The last few chapters of "Game Change" were incendiary with respect to Palin and Biden.
Palin was viewed by many of McCain's senior handlers as unwilling to dedicate herself to preparation, was testy, moody and difficult. Some even were concerned about her mental state. No one seemed to acknowledge the fact that she energized crowds, raised a lot of campaign funds but was never included in the inner circle.
McCain never said anything negative regarding Palin and the authors acknowledged Palin had been thrown into the arena as unprepared raw meat. Palin was under tremendous pressure to learn a great deal all under the most difficult circumstances.
In Palin's autobiography, which I have read and reported on earlier, she obviously places herself in a more favorable light. The truth is probably somewhere in between. Palin may eventually rise to the occasion if she commits to do so but she has a long way to go and should not seek higher office any time soon until she has walked the walk.
Biden was himself and as the campaign wound to a conclusion his continuing goofy off the cuff comments were harmful and one was particularly and personally offensive to Obama. Biden eventually apologized after prodding from one of his senior staffers.
The last chapter discusses Hillary's reluctance to accept Obama's Sec. of State offer because she was tired, deep in debt, which she felt an immediate obligation to pay off, and was concerned about how she could contain 'ole Bill.' She eventually decided she could not refuse Obama and the nation and accepted his surprising and sincere offer.
I still maintain "Game Change' is a worthy read. The authors were successful in interviewing all the major players and participants, set forth their method of reporting when quoted and when attributed. No doubt they also took some poetic license in expressing their own biases.
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McCain is still good at quips and has a sense of humor. (See 1 below.)
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Israel's Uri Lubrani's long held view of supporting Iran's dissenters is gaining credibility as prospects for a successful Israeli military solution seems to have faded and certainly Obama has no predilection in a military direction.
In fact even the Saudis are disturbed and confused by Obama's stand.
Meanwhile, Gates tries to explain America's position on Iran.
From everything I know our olicy is one of abject surrender predicated on the flimsy belief sanctions will bring Iran to its knees. It certainly may bring pain to Iranians but I believe it is a long shot when it comes to bringing Iran to its knees but strange things can and often do happen.
Finally, Israel's Chief of Staff indicated Israel is prepared for all contingencies. (See 2, 2a and 2b below.)
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Conventional wisdom suggests Obama's health care efforts will fail. They may but personally I would not count Obama out because he is persuasive, smart, dedicated and always willing to lie and flip and flop. These same ingredients got him elected and have served him all of his life and he sees no reason to change nor probably could he.
Today the Chief Justice responded to the rebuke by Obama during his SOTU address and I applaud Chief Justice Roberts for doing so.(See 3, 3a and 3b below.)
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Today is the tenth anniversary of the Dow's peak. Andy Kessler reviews some of the seminal events that caused it, occurred during the past ten years and lessons to be learned. He concludes, the next chapter will evolve when the Fed ceases its mis-allocation of resources.(See 4 below.)
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Bret Stephens writes a poignant article about Iraq's struggle with Democracy against the background of American self-doubters. Iraqis have demonstrated they favor their new found luxuries, ie. right to vote, read a variety of newspapers etc. In fact they seem to relish freedom just as we are losing our taste for it. (See 5 below.)
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Lying is an acceptable past time for politicians and now Pelosi might be caught in the web she spun about her accusational relationship with the CIA. (See 6 below.)
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Obama is not a leader he is an imposer - maybe even an imposter. His next victim could be Israel according to Ted Belman. Meanwhile, Abbas uses the proposal to build more homes as an excuse to get out of negotiations again.(See 7, 7a, 7a and 7c below.)
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Obama asserts Republicans have been obstructionists. Yes, they have because they have allowed Democrats to engage in a public display proving how disorganized they are fighting among themselves and engaged in all kind of back room deals to get the Stupaks's of the world aboard Obamascare!
What is so patently phony about Obamascare economics is that taxes for a program that takes kicks in four years later. In other words, pay for your new car, the dealer will park it in the garage and then you can use it four years later.
But Pelosi pronounced a humdinger of a suggestion today - pass the bill without knowing what is in it then we will make changes! It is so DDD government - Democrat Destruction Derby! (See 8 below.)
Dick
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1) "I take exception to folks saying that Bernanke, Obama, Reid and Pelosi are spending like drunken sailors. When I was a drunken sailor, I quit spending when I ran out of money."
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2)Israeli Faith in Iran's Opposition Gains Favor .
By CHARLES LEVINSON
TEL AVIV—Israel's oldest civil servant, 83-year-old Ministry of Defense adviser Uri Lubrani, has spent his career defying conventional wisdom on Iran.
Today, Israel's political and military establishment appears to be tilting toward one of his long-ignored views: Israeli support for Iran's opposition movement—and not a miltary strike—is the best way to combat the regime in Tehran.
Israeli officials have regularly suggested the country is ready to attack Iran to curb its nuclear program, which some Israelis view as a threat to the country's existence.
After the rise of the Iranian protest movement following disputed elections in June, Israeli leaders toned down the rhetoric. In February, Prime Minister Benjamin Netanyahu, visiting Moscow, said Israel wasn't "planning any wars" against Tehran.
Instead, U.S. and Israeli officials are pushing for tough economic sanctions they hope will drive a bigger wedge between President Mahmoud Ahmadinejad and the opposition.
"A military strike will at best delay Iran's nuclear program, but what's worse, it will rally the Iranian people to the defense of the regime," says Mr. Lubrani, who was ambassador to Iran from 1973 to 1978 and is now a special adviser to Israel's minister of defense. "We must do everything possible to help (the protest movement) do the job."
Rafi Eitan, an adviser to Mr. Netanyahu, says the protests "changed people's attitudes here. They started to understand that this should be done the way Lubrani has been saying it should be done."
The Israeli defense establishment includes those who favor a more aggressive posture toward Iran, including a military strike if necessary, and those who oppose the military option. But even hawkish officials interviewed in recent months stressed they were aware of the risks of military action. Officials expressed support for sanctions, and said they weren't eager to attack.
Mr. Lubrani has for four decades been on the front lines of Israel's evolving relationship with Iran—from close ally to bitter foe. For much of that time, he warned that Iran's theocratic regime posed the Mideast's biggest threat, a view overlooked for years.
All the Right Places A few Lubrani career highlights
Pre-1948: Fought for Israel's pre-statehood militia. 1952-1961: Senior aide to Prime Minister Ben Gurion. 1963-1967: Ambassador to Uganda. Survived plane crash with Idi Amin. 1967-1971: Ambassador to Ethiopia. Smuggled first Ethiopian Jew to Israel. 1973-1978: Iran ambassador.1983-2000: Managed the Israeli government's activities in Lebanon. .
Heading Israeli government activities in Lebanon since 1983, he was one of the first to warn of Iran's growing influence among the country's Shiites. His recommendations were largely neglected and Hezbollah soon emerged as one of Israel's most potent foes.
"Lubrani was one of the few, the very few, to identify that Israel should find a way to the Shiites before Iran did," recalls retired Brig. Gen. Shimon Shapira, who was an intelligence officer in Lebanon at the time.
