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Steve Malanga, writing in WSJ, alerts us to the risks of states using Build America Bonds.

In a Rasmussen poll taken before the midterm election, half of the respondents said that members of Congress who supported the 2009 federal stimulus didn’t deserve to be re-elected. Many weren’t. Yet the lame-duck Congress might extend one of the key elements of that stimulus: “Build America Bonds” (BABs). States and municipalities have used these bonds to rack up some $160 billion in new debt over the last 19 months.

Build America Bonds were created to re-energize the municipal bond market, which contracted sharply in late 2008. Investors had become wary that the credit crunch would spread to municipals, as insurers who back state and local bonds got hurt in other markets and stopped insuring public debt. Facing declining tax revenue and growing deficits, some local governments suddenly couldn’t borrow.

The Obama administration responded with a new kind of taxable bond that offered a 35% federal subsidy on the interest rate. Washington designed the subsidy to appeal to investors such as pension funds and overseas buyers who don’t buy traditional municipal bonds because they can’t take advantage of their tax-free status. The federal subsidy allowed states and cities to offer these investors an attractive return. The catch: Congress authorized the program only through 2010, to allay concerns that BABs would become a permanent bailout.

States and cities jumped deeply into this new market. …

Weekly Standard has a piece calling for a protocol for states to enter bankruptcy.

Anyone who proposed even a decade ago that a state should be permitted to file for bankruptcy would have been dismissed as crazy. But times have changed. As Arnold Schwarze-negger’s plea for $7 billion of federal assistance for California earlier this year made clear, the states are the next frontier in “too big to fail.” In the topsy-turvy world we now inhabit, letting states file for bankruptcy to shed some of their obligations could save American taxpayers a great deal of money.

The financial mess that spendthrift states have gotten themselves into is well known. California—recently dubbed the “Lindsay Lohan of states” in the Wall Street Journal—has a deficit that could reach $25.4 billion next year, and Illinois’s deficit for the 2011 fiscal year may be in the neighborhood of $15 billion. There is little evidence that either state has a recipe for bringing down its runaway expenses, a large portion of which are wages and benefits owed to public employees. This means we can expect a major push for federal funds to prop up insolvent state governments in 2011, unless some miraculous alternative emerges to save the day. This is where bankruptcy comes in. …

Jonathan Tobin gives us some good news about ourselves.

… Despite the constant drumbeat of incitement from those extremists purporting to represent the interests of American Muslims, anti-Islamic hate crimes remain rare occurrences. The idea that anti-Muslim bigotry is a dominant theme in American society or that violent haters have disproportionately victimized believers in Islam is simply without foundation. And far from giving sanction to such bigotry, the hallmark of American discourse since 9/11 has been a conscious effort to disassociate Islam from the war being waged against the West by Islamist terrorists. The new statistics provide fresh proof that the claim of an anti-Muslim backlash is unfounded.

There is a new book out on the collapse of the New York Times. Daily Caller interviews the author.

William McGowan is the author of “Gray Lady Down: What the Decline and Fall of the New York Time Means For America.”

Formerly editor of the Washington Monthly, McGowan is a media fellow at Social Philosophy and Policy Center. His work has been published in the Washington Post, the New York Times Magazine, the New Republic, and the National Review, among other places. His last book, “Coloring the News: How Political Correctness Has Corrupted American Journalism,” won the National Press Club Award.

McGowan recently agreed to answer 10 questions from The Daily Caller about his new book:

When ship-owners want to get a stolen ship back who do they see? The Guardian interviews one candidate.

May 1987. The day after the Naruda had finished offloading its rice cargo in Haiti, armed guards boarded the freighter. Moments later the captain, Max Hardberger, had a grubby, badly photocopied piece of paper placed in his hands. “Pour les dettes,” the guard said.     

“What debts?” Hardberger asked.

The guard shrugged and said: “It’s a matter for the courts. In the meantime my men will remain on board.”

There were no debts, but that was beside the point. Haiti was a law unto itself; a place where court officials could be bought. And one clearly had been. The Naruda was about to be stolen from under Hardberger’s nose.

He played for time. He pumped the guards with booze and waited for dark before ordering his engineer to lock them into their cabin. It was a toss-up whether they would try to shoot their way out, but they were either too drunk or not being paid enough to bother. Hardberger started the engines, switched off all the lights and sneaked out of harbour. If they were spotted, the Naruda would be seized, and he’d be slung in jail. Only when he was in international waters could he relax. Hardberger called down to the guards. He offered to set them loose in a lifeboat or take them to Venezuela; the choice was theirs. They chose the lifeboat.

This event was the making of the man who looks a bit like a salty Hulk Hogan, whose life could be a Hollywood film and whose name is a scriptwriter’s dream. …

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David Harsanyi casts a gimlet eye towards the GM IPO.

Oh, good, the Obama administration has another imaginary victory for taxpayers to celebrate.

As you’ve probably heard, there’s quite a bit of hubbub surrounding the news that the administration’s car company is going public.

President Barack Obama tells us that General Motors’ IPO is proof that one of the toughest tales of recession “took another step to becoming a success story.” Not “survival,” but success. Taxpayers are going to make a profit, even!

Now, admittedly, success is a malleable concept. If by success we mean that General Motors still owes the government $43 billion — not including that piddling $15 billion it borrowed to fund its financial arm — with many analysts uncertain that it can ever flourish, we’re home free.

Success will mean temporarily setting aside the fact that the Treasury actually lost billions on the IPO as it “bought” GM stock at inflated prices. To break even on the freshly printed money taxpayers are “getting back” will probably mean GM needs to double in value over the next year to make us whole.

Do you feel whole? …

… But when we undermine the rule of law, ignore property rights, create moral hazards and destroy organic job growth to save a company that had been terribly managed long before the recession, no one should be bragging about success.

The Daily Caller has more.

If the federal government wanted to recoup its investment in GM, then the GM stock price should be much higher than the $33 initial price. In order to break even, as the Deal Journal reports, the stock price would have to rise to around $50 per share. So why is the Treasury Department selling off the company at a loss?

First, the government is what is known as a “motivated seller.” By offering such a low stock price, the administration is essentially admitting that it has no place in running an auto company. While GM’s financial position is much better than it was when it should have gone bankrupt, the company’s finances are not great. A quick crunch of any of the numbers in the GM prospectus shows the company is not the healthy organization the politicos would have you believe. They have done a poor job running the company, even if they did save it from going under by ignoring the law and throwing billions of dollars at it. The sale prospectus even admits “our (that is, the government’s) disclosure controls and procedures and our internal control over financial reporting are currently not effective.” Hardly a ringing endorsement!

Second, they’re not the only ones in the game. The unusual bankruptcy settlement for GM granted a significant portion of the company to the United Auto Workers. The union is in this game too, even though it has no investment to recoup. The UAW is selling around 18 million shares, so it stands to gain about $500 million for its pension fund — at taxpayers’ expense.

John Fund interviews Dick Armey who is in DC doing God’s work, fighting people like Trent Lott. 

An old Washington story goes that when Martians land near the White House, everyone inside the Beltway flees in terror. Everyone, that is, except for the folks at the favor-factories known as Congress’s Appropriations Committees, who rush to greet the spaceship and say, “We’re here to help with the transition.”

There is always a danger that this election’s invading aliens—aka, tea partiers—will gradually succumb to Beltway mores. Former GOP Senate Majority Leader Trent Lott, now a big-time Washington lobbyist, has already told the Washington Post that it’s imperative for his tribe to “co-opt” the tea partiers arriving in D.C.

But Dick Armey—Republican House majority leader for eight years following the GOP landslide of 1994 and now chairman of the influential advocacy group, FreedomWorks—is pointing them in the opposite direction. Mr. Armey’s organization has nurtured and mentored tea party candidates for the past 18 months. He helped promote the “Contract from America,” a 10-point, grass-roots inspired program to “re-limit” government that more than 70 new Senate and House members signed. And he’s sent each new member of Congress a seven-page memo on how not to be co-opted. …

With people like Joe Biden around him, Obama has no chance. Peter Wehner explains.

In an interview with GQ magazine, Vice President Biden, when asked about Barack Obama’s problem in being perceived as aloof, provided us with this answer: “I think what it is, is he’s so brilliant. He is an intellectual.”

Michael Gerson sums up Holder’s efforts as attorney general.

The closing of the Guantanamo Bay prison and civilian trials for terrorists were more than policy changes proposed by Barack Obama as a presidential candidate. They were presented as a return to constitutional government – a dividing line from an uncivilized past.

The indefinite detention of terrorists, according to Obama, had “destroyed our credibility when it comes to the rule of law all around the world, and given a huge boost to terrorist recruitment.” Testifying last year before Congress, Attorney General Eric Holder not only defended a New York trial for lead Sept. 11 plotter Khalid Sheik Mohammed, he lectured, he taunted, he preened. Unlike others, he was not “scared” of what Mohammed would say at trial. Failure was “not an option.” This case, he told a reporter, would be “the defining event of my time as attorney general.”

Which it certainly has been. Under Holder’s influence, American detainee policy is a botched, hypocritical, politicized mess.

Jennifer Rubin and Linda Chavez try to warn off the GOP. Here’s Chavez;

Jen is right on both the substance and politics of a GOP move to revoke birthright citizenship from children born to illegal aliens. As I’ve written here and here, the 14th Amendment was carefully drawn and debated to exclude only two categories of persons: the children of diplomats and children born on Indian reservations that were deemed sovereign territories at the time.

