Wednesday, October 29, 2008

The New Leader of the World

From the Wall Street Journal:


Sarkozy is very critical of U.S. presidential candidate Barack Obama's positions on Iran, according to reports that have reached Israel's government.Sarkozy has made his criticisms only in closed forums in France. But according to a senior Israeli government source, the reports reaching Israel indicate that Sarkozy views the Democratic candidate's stance on Iran as "utterly immature" and comprised of "formulations empty of all content." . . .Until now, the five permanent members of the UN Security Council plus Germany have tried to maintain a united front on Iran. But according to the senior Israeli source, Sarkozy fears that Obama might "arrogantly" ignore the other members of this front and open a direct dialogue with Iran without preconditions. So the president of France is criticizing an American politician for not being tough enough on a despotic Middle Eastern regime? Is this Erret (le bizarro monde), or are we going to have to reconsider our stereotypes of the French?

Wednesday, October 22, 2008

Obama and Education Policy

Another Communist in Obama’s OrbMeet Michael Klonsky, Obama's "social justice" education expert.By Andrew C. McCarthy
The mainstream press steadfastly refuses to delve into Barack Obama’s radicalism, his Leftist revolutionary collaboration with self-identified communists from Frank Marshall Davis to Bill Ayers. The McCain campaign, moreover, has contributed mightily to the whitewash by ineptly seizing on the issue’s least important aspect: Obama’s abject dishonesty about the depth of his relationships with committed Leftists — e.g., the portrayal of Ayers as just “a guy who lives in my neighborhood.” (Petrified of being smeared as a racist, McCain has never mentioned Davis, whom Obama identifies only as “Frank” in his memoir. And, of course, utterance of Jeremiah Wright’s name is verboten in McCain circles, notwithstanding that his Trinity Church, where Obama was a 20-year member, is a font of Marxist Black Liberation Theology and thus critical to our understanding of Obama’s invocations of “change” and “spreading the wealth.”)With what little media oxygen there has been sucked out by the largely uninformative discussion of Ayers (and his wife and Weather Underground ally, Bernadine Dohrn) — in which the mantra “unrepentant terrorist” has been a pale substitute for the critical matter of the Ayers’s ideology that Obama plainly shares — much has been missed. Significantly, that includes another key Obama contact, Mike Klonsky.Here’s what you need to know. Klonsky is an unabashed communist whose current mission is to spread Marxist ideology in the American classroom. Obama funded him to the tune of nearly $2 million. Obama, moreover, gave Klonsky a broad platform to broadcast his ideas: a “social justice” blog on the official Obama campaign website. To be clear, as it seems always necessary to repeat when Obamaniacs, in their best Saul Alinsky tradition, shout down the opposition: This is not about guilt by association. The issue is not that Obama knows Klonsky … or Ayers … or Dohrn … or Wright … or Rashid Khalidi …The issue is that Obama promoted and collaborated with these anti-American radicals. The issue is that he shared their ideology. Klonsky’s communist pedigree could not be clearer. His father, Robert Klonsky, was an American communist who was convicted in the mid-Fifties for advocating the forcible overthrow of the United States government — a violation of the Smith Act, anti-communist legislation ultimately gutted by the Supreme Court. In the Sixties, Klonsky the younger teamed with Ayers, Dohrn, and other young radicals to form the Students for a Democratic Society. It was out of the SDS that Ayers and Dohrn helped found the Weatherman terrorist group.Klonsky took a different path, albeit one that led inexorably to a new partnership with Ayers, which Obama mightily helped underwrite. Upon splitting off from the SDS, Klonsky formed a Maoist organization, first known as the “October League,” which ultimately became the “Communist Party (Marxist Leninist).” Klonsky was CP(ML)’s chairman. He was so highly thought of by Mao’s regime that he was among the first Americans invited to visit Communist China. When he was feted there in 1977, a year after Mao’s death, the communist leadership hailed Klonsky’s party as “reflecting the aspirations of the proletariat and working people.” Klonsky was a regular guest of the Chicoms until 1981, when the relationship soured over the post-Mao leadership’s free-market reforms. (Yes, Klonsky is apparently more committed to communism than China’s own Communist Party.) So what was a Leftist radical without platform to do? Why, what else? He became an American college professor specializing in education.After getting his doctorate, Klonsky eventually made his way to Chicago and hooked up with his old SDS comrade (and self-professed “small ‘c’ communist”) Bill Ayers. Together, they co-founded the Small Schools Workshop in 1991. The goal — as Ayers has repeatedly made clear, most prominently in a 2006 speech before Hugo Chavez at an education forum in Caracas — is to bring the same Leftist revolution that has always galvanized them into the classroom. The concept may be called small schools, but Klonsky and Ayers uniquely grasp the force-multiplier effect. In a small class, the teacher preaching the “social justice” gospel that American capitalism is a racist, materialist, imperialist cauldron of injustice can have greater impact on the students he seeks to mold into his conception of the “good citizen” — and on the teachers he is teaching to be preachers. Writing trenchantly about how this system of “critical pedagogy” short-changes the basic education needs of disadvantaged children, the City Journal’s Sol Stern observes that theorists like Klonsky and Ayers:
nurse a rancorous view of an America in which it is always two minutes to midnight and a knock on the door by the thought police is imminent. The education professors feel themselves anointed to use the nation’s K-12 classrooms to resist this oppressive system. Thus … teachers [are urged] not to mince words with children about the evils of the existing social order. They should portray “homelessness as a consequence of the private dealings of landlords, an arms buildup as a consequence of corporate decisions, racial exclusion as a consequence of a private property-holder’s choice.” In other words, they should turn the little ones into young socialists and critical theorists.
Klonsky himself confirms that this is precisely the goal (italics mine):
[S]uccessful social justice education ensures that teachers strike a balance between debating sociopolitical problems that affect children’s lives and teaching them academic basics on which they will be tested. A science teacher can plant an urban garden, allowing students to learn about plant biology, the imbalance in how fresh produce is distributed and how that affects the health of community residents. An English teacher can explore misogyny or materialism in American culture through the lens of hip-hop lyrics. Or as Rico Gutstein, a professor of mathematics education at the University of Illinois, Chicago, suggests, a math teacher can run probability simulations using real data to understand the dynamics behind income inequality or racial profiling. These are “examples of lessons where you can really learn the math basics,” he says, “but the purpose of learning the math actually becomes an entree into, and a deeper understanding of, the political ramifications of the issue.”
When Obama and Ayers collaborated together on the Chicago Annenberg Challenge (CAC) education-reform project, with Obama chairing the board that oversaw funding decisions, CAC underwrote the Klonsky/Ayers Small Schools Workshop with a whopping $1,056,162. And that’s not all. Nearly another million dollars was steered to the Small Schools Workshop by the Joyce and Woods Funds when Obama sat on their boards. The grand total comes to $1,968,718.Furthermore, as education remains one of Obama’s core areas of concern — a fact that should frighten you — he gave Klonsky a microphone during the campaign. On the Obama campaign’s official website, Klonsky ran a blog for the candidate, as Klonsky put it, on “education politics and teaching for social justice.” He ran it, that is, until blogger Steve Diamond called attention to it back in June. A that point, the campaign scrubbed the site of all Klonsky traces — a fitting Stalinesque purge, described by Diamond here (and reminiscent of similar efforts to erase the campaign’s false claims about Obama’s relationship with ACORN).Of course, “What has been will be again, what has been done will be done again; there is nothing new under the sun.” John Stuart Mill called conservatives “the stupid party.” For countless American intellectuals, including many eventual giants of the Right, disdain for bourgeois values led to a ruinous infatuation with the Soviet Union — the audacity of their hope for perfecting mankind blinding them to the unremitting misery wrought by communist ideology. In 1951, the legendary liberal Supreme Court Justice William O. Douglas insisted that, though communism might be a threat abroad, the movement in this country was a mere “bogeyman” that had been “thoroughly exposed” and “crippled as a political force.” We now know that even as he wrote those words, communists had covertly infiltrated the U.S. government at high levels and that, as a political force, the movement was just getting started. The Klonskys and Ayers were still on the horizon.Now today’s elites, including some prominent conservative intellectuals, thumb their noses once again at the stupid party. They look longingly at the putatively cerebral Obama, a fit more to their liking even if his politics are, they hope, just a tad wayward. But the Leftist revolutionaries are under no such illusions. In Obama, they see the fulfillment of their dreams to remake America. As Klonsky has explained, “My own support for Obama is … a recognition that the Obama campaign has become a rallying point for young activists and offers hope for rebuilding the civil rights and antiwar coalitions that have potential to become a real critical force in society.”So get ready for Klonsky’s “social justice.” It’s what Barack Obama calls “change.”— National Review’s Andrew C. McCarthy chairs the Foundation for the Defense of Democracies’s Center for Law & Counterterrorism and is the author of Willful Blindness: A Memoir of the Jihad (Encounter Books 2008).

