Tuesday, September 28, 2010

Press Briefing

Sep 28, 2010

The election of 1860—between war and the bitterness of failed compromise - Review of Douglas R. Egerton's "Year of Meteors"
http://online.wsj.com/article/SB10001424052748704654004575517162272813390.html

What Ahmadinejad Knows - Iran's president appeals to 9/11 Truthers
http://online.wsj.com/article/SB10001424052748704654004575517632476603268.html

Black Colleges Need a New Mission - Once an essential response to racism, they are now academically inferior
http://online.wsj.com/article/SB10001424052748704654004575517822124077834.html

A Game of Trade Chicken - Poultry protectionism shows where the U.S. and China are heading
http://online.wsj.com/article/SB10001424052748704654004575517300721920676.html

Remarks to 2010 Multinational BMD Conference and Exhibition
http://www.state.gov/t/vci/rls/147952.htm

What's the Matter With Wall Street? - There are too many traders, bankers and salesmen to support the new level of business. Thanks to Dodd-Frank, the shrinking of finance will continue.
http://online.wsj.com/article/SB10001424052748704082104575515853029748826.html

The U.S. Record on Financing for Development in 2009
http://www.state.gov/e/eeb/rls/fs/2010/148051.htm

Low Carbon Fuel Standards: A Threat to Our Most Secure Source of Foreign Oil
http://www.instituteforenergyresearch.org/2010/09/27/low-carbon-fuel-standards-a-threat-to-our-most-secure-source-of-foreign-oil/

Sebelius op-ed: Health Insurers Finally Get Some Oversight - In the past, these companies ran wild with no accountability
http://online.wsj.com/article/SB10001424052748704082104575515851336184716.html

ObamaCare's Hotel California - The state moves to impose price controls you can never leave
http://online.wsj.com/article/SB10001424052748703556604575502160531647630.html

Monday, September 27, 2010

Press Briefing

Sep 27, 2010


White House Council on Women and Girls’ Friday Highlights
http://www.whitehouse.gov/blog/2010/09/24/council-women-and-girls-friday-highlights

The Regulation Tax Keeps Growing - Blame Washington, not China, for the decline of American manufacturing
http://online.wsj.com/article/SB10001424052748703860104575508122499819564.html

White House: Emergency Planning for the Entire Community
http://www.whitehouse.gov/blog/2010/09/24/emergency-planning-entire-community

The Send Jobs Overseas Act - Ending the deferral of foreign income is another tax on U.S. employment
http://online.wsj.com/article/SB10001424052748703384204575509700366289206.html

Curb Corruption or Lose the War - Association with the CIA has given some Afghan officials a sense of impunity, which threatens Gen. Petraeus's hearts-and-minds effort
http://online.wsj.com/article/SB10001424052748703440604575496131772049018.html

How to Grow Out of the Deficit - Limiting spending increases to inflation minus 1% would balance the budget in less than a decade
http://online.wsj.com/article/SB10001424052748703989304575504221128887634.html

White House - Dodging the Impact of Their Policies "Across the Board"
http://www.whitehouse.gov/blog/2010/09/25/dodging-impact-their-policies-across-board

The Non-Economist's Economist - John Kenneth Galbraith avoided technical jargon and wrote witty prose—too bad he got so much wrong
http://online.wsj.com/article/SB10001424052748703556604575501883282762648.html

Saturday, September 25, 2010

Press Briefing

Sep 25, 2010

President Obama Addresses Ministerial Meeting on Sudan
http://blogs.state.gov/sudan/index.php/site/entry/obama_ministerial_meeting_on_sudan

Tax Cuts and Revenue: What We Learned in the 1980s - Supply-siders never argued that all tax cuts pay for themselves. But the evidence is clear that lower rates on high earners do produce more revenue over time.
http://online.wsj.com/article/SB10001424052748703989304575504192870395162.html

Where Should the UN Focus Its Peacekeeping Resources, and Why?
http://blogs.state.gov/index.php/site/entry/q_UN_peacekeeping_resources

Kids 0, Insurance 0 - The first fruits of ObamaCare
http://online.wsj.com/article/SB10001424052748703384204575510011133742130.html

NATO-Russia Council Meeting:  Building a Stronger Partnership
http://blogs.state.gov/index.php/site/entry/nato-russia_council_meeting

The Administration’s De Facto Moratorium on Shallow Water Energy Exploration
http://www.instituteforenergyresearch.org/2010/09/24/the-administration%E2%80%99s-de-facto-moratorium-on-shallow-water-energy-exploration/

President Obama: GOP Leadership Standing up for Outsourcing and Special Interests, Instead of American Workers
http://www.whitehouse.gov/the-press-office/2010/09/25/weekly-address-president-obama-gop-leadership-standing-outsourcing-and-s

Tony Blair in Defense of the West—and the Third Way - 'In today's world, a progressive party that stands essentially for big government is not going to succeed'
By Bret Stephens
The Wall Street Journal, sEP 25, 2010, page A17
http://online.wsj.com/article/SB10001424052748704523604575511453790276626.html

New York
Tony Blair believes in "Islamist extremism."

It's U.N. week, and the former British prime minister is in town as the representative of the Quartet—the U.S., Russia, the EU and the U.N.—that aims to broker Mideast peace. We are in his suite at a posh Upper East Side hotel, talking about a passage in his just-published memoir in which he discusses the reach of the radical Islamist "narrative." It's a narrative, he argues, that needs to be "challenged head on."

This prompts me to ask whether he thinks that the widespread reluctance to use the word "Islamist" alongside the word "extremist" is a kind of evasion from reality.

