I Endorse Barack Obama for President

Keywords: , , , , , , , , , ,

I take an unusual step today, I realize. A number of my friends, family, and closest associates will no doubt disown me. Rush Limbaugh will probably never mention RedState again. But I have to endorse Barack Obama for President.

I owe Barack Obama an endorsement. The campaign Barack Obama has run this far has earned him my admiration. While I’ve criticized people like Doug Kmiec for supporting Obama, I have seen the light.

I, Erick-Woods Erickson, do this day endorse Barack Obama for President. He has done all I have asked and now I should do at least one thing he asks and give him my support.

Please do read on . . .

When I beat up Obama for failing to repudiate Rev. Wright, Obama threw him under the bus.

When I punched Obama for telling the Teamsters he’d let them out of federal supervision, he backed down on that through a statement “clarification.”

After I questioned Obama’s patriotism because of his lack of a flag lapel pin, he put one on.

After harassing Obama for saying Iran was no threat, he willingly changed his mind and decided Iran is, in fact, a serious threat.

When Obama opened his mouth and lied about his family connection to the holocaust, he clarified again. Never mind that he’s told several different groups several different variations — he still attempted to do what I thought he needed to do.

When I bullied Obama over not going to Iraq with John McCain, his campaign decided he might just go.

Heck, I even picked on Barry for his “unilateral meetings with rogue nations” and Barry graciously nuanced his way out of it.

Then there’s the other stuff like his fully transparent campaign. He harassed John McCain for being secretive like the Bushies, I punched back, and Obama released just one page on his medical history so we couldn’t see that he actually has health problems due to his continued smoking. Likewise, he won’t even release his birth certificate to prove he really is an American citizen. I love that he’s willing to let this story and the whole “closet Muslim” story fester rather than be transparent like he claims he is. That just helps me out! And it signals that he really is just like the other guys; never mind the marketing.

Oh, and now after I demanded he throw Jim Johnson under the bus, Barry Obama does just that.

I love this guy. Everything I ask him to do, he does. Sure, sometimes I have to bop him on the nose, but just cause he’s into S&M doesn’t mean he’s not my type of guy.

Hell, look at John McCain. People attack him over supporting the surge and he does not cave. Those of us on the right beat him up over believing in that global warming crap and he will not yield to us. We wanted him to support the Bush tax cuts and he refused. And he does not apologize for it! The nerve of that guy.

Some people call that leadership. I call it stubbornness. Contrast John McCain’s stubborn refusal to do as I say when I say with Barry’s willingness to cave faster than a Taliban member with an F/A-18 over head.*

I have to endorse Barry Obama. Thus far he’s done nothing but signal his willingness to be my gimp. And me likey that!

*Note to the libs: this is a play on the word “cave” not a play on the word “Hussein”.

I take an unusual step today, I realize. A number of my friends, family, and closest associates will no doubt disown me. Rush Limbaugh will probably never mention RedState again. But I have to endorse Barack Obama for President. I owe Barack Obama an endorsement. The campaign Barack Obama has run this far has earned him my admiration. While I've criticized people like Doug ... Read More

Coburn Places A Hold On HIV/AIDS Prevention Bill

Keywords: , , , , , ,

The Senate has introduced a bipartisan bill tripling funding for President Bush’s program to fight HIV/AIDS. The $50 billion budget over five years would go toward the President’s Emergency Plan for AIDS Relief (PEPFAR), which is set to expire in September.
The legislation, however, is being held up by Sen. Tom Coburn (R-OK) and […]

The Senate has introduced a bipartisan bill tripling funding for President Bush’s program to fight HIV/AIDS. The $50 billion budget over five years would go toward the President’s Emergency Plan for AIDS Relief (PEPFAR), which is set to expire in September. The legislation, however, is being held up by Sen. Tom Coburn (R-OK) and six other conservative senators who object to the fact that the program would direct most of the spending on the “prevention” of HIV/AIDS, rather than just “treatment.” ... Read More

