Everyone seems to want to punt the majority of the Auto Bailout to the new administration.

New signs of deterioration in the U.S. job market added impetus to appeals by Detroit's auto makers for a bailout, as top lawmakers on Capitol Hill coalesced around the idea of providing a small downpayment to keep the industry afloat until early 2009.

The vehicle might be a simple modification of the already passed $25 Billion for fuel efficiency upgrades. Each of the big three would need to commit to x% of their fleet to be alternative energy vehicles (Hybrid or electric) by 2012 in order to get a down payment on the $25 billion. That plus a conversion of 40% of the debt to equity (a cramdown) and Chrysler and GM could survive until the Obama administration has time for a comprehensive approach.

A week of Israeli settler outrages against Palestinians and against Israel's own security forces reached a crescendo over the last 24 hours with settlers opening fire on Palestinian civilians and unleashing violent disturbances across the West Bank. Israel's Justice Minister, Daniel Friedman, has just called the events a "shocking pogrom", journalists have described how their presence saved Palestinian residents of a home near Kiryat Arba from a lynching, and IDF sources described how the right wing activists "want to spark a religious war that would inflame the entire region." The belated IDF action in upholding a court order to evict settlers from a home that they illegally occupied in Hebron, led by Defense Minister Barak, was at least effective, although the same cannot be said of the limp-wristed measures taken in the face of settler rampages against Palestinians, and of the general approach to settler lawlessness.

While the Israeli press is full of graphic descriptions of the settler outrages, there has been remarkably little coverage in the American mainstream media, and as Jeff Goldberg points out on his Atlantic blog, there was no mention at all in the Conference of Presidents of Major American Jewish Organization's daily news digest (Daily Alert)--not surprising given that it is put together by the right-wing Jerusalem Center for Public Affairs led by Dore Gold. Settler extremism has become a strategic issue with implications for American policy, American private funding of settlements, and how to manage the security dynamic in the West Bank.

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I am very sorry to be coming in so late to this debate; I wanted to join it earlier in the week but simply could not. All the more so because predictably, as much as I respect Michael Lind, I disagree strongly with his characterization of traditional liberal internationalism and "new liberal internationalists" (he never makes clear how he would characterize us other than as neo-con fellow travelers.) In the first place, the liberal internationalism of Roosevelt and Truman believed both in having a concert of all great powers (the UN Security Council) and of democracies (NATO, the Marshall Plan, and ultimately the EU). They absolutely recognized the pragmatic necessity of talking to everyone, and they were right. But they also recognized that it was vital to develop institutions that would deepen cooperation among liberal democracies, both for strategic and moral reasons. That is precisely the position that John Ikenberry and I have taken with regard to our proposed concert of democracies -- we have made clear repeatedly that we would never want it in place of the UN but only in addition to. We also explicitly argued that it should not be a military alliance; indeed we proposed it as a much more informal alternative to a global NATO.

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I'm grateful to Michael Signer, David Schorr and Charles Kupchan for their comments on The American Way of Strategy. Charles has long argued for a concert of power approach, even when that was unpopular during the heyday of American triumphalism a few years back. And in his forthcoming book Demagogue, Michael emphasizes that there is far more to liberal, constitutional government than elections alone, an important truth that we need to be reminded of.

David thinks that liberal internationalism as I describe it is "too passive, heartless and unambitious." However, by the time he has finished qualifying what he calls a "more carefully calibrated liberal interventionism," he has arrived at a position very close to mine in practice. I am opposed to wars to "spread democracy" or "enforce human rights." But the U.S. and other countries can and sometimes should use moral suasion and in extreme cases embargoes to encourage justice in other societies.

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The holidays are usually a joyous time to spend with family and friends, sipping eggnog, trading presents, singing carols. But this year given the gloomy economic circumstances and ongoing wars in Iraq and Afghanistan, I'm reminded of a line from the holiday classic Christmas Vacation: "It's Christmas and we're all in misery."

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Today's employment report, showing that employers cut 533,000 jobs in November, 320,000 in October, and 403,000 in September -- for a total of over 1.2 million over the last three months -- begs the question of whether the meltdown we're experiencing should be called a Depression.

We are falling off a cliff. To put these numbers into some perspective, the November losses alone are the worst in 34 years. A significant percentage of Americans are now jobless or underemployed -- far higher than the official rate of 6.7 percent. Simply in order to keep up with population growth, employment needs to increase by 125,000 jobs per month.

Note also that the length of the typical workweek dropped to 33.5 hours. That's the shortest number of hours since the Department of Labor began keeping records on hours worked, back in 1964. A significant number of people are working part-time who'd rather be working full time. Coupled with those who are too discouraged even to look for work, I'd estimate that the percentage of Americans who need work right now is approaching 11 percent of the workforce. And that percent is likely to raise.

When FDR took office in 1933, one out of four American workers was jobless. We're not there yet, but we're trending in that direction.

