Analytics

Friday, October 31, 2008

Maryland Question 2: Slots for Education? No!

Maryland Governor O'Malley has gotten the support of the Maryland Chamber of Commerce to support question 2 in favor of Maryland-based slot machines, the net profits which are supposed to be targeted for education funding. The sales pitch is: Maryland taxpayers are visiting neighboring states with slot machines and essentially funding those state coffers. We need to in-source that revenue for Maryland purposes--or else face a tax increase.

There is the typical liberal false choice:  We accept new spending and program increases itself as given; any cuts are portrayed as cutting into essential services (e.g., policemen on the street, teachers in the classroom, etc.) vs., say, deferring new services, streamlining government, business reprocessing, pay and hiring freezes, layoffs, early retirements, etc., any of the typical types of things that might happen equivalently in the private sector. So, in order to meet the given new state expenditure target, we need to get additional revenues. We can get there by some combination of tax increases or look for an alternative--like slots. Furthermore, we can dress it up by creating a lockbox for public education. (I guess Mom, apple pie and Chevrolet were taken.) Money (state revenue) is fungible. Nobody pretends that public education will be cut if slots don't carry. It's just a way of sugar-coating slots to make the method of revenue raising more socially acceptable.

In 2006 the state of Maryland voted out a popular Republican governor, Bob Ehrlich, with over a 50% approval rating, in favor of wunderkind Baltimore Mayor Martin O'Malley. As usual, Democrats with no checks and balances overreached, and O'Malley had had to call a special session where taxes were raised by $1.4B, and O'Malley's ratings went into the 30's (now in the 40's), even below President Bush's for a while. What's particularly intriguing is the fact that O'Malley opposed slots--before he became governor.

I do not like the idea of a sin tax being used to fund a general priority, like education. (I'm sure that I would not be popular in Nevada for saying this.) It's the same issue I have with sin taxes in general, e.g., cigarettes, alcohol, etc. The tax revenue generated by slots (gambling, an addictive behavior) is borne by a disproportionate number of lower/middle-income people, and tax revenue in this regard is maximized by encouraging addictive behavior. And there is no doubt that widespread deployment of slots through Maryland will exasperate addictive behavior by making it more convenient.

O'Malley has suggested that the GOP and Bob Ehrlich, whom opposes the slots initiative, are being hypocritical given the fact that Ehrlich was known for proposing a more market-based implementation of slots. Other anti-slots arguments include over-optimistic revenue projections and misleading language.

Maryland's Democratic governor and legislature should not resort to gimmicks in order to deflect responsibility for their irresponsible tax-and-spending behavior. I will vote against question 2.

Tuesday, October 28, 2008

McCain: Themes for the Campaign Final Week


Happy Warrior and Straight Talker: Why I Want To Be President

I would like to hear more from John McCain talking about his family's legacy in defense of our country and the core values (integrity, duty, honor, courage). Explain what we need in troubled times is a steady, experienced hand. Over the past 8 years, we've seen the federal and trade deficit growing due to a lack of spending control and misguided political and legal stonewalling of domestic energy exploration and production. These problems are not going to be resolved by a uncontrolled Democratic Congress, which has never balanced a budget in the past 40 years and which is responsible for choking domestic energy exploration, not to mention putting in an inexperienced Democratic President whom has never taken a politically tough decision on any major legislation, whom votes in lockstep with his partisan majority position and whom has the most liberal voting record in the US Senate. 

We have a clear choice: we have one candidate whom wants to stay the course on one of the top two highest corporate income tax brackets in the world, wants to punish the most successful job creators with punitive job and investment tax increases and wants to reward those whom pay little or no federal taxes by picking up the tab for some additional household expenses.  The same candidate whom would gut military modernization efforts, had the "judgment" to oppose the surge effort in Iraq, even after it resulted in sharp drops of violence and has all but ignored the military leaders responsible for the surge, while continuing to call for a "new mission" of unconditional retreat from Iraq and voting against our current operations there. The Democratic candidate has expressed more interest in meeting the leaders of rogue nations (e.g., Ahmadinejad, Castro, Chavez) at the Presidential level than in meeting General Petraeus! A candidate whom will create a litmus test for judicial candidates on unenumerated "rights" in the Constitution, such as "privacy" (used to justify unrestricted abortion) and no doubt sympathetic to the recognition of "positive" rights  (i.e., economic and/or social justice). A "bait-and-switch" candidate whom makes tax promises that he knows he can't keep, his "new math" of promising around $800B of new spending on a "pay-as-you-go" basis, without telling the American people where that $800B is coming from. The candidate who blames the current financial crisis on "deregulation", although he opposed reform of Fannie Mae and Freddie Mac which because of special privileges as a GSE exposed the federal government to about half the US mortgage market. A candidate, like Herbert Hoover, also looked to boost higher tax brackets in a recessionary time and made the situation even worse.

Or we have the real choice--a reformer who has a proven record of significant bipartisan action over the past 8 years, who has a track record of opposing and not requesting his own earmarks, whom has opposed expansions in entitlement spending (e.g., Medicare drug coverage) without proper funding, who has opposed spending in excess of federal revenues, whose expertise in foreign policy and the memory has the endorsements of 5 former Secretaries of State and over 100 retired generals and admirals. A straight talker whom doesn't try to be all things to all people.

We should not confuse the appearance of steadiness and composure under the TV lights in a 90-minute so-called Presidential debate or oratorical eloquence on the campaign trail as indicative of Presidential performance. We know the stuff John McCain is made of--someone whom refused an early release from a Vietnamese POW camp, because others before him would not be released first; someone whom fought for unpopular immigration reform and a surge policy which almost cost him his last shot at the Republican nomination, a price he said that he was willing to pay to do the right thing. Someone who opposed the President on allowing unconstrained government growth in spending and a huge increase to the national debt, inaction on climate change, virtually no change in manpower and strategy in over 3 years after the liberation of Iraq, no overhaul of obsoleted financial regulatory agencies, nothing to counter an out-of-control foreign trade deficit, including $500B to China, certain overstepping of the White House (signing statements of ignoring parts of signed bills, executive privilege, etc.), torture policy, etc., and who will bring a different approach, a no analysis-paralysis one to the White House.

The American voter has the opportunity to hire someone more prescient than either Bush or Obama on post-liberation Iraq and whom got it right the first time out regarding the Russian invasion of Georgia. Someone whom doesn't go around threatening our NAFTA trading partners and whom won't stonewall free-trade pacts with South Korea, Colombia and other allies which would open their markets to more American goods and services. Someone, unlike Obama, whom doesn't cause controversies with traditional allies Pakistan and Israel and/or Palestinians with ill-considered statements. 

Obama: Trying To Buy the Presidency

The Obama campaign announced last month they raised about $150M vs. McCain's roughly $85M publicly financed amount for the entire general campaign. The fact is that Obama made an early commitment to agree to public financing, which meant Obama would have received the same amount as McCain. Given McCain's reformist credentials, it would have been seen as somewhat hypocritical for him to backtrack off his trademark campaign finance reform.

That was before, of course, Obama turned out to be prodigious fundraiser. There is no doubt that Obama would have outraised McCain in a head-to-head, but what Obama did in backtracking his public promise (he also promised a number of joint townhalls on which he also reneged) is a question of integrity and also an internal consistency with his own pretension of being in favor of reform (in extension to Senate ethics and lobbyist reform). Using funding advantages to burn McCain in battleground states by up to 8-to-1 with negative, often deliberately misleading ads violates a sense of fair play (although Romney heavily outspent McCain in the early part of the Republican primary season which turned out to be mostly unsuccessful). 

Obama has sought to rationalize his campaign on the grounds it was chiefly a large number of small amounts, the point being any such contribution is immaterial to impact a candidate's judgment on relevant issues. Scott Johnson, in the 10/27/08 New York Post, notes that $200M of the $600M the Obama campaign has raised comes in the amounts ( < $200) where disclosure of the contributor's identify is not required by the FEC , and the Obama campaign, unlike the McCain campaign, does not use a standard Address Verification System for credit card donations. In fact, one test against the Obama system successfully entered contributions from the same address under the names of Osama bin Laden, Saddam Hussein, and Bill Ayers, also one from John Gait (from Ayn Rand's Atlas Shrugged) from 1957 [year Atlas Shruggedwas published] Ayn Rand Lane, Gaits Gulch, CO 99999, addresses such as "12345 No Way", and names like Della Ware, Joe Plumber, Idiot Savant, Ima BadDonation  and Fake Donor. There are also concerns about illegal foreign contributions. [The Obama campaign claims it validates AFTER the fact of donation (which is sort of like Bill Clinton only confessing to the Lewinsky affair after the blue dress surfaced), but there's only one logical reason it hasn't been using a standard AVS system at the time of donation.]

