Here's Your Change

Tomorrow's Post includes news of the Treasury Department's trillion-dollar plan to make sweetheart loans to private equity firms to encourage them to buy up high-rated asset-backed securities, drawing the winners from the last years' casino markets back into the game.

Philo-Junius for one would like to be the first to welcome our new private equity overlords--George Soros is presumably at the head of the line. But Philo-Junius cannot help but imagine the rioting in Democratic neighbourhoods had the Bush administration attempted such a breath-taking giveaway. Does anyone still maintain that the Republican Party is the party of the rich?

Spinning the Message

It's interesting to note the careful wordsmithing the White House and other Democrats have hammered out in their ad hominem campaign against Rush Limbaugh. The current, precise phrasing of the indictment against Limbaugh is that Limbaugh "hopes the President's economic policies fail" (to quote Robert Gibbs from yesterday).

Philo-Junius thinks that's artful, because it implies that Obama's policies can succeed if everybody claps their hands and thinks happy thoughts. What Limbaugh has not stated out loud, but needs to make clear, is that what he means is that he wants Obama to fail in his attempts to implement wrongheaded and dangerously ideological policies based on flawed understandings of economics and human nature.

The issue is not whether conservatives or Republicans want Obama to "do well." Many conservatives hope and pray that a blinding light of providential revelation indeed strike Obama on the road to Damascus, or Tehran, or wherever, and he realise the manifold errors of his ways and be converted to the understanding of the inevitable failure of attempts to manage the U.S. economy and finance from above, and that, changing his goals, he leads the American economy to recovery and from strength to strength.

But that is not the course he has set, nor the one which a gambling man would wager Obama would ever undertake. Obama is attempting to implement policies which will impair the prosperity and social fabric of the nation for years to come, even if some believe (as some Democrats believed of G.W. Bush) he does it with the best intentions.

When someone sets about organising a campfire in an old-growth forest in the middle of the worst drought on record, it's not mean-spirited to hope he doesn't pull it off. This distinction is what Limbaugh needs to enunciate to defuse the attacks on him, and it is the distinction that we can expect the White House and its surrogates to most artfully attempt to efface.

Newt To Swim Tiber?

Say what you like about his checkered personal life or his fading prospects on the national political scene, but the New York Times Magazine profile on Newt Gingrich (registration required) let fall the following little nugget:

"At a moment when the role of religious fundamentalism in the party is a central question for reformers, Gingrich, rather than making any kind of case for a new enlightenment, has in fact gone to great lengths to placate Christian conservatives. The family-values crowd has never completely embraced Newt, probably because he has been married three times, most recently to a former Hill staff member, Callista Bisek. In 2006, though, Gingrich wrote a book called “Rediscovering God in America” — part of a new canon of work he has done reaffirming the role of religion in public life. The following year, he went on radio with the evangelical minister James Dobson to apologize for having been unfaithful to his second wife. (A Baptist since graduate school, Gingrich said he will soon convert to Catholicism, his wife’s faith.)"

Philo-Junius can't wait to see Newt, Nancy Pelosi and presumptive Secretary of Health and Human Services Kathleen Sebelius slapping backs and bonding at the next Archdiocese of Washington Lenten Fish Fry.

I Can Has Chairman Who Doesn't Think We're Nazis?

Philo-Junius doesn't have a lot to say about the moderate Republicans' disdain for Rush Limbaugh, except that one can't fight a runaway freight train of nationalisation and leftward social engineering with nothing, which is all we've seen from the moderates since the financial meltdown, but he does strongly feel that any party chairman who nods and agrees with a hostile interviewer who characterises one's party as "reactionary" and party events as "like Nazi Germany" is one who really doesn't need to come to work the next day.

If Michael Steele had an ounce of self-respect he would tender his resignation today, and let someone who doesn't think Republicans are Nazis have the job.

It's been asked if Steele might have been able to stir himself to some reaction if Hughley, say, had offered Steele a plate of Oreos during the interview; somehow I think Steele would have done something other than nodding and attempting to "relate."