Consumers will tighten their belts even further. Even if they have a full-time job, they're witnessing these job losses or hourly declines all around them and wondering if their job could be next on the chopping block. Their indebtedness is still high, by historic standards. And many are worried as well about their mortgage payments. So consumer spending is also falling off a cliff.

Two things are needed: First, the massive Treasury bailout of the financial industry must be redirected toward Main Street -- loans to small businesses, distressed homeowners, and individuals who are still good credit risks. Second, a stimulus package must be enacted right away. It needs to be more than $600 billion -- which is 4 percent of the national product. It should be focused on job creation in the United States -- infrastructure projects as well as services. Construction jobs are critical but so are elder care, hospital, child care, welfare, and countless other services that are getting clobbered. Service businesses accounted for two-thirds of the job cuts in November, meaning that the weakness in labor markets has shifted from the goods-producing sector of the economy to the far larger services sector.

The Advisory Council of J-Street, the new peace lobby, met in Washington in mid-September to plot (actually, to hear its staff articulate) the organization's strategy for the remainder of the election campaign and the year following. Among the various discussions Jeremy Ben-Ami, J-Street's immensely gifted Executive Director, had planned for the day was a lunchtime forum with eight of the forty-one congressional representatives who had accepted the lobby's endorsement. We thought this would be a courtesy meeting, with gracious if not perfunctory remarks. J-Street had already signed up over 70,000 to its email network--the number is now over 90,000--but J-Street is a very new organization, with little of AIPAC's accumulated clout. What we got was a meeting of unexpected honesty, even poignancy. 

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Charlie Gibson on ABC's World News Tonight: The cholera outbreak in Zimbabwe stems from the fact that the country is "paralyzed by political infighting."

There's a tyrant, Robert Mugabe, who wrecked the country, murdered opponents with impunity, drove his opponent into exile, and still came in second in the first round of presidential voting. There's an opponent who, after brutal repression, withdrew from the second round, calling it a "violent sham." Since then, under international pressure, he has scrambled, with indifferent success, to negotiate some leverage. The resulting situation, in the view of ABC News, is characterized as "political infighting."

And I'm the queen of Bavaria.

As a condition of getting a federal bailout, the Big Three are promising, among other things, to cut costs. Among the costs to be cut will be jobs. This is paradoxical, since the reason Congress is considering bailing them out in the first place is to preserve jobs and avoid the social costs of large-scale job loss (unemployment insurance, lost tax revenues, pension payments that have to be picked up by the Pension Benefit Guarantee Corporation, and so forth) .

We should take a lesson from the Chrysler bailout of the early 1980s. The ostensible reason Congress voted for it was to preserve Chrysler jobs. Yet once the bailout was underway, in order to generate the money it needed to restructure itself, Chrysler laid off more than a third of its workforce. Most of these jobs never came back.

And it's much the same with the mammoth bailout of Wall Street. Absent an explicit understanding of why public money is needed and what it's to be used for, taxpayer dollars end up bolstering executives, creditors, and shareholders rather than the workers and communities that need the most help.

We hear a lot about infrastructure investment today: roads and bridges, mostly. But we live in an information society and an information economy. We need investment in information infrastructure, and that, in the near term that is relevant for a recovery package, means massive public investment in Fiber To The Home (FTTH) and creating a fundamentally new system for adult education and its conversion into greater local involvement in education programs at local public schools.

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The estimable Steve Fraser has a piece worthy of note up at Tomdispatch. Not the part that grumbles indiscriminately about Obama's prospects for good deeds on the basis of nothing but the fact that his looming appointments have experience in the government. I too am disturbed that no one directly representing labor is included among the councils of economic advisers, but December is a bit early, I think, to haul out the big guns and declare that, in foreign policy, for example, we confront what he calls "an "Obama-Clinton-Bush (the father) foreign policy establishment." Give the guy a few weeks in office, for Chrissake, before consigning him to the selloutocracy.

But to the subject of Fraser's more constructive side:

A real democratic nationalization of the banks -- good value for our money rather than good money to add to their value -- should be part of the policy agenda up for discussion in the Obama era. As things now stand, the public supplies the loans and the investment capital, but the key decisions about how they are to be deployed remain in private hands. A democratic version of nationalizing the financial system would transfer these critical decisions to new institutions created by the Congress and designed to pursue public, not private, objectives. How to subject the flow of credit and investment capital to public control ought to be on the drawing boards if we are to look beyond the old New Deal to a new one.

Or, for instance, if we are to bail out the auto industry, which we should -- millions of jobs, businesses, communities, and what's left of once powerful and proud unions are at stake -- then why not talk about its nationalization, too? Why not create a representative body of workers, consumers, environmentalists, suppliers, and other interested parties to supervise the industry's reorganization and retooling to produce, just as the president-elect says he wants, new green means of transportation -- and not just cars?

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Well Josh, thanks for hosting this discussion. You raise an interesting point about the layers of myth that built up around the regime. I am sure that there were examples of opponents of the regime over-egging tales of horror to get the attention of the rest of the world, and often stories of brutality were embellished in the re-telling.

