Thursday, November 20, 2008


My senior year of college, Dinesh D'souza, resident of the loony-bin Hoover Institution at Stanford University, spoke about Iran at a lecture funded by the Young Republicans Club. He presented a torqued image of the nation in which a fascistic president led squadrons of young Iranians into gainful employment as suicide bombers and future executioners of The Great Satan. I worry that is still how many Americans see Iran, too. I want to talk about Iran in a fashion similar to how I addressed Afghanistan and Pakistan.

The 1950's

How Iran got to where it is today would also require 6,000 years of history that I'm not going to go into. But I do want to go back to 1951. In 1951, Dr. Mohammad Mossadegh was elected Prime Minister of Iran. Mossadegh was a Western educated leader; he'd attended the Sorbonne and a graduate university in Switzerland. In Iran, he became Prime Minister on a platform of democratic reform and, most significantly, nationalization of Iranian oil and revenues.
Since the discovery of large oil fields in Iran in 1908, the British owned Anglo-Iranian Oil Company controlled Iranian oil. As the British were want to do, they worked the Iranian's who tended their drilling/processing infrastructure hard, paid them little, and shared few of the profits. In an address shortly after his election, Mossadegh stuck this bit in the collective British eye:

"Our long years of negotiations with foreign countries… have yielded no results this far. With the oil revenues we could meet our entire budget and combat poverty, disease, and backwardness among our people. Another important consideration is that by the elimination of the power of the British company, we would also eliminate corruption and intrigue, by means of which the internal affairs of our country have been influenced. Once this tutelage has ceased, Iran will have achieved its economic and political independence. The Iranian state prefers to take over the production of petroleum itself."

Foolish Mossadegh. He thought his country was entitled to the profits from a natural resource located within its borders. But, as the relentless pursuit of profit is the White Man's Burden, the British felt obliged to end Mossadegh's experiment with democracy. So the British enlisted the aid of the United States and its new Republican administration (Eisenhower) by "convincing" us that Iran was drifting towards communism and the Soviet Union.

Eisenhower handed the thing off to the CIA and eventually a confluence of events including; a defacto oil embargo that shut down Iranian oil sales; a CIA propaganda campaign against Mossadegh in Iran; a statement by the Shah of Iran that declared his support of a coup against Mossadegh; and the inability of Mossadegh to enact any reforms due to a dearth of oil revenue, resulted in a succesful coup that left the Shah in power and oil money in British/American pockets. Close one.

Of course all this ended with far more downside than upside for the West as, 25 years later, Iranians nonplussed by the rule of the puppet-Shah carried out that whole 1979 Iranian Revolution and taking of hostages at the US Embassy thing leaving us with the Ayatollah-led leadership we have today.

So if you want to trace the roots of our standoff with Iran back to a seminal turning point, I would say the American-British coup that deposed Mossadegh is that point. In 1951, Iran was led by a secular, progressive prime minister with a Western education who hoped to enact democratic reforms. What are we hoping for in Iran today? I forget...


Demographically speaking, we have every reason to engage Iran diplomatically and not militarily. From Wikipedia: "More than two-thirds of the population is under the age of 30, and the literacy rate is 82%. Women today compose more than half of the incoming classes for universities around the country." This is a country with a young population that we have the ability to work with or fight against. We can win them over.

Iran's president, Mahmoud Ahmadinejad, is a nut, yes. But when we call him a new Hitler, or some such bullshit, we prop up his standing internationally to an extent he does not enjoy in his own country. Ahmadinejad is powerless in Iran. He enjoys the support of the Supreme Leader Ayatollah Ali Khamenei, but if that support wanes, then so does Ahmadinejad. All indications are, Ahmadinejad is in rough shape in-country.

The Economist published a piece on Ahmadinejad's tenuous political situation yesterday. They wrote: "Iranian economists have taken to bombarding the president with letters excoriating his policies. In the most recent, 60 academics accuse his administration of 'excessive idealism, haste in action… and tension-creating interaction with the outside world'. Iran has underperformed its neighbours in growth, lost competitiveness and failed to tackle high unemployment, the letter says."

Iran's economy is pegged to oil trading at $80/barrel and, just like Russia, their economic outlook has gone from "Solid" to "Screwed" now that oil is below $50/barrel. Iran holds presidential elections in June of 2009. If oil prices stay low, and Ahmadinejad is unable to turn the economy around (he's never seemed to have much economic prowess, just luck with high oil prices) then Ayatollah Khamenei may see the incumbent as a liability and throw his support behind someone else (or no one). One of the possible candidates is reformist Seyyed Mohammad Khātamī who served as president from 1997 - 2005 and is far more moderate than Ahmadinejad.

American Options

Barring any significant developments in the geopolitical climate in/around Iran, I don't see any reason why Obama should rush a sit-down with Ahmadinejad - or whoever is the president - until after the June elections. It will be more difficult for Ahmadinejad with, presumably, a far less bellicose administration in the United States, to prop up his popularity with anti-American rhetoric. The less we give him to grab onto, the less he is able to make us the boogeyman, inflate his own ratings, and distract Iranians from their weak economy and high unemployment. Bluster works against us.

With Obama, a military strike led by the US seems less likely barring some fanatical move by Ahmadinejad in which he forces the military to do something on his orders and not Khamenei's (not likely). Obama will not be able to sway Iranian opinion, I wouldn't think, but if he tacitly advances a sentiment that he's not meeting with the Iranian leader until after the election, it might help to get the world and Iranians anticipating that Ahmadinejad won't be around much longer. Then again, if Ahmadinejad wins, that plan might backfire.

The real threat to a good future with Iran is Israel. Israel does not want another country in the region to hold the ace card of a nuclear weapon. I think Israel will wait until the elections in Iran are over before making any big decisions, but it was only a couple months ago that Israel was at the brink of war with Iran. Ehud Olmert was in the midst of his scandal and went to Bush for the green light to bomb Iran's nuclear facilities (wag the dog-like - distract from your impeachment proceedings with a good ol' bombing run or 200) but Bush said no-go, thankfully.

As for the absurd, I'm-on-acid-and-hallucinating-this-shit scenario advanced by Tim Russert in the video in my previous post - a scenario that he was/is not alone in thinking possible - in which Iran invades Israel... It's total bunk. Forget it, throw it out, don't acknowledge it, smack anyone who takes it seriously in the face until they talk sense. As Ron Paul said, Israel has 300 nuclear weapons. No one is going to touch them. The best Iran could hope for is a nuclear weapon that they could smuggle into Israel and detonate. Even so, all fingers would immediately point to Iran and they'd wind up wiped off the map. If they launched a weapon, they'd be wiped off the map. If you think that Iran is run by apocalyptic muslims trying to hasten the return of the Twelfth Imam, then run wild with that theory. But Ahmadinejad is not apocalyptic. He just wants money, power, and to stand up to the bully Americans.

An attack on Iran by us or the Israelis would be a tragedy. Iran is a country of 70 million people that we can deal with through diplomacy. There is absolutely no reason that every ounce of our effort towards Iran should not go into convincing the 40+ million people under 30 years of age that a working relationship with the Western world is both a real possibility and a valuable one for both of us. Of course, we have history against us - thank you very much Dulles brothers, Eisenhower, and 1950's British Petroleum incarnation - but fortunately we have the most ahistorical American president we've ever seen.


On December 23 of 2007 Ron Paul was interviewed by Tim Russert on Meet The Press. Russert promptly dove into his bucket of hypothetical questions and Ron Paul, in the first ten minutes of that interview, provided the best deconstruction of American political "journalism" I've seen.

Usually, interviewees who are combative with this style of hypothetical-question-laced interview, which is pervasive in America's televised political coverage, fare poorly. They are forced to play the game - or risk looking evasive not answering - and respond to such facile questions as Wolf Blitzer's raise-your-hand-yes-or-no at one of the debates during the Democratic primaries: “The United States should use military force to stop the genocide in Darfur."