More recently, as Iran's nuclear program grew and Washington and Israel hardened their views, Mr. Lubrani's calls to support what appeared to be a beaten-down opposition seemed out of touch.
Mr. Lubrani says that witnessing the Iranian revolution gave him faith in the power of the Iranian people to affect change. From a remote seventh-story ofge in an old Ministry of Defense building, he oversaw a four-man team that quietly supported the Iranian opposition and sowed unrest inside Iran's borders.
Many saw him as a relic of the past, whose idea of fomenting revolution had long gone out of fashion, says a senior defense official. In May, the defense ministry shut his department.
Then, Iran erupted in street protests following June presidential elections.
Many Israeli officials remain convinced that Iranian Supreme Leader Ayatollah Ali Khamenei is as entrenched as ever. Mr. Lubrani remains unbowed.
Admirers point to his track record as reason to heed his advice. Mr. Lubrani was named ambassador to Iran in 1973, after a string of posts as envoy to countries neighboring Israel's Arab enemies. In 1977, Mr. Lubrani was summoned to the Shah's private resort island of Kish—giving him a first-hand look at the bubble of decadence the Shah had retreated into, he says. Kish had a landing strip serving a Concorde jet that airlifted delicacies to the island each day from Paris and kept the island's boutiques stocked with the latest French fashions, recalls Mr. Lubrani.
After returning to Tehran, he ran into Iran's long-time prime minister, Amir Abbas Hoveyda, who openly called the island "a pit of corruption and decadence," a striking breach of diplomatic protocol, says Mr. Lubrani.
Mr. Lubrani warned Israel's foreign minister, Moshe Dayan, that the regime's days were numbered, according to Mr. Lubrani and senior government officials at the time.
Harold Rhode, who retired last month after 28 years as a Pentagon analyst, much of it focused on Iran, says "Lubrani's warning got back to Washington, and the CIA laughed at it. The U.S. told Israel it's not true."
Mr. Lubrani's successor was evacuated just weeks after arriving in Tehran, as the Islamic Revolution swept the country.
"Uri is by far the best authority Israel has on Iran," says Bernard Lewis, the influential Middle East historian and a decadeslong friend of Mr. Lubrani. "He's demonstrated that on more than one occasion by being right when everybody else was wrong, and he still has difficulty getting anyone to listen to him."
2a)Gates clarifies US Iran policy in Riyadh after Biden fails in Israel
US Secretary of Defense Robert Gates arrived in Riyadh Wednesday, March 10, flying in unexpectedly from Kabul in Afghanistan, after the Saudis demanded urgent clarifications of the Obama administration's Iran policy. The demand followed the failure of US Vice President Joe Biden's talks with Israeli leaders to resolve their differences on Iran.
As a result, two senior US officials are visiting to Middle East capital simultaneously and are under pressure to deal with the Iranian nuclear question.
Gates was closeted with Saudi rulers although it was as recently as Feb. 15 that Secretary of State Hillary Clinton visited Riyadh and explained Washington's strategy on Iran to King Abdullah and several senior Saudi princes. But she failed to allay her hosts' intense concerns that the US was doing enough to abort Iran's nuclear weapons program..
Then on Sunday, March 7, US Centcom Commander Gen. David Petraeus, asked by a CNN interviewer, whether countries in the Persian Gulf wish to see a US military attack on Iran, said: “…there are countries that would like to see a strike, us or perhaps Israel, even...”
In Israel, where the media are obsessed with the slightest Arab or Palestinian utterance, none cited the US general's comments.
Military sources report Petraeus' comments referred mainly to the two main Persian Gulf state, Saudi Arabia and the United Arab Emirates. In fact, the UAE foreign minister, referring to the assassination of Hamas member al-Mabhouh, noted this week that his country and Israel see eye to eye on the Iranian issue.
Reports of the Biden conversations in Jerusalem Tuesday have reached Riyadh. They reveal that not only is the Obama administration leaning hard on Israel to abstain from attacking Iran, but is even retreating from harsh sanctions. Such penalties have no been put on hold for five months.
The Saudis are as deeply alarmed by the latest American stance on Iran is as the Israelis.
US sources reported that no sooner did the US defense secretary land in Riyadh from Kabul when he was summoned to dinner with King Abdullah and the Saudi defense minister, Crown Prince Sultan. They admitted that he would be required "to present an update to Saudi officials who are intensely concerned about Iran's nuclear program and the fate of the American-led effort to impose new sanctions on Tehran."
2b)Chief of Staff: "Ready for any threat - from near and far"
By Jonathan Urich
On Tuesday evening, the Chief of the General Staff, Lt. Gen. Gabi Ashkenazi,
during his visit to the United States, spoke at the annual dinner hosted by
the Friends of the Israel Defense Forces (FIDF). "I am telling you from this
stage: We will triumph over those who seek to destroy us. We will win thanks
to the courage of our soldiers and their moral compass," said Chief of the
General Staff in his speech, at an event held at New York's Waldorf Astoria
Hotel.
In his speech, Lt. Gen Gabi Ashkenazi emphasized that "Iran was the main
threat to world peace, and gradually attempting to harvest regional
instability through its proxies: Hezbollah, Hamas and other terrorist
organizations. Therefore the international community must stop the Iranian
nuclear program for its own sake.
"All options should remain on the table. We are developing advanced weapons
and technologies and increasing the number of military exercises and
training, while raising reserve troops' readiness for war. We are doing this
to be ready for any threat - from near and far," he added.
Close cooperation between the IDF and the U.S.
On Tuesday morning (Mar. 9), the Chief of the General Staff attended several
short work meetings in Washington, during which he met with senior officials
at the White House, Senate and Pentagon including a meeting with National
Security Advisor Jim Jones. In addition, he met with U.S. Chairman of the
Joint Chiefs of Staff, Admiral Michael Mullen, who recently visited Israel.
The meeting lasted about an hour and a half, and focused on the Iranian
threat.
During his speech at the FIDF dinner in New York, Lt. Gen. Ashkenazi
referred to the close cooperation between the IDF and the U.S. army and
noted that one example of our successful cooperation was the Juniper Cobra 10 - an exercise which tested the missile defense system collaboration. He continued by
stating that "these steps reflect significant progress in expanding the
dialogue, cooperation and readiness of the two armies."
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3)Why Obama Can't Move the Health-Care Numbers: For every voter who strongly favors the plan, two are strongly opposed
By SCOTT RASMUSSEN AND DOUG SCHOEN
One of the more amazing aspects of the health-care debate is how steady public opinion has remained. Despite repeated and intense sales efforts by the president and his allies in Congress, most Americans consistently oppose the plan that has become the centerpiece of this legislative season.
In 15 consecutive Rasmussen Reports polls conducted over the past four months, the percentage of Americans that oppose the plan has stayed between 52% and 58%. The number in favor has held steady between 38% and 44%.
