Stan Greenberg, James Carville & Karl Agne conducted some very interesting focus group studies with groups of conservatives and independents. This is the Executive Summary of their report of findings:

The self-identifying conservative Republicans who make up the base of the Republican Party stand a world apart from the rest of America, according to focus groups conducted by Democracy Corps. These base Republican voters dislike Barak Obama to be sure - which is not very surprising as base Democrats had few positive things to say about George Bush - but these voters identify themselves as part of a 'mocked' minority with a set of shared beliefs and knowledge, and commitment to oppose Obama that sets them apart from the majority in the country. They believe Obama is ruthlessly advancing a 'secret agenda' to bankrupt the United States and dramatically expand government control to an extent nothing short of socialism. They overwhelmingly view a successful Obama presidency as the destruction of this country's founding principles and are committed to seeing the president fail

A major conclusion they drew from this study is that the press is focused on racist explanations for the voter's beliefs, but there are indications that racism is not the main driver of conservative attitudes and behavior. What they did find, though, is that conservative beliefs are very different from those of even the more conservative independents.

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There have been a lot of people who have questioned why, after only nine months in office, Obama deserves the Nobel Peace Prize. No sitting U.S. president since Woodrow Wilson has been awarded the Nobel Peace Prize, making this a very unusual decision. Why did the Nobel Foundation make their surprising decision? Equally puzzling is why did the Republicans have reacted in such an extremely partisan way to that decision?

The answer to those puzzles is becoming clear. Consider first why Obama deserves the award, then what the reaction of the American right wing to the award shows about them. Finally, consider what the award of the Peace Prize to Obama has done to advance the cause of world peace.

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I really don't want to see universal care with regulation on insurance companies lost to a battle over the public option. Once universal health care is in place the public option can be fought over by itself. It's much smaller as an issue and not as easy to defeat by itself. Once true universal care is in place the real issue shifts to paying for it and controlling health care costs. We are very close to that right now. Is it reasonable to think that the public option could be traded off (for now) to get the rest?

The key is to get universal health coverage and community health pools. Add to that provisions that do not permit insurance companies to reject any applicant, or to increase the premiums for health condition or anything else. Add some effective form of regulation and monitoring that keeps close track of these things.

Once those things are in place they will begin to eliminate a lot of hospital cost-shifting that currently is needed because they provide care to the uninsured. Medically caused bankruptcies should also drop greatly.

A universal standard process for getting reimbursed would lower administrative costs to an amazing degree, both for health care providers and for the insurance companies, and it would aid in monitoring the effectiveness of the system. It would highlight the problems.

I'd also like to see a unified standard procedure and system for appealing denial of coverage. As it is, the insurance companies decide not to cover a procedure, then deal with the appeal themselves. The system for the appeal is different for every company and no one really knows what the decision is based on. That appeal process should be taken away from the insurance companies and standardized. It would fit in with the medical effectiveness studies.

Most of the advantages of size that allows one plan to currently dominate a region would also disappear, especially with a single standard system for getting reimbursed. So competitors could more easily take on the big regional monopolist health care companies.

The Medical effectiveness studies would put pressures on the pharmaceutical companies to sell medications that were more useful, not just me-too drugs that were patented and high priced. The practice recommendations would also quickly become a legal defense for physicians in malpractice claims. How does a lawyer justify a malpractice claim when the medical effectiveness studies suggest the treatment used? And if the physician deviated from the recommended treatment, careful documentation of the reasons for the deviation along with consultation would be a similar defense. Frankly more consultation would improve our health care a lot. Lawyers wouldn't take those cases on contingency, since they would be quite expensive and not likely to pay back anything. Right there the biggest cause of truly frivolous malpractice claims would be eliminated.

I'd like to see the government option as it would lower costs even more and more quickly. But with the above items included in a health care plan we could quickly get to a level of care similar to what the Swiss have.

After getting universal coverage we can focus on lowering cost. Politically that is less important than universal coverage, and probably easier to deal with.

Such a trade off is clearly dissatisfying considering how rotten the Republicans acted when in control of the federal government, but that's what governance is all about. Do the right thing, not the satisfying one. But do something. The Republicans failed when trying to govern because their first choice is always to do nothing, then try to force their agenda on the population, and finally to milk the government for as much money as they can. Health care is a massive and long-term problem both for the population and for the budget. Good governance demands that something be done, and not much has happened for over six decades. 

Something has to be done, and I think the core of that something is universal coverage and consolidated risk pools the insurance companies can't manipulate to skim the health individuals and abandon the rest. along with those community risk pools goes a single standard premium for everyone and a government agency to enforce those things and report to the people what is happening.  

I have long wondered at the apparent political shift that occurred during the twentieth century in which the conservative reactionary national Democratic Party battling the Progressive Republican Party each switched ideological identities. It's frankly puzzling. I'm no historian, so I am going to try to present a layman's view of what I think happened. It seems to revolve around the failure if the otherwise Progressive Republicans to deal with the Great Depression they created by ideologically based failure to use government to either prevent or cure the Great Depression which put the Democratic Party into power nationally until 1994.

The Republican Party of the early twentieth century was controlled by liberal Progressives, but part of older liberalism was the free market ideology.  The Progressive Republicans  were taken over by Wall Street, and Wall Street drove the total free market  ideology which both created the Great Depression and intensified it. That was what discredited the Republicans nationally and put the Democratic Party into power.  They essentially remained there until 1994. The Democratic leaders led  recovery from the Great Depression and then led the U.S. to win WW II. This set an all new set  of more realistic leaders into national office who were willing to use government to prevent economic disasters and to win wars.  The free market anti-government ideology was completely discredited with most of the crop of FDR era WW II leaders in both parties. Both parties took a largely pro-government Progressive public image.

One large element of that progressive message was that segregation was clearly not practical nor was it humane. The same leaders who came in on a message of using government to resolve the Depression and win WW II also took the realistic position that segregation had to end. Truman (not a flaming liberal, but a very practical man) integrated the military because he could. The Supreme Court recognized the impracticality and the Constitutional inconsistency of legal segregation, and the Civil Rights Movement grew. The practical Democratic leaders in office joined with the progressive Republicans to end segregation. After nearly two decades of internal battling over Civil Rights, the pro-Integration Democrats under LBJ were able to get the Civil Rights Act and the Voting Act passed. The Republicans, as the minority party then, acted as the opposition always does on major national issues when there is no clear outside enemy or threat.  They voted lockstep against the civil rights legislation.

The ideological shift between the two parties was almost complete, except that the solid Democratic South was firmly against Integration while the national Democratic Party and the Progressive Republicans favored it.  This was a real threat to the  Democratic Party  relative lock on national majority party status.  That's the first point to consider. The second is that  the apparent ideological homogeneity of the two  national parties we see today is quite new. It is largely a function of the ability of national TV to elect candidates.

Taking that second point first, let's look at American national politics and political parties.  Political parties in America  are not innately ideologically homogeneous. They tend to be made to look that way nationally, the power of TV to elect candidates to office.  The demand for ideological consistency nationally  is a development since the 1960 Presidential election when Nixon, to his great surprise, narrowly lost because of his poor performance in the Presidential debate. Since then the parties have been made to look more ideologically  homogeneous. It makes a better brand to sell to the public. Bill Buckley recognized this and pushed for an ideologically pure party in the National Review.

The current image of ideological homogeneity is a media creation to try to attract followers and funds, and the political leaders have spend the last five decades trying to manipulate their party to match the media image. That  manipulation by the party leaders  is an effort to  try to win favor with enough voters to gain or build power for the party. This is not an innate characteristic of a political party. It is something the top politicians and the party  leadership shape the party structure to be because it helps them get elected in the TV age.  It is their TV political brand name to be identified and used to attract voters.  Think about the structure and purposes of political parties.  

