Thursday, January 31, 2008

Do we want McCain to win? No.

Someone I know, a swing voter no less, has suggested the following:

One point you may not have considered. For most of the past 40 years, we
have been protected from most presidents' extreme positions by
Congress. Often it has resulted in gridlock, which was preferable to
the President's desires.

It is almost a foregone conclusion the next Congress will be heavily Democratic. The numbers in the Senate are overwhelming. Hilary with this Congress would be
dangerous. Viva McCain!


There is some truth in this, particularly if you think America is basically on the right path and needs only a few tweaks rather than more radical surgery. I believe it needs some radical surgery.

First, I will stipulate that after the 2008 elections the dems will control both houses. They are very likely to keep the House; there have been a bunch of GOP retirements.
http://www.realclearpolitics.com/articles/2008/01/house_republicans_face_late_ex.html

In the Senate, it is almost a sure thing that the Democrats will expand their narrow majority, as the GOP is defending many more seats, due to their success in 2002 (Senate seats are up every 6 years) and the Republicans are defending several tough seats the democrats are favored to win, while the only democratic seat which the GOP has a good chance to win is Mary Landreau's (my guess is she loses).


So given a democratic congress, why do I think the country is so broken as to risk total democratic control under Hillary (or Obama)?

First, by far most important, and last, if necessary, is health care. Many of America's short and long term problems begin and end with health care. America as a nation now spends more than $2 trillion a year, or more than 1/6 of our GDP on health care. And, in my opinion the system is badly badly broken. This is one of those issues where the GOP is out to lunch and the democrats are basically sensible. Even "socialized medicine" (ever hear of Medicare? VA care?) is hugely preferable to the mess we have now. Either of the dems will push hard with a dem congress to begin to begin to fixing it. McCain likely won't. We just have to fix health care!

Second, and almost as important, maybe even more important, is that sad, sick state of the GOP itself. Argue with me if you wish, but the GOP is sick-- this is the party that used to stand for restrained spending and balanced budget for heaven's sake!!! Now its the party where Rudy Giuliani had to pretend to believe on the campaign trail that his income tax cuts in New York caused city revenues to soar (It wasn't the soaring stock market and the booming economy, but CITY TAX CUTS that caused city revenues to soar). This is just idiotic, rather like believing in FLYING PINK UNICORNS. (See my earlier post about stupid things said in a GOP debate). The modern GOP is wedded to pretending to believe in idiotic nonsense like this, and plenty of the masses of GOP-voting dittoheads actually do believe it. Well, people believe in the earth being flat, and that we were not evolved from primates. Some people will believe anything (a dispiriting number of the people who will believe anything in America these days are Republicans).

It is my opinion that a big democratic victory in November, including the Presidency, might well cause the Republicans to actually rethink who they are and what they stand for. This would be a very good thing. America has only one sensible party on policy these days, and that party, the democrats, has flaws all its own, notably backbone. In a 2-party system, it is disastrous to have one of the two parties go off of the deep end believing in flying pink unicorns. And this, along with health care, is why a president McCain could be very bad for America, even if McCain himself wasn't.

Wednesday, January 30, 2008

I sent my aforementioned friend Andrew, the one so instrumental in my thinking on so many issues, an e-mail bragging about how right I was that McCain would win the GOP nomination. Given my record of getting the last 2 presidential elections, and other races, quite spectacularly wrong, he asked what I would do if I was wrong. As he put it, certainty should have a price. And he was quite right.

Here's what I told him in response:

Assuming McCain's health does not change dramatically (assassination god forbid, heart attack), if he is not the nominee, I will do the following (with Andrew agreeing to do nothing in return except profusely give me my props when McCain wins):

1) I will buy Andrew a nice lunch/dinner the next time he's in the Empire State; AND

2) I will purchase Romney (or the eventual GOP nominee's) t-shirts and buttons and wear them, conspicuously, among my friends, at Central Park, and the like; AND

3) Purchase a Red Sox cap and wear it to at least one Yankee game, preferably a Yankee-Red Sox game.

I'm on record here, and putting a little money and a considerable amount of pride on the line. I'm not merely predicting McCain to win the nomination, I'm quite damn sure of it, and putting myself out there.
Yesterday's GOP primary results in Florida have all but ended the race. As readers of this blog knew a few weeks ago, and the rest of the country will find out in 7 days, John McCain will be the GOP nominee. I repeat myself; it is an incredible political comeback. Everyone, very much including yours truly, left McCain as roadkill as recently as last November. Now he's the certain nominee. Although Romney only lost by 5 in Florida, McCain had to contend with Giuliani, who pulled down 15% of the vote. Giuliani is dropping out today and endorsing McCain. His endorsement will be worth a little. McCain is up in the polls, big, in the big states in next week's Super Duper Tuesday primary. He's up 9 in California, 18 in New York (where Giuliani's leaving the race assures McCain of a win in my view, and a big win at that), and 18 points in New Jersey. The race, as my readers learned, before the rest of the country, is over. Its McCain.

Monday, January 28, 2008

The Federal Reserve Open Market Committee, which sets the key short term interest rate, is meeting this week, with the meeting concluding early Wednesday afternoon. The Fed will, as markets expect, cut short term rates a further 50 basis points (1/2 a percent) to 3%. This will be the lowest rate since May of 2005, and will cap a remarkable cut of 1.25 % in just 9 days, a truly breathtaking move.

