Partisanship and Extremism

Partisanship and Extremism, by Henry Farrell
Cato Unbound, February 6, 2009 @ 10:19 am

I applaud Nancy Rosenblum’s effort to rehabilitate partisanship. My major regret is that I didn’t know about her book sooner. I’ve just had an [1] essay published which defends partisanship, and which would have been better if it had been informed by her work.

My response will focus on how Rosenblum’s arguments apply to the role of political blogs. Blogs have a dubious reputation among pundits and political commentators, precisely because of their vigorous and unrelenting partisanship. The historical complaints that Rosenblum documents are all well and alive in the debate over blogs’ depraving influence. David Brooks’ [2] NYTcolumn attacking leftwing blogger Markos Moulitsas Zuniga is an especially striking example:

The Keyboard Kingpin, a.k.a. Markos Moulitsas Zúniga, sits at his computer, fires up his Web site, Daily Kos, and commands his followers, who come across like squadrons of rabid lambs, to unleash their venom on those who stand in the way.

The reader who is able to look past Brooks’ extraordinary metaphors (when confronted with squadrons of rabid, venom-unleashing command-lambs, mere [3] fascist octopi must surely slither away in embarrassment) will see all the traditional tropes of anti-partisanship that Rosenblum identifies — lack of independence, mindlessness, vague intimations of authoritarian control, and corrupt clandestine relationships.

Rosenblum suggests that this broad animus against partisanship descends from early twentieth century Progressives’ detestation for party machines. This led to a vaunting of political “independence” and a corresponding distaste for strong partisanship. She argues that these implicit biases also afflict the arguments of contemporary political theorists such as James Fishkin (also participating in this seminar), who prize political deliberation.

Again, blogs provide an interesting test case. Fishkin [4] harks back to a Madisonian vision of politics that he suggests has been corroded by political parties more interested in winning elections than in thoughtful deliberation. He seeks to structure deliberation so as to minimize what he sees as disruptive partisan extremism and maximize the potential for disinterested discussion. Blogs are anathematic to this vision of politics. Bloggers are typically at least as interested in winning the argument as in discerning the truth. The empirical evidence that [5] political bloggers and [6] blog readers are sharply divided along partisan lines is emphatic.

However, as Rosenblum suggests, partisan argument of the kind that blogs engage in can play a valuable democratic role. They help structure a “system of conflict” in which “discordant values, opinions, issues, and policies” are “identified, selected, and refined.” As I argued a couple of years back in the Boston Review:

Exactly because the blogosphere involves clashes between strongly divergent
opinions, it is beginning to affect other spheres of political debate. The
blogosphere serves as a crucible in which politically useful and interesting
interpretations of important issues are forged and tested. Bloggers’ ability to
take up a new political issue, toss different interpretations back and forth
among themselves, point out flaws, and arrive at final viewpoints makes them a
highly valuable resource for political professionals and commentators in search
of novel and salient ways of framing issues.

I could have added, as [7] Jonathan Chait does, that bloggers reshape political debate along specifically partisan lines.

The netroots are scornful of single-issue liberal groups — or, really, any
liberals at all who are not wholly dedicated to the cause of Democratic victory
… The netroots’ dream is of a liberal army of grassroots activists, pundits,
policy wonks, and politicians all marching more or less in lockstep.

Chait is being critical, but from Rosenblum’s perspective, he’s paying bloggers a backhanded class of a compliment. Rosenblum argues that one of the key benefits of partisanship is that it provides a more inclusive and encompassing vision of politics than single issue groups ever could. That said, it may be that he’s paying too much of a compliment. Blogs may not be partisan in exactly the ways that Rosenblum prizes. More on this later.

One could extend Rosenblum’s arguments about the benefits of partisanship for political argument to less directly political fora too. Partisanship may also usefully help mobilize individuals to participate in a broader public sphere of debate and argument. The canonical example of a thriving “public sphere,” according to deliberation theorists such as Jurgen Habermas, was the coffee house society of eighteenth-century London. Yet as historian [8] Brian Cowan has argued, this sphere of purportedly civilized debate was “born out of the practical exigencies of partisan political conflict.” So too the modern political blogosphere, which not only has political consequences, but is also opening up a broader set of conversations about politics. Indeed, today’s bloggers are arguably more “civil” than their seventeenth and eighteenth century counterparts:

In the course of a heated debate in the Amsterdam Coffeehouse in 1683, the whig
provocateur Titus Oates was struck several times over the head with a cane by
one of his opponents. Oates could not retaliate in kind, and so he responded by
throwing his dish of hot coffee in the eyes of his assailant.

So partisanship is a feature of blogs, not a bug. Furthermore, Rosenblum’s account of partisanship might be extended to criticize parties in a way that isn’t too far removed from leftwing “netroots” bloggers’ critique of the Democratic Party. More specifically, I think Rosenblum’s claims suggest that partisanship can be used as a metric to evaluate the democratic contribution of parties.

Bringing this out explicitly might help elucidate an earlier debate about this book between [9] Rosenblum and [10] Melissa Schwartzberg at Columbia University. Melissa argues that the internal openness of parties to debate and to input from “citizen partisans” is a key factor determining whether partisanship will have the benign effects that Rosenblum argues. Rosenblum, while recognizing that this is a legitimate concern, argues that grassroots participation is not the only means through which partisan deliberation takes place, and seems to imply that lack of openness is only a substantial problem in extreme cases (where parties are captured by small sectional interest groups, or when groups are systematically excluded from participation in politics).

I think that Melissa’s case that parties should be more open to “citizen partisans” is stronger than Rosenblum suggests. If parties are laudable because of their potential for creatively reimagining the disputes that structure politics, than we have a way to evaluate how parties measure up to their partisan role. Parties that refuse to engage in such creativity, and instead accept the system as it is (even if they are systematically disadvantaged by it), are falling down on their job. And there is good reason to believe that party leaders (who are those who have done well in the system as it is) are more likely to be inclined towards this kind of small-c conservatism than are grassroots activists, and thus more likely to be in need of correction.

This, for example, was the basis of the “netroots” leftwing bloggers’ critique of the Democratic Party — that a supine leadership had succumbed to a corrupt form of bipartisanship in which they were simply unwilling to vigorously oppose Republicans and try to build a new partisan coalition. There is good reason to suspect that this critique was for the most part correct.
Of course, this kind of capture is a problem that can never be resolved permanently. As Alessandro Pizzorno argues, the best we can hope for is a cycle in which yesterday’s reformers, if successful, are likely to become tomorrow’s establishment to be challenged in turn again. But relatively “open” parties, precisely because they are more subject to this cycle, are more likely to be ones in which reformers can periodically seize control, and hence to fulfill their democratic vocation than closed ones.

All this said, Rosenblum’s arguments perhaps provide the basis for an interesting critique of political bloggers and blog readers; that they aren’t partisan enough. This would surely be a first in contemporary debate. As I hinted in my discussion of Chait above, bloggers and blog readers may not always be partisan in the ways that Rosenblum describes. Sometimes, they appear more like what she terms “extremists,” whom she criticizes for political hubris. I don’t think that this potential criticism sticks (although I do think that somewhat related kinds of criticism might), because I don’t think that extremism, as Rosenblum defines it, is as normatively objectionable as she suggests it is.

Rosenblum’s critique of extremism is only referred to in passing in her essay, although it is developed at length in her book. She draws a sharp distinction between partisanship and political extremism, arguing that extremism isn’t the opposite of centrism, but rather an absence of the kinds of accommodating democratic values that partisans possess. Extremists “disdain compromise” and are unconcerned with outcomes. They adopt utterly unyielding positions in politics. This is in contrast to partisans, whom Rosenblum sees as being inclined towards inclusiveness, accommodation, and seeking to persuade a majority of the rightness of their position. Rosenblum describes extremism as hubristic, morally reprehensible, tyrannical, and despotic.

I suspect that bloggers and blog readers may sometimes be singleminded in the sense that Rosenblum suggests. While bloggers and blog readers are clearly partisan, recent evidence indicates that they also are much more ideologically coherent than earlier work (including my own) would suggest, and very likely ideologically single minded on a limited number of key issues.

A good example is torture. The Obama administration and Democratic Party leaders are adopting an eminently partisan (in Rosenblum’s sense of the word) position on torture — while seeking to outlaw it, they are also apparently pursuing compromise by failing to pursue indictments for officials and government agents who authorized torture and carried it out in 2000–2008, so as to build a broader political coalition. Many leftwing bloggers, in contrast, are adopting an uncompromising and “extremist” position arguing that compromise on torture is utterly wrong, and that failing to pursue torturers effectively legitimizes political actions that are utterly illegitimate. Leftwing bloggers’ unyieldingness on issues such as torture and the Iraq war goes together with partisan accommodationism on other issues, but isn’t tempered by it. While these bloggers might readily support an economically centrist candidate for a red-state Congressional district, I would be startled if they ever supported an apologist for torture.

So are these “extremist” bloggers morally reprehensible because they aren’t open to compromise on issues such as torture? I would suggest not, for two reasons. One (which I suspect Rosenblum might accept) is that on some fundamental issues, democratic accommodation should take second place to the basic values of a just society. The ethic of partisanship, however beneficial, is surely a second order value rather than a first order one, and may reasonably be violated under some conditions. Here, while liberalism may require us not to hold unconsidered values, I am not at all sure that it requires us to be ready to seek compromise on values or issues that we hold to be foundational for any even marginally decent political system.

The other is that uncompromisingness can sometimes have specifically democratic virtues too, even apart from the underlying values that it represents. Even if it is not intended as an act of persuasion, it may serve to persuade others. The sincerity and tenacity with which people hold to a position, even when it is not politically expedient or carries serious costs, may be a convincing reason for others to consider whether this position, however unpopular, has merit. One woman’s unreasonable obduracy may be another woman’s bearing witness. As Rosenblum herself acknowledges, “extremism” is one of the most serious accusations that one can make against a political actor or set of actors. I personally would prefer if it were only used to refer to actors who are not prepared to accept democratic norms in any meaningful way.

Now of course this isn’t to say that bloggers (or others) shouldn’t be criticized — I think that Max Weber’s account of political responsibility (which is a kissing cousin of Rosenblum’s arguments about the ethic of partisanship) provides a useful basis for critique. But since I am over my word limit, it may be best to leave that to another post or comment.