Tuesday, October 21, 2008

More Income Redistribution From Obama

Obama Talks Nonsense on Tax Cuts
Revenues will inevitably be diverted from Social Security.
By WILLIAM MCGURN
Now we know: 95% of Americans will get a "tax cut" under Barack Obama after all. Those on the receiving end of a check will include the estimated 44% of Americans who will owe no federal income taxes under his plan.
AP
In most parts of America, getting money back on taxes you haven't paid sounds a lot like welfare. Ah, say the Obama people, you forget: Even those who pay no income taxes pay payroll taxes for Social Security. Under the Obama plan, they say, these Americans would get an income tax credit up to $500 based on what they are paying into Social Security.
Just two little questions: If people are going to get a tax refund based on what they pay into Social Security, then we're not really talking about income tax relief, are we? And if what we're really talking about is payroll tax relief, doesn't that mean billions of dollars in lost revenue for a Social Security trust fund that is already badly underfinanced?
Austan Goolsbee, the University of Chicago economic professor who serves as one of Sen. Obama's top advisers, discussed these issues during a recent appearance on Fox News. There he stated that the answer to the first question is that these Americans are getting an income tax rebate. And the answer to the second is that the money would not actually come out of Social Security.
"You can't just cut the payroll tax because that's what funds Social Security," Mr. Goolsbee told Fox's Shepard Smith. "So if you tried to do that, you would undermine the Social Security Trust Fund."
Now, if you have been following this so far, you have learned that people who pay no income tax will get an income tax refund. You have also learned that this check will represent relief for the payroll taxes these people do pay. And you have been assured that this rebate check won't actually come out of payroll taxes, lest we harm Social Security.
You have to admire the audacity. With one touch of the Obama magic, what otherwise would be described as taking money from Peter to pay Paul is now transformed into Paul's tax relief. Where a tax cut for payroll taxes paid will not in fact come from payroll taxes. And where all these plans come together under the rhetorical umbrella of "Making Work Pay."
Not everyone is persuaded. Andrew Biggs is a scholar at the American Enterprise Institute and a former Social Security Administration official who has written a great deal about Mr. Obama's plans on his blog (AndrewGBiggs.blogspot.com). He notes that to understand the unintended consequences, it helps to remember that while people at the bottom pay a higher percentage of their income in payroll taxes, they are accruing benefits in excess of what they pay in.
"It's interesting that Mr. Obama calls his plan 'Making Work Pay,'" says Mr. Biggs, "because the incentives are just the opposite. By expanding benefits for people whose benefits exceed their taxes, you're increasing their disincentive for work. And you're doing the same at the top of the income scale, where you are raising their taxes so you can distribute the revenue to others."
Even more interesting is what Mr. Obama's "tax cuts" do to Social Security financing. As Mr. Biggs notes, had Mr. Obama proposed to pay for payroll tax relief out of, well, payroll taxes, his plan would never have a chance in Congress. Most members would look at a plan that defunded a trust fund that seniors are counting on for their retirement as political suicide.
And that leads us to the heart of this problem. If the government is going to give tax cuts to 44% of American based on their Social Security taxes -- without actually refunding to them the money they are paying into Social Security -- Mr. Obama will have to get the funds elsewhere. And this is where "general revenues" turns out to be a more agreeable way of saying "Other People's Money."
When asked about his priorities during the second presidential debate, Mr. Obama said that reform of programs like Social Security would have to go on the back burner for two years or so. "We're not going to solve Social Security and Medicare unless we understand the rest of our tax policies," he said.
The senator is right. But you have to read the fine print of his tax cuts to know why.

Our Future With Mr. Obama

By JAMES TARANTO

Yesterday we noted that Joe Biden had warned supporters in Seattle that he expects a major crisis to strike during the first six months of an Obama administration, told them that he expects Obama's response to the crisis to be unpopular, and exhorted them to be prepared to stand by him, even if he appears to be wrong.
Hugh Hewitt thinks he knows what Biden has in mind:

Biden has been receiving the sorts of briefings that nominees receive, and he's been to the sort of meetings where our allies talk candidly of the gathering storm they see coming closer.
And Biden suspects that Obama will react to the coming crisis in a way that demoralizes the country and which shatters public confidence in Obama.
Biden dismisses the ability of the American military to deal with far flung threats, tells the audience "Mark my words," and then preemptively implores them to "be prepared to stick with us," after telling them "we're gonna need you to use your influence, your influence within the community, to stand with him."
The most obvious interpretation of this ramble is that an Iran-Israel confrontation is coming, and that if Obama is president, America will sit it out with, at best, words that do nothing to support Israel or deter Iran.

