Tuesday, April 29, 2008

Taibbi on Hillary: Pork Queen

The Queen of Pork
By Matt Taibbi
May 1, 2008 | Rolling Stone

One Sunday about three months ago — on the day before Martin Luther King Jr. Day, in fact — I got out of bed very late and lazily switched on CNN. On the TV screen, Sen. Hillary Clinton was smiling broadly and wearing a black jacket over some strange Oriental get-up. She was standing next to influential black pastor Calvin Butts, in front of the latter's famous Abyssinian Baptist Church in Harlem. 

Camera bulbs were flashing. An important announcement was about to be made.
Butts, it turns out, was endorsing Hillary over Barack Obama in the upcoming New York primary. I raised an eyebrow. It's not that I expected Butts — perhaps the most prominent black minister in New York — to automatically endorse Obama simply because he is black. But I certainly didn't expect to see Butts go on national television and make swipe after thinly veiled swipe at Obama, sounding like he was reading a script prepared for him by Hillary's campaign team.

"This is no time for waiting or hoping for solutions," quipped Butts, making an obvious reference to The Audacity of Hope author Obama and echoing the hope-ain't-shit theme that had been pounded on the campaign trail by the Clinton camp over and over again.

The predominantly black crowd barely had time to scratch its collective head and ask what the hell was going on before the endorsement party abruptly ended, leaving the stunned audience to break out in scattered boos and dueling chants of "Harlem for Obama!" and "Hillary! Hillary!" The strange scene left some in the audience wondering what exactly they'd just seen. "What's frustrating about ministers endorsing candidates," an Obama supporter named Rafael Mason wondered to a reporter, "is it makes you question if their decision is representative of the church or if there's a backroom discussion going on."

Months later, while researching pork-barrel spending by the presidential candidates, I came across three federal budgetary awards requested by Hillary Clinton in this fiscal year:

$446,500 Abyssinian Development Corporation, New York, to support and expand youth and young-adult after-school and summer programs (Discretionary Grants — Juvenile Justice Programs) COM 08 D Rangel Schumer Clinton

$893,000 Abyssinian Development Corporation programs for at-risk youth, New York (Discretionary Grants — Juvenile Justice Programs) COM 08 D Rangel Clinton Schumer

$146,000 Abyssinian Development Corporation, to support and expand youth- and family-displacement prevention programs (Social Services — Department of Health and Human Services) LABHHS 08 D Clinton Schumer

If you haven't already guessed, Calvin Butts is the chairman of the Abyssinian Development Corporation. The above-mentioned $1.5 million in federal funds that Hillary requested on behalf of Butts' organization had been approved by Congress a month before she received the minister's timely endorsement. Maybe the minister was following his conscience in endorsing Hillary — but then, it never hurts to have a little financial incentive when it comes to difficult decisions like these, does it?

All politicians buy and sell favors, and presidential candidates are worse than most. In this race, none of the three remaining candidates are exactly squeaky clean when it comes to the doling out of federal budgetary largess. Even John McCain, who boasts that he doesn't request "earmarks," as pork-barrel spending is known on the Hill, actually has at least one to his name. And Barack Obama has not been shy about steering taxpayer dollars to people who might be able to help his presidential bid.

But of the three candidates, no one can touch Hillary Clinton for her expertise in dispensing federal pork. She is fast becoming a sort of Heavyweight Earmark Champion of the Beltway — one think-tank analyst has even dubbed her the "Queen of Pork" — who excels as a favor trader not only in sheer quantity but in brazenness as well. A recent examination of this year's earmark requests shows her solidifying her champion status more and more with each passing year, even under the ostensibly bright lights of a presidential campaign.

Here's how earmarks work: Each year, Congress allocates trillions of dollars, with most of it doled out to federal agencies, which in turn spend their budgets according to their own established — and usually competitive and merit-based — criteria. But in a small percentage of cases, members of Congress can direct the agencies in question to award their monies to specific organizations or companies, which are almost always located in that member's home state. In an unsurprisingly high number of cases, the money is given to a company whose executives just happen to have donated heavily to the member of Congress in question. That's what an earmark is. Some are legit and go to worthy causes, but on the whole they are sleazy enough to have moved the Democrats to pass earmark-reform legislation after they took control of Congress in 2006. The reform forced members of Congress to attach their names to the earmarks in question, and Democrats pledged to cut the number and cost of earmarks in half.

They blew it. This past year, in fact, members of Congress jammed more than $17 billion of earmarks into the budget — a thirty percent increase from the previous year. In March, House Speaker Nancy Pelosi abandoned plans to impose a one-year moratorium on earmarks — a reform that was also rejected by the Democrat-controlled Senate.

"The Democrats studiously refuse to do anything serious about pork — for the simple reason that they are every bit as addicted to it as the Republicans and have no intention whatsoever of lessening a system of self-aggrandizement that they believe gives them political success, nay permanence," says Winslow Wheeler, a former Senate aide who worked on defense earmarks before being forced into retirement for complaining about it publicly. "They will find — hopefully sooner than they think — that the permanence they crave is undermined by their self-directed behavior."

Hillary's $1.5 million gift to Calvin Butts came from three of her earmarks in the fiscal year 2008. She had a lot of them. In fact, between 2002 and 2006, Clinton secured more than $2.2 billion in earmarks, many of them attached to defense-spending bills, where she has unusual influence as a member of the Senate Armed Services Committee. Hillary succeeded in securing twenty-six earmarks to the 2008 defense bill worth a total of $148 million — a number that dwarfed that of any Democrat except committee chairman Carl Levin. Barack Obama, by contrast, had only one request attached to the defense bill.

Hillary's defense earmarks benefited some of the world's largest weapons producers, many of which have factories in New York. Among the most prominent include Northrop Grumman, which Hillary singled out for $6 million to develop a new radar system; Plug Power, for whom Hillary secured $3 million for a backup power system for Pentagon operations; and Telephonics, which Hillary gave $5 million for an intercom system for Black Hawk helicopters.

Her biggest coup of all was a multi-billion-dollar contract she helped to secure for Lockheed Martin to build the Marine One presidential helicopter — a project derided by insiders as a typical example of Pentagon waste. "Oh, the presidential-helicopter thing is a classic boondoggle," says one congressional source. "They could have taken any old Black Hawk helicopter, put a nice interior in it and a decal on it, and it would've been OK. Instead, we got this thing that costs four times as much. It's nuts."

Indeed, the Pentagon confirmed in March that the helicopter Hillary made sure would be built at Lockheed's plant in Owego, New York, would, in fact, cost $400 million per unit — more than the modified Boeing 747 used as Air Force One. You heard right: $400 million for a single fucking helicopter.

With most of her earmarks, Clinton makes sure to get a return on her investment of taxpayer money. Lockheed donated $10,000 to Hillary's Senate campaign in 2006 and provided her with plenty of free rides on its planes. Plug Power officials have reportedly donated some $7,100 to her campaigns since 2003, and several Northrop executives gave the max to her presidential campaign. In that light it seems odd that Hillary was critical of a deal to award a refueling tanker project to Northrop — except that she has also received maximum contributions from executives at the rival bidder, Boeing. Meanwhile, employees from Corning, for whom Hillary secured a $1 million earmark, donated $133,000 to her presidential campaign. The list goes on and on.

But Hillary's most brazen earmark this presidential-election season had nothing to do with defense. It had to do, oddly enough, with rock music. Back in June 2007, Hillary attempted to write a $1 million earmark for a museum commemorating the Woodstock festival in Bethel, New York. Not that anyone should have anything against Woodstock, but it seems weird to ask taxpayers to pay for it — especially when the project is principally funded by one of America's richest men, a media mogul named Alan Gerry.

Listed as number 297 on the annual Forbes list of wealthy Americans, Gerry reportedly has a net worth of $1.6 billion. Beyond the fact that he hardly needs the money, there is this to consider: On June 30th of last year, exactly three days after the earmark was officially inserted into an appropriations bill, Gerry and his wife both made maximum donations to Hillary's presidential campaign, totaling $9,200.

The deal stank, even by congressional standards. When Republican opponents introduced an amendment to kill the earmark, the measure passed easily. "Most of our amendments fail by fifty or sixty votes," says John Hart, a spokesman for Sen. Tom Coburn, an anti-earmark crusader who introduced the amendment to kill the handout. "But this one passed with no problem. It was so over-the-top."