Chief amongst these hypothetical wizards was NBC Washington Bureau Chief, Tim Russert. Russert's tactic was to lock politicians into positions on subjects which were amorphous and protean; positions that the subject would likely have to change if he or she gave a definitive answer thus allowing Russert to call them on their flip-flop at a later engagement on Meet The Press. Take, for instance, this question posed by Russert to Obama at a primary debate: “Will you pledge that by January 2013, the end of your first term more than five years from now, there will be no U.S. troops in Iraq?” Obama played it well saying it would be "irresponsible" to make predictions about something five years in the future. To Russert, though, that was evasive.

In the Russert-Paul interview, the first hypothetical question, and Paul's first great moment, comes at about the 4 min 25 sec mark. Paul has been talking about eliminating the income tax and making up for the lost revenue by bringing home the 500,000+ US troops stationed around the world in places like Korea, Europe, etc. Russert asks if, under a Ron Paul presidency, the United States would invade if North Korea attacked South Korea. Paul handles this one civilly by noting that we have been more of an obstruction to Korean reconciliation than an aid. Paul mentions Vietnam and our exit "under the worst possible circumstances" which led to a reconciled Vietnam that is now a major trading partner with the United States.

The real jem of the interview is at about 5 min 15 sec. Russert asks, "if Iran invaded Israel, what do we do?"

Paul responds: "Well, they're not going to. That is like saying 'Iran is about to invade Mars.' I mean they have nothing, they don't have an army, a navy, an air force, and Israelis have 300 nuclear weapons, nobody would touch them. But no, if it were in our national security interests and Congress said, 'this is very very important, we have to declare war.' But presidents don't have the authority to declare war."

Not only does Paul debunk a scenario which has a whole lot of respect in the United States and most people would probably, actually, consider a plausible scenario, he also points out Russert's support of Bush-style executive power when he says that presidents do not have the power to declare war. This might seem a minor point, but it is not. The idea of the almighty executive is so ingrained in the American mind after eight years of preeminance of David Addington's revised "theory of the unitary executive" that journalists, interviewers, many amongst the press, take it as a given. To make a point that George Orwell made in "Politics and the English Language" - "the slovinliness of our language makes it easier for us to have foolish thoughts." Like accepting the Bush doctrine that presidents can wage war unilaterally.

Russert is dead, of course, so he's not asking anymore of these questions, but plenty of his compatriots are picking up the slack. This brand of questioning has to end. Paul was able to blow Russert's model up in his face because of the liberty afforded an outsider candidate to say what he or she thinks without the risk of losing an election they'd already had no shot at. But mainstream candidates often do not push back hard enough. Neither Obama, nor Clinton, nor McCain put their foot down Paul-style while they encountered wave after wave of foolish questioning, preferring instead to preserve their wiggle room and play the game to the smallest extent possible.

Like Kenneth from "30 Rock" said, "I don't believe in hypothetical situations... that's like lying to your brain."

Wednesday, November 19, 2008

Run Through

--> It'll be nice to have Tom Daschle back in government as Secretary of Health and Human Services after the Republicans ran him out in 2004 while he was the Democrats' leader in the Senate. Wish that had happened to Mitch McConnell this year. Tom will be in a position to lead on health care reform from that spot.

--> I guess the Clinton thing is still up in the air? I dunno. Bill's being vetted carefully and I haven't heard much about the other candidates for Secretary of State - Bill Richardson, John Kerry, Richard Holbrooke, et al. Jon Stewart makes a, um, good point on Clinton being Secretary of State, though...

Well, we'll see. I'd still prefer Richard Holbrooke. Some people are keen on John Kerry, but I just couldn't tolerate that. I don't know why, I just can't take him seriously anymore (though not as unseriously as Bill Richardson).

--> Also - more good news! - Ted Stevens is down the tubes!

--> On the Joe Lieberman front - I'm still less upset with Lieberman for being Lieberman than I am with my birth-state of Connecticut for not electing Ned Lamont in 2006 (since when don't you people love a Greenwich businessman??) - I support Obama's reconciliation with Lieberman. This is a trend with Obama; your friends close, your enemies closer. Yeah, Lieberman's a jerk, but he's not a big enough jerk to be worth the effort to kick out and banish from the caucus. This move by Obama basically says, it's ok, you can come back, you're not worth the effort it would take to wipe you off the bottom of my Bruno Magli's. I like that attitude. Nate Silver has a terrific piece on this as well.

Transportation Whoopee Part II

Via Paul Krugman, I recently read Jonathan Cohn's piece in the New Republic in support of a bailout for the Big Three. I've been having a difficult time deciding where I fall on this issue; part of the reason I asked Will to write the previous piece on the auto industry bailout was to get some information to clarify my own views. From the beginning, I've tended to side with a bailout because the facts of bankruptcy - job loss of a half-million to two million and the loss of work and infrastructure already in place - seemed much more costly than a bailout with the right strings attached. What hung me up was how, and whether, it was possible to attach the right strings to such a bailout. As Will wrote:

"If the government injects capital as equity, and takes part ownership of GM, does anything really change, or does GM just get a whole bunch more money to burn through? This is a serious concern, as GM (and the rest of them) have been burning through cash like a California wildfire this quarter. If the government takes an equity stake, how does it ensure that GM will use that capital to retool factories and designs to make more efficient cars? What if oil keeps going down and SUVs become the rage again, but GM cannot compete with other companies because the Government told them they can't."

I've now settled on supporting the bailout for the Big Three. The prospect of such massive job loss is probably enough to support the bailout, but I guess I wanted a little more convincing. If the most dire predictions are right - job loss in the three million range with a Chapter 7 declaration - then the midwest is going to look a whole lot worse very quickly and it already is a mess. Cohn's solution below:

"A better solution [thank bankruptcy] would be another government bailout--albeit one with lots of conditions attached. Those conditions would include limits on executive compensation, as in the Wall Street rescue, but also more specific requirements designed to push the Big Three toward greater innovation and fuel efficiency. The bailout might also require more concessions from the unions, perhaps over the relatively generous health benefits UAW workers enjoy. And it would probably mean cleaning house in GM's executive suites. (Vice Chairman Bob Lutz, a notorious skeptic of climate-change theory, should be the first to go.)"

If it is possible to construct the bailout in this fashion, then I'm for it. It sounds like a plan like that, which I think is what Obama's people have in mind, would leave room for a solution similar to what Will proposed:

"In my eyes, a better option would be essentially 'earmarked' financing. GM could turn to the government to provide favorable loans for specific projects that are aimed at diversifying product lines and creating more fuel efficient cars and a production system that mimics Toyota's. This way GM would essentially be forced to come up with socially benevolent solutions, because it cannot survive without government infusion, but the government does not tell them HOW to achieve these goals."

Monday, November 17, 2008

More on Afghanistan and Pakistan

George Packer published a question and answer session with David Kilcullen in The New Yorker this week on Afghanistan and Pakistan. Kilcullen served in the Australian military and is an expert on counterinsurgency and counterterrorism. He worked for David Petraeus while Petraeus was ramping up for the "Surge". The Q&A offers some good points on how to deal with Pakistan and why a "Surge" in Afghanistan wouldn't work. Also, check out the October 2007 interview of Kilcullen by Charlie Rose. More good info there. From The New Yorker:

"Pakistan is extremely important; indeed, Pakistan (rather than either Afghanistan or Iraq) is the central front of world terrorism. The problem is time frame: it takes six to nine months to plan an attack of the scale of 9/11, so we need a “counter-sanctuary” strategy that delivers over that time frame, to prevent al Qaeda from using its Pakistan safe haven to mount another attack on the West. This means that building an effective nation-state in Pakistan, though an important and noble objective, cannot be our sole solution—nation-building in Pakistan is a twenty to thirty year project, minimum, if indeed it proves possible at all—i.e. nation-building doesn’t deliver in the time frame we need. So we need a short-term counter-sanctuary program, a long-term nation-building program to ultimately resolve the problem, and a medium-term “bridging” strategy (five to ten years)—counterinsurgency, in essence—that gets us from here to there. That middle part is the weakest link right now."