Despite all of the pronouncements to the contrary by Bernanke and Treasury Secretary Paulson (who, unusually for a Bushie, has credibility with the wider world), the powers that be are in a state that can be fairly stated as just BARELY short of full scale panic over the impact of the subprime mortgage fiasco and the impacts of the credit crunch on the overall economy. From a policymaker's point of view nothing is worse than a financial institution led recession because it so hard to fix. If banks and other lenders can't or won't lend money, our economy simply doesn't function. We Americans are just addicted to easy credit. The fed well understands all of this, and is well aware of the lessons of Japan in the early 1990s--where a MASSIVE bubble in commercial real estate burst, banks' balance sheets went in the toilet, but the banks and the government took many many years to face up to it all. The result was essentially a 10-year long economic slowdown. Remember all of the news articles about the Japanese economic system being the best and taking over the world? Read any lately? Not so much.

It is my view that the fed is just short of terrified that major financial institutions such as Citigroup and Merrill Lynch could suffer enough losses to really impair their role as lenders or financiers of lenders, and that could have huge knock-on effects. I also think that the fed was concerned last week about a market crash, literally. That fear has likely not left either, which is why I'm very confident that the fed won't shock and disappoint markets this week by keeing rates the same. There is some change they signal caution by only cutting by 1/4 of a point, and a smaller chance they push the panic button in the open and cut another 3/4ths. But 1/2 a point is much the most likely, and coupled with cash infusions for the financial institutions, the bleeding may well be slowing down.

Watch my blog for a post about the idiocy of the agreed stimulus package.

Sunday, January 27, 2008

I just had a flash of inspriation. First the latest news. Obama SMOKED Hillary in South Carolina. He took her out behind the woodshed and administered a good old fashioned whooping. Hillary went back to Bill, crying.

The reasons are simple: Obama won African American voters. They constituted 53% of the vote, and 80% of them went for Obama.

http://www.realclearpolitics.com/horseraceblog/2008/01/demography_and_the_democratic.html

Addtionally, Bill's work on the campaign trail was very poorly received, particularly among black voters and late deciders. In a very ominious sign of things to come, voting has become badly polarized by race. According to the Jay Cost piece linked to above, the entrance poll shows that white women broke decisively for Clinton (42% to her, 36% to Edwards, 22% to Obama). Edwards won the white male vote, and Clinton and Obama were in a statistical tie for second.

EDWARDS WON THE WHITE MALE VOTE. EDWARDS!!! You know, the guy in a DISTANT third, that no one pays any attention to anymore. White male voters, at least in South Carolina, were so turned off by the mudslinging (I am assuming) that they went for EDWARDS. ARE YOU LISTENING, CLINTON CAMPAIGN-- you are turning people off! KNOCK IT OFF.

Now to my flash of inspiration. When Clinton was leading in the national polls by wide margins, she was running a positive, rather bland campaign, highlighting her experience and Obama's inexperience, while occasionally floating the drug non-issue. Floating the drug stuff was of course dishonorable, but the campaign's heart wasn't in it, and the campaign was going well enough as far as anyone could tell. When Obama won Iowa, and began to close nationally, the Clinton campaign went into attack mode, with Bill as chief attacker. They successfully injected race into the campaign, in a variety of seriously distasteful ways. As Dick Morris has pointed out, Bill's a southern politician, and well understands how racial politics works. When he analogizes Obama's big victory to Jesse Jackson's in 1984, he is telling the world that Obama is a black candidate who did well with a highly black electorate, and never you mind any appeal to whites he may have.

As Dick Morris and others have agreed, this process is apparently working. Black voters have swung hugely to Obama, while Clinton has made gains among whites. All very sad in a democratic party primary.

My inspiration? Hillary intends to make Obama her vice. It all then makes senses. ASSUMING he'll take the job, and with Bill around Hillary's vice may be a very invisible figure! Still, if he would take it, and he well might, one would imagine that any racial and other wounds would be healed in a nanosecond. I know precious little about how the mass of black voters will react, but I am assuming that there would be just HUGE enthusaism among potentially alienated black voters about a Clinton/Obama ticket. The rest of the democratic base should be reasonably happy to very happy as well. There just isn't a downside.

Up until now I have been assuming that Hillary did not want Obama as her vice, because I assumed she wanted a yes man, and Obama is a LOUSY yes man from what I know of him. Perhaps I was right. But circumstances change, and I am really beginning to think that Bill has impressed upon her that winning at all costs comes first, and healing via Obama can come later.

Tuesday, January 22, 2008

Today the fed cut short term interest rates by 3/4 of a point, or 75 basis points. I am still in SHOCK that they moved so much. I STRONGLY approve of this move, and have advocated sharp interest rates cuts for a while now (though too damn lazy to post to the blog on this, to my shame!)

The TIMING of this move was to support the markets. The markets in Europe and Asia plummeted yesterday and today, and panic must have been setting in at the fed. But this move (or at least 50 basis points) was surely coming at the scheduled meeting next week in any event. But by rushing this through between meetings, the fed told the markets (1) we get it, the economy is in recession, and we need to move and move big to stimulate a recovery and shorten any recession; (2) that interest rates will end up going even lower than they are now (had the fed not wished to signal this it would have implied that the downward part of the interest rate cycle is over. Instead, the fed in its statement implied the opposite.
http://www.federalreserve.gov/newsevents/press/monetary/20080122b.htm)

Changes in policy by the federal reserve act to change things in the real economy with a time lag of a bit over a year. The fed began cutting interest rates (easing) on September 18th.
http://www.federalreserve.gov/newsevents/press/monetary/20070918a.htm

So the effects of the federal reserve's interest rate moves should begin to be felt sometime late this year or early in 2009. This is depressing, but is a reality of monetary policy. The recession we are likely in is baked in the cake, and there's nothing the fed can do to prevent it, although it has now done a fair bit to ensure that it does not last too long.

