Saturday, February 28, 2009

A Conflict - Appeasing The Far Left and Facing Reality!

Big smile, bigger ego, ipso facto gargantuan budget leads to enormous deficits. It all fits.

Now all we have to do is either get China and our own shrinking 'filthy' rich to pay for it or print money. Whatever approach, we are in for a ride the likes of which we have never experienced.

One way to make the deficit problem smaller is to assume growth that probably will not occur and thus income tax payments that will not arrive. Thus, expect higher tax announcements to be coming down the pike. They will take the 'subtle' form of a variety of increased taxes on energy etc.

Placing off balance sheet obligations back on the nation's ledger is a positive move, makes the enormity of our future obligations realitsic but it also raises even more questions as to how they will be paid. Again - expect higher taxes but they will not be called by that name!

Since more than 40% of Americans pay no income taxes they remain in favor of having everyone else carry their water buckets and should continue to be pro Obama voters. Whether Obama can hold onto the loyalty of those who do pay income and other taxes and who will see their various tax bills increase that will be the interesting question come mid-year elections.

It is problematical voters will continue to be loyal to someone who raises their taxes and burdens their children with even more obligations but Obama has promised to go line by line and eliminate waste. Obama denied the Stimulus Act had earmarks so perhaps he does not understand what they are.

Finally, Obama has just begun to deal with his own Party and Ms. Pelosi. He has so much to learn and so do we because we elected someone about whom we know virtually nothing.(See 1 1a and 1b below.)

Even a writer for the New York Times, Peter Goodman, understands the impact reality and the economy's decline is likely to have on Obama and his budget. (See 2 below.)

One of the greatest risks threatening our Republic and personal individuality, beyond the current administration's daffy socialistic beliefs, is the growing acceptance of the "War on Sovereignty." (See 3 below.)

Human Rights has become a clever way to attack Israel and to disguise anti-Semitism. (See 4 below.)

Why Hamas and Fatah love to fight each other and what are the implifications for achieving peace between Palestinians and Israelis. Is the mere thought of peace is an oxymoron?. (See 5 below.)

In the spirit of 'change' Netanyahu says Israel is willing to help and encourages the Palestinians to improve their economic lot in the hope that it might lead to peace but not at the expense of Israeli security. Will that view also be interpreted as disproportionate action on the part of Israel? (See 6 below.)

Meanwhile Hamas repeats that it will never recognize Israel. (See 7 below.)

Obama tells the Marines we won and are pulling out but leaving about 50,000 to insure peace. In other words, we are out but still in and moving over to Afghanistan where the 'real' war has aways been. The president is conflicted by pacifying the far left in his party and coping with reality. (See 8 below.)

Mark Steyn sees 'green' when he opens his eyes and looks at Obama. If spending trillions is the answer why stop at any specific amount? (See 9 below.)


1) Obama's budget: huge ambitions, huge obstacles

Breathtaking in its scope and ambition, President Barack Obama's agenda for the economy, health care and energy now goes to a Congress unaccustomed to resolving knotty issues and buffeted by powerful interests that oppose parts of his plan.

Perhaps the only things as high as Obama's goals are the hurdles they must clear.

While tackling the economic crisis, he is asking Congress to enact contentious measures that have been debated, but not decided, in calmer times: combat global warming with a pollution tax on industries; cut subsidies for big farms; raise taxes on the wealthy; make big changes to health care, including lower reimbursements for Medicare and Medicaid treatments and prescription drugs.

Standing alone, any one of these proposals would trigger a brawl in Congress and fierce debates outside Washington. Obama wants the proposals done largely in concert, as an interrelated plan to undo major elements of Ronald Reagan's conservative movement.

Obama outlined the approach in a budget proposal Thursday, a sprawling road map that will require several hard-fought pieces of legislation.

"We're struck with how bold and courageous a budget it is," said James Horney of the liberal Center on Budget and Policy Priorities, which supports the president. "There are a whole lot of things that are going to be extremely difficult because there are very powerful vested interests out there that will fight them."

The president acknowledged that in his weekly radio address Saturday. "I realize that passing this budget won't be easy," he said. It "represents a threat to the status quo in Washington."

Obama is not simply proposing a budget with a jaw-dropping deficit of $1.75 trillion, a quadruple increase in one year. He's trying to redirect strong currents in American society.

The wealthiest 5 percent would pay a whopping $1 trillion in higher taxes over the next decade, while most others would get tax cuts. Industries would buy and trade permits to emit heat-trapping gases. Higher-income older people would pay more for Medicare benefits. Drug companies would receive smaller profits from the government. Banks would play a much smaller role in student loans.

Obama's climb is steep. Even with solid Democratic majorities in the House and Senate, he secured a $787 billion stimulus package only after accepting compromises that irked liberals but won the support of three Republican senators.

Not a single House Republican backed it. Judging from House GOP leaders' immediate condemnation of his budget blueprint, Obama can expect more of the same.

More troubling for him, however, are the divisions quickly emerging among Democratic, liberal and centrist constituencies that either backed the stimulus or stayed on the sidelines.

Democratic Rep. Collin Peterson of Minnesota, the House Agriculture Committee chairman, criticized Obama's plan to cut direct payments to farms with sales exceeding $500,000 a year. "Now is not the time" to reopen a recently passed farm bill, he said.

Sen. Arlen Specter of Pennsylvania, one of the stimulus bill's three Republican backers, said it is hard to see how Obama can meet his new deficit-reduction targets. He called Obama's chief energy proposal "entirely speculative" and urged the president "to forgo the tax increases" in the plan.

The U.S. Chamber of Commerce, which also backed the stimulus bill, said Obama's budget blueprint "appears to move in exactly the wrong direction. More taxes, heavy-handed regulations, and command-and-control government will not hasten recovery... You don't build a house by blowing up its foundation."

That sounded like a jab at Obama, who said Thursday: "There are times when you can afford to redecorate your house, and there are times when you have to focus on rebuilding its foundation."

Some Washington veterans say that if anyone can overcome the hurdles, it is Obama.

"He has such enormous popularity right now," said Scott Lilly, who spent 31 years as a congressional aide before joining the liberal-leaning Center for American Progress.

Obama's political gifts are extraordinary, Lilly said. No one expects the president to get everything he's asking for, he said, "but I think he could get a big share of it."

Pushing his tax and health proposals through the Senate Finance Committee "is going to be one hell of a fight," Lilly said. The committee chairman, Sen. Max Baucus of Montana, sometimes parts ways with Democratic leaders on important issues such as tax cuts and Medicare.

Stiff resistance awaits Obama at almost every turn.

"Class warfare" is how Republicans label his plan to raise taxes, starting in 2011, on households making more than $250,000 a year.

Some liberal-leaning foundations are unhappy about his proposed reduction in the tax deductibility of gifts to charity from wealthy people.

On health care, Obama wants to cut payments for Medicare and Medicaid, the government programs for the elderly, disabled and poor. Taking hits would be insurance companies, home health services, hospitals and drug manufacturers, all of which are powerful lobbies in Washington.

On energy, Obama wants to reduce greenhouse gases and raise money for clean-fuel technologies, such as solar and wind power, by auctioning off carbon pollution permits. The proposal, known as cap and trade, will lead to a bruising fight in Congress, which may be divided more by region than party.

William Kovacs, who oversees regulatory affairs for the U.S. Chamber of Commerce, says Obama is pushing too fast for such a dramatic policy change.

"Any support that there was for cap and trade from the business community," he said, was based on the assumption of "a long-term transition."

House Majority Leader Steny Hoyer, D-Md., a key player in pushing Obama's legislation, said Friday that "there isn't any doubt that this budget's going to be tough to pass."

Some government veterans, however, think doubters are underestimating Americans' hunger for change. For example, every individual and institution is hurt by the ever-rising cost of health care, and many are ready to shake up the system to make it less expensive, said Bruce Reed, who oversaw domestic policy in Bill Clinton's White House.

"The country wants it, the economy needs it, businesses large and small know that they can't afford not to have it," said Reed, who now heads the Democratic Leadership Council, a center-left group. "I don't think a do-nothing caucus will get anywhere on health care."

Reed added, however: "Health care has always been the Middle East of domestic policy."

On energy, he said, "Congress ought to be able to pass a cap and trade bill. The rest of the industrialized world is doing emissions trading. A broad swath of American industry wants this question to be answered."

The president's agenda is vast and ambitious, Reed said, but the times call for it. After all, he said, "Obama didn't have the luxury of saying, 'I'll handle the economic crisis and then get back to you on the rest of America's future.'"

1a) Budget Burden Falls to Congress

President Barack Obama has made it clear he intends to reorder the nation's priorities, but Congress must act to make that a reality.

It won't be easy.

The budget blueprint estimates a federal deficit of $1.75 trillion for 2009.

Mr. Obama is asking the 111th Congress for accomplishments that rival those of the 1933 Congress that passed the New Deal and the 1965 Congress that enacted the Great Society. But despite the pain of the current crisis, it doesn't yet compare with the devastation of the Great Depression or the upheaval of the 1960s. And Congress's pace in recent years has been anything but speedy.

In his prime-time speech and budget plan this week, Mr. Obama urged Congress to take on sweeping proposals he promoted during the campaign to address climate change and overhaul health care. In addition, the downturn is forcing lawmakers to simultaneously debate fixes for the mortgage crisis and the auto industry, along with ways to rewrite rules for the financial sector.

Democrats on Capitol Hill are also pushing items on their longtime agenda, such as giving the District of Columbia a vote in Congress, expanding funding for stem-cell research and requiring broader use of renewable energy. They hope to pass a 2010 budget by early April and will need to enact a dozen individual spending bills for next year.

Mr. Obama and the Democrats may have relatively little time to get all this done. The president has considerable political momentum now, but that might not last. By the middle of next year, the approaching November elections will make it much harder to strike legislative deals.

After outlining the agenda this week, House Speaker Nancy Pelosi told reporters, "Our work is well cut out for us."

While the Republicans are in the minority, they still can create significant problems for the Democrats -- especially in the Senate, where the majority often needs 60 votes to overcome parliamentary obstacles.

That task is harder because Al Franken of Minnesota, who could give the Democrats their 59th vote in the Senate, is embroiled in an election dispute with former Republican Sen. Norm Coleman. And Sen. Edward Kennedy (D., Mass.) suffers from brain cancer, making his schedule uncertain.

"This is going to require compromise and negotiation with Senate Republicans," said Jim Manley, spokesman for Senate Majority Leader Harry Reid (D., Nev.). "The sooner everyone realizes that, the better off we'll be."

At a meeting Friday of the Conservative Political Action Committee, Senate Minority Leader Mitch McConnell (R., Ky.) and House Minority Leader John Boehner (R., Ohio) left little doubt about their readiness to fight the Democrats.

"The stimulus, the omnibus, the budget -- it's all one big down payment on a new American socialist experiment," Mr. Boehner told cheering conservatives.

But managing the tensions within Democratic ranks also will be a challenge. On Thursday, moderate "Blue Dog" Democrats forced House leaders to delay a vote on a bill that would empower judges to rewrite the mortgages of people declaring bankruptcy. Critics say this would add dangerous uncertainty to the home-loan market, raising interest rates and making it even harder to get mortgages.

House and Senate Democrats have concluded that climate-change legislation and a health-care overhaul will probably be the toughest items to push through.

Rep. Henry Waxman (D., Calif.), chairman of the House Energy and Commerce Committee, has vowed to have a climate-change bill, including a cap-and-trade system for controlling harmful emissions, ready for floor action by Memorial Day. That would set the stage for votes in the full House this summer.

That means the battle over health care will probably be put off until later in the year, if only because many of the lawmakers involved in climate-change issues also specialize in health care.

Whatever happens, the road ahead carries risks for Democrats. Failure to deliver on the Obama agenda threatens to alienate voters. But delivering on those goals comes with risks, too, potentially forcing the majority party to explain why it raised taxes or eliminated cherished programs. And Republicans will have to balance their desire to block many of Democratic initiatives with the need to be something more than naysayers.

Despite the obstacles, the new Congress has already enacted several major laws this year, including a $787 billion economic-stimulus package and legislation on children's health care and pay equity.

Those challenges pale next to what lies ahead. "We just did the easiest of the tough stuff," Mr. Manley said. "It only gets harder from here on out."

1b) Democrats Party Could Face an Internal Civil War

This is the Democratic Party's moment, its power now greater than any time since the mid-1960s. But do not expect smooth sailing. The party is a fractious group divided by competing interests, factions and constituencies that could explode into a civil war, especially when it comes to energy and the environment.

Broadly speaking, there is a long-standing conflict inside the Democratic Party between gentry liberals and populists. This division is not the same as in the 1960s, when the major conflicts revolved around culture and race as well as on foreign policy. Today the emerging fault-lines follow mostly regional, geographical and, most importantly, class differences.

Gentry liberals cluster largely in cities, wealthy suburbs and college towns. They include disproportionately those with graduate educations and people living on the coasts. Populists tend to be located more in middle- and working-class suburbs, the Great Plains and industrial Midwest. They include a wider spectrum of Americans, including many whose political views are somewhat changeable and less subject to ideological rigor.

In the post-World War II era, the gentry's model candidate was a man such as Adlai Stevenson, the Democratic presidential nominee who lost twice to Dwight D. Eisenhower. Stevenson was a svelte intellectual who, like Barack Obama, was backed by the brute power of the Chicago machine. After Stevenson, the gentry supported candidates such as John Kennedy -- who did appeal to Catholic working class voters -- but also men with limited appeal outside the gentry class, including Eugene McCarthy, George McGovern, Gary Hart, Bill Bradley, Paul Tsongas and John Kerry.

Hubert Humphrey, a populist heir to the lunch-pail liberalism of Harry Truman (and who was despised by gentry intellectuals) missed the presidency by a hair in 1968. But populists in the party later backed lackluster candidates such as Walter Mondale and Dick Gephardt.

Bill Clinton revived the lunch-pail Democratic tradition; and the final stages of last year's presidential primaries represented yet another classic gentry versus populist conflict. Hillary Clinton could not match Barack Obama's appeal to the gentry. Driven to desperation, she ended up running a spirited populist campaign.

Although peace now reigns between the Clintons and the new president, the broader gentry-populist split seems certain to fester at both the congressional and local levels -- and President Obama will be hard-pressed to negotiate this divide. Gentry liberals are very "progressive" when it comes to issues such as affirmative action, gay rights, the environment and energy policy, but are not generally well disposed to protectionism or auto-industry bailouts, which appeal to populists. Populists, meanwhile, hated the initial bailout of Wall Street -- despite its endorsement by Mr. Obama and the congressional leadership.

Geography is clearly a determining factor here. Standout antifinancial bailout senators included Sens. Byron Dorgan of North Dakota, Tim Johnson of South Dakota, and Jon Tester of Montana. On the House side, the antibailout faction came largely from places like the Great Plains and Appalachia, as well as from the suburbs and exurbs, including places like Arizona and interior California.