The thing that's really vile about earmarks is how cheaply we all get sold out. Two million of your taxpayer bucks in exchange for a $5,000 donation? Greenlighting a billion-dollar Pentagon boondoggle for a couple of free flights? Hey, if you're going to sell us out, at least fucking bargain. But it's not their money, and they never do.

Hillary isn't alone among the candidates in selling us down the river for a few campaign contributions. Unlike Clinton, who has only disclosed the pork she actually succeeded in doling out, Barack Obama has supplied reporters with a list of every earmark he requested. But the list only served to highlight Obama's own pork, including $8 million for a "High Explosive Air Burst Technology Program" that would have been overseen by General Dynamics. Obama's Illinois finance chairman, James Crown, not only sits on the board of General Dynamics, he and his wife are both Obama bundlers who have raised more than $200,000 for Obama's campaign. Obama was also alone among the remaining candidates last year in using his leadership PAC to hand out money to politicians whose support he sought in his presidential run.

McCain, meanwhile, has run a finger-wagging, holier-than-thou campaign. He insists he doesn't request any earmarks, even though he has: In 2003, he doled out $14.3 million to Luke Air Force Base in Arizona. He also insists that he is "the only one the special interests don't give any money to," even though he has lapped the field when it comes to surrounding himself with lobbyists. Public Citizen, the nonprofit watchdog group, has identified sixty-six current or former lobbyists who are either major fundraisers or bundlers for McCain, a number that far exceeds either Clinton or Obama.

Like Hillary, McCain has not been shy about doing favors for his lobbyist friends while milking their companies for campaign contributions. As chair of the Senate Commerce Committee, McCain obliged several firms, including Paxson Communications and Glencairn, by proposing an amendment that would have enabled them to own multiple TV stations in the same market. Though the measure was never adopted, Paxson rewarded McCain with a flight on its private jet, and a Glencairn executive made donations to McCain's campaign a month after he held the hearing.

But neither McCain nor Obama have been able to match Clinton when it comes to playing on their connections for campaign contributions. Last fall, while Obama was answering questions about using his leadership PAC to give $10,000 donations to politicians who supported him in key campaign-trail states, no one blinked when former senator Bob Kerrey showed up in Iowa to campaign for Hillary. Kerrey these days is president of the New School in Manhattan, which, like Butts' Abyssinian Development Corporation, scored more than $1.5 million in federal earmarks this year courtesy of Hillary. The school also boasts three trustees who are "Hillraisers" or Hillary bundlers — meaning they've raised $100,000 apiece for her presidential run. The notorious scam artist Norman Hsu, who raised $850,000 for Clinton before being indicted for fraud last December, was another New School trustee.

Nor is Hillary shy about funneling earmarks to big donors who don't even need the money. Real estate developer Robert Congel, another Hillary earmark recipient who has graced the Forbes list, scored $10 million in pork courtesy of Hillary for use in developing, of all things, a megamall. Why the hell we need to pay taxes to help billionaires build luxury shopping malls is a troubling enough question, without even considering the $26,700 that Congel and his wife have contributed to Hillary over the years. That's all it costs to get $10 million out of a U.S. senator? Where are the pitchforks?

Earmarking is only one small slice of the political cash game, but it has the advantage of being a slice we can actually see and quantify. And what we see of Hillary's record here suggests a couple of things. One: She has no qualms whatsoever about trading your tax money for personal political capital. And two: She likes to trade much of that money for favors in the defense sector, even if it hurts the people doing the defending.

As is often the case with defense earmarks, some of Hillary's pork spending is taken out of the Army's Operation and Maintenance budget, which is supposed to be used for troop-support initiatives like body armor. In simple terms, Hillary's rampant marauding of the defense budget takes money away from troops in the field. Soldiers wind up short on equipment, and Clinton winds up with hefty campaign contributions and free flights on private jets. Carrying charges, my boy, carrying charges!

If earmarks are just a little slice of the pie in the Washington cash game, imagine what would happen if Hillary got to serve up the whole meal. It's been so long since the Clintons were in office that we scarcely remember all those funny-sounding names of scandal-plagued campaign contributors — names like Roger Tamraz, "Charlie" Trie, Wang Jun and John Huang. When it comes to the Clintons and money, there was always somebody with a story buried beneath the line item, a hard-to-find dollar figure stuck to every Calvin Butts or Robert Congel. Are we really ready to go back to those days full time?

Stiglitz on true, hidden cost of war

Nobel laureat Joseph Stiglitz reveals true cost of war during Kellogg visit
By Matt Golosinski
April 21, 2008

The United States is bleeding money. That's the alarm sounded by Joseph Stiglitz in his new book The Three Trillion Dollar War, a narrative that details what he and co-author Linda Bilmes, a Harvard professor of public finance, say are the staggering hidden costs of America's current Iraq War. He brought his discussion to the Kellogg School on April 18, speaking to a capacity audience from Kellogg and the larger Northwestern University and Evanston communities.

To hear the former World Bank chief economist and senior vice president detail the economic circumstances associated with the conflict, now in its fifth year and costing U.S. taxpayers $12 billion each month, is to enter a realm that rivals the bleak, madcap world conjured by Joseph Heller's classic satire Catch-22. For Stiglitz, a 2001 Nobel Prize winner, the tragedy of war is compounded by significant — and deliberate, he contends — flaws in how the Bush Administration has accounted for the war's expenses.

Citing the broader economic implications that extend beyond official budgetary figures that he said obscure the war's reality, Stiglitz believes the U.S. government is "vastly undervaluing" the war's impact on the economy, including its negative influence through lost opportunities that might otherwise shore up domestic infrastructure and education or enhance technological innovation. Stiglitz calculated that one-sixth of the Iraq War's cost would fund Social Security for the next 75 years, while "just a few days of fighting" would provide healthcare to all U.S. citizens currently lacking it.

By using a cash accounting system that minimizes up-front costs while obscuring or ignoring massive long-term expenditures, such as those associated with equipment repair and replacement or healthcare outlays for soldiers injured or killed in the war, the U.S. government has convinced some Americans that the Iraq conflict carries a far more modest price tag than Stiglitz and Bilmes say is accurate. In fact, Stiglitz, a professor at Columbia Business School, believes his own $3 trillion figure is "conservative." The real figure may be closer to $4 or even $5 trillion, he said, noting that the Bush Administration's current tally is only $600 billion — dramatically larger than its initial estimate of $50 to $60 billion, but well off the mark that Stiglitz has calculated using what he considers a more accurate system called accrual accounting. He said that this approach assesses many of the inevitable future costs associated with the war, including demobilization and restoring the military to its pre-war strength. But chief among these costs is long-term care for those killed or disabled by the conflict, expenses that Stiglitz said will continue for the next 50 years.

"Disability costs are a big chunk of change," he told the audience in the Kellogg School's James L. Allen Center, noting that the country is paying about $4.3 billion a year in healthcare for those soldiers injured in the first Iraq War, which lasted only 100 days in 1991. "Today, the costs of a years-long war will surely be much greater and will go on for decades," Stiglitz said, adding that improved battleground medical treatment has resulted in more soldiers surviving — his figures were 15 for every 1 fatality — a favorable development, but one that carries significant lifelong costs to care for those people. "We have created an unfunded entitlement as big as the hole in our healthcare system."

While the Bush Administration's cash accounting practice gives the appearance of fewer expenses, Stiglitz said it also drives short-term decisions that can have deadly consequences. He cited the examples of soldiers who were issued no body armor early in the war, or those whose vehicles were inadequately armored against improvised explosive devices. Equally troubling, he said, were instances of soldiers who, after being maimed and hospitalized, discovered that they were docked by the military for the remainder of their contracted service pay. (Congress is likely to change this policy soon, Stiglitz said.)

Deliberate accounting choices also play a part in the United States' official tally of its soldiers killed or injured in Iraq, Stiglitz said. Official injury numbers represent only half of the actual total, he said, citing data he and Bilmes obtained from veterans' organizations who themselves had to use the Freedom of Information Act to get the full statistics released. The government, Stiglitz indicated, only counts injuries it considers the result of direct hostile conflict, not those it reckons as accidents. As an example, he noted that any U.S. casualties from a helicopter shot down during daylight fighting would be numbered among the official tally. If that same helicopter, flying at night because day travel is too dangerous, crashes without coming under enemy fire, the injuries are not officially tabulated as battle casualties, Stiglitz said. Importantly, however, the U.S. taxpayer will be responsible for funding all such war injuries, whether or not these appear as "official" in government records.

