Have The Walls Begun To "Come a-Tumblin Down?"

Sent to me recently by a friend and memo reader. (See 1 below.)

Did Obama prove inept when he handed Pelosi the job of crafting his stimulus bill or did Obama want to pay off various consituents and knew Pelosi would do the job?

Will Obama prove equally adept or inept in negotiations with Iran, N Korea, Russia, Pakistan etc.? Can Obama finess going back on his pledge with respect to lobbyists and ethical standards or was that all part of a campaign strategy to get elected by serving up what the ublic wanted to hear?

I have mis-givings, not over Obama's ability to sell the gullible but on his ability to implement a determined domestic course that will be constructive and a foreign policy that will be protective of our nation's interests. (See 2 below.)

So Does Caroline Glick. (See 2a below.)

Are we hearing echos - you are 'either for me or agin me?' (See 3 below.)

Unimpressed! (See 4 below.)

Stimulus folly? You decide. (See 5 below.)

Will Obama prove to be a control freak like Carter? If not why the politicizing of the Census? (See 6 and 6a below.)

Placing faith in talk can cut two ways. (See 7 below.)

Lets hear from Tom Sowell and The Investor's Business Daily. (See 8 and 8a below.)

I see mounting evidence of the boomerang effect of Obama's inexperience and failure to be vetted. In learning the difference between campaigning and governance, our young and inexperienced president is making a host of 'freshman' errors which could seriously haunt him as he moves from his bumbling domestic efforts to diplomacy matters. I believe he mistakenly turned his stimulus program over to Pelosi and she promptly rolled him. His talk of bi-partisanship was naive and has proven to be empty based on his recent "testiness" when challenged.

Granted "Christ" himself probably could not have won on the Republican ticket this past election but the pass given Obama during the campaign, in my view, is beginning to show.

Have the walls begun to "come a-tumblin down?" Time will tell. (See 9 below.)

Dick


1)Norman Mattoon Thomas (November 20, 1884 – December 19, 1968) was a leading American socialist, pacifist, and six-time presidential candidate of the Socialist Party of America. Running as The Socialist Party's candidate for President of the US, Norman Thomas, said this in a 1944 speech:

"The American people will never knowingly adopt socialism. But, under the name of 'liberalism,' they will adopt every fragment of the socialist program, until one day America will be a socialist nation, without knowing how it happened." He went on to say: "I no longer need to run as a Presidential Candidate for the Socialist Party. The Democrat Party has adopted our platform."

2) Washington, Moscow at Cross-purposes on Nuclear Iran



While US president Barack Obama told the media early Tuesday, Feb. 10, that the US would pursue direct talks with Iran, an official Russian spokesman said his government would complete Iran's nuclear reactor at Bushehr within three months. Obama is planning dialogue with Tehran beginning in late June.

Mahmoud Ahmadinejad replied by welcoming talks based on mutual respect provided the changes in Washington were "fundamental and not just tactical."

The three statements hung over Israel's general election Tuesday, as 5.2 million eligible voters turned out to choose a prime minister capable of military action to halt Iran race toward a nuclear bomb.

Despite the talk in Washington and Moscow of eased strains in their relations, the Kremlin has clearly come down on the side of giving the Iranian leaders a strong hand in their coming dialogue with the Obama administration. They will come to the table without giving up uranium enrichment in the face of UN sanctions, with long-range ballistic missiles capable of placing a satellite in orbit and having acquired a key element for its nuclear program, a functioning reactor at Bushehr capable of producing processed plutonium.

Talking to reporters, early Tuesday, President Obama said: "In the coming months, we will be looking for openings… to start sitting across the table face to face" with Iran. He stressed that the administration has deep concerns about Iranian policy, citing Iran's support for Hizballah and Hamas, its "bellicose" language to Israel and its pursuit of a nuclear weapon.

The US must use all the tools at its disposal in dealing with Iran and that "includes diplomacy," he said.

Iran must understand the U.S. finds Iranian actions such as funding of terrorist groups unacceptable, said Obama. But he added that "there's a possibility, at least, of a relationship of mutual respect and progress."


Washington sources add: Following internal White House deliberations, Obama decided his talks with Iranian leaders would not begin before late June, by which time the results of Iran's presidential election earlier that month would be known. The incumbent Mahmoud Ahmadinejad will be running for a second term against the reformist leader Muhammed Khatami.


A few hours before Obama spoke, Alexander Maryasov, director of one of the Russian foreign ministry's Asia departments, said: "I want to stress once again the readiness of the Russian side to complete the construction of the Bushehr nuclear plant within the set timeframe. I believe that after the shipment of nuclear fuel for the electric power plant took place last month, the Iranian side should have no doubts on this score."

Military sources disclose Russia delivered 82 metric tons of nuclear fuel to power the plant in the second half of January. This is enough both to fuel the manufacture of electricity and of plutonium.

Iran's Atomic Energy Organization said earlier that the Bushehr plant was 94.8% complete. Foreign minister Manouchehr Mottaki said it was due to be operational in the first half of 2009.

2a) Obama's New World Order and Israel
By Caroline B. Glick

As Israel goes to the polls today, the world around us is quickly changing in new and distressing ways. The challenges the international system will present the government The Jewish state elects will be harsher, more complicated and more dangerous than the ones its predecessors have faced.

Bluntly stated, the world that will challenge the next government will be one characterized by the end of US global predominance. In just a few short weeks, the new administration of President Barack Obama has managed to weaken the perception of American power and embolden US adversaries throughout the world.

In the late stages of the presidential race, now Vice President Joseph Biden warned us that this would happen. In a speech before supporters he said, "It will not be six months before the world tests Barack Obama... [We're] gonna have an international crisis, a generated crisis, to test the mettle of this guy... They may emanate from the Middle East. They may emanate from the subcontinent. They may emanate from Russia's newly emboldened position."

As it happens, Biden's warning had two inaccuracies. Rather than six months, America's adversaries began testing Obama's mettle within weeks. And instead of one crisis from Russia, the Middle East or the Indian subcontinent, Obama has faced and failed to meet "generated crises" from all three.


TAKE RUSSIA for example. Since coming into office, Obama has repeatedly tried to build an alliance with the "newly emboldened" Russian bear. A week after entering office, he announced that he hoped to negotiate a nuclear disarmament agreement with Russia that would reduce the US's nuclear stockpiles by 80 percent. At a security conference in Munich last weekend, Biden stated that the administration wishes to push the "reset button" on its relationship with Russia and be friends.

Responding to these American signals, the Russians proceeded to humiliate Washington. Last week President Dmitry Medvedev hosted Kyrgyzstan's President Kurmanbak Bakiyev in Moscow. After their meeting the two announced that Russia will give the former Soviet republic $2 billion in loans and assistance and that Kyrgyzstan will close the US Air Force base at Manas which serves American forces in Afghanistan.

After cutting off one of the US's major supply routes for its forces in Afghanistan, Russia agreed to permit the US to resume its shipment of nonlethal military supplies for Afghanistan through Russian territory. Those shipments were suspended last summer by NATO in retaliation for Russia's invasion of Georgia. And now they are being resumed - on Moscow's terms. The US, for its part, couldn't be more grateful to Moscow for lending a helping hand.


THE US ITSELF WOULDN'T have found itself needing Russian supply lines had the situation in nuclear-armed Pakistan not deteriorated as it has in recent months. Much of the situation in Pakistan today is due to the Bush administration's incompetent bungling of US relations with the failed state. For years the US gave tens of billions of dollars to the military government of Gen. Pervez Musharraf. Musharraf in turn used the money to build up Pakistan's military presence along the border with India, while allowing al-Qaida and the Taliban to relocate their headquarters in Pakistan after being ousted from Afghanistan by US forces.

