Last Refuge of Common Sense

September 11

2011-09-10T17:41:00.000-07:00

Since the minute the planes struck, the September 11 attacks have been fodder for conspiracy wackos, hucksters, and assorted activists. Why is it that people with only the most distant connection to the 9/11 attacks insist on using them to push their own private agendas?

Cheney and his cronies used fabricated data and intimidation to push their agenda in favor of an invasion of Iraq. All the blood and all the treasure wasted on this so-called "War on Terror" came about because powerful men decided to create a phony story linking Saddam to 9/11.

"Never Forget!" exclaimed the bumper stickers of their supporters, even as they rapidly forgot the war against al Quaeda in order to push an ill-advised and worse-executed grab of Iraq's oil fields.

Waves of fruitcakes are using the 9/11 attacks to push various conspiracy theories about who was "really" behind the attacks. The CIA or the Mossad or some other shadowy group is supposed to have planted explosives to bring the towers down. No amount of debunking will ever be enough for these nut jobs, though several people have tried:

Screw Loose Change

Debunking 911

Debunking the 9/11 Myths: Special Report

I wish that people could accept the attacks for what they were: An atrocity motivated by the hatred of a few extremists. One of the ironies of the attack is the way it has been used by other extremists to justify actions and attitudes that look an awful lot like those found among the attackers.

9/11: We've Forgotten

2009-09-12T05:45:00.001-07:00

This is the first 9/11 I've spent in a state that was not one of the 9/11 states. It seems to me that people in other parts of the country just don't get it. Activities were scheduled at the kids' schools, a lot of people flew their flags at full mast, fundraisers at work for charities other than veterans/survivors, and no moment of silence observed at work. (This is in a company that lost employees on 9/11.)

Maybe I'm sensitive because I lived in an area and worked in an industry that was disproportionately affected by 9/11. Now I live in an area where a lot of people with "Never Forget" bumper stickers have evidently forgotten.

What's wrong with showing a bit of respect?

Palin's Shortcomings

2008-11-30T15:23:00.000-08:00

Sarah Palin appears to be kicking off her 2012 presidential campaign early. I have several serious objections to Sarah Palin as a presidential candidate. Contrary to the early victim rhetoric from the Palin camp, none of them have anything to do with the fact that she is a conservative Christian woman.

Sarah Palin is intellectually dishonest. She ignores opinions different from her own, and even mis-represents expert opinions when she thinks she can get away with it.

She tries to dictate other peoples' opinions. Her attempts to ban books and to control the activities of her librarian were nothing short of despicable. Her desire to force the teaching of theology in the science classroom is frightening to anyone who cares about the separation of church and state.

She is ignorant. I don't care where she went to school or for how long. For anyone to grow to adulthood believing that Africa is a country and not a continent requires a level of intellectual incuriosity only matched by W.

--SCC

The Palin Selection

Oil Price Decline

2008-11-06T19:43:00.000-08:00

Republicans have been claiming that the drop in the price of oil was a result of increased production thanks to their enlightened drilling policies. This assertion is patently absurd, as demonstrated by figures from the EIA.

These figures show that production has leveled off, and that any price decline has been a result of demand destruction.

The accompanying EIA report is slightly out of date. I also think that it fails to take into account the amount of air that speculators were blowing into the oil futures market.

I also think that they may be over-optimistic in their projections of non-OPEC supply growth. But at the end of the day, they agree with my assessment.

--SCC

Florida 2000

2008-11-04T17:31:00.000-08:00

The U.S. Commission on Civil Rights (USCCR), produced a report in June 2001 titled "Voting Irregularities in Florida During the 2000 Presidential Election." The report concluded, "Despite the closeness of the election, it was widespread voter disenfranchisement, not the dead-heat contest, that was the extraordinary feature in the Florida election. The disenfranchisement was not isolated or episodic." The USCCR found that African-American voters were at least ten times more likely to have their ballots rejected than other voters and that 83 of the 100 precincts with the most disqualified ballots had black majorities.

There were several reports of black voters being obstructed when trying to vote:

Black politicians want the commission to press Governor Bush and other state officials about the unusually high presence of Florida highway patrolmen in black precincts in election day.

One state senator, Daryll Jones, said there had to have been an order for them to set up road-blocks.

Choicepoint was forced to pay compensation for their actions during the 2000 Florida election, when they created lists of voters to be excluded from voting.

--SCC

Is Obama a Socialist?

2008-11-01T18:06:00.000-07:00

McCain doesn't think so. When asked, he waffled and eventually conceded that Obama was not a socialist.

Here's an interesting essay on the subject.

Most kids have no standard for comparison to understand why socialists are scary. By labeling all liberals as socialists, conservatives have robbed the word of its power. An increasing number of young people are self-identifying as Socialists or proclaiming themselves to be in favor of things like "socialized medicine." (Ie, the pollster asks a question like "Are you in favor of 'socialized medicine?'")

I disagree with the premise that there is some sort of Socialist resurgence going on.

After the election, the blue dogs will hold the balance of power in the Congress. If the Ds try to push them, then I'll get my wish for the creation of a third party based on traditional, hard-nosed fiscal discipline.

--SCC

Tax Philosophy

2008-10-31T19:09:00.000-07:00

I've always favored consumption taxes over income taxes. We should seek to discourage consumption and encourage income-generating activities.

On the other hand, public property should not be given away to private interests without compensation. Oil companies (and other mining interests) should pay royalties for their use of lands and resources that belong to the people at large. The level of payment should be similar to what they would pay a private landowner.

--SCC

Palin and the Science Classroom

2008-10-29T17:48:00.000-07:00

From the Alaska Daily News:

The volatile issue of teaching creation science in public schools popped up in the Alaska governor's race this week when Republican Sarah Palin said she thinks creationism should be taught alongside evolution in the state's public classrooms.

Palin was answering a question from the moderator near the conclusion of Wednesday night's televised debate on KAKM Channel 7 when she said, "Teach both. You know, don't be afraid of information. Healthy debate is so important, and it's so valuable in our schools. I am a proponent of teaching both."

Her main opponents, Democrat Tony Knowles and Independent Andrew Halcro, said such alternatives to evolution should be kept out of science classrooms. Halcro called such lessons "religious-based" and said the place for them might be a philosophy or sociology class.

The view expressed by Halcro is pretty much where I land on the issue.

Palin later backpedaled, after her staff informed her that her view was unconstitutional:

In an interview Thursday, Palin said she meant only to say that discussion of alternative views should be allowed to arise in Alaska classrooms:

"I don't think there should be a prohibition against debate if it comes up in class. It doesn't have to be part of the curriculum."

Palin's supporters claim that she does not support an imposition of Creationism in the classroom. This claim is based on the fact that she has not proposed it during her 18 months or so in office.

Her real beliefs are best represented by what she said before her aides had a chance to educate her on what the Constitution says. The fact that she did not try to impose Creationism in the classroom has more to do with Constitutional limits than her desire to circumvent the Constitution.

--SCC

Obama and the Iraq Pull-Out

2008-10-27T17:52:00.000-07:00

I've always thought that Obama's position is more nuanced than his supporters (or his opponents) would have us believe. He's left himself weasel room in terms of "conditions on the ground" and the definition of "combat troops" (as opposed to "advisors," "trainers," or "peacekeepers," I suppose). I have been saying for a while that Obama is smart enough and precise enough of a speaker that he was leaving himself the weasel room because he intended to use it.

--SCC

Fannie, Freddie, and the Financial Collapse

2008-10-26T18:14:00.000-07:00

Lenders were writing and pushing subprime mortgages, and packaging them into securities, before the FMs got involved. Fannie and Freddie made the problem worse, but they didn't create it.

Here's a liberal response to the Republican charges. I object to this article's attempt to whitewash Democratic responsibility for large portions of the crisis, but it at least acts as a counterweight to the RNC's talking points memos.

Here's a somewhat more balanced commentary.

My point on the other is that the structural problems caused by the deregulation of investment banks would have emerged one way or another, even without the mortgage crisis. You had a number of large companies writing out large "insurance policies" without adequate capital backing, and without any form of regulation. In any time period, that is a recipe for disaster.

It's pretty hard to be fully responsible for something that was happening before you arrived in the marketplace.

Fannie and Freddie made things worse, but focusing on them to the exclusion of serious structural problems in our financial system is like slaughtering Mrs O'Leary's cow to fix the Chicago building codes.

Financial markets need transparency and accountability, and that only comes about through responsible regulation. We need CDS transparency and probably a regulated exchange. The size of the CDS overhang dwarfs any other structural problem in our financial system. If we don't take care of it, we will be fighting fires until we do the right thing.

The easy answer is seldom the right one.

--SCC

The Party of Big Government

2008-10-26T05:12:00.000-07:00

Republicans have been complaining that Obama represents the party of big government.

That rhetorical flourish would mean a lot more if the Republicans had done anything about reducing the size of government or even reducing waste, fraud and mismanagement. Instead, we've seen massive increases in both the size and inefficiency of government under their watch.

Maybe they should have spent more time governing than invading countries who didn't attack us, torturing POWs for useless non-information, and tapping the phones of American citizens.

Oh, I forgot. The Republicans are so ineffective that Nancy Pelosi stole their lunch money while they controlled all three branches of government. I knew this was all the Democrats' fault somehow.

(Ok, that was a cheap shot. I think we actually agree about many of the failings of the Republican party, and we could probably say the same about the Democrats. Where's Ross Perot when you need him?)

--SCC

Bush and Regulatory Incompetence

2008-10-25T19:58:00.000-07:00

I've been intrigued by attempts by the RNC to exonerate Bush for failing to regulate the financial markets. According to the RNC, the problem was that those Evil Democrats (TM) in Congress prevented the passage of legislation that would have allowed him to regulate the markets.

Bush had no problem imposing his own policies on torture or domestic surveillance under the guise of "signing statements." If he had been so hot to introduce regulation, he could have done so on his own hook, as the head of the executive.

In fact, additional regulatory powers were part of the compromise that led to the bipartisan repeal of Glass-Steagall.

Contrary to RNC talking points, Fannie and Freddie did not start the rush to securitizing subprime mortgages. They joined in, and they made the problem worse, but they didn't start it. Claiming that they did betrays a lack of understanding about the nature of the current financial crisis.

Beyond that, you have to look at CDSs to see the mechanism by which problems in one part of the financial system are dominoing through other parts of the financial system. (People who watch such things were very relieved that the final settlement of the outstanding Lehman-related CDSs was on the low side of the estimates. The high side of the estimates could have made things really interesting. The fact that the estimates varied so widely shows exactly the transparency sorts of problems I've been talking about.)

Regulation of these CDSs was well within the powers of the regulators who were appointed by Bush. It is silly to try to give his administration a pass and blame the entire mess on the minority party in Congress. Fortunately, there are a lot of people for hire who specialize in oversimplification and silly mudslinging.

Blaming Fannie and Freddie exclusively is like blaming Mrs O'Leary's cow for the Chicago fire. The underlying problem was lax building and fire codes. If it hadn't been for the cow, there would have been little Timmy playing with matches or a lightning strike on Mrs O'Leary's barn.

The mortgage crisis was a precipitating event. Fannie and Freddie alone do not explain how the consequences of rising default rates were able to propagate through the international financial system so quickly and thoroughly.

Both parties participated in setting up a financial system that was under-regulated and that relied far too much on private ratings agencies and fraudulent (or at least opaque) financial statements. I don't find the finger-pointing exercise to be helpful or even particularly enlightening. Both parties gleefully accepted money in exchange for their connivance in setting up underregulated financial markets.

The real solution is to provide more transparency in financial instruments, especially derivatives. As long as derivatives (such as CDOs and CDSs) are opaque, there will be smart people who will be able to hide sludge in an apparently AAA asset. The only hope is to allow buyers and analysts to uncover the sludge. Obviously, this will probably require re-definition of some of these derivatives, and may require that a regulated exchange be set up for things like CDSs.

We're seeing so much butt-covering going on that nobody is looking at how to implement fire codes in our financial system.

In my view, sunlight is the best way to deal with a political infection. If we can force greater transparency on the financial markets, investors will be able to make more informed decisions. Premiums will be placed on experts who can perform insightful analysis rather than on tricksters who can hide toxic waste in a AAA rated bond.

One of the most frightening interviews I heard over the last couple of weeks was with someone who had been explaining CDSs to an official at the SEC. Evidently, that official thought that CDSs were being used exclusively as "insurance" and not as the world's biggest unregulated gambling salon. And the official had no idea that nobody was checking to see if the underwriters of CDSs actually had the capital reserves to make good in the event of a default. "Asleep at the switch" doesn't even start to cover it.

--SCC

Black Racism and Obama

2008-10-15T19:41:00.000-07:00

Since black voters go overwhelmingly for the Democrat in most elections, it is hard to say that they are all voting for Obama because he is black.

The Republicans have only themselves to blame for losing the black vote. They did it deliberately in order to take the rural white southern vote away from the Democrats.

--SCC

Pirates!

2008-10-11T07:29:00.000-07:00

Piracy appears to be alive and well.

Ukraine needs to dig deep and find some courage, unless they want to change the flag on their ships to a great big bullseye.

--SCC

Over-Simplifying the Crisis

2008-10-07T19:22:00.000-07:00

It is an over-simplification to refer to this as a "mortgage" crisis. The problem with the mortgages is a precipitating event, but the structural issues that have been revealed are much deeper.

In particular, the lack of transparency and reportability of the CDOs and CDSs is what has caused the freeze-up in inter-bank lending. These issues can be resolved by setting up a regulatory framework for dealing with CDSs, and by requiring better information reporting on the instruments underlying a CDO.

Despite attempts by both parties to blame the other one, the fact is that both have been complicit in setting up a system that lacked adequate fraud protections and regulatory requirements.

I know that the popular media (and therefore the politicians) focus on the foreclosures and the mortgage defaults, but I think that is because they are easier to understand than having to think about how to properly regulate a marketplace of financial interests.

Pretty clearly, the "Masters of the Universe" can't be trusted to play with scissors without adult supervision.

--SCC

Trying to Pick the Winner

2008-10-03T18:50:00.000-07:00

People should definitely vote for whomever they believe to be the better candidate. I don't get people who try to get on the bandwagon and vote for the "winner."

I'm not so convinced that Obama is as far ahead as the polls indicate. For whatever reason, polls seem to undercount Republicans. I've heard some theories about this from statisticians:

Republicans are less likely to talk to pollsters.

Evangelicals vote more faithfully than other groups.

People say that they are going to vote for Obama in order to seem "enlightened" even if they really plan on voting for McCain.

--SCC

The Role of Deregulation

2008-10-03T15:51:00.001-07:00

The International Herald Tribune published an article on the role of lax regulation in the explosion of CDOs on Wall Street.

The article outlines how, in 2004, the big investment companies petitioned the SEC for the right to place the capital from their safety nets into play on the marketplace.

One commissioner, Harvey Goldschmid, questioned the staff about the consequences of the proposed exemption. It would only be available for the largest firms, he was reassuringly told — those with assets greater than $5 billion.

"We've said these are the big guys," Goldschmid said, provoking nervous laughter, "but that means if anything goes wrong, it's going to be an awfully big mess."

Part of the quid pro quo was that the SEC would have increased visibility into the activities of these firms to make sure that they were not abusing their new freedom.

The 2004 decision for the first time gave the SEC a window on the banks' increasingly risky investments in mortgage-related securities.

But the agency never took true advantage of that part of the bargain. The supervisory program under Cox, who arrived at the agency a year later, was a low priority.

The commission assigned seven people to examine the parent companies — which last year controlled financial empires with combined assets of more than $4 trillion. Since March 2007, the office has not had a director. And as of last month, the office had not completed a single inspection since it was reshuffled by Cox more than a year and a half ago.
...
"It's a fair criticism of the Bush administration that regulators have relied on many voluntary regulatory programs," said Roderick Hills, a Republican who was chairman of the SEC under President Gerald Ford. "The problem with such voluntary programs is that, as we've seen throughout history, they often don't work."

If you can't trust the big boys to regulate themselves, whom can you trust?

"We foolishly believed that the firms had a strong culture of self-preservation and responsibility and would have the discipline not to be excessively borrowing," said Professor James Cox, an expert on securities law and accounting at Duke School of Law (and no relationship to Christopher Cox).

Finally, there has been a recognition that this plan is not working:

Last Friday, the commission formally ended the 2004 program, acknowledging that it had failed to anticipate the problems at Bear Stearns and the four other major investment banks.

"The last six months have made it abundantly clear that voluntary regulation does not work," Cox said.

The decision to shutter the program came after Cox was blamed by Senator John McCain, the Republican presidential candidate, for the crisis. McCain has demanded Cox's resignation.

You would think that we would have learned this lesson from the past. Unfortunately, politicians are blinded by the large political contributions they receive from the "Masters of the Universe" on Wall Street.

--SCC

CDOs, CDSs, and the Panic

2008-10-02T23:57:00.000-07:00

Republicans have been making an effort to lay this entire mess at the feet of the Democrats. This is entirely consistent with their ongoing efforts to avoid responsibility for anything bad that might have happened while they were in charge of the government.

Republicans controlled all three branches of government for most of the decade, including the critical years that saw a peak in the issuance of sub-prime mortgages. (If the Evil Democrats (TM) were so effective that they were able to run the government during those years, maybe they really should be elected, if only to replace the staggering ineffectiveness of the Republican majorities.)

CDOs peaked in 2006.

According to the Securities Industry and Financial Markets Association, aggregate global CDO issuance totaled US$ 157 billion in 2004, US$ 272 billion in 2005, US$ 552 billion in 2006 and US$ 503 billion in 2007.

