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To: Rock_nj who wrote (123565)1/8/2008 11:00:15 PM
From: stockman_scott  Respond to of 362860
 
<<...The Clintonites like to view Iraq as an isolated incident. "It is absurd to hold her or any candidate to a litmus-test standard based on a single vote under extremely complicated circumstances," Holbrooke said in a September radio interview. "She has said herself, 'If people don't like that vote, let them go elsewhere.'" To Obama, the vote for the war reflects a more fundamental reflection of poor judgment and political cowardice. Edwards, who co-sponsored the war resolution, has apologized for it and said, "I will not make that mistake again."...>>

The Democratic Foreign Policy Wars
by ARI BERMAN*
thenation.com
[from the January 21, 2008 issue]

At the Des Moines Register presidential debate in December, Barack Obama was asked how voters could expect him to provide a "break from the past" when many of his top foreign policy advisers were holdovers from the Clinton Administration. Obama gracefully parried the challenge by saying he was willing to take good advice from several previous administrations, not just Bill Clinton's. But the question did reflect a common suspicion that despite all his talk about providing "change," the Obama campaign's differences with Hillary Clinton on foreign policy may be more stylistic than substantive.

It's true that a number of Obama's key advisers--like former National Security Adviser Tony Lake, former Assistant Secretary of State Susan Rice and former Navy Secretary Richard Danzig--held prominent positions under Bill Clinton. At the same time, Obama's team includes some of the most forward-thinking members of the Democratic foreign policy establishment--like Joseph Cirincione and Lawrence Korb of the Center for American Progress, the party's leading experts on nonproliferation and defense issues, respectively, along with former counterterrorism czar Richard Clarke and Carter Administration National Security Adviser Zbigniew Brzezinski. Added to the mix are fresh faces who were at times critical of the Clinton Administration, like Harvard professor Samantha Power, author of "A Problem From Hell", a widely acclaimed history of US responses to genocide. These names suggest that Obama may be more open to challenging old Washington assumptions and crafting new approaches.

Hillary Clinton's camp, meanwhile, is filled with familiar faces from her husband's administration, like former Secretary of State Madeleine Albright and former UN Ambassador Richard Holbrooke. Unlike Obama's advisers, the top Clintonites overwhelmingly supported the war in Iraq. From the march to war onward, Clinton and her advisers have dominated foreign policy discussions inside the Democratic Party. After largely supporting the war, they resisted calls for an exit strategy until 2005, when the situation had become unmanageably bleak. After turning against the war the Clintonites argued retroactively that Senator Clinton had voted, in Holbrooke's words, "to empower the President to avoid war."

As the nation hurtles from the January primaries to the "Super Tuesday" of February 5, top Democrats continue to develop their views on a number of foreign policy questions. How and when should America withdraw its troops from Iraq? How should we manage Iran? How should US power be deployed in the post-Bush era? How should foreign policy deal with global warming, the rise of China and India, an increasingly multipolar world and the continuing threat of nuclear proliferation? Perhaps it's too much to expect candidates to lay out a comprehensive vision for the new era in the heat of a presidential campaign. But how the campaigns address these questions today offers a window into how they'll govern tomorrow.

Hillary's campaign portrays its foreign policy team as a big tent. At the top are the troika of Albright, Holbrooke and former Clinton National Security Adviser Sandy Berger. Albright is very close to Hillary and a key confidante and surrogate. Berger is a skilled behind-the-scenes operative who keeps the troops in line. More on Holbrooke in a moment. Close behind are policy figures who also play a political role, like retired Gen. Wesley Clark and former Ambassador Joseph Wilson, who are popular with the party's antiwar base and appear on the campaign trail; Clark appears in the campaign's TV ads. (Clinton supporters who backed Bush's recent "surge" of troops in Iraq, like Kenneth Pollack and Michael O'Hanlon of the Brookings Institution, are now kept at arm's length, although Clinton does consult with Gen. Jack Keane, an architect of the troop increase.) Following the old guard are a younger crop of less hawkish experts, like Steven Simon of the Council on Foreign Relations, who co-chairs an advisory group on terrorism, and Iran specialists Ray Takeyh and Vali Nasr, who favor broad US engagement with Iran. At the center is Lee Feinstein, a former State Department official whom Clinton plucked from CFR in July and made the campaign's national security director. Feinstein wrote a controversial Foreign Affairs essay in 2004 with Princeton professor Anne-Marie Slaughter arguing that in cases of humanitarian catastrophe, "the biggest problem with the Bush preemption strategy may be that it does not go far enough." Today Feinstein says, "Unilateral action that involves force ought to be avoided at all costs," and "a clear reading of my piece is a strong rebuttal of the Bush doctrine."

Of the top Clinton Administration staffers, Albright, who's 70 and has already served in the upper echelon of government, and Berger, who became a controversial figure after smuggling classified documents from the National Archives, are unlikely to return in a Hillary Clinton administration. That leaves Holbrooke, other than Bill himself, as the most commanding member of Hillary's foreign policy cabinet-in-exile. "He's the heaviest of the heavyweights," says Peter Galbraith, Bill Clinton's former ambassador to Croatia. Galbraith worked closely with Holbrooke in the Balkans and remains a close friend as well as a Hillary supporter. Holbrooke personifies the strong feelings those in the Democratic foreign policy community harbor toward the Clintons: they respect Holbrooke's experience, accomplishments and intelligence but are dismayed at his arrogance, political opportunism and hawkish posturing. Clinton insiders speculate that if Hillary assumes the presidency, Holbrooke could very well land the Secretary of State position he's always coveted.

