Save us from the snobbish intellectuals!

GW is turning over the reins of government with grace. Olmert is doing everything he can to leave his imprint and make life difficult for his successor. (See 1 and 1a)

Olmert's comments justifying his thoughts regarding Jerusalem land concessions and Netanyahu's response. (See 2 below.)

Tom Sowell and the PHD's. Save us from the snobbish intellectuals. (See 3 below.)

The heavy hand of government is crushing what it would be wise to preserve. (See 4 below.)

Dick

1) Bush handing over power to Obama with grace
By BEN FELLER

WASHINGTON – No matter how people remember President Bush's time in office, let there be no doubt about how he wants to end it: gracefully.

Never mind that Democrat Barack Obama spent all that time deriding Bush for "failed policies," or mocking him for hiding in an "undisclosed location" because he was too unpopular to show up with his party's own candidate, John McCain. This is transition time. Outgoing presidents support the new guy.

And on that front, Bush is going well beyond the minimum. He has embraced the role of statesman with such gusto that it has been hard to miss.

The result is that Bush's last image at the White House will be one of a magnanimous leader. Whether it will improve his legacy is another matter.

"This has been a very good moment late in his presidency, and, I think it's fair to say, much appreciated by the nation," said Cal Jillson, a political science professor at Southern Methodist University, the home of Bush's planned presidential library.

On Monday at the White House, Bush warmly welcomed Obama, whose dominant win last week was largely seen as a referendum on the Bush years.

The two leaders spent more than an hour discussing domestic and foreign policy in the Oval Office. And then Bush gave Obama a personal tour all around.

The world saw video images that were replayed all day and night: Bush and first lady Laura Bush greeting Obama and his wife, Michelle, as if they were old friends; Bush strolling with the president-elect along the famous Colonnade adjacent to the Rose Garden, both men waving and smiling.

Translation: Smooth transition.

The scene was the latest in a flurry of moves by Bush, all designed to show he is serious about making Obama's start a success on Jan. 20.

Mere hours after Obama handily ended eight years of Republican rule, Bush commended Americans for making history. "They chose a president whose journey represents a triumph of the American story — a testament to hard work, optimism and faith in the enduring promise of our nation," Bush said.

If that effusiveness wasn't enough, he called Obama's win an inspiring moment and said it will be a "stirring sight" when the whole Obama family arrives.

Then Bush called together about 1,000 employees on the South Lawn and told them to embrace the transition earnestly. This could have been handled in a press release, or even an internal memo to staff. Instead, it was a big, showy expression of support for Obama, with Bush's Cabinet standing behind him.

"The peaceful transfer of power is one of the hallmarks of a true democracy," Bush said. "And ensuring that this transition is as smooth as possible is a priority for the rest of my presidency."

In case anyone missed the point, Bush underscored it in his Saturday radio address. He pledged an "unprecedented effort" to help Obama take power.

Obama's team is noticing. "So far, cooperation has been excellent," said transition chief John Podesta, a veteran of Bill Clinton's White House.

It was Bush's father, the 41st president, who bitterly lost to Clinton in 1992. But George H.W. Bush ordered his top aides to cooperate with Clinton's transition team. He was quoted at the time as saying, "Let us all finish the job with the same class with which we served."

Echoes of that comment can be found in nearly ever statement his son has made since Obama won election one week ago.

"I think grace is a very good word for the way Bush is responding. And I'd say there's a little bit of the fact that there's a Bush 41 and a Bush 43," said Stephen Hess, a senior fellow emeritus at The Brookings Institution and the author of a new book about presidential transitions.

"There is now a presidency stamped in their DNA," Hess said. "There is a very exclusive club of people who have been president, and they know they may be called on if there's a crisis. They even somehow bond with other former presidents with whom they were not particularly friendly."

The former President Bush and Clinton, in fact, have become friends and successful humanitarian partners. The two have raised millions of dollars for victims of hurricanes in the United States and an Asian tsunami.

Back in the day when Clinton was president-elect, he deferred to Bush 41 and said, "America has only one president at a time." The line sounds familiar: Obama has been saying the same thing about the current President Bush.

Presidents take transitions seriously because they know the world is watching. The goal is to show that the same petty politics that can define an election will not undermine the transfer of power in a democracy.

In other words, statesmanship is expected.