American national politics is structured around the government, with political leaders attempting to attract sufficient voting followers to gain power. Those leaders organize political party institutions to organized blocs of voters and get them to the polls. People who want the government to act for them organize into blocs to put politicians forward to achieve the government actions they want. Those politicians communicate with and direct the voting actions of those blocs through organizations such as churches, businesses, unions, clubs, etc.,  and since WW II, the politicians have also communicated directly with the voters through the mass media. The power of the media becomes greater as voting day gets nearer, but the older methods of voter organization still exist.

So what you have is voters and  public passions on one side, Party leaders and top party officials on the other, and the two are connected by the creation of party organizations.  Those party organizations are creations of and reflections of what those politicians think will get them elected.  The purpose of the party is to coordinate all the various ways politicians connect with voters and get them to vote for them.

The process of organizing public groups into voting blocs is played out inside organizations (churches, unions, big businesses, and others) and other media channels. When the time comes down towards the election the mass media become the key media channels, so that the elections themselves are played out most visibly in a mass media landscape. It's that mass media landscape that we are most familiar with because it is the most broadly visible. It is the political leaders and the party structures they create that coordinates all of the communications between politicians and voters other than direct personal contacts that occasionally occur. If the question is "why did the two political parties switch ideologies during the twentieth century ?", then the answer is that the switch was a series of steps, each taken by the party leaders, in order to win the next election.  The political party is the key tool used by the existing political leaders to work for reelection and expand their power over government.

Earlier I stopped the narrative to look at the structure of political parties. When I stopped, the Democrats had been the dominant national political party since the Depression and they had developed a crop of experienced realistic leaders who, along with using government to control the vagaries of the economy, also took the progressive steps to resolve America's largest and longest lasting social problem, Race.  This put the Democratic Party out of step with the Old South,  which had been the single most reliable bloc of national Democratic votes. The crop of Depression and WW II  era leaders were running out. Goldwater showed the first real national effort to replace the relatively progressive national leadership. The Goldwater movement failed, but then LBJ gave away the solid South, and as we now know, he knew what he was doing when it did it.

Nixon (another of the WW II era leaders, but always an outsider) took advantage of the Democratic weakness in the South with his "Southern Strategy." Nixon's resignation set up the situation for Jimmy Carter to come out of nowhere and take the Democratic nomination in a year that was going to be a dead-certain Democratic win, but Jimmy Carter thought like an engineer, not a politician. That set up the situation for Reagan - the conservative  candidate made for TV - to come out of the West and take the Presidency from the Democrats. I am told that Carter did not believe in Party Politics, and I believe it. The Conservative Republican Party machine ran over him, and he had done nothing to build the Democratic Party to deal with such opposition. Carter was an Engineer by training, not a politician. Thinking like an engineer, Carter solved problems and ignored the political power situation those problems existed in.  Where a politician would have strengthened the party for the Presidential battle, Carter solved problems in many ways that weakened the party (the Panama Canal giveaway, for example. That was handled in a totally non-political manner.)

Nixon's Southern Strategy solidified the identity of the Republican Party as the States Rights anti-integration party. The States Rights anti-government message worked well along with the Wall Street Republicans.  Nixon's Southern Strategy solidified the identity of the Republican Party as the States Rights anti-integration party, and the demand by Bill Buckley and his National Review conservatives to create an ideologically unified party worked to drive all the progressives in politics towards the Democrats. The political power of the TV media solidified the new ideological image. The constant demand by Bill Buckley and his National Review conservatives to create an ideologically unified party worked to drive all the progressives in politics out of the Republican Party structure and towards the Democrats.  

Nixon and Reagan were the last of the real WW II era Presidents.  Both were outsiders and represented a rebellion against the more progressive leadership of the Greatest Generation. Bush 41 was made a national politician by Nixon based on his blue-blood Republican credentials, and then was made President because Reagan could not run for reelection. That was the  transition to the younger generation. They were all a reaction to the progressive imposition of Civil Rights legislation on the nation along with the development of TV as a key element of winning national elections.

Unfortunately, the conservative movement that grew up to exploit TV images for political use carried with it a toxic ideology as its political brand. That toxic ideology carried the anti-modernist idea that unrestrained free markets could work and that government could not. The demand that slavish adherence to the Republican TV brand should control every action the party takes created a group of party politicians and leaders unable to govern a modern industrial nation. It has taken the multiple disasters  of the Bush 43 administration to prove to a majority of the voting public that the conservative ideology simply does not work.

The Republican anti-government message and behavior, reminiscent of Hoover's reaction to the Depression and again demonstrated in the failed reaction to Katrina, totally unsuits them to run a national government of a modern industrial nation. The Republican Party as it is currently organized and under the "conservative" marketing brand has been largely discredited to much of the public now.

I think this explains the reversal of ideology between the Republicans and the Democrats. The three key elements were the ideology-based failure of the Republicans to deal with the economy adequately after WW I, then the decision by the government leaders of the Greatest Generation to deal with the Civil Rights issue in a progressive manner. The backlash to LBJ's Civil Rights legislation lost the Old South to the Democrats and allowed the Republicans to for a while become the dominant national party, but the demand for ideological purity in the party to maintain the TV brand has made the Republicans unfit to govern.

Anyway, that's my best guess at the moment.

My next question is what happens to the two parties next. With the TV mandated conservative brand the Republicans may be left in the permanent minority as a national party. Can they elect new leaders without that toxic ideology? Bush proved that they cannot govern within the anti-government framework, but the constraints of the ideology means they cannot budget or govern effectively when facing real problems. (They do quite well at making up problems for TV and solving them using the ideology those problems were designed for.)  

On the other side of the isle, can the Democrats govern effectively long enough to dispel the notion that the problem is the government itself, and not the conservative ideology? The American Constitution creates a national government in which a significant minority can block all significant action on important issues.Will the Democrats handle that somehow?

 

 

 

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Why are conservatives acting so crazily these days? They are focused on preventing social change and they will do what it takes to achieve that outcome.

Conservatives dislike change because they are socialized to hate and avoid social change. This is the pre-modern way of thinking, and it still applies to most individuals and many complete cultures and subcultures. Conservatives belong to a subculture that values stability and tradition above rationality and change. Tradition and social stability are the most important things in their lives. Yet as is very clear, our society is undergoing rapid technological and economic change that affects everyone. Conservatives just want to stop that change any way possible, and they are looking for someone besides themselves to blame.

Their core values are rooted in tradition and religion. Cultural values like this are what each of us learn as we grow up, and it tells us what is right and wrong. They accept that tradition and social stability are right and good. They know deep down that change and people who advocate change are bad. Facts and rational thought processes are valued much less important than tradition, so when someone describes a social problem and proposes social changes they automatically recoil in fear and reject it. They 'know' in their hearts that such change is dangerous and wrong.

It is this mindset that makes conservatives focus on what they want to happen and to ignore the process of getting to that outcome. The outcome is what they value, and the rational process of getting to an outcome is not valued. In fact if the rational process prevents achieving the desired out, then the process will be rejected. In our liberal society the Constitution declares that using torture is an unacceptable way to get others to do what we demand, but if the conservatives want recalcitrant enemies to comply with their demands, then the demand for compliance means that the limitations on getting there will be rejected. There is no real use arguing rationally that torture is ineffective. The conservatives will use any means to get what they want.

Here are the steps that conservatives take that lead to irrational or crazy behavior.

(1) They know what they want society to do, and they look around for arguments that will get people to do it. The basis for their certainty of what is right is traditional authority. It is taught by family, religion and by the subculture they live and work in.
(2) Sometimes what they want to do has no rational argument that supports it. The outcome they want is what's important, though, so they still need to find a way to get it.
(3) Without facts and reason to base an action on, they find a lie to convince others. Remember, they know from traditional authority that what they want is best. In our modern media, only the lie is transmitted. There is no fact-checking unless it is so egregious as to be worth the effort.
(4) When fact-checking does occur and they are caught lying, they resort to every trick pulled by an addict or alcoholic to avoid or deflect blame.

Conservative thought processes and addictive thought are similar. Both are outcome oriented. The only thing that matters is that the result or outcome is satisfying, and if the rational steps to get to the outcome prevent the desired outcome from occurring, the steps to get to the outcome must be changed. That means convincing others to do things that achieve what the conservative or addict wants. Lies are as good as logic as long as the result is the desired result.