"I think it is, I'm afraid," Mr. Blair answers, deploying the famously elegant diction that used to make for such invidious contrasts in the days when he shared a podium with George W. Bush. By way of explanation, he turns to the recent, aborted attempt by Florida Pastor Terry Jones to burn the Quran.

"I have no difficulty in saying this person is a Christian pastor but I completely and totally disagree with him," he explains. "It's fascinating, though, that when that happens the whole of the Western leadership have to come out and denounce it. . . . Let's say some cleric in some remote part of Pakistan turns up and says, 'I'm going to burn the Bible tomorrow.' What would we all say?"

Mr. Blair has been out of office for more than three years, but he is still sounding the same themes that were the touchstones of his decade in office. He is still faithful to the Third Way school of politics, still believes that government should be for empowerment not entitlement, and is still fighting a rear-guard action against fellow "progressives" who think it ought to be the other way round. But above all, Mr. Blair remains seized by the scope of the challenge posed by radical Islam.

"I think there is a tendency to regard the activities of the extremists who use terrorism and suicide bombings and so on as this small group of people unrelated to the broader [Muslim] community in which they exist," he says. "And I feel that narrative penetrates a lot deeper. And if you can't take that narrative on, you are left in a position where you end up semi-apologizing for your own position in relation to these things. And I think that's dangerous."

The narrative, as Mr. Blair describes it, consists of the view that the West is in cahoots with its client regimes in the Middle East—not just Israel, but also countries like Pakistan, Egypt and the Gulf emirates—to oppress Muslims and denigrate Islam. That narrative has its own subscribers among Western leaders and opinion-makers who believe the right approach is to say, in Mr. Blair's mocking paraphrase, "We kind of understand why you feel like this about us and maybe it's our fault but, you know, let's try and work this out."

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Terry Shoffner
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Mr. Blair has little patience with this view: It rubs him wrong not only because he believes the analysis is flawed and the prescription misguided, but also—and here I'm reading between the lines—because it suggests Muslims should be held to a different set of standards and values.

Yes, he says, the Muslim world needs "genuine demonstrations of equality, respect, partnership and so on." That's one reason, he adds, why he puts so much stock in the Israeli-Arab peace process. But Mr. Blair also stresses that what the Muslim world—or at last the modernizing forces within it—need from the West is "for us to be really strong about our own confidence in our position, our own way of life and the values we represent."

Part of that confidence is affirming the rightness of what the U.S., Britain and the rest of the Coalition of the Willing did in Iraq—and what they continue to do in Afghanistan. Regarding the so-called occupation of Iraq, Mr. Blair notes that from the middle of 2003 coalition forces were in the country "with full U.N. authority." The international community followed up with billions in aid to the country. Democratic elections were held; Iraqis indicated the kind of future they wanted for their country.

And then the effort nearly fell apart on account of the unremitting savagery of Baathist holdouts, al Qaeda recruits, and Iranian-backed militias. Mr. Blair would like to know why Iraq's tormentors should be let off the hook while its liberators are vilified. "For us to end up in this situation where people say this is an indication that you should never have gone there, that you should have just let Saddam stay—we really need to think about what we're saying when we're saying that."

Mr. Blair feels the same way about the apportionment of blame in the Israeli-Palestinian conflict. He is confident of the good intentions of both Palestinian President Mahmoud Abbas and Israeli Prime Minister Benjamin Netanyahu (about whom, he adds, he is "absolutely sure [he] would sign a deal"). But he is also mindful of the way Israel is mindlessly castigated in the West, "particularly in Europe," for its every misstep, real or alleged.

"You cannot refuse to accept that Israel has a genuine security problem," he insists. "What does it mean when, the other day, President Obama launches the [Israeli-Palestinian] talks in the White House . . . and Hamas kill those [Israelis], including a pregnant woman and the parents of six children, and then put out a statement saying that this is an heroic act of courage? What does it say of the nature of what we're up against?"

Mr. Blair is equally emphatic about the need to confront Iran, which in his memoir he treats as morally equivalent to al Qaeda. Though he says he agrees with President Obama's approach to the regime—summed up as "here's a hand of friendship and now it's your choice"—he is under no illusions about the threat Iran poses. He is particularly enraged at the role it played in Iraq, including the supply of IEDs to insurgent forces that killed British and American troops. Might things in Iraq have gone better had the coalition confronted Iran's meddling sooner than it did? "I think that's a very, very good question," he replies.

The interview turns to the subject of Tehran's nuclear program. Could an Iran with nuclear weapons be contained, I ask, as it is now so fashionable to argue?

"I wouldn't take that risk," he replies without hesitation. "It is perfectly possible that a nuclear-armed Iran might be contained. But I think it's impossible to guarantee that, and it so drastically changes the balance of power within the region that it's not responsible" to allow it.

I say that sounds like he'd be prepared to countenance military strikes if other options fail.

Mr. Blair hedges for a moment: "When I'm asked this, [I always] default to the traditional line, which is to say I don't think you can take any option off the table."

I press: "But it sounds like you actually mean it."

He comes back more firmly: "I do mean it. . . . The alternative is to say that you are prepared to contemplate [a nuclear Iran], which, by the way, the moment you send that signal makes it a lot more likely to happen. So I think it's perfectly possible that we can avoid the situation. But I think the stronger and clearer we are, the more likely we are to avoid it."

Mr. Blair's tenure in office—begun, as he accurately puts it in his memoir, as a veritable love affair between him and the British electorate—is widely believed to have soured precisely because he holds these foreign policy views and was willing to act on them. Given that the Labour Party in Britain and the Democrats in the U.S. have now turned their back on the Third Way politics that gave Mr. Blair and Bill Clinton their resounding electoral victories, I wonder whether those politics would not have been more in vogue today had it not been for Iraq.