In addition, the economics surrounding how the war is being fought — with significant privatization through contractors like Blackwater and Halliburton — creates "perverse incentives," according to Stiglitz. With salaries up to five times higher for private security forces, the U.S. military is faced with serious financial challenges when trying to recruit talent or retain those eligible for discharge at the end of their tours. "The administration wanted to convince citizens that we can do war on the cheap," Stiglitz said, but its policies actually have increased the military's costs since the armed services must now offer more money in salary and bonuses to compete with private contractors.

Stiglitz also pointed to what he considered broader economic mistakes made during the last eight years of the Bush Administration, which have contributed to the U.S. deficit ballooning from $6 trillion to $9 trillion, with about a third of that increase "directly due to the Iraq War," according to Stiglitz. What's more, that economic circumstance has resulted in some 40 percent of war costs actually being funded by foreign countries, through investments in instruments such as Treasury bonds, a situation Stiglitz said leaves the United States "more vulnerable to global volatility." He faulted "lax regulation" and a "reckless increase in liquidity" by the Federal Reserve under former Chairman Alan Greenspan and current Chairman Ben Bernanke as contributing to the recent real estate bubble and credit crunch, and considered this fiscal policy an attempt to prop up a fundamentally flawed economy whose collapse during the early years of the war could have eroded public support for the military intervention.

Stiglitz, chairman of the Council of Economic Advisers from 1995-1997, also criticized the Bush Administration for cutting taxes during wartime, thereby passing the costs on to future generations.

For the first time in U.S. history, "We have put this war entirely on our credit card," he said.

Wednesday, April 16, 2008

The tax simplification dodge

The Simplification Dodge
By Robert Kuttner
March 24, 2008 | Prospect.org

There are two broad views of what we mean by tax reform. One school decries the complexity -- a byzantine tax code, impenetrable forms, public and private tax bureaucrats, and self-defeating or inefficient incentives that add up to sheer economic waste. The other school objects to who pays, reminding us that the rich have used their political influence to kill the system's progressivity, leaving ordinary taxpayers with too much of the bill. Both schools can agree that the system ought to be streamlined and that the complexity is often the consequence of special-interest provisions that harm economic efficiency as well as efficient tax collection.

In practice, however, the tax- simplification theme is often a political stalking horse for an even less equitable (though perhaps simpler) tax system. Proposals such as the Forbes flat tax, or the postcard-size tax return, or Gov. Mike Huckabee's proposal to abolish the IRS in favor of (what would be astronomical and regressive) national sales taxes invariably tout how simple they would be, but their deeper purpose is to reduce the share of taxes that the rich pay.

Michael Graetz's book, 100 Million Unnecessary Returns, is an intellectually serious and moderately conservative version of this first genre. At the heart of his plan is a 10 percent to 14 percent value-added tax (VAT) that would underwrite a general exemption of $50,000 for an individual and $100,000 for a couple or family. As a consequence, the 100 million households of his title would no longer file income-tax returns. His book is mostly about the purported benefits of the plan to simplification and to competitiveness, not the worsening regressivity.

By contrast, David Cay Johnston's Free Lunch is a shining example of the second school. In an era of over-caffeinated armchair pundits, Johnston is the rare old-fashioned reporter -- he covers taxes for The New York Times -- with a capacity for both investigative legwork and indignation on behalf of regular people. His previous book, Perfectly Legal, explores the Internal Revenue Service's losing war with ever more convoluted tax schemes, virtually all for the benefit of the wealthy. These schemes have shifted taxes onto moderate-income people while conveniently adding to the popular backlash against the IRS. Johnston shows why low-income people using the earned income tax credit are far more likely to be audited than rich people using baroque tax shelters. With audit resources restricted by a conservative Congress, the IRS can fathom the former but not the latter.

In Free Lunch, Johnston offers an appalling sampler of the other strategies used by the affluent to win tax breaks and other hidden subsidies at the expense of both the Treasury and the broad public interest. In one chapter, he explains how the tax code rewards America's large corporations for moving production abroad. As if it were not enough that the Chinese government offers huge subsidies and repressed workers,

A company with operations in the United States and another country can borrow money at home, deducting the interest and thus lowering American taxes. At the same time, it can earn interest on the untaxed cash it keeps overseas. So when an American company closes a factory here and moves it to China, provided it meets some technical rules, it can deduct the interest charges on its United States tax return while building up profits overseas that may never be taxed.

The tax treatment of U.S. foreign corporate profits is complex -- but who cares? Though the complexity serves incidentally as a full-employment act for a costly private bureaucracy of tax attorneys and accountants, the real function is reducing corporate taxes (and also subsidizing outsourcing). That's why corporations lobby for tax simplification about as often as cops get parking tickets. In a nice grace note, Johnston recalls the system's lineage. The treatment of foreign taxes was originally worked out by Herbert Hoover's Treasury secretary, Andrew Mellon, to reduce the big oil companies' American taxes while offering the Saudis stable royalties. As Johnston comments, "Adam Smith would not have approved."

In his well-researched and narrated stories covering more than a dozen facets of the subsidy-for-the-rich game, Johnston makes clear that the "complexity" of our tax system is not the result of tax bureaucrats, or wonky legislators, or big-spending liberals. Rather, it reflects elaborate schemes invented by wealthy people seeking to evade taxes or find other ways to underwrite private riches at public taxpayer expense. Johnston reminds us that complexity per se is a second-order problem. The primary problem is who pays and who benefits.

Graetz, a Yale law professor and former assistant secretary of the Treasury, downplays this key issue in 100 Million Unnecessary Returns. I admired his previous book, Death by a Thousand Cuts, co-authored with his Yale colleague Ian Shapiro. From this earlier volume, a superb case study of how the right had successfully demonized progressive taxation, I had mistakenly pegged Graetz as a process reformer and moderate liberal. I was curious to learn what kind of liberal case he might make for a VAT.

But 100 Million Unnecessary Returns, though ingenious, relies heavily on familiar conservative premises and rhetorical ploys. He begins by expressing alarm at the projected deficit. If the Bush tax cuts are allowed to expire in 2010, he writes, "federal revenues will exceed 20 percent of GDP, a level reached only once since World War II." But maybe we need federal revenues to exceed 20 percent of gross domestic product. Restoring a progressive income tax system to finance an adequate level of public outlay after decades of public neglect is an option not on Graetz's radar.

Worse, though the current deficit is clearly the result of deliberate policy choices by George W. Bush to reduce taxes on the rich and finance his war through borrowing, Graetz blames the deficit on generic irresponsibility of unnamed "politicians." Because future generations do not vote, Graetz contends, "deficit finance is catnip to politicians." But oddly, neither Bill Clinton nor the Democratic congressional majorities of the mid-1990s were susceptible to that catnip when they took political risks to balance the budget. The most elementary intellectual honesty by a Yale law professor would lay the blame for the deficit where it belongs.

Having begun with a misleading jeremiad against deficits, Graetz then offers a thoughtful discussion of the excessive use of tax deductions as instruments of public policy. But unlike Johnston (or parts of his own previous book with Ian Shapiro), Graetz once again does not cite the paramount source of the estimated $700 billion in revenues lost to tax expenditures -- the outsized political influence of financial elites.

Graetz also proposes to cut the already reduced corporate income tax rate even further, to the range of 15 percent to 20 percent, purportedly as a boost to competitiveness. As justification, he cites other advanced economies' lower corporate rates -- the unfortunate result of tax competition and the influence of Graetz's counterparts overseas. He also offers standard conservative alarms on Social Security and Medicare, which he says will have to be "trimmed," and he likes individual savings accounts as a substitute for part of Social Security.

Graetz makes four arguments for his value-added tax scheme. First, the federal tax code is too complex; second, government inefficiently pursues many social and economic objectives via tax subsidies instead of directly; third, our failure to have a VAT leaves U.S. industry at a competitive disadvantage; and finally, a VAT would increase savings rates. This is all true as far as it goes. He is also usefully and somewhat scornfully critical of the two competing conservative proposals, a national sales tax and a flat tax. However, his own preferred remedy, which he terms a "Competitive TAX," leaves much to be desired.

