Oh...that's what a bubble looks like...

Well done, TMQ

My sentiments, exactly:


U.S. Congress to the Next Generation --Drop Dead: Announcing the economic stimulus package agreed to last week by both parties in the House of Representatives, Speaker of the House Nancy Pelosi declared that typical Americans can expect to receive a "stipend" of $300 to $1,200. Stipend -- will we get a federally funded sherry hour, too? Calling a government check a "stipend," to make it seem lofty and grand, reflects the modern affection CEOs have for calling the cash they receive "compensation" rather than pay, and consultants and speakers insist on saying they are receiving "honoraria" rather than pay. There is nothing wrong with receiving pay! And no reason to employ euphemisms.

The stimulus bill will cost about $150 billion and consists entirely of deficit spending. The secondary euphemism being employed in Washington is to call the checks "tax rebates." But they are not rebates, meaning partial returns of monies paid -- they are pure borrowing. Which is to say, Congress will award most current American adults $300 to $1,200 each, then send the bill to future American adults. Suppose that instead, each American adult today set aside $300 at 5 percent interest. In 20 years, that money would grow to $800, and likely much more if invested in stocks. Such savings would be good for the U.S. economy, which, since 2001, has seen a negative national savings rate. China's national savings rate is currently almost 50 percent. Savings is one reason the Chinese economy is growing far faster than the U.S. economy; the U.S. savings rate is close to negative-4 percent, and our economic growth is sputtering.

But rather than help the U.S. economy grow in a generous way that forgoes a little today to gain a lot tomorrow, the American people -- through their representatives in Congress -- just reached into the pockets of future citizens in order to spend more on themselves right now. Explain to me why this is considered a populist action by Congress?

Bear in mind, the stimulus package announced last week is only an agreement between the two parties in the House. Lawmakers on both sides of the aisle in the Senate currently are scrambling to add their own pet projects to the legislation -- whenever a big spending bill moves, there's always a bidding war in which Republicans and Democrats vie to see who can stage the biggest giveaway. The damage to the national debt might get worse because what's happening now is the environment Congress likes best -- an environment of zero fiscal discipline. Lobbyists for retirees, who already are subsidized by the young, are complaining that their special interest isn't being showered with free money by the stimulus bill; lobbyists for pork-barrel projects that could never withstand logical scrutiny are maneuvering to wrap them in the flag and add them to the stimulus bill. By the time the stimulus bill leaves Capitol Hill, the young might be saddled with yet more debt so that members of Congress can congratulate themselves as they hand checks to politically connected fat-cat donors or to retirees already drawing out of Social Security far more than they put in, plus interest.

Next, recall that on Jan. 4, 2007, both houses of Congress agreed with considerable fanfare on the Paygo measure, which stated that under no circumstances -- under no circumstances, never, regardless of conditions! -- would Congress enact any bill that increases the federal debt. According to the Paygo legislation, the House and Senate are forbidden even to debate legislation that would increase the debt. ("It shall not be in order to consider any bill, joint resolution, amendment or conference report if the provisions of such measure affecting direct spending and revenues have the net effect of increasing the deficit …") Paygo rules specify that all bills causing appropriations increases or tax favors must be offset be spending reductions or tax increases. When Paygo was enacted, many members of Congress from both parties, prominently Speaker Pelosi, patted themselves on the back in public.

[Thanks to the United States Congress, the National Debt Clock has been spinning overtime.]

How long did this incredible resolve last? Six weeks ago, Congress passed a reduction of the Alternative Minimum Tax; the bill cut taxes by $51 billion but provides no offsetting revenues. Originally, the measure would have reduced the AMT for the middle class while raising taxes by an equal amount on the upper crust of venture capitalists and hedge-fund managers. All the revenue increases ended up deleted -- hedge-fund managers showered members of Congress with campaign donations -- but the tax cuts were approved. Congress ladled out the $51 billion entirely from deficit spending, then handed the bill to the young. Now, the stimulus package goes even further, at least $150 billion in gravy without spending cuts or offsetting revenue increases. Barely 12 months after pledging never, ever again to add to the federal debt, Congress will add at least $201 billion to the federal debt. The federal deficit for the most recent fiscal year, which ended before either of the new actions, was $163 billion. Congress has, in the past six weeks alone, added more to the federal debt than the entire federal deficit for the most recent fiscal year.It's impossible to be sure, but a rough guess might be that every dollar added to the deficit today represents two dollars subtracted from future economic growth -- which in turn means two dollars taken from the pockets of tomorrow's American adults. This is a cynical exercise, robbing future Americans in order to please voters today, and to inspire interest groups to make political donations to incumbents. When are citizens under 30 going to wake up to the disagreeable fact that the country's current leadership, of both parties, is giving them the shaft in order to heap special favors on current voters who refuse to live within their means? Then handing the young the bill.