Friday, November 14, 2008

Hillary Clinton as Secretary of State?

It's been a hot item for the past 24 hours. It first appeared, best I can tell, on Marc Ambinder's blog on The Atlantic's website and spread through Politico, AP, NY Times and on down to the hamster cage shredding-papers - The Post and The Daily News - where the story enjoys front page teaser status this morning.

As Ben Smith on Politico reports: "The absorption of the Clinton government in waiting represents Obama’s choice not to repeat what he and his advisors see as an early mistake made by the last two presidents: Attempting to wield power in Washington through an insular campaign apparatus new to town."

31 of the 47 appointments made by Obama to his administration are people who served in Clinton's administrations.

Of the people I mentioned last week in my Secretary of State rundown, I'd place Clinton as my second choice behind Holbrooke. But she's far and away better than anyone else on that list. I wouldn't be happy seeing Richardson, Lugar, Kerry, or Hagel as Secretary of State. Chuck Hagel would be a surprise and I don't think it will happen - I think he's probably slated for Secretary of Defense.

The only danger with Clinton is back-seat driving. That said, she knows world leaders and if Obama's stuck fiddling with Wall Street's shit-storm for the first year of his presidency, Clinton would be alright dealing with the world at large.

But this is all speculation, so assume it's hooey until otherwise notified.

Thursday, November 13, 2008

Just Asking

I want to repost this here because I think David Foster Wallace gets at the right idea about how we should approach terrorism. And it's not by shopping. This is from The Atlantic's 2007 "Year in Ideas"

"Are some things still worth dying for? Is the American idea* one such thing? Are you up for a thought experiment? What if we chose to regard the 2,973 innocents killed in the atrocities of 9/11 not as victims but as democratic martyrs, “sacrifices on the altar of freedom”?* In other words, what if we decided that a certain baseline vulnerability to terrorism is part of the price of the American idea? And, thus, that ours is a generation of Americans called to make great sacrifices in order to preserve our democratic way of life—sacrifices not just of our soldiers and money but of our personal safety and comfort?

In still other words, what if we chose to accept the fact that every few years, despite all reasonable precautions, some hundreds or thousands of us may die in the sort of ghastly terrorist attack that a democratic republic cannot 100-percent protect itself from without subverting the very principles that make it worth protecting?

Is this thought experiment monstrous? Would it be monstrous to refer to the 40,000-plus domestic highway deaths we accept each year because the mobility and autonomy of the car are evidently worth that high price? Is monstrousness why no serious public figure now will speak of the delusory trade-off of liberty for safety that Ben Franklin warned about more than 200 years ago? What exactly has changed between Franklin’s time and ours? Why now can we not have a serious national conversation about sacrifice, the inevitability of sacrifice—either of (a) some portion of safety or (b) some portion of the rights and protections that make the American idea so incalculably precious?

In the absence of such a conversation, can we trust our elected leaders to value and protect the American idea as they act to secure the homeland? What are the effects on the American idea of Guantánamo, Abu Ghraib, Patriot Acts I and II, warrantless surveillance, Executive Order 13233, corporate contractors performing military functions, the Military Commissions Act, NSPD 51, etc., etc.? Assume for a moment that some of these measures really have helped make our persons and property safer—are they worth it? Where and when was the public debate on whether they’re worth it? Was there no such debate because we’re not capable of having or demanding one? Why not? Have we actually become so selfish and scared that we don’t even want to consider whether some things trump safety? What kind of future does that augur?

1. Given the strict Gramm-Rudmanewque space limit here, let's just please all agree that we generally know what this term connotes—an open society, consent of the governed, enumerated powers, Federalist 10, pluralism, due process, transparency ... the whole democratic roil.

2. (This phrase is Lincoln's, more or less)"

Afghanistan and Friends

There's all sorts of mad darkness in the Afghanistan War. I'm totally, dismally, unsurprised how little MSM coverage the consequences of the war in that part of the world has received. I'm going to try to give an update here, which is basically as impossible a task as winning a land-war in Asia (glad we're not trying to do that) because I'm not going to recap five-thousand years of tribal history. But anyway, I'll give a status snapshot and then talk about options moving forward and what Obama seems to be thinking about in terms of strategy. Also, for a terrific analysis of this epic-fail clusterfuck, watch Frontline - The War Briefing (hat-tip to Ike). The first segment is posted below.


George Bush's policy towards Pakistan included billions of dollars in aide and pressure to fight Al-Qaeda and the Taliban in Waziristan. The Pakistani government - now led by the late Benazir Bhutto's husband, Asif Ali Zardari - is weak and its military intelligence agency, the ISI, harbors Taliban sympathies. Pushing the Pakistanis too hard, or continuing cross-border raids into Pakistan, delegitimizes the government further and fuels nationalist sentiments. If the government in Pakistan fails, it is likely the Taliban-friendly ISI would fill the vacuum and control the country's arsenal of 50+ nuclear weapons.

Fleshing Things Out:

The people Don Rumsfeld scoffed at for not being "good targets" for his smart bombs - the Taliban, Al-Qaeda, and the tribal warriors along the Afghanistan-Pakistan border - are bloodletting the United States.

Neither Alexander the Great, the British Empire, nor the Soviet Union have ever been able to quell the people that inhabit the border area of Pakistan and Afghanistan. Wrote former CIA chief in Pakistan, Milt Bearden, in the International Herald Tribune in March of 2004: "The Pashtuns... have lived on their lands without interruption or major migration for about 20,000 years. They know their neighborhood very well, and their men have been armed to the teeth since the first bow was strung. Their ancient code involves a commitment to hospitality, revenge and the honor of the tribe."
In Pakistan, North and South Waziristan constitute the majority of the territory in the Federally Administered Tribal Areas. There are about 750,000 Waziri living in North and South Waziristan. After the initial coalition invasion of Afghanistan in 2001, the Taliban and Al-Qaeda remnants fell back across the Pakistani border to Waziristan where, as outsiders and not native Waziris, they were less than welcome. The Taliban and Al-Qaeda murdered Waziri leaders who resisted their presence and now reside comfortably in the tribal area. Waziristan is now a base of operations for supplying fighters in Afghanistan and carrying out attacks in Pakistan.

Today, the Taliban and Al-Qaeda are moving not only toward the Afghan capitol, Kabul, where there was a suicide attack today, but also into Peshawar - a city of three million that governs the tribal regions of Pakistan and is a quick jaunt through the woods from the capitol, Islamabad. It was in Peshawar that an American aide worker was assassinated the other day. Attacks against the Pakistani government, as well as coalition troops in Afghanistan, are increasing. In September a suicide bomber detonated a massive truck bomb outside the Marriott Hotel in Islamabad, killing 53 people, shortly before government heads were to meet there.
Moving Forward:

Though Iraq gets all the attention and is sapping money from our treasury more quickly, Afghanistan is by far the harder war to win. Sucks, huh?

The $10 billion Musharraf received from Bush was meant to train Pakistani troops in counter-insurgency warfare. Instead, Musharraf used it to equip his army for a war with India, Pakistan's mortal enemy. The result is a military that may be suited for fighting the Nazis in Europe, but gets beat to a pulp by the cave-dwelling guerillas in Waziristan.

A continuation of the Bush policies will end in the collapse of the Pakistani government and a much larger problem than the one we have on our hands now. Had John McCain been elected, that outcome would have been assured. But it is certainly still a possibility with a President Obama.

