What's the Administration's specific aim in bailing out GM? I'll give you my theory later.

For now, though, some background. First and most broadly, it doesn't make sense for America to try to maintain or enlarge manufacturing as a portion of the economy. Even if the U.S. were to seal its borders and bar any manufactured goods from coming in from abroad--something I don't recommend--we'd still be losing manufacturing jobs. That's mainly because of technology.

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Put on your seatbelts. Many Republicans have been itching for this fight. They figure if they can make Sonia Sotomayor appear "too liberal," "too activist," or "intemperate" -- and cause Obama to withdraw her nomination, or if they can defeat her outright -- they can slow the Obamomentum that's leading to universal health care, cap-and-trade, more spending on education, and higher taxes on the rich. This would also give them a crack at winning back a number of seats next November, which they know they can't win if their major issues are torture and taxes and if their major spokesmen are Dick Cheney and Rush Limbaugh.

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During the presidential campaign, I thought Obama made only one big policy mistake. He criticized John McCain for proposing to tax all employer-provided health benefits. McCain’s overall health plan was regressive – he would have turned the savings into tax credits for purchasing health care – but he was right about where the revenues should come from. I worried that Obama would come to regret the position he took.

Half a year later, it appears that the President will need to tax employer provided health benefits in order to finance universal health care. Or at least the tax-free benefits now enjoyed by higher-income employees. Many in Congress and in the White House are convinced it’s the only good option. Max Baucus, chair of Senate Finance, expliticly put it on the table last week. Peter Orszag, the President’s budget director, has told Congress the option should remain on the table.

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