But the political objections are even greater. Republicans lost two Senate seats — in Nevada and Colorado — that they should have won on Election Day, largely because of the nasty tenor of debate on illegal immigration. …

Shikhia Dalmia in “Whose Sari Now?” explains why the garment is rooted in Indian culture.

… Part of the Indian woman’s attachment to the sari no doubt stems from her cultural conditioning. Indian girls grow up wearing a mix of Indian garments (choli/lehnga, salwar/kamiz) and Western clothes (frocks, skirts, long dresses and jeans) — not saris. Saris are meant only for grown women who have fully come into their own. When a girl first wears one – typically at her school’s graduation or farewell party, the equivalent of prom night – it marks a rite of passage. The sari and all its resplendent accessories – glass bangles, chunky hand-crafted silver or gold jewelry, the bindi on the forehead – are their first full encounter with their femininity and, like a first love, it leaves an indelible impression.

But an Indian woman’s acculturation in the sari begins much before she actually wears one. Saris are an essential part of a bride’s trousseau that mothers sometimes start planning from the day a daughter is born. My mother had barely left the maternity ward when she decided that she would give me at least 21 silk saris when I got married. And, over the years, I witnessed her painstakingly assemble my collection with pieces from all over the country: rich, double-shaded benaresis; sumptuous tanchoies woven with strands of real gold; South Indian kanchiwarams whose bright magentas and fuchsias with contrasting borders are sadly out of fashion now; diaphanous, delicate chanderis; simple, weightless French chiffons in soothing pastels; Bengali kanthas whose elaborate embroidery depicts stories from ancient Hindu epics; and gorgeous, sumptuous tassars – my personal favorite – whose shine seems to come from an inner glow like the brides they often adorn. …

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Tony Blankley with a sober view of the reaction to the deficit commission’s report.

“If only we had sold our stocks a few weeks ago.” “If only I’d had the brakes checked before she drove up to the mountains.” There are few sadder words than those of regret at letting time pass until the catastrophe hits. Neither individuals nor armies nor nations are exempt from the human tendency to wait too long before acting – and paying a terrible price for the delay.

These thoughts, among others, have crossed my mind as I have watched politicians across the ideological spectrum react to the deficit commission’s report of last week.

Whatever substantive view of the proposal the various politicians had, I didn’t see a single senior player express the desire to take the report as an opportunity to throw all of our effort immediately into developing and passing a workable proposal into law. …

… Even as Greece, Spain and Ireland raise the specter of sovereign debt crises, even as France and Britain take bold action to bring their excessive spending under control (at the price of major street violence in their capital cities ) – American politicians focus on the general unacceptability of a proposal that includes anything that doesn’t quite fit their ideological predelictions. If they can’t have it exactly their way, they don’t want it at all. They are prepared to just coast forward at multitrillion-dollar yearly deficits, leaving only a string of condemnatory press releases in their wake. …

Abe Greenwald thinks Obama’s worst week ever has been going on since June. 

… Here’s a mordant laugh. On Face the Nation, Bob Schieffer said, “Every administration has a period where things just go haywire, nothing seems to go right. But I can’t recall a week like the Obama White House has had.” That was June 6, when Obama’s worst week was composed of lame PR attempts to deal with an oil spill that was not — at all — his fault. But clearly, as far back as June, the American people sensed that not all was well with the state of the country. The spill was convenient prey — and Barack Obama has scarcely had a week that easy since. What this really means is that our worst week ever has been going on for almost six months. This is a full season of collective uncertainty. With no reset on the horizon, the concept of worst is becoming infinitely elastic.

Joel Kotkin knows why the Dems got wiped. Their ideas suck.

Democrats are still looking for explanations for their stunning rejection in the midterms — citing everything from voting rights violations and Middle America’s racist orientation to Americans’ inability to perceive the underlying genius of President Barack Obama’s economic policy.

What they have failed to consider is the albatross of contemporary liberalism.

Liberalism once embraced the mission of fostering upward mobility and a stronger economy. But liberalism’s appeal has diminished, particularly among middle-class voters, as it has become increasingly control-oriented and economically cumbersome.

Today, according to most recent polling, no more than one in five voters call themselves liberal.

This contrasts with the far broader support for the familiar form of liberalism forged from the 1930s to the 1990s. Democratic presidents from Franklin D. Roosevelt to Bill Clinton focused largely on basic middle-class concerns — such as expanding economic opportunity, property ownership and growth.

Modern-day liberalism, however, is often ambivalent about expanding the economy — preferring a mix of redistribution with redirection along green lines. Its base of political shock troops, public-employee unions, appears only tangentially interested in the health of the overall economy. …

Since there is almost universal condemnation, why is Bernanke doing QE2? WSJ Op-Ed has a suspicion.

… I have a different explanation for the Fed’s latest easing program: Without another $600 billion floating through the economy, Mr. Bernanke must believe that real estate (residential and commercial) would quickly drop, endangering banks.

The 2009 quantitative easing lowered mortgage rates and helped home prices rise for a while. But last month housing starts plunged almost 12%. And in September, according to Core-Logic, home prices dropped 2.8% from 2009. Commercial real estate values are driven by job-creation and vacancy rates, both of which are heading the wrong way.

Because of unexpectedly bad construction loans, the staid Wilmington Trust was sold to M&T Bank earlier this month in a rare “takeunder”—what Wall Street calls a deal done below a company’s stock value, in this case by 40%.

In other words, real estate is at risk again. But Mr. Bernanke would create a panic if he stated publicly that, if not for his magic dollar dust, real estate would fall off a cliff. …

Charles Krauthammer comments on TSA pat-downs.

Ah, the airport, where modern folk heroes are made. The airport, where that inspired flight attendant did what everyone who’s ever been in the spam-in-a-can crush of a flying aluminum tube – where we collectively pretend that a clutch of peanuts is a meal and a seat cushion is a “flotation device” – has always dreamed of doing: pull the lever, blow the door, explode the chute, grab a beer, slide to the tarmac and walk through the gates to the sanity that lies beyond. Not since Rick and Louis disappeared into the Casablanca fog headed for the Free French garrison in Brazzaville has a stroll on the tarmac thrilled so many.

Who cares that the crazed steward got arrested, pleaded guilty to sundry charges, and probably was a rude, unpleasant SOB to begin with? Bonnie and Clyde were psychopaths, yet what child of the ’60s did not fall in love with Faye Dunaway and Warren Beatty?

And now three months later, the newest airport hero arrives. His genius was not innovation in getting out, but deconstructing the entire process of getting in. John Tyner, cleverly armed with an iPhone to give YouTube immortality to the encounter, took exception to the TSA guard about to give him the benefit of Homeland Security’s newest brainstorm – the upgraded, full-palm, up the groin, all-body pat-down. In a stroke, the young man ascended to myth, or at least the next edition of Bartlett’s, warning the agent not to “touch my junk.” …

According to CNet News, one typical human brain has more switches than all computers on earth.

… Researchers at the Stanford University School of Medicine have spent the past few years engineering a new imaging model, which they call array tomography, in conjunction with novel computational software, to stitch together image slices into a three-dimensional image that can be rotated, penetrated and navigated. Their work appears in the journal Neuron this week. …

… They found that the brain’s complexity is beyond anything they’d imagined, almost to the point of being beyond belief, says Stephen Smith, a professor of molecular and cellular physiology and senior author of the paper describing the study:

“One synapse, by itself, is more like a microprocessor–with both memory-storage and information-processing elements–than a mere on/off switch. In fact, one synapse may contain on the order of 1,000 molecular-scale switches. A single human brain has more switches than all the computers and routers and Internet connections on Earth.” …

Licking off the humor section is a feel good story from the editors of Investor’s Business Daily.

As the case for global warming and cap-and-trade has collapsed, so too has the market that was to exploit this manufactured crisis for fun and profit. The climate-change bubble has burst.

Lost in the hubbub leading up to the Republican and Tea Party tsunami on Nov. 2 was the collapse of the Chicago Climate Exchange (CCX). But its implications for the future of the American economy and the business climate are staggering: It is an acknowledgment that both the case for climate trade and cap-and-tax legislation has also collapsed. …

… The biggest losers are CCX’s two biggest investors, Al Gore’s Generation Investment Management and Goldman Sachs, that champion of sound money management that serves as the farm team for administration staffing. …

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Happy 22nd Birthday Liza. Click on About. She is the little girl in the first picture. Calls herself Number Six.

Jennifer Rubin on the verdict in New York.

The acquittal of Guantanamo detainee Ahmed Khalfan Ghailani yesterday on all but one of 285 counts in connection with the 1998 Al Qaeda bombings of the U.S. embassies in Keyna and Tanzania has once again demonstrated that the leftist lawyers’ experiment in applying civilian trial rules to terrorists is gravely misguided and downright dangerous. The soon-to-be House Chairman on Homeland Security Peter King issued a statement blasting the trial outcome and the nonchalant response from the Justice Department:

“I am disgusted at the total miscarriage of justice today in Manhattan’s federal civilian court.  In a case where Ahmed Khalfan Ghailani was facing 285 criminal counts, including hundreds of murder charges, and where Attorney General Eric Holder assured us that ‘failure is not an option,’ the jury found him guilty on only one count and acquitted him of all other counts including every murder charge. This tragic verdict demonstrates the absolute insanity of the Obama Administration’s decision to try al-Qaeda terrorists in civilian courts” …

And John Podhoretz.