Full article w/references here.

University Partnership Aims to Fight HIV/AIDS More Effectively

University Partnership Aims to Fight HIV/AIDS More Effectively. By Erika Gebel
Gates Foundation grant supports joint effort by Johns Hopkins, Makerere

Baltimore — A new partnership between universities in the United States and Africa aims to be an agent for change in improving health outcomes for those afflicted with HIV-related diseases.
With help from a $4.97 million grant from the Bill & Melinda Gates Foundation, a collaborative effort between Johns Hopkins University in Baltimore and Makerere University in Kampala, Uganda, seeks to enhance research and improve health in Uganda and East Africa.

There are 33 million existing cases of HIV/AIDS worldwide and that number is growing by millions each year, according to the World Health Organization. In 2007 alone, AIDS took the lives of 2 million people; 1.5 million of the victims lived in Africa.

To combat this growing epidemic, the U.S. President's Emergency Plan for AIDS Relief (PEPFAR), initially passed in 2003 and then reauthorized in 2008 for an additional five years, has provided $18.8 billion for the fight against AIDS. It is the largest commitment by any nation in history against a single disease. (See “Bush’s Successful HIV/AIDS Program Looks to Next Five Years.”)

Universities, corporations and private foundations in the United States also are joining in the battle against AIDS through funding and research programs.

Makerere University, established in 1922, is one of Africa’s oldest universities. It has 30,000 undergraduate and 3,000 postgraduate students. Through international collaborations with a number of institutions — including a 25-year relationship with Johns Hopkins — Makerere has established itself as a global center for research, especially concerning HIV-related health outcomes.

Makerere University has also made community outreach a central part of its mission.

“Makerere has a very active place in Uganda. They are very progressive,” said Dr. David Peters, an associate professor in the Department of International Health at the Johns Hopkins Bloomberg School of Public Health. “At Makerere, they don’t just sit in ivory towers. There are very few institutions that want to think that way.”

Peters, along with George Pariyo, head of the Department of Health Policy, Planning, and Management at the Makerere University School of Public Health, leads the study.

On December 1, Makerere University established a College of Health Sciences as a semi-autonomous unit within the university. The college houses the School of Biomedical Sciences, the School of Public Health, the School of Medicine and the School of Allied Health Sciences.

This change in structure demonstrated to Peters that the place was ripe for other changes he hopes will come as a part of the new funding.

“With this grant,” Peters said, “we want to plan how to, in the future, make the Makerere College of Health Sciences a leader, with a focus on improving health outcomes.”


INITIAL STEPS

The project is still in its infancy. The initial phase, scheduled to last two years, includes a needs assessment that will be followed by development and implementation of a strategic plan over the following eight years as a joint enterprise between an advisory panel (made up of deans from each school in Makerere’s College of Health Sciences and Johns Hopkins faculty) and an advisory council drawn from Ugandan government and civil society.

Ground work and data gathering for the project’s needs assessment phase will be accomplished by teams made up largely of students and led by Makerere faculty members and support personnel from Johns Hopkins, according to Peters.

Peters said part of the team’s work will involve evaluating the community-based health training currently in Uganda and determining how the university might promote local health initiatives involving HIV most effectively. The team also plans to test innovative strategies, such as a voucher system, to see if the university can influence Uganda’s health systems.

Another aim is identifying how the university can support implementation of research-based health programs. A few years ago, researchers from Makerere University led a study that found circumcision could reduce the risk of acquiring an HIV infection by 48 percent. Peters wants to know how such research could influence policies that could improve the health of Ugandans.

Some research arising from the initiative could be used in scholarly articles, but Peters emphasized new information will have multiple uses.

“The audience isn’t always scientists,” he said. “You may want to put policy briefs in places read by policymakers. We plan to have a range of products.”

After identifying Uganda’s health needs and coming up with a plan to meet them, Peters is optimistic that Makerere University will expand its capacity to improve health outcomes in Uganda and East Africa.

“So it’s very much ‘Stay tuned,’” Peters said. “We have a lot to learn about what it means to be a change agent.”

Excited with capital E! - White House social secretary is stylish, focused

White House social secretary is stylish, focused. By By Lola Ogunnaike, CNN Entertainment Correspondent
CNN, Feb 08, 2009

WASHINGTON (CNN) -- Every Sunday after an interminable 90 minutes at our family church in Washington, my parents would drive the family (me, baby brother and sis) past the White House as we headed back to our modest home in the suburbs of northern Virginia.

In my younger years, it was the perfect panacea after a morning spent praying and singing hymns about lambs and lepers.

As I grew older and more cynical, I wanted little to do with the White House jaunts. I longed for something a little edgier.

"Can we please drive through Georgetown?" I'd ask, with attitude to spare.

Checking out boutiques like Commander Salamander and Up Against the Wall, with their baggy jeans and Doc Martens boots, had become my idea of a fun-filled Sunday afternoon.

Flash forward more than a decade, and I'm actually making my way into the White House. And to my utter surprise I'm actually excited - excited with a capital E.

By now I've worked as a reporter at the New York Daily News and The New York Times, written for every publication from Rolling Stone to Elle magazine, attended every major event in Manhattan.

None of that was a match for the armed guards, the meticulously manicured grounds, and the 55,000 square feet of space that greeted me as I walked into the White House.

I was there to meet with Desirée Rogers, the White House's first African-American social secretary. As she strode into the room for our interview, I couldn't help but notice her impeccable style and her youthful face. Not a wrinkle on her 49-year-old face. And I was this close.

In articles she has been variously described as no-nonsense and focused. All true. This was her first television interview. Some answers sounded scripted. Others sounded like they could have casually been served over crust-free sandwiches and ice tea.

We talked about the family dog (it will arrive in the spring, she said) and her first days at 1600 Pennsylvania Avenue ("I used to get lost a lot," she said, smiling).

She wants to make the White House accessible to all Americans. Why shouldn't Jane the waitress have a chance to mix it up with Carla Bruni and Nicolas Sarkozy?

After nearly an hour, Rogers and I parted ways. She already has 14 events under her designer belt and she is in the throes of planning dozens more. I left her in her East Wing office to fret over seating charts and stemware.

I asked my colleagues Ethel Bass and Daria Shelton to capture as many magical moments as their digital cameras would hold. For me, the White House will never look the same.

Zurich voters abolish tax breaks for rich foreigners

Zurich voters abolish tax breaks for rich foreigners
February 08, 2009, 20:43 CET

(GENEVA) - Voters in the region of Zurich, the home of Swiss banking, sprang a surprise on Sunday by deciding to abolish tax breaks for rich foreigners living there, including showbusiness and sports stars.

Some 52.9 percent of voters -- more than 216,000 people -- backed an initiative launched by the left-wing Alternative List to abolish "tax privileges for foreign millionaires" in the canton.

It was the first time that the group had won a referendum in Zurich, the home of Switzerland's secretive and rather more conservative banking and finance establishment.

The result obliges cantonal authorities to change local tax laws.

The tax break has helped lure dozens of international sports, entertainment and business celebrities to Switzerland. In Zurich, 137 people benefitted from the deal in 2006, the Swiss news agency ATS reported.

In several cantons, wealthy foreigners have the opportunity to negotiate a confidential tax fee with local authorities based on their expenditure, instead of paying income tax, provided they do not work in Switzerland.

However, the practice has often triggered a storm of controversy in the home countries of some of the celebrities, amid accusations of tax dodging.

Unease has also grown in Switzerland recently, not least because some of their own stars -- such as tennis star Roger Federer -- could not enjoy the same deal.

Famous foreign residents in Zurich have included US singer Tina Turner and Russian oligarch Viktor Vekselberg.

Other celebrities residing in Switzerland last year included a brace of motor racing champions, such as Lewis Hamilton, Fernando Alonso, Kimi Raikonnen, Michael Schumacher and Sebastien Loeb, singers Shania Twain and James Blunt, as well as tycoons.

After arguing that the tax privilege was unfair, the Alternative List said it hoped the outcome would send a signal to the rest of Switzerland.

Bonuses are getting a bad rap, but they're an important and useful part of the financial services industry

Greed Is Good, by Roy C Smith
Wall Street bonuses are getting a bad rap, but they're an important and useful part of the financial services industry. Taking them away could hamper the economic comeback.
WSJ, Feb 07, 2009

Wall Street bonuses are getting a bad rap, but they're an important and useful part of the financial services industry. Taking them away could hamper the economic comeback.
1973 was a terrible year on Wall Street. An unexpected crisis in the Middle East led to a quadrupling of oil prices and a serious global economic recession. The president was in serious trouble with Watergate. The S&P 500 index dropped 50% (after 23 years of rising markets), and much of Wall Street fell deeply into the red. There were no profits, and therefore no bonuses.

I was a 35-year-old, nonpartner investment banker then and was horrified to learn that my annual take-home pay would be limited to my small salary, which accounted for about a quarter of my previous year's income. Fortunately the partners decided to pay a small bonus out of their capital that year to help employees like me get by. The next year was no better. Several colleagues with good prospects left the firm and the industry for good. We learned that strong pay-for-performance compensation incentives could cut both ways.

Many wondered if that was still the case last week, when New York State Comptroller Thomas DiNapoli released an estimate that the "securities industry" paid its New York City employees bonuses of $18 billion in 2008, leading to a public outcry. Lost in the denunciations were the powerful benefits of the bonus system, which helped make the U.S. the global leader in financial services for decades. Bonuses are an important and necessary part of the fast-moving, high-pressure industry, and its employees flourish with strong performance incentives.

There is also a fundamental misunderstanding of how bonuses are paid that is further inflaming public opinion. The system has become more complex than most people know, and involves forms of bonuses that are not entirely discretionary.

The anger at Wall Street only grew at the news that Merrill Lynch, after reporting $15 billion of losses, had rushed to pay $4 billion in bonuses on the eve of its merger with Bank of America. Because Merrill Lynch and Bank of America were receiving substantial government funds to keep them afloat, the subject became part of the public business. The idea that the banks had paid out taxpayers' funds in undeserved bonuses to employees, together with a leaked report of John Thain's spending $1 million to redecorate his office, understandably provoked a blast of public outrage against Wall Street. The issue was so hot that President Barack Obama interrupted his duties to call the bonuses "shameful" and the "height of irresponsibility." Then, on Wednesday, he announced a new set of rules for those seeking "exceptional" assistance from the Troubled Asset Relief Program in the future that would limit cash compensation to $500,000 and restrict severance pay and frills, perks and boondoggles.

