According to a report in Yedioth Achronoth this week, Israel’s Emergency Economic Administration has produced a report about what the next Arab-Israeli war will look like. The report comes at a time when Israeli military and intelligence circles are expecting some sort of Hezbollah attack in response to the assassination of its leader, Imad Mughniyeh on February 12th. The report describes a “reasonably grave” situation rather than a “worst case scenario.” But it’s quite bad enough.

The Emergency Economic Administration predicts that the next war would last a month. There would be “missile barrages hitting the greater Tel-Aviv area and other urban conglomerates, a total shut-down of Ben-Gurion Airport, roads bombed incessantly, nationwide power cuts for many hours and the collapse of the water supply. . . .”

This is not the Iran nuclear nightmare scenario, the realization of which requires a technological breakthrough. It is rather an attack that could happen right now.

So what is Israel doing about it? Certainly, the Israel Defense Forces is preparing to defend the country in the event of such an attack. Even more certain is that the IDF is capable of hitting back hard in response (Defense Minister Ehud Barak has made the issuing of dire threats, with references to Israel’s “long arm,” a specialty). The knowledge on the part of its enemies that Israel will respond strongly is itself a deterrent. And, as we see in this report, the government is working to mitigate the economic impact of the next war.

But neither the Israelis (nor their American allies) are doing very much to prevent it—although they do go through the motions. Vice President Cheney, for instance, said last week that a Palestinian state was “long overdue” and spoke about the need for “painful sacrifices” by Israelis and Palestinians to achieve it. But he also ruled out any change in U.S. policy toward Hamas. He insists that Hamas has to accept U.S. and Israeli demands before we accept its participation in a Palestinian unity government or a role in negotiations—demands Hamas has repeatedly rejected. How Cheney would achieve the “long overdue” establishment of a Palestinian state is a mystery.

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The lead in Merrill Lynch's Friday evening research report is that global inflation is going to be the surprise issue of 2008. They have three reasons. Commodity and money supply inflation is a global issue. Developing nations will export their local inflation to the US by allowing their currencies to appreciate dramatically. The effect on the developing world could be quite chaotic.

The current global expansion will come to an end when emerging market central banks decide to deal with this threat (of inflation) more aggressively. Watch out for aggressive policy tightening, civil unrest and capacity constraints. Capacity constraints could take the form of power blackouts, physical shortages, or more frequent interruption of production as a result of seemingly random events such as extreme weather.

The New York Times reports this morning that this is not some future dystopian scenario.

Food riots have erupted in recent months in Guinea, Mauritania, Mexico, Morocco, Senegal, Uzbekistan and Yemen. But the moves by rice-exporting nations over the last two days — meant to ensure scarce supplies will meet domestic needs — drove prices on the world market even higher this week.

One more worry for Paulson and Bernanke.

Lisa Lerer at Politico offers a useful probe into John McCain's tight relation to Phil Gramm, longtime (and well-paid) promoter of the banking deregulation that greased the skids for the housing calamity.

Which offers an opportune fulcrum for a simple question: "Senator McCain, since economics is not your strong suit, why is the senator who campaigned for the mergers that made the housing meltdown possible part of your inner circle? Why were you chairman of his 1996 presidential campaign? Why do you think further deregulation the wise path at this moment?"

Just about everything Paul Krugman says resonates deeply with me, so I was surprised by his less than positive take on Barack Obama’s recent speech wherein the candidate laid out his plans for dealing with both the mortgage meltdown and the ensuing financial mess. I thought the speech laid out some great policy ideas.

This isn’t a “Barack’s better than Hillary” argument. She too has lots of good stuff to say in this area. But I don’t think Paul gave Obama a fair shake. So here’s the skinny on the speech, from one wonk’s perspective.

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Rep. Al Wynn (D-MD) announced he's leaving Congress at mid-year, not waiting for the official end of his Congressional career.

We are not terribly upset.

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I misspoke.

Not only don’t we really need “flying wedges” of demonstrators to “physically surround” and shout at all the creepy journalists, consultants, and campaign surrogates who are peddling phony “firestorms” and “uproars” in the 2008 race; we don’t even need George Soros and a conservative counterpart to fund and recruit “troops” for a campaign called “The Real Firestorm,” as I claimed here yesterday.