The dynamics of the numbers have remained constant as well. Democratic voters strongly support the plan while Republicans and unaffiliated voters oppose it. Senior citizens—the people who use the health-care system more than anybody else and who vote more than anybody else in midterm elections—are more opposed to the plan than younger voters. For every person who strongly favors it, two are strongly opposed.
Why can't the president move the numbers? One reason may be that he keeps talking about details of the proposal while voters are looking at the issue in a broader context. Polling conducted earlier this week shows that 57% of voters believe that passage of the legislation would hurt the economy, while only 25% believe it would help. That makes sense in a nation where most voters believe that increases in government spending are bad for the economy.
When the president responds that the plan is deficit neutral, he runs into a pair of basic problems. The first is that voters think reducing spending is more important than reducing the deficit. So a plan that is deficit neutral with a big spending hike is not going to be well received.
But the bigger problem is that people simply don't trust the official projections. People in Washington may live and die by the pronouncements of the Congressional Budget Office, but 81% of voters say it's likely the plan will end up costing more than projected. Only 10% say the official numbers are likely to be on target.
As a result, 66% of voters believe passage of the president's plan will lead to higher deficits and 78% say it's at least somewhat likely to mean higher middle-class taxes. Even within the president's own political party there are concerns on these fronts.
A plurality of Democrats believe the health-care plan will increase the deficit and a majority say it will likely mean higher middle-class taxes. At a time when voters say that reducing the deficit is a higher priority than health-care reform, these numbers are hard to ignore.
The proposed increase in government spending creates problems for advocates of reform beyond the perceived impact on deficits and the economy. Fifty-nine percent of voters say that the biggest problem with the health-care system is the cost: They want reform that will bring down the cost of care. For these voters, the notion that you need to spend an additional trillion dollars doesn't make sense. If the program is supposed to save money, why does it cost anything at all?
On top of that, most voters expect that passage of the congressional plan will increase the cost of care at the same time it drives up government spending. Only 17%now believe it will reduce the cost of care.
The final piece of the puzzle is that the overwhelming majority of voters have insurance coverage, and 76% rate their own coverage as good or excellent. Half of these voters say it's likely that if the congressional health bill becomes law, they would be forced to switch insurance coverage—a prospect hardly anyone ever relishes. These numbers have barely moved for months: Nothing the president has said has reassured people on this point.
The reason President Obama can't move the numbers and build public support is because the fundamentals are stacked against him. Most voters believe the current plan will harm the economy, cost more than projected, raise the cost of care, and lead to higher middle-class taxes.
That's a tough sell when the economy is hurting and people want reform to lower the cost of care. It's also a tough sell for a president who won an election by promising tax cuts for 95% of all Americans.
Mr. Rasmussen is president of Rasmussen Reports and author of "In Search of Self-Governance" (CreateSpace, 2010). Mr. Schoen, formerly a pollster for President Bill Clinton, is the author of "The Political Fix: Changing the Game of American Democracy from the Grass Roots to the White House" (Henry Holt, 2010).
3a)Five Words Obama Won't Say:How the president debates health care.
By WILLIAM MCGURN
'When I use a word,'" Humpty Dumpty said, in rather a scornful tone, 'it means just what I choose it to mean—neither more nor less.'"
Like the famously cracked egg in the Lewis Carroll fantasy, Barack Obama refuses to be bound by conventional English. Words like "choice" and "competition" are thrown around in ways that mean the opposite of how most Americans understand them. Once Americans do understand how he's been using a word, moreover, it changes—in the way that a second "stimulus" suddenly becomes a "jobs bill." Other words simply disappear.
The Dumpty dynamic is especially pronounced in the home stretch of the health-care debate. During a boisterous rally yesterday at Arcadia University outside Philadelphia, the president thumped that the time for "an up-or-down vote on health care" has come, and today he follows up with remarks in St. Louis.
In the interests of furthering understanding of this debate, here are five words Mr. Obama now avoids unless forced to comment by some reporter or Republican lawmaker:
• Reconciliation. Last Wednesday the president called for Senate Democrats to use reconciliation to ram a health-care bill through Congress. In the same way he called for a second stimulus back in November without ever saying it, however, "reconciliation" did not cross Mr. Obama's lips as he endorsed it. Instead, he spoke of a vote that is "nothing more than a simple majority."
The White House Web page suggests the last time the president uttered the word "reconciliation" in the context of health care was a dismissive answer to a question from John McCain during the bipartisan summit. "I think the American people aren't always all that interested in procedures inside the Senate," he told the Arizona Republican—notwithstanding that Americans seem very much interested in the procedures that led to the Cornhusker Kickback or a federal judgeship for a wavering House Democrat's brother. Not to mention Mr. Obama's own statement in October 2007 that "we are not going to pass universal health care with a 50-plus-one strategy."
• Cadillac. In his town-hall meetings last summer the president spoke frankly of the problem posed by so-called "Cadillac" insurance plans. These are expensive policies, provided by employers, that give people more coverage than what they would choose if they had to buy them on their own, without the tax advantage that comes from getting insurance through their jobs.
In September, Mr. Obama told CNN, "I do think that giving a disincentive to insurance companies to offer Cadillac plans that don't make people healthier is part of the way that we're going to bring down health-care costs for everybody over the long term." In other words, a tax on employer-provided health coverage over a certain level.
Then, in January, he agreed to a big exemption for unions. In his own proposal released last month, he scaled the tax down for everyone and delayed implementation. As a result, Cadillac is not a word the president brings up himself these days.
• C-SPAN. On the campaign trail, Mr. Obama loved the word C-SPAN. As he stated at one point, "we'll have the [health-care] negotiations televised on C-SPAN, so the people can see who is making arguments on behalf of their constituents and who is making arguments on behalf of the drug companies or the insurance companies." Alas, it hasn't turned out that way, and C-SPAN is a word that Mr. Obama no longer volunteers.
• Health-care reform. OK, he still says this. But sometime last summer, after the protests, the official name for ObamaCare became "health-insurance reform."
This signaled both a ratcheting down of his original ambitions for universal coverage, and a ratcheting up of the rhetoric against the corporate villains who would serve as his foil. Thus yesterday's remarks in Pennsylvania, where the president warned that evil insurance companies will keep on raising premiums "for as long as they can get away with it" unless Congress acts now.
• Mandate. During the Democratic presidential primary, Mr. Obama slammed rival Hillary Clinton over the individual mandate. "The main difference between my plan and Senator Clinton's plan," he said, "is that she'd require the government to force you to buy health insurance and she said she'd 'go after' your wages if you don't."
Now the Senate and House bills include a mandate that would force Americans to do just that. When asked about it at the recent health-care summit, Mr. Obama did concede he's flip-flopped. But because the word smacks of "force," "mandate" went unmentioned yesterday—and will likely stay that way.
So listen closely as the health-care debate comes down to the wire. The words the president won't say are more telling than the words he will.
3b)White House Vs. Supreme Court: It's Getting Ridiculous
Posted by Jan Crawford
For the life of me, I just don't get why the White House continues to try to pick a fight with the Supreme Court. I've suggested before that perhaps it's a sign President Obama intends to tap an outsider when John Paul Stevens retires, so he can beat the drum that the Court is out of touch with everyday Americans.