In the excitement some of the facts got mixed up. Mr. DiNapoli's estimate included many firms that were not involved with the bailout, and only a few that were. Merrill's actions were approved by its board early in December and consented to by Bank of America. But the basic point is that, despite the dreadful year that Wall Street experienced in 2008, some questionable bonuses were paid to already well-off employees, and that set off the outrage.

Many Americans believe that any bonuses for top executives paid by rescued banks would constitute "excess compensation," a phrase used by Mr. Obama. But no Wall Street CEO taking federal money received a bonus in 2008, and the same was true for most of their senior colleagues. Not only did those responsible receive no bonuses, the value of the stock in their companies paid to them as part of prior-year bonuses dropped by 70% or more, leaving them, collectively, with billions of dollars of unrealized losses.

That's pay for performance, isn't it?

"Wall Street" has always been the quintessential, if ill-defined, symbol of American capitalism. In reality, Wall Street today includes many large banks, investment groups and other institutions, some not even located in the U.S. It has become a euphemism for the global capital markets industry -- one in which the combined market value of all stocks and bonds outstanding in the world topped $140 trillion at the end of 2007. Well less than half of the value of this combined market value is represented by American securities, but American banks lead the world in its origination and distribution. Wall Street is one of America's great export industries.

The market thrives on locating new opportunities, providing innovation and a willingness to take risks. It is also, regrettably, subject to what the economist John Maynard Keynes called "animal spirits," the psychological factors that make markets irrational when going up or down. For example, America has enjoyed a bonus it didn't deserve in its free-wheeling participation in the housing market, before it became a bubble. Despite great efforts by regulators to manage systemic risk, there have been market failures. The causes of the current market failure, which is the real object of the public anger, go well beyond the Wall Street compensation system -- but compensation has been one of them.

The capital-markets industry operates in a very sophisticated and competitive environment, one that responds best to strong performance incentives. People who flourish in this environment are those who want to be paid and advanced based on their individual and their team's performance, and are willing to take the risk that they might be displaced by someone better or that mistakes or downturns may cause them to be laid off or their firms to fail. Indeed, since 1970, 28 major banks or investment banks have failed or been taken up into mergers, and thousands have come and gone into the industry without making much money. Those that have survived the changing fortunes of the industry have done very well -- so well, in fact, that they appear to have become symbolic of greedy and reckless behavior.

The Wall Street compensation system has evolved from the 1970s, when most of the firms were private partnerships, owned by partners who paid out a designated share of the firm's profits to nonpartner employees while dividing up the rest for themselves. The nonpartners had to earn their keep every year, but the partners' percentage ownerships in the firms were also reset every year or two. On the whole, everyone's performance was continuously evaluated and rewarded or penalized. The system provided great incentives to create profits, but also, because the partners' own money was involved, to avoid great risk.

The industry became much more competitive when commercial banks were allowed into it. The competition tended to commoditize the basic fee businesses, and drove firms more deeply into trading. As improving technologies created great arrays of new instruments to be traded, the partnerships went public to gain access to larger funding sources, and to spread out the risks of the business. As they did so, each firm tried to maintain its partnership "culture" and compensation system as best it could, but it was difficult to do so.

In time there was significant erosion of the simple principles of the partnership days. Compensation for top managers followed the trend into excess set by other public companies. Competition for talent made recruitment and retention more difficult and thus tilted negotiating power further in favor of stars. Henry Paulson, when he was CEO of Goldman Sachs, once remarked that Wall Street was like other businesses, where 80% of the profits were provided by 20% of the people, but the 20% changed a lot from year to year and market to market. You had to pay everyone well because you never knew what next year would bring, and because there was always someone trying to poach your best trained people, whom you didn't want to lose even if they were not superstars. Consequently, bonuses in general became more automatic and less tied to superior performance. Compensation became the industry's largest expense, accounting for about 50% of net revenues. Warren Buffett, when he was an investor in Salomon Brothers in the late 1980s, once noted that he wasn't sure why anyone wanted to be an investor in a business where management took out half the revenues before shareholders got anything. But he recently invested $5 billion in Goldman Sachs, so he must have gotten over the problem.

As firms became part of large, conglomerate financial institutions, the sense of being a part of a special cohort of similarly acculturated colleagues was lost, and the performance of shares and options in giant multi-line holding companies rarely correlated with an individual's idea of his own performance over time. Nevertheless, the system as a whole worked reasonably well for years in providing rewards for success and penalties for failures, and still works even in difficult markets such as this one.

At junior levels, bonuses tend to be based on how well the individual is seen to be developing. As employees progress, their compensation is based less on individual performance and more on their role as a manager or team leader. For all professional employees the annual bonus represents a very large amount of the person's take-home pay. At the middle levels, bonuses are set after firm-wide, interdepartmental negotiation sessions that attempt to allocate the firm's compensation pool based on a combination of performance and potential.

Roy C. Smith, a professor of finance at New York University's Stern School of Business, is a former partner of Goldman Sachs.

Iraq combat could outlast Obama's term

Iraq combat could outlast Obama's term, by Mike Allen
Politico, Feb 08, 2009

Thomas E. Ricks, the nation’s best-known defense correspondent, writes in a book out this week that many Iraq veterans believe the U.S. is likely to have “soldiers in combat in Iraq until at least 2015 – which would put us now at about the midpoint of the conflict.”

That would mean American forces would remain in danger past President Obama’s terms, into his second term if he wins reelection or the 45th presidency if he doesn’t.

Ricks, author of the bestselling “Fiasco,” offers that grim forecast in a new book being published Tuesday, “The Gamble: General David Petraeus and the American Military Adventure in Iraq, 2006-2008” (394 pages, The Penguin Press, $27.95).

A member of two Pulitzer Prize-winning teams, Ricks also predicts that President Obama and his generals “eventually will settle on what one Obama adviser calls ‘a sustainable presence’ – and that that smaller force will be in Iraq for many years.”

On NBC’s “Meet the Press on Sunday, Ricks told moderator David Gregory that “a lot of people back here incorrectly think the war is over.”

“What I say in this book is that we may be only halfway through this thing,” Ricks said. “This year we're in now, '09, is going to be, I think, a, a surprisingly tough year. You've got a series of elections in Iraq. Meanwhile, you've got American troops declining. … We're doing the easy troop withdrawals now, but down the road you start taking them out of areas that aren't so secure, that aren't so safe, that you're, that you're worried about.

“So they're going to be holding national elections in Iraq just when we have fewer troops there. And finally, none of the basic problems that the surge was meant to solve have been solved. All of the basic issues facing Iraq are still there.”

The Washington Post is running two days of excerpts under the rubric “The Generals’ Insurgency.” Sunday’s first installment starred Army Gen. Roy Odierno, who in September succeeded Petraeus as the top U.S. commander in Iraq, and formerly oversaw day-to-day operations under Petraeus.

The book is supposed to be under a strict sales embargo, but Politico obtained a copy at a Washington-area bookstore on Saturday night.

Here are conversation-driving excerpts that did not appear in The Post:

--“THE LONG WAR … No matter how the U.S. war in Iraq ends, it appears that today we may be only halfway through it. That is, the quiet consensus emerging among many people who have served in Iraq is that we likely will have American soldiers in combat in Iraq until at least 2015 – which would put us now at about the midpoint of the conflict. … In other words, the events for which the Iraq war will be remembered probably have not yet happened.”

--“Even as security improved in Iraq in 2008, I found myself consistently saddened by the war, not just by its obvious costs to Iraqis and Americans, but also by the incompetence and profligacy with which the Bush administration conducted it. Yet I also came to believe that we can’t leave. … [A] smaller but long-term U.S. military presence is probably the best case scenario. … Nor, at the end of many more years of struggle, is the outcome likely to be something Americans recognize as victory.”

--“A FRAYED MILITARY … The last few years have seen soldiers burning out after repeated tours of duty in the war, with high rates of posttraumatic stress disorder among combat veterans. Rates of suicide and divorce have been increasing. Officers and sergeants are leaving in greater numbers. … The quality of recruits also has been dropping … The Army could be quite unforgiving of the missteps of younger soldiers, but enormously understanding when it came to much larger mistakes by generals. Captains were subjected to rigorous after-action reviews, but generals, inexplicably, were treated with kid gloves.”

--“OBAMA’S WAR (Fall 2008) … Just before the election, Odierno said in my interview with him that one of the points he would make to the new president would be ‘the importance of us leaving with honor and justice. … For the military it’s extremely important because of all the sacrifice and time and, in fact, how we’ve all adjusted and adapted.’ … Like Clinton, Obama also would face the prospect of a de facto alliance between the military and congressional Republicans to stop him from making any major changes. My bet is that Obama and his generals eventually will settle on what one Obama adviser calls ‘a sustainable presence’ – and that that smaller force will be in Iraq for many years.”

--“[A] major destabilizing factor in Iraq in 2009 will be the smaller size of the American military presence. Counterintuitively, the effects of drawing down troops will become more pronounced with the passage of time. … As more soldiers are withdrawn and the U.S. presence falls below pre-surge levels, the pullouts will become riskier. … In sum, the first year of Obama’s war promises to be tougher for America’s leaders and military than was the last year of Bush’s war.”

--“OBAMA IN IRAQ … He arrived in late July … [I]n this meeting, according to two participants, [Obama and Petraeus] concentrated on their differences – at least when Obama was permitted to interrupt the lecture. … Obama made it clear that his job as president would be to look at the larger picture – an assertion that likely insulted Petraeus, who justly prides himself on his ability to do just that. … Obama left people in Iraq with the sense he would be flexible and consider conditions on the ground and would be able to adjust his 16-month timetable if he saw the need.”

In Defense of Thailand's Democracy

In Defense of Thailand's Democracy, by Walter Lohman
Heritage, February 6, 2009

Over the last couple of months, one of America's two treaty allies in Southeast Asia turned the page on a period of intense political instability. And it did so democratically. Americans should take a moment to acknowledge Thailand as a member in good standing of the democratic club that is America's system of alliances in East Asia and the Pacific.