Not that it's relevant, since this is something that would be regulated by the administration in power, not the Congress.

The Republican argument hinges on the idea that Pelosi and Reid were able to affect the rates of mortgage writing immediately upon taking power (even before passing any major relevant legislation), but that the Republican administration was helpless to stop them.

If the Republicans are such a bunch of feebs, why would I vote for them?

The truth is that both parties bear a portion of the blame for the crisis.

While the focus of the mainstream media has been on CDOs, the role of CDSs has been underreported.

Credit default swaps sit at the center of this whole mess. There are several times the level of outstanding debt contained in what amount to little more than casino-style bets. While these have existed in the past, they really came into vogue during the last decade.

Here's a reading assignment for the masochistically inclined:

Ok, I'll take mercy on you. The bottom line is that these are a way for investors to get insurance via an investment vehicle. Why don't they call it insurance? Because then it would fall under a number of state-level regulations, since insurance is regulated by the states. Among other things, insurers are required to prove that they have enough cash reserves to pay any reasonably expected number of claims.

So all the investment banks "share" risk by selling each other insurance. Now what happens if you have a systematic failure, where everyone needs to file a claim on their insurance?

Lousy shame that nobody managed to ask that question when they were designing their risk models...

So why didn't the regulators realize that insurance was being sold in a relatively unregulated environment? I'll leave that one as an exercise for the reader...

Here's a much better explainer:

Some key sections that should really tick you off:

As with reclamation of strip mines, the insurance companies will file for bankruptcy. Government, via a $700 billion emergency rescue plan, will step up to the plate. The costs will be paid by taxpayers who have seen only losses and no gains. Pursuant to a rescue plan that prohibits any and all forms of congressional or judicial oversight or opportunity to object.

Except for reports, to be filed twice yearly. Something akin to the fox being required to periodically report how many chickens he stole from the hen house, without being required to return any of the stolen chickens. And who will keep this count? The fox.

The inevitable bankruptcy of A.I.G? What other option exists for a company with a market value of $12 billion and liabilities of about $450 billion on credit default swaps written to hedge funds, many of which are headquartered offshore and thus pay no taxes in the United States. For this, the government is paying $85 billion in taxpayer's money. In return, the government, meaning the taxpayers, will be entitled to receive 80 percent of the company's stock. Stock that is all but assured to be totally worthless.

For insurance company executives, financial risks of corporate bankruptcy are all but non-existent. Lehman Brothers is a prime example. On September 15, Lehman filed bankruptcy - the biggest in America's history. Hours before, the New York headquarters was scrambling for cash. Other banks were refusing to provide loans to Lehman. Banks with loans outstanding were demanding immediate repayment. Counter parties to Lehman's credit default swaps were selling out at ten cents on the dollar.

Lehman's response: Hours before the bankruptcy filing, Lehman transferred $2.5 billion from the London office to the American holding company. This money had "accrued as part of group profits from the first nine months of the year" and will be used to pay employee bonuses. As a result, the London office had no funds with which to make the payroll.
...
Paulson, who steadfastly refuses to consider taking a hard look at A.I.G. and other financial firms. How could these companies, managed by the so-called "best and brightest" guys in the room, have committed such a long and horrendous series of "poor judgments"?

By accident, or sheer incompetence?

Hard to believe, given that everyone in the room knew millions of explosive mortgages were being written to families without sufficient income, or in some cases no documentation of any income at all, based on fraudulent appraisals and supported by fraudulent AAA ratings.

Given the size and blatant nature of the disaster, accident and incompetence excuses simply don't fly. Something more was involved. That something is the number and size of vultures who bet on and stand to gain from the disaster, and how much they stand to gain. Too many people owning fire insurance on my neighbor's valuable house.

Even though I agree with almost all of the above, I don't see that we had any choice but to do the bailout. In my opinion, Barney Franks had it right: Once Paulson had announced that a depression would ensue without the bailout, his pronouncement became a self-fulfilling prophecy.

Basically, I agree with his analysis that our economy has been kidnapped and is being held for ransom. Unlike him, I think we have to pay off the kidnapper.

Flame away...

--SCC

Alternative Minimum Tax

2008-10-02T06:36:00.000-07:00

Here's a good article describing the extent of the problem with the Alternative Minimum Tax. Without a real fix for this problem, the AMT will take a bigger and bigger bite out of middle class incomes.

--SCC

Wall Street and the Financial Collapse

2008-10-02T06:33:00.000-07:00

You've got to love Wall Street types. When the money is coming in, it's all about how they are so smart that government needs to get out of the way because they can protect themselves against fraud.

Then, when things are bad, it is the government's fault for getting out of the way while they were all trying to cheat each other.

By the way, I highly recommend the book "Liar's Poker" for a look at how Wall Street really operates. You should be able to pick it up second-hand for a song.

These guys aren't dumb. They're just convinced that they're so smart that they'll be able to find a chair before the music stops. The after-the-fact whining about how somebody should have saved them from themselves just rings false.

Congress (both parties) does not provide adequate oversight because they are bought and paid for by the same people who are trying to keep the cake-walk music going for just one more big score.

--SCC

Update on the Bailout

2008-09-30T11:26:00.000-07:00

AP provided an interesting update:

John McCain and Barack Obama offered long-distance help from the campaign trail. They announced separately that they support a plan that some House Republicans had pushed earlier: raising the federal deposit insurance limit from $100,000 to $250,000.

I wonder what the cost is. I'll bet it's not too high. How many people keep more than $100k in a bank account anyway?

For his part, President Bush sought to avoid being marginalized. He spoke with both nominees, and made another statement in the White House. "Congress must act," he demanded in front of the cameras.

Avoid being marginalized? I think that boat already sailed. Has there ever been another sitting president kept out of his party's convention?

Another possible change to the bill would modify "mark to market" accounting rules. Such rules require banks and other financial institutions to adjust the value of their assets to reflect current market prices, even if they plan to hold the assets for years.

And, after all, we can certainly trust the banks to price their holdings properly.

Some lawmakers reported a shift in constituent calls pouring into their offices. Calls and e-mails were overwhelmingly opposed to the rescue plan before Monday's vote, many offices said. But Monday's stock market dive prompted calls Tuesday from Americans furious about Congress's inaction, some said.

Decisive, as ever.

--SCC

The Real Motives for the Bailout

2008-09-30T09:23:00.000-07:00

CNBC was kind enough to report the real reason the bailout is needed:

“All our concern about bailing out Wall Street," Cashin said. "It’s really to try to free up Main Street. So the guy with the plumbing-supply business who gets a contract can go to the bank and get some of the money he needs overnight.”

You see, they're really in it for the little guy. It just gives you a warm feeling inside, doesn't it?

--SCC

Failure of the Bailout Vote

2008-09-30T09:11:00.000-07:00

Republicans are claiming that the defeat of the Bush/Paulson bailout plan was due to the Democrats' failure to garner enough votes on their side of the aisle. Yet more blame-mongering by the Republicans.

Among the more ridiculous blame games being played by the Republicans is the assertion that they would have passed the bill if only Pelosi hadn't been so mean to them.

So there are a dozen Republicans, who had decided that the package was in the best interests of the country, who changed their minds because of something Pelosi said? I guess we'd better hope that Osama doesn't say the wrong thing.

Don't get me wrong. I previously characterized Pelosi's speech as "partisan bile." But this whole non-issue is a pretty transparent attempt by the Republican leadership to cover up how badly they had mis-counted their caucus.

This isn't a bill that Pelosi or Franks wanted. They had wanted a bill that had a real cap on executive compensation, strict oversight, and bankruptcy court authority to change mortgage T&C. They gave up those elements based on assurances from the Republican leadership. (The executive compensation clause in Monday's bill was toothless.)

Giving that speech was a bad idea, but the failure of the Republican House leadership to deliver on their deal is going to have serious repercussions on a number of areas.

The reason that Clinton negotiated with the Republicans so successfully is because he knew that they would deliver what they promised. If this leadership can't do that, perhaps the caucus should choose leadership that represents them better.

According to Reuters:

Without the bailout plan, which would allow the Treasury to buy toxic mortgage-related assets from banks, credit markets around the world could remain frozen, which could lead to a recession.

I think that Franks had a point last week, that this bailout story is becoming something of a self-fulfilling prophecy. Right now, we're seeing a market rally based on promises that something will pass on Thursday.

Given how low the prices of the mortgage-backed CDOs is, there is probably a killing to be made out there. If only there were more transparency to the underlying loans, there would be more buyers.

A real failure here is in the design of the instruments. If there were better visibility, it is likely that the CDOs based on liar loans would be rated and priced differently, which would have removed the financial incentives for companies to originate them. This sort of design issue is something that regulators should have enforced. This particular problem has been known since the mid-1980s, so there is plenty of blame to be spread over both parties on this one.

According to the AP:

Banks were in miser mode after the House's rejection of the rescue package. The key bank-to-bank lending rate, the London Interbank Offered Rate, or LIBOR, soared to 4.05 percent from 3.88 percent for 3-month dollar loans, and to 6.88 percent for overnight dollar loans — the highest level since tracking began in 2001.

That's especially worrisome because normally, LIBOR is just slightly above the Federal Reserve's target fed funds rates, an interbank lending rate. Now, it is more than 4 percentage points above the target rate of 2 percent. That has troubling implications for other lending rates tied to LIBOR, including homeowners' adjustable rate mortgages.

--SCC

Uncertainty Over the Bailout

2008-09-26T02:42:00.000-07:00

Nobody is happy about the bailout, except for the investment bankers whose chestnuts will be rescued from the fire. But, for all the rhetoric about the importance of bi-partisan support for the bailout, some members of the GOP seem to be looking to score political points from opposition to the bailout.

I don't see the Democrats going along with even a modified version of the administration proposal unless the President and McCain can pull significant Republican congressional support behind the plan. Why should they go out on a limb while the Republican lawmakers play it safe?

It is time for McCain to play a leadership role in this battle. He needs to pick a side and support it publicly. Instead, we're getting a sort of mealy-mouthed attempt to placate the far right of his own party. From the AP story:

At one point in the White House meeting, according to two officials, McCain voiced support for Ryan's criticisms of the administration's proposal. Frank, a gruff Massachusetts liberal, angrily demanded to know what plan McCain favored.

These officials also said that as tempers flared, Bush struggled at times to maintain control.

At one point, several minutes into the session, Obama said it was time to hear from McCain. According to a Republican who was there, "all he said was, 'I support the principles that House Republicans are fighting for.'"

The modifications proposed by the Democrats all seem to me to be reasonable:

To be sure, Democrats demanded a number of changes in his $700 billion bailout plan, but administration insiders signaled they probably were acceptable. They included greater oversight, more protections for taxpayers, efforts to head off home foreclosures and piecemeal allocations of the federal money to buy toxic mortgage securities.

I also like the idea of limits on executive pay for participating companies, though I don't see that one passing in any substantive way. Everyone knows that investment bankers have taken home outlandish bonuses based on inflated valuations of these same CDOs that underlie the crisis in the first place. I don't see that it is unreasonable to ask them to take a pay cut to make up for their excesses.

--SCC

McCain's Temper

2008-09-07T09:24:00.000-07:00

McClatchy has an interesting story describing McCain's temper. Even many of his fans agree that he tends to be too impulsive.

"Yeah, he has a temper," said Delaware Sen. Joseph Biden , the Democratic vice-presidential nominee and Senate Foreign Relations Committee chairman. "It's obvious. You've seen it.

"But is John whatever his opposition painted him to be, this unstable guy who came out of a prisoner or war camp not capable of (acting rationally)? I don't buy that at all."

I think that Biden's take is probably correct. I do think that McCain sometimes acts impulsively, and that it is very difficult to get him to recognize an error and reverse course.

On the other hand, when he recognizes an error, I can't think of another prominent politician who issues a more gracious apology. (His apology after the Keating 5 affair should be in a textbook, and he became as passionate an advocate of campaign finance reform as there is in the Senate.)

--SCC

Let Sarah Speak

2008-09-07T02:35:00.000-07:00

Politico is reporting that Governor Palin has not made herself available to political reporters for in-depth interviews about her positions. This is not the sort of story that the Republicans want to have run about their candidate, since it will reinforce stereotypes about her.

Less than two months before voters hit the polls, Palin has yet to sit down for or even schedule an issues-oriented interview with any newspaper, magazine or television network.

She's tough, pretty, a good speaker, and she has a handle on the Republican "message." She would make a good showing. (I wouldn't characterize her as a "deep thinker," but she is very telegenic, and the Sunday morning shows aren't really good at evaluating how much depth a person has.)

In the meantime, the media will be thrilled to report on qvetching from issues-oriented reporters:

"We know now that Sarah Palin can give one hell of a speech," Carney said. "She's a natural. And that's no mean feat. We don't know yet and we won't know until you guys allow her to take questions, you know, can she answer tough questions about domestic policy, foreign policy?"

"But I mean, like from who?” Wallace asked. "From you?”

When Carney answered "Yes," Wallace followed up with, "Who cares?

"I think the American people want to see her," Wallace continued. "Who cares if she can talk to Time magazine?"

Later that day, Carney — who last week had a much-buzzed about interview with McCain in which the candidate became testy, and refused to answer some questions — told Politico that the McCain campaign is acting "condescending and smug" toward the press.

Palin is tough, pretty, a good speaker, and she has a handle on the Republican "message." The Republicans should let her speak to reporters. Maybe they don't want to start with Time, since their reporter seems to be particularly ticked off right now. Maybe they start with the Wall St Journal or the Washington Times.

Or maybe they put her back on TV, on the Sunday morning shows. She is a very telegenic candidate, and her depth of experience is much less important in a setting like television.

--SCC

Fact Check on the Republican Convention

2008-09-05T00:18:00.000-07:00

AP provides an interesting fact check for claims made during Republican convention speeches.

I'm sure that everyone is shocked, simply shocked to discover that politicians sometimes stretch the truth to make a rhetorical point.

Smugness and the VP Candidates

2008-09-04T04:13:00.000-07:00

I think we may be looking at a serious public health hazard during the vice presidential debate. Between Palin and Biden, the total level of smugness in the debating hall may well reach critical mass and ignite the world's atmosphere.

We have no choice but to condemn both Obama and McCain for their reckless disregard for public safety when they chose those two as their running mates.

--SCC

Palin Seeks to Ban Books

2008-09-03T19:37:00.000-07:00

The New York Times reports that Palin sought to ban books from the Wasilla library shortly after her election on a conservative religious platform. When the librarian refused to go along, Palin fired her. (The librarian was re-instated due to community pressure.)

Shortly after becoming mayor, former city officials and Wasilla residents said, Ms. Palin approached the town librarian about the possibility of banning some books, though she never followed through and it was unclear which books or passages were in question.

Ann Kilkenny, a Democrat who said she attended every City Council meeting in Ms. Palin’s first year in office, said Ms. Palin brought up the idea of banning some books at one meeting. “They were somehow morally or socially objectionable to her,” Ms. Kilkenny said.

The librarian, Mary Ellen Emmons, pledged to “resist all efforts at censorship,” Ms. Kilkenny recalled. Ms. Palin fired Ms. Emmons shortly after taking office but changed course after residents made a strong show of support. Ms. Emmons, who left her job and Wasilla a couple of years later, declined to comment for this article.

In 1996, Ms. Palin suggested to the local paper, The Frontiersman, that the conversations about banning books were “rhetorical.”

Noonan disses Palin

2008-09-03T17:38:00.000-07:00

Peggy Noonan let it all hang out over an open mike. After appearing on MSNBC to defend the Palin selection, Noonan was overheard telling GOP operative Mike Murphy:

"The most qualified? No. I think they went for this — excuse me — political bullshit about narratives," she said. "Every time the Republicans do that, because that's not where they live and it's not what they're good at, they blow it."

Murphy responded in kind:

"The greatness of McCain is no cynicism, and this is cynical."

Needless to say, this contrasted with Noonan's Wall St Journal column defending Palin. (She has since added comments to the top of that column explaining and apologizing for her open mike moment.)

--SCC

Thoughts on the Republican Convention

2008-09-02T19:47:00.000-07:00

As an outside observer, I found it pretty funny how hard the McCain camp tried to keep Bush away from his own party's convention. I halfway thought that they were going to tell Bush and Cheney that there was an urgent crisis that required their personal attention somewhere in Antarctica.

They finally settled on a truncated speech by Bush over CCTV. It was pretty funny watching him try to judge how long to pause after the applause lines. The crowd (which may have contained every last citizen who still likes Bush) seemed to try really hard to fill up the places where he paused too long, and to cut short applause when he didn't allow enough time.

(I had a picture in my mind's eye of McCain, shears in hand, hunting around backstage for the cable with Bush's feed...)

Thompson's speech was very well received. He presented the McCain bio, which is a very compelling story. And he told some good-ole-boy homilies about the Obama tax plan. (The PBS commentators pointed out that his performance tonight was much better than anything he did while he was promoting his own candidacy.)

Lieberman's speech was very creditable. His reception appeared to be awkwardly warm, which was probably to be expected.

--SCC

Palin's Assault on Science

2008-09-02T19:30:00.000-07:00

In August, Alaska filed suit against the federal government to overturn the listing of the polar bear as an endangered species. In support of this listing, Governor Palin wrote an editorial in the New York Times. This editorial claimed:

I strongly believe that adding them to the list is the wrong move at this time. My decision is based on a comprehensive review by state wildlife officials of scientific information from a broad range of climate, ice and polar bear experts.