But after Chief Justice John Roberts made some entirely reasonable remarks yesterday -- and White House Press Secretary Robert Gibbs just had to respond -- it's now getting ridiculous.
Whether the White House has a short-term or long-term strategy or no strategy at all, it's flat-out absurd and ill-advised for the administration to think it should always have the last word. It's like my 6-year-old: "I don't LIKE your idea. I like MY idea."
It wasn't enough that Mr. Obama, for the first time in modern history, took a direct shot at the Supreme Court in his State of the Union address, when he slammed the justices for their recent campaign finance reform decision. Six of them looked on -- including the author of the opinion, key swing vote Anthony Kennedy -- while Democrats jumped up to whoop and holler.
All that, of course, was too much for Justice Samuel Alito, who shook his head and silently mouthed, "not true."
The next day, the White House just couldn't let it rest. It again had to have the last word. It put out a "fact sheet," trying to prove it was Mr. Obama -- not Justice Alito -- who was right.
Now the Chief Justice, speaking yesterday at the University of Alabama Law School, has weighed in. Responding to a question from a clearly insightful Alabama law student, Roberts said he thought the whole scene was "very troubling."
"To the extent the State of the Union has degenerated into a political pep rally, I'm not sure why we're there," Roberts said.
He didn't slam Mr. Obama for singling out the Court, as some have done. He said people have a right to criticize the Court if they disagree with a decision.
"I have no problems with that," Roberts said. "On the other hand, there is the issue of the setting, the circumstances and the decorum. The image of having the members of one branch of government standing up, literally surrounding the Supreme Court, cheering and hollering while the court - according the requirements of protocol - has to sit there expressionless, I think is very troubling."
And he's right. The justices have to sit there with their hands in their laps and their faces blank. They can't be seen as taking sides -- they may have to decide some of these issues some day. Justice Scalia has said they look like bumps on a log. And that's why some justices won't go to the State of the Union address -- and why none of them probably ever will again after this year's dressing down from the president.
But once again, the White House has to try to get the last word. Last night, Gibbs struck back at Roberts.
"What is troubling is that this decision opened the floodgates for corporations and special interests to pour money into elections - drowning out the voices of average Americans," Gibbs said. "The president has long been committed to reducing the undue influence of special interests and their lobbyists over government. That is why he spoke out to condemn the decision and is working with Congress on a legislative response."
Maybe it's because he's an Auburn guy and the Chief Justice was talking to law students at the University of Alabama (or, as we like to say, "the University"), but Gibbs should have let this go.
This administration is going to have to be dealing with this Supreme Court for at least three more years, if not more. Its lawyers are going to have to appear before these justices to defend presidential initiatives or federal laws in case after case, big and small.
I'm not suggesting they won't get a fair shake simply because the White House is trying to stick it to the conservative justices. George Bush repeatedly got slapped down by this Court, even though he never lashed out at the justices.
But at some point -- and I'd say that point is now -- the Obama Administration is working against its interests.
They'd do well to remember that on a lot of the issues they care about, the Supreme Court gets to decide. No matter how much they stomp their feet and shout, "I don't LIKE your idea; I like MY idea," the Supreme Court is going to get the last word.
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4)Lessons of a Dow Decade: Capital misallocation is usually a fallout of bad government policy.
By ANDY KESSLER
A year ago yesterday, the world almost ended. The stock market was in free fall, with the Dow Jones Industrial Average bottoming out at 6547, down from its Oct. 9, 2007 peak of 14164. Financials were in a death spiral and there was even talk of nationalization. Citigroup hit $1.05, GE traded at $7.41 and golden Goldman Sachs was given away at $73.95. A bear market extraordinaire.
Contrast this with 10 years ago today, when the dot-com-laden NASDAQ peaked at 5048. Then we had the opposite mentality—companies like Pets.com were going to fundamentally reshape the economy in the new millennium through a nirvana of spectacular growth and well being. Or something like that. A bull run extraordinaire.
No one would blame you for thinking the market is a textbook delusional-paranoid-schizophrenic, not knowing the difference between the real and unreal. And you'd be right. But you'd miss a valuable lesson. Misallocation of capital is everywhere and anywhere a fallout of bad government policy. The South Sea Company, a government sponsored entity with a monopoly on trade, caused the South Sea Bubble in 1720.
The late '90s Internet love fest was crazy enough, driven by former FCC Chairman Reed Hundt's misguided telecom reform that had the effect of keeping data rates artificially high. This created a gold rush to install fiber and build applications that didn't make economic sense (though electronic commerce, online banking, as well as wireless and broadband deployment would eventually prove productive over the next decade). Bad policy meant capital got overallocated and too quickly, as momentum mutual funds (momos) and day traders furiously drove up stock prices of every company with dot-com in its name for no fundamental reasons. Wall Street trading was broken.
Then, adding insult to injury, Alan Greenspan and the Federal Reserve flooded the system with money, fearing that banks would face a run brought on by the Y2K problem. The problem and the run never happened. The money ended up in the market. Mopping up that money burst the bubble. The market bottomed out on Oct. 9, 2002, when the Nasdaq hit 1114.
And the world after 9/11? Unfortunately, the accounting scandals at Enron, WorldCom and elsewhere brought us the costly Sarbanes-Oxley law, adding a complex regulatory burden so that many companies fear going public. We also got a decoupling of research from investment banking because of an alleged conflict of interest, and a Federal Reserve whose nightmare fears of deflation ushered in a long era of cheap credit.
Instead of finishing what the dot-com era started to deliver—a productive, wealth-producing economy—capital was seduced into the financial lair of private equity and real-estate mortgages. Trillions were pumped into unneeded housing stock. Fannie and Freddie fanned the flames, and then fizzled and failed. And leveraged buyouts reigned. Even in 2007, one Blackstone private equity fund raised almost as much money as all of the venture capital industry.
And now? The bear market of a year ago may have ended because of the Geithner Plan, Treasury stress tests and TARP money injected onto bank balance sheets. You can go with that narrative if you'd like. Or maybe it was a change in the mark-to-market rules so banks no longer had to write down their toxic subprime loans. But the reality is that on March 18, 2009, Ben Bernanke and the Federal Reserve began their $1.2 trillion quantitative easing, buying Treasurys and mortgages and pumping dollars into a deleveraging economy. Hair of the dog. More cheap credit that again ended up in the market, helping banks refinance.
Today, we are still left with almost no initial public offerings. While private equity fund-raising was down 68% in 2009 to $96 billion, venture capital barely raised $13 billion.
Capital gains taxes are set to return to 20% on Jan. 1, 2011. And worse, investing is as uncertain as ever. No one wants to fund health care, medical devices or even much biotech if they can't figure out how they are going to be paid via reimbursements from ObamaCare. Energy investing is also a mess. And while "green" investing is booming, with few exceptions that is about efficiency rather than productivity. There's a big difference: You can make the Post Office more efficient while e-mail makes us more productive and wealthier.
