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Week of June 21, 2009 - June 27, 2009

Presence Of Justice - The Sequel

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I noted back in March that Israel's High Court of Justice has been the only firewall Israel has against encroachments on civil liberties; that defenders of human rights have relied, in effect, on a self-perpetuating community of liberal-democratic jurists, enjoying (by means of law and precedent) the ability to remain self-perpetuating. (Former Justice Aharon Barak gave voice to the unique status of the court rather poignantly a couple of days ago, when he argued that Israel must be, after all, "a state of its citizens," code for the equality of Arab citizens--which caused a storm of criticism.)

Two votes in the Likud-controlled Knesset this past couple of weeks will almost certainly end this run of liberal-democratic jurists. Think of it as a quiet coup by the Judeans. The first is the appointment of Uri Ariel of the Kahanist National Union to the Judicial Appointments Committee. "As of today," writes Haaretz's Yossi Verter, "the committee has a bloc of four rightist and radical-right politicians, including Environmental Protection Minister Gilad Erdan (Likud) and Justice Minister Yaakov Neeman. All they need is a fifth member, probably one of the Israel Bar Association's two representatives, and they will have a majority on the committee and be able to do as they please. The three Supreme Court justices on the panel will become a negligible minority."

The second vote is an amendment that will require a majority of seven out of nine members of the Judicial Appointments Committee. If the amendment becomes law, which it almost certainly will, the government will have, in effect, a veto over appointments to Israel's highest court, "the most significant change," says the Israel Policy Center, "in the balance of power between the branches of Israel's government since the current system of judicial appointments was put in place in 1953."

Court Strips Ruth Madoff of Everything....Except $2.5 Million To Survive

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From Reuters today: "NEW YORK (Reuters) - Ruth Madoff, the wife of epic swindler Bernard Madoff who reaped billions and a lavish family lifestyle, will be left with $2.5 million and have to look for a new home as she forfeits claim to some $80 million in assets."

I read this item after coming in from a walk. Five houses away from my house, there is a sign in front of the nicest house on the street. "FOR SALE BY THE BANK."

I live in Chevy Chase, Maryland and, no surprise, I don't see many of these.

As for this house, it was pretty gorgeous. It was owned by a very old couple who kept the house immaculate. We didn't know them but saw them around. And we knew their name because it was affixed to the house on a beautiful mosaic sign. They obviously were proud people.

Now they are in foreclosure. The spot where their name was is mangy looking and, believe it or not, the house is already looking shaggy.

So what happened?

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If Ever There Were a Time for Creative Nonviolence

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Nico Pitney, who's been splendidly liveblogging Iran news, links to an important AP dispatch by Sebastian Abbot and Katarina Kratovac, concerning extensive downloading of the nonviolent systematizer Gene Sharp's manual, "From Dictatorship to Democracy: A Conceptual Framework," in Farsi translation. "The more [Iranian rebels] learn that there is a nonviolent alternative to both violence and passive submission, the more chances they are to take a wise course of action rather than a stupid one," Sharp told the reporters.

I read Sharp's manual after a visit to Belgrade, commemorating the student movement against Milosevic, a couple of years ago. It's extraordinarily sophisticated and methodical. It seems to have played a part in the so-called Color Revolutions in Ukraine and Georgia. Which is not to say one size fits all colors. One of Sharp's leading advocates, Srdja Popovic, one of the Serb nonviolent leaders, now in charge of the Center for Applied Nonviolent Action and Strategies, or Canvas, cautions: "You can't export nonviolent struggles against non-democratic regimes. Cultural and situational environments are too different. But the principles are the same."

Canvas, and Otpor, the student movement that preceded it, have been tellingly criticized for failing to address Serb war crimes during the fight against Milosevic. I respect the criticism. I'm no expert. Nonviolent movements, like others, have their limits. The Iranian regime is far more brutal than anything encountered in Georgia or Ukraine. But I find it stirring that a sort of Nonviolent International is stirring into existence.

It Couldn't Happen Here... Could It?

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On a quiet street in Tehran one night last week, the Iranian-American writer Cameron Abadi was stopped by a teenaged Basij militia member. The youth, still growing his first beard but armed and quite full of himself, demanded in rough provincial dialect that Abadi exhale enough to show if he'd been drinking.

