Obama's Rod and Staff May Not Be A Comfort!

Kyle-Anne Shiver poses: 'are pigeons coming home to roost?'

In a few weeks Obama has proposed spending trilions in order to get the government involved in the banking system problems, solve the mortgage and housing market problems, the health care system problems and our labor market problems. The government has decided it should determine corporate salaries, will soon place energy caps and now has begun to address our education problems.

Obama has conveniently chosen to forget some important and oft repeated campaign promises because expediency is the litmus test for governance by which he wants to be judged. But he still has time to pick fights with those who disagree with his approach and programs.

I have the votes, I know what is best, I was Editor in Chief of The Harvard Law Review so full speed ahead. Being president is so much fun, beats two years in the Senate, being a social activist and listening to that damn Chicago preacher!

Financial markets are not necessarily buying what Obama has been dishing out and seems to distrust his rosy projections and forecasts. Time will tell who is right. At this juncture I prefer the wisdom of the markets over the words of a messiah.(See 1 below.)

Egyptian Muslim cleric has a problem with Starbucks! Coffee ok, just logo drives him nuts! (See 2 below.)

Check this out! Pay off time. However,some Democrats are beginning to have doubts.(See 3 and 3a below.)

Dennis Blair defended Freeman up to the last minute before Freeman fell on his sword. Sen. Lieberman says Freeman's comments were not taken out of context as Freeman alleges. In his parting shot, Freeman rests his case on the oft used canard: 'The Israel Lobby killed me.' It is amazing how so many DC types ignore their own intemperate and rash public statements yet, find it so easy to blame others for their downfall.(See 4 below.)

Assad states direct talks with Israel possible. Annapolis all over again? (See 5below.)

You are known by the company you keep and can be sunk by the staff you have! In this case one's rod and staff may not be a comfort to Obama! (See 6 below.)

Obama used Buffett as one of his props during the campaign. Is our neophyte president too inexperienced and/or headstrong to heed Buffett now? Markets have a way of self-correcting if government chefs would get out of the kitchen. (See 6 and 6a below.)

What is a depression and are we likely to experience one? (See 7 below.)

William McGurn recently wrote an interesting article about 'earmarks.' He explained, the more earmarks the more likely a porkish piece of legistlation will pass. Why? Because more politicians have skin in the game.

So when we look at the proposed $410 billion spending bill we should realize it is being driven by 8,500 pork projects totaling $8 billion. Though Democrats account for 60% of the earmarks six of the top 10 Senate earmarkers are Republicans with Thad Cochran of Mississippi leading the charge.

As predicted, Obama signed the "imperfect $410mm bill." After all nothing is perfect and it is better to spend more money and cater to the porkers than the tax payers who are just along for the ride.

Obama was so embarrassed at signing an 'earmark' laden bill he did so in private and then took an immediate jab at GW saying GW did the same thing. There goes our populist penata president again - Obama just has to have enemies to blame for everything he reluctantly is forced to do so government can keep vacuuming up more and more of taxpayer's hard earned dollars.

Actually it is a 'perfect' bill because Obama has more money to waste, Congress remains open for business and its members gets their candy canes as well.

With every passing day Obama proves to be a brazen fraud.

Pig slop spills over to both sides of the aisle and taxpayers are left paying for the carpet to be cleaned. (See 8 below.)

You started it! (See 9 below.)


It is only a matter of time before States get infected and trapped by Obama's programs. Will governors have the good sense, political integrity and courage to step aside and dodge the bullet? Even if they can and do the problems Obama may create could become insurmountable and still overwhelm them.(See 10 below.)

Dick


1) Voters' Obama Folly Coming Home to Roost
By Kyle-Anne Shiver


It's only been 7 weeks since the man whose resume fits nicely on the back of a postage stamp became the most powerful human being in the universe. As Presidents go, Barack Obama has proven at least one thing true: change is like the flip of a coin. Change can bring the best of times; change can bring the worst of times. And anyone over the age of twelve ought to have known that. Instead, 52% of the American electorate has run around like a bunch of howling ninnies for the past year chanting like a horde of Jim Jones' followers, who can't get enough of the poison kool-aid.


So much for progressive enlightenment.


With an economy in shambles, slinking toward all-out depression a little further each day, the President doesn't know the difference between a popularity-based political tracking poll and the confidence meter of the stock market, which represents the actual savings and pension funds of millions and millions of ordinary Americans. Heck, the golden boy of campaign one-liners doesn't even know that P/E ratio stands for price/earnings, not profit/earnings.


If only he had once had a paper route instead of all those pick-up games with the hoops.


That famed transition team -- the team that was given greater inside access than ever in history by a more-than-gracious out-going President, is about to go down as the most incompetent bunch of nincompoops ever produced by a university system. Those fancy degrees are evidently not worth the paper upon which they're printed.


In a time of mounting economic peril, even as the transition team dithered, one would have thought that fully staffing the Department of the Treasury would have been top priority. Not for this bunch. Timothy tax-cheat-TurboTax-challenged Geithner is a one-man Treasury Department and is so out of touch that he spent precious minutes in front of a Congressional panel scolding our own gas and oil companies for damaging the environment, even as a record 31.8 million Americans sign up for food stamps.


Earth to Tim: You won't get the Country out of this mess by slamming the companies that hire us so we won't need to be on the dole.


Is there a single business enterprise in America that this administration doesn't hate with a death wish?


Some of those folks now lining up to get food stamps and the like probably worked in the domestic tourist industries that have taken a whack from President Obama. Every time the President slams a trip by so-and-so from such-and-such company, real people lose the jobs they would have had providing services to these executives.


Las Vegas isn't known for anything but catering to out-of-towner, is it?


Evidently, a teleprompter attached to each of one's hips does not guarantee even a single gaffe-free moment. For all the rhetorical hit jobs perpetrated against Governor Sarah Palin, this woman got up and delivered one of the best speeches of this entire campaign with teleprompter glitches and a set of notes scribbled on by several others, all without so much as breaking a nail or missing a beat. President Obama's motto: have 2 teleprompters, will travel.


So much for Mr. Erudite.