Those phrases summoned specters of the New Left’s worst excesses, and of the Chinese Cultural Revolution, and of Republicans who stormed the Miami Board of Elections in 2000 or sent “ballot security” patrols to heavily black polling places. I should have substituted my cautionary column of Feb. 13 on "Obama, Crowds, and Power." I should have re-read it myself.

But we do need a campaign, beyond any one candidate’s, to fight the dark forces that are generating new reactive excesses like those I’ve just mentioned. So mea culpa, but let me try again.

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There is great eagerness these days to craft some sort of bailout for homeowners facing foreclosure. Most of plans involve the government buying up or guaranteeing mortgage debt in situations in which homeowners face foreclosure. However tempting it might be to rush to do something to help homeowners in trouble, can we trouble our crusaders to do a little arithmetic first.

Those who have mastered this arcane craft, which used to be taught in the third grade, know that this bailout will do much more to help bankers who made bad investments than it will to help homeowners.

Okay, here’s the secret – we have a housing bubble. Let’s say that again, we have a housing bubble. That means that house prices are out of line with the fundamentals in the housing market. In many areas houses are still selling for prices that are twenty or even twenty five times what it would cost to rent a comparable house.

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Kimberly Peirce's Stop-Loss is raw, plausible, shocking, and otherwise piled high with aesthetic virtue, not the least of which is the way it faces squarely the impossible situation American troops are faced with in Iraq. Perhaps because the script is a collaboration between Peirce, said to be anti-war, and Mark Richard, said to be pro-war, the film puts its central character, Brandon King (Ryan Philippe) in an impossible situation. Called up for a second tour in Iraq when he was sure he was entitled to an exit pass, squad leader King faces nothing but bad choices. Will he skip out and betray his buddies? Will he go back and betray his mind? Call this an extended metaphor for the whole misbegotten war--there aren't going to be any happy endings. In every wrenching way, the war is a trap. Don't believe the critics who tell you the film is ragged and therefore flawed. All the characters have human dimension. The raggedness is the raggedness of the Odyssey. By the end, you can hardly breathe.

Gershom Gorenberg has a terrific piece in the latest American Prospect about Robert Malley who has faced a Salem witch style type shunning because he has been deemed unfriendly to Israel. Malley was a top foreign policy adviser to President Clinton at the Camp David negotiations. He's Jewish, a first-generation American, and a Rhodes scholar with a Harvard Law degree.

Gorenberg's piece explores why Malley was tagged with the anti-Israel label. Marty Peretz, former proprietor of the New Republic called him a "rabid hater of Israel." The New York Times idiotically reported the "charges" against Malley without explaining how ridiculous they are. And a million emails went out to Jewish primary voters warning about the dangerous Malley.

So what is the evidence that Malley is anti-Israel? As Gorenberg -- an Israeli and Orhodox Jew -- reports it stems from several articles Malley wrote following Camp David which made the claim (get ready to be shocked) that the failure of the 2000 Clinton summit was not all Arafat's fault but that Ehud Barak was also to blame.

That's it. For stating something that everyone (including Bill Clinton) says is true, Malley is condemned as a Jew-hater. Of course, politics in involved too. Malley was one of Obama's informal advisers which meant that he could be used by some Clinton and McCain supporters as evidence that Obama is, you know, like Jesse Jackson and the rest of them.

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Reader Timothy V. Gatto argues that an excess of presumption has engendered a frighteningly blinkered view of the world outside the U.S. This may be old news to some, but the fact is that this problem extends to Americans at both ends of the political spectrum, and calls for a fundamental reconception of America's foreign policy.

Matthew Moore reviews the recent Supreme Court ruling that ostensibly exempts the United States from all liability under the Vienna Convention on Consular Relations. Under the Bush administration, the U.S. government has consistently acted as though it doesn't believe itself to be subject to the norms of international law, and perhaps no other factor has contributed more to our foundering reputation abroad.

Reader genghis reflects on the meaning of those poll numbers projecting large numbers of Democratic primary voters defecting to McCain if their preferred candidate loses the nomination.

More after the jump. . .