Gentry liberals, despite occasional tut-tutting, fell lockstep for the bailout. Not one Northeastern or California Democratic senator opposed it. In the House, "progressives" such as Nancy Pelosi and Barney Frank who supported the financial bailout represent districts with a large concentration of affluent liberals, venture capitalists and other financial interests for whom the bailout was very much a matter of preserving accumulated (and often inherited) wealth.

Energy and the environment are potentially even more explosive issues. Gentry politicians tend to favor developing only alternative fuels and oppose expanding coal, oil or nuclear energy. Populists represent areas, such as the Great Lakes region, where manufacturing still plays a critical role and remains heavily dependent on coal-based electricity. They also tend to have ties to economies, such as in the Great Plains, Appalachia and the Intermountain West, where smacking down all new fossil-fuel production threatens lots of jobs -- and where a single-minded focus on alternative fuels may drive up total energy costs on the farm, make life miserable again for truckers, and put American industrial firms at even greater disadvantage against foreign competitors.

In the coming years, Mr. Obama's "green agenda" may be a key fault line. Unlike his notably mainstream appointments in foreign policy and economics, he's tilted fairly far afield on the environment with individuals such as John Holdren, a longtime acolyte of the discredited neo-Malthusian Paul Ehrlich, and Carol Browner, who was Bill Clinton's hard-line EPA administrator.

These appointments could presage an environmental jihad throughout the regulatory apparat. Early examples could mean such things as strict restrictions on greenhouse gases, including bans on new drilling and higher prices through carbon taxes or a cap-and-trade regime.

Another critical front, not well understood by the public, could develop on land use -- with the adoption of policies that favor dense cities over suburbs and small towns. This trend can be observed most obviously in California, but also in states such as Oregon where suburban growth has long been frowned upon. Emboldened greens in government could use their new power to drive infrastructure spending away from badly needed projects such as new roads, bridges and port facilities, and toward projects such as light rail lines. These lines are sometimes useful, but largely impractical outside a few heavily traveled urban corridors. Essentially it means a transfer of subsidies from those who must drive cars to the relative handful for whom mass transit remains a viable alternative.

Priorities such as these may win plaudits in urban enclaves in New York, Boston and San Francisco -- bastions of the gentry class and of under-35, childless professionals -- but they might not be so widely appreciated in the car- and truck-driving Great Plains and the vast suburban archipelago, where half the nation's population lives.

If he wishes to enhance his power and keep the Democrats together, Mr. Obama will have to figure out how to placate both his gentry base and those Democrats who still see their party's mission in terms that Harry Truman would have understood.

2) Sharper Downturn Clouds Obama Spending Plans

A sense of disconnect between the projections by the White House and the grim realities of everyday American life was enhanced on Friday, as the Commerce Department gave a harsher assessment for the last three months of 2008. In place of an initial estimate that the economy contracted at an annualized rate of 3.8 percent — already abysmal — the government said that the pace of decline was actually 6.2 percent, making it the worst quarter since 1982.

The fortunes of the American economy have grown so alarming and the pace of the decline so swift that economists are now straining to describe where events are headed, dusting off a word that has not been invoked since the 1940s: depression.

Economists are not making comparisons with the Great Depression of the 1930s, when the unemployment rate reached 25 percent. Current conditions are not even as poor as during the twin recessions of the 1980s, when unemployment exceeded 10 percent, though many experts assert this downturn is on track to be significantly worse.

Rather, economists are using the word depression — a subjective term with no academic definition — to describe a condition of broad and extreme economic distress that remains stubbornly in place for much longer than a typical downturn.

This is more than a matter of semantics. As the government determines its spending plans, readying another infusion of cash for troubled banks while contemplating an additional bailout for the auto industry, the magnitude of those needs will hinge on the extent of the damage.

Mark Zandi, chief economist of Moody’s, now places the odds of “a mild depression” at 25 percent, up from 15 percent three months ago. In that view, the unemployment rate would reach 10.5 percent by the end of 2011 — up from 7.6 percent at the end of January — average home prices would fall 20 percent on top of the 27 percent they have plunged already, and losses in the financial system would more than triple, to $3.7 trillion.

Allen Sinai, chief global economist at the research firm Decision Economics, sees a 20 percent chance of “a depressionlike possibility,” up from 15 percent a week ago.

“In the housing market, the financial system and the stock market, we’re already there,” Mr. Sinai said. “It is a depression.”

Yet, in drawing up the budget, the White House assumed the economy would expand by a robust 3.2 percent in 2010, with growth accelerating to 4 percent over the next three years.

“It’s a hope, a wing and a prayer,” Mr. Sinai said. “It’s a return to a sanguine view of the economy that is simply not justified.”

If, as is widely anticipated, the economy grows more slowly than the White House assumes, revenue will be lower, forcing the government to cut spending, raise taxes or run larger deficits.

Economists also criticized as unrealistically hopeful the assumptions by the Federal Reserve as it began so-called stress tests to gauge the health of the nation’s largest banks. In testimony, Ben S. Bernanke, the Fed chairman, said that the nation’s unemployment rate would most likely reach 8.8 percent next year.

“That forecast just doesn’t seem realistic,” said Dean Baker, co-director of the Center for Economic and Policy Research in Washington, “and I don’t think it helps the Fed’s credibility to make these sorts of forecasts right now.”

As federal regulators estimate potential losses at banks, the harshest assumptions they are testing entails the unemployment rate topping out at 10.3 percent — the highest level since 1983, but hardly the worst case.

By Mr. Baker’s reckoning, the unemployment rate may exceed 12 percent — the highest level since tracking began in 1948.

“We continue to see across-the-board numbers coming in worse than we expected,” Mr. Baker said.

By Mr. Zandi’s estimation, in the most likely case, the unemployment rate will reach 9.3 percent next year. The distress in the financial system, the job market and real estate have become inextricably intertwined.

As troubled banks remain hesitant to lend, even healthy companies are laying off workers. As more Americans lose jobs, they are cutting spending, depriving businesses of revenue, and falling behind on house, car and credit card payments, multiplying losses in the financial system. As more homes land in foreclosure and would-be buyers fail to secure mortgages, housing prices fall further, adding to the losses of the banks — a downward spiral.

Many economists expect that the labor data to be released next Friday will show that as many as 700,000 jobs disappeared in February, lifting the unemployment rate near 8 percent and pushing total job losses to more than four million since the recession began in December 2007.

Given the brutal forces at play, some experts question the administration’s decision to publicize the bank stress tests, as opposed to conducting them quietly.

“It invited the interpretation that this was the beginning of triage for the banks, that we were going to start lining them up and shooting them,” said Alan S. Blinder, a former vice chairman of the Federal Reserve and a professor at Princeton. “There are some things in the bank supervisor role that you just keep secret.”

Others argue that the tests could sow needed assurance. “The stress test could create transparency,” said Alan D. Levenson, chief economist at T. Rowe Price in Baltimore.

As the gruesome data accumulates, this much is already clear: Transparency is not for the squeamish.

Mr. Levenson noted that the weakening economy was destroying demand for goods and services even faster than the $787 billion stimulus program could replace it.

3) SPECIAL PREVIEW. The Coming War on Sovereignty
By John R. Bolton

Barack Obama’s nascent presidency has brought forth the customary flood of policy proposals from the great and good, all hoping to influence his administration. One noteworthy offering is a short report with a distinguished provenance entitled A Plan for Action,1 which features a revealingly immodest subtitle: A New Era of International Cooperation for a Changed World: 2009, 2010, and Beyond.

In presentation and tone, A Plan for Action is determinedly uncontroversial; indeed, it looks and reads more like a corporate brochure than a foreign-policy paper. The text is the work of three academics—Bruce Jones of NYU, Carlos Pascual of the Brookings Institution, and Stephen John Stedman of Stanford. Its findings and recommendations, they claim, rose from a series of meetings with foreign-policy eminences here and abroad, including former Secretaries of State of both parties as well as defense officials from the Clinton and first Bush administrations. The participation of these notables is what gives A Plan for Action its bona fides, though one should doubt how much the document actually reflects their ideas. There is no question, however, that the ideas advanced in A Plan for Action have become mainstays in the liberal vision of the future of American foreign policy.

That is what makes A Plan for Action especially interesting, and especially worrisome. If it is what it appears to be—a blueprint for the Obama administration’s effort to construct a foreign policy different from George W. Bush’s—then the nation’s governing elite is in the process of taking a sharp, indeed radical, turn away from the principles and practices of representative self-government that have been at the core of the American experiment since the nation’s founding. The pivot point is a shifting understanding of American sovereignty.

While the term “sovereignty” has acquired many, often inconsistent, definitions, Americans have historically understood it to mean our collective right to govern ourselves within our Constitutional framework. Today’s liberal elite, by contrast, sees sovereignty as something much more abstract and less tangible, and thus a prize of less value to individual citizens than it once might have been. They argue that the model accepted by European countries in the Peace of Westphalia in 1648, which assigned to individual nation-states the right and responsibility to manage their own affairs within their own borders, is in the process of being superseded by new structures more appropriate to the 21st century.

In this regard, they usually cite the European Union (EU) as the new model, with its 27 member nations falling under the aegis of a centralized financial system administered in Brussels. On issue after issue, from climate change to trade, American liberals increasingly look to Europe’s example of transnational consensus as the proper model for the United States. That is particularly true when it comes to national security, as John Kerry revealed when, during his presidential bid in 2004, he said that American policy had to pass a “global test” in order to secure its legitimacy.

This is not a view with which the broader American population has shown much comfort. Traditionally, Americans have resisted the notion that their government’s actions had to pass muster with other governments, often with widely differing values and interests. It is the foreign-policy establishment’s unease with this long-held American conviction that is the motivating factor behind A Plan for Action, which represents a bold attempt to argue that any such set of beliefs has simply been overtaken by events.

To this end, the authors provide a brief for what they call “responsible sovereignty.” They define it as “the notion that sovereignty entails obligations and duties toward other states as well as to one’s own citizens,” and they believe that its application can form the basis for a “cooperative international order.” At first glance, the phrase “responsible sovereignty” may seem unremarkable, given the paucity of advocates for “irresponsible sovereignty.” But despite the Plan’s mainstream provenance, the conception is a dramatic overhaul of sovereignty itself.

“Global leaders,” the Plan insists, “increasingly recognize that alone they are unable to protect their interests and their citizens—national security has become interdependent with global security.” The United States must therefore commit to “a rule-based international system that rejects unilateralism and looks beyond military might,” or else “resign [our]selves to an ad-hoc international system.” Mere “traditional sovereignty” is insufficient in the new era we have entered, an era in which we must contend with “the realities of a now transnational world.” This “rule-based international system” will create the conditions for “global governance.”

The Plan suggests that the transition to this new system must begin immediately because of the terrible damage done by the Bush administration. In the Plan’s narrative, Bush disdained diplomacy, uniformly preferring the use of force, regime change, preemptive attacks, and general swagger in its conduct of foreign affairs. The Plan, by contrast, “rejects unilateralism and looks beyond military might.” Its implementation will lead to the successful resolution of dispute after dispute and usher in a new and unprecedented period of worldwide comity.

As the Obama years begin, we certainly do need a lively debate on the utility of diplomacy, but it would be better if that debate were not conducted on the false premise offered by A Plan for Action. In reality, in the overwhelming majority of cases, foreign-policy thinkers on both sides of the ideological divide believe diplomacy is the solution to the difficulties that arise in the international system. That is how the Bush administration conducted itself as well.

The difference arises in the consideration of a tiny number of cases—cases that prove entirely resistant to diplomatic efforts, in which divergent national interests prove implacably resistant to reconciliation. If diplomacy does not and cannot work, the continued application of it to a problematic situation is akin to subjecting a cancer patient to a regimen of chemotherapy that shows no results whatever. The result may look like treatment, but it is, in fact, only making the patient sicker and offering no possibility of improvement.

Diplomacy is like all other human activity. It has costs and it has benefits. Whether to engage in diplomacy on a given matter requires a judicious assessment of both costs and benefits. This is an exercise about which reasonable people can disagree. If diplomacy is to work, it must be preceded by an effort to determine its parameters—when it might be best to begin, how to achieve one’s aims, and what the purpose of the process might be. At the cold war’s outset, for example, Harry Truman’s Secretary of State, Dean Acheson, frequently observed that he was prepared to negotiate with the Soviets only when America could do so from a position of strength.

Time is one of the most important variables in a diplomatic dance, because it often imposes a cost on one side and a benefit to its adversary. Nations can use the time granted by a diplomatic process to obscure their objectives, build alliances, prepare operationally for war, and, especially today, accelerate their efforts to build weapons of mass destruction and the ballistic missiles that might carry them. There are concrete economic factors that must be considered as well in the act of seeking to engage an adversary in the diplomatic realm—the act of providing humanitarian assistance as an act of good will, for example, the suspension of economic sanctions, or even resuming normal trade relations during negotiations.

Obviously, the United States and, indeed, all rational nations are entirely comfortable paying substantial costs when they appear to be wise investments that will lead to the achievement of a larger objective. Alas, such happy conclusions are far from inevitable, and failing to understand the truth of this uncomfortable and inarguable reality has led nations to prolong negotiations long after the last glimmer of progress has been snuffed out. For too many diplomats, there is no off switch for diplomacy, no moment at which the only sensible thing to do is rise from the table and go home.

Has one ever heard of a diplomat working to fashion an “exit strategy” from a failed negotiation? One hasn’t. One should.

Diplomacy is a tool, not a policy. It is a technique, not an end in itself. Urging, however earnestly, that we “engage” with our enemies tells us nothing about what happens after concluding the initial pleasantries at the negotiating table. Just opening the conversation is often significant, especially for those who are legitimized merely by being present. But without more, the meaning and potency of the photo op will quickly fade.

That is why effective diplomacy must be one aspect of a larger strategic spectrum that includes ugly and public confrontations. Without the threat of painful sanctions, harsh condemnations, and even the use of force, diplomacy risks becoming a sucker’s game, in which one side will sit forever in naïve hope of reaching a settlement while the other side acts at will.

Diplomacy is an end in itself in A Plan for Action. So, too, is multilateralism. The multilateralism the Plan celebrates and advocates is, of course, set in sharp contrast to the portrait it draws of a Bush administration flush with unilateralist cowboys intent on overturning existing international treaties and institutions just for the sport of it. Defining unilateralism is straightforward: the word refers to a state acting on its own in international affairs.2 It is a critical conceptual mistake, however, to pose “multilateralism” simply as its opposite.

Consider, for example, the various roles of the United Nations, the North American Treaty Organization, and the Proliferation Security Initiative. The UN, the Holy Grail of multilateralism, is an organization of 192 members with responsibility for the maintenance of international peace and security lodged in its Security Council. NATO is a defense alliance of 26 states, all of which are Western democracies. The Proliferation Security Initiative (PSI), created in 2003 by the Bush administration, now includes 90-plus diverse countries dedicated to stopping international trafficking in weapons of mass destruction.