When it comes to the very few jobs with which our federal government is actually commissioned by the U.S. Constitution, this Administration is coming up on empty every single day. While this President calls committee meeting after committee meeting (he calls them summits) for more well-educated nincompoops to sit around and B.S. their way through our domestic problems, our foreign policy is looking like the Keystone Cops high on M&Ms.


Foreign policy is actually in the Constitution; health, education and welfare are not.


President Obama has evidently decided that Israel and Great Britain are quite dispensable allies, but the Chinese, the Russians, the Iranians, the Syrians and Hamas are going to be our new best friends.


Obama dispatches Madame Secretary Clinton to the Chinese to beg them not to stop supporting our debt, but not to worry about those prickly human rights issues because we're not going to fret over those millions and millions of human beings kept under the brutal boot of communism any more. China answers with a wink and a nod and announces they're upping military spending by 15%. Several days later the Chinese surrounded one of our unarmed naval vessels as personnel charted the ocean floor and demand we leave international waters.


On the flip side, President Obama stuns the British and American publics with the most flagrant snubs between our two peoples since the Revolutionary War. First, foregoing the customary joint press conference with the flags and ceremony. Then the obvious denial of even a nice lunch for the Brit. Then the cake-taker of bad manners, a tacky, cheap gift in exchange for the exquisitely tasteful gifts from the British people. Their press is agog from it and declaring that the U.S. will be sorry for this. When President Obama sent back the bust of Churchill, given right after the 9/11 attacks, without so much as a note of explanation, perhaps the Brits should have known something sinister was afoot in the Oval Office.


Back to our newfound friends, President Obama moved swiftly after the Israelis' attempt to destroy rocket-launching sites in Gaza to offer $900 million in assistance to the Palestinians -- read Hamas. And Secretary Clinton made sure to take note of the damage done by those nasty Israelis while she toured the West Bank, taking the opportunity to publicly scold Israel (our heretofore friend), causing Israeli leaders to sneer, "She's not the Hillary we knew." Hillary was barely out of the region before Iran test fired a new long range missile and made certain to notify the Israelis that the new missiles are fully capable of hitting Israel's nuclear facilities.


Now, when are we going to get to see all that "smart power"?


Not with the Russians, apparently. When Mrs. Clinton made her "smart power" debut there last week, she carried a gimmicky little gadget, resembling the Staples "Easy Button." Only Mrs. Clinton's perfectly cutesy-pie idea was to inscribe the Russian word for "reset" on the button. Instead our State Department academic wiz kids put the Russian word for "overcharge" on the little button, making mincemeat of Hillary's "smart power" before she even got out of the gate.


Meanwhile, the Russians guffawed at President Obama's offer to trade missile defense systems in Eastern Europe (he had already pre-announced his intention to scrap missile defense systems, remember?) for help with the Iranian nuclear "problem," saying "haggling" over such things is unproductive.


Shades of JFK and the Cuban Missile Crisis are making my skin crawl.


The North Koreans are acting up a storm too, and blithely threatening South Korean civilian airliners, while they prepare to launch a far-reaching missile that they're calling a "satellite." As if that weren't enough, the North Koreans are also brazenly uttering war threats - not asking to come to the negotiating table where all the "smart power" folks are in charge now.


Not to worry, though, because as Gallup, Rasmussen and Zogby remind us every day, this President is still one popular, cool dude to the 52% who drank his kool-aid from the campaign trail -- plus a few Americans who probably didn't even vote but love to talk to pollsters on the tele. And as gloom and doom stalk every hardworking American, the Obamas party hardy, feasting on delicacies, toasting celebrities and stick us with the check.


Anyone in Obamaland ever hear of cognitive dissonance? Tar and feathers?


So, what will the campaign slogan of the other party be for 2012?


I'll have a whack at it.


Obama lied; hope died.


The Iranians got the A-bomb, the Russians got their jive back and the Chinese own everything.


Vote for the un-cool, work-experienced, good-without-a-teleprompter guy or gal who knows a friend from a foe and can add 2 + 2 and get 4 every single time.

2) MUSLIM CLERIC ATTACKS STARBUCKS;
CLAIMS LOGO IS QUEEN ESTHER



Starbucks logo was attacked by a Muslim cleric who claimed the woman featured was the famous Jewish queen Esther.



As Jews around the world celebrate Purim this week, one Egyptian cleric has used the holiday to launch an attack against Starbucks, claiming that the woman in the logo of the international chain is the Purim story's Queen Esther, and her presence warrants a boycott of the company throughout the Arab world.

"Starbucks is to be found in Mecca, in Al-Madina, opposite the King Abdul Aziz Gate in Mecca, opposite the Al-Majid Gate in Al-Madina, as well as in Cairo," Egyptian cleric Safwat Higa said during a sermon which aired on Al-Nas TV. "Starbucks is to be found everywhere, with this logo."

"Have any of you ever wondered who this woman with a crown on her head is? Why do we boycott Starbucks? I will tell you, so you will know why you should boycott this company, and what this logo stands for," he continued.

"The girl in the Starbucks logo is Queen Esther. Do you know who Queen Esther was and what the crown on her head means? This is the crown of the Persian kingdom. This queen is the queen of the Jews. She is mentioned in the Torah, in the Book of Esther. The girl you see is Esther, the queen of the Jews in Persia," the cleric said.

(The Starbucks logo is not based on the Purim story. "The iconic mermaid that beckons coffee drinkers was based on a classic 15th century Norse woodcut of the mythical siren," according to LogoBlog.org.)

3) Dancing to Big Labor's Tune
By Newt Gingrich

After spending an astounding $61 million to elect Democrats in the 2008 elections, union bosses are getting their payback this week.

Yesterday, so-called "Card Check" legislation was introduced in both the House and the Senate.

Card Check strips American workers of the right to a secret ballot and gives the federal government the right to impose labor contracts on workers.

The timing of this assault on the freedom of the American workplace could not be worse. A new study shows that for every three workers coerced into joining a union under Card Check, one job will be eliminated by besieged American businesses.


Card Check Could Eliminate 600,000 Jobs In Its First Year


That means that an estimated 600,000 jobs could be lost due to Card Check in the first year alone - and that's on top of the over four million jobs already lost to the flagging economy.