The campaign in pictures and videos...

I'm just taking a poll: how many of us have pulled this move:




















So far, the Clintons haven't been able to pick up much dirt on Obama. The big one has been Obama's long-standing connections to Illinois power broker and sleazeball, Tony Rezko. I bet they weren't happy when someone found this picture (for the record this is not photoshopped):


And lastly, here's a Republican's attempt at reaching out to minority voters:


(Who let the dogs out? At least he didn't tell them they "can't touch this.")

And here's Giuliani wearing some of his less embarrassing atire...a yamaka:

Reich Blasts Clinton

Former Secretary of Labor and avowed Clintonite let it known where he stood in regard to the Clinton's recent attacks against Obama with this excerpt from his blog. (Reich, by the way, ran against a certain Mitt Romney in his attempt to become Governor of Massachusetts. Also, Reich was my professor for one day.)

"

Bill Clinton's Old Politics

I write this more out of sadness than anger. Bill Clinton’s ill-tempered and ill-founded attacks on Barack Obama are doing no credit to the former President, his legacy, or his wife’s campaign. Nor are they helping the Democratic party. While it may be that all is fair in love, war, and politics, it’s not fair – indeed, it’s demeaning – for a former President to say things that are patently untrue (such as Obama’s anti-war position is a “fairy tale”) or to insinuate that Obama is injecting race into the race when the former President is himself doing it. Meanwhile, the attack ads being run in South Carolina by the Clinton camp which quote Obama as saying Republicans had all the ideas under Reagan, is disingenuous. For years, Bill Clinton and many other leading Democrats have made precisely the same point – that starting in the Reagan administration, Republicans put forth a range of new ideas while the Democrats sat on their hands. Many of these ideas were wrong-headed and dangerous, such as supply-side economics. But for too long Democrats failed counter with new ideas of their own; they wrongly assumed that the old Democratic positions and visions would be enough. Clinton’s 1992 campaign – indeed, the entire “New Democratic” message of the 1990s – was premised on the importance of taking back the initiative from the Republicans and offering Americans a new set of ideas and principles. Now, sadly, we’re witnessing a smear campaign against Obama that employs some of the worst aspects of the old politics.
"

Maybe Nice Guys do Finish Last

The Democratic Party and all of its major candidates seems to have agreed to a basic platform:
-Repeal of Bush tax cuts
-Middle class tax cuts
-Universal Health Care
-Out of Iraq with all deliberate speed
- More Environmental Regulation
- Programs to move towards clean energies
- A pledge to keep an eye on corporate greed
- Appointment of judges who will maintain the separation of church and state

This is the same program that Gore had in 2000 and Kerry had in 2004. In some ways, it's also the program Clinton had in 1992. The Democrats, unlike the Republicans, believe that their platform can win and that the only reason they didn't was because of the unliked personalities of their former presidential candidates and their inability to fight an aggressive campaign. That's why this nomination battle has been all about personality.

As such, I leaned towards Obama. Obama ran a campaign that we would all like to see more of: he stayed away from personal attacks, he raised campaign money (and there was a lot of it) from small donors, he dealt firmly and fairly with complex issues, he made his appeal to a wide range of voters, and he made inspiring speeches at the most appropriate times. Clinton, on the other hand, ran the type of campaign that we all hate: after Iowa, she began attacks that were personal and highly distorted, she raised most of her money from corporate and large donors, she used scare tactics to confuse issues and simplify them, and she had clearly changed positions to increase her likelihood of being elected.

But if Machiavelli has taught us anything, and honestly he hasn't taught us much, is that while political decisions may be moral, actual political maneuvering is always amoral. In other words, in politics, the ends (if righteous) will justify the means. I should have kept that in mind before I predicted that Obama would be the next president.

