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Running Out of Pixie Dust

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On September 18 of 2008, I pointed out that exactly one year earlier, Jon Markman of MSN.com noted that the Federal Reserve had been using “duct tape and pixie dust” to hold the economy together.  In fact, there were plenty of people who knew that our Titanic financial system was headed for an iceberg at full speed – long before September of 2008.  In October of 2006, Ambrose Evans-Pritchard of the Telegraph wrote an article describing how Treasury Secretary Hank Paulson had re-activated the Plunge Protection Team (PPT):

Mr Paulson has asked the team to examine “systemic risk posed by hedge funds and derivatives, and the government’s ability to respond to a financial crisis”.

“We need to be vigilant and make sure we are thinking through all of the various risks and that we are being very careful here. Do we have enough liquidity in the system?” he said, fretting about the secrecy of the world’s 8,000 unregulated hedge funds with $1.3 trillion at their disposal.

Among the massive programs implemented in response to the financial crisis was the Federal Reserve’s quantitative easing program, which began in November of 2008.  A second quantitative easing program (QE 2) was initiated in November of 2010.  The next program was “operation twist”.  Last week, Jon Hilsenrath of the Wall Street Journal discussed the Fed’s plan for another bit of magic, described by economist James Hamilton as “sterilized quantitative easing”.  All of these efforts by the Fed have served no other purpose than to inflate stock prices.  This process was first exposed in an August, 2009 report by Precision Capital Management entitled, A Grand Unified Theory of Market ManipulationMore recently, on March 9, Charles Biderman of TrimTabs posted this (video) rant about the ongoing efforts by the Federal Reserve to manipulate the stock market.

At this point, many economists are beginning to pose the question of whether the Federal Reserve has finally run out of “pixie dust”.  On February 23, I mentioned the outlook presented by economist Nouriel Roubini (a/k/a Dr. Doom) who provided a sobering counterpoint to the recent stock market enthusiasm in a piece he wrote for the Project Syndicate website entitled, “The Uptick’s Downside”.  I included a discussion of economist John Hussman’s stock market prognosis.  Dr. Hussman admitted that there might still be an opportunity to make some gains, although the risks weigh heavily toward a more cautious strategy:

The bottom line is that near-term market direction is largely a throw of the dice, though with dice that are modestly biased to the downside.  Indeed, the present overvalued, overbought, overbullish syndrome tends to be associated with a tendency for the market to repeatedly establish slight new highs, with shallow pullbacks giving way to further marginal new highs over a period of weeks.  This instance has been no different.  As we extend the outlook horizon beyond several weeks, however, the risks we observe become far more pointed.  The most severe risk we measure is not the projected return over any particular window such as 4 weeks or 6 months, but is instead the likelihood of a particularly deep drawdown at some point within the coming 18-month period.

In December of 2010, Dr. Hussman wrote a piece, providing “An Updated Who’s Who of Awful Times to Invest ”, in which he provided us with five warning signs:

The following set of conditions is one way to capture the basic “overvalued, overbought, overbullish, rising-yields” syndrome:

1) S&P 500 more than 8% above its 52 week (exponential) average
2) S&P 500 more than 50% above its 4-year low
3) Shiller P/E greater than 18
4) 10-year Treasury yield higher than 6 months earlier
5) Advisory bullishness > 47%, with bearishness < 27%

On March 10, Randall Forsyth wrote an article for Barron’s, in which he basically concurred with Dr. Hussman’s stock market prognosis.  In his most recent Weekly Market Comment, Dr. Hussman expressed a bit of umbrage about Randall Forsyth’s remark that Hussman “missed out” on the stock market rally which began in March of 2009:

As of last week, the market continued to reflect a set of conditions that have characterized a wicked subset of historical instances, comprising a Who’s Who of Awful Times to Invest .  Barron’s ran a piece over the weekend that reviewed our case.  It’s interesting to me that among the predictable objections (mostly related to our flat post-2009 performance, but overlooking the 2000-2009 record), none addressed the simple fact that the prior instances of this condition have invariably turned out terribly.  It seems to me that before entirely disregarding evidence that is as rare as it is ominous, you have to ask yourself one question.  Do I feel lucky?

*   *   *

Investors Intelligence notes that corporate insiders are now selling shares at levels associated with “near panic action.”  Since corporate insiders typically receive stock as part of their compensation, it is normal for insiders to sell about 2 shares on the open market for every share they purchase outright.  Recently, however, insider sales have been running at a pace of more than 8-to-1.

*   *   *

While investors and the economic consensus has largely abandoned any concern about a fresh economic downturn, we remain uncomfortable with the divergence between reliable leading measures – which are still actually deteriorating – and more upbeat coincident/lagging measures on which public optimism appears to be based.

Nevertheless, Randall Forsyth’s article was actually supportive of Hussman’s opinion that, given the current economic conditions, discretion should mandate a more risk-averse investment strategy.  The concluding statement from the Barron’s piece exemplified such support:

With the Standard & Poor’s 500 up 24% from the October lows, it may be a good time to take some chips off the table.

Beyond that, Mr. Forsyth explained how the outlook expressed by Walter J. Zimmermann concurred with John Hussman’s expectations for a stock market swoon:

Walter J. Zimmermann Jr., who heads technical analysis for United-ICAP, a technical advisory firm, puts it more succinctly:  “A perfect financial storm is looming.”

*   *   *

THERE ARE AMPLE FUNDAMENTALS to knock the market down, including the well-advertised surge in gasoline prices, which Zimmermann calculates absorbed the discretionary spending power for half of America.  And the escalating tensions over Iran’s nuclear program “is the gift that keeps on giving…if you like fear-inflated energy prices,” he wrote in the client letter.

At the same time, “the euro-zone response to their deflationary debt trap continues to be further loans to the hopelessly indebted, in return for crushing austerity programs.

So, evidently, not content with another mere recession, euro-zone leaders are inadvertently shooting for another depression.  They may well succeed.”

The euro zone is (or was, he stresses) the world’s largest economy, and a buyer of 22% of U.S. exports, which puts the domestic economy at risk, he adds.

Given the fact that the Federal Reserve has already expended the “heavy artillery” in its arsenal, it seems unlikely that the remaining bit of pixie dust in Ben Bernanke’s pocket – “sterilized quantitative easing” – will be of any use in the Fed’s never-ending efforts to inflate stock prices.


