Michelle Obama: Proud of country for first time
February 19, 2008
What does Barack Obama’s wife Michelle mean by this? Clearly, there have been many things to be proud about in America. Just not to Michelle Obama.
New source of illegal immigrants: India
February 19, 2008
Illegal emigres defy the image
FASTEST GROWING SOURCE? IT’S INDIA
Article Launched: 02/18/2008 01:30:47 AM PST
The Bay Area has a piece of the nation’s fastest growing group of illegal immigrants. But don’t assume you know who they are.
Turning stereotypes on their head, a recent federal analysis of unauthorized immigration says the most rapidly growing source of illegal immigration is India - the same country whose engineers and programmers help power Google and other Silicon Valley companies, whose doctors heal the Bay Area’s sick, and whose entrepreneurs and venture capitalists have become a force on both sides of the international date line.
The U.S. Department of Homeland Security estimates that there are 270,000 unauthorized Indian natives in the United States - a 125 percent jump since 2000, the largest percentage increase of any nation with more than 100,000 illegal immigrants in the United States.
The number of undocumented Indians is dwarfed by the estimated 6.6 million illegal residents from Mexico, according to the estimates from homeland security’s Office of Immigration Statistics. Yet, considering the high level of education of many Indians, immigration experts say the federal report hints at a new phenomenon: a high-skilled undocumented workforce to go along with the nation’s sizable numbers of low-skilled illegal workers.
If trends continue, within three years India would trail only Mexico, El Salvador and Guatemala as a source of illegal immigration. Another national immigration expert, Jeffrey S. Passel of the Pew Hispanic Center, estimates that the number of illegal Indians is even higher, at 400,000 people.
Virtually all entered the United States legally but violated the terms of their visas, say experts who study the nation’s much maligned immigration system.
“How do you get in? You come across the border, or you arrive here with a visa,” said Lindsay Lowell, policy director for the Institute for the Study of International Migration at Georgetown University. “Indians aren’t going to be walking across the border like Mexicans.”
Indians are among the most affluent ethnic groups in the United States, with a median household income that is 62 percent higher than the figure for all U.S. households.
Santa Clara County has the largest Indian-born population, and Alameda County ranks fifth, among the nation’s 3,141 counties, according to 2006 census data. But there is no way to know what share of Bay Area Indian immigrants are illegal.
The Census Bureau does not ask people about their immigration status, and the Office of Immigration Statistics report did not provide state or local estimates. Of the 2.5 million people of Indian ancestry living in the United States, about 1 million are not U.S. citizens.
Federal officials calculated the number of illegal immigrants by using census estimates of the total number of immigrants from individual countries, compiling the total number of legal immigrants using federal immigration and naturalization records, and then subtracting the number of legal residents from the total immigrant population to determine the number of undocumented people.
It is certainly a minority of the local Indian community, however, and probably a very small one. Half the people of Indian ancestry living in Santa Clara County are already U.S. citizens, either by birth or naturalization, according to census data. Thousands of others are legal permanent residents, or they are here legally on student, tourist or work visas.
Asked about the number of illegal Indians in Silicon Valley, Banjit Singh, an Indian-born taxi driver waiting for a fare at Mineta San Jose International Airport, said, “Here, there is a little bit. But you go to another city or state, like L.A. or New York, there are many illegal people.” Drivers need to show proof of citizenship or legal immigration status to get a taxi certificate.
But that doesn’t mean the local number is insignificant. Local immigration lawyers say that particularly among Indians, the ups and downs of Silicon Valley’s economy since 2001 are one reason why Indians have fallen out of legal status.
“Most are bachelors; the way they get here is they have a job,” Gabriel Jack, a San Jose immigration lawyer, said of many of his Indian clients.
“They come here as professionals, most often in the H-1B program, and given the fluctuations of Silicon Valley, the business climate, these guys lose their jobs. They get laid off or they wager their hands on a start-up coming in,” Jack said. “The problem with the H-1B program is, you can’t have any significant time between jobs” without falling out of legal status.
Indians made up 44 percent of H-1B applicants in the 2005-06 fiscal year, five times the number from second-place China, according to federal data.
Because an immigrant’s status can be dependent on the status of a spouse, the break-up of a marriage can also create an illegal immigrant.
Among Indians in the United States, “there has been a rapid increase in the divorce rate. If they are on an H-1, maybe the wife is protected and maybe she isn’t,” said Navneet Chugh, an immigration lawyer whose firm is based in Silicon Valley and Los Angeles. “The guy is an engineer at HP or Cisco, and he goes home on vacation, and his parents say, ‘We have a girl for you.’ And they get married, and they come here and have all kinds of problems.”
Another source is relatives from India who arrive for a visit on a tourist visa and never go home.
“America is a very attractive country; everybody who comes here wants to stay,” said Shah Peerally, a Silicon Valley immigration lawyer. “I can tell you right now, there are nearly 1 billion people in India, of which maybe 800 million want to come here.”
