Friday, October 31, 2008

Economic Turn To The Left - The Cure?

More Obama analysis from a brilliant mind and strategist plus a little humor - may be the last laugh for quite a while. (See 1, 1a, 1b and 1c below.)

Shift towards left for Israeli Capitalism? Ne'eman says the next Israeli government must re-balance and he cites statistics that show the pendulum has swung too far. I cannot disagree with Ne'eman but I do believe he excludes the enormous cost this tiny country must shoulder regarding security and the fact that Israel has always treated Arab Israelis less than fair and they are part of the statistics. Ne'eman also does not discuss the enormous burden and cost of moving large members of its society out of their homes and into new living areas and the cost of that infrastructure development etc.

Just as Israel must balance equities they must also balance their economic policies and not kill the goose that laid the golden egg. Capitalism has proven it can produce amazing wealth and it is for the government to properly channel this wealth without killing initiative and/or stifling creativity. Capitalism, in and of itself, is not bad, wine is not bad, cars are not bad etc.. Man's use of them can make them dangerous. Everything in moderation.

The U.S., now that its government is controlled by Democrats, is well on its way to doing most everything that is wrong in terms of what has driven and should continue to drive our economic engine . (See previous memo "Throwing Capitalism out With The Bath Water and See 2 below.)

Response from a close relative and fellow memo reader regarding the campaign, thoughts on education and my own response to her proposals regarding education and its funding. (See 3 and 3a below.)

A CPA and his firm look at consequences of both candidates tax proposals. (See 4 below.)

Syria moves forces in response to GW's recent attack. (See 5 below.)

Has playing the PC Race card begun to turn off voters and boomerang? Sheppard suggests it may have. (See 6 below.)

Obama's talk about de-regulation makes for nice fluff but it fades under analysis. His campaign rhetoric was always designed to raise crowd blood temperature but it never really enlightened anyone to the real facts because it was always just that - empty blather from an empty suit who is caught up in his ability to charm and excite with chosen words of change, hope etc..

On the other hand McCain did an equally poor job of responding and his own choice words of I will fight for you served on a "my friends" platter fell on deaf ears. The poor economy has overwhelmed anyone's sound judgment and, as I have so written, we might be willing to kill the goose that made us a powerful and great nation because we are now paying for our own cupidity, excess, and corrupt political system of oversight etc.

There is always a price to pay for going beyond rational limits!(See 7 below.)


1)Jack Wheeler is a brilliant man who was the author of Reagan's strategy to break the back of the Soviet Union with the star wars race and expose their inner weakness. For years he wrote a weekly intelligence update that was extremely interesting and well structured and informative. He consults(ed) with several mega corporations on global trends and the future, etc. He is in semi-retirement now. He is a true patriot with a no-nonsense approach to everything. He is also a somewhat well-known mountain climber and adventurer.

Written by Dr. Jack Wheeler

The O-man, Barack Hussein Obama, is an eloquently tailored empty suit. No resume, no accomplishments, no experience, no original ideas, no understanding of how the economy works, no understanding of how the world works, no balls, nothing but abstract, empty rhetoric devoid of real substance.

He has no real identity. He is half-white, which he rejects. The rest of him is mostly Arab, which he hides but is disclosed by his non-African Arabic surname and his Arabic first and middle names as a way to triply proclaim his Arabic parentage to people in Kenya . Only a small part of him is African Black from his Luo grandmother, which he pretends he is exclusively.

What he isn't, not a genetic drop of, is 'African-American,' the descendant of enslaved Africans brought to America chained in slave ships. He hasn't a single ancestor who was a slave. Instead, his Arab ancestors were slave owners. Slave-trading was the main Arab business in East Africa for centuries until the British ended it.

Let that sink in: Obama is not the descendant of slaves, he is the descendant of slave owners. Thus he makes the perfect Liberal Messiah.

It's something Hillary doesn't understand - how some complete neophyte came out of the blue and stole the Dem nomination from her. Obamamania is beyond politics and reason. It is a true religious cult, whose adherents reject Christianity yet still believe in Original Sin, transferring it from the evil of being human to the evil of being white.

Thus Obama has become the white liberals' Christ, offering absolution from the Sin of Being White. There is no reason or logic behind it, no faults or flaws of his can diminish it, no arguments Hillary could make of any kind can be effective against it. The absurdity of Hypocrisy Clothed In Human Flesh being their Savior is all the more cause for liberals to worship him: Credo quia absurdum, I believe it because it is absurd.

Thank heavens that the voting majority of Americans remain Christian and are in no desperate need of a phony savior.

His candidacy is ridiculous and should not be taken seriously by any thinking American. Pass this on to every thinking American you know!

1a) Notice to All Employees

As of November 5, 2008, when Obama is officially elected into office, our company will instill a few new policies which are in keeping with his new, inspiring issues of change and fairness:

1. All salespeople will be pooling their sales commissions into a common pool that will be divided equally between all of you. This will serve to give those of you who are under-achieving a “fair shake.”

2. All hourly employees will be pooling their wages, including overtime, into a common pool, dividing it equally amongst yourselves. This will help those who are “too busy for overtime” to reap the rewards from those who have more spare time and can work extra hours.

3. All top management will now be referred to as “the government. We will not participate in this “pooling” experience because the law doesn't apply to us.

4. The “government” will give eloquent speeches to all employees every week, encouraging its workers to continue to work hard “for the good of all.”

5. The employees will be thrilled with these new policies because it's “good to spread the wealth.” Those of you who have underachieved will finally get an opportunity; those of you who have worked hard and had success will feel more “patriotic.”

6. The last few people who were hired should clean out their desks. Don't feel bad though, because President Obama will give you free healthcare, free handouts, free oil for heating your home, free food stamps, and he'll let you stay in your home for as long as you want even if you can't pay your mortgage. If you appeal directly to our democratic congress, you might even get a free flat screen TV and a coupon for free haircuts (shouldn't all Americans be entitled to nice looking hair?) !!!
If for any reason you are not happy with the new policies, you may want to rethink your vote on November 4th.



















1c) Subject: Investment Banker Jokes

Q: What’s the definition of optimism?
A: An investment banker who irons five shirts on a Sunday evening.

A man went to his bank manager and said: ‘I’d like to start a small business. How do I go about it?’ ‘Simple,’ said the bank manager. ‘Buy a big one and wait.’

The credit crunch is getting bad, isn’t it? I mean, I let my brother borrow a ten a couple of weeks back, it turns out I’m now America's fourth biggest lender.

Q: What is the difference between an investment banker and a pigeon?
A: A pigeon can still make a deposit on a BMW.

Q: What is the difference between an investment banker and a large pizza?
A: The pizza can still feed a family of four.

Q: What does a hedge fund manager with no fund to manage say?
A: Would you like fries with that sir?

Q: What is the capital of Iceland?
A: About $3.50

Mark Twain was ahead of the curve: “October. This is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.”

2) Israeli Capitalism: Time to Shift Leftwards
By Yisrael Ne'eman

The era of boorish capitalism is drawing to a close as markets around the world are shaken by the American sub-prime disaster. The ripple effect not only collapsed such enormous investment houses like Lehman Brothers but also threatened Merrill Lynch, the insurance giant AIG and the mortgage companies Freddie Mac and Fanny Mae. In today’s global village no one works in a vacuum. As we all know the U.S administration has begun a $700 billion bailout.

Not long ago communism/socialism came crashing down, not only with the end of Soviet domination of Eastern Europe and the unraveling of the Soviet Union from 1989-91 but with the defeat of much of the social welfare system worldwide. In many cases the former Russian satellite nations and republics became overwhelming in their capital incentive policies while Great Britain in particular replaced a collapsing socialism with hard line capitalism led by Margaret Thatcher in 1979. The United States, never a bastion of the welfare state became even more capitalist with the election of Ronald Reagan in 1980. Western Europe followed suit. For almost 30 years capitalism washed socialism aside and today we are paying the price of that massive victory.

Israel is no different. In some ways similar to Eastern Europe but also following socialist and mixed economy policies of many developing countries (often known as “state capitalism”) the Jewish State underwent several economic reforms from the 1980s onwards. Dead wood socialism where people went to their jobs but did not work, gained tenure over the years but could not be fired affected not only the public sector but the semi-private sector led by the Histadrut Labor Union. The Union represented the workers but also owned the factories or “means of production”. With declining productivity and massive managerial incompetence this socialist pillar of the economy was in decline in the 1970s and finally collapsed by 1988.

The entrepreneurial Likud led by Menachem Begin won their first election in 1977 and attempted a capitalist reorganization under finance minister Simcha Erlich but due to structural problems, incomplete planning/execution and Histadrut objections the blueprint failed and left the country with an inflation rate of 450% by the mid 1980s. The New Economic Policy of 1985 led by Labor Prime Minister Shimon Peres and Likud Finance Minister Yitzchak Moda’i during the period of national unity governments crushed Histadrut objections and brought about the rush towards big capital. Such a move was imperative to bolster Israel’s economy.

Capitalism became the new byword as the policies continued into the 1990s especially when seeking foreign investors. Opportunity presented itself during the Rabin-Peres Labor regime (1992-96) when economic barriers fell and Israel cashed in on the “peace dividend” of the Oslo Accords. Despite diplomatic setbacks in the peace process with the Palestinians the economy overall thrived and was further capitalized by Benyamin Netanyahu’s government in the late nineties and up through 2000 when Labor PM Ehud Barak was at the helm.

The final dismantling of most of Israel’s social welfare system took place in the past decade, not so much out of want but out of necessity. The Wall Street crisis of March 2000 and the Palestinian Low Intensity Conflict beginning half a year later brought about a massive economic crises leading to over 11% unemployment and the economy shrank by 1.9% in 2002. Social welfare benefits were cut back beyond the minimum, but most agreed that there was really no choice. Netanyahu as finance minister under PM Ariel Sharon was the architect of such widely approved planning. By 2005 the economy was booming again with growth rates in excess of 5% annually. Capitalism was seen as the great savior.

And it was – but only in the short term. Since then Israel is the western country with the largest gap between rich and poor, at least according to the official statistics. The “off the books” black economy is estimated by the respected economic journalist Sever Plotzker to be at least 15% but many believe it to be well over 20%. Not only the rich manage it but many in the middle class and especially working classes moonlight and supplement limited incomes. But despite such an officially unrecognized development there are more poor who are in a dire situation than there have been in two generations.

By the mid 2000s Israel’s stock markets took off with the wealthy attaining greater economic power while the poor sank into a morass. This trend has crashed to a halt with the global economy heading into a tailspin despite the American government’s best efforts to save the situation. Even the Republicans are in effect “nationalizing” major financial institutions as mentioned above.