But what complicates matters is that this reputation for brutality was one that Saddam used to his own ends. His regime was, as Kanan Makiya has pointed out, founded on fear, and fear can only be sustained if it is grounded in some sort of truth. So yes, there clearly were examples of the most extreme and perverse brutality. I have talked to people who witnessed them first hand. But these examples have then fed a rumour mill. It makes it very difficult without some sort of monumental truth and reconciliation type process to sort the myth from the reality.

So how did we address this challenge in writing the series?

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Yes folks, more good news from the folks who bought you payment option ARMS, collaterized debt obligations (CDO), and credit default swaps. The banking industry (at least the folks not yet in jail) has a great plan to make home buying affordable and stabilize house prices.

They propose that the federal government should make it so that everyone can get a 4.5 percent mortgage through Fannie and Freddie's financing. I know it's rude to question the wisdom of the people who didn't see the housing bubble, but let's try to think about this one for a moment.

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I am in substantial agreement with Mike's post. Indeed, I think he does an excellent job of critiquing a brand of liberal internationalism which, although currently in vogue, has gotten ahead of itself. Historically, liberal internationalism has been about fostering international stability by coupling the projection of American power abroad with the fashioning of international partnerships. To be sure, the founders of liberal internationalism and many of its adherents today (myself included) would be delighted if all the states of the world were democracies. But, as Mike points out, the goal of liberal internationalism was to make the world safe for democracy, not to engage in coercive democracy promotion and nation building. Roosevelt and Truman sought to make partners of the Soviet Union and China; they hardly conditioned their participation in the proposed "Four Policeman" or the UN Security Council on their readiness to embrace democracy.

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Our preoccupation with the immediate crisis of financial capital is causing us to overlook the bigger crisis in America's human capital. While we commit hundreds of billions of taxpayer dollars to Wall Street, we're slashing our outlays for public education.

Education is largely funded by state and local governments whose revenues are plummeting. As consumers cut back, state sales and income taxes are shrinking; three quarters of the states are already facing budget crises. State revenues account for about half of public school budgets and most funding of public colleges and universities. In addition, as home values drop, local property taxes take a hit. Local property taxes account for 40 percent of local school budgets, on average.

The result, across the nation: Teachers are being laid off and new hiring frozen, after-school programs cut, so called "noncritical" subjects like history eliminated, schools closed, and tuitions hiked at state colleges and universities.

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For anyone seeking real reform of America's foreign and defense policies in the years ahead, Obama's introduction of his national security team was a mixed bag. Set against an increasingly worrisome national security environment -- from the mounting tensions in India/Pakistan to Sunday's New York Times front-page story about epidemic U.S. military-industrial corruption to this week's Washington Post story about Pentagon plans to station 20,000 U.S. troops on the American homeland by 2011 -- it was at least refreshing to see a new row of faces to replace those who have brought us the tragic missteps of recent years. Yet what these appointments really suggest about Obama's broader prospects for reform requires vigilant public attention.

As someone who seeks fundamental reform of so much of the American system, I've been heartened to see a growing number of voices on the airwaves and blogosphere express concern at certain choices made by the Obama transition team that are hard to reconcile with the public's hopes for change. This kind of unrelenting pressure for reform is vital and has already provoked an entirely healthy discourse even among Obama's most ardent supporters, between those who seek far-reaching change and those who see themselves as more pragmatic. Since Obama has not yet even been inaugurated, these voices can only speculate on what his governance might look like, and there's a danger of being either prematurely critical or overly complacent. Still, it's never too early to be vigilant. Let us not forget that it was Obama himself who invited each of us to fulfill our end of the contract between citizen and president in an historic effort to bring about change.

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Our preoccupation with the immediate crisis of financial capital is causing us to overlook the bigger crisis in America's human capital. While we commit hundreds of billions of taxpayer dollars to Wall Street, we're slashing our outlays for public education.

Education is largely funded by state and local governments whose revenues are plummeting. As consumers cut back, state sales and income taxes are shrinking; three quarters of the states are already facing budget crises. On average, state revenues account for half of public school budgets, and most of the funding of public colleges and universities. On top of this, home values are dropping, which means local property taxes are also taking a hit. Local property taxes account for 40 percent of local school budgets.

The result: Schools are being closed, teachers laid off, after-school programs cut, so-called “noncritical” subjects like history eliminated, and tuitions hiked at state colleges.

It's absurd. We’re bailing out every major bank to get financial capital flowing again. But we’re squeezing the main sources of our nation's human capital. Yet America's future competitiveness and the standard of living of our people depend largely our peoples’ skills, and our capacities to communicate and solve problems and innovate – not on our ability to borrow money.

What’s more, our human capital is rooted here, while financial capital moves around the globe at the speed of an electronic blip. Right now global capital markets are frozen, but the big money -- mostly in Asia and the Middle East -- and will come here, bailout or no bailout. At this point it's coming back as purchases of dollars or in the form of T-bills that are financing the Wall Street bailout. Eventually American assets will become so cheap that the money will come rushing here to buy up the bargains.