Big regulated oligopolists control our communications infrastructure. Startups are nowhere to be found. Few are willing to take the risk of true venture investing.
It's been 10 long years since the economy has created real wealth, as opposed to easy-credit induced real-estate or paper wealth. Amidst all the current confusion over health care and tax rates and energy and banking reforms, maybe it's time that the market transitions back to investments that drive productivity and increase living standards rather than just paper profits.
I'm not saying the market should transition or it ought to—you don't tell the market what to do. As we know from one and 10 years ago, the market works in weird ways and makes these transitions in the fog of something else, in this case it's the Fed's life support that is misallocating capital. When that ends, look for new eras to begin.
Mr. Kessler, a former hedge fund manager, is the author of "How We Got Here" (Collins, 2005).
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5)Iraqis Embrace Democracy. Do We? Seven years after liberation, Western critics have been proven wrong.
By BRET STEPHENS
In 2002, a presidential election was held in Iraq. Saddam Hussein won it by a margin of 11,445,638 to zero. "Whether that's because they love their leader—as many people said they do—or for other reasons, was hard to tell," reported CBS News's Tom Fenton from Baghdad.
You can't say they aren't fair and balanced over at CBS.
Another election has now been held in Iraq, this time involving 19 million voters, 50,000 polling stations, 6,200 candidates, 325 parliamentary seats and 86 parties. In the run-up to the vote, the general view among Iraqis and foreign observers alike was that the outcome was "too close to call." Linger over the words: "Too close to call" has never before been part of the Arab political lexicon.
But democracy has finally arrived, first by force of American arms, next by dint of Iraqi will. It's a remarkable thing, not just in the context of the past seven years of U.S. involvement, or the eight decades of Iraq's sovereign existence, but in the much longer sweep of Arab civilization. Paleontologists have described similar moments in evolution, when some natural cataclysm permits a nimbler class of animals to take the place of the planet's former masters.
Just so in Iraq: the Cretaceous period of the T Rex and the pterosaur is at last drawing to a close. George W. Bush, in all his subtlety, was their mass-extinction event.
In the West it's a different story. Among the most remarkable trends of recent years has been the disenchantment with the very idea of democracy.
It's a trend that expresses itself in various ways: the admiration for authoritarian (typically Chinese) efficiencies; the sense that democracies are incapable of rising to the "challenges" of health care and global warming; the distaste for the tea parties in the U.S. But nowhere has it been more consistent than in the West's commentary about Iraq.
It began nearly on the day that Saddam's statue in central Baghdad was brought down by American soldiers as jubilant Iraqis looked on. "This war was not worth a child's finger," wrote the English novelist Julian Barnes in a Guardian op-ed. That was published fully a year before the insurgency got underway, when the argument could not be made—as it was later made—that democracy is all well and good but that order of any kind, even tyrannical order, is much to be preferred.
For the next seven years, the insurgents murdered coalition soldiers and Iraqi civilians with equal abandon, right up to the morning of the election. Yet somehow the killing sprees (grotesquely replete with the cutting off of children's fingers) were treated by the world's great opiners not as the acts of evil men to be confronted and stopped, but purely as a function of the American presence in Iraq.
In this strange moral calculus, all the blood that was shed—including American blood—was on America's hands. It was also, by implication, a stain on America's "experiment" of "imposing" democracy on so obviously unwilling a people.
In the midst of those bloodbaths, the U.S. ceded civilian control to Iraqi authorities, who then conducted four democratic elections. I still remember the incredulity among the war's opponents, bordering on open dismay, when the parliamentary elections five years ago proved an inspiring success.
But the critics could relax, at least for a few years: The killing in Iraq did not abate. Successive Iraqi prime ministers were treated with none of the deference Western diplomats would routinely accord the masters of Egypt or Vietnam or even Syria. The division of Iraq was a respectable topic of conversation.
And yet throughout all of this, Iraqis somehow held fast to their idea of a democratic country. How was that possible? How could they not behave according to type, as inveterate sectarians and anti-Americans? Didn't they perhaps miss the political clarity that dictatorship uniquely provides?
The late Michael Kelly knew the answer, and the answer was that Iraqis, unlike most of us in the West, knew tyranny, and therefore also knew what it meant to thirst for freedom. Writing just before his untimely death on the road to Baghdad, he observed:
"Tyranny truly is a horror: an immense, endlessly bloody, endlessly painful, endlessly varied, endless crime against not humanity in the abstract but a lot of humans in the flesh. It is, as Orwell wrote, a jackboot forever stomping on a human face.
"I understand why some dislike the idea, and fear the ramifications of, America as a liberator. But I do not understand why they do not see that anything is better than life with your face under the boot. And that any rescue of a people under the boot (be they Afghan, Kuwaiti or Iraqi) is something to be desired. Even if the rescue is less than perfectly realized. Even if the rescuer is a great, overmuscled, bossy, selfish oaf. Or would you, for yourself, choose the boot?"
I still miss Kelly. Sunday's election was his vindication, too.
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6)Nancy Pelosi and the CIA: Who's Lying Now?
By Jane Jamison
Along with her difficulties ramming health care down our throats, House Speaker Nancy Pelosi (D-CA) has an ugly, slightly "cobwebbed" credibility issue that is about to get dusted off and given full, sunlit exposure due to new documents being pried loose by court order.
Pelosi's "credibility" is under scrutiny due to her unusually harsh criticism of the Central Intelligence Agency last year. When liberals began flapping indignantly a few years ago over "enhanced interrogation techniques" such as waterboarding, which were used on detained terrorists after 9/11, the CIA defended itself in 2009, saying that certain members of Congress had been aware of the interrogations for years and had done nothing to stop them. It turned out that one of the most outspoken critics of the so-called "torture" techniques, Speaker Pelosi, attended a briefing or briefings.
Ensnared in her own word-web after she had so vociferously criticized the Bush administration for "torturing" terrorists, an indignant Pelosi called a news conference in May 2009 to make the remarkable or reckless assertion that the CIA was "misleading the Congress of the United States" about her knowledge and/or complicit approval of any waterboarding or other tough interrogation tactics and that "they [the CIA] mislead us all the time."
"The CIA briefed me only once on enhanced interrogation techniques in September 2002 in my capacity as ranking member of the Intelligence Committee. I was informed then that the Department of Justice opinions had concluded that the use of enhanced interrogation techniques were legal. The only mention of waterboarding at that briefing was that it was not being employed," Pelosi said today, reading from a prepared statement.
Terror suspect Abu Zubaydah was subjected to waterboarding 83 times in August 2002, the month prior to when Pelosi was briefed about enhanced interrogation techniques.
Republicans in Congress have been calling since last year for the CIA to release all briefing minutes to determine who in Congress knew what and when about "torture" or enhanced interrogations -- and which, if any, approved of the methods. Democrats like Pelosi had called for a "truth commission" to investigate the Bush administration's treatment of terrorists, but after the CIA released part of the briefing information, Pelosi, Senate Majority leader Harry Reid, and the Obama administration backed away from the idea. What, did the truth not serve them?