The United States has deported slightly less than 500 Indians a year in recent years. In the wake of the Sept. 11, 2001, attacks, “we have substantially expanded our effort to find visa violators,” said Virginia Kice, a spokeswoman for U.S. Immigration and Customs Enforcement. The government, she said, pursues cases based on public safety, rather than focusing on a specific country of origin.
Silicon Valley companies such as Google say they need to recruit the world’s best talent to compete - and about one in 12 of Google’s U.S. employees, roughly 900 people, are H-1B visa holders. “We have not seen major problems with prospective candidates being out of status,” said Adam Kovacevich, a Google spokesman.
But immigration lawyers like Jack say there is such a backlog of people waiting for green cards - the wait is up to seven years for skilled workers from India as of this month - that an immigrant can still be waiting in line when even a six-year H-1B visa expires.
That can result in an illegal, highly educated, Indian immigrant, they said.
Unless Congress reforms the immigration system, “we are going to see this high-skilled, illegal workforce emerging,” said Frank D. Bean, director of the Immigration Research Center at the University of California-Irvine. “From a narrow economic point of view, it might work. From a social justice, fairness point of view, it’s a time bomb.”
Georiga Bill: Let police seize cars driven by illegals
February 19, 2008
Bill would let police seize vehicles driven by illegal immigrants
If bill was passed, police could take vehicle if it was involved in a traffic accident and driven by an illegal immigrant
The Atlanta Journal-Constitution
Published on: 02/18/08 A proposal to allow police to seize cars from illegal immigrants prompted an emotional public hearing before a legislative committee Monday.
The bill, sponsored by Rep. James Mills (R-Gainesville), would allow police to seize any vehicle involved in a traffic violation or accident if it’s driven by an illegal immigrant. That includes rented and leased vehicles if the owner should have known the driver was an illegal immigrant.
Malegni argued the bill should be passed for safety reasons.
“I’m putting the memory of my son in your hands,” Malegni told the House Special Rules Committee.
Other witnesses agreed, arguing that people can’t violate traffic laws repeatedly if they don’t have a car.
A spokeswoman for the American Civil Liberties Union opposed the bill, saying it would create an atmosphere of “seize first and ask questions later.” It could also create an atmosphere for racial profiling in traffic stops, the spokesman said.
The racial profiling argument drew a strong denial from committee chairman Calvin Hill (R-Woodstock), who asked witnesses to stay on point. “I don’t want misinterpretation . . . that this is about racial profiling,” Hill said.
Opponents say the measure is unconstitutional because it doesn’t provide due process for taking the car. Under the proposal, the vehicle seizure would work similar to property seizure in drug cases.
“This legislation is opening up a slippery slope to where the state is taking private property,” said Jerry Gonzalez, executive director of the Georgia Association of Latino Elected Officials. “Where do we stop? Next, should we take their homes, their businesses? If there’s an immigration raid in a poultry plant, should we seize that?” Gonzalez asked.
Opponents say it would be difficult for a police officer to correctly ascertain a driver’s legal status during a traffic stop.
The legislation is part of a package of proposals introduced this legislative session aimed at punishing illegal immigration in Georgia.
Walmart profits look good
February 19, 2008
Wal-Mart sees modest profit gain in ‘volatile economy’
NEW YORK (AFP) — Wal-Mart Stores, Inc. reported a modest four percent rise in quarterly profits on Tuesday as the world’s biggest retailer appeared to weather an abrupt slowdown in US economic growth.
Wal-Mart said net income for its fiscal fourth quarter increased four percent to 4.1 billion dollars for the three months ended January 31 compared with the same period a year earlier.
Wal-Mart’s earnings were generally in line with the expectations of most Wall Street analysts, and profit accelerated sharply from the prior quarter.
The retailer, known for its large box-like retail stores and discounted merchandise, recorded quarterly earnings per share of 1.02 dollars. Earnings rose over seven percent from 95 cents per share a year ago.
Despite uncertain economic headwinds, the retailer’s top executives said price discounting and an increased focus on customer service had enabled Wal-Mart to reap a quarterly profit.
“Customers were more cautious in their spending in January. In a volatile economy, I believe we are well positioned to succeed,” Wal-Mart’s president and chief executive Lee Scott said in a statement.
US economic growth slowed sharply during the fourth quarter, despite Federal Reserve interest rate cuts, to a 0.6 percent annualized clip amid a deep housing slump and a related credit squeeze.
The Fed has stepped up its rate-cutting campaign this year and the administration of US President George W. Bush has backed a giant 168-billion-dollar economic stimulus plan aimed at boosting growth.
Economists are divided over whether the economy will tip into a recession or continue expanding.
“The price leadership strategy we put in place at the beginning of the year was exactly the right strategy for our customers around the world in a tough economic environment,” Lee said.