Interview with Zaid Ibrahim

Keywords: , , ,

Leaving Malaysia tomorrow. I got to go down to Malacca today, about 2 hours south of Kuala Lumpur, and have a bunch of photos from that below. Yesterday, we were able to interview Zaid Ibrahim, the Minister in the Prime Minister’s Department in charge of legal affairs and judicial reform. He was previously a prominent reformer whom was critical of Prime Minister Badawi, and was brought on with a mandate to reform the Malaysian judiciary system, following the March elections. He is the author of “In Good Faith” which I was able to read portions of before the interview. In the book, he presents Malaysia as unique among the countries in promoting a pluralistic democracy, while being a muslim-majority nation. I asked him a question about the two forces that he wrote about, globalization and religious extremism, that were the obstacles of Malaysia in keeping their pluralistic democracy together, and what the current landscape looked like in that regards, for Malaysia currently.

In regards to religious extremism, thought the March elections weree encouraging in that regard, as the many different religious & ethnic groups came together, albeit in opposition to the ruling coalition, and put aside religious differences in favor of a common goal.

So the question was raised, whether Malaysian politics is transitioning, from a race-based to a class-based political coalitions. Zaid didn’t see it that way, replying that “there’s a lot more to it than that.” Rather, that the economic situation was still relatively good in Malaysia, and that the driving force behind the defeat was a public desire for reform of the corruption & nepotism in the country. Alongside more transparency, he thought that the government would then win back the popular support.

Enter his role, which is to reform the judiciary system of Malaysia. I asked him what that meant, in terms of defining a success, and how long a time-frame he thought it would take. He replied that there needed to be more of a transparent criteria of selecting judges, and whom then write laws that are more sound to interpretation. It seemed rather vague, and I got the sense that the reform was more about getting rid of the current system that’s based on patronage and replace it with one based on good governance. He was reluctant to give a time from, but then mentioned “give us six months” and you’ll be able to see the results of the reform.

I don’t have a good enough sense of the political landscape to know if the mandate of reform that PM Badawi has instituted is actually the agenda of the populace that voted against the ruling party in March, or if this agenda of reform something that Badawi had been stalled in doing previously, in 2004, that he’s now taken on as an opportunity to finish the job.

Here’s a slideshow from the flickr page of some photos that I’ve taken while here in Malaysia.

About half of the photos are taken in Malacca, which is about 2 hours south of Kuala Lumpur. You really get a sense of the diversity in Malaysia, in this old city. Walking along one of the streets, we passed a Chinese temple, then a Hindu temple, a Mosque and then a Buddhist temple. What a place.

Tags: Malaysia, Zaid Ibrahim (all tags)

Leaving Malaysia tomorrow. I got to go down to Malacca today, about 2 hours south of Kuala Lumpur, and have a bunch of photos from that below. Yesterday, we were able to interview Zaid Ibrahim, the Minister in the Prime Minister's Department in charge of legal affairs and judicial reform. He was previously a prominent reformer whom was critical of Prime Minister Badawi, and was brought on with a mandate to reform the Malaysian judiciary system, following the March elections. He is ... Read More

Roy Blunt’s Chart: Democrat vs. Republican Energy Policies

Keywords: , , ,

Promoted by Dan McLaughlin.

<img src=”http://img364.imageshack.us/img364/2530/gaschart1ra7.jpg”

Huge H/T to John Hinderaker at Power line for this and the footnote from Roy Blunt’s office:

Methodology: Retail gasoline prices are the result of literally hundreds of factors including crude oil supply, global demand, refinery capacity, regulation, taxes, weather, the value of the dollar, etc. Therefore it is impossible to say with certainty what one individual action will do to the overall price. However, based on what we know about the impact of crude oil supply and prices it is possible to develop some potential ranges of impact on gasoline prices for certain policy changes. For example, using the methodology employed by Speaker Pelosi and House Democrats that suspending shipments into the Strategic Petroleum Reserve (between 40-77,000 barrels of oil a day) would reduce gas prices by at least 5 cents, bringing ANWR online (at least one million barrels of oil a day) could impact gasoline prices by between 70 cents and $1.60.

Boom!