Card Check is a job killer. Even Obama supporter Warren Buffet opposes it, saying "I think the secret ballot is pretty important in the country. I'm against card check."

But as far as Big Labor is concerned, a deal's a deal. Their goal is to get their allies in Washington to ram Card Check through Congress this week, before anyone notices that American workers and businesses are losing fundamental rights.

Leave it to Vice President Joe Biden to inadvertently tell the truth. In a meeting with the AFL-CIO last week, Biden made it clear who's calling the shots when it comes to American workers, businesses and jobs. He told the gathering of union big-wigs: "You All Brought Me to the Dance...It's Time We Start Dancing"

What's happening in Washington this week is old style, quid-pro-quo politics - the kind President Obama pledged as a candidate to end. Supporters of the so-called Employee Free Choice Act (that's their Orwellian name for Card Check) claim to be all about protecting American workers.


82% of Democrats Oppose Eliminating the Secret Ballot

For big labor and their allies in Washington, it's time to start dancing - and dancing fast.

Vice President Biden and the union bosses hope to duplicate with Card Check the Obama Administration's success in rushing the mammoth $787 billion stimulus bill through Congress so quickly most members never had time to read it.

The reason they have to act quickly is simply this: The vast majority of Americans - 77 percent of Republicans, 82 percent of Democrats and 79 percent of independents - oppose what they're trying to do. (Source)

Not only that, but the latest surveys show that a full 82 percent of Americans say they don't want to belong to a union.


The Stakes Are High As Congress Is Holding Hearings This Week.

It's precisely this kind of pro-secret ballot, pro-freedom sentiment among the American people that makes union bosses so eager to pass Card Check.

Under Card Check, union organizers and their enforcers will be able to go into any small business, hospital or construction site and coerce workers into signing cards. If they get 50 percent plus one, the deal's done, and the workers are forced into a union. And if management and the new union fail to reach a negotiated contract, the federal government will just impose one. Coerced unionization allows for what is effectively a new, unaccountable form of forced taxation. Workers will have a portion of their paycheck going to the union to be spent as the bosses see fit, including political donations to parties and candidates that the workers may not even support.

Talk about an "offer you can't refuse." There's no vote. No secret ballot. No right to freely negotiate the contract. The workers, the workplace, and a portion of the worker's paychecks are controlled by the union bosses.

For Americans like you and me, the stakes are high this week. Hanging in the balance are literally hundreds of thousands of jobs, not to mention fundamental freedoms like the ability of small businesses to create and sustain jobs, the freedom of American workers to have a say in how their workplace is organized, and the freedom of American workers to freely choose whether they want to give money to politicians and political parties.


Congress Is Holding Hearings This Week.

3a) Union Cudgel: Big Labor gets nasty on 'card check.

Big Labor's drive to eliminate secret ballots for union elections has united American business in opposition, so labor chiefs are putting on the brass knuckles: The new strategy is to threaten companies with government retaliation if they don't stop lobbying against turning U.S. labor markets into Europe.


We wrote on February 13 about the letter from the labor consortium Change to Win to the Financial Services Roundtable, demanding that banks receiving Troubled Asset Relief Program money keep quiet about union "card check." To its credit, the banking lobby hasn't backed down. Now Big Labor is escalating, demanding in a February 23 letter to Secretary Timothy Geithner that Treasury muzzle the companies if they won't muzzle themselves.

"Firms receiving significant TARP assistance continue to lobby against the interests of hard working taxpayers," says the letter from Change to Win Chair Anna Burger. "For example, these firms continue to oppose legislation that would allow bankruptcy judges to modify mortgage loan terms, establish a Credit Cardholder's Bill of Rights and protect consumers from corporations that bury mandatory arbitration clauses in fine print."

Imagine that: Banks are daring to fight legislation that would reduce their profitability -- and at a time when our public officials say they are desperate for banks to earn themselves out of trouble.

The letter targets in particular the Principal Financial Group, based in Des Moines, which it says should be denied TARP money because of the "scale and scope" of its lobbying. But wait -- Citigroup spent three times more money on fourth-quarter lobbying than the $515,000 spent by Principal, the unions admit. So, what gives? It seems Principal's real sin is that it "lobbied on 26-labor related bills . . . including the Employee Free Choice Act," and it is the only TARP applicant or recipient to have disclosed doing so.

In case Mr. Geithner doesn't get the political point, the letter helpfully notes that "there is now a Congressional effort underway to curb lobbying by TARP recipients." Senators Dianne Feinstein (California) and Olympia Snowe (Maine) are leading that effort to limit corporate political speech, and Ms. Burger copies no fewer than 13 Members of Congress on her Treasury missive.

The double standard here is remarkable. Every year, unions collect millions of dollars in grants from government agencies they lobby. In 2002 and 2003, the Service Employees International Union -- the main driver behind Ms. Burger's consortium -- lobbied the Department of Health and Human Services while receiving between $563,226 and $938,388 per year in grants. Imagine if Tom DeLay had ever said that labor unions or AARP couldn't speak up about Medicare because they or their affiliates had accepted federal grants. The headlines would have read: "Republican Gag Rule."

Labor chiefs are desperate to pass their easy-organizing agenda this year, because they know liberal majorities on Capitol Hill won't last. They also know they haven't been able to organize workers with a level playing field, so they want to rewrite the rules so their organizers can see which individual workers are voting no and apply peer and other pressure. Most workers can see how unions have contributed to the destruction of Detroit, U.S. steel makers and so many other industries. That's why unions need government-sanctioned coercion to prevail both against business and with workers.

Congratulations to Principal Financial's Chairman J. Barry Griswell, aided in particular by the Chamber of Commerce, for refusing to succumb to this thuggery.


4) DNI Dennis Blair 'Manipulated Intelligence' Before Congress
By Ed Lasky

In his letter defending his nomination of Charles Freeman to the post of Chairman of the National Intelligence Council (Freeman has withdrawn his nomination), Director of National Intelligence Dennis Blair stated that the quotes attributed to Freeman that caused controversy were all taken out of context.