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In my post earlier today, I noted that even if John McCain's more reasonable statements from his recent foreign policy speech in Los Angeles are true, they will be largely irrelevant unless he radically changes course on his positions on Iran and Iraq. However, I missed a chance to point out several important contradictions between the anti-nuclear rhetoric in the McCain speech and his voting record in the Senate. As noted in an excellent piece by John Isaacs of the Council for a Livable World, McCain has indicated before that he is for reducing nuclear weapons (by an unspecified amount), but he has also voted four times to fund new nuclear weapons when the issue has come up in the Senate in recent years; in addition, he is on record as opposing the Comprehensive Test Ban Treaty (CTBT), an invaluable initiative that will be central to any effort to eliminate nuclear weapons. So, if he's serious about the need to show U.S. "leadership" on disarmament, Senator McCain could start by coming out against the latest scheme for designing and building a new nuclear weapon -- the antiseptically named "Reliable Replacement Warhead" (RRW) program -- and shifting ground by endorsing the CTBT. Without taking these and other concrete steps that would actually move us towards nuclear disarmament, McCain's rhetoric, appealing though it may be, is just that -- rhetoric.

In a speech in Los Angeles yesterday, John McCain adopted a more conciliatory tone regarding U.S. global leadership than we have heard from his campaign to date, much less from the Bush administration. Is he merely posturing to avoid scaring away independents and wavering Democrats, or is his approach in fact more nuanced and interesting than his tough guy image might suggest?

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The New York Times reported yesterday that Senator McCain thinks “it is not the duty of government to bail out and reward those who act irresponsibly, whether they are big banks or small borrowers.” Indeed, even though the instruments of the credit crisis were so complicated they “weren’t particularly well understood by even the most sophisticated banks, lenders and hedge funds,” he offered no policy to address those or similar instruments – and even suggested, in the words of the Times, that “government should eliminate obstacles to the ability of financial institutions to raise more capital.”

When taken together, these extraordinary comments show just how committed Senator McCain is to a particular theory of political economy that rejects government action in the economy. What would it take for Senator McCain to acknowledge the need for government action in the economy? Would he ever act?

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The latest one-two punch from Billary has done it: I hereby call for a third campaign, one that can endure through the general election.

Relax, but just a bit: I don’t mean a resurrected John Edwards or a third-party bid like Ralph Nader’s or, in fact, any campaign with an actual candidate. I mean a campaign called “The Real Firestorm,” a tight, flying wedge of citizen volunteers who, like the best early civil-rights demonstrators, will physically face Bill or Hillary -- or any wayward Obama surrogate or Republican swift-boater or journalist who’s helping to gin up the latest “firestorm” or “uproar” – and chant at them, at a photo-op moment, “There you go again! There you go again!”

Ronald Reagan immortalized the charge in a 1980 jab at Jimmy Carter. Here, it would mean, “There you go again, subverting the civic-republican truths and trust we need, not as Democrats but as Americans.”

This campaign will need funding and a few charismatic leaders, “conservative” as well as “liberal.” But most of all, it’ll need strategy and troops capable of waking up enough other people to shame Bill and other swift-boaters into silence. Here’s why, and a bit about how.

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The credit situation is only getting uglier as Bear Stearns shareholder lawsuits and Congressional scrutiny begin, and New Country and KPMG (its accounting firm) are accused of “irregularities” that often resulted in increased earnings reports. For personal debtors, the ugly situation is evident in the increase in Fair Debt Collection Practices Act complaints about both third-party debt collectors (up 2.4% from 2006) and creditors’ in-house collections efforts (down 6.5%). The net increase is 0.3%, a small increase that masks the puzzling drop in in-house collections complaints, which may be explainable by an increase in collections outsourcing, or by debtors’ tending to allow foreclosure rather than fight the collection.

The most frequent complaint in 2007 was attempts to collect debts not owed or debts larger than owed, and the second-most-frequent was abusive collections, including harassment, obscenity, calls during off-hours, and threats of violence.

With guests like VP Cheney and Senator McCain in the last week it was easy to miss this one, but Sri Lanka's Prime Minister, Ratnasiri Wickremanayake, has just been on a working visit to Israel. There he signed an agreement establishing cooperative relations between Israel and Sri Lanka in the areas of culture, science and education.

