gained by its destruction.

The level of dishonesty on display here is pretty amazing. Throughout Cast Lead, Hamas used all of the “civilian objects” cited by Bisharat as military installations. Rockets were fired from schools, mosques were used as weapons depots, and the Islamic University of Gaza was used as an explosives production facility and rocket storehouse. Why does Hamas use conspicuously civilian infrastructure for terrorist purposes? One reason is to make the job of Hamas’ western apologists and useful idiots so much easier.

And because, in Bishawat’s telling, Israel intentionally destroyed civilian targets, Israel also became guilty of “Willfully killing civilians without military justification.”

Two other charges round out the indictment: that Israel “deliberately employed disproportional force” — a discredited and misrepresented charge — and that the IDF illegally used white phosphorous on the battlefield. Catch Bisharat’s evasion:

Israel was finally forced to admit, after initial denials, that it employed white phosphorous in the Gaza Strip, though Israel defended its use as legal. White phosphorous may be legally used as an obscurant, not as a weapon, as it burns deeply and is extremely difficult to extinguish.

So, did Israel use white phosphorous illegally as a weapon or legally as an obscurant? Bisharat never says, although he categorizes the issue in his list of Israeli war crimes, letting the implication speak for itself. But Israel only used white phosphorous as an obscurant. Bisharat would rather you believe otherwise — and so would the Times editors who chose to publish such a deceptive op-ed.

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Integrating Private Security in Iraq

So this is the upshot of all the hullabaloo about Blackwater: It seems that its gunslingers will continue to guard State Department personnel in Iraq but will do so under the auspices of a competing company, Triple Canopy, hitherto best known for supplying the dour Peruvians who guarded the Green Zone. This is a result of the fact that the State Department security service does not have the paramilitary capacity to operate in a warzone, or even a country making the transition from being a warzone. So it has to rely on outside contractors, and no other company has anything like the resources that Blackwater has assembled over the years. These include 600 vetted security guards with government clearances and its own fleet of helicopters.

The result of all the furor, then, is simply to continue more or less the present operations but under a different corporate rubric. According to the New York Times:

The Iraqis now seem prepared to accept the prospect that many or even most of the former Blackwater employees will remain on the job as Triple Canopy employees. “It doesn’t matter who they are, what their names are, or what uniform they wear,” said Brig. Gen. Abdul-Karim Khalaf, spokesman for the Iraqi Interior Ministry, “as long as they are subject to Iraqi law and their company follows Iraqi laws.”

That buttresses a point I’ve made in the past: Instead of demonizing Blackwater and its ilk, we need to find a way to better integrate them with government operations in places like Iraq and to hold them more accountable for their conduct.

So this is the upshot of all the hullabaloo about Blackwater: It seems that its gunslingers will continue to guard State Department personnel in Iraq but will do so under the auspices of a competing company, Triple Canopy, hitherto best known for supplying the dour Peruvians who guarded the Green Zone. This is a result of the fact that the State Department security service does not have the paramilitary capacity to operate in a warzone, or even a country making the transition from being a warzone. So it has to rely on outside contractors, and no other company has anything like the resources that Blackwater has assembled over the years. These include 600 vetted security guards with government clearances and its own fleet of helicopters.

The result of all the furor, then, is simply to continue more or less the present operations but under a different corporate rubric. According to the New York Times:

The Iraqis now seem prepared to accept the prospect that many or even most of the former Blackwater employees will remain on the job as Triple Canopy employees. “It doesn’t matter who they are, what their names are, or what uniform they wear,” said Brig. Gen. Abdul-Karim Khalaf, spokesman for the Iraqi Interior Ministry, “as long as they are subject to Iraqi law and their company follows Iraqi laws.”

That buttresses a point I’ve made in the past: Instead of demonizing Blackwater and its ilk, we need to find a way to better integrate them with government operations in places like Iraq and to hold them more accountable for their conduct.

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Egypt’s April 6th Movement Loses Focus

On April 6, 2008, a small group of liberal Egyptian activists used Facebook to organize a major protest against the Mubarak regime.  Although the protest itself wasn’t particularly successful – the regime shut down Tahrir Square and brilliantly outmaneuvered the activists to prevent a second protest scheduled for May 4 – the dissidents’ use of new media for challenging Egyptian authoritarianism won them international acclaim.  This clearly rattled the regime, which later instituted new measures for monitoring Internet usage.