It’s our human capital that’s in short supply. And without adequatepublic funding, the supply will shrink further. Don't get me wrong: I’m not saying funding is everything when it comes to education. Obviously, accountability is important. But without adequate funding we can’t attract talented people into teaching, or keep class sizes small enough to give kids a real chance to learn, or provide them with a well-rounded curriculum, and ensure that every qualified young person can go to college.

So why are we bailing out Wall Street and not our nation’s public schools and colleges? Partly because the crisis in financial capital is immediate while our human capital crisis is unfolding gradually. But maybe it's also because we don’t have a central banker for America’s human capital – someone who warns us as loudly as Ben Bernanke did a few months ago when he was talking about Wall Street's meltdown, of the dire consequences that will follow if we don’t come up with the dough.

It is impossible to get Mumbai out of my mind. I keep thinking about two-year old, Moshe, sitting in his parents' blood, crying out to a mother and father who are gone forever.

It is hard to imagine how anyone can justify terror against children but many people do. In fact, fanatics of virtually every faith and nationality do indeed justify killing kids or leaving them orphans. It is sickening. Until humanity comes to the understanding that there is no justification - none, whatsoever - for killing children or making them orphans, we remain uncivilized.

Mumbai, of course, was no isolated case. Since the early twentieth century the slaughter of innocents has been considered a legitimate military tactic or, not much better, unavoidable collateral damage. The Arab-Israeli conflict has not yet fully descended into mass carnage (with the awful exceptions of the Hamas suicide bombings and massacres like Baruch Goldstein's Hebron slaughter) but, no doubt, that is where we are heading unless we begin treating the Arab-Israeli conflict with the urgency it warrants.

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Alex, first thanks for joining us here this week to discuss the series. I have a number of questions. But the first one comes out of my own reporting on Saddam from the earlier part of this decade. I started reporting on Iraq in earnest in early 2002 in Washington, DC. And that was of course quite a hot house atmosphere, hitting think tank meetings about Iraq, listening to emigres tell their stories, hearing the various advocates of regime change, etc.

What became very obvious was that the terribleness and brutality of Saddam's regime had become overlaid with a coating of clearly fantastic, sometimes bizarre or even campish tales meant to appeal to the lurid fascination of Westerners, particularly Americans. To some degree, virtually everything we heard about Weapons of Mass Destruction in the lead up to the war fell into this category. But I also remember various stories about people being fed to Zoo animals, various kinds of torture (some of which I'm sure happened), etc.

You hint at this at a couple points in your post. But I'm wondering if my impression strikes a chord with you in what you found researching the series and how you went about chiseling away some of this accretion of lurid tales to get to as real a picture as we can ever get of what really happened, who this man and his circle was?

Telling automakers to make more fuel-efficient cars as a condition of being bailed out is like telling Citigroup or any other big bank to issue more affordable loans to Main Street as a condition of being bailed out. It won't happen. Conditions like these make the public feel better about using their tax dollars to bail out private firms, but they're useless. Automakers, like the big banks, will do the minimum required, and you can bet their lawyers and lobbyists will find ever more clever ways of avoiding even that minimum. Without lots of buyers who want fuel-efficient cars, automakers won't produce them, period. (Without credit-worthy borrows able and willing to pay the costs of bank loans, they won't be issued, either.)

You might think that the recent memories of $5-a-gallon gas would transform nearly everyone into prospective buyers of hybrids that get more than 30 miles a gallon. Think again. Consumer memories are dreadfully short. With gas prices settling down to half that sum, buyers (to the extent they still exist in this recession) are moving back to SUVs and pickup trucks, which automakers are all too happy to provide given the larger profits that come with gas-guzzlers. We're witnessing a repeat of what occurred immediately after the oil crises of the 1970s. As soon as cheap gas was readily available, consumers who had said they wanted fuel efficiency went back to their old ways -- and so did the Big Three.

What to do? Short of a gas tax that would push prices back up to $5-a-gallon -- something deemed politically impossible -- the only way to get lots more fuel-efficient cars is to put the costs of the gas-guzzlers on to the automakers themselves, as part of a cap-and-trade system requiring the major sources of carbon-dioxide emissions to pay for them. This would give automakers a powerful incentive to make more fuel-efficient cars and price them far more attractively than the guzzlers, thereby attracting consumers to them.

But a conditional bailout that flies in the face of consumer demand won't work.

The notion that government deficits may be good has an odd ring these days. For most of the past two decades, America's biggest worry has been inflation brought on by excessive demand. Inflation soared into double digits in the 1970s, budget deficits ballooned in the '80s, Bill Clinton got great credit for erasing the deficit in the '90s, and George W. Bush then pushed deficits up again. But some 60 years ago, when 1 out of 4 adults couldn't find work, the problem was lack of demand. That old problem is now re-emerging.

Where do can we find guidance? One source: John Maynard Keynes.