Mr. Blair demurs. "People forget this, but the closest I came to losing my job in a [parliamentary] vote was actually over tuition fees [for university students], and not over Iraq. The most difficult things were . . . introducing private-sector [reforms] into the health-care system, introducing academy schools, the equivalent of charter schools, and law and order."

It's a useful reminder. When Mr. Blair and Gordon Brown first came to office, the New Labour moniker was widely suspected of being a kind of political marketing device rather than representing a real change of heart by a party that had once been a de facto subsidiary of Britain's trade unions. But if Mr. Blair's memoir is anything to go by, he for one was a sincere convert to the New Labour faith. Among other things, it explains his current opposition to high rates of marginal taxation.

"The most important thing is to encourage strong growth, for the economy to create wealth. And I just think this is a very basic point . . . you need tax rates that are competitive with the world in which we live and in which people's hard work and enterprise is rewarded." As for the notion that the purpose of progressive governance is to tax the wealthy and redistribute it to the rest, Mr. Blair urges caution: "The people you end up hitting are not the very wealthy, because in my experience the very wealthy can make their own arrangements."

Mr. Blair is similarly worried about the perils of excessive regulation. While he believes that governments were right to respond to the financial crisis as they initially did, he worries that the recovery runs the risk of regulatory strangulation. "How you stabilize the economy is not the same as how you then get it let out of the crisis and back to strong growth, where you will need the private sector to be enterprising, innovative and able to compete." Nor does he have any patience with the demonization of the financial sector as "the bad guys" in the crisis.

The question arises of how Mr. Blair—a prep school boy and Oxford graduate who came to the Labour Party more from its intellectually Fabian wing than from the trade union movement—came by his views. Partly it's to do with his own father's rise from working-class roots, and partly by the pre-political years he spent as a commercial and industrial-relations lawyer, where he learned that "most people aspire to do better and most people actually want their kids to do better than them—and these are actually great engines of growth and progress."

But he also says his views are informed by traveling to emerging economies such as China. "These are all places where, if we're not careful, they are going to learn the lessons of our development and, funnily enough, they're not going to replicate all those lessons. . . . They will learn from our successes as well as our mistakes. And if we're not careful, they are going to leave us behind."

So much of what Mr. Blair says is so consonant with the political right-of-center that I ask him if he doesn't feel closer to John McCain politically than to Barack Obama. He laughs it off, calling himself a straight "Democrat-Labour" kind of guy. But elsewhere in the interview he offers a political warning to his fellow progressives:

"In today's world, in the 21st century, a progressive party that stands essentially for the state and big government is not going to succeed. Simple as that." I wonder if anyone in the White House is listening.


Pastors For ObamaCare? - If the White House office of faith-based initiatives is going to be used as propaganda unit, it might as well be shut down
http://online.wsj.com/article/SB10001424052748704523604575511920142932674.html

State Dept Officials: Remarks to the Press from UN General Assembly
http://www.state.gov/p/af/rls/spbr/2010/147922.htm

The Democratic Tax Retreat - The economic policies of the last four years are being repudiated
http://online.wsj.com/article/SB10001424052748704523604575511863393295260.html

Avoiding the Internet's Black Holes
http://spectrum.ieee.org/podcast/telecom/internet/avoiding-the-internets-black-holes

Well-functioning capital markets are critical for job creation. Congress should ease the burden on companies that go public—and fast
http://online.wsj.com/article/SB10001424052748703989304575504270290227634.html

Friday, September 24, 2010

Press Briefing

Sep 24, 2010

Organizing for America: "This is health reform"
http://my.barackobama.com/page/community/post/ericasagrans/gGMzNC

Andy Stern Sees the Light on Overseas Profits - The labor icon now supports reducing the double taxation of foreign-earned corporate income
http://online.wsj.com/article/SB10001424052748703989304575504042729688942.html

White House Blog - The Congressional Republicans' Pledge: What if the Rubber Hit the Road?
http://www.whitehouse.gov/blog/2010/09/23/congressional-republicans-pledge-what-if-rubber-hit-road

Iran's Defecting Diplomats - Signs that the Green movement is alive, even within the government
http://online.wsj.com/article/SB10001424052748703440604575495750611730106.html

The United States in UN Peacekeeping: Strengthening UN Peacekeeping and Conflict Prevention Efforts
http://www.state.gov/r/pa/prs/ps/2010/09/147828.htm

Fannie Mae Motors - GM lobbies the government that owns it
http://online.wsj.com/article/SB10001424052748703860104575508051998518526.html

2010 FSI Survey on the Implementation of the New Capital Adequacy Framework
http://www.bis.org/fsi/fsipapers09.htm

The GOP Agenda - Weaknesses aside, Republicans give voters a clear choice
http://online.wsj.com/article/SB10001424052748703384204575509812090777570.html

Remarks by President Obama and Premier Wen Jiabao of China before Bilateral Meeting
http://www.whitehouse.gov/the-press-office/2010/09/23/remarks-president-obama-and-premier-wen-jiabao-china-bilateral-meeting

Inside the Republican Money Machine - This year GOP backers have come close to matching spending by independent Democratic groups
http://online.wsj.com/article/SB10001424052748704129204575505563870827420.html

International Alliance Launched to Support Country-Led Progress in Reproductive, Maternal and Newborn Health
http://www.usaid.gov/press/releases/2010/pr100922.html

Campaign Finance Reform: A Libertarian Primer
http://www.cato.org/pub_display.php?pub_id=11176

USAID and the President's Global Development Policy
http://www.usaid.gov/unga/ppd.html

How the Woodward saga could make for a Greek tragedy in the White House
http://shadow.foreignpolicy.com/posts/2010/09/22/how_the_woodward_saga_could_make_for_a_greek_tragedy_in_the_white_house

