The Diplomat Buyers Club

The other day Jon Stewart did a very funny episode on several new ambassadors who had seem to have been appointed without reference to any qualifications relating to knowledge about the country where they would serve.    He pointed out that the new ambassadors to Iceland, Argentina and Norway had never been there.   He also explained that  the new ambassador to China (former Senator Max Baucus) stepped down from his senate seat early to try to assure that the dems hold on to the Senate in 2014. Baucus admitted in his confirmation hearing that he did not know much about China.  Like much of Stewart's episodes his wry telling of the story was great.

But let me make a slightly different point.   What are the real qualifications of an ambassador?  There is a delicate balance between having a strong understanding of the current administration's positions and knowing the country where the ambassador will serve.  It might well be easier to learn about the country than to understand an administration's propensities.   Remember that in each of the embassies there are always country or region experts on the staff.

A case in point is Dwight Morrow who was ambassador to Mexico from 1927-1930. Morrow was a JP Morgan banker before entering public life.  Morrow's major qualification, when President Coolidge appointed him, was that he had been a classmate in college and he was part of Coolidge's inner circle.    But he ranks as one of the best US ambassadors to Mexico by any standard.   He immersed himself in the country and is credited with giving sound financial advice to the Mexican government.   The beautiful mural in the Palace of Cortez in Cuernavaca by Diego Rivera was commissioned by Morrow, who had a weekend home there.    Morrow helped to mediate the conflict between the Church and the Mexican government through a series of informal discussions between him and the president.  

A second example was Shirley Temple Black - who had been a fringe politician before she was appointed an ambassador, but was credited in stories about her passing this week as being a first rate ambassador.

So while Stewart's point is funny, I am not sure it is right.

How do we deal with the new McCarthy-ists?

The picture is from a website called "Stop Telling Lies about Liberals and We'll Stop Telling the Truth About You."    I have a sister in law who seems to like it a lot.   Their righteous indignation mantra is -

The truth always stands up for itself. we fight fire with fire and always tell the truth. If you disagree, or do not like with anything posted here, tough!

A few days ago she linked this on Facebook and with the same kind of civil discourse standard that the website promotes commented that it is "amazing that 'these people' can figure out how to vote."   She immediately got a lot of likes and statements of agreement - mostly focused on how ignorant they guy in the photo was.

I am not sure when this photo was taken.   I do not really care.   The guy holding the sign, even if the spelling errors were not there - does not represent even a small sliver of political opinion in the country.  Yet it is presented like it is a mainstream view of conservatives.

The Website also spends a lot of time on the usual suspects like Fox news and criticisms of policies by the Obama Administration (the IRS seeming abuse of power and issues surrounding our response in Benghazi are dismissed as "pseudo-scandals"   I am sure the Department of Justice's gun running to Mexico - which on its face seems like an absurd project for the government to undertake - got similar treatment when it was being discussed).   I realize that the same level of vitriol is available for conservatives.

From my perspective every American should be concerned about politicians in Washington and their constant interest in accumulating power in all sorts of areas.    Sure I am concerned about many things going on in the last five years, including getting better answers than we have been given about the conduct of public officials in the IRS, the Department of State and the Justice Department.   Public officials should be held accountable for their actions and at least in my view all three of those problems represent significant mal-or-misfeasance.    But I was also concerned about many things that happened in the preceding eight and the eight before that.  In my own professional area I was concerned when the Secretary of Education began assuming that she could run colleges better than colleges could (a trend that continues in the current Administration).  What concerns me here is the level of vitriol offered against the other side.   There is no room for civil discourse because one's opponents not only disagree with your thoughts but are evil in their disagreements.

The politics of self-righteousness  did not work well for Joe McCarthy (although there were indeed some problems that he helped to uncover) and they do not work for either side now.

The State of the Union

I realize that many of my partisan friends will find this to be a partisan comment - but it is not meant that way.   I listened to the President tonight and to the response given by the GOP and found both statements at best banal.   The list of priorities that the President outlined and that came in the GOP response seemed like what one good friend describes as "legislative kabuki" - not much of the list is likely to be adopted.   And more importantly a lot of the rhetorical points seem more bound in beginning to score points for November 2014 than to improve the chances that we would actually move forward on some key agenda items.

This tradition has a checkered history.   It began because of a constitutional requirement - Article II section 3 requires the President to periodically report to Congress on the state of the union - but beginning with Jefferson - many of our greatest presidents chose to offer only written comments.  Wilson brought the speech process back and almost every president since then has seen it as a chance to make a big speech.   But as John Walker argued it has become a "tedious relic."   John Walker was not the first to make this call - during Bush II several commentators made the same suggestion.

I think what bothers me most is that it has become an opportunity for Washington to demonstrate its arrogance that what happens there actually is critical to the rest of us.  In reality there seems to be a pattern which is too utterly predictable - the President (who ever is in office) claims responsibility for everything that is good (even though the claim is absurd) and then tries to blame everything that is bad against his opponents; he then lays out a laundry list of proposals and makes some rhetorical points that can be picked up later; he then makes one or more attempts to show how connected he is by introducing props who support his underlying points (I think Reagan began this practice) and then he "blesses America" and signs off.

Soon after the opposition gets the chance to make a statement - which is often not actually responsive to what the President has said.   In good years the SOTU gets forgotten quickly.  The President may or may not be successful in advancing an agenda and in rallying the troops in even numbered years.  But the whole things seems horribly self congratulatory.  The President, and for that matter most members of Congress, remain in a bubble.   They have little understanding or appreciation of what it actually takes to make the economy grow.

One issue of theory here is important and it comes from the architecture of the Congress versus the House of Commons.   In Commons the opposing groups are actually arrayed so as to confront each other at least visually on a daily basis.   Our Congress has none of that - and so much of what passes for discussion and debate is stylized drivel.   The point I am making is that I think the SOTU and its response is more of the same.   We all realize that neither statement is likely to be helpful in improving the public understanding of possibilities for changes in policy and that (perhaps more importantly) even with the bones thrown out in tonight's speech - that the partisan divide will be diminished in the least.

What interests me is what might happen if a president in the future were to have a bit more humility and started from the premise that his job was to get things done rather than score points.  He might draft a statement which proposed some ideas for policies and then actually engage with some real people about those ideas.   Most of the political operatives would think that would be immensely risky - but I think the American people who have to vote for these people might actually find it refreshing.   Both sides then might spend some time doing two things - first, they might actually try to engage the American people not in sound bites but in a substantive discussion about policy alternatives and (as importantly) they might actually begin to work on figuring out what they had in common.