Inside Higher Ed received a copy of this "comprehensive review," but only after substantial resistance from within the state government. The conclusion of this document was somewhat different than what Governor Palin suggested:

For the purpose of this review, we presumed that the projections of sea ice loss in the current scientific literature represent the best available information. Similarly, we have also presumed that the relatively substantial amount of information in the scientific literature on polar bear ecology, including habitat use and predator-prey dynamics, is applicable to polar bear subpopulations that have not been studied. Given these two critical assumptions and recognizing their significant associated uncertainties, the finding that the polar bear will decline significantly across much of its range is supported.

It seems likely that Palin would support a continuation of what has been termed Bush's "war on science."

--SCC

What Palin Really Thinks about Earmarks

2008-09-02T06:17:00.000-07:00

The Washington Post has an interesting article about Palin's record regarding earmarks as a mayor of Wasilla. It turns out that she hired lobbyists to secure earmarks for Wasilla. Once she had hired the right people and paid them the right amount of money, the taps were opened.

Since both Palin and McCain have pointed to her opposition to earmarks as a key qualification, we have to ask exactly how committed that opposition is.

As mayor of Wasilla, however, Palin oversaw the hiring of Robertson, Monagle & Eastaugh, an Anchorage-based law firm with close ties to Alaska's most senior Republicans: Rep. Don Young and Sen. Ted Stevens, who was indicted in July on charges of accepting illegal gifts. The Wasilla account was handled by the former chief of staff to Stevens, Steven W. Silver, who is a partner in the firm.
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Palin was elected mayor of Wasilla in 1996 on a campaign theme of "a time for change." According to a review of congressional spending by Taxpayers for Common Sense, a nonpartisan watchdog group in Washington, Wasilla did not receive any federal earmarks in the first few years of Palin's tenure.

Senate records show that Silver's firm began working for Palin in early 2000, just as federal money began flowing.

In fiscal 2000, Wasilla received a $1 million earmark, tucked into a transportation appropriations bill, for a rail and bus project in the town. And in the winter of 2000, Palin appeared before congressional appropriations committees to seek earmarks, according to a report in the Anchorage Daily News.

Palin and the Wasilla City Council increased Silver's fee from $24,000 to $36,000 a year by 2001, Senate records show.

Soon after, the city benefited from additional earmarks: $500,000 for a mental health center, $500,000 for the purchase of federal land and $450,000 to rehabilitate an agricultural processing facility. Then there was the $15 million rail project, intended to connect Wasilla with the town of Girdwood, where Stevens has a house.
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In fiscal year 2002, Wasilla took in $6.1 million in earmarks -- about $1,000 in federal money for every resident. By contrast, Boise, Idaho -- which has more than 190,000 residents -- received $6.9 million in earmarks in fiscal 2008.

All told, Wasilla benefited from $26.9 million in earmarks in Palin's final four years in office.
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In hiring Silver, Wasilla found someone who was a member of each lawmaker's inner circle. Silver has donated at least $11,400 to Stevens's political committees and $10,000 to Young's reelection committee in the past decade, according to Federal Election Commission records.

More on the Palin Selection

2008-09-01T11:04:00.000-07:00

I've been trying to give Palin a fair shake as a Vice Presidential nominee. After spending a couple of hours cruising around the Internet, I'm afraid that my fuse is burning short.

Palin's most attractive characteristic has been her reputation as a reform-minded governor. But even that is being called into serious doubt. As I posted earlier, Palin evidently supported the infamous bridge to nowhere before opposing it. Not only that, she kept the money that she claimed that she was saving the taxpayers.

From the Times Online piece:

in a first unsettling revelation – which the McCain camp will hope does not become a pattern – the Anchorage Daily News reported yesterday that when she ran for governor Mrs Palin campaigned on a “build the bridge” platform. The newspaper, in a reference to John Kerry’s alleged “flip-flopping” in the 2004 presidential campaign, said: “Palin was for the Bridge before she was against it.”

It also appears that Palin was nearly recalled as Mayor of Wasilla after she fired the police chief and library director for failing to support her campaign. This is certainly not an action one would expect of a "reform-minded" candidate.

There is also a collection of supporting documents related to the firing of the Public Safety Commissioner. From the Times Online piece:

The bipartisan investigation by the Alaskan state legislature, which is known locally as “Troopergate”, was launched last month when Mr Monegan, after he was fired, alleged publicly that he had been sacked for refusing to fire Mike Wooten, Mrs Palin’s brother-in-law, and after months of pressure by the Palin camp.

There is a fair amount of evidence that aides to Palin had placed pressure on Monegan. Palin denies that the pressure was applied at her direction.

From an AP report on troopergate:

Palin has denied the commissioner's dismissal had anything to do with her former brother-in-law. And she denied orchestrating the dozens of telephone calls made by her husband and members of her administration to Wooten's bosses.
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In 2005, before Palin ran for office, the Palin family accused Wooten of drinking a beer while in his patrol car, illegal hunting and firing a Taser at his 11-year-old stepson. The Palins also claimed Wooten threatened to kill Sarah Palin's father.

Wooten was suspended over the allegations for five days in 2006 but is still on the job. Monegan refused to comment on Wooten's situation, saying he could not discuss personnel matters.

More recently, Todd Palin said, he took his concerns over the governor's safety directly to Monegan. But he said he never told anyone to fire Wooten.
...
Attorney General Talis Colberg's conducted an investigation and found that 14 members of the Palin administration — including Colberg himself — made calls to Department of Public Safety officials about Wooten.

Her Replacement Commissioner had to resign after just two weeks on the job, following revelations about a reprimand he had received for sexual harassment.

It also appears to be well-known that Palin favors inserting creationism into the science classroom.

The volatile issue of teaching creation science in public schools popped up in the Alaska governor's race this week when Republican Sarah Palin said she thinks creationism should be taught alongside evolution in the state's public classrooms.

Palin was answering a question from the moderator near the conclusion of Wednesday night's televised debate on KAKM Channel 7 when she said, "Teach both. You know, don't be afraid of information. Healthy debate is so important, and it's so valuable in our schools. I am a proponent of teaching both."

Later, Palin backpedaled, perhaps after consulting with somebody familiar with the concept of a separation between church and state:

The question has divided local school boards in several places around the country and has come up in Alaska before, including once before the state Board of Education in 1993.

The teaching of creationism, which relies on the biblical account of the creation of life, has been ruled by the U.S. Supreme Court as an unconstitutional injection of religion into public education.

Last December, in a widely publicized local case, a federal judge in Pennsylvania threw out a city school board's requirement that "intelligent design" be mentioned briefly in science classes. Intelligent design proposes that biological life is so complex that some kind of intelligence must have shaped it.

In an interview Thursday, Palin said she meant only to say that discussion of alternative views should be allowed to arise in Alaska classrooms:

"I don't think there should be a prohibition against debate if it comes up in class. It doesn't have to be part of the curriculum."

She added that, if elected, she would not push the state Board of Education to add such creation-based alternatives to the state's required curriculum.

I've been waiting for her Republican defenders to explain what Palin's national security qualifications for the presidency are. Maybe she had written articles or editorials, or maybe she had experience traveling to other lands. So far, the best they've come up with is:

She has negotiated with the Canadian government over a natural gas pipeline from Alaska. (At least she has one good entry on her resume.)

Alaska shares a border with Russia. (Presumably, she has obtained insight into the Russian soul via osmosis across the Bering Strait.)

She first obtained a passport in 2007 to perform visits to the Alaska National Guard in Kuwait and Germany. (Her foreign travel experience is so limited that a stopover in Ireland is listed on her resume.)

In the August 31 "This Week" discussion of the Palin decision, George Will was so desperate that he had to fall back on the argument that he cared more about her positions than her experience. I can't think of another case where George Will has said such a thing.

There is more to the qualification to high executive branch office than experience. There is understanding the constitutional principle of limited government and the culture of corruption that inevitably develops in a capitol that abandones limited government; that regulates everything and subsidizes everybody. She understands that.

--SCC
Palin and Science
Palin and Earmarks
Palin Seeks to Ban Books
Palin & Funding for UnWed Mothers

Saving the Republican Party

2008-09-01T11:01:00.000-07:00

Robert Borosage suggests that the Republicans can save their party by a return to the values that guided Eisenhower. His article makes a number of good points; here are a couple of quick quotes:

So what can be done? In the best tradition of circular firing squads, Republicans are sniping at one another for the debacle. The fundamentalists blame the neo cons; the country clubbers deride the evangelicals; the corporate core scorns the supply-siders. And each of them is justified, for every strand of the Republican party contributed to conservative misrule. The neo-cons led us into the debacle that is Iraq, while shredding the Constitution. The evangelicals shocked America with the Schaivo grandstanding, and the efforts to enforce morality through radical right judges. The supply-siders really did practice "voodoo economics." And the corporate cronies descended into corruption and plunder shocking even by Washington standards.
...
Eisenhower reflected the common sense, country club values of a Republican Party that represented Main Street. He insisted on fiscal discipline, and was willing to raise taxes if necessary, even as he championed smaller government. To balance the budget, he put a lid on military spending, letting the services fight among themselves on how to divide the kitty. "We -- you and I, and our government," he warned, "must avoid the impulse to live only for today, plundering, for our own ease and convenience, the precious resources of tomorrow. We cannot mortgage the material assets of our grandchildren without risking the loss also of their political and spiritual heritage. We want democracy to survive for all generations to come, not to become the insolvent phantom of tomorrow."

Palin and the Bridge to Nowhere

2008-09-01T09:00:00.000-07:00

Reuters is reporting that the "Bridge to Nowhere" applause line used by Palin may be more controversial than it appeared at first blush. Palin originally supported the bridge during her campaign for governor, then reversed herself once in office.

The bridge itself was obviously a prime example of porkbarrel spending in Washington. Perhaps it looked like a great idea in Ketchikan, but it is pretty easy to see why taxpayers elsewhere were less keen on the project.

Palin especially risks charges of hypocrisy over the fact that she kept the federal money even after holding the big press conference to announce what a waste it was. That is going to strike a lot of voters (and taxpayers) as being two-faced, and not at all in sync with her image as a fresh-faced reformer.

In the city Ketchikan, the planned site of the so-called "Bridge to Nowhere," political leaders of both parties said the claim was false and a betrayal of their community, because she had supported the bridge and the earmark for it secured by Alaska's Congressional delegation during her run for governor.

The bridge, a span from the city to Gravina Island, home to only a few dozen people, secured a $223 million earmark in 2005. The pricey designation raised a furor and critics, including McCain, used the bridge as an example of wasteful federal spending on politicians' pet projects.

When she was running for governor in 2006, Palin said she was insulted by the term "bridge to nowhere," according to Ketchikan Mayor Bob Weinstein, a Democrat, and Mike Elerding, a Republican who was Palin's campaign coordinator in the southeast Alaska city.

"People are learning that she pandered to us by saying, I'm for this' ... and then when she found it was politically advantageous for her nationally, abruptly she starts using the very term that she said was insulting," Weinstein said.
...
The state, however, never gave back any of the money that was originally earmarked for the Gravina Island bridge, said Weinstein and Elerding.

In fact, the Palin administration has spent "tens of millions of dollars" in federal funds to start building a road on Gravina Island that is supposed to link up to the yet-to-be-built bridge, Weinstein said.

"She said 'thanks but no thanks,' but they kept the money," said Elerding about her applause line.

--SCC

The Iraq Surge

2008-09-01T03:55:00.000-07:00

The New York Times is reporting that there was significant debate within the Bush administration about whether to proceed with the Iraq "troop surge."

At the time, General Abizaid and others within the Pentagon objected that the surge would not be sustainable, and that it would not meet the goals laid out for it:

some officials and senior military officers are arguing against the idea, saying that it could undercut a sense of urgency for Iraqi units to take on a greater role in fighting the insurgency and preventing sectarian attacks. Gen. John P. Abizaid, the head of the United States Central Command, told Congress last week that the military was stretched so thin that such an increase could not be sustained over the long term.
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Temporary spikes in troop levels have succeeded in tamping down insurgent violence in Iraq in the past. But several Pentagon officials say they are not sure that the Army can achieve the same results against attacks fueled increasingly by sectarian tension. An increase in American forces this year to more than 140,000 from 128,000 has failed to stem the spike in sectarian attacks, they noted.

Representative Duncan Hunter, a California Republican who is losing the chairmanship of the Armed Services Committee at the end of the year, said at a news conference that rather than sending more American troops, he favored redeploying Iraqi units from largely calm areas to Baghdad and other violence-ridden sections of the country.

“The idea of having the Iraqi battalions that we’ve stood up and trained 50 to 100 miles away, in areas that are peaceful, simply staying in their barracks while we put together new rotations of Americans to take their place, simply doesn’t make sense,” he said.

Different factions within the administration favored different options:

But Mr. Bush’s penchant to defer to commanders in the field and to a powerful defense secretary delayed the development of a new approach until conditions in Iraq, in the words of a November 2006 analysis by the Central Intelligence Agency, resembled anarchy and “civil war.”

When the White House began its formal review of Iraq strategy that month, the Pentagon favored a stepped-up effort to transfer responsibility to Iraqi forces that would have facilitated American troop cuts.

The State Department promoted an alternative that would have focused on fighting terrorists belonging to Al Qaeda in Mesopotamia, containing the violence in Baghdad and intervening to quell sectarian violence only when it reached the proportions of “mass killing.”

The American ambassador to Baghdad argued that he should be given broad authority to negotiate a political compact among the Iraqis.

“The proposals to send more U.S. forces to Iraq would not produce a long-term solution and would make our policy less, not more, sustainable,” the ambassador, Zalmay Khalilzad, wrote in a classified cable.
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Because some aides to the Joint Chiefs of Staff were suggesting at the time that the military was stretched too thin to send many more troops, another security council staff member, William J. Luti, a retired Navy captain, was asked to quietly determine whether forces were available. Mr. Luti reported that five brigades’ worth of additional combat forces could be sent and recommended that they be deployed. The idea later won additional support among some officials as a result of a detailed study by Gen. Jack Keane, the former vice chief of staff at the Army, and Frederick W. Kagan, a military specialist, that was published by the American Enterprise Institute.

In the end, the troop reinforcement proposal split the military. Even after the president had made the basic decision to send additional troops, Gen. George W. Casey Jr., the top American commander in Iraq, never sought more than two brigades, about 8,000 troops in all, Defense Secretary Robert M. Gates reported to Mr. Bush in late December. But General Casey’s approach substantially differed from those of two officers who wanted a much bigger effort: the No. 2 commander in Iraq, Lt. Gen. Raymond T. Odierno, and Gen. David H. Petraeus, who helped oversee the military’s new counterinsurgency manual and whose views were known by the White House before he was publicly named to replace General Casey, administration officials said.
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Three days after the 2006 midterm Congressional elections, the White House finally convened a formal governmentwide review. The Republicans had taken a beating at the polls and the Iraq Study Group, a nonpartisan panel led by Lee H. Hamilton, the former Democratic representative, and James A. Baker III, the secretary of state to the first President Bush, was preparing to publish its recommendations — to step up efforts to train Iraqi troops and withdraw virtually all American combat brigades by spring 2008.
...
the debate continued to swirl. In an early December meeting of top officials, Mr. Cheney argued for sending forces to address the sectarian violence in Baghdad, while Ms. Rice reiterated her argument that there was little the military could do to stop sectarian violence there, according to notes taken by a participant.
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By now, there was a split in the military community. General Odierno had taken over in early December as the second-ranking officer in Iraq. He conducted a review that called for a minimum of five additional brigades in and around Baghdad and two more battalions in Anbar Province to reinforce efforts to work with Sunni tribes there.

As a subordinate to General Casey, General Odierno had no role in the security council review. But his views were known to General Keane, the retired four-star general who had helped oversee the study for the American Enterprise Institute that advocated adding five Army brigades and two Marine regiments. In separate meetings with Mr. Bush and Mr. Cheney on Dec. 11, General Keane relayed General Odierno’ assessment, which was forwarded by General Pace as well.

Along with Mr. Kagan, General Keane also described in detail to Mr. Cheney and his staff his own plan calling for American forces to be deployed in mixed Sunni-Shiite neighborhoods in Baghdad to demonstrate that the United States would be even-handed in protecting civilians.
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Donald H. Rumsfeld’s resignation on Nov. 6, and Mr. Gates’s swearing-in to replace him as defense secretary in mid-December, removed some of the institutional resistance at the Pentagon to the “surge.” Ms. Rice also became more supportive after it was made clear that demands would be made of the Iraqis.

(Reuters has published a summary of this article.)

Much of the success of the surge has been due to the "Sunni Awakening," where Sunni tribes switched sides and began to fight against al Qaeda rather than being allied with them. Some critics of the surge point out that the Sunni tribesmen are on Washington's payroll, and suggest that they may decide to defect back once the payments stop. Washington has been encouraging the Iraqi government to integrate as many of these fighters as possible into the Iraqi defense forces, which would reduce this possibility.

But even as it sought ways to support Maliki, the United States was also hedging its bets by working with tribes in Iraq’s far-flung provinces. Before the surge, the American military had joined forces with Abdul Sattar Buzaigh al-Rishawi (known as Abu Risha) and other Sunni sheiks against Sunni insurgents. The additional American troops during the surge reinforced that effort and encouraged it to spread. The Iraqis called the tribal movement a Sahawa or Awakening. The Americans initially called the tribesmen “concerned local citizens,” but when translated into Arabic that came out something like “worried Iraqis.” So the name was changed to “Sons of Iraq.”
...