Bluffing the KGB

The hot story this morning at the Washington Post is the Obama administration's attempt to enroll Russia in Obama's half-hearted attempts at containment of Iran (which, we learned Sunday, now has the materials for an atomic bomb--oops) and the mullahs' attempts to acquire the ability to produce atomic weapons.

The question, though, is this: given Obama's deliberate humiliation of Poland's government for its support of the missile defense facilities, what reason does the Russian government have to believe that Obama is seriously intending to complete the project he's now attempting to bargain away?

If Russia is already going to get what it wants from Obama on missile defense--namely returning it to the research-and-development curiosity-we-never-intend-to-deploy box in which it was kept throughout the Clinton years, why would anyone think that this offer alone would be persuasive to the former-KGB clique which runs the Russian government?

Hoping for change, Philo-Junius supposes.

Thinking about the Sinking of AIG

News today about the parlous state of AIG, and the strong likelihood that the government will ultimately wind up owning AIG lock, stock and bookkeeper, gave Philo-Junius the urge to investigate the process of cleaning up AIG's books. It seems that when the credit-default swap mess was first unearthed during the collapse of Lehman Bros. last summer, that AIG's CDS exposure was about $400 billion, and now has been unwound to about $300 billion.

Question for discussion: given the fact that AIG has demonstrated the complete failure of its risk-modeling and effective bankruptcy, shouldn't the primary objective of U.S. government involvement be the transparent marking down of the swaps--the underlying systemic risk whose threat Geithner and Obama maintain we must address?

Some have argued that the swaps should be simply declared null and void as improperly registered insurance vehicles--why is it necessary to continue to pretend that these instruments have any effective value other than what the U.S. government ultimately chooses to assign them? Isn't the value ultimately assigned to these instruments a central question of public policy?

Confirmation Question for Sebelius

Q: Given your public statements that you believe abortion is wrong, do you believe that Roe v. Wade was correctly decided, in that it held that the life and health of unborn children were of no concern to governments?

Readers are welcomed to append their favourite questions below.

Some have said that abortion, and Sebelius' well-publicised entanglement with the abortion industry in Kansas--embodied by partial-birth-abortion specialist George Tiller--might overshadow Sebelius' qualifications to be Secretary of Health. In fact her stance on abortion IS her primary health-care qualification; she has made no national news in the last four years on any health-related issue EXCEPT abortion.

Now, we cannot delude ourselves that the 54% of Catholics who voted for Obama are going to suddenly have the scales fall from their eyes, but we do need to demonstrate that "common ground" really just means "you look the other way and we'll do what we please."

The fact that both of Obama's nominees (first former South Dakota Senator Tom Daschle, now Kansas Governor Sebelius) for Secretary of Health and Human Services have been putative Catholics scolded by their bishops for their intransigence on abortion demonstrates the mendacity of the Obama position on abortion, especially where Catholics are concerned.

UPDATE: The New York Times is less than enthusiastic over the choice: "But on matters of health policy, which she will oversee if her nomination is confirmed by the Senate, Ms. Sebelius’s efforts to forge bipartisan consensus have rarely succeeded."

UPDATE: The crypto-secular National Catholic [sic] Reporter wheeled out a press-release-cum-"news"-article shilling for Sebelius reporting the support of several of their usual suspects in dissent praising both Sebelius and the choice. Obama's secular infiltrators within the Church were well-prepped, it seems.

Are you sure...

... they didn't record this for Obama-Biden?

What a Difference a Year and a Half Makes

Good news from Iraq as the effects of the Surge continue. Fatalities at an all time low for the war.  What's even better is that one of the chief architects of the new approach in Iraq is finally where we need him to be.   Welcome to your new job, CENTCOM COMMANDER. 

Let's HOPE that if things go badly on 4 Nov, our new President doesn't CHANGE things before General Petraeus helps us win the war in Afghanistan.

Testing, testing...

Just making sure this thing still works.  I think we're gonna need it after 5 Nov.

Why We Need More Drilling

According to the Energy Information Administration, global oil exports are on the way down -- and appear set to continue to decline:

The world's top oil producers are proving unable to put more barrels on thirsty world markets despite sky-high prices, a shift that defies traditional market logic and looks set to continue.