Each organization is clearly “multilateral,” but their roles are so wildly different that the word ceases to have any meaning. For example, if the United States confronted a serious threat, it would be acting multilaterally if it took the matter either to NATO or the UN. Both options would be “multilateral,” but widely divergent in diplomatic and political content, and quite likely in military significance as well. They would be comparable related in the same way a steak knife is comparable to a plastic butter knife.

The PSI offers an even starker contrast, for unlike either the UN or NATO, it has no secretary general, no Secretariat, no headquarters, and no regularly scheduled meetings. One British diplomat described the initiative as “an activity, not an organization.” In fact, the model of the Proliferation Security Initiative is the ideal one for multilateral activity in the future, precisely because it transcends the traditional structures of international organizations, which have, time and again, proved inefficient and ineffective.

“Multilateralism” is, in other words, merely a word that describes international action taken by a group of nations acting in concert. For the authors of A Plan for Action, however, multilateralism has an almost spiritual aspect, representing a harmony that transcends barriers and oceans.

Harmony is designed to stifle any discordant notes, and so is the multilateralism envisioned by an American foreign policy guided by “responsible sovereignty.” It is one in which the group of nations, of which the United States is but a single player among many, initiates policies and activities that would likely be designed to constrain the freedom of action of the United States in pursuit of that harmony—not only in its activities abroad, but also in its activities within the 50 states.

There is a precedent for this in the conduct of the European Union, whose 27 nations now possess a common currency in the form of the euro and an immensely complex series of trade and labor policies intended to cut across sovereign lines. The EU is the model A Plan for Action proffers for the “responsible sovereignty” regime its authors wish to import to the United States. EU bureaucrats based in Brussels have been reshaping the priorities and needs of EU member states for a decade now, and proposing a system based on the design of the EU suggests a desire to subject the United States to a kind of international oversight not only when it comes to foreign policy but also on matters properly understood as U.S. domestic policy.

That very approach has been on display at the United Nations for years in an effort to standardize international conduct that has come to be known as “norming.” In theory, there is good reason to create international standards—for measurement, for example, or for conduct on the high seas. But “norming” goes far beyond such prosaic concerns. The UN has, for example, repeatedly voted in different committees to condemn the death penalty, in a clear effort to put pressure on the United States to follow suit. Similar votes have been taken on abortion rights and restricting the private ownership of firearms.

Such issues have been, and likely will again be, the subjects of intense democratic debate within the United States, and properly so. There is no need to internationalize them to make the debate more fruitful. What is common to these and many other issues is that the losers in our domestic debate are often the proponents of internationalizing the controversies. They think that if they can change the political actors, they can change the political outcome. Unsuccessful in our domestic political arena, they seek to redefine the arena in which these matters will be adjudicated—moving, in effect, from unilateral, democratic U.S. decision-making to a multilateral, bureaucratic, and elitist environment. For almost any domestic issue one can imagine, there are likely to be nongovernmental organizations roaming the international arena desperately trying to turn their priorities into “norming” issues.

This is what “responsible sovereignty” would look like. For the authors and signatories of A Plan of Action, sovereignty is simply an abstraction, a historical concept about as important today as the “sovereigns” from whose absolute rights the term originally derived. That is not the understanding of the U.S. Constitution, which locates the basis of its legitimacy in “we the people,” who constitute the sovereign authority of the nation.

“Sharing” sovereignty with someone or something else is thus not abstract for Americans. Doing so by definition will diminish the sovereign power of the American people over their government and their own lives, the very purpose for which the Constitution was written. This is something Americans have been reluctant to do. Now their reluctance may have to take the form of more concerted action against “responsible sovereignty” if its onward march is to be halted or reversed. Our Founders would clearly understand the need.


1 The report can be downloaded free of charge at

2 An important subtext is the continuing confusion between unilateralism and isolationism, confusion especially evident in Europe in the late 1990’s. Even before the Bush administration, I tried to explain the distinction in “Unilateralism Is Not Isolationism” in Gwyn Prins, ed., Understanding Unilateralism in American Foreign Relations, Chatham House, 2000. More recently, Mackubin Thomas Owens makes a similar point in “The Bush Doctrine: The Foreign Policy of Republican Empire,” Orbis, Winter, 2009.

4) Done with Human Rights
Abe Greenwald

As a foreign policy issue, human rights has historically been a no-brainer for both Democrats and Republicans. Conservatives pushed Stalinist regimes on their records of mistreatment all through the Cold War and liberal leaders have usually been comfortable at least talking the talk when it comes to far right nationalist tyrannies. Not so these days. Michael Barone is not overstating the case when he writes:

One arrow in the quiver of American foreign policy has been our pressing — sometimes sotto voce (as in the Helsinki Accords), sometimes in opera buffa (”Mr. Gorbachev, tear down this wall!”) — tyrannical regimes to honor human rights. Hillary Clinton has put that arrow over her knee, broken it in two and thrown it away.

Barone is referring to Clinton’s blunt announcement to the Chinese that the U.S. is not in the Human Rights business these days.

What’s most repugnant about the Obama administration’s indifference to human rights abuses is the way this posture was achieved. Obama created a rights-abusing bogeyman in the person of George W. Bush and then, with full executive bravado, slew the monster by way of inaugural rhetoric and a few high-profile (but technically watery) presidential orders. So Barack Obama has done his share for human rights.

He’s closing (but really just relocating) the Guantanamo facility, so he doesn’t have to mention the wrongfully imprisoned thousands throughout China. He’s ending (but really just discussing the ramifications of ending) tough interrogations, so he doesn’t have to bring up Syrian torture when reaching out to the Assad regime. He’s closed down temporary CIA detention facilities, so when he goes on Arabian TV he’s free to praise the “courage” of a Saudi king whose domestic anti-terrorism tactics are composed of sheer brutality.

We are seeing the real-world impact of equating three cases of American waterboarding with institutionalized international torture. Obama set up Bush’s America as a human rights wasteland in order to play to the netroots and taint his Republican challenger. It worked, as a campaign strategy. But his year-long campaign to convince the entire world that America has lost its moral standing worked too. In histrionically declaring America a newly torture-free nation during his congressional address last week, Obama may think he’s let himself off the international hook. But with his administration’s decision to scrap human rights, the period of our nation’s real moral degradation may only just be getting started.

Last summer, when he was still a candidate, Barack Obama promised: “I will send once more a message to those yearning faces beyond our shores that says, ‘You matter to us. Your future is our future. And our moment is now.’” Our moment just passed.

Marty Peretz writes of the decision not to attend Durban II and of the appointment of Chas Freeman:

I have an instinct that the finale for Geneva was hastened by the Freeman disaster about which I wrote thrice yesterday. No one can explain what the president sees in him that would allow such a crude propagandist and bigot to be judge of what intelligence information the president sees and what he does not. The intelligence machinery of the country has been under suspicion for years because of ignorance or bureaucratic conflicts. Add now the fact that Freeman loves the Chinese dictatorship and that he is a shill for the king of Saudi Arabia. Oh yes, and he clearly despises friends of Israel, Jewish or not.

Perhaps this is so, but then there is no rhyme or reason to our national security apparatus. We have a president who ricochets from one set of critics to the next without regard for the merits of the issue before him. Is this is what we are to expect — the toady of the House of Saud in a key role “balanced” by a “boycott” of Durban II? This is a peculiar compromise indeed: to be just a little bit in the thrall of the Israel-bashers. And it raises the troubling question as to who really is in charge of decision making: everyone or no one or a very confused president?

Coming out of the election, one theory on Barack Obama was that he was a “moderate” on national security who simply played to the netroots in the primary. That’s the “bet” Colin Powell and others placed. Another explanation, particularly after the appointments of solid establishment types, was that he really didn’t care that much about foreign policy and wanted to devote himself to domestic policy.

Perhaps re-inventing American society and dismantling the free market system have taken most of his time of late. But if that is the case, he better start paying attention and stop leaving national security to others. National security is not self-executing. Without a strong hand at the rudder and a clear chain of command we will have incoherence.

5) An Interview of Jonathan Schanzer* by Near East Report of Why Hamas and Fatah Fight

(*Jonathan Schanzer is the deputy executive director of the Jewish Policy Center and the author of Hamas vs. Fatah: The Struggle for Palestine.
In Hamas vs. Fatah, author Jonathan Schanzer suggests the violent rivalry between Hamas and Fatah has stymied U.S. efforts to promote Israeli-Palestinian peace.)

Jonathan Schanzer: When Hamas took over the Gaza Strip in the summer of 2007, the violence was brutal. Hamas was responsible for pushing Fatah members off of tall buildings and shooting them point blank in the limbs. This shattered this vision that I think many had of a unified Palestinian people. I felt that this was a point worth noting and began writing a book shortly thereafter.

NER: Why the violent disagreements between Hamas and Fatah?

JS: Fatah purports to represent the Palestinian people, but there are sharp divisions between Fatah and Hamas over whether there should be discussions and diplomacy with Israel.

When Fatah engaged in the Oslo process with Israel, Hamas disagreed vehemently and began to carry out attacks not only to inflict pain and suffering on the Jewish people living in Israel, but also to make it very clear to the Palestinian people that there were sharp divisions between Hamas and Fatah. In other words, Hamas was able to kill two birds with one stone and this is something that I think was overlooked in the mainstream media.

NER: Wasn't there a time when Hamas and Fatah set aside their mutual dislike of each other and cooperated to fight against Israel?

JS: Absolutely. When Yasser Arafat calculated that the Oslo process would no longer reap benefits for him, he launched a war against Israel in the autumn of 2000. He exhorted Hamas to join him. In fact, he let Hamas terrorists out of jail and openly worked with the Hamas organization to attack Israel through a campaign of suicide bombings and other acts of violence.

What was interesting was that they were able to work together for the better part of a year, but Hamas quickly realized that it didn't need Fatah in order to carry out its campaign of violence against Israel, and the two sides split off again and returned to their traditional positions of enmity vis-à-vis each other.

NER: What led to the Hamas takeover of Gaza in 2007, and what have been the effects since?

JS: After the death of Arafat in 2004, there was a leadership vacuum. The Fatah organization had weakened significantly, and Hamas continued to gain strength. Finally, by January of 2006, legislative elections were held within the Palestinian territories as part of the U.S. initiative to try to spread democracy throughout the Middle East. Those elections were probably the freest and fairest elections ever held in the Arab world, and they yielded a victory for Hamas.

The problem was that Fatah refused to yield power and refused to join a coalition government with Hamas. For the next year and a half, Fatah and Hamas engaged in a power struggle, which continued until June 2007 when Hamas carried out a violent coup in the Gaza Strip.

Hamas deposed the Fatah organization from the Gaza Strip and effectively took over the media and established different government and security structures to the point now that we actually have essentially two Palestinian entities. We have a Gaza entity run by Hamas and a West Bank entity run by Fatah

The Hamas-Fatah conflict continues. The two sides exchange barbs, fight one another and arrest cadres of the opposite camp in each of the territories. We really are at a point now where it's very difficult to see who speaks for the Palestinian people.

NER: In June 2008, Hamas accepted an Egyptian-mediated tahdiyeh, a period of calm, and in December they terminated it. Why did Hamas accept this period of calm in the first place, and why did Hamas decide to terminate the calm and dramatically increase its rocket fire on Israel?

JS: When Hamas accepted this tahdiyeh, it was never seen as a ceasefire because a ceasefire would mean accepting the existence of the state of Israel. Hamas doesn't even call Israel by its name; they call it the "Zionist entity" or "Zionist enemy."

What Hamas sought to do was to stave off an attack. At that time, there was a lot of talk in the IDF that an invasion of Gaza was going to be necessary because Hamas continued to fire salvo after salvo of rockets into Israel's southern territory. More worrisome was the fact that the rockets were increasing in payload and increasing in range, so it became clear that if this trend continued, Israel's middle would be threatened—not just the south, but rather some of the major population centers.

In an attempt, I believe, to stave off an Israeli invasion, Hamas declared a truce and it really benefited from six months of relative calm. Hamas was able to stockpile more rockets and smuggle in sophisticated weaponry, such as high-powered sniper rifles, night-vision goggles, anti-tank missiles and lots of other things that would help Hamas in its next confrontation with Israel. In addition, Hamas sent many of its members to Iran for training so that they could receive some of the same skills that Hizballah demonstrated in its war with Israel in 2006.

After six months, Hamas elected not to renew the truce. One of the things that we hear on the news is that the truce between the two sides ended. This is incorrect. Hamas simply elected to terminate a truce that it had unilaterally decided to adopt, and Hamas—I think at the prodding of Iran—began to lob rockets back into Israel.

NER: How can Israel's Operation Cast Lead be viewed through the Hamas vs. Fatah lens? What type of outcome does Fatah want in Gaza?

JS: It's important to note that there are really two policies at play here. There is a West Bank policy and a Gaza policy. Israel is ignoring the West Bank right now—it is not interested at all in military operations in the West Bank. This is a departure for Israeli policy. Usually when there is violence against Israel, it's coming from both territories. We're simply not seeing that right now. Israel is really treating the two territories as two separate entities, as it rightly should. There are two different governments run by two different factions.

Fatah is quite openly letting the world know that Hamas has miscalculated, that it is now reaping what it has sown. Fatah probably seeks to retake the Gaza Strip at some point, but there are two problems with that goal. First, the Fatah organization is still extremely weak. Its leadership is fractured and its ability to even govern the West Bank has been called into question. Its military is simply not able to maintain control.

Second, if Israel does reinstall Fatah as the governing body in the Gaza Strip, it will likely be rejected by the Gaza population much like an artificial heart. This would be an organ that Israel would try to transplant and the population there would almost certainly distrust the Fatah organization, simply because Israel tried to install it there.

NER: How should the United States approach the Hamas-Fatah conflict?

JS: The Hamas-Fatah conflict is something that was largely ignored by the Bush administration and has so far been ignored by the Obama administration. The Hamas-Fatah conflict is possibly one of the thorniest issues that the United States now faces with regard to diplomacy in the Middle East.

The fact that you have two separate Palestinian areas that are run by two separate factions that are at war with one another means that there is no Palestinian interlocutor. There is no one address that the United States can call to negotiate peace between the Palestinians and Israel. So until that matter has been resolved, I believe that all other efforts at diplomacy are probably wasted efforts. The new administration must recognize this fact and make it known to the world that the Palestinians need to join together in some fashion to come to the negotiating table—without, however, allowing engagement with Hamas until it accepts the three international conditions: recognizing Israel, renouncing violence and accepting all previous agreements with Israel. Until that happens I believe we're going to spin our wheels.

The danger here is that if the United States brings Fatah and Israel to the table, and Fatah enters into an agreement that is not accepted by half of the Palestinians, it will not be seen as a legitimate agreement. If that happens, you will see more violence and more frustration. The more that agreements falter, the better chance there is of a more dangerous conflict breaking out between the Palestinians and the Israelis.

6) 'Palestinians should govern their lives'

Prime Minister-designate Binyamin Netanyahu expressed his support in an independent Palestinian government, noting the "broad agreement inside Israel and outside that the Palestinians should have the ability to govern their lives but not to threaten ours."