In a meeting between Wickremanayake and Israeli Prime Minister Ehud Olmert the two discussed, what else, terrorism and the common threats they both face. Olmert had this unsurprising advice for his Sri Lankan guest: "Do not give in to terrorism because it will only bring destruction to your country. Terrorism must be fought; one must not capitulate to it." OK, no big deal – except that in these days of the dumbed-down war on terror, when the Republican Presidential nominee (intentionally or mistakenly) confuses Iran, their Iraqi Shia allies and Al-Qaeda, the Israeli and Sri Lankan examples can actually be rather informative and worth taking another look at.

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The Wall Street Journal this morning is enough to send you back to bed. Oil prices are spiking on low supply, consumer confidence is at the lowest level since the 70's, Home prices have fallen 11% in the last year, the Clear Channel buyout is crashing and worst of all--we have just lived through a decade where the stock market has not made any gains. The Journal is kind enough to point out that we have been through this nightmare before from 1929-1942 and 1966-1982, but this is cold comfort.

Supply-side economists like Larry Kudlow will say they have just the solution, cut capital gains taxes on the rich and they will work harder and produce more wealth for the society. But I know a lot of very well off people and I never saw them go on strike when taxes were higher in the 90's. Louis Uchitelle shows the big lie of the Supply-siders, who claim that if you just cut taxes on the rich, tax revenues will grow because the benighted billionaires will work much harder.

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Just in case anyone was confused, this isn't really Sinbad. Sinbad wanted us to make that clear to you. Seriously.

Update: I should also let you know that this isn't really Rambo.

I noticed two articles today in the New York Times that are most interesting when read together. First, the Times profiles Roy Miller, a nonprofit housing counselor in Baltimore who has helped a number of local homehowners work out repayment plans and avoid foreclosure. This success story shows how the dedication of a non-profit organization has led to dropping foreclosures in a Baltimore neighborhood while the rate has skyrocketed everywhere else.

Second, the Times also published an editorial about Alphonso Jackson, the Secretary of Housing and Urban Development for the Bush Administration. The article notes how Jackson has become the subject of investigation "into allegations that he rewarded developer friends and abused political enemies in doling out taxpayers’ funds." While Alberto Gonzales fell from grace for focusing too much on politics and too little on law enforcement, now it looks like Jackson may fall from grace for focusing too much on politics and too little on the housing crisis. This story, of course, has become all too familiar over the past seven years. It's too bad Roy Miller isn't running HUD!

Reader Ben Barlett's Sam Harris, Atheist Messiah is a prescient critique of Harris's recent comments on Trinity Church, as well as the Harris Doctrine in toto.

Robert Feinman attempts to clarify the debate on free trade by looking at the dynamics of interstate trade in the U.S. It's an interesting take on an issue that, for all the controversy it's spawned, is rarely understood.

Author and TPM reader Greg Mitchell reflects on the eminent historical sense of George W. Bush, according to which 4,000 American deaths (and countless others) represent only a "comma."

More after the jump. . .

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Signs of distress abound in the U.S. economy. Gross domestic product (GDP) growth has slowed abruptly over the last six months – the growth figure for July-September 2007 was 4.9 percent; the equivalent figure for October-December of the same year was 0.6 percent. Inflation for basic consumer goods is about 10 percent over the last year. Some parts of the country are seeing a price of $4 a gallon or higher for gasoline. The capital markets have lost upward of 10 percent of their value since the beginning of the year.

At the vortex of the nation's economic slowdown (we'll be able to say "contraction" when we get the GDP growth figure for the first quarter of 2008 and "recession" when we get the GDP growth figure for the second quarter) is the spreading subprime housing crisis. The value of the American home in the 20 largest metro areas in the nation showed price declines fell by over nine percent in 2007, the largest annual decrease since the early 1970s. Housing permits in December 2007 were 34.4 percent below the level of December 2006, and the number of housing starts was 38.8 percent lower – the largest declines since January and February 1991, respectively.

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Even the very small draw-down of troops from Baghdad has led to a rise in American and Iraqi deaths. Now General Petraeus has concluded he can't draw down anymore troops. What we now realize is that the civil war between Sunni and Shia will not end--it just goes underground when we surge. This is Rumsfeld's "Long War", just like in 1984or Brave New World, where there is always be a war going on that justifies the militarization of society and the government's need to spy on the citizens.