The horrendous result in the trial of the al-Qaeda participant in the 1998 embassy bombings is a revelation. What it reveals is just how feckless and irresponsible the policies of this administration have proved to be in the administration of the war on terror. The fact is that, over the course of the Bush administration, a legal regime was established to govern the of this administration in dealing with the legal complexities of the war on terror. The regime came under withering assault from liberals, but it was consistent, predictable, and had underlying logic. Now, almost certainly, we’re spinning off into complete improvisation — Gitmo remaining open when the administration has declared its intention to close it, Khalid Sheikh Muhammad about to be detained indefinitely under war terms his detainers in this administration have rejected. What the Bush people did was far more considered than it was given credit for being at the time, and now the people who claimed it was acting lawlessly are on the verge of true lawlessness — which is what law is when it is inconsistently and improvisationally applied.

Peter Wehner says the prez is in denial.

“Campaigning is different than governing,” President Obama told reporters during his return flight from Asia this weekend. When asked about his meeting with GOP leaders later this week, Obama said: “They are flush with victory after a campaign of just saying ‘No.’ But I’m sure the American people did not vote for more gridlock.”

In fact, the exit polling shows the public did exactly what the president denies. The midterm elections were as close to a plebiscite as we have ever seen in a midterm election. It was, in large measure, a referendum on Obama and his policies — on Obamaism — and the public stood awthart history yelling, “Stop!” …

John Podhoretz tells us what happened to Dem congresspersons who voted with the toxic president.

… So you can assign a 30-seat loss to economic woes for which Obama was not responsible. If Dems had only lost 30 seats, they’d still control the House. But they lost more than 60. Thus, Obama must still bear responsibility for the loss of the House.

And more besides. For it was the 20-plus seats lost due to Obama’s liberal policies that turned the election from a wave into a tsunami — a wholesale rejection of his party fearsome in its intensity and destructiveness (an astounding 680 Democratic state legislators lost their jobs on Nov. 2).

The Stanford analysis (by professor David Brady, also deputy director of the Hoover Institution) addresses the effect on individual House members who voted both for health-care reform and the cap-and-trade bill.

Democrats who voted for both bills and whose districts went for John McCain rather than Obama in 2008 were wiped out. So were the ones in districts that Obama essentially split with McCain 50-50.

Perhaps even more interesting is this: A Democrat in one of these “50-50″ districts who voted no on both health-care and cap-and-trade ended up with a 71 percent chance of getting re-elected — while one who voted yes on both bills had only a 6.5 percent chance of holding on. …

David Harsanyi has some fun.

The White House says it has a “messaging” problem when it comes to health care reform. As in, a “you’re-not-buying-our-message” problem. And this week’s news, to say the least, was no help.

You’ll remember that one of the most common and potent rationales for passing reform was the claim that insurance companies routinely deny coverage to innocent Americans with pre-existing conditions.

Obamacare features a $5 billion program designed to stem this profit-ridden epidemic. And to ensure vibrant participation — by both those legitimately in need and those who couldn’t quite grasp the theory behind “insurance” — 65 percent of premiums are subsidized by taxpayers.

But as The Wall Street Journal reported this week, even with generous inducements, since July only 8,000 people — rather than the White House’s projected 375,000 — have signed up for a national program that is theoretically going to add another 400,000 citizens in each upcoming year.

Perhaps advocates confused their own dismal view of American ingenuity with reality. But I’m not worried. If this administration excels at anything, it’s giving away stuff. No messaging problem there. And the Department of Health and Human Services has promised to cut premiums by 20 percent more and enhance benefits to encourage enrollment.

Or, in other words, we have another $5 billion relentlessly searching for a problem. …

Joel Kotkin continues the Texas/California dichotomy.

In the future, historians may likely mark the 2010 midterm elections as the end of the California era and the beginning of the Texas one. In one stunning stroke, amid a national conservative tide, California voters essentially ratified a political and regulatory regime that has left much of the state unemployed and many others looking for the exits.

California has drifted far away from the place that John Gunther described in 1946 as “the most spectacular and most diversified American state … so ripe, golden.”  Instead of a role model, California  has become a cautionary tale of mismanagement of what by all rights should be the country’s most prosperous big state. Its poverty rate is at least two points above the national average; its unemployment rate nearly three points above the national average.  On Friday Gov. Arnold Schwarzenegger was forced yet again to call an emergency session in order to deal with the state’s enormous budget problems.

This state of crisis is likely to become the norm for the Golden State. In contrast to other hard-hit states like Pennsylvania, Ohio and Nevada, which all opted for pro-business, fiscally responsible candidates, California voters decisively handed virtually total power to a motley coalition of Democratic-machine politicians, public employee unions, green activists and rent-seeking special interests. …

George Gilder with more on California’s problems. 

California officials acknowledged last Thursday that the state faces $20 billion deficits every year from now to 2016. At the same time, California’s state Treasurer entered bond markets to sell some $14 billion in “revenue anticipation notes” over the next two weeks. Worst of all, economic sanity lost out in what may have been the most important election on Nov. 2—and, no, I’m not talking about the gubernatorial or senate races.

This was the California referendum to repeal Assembly Bill 32, the so-called Global Warming Solutions Act, which ratchets the state’s economy back to 1990 levels of greenhouse gases by 2020. That’s a 30% drop followed by a mandated 80% overall drop by 2050. Together with a $500 billion public-pension overhang, the new energy cap dooms the state to bankruptcy. …

Jennifer Rubin says follow the successful states.

… These budget balancers and spending cutters are successful Republican governors, all of whom have been mentioned as 2012 presidential contenders. And in the 2010 midterms, their ranks expanded with Republicans elected in New Mexico, Wisconsin, Ohio, Iowa, Pennsylvania, Michigan, Kansas, Oklahoma and Tennessee. That’s a lot of GOP governors who have the opportunity to lead on fiscal discipline.

Not only does this dispel the liberal myths that we need massive taxes to balance our books or that the public won’t accept reduced services; but is provides Republicans with a wealth of talent for the 2012 and future presidential races. The country seems poised to get serious on tax and budget reform and has grown weary of a president whose not much into governance. That suggests a unique opportunity for these GOP governors — provided they stick to their  sober approach to governance.

And on the other hand, we have the example of California which has yet to get its spending and public employee unions under control. It’s the beauty of federalism — 50 labratories in which we can see what works and what doesn’t. So far a lot of GOP governors are showing how to do it right.

Howard Kurtz interviews Roger Ailes. We have both parts.

… Ailes brushes aside suggestions that journalists have been much harder on the president as his sliding popularity has led to a Republican takeover of the House. He is far more sympathetic to Obama’s predecessor:

“This poor guy, sitting down on his ranch clearing brush, gained a lot of respect for keeping his mouth shut. I literally never heard an Obama speech that didn’t blame Bush.”

None of this is personal, you understand. Ailes says he likes Obama, who was gracious to him during last year’s Christmas party, and David Axelrod and Valerie Jarrett. He recently had breakfast with Axelrod to discuss Fox’s coverage. But Ailes took an unprovoked swipe at Robert Gibbs, saying the press secretary “is a little big for his britches” and “will end up like that little shithead who worked for Bush”—meaning Scott McClellan, the onetime loyalist who wrote a book criticizing his former boss. Gibbs and the White House declined to respond.

Fox was the favorite network of the Bush White House, the default channel on its television sets and the go-to guys for big interviews. The Obama White House, by contrast, declared rhetorical war on the network last year and rarely provides top officials as guests.

The steady barrage of criticism from the opinion folks, led by Glenn Beck and Sean Hannity, has lifted Fox’s ratings, although Ailes says he sees no connection. Fox is averaging 11 million viewers this year, an 8 percent jump in Nielsen numbers over 2008, while CNN has dropped 37 percent and MSNBC 15 percent. Unlike two years ago, Fox is averaging more viewers than its two cable rivals combined. …

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Today we concentrate on QE2 (quantitative easing) opening with misgivings from Streetwise Professor.

The Federal Reserve has launched a second round of “quantitative easing”–QE2.   How is it that this “easing” leaves me uneasy?

Macro is not my thing.  But economics is economics, and I know enough to have serious questions about quantitative easing.  I may not be able to tailor a magnificent macro suit, but I can pretty much tell when the king is naked, and I think that’s the case here.

Bernanke is arguing that easing is needed because of deflationary concerns.  But has there ever been a deflationary episode during which commodity prices spurted ahead?  Definitely not during the 1930s.  Not in the 1920-1921 crash (which at its outset was more severe than the Great Depression).  Not in 1893.  In all of these episodes, commodity prices crashed.  So if this is deflation, it is a weird deflation. …

Peter Schiff is next.

While it’s true that history repeats itself, the patterns should always be separated by a generation or two to keep things respectable. Unfortunately, in today’s economic world, it seems the cycle can be counted in months. 

On July 24, 2009, just as the Federal Reserve unleashed its first quantitative easing campaign (now called “QE1” – an echo of the reclassification of the Great War after still more destructive subsequent developments), Fed Chairman Ben Bernanke wrote an opinion piece in the Wall Street Journal to soothe growing concerns about excess liquidity. He assured the public that the Fed had an “exit strategy.”

In a response entitled “No Exit for Ben”, I called the Chairman’s bluff. I argued that the Fed had no exit strategy, and that Bernanke was trying to fool the market into believing that quantitative easing was not debt monetization. 