Graetz thinks he sees the elements of a grand bargain in a VAT. He quotes a marvelous line from Larry Summers that a VAT will be enacted as soon as Democrats recognize its potential as a money machine and Republicans realize it is regressive. Indeed, one can defend the regressivity of Europe's value-added taxes because the services they pay for are highly redistributive. By analogy, it might make great sense to have, say, a 10 percent to 14 percent value-added tax if it paid for national health insurance. Graetz's value-added tax, however, would neither add net revenues nor finance additional public services. It would replace a more progressive income tax with a far less progressive tax on consumption.

To make his VAT less regressive, Graetz would offer credits for people making under $30,000 a year (and require them to file a new tax form to receive the credits!). But the working middle class earning $30,000 to $100,000 would likely be socked with higher net taxes. And despite his erudition, Graetz doesn't bother to compute just how much more regressive the resulting system would be.

Would his proposal simplify the tax system, the premise for his entire scheme? Most tax complexity is the problem -- and the opportunity -- of those in the upper brackets. They are the taxpayers who make extensive use of shelters -- and under Graetz's plan they would still file income tax returns. For the rest of us, filing a tax return is just not that big a deal. The vast majority of people with earnings under $100,000 use the standard deduction. Even for those moderate- income people who itemize, it's a matter of keeping decent financial records and perhaps paying a few hundred dollars to a tax-preparer. As Graetz admits, getting rid of the tax expenditures that cause the worst complexity (and regressivity) is a political problem. If Congress can muster the political will to render the income tax simpler and fairer with the addition of a VAT, it can do so without one.

The next president will need to make the tax system simpler and fairer for three big reasons: to restore fiscal balance, to raise adequate funds for public needs, and to restore trust in the tax system itself. The best way to achieve those goals is not to add a VAT but to restore progressive rates and repeal tax preferences that cause most of the system's complexity, regressivity, and failure to collect adequate revenues.

Lowry: The underside of (Obama's) elitism

If I had to critique Obama's controversial San Francisco speech, I'd say he was mostly wrong, but he was certainly sniffing around the edges of a big, uncomfortable truth that most politicians have turned their noses away from for the past 30 years.

Lowry is right that many Americans simply like owning guns and/or hunting. And many Americans are simply religious, since that is how they were raised, and how their parents and parents' parents were raised. America has been a gun-toting, God-fearing country from the start.

But America has
not always been a paranoid, angry, and deluded gun-toting, God-fearing country. That is what's different today.

Unfortunately, the Rust Belt's gun-loving Christians for whom Obama's heart bleeds don't want to hear his message. They distrust populists. For them "liberal" is a dirty, four-letter word. Worst of all, they've been socialized to believe that if you're rich, it must be because you were smarter or worked harder than everybody else; and if you're too poor to pay the bills and put your kids through school, it's because you were dumb or lazy. And that is their downfall. They've swallowed the "land of opportunity" Kool-Aid.

So all that's left is to blame their economic plight on welfare-collecting blacks and Mexicans, and damned liberals in Washington giving welfare (and affirmative action) to said blacks and Mexicans.

That is why they will vote for a guy like McCain who cuts taxes for the
rich and corporations even as he admits that "those manufacturing jobs are not coming back" to America, who said it would be "fine by me" to keep their enlisted children in Iraq for "100 years," who will side with Wall Street and K Street every time to the detriment of working class interests, rather than vote for a "liberal" like Obama who wants to give them affordable health care and better education and pay for it by raising taxes on the rich and U.S.-based corporations who boost their stock price by exporting American jobs.

Call me an elitist, call me a pessimist who "hates America," but I think things will have to get even worse and stay that way before the God & Guns crowd finally wises up.
Conservatives like Bush & Cheney may hunt on occasion, they may like their BBQ, they may speak in simple, declarative sentences -- but they still wipe their asses with $100 bills, and they have enough money to never work another day in their lives, and to ensure the same for their children and grandchildren. Yet most God-fearing Americans trust an "average" guy like GW Bush over some damned lib'rul "elitist." Go figure.

(BTW, on the "elitist" scale, does it make any difference that out of the 3 presidential candidates Obama is the poorest? Guess not. Elitism must be defined by your state of mind, not your income.)

The Underside of Hope
By Rich Lowry
April 15, 2008 | National Review

Barrack Obama was caught saying something he believes.

At a San Francisco fundraiser, away from the prying eyes of the press, Obama reflected on why small-town voters in Pennsylvania and the Midwest seem resistant to his appeal. He said those areas had lost jobs for 25 years. Therefore, people "get bitter, they cling to guns or religion or antipathy to people who aren't like them or anti-immigrant sentiment or anti-trade sentiment as a way to explain their frustrations."

Obama has apologized for his phrasing while defending the substance of his statement. And why not? He was retailing an article of left-wing orthodoxy going back centuries: that the working class is distracted by religion and other peripheral concerns from focusing on its economic interests and embracing socialism.

Versions of Obama's insight have been expounded by a world-famous 19th-century economist (Karl Marx), by a 1960s New Left philosopher (Herbert Marcuse) and by a best-selling contemporary liberal writer (Thomas Frank, author of What's the Matter With Kansas?), among many others. It's such a commonplace that Bubba-friendly Bill Clinton wrote in his memoir that Republicans wanted to undermine confidence in government so voters would be more receptive to "their strategy of waging campaigns on divisive social and cultural issues like abortion, gay rights, and guns."

At bottom, this is a profoundly insulting point of view. Consider Obama's formulation. He makes it sound like no one would be a hunter or a Christian absent economic distress, that economic circumstances drive people into such atavistic habits. Has he considered that some people simply enjoy hunting? And view the right to bear arms as a guarantor of American liberty? As they used to say, "God made men, but Sam Colt made them equal."

The assumption is that only liberal attitudes are normal and well-adjusted: If only these small-town people could earn more income, get an advanced degree, and move to a major metropolitan area, then they could shed their chrysalis of social conservatism.

Obama prides himself on his civility, but it has to go much deeper than dulcet rhetoric. A fundamental courtesy of political debate is to meet the other side on its own terms. If someone says he cares about gun rights, it's rude to insist: "No, you don't. It's the minimum wage that you really care about, and you'd know it if you were more self-aware." But Democrats have an uncontrollable reflex to do just that. Since the McGovernite takeover of their party, they have struggled to work up enthusiasm for Middle American mores. (Since 1980, only Bill Clinton managed it, which is why he was the only Democrat elected president in three decades.)

When the liberal reflex is coupled with a Ivy Leagueeducated candidate who seems personally remote and uncomfortable with everyday American activities, it's electoral poison. After the likes of Al Gore and John Kerry, Republicans had to be wondering, "Could Democrats possibly nominate yet another candidate easily portrayed as an out-of-touch elitist?" With Obama, Democrats appear to be responding with a resounding "Yes, we can!"

Obama brings a special measure of arrogance to the standard liberal critique of Middle America. His candidacy has always been characterized by two paradoxes. How can he be so hopeful at the same time he and his wife, Michelle, portray America as a sink-pit of despair? And how can he claim to be a uniter when he's an orthodox liberal who has risked little or nothing for bipartisan outreach?

Now, we know. Obama defines hopefulness as liberalism, specifically liberalism as embodied by himself. Only with Obama's election will America be redeemed from its harrowing false consciousness. We will be unified, not by Obama reaching out to conservatives to hammer out compromises, but by conservatives shedding their bitterness and becoming Obama liberals.

This is the underside of hope: arrogance fading into a secular messianism based on the fallenness of everyone who disagrees with Barack Obama. And it's small-town voters who are deluded?

Obama was right: We SHOULD feel bitter

Bitter? You Should Be! Why Obama Is Right
By Nicholas von Hoffman
April 15, 2008 | TheNation.com

Last week Barack Obama, destiny's tot, suggested blue-collar Americans are feeling bitter about their financial condition, which has been on a bit of a decline during the last five, ten, fifteen, twenty years or so. Rival politicians immediately pounced and they've been whaling on him ever since.

How dare Obama suggest people are bitter? Americans are not bitter! Americans are happy, proud, peppy, content and optimistic!

Maybe. But if millions of them are not bitter and/or angry at this point, there is probably something wrong with them.