Like Clinton, Holbrooke seems to have been groomed for higher office. He's been described by pundits as "the raging bull of US diplomacy," "the closest thing the party has to a Kissinger," "a man driven to be a central protagonist in the shaping of the American empire." Just look at his résumé: a young foreign service officer in Vietnam under the tutelage of JFK's best and brightest; Assistant Secretary of State for East Asia in the Carter Administration (where he controversially cultivated Philippine dictator Ferdinand Marcos and supported Indonesia during its brutal occupation of East Timor); a successful Wall Street banker in the 1980s; the architect of the Dayton Accords, which ended the fighting in Bosnia; UN ambassador; the list goes on.

Holbrooke's brand of "muscular liberalism" has come to define Hillary. He helped shape not only Bill Clinton's but Hillary's views on the necessity of using force in Bosnia and consulted with her frequently about her vote on Iraq. "I know her well, I saw her through that period, I accept it 100 percent," he said in September. Indeed, in his last press conference as UN ambassador, Holbrooke called Saddam Hussein "a clear and present danger at all times" and said the incoming Bush Administration "will have to deal with this problem," reflecting the Clinton Administration's official policy of regime change. In the run-up to war, Holbrooke was quoted in the New York Times or Washington Post every week. He urged President Bush to go to the UN but afterward said Bush had "ample justification" to invade Iraq and wrote that antiwar demonstrators, along with the French and German governments, had "undoubtedly encouraged" Saddam. In the 2004 campaign, Holbrooke became a key foreign policy adviser to John Kerry. Like Hillary, Holbrooke took a particularly cautious tack on Iraq, telling Kerry to keep his views on the war "deliberately vague."

After the election, as figures like former Clinton Defense Secretary William Perry and Representative John Murtha turned against the war, Holbrooke refused to say how the United States should extricate itself from Iraq. "I'm not prepared to lay out a detailed policy or strategy," he said in December 2005, around the time that Clinton wrote a letter to her constituents defending her vote for the war. A year later, after events on the ground had spiraled even further out of control, Holbrooke, like Clinton, finally argued that the United States should "start to disengage from Iraq while pressing hard for a political settlement." He testified before Congress opposing Bush's troop surge and rebutted Gen. David Petraeus's presentation in support of it this past September, though he noted that, unlike Senate Democrats, he opposed using the Congressional power of the purse to end the war.

As Holbrooke found his footing on Iraq, however, he remained one of the leading hawks in Hillaryland on Iran. In 2004 he told the American Israel Public Affairs Committee, "The Iranians are an enormous threat to the United States, the stability in the region, and to the state of Israel" and claimed the European Union would "never get their act together." Holbrooke has twice spoken at rallies against Iranian President Mahmoud Ahmadinejad in New York, comparing him to Hitler. At a November 27 speech in Toronto, Holbrooke listed the reasons the Bush Administration would not attack Iran but called the country "the most pressing problem nation" and "the most dangerous country in the region," accusing the Iranians of exporting explosives "that are killing Americans in Iraq."

Little Holbrooke said about Iran could have prepared one for the latest National Intelligence Estimate, which found that the country had abandoned its nuclear program in 2003 as a result of diplomatic pressure. "It significantly decreases the likelihood of a military confrontation with Iran," Holbrooke told me after the NIE became public. "You have to keep all options on the table, but I thought even pre-NIE that there was no justification for a military strike." He stressed, however, that America needed to remain vigilant about Iran. "It's good news that Iran is much, much further from a nuclear weapons capability," Holbrooke said. "But that doesn't change the fact that they are still a deeply destabilizing regime--supporting Hamas, Hezbollah. And they need to be part of the solution in Iraq."

Iran is a particularly sensitive topic among Clinton supporters. Her September vote for the Senate's Kyl-Lieberman amendment, which dubbed the Iranian Revolutionary Guard a terrorist organization and accused Iran of fomenting violence in Iraq, aroused a furor among establishment Democrats and grassroots activists. Peter Galbraith, who knows the region well, circulated a statement in the Senate opposing the resolution. "The reason I was so opposed to Kyl-Lieberman was because it was based on the premise that Iran was undermining US efforts in Iraq, and that's just not true," Galbraith told me. Joe Wilson said he also opposed Kyl-Lieberman, primarily because "I don't trust Lieberman or Kyl."

General Clark, who commanded NATO under Bill Clinton, quickly defended Hillary's vote, writing in New Hampshire's Manchester Union-Leader that "she is forcing the Bush administration to apply diplomatic pressure." Clark told The Nation, "The people harping and carping on the vote and comparing it to her vote on Iraq are oversimplifying the complexities of real diplomacy." In an NPR debate following the NIE release, Clinton argued, based on what her advisers said the military had told them, that because of the Kyl-Lieberman vote, "we've seen changes in their behavior." As Iran heated up as a campaign issue, Clinton's advisers welcomed the NIE with a degree of relief. "It removes this as a campaign issue for Democrats," said Lee Feinstein. He noted that Clinton, like Obama, "supports direct negotiations with Iran, now."

Even if Iran is off the table, as Feinstein hopes, Iraq is not. How many troops Clinton would remove from Iraq--and how quickly--remains a source of contention in Democratic policy circles. "We have remaining vital national security interests in Iraq," Clinton told the New York Times in March. That includes, her advisers say, fighting Al Qaeda there, preventing Iranian arms from crossing the border, protecting the Kurds and possibly training Iraqi security forces, depending on their capabilities. Clinton has pledged to start withdrawing troops in her first sixty days in office but until recently refused to specify when most of them would come home and how many would stay behind. In a policy shift, she said on December 20 that "we can bring nearly everybody home, you know, certainly within a year." Feinstein said the remaining troops would engage in a much narrower set of missions, probably entailing "special operations reinforced with air power," which he says "is far different than patrolling a civil war." Maj. Gen. Paul Eaton, who was in charge of training the Iraqi army in 2003-04 and is advising Clinton, contradicted Feinstein, predicting that such a residual force "is going to be fairly big."