Jake Tapper of ABC News reported that Senator Lieberman responded to Blair's claim by stating that (at least) he had read all the statements in context and that they were indeed controversial if not scandalous and that they cast serious doubt on Freeman's qualifications for the position.


Blair: "As far as the statements of Ambassador Freeman that have appeared in the press those have all been out of context, and I urge everyone to look at the full context of what he was saying. I'm better off getting strong analytical viewpoints ...than if I'm getting precooked pablum judgments that don't really challenge." (This was from a transcript)


Now comes an example of how Blair's "out of context" defense of his long-time friend was duplicitous:


The Washington Post has finally reported on the controversy surrounding the appointment of Charles Freeman to head the National Intelligence Council. It seems that the Post also spoke to Charles Freeman, though they don't have any on the record quotes from the appointee. According to the paper, Freeman is claiming he was taken out of context in his views on the Tienanmen Square massacre:


Freeman has also been faulted for statements about the Tienanmen Square uprising in 1989. Critics have said that he faulted the Chinese for not acting earlier in putting down the demonstrations, but Freeman said the remarks were his assessment of how Chinese leaders had seen things.


Freeman's allies are claiming this as well -- Blair just offered this defense of Freeman in front of the Senate Armed Services Committee.


Well, Dennis Blair, Director of National intelligence, was wrong -- as a few minutes of research would have cleared up.


THE WEEKLY STANDARD published Freeman's entire email. Freeman described how the Chinese leadership saw those events, and then seconded their assessment. He agreed that the protests were intolerable and that the government had only done what was, in his view, necessary to end the standoff. Freeman wasn't taken out of context, and it's deeply dishonest for Freeman and his friends to claim otherwise.


The memo can be read here.


Next example of Blair's manipulation of intelligence:


Dennis Blair's letter to Congress only mentioned Saudi government funding of Freeman's Middle East Policy Council.


This minimized the appearance of dependence on Saudi Arabia for the funding of the think tank. This was deceptive. In fact, Steve Rosen gets right to the bottom of how deceptive this statement was ( a big sin of omission) since funding from Saudi sources extends beyond just funding from the government.


According to a letter from the Acting Executive Director of Freeman's Middle East Policy Council in today's Washington Times, MEPC received five previously undisclosed contributions from the Saudi Foreign Ministry in 2008, and $1 million from the King of Saudi Arabia in 2005. In addition, Prince Alwaleed bin Talal Al-Saud announced that he "donated more than $1 million to the US Middle East Policy Council" on March 18, 2007. MEPC's executive director says in his letter that the budget of MEPC is $600,000 a year, a sum roughly equal to the total of these three contributions from different donors in Saudi Arabia since 2005. He claims that,"Over the past decade, scheduled contributions to the council from the Saudi government have amounted to less than one-twelfth of our annual budget." What if we take unscheduled contributions and only the period since 2005?? The numbers suggest a much higher level of dependence on Saudi Arabian sources.


Blair's letter to Congress mentions only Saudi government funding. Universities that receive federal funding having to disclose all foreign-source gifts above a certain amount, and this should be the standard for the national intelligence Council. Likewise, what about other Arab/Gulf governments? Freeman should reveal all foreign-sourced gifts, donations, etc. for the entire time he headed the MEPC.


Saudi royals and businessmen tied to them are de facto government sources of funding when the country is run by the Saudi royal family. Trivia question? What is the only nation on earth named after a family? Time is up. Saudi Arabia is named after the Saud family, which includes Prince Alwaleed bin Talal Al-Saud.


Blair may just be parroting what the Middle East Policy Council and Chas Freeman sent to him. One would hope, though, that the Director of National Intelligence would appreciate that the Saudi government is all but synonymous with the Saudi royal family and the various businessmen tied into the government and the family. Prudence would lead one to include all sources from Saudi Arabia-not just those from the de jure government-in one's calculations of the money sent from the kingdom to its de facto Ambassador, Charles Freeman.


Will any of the critics that lambasted George Bush during his terms in office for manipulating intelligence raise an inquiry why our Director of National Intelligence seemingly manipulated intelligence (or certainly did not seek out intelligence -- a fact that should have been clear in his pick of Freeman) before a Senate Committee?

5) Assad: US could mediate Syria-Israel talks


Syrian president tells Japanese daily direct peace talks with Israel possible if US acts as arbitrator in move from indirect negotiations. Assad stresses willingness to work toward regional peace, saying, 'Changes do not happen overnight'

Syrian President Bashar Assad said his country could hold direct peace talks with Israel if the United States acted as an arbitrator, according to an interview published on Wednesday.

Assad also told Japan's Asahi Shimbun that he welcomed US President Barack Obama's new administration and wants to engage in dialogue for regional peace, but he also insisted on the return of the Israeli-occupied Golan Heights.

"We need the United States to act as an arbitrator when we move from the current indirect negotiations to direct negotiations (with Israel)," he was quoted as saying in an interview with the Japanese-language newspaper.

Syria held exploratory contacts with Israel through Turkish mediators last year about resuming peace negotiations that broke off in 2000 over the fate of the strategic Golan plateau. Assad cautioned that possible progress of such talks would "depend on the next Israeli administration," the Asahi said.

US-Syrian ties were especially tense under former president George W. Bush, who accused Damascus of supporting terrorism, helping Iran and of turning a blind eye to the flow of arms and supplies to insurgents in Iraq.

Washington has not yet taken a decision about returning its ambassador to Syria, a senior US envoy said this month after visiting Damascus to mend ties.

Assad harshly criticised the US-led wars in Iraq and Afghanistan, and hit out at Bush for putting pressure on Syria, the Asahi said. But he also stressed his willingness to help work toward regional peace.

"Changes do not happen overnight," Assad was quoted saying. "We must first start dialogue to clarify the shared interest, which is to achieve peace. The administration of Bush did not do that, and it only cared about the benefit of his own country."

Assad welcomed the Obama administration's active engagement with Syria through sending envoys and US senators for meetings, the Asahi said.


"It is important that we first begin dialogue and both take part in resolving problems," he told the newspaper. "It is not us who have changed. It is the Americans who have changed."