Just 16 months later, Bernanke is at it again, penning another op-ed to defend his second round of QE. Except this time, instead of feigning an exit strategy, he just outlines a path to expand the program in perpetuity. …

Spengler (aka David Goldman) takes a turn. 

Treasuries and gold tanked together on Friday, evidently in response to news reports that Asian countries may impose exchange controls to hold back the septic tide of dollars bubbling out of the Fed’s printing press. Never before has the world displayed the sort of public contempt for American policy that Germany, China and others expressed last week. Wolfgang Schaueble’s Spiegel interview last week describing quantitative easing as “clueless,” followed by Federal Chancellor Angela Merkel’s open attack on it during the G20 meetings, is entirely new, as is the Chinese and other Asian threat to simply keep dollars out.

The rest of the world is right and the Fed is wrong. QE2 is turning into Titanic II …

Alan Reynolds in the WSJ.

Federal Reserve Chairman Ben Bernanke may be an excellent economist, but he is not a very good bond salesman. Since his Aug. 27 speech at an annual Fed symposium in Jackson Hole, Wyo., he’s been telling us that he thinks inflation is too low and long-term interest rates are too high. In a quixotic effort to “maximize employment,” he’s begun purchasing up to $600 billion worth of long-term Treasury obligations to push inflation up and bond yields down.

If it worked as planned, this would flatten the yield curve, meaning it would narrow the spread between short-term and long-term interest rates. Since banks make money by borrowing short and lending long, the effect would be to discourage bank lending. That seems an unpromising way to stimulate the economy. But the whole notion of simultaneously raising inflation and lowering bond yields presumes bond buyers are docile fools. …

An article from Business Insider has more.

It’s never a good thing when another country calls your financial policy clueless. It’s particularly bad if that other country is one of the world’s leading economies, and if it also happens to be right.

“With all due respect, U.S. policy is clueless,” German Finance Minister Wolfgang Schaeuble said recently, referring to the Federal Reserve’s decision to throw $600 billion at our sluggish economy.

The Fed can create as much money as it likes, but the U.S. economy is presently unable to productively put that money to work. By setting near-zero interest rates, the Fed has established that money in this country has no real value. We give it to the banks for nothing, and the banks lend it back to the deficit-ridden U.S. Treasury for almost nothing. The result is a guaranteed profit for the banks, but no incentive to lend cash to creative entrepreneurs or expanding businesses.

The Fed’s $600 billion intervention will make this foolishness more efficient by cutting out the middleman. …

Robert Samuelson writes on how we might avoid Japan’s mistakes.

It’s hard to remember now that in the 1980s Japan had the world’s most-admired economy. It would, people widely believed, achieve the highest living standards and pioneer the niftiest technologies. Nowadays, all we hear are warnings not to repeat Japan’s mistakes that resulted in a “lost decade” of economic growth. Japan’s cardinal sins, we’re told, were skimping on economic “stimulus” and permitting paralyzing “deflation” (falling prices). People postponed buying because they expected prices to go lower. That’s the conventional wisdom – and it’s wrong.

Just the opposite is true: Japan’s economic eclipse shows the limited power of economic stimulus and the exaggerated threat of modest deflation. There is no substitute for vigorous private-sector job creation and investment, and that’s been missing in Japan. This is a lesson we should heed.

Japan’s economic problems, like ours, originated in huge asset “bubbles.” …

Unemployed actor in New York? WSJ says you can look for bed bugs.

… Never mind the bar-tending. There’s a new side job for the aspiring actor: bedbug buster.

“Actors have great personalities and follow directions well,” says Janet Friedman, owner of Bed Bug Busters NY, who employs many people from the theater world to clean up the vermin. She favors entertainers, she says, because they can improvise, work quickly and are used to the drama of a stressful situation.

Meagan Gilliland, a 25-year-old actress who moved from Chicago to New York in September 2009, secured a gig with Bed Bug Busters before arriving.

While she’d rather be acting, she says her new job doesn’t bug her.

On the contrary: Ms. Gilliland says she uses her acting chops while she goes through every inch of a person’s apartment. In a particularly dusty apartment—sometimes clients are hoarders—she puts on a smile trying to “pretend to be OK, like you’re still having a good time with friends and stuff, while you’re choking on a lot of dust.” …

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We start today with American Narcissus, a piece in The Weekly Standard by Jonathan Last.

Why has Barack Obama failed so spectacularly? Is he too dogmatically liberal or too pragmatic? Is he a socialist, or an anticolonialist, or a philosopher-president? Or is it possible that Obama’s failures stem from something simpler: vanity. Politicians as a class are particularly susceptible to mirror-gazing. But Obama’s vanity is overwhelming. It defines him, his politics, and his presidency.

It’s revealed in lots of little stories. There was the time he bragged about how one of his campaign volunteers, who had tragically died of breast cancer, “insisted she’s going to be buried in an Obama T-shirt.” There was the Nobel acceptance speech where he conceded, “I do not bring with me today a definitive solution to the problems of war” (the emphasis is mine). There was the moment during the 2008 campaign when Obama appeared with a seal that was a mash-up of the Great Seal of the United States and his own campaign logo (with its motto Vero Possumus, “Yes we Can” in Latin). Just a few weeks ago, Obama was giving a speech when the actual presidential seal fell from the rostrum. “That’s all right,” he quipped. “All of you know who I am.” Oh yes, Mr. President, we certainly do. …

… Yet you don’t have to delve deep into armchair psychology to see how Obama’s vanity has shaped his presidency. In January 2009 he met with congressional leaders to discuss the stimulus package. The meeting was supposed to foster bipartisanship. Senator Jon Kyl questioned the plan’s mixture of spending and tax cuts. Obama’s response to him was, “I won.” A year later Obama held another meeting to foster bipartisanship for his health care reform plan. There was some technical back-and-forth about Republicans not having the chance to properly respond within the constraints of the format because President Obama had done some pontificating, as is his wont. Obama explained, “There was an imbalance on the opening statements because”—here he paused, self-satisfiedly—“I’m the president. And so I made, uh, I don’t count my time in terms of dividing it evenly.”

There are lots of times when you get the sense that Obama views the powers of the presidency as little more than a shadow of his own person. When he journeyed to Copenhagen in October 2009 to pitch Chicago’s bid for the Olympics, his speech to the IOC was about—you guessed it: “Nearly one year ago, on a clear November night,” he told the committee, “people from every corner of the world gathered in the city of Chicago or in front of their televisions to watch the results of .??.??. ” and away he went. A short while later he was back in Copenhagen for the climate change summit. When things looked darkest, he personally commandeered the meeting to broker a “deal.” Which turned out to be worthless. In January 2010, Obama met with nervous Democratic congressmen to assure them that he wasn’t driving the party off a cliff. Confronted with worries that 2010 could be a worse off-year election than 1994, Obama explained to the professional politicians, “Well, the big difference here and in ’94 was you’ve got me.”

In the midst of the BP oil spill last summer, Obama explained, “My job right now is just to make sure that everybody in the Gulf understands this is what I wake up to in the morning and this is what I go to bed at night thinking about: the spill.” Read that again: The president thinks that the job of the president is to make certain the citizens correctly understand what’s on the president’s mind.

Obama’s vanity is even more jarring when paraded in the foreign arena. …

Jennifer Rubin continues the thought.

… If Obama is ungracious (toward his predecessor), oblivious (to the desires of the voters), and frustrated (by the Palestinians’ and Israelis’ refusal to make a deal under his auspices), it is because he is unable to grasp that it’s not all about him. But the good news is that, as he reportedly did in the Senate, he may conclude that being president is really ”so boring.” (He certainly doesn’t seem to be having fun, does he?) In that case, he might not really care all that much about trying to ingratiate himself with the voters. It very well might not be “worth it” in his mind to temper his views in order to get a second term. Freed from the burdens of the presidency he then might do what he loves best — write books and give speeches about himself. Or maybe he can give speeches about writing books about himself.

Bill Kristol with a recent vignette that will add to the legend.

… After a contentious economic summit where the president was forced to defend the Fed’s ill-advised monetary policies, a summit that followed on the heels of the biggest midterm electoral defeat ever suffered by an elected first-term president, a defeat partly due to his ill-advised fiscal policies, did Obama really expect a reporter to stand up at the end of last week and ask, “Mr. President, what compliments did you receive from foreign leaders?”

That is, apparently, exactly what the president expected.

Just how is our shining light doing on the world stage? Two items on the failure in Seoul. First Charles Krauthammer.

Whenever a president walks into a room with another head of state and he walks out empty-handed — he’s got a failure on his hands.

And this was self-inflicted. With Obama it’s now becoming a ritual. It’s a combination of incompetence,  inexperience, and arrogance. He was handed a treaty by the Bush administration. It was done. But he wanted to improve on it. And instead, so far, he’s got nothing. …

And from Foreign Policy, a professional’s view.

President Obama’s failure to conclude the Korea-United States Free Trade Agreement (KORUS) is a disaster. It reveals a stunning level of ineptitude and seriously undermines America’s leadership in the global economy. The implications extend far beyond selling Buicks in Busan.

Unlike some of the trade agreements the United States has pursued in the last decade, this one is with an economically significant partner. KORUS could bring billions of dollars of new trade opportunities and the Obama administration had cited it as one part of its National Export Initiative, a plan to double U.S. exports in five years.

But there are really two distinct issues in contemplating the significance of the failed talks: the economic merits and questions of diplomatic competence. The latter is really the story of the day. …

Summing all this up we have Bret Stephens on the dangers of America’s will to weakness. 