Thursday, September 23, 2010

Press Briefing

Sep 23, 2010

Excerpts of President Obama's Remarks to the United Nations General Assembly
http://www.whitehouse.gov/the-press-office/2010/09/22/excerpts-president-obamas-remarks-united-nations-general-assembly

Update: U.S. Response to Pakistan's Flooding Disaster
http://www.state.gov/r/pa/prs/ps/2010/09/147594.htm

Don't Be Afraid of Frankenfish - Genetically engineered salmon will meet growing demand for protein-rich food without depleting wild fish stocks
http://online.wsj.com/article/SB10001424052748704129204575506270723050064.html

Sec Clinton Remarks at UN Secretary General Ban Ki-moon's Millennium Development Goals' Maternal and Child Health Event
http://www.state.gov/secretary/rm/2010/09/147592.htm

Shakedown in the Rain Forest - The attempt to loot Chevron for $27 billion is falling apart
http://online.wsj.com/article/SB10001424052748703625304575115831733424838.html

Sec Clinton Remarks at "Inclusive Finance: A Path to the MDGs" Luncheon
http://www.state.gov/secretary/rm/2010/09/147595.htm

Too Little Inflation? - Central bankers who say they want higher prices usually get them
http://online.wsj.com/article/SB10001424052748703860104575507971718234914.html

Breakfast With Ahmadinejad
http://online.wsj.com/article/SB10001424052748703860104575507961881959510.html

How Seniors Will Pay for ObamaCare - In many areas, Medicare Advantage enrollees will lose about one-third of their health insurance benefits. The cuts will finance new subsidies for younger people.
http://online.wsj.com/article/SB10001424052748704129204575505804034634066.html

Obama Administration September Housing Scorecard Shows Continued Advances in Housing Market
http://www.treas.gov/press/releases/tg869.htm

Industry Views: IER Testimony for the Hearing on the Global Clean Energy Race
http://www.instituteforenergyresearch.org/2010/09/22/ier-testimony-on-the-hearing-on-the-global-clean-energy-race/

Briefing on the P-5+1 Ministerial Meeting by a Senior Administration Official Via Teleconference
http://www.state.gov/p/nea/rls/rm/147563.htm

How to Level the Capital Playing Field - The best way to deal with China's exchange-rate policy may be to borrow a page from its monetary playbook
http://online.wsj.com/article/SB10001424052748703860104575507253727570456.html

Treasury Sec Tim Geithner Written Testimony House Financial Services Committee - Basel III
http://www.treas.gov/press/releases/tg867.htm

Red Tape Rises Again: Cost of Regulation Reaches $1.75 Trillion
http://blog.heritage.org/2010/09/22/red-tape-rises-again-cost-of-regulation-reaches-1-75-trillion

Wednesday, September 22, 2010

Press Briefing

Sep 22, 2010

Global Alliance for Clean Cookstoves: The United States Commitment By the Numbers
http://www.state.gov/r/pa/prs/ps/2010/09/147494.htm

A Teacher Quality Manifesto - What happens to bright teachers stuck in schools that don't have the right to hire by performance and build a culture of excellence? They quit.
http://online.wsj.com/article/SB10001424052748703440604575496281030445268.html

Transforming Distressed Neighborhoods into Neighborhoods of Opportunity
http://www.whitehouse.gov/blog/2010/09/21/transforming-distressed-neighborhoods-neighborhoods-opportunity

The Carter-Obama Comparisons Grow - Walter Mondale himself sees a parallel
http://online.wsj.com/article/SB10001424052748704129204575505822147816104.html

White House: Building a New Foundation
http://www.whitehouse.gov/blog/2010/09/21/building-a-new-foundation

Questions for Mahmoud Ahmadinejad - Do democracy, freedom and human rights have a place in Islamic theology? Is Iran holding two American hikers hostage?
http://online.wsj.com/article/SB10001424052748703989304575504061960018840.html

Why They Go Green - A green breakfast to thank Harry Reid
http://online.wsj.com/article/SB10001424052748704129204575505982913143218.html

Republicans in Congress Push to End Consumer Protections, Let Wall Street Run Loose
http://www.whitehouse.gov/blog/2010/09/21/republicans-congress-push-end-consumer-protections-let-wall-street-run-loose

The Real Gulf Disaster - The well is plugged. The moratorium drags on.
http://online.wsj.com/article/SB10001424052748703989304575504201916757646.html

State Dept.'s Multilateral Newsletter: Volume 2 - September 17, 2010
http://www.state.gov/p/io/147464.htm

Obama, Warren and The Imperial Presidency - The Senate should vote on all senior appointments within 60 days. But the president should give it a chance to vote
http://online.wsj.com/article/SB10001424052748703989304575503661726493580.html

Infrastructure Investment in the Long-Term & The Case for a National Infrastructure Bank. By Assistant Secretary Krueger. Testimony Before Senate Banking, Housing and Urban Affairs Committee
http://www.treas.gov/press/releases/tg863.htm

Massive Medicare Advantage Cuts
http://blog.heritage.org/2010/09/17/massive-medicare-advantage-cuts

Implementing the National Space Policy: Opportunities and Challenges
http://www.state.gov/t/vci/rls/147461.htm

More Proof We Can't Stop Poverty By Making It More Comfortable
http://www.cato.org/pub_display.php?pub_id=12149

Tuesday, September 21, 2010

Press Briefing

Sep 21, 2010

The Pentagon Is Serious About Saving Money - Last year we awarded $55 billion in 'competitive' contracts for which only one bid was received
http://online.wsj.com/article/SB10001424052748703904304575497754176193396.html