To achieve regional peace, the Syrian president emphasised the importance of including major parties in the peace process, adding that he would work to bring Islamist groups Hamas and Hizbullah to the table.

6)Heads should roll: President Obama's clumsy, smirky staff is sinking him -- and resurrecting a deflated GOP! Plus: Lay off Rush!
By Camille Paglia


Yes, free the president from his flacks, fixers and goons -- his posse of smirky smart alecks and provincial rubes, who were shrewd enough to beat the slow, pompous Clintons in the mano-a-mano primaries but who seem like dazed lost lambs in the brave new world of federal legislation and global statesmanship.

Heads should be rolling at the White House for the embarrassing series of flubs that have overshadowed President Obama's first seven weeks in office and given the scattered, demoralized Republicans a huge boost toward regrouping and resurrection. (Michelle, please use those fabulous toned arms to butt some heads!)


First it was that chaotic pig rut of a stimulus package, which let House Democrats throw a thousand crazy kitchen sinks into what should have been a focused blueprint for economic recovery. Then it was the stunt of unnerving Wall Street by sending out a shrill duo of slick geeks (Timothy Geithner and Peter Orszag) as the administration's weirdly adolescent spokesmen on economics. Who could ever have confidence in that sorry pair?

And then there was the fiasco of the ham-handed White House reception for British Prime Minister Gordon Brown, which was evidently lacking the most basic elements of ceremony and protocol. Don't they read the "Iliad" anymore in the Ivy League? Check that out for the all-important ritual of gift giving, which has cemented alliances around the world for 5,000 years.

President Obama -- in whom I still have great hope and confidence -- has been ill-served by his advisors and staff. Yes, they have all been blindsided and overwhelmed by the crushing demands of the presidency. But I continue to believe in citizen presidents, who must learn by doing, even in a perilous age of terrorism. Though every novice administration makes blunders and bloopers, its modus operandi should not be a conspiratorial reflex cynicism.

Case in point: The orchestrated attack on radio host Rush Limbaugh, which has made the White House look like an oafish bunch of drunken frat boys. I returned from carnival in Brazil (more on that shortly) to find the Limbaugh affair in full flower. Has the administration gone mad? This entire fracas was set off by the president himself, who lowered his office by targeting a private citizen by name. Limbaugh had every right to counterattack, which he did with gusto. Why have so many Democrats abandoned the hallowed principle of free speech? Limbaugh, like our own liberal culture hero Lenny Bruce, is a professional commentator who can be as rude and crude as he wants.

Yes, I cringe when Rush plays his "Barack the Magic Negro" satire or when he gratuitously racializes the debate over Philadelphia Eagles quarterback Donovan McNabb, who is a constant subject of withering scrutiny for quite different reasons on sports shows here in Philadelphia. On the other hand, I totally agree with Rush about "feminazis," whose amoral tactics and myopic worldview I as a dissident feminist had to battle for decades. As a student of radio and a longtime listener of Rush's show, I have gotten a wealth of pleasure and insight from him over the years. To attack Rush Limbaugh is to attack his audience -- and to intensify the loyalty of his fan base.

If Rush's presence looms too large for the political landscape, it's because of the total vacuity of the Republican leadership, which seems to be in a dithering funk. Rush isn't responsible for the feebleness of Republican voices or the thinness of Republican ideas. Only ignoramuses believe that Rush speaks for the Republican Party. On the contrary, Rush as a proponent of heartland conservatism has waged open warfare with the Washington party establishment for years.

And I'm sick of people impugning Rush's wealth and lifestyle, which is no different from that of another virtuoso broadcaster who hit it big -- Oprah Winfrey. Rush Limbaugh is an embodiment of the American dream: He slowly rose from obscurity to fame on the basis of his own talent and grit. Every penny Rush has earned was the result of his rapport with a vast audience who felt shut out and silenced by the liberal monopoly of major media. As a Democrat and Obama supporter, I certainly do not agree with everything Rush says or does. I was deeply upset, for example, by the sneering tone both Rush and Sean Hannity took on Inauguration Day, when partisan politics should have been set aside for a unifying celebration of American government and history. Nevertheless, I respect Rush for his independence of thought and his always provocative news analysis. He doesn't run with the elite -- he goes his own way.

President Obama should yank the reins and get his staff's noses out of slash-and-burn petty politics. His own dignity and prestige are on the line. If he wants a second term, he needs to project a calmer perspective about the eternal reality of vociferous opposition, which is built into our democratic system. Right now, the White House is starting to look like Raphael's scathing portrait of a pampered, passive Pope Leo X and his materialistic cardinals -- one of the first examples of an artist sending a secret, sardonic message to posterity. Do those shifty, beady-eyed guys needing a shave remind you of anyone? Yes, it's bare-knuckles Chicago pugilism, transplanted to Washington. The charitably well-meaning but hopelessly extravagant Leo X, by the way, managed to mishandle the birth of the Protestant Reformation, which permanently split Christianity.

7)Sage Advice:Barack Obama needs Warren Buffett more than Buffett needs Barack Obama.
By John Dickerson

During the presidential campaign, Barack Obama regularly name-checked the world's richest man. "I've got a friend, Warren Buffett," he would say before talking about how the two of them agreed on tax policy. Buffett was perhaps Obama's most powerful "validator," an unfortunate political term for a supporter whose unassailable credentials in a particular area make people feel good about a candidate's slim credentials in that area.

Obama could use a little Buffett validation right now as he seeks to bolster investor and consumer confidence about the plans he has enacted and the plans he has yet to unveil. He didn't really get it Monday as Buffett gave his views on the economic crisis during a lengthy interview on CNBC. Buffett made a broad critique of the politicians in Washington. And while he called out Republicans for being obstructionist, his most specific remarks were aimed at congressional Democrats and the president. "I think that the Democrats—and I voted for Obama and I strongly support him, and I think he's the right guy—but I think they should not use this—when they're calling for unity on a question this important, they should not use it to roll the Republicans." He also said it was unproductive to blame the Bush administration and use the crisis to get funding for "pet projects."