Wal-Mart’s CEO also noted that quarterly sales topped 100 billion dollars for the first time, saying the company was the first retailer to burst this sales benchmark.
The retail behemoth’s net sales increased 8.3 percent during the quarter to 106.3 billion dollars.
Investors appeared to welcome Wal-Mart’s earnings report as the Dow Jones Industrial Average stock barometer opened stronger in morning trading, Wal-Mart is one of the 30 leading stocks that make up the Dow.
Wal-Mart’s shares were up 0.6 percent at 49.75 dollars in morning deals.
“Traders breathed a sigh of relief that Wal-Mart delivered fourth quarter earnings that were in-line with estimates and offered guidance that matched analysts’ current estimates,” said Fred Dickson, a market analyst at DA Davidson & Co.
Wal-Mart executives are predicting fiscal first quarter earnings of between 70 and 74 cents per share, and fiscal year 2009 earnings of between 3.30 and 3.43 dollars per share.
Aside from the United States, the Bentonville, Arkansas-based retailer also operates stores in Britain, Brazil, Canada and Japan among other countries.
Annual sales for the twelve months ended January 31 rose 12.8 percent to 12.7 billion dollars. Earnings per share for the year rose to a better-than-expected 3.13 dollars, compared with 2.71 dollars in the prior twelve month period.
Fed Official: 2008 a lot like 1991
February 19, 2008
Fed official: 2008 similar to 1991 recession
Minneapolis Fed chief Stern says current economic conditions suggest the United States may have a ways to go to get out of slump.
NEW YORK (CNNMoney.com) — The slumping U.S. economy is reminiscent of the aftermath of the 1991 recession, according to the head of the Minneapolis Federal Reserve.
In a speech given Friday morning in Minneapolis, Gary Stern, the regional Fed president, said the current excesses in residential construction, housing market decline, and credit crunch all resemble the “headwinds” environment that prevailed 17 years ago.
If that is the case, the economy may be in a slump for some time.
“While such an environment will not be permanent, it could well persist for an extended period,” said Stern.
“If credit is in fact restricted by some institutions and in some markets, it will likely take time for potential borrowers to find alternatives and substitutes.”
Some economists have suggested that further rate cuts are needed to boost the economy and end its current struggles. But Stern seemed to suggest that further rate cuts may not be prudent.
Stern said that the Fed’s recent key interest rate cuts to 3%, down from 5.25% in September represented good policy decisions at the time. However, aware that rate cuts also tend to weaken the value of the dollar, he offered that the Fed needs to be cautious with its future policy.
“Given the consensus that in the long run price stability represents the most significant contribution monetary policy can make to attaining high employment, it is essential that we conduct policy with this objective in mind, and I have no doubt that we will.”
Stern is an influential Fed official who sits on the rate-setting Federal Open Market Committee. 
Ted Kennedy: Moving in the wrong direction in Iraq
February 19, 2008
Boston Globe
Forging a negotiated path to Iraq’s future
THE BUSH administration is moving forward on negotiations to sign a permanent, long-term agreement with the government of Iraq on the role of the US military in future operations, and an agreement is expected to be concluded by mid-July.
The stakes are high, and these negotiations move us in the wrong direction. America has given the Iraqi people nearly five years of blood and treasure. It’s wrong for President Bush to try to bind the next president and lock the nation indefinitely into the endless quagmire that the Iraq war has become.
Iraq is not like the majority of other countries in the world. Its government is dysfunctional, and the country is at war with itself. America does not have a long-term military commitment with any other country, and adopting one with Iraq does not serve our national interest.
Secretary of Defense Robert Gates told the Senate Armed Services Committee this month that the agreement “will not contain a commitment to defend Iraq.” Hopefully, the administration’s negotiators will concur with his wisdom. But as long as America maintains tens of thousands of troops in Iraq, there is little distinction.
Bush and other administration officials are clearly attempting to downplay the significance of an agreement. They maintain that the final pact will be similar to those the United States has with many other countries, and that Congress does not need to approve it. Nothing could be further from the truth.
The president has given US negotiators authority to go well beyond the type of benign agreement that administration officials are discussing in public. The document signed by Bush and Iraq’s prime minister, Nouri al-Maliki, outlining the scope of the discussions plainly states that a security commitment can be negotiated, which would obligate the United States to defend Iraq if it is attacked.
Bush knew exactly what he was authorizing when he put his signature on that document. It would be a mistake for Congress and the American public to be lulled into complacency on this critical issue simply because the administration is attempting to assure us that it is nonbinding and, therefore, will have little significance. In fact, any agreement with Iraq is significant. Even Hoshiyar Zebari, Iraq’s foreign minister, recognizes the significance of the future agreement and is calling it a treaty.