NobelCommentDecider presented a list of excuses that conservatives use when caught lying. Notice how similar it is to the excuses an addict or alcoholic uses when caught using.
(1) Democrats do it too
(2) whatever it is it isn't their fault, or George W.'s
(3) you just don't like free speech
(4) it's a slippery slope to taking their guns
(5) or Lalo35adm-'you say people are stupid just because they disagree'

Extreme behavior and lies to achieve a desired outcome is not universal among conservatives, although they all know in their hearts that change is inherently wrong. Some conservatives are, however, more prone to extreme behavior. The more extreme conservatives will say and do almost anything to defend against change. The less extreme conservatives will defend those who are speaking and acting for them. The result is that they all support the extremists.

Some commenters who have heard the crazy statements from Republicans who are fighting against health care reform have asked "Are they living in a different universe?" They are asking the right question. The fact is they are living in a pre-modern culture and they'll say anything to keep it.

[This analysis is based on Max Weber's description of traditional and modern culture. It is well-known in Sociology and in Organization Theory.]

Gen. David McKiernan was fired as American commander in Afghanistan and replaced by Gen. Stanley McChrystal. This is the first U.S. commander fired during war time since Harry Truman fired Douglas MacArthur in the Korean War. It was so far out of the ordinary way of treating American Generals during combat that eyebrows rose all over the place. What the Hell happened? Rajiv Chandrasekaran of the Washington Post now explains.

In mid-March, as a White House assessment of the war in Afghanistan was nearing completion, Defense Secretary Robert M. Gates and Adm. Mike Mullen, the chairman of the Joint Chiefs of Staff, met in a secure Pentagon room for their fortnightly video conference with Gen. David D. McKiernan, the top U.S. commander in Kabul.

There was no formal agenda. McKiernan, a silver-haired former armor officer, began with a brief battlefield update. Then Gates and Mullen began asking about reconstruction and counternarcotics operations. To Mullen, they were straightforward, relevant queries, but he thought McKiernan fumbled them.

Gates and Mullen had been having doubts about McKiernan since the beginning of the year. They regarded him as too languid, too old-school and too removed from Washington. He lacked the charisma and political savvy that Gen. David H. Petraeus brought to the Iraq war.

McKiernan's answers that day were the tipping point for Mullen. Soon after, he discussed the matter with Gates, who had come to the same conclusion.

Mullen traveled to Kabul in April to confront McKiernan. The chairman hoped the commander would opt to save face and retire, but he refused. Not only had he not disobeyed orders, he believed he was doing what Gates and Mullen wanted.

You're going to have to fire me, he told Mullen.

Two weeks later, Gates did. It was the first sacking of a wartime theater commander since President Harry S. Truman dismissed Gen. Douglas MacArthur in 1951 for opposing his Korean War policy.

The humiliating removal of a four-star general for being too conventional reveals the ferocious intensity Gates and Mullen share over a growing war that will soon enter its ninth year. It also demonstrates their zeal to respond to President Obama's demand for rapid success in a place where foreign armies have failed for centuries.

McKiernan is an old school American general. You don't get more hard corps old line American than being an Armor Commander. Armor, Artillery and to a lesser extent, tactical air (close air support), are the epitome of conventional war.

What's so old line about being an Armor General? That's a logistics war, big army against big army. The commander who can bring the greatest numbers against the weak point of the enemy normally wins. And what are "the greatest numbers?"

The numbers that matter in conventional war are rounds of ammunition and tons of ordnance. A conventional commander coordinates the firepower of more weapons on the battlefield to greater effect than does the commander of the enemy forces. The ultimate weapon in conventional war is a nuclear weapon. The most important resources for the winning commander come from either the largest economy or the greatest population. The commander's most important skills are coordinating the use of these resources - logistics.

How do you defeat the army that posses an essentially unlimited number of rounds of ammunition and ordinance to drop on you? The Chinese tried overwhelming numbers of troops, which works as long as the opponent isn't losing so badly they resort to nuclear weapons and you have enough troops. Since many of the Chinese troops used in Korea were previously Kuo Ming Tang troops and as such politically unreliable, they were expendable and available. But human wave attacks were not the best solution. A few years after Korea, the Algerians adapted Leninist guerrilla techniques and applied what is now called asymmetric warfare against the French. You don't offer the dominating power an army for a target. The new strategy was effective. Algeria is no longer French dominated even though the French had both the police forces and the conventional army with the conventional power. The asymmetric warfare technique migrated to South Vietnam and defeated the U.S. military also.

Asymmetric warfare was a logical solution when the occupation following American conventional invasion of Iraq was so badly screwed up by the American conservatives from the Heritage Foundation and the Bush administration who sent them there. The attempt to impress a foreign political ideology will always fail with it does not match the existing culture the ideologues attempt to impress it on. Such an effort creates a perfect ground for asymmetric warfare. So how does it work?

Instead a conventional army, you place highly skilled and very political cadres into the population and convince the population that the conventional forces and police of the government are their enemy. That is done in several ways. First, make promises that, given power, the cadre will focus on and provide for the needs of the population. Whatever can be done to back these promises up makes them more credible, so the cadres have humanitarian needs organizations - with political brands. This is easier when the government has no similar humanitarian efforts.

Second, conduct guerrilla operations against the enemy military and police that cause them to attack the population as the source of those operations. The extreme version of this is terrorist operations in which the attackers are prepared to and plan to die in the attacks. The most effective of these cause a massive counter reaction by conventional forces against the general population. Such efforts also create martyrs who have died to benefit the population. "Collateral damage" of innocent civilians is inherently a loss on the battlefield. It really helps the insurgents when the government is inherently corrupt, since the population will always recognize this and act to reject it. How do you think the Iraqi population reacted to the corruption of Blackwater and Halliburton? Was there any doubt that these organizations represented the Bush administration? Since the conservative American philosophy of individualism with no government regulation encourages such corruption, the Conservative philosophy creates its own enemies.

Afghanistan is a political war. Where is the effective conventional warfare counter for these asymmetric techniques? Conventional warfare has only one solution to asymmetric warfare techniques - destroy every last member of the cadre of insurgents, and if they keep being recreated from the population (as they will be), conduct genocide on the population. This has been the Soviet reaction in Chechnya. It hasn't worked very well there, and with the most modern forms of journalism, works even less well. The media has become a major theater in such wars now. That's because the battleground is the minds of the population involved.The actual geography being fought over is now little more than a stage on which the real battle is played out for the minds of the onlookers.

LtC. John A. Nagl in his superb book Learning to Eat Soup with a Knife: Counterinsurgency Lessons from Malaya and Vietnam describes the traditional U.S. military conventional war culture beautifully. It is a culture that permeates both the military forces and, more important, the American political culture. You can tell that Gen. Petraeus and Gen. Chrystal are violating it because they are accused of being "political generals." The American culture of war fighting looks down on "political generals", but that is the essence of fighting an asymmetric war successfully.

In the American political culture, Americans fight wars against other armies. When America is at peace, the military is subordinate to the political leaders, but when America is at war, the military leaders determine how the war will be fought. That includes the political effects, because modern wars are total wars in which both the military and the civilians are combatants. Let's not forget that both WW I and WW II were won in large part because the American economy was nationalized and directed by the government planners. That's the definition of total war. In total war, there is no essential difference between the civilian sector and the military sector. America fights modern wars in which scientific logic based on observable facts dominates the actions taken by both armies and civilians. West Point was created in 1803 and run by the Army Corps of Engineers to create an officer corps dominated by scientific thinking rather than the traditional thinking of European armies. West Point succeeded. It has been a major element in creating modern America.

By the way, buy a copy of colonel Nagl's book. Most intelligent and promotable U.S. officers already have.

