Borrowed from behind the Financial Times firewall:

Imagine a world in recession, where oil costs $50 per barrel. Which economies would be most affected? There are obvious losers. In Saudi Arabia, the largest oil producer, oil accounts for 90 per cent of exports, which in turn represents almost two-thirds of the economy’s output.

Indeed, members of the Organisation of the Petroleum Exporting Countries are more dependent on oil now than when prices fell sharply in 1985-86 and 1997-98. Exports plummeted in value after the Opec basket price fell from $27 a barrel to $13.50, and from $18.70 to $12.30, respectively. But in 1985 and 1997, oil exports were just 21 per cent of Opec’s gross domestic product, compared with 36 per cent now.

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Just two of the implications of the above that strike me are these:
First, if there is a recession and oil prices drop, then many, if not most, current Green Energy projects will no longer appear to be economically wise. What should be done? One possible answer is to mandate that oil prices stay at today's level, so that if producers drop prices, taxation would make up the difference. Obviously that would encourage OPEC to keep prices up, but from an environmental perspective that would be the goal, whether taxes or marketplace supply and demand sets the resulting price.

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As thousands of Americans are defaulting on their home mortgages, ABC News asked the question of how these bad loans were made in the first place.  In its video report, ABC interviewed a mortgage broker who revealed part of the answer.  The broker himself was a 20-year old college student when he began this work in 2005.  He was hoping to make money quickly and after two weeks of training was going to Americans’ homes to sell mortgages.  He notes three dishonest practices that the brokers and lenders engaged in to make money from these families: (1) he would sell adjustable-rate plans by assuring families that they could refinance before the rate changed, despite lacking any assurance that they would actually be able to; (2) lenders encouraged him to lie about the borrowers income so that they would qualify for certain loans; (3) lenders encouraged him not to sell the mortgage with the lowest interest rate so that the lenders could earn more money – at the expense of these families.

The interviewed broker, who “felt guilty” about his work, is now volunteering at the Center for Responsible Lending to help families that have been hurt by the credit industry.  But what will the lenders do in order to help these families?  At the very least, they ought to curb these predatory practices before future families also become their victims.

Today's NYT piece by David M. Herszenhorn and David S. Cloud on the Jim Webb tactic to prolong the troops' time off between deployments declares: "There were signs on Friday that Mr. Bush’s address might have succeeded in shifting some sentiment." Two such "signs" follow. One is that Bush had a big audience for his Thursday night talk. (No evidence there that he shifted any sentiment.) Second "sign":

The Washington Post’s editorial page, which has clung to a middle ground on the war, described Mr. Bush’s strategy as “the least bad plan” and one that would be “less risky than the alternatives.”

Oh? The WP editorial board, which has been clueless about the Iraq war from the start, is a bellwether of sentiment shifting? Let me tell you about my cat, whose tail twitches before California earthquakes.

Is it true that none of the major broadcast networks carried the Democratic response to the President's national address? They have their licenses from the FCC on the condition that they serve the public interest. It is generally and widely understood that such interest includes presenting to Americans the other side of any question that deserves national broadcast, for free, of the President's views.

I realize that lots of people watch cable instead of broadcast and indeed few in the Internet sphere pay much attention to broadcast. But it is still the medium that decides elections. Those who fear the bias of the MSM should be put on notice that Democrats may have a difficult time getting a fair hearing in 08.

Kenneth Starr, of Clinton impeachment fame, is welcome to be dean at California's Pepperdine Law School.  John Eastman, Republican nominee to the House and member of the Reagan administration, is welcome to be dean at California's Chapman Law School.  Erwin Chemerinsky, an imminent constitutional law scholar from Duke named "one of the top 20 legal thinkers in America," had accepted the deanship of the soon-to-be-opened University of California at Irvine Law School but has been fired before he can start.  His problem?  Too liberal.  It seems that he wrote an op-ed criticizing Alberto Gonzales, and suddenly  Chemerinsky was too "controversial" in the words of the UC Chancellor who fired him shortly after the op-ed appeared. 

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To coincide with the Jewish New Year, fresh statements are coming out of some presidential campaigns reaffirming the candidates' 'pro-Israel' credentials. It's the kind of thing that stretches the thread between domestic political posturing and smart policy prescriptions to a snapping point. It is almost redundant to note that the content of these declarations have precious little to do with advancing what is good for Israel, or, for that matter, US interests.