Despite Ms. Pelosi's "suggestions" to release all briefing memos, a major public interest agency has been forced to file lawsuits to get them.
Judicial Watch, the public interest group that investigates and prosecutes government corruption, has received through the Freedom of Information Act (FOIA) a CIA "Top Secret" memorandum which may be one of the first pieces of evidence to show that Speaker Pelosi indeed was briefed about the tough interrogations of terrorists in U.S. detention. More memos are being sought which may show how many meetings she attended and what she asked, said, and did.
Judicial Watch:
The following are excerpts from the Memorandum, dated July 14, 2004:
Summary of testimony by DOD Official, Lt. Gen. William Boykin: "At this point, General Boykin read a prepared statement to the Committee in which he asserted that interrogation is a critically valuable tool, and, citing observations made by service personnel at Ft. Bragg, said that the most [imp]ortant factor in the capture of Saddam Hussein was interrogation."
Summary of testimony by member of the CTC (Counterterrorism Center), name redacted: "...Even today long term detainees like Khalid Shayk Muhammed and Zubaydah are providing good information because their histories go back a long way and often a tidbit they provide, while not initially operationally significant, ends up being the piece that completes the puzzle; DC/CTC closed by noting that he was personally persuaded that detainee reporting has saved lives."
Rep. Jane Harman: "What do you think of the value of enhanced techniques?" John Pistole, Witness for the FBI: "In my view the benefits are huge and the costs are insignificant. Very few detainees don't provide us with good information...."
Rep. Ruppersberger: "Are there procedures that we have stopped that should be resumed?" Lt. Gen. Keith Alexander, the Army G-2, [now Director of the National Security Agency (NSA)]: "Yes. Diet and sleep management. Those, plus segregation which is still employed, are key..."
General Alexander also testified that field commanders wanted more "97E's" (interrogators), "even to the point of trading off some of their combat troops."
Saddam Hussein was not subjected to enhanced interrogation techniques, but "friendly discussions with an eye to future public prosecution."
In February, Judicial Watch released documents, previously marked "Top Secret," indicating that between 2001 and 2007, the CIA briefed at least 68 members of Congress on the CIA interrogation program, including so-called "enhanced interrogation techniques." The documents include the dates of all congressional briefings and, in some cases, the members of Congress in attendance and the specific subjects discussed. House Speaker Nancy Pelosi, who previously denied she was briefed by the CIA on the use of these techniques, is specifically referenced in a briefing that took place on April 24, 2002 regarding the "ongoing interrogations of Abu Zubaydah."
Again, return to Ms. Pelosi's May 2009 news conference assertion that she was briefed "only once" about the interrogations and that the briefing was in September of 2002.
April 15 is the court's deadline for the CIA to produce the rest of the briefings memoranda to Judicial Watch per the court's order, so it should be clear then who was at which meeting and what was said.
"We are now beginning to get a very clear picture of what members of Congress knew about so-called enhanced interrogation techniques and when they knew it," said Judicial Watch President Tom Fitton. "Intelligence officials repeatedly informed members of Congress that enhanced interrogation techniques are effective and save lives. It is little wonder why the Obama administration would try to keep these documents hidden, given the administration's ideological hostility to these effective interrogation techniques."
Once the full truth is known from the CIA memos, Pelosi will be caught in a web of her own making. Then what? It's unlikely that the House Speaker will apologize or retract her accusation. The time and effort spent by watchdogs like Judicial Watch to bring out the truth years after Pelosi's CIA slander (or careless words) may not reap any immediate penalty to her, but maybe it will affect her reelection in November.
Ms. Pelosi has been entrenched in the Congress for 23 years, rarely challenged in her San Francisco district. Perhaps after this credibility "clunk," even California Congressional District 8 liberals will finally be sufficiently offended or embarrassed by Ms. Pelosi's many missteps. These would include but not be limited to Pelosi's self-entitled $2.1-million expenditure of government funds over two years for an Air Force jet for her and her family's use, including more than $100,000 for catering and alcoholic beverages aboard said jet, and $1.1 million of taxpayer funds to squire a delegation of 106 people to the purpose-challenged Copenhagen climate summit. Ms. Pelosi has also been listed as one of "Congress' Top Ten Most Corrupt Politicians" in 2007, 2008, and 2009.
Meanwhile, many federal dollars were no doubt expended to have CIA staff review, redact, and unsuccessfully fend off the release of records which are proving the House Speaker to be "misleading." It is certainly very expensive to have Nancy Pelosi in Congress. There are two able Republicans running who hope to replace her.
Jane Jamison is publisher of the conservative news/commentary blog, UNCOVERAGE.net.
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7)Obama Aims to Impose a Solution on Israel
By Ted Belman
During the lead up to his election victory, he surrounded himself with a host of vehemently anti-Israel advisors including Lee Hamilton, Zbigniew Brzezinski, Samantha Power, Susan Rice and Gen Jones, many of whom advocated imposing a solution on Israel..
He also made common cause with Jewish leftists represented by J Street and Israel Policy Forum who were urging him to increase the pressure on Israel and if that didn't work, to impose a solution on Israel.
So it was no surprise that he started his term of office by attacking Israel, America's best and most steadfast ally, declaring that all settlements were illegal and demanding a complete settlement construction freeze east of the greenline including in Jerusalem. He went so far as to repudiate the US commitment set out in the Bush letter '04 to Sharon, declaring there was no agreement. Elliot Abrams and others involved in the negotiations which led to the letter, testified otherwise.
This letter also affirmed that "as part of a final peace settlement, Israel must have secure and recognized borders, which should emerge from negotiations between the parties in accordance with UNSC Resolutions 242 and 338." Pres Bush had always supported a negotiated settlement and this letter did likewise. Noticeably absent was any reference to the Saudi Plan. The letter also contained a commitment, that "the United States will do its utmost to prevent any attempt by anyone to impose any other plan".
By repudiating this letter as a U.S. commitment, Pres Obama opened the way for a settlement to be imposed according to the Saudi Plan rather than Res 242.
He set a goal of achieving an agreement in two years. One year is up, what has he accomplished? At first blush, it would appear, not much. But the reality is otherwise.
He got PM Netanyahu to agree to a two-state solution for the first time and to the terms of reference for negotiations, namely, "an outcome which ends the conflict and reconciles the Palestinian goal of an independent and viable state based on the 1967 lines, with agreed swaps, and the Israeli goal of a Jewish state with secure and recognized borders that reflect subsequent developments and meet Israeli security requirements." These terms leave very little wiggle room so it does not matter that Pres Obama agreed with PM Netanyahu's demand that there be no pre-conditions or that negotiations not start where Ehud Olmert left off.
Noticeably absent from the terms of reference were Jerusalem and refugees, two items that could scuttle talks and probably will. Pres Obama is on record of wanting Jerusalem divided and not favoring the return of refugees to Israel
He also got Netanyahu to agree to a temporary constructions freeze, not near what he was demanding, but enough to enable him to get Abbas to agree to the proximity talks.