In his new book, The Big Squeeze: Tough Times for the American Worker, Steven Greenhouse of the New York Times writes, "Since 1979, hourly earnings for 80 percent of American workers (those in private-sector, non-supervisory jobs) have risen by just 1 percent, after inflation. For male workers, the average hourly wage actually slid by 5 percent since 1979.... the nation's economic pie is growing, but corporations by and large have not given their workers a bigger piece." A 1 percent raise in almost thirty years? Still not bitter?

And who is getting ever larger chunks of pie? The Wall Street Journal has isolated some of the most energetic pie pigs: "the wealthiest 1 percent of Americans earned 21.2 percent of all income in 2005, according to new data from the Internal Revenue Service. That is up sharply from 19 percent in 2004, and surpasses the previous high of 20.8 percent set in 2000, at the peak of the previous bull market in stocks. The bottom 50 percent earned 12.8 percent of all income, down from 13.4 percent in 2004 and a bit less than their 13 percent share in 2000." You can be sure that a substantial portion of the bottom half of the population is living in small towns similar to the ones in which Obama sniffed out a degree of bitterness.

Even the 1 percent increase in hourly wages over the past generation or so is illusory. During the same period, unavoidable expenses--such as medical insurance, child care and transportation--have expanded explosively. Whatever progress that's been made in living a little better has been achieved by working a lot harder and a lot longer.

"In a survey by the Families and Work Institute," Greenhouse writes, "two-thirds of employed parents responded that they didn't have enough time with their kids and just under two-thirds said they didn't have enough time with their spouses. The typical American worker toils 1,804 hours a year, 135 hours more per year than the typical British worker, 240 hours more than the average French worker, and 370 hours (or nine full-time weeks) more than the average German worker. No one in the world's advanced economies works more."

Compared to workers in other countries, where the standard of living is as high or higher than it is in the United States, Americans, with fewer and shorter vacations, are worked like donkeys. Politicians repeatedly insist on telling the voters that America is the richest country in the world, which is a true enough statement but also provides little comfort to the massive population of under-appreciated workers, in small towns and big cities, who don't get their share.

Every election season, candidates pretend to tear up as they assure millions of Americans who are working for less--or not at all--with the phrase the Clintons made famous:"I feel your pain." That empty empathy will get you a bag of groceries in the basement of that church across town.

This year, the politicians are back with their speeches about how they are going to arrange for vocational classes so the voters will be able to compete in the twenty-first century. The first decade of the twenty-first century is already almost over. Time to drop that line, lest the small-town people turn bitter.

Obama is getting drubbed for saying that people, in their bitterness, are looking to God and their guns. If you had to choose who to go to for economic assistance, Hillary or God, who would you be clinging to? As for the guns, American politicians, with their frequently broken promises, are just lucky they aren't picking birdshot out of their derrières.

Tuesday, April 15, 2008

Gen. R. Cody (Ret.): Iraq is breaking our Army

Military Conflict
By Steve Coll
April 14, 2008 | NewYorker.com

General Richard A. Cody graduated from West Point in 1972, flew helicopters, ascended to command the storied 101st Airborne Division, and then, toward the end of his career, settled into management; now, at fifty-seven, he wears four stars as the Army Vice-Chief of Staff. This summer, he will retire from military service.

In 2004, in a little-noted speech, Cody described the Army's efforts to adapt to its new commitments. (It was attempting to fight terrorism, quell the Taliban, invade and pacify Iraq, and, at the same time, prepare for future strategic challenges, whether in China or Korea or Africa.) The endeavor was, Cody said, like "building an airplane in flight."

Last week, the General appeared before the Senate Armed Services Committee and testified that this method of engineering has failed. "Today's Army is out of balance," Cody said. He continued:

The current demand for our forces in Iraq and Afghanistan exceeds the sustainable supply, and limits our ability to provide ready forces for other contingencies. . . . Soldiers, families, support systems and equipment are stretched and stressed. . . . Overall, our readiness is being consumed as fast as we build it. If unaddressed, this lack of balance poses a significant risk to the all-volunteer force and degrades the Army's ability to make a timely response to other contingencies.

In 2006, the Army granted eight thousand three hundred and thirty "moral waivers" to new recruits, meaning that it had accepted that number of volunteers with past criminal charges or convictions. The percentage of high-school graduates willing to serve is falling sharply from year to year; so are the aptitude-exam scores of new enlistees. To persuade soldiers and young officers to reënlist after overlong combat tours, the Army's spending on retention bonuses increased almost ninefold from 2003 to 2006.

In normal times, when an active four-star general implies in public that the Army is under such strain that it might flounder if an unexpected war broke out, or might require a draft to muster adequate troop levels, he could expect to provoke concern and comment from, say, the President of the United States. Some time ago, however, George W. Bush absolved himself of responsibility for his Iraq policy and its consequences by turning the war over to General David H. Petraeus, Cody's four-star peer, and the champion of the "surge" policy, who will testify before the Senate Armed Services Committee this week.

Petraeus, too, is a loyal Army man, but he has distinctive views about military doctrine; he has long advocated a change in orientation by the Army, away from preparations for formal warfare between governments and toward the challenges of counter-insurgency and nation building. ("Learning to Eat Soup with a Knife" is the title of a book co-written by one of Petraeus's advisers, Lieutenant Colonel John A. Nagl.) To buy time in Iraq, Petraeus has lately argued within the Pentagon that the Army must buck up and accommodate his need for heavy troop deployments, despite the strains they are creating, and he has publicly fostered an unedifying debate about how to most accurately assess failure and success in Iraq, as if such an opaque and intractable civil conflict could be measured scientifically, like monetary supply or atmospheric pressure.

There is, of course, empirical evidence of declining violence in Iraq, which has coincided with Petraeus's command. The additional troops he requested have certainly been a factor, but not even Petraeus can say how much of one. At best, during the past year he has helped to piece together a stalemate of heavily armed, bloodstained, conspiracy-minded, ambiguously motivated Iraqi militias. Nobody knows how long this gridlock will hold.

A war born in spin has now reached its Lewis Carroll period. ("Now here, you see, it takes all the running you can do, to keep in the same place.") Last week, it proved necessary for the Bush Administration to claim that an obvious failure—Iraqi Prime Minister Nuri Kamal al-Maliki's ill-prepared raid on rival Shiite gangs in Basra, which was aborted after mass desertions within Maliki's own ranks—was actually a success in disguise, because it demonstrated the Iraqi government's independence of mind.

In this environment, it is perhaps unsurprising that General Cody's plainspoken, valedictory dissent about the Army's health attracted little attention. His testimony marked a rare public surfacing of the contentious debates at the Pentagon over the strategic costs of the surge. These debates involve overlapping disagreements about doctrine (particularly the importance of counter-insurgency), global priorities (Iraq versus Afghanistan, for instance), and resources. At their core, however, lies Cody's essential observation: the Army is running on fumes, but Petraeus and his fellow surge advocates are driving flat out in Iraq, with no destination in sight. It hardly matters whether Petraeus would recommend keeping a hundred and thirty thousand or more combat troops in Iraq for a hundred years, or only ten. Neither scenario is plausible—at least, not without a draft or a radical change in incentives for volunteers.

Flag officers in the Bush Administration's military have learned that they can be marginalized or retired if they speak out too boldly. The Administration does not romanticize the role of the loyal opposition. Last month, Admiral William J. Fallon, the commander of U.S. forces in the Middle East, announced his early retirement, under pressure from the White House, after he argued privately for a faster drawdown from Iraq, to bolster efforts in Afghanistan and to restore a more balanced global military posture. Publicly, Fallon also described the "drumbeat of conflict" against Iran as "not helpful."

The suppression of professional military dissent helped to create the disaster in Iraq; now it is depriving American voters of an election-year debate about the defense issues that matter most. These include the nature and the location of the country's global adversaries and interests, the challenge of a revitalizing Al Qaeda in Pakistan, the conundrum of Iran, the failing health of the nuclear nonproliferation regime, and, to address all this, the need for a sustainable strategy that restores the Army's vitality and makes rational use of America's finite military resources. To implement such a strategy, it would not be necessary to rashly abandon Iraq to its fate, but it would be essential, at a minimum, to reduce American troop levels to well below a hundred thousand as soon as possible. In the long run, success or failure for the United States in Iraq will not hinge on who wins the argument about the surge; it will depend on whether it proves possible to change the subject.