The United States currently has seven such treaties: the NATO Treaty of 1949; the Australia, New Zealand, and United States Security Treaty of 1952; the Southeast Asian Treaty of 1955; the Inter-American Treaty of Reciprocal Assistance of 1948; and bilateral security treaties with Japan in 1960, the Philippines in 1952, and South Korea in 1954. Each of these commitments was made with the approval of two-thirds of the Senate, as the Constitution requires for treaties. Such assurances, once made, cannot be easily withdrawn. They must be granted with great care, and only under extraordinary circumstances.
Even if the agreement does not rise to the level of a treaty, it should still be approved by Congress. The fact that conventional “status of forces” agreements are typically not submitted to Congress for approval is not a precedent in this case. Iraq is too important for the United States. Even consultations and classified briefings with Congress are not enough.
Congress should have the opportunity to approve or reject any agreement on Iraq, regardless of what it is called, that affects our troops or national security. With the country so deeply divided on the war and the future course in Iraq, it’s wrong for the president to bypass Congress and public opinion.
In 1953, Congress ratified the status of forces agreement with NATO as a treaty, four years after ratifying the NATO treaty itself. President Eisenhower did not bypass the Congress then, and Bush should not seek to do so now.
In 1981, under President Reagan, Congress approved by legislation an agreement committing the United States to the establishment of the multinational observer group in the Sinai desert in the Middle East.
Also during the Reagan administration, Congress approved in 1986 the Compact of Free Association, granting independence to the Republic of the Marshall Islands and to the Federated States of Micronesia. The compact included agreements in the political and economic spheres and a commitment by the United States to the defense of those two newly independent nations.
It would be a mistake, however, to search for the perfect historical analogy to guide US thinking and actions now. Iraq is unique. Any agreement with Iraq that affects the nation well into the future must have the support of the American people and be approved by Congress. Even the Iraqi government has said it will submit the US-Iraq pact to its parliament for ratification.
America has other options. The international authority for our military presence in Iraq, first granted by the United Nations in 2004, was extended for the third time in December and does not expire until the end of 2008. It could be extended again to give the next president the authority necessary to conduct operations in Iraq, pending a decision on what our future relationship with Iraq will be.
Samir Sumaidaie, Iraq’s ambassador to the United States, has said that Iraq will seek an extension of the current UN mandate if no agreement is reached with the United States by the end of this year. He said, “If we cannot have an agreement by that time, we would have no choice but to go back to the Security Council.”
Bush argues that those who oppose these negotiations and seek congressional approval “need to think through exactly what they are saying.” He’s right about that, and those of us who opposed this war have certainly done so. But the president needs to think more clearly about the consequences of any long-term agreement he makes with Iraq that extends beyond his successor’s inauguration, on Jan. 20.
He gambled our national security with his reckless invasion of Iraq, and he should not be permitted to roll the dice again in these negotiations. The last thing America needs is for Bush to cement a secret deal on Iraq, without the support of Congress, that binds the next president, the military, and the nation for years to come.
Edward M. Kennedy is a US senator from Massachusetts. 
Christopher Buckley: The Manchurian Conservative
February 19, 2008
The New York Times
The Manchurian Conservative
It dates to the early Reagan administration (where I worked for George H. W. Bush) and for me sweetly captures the sturm und drang then rampant over Ronald Reagan’s alleged betrayal of conservative first principles. Funny: Mr. Reagan, to judge now from utterances by presidential candidates on both sides — ahem — of the political divide, appears to have survived that charge.
It may strike some conservatives today as odd, if not absurd, to see John McCain being subjected to an auto-da-fé conducted by such Torquemadas of the right as Rush Limbaugh, Ann Coulter, Sean Hannity. The other day, he even endured jeers at a conservative gathering in Washington, by otherwise well-behaved exemplars of conservatism. Indeed, turn on the TV at any hour of the day and you’ll find Mr. McCain being excoriated in harsher terms than he endured from his jailers at the Hanoi Hilton — variously denounced as a) not conservative, b) really, really not conservative, or even c) so not-conservative as to make you wonder if he isn’t just the latest re-issue of the Manchurian Candidate.
In response, let me offer a thoughtful, considered, carefully worded comment: Would you all please just…shut…up? (I’d insert an intensifier, but this is a family newspaper.)
Let’s all breathe into a brown paper bag and calm down and consider the question: Is John McCain a small-c or large-C conservative? (Odd that his surname should contain both.) Or is he not a conservative at all?
Yes, it is true that he voted against a few of President Bush’s tax cuts. But is that especially villainous, viewed in the context of Mr. Bush’s elephantine federal spending increases and the concomitant ruinous depreciation of the dollar? True, too, on immigration, Mr. McCain has allied himself with the Archfiend, Ted Kennedy. It’s also true — odd — that Mr. McCain is popular among Hispanic voters, who are themselves paradigms of cultural conservatism and without whose support any “conservative” candidate for president may be doomed to failure. (It would be interesting, by the way, to hear from Mr. Limbaugh, Ms. Coulter and Mr. Hannity as to whether they’ve ever availed themselves of the services of illegal immigrants. Answer carefully, now: that ambassadorship could be at stake!) Is the “conservative” position on immigration that the only solution is a wall and midnight roundups by Border Patrol agents at Wal-Mart?