As a company grade officer during the Vietnam War, I read Mao's writings on how to fight a war. His techniques were inherently political. They started with a dedicated political cadre and worked up to a conventional army, but only as each stage before it succeeded. Let me say it again. The stages were inherently political, not military. As one who firmly believed in logistics and the idea that the biggest battalions win, I was hard to convince. But I was thinking on the wrong battlefield. The conventional war battlefield is just that - armies, trenches and ordnance. The modern battlefield is men's minds. Thomas Kuhn would describe this as a paradigm shift. George Lakoff would describe it as "reframing the issue." Both are correct. But who would have thought that shifting the paradigm or reframing the issue would determine who might win a war? But it does.

Gen. David McKiernan was not able to make the shift or reframe the issue. That became obvious to Secretary Robert M. Gates and Adm. Mike Mullen. The fact that McKiernan was unsuited to win that war was demonstrated by his refusal to accept a face-saving way out of his command. Afghanistan is simply not a war suitable for an armor general who sees war as a challenge for an engineer or logistician. It is a war for a politician.

I don't blame McKiernan. I don't trust political generals, either. I was a logistician. That's my generation. McKiernan was one of our very best. But then, so was General Westmoreland in Vietnam. Let's not forget that we didn't win that one, either.

Hey! Someone in the media has figured out the <i>real</i> significance of the Cambridge, Mass arrest of Professor Gates in his own home and why it matters to President Barack Obama.  That someone is Frank Rich  writing in the New York Times. ("http://www.nytimes.com/2009/08/02/opinion/02rich.html?_r=2")
The answer is: it doesn't matter to the President in his role as President at all. But the media would rather run a story about Race than one about health care. That demonstrates that the news media system has failed to meet the needs of the American public as thoroughly as has the American health care lack-of-system. Wonder why?

Race is safe, sexy and increases viewers or readers for the media at a time when newer and less well-developed issues offer only the danger of feeding conflict. That conflict is more likely to lose readers/viewers than to increase them.  The media does not work to cover news. It works to increase media revenue and satisfy Wall Street.

So the editors emphasize the peripherally race-related issue the arrest of Professor Gates in his own home than the much more important policy debate about health care. The policy debate on health care is frankly boring.  Besides, the media has evolved now to cover race. Race has been a key American media topic since World War II, so the dangers to media revenue of covering it are well known. The newer and generally more contentious issue of national health care financing is a subject with unknown revenue risks at a time when the media is strapped for revenue. In addition, the media has few reporters or editors who understand government or policy well enough to write about it generally. They have even fewer people capable of understanding the issues involved in the disaster that is the current health care lack-of-system together with the parasites who use fear of illness and the lack of easy access to health care to get rich. But the biggest problem is that covering the true issues in the national health care financing debate will not increase media revenue at a time when the reliable revenue streams for TV and Newspaper organizations are under heavy attack by competitors.

That's not all. There is also the problem of failed journalistic standards. Whether these failed standards are a cause or a result of the general revenue stream problems for the media is not clear. But the fact is that the standard method of reporting political conflicts does not tell the public what they need to know about the issues. Here's what journalists today do. The sacred and unquestionable journalistic orthodoxy is that there are two and only two reportable sides to a political policy debate. Both sides are of equal importance, the job of the media is simply to give equal weight to each of the two sides. It is up to the readers to determine which of the two sides is accurate or more meaningful. The journalistic community rarely reports anything that would provide readers or reviewers some standards with which they could measure the relative importance of the two sides. The journalistic substitute for reporting on the standards the readers or viewers could use to evaluate the news is to get biased pundits to offer their opinions in a "he said - he said" conflict that is likely to increase ratings but provides no real information.

Finally, the media is supposed to cover only the political and entertainment aspects, never the boring policy aspects themselves and the reasons why the policy itself matters is irrelevant to the media buying public. The only thing that matters is what draws ratings that can be sold to the media advertisers.

The result is that the media generally tells the public little comprehensible about the health care debate since most of the people on both sides of the debate are already locked into fixed positions and do not appreciate it when the media actually tried to inform them of the real facts.

The real matter of importance to the American public right now is the extended health care crisis which the forces of status quo do not want corrected. The media itself is facing its own crisis of relevancy which this health care debate highlights. Both the big city newspapers and the TV networks have been centralizing and building local monopoly positions within larger national near monopolies for the last five decades as they have fought to make more money and show up well to Wall Street.

The technological challenges of removing the sunk cost of news distribution has knocked the pins from under the traditional model of news gathering, bundling and distribution as the Internet has replaced the need for local department story and classified advertisements and for the daily distribution of the news on dead trees or over limited TV air time at a few selected times of day.

The result is that what now passes for TV and big city news organizations are reduced to trying to pander to selected niche markets which demand entertainment or selected reporting that supports the market's political beliefs. The commercial market for entertainment "news" provides all the so-called news that is needed to fill the available TV airtime or the newspaper entertainment news holes. The political partisans provide the needed talking points to fill the political opinion pages and TV pundit air time.

This explains what is wrong with the misnamed "News" media. The media is shrinking the entire news gathering process to whatever pays for itself, and it does so without searching for new sources of news because there is no known business model that pays for that kind of journalism any more. That's why so few news organizations maintain foreign bureaus any more. It's also why the editorial decisions about what is important out of a Presidential News Conference is about a trivial and only peripherally racial incident rather than the crisis surrounding the failed methods America has developed to pay for health care for a lot of its citizens.

So why is the media no longer properly a "news" media? That's because it has become a "revenue generation" media and nothing else. Of course, if they were honest and renamed it the revenue generation media then they would lose more revenue. So they will try to maintain the fiction that they are still a "news" media.

Any government that fails to meet the needs of large segments of the population for economic and social stability for a long time becomes less legitimate. As the government loses legitimacy, threats to replace it by one means or another rise. The health care crisis has reached the point where government can no longer protect its legitimacy by buying off large groups of people. The number of uninsured is growing, and a much broader group of those supposedly with health insurance are beginning to realize that it may not mean anything. Even if you can get care, the uninsured cost can bankrupt you. Too often the insurance company itself will cancel the policy before paying large claims. Add the health care crisis to the near brush with Depression and the rising unemployment and the government is in trouble. Any politician in office right now should be looking over their shoulder and feeling that their job is threatened. Only those politicians in the most radically gerrymandered states or districts can feel safe. Watch the contortions that Arnold Schwarzenegger has been going through to try to act sane for the moderate voters and still keep his conservative creds with the right-wingers.

When the government attempts to enforce an ideology or religious doctrine on large groups of unbelievers they face push back. When the numbers of active unbelievers get large enough, the threat becomes dangerous to the incumbent government's continued hold on power. The government then has two choices on how to deal with that loss of legitimacy and the resulting threats to its continued hold on power. It can either step in and do what is required so that fewer people face the problems or it can resort to more extreme authoritarian methods of repressing those who threaten to replace the government in power.

China's communist government considers the Uighur population to be a threat because they reject the Communist doctrine based on materialism. That was also the Chinese government's problem with the Falun Gong and the Tibetan Buddhists. But it has also been the problem for the American conservatives who are trying to enforce their strange ideology on America. It explains the pressure to steal elections and conduct dirty tricks, as well as the expanded actions by right-wing extremist groups like the anti-abortionists, the racists and the anti-immigration groups. The push-back the conservatives get from those of us who recognize the snake oil they are peddling is why they still feel like they are an oppressed minority.

But that mechanism is also the basis for why Obama is dropping in the polls. Fewer and fewer people see him acting to protect them from the economy or from the American medical disaster-zone that is good primarily to make a few more people rich and occasionally provide pretty good medicine but unreliably for anyone but the very rich.

While the economy was expanding a lot of people who were not rich thought they might become rich, so the threat of a health care crisis seemed less likely. Now that the conservatives have also destroyed America's economic growth, that group has clearly gotten smaller as more and more people are sweating out just keeping their job.

The real problem for health care reform is clearly in the rich man's club in Congress - the Senate. The Republicans have been a shrinking minority, but they are no longer in power. The Democrats are, and the economy and health care crisis reflect on the Democrats now. It's clear to the Republicans who are left that if they can just hang on they begin to regain the power of the opposition during times of social and economic crisis. Which leaves the gang of six. All of them appear threatened and desperately grasping for funds to gain reelection. How to deal with them is the question.