Cap Gains Taxation: Less Means More - A new study suggests a zero cap gains rate could create millions of jobs at a fraction of the cost of the spending stimulus
http://online.wsj.com/article/SB10001424052748703556604575501892210065882.html

Fighting Fraud and the Consequences of Defunding the Affordable Care Act
http://www.whitehouse.gov/blog/2010/09/20/fighting-fraud-and-consequences-defunding-affordable-care-act

A Tale of Two Recoveries - The state of the economy after a year of 'rebound'
http://online.wsj.com/article/SB10001424052748703989304575504053230524906.html

President Obama's Town Hall on the Economy, Business and the Middle Class
http://www.whitehouse.gov/blog/2010/09/20/president-obamas-town-hall-economy-business-and-middle-class

The Recession and the Housing Drag - The more the government tries to prevent prices from finding an equilibrium, the longer it will take for the economy to begin growing again
http://online.wsj.com/article/SB10001424052748703989304575503752698078816.html

Public-Private Partnership Brings Clean Drinking Water to Flood Victims
http://blogs.state.gov/ap/index.php/site/entry/partnership_clean_water_pakistan

Republicans should be grateful tea partiers did not run as third-party candidates and split the antistatist vote
http://online.wsj.com/article/SB10001424052748703989304575503921088554324.html

Under Secretary Levey Remarks at the Center for Strategic and International Studies
http://www.treas.gov/press/releases/tg862.htm

Don’t Wish Upon an Energy Star to Save the Environment
http://www.instituteforenergyresearch.org/2010/09/20/don%e2%80%99t-wish-upon-an-energy-star-to-save-the-environment/

U.S.-Colombia Action Plan on Racial and Ethnic Equality
http://www.state.gov/r/pa/scp/fs/2010/147375.htm

Conservatives: The Economic Toll of the Federal President's Tax Hikes
http://blog.heritage.org/2010/09/20/morning-bell-the-economic-toll-of-the-obama-tax-hikes

Monday, September 20, 2010

Press Briefing

Sep 20, 2010

Federal President Castigates GOP Leadership for Blocking Fixes for the Citizens United Decision
http://www.whitehouse.gov/the-press-office/2010/09/18/weekly-address-president-obama-castigates-gop-leadership-blocking-fixes-

Barbara Boxer (D., Armenia) - The Democrat trashes an Obama nominee
http://online.wsj.com/article/SB10001424052748703743504575493683813895358.html

In "My Nigeria," Peter Cunliffe-Jones traces Nigeria's history since independence and tries to measure the legacy of British rule
http://online.wsj.com/article/SB10001424052748703376504575492382253507788.html

Stimulus for Clunkers - A new study charts an economic failure
WSJ, Sep 20, 2010
http://online.wsj.com/article/SB10001424052748703904304575497903033602826.html

By now, the only defense Democrats can mount of the Obama stimulus programs is that the economy would have been worse without them. There's no way to disprove this counterfactual, but now we have some empirical evidence other than 9.6% unemployment and 1.6% growth.

To wit, economists Atif Mian of the University of California Berkeley and Amir Sufi of the University of Chicago have examined "cash for clunkers," the $2.85 billion program that subsidized consumers to buy new cars and destroy older ones. Their conclusion: The program "had no long run effect on auto purchases." It did juice sales during its two-month run last summer, by about 360,000 cars, but then it quickly hurt sales by about the same amount, in effect stealing purchases from the future. The program was a wash in a mere seven months.

White House economists might dismiss that finding because their larger goal with cash for clunkers was to stimulate "aggregate demand" in the overall economy. Earlier this year, Christina Romer, the former chairman of the Council of Economic Advisers, wrote that cash for clunkers was an example of "very nearly the best possible countercylical fiscal policy in an economy suffering from temporarily low aggregate demand." The program wasn't sold as a discount for cars people were already planning to buy, but rather to encourage knock-on economic activity such as more consumer spending and job creation.

It's impossible to test what would have happened without cash for clunkers because there's no control group. But Messrs. Mian and Sufi do the next best thing by looking at how clunkers were distributed around the country. Comparing high-clunker areas to low-clunker areas—and thus the areas that were more "stimulated"—allowed them to measure relative economic outcomes.

Lo, Messrs. Mian and Sufi found in their paper for the National Bureau of Economic Research that there was "no noticeable difference" in economic outcomes among the 957 metropolitan areas they studied. They did detect an economic blip in cities where the auto industry is concentrated but note that the rebound can't be disentangled from the Chrysler and GM bailouts.

Messrs. Mian and Sufi caution that their findings "do not warrant the claim that all forms of fiscal stimulus fail to boost long-run economic output" (their emphasis). But if this is the result from the "best possible" stimulus program—per Ms. Romer—the impact of the others must have been awful.


White House Blog - No Excuse for Holding Middle Class Tax Cuts Hostage
http://www.whitehouse.gov/blog/2010/09/20/no-excuse-holding-middle-class-tax-cuts-hostage

New START treaty's China challenge
http://www.nypost.com/p/news/opinion/opedcolumnists/new_start_treaty_china_challenge_5niHZQbbup6tknXsyjN2II

Hiring More Veterans to Keep Serving America
http://www.whitehouse.gov/blog/2010/09/18/hiring-more-veterans-keep-serving-america

The Christie Example - New Jersey government workers should have 401(k) plans instead of pensions
http://online.wsj.com/article/SB10001424052748703904304575497841167571272.html

U.S. Goals and Priorities at UN General Assembly
http://www.state.gov/p/io/rm/2010/147294.htm

'There Is No More Molly' - NYC Mosque it's the only time Barack Obama has ever stood up for anybody's First Amendment rights
http://online.wsj.com/article/SB10001424052748703904304575497912316992160.html

