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Week of March 1, 2009 - March 7, 2009

Chas Freeman's Son Lets Steve Rosen and Company Have It

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This is a great piece by Chas Freeman's son. It's not just great because I love to see kids defend their parents (yes, I even loved it when Julie Eisenhower went out on to the White House lawn and defended #37 with all she had).

But it also gets right to the point about Freeman. Unlike his critics, he is not driven by politics. He's sometimes right and sometimes wrong but he is motivated by his belief in what is best for America.

I also admire that young Freeman does not point out that his wife and his kids (Freeman's favorite people in the world, his grandchildren) are conservative Jews. Freeman is not the type to mention that. I am.

Also, Andrew Sullivan on Freeman:

And Juan Cole on bullying.

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Fayyad Resigns To Make Way For Unity: Time To Drop Three Conditions Banning US Dealings with Hamas

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Good news. Palestinian #2, Salam Fayyad, has resigned in order to facilitate a Fatah/Hamas unity government. This is an important step toward advancing an end to the split which makes any kind of Israeli/Palestinian deal impossible.

This is all the more reason for Secretary of State Hillary Clinton, who did an outstanding job on her Middle East trip, to drop the three conditions banning US dealings with Hamas.

They are, not surprisingly, ridiculous (they came from Bush) and will, unless dumped, will prevent any kind of solution to the Israeli-Palestinian comflict.

Even the Israelis understand that the Gaza war was not only a humanitarian disaster; it utterly failed. Hamas is stronger than ever.

It's time to deal. Here is what I wrote in IPF Friday.

AND HERE Sen. Jon Kyl (F-AZ) puts forth an amendment to ban Gaza refugees from coming here. Read Phil Weiss.


Democratic Incumbents Need Primary Challenges

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Glenn Greenwald is pushing the Accountability Now project which is designed to raise money so that more Democrats will face primary challenges.

It is a terrific idea. Today, in most districts, election to Congress is election for life. This is especially true if the districts that are solid blue or solid red.

Elected to the House from New York, Los Angeles or Chicago, you have the job for life. And progressive voters have no choice. You either vote for the incumbent, often timid and close to a myriad of special interests, or not vote at all.

In my younger days, that is not how it was. In the late 1960's and early 1970's, Democratic hacks were knocked off in primaries. In my own state of New York, that is how we got Bella Abzug, Liz Holtzman, Jonathan Bingham, Jim Scheuer, William Fitts Ryan, and Shirley Chisholm.

They defeated liberals with 100% liberal voting records but who supported the Vietnam war and were go-along, get along kinds of guys.

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Two things to remember on March 8, 2009

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The first is easy. Change all your clocks because we're about to have more light again and the days will suddenly gain a spaciousness we lost during the winter. Yes, it's Daylight Savings again.

The second is harder. It's also International Women's Day. What you should do? First, consider the amazing fact that on March 3rd, President Obama issued a proclamation for Women's History Month and asked that "we pay particular tribute to the efforts of women in preserving and protecting the environment for present and future generations."

Then, consider that although men have been hit hardest by unemployment, the vast majority of the poor on the planet are still women and their children. Even more, join others who pay attention to the gruesome rapes, mutilations and murders that women in Congo and Sudan have suffered and continue to suffer, without international intervention. If they were a tribe, we would call it genocide.

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The 2008 Campaign: A Laughing Matter

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To wrap up for the week: Thanks to all for participating. We had some healthy disagreements and I recommend that readers look at the posts below and also scan some of the good comments.

I thought I'd close on a lighter note, while also posing a question: How big a role did "comedy" play in the 2008 and is this a role that will only grow in campaigns ahead? Let's hear from you.

I ask this now as wide attention continues to focus on Jon Stewart's CNBC takedown from Wednesday night. Thanks to Web links, millions more have seen it beyond watchers of "The Daily Show" and I suspect that it made vivid for the first time, for many, the true culpability of TV pundits in the economic meltdown.

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Deep Thought

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(in homage to Josh)-I looked at my investment portfolio today and realized that the only asset class that held it's value over the last 12 months was government debt-in my case California tax free municipals and U.S. Treasuries. If credit=trust, it's interesting that we have more trust in our governments than we do in our banks and other corporate robber barons whose stock and bonds we used to own based on their fantasy forecasts.

AIG and the Auto Companies

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Although I generally applaud the recovery measures advanced by the Obama Administration, I think their approach to the Auto companies and AIG has been been marked by an unwillingness to face facts. Why are we bailing out AIG? Because it is a backdoor way to bailout the big banks. Every time AIG pays a bank 100 cents on the dollar for a defaulted mortgage bond worth 20 cents on the dollar (under a Credit Default Swap contact) the bank's balance sheet looks better. And we're getting hosed.

As to GM and Chrysler, the current world auto producing capacity is about 92 million cars a year. Last year's sales were about 50 million cars and they are on a declining demand curve. GM, Chrysler and Larry Summers can engage in wishful thinking that the world will soon return to needing 90 million new cars a year, but it is unhelpful. GM currently has $30 billion of debt and the bondholders seem unwilling to do a total debt for equity swap. As for Chrysler, why the government should bail out the Cerberus Hedge Fund is beyond me.

The process of creative destruction is painful. Auto capacity will fall and hopefully solar and wind generation capacity will increase (unless we want to keep buying wind turbines from the Germans). The UAW, with some government support, should start retraining auto workers for the new jobs. The Treasury should arrange for an orderly Chapter 11 Debtor in Possession financing package for GM and Chrysler. Only faced with the reality of a judge who can force the bondholders to convert to equity, will these firms scale down to the appropriate size to feed the existing car market.

The Effort To Block Obama's Intelligence Choice Gets Very Creepy PLUS ATTACKERMAN Defends Me Against Indictee

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FIRST, the great Spencer Ackerman.