This round of uncontrolled capitalism is finished. In Israel many believe elections are just around the corner. Whether it be the Likud, Kadima or even Labor, all followed similar policies to jump start the Israeli economy over the past 20 years or so. Lately Labor took a step back and introduced a pension plan for all workers, to get around the fact that most are no longer unionized and in the past decade have been terribly exploited. On the economic front the next government must ensure at least a minimal leveling of the playing field for the working public. Like the health care reform led by Haim Ramon in the mid 1990s there needs to be a socio-economic reform leading back to the welfare state in a nation resting on a mixed economy.

When socialism overtook the economy the price was paid by the workers swept out with the dead wood economy. Now it is time to partially re-regulate as far as capitalism is concerned. Best to learn from the American and British experiences before it is too late. Despite it all (including a massive slide by the Tel Aviv stock market this year) the Israeli economy is doing well and the government holds a fair amount of foreign reserves. A growing social gap will certainly bring about domestic instability. The time has come to implement a policy of social justice in an effort to close the gap, something all the economists of the leading parties know to do. We should begin with a return to partial state capitalism in the form of increased government investment in state infrastructures and the encouragement/regulations necessary for a mixed economy. It is just a matter of courage and the will to action.

Thank you for the prosperity article and the heads up on the movie "Wrecking Crew." Thank you also for the FYI 's you send. They give deep insight. Here are some thoughts about the presidential campaign and the economy:

1. I sadly watch as McCain,in my opinion, continues to run a one-trick pony survival campaign vis a vis here is why you should not vote for Obama henceforth - Nobama. My respect for all of the reasons he was nominated declined in the aftermath as he seems to forget who he is and so I think the American voters will do the same come election day. Big difference between Survive vs Thrive campaign tactics and we are observing them at there best between the strategists and advisors of these two nominees. Obama is retrofitting and restructuring himself . Like him or not, if you don't use a character filter, that is the formula a change agent uses to adapt and become adept in the face of crisis.

2. Putting expertise on the back burner, If one was looking to be gender specific and find a female candidate to support,, Sarah Palin is not the female candidate of choice. That person was Hillary Clinton. Putting irate overtones or dissing women because many of us couldn't or wouldn't embrace Sarah Palin is disheartening to me.. I am happy for her that she got her 5 minutes of macro fame. Courage of conviction is a wonderful quality but not the only one if you are to be a leader of a nation. No different sentiment regarding McCain. Good for her that she takes it on the chin regarding the media. A good leader must develop a thick skin and not get lost in the mire of popularity or a slow news day.

3. Hillary's book, "It Takes a Village"-more than addresses the difficulties of educating children in general as well as the tug of raising a child in the public eye albeit successfully. Whomever becomes president should read that book because the formulas to have education succeed in this country which incorporates successful international models and strategies are prevalent and relevant to the education crisis we face and will continue to face. Much of her vision is spot on with regard to education irrespective of what one thinks of her politically. Obama should stop taking about kids getting to college and focus on early intervention as alluded to in last debate. No Child Left Behind is fundamentally flawed and the feds blew it and continue to blow it because they won't generate funding. Next bailout

4. Vis a vis the Sarah Palin Downs Syndrome argument- having a down's syndrome child because you don't believe in abortion is not the same as choosing to have a down's syndrome child because you and your family are ready to embrace that journey.
4. Obama, if elected, will have a steep learning curve and must hit the streets running instead of having the luxury of navel (or naval :-) contemplation regarding his oversight of this nation. If he truly believes himself the be a change agent, this will be the most invigorating time to rise to the occasion by challenging himself to reach new thought levels and practices implementation. That is what change agents do. Past practices aside, he and the rest of us will have to hang on while we figure out which fundamentals to hold or fold and which directions we must seek as we forge ahead. Not a time for the feign of heart. Obama's advisors, got him this far. He beat out Clinton who should have had a well oiled advisory machine and she should have known the difference between recommendations to embrace or abandon. That's what a good leader knows. McCain resurrected himself from the dead when no one backed him to his becoming the Republican nominee. Where did that guy go and who is the impostor masquerading in his place? Obama keeps using Muhammad Ali's "rope a dope" tactics with McCain and it is working. McCain should have known how he got that nomination and why. That's what a good leader knows. Just ask General Giap.

5. I am confused about this whole market debacle. Regarding the market and economics, according to BEA the gdp increased 2.8% in the second quarter of 08 where first quarter increased .09% These increases were reflective of positive logs from exports, personal consumption expenditures and federal, state and local spending. All this with a declining housing market and bursting investment bubbles. So how did these big financial companies start folding like a "House of Cards?" Also the government issued billions of dollars in tax rebate payments, a micro bailout of sorts, to individuals so why the shocker at macro bailout to financial institutions? Mind you, from an individual standpoint being relatively prudent in my spending habits I am not pleased with the impact of the bailout strategies because of the spare the rod spoil the children analogy which could be applied if one sees the government through parent-child eyes. However, looking at what the US stands to lose as a placeholder in world economic position, I understand that this quick fix band aid approach must be done. Having said all of that, these last few months have had a devastating impact on my investment/savings plan and I am furious that I have to sit on the sidelines simulating a Disneyland "E" ticket ride (for those of us who remember those days where E tickets were given for their fastest scariest Disneyland joyrides ) and watch portfolio managers play poop and scoop, pump and dump, and short and distort so they can recoup their dollars at the expense of the individual investors.

6. Bottom line, pun intended, how many times politically, economically, and as a female who is not in support of Sarah Palin and wouldn't be if she were a male candidate either, do I have to bend over and take it in that end?


I disagree. Calif - educationally- is not a separate case. You can't embrace competition and choice with disparate dollars between states. You can't look at per pupil spending and not plan for the school house they live in, the materials they require to succeed, or the models of education that are far superior to what is implemented here. We cannot spend 3x more in new jersey than Calif and expect educational parity. we just can't. We throw dollars after children have been in school for several years instead of early intervention and detection in pre-school. Here's a concept. Pilot funding pre- school in comparative socioeconomic areas and not Headstart programs which cherry pick low income kids and lump them together, but main street kids and low income so kids less exposed to education at this age are not disadvantaged by daycare sitting they receive instead of classroom learning of more affluent kids. You never catch these kids up! I have spent 35 years living this mess. It is not rocket science. But the mantra of competition and choice is just that, Dick. The mantra of administrative bloat is ludicrous. Kids are falling farther and farther behind and then they drop out because they were competitively disadvantaged from the onset. Not by genes or map location but because the educational system is a failed them. Not because they weren't presented with skills. They were. We throw billions of dollars buying defense equipment. Whose going to operate them? Per /pupil spending is not the formula to help this country dig itself out of the educational rabbit hole it has created. No Child Left Behind is a magic act and our kids are disappearing behind the curtain. I have looked at this problem top down as district admin and bottom up as a teacher. You know what one of the biggest expenses a school district has? Transportation not education. Research how many districts are outsourcing bus service? The list goes on and on and none of those expenses are not included in your per/pupil ratio.

My response: Don't take it that way but what we already spend is an enormous sum per/pupil. It is not accomplishing what we need and yet other nations which spend less per/pupil are. I don't want or think we need to throw more money at the problem until we get a return on what we are currently spending. As for California, it is a special case because in California and you are willing to allow anything to impact everything. California is creative but it is also an economic basket case because of the liberal syndrome that money, more money and then more is the solution. Learn to live within your budget and then I will be more sympathetic. Dick

4)Presidential candidates emphasize tax policies in campaign:

Federal tax policy is one of the subjects the two candidates for president of the U.S. discuss most often. This article describes the tax policies of John McCain, the Republican Party candidate for president, and Barack Obama, the Democratic Party candidate.

Although McCain and Obama have outlined their tax policies, they have left many of the details, especially how they would pay for new tax breaks, unspecified. And, as with every political campaign, positions of the candidates may change. This article is based on what our office considers accurate, nonpartisan and unbiased information at the time of publication.


McCain and Obama have put forward a large number of tax proposals impacting individuals. Many of their proposals are driven by the soon-to-expire tax cuts enacted in the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA).

Individual income tax rates

Before EGTRRA, the individual marginal tax rates were 15, 28, 31, 36 and 39.6 percent. EGTRRA and subsequent legislation gradually phased in lower rates, which for 2008 are 10, 15, 25, 28, 33, and 35 percent. EGTRRA also created the 10 percent rate, which subsequent legislation expanded and accelerated. Because of EGTRRA's sunset provision, the pre-EGTRRA rates are scheduled to return after 2010.

McCain. McCain has endorsed making all of the lower individual income tax rates in EGTRRA permanent.

Obama. Obama has proposed making the 10, 15, 25, and 28 percent rates permanent while restoring the pre-EGTRRA rates of 36 and 39.6 percent.

Comment. Obama has also proposed excluding individuals age 65 and older from federal income tax liability if they earn $50,000 or less along with creating a new "Making Work Pay" tax credit of $1,000 for lower and middle-income families and $500 for lower and middle-income individuals to offset federal payroll taxes.

Personal exemptions

Personal exemptions are allowed for the taxpayer, spouse and each qualifying dependent. The personal exemption amount for 2008 is $3,500.

Obama. Obama has not discussed increasing the personal exemption amount.

McCain. McCain has proposed increasing the dependent exemption (but not the personal exemption for the taxpayer and spouse) by $500 each year beginning in 2010 until it reaches $7,000 (in 2016), at which time it would be once again indexed for inflation.

Pease Limitation

For 2008, single individuals begin to lose some of the value of certain itemized deductions when their adjusted gross income (AGI) exceeds $79,975 ($159,950 for married couples filing jointly). This is commonly referred to as the "Pease limitation." Beginning in 2008, taxpayers only lose one-third of the amount otherwise required under the phase-outs, down from two-thirds in 2006 and 2007.

McCain. McCain has proposed making all of EGTRRA's tax provisions permanent, including the phase-out of the Pease limitation.

Obama. Obama has proposed allowing the phase-out of the Pease limitation to sunset after 2010.

Personal exemption phase-out

The deduction for personal and dependent exemptions may be reduced or eliminated for higher income individuals. EGTRRA gradually reduces the exemption phase-out until it completely disappears for tax years beginning after 2009. However, because of EGTRRA's sunset rules, the exemption phase-out would return after 2010.

Obama. Obama has proposed restoring the phase-out for personal exemptions.

McCain. McCain has endorsed making the elimination of the personal exemption phase-out permanent.

Marriage penalty

EGTRRA and subsequent legislation increased the standard deduction and tax rate brackets for married couples filing jointly to twice the amount applicable to single taxpayers to help close the so-called marriage penalty. Marriage penalty relief is scheduled to sunset after 2010.

McCain. McCain has endorsed making all of EGTRRA's tax cuts, including marriage penalty relief, permanent.

Obama. Obama has indicated his support for making marriage penalty relief permanent.

Child tax credit

The current $1,000 child tax credit was first increased by EGTRRA and then accelerated by subsequent legislation. The child tax credit, which is not indexed for inflation, will remain at $1,000 until EGTRRA sunsets after 2010.

McCain. McCain has supported making the child tax credit permanent.

Obama. Obama has indicated his support for making the child tax credit permanent.