Like Clinton, Obama has more than 200 foreign policy advisers. The campaigns have been dueling over who has the best bench. (Many people who have been linked with Obama are actually advising Clinton, her advisers say.) Obama's advisers tend to be younger, more progressive--having opposed the war from the start--and more likely to stress "soft power" issues like human rights, global development and the dangers of failed states.

The word Obama advisers use most often to describe Clinton is "conventional." As Brzezinski told me, "Look at her response on negotiations. It was conventional and politically convenient." He's referring to CNN's YouTube debate in July, when Obama said he'd meet with the leaders of countries like Cuba, Iran and North Korea without conditions. Clinton responded that she would not "be used for propaganda purposes" and later called Obama's statement "irresponsible and, frankly, naïve." The conventional wisdom was that Obama's answer displayed a stunning lack of presidential gravitas; Hillary dispatched her advisers to reinforce that point. But Obama unexpectedly turned the exchange to his advantage, accusing Clinton of "continuing with Bush/Cheney policies" and painting her as defender of an outdated status quo. "Her vote for the Iraq War and vote for the Kyl-Lieberman resolution are part of a go-along, conventional, momentary type of political thinking," Brzezinski says. Obama included these themes on the fifth anniversary of his 2002 speech opposing the war, assailing "the same old conventional thinking that got us into Iraq." After the assassination of Benazir Bhutto, he reiterated the point in criticizing Clinton's Iraq War vote, saying that "by going into Iraq, we got distracted from Afghanistan...we got distracted from dealing with the Al Qaeda havens that have been created in northwestern Pakistan."

Today, advisers like Tony Lake point to a number of "significant differences" between Obama and Clinton. On Iraq, Obama not only opposed the war but has said he would withdraw all combat troops within sixteen months of taking office. On Iran, Obama rejected the Kyl-Lieberman resolution (though he missed the vote while campaigning) and has proposed a broader engagement strategy to lure Iran into the community of nations. On nuclear weapons, he has not only promised to reduce US nuclear stockpiles, as has Clinton, but advocates a world free of nuclear weapons. On Cuba, Obama went to Miami and said the ban on family travel and remittances to the island nation should be lifted, a policy Clinton opposes.

Yet on many issues the differences between Obama and Clinton are more stylistic than substantive--which doesn't necessarily make them less interesting. In the eyes of his advisers, Obama signals the future and Clinton, the past. "Many of the younger former Clinton Administration officials who now support Obama feel that perhaps it is time for the baton to be passed to the next generation--Obama's generation," says Susan Rice. This sentiment is echoed by the elder Obama advisers. "I think Mrs. Clinton will take us back to the self-indulgence of the 1990s," says Brzezinski, "when the country was preoccupied by its own well-being and the leadership preoccupied with its own standing, not recognizing or taking advantage of the world as it was changing." Much of Hillary's campaign has been premised on a restoration of the Bill Clinton era; the word "restore" appears repeatedly in a recent Foreign Affairs article she wrote outlining her policy.

General Clark says it's overly simplistic to suggest that Clinton would take the country "back to the future," to borrow a phrase Bill Clinton used. "No one's proposing we go back to the 1990s," Clark says. "We need to take what we learned from the 1990s and apply it to new challenges." Indeed, in discussions with Hillary's advisers these days, the message seems to be, We're more like Obama than you think! Both candidates favor negotiating directly with Iran, leaving behind a residual force in Iraq (though Obama has said his missions would be more limited); enlarging the military by 92,000 troops; aggressively curbing global warming; and recommitting to working with multilateral institutions like the United Nations. It's not hard to imagine Clark, Feinstein or even Holbrooke serving in an Obama administration. And many Obamaites would probably work in a Hillary Clinton administration.

One point of contention is the question of experience. Clinton's campaign says Obama "would have less experience than any President since World War II," with Bill Clinton recently implying on Charlie Rose that voting for Obama would be "rolling the dice." Obama says Clinton's trips around the world as First Lady were little more than photo-ops. "I don't think being First Lady gives you any foreign policy experience," cracks former Kennedy speechwriter and Obama supporter Ted Sorensen, "except which donors sleep in the Lincoln Bedroom."

Sorensen sees parallels between the youthful vigor and idealism of Obama and JFK. If Obama is Kennedy, I asked Sorensen, who's Clinton? "She's LBJ," he responded, "particularly when it comes to the future of Iraq. Mrs. Clinton is talking about leaving combat troops in Iraq, maybe even whole divisions. That's where LBJ got into trouble in Vietnam."

The top Democrat who puts the least emphasis on foreign affairs and has the fewest number of advisers, John Edwards, has paradoxically said some of the most interesting things during the campaign. Edwards has called the "war on terror" a "bumper sticker, not a plan," and has opposed enlarging the Army, citing the "little rationale given for exactly why we need this many troops." Days before the Iowa caucuses, he more sharply distinguished his position on Iraq from those of Clinton and Obama by calling for a near-total pullout of US forces within ten months. However, in foreign policy circles Edwards's knowledge of world affairs is considered thin, and on the stump he's far more passionate about domestic issues like poverty and trade. His main foreign policy adviser, Mike Signer, was an aide to former Virginia Governor Mark Warner, and his longtime national security adviser in the Senate, Derek Chollet, is a Holbrooke protégé and a fellow at the Center for New American Security, a centrist think tank working to align Democrats closer to the military. Both are relatively hawkish; Signer wrote an essay in 2006 calling for a doctrine of "exemplarism," which he labeled "a militarily strong and morally ambitious version of American exceptionalism."