Some background (via a piece I wrote several years ago):

Kaynes hardly seemed cut out to be a workingman's revolutionary. A Cambridge University don with a flair for making money, a graduate of England's exclusive Eton prep school, a collector of modern art, the darling of Virginia Woolf and her intellectually avant-garde Bloomsbury Group, the chairman of a life-insurance company, later a director of the Bank of England, married to a ballerina, John Maynard Keynes — tall, charming and self-confident — nonetheless transformed the dismal science into a revolutionary engine of social progress.

Before Keynes, economists were gloomy naysayers. "Nothing can be done," "Don't interfere," "It will never work," they intoned with Eeyore-like pessimism. But Keynes was an unswerving optimist. Of course we can lick unemployment! There's no reason to put up with recessions and depressions! The "economic problem is not — if we look into the future — the permanent problem of the human race," he wrote (liberally using italics for emphasis).

Born in Cambridge, England, in 1883, the year Karl Marx died, Keynes probably saved capitalism from itself and surely kept latter-day Marxists at bay.

His father John Neville Keynes was a noted Cambridge economist. His mother Florence Ada Keynes became mayor of Cambridge. Young John was a brilliant student but didn't immediately aspire to either academic or public life. He wanted to run a railroad. "It is so easy ... and fascinating to master the principles of these things," he told a friend, with his usual modesty. But no railway came along, and Keynes ended up taking the civil service exam. His lowest mark was in economics. "I evidently knew more about Economics than my examiners," he later explained.

Keynes was posted to the India Office, but the civil service proved deadly dull, and he soon left. He lectured at Cambridge, edited an influential journal, socialized with his Bloomsbury friends, surrounded himself with artists and writers and led an altogether dilettantish life until Archduke Francis Ferdinand of Austria was assassinated in Sarajevo and Europe was plunged into World War I. Keynes was called to Britain's Treasury to work on overseas finances, where he quickly shone. Even his artistic tastes came in handy. He figured a way to balance the French accounts by having Britain's National Gallery buy paintings by Manet, Corot and Delacroix at bargain prices.

His first brush with fame came soon after the war, when he was selected to be a delegate to the Paris Peace Conference of 1918-19. The young Keynes held his tongue as Woodrow Wilson, David Lloyd George and Georges Clemenceau imposed vindictive war reparations on Germany. But he let out a roar when he returned to England, immediately writing a short book, The Economic Consequences of the Peace.

The Germans, he wrote acerbically, could not possibly pay what the victors were demanding. Calling Wilson a "blind, deaf Don Quixote" and Clemenceau a xenophobe with "one illusion — France, and one disillusion — mankind" (and only at the last moment scratching the purple prose he had reserved for Lloyd George: "this goat-footed bard, this half-human visitor to our age from the hag-ridden magic and enchanted woods of Celtic antiquity"), an outraged Keynes prophesied that the reparations would keep Germany impoverished and ultimately threaten all Europe.

His little book sold 84,000 copies, caused a huge stir and made Keynes an instant celebrity. But its real import was to be felt decades later, after the end of World War II. Instead of repeating the mistake made almost three decades before, the U.S. and Britain bore in mind Keynes' earlier admonition. The surest pathway to a lasting peace, they then understood, was to help the vanquished rebuild. Public investing on a grand scale would create trading partners that could turn around and buy the victors' exports, and also build solid middle-class democracies in Germany, Italy and Japan.

Yet Keynes' largest influence came from a convoluted, badly organized and in places nearly incomprehensible tome published in 1936, during the depths of the Great Depression. It was called "The General Theory of Employment, Interest and Money."

Keynes' basic idea was simple. In order to keep people fully employed, governments have to run deficits when the economy is slowing. That's because the private sector won't invest enough. As their markets become saturated, businesses reduce their investments, setting in motion a dangerous cycle: less investment, fewer jobs, less consumption and even less reason for business to invest. The economy may reach perfect balance, but at a cost of high unemployment and social misery. Better for governments to avoid the pain in the first place by taking up the slack.

Keynes had a hard sell, even in the depths of the Depression. Most economists of the era rejected his idea and favored balanced budgets. Most politicians didn't understand his idea to begin with. "Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist," Keynes wrote.

In the 1932 presidential election, Franklin D. Roosevelt had blasted Herbert Hoover for running a deficit, and dutifully promised he would balance the budget if elected.

Keynes' visit to the White House two years later to urge F.D.R. to do more deficit spending wasn't exactly a blazing success. "He left a whole rigmarole of figures," a bewildered F.D.R. complained to Labor Secretary Frances Perkins. "He must be a mathematician rather than a political economist." Keynes was equally underwhelmed, telling Perkins that he had "supposed the President was more literate, economically speaking."

As the Depression wore on, Roosevelt tried public works, farm subsidies and other devices to restart the economy, but he never completely gave up trying to balance the budget. In 1938 the Depression deepened. Reluctantly, F.D.R. embraced the only new idea he hadn't yet tried, that of the bewildering British "mathematician." As the President explained in a fireside chat, "We suffer primarily from a failure of consumer demand because of a lack of buying power." It was therefore up to the government to "create an economic upturn" by making "additions to the purchasing power of the nation."