The Realpolitik part of my nature says we should get out of the way and let the majority Shia Parties take control. I have suggested before that the militias are rearming. As Shia Militias fire Iranian rockets at American targets in the Green Zone--we cannot remain in this McCain-Bush fantasy movie called "The Surge Is Working".

So there I was five minutes ago, reading a story in the Washington Post about a group of innovative young journalists in Kenya who produce a grassroots web video show called "Slum TV." As I finished the piece I had what I'd guess is a pretty common thought: "This sounds like a cool project. I'd like to look at their website." So I scanned the Post article for a link. Scanned again. Went back to the beginning to catch the link on the first reference to the site. Went to the end to see if there were "related links." Checked out the sidebars for "more information." Gave up, went to google.

If I'm SlumTV, I'm pissed. That's activist partners, donors, more media attention lost. No small thing for a grassroots organization. Get a great piece in the Washington Post and can't even get a few thousand pageviews out of it. Sheesh.

(Yes, these are the things I get outraged over. It's a publisher thing). The link is here.

"I think it would be a great thing if we had an election between two people who loved this country and were devoted to the interests of the country and people could actually ask themselves who is right on the issues, instead of all this other stuff that always seems to intrude itself on our politics."

These words, uttered by former President Bill Clinton last Friday, did not refer to his wife and Senator Barack Obama. No, he meant Senators Hillary Clinton and John McCain, whom he has recently described in glowing terms as a bipartisan politician, a war hero, and a tough general election foe.

Some have said that the former President is not questioning Obama’s patriotism, but those are the same people whose job is 24/7 damage control. Let’s not kid ourselves. Bill Clinton is playing the McCarthy card, one that has worked wonders in the past as it destroyed people and their political ambitions. He is also playing the race card, now coded as “all this other stuff.”

And what makes Obama so unpatriotic?

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My colleague and friend Anatol Lieven published a no-punches pulled critique of John McCain's foreign policy and national security probabilities in the Financial Times today, titled "Why We Should Fear a McCain Presidency."

Lieven makes a point I did recently: McCain used to be considered "an old-style conservative realist." I suggested that McCain's Nixonian DNA had gone underground. But the kind of realism McCain used to demonstrate is not old-style. It's making a comeback in hybrid form, tempered somewhat by a less harsh calculation of state interests and leavened by concern about progressive goals and objectives. Lieven himself makes this point in his excellent book, Ethical Realism: A Vision for America's Role in the World.

I remain befuddled by McCain's policy positions.

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Since it's a quiet day here today at TPMCafe, I'll turn the mic over to you. Possible topics:

Why do people say Tiger Woods is black?

Outrage fatique: will it ever set in?

Feel free to invent your own topics as you see fit.

Granted that the NYT editorial board chiefs in their wisdom believe that the purpose of op-ed columns is to counter the editorial line and not echo it. The line is antiwar so the columns shouldn't be told-you-sos--this is the premise. But would it be too much to ask that the paper publish a single sophisticated, full-length antiwar argument by someone who was not only right when it counted but who now elaborates on past rightness to sketch a postwar foreign policy? Would it damage the public discourse to diverge from the fifth-anniversary pile-up of extenuations of the worst foreign policy move in decades, or ever? The point would be not simply to fulminate against a misbegotten war but to underscore what antiwar intellectuals understood when the chips were down and why they understood it.

TPM has published an attack on my book, “Legacy of Ashes: The History of the CIA,” by a former House staffer named Steve Weissman. In a poison-pen campaign that began a few months back at the CIA itself, I stand accused of twisting facts in order to win fame and glory. Only a fool or a knave would do that. I am neither.

Mr. Weissman, without attribution, closely copies the CIA’s malicious attack by pretending to parse a passage in the book in which President Eisenhower laments the state of American intelligence. Ike feared that he would leave “a legacy of ashes” to his successor. As the text and the corresponding endnotes make clear, the passage summarizes three conversations Ike led during the closing days of his presidency. He was pained by the increasing inability of Allen Dulles as Director of Central Intelligence to carry out the two main duties of his office: to run the CIA and to coordinate all American intelligence – military and civilian. Ike’s fears had been growing for four years. They were realized four months later at the Bay of Pigs.

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