What the Clintons understand, and understood, is that you can't beat Republican sludge with sanitized feel-goodedness. Unless you are a masterful politician, you can't win the political battles unless you're willing to get a little bit dirty. In reality, Clinton's attacks have not been that effective (what has been much more effective are the anonymous campaign materials that have convinced a large percentage of the population that Obama is Muslim), but they have shown Democratic voters that Obama won't be able to handle the heat. What the Clintons are throwing at Obama now is nothing compared to what he will get when he runs against a Republican. Now, I think that McCain, the likely Republican nominee, has ran remarkably clean campaigns so I don't think he'll do much mud throwing, but the Republican machine (Limbaugh, Hannity, O'Reily, Fox News, etc.) will do more than enough to make up for this shortcoming. And what Clinton has shown is that Obama cannot even handle her attacks. In this light, Democrats are moving towards a candidate that they know can put up a fight.

Thorough Article from Joseph Stiglitz

How to Stop the Downturn

By JOSEPH E. STIGLITZ

AMERICA’S economy is headed for a major slowdown. Whether there is a recession (two quarters of negative growth) is less important than the fact that the economy will operate well below its potential, and unemployment will grow. The country needs a stimulus, but anything we do will add to our soaring deficit, so it is important to get as much bang for the buck as possible. The optimal package would contain one fast-acting measure along with others that could lead to increased spending if and only if the economy goes into a steep downturn.

We should begin by strengthening the unemployment insurance system, because money received by the unemployed would be spent immediately.

The federal government should also provide some assistance to states and localities, which are already beginning to feel the pinch, as property values have fallen. Typically, they respond by cutting spending, and this acts as an automatic destabilizer. Federal assistance should come in the form of support for rebuilding crucial infrastructure.

More federal support for state education budgets would also strengthen the economy in the short run and promote growth in the long run, as would spending to promote energy conservation and lower emissions. It may take some time to put these kinds of well-designed expenditure programs into place, but this slowdown looks as if it will last longer than some of the other downturns in recent memory. Housing prices have a long way to fall to return to more normal levels, and if Americans start saving more than they have been, consumption could remain low for some time.

The Bush administration has long taken the view that tax cuts (especially permanent tax cuts for the rich) are the solution to every problem. This is wrong. Tax cuts in general perpetuate the excessive consumption that has marked the American economy. But middle- and lower-income Americans have been suffering for the last seven years — median family income is lower today than it was in 2000. A tax rebate aimed at lower- and middle-income households makes sense, especially since it would be fast-acting.

Something should be done about foreclosures, and appropriately designed legislation allowing those who have been victims of predatory lending to stay in their homes would stimulate the economy. But we should not spend too much on this. If we do, we’ll wind up bailing out investors, and they are not the ones who need help from taxpayers.

In 2001, the Bush administration used the impending recession as an excuse to cut taxes for upper-income Americans — the very group that had done so well over the preceding quarter-century. The cuts were not intended to stimulate the economy, and they did so only to a limited extent. To keep the economy going, the Federal Reserve was forced to lower interest rates to an unprecedented extent and then look the other way as America engaged in reckless lending. The economy was sustained on borrowed money and borrowed time.

The day of reckoning has come. This time we need a stimulus that stimulates. The question is, will the president and Congress put aside politics to get the job done?

A diatribe from TMQ

"Suppose the General Manager of the Miami Dolphins Awarded Himself the Same Bonus as the General Manager of the New England Patriots: Last week, this story appeared buried inside the business pages of The Washington Post. Why wasn't the story on Page 1? The Post reports that the blue-blooded five, Wall Street's five top investment banking houses, awarded their management $39 billion in bonuses for 2007 -- a period when those firms combined to earn investors about $11 billion in profits. Merrill Lynch lost $8 billion in 2007, Morgan Stanley $3 billion and Bear Stearns $230 million, yet the executives of these companies were showered with billions of dollars in bonuses. Otherwise, they would refuse to do any work! Which, apparently, would be in shareholders' interest. Merrill Lynch and Morgan Stanley could have done better by their shareholders in 2007 by simply purchasing Treasury bills; a software program designed to make simple conservative investment decisions about market-following mutual funds would have performed better in 2007 than the top management of most investment banking houses. And the software program would not have paid itself billions of dollars in bonuses for screwing up! (TMQ owns no stock in any of the mentioned firms.)

It's one thing when profitable firms shower money on their CEOs and other top brass; often the amounts are indecent, but as long as shareholders come out ahead, the executives have at least some justification for their windfalls. But in the modern milieu of corporate kleptocracy, even when the company does terribly and the CEO makes decisions that blow up in the firm's face, the CEO awards himself hundreds of millions of dollars, anyway. Why is this not seen as white-collar crime?