Child and dependent care credit

The child and dependent care credit, which is nonrefundable, is a percentage of the amount of work-related child and dependent care expenses a qualifying taxpayer paid to a care provider. The credit can reach as high as 35 percent of qualifying expenses.

Obama. Obama has proposed making the child and dependent care credit refundable and enhancing it to reach as high as 50 percent of qualifying expenses.

McCain. McCain has not addressed the child and dependent care credit.

Federal estate tax

EGTRRA gradually reduces the federal estate tax rates and totally repeals the federal estate tax for 2010. EGTRRA also gradually increases the exemption amount. After EGTRRA sunsets, the pre-EGTRRA tax rates and exemption amount ($1 million) return. The top marginal estate tax rate is 45 percent for 2008 and 2009.

McCain. McCain has proposed a 15 percent federal estate tax rate and a $5 million exemption amount.

Obama. Obama has proposed a 45 percent federal estate tax rate and a $3.5 million exemption amount. It appears unclear at this time whether the rates will be progressive and at what level the 45 percent rate would apply.

Alternative minimum tax (AMT)

Nearly 40 years ago, Congress created the AMT to prevent a small number of very wealthy individuals from evading taxation. Today, largely because the AMT was not indexed for inflation, tens of millions of taxpayers are potentially liable for the tax. However, Congress has kept the AMT from encroaching on middle income taxpayers by enacting so-called "patches," which increase the AMT exemption amounts and allow taxpayers to use most nonrefundable personal credits to offset AMT liability.

McCain. McCain has endorsed higher AMT exemption amounts and allowing taxpayers to use most of the nonrefundable personal credits to offset AMT liability. McCain has also indicated his support for "phasing out" the AMT but has not provided details of how the federal government would pay for the loss of AMT revenues.

Obama. Obama has proposed extending the 2007 AMT patch and raising the exemption amounts for inflation.

Dividends and capital gains

Qualified dividend income and capital gains tax rates for 2008 through 2010 are zero percent for individuals in the 10 and 15 percent tax brackets, and 15 percent for individuals in the higher tax brackets. When the lower rates sunset in 2011, the capital gains tax rate will increase to 10 percent for taxpayers in the 15 percent tax bracket, and 20 percent for taxpayers in higher brackets, while qualified dividend income will lose its preferential tax treatment (and dividend income will once again be subject to ordinary income tax rates).

Obama. Obama has proposed increasing the maximum tax rate on capital gains to 20 percent. One variation on the proposal has the 20 percent rate increase applicable only to families with incomes of more than $250,000 ($200,000 for individuals).

McCain. McCain would maintain the lower tax rates for both qualified dividends and long-term capital gains, ranging from zero to 15 percent.

Retirement savings

The Internal Revenue Code includes numerous tax incentives to encourage individuals to save for retirement. One of these incentives is the nonrefundable saver's credit. In addition, the Pension Protection Act of 2006 enhanced the ability of employers to provide automatic enrollment in retirement plans, like 401(k)s.

McCain. McCain has not addressed the saver's credit or automatic enrollment. However, he has discussed alternatives for retirement savings, such as creating personal accounts for younger employees.

Obama. Obama has proposed expanding the saver's credit and making it refundable and has indicated his support for automatic enrollment in 401(k)s, IRAs and similar arrangements.

Education tax incentives

Beginning in 2008, the maximum amount of the nonrefundable Hope scholarship credit is $1,800 (100 percent of the first $1,200 and 50 percent of the next $1,200) per eligible student for qualifying higher education expenses.

Obama. Obama has proposed making the Hope credit a 100 percent refundable credit for the first $4,000 of qualified higher education expenses.

McCain. McCain has not addressed education tax incentives.

Earned income tax credit (EITC)

The EITC is a refundable federal income tax credit targeted to lower-income taxpayers. When the EITC exceeds the amount of taxes owed, it generates a refund to those who claim and qualify for the credit.

McCain. McCain has not addressed the EITC.

Obama. Obama has proposed expanding the EITC to cover more families and children and boosting the phase-out threshold for married couples filing jointly.

Health benefits

A majority of Americans are covered by employer-provided health benefits. Code Sec. 106(a) generally excludes from an employee's gross income employer-provided coverage under an accident or health plan.

Obama. Obama would preserve the current income tax exclusion for employer-provided health benefits. He has also indicated support for targeted health care tax credits, largely to help lower-income individuals and also for a small business health care tax credit to offset the cost of providing health benefits.

McCain. McCain has proposed treating employer-provided health benefits as taxable compensation to the employee for federal income tax purposes. He has also proposed creating a refundable tax credit of $5,000 for families and $2,500 for single individuals to offset the loss of the exclusion.

Social Security taxes

Social Security is funded by payroll taxes. However, workers pay Social Security tax only on the first $102,000 of their annual incomes for 2008.

McCain. McCain has not addressed the Social Security payroll tax cap. He has discussed various alternatives for retirement savings, such as creating personal accounts for younger employees.

Obama. Obama has proposed a payroll tax of four percent (two percent each from employer and employee) on wage income of higher-income individuals (such as over $250,000).


Obama and McCain have also proposed corporate tax reform. Their proposals, among other things, would lower the U.S. corporate tax rate and make the research tax credit permanent.

Corporate tax rate

Currently, the U.S. has the second highest corporate income tax rate among industrialized nations. The current top corporate income tax rate is approximately 39 percent.

Obama. Obama has proposed lowering the corporate income tax rate to 35 percent and broadening the corporate income tax base.

McCain. McCain has proposed gradually lowering the corporate income tax rate from 35 percent to 25 percent, as well as broadening the corporate income tax base.

Research tax credit

Qualifying taxpayers may claim a tax credit of 20 percent for research and experimentation expenses above a certain base amount. The research tax credit is a nonrefundable credit. The research tax credit expired at the end of 2007.

McCain. McCain would expand the research tax credit and make it permanent.

Obama. Obama has indicated support for making the research tax credit permanent.

Small business depreciation and expensing

Congress has relied several times over the past few years on enhanced Code Sec. 179 small business expensing and accelerated depreciation to stimulate economic growth, most recently in the Economic Stimulus Act of 2008. It is likely that lawmakers will continue these incentives in the future.

Obama. Obama has not addressed small business expensing and depreciation.

McCain. McCain has proposed an immediate, but temporary, first-year deduction of the full cost of 3- and 5-year business equipment purchased between 2009 and 2013, during the year in which the equipment is placed in service. McCain has also proposed eliminating the interest deduction for expensed equipment.

Domestic production activities deduction

Code Sec. 199 allows a deduction for qualifying manufacturing activities. When fully phased in by 2010, the deduction will equal nine percent of the less of qualified production activities for the year or taxable income for the year.

McCain. McCain has endorsed repealing the Code Sec. 199 deduction.

Obama. Obama has indicated support of repealing the Code Sec. 199 for oil and gas companies.


Congress has used the Tax Code several times in recent years to encourage consumers and businesses to make energy-efficient purchases and conserve energy. Many of the tax incentives, however, are temporary.

McCain. McCain has proposed an end to ethanol subsidies and has discussed a temporary federal gas tax holiday. In addition, McCain has also proposed a tax credit for buying zero emission cars.

Obama. Obama has proposed expanding and extending renewable energy and conservation tax incentives and repealing tax incentives for oil and gas companies. Additionally, he has discussed energy rebates for individuals to help offset the cost of home heating.

Possible revenue raisers

Both candidates have described possible revenue raisers:

Obama. Some of Obama's proposals for tax offsets include:

* Taxing "carried interest" - profits paid to compensate hedge-fund managers-- as ordinary income;
* Codifying the economic substance doctrine; and
* Requiring information reporting of basis for gains.

McCain. Some of McCain's revenue raisers include:

* Corporate base broadening;
* Reduction in certain business tax preferences; and
* Eliminate oil/gas "loopholes."

5)Syrian 3rd Army moves south from Iraq border to face Lebanon and Israel

According to military sources, the removal of Syrian forces is intended to punish the US twice for last Sundays’ commando raid in northern Syria which killed 8 people including Abu Ghadiyah, the Syrian controller of smuggled insurgent fighters and weapons into Iraq. First, the 8th Army’s removal opens the Iraqi border open to the free passage of al Qaeda, Fatah al-Islam and Iraqi insurgents for attacks on US forces in Iraq. Second, Syrian troops are now massed in position to bring military pressure to bear on US allies in South Lebanon and Israel.

These developments have set the stage for more US strikes on Syrian soil to hit back at the jumping-off bases used by terrorists and insurgents to attack US targets. US Homeland Security Minister Michael Chertoff said Friday: “A country should have the right to attack another if it is harboring a potential terrorist threat.”

The Syrian 3rd army, which is composed of two Border Guard brigades and two more of infantry and assault helicopters, began moving south Wednesday, Oct. 29, evacuating the 600 km stretch of Syrian-Iraqi border they manned for the past year under a US-Syrian agreement.

The US embassy in Damascus was shut Thursday over an “increased security risk” as tens of thousands mounted an anti-US protest in the town center. The embassy has warned Americans in Syria to stay on alert.

6) Has Obama Overplayed the Race Card?
By Marc Sheppard

How ironic that the same Senator sponsoring the Deceptive Practices and Voter Intimidation Prevention Act of 2007 (S.453) would not only tacitly condone, but actually participate in racial intimidation to advance his presidential prospects. Obama keeps cautioning crowds that "the race is not over," all the while knowing his race most certainly is over: all over every facet of his ambitious strategy to make political history. And, while it began with restrained victim role-playing ("McCain will say 'he doesn't look like the other presidents on dollar bills'"), recent follow-through by his disciples has been about as subtle as a hand grenade -- and it may just be backfiring.

After all, they're now exploiting their candidate's color from virtually every angle imaginable, and many who may have previously felt inclined toward politically correct acceptance are now moving in the direction of downright indignation.

Take, for instance, this August entry from Slate's Jacob Weisberg, who suggested that even though we "may or may not agree with Obama's policy prescriptions," Americans should vote for him anyway. Why? Get a load of this:

"We would finally be able to see our legacy of slavery, segregation, and racism in the rear view mirror. Our kids would grow up thinking of prejudice as a non-factor in their lives. The rest of the world would embrace a less fearful and more open post-post-9/11 America."

While mind-blowingly incomprehensible to those not blinded by the fairy-dust, Weisberg put to words precisely the reckoning-based nonsense so many on the Left have been trying to sell. But hold on to your sanity, he was just warming up:

"But does it not follow that an Obama defeat would signify the opposite? If Obama loses, our children will grow up thinking of equal opportunity as a myth. His defeat would say that when handed a perfect opportunity to put the worst part of our history behind us, we chose not to. In this event, the world's judgment will be severe and inescapable: The United States had its day but, in the end, couldn't put its own self-interest ahead of its crazy irrationality over race."