The Hobby Lobby Case

This week the Supreme Court accepted two cases which could become a fundamental base for a new understanding of the role of government.    The President's Senior Advisor argued in an article on HuffPost that  A Woman's Health Care Decisions Should Be in Her Own Hands, Not Her Boss's.  That is something I agree with totally.   But then Valerie Jarrett perverts her own argument by assuming that if the government mandates something it should also be able to impose its values on individual employers.  There I disagree.  The two cases accepted were  Sebelius v. Hobby Lobby Stores, Inc. (13-354); and Conestoga Wood Specialties Corp. v. Sebelius (13-356).   The left has argued that this is a "radical" change in the way law is interpreted by adding individual rights to corporate ones.  Jarrett seems to think that the ACA should have imposed a common set of standard on employers not individuals (although there is indeed an individual mandate) and seems to ignore that the individual mandate, if interpreted in her broad reading, coercive.

Jarrett writes "Ensuring the full freedom of women as health care consumers to access essential preventative health services is a vital component of the Affordable Care Act (ACA). And nowhere are health decisions more personal or essential to keep in their hands, than those regarding reproductive health. The ACA was designed to ensure that health care decisions are made between a woman and her doctor, and not by her boss, or Washington politicians."   Unfortunately the ACA goes several steps further.

Could government conceivably require health insurers to add certain coverages for health policies?  Of course.  That is especially true if the government is providing the service.  But should government be able to force employers, who have formed in a corporate structure primarily in response to  our tax laws, to offer coverage which violates their religious beliefs?  I think not.

I am not an attorney.   But I believe that the four justices who voted to overturn the ACA in the courts are most likely to be joined by the Chief Justice, who wrote the convoluted opinion which formed the basis for upholding the ACA.  It is also pretty clear that the four justices who concurred with Roberts' decision are unlikely to change.  So we will be stuck with another 5-4 decision.

Ultimately, there are plenty of alternatives to the mandate and to the one size fits all philosophy of Jarrett.   I wonder whether Jarrett has ever tried to think about what Hayek called the "fatal conceit" - ultimately centralized solutions like Obamacare will fail because they ignore the rich diversity of the human experience.

This story has another twist.  What I have not seen is a set of suits challenging the President's arbitrary and capricious implementation of the law he challenged.   I am not sure where there is any authority for a Chief Executive to selectively over-rule provisions of an enacted law so blatantly.   His delay of the employer mandate and now other provisions without direct congressional authorization is a testament to the complexity of implementing this Leviathan - yet no where in the statute does he have the authority to delay those provisions that are hard to implement - especially when the delays are timed in such a manner as to sweep the problems under the rug until after the 2014 elections.

Whats wrong with Supercats for Health Insurance?

Before the ACA consumers had the opportunity to buy the equivalent of a "super cat" policy to cover only the extraordinary costs of health care.   Insurance is an agreement between the company and the insured.  There are two key concepts about insurance - frequency and severity.   Some insured events happen often, others not so much.   Some insured events are expensive and others are not.  A third idea one needs to understand about insurance is the concept of retention (Retention = deductible) which is really the amount of risk you are willing to bear.   In many cases people are willing to bear small and frequent risks from their own resources and hoping to have an insurance pool cover those larger costs that occur infrequently.

Think a bit about your car.   You can reduce the cost of insuring your car by increasing the level of risk you are willing to accept -for example if you raise your collision deductible you can lower your out of pocket costs that you pay to an insurance company.  But when accidents occur you have to pay out more on each incidence.  Thus, there are two implicit bets being made by people who raise their deductibles.  First, they believe that over the long term the net savings in premium by accepting a higher deductible will be greater than the costs incurred by auto accidents.   At the same time the make an assumption that they can bear the costs of the large expense when it comes.  

In health insurance, younger customers who do not have a lot of health problems can save a lot of money by buying a high deductible policy.   The attachment point for these can be a lot or a little - but the assumption is that day to day costs of health are borne out of pocket.   So doctor visits are not covered but major operations probably would be.

One size does not fit all in health insurance.   It has some characteristics that are similar to life insurance - as you age benefits are more likely to be paid out.   But as with life insurance some older individuals might choose to forgo full coverage of insurance.  One of the dynamics of the ACA is that it allows (and indeed even potentially encourages) individuals to postpone making a decision on health care costs because no person can be denied coverage.  Depending on one's income and situation in life it might be most economical to not sign up for Obamacare until you are faced with a catastrophic event.

Yesterday the President described the high deductible policies as "junk" - that is utter nonsense - although some of these policies are certainly less useful than others many are designed to meet consumer needs.  An implicit assumption in the President's logic is that all people who buy high deductible policies are unintelligent consumers.   In reality people who buy these policies are like the rest of the population - heterogeneous.    Some are young and don't use the system much.   Some are not wealthy and they are likely to be served by the expansions in Medicaid.  But many have made a wise decision of postponing spending on health care to accomplish other things.   They have more money in their pockets that they can use for other purposes.

There is plenty of evidence that the expansion of insurance and governmental interventions has increased cost structures in health care.  Many doctors have begun to reject both Medicare and Medicaid patients.  I have found that in some medical offices if you came in before the ACA and offered to pay cash (and thus allow a medical office to not go through the forms process) they would offer you a discount over their normal fees.

A wiser course when the ACA was being considered would have been to allow some of these "super cat" policies - that might have been acceptable even if those consumers were required to sign a disclosure (as one does in lending transactions) acknowledging the types of risks being assumed by the purchaser.   But the majority that passed the bill would have none of it.  And the Secretary charged with implementing it went about her work in the most doctrinaire manner possible.

A new definition of accountability

I must say that after I read reports of the HHS Secretary's testimony yesterday I had to go back to the dictionary. She said "Hold me accountable for the debacle. I'm responsible," - So what does the dictionary say - "the fact or condition of being accountable; responsibility."

So did the Secretary say  assure those people who counted on the promises that she and the President made would be fulfilled? (If you like your current policy you can keep it)  Uh, no.

So did the Secretary suggest that she had an answer to fix the problem of many current policy holders experiencing huge increases in premium?  Uh, no.

So did she say they would fix the process by which a massive new complex consumer website was allowed to go live without adequate testing?  Uh, no.

So I am confused.   What does taking responsibility mean?  When Harry Truman was President he said "The buck Stops here."  For the Secretary, the words are clear but the substantive actions are not.  In the Nanny World view of the Secretary being accountable means making decisions for others that you do not feel they are competent to make on their own.