 

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Israel for Dummies

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I don’t pretend to be an expert on Middle East politics.  I usually rely on the perspective of Steve Clemons at The Washington Note, who provides candid, unvarnished commentary on the complicated issues in that region.  Since December of 2008, I have been following the accomplishments of Jeremy Ben-Ami, the Executive Director of J Street, which he describes as “the political arm of the pro-Israel, pro-peace movement”.

Concern over the threat to Israel from Iran’s nuclear ambitions has been a hot topic during this election year.  Nevertheless, on February 27, Andrew Jones wrote a piece for The Raw Story, which included some disclosures published by Wikileaks concerning Iran’s uranium enrichment efforts:

Growing concerns over Iran’s nuclear facilities may prove to be all for naught.  Officials from the global intelligence company Stratfor allegedly discussed that Israel may have already destroyed the Iranian nuclear facility, according to one of the emails released by Wikileaks Monday.

In one of the over five million emails leaked, the conversation centered on Israeli Defense Minister Ehud Barak praising the news of deadly munitions blasts at a base of Iran’s elite Revolutionary Guards.

“I think this is a diversion.  The Israelis already destroyed all the Iranian nuclear infrastructure on the ground weeks ago,” one intelligence official wrote in an email dated November 14, 2011. “The current ‘let’s bomb Iran’ campaign was ordered by the EU leaders to divert the public attention from their at home financial problems.  It plays also well for the US since Pakistan, Russia and N. Korea are mentioned in the report. ”

This scenario makes sense.  Iran would not likely admit to having been humiliated by Israel .  Beyond that, the European Union plutocrats would enjoy nothing more than a decent sideshow to distract attention from their economic austerity fiasco.

For years, I have been waiting for someone to write a book called Israel for Dummies.  Too many American teevee pundits seem completely ignorant about Israel’s internal political strife and its impact on the prospects for peace with the Palestinians.  It appears as though someone has finally written that book.  I recently came across a great piece written by Noah Millman for The American Conservative.  Mr. Millman wrote a review of a new book entitled, The Unmasking of Israel by Gershom Gorenberg.  As Millman explains, the book takes us back to the early days of Israel, with David Ben-Gurion at the helm, bringing us to the present-day, never-ending conflict with the Palestinians.  Here are some highlights from Noah Millman’s book review:

Rather, the thrust of the book, as the title states, is to demonstrate that the series of decisions made during and after the 1967 War that resulted in the occupation of the West Bank and Gaza set in motion a process that has progressively “unmade” the State of Israel.  Indeed, the progressive expansion of the settlement enterprise has so eroded the foundations of the signature achievement of political Zionism – Israel as we now know it – that not merely a “Jewish democratic state” but the state as such is now imperiled.

*   *   *

Since 1967, Gorenberg relates, the settlement enterprise has undermined the Israeli state top to bottom.  It has fostered secrecy and corruption in government.

*   *   *

Again the story is familiar.  Less so is the framing. Gorenberg, though he is outraged by the plight of the Palestinians, is not really writing about that plight.  Nor is he writing from an anti-Zionist perspective.  Rather, he is writing from a deeply Zionist point of view.  Zionism, we tend to forget, was not a self-defense movement.  It was a nationalist movement. Nationalism tells a people a story about what it means to be free – that being free means being part of a self-conscious, self-governing, sovereign, and independent collective.  Losing consciousness of one’s national group, being governed by other groups, failing to achieve independence and sovereignty on par with other nations – these are signs of unfreedom.  Of immaturity. The Jews before Zionism were, from the perspective of this narrative, either an exceptionally immature nation or not a nation at all.  The goal of Zionism was not simply – or even primarily – to provide for a “safe haven” for Jews fleeing persecution by the Czar or the Nazis.  The goal was the spiritual rejuvenation of the Jewish people by molding them into a nation like other nations and achieving independent statehood.

This is a narrative frame that, in broad strokes, Gorenberg accepts, which is why he is properly seen as a Zionist.  Indeed, the whole argument of the book is that by holding onto and settling the territories captured in 1967, Israel has reverted to a mode of existence that Zionism was supposed to help the Jews grow out of. By undermining the authority of the state, the settlement enterprise has revived modes of being and of argument that, from Gorenberg’s perspective, the Jewish people should have grown out of when they acquired the power and responsibility of a state. Indeed, that was the whole point, from a moral perspective, of acquiring state power in the first place.  The settlement enterprise doesn’t just undermine the moral case for Israel because it’s an injustice (plenty of states have perpetrated injustices – indeed, far worse injustices – without undermining the case for statehood as such) but because it is evidence that Zionism failed in what was arguably its primary objective.

As an aside:  Be sure to read the Comment stream following Millman’s piece.  It included some astute remarks and a good debate.

One American’s experience in attempting to get a better understanding of the Israeli – Palestinian conflict was chronicled on the Al Jazeera website.  Punk rock icon, Jello Biafra of The Dead Kennedys discussed his decision to cancel a show he was scheduled to perform at the Barby Club in Tel Aviv with his new band (Jello Biafra and the Guantanamo School of Medicine).  His bandmates had decided to boycott Israel in order to support the Boycott Divestment and Sanctions (BDS) movementWikipedia lists this explanation of the BDS movement’s three main goals:

  1. Freeing all Palestinian territories from Israeli influence since 1967 and dismantling the Israeli West Bank barrier;
  2. Acting towards the rights of the Arab-Palestinian citizens of Israel; and
  3. Promoting the interests of Arab Palestinian refugees in reference to the United Nations General Assembly Resolution 194 of 1948.

Jello Biafra’s account of what followed his decision to cancel the Tel Aviv gig made for some interesting reading:

So with the rollercoaster still in my stomach and my head, I flew solo to Israel instead.  The mission:  to check things out myself and hopefully at least get closer to some kind of conclusion on whether artists boycotting Israel, especially me, was really the best way to help the Palestinian people.

*   *   *

I also got an invitation from a self-proclaimed fan to “come meet the Israeli right” and see the settlements through their eyes, complete with a wine-tasting party.

Many people I met on my trip to Israel feel that the boycott has damaged the Israeli opposition more than it has anyone else and “helped silence the peace camp in Israel”.  A veteran journalist I met later told me, “the best way to contribute to peace is to try and work to understand both sides” and that he felt that boycotts strengthen extremists by keeping people apart.

*   *   *

One of the few things both Israelis and Palestinians seem to agree on is that one of the main obstacles to peace these days is the settlers.

Today the illegal settlements are completely out of control, with 300,000 settlers planted across the Green Line in the West Bank and another 200,000 beyond the Green Line in East Jerusalem. Borders are creatively moved and enforced by the infamous wall, started by the ideas of Yitzhak Rabin and greatly expanded by Ariel Sharon.  It’s a black eye on the face of Israel’s reputation today, considered so even among many of Israel’s citizens and supporters.