I think one casualty of this election will be McCain-Feingold campaign reform. Essentially Obama's superior money has been used to saturate a number of red (GOP) and battleground states with anti-McCain ads, basically forcing McCain to withdraw from blue states that appeared to be viable in early September (e.g., Michigan, Wisconsin, and Oregon). McCain is now finding himself playing defense against several incursions into territory Bush held in 2004. I think the fact that any Republican is within 5 points (in some polls) of Obama given a hugely unpopular lame duck GOP President, probably the biggest financial tsunami since the Great Depression, and Obama's unprecedented ground operation and campaign donation system is extraordinary.

Supreme Court and Obama's Redistributive Agenda

On July 17, 2007, Barack Obama gave this puzzling job description for picking judges, "We need somebody who's got the heart, the empathy, to recognize what it's like to be a young teenage mom. The empathy to understand what it's like to be poor, or African-American, or gay, or disabled, or old. And that's the criteria by which I'm going to be selecting my judges." As usual, Obama is not engaging in straight talk; what exactly does that mean? Why isn't he talking judicial philosophies, e.g., stare decisis, "living Constitution", judicial restraint? Why isn't he talking process vs. outcomes? The answer is implicit but obvious: Barack Obama is in favor of judicial activism and the so-called "living Constitution", of the kind that fabricated a right of a pregnant woman to abort in Roe v Wade

In essence, what he's really referring to are positive rights, something I discuss at some length in my "American Conservatism and the 2008 Election" post.  The basic idea is that citizens, because of certain personal characteristics and/or economic circumstances, lack the resources they need to fully pursue happiness in a free society; hence, government should, among other things, provide a social welfare net, establish a so-called "living wage",  provide for free or guaranteed education, and ensure a reasonable standard of living for the old and disabled. This becomes clear in a recently surfaced 2001 radio interview with Obama: "[G]enerally the Constitution is a charter of negative liberties: [It] says what the states can’t do to you, says what the federal government can’t do to you, but it doesn’t say what the federal government or the state government must do on your behalf." [Obama, there was a Democratic President in 1961 whom said, "Ask not what your country can do for you; ask what what you do for your country." Jack Kennedy in 1962 added some pro-investment tax breaks for business in 1962 and proposed reductions in the corporate tax cut and cut individual tax bracket rates, INCLUDING THE HIGHEST, in 1964. The deficit fell while federal revenues increased.]

The United States is founded on certain unalienable rights: life, liberty, and the pursuit of happiness. (The "pursuit of happiness" is abstract, but generally speaking, it includes the right to pursue a lawful livelihood and enjoy the fruits of one's labor, including the acquisition or transfer of property.) However, we have the supremacy of law, and the Fifth and Fourteenth Amendments require due process in any deprivation of life, liberty, and property.

Obama, as I mentioned in an earlier post, mentions that the CEO-lowest/average-wage worker compensation gap. Obama sees this as a zero-sum game where lower-earning workers are cut out of a fair income at the expense of overpaid CEO's. This is just a matter of his incompetence on basic economics.  In 2005, the minimum salary of a major league baseball player was $316K and the average was $2.6M.  That means the average ballplayer on the bench made more than Barack Obama as US Senator.  [Some might say that's justifiable because the average bench player had a more productive year than Barack Obama in the Senate.] But basically baseball attracts large crowds and lucrative TV contracts, and that results in healthy compensation. The point is, comparing the pay of politicians and baseball players is rather pointless; they operate in different markets. You can make the same argument about CEO's versus the "typical worker" in a company. A 2004 Hay survey found that American CEO's made about 63% more than their European counterparts. Whereas that's a significant difference, it seems to suggest that CEO pay has to do more with a competitive market for high-level, talented executives than "exploiting" workers. It makes no sense, in a competitive labor market, for a company to pay key employees, including rank-and-file workers, less than their competitors. Ben and Jerry's discovered they weren't able to hire a decent CEO to replace the founders under the existing artificial compensation multiplier cap.

Barack Obama is very clear: "[T]he Supreme Court never entered into the issues of redistribution of wealth, and sort of  more basic issues of political and economic justice in this society." It's very clear that he's sympathetic to that point of view: "I..can craft theoretical justifications for it, legally...come up with a rationale for bringing about economic change through the courts." But ultimately redistributive change must be carried through the Executive Branch of the government: "You know, I’m not optimistic about bringing about major redistributive change through the courts. The institution just isn’t structured that way...monitoring or engaging in a process that essentially is administrative and takes a lot of time."

All this is anathema to conservatives and most Americans. Basically Obama is prescribing a radically social liberalism agenda which constitutes an expanded footprint of government, not the limited government envisioned by the Founding Fathers. Obviously there is some due process of property in terms of things like investment and estate taxes. But arguing that the rich grow at the expense of the poor is deceptive. WalMart, for instance, built a business by being an aggressive discounter of goods, using its volume buying to negotiate lower prices with suppliers. It creates wealth through sales volume. 

Just a side note: Obama mocked McCain's criticism of his radical social liberalism, saying soon McCain will find out that Obama gave half of his own peanut butter sandwich to another kid in fourth grade and call the action redistributionist. Listen, Obama: what you described is charity, and McCain is for charity. What McCain is arguing is your confiscating half a sandwich that doesn't belong to you but somebody else and giving it to some kid whom didn't bring a sandwich to lunch because the latter didn't take advantage of the opportunity to make himself one before coming to school. (Maybe if he goes hungry one day, tomorrow he'll set his alarm clock earlier and make and bring lunch with him.)

Health Care: Our Approach for Tax Fairness and More Competition

John McCain's plan empowers taxpayers to buy plans they want--say, for example, high-deductible, lower-premium coverages (where insurance plays its true role against large losses and hence promotes individual cost-saving behavior for out-of-pocket health care expenses) or health plans without expensive add-ons or mandates (e.g., no-wait coverage) across state lines. In addition, his approach, unlike Obama, extends health care tax subsidies to all Americans, not just those working for companies currently sponsoring it and it does not threaten job-creating businesses which do not currently offer such benefits with tax penalties. I am simply mystified that McCain has seemingly cut no campaign commercials to counterbalance Obama's materially misleading ads which imply that employees under employer-sponsored plans will be worse off, tax-wise.

Obama: Say It Ain't So, Joe!

Barack Obama is beside himself these days! If it isn't Joe the Plumber, it's Joe the Running Mate...

First-Year International Crisis?

Joe Biden recently mentioned at a Democratic fundraiser, "Mark my words. It will not be six months before the world tests Barack Obama like they did John Kennedy...Remember I said it standing here if you don’t remember anything else I said. Watch, we’re gonna have an international crisis, a generated crisis, to test the mettle of this guy." 

Gee, Joe, you don't think? Is it that the last Democratic President, also with no military or foreign policy experience, had no military response to the 1993 World Trade Tower bombing, 1996 Khobar bombing, the multiple US African embassy attacks and the attack on the USS Cole, and did not take out Osama bin Laden when he had the chance? Is it because the current President, also without active military or foreign policy experience, also faced his first test of 9/11, less than 8 months on the job? Can it be because Barack Obama, in the Youtube debate, has already put the prestige of a Presidential meeting on the table, over and beyond lower-level diplomatic efforts, without preconditions, in dealing with rogue leaders like Ahmadinejad, Chavez, and Castro? Could it be because Barack Obama suggested unconditional withdrawal of troops from Iraq, when Iraq was less stable? Is it because the only budget Obama has vowed to cut is the Defense Budget and in particular missile defense systems, space weaponization, modernized nuclear weapons, and to slow development of future combat systems? 

Stealth Creep in Tax Increase Brackets

Barack Obama has widely publicized a tax cut for everyone making under "rich people" defined as $250,000/year. Then the caption to a recent Obama ad says: "Famlies making less than $200,000 get tax cut." And then Joe Biden said this in a recent Pennsylvania TV interview : "What we’re saying is that $87 billion tax break doesn’t need to go to people making an average of 1.4 million, it should go like it used to. It should go to middle class people — people making under $150,000 a year." Gentleman, the next income level on your tax hike bidding goes to $100,000... 

I have it on good authority Fr. Michael Pfleger did NOT say the following:

"When Barack Obama was speaking, and people were saying those were 'just words', I really don't believe those were 'just words'. I really believe that he just always thought this election is mine. We are the ones we've been waiting for...Hey, I'm Barack Obama. And this is mine. I just got to get up and step into the plate and then out of nowhere came Joe Biden. And I said, 'Oh, damn, Joe, what's that you are now talking about? Crisis? $150,000 for more taxes?' I'm The One. I'm entitled. There's a 35-year Senator Running Mate stealing my show...

"Haven't you learned anything from Bill Clinton? He campaigned on a middle-class tax cut before the election and then called for a tax hike AFTER the votes were tallied."