The Absurd Dynamics of Obamacare

Ezra Klein of the Washington Post's Wonk blog has been furiously trying to find a pony in the load of errors that is Obamacare at this point.   He did a post yesterday which argued that the ACA's policy was actually pretty good - despite the news of the computer screw ups.   He presented a diagram and called it the Obama Trilemma - which argues that the ACA is trying to balance three different issues in health insurance.

When you think about the diagram at the right it which comes from his article, it looks simple - but the simplicity makes all three legs inaccurate.  That is true in part because it oversimplifies the problems associated with trying to advance health care coverage.

Take each of the three legs of the triangle.   Affordability is a concept that is, in this instance, in the eyes of the beholder.   What is the right percentage of income that a person should bear to be covered?   That answer is different for the poor and the rest of us.  Accessibility is a bit clearer - although in this case because of the mandate - accessibility is not voluntary.   Is a comprehensive policy one which meets the current needs of a policy holder or one which covers all eventualities?   If you decide to define it as the latter, then the costs for many consumers will be significantly in excess of what they would pay under a less regulated market.

There are actually four markets that the ACA is trying to cover - the group policy (where individuals are covered for health costs by a policy issued by an employer), the individual (where individuals buy coverage on their own), Medicare and Medicaid.   Medicare is relatively straight forward - individuals are covered for a basic policy and have the option to purchase at additional expense a broader set of coverages.  Although it is financially unsound, we at least understand how it works.   The case that was made to expand Medicaid was that it was not accessible to a broad enough range of individuals (that depends a lot on how flexible the individual and group markets are) and on your definition of equity - in this case the Congress chose to define the standard quite liberally (400% of the poverty rate calculated by the Federal Government).

The real problem comes on accessibility for the individual and group markets.   If comprehensiveness is too broad then insurance companies are likely to reduce their spread of risk or raise their prices to cover those new costs.   Remember that the President repeatedly told us that "If you like your current policy, nothing will change."   That turns out not to have been true.  Comprehensiveness for the supporters of the ACA is defined by someone else - In 1993 Hillary Clinton commented "We just think people will be too focused on saving money and they won't get the care for their children and themselves that they need"   So much for consumer choice.   Here is the situation for one such policy holder who had her choices reduced by the ACA -

I'm one of those 7 to 12 "millions" who has had an individual "policy"- in Texas, no less- for 10+ years. Premiums with my current Ins.Co.- BCBS- are going up 25% for an individual "Silver level" policy. What am I gaining/losing ? Mental health coverage (thankfully, don't need); better Rx coverage (I think- but maybe not); no lifetime policy maximum ( mine was $1MM); maternity care (Umm, at 60, don't need it); had 80% major med/ co-insurance-BUT- no maximum out of pocket. With a Silver plan, I'm down to 70% "co-insurance" but a "cap" on out of pocket at $6250. Is it a "good deal" for me, assuming no catastrophic health crisis ? No. But neither was/has been my private, individual policy of 10+ years- Over $7,000 a year before co-pays & deductibles for "benefits" that have averaged out to less than $500 a year. 
I "get" shared sacrifice; I get getting the under served/poor into a system that treats before a crisis (and out of the ER- which as a Taxpayer, I am paying for directly- via my property taxes here in Dallas); I get convincing the young invincibles that nothing is free forever. 

Evidence is coming in fast and furious that a lot of people covered in the individual market are being dropped or are facing huge increases in costs.   The numbers at this point are in the millions.  Sara Kliff - who writes on healthcare for the WP, commented that between half and three quarters of the buyers in the individual market are going to be dropped.  She says that is because the plans do not meet the standards of the ACA.   In reality the numbers look to be a lot larger, in part because some of the group market is also being affected and many group policy holders are facing significant cost increases.  One administration person called the 5% (probably a low number) insignificant.

There is one other twist in the program which has long term implications.   There was an implicit tradeoff in the ACA  - we could afford to expand the coverage in the Medicaid part of the system IF we got people who were currently uncovered to buy coverage.   Evidence from the successful sites like Oregon is that the vast majority of "purchasers" are signing up for Medicaid.   That makes the economics of the program even less favorable.

The ACA, at least in California Covered, which I investigated for a friend, has lots of choices - from bronze, to silver, to gold plans - offered by a number of providers.  That seeming choice is not realized when you add in all of the mandated services.   Costs even for a minimum policy may not be reasonable except for a person who is getting a government subsidy.

If we can ever get to trying to fix this mess (after the incompetent computer code is adjusted) we might begin to think about a system which offers a shopping basket rather than a package for consumers.

A thoroughly misleading statistic

Earlier this week the Census Bureau released numbers which I found to be significantly misleading.   The headline stated that 49% of Americans get government benefits.  82.5 million Americans receive Medicaid benefits (that is about one in four).  Almost 50 million receive Social Security payments.  An equal number received food stamps.  46 million get Medicare.  20 million receive SSI.  13 million receive subsidized housing.  5 million receive unemployment benefits.  3 million get Veterans benefits.  And about 360,000 receive Railroad Retirement.  (The chart at the right is from the WSJ)

Here is my problem with the number.   I have color coded two types of programs - those which require a contribution (where the government serves as a bank) and those which do not.  In many cases the programs that are contributory are a horrible deal.  For example, over my career my employers and I contributed almost $350,000 to Social Security and almost $100,000 to Medicare taxes.   If you simply net present valued those contributions my current Social Security benefit would be at least double what I am receiving.  And more importantly I would have a net asset to pass on to my heirs.   Medical insurance would be a lot more expensive but would still provide better benefits if the program were a true contributory scheme.

Some of those programs in black are set up like a risk pool.  So, for example, every wage earner pays a percentage of wage to unemployment insurance.  During my career I never had to use the insurance, but had I been unemployed I could have cushioned the problems of not having a wage while I looked for another job.   But some things that are called insurance are not.  FICA (or Social Security) is called insurance but it is not.   The structure of Social Security where one generation pays for another (thus if the number of contributors begins to be smaller than the number of recipients) is unsound financially but in no way is it insurance.   Many of the problems of these "benefit" programs could be solved by making part of the payments we all make into a savings program and part into a welfare payment for those who have been less fortunate.   That is what places like Chile have done and it immediately put their program on a sound footing.

By confusing the notion of benefits you begin to confuse the basic role(s) of government.  There are now 15 million more people receiving food stamps than there were at the start of the recession and the number continues to grow.  At the same time I am concerned that the rollout of the ACA will increase the recipients of non-contributory benefits.   Clearly, as a society we need to provide for those who cannot provide for themselves.   But we should not make two errors that I believe the stories about the Census numbers do.   First, we should not aggregate the data between programs run by government that are (at least in theory) supported by contributions and those where support for individuals receive benefits without direct contributions.  Second, if we really want to focus on those with legitimate needs then we need to think about ways to assure that those programs which are contributory all the maximum flexibility to the contributors to get the best yield on their contributions.  