Sunday, April 13, 2008

IRS audits of big corporations down 66%

Hmmm.... The IRS is auditing fewer big corporations, but it is finding more in unpaid taxes from the firms it does audit. Does this mean that big corporations, having realized they are much less likely to be audited, are taking much greater liberties with U.S. tax laws?

When the Bush Administration refuses to adequately fund the IRS, the IRS does what it can with the resources it is provided -- and that means doing more quicker audits of individuals and small businesses, and fewer longer audits of large corporations.

IRS eases pressure on Big U.S. companies, study says
By Lynnley Browning
April 13, 2008 | International Herald Tribune

Most Americans dread tax season. But corporate America seems to have less to fear from the Internal Revenue Service than it used to, according to a new study.

The IRS's scrutiny of the biggest U.S. companies is running at a 20-year low, according to the study, conducted by Transactional Records Access Clearinghouse, or TRAC, a research group affiliated with Syracuse University.

The study, made public Sunday, points to "a historic collapse in audits." It found that major corporations - defined as those with assets of at least $250 million - have about a one in four chance of being audited, down from about three in four in 1990.

Individuals have about a 10 percent chance of being audited, more than double the odds in 2000, according to the IRS.

The study's findings stand in sharp contrast to the tough talk coming out of the IRS in recent years. The report suggests that the agency is shifting its focus away from big corporations to small companies, private partnerships and other private entities, a move that tax lawyers said was consistent with trends they were seeing.

But IRS officials, who reviewed the report prior to its release, said Friday that TRAC misinterpreted a basic shift in corporate America in recent years. Companies of all sizes, as well as wealthy individuals, have embraced certain partnerships and other opaque entities in an effort to minimize taxes, the officials said.

Sometimes those arrangements cross the line into tax abuse. Because large companies increasingly use such partnerships, the IRS has stepped up scrutiny of these entities.

"These aren't mom-and-pop grocery stores we're auditing," said Barry Shott, a deputy IRS commissioner.

The IRS has not reduced its scrutiny of large corporations, he said. Instead, it is focusing on the private partnerships some of these companies use to avoid paying taxes.

Shott said the IRS supplied data to TRAC but that the group, which gathers information from government agencies under the Freedom of Information Act, misinterpreted it. TRAC, which has gone to court to force the IRS to turn over more detailed data on audits, stood by its findings.

While the report singled out the IRS's increased focus on partnerships, it also said that the agency was increasingly targeting smaller corporations, or those with no more than $50 million in assets. Such companies require less time and money to investigate, something that is important to the IRS, which has long complained that it is underfinanced. Such investigations, however, typically bring in fewer unpaid tax dollars than audits of large corporations.

"I'm still trying to find my jaw on the ground from the finding that audit rates for the big boys are plummeting," said Dean Zerbe, the national managing director of Alliant Group, a tax planning company. While corporations account for a small percentage of all taxes paid to the U.S. government, their share of the total has been rising in recent years.

Last year, corporations of all sizes accounted for nearly 23 percent of all federal income taxes paid, or around $395 billion, according to previously-released data from TRAC. That is up significantly from 2001, when corporations accounted for 13.7 percent of all taxes paid, an all-time low. Individuals paid the rest.

The IRS is bringing in more money from corporations of all sizes through its audits. Last year it brought in over $59 billion in unpaid tax revenues, according to statistics from the agency. That is nearly double the level of 1998 and is consistent with a steady climb since then.

'Superman' approach to U.S. foreign policy

What this op-ed doesn't even touch on is that America has the luxury of this either-or debate just as long as it remains militarily and economically unassailable. What happens if America goes into a long economic decline, with huge national debt? (Our national debt is now over $9 trillion; the FY 2008 budget is about $3 trillion; and 9 percent of the FY 2008 budget will go toward interest payments on America's national debt -- about $870 for every U.S. citizen). Will we Americans choose to sacrifice our schools, our infrastructure, our health, and our children's future to continue funding a military that outspends every other country on earth, combined?

So, Ezra Klein's op-ed just scratches the surface.

What none of our leaders, with the possible exception of Obama, seems to realize is that we are almost right back to where we were on the eve of victory in WWII. It was a world where the great powers all recognized that balance-of-power equations were fundamentally imbalanced; where competing economic-military interests led inevitably to international conflict.

The Cold War started before WWII was even over. Even before victory was declared, Germany and Eastern Europe were already being carved up by the Allies and the Soviet Union. But the Cold War only forestalled the above-mentioned debate.

The Cold War has been over for 18 years, yet we are still slow to realize that the world hasn't really changed since 1945. America is ascendant, but not omnipotent. Competing national interests and values sometimes coalesce, but more often than not, lead to conflict.

American leadership -- while we've still got it -- must be be focused on building a rules-based and law-abiding world. We can't count on our military superiority to trump all other competing nations and interests forever, especially in a world where the U.S. economy is in decline, and resurgent countries like Russia, Venezuela, Saudi Arabia, and Iran hold the keys to the resources upon which we're all dependent.

Therefore, while it can, it is in America's own interest to use its great power -- which will decline, just as all great powers in history saw their power inevitably decline -- to build a more fundamentally just, transparent, democratic, and lawful international system.

I don't know exactly what that system would look like. But I imagine that it would mean, in part, forsaking institutions like NATO and the World Bank/IMF in favor of more inclusive, transparent, and democratic institutions like the UN. The UN is not perfect, but America has the power to improve the UN if it wants to.

Sen. McCain talks about building a "League of Democracies" to compete with the UN. This would be completely counter-productive and provocative, especially if such a league would be viewed as just another vehicle for U.S. influence under the guise of multi-national cooperation. But, to some extent, McCain's sentiments are correct: the UN should find ways to hold its members accountable for aggression, and undermining the values of democracy, human rights, and transparency. The US has the power and -- with a different Administration -- perhaps enough remaining moral credibility to lead this effort.

Achieving this vision of a more just, peaceful, democratic, and transparent world through collective submission to international laws and norms, would require nothing short of a revolution in international relations. It would require each nation to give up a measure of its precious sovereignty. It would require new or greatly strengthened international institutions like the UN and its International Court of Justice (aka World Court) to judge infractions and punish wrongdoers. Such a vision could not be realized in one U.S. presidential administration, or even a generation. But America should have the foresight to begin the hard work toward realizing this vision now. We cannot wait. If we miss this moment, history may pass us by, and our children and grand-children may lament that the less-than-morally-perfect Chinas and Russias of the world are dictating world affairs, not us.

A Superman Approach to Foreign Policy
By Ezra Klein
April 11, 2008 | American Prospect

Round and round the rhetoric went yesterday. Gen. David Petraeus and Ambassador Ryan Crocker were, if not masterful in their obfuscation, perfectly adequate. Success was never defined, and thus the conditions for withdrawal were never articulated. A healthier insurgency, we were told, required the presence of our troops to beat it back, and a weakened insurgency required the presence of our troops to press the advantage. Heads we stay in Iraq; tails we never leave.

And either way, we never talk about anything else. Aside from the odd, and very occasional, dip into arguments like whether we'll negotiate with Iran or attend the 2008 Summer Olympics, Iraq exerts near total domination over the foreign-policy discussion. Its presence in the election has actually served to obscure real disagreement over foreign-policy philosophies. Everyone who wants to bring the war to a close is declared a liberal. Those who want to see it continued are considered conservatives. That, however, is a misleadingly narrow space for discussion. There's a difference between being pro-war, anti-war, anti-this particular war, and anti-this kind of preventive war. Opposing our continued presence in a hellish quagmire, in other words, is different than actually articulating your philosophy on the use of force and the point of foreign policy.

Which is why Matthew Yglesias' new book Heads in the Sand: How the Republicans Screw Up Foreign Policy and Foreign Policy Screws Up the Democrats is actually that rarest of election-year tomes: A useful intervention into the debate. (Full disclosure: Yglesias is a contributor to this site and a friend of mine.) Rather than simply re-litigating the argument over the Iraq War, Yglesias situates the war, and the debate that led to the invasion, in the context of longer-running arguments about the proper direction of U.S. foreign policy. In particular, he laments the relative abandonment of the vision liberals have held dear since World War II -- that of a rules-based international order in which America sacrifices a certain amount of autonomy in order to gain a greater measure of legitimacy, and works mightily to create, preserve, and strengthen international institutions that let other countries do the same. Those who would promote liberal values, in other words, need also submit to them. This means, at times, restraining American power and even accepting that our agenda can be impeded by the intransigence of our allies and, occasionally, our adversaries. But better we endure smaller setbacks than revisit the brutal struggle for power that defined world affairs in the pre-internationalist period. Better those bureaucratic struggles than a return to what came before.