Obama's advertising in their states is a really good idea. Let's hope it works, because the health care crisis is ground zero for the continued existence of the Demorats in power in Congress and in the federal government. This is one the Democrats must win. That is equally true for the conservatives.

If America wants to avoid the damages caused by a government trying to force an ideological straight jacket on it and the resulting authoritarian actions, then the Democrats have to win the current health care battle.

This is a brief description of the the battleground in a nutshell. And politically, nothing else matters now. Nothing.

Sarah Palin is a rather sad, empty and unimaginative person of little real long term importance. Personally she does not matter much to me. But right now she is representative of some real American problems, like why America's education system is falling behind that of so many competing industrial nations and why we turn out Lawyers and financial MBA's instead of scientists and production engineers. But let me just start with Sarah. Why did she resign so suddenly out of the blue?

Josh Marshall has posted the best explanation I have yet seen for Palin's strange and rather shocking resignation as Governor of Alaska. It makes a great deal of sense to me. She is a grifter, and the grift has finished. She is getting out of town while the getting is good. So now we can wait for the announcements of her money-making opportunities. She won't keep such deals from the Paparazzi (in this case mostly political and business reporters) because that kind of publicity is what she needs to extend her celebrity. She'll tell the Paparazzi because she needs them as much as they need her. Her reason for feeding the frenzy will be that the Paparazzi will extend her celebrity and keep her bankable. That dynamic between the celebrity and the press is the core of the entire celebrity culture as well as being the business model of the such journals as supermarket tabloids, People magazine, and the business publications Forbes, Fortune and the Wall Street Journal [*].

My read is that Palin has a single overriding motivation and that is ambition. She has a single major asset for her ambition to ride which is her celebrity status, the result of a lifetime spent chasing celebrity with no apparent significant interest in anything else. That's been her career. Her single asset has reached its apogee and was suddenly sliding away (stolen by her "enemies") so she has taken this opportunity to renew it. She will sacrifice anything to feed her ambition, including honor and the respect that can be earned by living up to your commitments. She has just proven that by her resignation.

Why do I care enough to blog about her? Two reasons. First, like the entire Pop Music scene, she seems to be emblematic of America's long celebrity obsession fueled by greed and the power of publicity experts to milk the public through the developing new forms of mass communications being created since the 1960's. That trend is run by grifters like Sarah Palin. It is a trend that runs counter to the great strengths America has always demonstrated as a solid, hard-working middle class productive nation with a culture centered on the strengths of well-trained and experienced journeyman workers.

The creation of the barely out of her teens Britney Spears is a symptom of the disaster of that celebrity culture. But the celebrity culture to which Sarah Palin now belongs is not isolated in society. It has broader implications. It has meant that America as a society and as an economy has failed to provide adequate rewards to the very many extremely capable people who might be induced to become engineers in college and learn new ways to invent and manufacture improved products. Instead, the best and the brightest are becoming lawyers and MBA's in the hopes of somehow suddenly getting rich by cashing in on a celebrity event of some kind. America's economic rewards are being redirected to celebrity status rather than to production of real goods and services of real value [**].

The second reason is that Sarah Palin's case is a cautionary tale of the utter vacuousness of the modern Republican Party. Their interest is in gaining power, nothing else. John McCain chose Sarah Palin as his running mate, not because she was best qualified if as President he died she would take over and run the country, but because he simply could not be elected to the office that fed his personal ambition and his feeling that he deserved to become the next President. He bought into Palin's celebrity to feed his own unbridled and undisciplined ambition. McCain is the son of American Naval Royalty, and he deserved the job of President more than anyone else by right of birth.

McCain is a conservative in part because it is an excellent justification for laziness. He resists working for his rewards because he feels he is entitled to them by right of birth. He is angry that so many people don't just hand them over because of who he is. Give such individuals a social problem to solve that does not involve their own interest directly and their solution is "Ignore it. If there is someone else with a good idea, skills and some idea how to get rewarded for it, they will solve the problem and we don't have to do any damned thing about it. "They call that the "free market" solution. What it really results in is a statement of "Let someone else do it, I don't want to think about it because I've already got mine. What? You want me to do hard work?"

So what we have is a toxic and unproductive celebrity culture that is taking over America, together with a political party representing and built on that culture that is made up of people who offer an economic ideology that advances that toxic culture. They are in it, like Palin, solely for their own personal benefit. Sarah Palin is just one more example of that culture, together with her national political mentor, Senator John McCain. The results of that culture, both in the failure of America to remain economically competitive against so many other industrial nations and in the clear emptiness and nastiness of the conservatives running the modern Republican Party are very clear.

So tell me. Why should we care about the sad spectacle that Sarah Palin is making of herself? Should I add Governor Mark Sanford?

[*]An interesting side note. I was told by the journalism prof of a public relations course I took that the articles in the Wall Street Journal that had no byline were simply public relations articles written by the company that were their subject. No real independent reporter was involved in writing them. Such an idea gives a very interesting view of such Wall Street Journal news articles.
[**]In a world that is populated by too many people to feed and in which half the worlds population exists on less than a dollar a day, the idea that the national economy that is using up as much as a quarter of the world's resources is using them to create celebrities for export is an ethical issue I will leave you to ponder. It is clearly one that the American conservatives and the free marketers wash their hands of.

Harry Reid has been reported today as telling the Conservative Democratic Senator Max Baucus (very powerful Finance Committee Chairman) to stop trying to compromise with the Republicans on the Health care public option and on the regressive tax on employer-supplied health benefits. This has surprised a lot of people who have a poor opinion of Harry Reid's spinal fortitude. If you are familiar with the way he stood up to Mob intimidation as a prosecutor, ; to Max Baucus shouldn't be a surprise. The real question ought to be "Why has he apparently let the conservatives and Republicans roll him all of this year." That's what is out of character. Here's my opinion.

Things have changed this month. Up until now this year the legislature has been involved in just keeping the government running, and the Republicans have been in the business of obstructing everything the Democrats attempt (which among other things is why so few of Obama's political appointees to fill plum book appointments have gotten votes and why Republican Senators keep putting holds on them.) But this is July. The health care bill is on the table for this month. The health care bill is the main event, unlike everything else that has come up before this month.

Obama, Reid and Pelosi between them have total responsibility to keep the government functioning in spite of the asinine and unified obstructionist actions and language of the Republicans as dominated by the talk show hosts. Obama has done a masterful job of playing the Republicans so that the only positions they could take to oppose him have been more self-destructive than effectively obstructionist on the large issues.

Between Pelosi and Reid, Pelosi has the easier job because of no filibuster. She still has to mollify the Blue Dogs who are almost as skittish as the Republicans because they fear the next primary. So Pelosi has compromised with both the Republicans and the Blue Dogs to a greater extent than any of us like at all.

Reid, with only 59 Democrats until today as well as the filibuster which the Republicans are only mildly hesitant to use, was in much worse situation than Pelosi. I'd bet he has been counting votes very closely and keeping the conservative Democratic Senators mollified.

But two things have just changed. Al Franken was sworn in today and the big initiative - health care - is in the balance. This is once in a lifetime, not just in a political career. I'm more and more convinced that the three top Democrats - Obama, Reid and Pelosi, have been gearing everything to powering the health care bill into enactment this year. That's the reason for the refusal to accept delays, and I think they have allowed some things to be enacted that they hate (I know I do) so as to not waste Presidential power on secondary issues. But now we are in the main bout. If I am right, then the gloves are going to come off.

We'll get only hints of the machinations because they aren't even inside the beltway. They are inside the Senate and House. and the Press mostly hasn't a clue, and the ones who have read Richard E. Neustadt's book "Presidential Power" will find that it runs counter to the permitted media narrative. But some reporter with inside connections on the Hill and the smarts to apply Neaustadt's teachings to the analysis has one Hell of a great book to write, much like Ted Sorenson's "Making of the President."