Update: U.S. Response to Pakistan's Flooding Disaster
http://www.state.gov/r/pa/prs/ps/2010/09/147326.htm

Let Them Eat Tax Hikes - Thirty-one House Democrats signed a letter urging Ms. Pelosi to bring a bill to extend all the tax rate reductions, not just the middle-class cuts
http://online.wsj.com/article/SB10001424052748703904304575497894157033342.html

Japan: Lost in Translation? - Why the world's third largest economy has dropped out of the global conversation
http://online.wsj.com/article/SB10001424052748703440604575495953989678326.html

The 1099 Stonewall - Harry Reid keeps his majority together - Small business requirements
http://online.wsj.com/article/SB10001424052748703904304575498071550034964.html

How the Surge Was Won - America's longest-serving general in Iraq says that when they realized the U.S. presence in their communities was permanent, allies came 'out of the woodwork'
http://online.wsj.com/article/SB10001424052748703440604575495710818032650.html

The Republican Answer to George Soros's Money - Steven Law admires how the left organized itself during its wilderness years. Now he's got $50 million to help elect candidates on the right
http://online.wsj.com/article/SB10001424052748703904304575497754131295506.html

U.S. Counterterrorism Strategy in Yemen
http://www.state.gov/s/ct/rls/rm/2010/147296.htm

On Elizabeth Warren - Obama to Senate: Stick that in your advice and consent clause
http://online.wsj.com/article/SB10001424052748703440604575495681843430198.html

On 15th Anniversary of the 4th UN Conference on Women, State Department Co-Sponsors Summit to Empower Women Across Asia
http://www.state.gov/r/pa/prs/ps/2010/09/147279.htm

Lady Gaga and Liberace: Separated at Birth? - His spangles, her spikes. Hmm. Makes you miss the old days.
http://online.wsj.com/article/SB10001424052748703466704575490214288135490.html

State Security, Post-Soviet Style - Closing down independent political life, branding critics as 'extremists.' Review of Andrei Soldatov and Irina Borogan's "The New Nobility"
http://online.wsj.com/article/SB10001424052748703466704575489774021664514.html

Sunday, September 19, 2010

Demirgüç: one of the culprits was the duo of Fannie Mae and Freddie Mac

In "Life After the Crisis: Where do we go from here?", World Bank Chief Economist Asli Demirgüç-Kunt says:
[...] while the recent global crisis had multiple causes, one of the culprits was the duo of Fannie Mae and Freddie Mac. U.S. policymakers encouraged these financial institutions to increase the availability of mortgages to borrowers with questionable ability to repay. Subsequent relaxing of standards, the increase in home prices due to a larger pool of “qualified” borrowers, and their eventual default in large numbers during the downturn all added to the severity of the crisis.
I asked her (first comment to her post above):
hi, can you provide references for that part of your post? Stiglitz [2] is very adamant that this is a red herring.

I know that AEI's Peter J. Wallison has persuasively shown arguments putting guilt on the GSEs, the CRA and lawmakers and the Executive [3], but I'd like to see analyses a bit less political and clearly academic about the subject, replying to Stiglitz's comments and his references:
Those that want to believe in the market have struggled to find someone else to whom blame can be shifted. One often heard candidates are government efforts to encourage lending to minorities and underserved communities through the Community Reinvestment Act (CRA) requirements and to increase home ownership through Fannie Mae and Freddie Mac. Default rates on CRA lending are actually lower than on other categories of lending, and CRA lending is just too small, in any case, to have accounted for the magnitude of the problem.14

His reference #14 is a note:
See Canner and Bhutta (2008) and Kroszner (2008).

Those references, in turn, are [4] and [5]. Both Stiglitz's comments and his references are preivous to July 2009, that is a bit old.


References

[1]  Asli Demirgüç-Kunt: "Life After the Crisis: Where do we go from here?", Sep 17, 2010, http://blogs.worldbank.org/allaboutfinance/life-after-the-crisis-where-do-we-go-from-here

[2]  Joseph Stiglitz: Interpreting the causes of the great recession of 2008. Lecture prepared for the Eighth BIS Annual Conference, Basel, 25–26 June 2009.

[3]  Peter Wallison: "The True Origins of This Financial Crisis", in "Getting the Story Right: The True Origin of the Financial Crisis", AEI Online, Feb 2009, http://www.aei.org/issue/100012

[4]  Canner, G. and N. Bhutta, “Staff Analysis of the Relationship between the CRA and the Subprime Crisis,” memorandum, Board of Governors of the Federal Reserve System, November 21, 2008.

[5]  Kroszner, R.S., “The Community Reinvestment Act and the Recent Mortgage Crisis,” speech at Confronting Concentrated Poverty Policy Forum, Board of Governors of the Federal Reserve System, Washington, D.C., December 3, 2008.

Thursday, September 16, 2010

Press Briefing

Sep 17, 2010

U.S. Can't Risk Slow START
http://www.state.gov/t/us/147267.htm

Wealth and Poverty - How's that inequality thing working out?
WSJ, Sep 17, 2010
http://online.wsj.com/article/SB10001424052748703440604575495933472536928.html

If there is a single unifying principle behind the Democratic agenda of the last two years, it is this: Reduce income inequality. So yesterday's annual Census Bureau review of American incomes is a kind of progress report on how this agenda is working out. In a word, our wealth isn't spread any more equitably, though more of us are poor.

The Current Population Survey shows that in 2009 the poverty rate climbed to 14.3% from 13.2% in 2008—the highest since 1994. That figure translates into 43.6 million Americans living below the poverty line, the largest absolute number in the half-century for which comparable data are available. At $49,777, the real median household income fell slightly, though not in a statistically significant way. It declined 1.8% among families and rose 1.6% for individuals.