Some people told me that if the wall had been built along the Green Line, it might have actually worked.  But Sharon then used it as a land grab, creatively and maniacally routing it through the middle of Palestinian towns, Palestinian farmland and across Palestinian roads, in a deliberate attempt to make the West Bank such a splattered Swiss-cheese hodgepodge of impassable walls and checkpoints that a free Palestinian state could never get off the ground.

Any fantasy that Palestinians could one day be broken down to stay on “their side” of the wall and live happily ever after is ridiculous.  It flies in the face of all human instinct and human rights. It is never going to happen.  Like the Berlin Wall, it is destined to fall sooner rather than later.

*   *   *

A boycott of products made in settlements has begun inside Israel.  There is also a growing boycott by artists refusing to cross the Green Line and perform for the settlers.  A fancy venue has opened in one of the largest settlements in Ariel.  Many artists refuse to perform there.

*   *   *

Yet bringing down this regime by boycott may be a much higher mountain to climb than the boycott of South Africa.  The 1985 musician boycott of Sun City (a posh, government-owned golf resort and casino in South Africa) was just a promotional tool for the financial boycott, where banks, universities and corporations caved into pressure to pull their investments out of South Africa and broke the back of the white apartheid regime.

*   *   *

I am not saying the same tactics that brought down apartheid South Africa can’t be done.  I am just saying that there are different and heavier obstacles this time and people need to be ready for them.

South Africa never had anything like the AIPAC (American Israel Public Affairs Committee) lobby, which is now considered more of a lobby for Likud than for the Israeli people.  Nevertheless, they have a stranglehold over almost every member of Congress of both parties, using Joe McCarthy-type tactics to smear anyone they don’t like as anti-Jewish – and get them voted out of office.

*   *   *

I will not perform in Israel unless it is a pro-human rights, anti-occupation event that does not violate the spirit of the boycott.  Each artist must decide this for themselves. I am staying away for now, but am also really creeped out by the attitudes of some of the boycott hardliners, and hope someday to find a way to contribute something positive here.  I will not march or sign on with anyone who is more interested in making threats than making friends.

As for the Arab Spring, I cross my fingers on one hand and bite my nails with the other.

I have a lot to learn and a long way to go.

We all have a lot to learn.  Jello Biafra’s humility is refreshing.  If only our politicians were so humble  .  .  .


 

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Rampant Stock Market Pumping

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It has always been one of my pet peeves.  The usual stock market cheerleaders start chanting into the echo chamber.  Do they always believe that their efforts will create a genuine, consensus reality?  A posting at the Daily Beast website by Zachary Karabell caught my attention.  The headline said, “Bells Are Ringing!  Confidence Rises as the Dow –  Finally – Hits 13,000 Again”.  After highlighting all of the exciting news, Mr. Karabell was thoughtful enough to mention the trepidation experienced by a good number of money managers, given all the potential risks out there.  Nevertheless, the piece concluded with this thought:

The crises that have obsessed markets for the past years – debt and defaults, housing markets, Europe and Greece– are winding down.  And markets are gearing up.  Maybe it’s time to focus on that.

As luck would have it, my next stop was at the Pragmatic Capitalism blog, where I came across a clever essay by Lance Roberts, which had been cross-posted from his Streettalklive website.  The title of the piece, “Media Headlines Will Lead You To Ruin”, jumped right out at me.  Here’s how it began:

It’s quite amazing actually.   Two weeks ago Barron’s ran the cover page of “Dow 15,000?.  Over the weekend Alan Abelson ran a column titled “Everyone In The Pool”.  Today, CNBC leads with “Dow 13,000 May Finally Lure Investors Back Into Stocks”.   Unfortunately, for most investors, the headline is probably right.  Investors, on the whole, have a tendency to do exactly the opposite of what they should do when it comes to investing – “Buy High and Sell Low.”  The reality is that the emotions of greed and fear do more to cause investors to lose money in the market than being robbed at the point of a gun.

Take a look at the chart of the data from ICI who tracks flows of money into and out of mutual funds.  When markets are correcting investors panic and sell out of stocks with the majority of the selling occurring near the lows of the market.  As the markets rally investors continue to sell as they disbelieve the rally intially and are just happy to be getting some of their money back.  However, as the rally continues to advance from oversold conditions – investors are “lured” back into the water as memories of the past pain fades and the “greed factor” overtakes their logic.  Unfortunately, this buying always tends to occur at, or near, market peaks.

Lance Roberts provided some great advice which you aren’t likely to hear from the cheerleading perma-bulls – such as, “getting back to even is not an investment strategy.”

As a longtime fan of the Zero Hedge blog, I immediately become cynical at the first sign of irrational exuberance demonstrated by any commentator who downplays economic headwinds while encouraging the public to buy, buy, buy.  Those who feel tempted to respond to that siren song would do well to follow the Weekly Market Comments by economist John Hussman of the Hussman Funds.  In this week’s edition, Dr. Hussman admitted that there may still be an opportunity to make some gains, although the risks weigh heavily toward a more cautious strategy:

The bottom line is that near-term market direction is largely a throw of the dice, though with dice that are modestly biased to the downside.  Indeed, the present overvalued, overbought, overbullish syndrome tends to be associated with a tendency for the market to repeatedly establish slight new highs, with shallow pullbacks giving way to further marginal new highs over a period of weeks.  This instance has been no different.  As we extend the outlook horizon beyond several weeks, however, the risks we observe become far more pointed.  The most severe risk we measure is not the projected return over any particular window such as 4 weeks or 6 months, but is instead the likelihood of a particularly deep drawdown at some point within the coming 18-month period.

Economist Nouriel Roubini (a/k/a Dr. Doom) provided a sobering counterpoint to the recent stock market enthusiasm in a piece he wrote for the Project Syndicate website entitled, “The Uptick’s Downside”.  Dr. Roubini focused on the fact that “at least four downside risks are likely to materialize this year”.  These include:  “fiscal austerity pushing the eurozone periphery into economic free-fall” as well as “evidence of weakening performance in China and the rest of Asia”.  The third and fourth risks were explained in the following terms:

Third, while US data have been surprisingly encouraging, America’s growth momentum appears to be peaking.  Fiscal tightening will escalate in 2012 and 2013, contributing to a slowdown, as will the expiration of tax benefits that boosted capital spending in 2011.  Moreover, given continuing malaise in credit and housing markets, private consumption will remain subdued; indeed, two percentage points of the 2.8% expansion in the last quarter of 2011 reflected rising inventories rather than final sales.  And, as for external demand, the generally strong dollar, together with the global and eurozone slowdown, will weaken US exports, while still-elevated oil prices will increase the energy import bill, further impeding growth.