Vigilant in maintaining his power, for years Musharraf repressed all voices calling for democratic transformation. For their part democrats in places like Pakistan's Supreme Court were not friends of the West. They did not oppose the Taliban and al-Qaida. Rather their enemies were Musharraf and the US which kept him in power.

Responding to a sudden urge to encourage the forces of democracy in Pakistan, while advocating their abandonment throughout the Arab world, secretary of state Condoleezza Rice compelled Musharraf first to resign as head of the Pakistani military - thus ending his control over the country's jihadist ISI intelligence services and over the pro-jihadist military. Then she forced him to accept open elections, which unsurprisingly, he lost.

The democrats who replaced him had absolutely no influence over either the ISI or the military and realized that their power and their very lives were in the Taliban's hands. Consequently, since Pakistan's elections last year, the new government has surrendered larger and larger areas of the country to the Taliban. Indeed, today the Taliban either directly control or are fighting for control over the majority of Pakistani territory. Moreover, the Taliban and al-Qaida have intensified their war in Afghanistan and are making significant gains in that country as well.

This would have been a difficult situation for the US to contend with no matter who replaced George W. Bush in the Oval Office. Unfortunately, due to Obama's stridently anti-Pakistani rhetoric throughout the campaign - rhetoric untethered to any coherent strategy for dealing with Pakistan - the Pakistanis no doubt felt the need to test his mettle as quickly as possible.

For his part, Obama gave them good reason to believe he could be intimidated. By letting it be known that he intended for his special envoy to the region Richard Holbrook's job to include responsibility for pressuring US ally India to reach a peace agreement with Pakistan over the disputed Jammu and Kashmir province in spite of clear proof that Pakistani intelligence was the mastermind of the December terror attacks in Mumbai, Obama showed that he was willing to defend Pakistan's "honor" and so accept its continued bad behavior.

LAST FRIDAY, the Pakistanis tested Obama. The Supreme Court freed Pakistan's Dr. Strangelove - A.Q. Khan - from the house arrest he had been under since his nuclear proliferation racket was exposed by the Libyans in 2004. Through his nuclear proliferation activities, Khan is not only the father of Pakistan's nuclear arsenal - but of North Korea's and Iran's as well.

Khan's release casts a dark shadow on Obama's plan to dismantle much of America's nuclear arsenal, because with him free, the prospect that Pakistan is back in the proliferation business becomes quite real. Already on Sunday Khan announced his plan to travel abroad immediately. For its part, the court in Islamabad specifically stated that Khan is free to resume his "scientific research."

Pakistan's open contempt for the US and its weakness in the face of the Taliban's takeover of the country has direct consequences for the US's mission in Afghanistan - and for its new dependence on Russia. This week the Taliban bombed a bridge on the Khyber Pass along the Pakistani border with Afghanistan that served as a supply line to US forces in Afghanistan. As US Brig.-Gen. James McConville stated in Kabul, the latest attack simply underlines how important it was for the US to resume its shipments through Russia.

MANY HAVE POINTED to Pakistan as an example of why Israel and the West have no reason to be concerned about Iran acquiring nuclear arms. To date, they claim, Pakistan has not used its nuclear arms, and indeed has been deterred by both India and the West from doing so.

While it is true that Pakistan has yet to use its nuclear arsenal, it is also true that since its initial nuclear test in 1998, Pakistan has twice brought the subcontinent to the brink of nuclear war. In both 1999 and 2002, Pakistan provoked India into a nuclear standoff.

Moreover, due to its nuclear arsenal, Pakistan successfully deterred the US from taking action against it after the September 11 attacks showed that al-Qaida and the Taliban owed their existence to Pakistan's ISI. Although Pakistan's government is not an Islamic revolutionary one like Iran's, the fact is that since it became a nuclear power, Pakistan has moved away from the West, not toward it. Indeed, its nuclear deterrent against India - and the West - has empowered and strengthened the jihadists and brought them ever closer to taking over the regime in a seamless power grab.

Far from arguing against preventing Iran from acquiring nuclear weapons, the Pakistani precedent argues for taking every possible action to prevent Iran from acquiring them. After all, unlike the situation in Pakistan, Iran's regime is already controlled by jihadist revolutionaries. And like their counterparts in Pakistan, these forces will be strengthened, not weakened in the event that Iran acquires nuclear weapons.

Indeed, since Obama came into office waving an enormous olive branch in Teheran's direction, the regime has become more outspoken in its hostility toward the US. It has humiliated Washington by refusing visas to America's women's badminton team to play their Iranian counterparts. It has announced it will only agree to direct talks with Washington if it pulls US forces out of the Middle East, abandons Israel and does nothing to prevent Iran from acquiring nuclear weapons. It has rudely blackballed US representatives who are Jewish, like House Foreign Affairs Committee chairman Howard Berman, at international conclaves. And it has announced that it will refuse to deal with Obama's suggested envoy to Iran, Dennis Ross, who is also a Jew. In all of its actions, Iran has gone out of its way to embarrass Obama and humiliate America. And Obama, for his part, has continued to embrace Teheran as his most sought-after negotiating partner.


MOVING AHEAD, the question of how our next government should handle America's apparent decision to turn its back on its traditional role as freedom's global defender becomes the most pressing concern. It is clear that we will need to embrace the burden of our own defense and stop expecting to receive much from our alliance with the US. But it is also clear that we will need a new strategy for dealing with the US itself.

In formulating that policy, the next government should draw lessons from fellow US-ally India. Once it became clear to the Indians that the Obama administration intended to treat them as the strategic and moral equivalent of Pakistan, they struck back hard. When the administration signaled that it would agree to Pakistan's assertion that its problems with the Taliban were linked to India's refusal to cede Jammu and Kashmir to Islamabad, New Delhi essentially told Washington to get lost.

In an interview on Indian television last week, ahead of Holbrook's first visit to the area this week, India's National Security Adviser M.K. Narayanan said that Obama would be "barking up the wrong tree" if he were to subscribe to such views. He added that India would be unwilling to discuss the issue of Jammu and Kashmir with Holbrook and so compelled Obama to remove the issue from Holbrook's portfolio.

At the same time, the Indian government released a dossier substantiating its claim that the December attacks on Mumbai were planned in jihadist terror training camps in Pakistan and enjoyed the support of the ISI. Moreover, in response to Khan's release from house arrest on Friday, India called for the international community to list Pakistan as a terror state.

In acting as it has, India has made two things clear to the Obama administration. First, it will not allow Washington to appease Pakistan at its expense. Second, it will do whatever it believes is necessary to secure its own interests both diplomatically and militarily.

A sound example for the next government to follow.

3) From hope to doomsday
By David Keene

The way things are going, we can expect to wake up one morning to find the president of the United States wandering the streets of Washington in sack cloth with a placard predicting, well, the end.

He’s already given us everything but the exact date on which the world will end as he leads a chorus of his supporters demanding that Congress adopt his every nostrum lest our economic crisis transform itself into a “catastrophe,” as Mr. Obama put it, or “absolute collapse,” as Rep. David Obey (D-Wis.) warned, or even “Armageddon,” in the words of Democratic Sen. Claire McCaskill (Mo.).