Combining contributory and welfare benefits together distorts reality and makes a bad deal for both the contributor and the recipient. If you carry the logic of this statistic to its conclusion then every time I drive on a road, which I pay for with income and gas taxes I am getting a benefit from government.   Government then becomes the creator of all benefits.   That certainly is not a way to advance a free society.

Reporting the news and other fantasies

The WP noted earlier in the week that the government shutdown and the cumulative effect of all the uncertainty in government policy had cost the US economy a whopping $700 billion since 2010.   But when you go to the source (which is the Peter G. Peterson Foundation) you find that the report actually makes a very different set of claims.   The Report claims the following:

#1 - The Perils of Fiscal Uncertainty (which include the inability of our leaders to establish long term policies on spending and taxes) has lowered GDP growth by .3% per year since 2009 at the same time unemployment has been kicked up by .6%.

#2 - The partial shutdown could cost .3% in fourth quarter growth.

#3 - The Debt Ceiling uncertainty has also created the possibility (with two different scenarios) that dampens employment demand and thus reduces GDP growth.

#4 - The reductions in discretionary spending have dampened growth by .7% and increased unemployment by .8%.

Some of the conclusions are quite questionable.  For example for #4 to be correct one would have to accept a fairly significant economic multiplier for government spending.   My own conclusion is that the reductions in government spending when they coincide with reductions in uncertainty and a long term reduction in deficits would lead to significant economic growth.

When you read the full report (which is a mere 14 pages) you find that it continues a long established notion from the Peterson Foundation - the current fiscal regime is unsustainable.  We need to balance revenues and expenditures.   Early in the report it suggests that

Economists agree that failure to shrink prospective deficits and debt will bestow significant economic consequences and risks on future generations. Federal deficits drive up interest rates, “crowding out” private investment. If government borrowing supports consumption (e.g., through Social Security and major health programs) rather than public investment, the nation’s overall capital stock declines, undermining our standard of living. The process is slow but the eventual impact is large.2 In addition, accumulating debt raises the risk of a fiscal crisis. No one can say when this might occur but, unlike crowding out, a debt crisis could develop unexpectedly once debt reached high levels.

At no place in the report is the figure of $700 billion mentioned.   The report clearly supports ending the uncertainty and not unsurprisingly seems to argue that while revenues might be a part of any solution to the set of problems - expenditure reductions and a more stable tax policy would significantly improve growth.   Clearly, the Foundation suggests that we need to come to a resolution about the appropriate role of government (and in past publications they have argued that). 

Unfortunately, polarized government has fostered a systemic refusal—or inability—to legislate sensible long-run policies to address U.S. fiscal imbalances. While there is disagreement over the terms of the inter-temporal trade-off implied by the requisite fiscal contraction, the political battle centers on the distributive role of government in society. Intransigence over that issue, combined with the annual need to appropriate funding for defense and other discretionary federal programs while avoiding sovereign default, has driven Congress and the Administration to adopt short-sighted, sometimes seemingly arbitrary policies. The number of temporary tax provision set to expire at the end of each year has risen dramatically over the past two decades.

The WP claims that the sum total of all the figures above amounts to a 3% loss in GDP.    No rational economist can think that if you sum the effects of the four perils that they do not interact.   What the Post has done, in my opinion quite irresponsibly, is to trumpet a number which is dubious at best.   There are part of the Peterson report that I agree with - we need to fix the budget.   But the right fix is not simply to raise taxes to equal our long term and unsustainable commitments.

Ending the Shutdown and Next Steps

The WP seems to think Everything is Groovy as a result of the agreement that was hammered out on Wednesday and immediately signed by the President.

The deal did a couple of things - which I believe could have been done a couple of weeks ago.  First, it established a conference committee on the budget (which will report by mid-December) - that gives a chance to air the issues surrounding how much we are spending in the federal budget. It might also set up the possibility that some long term issues (like an alternative CPI for entitlement adjustments and tax reform) might be put on a more reliable path.   Second, it increases the rigor for needs assessment for subsidies under the ACA.  If the site is ever able to be fixed (calling the Federal process in building the website gross incompetence is being kind) that should reduce the cost curve.   The medical device tax and some of the other issue are still in the program but that could change in the budget conference committee.   Third, it moved the deadlines for the debt limit and the budget down the road a bit.

The WP was giddy.  Their defaultometer (above) uses the variables to the right.   The WP argues that the financial indicators are a reliable index of whether the markets believe that a default is likely.   Pardon me, but the indicators are baloney and temporal.   At the same time the directionality has no reliable scale.   If the VIX (the volatility index) moved by a larger number than the one in the table - would that be a more positive sign?   Is a move from 40-41 on the economic confidence index a significant move?   What utter nonsense.   But that is the way Washington "thinks" and the WP is merely a reflection of the pre-Copernican world of DC - where everything revolves around the political class.

So are the pundits right about the GOP taking a shellacking in this episode?   I think the answer is yes and no.  (Sounds like an economist doesn't it?)   One of the clear winners here was the Minority Leader of the Senate - McConnell was able, in spite of an increasingly bitter environment with the Majority Leader to figure out a way to bring us back from the brink.   I think the brink was a bit over rated.   The absurd estimates of the shutdown ($700 billion) are just that, absurd.   But from my perspective the shutdown accomplished very little.   Salon called the GOP experience their "Alamo."   But wiser heads have concluded that the seeming precipitous decline in GOP fortunes was not permanent.    One need only look at the right-wrong direction polling (where 13% of those polled think we are headed in the right direction) to believe that with proper attention the GOP could make some progress in 2014 on both key issues and on holding the House and increasing margins in the Senate.

The long term equation for the GOP is actually pretty simple (although not without perils).   Obamacare is unlikely to be loved by almost anyone in the next year.    Economic growth is not likely to move significantly in the right direction.   If the budget conference committee actually reduces the long term curve of spending then prospects should improve.  At the current time the differences between the Senate and House versions of the defense and non defense discretionary parts of the  budget are about $100 billion apart ($967 vs $1058).   That does not sound like a lot.  (We need to update Everett Dirksen's quip - "A hundred billion here and a hundred billion there and you soon have real money.")

But all is not glistery either for the GOP.   Parts of the GOP are doctrinaire they want all of their goals immediately.   That is true of the Dems (especially on the almost religious adherence to increasing taxes) also but since the media highlights the negatives in the GOP - that can become a problem.   There are some of the loons who are arguing that they should do a primary against several of the members in both houses who tried to work out a deal.  

