Tax Increases Coming Soon

I warned in March that Obama plans to raise taxes. Then in April, an ex-Clinton White House official said Obama would raise taxes, but not until after he’s re-elected. Now Roger Altman, Clinton’s deputy treasury secretary, has written that Obama will raise taxes as early as next year, “because it is no longer a matter of whether tax revenues must increase, but how”.

Yes, America

In his book The Black Swan, Nassim Nicholas Taleb writes (p. 204),

American culture encourages the process of failure, unlike the cultures of Europe and Asia where failure is met with stigma and embarrassment. America’s specialty is to take these small risks for the rest of the world, which explains this country’s disproportionate share in innovations. Once established, an idea or a product is later “perfected” over there.

America historically has meant crude doers, nouveau riche, not old money, not culture, not refined thinking and manners. But the people who rule America today seem much more about being smart, doing things right, not screwing up, something that as Jeffrey Bell noted in Populism and Elitism: Politics in the Age of Equality, never bothered Ronald Reagan, who would brush off bonehead mistakes, much to the distress of the elite figures around him.

Elites are about keeping others out as much as they are about keeping themselves in. Thus, the fear of failure, the fear of suddenly not belonging. Status, manners, credentials. Europe, not America.

The liberal elite belongs as part of America, but should they rule? One party thinks so. One party doesn’t.

Iran: What Went Wrong?

It’s now clear that Iran's election of 17 days ago isn’t producing the desired regime change, either via votes or street action. With some perspective, we ask again why did Les Gelb, a foreign policy insider who talks to everyone in the know, get it so wrong?

I already provided a reason, quoting Newsweek editor Evan Thomas’ saying, "I mean in a way Obama’s standing above the country, above – above the world, he’s sort of God." They thought “Obama god” could generate the right outcome in Iran, as they believed Obama did in the earlier June 7 Lebanon election, an election that followed Obama’s Cairo address to Muslims by 3 days. First Lebanon, then Iran.

I also think Obama and company got off on the wrong track during last year’s campaign, while defending Obama’s promise to meet “Iran’s leader” without preconditions during his first year in office. Obama’s pledge to meet Iran president Mahmoud Ahmadinejad proved a real problem because of Ahmadinejad’s raging anti-Semitism, his denial of the Holocaust, and his promise to wipe out Israel. So Obama’s people countered by advancing the argument that Ayatollah Sayyid Ali Khamenei [picture] is Iran’s supreme leader, and therefore Khamenei, not Ahmadinejad, would be Obama’s most appropriate interlocutor.

From there, Obama’s folks apparently reasoned that since Khamenei controlled Iran, and since Khamenei allowed a June election that featured Mir Hussein Mousavi openly campaigning against (Obama problem leader) Ahmadinejad, maybe Khamenei was orchestrating the very change that would ease Iran’s anti-U.S hostility: allowing Mousavi to replace Ahmadinejad.

It’s just that such wishful thinking is so remarkably removed from true understanding of how Iran works. Ahmadinejad is Khamenei’s man; he has been from the beginning.

Democrats the Party of Memories

The year's at the spring
And day's at the morn;
Morning's at seven;
The hill-side's dew-pearled
The lark's on the wing;
The snail's on the thorn;
God's in his Heaven -
All's right with the world!

--Robert Browning (1812-1889)
“Pippa Passes” (1841) pt. 1,l.221

Ralph Waldo Emerson (1803-1882) said every polity tends to have a party of memory and a party of hope. Democrats are the party of memory. They don’t think so, of course. But look. They believe the natural order of things is Democrats running the country, the way America was before Vietnam and 1965, the liberal America of Roosevelt, Truman, Kennedy, Johnson; of New Deal, Fair Deal, New Frontier, Great Society; of ending depression, minimum wage, fair labor laws, social security, the G.I. Bill, FHA-backed home ownership, Medicare, Medicaid, immigration reform, civil rights legislation, equal rights for women, minorities, gays, environmental protection.

Good government in charge, making life better for common people. “God in his Heaven, A Democrat in the White House, All’s right with the world!”

“All’s right” when the national elite holds power, our philosopher-kings, working through government controlled by Democrats, ruling on behalf of the common people.

At one time, Democrats were the party of hope, Republicans the party of memory. But Democrats held power most of the time from 1933 to 1981, 48 years, and reshaped America so that Washington replaced dozens of small cities as the elite’s cradle of power. “Inside the beltway” describes the culture that gained control during the Democratic years.

Because of Democratic errors, Republicans made their presence felt in Washington in the years following 1980. But they never dominated the city on the Potomac, only occasionally sending power back to the provinces. Nevertheless, particularly under Reagan in 1981-86 and George W. Bush in 2001-06, with working Republican majorities in Congress, it felt as though the country had passed beyond the natural order of things—America’s liberal elite in control.