But one sentence from the Hillary Clinton press release of September 10 stands out. (Curiously, the the statement is not up on Clinton's campaign website.) In staking out her position on "Standing with Israel against terrorism," Hillary Clinton defends Israel's right to exist with "... an undivided Jerusalem as its capital." Oddly enough, this places her in direct contradiction with the plan put forward by a certain President Bill Clinton in December 2000.

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Another reason I found Chait's Republican class war thesis implausible is that current data shows a strong shift toward Democratic party identification among the wealthy. An April 2007 Pew Research survey found "Democrats pulling even with Republicans among registered voters with annual family incomes in excess of roughly $135,000 per annum." The wealthy remain more likely to vote for Republicans than the poor. However, if you're just looking at the wealthy, they're now as much a Democratic as a Republican group.

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I would like to thank Will Wilkinson for joining us from the Cato Institute, and for taking the time to offer up such a lengthy reply. I’m sorry he’s so confused, and while I fear another reply may only confuse him further, I might as well give it a shot.

To begin with Wilkinson calls “The Big Con” “partisan political propaganda,” and, by contrast, proceeds to describe himself as “an anti-war, extremely socially liberal libertarian.” So there you go – I’m just a partisan, while he’s a thoughtful non-partisan analyst who just happened not to like my book.

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I hope that my book Takeover: The Return of the Imperial Presidency and the Subversion of American Democracy persuasively establishes that America is at an extraordinary constitutional moment, one that rises above ordinary politics. The Bush-Cheney administration has successfully pioneered a slew of new and enhanced powers for the presidency, an arsenal that they will leave to their successors on January 20, 2009. Thus, the actions of the next president about White House power, and the attitude of the legal team he or she will hire, will be enormously important.

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It is almost laughable. Alan Dershowitz, legal gadfly and OJ Simpson lawyer, is demanding that Barack Obama dismiss foreign policy adviser, Zbigniew Brzezinski, because Brzezinski said something nice about the Walt-Mearsheimer book about the Israel lobby.

Cool. Second degree Mc Carthyism! Obama didn't do anything. Brzezinski didnt do anything. But Walt and Mearsheimer wrote a book the lobby does not like and so Brzezinski must go down for not condemning it. There are two possible explanations for this.

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I think everyone involved in this debate would profit from taking a look at Bruce Bartlett's recent history of "starve the beast" theory. I was particularly struck by this passage:

In an influential article in early 1976, Wall Street Journal editorial writer Jude Wanniski blasted [Gerald] Ford for timidity in cutting taxes. He argued that the nation needed each political party to be a different type of Santa Claus—the Democrats being the spending Santa Claus and the Republicans being the tax-cutting Santa Claus. By refusing to play its proper role and instead being the party of the balanced budget, Republicans had hurt not only themselves, but the nation as a whole. Declared Wanniski: “The political tension in the marketplace of ideas must be between tax reduction and spending increases, and as long as Republicans have insisted upon balanced budgets, their influence as a party has shriveled, and budgets have been unbalanced.”

Now Wanniski, as Jon Chait will happily inform you, turned out to be crazy - but this argument is distinctly non-crazy; indeed, I think it's largely correct.

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Takeover: The Return of the Imperial Presidency and the Subversion of American Democracy was released on September 5. Wednesday night, I was told that Takeover will debut at #24 on the next New York Times expanded bestseller list for hardcover non-fiction. You can probably imagine that I am hugely excited to see that this book is starting to reach an audience.

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My apologies for the late entry. I needed to finish The Big Con before piping up. Now that I've polished off Chait's quite readable book, and organized some of my thoughts, I'll start, like Ross, by emphasizing the positive.

For those already inclined to think the worst of Republicans, The Big Con is an effective piece of partisan political propaganda. It successfully left me loathing the Bush administration and the recently departed Republican congressional majorities even more than I already had. (FYI, I am an anti-war, extremely socially liberal libertarian who finds the current GOP's fixation on war, imperial executive power, walling up the southern border, denying civil rights to gays, etc. completely odious. I can't imagine the miracle that would keep me from preferring a Democrat in the next presidential election.) Moreover, like both Ross and Megan, I agree entirely with one of Chait's subsidiary theses: the vulgarization of supply-side thinking, particularly the idea that tax cuts are always, or almost always, a free lunch, has created a nonchalance about spending that is poisonous to fiscal responsibility.