Cross posted from The Minority Report by special request from Gamecock

Promoted by Dan McLaughlin. <img src="http://img364.imageshack.us/img364/2530/gaschart1ra7.jpg" Huge H/T to John Hinderaker at Power line for this and the footnote from Roy Blunt's office: Methodology: Retail gasoline prices are the result of literally hundreds of factors including crude oil supply, global demand, refinery capacity, regulation, taxes, weather, the value of the dollar, etc. Therefore it is impossible to say with certainty what one individual action will do to the overall price. However, based on what we know about the impact of crude oil supply and prices ... Read More

The peace agreements between Pakistan and the Taliban (that you probably haven’t heard of)

Keywords: , , , , , , , , ,

An Erstwhile “Ally” in the War on Terror Sells its Soul for Thirty Pieces of Silver and an Agreement its Enemies will Never Live up to

On February 17, the Pakistani government and the Taliban jointly signed a peace treaty dealing with the North Waziristan region of the Afghan/Pakistani border area (see graphic at right, and click for more detailed map). The agreement was shrouded in secrecy, with its terms being kept under wraps by both parties.

This weekend, a Pakistani news organization, the Daily Times, managed to obtain a copy of the agreement, which they roughly outlined on their web site.

They report that the agreement, “inked between the government and the Utmanzai tribes on February 17 to fight Taliban-linked militancy through support from the local population,” contains the following terms:

  • • Sharing the agreement’s contents with the media violates the terms laid down in the document [Auth. note: There is no information available yet as to how this leaking of the peace agreement to the Daily Times will affect the overall agreement, given this requirement]
  • • “Al Qaeda-linked militants” are allowed to live in North Waziristan “as long as they pledge to remain peaceful”
  • • “All foreigners” are required to “leave the area”
  • • No “parallel government of suspected Taliban militants” will be tolerated
  • • There will be “no attacks on security personnel or government employees” and no “target killings” will be “initiated” [Auth. note: The Daily Times points out that “suspected Taliban militants continue to blow up CD shops in Miranshah and target killings have continued despite the February 17 peace deal”]
  • • Any violator of the peace accord will be fined 50 million Pakistani Rupees [Auth. note: Approximately U.S. $742,000]

Read on.

Apparently as part of this agreement, Pakistan released Sufi Mohammed, a senior Taliban leader with ties to Pakistani and Afghan Taliban who had been in custody since 2002.

Not the First (Nor the Last) Pakistan-Taliban Agreement

This is not the first time Pakistan has entered into an agreement with Taliban leaders and related militants in the name of “peace”; rather, it is simply the most recent attempt by the Pakistani government to buy off the al Qaeda and Taliban legions who have spent the last three years conquering northwest Pakistan and turning it into a lawless realm over which they hold sway and in which they can operate unmolested by legal authorities.

Two years ago, a cease-fire was declared between Pakistan and the Taliban — and, as War on Terror and Counterterrorism experts Bill Roggio and Daveed Gartenstein-Ross wrote in The Weekly Standard, the Taliban has “violated each of the conditions” of those “now-infamous September 2006 Waziristan accords.” They continue:

It used the ceasefire as an opportunity to erect a parallel system of government complete with sharia courts, taxation, recruiting offices, and its own police force. Al Qaeda in turn benefited from the Taliban’s expansion, building what U.S. intelligence estimates as 29 training camps in North and South Waziristan alone.

As Roggio, writing in The Long War Journal, pointed out in his initial report of the contents of the 2008 Waziristan treaty (the first time the story was reported in America):

The agreement does not mention existing al Qaeda and Taliban terror training camps or the ending of cross-border attacks into Pakistan.

The Taliban established a shadow government after the 2006 peace agreement, and by all accounts it remains in place. The Taliban runs recruiting offices, courts, and jails, taxes the population, and maintains security forces. The Taliban and al Qaeda are known to run 29 training camps in North and South Waziristan.

A similar agreement, between the Pakistani government and the tribal leaders of South Waziristan is reportedly nearing completion and is expected to be signed any day now.

This second truce, which would ostensibly prohibit the Taliban from harboring foreign terrorists, attacking government or military personnel, or hindering the movement of aid workers (all concessions which, as Roggio pointed out, Taliban leaders have ignored in the past), would be accompanied by a complete withdrawal of Pakistani troops from the area, the release of several Pakistani soldiers being held by the Taliban, and the release of several Taliban prisoners currently in Pakistani custody.