Lately in the news:

Beijing provokes clashes with the navies of both Indonesia and Japan as part of a bid to claim the South China Sea. Tokyo is in a serious diplomatic row with Russia over the South Kuril islands, a leftover dispute from 1945. There are credible fears that Tehran and Damascus will use the anticipated indictment of Hezbollah figures by a U.N. tribunal to overthrow the elected Lebanese government. Managua is attempting to annex a sliver of Costa Rica, a nation much too virtuous to have an army of its own. And speaking of Nicaragua, Daniel Ortega is setting himself up as another Hugo Chávez by running, unconstitutionally, for another term. Both men are friends and allies of Mahmoud Ahmadinejad.

About all of this, the Obama administration has basically done nothing. As Sarah Palin might say: How’s that multi-poley stuff workin’ out for ya?

Throughout the Bush years, “multipolarity” was held up as the intelligent and necessary alternative to the supposedly go-it-alone approach to the world of the incumbent administration. French President Jacques Chirac was for it: “I have no doubt,” he said in 2003, “that the multipolar vision of the world that I have defended for some time is certainly supported by a large majority of countries throughout the world.” So were such doyens of the U.S. foreign policy establishment as Fareed Zakaria and Francis Fukuyama. …

So what are the current conditions of sea life in the Gulf of Mexico? Would you be surprised to learn all the critters are thriving? National Review has the story.

The catastrophists were wrong (again) about the Deep Water Horizon oil spill. There have been no major fish die-offs. On the contrary, a comprehensive new study says that in some of the most heavily fished areas of the Gulf of Mexico, various forms of sea life, from shrimp to sharks, have seen their populations triple since before the spill. Some species, including shrimp and croaker, did even better.

And meanwhile, the media has greatly exaggerated damage found in studies about coral, which is in some ways more vulnerable to oil and dispersant. Most of it is doing fine.

The growth of the fish population is not occurring because oil is good for fish. Rather, it is occurring because fishing is bad for fish. When fishing was banned for months during the spill, the Gulf of Mexico experienced an unprecedented marine renaissance that overwhelmed any negative environmental consequences the oil may have had, researchers say.

Even the researchers themselves, however, were surprised by the results. “We expected there to be virtually no fish out there based on all the reports we were getting about the toxicity of the dispersant and the toxicity of the hydrocarbons, and reports that hypoxia [low oxygen] had been created as a result of the oil and dispersant,” says John Valentine, who directed the study. “In every way you can imagine, it should have been a hostile environment for fish and crabs; our collection showed that was not the case.”

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Charles Krauthammer comments on Obama’s trip to India, and the importance of the US relationship with India.

…The story of the next half-century will be how Asia accommodates and/or contains China’s expansion.

Nor is this some far-off concern. China’s aggressive territorial claims on resource-rich waters claimed by Vietnam, Brunei, Malaysia, the Philippines and Japan are already roiling the neighborhood. Traditionally, Japan has been the major regional counterbalance. But an aging, shrinking Japan can no longer sustain that role. Symbolic of the dramatic shift in power balance between once-poor China and once-dominant Japan was the resolution of their recent maritime crisis. Japan had detained a Chinese captain in a territorial-waters dispute. China imposed a rare-earth mineral embargo. Japan capitulated.

That makes the traditional U.S. role as offshore balancer all the more important. China’s neighbors from South Korea all the way around to India are in need of U.S. support of their own efforts at resisting Chinese dominion.

And of all these countries, India, which has fought a border war with China, is the most natural anchor for such a U.S. partnership. It’s not just our inherent affinities – being democratic, English-speaking, free-market and dedicated to the rule of law. It is also the coincidence of our strategic imperatives: We both face the common threat of radical Islam and the more long-term challenge of a rising China.

…China is no enemy, but it remains troublingly adversarial. Which is why India must be the center of our Asian diplomacy. …

In the National Review, Andy McCarthy tells us how Obama continues to offend Israel, this time by criticizing Israel while in Indonesia.

…Sadly, there is nothing new in Obama’s amateurish inflation of Israeli construction from a sore point to a flash point in Israeli-Palestinian tensions. Nor is there novelty in his hectoring of Israel for insufficient indulgence of a “negotiating partner” that does not accept its right to exist. If there were nothing more, there’d be little point in recounting this story.

But there is a new wrinkle in Obama’s Israel-bashing: the setting. While the president’s post-election get-out-of-Dodge tour has included stops in New Delhi, Seoul, and Tokyo, he opted to zing the Zionist entity while touring Jakarta. This was no coincidence: By population, Indonesia is the world’s largest Islamic country, home to 200 million Muslims.

…It also turns out that this exemplary Islamic nation has about as much tolerance for Israel as the Palestinians do. Like Hamas and Fatah, Indonesia does not recognize Israel’s right to exist. To be sure, the national motto is “Unity in Diversity” — inducing Obama to compare it favorably with America’s E Pluribus Unum. But it ought to come with an asterisk: Israelis are not permitted to enter Indonesia, nor are Israeli aircraft permitted to fly in its airspace.

What better perch could an American president find from which to slam a staunch American ally? It’s nice to know “Indonesia is a part of” President Obama, but Judeo-Christian tolerance — the kind Israel lives and Jakarta shuns — is part of America.

Peter Wehner compiles some election statistics for us.

In shifting through the fine analysis that emerged in the aftermath of last week’s midterm elections, a few data points are particularly noteworthy…

Independents comprised 28 percent of the electorate and supported Republican congressional candidates by a margin of 56 to 38 percent. That represents a 36-point turnaround from the last midterm election, in 2006, when independents supported Democratic congressional candidates by 57 to 39 percent. In addition, independents trust Republicans to do a better job than Democrats by a margin of 23 points on jobs and employment, 23 points on the economy, 27 points on government spending, and 31 points on taxes.

Voters support repealing/replacing ObamaCare by 51 to 42 percent. Democrats oppose repeal by 80 to 16 percent — but both independents (by 57 to 31 percent) and Republicans (by 87 to 7 percent) want to repeal and replace it.

Sixty-five percent of voters said that the stimulus bill either hurt the economy or did no good — and those voters overwhelmingly favored the GOP. …

Daniel Henninger, in the WSJ, comments on how Dems have no understanding of business.

…The Democrats running things the past two years proved they have no clue about the business of business. In their world, the real world of the private economy is an abstraction, a political figment.

Exhibit A: Along the road to ObamaCare, the party’s planners inserted into the bill the now- famous 1099 provision, requiring businesses to do an IRS report for any transaction over $600 annually. No member of Congress, White House staffer or party flunky thought to say, “Oh, wow, this 1099 requirement will crush people running their own businesses. Are we sure we want to do this?” Yes, and that 1099 fiasco is a metaphor now for the modern Democratic Party. …

…much of what this Democratic Congress did, or tried to do, was like throwing Molotov cocktails at business. It began in early 2009 with the cap-and-trade climate bill. …

At his news conference last week, Mr. Obama still wouldn’t rule out the EPA’s impending “carbon finding” to regulate emissions, another Freddy Krueger nightmare for the average business. …

Charlie Cook reviews election surprises in the National Journal.

…Beyond the symbolism and images, big mistakes were made and Democrats seem happy to blame President Obama and the economy and not accept responsibility for pursuing an agenda that turned independent voters, who had voted by an 18-point margin in 2006 for Democrats, to vote for Republicans by an 18-point margin in 2010, according to exit polls.

This huge shift from one midterm election to the next, by a group that constitutes 26 percent of the electorate, is seismic. It is not a matter of turnout or partisan intensity; it is a clear indication that Democrats alienated voters in the middle who saw an agenda in 2009 and 2010 that was quite different and much more ideological that the one described in 2006 and 2008.

For this, the bulk of House and Senate Democrats deserve responsibility but don’t seem to be accepting it. …

Clive Crook offers Obama some tips on how to win back voters.

…I think many of the policy outcomes under Obama have been good. But instead of owning the policies from the start, he was backed into them. Not just sometimes, but every time.

To recover in 2012 Obama will need a stronger economy, which should happen. He will need the GOP to discredit itself in Congress, which seems likely. It would also help if the Tea Party learned nothing from Delaware, Nevada, and Colorado, and kept harming its own prospects, which looks plausible too. But the hardest thing is that from now on Obama must lead with more conviction, and choose to disappoint either the left or the centre, not both.

Obama’s unconstrained policy preferences (unlike mine) are evidently more progressive than centrist. For the sake of argument, suppose those preferences are correct. Suppose his uncompromised agenda would be good for the country. As a practical matter, he would still need to judge how far the country is willing to be moved. A good leader has to anticipate those limits, not blunder into them every time, as he has. From a tactical point of view, he should also bear two other things in mind. One is that the left despises compromise, making it much harder to please than the centre. The other is that the left, even if you let it down, is not going to vote Republican.

In the National Journal, Josh Kraushaar previews the election landscape of 2012.

…In the House, the Republican wave couldn’t have come at a better time for the ascendant party. The GOP now has unilateral control of redistricting in key battleground states for the upcoming election cycle. That will allow the GOP to protect many of their newfound majority-makers and redistrict other Democrats out of existence. And that’s on top of reapportionment. The states slated to gain House seats – Arizona, Florida, Georgia, Nevada, South Carolina, Texas, Utah, and Washington — as a whole tilt in favor of Republicans. The ones projected to lose representation are predominantly Democratic: Illinois, Iowa, Louisiana, Massachusetts, Michigan, New Jersey, New York, Pennsylvania, and Ohio.