In an interview published Saturday, the Likud leader reportedly told the Washington Post that he would continue peace talks with the Palestinians, while advancing the economic development in the Palestinian Authority.

"I propose a (new) way, which I believe can achieve progress: to continue political talks and at the same time advance the economic development that has begun and also strengthen the Palestinian security forces," said Netanyahu.

Netanyahu was quoted as saying that he would personally "take charge of a government committee that will regularly address the needs of the Palestinian economy in the West Bank."

Asked about IDF Operation Cast Lead against Hamas in the Gaza Strip, the prime minister-designate stressed that "Hamas is incompatible with peace," and went on to express hope that the Palestinians in Gaza change the Islamic regime, "because we want to have peace with all the Palestinians."

"What we should do now is enable humanitarian aid to flow into Gaza but not in such a way as it enables Hamas to buy more rockets," he reportedly told the newspaper.

Referring to indirect talks between Israel and Syria, Netanyahu said that "Syria so far has been talking peace but has enabled Hizbullah to arm itself in contravention of UN Security Council resolutions."

"I would talk to Syria about abandoning these courses of action and building confidence that they really want to move toward peace. So far they're not giving that impression," the Likud chair reportedly said.

7) Hamas: We will never recognize Israel

Group shuns Abbas' offer of unity gov't, which he says must agree to two-state solution with Israel

Palestinian President Mahmoud Abbas said on Saturday any unity government with Hamas would have to agree to a two-state solution with Israel, a demand quickly rejected by his Islamist rivals.

The disagreement could hamper Egyptian-brokered reconciliation talks aimed at ending a schism between the Hamas-ruled Gaza Strip and the occupied West Bank, where Abbas's Fatah faction holds sway.

"We are moving in steady steps towards ... a national unity government that abides by our known commitments, which include the two-state vision and the signed (peace) commitments," Abbas said in the West Bank city of Ramallah.

Hamas official Ayman Taha in Gaza said Abbas's comments undermine chances for reaching a unity agreement.

"We reject any pre-conditions in the formation of the unity government. Hamas will never accept a unity government that recognizes Israel," Taha said.

A dozen Palestinian factions including Fatah and Hamas began reconciliation talks in Cairo on Thursday to try to agree by March 20 on a unity government. Previous efforts by Arab negotiators to reconcile Fatah and Hamas have failed.

A deal could lead to the lifting of Israel's blockade of the Gaza strip and boost Abbas's peacemaking efforts with Israel.

But Hamas continues to say it will not formally recognise Israel and its 1988 founding charter calls for the destruction of the Jewish state.


President Obama, arriving at Camp Lejeune, NC, yesterday, declared the US combat mission in Iraq will end by Aug. 31, 2010 - yet 50,000 non combat troops will remain to ensure against renewed al Qaeda attacks or civil war. He spoke in front of US Marines, but his real audience was his left-wing campaign supporters.

And his carefully worded speech - its parsing of language worthy of Bill Clinton - may go down in history as his "Mission Accomplished" moment. We'll see who leaves Iraq when.

During last year's presidential campaign, it was evident that Obama wouldn't keep his promises to his leftist base to pull our troops out rapidly.

While he benefited greatly from the troop surge he opposed - which handed him a convalescent Iraq - he's learning that reality trumps rhetoric.

Forcefully delivered, his speech to the Marines served up more waffles than the International House of Pancakes.

Consider his big sound bite: "Let me say this as plainly as I can: by August 31, 2010, our combat mission in Iraq will end." What does that mean?

Will the 50,000 troops he intends to leave in Iraq, the trainers and maintainers, be forbidden to defend themselves? Are they just going to hang out? If terrorists or the Iranians skunk us, are we just going to ask for more?

The enemy gets a say, too. The situation on the ground will determine when combat operations end. Obama's just going to call them something else.

In the immortal phrasing of Ol' Bill, it depends on what the meaning of "is" is.

As for Obama's claim that "I have chosen a timeline that will remove our combat brigades over the next 18 months," just watch.

We're not going to leave 50,000 support troops in Iraq without combat units to protect them. We'll just ban the word "brigade" and call our shooters "task forces."

The reality all along has been that Obama can't cut and run.

He began campaigning for a second term on Inauguration Day and he's not going to let himself be blamed for "losing" Iraq.

Meanwhile, he's praying that progress continues in Baghdad.

As for yesterday's boilerplate nonsense that "The end of the war in Iraq will enable a new era of American leadership and engagement in the Middle East," hey, if it does, thank George W. Bush. History has a wicked sense of humor.

Of course, the rhetoric's necessary. Obama had to lecture the Marines to placate the angry extremists who put him in office.

The fundamental purpose of the speech was to hide the 50,000 residual troops in plain sight: "It's OK, see? They're not combat troops." Obama's scared as a naked sheriff at a moonshiners' convention.

He piggybacked on the left's hatred of "Bush's war" in Iraq, but had to show his tough-on-security bones during the campaign.

A strategic novice, he declared Afghanistan the good war. Now it's his. And while Iraq looks increasingly like a success story, Afghanistan's going south. Iraq's the prize, Afghanistan's the booby prize.

Success in Afghanistan's a one-off, while even a half-baked democracy in Iraq changes the Middle East. And Pakistan's the monster under the White House bed. In artilleryman's parlance, Obama's speech to the Marines was all flash, no bang.

He's struggling to appear decisive while carving out maximum wiggle room. And in the modern tradition of Democratic presidents, he just wishes these foreign conflicts would go away. But they won't.

Welcome to reality, Mr. President.

9) The Six-Trillion-Dollar Man:Fighting for truth, justice, and the European way.
By Mark Steyn

The superheroes I always found hard to keep track of were the ones who kept relaunching themselves. I mean, Batman’s been Batman for 70 years and Spider-Man’s been Spider-Man for the best part of 50. But I’m thinking of chaps like Ant-Man. Very small, as one might expect. Then he became Giant-Man. Then he became Yellowjacket (his girlfriend was the Wasp). Then he became Goliath. I’ve lost track of him since then. But, thanks to my usual 20-second exhaustive research, I see he was relaunched only a month ago, this time as the Wasp. Hang on, I thought the Wasp was his chick? Has he had a sex-change? Hey, why not? For a while he was both Giant-Man and Yellowjacket, playing a kind of schizoid double-hero with each superpower emphasizing a different side of his identity.

Anyway, that’s how I feel about the endlessly morphing supergovernment hero battling the planet-swallowing economic crisis. Back in September, we were told to put our faith in Bailoutman. Then in January, Bailoutman went to his tailor, had the long underwear redesigned, and relaunched himself as Mister Stimulus. A few weeks later the Obama crowd noticed that “stimulus,” like “bailout,” had become a cheap punch line, and decided the approved term was “recovery.” So Captain Recovery swung into action.

In fairness to Ant-Man, he got very small, and then he got big, and then he got small again, and then he got super-big, and for a while he was both small and big, in a superheroically bipartisan way. But Bailoutman started out as a huge staggering behemoth and has inflated from there. Once upon a time he was as a meek, mild-mannered trillionaire, but a mere five months later he was a meek, mild-mannered multi-trillionaire.

If you find it hard to keep track of these all these evolutions, the President in his address to Congress finally spilled the beans and unveiled our new hero in his final form: the Incredible Bulk, Statezilla, Governmentuan, a colossus bestriding the land like a, er, colossus. What superpowers does he have? All of them! He can save the economy, he can reform health care, he can prevent foreclosures, he can federalize daycare, he can cap the salary of his archenemies the sinister Fat Cats who “pad their pay checks and buy fancy drapes.” No longer will the citizenry cower in fear of fancy drapes: Pay no attention to the man behind the curtain! With one solar panel on the roof of his underground headquarters, Governmentuan can transform the American energy sector and power his amazing Governmentmobile, the new environmentally friendly supercar that soon we’ll all be driving because we’ll be given government car loans to buy the government cars! He’ll have hundreds of thousands of boy sidekicks, none of whom will ever be allowed to drop out of high school because (in the words of his famous catchphrase) “that’s no longer an option!” “Gee, thanks, Governmentuan!” says Diplomaboy the Boy Wonder, as he goes off to college to study Gender As A Social Construct until he’s 34.

And our hero can do this all without raising taxes on any family earning under $250,000!

Look — up in the sky: Is it a bird? Is it a plane? Is it a sudden eclipse plunging you and three adjoining states into total darkness? No, it’s the Incredible Bulk flailing through the air, fighting for truth, justice, and the American way. Well, actually, it’s more like the European way. But Americans will get used to it after a while.

Of course, when Barack Obama is accused of creating his Six-Trillion-Dollar Man “because I believe in bigger government” he denies it: “I don’t,” he says flatly. This is like Clark Kent telling Lois Lane he’s not Superman: They just look a bit similar when he removes his glasses. Likewise, any connection between Obama and a Big Government behemoth swallowing everything in sight is entirely coincidental.

Do you ever go back to the first issue of this comic book and try to figure out what the plot’s all about? Wasn’t it something to do with subprime mortgages and two strange creatures called Fannie and Freddie? And then it became something to do with saving banks, wasn’t that it? And somewhere along the way the Big Three auto makers got involved? And now it’s about everything. Obama is going to do everything. So he needs to be able to spend everything. Only we don’t call it “spending” anymore. Everything government “spends” is now deemed an “investment.” Government will “invest” in “more efficient cars,” it will “invest” in daycare, it will “invest” in a new Federal Regulatory Agency of Fancy Drapes and Window Treatments. It will “invest” in an impact study group that will study the impact of recalling every edition of Webster’s and pasting in it a little Post-It note on the page defining “spend” saying “obsolete — see ‘invest.’ ”

If you’re feeling a sudden urge to “invest” in a gallon of tequila and a couple of hookers and wake up with an almighty hangover and no pants in a rusting dumpster on a bit of abandoned scrub round the back of the freight yards, it may be because you’re one of that dwindling band of Americans foolish enough to pursue his living in what we used to call “the private sector.” You were never exactly Giant-Man, more like Average-Sized Man. But you have a vague sense that you’re gonna be a lot closer to Ant-Man by the time all this is through. Noting the president’s assurance that the 250-grand-and-under crowd won’t pay “a single dime” more in taxes, the Wall Street Journal calculated that if you took every single dime — that’s 100 per cent — of the over-250K crowd, it barely begins to pay for this program, even before half of them flee the the country. The $4 trillion Congress is planning on spending next year (2010) could just about be covered if you took every single dime of the taxable income of every American earning over $75,000.

But it doesn’t matter. Because Big Government is the ultimate hero, and the private sector is merely a supporting role. Last week, the president redefined the relationship between the citizen and the state, in ways that make America closer to Europe. If you’ve still got the Webster’s to hand, “closer to Europe” is a sociopolitical colloquialism meaning “much worse.”

Is the new all-powerful Statezilla vulnerable to anything? Unfortunately, yes. He loses all his superpowers when he comes into contact with something called Reality. But happily, Reality is nowhere in sight. There are believed to be some small surviving shards somewhere on the planet — maybe on an uninhabited atoll somewhere in the Pacific — but that’s just a rumor, and Barack Obama isn’t planning on running into Reality any time soon.

Friday, February 27, 2009

Mitchell - Obama's 'Trojan Horse' - Israel Beware!

This from the parent of one of my brightest and very accomplished friends and memo reader. The author is fearful we have elected a 'narccissist' as president and all that such entails. I wrote about this many memos ago.

I have published by own letter to the editor of our local newspaper expressing my own concerns and entitled it: "Our 'whirling dervish - 'populist pinata president!'

One of my dear friends has written criticizing my constant bashing of our president and I have reponded. (See 1, 1a and 1b below.)

Caroline Glick writes about Netanyahu's entrapment.

The Obama Administration seems to have concluded Hamas and Fatah are actually brothers in arm despite the fact they continue killing each other. Thus, Israel and Netanyahu must continue to give way, citing a previous pledge by Olmert to GW. Obama selected Mitchell who, I suspect, will prove to be Obama's 'Trojan Horse' to do his 'change' bidding. Israel and Netanyahu - beware you are probably going to be 'dissed!' (See 2 below.)

Will the real Obama stand up - apparently he has according to Jennifer Rubin.

Another sad phenomena is happening before our very eyes- newspapers are closing and/or decreasing their days of publications. Denver's Rocky Mountain News just closed, the Philadephia papers have declared bankruptcy. The NY Times is teetering and The Washington Post and Atlanta Constitution have just lost a ton of money.

Obviously advertising diminishes during an economic downturn and young people no longer seek news from newspapers preferring technology (Internet, computer based input etc.) as their source. Newspapers have also cut their own wrists with continued biased reporting and,I believe,they are witnessing a'backlash' and paying a heavy price in lost readership - certainly the many editorial and staff failures of the NY Times have not served that paper well.

Why the rise in popularity of Fox News' you decide approach? Has the public become wise/turned off and no longer buys into the biases of CNN and the major broadcast news anchors? Something must be going on because I am not dreaming and media surveys of listenership are not lying.

Is this critical? After all washing machines replaced clothes pins, cars replaced horses and the list goes on and on - technology is progress,right? For sure it is but a Democracy rests on an informed and participating public. With solid public education in retreat and now a decline in our newspapers are we witnessing the first step towards a society more vulnerable to political totalitarianism? Is America on the slippery path to becoming susceptible to another McCarthy era?

One thing for sure, and I posted it in a recent memo - Iran's higher education system is under attack. When minds of citizens are lulled and become mush and they are manipulated by propagandist government organs engaged in brainwashing and when reasoning is no longer a sought after quality and rigorous education standards are crushed under the weight of Politically Correct pap and nonsense; democracy and freedom are in danger.

Are we about to lose our Republic as we move towards democracy? This is a fascinating and clear explanation and I urge you search this out and listen.

Because I believe the conditions are increasingly ripe for such and I will continue bashing.(See 3 below.)

Meanwhile an economist raises further questions about the 'addition' in Obama's budget specifics - is 'Rosy Scenario' back in town? (See 4 below.)

Clive Crook likes what he sees but is concerned about gaps? (See 5 below.)

Mona Charen heard what she heard but now does not like seeing what she sees. (See 6 below.)

Next year's guest speaker - Kim, Strassel - sees Obama as Ahab - if so his policies could cause a whale of problems.

And "thar she blows.' Instead of George Bush's "read my lips" we might be getting Obama's 'kiss my a--.'

No, Obama's budget was not prepared by a member of Alcoholic's Anonymous. Rather it reflects the thinking and philosaophy of two others - Ayers and Axelrod. Either way it can be dubbed the 'AA' Budget but it may prove not be be an not 'A-OK.' one.(See 7 and 7a below.)

Let's hear it from Jim Rogers. (See 8 below.)

Day late and a dollar short - Obama decides to pull out of Durban. (See 9 below.)

Roll over and enjoy it? Churchill would not have given up - never, never, never!(See 10 below.)