So much for the positive. Mostly, I found the The Big Con to be a thicket of confusion.

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Bloomberg (the news outlet, not the mayor) is calling for Bob Rubin to give the Democrats a "reality check." What are the Krazy Dems up to that requires a family intervention? It seems that Charlie Rangel and John Edwards are talking about raising the capital gains tax rate. Pass the smelling salts.

The other evidence of Dems Gone Wild is my proposal in Democracy: A Journal of Ideas for a Financial Product Safety Commission. The idea is that consumers should have a Commission to put in place some national safety standards on home mortgages, credit cards and other financial products. I have argued that we need one federal agency with expertise on financial products whose primary mission is consumer protection instead of protection of bank profits. The person who takes out a $120,000 mortgage or $12,000 in debt on a credit card should have at least as much basic safety protection as the buyer of a $12 toaster. At least one presidential candidate, John Edwards, agrees.

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On most issues, it is difficult to go beyond sound bites and vague phrases in the context of a modern presidential campaign.  However, on at least one issue -- national security -- John Edwards has set himself apart from his two main rivals, Barack Obama and Hillary Clinton.

Perhaps Edwards' most important contribution to the discussion has been his thorough critique of the whole notion of a "Global War on Terrorism (GWOT)."

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In Iran five million new cellphone subscribers signed up in the first quarter of this year. That's more than the number of new subscribers in the United States.

China Mobile has about 500 million subscribers. That's of course more than the American population. CM will add the same number to its total within less than a decade.

Cellphones constitute one of the most widely distributed consumer products in Africa. In Africa they will create banking, credit, and purchasing infrastructure and will eclipse newspapers as a means for gathering information.

In less than 10 years, between 2 and 3 billion people globally will be cellphone users. This is by far the largest, fastest, and most important extension of communications capability ever seen.

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Today I’m going to talk about the Supreme Court, and how the Bush-Cheney legal team’s strategy of picking presidential lawyers to fill court vacancies has been an integral part of the groundwork it has laid for a long-term expansion of White House power. The following information is just a taste of the things that I learned during my research at the National Archives and elsewhere. Much more, with full context and color and detail, may be found in Chapter 11 of my book Takeover: The Return of the Imperial Presidency and the Subversion of American Democracy.

In 2005, when President Bush nominated John Roberts, Harriet Miers, and then Samuel Alito to fill the first two Supreme Court vacancies in a decade, observers outside the executive branch largely evaluated the nominees through the lens of social issues such as abortion rights. Lost amid the hubbub (especially for the first two nominations, which concluded before the warrantless wiretapping program came to light and before Bush issued the torture ban signing statement) was what I believe to be an essential factor behind all three nominations. There was a broad array of prominent and very conservative legal scholars and lower-court judges from which the Bush-Cheney legal team could have selected its nominees. Tellingly, the administration chose all three from a very narrow slice of the conservative legal universe: all three were executive branch legal warriors. They had each spent years marinating in disputes over expanding executive powers from the White House’s perspective, and were thus likely to bring a very deferential attitude to the bench when future lawsuits arose over aggressive claims of presidential authority.

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In 2000, Chicago’s Business School hosted a talk by Larry Summers, who was then the Treasury Secretary, and advising Al Gore's campaign. At the time, Gore was offering tax deductions or credits for practically anything one might do, from getting born to entering a nursing home. These sorts of tiny lump-sum deductions are generally frowned on by economists; they distort activity, are costly to administer, and unlike marginal rate cuts, provide no positive incentives to increase work.

"Mr Secretary," one of my professors asked him, "You know the theory as well as I do. You believe the theory. Why are you supporting these tax deductions?"

"Because that's the only way we have in this environment to get help to people who need it," said Larry Summers. " There are things more important than economic efficiency." It was a stunning moment: the first, and sadly the last, time I have heard a policymaker admit that he supported something for moral reasons even though it might not make the economy grow faster.The specter of that moment haunted me throughout my reading of The Big Con.