Ultimately, the end result of this agreement is not as bad as it could have been.  At the same time the progress on the budget and reducing the negative effects of Obamacare were not as significant as it could have been.  If the far extreme budget hawks can look to the long game - conservatives could make some great progress in 2014 and possibly (if they can show some patience and get some thoughtful candidates through the nominations process) 2016.

Reflections on Gridlock

I've been struck in this current (or continuing) political fight how unable the political class seems to be able to look for a solution on both the budget and the debt ceiling.   There are many causes but no one seems to be working toward a solution.   But the discussions in the media have been less than helpful.

Here are some thoughts - 
#1 - Each side seems intent on talking to itself - Here is how a left of center friend described the stalemate in a Facebook post - "This is a fight they have lost nearly 50 times in Congress, in a national election, and in the Supreme Court. Democrats have compromised by offering a measure that included $72 billion in annualized across-the-board spending cuts to keep the government open. The Senate passed this legislation multiple times before the government closed. " This friend is normally a very reasoned person but the post strikes me as ignoring some major issues.    Let me parse the statements a bit.  This is a fight they have lost nearly 50 times in Congress, in a national election, and in the Supreme Court.  I am not sure where the number 50 comes from but my friend ignores the fact that the ACA (if that indeed is the base of the problem) was adopted by an extraordinary set of procedures without a single vote from the GOP; the immediate election after the bill was adopted saw massive losses for the democrats mostly attributed to the one bill; the Supreme Court's decision on the constitutionality of the measure was actually a 4:4:1 decision. It is one which is not likely to be in the replay roll of SCOTUS.   All of this suggests that the ACA could use some adjustments to build a broader political base.  Democrats have compromised by offering a measure that included $72 billion in annualized across-the-board spending cuts to keep the government open.   That assumes that the supposed $72 billion actually solved the deficit - but it (which even with the reductions from the top) continues to be among the largest in our history.  More needs to be done on both the level of government spending and reducing the debt.   The Senate passed this legislation multiple times before the government closed.   So far the leader of the Senate has been the most strident in opposing any substantive discussion about changes in the ACA.  When you listen to the pundits of the right - they echo tired phrases - as tired as the ones of my friend on the left.

#2 - The Political Class seems to think this is a silly game not serious business - Wonkblog actually created a Daily Default Dashboard (See illustration above) which is based on a series of questionable financial indicators.   Even that seems to indicate that the level of projected tension in Washington is not high at this point.   They figure they can screw around for a couple of more days and then get credited with the save.   Joel Kotkin points out in a recent column "This has been a golden era for the nation's capital, perhaps the one place that never really felt the recession. Of the nation's 10 richest counties, seven are in the Washington area. In 1969, notes liberal journalist Dylan Matthews, wages in the D.C. region were 12 percent higher than the national average; today, they are 36 percent higher. Matthews ascribes this differential not so much to government per se, but on the huge increase in lobbying, which has nearly doubled over the past decade."  Kotkin argues that all this has lead to a divide in the country that is not just left/right but between the Washington elites and the rest of us.   The GOP may be leading the way but everyone's reputation is taking a hit - at some point we will rise up and say enough shenanigans.

#3 - So what about the debt ceiling and the CR? - Yesterday the President said he will begin to negotiate when the House passes a clean CR and debt limit increase.   He seemed also to say that it is unusual to negotiate on something like the debt limit - (one of his favorite lines - the debt limit increase is merely confirming what Congress has already authorized).   But those premises are false on a number of points.   First, since 1962 the debt limit has been raised 74 times (according to the Center for American Progress - hardly a conservative mouthpiece).   Our debt held by the public amounts to about two thirds of our national product which is the highest it has been in almost sixty years.   In prior periods things like Gramm-Rudman-Hollings and PayGo have been included in debt limit adjustment agreements.  Debt limit votes have proven a good time to elicit spending reductions and controls.  Doing what the President proposes would expose about half the country to more unbridled spending.

Interest on the debt is about 6% of the total federal expenditures.   So the claim that if the debt ceiling is not increased we will default are nonsense.  Organizations like Moody's have pointed out the absurdity of the claim - in a CNBC interview the CEO of Moody's said  “It is extremely unlikely that the Treasury is not going to continue to pay on those securities, hopefully it is unlikely that we go past October 17 and fail to raise the debt ceiling, but even if that does happen, then we think that the U.S. Treasury is still going to pay on those Treasury securities,” he added.   The best estimate of the effects of the lack of a CR (continuing resolution - which is a short term fix necessary because the Congress cannot actually pass a real budget) has on governmental programs is about 17% (thus 83% of the government is still operating).  The President has a lot of discretion in deciding which things stay open. So if we default it will be done by the President much in the same way that the Administration has chosen which things to call non-essential.  So far the President has chosen a standard policy of making the pain visible.   But as we saw at the WWII memorial - many people are beginning to understand the politics of closures.

#4 - So what is the fight actually about? -.   Note that in the last five years, partially as a result of the recession but not entirely, the percentage of the economy dedicated to federal spending is significantly above what it was prior to this president.   Revenues have begun to trend back to their normal levels (at under 20% of GDP) but the deficit is still large because the expenditure side of the budget is still considerably larger than it has been at any time in our history.  Note the projected "drop" brings the budget back to 4-6% over where it has been and that is in a time when war expenditures are going down.  As mentioned above, that is also true for that our total national debt (both what is represented in internal transfers and what is owned by the public) is the highest it has ever been.

Ultimately, I believe the American people want something less from government.  They've shown a reluctance to raise taxes to the levels necessary to fund all the things the Administration wants to do.  They've also shown a great deal of well deserved grumpiness about the implementation of the ACA.    One other issue - unlike prior fights on this issue - while the right is taking a beating - so is the President.   An NBC/WSJ poll in September found that a small majority of Americans disapprove of Obama's handling of the economy (52%).   By a 2:1 margin Americans do not want to raise the debt ceiling.   At the time the respondents supported the GOP notions on working on the deficit by a 12 point margin.  Another major poll about the same time said by a 20% margin that they disapproved of the President's handling of the economy.   And more importantly 40% thought the economy would be worse off a year from now.  52% of the respondents believe that the economy is in bad (bad, very bad or terrible) shape.