This vision underpinned the foreign-policy decisions of post-World War II presidents, but it was rarely articulated. The rhetoric of international affairs has long had a militaristic and even self-consciously heroic character. The "Greatest Generation," after all, is remembered for bravely saving the world from the menace of Hitler, not for the U.N. and Bretton Woods and the Marshall Plan, initiatives that ushered in an era of international cooperation and created structures that largely headed off further violent conflict between great powers. The moment was popularly defined by its heroism, even if its lasting legacy would be the work that went into preventing the necessity of such dramatic interventions in the future. This came out in the cultural products of the moment. Superman, created in 1938, appeared on the cover of his comic book shaking Hitler and Tojo by the scruff of their necks. Similarly, his patriotic contemporary, Captain America, was originally portrayed clocking Hitler in the jaw. Neither one received cover art that depicted diplomacy.

Yet the internationalist vision was more deeply interwoven into our cultural fabric than we often realize. Superman and Captain America were superheroes of an odd sort: tremendously powerful beings whose primary struggle was often to follow the self-imposed rules and strictures that lent their power a moral legitimacy. Neither allowed themselves to kill, and both sought to work within the law. Given their strength, either could have sought world domination, and even if they didn't, they could have been viewed with deep suspicion and even hatred by those who were convinced that they one day would seek world domination. It was only by following ostentatiously strict moral codes that they could legitimize their power and thus exist cooperatively with a world that had every right to fear them. Indeed, soon enough, both were forming communities of like-minded super beings (The Justice League for Superman, the Avengers for Captain America) and generally operating much like, well, the nation that birthed them. As Spiderman -- a later hero who, like so many heroes, bought into the idea that rules and restraint separated the good guys from the bad guys -- liked to say, "with great power comes great responsibility."

[Even the best superheroes are still extra-legal, i.e. vigilantes. If they submit to a strict moral code, it is still a moral code of their own making. Likewise, our international system is chaotic. That is, we still live in a might-makes-right world. America's moral leadership should be dedicated to making it a more rule-based and law-abiding world, with collective pressure and real consequences for those who break the rules. As Klein rightly points out, we must be the first to follow the rules which we preach at others to follow, not the last. We should lead by example, which requires, at times, restraining our own behavior -- because it is better for the world, and ourselves, in the long run. - J]

That strain of foreign-policy thinking was largely abandoned in the rubble of the Twin Towers. As Yglesias puts it, "9/11 marked the beginning of an enormous psychological change on the part of the American people." With a newfound sense of vulnerability, there was a newfound sense of fear. Restraint was a luxury, a nice ideal when we were primarily dealing with the problems of other people, but less desirable when our own lives were on the line. After 9-11, the country's foreign-policy debate contracted, and liberal internationalists, who had always been better at pursuing their agenda than selling it politically, were largely left out. Instead, the conversation was dominated by those on the right who believed in unilateral U.S military hegemony over the world, and those on the left who believed in a superficially multilateral U.S military hegemony over the world, with the option to revert back to unilateralism if other countries proved disagreeable. It was Michael O'Hanlon versus Richard Perle, and few even seemed to find that strange.

This, too, saw its expression in a new type of hero: Jack Bauer. If Superman and Captain America were the emblems of the national mood directly after World War II, Bauer expressed the national anxieties uncovered by 9-11. Rather than an invincible superhero, Bauer was but a man, one who could perish like any other, and was aware of not only his own vulnerability, but that of his family, his government, and his country. Though there were laws he was supposed to follow, the enormity of the dangers he faced and the ruthlessness of the enemies he encountered led him to break them almost constantly, and so he tortured, killed, and generally let the ends lay claim to whatever means they could think of. Indeed, he did it so often, and with such abandon, that he'll start Season 7 on trial for torture.

This, fundamentally, is the foreign-policy debate in our country. Liberals see America possessing tremendous power that must be tempered and legitimized by the rules we choose to follow and the restraint we choose to apply. Conservatives see great vulnerabilities that can only be assuaged through sufficient application of violence and will. And that's the choice: Do we want the foreign policy of Jack Bauer and John Yoo, or of Clark Kent and George Marshall? It's a question that Gen. Petraeus, sadly, has no answer for.

Taibbi: Hillary, Obama, and 'the worst possible scenario'

Hillary's Flimsy Case for the Nomination
By Matt Taibbi
April 5, 2008 | TheSmirkingChimp.com

In the space of three short months, I've contrived to write two lengthy, gloating political obituaries for Hillary Clinton, only to see both of them blow up in my face after fantastic eleventh-hour comebacks that ended with scenes of the Hillmeister doing the dual flabby-arm raise on CNN while gusts of confetti whooshed across the room, obscuring almost everything except the shocking results blaring out from the crawl on the bottom of the screen. There was a time when this race looked like it might become the most uplifting in a generation. It's now threatening to become the most divisive and disturbing. It is a good time to ponder how that happened — and to address a few of the other Frequently Asked Questions about this depraved circus that is now poised to continue well past Pennsylvania.

Isn't Hillary Clinton better qualified than Barack Obama to be president, given that she is the more experienced candidate?

The idea that Clinton is somehow more qualified to deal with international crises because she has more "experience" is one of the strangest things I've seen the media swallow whole in a long time, dating back to the "tiny, sand-covered, yet-to-master-the-art-of-plumbing nation of Iraq is an imminent military threat to the United States" fiasco. According to my calculations —worked out over many hours, using long division out to eighteen places —Clinton is a second-term senator, while Barack Obama, conversely, is a first-term senator. By any reasonable standard, both are political neophytes.

Clinton talks a lot about having visited "over eighty countries" —but then, Chelsea was with her on a lot of those trips, and I doubt folks are rushing to hand her the red phone. In case anyone has forgotten what exactly first lady Hillary Clinton really did all those years, here is a press account of a 1997 trip that she made to Senegal with her daughter: "Her first stop in Senegal was at Goree Island, where she peered through the 'Door of No Return,' through which slaves passed on their way to the dreaded Middle Passage of the Slave Trade. When she arrived in Dakar, the first lady was greeted by Senegalese who danced and serenaded her with lyrics written especially for the occasion." Shit, I feel better about that 3 a.m. phone call already!

It is worth noting that Hillary was being packed off on these trips into the heart of Africa at precisely the time when her husband was getting his knob polished by an intern in the Oval Office. That's not a reflection on her personally —but for the Hillary camp to tout her advantage in foreign affairs based on these trips into the marital wilderness, as compared to a candidate who has actually lived overseas and has actual relatives living in villages like the ones Hillary passed over in her glass-bottomed boat, is beyond absurd.

When it comes time for delegates to vote at the convention, shouldn't they take into account that Clinton has performed better than Obama in the so-called battleground states? Doesn't she stand a better chance against John McCain in the national election?

In reality, the exact opposite is true. Everything about the results so far suggests that Obama is the more electable candidate according to the "battleground" voter the Clinton camp is claiming for their own.

The Clinton strategy for winning the presidency is so simple, even a chimpanzee could grasp it. You win the blue states, the Massachusettses and the New Jerseys, almost automatically, just by being pro-choice and saying nice things about trees and gay people. You concede the really red states, the places like Tennessee and Kentucky where you're fucked anyway, places where huge pluralities believe the devil really exists and has thick red skin and a bull's horns. That leaves you free to compete hard in the mixed-bag states by drifting to the right as far as you can without losing your in-pocket blue territories, which is really hard to do unless you start wobbling on abortion or selling out the spotted owl. It is through the prism of this new Clintonian strategy that presidential politics has basically been reduced to winning Florida and Ohio.