Just a few days before the election, Obama said on MSNBC (not for the first time, I don't think), “the most important thing we’re going to have to do with respect to Afghanistan is actually deal with Pakistan. And we’ve got to work with the newly elected government there (Pakistan) in a coherent way that says, terrorism is now a threat to you. Extremism is a threat to you. We should — try to resolve the Kashmir crisis so that they (Pakistan) can stay focused not on India, but on the situation with those militants.”

India flipped out at the suggestion of this and told Obama to back off. India and Pakistan have had back-channel discussions on Kashmir lately and been less bellicose towards one another. I think it's possible Pakistan's government - meaning the Zardari contingent - would be happy to have Kashmir, and thus India, off their mind. But convincing the ISI is another matter. The ISI have collaborated openly with the Taliban and actually prefer that they are in control in Afghanistan as a guard against India. When Afghanistan's president, Hamid Karzai, allowed India to open embassies across the country, the ISI reacted by helping the Taliban bomb the Indian embassy in Kabul.

I think the real heart of this matter is the relationship between, and ability to project force by, the ISI and the Pakistani government. We can, and should, send aid to Pakistan that winds up paying for a hospital instead of a tank. But if the ISI is able to undermine Zardari at every step, collaborate with Taliban when helpful, and stand in a position to scoop up power if Zardari falls, then we'll never make any progress.

Every empire that has gotten itself tangled up in Waziristan and its tribal population has had to give up or died trying to win. I don't see any reason why we should expect a better outcome. Except we can't really afford to lose in this region. Iraq may not have had a single WMD, but Pakistan has fifty.

Russia Update

Keith Gessen, author of All the Sad Young Literary Men and co-founder of n+1 - the preferred journal of New York City's messenger bag class, wrote a piece for the London Review of Books on the state of the Russian economy. It is well done and I suggest checking it out for an idea of what Gessen, who's been living in Moscow for the past few months, is seeing and hearing in the Russian media, government, and economic apparatus. Basically, he supports my point that Russia is a whole lot of bark and not much bite (unless you're a tiny former Soviet bloc state of, oh, say, 4 million people) and the bark they have is mostly lubricated by high oil prices which are, ahem, plummeting. An excerpt:

"The Russians get to worry about other countries in crisis (the way they worried about Americans after 11 September, despite having a much more serious domestic terrorism problem), and meanwhile keep their money in the bank, and, most important of all, keep it in roubles. Because the rouble, for the moment, is the biggest problem facing the government. If oil prices fall too low and the rouble fails, as it did in 1986 (though this was kept secret) and in 1998, and if the coal miners go on strike again because they haven’t been paid and block the trans-Siberian Railway, savings will be wiped out.

This would be a national humiliation – something more destabilising to regimes, as the Putinists know, than mere economic collapse. A few weekends ago there were rumours that the rouble’s collapse was imminent, and the dollar started climbing away from the official rate at the independent currency exchange kiosks around town. Reporting on the rumours the next day, Kommersant quoted a banker saying that Russians had a ‘genetic’ memory of 1998, and were being told, by their genes, to go and buy dollars. Except the truth is that Russians have an actual memory of 1998. Even I have an actual memory of 1998....

What would it take for this regime to stumble? People have been saying for a long time that Putin will not be tested until oil prices fall. Now oil prices are falling, and Putin-Medvedev are mostly blaming the United States and stoking up anger at Ukraine’s president. If oil prices keep falling, their magnificent cash reserves – $500 billion before the current crisis – could, in a country of 140 million people, turn out to be less handy than they’d thought."

Wednesday, November 12, 2008

Rush to Rushmore

A Health Care Mandate

From Paul Krugman:

"But now Max Baucus — Max Baucus! — is leading the charge on a health care plan that, at least at first read, is more like Hillary Clinton’s than Barack Obama’s; that is, it looks like an attempt at full universality. (The word I hear, by the way, is that Obama’s opposition to mandates was tactical politics, not conviction — so he may well be prepared to do the right thing now that the election is won.)"

Gotta say, if Obama's posturing on mandates was in fact a ruse, he had me fooled. Here's the key line from the Times article on Baucus' plan today: "The proposals are all broadly compatible with Mr. Obama’s campaign promises. But Mr. Baucus’s 35,000-word plan would go further than Mr. Obama’s in one respect, eventually requiring all people — not just children — to have coverage."

Obama gave standard platitudes to Baucus and his plan saying he looked forward to working with him and Congress on this important issue blah blah blah... This is of course sure to piss off Republicans/outgoing-Bush who recently opposed a proposal to expand health care coverage to children - WON'T SOMEONE PLEASE THINK OF THE CHILDREN! - let alone quasi-humans like immigrants!

Future State Budgets

Those of us in The City have probably already heard about the MTA's predicted $1.2 billion budget shortfall forecast for 2009. Congestion pricing has come back up as a band-aid; tolls on the Brooklyn, Manhattan, and Williamsburg bridges; and raising the cost of a single ride on the subway to $3.00. Eliot Sander, chief executive of the authority, said the other day in reference to upcoming service cuts for subways and buses, "The word draconian is not inappropriate."

While Obama is not going to have much at all to do with subway service on the A-Train, there is about to be an avalanche of bad news from individual states facing massive budget shortfalls. The Center on Budget and Policy Prioriteis released a brief report on October 24 this year that began with this paragraph:

"The weak economy is generating great fiscal distress among states. Because states cannot run deficits, they must close their shortfalls by cutting spending or raising taxes. That causes two further problems. First, their spending cuts and tax increases take money out of the economy, making the downturn even worse. Second, as states have to cut back, they cannot respond to the rising need for health care and other services that occurs when workers lose jobs or are otherwise hit by the economic downturn."

The report went on to say that 27 states are facing shortfalls of $12 billion or more. New York is a part of that group of 27. As mentioned above, states can't run deficits, so that stuff you enjoy walking on everyday? Sidewalks? Yeah, we can't afford those anymore. You'll have to stick to sharing the road with whatever cars people are still able to afford to drive.

Stimulus package, please?

On Executive Power

Jack Balkin, a professor of constitutional law at Yale Law School, has an editorial in The Guardian today that addresses the executive power dilemma Obama faces that I mentioned here the other day. Those Bulldogs gotta stop ripping off my ideas. Anyway, Balkin's piece addresses some specific issues Obama needs to confront and the danger of having all this power and popularity - a situation Bush never really enjoyed. Bush was popular before he came up with all his nifty executive tools, but by the time he started using them - and we found out about them - his popularity began its nose-dive.

Balkin also runs a great, wonky legal blog, Balkinazition, that I really like. And if you go check it out and run into a guy named "Bart DePalma" on the message boards (he's always there) go ahead and rip into him. He deserves it. You'll see.

An excerpt from Balkin's editorial:

"Giving up power is harder than it sounds. Obama's attorney general will have to craft new limits and new methods of accountability. This, in turn, may invite intense scrutiny of what happened in the immediate past. Both Congress and the public may demand to know about secret orders and opinions authorising torture, domestic spying or other forms of illegal activity. Obama and his advisers will have to decide whether political prudence and national security require them to conceal the previous administration's dirty little secrets."

Oh, David Addington. I'll miss you most of all.

NY Times Readers Choose Obama's Cabinet

This morning on the NY Times website, readers are encouraged to make their selections for five of Obama's cabinet positions. They are the only ones that matter any more - thanks, but no thanks Secretary of Veteran Affairs - Defense, State, Homeland Security, Attorney General, and Treasury.