Last week's buried Post story included this priceless quote: "'To many people, [the bonuses] will be shocking and questionable,' said Jeanne Branthover, managing director of Boyden Global Executive Search. 'People in New York in the world of investment banking will understand it. It's critical that pay is still there or you're going to lose really good people.'" Beyond that executive headhunter firms such as Boyden have a self-interest in running up CEO pay -- this can increase the search firms' headhunting commissions -- consider the reasoning: OMG, we can't lose the really good people who cost our shareholders billions of dollars with dim-witted decisions! The notion that top corporate managers must be paid fantastic amounts because they possess incredible, astonishing expertise often is used to justify CEO pay, even when the managers who claim the incredible, astonishing expertise make foolish decisions. "We'll put billions of dollars of money entrusted to our care into subprime gimmick mortgages backed by no documentation of income; my incredible, astonishing expertise tells me this is totally safe!"

If corporate managers who screwed up received $5.85 an hour, the federal minimum wage, for the year in which they screwed up -- that is, if their wallets were at risk when they perform poorly -- then they might fairly argue for huge bonuses when they perform well. But there is no evidence that the people who made the big investment calls on Wall Street last year (except at Goldman Sachs, which avoided the subprime mess) are any better at what they do than people chosen at random off a Brooklyn street. You bet "people in New York in the world of investment banking" will understand huge executive bonuses paid in the same year as huge losses. What's happening is basically a hustle, intended to enrich the executives while separating the investors from their cash. "People in New York in the world of investment banking" understand that, all right!"

More Election Coverage

Item #1: Who is Reaganer?
All of the Republican candidates seemed to have given up talking about "issues" or even themselves, and instead have focused on who is more like their hero Ronald Reagan. The way they were talking about him in last Thursday's debate in South Carolina, you'd think Reagan was the second coming of Christ. Everything that Reagan did was brilliant and he is the ideal president that they all aspire to be. I find this to be very disappointing.



I hold the following opinions regarding our nation:
1. Government should strive to treat all of its citizens equally.
2. Government should ensure the prosperity of all of its people.
3. The president should be somewhat knowledgeable and aware of important events.
4. Only people who are not wickedly corrupt should be appointed to serve in high public office
5. The Government should make long-term plans that go beyond the current election cycle in order to safeguard the prosperity of future generations
6. The President should not be viewed and treated as incompetent by his closest advisers.
7. Government and the President should be honest with its people.
8. The Executive Branch should not try to ignore and directly disobey the Constitution (for example, by doing things expressly forbidden by Congress, like training para-military groups in Central America to overthrow democratically elected governments or selling missiles to our nation's #1 enemy)

While many people may not ascribe to these principles, ostensibly this would include all the major candidates for President in the Republican Party, if you do believe in these principles, as I do, you would have to grade Reagan to be one of the WORST, if not THE WORST, President in American history (the current administration exempted). As long as Americans continue to think that Reagan was anything more than a horrible president, future candidates will continue to use Reagan as a historical precedent for their insane policy proscriptions and in fact use Reagan to legitimize those policies.

While I'm at it, let me tackle two more myths related to Reagan:
-Myth #1 Reagan won the Cold War
hehe...I never get tired of this one. In 1991, after leaving the presidency two years before, Reagan finally won the Cold War by charging up a mountain killing Russia's champion warrior, Mikhail Gorbachev, and conquering the last bastion of communist resistance in the Kremlin.
The way people talk about Reagan and the Cold War, you'd think this actually happened. The reality is quite different. Most idiots who claim that Reagan won the Cold War do so based on three theories:
1. Reagan was tough with the communists and they finally caved in because they couldn't take the heat.
2. The election of a fervent anti-communist like Reagan showed that the U.S. was not willing to back down. This lead to the Russians losing morale and giving up.
3. Reagan's massive military buildup could not be met by the Russians, so they folded up rather than compete.

Let's go through these shall we:
First, Reagan did not do anything different with Russia than his predecessors. End of story. It could be said that Reagan used tougher rhetoric, but in reality Reagan was never any harsher with actual Russian officials than say Truman, Eisenhower, Kennedy, Johnson, Nixon, or Carter. All of his predecessors were very tough with communists. More than anything, Reagan used his rhetoric to get elected not to really push around communists, whom he negotiated with regularly.
Second, according to most analysts, the election of Reagan was not seen as very important by most high-ranking communists. The only group that it seems to have affected were those in the military who called for MORE confrontation with the U.S. and demanded MORE influence within the Politburo. Taking into account that the military nearly put an end to Yeltsin's attempt to break apart the Soviet Union, it could be argued that Reagan's bellicose personality nearly entrenched communism for another generation.
Third, it is true that the Soviets backed down from Reagan's ridiculous military buildup. How this lead to the fall of communism is not exactly clear. It still could be said that the buildup did lead to the end of the Cold War, but two things should be kept in mind: one, this was an unforeseen consequence (Reagan had no clue that the Russians were even capable of backing down) and two, the reason the Soviets couldn't compete with the U.S. in military expenditures was that its economy and political support was collapsing. It is somewhat ironic that conservatives that credit Reagan for ending the Cold War neglect to mention that what really ended the Cold War was the inefficiencies and contradictions within communism and a command economy.