There has also been resistance from the Iraqi government to applying the same strategy to the Shiite militias.

Together they devised a plan to rid Diwaniya of the Shiite militias that roamed freely through the streets, and to strengthen the hand of Shiite tribal leaders: a variation on the tribal-empowerment plan that had already done so much to blunt the power of Sunni insurgents in Iraq’s once-violent Anbar Province. But their strategy wound up attracting far more attention than they liked from the Shiite-led government of Nuri Kamal al-Maliki, for the simple reason that sharing power within the Shiite fold was just as difficult for many Shiites as sharing power with Sunnis.

Over the previous few years, my own trips through Iraq had focused mostly on the U.S. and Iraqi governments’ struggle with Sunni insurgents in battlegrounds like Mosul, Baquba, Hit and Arab Jabour. But the nature of the war has fundamentally changed. The American “surge,” together with a strategy that emphasized protecting civilians and engaging with Sunni tribesmen, weakened Sunni insurgents and jihadists. The bitter fighting between Shiites and Sunnis that turned Baghdad into a killing ground of car bombs, suicide attacks and mutilated corpses has quieted down. And now this sectarian struggle has been eclipsed by a growing tussle for power among the Shiites themselves. The competition involves Prime Minister Maliki and the Shiite religious parties (the Islamic Supreme Council of Iraq and Maliki’s Dawa Party) that constitute the ruling hierarchy in Baghdad; Moktada al-Sadr’s weakened but still-popular political movement and its military wing, the Jaish al-Mahdi, or Mahdi Army; and, increasingly, Shiite tribes.
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Shiite tribal leaders had begun to network with the Sunni Anbar sheiks to discuss how they might bring more security to the south and enhance their own political clout. Maj. Gen. John Allen, who served as the second-highest-ranking American officer in Anbar in 2007 and early 2008, recalled how Shiite sheiks from neighboring Karbala Province visited Anbar for a tribal get-together. They chanted poetry and closed the session by posing before an Awakening flag: crossed scimitars, the scales of justice and a pot of coffee on a yellow field. There were other meetings. “Their plea was, ‘Help us to get organized and we can throw off this thing called the Mahdi Army, and we can get the tribal society dominant again in the south, and we can begin to bring social order to the south akin to the way Sunni tribes had brought social order back to Anbar Province,’ ” Allen recalled.
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After word of the program spread, dozens of sheiks began to approach Othman to get in on it. The next step was to import the program from the approach roads to the streets of the city. The sheiks were less of a force inside the city, so Team Phoenix put out the word that patrol volunteers would be paid slightly less than the pay scale for an Iraqi Army soldier. To protect the police’s prerogative, it was decided that the citizen-watch groups inside the city would not be armed. They would be equipped with radios to contact the police and would be outfitted with orange reflector belts for identification.
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On Dec. 2, 2007, there was a meeting of the Ministerial Committee for National Security, a top-level body in Baghdad that Maliki and senior American officials used to coordinate policy. One agenda item was the Sons of Iraq, of which there were now more than 100,000, largely as a result of the Sunni Awakening. As the Americans saw it, the program was integral to the turnaround in Anbar and helped improve security in Abu Ghraib, Yusufiya, Diyala and even Baghdad. They wanted the Maliki government to integrate at least 20,000 and ideally 30,000 of the recruits into the Iraqi Army and police and find ways to employ the rest.
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Maliki appeared to accept as many as 103,000 Sons of Iraq but insisted there could be no tribal Awakening in the Shiite south, his own power base. “The prime minister said, ‘Look, it is different in the south,’ ” recalled a senior American official who asked not to be named, because of the sensitivity of the subject. “ ‘There is not the same security imperative there. The Iraqi security forces can take on the security threat that comes from militias. It is not a question of the tribes being actively in bed with the militia. There is a different security dynamic. The Awakening would be a political movement. That is not what the coalition should be doing.’ I think he did not want us to be creating political movements to challenge him. I have got to say there is some merit to that.”

--SCC

Tension Ahead of Monday EU Meeting

2008-08-31T17:05:00.000-07:00

Reuters is reporting that Russia continues to play a heavy hand ahead of Monday's EU meeting. President Medvedev has threatened to retaliate with sanctions against any countries taking what Russia sees as "aggressive" actions.

"Russia does not want confrontation with any country. Russia does not plan to isolate itself," Medvedev said in an interview with Russia's three main television stations.

But he added: "Everyone should understand that if someone launches an aggressive sortie, he will receive a response." He said Russian law allowed the Kremlin to impose sanctions on other states, though it preferred not to go down that path.

Russia continues to contend that their invasion of Georgia was necessary to halt a genocide in South Ossetia and Abkhazia.

the Kremlin said it acted to prevent what it called genocide against the separatist regions.

If they have evidence of such action, they should bring it before the international community by filing war crimes charges against the responsible people or against the Georgian government itself. Without such action by Georgia, their charges will be interpreted as just more hot air.

Georgia called for the EU to provide monitors to replace the Russian "peacekeepers"

Georgia urged the European Union to impose sanctions against those doing business with the two separatist regions, authorize a civilian mission to monitor buffer zones around them and give Tbilisi about $2 billion to help to help repair damage.

"Europe can do a lot, starting with sending a mission of civilian monitors, which would lead to an international peacekeeping mechanism that would replace the presence of Russian troops," Prime Minister Lado Gurgenidze told Reuters in Brussels.

While the UK favors a direct response to Russian aggression in the area, many continental powers, especially France and Germany, favor a more nuanced approach.

British Prime Minister Gordon Brown said Russia's intervention in Georgia was dangerous and unacceptable.

"In the light of Russian actions, the EU should review -- root and branch -- our relationship with Russia," Brown wrote in a comment published in Britain's Observer newspaper.

The German foreign minister said Moscow deserved criticism but Europe needed cooperation with Russia.

"Europe would only be hurting itself if we were to get full of emotion and slam all the doors shut to the rooms that we will want to enter afterwards," Steinmeier said.

Russia supplies more than a quarter of Europe's gas needs. Some observers say this makes tough EU sanctions unlikely.

The AP reports that Russia has strengthened its military commitment to South Ossetia and Abkhazia:

MOSCOW - Russia's president said Sunday his country will give military aid to the two separatist regions at the center of the war with Georgia — signaling Moscow has no intention of backing down in the face of Western pressure.
...
Medvedev's decision Tuesday to recognize the Georgian breakaway provinces South Ossetia and Abkhazia as independent drew condemnation from the West. Though no other countries have followed Russia's lead, Medvedev reaffirmed the decision on Sunday.

"We have made our decision, and it's irreversible," he said in a speech broadcast on Russian television.

In particular, Medvedev has signaled that he views the confrontation in the Caucasus as a way to challenge US dominance of international affairs.

Dmitry Medvedev also warned that American domination of world affairs is unacceptable, though he insisted that Russia did not want hostile relations with the United States and other Western nations.
...
Medvedev said Sunday the world would be more stable if the U.S. was less dominant.

"The world must be multi-polar; domination is unacceptable," he said. "We can't accept the world order where all decisions are made by one nation, even by such serious and authoritative nation as the United States. Such a world would be unstable and prone to conflicts."

--SCC

Impact of the Candidates' Tax Proposals

2008-08-30T17:25:00.000-07:00

The Tax Policy Center recently released an updated report estimating the deficit impacts of the Obama and McCain tax plans. Due to a lack of detailed information from either campaign, they made some reasonable assumptions about exactly what was being proposed.

The Tax Policy Center reports that:

Compared to current law, TPC estimates the Obama plan would cut taxes by $2.9 trillion over the 2009-2018 period. McCain would reduce taxes by nearly $4.2 trillion

Moreover,

Neither candidate’s plan would significantly increase economic growth unless offset by spending cuts or tax increases that the campaigns have not specified.

Because neither campaign is proposing a fiscally responsible program, I do not feel that I can endorse either candidate in this election. Our children and grandchildren should not be saddled with debts resulting from our large structural deficit. Each generation should pay its own bills.

I did stumble across an interesting calculator estimating the amount of difference that the Obama tax plan would make for a particular taxpayer:
Alchemy Today Tax Calculator

(While most people will receive a tax cut under Obama's plan, a Gallup poll shows most Americans believing that Obama's plan will result in increased taxes for their household.)

McCain's Surprise VP Choice

2008-08-29T14:22:00.001-07:00

McCain's decision to choose Sarah Palin as his VP candidate is bound to affect his argument that Obama is not qualified to lead the country. As reported by Reuters:

Palin, the former mayor of the town of Wasilla, is virtually unknown and untested nationally. That could hurt McCain's argument that Obama, 47, a first-term senator from Illinois, is too inexperienced to handle the White House.
...
"Today, John McCain put the former mayor of a town of 9,000 with zero foreign policy experience a heartbeat away from the presidency," said Obama campaign spokesman Bill Burton, adding that she would work to overturn abortion rights and continue Republican economic policies.

The lack-of-experience angle is getting traction with the press. The AP reports:

She is younger and less experienced than the first-term Illinois senator, and brings an ethical shadow to the ticket. A governor for just 20 months, she was two-term mayor of Wasilla, Alaska, a town of 6,500 where the biggest issue is controlling growth and the biggest civic worry is whether there will be enough snow for the Iditarod dog-mushing race.

"On his 72nd birthday, is this really the one-heartbeat-away he wants to put in the White House?" said Rep. Rahm Emanuel, the No. 3 Democrat in the House. "What does this say about his judgment?"
...
The pick earned McCain praise Friday from evangelicals and other social conservatives who have been skeptical of him. "Conservatives will be thrilled with this pick," said Greg Mueller, a conservative GOP strategist.

The price for that support could be high. Palin's lack of experience undercuts GOP charges that Obama is not ready to be commander in chief. McCain said in April that he was determined to avoid a pick like Dan Quayle, the little-known Indiana senator whom George H.W. Bush put on his ticket in 1988. The choice proved embarrassing.

Quayle "had not been briefed and prepared for some of the questions," McCain said while discussing his vice presidential search. He was clearly aware that, as a septuagenarian, the decision he made about a running mate would be "of enhanced importance."

Four months and one birthday later, McCain's announcement of Palin made clear the paucity of her experience.

"As the head of Alaska's National Guard and as the mother of a soldier herself," the statement said, "Gov. Palin understands what it takes to lead our nation and she understands the importance of supporting our troops."

It seems pretty clear that this choice was aimed at attracting disaffected supporters of Hillary Clinton:

But she could help him appeal to disaffected supporters of Democrat Hillary Clinton, who lost a bruising primary to Obama. Palin noted the achievements of Clinton and Democrat Geraldine Ferraro, who in 1984 became the first woman vice presidential nominee of a major party.

"Hillary left 18 million cracks in the highest, hardest glass ceiling in America," she said, referring to the 18 million votes Clinton received in the primaries. "But it turns out the women of America aren't finished yet, and we can shatter that glass ceiling once and for all."

Huckabee also tried to twist the knife that many Hillary supporters seem to feel Obama inserted between their shoulder blades. From MSNBC:

Huckabee also used the Palin pick to reach out to women.

"Governor Palin ... will remind women that if they are not welcome on the Democrat's ticket, they have a place with Republicans," he said.

Palin does have a reputation as a reformer, which may help reinforce McCain's image in that area. Reuters reports:

Alaska's first women governor and the state's youngest chief executive, the 44-year-old Palin gained statewide fame as a whistle-blower calling attention to ethical violations of high-ranking Republican officials, including the chairman of the state Republican Party.

MSNBC reports that there may be some skeletons in Palin's own closet, however, when it comes to ethical issues:

But Palin’s seemingly bright future was clouded in late July when the state Legislature voted to hire an independent investigator to find out whether she tried to have a state official fire her ex-brother-in-law from his job as a state trooper.

The allegation was made by former Department of Public Safety Commissioner Walt Monegan, whom Palin fired in mid-July.

“It is a governor’s prerogative, a right, to fill that Cabinet with members whom she or he believes will do best for the people whom we are serving,” Palin told CNBC’s Larry Kudlow in an interview on Aug. 1. “So I look forward to any kind of investigation or questions being asked because I’ve got nothing to hide.”
...
"A legislative panel has launched a $100,000 investigation to determine if Palin dismissed Alaska's public safety commissioner because he would not fire the trooper, Mike Wooten," the AP wrote earlier this month. "Wooten went through a messy divorce from Palin's sister. Palin has denied the commissioner's dismissal had anything to do with her former brother-in-law. And she denied orchestrating the dozens of telephone calls made by her husband and members of her administration to Wooten's bosses. Palin said she welcomes the investigation: 'Hold me accountable.'"

Although she's not linked to them, Sen. Ted Stevens and Rep. Don Young are facing legal/ethical troubles. In fact, Stevens' trial will start in late September, so the Alaska Republican Party is a mess. And Palin's trooper trouble could play into that.

It will be interesting to see which story line catches on: "Palin, the reformer/maverick", or "Palin, under investigation?"

Russia Plans to Formally Annex South Ossetia

2008-08-29T06:09:00.000-07:00

The AP is reporting that South Ossetia has announced that it will be formally annexed by Russia:

TSKHINVALI, Georgia - Russia intends to eventually absorb Georgia's breakaway province of South Ossetia, a South Ossetian official said Friday, three days after Moscow recognized the region as independent and drew criticism from the West.
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Russian President Dmitry Medvedev and the region's leader, Eduard Kokoity, discussed the future of South Ossetia earlier this week in Moscow, South Ossetian parliamentary speaker Znaur Gassiyev said.

Russia will absorb South Ossetia "in several years" or earlier, a position was "firmly stated by both leaders," Gassiyev said.

My view is that the formal process will be nothing more than a recognition of the de facto annexation of South Ossetia and Abkhazia by Russia. Short of starting World War III, it is not clear that the West will be able to prevent this annexation.

On the other hand, I can see no good reason for the West to recognize Russia's actions. There are areas where Russia would like Western cooperation, which means that there are ways for the West to express its displeasure short of a full-scale deployment of NATO forces.

The deployment of NATO naval forces to the Black Sea is another way in which the West can present its discontent.

In Georgia, the vice speaker of parliament, Gigi Tsereteli, said the statement cannot be taken seriously.

"The separatist regimes of Abkhazia and South Ossetia and the Russian authorities are cut off from reality," he said in Tbilisi. "The world has already become different and Russia will not long be able to occupy sovereign Georgian territory."

I suppose he has to say that, but I have to respectfully disagree. I think that Russia intends to annex the two provinces, and that they will do so. I don't see that internal nationalist Russian pressures will allow Medvedev and Putin to do otherwise.

Georgia has announced that they will suspend relations with Russia as a result of the Russian announcement:

Georgia said it would cut diplomatic ties with Russia after Moscow recognized its rebel South Ossetia and Abkhazia regions. A Russian Foreign Ministry source told RIA news agency Moscow would respond by closing its embassy in Tbilisi.

Reuters is reporting that the Europeans are unwilling to impose significant sanctions on Russia for its actions:

PARIS/MOSCOW (Reuters) - A defiant Russia said on Friday that international condemnation of its actions in Georgia was "biased," while the appetite in the European Union for imposing sanctions on Moscow appeared to dwindle.
...
European diplomats said they had received clear signals from the Kremlin that Russia would retaliate if the European Union imposed punitive measures over Georgia when EU leaders meet for an emergency summit next week.
...
A senior diplomat for EU president France said sanctions would not be adopted at the summit. That message contradicted remarks on Thursday by French Foreign Minister Bernard Kouchner, who said sanctions were among the options on the table.

"The time to pass sanctions has certainly not come," the French diplomat said.

In particular, the Europeans are concerned about their oil and gas supplies from Russia. Of course, everyone denies that this is having any impact on how they see the situation:

European diplomats said they had received clear signals from the Kremlin that Russia would retaliate if the European Union imposed punitive measures over Georgia when EU leaders meet for an emergency summit next week.

Russian oil companies and government officials denied a British newspaper report that they were preparing to restrict oil supplies in response to sanctions.
...
Western policy-makers drafting a response to the Kremlin's actions are mindful that Russia supplies more than a quarter of Europe's gas and that its support is vital to maintain pressure on Iran over its nuclear program.

European diplomats said on Friday they were expecting Russian retaliation if the EU took punitive measures.

"They've been saying loud and clear that they feel they could do whatever they want with impunity," said one diplomat.

Russian threats have gone beyond oil and gas supplies at other issues of mutual concern:

Putin also hinted Russia's cooperation with the West on issues such as trade and nuclear non-proliferation could be at stake in the row over Georgia.

In the meantime, Russian President Medvedev is trying to sell a bizarre conspiracy theory by which the US "provoked" Russian intervention as a way to promote John McCain's candidacy. I don't see this conspiracy theory selling well in the US, even among Bush's staunchest critics. According to the BBC:

Mr Putin told CNN US citizens were "in the area" during the conflict over South Ossetia and were "taking direct orders from their leaders".

He said his defence officials had told him the provocation was to benefit one of the US presidential candidates.

--SCC

Obama Appeals to Pragmatists

2008-08-29T04:21:00.000-07:00

Obama made a definite appeal to independents and pragmatists during his acceptance speech. Time will tell how much of it he can deliver, but the approach seems like the right one. The real question is whether the party hacks will allow this sort of approach to proceed, or whether they will want to keep the same old wedge issues active to stir up party activists during the next election.

America, our work will not be easy. The challenges we face require tough choices, and Democrats as well as Republicans will need to cast off the worn-out ideas and politics of the past. For part of what has been lost these past eight years can't just be measured by lost wages or bigger trade deficits. What has also been lost is our sense of common purpose - our sense of higher purpose. And that's what we have to restore.