It’s also true that John McCain has knocked back vodka shots while junketing — sorry, fact-finding — with Hillary Clinton. But then Ronald Reagan used to drink with Tip O’Neill, the Democratic speaker of the House, after the two had spent the day bellowing harsh names at each other like two cranky old Irishmen down at the pub. Indeed, after knocking back a few vodka shots of his own with Stalin, Winston Churchill reportedly said, “I like that man.”
This is a statement, to be sure, to raise the eyebrows and pang the heart of conservatives and liberals alike, but the relationship did produce fruit. Henry Kissinger got along just fine with Mao and Chou En-lai. Madeleine Albright presented the North Korean dictator, Kim Jong-il, with a basketball autographed by Michael Jordan. I have the audacity to hope that Mrs. Albright inwardly held her nose while bestowing this baksheesh upon — as Keith Olbermann would put it — the worst person in the worrrrrld, but images of the event show the secretary of state smiling rather broadly.
While we’re on the subject of strange bedfellows, Mr. McCain does seem to be awfully chummy with Joe Lieberman, no conservative. Those two are constantly hugging and pawing at each other, though so far their mutual attraction hasn’t yet extended to full osculation on the floor of the Congress, a height of ecstasy memorably attained by Mr. Lieberman and President Bush.
And — true, again — Mr. McCain is a bit of a girlie-man when it comes to waterboarding high-value detainees; but that’s a tricky one, even for macho, red-meat conservative chest-thumpers. You get a pass on that one if you’ve spent five-and-a-half years being bastinadoed by North Vietnamese.
Perhaps some of the excoriations being visited on Mr. McCain are the result of frustration over the failure of his other, more purely conservative rivals. National Review, the Vatican of (big C) Conservative doctrine, gave its official imprimatur to Mitt Romney. But that didn’t work out for various reasons. Mr. Romney was not entirely consistent in his positions; in one exchange onstage, Mr. McCain wittily called the Massachusetts governor “the real candidate of change.” (Ouch.) Mr. Romney eventually bowed out of the race, claiming as his reason a desire not to complicate the war effort — leaving the field to the candidate who, a year ago, had raised the solitary voice in favor of the hugely unpopular “surge.”
There was Fred Thompson, a big-C Conservative, enormously likable. The only problem was that he could barely manage to stay awake during his own announcement speech. There was Rudy Giuliani, small-c conservative, thrice-married, pro-choice, pro-gay rights, not on speaking terms with his own children, and untidy in his recommendation for the leadership of the Department of Homeland Security.
Some of the anti-McCain shrieks on the right have averred that it would be preferable to let a Clinton (Hillary, technically) or an Obama have the presidency, so that the post-George W. Bush (“compassionate conservative,” small or large C not mattering much at this point) mess will land on Democratic laps and not ours.
This is an odd and sour banner to unfurl. It’s hard to imagine Ronald Reagan, or for that matter other conservative icons (Churchill, Margaret Thatcher), pounding the podium and announcing: “O.K., here’s the plan — we’ll tank this one and then look like heroes four years from now. Let us march!”
Conservatism is — among other things — a question of character. Mr. McCain has never been boastful on this score. He admits his failures with almost suspicious candor. He can in fact be a real bore on the subject. His Keating Five disgrace so offended his own sense of personal honor that he enacted an auto-auto-da-fé crusade for campaign finance reform: very unconservative.
And yet the sum of Mr. McCain seems (to me, anyway) far greater than the parts. How many elections offer such an inspired biography as his? And who among “us” — with the exception of Senator Thad Cochran of Mississippi, who issued a statement saying that the thought of Mr. McCain in the Oval Office sent “chills up my spine” — would not sleep soundly knowing that the war hero was on the job calculating how to dispatch more Islamic fanatics to their rendezvous with 72 virgins, without an interlude of waterboarding, while in his spare time vetoing Senator Cochran’s latest earmark.
Mr. McCain’s speech at that big-O Overwrought conservative conference was a model of — I’m glancing at my New Yorker cartoon — mollification.
I’d love to have been inside his brain — or to have had a mind-reading crawl run across the bottom of the TV screen — as he was offering his emollient words. I’m guessing it was something along the lines of, “All right, you blinking, high-maintenance idjits, if this is what it takes, I’m willing to do it, but honestly I’d rather be doing vodka shots with Hillary Clinton.” But then defiance — defiance of the gleeful kind — is a quality I’ve always associated with conservatism.
