George Mitchell's job as Middle East Special Envoy has got to be terribly frustrating for a man whose life story has been one success after another.

But the Israel-Palestine conflict tends to be a career destroyer. Former Secretary of State Colin Powell was the most popular political figure in the United States when he went to the region to kick-start negotiations during the George W. Bush administration.

Read more »

Last week I related a fable about War, Taxes and the City State of Florence, the point of which is that when you start taxing the rich for the wars, the wars happen less often. Carl Levin gets behind the idea today.

Carl Levin, chairman of the Senate Armed Services Committee, said higher-income Americans should be taxed to pay for additional troops sent to Afghanistan and that NATO should provide half of the new soldiers.

I can't wait for Rush Limbaugh and Glenn Beck to start a 9/12 Protest about the War Tax on the multi-million dollar paychecks.

A friend of mine who is the publisher of a very successful news site has a joke: In the future the Internet will consist entirely of Sarah Palin slide shows. Anyone who's ever had occasion to look at traffic statistics for a news website understands what he's saying. Few things draw in readers and garner clicks more reliably than articles (or, even better, pictures) of Sarah Palin. We can't look away. We can't stop talking about her even when we desperately want to. The very fact that we've been blogging about her all week attests to that.

My first experience of this Sarah Palin effect came during the Republican National Convention in St. Paul. As a progressive opinion journalist who routinely reports on conservatives, you come to develop a kind of practiced disassociative state when behind enemy lines. You'd never be able to gain any understanding whatsoever if you spent all your time arguing with and hectoring people at evangelical colleges or anti-immigration rallies, so it's both psychologically and professionally necessary to put yourself in a state of mind where you simply listen.

On the night Palin gave her big debut national speech, I sat through the speeches that preceded hers in that same slightly removed state. Then Palin came to the stage. The crowd grew more and more raucous, and the room began to feel like a Roman Colosseum. When Palin went after the "reporters and commentators" in the "Washington elite" for having disparaged and condescended to her, the crowd erupted and began pointing and jeering at Tom Brokaw, sitting in the NBC booth. I watched all this still, I thought, with equanimity.

About a third of the way through the speech, when she delivered her infamous potshot at community organizers--

"I guess a small-town mayor is sort of like a community organizer, except that you have actual responsibilities"--

I suddenly felt like the room was 100 degrees. Realizing my face was burning with heat, I went to touch my cheeks, which felt feverish. I couldn't for the life of me understand what was going on, and was about to get up for a breath of fresh air or water until it hit me: I was furious.

My father is a community organizer and spent years toiling in some of the poorest neighborhoods in New York, doing the painstaking, unglamorous work of attempting to build power among people who were routinely getting screwed over. And Sarah Palin had just spit in his face.

Despite my best efforts, she had gotten to me.

What I was experiencing was a strange kind of dislocation: Palin had managed to bypass one part of my brain and reach down deep into another. There are two kinds of politics: There's politics of the prefrontal cerebral cortex, the politics of analysis and facts and discussion, and there's politics of the limbic system, the sub-rational, emotional, ancient part of the brain that controls the bodily responses like the blood flushing my cheeks in that seat in the Xcel Energy Center.

As degraded as our politics may be, it's impossible for me to imagine a politician as purely limbic as Sarah Palin ever managing to ascend to the White House. But democratic politics in a heterogeneous society like ours is inevitably tribal, and millions of Americans view her as their vessel and their chief. The political potency of someone who can provoke that kind of visceral reaction shouldn't be underestimated.

Chris Hayes, along with Jane Hamsher, Amanda Marcotte and Michael Tomasky, speculate more on Palin's political future and a 2012 run for the Presidency in the closing forum of "Going Rouge: An American Nightmare," from OR Books. Comments and discussion are welcome though: After all we've seen this week, what is she up to? Is she running in 2012, or just trying to cash in?

It's getting fun over at the Atlantic.

Andrew Sullivan has been getting better and better on the Israeli-Palestinian issue. After a decade or so of keeping quiet on the 42-year occupation (probably to avoid offending his Likud mentor, Martin Peretz), Sullivan is saying what he really thinks.

And Sullivan's current Atlantic colleague is taking it personally. Jeff Goldberg complains about Andrew breaking with him publicly on Israel. "This is the thanks I get," Goldberg writes, "for defending him [Sullivan] as a Zionist."

Of course, not everyone thinks being labeled a Zionist is a compliment. It seems to me that Sullivan is even-handed, as sympathetic to Palestinian aspirations for a state in West Bank/Gaza/East Jerusalem as he is to a Jewish state within the '67 borders.