Fresh data from the U.S. Department of Energy show the amount of petroleum products shipped by the world's top oil exporters fell 2.5% last year, despite a 57% increase in prices, a trend that appears to be holding true this year as well.

Obviously, this is counterintuitive. You would expect that as petroleum prices soar, exporters would raise their production to take advantage of the better return. Nevertheless, exports by the top 15 oil suppliers fell by nearly a million barrels per day. That's because the exporters themselves are experiencing a hug spike in demand:

For all the attention paid to China's increasing energy thirst, rising energy demand in the Middle East may pose the greater challenge. Last year, the region's six largest petroleum exporters -- Saudi Arabia, United Arab Emirates, Iran, Kuwait, Iraq and Qatar -- curbed their output by 544,000 barrels a day. At the same time, their domestic demand increased by 318,000 barrels a day, leading to a loss in net exports of 862,000 barrels a day, according to the U.S. Energy Information Administration...

Saudi Arabia in particular has become a major energy consumer as the country pushes to put its oil riches to greater use. The kingdom is in the middle of a major investment campaign to become a world player in petrochemicals, aluminum and fertilizers, all of which will require huge amounts of oil and natural gas.

The U.S.'s top oil suppliers are Canada, Mexico, Saudi Arabia, Venezuela, and Nigeria. Of those, Mexico, Venezuela, and Saudi Arabia all seem likely to reduce their levels of exports in the next few years. Wouldn't it be nice if we had another supplier -- say, a domestic supplier -- to pick up the slack?

The United States is currently sitting on an expected 10.4 billion barrels of oil in ANWR and another 3.65 billion barrels in the Bakken formation, not to mention some 800 billion barrels more in the shale oil of Colorado, Utah and Wyoming. Given the high price of oil today and the questions regarding the dependability of our international suppliers, it's the height of irresponsibility not to begin to plan for production from these and other domestic sources.

Senator McCain may be poorly-positioned to make production from ANWR an issue, but Congress is also slammed the brakes on shale oil development. While McCain may oppose drilling in ANWR, he can still stand up for development of shale oil.

Worshipping a Mighty God

We hear today that Obama has decided that his church of 20 years, Trinity United Church of Christ, is no longer capable of bearing the scrutiny visited upon it as the church of a Presidential candidate.

The problem with his statement is this: if he disagrees so regularly with the statements of preachers there, be they regular clergy or guests, why has he been a member for 20 years?

Was there some unfortunate political Tourette's Syndrome which has lately infected the clergy, along with the congregation, which has always been shown to be cheering and otherwise vocally supporting the incendiary sermons which Obama then has to disown?

Since the meteoric rise in Obama's political fortunes began with his "Audacity of Hope" keynote address redolent with claims to respect for Christian sensibilities, buttressed by borrowing the title of Rev. Wright's sermons for the speech and his subsequent book, one is entitled to ask: In just what way was the message of Trinity different from the message of the hundreds, if not thousands of other Christian churches in Chicago, if not in precisely the corrosive and inflammatory rhetoric which Obama now finds he must disavow?

Bringing People Together to Dump on W

The latest missive from the Obama camp:

"You vs. George W. Bush‏
From: Barack Obama (info@barackobama.com)
Sent: Thu 5/29/08 10:05 AM
Reply-to: info@barackobama.com
To: philo-juniua

Right now you have a unique opportunity to go head-to-head with George W. Bush.

This week, John McCain and George Bush gathered behind closed doors, away from the cameras, to raise money for McCain's campaign.

McCain used Bush to raise a reported $3.5 million from a group of about 500 Republican contributors.

That's a lot of money that will undoubtedly be used to attack us and make the case to continue George Bush's failed policies.

But I have an idea about how we can match it. And we don't need George Bush."

Imagine if he were indeed to run as a partisan...

The Lure of Easy Money...