Of course, there's nothing particularly fun about spending your morning deciding between Paul Volcker and Larry Summers for Treasury Secretary, but you can also WRITE IN a name as a choice! So link over and scroll down the "Top Reader Choices" list to find yourself totally unsurprised that readers helped Rashid Khalidi make the list for Defense Secretary. Also, William Ayers had been on the list for Secretary of Homeland Security, but appears to have been bumped in favor of Rudy Giuliani. And Jim Cramer for Treasury!

Tuesday, November 11, 2008

Transportation Whoopee

So we've talked about Obama's desire to provide cash to General Motors, and maybe the other two-thirds of the Big Three. But I wanted to figure out why, exactly, Obama wants to do this and how it might work or fail. I spoke to my friend and resident-Paul Krugman impersonator, Will, on this and got him to write a guest-post as someone with knowledge and work experience in the financial industry. I thank Will for his contribution and hope that this is the first in what will become occasional contributions from guest-bloggers to get some variety of voice, opinion, and background up in this piece.

Here is the question I asked Will:

"So why I am wronge to propose that Obama, when he takes office and assuming GM survives that long, buys stakes in one or all or some combination of the big-three, and makes the 'equity injection' dependant on some set of milestones or goals converting their stupid truck building philosophy into an intelligent super-efficient hybrid car philosophy, then paying the government back and re-acquiring their independence as they recapitalize with new cars that people will, you know, buy. I'm curious of the upside/downside on this, lemme know if you can."

Below is Will's response and a discussion of the perils of recapitalization and getting screwed, again, by stuck-in-the-mud Detroit.

1. Is GM (or any of the US automakers) important enough to save?

In general, free-market conservatives would like to let GM fail, just as they generally wanted the Wall St. firms to fail. Democrats tend to side on preserving these companies and trying to avoid systemic shocks that could send our economy in a dizzyingly unpredictable spiral. The free-market logic, like most Conservative logic, is simple: GM got itself into this position by depending on the high-margin SUV market, not following through with fuel efficient concepts, and getting their collective asses licked by Japanese efficiency and quality.

The world doesn't need GM, and their demise would allow a more nimble, innovative company to rise up (creative destruction). That sounds nice, but I think misses some major points in the macro-economy of the US. One commentator who I think shows some clarity on the issue is Phil Lebeau of CNBC (gasp!), and quick, solid argument can be found here. No matter what you think, there are people on both sides of this issue, and there was a stronger argument to save the banks than there is to save the American auto industry.

2. Is this a good investment?

So let's say that the Auto Industry should be saved. How do we do it? The thing that no one will let us forget is that the Government is playing with OUR tax dollars, which means that we demand a reasonable return on investment. If the government injects capital as equity, and takes part ownership of GM, does anything really change, or does GM just get a whole bunch more money to burn through? This is a serious concern, as GM (and the rest of them) have been burning through cash like a California wildfire this quarter. If the government takes an equity stake, how does it ensure that GM will use that capital to retool factories and designs to make more efficient cars? What if oil keeps going down and SUVs become the rage again, but GM cannot compete with other companies because the Government told them they can't.

This is a really hairy practical problem about the boundaries of government involvement in the private sector. In general you want (or don't want, in the conservative case) governments to set up boundaries and incentives and allow companies to creatively meet those requirements while maximizing profits and growth. A heavy government hand on the Board would be pretty awkward and many would argue hamper the company's ability to compete.

3. The Compensation Problem

This was a bigger deal with the bank bailouts, but it still holds with auto companies. In the markets, someone can decide to invest in GM or not invest in GM. So if GM decides to spend a lot of money on compensation, you can decide to sell the shares because you disagree with the strategy. However, if the government is involved, EVERYONE essentially has shares, and you are basically paying the executives' high salaries.

This problem is much worse politically than economically (the problems are much bigger than cutting some executive salaries), but taxpayers REALLY HATE the idea that their hard-earned money is going into the hands of CEOs who have driven their companies into the ground. Again, the government could negotiate compensation caps as a condition of financing, but it goes back to the problem of government intervention in private business. Why would a top auto executive go to GM, where he or she can only be paid X, when he or she could go to Toyota or BMW and get Paid X,XXX?

Arguably, the one thing that can get these automakers back in good shape is strong, competent leadership, and ironically, government involvement may prevent this from happening. (note: this argument is very free-market, I personally believe that great executives like great challenges and will work for less to basically become a hero and save their country, but i can't prove it . . . )

4. Classic Moral Hazard / Incentive Problem

The one from the econ textbooks is the following problem (which we've heard a lot about lately): "If the government is just going to bail them out every time they get in trouble, then why should the company ever be responsible?" When SUVs were all the rage, GM was making huge margins on them, presumably earning good bonuses, and getting strong returns for shareholders.

In the long-term they should have had a more diversified product line including more fuel efficient cars (the obvious wave of the future) that could sell even with high oil prices. It was irresponsible of management to put so much of their profitability in the SUV basket, but they did what was best for them in the immediate present (sound like the mortgage/credit crisis?). By stepping in, the government is essentially rewarding this behavior, and if the government makes strong demands for a quick turn-around (which would maximize the current value of the investment), GM could easily fall into the same set of behaviors: Find the most profitable thing right now and DO IT A BILLION TIMES. Not smart.

In my eyes, a better option would be essentially "earmarked" financing. GM could turn to the government to provide favorable loans for specific projects that are aimed at diversifying product lines and creating more fuel efficient cars and a production system that mimics Toyota's. This way GM would essentially be forced to come up with socially benevolent solutions, because it cannot survive without government infusion, but the government does not tell them HOW to achieve these goals. However, any plan that goes through (and some plan will go through) will be all about the details. Saving business is a tough business, especially when they are as screwed as the US auto industry. And the government does not have the best track record to be the great savior.

The Meese Rule

"People who know don't talk and people who talk don't know." - Ed Meese, Transition Manager for Ronald Reagan, 1980

There may be some Clinton veterans high-up in the Obama team (like John Podesta and Rahm Emanuel) but there is little of that administration's problem with leaks thus far. Salon ran a terrific article today titled "The Elusive Team Obama" on the President-elect and his staff's disciplined work on the transition.

Now, ten days with a far from fleshed-out staff does not a leak-free White House make, or foretell. But, as Walter Shapiro notes in the Salon piece; "Obama's first week has been impressive, with hints of months of careful planning behind the scenes, as opposed to the make-it-up-as-we-go-along improvisation famously carried out by Bill Clinton."

George W. Bush was careful to avoid leaks in his first term by allowing aides close access to him in the Oval Office and by keeping Andrew Card at his side as Chief of Staff. Card ran a disciplined White House, at least until the feud over the Iraq War between Cheney/Rumsfeld and Colin Powell spilled over.

So when something does leak in the coming days, like Lawrence Summers' name as a potential secretary of the Treasury, you'd probably be wise to consider why it might have leaked on purpose. In Summers' case it's pretty straightforward - the Obama team wants to see how pissed people are to hear his name considered for secretary of the Treasury after he stupidly asserted, while presiding over Harvard University, that women may be less well genetically suited for math and science than men.

Here's another (intentional) leak to consider: The New York Times got wind from "people familiar with the discussion" yesterday between Obama and Bush that the two men discussed a tit-for-tat on bailing out the auto industry (Obama's desire) in exchange for supporting a free-trade agreement with Colombia (Bush's).

This smacks of Rahmbo Tactics. Obama and the democrats are not keen on a free-trade agreement with Colombia that doesn't include their uncut cocaine (...kidding...). Bush doesn't want to bail out Detroit's Big Three after already going from fearless free market capitalist to ardent financial services socialist in a few short days last month.

So what does the Obamasquad do? They send out, presumably, Rahm E-hatchet-manuel to leak the discussions and force Bush into a corner. Either Bush let's GM fail - it may not make it through the end of the year, it's hemorrhaging cash so quickly - and his legacy is farther tarnished as he exits as the guy who let a century-old institution fail because he wanted trade agreements with Colombia, South Korea, and Panama, too. Crafty Rahm.