Reminders of an Undemocratic, Unstable Past

The most recent chapter of Thai political history began a little more than two years ago. On September 19, 2006, the military staged a coup to unseat and essentially exile Thailand's elected prime minister, Thaksin Shinawatra. Despite 14 years of uninterrupted democratic governance, global perceptions of a Thailand beset with chronic political instability quickly returned.

The unelected military-backed government exacerbated negative perceptions by mangling the Thai economy. And where the new government was widely expected to outperform the previous administration--dealing with the southern Islamist insurgency--it failed.

Then, at the end of 2007, after absorbing a coup, suffering under a year of inept government, and approving a new constitution designed to deflate the powers of the prime minister, new elections returned to government proxies for Thaksin and his disbanded Thai Rak Thai Party (TRT). Thailand appeared to pick up right where it left off in September 2006: Political strife dominated 2008; two prime ministers were forced from power; protests escalated to the point of shutting down Bangkok's airports; and the economy dragged through the year.


A Welcome Turn of Events

As 2008 drew to a close, pressure for another coup grew. But then something positive happened: Democracy provided a channel for government to change hands. Was the transfer of power pretty? No. Did it involve political trade-offs? Certainly. But expediency--as well as opacity--in democratic politics is a matter of degree, not kind.

In a parliamentary system, legitimate change in government is possible without proximate appeal to general elections. The Democrat party pulled enough sitting MPs away from the latest iteration of a Thaksin-based party and its coalition partners to form a new government under the leadership of opposition leader Abhisit Vejjajiva.

Critics point to the messiness of the process and nefarious connections among Thai royalty, military, politicians, bureaucrats, and judges. Political intrigue makes for good copy. But in an environment as prone to rumor as Bangkok, and with so much at stake, it is important to separate out the facts.

First, it is a matter of public record that army commander General Anupong Paochinda urged the prime minister to resign. Second, it is a fact that in October, the queen attended the funeral of a protester killed in a clash with police. Both were very powerful gestures in Thai politics. But they do not amount to a coup. Nor do they explain the formation of the new Democrat government, or the Democrats' victories in subsequent by-elections. Disillusionment with the Thaksin-proxies in the electorate and factional cracks in his party base were already present and growing; pulling them apart did not require a mastermind general.

In 2006, the United States was right to insist that Thailand return to democratic rule as quickly as possible. Even when some argued that the United States's geopolitical position in the region would suffer as a result of the pressure--China being all the willing to step into the gap--the Bush Administration remained focused on the longer term. It suspended more than $29 million in assistance to Thailand, including financing for military hardware and training for Thai officers. At the same time, however, the Administration maintained regular diplomatic contact with the Thais and preserved some of the most critical areas of the relationship, including military exercises and vital counterterrorism cooperation.

In 2006, the Thai military unwisely aborted a political process that would have eventually resolved the crisis without intervention. There are a great many variables involved in comparing September 2006 with December 2008: Thaksin's role, the bungling of his military appointed successors, a new constitution, a changing electorate, and civil society fatigue. But, essentially, the events of the last few months in Thailand prove that coup is not an inevitable feature of Thai politics and that democracy is stability's partner, not its enemy.


The Road Ahead

The Thai Democrat Party has a considerable amount of work to do. The new prime minister must find a way to reach across the political spectrum in Bangkok and elsewhere to heal the yawning divide. The perception that his ascension to power is purely the product of political maneuvering is refutable, but it will prove corrosive over time. There is also a significant element of anti-democratic class exceptionalism among the forces that brought him to power. And there is resistance outside of Bangkok to his Oxford-educated persona. He will have to take both issues head-on. But ultimately these are matters for Thais to resolve.

Indeed, Americans have their own work to do. Thailand was a key ally of the United States during the Cold War. Thais by the thousands fought side by side with Americans in Korea and in Vietnam. Thailand also contributed non-combat troops to the American-led coalitions in Iraq and Afghanistan and has served as a critical logistics node in the movement of American forces around the globe.

But the Thais, as much as any power in the region, pay close attention to geopolitical trends. During World War II, Thai Prime Minister and strongman Phibunsongkhram famously asked one of his commanders, "Which side do you think will lose this war? That side is our enemy." And he began to hedge his early bets on the Japanese.

Today it is China's rise that is the most striking fact of life in East Asia. And its rise is not unwelcome in Thailand. This is not necessarily a bad thing: China is an important economic partner for both the U.S. and its Asia-Pacific allies. America cannot ask our allies to recuse themselves from the opportunity China offers any more than it can refrain from reaping the benefits itself.

What the United States can do, however, is be absolutely clear about its long-term commitment to the region. It should intensify its economic engagement, not retreat from it. This means embracing free trade agreements. The proposed Free Trade Area of the Asia Pacific now has a core around which to develop--the Trans-Pacific Economic Partnership (TPP)--free trade negotiations underway between eight Asia-Pacific Economic Cooperation member economies. A bilateral U.S.-Thai free-trade agreement was left on the table in 2006. America should dust it off and get negotiations moving again with an eye toward not only completing a first-rate agreement but including the Thais in the broader TPP.

On the diplomatic, military side, the U.S. should make clear that it has no intention of compromising its predominance in Asia. Such clarity demands a level of defense spending that will belie Asian suspicions of an American superpower in decline. It also means participating in the region's diplomatic life. This year's Association of Southeast Asian Nations (ASEAN) Regional Forum is being held in Thailand. Prior to the last few years, the U.S. secretary of state's attendance was a given. Once again becoming a reliable ASEAN participant in the year America's Thai allies host will be well-noted in the region. President Obama should also resurrect plans for a full-fledged U.S.-ASEAN leaders' summit, an idea abruptly cancelled by President Bush in 2007, and schedule it in Thailand during this year's ASEAN leaders' meetings.


Reinforcing the Alliance

America's allies are the foundation of its commitment to Asia. These allies make policy formulation easier when they stay true to their democratic values. When one of the allies strays, the U.S. should help bring it back to its senses, as President Bush sought to do with Thailand. By the same token, when one demonstrates a commitment to the alliance's mutual values, America should use the occasion to reinforce the relationship. It is good to have Thailand in the club.

Walter Lohman is Director of the Asian Studies Center at The Heritage Foundation.

Odierno Challenged the Military Establishment, Pressing for More Troops and a Long-Term Strategy to Guide Them

The Dissenter Who Changed the War. By Thomas E. Ricks
As the No. 2 Commander in Iraq, Raymond Odierno Challenged the Military Establishment, Pressing for More Troops and a Long-Term Strategy to Guide Them
The Washington Post, Sunday, February 8, 2009; Page A01

Full set or articles w/key documents here

Army Gen. Raymond T. Odierno was an unlikely dissident, with little in his past to suggest that he would buck his superiors and push the U.S. military in radically new directions.

A 1976 West Point graduate and veteran of the Persian Gulf War and the Kosovo campaign, Odierno had earned a reputation as the best of the Army's conventional thinkers -- intelligent and ambitious, but focused on using the tools in front of him rather than discovering new and unexpected ones. That image was only reinforced during his first tour in Iraq after the U.S. invasion in 2003.

As commander of the 4th Infantry Division in the Sunni Triangle, Odierno led troops known for their sometimes heavy-handed tactics, kicking in doors and rounding up thousands of Iraqi "MAMs" (military-age males). He finished his tour believing the fight was going well. "I thought we had beaten this thing," he would later recall.

Sent back to Iraq in 2006 as second in command of U.S. forces, under orders to begin the withdrawal of American troops and shift fighting responsibilities to the Iraqis, Odierno found a situation that he recalled as "fairly desperate, frankly."

So that fall, he became the lone senior officer in the active-duty military to advocate a buildup of American troops in Iraq, a strategy rejected by the full chain of command above him, including Gen. George W. Casey Jr., then the top commander in Iraq and Odierno's immediate superior.

Communicating almost daily by phone with retired Gen. Jack Keane, an influential former Army vice chief of staff and his most important ally in Washington, Odierno launched a guerrilla campaign for a change in direction in Iraq, conducting his own strategic review and bypassing his superiors to talk through Keane to White House staff members and key figures in the military. It would prove one of the most audacious moves of the Iraq war, and one that eventually reversed almost every tenet of U.S. strategy.

Just over two years ago, President George W. Bush announced that he was ordering a "surge" of U.S. forces. But that was only part of what amounted to a major change in the mission of American troops, in which many of the traditional methods employed by Odierno and other U.S. commanders in the early years of the war were discarded in favor of tactics based on the very different doctrine of counterinsurgency warfare.

Now, President Obama, an opponent of the war and later the surge, must deal with the consequences of the surge's success -- an Iraq that looks to be on the mend, with U.S. casualties so reduced that commanders talk about keeping tens of thousands of soldiers there for many years to come.

The most prominent advocates of maintaining that commitment are the two generals who implemented the surge and changed the direction of the war: Odierno and David H. Petraeus, who replaced Casey in 2007 as the top U.S. commander in Iraq and became the figure most identified with the new strategy. But if Petraeus, now the head of U.S. Central Command, was the public face of the troop buildup, he was only its adoptive parent. It was Odierno, since September the U.S. commander in Iraq, who was the surge's true father.

In arguing for an increase in U.S. forces in Iraq, Odierno went up against the collective powers at the top of the military establishment. As late as December 2006, Marine Gen. Peter Pace, then chairman of the Joint Chiefs of Staff, was privately telling his colleagues that he didn't see that 160,000 U.S. troops in Iraq could do anything that 140,000 weren't doing. The month before, Army Gen. John P. Abizaid, then head of Central Command, told a Senate hearing that he and every general he had asked opposed sending more U.S. forces to Iraq. "I do not believe that more American troops right now is the solution to the problem," Abizaid emphasized.

This account of the military's internal struggle over the direction of the Iraq war is based on dozens of interviews with Odierno, Petraeus and other U.S. officials conducted in 2007 and 2008. In many cases, the interviews were embargoed for use until 2009.

Odierno's role has not been previously reported, and he remains a controversial figure because of his first tour in Iraq, when the tactics he employed violated many of the counterinsurgency principles he would later embrace.