Yet not until the U.S. entered World War II did F.D.R. try Keynes' idea on a scale necessary to pull the nation out of the doldrums — and Roosevelt, of course, had little choice. The big surprise was just how productive America could be when given the chance. Between 1939 and 1944 (the peak of wartime production), the nation's output almost doubled, and unemployment plummeted — from more than 17% to just over 1%.

Never before had an economic theory been so dramatically tested. Even granted the special circumstances of war mobilization, it seemed to work exactly as Keynes predicted. The grand experiment even won over many Republicans. America's Employment Act of 1946 — the year Keynes died — codified the new wisdom, making it "the continuing policy and responsibility of the Federal Government ...to promote maximum employment, production, and purchasing power."

And so the Federal Government did, for the next quarter-century. As the U.S. economy boomed, the government became the nation's economic manager and the President its Manager in Chief. It became accepted wisdom that government could "fine-tune" the economy, pushing the twin accelerators of fiscal and monetary policy in order to avoid slowdowns, and applying the brakes when necessary to avoid overheating. In 1964 Lyndon Johnson cut taxes to expand purchasing power and boost employment. "We are all Keynesians now," Richard Nixon famously proclaimed. Americans still take for granted that Washington has responsibility for steering the economy clear of the shoals, although it's now usually the Fed chief rather than the President who carries most of the responsibility.

Keynes had no patience with economic theorists who assumed that everything would work out in the long run. "This long run is a misleading guide to current affairs," he wrote early in his career. "In the long run we are all dead."

When I first heard of the proposed mini-series 'House of Saddam' I was suspicious. Why would the BBC/HBO, UK/America, want to make a drama series about Saddam Hussein? I wondered what the hidden agenda might be. Were they trying to cash in on the demonisation of Saddam - already Enemy Number 1 as far as the Western media were concerned? Whose "version" of history was this going to be? After meeting Alex Holmes I soon realised that this drama series would be different. Not a lesson in the history of Iraq, not about condemnation or praise, it was to be about understanding a tightly knit group of people whose lives orbited around their sun, Saddam Hussein. The perspective was going to be from inside the inner circles and family, looking out. It would be an attempt to go behind closed doors and shed light upon the man himself. That really interested me so I spent the next 2 ½ years researching and script editing the 'House of Saddam' mini-series.

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What I appreciate most about this book is that it takes the goal of democracy (or in Mike Lind's words, republican liberalism) and subjects it to the most searching, pragmatic critique, in the process providing a vision of how democracy best fits into a non-ideological, non-faith-based foreign policy programme. Particularly because democracy is such an intensely hopeful and optimistic political theory, it can elicit a kind of chaos when it comes to strategy. Freedom, it seems to me, is like that. Like pure oxygen, it can inspire and vivify but also make us dizzy. We've seen this from our politicians, whether Woodrow Wilson, Ronald Reagan, or George W. Bush, and we've also seen it from theorists of democracy -- whether Patrick Henry saying "Give me liberty or give me death" or Natan Sharansky saying that freedom should always be pursued, even if it might give violent extremists even more power than they already have.

One of the many changes that President-elect Barack Obama promises is a shift from an ideological or even faith-based reasoning behind our foreign policy to one grounded on the edits of pragmatism -- over and over again, Obama invokes "what will work" as the major criterion. This is a richer standard than you might at first think -- what "works" for a republican liberal, in Lind's terminology, will not "work" for a neoconservative or a paleoconservative. The traditional progressive will be examining whether results are helping the world become more progressive -- they might apply a more traditionally "pure" ethical standard to foreign policy. Lind applies a more hard-eyed, nationalistic analysis -- the American republican liberal will be looking at whether results on the ground square with an increase in liberty that redounds to America's security interests -- whether, in Lind's words, the strategy has resulted in the "defense of the American way of life."

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From Mike Allen at Politico (pardon my italics):

NBC News plans to name David Gregory as moderator of "Meet the Press," infusing one of television's most prized franchises with a sharp edge leavened by a youthful style and versatility, according to network executives.

Gregory, 38, celebrated his 30th birthday -- complete with cake -- aboard George W. Bush's presidential campaign plane, the assignment that solidified his stature as a network rising star.

Eight years on, Gregory has not distinguished himself for independent thought, though a certain grumpiness won him an easy reputation for such among people who think that a birthday cake on a campaign plane is what solidifies "stature." See here for an interesting item from the Columbia Journalism Review. Here are some questions I raised about Gregory's acumen in August. Here he was his penetrating question of Sen. John Thune (R, SD) at midnight after Sarah Palin's St. Paul speech: "Senator [John] Thune, was a star born here tonight with Sarah Palin?"

I try not to rush to judgment. I'm trying. Trying.

A lot of folks take the fact that most high-tech industries appeared in the modern period of anti-union rules and thus there are few unions in such industries to mean that unionism itself doesn't "work" for high tech, high-skilled workers. But then you have one of the original high-tech industries-- modern aviation -- and a massive union of engineers and technical workers who just approved their contract with Boeing:

Nearly 21,000 engineers and technical workers for The Boeing Co., most of them in the Puget Sound area, have approved new labor contracts that will give them more say in the company's controversial outsourcing decisions and the use of contract workers. They also will receive more for retirement and a pay raise that will average about 20 percent over four years.