Sunday, October 26, 2008

Palin, Brian Williams and Obama's Connections

Part of my frustration with Sarah Palin is represented by the following excerpt from an October 23 interview NBC-TV news anchor Brian Williams with both McCain and Palin:
WILLIAMS: Are we changing--it's been said that to gives it a vaguely post-9/11 hint, using that word that we don't normally associate with domestic crimes. Are we changing the definition? Are the people who set fire to American cities during the '60s terrorists in--under this definition? Is an abortion clinic bomber a terrorist under this definition, Governor?

Gov. PALIN: There's no question that Bill Ayers, via his own admittance, was one who sought to destroy our US capital and our Pentagon. That is a domestic terrorist. There's no question there. Now, others who would want to engage in harming innocent Americans or facilities that it would be unacceptable to--I don't know if you're going to use the word terrorist there, but it's unacceptable, and it would not be condoned, of course, on our watch. But I don't know--if what you're asking is if I regret referring to Bill Ayers as an unrepentant domestic terrorist, I don't regret characterizing him as that.

WILLIAMS: No, I'm just asking what other categories you would put in there, abortion clinic bombers, protesters in cities where fires were started, Molotov cocktails were thrown, people died?

Gov. PALIN: I would put in that category of Bill Ayers anyone else who would seek to campaign, to destroy our United States capital and our Pentagon and would seek to destroy innocent Americans.
There are a few things going on here. First, Brian Williams is intentionally trying to link the McCain/Palin pro-life position with abortion clinic bombers, which is an implicit attempt to suggest that Obama is no worse for having an Ayers link with domestic terrorism. Neither Palin nor McCain seem to pick up on Williams' partisan smear; it is true that pro-life people are morally repulsed by facilities that exist for the purpose of killing innocent unborn babies, but almost all subscribe to principles and methods consistent with Martin Luther King's philosophy of nonviolent resistance. One might wonder if Williams in the 1960's would have tried to link King to race riots over the issue of racial justice.

Second, Brian Williams is posing a gotcha question, trying to get Palin to define a terrorist. Palin is implicitly admitting a variation of Justice Porter Stewart's dictum regarding pornography: "I can't define it but I know what it is when I see it." In my opinion, Palin has an irritating habit of rambling, over-explanatory, repetitive sound bite responses. Let me say here, I would have answered the question directly, which, once again, Sarah Palin doesn't do, but I would have used it as a segue to discussing Barack Obama's conceptual ambiguity between criminal and terrorist activity and relevant individual rights and Obama's political opportunism in terms of FISA legislation.

I would have responded that we characterize terrorist threats or actions as premeditated and violent in nature, linked to some political cause or purpose and intended for a specific effect, such as fear or concessions (e.g., US withdrawal from the Middle East). Riots are often sparked by external events, unfocused and temporal.  Animal rights terrorists may fire-bomb science lab facilities. Ecoterrorists have been known to booby trap forest harvesting activities. And, yes, radicalized abortion opponents may blow up clinics or target abortionists with the intent of stopping abortions. In our democratic republic, we need to enact change through our political system, not act outside the law, and related criminal acts should be prosecuted to the full extent of the law.

Third, Palin is not making the correct point about Ayers and Obama's other dubious links (e.g., Jeremiah Wright, Fr. Pfleger, and Tony Rezko). Obama is disingenuously misrepresenting himself and low-keying politically inconvenient relationships, just as he has knowingly lied and changed his story several times with regards to his involvement with the Born Alive Infant Protection Act in Illinois (I've critiqued his position in past posts following the third debate).

What Palin should have stressed is that the question of Obama's relationships is not a Republican invention but were first addressed by the Chicago media and in fact during the Democratic primaries. There are highly salient points for voters. 

First, a President makes a number of appointments. What kind of judgment has he exhibited in his personal or professional life in terms of the people he's worked with? If you were an aspiring politician, the last thing you would want to do is associate with the wrong type of people. 

Second, we expect that one would tend to associate with people with whom you share common values. For example, Obama claims to have known Rev. Jeremiah Wright for 20 years; Obama preaches a racial and post-partisan philosophy clearly at odds with Wright's anti-Americanism and racially divisive rhetoric. Yet Wright married Barack and Michelle, baptized their daughters, etc. Obama claimed he could no more renounce Rev. Wright than his own maternal grandmother whom raised him; yet just as soon as Wright suggested that Obama was acting like any other politician, saying whatever it took to get elected, Obama threw him under the bus and eventually resigned from the church in question. 

The whole issue of Rev. Jeremiah Wright yielded interesting but troubling insights to Obama's judgment; Obama stood behind Wright, even after the "God damn America" clip was constantly replayed. What he could and should have said from day one is, "I was not aware of Rev. Wright's sermon. This is fundamentally at odds with my views and values, and my family is no longer affiliated with Trinity United Church of Christ."  What does Obama's constant refusal to deal with Wright, long after it was obvious to everyone that he was a liability, say about Obama's character? Some (including myself) would say that he was unwilling to admit he was wrong about Wright, that he believed that people were taking a sound bite out of context. Others would argue Obama's admirable loyalty to a friend of some 20 years, but then the way Obama threw Wright under the bus the day after Wright publicly criticized him makes it clear that Obama did not reject Wright for saying "God damn America" but because of the public criticism of Obama, which suggests that Obama is extremely thin-skinned. Note to Obama: If you think Wright's saying you are acting just like any other politician is an unpardonable sin, you haven't spent a day in George Bush's shoes. 

Third, we learn a lot of a politician's character by how he handles controversies. Does he respond, in the distinctive mode of John McCain's directness, his legendary "Straight Talk",  for example, taking full responsibility for the failure of his first marriage, not using his Vietnam experience serve as an excuse? Does he get it out or simply react as new facts surface and shift his story? 

Obama's Connections to Ayers and Wright

In the case of Ayers, we're supposed to believe that Barack Obama, a trained lawyer, does not know of the man whom, ironically, is quoted on 9/11 in a New York Times column by Dinitia Smith: 
''I don't regret setting bombs,'' Bill Ayers said. ''I feel we didn't do enough.''...He still has tattooed on his neck the rainbow-and-lightning Weathermen logo that appeared on letters taking responsibility for bombings...Now he has written a book, ''Fugitive Days'' (Beacon Press)...He writes that he participated in the bombings of New York City Police Headquarters in 1970, of the Capitol building in 1971, the Pentagon in 1972...So, would Mr. Ayers do it all again, he is asked? ''I don't want to discount the possibility,'' he said.
But now let us consider Obama’s short review of  Bill Ayers' A Kind and Just Parent: The Children of Juvenile Court (Beacon Press, 1997) from the Chicago Tribune (12/21/97) regarding current books Chicago notables were reading: “A searing and timely account of the juvenile court system, and the courageous individuals who rescue hope from despair.”

In the 11/6/97 issue of the The University of Chicago Chronicle, Jennifer Vanasco writes, "Ayers, who spent a year observing the Cook County Temporary Juvenile Detention Center in Chicago, ...one of four panelists who will speak on juvenile justice at 6 p.m. Thursday, Nov. 20...will be joined by Sen. Barack Obama, Senior Lecturer in the Law School, who is working to combat legislation that would put more juvenile offenders into the adult system."

We really see an integration among Obama, Ayers, Wright, and ACORN. In the 12/8/95 Chicago Reader article "What Makes Obama Run?", Hank De Zutter notes Barack Obama's frustration with the piecemeal community services, food pantries and the like from the black churches and talks the language of collective economic power and a political agenda. Here are the words of The Post-Partisan One:
"The right wing, the Christian right, has done a good job of building these organizations of accountability, much better than the left or progressive forces have. But it's always easier to organize around intolerance, narrow-mindedness, and false nostalgia. And they also have hijacked the higher moral ground with this language of family values and moral responsibility....We must deal with the forces that are depressing wages, lopping off people's benefits right and left, and creating an earnings gap between CEOs and the lowest-paid worker that has risen in the last 20 years from a ratio of 10 to 1 to one of better than 100 to 1....These are mean, cruel times, exemplified by a 'lock 'em up, take no prisoners' mentality that dominates the Republican-led Congress."