In a statement yesterday, President Obama attributed these results to the financial panic and recession, and that's true in part. The Census data also overstate the true level of poverty because they don't include noncash government payments like housing subsidies, food stamps, the earned income tax credit or entitlements like Medicaid.

But then Mr. Obama couldn't resist adding that "Even before the recession hit, middle class incomes had been stagnant and the number of people living in poverty in America was unacceptably high, and today's numbers make it clear that our work is just beginning." So to address the rising poverty on his watch, the President wants to plow ahead with the same policies that aren't reducing poverty.

We draw a different lesson, which is the continuing imperative of rapid economic growth. Census Bureau figures over the last 50 years show that poverty falls most rapidly during times of the most sustained growth—the 1960s, 1980s and second half of the 1990s. The poverty rate also fell in the mid-2000s before heading up again when the recession hit. The most important goal of economic policy should be to increase society's overall wealth. This helps the poor and everybody else.

Yet starting with his first budget proposal, Mr. Obama has made clear that his main policy purpose is reducing inequality. As the White House budget scribes put it, "There's nothing wrong with making money, but there is something wrong when we allow the playing field to be tilted so far in the favor of so few. . . . It's a legacy of irresponsibility, and it is our duty to change it."

Thus the 2009 stimulus was assembled around social programs and redistribution, defying even Keynesian precepts about immediate job creation. Among its many other goals, ObamaCare is intended to produce "a leveling" of the "maldistribution of income in America," as Senate Finance Chairman and chief author Max Baucus put it. Even now, amid a mediocre recovery and 9.6% unemployment, the inequality imperative is driving Democrats to insist on a huge tax increase—no matter the impact on growth.

The irony is that, while there has been a modest widening of the income gap in recent decades, the Census (as measured by the "Gini index") shows that inequality has remained mostly unchanged since the early 1990s—regardless of which party is in power. The reasons are many and rooted in larger economic and social forces that can't be fixed with higher taxes and White House social engineering.

More important, this preoccupation with inequality is actively harmful because it leads to economic policies that inhibit growth. That's the real warning in the new Census data. Democrats are succeeding in their goal of punishing business and the wealthy, but to the extent that this has produced anemic growth it is also punishing the poor and middle class.

The moral claim of Obamanomics is that it ensures that everyone pays his "fair share," but its early returns show this agenda is producing more poverty. In their obsession with income shares and how many people have how much wealth, the Obama Democrats are imposing policies that ensure only that there will be less wealth for everyone to spread around.


China's Currency Policies and the U.S.-China Economic Relationship. Sec Timothy F. Geithner
http://www.treas.gov/press/releases/tg858.htm

Constitution Day and the Perilous Future: "The federal government, yes, can do most anything in this country."
http://blog.heritage.org/2010/09/17/morning-bell-constitution-day-and-the-perilous-future

Is Google a Monopolist? A Debate
http://online.wsj.com/article/SB10001424052748703466704575489582364177978.html

China's Real Monetary Problem - Focus on yuan sterilization, not the yuan-dollar rate
http://online.wsj.com/article/SB10001424052748703743504575493120916038074.html

The U.S. at the U.N. and Beyond: A World of Transnational Challenges
http://www.state.gov/p/io/rm/2010/147232.htm

On Wind Power: : Where’s the Empirical Proof?
http://www.instituteforenergyresearch.org/2010/09/16/overblown-wheres-the-empirical-proof-part-iv/

NASA Ready to Send Humanoid Robot to Space
http://spectrum.ieee.org/automaton/robotics/humanoids/nasa-ready-to-send-humanoid-robot-to-space

The Uninsured Numbers Are Bad, but Obamacare Can Make Them Worse
http://fixhealthcarepolicy.com/in-the-news/the-uninsured-numbers-are-bad-but-obamacare-can-make-them-worse

Press Briefing

Sep 16, 2010

President Obama on Small Business Jobs & Tax Cuts: "We Don't Have Time for Any More Games"
http://www.whitehouse.gov/blog/2010/09/15/president-obama-small-business-jobs-tax-cuts-we-dont-have-time-any-more-games

Rooting for Redistribution - Are Americans easily fooled about their real interests? Review of Jacob S. Hacker and Paul Pierson's "Winner-Take-All Politics"
http://online.wsj.com/article/SB10001424052748703897204575488730182039948.html

White House - New Plans Underway to Increase Contracts to Small Business
http://www.whitehouse.gov/blog/2010/09/15/new-plans-underway-increase-contracts-small-business

The Case for a 'Repeal Amendment' - Virginia will consider proposing a constitutional amendment that would allow two thirds of the states to repeal a federal law
http://online.wsj.com/article/SB10001424052748703466704575489572655964574.html

President Obama's Message to Veterans on Retroactive Pay Due to 'Stop Loss'
http://www.whitehouse.gov/blog/2010/09/15/president-obamas-message-veterans-retroactive-pay-due-stop-loss

Principles for Economic Revival - Our prosperity has faded because policies have moved away from those that have proven to work. Here are the priorities that should guide policy makers as they seek to restore more rapid growth.
http://online.wsj.com/article/SB10001424052748703466704575489830041633508.html

Republican Tax Plan Doubles Nation's Deficit in Just Ten Years
http://www.whitehouse.gov/blog/2010/09/15/republican-tax-plan-doubles-nations-deficit-just-ten-years

Conservatives: The New START Rubberstamp Threat to National Security
http://blog.heritage.org/2010/09/16/morning-bell-the-new-start-rubberstamp-threat-to-national-security