I won't guarantee this, of course, nor do I have original reporting to confirm it. But I've read Presidential Power and the Modern Presidents, the first edition of which was published in 1960, and which JFK was reported to have read between the election and his inauguration. Neustadt essentially wrote the the President's power is limited, and it grows with each win that he is seen to be responsible for and is diminished by each loss of his major efforts. Obama has essentially kept his hands off of most of the things that come from Congress, so his losses have been minimal as far as his power goes. On the positive side, the three of them (Obama, Reid, and Pelosi) have been carefully setting things up specifically to pass health care. The administrative decision to declare budget bill rules with the Budget powers to avoid a filibuster if necessary is one thing, andso was the rapid ad rigid schedule set so that the bill is dealt with this summer when Obama's power as an incoming President with a solid majority is still at its height. The fact that Reid has not stood for any delays in the schedule for completing health care is an indication of how the three are husbanding their resources.

I really think that the power the three have been husbanding all year is about to come unleashed. When it comes down to the crunch, the health care vote is going to be the first mandatory party-line vote this year. Up until now, the Democratic defectors have gotten a "gimme." Not this time. And for those who go with the Party voting against their own renomination or election but for health care and who find it damages their prospects for surviving their next Primary, the Party will provide the kinds of support needed to get a win in that primary. They did it for Lieberman, to the disgust of many of us. Is this why they did that?

As I say, I won't guarantee this scenario, but I really think I see is coming together. If so, we are about to see it work out. I sure hope I am right.

I hate to disagree with David Kurtz, but I really think that Liddy presented a very good explanation for the bonuses and for calling them Retention Bonuses even though some of the individuals have already moved on.

In fact, it is a better explanation (though much less satisfying) than my earlier conspiracy theory that a bunch of rogue left-over sales traders in AIGFP conducted a scam that suckered both Liddy and the government supervisors Summers and Geithner, then up to and including Obama.

The relevant facts are:

(1) These contracts are each a unique, highly complex, delicate,  internally conherent bundle of individual derivative contracts. The set of contracts inside each bundle apparently are designed to protect each other from almost any change in the relevant markets. But each bundle has to be monitored daily, and the manager has to enter the markets to buy and sell derivatives and financial instruments to adjust the balance of the bundle. Miss one day and the entire bundle can fall apart, putting it into default. In the case of such a default, there are heavy penalties in addition to losing the total investment in the entire bundle. Successfully managing the bundle until its final expiration will result in a profit, probably substantial or they would not have built the bundle in the first place. Each bundle is uniquely designed and someone who understands it in detail has to monitor both the bundle and the markets.

(2) The managers who are managing those bundle are not salesmen. AIG decided to get out of the business about January 2008. The purpose of the bonuses was to keep the very specialized managers on the job managing those bundles until the bundle contract expired. But the job is ending. How do you keep the managers from finding new jobs that need their skills? Substantial  "Retention." bonuses.  The managers are <i>not</i> getting bonuses to sell these bundles because AIG stopped doing that. Once AIG stopped selling those bundles of contracts, it took about two months to negotiate a termination agreement with  Joe Cassano, one which took effect March 31, 2008. The agreement kept him on retainer probably to advise how to deal with one of those bundles if it went bad and no one else could figure out how to keep it out of default. Notice that his consulting contract lasted only for the rest of 2008.

(3) The managers were working themselves out of a job. Without substantial incitement, they were going to immediately be looking for new employment someplace where their skills had a long term future. That was not AIG But someone who knew what was in the bundle had to be on hand <i>every trading day.</i>. Those managers had AIG over a barrel.

(4) Remember also that the contracts were created and signed in January 2008. Everyone, and I mean everyone, was expecting the economic downturn to last another six months and then turn around. Then the economy instead got continually worse into this year. The worsening of the economy has been a direct result of the failure of the government to act to protect the banking system, something none of the financial operators believed then was necessary. The market was supposedly self-correcting without government interference/management. The events in the Fall of 2008 were completely unforeseen, and to true free market believers (all of the top people on Wall Street), unforeseeable.

 (I myself didn't start predicting Depression-level collapse until February 2008 and I was one of the early ones. I also didn't predict Obama's response, which MAY have staved off a real Depression IF the banking system has been saved. Jury's still out on that.)

(5) Were the employment contracts drawn badly? In hindsight, probably, and Liddy specifically stated that he would not have written them the way they were written. Considering how little was understood at that time about the overall systemic financial problems the top AIG people were pretty clearly muddling through as best they could. Overpaying a few people to avoid the massive losses defaults of those bundle contracts when the economy was oprobably going to be improving again when those contracts were completed and paid off would probably have cost a few extra dollars here and there to keep those managers doing their day to day work and staving off the immediate defaults. I don't doubt that it seemed a good bet and  was probably considered worth it. Remember, Liddy did not come on the scene until September. By then a lot more was known and the risks were a lot more clear.  The managers who wrote those contracts were already being replaced by September.

Generally I think I buy Liddy's explanation given Congress today. As I say, Liddy's explanation does explain the currently known facts, including why Treasury (including Geithner) and Larry Summers apparently signed off on paying those bonus payments some weeks ago before anyone realized the hash the media was going to make of the story.

Given the facts as I think I currently know them, and assuming good faith on the part of Liddy (I don't think he is a tobacco ececutive),  I'd say that the AIG execs really did get rid of the bad apples (the Milken protoges) back in the first quarter of 2008 and are peddeling desperately to get AIG totally out of those contracts as rapidly as they can without destroying AIG and the banking system.  Knowing what was learned by last Fall, the government bailout was needed, but if the bundles are well-managed, the taxpayers really are very likely to get their money back and maybe even make a profit.

There are, however,  three groups who are not going to believe this explanation, no matter what. The reason is  cynicism, ignorance of finance, and self-interest. 

Those three groups  are (1) the Republicans, (2) the right-leaning Bush-supporting media, and (3) the cynics who don't speak enough "Finance" to understand what Liddy told them today. That third group includes literally every reporter writing on the subject. Rush Limbaugh won't believe it for all three reasons.

The Republicans probably don't understand it, but even if they do, they don't want to. Darrly Issa? Give me a break. As a group they have here an issue they can ride to the next ballot box. As they have demonstrated with their absolute opposition to anything Obama does, they think they can win through tearing Obama down, and this issue is great for that. Limbaugh can't demagogue acceptance of what Liddy said, and besides the right-wing authoritarians he leads wouldn't accept such a story from him.

Then the public in general will not buy anything except a simplistic explanation, preferably one with clearly defined characters in white and black hats. They want heroes and villains,and they won't buy experts, technicians or bankers as heroes. This is too much inside baseball with technical language that takes a while to assimilate. Who trusts an expert or a banker today?

Finally there are the right-leaning media still pining for Bush/Cheney in office. First they don't understand what they are being told, and second they are looking for the new "Terry Shiavo - Dead White Girl - OJ Simpson" scandal that THEY can ride to the advertisement sales. Accepting Liddy's explanation takes all that away from them, adn no reporter is going to ride to Glory and a Pulitzer by accepting that Liddy knows what he is talking about, especially when there is so much opposition to accepting it already in the media.

Shuja Nawaz writes in the Washington Post that the Mumbai terror attack appears to be likely to derail the recent moves towards a rapprochement between the governments of India and Pakistan. A number of other news reports echo this. But is this apparent common wisdom in the press accurate?

Pakistan has a new government in place since last April, and the terrorists in Pakistan have been attacking there also. Most noticeable was the recent bombing of the Marriot Hotel in Islamabad in September. Both Pakistan and India have suffered numerous smaller terrorist attacks in recent years.

Terrorism is a form of asymmetric warfare. It is being used by Political practioners of Islamism to take down both the governments of Pakistan and India.

The first function of every government is to provide social stability. It is this function of providing a stable society that terrorists use to attack and delegitimize the existing government. The purpose of the terrorism is to weaken the government to the extent that it is forced to accommodate the otherwise unacceptable demands of the terrorists and possibly even to allow the terrorists to take the government over.