Consider the Bill Ayers/Bernardine Dohrn book Race Course Against White Supremacy, conveniently scheduled for release after the election; the following product description is from amazon.com:
"White supremacy and its troubling endurance in American life is debated in these personal essays by two veteran political activists. Arguing that white supremacy has been the dominant political system in the United States since its earliest days—and that it is still very much with us—the discussion points to unexamined bigotry in the criminal justice system, election processes, war policy, and education. The book draws upon the authors' own confrontations with authorities during the Vietnam era, reasserts their belief that racism and war are interwoven issues, and offers personal stories about their lives today as parents, teachers, and reformers."
Now what about the nearly $150M Barack Obama helped disburse for the Chicago Annenberg Challenge? Stanley Kurtz from National Review Online has done a good job piecing together some of these connections in a post called "Wright 101":
Jeremiah Wright turned toward African-centered thinking in the late 1980s and early 1990s (the period when, attracted by Wright’s African themes, Barack Obama first became a church member)...The fact that Obama funded extremist Afrocentrists who shared Wright’s anti-Americanism means that this is now a matter of public policy, and therefore an entirely legitimate issue in this campaign...we have evidence that in 1995, the same year Obama assumed control of the Chicago Annenberg Challenge, he publicly rejected “the unrealistic politics of integrationist assimilation”... Obama and his very small and divided board kept the money flowing to ideologically extremist groups like the South Shore African Village Collaborative, instead of organizations focused on traditional educational achievement....The Chicago Annenberg Challenge’s own evaluators acknowledged that Annenberg-aided schools showed no improvement in achievement scores. Evaluators attributed that failure, in part, to the fact that many of Annenberg’s “external partners” had little educational expertise. 
What was the SSAVC?
In the winter of 1996, the Coalition for Improved Education in [Chicago’s] South Shore (CIESS) announced that it had received a $200,000 grant from the Chicago Annenberg Challenge. That made CIESS an “external partner,” i.e. a community organization linked to a network of schools within the Chicago public system. This network, named the “South Shore African Village Collaborative” was thoroughly “Afrocentric” in orientation. 

In [a 1992 article in the] Journal of Negro Education, Nsenga Warfield-Coppock... bemoans the fact that public education in the United States is shaped by “capitalism, competitiveness, racism, sexism and oppression.” According to Warfield-Coppock, these American values “have confused African American people and oriented them toward American definitions of achievement and success and away from traditional African values...The answer...is to provide African American youth with the cultural information and values they would need to counter the potentially detrimental effects of a Eurocentrically oriented society." Relevant programs serve “a social and cultural ‘inoculation’ process that facilitates healthy, African-centered development among African American youth and protects them against the ravages of a racist, sexist, capitalist, and oppressive society.”
Kurtz identifies a number of key Afrocentric leaders whom not only conducted teacher training lectures on related topics but had connections to Wright's Trinity Church as well.

On the earlier cited reference to the small but divided board, there is reference to a member whom remarked on the almost amateurish grant proposals submitted, unprecedented in decades of reviewing grants. The fact that Obama, leading a small group, couldn't reconcile differences by rejecting proposals not meeting professional standards, doesn't bode well for someone overseeing trillions of dollars in the US economy, never mind dealing with a Congress with its own priorities.

Reprising Analysis of Obama's Associates

Sarah Palin does get across the point Ayers is an unrepentant terrorist; this is a correct response to Barack Obama's lip service to dismissing something Ayers was involved with that occurred in the early 1970's. It's fairly clear there were multiple verified occasions of Ayers and Obama meeting (juvenile criminal defense, the Chicago Annenberg Challenge, Ayers doing  fundraisers for Obama, etc.)  I do not believe for a second that Obama never knew about Bill Ayers' past given all their joint interests; first of all, Bill Ayers is quite open about his radical past, writing a memoir and several other books and posting to a blog. The idea that Barack Obama found a book written by Ayers praiseworthy but expressed no interest in Ayers' other writings or personal background seems dubious.

At the same time, I do not doubt that Obama rejects the use of violence; he has repeatedly talked about the emotional rhetoric in black churches dissipating, of existing community services, food pantries, etc., as barely scratching the surface and not transformative of the urban status quo. He thinks it's because of the reliance on individual vs. collectivist initiative. That's why we hear Obama's somewhat misleading rhetoric about coming together; he's not really talking about national consensus. He's already make it clear what he thinks of Republicans; he thinks he speaks for the "have not's" whom are numerous comparable to the select few whom have higher incomes and wealth. He sees everything as a zero-sum game. That's why he talks about "spreading the wealth around". It's why he's so confused about bitter Pennsylvanians clinging to their Bibles and their guns and voting against their self-interest--after all, didn't he co-opt them by agreeing to the same tax brackets for lower/middle-income Americans?

That being said, I think that Palin misses a key point on Ayers and Obama: Obama has been paying lip service to need for improved math and science, charter schools and merit pay: but what you see in the CAC shows money being spent on external groups and teacher training on cultural ideology. Barack Obama has already admitted he wasn't that effective as a community organizer; we also know he wasn't a very good philanthropist, receiving no benefit in achievement scores despite the disbursement of millions--never mind major goals like increased graduation rates.

Rev. Jeremiah Wright's influence on Barack Obama is beyond question. The title of Obama's best-selling second autobiography, The Audacity of Hope, comes from Wright's sermons; the ubiquitous Obama mantra "Yes We Can" also was due to Wright.  What we know is prominent talk show host and early Obama supporter Oprah Winfrey initially joined Trinity Church in 1984  and abruptly left the church several years ago , with no stomach for Wright's inflammatory rhetoric, finding herself personally attacked by Wright for doing so. Obama disinvited Wright from giving the invocation to the announcement of his candidacy, pointing out some of Wright's strident remarks had been summarized in a recent Rolling Stone article, and saying, "Your sermons can get a little rough." Yet Obama claimed that the infamous 2003 "God Damn America" sermon "shocked" him, that he had never seen or heard Wright use such language, either in church or in private; at the same time, he indicated on a Hannity & Colmes he would have left the church if Wright "repeatedly" had used similar rhetoric while Obama was in attendance. At the same time, Obama voiced no objection for a Trinity lifetime tribute to Farrakhan; in fact, he attended the 1995 Million Man March "as an observer" and acknowledged Farrakhan's culturally-insensitive statements were not useful in terms of Obama's goal of community building through collective activism. It appears, by inference, that Obama sees such racist rhetoric as simply an innocuous release valve in response to social and racial injustice.

The problem for Obama is that he wants and needs the support of black churches and its leaders for his community building vision, but at the same time he realizes that Afrocentric rhetoric is polarizing and unacceptable to even liberal white Democrats. He's been trying to play it both ways, and his tactics to the mainstream media is to soft-pedal or distance himself or deny connection to or knowledge of inflammatory remarks. But this is the logical equivalent of Obama voting "present" in the middle of a Presidential campaign. And it's simply not credible. I mean, at what point is he doing in his church life what he's doing in his political life and challenging Wright, Farrakhan and others to move past polarizing speech; after all, did he want his own daughters to imitate Rev. Jeremiah Wright's behavior? Does he feel comfortable exposing his own children to this behavior? Aren't pastors supposed to serve as role models for our youth? If he agreed some of Jeremiah Wright's statements are things he himself would not say, why did he remain in the parish? Does his children's upbringing take precedence over Rev. Jeremiah Wright's political usefulness?

Barack Obama was well aware of Rev. Jeremiah Wright (and Fr. Pfleger's) views. It's hard to believe that Obama was not aware of Wright's 2003 "God Damn America" sermon, even if he claimed that he did not attend coincidentally on the Sunday's with angry rhetoric. After all, did Oprah Winfrey decide to stop going to Trinity because Wright simply woke up cranky one Sunday? The church publishes a magazine, and Rev. Wright's sermons are available by DVD or in print. It's simply not plausible to believe the post-9/11 sermon or the "God Damn America" sermon were outliers. 

Now Barack Obama is free to choose the church he wants. That's not an issue for me. The issue for me is the fact that he is intentionally misleading people about the facts, instead of straight talk. As an American voter, I have a right to know where he stands--not simply his own window-dressing  of the past and a hidden agenda. Common sense suggests that Barack Obama is not fully disclosing the nature of what he knows about Wright's divisive comments, the reason being he doesn't want to address the point of why he tolerated them for 20 years, while he had an immediate reaction to an ill-advised joke by Don Imus, demanding Imus' termination. 

Conclusion

The nature of Obama's prominent contacts is not just a question of judgment; it's a question of integrity, of being up front and honest about one's principles and agenda. Moreover, when given an opportunity to prove himself, Obama has not distinguished himself with his performance, his end results. 

Tuesday, October 21, 2008

The "Spread the Wealth/Paying Taxes Is Patriotic" Ticket

When Joe "the Plumber" Wurzelbacher got Barack Obama to concede, on camera, to admit "I think when you spread the wealth around, it’s good for everybody", it just fleshed out what everyone already knew. Similarly, walking gaffe machine Joe Biden on ABC-TV's "Good Morning America" noted that wealthier Americans will pay higher taxes under Obama: "It's time to be patriotic ... time to jump in, time to be part of the deal, time to help get America out of the rut." [Apparently Obama and Biden are calling only on the upper 5% of American workers to be "patriotic". By this definition, some 40 million American workers are not "patriotic" at all, because they don't pay federal income tax. Perhaps the ones who get tax credit checks should be considered "treasonous"?]

Raising the 35% tax bracket to Clinton's original 39.6% has been a given from the get-go; in fact, it is part of the Democratic Party myth of the fabled Clinton economic expansion era, although it looks like Obama is trying to co-opt the Bush lower labor tax brackets. [My understanding is that the dynamic effects, i.e., the extent to which tax cuts pay for themselves via higher growth, are more pronounced for investment vs. labor tax cuts, but my principal argument for low taxes is the Milton Friedman rationale of limited government and putting the federal bureacracy on a long-overdue fiscal diet, an argument McCain made during the 2003 tax cut deliberations and in proposing a spending freeze except for a few programs--Defense, Veteran Benefits, and Social Security.] 