Retired Army Col. Stuart Herrington, a veteran intelligence officer, concluded that the approach that many U.S. commanders used in the early days of the Iraq war effectively made them recruiters for the insurgency, and he was especially bothered by the actions of Odierno's division. "Some divisions are conducting operations with rigorous detention criteria, while some -- the 4th ID is the negative example -- are sweeping up large numbers of people and dumping them at the door of Abu Ghraib," Herrington wrote in a 2003 report to Brig. Gen. Barbara Fast, the top Army intelligence officer in Iraq.

Odierno was determined to operate differently on his second tour of duty, but he will not talk about how his transformation occurred. "I think everyone's changed," he said, brushing aside the question in one of a series of interviews in Iraq over the past two years. "We've all learned."

But one impetus, Odierno agreed, was the severe wounding of his son in August 2004. Lt. Anthony Odierno, then in the 1st Cavalry Division, had been leading a patrol near Baghdad's airport when a rocket-propelled grenade punched through the door of his Humvee, severing his left arm.

"It didn't affect me as a military officer, I mean that," Odierno said one evening in Baghdad much later. "It affected me as a person. I hold no grudges. My son and I talked a lot about this. He was doing what he wanted to do, and liked what he was doing."

But he said it did deepen his determination. "I was going to see this through -- I felt an obligation to see this through. That drives me, frankly. I feel an obligation to mothers and fathers. Maybe I understand it better because it happened to me."

The most important factor in his change in thinking, however, was probably his growing belief, as he prepared to redeploy to Iraq, that the United States was heading toward defeat.

'THE STRATEGY HAS GOT TO CHANGE'
The General Fears That His Commanders' Plan Will Lead to Failure.

As the newly designated second in command in Iraq, Odierno was given a clear understanding of the scenario that Bush, Defense Secretary Donald H. Rumsfeld and his military superiors expected to play out: The United States would begin drawing down its forces in Iraq, cutting the number of combat troops in 2007 by as much as a third.

His responsibilities were equally clear: moving U.S. forces outside all major cities and establishing a handful of bigger bases along key roads leading into Iraq, deploying U.S. forces to the country's borders to limit outside influence, speeding up the transition to Iraqi security forces, and letting Iraqis handle fighting in the cities.

But the more the general and his team considered this plan, they less they liked it. They feared that it got ahead of the Iraqis' ability to do the job and thus, in keeping with the American pattern in Iraq since 2003, was likely to amount to one more rush to failure.

Odierno was "very nervous" about the course of U.S. strategy, he recalled. He decided to formally oppose any additional troop cuts. He wasn't even thinking about an increase, because, he said, "I didn't think I could get more."

He and a small group of advisers decided on a course almost the opposite of the plan given them. Instead of moving out of the cities, they would deploy more forces into them. Instead of consolidating their base structure, they would establish scores of smaller outposts. Nor would they withdraw to the borders. And most emphatically, they would slow, not accelerate, the transition to Iraqi forces.

Odierno realized that to take all those steps, he would need more troops -- and before long, it was clear to subordinates that Odierno was at odds with Casey, his commanding officer. "Casey fought it all the way," recalled Brig. Gen. Joe Anderson, then Odierno's chief of staff.

In an interview last year, Casey seemed puzzled when told that Odierno had grave doubts about the direction of the war back in late 2006. "Ray never came to me and said, 'Look, I think you've got to do something fundamentally different here,' " he said.

But to their subordinates, the disagreement was obvious. "We would backbrief one general and get one set of guidances, and then brief the other and get a different set," remembered a senior Army planner in Iraq.

In Washington, Keane had his own doubts about U.S. policy and was not shy about expressing them. More influential in retirement than most generals in active service, he allied himself with Odierno, advising him to ask for five new brigades. But when Odierno raised that number with Casey, his commander dismissed the notion. "He said, 'You can do it with two brigades,' " Odierno recalled. "I said, 'I don't know.' "

Plotting with Odierno, Keane bypassed the Pentagon and called the White House, which he had already been lobbying for a troop surge. "Just think about what's going to happen," he told national security adviser Stephen J. Hadley. "You are not going to be effective in bringing down the violence with only two additional brigades, therefore you will call for an additional brigade three separate times, each time because we do not have sufficient troops. The media will be all over you for failing three more times. Meanwhile, the president is going to bite this bullet; he should only bite it once. He shouldn't bite it one time and then three more times."

Throughout that fall, Keane recalled, he had "a continuous dialogue" with Odierno. "He knows he needs more troops; he knows the strategy has got to change. His problem is General Casey."

In Baghdad, Odierno tasked his planners with considering how they would use the additional troops. "We have to secure the population, first thing," he told them. "We have to get back out into Baghdad."

They thought they really needed about eight brigades, but they knew that no more than five would be possible and that it would take months to get them all to Iraq.

The Joint Chiefs backed Casey. But after the Democratic victory in that November's congressional elections, Bush fired Rumsfeld, replacing him with former CIA director Robert M. Gates, who brought a skeptical view of how the Iraq war had been managed. And on Dec. 19, the day after Gates was sworn in, Bush acknowledged that "we're not winning, we're not losing" in Iraq -- a striking turnaround from his previously positive formulations.

Shortly thereafter, Gates and Pace, the Joint Chiefs head, left for Iraq. In Baghdad they met with Abizaid of Central Command, Casey and Odierno. The first two generals were at loggerheads with Odierno, the newer, younger and junior officer pushing hard for more troops. Gates listened without indicating which way he was leaning.

Gates later had breakfast with some young soldiers. "Never mind all the generals standing around," he began, according to a tape recording of the meeting, which reporters did not attend. He found far more agreement in the ranks on the need for more manpower.

On the long flight home to Washington in a C-17 military cargo jet, Gates, who declined to be interviewed for this article, disappeared into his mobile home in the plane's belly with Pace and a bottle of California cabernet sauvignon. A few days later, Odierno got the word: Gates wants you to have all five brigades.

"The surge really began the day that Gates visited," Odierno later concluded.

'DON'T TRY TO DO TOO MUCH'
The Military Transforms Its Mind-Set Along With Its Tactics.

Once it was decided that the troop buildup would have five brigades, Odierno laid down some key principles to his planners and commanders.

First, the strategy wouldn't be just about Baghdad -- a decision influenced by heeding the experience of former Iraqi leader Saddam Hussein's generals. American analysts, studying Hussein's deployment of Republican Guard troops in 2002 and 2003 west and south of the capital, had assumed that the move was made to reduce the ability of commanders to launch a coup. No, the Iraqi generals told them: The elite troops were kept there, rather than in Baghdad, because that was where the trouble was.

So while the first two American brigades of the surge went into the capital, the next three went mainly into areas around the city. Ultimately, the surge forces were divided about evenly between Baghdad and its outskirts.

The second principle, Odierno said: Don't make a move unless your presence is sustainable, and once you take an area, don't leave it uncovered. "Don't give up terrain," he ordered his commanders. "Don't try to do too much." This tactical patience was consistent with the Army's new counterinsurgency manual and the thinking of its author, who arrived in Baghdad in February as Odierno's commanding officer.

Odierno and Petraeus made an odd pair: Odierno, at 6 feet 5 inches and 245 pounds, is eight inches taller and 90 pounds heavier than Petraeus. Odierno's most noticeable physical trait is his bulk topped by his bald, bulletlike head. Petraeus is small and slightly buck-toothed. The nimble Petraeus is as much a diplomat as a soldier, while the hulking Odierno always seemed inclined to use firepower. Odierno is emotional, the type of general who will bear-hug a colonel having a hard day. Petraeus is cool to the point of being remote.

During their first tours, in 2003-2004, the two generals commanded divisions in adjacent areas -- Odierno with the 4th Infantry Division headquartered in Tikrit, and Petraeus with the 101st Airborne north of him in Mosul. But they had run their divisions very differently, with Odierno inclined to use the closed fist and Petraeus the open hand.

The guidance Odierno gave his subordinates during his second tour underscored just how much he had changed. His "key message" at one meeting, according to an internal Army summary, was that "planners must understand the environment and develop plans from an environmental perspective [instead of] an enemy situation perspective."

This was classic counterinsurgency thinking, almost the opposite of the strategy that Odierno and most of the Army had taken in Iraq in 2003-2004, when they emphasized a kill-and-capture approach.

"General Odierno has experienced an awakening," said Herrington, the retired intelligence officer who in 2003 wrote the report highly critical of the general. "I've now completely revised my impression of him."

The change in tactics and the increase in troops were not the only reasons that the security situation in Iraq would improve in the following months. By the time the surge began, the ethnic cleansing by Shiite militias had largely been completed. In addition, Moqtada al-Sadr, the anti-American Shiite cleric, declared a cease-fire later in 2007. Most important, Petraeus that year decided to put large parts of the Sunni insurgency on the U.S. payroll, essentially paying them to stop fighting.

In a recent interview, Odierno expressed surprise that a book by The Washington Post's Bob Woodward, published just as Odierno took command in Iraq, credited White House aides and others in Washington with developing the surge. From Odierno's perspective -- and that of many other senior officers in Iraq -- the new strategy had been more or less conceived and executed by himself in Baghdad, with some crucial coaching from Keane in Washington.

"We thought we needed it, and we asked for it and we got it," he said, referring to the strategy. "You know, General Petraeus and I think . . . I did it here, [and] he picked it up. That's how we see it. And so it's very interesting when people back there see it very differently."

Of course, Odierno said, ultimately Bush had to make the policy decision, and some White House aides encouraged that step. But, he continued, "they had nothing to do with developing" the way it was done. "Where to go, what [the soldiers] would do. I mean, I know I made all those decisions."

Odierno's focus is now the future -- and trying to influence the decisions of the new administration.

While he believes the surge has achieved some important tactical success, Odierno appeared uncertain of its long-term impact, specifically whether the improved security has created the breathing space for Iraqi leaders to foster reconciliation among the nation's warring factions -- the strategy's long-term political goal.

As 2008 proceeded, not only were some top Iraqi officials not seizing the opportunity, some were regressing, Odierno worried one day last November as he sat in the Green Zone office he had inherited from Petraeus.

"What we're finding is that as Iraq has become more secure, they've . . . moved backwards, in some cases, to their hard-line positions, whether it be a Kurdish position, an Arab position, a Sunni position, a Shi'a position, a Da'wa position, an ISCI position" -- the last two being the major Shiite parties.