The effort to force President Obama to withdraw the nomination of Chas Freeman as chairman of the National Intelligence Council is getting very very creepy.

Initially, it was just typically ugly. The forces that support the Likud line on Israel always try to block any appointment of anyone who opposes Israeli policies in the occupied territories. During the past eight years they got accustomed to having their people in virtually every foreign policy post. They were called neocons and one of that group's many successes was manipulating the intelligence that got us into Iraq (see Feith, Douglas).

So it was natural that when President Obama apointed someone who was on the record as strongly opposing the occupation they would go ballistic -- and they did.

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The New Media--Three Thousand Miles Wide and an Inch Deep?

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Greg and I will just have to disagree about whether the economic collapse did more to doom McCain's candidacy than the nomination of Sarah Palin. (Though while we are on the subject of V for Viral I have to personally plead guilty to sending everyone I know of voting age a link to this video which I'm also saving till 2012 just in case....)

And I'm glad to see the shout out to Tina Fey. My decidedly unscientific sense is that SNL's skewering of Palin probably cost the GOP 3 states. And though for those of us outside the range of NBC's transmitters the internet made it possible to savor the skit again (and again and again), I'm not sure SNL really counts as new media.

So instead I want to pick up on the question of whether, by sweeping past the MSM gatekeepers, the new media really does push not just political coverage but politics itself in a more democratic direction.

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'Democratizing' Politics

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In his post today, DD Guttenplan asks whether "the new media really does push not just political coverage but politics itself in a more democratic direction." To my mind, this is the most important element of new media's influence. Put aside the debate about its impact on journalism - where the new media is really changing politics is the means by which Americans get news and information about candidates seeking higher office.

One of my favorite anecdotes from the 2008 campaign is that the YouTube video of Barack Obama's race speech was among the most viewed content on the site, with millions of unique viewers. That millions of Americans wanted to watch one of the presidential candidates give a major speech on the issue of race in America is perhaps the best evidence of the positive impact that new media can have on our political discourse.

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Rush Gets Played by Rahm

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54970f9bde170679d1_5jrmvyp9t Here is the contest the the DNC is running. You send in a slogan for a "Message to Rush" --the winner will be placed on a billboard in Rush's home town.

How did Limbaugh, a supposedly canny guy, get so played by the White House? Ranting on, last Saturday night at the CPAC Conference, looking like a bad Russian Mafia imitator--proclaiming his deep desire to see Obama fail--was the kiss of death.

I had lunch with a very conservative friend today. We haven't seem eachother since early October of last year, before the Obama victory. The lunch was very civil and we found some common ground when my friend said upfront, he was glad Obama beat McCain and Palin. And then we found some more common ground on Health and Education Reform. So the meal was a lot less tempestuous than I expected. As we were getting in our cars, I asked him "How did Rush allow himself to get played like a stradavarius by Rahm Emanuel?".

It was at this point that my friend went ballistic on me and said "Obama was a chicken" not to debate Limbaugh one on one, like Rush has been asking on the air for weeks.

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Rotwang Ruminates (2)

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rotwang.jpgReveling in the perversity of your enemies seems like clever political tactics, but does anybody remember "After Hitler, us"?

Anyone with a website on which a video starts automatically ought to be horsewhipped.

La Marshall Continua. I am happy to take credit for TPM being a "far-left blog." Not like that milquetoast Atrios.

Take a gander at this goose. Maybe some are outraged that Karl Rove compared Bush era political influence of DoJ to campaign manager Robert Kennedy becoming attorney-general. But Rotwang remembers that the saintly "Bobby" authorized FBI surveillance of Martin Luther King. (See also this.) And we won't even bring up the Joe McCarthy stuff. Oh wait . . . we did.

Since Jim Cramer is such a rah-rah conservative now, I hope the Republicans put him in charge of RNC finances so he can get in on the ground floor of the next company to go tits up. (Always wanted to use that Brit expression.)

Advances in microsurgery.

In your guts you know he's nuts. Forget Palin, Huckaby, Romney. Run Rush run!

Worthwhile Canadian Initiative. Since Canada's banks were sufficiently regulated to completely avoid the present debacle, I say let them buy up the U.S. banks. I for one am ready to welcome our new Canadian overlords.

A conspiracy so vast. The Right has misjudged the dimensions of the dilemma they face. The Democrats did not conspire to make Limbaugh their national symbol. No, they in fact engineered the election of a certifiable imbecile named George Bush who would accomplish the profound discredit of the G.O.P. For his sacrificial dive into the tank, Al Gore was compensated with a Nobel Prize and an Oscar.

Michael Steele . . . . oh what's the point. Too easy.

It's Changing: John Kerry, At Brookings, Says US Mideast Policy Needs Overhaul

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The Chas Freeman controversy demonstrates, more than anything else, that the status quo lobby is running scared.

Three things have them waking up in night sweats: President Barack Obama, the American public's reaction to the Gaza war, and Avigdor Lieberman.

The status quo lobby never liked Obama and preferred others in the primary and McCain in the general (in contrast to the Jewish community which went 78% for Obama). The Gaza war was a PR nightmare. It looked like a 21st century military blitz against the kids in "Slum Dog Millionaire." And Avigdor Lieberman, and an all-rightwing government, is a propaganda disaster. No Livni or Peres to soften a far right government's image. (Also Israelis worry that Hillary Clinton still remembers that Netanyahu came to Washington at the height of the Lewinsky crisis to hobnob with Gingrich and Falwell as if her husband was toast).

And now this. John Kerry, chair of the Senate Foreign Relations Committee, delivered a speech today in which he said that the United States needs to stop deferring to Israel on matters that affect our security, and not just theirs.

Best part: "Nothing will do more to make clear our seriousness about turning the page than demonstrating -- with actions rather than words -- that we are serious about Israel freezing settlement activity in the West Bank."