It’s almost as if our new “transformational” president is himself being transformed into a character from a New Yorker cartoon or, worse, into Jimmy Carter. The optimistic campaign has been replaced almost overnight by a sort of whining pessimism that is, well, unbecoming of a president. Obama keeps reminding those who disagree with him that it was he who won in November. This political defeat has convinced the president that those who oppose his views should simply abandon their views and principles as unpopular, unworkable and destined for the scrap heap of history.


Maybe. But ideas have a funny way of surviving elections. Democrats and liberals didn’t give up their belief that government and those who wander the halls of its bureaucracy know best because voters disagreed with them. On the contrary, Democrats fought to preserve the programs they had initiated while in the majority and to simply repackage them in attempt after attempt to sell bigger government to a doubting public. To give them their due, Democrats did so because they honestly believe people should put their faith in government rather than in markets and personal judgment.


Even those who disagree strongly with their views have to admire the tenacity with which Democrats have fought for government solutions over the years. They’ve ignored the evidence of what works and doesn’t work as well as the views of mere voters. Liberals have explained away every excess of government and every boneheaded result of the policies they espouse. When the regulations they’ve championed distort markets and create unintended problems, Democrats blame the markets themselves and seek even more regulation. When foreign leaders act like the thugs and criminals most of us believe them to be, liberals excuse their behavior as a natural human reaction to us.


Now, finding themselves in power, liberals (or progressives, as they now call themselves) seem to believe Republicans and conservatives should conclude from the result of one historically rather close national election that they should abandon their beliefs. Many of them, like Mr. Obama himself, are angry that this isn’t happening. What is happening is that Mr. Obama’s idea of a “bipartisan,” “post-partisan” or “trans-partisan” America is becoming clearer every day; it’s an America in which everyone, regardless of party, agrees with him.


Mr. Obama’s anger was on display last week as he attacked those who dared disagree with him, blaming them for the nation’s current problems and suggesting that if things get worse, as he sadly predicts they will, it will be their fault and not his. It was on display when he attacked radio host Rush Limbaugh, of all people, for being critical of what he and his administration want to do for us, and it is on display as his supporters in and out of Congress suggest that people like Limbaugh must be denied access to the airwaves because they have the temerity to actually continue to disagree with President Obama.


The president whined last week that he and his team have had to work long into the night since the Inaugural as they wrestle with the nation’s economic problems. And by week’s end, Obama surrogates began to argue that since Republicans over-spent while in power, they have no right to complain as the new administration takes spending to an entirely new level.


There is no denying the seriousness of the current recession, but the specter of a still-popular president on television night after night to predict that things are going to get much, much worse is not something one would call confidence-inspiring. One can lead by inspiring or by trying to scare the heck out of people. In our country, at least, successful presidents have used the inspirational approach — the approach that Mr. Obama took during his campaign, but which he seems to have abandoned.


Perhaps as he goes forward, the president should ask his speechwriters to study the Reagan rather than the Carter leadership model.

4) Impressed Me Not:On Obama's first White House press conference.
By Walter Shapiro


Through most of his inaugural primetime press conference, Barack Obama seemed like he was channeling a particularly loquacious combination of Joe Biden, Bill Clinton, and the ghost of Hubert Humphrey. The president's response to the first question from the Associated Press about the risks of sounding too apocalyptic about the economy ran (or, to be more accurate, crawled) for nearly 1,200 words--and ended with Obama saying "Okay" with an implicit question mark as if he were requesting permission to keep on talking. A national poll from the Pew Research Center released Monday afternoon found that 92 percent of Americans described Obama as a "good communicator." There is a suspicion that those astronomic numbers had dipped by the time that Obama exited from the East Room of the White House at 9 p.m. on the dot.


In Obama's defense, the press conference was the first extended glimpse that many Americans had of their new president since the Inaugural Address. No one can deny the complexity of the economic challenges facing the nation--and President Obama is uniquely equipped to play Explainer in Chief. But Obama radiated the sense of a leader who has digested too many economic briefings and memorized too many talking points in preparation for his primetime rendezvous with the public. He clearly came out in an over-caffeinated mood ready to do battle with his Republican congressional foes, whom he had already vanquished-and, as a result, he over-reacted to last week's Fox News commentary instead of focusing on the exact shape of the stimulus. What shone through the entire press conference is how irked the president is with laissez-faire conservatives who believe, even now, "that the government has no business interfering in the marketplace" and that "FDR was wrong to intervene back in the New Deal." (Presumably Amity Shlaes, the Roosevelt-ripping author, should not plan on any immediate Oval Office invitations).


It is inevitable that the Obama press conference will be reviewed as political theater, since it was light on ... well ... that amorphous thing called news. The president's strongest answer was in response to the evening's fluffiest question, about Alex Rodriguez's confession that he had taken steroids. After an honest baseball fan's lament ("it tarnishes an entire era"), Obama jumped to a larger point that transcends sports--the lesson in A-Rod's downfall for the young: "There are no shortcuts; that when you try to take shortcuts you may end up tarnishing your whole career." Obama also took advantage of the presidential prerogative to duck when he was asked a tricky question about ending the ban on media coverage of the flag-draped coffins arriving at Dover Air Force Base. "We are in the process of reviewing those policies in conversations with the Defense Department," Obama said without revealing his hand. "So I don't want to give you an answer now, before I've evaluated that review and understand all the implications involved."


Obama's maiden presidential press conference (complete with a question from Helen Thomas) was orchestrated to revolve around what the president called "the most profound economic emergency since the New Deal." The president clearly wanted to mobilize his supporters who have been languidly following the congressional maneuvering over the stimulus package. But there was little in Obama's remarks that spoke to issues that the congressional conference committee will soon be squabbling over. Having won on the Senate cloture vote, Obama might have risked a few tart remarks about, for instance, the addition to the legislation of $70 billion in middle-class subsidies to ward off the dread Alternative Minimum Tax. But Monday night, Obama, with his lengthy soliloquies, seemed content to simplify the choice as between those who support the stimulus and do-nothing Republicans. The new president may have made a far more powerful case if, in his first primetime appearance, he was behind the desk in the Oval Office, giving the kind of speech at which he excels.


What Obama was decidedly not Monday night was Kennedy-esque. When JFK unveiled the live presidential primetime press conference 48 years ago, he answered 37 questions in the space of 40 minutes; Obama only half-responded to 13 questions in the space of an hour. Admittedly, Kennedy, who had survived a narrow election, was trying to demonstrate with his competence that he was a worthy successor to Dwight Eisenhower. Obama--who romped home in November and certainly does not lie awake worrying about invidious comparisons with George W. Bush--was trying to sell a set of economic talking points. As a result, the reporters and their questions were little more than potted palms as President Obama declaimed from the East Room.


When a president is as popular as Obama, the atmospherics of his first primetime performance are apt to be forgotten in a week or two. And blessed with the good will of almost all Americans to the left of Sean Hannity (and that is a wide swath of political territory), Obama has the luxury of experimenting with different formats to reach the voters. My guess is the primetime press conference is a gambit that may not be repeated for quite a while. But the next time that Obama tries it, he might consider taking his stage cues from that White House master of brevity known as Silent Cal Coolidge.

5)Pelosi's Indefensible Bill For Barack Obama, a cautionary tale of audacity.
By WILLIAM MCGURN

Historians tell us it was Roman custom to place a slave in the chariot behind a conquering hero, there to whisper warnings about the fleeting nature of fame amid the accolades of adoring crowds.


Barack Obama is no stranger to the cheers of roaring crowds. If his prime-time press conference last night is any clue, moreover, he intends to use this personal popularity to help Congress get a stimulus bill to his desk quickly. As he does, those who wish his presidency success might do well to whisper in his ear two words of tempering wisdom: "Nancy Pelosi."