Obama is likely to find Odierno and other generals arguing passionately that to come close to meeting his commitment to keeping U.S. troops safe, keeping Iraq edging toward stability and maintaining the pressure on extremists, he will need a relatively large force to remain in Iraq for may years.

When asked what sort of U.S. military presence he expected in Iraq around 2014 or 2015 -- well after Obama's first term -- Odierno said, "I would like to see a . . . force probably around 30,000 or so, 35,000," with many troops training Iraqi forces and others conducting combat operations against al-Qaeda in Iraq and its allies.

One of the points he would stress to the new commander in chief, Odierno said, would be "the importance of us leaving with honor and justice. "

"For the military, he added, "it's extremely important because of all the sacrifice and time and, in fact, how we've all adjusted and adapted."

In WaPo: New Powers for Obama's National Security Council

New Powers for Obama's National Security Council, by Karen DeYoung
Agency headed by former Marine Gen. James L. Jones to expand and increase role in setting policy across spectrum of foreign and domestic issues.
Sunday, February 8, 2009; Page A01

President Obama plans to order a sweeping overhaul of the National Security Council, expanding its membership and increasing its authority to set strategy across a wide spectrum of international and domestic issues.

The result will be a "dramatically different" NSC from that of the Bush administration or any of its predecessors since the forum was established after World War II to advise the president on diplomatic and military matters, according to national security adviser James L. Jones, who described the changes in an interview. "The world that we live in has changed so dramatically in this decade that organizations that were created to meet a certain set of criteria no longer are terribly useful," he said.

Jones, a retired Marine general, made it clear that he will run the process and be the primary conduit of national security advice to Obama, eliminating the "back channels" that at times in the Bush administration allowed Cabinet secretaries and the vice president's office to unilaterally influence and make policy out of view of the others.

"We're not always going to agree on everything," Jones said, and "so it's my job to make sure that minority opinion is represented" to the president. "But if at the end of the day he turns to me and says, 'Well, what do you think, Jones?,' I'm going to tell him what I think."

The new structure, to be outlined in a presidential directive and a detailed implementation document by Jones, will expand the NSC's reach far beyond the range of traditional foreign policy issues and turn it into a much more elastic body, with Cabinet and departmental seats at the table -- historically occupied only by the secretaries of defense and state -- determined on an issue-by-issue basis. Jones said the directive will probably be completed this week.

"The whole concept of what constitutes the membership of the national security community -- which, historically has been, let's face it, the Defense Department, the NSC itself and a little bit of the State Department, to the exclusion perhaps of the Energy Department, Commerce Department and Treasury, all the law enforcement agencies, the Drug Enforcement Administration, all of those things -- especially in the moment we're currently in, has got to embrace a broader membership," he said.

New NSC directorates will deal with such department-spanning 21st-century issues as cybersecurity, energy, climate change, nation-building and infrastructure. Many of the functions of the Homeland Security Council, established as a separate White House entity by President Bush after the terrorist attacks of Sept. 11, 2001, may be subsumed into the expanded NSC, although it is still undetermined whether elements of the HSC will remain as a separate body within the White House.

Over the next 50 days, John O. Brennan, a CIA veteran who serves as presidential adviser for counterterrorism and homeland security and is Jones's deputy, will review options for the homeland council, including its responsibility for preparing for and responding to natural and terrorism-related domestic disasters. In a separate interview, Brennan described his task as a "systems engineering challenge" to avoid overlap with the new NSC while ensuring that "homeland security matters, broadly defined, are going to get the attention they need from the White House."

Organizational maps within the government will be redrawn to ensure that all departments and agencies take the same regional approach to the world, Jones said. The State Department, for example, considers Afghanistan, Pakistan and India together as South Asia, while the Pentagon draws a line at the Pakistan-India border, with the former under the Central Command and the latter part of the Pacific Command. Israel is part of the military's European Command, but the rest of the Middle East falls under Central Command; the State Department combines Israel and the Arab countries surrounding it in its Near East Bureau.

"We are going to reflect in the NSC all the regions of the world along some map line we can all agree on," Jones said.

The national security process, he said, will also be "transparent to its clients" inside the administration, with meeting agendas and outcomes made available to "the whole community" in real time. Each department will appoint someone to monitor the NSC process, enabling senior officials across the government to be ready to jump into issues without steep learning curves.

Directorates inside Jones's NSC staff will oversee implementation of decisions. "It doesn't mean that we micromanage or supervise," he said. "But you have to make sure, . . . particularly if it's a presidential decision, that the president is kept abreast of how things are going. That it doesn't just fall off the end of the table and disappear into outer space."

Most modern chief executives have issued an early directive outlining a structure for making national security decisions. Although the 1947 National Security Act created the NSC and listed its membership -- including the president, the vice president, and the secretaries of state and defense -- each president has redefined it to fit his own needs and style. In recent administrations, the CIA director, the chairman of the Joint Chiefs of Staff and at times the Treasury secretary have regularly attended principals meetings. At the same time, the role and power of the president's national security adviser, and the size of his staff, have grown larger or smaller depending on the president's wishes.

But initial presidential intentions have often been waylaid by personalities and events. George W. Bush criticized Bill Clinton's NSC style as rambling and indecisive. Over the next eight years, however -- as first-term Bush adviser Condoleezza Rice was outmaneuvered by Vice President Richard B. Cheney and Defense Secretary Donald H. Rumsfeld and as Bush's second term became mired in an unpopular war and a failing economy -- decision-making quickly became more reactive than strategic, and deliberations were opaque to all but a small inner circle.

The Obama administration -- with powerful figures such as Secretary of State Hillary Rodham Clinton and Defense Secretary Robert M. Gates -- appears crowded at the top of the national security pyramid and heavy with military officials, including Jones himself and retired Navy Adm. Dennis C. Blair as director of national intelligence. Special envoys to trouble spots -- former diplomat Richard C. Holbrooke to Afghanistan and Pakistan, and former senator George J. Mitchell to the Middle East -- have been given broad presidential authority.

Although Jones said he strongly supports increased resources for the State Department, which is increasingly dwarfed by the size and expanding missions of the Defense Department, he has long been an outspoken proponent of a "pro-active military" in noncombat regions. He has advocated military collaboration with the oil and gas industry and with nongovernmental organizations abroad.

But Jones said he sees an administration filled with colleagues rather than competitors. Since Jan. 20, "I've had more meetings with the secretary of state and the secretary of defense than I've had in my entire lifetime," said Jones, who served as Marine Corps commandant, NATO military chief and, under Bush, a special Middle East envoy.

During a midafternoon interview last Thursday, Jones said he had already spoken face to face with Gates and had four telephone conversations with him that day. He has set up a standing Wednesday morning meeting with Gates and Clinton together in his office.

"I believe in collegiality . . . in sounding out people and getting them to participate," Jones said. "I notice the president is very good at that." But he made clear he plans to apply military-like discipline to the NSC. "The most important thing is that you are in fact the coordinator and you're the guy around which the meetings occur. When we chair a principals meeting, I'm the chairman." One of the first of many internal Bush administration clashes occurred when Cheney proposed that he, rather than Rice, chair NSC meetings.

In his initial conversations with Obama before taking the job, Jones confirmed, he insisted on being "in charge" and having open and final access to the president on all national security matters. "We engaged in about an hour-long discussion about what I was already thinking about the NSC; it happened, I think, to mesh pretty well with what his instincts were. He was clear about the role of the national security adviser," Jones said of Obama.

The NSC will take on all national security matters that are strategic in nature and "of such importance that the president of the United States would care" about them, he said. Action groups from various departments and agencies will be formed around specific issues for as long as it takes to resolve them. "Some of these things will be very short-term. When the problem goes away, the group goes away." Others will be ongoing. "An Afghan strategic review, that's going to take a while," Jones said. "The policy that is generated from that review, and the implementation, is going to take a while."

Some principals will be regulars at the NSC "just by force of issues," he said, and "you can't just designate the whole government as being there." But everyone should be kept aware of "what's going on" and given an opportunity to say, 'Wait a minute, I've got something to say here.' "

Back on World Stage, a Larger-Than-Life Holbrooke

Back on World Stage, a Larger-Than-Life Holbrooke. By Jodi Kantor
TNYT, February 7, 2009

Stashed in a drawer in his Manhattan apartment between snapshots of family vacations, a photograph shows Richard C. Holbrooke on a private visit to Afghanistan in 2006. He is mugging atop an abandoned Russian tank, flashing a sardonic V-for-victory sign and his best Nixon-style grin. The pose is a little like Mr. Holbrooke himself: looming, theatrical, passionate, indignant.

Three years later, he has inherited responsibility for the terrain he surveyed from that tank. As President Obama’s special representative to Afghanistan and Pakistan, Mr. Holbrooke will help reformulate and carry out American policy in what many call the most problematic region on earth.

Between them, the two countries contain unstable governments, insurgencies, corruption and a narcotics trade, nuclear material, refugees, resentment of American power, a resurgent Taliban, and in the shadows of the tribal region that joins the two countries, Al Qaeda and presumably Osama bin Laden.

“You have a problem that is larger than life,” said Christopher R. Hill, a longtime colleague expected to be named as the new ambassador to Iraq. “To deal with it you need someone who’s larger than life.”

Few other diplomats can boast of the accomplishments of Mr. Holbrooke, 67, who negotiated the Dayton peace accords to end the war in Bosnia. But as he lands in Pakistan on Monday, back on duty after eight years of a Republican administration, he is still an outsider in the Obama circle, having only recently developed a relationship with the new president. His longtime foreign policy pupil, Hillary Rodham Clinton, has the secretary of state job he has always wanted. And he has taken on a task so difficult that merely averting disaster may be the only triumph.

“We are still in the process of digging our way into the debris,” Mr. Holbrooke said in an interview. “We’ve inherited an extraordinarily dysfunctional situation in which the very objectives have to be reviewed.” Mr. Obama and Mrs. Clinton chose Mr. Holbrooke because of his ability to twist arms as well as hold hands, work closely with the military and improvise inventive solutions to what others write off as insoluble problems. But no one yet knows how his often pyrotechnical style — he whispers, but also pesters, bluffs, threatens, stages fits and publicizes — will work in an administration that prizes low-key competence or in a region that is dangerously unstable.