Although it seems like the fed is behind the curve, compared to past economic cycles, the fed began cutting quite early in the economic downturn, and has cut quite substantially. The federal funds rate has been cut from 5.25% to 3.5% (1.75 points in total) in 4 months. That is quite brisk and substantial by historical standards. Bernanke cannot be criticized for timidity!!

The fed has moved so significantly despite the dollar's huge fall in recent months, and a bit of inflationary pressures, particularly from the sky-high oil prices. This tells me loud and clear that despite Bernanke's public happy talk (we expect slower growth but not recession) he expects recession, and is willing to risk higher inflation and a weaker dollar to ameliorate it. I'm just speechless with approval.

Sunday, January 20, 2008

In my opinion the combination of events over the weekend in South Carolina and Nevada have turned the GOP nomination battle into a 2-horse race: McCain and Romney, with a big edge to McCain.

In South Carolina, McCain narrowly beat Huckabee. But as was true in New Hampshire, he did poorly among really conservative GOP voters.

http://www.politico.com/news/stories/0108/7993.html

The problem for Huckabee was that the competitor most similar to McCain, Rudy Guiliani, did extremely poorly, at a PATHETIC 2%, whereas Huckabee's natural competitor, Fred Thompson, picked up 16%. Thompson's most marginal contribution to the 2008 campaign was to wound Huckabee badly in South Carolina, not that it would have mattered, as he would not have been the nominee anyway.

So what happens next?

First, Thompson will very likely exit the race, possibly as soon as Monday. It will end one of the great political bellyflops of our time. When he (finally) entered the race, I told my politically motivated friend Oliver at work that he would either win the nomination or fall flat on his face. I can take some credit there, he has indeed fallen quite flat. Sorry Uncle Larry.

Its a bit of a shame too, b/c Thompson was actually talking about entitlement reform. Not in a way I agreed with, mind you, but at least he talked about it, which is more than I can say for any other candidate of either party, except Ron Paul, who advocates eliminating Medicare, and is thus not taken seriously by anyone.

South Carolina was fertile territory, and he did quite well, considering. But he will not have the money to compete on super duper Tuesday, 2/5, and is thus in my view running for Vice President. Either Romney or McCain would find him a very attractive # 2, so we may not have heard the last of Huckabee.

Thompson will drop out, Huckabee will not have enough $$, Rudy never got started, and likely won't get really rolling with McCain strong (they are competing for precisely the same kind of voter). Ron Paul can't win. That leaves McCain and Romney as the last men standing.

Nothing has happened to change my view that McCain will win the nomination. He is in a very strong position. However, Romney is now running as a businessman who will fix the economy, and Washington. This is a FAR FAR better and more appealing place for him to be than when he was pretending to be the most conservative of them all. He wasn't, he looked phony, and a lot of people saw right through it.

Its a shame that the GOP is in its current awful state. In a more perfect world, McCain would lead an honorable GOP into battle against Al Gore and an honorable democratic party. Now THAT would be a battle royale. Not so much now with the GOP as it is...

Thursday, January 17, 2008

There is now much talk in Washington of a stimulus package to help the economy stave off recession. Fed Chairman Bernanke supports it, Clinton and Obama support it, Bush supports it, and apparently the democratic congressional leaders do as well. This is (a) a fabulously good idea; (b) reasonably timely; and (c) shocking. Why shocking? The idea that Bush would agree on a bill that is obviously good for America? Shocking.

Anyway, why do we need a stimulus package? The economy is either in recession, or very very close to one. I suspect its in one, and while I'm no economist, I'm not wholly ignorant either. You just don't have housing tank and consumer spending be weak without the economy doing poorly. It doesn't happen. In any event, whether growth in a given quarter or two is .2% or negative .2% doesn't matter a whole lot. Either growth number results in an increase in unemployment, a decrease in earnings power, and other things that FEEL just like a recession.

Let's pick a number out of thin air and assume that absent a stimulus package the economy will shrink by 1% in 2008. That's a very realistic number I think. That would be a true recession, and unemployment would rocket upward. By at least a full percentage point, which means more than 1.4 million more people out of work than are out of work now. A huge deal to a lot of people, and a medium-sized deal to the country as a whole.

The US gdp is now approximately 13 TRILLION dollars.

https://www.cia.gov/library/publications/the-world-factbook/print/us.html

There is talk now of a package in Congress to cut taxes and raise spending in order to avert a recession, or at least mitigate its effects, as I said above. This is basic Keynsian economics. John Maynard Keynes, http://en.wikipedia.org/wiki/Keynes, was a famous british economist who believed, among other things, that when there was a sudden drop in demand (people suddenly buy fewer goods and services), the government should step in and create demand. In other words, either buy goods and services itself, or cut taxes so people would. These sorts of policies were the intellectual underpinning for parts of the New Deal, including in particular the Works Progress Administration. http://en.wikipedia.org/wiki/Works_Progress_Administration