The Clintonites like to view Iraq as an isolated incident. "It is absurd to hold her or any candidate to a litmus-test standard based on a single vote under extremely complicated circumstances," Holbrooke said in a September radio interview. "She has said herself, 'If people don't like that vote, let them go elsewhere.'" To Obama, the vote for the war reflects a more fundamental reflection of poor judgment and political cowardice. Edwards, who co-sponsored the war resolution, has apologized for it and said, "I will not make that mistake again."

Hillary, though, has refused to apologize, and has often been packaged as a "quasi-Margaret Thatcher," Brzezinski said. "She is probably more assertive and willing to use force than her husband," Holbrooke said. Holbrooke acknowledges that in the wake of the Iraq disaster, it will be harder to carry out the type of humanitarian interventions that defined the Clinton Administration. In the case of Darfur, for example, none of the candidates have suggested sending US forces. "The standard will be higher," Holbrooke said. "The tests of an exit strategy will be higher. The risks will be higher." In the 1990s Holbrooke warned of "Vietnamalia syndrome," the aversion to using military power because of failures in Vietnam and Somalia, and says we cannot retreat now, either. "A swing from neoconservatism to neo-isolationism would not be a good deal."

None of the Democratic candidates, of course, are advocating "neo-isolationism." But Obama has been more willing than Clinton to redefine what it means to be "tough" and to rethink the nature of American power, suggesting that the United States act with greater humility. He told the New York Times, "For most of our history our crises have come from using force when we shouldn't, not by failing to use force."

Statements like these raise the question of what a post-Bush foreign policy should look like. The next President must decide: will the "war on terror" continue? What about the Bush doctrine of preventive war or the escalating size of the military budget? Holbrooke says, "The next President needs to scrap a lot of things from the Bush Administration, and torture, Guantánamo and pre-emptive war should be on that list." Wesley Clark, too, says the concept of a "war on terror" was a "terrible mistake," and he calls the Bush doctrine "nonsense, rubbish." On these points Obama and Edwards concur.

But there are other crucial and less frequently mentioned topics to address: how will the next administration deal with a resurgent Russia, a rising China and a Latin America that has rejected the Washington/IMF neoliberal agenda, forging closer regional ties in its place? How will the United States handle rapidly growing world demand for oil and gas as reserves approach their peak? Is it a mistake to view the world primarily through the lens of Islamic extremism? How should the United States relate to Saudi Arabia and other autocratic Gulf states, and how should the United States address the Israel-Palestine conflict? How should we promote prosperity and stability in Africa? The foreign policy advisers in each Democratic campaign are still grappling with the answers.

The disastrous Bush presidency has upended many assumptions in DC policy circles, particularly about America's place in the world. This historic shift is helping to define the race for the Democratic nomination. All the candidates have sought to separate themselves from the Bush Administration--but rejection of the Bush/Cheney approach will not be enough to formulate a strategy for the next administration. As Obama has said, "The question is, What comes next?"

*Ari Berman, based in Washington, DC, is a contributing writer for The Nation, a contributor to The Notion and a Puffin Foundation writing fellow at The Nation Institute.



To: Rock_nj who wrote (123565)1/9/2008 6:55:34 PM
From: stockman_scott  Respond to of 362860
 
A day after primary loss, Obama says his spirit is still strong

newsday.com



To: Rock_nj who wrote (123565)1/10/2008 1:26:03 AM
From: stockman_scott  Read Replies (1) | Respond to of 362860
 
For Republicans, Iowa Better Be an Aberration

rothenbergpoliticalreport.blogspot.com



To: Rock_nj who wrote (123565)1/10/2008 5:14:43 PM
From: stockman_scott  Respond to of 362860
 
The $1.4 Trillion Question
____________________________________________________________

The Chinese are subsidizing the American way of life. Are we playing them for suckers—or are they playing us?

by James Fallows

theatlantic.com



To: Rock_nj who wrote (123565)1/10/2008 7:43:10 PM
From: stockman_scott  Respond to of 362860
 
Ned Lamont Endorses Obama In a diary on Daily Kos:

dailykos.com

Thu Jan 10, 2008 at 03:49:55 PM PST

Today, with our Presidential primary in Connecticut less than a month away, I am announcing my support of Barack Obama for President because I am convinced that his forward-looking, progressive vision provides the best chance to enact meaningful reforms in the way Washington works.

Sen. Obama has the tone and temperament to bring out the best in our people and our nation, and to bring new coalitions together in support of the progressive policies we all want to see enacted. His campaign has already reflected this, not only by bringing hundreds of thousands of new voters of all ages to the polls, but by inspiring so many who are new to politics to become activists as well.

Making healthcare affordable for all Americans, rebuilding our aging infrastructure, and ending our dependence on foreign oil are all problems that require more than a tax credit here or an earmark there. Barack is the candidate best able to enact these big changes necessary to getting our country moving again.

We have seen that Sen. Obama has the wisdom and judgment to get the big decisions right - as he did on Iraq more than five years ago. And when President Obama steps out of Air Force One in countries around the world, he will represent a fresh start with friends and allies. He will end the war in Iraq, work for a comprehensive peace in the Middle East, and start investing in America again - and we will be safer and stronger for it.