He is also one of the most influential journalists in the world.

Goldberg, ever predictable, is discomfited by Sullivan who is anything but. The Gaza war has succeeded in opening another pair of very significant eyes.

Also, Phil Weiss on New York Times columnist Roger Cohen demolishing WSJ's Brett Stephen on Iran at a synagogue debate. Beautiful.

NOTE: MEDIA MATTERS will begin distributing my weekly column on the Mideast after Thanksgiving. If you want to received it by e-mail, write to me at mjrosenberg8@gmail.com. Write subscribe in the subject line.

First there was Medicare for all 300 million of us. But that was a non-starter because private insurers and Big Pharma wouldn't hear of it, and Republicans and "centrists" thought it was too much like what they have up in Canada -- which, by the way, cost Canadians only 10 percent of their GDP and covers every Canadian. (Our current system of private for-profit insurers costs 16 percent of GDP and leaves out 45 million people.)

So the compromise was to give all Americans the option of buying into a "Medicare-like plan" that competed with private insurers. Who could be against freedom of choice? Fully 70 percent of Americans polled supported the idea. Open to all Americans, such a plan would have the scale and authority to negotiate low prices with drug companies and other providers, and force private insurers to provide better service at lower costs. But private insurers and Big Pharma wouldn't hear of it, and Republicans and "centrists" thought it would end up too much like what they have up in Canada.

So the compromise was to give the public option only to Americans who wouldn't be covered either by their employers or by Medicaid. And give them coverage pegged to Medicare rates. But private insurers and ... you know the rest.

So the compromise that ended up in the House bill is to have a mere public option, open only to the 6 million Americans not otherwise covered. The Congressional Budget Office warns this shrunken public option will have no real bargaining leverage and would attract mainly people who need lots of medical care to begin with. So it will actually cost more than it saves.

But even the House's shrunken and costly little public option is too much for private insurers, Big Pharma, Republicans, and "centrists" in the Senate. So Harry Reid has proposed an even tinier public option, which states can decide not to offer their citizens. According to the CBO, it would attract no more than 4 million Americans.

It's a token public option, an ersatz public option, a fleeting gesture toward the idea of a public option, so small and desiccated as to be barely worth mentioning except for the fact that it still (gasp) contains the word "public."

And yet Joe Lieberman and Ben Nelson mumble darkly that they may not even vote to allow debate on the floor of the Senate about the bill if it contains this paltry public option. And Republicans predict a "holy war."

But what more can possibly be compromised? Take away the word "public?" Make it available to only twelve people?

Our private, for-profit health insurance system, designed to fatten the profits of private health insurers and Big Pharma, is about to be turned over to ... our private, for-profit health care system. Except that now private health insurers and Big Pharma will be getting some 30 million additional customers, paid for by the rest of us.

Upbeat policy wonks and political spinners who tend to see only portions of cups that are full will point out some good things: no pre-existing conditions, insurance exchanges, 30 million more Americans covered. But in reality, the cup is 90 percent empty. Most of us will remain stuck with little or no choice -- dependent on private insurers who care only about the bottom line, who deny our claims, who charge us more and more for co-payments and deductibles, who bury us in forms, who don't take our calls.

I'm still not giving up. I want every Senator who's not in the pocket of the private insurers or Big Pharma to introduce and vote for a "Ted Kennedy Medicare for All" amendment to whatever bill Reid takes to the floor. And if this fails, a "Ted Kennedy Real Public Option for All" amendment. Let every Senate Democratic who doesn't have the guts to vote for either of them be known and counted.

- Hundreds of Billions of Dollars for State Public Plans in Bill

Here's the good news from the Senate bill: of the 31 million uninsured projected to gain coverage under the Senate plan by 2018, the Congressional Budget Office projects that two-thirds of them will gain coverage via some form of public plan. Yes, the limited public option will enroll only a projected 4 million folks, but expansions in Medicaid and SCHIP will enroll 15 million more people than would be expected under current law. 54 million people will be covered by Medicaid, CHIP or the public option by 2018.

Step back from the mechanics and the dollars invested are impressive. $347 billion in additional funds will go directly to Medicaid and CHIP programs.

• By 2014, most nonelderly people with incomes below 133 percent of the federal poverty line would be made eligible for Medicaid. The government would pay for this whole expansion through 2016 and roughly 90% of the costs thereafter.
• Federal support for childrens health insurance plans (CHIP), which cover kids much farther above the poverty line, would expand to an average of 93% of costs under the bill.
• States would pay a total additional $25 billion over the ten-year period.