Well, Monday marks a year since this somewhat fateful rally and, naturally, the “April 6th” group is planning a follow-up.  Yet this year’s protest seems to be losing focus.  On one hand, its Facebook group – which includes over 74,000 members – calls for some fairly basic reforms, including a minimum wage of 1200 Egyptian pounds ($212) per month; tying prices to salaries; the election of a new assembly for drafting a constitution that guarantees political and union rights; and presidential term limits.

On the other hand, the April 6th movement has also turned its attention to matters that have nothing to do with fighting authoritarianism.  In this vein, its top demands now include ending Egypt’s sale of gas to Israel – something that wouldn’t ordinarily raise any red flags, since plenty of Egyptians who aren’t otherwise anti-Israel oppose the gas sales on the grounds that Israel receives a hefty discount.  However, a prominent Egyptian blogger has informed me that Nasserists have become increasingly involved with the April 6th group, pushing an anti-Israel message to the forefront of Monday’s rally.  Meanwhile, the Muslim Brotherhood – which doesn’t typically align with Nasserists – has joined this effort: after not participating in last year’s rally, it has signed on as a major supporter and released a very telling statement:

The right to strike, to protest peacefully, and to show anger is one of the basic rights of citizens, and it is a constitutional and legal right that cannot be voided.  The Egyptian youth are the hope of this nation for reforming the present and building a bright future for themselves and for us, to achieve national security and defend all of the umma‘s [Islamic world’s] key issues, at the heart of which is Palestine.

All of this is to say that the April 6th movement may be headed in the direction of its liberal, anti-Mubarak predecessors: from properly demanding democratic rights; to being infiltrated by Palestine-first activists; to being relegated to the depths of obscurity.

On April 6, 2008, a small group of liberal Egyptian activists used Facebook to organize a major protest against the Mubarak regime.  Although the protest itself wasn’t particularly successful – the regime shut down Tahrir Square and brilliantly outmaneuvered the activists to prevent a second protest scheduled for May 4 – the dissidents’ use of new media for challenging Egyptian authoritarianism won them international acclaim.  This clearly rattled the regime, which later instituted new measures for monitoring Internet usage.

Well, Monday marks a year since this somewhat fateful rally and, naturally, the “April 6th” group is planning a follow-up.  Yet this year’s protest seems to be losing focus.  On one hand, its Facebook group – which includes over 74,000 members – calls for some fairly basic reforms, including a minimum wage of 1200 Egyptian pounds ($212) per month; tying prices to salaries; the election of a new assembly for drafting a constitution that guarantees political and union rights; and presidential term limits.

On the other hand, the April 6th movement has also turned its attention to matters that have nothing to do with fighting authoritarianism.  In this vein, its top demands now include ending Egypt’s sale of gas to Israel – something that wouldn’t ordinarily raise any red flags, since plenty of Egyptians who aren’t otherwise anti-Israel oppose the gas sales on the grounds that Israel receives a hefty discount.  However, a prominent Egyptian blogger has informed me that Nasserists have become increasingly involved with the April 6th group, pushing an anti-Israel message to the forefront of Monday’s rally.  Meanwhile, the Muslim Brotherhood – which doesn’t typically align with Nasserists – has joined this effort: after not participating in last year’s rally, it has signed on as a major supporter and released a very telling statement:

The right to strike, to protest peacefully, and to show anger is one of the basic rights of citizens, and it is a constitutional and legal right that cannot be voided.  The Egyptian youth are the hope of this nation for reforming the present and building a bright future for themselves and for us, to achieve national security and defend all of the umma‘s [Islamic world’s] key issues, at the heart of which is Palestine.

All of this is to say that the April 6th movement may be headed in the direction of its liberal, anti-Mubarak predecessors: from properly demanding democratic rights; to being infiltrated by Palestine-first activists; to being relegated to the depths of obscurity.