Beyond the contemptible suggestion that this contest represents an opportunity to "put the worst part of our history behind us," the sanctimonious declaration that an inexperienced super-liberal's failure to win the White House on his first attempt is "inescapable" proof of our "irrationality over race" simply doesn't stand to reason. The fact that this guy is still employed after using the decency of "our children" and the judgment of "the world" to shame us into PC submission, suggesting this as Obama's -- or any other black man's - only shot at the White House, is simply astounding.

Are any but the most committed multi-cultist fanatics daffy enough to allow such nonsense to accompany them into the voting booth?

Only Ignorant, Inbred, Redneck Racists Will Vote for McCain

Apparently, in their insatiable thirst for Democratic authoritarianism, the Left is taking no chances. So they're adding insult to their guilt-mongering.

Newsweek's Jonathan Alter's perchance prescient October 25th piece, Why McCain Won, blames a hypothetical Obama loss on the 60% of the electorate he calls LIVs ("low-information voters'), who not only don't vote in primaries:

"They don't read news magazines or newspapers, don't watch any cable news and don't cast their ballots early. Their allegiance to a candidate is as easily shed as a T shirt. Several million moved to Obama through September and October; they'd heard he handled himself well in the debates. Then, in the last week, the LIVs swung back to the default choice: John McCain. Some had good reasons other than the color of Obama's skin to desert him; many more did not."

As an example of the "many more" that voted against Obama's pigmentation Alter offered the "erosion in the critical I-4 corridor near Tampa and in the Panhandle, where the astonishing Republican margins among whites could be attributed only to race." Mr. Alter's apparent ignorance of or dishonest disregard for the comfortable victory these regions handed George Bush in both 2000 and 2004 leaves one wondering just who deserves to be branded "low-informed."

And speaking of ignoramuses, Alter's followed the rantings of one Jack Murtha -- who castigated his own constituents 10 days earlier when he claimed many would not vote for Obama because "western Pennsylvania is a racist area." The bloated Congressman quickly attempted to walk back the sting of the accusation by suddenly remembering he meant to say the area was "really redneck." Nice save. Hopefully, his dumb mouth will put both his House seat and Obama's lead in the state in jeopardy. After all, no one likes being called stupid.

A reality apparently lost on West Virginia State Democratic Party Chairman Nick Casey who took the name calling to an entirely new level. During an October 18th bus-tour road performance, the inimitable Obama cheerleader incited a Beckley, WV crowd by telling them "there's a lot of people out there think you're a bunch of inbred, redneck racists."

Yes he did.

Then, after eliciting loud cries of "No!" from the 300-strong union hat and jacket wearing horde by rhythmically screaming the questions "Are you ignorant? Are you inbred? Are you racist?" -- he delivered the hay maker:

"John McCain is confident that ignorant, redneck racists are not going to vote for Barack Obama, because Barack Obama is black."

So much for Liberal tolerance.

Of course, anyone on the receiving end of such abuse actually swayed by it likely deserves to be called ignorant. Hopefully, most were rightfully repulsed.

Don't call me Socialist, Whitey

Rather than dispensing their duties as public watchdogs by unraveling the mystery that is Barack Obama, the media at large have done their collective best to maintain his shroud of secrecy. As volunteers for the Obama election committee, they have joined with Left leaning politicians in general and certain black ones specifically to move all matters uncomfortable to their candidate out of bounds by unilaterally declaring them racially insensitive. And when I say all matters, I mean just that, regardless of relevance. For instance:

* As Black racism is the direct result of White racism, any mention of racist Jeremiah Wright or the Obamas' 20 years of receiving his anti-American anti-White sermons, is itself, racist.
* As ACORN is largely a black organization concerned primarily with minority issues, any questions about the multi-state vote-rigging allegations against them or Obama's involvement therein is racist.
* Mentioning Obama once "palled around" with Bill Ayers is racist - despite the domestic terrorist's white face.
* Suggesting minority-centric lending policies were factors in the Fannie/Freddie collapse is racist; more so if former Fannie Mae CEO Franklin Raines' name is surfaced.
* Calling a black man "articulate and bright and clean" is racist as it apparently implies most are not.
* "Arrogant" and "Elitist" are both code-words for "uppity" which has a particularly pernicious meaning when applied to anyone of color.
* "Socialist" is a code-word for black.
* "Community Organizer" is also a code-word for black
* Even "Inexperienced" is a code-word for black.
* "Celebrity" is a code-word for black, and a subliminal reference to black-on-white rape when juxtaposed with celebrities of fair and soft skin.

While the use of empty allegations of racism to end debate is nothing new, can anyone read the preceding bullet list and not be completely fed up with this tactic?

The White Fear Factor

This is where the racial intimidation rubber truly meets the road.

Reports are popping up claiming that urban police departments are preparing for "whatever may happen on Election Night." Some of the buzz is over "massive protests" should Obama lose.

But some plays directly to fear. Fear that protests may escalate to violence. Mysteriously, this angry black man stereotyping seems to suit the race-baiters just fine, thank you.

Granted, the concern didn't spring solely from the Liberal well. As far back as January, Jonah Goldberg predicted that if Obama's "rendezvous with destiny" were to be denied, "teeth shall be gnashed, clothes rent and prices paid." That same month, I myself asked "should Obama prevail in the primaries, just what might we expect were he to lose the general election, particularly in a squeaker?" Two months later, Fox Radio host Tom Sullivan proffered an answer when he projected there'd "be riots in the streets."

But once Obama's status changed from long shot wannabe to serious contender, concerns from the Right quickly gave way to threats from the Left.

In early September, Philadelphia Daily News writer Fatimah Ali stoked the fires by declaring:

"If McCain wins, look for a full-fledged race and class war, fueled by a deflated and depressed country, soaring crime, homelessness - and hopelessness!"

Weeks later, a Newsweek article answered its evocative title What If Obama Loses?, partially with this quote from rapper Snoop Dogg:

"People that I know that have never cared about politics are registering to vote this time: gang members, ex-cons, you name it. I hate to see a lot of that hope go down the drain, and if he loses, it will."

But it's not just ticked off gang bangers and ex-cons they'd have us fear. In the same article, they quote California construction worker Daetwon Fisher:

"I'm going to be mad, real mad, if he doesn't win. Because for him to come this far and lose will be just shady and a slap in black people's faces. I know there is already talk about protests and stuff if he loses, and I'm down for that."

Of course, it wasn't only blacks putting us on notice. On October 7th, Democratic strategist James Carville assured CNN's Anderson Cooper that "if Obama goes in and he has a consistent five point lead and loses the election, it would be very, very, very dramatic out there."

Truth be told, the most likely blood-letting brought on by an Obama loss will be that of MSNBC blowhards hitting the pavement after doing a Peter-Pan from their office windows. Nonetheless, while the candidate himself has never suggested there'd be violence, neither has he called for calm should he lose. Nor have we heard his denunciation of the epithets being slung at rural people he himself once accused of "clinging to guns and religion."

By overplaying their race-card hand, the campaign may very well have weakened the white guilt wind once at their backs. As a result, next Tuesday's voters will likely be more concerned with how Obama intends to reshuffle the wealth deck than the cards he has dealt from the race deck.

And with the RCP Poll Average gap trending narrower over the past 6 days, that's good news for John McCain.

Throwing capitalism out with the water - high cost?

First poll results announced of American's living abroad - in Israel. (See 1 below.)

I Have always believed anyone who wants to be president is missing a few screws and that a psychological test should be given and posted on the ballot.

This was forwarded to me by a dear psychiatrist friend and fellow memo reader. I do not vouch for its veracity but it is interesting thugh very harsh analysis. It addresses the comments made in the article by Fouad Ajami (Obama and The Politics of Crowds) I posted yesterday about the danger of charisma politics. Style over substance. You decide. (See 2 below.)

Henninger gives you some important food for thought before you cast your vote. Without realizing it and with no true spelling out of programs, policies etc. we may get what we did not want. Throwing capitalism out with the water can come at a high cost. For the want of a better ticket (McCain-Palin) a nation and way of life may be lost. (See 3 below.)

Iran keeps moving down the "yellow cake road." (See 4 below.)

Livni throws down the gauntlet to Syria. What is so amazing is that Olmert continues to talk with Syria.(See 5 and 5a below.)

Gregory Helvering lays out what "spreading the wealth - Obama style" might mean. (See 6 below.)

Who knows what we will get and we might get what we asked for and then learn it was not what we ordered. Has that ever happened to you when you were in a restaurant. America is a big restaurant. Nevertheless, a very thoughtful and balanced review of the two Obama's. (See 7 below)

Perhaps not the end of journalism as such but certainly the end of any pretense at objectivity. (See 8 below.)

I have posted a vast range of articles some very critical some very balanced and objective. You decide which way you want to fall but I do believe they are all worth reading and pondering.

Have a great weekend.


1) First exit poll of actual American votes from Israel shows big McCain win [Tom Gross]

Within the last hour, the first exit poll of 817 Americans in Israel , who attended U.S. election voting events in Jerusalem and Tel Aviv on Tuesday evening to vote by absentee ballot, has been released.

A startling 76 percent of those polled said that they had voted for John McCain. This contrasts sharply with pre-election polls of American Jews in the U.S. , which indicate a strong preference for Obama.

The exit poll findings of American voters in Israel are all the more surprising because less than one in four were registered Republicans, and 46% of registered Democrats living in Israel said they had crossed party lines to vote McCain. By contrast, the Republican crossover to Obama was minimal – just 2%.

The votes are significant as almost half of the 42,000 registered U.S. voters living in Israel come from key swing states including Florida , Ohio and Pennsylvania .

In the 2000 and 2004 elections, Israel had the third-largest group of American voters abroad, after Canada and Britain .

The exit poll was commissioned by, an independent, non-partisan organization dedicated to promoting voter registration and participation amongst American citizens living in Israel .

2) Understanding Obama: The Making of a Fuehrer
By Ali Sina

I must confess, I was not impressed by Sen. Barack
Obama from the first time I saw him. At first I was excited
to see a black candidate. He looked youthful, spoke well,
appeared to be confident, a wholesome presidential package.
I was put off soon, not just because of his shallowness but
also because there was an air of haughtiness in his demeanor
that was unsettling. His posture and his body language were
louder than his empty words. Obama's speeches are unlike
any political speech we have heard in American history.
Never a politician in this land had such a quasi
"religious" impact on so many people. The fact
that Obama is a total incognito with zero accomplishment
makes this inexplicable infatuation alarming. Obama is not
an ordinary man. He is not a genius. In fact, he is quite
ignorant on most important subjects. Barack Obama is a
narcissist. Dr. Sam Vaknin, the author of "Malignant
Self Love," also believes, "Barack Obama appears
to be a narcissist."