A Longstanding Unwillingness to Consistently Oppose Terror

Pakistan’s ebbing will to take on those terrorists who threaten both its leaders and its institutions — not to mention the stability of its northwestern neighbor, which currently faces its best chance at a peaceful future in decades — is and should be a matter of concern to America, her allies, and others who stand to benefit from success in this key front in the War on Terror.

Thanks in part to the Pakistani government’s longstanding unwillingness to consistently deal aggressively with the Taliban’s encroachment into their NW border territory, the former Afghan ruling party and its terrorist allies have, for several years now, had a haven to which they can retreat and in which they can regroup and rebuild while planning and preparing offensives and attacks against the coalition in Afghanistan and against governments and countries farther away.

According to Owais Ahmed Ghani, the Governor of Pakistan’s Northwest Frontier Province, the lack of outside threats, combined with a growing income from the opium poppy trade (which is being successfully stemmed in much of the rest of Afghanistan), has provided the Taliban leadership in South Waziristan the time and income to be able to spend at least $45 million — and possibly as much as $100 million or more — per year “procuring weapons, equipment, vehicles, treating wounded militants and keeping families of killed militants fed” (though the vast majority goes toward the former three, rather than the latter two). The 9/11 Commission estimated that al Qaeda was spending $30 million per year on weapons and supplies prior to the Sept. 11, 2001 attacks that spurred the U.S. into overt action against global terrorism.

According to the recent NATO report entitled “Progress in Afghanistan” (.pdf), the “broad international effort to help Afghanistan build a more stable and secure future is achievable, and it is being achieved.” Unfortunately, work toward that achievement has had to be done in spite of an ever-growing lack of cooperation from the country in the best geographic position to most effectively bolster or undermine the coalition’s efforts to establish a successful Afghanistan. The more Pakistan pleads and negotiates from a position of weakness with terrorist organizations that are threatening, the more it reinforces its own vulnerability to the tactics of terror.

Giving in to those who threaten or perpetrate violence does not buy long-term peace, stability, or security; rather, it teaches those doing the threatening that their tactics are effective, and that their actions will be rewarded with concessions and pleas for “peace.”

A “Need to Eliminate the Insurgents’ Support Base in Pakistan”

Pakistan has gone from a generally respectable ally in the War on Terror to, over time, a full-blown enabler of al Qaeda and Taliban activity. A study released June 9 by the RAND Corp. entitled “Counterinsurgency in Afghanistan” (.pdf) stated that coalition “success in Afghanistan hinges on three factors,” one of which is the need of “the United States and other international actors need to eliminate the insurgents’ support base in Pakistan.”

The report continues:

The failure to do so will cripple long-term efforts to stabilize and rebuild Afghanistan.

Every successful insurgency in Afghanistan since 1979 enjoyed a sanctuary in Pakistan and assistance from individuals within the Pakistan government, such as the Frontier Corps and the Inter-Services Intelligence Directorate (ISI).

According to the RAND study, “There is some indication that individuals within the Pakistan government…were involved in assisting insurgent groups. Solving this problem will require a difficult political and diplomatic feat: convincing the government of Pakistan to undermine the sanctuary on its soil.” (emphasis added)

Far from moving in this positive direction, the repeated offerings of peace and concession being made by Prime Minister Yousaf Razza Gillani and the Pakistani government to the Taliban leaders of the Northwest Frontier Province are not only making Pakistan itself a more dangerous place, but are providing key members of one of the world’s most prolific terrorist networks the time, space, and resources to continue planning and executing attacks on both small and large scales.

Replicating the Conditions that Allowed al Qaeda to Flourish in Afghanistan pre-9/11

The conditions al Qaeda enjoyed in the Taliban’s Afghanistan in the years and months leading up to the massive attacks of September 11, 2001 are now being replicated in Waziristan, courtesy of a Pakistani government that would rather cave in to terrorists for the purpose of being able to claim agreement to a fleeting, ephemeral respite from attack, rather than actually stand up to those same terrorists and do what is necessary to put a dent in terrorism worldwide, while simultaneously achieving a lasting peace in the region.