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If You Do It All, It’s All Your Fault

George Will shares my suspicion that Obama is running a faux bankruptcy in order for GM to shield the UAW from a real one. But the new D.C. management team is coming on board right as excess capacity requires less production and fewer jobs. Moreover, as Will points out, the administration’s penchant for small, green cars is coming up against the reality of plummeting sales of just the sort of models Obama would like us all to be driving. Darn consumers — always seem to have a mind of their own. Will concludes:

His administration cannot be faulted for failing to do well what cannot be done well — industrial policy, wherein the political class, with negligible experience in commerce, flounders. The administration can, however, be faulted for trying.

But the hubris that permeates much of the Obama policy agenda dictates that healthcare, carbon emissions, labor policy, executive compensation and education all be run out of  buildings in Washington.  Or as Professor Kenneth Scott comments:

In France, it is called “dirigisme”, which was the prevailing concept of the 1970s and 1980s and still persists in the form of “national champions” to be protected from foreign ownership or competition, and the like. It is a French attitude of the government knowing best in all areas, which reached its high point under Louis XIV but has continued on today under a ‘conservative’ like Sarkozy. So if you would like a preview of the consequences, look abroad.

The problem with government gobbling up private firms, controlling more of the country’s resources, raising taxes and nationalizing healthcare — quite apart from any attachment one may have to individual freedom — is that the public holds government responsible for more and more of what goes wrong. And if the record of European governments in delivering jobs, prosperity, and innovative healthcare is less than sterling, it might give you a picture of the current misguided scheme. The more the government does, the more the voters will have to complain to and  about the government. (Complain loudly, if the AIG fiasco is any guide.)

At the very least, the statist micro-management approach to governance is a leap of faith. It has no record of ever succeeding. But I’m sure the Obama team has it all figured out.

George Will shares my suspicion that Obama is running a faux bankruptcy in order for GM to shield the UAW from a real one. But the new D.C. management team is coming on board right as excess capacity requires less production and fewer jobs. Moreover, as Will points out, the administration’s penchant for small, green cars is coming up against the reality of plummeting sales of just the sort of models Obama would like us all to be driving. Darn consumers — always seem to have a mind of their own. Will concludes:

His administration cannot be faulted for failing to do well what cannot be done well — industrial policy, wherein the political class, with negligible experience in commerce, flounders. The administration can, however, be faulted for trying.

But the hubris that permeates much of the Obama policy agenda dictates that healthcare, carbon emissions, labor policy, executive compensation and education all be run out of  buildings in Washington.  Or as Professor Kenneth Scott comments:

In France, it is called “dirigisme”, which was the prevailing concept of the 1970s and 1980s and still persists in the form of “national champions” to be protected from foreign ownership or competition, and the like. It is a French attitude of the government knowing best in all areas, which reached its high point under Louis XIV but has continued on today under a ‘conservative’ like Sarkozy. So if you would like a preview of the consequences, look abroad.

The problem with government gobbling up private firms, controlling more of the country’s resources, raising taxes and nationalizing healthcare — quite apart from any attachment one may have to individual freedom — is that the public holds government responsible for more and more of what goes wrong. And if the record of European governments in delivering jobs, prosperity, and innovative healthcare is less than sterling, it might give you a picture of the current misguided scheme. The more the government does, the more the voters will have to complain to and  about the government. (Complain loudly, if the AIG fiasco is any guide.)

At the very least, the statist micro-management approach to governance is a leap of faith. It has no record of ever succeeding. But I’m sure the Obama team has it all figured out.

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Liars Figure

A couple of impressive numbers have been bounced around by various and sundry liberals over the last week or so: 90% and 642,000. And both those numbers have been “adjusted” substantially downward after a few people took a good look at them.

The first number — 90% — represented how many guns seized by Mexican officials in their ongoing drug war were traceable to the United States. This is the percentage Hillary Clinton cited in her recent criticism of our America-Mexico policy. This caused considerable consternation, leading Mexico to blame the U.S. for many of its problems and leading Obama administration officials to talk about tightening up gun laws here.

The figure seemed rather high to some gun experts who saw pictures of the captured weapons and thought, “I can’t get them here — how the heck are Mexican gangsters not only getting them in the U.S., but getting them across the border?”

Well, that number was — to put it kindly — fudged.

Let’s start at the beginning. Mexican officials seized 29,000 guns in 2007 and 2008. By the Obama administration’s reckoning, that would mean that 26,100 of them were from the U.S., right?