Vaknin is a world authority on narcissism. He
understands it and describes the inner mind of a narcissist
like no other person. When he talks about narcissism
everyone listens. Vaknin says that Obama's language,
posture and demeanor, and the testimonies of his closest,
nearest and dearest suggest that the Senator is either a
narcissist or he may have narcissistic personality disorder

Narcissists project a grandiose but false image of
themselves. Jim Jones, the charismatic leader of
People's Temple, the man who led over 900 of his
followers to cheerfully commit mass suicide and even murder
their own children was also a narcissist. Charles Manson,
Joseph Koni, Shoko Asahara, Joe Stalin, Saddam, Mao Zedong,
Kim Jong IL, and Adolph Hitler are a few examples of
narcissists of our time. All these men had a tremendous
influence over their fanciers and followers. They created a
personality cult around themselves, and with their blazing
speeches elevated their admirer's souls, filled their
hearts with enthusiasm and instilled in their minds a new
zest for life. Those men gave their followers hope! They
promised them the moon, but alas, they invariably brought
them to their doom. When you are a victim of a cult of
personality, you don't know it until it is too late.

One determining factor in the development of NPD is
childhood abuse. "Obama's early life was decidedly
chaotic and replete with traumatic and mentally bruising
dislocations," says Vaknin. "Mixed-race marriages
were even less common then. His parents went through a
divorce when he was an infant (two years old). Obama saw his
father only once again, before he died in a car accident.
His mother re-married and Obama had to relocate to
Indonesia, a foreign land with a radically foreign culture,
to be raised by a stepfather. He was raised as an only
child, full of himself and no others. He never had to share
the spotlight with any siblings. At the age of ten, he was
whisked off to live with his maternal (white) grandparents.
He saw his mother only intermittently in the following few
years and then she vanished from his life in 1979. She died
of cancer in 1995."

One must never underestimate the manipulative
genius of pathological narcissists. They project such an
imposing personality that it overwhelms those around them.
Charmed by the charisma of the narcissist, people become
like clay in his hands. They cheerfully do his bidding and
delight to be at his service. The narcissist shapes the
world around him and reduces others in his own inverted
image. He creates a cult of personality; his admirers become
his co-dependents.

Narcissists have no interest in things that do not
help them to reach their personal objectives. They are
focused on one thing alone, and that is power. All other
issues are meaningless to them and they do not want to waste
their precious time on trivialities. Anything that does not
help them is beneath them and does not deserve their
attention. If an issue raised in the Senate does not help
Obama in one way or another, he has no interest in it. The
"Present" vote is a safe vote; he used the
"Present" all the time as a member of the Illinois
legislature. No one can criticize him if things go wrong.
Why should he implicate himself in issues that may become
controversial when they don't help him personally? Those
issues are unworthy by their very nature because they are
not about him.

Obama's election as the first black president
of the Harvard Law Review led to a contract and an advance
to write a book about race relations. The University of
Chicago Law School provided him with a fellowship and an
office to work on his book. The book took him a lot longer
than expected and at the end it devolved into., guess what?
His own autobiography! Instead of writing a scholarly paper
focusing on race relations, for which he had been paid,
Obama could not resist writing about his most sublime self.
He entitled the book "Dreams from My Father."

Not surprisingly, Adolph Hitler also wrote his own
autobiography when he was still nobody. So did Stalin. For a
narcissist no subject is as important as his own self. Why
would he waste his precious time and genius writing about
insignificant things when he can write about such an august
being as himself? Narcissists are often callous and even
ruthless. As the norm, they lack conscience. This is evident
from Obama's lack of interest in his own brother who
lives on only one dollar per month. A man who lives in
luxury, who takes a private jet to vacation in Hawaii, and
who has raised nearly a half billion dollars for his
campaign (something unprecedented in history) has no
interest in the plight of his own brother. Why? His brother
cannot be used for his ascent to power. A narcissist cares
for no one but himself.

This election is like no other election in the
history of America. The issues are insignificant compared to
what is at stake. What can be more dangerous than having a
man bereft of a conscience, a serial liar, and one who
cannot distinguish his fantasies from reality as the leader
of the free world?

I hate to sound alarmist, but one must be a fool if
one is not alarmed. Many politicians are narcissists. They
pose no threat to others. They are simply self-serving and
selfish. [Witness Al Gore's Income Tax; it reveals that
he gave away NO MONEY to charities, not even to a church!]
Obama evinces symptoms of pathological narcissism, which is
different from the run-of-the-mill narcissism of a Richard
Nixon or Bill Clinton, for example. To him reality and
fantasy are intertwined. This is a mental health issue, not
just a character flaw. Pathological narcissists are
dangerous because they look normal and even intelligent. It
is this disguise that makes them treacherous. [Look up the
word 'treachery.']

Today the Democrats have placed all their hopes in
Obama. But this man could put an end to their party [and to
this great nation]. The great majority of blacks have also
decided to vote for Obama. Only a fool does not know that
their support for him is racially driven.

Let us call a spade a spade [No pun intended]. This
is racism, pure and simple. The truth is that, while
everyone carries a misconceived collective guilt towards
blacks for wrongs done centuries ago by a bygone people to a
bygone people, the blacks carry a collective rancor, enmity
or vendetta towards non-blacks, and to this day want to
"stand up" to the white man. They seem to be stuck
in 19th century [encouraged by race baiters like Al
Sharpton, Jesse Jackson and others].

The downside of this is, that if Obama turns out to
be the disaster I predict, he will cause widespread
resentment among the whites. The blacks are unlikely to give
up their support of their man. Cultic mentality is
pernicious and unrelenting. They will dig their heads deeper
in the sand and blame Obama's detractors of racism. This
will cause a backlash among the whites. The white
supremacists will take advantage of the discontent and they
will receive widespread support. I predict that in less than
four years, racial tensions will increase to levels not seen
since the turbulent 1960s. Obama will set the clock back
decades. Americais the bastion of freedom. The peace of the
world depends on the strength of America, and its weakness
translates into the triumph of terrorism and victory of
rogue nations. It is no wonder that Ahmadinejad, Hugo
Chavez, the Maoist Castroists, the Hezbollah, the Hamas, the
lawyers of the Guantanamo terrorists, and virtually all
sworn enemies of America are so thrilled by the prospect of
"their man" in the White House. America is on the
verge of destruction. There is no insanity greater than
electing a pathological narcissist as president.

3)The True Meaning of 'Historic Vote': Shifting America's animating idea from creation to protection.
By Daniel Henninger

The most basic explanation for why Barack Obama may win next Tuesday is that voters want economic deliverance. The standard fix for this in politics everywhere is to crowbar the old party out and patch in the other one. It is true as well that the historic nature of the nation's first African-American candidacy would play a big role.

Push past the historic candidacy, however, and one sees something even larger at stake in this vote. One sees what Joe (The Plumber) Wurzelbacher saw. The real "change" being put to a vote for the American people in 2008 is not simply a break from the economic policies of "the past eight years" but with the American economic philosophy of the past 200 years. This election is about a long-term change in America's idea of itself.

I don't agree with the argument that an Obama-Pelosi-Reid government is a one-off, that good old nonideological American pragmatism will temper their ambitions. Not true. With this election, the U.S. is at a philosophical tipping point.

The goal of Sen. Obama and the modern, "progressive" Democratic Party is to move the U.S. in the direction of Western Europe, the so-called German model and its "social market economy." Under this notion, business is highly regulated, as it would be in the next Congress under Democratic House committee chairmen Markey, Frank and Waxman. Business is allowed to create "wealth" so long as its utility is not primarily to create new jobs or economic growth but to support a deep welfare system.

An Obama presidency would lead America towards a European "social market economy." (Oct. 30)

The political planets are aligned to make this achievable. In the aftermath of the financial crisis, prominent Democrats, European leaders in France and Germany and more U.S. newspaper articles than one can count have said that the crisis proves the need to permanently tame the American "free-market" model. P.O.W. Alan Greenspan is broadcasting confessions. The question is: Are the American people of a mind to throw in the towel on the system that got them here?

This would be a historic shift, one post-Vietnam Democrats have been trying to achieve since their failed fight with Ronald Reagan's "Cowboy Capitalism."

Of course Cowboy Capitalism built the country. More than any previous nation in history, the United States made its way forward on a 200-year wave of upwardly mobile, profit-seeking merchants, tradesmen, craftsmen and workers. They blew out of New England and New York, rolled across the wildernesses of the Central States, pushed across a tough Western frontier and banged into San Francisco and Los Angeles, leaving in their path city after city of vast wealth.

The U.S. emerged a superpower, and the tool of that ascent was simple -- the pursuit of economic growth. Now China, India and Brazil, embracing high-growth Cowboy Capitalism, are doing what we did, only their cities are bigger.

Now comes Barack Obama, standing at the head of a progressive Democratic Party, his right hand rising to say, "Mothers, don't let your babies grow up to be for-profit cowboys. It's time to spread the wealth around."

What this implies, undeniably, is that the United States would move away from running with the high GDP, high-growth nations rising today as economic and political powers and move over to retire with the low-growth economies we displaced -- old Europe.

As noted in a 2006 World Bank report, spending in Europe on social-protection programs averages 19% of GDP (85% of it on social insurance programs), compared to 9% of GDP in the U.S. The Obama proposals send the U.S. inexorably and permanently toward European levels of social protection. This isn't an "agenda." It's a final temptation.

In partial detail:

Obama's federalized medical insurance system starts the transition away from private medical care and toward Obama's endlessly promised "universal health care." This has always been the sine qua non of planting a true, managed-market economy in the U.S.

Obama's refundable tax credits are direct cash transfers from the federal government. This would place some 48% of Americans, nearly half, out of the income tax system. More than a tax proposal, this is a deep philosophical shift, an American version of being "on the dole."

His stated intent to renegotiate free-trade agreements such as Nafta is a philosophical shift. It abandons the tradition of a hyper-competitive America dating back to the Industrial Revolution, toward a protected, domestic workforce, as in Western Europe. The Democratic proposal to eliminate private union votes -- "card check" -- ensures the spread of a static, Euro-style workforce.

Eliminating the ceiling on payroll taxes changes Social Security from an insurance to a welfare program. Obama's tax credits requires performing government-identified activities, the essence of a "directed economy."

All this would transform the animating American idea -- away from creation and toward protection.

Many voters -- progressive Democrats, the asset-safe rich, academics and college students -- regard this as where America should go. They explicitly want America's great natural energies transferred away from unwieldy economic competition and toward social construction. They want the U.S. to reduce its "footprint" in the world. Monies saved by stepping down from superpower status can be reprogrammed into "investments" (a favorite Obama word) in a vast Euro-style hammock of social protection programs.

One wishes John McCain had been better able to make clear what the truly "historic" meaning of Tuesday's vote is. Once it's done, it's done.

4)Iran tests ways of recovering weapons-grade uranium from spent nuclear fuel

This intelligence assessment, disclosed to AP by a member of the International Atomic Energy Agency (IAEA), indicates that the Iranians are testing ways of using nuclear waste from the Bushehr reactor, which the Russians have pledged to finish by the end of the year or March, 2009, at latest.

Moscow has provided the necessary fuel. Both Moscow and Iran claim the Bushehr reactor is purely for peaceful purposes.