Whatever contributions they may have made to the initial effort in Afghanistan and elsewhere in the Global War on Terror — halting as they were, given Pervez Musharraf’s overarching concern for the security of his own power rather than for that of his nation or its allies — Pakistan can no longer be considered an ally in the ongoing fight to rebuild and secure Afghanistan, nor in the effort to defeat global terror networks for the purpose of protecting America and her allies from terrorist attack.

Whatever effort was being made by the Pakistani government to deal with the terrorist and insurgent threat growing once again under its very nose, according to the RAND report:

became more challenging with the rise of an insurgency in Pakistan by a range of militant groups, members of which assassinated Pakistani opposition leader Benazir Bhutto and conducted brazen attacks against the Pakistan army, ISI, and officials from other government agencies.

Militants from Pakistan’s border areas were also linked to a range of international terrorist attacks and plots, such as the July 2005 attacks on London’s mass transit system, the foiled 2006 plot against transatlantic commercial aircraft flights, foiled plots in 2007 in Germany and Denmark, and the 2008 arrests of terrorist suspects in Spain.

The Executive Summary of the NATO report on progress in Afghanistan concludes by saying, “Of course, real challenges remain, and this will be a long-term effort.” That statement is absolutely correct.

Unfortunately, Pakistan — a country which needed a strong showing in the War on Terror if for no other reason than to make amends for its past culpability in the proliferation of nuclear weapons and technology to such rogue states as North Korea and Libya — can no longer be counted on to assist that effort in any significant capacity.

An Erstwhile "Ally" in the War on Terror Sells its Soul for Thirty Pieces of Silver and an Agreement its Enemies will Never Live up to On February 17, the Pakistani government and the Taliban jointly signed a peace treaty dealing with the North Waziristan region of the Afghan/Pakistani border area (see graphic at right, and click for more detailed map). The agreement was shrouded in secrecy, with its terms being kept under wraps by both parties. This weekend, a Pakistani news organization, ... Read More

Convince Me

Keywords: , , , , , , , , ,

I had some fun yesterday, kicking over the anthill that is the Obama cult, and my, how the little critters are still furious about it. This is one reason I can’t be a Democrat; the people in that party appear for the most part to be driven only by emotion. Sure, it makes sense to care about the issues and your candidate of choice, but there really should be rational, logical reasons for your positions. And frankly, the Left seems to hate the very idea of defending its positions with logic and evidence. Take Global Warming, for instance. I agree that we humans must be responsible for the materials we use, and to be accountable for the effect our actions have on other people and living things. But accepting radical demands simply because they are couched in the ‘we can’t wait to prove our case’ arguments of Global Warming advocates is not rational, especially when there is reason to suspect hidden agenda and ulterior motives. Global Warming is an unproven theory, to say nothing of the claims that man’s actions cause it or can stop it. The Kyoto Treaty stands out as a particularly deceitful and hypocritical example of the thinking, punishing the US while excusing, even rewarding third-world nations and places like China, whose actions are - using the logic of the Left - far more contributory to pollution and Global Warming. A reasonable person could well wonder why we should even be concerned with Carbon Dioxide, known to be beneficial to most plants and inert to humans except in levels on concentration impossible to find in Nature, especially when we could and to my mind should focus on real pollution from particulates and known carcinogens. And that is merely one of the more obvious examples.

Economics is another arena where Leftist demands run into brick walls of Reality. Take the recent hike in the minimum wage, an artificial creation of Congress which does nothing to increase the economy’s effectiveness, but is merely another mechanism for wealth redistribution. The money to pay for the increased minimum comes from the businesses which pay employees, businesses which for the most part are sole proprietorships or small partnerships, that is businesses already running on tight margins which cannot afford to have their expenses increased simply because Congress wanted to do so. So they did what they had to do, they cut positions to make ends meet and this raised the unemployment rate. This is the same logic that adding a half-dollar tax on your gas would be a good idea, but if you look on the side of the pump the next time you fill up, you will see that the government thought that was a great idea, as well. The Left does not understand Economics, and certainly never considers the law of unintended consequences.