Myth #2: Reagan= Tax Cuts, Tax Cuts, Tax Cuts, and more Tax Cuts
There have been many surreal moments during this election cycle. I have two favorites. One was an exchange in a debate between Fred Thompson and Mike Huckabee that went like this (paraphrased):
Thompson: I fear that Gov. Huckabee may not be willing to follow the Reagan model. He raised taxes in his state and he has endorsed liberal economic policies.
Huckabee: In Arkansas we cut taxes 63 times. And trust me, there were plenty of people who were not happy about it, but I still cut taxes because I believed that our government was too big.

In other words, 63 tax cuts was not enough.
The other also involved Huckabee, but this time with Romney:
Romney: Now answer me frankly, did you or did you not raise taxes in your state?
Huckabee: I built roads and bridges and schools-
Romney: That's political talk. Are you going to answer the question?
...
Huckabee: When I first took office we did need funds for some improvements, but once those were finished I worked to cut the fat out of the state's government. I cut taxes 63 times in my ten years as governor.

This is the state of the debates between Republicans. Who can cut taxes faster, quicker, more often and craziest deserves to be president. 'What 9.2 trillion dollar debt?'

I won't bother to mention how stupid this is and that supply-side economic theory was discredited 15 years ago and that every reasonable economist thought the Bush tax cuts to be insane and that the Bush tax cuts have been a huge failure, but I will mention Reagan. Reagan raised taxes. Twice. As Governor of California, not only did Reagan raise taxes but he did little to prevent the continued growth of state government. As President, Reagan repealed his own tax cuts once it became obvious that...well.. they were insane, making the country bankrupt, and destroying the economy.

Item #2: Civil Rights Faux Paus

Recently, Hillary Clinton made the following statement: "Dr King’s dream began to be realised when President Lyndon Johnson passed the Civil Rights Act of 1964. It took a president to get it done."

There are three things to be said about this:
One, I don't mind politically incorrect statements...unless they are from a politician ...from a party that I'll be voting for.
Two, related to the first, why the hell did she say this? Why is this even relevant. Is she writing a book on the history of the civil rights movement? She's running for president, why do I need to know her particular interpretation of historical events. What was her point? The closest I've come to answering this question is that she's comparing MLK to Obama and pointing out that change only occurs when an experienced leader (like Johnson) is able to work with the system and get things done. All I have to say to that is...Hillary Clinton is no Lyndon Johnson.
Three, she's just wrong. Her interpretation is simplistic and not entirely accurate. The Civil Rights movement was a grassroots movement who's major leaders included Martin Luther King. There would have been no Civil Rights Act without pressure from prominent figures like King and there would not have been a Martin Luther King if not for the individuals who risked their lives and livelihood to stand up for justice on a daily basis for decades. LBJ just didn't wave a magic wand and get civil rights legislation passed. The turning point came when Congress was willing to go ahead with it. This happened first with the grotesque violence that occurred on the March to Selma, which spawned the passage of the Civil Rights Act, and the killing of Civil Rights workers in Mississippi, which spawned the Voting Rights Act. In fact, LBJ was UNABLE to get civil rights legislation passed. If anyone should be credited, it should be the racist Southerners whose violence outraged the nation enough to forego their own racist inclinations and allow their representatives to pass some meaningful legislation. I will give LBJ credit for one thing he did all on his own: affirmative action. I should point out that the executive order that established affirmative action took no wrangling or expertise...it just took will to do it.

Item #3: Romney's last stand
Today is the Republican Primary in Michigan. If Romney doesn't win, I will consider his candidacy over. If Romney can't win in Iowa where he spent more campaign money than anyone in that state's history and he can't win in a state that neighbors one that he was governor of and has overlapping local news and he can't win in Michigan where his father was a three time governor, where can he win?