But saying that Hillary is better qualified to take on John McCain because of her performance in those states only makes sense if (a) you believe that the people who voted for Clinton in the primaries will not vote for Obama in the general election, and (b) you believe that no Democrat can win the traditionally red states. In fact, Hillary has mostly been winning the traditionally blue states —places like New York, California, Massachusetts and New Jersey —that are going to go blue in November anyway, no matter who is running on the Republican ticket. And even in the states Hillary has won, it has been registered Democrats, not swing voters, who have carried her to victory, while Obama has dominated her in virtually every contest among registered independents. Even in her home state of New York, Obama whipped Hillary among independents by fifteen percent. In Missouri, that margin was twenty-eight percent. In California? Thirty percent.

Obama, meanwhile, has performed extraordinarily well in traditionally red states like Louisiana, Georgia and South Carolina. And sure, some of that is due to the black vote. But all of his victories have been marked by two things: larger-than-usual turnout and routs among independents, leading to the large number of blowout wins that are basically responsible for his delegate lead at the moment. On Super Tuesday, Hillary won sixty percent of the vote in only one contest, Bill's home state of Arkansas. Obama won seven states by that margin or more.

In other words, Hillary is winning the Democratic voters who are going to vote Democratic anyway. Obama is bringing in new voters, and he's winning large numbers of swing voters in red states.

What happens if Hillary ends up taking the nomination despite trailing in both the popular vote and the delegate count?

Put it this way: If this race ends up getting decided by a bunch of political insiders, in defiance of the popular vote, it's going to render all self-righteousness about the 2000 debacle meaningless. And if Hillary ends up winning it by claiming Florida delegates from an uncontested election, in the process once again disenfranchising thousands of minority voters in Miami and other urban areas (who would have voted for Obama, just as they voted for Gore in 2000), then it'll end up being a double fuck-you to the public, a signal that the Democrats are no different from the Bush Republicans.

What if the nomination gets decided by the superdelegates?

In the old days, we had a different name for superdelegates. We called them party bosses. If either Clinton or Obama wins by virtue of a superdelegate revolt against the popular will —particularly when both candidates have given hundreds of thousands of dollars to the superdelegates through their leadership PACs —then we're looking at an election that huge pluralities of the country will view as illegitimate. One more experience like this and we'll end up with Swedish election observers stepping in to run the 2012 race.

Are the Clinton camp's attacks against Obama racist?

Not really. What they are is opportunistic. The Clintonian campaign philosophy is basically an inverse of the Nixonian Southern Strategy: It accepts as gospel the notion that the old coalition of white labor and blacks that kept the South Democratic for generations has been severed forever by the rise of evangelical Christianity and social conservatism. Therefore the Clintons don't try to win back those white workers in the lost Southern states through, say, a more staunch advocacy of unions; instead, they try to pry away Nixon's old "silent majority" voters by courting the same fears about safety and national security that Tricky Dick used to take the South away from Democrats in the first place.

It's no accident that Hillary ran her "3 a.m." commercial in Texas but not Ohio; this was a cunning ploy to win back those scared white voters whom the Clinton strategy insists are needed to win. And it worked: After the ad, her support among white Texans jumped from forty-four to fifty-six percent. Does it help that her opponent is a black dude with a Muslim middle name? Sure. But the fearmongering by the Clintons is more about winning blue-collar votes without alienating their big-business buddies than it is about exploiting fears of a black planet. With the Clintons, ideology is always whatever gets them through the night. They haven't been reduced to balls-out, Willie Horton racism yet. That's not to say that they won't get there —they're just not there yet.

Won't the Republicans go after Obama with even nastier stuff?

Not long ago, I was talking to former Bush speechwriter David Frum, and he told me he thinks that Obama's Achilles' heel is patriotism. Put Obama in the general election, he said, and the Republicans are going to hammer him relentlessly. They're going to bring up everything they can find that bolsters the argument that Obama isn't slobberingly, priapistically patriotic: the famed decision to stop wearing his American flag pin because it was being used as a substitute for "true patriotism"; the now-infamous photo of him holding his hands at his waist while Hillary patriotically clasped her heart during the national anthem; the comments by his wife, Michelle, about being really proud of America "for the first time in my adult life"; the associations with Sixties radicals. Along with his middle name and the unkillable rumors of Muslim leanings, it's obvious where the Republicans are going to be aiming if they have to run against this guy all summer. If and when that happens, Obama is going to find out pretty quick that there's no explanation you can possibly give to Middle America for taking off your flag lapel pin that is going to make sense to them.

So Obama is weakest on the issue of patriotism?

No -- Obama's real weakness is that nobody really knows yet what he's all about. He is running as a symbol of a new politics, a politics somehow less disgusting and full of shit than the old politics. But if it were to get out that he's not that —that all he is the same old deal dressed up in black skin and a natty suit —then he quickly morphs into a different kind of symbol, a symbol of how an essentially bankrupt political system can seamlessly repackage itself to a fed-up marketplace by making cosmetic changes, without altering its basic nature. There have been disturbing signs along that front, from the accusations that Obama aides called his anti-NAFTA stance "just politics," to his angry stumpery against a Maytag plant closing even as he pals around with Lester Crown, a Maytag board member who raised huge sums for his campaign. Right now, Obama has millions of voters thinking Santa Claus really does exist; but if he keeps getting caught turning the usual tricks with campaign donors, attention is going to shift away from his heroic image and toward the prosaic reality, which in politics is always grubby and depressing. And with that, his value as a symbol will evaporate, and Christmas turns into just another holiday with those same relatives you hated every other day of the year.

Should Obama go negative against Hillary, as the press is urging him to?

It doesn't matter what Obama does at this point. He's fucked either way. If he gets into a catfight with Hillary, the peanut gallery will slam him for being just another typical politician. If he sits there and just lets her plunge knife after knife into his abdomen, he'll have every hack at Time and Newsweek saying he doesn't have "what it takes" to compete in the "blood sport" that is politics (as if any of those news-mag yuppie turds know anything about actual "blood sports"). I'll say one thing: This endless he-said/she-said piss-fighting between the two camps, with its attendant daily purging of loose-lipped campaign staffers of the Samantha Power/Geraldine Ferraro genus, is a bad place for Barack Obama to be. Nobody in American history has ever been better than the Clintons at calculating the electoral math of resentment, paranoia, media aggression and just flat-out, back-alley nastiness. Every day, the Clintons come up with some new and brilliantly devious way to color the subliminal background of the electoral canvas, from using comparisons to Jesse Jackson to buttonhole Obama as a "black candidate," to floating rumors of an "unstoppable" Hillary-Obama ticket —despite the fact that Hillary would rather eat a KFC bucket full of her own shit than run with Obama —in order to con on-the-fence voters into thinking that a vote for Hillary might also be a vote for Obama. That's why it seemed so weirdly appropriate that Samantha "she's a monster" Power was forced to resign from the Obama campaign, while Gerry Ferraro could all but call Obama a nigger and then claim that she was the victim of discrimination. We expect the Clintons to play dirty, and don't demand that they apologize for doing so. But we'd be disappointed in Obama if he went there.

[And that's the real double standard in this campaign, folks! Then again, it's partly Obama's own fault for trying to run a 'clean' campaign. – J]

So with all this Democratic infighting, is John McCain going to be the next president?

McCain may be an asshole, but he's not an idiot. He's doing exactly the right thing right now by going overseas for a fact-finding tour in Europe and the Middle East —basically exiling himself from the public eye —while Obama and Hillary claw each other's eyes out every five minutes on MSNBC. He's smart enough to know that whichever candidate emerges from the Democratic scrum is going to have a face like an uncooked side of beef come general-election season; he doesn't need to say a word to raise both of their negatives. Hillary is doing half of McCain's dirty work for him by repeatedly assailing Obama's supposed lack of experience and questionable patriotism, while Obama is inadvertently helping McCain's cause by forcing Hillary to go all craven psycho-bitch on him to stay alive in the race. We saw this effect on display most overtly after the Cleveland debate, when the angry back-and-forth banter by both Obama and Hillary left McCain, for the first time, leading in the polls against either candidate.

Democrats had all the momentum going into this race because of seven years of uninterrupted press scrutiny of the Bush administration; by the time November rolls around, however, most voters are going to feel like the Democrats have been in charge for over a year. And McCain will be able to swoop in and ride a "throw the bums out" uprising straight to the White House —just in time to actually keep the same old bums in charge. In American politics, always look for the worst possible scenario to emerge triumphant. And right now, that's it.