The governments of both Pakistan and India are under direct, violent attack by an alliance of terrorist groups often working together. Such attacks do not always delegitimize a government. Sometimes attacks like that in Mumbai and the earlier one on the Marriot in Islamabad can strengthen a government as people and organizations which otherwise would be competing with each other rally around the government to protect the nation. The single greatest failure of the Bush administration was to squander the opportunity to rally all Americans and much of the world around the American government after 9/11.

The attack on Mumbai is very probably an effort to derail the recent efforts of both the Pakistani and the Indian governments to reach a rapprochement. The Mumbai terrorists appear to have started their attack from Karachi, Pakistan, hijacked a boat, and come into Mumbai from the sea. The Pakistani Inter Services Intelligence (ISI)has elements which have supported terrorist organizations which attacked India trying to dislodge Indian control of the disputed Indian state of Kashmir. Similar ISI elements appear to be supporting the Taliban in their efforts to retake control of Afghanistan. Pakistan's government clearly does not control all the territory that is generally internationally agreed to be part of Pakistan, nor does it control all the elements of the government itself. It is exactly the type of poorly controlled nation and unstable government most susceptible to the pressures that the terrorists are applying.

The current President of Pakistan, Asif Ali Zardari, has been trying to gain greater control over the ISI and remove it ant the military from active politics since becoming President in April. He recently disbanded the political wing of the ISI which is reported to have spied on Pakistani politicians in order to intimidate them and rigged national elections. This follows his earlier failed attempt to place the entire ISI under the control of the Minister of Interior instead of under the control of the military.

Zardari's recent efforts to reach a rapprochement with the India government may be in part an effort to lower tensions between the two nations so that the Pakistani people will feel less need for the Army to take over the government again as it has numerous times in Pakistan's 60 year history. If tensions with India are lowered, then Zardari has a better chance to take control of the uncontrolled parts of Pakistan like North and South Waziristan, provinces in which the indigenous people are supporting the Taliban and al Qaeda.

It would be no surprise to learn that the Mumbai terrorist attack was a push-back against Zardari's efforts to rein in the Pakistani military and the ISI.

If that's the case, then the government of India needs to help strengthen Zardari's government by not threatening Pakistan and instead working towards the rapprochement. Threatening Pakistan will have the perverse effect of strengthening the Pakistani military and weakening the civilian government. It is the general weakness of the Pakistani government which is the greatest threat to both India and Afghanistan.

Both the governments of India and Pakistan need to highlight their shared need to defeat the terrorist attacks by the groups which have been attacking them. By showing that they are fighting a shared enemy, they can take advantage of the "rally around the attacked government" effect.

By showing their respective publics that each government is under attack and is asking the help of the other to help defend itself from attackers based in the other's territory, it will become more difficult for the terrorist groups to appeal to the people with a claim that their respective government is being propped up as a puppet by an outside government. It is this appearance of being an outside government propping up an unpopular local government that will be the greatest restraint on any U.S. involvement in the rapprochement between those two nations. No government today wants to appear to be a puppet government supported by the U.S.

This looks like a useful strategy for strengthening the existing governments in South Asia and making them more resistant to the kind of terror attacks that have recently occurred in both Mumbai and in Islamabad. Neither nation can accept that the other is providing a place to launch terrorist attacks on it, either with or without government support. An effective rapprochement between the two governments can give both of them assurance that the other government is not directly supporting attacks, while the strengthening of both governments so that they are able to minimize rogue elements and control their territory will allow the each government to have greater trust in other. The overall result will be to bring about the stability that is always the first function of government.

The Mumbai terror attack, likely intended to drive a wedge between the governments of India and Pakistan to weaken them both, could have the perverse effect of drawing the two national governments closer together and strengthening them both. But as Bush's total failure to use the world-wide desire to help America after 9/11 clearly demonstrates, the direction public opinion takes depends a lot on how the governments of Pakistan and India act.

Alabama Senator Richard Shelby is fighting hard against any bailout for the automotive agency as hard as he can. Instead of a bailout he proposes that they go through bankruptcy.

Of course, The <a href="http://www.edpa.org/industries/automotive.html">automotive industry in Alabama is owned by Mercedes Benz, Honda,  and Hyundai.</a> There are no American automotive companies there, so he doesn't give a rat's ass about Detroit. They're his competition. So he is happy to see them go into bankruptcy.

But wait! If they go into bankruptcy, who buys their assets? It appears that the best positioned candidate to buy Detroit is -- the Chinese. <a href="http://emptywheel.firedoglake.com/2008/11/19/playing-chess-with-the-chinese/">EmptyWheel</a> thinks so too. She quotes from <a href="http://www.thetruthaboutcars.com/breaking-news-chinese-may-buy-gm-and-chrysler/">Bertel Schmitt</a>: <blockquote>"Chinese carmakers SAIC and Dongfeng have plans to acquire GM and Chrysler, China's <a target="_new" href="http://www.21cbh.com/">21st Century Business Herald</a> reports today. [Snip]

The paper cites a senior official of China's Ministry of Industry and Information Technology- the state regulator of China's <a itxtdid="7271913" target="_blank" href="http://www.thetruthaboutcars.com/breaking-news-chinese-may-buy-gm-and-chrysler/#" style="border-bottom: 0.075em solid darkgreen ! important; font-weight: normal ! important; font-size: 100% ! important; text-decoration: underline ! important; padding-bottom: 1px ! important; color: darkgreen ! important; background-color: transparent ! important;" classname="iAs" class="iAs">auto</a> industry- who dropped the hint that "the auto manufacturing giants in China, such as Shanghai Automotive Industry Corporation (SAIC) and Dongfeng Motor Corporation, have the capability and intention to buy some assets of the two crisis-plagued American automakers." These hints are very often followed with quick action in the Middle Kingdom. The hints were dropped just a few days after the same Chinese government gave its auto makers the <a href="http://www.thetruthaboutcars.com/china%E2%80%99s-nine-measures-to-fight-export-malaise-or-make-that-eight/">go-ahead to invest abroad</a>. And why would they do that? <p><span id="more-156041"></span></p> <p>A take-over of a large  overseas auto maker would fit perfectly into China's plans. As reported before, China has realized that its export chances are slim without unfettered access to foreign technology. The brand cachet of Chinese <a itxtdid="7271916" target="_blank" href="http://www.thetruthaboutcars.com/breaking-news-chinese-may-buy-gm-and-chrysler/#" style="border-bottom: 0.075em solid darkgreen ! important; font-weight: normal ! important; font-size: 100% ! important; text-decoration: underline ! important; padding-bottom: 1px ! important; color: darkgreen ! important; background-color: transparent ! important;" classname="iAs" class="iAs">cars</a> abroad is, shall we say, challenged. The Chinese could easily export Made-in-China VWs, Toyotas, Buicks. If their joint venture partner would let them. The solution: Buy the joint venture partner. Especially, when he's in deep trouble.</p> <p>At current market valuations (GM is worth less than Mattel) the Chinese government can afford to buy GM with petty cash. Even a hundred billion $ would barely dent China's more than $2t in currency reserves. For nobody in the world would buying GM and (while they are at it) Chrysler make more sense than for the Chinese. Overlap? What overlap? They would gain instant access to the world's markets with accepted brands, and proven technology."</p></blockquote>Who holds the most dollar-denominated US federal debt? China? Where are dollars most spendable? The U.S. Where can the Chinese get the best bargains in the dollar world? The U.S. Especially if the three U.S. automotive companies are sold at fire sale prices in a bankruptcy.

There are three million American jobs built around the U.S. automotive industry. Do we want them controlled by China? Frankly I really don't.

But apparently, Senator Richard Shelby, who has no problem with the Germans, Japanese and South Koreans owning the automotive industry in the backwards southern state of Alabama has no problem handing the entire U.S. Automotive industry as cut-rate goods to the only foreigners who have enough money to buy it.