Bush and family didn't much appreciate the tactic either, evidenced by their subsequent leaking to Drudge that, "Senator Obama may not be familiar with a long-standing tradition of presidents holding their private conversations, private." Oh schnap, son. Sounds like Rahm's plan worked pretty good. Nothing like getting out-maneuvered by the noob.

The New Boss

From WSJ - "President-elect Barack Obama is unlikely to radically overhaul controversial Bush administration intelligence policies, advisers say, an approach that is almost certain to create tension within the Democratic Party."

Disappointing? Sure. But I mentioned yesterday this was expected: "Hopefully, Obama will put an immediate end to the most egregious examples of Bush's anti-constitutional methods. I expect some will end, and some will not, and I expect to be disappointed."

I think Obama will move ahead with the plan reported by the AP, and reposted here yesterday, to close Guantanamo quickly. The court that will try those prisoners who actually are dangerous criminals will be difficult to establish and take some wrangling. But closing Gitmo is a no-brainer quick-fix that will wipe away an icon of the Bush Administration's unconstitutional actions.

Foreclosure on Gitmo is largely symbolic next to actual intelligence reform, but that will take time. Buried in that WSJ article is also this graph: "Advisers caution that few decisions will be made until the team gets a better picture of how the Bush administration actually goes about gathering intelligence, including covert programs, and there could be a greater shift after a full review."

I think that a slow, steady shift away from Bush's policies is likely. But Obama is no knee-jerk liberal who wants to shut the operation down on day one. We've got to get used to the idea that this guy is not as liberal as we'd like to think he is. He finds third-ways. Compromises. You know what that means, right? Everyone's left unhappy. That's what a good compromiser does. So prepare to be unhappy. Just know, the other end of the spectrum will be unhappy, too.

David Kurtz makes a good point over at Talking Points Memo that I should have addressed in this post. Namely, that the WSJ article, and really any definitive talk on "what the Obama Administration WILL do" should be approached with an abundance of skepticism. That said, I do think it is unlikely that radical intelligence overhauls will come quickly and, to another of Kurtz's points at TPM, I don't think Robert Gates will, or should, remain on as Secretary of Defense. So, yes, moving forward, question everything that's not a hard-and-fast fact.

Monday, November 10, 2008

John McCain

"I cannot count the number of times he repeated his mantra, a catchphrase that has never left me: 'We don’t do that.' He stuck to the plural. In a voice neither loud nor soft, he pronounced what he and his refused to do. Four words fusing into one: Wedontdothat." - Gunter Grass

"I want the Presidency in the best way—not the worst way. The American people deserve to be treated with respect by those who seek to lead the nation. And I promise you: you will have my respect until my last day on earth. The greatest blessing of my life was to have been born an American, and I will never . . . dishonor the nation I love or myself by letting ambition overcome principle. Never. Never. Never." - John McCain after 2000 South Carolina primary

We received a definition of the "real America" without asking for one. Voters were told to question who "the real Barack Obama" was before they'd thought to ask. The candidate who warned against an inauthentic America electing an inauthentic American, lost. Now we are left to wonder, who is the real John McCain?

David Grann provided a profile of McCain 2000 and McCain 2008 in the November 17 issue of The New Yorker. Grann suggests, to borrow from Dick Cheney, that McCain "work[ed], sort of, the dark side," as he tried to secure the presidency. Tim Dickinson, in his Rolling Stone piece "Make Believe Maverick," paints a McCain who only ever used the force for evil. John McCain is neither a purely evil man who commanded a, now abandoned, silver tongue; nor is he a fallen angel.

"And out of good still to find means of evil"

The problem with John McCain is our need to understand him through an archetype. It is no mistake Grann's article is titled "The Fall" evoking Lucifer, banished to Hell; or that Dickinson's Rolling Stone piece twists McCain into a Cody Jarrett villain ready to bring the world down as long as he's on top of it when it falls. But between the syncophants and the carpers is David Foster Wallace's profile on the McCain 2000 primary campaign - "The Weasel, Twelve Monkeys And The Shrub":

"...the likeliest reason why so many of us care so little about politics is that modern politicians make us sad, hurt us in ways that are hard even to name, much less to talk about. It's way easier to roll your eyes and not give a shit.... [But] the grateful press on the Trail transmit — maybe even exaggerate — McCain's humanity to their huge audience, the electorate, which electorate in turn seems so paroxysmically thankful for a presidential candidate somewhat in the ballpark of a real human being that it has to make you stop and think about how starved voters are for just some minimal level of genuineness in the men who want to 'lead' and 'inspire' them."

We wanted it both ways; the extraordinary, honorable knight out fighting his lonesome battles for us - losing as well as winning, but always fighting for us - and the man we could joke, chat with at the end of the day. John McCain offered this to us in 2000 and he lost. George W. Bush and Karl Rove's despicable smears are always credited with losing McCain the South Carolina primary in 2000, but it seems no one cares to note that there were actual, human voters punching the ballots, swayed by those robocalls and flyers.

The truth is you can't have it both ways. Your knight can't also be your drinking buddy. He is not superhuman, but he must remain above you, apart from the voter-folk because in success or failure he has to shoulder the load. That is why Barack Obama won this election. Most Americans probably wouldn't want to go out drinking with him - he'd have one beer and call it a night - and he clearly can't bowl. But he is strong enough to let successes go by without glorying in them, and when failures come he will bear their burden. We don't want to blame a friend. But a hero can take it.

It was our reckless decision to elect our drinking buddy in 2000 and hand him the keys at the end of the night, too. We recognized our mistake. It was John McCain's inability to note the sea-change, and try to win the 2000 election all over again, that doomed his campaign.

You either die a hero, or live long enough to see yourself become the villain.

The Russian Menace

The rhetoric towards our old apocalyptic running partner, Russia, is pretty acidic these days. Barack Obama and John McCain both hedged when asked if Russia were building a new "evil empire" in one of the presidential debates, with Obama saying they had certainly engaged in "evil behavior." Ever since the Russia - Georgia "war" (and earlier if you're an anti-Kremlin journalist/ dissaffected former Russian spy) we've swung strongly into anti-Russian sentiments here in the States.

President Bush, who would be Putin's golf buddy if not for the whole running the world thing, intends to move forward with a missile shield in Poland. Russia intends to counter by placing some warheads on the other side. While Obama seems less likely to bullrush Ukraine and Georgia into NATO (be glad Randy Scheuneman was on the losing side of the election), he has been otherwise pretty hawkish when addressing Russia and its leaders. Richard Holbrooke, too, a leading candidate for Secretary of State, has spoken harshly of Russia and its ambitions. This hard-line approach is a mistake and I hope that Obama's rhetoric was just that - rhetoric - and nothing more.

Killing journalists who oppose your regime and then killing the lawyers who were going to represent their case in trial is deplorable, of course. But expecting a vibrant democracy in a country that's always been partial to rule-by-one (there's a reason Vladimir Putin's approval ratings were so high) was a pipe dream willingly pursued by the United States and one whose best incarnation was the fantastically corrupt Boris Yeltsin - a man whose greatest success was out-eating Bill Clinton.

So we should begin by not acting so dismayed that the post-Soviet democracy we envisioned for Russia hasn't worked out so well. They want authoritarian rule, let them have it, it's not our decision. And while Russia was brutal in its suppression of Georgia - a point on which the Georgians had been warned by Condi Rice - it turns out their attack was not as unprovoked as the Georgians claimed.
So how to approach Russia? I think the tactic of isolating Russia is foolish. That's the path we're on now. If we want any meaningful progress on issues like Iran, we probably want Russia, if not on our side, then at least not whispering counter-offers to Iran for disobeying or ignoring American advances. Russia wants respect and it is run by a man (Putin) who, while I don't think he harbors the ambitions of 1950's level Soviet strength, wants a place in the spotlight. I say we give it to him.