Japan Gets it Right

Ruling parties agree on 2 trillion yen tax cuts for FY 2008
TOKYO, Oct. 22 KYODO
Senior members of the ruling parties reached a broad agreement Tuesday on tax cuts of some 2 trillion yen in fiscal 2008 as the core of the government's additional stimulus package to address the global financial turmoil and slowing economic activity in Japan, lawmakers said. The Liberal Democratic Party and New Komeito party also agreed to revise a law to facilitate an injection of public funds into regional financial institutions in order to prevent a credit crunch, they said. The two parties will meet again Thursday to reach a final agreement, paving the way for the government to hammer out the new economic package, value of which is estimated at 20 trillion yen by a senior ruling coalition official, following the first one worth about 11.7 trillion yen, which was unveiled Aug. 29 before the U.S.-triggered credit crisis deteriorated further. The new package is expected to involve state funding of about 5 trillion yen, said the senior ruling coalition official. Details of the plan to implement fixed-amount cuts in state and municipal income taxes in fiscal 2008, ending next March 31, will likely be worked out in year-end tax reform deliberations, the lawmakers said. If tax cuts worth 2 trillion yen are implemented, a sum close to 65,000 yen will be refunded to a four-member household with two children. The sum was refunded under the 1998 income tax cuts. As low-income households not subject to taxation will not benefit from fixed-amount tax cuts, some participants in Tuesday's meeting called for the distribution of one-time monetary benefits to them. The government is expected to tap reserves in the special account for fiscal investments and loans for financing the tax reduction. To revise the bank recapitalization law, the government plans to submit a necessary bill to the Diet on Friday in order to have it enacted by the end of this month. As the period of applications for public funds for regional financial institutions expired March 31, the ruling coalition envisages extending the period to the end of March 2012. The legal revision is necessary to use some 2 trillion yen set aside for recapitalization of banks under the fiscal 2008 budget. The government intends to funnel capital into regional financial institutions to enable smaller firms to meet strong year-end funding requirements. Senior members of the ruling parties also called for extending tax breaks for housing loans from their expiry slated for the end of this year and government support for policyholders of collapsed life insurance companies from the end of March 2009. In addition, they confirmed the need to reinforce support for small and midsize companies' fundraising while discussing ways of revising regional economies and cuts in expressway tolls.==Kyodo

Mr. Obama and his Love for Taxes

October 21, 2008, 5:00 a.m.Obama’s New Tax WelfareBehind the 95.By Peter Ferrara
Barack Obama says he plans to cut taxes for 95 percent of American workers. That sounds terrific, but there are three problems. One, it is meant to draw attention from the real core of the Obama tax plan: proposed increases in every major federal tax. Two, the structure of the cuts will create perverse incentives. And three, many of the people receiving “tax cuts” don’t pay taxes to begin with, meaning they’ll be in effect getting welfare.The first point requires but a simple list. Obama proposes to raise the top two individual income tax rates by 25 percent or more, through both explicit rate increases and the phaseout of personal exemptions and all itemized deductions for upper-income earners. He’ll increase the capital-gains tax rate by 33 percent, the tax rate on dividends by 33 percent, and the top payroll-tax rate by 16 to 32 percent. He’ll create a new payroll tax for national health insurance, estimated at 7 percent. He’ll reinstate the death/inheritance tax, which is being phased out under current law, with a new top marginal rate of 45 percent. He’ll increase the corporate tax burden by 25 percent “by closing corporate loopholes and tax havens.” He’ll even increase tariffs through his protectionist trade policies.Obama argues that only higher-income workers and rich corporations will suffer these tax