#5 - How will it all come out? - see The Paul Masson Theory of Legislating - I've taught a course on legislative practice over the last couple of decades in which I lay out about a half dozen rules that I came to understand in the four decades that I worked in Washington and Sacramento.  The Paul Masson Rule is simple - legislators will make no decision until they have to (riffing off the old commercial - we will sell no wine before its time).   My suspicion is that they will begin to talk in the next couple of days and come to a resolution within a day or two of the supposed deadline when the debt ceiling will begin to pinch - that might be as late as the 20th but certainly before Halloween.

Running for office and from responsibility

On Monday afternoon, after a horrific spectacle at the Washington Navy Yard, the President took the opportunity to tout his economic record before a bunch of hand picked lapdogs on the South Court of the White House. His remarks were designed to "celebrate" the five year anniversary of the financial meltdown - that "anniversary" could have been held at any time. But this president has no sense of proportion. I have taken eight comments out of the President banal yammerings and added some commentary. What Obama seems to fail to get is that compromise takes two sides working together.  The genius of the American political system is the design - it take a broad consensus to move things forward.   In the world of this President he believes that he preempts anything.  All that within a spectacle over the last several weeks - where his indecision on an international issue has worked to make the situation considerably worse.   But again, this President, does not care.  Commentary described the speech thusly - "After the spectacle of indecision and retreat that was his Syria policy in the last month, and a year in which he proved again that he hasn’t the leadership skills to broker a deal with anyone but his sycophants, all Obama has left for us is anger at his political foes and a reflexive need to blame them for all of the country’s woes and his own failures." That is harsh but accurate.

The President's remarks came just a day before the 228th anniversary of the last day of the Constitutional convention. One of the blogs I read posted remarks from President Coolidge on the importance of the Constitution

"It is axiomatic that our country can not stand still. It would seem to be perfectly plain from recent events that it is determined to go forward. But it wants no pretenses, it wants no vagaries. It is determined to advance in an orderly, sound and common-sense way. It does not propose to abandon the theory of the Declaration that the people have inalienable rights which no majority and no power of government can destroy. It does not propose to abandon the practice of the Constitution that provides for the protection of these rights. It believes that within these limitations, which are imposed not by the fiat of man but by the law of the Creator, self-government is just and wise. It is convinced that it will be impossible for the people to provide their own government unless they continue to own their own property. These are the very foundations of America" -
The President began by a hearty back pat -

"By the time I took the oath of office, the economy was shrinking by an annual rate of more than 8 percent. Our businesses were shedding 800,000 jobs each month. It was a perfect storm that would rob millions of Americans of jobs and homes and savings that they had worked a lifetime to build. And it also laid bare the long erosion of a middle class that, for more than a decade, has had to work harder and harder just to keep up."

From my perspective the President fails to consider what the causes of these horrible situations. A good many of them are attributable to governmental policies and as importantly, many of them remain unimproved.   As Coolidge suggested a good part of the role of government is to understand when its actions can be ineffective.
He went on to give the now obligatory "stories" of real people.
And so those are the stories that guided everything we've done.
President Reagan was one of the first to use this technique and at the time many people said it was a way to show the president actually lived in the real world.   But stories like the ones the president used are not a substitute for sound judgment on policy.

Then he offered himself some more back pats....
And what all this means is we've cleared away the rubble from the financial crisis and we've begun to lay a new foundation for economic growth and prosperity. 
If this is recovery I would hate to see what a slowdown is to him.  This recovery still has substantial unemployment and mediocre economic growth.   Many economists would argue that part of the reason for that performance is the policies he adopted, some of which were continuations of the previous administration.

He then goes on to make his pitch -
We need to grow faster.  We need more good-paying jobs.  We need more broad-based prosperity.  We need more ladders of opportunity for people who are currently poor but want to get into the middle class.
Indeed we do.  But he then indicates (as he did during the last campaign) that government is the engine of growth.
The budget Congress passes will determine whether we can hire more workers to upgrade our transportation and communications networks, or fund the kinds of research and development that have always kept America on the cutting edge.  So what happens here in Washington makes a difference.  What happens up on Capitol Hill is going to help determine not only the pace of our growth, but also the quality of jobs, the quality of opportunity for this generation and future generations. 
The logic he uses here is utter nonsense.   By reducing the influence of government in our economy - growth is likely to recover.  But his sole definition of a sound recovery is one where government is allowed to grow significantly.

Then he goes into his deflective mode (what some have called the Bart Simpson theory of political responsibility) -
Up until now, Republicans have argued that these cuts are necessary in the name of fiscal responsibility.  But our deficits are now falling at the fastest rate since the end of World War II.  I want to repeat that.  Our deficits are going down faster than any time since before I was born.  (Applause.)  By the end of this year, we will have cut our deficits by more than half since I took office.

Now, keep in mind, initially, the whole argument was we’re going to do this because we want to reduce our debt.  That doesn’t seem to be the focus now.  Now the focus is on Obamacare. So let’s put this in perspective.  The Affordable Care Act has been the law for three and a half years now.  It passed both houses of Congress.  The Supreme Court ruled it constitutional.  It was an issue in last year’s election and the candidate who called for repeal lost.  (Applause.)  Republicans in the House have tried to repeal or sabotage it about 40 times.  They’ve failed every time.

There are so many things in these two paragraphs it is almost hard to know where to begin.   Deficits are going down not because of economic growth - which is one way to accomplish that - but because of the sequester and because the Congress has wisely (or politically - and I do not think it makes any difference) understood that spending more does not grow the economy.   The ACA is one of those rare instances in policy where no member of the opposition joined in supporting it.   It is beginning to unravel - or why would the President delay its implementation until after the 2014 elections; why would the AFL (one of the President's most loyal allies) ask that the law be significantly revised.   While the House has voted 40 times to repeal Obamacare (I am not sure that the number is correct but for the moment consider that it is true) the Senate has not passed a budget for a number of years.   They have simply bottled up any serious discussion of any issue.   At this point the President's prized enactment is supported by about 4 Americans in 10.

He then gets to the meat of his argument - 

Meanwhile, the law has already helped millions of Americans -- young people who were able to stay on their parents’ plan up until the age of 26; seniors who are getting additional discounts on their prescription drugs; ordinary families and small businesses that are getting rebates from insurance companies because now insurance companies have to actually spend money on people's care instead of on administrative costs and CEO bonuses.

A lot of the horror stories that were predicted about how this was going to shoot rates way up and there were going to be death panels and all that stuff -- none of that stuff has happened.  And in two weeks, the Affordable Care Act is going to help millions more people.  And there's no serious evidence that the law -- which has helped to keep down the rise in health care costs to their lowest level in 50 years -- is holding back economic growth. 