Finally, geopolitical risks in the Middle East are rising, owing to the possibility of an Israeli military response to Iran’s nuclear ambitions.  While the risk of armed conflict remains low, the current war of words is escalating, as is the covert war in which Israel and the US are engaged with Iran; and now Iran is lashing back with terrorist attacks against Israeli diplomats.

Any latecomers to the recent festival of bullishness should be mindful of the fact that their fellow investors could suddenly feel inspired to head for the exits in response to one of these risks.  Lance Roberts said it best in the concluding paragraph of his February 21 commentary:

With corporate earnings now slowing sharply, the economy growing at a sub-par rate, the Eurozone headed towards a prolonged recession and the American consumer facing higher gas prices and reduced incomes, a continued bull market rally from here is highly suspect.   Add to those economic facts the technical aspects of a very extended market with overbought internals – the reality is that this is a better place to be selling investments versus buying them.  Or – go to Vegas and bet on black.


 

Obama And The TARP

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I always enjoy it when a commentator appearing on a talk show reminds us that President Obama has become a “tool” for the Wall Street bankers.  This theme is usually rebutted with the claim that the TARP bailout happened before Obama took office and that he can’t be blamed for rewarding the miscreants who destroyed our economy.  Nevertheless, this claim is not entirely true.  President Bush withheld distribution of one-half of the $700 billion in TARP bailout funds, deferring to his successor’s assessment of the extent to which the government should intervene in the banking crisis.  As it turned out, during the final weeks of the Bush Presidency, Hank Paulson’s Treasury Department declared that there was no longer an “urgent need” for the TARP bailouts to continue.  Despite that development, Obama made it clear that anyone on Capitol Hill intending to get between the banksters and that $350 billion was going to have a fight on their hands.  Let’s jump into the time machine and take a look at my posting from January 19, 2009 – the day before Obama assumed office:

On January 18, Salon.com featured an article by David Sirota entitled:  “Obama Sells Out to Wall Street”.  Mr. Sirota expressed his concern over Obama’s accelerated push to have immediate authority to dispense the remaining $350 billion available under the TARP (Troubled Asset Relief Program) bailout:

Somehow, immediately releasing more bailout funds is being portrayed as a self-evident necessity, even though the New York Times reported this week that “the Treasury says there is no urgent need” for additional money.  Somehow, forcing average $40,000-aires to keep giving their tax dollars to Manhattan millionaires is depicted as the only “serious” course of action.  Somehow, few ask whether that money could better help the economy by being spent on healthcare or public infrastructure.  Somehow, the burden of proof is on bailout opponents who make these points, not on those who want to cut another blank check.

Discomfort about another hasty dispersal of the remaining TARP funds was shared by a few prominent Democratic Senators who, on Thursday, voted against authorizing the immediate release of the remaining $350 billion.  They included Senators Russ Feingold (Wisconsin), Jeanne Shaheen (New Hampshire), Evan Bayh (Indiana) and Maria Cantwell (Washington).  The vote actually concerned a “resolution of disapproval” to block distribution of the TARP money, so that those voting in favor of the resolution were actually voting against releasing the funds.  Earlier last week, Obama had threatened to veto this resolution if it passed.  The resolution was defeated with 52 votes (contrasted with 42 votes in favor of it).  At this juncture, Obama is engaged in a game of “trust me”, assuring those in doubt that the next $350 billion will not be squandered in the same undocumented manner as the first $350 billion.  As Jeremy Pelofsky reported for Reuters on January 15:

To win approval, Obama and his team made extensive promises to Democrats and Republicans that the funds would be used to better address the deepening mortgage foreclosure crisis and that tighter accounting standards would be enforced.

“My pledge is to change the way this plan is implemented and keep faith with the American taxpayer by placing strict conditions on CEO pay and providing more loans to small businesses,” Obama said in a statement, adding there would be more transparency and “more sensible regulations.”

Of course, we all know how that worked out  .   .   .  another Obama promise bit the dust.

The new President’s efforts to enrich the Wall Street banks at taxpayer expense didn’t end with TARP.  By mid-April of 2009, the administration’s “special treatment” of those “too big to fail” banks was getting plenty of criticism.  As I wrote on April 16 of that year:

Criticism continues to abound concerning the plan by Turbo Tim and Larry Summers for getting the infamous “toxic assets” off the balance sheets of our nation’s banks.  It’s known as the Public-Private Investment Program (a/k/a:  PPIP or “pee-pip”).

*   *   *

One of the harshest critics of the PPIP is William Black, an Economics professor at the University of Missouri.  Professor Black gained recognition during the 1980s while he was deputy director of the Federal Savings and Loan Insurance Corporation (FSLIC).

*   *   *

I particularly enjoyed Black’s characterization of the PPIP’s use of government (i.e. taxpayer) money to back private purchases of the toxic assets:

It is worse than a lie.  Geithner has appropriated the language of his critics and of the forthright to support dishonesty.  That is what’s so appalling — numbering himself among those who convey tough medicine when he is really pandering to the interests of a select group of banks who are on a first-name basis with Washington politicians.

The current law mandates prompt corrective action, which means speedy resolution of insolvencies.  He is flouting the law, in naked violation, in order to pursue the kind of favoritism that the law was designed to prevent.  He has introduced the concept of capital insurance, essentially turning the U.S. taxpayer into the sucker who is going to pay for everything.  He chose this path because he knew Congress would never authorize a bailout based on crony capitalism.

Although President Obama’s hunt for Osama bin Laden was a success, his decision to “punt” on the economic stimulus program – by holding it at $862 billion and relying on the Federal Reserve to “play defense” with quantitative easing programs – became Obama’s own “Tora Bora moment”, at which point he allowed economic recovery to continue on its elusive path away from us.  Economist Steve Keen recently posted this video, explaining how Obama’s failure to promote an effective stimulus program has guaranteed us something worse than a “double-dip” recession:  a quadruple-dip recession.

Many commentators are currently discussing efforts by Republicans to make sure that the economy is in dismal shape for the 2012 elections so that voters will blame Obama and elect the GOP alternative.  If Professor Keen is correct about where our economy is headed, I can only hope there is a decent Independent candidate in the race.  Otherwise, our own “lost decade” could last much longer than ten years.