increases, and they can afford it. But tax and economic policy is not about who “can afford it.” Increasing these marginal tax rates greatly harms the economy — when more of the money earned goes to the government, there’s less incentive for “the rich” to work, save, invest, and create and expand businesses. This affects people trying to start businesses with investment money from wealthy folks. Not to mention people looking for jobs, which usually come from businesspeople with money. This isn’t just a theory. Ireland adopted a 12.5 percent corporate tax rate 20 years ago, when it suffered the second-lowest per capita GDP in the European Union (EU). Its economy boomed as a result, and today Ireland enjoys the second highest per-capita GDP in the EU. Ireland, with its 12.5-percent rate, raises 50 percent more corporate-tax revenue as a percent of GDP than the U.S. does with its 35 percent rate. Yet Barack Obama laughs at McCain’s proposal to reduce that corporate rate to 25 percent, the minimum needed to restore international competitiveness for U.S. companies and employers, mocking it as still more tax cuts for rich corporate fat cats. Obama’s tax plan is exactly the opposite of the supply-side economics that Reagan adopted, which produced the astounding boom of the 1980s. That boom, in fact, lasted 25 years, from 1982 to 2007, as Art Laffer and Steve Moore discuss in their new book, The End of Prosperity. Laffer and Moore explain that more wealth was produced during those 25 years than in the previous 200 years of American history. Obama’s tax plan is also exactly the opposite of President Kennedy’s, which produced another astounding boom in the 1960s. Pursuing the exact opposite policies from Kennedy and Reagan will produce exactly the opposite results. (Note also that Obama’s tax increases will not produce nearly enough revenue to finance all his lavish spending proposals, as shown by a brilliant new paper from Alan Reynolds of the Cato Institute. And by the way, Bill Clinton campaigned in 1992 promising a tax cut for the middle class — after he was elected he dropped that idea, adopting tax increases for people making as little as $20,000 per year.)Finally, Obama’s “tax cut,” if he follows through with it, will often be a simple giveaway. As it stands right now, roughly one-third of income earners pay no federal income taxes. Many actually receive payments from the income-tax system — these payments total 3.8 percent of all federal taxes paid. Simple arithmetic holds that if one-third of earners don’t pay income tax, it’s impossible to cut taxes for 95 percent of earners.Obama’s “tax cut” is, in reality, a $500-per-worker refundable income-tax credit for workers making up to $75,000 per year, and for families making up to $150,000. The term “refundable” means that if the worker does not have enough tax liability to take advantage of the credit, the government sends the worker a check to cover the full amount of the credit anyway. It is like George McGovern’s 1972 promise of a $1,000 check for everyone, which the American people rejected as a crass vote-buying scheme.Besides the $500-per-worker credit, Obama proposes a slew of income-tax credits targeted toward low- and moderate-income people, also refundable. Obama proposes such tax credits for child care, education, housing, retirement, health care, welfare, etc.Though the people receiving these credits will spend the money, the programs will probably hurt the economy on net, because the credits will be phased out at higher income levels. This, in effect, constitutes yet another marginal tax on high-income earners, and thus another blow to their incentives to be productive. These programs alone would cost $1.3 trillion over ten years. I call it The New Tax Welfare.— Peter Ferrara is director of entitlement and budget policy for the Institute for Policy Innovation, and general counsel of the American Civil Rights Union. He formerly served in President Reagan’s White Office of Policy Development, and as associate deputy attorney general of the United States under the first President Bush.— Peter Ferrara is a senior fellow at the Free Enterprise Fund, director of entitlement and budget policy at the Institute for Policy Innovation, and general counsel for the American Civil Rights Union.