Not so fast.

Of those 29,000, the Mexicans determined that about 18,000 came from somewhere besides the U.S. Out of the remaining, only 5,114  were successfully linked back to the U.S.

The true statistic fell from 9 in 10 to roughly 1 in 6.

And those weren’t even the most dangerous weapons. Grenades? Fully automatic rifles? Rockets?  Those came from South Korea, China, Spain, Israel, the former Soviet bloc, other South American nations, and numerous other places.

As for the 642,000:  The Democratic National Committee collected petitions from Americans in support of President Obama’s grotesquely bloated budget, and delivered them to Capitol Hill. This was to represent some massive groundswell in favor of the plan — each and every member of Congress was presented with the signatures of their constituents.

And that’s where someone got clever. Each American has three representatives in Congress — their two Senators and their Representative. Well, the DNC didn’t want anyone to be missed, so they made three copies of each signature and delivered them to each member. And it was that total (642,000) that was reported as supporting the budget, not the 214,000 unique signatures.

There’s an old saying: figures don’t lie, but liars can figure. And these days, they can figure up a storm.

A couple of impressive numbers have been bounced around by various and sundry liberals over the last week or so: 90% and 642,000. And both those numbers have been “adjusted” substantially downward after a few people took a good look at them.

The first number — 90% — represented how many guns seized by Mexican officials in their ongoing drug war were traceable to the United States. This is the percentage Hillary Clinton cited in her recent criticism of our America-Mexico policy. This caused considerable consternation, leading Mexico to blame the U.S. for many of its problems and leading Obama administration officials to talk about tightening up gun laws here.

The figure seemed rather high to some gun experts who saw pictures of the captured weapons and thought, “I can’t get them here — how the heck are Mexican gangsters not only getting them in the U.S., but getting them across the border?”

Well, that number was — to put it kindly — fudged.

Let’s start at the beginning. Mexican officials seized 29,000 guns in 2007 and 2008. By the Obama administration’s reckoning, that would mean that 26,100 of them were from the U.S., right?

Not so fast.

Of those 29,000, the Mexicans determined that about 18,000 came from somewhere besides the U.S. Out of the remaining, only 5,114  were successfully linked back to the U.S.

The true statistic fell from 9 in 10 to roughly 1 in 6.

And those weren’t even the most dangerous weapons. Grenades? Fully automatic rifles? Rockets?  Those came from South Korea, China, Spain, Israel, the former Soviet bloc, other South American nations, and numerous other places.

As for the 642,000:  The Democratic National Committee collected petitions from Americans in support of President Obama’s grotesquely bloated budget, and delivered them to Capitol Hill. This was to represent some massive groundswell in favor of the plan — each and every member of Congress was presented with the signatures of their constituents.

And that’s where someone got clever. Each American has three representatives in Congress — their two Senators and their Representative. Well, the DNC didn’t want anyone to be missed, so they made three copies of each signature and delivered them to each member. And it was that total (642,000) that was reported as supporting the budget, not the 214,000 unique signatures.

There’s an old saying: figures don’t lie, but liars can figure. And these days, they can figure up a storm.

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The Washington Post Explains (Sort Of)

Last week, I contacted the Washington Post’s ombudsman Andrew Alexander with a series of questions about the offensive Pat Oliphant cartoon which recently ran in the Post, including how many complaints they had received, why they had not reported on the ensuing controversy and what polices if any the Post considered in deciding to run it. He promptly responded, “The Oliphant cartoon has been removed from washingtonpost.com. I received about  8-10 complaints.” As to my other questions, he invited me to contact the Post’s managing editor Raju Narisetti. I did so immediately. I posed these questions:

1.Does the Post have any standards/guidelines which were considered in determining to run the cartoon? Were they followed in this instance?
2.Why then was the cartoon removed from the website?
3. Do the editors have comment on the reaction that this was not mere criticism but actually anti-Semitic?
4. The NY Post apologized for the ape cartoon following a public outcry. Does the Post intend to offer any public apology or defense?
5. Is there a reason why the Post did not cover the controversy which it generated and/or the outcry from the Jewish community?