Abadi, clean, was told to move on. But if the boy had had the wit to ply him with some questions, he might then have cried, "Take him in!" and doomed this New York-born-and-bred Yale graduate. Unbeknownst to Abadi, a colleague from a website he was writing for had just been arrested at the airport trying to leave. Abadi, lucky a second time two days ago, got a Turkish Airlines flight via Istanbul to Dusseldorf, where he caught a train to Berlin.

Even when the regime let the streets fill with peaceful citizens by day, it sowed the menace Abadi faced by night. Iranians were shocked because Tehran has so little street crime -- and so few cops -- that people walk at all hours without looking over their shoulders. It's a bit like New York City 70 years ago, when the novelist Howard Fast and his girlfriend slept in Central Park on hot summer nights to escape moral strictures as stifling as their airless apartments. They feared not muggers but an occasional police officer.

In Tehran now, too, the only public menace is the state. But the Iranian state teaches oppressed, angry boys to cling to guns and God -- both dispensed by the state itself, including by that senior boy and ex-traffic engineer, Mahmoud Ahmadenijad. Yet some U.S. neocons and lefties seem to like having him around.

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More about Amitai Etzioni??

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I'm blown away by the fact that scores of people took the time to comment on the "silliness of Amitai Etzioni" here. In Iran they are shooting protestors; in Iraq people are killing each other because they hold different interpretations of Islam; in many countries millions of people are thrown out of their jobs and homes--and you want to waste your key strokes on me? I mean not my ideas, they may deserve to be taken apart, but on my persona? How trivial can you get?

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Obama and Bibi: So Far, So Good ++ Mondoweiss On Israel's Disdain (Left and Right) For Obama

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There is considerable discussion in Washington about whether President Obama is maintaining or easing the pressure on Prime Minister Netanyahu. There is no real evidence pointing to the latter other than the silence from the administration on the just-announced plan to expand the Talmon settlement by some 300 units, a provocation and a test of Obama's resolve. Beyond that is the general fear that the Israeli government has invariably won these battles with previous administrations and the feeling that Obama will, like his predecessors, blink as the lobby quietly (or loudly) pushes back.

Only time will tell whether Obama will choose to prevail; I say "choose" because he holds all the cards in the U.S.-Israel relationship. If he wants an end to settlements, he can make it happen. Beyond that is the simple fact that the largest foreign policy challenge he faces, Iran, is directly linked to Israel-Palestine. Although the usual suspects say that the Iran crisis is a reason to turn away from pressuring Israel over settlements, more fair-minded observers take the opposite approach.

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State Of The Jewish People? Yes and No.

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The demand that Palestinians recognize Israel as "the state of the Jewish people" has at least three layers to it: The first is symbolic, without practical significance, and understandable. The second is partly symbolic, is meant to have future practical significance, and is contentious (though resolvable). The third, however, is legal, has great practical significance, and is, for any Palestinian (or democrat, for that matter), unacceptable. It is time to stop working through symbols and start saying what we mean.

1. Israel is obviously the state of the Jewish people in the sense that vanguard Jewish groups in Eastern Europe dreamed a Hebrew revolution, which launched the Zionist colonial project, which engendered a Jewish national home in Mandate Palestine, which earned international backing to organize a state after the Holocaust--a state that became a place of refuge for Jews from Europe and Arab countries--that is, a state with a large Jewish majority whose binding tie (to bring things back to Zionism's DNA) is the spoken Hebrew language.

When Palestinians say they recognize "Israel," they are implicitly recognizing this reality; they are acknowledging, to paraphrase Irving Howe, the name of our desire. At the most visceral level, when Israelis insist Israel be recognized as Jewish, they mean they want this narrative recognized, the same way they implicitly acknowledge the peculiar formative sufferings of Palestinians at the hands of Zionism when they say "Palestinians" and mean "not Jordanians or southern Syrians." When Palestinian spokespeople speak to Israeli reporters in Hebrew, they are recognizing Israel in the most poignant possible way.

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Meet the 'settlers' lawyer' - Elliott Abrams

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Elliott Abrams has an oped in today's Wall Street Journal trying to defend Ariel Sharon's legacy, and evidently further ruin the Bush administration's. In his article, "Hillary Is Wrong About the Settlements," he attempts to show that there was a clear understanding between the US and Israel on continuing the "natural growth" of illegal Israeli settlements in the West Bank. Lara Friedman has posted a take down of Abrams on the Peace Now blog, including this great intro:

On May 23, 2005, the Washington Post ran a an incisive op-ed by former State Department negotiator and Middle East advisor Aaron Miller, entitled "Israel's Lawyer," in which Aaron argued "For far too long, many American officials involved in Arab-Israeli peacemaking, myself included, have acted as Israel's attorney..." I was reminded of that article when I read today's piece by Elliott Abrams in the Wall Street Journal, which should, I believe, have been entitled "The West Bank Settlers' Lawyer."