What's more, Bush has indicated he takes this transition particularly seriously because the nation is in such precarious times. Obama does not inherit a decision about how to spend a budget surplus. Instead, his government will face red ink, an economy in shambles and wars ongoing in Iraq and Afghanistan.

"In calmer times, presidents incoming and outgoing have allowed their emotions to run more freely, to show some displeasure and tension," Jillson said. "Bush is aware enough to know that the times don't permit that."

All this doesn't just help Obama. Bush's cooperative approach could serve him well, too. It puts him on the right side of public sentiment.

Ending a tumultuous second term on a positive note certainly can't hurt his standing as he returns to private life.

But it won't be enough to alter Bush's legacy, said Hess, who worked in the Eisenhower and Nixon administrations and advised presidents Ford and Carter.

"The encyclopedia is still going to read: `George W. Bush, 43rd president of the United States, who created a war in Iraq' or `who let the country be flooded by Katrina,'" Hess said. "It's not going to be, `George W. Bush, who left the office gracefully.'"

1a) 'I'm not bound by Olmert's words'
By TOVAH LAZAROFF


Foreign Minister Tzipi Livni dismissed as irrelevant on Tuesday a policy statement issued by Prime Minister Ehud Olmert in which he called for a return to the 1967 borders, with a few changes.

Olmert at Rabin memorial: We must cede parts of Jerusalem

"As the head of the Kadima party, I am obligated not to the outgoing words of Olmert, but to Kadima's platform, which I wrote and which I believe in," said Livni in a morning interview with Army Radio.

It is that platform alone, she said, "which determines the principles by which I negotiate."

On Monday Olmert said, "We must relinquish Arab neighborhoods in Jerusalem, and return to that territory which comprised the State of Israel until 1967, with the necessary amendments stemming from the realities created on ground."
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* Olmert: We must cede parts of Jerusalem
* Likud: Olmert used Rabin ceremony for politicking

He spoke a ceremony at Jerusalem's Mount Herzl Cemetery to mark the 13th anniversary of the assassination of former Prime Minister Yitzhak Rabin.

It was one of the more succinct public summations of Olmert's policy stance made to date.

His words came as Livni was engaged in bi-lateral talks with the Palestinians whose aim is
to resolve all key issues between the two parties, including Jerusalem, refugees and borders. Among the key Palestinian demands is a return to the 1967 borders, including east Jerusalem.

Still, on Tuesday, Livni said that Olmert's policy statement did not reflect her views or even that of the Kadima party.

Army radio quizzed her as to whether she would tell the Palestinians and or the Americans that Olmert's statement was irrelevant. In response, she said: "There are things that you do not have to say. I am leading the negotiations."

In Israel and amongst the international community it is clear that the future of the bi-lateral talks is dependent not on Olmert, but rather on the results of the February election.

There, the voters would decide whether she or Likud Party leader Binyamin Netanyahu would replace Olmert as prime minister.

"The rest of what will be said in the next few months will be less relevant," said Livni.

Of course, she said, final status agreement would necessitate territorial concessions. But it would be done in a way that preserves Israel's security, takes account of places of historical significance such as Jerusalem and allows the maximum number of settlers to remain in their homes, Livni said.

On the topic of refugees, she said, they would not be allowed to re-settle in Israel. To achieve a final status agreement, "there are things that we have to accept. There are things that if we do not accept, there won't be an agreement. That is part of the negotiations," Livni added.

Just on Sunday, she said, her role as the public face for these talks was affirmed by the international community, at the Quartet meeting at Sharm e-Sheikh.

In that gathering the Quartet confirmed the bi-lateral nature of the negotiations with
the Palestinians in which neither side would be pressured to give up their interests. It also agreed that no other initiative would be introduced.

The Quartet's statement of support for those talks based on her principles shows "you can negotiate together with the Palestinians and with the world's approval without getting to the points that Olmert said yesterday."

"Until everything is done nothing is done," Livni concluded.

3) Olmert: Oslo direction was right
By Amnon Meranda

Speaking at special Knesset memorial session for Yitzhak Rabin, Likud Chairman Netanyahu says leadership must take stand against incitement. PM Olmert uses platform to reiterate call for major land concessions in peace talks



The Knesset on Monday held a special session to mark 13 years since the assassination of Prime Minister Yitzhak Rabin, which followed the state memorial ceremony.