Republican State Legislative Committee Executive Director Chris Jankowski estimated the GOP will gain between 25 and 30 additional House seats from the reapportionment and redistricting process alone, a number that makes it all the more difficult for Democrats to win back the seats necessary to retake the majority. Republicans already are slated to hold between 241 and 244 seats in the new Congress, their largest majority since 1946.

…Pelosi’s decision to stick around as minority leader is another factor that bodes well for House Republicans protecting their majorities in 2012. … 

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In the Daily Beast, Howard Kurtz gives a grudging center-left comparison of the president and his predecessor.

…The contrast could hardly have been sharper. Bush, with his short, declarative sentences, so sure of himself he felt no need to probe further on one of the most divisive ethical issues of his tenure. Obama, with his finely rendered prose, meandering around as he inspects the subject from various angles, almost like a think-tank analyst.

Eugene Robinson, a Washington Post columnist who has been an enthusiastic supporter of the 44th president and has been granted interviews and invites to group luncheons, wrote that Obama’s 60 Minutes appearance was “uninspired and uninspiring,” offering “no vision of a brighter tomorrow.”

…Still, it felt like we were watching The Decider vs. The Agonizer. The man who approved torture and the man who tortures himself. …

David Harsanyi calls the Dems on their spending addiction in light of the deficit commission’s recommendations.

…Democrats believe we have a taxing problem — more specifically, a not-taxing-the-rich-enough problem — rather than a spending problem. How many times have we heard the silly platitude about having to “pay” for tax cuts? We pay for spending, not tax cuts.

But that particular impenetrable philosophical divide is just the beginning. Outside of military spending, the co-chairs found that one of the most effective areas to save money — around $30 billion yearly — was by shaving 10 percent of the federal workforce and freezing all salaries.

Not a big deal, considering USA Today recently reported that the number of people in the massive federal workforce earning more than $150,000 had doubled since January 2009 — long after Washington supposedly understood the magnitude of the problem.

As you know, public employees are the wellspring of left-wing political support. The American Federation of State, County and Municipal Employees was the single largest outside spender on the 2010 elections. Public-sector unions spent more than the U.S. Chamber of Commerce despite what you may have heard. And they spent taxpayer dollars. What are the chances of Democrats cutting 10 percent of that support?

What’s more holy than a government pension? An entitlement program, of course. Democrats aren’t interested in “reforming” these programs; they’re interested in finding ways to pay for them. There’s a difference. (Remember, the last time liberals decided it was time for reform, Washington took over an eighth of the economy.)…

We have commentary from the Corner on the deficit commission report. Up first, Samuel Staley comments on lax goals that the deficit commission set to reign in out-of-control government spending.

I’m wading through the Powerpoint of the deficit-reduction committee. While it doesn’t seem to pull punches on how desperate our fiscal condition has become, I can already see it’s not going far enough. Their goal is to eliminate annual federal deficits in 30 years! They have also set a long-term goal of reducing federal tax revenues to 21 percent of GDP. While that’s much lower than now, we need to get federal, state, and local government spending to below 20 percent if we really want to promote growth, according to the late economist Gerald Scully. Even more radical fiscal surgery will be needed if we really want to get a handle on federal spending.

Next from the Corner, Bob Stein lists his comments on the deficit commission’s report.

…Here’s what I don’t like:

…? Although the plan says it would try to cap revenue as a share of GDP at 21 percent, there is nothing in the plan that would do so. Gradually, productivity will push a larger share of income into the higher marginal tax brackets, resulting in higher revenue relative to GDP.

…? The plan calls for increasing the tax base for Social Security. This is a large tax hike for many workers.

…? The tax plan raises the cap-gains and dividends tax rates to 28 percent. …

Also from the Corner, Anthony Randazzo criticizes some of the deficit commission’s premises.

…The report perpetuates the belief that we need to wait until recovery sets in to start making reforms, and it argues that government should be investing in education, infrastructure, and high-value R&D to promote growth.

These wrong-direction ideas are all well-intentioned and understandable. But we can’t start cutting the deficit without recognizing that true recovery will only take hold once the current government interventions — stimulus spending, cash-for-clunkers, quantitative easing, HAMP, etc. — preventing the realignment of resources in the economy are removed. Moreover, any deficit-reduction plan that continues to believe government investment in the economy will promote growth is likely to be a failure.

Throwing more federal money at education has not proven to be successful, while local-level reforms — such as Washington D.C.’s — have yielded much higher returns. While there is certainly a role for government in maintaining a national infrastructure, continuing to focus on infrastructure spending as a means of boosting recovery is reaching levels of cognitive dissonance. And the argument that the private sector picks winners and losers in development better than government is a tired one, but still accurate and applicable.

 Nevertheless, when it comes to specifics for cuts in the plan, there are some good ones. Here is a sample…

And last from the Corner, Yuval Levin points out that the deficit commission’s positions are a surprisingly realistic start for Democrats.

The preliminary report from the co-chairs of the president’s deficit commission makes for a very plausible leftmost boundary of the serious fiscal-policy debate. If this is the Obama administration’s starting position in the conversation about deficit and debt reduction, it will be a serious position and a constructive conversation. They will obviously need to be willing to move rightward on some key issues (especially the entire health-care question, which is the report’s most glaring and serious weakness, and is at the heart of our crisis of public finances). But on social security, discretionary spending, and many of the proposed tax reforms, this is a very good start.

The people who treat even this as going too far and “simply unacceptable” (to borrow the phrase employed by the outgoing Speaker of the House) are simply not serious about the problems we confront, and not ready for the kind of debate the country needs to have about how to get out of the hole we have been digging for ourselves and how to get beyond the social-democratic welfare-state fantasy that has dominated our political imagination for a century and think seriously about what genuine democratic-capitalism with a responsible safety net for the poor ought to look like.

Jennifer Rubin also weighs in on the report.

…Second, it is quite extraordinary that the plan puts forth a credible version of tax reform. Did you expect the commission to come forward with a reduction in the corporate tax rate and a top individual rate of 24 percent? I sure didn’t. This represents a fundamental shift for Democrats, at least those on the panel who embraced the essential principles of the Reagan and Bush tax cuts. But, you say, what about the changes to the home mortgage deduction? We’ll have to do the math, but with a drastic reduction in individual rates, they may be “worth it.” And, bluntly, it would also cause people to more closely examine how much house they can afford. (If you trust the market, once the subsidy goes away, demand would lessen and prices should come down, making housing somewhat more affordable.)

And finally, we need to be clear-eyed about the defense cuts. We are fighting a global war on terrorism, may find ourselves embroiled in a military confrontation with Iran, and must continue to build missile defense systems. The cuts have to be assessed in light of our security needs and the threats we face. Republicans who embrace a robust, internationalist foreign policy should be wary.

In sum, I’m mildly shocked it was as good as it was. Conservatives would do well to embrace the chunks of it they can and offer plausible alternatives to the rest (e.g., repealing ObamaCare, for starters).

Jennifer Rubin adds to her commentary on the deficit commission report.

As I observed yesterday, the debt commission came out with a preliminary report that was better than expected from the perspective of conservatives and an anathema to liberals. The Wall Street Journal editors outline some of the negative aspects of the report: adhering to ObamaCare, too much timidity on discretionary spending cuts and entitlements, and an anti-jobs hike in the payroll tax. But the editors are mildly impressed…

…House Republicans should react accordingly, which means taking what they like from the commission report and making it part of their own budget proposals. If Senate Democrats and Mr. Obama want to regain any fiscal credibility, they’ll be willing to listen and talk. If not, the voters will certainly have a choice in 2012.

To a large extent, then, the report is a useful political document for the right. It helps sniff out who is serious about spending restraint and who is not, and it embraces a methodology for tax reform that conservatives can support and liberals almost certainly can’t. (Let the “rich” pay have a top marginal rate of 24 percent? Oh the horror!) …

The WSJ editors look at another failed aspect of Obamacare.

…Mr. Obama declared at the time that “uninsured Americans who’ve been locked out of the insurance market because of a pre-existing condition will now be able to enroll in a new national insurance pool where they’ll finally be able to purchase quality, affordable health care—some for the very first time in their lives.”

So far that statement accurately describes a single person in North Dakota. Literally, one person has signed up out of 647,000 state residents. Four people have enrolled in West Virginia. Things are better in Minnesota, where Mr. Obama has rescued 15 out of 5.2 million, and also in Indiana—63 people there. HHS did best among the 24.7 million Texans. Thanks to ObamaCare, 393 of them are now insured.

States had the option of designing their own pre-existing condition insurance with federal dollars in lieu of the HHS plan, and 27 chose to do so. But they haven’t had much more success. Combined federal-state enrollment is merely 8,011 nationwide as of November 1, according to HHS.

This isn’t what HHS promised in July, when it estimated it would be insuring 375,000 people by now, and as many as 400,000 more every year. …

…Pre-existing conditions sometimes do lead to genuine hardships, and polls show that voters are worried about the relatively rare horror stories. More modest fixes could bring more stability to the individual market, while Republicans support a boost in funding for the high-risk pools that 35 states offer as a safety net. The government didn’t need to annex a sixth of the economy and create a multitrillion-dollar entitlement to help 8,011 people.

In the Telegraph Blogs, UK, Toby Harnden looks at the changes in journalism on both sides of the pond.