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"What Can I Do?"

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Someone recently approached me at the cheese counter of a local supermarket, asking "what can I do?" At first I thought the person was seeking advice about a choice of cheese. But I soon realized the question was larger than that. It was: what can I do about the way things are going in Washington?

People who voted for Barack Obama tend to fall into one of two camps: Trusters, who believe he's a good man with the right values and he's doing everything he can; and cynics, who have become disillusioned with his bailouts of Wall Street, flimsy proposals for taming the Street, willingness to give away 85 percent of cap-and-trade pollution permits, seeming reversals on eavesdropping and torture, and squishiness on a public option for health care.

In my view, both positions are wrong. A new president -- even one as talented and well-motivated as Obama -- can't get a thing done in Washington unless the public is actively behind him. As FDR said in the reelection campaign of 1936 when a lady insisted that if she were to vote for him he must commit to a long list of objectives, "Maam, I want to do those things, but you must make me."

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Obama Needs To Own Up To Being A Smoker

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I know this is not the most important issue in the world but keeping our President's poll numbers up is very important. That is why I think we need to turn the issue of his smoking into a net plus.

It's clear that President Obama does not like to be reminded that he is a struggling smoker. (I know this from personal experience).

It's obvious why. His inability to quit could be considered a chink in his armor. The world's most self-disciplined man can't lick the evil weed.

But this character defect -- such as it is --- is a political plus. No, Americans don't want their Presidents to smoke (bad example, etc).

But they do want to view their President as human. And Obama fails in that department. The guy is perfect or damn close to it.

He is brilliant, handsome, athletic, disciplined -- too wonderful in every way to be perceived as one of us in a country in which almost everyone is struggling to overcome something. Most Americans are not terribly happy with who they are and how they behave and could start resenting a President who clearly is.

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US, Syria, Iran, Hamas

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The Obama administration has decided to return a US ambassador to Syria, the WaPo's Scott Wilson reports today. This is a long overdue move-- see below. However, the timing of the announcement does seem to link it to the ongoing turmoil inside the Iranian regime.

The always very well informed David Ignatius, writing (also in today's WaPo) about US policy responses to the developments in Iran, says,

As the mullahs' grip on power weakens, there are new opportunities to peel away some of their allies. The United States is moving quickly to normalize relations with Syria, and there's talk of working with the Saudis to draw elements of the radical Palestinian group Hamas away from its Iranian patrons, toward a coalition government that would be prepared to negotiate with Israel. Observes a White House official: "Iran's allies in the region have to be wondering, 'Why should we hitch our wagon to their starship?' "

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Remember when mortgage lenders were gatekeepers?

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I had a very weird initial experience with Busted: When I got the galley a couple of months ago, I for some reason started reading in the middle. Before long I was sincerely puzzled: Did the New York Times really pay so poorly that Ed and his also-gainfully-employed wife couldn't make the mortgage payments on a $450,000 house? Then I leafed back a few chapters and saw the reasons: divorce, alimony, child support.

This time around I started at the beginning, but was soon confronted with Ed's decision to volunteer for duty in the Times's Baghdad bureau and its dire consequences for his first marriage. If I tried something like that without months and months and months of spousal consultation, banishment to the basement would be about the mildest punishment I might expect. (And I live in a Manhattan apartment building, where moving to the basement means moving in with the super.)

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Settlements: The Myth of Natural Growth PLUS Video Showing Palestinians Are Lost Tribe Of Israel

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Moshe Yaroni is doing the best writing I've seen lately on President Obama's call for a settlement freeze.

In this piece in Jewcy, Dr. Yaroni debunks the whole natural increase myth (the argument that a settlement freeze will prevent settler families from having kids) and explains why a freeze is worth the political capital it will cost Obama to achieve it.

It is worth a read. Obama is under pressure from the Likudniks in Israel and the neocons here. Here are the facts.