Former George W. Bush adminstration nonentity Scott McClellan has cashed out with a hatchet job memoir published by big-money Democratic contributor Frank Pearl's Perseus Press implying that the Bush administration's communications strategy in the run-up to the 2003 invasion of Iraq was dishonest. It is not clear why such a paragon of virtue as McClellan would have associated himself with such a shabby communications strategy--serving as press secretary himself from 2003-2006--unless, of course, it was develop a resume of sufficient length to win the book contract.

So, finally, we are forced to conclude that McClellan was either an amoral mercenary then, or an amoral mercenary now.

Well, Scotty, which is it?

A Little Remedial Geography

It has been documented that one unfortunate consequence of Obama's multicultural, free-to-be-you-and-me childhood in Djakarta and on the mean streets of Honolulu is a general haziness with the pesky trivia of U.S. civics and geography, such as whether the U.S. has 48 or 58 continguous states,



whether Sioux Falls or Sioux City is the largest city in South Dakota,

or whether Martin Luther King marched from Selma to Montgomery before his parents met in 1959, or, as history records, in 1965.














Now unfortunately, and no doubt more damaging in the eyes of the international community, Obama has decided to embroider on a family legend with similar indifference to the pesky facts.

A putative uncle of Obama's (presumably actually his great uncle Charles Payne) is alleged by Obama to have participated in the liberation of the Nazi death camp at Auschwitz in 1945. The problem with this account is, of course, that Auschwitz lies in Poland, and was liberated in January 1945, before the first American troops had crossed the Rhein into western Germany. Presumably, there will be some backing and filling as the Obama campaign acquires service records to show that Payne was at some point near to at least one of the western concentration camps liberated by the Americans later in 1945--possibly Dachau or Buchenwald--but we'll just have to wait and see whether or not Obama's mouth has once again written a check his campaign can't cover.

UPDATE: Auschwitz, Buchenwald; what's the difference?
Turns out Obama is also hazy on World War II crimes against humanity, even the ones his typical white relatives helped stop.

Well, then, by all means carry on. After all, if you've seen one death camp, you've seen them all, right?

Where Am I, Again?

That wacky Obama:



Keeping the student body in stitches with his clever allusions to linkages between the founders of Methodism and the Duke of Wellington--yeah, that's the ticket!

I wonder if he'll follow up with some clever riffs on Marlboro cigarettes and Winston Churchill?

Seriously, if this guy's last name was Quayle, we'd laugh about running him for Senate.

On Vice Presidents: Rob Portman

So continuing the spate of vice presidential speculation, Bob Novak reports that the frontrunner for John McCain's vice presidential slot may be former Ohio Congressman, U.S. Trade Representative, and Budget Director Rob Portman:

McCain won't pick a running mate any time soon. But the front-runner in the VP derby may be Rob Portman -- former Ohio congressman, former U.S. trade representative and former OMB director. He appears to have fewer negatives than any other possibility.

Regular readers will recall that I predicted Portman would be strongly considered more than a month ago. As I noted at that time, Portman is a rising star both in Ohio, and for the Republican party nationwide. While he doesn't have as high a profile as some of the other contenders -- largely because he hasn't served as either a governor or Senator -- there are plenty of reasons that Novak tabs him as the favorite.

Portman brings strong economic policy credentials based on his service on the Budget Ways and Means Committees while in Congress, and as Budget Director and Trade Representative. The latter position also gives him some foreign policy credentials -- perhaps more than most of the other names on McCain's short list. Like Chris Cox, he's a quick study, and strong on policy specifics -- including health care, which is likely to be a major issue in the campaign.

Portman is also a Reagan conservative -- one who'll satisfy all parts of the Republican coalition. And his biggest asset is that he's the strongest Republican in a critical swing state -- Ohio. The candidate who won Ohio has won the presidency in the last 11 elections. Ohio currently looks bluer than any time in recent memory however, as Democrats swept the state in 2006.

Can Portman bring Ohio to the GOP column? That's hard to say -- but he probably has a better chance than Cox would of bringing California. Further, Ohio Governor Ted Strickland is a strong contender for the Democratic vice presidential nomination, which would complicate the matter.