Read or watch Kerry here.

Clayton Swisher From Doha: How They See It In The Desert

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This is a fine piece by my friend, Clayton Swisher, who is now an Al Jazeera correspondent in Doha.

TPM readers know that I'm always promoting Clay's book, The Truth About Camp David. Clay's book offers the best explanation I've seen as to why the Camp David Summit of 2000 failed (no, it was not because Arafat said "no" to Barak's "generous offer."

Clay knows better. Although only 24 at the time, he was at Camp David, got to know all thew players, and interviewed them all for his book.

In his Nation piece today, Swisher describes how some young Arabs he knows in Qatar feel about the Israeli-Palestinian conflict, President Obama, the Arab Initiative and the state of the world. I came away thinking that, under Obama, we have a chance to win these people over but, without radical change, we will blow the opportunity.

Of course, I've learned one thing over the past few years. Trust Obama. He knows what he's doing.

Worst Downturn since the Great Depression

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reed worst downturn since great depression.png

Borrowing this chart from Brad De Long, our most excellent econoblogger and polymath, to make a few points:

The mainstream media don't (doesn't?) talk about work in a way that fits the times. In the 50s, when I was a kid, and well past 1969, after which I needed income to buy food, roof over head, and so forth, in my country less than 58% of adults worked even in good times. The signified premise behind this statistic was what we saw, back in the day, in TV sitcoms: one adult, usually male, supported a family. Over time that adult, with hard work and a little luck, earned increasing income, bought a larger house, saw its value go up at least according to inflation, enjoyed the tax deduction of the mortgage interest and so earned a retirement "nest egg," and worked for the same employer for eight years or even more. The stay at home spouse raised the children. This was the occasionally maligned (especially in novels) The American Dream.

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The Presence of Justice

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Among the strange, but actually most revealing, preoccupations of politicians and journalists since the last election is Avigdor Lieberman's insistence that Olmert's Justice Minister, Professor Daniel Friedman, be reappointed. Ehud Barak (who anyway likes being Defense Minister) has said that Friedman represents a danger so dire that Labor should consider joining the Netanyahu government just to block him. Rumor has it that former Chief Justice Aharon Barak thinks so, too. (I heard the latter Barak on the radio a couple of days ago and he denied advising the former Barak; but he was clear that he shares a great fear that Friedman will stay on.)

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Friedman is an Israel Prize winner and former Dean of the Tel-Aviv University Law School. He is an outspoken critic of "judicial activism," something like Professor Robert Bork in his heyday. But Friedman is most outspoken about reforming the process of appointing High Court judges (and Attorneys-General) to more closely resemble the American system, where a democratically elected executive has a decisive say in the nomination of candidates for judicial positions, which the legislature then ratifies. Right now the Israeli judiciary remains something like a closed shop, where candidates for appointment by the President are reviewed by judicial and professional nominating committees. Law-makers participate but do not have true power over the process. Judges are promoted a little like the way Tel-Aviv University Law professors are tenured. This is hardly more "democractic" than Friedman. So why the fuss? 

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Confusion, Tunneling, And Looting

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Emerging market crises are marked by an increase in tunneling - i.e., borderline legal/illegal smuggling of value out of businesses. As time horizons become shorter, employees have less incentive to protect shareholder value and are more inclined to help out friends or prepare a soft exit for themselves.

Boris Fyodorov, the late Russian Minister of Finance who struggled for many years against corruption and the abuse of authority, could be blunt. Confusion helps the powerful, he argued. When there are complicated government bailout schemes, multiple exchange rates, or high inflation, it is very hard to keep track of market prices and to protect the value of firms. The result, if taken to an extreme, is looting: the collapse of banks, industrial firms, and other entities because the insiders take the money (or other valuables) and run.

This is the prospect now faced by the United States.

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Brilliant Israeli Animation on Gaza Horrors

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In Gaza the suffering continues. Pointless, meaningless, suffering which accomplishes nothing.

A wonderful Israeli organization, GISHA, which is dedicated to advancing Palestinian freedom of movement, commissioned this animation which was produced by Yoni Goodman, animation director of "Waltzing With Bashir."

The situation has deteriorated since the film was made due to the war and the blockade. Go here if you want to help.

AIPAC Case: About To Be Thrown Out?

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This is a fine piece by former AIPAC lobbyist, Doug Bloomfield, on the AIPAC case.

Bloomfield believes that the case is too weak to go to trial (no disagreement from me on that point) and that, in the end, the two defendants will be cleared and then sue AIPAC, which fired them at the start of the case, for "wrongful termination."

He also thinks AIPAC will settle to avoid going to trial and that their two former employees will end up very rich men.

I don't know enough about any of this to know if Bloomfield is right but he's worth a read. I do know this. It should not take five years to bring defendants to trial. That seems unfair, even unconstitutional given the sixth amendment right to a "speedy trial."

Don't Forget the Messsage

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Let me first thank Kyle and Lila for asking me to participate in this week's book chat and of course thanks to Greg Mitchell for writing such a thought-provoking book.

Greg is really on to something about the importance of new media in political campaigns. It's not simply a question of using digital technology to get your message out, but it is also about how technology transforms the way candidates raise money and organize their supporters. The former in particular was not only hugely beneficial to the Obama campaign but by giving more Americans the opportunity to support their candidate it really helped democratize the political process and empowered millions of citizens.

The benefits to our democracy of the trends that Greg notes are really vast. I remember when I was a kid and I wanted to follow the presidential campaigns I had to rely on the 2-3 minute snippet from the evening news. Today, anyone can go online and read and watch the candidate's speeches, check out their positions, meet like-minded folks, find a place to volunteer etc. The extent to which new media is opening up American democracy so that more people can participate is perhaps the most important takeaway from the 2008 campaign. And I think we can all agree that this is a uniformly good thing!