Russia may be no friend to democracy, but I don't think they're a threat to it either. We risk far more by alienating them and giving them cause to fear their own security and re-extend their influence into the former Soviet states than forcing ourselves to work with them. Your friends close, your enemies closer... There is a way for us to simultaneously work with the Russians on issues like Iran while undermining their ability to project military force.

Russia's claims to a new era of global importance are directly linked to the rising cost of oil. As the New York Times reported a few weeks ago:

"On a winter day in 2006, Russia suddenly cut off the supply of natural gas to Ukraine, where a pro-Western government had come to power. The Kremlin cited a dispute over prices. But some Western officials said Vladimir V. Putin, Russia’s president at the time and still its paramount leader, was sending a message: Russia was willing to use its vast energy reserves to try to reassert the dominance it lost with the Soviet Union’s collapse.

Two months ago, the muted reaction of some European nations to Russia’s invasion of Georgia seemed to indicate that Mr. Putin’s policy was working, some foreign policy analysts said. Europe had become dependent on Russia’s gas and could not afford to mount a strong challenge, they said."

But, in August, when Russia invaded Georgia, oil was trading at $130 per barrel. Today, it is trading around $60. Though the Russians have set aside about $200 billion in rainy day funds thanks to their oil windfall, their economic well-being is dependant on oil trading at least at $70 per barrel. If demand, and therefore prices, stay low, Russia will find itself in economic trouble and, therefore, limited in its ability to project force in the near future.

Here is where my hopes for Obama come in. If he can get those "green" car-building jobs up and running ASAP, while the economy is still troubled and demand for oil remains low, by the time the economy picks back up we may be able to put a few million very fuel-efficient cars on the road to offset the rising demand for oil. While this is a hypothetical best-case scenario - and plenty of external factors could throw this off - doing everything we can to get fuel-efficient "green" cars on the road and generally doing what we can to keep oil consumption low, will not only help the environment, but put the United States in a much better position when it comes to Russian foreign policy, as well.

The Obama Gitmo Discussions - Via AP

Obama planning US trials for Guantanamo prisoners

The Hangers-On

The Washington Post reported today on several Bush appointees that will remain for at least the beginning of the Obama Administration:

"In confronting the financial crisis and weakening economy, Obama must turn to Ben S. Bernanke, a Republican and former chairman of President Bush's Council of Economic Advisers, who will lead the Federal Reserve for at least the first year of the new administration. In assuming control of the wars in Iraq and Afghanistan, Obama must work with Adm. Michael Mullen, chairman of the Joint Chiefs of Staff, who was appointed by Defense Secretary Robert M. Gates for a two-year term that will end in late 2009 and, by tradition, can expect to be appointed for a second term as the president's top military adviser. Mullen shares Obama's belief in focusing more on Afghanistan but is wary of a timeline for withdrawing troops from Iraq. And in guarding against terrorist attacks -- while correcting what he considers the Bush administration's excesses -- Obama will rely upon FBI Director Robert S. Mueller III, whose term expires in 2011."

The default reaction to this news, from the progressive side, may be dismay. But as far as people who have to be held over from the Bush Administration, I don't think this is a bad group.
Ben Bernanke deserves quite of lot of the criticism he has received for responding slowly to the subprime mortgage crisis. But there is some more recent blame that Bernanke has absorbed that was not due. When the $700 billion bailout passed, congressional Democrats insisted on writing into the bill the ability for officials to use the money for "equity injections." Treasury Secretary, Hank Paulson, insisted repeatedly that he did not want this authority. Thankfully, Democrats forced it in there.

A few days later, British prime minister, Gordon Brown, recapitalized his country's banks and eased the freeze on the credit market in Britain. Shortly thereafter, American officials, led by Paulson, hinted they were leaning towards using the money in a similar, but recently vehemently opposed, fashion and their subsequent actions have eased the credit markets. Bernanke, it turns out, was in favor of the authority for equity injections but it was Paulson who shouted him down. As Paul Krugman wrote in an October 12 NY Times column:

"This sort of temporary part-nationalization, which is often referred to as an “equity injection,” is the crisis solution advocated by many economists — and sources told The Times that it was also the solution privately favored by Ben Bernanke, the Federal Reserve chairman. But when Henry Paulson, the U.S. Treasury secretary, announced his plan for a $700 billion financial bailout, he rejected this obvious path, saying, 'That’s what you do when you have failure.' Instead, he called for government purchases of toxic mortgage-backed securities, based on the theory that ... actually, it never was clear what his theory was."

Bernanke has seemed timid in this government and forced aside by partisan, ideological economic agendas and "solutions." I think an Obama Administration that urged him to have a more vocal role, with less partisan pressure, may find a more dynamic Bernanke than we've seen.

Admiral Mike Mullen shares Barack Obama's concern towards Afganistan but places Iraq ahead of Afghanistan in terms of military priorities. While Mullen is not a partisan appointment of Bush's, he and Obama will have to reconcile their views on the relative importances of Iraq and Afghanistan. From the Post:

"On the two wars, Mullen's views align broadly with those of the president-elect: He sees an urgent need to devote more troops and resources to Afghanistan, and he supports continuing troop reductions from Iraq. But there are also important differences: Although Obama has long cast Afghanistan as the only legitimate war to pursue in response to the Sept. 11, 2001, attacks, Mullen's priorities for that country are driven more by the escalating insurgency since 2006 than by any sense that Iraq is the wrong war for U.S. troops."

As an aside to this, Robert Gates may also stay on as Secretary of Defense. While Gates is a Mozart to Rumsfeld's Salieri (sorry Salieri, you don't deserve that kind of company), I don't like the idea of leaving him around for another year because he's part of the "Surge" architecture and the "Surge" is farce and a scam and Americans are clueless to its true nature. Even so, it may be difficult to get another Secretary of Defense up to speed in time to adopt two precarious (to say the least) wars seamlessly. Maybe Chuck Hagel would be ready for it, though...

Robert Mueller better stop wiretapping my damn cellphone. This has more to do with Obama deciding how to use his executive powers (or not use them) than it does with the man himself. I wrote about this in a column on my other blog in June of this year called "Barack Obama and the Theory of the Unitary Executive" which I encourage you to read. Money quote:

"[Obama's] supporters, myself included, expect monumental changes that will be difficult and time-consuming to achieve. Will Barack feel pressure to use his executive power - power swollen by Bush and friends - to make change quickly? Or will he be able to temper his people's expectations, encourage patience and deliberation, and perform the near contradictory tasks of simultaneously resizing the role of the executive and tackling the wounded economy and working on withdrawal from Iraq."

Hopefully, Obama will put an immediate end to the most egregious examples of Bush's anti-constitutional methods. I expect some will end, and some will not, and I expect to be disappointed. How well Mueller works out has to do with the limits Obama places on him, not the man himself.

My Hitman Has a Sense of Humor

Barack roasting Rahm Emmanuel at 2005 benefit to cure epilepsy (props to Will):

Friday, November 7, 2008

Secretary of State

The Big Three names mentioned in Secretary of State discussions seem to be Bill Richardson, John Kerry, and Richard Holbrooke. Hillary Clinton, Dick Lugar, and Chris Dodd have also been tossed around as a second-tier of choices (not that they're lower quality, just not mentioned as frequently). Let's take a closer look:

Richard Holbrooke: Watch this.

The considerations against him are political things like the fact he supported Clinton's campaign because he was so important to Bill's administrations. So people say Obama may want to choose someone who supported him, like Bill Richardson. But watch that video and I think you'll see someone crisp who talks and explains things in a way very similar to Obama; step-by-step, in a calm, didactic manner. That has to appeal to Obama.