On top of those directly in public plans, there will be $447 billion in federal funds to subsidize individuals buying into health insurance exchanges and $27 for small employers to subsidize employee health care.  The projection is that the average subsidized enrollee in the exchanges will receive $5500 per enrollee to help pay their health insurance costs.

But here's the better news, under Section 1332 of the bill, states could apply for waivers and convert their state residents' share of health insurance exchange credits and small employer credits into their own more comprehensive state health care program.

Read more »

Sarah Palin did not write Going Rogue. And neither did her ghost writer, evangelical author Lynn Vincent. They may have put the words on the page, but they did not control the message of the book.

It's obvious to anyone who has been following Palin since before her VP pick that what she has done in this book is to methodically collect every criticism and accusation that has been leveled against her, and then attempted through the book to explain it away either by blaming others or by flat out denial. This book was really written by those that Palin calls the "opposition research." It's a strange peek into Palin's brain that leaves one wondering whether she is a consummate psychological manipulator, or whether she is simply a reactionary who portrays the world she inhabits in her own mind.

Read more »

How can the stock market hit new highs at the same time unemployment is hitting new highs? Simple. The market is up because corporate earnings are up. Corporate earnings are up because companies are cutting costs. And the biggest single cost they’re cutting is their payrolls. So they let people go and, presto, their balance sheets look better and their stock prices rise.

In the old-fashioned kind of recession decades ago, big companies laid off people with the expectation of rehiring them when the economy turned up. Then a few recessions back, companies started laying off people for good, never rehiring them even when the economy recovered.

In the Great Recession of 2008-2009, companies are going a step further. They’re using this sharp downturn to cut payrolls even below where they were when times were good. Outsourcing abroad, setting up shop in China and elsewhere, contracting out, replacing people with software and automated machines – they're doing whatever it takes to get payrolls down so earnings bounce up.

Caterpillar earned $404 million in the third quarter, or 64 cents a share. Analysts had expected only 5 cents. Caterpillar’s stock is up 165 percent since March. How did Caterpillar do it? Not by selling more bulldozers. It did it by cutting over 37,000 jobs.

The result, overall, is an asset-based recovery, not a Main Street recovery. Yes, the economy is growing again, but the surge in productivity is a mirage. Worker output per hour is skyrocketing because companies are generating almost as much output with fewer workers and fewer hours.

The Fed, meanwhile, has become an enabler to all this, making it as cheap as possible for companies to axe their employees. Money costs so little these days it’s easy to substitute capital for labor. It’s also easy to buy up foreign assets with cheap American money. And it’s now blissfully easy for Wall Street to borrow money almost free and buy all sorts of interests in foreign assets, especially commodities. That's why we're seeing the prices of foreign commodities and other assets go through the roof.

At the same time, the Treasury continues to be fixated on keeping banks afloat. The Administration's mortgage mitigation efforts are lagging. Small businesses are starved of credit. The White House has announced a "jobs summit," which is better than nothing but not nearly as good as pushiing immediately for a larger stimulus, a new jobs tax credit, and a WPA-style jobs program.

The Fed and the Teasury have, in effect, placed a huge bet on a recovery driven by asset prices. That’s a bad bet. The great disconnect between the stock market and jobs is pushing stock prices way out of line with the real economy. This isn't sustainable.

No economy can recover without consumers. Yet American consumers, who constitute 70 percent of the U.S. economy, are facing mounting job losses as well as pay cuts. They’re in no mood to buy and won’t be for some time.

Where is this heading? No place good. Without a major shift in policy -- both at the Fed and in the White House -- the economics point to a big stock-market correction and a double dip. The politics point to substantial losses for Democrats next year.

Representative Mel Watt (D-NC) is out to protect the independence of the Fed from the risk of an intrusive audit from the Government Accountability Office (GAO). The risk comes in the form of a bill initiated by Ron Paul and Alan Grayson that calls for an audit of the Fed. The bill, which now has more than 300 co-sponsors, would allow Congress to find out who the Fed lent more than $2 trillion to through its special lending facilities, and under what terms. Congress would also be able to find out which countries were allowed to take advantage of dollar swaps at the peak of the financial crisis last fall.

Allowing our elected representatives to know what our central bank (the Fed) is doing with our money might seem reasonable, but not to Mr. Watt. He has proposed an alternative which would keep this information secret. According to Mr. Watt, the prospect of a full GAO audit poses a huge risk to the Fed's independent conduct of monetary policy.