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Jeff Goldberg, in Atlantic, Calls Me "Slander Expert" re Freeman

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Jeff Goldberg, formerly of the New Yorker now at the Atlantic, is furious because I wrote here at TPM that the attacks on Chas Freeman are motivated by his views on Israel.

But, of course, they are. No one paid any attention to the Freeman appointment until Steve Rosen, the AIPAC official terminated by that organization when he was indicted, began organizing the anti-Freeman campaign.

Goldberg also says that I should not have lumped him with the group of Freeman opponents motivated by anti-peace process bias. He writes that he supports the peace process and that he merely opposes realists like Freeman and is appalled that I do not share his opposition.

Good. I'm glad he supports the peace process and I'm sorry I implied that he doesn't (by lumping him in with the other Freeman opponents listed in another article). He's a terrific writer and a courageous journalist. However, the issue here is Freeman.

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Turning Points, Palin, The Debates -- and "V" for Viral

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Thanks for all the postings so far, which are all interesting, and wise, especially about some of the limits of "new media" in the post-campaign period.

Some, however, have misread my initial postings. I never wrote that Bill Clinton hitting the campaign trail was "the" turning point in the race but only "a" turning point. I never said his offensive statements alone were the reason millions of African-Americans suddenly switched from Hillary to Obama but only that they really helped promote that process.

As for the economic crisis, not the Palin pick, dooming McCain: Polls showed that McCain had tied the score with Obama very briefly during the GOP convention but when details about Palin's background and complete lack of national or international experience quickly emerged, Obama took the lead again and never looked back. Yes, the economic crisis sealed McCain's doom but, in my view, he would have lost anyway because of Palin (along with the Bush legacy and the "change" motive). The one thing McCain had going for him was "experience" and he threw that away with the Palin choice.

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Real Discretionary Spending

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The Great Recession is giving us a lesson in just how "discretionary" most spending is. Auto sales fell off a cliff in the last three months. It was obviously easy for most people to postpone the purchase of a car, despite massive sales incentives. But surprisingly the same is true for many medical procedures.

Forty-four percent of hospitals have seen declines in surgeries, with hip procedures showing the steepest drop-off at 45%, according to another new survey. As a result, 47% of the hospitals surveyed expect to make staff cuts, and 69% plan to cancel or delay equipment purchases, according to the survey by Novation, a company that manages supplier contracts for hospitals.

One of the things the Obama Administration has to be careful of in both the Auto bailout and the Health Care investments is to not pour money into industries that are suffering from massive overcapacity. The nation's savings rate has rocketed to 5% from zero in four months. Assuming we will go back to our old profligate habits of buying a new car every three years or getting plastic surgery on a whim is probably a bad bet.

Wow. Hillary Comes Down Hard Against Israeli Home Demolitions

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Secretary of State Clinton is telling it like it is in Israel. Today she told Israelis to end the demolition of Palestinian houses in East Jerusalem. This comes as Israel prepares to establish a Jewish enclave in the all-Arab Silwan area.

Ha'aretz reports that she said that "Clearly this kind of activity is unhelpful and not in keeping with the obligations entered into under the 'road map', It is an issue that we intend to raise with the government of Israel and the government at the municipal level in Jerusalem."

Clinton is also taking a hardline against Prime Minister-designate Netantyahu's plan to replace the two-state solution with economic development and limited Palestinian autonomy. She has repeatedly endorsed the two-state idea and told Netanyahu that "economic peace is futile without diplomacy."

She has also expressed her anger at the delays in getting humanitarian aid to Gaza and emphatically denounced settlement expansion.

I'll add more to this post later. Look forward to the denunciations from Hillary's "shocked and disapoointed" former friends in the status quo camp.

Is Obama Responsible for Wall Street's Meltdown? Where Populist Rage is Heading

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Is Obama responsible for the meltdown of the Dow? The consistently wrong-headed Wall Street Journal's editorial page says so, as does Republican Fox News, CNN's reliably demagogic Lou Dobbs, and now CNBC (where, full disclosure, I frequently appear as a token liberal). CNBC's Jim Cramer, who bloviates nightly about stock picks, says Obama is pushing a "radical agenda" that's destroying investor's wealth. My friend Larry Kudlow, who rants nightly about nearly everything, says Obama is destroying capitalism. CNBC reporter Rick Santelli's ballistic nonsense about Obama's mortgage plan made him a pop-populist icon for a week or so.

The argument that Obama is somehow responsible for the collapse of Wall Street is absurd. First, every major policy that led to this collapse occurred under George W's watch (or, more accurately, his failure to watch). The housing and financial bubbles were created under Bush and exploded under Bush. The stock market began to collapse under Bush.

Second, it's inevitable that stocks, led by the bloated financial sector, would lose their remaining hot air as the new administration begins "stress-testing" the big banks, many of which are technically insolvent. After all, their share prices were built on a tissue of lies and dreams. Other sectors whose values were similarly distorted and distended by years of financial deception and regulatory disregard, such as housing and insurance, will also have to return to the real world before they can recover. Which could mean more stock losses.

Finally, none of the financial wizards who are now charging Obama with leading America into the abyss has offered an alternative plan for getting us out of the mess that, not incidentally, many of these same wizards happily led us into. For years, the Wall Street Journal editorial page and the financial gurus of cable news cheered as Wall Street leveraged its way into oblivion.


This bizarre charge wouldn't be worth mentioning were it not a market test for a more intense attack from Wall Street and Republican media outlets next year as the nation moves into the gravitational range of the 2010 midterm elections. Republicans have made no secret of their wish to blame Obama for the bad economy, and to stir up as much populist rage against his so-called "socialist" tendencies as politically possible. History shows how effective demagogic ravings can be when a public is stressed economically. Make no mistake: Angry right-wing populism lurks just below the surface of the terrible American economy, ready to be launched not only at Obama but also at liberals, intellectuals, gays, blacks, Jews, the mainstream media, coastal elites, crypto socialists, and any other potential target of paranoid opportunity.