Often caught between the two, I’ve always been fascinated by the differences between journalism in Britain and the United States. One of the most striking things is the contrast between the self-image of journalists on either side of the Pond. In Britain, journalists (who prefer the term “hacks”) mostly view themselves as grubby tradesmen, living proof of Nicholas Tomalin’s dictum that “the only qualities essential for real success in journalism are rat-like cunning, a plausible manner and a little literary ability”.

In the US, journalists have traditionally been much more self-important, viewing themselves as part of a noble profession to be venerated and respected in the same way as doctors, lawyers and accountants. They have tended to see themselves as part of the Establishment. The difference has often been on display at White House press conferences, with long-winded, respectful, often pompous American questions contrasting with short, aggressive and impertinent British questions (which sometimes elicit much better answers). …

…Perhaps related to the breaking down of the divide between British and American journalism is the blurring of the old distinction between print and the web. Some very big names are moving to web-only outlets. Tina Brown recently hired Howard Kurtz at the Beast while Howard Fineman and Peter Goodman have gone to the Huffington Post. The journalistic trend in the US is away from the insider, access-based American model towards the iconoclastic, reporting-with-attitude British model. …

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Tony Blankley wants new members of Congress to pay attention to foreign policy as well.

…There always has been a tendency for new, inexperienced candidates for federal office to be more focused initially on domestic issues – because their voters are. But for GOP congressmen and senators, their fundamental values – a powerful patriotism, a sense of right and wrong and a practical understanding of human nature as capable of great evil – tends over time to lead them to a firmer foreign and military policy posture than that held by liberal Democrats.

…For instance, regarding the New START with Russia, many of its skeptics are established neoconservatives who don’t contest the objective but seriously doubt the effectiveness of the details. To call such men and women isolationist is risible.

Reaganite foreign policy experts have always been much more skeptical of particular disarmament treaties. And with China rushing ahead on its nuclear program, we need to consider our stockpile requirements in the Chinese context every bit as much as we do the poorer Russian capabilities. …

In the WSJ, Allysia Finley offers tough love in an open letter to California.

Listen up, California. The other 48 states—your cousin New York excluded—are sick of your bratty arrogance. You’re the Lindsay Lohan of states: a prima donna who once showed some talent but is now too wasted to do anything with it.

After enjoying ephemeral highs and spending binges, you suffer crashes that culminate in brief, unsuccessful stints in rehab. This cycle repeats itself every five to 10 years, as the rest of the country looks on with a mixture of horror and amusement. We’d feel sorry for you if you didn’t constantly flip us the bird.

Instead, we’re making bets on how long it will be before your next meltdown. Oh, wait—you’re already melting down.

You’ve racked up nearly $70 billion in general obligation debt, and that doesn’t include your $500 billion unfunded pension liability. Your own analysts predict you’ll face a hole of at least $80 billion over the next four years. …

…So here’s our final warning: When you inevitably crash and burn, don’t count on us to bail you out.

Kyle-Ann Shiver, in Pajamas Media, says that California wins the Dumbest State award.

It’s the proverbial morning after and with votes counted, California has won the Dumbest State Award in a historic landslide of monstrous proportions.

All Californians can now see Greece from their bedroom windows.  No need to even go to the backyards and crane their little necks.

In the coming years, the unions, who have been bilking Californians in a protection-racket type scheme, will be taking to the streets in massive, destructive temper tantrums just like those out-in-the-cold workers in other failed socialist states across the big pond. It won’t be pretty.

…Not to be outdone by Pelosi voters, those Californians in the 13th district reelected Rep. Pete Stark, the traitor who has made a name for himself trashing the very Constitution he swears to protect and defend.  Pete Stark has the ignominious distinction of having told a constituent to her face that the federal “government in this country can do most anything.” Never has a U.S. representative so blatantly shredded the very document he is sworn to preserve, a document that expressly tells our federal government the many things it cannot do.  Every Californian who pulled the lever for this Benedict Arnold ought to hang his head in shame and should never show his face in public again. …

In Transterrestrial Musings, Rand Simberg comments on watching Californians give up their last opportunity to turn the state’s financial situation around.

We seem to have reached a tipping point here. Too many Californians think that they can have both lunatic environmental and economic policies, and a viable economy. Almost every initiative went the wrong way, as did the gubernatorial and senatorial elections, though the former was partly a result of an awful Republican candidate — Jerry Brown might have been beatable by Chuck DeVore.

It’s a positive feedback situation with increasingly negative results. The economic ignorami in the electorate vote for idiotic propositions, and send economic ignorami to Sacramento in the legislature and governor’s mansion, resulting in flight by the sensible, continuing to distill and concentrate the idiocy in the electorate. It will end in bankruptcy (the state is basically already there), and then they’ll demand a bailout from the rest of the country. Fortunately, with the new Congress, they won’t get it. But I don’t know if the state is salvageable at this point. It’s some of the best real estate on earth, but its current inhabitants don’t deserve it, and have squandered a great legacy.

It’s an opportunity for other states to poach a lot of space companies, I think.

Want to know why CA is broke? A post in Maggie’s Farm explains part of the reason why California dreamin’ has turned into a nightmare. Hundreds and hundreds of state agencies.

California Academic Performance Index (API) California Access for Infants and Mothers California Acupuncture Board California Administrative Office of the Courts California Adoptions Branch California African American Museum California Agricultural Export Program California Agricultural Labor Relations Board California Agricultural Statistics Service California Air Resources Board (CARB) California Allocation Board California Alternative Energy and Advanced Transportation Financing Authority California Animal Health and Food Safety Services California Anti-Terrorism Information Center California Apprenticeship Council California Arbitration Certification Program California Architects Board California Area VI Developmental Disabilities Board California Arts Council California Asian Pacific Islander Legislative Caucus California Assembly Democratic Caucus California Assembly Republican Caucus California Athletic Commission * California Attorney General

Those are just the As. The rest are below the fold.

Ilya Somin, Of Volokh Conspiracy writes an op-ed in the Richmond Times-Dispatch, which provides an overview of the Obamacare litigation, and explains how the states and organizations contesting the constitutionality of the law might actually win.

…In the most recent of the three rulings, Florida federal District Court Judge Roger Vinson wrote that the government’s claim that the mandate is clearly authorized by existing Supreme Court precedent is “not even a close call.” He points out that “[t]he power that the individual mandate seeks to harness is simply without prior precedent,” because no previous Supreme Court decision ever authorized Congress to force ordinary citizens to buy products they did not want.

…The federal government claims that Congress has the power to impose the mandate under the Commerce Clause, the Necessary and Proper Clause, and the Tax Clause of the Constitution. On the first two claims, Judge Vinson ruled that Supreme Court precedent doesn’t clearly support the government, thereby enabling the plaintiffs’ lawsuit to go forward. He outright rejected the government’s claim that the mandate is constitutional because it is a “tax.” It is instead a financial penalty for refusing to comply with a federal regulation. As Judge Vinson pointed out, congressional leaders consistently emphasized before the law’s enactment that it was not a tax.

…A series of flawed Supreme Court decisions have expanded Congress’ Commerce Clause authority well beyond what the text of the Constitution permits. These rulings allow the federal government to regulate almost any “economic activity.” But, as Judge Vinson emphasized, even they do not give Congress the power to regulate people “based solely on citizenship and on being alive.” Far from engaging in “economic activity,” people who decide not to purchase health insurance are actually refraining from doing so.

…Some defenders of the law claim that the individual mandate is similar to federal laws banning racial discrimination against customers by businesses such as motels and restaurants. But federal antidiscrimination laws apply only to existing businesses already engaged in commercial activity in the regulated industry. By contrast, uninsured individuals are not businesses and, by definition, are not participating in the insurance industry. …

In Volokh, Somin posts on his article above and adds these thoughts:

…The op ed focuses primarily on the recent district court decisions in the Virginia, Michigan, and Florida cases, which I blogged about in more detail here, here, and here. So there will be few new points for those who have closely followed my previous VC writings on the mandate litigation. My main purpose in the op ed was to briefly analyze the three rulings and explain why the anti-mandate plaintiffs have a strong case that could well prevail, even though they still face an uphill struggle.

I would add that the results of the recent election modestly increase the chances that the plaintiffs will win. Federal courts are unlikely to strike down a major federal policy initiative that has strong presidential, congressional, and popular support. But last week’s elections brought to power a House majority that opposes the Obama health care plan, strengthened plan opponents in the Senate, and reaffirmed that it remains unpopular (although the election turned primarily on the economy, the health care plan probably increased the magnitude of the Democrats’ defeat). A recent AP poll found that 52% of likely voters oppose the plan, with 41% supporting it…

…Ideally, such “legal realist” factors should not influence judicial decision-making. But the historical evidence suggests that they often do. Judges are unlikely to strike down the mandate merely because the political winds are blowing against it. But those inclined to do so for other reasons are now less likely to be deterred by fear of a showdown with a president, Congress, and public opinion unified against them.

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Christopher Hitchens comments on a number of serious issues in Iraq.

…On the morning that I received that note, the Washington Post carried a brief and heart-breaking report. It described a lawsuit, brought to the Baghdad District Court by a coalition of “civil society and human rights organizations.” The suit demanded that elected Iraqi parliamentarians give back the salaries they have so far earned, and forego future payments, until they have overcome the paralyzing torpor that has deprived the country of the fruits of its hard-won right to vote. A short while ago, the same alliance of forces convinced the nation’s Supreme Court to order the lawmakers to resume their negotiations.