WSJ: Bush deserves some credit
February 19, 2008
Press Corps Quagmire
By WILLIAM MCGURN
February 19, 2008; Page A19
When a man hangs up his byline to write for a president, he gets more than a new job. He gets to see how the press and pundit corps look from the other side of the notepad.
And over three years in the West Wing, you see a few things. You see who’s a straight shooter, and who’s full of snark. You see who’s smart, and whose outrageous behavior would have made its way to Drudge had it involved White House staffers instead of White House correspondents. Most of all, you see how conventional wisdom can keep otherwise talented reporters and commentators on the same stale storyline long after the facts on the ground have changed.
Let me put this in context with three contentious issues — one economic, one cultural, and one on foreign policy. In each case, President Bush took a clear stand. In each case, he was accused of stupidity or stubbornness and sometimes both. In each case, the facts on the ground increasingly bear the president out, sometimes dramatically. Yet the beat goes on — with no sense of the great irony that it may be our writers and pundits who are stubbornly clinging to old assumptions.
Start with taxes. In the first three years of his administration, the president signed into law a series of tax cuts. They helped families by lowering rates, doubling the child credit, and reducing the marriage penalty. They helped small businesses, by increasing the incentives for investment and lowering the rate at which most small businesses pay taxes. And they put the death tax on the road to extinction.
Critics attacked on all fronts. The tax cuts were unfair because they only helped the rich. They would blow out the deficit, and do nothing for the economy. And when the economy began to improve, the focus shifted to a “jobless recovery.”
We now know that “jobless recovery” in fact produced the longest period of consecutive job growth in our history. We now know that the tax cuts that were supposed to blow a hole in the federal budget deficit actually contributed to economic growth that has in turn yielded record tax revenues. As for unfairness, we also know that if the Democrats have their way and allow the Bush tax cuts to expire, a family of four with $60,000 in earnings in 2007 would see their taxes go up by about $1,800. So who’s being stubborn?
Or take stem cells. Shortly after taking office, the president had to make a tough decision about federal funding for embryonic stem cell research that holds out hope for life-saving treatments. The problem was that getting the stem cells requires destroying embryos. In July 2001, Mr. Bush announced a reasonable compromise. The solution was that the federal government would support embryonic stem cell research, but would not support the creation of life just to destroy it.
For more than six years, the critics have reacted by suggesting America was regressing into a new Dark Ages. “An act of self-serving political Houdinism” said one columnist. A later editorial after a presidential veto ran under the headline “The President’s Stem Cell Theology.” The science reporter for ABC News put it this way: “We talk to a lot of scientists who believe nothing will change until the next inauguration in 2009.”
Well, we didn’t have to wait until 2009 for something to change. Last November, scientists discovered a way to reprogram adult skin cells to act like embryonic stem cells. In other words, we now have the potential to cultivate adult cells with the same pluripotent qualities that make embryonic cells so valuable — and without having to destroy human life. That sure sounds like a welcome development. So let me ask: How many stories or editorials have you read giving the president his due?
Finally there is Iraq. By the end of 2006, sectarian violence was tearing Iraq apart, the terrorists were getting away with spectacular acts of murder, and our strategy plainly was not working. For a man said to resist unpleasant truths, the president acted boldly. He replaced his defense secretary, replaced his commanders on the ground, and completely overhauled his strategy. Granted, it would have been better had it come earlier. But it was a tough thing to do, he did it — and he did it knowing full well that the critics would jump all over him.
The president announced the surge in a nationally televised address in January 2007. A conservative columnist accused the president of offering nothing but “salesmanship and spin.” A cable TV host went on a rant declaring “the plan fails militarily, the plan fails symbolically, the plan fails politically.” Columnists and commentators either hedged their bets or predicted disaster ahead, with allusions to Vietnam sprinkled in for good measure.
Yet the surge went ahead. In Anbar Province, Marines were sent in to take advantage of a popular Sunni revolt against al Qaeda — and by April the capital city of Ramadi was being taken back from the terrorists. By September, U.S. and Iraqi forces were clearing out Baquba, a one-time al Qaeda town in Diyala Province. And though Gen. David Petraeus says that the gains can still be reversed, sectarian killings are down, civilian deaths are down, and the people of Baghdad are getting a taste of normal life. Surely the president deserves a little credit here.
Of course, if you are one of those experts who reassured us that a “well managed defeat” in Iraq was the way for America to go, you don’t like hearing the president use plain words like “win” and “victory.” Then again, you’re not the audience George W. Bush worries about. During one of my first meetings in the Oval Office, the president told me and my fellow speechwriters that we must always be mindful of how his words would sound to the enemy — and how they would sound to the young Marine risking his life against that enemy in some dusty town in Afghanistan or Iraq.
President Bush hasn’t always been right. But he’s been right on the things that matter most, and he’s been willing to take the heat. I, for one, admire him for it.
Mr. McGurn, an executive at News Corporation, served as chief speechwriter for President Bush from January 2005 until February 2008.