To complicate matters for Republicans, however, grass-roots populist rage is also building against Wall Street itself, and with some justification. Top Wall Streeters who raked in tens of millions of dollars a year for more than a decade have now effectively eviscerated the pension fund savings of millions of middle-class American workers and destroyed millions of Main Street jobs. The public is understandably appalled that its tax dollars are being used to pay and prop up the very people and institutions responsible for this debacle. And there seems to be no end in sight: Citigroup and the insurance mammoth AIG, in particular, have become giant ongoing sump-pumps for tens of billions of public dollars. Yet no one seems to know exactly where these dollars are going, or why.

Worse: When it turns out that people like Lloyd Blankfein, the CEO of Goldman Sachs, who took home $68 million in 1997, was the only Wall Streeter in a meeting last September at the New York Federal Reserve to discuss the initial AIG bailout with Tim Geithner, then New York Fed chair, among others, at the very time Goldman was AIG's largest trading partner, a distinct scent of self-dealing begins to emanate. When it turns out that Citigroup got a bailout deal last October far more generous than that given to any other distressed bank, when a top Citi executive was advising the Treasury and Fed, the scent increases. Goldman's past CEO was Treasury Secretary at that time, by the way, and another former Goldman's CEO was a top Citi official and also a former Treasury Secretary. I am not suggesting anything so crude as corruption. But could it be, given these tangled webs, that -- innocently, unintentionally, perhaps even subconsciously -- the entire bailout effort was premised on saving these companies rather than protecting the public? Or that the distinction between the two was lost, and still is?

The Wall Street and Republican media attack machine doesn't know exactly what to make of this. The Wall Street Journal's editorial page, along with CNBC, alternates between attacking Obama for bailing out Wall Street and excusing Wall Street's excesses. But then again, Obama doesn't seem to know exactly what to make of it either. He seems to vacillate as well -- one moment scorning Wall Street, the next moment justifying further bailouts. I do hope he takes a firmer hand, drawing a clearer distinction and making a clearer connection between clearing up these financial balance sheets and helping average people. Otherwise, the next populist uprising will be born in this moneyed quagmire. It is here -- within the muck that was created by AIG, Citigroup, Fannie and Freddie, other giant financial institutions, now in combination with the U.S. Treasury and Fed -- that the public is most confused, bears its most serious scars, and is potentially most burdened in future years, by decisions still made in secret.







Leader of the Opposition

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Secretary Clinton is tying up our traffic with her motorcade, but is otherwise getting things going here. She might have announced, as some of us had hoped, that she was reviving the 2000 "Clinton parameters"--and has not. But she's done the next best thing, stating four positions in 24 hours, each important in themselves, but also code every Israeli understands, policy positions that directly oppose what Benjamin Netanyahu (and the rightist parties bound for his coalition) ran on.

First, Clinton said that the immediate priority is to get to a cease-fire in Gaza, and she's helped raise $4.4 billion for Gaza reconstruction. She and Obama have also reportedly received a letter from Hamas through Senator Kerry, and has been quietly encouraging talks that might lead to a "unity" Palestinian government. Clinton is, appropriately, condemning the continuing missile attacks, but has also emphasized the need to get the border open. Translation: America will not support a new attack on Gaza, ostensibly for the purpose of changing the regime there.

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A virtual bus is still a bus

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I salute Greg Mitchell both for the clarity of his argument and the boldness of his claim. What were the key moments in the campaign: Bill Clinton's plunge into campaigning for Hilary and John McCain's decision to pick Sarah Palin as his running mate. Why did Obama win? Because he alone understood the new media and the new political landscape they opened up.

As it happens I don't agree with any of these propositions, but however much I may fault his logic I admire Greg for not hedging his bets. Also I think he's completely right that the new media (blogs, websites, RSS feeds) have completely changed the way campaigns are and can be covered. And like him I think that change is mostly a good thing. Indeed I once wrote that the new media "has gone a long way toward providing a level playing field for political reporters around the country. It is now possible for a reporter based in Seattle, for example, to read what the Arkansas papers have to say about Clinton's record -- in some cases even before those papers are on the newsstands." That was back in 1992, when the new media I had in mind was the American Political Network's Campaign Hotline, an e-mailed digest that is to the internet what the Stanley Steamer is to a Toyota Prius!

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Media of Message?

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I agree with the importance to Obama's election of the "new media" but it seems to me that, however it is delivered, it is the message itself that determines whether or not any media is effective in delivering it. If a candidate knows what it is he wants to do, what he believes is best for the country, then the message can be shaped to any media. But if the message itself is not attractive, the media isn't going to save it.

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Obama's Victory: New Media or New Vision?

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Greg Mitchell and David Shorr have each made interesting points about the "new media". I am at a huge disadvantage as an economist, since I don't know much about political science and even less about electoral politics. I will admit that I was not convinced that Candidate Obama had much of a chance until fairly late in the campaign. That is when I began to see Obama signs on many of the lawns in my mostly white and working class neighborhood in mostly Republican Kansas. I was finally moved even beyond the audacity of hope on a boyscouting trip to the Ozarks, where I found the number of Obama signs lagging only slightly the number of McCain signs. I don't think these are the outposts of the new media.

My reading of this was, and remains, an intense dissatisfaction with the favor-the-rich, fuel-the-fear policies of the previous administration(s). I cannot recall campaign signs in neighborhoods such as mine in previous elections. Beyond the dissatisfaction was a palpable sentiment of hope. Greg did downplay the role of the economy in the election, and to some degree I concur: most people had no idea how bad things would get, and how quickly they would get bad. Still, most Americans had already had a fairly miserable 8 years of Bushonomics--and even the Clinton rising tide had left behind tens of millions. Many of them finally found a reason to vote. I recall that local activists had predicted a surge of votes by the discontented in the previous election--but Kerry simply could not move them. Obama did, and continues to do so.