However, in order for this sort of a Keynsian boost in spending or cut of taxes to make a big difference, it would have to be huge. Again, assuming that 2008 is a -1% "growth" year, in order to turn that into a +1 % growth year year (still very slow, but avoiding a recession, and making a real difference), you would need a 2% swing in the economy. Thus you would arguably need a stimulus of 2% of $13 trillion, or $260 billion, which would be a HUGE package. Nothing anywhere near that big is being considered. Now I should add that a package of say $100 billion would presumably add more than $100 billion to the economy. If a bridge is built in 2008 as part of a stimulus package that would not have been built otherwise, a few construction jobs would likely be created (or not destroyed). Those employees go out to eat at the local diner, keeping a few more waitresses employed, perhaps. They do more work on their homes, thus buying more at home depot, etc. One bridge will not have significant knock on effects, but $20 billion worth of construction would. The same is true for a tax cut. If taxes are cut, people have more money to spend. They will save some of it (not really helping the economy in the short run very much) and will spend some of it. This is why increasing spending is a MUCH more reliable means of Keynsian stimulus than tax cuts.

EDIT INSERTED HERE-- Larry Summers, the brilliant former Treasury Secretary under Clinton, recently wrote an opinion piece

http://www.ft.com/cms/s/0/3b3bd570-bc76-11dc-bcf9-0000779fd2ac.html?nclick_check=1

advocating a $50-$75 billion stimulus package over two to three quarters, which he said would have an impact of about 1% of GDP over a year. Given that my goal was an impact of 2% (from -1% to +1%), his numbers track mine quite nicely. He proposes a much more cautious, smaller package. I imagine he is taking into account previous and future interest rate cuts, and doesn't want to overdo things. I would encourage you to take his views over mine here, not because he's an "expert," but because he really is an expert.

Back to original post--

Anyway, if a package of $100 billion were to be passed immediately, it would probably have an effect (I am guessing a bit) in 2008 in the area of $150 billion. This WOULD be enough to make a meaningful difference, and could indeed help us avert recession (together with the rate cuts the fed has already made and will continue to make). I would STRONGLY support such a package, even if, as is likely inevitable, some of the tax cuts were wasteful giveaways to the rich. The benefits of increased spending, QUICKLY, to avert recession or mitigate its effects are hugely beneficial, and I would pay a reasonably steep price to get such a package passed fast.

A smaller package, say $50 billion, would help, but not all that much, as its just not that significant in a $13 trillion economy.

Finally, any such package would add to our already serious deficit problems. That does not concern me overmuch because it would by definition be a one-time jolt to the deficit, not to be repeated until the next demand shortfall, which hopefully is not right around the corner. Of course, prudent management requires trimming some spending after the economy rebounds, in order to keep the deficit under control. Good luck on that one. And yes, there could be some minor increase in inflation as a result of a package. Anyone who is worried about inflation right about now needs their head examined in my view.

Wednesday, January 16, 2008

I've been meaning to post this for a while.

In December, the Times editorial board wrote the following ridiculous piece about illegal immigration. Its a month old, but nothing has changed, so this is still perfectly timely.

http://www.nytimes.com/2007/12/18/opinion/18tue1.html?ref=opinion

Gee, where do I start. In the context of a new employer sanctions law, the NYT states, "We have always said that workplace laws should be enforced vigorously." Well that's a position, and not even an indefensible one. Later and throughout the piece, however, the NYT rightly points out the human and economic toll such a position takes. The REAL harm it does. The NYT sounds a lot like Bob Herbert-- whining about a problem, and balking at its own solution-- just to whine like a college freshman. Not appealing.

Sure sure, they said, "we support employer sanctions in the context of overall reform." Fine. But absent comprehensive reform, which will pass over the GOP's cold dead political corpse, does the NYT support really sanctioning employers that hire illegals or not? Should a contractor who hires undocumented Hector run a small risk of a nuisance fine and hassle, or is that contractor a REAL criminal who should, as the Arizona law referenced in the NYT piece requires, have its license REVOKED for a second offense? Should my bosses at the law firm I'm working with be disbarred for hiring an illegal absent comprehensive reform? Answers please. Well, the NYT won't answer, b/c it does not support sanctions anything like those I mention above, and is afraid to admit it. They only support employer sanctions in the context, I imagine, of a sensibly large # of LEGAL Mexican immigrants, which would make sanctions unnecessary, as there'd be plenty of LEGAL immigrants to do the work. Seems hypocritical.
Well, Romney won Michigan, and won it fairly soundly. His father was a 3-term governor there, so its not clear if he was really a home-state favorite.

In any event, I've thought for a long time that there is no chance the GOP will nominate Romney, and I haven't changed my mind. I have the courage of my convictions on this one. Feel free to mock me for YEARS if he ends up being the nominee. This isn't a random prediction, like Obama winning New Hampshire, which I got wrong and don't much care about. This prediction reflects a basic belief I have about human nature.

People can spot a pure phony, and really no one likes a phony. And he's such an obvious panderer that even the stupid folk that approve of the Bush administration can see it. And this should, in the end, prevent him from getting anywhere near the nomination. Of course, by my logic he should have fallen so badly on his face that he'd be dropping out by now, and he most certainly has NOT done that. My answer is that this GOP field is so weak (if you don't like McCain overmuch) and he's been so active in the early states, with money and appearances, that he was bound to get SOME support. And in a fractured field with a lot of money, some support will translate into some wins.

Objectively he certainly has a shot at the nomination, though probably not as good a shot as McCain. But I have not wavered from my view that even the GOP will reject such an obvious phony. Bryan in Raleigh has pointed out that while he may be phony he is telling the GOP what it wants to hear, and he is very right. That, I submit, is why he has done as well as he has. I just can't see it pushing him over the top. Its possible he will win. And you, my readers, can remind me of it until the cows come home.