The elite has fought back hard. As we have said before (here and here), quoting Cornell economist and author of Luxury Fever Robert Frank, "Animals will fight viciously to protect territory that they hold, but they won't fight nearly as hard to extend their territory." Democrats fought hard to build America into a big government nation, and they work even harder to retain their elite, government-based status. But isn’t it old fashioned to think a relatively small group of us knows better than do the people, a mass of individuals each with their own brains and skills, how best to make and spend the nation’s resources?

“Hope” means wanting more democracy, more capitalism, more individual decisionmaking (linked to the right to fail, learn, succeed) for everyone. Everyone living here, in the greatest experiment in individual power the world has ever known—America.

Democrats live on their memories of a time when their own good elite replaced a bad elite and ran everything. But the world never stands still, and it never goes back. Republicans must now be the party of hope for the rest of us, helping move America beyond elite rule to true democracy.

FOX Continues to Dominate Cable News

According to the Hollywood Reporter,

Fox News is on track to have its most-watched year ever, showing significant ratings growth despite having just come off a highflying election year. . . Fox News averaged about the same number of viewers as the top three other cable news networks combined [emphasis added]. And while rivals including CNN (-22%) and MSNBC (-18%) took hits following last quarter's inauguration-fueled boost, Fox News (-3%) remained nearly steady.

Ratings of cable news channels typically rise during election years only to fall the following year, so this year’s Fox News gains are particularly striking.

Fox News is also outpacing the other news channels among the key demographic, adults aged 25-54 (see chart). This counts as a big Fox victory; Headline News has reshaped itself to appeal primarily to younger viewers.


Fox News now trails only USA and TNT among all ad-supported cable channels. Bill Shine, senior vice president for programming at Fox News, in fact says that at their network, “we're paying attention to the non-news networks because now we want to catch them."

“On earth, God’s work must truly be Obama’s.”

So why does Les Gelb suddenly think our major foreign policy problem—Iran’s militant Islam—is going to straighten itself our via an election in that authoritarian state? Is it because Obama defeated in America those bigoted Republicans who stole the 2000 election and perverted our constitution? Because Barack Hussein Obama flew to Cairo and told Muslims we are their friends? Because Lebanon managed to elect a non-Hezbollah parliamentary majority? Is it because all these things are evidence of the phenomenon this blog is on to (here and here), that as Newsweek editor Evan Thomas said, "I mean in a way Obama’s standing above the country, above – above the world, he’s sort of God"?

Obama, as god, has the power to right the world? Even an election in Iran? Is that it?

Les Gelb’s Chimera: Iran as Ally

I think of Les Gelb, the former head of the Council on Foreign Relations, as a sober-minded individual. Therefore, I’m curious how he could have lost his bearings when looking ahead to Iran’s presidential election, held today. Gelb strangely wrote:

➢ [Iran] could be on a path to becoming America’s most important partner in the region.

➢ the electioneering has probably been the freest ever in that part of the world, and . . . [opposition candidate] Mir Hussein Mousavi talks like a man the White House could work with

➢ It is widely believed that the higher the turnout the more likely Ahmadinejad will lose.

➢ Mousavi. . . has become a pragmatic politician who . . . has called for greater freedoms and civil-rights protections[, whose] platform stresses Iran’s need to get sanctions lifted, to become part of the global economy, and to end its international isolation.

➢ This emerging Tehran and President Obama’s Washington are bound to find a common bond in fighting extremism both in Iran and among its volatile neighbors.

How do realists like Gelb let their hearts so openly control their heads? We all want Ahmadinejad to go away. Well, all of us outside Iran, that is. The Iranians who vote turned out in massive numbers. And as predicted by most who understand how that police state works, re-elected Ahmadinejad.

Bête Noire

Democrats won their last three election election victories by demonizing individual Republicans—Newt Gingrich (1998 mid-term) and George Bush (2006 mid-term, 2008). Earlier this year, they began the same tactic, going this time after Rush Limbaugh, when polls showed how unpopular Rush was with independents. But Limbaugh may not be such a good fit. He’s a commentator, not an elected Republican, and anyway Dick Cheney, Bush’s unpopular vice president, seems to have forced himself back into the public eye, much to Democrats’ delight. Re-demonize Cheney, or Bush-Cheney. Forget about Rush.

While that might help Democrats in 2010, a sign of trouble with the strategy emerges from a recent Gallup Poll [see chart]. Cheney’s not very popular, that’s true, getting only a 37% favorable rating from independents. But the real bête noire showing up in Gallup’s results is Democratic House Speaker Nancy Pelosi, who has only a 25% favorable rating from independents, and whose 52% negative rating among independents is even higher than Cheney’s. Pelosi holds the same office now that Gingrich occupied in 1998, going into that year’s mid-term loss for the GOP.