Rotwang Ruminates (1)

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Because writing full posts is tedious.

rotwang.jpgI'd be willing to serve in the Obama Administration, but unfortunately I've paid all my taxes.

I would be delighted to offer my services to anyone striving to reduce their income to $249,999. It is not too complicated. Step one. Calculate your income. Step two. Subtract $249,999. Step three. Send me the difference. I will send you an invoice for consulting services. Your payment will be deductible as a Schedule C business expense, and you will be safe from Obamian Socialism. Cash only, no checks please. You're welcome!

How to kill a zombie: shoot it in the head. How to kill a zombie bank . . .

The most important new tradition of the Internets is Sockington on twitter.com.

If we are known by our enemies, Rush Limbaugh assures the political future of the Obama Administration.

Even I find Keith Olbermann overwrought. But Rachel Maddow is brilliant.

Should we start a pool on how long Michael Steele will be RNC head?

Jonathan Chait And The Usual (Neocon) Suspects On Freeman -- And Hill Suspects Too

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Hey, neocons, you lost. President Obama ignored you and appointed Chas Freeman anyway. Elliot Abrams' "back channel" is gone forever. Doug Feith is probably en route to The Hague.

Get over it.

But you you can't get over it, because you are not used to to losing (unlike my friends in the pro-Israel, pro-peace camp. We can't imagine winning).

Now Jonathan Chait of the New Republic is an interesting case. He's liberal on every single issue but Israel (on which he is pure neocon), not only liberal but brilliant. But when it comes to Israel, he just can't get beyond the ethnic pull. Even worse, he does not understand that his ethnic blinders (and that is all they are) have led him to support an approach to Israel that, if it succeeds, will destroy it.

He also seems not to be aware that his inability to stifle his views on the Middle East (about which he has no expertise) is leading people to question his judgment about the issues on which he does. That is because in 2009, in Obama's America, it is harder and harder to take seriously those who approach issues ethnically. It's antediluvian. And thank God.

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Counter-Revolutionary Fervor

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This is David Brooks we're talking about, howling today that the Obama budget offers

evidence of a party swept up in its own revolutionary fervor-- caught up in the self-flattering belief that history has called upon it to solve all problems at once.

Brooks is snorting the frequently foresightful Edmund Burke who summoned the greatest arguments against the French Revolution--though not so much the Burke who sympathized with the American revolutionaries and the Indian victims of Empire. There was a lot to be said for the late 18th century, but even its smartest conservatives did not yet have an income tax they might have evaluated as a tradition worth conserving.

Obama's agenda, he thunders,

is unexceptional in its parts but...when taken as a whole, represents a social-engineering experiment that is entirely new.

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Our Guide-Rush Limbaugh

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The literal translation of "Fuhrer" is "guide" and the Conservative's Guide, Rush Limbaugh, applied his iron handed discipline to yet another wayward Republican. In January it was Georgia's weasel, Rep. Phil Gingrey. Now the new RNC Chairman is forced into the Limbaugh Bootlicking routine.

The new chairman of the Republican National Committee, Michael Steele, apologized to Rush Limbaugh on Monday after describing him in a television interview over the weekend as an "entertainer" who made incendiary and sometimes ugly remarks, party officials said.

I know many of you, like Steele before his forced "reeducation", think that Limbaugh is merely an entertainer. But I think he is more dangerous than that--a demagogue of the kind that H.L. Menken defined as "one who will preach doctrines he knows to be untrue to men he knows to be idiots."

Like all demagogues, there could come a point in the next few years, if unemployment had climbed to 12%, when Rush's search for scapegoats to satisfy the bloodlust of his unemployed brownshirt dittoheads could be truly dangerous. Until then, he is just the Fuhrer--the guide--and Republican politicians ignore his guidance at their peril.

The Media Are The Message?

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Why Obama Won author Greg Mitchell has put a strong and clear claim on the table regarding the role of new media technologies in the Obama campaign, its victory, and the rewriting of the rules for how to run for president. I think Greg is right that these technologies were a key to the victory, but because of doubts about the relative weight of this factor, I want to raise some questions.

With apologies to Marshall McLuhan, some of my questions ask whether embracing new media required some other key decisions as a logical extension, or whether those were separate choices. For instance, one trade-off for a campaign that puts a premium on empowerment of supporters and a widespread sense of ownership is diminished control. Which comes first, adoption of social networking modes of operation, or the desire to base your campaign on cultivating the maximal involvement of every supporter? When President Obama spoke to voters in terms of the challenges we all share as a nation, to what extent was that shaped by the new media environment, or vice versa? How about the "no drama" teamwork ethic that came down from the top of the organization? Perhaps these are all bound up with each other, but if so, shouldn't we be talking about them as pieces of a larger whole, rather than as technologically driven (even using the wider sense of technique)?

And then what about the "post-politics" aspect of the campaign? Maybe it's because I'm also a pointy-headed (not to mention large-eared) 47-year-old, but I place a lot of stock in the generational element. I think the do-whatever-works pragmatism and the baby-boomer-fights-over-the-60s-have-nothing-to-do-with-me rejection of stale debates were significant, and I'm not sure if they're inextricably bound with the new media.

Bob Herbert on Afghanistan: "War, What's It Good For?"

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Bob Herbert, the great New York Times columnist, issues a warning today. He writes that if Obama ramps up the war in Afghanistan, his Presidency could end up like that of our last liberal President, Lyndon Johnson.

"Much of the country can work itself up to a high pitch of outrage because a banker or an automobile executive flies on a private jet. But we'll send young men and women by the thousands off to repeated excursions through the hell of combat -- three tours, four tours or more -- without raising so much as a peep of protest.