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Let me respond to a couple of the criticisms raised so far. First, Ross Douthat, while very kindly praising my book, accuses me of “imputing the worst of motives to [my] opponents” in my summary for the book for this forum. The accusation is based on the fact that I describe the modern conservative movement to be, at its core, “class warfare on behalf of the rich.”

The question of motive actually doesn’t interest me very much, because it’s impossible. I think virtually every human being thinks that what they do is basically good. I’m sure Stephen Moore is a genuine believer in supply-side economics. I have heard business lobbyists explain why they’re performing an essential public service, and I’m sure they believe that, too.

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Several people in the comments section yesterday questioned my contention that presidential power is not a partisan issue because future Democratic presidents will enjoy the same enhanced authorities that the Bush-Cheney administration has pioneered. They noted that the push to concentrate more power in the White House in recent decades has been largely the work of Republican administrations, and they argued that a future Democratic administration would behave differently. So this raises a question worth examining in more detail: Will the Cheney Project outlive the Bush-Cheney administration?

As many of you know, my new account of the Bush-Cheney administration’s efforts to expand presidential power, Takeover: The Return of the Imperial Presidency and the Subversion of American Democracy, is coming out alongside Jack Goldsmith’s new memoir of his 10-month tenure as head of the Office of Legal Counsel, The Terror Presidency: Law and Judgment Inside the Bush Administration. Our books complement each other in many respects: mine, based on interviews and documents, is a comprehensive overview of many different aspects of the project to expand White House power; Goldsmith’s, based on his own experiences, focuses on one particularly important component: the effort to free the commander-in-chief from a need to obey rules -- laws and ratified treaties – in national security matters.

In one important respect, our two accounts diverge. Goldsmith argues that the Cheney-Addington effort to expand presidential power has backfired, and the ironic result is that future presidents will be weaker. I argue that their push has been the administration’s most successfully implemented policy, and that future presidents will be stronger as a result. So what will follow after the Bush-Cheney administration passes into history?

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Everyone remembers former Governor of New York Mario Cuomo’s famed speech at the 1984 Democratic Convention. Even me (and I was 5). In it he said: “President Reagan told us from the very beginning that he believed in a kind of social Darwinism. Survival of the fittest. ‘Government can't do everything,’ we were told, so it should settle for taking care of the strong and hope that economic ambition and charity will do the rest. Make the rich richer, and what falls from the table will be enough for the middle class and those who are trying desperately to work their way into the middle class.”

The speech could have just as easily been delivered in 2007 as 1984. So as the country plunges into another Presidential election cycle, Governor Cuomo, a practitioner and one of the left’s most eloquent voices, once again asks to candidates to step back and examine their governing philosophy and the challenges the country faces, arguing that pat answers and rhetoric are insufficient to address them.

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The die is cast with respect to Iraq and the surge. We have reached the highwater mark and the number of U.S. troops in Iraq will start to decline. That said, there will be no substantive change until April of 2008, when the 15 month deployment of the “surge” force of 30,000 comes to an end.

General Petraeus and Ambassador Crocker, attended by members of Congress and some pliant members of the media, take center stage in yesterday and today’s so-called drama, Iraq Kabuki. Kabuki is a type of popular Japanese drama “in which elaborately costumed performers use stylized movements, dances, and songs in order to enact tragedies and comedies.” Today’s presentation in Washington will include heated rhetoric and self-righteous indignation but, when the day ends, the guy with an earnest face and a chest full of medals will have the high road and the Senators who attack him run the risk of being accused of hating the troops and undermining the morale of our soldiers in combat.

Truth and facts do not really matter. Disagree? Please go back and watch what happened to Lt. Colonel Oliver North when Congress tussled with him as they tried to get to the bottom of the Iran Contra scandal.

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According to NPR's website, the following little exchange took place during yesterday's hearing:

At one point, California Democrat Brad Sherman asked whether Petraeus would defy the president if Congress passed a law limiting the extent of military operations. "Congressman, and I'm not trying to be flip, what I would do is consult my lawyer," he said.

The sequel comes from Eric Black at Minnesota Monitor:

He added on a second round that he would also consult his "chain of command."

Sherman asked if that meant there was a possibility he would disregard a direct order from the commander-in-chief. Petraeus said he hadn't said that, only that he "would have to figure out what to do."