Obama: "Tax Cut" = Tax Credit

Obama is deliberately deceptive in his use of the phrase "tax cut", because what he's really talking about are refundable tax credits that go beyond the earned income tax credit (e.g., college tuition, child care, etc.) The earned income tax credit is basically intended to offset regressive effects of payroll tax contributions--which are really mandatory contributions to self-financing entitlement programs, i.e., social security and Medicare. Conservatives such as myself like the earned income tax credit as a preferred alternative to welfare systems where earnings offset benefits on a dollar-for-dollar basis, a more efficient method than minimum wages to affect poverty household income, and a multiplier effect of relevant dollars on the local economy.

One estimate I've seen from the Heritage Foundation is that the Obama tax proposal will add over 10M taxpayers to the no-tax segment of the population--over and beyond payroll taxes. Obama window-dresses some of his proposals so technically some tax breaks aren't simply handouts. 

For example, to qualify for the $4K college tuition tax break, the student must provide 100 hours of national/community service of some kind. No wonder Joe the Plumber is upset: According to PayScale.com, the hourly rate for the average American plumber with 20 years of experience is $21.57.  Obama is promising low-skilled college-level students $40/hour for the tax credit, several times the minimum wage. We are not talking about a deduction for college tuition or a government loan: we are talking about a full loss of government revenue. I strongly suspect that university financial aid officers will factor that into their rewards,  and the tax credit is a disincentive to colleges from holding the line on costs.

On other things, like his bonus 10% mortgage interest tax credit (on top of mortgage interest deductibility), it's difficult to make an argument that it influences consumer behavior, since current homeowners would be eligible; Obama is pushing on a string.

Given an existing budget deficit, it's difficult to see how we can afford this way of "spreading the wealth around", especially since his investment and upper-income tax bracket tax hikes will likely have a dampening effect business and related job growth. Moreover, the dynamic effects of marginal tax increases imply, just as Clinton discovered, a shortfall in expected revenues.

Obama Implying McCain Hypocritical for Criticizing His Tax Credits

The Obama criticisms of McCain's health care proposal have been materially false and misleading. First, Obama has suggested that McCain's proposal for a $5000 tax credit for all households to buy health insurance (including out-of-state carriers) vs. Obama's retained tax-advantaged employer-sponsored health insurance (in conjunction with a federal system open enrollment). Obama in a TV spot still airing claims that "millions" will pay more in taxes under McCain's policy; in fact, Obama misleads people by pretending that tax-advantaged plans do not ALREADY receive an implicit tax subsidy for employer-sponsored health insurance, when it's available. In fact, for the people not enrolled in health insurance through work, McCain extends tax benefits to them to help defray the costs of health insurance. For most employer policies, the tax credit will exceed the existing tax subsidy (the value of which depends on the employee's highest tax bracket). Some employees in higher-costing health plans may find they'll pay taxes on the insurance cost exceeding the taxable basis up to the $5000 credit. In any case, McCain will allow people to shop across states, which may save on expensive features or enrollment conditions (e.g., no waiting period for ill people). Excesses of tax credit over health expenses can be deposited in a health savings account.

I believe the purpose of McCain's using a tax credit was similar to the concept of stressing flat-bid vs. cost-plus contracts. Flat-bid contracts provide an incentive for the vendor to seek cost-savings; in a cost-plus contract, there is no inherent cost discipline since costs are passed along to the customer. The elephant in the room for both Obama and McCain's plans is cost-containment, and both plans have a common problem in avoiding a mandate of coverage. In McCain's case, it's a matter of principle; in Obama's case, it's more complex, e.g., waivers for budgetary reasons, e.g., as is happening in Massachusetts, which is rapidly outstripping cost estimates. 

There are some fundamental issues with both approaches; in particular, I see health insurers wanting to offload poor health risks/costs on the government. We see, for example, from the technology field, where design mistakes lead to much more expensive implementation issues, so it's more cost-effective to catch problems early in the process. A number of health risks, e.g., obesity, diabetes, etc., which if not addressed at an earlier stage, can result in catastrophic conditions, including organ failure, blindness, amputation, etc. 

I would build on a proposal Bob Dole made on catastrophic health insurance and mandate participation, plus require hospitals to bill a minimum means-tested user fee from the noninsured. The fact is that medical expenses are a leading cause of bankruptcy, and policyholders end up absorbing the costs. Second, I would provide tax/cost/premium incentives for preventive care, verifiability of regular fitness activities, and certification of good health conditions (reasonable weight standards, no smoking, etc.)  Third, I would like to see a move from cost-plus pricing to more of patient-based pricing giving doctors an incentive to minimize unnecessary tests and visits, recommend effective generic drugs when applicable, etc. Fourth, I want to like to see open and transparent medical service and prescription drug pricing, third-party ratings services, doctor credentials, etc. Fifth, I want to see standardized/portable patient records and history and industry-standard billing, integrated with cost-containment procedures. Sixth, I think we need to see fundamental malpractice insurance reform, including caps on punitive damages.

Going back to Obama's contention that John McCain's approach to health care is no more than his pandering giveaways on savings accounts, mortgage interest, college tuition, etc., is disingenuous; McCain is simply providing equal protection for people whom do not get health care through work and do not have access to the same implicit federal subsidy via pretax deductions. I would have preferred more of a standard deduction myself; I think McCain was focusing on competition in the marketplace to wring out costs and provide an incentive for taxpayers to choose more efficient carriers.

Furthermore, Obama's argument that McCain's deregulation of the health insurance industry by allowing policyholders to buy policies across states constitutes the alleged "deregulation" problems resulting in current financial tsunami is also intentionally misleading. It's more cost avoidance of state mandated add-on benefits and/or no-wait conditions; for example, auto/life insurers Geico and USAA have a business model which allows policyholders to bypass insurance agent commissions, up to 15% or more of the premium.

The Fundamental Philosphical Difference Between the Parties

There is a Democratic obsession with class differences. The upper-income taxpayers have made out better than lower/middle-class taxpayers; the Democrats have also made an issue of oversized executive compensation. As a shareholder, I do have concerns with undeserved compensation (which impacts my own return), especially for executives whom turn in middling industry-comparable performances, no vision for future growth, etc. But from a taxpayer perspective, they are paying a disproportionate amount of federal taxes because of their higher tax bracket; if you were to parcel out executive pay to "spread the wealth" more in the company, given the lower tax brackets of most company employees, the net result would be lower aggregate federal revenues for the same amount of aggregate income. That may be fairer from Obama's ideal of "spread the wealth around" but if you have thousands of employees, it probably doesn't go that far. Having the right executive with the right vision can grow a company and with it the number of well-paid positions to which one can aspire, not to mention participatory equity stakes; if he or she can increase billions of market value to company equity, I don't mind a healthy compensation package. Baseball slugger Babe Ruth was once asked about his compensation relative to the President, and he famously responded, "I had a better year than he [Hoover] did."

Envy doesn't make for good public policy. It makes no sense, from the perspective of moral hazard, to provide tax credits that, if anything, provide a disincentive to grow one's income if the price is you pay more taxes and lose one's benefits. 

Conservatives note that the result of the Bush tax cuts has been for the well-to-do to deploy more capital from, say, tax-advantaged bonds to seek the higher returns of equities. They may increase their returns and hence their reported taxes. If you lower the effective returns by punitive tax increases, that capital may not be made available to help drive future growth in American companies and workers. 

The fact is that higher-income taxpayers pay a disproportionate amount of  federal revenues, and the end result is it has freed up discretionary income for lower-income Americans. The Democrats could see this as a progressive outcome, but instead take it as a given that playing Robin Hood by increasing the marginal rates on investment income and high income is desirable.

Obama not only wants to play Robin Hood but has made around $800B in domestic spending promises, based on vaguely specified pay-as-you-go, but he has not, as a senator, identified $800B in wasteful spending, and other than some veiled threats to Defense spending, he certainly doesn't want to antagonize groups with a vested interest in the programs he may cut. Not to mention ticking time bombs in social security and Medicare, the existing financial bailout, likely recessionary effects of increasing social spending (e.g., unemployment compensation) and lower income tax revenues. Remember 1992 when Clinton campaigned on a middle-class tax cut and "discovered" (after he was elected) the need for a tax hike? How credible is a freshman senator whom is claiming he's a budget cutter, when he's low-rated as a by watchdog groups (such as Citizens Against Government Waste) and has personally requested nearly a billion in earmarks, voted for the infamous Bridge to Nowhere, and secured a project for the University of Chicago system for which he has taught and his wife is employed? Do you expect him to veto a goodies-laden budget from Pelosi and Reid anymore than Bush stood up to Republican Congress budgets?