"Lyndon Johnson, despite a booming economy, lost his Great Society to the Vietnam War. He knew what he was risking. He would later tell Doris Kearns Goodwin, 'If I left the woman I really loved -- the Great Society -- in order to get involved with that bitch of a war on the other side of the world, then I would lose everything at home. All my programs... All my dreams...'

"The United States is on its knees economically. As President Obama fights for his myriad domestic programs and his dream of an economic recovery, he might benefit from a look over his shoulder at the link between Vietnam and the still-smoldering ruins of Johnson's presidency."

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CUBA: Big Changes in Castro's Guard

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Something big is up in Havana. So big that some are saying that Fidel Castro has finally moved on to the next world -- though I don't believe this to be the case.

Others are saying that they saw Fidel out in public today on an odd shuffling, walk about, flanked by well armed security guards -- and a trailing Mercedes.

What has happened is that Raul Castro, now President of Cuba, has sacked his brother's closest followers and advisers in government.

Both Vice President Carlos Lage and Foreign Minister Felipe Perez Roque have been given pink slips. These were Fidel's most obvious heir apparents and his chief ideological spear carriers in the next generation of Cuban political leadership.

This is one of those historical pivot points in normally opaque (often Communist) regimes that will be remembered for generations.

Raul Castro seems fully in control now -- and he's done with ideology.

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Neocon Peretz: Starve Gazan Kids Faster

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I can't help myself. I can't stop writing about the neocons because even as they melt into stinking wax -- like the wicked witch of the west (or was it east?) -- they still are such wonderful targets for ridicule.

Here Martin Peretz, former owner of the New Republic (and former oldest TA in Harvard's 350 year history) ridicules the Secretary of State over her concern for the kids of Gaza. Former (pre-Madoff) multi-millionaire Peretz thinks it is just outrageous that Hillary Clinton is upset about the Palestinian kids who are going hungry thanks to the Israeli blockade of Gaza. (Details on items Israel won't let in).

He writes: "Gilad Schalit is still in captivity after 32 months since his kidnapping. Hamas has been playing mickey mouse with this man's life for all that time. You want to put real pressure on the mad Sunni warriors of the Muslim god? Then put real pressure on them. Let the Israelis demonstrate that no spaghetti (a demand from Gaza, instead of rice) and no boards and nails enter Gaza until this hostage is freed."

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What President Obama Can Really Learn from the New Deal - and from FDR

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Over the past few weeks and months a great deal has been said and written about what lessons President Obama might draw from the New Deal. Some conservatives, like Senate Minority Leader Mitch McConnell and Congressman Roy Blunt, have forcefully argued that there are not any lessons - as the New Deal not only failed to stop the Great Depression but actually made it worse.

As Governor Jindal underscored on Tuesday in his response to the President's address, the GOP is relishing its role as the party of "no." Lacking any realistic policy solutions for how to boost our country's economy, conservatives have resorted to a chorus of incessant naysaying - just as they did in FDR's time. McConnell and Blunt's argument is not much different than the arguments that were thrown at FDR as he grappled with the worst economic crisis in our history. It is based on the specious notion that individual initiative and market forces are far superior to public initiatives in meeting the needs of those who find themselves in crisis when the market fails to deliver the basic necessities of life. In recent times the arguments of these modern anti-New Dealers have been amplified through a series of historical distortions in a renewed effort to discredit not just the New Deal--but government itself.

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New Media, the 2008 Campaign, and the Future

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Hello readers, and thanks to all for participating in this weeklong discussion on the 2008 race for the White House - and what it means for the future of politics and political campaigns in America.

My new book, Why Obama Won, is my third on historic campaigns. A few years ago I wrote books for Random House on Upton Sinclair's "EPIC" campaign for governor of California in 1934 (most of the modern political media/ad techniques were born during that race) and the Nixon-Douglas 1950 U.S. Senate contest. The new book chronicles the entire 2008 campaign, with all of the controversies and key characters, from Jeremiah the Preacher to Joe the Plumber.

So let's talk about why Obama won - particularly new media vs. old media -- and the lessons for the future.

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Campaign 2.008

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This week at book club, Greg Mitchell editor of Editor & Publisher and author of So Wrong for So Long joins us for a discussion of his latest, Why Obama Won: The Making of a President 2008.

As he remarks in his opening post (up shortly):

But more than anything the book explores the profound influence of what we'll call, in shorthand, "new media" in propelling Obama to victory. Obama, with the help of an unprecedented grassroots funding and organizing effort, battled the Clinton machine to a standstill, then knocked out McCain a few months later. This was the first national campaign profoundly shaped -- even, at times, dominated -- by the new media, from viral videos and blog rumors that went "mainstream" to startling online fundraising techniques.

You might call it Campaign 2.008.

Joining him are Randall Wray, economics professor at the University of Missouri-Kansas City; David Shorr, expert in national security strategy and the US role in the world at the Stanley Foundation; Michael Cohen, Senior Research Fellow at the New America Foundation; Nick Katzenbach, Attorney General under President Lyndon Johnson; and D.D. Guttenplan, writer for The Nation. Come by and weigh in.

The Santelli Screed Hits Wrong Target on Mortgage Bailout

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Commodity trader Rick Santelli made himself into a national hero of sorts with his televised diatribe about being forced to pay the mortgages of "losers" who could not afford, or would not pay, the full cost of their mortgage. Santelli apparently hit a chord among those who want to blame deadbeat homeowners for the country's economic woes.

At the risk of spoiling a promising artistic and commercial venture, people should know that Mr. Santelli is firing at the wrong target. The big gainers from the latest plan to help homeowners are not "loser" homeowners, but rather banks and investors, who will earn far more on their loser loans than would otherwise have been possible.