The claims of the effects of a law, which has not been implemented and which the President himself has arbitrarily moved to not enforce, are not clear.   There may well be some short term effects that may seem to be positive.  At the same time numerous employers are opting to reduce the number of hours for their employees to assure that they are not required to pay for the significant unfunded mandates in the new law. Most commentators suggest that the long term costs of this administrative monstrosity will not be positive for the health care system nor for the economy.

From my perspective there are two takeaways from this speech.   This president, more than any in history, considers his powers to be over the other two branches - he has shown no willingness or even ability to sit down with his opponents on a substantive basis and begin to work the nation out of political gridlock.   Second, with his imperial sense, he does not seem to recognize that on a day when a national tragedy happened within about 20 of blocks of his office that the time for political rhetoric should be delayed.

Larry Summers drops out

NEWS COVERAGE WITH ANNOTATIONS (Note the picture was specially chosen to show Summers at his best) - Larry Summers, the former Harvard President and current somewhat Washington insider withdrew his name from consideration as Fed Chair today.  In his note to the President he said he had "reluctantly concluded" that the confirmation process would be "acrimonious and not serve the interests of the Federal Reserve, the Administration, or ultimately, the interests of the nation's ongoing economic recovery." (Read he counted the votes or the President's staff did.)  He also is quoted as saying  “This is a complex moment in our national life. I have reluctantly concluded that any possible confirmation process for me would be acrimonious and would not serve the interest of the Federal Reserve, the Administration, or ultimately, the interests of the nation’s ongoing economic recovery.” (Read again he did not have the votes and the President has lots of other nasty fights to deal with.  Read also that the President's approval rating (on the RCP average) on handling of the economy is just a bit over 40%)  The President responded with "Larry was a critical member of my team as we faced down the worst economic crisis since the Great Depression, and it was in no small part because of his expertise, wisdom, and leadership that we wrestled the economy back to growth and made the kind of progress we are seeing today," the president said in a statement.  (Note the President reads polls too)

"I will always be grateful to Larry for his tireless work and service on behalf of his country, and I look forward to continuing to seek his guidance and counsel in the future," the president added.  The President did not express an opinion about Summers' tireless quest for the Fed job.

Summers was a key figure in the early stages of the Clinton Administration and also served a key role with the current one.   He has a well deserved reputation as arrogant. (see an earlier post)  Yellin has more direct bank experience and although she is likely to be more accommodative than ideal - I expressed an opinion earlier that she is a better choice.

The speculation is that the liberals got him in favor of Janet Yellin.  From my perspective that is a bit too simple.   Some polling on the Summers nomination got negative reviews from bankers and others on Wall Street.   A USA Today survey found that 56% of the economists polled preferred Yellin. There may be a third candidate Donald Kohn (who was a Bernanke deputy)- but I would put my money on Yellin (which is indeed what you do when a new Fed Chair is named) 

Neville Obama

It was very hard to think about the President's speech last night because a good deal of it was substantive and made a very good case for the reason that the US might act in response to the Assad regime's use of chemical weapons. Let me state at the outset that I am not convinced that we should be involved militarily in Syria.  But events may have overtaken coming to a sound conclusion in this area in the world.

Here are some quick thoughts on the President's speech -

#1 - The Appropriate Role of Congress - The President commented that "I believe our democracy is stronger when the President acts with the support of Congress. And I believe that America acts more effectively abroad when we stand together. This is especially true after a decade that put more and more war-making power in the hands of the President, and more and more burdens on the shoulders of our troops, while sidelining the people’s representatives from the critical decisions about when we use force." Obama seemed to imply that the actions in Iraq were not conducted with "the support of Congress" - but Public Law 107-243, which was passed and adopted before any actions were taken in Iraq contradicts that assertion. Just how did more power accrue to the President during the last decade?  Well, the best example came in our intervention in Libya where the President (Obama) did not seek any congressional support.  What is odd about the President's statement is his complete avoidance of working with Congress.   About the only congressional ally he has had in this from the GOP has been Senator McCain.

From my perspective his move of a resolution to Congress was in the belief that the GOP might defeat a resolution and thus he could partially shift the blame.   The best presidents understand that working with both sides of congress can be frustrating but rewarding.   This president does not get that.    He seems to take issues with congress as an up or down vote with no understanding of the long term nature of politics.   President Reagan understood that working with congress produces long term benefits.  This president does not get that.

A recent post on the Rothenberg report concluded with "In short, if the president had engaged members of Congress from the beginning of his tenure, even behind closed doors, some of his most challenging political moments could have been an easier lift. Democrats might even still be in the majority in the House if the health care and cap-and-trade bills had been handled differently. And that certainly would have an effect on the legacy that Obama leaves behind."


#2 - Moving Public Opinion - Generating public support for any policy needs to include a wide range of figures from both sides of the aisle on an issue as important as this.   There is no evidence that the President has sought advice or counsel from anyone outside his narrow band of staff and advisors.   I wonder what opinions about this might be had he consulted with people like former Secretaries Rice or Schultz.

#3 - The Role of the UN - Whether the President got backed into his new role or not (and I believe he was backed into this position by his gaffes and Kerry's) he now has to trust that Russia will not work to weaken the resolution against Syria (not likely) and will do everything in its power to encourage expeditious work by the inspectors (the Iraq experience does not offer much promise).  Look at the cat and mouse games that were played in Iraq.   I expect that between Putin and Assad the old ropa-dopa defense will come back to the fore.

#4 - Can we trust Putin? - The Keystone Cops in the White House have seemed to lurch from one gaffe to another.   The President drew a line in the sand and then denied it.  Kerry had a series of stumbles.  All the time Putin acted as he did in the Snowden affair - attempting to reassert Russia's role in world affairs.   The President characterized the developments in the following manner - "over the last few days, we’ve seen some encouraging signs. In part because of the credible threat of U.S. military action, as well as constructive talks that I had with President Putin, the Russian government has indicated a willingness to join with the international community in pushing Assad to give up his chemical weapons. The Assad regime has now admitted that it has these weapons, and even said they’d join the Chemical Weapons Convention, which prohibits their use."   The Russians actively tried to delay any vote in the Security Council which would  assert the need to follow the Chemical Weapons Ban Treaty's requirements.

#5 - Possibly the least gracious administration in history - The old adage - Success has many fathers, failure is an orphan -  seems to apply here.  Part of the justification for moving the vote to congress was to possibly shift blame.   As it became clear that the vote was not going to affirm the President's position, he asked that the resolution be withdrawn.   But then today the White House Press Secretary made the absurd comment in a briefing that Putin now holds some of the responsibility for the success of this issue.  The White house seems hell bent in this and in almost every other activity it engages in to look for scapegoats in advance thinking oddly enough that their failures will not be judged if there is another person/entity to blame.