And here is an amazing video from Israel that shows that Palestinians are Jews who stayed put when the other Jews went into diaspora. It is definitely worth watching especially for those who might doubt how utterly absurd the Israeli-Palestinian conflict. (Note: the film can easily be used by those who argue that all of Israel-Palestine should be one state. But whose?)

Iranian 'intifada' is celebrated in the US, while Palestinians are still ignored

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Note that the heroic Iranian woman on the CNN page is about to throw a stone. Have you ever seen coverage of a Palestinian throwing a stone during a protest highlighted so prominently and positively?

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Reconstructing Afghanistan?

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In the year I spent in the White House, I kept being surprised by government agencies that simply ignored the president's instructions and directives. In some cases, the political heads of the agencies were more liberal than the president and had their own political agendas; in others, the civil servants just refused to play ball. (Dealing with high levels of inflation I suggested that the government issue some gold-based bonds, which I hoped would demand a much lower interest rate and hence reduce the costs to the public. The president sent me across the street to the Treasury to discuss the matter with the civil servant in charge of the issuance of bonds. The guy in charge said that he did not consider this a sound idea. When pushed, he responded: "you and your president will soon be out of here. I have seen four come and go. And--I will still be here." My little idea was never tested.)

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Inflation is Not the Problem

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foreclosure-v-sales-brHere is a scary chart. A second wave of foreclosures in California seems to be growing monthly. More disturbing is that twice the number of homes sold each month are coming back on the market through foreclosure. With this kind of supply- demand imbalance anyone who thinks that prices will stabilize soon is smoking something from Humboldt County.

And as for the inflation hawks on Wall Street, what are they snorting?

Reading White House Tea Leaves on Iran Getting Difficult

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Yesterday evening, I chaired a dinner featuring Austan Goolsbee, the charismatic economic guru of Barack Obama's presidential campaign and a key adviser to the President in the White House. The meeting was off the record -- fascinating and insightful, but off the record. Just keep in mind that there are 6-8 million vacant homes out there. Not good.

What wasn't off the record at the dinner was my conversation with Wall Street Journal White House correspondent Jonathan Weisman who, like me, has been frustrated with senior White House officials apparently sending inconsistent messages about some important policy questions.

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Wash Post: Recognizing Israel "As A Jewish State" Is A Brand New Israeli Demand

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Here is some good reporting on Prime Minuster Netanyahu's demand that Israel be recognized as a Jewish state.

It is, as I've written all along, a new demand designed only to torpedo negotiations.

From the fine piece by Howard Schneider.

"It has never been an Israeli demand," said Ron Pundak, a member of Israel's negotiating team in Norway and now director of the Peres Center for Peace in Tel Aviv. "When we negotiated Oslo, the issue of the characteristics of our state was never an issue."

Robust Health Care Reform is the Moment of Truth for Obama and the Democrats

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Fellow Americans, and fellow Democrats and Obama supporters, we are at a moment of truth, a pivotal turning point -- in the form of what happens in the next days and weeks with robust, universal health reform. A fork in the road socially, economically -- and politically. It could go either way depending on Obama and the Democratic officeholders many of us worked so hard to elect. They have the power to act, but will they use it -- or lose it?

If at this remarkable juncture Obama and the Democrats cannot enact a robust health care reform -- with a strong nationwide public option, cost controls, and nearly universal coverage -- I would not want to be in charge of fundraising and mobilization for them in the 2010 and 2012 elections! Most of us who supported them last time will of course not vote for a Republican.. But if Obama and the Democrats cannot act now on a once in a half century challenge and opportunity, they are not worthy of extra energy. And those of us who wrote big checks last time will tell the Democrats -- especially in the Senate -- to hold pharmaceutical fundraisers instead.

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Exotic Argentine Open Thread

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South Carolina guv Mark Sanford has resurfaced. Getting off a plane in Atlanta on his way back from Bueno Aires this morning he declared that he went because he "wanted to do something exotic."

No one here at TPM has ever been to Argentina, so maybe you can help us out. Any guesses as to Sanford's exotic exploits? Searching for Obama's birth certificate? Hunting Nazi war criminals? I'll leave it to you.

Ehud Barak and the ghost of Labour past

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Ehud Barak, who in 1999 was briefly the "peace candidate" for PM before he became the peace movement's executioner in December 2000 and then went on to design and unleash Israel's most recent assault against Gaza, has been at it again.