In the public eye as well as on Capitol Hill, the California Democrat has become the mother of all stimulus packages. Whatever issues Mrs. Pelosi may claim with the Senate version, her leadership has defined the direction. Her intransigence has set the tone. And her penchant for excess helps explain why out of 535 members of Congress, only three Republicans seem willing to go anywhere near the thing.

Therein lies a cautionary tale.

In the afterglow of President Obama's inauguration, it's easy to forget that Mrs. Pelosi's similarly historic elevation to the speaker's chair just two years ago had its own elements of a coronation -- and its own claims of change we were to believe in.


Like President Obama, who characterized his ascent to the White House as a mark of "how far we have traveled," Speaker Pelosi spoke of her swearing in as a "moment for which we have waited more than 200 years."

Like President Obama, whose supporters made ubiquitous a red, white and blue image of the candidate over the word "hope," Speaker Pelosi's supporters brandished their own icon at her swearing-in: commemorative buttons depicting her as Rosie the Riveter flexing her muscle.

And like President Obama, Speaker Pelosi heralded her election as "a call to change." In her acceptance speech, she put it this way: "We have made history," she said. "Now let us make progress for our new America."

That was January 2007. Before the year was out, her approval ratings would be lower than George W. Bush's.

Under her leadership, Congress failed to pass a single appropriations bill until early November. Congress also failed to override the president's veto on what Democrats thought would be an easy win for an expansion of the State Children's Health Insurance Program. Most significant of all, Congress failed to force Mr. Bush to begin what Democrats had said was their real goal: a U.S. withdrawal from Iraq.

The way Mrs. Pelosi handled Iraq has some interesting parallels to the way she is now handling the stimulus. In the early months of her speakership, the Democratic Congress faced its first test on Iraq in the form of a war funding bill. Mrs. Pelosi's response? To lard it up with billions in unrelated domestic spending -- including a now infamous provision that would have spent $74 million for peanut storage.

In many ways, Mrs. Pelosi's decisions would make it easier for Mr. Bush to get his war funding through her Congress. While the president argued for supporting our troops, Democrats were forced to defend pork. And though Mr. Bush was ultimately forced to accept more domestic spending than he would have preferred, on the central issue -- funding for the war -- he got what he wanted without agreeing to a timetable for withdrawal.

Just as she did with war funding, Mrs. Pelosi is once again putting her fellow Democrats -- Mr. Obama included -- in the position of defending the indefensible. And she let it all ride on a game of chicken. Her bet has been that a Republican minority would sooner or later cry "uncle" on a laundry list of pet Democratic spending projects rather than risk being painted as holding up vital economic legislation.

But a funny thing happened: House Republicans called her bluff. The result has been more attention to the content of the legislation passing through Congress. And as the focus on content has increased, the American people have grown more skeptical.

In public, Mr. Obama may tell us the problem is the lack of Republican support. But if he is as comfortable with the stimulus as he says, if the bills under consideration are really the tonic our economy needs, if by not passing a stimulus immediately we truly risk catastrophe, and if the American people are going to call the Republicans to account for not going along, why all the fuss? Why not just have it passed on your own, and take full credit.

Unless, of course, even Democrats are beginning to hear whispers of "Nancy Pelosi" ringing in their ears.

6) SPECIAL PREVIEW Stimulus: A History of Folly
By James K. Glassman

Before he was sworn in as President, Barack Obama began to lay out his plans for reviving an American economy that, it would later be discovered, had declined 3.8 percent in the fourth quarter of 2008, its worst performance in 26 years. About the first part of his project, “stimulating” businesses to invest and consumers to consume through government spending and tax remittances, he was forthcoming and enthusiastic. About the second, stabilizing the financial system, he wished to reserve judgment.

He anointed the stimulus proposal with a convenient and vivid metaphor. “We’re going to have to jump start this economy with my economic recovery plan,” he said on January 3. According to the image, one can jolt a dormant economy into action just as one can hook up polarized cables to a car battery, clamp a defibrillator to the chest, or breathe into the ear of a reluctant lover. Suddenly, the object of our attention will be back in action, aroused.

Alas, the questions raised by a proposed stimulus—whether to apply it, what sort it should be, how much it should cost, and when it should begin and end—are far trickier to answer than problems involving dead batteries. And, remarkably enough, history and economic research offer no conclusive answers. The recession that began in 2008 could turn out to be the worst slowdown since the Great Depression of the 1930’s. For three-quarters of a century, economists have been studying it diligently. And even now they cannot come to a definitive conclusion about the cause of that depression, the reasons for its severity and duration, or what cured it. In an introduction to a book of essays on the Great Depression he compiled in 2000, Ben S. Bernanke, then a Princeton professor and now chairman of the Federal Reserve Board, wrote, “Finding an explanation for the worldwide economic collapse of the 1930’s remains a fascinating intellectual challenge.”

Today, of course, the challenge is more than intellectual.

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When he wrote in 1936 that “practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist,” John Maynard Keynes surely did not have himself in mind. But, in times of trouble, Americans still cling to Keynes, or at least to the caricature of him as the economist who said you could spend your way out of a recession. His big idea was that, left to its own devices, an economy can fall into a slump and just stay there. Self-corrective mechanisms will not necessarily work on their own; they will need help.

Prosperity depends on investment, on businesses building new plants, buying new machines, and employing more workers. In a typical case, when an economy slows, businesses reduce their demand for credit. At the same time, worried consumers save their earnings in banks, and by doing so, add to the store of money available for lending. These two forces—as well as actions taken by the Federal Reserve Board—combine to push interest rates to levels so attractive that businesses start borrowing again, and the economy picks up. The Great Depression, however, was atypical. The economy slowed and interest rates fell, but businesses were so frightened about the future that they refused to invest; instead, they did the opposite, shutting plants and firing workers. As for consumers, while they may have wanted to save, they lacked the cash to put away. Because they were out of work, they depleted what savings they had.

Keynes argued that, when businesses and people cannot or will not invest, then the government must take on the role of filling the gap. The key is speed. The means, Keynes wrote in The General Theory of Employment, Interest and Money, really did not matter so much:

If the Treasury were to fill old bottles with bank notes, bury them at suitable depths in disused coal mines which are then filled to the surface with town rubbish and leave it to private enterprise on well-tried principles of laissez-faire to dig the notes up again, . . . there need be no more unemployment and with the help of the repercussions, the real income of the community would probably become a good deal larger than it is.
Of course, Keynes favored large public-works projects over the burying of bottles. Building roads in the right places, for example, would both put people to work and provide the basis for more commerce. At first, Keynes emphasized government spending as stimulus, but, when pressed in 1933, he advocated tax cuts as well—specifically in response to criticism that public-works projects do not put cash into the system quickly enough.

The dire situation for which Keynes prescribed a cure bears distressing similarities to our own. Interest rates set by the Fed stand effectively at zero percent, but banks are recalcitrant about lending and even businesses flush with cash are hesitant to invest. It appears that the current sickness occurred because the Fed, in an effort to keep the economy stimulated after the collapse of the tech-stock bubble and in the wake of September 11, cut interest rates far too much during 2001 (from 6.5 percent at the start of the year to 1.75 percent at the end) and waited too long to raise them, making credit so easy that businesses expanded beyond all reasonable bounds, and banks, flush with cash and trying to make higher returns, shoveled money at borrowers with poor credit; risk aversion disappeared, and loans, especially to home buyers, went bad. Booms do, after all, create their own busts.