White House Press Secretary Robert Gibbs could not dismiss Buffett as quickly as he has other administration critics. Nor could he point out, as other Democratic strategists did to me on the phone, that Buffett isn't what he used to be. Buffett made a lot of bad calls in the recent economic crisis, as Buffett himself admitted, both in the interview and in his annual letter to shareholders. (Sample: "During 2008I did some dumb things in investments.")


In prudent fashion, Gibbs embraced only part of Buffett's critique, saying Obama agreed with his frustration with the political process in Washington and his call for bipartisan cooperation. (Tuesday, he didn't take the opportunity to note that despite Buffett's remarks, the Dow went up almost 400 points.)

Buffett wasn't trying to assign blame. He was calling for focus, most of all from President Obama as the communicator-in-chief. A lack of communication, says Buffett, is at the heart of the economic problem. "We've had muddled messages," he said, "and the American public does not know. They feel they don't know what's going on, and their reaction is to absolutely pull back. … How fast we get [to better economic times] depends enormously on not only the wisdom of government policy but the degree in which it's communicated properly." (Buffett's own attempts at communication included repeatedly referring to the current economic crisis as a war and drawing elaborate analogies to the attack on Pearl Harbor.)

It's not as if Obama hasn't been trying to educate the country. He does it often in speeches and on the road. He did it at the start of his prime-time press conference and in his address to Congress. His economic advisers have also been speaking to think tanks and television news shows. Polls suggest Buffett is wrong: People feel good about what they're hearing. Some 41 percent of those polled say the country is on the right track, the highest that number has been in five years. In a recent Wall Street Journal/NBC poll, 56 percent said they approve of the job Obama is doing in handling the economy, while 59 percent gave their approval in a Quinnipiac poll. They approve of his economic policies, including his budget. In a CNN poll, 80 percent said they believed Obama's policies would improve the economy. When he spoke to Congress two weeks ago, people told Gallup they felt more confident. Even Obama's plan for housing gets support: While people think it unfairly benefits those who behaved badly during the housing bubble, a plurality nevertheless believes it will work.

But, Buffett would probably say (he wasn't available for an interview), those polls are misleading. To see whether Obama has really changed the economic climate, watch how people behave. People are nervous, and they're not spending. Since the stimulus bill passed, the consumer mood has not improved. Obama obviously worries about what Buffett is talking about, too, because he's been repeatedly making efforts to boost the market in public confidence. He suggested it might be time to get into the stock market, and in an interview with the New York Times last week, he urged Americans not to "stuff money in their mattresses," and tried to bolster confidence: "I don't think that people should be fearful about our future," he said. "I don't think that people should suddenly mistrust all of our financial institutions."

Whether Buffett is right and Obama needs to communicate more effectively to unlock the economy, the president also has other reasons to improve his pitch. He's got to convince people that his stimulus bill is working, and he may have more big spending requests to make—for another bank bailout or maybe for a second stimulus bill. He's got to make the case for his budget, which the chairman of the Senate Budget Committee says doesn't have the votes at the moment.

If Obama still puts as much stock in his friend Warren as he did during the campaign, he'll work even harder to educate the country and show he's doing everything he can to improve the economy. In the CNBC interview, Buffett repeatedly referred to FDR and the spirit of fellow-feeling in the nation during his presidency. So perhaps we'll soon see President Obama at the fireside, talking about his solutions to the country's economic woes. Maybe the president can even mention in these fireside chats how often he talks and listens to his good friend Warren Buffett.

6A) 2009 Buffett's Unmentionable Bank Solution
By HOLMAN W. JENKINS, JR.


Last week's post mortem on the Fannie and Freddie takeover was received better than we might have expected. A few readers assumed Eddie Lampert and Bill Miller, fund managers who lost money when Fan and Fred were seized, and whose letters to their own investors we quoted, were engaged in special pleading.



In fact, the nationalization of Fannie and Freddie is water over the dam. The men's perspective may be one of pain, but it is historical pain.

Now comes Warren Buffett, a big investor in Wells Fargo, M&T Bank and several other banks, who, during his marathon appearance on CNBC Monday, clearly called for suspension of mark-to-market accounting for regulatory capital purposes.

We add the italics for the benefit of a House hearing tomorrow on this very issue. Mark-to-market accounting is fine for disclosure purposes, because investors are not required to take actions based on it. It's not so fine for regulatory purposes. It doesn't just inform but can dictate actions that make no sense in the circumstances. Banks can be forced to raise capital when capital is unavailable or unduly expensive; regulators can be forced to treat banks as insolvent though their assets continue to perform.

What happens next is exactly what we've seen: Their share prices collapse; government feels obliged to inject taxpayer capital into banks simply to achieve an accounting effect, so banks can meet capital adequacy rules set by, um, government.

(This sounds silly, but has been a big part of government's response so far.)

CNBC, sadly, has been playing a loop of Mr. Buffett's remarks that does a consummate job of leaving out his most important point. Nobody cares about the merits of mark-to-market in the abstract, but how it impacts our current banking crisis. And his exact words were that it is "gasoline on the fire in terms of financial institutions."

Depressing bank stocks today, he said, is precisely the question of whether banks will be "forced to sell stock at ridiculously low prices" to meet the capital adequacy rules.

"If they don't have to sell stock at distressed prices, I think a number of them will do very, very well."

He also proposed a fix, which CNBC duly omitted from its loop, namely to "not have the regulators say, 'We're going to force you to put a lot more capital in based on these mark-to-market figures.'"

Mr. Buffett obviously understands where we are today, though it seems to elude many of those kibitzing about "nationalization," "letting banks fail" and other lagging notions. Since last year, our banking system no longer rests on capital, but on government guarantees. With those sweeping guarantees in place to protect their depositors and bondholders, banks now are able to earn princely spreads above their cost of funds, however questionable their balance sheets.

Banks will "build equity at a very rapid rate with the spreads that exist now," Mr. Buffett said. With the possible exception of Citigroup, he added, "the banking system largely will cure itself."

Notice he didn't call for subsidizing hedge funds to buy toxic assets. He didn't call for more government capital injections -- which are not merely redundant when comprehensive guarantees are in place, but positively destructive of the ultimate goal of moving back toward a system based on private capital.