In contrast, McCain doesn't promise Obama's budget-busting tax credits and new discretionary domestic spending and talks about freezing federal spending and vetoing earmarks and bloated Congressional spending bills.

The basic difference in the conservative approach is minimizing the necessary government footprint, making necessary government run more efficiently and effectively, and providing the necessary foundation for economic liberty (e.g., educational/training opportunity, minimize/simplify government-related barriers to entry (e.g., paperwork, regulations, and mandates), timely, verifiable information to facilitate consumer, business, and investment transactions).

Obamanomics fails on multiple levels from a conservative standpoint. For example, Obama claims to provide a favorable capital gains policy for small businesses, but qualifications are complex. It taxes nominal vs. real investment income; for example, you could sell an asset at a price which tops the original price but which hasn't kept pace with inflation. It makes a virtue of regulations that serve as artificial barriers of trade across states, e.g., resistance to McCain's idea to allow individuals to purchase health insurance policies across states; it condones letting judges unilaterally write down mortgage loan amounts at the expense of banks which entered into good faith transactions.

It creates moral hazards through tax credits, I mean "tax cuts" to 40 million Americans whom pay no federal income tax; the government will match your savings up to a certain amount, even if you planned to save; the government will give you a tax credit to buy an energy-efficient vehicle, even if $4/gallon gas already convinced you to buy a better mileage car, the auto company doesn't need to cut a high selling price because the government is protecting their profits, and the current demand outstrips the supply; the government will write off the first $4000 of your college tuition costs (well, for a nominal number of make-work hours), which gives colleges that much wiggle room to pass along cost increases or award less generous packages. The government will underwrite some of your child care expenses, which allows child care providers price protection, lessens the incentive for more economical arrangements or for businesses to allow for flexible work schedules, etc. Generally speaking, we are playing a classic liberal game of picking winners and losers in economic or policy matters; this may be politically popular with domestic suppliers or consumers of relevant goods and services, but they constitute a form of economic protectionism which does not facilitate the production of globally competitive goods and services.

Obamanomics also maintains a globally uncompetitive business income upper tax bracket, which discourages domestic investment, and subtly threatens our NAFTA relationship with our energy supplier neighbors Canada and Mexico and threatens hard-negotiated trade treaties with South Korea and Colombia. (There are recent reports that Canada and Colombia are pursuing free trade treaties with the European Union.) 

Conclusion

Earlier this decade in the aftermath of 9/11 and the corporate scandals (e.g., Enron and Tyco), we were attempting to fight off a global economy teetering on recession and the Fed Reserve had pushed interest rates close to zero.  There was open speculation on Fed Reserve policy options once it ran out of interest to chop; were we going to have to pay banks for holding our money? One important side effect of lowered rates was providing homeowners a way to renegotiate loans and free up discretionary income. 

Federal taxes in a certain way now face a similar problem in that a large plurality of working Americans do not earn enough to pay federal income taxes. In fact, the government pays a number of lower-income people to work (i.e., the refundable earned income tax credit). (John McCain has suggested an interesting variation on this concept, e.g., a partial income rebate for out-of-work Americans whom accept a lower-paying position than their prior to work while training for a higher-income career.) 

We also maintain an increasingly fragmentary and complex tax system which often requires the services of specialists (e.g., tax accountants) and is constantly obsoleted. For example, consider the gasoline tax. Assuming the constant wear-and-tear on roads, lower sales of gasoline based on lower consumption and/or hybrid/electric engines, we need to provide a fairer way of distributing highway costs (e.g., a tolling system). We must look at simpler (flatter) taxation, perhaps including a consumption tax (applied to goods and services) and an asset tax. Notably McCain has endorsed the idea of a simpler tax system; Obama provided arguments against it when Joe the Plumber raised the idea (it's typical ObamaDoubleSpeak; he pays lip service to the general concept, and then subtly tears it down.) The reason I mention that here is the fact that Obama has been demagoguing the idea that Congressional legislation is written by (allegedly Republican) lobbyists, providing all sorts of fine-print and/or last-minute special-purpose clauses favoring a particular company or industry. A properly designed and administered consumption tax would do away with such labyrinths.

Obama's belief that "it's good to spread the wealth around" is not a capitalist ideal. Starting businesses is a risky endeavor; many, if not most new ventures fail. Furthermore, many graduate students spend low-income years pursuing a PhD, without any guarantee of a faculty position or high-paying business job; similarly, medical students often assume huge loans and high costs in starting up a practice. Scientists and engineers often must progress through a rigorous curriculum. There will always be winners and losers in the capitalist renewal of destructive creation, e.g., the succession of whale oil with petroleum, candles with electric light, telegraph with long distance calls, etc., and/or technological or managerial innovation (e.g., the replacement of telephone operators). A number of people contribute to charities or establish philanthropies with their wealth but don't trust politicians to squander their hard-earned dollars to guarantee a certain standard of living and provide a disincentive for long-term economic self-reliance.

The conservative alternative, which McCain represents, is to spread the opportunity to acquire wealth. This includes providing parents a viable alternative (e.g., vouchers, charter schools) to dead-end, dysfunctional public schools and allowing a lower barrier to entry and operation (including fair competition, low taxes or mandates and minimal business-impeding regulations and reporting requirements) to create and grow one's own business. Obama's impulse to maintain globally uncompetitive business tax brackets, to increase individual high-bracket tax rates, including the likely bundling of no-ceiling social security tax collection with the highest tax brackets, and to increase the complexity of the tax and regulatory system  is not favorable for business growth and related higher-paying job opportunities.

Monday, October 20, 2008

The Colin Powell Endorsement of Obama

Colin Powell is widely respected among members of my own family. In fact, one of my siblings gave me a copy of his autobiography as a Christmas gift. I wouldn't say that Powell's endorsement of Obama is unexpected; Powell, a Republican, had declined to endorse since McCain clinched the Republican nomination months ago, which is not a good sign (it is improbable that Powell would somehow learn something over the next 6 months about McCain he didn't already know from dealing with him as senator over 20 years). The differences between McCain and Obama in terms of military and foreign policy knowledge and experience are stark; McCain has endorsements from over 100 generals and admirals and four secretaries of state spanning four administrations (Kissinger, Schulz, Eagleburger, and Haig).  Bill Kristol (Weekly Standard)  predicted Powell's endorsement of Obama a couple of months back.; the big question was whether Powell would make a keynote endorsement at the Democratic convention.

My guess is that Powell deliberately held back his endorsement of Obama until the homestretch of the campaign, hoping to maximize the impact of his endorsement. I'll go over his stated rationale shortly, but I'll point out I'm not surprised for the following reasons: (1) Colin Powell has for some time made it clear he was not a social conservative, i.e., he's "pro-choice" on abortion; well, weren't the Bushes, whom he supported, pro-life, too? I think the difference is that he's worried the next justice to retire may be a reliable liberal vote on abortion, and he sees the Court maybe one vote away from revisiting Roe v. Wade; (2) there was well-known friction between Powell's State Department and the Rumsfeld's Defense Department under George W. Bush. Powell resigned under pressure, and I suspect Powell sees the Obama endorsement as payback, against the Bush Administration and a Republican Party I suspect he considers is  more ideological than pragmatic, both in social and foreign policy and which he suspects will dominate a McCain presidency.

As for Obama, I suspect that it's "don't look a gift horse in the mouth".  I personally am somewhat surprised Obama would accept the endorsement, given the fact that Secretary Powell was the public face of what Obama considers to be his most fundamental competitive validation of judgment in this campaign, his opposition to the liberation of Iraq.  Obama wants to "turn the page" on the Clinton-Bush years by embracing the man whom carried out the much-criticized Bush Doctrine on his watch?

Newt Gingrich, former Republican Speaker of the House and someone I've admired for recasting conservatives ideas for a 21st-century American agenda, said on ABC-TV that he was impressed by the endorsement, saying he believed it buried the experience argument (favoring McCain over Obama).  Sorry, Newt; you are wrong. I think Powell's endorsement reassures people whom have already a decision to vote Obama and are still somewhat anxious about Obama's lack of foreign policy and national defense credentials. But if you look at the arguments that Powell makes, he is not making a judgment about Obama's expertise in military matters and/or his competency and experience in foreign relations and international trade.

Powell's Rationale for Endorsing Obama

Instead Powell is basically making an assessment based on how he's perceived the campaign over the past 6 months, the same kinds of matters all of the American people can judge on their own merits.  Let me summarize: (1) Powell thinks we need a transformational figure, someone who is inclusive and inspiring, has oratorical abilities and a fresh voice from a new generation of leadership; (2) Obama has maintained a low-key, sure-footed presence during the debates and the economic crisis and made a great choice in Biden as VP, with the gravitas to be President; McCain seemed to be all over the place during the economic crisis and made a questionable choice of a VP in Sarah Palin; (3) Colin Powell has generally disliked what he considers the increasingly negative attacks of the McCain campaign, which he thinks takes casual contact with disreputable people, like Bill Ayers, out of context, and also disdains the polarizing atmosphere of McCain's rallies.