The spent fuel at issue as the source of the enriched uranium is not enough to yield the 30 kilos of weapons grade (90 percent enriched) material for a bomb, but is another step in that direction. Bushehr could provide enough nuclear waste for rapid production of several bombs or warheads.

In a Kol Israel radio interview this week, Martin Indyk, former US ambassador to Israel and member of Barack Obama’s Middle East team, disclosed that US intelligence now reckons Iran will have between one and three nuclear bombs by the end of 2009.

The tests, which loosely replicate Saddam Hussein’s attempt to build a bomb 20 years ago, were described by the source as “evaluating procedures for recycling fuel by dissolving fuel rods for irradiated waste, then reprocessing it for uranium metal,” which is used for nuclear warheads.

The source material, says the intelligence report, would be highly enriched, some at above 90 percent and the rest at 20 percent. “

“Sufficient data was collected for planning production lines for recovering the fuel,” according the assessment, which discloses the location of the experiments as Jaber ibn Hayan Laboratories in Tehran run by the Atomic Energy Organization of Iran. They will soon submit a report to the Iranian leadership for a decision on whether to go ahead with the project.

5)Livni: Syria must cut ties to Iran, terror before we give them what they want
By Barak Ravid and Yoav Stern

Kadima party head Tzipi Livni on Friday responded to reports that Prime Minister Ehud Olmert intends to resume indirect, Turkish-mediated negotiations with Syria soon, saying that "before the Syrians get from us what they want, they must show through their actions that they intend to stop arming Hezbollah, and must cut ties with Iran and terrorism," according to a report on Army Radio.

Livni also said Sunday that the government "must determine if we are talking about continuing just the talks?or determining facts on the ground before elections, something that is not appropriate or acceptable."

"The government needs at this time to focus on the management of the country and find solutions to the problems facing us right now, nothing more than this," Livni added.

The official who reported that Olmert intends to continue talks added that talks between the Prime Minister's Bureau and the bureau of Turkish Prime Minister Recep Tayyip Erdogan would be held next week to try to coordinate an agreed-on date for what would be the fifth round of indirect talks with the Syrians.

In response to the report, Likud MK Yuval Steinitz slammed Olmert as having delivered a "simultaneous blow to the principles of democracy and the crucial interests of the State of Israel," by carrying out such negotiations with Syria.

Meanwhile, Livni has called for an increase of international pressure on Syria.

Olmert's intention to resume talks has raised fury among right-wing lawmakers, especially as the government elections.

Olmert met Tuesday with Danish Foreign Minister Per Stig Moeller, who had held a two-hour meeting with Syrian President Bashar Assad a few days earlier in Damascus. Assad expressed a desire to continue talks with Israel, and was "very serious," the Danish minister told Olmert.

Moeller also said Assad had told him he was willing to conduct direct negotiations with Israel while President George W. Bush is still in office, if Assad were to receive a satisfactory response from Israel to the "six-point document" he gave the Turkish prime minister in September.

According to an Israeli government source, Israel is aware of the content of the document. Haaretz has learned that the document contains three points dealing with the marking of the border of the Golan Heights and three points dealing with security issues in the framework of a peace treaty between the two countries.

Olmert reportedly told Moeller that his intentions toward the Syrians were also serious and noted that he had said as much in an interview he gave recently to Yediot Ahronoth. Olmert also reportedly told Moeller that Israel would answer the Syrians' questions at the coming meeting. The Prime Minister's Bureau declined to comment on the matter.

If a date is set for another round of talks, it will be handled by the same team as the previous rounds, including Yoram Turbovicz and and Shalom Turjeman. Turbovicz retired in August from his position as Olmert's bureau chief and recently received approval from the attorney general to head the negotiating team on a voluntary basis. The arrangement for Turbovicz was several months in the making, one of the reasons talks with the Syrians were frozen.

The six-point document was first made public at a summit in Damascus at the beginning of September, attended by the president of France, the Turkish premier and the emir of Qatar, where Assad announced that he had given the document to Ankara, and that it included Syria's demands regarding an agreement with Israel. Assad is believed to view Israeli agreement to the document, which Israel received via Turkey, as a condition for a move to direct talks.

Despite Olmert's desire to talk to the Syrians, he may find it difficult to do so because of the major tensions between Damascus and Washington following the U.S. air attack on Syrian territory on Sunday, which killed eight people. Syria took a number of steps against American institutions in Damascus, and the U.S. State Department announced that the American Embassy in Damascus would be closed until further notice.

Syria announced Thursday it would withdraw its Border Guard forces from the border with Iraq as a "punitive measure" against the United States for the bombing. A huge anti-American demonstration was also organized in Damascus to protest the attack. ABC News reported on Friday that the Bush Administration nixed a proposal by incoming head of the U.S. Central Command General David Petraeus to visit Syria shortly after he takes over the post as the top U.S. commander for the Middle East.

The last round of Turkish-mediated indirect talks between Israel and Syria ended the same day Olmert announced he was leaving office in the wake of the investigations against him. The fifth round, planned for the beginning of September, was postponed because of the political situation in Israel and Turbovicz's departure.

Olmert kept a low political profile after the Kadima primary to allow the party's new chairwoman, Livni, to conduct coalition talks without interruption. However, sources told Haaretz that following Livni's failure to form a government and the call for early elections, with Olmert now having at least three months left in office, Israel initiated the move to renew talks with the Syrians.

Renewing talks with Syria does not exceed Olmert's authority as head of a transition government; however, he could find himself the subject of criticism by Livni. Livni told the Turkish defense minister Thursday that the smuggling of weapons from Syria to Hezbollah was very serious, adding, "International pressure must be brought to bear on Syria to stop this phenomenon."

Olmert did not discuss the diplomatic talks in his speech at the opening of the Knesset's winter session Monday, but he did note that "the interests of the country do not go into deep-freeze. Olmert also said that "the feeling of a preelection freeze is misleading - there are decisions to be made and a country to run. The decisions will be made and the country will be run."

Meanwhile, a Syrian commentator living in the West, Camille Alexandre Otrakji, said he believed the proposal raised by President Shimon Peres and Defense Minister Ehud Barak to negotiate based on the Arab peace initiative could be dangerous. In a blog on a public affairs Web site focusing on Syria, Otrakji wrote that the initiative could "...probably be another cycle of chaos, violence, war threats followed by a sequence of flipping peace tracks." Otrakji does not represent the official Syrian position, but his comments are apparently close to that position.

5a) MKs turn to Mazuz in bid to stop Olmert resuming Syria talks

Likud MKs on Friday asked Attorney-General Menahem Mazuz to examine whether Prime Minister Ehud Olmert has the authority to resume peace talks with Syria while he only heads a transitional government.

It followed reports Friday that Olmert planned to ask Turkey next week to arrange another round of negotiations.

"Olmert has no authority for such a move and he has no legal right at the end of this government's reign to make unacceptable commitments on Israel's behalf," said Likud MK Limor Livnat, who submitted the petition to the attorney-general.

Livnat said she hoped Mazuz would act within a day or two to block Olmert from resuming the negotiations.

Likud MK Gilad Erdan said that "Olmert has no ethical or legal authority to conduct peace talks and to make commitments in Israel's name," adding that "[Kadima leader] Tzipi Livni's silence about Olmert's actions proves her willingness to give up the Golan Heights."

On Friday afternoon, Livni also distanced herself from the notion of continuing discussions with Syria. "If this is more than just maintaining the negotiations alive, it is inappropriate and unacceptable," she said.

Erdan's colleague in Likud, Reuven Rivlin, said a transitional government didn't have a mandate to conduct negotiations over Israel's vital interests. He called on Kadima to show national responsibility and block Olmert from resuming the Syria talks.

"A transitional government may have a legal standing, but it certainly does not have the public and moral standing to make great changes and commit the people and the state to things that will affect generations to come," Rivlin told Army Radio.

Negotiators have held four rounds of indirect talks through Turkish mediators, but contacts have been suspended for months because of the political upheaval.

The prime minister's spokesman, Mark Regev, said Olmert believed peace talks with Syria should continue even though elections are pending, saying the prime minister "sees importance in the continuation of the dialogue" with Syria.

Another official in Olmert's office said the prime minister hoped to have Turkey arrange another round of talks with the Syrians soon. It would be the fifth between the sides.

Olmert is aware of the restrictions of his caretaker role and is not planning to reach agreements with the Syrians, the official said. Instead, he hopes to receive answers about Syria's willingness to distance itself from its allies in Iran and Hizbullah.

In turn, he said, the Syrians were expected to raise the subject of final borders.

The official spoke on condition of anonymity because the information was not officially made public.

Like his fellow Likud MKs, Yuval Steinitz said Olmert's conduct regarding the Syria issue harmed Israel's democratic principles and its most vital interests.

"It seems as if someone is belittling the rule of law and democratic principles, and for the sake of his personal record is prepared to harm Israel's most vital interests," said Steinitz.

"In addition, it appears that she who is known as the 'clean lady' is holding a pragmatic silence and this raises serious questions about her cleanliness and credibility," he added, referring to Livni. Steinitz made his comments before Livni expressed her displeasure at Olmert's decision.

There was also a harsh response from Olmert's cabinet, with Industry, Trade and Labor Minister Eli Yishai saying that negotiations with Syria "legitimize the axis of evil" and that talks at this time would weaken Israel.

In contrast, Culture and Sports Minister Ghaleb Majadle said that specifically at this current juncture, peace talks with the Syrians and the Palestinians must be accelerated.

"When we need to make peace, it should not be delayed just because of elections," he said.

Kadima MK Yitzhak Ben-Yisrael also defended the continuation of peace talks with Syria.

"There is no reason to stop the peace negotiations with Damsacus," he said. "It will anyway take time for talks to advance to the agreement stage."

Meanwhile, a senior Jerusalem official said that if Olmert intends to resume the indirect talks with Damascus he should consult with his ministers, or at least with members of the Security Cabinet.

The official said that the current transitional government could not reach any agreement or make decisions that would place the next government under any obligation, Israel Radio reported.

6) Spreading the Wealth and Killing the Goose
By Gregory V. Helvering

Larry King: Concerning spreading the wealth, isn't the graduated income tax spreading the wealth? ....

Senator McCain: Well, that's spreading the wealth in the respect that we do have a graduated income tax. That's a far cry from taking from one group of Americans and giving to another. I mean, that's dramatically different.

- "Larry King Live," October 29, 2008

John McCain put his finger on an important point: we currently have an extraordinarily progressive income tax, which requires the wealthy (and the relatively wealthy) to bear virtually the entire burden of the income tax. Obama wants to spread the wealth not because the wealthy do not currently bear their fair share of supporting the government. He wants to spread the wealth because he views the wealth itself as unfair.

According to the latest IRS statistics, released this summer, we have an extremely progressive income tax system. For 2006 (the latest year for which statistics are available), the share of the federal income tax paid by the top 1 percent of tax returns reached an all-time high -- 40% of all federal income taxes. The top 50% paid 97% of the tax. The bottom 50% paid only 3% of it.