It's come to this:  a four-star general muses aloud about whether he is subject to civilian control.  He would consult with lawyers and superiors.  Not Article 2, Section 2 of the Constitution:  "The President shall be Commander in Chief of the Army and Navy of the United States...."

Meanwhile, to quote David S. Cloud and Thom Shanker in this morning's NYT, "only a few Democrats on two House committees seemed inclined to dispute with much vigor the assessments provided by a commander with medals on his chest and four stars on his shoulders."

That doubles the disgrace.

There’s only one word to describe Jon Chait’s book: shrill. I mean, how can Chait say that “American politics has been hijacked by a tiny coterie of right-wing economic extremists”? The cocktail-party circuit knows better. As Peter Beinart, the then editor of The New Republic, wrote in his review of my 2003 book The Great Unraveling, “guest lists that cross ideological lines can help liberals understand the conservatives they write about. And many Washington conservatives genuinely don't see the Bush administration as radical: they see it as having ratified a big-spending, culturally liberal status quo.”

OK, end snark. Obviously I agree with just about everything that’s in Jon’s book. I cover some of the same ground in my own forthcoming book, The Conscience of a Liberal, though in much less detail. I’d like to take this conversation in a slightly different direction by talking about the second part of the book, on the political environment that lets crackpot economics flourish; Jon’s description is correct, but, I think, somewhat incomplete.

First, supply-side quackery is only one of the gambits used to sell tax cuts.

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The problem with Ross's response is that no matter what tax rates we impose, or which premises we grant, relations between the Sunnis and Shi'as are irredeemably poisone--whoops. Sorry, long day of Petraeus.

More seriously, Ross is correct that there are more cautious, subtle arguments supporting certain types of tax cuts. But Jon's laser-like focus on the Supply-Siders serves an actual purpose: Their claims are useful not because they're empirically true, but because they're politically attractive. Whatever the beliefs of more thoughtful conservatives, Republicans have, as Chait shows, continually sold these policies based on the idea that they will pay for themselves. Since my continual attempts to trigger latent Jedi powers continue to fail, I can't, sadly, say how many believe this rationale and how many merely find it convenient. But so long as it's used, and treated as credible, the public, who looks to their leaders (and the media) for some degree of public policy guidance, is being misled.

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I should start out by saying something nice about Jonathan Chait's book, so I'll say this: It's a book that every conservative should read. It demolishes a theory that too many right-wingers take seriously - namely, the notion that cutting taxes raises government revenue in the short run - and it demonstrates that by embracing this theory the small-government movement has enmeshed itself in contradiction. The contemporary Right simultaneously believes that cutting taxes will shrink government by "starving the beast," and that cutting taxes will produce more government revenue, not less.

In fact, neither seems to be the case: Cutting taxes tends to produce more demand for government, because voters don't feel the cost of government services, while simultaneously reducing the revenue base needed to pay for those services. Too often, as Chait's analysis makes clear, supply-side theory has been a way for conservatives to downplay the difficult side of their "lower taxes, less government" message - the side that requires, well, actually cutting spending - and pretend that there's such a thing as a free lunch. There isn't, which is why both Reagan and George W. Bush found themselves running large deficits even during economic booms, and why neither was all that successful at their professed aim of reducing the size and scope of the federal government. This is a failure that conservatives who care about deficits and the size of government need to reckon with; too many haven't, and I commend Chait's book to them.

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On July 27, the Chairman of the Council of Economic Advisers adopted a familiar Bush Administration tactic: deflect questions about the growing insecurity of American workers by pointing to a declining unemployment rate.  He emphasized at that time:  "Employment is still very strong. Every week, when we look at the initial claims for unemployment, that's consistent with a strong and growing labor market."

Well, now it turns out that the U.S. economy started losing jobs a few days later (maybe that's no surprise given the foresight we've come to expect from the administration).  The economy lost 4,000 jobs in August -- the first such loss in four years.  With home construction and sales slumping thanks to the subprime market meltdown, the worsening labor outlook isn't a shock.  An article in the Economist connects the dots and reminds us of the unfortunate:  foreclosures don't just lead to job losses by creating turbulence in the housing market; job losses also lead to more foreclosures and keep the cycle going.