I've never quite understood the logic that says that blue-collar manual workers have something to gain from more democratic say over their wages and conditions of work, but higher-skilled workers don't.

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As I considered Mumbai, living in Jerusalem, a few hundred yards from many such attacks, I came upon this paragraph during my bedtime reading, in Adam Gopnik's lovely book, Through The Children's Gate. Adam is recalling a conversation in New York, just after 9/11. Think of it as we judge what President-elect Obama means by wedding military power to other power:

Later that day, I bump into F.A., the Arabist, and we have a talk about What Is To Be Done. I ask him if there is anything we can do about madmen who worship psychopathic gods. And he says something obvious but interesting: that there's nothing to be done about the core, the real nuts, but they exist, as human beings must within concentric circles of culture: an immediate circle of murder-minded sympathizers and financiers; a circle just outside that of sympathizers who would not do such things themselves but will not stop them from happening; a circle beyond that of people who choose not to know what is being done but sympathize with the radical purpose; a circle beyond that one of the fearful and even sentimentally sympathetic--and on and on, each circle of culture outside the actual nucleus of evil a little larger and a little less regular in its orbit than the one before, and therefore able to be dried up, reduced, set loose. Attack and persuade the outer circles of culture to abandon the inner circles, and eventually, the core will be all alone, isolated and futile.

Basically, Michael is asking how much we should care about goings-on in other lands; how much we should do about them; and how the first question relates to the second. It's one thing to be horrified by man's inhumanity to other (wo)men, but another to view it as an imperative to get involved. Doesn't the nation-state system offer valuable stability, which we weaken at our own peril?

The arduous efforts to democratize Iraq and Afghanistan are nothing if not injunctions to be less ambitious, meddlesome, and presumptuous. But how cautious should we be? Can the values agenda be pursued more prudently, or would the truly prudent course be to ditch that agenda altogether?

Michael's safe-for-democracy strategy is too passive, heartless, and unambitious for my taste. On the other hand, I think many of the related concerns can be assimilated into a more carefully calibrated liberal interventionism.

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If this isn't a Great Crash I don't know how to define one. Stocks were down another 7 percent today. Since the peak of last year, major stock indexes have dropped 47 percent. We're in range of the Great Crash of 1929.

Why is the Great Crash of 2008 happening? First, because investors are beginning to understand the enormity of the bubble economy that began to form in the late 1990s when all contraints were lifted on borrowing in order to buy everything that was assumed to be increasing in value -- starting with houses and including securities and shares of stock themselves. So-called "margin requirements," first instituted in the wake of the Great Crash of 1929, were all but abandoned, as big banks and hedge funds found ways around them.

Even more important, investors are starting to fathom the emptiness of American consumers' wallets. Retail sales last Friday and Saturday -- the first days of the Christmas buying season -- were disappointing. Had retailers not discounted to the point of taking losses, sales would have been abysmal. In other words, consumers have gone on strike.

Why have they gone on strike? Not because of the difficulty of getting credit. Most consumers can barely afford to pay the interest charges on the debt they're already carrying. Consumers have gone on strike because their earnings haven't kept up. The recovery that officially ended December, 2007 (the National Bureau of Economic Research now tells us) was the first on record in which median earnings declined, adjusted for inflation. Since then, many people have also lost their jobs or are working part time when they'd rather be working full time, or else know they're in danger of losing their jobs.

The speculative bubble still has some air in it; asset values will continue to drop before they hit bottom. That will take at least a year, possibly two. But don't expect asset values to bounce substantially back, even then. The only way to revive Wall Street is to revive Main Street, and the only way to accomplish this is to get America back on the course of rising median incomes.

The law is anything I write on a piece of paper.

Saddam Hussein had a way with words. I came across this quote of his relatively early on in my research into Saddam and his inner circle for the HBO/BBC miniseries, House of Saddam, which airs on Sunday night. It was a phrase that echoed in my mind, not just because of the terror and hubris it suggested was at the heart of our character, but also, as a screenwriter trying to tell the story of a regime I had never experienced directly myself, I took it as a warning. Writing things on bits of paper could be powerful, and with that power came a responsibility.

I had a responsibility to the people whose lives we were dramatizing, to fairly and honestly represent their actions, to those people who had suffered and died at the hands of his regime, so that the cause of their suffering wasn't misrepresented, and to be fair to our audience, so that the view the series would give wasn't to partial or incomplete so as to be misleading.

Stick to the facts and you can't go wrong. That would be a good place to start. If only it were as simple as that. When it came to the task of telling the story of Saddam's inner circle there were two challenges to following this good advice. The first was: whose facts?

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I'd like to thank the Book Club for hosting this discussion of The American Way of Strategy: U.S. Foreign Policy and the American Way of Life, which is now out in paperback just in time for the change in administrations. I should mention that Parameters, the U.S. Army War College Quarterly, in its latest issue has published my exploration of the implications of the book's thesis for U.S. military strategy in "A Concert-Balance Strategy for a Multipolar World," for those who are interested.