Since attaining these building blocks, Pres Obama's has witnessed falling approval ratings and increasing pressure to focus on domestic issues. How will this affect the progress made?
The Arab League has given its support to "proximity talks" but only for four months. This has enabled Abbas to likewise agree. The talks therefore will start soon and end before the temporary freeze ends. But no one expects an agreement to be reached.
The U.S. managed to accomplish this by sending a document to the Palestinians responding to their enquires which provided, "We expect both parties to act seriously and in good faith. If one side, in our judgment, is not living up to our expectations, we will make our concerns clear and we will act accordingly to overcome that obstacle,"
The document also committed the US to "sharing messages between the parties and offering our own ideas and bridging proposals." and reiterated "Our core remains a viable, independent and sovereign Palestinian State with contiguous territory that ends the occupation that began in 1967,"
This commitment by the U.S. was a determining factor in the Palestinians' and the Arab League's decision to agree to the U.S. proposal on indirect talks.
Both the agreed terms of reference above quoted and this document imply that Israel must return all occupied territories rather than some occupied territories as was the original intention of Res 242.
One wonders why PM Netanyahu would enter fruitless negotiations that would result in Israel being blamed and ultimately dictated to. In doing so, PM Netanyahu abandoned Israel's previous demands for direct negotiations thereby allowing the Arab League to have a say. For that matter, Abbas also abandoned a long held position that only the PA can negotiate on behalf of the Palestinians.
The Arab League has thus given Obama four months only to achieve an agreement, failing which it will take over of the process. Pres Obama is only too happy to pass the buck.
When the Arab League announced their support, their Secretary General said;
"We intend in four months time to bring back the whole of the peace process to the Security Council thus ending the role of honest broker role played so far by the US and to put an end to the peace process.
"We will put the results of the talks before the Security Council and then ask this important body in charge of maintaining peace and security to decide on the steps forward."
This in effect would abrogate the Oslo Accords and the Roadmap which heretofore have been considered binding.
Pursuant to Article 33, of the United Nations Charter, members, Israel included, who are "parties to any dispute, the continuance of which is likely to endanger the maintenance of international peace and security, shall, first of all, seek a solution by negotiation, enquiry, mediation, conciliation, arbitration, judicial settlement, resort to regional agencies or arrangements, or other peaceful means of their own choice" and the Security Council "shall, when it deems necessary, call upon the parties to settle their dispute by such means."
.
Israel could well be ordered to submit to arbitration or judicial settlement. Perhaps this is the reason PM Netanyahu keeps reaffirming Israel's desire to negotiate.
The Security Council has the "primary responsibility for the maintenance of international peace and security". In fact, Article 37 provides, "If the Security Council deems that the continuance of the dispute is in fact likely to endanger the maintenance of international peace and security, it shall decide whether to take action under Article 36 or to recommend such terms of settlement as it may consider appropriate." Chapter VII gives the Security Council the right to enforce these recommendations.
You can be sure that the Arab League is well aware of these provisions. It is highly doubtful that the US will veto any such move.
The EU is already on board. European Union foreign policy chief, Javier Solana, told a British audience in London on Saturday,
"After a fixed deadline, a UN Security Council resolution should proclaim the adoption of the two-state solution,"
"It would accept the Palestinian state as a full member of the UN, and set a calendar for implementation. It would mandate the resolution of other remaining territorial disputes and legitimize the end of claims."
"If the parties are not able to stick to it [referring to the UN-imposed timetable -ed.], then a solution backed by the international community should be put on the table."
Solana added that the UN-imposed "two-state solution" should include resolution of issues such as control over Israel's capital, the city of Jerusalem, as well as border definitions, security arrangements and the "right of return" by millions of foreign descendants of Arab refugees who abandoned their homes during the 1948 war..
Netanyahu will thus be faced with making the best deal he can for fear of a worse deal being imposed. He can also decide to reject the authority of the United Nations resulting in Israel's expulsion and the imposition of serious sanctions.
Speaking of serious sanctions, it appears unlikely they will be imposed on Iran. Israel's only option then is the military one the sooner the better.
Pres Obama may well decide to posture as Israel's defender and save her from the worst thereby improving his re-election chances without jeopardizing the imposed solution. For him, a win-win all around, that is, if Israel doesn't reject it.
Ted Belman is the Editor of Israpundit. and is currently residing in Jerusalem, Israel.
7a) Arab League chief: Palestinians pull of talks
Palestinians won't be entering indirect talks with Israel at this time, Arab League Chief Moussa says Wednesday night, following organization's urgent session held in wake of Israel's east Jerusalem construction plans
Arab League chief Amr Moussa said on Wednesday that Palestinian President Mahmoud Abbas told him he would not enter indirect talks with Israel.
"The Palestinian president decided he will not enter into those negotiations now ... the Palestinian side is not ready to negotiate under the present circumstances," Moussa told a news conference following an urgent meeting of Arab delegates at the Arab League headquarters in Cairo.
The Arab League, which recently endorsed indirect talks between the Palestinians and Israel, convened on Wednesday an emergency session following Israel's decision to build 1,600 new housing units in east Jerusalem.
The league's Arab peace initiative committee called on Arab foreign ministers to reconsider their support for the talks they extended on March 3.
"In case of the failure to stop the Israeli measures immediately ... the committee concludes that the proposed talks are irrelevant," the committee's statement said.
Secretary-General Moussa cut short his visit to Qatar in order to attend the meeting. Syrian representative to the Arab League, Ambassador Yosef Ahamad said that Israel's decision justifies Damascus' objection to the renewal of negotiations with the Jewish State.
During a joint press conference with Qatari Prime Minister Sheikh Hamad Bin Jassim Bin Jabr al-Thani, Moussa said, "We will study Israel's position and formulate recommendations that will be presented to the ministers and later on to the Arab Summit slated to convene in Libya at the end of the month."
Al-Thani condemned Israel's plan to expand construction around Jerusalem and said that a clear Arab response must be put forth. He added that Israel's position is placing the Arab League's decisions at risk.
"We demand peace with Israel, and demand an immediate peaceful resolution. This is not a warning but an advice for the leaders of Israel," he said.
The construction plan, which was announced during US Vice President Joe Biden's visit to Israel, stirred a diplomatic flurry and embarrassed the Prime Minister's Office.
Biden publicly criticized Israel's decision and said during a news conference with Palestinian President Mahmoud Abbas in Ramallah, "Yesterday the decision by the Israeli government to advance planning for new housing units in east Jerusalem undermines that very trust, the trust that we need right now in order to begin ... profitable negotiations."
Abbas, for his part, urged Israel to commit to the peace process and refrain from taking steps that might impede it.
He had agreed to a proposal to resume the US-mediated negotiations after a 14 month hiatus due to the backing from Arab countries.
"The Palestinians remain committed to peace as a strategic choice on the basis of two states co-existing side by side according to the '67 borders, with Jerusalem as the capital of the Palestinian state," he said.