In response, Congress last year voted funds for the Treasury to use to shore up financial institutions—the widely maligned Troubled Asset Relief Program, or TARP—and the Fed opened wide its lending window. Those actions forestalled mass failures, but banks, chastened by their past overindulgence and worried about depleting their capital, still do not want to lend. So while government action proved necessary (and remains necessary) to maintain public confidence in the banking system, it became clear those actions could not and would not mitigate the parlous effects of the recession that, we were told late in 2008, had begun at the end of 2007. So the question becomes: In a world in which monetary adjustments do not appear effective, can tax and spending policies pull us out of the slump?

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The track record is discouraging. Despite Franklin Roosevelt’s aggressive spending, unemployment reached 25 percent in 1933, fell only to 14 percent by 1937, and was back up to 19 percent in 1939.1 In the end, the New Deal did little or nothing to resuscitate the economy. Certainly, inept monetary policies helped prolong the Great Depression, as did tax increases, constant interventions in the conduct of business, and the erection of global trade barriers, beginning with the Smoot-Hawley Tariff in 1930, more than two years before Roosevelt took office. There was a stretch of twelve years from the stock-market crash to Pearl Harbor, and, during that time, fiscal stimulus simply did not jump-start the economy (or, in Keynes’s own metaphor, “awaken Sleeping Beauty”). Now, some do attempt to make the case that Roosevelt did not increase government spending enough during the early and mid-1930’s and that it took World War II and the unprecedented infusion of government dollars into the economy to provide the stimulus that finally pulled America from the swamp.

But even if that were true—and considering the fact that federal spending tripled during the Great Depression, rising from 3 percent of the country’s gross domestic product to nearly 10 percent in 1939,2 it does not seem the likeliest explanation—it still does not offer much in the way of guidance through our current thicket. Few economists today believe the United States could tolerate the kind of budget deficits that developed during World War II, which ran more than 50 percent of gross domestic product, or about $7 trillion annually in current terms. When the federal government ramped up its spending during the war, it had not yet grown into the entitlement cash machine it is now, spitting out trillions of dollars a year in retirement and health-care benefits.

Not only was the stimulative effect of Great Depression fiscal policy non-existent, but follow-on efforts during the ten subsequent recessions proved equally ineffective. As a result of that hard-won experience, the consensus until recently among economists was that attempts at stimulus through emergency fiscal policies—as opposed to monetary policies and the automatic effects of increases in unemployment assistance and decreases in tax payments—were useless at best. Typical was the statement of Martin Eichenbaum of Northwestern University in the American Economic Review in 1997: “There is now widespread agreement that countercyclical discretionary fiscal policy is neither desirable nor politically feasible.” Martin Feldstein, then president of the National Bureau of Economic Research, agreed. Fiscal stimulus, he said in 2002, “has not contributed to economic stability and may have actually been destabilizing.”

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A good place to turn to understand the failure of the jump-start is the work of Frederic Bastiat, a French politician of the early 19th century. “In the economic sphere,” he wrote,

an act, a habit, an institution, a law produces not only one effect, but a series of effects. Of these effects, the first alone is immediate; it appears simultaneously with its cause; it is seen. The other effects emerge only subsequently; they are not seen; we are fortunate if we foresee them.
To prove his point, Bastiat described what happens when a vandal breaks a shopkeeper’s window. The seen effect is that repairing the glass creates economic value in the payment to the glazier, who then has money to buy a new suit or hire a part-time employee. What is unseen is that the shopkeeper has to pay the glazier with money that he would otherwise have used to buy a suit or add an employee. “The broken-window fallacy, under a hundred disguises, is the most persistent in the history of economics,” wrote the economic journalist Henry Hazlitt in 1946.

Like payments for broken windows, tax rebates and new roads (the seen) do not come free. The stimulus money that flows to taxpayers, government agencies, and businesses has to come from somewhere (the unseen). During a recession, it is usually borrowed, and the anticipation of taxpayers is that they will have to repay these loans, which means their taxes will rise in the future. This knowledge makes people anxious about spending the extra money, or even about investing it in the kind of ventures that help an economy grow.3

Lately, however, economists have become more sanguine about the power of fiscal stimulus, in large part because of the apparent success of the tax-rate reductions and rebates in 2001 and 2003 (although such a conclusion may ignore the monetary effects of the huge cut in interest rates). A summary of a conference held in May by the Federal Reserve Bank of San Francisco stated that “the consensus” against stimulus “has unraveled and perhaps even begun to emerge on the opposite viewpoint.” Last year, Jason Furman and Douglas Elmendorf of the Brookings Institution wrote, “Fiscal policy implemented promptly can provide a larger near-term impetus to economic policy than monetary policy can.” And, in a paper delivered to the American Economic Association in January, Feldstein himself switched sides and said he now favored tax cuts and government spending.

The views of these economists are undoubtedly heartfelt, but it must be recognized that one of the great attractions of Keynes’s theories is that he gives you permission to do what you wanted to do anyway. Feldstein, chairman of the Council of Economic Advisors under Ronald Reagan, proposes a stimulus policy that extends the Bush tax cuts currently scheduled to expire in 2011 and increases spending on defense and national intelligence. In their stimulus proposal, Furman, now deputy director of Obama’s National Economic Council, and Elmendorf, head of the Congressional Budget Office under the current Democratic majority, adamantly oppose extending the Bush cuts and instead want to extend unemployment and Food Stamp benefits and issue short-term tax credits, even to people who owe no taxes.

Also, in the new enthusiasm for stimulus, there is not a small degree of panic; monetary policy is not working, so fiscal policy must! To his credit, however, Feldstein writes toward the end of his January paper, “It is of course possible that the planned surge in government spending will fail. Two or three years from now we could be facing a level of unemployment that is higher than today and that shows no sign of coming down.”

The truth is that we have learned almost nothing about the use of fiscal stimulus since the Great Depression, and it is a fatal conceit to assume that we can hurriedly construct a fiscal policy that will produce the prescribed results today. Economists seem to admit this fact by advocating what they prefer anyway, for political or ideological reasons. I would feel better about stimulus if Elmendorf were clamoring for permanent tax cuts and Feldstein food stamps.

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On being presented the Nobel Prize in economics in 1974, Friedrich von Hayek devoted his Stockholm lecture to acknowledging the severe limitations of his profession. “It seems to me,” he said, “that this failure of the economists to guide policy more successfully is closely connected with their propensity to imitate as closely as possible the procedures of the brilliantly successful physical sciences—an attempt which in our field may lead to outright error.” Government simply cannot know enough to direct an economy successfully, and when the President claims that his fiscal stimulus plan will create (or save) at least three million jobs, he is taking a wild, and dangerous, leap. Said Hayek:

If man is not to do more harm than good in his efforts to improve the social order, he will have to learn that in this, as in all other fields where essential complexity of an organized kind prevails, he cannot acquire the full knowledge which would make mastery of the events possible. He will therefore have to use what knowledge he can achieve, not to shape the results as the craftsman shapes his handiwork, but rather to cultivate a growth by providing the appropriate environment, in the manner in which the gardener does this for his plants.
What is that environment? First, it provides a confidence that, in a crisis, bank deposits are safe and insurance policies will be paid in full. Such confidence can be provided only by the government of the United States in its legitimate and essential role as the lender of last resort. Second, the environment supports, rather than denigrates or browbeats, productive members of society. The U.S. will not emerge from a serious recession unless businesses and investors lead it out. Third, it recognizes that Americans have undergone a financial calamity and that we need time to adjust; we cannot, like a car battery, be shocked back to life, and we aren’t in the mood to have someone blow in our ear.