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Hillary Clinton Begins Making History

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March 5, 2009

While most American media outlets focus their attention on Rush Limbaugh’s vainglorious publicity extravaganza, Hillary Clinton is traveling around the world, letting everyone know that the foreign policy of the United States is being drastically changed by the new administration.

The new Secretary of State took quite a bit of heat for her failure to stage a fit of righteous indignation over China’s record of human rights abuses, during her visit there.  Nevertheless, America has been a critic of these transgressions for decades.  Given the current economic situation, our need to maintain a healthy business relationship with China and our country’s embarrassing human rights track record for the past eight years, her decision to leave that issue on the back burner for her initial visit, wasn’t such a bad idea.

Her trip to the Middle East was the first step toward rehabilitating the role of the United States as an effective peace broker for the Israeli – Palestinian conflict.  As Barak Ravid reported for Haaretz, prior to Clinton’s arrival in Israel, a list of demands or “red lines” was created and “approved by Prime Minister Ehud Olmert, Foreign Minister Tzipi Livni and Defense Minister Ehud Barak at a meeting with senior defense officials last week”.  These individuals are apparently so accustomed to browbeating Condoleezza Rice, they feel comfortable about dictating their own “marching orders” to be followed by Clinton as she approaches engaging Iran in formal, diplomatic relations.  The Haaretz article itemized these four mandates as follows:

1. Any dialogue must be both preceded by and accompanied by harsher sanctions against Iran, both within the framework of the UN Security Council and outside it.  Otherwise, the talks are liable to be perceived by both Iran and the international community as acceptance of Iran’s nuclear program.

2. Before the dialogue begins, the U.S. should formulate an action plan with Russia, China, France, Germany and Britain regarding what to do if the talks fail.  Specifically, there must be an agreement that the talks’ failure will prompt extremely harsh international sanctions on Iran.

3. A time limit must be set for the talks, to prevent Iran from merely buying time to complete its nuclear development.  The talks should also be defined as a “one-time opportunity” for Tehran.

4. Timing is critical, and the U.S. should consider whether it makes sense to begin the talks before Iran’s presidential election in June.

Steve Clemons of The Washington Note emphasized that “Israel is crossing the line” by attempting to dictate this agenda to our new Secretary of State and President:

Iran’s pretensions in the region are a problem in my view — but Iran, which fears regime change efforts by the US and other of its neighbors, is responding to an “ecosystem” that many around the world have complicity in building.

Israel should be rebuffed by Hillary Clinton.  She should listen to Israel’s views on the region of course — and consider proposals.  But this kind of instruction manual on what red lines can be tolerated or not is pretty outrageous — and borders on the type of irresponsibility and consequences of what a Taiwanese declaration of independence from China would mean.

In another Haaretz article by Barak Ravid, we see Clinton giving Israel some “pushback” that may or may not have been anticipated:

U.S. Secretary of State Hillary Clinton on Wednesday blasted Israel’s plans to demolish Palestinian homes in East Jerusalem as a violation of its international obligations and “unhelpful” to Middle East peace efforts.

“Clearly this kind of activity is unhelpful and not in keeping with the obligations entered into under the ‘road map’,” Clinton said, referring to the long-stalled peace plan.

On March 4, a day before meeting with Israeli leaders in Jerusalem, Clinton met with Palestinian Authority President Mahmoud Abbas and Palestinian Prime Minister Salam Fayyad in the West Bank city of Ramallah.  According to a CNN report, Clinton advised the Palestinian leaders that the United States is committed to the “two-state solution” (establishing a separate Palestinian state) despite the objections to that plan, voiced by Israel’s Prime Minister-designate, Benjamin Netanyahu.

“The United States through President Obama is committed to a comprehensive peace including a two-state solution,” Clinton said.  “I have said that publicly, I have said that privately.  There is no difference in any message.”

Meanwhile, Secretary Clinton made it a point to single out Iran’s “supreme leader”, Ayatollah Ali Khamenei, for interfering in Palestinian affairs by funding terrorism “whether it’s Hezbollah, Hamas or other proxies”.  As the Voice of America News pointed out:

Khamenei also called the Jewish state a “cancerous tumor” and accused U.S. President Barack Obama of following what he called the same mistaken path as George W. Bush in supporting Israel.  He made the comments during a conference in Tehran earlier Wednesday.

Clinton and Palestinian President Mahmoud Abbas dismissed the ayatollah’s remarks.  Mr. Abbas said Iran should look after its own affairs and stop trying to widen the divide among Palestinians.

Although many critics of the new administration complain that Obama has failed to deliver on his promise of “Change”, one important agent of Change on the Obama team is turning out to be none other than Hillary Clinton.  Who could have foreseen that development at this point, last year?

The World Holds Its Breath

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January 19, 2009

All over the world, people are waiting with abated breath as the Obama Presidency begins.  Some thought it would never happen.  I have often wondered whether, at the last minute, the Bush-Cheney junta might decide that it does not want to give up its authority.  Would they contrive some sort of “national security emergency” as a pretext for declaring martial law and suspending the Constitution?  Such a tactic would be entirely consistent with what we have seen for the past eight years.  Surely, there must be some provision buried in the so-called “Patriot Act” allowing the Bush-Cheney regime to continue, despite the expiration of its Constitutionally-prescribed existence.  Constitutional restrictions to unlimited executive power have been ignored by the outgoing administration for the past eight years.  Why should now be any different?  My skepticism on this matter will continue until Barack Obama completes his recitation of the Presidential Oath.

In the mean time, there are those who question whether President Obama will really deliver on his promise of change.  From the liberal side of the political spectrum, plenty of opinions have been published (by reputable commentators) expressing apprehension as to what likely will happen and what actually may not happen during Obama’s tenure in the White House.

On January 18, Salon.com featured an article by David Sirota entitled:  “Obama Sells Out to Wall Street”.  Mr. Sirota expressed his concern over Obama’s accelerated push to have immediate authority to dispense the remaining $350 billion available under the TARP (Troubled Asset Relief Program) bailout:

Somehow, immediately releasing more bailout funds is being portrayed as a self-evident necessity, even though the New York Times reported this week that “the Treasury says there is no urgent need” for additional money.  Somehow, forcing average $40,000-aires to keep giving their tax dollars to Manhattan millionaires is depicted as the only “serious” course of action.  Somehow, few ask whether that money could better help the economy by being spent on healthcare or public infrastructure.  Somehow, the burden of proof is on bailout opponents who make these points, not on those who want to cut another blank check.