7c)Israel exerts sovereign right to its capital as Biden looks on astounded
By Paul Richter
In the midst of a high-profile visit by Vice President Joe Biden, Israel on Tuesday unveiled plans for new housing in disputed Jerusalem, a surprise step that embarrassed and angered the highest-ranking Obama administration official yet to visit the country.
Biden, who had come to promote new peace talks and to smooth the Obama administration's strained relations with a longtime ally, instead denounced Israel's plans to build 1,600 new housing units in East Jerusalem as a threat to the search for peace.
"I condemn the decision by the government of Israel to advance planning for new housing units in East Jerusalem," Biden said, calling it "precisely the kind of step that undermines the trust we need right now."
"We must build an atmosphere to support negotiations, not complicate them," Biden said.
The sharp turn of events abruptly changed the tenor of the trip in its second day, coming just hours after the vice president proclaimed his love for Israel and declared enduring U.S. support. Biden's visit followed a year of tension brought on by Israel's defiance of the Obama administration's admonitions on precisely the same issue: housing settlements in disputed areas.
In Washington, the White House added its own criticism. But it was unclear how deeply the latest step by Israel would affect ties between the two countries, which have been strained by tensions over the Jewish state's hardline security measures.
Aides said Biden raised the issue with Israeli Prime Minister Benjamin Netanyahu at a dinner given in honor of the vice president's visit. U.S. officials have repeatedly warned Israel that such development in Jerusalem would anger Palestinians and further threaten prospects for peace.
Biden is to deliver a major address on U.S.-Israeli relations on Thursday. He will also meet with Palestinian and Jordanian officials.
However, Israelis sought to downplay any relation between Tuesday's announcement and Biden's visit, saying the housing plans have been years in the making and that Netanyahu, who appeared in public with Biden only hours earlier, had no idea it they were being unveiled.
Nonetheless, the plans by the Israel Interior Ministry to build the 1,600 homes for Israelis in the Ramat-Schlomo neighborhood of Jerusalem cast a dark shadow over Biden's visit, which was aimed at strengthening frayed ties between the two allies.
Palestinian leaders consider such housing moves a threat to the future Palestinian presence in a city they hope will someday be their capital, and the announcement brought quick protests. Palestinian officials said the announcement was timed to Biden's visit and called for a strong U.S. response.
A spokesman for Palestinian President Mahmoud Abbas described the Israeli move as "dangerous" and said it would "torpedo negotiations and the American effort even before they start."
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8)Bart Stupak Has Problems
Michigan Democrat Bart Stupak has problems.
Big problems.
Here's the situation. He and his bloc of pro-life Democrats want Stupak's pro-life language in the final health care bill. The talk of late is that this might be done by inserting the Stupak language into the reconciliation bill that is currently being negotiated. Here's how this scenario would go down: the House votes for the Senate bill, which does not have the Stupak language; then it votes for the reconciliation "fixer," which does have the Stupak language; then the Senate votes for the reconciliation fixer; in the end, the Stupak language becomes law.
That's a mess.
For starters, Stupak has to hold his anti-abortion coalition through the House. He did this in November - convincing the Speaker that he had enough votes to kill the House health care bill unless he got his pro-life language inserted into it. He has to do this again now.
But then he has an even bigger problem: the Senate.
Senate Republicans want us to believe that they'll move to strike any Stupak language from the reconciliation bill. One of the best Captiol Hill reporters in the business, David Drucker, has the details on GOP bluster:
Republicans, hoping to sow doubts among House Democrats about reconciliation's prospects for passing the Senate, revealed Tuesday they intend to raise procedural objections over any abortion language that shows up in a reconciliation package -- even if it toughens prohibitions against federal funding. Specifically, Republican Senators plan to raise a budget point of order, a procedural move objecting to the reconciliation process that requires 60 votes to defeat.
This is what is known as a non-credible threat. Don't believe this for a minute.
The reason is simple: Senate Republicans will not have an opportunity to kill the main health care bill. By the time the reconciliation bill comes to the floor of the Senate - the main bill that they hate will have passed the House and likely will have become the law of the land (assuming that the Democrats don't find some Rube Goldberg legislative device to make the Senate act on reconciliation first). Thus, Senate Republicans will face the following choice: health care reform with the Stupak language or health care reform without the Stupak language.
That's really no choice at all.
We can represent this graphically with a decision tree:
The idea here is that the House goes first. If they fail to pass the main bill and the reconciliation "fixer" bill, health care reform dies. If they pass them, then only the reconciliation bill goes to the Senate. Senate Republicans have no opportunities to attack the main bill. Thus, they are faced with a choice: main bill plus Stupak language or main bill minus Stupak language. A large majority prefer the Stupak language, so they do not raise a Point of Order on this.
Remember, we must always assume that members of Congress only care about process insofar as it affects policy. When faced with a choice between retaining the Stupak language or maintaining the integrity of the Byrd rule (ha!), they'll go for Stupak seven days a week and twice on Sunday.
Importantly, the GOP will raise a Point of Order if and only if it expects that the objection will move the final product closer to the party's preferences. So, if you're a House Democrat who wants a certain liberal provision to get into the reconciliation bill, but you're worried that it might not survive the Byrd rule, you do have reasons to worry. The GOP will probably raise a Point of Order against your provision. But Stupak wants to move the package to the right. The Senate Republicans are not his problem.
The Senate Democrats are.
Steny Hoyer has a negotiating advantage in dealing with the Stupak issue in the House. He can bring the liberals together with Stupak and say, "Look, guys - we all want health care reform. If we don't find common ground, we're not going to get anything!" This is probably why Stupak said he is more optimistic - Hoyer has indicated a recognition of the problem and a willingness to talk with Stupak.
HOWEVER
Suppose that the House Democrats agree to put Stupak's language into the reconciliation bill. As I said, the Senate GOP will likely go along with it when it gets to the Upper Chamber - but Senate Democrats likely will not. After all, by the time the reconciliation bill has come up for a vote in the Senate, the main bill will already be the law of the land. Thus, the Hoyer pitch of "We have to find common ground or else there's no bill" will be inoperative. Senate Democrats will thus face this choice: they can have health care with Stupak language or health care without Stupak language.
That's really no choice at all.
Senate Democrats are bound to reject the Stupak language, just like they did in December. Specifically, somebody like Barbara Boxer will raise a Point of Order against the Stupak language to get it stricken from the reconciliation bill. The parliamentarian will presumably advise that the objection is valid - and 60 votes will be required to overturn the ruling to strike it. A majority of Senators will probably vote to overturn it - just as a majority voted for Stupak language in December - but it will fall short of the needed 60 vote supermajority. (Side prediction: the liberals who have been huffing and puffing about the supermajority requirements in the Senate will not be terribly upset by this.)
Graphically, the decision tree looks like this:
This is Stupak's real problem. Lots of Democratic House members have expressed concerns about the trustworthiness of the Senate. Stupak has the most reasons to worry.
I think the only solution for Stupak is somehow to find a way for the Senate to act first on abortion. This is the most important point: when Stupak and his bloc cast their votes in the House, their leverage is completely gone. That's the only power they have in the process. If they are induced to go first, they will lose to the Senate liberals.
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