A Critique of Powell's Rationale

First of all, I respect Colin Powell's right to  vote the way he wishes, and I also respect that he went on the record with his rationale, because he didn't need to provide a reason. However, I think a response is in order to his stated reasons.

--Transformational Leadership?  

I don't agree that Obama has been as inclusive as Powell believes. Obama did not work with the House Republicans during the recent bailout process; he voted for poison-pill amendments to the 2007 Immigration Bill, one in which he played a minor role in negotiating; he refused to join the Gang of 14, which defused a Senate crisis over the use of filibusters in judicial nominations; he briefly joined a bipartisan committee headed by McCain on Senate ethics legislation, only to drop out and announce his support for the partisan Democratic bill; on legislation where Bush took a position, Obama voted with the majority of his Democratic colleagues 96% of the time. 

I agree that Obama has rhetorical skills, but (Ronald Reagan aside) we don't simply choose leaders from the performance arts or someone from Toastmasters. Colin Powell may find something inspiring in vacuous powerfully delivered speeches, where nobody remembers the substance or can specify even a single accomplishment of Obama; I don't. I find John McCain's unconventional straight talk, his haunting account of his POW experience where he admitted to being broken, and his rousing "stand up and fight" cadence at the end of his nomination speech and recent rallies far more inspiring than Obama's pretentious "we are the moment we've been waiting for" nonsense or the fact that Obama even had to steal the lines of the current Massachusetts governor's 2-year-old speech ("Just Words?") and pass them off as his own. You know, all this warm and fuzzy talk about getting everybody together--that's not leadership. It's what you do once you get people in the room. And Obama's general wishy-washiness on all sorts of issues (e.g., oil drilling, nuclear energy, gun rights, FISA, the success of the surge in Iraq, the end status of Jerusalem, etc.)--trying to pander to independents and moderates--hardly inspires confidence in leadership (which makes Powell's discussion of the economic crisis arbitrary).

Some (including myself) would argue what we need in a two-war environment and a global economic crisis is not an on-the-job training President with no significant military or foreign policy  or management experience, but someone who is ready from day 1. I find Colin Powell's argument for thin-resume Obama in troubled times as rather curious luxury we can't afford, because we don't have much of a track record of what he's done--beyond vote "present" around 130 times in the Illinois Senate, which I don't find reassuring in picking a President.

--Choice of VP

I have my own criticisms of Sarah Palin; I certainly cannot defend Palin's convoluted responses to questions regarding the federal bailout, the Bush Doctrine, and even the magazines and newspapers she reads. But she is a small business owner, she has energy experience (a key national priority) as a commissioner, she was a City Council member and mayor, and she is the current governor. She has more administrative experience than the entire Democratic ticket. She has a bipartisan record, a proven record of restraining spending, and has taken on corruption within her own party. Let's contrast that with Barack Obama's choice--Obama did not select Hillary Clinton, whom was the obvious "unity" choice after finishing a very close second in the campaign and some 18 million votes. Obama did not choose someone with administrative and/or business experience (e.g., NJ Governor Corzine or perhaps NYC Mayor Mike Bloomberg), or even someone from the moderate/centrist part of the party (e.g., Governor Bill Richardson or Senator Ben Nelson of Nebraska). Powell seems to think part of a "transformational" leadership change is a 6-term senator from Delaware as VP, ranked the third most liberal senator (after Obama), with no economic or administrative experience? In what way is this "inclusive"? In what way is this VP choice transformational?

What makes me even more critical of Powell's argument here is that he argues that Sarah Palin, whom has been responsible for personnel decisions and would be working with a cabinet, would make a worse President than the walking gaffe machine, Joe Biden, whom despite 36 years in Washington, by one account, made at least a dozen factual errors during the VP debate? What about the fact that Barack Obama, a 3-year US Senator whom has been running fulltime for the Presidency over the past 18 months, has spent only 12 years in selective office, including the last two years, and Sarah Palin's career in local politics predated Obama's career? Many governors, including Clinton, Carter, Bush and Reagan, had no more substantive military and foreign policy or even federal experience than Palin.

In fact, if you look at accomplishments, you can argue Palin's record, in terms of cleaning up corruption, passing reform legislation and providing energy rebates, vetoing millions of dollars in excessive state spending, and getting a natural gas pipeline agreement in principle to the lower 48 stacks up well against Obama's own meager accomplishments, which Powell and most Obama supporters can't or won't enumerate.  

The key question Powell doesn't address is if Obama did not make a difference as a community organizer and state senator and US Senator from Chicago, on what grounds does he expect Obama to adequately accommodate the even more difficult issue of transforming America? 

--Obama's Presidential Temperament

Now, as to the low-key "looking Presidential" bit. I think that Colin Powell here is trying to project his own measured-tone, always-in-control persona. I don't find this convincing at all; I think in Obama's case, it's a public facade. If anything, I find it manipulative, not unlike the guy whom is on his best behavior during courtship and then the young woman learns his  daily personality. Mr. Powell, do you really think what you see in the so-called "debates" or on the stump constitutes a real-life simulation of how Obama will respond to a crisis, manage priorities, etc.? 

But more important is how Obama has been extraordinarily defensive and thin-skinned; a comprehensive list is beyond the scope of this post, but, for instance, Obama played the race card several weeks ago ("they're going to tell you I don't look like those people on dollar bills"); Obama argued that Bush was personally attacking Obama in a speech before the Israeli Knesset, warning of appeasement of rogue leaders or nations; Obama got hypersensitive over the attention being paid to the fact he was no longer wearing a flag pin on his lapel; Obama was furious over the allegation he did not fold his hand over his heart during the recital of the Pledge of Allegiance (what was caught on film was his folded hands during the playing of the National Anthem, a violation of the US Flag Code); Obama walked out on a press conference in Chicago arguing he had had already addressed enough of  journalists' questions over Rezko and the Canadian free trade kerfuffle; Obama has threatened to sue or file federal charges against a 527 organization over its free speech rights in questioning the Bill Ayers connection; Obama labeled as "liars" people whom pointed out his efforts in stonewalling the born alive infant protection act in Illinois; Obama dared McCain to allege the Ayers connection to his face, man to man; Obama has personally attacked people whom have criticized his wife Michelle's comment about being proud to be an American for the first time in her life; Obama accused a Nevada reporter (Ralston), whom questioned his support for the 2005 Bush-Cheney Energy Bill, of being a surrogate for the McCain campaign; etc. Believe me;  that's just the tip of the iceberg.

So, Secretary Powell, what exactly do you take as your standard of Presidential demeanor? The fact that Obama kept his temper in check during his first 3 Presidential debate "dates"? How in the world could you miss all of these reported incidents? John McCain has not reacted anywhere like this; he has been a true officer and gentleman. 

In contrast to the character differences between Obama and McCain, here's this incident from a May 1 McCain townhall meeting where Obama (and former Biden operative) supporter plant Marty Parrish asked the following:
Marty Parrish: This question goes to mental health and mental health care. Previously, I've been married to a woman that was verbally abusive to me. Is it true that you called your wife a c*nt?

McCain: Now, now. You don't want to... Um, you know that's the great thing about town hall meetings, sir, but we really don't, there's people here who don't respect that kind of language. So I'll move on to the next questioner in the back.
If you watch the tape, you'll see and hear that McCain, with perhaps an unfair reputation in terms of temperament, maintained a respectful composure, did not raise his voice over something that would have set off many, if not most men. I mean, I do not think McCain could have survived years in a POW camp without self-control in what he said or did.

However, Colin Powell ignores some key issues of personal integrity involving Obama; for example, he promised that he would abide by equally public funded campaign fund constraints (roughly $85M). Obama, when he found he was raising prodigious amounts of money during the Democratic campaign, decided to recant his promise. 

What's particularly notable about this is he made a commitment to reform (e.g., Senate ethics reform), but decided earmarks and unrestricted campaign finances were consistent with his values. He has made a virtue of small contributions. But the mainstream media has underplayed a scandal uncovered by the FEC. Mr. Good Will from Austin, TX working for company "Loving" and in the profession "You" has contributed over $17K in 1000 contributions (most for $25). Also, by coincidence, Mr. Doodad Pro from Nando, NY, also mostly working for same company and profession ("Loving You") , although other times working for company VCX  in a different profession, VCVC, gave almost $20K in 786 donations. The media reports also indicated what appear to be numerous questionable transactions from international sources.