Tuesday, January 15, 2008

I wrote last week I was pretty sure that McCain would be the GOP nominee. I can update that now; I'm essentially positive.

Now my prediction record is famously lousy (New Hampshire last week fits right in) but I think this is a matter that CAN be predicted. McCain is the only Republican that any voters trust. The movers and shakers are largely refraining from attacking him, very unlike 2000.

http://www.politico.com/news/stories/0108/7890.html

This fact by itself demonstrates that the hierarchical GOP is starting to do what its supposed to do. There's an old saying that democrats want to fall in love (ask Obama) and Republicans want to fall in line (ask Bob Dole). The falling in line process has just begun. McCain is the least objectionable to the big tent. Romney hasn't lived up and won't -- he's just run as too much of a phony. Thompson never got started (one of the bigger political belly flops in recent years), Rooooody hasn't quite BEGUN his campaign yet, its too late now Rooooody. Huckabe everyone can see aint ready.

Its McCain. And he's the democrats' worst nightmare. By far the most electable of this GOP crop; he'll make sure that the 2008 election is highly competitive. This is very bad for the country; as I've said many times the GOP needs to lose and lose BIG in 2008, so it can begin much needed self-examination. McCain is most unlikely to lose BIG, so that much-needed death and rebirth of the GOP is at best delayed, at worst avoided. Woe is us.
There is a piece in today's WSJ which epitomizes why the GOP's views on economics are so out of touch with reality. Although there are a few interesting facts in here, the main thrust of this piece is:

1) Deficits don't matter;

2) We should cut taxes across the board;

3) These tax cuts would partially "pay for themselves"; and

4) The democrats have repudiated Rubin-omics-- caring about the deficit.

http://online.wsj.com/article/SB120035796472889887.html?mod=opinion_main_review_and_outlooks

Well, the US savings rate has plummeted in the last 25 years, and economists are VIRTUALLY UNITED that the main cause of this is THE BUDGET DEFICIT. That is an overwhelmingly accepted viewpoint.

Second, a brief history lesson.

Kennedy cut taxes and the economy boomed.

In the 70s inflation caused real tax INCREASES and the economy sputtered (not nearly as badly as you would think, growth and job creation was actually decent).

In the 80s Reagan first cut then RAISED taxes and the economy did well. I avoid saying boomed, b/c it didn't, but it did do well. Growth and job creation, though not as good as the roaring 90s, was good.

In the 90s Clinton RAISED taxes (mostly on the wealthy) and the economy boomed (yes, much better performance than the 1980s, from a higher base). Gingrich and company screamed recession. Clinton would DESTROY THE ECONOMY! Um, oops.

You'll never read these TRUTHS in the Wall Street Journal. Because these TRUTHS get in the way of ideology.

Finally, the article says Rubinomics RIP. Rubinomics was never distinct from a Keynesian view of demand management; of the government cutting taxes and/or raising spending TEMPORARILY in order to deal with a sudden shock to demand. The WSJ knows this perfectly well. But of course, lying about your opponents is S.O.P. for a Republican today. A sick, diseased dishonorable organization.

Ok, so this post was a bit of a rant, and a bit disorganized. You get the point. The GOP lies about matters money. Through its teeth. Constantly. In a big-ass way, not a small nit picky way. For the GOP to point to the democratic candidates calling for a stimulus as the end of a Rubinomics-deficit based fiscal policy is beyond belief. The democratic party has been the less fiscally irresponsible party since at least the late 1960s. Obviously this is a matter of opinion, but let's just say there's a HUGE wealth of information and facts to support my opinion.

As I always like to say, images are powerful things. And to some, the "image" of democrats as big taxers and big spenders, out of date for a long time, is still a powerful one. At least for lying to the people and winning elections.

It used to be REPUBLICANS that believed in taxing to pay for the government you choose to have. Not any more.

Last point before I shut up. We are at the absolute peak of the demographic cycle, literally this month. By that I mean that the ratio of highly productive (middle aged) to less productive (younger) workers is as high as it will get. Ditto the ratio of workers to retirees. Those ratios will get inexorably worse for the next umpteen years; at least 30. This is the HIGH POINT OF THE DEMOGRAPHIC cycle. Literally January 2008 is the high point; baby-boomers begin officially retiring this month. Even at war, we should, in a rational government, be running a MASSIVE surplus, say 4 or 5% of GDP. We should have been furiously paying down debt in the last 7 years, so as to be able to more easily borrow money to use to help cushion the inevitable changes to the social programs (social security, medicare (especially), medicaid) which will be necessary in the next 20 ish years. That we have not paid down a ton of the debt, as we started to under Clinton and the GOP congress in the late 1990s is a terrible self-inflicted wound, nicely indicative of the utter disdain with which the modern GOP holds our great country. If they gave 1/2 a rat's ass about America, they would have paid down a TON of debt, instead of running up a ton of debt. The modern GOP cares about enriching its friends and backers. Any benefit to the rest of us is completely incidental. What a sick, awful group of people.

Monday, January 14, 2008

It is entirely possible that the television series star trek Voyager changed the entire 2008 presidential campaign. I'm serious. Read on.