We may not agree on abortion, but surely we can agree on reducing the number of unwanted pregnancies in this country. The reality of gun ownership may be different for hunters in rural Ohio than for those plagued by gang-violence in Cleveland, but don't tell me we can't uphold the Second Amendment while keeping AK-47s out of the hands of criminals. I know there are differences on same-sex marriage, but surely we can agree that our gay and lesbian brothers and sisters deserve to visit the person they love in the hospital and to live lives free of discrimination. Passions fly on immigration, but I don't know anyone who benefits when a mother is separated from her infant child or an employer undercuts American wages by hiring illegal workers. This too is part of America's promise - the promise of a democracy where we can find the strength and grace to bridge divides and unite in common effort.

The Great Wealth Transfer

2008-08-28T17:34:00.000-07:00

Paul Krugman's Rolling Stone article discusses the transfer of wealth to the wealthiest few. It appeared in 2006, but the trends he discusses have accelerated.

An important part of the article is a debunking of the different myths explaining how this happened:

MYTH #1: INEQUALITY IS MAINLY A PROBLEM OF POVERTY.
...
The real divergence in fortunes is between the great majority of Americans and a very small, extremely wealthy minority
...
MYTH #2: INEQUALITY IS MAINLY A PROBLEM OF EDUCATION.
...
Being highly educated won't make you into a winner in today's U.S. economy. At best, it makes you somewhat less of a loser.
...
MYTH #3: INEQUALITY DOESN'T REALLY MATTER.
...
America actually has less social mobility than other advanced countries: These days, Horatio Alger has moved to Canada or Finland. It's easier for a poor child to make it into the upper-middle class in just about every other advanced country -- including famously class-conscious Britain -- than it is in the United States.

A lot of this has been accomplished through Republican tax policy and the associated misinformation.

the administration has engaged in a systematic campaign of disinformation about whose taxes have been cut. Indeed, one of Bush's first actions after taking office was to tell the Treasury Department to stop producing estimates of how tax cuts are distributed by income class -- that is, information on who gained how much. Instead, official reports on taxes under Bush are textbook examples of how to mislead with statistics, presenting a welter of confusing numbers that convey the false impression that the tax cuts favor middle-class families, not the wealthy.

In reality, only a few middle-class families received a significant tax cut under Bush. But every wealthy American -- especially those who live off of stock earnings or their inheritance -- got a big tax cut. To picture who gained the most, imagine the son of a very wealthy man, who expects to inherit $50 million in stock and live off the dividends. Before the Bush tax cuts, our lucky heir-to-be would have paid about $27 million in estate taxes and contributed 39.6 percent of his dividend income in taxes. Once Bush's cuts go into effect, he could inherit the whole estate tax-free and pay a tax rate of only fifteen percent on his stock earnings. Truly, this is a very good time to be one of the have mores.

Framing the Immigration Debate

2008-08-28T16:14:00.000-07:00

The Rockridge Institute has an interesting article on how to frame the immigration debate. It makes the point that the Conservatives have succeeded in framing the debate in the most racially-polarizing way possible. The costs associated with immigration (by which we mean hispanic immigration, of course) are considered, but the benefits are not. More importantly we don't think about the complex interrelationship of issues that drive the debate. The Institute's report makes for thought-provoking reading.

Fission vs Coal

2008-08-28T15:43:00.000-07:00

Consider this page by the Virtual Nuclear Tourist. It shows the costs associated with fission generation as being about the same as for coal.

This does not take into account the costs associated with the environmental damage from mining the coal, let alone the costs associated with the increased level of mercury in the ecosystem. While the nuclear fission plant produces concentrated waste products, the coal plant spews them throughout the environment.

This Scitizen article argues that renewable sources are enough to avoid using either coal or nuclear fission. My feeling is that this may have been true had we gotten started earlier, but that we don't have the time left to implement these alternatives. I think that we have to proceed with a buildout of fission plants to help us replace oil and coal power generation.

--SCC

A Few Global Warming Links

2008-08-28T15:24:00.000-07:00

Conservatives frequently claim that there is no evidence to support the global warming hypothesis. I thought it would be useful to post a few links related to global warming related research.

"A guide to facts and fictions about climate change" by the Royal Society. This document seeks to debunk the most common arguments raised by the skeptics.

The Intergovernmental Panel on Climate Change report on "The Physical Science Basis of Climate Change."

Guardian report: Scientists offered cash to dispute climate study

Beyond any Global Warming-related issues, we need to move away from the oil/coal economy due to the hidden costs of keeping that economy going. We end up paying military, economic, and political costs to keep the oil economy rolling.

In addition, it seems very likely that we are at or near the global peak production levels for petroleum. Given the rapid growth in demand for oil from India and China, we can expect to see oil costs spike upwards over the next few years. We should prepare for this change by moving as quickly as possible to other fuel sources, especially wind, solar, geothermal, and nuclear fission.

--SCC

Georgia and Imperial Overstretch

2008-08-27T11:17:00.001-07:00

Russia's intervention in Georgia has effectively called the Western bluff in the Caucasus. As a practical matter, it is hard to imagine a scenario where we would deploy combat troops to defend Georgia. Humanitarian aid, perhaps coupled with overheated rhetoric, seems a more likely response.

The overheated rhetoric from the West is a classic example of imperial overstretch. In a time when large structural deficits limit the activities of the US, it is likely that other countries will see fit to call the West's bluff.

--SCC

Thoughts on the Democratic Convention

2008-08-27T07:23:00.000-07:00

What in the world were the Democrats thinking on Monday night? Using that dry-as-dirt "town hall" meeting with the talking heads just before Pelosi? Even Jim Lehrer was making fun of how boring the meeting was. "The audience does not appear to be very attentive," he said, while snickering with his guests.

Pelosi, of course, is not exactly a stem-winder herself. Sure, she hit all the traditional Democratic themes. And it is important for Team Obama to get a woman out front and center to try to smooth over feathers ruffled by the primary race against Hillary. But maybe they could have warmed up the audience with somebody who knows how to give a speech. The audience started to warm up when Jackson, Jr spoke. Maybe they could have started with him. Or some music. Or something. I swear I was hearing crickets chirp while Pelosi spoke.

Hillary's speech Tuesday night hit all the "party unity" points she needed to hit to keep her name around for a few more years. She didn't seem at all bitter about not getting the Veep spot. It's not clear to me how that would have worked out anyway. Hillary is about the only person who can put a muzzle on Bill, and Obama would have just come out of it looking weak.

The Republicans seem to be having a good time. Good for them. Romney was a good choice for front man, since he is able to state their position without coming off as nasty. McCain could certainly do worse than him as a Veep choice, though there is the not-so-hidden anti-Mormon sentiment among his evangelical supporters.

--SCC

The Russian Land Grab Continues

2008-08-23T17:59:00.000-07:00

With the Russians stating their intention to continue to occupy the Black Sea port of Goti, it is becoming ever clearer that this has less to do with "peacekeeping," and more to do with resurgent Russian imperialism.

Russia interprets the cease-fire accord as allowing it to keep a substantial military presence in Georgia because of earlier peacekeeping agreements that ended fighting in the separatist areas of Abkhazia and South Ossetia in the 1990s.

But even though Poti is completely outside the buffer zone for Abkhazia, Nogovitsyn said Russian troops are not leaving and will patrol the city.

"Poti is not in the security zone, but that doesn't mean that we will sit behind the fence and watch as they drive around in Hummers," Nogovitsyn said, making an acid reference to four U.S. Humvees the Russians seized in Poti this week. The vehicles were used in previous joint U.S.-Georgian military exercises.

The comment about the Hummers is clearly intended to tweak the Bush administration, whose overheated rhetoric has done nothing to ease the situation.

The US should not cower before the Russian bear, but it should treat the Russians with respect. For years, we have failed to take into account Russian sensibilities on a range of issues. Diplomacy and tact could have been used to secure much better results than the Bush administration's policy of arrogance and neglect.

--SCC

Biden: A Conventional Choice

2008-08-23T03:24:00.001-07:00

A Vice Presidential choice is one of the earliest substantial windows into a presidential candidate's decision-making process. By choosing Biden, Obama has made a conventional choice.

Conventional wisdom stated that Obama needed someone with lots of foreign policy expertise. Conventional wisdom also suggested that the chairman of the foreign relations committee would be the person with such expertise.

Unfortunately, experience does not always lead to expertise. Don't get me wrong; Biden did some good work in the Balkans. And he was right to label Milosevic as a "war criminal." (Things should be called what they are.)

On the other hand, Biden has a long history of popping off in ways and times that are not appropriate. His face-to-face indictment of Milosevic, while true, was not the most useful way to improve the situation in the Balkans. A frequent criticism of Biden is that his mouth shifts into overdrive while his brain is still in neutral.

But even more important than Biden's infamous mouth is his tendency towards conventional thinking. A big part of his self-assuredness comes from his inability to consider solutions that are not part of the mainstream conversation. More than any other aspect of the Presidency, foreign policy requires an imaginative, original approach. Conventional thinking allows other countries to steal a march on the US, since our reactions will be predictable and relatively unimaginative.

In the runup to the Iraq War, Biden demonstrated this inability to think outside the box by throwing his support behind the administration. The Bush administration set up a false dicotomy (either "cave in to Saddam" or "invade and occupy"). Biden was in a position to lead more substantive criticism of the Bush approach. QuickOverview has a pretty good summary of Biden's position on Iraq:

Following the September 11, 2001 attacks, Biden was supportive of the Bush administration efforts, calling for additional ground troops in Afghanistan and agreeing with the administration's assertion that Saddam Hussein needed to be eliminated. The Bush administration rejected an effort Biden undertook with Senator Richard Lugar to pass a resolution authorizing military action only after the exhaustion of diplomatic efforts. In October 2002, Biden supported the final resolution of support for war in Iraq. He continues to support the Bush Administration's war effort and appropriations to pay for it, but has argued repeatedly that more soldiers are needed, the war should be internationalized, and the Bush administration should "level with the American people" about the cost and length of the conflict.

In addition to being in conflict with Obama's longstanding opposition to the war, it is hard to see any original thinking in this position.

Obama has repeatedly stated that McCain has demonstrated a lack of judgment, based on his support for the invasion and occupation of Iraq. How can he defend his running mate's support for the same conflict? If McCain's support is such a fatal flaw, what are we to make of Obama's willingness to put this fatal flaw within a heartbeat of the presidency?

Moreover, McCain's early and courageous support for the surge demonstrated a willingness to think outside the box. He took on a sitting Defense Secretary, and he worked tirelessly to pull together a behind-the-scenes coalition to force Bush to change his approach towards the war and shift towards the approach supported by General Petraeus. More important than the "surge" has been the change in approach in Iraq, as exemplified by Petraeus' battle to capture the hearts and minds of the Iraqi public.

--SCC

More on the Re-awakened Russian Bear

2008-08-22T07:06:00.000-07:00

With each day's news reports, we get more clarity as to why it is taking so long for Russia to withdraw its troops. It looks more and more like ethnic Russians in Abkhazia and South Ossetia are using the cover of Russian occupation forces to make it difficult for their ethnic Georgian neighbors to return.
Zbingiew Brezezinski has summed up Russia's policy in the area:

Russia has deliberately instigated the breakup of Georgian territory. Moscow has promoted secessionist activities in several Georgian provinces: Abkhazia, Ajaria and, of course, South Ossetia. It has sponsored rebellious governments in these territories, armed their forces and even bestowed Russian citizenship on the secessionists.

It appears that Russia may be targeting Ukraine next. The Telegraph reports that

Ukraine is investigating claims that Russia has been distributing passports in the port of Sevastopol, raising fears that the Kremlin could be stoking separatist sentiment in the Crimea as a prelude to possible military intervention.

Earlier this year, the Russians made a point of asserting their claims to Sevastopol. Their claim amounts to an assertion that Sevastopol was not transferred to the Ukraine in 1954.

This is in addition to the economic isolation of Kazakhstan and Uzbekistan; economic pressures on the Baltic states of Lithuania, Estonia, and Latvia; and the cyber attacks on Estonia. Russia may already have achieved an effective partition of Moldova

The bear has definitely woken up. The US needs to find a way to deal effectively with the re-constitution of Russia as a great power. The approach recommended by Cato does not seem the right way to go. We are well past the era when the US could cower behind the bulwark of the Atlantic. The US is also a great power, and there are responsibilities that attach to that. But a balanced, respectful dialog between the two powers would be a huge step forward from the overheated rhetoric and disrespect we've been seeing.

--SCC

Buffett and the Trade Deficit

2008-08-22T04:11:00.001-07:00

In a 2003 Fortune article, Warren Buffett spoke out about the USA's large and growing deficit problem.

To resolve the trade deficit, he suggests a solution that he admits is somewhat "gimmicky" and "a tariff by another name." His suggestion is something called "Import Certificates" (ICs), which would be issued to US exporters in amounts equal to the amount that they export. An importer would need to purchase ICs in the amount needed for what they want to import.

The Levy Economics Institute examined the potential effects of this proposal in a white paper. They suggested variations on the Buffett template to reduce the economic impacts, including government-sponsored auctions of the ICs. They also note that such a program is likely to lead to retaliatory trade practices by other countries.

Both articles make for very interesting reading. One way or another, the trade deficit will be corrected. If we don't correct it with policy-based solutions, the market will eventually correct it for us. Unfortunately, the Invisible Hand is not known for gentle, controlled transitions.

--SCC

The Missile Defense Shield

2008-08-20T22:16:00.000-07:00

I'm not a fan of the missile defense shield proposed for Poland. I have questions about its effectiveness against real threats, which makes it a waste of money. (I hate spending money on "solutions" that don't solve anything other than transferring money to defense contractors' pockets.) I just don't see it as worth the level of friction it has caused in our relationship with Russia.

There is little doubt that the missile defense shield is aimed at Russia as well as Iran. Once the shield is in place, it becomes easier to expand it than it was to put it in place. That reality helps to explain the Russian reaction.

There are serious concerns about the shield's effectiveness, but a prospective attacker would have to assume that it would work when planning an attack. There is a reasonable argument that the shield doesn't have to actually work in order to be effective. It just has to pose enough of a wild card to force it to be taken into account in mission planning.

It is reasonable to assume that the Russians are unlikely to have felt the need to flex their muscle if we hadn't been pushing the missile shield so hard.

--SCC

Russia's de facto Annexation

2008-08-18T17:03:00.000-07:00

Reuters reported on Medvedev's latest comments about the breakaway Georgian provinces.

"If anyone thinks that they can kill our citizens and escape unpunished, we will never allow this," Medvedev told World War Two veterans in the Russian city of Kursk. "If anyone tries this again, we will come out with a crushing response."

"We have all the necessary resources, political, economic and military. If anyone had any illusions about this, they have to abandon them."

Note the "our citizens" part of the statement. I'm reading that as a de facto annexation of the two provinces.

--SCC

Germany and Georgian NATO Membership

2008-08-17T08:23:00.001-07:00

It appears that Germany has changed its mind regarding Georgian membership in NATO.

This is an interesting development. Russian allegations of Georgian abuses have not been investigated fully yet. And Russia has been signaling that the two breakaway provinces may be absorbed into the resurgent Russian empire.

The Bush administration has been pushing for Georgian NATO membership, so this shift by Germany may signal closer cooperation between Berlin and Washington.

--SCC

Georgia and NATO/EU Membership

2008-08-17T03:48:00.000-07:00

I don't see them becoming a member of either NATO or the EU while there are legitimate questions about their treatment of either breakaway province. (It will be interesting to see how any charges filed by the Russians play out.)

Given the number of third party witnesses to the events described by the Georgians in their charges against the Russians, I think those are a foregone conclusion.)

It was unwise in the extreme for the Georgians to give the Russians a pretext to invade. After the cyber attacks on Estonia, it was pretty clear that the Russians were looking for an arena to send a message to the world (especially to their former possessions). I think the text of that message reads "We're baaack!"

--SCC

The Target on Poland's Back

2008-08-16T11:22:00.000-07:00

Russia's reaction to the agreement between the US and Poland is pretty predictable. Basically, they are threatening to roll over the top of Poland in the event of a nuclear showdown with the US.

Poland agreed on Thursday to host elements of a U.S. global anti-missile system after Washington agreed to boost Poland's own military air defenses.

"The USA is engaged in an anti-missile defense for its own government, and not for Poland. And Poland, in deploying (elements of the system) opens itself to a military strike. That is 100 percent," Interfax quoted Nogovitsyn as saying.
...
In agreeing to deploy elements of the U.S. missile shield, Poland "becomes an actionable object. Those targets are destroyed in the first order," Nogovitsyn said.

This is not a new position for Poland. They have a long history of being rolled over whenever they got in the way of an expansionist power. Honestly, they probably made about as good a deal as it was possible for them to make.

This is not really about Russian fears that the system actually poses a real threat to their capabilities:

The 10 interceptor missiles to be based at a site in northern Poland compare with Russia's own nuclear arsenal of more than 5,000 ballistic warheads.

This is about national prestige and a newly resurgent Russian imperialism.

I've not been a fan of this missile defense for reasons I'll leave for another time. On the other hand, Russia's move into Georgia needed a real response of some sort. This isn't a bad one given the circumstances.

It would have been unwise to directly involve the US military in Georgia for a range of reasons. It would have been even worse to continue the administration's initial policy of apparent appeasement. I'm glad to see the administration seems to have found a policy with an appropriate level of backbone.

It seems clear that Russia intended to throw a bit of a scare into its erstwhile possessions. In that, they succeeded.