He never responded. Instead I received this response from Kris Coratti, Director of Communications:

Syndicated cartoons are not chosen by the editors at washingtonpost.com.  They are posted through an automatic feed.  We removed the specific cartoon in light of the comments we received, which we thought were well-grounded.  We are also reviewing our procedures to ensure that syndicated content on our website receives appropriate editorial review.

I asked her to respond to the balance of my questions, specifically numbers 3-5. I have received no response.

So on the positive side the Post seems to have recognized the error of their ways in running the cartoon. However, the refusal to offer a public apology as the New York Post editors did or to cover the fallout from their own misjudgment is disappointing to say the least. This is the sort of thing that, if attempted by a politician, would surely bring scorn from the Post. Although the Post’s editors appear chastened by the experience and their action in removing the cartoon from the website is encouraging, one wonders why they have not been candid about their error and forthcoming about their policies.

Coincidentally,  Alexander devotes his weekly to the subject of transparency, writing:

Newspapers demand accountability and transparency from the institutions they cover. But when it comes to The Post, one of the world’s best-known media institutions, the attitude seems to be: Good for thee, but not for me.

The Post keeps its journalistic policies largely hidden, making it virtually impossible for readers to know the paper’s ethical and journalistic standards.

I couldn’t have said it any better.

Last week, I contacted the Washington Post’s ombudsman Andrew Alexander with a series of questions about the offensive Pat Oliphant cartoon which recently ran in the Post, including how many complaints they had received, why they had not reported on the ensuing controversy and what polices if any the Post considered in deciding to run it. He promptly responded, “The Oliphant cartoon has been removed from washingtonpost.com. I received about  8-10 complaints.” As to my other questions, he invited me to contact the Post’s managing editor Raju Narisetti. I did so immediately. I posed these questions:

1.Does the Post have any standards/guidelines which were considered in determining to run the cartoon? Were they followed in this instance?
2.Why then was the cartoon removed from the website?
3. Do the editors have comment on the reaction that this was not mere criticism but actually anti-Semitic?
4. The NY Post apologized for the ape cartoon following a public outcry. Does the Post intend to offer any public apology or defense?
5. Is there a reason why the Post did not cover the controversy which it generated and/or the outcry from the Jewish community?

He never responded. Instead I received this response from Kris Coratti, Director of Communications:

Syndicated cartoons are not chosen by the editors at washingtonpost.com.  They are posted through an automatic feed.  We removed the specific cartoon in light of the comments we received, which we thought were well-grounded.  We are also reviewing our procedures to ensure that syndicated content on our website receives appropriate editorial review.

I asked her to respond to the balance of my questions, specifically numbers 3-5. I have received no response.

So on the positive side the Post seems to have recognized the error of their ways in running the cartoon. However, the refusal to offer a public apology as the New York Post editors did or to cover the fallout from their own misjudgment is disappointing to say the least. This is the sort of thing that, if attempted by a politician, would surely bring scorn from the Post. Although the Post’s editors appear chastened by the experience and their action in removing the cartoon from the website is encouraging, one wonders why they have not been candid about their error and forthcoming about their policies.

Coincidentally,  Alexander devotes his weekly to the subject of transparency, writing:

Newspapers demand accountability and transparency from the institutions they cover. But when it comes to The Post, one of the world’s best-known media institutions, the attitude seems to be: Good for thee, but not for me.

The Post keeps its journalistic policies largely hidden, making it virtually impossible for readers to know the paper’s ethical and journalistic standards.

I couldn’t have said it any better.

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Inside the Toxic-Asset Story

This is very interesting. It sheds a certain amount of light on the actual objectives of the public-private investment plan that Tim Geithner is trying to push as a solution for the banking crisis.

It’s all about finding the least painful place to stash the losses from the collapse of the housing bubble and the subsequent destruction of leveraged financial procedures.

For every borrower, there’s a lender. When people default on their mortgages (or when they become statistically more likely to default because of deflation), the lenders face losses too. Most of those prospective losses are locked up inside the packages (“securitizations,” or MBS) that are now such a large part of the asset portfolios of major banks.

What makes these assets “toxic” is that they can’t be sold or marked to market, because the current value of a typical mortgage is now a small fraction of its face value. So the largest banks are stuck holding these assets.