Pathetic

During last night's debate, Hillary needed to rescue her campaign. Going in, there were two questions: would she go after Obama and how would she change her message. The answer to the first came with the first question of the debate. Hillary went after Obama and accused him of changing his stances on key issues. Obama, who by the way has been the most consistent on his stances, parried these attacks with some stammers along the way. But then came the surprise: Edwards came to Obama's defense! And he did so aggressively. I've watched a lot of debates and I've watched a lot of debates with these candidates, and I don't think I've ever seen a candidate defend another candidate so strongly...and effectively. Clinton was caught completely off-guard, as well she should have. Edwards campaign is basically falling apart. His post-Iowa speeches have gotten even more bitter and angry. His only hope is to emerge as the true-reform candidate. To do that he would need to deal with his biggest competitor, the even more charismatic Obama. Yet, he sided with Obama and began throwing punches at Clinton. Unless Edwards is going for another VP nomination, which I find unlikely since neither he nor whoever wins will want to bring him back after his disappointing effort in the same role 4 years ago. Honestly, I can't think of a reason why Edwards would have done this, unless he just doesn't like Clinton, which is possible.

In any case, Edwards made Clinton look ridiculous and she quickly stopped that line of attack. Next came her new message: she was also the candidate of change, but she had the experience to get it done. I don't know if that message will work...I don't know if it will work in New Hampshire and I don't know if it will work with Democratic voters. All I do know is that it didn't work for me. While the idea of Clinton--that of a seasoned reformer--sounds good and I have no problem with it, unfortunately it has little relation to reality. Hillary has almost no political experience: after graduating with a legal degree, she went to Washington as an aide for the impeachment committee of Richard Nixon. She then married Bill and went to Arkansas where she worked with a children's advocacy group before joining a firm and becoming a legal consultant. During this time, she accumulated a small fortune while her husband furthered his political career, making profits from several investments and even sat on the board of directors at Wal-Mart and TCBY. She continued her triple life as legal representative-child/education advocate-wife of a successful politician until her husband was elected president in 1992, after which she devoted herself full-time to politiking and being a First-Lady. While Clinton may have been the most prominent First-Lady since Edith Galt (wife of Wilson), to pretend that everything her husband did was part of her doing is a bit of an overstatement. Undoubtedly, Hillary's counsel was valuable, but what made Clinton such a powerful politician was his natural charm. In 2000, as her husband left office, Hillary became senator of New York. It is the only political office she has ever held. While Clinton clearly has had more experience than any other candidate around the executive office, she is hardly a seasoned veteran who has successfully produced change. In fact, her most prominent post was as Chairwoman of the Task Force on National Health Care Reform, which turned out to be an unmitigated failure. Personally, I don't find Hillary's resume that much more impressive than Obama's who worked as a community organizer (among other things) from 1983-1996, was a state legislator from 1998 to 2004 and has been a senator since 2004. On top of all this, one must consider that Bill Clinton himself was unable to pass all the "change" that he wanted (even with a Democratic Congress and Senate in his first two years). In sum, I don't find the claims that Hillary is a seasoned veteran with a track-record of bringing people together to be all that convincing.

This was not originally meant to be slam on Hillary, but I guess it has somewhat become that. Honestly, I just found her so irritating in last night's debate. While I'm at it, I would also like to go through Hillary's attacks on Obama's stances. Throughout the campaign, Hillary has made two major attacks and seems to always point these out when asked to locate differences between the two candidates. She did so last night. Honestly, I find her characterization of those differences insulting...insulting to my intelligence. The first one relates to social security. To see a full discussion of why social security is in no danger, see my diatribe about it here. One of the things I mention is that the easiest way to save it would be to raise the ceiling upon which the payroll tax applies to. I don't want to repeat myself, but suffice it to say, it is a very fair way to handle the problem, and only a crooked tycoon would find it unfair. It was on this issue that Hillary accused Obama of trying to raise taxes. Just so it's clear, that was a disingenuous and dishonest attack straight out of the tactical handbook of the "vast Right-Wing conspiracy." The second item relates to Health Care. Let me take a quote from another of my diatribes on healthcare: "Because his plan is not compulsory, strictly speaking, Obama's plan is not a true universal health insurance coverage plan. This is more a technicality more than anything else. Look for all the other candidates to exploit this in debates." How perceptive and prophetic of me. There is a minuscule, completely meaningless part of Obama's plan that strictly speaking does not require everyone to get health care. In reality, if it turns out that this is a big problem, it could easily be changed. All it does is give people some flexibility in their health care choices at the cost of preventing the plan from being called a "universal" plan. To harp on this intricacy is also disingenuous. I just expect more intellectual responsibility from my candidates.