Read more »

The neocons (Bill Kristol. Jeff Goldberg, Frank Gaffney, John Bolton, Martin Peretz, Daniel Pipes, Charles Krauthammer, etc) are arguing among themselves about how much blame Islam deserves for the Fort Hood slaughter.

In response, Americans for Peace Now produced a little primer on Israeli or (using the neocon categories) Jewish religious violence.

And this primer, helpful as it is, barely scratches the surface. The entire settlement enterprise in the occupied territories was ignited by religious fanatics. And the settlement enterprise is violent by its very nature -- displacing Palestinians, starving Gaza, restricting Palestinian movement and, when convenient for religious settlers and/or soldiers, beating and killing those who get in the way. The religious crazies -- supposedly so deeply in love with the Land of Israel -- also rip out olive groves and literally poison the land with chemicals to destroy Palestinian agriculture.

So is Judaism violent? No, but Jewish extremists are, just like their Muslim counterparts. As for Christianity, one need hardly elaborate on the Christianity-blessed extermination of native peoples worldwide or the Holocaust's Christian roots.

Read more »

Goldman Sachs is making yet another great contribution to society. It announced that it would contribute almost 4 percent of the money that it got from taxpayers in the AIG bailout ($500 million) to a new program to help small businesses recover from the recession. This is a nice gesture -- I suppose it's Goldman's way of saying "thank you" for all the help that we gave them in its time of need. (The help also included a $28 billion loan guarantee from the FDIC, $10 billion in TARP loans, and an amount of short-term loans from the Fed which Ben Bernanke will not disclose).

It's always good to see charity, but if Goldman really wants to help small businesses how about financing research on the implementation of financial transactions taxes. This could free up tens of billions of dollars that are drained off by the financial sector each year and possibly reduce the volatility of prices in many markets. That would be a great boost to small businesses.

Just yesterday US mediator, George Mitchell, told the Israelis that the United States opposed expanding the Gilo settlement in East Jerusalem. According to Israeli press reports, Mitchell said that moving ahead with settlement expansion now could kill the peace process.

So what did the Israelis do today? They approved the Gilo expansion.

This then may be President Obama's last chance to get it right. In his Cairo speech in the spring he demanded that the Israelis freeze settlements. Prime Minister Netanyahu ignored him except to make clear that he had no intention of freezing anything. Then the Secretary of State made it worse by going to Israel and praising Netanyahu for his "unprecedented" moves for peace.

Read more »

On November 25, Dr. Orly Taitz, a persistent figure from the small universe of people who believe that President Barack Obama is not a native-born American, will be the featured speaker at a meeting of Barbara Coe's California Coalition for Immigration Reform. This event, planned for the Women's Club in Garden Grove, represents another example of the shared agenda of nativists and so-called birthers, (regular TPM readers will remember our previous discussion of the intersection of "birther" congressmen and the House Immigration Reform Caucus, a Republican-dominated group of 93 representatives opposed to passage of any humane policy.)

Now that President Obama has declared his intention to tackle immigration reform next year, understanding the nativist opposition becomes more important than ever.

Read more »

I made the point earlier in the month that much of the populist outrage against health care reform is really misdirected anger about the federal bailout of the Banks and AIG. This morning comes proof at how Geithner and Paulson were rolled by Goldman Sachs in the AIG bailout.

Just two days before the New York Fed paid A.I.G.'s partners 100 cents on the dollar to tear up their contracts with the insurance giant, one bank volunteered to take a modest haircut -- but it never got the chance.

UBS, of Switzerland, alone offered to give a break to the New York Fed in the negotiations last November over how to keep A.I.G. from toppling and taking other banks down with it. It would have accepted 98 cents on the dollar.

But UBS's good-faith gesture was quickly drowned out by Goldman Sachs and the top French bank regulator. They argued, with others, that it would be improper and perhaps even criminal to force A.I.G.'s trading partners to bear losses outside of bankruptcy court.

Heads on Pikes.

President Obama says he wants to "rebalance" the economic relationship between China and the U.S. as part of his plan to restart the American jobs machine. "We cannot go back," he said in September, "to an era where the Chinese . . . just are selling everything to us, we're taking out a bunch of credit-card debt or home equity loans, but we're not selling anything to them." He hopes that hundreds of millions of Chinese consumers will make up for the inability of American consumers to return to debt-binge spending.

This is wishful thinking. True, the Chinese market is huge and growing fast. By 2009, China was second only to the U.S. in computer sales, with a larger proportion of first-time buyers. It already had more cell-phone users. And excluding SUVs, last year Chinese consumers bought as many cars as Americans (as recently as 2006, Americans bought twice as many).