Iran begins N Korean type offer of negotiations but with a subtle catch and Hollywood gets into the act as well. Talk about diplomatic drama. Stay tuned for the Obama Oscar! (See 11 and 12 below.)


1) Obama's speeches are unlike any political speech we have heard in American history. Never a politician in this land had such 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 the Malignant Self Love believes "Barack Obama appears to be a narcissist."

Vaknin is a world authority on narcissism. He understands narcissism 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, dearest and nearest suggest that the Senator is either a narcissist or he may have narcissistic personality disorder (NPD).

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. David Koresh, Charles Manson, Joseph Koni, Shoko Asahara, Stalin, Saddam, Mao,Kim Jong Ill and Adolph Hitler are a few examples of narcissists of our time. All these men had a tremendous influence over their fanciers. They created a personality cult around themselves and with their blazing speeches elevated their admirers, filled their hearts with enthusiasm and instilled in their minds a new zest for life. They gave them hope! They promised them the moon, but alas, invariably they 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. Then his mother re-married and Obama had to relocate to Indonesia , a foreign land with a radically foreign culture, to be raised by a step-father. 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 himself 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 objective. 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 do 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. No one can criticize him if things go wrong. 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 advance to write a book about race relations. The University of Chicago Law School provided him a lot longer than expected and at the end it evolved 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 half a billion dollars for his campaign (something unprecedented in history) has no interest in the plight of his own brother. Why? Because, his brother cannot be used for his ascent to power. A narcissist cares for no one but himself. This election is like no other 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 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 is a fool if one is not alarmed.

Many politicians are narcissists. They pose no threat to others...They are simply self serving and selfish. Obama evidences symptoms of pathological narcissism, which is different from the run-of-the-mill narcissism of a Richard Nixon or a 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.

Today the Democrats have placed all their hopes in Obama. But this man could put an end to their party. 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. This is racism, pure and simple. 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 never seen since the turbulent 1960 ' s. Obama will set the clock back decades... America is 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 Castrists, 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."

1a) Our 'whirling dervish - populist pinata' president!

Moving at the speed of light and with equal arrogant mis-placed self-confidence our youthful president is making his mark in $trillions.

Under the cloud of a severe economic depression our 'populist pinata' president has set up a bunch of straw men to attack all the way from Wall Street, to Main Street, from corporate America to the wealthy tax payer from the oil industry to the auto industry. It is divide and conquer style governance and he is a master with his accomplished oratory skills.

One day he dooms and glooms us and then quickly reverts to giving us hope all the while imposing his radical concepts that government - big, bigger government and ever more costly government with all its inefficiencies and strangulating rules and regulations - is the answer.

In matters foreign, he has moved with equal speed closing prison facilities, appointing advisors whose past views are anathema to one of our closest allies, dispensing largess, without a quid pro quo, and now we find the administration's willingness to send a delegation to U.N. sponsored The Durban Conference - whose members are among the world's most virulent haters not only of Israel but also western democracy.

I daresay, most who voted for our neophyte president continue to believe he is the 'messiah.' Perhaps some are beginning to have second thoughts and have concluded Obama's tax and spend scary 'stimulus bill' is simply a clever way of embracing one of the most ideologically extreme liberal agendas ever.

I remain unconvinced Obama's 'whirling dervish' stytle of leadership is the correct prescription. It might make for fascinating theatre in Turkey but is far more likely to doom our democracy.

1b) Dick, Reading your recent blogs is much worse than reading the WSJ or any of the papers. You are unremittingly down on Obama, the Dems and anyone who thinks the Palestinians are, well, deserving of anything but animosity; an they can hardly be people.

Of course there is much to worry about but ranting, without pointing in any direction but " Down " and without any prescriptions for better health is senseless. Newt is about to come out with a new Manifesto, his 12 Points. I have seen them and the only ones which make any sense to me are those in which he essentially takes the Obama view. Much of his other stuff is recycled crap which did not work before. He looks a tired puppy to me ( and I like the guy. )

How about stepping back and, if it is possible, taking a positive view of at least one ( if there is one ) of the Obama programs .Your recent blogs are so one sided as to make your arguments weaker than they should be. I thought that to argue your opponents position forcefully was the true measure of the poser of your own views since you truly have a deep understanding of the other side. D

My Response:

D, Always appreciate your comments. I have been doing a lot of bashing but I believe deservedly so. I also have supported my own earlier expressions with those of others so I am not alone in my discontent..

The man is on fire, moving like a whirling dervish, arrogantly so without the knowledge of history or qualifications. You should see the film by Dershowitz and can do so March 6 at noon ....

We are blind to what is going on in terms of where the fascist Jihadists and Muslim embrace of Sharia is going to lead.

Obama is dangerous D... but clever, slick and an excellent and gifted speaker. However, his budget proposal and ideology are anathema to my thinking.

Solutions. We are going through the trauma of deleveraging and we can modulate it but we cannot and should not abort it. We can ease the pain somewhat but building a future foundation on a concrete base with all kind of air pockets is foolish.

What we have is a lawyer whose client comes to him too late to really do much good.

We embraced Keynesian thinking because it foolishly permitted us to spend during the lush years (free lunch concept) and now we have no muscle during the tough years. We are down to bone and the markets are telling us that. We elected those who we allowed to spend our seed corn and now Obama wants to mortgage the farm and barn.

Go ahead and defend Obama. That is your right. I also have the right and feel the obligation, to criticize what I believe are very dangerous trends that are being heaped upon a populaton of adoring admiring dolts.

I respond not as a Republican, because you know I believe they blew their chance and became whorish as well. I repond as a person who has lived to see the errors of the likes of Obama and an country that adores without justification.

Tonight's play (The Full Monty) is very symbolic of what Obama is doing to us - mooning the nation. Me

2) Entrapping Netanyahu
By Caroline B. Glick

Negotiations between Likud and its coalition partners towards the formation of Israel's next government have only just begun. But the campaign to undermine the government-in-formation's ability to determine Israel's future course is already well underway. Incoming Prime Minister Binyamin Netanyahu must understand the traps being set for him and their sources. And as he builds his government, he must appoint ministers capable of working with him to extricate Israel from those traps and discredit their sources.

On Thursday US President Barack Obama's Middle East envoy George Mitchell arrived in Israel for his second visit. Whereas Mitchell's last visit - which took place in the last days of the electoral campaign -- was touted as a "listening tour," Mitchell made clear that during his current stay, he intends to begin calling shots.

His first order of business, we are told, is to pressure the outgoing government to destroy the so-called outpost communities in Judea and Samaria and expel the hundreds of Israeli families who live in them. To defend this call for intra-Israeli instability and violence, Mitchell notes that Prime Minister Ehud Olmert gave his word to former president George W. Bush that he would destroy these communities.

Lest Israelis believe that Mitchell will drop this demand once Olmert leaves office, he has made clear that as far as he is concerned, Olmert's pledge was not his own - but Israel's. In Mitchells' view, it binds Netanyahu no less than Olmert. So if Olmert leaves office without having sent IDF soldiers to throw women and children from their homes, Mitchell, Obama and Secretary of State Hillary Clinton will feel free to pressure Netanyahu to take on the task and punish him if he refuses.

If the Obama administration believes that the presence of Jewish communities in Judea and Samaria is the primary obstacle to peace, then the Hamas regime in Gaza is the second greatest obstacle to peace. As long as Hamas, a recognized terror group is in charge, the administration will be hard-pressed to push Israel to accept a Palestinian state.

To remedy this situation, the Obama administration has opted for a political fiction. The President and his aides have decided that a Hamas-Fatah government will moderate Hamas and therefore such a government will not only be legitimate, it is desirable. Whereas when the first Hamas-Fatah government formed in March 2007, the Bush administration refused to have anything to do with it, today the Obama administration is actively backing its reestablishment.

As the Obama administration apparently sees it, a Hamas-Fatah government will provide cover for stepped up pressure on Israel to surrender land to the Palestinians in Judea and Samaria because Israel will no longer be able to claim that it has no Palestinian partner. A Hamas-Fatah government will also allow the US to directly support the Palestinians in Gaza by coercing Israel to transfer full control over its borders with Gaza to Hamas, (which will be represented by Fatah), and by enabling the US to provide direct aid to Palestinian Authority agencies in Gaza.

To advance the administration's efforts to legitimize Hamas, Secretary of State Hillary Clinton will begin her first visit to the region at a conference in Cairo on Monday that seeks to raise some $2.8 billion for Gaza. She will pledge nearly a third of that amount -- $900 million -- in the name of US taxpayers.

The administration claims that none of this money, which it plans to funnel through UNRWA, will go towards funding Hamas. But this contention is demonstrably false. UNRWA openly collaborates with Hamas. Its workers double as Hamas combatants. Its refugee camps and schools are used as Hamas training bases and missile launch sites. Its mosques are used as recruiting grounds. And as UNRWA's willingness to transfer a letter from Hamas to US Senator John Kerry during his visit to Gaza last week demonstrated, the UN agency is also willing to act as Hamas's surrogate.

While it makes sense for Hamas to agree to join a unity government which will leave it in charge of Gaza and expand its control to Judea and Samaria as well, on the surface it makes little sense for Fatah to agree to a deal that would subordinate it to the same forces who brutally removed it from power in Gaza in 2007. But Fatah has several good reasons to be enthusiastic about the deal.

First, by joining Hamas, Fatah will be able to get its hands on a considerable portion of the international aid money expected to pour into Gaza. Second, by joining Hamas, Fatah neutralizes - at least in the short term - Hamas's interest in destroying it as a political force in Palestinian society. Fatah leader Mahmoud Abbas's term in office as PA Chairman expired last month. Were elections to be held today, he would lose a bid for reelection to Hamas's candidate by a wide margin. By joining a Hamas government, he will probably avoid the need to stand for reelection anytime soon.

For Israel, a US-supported Hamas-Fatah government is a hellish prospect. The political support such a government will lend to the terror war against Israel will be enormous. But beyond that, such a government, supported by the US will likely cause Israel security nightmares.

As a good will gesture ahead of the opening of unity talks this week in Cairo, Fatah released the Hamas operatives its US-trained forces arrested. Due to US pressure, over the past year, Israel allowed those forces to deploy in Jenin and Hebron, and in recent months they took some significant actions against Hamas operatives in those areas. Based on this record of achievement, Clinton and Mitchell have been pressuring Israel to transfer security control over all the Palestinian cities in Judea and Samaria to these forces.

But now that Fatah and Hamas are acting in concert, any such transfers of authority to Fatah will constitute a surrender of control to Hamas. While no Israeli government could accept such a demand, the Obama administration, which supports the Hamas-Fatah government, is likely to view Israel's refusal to continue to cooperate with Fatah as a reason to criticize Israel. The Obama administration's ability to disregard the will of the Israeli voters and the prerogatives of the incoming government owes in large part to the legacy that the outgoing Olmert-Livni-Barak government is leaving behind. The outgoing government set the conditions for the Obama administration's policies in three ways. First, by not defeating Hamas in Operation Cast Lead and then agreeing to negotiate a ceasefire with the terror group, the government paved the way for Hamas's acceptance by the US and Europe as a legitimate political force.

Just as its willingness to conduct negotiations with Syria paved the way for the administration's current courtship of Iran's Arab client state, and its willingness to accept UN Security Council resolution 1701 which placed Hizbullah on equal footing with Israel at the end of the Second Lebanon War, so too, the outgoing government's willingness to negotiate with Hamas has facilitated the current US and European drive to accept the Iranian proxy as a legitimate political force in Palestinian society.

Second, since Hamas's electoral victory in January 2006, the outgoing government accepted the false narrative that the Palestinian people in Gaza, who freely voted Hamas into power and have supported its regime ever since, bear no responsibility for the consequences of their actions. This false distinction between Hamas's supporters and Hamas effectively tied Israel's hands each time it was compelled to defend itself against Hamas's aggression against it. After all, if Gazans are all innocent, then Israel's primary responsibility should be to make sure that they are safe. And since its counter-terror operations necessarily place them at risk, those operations are fair game for international condemnation.

Moreover, at the same time that Israel accepted the dishonest distinction between Hamas and its supporters, it willingly took on responsibility for the welfare of Gaza residents. As Hamas shelled Sderot and Ashkelon and surrounding communities, Israel bowed to international pressure to supply its enemy and its enemy's supporters with food, medicine, fuel, water, and anything else that Hamas and the West could reasonable or unreasonably claim fell under the rubric of humanitarian aid. Had Israel not accepted responsibility for a population that freely chose to be led by a group dedicated to its annihilation, today Clinton would be hard pressed to pressure Israel to open its border crossings into Gaza, or to justify giving $900 million to Gaza.

Finally, through its unlimited support for Fatah, the outgoing government has made it enormously difficult for the incoming government to explain its objections to the Obama administration's policies either to the Israeli people or to the Americans themselves. By supporting Fatah, the Olmert-Livni-Barak government set up a false distinction between supposed moderates and supposed extremists. That distinction ignored and so legitimized Fatah's continued involvement in terrorism, its political war against Israel and its refusal to accept Israel's right to exist.

If Fatah is legitimate despite is bad behavior and bellicose ideology, then two things must be true. First, abstaining from terror can no longer be viewed as a precondition for receiving international legitimacy. And second, there is no reason not to accept Hamas. Based on the latter conclusion, many European leaders and Israeli leftists now openly call for conducting negotiations with Hamas. And based on the former conclusion, the Obama administration feels comfortable escalating its demands that Israel give land, security powers and money to Fatah even as it unifies its forces with Hamas and so expands Hamas's power from Gaza to Judea and Samaria.

Due to the Olmert-Livni-Barak government's legacy, when it enters office the Netanyahu government will lack the vocabulary it needs to abandon Israel's current self-defeating course with the Palestinians and defend its actions to the international community in the face of the Obama administration's use of dishonest terms like "peace processes" and "moderates" and "humanitarian aid" to constrain Israel's ability to defend itself. To surmount these challenges, Netanyahu must move immediately to change the terms of debate on the Palestinian issue.

Despite his great rhetorical gifts, Netanyahu cannot change the terms of international debate by himself. He needs two seasoned public figures who understand the nature of these challenges at his side. If Netanyahu appoints Natan Sharansky Foreign Minister and Moshe (Bogie) Ya'alon Defense Minister, he will have the top level support he needs to overcome his predecessors' legacy and change the nature of contemporary discourse on the Palestinians and on Israel's strategic significance to the West in the face of staunch opposition from Washington.

Like Netanyahu, Sharansky and Ya'alon understand the basic dishonesty of the current international conversation relating to the Palestinians. Both men have come out publicly against the false policy paradigms that have guided both the outgoing government and the US and Europe. Both are capable of working with Netanyahu to free Israel from the policy trap being set for him.

3) Obama Removes the Mask
By Jennifer Rubin

President Obama's speech Tuesday night should put to rest the argument as to who he really is. He revealed plans so sweeping and so expensive that, if they came to pass, we would permanently refashion the role of the federal government in the lives of every American.