An excerpt from this Foreign Affairs article written by Richard Holbrooke - titled "The Next President" - shows someone who also pursues Obama's third-way strategy and on a dynamic, difficult subject; greenhouse gas emissions and global warming:

"Here is a seemingly insoluble Catch-22: the major emerging economies will not agree to any treaty containing meaningful limits on their emissions, and the U.S. Senate will not ratify an agreement that does not include them. There is, however, another approach that should be considered, without abandoning the Copenhagen process: multiple agreements in which various combinations of nations address specific parts of the larger problem. In such a collection of agreements, there would be a greater opportunity for genuine U.S.-Chinese cooperation. In particular, the two nations could reach bilateral agreements for joint projects on energy-saving, climate-change-friendly technology. The mutually beneficial goal would be an increase in energy efficiency and a reduction in carbon emissions in both countries."

That said, in the Charlie Rose interview, Holbrooke sounds a somewhat hawkish tone towards the Russia - Georgia conflict and Russia in general. However, no more hawkish than Obama, I should note. I really disagree with the way everyone in our government has addressed Russia lately and I think we're taking far too hard a line against a country that is way more bark than bite. I could go into this for a couple days here, but I'll save it for some big policy analysis or something.

I think, however, I'm a Holbrooke fan for Secretary of State.

Bill Richardson: Please no. I like Bill a lot, he's affable and funny and smart but he thinks everything can be solved with a shot of vodka and a bear hug. I'm oversimplifying this, of course, but my favorite Bill Richardson story is indicative (I can't find the citation on this, so it's coming from memory): Richardson was meeting with Saddam Hussein in a negotiation and after coming to an agreement on a contentious point, Richardson clapped Hussein on the back to celebrate their consensus. Nonplussed, Saddam's bodyguards pulled their weapons on Richardson. Not that that's a reason to go against him, I just don't find him serious enough for the position when there are other good candidates out there.

John Kerry: I think I would be surprised if Obama went this way. It just seems like he's going to end up pulling too much democratic talent from the Senate with Biden gone and, I expect, Hillary likely to fill a post like Secretary of Health and Human Services or, even, Secretary of Defense (it's been discussed, though I doubt that one). Kerry supported Obama, yes, when Holbrooke didn't, but Holbrooke has considerably more experience than Kerry and far deeper international ties. I don't think I could justify choosing Kerry over Holbrooke.

Others: Sam Nunn, Hillary Clinton, Dick Lugar, and Chuck Hagel are also mentioned in discussions on Secretary of State. I could see Hillary as a pick on experience and depth of knowledge, but I think she'd wind up stepping on toes. The Republicans would freak out, but whatever on that count. Dick Lugar seemed high on the list but he said the other day that he didn't want the job even if it was offered. Chuck Hagel I don't see being a good fit here. In a defense capacity, yes, Secretary of State? No. Sam Nunn would also be a surprise, a little hawkish and also someone I see more in Defense Department.

I'll go with Holbrooke.

The Ditch Un-Diggers

Nineteen people, a country nineteen trillion dollars in debt (or whatever), one Hilton Hotel in Chicago.

Obama and Biden will speak with their seventeen-member Transition Economic Advisory Board today before a 2:30pm press conference; Obama's first as president-elect. The board includes such last remaining wealthy peole as Warren Buffet and Google CEO, Eric Schmidt. Also included:

Paul Volcker - Former Fed Chairman
Lawrence Summers - Former President of Harvard University and advocate of low-expectations for women in the sciences
William Daley - Because as a Chicago pol, Obama is required to have at least one person named Daley at every nine+ person meeting he holds as president
Robert Reich - Former U.S. Secretary of Labor and a man who looks much too comfortable in his post-political life appearing on Countdown and Real Time with Bill Maher
Jennifer Granholm - Who I presume is there as an example of what will happen to the rest of the people in the meeting if they fail to help the economy recover?

The full list is available here if you feel like wasting 46 seconds.

Obama has said no appointments will be announced today although it seems likely Robocop will soon be named Secretary of Unicorn Affairs (props to Nick and his terrific Tumblr).

One thing I wanted to address is the movement amongst my compatriots to draft Paul Krugman as Treasury Secretary. I love Paul's writing; his political commentary is astute and brave, and his discussions of economics are accessible and totally un-dismal even when the news he reports is. That said, Paul looks squeamish enough on Countdown with Keith Olbermann tossing him friendly questions. I can't imagine him wanting to stand in front of the world at a time like this barraged with questions. Writing is his thing and the academy is his place. I don't think mixing him up in Washington's politics is a wise move. Not that there's really a chance Obama will go that way anyhow.

Thursday, November 6, 2008


Robert Gibbs has NOT been offered a job as White House Press Secretary as far as I know, but here's why I'd be just fine with it if he got the position in the end:

Gibbs to be named White House Press Secretary

Chief of Steak Knives

Name: Rahm Emanuel

Occupation: Congressman, U.S. House of Representatives - Illinois District 5

Position in Obama Administration: Chief of Staff

Hobbies: Mailing dead fish to pollsters, pretend-stabbing dissenters, scrapbooking.

Rahm Emanuel only uses steak knives this long when he carves up adversaries.

Profile and Analysis: And we all thought Sarah Palin would be the last high-profile politician we'd have to hear described as a "pitbull" this year. Sorry folks! Enter Rahmbo.

Emanuel worked as a senior fundraiser for Clinton's '92 presidential campaign where he bundled a then-enormous sum of $72 million - or, Obama's one day fundraising total on a bad day - for the plucky Arkansas governor. Ah, what 70 million used to buy you. Emanuel inspired the West Wing character Josh Lyman and is said to have mailed a dead fish to a campaign pollster that got on his bad side. He spent a few years making around $10 million working for Wasserstein Perella & Co./ Dresdner Kleinwort. In 2002 he ran for Ron Blagojevich's house seat that represented Chicago's northside while Blagojevich ran, succesfully, for governor. After six years in the House of Representatives a reportedly "mellower" Rahm found himself forced to choose between a straight shot to Speaker of the House, or a position as Barack's Praetorian Guard, Chief of Staff. Today, he announced he's going with Chief of Staff.

As Rahm said to Tony Blair before a press conference at the outset of the Monica Lewinsky scandal: "This is important. Don't fuck it up."


Politically, I like Emanuel as the blunt object to Obama's soft touch. John Boehner's pants looked a little damp in the crotch when he said, today, "This is an ironic choice for a President-elect who has promised to change Washington, make politics more civil, and govern from the center." Aww, John, you used to be such a tough guy! Even Boehner's afraid of Rahmbo.

John's right, though, that Rahm would not be a bipartisan man's first choice. But, as Paul Krugman noted in his column the other day, "Why will the G.O.P. become more, not less, extreme? For one thing, projections suggest that this election will drive many of the remaining Republican moderates out of Congress, while leaving the hard right in place."

The people left in the House and Senate on the Republican side aren't going to be much interested in being bipartisan in any functional way, so appointing someone tough like Emanuel makes sense. So we're good on that front; Emanuel will be effective and one hopes Barack is accurate in saying Emanuel has "mellowed out" at least enough that Obama maintains his "no drama" policy. But I'm sure we'll get some good temper tantrums.

The front on which I'm uncertain about Emanuel is his AIPAC relationship. He's strongly pro-Israel and announced his endorsement of Obama shortly after Obama's AIPAC speech in June. After Nouri al-Maliki, prime minister of Iraq, denounced Israel's bombing of Lebanon in the 2006 war as an act of "aggression," Emanuel called on the prime minister to cancel his scheduled speech before Congress. Though Emanuel has rightly criticized some of the more idiotic neocon approaches to Israel, his strong relationship with AIPAC makes me uneasy. Obama is independent, not one easily swayed, and I understand the political appeal of Emanuel. But keep an eye on the AIPAC situation.