- continued -

This brings us back to the Left’s poster boy for President; a guy whose experience is so thin that he barely got started in his first year as a Senator before he started running for President. A guy who boasted about his superior judgment, but who has had to admit that he did not really understand the character and nature of some of his closest associates. His mentor, Jeremiah Wright, has been exposed as an America-hating racist, yet Obama called this man his mentor and his closest advisor for years. Obama was a close acquaintance of Billy Ayers, even declared his candidacy from Ayer’s house, but now it turns out that Ayers was not only a member of the infamous ‘Weatherman’ terrorist group in the 1960s, he still holds the same values he did then. We find that Obama made deals with his fund-raiser Antoin Rezko, at least before Mr. Rezko got himself indicted and convicted for fraud and corruption. The list goes on much further, but you get the idea … Obama’s associates were and are as dirty as those we once saw surrounding Richard Nixon. Different party, but the same game.

So, convince me guys. What is the rational argument for electing Obama? What empirical support can you point to, that shows he can do the job and is fit for it?

Is there anything inside that expensive suit but a con man?

I had some fun yesterday, kicking over the anthill that is the Obama cult, and my, how the little critters are still furious about it. This is one reason I can't be a Democrat; the people in that party appear for the most part to be driven only by emotion. Sure, it makes sense to care about the issues and your candidate of choice, but there really should be rational, logical reasons for your positions. And frankly, the Left ... Read More

I Love You, You’re Perfect, Now Change

Keywords: , , , , , ,

Over at Politico in a post titled “No populist he,” Ben Smith prints a partial transcript of an interview Obama did with CNBC set to air tonight:

HARWOOD: On your general approach to business, you have criticized trade deals as not in the interests of American workers. You’ve talked about Wall Street speculators tricking people out of their homes, you’ve hit corporations for outsourcing. Are you a populist, and do you have any concern that your agenda might end up doing some damage to a US and global economic system that, though it’s struggling now, has delivered a lot of benefits to a lot of people over the last 25 years?

Sen. OBAMA: Look. I am a pro-growth, free market guy. I love the market. I think it is the best invention to allocate resources and produce enormous prosperity for America or the world that’s ever been designed.

Smith says Obama “puts his love for the free market in terms that we didn’t hear in Ohio,” but he’s missing the point. Obama quickly pivots:

As I said before, I think what’s happened is that the market has gotten out of balance. This isn’t the first time it happened. It happens often, particularly during periods of great technological and economic change. It happened, you know, when we moved from farms to factories. It happened when we shifted from factories to the information age. We’re still in the process of adapting to this new environment. And there are those of us who have done very well in this new global economy. A lot of dislocations have taken place. And all I’ve said is let’s make sure that our economy takes into account not just the winners but also the losers in the economy.

Let’s make sure that the burdens and benefits of globalization are fairly distributed. Let’s make sure that we are investing in what’s required for long-term growth. And I don’t think there’s any market advocate who would suggest that if our schools are underperforming, if our investment in basic science and research is declining, if young people can’t afford to go to college, if our health-care system is broken and more expensive delivering less in terms of quality care than any other advanced nation, that those are good things for the market, then, you know, we should go ahead and make those investments, make those changes, to make this marketplace work better. That’s my basic philosophy.

Obama doesn’t use rhetorical sledgehammers often, so the key is reading the layers of what he’s saying (especially considering the specific outlet). Obama first sets down a premise that, in theory, markets are the best system to produce and distribute prosperity. But then nearly everything he says after that points to work that must be done to fix failures and make the economy work for people again.

The unstated premise is that our markets have been hijacked to distribute resources to only a very small segment of our population at the expense of everyone else. Obama’s language is not as partisan or blunt as some would like (and this example is particularly subtle), but there’s no mistaking his meaning.

Tags: Barack Obama, Election 08 (all tags)

Over at Politico in a post titled "No populist he," Ben Smith prints a partial transcript of an interview Obama did with CNBC set to air tonight: HARWOOD: On your general approach to business, you have criticized trade deals as not in the interests of American workers. You've talked about Wall Street speculators tricking people out of their homes, you've hit corporations for outsourcing. Are you a populist, and do you have any concern that your agenda might end up doing ... Read More

Fox’s Smith: People who get stuck in toilets are ‘a little crazy,’ just like global warming deniers.