In contrast to Cox -- the other former Republican House member turned administration official mentioned for the VP slot -- Portman has a pretty strong reputation as a team player. While he too, has been a leader on conservative reforms, his reputation has been of someone willing to set aside his priorities to put the team agenda first. For that reason and for others, he'd probably make a better fit on a McCain ticket than would Cox.

The wrinkle is that Portman continues to maintain that he doesn't want the job. Rather, he seems to be focused on seeking the governorship in 2010, which would give him an excellent perch to seek the presidency himself -- either in 2012 or 2016.

On Vice Presidents: Chris Cox

The amazing thing about the recent 'Chris Cox boomlet' is that it has not so far touched upon his compelling personal story:

[Cox] had sped through the University of Southern California in three years, then simultaneously gotten a Harvard law degree and MBA. At 25 he was ensconced at a prestigious clerkship with a federal appeals judge in Hawaii. It was August of 1978, and Cox and a friend decided to explore the rain forest on the island of Molokai. They were inching through mud at about five miles per hour in a rented jeeplike contraption when a wheel caught and the vehicle overturned. Cox's friend was thrown clear, but Cox was trapped underneath, with the weight of the jeep on him. His back was broken, a quadriceps muscle was severed, and he was paralyzed from the waist down.

There's an obvious parallel to McCain here. Having your spine snapped and body shattered by a rolled jeep isn't the same as by the Viet Cong, but Cox is probably one of few men who can relate to McCain's experience. While Cox eventually regained his ability to walk, he's been in pain every day of his life since the accident. And where McCain can't lift his arm above his shoulder, Cox is basically forced to stand most of the day, since it's too painful for him to sit for extended periods.

Cox would bring some clear strengths as a vice presidential candidate. He's extremely bright and creative, with an impressive resume and legislative track record. He fathered the Internet Tax Freedom Act, as well as the Securities Litigation Reform Act (which made it harder for trial lawyers to bring frivolous suits against companies). He speaks Russian fluently -- even starting a business translating Pravda in the '80s. He's worked on export controls, and chaired the House Homeland Security Committee. importantly, his conservative credentials are impeccable. During his time in the Reagan White House, he helped select Scalia, Kennedy, and Bork for the Supreme Court.

Cox has also been something of a maverick -- though perhaps not to the extent McCain has. He voted against the Federal Marriage Amendment, against legislation to prompt hospitals to check on the status of aliens that they treat, and against a measure to put the onus on banks to curb internet gambling. He also earned a reputation as more of a China hawk than most other House Republicans, and he was one of few votes against normalizing trade relations with Vietnam in 2002. He's also a pro-life Catholic, which should earn McCain some support in this bellwether swing constituency.

One downside to a Cox nomination is that he probably wouldn't swing a state to McCain's column. Although polls currently show California as being close, it's hard to imagine that McCain could win a state that Bush lost by 9 points in 2004, and which hasn't voted Republican in 20 years.

But the real challenge for Cox might be his reputation among those who have worked with him as being at times too much of a loner, and too uncompromising. While he's consistently pursued conservative principles, there have been some who wished he was more of a 'team player.' That's another trait he shares with McCain -- but it's hard to imagine the ticket will be improved by having two such personalities.

Read the entire article to get a good idea of what Cox is all about.

McCain Behind the 8 Ball?

The Politico reports that having secured his party's nomination while the Democrats continue to fight over theirs, John McCain is in big trouble:

Unlike the Republicans, the Democrats do know who they are running against. The Democratic National Committee is already firing out faxes attacking McCain and the party’s outside allies are already putting the finishing touches on their attack ads.

When not picking on each other, Obama and Clinton are also sending rockets McCain’s way.

That incoming fire could be particularly threatening to McCain for several reasons.

First, Clinton and Obama have very strong incentives to go after him. If either can convince their own primary voters that they have the best shot at beating him in the general election, the odds of winning the primary go up.

Their barbs and criticisms carry extra power, as well, these days because they are picked up by the national press corps still tracking the Democratic contest — rather than McCain’s quiet, internal reorganization at his Virginia headquarters.