16 months out, Pelosi seems the bête noire Republicans have hoped for, someone who could help turn the tables on Democrats.

Welcome Back, Friedman

In the summer of 2006, the darkest days of American involvement in Iraq when Sunni and Shiite were at each other’s throats, Rumsfeld was still in the Pentagon, and Petraeus’ surge was hardly a glimmer in his own eye, Tom Friedman jumped ship, famously writing about our Iraq venture, “Whether for Bush reasons or Arab reasons, it is not happening, and we can’t throw more good lives after good lives.”

Well, that was then. Now with George Bush gone and friendly Democrats everywhere, Friedman finds it safe to say,

I have never bought the argument that Iraq was the bad war, Afghanistan the good war and Pakistan the necessary war. Folks, they’re all one war with different fronts. It’s a war within the Arab-Muslim world between progressive and anti-modernist forces over how this faith community is going to adapt to modernity — modern education, consensual politics, the balance between religion and state and the rights of women. Any decent outcome in Iraq would bolster all the progressive forces by creating an example of something that does not exist in the Middle East today — an independent, democratizing Arab-Muslim state.

“The reason there are no successful Arab democracies today is because there is no successful Arab democracy today,” said Stanford’s Larry Diamond, the author of The Spirit of Democracy. “When there is no model, it is hard for an idea to diffuse in a region.”

Hooray, Tom Friedman. Your heart was always with the liberation and democratization of Iraq, even if your head lost it for a bit.

Barack Hussein Globama

"[Obama] employed . . . the clever intermingling of his personal history and his office. He presented himself as a true global citizen; Barack Hussein Globama, living proof that apparent opposites can be united."

-- SPIEGEL ONLINE

Obama in Cairo: “time for [Israeli] settlements to stop”

David Ignatius and Charles Krauthammer are two Washington Post columnists. Both have a deep interest in the Middle East; both are qualified commentators. While they view the area from different perspectives, both yesterday fixed on a single, small part of Obama’s Cairo speech—his call for Israel to cease growing West Bank settlements. Ignatius wrote:

By traveling to the heart of the Arab world[, Obama] is raising expectations that America can coax Israel and the Arabs toward a comprehensive peace that has eluded them for more than 40 years. But can Obama deliver [on] Israeli settlements in the occupied West Bank[?]

And Krauthammer similarly noted:

Obama . . . came to Cairo to [issue] but one concrete declaration of new American policy: "The United States does not accept the legitimacy of continued Israeli settlements."

Ignatius backs up with facts his sympathy for Obama’s concern about settlements:

More than 120 settlements have been constructed over the past 42 years, and the Israeli population in the West Bank now totals 190,000 in the Jerusalem area and 289,000 elsewhere.

Yet Krauthammer has a point when in defense of Israel’s settlement policy, he tells us:

Arabs and Jews can stay in their homes if the 1949 armistice line [see map; hit to enlarge] is shifted slightly into the Palestinian side to capture the major close-in Jewish settlements, and then shifted into Israeli territory to capture Israeli land to give to the Palestinians.

According to Krauthammer, Israel has already agreed to such a land swap.

Comment: I believe Obama is correct to push Israel to stop expanding settlements, a first step moderate Arabs can follow with recognition of Israel, paving the way for a more coordinated Israel-U.S.-Arab response to Iran’s effort to acquire nuclear weapons (see here).

I, Obama

Terry Jeffrey, writing at the conservative “Townhall” website, disclosed that in announcing Monday the federal take-over of General Motors via bankruptcy, Barack Obama used the word “I” 34 times, the word “Congress” once, and failed to mention “law” even a single time. Obama: “I decided . . . that if GM and their stakeholders were willing to sacrifice for their companies' survival ... then the United States government would stand behind them." To stand behind GM, Obama stands above Congress; he stands above the law.

Obama is above us all as no previous president has been. He stood on the shoulders of his race and education to reach Illinois. He stood on Illinois to reach the Democratic Party, then on the shoulders of his party to reach all America. And now, speaking to 1.4 billion Muslims in Cairo, Obama stands on the shoulders of his country to reach the world.

Talking to Tom Friedman before his historic Cairo address, Obama said,

there is a Kabuki dance going on constantly [in the Middle East]. That is what I would like to see broken down. I am going to be holding up a mirror and saying: "Here is the situation, and the U.S. is prepared to work with all of you to deal with these problems. But [y]ou are all going to have to make some tough decisions." Leaders have to lead, and, hopefully, they will get supported by their people.