No Surprise: Republican Campaigns Getting Dirty

Despite not really having any good candidates, the Republican party is trying to hurt itself further through random acts of cannibalism. Vicious mudslinging has intensified in the last week and will probably heighten as the stakes become higher and candidates have less to lose.

For whatever reason, almost all the Machiavellian cynicism is centered around Mitt Romney: both as a victim and as a perpetrator. Romney has suffered from underhand tricks throughout the campaign as other candidates have tried to scare off "Evangelicals" by accenting his Mormonism. Although it's not clear if Huckabee is sending signals to his base or if he is just that stupid, but in several instances during debates and stump speeches, Huckabee has brought up Mormonism when it was completely irrelevant. Famously, he questioned if Mormons believed that Jesus was the brother of Satan, but throughout debates, with a wink and a nod, he has also focused on his religious beliefs (he is a former Baptist Pastor) with the assumption that some of the candidates beliefs (namely Romney and Giulianni) are quite different. Additionally, many religious leaders that have given their support to Huckabee and other Baptists, have given speeches that focus on the differences between Mormonism and mainstream Christianity, often referring to it as a "cult." Speaking of Giulianni, who has also been the victim of campaigns that have attacked his stance on abortion, there is some evidence that he is behind some of the more unusual underhanded tactics, such as a false Christmas Card sent to South Carolina Republicans, wishing a "Happy Holiday" (rather than a "Merry Christmas") and includes controversial passages from the Book of Mormon and reports to be supported by the "Boston Massachusetts Temple." There have also been reports of phone calls to Iowa voters on the night before the Caucus that included praise of John McCain and some disparaging remarks towards Romney and Mormonism.

But, Romney is no innocent victim. In Iowa, Romney flooded the airwaves with political ads, most of which were negative and most of which were directed towards Huckabee. He is repeating his failed strategy in New Hampshire with John McCain. In South Carolina, Romney has employed the support of nefarious political consultant, Warren Tompkins. Tompkins, a former trickmeister for another dirty trick artist, Lee Atwater (the famous campaign organizer for George H.W. Bush who created the Willie Horton campaign, one of the most egregious examples of race-baiting in the last 25 years), was linked to shenanigans in South Carolina in 2000 where anonymous phone calls were made to Republican voters that claimed that McCain had an illegitimate black child (McCain had adopted a son from Bangledash). Tompkins was caught red-handed in September for setting up a ridiculous anti-Thompson blog called Phony Fred that featured the candidate in different costumes. As the race heads towards the South expect more dirty maneuvering.

Remember, for every dirty trick discovered, there's probably 10 more vicious ones that will never be known publicly. I'm sort of glad that Republicans have to resort to such dirty tactics...they're desperate.

Iowa Diatribes

I think recent events deserve some diatribing...let's go through some:

Item #1: The Obama Surge
Only 3 months ago, Hillary Clinton had pretty much wrapped up the Democratic nomination. So, what just happened? Clinton essentially had four things going against her:
1. Too far ahead too early
2. Trying to wrap up the primaries by exposure as a national candidate
3. An overrated self-sense of charisma
4. Peculiarities of the Iowa caucuses

Quite frankly, Hillary peaked too early. It's the same mistake that Dean made 4 years ago. By becoming THE candidate in October, Clinton left herself open to constant attacks for 3 months. These eventually brought her down and made her look vulnerable.

Hillary expected that her high poll numbers across the country would give her the automatic support from those essential early states, like Iowa. This was a serious blunder, because recent elections and the crunch of this primary schedule meant that early momentum was essential, especially in Iowa. Kerry and Edwards made their campaigns in Iowa 4 years ago. This year, Edwards and Obama focuses almost all of their resources in Iowa. Clinton did not meet the challenge and the tactical error could cost her the election.

Hillary, by most accounts, was exceptional in the like 300 debates the Democrats had leading up to yesterday. She, the media, and her campaign staff assumed that these skills would translate to stumping. Unfortunately, they all forgot that she has almost no grassroots political experience beyond campaigning alongside her husband. Iowa is a door-to-door type campaign. Hillary simply did not appear likeable and personable in Iowa's diners, cafes, and fairs.