Add to that, McCain can’t do much to defend himself in the short term because he ended the primary pretty much the way Kerry did four years ago: flat broke...

The explosive fundraising strength shown by both Democratic candidates shows no sign of abating, which means the victor will turn to the general election phase of the race with a presumably unified and enormous list of potential givers, notes Anthony Corrado, an expert on campaign finance.

OK, this is all true. But would it somehow be better if one of the two Democrats had already clinched the nomination? Then he or she would be unifying the party, expanding an already sizable cash advantage, and focusing fire on a bankrupt and under-staffed McCain. I suppose then McCain would have the advantage of additional media attention to both his reorganizing and his attacks, but is it remotely conceivable that would be a better situation for him?

Cummings points to this piece which lays out the challenges for Democrats.

Obama’s failure to win Ohio and Texas and lock down the nomination — combined with Clinton’s newly defensible decision to press on despite a deficit in delegates — virtually guarantees Democrats a draining contest that will give Republicans a months-long head-start on the general election.

It will heighten racial, ethnic, gender, and class divisions already on stark display, raise awkward questions about the legitimacy of the nominating process, and inflict potentially lasting wounds on the eventual winner...

Clinton advisers say Obama was also hurt by media attention to his murky connections to Tony Rezko, a former Obama fundraiser now on trial in Chicago on corruption charges. The Clinton campaign endlessly prodded reporters to insist that the Obama campaign provide answers to the many mysteries about the relationship.

This success will embolden Clinton for more of the same in Pennsylvania.

Obama, in turn, will step up his attacks on her appeal with independents and swing voters, her judgment in backing the Iraq War, and her attachment to "old politics” of the 1990s.

Add to that the fact that both Democrats will be spending boatloads of money to desrtoy each other, rather than stockpiling it. Is there any doubt that McCain would be far worse off if the Democratic nomination was settled?

Educating Obama on NAFTA

Philip Levy explains why Obama is so far off on NAFTA. He also tackles one of the basic misunderstandings about trade agreements -- that they have an effect on employment.

If we want to find the true consequences of NAFTA, we need to disentangle this mess of events. We could be guided by the wisdom of economic theory, but it says, loud and clear, that trade agreements have no impact on overall employment. Trade substitutes better jobs for worse jobs, but leaves the job total unchanged.

This is the type of answer that drives politicians berserk. Economic policies are loved or loathed by the public on the basis of how many jobs they create. How can trade policies not affect overall employment?

The number of jobs in an economy is set by the size of the work force, the health of the labor markets, and macroeconomic fluctuations. Trade can certainly create new jobs with export opportunities or cheaper inputs. It can also destroy jobs when firms succumb to import competition. Lots of job creation and destruction occurs every year in the U.S. economy. In an average year, 17 million jobs are created and 15 million are destroyed, with a net job creation of 2 million. When net job creation matches growth in the labor force, the unemployment rate stays constant.

He explains in greater detail why Obama's claim of 1 million jobs lost does not hold water -- because unemployment has been so low that the Fed would have taken steps to slow economic growth:

What of Obama’s claim that NAFTA cost the United States 1 million jobs? Imagine this were right. Then, without NAFTA we would have had 1 million more jobs. In the year 2000, this would have made the unemployment rate just under 3.3 percent, rather than the 4 percent we actually enjoyed. But Federal Reserve governors would have been in a panic long before we got down to that level and would have raised interest rates to slow the economy. They would have known they had gone far enough when unemployment increased to a level they were comfortable with – the same as with NAFTA.

Then what happened to those US manufacturing jobs? Simple: they continued to migrate to lower-cost locations -- as they had been doing, and as they will do even if NAFTA were to be repealed:

But what about the factory workers in Ohio? Are they just imagining those lost jobs? Of course not. Manufacturing employment in the United States did hit a peak and then begin a steady decline. The problem is that the peak was in 1979, 15 years before NAFTA came into force. The long-term decline of American manufacturing jobs has much more to do with technological change than with trade. We’re producing more stuff with fewer workers.

An excellent summary of an issues that will never be discussed honestly in a presidential campaign.