During the campaign certain Republicans and libertarians tried to convince us Obama was a moderate, a sort of Bill Clinton “third way” reformer - and certainly no radical as conservatives claimed. Conservatives remained skeptical. Then during the transition, the debate as to Obama's political philosophy continued. He sprinkled his cabinet with sober figures and experienced economic gurus. So perhaps he was moderate in outlook and restrained in ambition.

Next came the stimulus plan. Yes, he delegated the entire enterprise to Nancy Pelosi and the liberal draftsmen in Congress. But perhaps this was an error in judgment, a departure from what he “really” wanted in order to achieve a stimulus plan.

Well, the mystery has been solved. Obama is an unalloyed and extreme liberal. He does not intend merely to slay the recession. He intends to remake the country's education, health care, and energy policies, with a hugely expanded and enormously powerful federal government directing vast swatches of American life and industry.

As Peter Baker of the [1] New York Times put it:

His ideas for raising taxes on the wealthy, revamping the health care system, and reversing climate change represent a philosophical agenda that strikes at the heart of the other party's core beliefs. While he said he did not believe in “bigger government,” he proposed a more activist government than any other since Lyndon B. Johnson.

This has relatively little, of course, to do with the recession. But Rahm Emanuel already told us that the administration regards the recession as an “opportunity” too good to waste.

The enormity of the president's plans raise multiple questions: How will we pay for it? Is this what voters want? Is a government-directed health care system and a [2] cap-and-trade carbon emissions regime compatible with a vibrant and innovative free market system?

But we did get some important answers last night, if not to those queries, then as to large political and philosophical ones. Just as the speech solved the mystery of who it was that we have elected as the 44th president, it also to a large degree defined the road Republicans must take in opposition and their path to recovery as a viable national political force.

It seems eons ago that in the aftermath of the election Republicans debated where they wanted to go as a political party and what they should do next. Throw out social conservatives, some suggested. Get rid of big-government moderates, others retorted. Pundits debated whether to advocate reform or return to the party's roots, or whether the former could rely on the latter for inspiration. But now it is crystal clear what the party's task must be: defend the free market and oppose the vast expansion of government which the president envisions. There is no getting around it. The opposition party must oppose.

In some sense Obama has made it easy. There is no point in the Republicans favoring half a loaf of nationalized health care or a moderate cap-and-trade rule. The extremism of the president's agenda leaves the Republicans little choice - if they intend to remain an active party dedicated to personal liberty - but to oppose the president's sweeping agenda.

The question remains how to do it and what tactics to employ in combating a charismatic and popular president who enjoys large majorities in the House and Senate. The Republicans would be wise to do three things.

First, they need to unmask the central fallacy at the core of the president's scheme: that we can pay for all of this with minimal tax increases and no increase in public debt. This is the fuzziest math yet employed. It is simply dishonest. The president perceives the public's wariness about living beyond our means when he [3] declared:

There is, of course, another responsibility we have to our children. And that's the responsibility to ensure that we do not pass on to them a debt they cannot pay. (Applause.) That is critical. I agree, absolutely. See, I know we can get some consensus in here. (Laughter.) With the deficit we inherited, the cost - (applause) - the cost of the crisis we face, and the long-term challenges we must meet, it has never been more important to ensure that as our economy recovers, we do what it takes to bring this deficit down. That is critical. (Applause.)

Republicans need to insist that the Democrats reveal their math: how much this will cost, how much revenue they intend to collect, and the long-term financial implications of this explosion of government activity. Just how much of the GDP do the Democrats intend to devote to government - 40%? 60%? More? It is tempting to nitpick small and easily understood spending items, but Republicans would do well to paint the bigger, and scarier, picture of what the Democrats have in mind.

Second, Republicans need to offer voters an alternative vision and alternative policies. The president believes government can do all these things. Republicans need to explain why states, private industry, and individuals can, for example, achieve expanded access to affordable coverage through expanded competition and private innovation far better than a one-size-fits-all federal plan can. The Democrats through [4] budgeting stealth want to take away school choice. The Republicans want to expand it.

And finally, Republicans need to emphasize why it is that, aside from the cost, we don't want government allocating carbon credits to business, determining the types of medical procedures we have access to, and generally directing large segments of the economy. As [5] David Brooks explained:

The political history of the 20th century is the history of social-engineering projects executed by well-intentioned people that began well and ended badly. There were big errors like communism, but also lesser ones, like a Vietnam War designed by the best and the brightest, urban renewal efforts that decimated neighborhoods, welfare policies that had the unintended effect of weakening families, and development programs that left a string of white elephant projects across the world.

In short, Republicans need to explain why the heavy hand of government is not the vehicle for navigating complex and intricate problems that are best left in the hands of citizens and the free market. As [6] Robert Higgs reminds us, even when it comes to more mundane tasks like jump-starting the economy, proposals to expand government action should be greeted with a heavy dose of skepticism:

Federal intervention rests on the presumption that officials know how to manage the economy and will use this knowledge effectively. This presumption always had a shaky foundation, and we have recently witnessed even more compelling evidence that the government simply does not know what it's doing. The big bailout bill enacted last October; the Federal Reserve's massive, frantic lending for many different purposes; and now the huge stimulus package all look like wild flailing - doing something mainly for the sake of being seen to be doing something - and, of course, enriching politically connected interests in the process.

So the battle is on. Are we to redefine the relationship between our citizens and government? Will we permanently alter our health care, education, and free market systems? The story has yet to be written, but now we know the plot and the characters in this very real drama. At last, we have uncovered who the president is and what he intends to do. Now we will find out if he will have his way.

URLs in this post:
[1] New York Times:
[2] cap-and-trade carbon emissions regime:
[3] declared:
[4] budgeting stealth:
[5] David Brooks:
[6] Robert Higgs:

4) Economists question budget's economic assumptions

Barack Obama Presidential Transition: In unveiling his budget, President Barack Obama pledged to bring "honesty and fairness" back to the budget process by getting rid of the gimmicks past administrations had used to hide the real costs of government programs and proposed tax cuts.

But many economists who examined the economic assumptions that undergird the spending plan believe that Obama may have resorted to one of the oldest gimmicks around — relying on overly optimistic economic assumptions to make it look like you are dealing with soaring budget deficits when in reality you are only closing the gap on paper.

"They used to joke during the Reagan years that the highest-ranking woman in the administration was Rosy Scenario," said Nariman Behravesh, the chief economist at IHS Global Insight, a major private forecasting firm.

Rosy may be back in town, said Behravesh, who called the Obama administration's forecasts "way too optimistic."

For its part, the administration insisted that it hadn't cooked the books to show greater growth, and thus more tax revenues, in coming years. But the administration forecast is far higher than the projections for growth in the overall economy, as measured by the gross domestic product, of many private analysts.

On Friday the government said the economy shrunk by a staggering 6.2 percent in the final quarter of last year, much faster than its earlier GDP estimates. And with layoffs piling up and spending drying up, economists expect rough months ahead.

GDP plays the biggest role in determining the accuracy of deficit forecasts because weaker-than-expected growth swells government payments for such things as unemployment benefits and food stamps and reduces tax receipts.

In its budget, the administration predicted that the overall economy, as measured by the gross domestic product, will shrink by 1.2 percent this year but will grow by a solid 3.2 percent in 2010. That growth would be followed by even stronger increases of 4 percent in 2011, 4.6 percent in 2012 and 4.2 percent in 2013.

By contrast, the consensus of forecasters surveyed by Blue Chip Economic Indicators in February predicted that the GDP will fall by a larger 1.9 percent this year and then increase at weaker rates of 2.1 percent in 2010, 2.9 percent in 2011 and 2012 and 2.8 percent in 2013.

Many private analysts believe that the current recession and rebound will be more U-shaped than V-shaped.

"When a country is griped by a financial crisis, the ensuing downturn often lasts much longer than normal," said Sung Won Sohn, an economics professor at the Martin Smith School of Business at California State University. "I think this downturn is gong to last longer and the rebound will be fairly anemic."

Christina Romer, the head of the president's Council of Economic Advisers, defended the administration's stronger GDP forecast, contending that in previous severe recessions, the pattern often showed a stronger rebound once the downturn was over. She cited the Great Depression as one such episode when the economy rebounded by strong rates after years of sizable declines.

Romer also suggested that many private forecasters may not be adequately taking account of the size of the government support that has been put forward, including the recently passed $787 billion economic stimulus bill.

"If there is ever a time when we think policy is going to contribute ... now is the time," she told reporters at a budget briefing on Thursday.

But Mark Zandi, chief economist at Moody's, said he believed the extent of the downturn will be more severe than the administration's forecast for this year and that this will prompt even larger policy responses on the part of the government, including increased help for homeowners facing foreclosure and another stimulus from Congress a year from now.

The administration's budget projects that the downturn will result in a 13.4 percent drop in government receipts this year, one of the contributing factors to the administration's forecast that the deficit will hit an all-time high of $1.75 trillion.

For 2010, when the administration is forecasting the deficit will decline to $1.17 trillion, the administration is forecasting that the rebounding economy will boost revenues by 8.9 percent. Based on the stronger growth, the administration is forecasting steadily declining deficits in coming years with the deficit dropping to $912 billion in 2011, $581 billion in 2012 and $533 billion in 2013.

5) Was that liberal enough for you?
By Clive Crook

It was nothing if not bold. Far from sliding away from his promise to reform healthcare, Obama affirmed it by proposing a $635 billion “downpayment” on the cost, financed about equally by high-income taxpayers and by squeezing Medicare payments to private providers. To announce an initiative of that scale and scope in the same budget that predicts a $1.75 trillion deficit in 2009, and a full-employment deficit of 3% of GDP even after ten years of brisk recovery and steady growth, took some nerve. Obama clearly has plenty. Left-leaning Democrats who have spent recent weeks moaning about centrist appointments and attempts at outreach to Republicans should hang their heads in shame. This is the budget they have been dreaming about for years.

I am not what you would call an instinctive leftist Democrat, yet so far as substance goes I like a great deal of what is there. The intelligence of this administration shines through at many points. My objections are mostly about the gaps.

I am for comprehensive healthcare reform. It would have been easier to do in a strong economy, of course–but Obama has the momentum to get this job done. It is urgent and has already waited too long, and so I applaud his determination to press on. It is good that he plans a big reserve to cover perhaps a third to a half of the likely eventual cost: better to leave that crucial line in the budget half-blank instead of entirely blank. I am also glad to see substantial cap-and-trade revenues make their first appearance. A carbon tax would be better, but still.

Obama and Peter Orszag seem intent on cleaning up the budget process, too, which is good. No more nonsense about expected revenues from the alternative minimum tax; no more off-budget accounting for military spending in Iraq and Afghanistan; and so on. Congratulations on switching from a current-law to a current-policy baseline. (Shame they had to go and spoil that by extending current spending in Iraq into the out years, just to get them to their phony $2 trillion of “savings”. Current policy on Iraq is not to stay there forever, any more than current policy on infrastructure is to spend at the stimulus-package rate for the next ten years.)

I find the out-year arithmetic a bit baffling. Granted, under present circumstances you really need more than one scenario to make sense of things. The economic assumptions in the budget are very optimistic–more optimistic (unless I’m reading the numbers wrong) than in the base-case stress test to be applied to the banks under the new financial stability plan. A drop in output of barely 1% this year (the stress test assumes a drop of 2% in the base case and 3.3% in the adverse case) is followed by growth of 3.2% in 2010 (as against 2.1% in the base-case stress test and 0.5% in the adverse case). If things go that well, halving the dollar deficit by 2013 then letting it stay at 3% of GDP indefinitely is not nearly ambitious enough. If things go badly, the goal of halving the dollar deficit by 2013 is rash.

The persistent full-employment deficit, and the fact that the costs of healthcare reform are at best only half accounted for, implies the need for further very large increases in taxes and/or cuts in spending once the economy has recovered. (This is to say nothing of the longer-term budget pressures, acknowledged by the administration but not reflected in this timescale.) What is the point of doing a ten-year budget if you are not going to lay those options out?

The budget expresses a very strong preference for piling all the costs on the rich–meaning households earning $250,000 a year or more. Not only does it reverse the Bush tax cuts for these high-earners, it also claws back some of the value of their tax deductions (in order to part-fund the health policy reserve). Limiting exemptions is an intelligent way to raise taxes. Lower rates and smaller exemptions is good tax policy. But higher rates and smaller deductions? That starts to look harsh. Spare a thought not for hedge-fund managers and bank CEOs, but for successful two-earner professional households, or owners of thriving small businesses, who have just watched their savings destroyed and their housing equity crushed, and who are now promised taxes higher than, not merely equal to, what they were paying before Bush. And here’s the rub: the budget still needs much more revenue. Extrapolating the political preferences in this blueprint, where is that revenue going to be found? If you can limit exemptions to a 28% rate, why not to 20%–or why not abolish them altogether?

In this “new era of responsibility”, as the budget document is called, it would have been better for Obama to signal that huge and desirable initiatives like universal health care will impose at least some costs on all Americans. It is literally impossible to make the rich pay for everything, and telling 95% of voters that they can have all these things at no cost is not good leadership. It has even less to do with shared responsibility.

For all I know, however, it might be good politics. We will have to see how that plays out. One thing, though: unless and until he adjusts the message of this budget, Obama’s claim to be centrist and pragmatic looks false. On the stimulus, he successfully characterised the Republicans as unconstructive doctrinaire rejectionists and himself as the pragmatic bipartisan leader. It wouldn’t have taken much in this budget to build on that success: on taxes, confining himself to reversing the Bush tax cuts, as he promised in the campaign, might have been enough. The surprise of the extra $30 billion a year in capped deductions was enough to make “redistribution” the big story. Time will tell if that was a mistake.

6) Obama's Strange Habit of Denying What He's Doing
By Mona Charen

It became clear back in October when the tsunami called the financial crisis washed over the United States (and the rest of the world), that the 2008 election might be a deeply consequential one. Until the economy tanked, the contest between Barack Obama and John McCain was about conventional Democrat/Republican disagreements. Even differences over the war in Iraq and foreign policy had seemed to contract with the continued progress of Gen. David Petraeus' strategy. Though Barack Obama had the most liberal voting record of any senator, his campaign gave no appearance of extremism. You might have had your private doubts, but on paper he was a gun-defending proponent of traditional marriage who simply wanted to make government work better. Pro-union? Sure. A down the line supporter of abortion rights? Yes. But an FDR-style statist with grand ambitions to alter the American political landscape? No.

Immediately after the election, Obama chose a number of centrist advisers and even kept Robert Gates at the Pentagon. Some of us wondered whether he was really planning to govern from the center. Left-wing bloggers began to shift uneasily in their chairs. But they can relax now. With his "stimulus" package and his quasi-State of the Union address this week, President Obama has made it abundantly clear that he intends to hustle this country into European nanny state socialism if he can (and just as fast as he can).