Even as the U.S. government was bailing out General Motors and Chrysler, the two firms' sales in China were soaring; GM's sales there are almost 50% higher this year than last. Proctor & Gamble is so well-established in China that many Chinese think its products (such as green-tea-flavored Crest toothpaste) are Chinese brands. If the Chinese economy continues to grow at or near its current rate and the benefits of that growth trickle down to 1.3 billion Chinese consumers, the country would become the largest shopping bazaar in the history of the world. They'll be driving over a billion cars and will be the world's biggest purchasers of household electronics, clothing, appliances and almost everything else produced on the planet.

So this will mean millions of American export jobs, right? No.

In fact China is heading in the opposite direction of "rebalancing." Its productive capacity keeps soaring, but Chinese consumers are taking home a shrinking proportion of the total economy. Last year, personal consumption in China amounted to only 35% of the Chinese economy; 10 years ago consumption was almost 50%. Capital investment, by contrast, rose to 44% from 35% over the decade.

China's capital spending is on the way to exceeding that of the U.S., but its consumer spending is barely a sixth as large. Chinese companies are plowing their rising profits back into more productive capacity—additional factories, more equipment, new technologies. China's massive $600 billion stimulus package has been directed at further enlarging China's productive capacity rather than consumption. So where will this productive capacity go if not to Chinese consumers? Net exports to other nations, especially the U.S. and Europe.

Many explanations have been offered for the parsimony of Chinese consumers. Social safety-nets are still inadequate, so Chinese families have to cover the costs of health care, education and retirement. Young Chinese men outnumber young Chinese women by a wide margin, so households with sons have to accumulate and save enough assets to compete in the marriage market. Chinese society is aging quickly because the government has kept a tight lid on population growth for three decades, with the result that households are supporting lots of elderly dependents.

But the larger explanation for Chinese frugality is that the nation is oriented to production, not consumption. China wants to become the world's preeminent producer nation. It also wants to take the lead in the production of advanced technologies. The U.S. would like to retain the lead, but our economy is oriented to consumption rather than production.

Deep down inside the cerebral cortex of our national consciousness we assume that the basic purpose of an economy is to provide more opportunities to consume. We grudgingly support government efforts to rebuild our infrastructure. We want our companies to invest in new equipment and technologies but also want them to pay generous dividends. We approve of government investments in basic research and development, but mainly for the purpose of making the nation more secure through advanced military technologies. (We regard spillovers to the private sector as incidental.)

China's industrial and technological policy is unapologetically direct. It especially wants America's know-how, and the best way to capture knowhow is to get it firsthand. So China continues to condition many sales by U.S. and foreign companies on production in China—often in joint ventures with Chinese companies.

American firms are now helping China build a "smart" infrastructure, tackle pollution with clean technologies, develop a new generation of photovoltaics and wind turbines, find new applications for nanotechologies, and build commercial jets and jet engines. GM recently announced it was planning to make a new subcompact in China designed and developed primarily by the Pan-Asia Technical Automotive Center, a joint venture between GM and SAIC Motor in Shanghai. General Electric is producing wind turbine components in China. Earlier this month, Massachusetts-based Evergreen Solar announced it will be moving its solar panel production to China.

The Chinese government also wants to create more jobs in China, and it will continue to rely on exports. Each year, tens of millions of poor Chinese pour into large cities from the countryside in pursuit of better-paying work. If they don't find it, China risks riots and other upheaval. Massive disorder is one of the greatest risks facing China's governing elite. That elite would much rather create export jobs, even at the cost of subsidizing foreign buyers, than allow the yuan to rise and thereby risk job shortages at home.

To this extent, China's export policy is really a social policy, designed to maintain order. Despite the Obama administration's entreaties, China will continue to peg the yuan to the dollar—when the dollar drops, selling yuan in the foreign-exchange market and adding to its pile of foreign assets in order to maintain the yuan's fixed relation to the dollar. This is costly to China, of course, but for the purposes of industrial and social policy, China figures the cost is worth it.

The dirty little secret on both sides of the Pacific is that both America and China are capable of producing far more than their own consumers are capable of buying. In the U.S., the root of the problem is a growing share of total income going to the richest Americans, leaving the middle class with relatively less purchasing power unless they go deep into debt. Inequality is also widening in China, but the problem there is a declining share of the fruits of economic growth going to average Chinese and an increasing share going to capital investment.

Both societies are threatened by the disconnect between production and consumption. In China, the threat is civil unrest. In the U.S., it's a prolonged jobs and earnings recession that, when combined with widening inequality, could create political backlash.