I'll agree that the top management of the U.S. Auto industry need to be replaced and the industry needs to be restructured further (they've already moved a long way towards becoming more efficient), but definitely not by Chinese Communists.

Do we really need a bail out deal? <a href="http://www.mcclatchydc.com/227/story/53107.html">Not according to economist James K Galbraith.</a> <blockquote> President Bush and his Treasury secretary, former Goldman Sachs chief executive Henry Paulson, have warned of imminent economic collapse and another Great Depression if their rescue plan isn't passed immediately.

Is that true?

"It's more hype than real risk," said James K. Galbraith, a University of Texas economist and son of the late economic historian John Kenneth Galbraith. "A nasty recession is possible, but the bailout will not cure that. So it's mainly relevant to the financial industry."</blockquote>It's sort of a strange crisis. The banks will currently lend to credit card customers and to consumers, but they won't lend to other banks. So Henry Paulson is asking Congress to tax every American over $2,000 just to bail out the wealthiest bankers in the world. But those superwealthy bankers are in trouble because their fellow bankers are either so stupid or are are such disreputable crooks that other bankers  don't trust them  enough to loan them money.

<a href="http://en.wikipedia.org/wiki/Henry_Paulson">Henry Paulson</a> presented "the Paulson proposal" to Congress in his own name because Bush is so unpopular that presenting it as the Bush Proposal would be a major strike against it. But Henry Paulson is the ex-Chairman of the last of the five largest financial banks, <a href="http://en.wikipedia.org/wiki/Goldman_Sachs">Goldman Sachs</a> to disappear since this Spring. Paulson is not an economist. He has a Harvard MBA. He's primarily a securities salesman. His job has always been to make deals. Someone else was the analyst who explained the overall system. (I know it's not "either/or", but Paulson is still primarily a deal maker.) Paulson is watching the investment banks which have been his career disappear. Sure he wants them saved. But should the rest of American society have to pay to save them? Those banks haven't added that much value to the American economy. $700 billion dollars? And that's just the down payment?

Buying the bad mortgages from the banks simply does not address the central problem. Millions of families have signed crappy mortgages in order to severely overpay for homes. Now Bush/Paulson demand that the taxpayers buy those crappy mortgages at the  inflated prices to keep the banks from having to take the loss that was built into those mortgages when they were issued. Making the taxpayers buy those crappy mortgages  <b>does not address the core problem!</b> It just removes those mortgage contracts from the banks that created them and forces taxpayers to buy them. That allows the banks to avoid taking the loss that was built into the overpriced mortgages when the banks first issued them.

The banks do not want to take the loss when home prices drop to realistic levels. That's why the bankers are calling the proposal that Bankruptcy Judges be allowed to rewrite mortgages to realistic interest rates, realistic payments and total values that reflect what the market will pay for the property. This is a power that the judges already have for second homes and yachts, but the banks consider that provision a deal-breaker for any Congressional bail out legislation.

The core economic problem causing the credit crisis and the bank failures is that the housing bubble (created by Alan Greenspan's Federal Reserve) caused massive overpricing in homes and real estate loans. That real estate was financed by loans that banks made to individuals and businesses who were not going to be able to pay them if the housing bubble burst.  When Greenspan raised interest rates after Bush was reelected in 2004, he burst the housing bubble he had created by lowering interest rates and encouraging bad loan underwriting before the 2004 Presidential election.

A banker who lends money to someone who can't pay it back deserves to fail. Instead those bankers are being allowed to foreclose on the overpriced property, regain ownership and then resell it. But the bankers can't finance that operation unless the other bankers lend them more money, and the other bankers have decided that they don't trust the ones who want to borrow money enough to lend anything to them. Apparently these bankers have suddenly gotten "banking religion." They won't lend money to other bankers who don't look like they can pay the loans back. If the mortgage bankers had been competent and acted the same way, <b>there would not have been a housing bubble!</b> No housing bubble, no credit crisis. There is the cause of this whole mess.

So now the Bush administration wants to tax all of us to bail out the crooked and stupid bankers because if the government won't kick in the money, the bankers themselves don't trust the other bankers enough to lend them money.

Now we get a tag-team match of Henry Paulson going to Congress to tell them "This is a limited time offer! If you don't buy it NOW I can't guarantee your safety tomorrow!" while George Bush went on TV and told the American public "Get Congress to pass this bill NOW or the disaster cannot be prevented!" That's a tag-team match between a salesman, Paulson,  urging everyone " Buy now!"  and a habitual liar and fool, Bush,  saying "Trust me!"

There is going to be a recession. There already is one, but I suspect that the economic statistics published by the Bush administration have been "adjusted" or "fudged" to look better than they really are. No matter what legislation passes, the Recession is going to be a bad one. But the warnings of an economic meltdown are excessive.

Congress needs to take its time and get the bail out legislation right. Most importantly, the bankers who caused this credit crisis must not be rewarded for their stupidity and greed. Especially they must not be rewarded out of taxpayer funds. Any time a sales person/scammer says "You have to buy this NOW or you will lose it!" the best decision is always to walk away.

If there is a decent deal to be made, the salesman will come back to make a reasonable deal. If there is not a reasonable deal to be made, then walking away is the right solution.

Which is going to dominate the closing sprint to election day? The propaganda-based theme-driven Washington political media or the currently growing journalistic feeding frenzy surrounding Sarah Palin and spreading to the McCain campaign?

 

Bush has pulled even or ahead this last week largely because of

 

1. the normal convention bounce.

2. the novelty of choosing Sarah Palin as his running mate.

 

The bounce was extended because Palin permitted the Social Conservatives to abandon their objections to McCain and buy into him as their "leader." The excitement of the Social Conservatives has fed back into the McCain campaign and the campaign is doing whatever it takes to extend that process even further, hopefully for another eight weeks.

 

But the Palin choice was high risk with low vetting and no broad consensus that she could carry as heavy a load in the campaign as has been thrust on her. The secrecy of her selection and announcement was bought at a very high price.

 

Everything now has to focus on shoring her and the social issues she represents up as the central focus of the campaign. It's like shoring up a badly damaged building the inspectors have already declared totaled. That's where all the lies are coming from. They know so little about her that there are no prepackaged defenses for the various faults that keep popping up. So they are reduced to making stuff up.

 

But they are stuck with her, since without Palin the McCain campaign is reduced to explaining why they do not represent four more years of Bush/Cheney. That is clearly a losing position as the recent switch to a campaign theme of "We're for change also." demonstrates.

 

It doesn't help any that the choice of Pain as his running mate is an admission that to get elected President McCain has had to completely surrender to the Republican extremist religious right. The McCain camp has to "dogwhistle" to the right-wing religious extremists in ways that the independents don't catch on to.

 

This is complicated by the fact that the McCain campaign has been unable to roll Palin in under the McCain media themes to protect her. The media really is treating her differently from the way they treat the already "well-known" McCain. By "well-known" I mean that the media already has an accepted set of themes to apply to McCain. Those themes have simply not spread to Palin. 

 

I'd speculate that the McCain camp has been shocked to find that they could not just roll Palin in under the protection of the McCain media themes. But she made too big a splash with her selection and acceptance speech for that to be possible. The news audience wants details and the media (those not tasked with the propaganda function of defending her - FOX, etc.)are trying to meet the audience demand.

 

Now the declining elements of the media who consider themselves to be non-propaganda journalists have found enough blood in the water to begin the journalistic equivalent of a shark frenzy. To counter that the propaganda elements of the media and the McCain campaign are throwing out everything and anything that might tamp down the journalistic frenzy. It's desperation. That's the source of the lying. They have eight weeks and they are in the sprint to get past the finish line before they are buried by their lies.

 

I don't think it is going to work. The same journalistic norms of going along with the pack that make the media themes such a powerful a way to avoid contradictory new information are now beginning to work in reverse. Those norms are escalating the journalistic frenzy.

 

So in the next eight weeks, the real question is which is going to dominate the media? Will it be the journalistic pack frenzy or will the theme-driven propaganda media be able to regain control?

 

In many ways the fate of America and of the world depends on the answer to that question.