Today's Haaretz tells us that Barak

has authorized the building of 300 new homes in the West Bank, defying U.S. calls for a halt to settlement growth.

What a sad, sad guy.

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Why the Critics of a Public Option for Health Care Are Wrong

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Without a public option, the other parties that comprise America's non-system of health care -- private insurers, doctors, hospitals, drug companies, and medical suppliers -- have little or no incentive to supply high-quality care at a lower cost than they do now.

Which is precisely why the public option has become such a lightening rod. The American Medical Association is dead-set against it, Big Pharma rejects it out of hand, and the biggest insurance companies won't consider it. No other issue in the current health-care debate is as fiercely opposed by the medical establishment and their lobbies now swarming over Capitol Hill. Of course, they don't want it. A public option would squeeze their profits and force them to undertake major reforms. That's the whole point.

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Netanyahu Believes Obama Has Already Backed Down On Settlements

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Prime Minister Binyamin Netanyahu believes that President Obama has already blinked. The way he sees it, Obama made his demand to stop settlements in Cairo. He, Netanyahu, responded with a firm "no" -- but by uttering the phrase "two states" changed the subject suficiently to get Obama off his back. He also thinks the Iran crisis has diverted Obama's focus away from the Israeli-Palestinian conflict and saved him from further pressure.

There is no other way to interpret Netanyahu's dismissal of the settlement issue in his interview with RAI TV in Italy. Settlements? "I think that the more we spend time arguing about this, the more we waste time instead of moving towards peace," he said.

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Plus, he cooks daal and reads Urdu poetry?

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Is our president a phenomenal mutli-culturalist or what?? Not only he has Kenyan relatives, grew up in gloriously multi-culti Hawaii, went to school in Indonesia and speaks some Bahasa Indonesia, can do Hawaiian hand gestures and African-American hand jives with equal ease, has studied and taught in the arcane language of the law, writes graceful and revealing English prose, etc etc....

But now we learn he also reads Urdu poetry and can cook some Pakistani dishes? Who knew?

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Obama vs. Gelb = democracy vs. covert war

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In a piece in the forthcoming New York Review of Books, David Bromwich creatively opposes the post-colonial credo of Obama in his Cairo speech to a book by Leslie Gelb of the Council of Foreign Relations, which mingles the best-and-the-brightest and Machiavelli. Excerpts:

Obama spoke at the end about the general good of democracy: his predecessor's favorite and almost his only theme. Advocates of democracy ought to maintain their support for freedom even when they gain power. As for religious freedom, its sincerity is not measured by a rejection of other people's faith. And women's rights are not to be confused with the approval or discountenancing of an orthodox custom...

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I Tried to Warn Ed

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Actually I did. Ed didn't tell me that he was thinking of taking out an Alt-A loan, but I did try to warn Ed and everyone else in sight about the housing bubble. We even ran an essay contest offering $1,000 for the best essay arguing that there was no housing bubble which got written up in Ed's newspaper (twice). Needless to say, Ed didn't listen, but more importantly Alan Greenspan and the other great minds in the economics profession didn't listen.

Ed will have to deal with his loan officer, but what about all the other folks who somehow could not see an $8 trillion housing bubble expanding in front of their face? What sort of economic system do we have when you can drive your bank into the ground peddling these garbage loans and still have a job the next day?

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A Behind the Scenes Look at People Against Health Care Reform

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Check out this video about HAARM Healthy Americans Against Reforming Medicine, featuring stars like Glenn Beck, Rick Scott and Zach Wamp. The video is the love child of SEIU and Living Liberally. I wrote this one, so I like to think of myself as the DNA. Or RNA.

Liveblogging Obama's Press Conference (Iran only)

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Looking strictly at the Iran questions, off the top. (My paraphrases are approximate, the ones in quote marks are better, and all in all this the best I can do.)

About Iran: "Appalled," "outraged." He was careful to respect Iranian sovereignty, but did tack out a very careful answer to a question about the "international community" and engagement: The Iran government should recognize that what it does has consequences for how the international community will deal with it.

Second in line: Nico Pitney (Huffington Post) gets to ask an Internet-fed question from Iran (and Obama knew that he was collecting Iranians' questions: he's well-briefed on the internets): "Under which conditions would you accept the election of Ahmadinejad, and if you did accept it without any conditions, wouldn't that be a betrayal?"