The Iowa caucus is very unusual (more on that later), but one of its peculiarities is that to get votes within a caucus a candidate must get around 15% of the voters. If they do not, those voters disperse and head to other candidates. Since people voting for candidates other than Hillary were already choosing an anti-Hillary/frontrunner candidate, they were more likely to join the Edwards and Obama groups. Perhaps if a straight vote were given Hillary might have won or at least come in second as there would be more splitting of the vote. As it was, Biden, Kucinich, and Dodd had a combined one caucus vote for them (basically 0%.) If those voters were not allowed to move to other candidates, each of these candidates would probably have gotten 2-3%.

On all these issues, Obama had the advantage. He became the consensus alternative choice, he focused his energy in Iowa since he began campaigning (he only opened a California branch a couple months ago, for goodness sake), he was more likeable on a personal basis where he was given more than 30 seconds to explain his positions, and he benefited from the Iowa caucus system.

Item #2: Iowa?
To the outsider it may seem odd that Iowa, a state with a population of 3 million (1/30th of California) that is 95% white, has garnered so much attention. Those in the know will recognize that Iowa is only important because it is first. The next question is why does Iowa deserve to be first?

The quick answer is that it doesn't. Iowa by almost any measure is not representative of the nation at large. It unfairly benefits from millions of dollars being spent in the state every 4 years by politicians and media outlets. And it gives a small minority (despite everything only about 1/10 of eligible voters in Iowa actually showed up to caucus) incredible power. It also has a voting system that is as quaint as it is ridiculous: voters go to someone's house at exactly 7:00, get into groups, argue around a dinner table, and finally the entire caucus chooses one candidate. There is no anonymity, voters are encouraged to switch sides by their neighbors who just made them that delicious fruitcake for Christmas, and the chief activity of each candidate's campaign staff on this day is baking cookies.

Yet, I think it is fantastic. I just love the Iowa caucuses. Iowa forces the candidates to meet real people. Aside from the mega-weekend leading up to New Hamphire begun this morning, this will be the only time that candidates will be going to door to door, shaking hands at Denny's, or holding rallies in a family room. And I must say, Iowans, or at least those that vote, take it very seriously. It may sound incredible, but it is not uncommon or really difficult for a voter to meet EVERY candidate. Iowans do for America what realistically cannot be done after New Hampshire: they figure out if candidates are 'real.' They have real conservations with them. They get to see them outside of the glamor of tv commercials and they force the candidates to remember who they are serving and how politicians are supposed to get people's vote.

My only complaint with Iowa is that every serious candidate must endorse ethanol, despite the fact that it uses more petroleum than it saves simply because the state is the leading producer of corn in the nation.



Item #3: Hucka-who?

I've long thought that a social conservative with an economically populist message would have their way paved to the Whitehouse...if he/she were a Democrat. Unfortunately, Huckabee is in the wrong party. He's also, in my estimation, not a serious candidate. Don't get me wrong, what Huckabee did in Iowa was astonishing: the least funded Republican in the field just dominated the primary despite promising to make Steve Colbert his VP (not seriously, I assume), planning to throw out the tax system with the bath water, defending creationism, comparing Rowe vs. Wade to the holocaust, being a member of a rock band called "Capitol Offense," asking Mitt Romney in a debate if Mormons believed Jesus was the brother of Satan, and a hare-brained immigration reform scheme wherein immigrants would be required to return to the country they originated from for one day.
Even Huckabee must realize that he has little hope of competing nationally. Huckabee's economic policies will alienate the libertarian wing of the party that is already uncomfortable with his social conservatism. Huckabee won Iowa because of the support of evangelicals. This support will carry him through the South and parts of the Midwest, but without attracting swing voters that Republicans are going to need in droves, most will give up on him as they realize he has too much baggage.

Item #4: The Fair Tax
I'm amazed that the media hasn't talked about this more, but Huckabee has a clear plan to reform the tax system. It is not a new idea, but certainly is a radical one. Quite honestly, I don't know how I feel about it yet. All I can say is that it has long been the dream system for economists who specialize in the tax system.
For a more thorough description of the plan, I would recommend viewing this surprisingly good summary from wikipedia. Basically, the plan would eliminate income taxes (and with it the IRS), and just have people pay sales taxes (of about 25%). To make the tax progressive (since poorer people spend a higher percentage of their income on necessity consumption), a tax rebate would be given to poor families based on family size. I don't know if this is a good idea, but it is a different idea. It would encourage saving and investment, get rid of all the expenditures associated with the IRS, and bring in offshore accounts (which some estimates say are as high as $11 trillion.)

Obama will have my vote

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