Discomfort about another hasty dispersal of the remaining TARP funds was shared by a few prominent Democratic Senators who, on Thursday, voted against authorizing the immediate release of the remaining $350 billion.  They included Senators Russ Feingold (Wisconsin), Jeanne Shaheen (New Hampshire), Evan Bayh (Indiana) and Maria Cantwell (Washington).  The vote actually concerned a “resolution of disapproval” to block distribution of the TARP money, so that those voting in favor of the resolution were actually voting against releasing the funds.  Earlier last week, Obama had threatened to veto this resolution if it passed.  The resolution was defeated with 52 votes (contrasted with 42 votes in favor of it).  At this juncture, Obama is engaged in a game of “trust me”, assuring those in doubt that the next $350 billion will not be squandered in the same undocumented manner as the first $350 billion.  As Jeremy Pelofsky reported for Reuters on January 15:

To win approval, Obama and his team made extensive promises to Democrats and Republicans that the funds would be used to better address the deepening mortgage foreclosure crisis and that tighter accounting standards would be enforced.

“My pledge is to change the way this plan is implemented and keep faith with the American taxpayer by placing strict conditions on CEO pay and providing more loans to small businesses,” Obama said in a statement, adding there would be more transparency and “more sensible regulations.”

Meanwhile, there is worldwide concern about what Obama and Secretary of State Hillary Clinton can accomplish in the foreign relations and anti-terrorism arenas.  As discussed in an editorial from the January 18 Times of London:

Mr Obama’s biggest immediate challenge is in Afghanistan.  The president is hoping a troop surge, which he opposed in Iraq, will work. However, the prospect of a military solution in Afghanistan is remote and he may learn that the hard way.  In the meantime, he has to hope Iraq does not flare up again and that the Iran nuclear question remains one for diplomacy rather than military conflict.  His drive for a Middle East peace deal is not the first by a US president and nor will it be the last.

As the sun finally rises over the Obama Presidency, there are still plenty of clouds in the sky.  Does this mean we are in for more turmoil?  Some people might take this as a sign that it’s about to start raining money.

No Jews Allowed In Rick Warren’s Heaven

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December 22, 2008

There has been quite a bit of attention focused on Barack Obama’s choice of conservative evangelical minister, Rick Warren, to deliver the invocation at the Presidential inauguration ceremony on January 20.  Most of the outrage over that choice stems from the fact that Warren was actively involved in promoting Proposition 8, the controversial California ballot initiative banning same-sex marriages.

A large number of objections to Warren’s participation in this historic ceremony are coming from Hollywood.  As Tina Daunt reported in the December 20 Los Angeles Times, the entertainment community’s reaction to Warren’s role in the inaugural was “swift, angry and bitter”.  Her article quoted Hollywood publicist, Howard Bragman who said the following about Barack Obama:

“What he didn’t realize was how much untapped energy there was in the gay and lesbian community because of the passage of Prop. 8,” said Bragman. “Obama didn’t realize, after all the support he got from the gay and lesbian community, we feel betrayed right now.”

Meanwhile, back at the nation’s capitol, Barney Frank, the openly gay Senator from Massachusetts, had much to say about Warren’s role in the inaugural ceremony.  As Jason Blum reported on December 21 at the Bloomberg website, Senator Frank said this about the inclusion of Warren in the event:

“Giving that kind of mark of approval and honor to someone who has frankly spoken in ways I and many others have found personally very offensive, I thought that was a mistake for the president-elect to do.”

I particularly enjoyed the piece written by Christopher Hitchens for Slate on December 19.  I thought the televangelist lobby would have been run out of Washington in the wake of the 2008 elections.  Chris Hitchens appears to be sharing my disappointment over that group’s enduring presence on Capitol Hill, despite the efforts of many to preserve the separation of church and state.  The most impressive point made in this article concerned Warren’s insistence that there are no Jews allowed in heaven:

It is a fact that Rick Warren, pastor of the Saddleback Church in Orange County, Calif., was present at a meeting of the Aspen Institute not long ago and was asked by Lynda Resnick — she of the pomegranate-juice dynasty — if a Jew like herself could expect to be admitted to paradise.  Warren publicly told her no.

Similarly, Time magazine’s Joe Klein had this to say in his December 16 posting on his Swampland blog at Time.com, concerning Warren’s insistence that Jews can’t go to heaven:

I am not a big fan of Rick Warren’s.  He thinks I’m going to hell.  He said so in mixed company, at an Aspen Institute forum.  He was asked if Jews were going to hell.  He said yes.  He can go ahead and feed every poor child in Africa and I’m still going to think he’s a fool for believing that.  Reverend Rick is also not too big on gay or women’s rights.  (Indeed, if Jews–and all other non born-again Christians–homosexuals, feminists, and anyone who has either had an abortion, performed an abortion or reluctantly agrees that it’s none of our business who has abortions  …  if all those people are going to hell, then heaven’s got to be about as interesting as linoleum.)

Regardless of the controversies over Proposition 8 and same-sex marriage, is it really appropriate to have a man deliver the invocation at the Presidential inauguration ceremony, when that man professes that Jews are not allowed into heaven?  Does Warren believe that there is a big “No Jews Allowed” sign at the pearly gates?  Has heaven been getting away with something that American country clubs have not been able to do, since the 1970s?

There is obviously plenty wrong with having someone of Warren’s ilk speaking at the Presidential inauguration.  Gay weddings constitute just one of many issues these characters have on their list of things to not tolerate.  Chris Hitchens suggested three questions to be asked of the Obama transition team, before the inauguration proceeds:

— Will Warren be invited to the solemn ceremony of inauguration without being asked to repudiate what he has directly said to deny salvation to Jews?

— Will he be giving a national invocation without disowning what his mentor said about civil rights and what his leading supporter says about Mormons?

— Will the American people be prayed into the next administration, which will be confronted by a possible nuclear Iran and an already nuclear Pakistan, by a half-educated pulpit-pounder raised in the belief that the Armageddon solution is one to be anticipated with positive glee?

Remember John McCain’s old expression, “agents of intolerance”?  Who would have thought that one such agent would deliver the invocation when Barack Obama is sworn in as our next President?