--SCC

Democrats Shift on Drilling

2008-08-16T11:11:00.000-07:00

The Gang of Ten proposal seems to have broken the logjam on energy policy. Nancy Pelosi indicated a willingness to put forward a plan included expanded drilling on the OCS.

Democratic proposals to tap the nation's petroleum reserve, curb oil speculation and force oil companies to drill on already leased federal lands were blocked by Republicans trying to force votes on offshore drilling.

Yet any vote on drilling is likely to force the Republicans' hand, since it will likely be packaged with unpopular proposals to tap the petroleum reserve and recoup unpaid royalties from the late 1990s to pay for renewable energy projects.

"This comprehensive Democratic approach will ensure energy independence which is essential to our national security, will create millions of good paying jobs here at home in a new green economy, and will take major steps forward in addressing the global climate crisis," said Pelosi, who criticized Republicans' "drill only" plan.

Republicans view this proposal as a Trojan Horse to bring in things that they view unfavorably.

Hopefully we will begin to seem more motion towards a plan that does more than just drill. Something like my proposed compromise may emerge as both sides start to move.

--SCC

Taking Care of Business

2008-08-16T05:45:00.000-07:00

David Broder has an interesting article on the focus from within the Obama campaign. One of the most impressive facets of Obama's organization has been the way that they establish priorities and go after them. I have questions and concerns about his lack of experience on the international stage, and I have serious objections to his lack of a fiscal responsibility platform, but he does bring a level of clear-headed organization to the campaign that is very unusual.

Given that, I have to wonder why he has been so slow to reach out to the Clintons and their supporters in a more substantial way. Given how Bill loves the spotlight, you know that he would be thrilled to be asked to stump or fundraise for Obama, but only if they reach out to him. (If he isn't stroked, you can count on him to sulk and make unhelpful comments.) And it would heal some of the scars from the primary season. Obama's failure to reconcile with the Clintons earlier demonstrates a lack of the whole-souled greatness of spirit that we would hope to see in someone who is marketing himself as a healer.

He is finally reaching out to Florida and Michigan Clinton supporters. And he has finally been dragged to the realization that he should allow Hillary's name to be placed in nomination and allow a roll call vote.

Democratic leaders have recognized and are trying to counter reports of the split from within the party. (Certainly, the RNC has tried to make hay out of the story line. And the Democrats have tried to make hay out of the RNC's efforts.) But however happy a face we try to put on things, there are a lot of embittered Clinton supporters out in Democratia. Obama needs to set a high priority on reaching out to these people if he wants to win.

--SCC

One Person, No Votes

2008-08-15T22:49:00.000-07:00

Once again, the Diebold voting machines have proven to be inaccurate. ComputerWorld reports that Premier (aka Diebold) voting machines dropped votes in this year's primary elections.

Suddenly, the Diebold CEO's promise to deliver Ohio (and the 2004 election) for Bush looks even more sinister.

--SCC

The Iraq War, in their Own Words

2008-08-15T22:45:00.000-07:00

I strongly recommend viewing the Leading to War documentary. It makes for very interesting viewing, especially given how things have played out.

--SCC

More on the Cyber War in Georgia

2008-08-15T20:34:00.000-07:00

Here are a few updates about the battle for Georgian cyberspace

Dancho Danchev has an interesting discussion of some of the different attack scenarios against Georgia. Is it hacktivism, or is it directly sponsored by the state?

The Russian Business Network is reputed to be behind the attacks themselves. The traffic patterns in that link are certainly very suggestive.

The Register has a balanced, readable report on the cyber attacks for the general public.

--SCC

Georgia, Russia, and the World

2008-08-15T17:57:00.000-07:00

Time magazine published an interesting article on the situation in Georgia, and how it reflects on the strength of Russia and the weakness of NATO. The author says that Russia may have won a great victory by freezing NATO membership, as the Europeans are unlikely to want to expand in the face of the newly resurgent Russian empire.

In the meantime, Russia is rattling its saber at Poland. One has to question whether this missile defense system is worth the increased tension in the area. It had better be one heck of a system.

Finally, here's a take on the Bush administration's efforts in Georgia and their likely outcome.

--SCC

Georgia and Energy

2008-08-14T17:21:00.000-07:00

Not to put too fine a point on it, but the situation in Georgia is another example of the dangers of the oil economy. Russia's military resurgence is fueled by oil and gas. Europe's reticence in talking back to Russia is partially due to their dependence upon Russia for their fuel.

When we look at the total cost of the oil economy, we have to take into account the national security implications of continuing down the same path.

To the extent that we can convert energy use to wind, solar, geothermal, and fission, we will be increasing our ability to withstand pressure from major oil producing states, including Russia. Given the long-term economic and national security benefits of setting up this infrastructure, it makes sense to make energy conversion into a national priority.

--SCC

Weapons of Mass Deception

2008-08-14T16:36:00.000-07:00

One of the more interesting stories to emerge lately is the tale of the faked WMD letter produced by the CIA. This letter purported to be from the head of Iraqi intelligence, and constituted an important piece of "evidence" of the involvement of Iraq in 9/11 and the existence of WMD in Iraq. (This was despite credible, explicit statements from Habbush stating that neither assertion was true.)

"The White House had concocted a fake letter from Habbush to Saddam, backdated to July 1, 2001," Suskind wrote. "It said that 9/11 ringleader Mohammad Atta had actually trained for his mission in Iraq thus showing, finally, that there was an operational link between Saddam and al-Qaida, something the vice president's office had been pressing CIA to prove since 9/11 as a justification to invade Iraq. There is no link."

...

"After being told that Habbush had said there were no WMD, Bush was frustrated," Suskind wrote in the book, quoting Bush telling an aide, "Why don't they ask him to give us something we can use to help us make our case?"

That darned reality just keeps getting in the way.

Politico also posted an interesting take on the issue:

The author claims that such an operation, part of “false pretenses” for war, would apparently constitute illegal White House use of the CIA to influence a domestic audience, an arguably impeachable offense.
...
Suskind writes that the White House had “ignored the Iraq intelligence chief’s accurate disclosure that there were no weapons of mass destruction in Iraq – intelligence they received in plenty of time to stop an invasion.
...
“It is not the sort of offense, such as assault or burglary, that carries specific penalties, for example, a fine or jail time,” Suskind writes. “It is much broader than that. It pertains to the White House’s knowingly misusing an arm of government, the sort of thing generally taken up in impeachment proceedings.”

If Monica was worth an impeachment, Bush's broad abuses of authority ought to be worth kicking him and Cheney out on their kiesters.

And back to the perils of using facts to formulate policy:

--John Maguire, one of two men who oversaw the CIA’s Iraq Operations Group, was frustrated by what Suskind describes as the “tendency of the White House to ignore advice it didn’t want to hear – advice that contradicted its willed certainty, political judgments, or rigid message strategies.”

That's a pretty common complaint about the White House, where no science or intelligence report goes unedited by the political office.

--Suskind writes in the acknowledgments that his research assistant, Greg Jackson, “was sent to New York on a project for the book” in September 2007 and was “detained by federal agents in Manhattan. He was interrogated and his notes were confiscated, violations of his First and Fourth Amendment rights.” The author provides no further detail.

Bush probably tried to invalidate the First Amendment with a signing statement first...

From MSNBC:

Suskind says he spoke on the record with U.S. intelligence officials who stated that Bush was informed unequivocally in January 2003 that Saddam had no weapons of mass destruction. Nonetheless, his book relates, Bush decided to invade Iraq three months later — with the forged letter from the head of Iraqi intelligence to Saddam bolstering the U.S. rationale to go into war.

Why even bother to have an intelligence service? Just ask Cheney what he wants the truth to be today.

Blumenthal reports that the Bush administration deliberately spun intelligence to make it appear that the evidence was strong for WMDs in Iraq:

Precisely because of the qualms the administration encountered, it created a rogue intelligence operation, the Office of Special Plans, located within the Pentagon and under the control of neo-conservatives. The OSP roamed outside the ordinary inter-agency process, stamping its approval on stories from Iraqi exiles that the other agencies dismissed as lacking credibility, and feeding them to the president.

At the same time, constant pressure was applied to the intelligence agencies to force their compliance. In one case, a senior intelligence officer who refused to buckle under was removed.

Bruce Hardcastle was a senior officer for the Middle East for the Defence Intelligence Agency. When Bush insisted that Saddam was actively and urgently engaged in a nuclear weapons programme and had renewed production of chemical weapons, the DIA reported otherwise. According to Patrick Lang, the former head of human intelligence at the CIA, Hardcastle "told [the Bush administration] that the way they were handling evidence was wrong." The response was not simply to remove Hardcastle from his post: "They did away with his job," Lang says. "They wanted only liaison officers ... not a senior intelligence person who argued with them."

When the state department's bureau of intelligence and research (INR) submitted reports which did not support the administration's case - saying, for example, that the aluminum tubes Saddam possessed were for conventional rocketry, not nuclear weapons (a report corroborated by department of energy analysts), or that mobile laboratories were not for WMDs, or that the story about Saddam seeking uranium in Niger was bogus, or that there was no link between Saddam and al-Qaida (a report backed by the CIA) - its analyses were shunted aside. Greg Thielman, chief of the INR at the time, told me: "Everyone in the intelligence community knew that the White House couldn't care less about any information suggesting that there were no WMDs or that the UN inspectors were very effective."

Then we get conservatives coming out to say that the administration never really said that they were sure that there were WMD in Iraq. Oh, really?

These problems were not limited to our side of the Atlantic. The Irregular Times reports that some of the evidence provided by the British intelligence services was actually lifted wholesale from a student's term paper.

The British government called their report an "intelligence dossier" that described "up-to-date" information on Iraqi efforts to evade weapons inspectors. However, it turns out that the majority of the document was plagiarized, taken word-for-word without permission from a collection of old academic articles written well before the current set of weapons inspections even began. In one case, a plagiarized article was based upon information that was twelve years old, dating back to the time of the first Gulf War had even begun back in 1991. The author, Ibrahim al-Marashi, complained, "Had they consulted me, I could have provided them with more updated information."

One of the plagiarized passages from this article, written for a September 2002 issue of the journal Middle East Review of International Affairs, contained paragraphs that were cited as originally written by Scott Ritter, a former chief weapons inspector who has become a strong opponent of a preemptive invasion of Iraq by the United States. Mr. Ritter was unaware that his own writings would be depicted as the product of British intelligence work in a document designed to promote the very war he opposes. "I'll be more sceptical of any British intelligence I read in future," said al-Marashi in a telephone interview. "It was a case of cut and paste. They even left in my mistakes." In another interview, al-Marashi commented, "This is wholesale deception. How can the British public trust the Government if it is up to these sort of tricks? People will treat any other information they publish with a lot of scepticism from now on."

The Cato Institute published an opinion piece describing the US and British officials as using "magical thinking" in their planning for the Iraq invasion, including the hunt for WMDs. Perhaps next time they should go where the facts take them.

--SCC

Saber-Rattling and Iran

2008-08-13T18:52:00.000-07:00

The White House secretly stepped up covert operations inside Iran to destabilize its leadership.

Is he trying to start a war as an "October surprise?" It's no secret that he doesn't like either Obama or McCain. Is he trying to stick them with a fait accompli?

(And what is the Democratically-controlled Congress doing giving him this money? Didn't Iraq demonstrate that he can't be trusted? What a bunch of wimps.)

I'm not quite sure what to make of Iran's nuclear ambitions. I halfway think that they looked at the nifty deal that North Korea got and are looking to see how they can cash in.

Seymour Hersh's frightening article demonstrates just how little backbone the Democrats have. Find a backbone, guys. Bush seems to be a nut job who thinks that God wants him to start Armageddon in the Middle East.

some members of the Democratic leadership—Congress has been under Democratic control since the 2006 elections—were willing, in secret, to go along with the Administration in expanding covert activities directed at Iran, while the Party’s presumptive candidate for President, Barack Obama, has said that he favors direct talks and diplomacy.
...
The request for funding came in the same period in which the Administration was coming to terms with a National Intelligence Estimate, released in December, that concluded that Iran had halted its work on nuclear weapons in 2003. The Administration downplayed the significance of the N.I.E., and, while saying that it was committed to diplomacy, continued to emphasize that urgent action was essential to counter the Iranian nuclear threat.

Once again, Bush is saying that he knows more than the Intelligence professionals. I wonder how many times Cheney sent the NIE back for re-work? At least this time they stood up to him.

Secretary of Defense Gates met with the Democratic caucus in the Senate. (Such meetings are held regularly.) Gates warned of the consequences if the Bush Administration staged a preëmptive strike on Iran, saying, as the senator recalled, “We’ll create generations of jihadists, and our grandchildren will be battling our enemies here in America.” Gates’s comments stunned the Democrats at the lunch, and another senator asked whether Gates was speaking for Bush and Vice-President Dick Cheney. Gates’s answer, the senator told me, was “Let’s just say that I’m here speaking for myself.”

Bush seems to think that we should also ignore the advice being given us by the military professionals. That would pretty much be in character.

In March, Fallon resigned under pressure, after giving a series of interviews stating his reservations about an armed attack on Iran. For example, late last year he told the Financial Times that the “real objective” of U.S. policy was to change the Iranians’ behavior, and that “attacking them as a means to get to that spot strikes me as being not the first choice.”

If you can't get the generals to go along, fire them.

The White House believes that one size fits all, but the legal issues surrounding extrajudicial killings in Waziristan are less of a problem because Al Qaeda and the Taliban cross the border into Afghanistan and back again, often with U.S. and NATO forces in hot pursuit. The situation is not nearly as clear in the Iranian case. All the considerations—judicial, strategic, and political—are different in Iran.”

He added, “There is huge opposition inside the intelligence community to the idea of waging a covert war inside Iran, and using Baluchis and Ahwazis as surrogates. The leaders of our Special Operations community all have remarkable physical courage, but they are less likely to voice their opposition to policy. Iran is not Waziristan.”

Frightening.

--SCC

Cheney as a war profiteer

2008-08-13T18:42:00.000-07:00

Aside from the favors that Cheney was able to throw to his buddies in the oil industry, it looks like Cheney was able to enrich himself while giving no-bid contracts to his buddies in Halliburton and KBR. To add insult to injury, the work that they did was so sub-standard that it has killed our servicepeople.

Some of Cheney's defenders have tried to draw a line between KBR and Halliburton, based on the fact that they are different companies. But that is a fairly recent development. According to the relevant Wikipedia article:

On April 15, 2006, Halliburton filed a registration statement with the United States Securities and Exchange Commission to sell up to 20 percent of its KBR stock on the New York Stock Exchange (NYSE). On November 16, 2006, KBR shares were offered for the public in an Initial Public Offering with shares priced at $17. The shares closed on the first day up more than 22 percent to $20.75 a share.[2] Halliburton announced on April 5, 2007 that it had finally broken ties with KBR, which has been its contracting, engineering and construction unit as a part of the company for 44 years.

--SCC

The 9/11 Connection

2008-08-13T18:36:00.001-07:00

Fans of the invasion of Iraq point at "evidence" that Iraq was connected to 9/11. Bush and Cheney have long insisted that there was a connection. Now we know that some of their "evidence" was fabricated.

In fact, the administration has long known that Saddam viewed al Qaeda as a threat. Not only did they know that Saddam was not allied with al Qaeda, they hid and obfuscated the real intelligence that the did have.

--SCC

The Oil Grab

2008-08-13T17:58:00.000-07:00

For whatever reason, conservatives are desperate to "prove" that the invasion and occupation of Iraq was not an oil grab. Unfortunately for them, the facts say otherwise.

Dilip Hiro's excellent column discusses several key pieces of evidence demonstrating that the Bush administration's policy in Iraq amounted to an oil grab. The whole article is required reading for anyone interested in the subject. In particular:

Bush's first Treasury Secretary, Paul O'Neill tells us that invading Iraq was on the agenda of the very National Security Council meeting, and was the topic of the entire following NSC meeting. Among documents prepared for that meeting was a map of Iraq prepared by the DIA that showed oil fields and proposed which companies should be considered for control of those fields.

Falah Al Jibury told BBC's Newsnight that he had been engaged in discussions with the Bush administration about the disposition of the Iraqi oil industry within weeks of Bush taking office. He also reported that he participated in secret meetings to interview successors to Saddam Hussein.

After the invasion, suspected WMD sites and cultural treasures were looted and ransacked with no interference by US troops. Oil installations and the Oil Ministry's headquarters, of course, were well guarded.

This is not to say that the US is alone in placing economic interests above moral imperatives. The Observer reported that Russia's reticence in joining Bush's coalition had more to do with fear of losing their lucrative deal with Saddam than with qualms about the invasion.

Greg Muttitt reported on the impact of the new no-bid contracts by outside oil companies within Iraq. It is clear that these contracts are the culmination of the Bush administration's policy to grab Iraq's oil and turn it over to his buddies in the oil industry.

--SCC

Cyber War in Georgia

2008-08-12T22:33:00.000-07:00

The Russians have continued the pattern they started in Estonia. Once again, they are using cyber warfare to achieve national security aims.

Perhaps we in the US should get serious about computer security?

--SCC

Looking Deep into Putin's Eyes

2008-08-12T21:30:00.000-07:00

AP, reporting from Georgia

In Tskhinvali, South Ossetia's provincial capital, the body of a Georgian soldier lay in the street along with debris. A poster hanging nearby showed Russian Prime Minister Vladimir Putin and the slogan "Say yes to peace and stability" as South Ossetian separatist fighters launched rockets at a Georgian plane soaring overhead. Broken glass and other debris littered the ground.