Obama: We didn't have observers. But many Iranians have "significant questions about the legitimacy of the election....Ultimately, the most important thing for the government to consider is its legitimacy in the eyes of its own people. What we can do is to say unequivocally is that there are universal principles and norms....I think it is not too late for the Iranian government to recognize" that there is a good path.

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Jerusalem Post: Americans Cool With Pressuring Israel PLUS Shalit Release Today?

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Check this out. Shmuel Rosner reports on a new poll that shows strong backing here for the President's tough stand on Israel-Palestine. He infers from the poll that Americans favor pressuring Israel. Of course, they do.

The key thing is that the President understand (1) that he holds all the cards in the US-Israel relationship and (2) that unless he starts showing results to fulfill the promise of the Cairo speech, he will be viewed by Israelis and Arabs as all talk.

I am, in fact, sure he knows that. So I expect that he will come down hard against Israel's plans to expand the illegal Har Homa settlement in Jerusalem. The Israelis are testing his resolve by approving another $50 million for Har Homa. The United States needs to speak out in no uncertain terms.

Ha'aretz reports
that captured soldier, Gilad Shalit, may be released today. I sure hope that turns out to be true both for his and his family's sake and also because his release, should it happen, will make it easier to provide needed aid to Gaza and to foster Palestinian unity and Israeli-Palestinian negotiations.

We'll see what happens.

The Housing Boom and Bust

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Thanks for the invitation to discuss Ed Andrews' Busted. By way of introduction, I'm an editor at Newsweek, where I've covered the housing boom and bust, and I wrote a book called House Lust that chronicled the irrational exuberance over real estate during the first half of the decade.

I read Busted a few weeks ago in a single sitting. The author's personal story is really gripping and drives it along. Unlike most of what's been written about the housing meltdown, there's a story to Busted, and I stayed up ridiculously late because I wanted to find out how it ended. While Andrews' disintegrating finances (and, notably, its effect on his new marriage) form the heart of the book, he's filled out the story by exploring the supply chain of his loan. (This is the other two-thirds of the book he mentions in his introduction.) While these sections are less compelling than his personal story, I admired the imaginative way he managed to take what is essentially a really good magazine story (ie the excerpt that ran in the Times Magazine) and fill it out to create a book.

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BREAKING: Prime Minister Gordon Brown to Annouce that 2 Iranian Diplomats to be Expelled

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I have just received word that in a short while, British Prime Minister Gordon Brown will announce that two Iranian diplomats stationed in the Iran Embassy to the United Kingdom will be expelled.

According to a British diplomat with whom I spoke, the UK government regrets this decision but it is the only appropriate response after Iran announced yesterday that it was expelling two British diplomats from Tehran.

The British diplomat expressed "disappointment" in this turn of events and emphasized that the UK wanted "a constructive relationship" with Iran -- and that engagement has been the standing policy of the Prime Minister and of British Foreign Secretary David Miliband.

-- Steve Clemons

David Grossman's Appeal

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The Israeli writer David Grossman's reaction in Ha'aretz last Wednesday to Netanyahu's awful speech has now been translated, if a bit awkwardly. It's drenched in despair. The Israelis, Grossman writes, want to bunker down for the duration, and Bibi obliged their moral cowardice with his own:

If we turn from the skilled orator to his audience, we will see how passionately it barricades itself behind its anxieties, and we will feel the sweet stupor from pulsating nationalism, militarism and victimhood, which were the heartbeat of the entire speech.

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'Busted': It's Not Just About me

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Thank you so much for inviting me to the Cafe. I've had a wild ride over the past month, ever since the New York Times Magazine published an excerpt of Busted, in which I recount my own outrageous nightmare with junk mortgages. This book has been the ultimate hot-and-cold experience. Hundreds of people have written to thank me for laying out my own mistakes, with many expressing relief that they weren't alone and that they didn't feel quite as ashamed of the mistakes they had made. I've never experienced such an outpouring of anguish and sympathy. Most came across as sincere and hardworking family people, not me-too gimmie-gimmies. Most acknowledged they had made mistakes and just wanted to get back to a sound footing -- with or without their houses.

But obviously, I've also been on the target of much righteous wrath and vitriol. I've been called a loser, a liar, a fraud, and an example of what's wrong with America. Among many other epithets. That was to be expected. When you're a lead economics reporter for the Times and you admit to bungling your finances so badly, you waive any claims to mercy. What I didn't expect was to be accused of not falling on my sword enough and for leaving out "crucial'' information about my wife Patty's prior financial problems. This kicked off a mud-storm in the blogosphere, though book reviewers and interviewers have generally viewed it as a sideshow. But it's all fair game, and I invite people to weigh in or ask questions.