The Biggest Challenge For Hillary

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December 1, 2008

The recent attacks in Mumbai, India focused international attention back to the continuing problem of organized terrorist activity.  As Hillary Clinton is presented to the world as our next Secretary of State, the more sensationalist elements of the media have their focus on terrorism.  Terrorism is highlighted to the exclusion of the other pressing matters to be faced during Secretary Clinton’s upcoming tenure, presiding over that all-important bureaucracy in the neighborhood known as “Foggy Bottom”.  Nevertheless, Secretary Clinton will have several other pressing issues on her agenda  — “leftovers” that have stumped the previous administration for the past eight years.  Among these abandoned, stinking socks on the floor of the Oval Office, the least fragrant involves the situation with Iran.  The Bush years took that bad situation and made it far worse.  A December 1 article in the Tehran Times focused on the remarks of Majlis Speaker, Ali Larijani, about what might lie ahead between the United States and Iran.  While suggesting that the Bush Administration “sabotaged” efforts to resolve the dispute over Iran’s nuclear program, the article mentioned Larijani’s criticisms of what was described as the Democrats’ Iran containment policy.

A report in the December 1 Los Angeles Times examined the expectations of Arabs and Israelis, with Hillary Clinton as Secretary of State.  Discussing various forecasts concerning American strategy towards Iran, the article noted:

Some analysts predict the Obama administration will try instead to broker an Israeli-Syrian accord, aimed at drawing Syria away from Iran’s influence and diminishing Iran as a threat to the Jewish state.

Elizabeth Bumiller’s article in the November 22 New York Times described the “working chemistry” that has developed between Barack Obama and Ms. Clinton.  This chemistry resulted in a softening of Clinton’s position, expressed during the primary season debates, about negotiating with Iran:

But although Mrs. Clinton criticized Mr. Obama for being willing to sit down and talk to dictators, he has said he would have a lower-level envoy do preparatory work for a meeting with Iran’s leaders first.  Mrs. Clinton has said she favors robust diplomacy with Iran and lower-level contacts as well.

In the November 24 Jerusalem Post, Douglas Bloomfield gave us a refreshing look at how the Obama – Clinton foreign policy team might function:

Hillary’s great challenge will be to remember who IS President, who ISN’T and who WAS.  She will have to focus on rebuilding relationships damaged during the Bush years of “my way or the highway” foreign policy, taking the lead from the man she once described as not ready to be president.

*  *  *

In the Middle East peace process, as in other policy areas, Obama seems intent on charting a pragmatic, centrist course.  While that will disappoint both the Jewish Right and Left, it could prove a welcome change after eight years of the Bush administration’s faith-based foreign policy and not-so-benign neglect of the peace process.

As Inauguration Day approaches, the Bush Administration’s legacy of complete incompetence in nearly all areas is being documented by countless writers around the world.  By invading Iraq, Bush-Cheney helped Iran realize its dreams of hegemony.  Bush’s mishandling of Iran’s rise as a nuclear power became the subject of a thought-provoking opinion piece by David Ignatius in the November 30 Washington Post.  Mr. Ignatius noted that Iran had neither enriched uranium nor the technology to enrich uranium (centrifuges) when Bush took power.  As Bush’s days in the White House wind down, we now see Iran with nearly 4,000 centrifuges and approximately 1,400 pounds of enriched uranium.  The 2006 precondition that Iran halt uranium enrichment before the United States would participate in diplomatic efforts to address this issue, exemplifies the handicapped mindset of the Bush-Cheney regime.  As Mr. Ignatius pointed out:

It’s impossible to say whether Iran’s march toward nuclear-weapons capability could have been stopped by diplomacy.  But there hasn’t yet been a good test.  Because of bitter infighting in the Bush administration, its diplomatic efforts were late in coming and, once launched, have been ineffective.

By the time we finally have a President and a Secretary of State who are capable of taking on the dicey task of negotiating with Iran on the nuclear issue, it may be too late.  Hillary Clinton’s biggest challenge in her new job has already been cut out for her by the Bush Administration’s nonfeasance.

Bob Barr Gets It Going

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July 24, 2008

Libertarian Party Presidential candidate, Bob Barr, turned some heads when the July 6 Zogby Poll had him capturing 6% of the nationwide popular vote.  Given the fact that Barr has received almost no national media attention, some commentators began to take notice of this interesting candidacy.   Of particular concern is Barr’s impact on the races in those “battleground” states that draw attention in polls.  Conservative blogger, Kevin Tracy, has complained that the poll results listed on RealClearPolitics.com, do not disclose Barr’s numbers.  As for the “battleground” states, Zogby has Barr with 8% of the vote in Colorado, 7% of the vote in Ohio, 7% of the vote in McCain’s home state of Arizona, and 6% of the vote in Florida.  A July 22 Rasmussen Poll had Barr getting 5% of the vote in Georgia, in contrast with the July 8 Zogby result of 8% for Georgia.  MSNBC’s polling expert, Chuck Todd, reported that the July 23 MSNBC/Wall Street Journal poll results showing Barr with only 2% have a much greater margin of error than the results for a two-way race because only a “half-sample” was used for the four-way race that included Barr and Ralph Nader.  He suspected that a full sample would likely indicate a larger number for Barr.

So far, Barr is on the ballot in 31 states.  He has a fight underway to get on the ballot in West Virginia.  In Ohio, Federal Judge Edmund Sargus, Jr. held that the Ohio state Legislature failed to revise ballot rules after they were struck down as unconstitutional in 2006 by the 6th U.S. Circuit Court of Appeals.  Ohio Secretary of State, Jennifer Brunner (a Democrat) is seeking an expedited appeal.  Of course, the court hearing her appeal will again be the 6th U.S. Circuit Court of Appeals, so a victory for Barr seems likely there, as well.

Barr has an interesting background that makes him well-suited for the Presidency at this time.  To start with, in 1966, he graduated from High School in Tehran, Iran.  In 1970 he received his Bachelor’s Degree, cum laude, from the University of Southern California.  He received a Master’s Degree in International Affairs from George Washington University in 1972.  He received his law degree from Georgetown in 1977.  During that time (1971 – 1978) Barr was employed by the Central Intelligence Agency.  Barr served in Congress as the Representative for Georgia’s 7th Congressional District from 1995 to 2003.  In Congress, he served as a senior member of the Judiciary Committee, as Vice-Chairman of the Government Reform Committee, as a member of the Committee on Financial Services and the Committee on Veteran’s Affairs.

Despite the lack of media attention, he is running a clever campaign.  On July 19, he made a surprise appearance at the Netroots Nation blogger conference, stealing a bit of attention from the “surprise” visit by Al Gore.  On July 22, while John McCain was visiting Manchester, New Hampshire, he drew a bit of attention away from McCain’s visit to that city by appearing there himself.  Mark Hayward of the New Hampshire Union Leader, reported on July 23 that Barr spent a good deal of time at a stop in Manchester, “explaining his disappointments with the way the war in Iraq and the Patriot Act turned out.”   Barr voted in favor of both the Patriot Act and the Joint Resolution for the Use of Military Force in Iraq.  Although Barr is not yet on the ballot in New Hampshire, the Zogby Poll has him at 10 percent in that state.