But observe that the vast majority of mortgages won’t default. There’s a reason why everyone wants to invest in mortgages: ordinary consider it a matter of morality to pay their debts. So if a bank paid $100 to buy a mortgage that’s now priced in the market at $15 or $20, they have the option of holding the mortgage for the next five years or so. Adjusting for default risk, they might end up realizing $85 or $90 (in nominal dollars) at the end of that period.

Read More

This is very interesting. It sheds a certain amount of light on the actual objectives of the public-private investment plan that Tim Geithner is trying to push as a solution for the banking crisis.

It’s all about finding the least painful place to stash the losses from the collapse of the housing bubble and the subsequent destruction of leveraged financial procedures.

For every borrower, there’s a lender. When people default on their mortgages (or when they become statistically more likely to default because of deflation), the lenders face losses too. Most of those prospective losses are locked up inside the packages (“securitizations,” or MBS) that are now such a large part of the asset portfolios of major banks.

What makes these assets “toxic” is that they can’t be sold or marked to market, because the current value of a typical mortgage is now a small fraction of its face value. So the largest banks are stuck holding these assets.

But observe that the vast majority of mortgages won’t default. There’s a reason why everyone wants to invest in mortgages: ordinary consider it a matter of morality to pay their debts. So if a bank paid $100 to buy a mortgage that’s now priced in the market at $15 or $20, they have the option of holding the mortgage for the next five years or so. Adjusting for default risk, they might end up realizing $85 or $90 (in nominal dollars) at the end of that period.

I’m oversimplifying the picture considerably, but that’s the nut of the banking crisis. Because it’s no longer possible for banks to raise new capital, they’re stuck with the balance sheets they have. In many cases (Citigroup being an exception), it’s indeed a plausible strategy to sit on their existing asset portfolios, accept relatively low returns on those assets, and wait for them to mature. In the meantime, of course, those banks have no ability to create new credit, which could have been used to finance economic growth.

Now Tim Geithner wants to change that dynamic, and artificially elevate the prices at which mortgage-backed assets can trade today. In theory, that would make it somewhat easier for banks to sell off their most putrid paper, thus improving both their anticipated earnings and their capital positions.

Now as the Business Insider story points out, banks and other financial institutions are smacking their lips over the possibility of buying up MBS from other banks. What could possibly make that an attractive thing to do?

You guessed it: the taxpayers will finance the purchases, and guarantee any losses. Nobel-winning economist Joseph Stiglitz is absolutely correct when he says that the Geithner plan doesn’t sell assets to private investors. It sells options on assets. The upside for the buyers is unlimited, and there is no downside. It’s an easy decision. (It’s also massively inflationary, but Geithner hopes you’re not paying any attention to that part.)

At the end of the chain, Geithner hopes this will result in more bank lending, but that’s not a necessary consequence of this game. What is a necessary consequence, is that the taxpayers will be committing a huge amount of money to allow banks to continue to wait another few years for their mortgage portfolios to mature. That’s money that will either be printed afresh, or else borrowed or taxed away from existing uses.

At the end of the day, the picture remains the same. Someone has to take the hit for the deflation of the housing bubble. As I said, the problem is to find the least painful place to stash the losses. The genius of the Geithner plan is that it shifts that pain to the people who are least in a position to complain about it: you, the taxpayers.

The inevitable result, of course, is less private capital available for growth, because it’s all tied up financing overpriced mortgage paper.

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Flotsam and Jetsam

Jackson Diehl sums up the Obama diplomatic debut: “What’s striking about Obama’s diplomacy, however, has been his willingness to embrace the priorities of European governments, Russia and China while playing down — or setting aside altogether — principal American concerns.  . .  Is the new president shrewd and pragmatic about using his power at home and abroad — or too passive, even weak? That’s a question worth weighing as he heads back to Washington.” Read the whole thing, as they say.

Jim Hoagland is sick of the “I’m not Bush” routine and the deferential listening. “Listening is not a policy,” he explains.

You’d think a mass movement with hundreds of events in nearly every state would gain some more mainstream media attention. I wonder if the numbers attending will surpass the number of “pledges” (actual, not the triplicated copies) collected by the president’s perpetual campaign (Organizing America).