In addition, there were 43 million tax returns filed by people who had gross income but who -- after deductions, exemptions and credits -- had no tax liability at all. Many of these people got free money from the federal government, via "refundable credits" such as the Earned Income Tax Credit. They got "refunds" even though they did not pay any income tax in the first place.

Even more importantly, the statistics demonstrated that the Bush tax cuts actually increased the share of taxes paid by the "rich" (however they are defined). In 2000 (the last year of the Clinton administration), the top 1% paid 37% of the federal income tax; by 2006, the figure was 40%. In 2000, the top 25% paid 84% of the tax -- by 2006 it had increased to 86%. In 2000, the bottom 50% paid 4% -- in 2006 the percentage had dropped to 3% (a 25% drop in the relative tax burden on the lower half of the country).

So after the Bush tax cuts the burden the "rich" bear is significantly up and the burden on the rest of society is dramatically down. That's great news, right?

Well, no -- not if your goal is "redistributive change" (and if you don't think the courts, shackled as they are by their "interpretation" of the rights in the Constitution, can do it for you). If the change you believe in is "redistributive change," increasing the burden of government borne by the rich is nice, but it does not get you where you really want to go.

Robin Hood was not upset at the relative costs among the citizenry of supporting the Sheriff of Nottingham. He did not think the rich should bear a greater burden in helping the Sheriff create an ordered society. He wanted the money for his chosen beneficiaries, not for the government. He didn't want tax increases on the rich; he wanted their income.

For progressives, the above IRS statistics simply prove that, under the Bush tax cuts (which were across the board to all taxpayers), the "rich" made more money (since they were allowed to keep more of it and invest it, which produced even more income for them). The "rich" thus paid more taxes, and bore a greater burden of financing government, but for progressives, the Bush tax cuts have to be rescinded even if they demonstrably shifted more of the tax burden to the rich.

For progressives, the goal is not ultimately to create more tax revenue for the government, but to equalize the income of the citizenry. So increased taxes from the rich are not a solution if they mean the rich made more money compared to others. In fact, even if the tax cuts end up making the tax system more progressive, that simply exacerbates the problem: the "gap" between rich and poor.

That is why Obama had this exchange earlier this year with Charlie Gibson about increasing the capital gains tax rate:

GIBSON: . . . [You] said you would favor an increase in the capital gains tax. As a matter of fact, you said on CNBC, and I quote, "I certainly would not go above what existed under Bill Clinton," which was 28 percent. It's now 15 percent. That's almost a doubling, if you went to 28 percent.

But actually, Bill Clinton, in 1997, signed legislation that dropped the capital gains tax to 20 percent.

OBAMA: Right.

GIBSON: And George Bush has taken it down to 15 percent.

OBAMA: Right.

GIBSON: And in each instance, when the rate dropped, revenues from the tax increased; the government took in more money. And in the 1980s, when the tax was increased to 28 percent, the revenues went down.

So why raise it at all, especially given the fact that 100 million people in this country own stock and would be affected?

OBAMA: Well, Charlie, what I've said is that I would look at raising the capital gains tax for purposes of fairness. . . .

We saw an article today which showed that the top 50 hedge fund managers made $29 billion last year - $29 billion for 50 individuals. And part of what has happened is that those who are able to work the stock market and amass huge fortunes on capital gains are paying a lower tax rate than their secretaries. That's not fair.

And what I want is not oppressive taxation. I want businesses to thrive, and I want people to be rewarded for their success. But what I also want to make sure is that our tax system is fair and that [blah, blah, blah for another 155 words].

GIBSON: But history shows that when you drop the capital gains tax, the revenues go up.

OBAMA: Well, that might happen, or it might not. It depends on what's happening on Wall Street and how business is going. . . . [Emphasis added].

Obama does not appreciate the fact that tax incentives for investment and business expansion have a direct effect on "what's happening on Wall Street and how business is going." One does not simply increase the tax on capital gains, and on investors, and assume that the same amount of investment and capital gains will still occur.

Obama believes the main thing is to make the capital gains tax "fair," regardless of what history shows about the relationship between rates and revenue. He does not appreciate that tax incentives for investing increases the amount of investing, which in turn expands business, creates more jobs and produces more income - and thus more tax.

The JFK tax cuts proved it; the Reagan tax cuts proved it; the capital gains tax cut that a Republican Congress forced on Bill Clinton proved it; and the Bush tax cuts proved it again. It is not a theoretical argument. The latest cold, dry IRS statistics demonstrate it once again.

If Obama is elected next week, we will all be treated to another history lesson about why societies that sought "fairness" by taking massive amounts of money from one part of society to give to another (not simply to fulfill a governmental duty of providing a safety net, but for the affirmative purpose of "redistributive change"), not only did not create "fairness," but in fact made matters significantly worse for everyone.

7) Which Obama Would America Get?
The Liberal Ideologue Could Be A Well-Meaning Failure; The Pragmatic Reformer Could Be A Great Leader.
By Stuart Taylor Jr.

When John McCain and many other Republicans ask, "Who is the real Barack Obama?" there is an implication that maybe he is somehow sinister or extremist.

I don't believe that. But I do think that there are two very different Obamas. Both are extraordinarily intelligent, serene under pressure, and driven by an admirable social conscience -- albeit as willing to deploy deception as the next politician. But while the first Obama would be a well-meaning failure, the second could become a great president.

An ultra liberal in moderate garb? The first Obama has sometimes seemed eager to engineer what he called "redistribution of wealth" in a 2001 radio interview, along with the more conventional protectionism, job preferences, and other liberal Democratic dogmas featured in his campaign. I worry that he might go beyond judiciously regulating our free enterprise system's all-too-apparent excesses and stifle it under the dead hand of government bureaucracy and lawsuits.

This redistributionist Obama has stayed in the background since he set his sights on the presidency years ago, except when he told Joe the Plumber that his tax plan would help "spread the wealth." This Obama seems largely invisible to many supporters. But he may retain some attachment to the radical-leftist sensibility in which -- as his impressive 1995 autobiography, Dreams From My Father, explains with reflective detachment -- he was marinated as a youth and young man.

Obama spent much of his teenage years searching for his black identity. He was mentored for a time by the poet Frank Marshall Davis, a black-power activist who had once been a member of the Communist Party, and who was (according to Obama's book) "living in the same Sixties time warp" as Obama's mother, a decidedly liberal free spirit.

While the first Obama would be a well-meaning failure, the second could become a great president.

In college, lest he be "mistaken for a sellout," Obama "chose my friends carefully," according to his book: "The more politically active black students. The foreign students. The Chicanos. The Marxist professors and structural feminists and punk-rock performance poets." After college, his social conscience steered him to become a community organizer and "organize black folks" in Chicago, from 1985 to 1988.

It was then that Obama met the Rev. Jeremiah Wright, who as head of Trinity United Church of Christ did many good things but had a now-famous penchant for America-hating, white-bashing, conspiracy-theorizing, Farrakhan-honoring rants. A central theme of the first Wright sermon that Obama attended -- the one titled "the audacity of hope" -- was that "white folks' greed runs a world in need."

After graduating near the top of his Harvard Law School class in 1991, Obama could easily have landed a prestigious Supreme Court clerkship and gone on to a big law firm where partners make well over a $1 million a year. Instead, he followed his social conscience and political ambition back to Chicago, joining a small law firm.

Obama became more than casually acquainted with Bill Ayers, the Weather Underground bomber with whom he served on the boards of two Chicago philanthropic groups. In 1995, Ayers and his wife, Bernardine Dohrn -- the same Dohrn who in a blood-curdling 1969 speech had cited the Charles Manson gang of murderers as role models for the Weather Underground -- co-hosted a political fundraiser for Obama at their home. By then, the still-unrepentant Ayers had become a respected member of an academic establishment in which far-left views are fashionable.

I dwell on these much-debated associations not because I think that Obama sympathizes with what he has called Ayers's "detestable acts 40 years ago, when I was 8" or identifies with Wright's wild ravings. But I do think that Obama has understated (at best) his involvement with Wright and Ayers. And I wonder about the worldview of a man who was so comfortable with such far-left extremists and whose wife, Michelle, asserted earlier this year that America is "just downright mean" and "guided by fear" and that most Americans' lives have "gotten progressively worse since I was a little girl."

Obama's voting record as an Illinois and then U.S. senator is not extremist or radical. But it is not a bit bipartisan, either. He has hardly ever broken with his party, and he famously had the most liberal record of any senator in 2007 (although not in 2006 or 2005), according to National Journal's vote ratings.

This Obama has endorsed a long list of liberal restrictions on free enterprise that could end up hurting the people they are supposed to help, along with the rest of us: statist remedies for our broken educational system; encouraging unionization by substituting peer pressure and an undemocratic card-check process for secret ballots; raising the wages of women or lowering those of men who have dissimilar jobs that are declared by bureaucrats to be of comparable worth; renegotiating NAFTA; and more.

I wonder how far Obama wants to go down the road suggested by his lament in that 2001 radio interview that the civil-rights movement had failed to engineer "redistribution of wealth" and "economic justice." Would he be content with the moderately redistributive, Clintonesque increase in taxes on high-earning Americans that he proposes now? Or would he end up pushing for confiscatory taxes that could stifle entrepreneurship and job creation?

The best thing for the country would be for Obama to take on the interest groups and to govern from the center.

And would Obama's declared desire to appoint judges and justices driven mainly by "empathy" for "the powerless," rather than by fidelity to the law, lead to judicially invented constitutional rights to welfare, to ever-more-rigid preferences based on race and gender, and to other novel judicial overrides of democratic governance?

A pragmatic reformer? The pragmatic, consensus-building, inspirational Obama who has been on display during the general election campaign is a prodigious listener and learner. He can see all sides of every question. He seems suffused with good judgment. His social conscience has been tempered by recognition that well-intentioned liberal prescriptions can have perverse unintended consequences. His tax and health care proposals are much less radical than Republican critics suggest.

This Obama has surrounded himself not only with liberal advisers but also with mainstream moderates such as Warren Buffett and former Fed Chairman Paul Volcker. He has won the support of moderate Republicans, including Colin Powell and Susan Eisenhower, and conservatives, including Kenneth Adelman and Charles Fried.

This is the Obama who said in his dazzling 2004 Democratic convention speech that "there is not a liberal America and a conservative America; there is a United States of America." This is the Obama who distanced himself not only from Jeremiah Wright but also -- more subtly -- from the rest of the racial-grievance crowd in a March 18 speech deploring as "profoundly distorted" the view that "sees white racism as endemic."

The pragmatic Obama is smart enough to know that reforms take root only if they enjoy broad public support and that self-identified conservatives vastly outnumber self-identified liberals in America. He also understands that while we need more-effective regulation, "America's free market has been the engine of America's great progress. It's created a prosperity that is the envy of the world. It's led to a standard of living unmatched in history." He has said that "we don't want to return to marginal tax rates of 60 or 70 percent." He wants to expand the armed forces and to send more troops to Afghanistan.