In 1997, the lovely actress Jeri Ryan was cast to play Seven of Nine, a former Borg Drone, on Voyager. The series' ratings were sagging, and her lovely figure immediately pushed up the show's ratings.

http://en.wikipedia.org/wiki/Jeri_Ryan

In 1990, Jeri Ryan married investment banker Jack Ryan. The frequent separations throughout their marriage contributed to their divorce in 1999. The court records were sealed, but came out later.

In 2004, Jack Ryan won the Republican nomination to run for the US Senate. Although he was not the favorite, he had a real shot to win the election. Eventually some of the (barely) sordid details of Jack and Jeri Ryan's marriage came out, and he was forced to drop out of the Senate race.

http://en.wikipedia.org/wiki/Jack_Ryan_%28Senate_candidate%29

The GOP ended up running a badly out of the mainstream showy conservative named Alan Keyes, who lost very very badly. The winner of that election was Barrack Obama. It is entirely conceivable that Ryan would have given him a run for his money, or even won. Imagine how the dynamic of this race would have been had Obama not entered the race...

Thursday, January 10, 2008

A friend of mine, a young, sharp, sophisticated lawyer with experience in matters politics and political just asked me by e-mail if I thought it was possible that should Hillary win she'd offer Obama the VP slot.

Yes, I do think that's possible. If Hillary wins the nomination (believe me, I aint counting chickens!), she will realize that she doesn't inspire much passion, with the possible exception of single women. She knows she's light on charisma. She knows that Obama has charisma and inspires passion, big time. The experience arguments she's made against him count much less as a vice. It would be a somewhat risky choice, as she's a control freak, and he will NOT be a puppet that just does what he's told (as Bill Richardson, who I suspect is her first choice, would). But even if she wins the nomination, Obama will have given her a hell of a run for her money and will have a lot of support. I think picking him as vice and assuring him a real profile in a Clinton administration (which will be very difficult b/c of Bill), would REALLY bring the party together and inspire. The party will rally behind whoever wins, that's not a concern, but having Obama would greatly add to the passion meter. Two last points:

1) I'm just guessing here, but I think Bill would LOVE to have Obama as vice. He'd figure that with 4/8 years of his/Hillary's and other people's training he WOULD be ready to be president, and maybe a great one.

2) Gore was weird, at least in public. Lieberman was weird (imho). Kerry was weird! Ok, Edwards was not. Clinton is weird. It would be VERY VERY nice to have a reasonably normal human being on the ticket. Obama is certainly that, by which I mean he's not weird. I imagine Hillary will make sure that her vice isn't someone strange, but instead is someone that normal people can relate to. Its a minor point, as the vice presidential pick sways few, but its worth mentioning.

The democratic primary race was totally shaken today by the stunning announcement that John Kerry is endorsing Obama! Clinton's toast folks, this key endorsement will seal the race for Obama!

If you haven't noticed, I'm totally kidding. I mean really. Who on earth cares what John Kerry thinks about anything? He ran a campaign about almost nothing, except that he wasn't George Bush, and lost. For those who have forgotten, 62 million people voted for George Bush, slilghtly over 59 million people, 59,028,105 to be exact, voted AGAINST George Bush, and 4 people (John Kerry, his wife and kids) voted FOR John Kerry.

See http://www.cnn.com/ELECTION/2004/pages/results/president/ for election results if you want to get depressed all over again.

Why anyone would think anyone cares what John Kerry thinks is beyond me. Please go away John. Or stay in the spotlight-- no one cares either way.

Wednesday, January 09, 2008

Well, that's what I get for predicting. Some big Obama victory! The Clinton campaign pulled off a truly stunning upset yesterday. I and all the other pundits were all wrong! There was an enormous turnout yesterday, and women went hugely for Clinton, while men went just as hugely (or very very close) for Obama. There was tremendous enthusiasm for both of them in New Hampshire.

On the GOP side I'll take my bows, though predicting this race was easy. Romney is indeed on life support as the pundits say, but then he has a lot of his own money and could keep going quite a while if he wants to. The GOP is now looking for anyone but McCain.

Sorry Uncle Larry, your boy Fred pulled in a truly pathetic 1%. He's a political corpse. It was the campaign that could have been, but never was, and now won't be. Oh, he'll do so-so in South Carolina, but no one's giving him any money. Its between McCain and Rooooooody and maybe Huckabee.

Bill Clinton finished a strong second in New Hampshire in 1992, making him the "comeback kid." Hillary finished a so-so first (there's no such thing as a so-so first!) making her the comeback woman. New Hampshire has indeed been kind to the Clintons. Both she and Barack will raise unprecedented boatloads of money over the next few weeks. If the race stays close it greatly increases the chances that Hillary will name Obama her vice if she wins. I think its fairly likely he'd take the job if he could get what he felt were solid assurances that he'd have a decent portfolio.

Stay tuned...

Tuesday, January 08, 2008

The TITLE of an article in the NY Times today is, "Bush Admits Economy Faces Challenges."

http://www.nytimes.com/2008/01/08/business/08bush.html?ref=us

Well gee, a housing market cratering, $100 a barrel oil, jobs not being created at all in December and only slowly in 2007, wages stuck in neutral, health care costs and worries soaring, yeah there are worries. Any idiot understands this, and many people have understood it for months.

After all this time, after more than 7 years of the Bush presidency, it is still news for him to admit something glaringly obvious. Just as after the 2006 elections he FINALLY fired Rummy and admitted Iraq wasn't going all that well. It is ASTOUNDING that this is the state of affairs. A more apt title for this non-news would have been, "Lying President stops lying for just an instant about the state of the economy. Expect more lies soon."