…There are still immense dangers facing any Iraqi who wants to express a democratic or nonsectarian opinion, but these dangers do not come so much from the state. They come from the prowling, sleepless murder-gangs who, almost every day, find ways of killing civilians either selectively or en masse. By some kind of convention, we still agree to refer to these people as insurgents. (In the recently fizzled debate over WikiLeaks, the hideous casualties the “insurgents” inflict were also described semi-neutrally in the press as coming from “other Iraqis,” though witnesses to the recent massacre of a Baghdad Christian congregation spoke of hearing foreign Arab accents among the assassins.) But in what possible sense can such actions be described as a rebellion or an insurgency, especially in a society that now offers its citizens at least some of the means of lawful dissent and redress?

This is the aspect of our intervention that is unquantifiable. As with Afghanistan, we cannot know the long-term effect of promulgating a federal constitution, holding elections, opening clinics and schools for women, and attempting to protect the rights of minorities. And the Afghan and Iraqi governments are such wretched simulacra of the principles they are supposed to embody that results are even harder to gauge. The principles may even be discredited by association with corruption. Still, we have to remain on the side of those Iraqis and Afghans who fight against such desperate odds to make these principles real and to carry them into the future. …

The nation has experienced a recession, but government has not. Mark Steyn writes about the unsustainability of the ever-growing government.

…In the year after the passage of Obama’s “stimulus”, the private sector lost 2.5 million jobs, but the federal government gained 416,000 jobs. Even if one accepts the government’s ludicrous concept of “creating or saving” jobs, by its own figures four out of every five jobs “created or saved” were government jobs. “Stimulus” stimulates government, not the economy.

…Jobs rarely “come back”. …After the recession of the early Nineties, America lost some three million jobs in manufacturing but gained a little under the same number in construction. Then the subprime hit the fan, and America now has more housing stock than it will need for a generation. So what replaces those three million lost construction jobs? What are all those carpenters, plasterers, excavators going to be doing? Not to mention the realtors, home-loan bankers, contract lawyers, rental-income accountants and other “professional service” cube people whose business also relies to one degree or another on a soaraway property market.

What if we’ve run out of “next”?

For the Obamatrons, government is what comes next. Government jobs, government “light rail” projects, government “green jobs” pork projects…Non-jobs for a Potemkin Main Street. …

…The new class war in the western world is between “public servants” and the rest of us. …To reprise my favorite Ronald Reagan line:

We are a nation that has a government — not the other way around.

…Alas, in Reagan’s own country, we are atrophying into a government that has a nation. That’s what November 2nd was about.

In the Telegraph, UK, Toby Harnden discusses Obama’s reaction to the elections, and gives an overview of where this may lead.

…It seems much more likely that Obama will double down on his strategy during his first two years, moving to the Left to appease his critics there and challenging Republicans, much as President Harry Truman did after 1946 when he railed against the “do-nothing” Republican-controlled Congress. Two years later, Republicans lost 75 House seats and Truman was returned to the White House.

This time, however, Republicans do not control Congress. They won back the House but fell short in the Senate.

Their failure to secure ascendancy in both chambers may be a blessing in disguise. The defeat of candidates like Christine O’Donnell of Delaware and Sharron Angle of Nevada has helped fuel a complacent Washington consensus that the Tea Party failed. Never mind that his grassroots anti-tax, small-government “constitutional conservatism” movement provided the energy and momentum behind the biggest congressional election victory in 62 years.

…Best of all for Republicans is that Democrat Senator Harry Reid will remain Senate Majority Leader after squeezing home against Angle, and Representative Nancy Pelosi, the ousted House Speaker, looks set to become House Minority Leader. This gives Republicans the opportunity to run against the Obama-Reid-Pelosi triumvirate again in 2012 – their very presence indicating that Democrats failed to learn from 2010.  …

In NRO’s - The Feed, Greg Pollowitz posts a piece on Notre Dame’s karma.

After honoring President Barack Obama during last May’s commencement ceremonies, the University of Notre Dame has seen less contributions and is feeling financial heat. In May 2009, debate was heated over the fact that Notre Dame, a Catholic university, invited President Obama to speak at its graduation. It was controversial mainly because some of Obama’s policies are contrary to church doctrine. Katie Walker of American Life League (ALL) tells OneNewsNow the school has paid a price. “Notre Dame has come out $120 million short for the fiscal year in which President Obama spoke during commencement and received an honorary law degree,” she reports. She believes that staggering number is in direct response of alumni and others around the country who feel scandalized “that Notre Dame would host this man and give one of the most pro-abortion presidents in the nation’s history an honorary law degree.”

Jennifer Rubin discusses liberal reactions to the White House continuing to steer hard left.

…The less-deluded Democrats are furious now, convinced that the White House is on a political suicide mission. The defeated Democratic gubernatorial candidate Alex Sink is beside herself:

“They got a huge wake-up call [on election day], but unfortunately they took a lot of Democrats down with them,” said Sink of the White House.

…“I think they were tone-deaf,” she said. “They weren’t interested in hearing my opinion on what was happening on the ground with the oil spill. And they never acknowledged that they had problems with the acceptance of health care reform.”

The new law, she said, is “unpopular particularly among seniors” — a key voting bloc in the Sunshine State. …

In the Weekly Standard Blog, Victorino Matus highlights Charles Lane’s projections on how the Census will affect electoral votes.

As the Washington Post’s Charles Lane reminds us,

Since the U.S. population continues to flow South and West, reapportionment will probably add House seats in red states and subtract them in blue states. Thus, the Census looks like a setback for Democratic chances to win the 270 electoral votes necessary to become president.

…Take the 22 states that voted for John McCain as the GOP base in the 2012 presidential election. That base is about to grow from 173 electoral votes to 180. And if Republicans hold it, they could get to 271 by carrying just six more states—Florida, Ohio, North Carolina, Indiana, Virginia and Nevada—each of which has voted GOP in a majority of the last ten elections.

As it happens, all six of these states, except for North Carolina, will have Republican governors next year, and all six, except for Nevada, will have Republican state legislatures. …

Indians are about to say to the president, “Ghandi, schmandi. Give it a rest please!” Jim Yardley in the NYTimes discusses Obama’s continual references to Gandhi, but then mentions a serious indication of Obama’s ignorance.

… India’s political establishment, if thrilled by the visit, is also withholding judgment. Mr. Obama was faulted in New Delhi for some early missteps, including his comment that China should play an active role in South Asia. His battering in the midterm elections has raised concerns about his political viability. And many Indian officials still hold a torch for former President George W. Bush, who was popular for pushing through a landmark civilian nuclear deal between the two countries.

Mr. Obama’s visit is intended to dispel those doubts and deepen a partnership rooted in shared democratic values. Since taking office, he has already met several times with Prime Minister Manmohan Singh, as well as with other delegations of Indian officials. On several occasions, he has cited his deep admiration for Gandhi, perhaps as evidence of his fondness for India.

“The impression on the Indian side is every time you meet him, he talks about Gandhi,” said Shekhar Gupta, editor of The Indian Express, a leading English-language newspaper, adding that the repeated references struck some officials as platitudinous. … 

Marty Peretz has more on the one note president.

…as an eminent Indian journalist put it to Yardley, “…the impression on the Indian side is every time you meet him, he talks about Gandhi.” But, as Sheryl Stolberg also of the Times, points out this morning, all that students questioning him wanted to discuss was “jihad.” And he was ready with that bull-shitty quarter truth that “Well, the phrase jihad has a lot of meanings within Islam and is subject to a a lot of different interpretations.” …

…Obama continued: All of us recognize that this great religion in the hands of a few extremists has been distorted to justify violence towards innocent people that is never justified. So, I think, one of the challenges that we face is how do we isolate those who have distorted notions of religious war.

This does not sit well with the billion Indians, especially Hindu Indians, who are sitting ducks for jihadist terror. and it certainly did not sit well with the president’s listeners. (Not that the Hindus -or the Israelis- are completely free of their own fanatics.) But, believe me, what defines Islam these days is not the Sufis.

…Even among our “allies” in the Yemeni government, among our “fighting comrades” in Afghanistan, among our friends in the Pakistani sort-of state, there appears to be no anger at the debauchery of random liquidation. And not in the Sudan either. These are the countries of the salient jihad: Al-Qaeda plus the indifference of the rest. If the Israelis were to permit it they, too, would be the victims. …

Don Boudreaux makes a very important delineation about what it means for the government to be “pro-business”, in Cafe Hayek.

…There are two ways for a government to be ‘pro-business.’  The first way is to avoid interfering in capitalist acts among consenting adults – that is, to keep taxes low, regulations few, and subsidies non-existent.  This ‘pro-business’ stance promotes widespread prosperity because in reality it isn’t so much pro-business as it is pro-consumer.  When this way is pursued, businesses are rewarded for pleasing consumers, and only for pleasing consumers.

The second, and very different, way for government to be pro-business is to bestow favors and privileges on politically connected firms.  These favors and privileges, such as tariffs and export subsidies, invariably oblige consumers to pay more – either directly in the form of higher prices, or indirectly in the form of higher taxes – for goods and services.  This way of being pro-business reduces the nation’s prosperity by relieving businesses of the need to satisfy consumers.  When this second way is pursued, businesses are rewarded for pleasing politicians.  Competition for consumers’ dollars is replaced by competition for political favors.

The fact that more than 200 American business executives are in India with the President is cause to fear that any pro-business policies he might adopt will be of the second, impoverishing sort.