Mr. Buffett didn't utter the unstylish words "regulatory forbearance," but letting banks earn their way out of trouble under an umbrella of government guarantees is precisely that.

Hank Paulson started down just this road last July. Bank stocks soared. Then he turned on a dime. Washington needed somebody to punish and felt it couldn't impose haircuts on uninsured depositors and bondholders. That left only shareholders, who have been allowed to face vast dilution and/or government takeover based on mark-to-market regulatory capital standards.

Yet the truth is, you get little or no moral hazard bang from punishing bank shareholders. Equity investors, by definition, accept the risk of losing 100% of their stake in return for unlimited upside. Go ahead and wipe out shareholders: Markets will turn around and create the next 50-to-1 leveraged financial institution as long as the potential return outweighs the risk.

The only real fix for moral hazard, in some future regulatory arrangement, would be truly to dispel the belief of bondholders and uninsured creditors that they will be bailed out.

That's a subject for another day. The recent devastation of bank equity values wasn't inevitable but was a choice (an addled and perhaps not entirely conscious one) by policy makers trying to make sure bank shareholders didn't benefit from the massive safety net rolled out for banks.

As strategies go, it was a terrible one. It greatly increased the toll the banking crisis imposed on the economy, and the cost that fixing the banks will impose on taxpayers. But there's still a chance to avoid a disastrous, taxpayer-financed government takeover of the banking system. The alternative, just as Mr. Buffett spelled it out, begins with forbearance on capital standards.

7) What is a depression?
By Calculated Risk

It seems like the "D" word is everywhere. And that raises a question: what is a depression? Although there is no formal definition, most economists agree it is a prolonged slump with a 10% or more decline in real GDP.

Yesterday I heard an analyst say that a 10% unemployment rate is a depression. But the unemployment rate peaked at 10.8% in 1982, and that period is usually not considered a depression.

Some people argue the duration of the economic slump defines a depression - and the current recession is already 15 months old. That is longer than the recessions of '90/'91 and '01. The '73-'75 recession lasted 16 months peak to trough, and the early '80s recession (a double dip) was classified as a 6 month recession followed by a 16 month recession (22 months total). Those earlier periods weren't "depressions", so if duration is the key measure, the current recession still has a ways to go.

Q1 2009 is estimated at a -7.0% decline in real GDP (Seasonally adjusted annual rate). This will push the cumulative decline (peak to trough) to about 3.4%.

Even though the current recession is already one of the worst since 1947, it is only about 1/3 of the way to a depression (assuming a terrible Q1).

To reach a depression, the economy would have to decline at about a 6.6% annual rate each quarter for the next year.

The Great Depression saw real GDP decline 26.5%.

The post-WWII recession lasted 8 months and saw real GDP decline 13%. This decline in GDP was due to winding down the war effort - something that was celebrated - and is excluded when analysts call the current slump the "worst since the Great Depression".

I still think a depression is very unlikely. More likely the economy will bottom later this year or at least the rate of economic decline will slow sharply. I also still believe that the eventual recovery will be very sluggish, and it will take some time to return to normal growth.

As I noted last weekend, business cycles have a typical pattern (see Business Cycle: Temporal Order). Housing and personal consumption usually lead the economy out of recession - and both of these areas will probably be slow to recover this time.


This business cycle there are reasons that housing will not be a significant engine of recovery. It is possible - see Looking for the Sun - that new home sales and housing starts will bottom in 2009, but any recovery in housing will probably be sluggish.

That leaves Personal Consumption Expenditures (PCE) - and as households increase their savings rate to repair their balance sheets, it seems unlikely that PCE will increase significantly any time soon. So even if the economy bottoms in the 2nd half of 2009, any recovery will probably be very sluggish.

At least we know what to watch: Residential Investment (RI) and PCE. The increasingly severe slump in CRE / non-residential investment in structures will be interesting, but that is a lagging indicator for the economy.

(1) In recent recessions, unemployment significantly lagged the end of the recession. That is very likely this time too.

8) Obama signs 'imperfect' spending bill in private
By PHILIP ELLIOTT

Calling it an "imperfect" bill, President Barack Obama signed a $410 billion spending package Wednesday that includes billions in earmarks like those he promised to curb in last year's campaign. He insisted the bill must signal an "end to the old way of doing business." The massive measure supporting federal agencies through the fall contains nearly 8,000 pet projects, earmarked by sponsors though denounced by critics.

Obama defended earmarks when they're "done right," allowing lawmakers to direct money to worthy projects in their districts. But he said they've been abused, and he promised to work with Congress to curb them.

"I am signing an imperfect omnibus bill because it's necessary for the ongoing functions of government," Obama declared. "But I also view this as a departure point for more far-reaching change."

In a sign of his discomfort with the bill, Obama signed it in private. He declined to answer a shouted reporter's question about why.

Obama also released a "signing statement" in which he said several of the bill's provisions raised constitutional concerns. This week, Obama criticized his predecessor, George W. Bush, for frequently issuing such statements upon signing bills into law. Bush attached the statements to legislation he viewed as placing unconstitutional limits on executive power.

Running for president, Obama denounced the many pet projects as wasteful and open to abuse — and vowed reform.

He said Wednesday that future earmarks must have a "legitimate and worthy public purpose" and that any earmark for a private company should be subject to competitive bidding rules. He said he would "work with Congress" to eliminate any the administration objects to.

He acknowledged that the system of influential lawmakers inserting earmarked projects has bred cynicism, and he declared, "This piece of legislation must mark an end to the old way of doing business."

White House officials in recent weeks have dismissed criticism of the earmarks in the bill, saying the legislation was a remnant of last year and that the president planned to turn his attention to future spending instead of looking backward.

Obama's modest reform proposals build upon changes initiated by Republicans in 2006 and strengthened by Democrats two years ago. Most importantly, every earmark and its sponsor would have to be made public.

In new steps — outlined in concert with House Democratic leaders Wednesday morning — the House Appropriations Committee will submit every earmark to the appropriate executive branch agency for a review. And any earmark designed to go to for-profit companies would have to be awarded through competitive bidding.