Georgia borders the Black Sea between Turkey and Russia and was ruled by Moscow for most of the two centuries preceding the 1991 breakup of the Soviet Union. South Ossetia and Abkhazia have run their own affairs without international recognition since fighting to split from Georgia in the early 1990s.

Both separatist provinces are backed by Russia, which appears open to absorbing them.

Medvedev said Tuesday that Russian peacekeepers will stay in both South Ossetia and Abkhazia, and Saakashvili said his government will officially designate Russian peacekeepers in those breakaway provinces as occupying forces.

The Russian onslaught angered the West and drew tough words from President Bush, but some Georgians are disappointed that the U.S. did not intervene to protect its tiny ally.

"I'd like to think the words really do matter," U.S. Deputy Assistant Secretary of State Matthew Bryza said Tuesday in Tbilisi.

Bryza declined to say if the U.S. would provide military support in the event that Russia expands its operations saying only: "I hope we'll never come to the question of what we do if Russia refuses to observe international law."

Medvedev said that people in both breakaway provinces must be allowed to decide whether they want to remain part of Russia.

Bush and Putin press converence

PRESIDENT BUSH: I will answer the question. I looked the man in the eye. I found him to be very straightforward and trustworthy. We had a very good dialogue. I was able to get a sense of his soul; a man deeply committed to his country and the best interests of his country.

For myself, I like McCain's crack about looking into Putin's eyes and seeing the initials "KGB" inscribed there.

--SCC

Georgia and Appeasement

2008-08-11T19:46:00.000-07:00

Where's the line between appeasement and jingoism?

I have to think that somewhere in between them there is space for Bush to invite Putin over to the embassy in Beijing for a frank discussion. I know that his schedule was jam-packed with fireworks displays, but maybe he could have taken a few minutes from his busy schedule.

Or he could have just put on a bowler hat, carried an umbrella, looked into Putin's eyes, and assured us that he had achieved peace in our time.

--SCC

Georgia and Iraq

2008-08-11T18:10:00.000-07:00

Reuters on the Russian invasion of Georgia:

Putin mocked the support given by the West to Saakashvili, comparing him to former Iraqi leader Saddam Hussein, who was hanged in 2006 for executing Shiites.

"They (the Americans) of course had to hang Saddam Hussein for destroying several Shiite villages," Putin said.

"But the current Georgian rulers who in one hour simply wiped 10 Ossetian villages from the face of the earth, the Georgian rulers which used tanks to run over children and the elderly, which threw civilians into cellars and burnt them -- they (Georgian leaders) are players that have to be protected."

This is a good example of how the oil grab in Iraq has cost us credibility in the international community. Besides the damage to our military, Bush damaged our moral authority with the Iraq oil grab. It will be much harder to lead a substantive international coalition when most of the countries involved are still ticked off at us.

I don't think that it is any secret that the Russians are aiming at "regime change" of a foreign government they don't like. Perhaps they feel that they are engaged in a "preemptive war." I just heard the Russian ambassador explaining that Russian operations were aimed at "supporting the peacekeepers." None of this sounds familiar, does it?

Every American single combat brigade is busy because of the Iraq oil grab. (Every combat brigade is either returning from deployment, preparing to be deployed, or deployed.)

Well, we can try to rattle our empty scabbard. If we ask nicely, the French may back us up by treating some Russian tourists rudely. (Never mind, they were planning on doing that anyway.)

Ok, that was mean. At least the French are actively involved. I hope Bush is enjoying the Olympics.

--SCC

Georgia and the Candidates

2008-08-10T18:12:00.000-07:00

Politico had an interesting bit of commentary comparing the approaches of McCain and Obama in the early hours of the Georgia invasion. There are definitely distinct style differences between the two.

A McCain adviser suggested that Obama’s statement constituted appeasement, while Obama’s camp suggested that McCain was being needlessly belligerent and dangerously quick to judge a complicated situation.

At least neither of them is W.

--SCC

One Potential Energy Compromise

2008-08-09T17:06:00.000-07:00

Paris Hilton and the "Gang of Ten" have hinted at it. There is a fairly obvious compromise to be reached on energy, but it is going to require flexibility on both sides of the aisle.

As I see it, the compromise would take the form of something like:
Allow drilling under the following conditions:

Royalty payments in line with what other countries get for similar resources. This includes hiring auditors and checking oil company books for cheating, which is currently costing taxpayers billions of dollars.

Strict enforcement of environmental regulations. (The current framework is a joke, as BP demonstrated in Alaska.)

Use it or lose it. Strict timelines to explore and develop, or the lease goes back in the pot. If you want to push it, companies who want to play in the new playground need to convert their existing leases to a similar framework.

Promote alternative energy:

Restore favorable tax treatment for solar, wind, and geothermal. The period of restoration should be the same as the length of the above-mentioned leases. Funding for this tax treatment should come from the above-mentioned royalties.

Government subsidies for research into improved battery, fuel cell, and other energy storage technologies. Researchers who accept this funding must cut the taxpayer in for a share of the licensing fees on any patents arising from this research. Again, funding to come from those royalties.

Incentives for fission plants:
Create a standard-plan plant (or several standard designs) which would have a fast-track approval, since a lot of the pre-approval studies would be the same between plants. (This isn't as hard as it sounds, since such plans already exist.)

As a practical matter, some incentives may need to be included for "clean coal" and natural gas, though I don't think either is actually necessary or particularly desirable. (Coal because it is a dying technology; natural gas because it doesn't need the incentives to take an increasing share of the energy market.)

I don't like all the parts of this "compromise," for reasons that are probably clear to people who have read my other posts. On the other hand, this is the sort of compromise that could get enough support to pass, and could actually make a difference in preparing the country for the coming changes in the energy marketplace.

(No, this is not the same as the Republican proposal. While they claim that they are "all of the above," they have structured their incentives to benefit the oil companies while providing minimal assistance to people who are deploying and installing the technology. The McCain proposal includes incentives for R&D, but none for installation or deployment.)

The allowance for drilling is not because I believe that drilling ANWR or OCS (Outer Continental Shelf) will have much of an impact on our energy future. It won't. What it gives us is a dedicated funding source to move us to sources of energy that will actually improve our future competitiveness.

--SCC

The Politics of Energy

2008-08-06T17:26:00.000-07:00

Here are some more postings on the Gang of Ten proposal from different viewpoints:

A Democratic view
A Republican view

Both Republicans and Democrats seem to see the energy issue strictly as an electoral issue rather than as an issue that is important to the health of the country as a whole.

--SCC

The Iraq Obsession

2008-08-06T16:51:00.000-07:00

Credible evidence from several sources demonstrates that Iraq was in Bush's crosshairs from day one.

Richard Clarke was the head of the US government's anti-terrorism efforts leading up to 9/11. His book revealed some disturbing facts about the Bush administration's monomania regarding Iraq:

Clarke says that as early as the day after the attacks, Secretary of Defense Donald Rumsfeld was pushing for retaliatory strikes on Iraq, even though al Qaeda was based in Afghanistan.

After the president returned to the White House on Sept. 11, he and his top advisers, including Clarke, began holding meetings about how to respond and retaliate. As Clarke writes in his book, he expected the administration to focus its military response on Osama bin Laden and al Qaeda. He says he was surprised that the talk quickly turned to Iraq.

"Rumsfeld was saying that we needed to bomb Iraq," Clarke said to Stahl. "And we all said ... no, no. Al-Qaeda is in Afghanistan. We need to bomb Afghanistan. And Rumsfeld said there aren't any good targets in Afghanistan. And there are lots of good targets in Iraq. I said, 'Well, there are lots of good targets in lots of places, but Iraq had nothing to do with it.

"I think they wanted to believe that there was a connection, but the CIA was sitting there, the FBI was sitting there, I was sitting there saying we've looked at this issue for years. For years we've looked and there's just no connection."

"The president dragged me into a room with a couple of other people, shut the door, and said, 'I want you to find whether Iraq did this.' Now he never said, 'Make it up.' But the entire conversation left me in absolutely no doubt that George Bush wanted me to come back with a report that said Iraq did this.

"I said, 'Mr. President. We've done this before. We have been looking at this. We looked at it with an open mind. There's no connection.'

"He came back at me and said, "Iraq! Saddam! Find out if there's a connection.' And in a very intimidating way. I mean that we should come back with that answer. We wrote a report."

Clarke continued, "It was a serious look. We got together all the FBI experts, all the CIA experts. We wrote the report. We sent the report out to CIA and found FBI and said, 'Will you sign this report?' They all cleared the report. And we sent it up to the president and it got bounced by the National Security Advisor or Deputy. It got bounced and sent back saying, 'Wrong answer. ... Do it again.'

"So what did we do after 9/11? We invade an oil-rich and occupy an oil-rich Arab country which was doing nothing to threaten us. In other words, we stepped right into bin Laden's propaganda. And the result of that is that al Qaeda and organizations like it, offshoots of it, second-generation al Qaeda have been greatly strengthened."

Sounds like Mr Clarke also thinks it was an oil grab. Of course, what does he know? He's just the guy who ran the black helicopters.

Paul O'Neill, Bush's Treasury Secretary tells some interesting stories about the early days of the Bush administration.

At cabinet meetings, he says the president was "like a blind man in a roomful of deaf people. There is no discernible connection," forcing top officials to act "on little more than hunches about what the president might think."

“From the very beginning, there was a conviction, that Saddam Hussein was a bad person and that he needed to go,” says O’Neill, who adds that going after Saddam was topic "A" 10 days after the inauguration - eight months before Sept. 11.

“From the very first instance, it was about Iraq. It was about what we can do to change this regime,” says Suskind. “Day one, these things were laid and sealed.”

The result of Bush's Iraq obsession has been to radicalize a generation of young Muslims, according to Rohan Gunartna. American security has been reduced as a result of Bush's refusal to let facts dictate the direction foreign policy should take.

Since the September 11 attacks, Al Qaeda’s strength shrank from about 4,000 members
to a few hundred members, and nearly 80 percent of Al Qaeda’s operational leadership
and membership in 102 countries has been killed or captured. Al Qaeda adapted, however, instilling its mission and vision in associated groups and transferring its capabilities to them. The U.S. focus on Iraq, Al Qaeda, and eliminating the Al Qaeda leadership limited the ability for U.S. officials to understand and respond better to the changing threat.
...
the U.S. invasion of Iraq increased the worldwide threat of terrorism many times over. Even moderate Muslims are angry about the invasion and postinvasion developments. This animosity toward the United States makes it easier for terrorist and extremist groups to continue to generate recruits and support from the suffering
and grieving Muslims of Iraq. Because of perceived injustices attributed to the West in general, particularly in Pakistan and Iraq, there will be significant support for the new generation of mujahideen in Iraq. Groups that were dying are making a comeback, and several new groups have emerged in Iraq, Indonesia, Pakistan, and even in Europe.
...
Although the U.S.-led invasion of Iraq was a fatal mistake, withdrawing from Iraq would be an even greater one. U.S. withdrawal from Iraq and turning responsibility over to the United Nations would only strengthen terrorist capabilities in general and Al Qaeda more specifically.

(And here's the part that I think gets forgotten in the red-meat rhetoric of the right.)

It is therefore crucial to develop a truly multipronged strategy to fight the multidimensional character of violent Islamists. Instead of only tactically targeting identifiable terrorist cells, it is essential to prevent the creation of terrorists strategically. The bloc of nations with staying power in the West must work with the Muslim countries—their governments and nongovernmental organizations—to target the ideology that is producing the terrorist. It is necessary to send the message that Al Qaeda and its associated groups are not Koranic organizations and that they are presenting a corrupt version of Islam by misinterpreting and misrepresenting the Koran and other texts. Only by countering the belief that it is the duty of every good Muslim to wage jihad can the extant and emerging terrorist threat be reduced. As Al Qaeda is constantly adapting to the changing security environment and morphing its structure, the key to defeating Al Qaeda and reducing the terrorist threat is to develop a multi-agency, multijuristic, and multinational strategy to combat this ideology.

Where I disagree with the author of the article (and I'm not so sure we actually disagree) is that I think that we have to plan for a post-occupation Iraq. In order to plan for it, we have to visualize what it should look like and create a plan for getting there.

The whole debate about "benchmarks" has gotten a bit silly. I saw a speech by McCain where he was clearly talking about benchmarks, but was dancing around trying to avoid using the "b" word. The idea behind a benchmark is that you state what your intermediate goal looks like and when and how you hope to achieve it. I can understand his reluctance to get tied into a "withdrawal schedule" or something as inflexible as that, but if you don't have a plan for getting someplace, you'll never get there.

Of course you have to take actual conditions into account. Even Obama is starting to "refine" his policy (gotta love that word!), stating that he will take "conditions on the ground" into account. (I also think that he hasn't even begun to mine the "refinement" possibilities of his refusal to define the difference between "combat" and "non-combat" units.)

--SCC

The Great Oil Give-Away

2008-08-05T21:21:00.000-07:00

The recent hysteria over drilling is a thinly veiled attempt to give the public's assets to private corporations.

Some of the oil companies' defenders have claimed that the royalties paid by the oil companies are fair compensation for the damage they do and the fortune they reap from the public lands. But the GAO reports that government giveaways to the oil companies have cost the taxpayers billions of dollars.

If we actually give the oil companies access to additional lands for exploitation, we need to ensure that:

Fair compensation is paid

Adequate environmental protections are enforced

Use it or lose it rules are in place

As the GAO report pointed out, the Dept of the Interior has broad latitude in writing those leases. I don't think it is much of a stretch to say that the oil companies are desperate to have their buddies in the lame duck Bush administration write exceedingly favorable terms into the leases for ANWR and OCS.

We have lost tons of money to outright fraud by the oil companies. The US government has screwed up lease contracts, giving away billions of dollars of royalties. Inadequate auditing has allowed sloppy paperwork to cheat taxpayers out of royalty payments. Lobbyists in the great Washington revolving door have arranged for subsidies and sweetheart deals for their corporate masters.

But last month, the Bush administration confirmed that it expected the government to waive about $7 billion in royalties over the next five years, even though the industry incentive was expressly conceived of for times when energy prices were low. And that number could quadruple to more than $28 billion if a lawsuit filed last week challenging one of the program's remaining restrictions proves successful.

"The big lie about this whole program is that it doesn't cost anything," said Representative Edward J. Markey, a Massachusetts Democrat who tried to block its expansion last July. "Taxpayers are being asked to provide huge subsidies to oil companies to produce oil — it's like subsidizing a fish to swim."

--SCC

The Tax Cut Myth

2008-08-03T19:28:00.000-07:00

Supply-side dogma holds that if taxes are cut, there will be enough economic benefit to more than make up for lost revenue. This assertion is not supported by the facts. Consider the words of two economists from Bush's team:

Edward Lazear, chairman of President Bush’s Council of Economic Advisers told Congress, “I certainly would not claim that tax cuts pay for themselves”

N. Gregory Mankiw, an earlier CEA chair in President Bush’s administration once compared an economist who says that tax cuts pay for themselves to a “snake oil salesman trying to sell a miracle cure”

The Center on Budget and Policy Priorites reports that the cost of borrowing money to pay for tax cuts far exceeds any benefit from it.

The CBO reported in 2007 that the budget might have been in surplus if not for the Bush tax cuts:

Orszag concluded that the tax cuts’ indirect impact on economic growth, investment and saving and could affect this year’s budget deficit anywhere from an increase of $3 billion to a reduction of $14 billion, depending on the assumptions used. That is separate from the direct boost to the deficit trhough lost revenue and the added interest on borrowing to cover the gap of $211 billion.

It currently expects this year’s deficit to be between $150 billion and $200 billion, implying that without the tax cuts, the budget would probably be in surplus this year.

--SCC

Bush Abuses of Power

2008-03-28T18:56:00.000-07:00

For a perspective on the sorts of things I consider to the Bush administration's abuses of power, consider the 3/28/2008 episode of "This American Life."

Old Posts

2008-03-27T17:51:00.000-07:00

I happened across a couple of my old postings that made it into the rec.humor.funny archive from another political discussion. I thought people here might appreciate them.

This first one was posted in the wake of the William Smith scandal (1991), which prominently featured a certain prominent senator:

Oh, Kennedy

(Here's a link, in case you've forgotten about William Smith):
William Smith

I don't recall when I posted the next one, but it had to have been in the early 1990s:
Lobby Money

Obama's Friends' Comments

2008-03-26T16:49:00.000-07:00

I'm amused by people who are shocked, simply shocked to find that a black man is friends with someone who resents past discrimination towards blacks and who speaks openly about his resentment.

Perhaps those same people will also be shocked to discover that I am a white guy who has friends and relatives who resent bussing and affirmative action. I've heard a comment or two at family reunions that I have not immediately denounced while storming from the room--perhaps that makes me a racist too.

Whatever we do, we should definitely sweep all these resentments under the rug and never, ever discuss them openly. Any shrink will tell you that it is far better to let resentments fester than to discuss them.

Independents and the Two Parties

2008-03-25T16:47:00.000-07:00

In New Jersey, a plurality of voters is unaffiliated (our version of "independent"). That doesn't even count people like me who switch affiliation depending on which primary looks more interesting.

Unfortunately, the two parties seem to be taking the wrong lessons from this state of affairs. The Reps have become more strident, and the Dems are rapidly abandoning whatever principles they may once have held.

Perot had the right idea. It's a shame that Buchanan peed in our sandbox.

The Evils of the Two Parties

2008-03-25T16:25:00.000-07:00

The Federalist Papers have quite a bit to say about the evils of political parties.