Brian Riedl of Heritage observes that Democrats who “condemned President Bush for running temporary $300-$400 billion deficits (partially resulting from the war) has now approved budget deficits averaging $1 trillion annually over the next decade. That is a staggering $68,000 per household of new debt, to be repaid by our children and grandchildren. And after quadrupling the budget deficit in one year, fulfilling their pledge to ‘cut the deficit in half’ from that level by 2013 shouldn’t impress anyone.”

Obama policy initiatives seem to be bogged down, reports ABC News. I wouldn’t underestimate the ability of Reid and Pelosi to slip items back in late night Senate-House conference committee meetings.

She’s joking right? Sarah Palin wants the sitting Senator to step down and run against Ted Stevens. It isn’t going to happen: that’s not how politics works and Stevens is not exactly the model the GOP wants to project. Other than that it’s a swell idea.

The NY-20 vote count teeters back and forth.

It appears that meeting between the bank CEOs and the president wasn’t so cordial. The banks want to give the TARP money back and get out from under the government’s thumb, but Obama is having none of that. Return the taxpayers’ money? How dare they!

Stuart Varney explains what the Obama team is up to: “The government wants to control the banks, just as it now controls GM and Chrysler, and will surely control the health industry in the not-too-distant future. Keeping them TARP-stuffed is the key to control. And for this intensely political president, mere influence is not enough. The White House wants to tell ‘em what to do. Control. Direct. Command.”

Not that there is anything wrong with making a buck: “Lawrence Summers, a top economic adviser to U.S. President Barack Obama, was paid about $5.2 million in compensation by hedge fund D.E. Shaw during the past year, according to financial disclosure forms released on Friday by the White House.” And he got $2.7  million in speaking fees from troubled Wall Street firms. And you have to love the Clintonian parsing:”But White House aides said the speeches occurred before he joined the Obama transition team in an official capacity.” So how exactly did those conflict of interest rules work?

Wasn’t there a ban on lobbyists? “Carol Browner, assistant to the president for energy and climate change, disclosed earnings of between $1 million and $5 million from lobbying firm Downey McGrath Group, Inc., where her husband, Thomas Downey, is a principal. She states $450,000 in ‘member distribution’ income, plus retirement and other benefits from The Albright Group, a lobbying firm whose principals include former Secretary of State Madeline Albright.”

Who would have thought? There may be a law about allowing people who have received terrorist training into the U.S. Sen. Jeff Sessions writes a letter to Attorney General Eric Holder asking him whether this doesn’t prevent release of Guantanamo releasees into the U.S.

The Washington Post’s editors are dismayed that “‘reformer’ Education Secretary Arne Duncan is pulling the plug on vouchers for DC kids without fully considering the just-complete study of the program. “Perplexing” they note with distain — “Unless, of course, politics enters the calculation in the form of Democratic allies in Congress who have been shameless in their efforts to kill vouchers.” Nah, that’d mean they’re beholden to teachers’ unions and don’t care about poor kids. Couldn’t be.

Allen Meltzer: “There is not much relation between Pres. Obama’s words and his actions. The talk is centrist, the actions leftist–social democratic perhaps. The administration forecasts 4% growth, above average. But the recovery will be slow, I believe. The president talks about investment but the administration program shifts resources toward heavily subsidized energy and healthcare. Better healthcare for all may increase well-being but it won’t have much effect on productivity. Subsidized energy may also improve the quality of life with little effect on productivity growth. The president emphasizes his intention to cut the budget deficit in half by the end of his term, but he neglects to say that it will be $800 or 900 billion.”

Fred Barnes calls Obama out for “misdirection” — a concerted effort to deceive his true and daring intentions on everything from deficit “cutting” to running GM. As Barnes points out, sooner or later people figure out what’s going on. (Probably around the time they can’t get their Chevy repaired or pay their sky-high tax bill.)

Jackson Diehl sums up the Obama diplomatic debut: “What’s striking about Obama’s diplomacy, however, has been his willingness to embrace the priorities of European governments, Russia and China while playing down — or setting aside altogether — principal American concerns.  . .  Is the new president shrewd and pragmatic about using his power at home and abroad — or too passive, even weak? That’s a question worth weighing as he heads back to Washington.” Read the whole thing, as they say.