Prime minister's surprising call for land concessions in Jerusalem in peace negotiations at state memorial service for Yitzhak Rabin draws sharp criticism from Right, praise from Left. 'Rabin is turning in his grave,' says MK Orlev

"Rabin was not motivated by foreign considerations," Opposition Chairman Benjamin Netanyahu said in his speech before the plenum, in an apparent jibe at Prime Minister Ehud Olmert.


The Likud chairman slammed the recent partial broadcast of interviews with Rabin's killer, Yigal Amir. He spoke of the current generation of Israeli youth that has reached the age of Bar-Mitzvah, saying that the children born 13 years ago, "the children that grew up without Yitzhak Rabin. There is no reason for them to have to listen to the delusional rantings of the killer."


Netanyahu, who took part in a right-wing demonstration rife with incitement against Rabin a month before the latter was shot dead at the end of a peace rally in Tel Aviv, sounded markedly different in the Knesset on Monday.


"We cannot tolerate the voices that today call for attacks against the prime minister of Israel or IDF soldiers," said Netanyahu, "The lesson we all have learned is that a responsible leadership must take action against incitement. We will not allow reckless and violent instigation against law enforcement."


Olmert: Direction set by Oslo was right

Prime Minister Ehud Olmert, who delivered a divisive speech at the state ceremony in which he called for major concessions in the current peace talks, spoke before Netanyahu.



"I am not trying to retroactively justify the Oslo Accords, which I was against. But they defined a direction – and that direction is inevitable. After we learned to live with the guilt and pain we paid for Oslo, the ongoing terror and the disappointment with the stagnated diplomatic process, we are once again at the heart of the dispute. Now however, the time to make decisions grows closer, and we are at a precipice," said Olmert.



"Any government will have to tell the truth, and that truth, unfortunately, will require us to tear away many parts of the homeland, in Judea, Samaria, Jerusalem and the Golan Heights.


"Anyone who thinks we can evade making a decision and continue to build ties with Arab and Muslim countries, as we are doing today – is living in a dream," he said.


Speaking of the domestic conflict in Israel, 13 years after Rabin's murder, Olmert warned that "the incitement hasn't lessened. The instigation hasn't decreased, and the hatred hasn't faded. Israeli citizens cruelly beat Palestinians who seek to harvest their olives, as they have done for hundreds of years in the places they and their families have lived. Young Israelis, overwhelmed by messianic dreams that have no foundation in the reality of our lives – beat our soldiers, break their bones and threaten their lives – and there is no end."

3) "Intellectuals"
By Thomas Sowell

Among the many wonders to be expected from an Obama administration, if Nicholas D. Kristof of the New York Times is to be believed, is ending "the anti-intellectualism that has long been a strain in American life."

He cited Adlai Stevenson, the suave and debonair governor of Illinois, who twice ran for president against Eisenhower in the 1950s, as an example of an intellectual in politics.

Intellectuals, according to Mr. Kristof, are people who are "interested in ideas and comfortable with complexity," people who "read the classics."

It is hard to know whether to laugh or cry.

Adlai Stevenson was certainly regarded as an intellectual by intellectuals in the 1950s. But, half a century later, facts paint a very different picture.

Historian Michael Beschloss, among others, has noted that Stevenson "could go quite happily for months or years without picking up a book." But Stevenson had the airs of an intellectual -- the form, rather than the substance.

What is more telling, form was enough to impress the intellectuals, not only then but even now, years after the facts have been revealed, though apparently not to Mr. Kristof.

That is one of many reasons why intellectuals are not taken as seriously by others as they take themselves.

As for reading the classics, President Harry Truman, whom no one thought of as an intellectual, was a voracious reader of heavyweight stuff like Thucydides and read Cicero in the original Latin. When Chief Justice Carl Vinson quoted in Latin, Truman was able to correct him.

Yet intellectuals tended to think of the unpretentious and plain-spoken Truman as little more than a country bumpkin.

Similarly, no one ever thought of President Calvin Coolidge as an intellectual. Yet Coolidge also read the classics in the White House. He read both Latin and Greek, and read Dante in the original Italian, since he spoke several languages. It was said that the taciturn Coolidge could be silent in five different languages.

The intellectual levels of politicians are just one of the many things that intellectuals have grossly misjudged for years on end.