As the campaign progresses, it will be interesting to observe where Barr gets his support.  MSNBC’s Chuck Todd pointed out that there is a component of “anti-Obama” voters among Barr’s supporters.  Whether this comes from racism, belief in the “secret Muslim” rumors, or a perceived lack of experience, will make for an interesting study.  It would also be interesting to ascertain whether any Obama supporters shifted their allegiance to Barr as a result of Obama’s vote in favor of the FISA “wiretap” bill.  Polls taken in the wake of that vote (July 11 Newsweek and July 13 Rasmussen) showed Obama’s support among independent voters dropping significantly.  Did they see Obama’s compromise on this issue as a lack of authenticity?

For now, Barr’s candidacy is perceived primarily as a threat to John McCain.  As Faye Fiore reported in the July 23 Los Angeles Times:

Barr is regularly compared to Ralph Nader, the Green Party spoiler who drew crucial votes from Democrat Al Gore in 2000.  Worried McCain supporters have begged Barr to drop out. The renegade responds with his famous bespectacled glare, referring to himself in the third person, as is his habit:  “The GOP has no agenda, no platform and a candidate who generates no excitement.  That’s not Bob Barr’s fault.”

When confronted about being a McCain “spoiler” during the July 6 edition of CNN Newsroom, Barr responded:

This is precisely the problem with the two-party system that we have here. They are always looking for someone to blame, other than themselves.

.  .  .  This preemptive blaming doesn’t do either party very well.   It’s an awfully weak position for the McCain campaign and the Republicans to be in months out from the election, already blaming me for their loss.

It will be interesting to watch what the pollsters can learn from Barr’s candidacy.  As Barr gets more publicity, his popularity is likely to increase.  If he can make it to 10 percent in a nationwide poll, he will be invited to participate in some of the debates.  That would be very interesting.

Barack in Iraq

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July 21, 2008

At a fundraiser in Detroit on July 18, John McCain revealed that Barack Obama would be traveling to Iraq and Afghanistan on the weekend of the July 19-20.  For some reason, McCain saw fit to make this indiscrete comment:

I believe that either today or tomorrow, I am not privy to his schedule, Senator Obama will be landing in Iraq with some other Senators.  There will be a Congressional delegation – and I am sure that Senator Obama is going to arrive in Baghdad in a much, much, safer and secure environment than the one that he would have encountered before we started the siege.

Of course, McCain was more than willing to “back up” his claim that Iraq is now safer — with other people’s lives at stake on that bet.  Included in that delegation was McCain’s fellow Viet Nam War veteran, Senator Chuck Hagel.  Senator Hagel is also a Republican (for now) and a true bipartisan (unlike McCain’s traveling companion:  Joe “The Tool” Lieberman).

McCain knows damned well that his trips to Iraq, as well as those of his mentor, George W. Bush, were kept in secrecy until they were concluded.  Nevertheless, McCain chose to disclose the Obama – Hagel trip to Iraq, and risk the lives of his opponent and his fellow Viet Nam War veteran, to potentially fatal consequences.  Why he would have done this, crossed the minds of people other than you and me.  Needless to say, I was outraged by McCain’s security breach.  It reminded me of the similarly traitorous “outing” of Valerie Plame Wilson as a CIA Case Officer by the Bush Administration, to advance its case for the invasion of Iraq.

On July 18, Richard Wolffe of Newsweek appeared on MSNBC’s “Countdown with Keith Olbermann”.  During that interview, this exchange took place:

Olbermann:   About this Obama trip, two questions about the mechanics: 1) Why the secrecy about it? and 2) If there is a good reason for that secrecy, why would is Senator McCain try to give away the secret today in Michigan?

Wolffe:  The reason for the secrecy is security, of course, and we in the media have been very careful about what we are putting out there.  You know – security of these trips – and I went with President Bush to Iraq.  Security is tight for a reason.  So it is remarkable that a member of Congress would even speculate that way. Why he did that, I can’t really be sure, but obviously they’re trying to backtrack now.

I have a guess:  Perhaps McCain is just a “snitch” by nature.  Maybe it’s time to look into the rumors from his 2000 Presidential campaign, supporting the notion that McCain made it back from the Hanoi Hilton by “ratting out” his fellow Americans.  The fact that he tried to “rat-out” his fellow Viet Nam veteran, Chuck Hagel, on this trip to Iraq could lend some credence to those claims.  His motives for disclosing the details of this trip were apparently twofold:  Scare Obama, Hagel and the others from that delegation, so they would stay away from Iraq and Afghanistan.  A possible second motive might have been to make sure they would not live to brag about this adventure to Iraq, should they actually undertake it.

At an earlier news conference that morning, McCain claimed that:

He (Obama) would be going to a very different Iraq, if we had done what he wanted to do.

In other words, McRat claimed that Iraq would be much different now than it would have been if the United States had been following Obama’s plan for resolving that war.  In harsh contrast to that lie, we have the July 19 report from Jake Tapper of ABC News:

The White House this afternoon accidentally sent to its extensive distribution list a Reuters story headlined “Iraqi PM Backs Obama Troop Exit Plan – magazine.”

The story relayed how Iraqi Prime Minister Nuri al-Maliki told the German magazine Der Spiegel that he supported prospective U.S. Democratic presidential candidate Barack Obama’s proposal that U.S. troops should leave Iraq within 16 months … “U.S. Presidential candidate Barack Obama talks about 16 months. That, we think, would be the right timeframe for a withdrawal, with the possibility of slight changes,” the prime minister said.

The White House employee had intended to send the article to an internal distribution list, ABC News’ Martha Raddatz reports, but hit the wrong button.

The misfire comes at an odd time for Bush foreign policy, at a time when Obama’s campaign alleges the President is moving closer toward Obama’s recommendations about international relations — sending more U.S. troops to Afghanistan, discussing a “general time horizon” for U.S. troop withdrawal and launching talks with Iran.

Oops!  It looks as though the handlers for McRat’s own mentor are admitting that Iraq agrees to Obama’s plan for an exit strategy in Iraq and nobody told McRat.

Well …  Obama, Hagel and the network news anchors didn’t “chicken out”.  Beyond that, it looks like they will live to come back here and put McRat where he belongs:  caught in his own McTrap.