Monday, October 20, 2008

Biden Speaks the Truth

Joe Biden:


Mark my words," the Democratic vice presidential nominee warned at the second of his two Seattle fundraisers Sunday. "It will not be six months before the world tests Barack Obama like they did John Kennedy. The world is looking. We're about to elect a brilliant 47-year-old senator president of the United States of America. Remember I said it standing here if you don't remember anything else I said. Watch, we're gonna have an international crisis, a generated crisis, to test the mettle of this guy.""I can give you at least four or five scenarios from where it might originate," Biden said to Emerald City supporters, mentioning the Middle East and Russia as possibilities. "And he's gonna need help. And the kind of help he's gonna need is, he's gonna need you--not financially to help him--we're gonna need you to use your influence, your influence within the community, to stand with him. Because it's not gonna be apparent initially, it's not gonna be apparent that we're right."

Tuesday, October 14, 2008

Not the first time


U.S. has history of intervention
By Steve Lohr
Monday, October 13, 2008
NEW YORK: If the U.S. government moves ahead with a plan to take ownership stakes in American banks, as seems likely, it would be an exceptional step - but not an unprecedented one.
The United States has a culture that celebrates laissez-faire capitalism as the economic ideal, but the practice is sometimes different. Over the past century, the U.S. government has nationalized railways, coal mines and steel mills, and it has even taken a controlling interest in banks when that was deemed to be in the national interest.
The corporate wards of the state typically have been returned to private hands after short, sometimes fleeting, stretches under government stewardship.
Finance experts say that having Washington take stakes in U.S. banks now - like government interventions in the past - would be a promising step in addressing an economic emergency. The plan being weighed by the Treasury Department, they say, could supply banks with sorely needed capital and help restore confidence in financial markets. Across Europe, governments rolled out similar initiatives Monday.
In other countries, the government bank-investment programs are routinely called nationalization programs. But that is not likely in America, where nationalization is a word to avoid, given the cultural aversion to anything that hints of socialism.
"Putting this plan on the table makes a lot of sense, but you can't call it nationalization here," said Simon Johnson, an economist at the Massachusetts Institute of Technology's Sloan School of Management. "In France, it is fine, but not in the United States."
In times of war and national emergency, Washington has not hesitated. In 1917, the government seized the railroads to make sure goods, armaments and troops moved smoothly in the interests of national defense during World War I. Bondholders and stockholders were compensated, and railroads were returned to private ownership in 1920, after the war ended.
During World War II, Washington seized dozens of companies including railroads, coal mines and, briefly, the Montgomery Ward department store chain. In 1952, President Harry Truman seized 88 steel mills across the country, asserting that unyielding owners were determined to provoke an industry-wide strike that would cripple the Korean War effort. That forced nationalization did not last long, since the Supreme Court ruled the action an unconstitutional abuse of presidential power.
In banking, the U.S. government stepped in to take an 80 percent stake in the Continental Illinois National Bank and Trust in 1984. Continental Illinois failed in part because of bad oil-patch loans in Oklahoma and Texas. As one of the country's top 10 banks, Continental Illinois was deemed "too big to fail" by regulators, who feared wider turmoil in the financial markets. Continental was sold to Bank of America in 1994.
Yet the nearest precedent for the plan the Treasury is weighing, finance experts say, is the investments made by the Reconstruction Finance Corporation in the 1930s. The agency, established in 1932, not only made loans to distressed banks but also bought stock in 6,000 banks, at a total cost of about $3 billion, said Richard Sylla, an economist and financial historian at the Stern School of Business at New York University.
A similar effort these days, in proportion to the current economy, would be $400 to $500 billion, Sylla said.
When the economy eventually stabilized, the government sold the stock to private investors or the banks themselves.
That program was a good one, experts say, but the U.S. government moved too slowly to deal with the financial crisis, which precipitated and lengthened the Great Depression. The lesson of history, it seems, is for Washington to move quickly in times of economic crisis to revive the patient.
"The goal is to get the engine of capitalism going as productively as possible," said Nancy Koehn, a historian at the Harvard Business School. "Ideology is a luxury good in times of crisis."
The government plan to buy stakes in banks would be the latest step in Washington's efforts to ease the credit crisis. The government has already spent or authorized $800 billion to keep the investment bank Bear Stearns and the troubled insurer American International Group from collapsing and for the economic rescue package to buy soured mortgage-backed securities from banks and Wall Street companies. The Federal Reserve has cut interest rates and pumped money into the banking system to get the normal business of lending going again.
Nothing has turned the tide yet.
After World War II, several European countries nationalized basic industries like coal, steel and even autos, which typically remained in government hands until the 1980s, when most Western economies began paring back the state role in the economy.
Europe today remains far more comfortable with government's having a strong hand in business. So when Sweden, for example, faced a financial meltdown in the early 1990s, the nationalization of swaths of the banking industry was welcomed.
The Swedish government quickly bought stakes in banks, much as the Treasury is considering, and sold most of them off later, a model of swift, forceful intervention in a credit crisis, financial experts say.
"The obvious danger with anything that really starts to look like the government taking ownership or control of a significant piece of an industry is, Where do you stop?" said Robert Bruner, a finance expert at the Darden School of Business at the University of Virginia. "The auto industry is in dire straits, and the airline industry is in trouble, for example."
"But the spillover effects from the crisis in the financial system are so great, pulling down the rest of the economy in a way that no other industry can, so that the potential cost of not doing something like this is immense," Bruner said.

Friday, October 3, 2008

Bill Ayers

This article is a bit long and it is in the NY Times but well worth understanding the radical ties of Obama even though they play them down.