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Happy Petraeus Day! On the theory that plenty of my colleagues in the print media and blogosphere will be writing about Iraq today, I will address another Mideast security conundrum: the role of the United States as the region's top arms supplier.

In late July the Bush administration proposed a ten-year, $63 billion arms package for Saudi Arabia, Egypt, and Israel (see my recent piece in The Nation). Billed as part of a new "Gulf Security Dialogue," it provided yet another example of team Bush deciding to let the guns do the talking.

Thankfully, Rep. Anthony Weiner (D-NY) has raised the profile of the deal by recruiting 114 of his House colleagues to oppose it. This won't be enough to stop it, but at least it will generate some serious debate.

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This is Charlie Savage. I’m writing this from my office at the Boston Globe bureau in downtown Washington. I just started a five-week leave of absence to travel around the country talking about my new book, Takeover: The Return of the Imperial Presidency and the Subversion of American Democracy. For the next week, I will be guest-blogging for this book salon about the Bush administration’s efforts to expand presidential power, and about the book, which aims to be a comprehensive account of this extraordinary project to reshape American government.

I get asked a lot about how I got onto this topic. It goes back to 2003, when I began covering Guantanamo and the broader debate about detention and interrogation policy in the war on terrorism.

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Fellow book clubbers,

Thank you all for taking the time to discuss my book. Let me start by explaining what it’s about, because I’m not sure anybody has actually summarized the thesis.

The Big Con tries to explain how far-right economic ideas have come to dominate the American political agenda over the last thirty years. The book is divided into two parts. The first describes how the Republican Party was transformed, from the moderate Eisenhower-Nixon-Ford party into a party whose central aim is the upward redistribution of wealth. This is a story about the rise of the supply-siders, the transformation of the business lobby, and the overthrowing of the old, responsible Republican elite by right-wing class warriors. (In deference to some of the right-wingers who have graciously agreed to join us, I’ll try to avoid describing them with words like “maniacs.”)

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As if there wasn't enough to follow this week with Petraeus and Crocker hitting up Capital Hill for political support and cash, we've got two amazing features here at TPMCafe.

In the Book Club, we've assembled a pretty incredible group of folks to debate Jon Chait new book The Big Con: The True Story of How Washington Got Hoodwinked and Hijacked by Crackpot Economics. Joining Chait will be Paul Krugman of Princeton and the NYTs, Stephen Moore of the WSJ and formerly of the Club for Growth, Ezra Klein of the American Prospect, Will Wilkinson of the Cato Institute, and Megan McArdle and Ross Douthat both of the Atlantic Monthly. It's a brilliant and intellectually diverse group from which we expect some entertaining fireworks.

At the Table for One, we're thrilled to have Pulitzer Prize-winning journalist Charlie Savage here to talk about his new book, Takeover: The Return of the Imperial Presidency and the Subversion of American Democracy. Savage won his Pulitzer for being one of the only major American journalists to, as Glenn Greenwald put it, simply "look at the public record of what the White House was doing, figure out what it meant, and report what the government was doing." As his editor put it, "he covers what the White House does, not just what it says."

Enjoy both of them, we're proud to have them. And let me know what you'd like to see in the future and we'll work with you to make it happen.

Welcome to Table for One, the guest-blogging section at TPMCafe.

This week we are joined by Pulitzer Prize-winning journalist Charlie Savage, reporter for the Boston Globe, and author of the new book, Takeover: The Return of the Imperial Presidency and the Subversion of American Democracy. Savage is joining us to discuss his new book, and lay out some of its central arguments for discussion. Read his posts below, and join in.

See earlier Table for One guest-blogs:
Congressman Steve Kagen, Congressman Earl Blumenauer, Scott Winship, Robert Hormats, Bill McKibben, Rajiv Chandrasekaran, Sen. John Edwards, the ACLU's Anthony Romero, Rep. Bernie Sanders (I-VT), Andrew Rasiej, Gov. Tom Vilsack,Gen. Wesley Clark, Rep. Sherrod Brown (D-OH), and Sen. Russ Feingold.

Welcome to the TPMCafe Book Club, where we invite authors to discuss their most recent works with readers and invited commentators.