“Richard C. Holbrooke is the diplomatic equivalent of a hydrogen bomb,” said Strobe Talbott, a former deputy secretary of state and a friend.


Return to Washington

Already, Mr. Holbrooke’s return to Washington has caused tremors. His arrival at the State Department has rattled colleagues who remember him as someone who cultivates the powerful and tramples those with less to offer. Others worry about his assiduous courtship of the media. Judging from interviews with several officials, there seems to be confusion about whether the American Embassies in Pakistan and Afghanistan will be controlled by Mr. Holbrooke or the regular State Department overseers.

And even friends acknowledge that Mr. Holbrooke is intently focused on his own legend. (Many people have personal trainers; Mr. Holbrooke has a personal archivist.)

For now, Mr. Holbrooke is both raising expectations and lowering them. He is talking about Afpak — Washington shorthand for his assignment — as his last and toughest mission. But along with the rest of Mr. Obama’s foreign policy staff, he is also trying to redefine success in the region, shifting away from former President Bush’s grand, transformative goals and toward something more achievable.

On Monday, Mr. Holbrooke begins a 10-day tour of the region, where he will try to vacuum up as much information as possible, he said, visiting high-level officials and local ones, women who serve in the Afghan National Assembly, military bases, nongovernmental organizations, antinarcotics programs, refugee camps and the perilous tribal region.

There is a reason for this wide-ranging tour: because official Afghan and Pakistani leaders are seen as weak, Mr. Holbrooke may have to seek alternative partners, a task to which he is naturally suited, according to Wesley K. Clark, the retired Army general.

“Richard Holbrooke sees power the way an artist sees color,” General Clark said.


Studying Afghanistan

Until a few years ago, Mr. Holbrooke had been to Afghanistan exactly once: in 1971, when he wandered around with a backpack, he said in the interview last week as he frowned at television reports of a kidnapping in Pakistan. The setting of the interview, Perseus LLC, a Manhattan private equity firm where he worked as vice chairman until recently, was an elegant one, at least until he began clipping his fingernails with office shears.

During the Bush years, Perseus was Mr. Holbrooke’s base, providing him with what friends say was a relatively undemanding job and lavish compensation as he bounced from topic to topic, almost as if seeking a problem tough enough to rivet all of his attention. He founded the American Academy in Berlin, which promotes cultural relations, and used a formerly quiet nonprofit called the Global Business Coalition to match corporate leaders with public health issues. He became chairman of the Asia Society, an institution mostly known for art exhibits, and pushed it toward more policy discussions.

At night, he retreated to his softly lighted, wood-paneled apartment in the Beresford, the grand Central Park West building, or to the homes in Colorado or the Hamptons that he shares with his wife, Kati Marton, a journalist and human rights advocate.

But with a Republican president, Mr. Holbrooke’s nose was pressed to the glass of the statecraft window. On the morning of the Sept. 11 attacks, when the greatest foreign policy challenge in generations came crashing into his own city, Mr. Holbrooke, the former American ambassador to the United Nations, sat in traffic like any other New Yorker.

Few New Yorkers, though, decide to inspect Afghanistan for themselves. By 2006, alarmed at the deteriorating conditions there and lured by a relative working for the United Nations, Mr. Holbrooke traveled privately around the country, returning for another visit in 2008. He went to a police training center in Herat, near the Iranian border, where he watched retired policemen from Alabama try to train Afghans. In Khost, Mr. Holbrooke slept on a cot at a reconstruction project office and met with madrasa students and former Taliban fighters, pouring the tea himself to convey respect, according to Kael Weston, a State Department political officer who served as his guide.

At another stop, Mr. Holbrooke met with newly elected female leaders who barely seemed to know the basics of legislation. Everywhere, Mr. Holbrooke passed enormous new villas built by narcotics smugglers.

At a maximum-security prison north of Kabul, the capital, Mr. Holbrooke fell into a long conversation with a senior Taliban operative, a mullah who patiently answered questions and then asked one of his own:

“When will you and the Americans be leaving?”

Mr. Holbrooke told him he did not know. “The more you think about it, the more it highlights the dilemma,” he said in the interview: the United States cannot say it is leaving, nor can it say it is staying forever.

At home, Mr. Holbrooke used the Asia Society to assemble his own personal think tank on Afghanistan. The group, which included Gen. James L. Jones until he became national security adviser, will soon release a study recommending that the United States declare an end to President Bush’s “war on terror” and negotiate with Taliban members willing to separate from Al Qaeda. Mr. Holbrooke has now left the group, but thanks to him, some of the regional experts who wrote the study are now briefing Mrs. Clinton.


Cultivating the Powerful

Every December, Mrs. Clinton can be found in Mr. Holbrooke and Ms. Marton’s apartment, laughing through an annual dinner they throw in her honor. The guests and the entertainment have varied — Glenn Close has sung carols, Robert De Niro and Matt Damon have sat alongside business figures and writers, and one of the tamer toasters called Mrs. Clinton the nation’s “first shiksa,” or gentile. But Mr. Holbrooke and Ms. Marton always give Mrs. Clinton fulsome toasts of their own.

From the beginning of her Senate career, Mr. Holbrooke served as a foreign policy adviser to Mrs. Clinton, contributing ideas for major speeches and weighing in on crises. Sometimes, Mrs. Clinton or her staff reached out to him, aides said. But Mr. Holbrooke was not exactly shy about calling or sending e-mail messages on his own. The moment the Democratic primaries ended, Obama aides say, Mr. Holbrooke showered them with ideas as well.
“I did not cross the DMZ until a cease-fire was declared,” he now says jokingly.

By the time Mr. Obama sat down for a sustained conversation with Mr. Holbrooke, he was president-elect, and Mrs. Clinton was already the leading candidate for secretary of state. Once she took the job, Mr. Holbrooke was considered for the deputy post, but the idea was quickly rejected: he was a negotiator, not an administrator, and the secretary and the president wanted to put a powerful person in charge of dealings with Afghanistan and Pakistan, State Department officials said.

“Richard represents the kind of robust, persistent, determined diplomacy the president intends to pursue,” Mrs. Clinton said in an interview. “I admire deeply his ability to shoulder the most vexing and difficult challenges.”

Thanks to Mr. Holbrooke’s negotiating skills, he won himself an unusual title: representative rather than envoy, meaning that his responsibilities extend beyond the State Department and that he will report to the president, but through Mrs. Clinton. It is a bit of Washingtonese whose precise meaning will become clear only with time.

His first task is to help lead a total review of American policy in the region, an assignment on which Mr. Obama has imposed a 60-day deadline. Another is to learn as much about Pakistan as Mr. Holbrooke has about Afghanistan; he is hiring staff members to fill some of the gaps in his knowledge, according to colleagues.

Asked about Mr. Holbrooke’s sometimes overbearing qualities, Mrs. Clinton replied with mock innocence. “Gee, I’d never heard that he could be any of those things before,” she said. Then she turned serious. “Occasionally he has to be, you know, brought down to earth and reined in.”
Ms. Marton, in defending her hard-driving husband, said, “Richard is all about outcome.” She described him and the new president as “kindred spirits” in their views on diplomacy in Afghanistan and Pakistan.

Both Ms. Marton and Mr. Holbrooke sounded relieved, even a little surprised, that he found a place in the Obama administration. Now, she said, “he won’t be able to look back and say he didn’t get a shot.”

Conservative Views: Obama’s SG Pick Elena Kagan—Establishment Clause

Obama’s SG Pick Elena Kagan—Establishment Clause. By Ed Whelan
Bench Memos/NRO, Saturday, February 07, 2009

Last month, I discussed (here and here) SG nominee Elena Kagan’s vigorous opposition to the Solomon Amendment and the extremist rhetoric (“a profound wrong—a moral injustice of the first order”) she deployed against the Don’t Ask, Don’t Tell law.

I’d now like to call attention to a memo (dated October 22, 1987) that Kagan wrote as a law clerk to Justice Thurgood Marshall in the case of Bowen v. Kendrick. As Kagan’s memo explains, at issue in that case was the Adolescent Family Life Act, which authorized federal funds to support demonstration projects designed to discourage adolescent pregnancy and to provide care for pregnant adolescents. AFLA specifically contemplated that “religious organizations” could receive funds under the Act. The district court ruled that the inclusion of religious organizations violated the Establishment Clause.

In her memo to Justice Marshall, Kagan agrees with the district court’s Establishment Clause ruling and adds this remarkable explanation (underlining in original; italics added):

The funding here is to be used to support projects designed to discourage
adolescent pregnancy and to provide care for pregnant adolescents. It
would be difficult for any religious organization to participate in such
projects without injecting some kind of religious teaching.… [W]hen the
government funding is to be used for projects so close to the central concerns
of religion, all religious organizations should be off limits.

The italicized sentences reflect a bizarre understanding of religious organizations. How is it that it “would be difficult for any religious organization to participate in [projects designed to discourage adolescent pregnancy and to provide care for pregnant adolescents] without injecting some kind of religious teaching”? Kagan offers no explanation. Either she had a remarkably narrow understanding of how many religious organizations operate, or she had a remarkably expansive view of what counts as “religious teaching”.

It’s also strange that Kagan, in the context of Establishment Clause concerns, would label projects designed to discourage adolescent pregnancy and to provide care for pregnant adolescents “so close to the central concerns of religion”. How do such projects in the abstract (apart from any particular concerns that could arise in their application) remotely raise genuine Establishment Clause concerns?

In (very limited) defense of Kagan, the aggressive and reflexive secularism that her comments reflect was part of a liberal orthodoxy on the Establishment Clause that had much greater currency in the mid-1980s than it does now.

President Obama purports to have grand plans for his faith-based office. If Kagan’s current Establishment Clause views are anything like they were two decades ago, they ought to set off alarm bells for those who recognize that the Establishment Clause should not be misused to discriminate against religious organizations.

Barney Frank: TARP's compensation curbs could be extended to all businesses

Barney Frank: TARP's comp curbs could be extended to all businesses. By Neil Roland
Would be part of broader bill limiting hedge funds, credit-raters, and mortgage securitizers; 'deeply rooted anger'
Financial Week, February 3, 2009 3:01 PM ET

Congress will consider legislation to extend some of the curbs on executive pay that now apply only to those banks receiving federal assistance, House Financial Services Committee Chairman Barney Frank said.