October 4, 2008
Obama and ’60s Bomber: A Look Into Crossed Paths
By SCOTT SHANE
CHICAGO — At a tumultuous meeting of anti-Vietnam War militants at the Chicago Coliseum in 1969, Bill Ayers helped found the radical Weathermen, launching a campaign of bombings that would target the Pentagon and United States Capitol.
Twenty-six years later, at a lunchtime meeting about school reform in a Chicago skyscraper, Barack Obama met Mr. Ayers, by then an education professor. Their paths have crossed sporadically since then, at a coffee Mr. Ayers hosted for Mr. Obama’s first run for office, on the schools project and a charitable board, and in casual encounters as Hyde Park neighbors.
Their relationship has become a touchstone for opponents of Mr. Obama, the Democratic senator, in his bid for the presidency. Video clips on YouTube, including a new advertisement that was broadcast on Friday, juxtapose Mr. Obama’s face with the young Mr. Ayers or grainy shots of the bombings.
In a televised interview last spring, Senator John McCain, Mr. Obama’s Republican rival, asked, “How can you countenance someone who was engaged in bombings that could have or did kill innocent people?”
More recently, conservative critics who accuse Mr. Obama of a stealth radical agenda have asserted that he has misleadingly minimized his relationship with Mr. Ayers, whom the candidate has dismissed as “a guy who lives in my neighborhood” and “somebody who worked on education issues in Chicago that I know.”
A review of records of the schools project and interviews with a dozen people who know both men, suggest that Mr. Obama, 47, has played down his contacts with Mr. Ayers, 63. But the two men do not appear to have been close. Nor has Mr. Obama ever expressed sympathy for the radical views and actions of Mr. Ayers, whom he has called “somebody who engaged in detestable acts 40 years ago, when I was 8.”
Obama campaign aides said the Ayers relationship had been greatly exaggerated by opponents to smear the candidate.
“The suggestion that Ayers was a political adviser to Obama or someone who shaped his political views is patently false,” said Ben LaBolt, a campaign spokesman. Mr. LaBolt said the men first met in 1995 through the education project, the Chicago Annenberg Challenge, and have encountered each other occasionally in public life or in the neighborhood. He said they have not spoken by phone or exchanged e-mail messages since Mr. Obama began serving in the United States Senate in January 2005 and last met more than a year ago when they bumped into each other on the street in Hyde Park.
In the stark presentation of a 30-second advertisement or a television clip, Mr. Obama’s connections with a man who once bombed buildings and who is unapologetic about it may seem puzzling. But in Chicago, Mr. Ayers has largely been rehabilitated.
Federal riot and bombing conspiracy charges against him were dropped in 1974 because of illegal wiretaps and other prosecutorial misconduct, and he was welcomed back after years in hiding by his large and prominent family. His father, Thomas G. Ayers, had served as chief executive of Commonwealth Edison, the local power company.
Since earning a doctorate in education at Columbia in 1987, Mr. Ayers has been a professor of education at the University of Illinois at Chicago, the author or editor of 15 books, and an advocate of school reform.
“He’s done a lot of good in this city and nationally,” Mayor Richard M. Daley said in an interview this week, explaining that he has long consulted Mr. Ayers on school issues. Mr. Daley, whose father was Chicago’s mayor during the street violence accompanying the 1968 Democratic National Convention and the so-called Days of Rage the following year, said he saw the bombings of that time in the context of a polarized and turbulent era.
“This is 2008,” Mr. Daley said. “People make mistakes. You judge a person by his whole life.”
That attitude is widely shared in Chicago, but it is not universal. Steve Chapman, a columnist for The Chicago Tribune, defended Mr. Obama’s relationship with the Rev. Jeremiah A. Wright Jr., his longtime pastor, whose black liberation theology and “God damn America” sermon became notorious last spring. But he denounced Mr. Obama for associating with Mr. Ayers, whom he said the University of Illinois should never have hired.
“I don’t think there’s a statute of limitations on terrorist bombings,” Mr. Chapman said in an interview, speaking not of the law but of political and moral implications.
“If you’re in public life, you ought to say, ‘I don’t want to be associated with this guy,’ ” Mr. Chapman said. “If John McCain had a long association with a guy who’d bombed abortion clinics, I don’t think people would say, ‘That’s ancient history.’ ”
Mr. Ayers and his wife, Bernardine Dohrn, a clinical associate professor at Northwestern University Law School who was also a Weather Underground founder, did not respond to multiple requests for comment.
The Schools Project
The Ayers-Obama connection first came to public attention last spring, when both Senator Hilary Rodham Clinton, Mr. Obama’s Democratic primary rival, and Mr. McCain brought it up. It became the subject of a television advertisement in August by the anti-Obama American Issues Project and drew new attention recently on The Wall Street Journal’s op-ed page and elsewhere as the archives of the Chicago Annenberg Challenge at the University of Illinois were opened to researchers.
That project was part of a national school reform effort financed with $500 million from Walter H. Annenberg, the billionaire publisher and philanthropist and President Richard M. Nixon’s ambassador to the United Kingdom. Many cities applied for the Annenberg money, and Mr. Ayers joined two other local education activists to lead a broad, citywide effort that won nearly $50 million for Chicago.
In March 1995, Mr. Obama became chairman of the six-member board that oversaw the distribution of grants in Chicago. Some bloggers have recently speculated that Mr. Ayers had engineered that post for him.
In fact, according to several people involved, Mr. Ayers played no role in Mr. Obama’s appointment. Instead, it was suggested by Deborah Leff, then president of the Joyce Foundation, a Chicago-based group whose board Mr. Obama, a young lawyer, had joined the previous year. At a lunch with two other foundation heads, Patricia A. Graham of the Spencer Foundation and Adele Simmons of the MacArthur Foundation, Ms. Leff suggested that Mr. Obama would make a good board chairman, she said in an interview. Mr. Ayers was not present and had not suggested Mr. Obama, she said.