This is easy to see if we just adhere to the most basic rule in policy analysis: follow the money. When we follow the money, we see that the government checks do not go to homeowners.

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Tim Geithner, Wake Up

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In the month of January as stocks continued to fall, a smart investor could make some money in the bond market. But in February, even bonds began to falter and as Warren Buffet remarked over the weekend, Treasuries may be the new bubble. So for the last 10 days the short term traders have been staging bear raids on the financials--savage capital's last easy money route.

So I am totally dumfounded that Geithner and Summers haven't seized on three things they could do today, that wouldn't cost them a dime to shore up the system and kick all the naked short sellers in the nuts.


  1. Suspend Mark to Market

  2. Restore the "uptick" rule -You can only short on an uptick in the stock.

  3. Ban Naked short selling


Anyone who believes that the billions of capital, being deployed in shorting the bank stocks, is all part of an orderly market of buyers and sellers being guided by an "invisible hand", probably also believes in Santa Claus and the Tooth Fairy.

Fear, Independence, and a Strong Cup of Coffee

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This is a quick post to thank TPMCafe and my fellow panelists here for this fascinating discussion of my book Demagogue: The Fight to Save Democracy from Its Worst Enemies. It's really interesting that so much discussion landed on the idea of fear, and whether another kind of threat looms aside from what Heather called the "specific, classic form of demagoguery that Mike so elegantly traces" (thanks).

Heather, Brian, and Matt have focused, in their own ways, on a quieter, more under-the-radar, even more insidious kind of danger -- whether the fear that plays through our hearts in today's disturbing economic time or the complacency of those who casually watched as George W. Bush arrogated to himself so many extraconstitutional powers. I draw the distinction in the book between "hard" and "soft" demagoguery, borrowing from the political scientist James Ceaser at the University of Virginia, and I think the distinction has something to say to us here. I write in the book:

"Hard" demagogues actively stir the passions through antagonism and division. "Soft" demagogues, on the other hand, employ flattery, currying favor through impossible promises.16 In both cases, demagogues connect with large groups of ordinary people. And in either instance, they often earn the reputation of a villain, which they usually deserve.

This discussion brings me to a usually ignored passage from de Tocqueville's Democracy in America. De Tocqueville is one of the heroes of the book, and at the end of his vast and bizarrely prescient tome on American democracy he includes a haunting few paragraphs about the dangers not of demagogues -- the "specific, classic" danger I focus on in Demagogue -- but of something very different: complacency among a democratic people.

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Green Way Out

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One way to look at the international situation right now is that we're suffering from a global paradox of thrift: around the world, desired saving exceeds the amount businesses are willing to invest. And the result is a global slump that leaves everyone worse off.

So that's how we got into this mess. And we're still looking for the way out.

This above from Paul Krugman today. Of course, he's right. And one critical way out is to channel the savings into green energy investing. This direction is taken by the following sequence of actions:
First, compel demand to be created by passing national renewable electricity standards that require every utility (the monopoly distributors of electricity to consumers) to purchase clean energy -- these standards should be high and (most important) steadily rising year over year, so that the demand is predictable for years to come.
Second, create a "good bank" or federal green energy lending facility that will create a marketable debt security with very low interest which will have two beneficial effects: (1) create the possibility of sound revenue for those who trade it, especially banks, and (2) provide green energy generators and distributors a way to fund the great overbuild of clean for carbon in a way that does not impose unwarranted costs on the whole economy.
Third, use this new good green bank to complement the excellent and visionary initiatives already in the stimulus legislation and to support and underscore the importance of putting a price on carbon, as will be done under the cap and trade program in the President's budget.

Gaza: It's Time To End the Blockade In Exchange For An End To The Kassams PLUS Steve Rosen Gets A Job

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It has become more and more obvious that the Gaza war made no sense. Hamas,keeps firing Kassams. One hit a schoolyard on Saturday. On any other day hundreds of kids would have been out there playing.

And, of course, the war itself took 1200 lives, 400 children. Olmert said that his response to the Kassams would be disproportionate and he kept his word. It was.

All those dead (mostly innocent) and the Kassams keep coming.

On the diplomatic front Hamas is in better shape than ever. Tony Blair was in Gaza today for the first time. John Kerry, Keith Ellison, and Brian Baird were all there last week.

I would be very surprised if the Obama administration does not open some kind of dialogue with Hamas soon, if it hasn't already. And I am certain it is pushing for a Fatah/Hamas unity arrangement.

If Israel's intent was to eradicate Hamas, the war failed miserably.

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The Battles to Save the Climate and the Economy

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The twin tasks of government in every country are not ideological but scientific and economic: how can societies solve the problem of collective action in order to replant their energy production from carbon to non-carbon platforms and how can these same societies stop destroying wealth and income and begin increasing at least income for all their members.

President Obama's remarkable and very sudden accomplishments lay out a theory of the case. He has combined the two problems and launched wholistic solutions.

In the stimulus legislation he created more means to encourage alternative energy legislation than all previous presidents combined. These techniques include guaranteed loans for all sizes and types of alternative energy

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Amazing Video: American Officer In Iraq Spews Filth At Iraqi Police Under His Command

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Colonialism isn't new but youtube is.

So now we can see how westerners (not all, put plenty) talk to people they dominate, even those on our side.

I doubt Americans are the worst either. The Brits,, French, Israelis, Germans, Belgians, Dutch, etc, all behave (d) this way.

But it sure makes you cringe. And we wonder: why do they hate us?

Dying Conservative Intellect

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I was of course, presumptuous in declaring the "Death of Conservatism", but to watch a movement fall apart intellectually and emotionally is like been an observer of a car crash. There is nothing you can do to stop it. All you can do is pray no one gets killed. So here are the latest party identification stats and for Republicans and conservatives, it's not a pretty picture, especially among women and the young.

connelly-grfk-650

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