I wrote The American Way of Strategy for two reasons. The first was to describe and rehabilitate an important but almost forgotten way of thinking about U.S. foreign policy. The second reason was to defend an older tradition of liberal internationalism which seeks to promote nonintervention as the chief norm in world politics and holds that a concert of status quo great powers can preserve international peace at the lowest cost to a free society in the United States and similar democracies.

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We have two projects running at TPMCafe this week, both focused on Iraq.

First we'll be running a discussion between TPM's own Josh Marshall and Alex Holmes, a co-writer of House of Saddam, a four-part miniseries documenting the rise and fall of the Iraqi dictator. Produced in partnership with HBO and BBC, the drama aired in Britain this summer, and will air on HBO starting December 7. We'll be posting a few clips from the film throughout the week, so stay tuned.

At our Book Club, Michael Lind joins us for a discussion of his 2006 book, The American Way of Strategy. Lind, once the darling of conservative circles, now bills himself as a member of the "Radical Center" and serves as a senior fellow at the New America foundation. In the book he asks:

Is it all propaganda, then? Is the statement that American soldiers died in foreign wars defending the liberties of Americans nothing more than a patriotic lie? The thesis of this book is that the assertion is true ... The purpose of the American way of strategy has always been to defend the American way of life.

Other Book Club participants this week include: David Rieff, Senior Fellow at the World Policy Institute at the New School for Social Research; David Shorr, the program officer in Policy Analysis and Dialogue at the Stanley Foundation, and coeditor of Bridging the Foreign Policy Divide; Michael Signer, the Senior Policy Advisor at the Center for American Progress Action Fund and author, Demagogue: The Fight to Save Democracy from Its Worst Enemies; Charles Kupchan, a professor of international relations at Georgetown University and Senior Fellow and Director of Europe Studies at the Council on Foreign Relations; and Anne-Marie Slaughter, the Dean of the Woodrow Wilson School of Public and International Affairs at Princeton.

Join us.

From Roger Cohen on today's NYT site, a timely recommendation:

I think Olmert's words should be emblazoned on the wall of Hillary Clinton's eighth-floor State Department office: "We must reach an agreement with the Palestinians, meaning a withdrawal from nearly all, if not all, of the territories. Some percentage of these territories would remain in our hands, but we must give the Palestinians the same percentage elsewhere -- without this, there will be no peace."

Asked if this included a compromise on Jerusalem, Olmert said, "Including Jerusalem."

He also declared, "I'd like to know if there's a serious person in the state of Israel who believe that we can make peace with the Syrians without, in the end, giving up the Golan Heights." Those words should go up on Clinton's wall, too....

Getting to...a two-state deal at, or close to, the 1967 borders will require concerted U.S. involvement from day one of the Obama administration. Its tone should be one of tough love, with the emphasis on tough.

This will be my final post in this discussion, so let me once again offer my thanks to the participants, and to everyone who posted comments. One of my big complaints about the bulk of the columns and articles that have been written so far about the prospect of post-Bush commissions and investigations is that few of them have engaged with the subject on a practical level--much has been written about whether a so-called truth commission is the right or wrong thing to do, but very little about how it would actually happen. Anne, Daniel, Kate, Mickey, Scott and Suzanne have all addressed this subject substantively, and I think our collective disagreements over what a real reckoning with the Bush legacy should look like demonstrate what a thorny and complicated proposition this really is.

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It all starts with the owner. The Redskins play in an ugly stadium, built before the owner acquired the team, but the price gouging on every good and service, the lack of decent transportation, the terrible sound system, and exploitative ersatz ceremonies make everything seem even uglier. Little reason the team doesn't play better at home than when on the road.

And the owner's choice of the top executive, surely one of the real reasons for Gibbs' sudden and unsettling departure last year, has been proven a failure in a remarkably short time, as the new coach is not demonstrating cool command and the draft choices have been a remarkable bust. No one drafts a punter, but it is inexcusable to draft a punter who can't kick. The place kicker can't kick well either, and almost every team has found someone who can. And the special teams were hurt by the cut of Torrance, which apparently was driven, as were many other decisions, by wanting to avoid cutting more of the dreadful draft choices.

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The Mumbai terror attacks were appalling. That should go without saying.

But we all need to be on guard as the usual Muslim bashers go rushing to the barricades to indict Pakistan (with no evidence of its involvement) and Muslims in general.

Take a look at this garbage from the New Republic. Martin Peretz is practically wetting his pants in excitement at the possibility that Mumbai can be used against....the Palestinians.

The Israeli right (in Israel and here) strongly supports, and works with, the Hindu/ BJP right in India on the predictable grounds that the enemy of my enemy is my friend. There will be a joint effort to blame Islam as a civilization for this horror. As for Pakistan, it could be implicated but so far it hasn't been.

So let's not fall for propaganda. The facts are bad enough.