#6 - Possible Outcomes - It is hard to understand how this can come out positively.  Assad has been a rogue regime for a long time, he has no significantly greater pressure to change his ways and he has the threat of violence against him significantly reduced.   In the near future we will be presented with another rogue regime (Iran) possessing nuclear weapons capability.   Is it likely that the Iranian mullahs will respect any American threat when that situation becomes clear.   Does North Korea have any encouragement to act more nicely?

This is admittedly a complex situation and American interests may not be served by doing some sort of military action in Syria.   If things work out it will be by dumb luck and providence.  Regardless, the President's lack of understanding of the bigger pictures of the American political scene and the international stage have cost the country a lot.

The Onion produced a story this morning that sums up the current state of public opinion - It proclaimed that a majority of Americans support sending Congress to Syria.  Come to think of it - that is not a bad idea.

One more thing on Syria

The WP published a Whip count for both houses this morning which shows one thing positive about the President's Syria policy - it seems to have generated genuine bipartisan response.

Godot's in Syria

I've hesitated in writing a post on Syria, not because I do not have some thoughts about the issues but more because I am thoroughly disgusted with the political elites behavior - that is without regard to political party although I think the Administration's behavior has been well below par.

Let's get something straight.  International relations does not always involve people of goodwill but one principle seems to be eternal.   When you say something, especially something that is relatively clear, you better be prepared to follow through - or you will become chump of the globe pretty quickly.

One other opening comment - It looks like one side or both used chemical weapons in Syria.  And in an ideal world we would figure out how to spank those that did use the weapons - but a response would be more effective if we acted when we established the fact.  Waiting here is not really good- especially when we have made a threat.  We are not necessarily obligated to respond to every tin horn dictator's outrageous actions; but there are times when we should respond.

So here are my thoughts -

#1 - It really is 3AM -  During the 2008 campaign Hillary Clinton campaigned against the President by wondering if he was the guy to answer a crisis phone call at 3 AM.   This administration has demonstrated throughout this crisis manifest incompetence.  He seems to think he can control the story as well as he controlled the news around his campaign.  The President cannot take back his original (seemingly unscheduled) "redline" comment. He made a threat.   His record here has been one of almost constant political rather than strategic actions.   In 2006, while he was ramping up his campaign he said to the Boston Globe - "The president does not have power under the Constitution to unilaterally authorize a military attack in a situation that does not involve stopping an actual or imminent threat to the nation."  Having written a Master's Thesis on the War Powers Resolution, I have some sympathy to that position.   But his "first you say you can then you say you can't" public indecision on the power of the president, hardly gives the American people a sense that he is in any way thoughtful about the situation.

Kerry has done nothing to improve the situation. When Secretary Kerry was in the Senate he did some arm chair diplomacy with Assad and told us how the younger Assad was really different from his horrible despotic dad. Kerry has been a ruthless self promoter since his days of heading the Vietnam Veterans Against the War. He has been an almost consistent pacifist on international engagements - so it is odd to seem him as a Jingoist Secretary of State. From my perspective his current rhetoric is a bit odd. Kerry commented in one place about the quality of the intelligence - "With high confidence, our intelligence community tells us that after the strike the regime issued orders to stop and then fretted openly — we know — about the possibility of U.N. inspectors discovering evidence. So then they began to systematically try to destroy it." From my perspective that sounds a lot like what the Bush Administration (pick one) used to intervene in earlier conflicts - although in both of those Kerry was a bit more skeptical.

The oddest thing about the President's behavior comes down to an eventual result which I suspect will happen.   One or both houses will reject the resolution authorizing use of force.  Then what is the President to do?  He may think he can justify not doing anything (which will not be convincing to anyone but the chattering classes in DC).   Or he may strike without the authorization, which will make him look foolish domestically.   In any event his delays in doing anything means that Assad has had plenty of chances to move his stuff to places where it will be harder to strike.   These guys look like they have never had a serious discussion about strategy on this very important issue.

In this instance, while I am not sure he has made the right decision, one leader that I have appreciated is the much maligned Speaker John Boehner.   He has decided that he will support the President on his resolution I think following the notion that "politics ends at the border."  I wish some others might consider that - although there may be a very good reason to reject the President's confused strategy.

#2 - The Marv Esch Standard - One of the members of congress that I worked for used to tell prospective candidates his three rules for politics, which applies equally to international relations.   #1 - Be for everything that is good.  #2 - Be against everything that is bad.   #3 (and he would add - most important) Be able to tell the difference between the two.   In this case there are a series of bad choices - there were even before Assad or who ever did the dirty deed.   From the best news coverage of the current situation there may not be any good choices.   The "moderates" in the rebels may not be anything of the sort.  The history of the region has been complex for many decades because the generation of elites after WWI thought they could as Adam Smith suggested in the Wealth of Nations - arrange people like pieces on a chess board.   But as Smith cautioned - those chess pieces do not always react in expected ways.   The lines which created many of these countries ignored historic ethnic and religious distinctions which in turn generated new types of hatreds.

#3 - John McCain is becoming Nero - He seems to love the cameras but yesterday they betrayed him - he was caught on one of the news services playing video poker on his phone during one of the hearings; his response, when outed,  was to complain that he was losing the game.  If the Senator still had any sense he would resign in disgrace immediately.

#4 - A Basic Principle - you do not treat your enemies better than you allies - The Administration's dithering has put Israel into a very complex position.  I think it has also brought into question other areas where we have problems like Korea - I wonder how our allies there will feel when North Korea takes license from the President's idiotic responses and begins to rattle their sabers at the south.  The implications for this situation go well beyond the Middle East.

#5 - Instant Replays in the Middle East -   Much of the discussion in Washington reminds me a lot of the discussion in our previous short term engagements in the Middle East.  The players are different, but the words are the same.   Rep. John Shimkus (R-Ill.) voted to authorize force in Iraq, but he is now leaning toward opposing action in Syria. In his statement explaining his views, he specifically cited the broken promises of Iraq.

"I trusted their assessment, our president, and the secretary of state as he made the case before the UN," he said. "I supported the president’s request and voted yes.  The search for weapons of mass destruction came up empty, and cost our nation lives and money. We are being asked again by the chief executive to authorize the use of force against Syria. ... I am not convinced that a limited strike against Syria at this time is warranted."  I think there are a lot of members on both sides who feel once burned twice learned.

We are presented with a series of bad choices and all the while many of our leaders on both sides are treating this as a time to make political points.