Jim Hoagland is sick of the “I’m not Bush” routine and the deferential listening. “Listening is not a policy,” he explains.

You’d think a mass movement with hundreds of events in nearly every state would gain some more mainstream media attention. I wonder if the numbers attending will surpass the number of “pledges” (actual, not the triplicated copies) collected by the president’s perpetual campaign (Organizing America).

Brian Riedl of Heritage observes that Democrats who “condemned President Bush for running temporary $300-$400 billion deficits (partially resulting from the war) has now approved budget deficits averaging $1 trillion annually over the next decade. That is a staggering $68,000 per household of new debt, to be repaid by our children and grandchildren. And after quadrupling the budget deficit in one year, fulfilling their pledge to ‘cut the deficit in half’ from that level by 2013 shouldn’t impress anyone.”

Obama policy initiatives seem to be bogged down, reports ABC News. I wouldn’t underestimate the ability of Reid and Pelosi to slip items back in late night Senate-House conference committee meetings.

She’s joking right? Sarah Palin wants the sitting Senator to step down and run against Ted Stevens. It isn’t going to happen: that’s not how politics works and Stevens is not exactly the model the GOP wants to project. Other than that it’s a swell idea.

The NY-20 vote count teeters back and forth.

It appears that meeting between the bank CEOs and the president wasn’t so cordial. The banks want to give the TARP money back and get out from under the government’s thumb, but Obama is having none of that. Return the taxpayers’ money? How dare they!

Stuart Varney explains what the Obama team is up to: “The government wants to control the banks, just as it now controls GM and Chrysler, and will surely control the health industry in the not-too-distant future. Keeping them TARP-stuffed is the key to control. And for this intensely political president, mere influence is not enough. The White House wants to tell ‘em what to do. Control. Direct. Command.”

Not that there is anything wrong with making a buck: “Lawrence Summers, a top economic adviser to U.S. President Barack Obama, was paid about $5.2 million in compensation by hedge fund D.E. Shaw during the past year, according to financial disclosure forms released on Friday by the White House.” And he got $2.7  million in speaking fees from troubled Wall Street firms. And you have to love the Clintonian parsing:”But White House aides said the speeches occurred before he joined the Obama transition team in an official capacity.” So how exactly did those conflict of interest rules work?

Wasn’t there a ban on lobbyists? “Carol Browner, assistant to the president for energy and climate change, disclosed earnings of between $1 million and $5 million from lobbying firm Downey McGrath Group, Inc., where her husband, Thomas Downey, is a principal. She states $450,000 in ‘member distribution’ income, plus retirement and other benefits from The Albright Group, a lobbying firm whose principals include former Secretary of State Madeline Albright.”

Who would have thought? There may be a law about allowing people who have received terrorist training into the U.S. Sen. Jeff Sessions writes a letter to Attorney General Eric Holder asking him whether this doesn’t prevent release of Guantanamo releasees into the U.S.

The Washington Post’s editors are dismayed that “‘reformer’ Education Secretary Arne Duncan is pulling the plug on vouchers for DC kids without fully considering the just-complete study of the program. “Perplexing” they note with distain — “Unless, of course, politics enters the calculation in the form of Democratic allies in Congress who have been shameless in their efforts to kill vouchers.” Nah, that’d mean they’re beholden to teachers’ unions and don’t care about poor kids. Couldn’t be.

Allen Meltzer: “There is not much relation between Pres. Obama’s words and his actions. The talk is centrist, the actions leftist–social democratic perhaps. The administration forecasts 4% growth, above average. But the recovery will be slow, I believe. The president talks about investment but the administration program shifts resources toward heavily subsidized energy and healthcare. Better healthcare for all may increase well-being but it won’t have much effect on productivity. Subsidized energy may also improve the quality of life with little effect on productivity growth. The president emphasizes his intention to cut the budget deficit in half by the end of his term, but he neglects to say that it will be $800 or 900 billion.”

Fred Barnes calls Obama out for “misdirection” — a concerted effort to deceive his true and daring intentions on everything from deficit “cutting” to running GM. As Barnes points out, sooner or later people figure out what’s going on. (Probably around the time they can’t get their Chevy repaired or pay their sky-high tax bill.)

Read Less




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