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Busted: Life Inside the Great Mortgage Meltdown

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Edmund Andrews, economics reporter for The New York Times, joins us at TPMCafe Book Club this week to discuss his book Busted: Life Inside the Great Mortgage Meltdown.

From Ed's introductory post:

Although the narrative is anchored on my own personal experience, the goal is to explore in intimate detail the broader corruption and cynical recklessness that infected players at each level of the financial food chain. Two-thirds of the book is not about me but about the people who helped deliver all that money to my door: my lenders, the Wall Street guys behind them and the Washington policymakers like Alan Greenspan.

Joining the discussion are Dean Baker, Cafe regular, of the Center for Economic and Policy Research; Justin Fox, TIME's economics and business reporter and author of The Myth of the Rational Market; Daniel Gross, senior editor at Newsweek and author of Dumb Money: How our Greatest Financial Minds Bankrupted the Nation; Daniel McGinn, national correspondent for Newsweek and author of House Lust: America's Obsession With Our Homes; and Nathan Newman, Policy Director for the Progressive Legislative Action Network.

Liars Figure

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On Friday, Ayatollah Khamenei as the NYT says, "mocked the idea that the huge margin attributed to Mr. Ahmadinejad could have been won through fraud."

Yesterday, the spokesman for the Guardian Council admitted to discrepancies in the vote count that "could be over 3 million."

Let's see. Three million votes miscounted--sounds like a lot. But funny thing, it would still leave the claimed election margin at 11 million, and the result unchanged. The spokesman himself made the point that the errors he copped to "would not noticably (sic) affect the outcome of the election."

The new style of lying: Admit to inconsequential error.

Obama Needs to Get in Touch with His Inner Head-Banger

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That's a paraphrase of Mike Tomasky's terrific piece on the Guardian site. His immediate subject is health care and the heads that need to be banged belong to recalcitrant Democrats. It's excellent advice for other fights down the pike, too.

Americans, the events in Iran, and nuclear prospects

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Pres. Obama has been coming under a lot of pressure to express a more forthright stand in favor of the pro-Mousavi demonstrators in Iran. He is quite right to resist those pressures, for a number of reasons.

Meanwhile, the deep split within the Iranian regime that was dramatically revealed by Rafsanjani's absence from Khamenei's sermonizing Friday raises a whole new set of sobering prospects-- for Americans and for everyone else.

The first and most compelling reason why Obama's stand of non-intervention in Iranian politics is the right one is that this is a core principle of international affairs that goes back to the 1648 Treaty of Westphalia. This principle, remember, underlay the international order in Europe in which liberal democracy had the space to evolve in, in the first place.

Sticking to the principle of non-intervention doesn't at all preclude Obama or anyone else from expressing a strong preference for non-violence and the rule of law. But it really does preclude our government's leaders from expressing sympathy for one side or the other in a conflict inside another country.

Especially after eight years of rabid and disastrous George Bush interventionism overseas, restating the principle of non-intervention-- and acting in accordance with it-- is more necessary than ever.

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Big Trouble Ahead

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savingMy wife and I went out for a Sunday stroll today in Santa Monica. On Montana Avenue, the chic shopping street, every third store is empty with a for lease sign in the window. A year ago our U.S. personal savings rate was almost zero and by next month it will be over 6%. Besides saving more we are beginning to pay down our credit cards. Earlier this year household debt as a percentage of disposable income was 134% up from 68% in the early 1980's. My Princeton classmate Vince Farrell notes that this is a huge difference.

Disposable personal income is close enough to $11 trillion that we can use that as a number. If household debt were to retreat to, say, 100% of income, it would be a retrenchment of a good bit over $3 trillion. That would be one big bite out of consumer expenditures. I have no idea where this debt to income will or should go. Things tend to revert to the norm over time, and if we were in the 70% range in the 1980's, I don't think returning to 100% is a crazy view. If the savings rate were to return to its 70-year average of 9%, that would chip in almost $1 trillion a year.

Vince is saying that the consumer's reversion to a cosmology of thrift will take $4 trillion out of annual consumption which represent 72% of our GDP.