In fact, stimulus may be precisely the wrong metaphor. Rather than getting jazzed up, we need to be calmed down and to take the time to learn from the Great Depression, a time when government did too much, not too little. Amity Shlaes makes the argument in The Forgotten Man, her book about the Great Depression, that the constant experimenting and meddling of the New Deal froze investors and business operators in fear: “Businesses decided to wait Roosevelt out, hold on to their cash, and invest in future years.”

Despite the warnings of Keynes, the experience of the past half-century indicates that today’s low interest rates will start having a positive effect, though it still will take many months. Meanwhile, left alone, what Hayek called “spontaneous order” will find its way forward. Using a different metaphor, James Grant, in his history of credit, Money of the Mind, wrote, “The cycle of decay and renewal is as much a part of capitalism as it is of the forest floor.” But, in the 1930’s, “something in the normal regenerative process was missing. There was no decisive recovery from the business-cycle bottom. People had lost their speculative courage, and the more government legislated and taxed, the more that credit sulked.”

Stimulus—that is, fiscal intervention with the express purpose of speeding up the normal regenerative process that Grant describes—is unnecessary and almost certainly harmful, a policy based on hubris and anxiety, rather than on history and good sense. Under such circumstances, the proper way to analyze discrete proposals today for spending or taxing is on their own merits, not on their supposed ability to stimulate something else. There may, in fact, be a good reason for government to spend billions of dollars today on building highways, and it has nothing to do with stimulus. It is that long-term interest rates are at historic lows and that the right highways can boost the economy in the long term. There also may be a good reason, again far apart from stimulus, for revising the tax code and reforming Social Security and Medicare. It is that Americans now understand that the economic future is not so assured as they believed a couple of years ago, and it is time for decisions to be made—in a manner careful, sensible, and unstimulated.

6) Why Obama Wants Control of the Census: Counting citizens is a powerful political tool.
By JOHN FUND

President Obama said in his inaugural address that he planned to "restore science to its rightful place" in government. That's a worthy goal. But statisticians at the Commerce Department didn't think it would mean having the director of next year's Census report directly to the White House rather than to the Commerce secretary, as is customary. "There's only one reason to have that high level of White House involvement," a career professional at the Census Bureau tells me. "And it's called politics, not science."

The decision was made last week after California Rep. Barbara Lee, chair of the Congressional Black Caucus, and Hispanic groups complained to the White House that Judd Gregg, the Republican senator from New Hampshire slated to head Commerce, couldn't be trusted to conduct a complete Census. The National Association of Latino Officials said it had "serious questions about his willingness to ensure that the 2010 Census produces the most accurate possible count."

Anything that threatens the integrity of the Census has profound implications. Not only is it the basis for congressional redistricting, it provides the raw data by which government spending is allocated on everything from roads to schools. The Bureau of Labor Statistics also uses the Census to prepare the economic data that so much of business relies upon. "If the original numbers aren't as hard as possible, the uses they're put to get fuzzier and fuzzier," says Bruce Chapman, who was director of the Census in the 1980s.

Mr. Chapman worries about a revival of the effort led by minority groups after the 2000 Census to adjust the totals for states and cities using statistical sampling and computer models. In 1999, the Supreme Court ruled 5-4 in Department of Commerce v. U.S. House that sampling could not be used to reapportion congressional seats. But it left open the possibility that sampling could be used to redraw political boundaries within the states.

Such a move would prove controversial. "Sampling potentially has the kind of margin of error an opinion poll has and the same subjectivity a voter-intent standard in a recount has," says Mr. Chapman.

Starting in 2000, the Census Bureau conducted three years of studies with the help of many outside statistical experts. According to then Census director Louis Kincannon, the Bureau concluded that "adjustment based on sampling didn't produce improved figures" and could damage Census credibility.

The reason? In theory, statisticians can identify general numbers of people missed in a head count. But it cannot then place those abstract "missing people" into specific neighborhoods, let alone blocks. And anyone could go door to door and find out such people don't exist. There can be other anomalies. "The adjusted numbers told us the head count had overcounted the number of Indians on reservations," Mr. Kincannon told me. "That made no sense."

The problem of counting minorities and the homeless has long been known. Census Bureau statisticians believe that a vigorous hard count, supplemented by adding in the names of actual people missed by head counters but still found in public records, is likely to lead to a far more defensible count than sampling-based adjustment.

The larger debate prompted seven former Census directors -- serving every president from Nixon to George W. Bush -- to sign a letter last year supporting a bill to turn the Census Bureau into an independent agency after the 2010 Census. "It is vitally important that the American public have confidence that the census results have been produced by an independent, non-partisan, apolitical, and scientific Census Bureau," it read.

The directors also noted that "each of us experienced times when we could have made much more timely and thorough responses to Congressional requests and oversight if we had dealt directly with Congress." The bill's chief sponsor is New York Democratic Rep. Carolyn Maloney, who represents Manhattan's Upper East Side.

"The real issue is who directs the Census, the pros or the pols," says Mr. Chapman. "You would think an administration that's thumping its chest about respecting science would show a little respect for scientists in the statistical field." He worries that a Census director reporting to a hyperpartisan such as White House Chief of Staff Rahm Emanuel increases the chances of a presidential order that would override the consensus of statisticians.

The Obama administration is downplaying how closely the White House will oversee the Census Bureau. But Press Secretary Robert Gibbs insists there is "historical precedent" for the Census director to be "working closely with the White House."

It would be nice to know what Sen. Gregg thinks about all this, but he's refusing comment. And that, says Mr. Chapman, the former Census director, is damaging his credibility. "He will look neutered with oversight of the most important function of his department over the next two years shipped over to the West Wing," he says. "If I were him, I wouldn't take the job unless I had that changed."

6a) White House Census Power Grab May Violate the Constitution
By Michael Barone

In an earlier blog post I noted that Republican Judd Gregg, if he is confirmed as secretary of commerce, will have jurisdiction over the Census Bureau. Some Democrats noticed, including, I suspect, White House Chief of Staff Rahm Emanuel.

So now it's been announced that the White House will oversee the Census. Of course, the president has ultimate authority over cabinet officers (that's the unitary presidency theory that Democrats hated up to but not beyond January 20), and I am not prepared to charge that Emanuel or anyone else in the White House is determined to diabolically cook the Census books in search of gains for the Democratic Party or the Black or Hispanic caucuses. And we have the integrity of Census statisticians to rely on; they favor sampling on grounds that commend themselves to academic statisticians, but also have shown, in the 2000 Census, that they will adhere to those standards in the face of political pressures to the contrary. Nonetheless, as someone who got great joy when my parents in 1951 (when I was 7) bought a set of encyclopedias with the 1950 Census figures (I had only had access to the much outdated 1940 Census figures), I'm going to keep an eye on this one.

Here's an argument that it's unconstitutional for the president to take over the Census from the secretary of commerce. It goes like this: Article I, Section 2 of the Constitution provides for an "actual enumeration" and a statute passed by Congress provides that the duties under this clause are to be performed by the secretary of commerce. Article I (as Joseph Biden didn't know in debate) is about the legislative, not the executive branch. Hence, it is argued, the president can't substitute a sampling for the enumeration required to be done by the secretary.