Obama promised to resurrect a long-defunct process by which the president proposes to cut spending from bills that he has signed into law.

Under this "rescissions" process, the White House sends Congress a roster of cuts for its consideration. Congress is free to ignore the cuts, but both Obama and senior members including Appropriations Committee Chairman David Obey, D-Wis., say they want to use it to clean out bad earmarks that make it through the process.

Obama declined to endorse a stronger process advocated by Sen. John McCain, R-Ariz., and others that would require Congress to vote on a presidential rescission earmark package. Senior Democrats dislike the idea even though many of them backed it in the early- to mid-1990s.

During his presidential campaign, Obama promised to force Congress to curb its pork-barrel-spending ways. Yet the bill sent from the Democratic-controlled Congress to the White House on Tuesday contained 7,991 earmarks totaling $5.5 billion, according to calculations by the Republican staff of the House Appropriations Committee.

The 1,132-page bill has an extraordinary reach, wrapping together nine spending bills to fund the annual operating budgets of every Cabinet department except Defense, Homeland Security and Veterans Affairs. Among the many earmarks are $485,000for a boarding school for at-risk native students in western Alaska and $1.2 million for Helen Keller International so the nonprofit can provide eyeglasses to students with poor vision.

Most of the government has been running on a stopgap funding bill set to expire at midnight Wednesday. Refusing to sign the newly completed spending bill would have forced Congress to pass another bill to keep the lights on Thursday or else shut down the massive federal government. That was an unlikely possibility for a president who has spent just seven weeks in office.

The $410 billion bill includes significant increases in food aid for the poor, energy research and other programs. It was supposed to have been completed last fall, but Democrats opted against election-year battles with Republicans and former President George W. Bush


9) At the Welfare Office

A guy walked into the local welfare office to pick up his check. He marched straight up to the counter and said, ' Hi. You know, I just HATE drawing welfare. I'd really rather have a job.'

The social worker behind the counter said, ' Your timing is excellent. We just got a job opening from a very wealthy old man who wants a Chauffeur and bodyguard for his beautiful daughter.

You'll have to drive around in his 2009 Mercedes-Benz CL, and he will supply all of your clothes. Because of the long hours, meals will be provided. You'll also be expected to escort the daughter on her overseas holiday trips.

Now this is rather awkward to say but you will also have as part of your job assignment to satisfy her sexual urges as the daughter is in her mid-20's and has a rather strong sex drive..

A two-bedroom loft type apartment with a 60" plasma TV, stereo, bar, etc. Located above the garage, will be designated for your sole use and the salary is $200,000 a year.'

The guy, just plain wide-eyed, said, ' You're bullshittin' me!

The social worker said, ' Yeah, well.. You started it.'

9) Local Government Credit Crunch: Federal crowd-out and inflation risk will make it hard for states and cities to borrow.
By NICOLE GELINAS

President Barack Obama's $3.6 trillion budget designates $36 billion for transportation infrastructure. State governors and legislatures should spend that money wisely -- and even more importantly, they should use the remaining $229 billion they're getting in stimulus money to put their fiscal houses in order. If they don't, they risk burdening their constituents with devastating taxes in the near future.

Local and state governments face such peril in part because the federal government is about to saturate the market for U.S.-based debt -- including debt issued by municipalities -- as it props up failed financial institutions and distributes stimulus money. The federal government could overwhelm the credit markets. In the third quarter of 2008 alone, the amount of federal-government debt surged by 39%. This was "the largest quarterly growth rate recorded," the Federal Reserve recently reported.

It likely will get worse. Treasury debt held by investors around the world is slated to surge by 98% between now and 2013. That's overwhelming even in a growing market.

It's easy to see how such issuance could engulf demand for other types of private and public borrowing here and around the world. Even if the appetite for total credit-market debt were to increase as dramatically as it did over the past five years -- highly unlikely -- the federal government would be on pace to soak up 22% of that new demand. (The federal government's share before 2008 was just 10%.) In a stagnant or shrinking credit market, private and municipal borrowers would have to fight very hard with Uncle Sam to get attention.

It's also quite possible that demand for U.S.-based debt will shrink overall as China, for one, invests more money domestically with its own stimulus plan. Plus, at some point, global markets are going to worry that if the U.S. can find no more lenders, we won't be able to shrink our debt burden without devaluing our currency.

Lower demand in an oversaturated market -- plus the risk of inflation -- means higher Treasury rates, which will push interest rates up for everyone, including corporations and municipalities.

If that happens, healthy corporate borrowers might have some flexibility. Multinationals with operations elsewhere and heavy exporters have some choice, however limited, to borrow in other currencies and pay the debt back with revenue generated in those currencies.

Municipal borrowers, on the other hand, are stuck with dollars. Though their investors get huge tax exemptions, those benefits might be overwhelmed by two factors.

The first is that global wealth, particularly in high-net-worth, debt-dependent states like New York and California, continues to be destroyed. So there may be less demand for tax-sheltered securities.

The second is that if the stimulus retards recovery rather than speeding it up, more municipalities will be at real risk of default. That's dangerous, because right now municipalities are among a few classes of borrowers without a quasi-explicit guarantee from the federal government.

If investors decide to demand such a guarantee as municipal finances continue to deteriorate, the government may have a harder time assuaging their fears. The bailout boat is already sinking under the weight of AIG; it may not have room for Arnold Schwarzenegger.

Unfortunately, the stimulus bill will quite possibly retard recovery. The bill encourages yet more spending on education and health care rather than on public works that would improve private-sector productivity.

Governors should take these risks seriously. Instead, a few, including New York Gov. David Paterson, have called on the federal government to do more of what it shouldn't: spend scarce federal resources to bail out failed municipal-bond insurers.

What Mr. Paterson and his colleagues should do is shout to Washington that reckless federal borrowing hurts the ability of cities, towns and states to borrow, and thus infringes on their own sovereignty. At home, the governors should ensure that they're getting the biggest bang for every stimulus buck by investing in the right public infrastructure, like faster mass transit for productive urban centers.

It's a golden hour for governors to make good decisions -- finally -- about how to spend finite money. If they don't, they may pay for their own, and the federal government's, bad decisions over and over again.