“There’s deeply rooted anger on the part of the average American,” the Massachusetts Democrat said at a Washington news conference today.

He said the compensation restrictions would apply to all financial institutions and might be extended to include all U.S. companies.

The provision will be part of a broader package that would likely give the Federal Reserve the authority to monitor systemic risk in the economy and to shut down financial institutions that face too much exposure, Mr. Frank said.

Also included in the legislation: registration requirements for hedge funds and proposals aimed at curbing conflicts of interest at credit-rating agencies such as Standard & Poor’s.

The bill, which the committee is working on in consultation with the Obama administration, also will require financial institutions that bundle mortgages into securities to share in potential losses. This would give banks and mortgage-specialists an incentive not to make bad loans, he said. Institutions that securitize loans improperly will incur tougher penalties.

“There have been too few constraints on major financial institutions incurring far more liability than they could handle,” Mr. Frank said.

The committee hopes to have a general outline of the legislation by early April, he said. It will be the panel’s first priority in its effort to restructure financial regulation in the wake of the worst economic crisis since the Great Depression.

Mr. Frank has summoned the CEOs of Citigroup, J.P. Morgan Chase and the seven other U.S. financial firms that got $125 billion from TARP to testify at a Feb. 11 committee hearing.

Mr. Frank seems to be in synch with the Obama administration in his plans for executive compensation.

Treasury Secretary Timothy Geithner said last month that he might try to extend to all U.S. companies a restriction that prohibits bailout banks from taking a tax deduction of more than $500,000 in pay for each executive.

The Troubled Assets Relief Program legislation enacted in October seeks to give companies receiving aid under the $700 billion bailout a number of incentives to curb what it calls excessive executive pay.

Mr. Geithner said he would consider “extending at least some of the TARP provisions and features of the $500,000 cap to U.S. companies generally.”

Under the legislation, banks receiving bailout money must limit golden parachute payments to senior executives to no more than three times the executives’ base pay. The companies also must subject any bonuses or incentives to clawbacks if the payouts are based on bank’s misleading financial statements.

In addition, bailout recipients can’t offer top managers incentives that “encourage unnecessary excessive risks that threaten the value of the financial institution.”

These limits apply to the chief executive officer, chief financial officer and the next three most highly compensated executives in a bank receiving rescue funds.

Mr. Frank said provisions on golden parachute payments and bonus clawbacks would probably be in the legislation, though he declined to provide more detail because “we’re early in the process.”

A congressional oversight panel headed by Harvard Law professor Elizabeth Warren also recommended last week that Treasury consider revoking executive bonuses at failed institutions getting federal aid.

Currently, these institutions must subject bonuses to clawbacks only if the payouts are based on banks’ misleading financial statements.

The top Republican on the committee, Spencer Bachus of Alabama, said last month he has reservations about giving the Fed new powers, such as the authority to monitor systemic risk.

Mr. Frank said today that after lawmakers address issues on systemic risk, they will consider how to bolster investor protection via changes at the Securities and Exchange Commission. The committee also will review proposals to assist struggling homeowners and expand the housing supply, and to strengthen international financial institutions such as the World Bank, he said.

Federal president's weekly address

Compromise
White House, Saturday, February 7th, 2009 at 5:00 am

There was bad news and then there was good news.

Yesterday we learned that in January, the country suffered its largest one-month job loss in 34 years.

But last night, the Senate struck a compromise on the economic recovery plan and put us on our way to giving the economy the short-term jolt and long-term investments it needs.

"Americans across this country are struggling, and they are watching to see if we're equal to the task before us," the President says in this morning's Weekly Address. "Let's show them that we are."

Watch the President's address and read the full text here.

Industry views: EPA Decision to Move Towards Costly Regulations Disappointing

EPA Decision to Move Towards Costly Regulations Disappointing
IER, Feb 06, 2009

Washington, DC – Institute for Energy Research (IER) President Thomas J. Pyle today issued the following statement on the Obama Administration’s decision to move forward in the process to allow California to designate its own emissions standards for automobiles, which will force the American auto industry to take on massive new cost and compliance burdens and likely raise car and truck costs for consumers across the country:

“It is disappointing that the Obama Administration chose to move towards imposing this regulation—which basically creates a $3,000 car tax—at a time when our nation faces record unemployment, a struggling auto industry, and a troubled economy. Only a few months ago, taxpayers sent billions of their hard-earned and much-needed money to bail out the auto industry. That investment will surely be a waste if we allow Sacramento to set the standards for Detroit’s business plan.

“Alarmingly, there is no real evidence to support claims that the heightened emissions standards will even affect the environment. In fact, if all cars and trucks in the United States met this standard today, emissions increases from the rest of the world would more than replace those California reduced within a mere five months. Now is not the time to hike costs for consumers and hurt our auto industry to attempt a proposal that probably won’t meet its goals.”

NOTE: The Environmental Protection Agency (EPA) today began the legal process required to green light California’s request to create its own emissions standards for automobiles. The Auto Alliance has estimated that the mandate will add up to $3,000 to the cost of each car and will cause the auto industry to slip further behind the technological curve as it struggles to adjust to California’s choices, rather than taking much-needed steps to meet the imperatives of customer choice.

Does SCHIP Work?

Does SCHIP Work? By Michael F. Cannon
Obama wants to expand the program, but eliminating it would be best for all involved.
NRO, February 02, 2009, 4:00 a.m.

Pres. Barack Obama proclaimed in his inaugural address, “The question we ask today is not whether our government is too big or too small, but whether it works.” If he was serious, he should veto the $115 billion expansion of the State Children’s Health Insurance Program that is soon to reach his desk—and insist that Congress eliminate the program entirely.

For two years, SCHIP has been mired in an ideological standoff. Republicans described the Democrats’ proposed expansions—which were more moderate than those in the current bill—as “socialized medicine.” SCHIP supporters, like Nobel Prize-winning economist Paul Krugman and columnist E.J. Dionne, claim the program works.

Researchers who actually study the program find that SCHIP does help uninsured children find coverage, but at great expense. They find no evidence that SCHIP actually improves health outcomes, or that the program addresses the systemic quality problems that confront even insured children.

SCHIP’s great expense stems from the fact that in many cases, it simply enrolls children who were already insured privately. Economists Jonathan Gruber and Kosali Simon estimate that out of every ten children added to the SCHIP rolls, six already had private coverage. Only in government is a program deemed to “work” when it covers four uninsured children for the price of ten.

The current proposal will only exacerbate this problem. Congressional Democrats want to expand SCHIP to children in families of four earning up to $80,000 per year. The Congressional Budget Office reports that 77 percent of such children already have private health insurance.

In terms of actually improving health outcomes, SCHIP looks even worse. Economist Robert Kaestner and his colleagues conclude, “The proposition that health insurance is the cure for adverse health outcomes among poor and near-poor children has not been adequately demonstrated.” About SCHIP specifically, they write, “It is remarkable that there is so little empirical evidence to support so large an expenditure.”

Economists Helen Levy and David Meltzer write that there is “no evidence” that SCHIP and similar programs are a cost-effective way of improving children's health. They observe that targeted health programs, policies that increase incomes, or even improved educational opportunities could deliver greater health improvements per dollar spent.

It’s not even clear that SCHIP’s method for improving children's health—expanding insurance coverage—is the right one. The New England Journal of Medicine reports large gaps between the quality of care children receive and what they should receive, even if the children have insurance. That study’s authors conclude, “Expansion of access to care through insurance coverage, which is the focus of national health care policy related to children, will not, by itself, eliminate the deficits in the quality of care.”

One thing SCHIP does accomplish is to discourage work. SCHIP and similar programs create enormous disincentives to climb the economic ladder. A single mother of two earning minimum wage in New Mexico who increased her earnings by $30,000 would find no change in her net income: She would pay an additional $4,000 in taxes and lose $26,000 in SCHIP and other government benefits, according to data compiled by the Urban Institute for the federal government.

Expanding SCHIP would pull even more families into that low-wage trap. Since income is an important determinant of health outcomes, expanding SCHIP could actually harm many children’s health.

The one positive thing that can be said of SCHIP is that, for all the inefficiencies and perverse incentives it creates, it does insure some children who wouldn’t have had coverage otherwise. But oddly enough, eliminating SCHIP could have this effect to an even greater degree.

When Congress eliminated Medicaid benefits for non-citizen immigrants in 1996, opponents predicted an explosion in the number of uninsured immigrants. But according to Harvard economist George Borjas, that didn’t happen: Immigrants sought out jobs that provided benefits, and were so successful that the employer-provided insurance completely offset the loss in government benefits. In fact, in the states that offered the fewest benefits, the immigrant insurance rate rose.

SCHIP families, which are more affluent than the families affected by the 1996 policy, would likely fare even better.

If President Obama wants to cover more uninsured children, he should set ideology aside and repeal SCHIP. After all, you can’t argue with what works.

Michael F. Cannon is director of health-policy studies at the Cato Institute and co-author of Healthy Competition: What’s Holding Back Health Care and How to Free It.

State Dept on Russian Bases in Georgia

Russian Bases in Georgia, by Robert Wood, Acting Department Spokesman
US State Dept, Washington, DC, Fri, 06 Feb 2009 17:36:46 -0600

The United States regrets the Russian Federation’s expressed intention to establish bases in the territory of Georgia as contrary to the spirit and the letter of Russia’s existing commitments. These Russian plans include a naval base at the port of Ochamchire, army bases in the Abkhazia and South Ossetia regions of Georgia, and the possible deployment of combat aircraft.

Under the August 12 and September 8 ceasefire agreements between Georgia and Russia, mediated by the French EU Presidency, Russia committed to return its forces to their pre-war numbers and locations in South Ossetia and Abkhazia. This latest announced build-up of the Russian Federation’s military presence in the Georgian regions of Abkhazia and South Ossetia without the consent of the Georgian Government would clearly violate that commitment. Implementation of these basing plans would also violate Georgia’s sovereignty and territorial integrity, to which Russia repeatedly committed itself in numerous United Nations Security Council resolutions.

The U.S. urges Russia to respect Georgia’s sovereignty and territorial integrity and facilitate stability in the region through implementation of its commitments and participation in the Geneva Process.

PRN: 2009/110