Conversations With America: Meeting the Millennium Development Goals
http://blogs.state.gov/index.php/site/entry/conversations_with_america_mdgs

Too Much Progress - D.C. voters give a reform mayor, Fenty, the boot
http://online.wsj.com/article/SB10001424052748703743504575493841164082512.html

Update: U.S. Response to Pakistan's Flooding Disaster
http://www.state.gov/r/pa/prs/ps/2010/09/147200.htm

It's the Spending, Stupid - A chronic voter 'concern' has now exploded into a broad public movement
http://online.wsj.com/article/SB10001424052748703743504575493953591176476.html

Wednesday, September 15, 2010

Press Briefing

Sep 15, 2010

Speech by Assistant Secretary for Financial Institutions Michael S. Barr, Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprise of House Committee on Financial Services
http://www.treas.gov/press/releases/tg854.htm

Tax Cuts vs. 'Stimulus': The Evidence Is In - A review of over 200 fiscal adjustments in 21 countries shows that spending discipline and tax cuts are the best ways to spur economic growth
http://online.wsj.com/article/SB10001424052748704271804575405311447498820.html

The President's Forum With Young African Leaders
http://www.state.gov/p/io/rm/2010/147154.htm

Conservatives: The Obamacare and Obama Tax Hike Double Whammy on Seniors
http://blog.heritage.org/2010/09/15/morning-bell-the-obamacare-and-obama-tax-hike-double-whammy-on-seniors

Ayman al-Zawahiri: Nine Years After the Start of the Crusader Campaign
http://worldanalysis.net/modules/news/article.php?storyid=1476

OVERBLOWN: Windpower on the Firing Line (Part I)
http://www.instituteforenergyresearch.org/2010/09/14/overblown-windpower-on-the-firing-line-part-i/

Working To Expand Opportunities in Tajikistan
http://blogs.state.gov/index.php/site/entry/blake_tajikistan

Federal President's Proposed Oil and Gas Tax Hikes to Cost U.S. Economy 154,000 Jobs in 2011
http://www.instituteforenergyresearch.org/2010/09/14/obama%E2%80%99s-proposed-oil-and-gas-tax-hikes-to-cost-u-s-economy-154000-jobs-in-2011/

A Discussion on the New START Treaty
http://www.state.gov/t/vci/rls/147120.htm

Conservatives: Holding Economic Recovery Hostage
http://blog.heritage.org/2010/09/13/morning-bell-holding-economic-recovery-hostage

Statement by President Obama on the Small Business Jobs Bill
http://www.whitehouse.gov/the-press-office/2010/09/14/statement-president-obama-small-business-jobs-bill

Obamacare: The Real Price Tag is a Moving Target
http://blog.heritage.org/2010/09/13/obamacare-the-real-price-tag-is-a-moving-target

Intensifying Diplomacy in the Lead up to the Referenda in Sudan
http://www.state.gov/r/pa/prs/ps/2010/09/147103.htm

Short Sales Bans: Shooting the Messenger?
http://www.cato.org/pub_display.php?pub_id=12131

Tuesday, September 14, 2010

Press Briefing

Sep 14, 2010

US-Vietnam Relations
http://www.eastwestcenter.org/fileadmin/stored/pdfs/apb067.pdf

Remote Control: A Blind Man Goes Sailing With Help From Afar
http://online.wsj.com/article/SB10001424052748704358904575477612698984010.html

Advancing U.S.-Ukraine Partnership
http://blogs.state.gov/index.php/site/entry/advancing_ukraine_partnership

Europe Reverts to Type - The EU's response to anti-Semitism? "No comment."
http://online.wsj.com/article/SB10001424052748703466704575489453411397686.html

Federal President Embraces the 'Pre-emption' Doctrine - Will federal law trump state law when it upsets the trial lawyers?
http://online.wsj.com/article/SB10001424052748703466704575489571017923434.html

Jennifer Rubin on the reports that Obama aide Valerie Jarrett is the leading candidate to replace White House Chief of Staff Rahm Emanuel
http://online.wsj.com/article/SB10001424052748703466704575489891398680882.html

Can Turkey Defuse Iran's Nuclear Challenge?
http://www.idga.org/article.cfm?externalid=3133

Basel's Capital Illusions - The 2008 meltdown was not the result of lax regulation but of abuse of the U.S. financial system by the political class in Washington
http://online.wsj.com/article/SB10001424052748703466704575489592929851132.html

Boehner's Tax Bungle
http://online.wsj.com/article/SB10001424052748703466704575489834263214218.html

Back Door Card Check - Big Labor's man at the NLRB tries to rewrite labor law by fiat
http://online.wsj.com/article/SB10001424052748703597204575483882585485368.html

Update: U.S. Response to Pakistan's Flooding Disaster
http://www.state.gov/r/pa/prs/ps/2010/09/147084.htm

Obamanomics Meets Incentives - Why cuts in marginal tax rates increase economic growth, but cash for clunkers merely created a boom and bust cycle in auto sales
http://online.wsj.com/article/SB10001424052748703597204575483562048654780.html

Message of Felicitation Amir-ul-Momineen Mullah Mohammad Omar Mujahid, on the Eve of Eid-ul-Fitr
http://worldanalysis.net/modules/news/article.php?storyid=1465

The 1099 Insurrection - The White House fights an effort to ease a burden on small business
http://online.wsj.com/article/SB10001424052748703897204575488272691514074.html

Realities of Biopharmaceutical Research & Development
http://www.innovation.org/index.cfm/NewsCenter/Newsletters/Newsletters?NID=185

Obamacare vs. the Rule of Law
http://blog.heritage.org/2010/09/14/morning-bell-obamacare-vs-the-rule-of-law