Of course, it is an intriguing irony that the two main authors ended up be principal founding members of the political parties whose descendants are still going at it today.

(Yes, I consider Hamilton to be a forerunner of modern Republicans. Even down to the vaguely monarchist sentiment that accompanies the Republican nominating process. So sue me. No wait, that would be the Democrats...)

Democrats and Chaos

2008-03-24T16:23:00.000-07:00

I'm having trouble thinking of a political party in history which has been quite so inept as the Democrats. I'm coming up blank.

"Elect us. We promise that we'll do a better job governing the country than we do governing our own party!"

Is anybody else ready to jump off of the two-party duopoly yet? We've got one part dominated by the Glenn Becks and Rush Limbaughs and the other party dominated by abject confusion. Ralph Nader is looking awfully good about now... Maybe a Ross Perot write-in candidacy...

Patriotism and Dissent

2008-03-24T16:19:00.000-07:00

I've been told that I should not criticize the Bush administration for invading Iraq. After all, we're already there, and we should "look forward" and "support the troops."

So when are we permitted to call for a condemnation of an administration that lies to its people to drag us into a war that most people don't want, (and that we don't need for any legitimate national security reasons)? I'm tired of being told that "now isn't the time." When, exactly, will the time come?

In this country, part of being patriotic is defending against tyranny by criticizing wrong-headed and erroneous actions by the people in power.

Fortunately, the current generation seems to be able to draw the distinction between the poor saps in uniform who are just doing their jobs and the kingpins who lie to the American people to try to get sweetheart oil contracts for their buddies.

I can understand and appreciate the argument that we have to clean up the mess that Bush & co have left. That doesn't mean that I have to be happy about it. And it certainly doesn't mean that I should not criticize the immoral actions that brought us to this point.

Liberals vs Conservatives

2008-03-23T16:14:00.000-07:00

Liberals (and there are far too few of them around any more) are distinguished by a world view more than a stand on a particular issue. Liberals tend to believe that if you offer people opportunity, that they will make something good of it.

Conservatives are more interested in preventing change to the existing power structure. I don't mean this in a feudal, or in a Panglossian way. Instead, conservatives feel that things really aren't so bad the way they are, and most changes would tend to make things worse.

As I commented in an earlier post, this may mean that in a society that values social mobility and churn, these two values may not necessarily be in conflict. (For example, the microcredit lending institutions in the third world provide people with an opportunity to create a small business while also requiring a level of responsibility and initiative. Arguably, these institutions represent the best of both liberal and conservative thought as they exist in the USA.)

Unfortunately, there are a lot of people who use "conservatism" as a way to protect their own interests or to disadvantage their opponents. Conservatives today are making the same mistake that liberals made in the 1970s--they are seeking to stomp out dissent. If a political movement is to remain vibrant, it has to permit a certain level of disagreement in order to prevent its ideas from becoming stale, or to prevent the movement from being hijacked by extremist partisans of one type or another.

What Do You Do with a Country Like Iraq?

2008-03-20T16:08:00.000-07:00

We've recently been treated to news coverage about a verbal gaffe that McCain made when discussing Iran's support for certain elements within Iraq. This whole thing is a continuation of the Silly Season. Of course McCain knows who Iran is supporting in Iraq. Unfortunately, we are probably doomed to hear candidates ridiculing each others' jetlag-induced verbal slips.

Unfortunately, the whole controversy is papering over a much more important question that McCain has to answer: Why he supported the invasion in the first place.

Hillary's answer is that Bush tricked her into it, which is not flattering, but is probably believable. (On the other hand, I would feel more comfortable if she had read the intelligence estimate first. Haven't we had enough of presidents who can't be bothered to do their own homework?)

One of the pressing questions about McCain is how he would deal with countries that we don't like much--like Iran. A clear exposition of his thought process in the runup to the Iraq invasion would cast a light on that question.

Corporate Welfare Links

2008-03-17T18:24:00.000-07:00

Here are a few good links on Corporate Welfare

http://www.cato.org/pub_display.php?pub_id=8230
http://www.cato.org/pubs/handbook/hb105-9.html
http://www.goodjobsfirst.org/pdf/wmtstudy.pdf

CDO Problems and Lax Regulation

2008-03-06T18:05:00.000-08:00

A big part of the problem was the way that risk was priced into the CDOs. The money that flowed into the mortgage market came largely from investment funds purchasing loans from banks after they had been packaged into CDOs.

The idea of the CDOs was that a large number of obligations from a diverse set of markets would be packaged together, allowing the overall risk to be calculated statistically. This calculation has ended up being incorrect for several reasons:
1) The historical time window for the CDOs was too short to have included a significant retrenchment in home prices.
2) An implicit assumption was made that different housing markets would retrench at different times, spreading the risk over time.
3) Most importantly: Nobody took into account that the front-line lenders (eg banks) would change their behavior in writing loans. When banks held the loan, they were much more careful about who they lent to. When all they were doing was originating loans for resale as CDOs, their standards became much more lax.

The upshot is that arguably the problem is that there was insufficient regulation of the CDO marketplace to allow for enough transparency to correctly calculate risk. The collapse in CDO prices has been because of this lack of transparency--you have no way of knowing about the quality of the loans underlying a given CDO.

Oil Revenues and Funding for Terrorism

2008-03-05T18:02:00.000-08:00

Here's a good example of how oil revenues are used to promote terrorism:
Venezuelan oil revenues fund Colombian terrorists

Oil Hidden Cost

2008-03-05T17:55:00.000-08:00

I've been arguing that the oil economy carries a number of hidden costs. Prominent examples include environmental degradation, political instability, costs associated with military interventions, and the necessity of shoveling money at people who wish us ill.

On top of that, we will see (and have seen) the costs associated with generation plants decrease as the technology develops.

My argument is that the "extra" cost is an investment in being able to avoid the hidden costs associated with the oil/coal economy.

IAGS Report
Alternet Summary

Have you read anything about the new generation plants that use mirrors to heat water rather than photovoltaics? They are supposed to be much cheaper and easier to maintain. Do you happen to know which technology was used in the plant near you?

DOE Document on solar mirror-based generation systems
Treehugger summary

(The treehugger link is a quicky summary for people who really aren't that interested. The pdf is for people who like more details.)

Medical Care for the Guard

2008-02-28T17:11:00.000-08:00

Inadequate medical and psychological care is being provided to the active duty forces, let alone the Guard and Reserve. Pinching pennies in this area is going to have an effect on readiness, which is going to have an effect on national security.

I think we have gone beyond the somewhat deceptive contracts that were foisted on the Guardspeople. I don't feel that the administration has held up its end of the deal even according to the letter of those contracts.

And I'm not sure that all those Guardspeople thoroughly understood the contracts that they signed. We've all seen the advertising for Guard recruits that has widely been lampooned as "two weeks a year my *" There's a lot of fine print in those contracts, and a lot of recruiters that are less than forthright in describing those contracts to naive young people--especially if they're running behind on their quota.

I just think that there is an irony associated with our insistence that members of the Guard live up to every jot and tittle in the contract (and maybe even beyond, if you consider the abuse of stop-loss), but allow them no recourse when we (the American people) do not live up to our obligations towards them.

On a related but separate front, I was pleased to see that counselors are once again allowed to help returning service people fill out their disability paperwork to help them get the proper level of benefits. It is a shame that it took stories like this one in the press to shame the military into doing the right thing.

A Solar Proposal

2008-02-22T05:57:00.000-08:00

The US should make a major investment in nuclear and solar power generation. There is an interesting article in this month's Scientific American regarding a proposal that would use existing technology to expand solar power in the desert southwest to make a major dent in our energy needs.

Scientific American article on solar power

The Rhetoric on Social Security and Medicare

2008-02-18T04:51:00.000-08:00

Ironically, most of the rhetoric on both sides is true. Cuts in Social Security or Medicare would have a big impact on the quality of life of seniors, many of whom may not be able to get a job to supplement their "entitlements."

On the other hand, it is demonstrably true that Social Security payments have increased faster than the salaries for several key segments of the economy. In particular, the current system increases Social Security payments at a rate faster than inflation through the existing COLAs.

Increasing taxes is not a "free" solution either, for reasons that have been beaten to death in previous postings.

The last time I participated in one of the Concord Coalition's sessions as a participant (rather than an organizer), we were able to reach a compromise on Social Security within our "working group." Our compromise was to limit COLAs to the rate of inflation, increase the retirement age, and lift the ceiling on payroll taxes. This was some years ago, so the cost estimates we used are probably well out of date today.

We also laid waste to most agricultural subsidies and made specific cuts to the DOD. I can't remember if we ended up raising the gas tax, but I remember that it was fiercely debated in our group.

One of the more counterintuitive suggestions for dealing with a portion of the growth in Medicare is reducing the role of private insurance companies in providing Medicare. Obviously, this does not resolve the problem, but it would apparently result in a significant cost savings.

Here's a pretty good estimate of the impacts of some of the different proposals for adjusting Social Security (not including privatization):
CBO Report on Social Security

I haven't seen any solid Social Security privatization proposals that don't involve either screwing over current taxpayers or adding hundreds of billions to the national debt.

When Social Security was put into place, the elderly were the poorest age group. That is no longer the case. This disconnect is leading to some young people to challenge Social Security more than they have in the past. For example:
Curious Cat Blog entry

(I'm not endorsing the viewpoint in this blog. I'm pointing out that it is a viewpoint that is becoming more prevalent among young people.)

Here is a similar CBO Report on Medicare and Medicaid.

Social Security was not defined as a welfare program, but it was structured as an income transfer program. A strict means-test could be considered a recognition of what the Social Security program has always been. It has never been an investment fund, so it doesn't make sense to compare "returns" to those available from an investment fund.

Something will have to be done to deal with outstanding obligations. As I see it, the proposals amount to a combination of one or more of the following:

Disavow the outstanding obligations altogether. (This is a fairly radical Libertarian proposal. I don't think that even "mainstream" Libertarians have bought into this one.)

Increase payroll taxes, either by a straight increase in the tax rate or by lifting the cap on total "contributions" over the course of the year. (Doesn't "contributions" sound a lot better than "taxes?")

Restrict growth in outlays by adjusting the COLA formula. There have been several proposals for tweaking the formula in different ways.

Limit the number of recipients, usually by means-testing.

Limit the amount of time recipients receive benefits, usually by raising the retirement age.

Charge it to the national credit card and let our grandkids worry about it. (Or charge it to the national credit card, then have a burst of inflation to reduce the real debt to a manageable level.)

Most of the solid proposals for eliminating the program are really cosmetic overlays for option 6. The ones that don't require a massive increase in debt involve an increase in taxes to support current recipients while requiring an increase in the same workers' contributions to their own retirement accounts.

McCain and Health Care

2008-02-17T04:48:00.000-08:00

I hit the McCain web site to see if he had a plan for addressing the Medicare funding crisis. I found the following statement on his health care web page:

Promote competition throughout the health care system - between providers and among alternative treatments.

Depending on what he means by this, I either support it or think that it is a waste of resources. There are some alternative treatments (eg chiropracty for pinched back nerves) which have been shown to be beneficial. There are others that have not been shown to be worth the money. I'd hate to spend tax money (or my insurance premiums) paying for junk science like laetril treatments.

Here was his statement on Medicare:

Promises made to previous and current generations have placed the United States on an unsustainable budget pathway. Unchecked, Social Security, Medicaid and Medicare obligations will grow as large as the entire federal budget is now in just a few decades. Without comprehensive bipartisan reform to America's entitlement programs, the nation will be unable to meet the challenges of providing vital medical and social security assistance to future generations.

Everything in the statement is factually true, but I don't see any meat in the form of a real proposal. Maybe that's unfair to expect of a presidential candidate, but I never said that I was fair.

Brief Comment on New Jersey Politics

2008-02-14T04:35:00.000-08:00

In New Jersey, joining one of the two major parties would involve one of the following:

Option A: Join with a bunch of group-thinking, goose-stepping ideologues who care more about ideological purity than implementing policies that work.

Option B: Join with a bunch of vacillating dupes who vote for whichever politician has sold out most thoroughly to the corrupt, mob-ridden machine.

I think I'll stick with Option C, thank you very much. I've been around enough to see what is involved with getting inside enough to have influence.

Case in point: John Lynch

The last person elected in New Jersey as a "reform" Democrat who was going to clean up the party and the state: Jim McGreevy

Of course, the Republicans are soo much better: Chuck Haytaian

We certainly can't forget these guys: NJ Corruption Tour

The probe of into alleged bribe-taking in the awarding of public contracts resulted in the arrest Thursday of 11 public officials. Among them: two state lawmakers, two mayors, three city councilmen and several members of school board in Pleasantville, near Atlantic City, where the scandal had its roots.
...
Christie noted that 108 public officials in New Jersey have been convicted of federal corruption charges in the past five years. He marveled at the "stupidity and greed" of those who would continue to flout the law.

"The conclusion I draw is they don't care," he said. "They care more about themselves than the public they are elected to serve."
...

Here's another example of upstanding New Jersey politicians looking out for the little guy: NJ Officials Snared

And here's a scorecard from the Asbury Park Press.

The FBI's first sweep in its Operation Bid Rig probe led to the arrest of 11 officials in Monmouth County on Feb. 22, 2005. Their status:

Paul Zambrano, 50, former West Long Branch mayor and brother of Long Branch Councilman John Zambrano, who pleaded guilty Thursday to one charge of accepting a bribe: Pleaded guilty to accepting $15,000 in bribes.

Thomas Broderick, 61, former Monmouth County assistant highway supervisor: Pleaded guilty to money laundering that netted him $15,000 in profits.

Joseph "Joey Buses" McCurnin, 65, former Monmouth County transportation operations manager: Pleaded guilty to aiding in the extortion of a $1,000 bribe.

Joseph DeLisa, 50, former West Long Branch councilman: Awaiting trial on bribery and extortion charges.

Paul Coughlin, 42, former Hazlet mayor: Pleaded guilty to accepting a $3,000 bribe.

Patsy Townsend, 59, former Monmouth County deputy fire marshal and Neptune code enforcement officer: Pleaded guilty to extorting a $1,000 bribe.

John J. Hamilton Jr., 56, former Asbury Park councilman: Awaiting trial on charges of extortion, accepting a bribe in the form of a $5,000 driveway, attempted witness tampering and making a false statement.

Raymond O'Grady, 56, former Middletown Township committeeman: Convicted of extorting and accepting $8,000 in bribes.

Richard Iadanza, 51, former Neptune committeeman: Pleaded guilty to taking $3,000 in bribes.

John J. Merla, 44, Keyport mayor: Awaiting trial on eight counts of extortion and bribery charges.

An 11th defendant, Robert L. Hyer, a former Keyport councilman, died before trial. He was charged with extorting a $5,000 bribe.

Of those who have pleaded guilty or been convicted at trial, none have been sentenced yet. Several face up to 20 years in prison.

Anthony J. Palughi, 70, the retired Monmouth County superintendent of bridges, was the star witness for the U.S. attorney at O'Grady's trial. Palughi has pleaded guilty to taking part in a bribery scheme that implicated the late Harry J. Larrison Jr., the former Monmouth County freeholder director.

Larrison was charged last year with accepting bribes from two land developers, but he died a few weeks later.

Two major Monmouth County contractors also figured in subsequent "Bid Rid" charges. Stephen M. Appolonia, 53, the now-former president of International Trucks of Central Jersey, Howell, was charged with laundering $350,000; and James B. Ingram, 56, former owner of JBI Limousines Inc., Neptune, was charged with laundering $100,000.

Appolonia is awaiting trial; Ingram has pleaded guilty and is awaiting sentencing.

Thomas Greenwald, 52, a friend to Appolonia and a former Far Hills councilman who is charged with money laundering, is awaiting trial.

What Obama Really Means on Iraq

2008-02-13T04:31:00.000-08:00

Looking into my crystal ball, I predict that if Obama gets the nomination, we will start to see his position become more nuanced, and that "16 months" or "18 months" or whatever it is this week will become a "goal" to extract a "large number" of soldiers, not the entire group.

I also predict that he will "discover" that a plan for withdrawal is not quite as easy as he makes it out to be. He will need extra time to "coordinate" the withdrawal with our Iraqi "partners."

Furthermore, any "delays" will be strictly due to something or other W did (Status of Forces? Budget? Lack of planning?), not anything forseeable by candidate Obama.

Definition of Corporatism

2008-02-13T04:30:00.000-08:00

Corporatism:
"Historically, corporatism or corporativism (Italian: corporativismo) refers to a political or economic system in which power is given to civic assemblies that represent economic, industrial, agrarian, social, cultural, and professional groups."
Wikipedia entry

References of usage of the term in a modern context:
Populist America
Dissident Voice

I deliberately chose examples that refer to corporatist influences within the Democratic party. Corporatism (like populism) is distinct from liberalism or conservatism.

Liberals vs Socialists

2008-02-13T04:28:00.000-08:00

At the risk of over-simplifying, I'm going to attempt to draw the distinction between "liberal" and "socialist."

Liberals believe in equality of opportunity.

Socialists believe in equality of outcome.

At times, these interests converge enough to allow for a coalition, but they are distinct.

Sorry to be so pedantic, but this is one of my pet peeves.

References:
http://en.wikipedia.org/wiki/Liberal

Broadly speaking, liberalism emphasizes individual rights and equality of opportunity

http://en.wikipedia.org/wiki/Socialist

Socialism refers to a broad array of ideologies and political movements with the goal of a socio-economic system in which property and the distribution of wealth are subject to control by the community