Keywords: , , ,

Yesterday on Fox News, anchor Shep Smith was recounting the story of a man in Pennsylvania who was stuck in a port-a-potty. According to the York Daily Record (PA), the man was “drunk, naked and wedged up to his waist in the hole of the toilet.” Toward the end of the segment, Smith compared people […]

Yesterday on Fox News, anchor Shep Smith was recounting the story of a man in Pennsylvania who was stuck in a port-a-potty. According to the York Daily Record (PA), the man was “drunk, naked and wedged up to his waist in the hole of the toilet.” Toward the end of the segment, Smith compared people who get stuck in toilets to “people who deny the whole global warming thing.” “They’re just a little crazy, you know?” said Smith. “What do you do?” ... Read More

Market Mover: Dealing With Higher US Inflation

Keywords: , , , , , , , , ,

A funny thing happened this morning as I was writing a story for you about Timothy Geithner’s important speech yesterday at the New York Economic Club: Inflation came back.

Geithner is the President of the New York Federal Reserve Bank, and his main topic yesterday was the gap between today’s innovative financial-market practices and the regulatory apparatus (including the Fed) that is supposed to keep markets stable.

This is a critical topic of great interest to policymakers around the world, and a consensus is growing that a “unified global framework” for financial regulation is needed. I’ll write a complete post about this subject later on.

But in the Q/A after his speech, President Geithner was asked (inevitably) about where the economy is going. He said that demand is getting softer, but he also said that the Fed will be watching inflation very carefully.

Federal Reserve officials always tread a very fine line in public statements because they know everyone will parse every comma for signals about the direction of interest rates. By emphasizing inflation over economic slowness, Geithner left an impression that they might head higher.

Keep reading…

As I’ve told you, the Europeans already signaled higher interest rates last week. Elliptical remarks by European Central Bank Governor Jean-Claude Trichet on Thursday were the trigger for a big wave of dollar-selling and crude-oil buying. This was why oil prices hit $139 on Friday.

So what happened next was that Fed Chairman Bernanke piled on last night with a statement that he sees considerably less risk of an economic slowdown, but will aggressively meet any signs of increasing inflation in the US.

The whole time that Bernanke and his colleagues have been slashing policy interest rates since last September, they’ve always been very clear that they would reverse quickly if they caught the smell of inflation. Most of us expected rates to stay steady for the rest of this year. So if there is an early change to tighter monetary policy, it’s a surprise.

Markets have reacted strongly to this decided shift in the regulatory tone. Bond markets are steeply lower this morning, the dollar has rallied against both the yen and the euro (up from 1.57 to 1.55), and crude oil continues its retreat, trading this morning around $134.40.

What’s missing from the picture is any clarity on whether the Fed’s economy-watchers are actually seeing a return to stronger conditions. The other possibility is that they’re trying to walk back some of the inflationary impact of the extraordinary actions they took in the wake of the Bear Stearns collapse and the severe money-market disruptions that occurred in March and April. This is a question I’d ask Bernanke and Geithner if given the chance.

If we start moving to higher interest rates while the economy is still weak, it could prolong the weakness. But as I’ve said many times, this recession is different because it’s being driven primarily by weak credit formation. If we can address this problem (which actually is tied in deeply with the housing markets), then economic conditions should improve.

Watch this space. I’ll update the story as needed.

Oh, and as an aside: Here’s a question that I don’t see anyone in Congress asking: why is it that prices of crude oil have become so dependent on monetary policy and financial markets? Oil is supposed to be an industrial commodity, not a financial instrument, right? Well, no, that’s obviously not all it is. We do a lot of bloviating about drilling ANWR and building more refineries (and Barack Obama keeps chattering like a wind-up doll about windfall profits taxes), but the influences on oil prices are far more complex than many people appreciate. And therefore, their political impact is too.