The pragmatic Obama is not just a made-for-the-campaign creation. He was elected president of the Harvard Law Review in 1990 not only because he was one of the most brilliant students but also because the handful of conservatives whose votes helped tip the balance saw him as fair-minded and open to their point of view. And they were not disappointed.

Obama has dipped his toe in the water of questioning Democratic interest-group orthodoxies. He has supported charter schools (while opposing vouchers) and merit pay for teachers; he offended trial lawyers by voting in 2005 to curb unwarranted class-action lawsuits; and last year he questioned whether affluent black children such as his daughters should continue to get racial preferences over more needy whites and Asians.

To be sure, apart from these less-than-bold gestures, Obama's down-the-line liberal voting record does not give a centrist like me much basis for hope that he would resist pressure from Democratic interest groups, ideologues, and congressional leaders to steer hard to the left.

But I do hope that if Obama wins, the enormity of the economic and international crises facing him will accelerate his intellectual evolution and convince him that simply replacing dumb Bush policies with dumb Democratic policies will only drive the country deeper into the ditch. The best thing for the country would be to take on the interest groups and govern from the center. That would also be the best way for Obama to win re-election and have a truly historic presidency.

8)The End of Journalism: Sometime in 2008, journalism as we knew it died, and advocacy media took its place.
By Victor Davis Hanson

There have always been media biases and prejudices. Everyone knew that Walter Cronkite, from his gilded throne at CBS news, helped to alter the course of the Vietnam War, when, in the post-Tet depression, he prematurely declared the war unwinnible. Dan Rather’s career imploded when he knowingly promulgated a forged document that impugned the service record of George W. Bush. We’ve known for a long time — from various polling, and records of political donations of journalists themselves, as well as surveys of public perceptions — that the vast majority of journalists identify themselves as Democratic, and liberal in particular.

Yet we have never quite seen anything like the current media infatuation with Barack Obama, and its collective desire not to raise key issues of concern to the American people. Here were four areas of national interest that were largely ignored.

For years an axiom of the liberal establishment was the need for public campaign financing — and the corrosive role of private money in poisoning the election process. The most prominent Republican who crossed party lines to ensure the passage of national public campaign financing was John McCain — a maverick stance that cost him dearly among conservatives who resented bitterly federal interference in political expression.

In contrast, Barack Obama, remember, promised that he would accept both public funding and the limitations that went along with it, and would “aggressively pursue an agreement with the Republican nominee to preserve a publicly financed general election.” Then in June 2008, Obama abruptly reneged, bowing out entirely from government financing, the first presidential nominee in the general election to do that since the system was created in 1976.

Obama has now raised over $600 million, by far the largest campaign chest in American political history. In many states he enjoys a four-to-one advantage in campaign funding — most telling in his scheduled eleventh-hour, 30-minute specials that will not be answered by the publicly financed and poorer McCain campaign.

The story that the media chose to ignore was not merely the Obama about-face on public financing, or even the enormous amounts of money that he has raised — some of it under dubious circumstances involving foreign donors, prepaid credit cards, and false names. Instead, they were absolutely quiet about a historic end to liberal support for public financing.

For all practical purposes, public financing of the presidential general election is now dead. No Republican will ever agree to it again. No Democrat can ever again dare to defend a system destroyed by Obama. All future worries about the dangers of big money and big politics will fall on deaf ears.

Surely, there will come a time when the Democratic Party, whether for ethical or practical reasons, will sorely regret dismantling the very safeguards that for over three decades it had insisted were critical for the survival of the republic.

Imagine the reaction of the New York Times or the Washington Post had John McCain renounced his promise to participate in public campaign financing, proceeded instead to amass $600 million and out raise the publicly financed Barack Obama four-to-one, and begun airing special 30-minute unanswered infomercials during the last week of the campaign.

We know now almost all the details of Sarah Palin’s pregnancies, whether the trooper who tasered her nephew went to stun or half stun, the cost of her clothes, and her personal expenses — indeed, almost everything except how a mother of so many children gets elected councilwoman, mayor, and governor, routs an entrenched old-boy cadre, while maintaining near record levels of public support.

Yet the American public knows almost nothing of what it should about the extraordinary career of Joe Biden, the 36-year veteran of the Senate. In unprecedented fashion, Biden has simply avoided the press for most of the last two months, confident that the media instead would deconstruct almost every word of “good looking” Sarah Palin’s numerous interviews with mostly hostile interrogators.

By accepted standards of behavior, Biden has sadly proven wanting. He has committed almost every classical sin of character — plagiarism, false biography, racial insensitivity, and serial fabrication. And because of media silence, we don’t know whether he was kidding when he said America would not need to burn coal, or that Hezbollah was out of Lebanon, or that FDR addressed the nation on television as president in 1929 (surely a record for historical fictions in a single thought), or that the public would turn sour on Obama once he was challenged by our enemies abroad. In response, the media reported that the very public Sarah Palin was avoiding the press while the very private Joe Biden shunned interviews and was chained to the teleprompter.

For two months now, the media reaction to Biden’s inanity has been simply “that’s just ol’ Joe, now let’s turn to Palin,” who, in the space of two months, has been reduced from a popular successful governor to a backwoods creationist, who will ban books and champion white secessionist causes. The respective coverage of the two candidates is ironic in a variety of ways, but in one especially — almost every charge against Palin (that she is under wraps, untruthful, and inept) was applicable only to Biden.

So we are about to elect a vice president about whom we know only that he has been around a long time, but little else — and nothing at all why exactly Joe Biden says the most astounding and often lunatic things.

Imagine the reaction of Newsweek or Time had moose-hunting mom Sarah Palin claimed FDR went on television to address the nation as President in 1929, or warned America that our enemies abroad would test John McCain and that his response would result in a radical loss of his popularity at home.

In 2004, few Americans knew Barack Obama. In 2008, they may elect him. Surely his past was of more interest than his present serial denials of it. Whatever the media’s feelings about the current Barack Obama, there should have been some story that the Obama of 2008 is radically different from the Obama who was largely consistent and predictable for the prior 30 years.

Each Obama metamorphosis in itself might be attributed to the normal evolution to the middle, as a candidate shifts from the primary to the general election. But in the case of Obama, we witnessed not a shift, but a complete transformation to an entirely new persona — in almost every imaginable sense of the word. Name an issue — FISA, NAFTA, guns, abortion, capital punishment, coal, nuclear power, drilling, Iran, Jerusalem, the surge — and Obama’s position today is not that of just a year ago.

Until 2005, Obama was in communication with Bill Ayers by e-mail and phone, despite Ayers reprehensible braggadocio in 2001 that he remained an unrepentant terrorist. Rev. Wright was an invaluable spiritual advisor — until spring of 2008. Father Pfleger was praised as an intimate friend in 2004 — and vanished off the radar in 2008. The media might have asked not just why these rather dubious figures were once so close to, and then so distant from, Obama; but why were there so many people like Rashid Khalidi and Tony Rezko in Obama’s past in the first place?

Behind the Olympian calm of Obama, there was always a rather disturbing record of extra-electoral politics completely ignored by the media. If one were disturbed by the present shenanigans of ACORN or the bizarre national call for Americans simply to skip work on election day to help elect Obama (who would pay for that?), one would only have to remember that in 1996 Obama took the extraordinary step of suing to eliminate all his primary rivals by challenging their petition signatures of mostly African-American voters.

In 2004, there was an even more remarkable chain of events in which the sealed divorce records of both his principle primary rival Blair Hull and general election foe, Jack Ryan, were mysteriously leaked, effectively ensuring Obama a Senate seat without serious opposition. These were not artifacts of a typical political career, but extraordinary events in themselves that might well have shed light on present campaign tactics — and yet largely remain unknown to the American people.

Imagine the reaction of CNN or NBC had John McCain’s pastor and spiritual advisor of 20 years been revealed as a white supremacist who damned a multiracial United States, or had he been a close acquaintance until 2005 of an unrepentant terrorist bomber of abortion clinics, or had McCain himself sued to eliminate congressional opponents by challenging the validity of African-American voters who signed petitions, or had both his primary and general election senatorial rivals imploded once their sealed divorce records were mysteriously leaked.

The eleventh-hour McCain allegations of Obama’s advocacy for a share-the-wealth socialism were generally ignored by the media, or if covered, written off as neo-McCarthyism. But there were two legitimate, but again neglected, issues.

The first was the nature of the Obama tax plan. The problem was not merely upping the income tax rates on those who made $250,000 (or was it $200,000, or was it $150,000, or both, or none?), but its aggregate effect in combination with lifting the FICA ceilings on high incomes on top of existing Medicare contributions and often high state income taxes.

In other words, Americans who live in high-tax, expensive states like a New York or California could in theory face collective confiscatory tax rates of 65 percent or so on much of their income. And, depending on the nature of Obama’s proposed tax exemptions, on the other end of the spectrum we might well see almost half the nation’s wage earners pay no federal income tax at all.

Questions arise, but were again not explored: How wise is it to exempt one out of every two income earners from any worry over how the nation gathers its federal income tax revenue? And when credits are added to the plan, are we now essentially not cutting or raising taxes, but simply diverting wealth from those who pay into the system to those who do not?

A practical effect of socialism is often defined as curbing productive incentives by ensuring the poorer need not endanger their exemptions and credits by seeking greater income; and discouraging the wealthy from seeking greater income, given that nearly two-thirds of additional wealth would be lost to taxes. Surely that discussion might have been of interest to the American people.

Second, the real story was not John McCain’s characterization of such plans, but both inadvertent, and serial descriptions of them, past and present, by Barack Obama himself. “Spreading the wealth around” gains currency when collated to past interviews in which Obama talked at length about, and in regret at, judicial impracticalities in accomplishing his own desire to redistribute income. “Tragedy” is frequent in the Obama vocabulary, but largely confined to two contexts: the tragic history of the United States (e.g., deemed analogous to that of Nazi Germany during World War II), and the tragic unwillingness or inability to use judicial means to correct economic inequality in non-democratic fashion.

In this regard, remember Obama’s revealing comment that he was interested only in “fairness” in increasing capital-gains taxes, despite the bothersome fact that past moderate reductions in rates had, in fact, brought in greater revenue to government. Again, fossilized ideology trumps empiricism.

Imagine the reaction of NPR and PBS had John McCain advocated something like abolishing all capital gains taxes, or repealing incomes taxes in favor of a national retail sales tax.

The media has succeeded in shielding Barack Obama from journalistic scrutiny. It thereby irrevocably destroyed its own reputation and forfeited the trust that generations of others had so carefully acquired. And it will never again be trusted to offer candid and nonpartisan coverage of presidential candidates.

Worse still, the suicide of both print and electronic journalism has ensured that, should Barack Obama be elected president, the public will only then learn what they should have known far earlier about their commander-in-chief — but in circumstances and from sources they may well regret.