Why anyone at all listens to anything the Bushies have to say, at least without a presumption that what they say is blatantly false, is almost beyond me. I guess most people, even democrats that HATE Bush like myself, find it hard to believe just how awful, how truly venal, these people are. We have consistently underestimated their willingness to lie, cheat, steal, and hurt America to achieve their own goals.
Well, my (modest) pubic is clamoring for predictions. I've been busy, and derelict, but here they are (even though voting has started).

Turnout in New Hampshire will be absolutely astronomical. I don't know enough about the state to predict raw numbers, but whatever the record is for turnout in a contested primary, it will be SHATTERED, absolutely demolished.

The media-fed surge towards Obama is very real. He wins big today, by at least 10 points, maybe more. Hillary isn't quite FINISHED (sorry Uncle), but if I am correct about that big a win, Obama becomes the clear front runner. But the main reason candidates usually have to drop out after losing in Iowa and New Hampshire, a lack of money, doesn't apply to Hillary. She has plenty of money to carry on and plenty of will. So she will. Only if she's clearly beaten after super duper Tuesday (February 5th) would she drop out.

So I say Obama by 10 over Clinton and Clinton by only 4 over Edwards. In fact, a 3rd place finish by Hillary is more likely than a first!

A digression. Historically, candidates are pretty much forced to drop out after poor showings in Iowa/New Hampshire (as Biden and Dodd did after Iowa) because they run out of MONEY. Clinton will not have this problem, as she already has a good deal of money, and can easily raise more, virtually regardless of how she's doing in the primary season. Money is the main reason why the early states are so very important; the votes there give donors an idea of who might win. Why give money to the guy who finished 5th in New Hampshire?

Rooooody, on the GOP side, is trying to defy this whole logic, and focus on what in the end makes a nominee a nominee; delegates. He has a fair bit of money, so his plan was not to kill himself in the early states (odd, as I think he could have competed in New Hampshire, but he feared McCain's genuine popularity there), and save his money and spend his time in the delegate rich larger states who moved their primaries up to February this year, like California and Florida, where he is fairly well known and he thinks he can do very well.

My New Hampshire GOP predictions:

On the GOP side, McCain will win, but not hugely. Let's say McCain by 7 over Romney. His margin would have been bigger, but for the Obama surge. In New Hampshire there are a TON of independent voters. Indys in New Hampshire can vote in whichever primary they choose. New Hampshire has trended democratic in recent years (Kerry carried it, as opposed to 2000, when it went for Bush), and in 2006 the GOP in New Hampshire was wiped out in state elections and in the governor's race. GOP Senator John Sununu will likely lose his reelection bid if he runs. Which is a long way of saying that independents, who provided McCain with his victory in 2000 over Bush, will also give him a ton of votes this time around, but will give a whole lot more to Obama.

As for the GOP nomination, for the first time in this whole campaign, I think I know who the GOP nominee will be. Incredibly, I am pretty sure it will be McCain! My friend Andrew and I considered him as roadkill a long time ago, before the media did. But Romney I never thought had a serious chance, Huckabee is widely seen as not ready for prime time (he isn't), Thompson fell flat on his face, Ron Paul isn't viable. That leaves McCain and Rooooooooody as the last men standing. And McCain has I think more respect in GOP circles than Rooooody. He's a known quantity. If he translates his upcoming win in New Hampshire into fundraising (always a problem for him, not least because he hates fundraising), he's I think the reasonably clear favorite to win the nomination. Rooooooody is still alive and kicking. Romney will go away. Huckabee won't win, and its too late I think for a Thompson surge; the press' characterization of him as not REALLY wanting the job of president seems completely correct to me. So we will likely end the GOP race where it started-- with McCain as a front runner. Quite a turnaround.

Of course, my political prognostication record is famously lousy, so maybe none of this will happen...

Friday, January 04, 2008

Well, the Iowa caucuses have come and gone. Finally, some real votes.

First a quick comment on my predictions. They were really right on the mark. Since my predictions were based heavily on polls/conventional wisdom (its not like I have my own polls in Iowa, nor have I been there) this tells me that an intensely polled state has accurate polls as of now in the primary season. This could, of course, change.

On the democratic side, Obama beating Clinton by 8 in a state both campaigned very heavily in, in extraordinarily high turnout does have some meaning, if not as much as the press makes out. I still think, unfortunately, that the race issue is live. Just because democratic primary voters will vote for a black man does NOT mean that swing voters, typical democratic election year voters, or persuadeable Republicans will. The same is true for voting for a woman. I still think there are gigantic electability questions for both Clinton and Obama, alas.

On the GOP side I was very much right that Huckabee beat Romney by more than a hair. 8 points, given how intensely the campaign was waged, was a very decent margin. That Romney got 26% of the vote is remarkable when you think about it. He's the most blatantly false/pandering candidate for ANY office that I can remember, and the Iowa voters got to see that up close and personal-like. That he did so relatively well speaks VERY poorly of the rest of the field, granted that McCain and Rooooooooody did not really campaign in Iowa. And, as I and everyone else has said, Iowa tends to reward the religious candidate.

As truly incredible as this may seem, the GOP nomination is highly likely to be won by either McCain or Roooooooody. Thompson's campaign is openly talking about his dropping out and backing McCain. Romney will lose in New Hampshire to McCain and be widely seen as finished. Huckabee is unlikely to quickly raise the massive amounts of money needed to be a nationally viable candidate, and has the economic nutjob conservatives in the party hopping spitting nails mad.