We Democrats are fortunate to have had many strong candidates running for President. As you may know, I was proud to work hard for Chris Dodd during his campaign. I have the deepest respect and admiration for Sen. Dodd - especially for his powerful calls to defend our constitutional freedoms by restoring habeas corpus, closing Guantanamo, and living up to the spirit of the Geneva Conventions. I know that Sen. Obama, a former professor of Constitutional Law, has been and will continue to be Chris' ally in fighting to protect our Constitution.

As Barack often says on the campaign trail these days, "with the challenges we face at this moment, the real gamble in this election is playing the same Washington game with the same Washington players and expecting a different result."

It's time to change the game.



To: Rock_nj who wrote (123565)1/10/2008 9:48:20 PM
From: stockman_scott  Respond to of 362860
 
The Libertarianism of Barack Obama

liberalvaluesblog.com



To: Rock_nj who wrote (123565)1/11/2008 12:21:37 AM
From: stockman_scott  Read Replies (2) | Respond to of 362860
 
Fed Chief Signals Further Rate Cut
____________________________________________________________

By LOUIS UCHITELLE and MICHAEL M. GRYNBAUM
THE NEW YORK TIMES
January 11, 2008

Presenting a bleak picture of a deteriorating national economy, Ben S. Bernanke, chairman of the Federal Reserve, strongly suggested on Thursday that the Fed would cut interest rates soon, perhaps by a large amount.

“The outlook for real activity in 2008 has worsened,” Mr. Bernanke said after describing all the forces dragging down the economy. “We stand ready to take substantive additional actions as needed to support growth and to provide adequate insurance against downside risks.”

With fears rising that the economy is sliding into recession, Mr. Bernanke’s blunt assessment is expected to encourage politicians to call on Congress to take steps that would stimulate growth beyond what the Fed can achieve through lower interest rates.

Many analysts now expect the Fed’s policy makers to cut half a percentage point off the Fed’s benchmark interest rate, reducing it to 3.75 when they next meet, on Jan. 29 and 30. They expect the Fed to continue cutting, to 3 percent or even lower by summer, to prevent — or at least mitigate — a recession. The goal would be to get people to borrow and spend more.

Consumer spending, however, may already have hit a wall. Shortly before Mr. Bernanke spoke, at a Washington luncheon, the nation’s biggest retailers announced that holiday sales gains were the weakest in the last five years. Only Wal-Mart gained ground, after it slashed prices to draw jittery consumers.

“Bernanke should have made this commitment to cut rates aggressively two or three months ago,” said Mark Zandi, chief economist at Moody’s Economy.com. “Will it be enough? It will be close. With aggressive rate cuts, some fiscal stimulus and a bit of luck, maybe we’ll avoid a recession.”

The stock market responded with uncertainty at first to Mr. Bernanke’s remarks, but then chalked up solid gains. The Dow Jones industrial average surged as he spoke, then fell back, then rose again, closing up nearly 1 percent, to 12,853.09.

Encouraged by other developments as well, including reports that the nation’s largest mortgage lender was about to be acquired by Bank of America, traders apparently concluded that the Fed was at last committed to a more vigorous effort to lift the economy, and to reverse the recent slide in stock prices, which often go up in response to rate cuts.

“Maybe the Fed and the market are not quite on the same page yet,” said Richard Berner, co-head of global economics at Morgan Stanley, “but they are getting a lot closer.”

Mr. Bernanke’s gloomy assessment of the economy represented a turning point for the Fed. Until now, most of the Fed’s top policy makers, starting with Mr. Bernanke, had spoken publicly of their “uncertainty” about what lay ahead. They have cut their benchmark interest rate, the federal funds rate, by a full percentage point since mid-September in response to the credit crisis and the housing downturn.

But they accompanied each cut with a statement that stopped well short of declaring that the economy was clearly in trouble.

Evidence of deterioration has accumulated, however, since the policy makers’ last public statement in mid-December. Within the last week, the Labor Department has reported a sharp jump in the unemployment rate; AT&T said that a number of customers were not paying their bills; American Express reported weaker spending by its cardholders; and the nation’s retailers released their disappointing holiday sales figures.

Acknowledging the evidence, President Bush, speaking in Chicago on Monday, said the nation faces “economic challenges” and “we cannot take growth for granted.”

The mounting evidence has suggested to a growing number of economists and politicians that the Fed by itself cannot stem the economic slide and that Congress must help with fiscal policy in the form of a tax rebate for low-income families, extended unemployment insurance or some other subsidy.

Without addressing the growing demands for fiscal stimulus, Mr. Bernanke devoted most of his talk, at a forum sponsored by Women in Housing and Finance and the Exchequer Club, to a review of the economic damage, which he said had increased in recent weeks.

Housing starts and new-home sales are off 50 percent from their peaks, he said. Foreclosures are rising, and so is the number of households behind on their mortgages. In the financial markets, the subprime shock “has contributed to a considerable increase in investor uncertainty,” he reported, adding that the Fed is seeing “considerable evidence that the banks have become more restrictive in their lending to firms and households.”

Offering an explanation for the Fed’s reluctance to act more aggressively sooner, Mr. Bernanke said that economic growth seemed “to have continued at a moderate pace” until recently, when new information increasingly indicated that “the downside risks to growth have become more pronounced.”

The Fed, Mr. Bernanke said, had counted on an expanding job market to “support moderate growth” in consumer spending. But the government reported Friday that hiring had fallen almost to zero in December and the unemployment rate had jumped to 5 percent from 4.7 percent — a rare one-month surge that almost always indicates coming hard times.

“It would be a mistake to read too much into any one report,” Mr. Bernanke said of the jobs report. “However, should the labor market deteriorate, the risks to consumer spending would rise.”