More write offs for Wall Street Banks
February 19, 2008
Wall St. Banks Confront a String of Write-Downs
In recent weeks one part of the debt market after another has buckled. High-risk loans used to finance corporate buyouts have plummeted in value. Securities backed by commercial real estate mortgages and student loans have fallen sharply. Even auction-rate securities, arcane investments usually considered as safe as cash, have stumbled.
The breadth and scale of the declines mean more pain for major banks, which have already written off more than $120 billion of losses stemming from bad mortgage-related investments.
The deepening losses might make banks even more reluctant to make the loans needed to prod the slowing American economy. They also could force some banks to raise more capital to bolster their weakened finances.
The losses keep piling up. Leading brokerage firms are likely to write down the value of $200 billion of loans they have made to corporate clients by $10 billion to $14 billion during the first quarter of this year, Meredith Whitney, an analyst at Oppenheimer, wrote in a research report last week.
Those institutions and global banks could suffer an additional $20 billion in losses this year on commercial mortgage-backed securities and other debt instruments tied to commercial mortgages, according to Goldman Sachs, which predicts commercial property prices will decline by as much as 26 percent.
Analysts at UBS go further, predicting the world’s largest banks could ultimately take $123 billion to $203 billion of additional write-downs on subprime-related securities, structured investment vehicles, leveraged loans and commercial mortgage lending. The higher estimate assumes that the troubled bond insurance companies fail, a possibility that, for now, is relatively remote.
Such dire predictions underscore how the turmoil in the credit markets is hurting Wall Street even as the Federal Reserve reduces interest rates. Already, once-proud institutions like Merrill Lynch, Citigroup and UBS have gone hat in hand to Middle Eastern and Asian investors to raise capital. “You don’t have a recovery until you have the financial system stabilized,” Ms. Whitney said. “As the banks are trying to recover they will not lend. They are all about self-preservation at this time.”
One of the latest areas to come under pressure is the leveraged loan market. In recent weeks the market for these corporate loans plummeted, driven by fear that banks have too many loans to manage. Prices have fallen as low as 88 cents on the dollar, levels not seen since 2002, when default rates were more than 8 percent. Loans to some companies, like Univision Communications and Claire’s Stores, are trading in the high 70s, analysts say.
“Price declines of this magnitude — over 10 points — were not supposed to happen in the leveraged loan market,” Bank of America credit analysts wrote in a report on Feb. 11.
When banks make loans, they hold them until they can sell the debt to institutional investors like hedge funds and mutual funds. But lately the market for this debt has seized up and many banks have been unable to unload the loans. As the value of this debt declines, lenders must recognize as a loss the difference in the value at which they made loans and the prices of similar debt in the secondary, or resale, market.
“This correction feels a lot deeper and wider and more prolonged than what we have seen historically,” said one senior Wall Street executive who was not authorized to speak to the media.
Many analysts say the financial health of many companies has not deteriorated as much as loan prices suggest.
“People don’t know what’s out there, they haven’t sorted out what’s good and what’s bad, so they are throwing all credit assets out,” said Meredith Coffey, director of analysis at the Reuters Loan Pricing Corporation. Median loan prices were lower than those in 2002 when defaults peaked, even though very few defaults have actually occurred.
There has also been a marked deterioration in the market for commercial mortgage-backed securities, which are commercial mortgages packaged into bonds.
To some, the troubles plaguing commercial mortgage securities seem a logical extension of the turmoil in the residential real estate market. But some strategists argue that the commercial real estate market is not as vulnerable as the housing market. The pressure to package loans that was so evident in the residential market never materialized in the commercial market, these analysts say.
Also, commercial loans tend to be made at fixed, rather than adjustable, rates, and are not usually refinanced for long periods of time.
Nevertheless, the cost of insuring a basket of commercial mortgage-backed securities has soared. Last October, for example, it cost $39,000 to insure a $10 million basket of top rated 2007 commercial mortgages (super senior AAA, in Wall Street language) against default.
Today that price has increased to $214,000. For triple-B-rated commercial mortgage backed securities, those which are riskier, the cost of protection during the same time has soared from $672,000 to $1.5 million.
The deterioration of the CMBX, the benchmark index that tracks the cost of such credit protection, “started off as a fundamental repricing and then it escalated into something much more than that,” said Neil Barve, a research analyst at Lehman Brothers. “We think there is some downside in a challenging macroeconomic environment, but not nearly what has been priced in.”
Goldman Sachs seems to disagree, with analysts predicting commercial real estate loan losses to total $180 billion, with banks and brokers bearing $80 billion of that in total and about $20 billion this year.
Current index figures suggest that the banks will face significant pain. Brad Hintz, an analyst at Sanford C. Bernstein & Company, calculated that Lehman Brothers has the highest exposure to commercial real estate-backed securities, with $39.5 billion, followed by Morgan Stanley, with $31.5 billion. (These numbers do not include hedges that the banks may have but do not disclose).