However, it is undoubtedly true that the president can fire the secretary of commerce for any reason, including failure to conduct the Census the way he wants the Census conducted. An acting secretary could conduct the Census the way the president wanted, even if the Senate refused to confirm a new secretary of commerce who would. And who would have standing to challenge the constitutionality of the Census taking? Perhaps the state that, under the statutory formula apportionment House seats among the states, got the 436th rather than the 435th seat, i.e., came close to getting another seat but didn't get it.


7) 'We Love to Talk,' Declares Biden
By Mona Charen

Vice President Joseph Biden delivered the Obama administration's first major foreign policy address last week at the Munich Security Conference. It was just the sort of thing Europeans tend to like. Biden offered bouquets to diplomacy, to multinational institutions, and to respecting other cultures. "It was not an accident," he told his continental audience, "that (Obama) gave his very first interview as president to Al-Arabiya."

The new administration is entitled to pursue whatever foreign policy they think best in the next four years (God help us). But attempting to falsify the history of the Bush years should not go unremarked.

Just as he did during the campaign, when then-candidate Biden declared that we had "kicked Hezbollah out of Lebanon," among other whoppers, Biden is again (presumably with the full support and encouragement of President Obama) inventing his own history to suit his political purposes.

"Our administration is reviewing policy toward Iran," Biden declared, "but this much I can say: We are willing to talk."

Unlike whom? Obama's predecessor? The Bush administration held at least 28 separate meetings between Americans of ambassadorial rank and Iranian officials during the eight years of the Bush presidency. According to the Middle East Forum, more than 16 meetings were held in Geneva and Paris from November 2001 through December 2002 between Deputy Assistant Secretary of State for Near Eastern Affairs Ryan Crocker and senior Iranian Foreign Ministry officials. A number of high-level direct negotiations were conducted in 2003, and a number of indirect contacts were maintained through the Europeans between 2003 and 2007. In March 2007, U.S. Ambassador to Iraq Zalmay Khalilzad held a meeting with an Iranian team at a conference of Iraq's neighbors in Baghdad. Khalilzad's successor, Crocker, also met with the Iranian ambassador. Thus the U.S. gave full backing to a (fruitless) European Union initiative to negotiate with Iran about its nuclear program.

Biden announced last week, as if there were something new under the sun, "We are willing to talk to Iran, and to offer a very clear choice: continue down your current course and there will be pressure and isolation; abandon your illicit nuclear program and support for terrorism and there will be meaningful incentives."

Ah, "meaningful incentives." Why didn't someone think of that before? Let's see, here's a CNN clip from May 8, 2008: "The United States has signed off on a European plan that would offer increased incentives for Iran to suspend its uranium enrichment program, senior State Department officials said Thursday. ... The United States, along with the other nations, has been following a 'dual track strategy' with Iran, which includes tightening sanctions on the regime while offering incentives if Iran suspends its enrichment activities." Page back through the past eight years and you can find the identical story over and over again. The U.S. and the Europeans have been perpetual Charlie Browns running to kick the football to the Iranian Lucy.

So now the Obama Administration proposes to do exactly, exactly the same thing. But they do so loudly proclaiming how different they are. And the clock ticks, and Ahmadinejad -- who affirmatively desires global chaos because he believes it portends the arrival of the 12th imam -- gets ever closer to a nuclear weapon.

"We ... do not believe in a clash of civilizations," said Biden. Another straw man. The Bush administration never framed the war on terror as a clash of civilizations and in fact made every effort to remind the world that we respected Islam. We heard that Islam was a "religion of peace" more from Bush and Co. than we ever heard it from leading Muslims. One of President Bush's first stops in the days after 9/11 was the Islamic Center in Washington, D.C. And it was Bush who began to observe Ramadan at the White House.

The new administration betrays a touching faith in diplomacy. Democrats always do. What they have never seemed to appreciate is that diplomacy without the threat of force is as effective as a watchdog with a muzzle. Perhaps Obama might consider a muzzle the next time Biden goes for an outing.

8) Random Thoughts on The Passing Scene:
By Thomas Sowell



One of the most important skills for political success is the ability to make confident assertions of absurdities or lies.

The adage "follow the money" will be hard to apply in the current administration, when there is so much money going in all directions that it is doubtful whether anybody can follow it.

I hate to hear about "partnerships" between government and business, or between government and other organizations. When there is a partnership between an ant and an elephant, who do you suppose makes the decisions?

There are too many people, especially among the intelligentsia, who will never appreciate the things that have made this country great until after those things have been destroyed-- with their help. Then, of course, it will be too late.

How can a President of the United States be re-elected in a landslide after four years when unemployment never fell below 15 percent for even one month during his first term? Franklin D. Roosevelt did it by blaming it all on the previous administration. Barack Obama may be able to achieve the same result the same way.

Do you want to have to jump through bureaucratic hoops when you are sick? If not, why would you be in favor of government-run medical care?

The "Wall Street Journal Report" is one of the few things on television worth watching. It is worth it just to see the sardonic smile of Kimberly Strassel whenever she discusses politics.

Democrats could sell refrigerators to Eskimos before Republicans could sell them blankets.

Anyone who wants to understand the housing crisis without getting a headache from reading economic jargon should read the new book "Financial Shock" by Mark Zandi.

Human beings are going to make mistakes, whether in the market or in the government. The difference is that survival in the market requires recognizing mistakes and changing course before you go bankrupt. But survival in politics requires denying mistakes and sticking with the policies you advocated, while blaming others for the bad results.

I know that there are still voices of sanity around because I have counted them-- on one hand.

More frightening to me than any policy or politician is the ease with which the public is played for fools with words. The latest example is the "Employee Freedom of Choice Act," a bill that will do away with secret ballot elections among workers voting on whether to be represented by a union. It is an open invitation to intimidation-- which is to say, loss of freedom of choice.

Our economic problems worry me much less than our political solutions, which have a far worse track record.

One of the wonders of our times is how much more attention is paid to the living conditions of a bunch of cut-throats locked up in Guantanamo than to the leading international sponsor of terrorism getting nuclear weapons.

The great sense of urgency of the Obama administration to get legislation to authorize slow-moving spending projects may seem inconsistent. But the urgency is real, even if the reasons given are not. The worse case scenario for the administration would be to have the economy begin to recover on its own before this massive spending bill is passed, reducing their chances of creating the kind of politically directed economy they want.

I realized how far behind the times I am when I saw a TV commercial for some weight-loss product, showing Marie Osmond "before" and "after." I thought she looked great "before."

War should of course be "a last resort"-- but last in terms of preference, not last in the sense of hoping against hope while dangers grow, and wishful thinking or illusory agreements substitute for serious military preparedness-- or, if necessary, military action. As Franklin D. Roosevelt said, "If you wait until you see the whites of their eyes, you will never know what hit you."

8a) Buy American, Buy Depression
By Investor's Business Daily


Trade: The new administration watered down a protectionist "Buy American" provision in the Senate stimulus bill and hoped all sides would go away happy. But they won't, as the European Union envoy to the U.S. explains.

As if the $900 billion stimulus package wasn't controversial enough, provisions requiring purchase of U.S.-made iron and steel for government contracts that were slipped into the House version, and of all manufactured goods in the Senate's, have annoyed more people than expected — across the world.

Last week, leaders from Canada, Brazil, China, the U.K., India, Mexico, Germany and the Czech Republic, among others, spoke out against such "Buy American" provisions as protectionist. Some threatened retaliation.

The most assertive voice came from the European Union, our top overseas market, which last year engaged in two-way trade with the U.S. totaling $709 billion.