In a 13-page speech, the Fed chairman devoted only one paragraph to the risk of inflation, although some of his colleagues at the central bank have cited inflationary pressures as a reason to go easy on rate cuts. Mr. Bernanke acknowledged these concerns but clearly put them on the back burner.

“Thus far,” he said, “inflation expectations appear to have remained reasonably well anchored, and pressures on resource utilization have diminished.”

Mr. Bernanke said the Fed had successfully pumped money to banks and other lenders damaged in the mortgage crisis. Lending to banks directly from the Fed’s discount window, he said, had not worked as well as auctioning fixed multibillion-dollar sums.

Among other advantages, he explained, the auctions gave the Fed greater control over how much money was entering the financial system and the effect on interest rates. The auctions, he said, “may thus become a useful permanent addition to the Fed’s toolbox.”

In his speech, Mr. Bernanke carefully avoided any discussion of a recession, which would be an extended period of contracting economic activity and falling employment. But some economists argue that such a downturn may be unavoidable — or already have started — despite the Fed’s recent efforts to contain the damage from the housing collapse and credit market turmoil.

“However much the Fed cuts rates between now and the spring,” said Brian Bethune, an economist at Global Insights, “the die is cast for a pretty rough six months and a very high risk of recession.”

Asked about the possibility of a recession, Mr. Bernanke sidestepped the question. As a Princeton University economist before he came to Washington, he said, he had served on a committee charged with setting the official starting and ending dates of each recession.

“You really cannot make a determination,” he said with a sly grin, “until well after the event.”



To: Rock_nj who wrote (123565)1/12/2008 1:41:46 PM
From: stockman_scott  Respond to of 362860
 
Bloomberg (and Company?) in the Wings
______________________________________________________

By Jonathan Capehart
The Washington Post
Friday, January 11, 2008; A17

If you thought Sen. Barack Obama's victory in the Iowa caucuses was historic and Sen. Hillary Clinton's outta-nowhere win in the New Hampshire primary extraordinary, then be prepared to gasp once again if New York Mayor Michael R. Bloomberg announces a bid for the White House.

That's because the Democrat-turned-Republican-turned-independent would announce not only his own candidacy but also that of his running mate. A source close to the impending Bloomberg presidential effort told me last Thursday, "If Mike Bloomberg were to petition to get on the ballot, it would be easier to do so with a vice presidential candidate."

Let me disclose that I worked on Bloomberg's first campaign for mayor, in 2001. I mention this because, while the campaign didn't officially kick off until June of that year, my informal work on it began in mid-February. So I asked the Bloomberg operative if past is prologue: "Is it safe to assume you guys are already interviewing and vetting a No. 2 for Bloomberg?" He said, "That's a fair assumption on your part."

A Bloomberg presidential run looked much more doubtful just a few days ago, when everyone, including Clinton herself, thought the charismatic senator from Illinois would run off with the New Hampshire primary. That Obama's tidal wave out of Iowa smacked up against the stone walls of the Granite State means the billionaire mayor's White House hunt is back on track. Yesterday news broke that Bloomberg has been quietly compiling months of polling and voter data to assess his presidential chances. And Doug Schoen, a key adviser and strategist from the mayor's two campaigns, told the Los Angeles Times last weekend, "Bloomberg is going to spend the next two months doing an assessment of his prospects."

Just whom Team Bloomberg has met with about joining the ticket is not known. But Sen. Chuck Hagel (R-Neb.) and former senator Sam Nunn (D-Ga.) have been mentioned frequently. The vetting is going on because the calendar demands such a bold move.

People around Bloomberg have said that if he were to pull the trigger on an Oval Office run, it would happen sometime around March 5. That's when the petitioning process to get on the ballot in Texas begins. He would need 74,108 signatures by May 12 for an independent run in that state. According to Richard Winger of Ballot Access News, if Bloomberg instead accepted the nomination of the Reform or Texas Independence parties, which have filed their intention to petition with the Texas secretary of state, he would have an additional week to gather only 43,991 signatures.

For the major parties, under normal circumstances, getting on a state's ballot can be difficult. For an independent challenger, the obstacles are even greater. Usually such a candidate is underfunded and out-lawyered. That wouldn't be a worry for Bloomberg, who could spend $1 billion of his own money on a campaign.

And by having a running mate at the outset, rather than waiting until the late summer, when the Democrats and Republicans will nominate their presidential and vice presidential candidates, Bloomberg would be saved the headache of going back to all those states to amend the ballots to include his No. 2.

The independent mayor has used his own jet to go from one high-profile forum to another to cultivate an image of nonpartisan success. The latest example was Monday's meeting hosted by University of Oklahoma president and former senator David Boren (D-Okla.), along with Hagel, Nunn and other possible vice presidential choices. All present decried Washington's partisan gridlock. Bloomberg didn't say much and didn't take questions from the media.

I'll take Bloomberg at his word that he is not running. Those close to him say he truly hasn't made up his mind. But this flurry of activity around him squares with my knowledge of the mayor as a deliberative chief executive who takes in as much information as possible before making a decision -- even as subordinates stir the presidential pot.



To: Rock_nj who wrote (123565)1/12/2008 9:42:39 PM
From: stockman_scott  Respond to of 362860
 
Paulson Says Any Economic Stimulus Would Be Swift (Update1)

By Kevin Carmichael and Rich Miller

Jan. 12 (Bloomberg) -- U.S. Treasury Secretary Henry Paulson said the U.S. economy slowed ``rather materially'' at the end of last year, and any stimulus package should be put into effect swiftly.

``We are looking at things that could be done quickly,'' Paulson said yesterday. ``Time is of the essence.''