--the financial tsunami

Obama did not have a single substantive contribution to resolving the crisis; he underscored a few predictable Democratic sound bites: protect the taxpayer, make sure that Paulson is accountable for how he spends $700M, blame it all on Big Business, no golden parachutes for target business executives, etc. (In fact, McCain essentially said the same thing, so Obama brought nothing new and distinctive, but was lobbying in support of the Senate compromise approach.) That's not what I take away from the crisis, General Powell: What I remember is this. When McCain suggested suspending the campaign and postponing the first debate, Obama refused, openly suggesting that McCain couldn't walk and chew gum at the same time and was trying to duck him in a debate (although McCain is on the record for wanting at least 10 joint townhalls and more debates). Furthermore, Obama was satisfied to go on with his fulltime campaign activities and handle the crisis with phone calls between events. To me, and I believe most Americans, this did not speak of true leadership and setting of one's priorities. During the biggest financial crisis since the Great Depression, Obama's first priority was his campaign events and basically delegating responsibility as his party's leader during the crisis to House Speaker Pelosi and Senate Majority Leader Reid's efforts.

Powell seemed unnerved, not by Obama's lack of contribution to the process, but what the Democrats have been describing as McCain's so-called erratic behavior, i.e., first underscoring confidence in the economy, then the decision to suspend the campaign (after Reid's appeal for McCain's support and McCain's discovery of a disconnect with House Republicans), to go to Washington, only to find Democrats, worried about his possibly securing a bipartisan win at Obama's expense, basically forced McCain into a no-win situation of either conceding a foreign policy debate, his strong suit and being behind in the polls, or showing up at the debate with no agreement to show for the gambit of suspending his campaign. I myself disagree with McCain's putting himself into that position, but we also know from the record that McCain asked Obama to go with him to Washington before McCain suspended his campaign, so there's no doubt in my mind that McCain's motive was not personal political gain but putting resolution of the crisis above politics as usual.

Obama has repeatedly demagogued McCain's early response that the fundamentals of the economy are still strong, implying that McCain was myopic. I think what McCain intent was to express a vote of confidence in the resiliency of the robust American economy, versus Obama's talking down the economy in order to politically exploit dissatisfaction with the "Bush economy". I saw McCain as not unlike FDR's resolute response to the attack on Pearl Harbor, which clearly crippled our Pacific fleet. One could argue that after Pearl Harbor, FDR's faith in our ability to prevail was unrealistic. However, when pressed on the statement, McCain gave a convoluted response of his belief in the strength of the American worker; why the worker and not confidence in  innovative American businesses and entrepreneurs? 

The point is, money/credit  is the lifeblood of our economy; we may recall the running fitness guru James Fixx whom definitely seemed to be the picture of health but whom fell dead from a heart attack. The fact is, our economy grew at nearly a 2% annual rate in the second quarter; we've seen better, but we were doing better than recessionary Western Europe, with its higher unemployment, taxes, and social safety net, which Obama covets and wishes to replicate. So what we were seeing in the economy, with the sudden collapse of AIG, investment banks, and Fannie Mae and Freddie Mac, was a sudden fear between banks over whether their loans to other banks and other parties might put their own capital at risk. This has had an effect on businesses, even business with robust order flow and back orders, because they may depend on liquidity to meet payrolls, pay for supplies, etc. The underlying supply and demand for goods and services did not disappear overnight; we still have the largest, most diversified economy in the world, a target market for any other country and a key exporter of food, advanced technology, and other goods and services.

Colin Powell may be unnerved by some confusing moves at the start of an unprecedented crisis, and I would argue that Treasury Secretary Hank Paulson himself, the former CEO of Goldman Sachs, has himself shifted approaches, initially focusing on piecemeal firefighting and then migrating to a more comprehensive approach to get at the source of the problem. He says that Obama was shown more "intellectual vigor", yet if you recall, McCain, not Obama, outlined a 5-point program (including streamlining currently piecemeal government regulation) during the crisis (to which Obama campaign, which did not propose its own approach, reacted by claiming McCain had stolen some ideas out of their own playbook). Obama's reactionary response to the crisis is not a virtue, any more than his 130 "present" politically difficult votes in the Illinois Senate.

--the negative Republican campaign and charges of divisiveness

I have no clue why Colin Powell went on this long rant about Muslims with respect to the GOP. In fact, George Bush specifically went out of his way in the aftermath of 9/11 to plead for no reprisal mistreatment of Arab-Americans. George Bush and John McCain both fought for immigration reform last year, including people from Muslim countries. Now Obama did have a Muslim father and attended a Muslim school during his early school years as his mother brought him with her to Indonesia, but speaking for myself, I've never questioned Obama's Christian faith (and it wouldn't be an issue if he was Muslim).  I'm more concerned out Obama's judgment in picking a divisive pastor and spiritual mentor (Jeremiah Wright), which I feel contradicts his post-partisan rhetoric. I have come across almost nothing in all of my sources where could justify Powell's undue attention. I think I've seen provocative columnist Ann Coulter stress Barack's middle name (Hussein), and I heard one rally questioner (Gayle Quinnel) allege that Obama is an Arab (and McCain promptly corrected her).

But blaming McCain for something not part of his campaign is irresponsible, and Colin Powell should be ashamed of raising it. I'm sure that white and black racists may also vote for candidates of their own race as well. But most people are voting based on substantive reasons. For me, Obama represents an expanded government footprint; I don't believe he has enough knowledge and experience, under some very tough circumstances involving the economy and war. There are some notably qualified black American conservatives, like Thomas Sowell, Ken Blackwell, JC Watts, Larry Elder, or Maryland's former lieutenant governor and the man for whom I voted for the US Senate in 2006, Michael Steele. 

I personally think that the McCain campaign is running the WRONG kind of campaign. Polls show that Obama, undeservedly, is rating higher than McCain by lopsided scores on health insurance and the economy. In part, I feel it's because McCain hasn't run a commercial on health insurance in months while Obama has been running commercials I've seen in Maryland, lying that millions will pay more in taxes, because McCain is extending tax benefits to everyone with health insurance, not just those in employer plans.  There's not much McCain can do about being scapegoated for the financial tsunami, but he can argue that punitive tax increases or maintaining uncompetitive business tax brackets impede job creation. He can argue that Obama is not a reliable check on Congressional spending and lacks the federal and management experience to deal with today's challenging economic and wartime condition.

I think Colin Powell has the completely wrong idea about Ayers and why he's an issue. Colin Powell's approach to education issues is much closer to McCain's than to Obama's, and if he really understand that Obama and Ayers were funding education initiatives funding not things like vouchers and basic skills but to mobilize parents, to combat racism and social inequity, etc. The question of Obama's contacts like Wright, Ayers, Rezko, and Pfleger raise questions precisely because as a 3-year US Senator, we don't know enough about him to know how he would be as President. It's not so much that Ayers is a former terrorist; it's because he's an unrepentent former terrorist. 

What I'm currently seeing is a perversion of politics; Powell thinks the negative ads are primarily McCain. In Maryland, I haven't seen a McCain ad in months, but I've been seeing ad nauseum ads misleadingly comparing McCain to Bush and making the false accusations against McCain health care proposal.

What Colin Powell's Decision SHOULD Have Addressed

Given Colin Powell's foreign policy experience, I'm sure that he noted McCain's quick assessment of the situation during the recent Russian invasion of Georgia; what was Obama (and his foreign policy team)'s initial response? To call on both Russia and Georgia to restrain themselves. Bush and Obama eventually migrated to McCain's conclusions.

We have seen Obama back off from free trade arrangements with Colombia and South Korea, both pacts to our advantage, and similar threats to reexamine NAFTA has Canada looking at a free trade deal with Europe.

But there are other things that bother me--Obama's near obsession with building up our forces in Afghanistan, the explicit suggestion of taking military action in Pakistan, with or without Pakistan's permission, an issue Benazir Bhutto condemned before her assassination, his decision for withdrawal from Iraq, regardless of conditions on the ground, the vacillation on the status of Jerusalem, promising to the Israelis an undivided Jerusalem, to Palestinians final status a matter of negotiations, his willingness to hold Presidential-level diplomacy (via the Youtube debate) with leaders of rogue nations like Ahmadinejad....

Also, General Powell, I'm just wondering just what you think of a future Commander in Chief whom would say, from the get-go, in light of the development of new, more sophisticated weapons systems from Russia, China, and others, that he would cut the Defense Department R&D budget and say the following, on tape:
"I will cut missile defense systems"
"I will not weaponize space"
"I will slow the development of future combat systems"
"I will not develop new nuclear weapons"
You see, General Powell, when people look for your input on an endorsement of a Presidential candidate, they are thinking your decision is based fundamentally on your expertise as a former Chairman of the Joint Chiefs of Staff, National Security Advisor  or as  Secretary of State, not for your personal opinions on robocalls, the financial bailout or the Presidential debates. That NBC-TV, a news media source totally in the tank for Obama, would fail to question you on more salient issues of a strong military defense and a consistent foreign policy is not surprising; that you did not address these substantive concerns on your own is nothing less than unconscionable.