Ms. Graham said she invited Mr. Obama to dinner at an Italian restaurant in Chicago and was impressed.
“At the end of the dinner I said, ‘I really want you to be chairman.’ He said, ‘I’ll do it if you’ll be vice chairman,’ ” Ms. Graham recalled, and she agreed.
Archives of the Chicago Annenberg project, which funneled the money to networks of schools from 1995 to 2000, show both men attended six board meetings early in the project — Mr. Obama as chairman, Mr. Ayers to brief members on school issues.
It was later in 1995 that Mr. Ayers and Ms. Dohrn hosted the gathering, in their town house three blocks from Mr. Obama’s home, at which State Senator Alice J. Palmer, who planned to run for Congress, introduced Mr. Obama to a few Democratic friends as her chosen successor. That was one of several such neighborhood events as Mr. Obama prepared to run, said A. J. Wolf, the 84-year-old emeritus rabbi of KAM Isaiah Israel Synagogue, across the street from Mr. Obama’s current house.
“If you ask my wife, we had the first coffee for Barack,” Rabbi Wolf said. He said he had known Mr. Ayers for decades but added, “Bill’s mad at me because I told a reporter he’s a toothless ex-radical.”
“It was kind of a nasty shot,” Mr. Wolf said. “But it’s true. For God’s sake, he’s a professor.”
Other Connections
In 1997, after Mr. Obama took office, the new state senator was asked what he was reading by The Chicago Tribune. He praised a book by Mr. Ayers, “A Kind and Just Parent: The Children of Juvenile Court,” which Mr. Obama called “a searing and timely account of the juvenile court system.” In 2001, Mr. Ayers donated $200 to Mr. Obama’s re-election campaign.
In addition, from 2000 to 2002, the two men also overlapped on the seven-member board of the Woods Fund, a Chicago charity that had supported Mr. Obama’s first work as a community organizer in the 1980s. Officials there said the board met about a dozen times during those three years but declined to make public the minutes, saying they wanted members to be candid in assessing people and organizations applying for grants.
A board member at the time, R. Eden Martin, a corporate lawyer and president of the Commercial Club of Chicago, described both men as conscientious in examining proposed community projects but could recall nothing remarkable about their dealings with each other. “You had people who were liberal and some who were pretty conservative, but we usually reached a consensus,” Mr. Martin said of the panel.
Since 2002, there is little public evidence of their relationship.
If by then the ambitious politician was trying to keep his distance, it would not be a surprise. In an article that by chance was published on Sept. 11, 2001, The New York Times wrote about Mr. Ayers and his just-published memoir, “Fugitive Days,” opening with a quotation from the author: “I don’t regret setting bombs. I feel we didn’t do enough.”
Three days after the Qaeda attacks, Mr. Ayers wrote a reply posted on his Web site to clarify his quoted remarks, saying the meaning had been distorted.
“My memoir is from start to finish a condemnation of terrorism, of the indiscriminate murder of human beings, whether driven by fanaticism or official policy,” he wrote. But he added that the Weathermen had “showed remarkable restraint” given the nature of the American bombing campaign in Vietnam that they were trying to stop.
Most of the bombs the Weathermen were blamed for had been placed to do only property damage, a fact Mr. Ayers emphasizes in his memoir. But a 1970 pipe bomb in San Francisco attributed to the group killed one police officer and severely hurt another. An accidental 1970 explosion in a Greenwich Village town house basement killed three radicals; survivors later said they had been making nail bombs to detonate at a military dance at Fort Dix in New Jersey. And in 1981, in an armed robbery of a Brinks armored truck in Nanuet, N.Y., that involved Weather Underground members including Kathy Boudin and David Gilbert, two police officers and a Brinks guard were killed.
In his memoir, Mr. Ayers was evasive as to which bombings he had a hand in, writing that “some details cannot be told.” By the time of the Brinks robbery, he and Ms. Dohrn had emerged from underground to raise their two children, then Chesa Boudin, whose parents were imprisoned for their role in the heist.
Little Influence Seen
Mr. Obama’s friends said that history was utterly irrelevant to judging the candidate, because Mr. Ayers was never a significant influence on him. Even some conservatives who know Mr. Obama said that if he was drawn to Ayers-style radicalism, he hid it well.
“I saw no evidence of a radical streak, either overt or covert, when we were together at Harvard Law School,” said Bradford A. Berenson, who worked on the Harvard Law Review with Mr. Obama and who served as associate White House counsel under President Bush. Mr. Berenson, who is backing Mr. McCain, described his fellow student as “a pragmatic liberal” whose moderation frustrated others at the law review whose views were much farther to the left.
Some 15 years later, left-leaning backers of Mr. Obama have the same complaint. “We’re fully for Obama, but we disagree with some of his stands,” said Tom Hayden, the 1960s activist and former California legislator, who helped organize Progressives for Obama. His group opposes the candidate’s call for sending more troops to Afghanistan, for instance, “because we think it’s a quagmire just like Iraq,” he said. “A lot of our work is trying to win over progressives who think Obama is too conservative.”
Mr. Hayden, 68, said he has known Mr. Ayers for 45 years and was on the other side of the split in the radical antiwar movement that led Mr. Ayers and others to form the Weathermen. But Mr. Hayden said he saw attempts to link Mr. Obama with bombings and radicalism as “typical campaign shenanigans.”
“If Barack Obama says he’s willing to talk to foreign leaders without preconditions,” Mr. Hayden said, “I can imagine he’d be willing to talk to Bill Ayers about schools. But I think that’s about as far as their relationship goes.”