Paulson's comments, in an interview on Bloomberg Television's ``Political Capital with Al Hunt,'' were the clearest signs yet that the administration is likely to propose a package of tax cuts and other fiscal measures to spur growth in President George W. Bush's State of the Union address on Jan. 28.

Paulson, sounding more pessimistic than previously on the economy, said consumers face a variety of challenges, including declining house prices, rising energy costs and a weaker job market.

``There are signs'' the economy ``is slowing down fairly rapidly,'' he said. ``If something were to be done here, I think the focus would be on something that's temporary and that could get done and make a difference soon.''

Democratic leaders in Congress have pledged to work with Bush on a package of measures to buttress consumer confidence and avoid a recession. A government official, who declined to be identified, said the administration is looking at tax rebates aimed at low- and middle-income Americans and tax breaks for business investment as part of a potential stimulus package.

Schumer Speech

Senator Charles Schumer of New York today accused Bush of taking a ``do-nothing approach'' and urged ``timely'' adoption of measures to stimulate the economy.

Schumer, delivering the Democratic Party's weekly radio address, said the measures should be targeted to middle-class Americans rather than the wealthy and include tax cuts as well as new spending.

Paulson, acknowledging that Bush can't convince the Democratic-led Congress to make his 2001 and 2003 tax cuts permanent, said it would be easier to get agreement on temporary measures designed to speed help to the economy.

``If there is a stimulus, I think the purpose would be to help the economy this year,'' said the former chief executive officer of Goldman Sachs Group Inc.

Economists ranging from Harvard University's Lawrence Summers, a former Treasury secretary under President Bill Clinton, to Lawrence Lindsey, the former director of Bush's National Economic Council, have backed a budget package.

The fiscal steps would complement interest-rate cuts by the Federal Reserve. Fed Chairman Ben S. Bernanke signaled two days ago that he is prepared to make deeper rate reductions, pledging ``substantive additional action'' to aid the economy.

Avoid Recession

Paulson said he expects the U.S. will avoid a recession, helped in part by record exports. Yet he acknowledged the U.S. economy is heading for tougher times.

``There are risks to the downside,'' he said.

Homebuilding has declined for seven straight quarters and Fed officials say it may take at least six more months before the industry rebounds. Paulson said the housing market poses the biggest threat to the economy and made clear he expects home prices to continue to fall.

``There's no doubt that this hasn't run its course yet,'' he said.

The unemployment rate rose to 5 percent in December, the highest in two years, from 4.7 percent the previous month. Paulson called the latest jobs numbers another challenge for the economy and consumers.

Banking Woes

The economy has also been buffeted by losses in the banking and financial industry, as companies have been forced to write off billions of dollars on investments in mortgages and loans went bad.

Countrywide Financial Corp., the nation's biggest mortgage lender, agreed yesterday to be taken over by Bank of America Corp. after speculation surged this week the lender would be forced to file for bankruptcy.

Paulson declined to comment specifically on the merger. He did say the Treasury was encouraging banks and other financial institutions to strengthen their balance sheets by raising more money from investors so they won't have to cut back on lending.

To contact the reporters on this story: Kevin Carmichael in Washington at kcarmichael@bloomberg.net ; Rich Miller in Washington at rmiller28@bloomberg.net .

Last Updated: January 12, 2008 15:41 EST



To: Rock_nj who wrote (123565)1/13/2008 1:13:08 PM
From: stockman_scott  Respond to of 362860
 
As Obama Rises, Old Guard Civil Rights Leaders Scowl

washingtonpost.com

By William Jelani Cobb
The Washington Post
Sunday, January 13, 2008; B01

There was a time in the not-too-distant past when "black president" was synonymous with "president of black America." That was the office to which Jesse Jackson appointed himself in the 1970s -- resigned to the fact that the actual presidency was out of reach. In 2003, Chris Rock wrote and directed "Head of State," a film about the first black man to win the presidency. (It was a comedy.) And in the ultimate concession, some African Americans have attempted to bestow the title of black president upon Bill Clinton -- a white man.

In the wake of his strong showing in the Iowa caucuses and the New Hampshire primary, Sen. Barack Obama has already permanently changed the meaning of that term. It is no longer an oxymoron or a quixotic in-joke. And this, perhaps more than anything else, explains his tortured relationship with black civil rights leaders.

The most amazing thing about the 2008 presidential race is not that a black man is a bona fide contender, but the lukewarm response he has received from the luminaries whose sacrifices made this run possible. With the notable exception of Joseph Lowry, the Southern Christian Leadership Conference veteran who gave a stirring invocation at Obama's Atlanta campaign rally in June and subsequently endorsed him, Obama has been running without much support from many of the most recognizable black figures in the political landscape.

That's because, positioned as he is between the black boomers and the hip-hop generation, Obama is indebted, but not beholden, to the civil rights gerontocracy. A successful Obama candidacy would simultaneously represent a huge leap forward for black America and the death knell for the reign of the civil rights-era leadership -- or at least the illusion of their influence.

The most recent example of the old guard's apparent aversion to Obama was Andrew Young's febrile YouTube ramblings about Bill Clinton being "every bit as black as Barack Obama" and his armchair speculation that Clinton had probably bedded more black women during his lifetime than the senator from Illinois -- as if racial identity could be transmitted like an STD. This could be dismissed as a random instance of a politician speaking out of turn were it not part of an ongoing pattern.

Last spring, Al Sharpton cautioned Obama "not to take the black vote for granted." Presumably he meant that the senator had not won over the supposed gatekeepers of the black electorate. Asked why he had not endorsed Obama, Sharpton replied that he would "not be cajoled or intimidated by any candidate." More recently Sharpton claimed on his radio show that the candidates' recent attention to issues of civil rights was a product of pressure from him.