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Just What They Wanted: Netanyahu Praises Iran Demonstrators

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Is there a method to his madness or is it just madness.

Prime Minister Netanyahu went on Meet The Press today (hosted by David Gregory, a rah-rah IDF type who may be to the Likud prime minister's right) to heap praise on the Iranian demonstrators.

Contrast this with President Obama's cautiousness. He understands that US praise could be the kiss of death. But that is nothing compared to the harm that an endorsement from Netanyahu can deliver. Is that his intent? Or is he just clueless?

Jimmy Carter's new role

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My latest IPS news analysis on this topic is here, and also archived here.

It includes the mini-scoop that yesterday, just one day after returning to the US from his grueling two-week tour around the Middle East, the 84-year-old former President from Plains met with senior administration officials here in Washington DC. (Update: The senior officials he met with included Sen. George Mitchell, as is spelled out in the updated version of the IPS story.)

In the piece, I also note that that meeting,

underlined the change in Carter's relevance and status in the Obama era. The visits he made to the Middle East while George W. Bush was president were barely tolerated by the administration, which kept him at arm's length.

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Don't be Google

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Items:

--Google AdSense ads disappear from Mondoweiss without adequate explanation.

--In a "disturbing trend," videos critical of Israel disappear from YouTube without adequate explanation. YouTube is owned by Google.

--Go back in time... Walt and Mearsheimer's talk at the Googleplex was canceled. [Steve Walt: we were scheduled to speak at Google Headquarters here in Mountain View, California.. Pur publicist got an email the previous Friday late in the afternoon that the event had been cancelled and didn't give us an explanation... We were subsequently told that the decision had been made 'very high up in the company,' and the Google representative said they had never seen an event like this get cancelled like the way they did. They said they would be interested in possibly rescheduling us, but we've never been able to reschedule the event, so clearly, it's not going to happen."]

["Don't be evil" is the informal corporate motto of Google. This post is based entirely on a note from Brian Dana Akers.]


**
Read more at Mondoweiss.

Tell YouTube to stop censoring videos about Israel

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A disturbing trend is emerging on YouTube - videos that show Israel in a bad light are being taken down. The first example was Max Blumenthal and Joseph Dana's Feeling the Hate in Jerusalem video, which was removed after being viewed over 400,000 times. Now a second video has been removed as well. This one showed Israeli Border Police humiliating a Palestinian man - and was shot by the police themselves as a joke.

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Too Thin to Illuminate

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He Said, She Said, hereafter HSSS, is the bane of actual journalism--I thought everyone knew that by now. The point of telling readers that experts disagree is lost unless the journalist explains why they disagree, whether they have good reason to disagree, whether their claims make sense. Otherwise we're left with a sloppy Whatever.

Today's object lesson in how not to help readers is Eric Dash's "If It's Too Big to Fail, Is It Too Big to Exist?" in the NYT Week in Review. The "It" refers, of course, to gargantuan banks, or bank-like behemoths like AIG. These huge money-movers create giant mayhem and then walk away with subsidies. Is it right for them to make out like bandits banks?

Eric Dash has the right idea, to peek under the curtain of Too-Big-To-Fail, but gets us not a half-step toward an answer. The experts are quoted saying things like "I don't think you can completely turn back the clock" (Lawrence Summers) and "You can't put that genie in the bottle again," (Frederic S. Mishkin, a former Federal Reserve governor).

If "there's no going back to the days of small banks" (Dash's paraphrase of Summers), just why is that? What do those like Sheila Bair of FDIC, and Paul Volcker, former head of the Fed, say to this claim? (It doesn't deserve the name of an argument.) Who would gain, who would lose if we went back to small(er) banks? What would be some predictable knock-on effects?

If there's a point to a Week in Review, it's to advance the discussion, not simply to state HSSS and shrug that substantial reform is difficult.

Update: I just got to today's business section, where Gretchen Morgenson's column, under a pungent headline ("Too Big to Fail, or Too Big to Handle?"), goes to the jugular with an apt observation:

More than two years after the crisis began, "too big to fail" remains "too problematic to address" with anything other than more souped-up regulation."

and an apt question:
Given that earlier efforts at policing these entities failed so miserably, why should anyone think that a new-and-improved regulatory approach will fare better?

« June 14, 2009 - June 20, 2009 | Café Home | June 28, 2009 - July 4, 2009 »
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