To be sure, a crisis on Wall Street also spells opportunities for patient bargain hunters. After all, markets that were trading at all-time highs have been reduced to rubble, suggesting that those willing to search for value will find it.
And last week, some hedge funds began to wade into the troubled loan market. But prices do not yet reflect any widespread rallies, and Wall Street still has to absorb losses reflected in these markets.
“The fourth quarter was terrible, but you had strong investment banking revenues,” Mr. Hintz said. “Now you’ve had a bad December, a worse January and an even worse February.”
Who’s More liberal, Clinton or Obama?
February 19, 2008
Clinton: More liberal?
Politico.com
The low point of the 2008 presidential campaign may have arrived in a recent Democratic primary debate. The MSNBC debate in Nevada was supposed to focus on racial minority issues, but the first eight questions from moderators Tim Russert and Brian Williams were about polling and squabbles between Sens. Hillary Rodham Clinton (N.Y.) and Barack Obama (Ill.) — process, not substance.
The lack of attention to substantive differences is especially unfortunate because the conventional wisdom comparisons of Clinton and Obama seem oddly off base. With Obama leading among independent and rural voters, and Clinton attacking him from the left on universal health care and abortion rights, one strand of conventional wisdom is that Clinton, after an early flirtation with center-right positioning (such as voting to authorize the Iraq war in 2002), more recently has positioned herself to the left of Obama.
But Clinton remains clearly to his right on several issues that have gone largely unnoticed but are quite important — especially to many Democratic primary voters.
Gay Marriage: Both Clinton and Obama oppose gay marriage and support civil unions, but Clinton’s opposition is stronger than Obama’s in one key way. If a same-sex couple gets married in a state allowing gay marriage, under the federal Defense of Marriage Act, the federal government cannot recognize that marriage, and other states can choose not to recognize it. Both Clinton and Obama favor changing DOMA to let the federal government recognize states’ same-sex marriages, but only Obama favors repealing DOMA entirely. Clinton favors keeping the part that protects states’ rights to refuse to recognize other states’ gay marriages.
Abortion: Both Clinton and Obama have expressed support for abortion rights, but they diverge on one significant issue. Both oppose the federal ban on so-called “partial-birth” abortion, a procedure many see as inhumane but that many doctors see as medically preferable for some second trimester abortions (as early as week 16). But Clinton opposed that federal ban only because it lacked any exceptions; she supports banning this type of late-term abortion “so long as the health and life of the mother is protected.” Even Clinton’s narrower ban violates the Roe v. Wade right to essentially unrestricted abortion in the second trimester, certainly early in the second trimester.
With abortion rights eroding at the Supreme Court since Roe, it matters a great deal whether the next president, who easily could appoint two or more new justices, supports narrower abortion rights than Roe recognized.
Military commissions: While Iraq and other military issues have gotten plenty of air time in Democratic debates, there may be a difference between Clinton and Obama on an issue of great concern to many Democrats: President Bush’s policies of restricting court review of military hearings, using torture-obtained evidence and violating Geneva Convention rules on prisoner treatment. No Democratic candidate has supported Bush on these issues, but only Obama, not Clinton, is a co-sponsor of Sen. Chris Dodd’s “Restoring the Constitution Act,” which would reverse these Bush policies. Clinton supports legislation restoring the court review (habeas corpus) that Bush has undercut, but she has not signed on to Dodd’s more aggressive bill.
Health care: The Democratic primary has seen much debate about requiring individuals to buy health insurance and about subsidizing insurance costs, but on one important insurance issue, Obama and Clinton do seem to differ. For decades, insurance companies have been exempt from antitrust laws, which means that unlike other businesses, they can collude to set prices, divide up territory in which they agree not to compete, etc. About one-fifth of Senate Democrats, including Obama but not Clinton, have co-sponsored legislation to repeal this antitrust exemption for malpractice insurance companies, which — if insurers are indeed colluding to keep doctors’ rates high — could lower health care costs.
Environment: As with other issues, there is not a huge difference between Clinton and Obama, but a distinction on one controversial issue explains Obama’s better League of Conservation Voters ratings: In 2006, Obama scored 100 percent to Clinton’s 71 percent; for their entire Senate careers, Obama is at 97.5 percent compared with Clinton’s 87.7 percent. Over several years, Clinton consistently has supported, and Obama has opposed, legislation to expand offshore oil drilling.
Democrats could be having a productive debate this primary season. Which is more promising for the general election: Obama’s success among independents or Clinton’s more centrist views on some of these hot-button issues? Whose departures from Democratic orthodoxy are more appealing: Obama’s rejection of a health insurance mandate or Clinton’s split-the-difference views on gay marriage and abortion? We could stand to hear a little more on issues and a little less on polling.
Scott Moss is an associate professor at the University of Colorado Law School.
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