EU ambassador to the U.S. John Bruton warned Congress that the "Buy American" provisions will damage the U.S. as well as world trade by building protectionist sentiment around the world.

Even a watered-down provision "Buy American" provision passed "in a manner consistent with U.S. obligations under international agreements" is still bad news, Bruton said. It may not violate treaties, he said, but it's protectionism just the same.

We may have our differences with Europe about its lumbering statism and political correctness, but it's worth remembering the trade wars that presaged World War II and the core premise of the EU itself — a trading bloc of free nations designed to ensure continental peace.

Now, with a global crisis on, "we are all in this together," Bruton told IBD in a recent interview to make the EU's case. Even if the "Buy American" provision breaches no U.S. treaty obligation, as the Senate insists, Bruton said it still breaks a vow the U.S. made at the G-20 summit last November, in the early stages of the economic crisis.

All the large developed and emerging economic powers agreed to introduce no protectionist measures, he said.

But "Buy American" violates that. "To introduce this in a high-profile stimulus bill sends out a message that the U.S. doesn't see this crisis as a global problem but only an American problem that can be solved by American legislation."

"This is a global crisis we are facing," Bruton said. "We need to tackle this globally."

Retaliation would be the first problem, but not the last. "I suppose if the U.S. did breach its international obligations, there would be retaliation," he said. "But that doesn't mean this doesn't do a whole lot of damage."

Bruton said the stimulus bill is being closely watched and will send a global message. U.S. leadership would not be enhanced, he said, noting that another G-20 meeting is set for April, where the U.S. presumably would have to explain itself.

"I think this is a mistake for the signal it sends to the rest of the world," Bruton said.

After all, two can play the protectionist game. Europe was somewhat shielded from the move because it had signed a "Government Procurement Agreement" with the U.S. But in areas of the economy where that didn't hold sway, retaliation could be possible.

That would be terrible for U.S. companies, he said. They could be shut out of contracts they might otherwise win.

"The EU market for government contracts is one of the most open in the world, and many American companies bid successfully for public sector contracts," he said. "The risk is that if America becomes more closed, the only way to persuade it otherwise is to retaliate, which, in the short run, imposes costs."

Meanwhile, emerging countries such as Brazil and India "are not party to agreements," Bruton said, "so the full rigor of (the Buy American rule) would apply to them."

Besides, he said, "We already have had 'Buy American' provisions in effect since the 1930s, so why are they not adequate now? The legislation was signed by Herbert Hoover, and it didn't do much."

Even from the U.S. point of view, protectionism would bring less bang for the buck, Bruton said. If the U.S. wants to build new bridges, or invest more in information technology, or build schools, it will cost more if you limit the potential suppliers through protectionism than if you throw the process open to bidders around the world.

This is in no one's interest, said Bruton. "One would end up with less stimulus per dollar on a global basis."

And it would also mean more bureaucracy, he warned.

"If you have to buy American, you have to verify where products come from," he said. "So a lot of money would be wasted in paperwork to comply with the provisions, and that's not what we want at a time of urgency."

It's true the EU has its own list of protectionist policies. But Bruton's right about one thing: as we found in 1930, after the Smoot-Hawley tariffs were imposed, more protectionism is the last thing the world needs.

9)Obama's Charm Isn't Working Wonders Abroad Policy does matter after all.
By BRET STEPHENS

Barack Obama has now been president for 21 days, following an inauguration that was supposed to have pressed the reset button on America's relations with the wider world and ushered in a new period of global cooperation against common threats. Here's what pressing reset has accomplished so far:

- Iran. Since President Obama's inauguration, Iran has launched a satellite into space and declared (with an assist from Russia, which is providing the nuclear fuel) that it would complete its long-delayed reactor at Bushehr later this year. At the Munich Security Conference last week, Iranian parliamentary speaker Ali Larijani promised a "golden opportunity for the United States" in its relations with the Islamic Republic. He proceeded to make good on that opportunity by skipping Joe Biden's speech the next day.

Also, as if to underscore that President Mahmoud Ahmadinejad's Holocaust-denial is merely emblematic of his regime's outlook, Mr. Larijani offered that there could be "different perspectives on the Holocaust." Mr. Larijani is widely described as a "moderate."

- Afghanistan. This is the war Mr. Obama has said "we have to win" -- as opposed to Iraq. Our NATO allies are supposed to feel the same way.

So what was NATO Secretary General Jaap De Hoop Scheffer doing at the Munich conclave? Why, reproaching our allies. "When the United States asks for a serious partner, it does not just want advice, it wants and deserves someone to share the heavy lifting," he said.

But the plea fell on deaf ears. Germany will not, and probably cannot, commit more than 4,500 soldiers to Afghanistan, and then only to areas where they are unlikely to see combat. The French have no plans to increase their troop commitment beyond the 3,300 now there. Mr. Obama, by contrast, may double the U.S. commitment to 60,000 troops.

- North Korea. A constant liberal lament about the Bush administration was that its supposed hard line on Pyongyang had yielded nothing except five or six North Korean bombs.

So what is Kim Jong Il to do now that the Obama administration is promising a friendlier approach? In late January, Pyongyang announced it was unilaterally withdrawing from its 1991 nonaggression pact with the South.

Satellite imagery later showed the North moving a Taepodong 2 missile -- potentially capable of reaching the U.S. West Coast -- to a launch pad. "The missile is pointing at Obama," Baek Seung-joo, a director at the Korea Institute for Defense Analyses in Seoul, told the L.A. Times. "North Korea thinks that with such gestures they can control U.S. foreign policy."

- Pakistan. Perhaps the most unambiguous of the Bush administration's successes was rolling up the nuclear proliferation network of Pakistani scientist A.Q. Khan, who was kept under house arrest for five years.

But if some latent fear of the 43rd American president prevented the Pakistani government from releasing their dubious national hero, that fear clearly vanished with the arrival of the 44th. Mr. Khan was released last week, ostensibly by order of a Pakistani court, plainly with the consent of the government. So far, the Obama administration has done little more than issue a muted statement of concern.

- Russia. At the Munich conference, Russian Deputy Prime Minister Sergei Ivanov praised the "very positive" tone set by Mr. Biden. And Mr. Ivanov's tone? Less positive. Russia will continue to build military bases in Georgia's breakaway republics. It will press ahead with the fueling of the Bushehr reactor.

Russia also won't hesitate to complicate the U.S. position in Afghanistan -- and then lie about what it has done in a manner worthy of the late Andrei Gromyko. "There is no correlation between the decision of the Kyrgyz republic and the loans that the Russian federation granted," Mr. Ivanov said, referring to Kyrgyzstan's oddly timed decision to close an airbase used by the U.S. to supply Afghanistan after securing a $2 billion Russian "loan."

- The Arab street. "I have Muslim members of my family," Mr. Obama recently told Al-Arabiya. Yet so far his efforts at outreach have been met with derision from Arab hard-liners and "liberals" alike.

"We welcomed him with almost total enthusiasm until he underwent his first real test: Gaza," wrote Egyptian novelist Alaa Al Aswany in a New York Times op-ed. "We also wanted Mr. Obama . . . to recognize . . . the right of people in occupied territory to resist military occupation." In other words, the price of Arab support for Mr. Obama is that he embrace Hamas and its terrorist tactics.

And so it goes. True, Mr. Obama has made the U.S. popular in places like Montreal and Berlin, where our unpopularity never mattered much to begin with. But foreign policy is not about winning popularity contests. And woe to the president who imagines he needn't inspire fear among the wicked even as he embraces the adulation of the good.