The president thinks he has the opening to do so because this contraction, a bust following a boom such as free markets have experienced since the dawn of trade, has been interpreted by the political and journalistic classes as an unprecedented collapse of capitalism. Obama, his serene, non-confrontational style notwithstanding, has been adept at fueling this panic. Nothing less than "catastrophe" loomed if we failed to pass the most gargantuan government spending orgy in history. (James Glassman offers a useful historical tour of previous attempts to stimulate the economy through spending in the March issue of Commentary magazine. They are ineffective.)

With the public suitably frightened and biddable, Obama now strides to the podium and begins prescribing particular government policies. (Have you noticed his troubling habit of denying what he is doing? For example, in his speech to Congress he said he asked for the stimulus bill "not because I believe in bigger government -- I don't." And in recommending a bailout of mortgage holders, he denied that any relief would go to "speculators" or those who "bought more house than they could afford" but that is exactly what the package will do.)

Suddenly, because the economy nose-dived in the middle of an election, we are living in Obamaland, where Barack's policy ideas are to be rushed into legislation. He thinks it would be a good idea for medical records to be digitized. Well, some in the field have questioned whether the investment in digital records would really be worth the cost. Perhaps the money could have been better spent elsewhere while the digitalization would have been spread out over more years. But so much for that debate. It's in the stimulus bill now.

Similarly, Obama has decided that we should spend billions more on preschool education because as he put it, "we know that the most formative learning comes in those first years of life." Well, that's actually doubtful. I refer the president to "The Myth of the First Three Years" by John Bruer. He argues persuasively that we have been misled about the importance of early learning; that the brain is actually quite plastic and lifelong learning is the norm. Other brain researchers agree. There is also controversy about even such gold-plated programs as Head Start.

But this is a strange way for a democracy to make policy. We shouldn't be in the position of trying to persuade the king or dictator. Policy shifts should be slow and gradual. One state should experiment with universal preschool and then compare results after say, five years, with other states that don't have it. That is how we successfully reformed welfare in the 1980s and 1990s. States like Wisconsin led the way with reforms that proved efficacious and then the nation followed. (That success, by the way, has been undermined by the stimulus law.)

Obama, like other liberals, wants to dispense with experimentation and debate (which he dismisses as the "the same old gridlock and partisan posturing") and sluice an enormous liberal/socialist wish list, to include single-payer health care, universal college education, and so-called green energy into law.

It will be difficult to resist this charismatic figure, but let's be clear about this: Though he denies what he is about, he is pulling the country dangerously toward a statist dead end.

7) Obama: The CliffsNotes Decoding the president.

Thirty-nine days, one press conference, one congressional address, and one budget into this presidency, Barack Obama is finding his groove. Out of the early chaos has emerged an administration with a set of talking points. The president is now honing these explanations of what went wrong, and how he will make it right.

Yet, as with any complex character, what Mr. Obama says isn't always what he means. (Even Melville would've found Washington a bit deep.) So here's a handy guide to the larger meaning beneath Mr. Obama's more frequent lines. Hang it on the fridge for easy reference.

- "We are not going to get relief by turning back to the very same policies that for the last eight years doubled the national debt and threw our economy into a tailspin." Translation: Blame Republicans, and tax cuts.

Mr. Obama inherited a deficit, though it wasn't caused by letting Americans keep more of their paychecks. It was caused by a need to rebuild the military to fight two wars (at least one of which he supported), and by that worn-out old idea known as spending, which lost the GOP its majority, and which Mr. Obama is now touting as economic elixir.

He also inherited a recession, though no economist with an IQ above 60 would suggest tax cuts caused the housing bubble. That came courtesy of easy money and loose lending standards, the latter of which Congress encouraged. Presumably, if tax cuts were responsible for the deficit and the recession, Mr. Obama wouldn't be constantly boasting that he wants tax cuts for 95% of Americans.

The wider goal is to vaguely link everything conservative with everything gone wrong, the better to present liberal ideas as a cure. Besides, it's useful to have a GOP to keep blaming, if the cure doesn't work.

- It's time to "make hard choices to bring our deficit down." Translation: Hello, higher taxes.

The thing about cutting deficits is that there are only two choices, one hard for politicians, the other hard for Americans. Government can reduce spending, or government can raise taxes. Mr. Obama made clear with yesterday's budget he has no intention of cutting back. So the hard part now falls to Americans, who are being told they have a patriotic duty to their children to pay more, and cover Washington's costs.

- "The only way to fully restore America's economic strength is to make the long-term investments that will lead to new jobs, new industries, and a renewed ability to compete with the rest of the world." Translation: Big government. President Obama loves the word "invest." (He used a form of it 11 times in his congressional address on Tuesday.) It sounds so modern and free market, and, most important, not like what it really is -- "spending." The administration is aware that the deficit is now the story. Thus Mr. Obama's suggestion that blowing out hundreds of billions for health care, energy and education somehow isn't Washington as usual -- but will instead yield American riches down the road.

Of course, no country has ever made good on such a promise. Washington, D.C.'s return on investment for investing $14,000 a year per student is a 40% high-school dropout rate. Government can create industries, though only those, like corn ethanol, that can't cut it without perpetual government aid. We're still waiting for Medicare to turn a profit. Nevertheless, investment is a catchy term. House Speaker Nancy Pelosi recently described her giant $410 billion 2009 omnibus spending bill as a similar "investment." Never mind that it contains 8,500 earmarks and the largest increase in discretionary spending since Jimmy Carter.

- "We need to make clean, renewable energy the profitable kind of energy." Translation: Your utility bills are going up.

Electricity from solar power costs, about, 15 cents per kilowatt hour. Electricity from natural gas costs, about, four cents. The only way to make solar power "profitable" is to further subsidize it down to the price of natural gas, or to make natural gas as expensive as solar. Mr. Obama's cap-and-trade plan does the latter, placing a tax on fossil fuels, which companies pass along to consumers. Sen. Jim Inhofe (R., Okla.) reminded Congress on Wednesday that its most recent climate bill, Lieberman-Warner, would have cost Americans $6.7 trillion. Fortunately for the president, he will not have to include that sum in his new, more transparent, budget.

- "If your family earns less than $250,000 a year, you will not see your taxes increased a single dime." Translation: For now.

The president's budget proves he intends to tax the top 2% of earners at effective rates much higher than under Bill Clinton. Still, even if he taxed 100% of this group's income, it wouldn't come close to covering his budget costs. Nor will winding down Iraq. If Mr. Obama is committed to his agenda, much less his deficit reduction, the middle class will have to give it up.

At least he didn't say "read my lips."

7a) Obama Budget Pushes Sweeping Change

President Barack Obama delivered a $3.6 trillion budget blueprint to Congress Thursday that aims to "break from a troubled past," with expanded government activism, tax increases on affluent families and businesses, and spending cuts targeted at those he says profited from "an era of profound irresponsibility."

The budget blueprint for fiscal year 2010 is one of the most ambitious policy prescriptions in decades, a reordering of the federal government to provide national health care, shift the energy economy away from oil and gas, and boost the federal commitment to education.

One war would end, as troops leave Iraq, while another would ramp up in Afghanistan. To fund it all, families earning over $250,000 and a variety of businesses will pay a steep price, but Mr. Obama implored Americans to own up to the mistakes of the past while accepting profound sacrifices.

"We need to be honest with ourselves about what costs are being racked up, because that's how we'll come to grips with the hard choices that lie ahead," Mr. Obama said Thursday morning. "And there are some hard choices that lie ahead."

The president blamed the nation's economic travails on the administration that preceded him and on a nation that lost its bearings. His budget plan projects a federal deficit of $1.75 trillion for 2009, or 12.3% of the gross domestic product, a level not seen since 1942 as the U.S. plunged into World War II.

"This crisis is neither the result of a normal turn of the business cycle nor an accident of history," the president states in an opening message of the 134-page document. "We arrived at this point as a result of an era of profound irresponsibility that engulfed both private and public institutions from some of our largest companies' executive suites to the seats of power in Washington, D.C."

By 2013, the deficit would drop to $533 billion but begin to climb from there again as the heart of the Baby Boom begins drawing Social Security and Medicare benefits.

The budget's introduction is likely to herald one of the fiercest political fights Washington has seen in years, waged on multiple fronts. Within minutes, Republicans were lambasting a document they called class warfare, designed to mire the nation in recession for years to come. Business lobbyists were girding for battle even before the budget's unveiling. Even Democrats are likely to blanch at cuts to agriculture and other programs that have been tried before – and have failed repeatedly.

The budget sets aside an additional $250 billion to complete the president's effort to rescue the financial markets and stabilize the banking sector. That would come on top of the $700 billion already allocated by Congress. And it is likely to grow. The budget makes clear that the reserve would be used to leverage the purchase of toxic assets weighing down the banking sector's books, $750 billion in asset purchases overall. That could mean a doubling of the original bailout in the end.

The Obama Budget

The Defense Department would see a $20.4 billion boost in 2010, a 4% increase from this year, slowing its growth from the Bush years but securing personnel increases for the Army and Marine Corps. Mr. Obama will request an additional $75.5 billion for the wars in Iraq and Afghanistan for the rest of 2009 and another $130 billion for 2010, as he withdraws most combat troops from Iraq over 19 months but sends many of them to Afghanistan.

In one of the budget's most ambitious proposals, the president plans to cap the emissions of greenhouse gases, forcing polluters to purchase permits for emissions that would be slowly brought down to 14% below 2005 levels by 2020 and 83% below 2005 levels by 2050. The sale of those permits, beginning in 2012, would reap $646 billion through 2019. Of those revenues, $525.7 billion would be devoted to extending Mr. Obama's signature "Making Work Pay" $800 tax credit for working couples. Another $120 billion would go to clean energy technology.

He acknowledged his $630 billion fund for a national health insurance program will not be enough to ensure access to health care for all Americans, but he said it will be a start.

Budget Stepping Stones

See the steps by which the federal budget will be finalized in the coming months.
To finance his proposals, the president has clearly chosen winners and losers -- with the affluent heading the list of losers. In populist tones that reflect an anger he notably avoided on the campaign trail, Mr. Obama wrote, "Prudent investments in education, clean energy, health care, and infrastructure were sacrificed for huge tax cuts for the wealthy and well-connected. In the face of these trade-offs, Washington has ignored the squeeze on middle-class families that is making it harder for them to get ahead… There's nothing wrong with making money, but there is something wrong when we allow the playing field to be tilted so far in the favor of so few."

In that sense, the budget is payback. As expected, taxes will rise for singles earning $200,000 and couples earning $250,000, beginning in 2011 -- for a total windfall of $656 billion over 10 years. Income tax hikes would raise $339 billion alone. Limits on personal exemptions and itemized deductions would bring in another $180 billion. Higher capital gains rates would bring in $118 billion. The estate tax, scheduled to be repealed next year, would instead be preserved, with the value of estates over $3.5 million -- $7 million for couples -- taxed at 45%.

Businesses would be hit, too. The budget envisions reaping $210 billion over the next decade by limiting the ability of U.S.-based multinational companies to shield overseas profits from taxation. Another $24 billion would come from hedge fund and private equity managers, whose income would be taxed at income tax rates, not capital gains rates. Oil and gas companies would be hit particularly hard, with the repeal of multiple tax credits and deductions.

The federal government would take over most student lending. Managed care companies would lose their subsidies for offering Medicare plans. Farmers with operating incomes over $500,000 would see their farm subsidies phased out. And cotton storage would no longer be financed by the federal government.

"There are times where you can afford to redecorate your house, and there are times where you need to focus on rebuilding its foundation," Mr. Obama said as he unveiled his plan. "Today we have to focus on foundations."

8) Rogers Doesn't Mince Words About the Crisis
By Maria Bartiromo

In 1970 a young Wall Streeter named Jim Rogers hooked up with George Soros to start the legendary Quantum Fund. The ensuing decades have seen Rogers build an iconoclastic career as an author, adventurer, and creator of the Rogers International Commodities Index. And throughout, Rogers—now based in Singapore—has remained an outspoken global investor. Today is no different. He has harsh words for former Fed Chairman Alan Greenspan, suggests President Barack Obama and his economic team are not up to the task, and thinks tough love is the answer for America.

What do you think of the government's response to the economic crisis?

JIM ROGERS Terrible. They're making it worse. It's pretty embarrassing for President Obama, who doesn't seem to have a clue what's going on—which would make sense from his background. And he has hired people who are part of the problem. [Treasury Secretary Tim] Geithner was head of the New York Fed, which was supposedly in charge of Wall Street and the banks more than anybody else. And as you remember, [Obama's chief economic adviser, Larry] Summers helped bail out Long-Term Capital Management years ago. These are people who think the only solution is to save their friends on Wall Street rather than to save 300 million Americans.

So what should they be doing?

What would I like to see happen? I'd like to see them let these people go bankrupt, let the bankrupt go bankrupt, stop bailing them out. There are plenty of banks in America that saw this coming, that kept their powder dry and have been waiting for the opportunity to go in and take over the assets of the incompetent. Likewise, many, many homeowners didn't go out and buy five homes with no income. Many homeowners have been waiting for this, and now all of a sudden the government is saying: "Well, too bad for you. We don't care if you did it right or not, we're going to bail out the 100,000 or 200,000 who did it wrong." I mean, this is outrageous economics, and it's terrible morality.

You have said Bear Stearns and Lehman (LEHMQ) would still be around if Greenspan hadn't bailed out Long-Term Capital Management in 1998. Can you explain?

Well, if Long-Term Capital Management had been allowed to fail, Lehman and the rest of them would've lost a huge amount of money, their capital would've been impaired, and it would've put a terrible crimp on Wall Street. It would've slowed them down for years. Instead of losing capital, losing assets, and losing incompetent people, they hired more incompetent people.

Should AIG (AIG) have been allowed to fail, too?

First of all, banks and investment banks and insurance companies have been failing for hundreds of years. Yes, we would've had a terrible two years. But you're dragging out the pain. We had 10 years of the worst credit excesses in world history. You don't wipe out something like that in six months or a year by saying: "Oh, now let's wake up and start over again."

What about Citigroup (C)? What about the car companies?

They should be allowed to go bankrupt. Why should American taxpayers put up billions to save a few car companies? They made the mistakes! We didn't make the mistakes! I'm sure they'll give them the money, but I'm telling you, it's a mistake. It's a horrible mistake.

I totally understand what you're saying, but the banks are under massive pressure.

They all took huge, huge profits. Who was the head of Citigroup? Chuck Prince? I mean, how many hundreds of millions of dollars did Prince take out of the company? How many hundreds of millions of dollars did other Citibank execs take out of the company? Wall Street has paid something like $40 billion or $50 billion in bonuses in the past decade. Who was that guy who was the head of Merrill Lynch (MERR)?

Stan O'Neal?

Right, Stan O'Neal. He got $150 million for leaving, even though he ruined the company. Look at the guy at Fannie Mae (FNM), Franklin Raines. He did worse accounting than Enron. Fannie Mae and Freddie Mac (FRE) alone did nothing but pure fraudulent accounting year after year, and yet that guy's walking around with millions of dollars. What the hell kind of system is this?