Although Jackson is not entirely unfamiliar with the kind of thing that's happening to Obama -- Coretta Scott King endorsed Walter Mondale over him in 1984 -- he also got into the act. He criticized Obama for not championing the "Jena Six" cause -- the case of six young black men in Louisiana charged with beating a white classmate -- vigorously enough. After Obama's Iowa victory, Jackson demanded that the senator bolster "hope with substance."

Taken as a conglomerate, Jackson, Young, Sharpton and Georgia Rep. John Lewis represent a sort of civil rights old boy network -- a black boy network -- that has parlayed its dated activist credentials into cash and jobs. Jackson, a two-time presidential candidate, has become a CNN host; Young was mayor of Atlanta and sits on numerous corporate boards; and Lewis is essentially representative-for-life of the 5th Congressional District in Georgia. Sharpton is younger than the others but a peer in spirit.

To the extent that the term "leader" is applicable, these four men likely represent the interests of Democratic Party insiders more than those of the black community. Both Young and Lewis have endorsed Sen. Hillary Rodham Clinton; Sharpton and Jackson have acted ambivalent, alternately mouthing niceties about Obama and criticizing his stances on black issues.

It may be that, because they doubt that he can actually win, the civil rights leaders are holding Obama at arm's length in an attempt to build their houses on what looks to be the firmer ground. And there are certainly patronage benefits should Clinton win. She owes black pols, starting with Rep. Charlie Rangel (D-N.Y.), who first suggested that the party endorse her for a New York Senate seat. Rangel has also lined up behind Clinton.

There is far more to politics -- even racial politics -- than skin color. Still it is counterintuitive to think that Lewis, whose political career began when he was bludgeoned in Selma, Ala., fighting for black voting rights, is witnessing the rise of the first viable black presidential candidate and yet opts to support a white machine politician.

One of the most telling aspects of Young's YouTube commentary was his statement that he'd called his political connections in Chicago about Obama and been told "they don't know him." There are certainly reasons not to support Obama, but not having friends in common isn't one of them. Young went on to announce that Obama was too young and should wait until 2016 -- a curious statement considering that Young was apprenticed to Martin Luther King Jr., who was 26 when he launched the Montgomery bus boycotts that eventually toppled segregation.

The cynical braying about Obama's prospects has not been confined to the liberal civil rights quarters of black America. The conservative commentator Shelby Steele argued in his book "A Bound Man" that Obama isn't perceived as "black" enough to win over African American voters.

In fact, Obama strategists have been struggling to convince black voters that Obama can actually win over white voters and be a viable candidate. Many blacks want to support a winner and hope that Obama will become more attractive to white voters, not less.

Part of this disconnect is a generational divide, one that is apparent in Jackson's own household. Following Jackson's criticism of Obama in the Chicago Sun-Times, his son, Rep. Jesse Jackson Jr., wrote a passionate defense of Obama's activist credentials.

As polls show increasing black support for Obama, Jackson, Sharpton and Young begin to look like a once-wealthy family that has lost its fortune but has to keep spending to maintain appearances. Obama's tepid early showing among blacks in the polls had more to do with name recognition and concerns about his viability as a candidate than with Jackson or Sharpton withholding their endorsement.

Ignoring Sharpton or Jackson is not the same thing as taking the black vote for granted. It is a reasonable calculation that neither of them can deliver many votes and certainly not enough to offset the number of white votes that their approval could lose Obama. Jackson and Sharpton might be holding out for a better deal in exchange for their support, but with Oprah Winfrey and Chris Rock among Obama's list of supporters, they have little to bargain with.

If Obama makes a strong showing in the South Carolina primary -- the first with a substantial number of black voters -- it will become apparent that the black boy network has begun bouncing checks.

The irony is that for generations of black "firsts," the prerequisite for entering an institution was proving that you were just like the establishment that ran it. (Think of Jackie Robinson's approach to the major leagues, or the host of "articulate Negro" roles in Sidney Poitier's body of work.)

Obama has been vastly successful by doing just the opposite: masterfully positioning himself as an outsider. In the process, he's opened the door even wider for black outsiders. Too bad his predecessors refuse to help push him the rest of the way inside.

-William Jelani Cobb is an associate professor of history at Spelman College and the author of "The Devil and Dave Chappelle: And Other Essays."



To: Rock_nj who wrote (123565)1/13/2008 5:19:51 PM
From: stockman_scott  Respond to of 362860
 
Robert Reich's Blog: We Need a Stimulus Now, But What Kind?

robertreich.blogspot.com

<<...Sunday, January 13, 2008

We Need a Stimulus Now, But What Kind?

As I've noted several times over the past year, a fiscal stimulus is necessary if the economy is to avoid recession. We may be in recession already. We can't rely soly on monetary policy. A bold fiscal stimulus is necessary, and must be done quickly in order to prevent millions of people from losing their jobs -- and catapulting us into a deeper recession.

What sort of stimulus? Since 80 percent of Americans pay more in payroll taxes than they do in income taxes, and because middle and lower-income people are far more likely to spend whatever tax relief they get than higher-income people, the best stimulus would offset the payroll tax. And the easiest way to do this is through a refundable tax credit, effective as soon as possible. I've looked at what the candidates are offering. Obama's stimulus package seems to me to be the most reasonable. It would give a direct, immediate boost to the economy. In my view, its tax cuts for workers and extra social security payments for seniors offer the fastest and most efficient way to get more purchasing power into the economy...>>
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*Robert Reich is the nation's 22nd Secretary of Labor and a professor at the University of California at Berkeley. This is his personal journal.