This week we'll be discussing Jonathan Chait's new book, The Big Con: The True Story of How Washington Got Hoodwinked and Hijacked by Crackpot Economics.

In the book (and in an excerpt printed in the latest issue of The New Republic), Chait looks into the history of how and why the idea of supply-side economics has come to hold sway over much of American politics, despite its poor stature as economic theory. This week, Chait will lay out some of his arguments for cross-examination.

Joining the conversation will be Will Wilkinson, Stephen Moore, Megan McArdle, Ross Douthat, Ezra Klein, and Paul Krugman.

Past Book Club authors include Thomas Frank, Anthony Shadid, Larry Diamond, George Packer, Ivo Daalder/James Lindsay, Robert Dreyfuss, Chris Mooney, Gene Sperling, Gershom Gorenberg, Peter Beinart, Kevin Phillips, Sidney Blumenthal, Reed Hundt, Anne-Marie Slaughter, John Ikenberry, Jonathan Cohn, Daniel Gross, Steven Cook, Chris Hayes, Josh Kurlantzick, Glenn Greenwald, and Todd Gitlin.

Time Magazine has a Special Report this week making the case for National Service. The centerpiece is Richard Stengel’s well done argument for increasing opportunities for service in America. Americans are at once disappointed with government officials and services – which, among other things, have failed to ensure excellent public schools or rebuild New Orleans – and incredibly active as volunteers trying to address the great challenges facing the country. Perhaps it is time, Stengel says, to harness this civic-spirit and use it to improve the American Republic.

Once again, to shamelessly plug our own idea, Professor Warren and I have argued that we should do just that. We can encourage young people to take part in addressing the challenges facing our country and the world – and to do it without forcing them. Why not give young people the option of getting college loans forgiven for participating in public service? Not only will more young people serve their country, improving vital services and building a stronger national community, but they’ll also get a debt-free college education, improving future employment opportunities and preventing many of the financial challenges we discuss here so often. This is an idea whose time has come.

Now that is an excuse. Alan Greenspan is giving us yet another rendition of his struggles, or lack thereof, with the stock and housing bubbles that grew under his watch. Just a few years ago, back when he was the greatest central banker in history, Greenspan was confidently telling audiences that he had decided that it was best for the Fed to just let bubbles run their course and then deal with consequences. His new story is that he wrestled with the stock bubble and lost. Apparently because of this failure, he never tried to tackle the housing the bubble.

Now that the collapse of the housing bubble is throwing the economy into a recession (growing economies don’t lose jobs – don’t let the happy face economists fool you), Greenspan is telling us that it is not humanly possible to deflate a financial bubble. Sorry Mr. Greenspan, but just because you failed, doesn’t make it impossible.

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The "Petraeus" Report, ghostwritten in the White House, is ready for September prime time, which you will recall is best for new product rollout. The media are under siege-seduction from p. r. Team Gillespie, the White House's Hail Mary rescue squad.

Petraeus' starring role in the White House's campaign to resurge the surge reportedly had the general in a vigorous contretemps with his superior, Admiral William J. Fallon, head of the Central Command in charge of American forces in the Middle East. According to a whole squadron of good reporters in today's WP:

"Bad relations?" said a senior civilian official with a laugh. "That's the understatement of the century. . . . If you think Armageddon was a riot, that's one way of looking at it."

But the article ends with the suggestion that Fallon has made his piece with Petraeus. We'll see.

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An article in a Business Week series on credit cards and college students focuses on the marketing of credit cards to college students. It makes a number of good points about the almost unbelievable reality that credit card companies actively solicit unemployed students with little or no credit history or ability to repay to open up credit card accounts. Not surprisingly, the article describes the criticism that credit card companies do not adequately warn students of the serious, far-reaching consequences of credit card debt. In part, the industry responds by pointing to the brochures and websites it says it promotes on financial literacy as means of being the responsible party educating the student. This always strikes me as a bit laughable.  Some source of financial literacy should be better than none (assuming it is accurate).  But relying on credit card companies to promote financial literacy seems just as likely to reduce student credit card debt as relying on the tobacco industry's stop-smoking websites to reduce teenage smoking. Representative Louise Slaughter's proposal (described in the article) to cap credit card limits for students to $500 if their parents co-sign or 20% of the student's income sounds like a more promising solution.