Are you worried the economic crisis will lead to political turmoil in China and elsewhere?

I absolutely am. We're going to have social unrest in much of the world. America won't be immune.

What does all this mean from an investment standpoint?

Always in the past, when people have printed huge amounts of money or spent money they didn't have, it has led to higher inflation and higher prices. In my view, that's certainly going to happen again this time. Oil prices are down at the moment, but that's temporary. And you're going to see higher prices, especially of commodities, because the fundamentals of commodities are enhanced by what's happening.

Which commodities are worth buying or holding on to?

I recently bought more of all of them. But I really think agriculture is going to be the best place to be. Agriculture's been a horrible business for 30 years. For decades the money shufflers, the paper shufflers, have been the captains of the universe. That is now changing. The people who produce real things [will be on top]. You're going to see stockbrokers driving taxis. The smart ones will learn to drive tractors, because they'll be working for the farmers. It's going to be the 29-year-old farmers who have the Lamborghinis. So you should find yourself a nice farmer and hook up with him or her, because that's where the money's going to be in the next couple of decades.

9) Obama throws Durban II under the bus - finally
By Rick Moran

The UN Conference on racism is a thinly disguised conclave that will bash Israel and the US. That the Obama administration insisted on taking a part in planning this insult to both countries revealed either a naivete breathtaking in its scope or just plain idiocy.

Now, after being a partner to the likes of Libya, Syria, and Russia in mapping out the conference's goals and objectives, the Obama administration has decided that this racist gathering may not be the benign gathering they were hoping for:

White House aides told Jewish leaders on a conference call today that the United States will boycott the United Nations' World Conference on Racism over hostility to Israel in draft documents prepared for the April conference.

The aides, including an advisor to U.N. Ambassador Susan Rice, Jennifer Simon, and longtime Obama advisor Samantha Power, said the administration will not participate in further negotiations on the current text or participate in a conference based on the text, sources on the call said.

They left open the option of re-engaging on a "much shorter, much different text," a source said.

The draft outcome document, typically negotiated in advance and available here (.pdf), contains sharp and specific criticism of Israel for its treatment of the Palestinians, and Western European nations and Canada have also signaled that they may boycott the conference in Geneva.

Too late, Mr. President. Your imprimatur is all over that draft. What possessed these stumblebums to make a huge deal out of attending planning sessions and then dropping out when everyone on the planet knew what that draft was going to say two years ago is a mystery? Did they think no one would notice.

Keystone cops diplomacy.

10) The Obama Steamroller: Is Resistance Futile?
By Richard Baehr

The political reality at the moment is that regardless of the wisdom or foolishness of what is or will be proposed by the Obama administration or Congress in the next two years, it will pass. This is the consequence for the GOP of losing elections and losing them big in both 2006 and 2008. The Democratic majority in the House is 257-178. After the 2004 elections, the GOP held a 232-203 edge, so nearly a quarter of GOP held seats are gone.

There is no power of filibuster for the minority in the House, and there won't be any key votes where 40 blue dog Democrats align with the Republicans to stop some piece of legislation from being passed. In the Senate, the Coleman Franken race will likely wind up with Franken being seated, giving the Democrats a 59-41 Senate majority, one seat from the 60 seat filibuster proof majority. After the 2004 elections, the GOP held a 55-45 edge in the Senate, so just over a quarter of the GOP seats are now gone.

The Coleman Franken result is not certain, but Coleman's odds of prevailing are long. In the first critical weeks of the recount he was out-lawyered and out-hustled by the Franken team, which seemed to know better than the Coleman team where they could find additional votes, and insure they were counted. With 59 Senate seats the Democrats will have clear sailing on all votes by turning just one Republican on a filibuster vote.

With Arlen Spector facing re-election in an increasingly Democratic leaning state in 2010, the Democrats have their most likely vote. Given union influence in the Keystone state, will Spector stand with other Republicans and oppose card check? If Spector does not fall in line with the Obama steamroller, then Obama can pick off one of Maine's two Republican Senators. He won the votes of both Olympia Snowe and Susan Collins, as well as Spector for the stimulus bill.

The Republicans have been unlucky, particularly in Senate races recently, but part of the damage was self-inflicted. Would a shift of campaign resources in 2006 have saved the seats of George Allen and Conrad Burns, both of whom lost very narrowly? Might a better use of resources saved Coleman and Ted Stevens last year?

Were the GOP at 44 or 45 in the Senate, they would have a real shot at sustaining a filibuster, and slowing the Obama team's determined effort to greatly expand the role of government. That effort amounts to nothing less than a sustained attack on the free enterprise system in the country, penalizing its winners, and discouraging entrepreneurship. Is it at all surprising that not a single corporate executive found a home among the upper levels of the Obama White House or Cabinet? Obama stated several times during the long campaign that even if some of his policies did not expand the pie, that they were needed for fairness. In essence, this is an administration committed to leveling, that trusts that only government can accomplish this.

The Obama team is relatively honest about the size of the ballooning federal deficit this year and next, due both to a shrinking economy (reduced revenues, and higher social service expenditures), and the new stimulus package and other rescue efforts (TARP 1, TARP II, TARP III?). It is dishonest, however, about where the deficit will likely be after that. If Democrats remain in control of the White House and retain big majorities in the Congress, few or none of the new programs established by the Stimulus bill will be allowed to expire. The budget numbers assume they will all expire. The $800 billion stimulus cost over ten years, becomes more than $3 trillion in ten years, if the new spending becomes a permanent part of the federal spending baseline. This year, total federal spending will rise to around $4 trillion, over 25% of the GDP, for the first time since World War 2.

Obama succeeded in getting elected, in large part by talking down the economy during the campaign (and hence the need for change). Until the financial market meltdown in September, the damage to the economy was limited mostly to a sector of the housing market. Obama was able to get the stimulus bill passed by talking the economy down some more; catastrophe was the supposed alternative to Nancy Pelosi's vision for required federal spending. Is it any wonder that now consumers are holding onto their money and de-leveraging, creating falling levels of activity in most sectors of the economy? And of course, this will require stimulus II later in the year.

Each day seems to bring new federal spending initiatives or plans for higher taxes on corporations and the well off. $660 billion has been announced for new spending on health care, half "financed" with new taxes (only a down-payment for what is really needed, according to the Obama team!), and cap and trade (higher taxes) for carbon emissions will come later in the year.

Addressing the economic slowdown is a bit of a smokescreen for what is really going on, I think. Yes, the "best and brightest" in the Obama team are trying to stabilize the banking system and get credit flowing. But the Obama team understands the political power they now have. And they won't waste it. So they will steamroller their way to victory on every left wing agenda item that is in their playbook -- from national health care, to global warming to card check.

If Obama wanted to stabilize the economy, create new jobs, and preserve others, his plans for health care and energy might be deferred, as well as some of the pro-union legislation and executive orders. For many of these initiatives will prove to be job killers, and counter some of the positive impact that may come from the stimulus package . The stimulus package will not save or create 3.5 or 4 million jobs, and most of the jobs that are saved will be public sector jobs, an area of the economy with virtually full employment. The jobs created will likely be union jobs, which means higher wages and higher costs for both companies and government. In the private sector, this will mean fewer employees over time.

Above all, the Obama team wants to satisfy all the constituency groups that helped elect Democrats -- unions (SEIU), trial lawyers, unions (NEA), environmental groups, unions (AFSCME), ACORN, racial and ethnic minorities, and did I mention unions? The enemies of the left -- drug companies, insurance companies, high earning corporate and banking employees, coal companies, oil companies, those with incomes over $250,000 (or maybe a bit less than that), entrepreneurs, doctors, companies with profitable foreign operations -- all will feel the pain, in large part through higher taxes, estimated at a trillion (so far).

Obama means to create a permanent Democratic majority, and he is well on his way to doing it. One of the problems of being in the minority in Congress, especially a small and weak minority, is that it is not much fun. This is why there are usually more retirements among the party in the minority. Open seats are the easiest to be turned, and so GOP retirements helped solidify Democratic gains in 2008, and may do so again in 2010.

In the Senate, where the Democrats are close to a filibuster proof majority today, Republicans are offering more bounties with open seats in 2010 in Florida, Ohio, Missouri, New Hampshire, Kansas, and maybe Texas. Throw in a few vulnerable incumbents in Kentucky, North Carolina, and Pennsylvania, and it is not hard to see the Democrats expanding their majority in 2010, rather than seeing a GOP bounce-back , as usually occurs after two straight poundings and an off year election with a new party in control of the White House.

The GOP may do better in the House, but is unlikely to get anywhere near winning back control of that body in 2010. In the House, the power of the majority, especially if there is strong party discipline, is near total, even with small majorities. The GOP's best shot may be to win control of some Governor's races, and state legislative bodies in 2010, since unhappiness with the economy may hurt the incumbent party in power at this level. This can help the GOP with redistricting for Congress after the 2010 census, assuming Rahm Emanuel surprises us, and decides to play fair.

And then there is Obama. The President is a gifted politician and an even better candidate. And he will remain in candidate mode for all of the next four years. It is what he does best. So he will appear in swing states for announcements and speeches, as he has done already in Colorado, Virginia, Ohio, Florida, Indiana and Arizona. Expect to see him in North Carolina, Nevada, New Mexico, Iowa, Wisconsin, Pennsylvania, Michigan, New Hampshire and Minnesota too. I do not expect to see him in New York or California much, except to raise money. The wealthy who deliriously write checks for Obama and the Democrats remind me of the character played by Kevin Bacon in the movie Animal House. As he is being paddled on the behind on his fraternity's pledge initiation night, he keeps shouting out: "Thank you sir, may I have another?"

Americans may grow weary of all the new programs, spending and elevated deficits. And most Americans do not hate the wealthy, even with all the populist bashing of bankers and corporate executives now going on. Obama's team has no problem per se with wealthy folks of course -- they like and depend on Hollywood liberals, K street lobbyists, trial lawyers, and union executives. Obama's team will counter any criticism of its burgeoning deficit by saying: "We inherited the problem, we inherited the problem".

Over time, the refrain may wear thin, but no one should assume this is or will be a fair fight in terms of the power of the messaging, and the messengers. By 2012, the GDP will likely be growing again, and Obama will take credit for the magnificent turnaround. Obama will be a strong favorite for re-election, given his personal likeability and a campaign war chest that will almost certainly be bigger than the $800 million he spent in 2008.

America may also not be recognizable by then, and even less so by 2016, with a greatly expanded public sector share of the economy -- maybe 30% on the federal level and close to 50% with states and localities added in. The federal bureaucracy will have been inoculated into every facet of the economy. There will be much higher tax rates on success (whether it be earned or investment income) and with this, the number of risk-takers and entrepreneurs will drop rapidly.

Obama will have succeeded in turning the US into a more European like economy, with much slower growth prospects, crushing deficits, and increased entitlement spending as far as the eye can see (and neither more nor less manmade global warming, regardless of what the Congress and Obama do in this area). And of course, there will be the need for ever higher tax rates on the diminishing share of the population who pay income taxes, and for ever larger amounts of debt to be financed mostly by foreigners.

Europe will have arrived. Or would it better to say of the increasingly foreign owned, debt laden nation, "Don't cry for me, Argentina"?

11) Iran offers Obama nuclear negotiations – with a catch

The Friday sermon delivered by former Iranian president Akbar Hashemi Rasanjani in Tehran on Feb. 27 embodied an incentive and a catch for US president Barack Obama, condemned Israel and threatened Russia.

He said: "…we don't make false promises. Therefore I declare that Iran's nuclear plan is not to build weapons… and we are ready to prove it in negotiations." Indicating Israel, he said: "'You are planting a false notion in public minds." Addressing the Russians, he said bluntly that "…even if they don’t' deal with the [Bushehr] project, we can finish it on our own."

The Iranian leader closest to supreme ruler Ayatollah Ali Khameni had in fact issued Tehran's first explicit invitation to Obama to open direct negotiations which promised an Iranian pledge not to build a nuclear weapon.

That was the incentive. But the catch implicit in his message was picked up by Iranian experts: He was saying in typical Rafsanjani shorthand that Tehran was willing to kick off the bargaining with a pledge not to develop nuclear weapons, provided Washington agreed to the Islamic Republic retaining the capability to do so.

This formula would reduce the Tehran-Washington talks to haggling over where to place the cutoff point in the Iranian program.

The Iranians would demand to be allowed leeway for completing a bomb within four to six months; the Americans would likely insist on halting the program two to-three years short of a military capability, and the negotiations would end in a compromise.

Rafsanjani employed this verbal tactic on the strength of the information about the Obama administration's position gained from informal preliminary Iranian-US contacts in the last two months. Tehran believes the US president needs Iran's help in the Afghan War and would therefore be flexible in his dialogue with Iran. They calculate that he would go an extra mile for the sake of showing he had managed to arrest the Islamic Republic's march toward a nuclear weapon.

Israel is adamantly opposed to this formula, certain Tehran will use it as a blind to forge ahead secretly until its clandestine bomb and warhead projects are close to assembly at short notice.

Thursday, Feb. 25, outgoing Israeli prime minister Ehud Olmert commented on the launch of Iran's first nuclear reactor at Bushehr: "We have deployed enormous efforts to reinforce our deterrence capacity. Israel will be able to defend itself …against all threats, against all enemies. I cannot say more but believe me, I know what I'm talking about."

Without referring to Israel by name, Rafsanjani responded by saying: "You are planting a false notion in public minds," in reference to the "unthinking words of the main enemies of the Islamic revolution."

But Russia, which had delayed completing the Bushehr reactor for 10 years on one pretext or another, was warned specifically: "The Russians and others should know that …even if they don't deal with the project, we can complete it on our own. But they must fulfill their promise."

12) Obama's "Hollywood diplomacy" launches dialogue with Tehran

Thirty-eight years ago, a ping pong team sent by US president Richard Nixon to Beijing opened the door to Communist China. February 27, 2009, president Barack Obama launched his bid for dialogue with Iran with an Academy of Motion Pictures, Arts and Sciences delegation from Hollywood. It is led by the actress Annette Bening, AMPAS president Sid Ganis and his predecessor Frank Pierson who flew in just after the Oscar award ceremony. Visiting in the framework of "US-Iranian culture exchanges," they will hold talks in Tehran Saturday and Sunday.

Washington sources note this visit coincides with three relevant events:

1. Friday, Obama announce that the bulk of US forces will be out of Iraq by Aug. 2010 leaving only 50,000 in place. This meets Tehran's objections to the presence of large-scale US forces in Iraq.

2. He calmed Iran's fears on another score when he stated in a PBS interview: "One of the things that I think we have to communicate in Afghanistan is that we have no interest or aspiration to be there over the long term."

3. The US president had his reply from Tehran in the former Iranian president Akbar Hashemi Rasanjani's Friday sermon, when he extended his government's first overt invitation for talks on the nuclear issue: "…we don't make false promises," said the Iranian strongman. "Therefore I declare that Iran's nuclear plan is not to build weapons …and we are ready to prove it in negotiations."