Comment: Roosevelt and Reagan effectively governed America by going over the heads of the opinion makers and talking by radio or TV directly to the people. Obama is the first U.S. president with the audacity to attempt going over the heads of Muslim national leaders to speak directly to their subjects.

If you go right into peoples’ living rooms, don’t be afraid to hold up a mirror to everything they are doing, but also engage them in a way that says "I know and respect who you are." . . . if we are engaged in speaking directly to the Arab street, and they are persuaded that we are operating in a straightforward manner, then. . . they and their leadership are more inclined and able to work with us.

Comment: Obama is saying to Muslim leaders, “I’m talking to the street. Listen to me, work with me, or I will help overthrow you!”

the president said that if he is asking German or French leaders to help more in Afghanistan or Pakistan, “it doesn’t hurt if I have credibility with the German and French people.”

Translation: “Are you reading me loud and clear? I’m leader of the world because I relate to the world’s people. Not just 1.4 billion Muslims. Watch out European leaders, because I reach Germans, French, and other non-Muslims too.”

America’s “battle against terrorist extremists involves changing the hearts and minds of the people they recruit from. And if there are a bunch of 22- and 25-year-old men and women in Cairo or in Lahore who listen to a speech by me . . . and say: ‘I don’t agree with everything [he is] saying, but [he seems] to know who I am [and wants] to promote economic development or tolerance or inclusiveness,’ then they are maybe a little less . . . tempted by a terrorist recruiter.”

Comment: Friedman believes Obama will succeed in reaching the 1.4 billion Muslims on the street (or whatever they are), because “when young Arabs and Muslims see an American president who looks like them, has a name like theirs, has Muslims in his family and comes into their world and speaks the truth, it will be empowering.”

Tiananmen 20 Years After

Tomorrow marks the 20th anniversary of the Tiananmen massacre. Who would have guessed the regime responsible for that slaughter would not only still be running China, but also would be more powerful than ever?

British historian Niall Ferguson has a look at Chinese power today. He’s writing not because of Tiananmen (Ferguson doesn’t mention it), but because his book The Ascent of Money: A Financial History of the World is out in paperback, and he wants you to read it. That Ferguson can publish a commentary devoted to China’s power two days before the massacre’s anniversary and leave it unmentioned heavily underlines how Tiananmen memories have faded, to the Communist regime’s benefit.

Ferguson wants us to understand how the current financial crisis, as with several in the past, is producing a tectonic power shift—this one with China supplanting the U.S. as the world’s leading economic power. His facts:

➢ the U.S. economy will contract by 2.8% this year—while China's is forecast to grow by 6%.

➢ The $787 billion U.S. stimulus package has had little impact, with housing prices falling around 20%, year over year. China's $585 billion stimulus is delivering far more, with April fixed investment surging by nearly 34%, net imports of iron ore up by a third, and oil imports rising almost 14%.

➢ In 2006, the U.S. had seven banks in the top 20, including the top two; today it has three, and the biggest, JP Morgan Chase, is 5th. In 2006, China did not have a single bank in the top 20, but today the top three are all Chinese.

Though Ferguson leaves Tiananmen unmentioned, he offers a reason why Chinese might be passive about the Tiananmen massacre, just as they are about China's current economic downturn:

China is imbued with a remarkable sense of patriotism that is not just a product of Communist Party propaganda. People are proud of their country's economic miracle over the past 30 years. After two wretched centuries, they believe China is on the way back. People whose grandparents survived the Great Leap Forward and whose parents endured the Cultural Revolution can surely cope with a decline in the growth rate from 11% to 6%.

China as #1.

Sotomayor’s Pandora Box

In a strange ironic twist, Obama nominated a Latina to further his well-honed mastery of special interest politics, and the nomination is coming back to bite him because it is so blatantly racial, even though Sotomayor is highly qualified and will be confirmed.

People, not just white males, are fed up with identity politics.

Here’s more. This from conservative commentator Victor Davis Hanson:

the perpetuators of the present system--mostly elite whites--find some sort of psychological absolution in . . . a system that allows them to alleviate guilt without living among poorer people of color, or sending their own children to the "diverse" public schools--two concrete steps that might quickly indeed ensure better neighborhoods and better education for the "other." In any case, most white elites count on their own connections, wealth, and education, to find exemptions from the unfairness of racial identification. A Ted Kennedy, after all, had affirmative action well before it was based on race.

Unfortunately. . . President Obama has embraced identity politics in unprecedented fashion--and we are reaping what he has sown. In these first days of the Sotomayor nomination, we are not discussing Justice Sotomayor's judicial competence as much as her Latina identification--and the political ramifications of such tribalism.