A wildcard is that independents in New Hampshire can vote in either primary, and Obama's big win may well have a huge surge of indys in NH voting for Obama.

Last point. Turnout in the democratic party caucus was HUGE, more than double the numbers of the GOP. This in a state where Republicans and democrats are in balance, and a state that was frightfully close in both 2000 and 2004 in the general. All of the talk about the giant enthusiasm gap in the 2 parties was borne out in spades last night, and that spells disaster (as of now!!!) for the GOP. But the general election is almost 11 months away, and that is two lifetimes in politics.

Thursday, January 03, 2008

Just recently, a rocket launched from Gaza has made it further north from Gaza than ever before. Israel has, predictably, retaliated in a way guaranteed not to solve the problem.


http://www.jpost.com/servlet/Satellite?cid=1198517286564&pagename=JPost%2FJPArticle%2FShowFull

Haven't we seen this movie? Israel really should pick one of these rocket attacks as a pretext and launch a full-out war in Gaza to capture or kill the Hamas leadership. The US put out a deck of 52 cards to get people who really hadn't attacked us AT ALL, and certainly hadn't attacked us on 9-11. Hamas, on the other hand, are people LEADING WHAT PASSES FOR A GOVERNMENT which HAS attacked Israel and will do so again. Adequate causus belli!! The Israeli public would I THINK get behind a major incursion/war designed to eliminate Hamas' leadership altogether it if they thought Israel would WIN. Of course, then there's Lebanon, 2006. The damage that whole affair has done to Israel's national security is the gift that keeps on giving, as is Prime Minister Olmert.

So instead, we'll have half and quarter measures, which will inflame P opinion a decent % as much as a full blown war would, with the added bonus of neither solving the problem nor making the price to the Ps in Gaza so high that they look to peace talks as a way out.

Obviously there's no easy answer, but pretending to negotiate with Abbas, who has zero control over Gaza/Hamas and only shaky control over Fatah and the West Bank is silly. MAYBE if Israel had wiped Hezbollah out in 2006, as I and so many others advocated, it would be in a strong enough local position to give negotiations another shot. But it didn't, it isn't, and that's that.

Israel is awfully hard to root for sometimes, what with having such a bad case of the stupids and all.

Wednesday, January 02, 2008

Now that some of the dust has settled, I have finally gotten around to posting about what the revised National Intelligence Estimate (NIE) regarding Iran's nuclear program means.

You will recall that a few weeks back our intelligence community posted its overall analysis of Iran's nuclear intentions/capabilities. I ASSUME for purposes of this post that the revised NIE represents a good faith attempt by the Intel agencies to give their best intel on Iran, as opposed to a hit job to prevent a rush to war. I realize that's a simplistic assumption, guaranteed to be neither right/wrong nor useful, but I have to start somewhere.

The press reported widely at the time that our intel community concluded that they were wrong and that Iran is NOT pursuing nuclear weapons. Don't you believe it!!! If you read the report carefully, http://www.dni.gov/press_releases/20071203_release.pdf,, the NIE really said no such thing. Bear with me.

1) By far the most difficult part of an atomic/nuclear bomb is the weapons grade material, plutonium or highly enriched uranium (HEU). This is not exactly secret. In other words, if you gave Osama some of this stuff there's every chance he could get a working nuclear device given some time and money, whereas if you gave him everything else except for the HEU/Plutonium, he'd still have to acquire it from a state, and would likely have some real difficulties. So, crudely, Bomb = A (HEU/Plutonium) + B (everything else-- weaponization, fitting on missle, delivery, etc).

2) Everyone, including the NIE, agrees that Iran is still actively working on processes which could result in HEU. Even Mohamed ElBaradei of the IAEA (No Bush stooge!) agrees with this, and has publicly said since the NIE revisions that he wouldn't go that far as the US intelligence community has. (We've now become less anti-Iran on nukes than ElBaradei, which does NOT give me the warm and fuzzies). So, Iran is still working on weapons grade materials, and doing so in a way that makes little sense in the context of a civilian program. To list one simple example, they are enriching uranium without having anything civilian to DO with said uranium.

3) Iran has largely ceased efforts for now on the B portion of my above, highly simplified (yet useful) equation. This is the one and only valuable part of the NIE's analysis. I don't think it means anywhere NEAR as much as the lazy mainstream press thinks it means, for reasons I discuss below.

4) Should Iran acquire/produce HEU, there's little doubt they can, in a discreet number of years, perhaps even mere months, overcome the hurdles in the B portion of my equation.

5) (repeating)-- HEU is the most important/difficult part of this whole enterprise; therefore

6) Whether Iran has ceased efforts on the B portion of my equation may well effect the precise TIMING of when they get the bomb, but not whether. Should Iran enrich enough uranium (and the amount of uranium sufficient for 10 bombs could be hidden in an 18 wheeler with plenty of room for fruits and vegetables), it can, with at the absolute most a few years delay, acquire a bomb.

7) So the revised NIE, accepted as true, tells us AT MOST that Iran has voluntarily delayed by a short time the amount of time it will need to have the bomb. This hardly qualifies as what the press reported, namely that Iran truly stopped its efforts towards having a nuclear weapon.

8) Notwithstanding anything I have said, everyone agrees that Iran WAS working towards a nuclear weapon (both the A and B parts of the equation above) until 2003. And of course lying through its teeth about it.

Iran is still a grave threat to Israel's national security, and a real threat to regional stability in the middle east.