-Francis Cianfrocca (“blackhedd”)

A funny thing happened this morning as I was writing a story for you about Timothy Geithner’s important speech yesterday at the New York Economic Club: Inflation came back. Geithner is the President of the New York Federal Reserve Bank, and his main topic yesterday was the gap between today’s innovative financial-market practices and the regulatory apparatus (including the Fed) that is supposed to keep markets stable. This is a ... Read More

Obama’s Economic Speech And A Step Beyond Bush

Keywords: , , , , , , , , , , ,

Obama Kicked-off his two-week “Change That Works For You” tour with an economic speech in Raleigh, North Carolina today. And as Todd points out, Obama and the larger progressive movement is doing a good job reminding people of the McCain-Bush similarities. But today’s speech text also has some positive signs that Obama will work to hold the larger conservative governing philosophy responsible for our economic circumstance, not just George Bush:

We did not arrive at the doorstep of our current economic crisis by some accident of history.  This was not an inevitable part of the business cycle that was beyond our power to avoid.  It was the logical conclusion of a tired and misguided philosophy that has dominated Washington for far too long.

George Bush called it the Ownership Society, but it’s little more than a worn dogma that says we should give more to those at the top and hope that their good fortune trickles down to the hardworking many.  For eight long years, our President sacrificed investments in health care, and education, and energy, and infrastructure on the altar of tax breaks for big corporations and wealthy CEOs - trillions of dollars in giveaways that proved neither compassionate nor conservative.

And for all of George Bush’s professed faith in free markets, the markets have hardly been free - not when the gates of Washington are thrown open to high-priced lobbyists who rig the rules of the road and riddle our tax code with special interest favors and corporate loopholes.  As a result of such special-interest driven policies and lax regulation, we haven’t seen prosperity trickling down to Main Street.  Instead, a housing crisis that could leave up to two million homeowners facing foreclosure has shaken confidence in the entire economy.

I understand that the challenges facing our economy didn’t start the day George Bush took office and they won’t end the day he leaves.  Some are partly the result of forces that have globalized our economy over the last several decades - revolutions in communication and technology have sent jobs wherever there’s an internet connection; that have forced children in Raleigh and Boston to compete for those jobs with children in Bangalore and Beijing.  We live in a more competitive world, and that is a fact that cannot be reversed.    

But I also know that this nation has faced such fundamental change before, and each time we’ve kept our economy strong and competitive by making the decision to expand opportunity outward; to grow our middle-class; to invest in innovation, and most importantly, to invest in the education and well-being of our workers.

We’ve done this because in America, our prosperity has always risen from the bottom-up.  From the earliest days of our founding, it has been the hard work and ingenuity of our people that’s served as the wellspring of our economic strength.  That’s why we built a system of free public high schools when we transitioned from a nation of farms to a nation of factories.  That’s why we sent my grandfather’s generation to college, and declared a minimum wage for our workers, and promised to live in dignity after they retire through the creation of Social Security.  That’s why we’ve invested in the science and research that have led to new discoveries and entire new industries.  And that’s what this country will do again when I am President of the United States.

Full text here.

As millions of Americans start tuning into our political process for the first time, it’s crucial that they hear detail about which underlying causes brought us to this mess in the first place - it’s not enough for people to assume that George Bush’s incompetence sunk everything. Politicians come and go, but the bogus assumptions about “tax cuts,” “privitization” and “free markets” have endured long past Reagan. It’s good to see a Democratic nominee talking concretely about the good things our government can accomplish.

Update [2008-6-9 16:54:25 by Josh Orton]: As diarist sricki notes, Obama also mentioned his intention to partner with Elizabeth Edwards on his health care plan. Elizabeth, as we remember, chose initially to endorse Clinton’s plan over Obama’s.

Tags: Barack Obama, Election 08 (all tags)

Obama Kicked-off his two-week "Change That Works For You" tour with an economic speech in Raleigh, North Carolina today. And as Todd points out, Obama and the larger progressive movement is doing a good job reminding people of the McCain-Bush similarities. But today's speech text also has some positive signs that Obama will work to hold the larger conservative governing philosophy responsible for our economic circumstance, not just George Bush: We did not arrive at the doorstep of our current economic ... Read More