During the 1930s, some of the leading intellectuals in America condemned our economic system and pointed to the centrally planned Soviet economy as a model-- all this at a time when literally millions of people were starving to death in the Soviet Union, from a famine in a country with some of the richest farmland in Europe and historically a large exporter of food.

New York Times Moscow correspondent Walter Duranty won a Pulitzer Prize for telling the intelligentsia what they wanted to hear-- that claims of starvation in the Ukraine were false.

After British journalist Malcolm Muggeridge reported from the Ukraine on the massive deaths from starvation there, he was ostracized after returning to England and unable to find a job.

More than half a century later, when the archives of the Soviet Union were finally opened up under Mikhail Gorbachev, it turned out that about six million people had died in that famine-- about the same number as the people killed in Hitler's Holocaust.

In the 1930s, it was the intellectuals who pooh-poohed the dangers from the rise of Hitler and urged Western disarmament.

It would be no feat to fill a big book with all the things on which intellectuals were grossly mistaken, just in the 20th century-- far more so than ordinary people.

History fully vindicates the late William F. Buckley's view that he would rather be ruled by people represented by the first 100 names in the Boston phone book than by the faculty of Harvard.

How have intellectuals managed to be so wrong, so often? By thinking that because they are knowledgeable-- or even expert-- within some narrow band out of the vast spectrum of human concerns, that makes them wise guides to the masses and to the rulers of the nation.

But the ignorance of Ph.D.s is still ignorance and high-IQ group think is still group think, which is the antithesis of real thinking.

4) The Bailout of the Bailout of . . .

So AIG lives. Kudos to Treasury Secretary Hank Paulson and New York Federal Reserve President Timothy Geithner for recognizing that they needed a Plan B for the giant insurer. Their "rescue" medicine was killing the patient. Now they need to allow private capital to replace government control.

The September 16 federal bailout of the world's largest insurer and the subsequent iterations of the deal had managed to create a situation with almost no winners -- except for AIG's board of directors and the firm's creditors. Equity investors, employees and taxpayers all stood to lose as the government took almost 80% of the business without a shareholder vote. The Fed loaned AIG money on terms so draconian -- and counterproductive, forcing the firm to pay interest on an $85 billion loan whether it used the money or not -- that taxpayers were at risk of a potential post-bailout failure of the firm.

We'll never know if a pre-bailout failure might have been better. With less taxpayer exposure, the firm could have filed for Chapter 11 and, with various healthy businesses, might have ended up actually retaining some value for shareholders.

Yet now that the government has put taxpayers at risk for a staggering $150 billion, the objective should be to see an AIG healthy enough to pay back its government loans without allowing government ownership to further distort the insurance market. This is where the latest version of the bailout needs work. The Fed has lowered the rates it charges AIG to borrow and it will purchase some dodgy mortgage assets. But the government is still clinging to the 79.9% of AIG equity it acquired without the consent of the previous owners.

There are two typical outcomes when the government owns a controlling stake in a private business. Either Uncle Sam runs it like a government agency, layers it with lawyers and other process facilitators, and slowly erodes whatever value exists. Or the government runs it like a business and uses its unfair advantage in cost of capital and its ability to regulate to defeat the private competition. (See Fannie Mae, history of.)

The next step in rescuing taxpayers from the AIG rescue should be to allow private investors to replace the federal government as majority owner. AIG and its insurance subsidiaries can still thrive in the right hands. And there is nothing wrong with the property and casualty insurance market that requires government intervention. AIG's big bet on the government-distorted housing market created this mess. Now private capital is ready to help clean it up, if Treasury and the Fed will shift the government's interest to non-voting preferred shares.

Taxpayers would still get paid ahead of public shareholders, and still benefit from any upside, while being protected from government-style management. Former Clinton trade representative Mickey Kantor is lobbying for 21 large AIG shareholders, who together hold more than 37% of the publicly-held stock. Will Washington consider allowing private capital to take back AIG? "I do not think the door is closed," says Mr. Kantor.

Various sources tell us that current shareholders as well as several sovereign wealth funds would consider large investments if the government relinquishes control. The Fed and Treasury should follow yesterday's positive step with not just an open door, but a clear message that private investment will be encouraged. Taxpayers, shareholders and insurance consumers would all benefit.