Toluu

WorldwideStandard.com

The Weekly Standard observations on foreign policy and events

Last Bush Administration Scandal: Bush Eats Turkey on ThanksgivingToday

The ABC investigative team reports on President Bush's blatant hypocrisy in pardoning a turkey before eating a turkey. The White House spokesperson's comment is sufficient:

"You should try your hand at open mic night at the Laugh Factory," said Stanzel.

The Daily GrindToday

Barack and Hillary, together again.

The new New Deal gets whacked again.

The market's death by success.

Hugo Chavez has already lost one referendum for "president-for-life" reforms in Venezuela. Last week, he lost major ground to the opposition. Next step? Call for another "president-for-life" referendum!

Bollywood, it turns out, is as clueless as much of Hollywood when it comes to placing blame for terrorism on terrorists. Except for this actress.

Nine Mumbai gunmen died in the gruesome siege. One has been apprehended. There may be five more on the loose, and authorities fear another attack.

China WatchToday

Elizabeth Economy writes in today's Washington Post that China should wait before "extend[ing] itself globally." Good advice! Here's Economy:

Above all, China's leaders need to sort out where they are going politically. It is hard to lead globally when your domestic political system is in massive transition - or, worse, turmoil. Beijing faces more than 90,000 protests annually as a result of endemic corruption and ongoing crises in public health and the environment. Exports, the lifeblood of the Chinese economy, are falling; layoffs are already in the tens of thousands, and China's stock market has lost two-thirds of its value over the past year. Chinese media report daily on a stream of new regulations - to limit the ability of factories to fire workers, to manage state-run reporting or to restructure the public health bureaucracy. Yet all this tinkering at the margins has failed to reassure the Chinese people, or many outside the country, that the government has a clear plan for its political and economic future.

The bargain the Chinese government has had with its people for 30 years has been that the government would provide economic growth, and the people would accept the authoritarian political order. That bargain is breaking down. And news like this makes matte

The StimulusToday

Robert J. Samuelson on the many economic challenges facing Obama:

The temptation will be to press ahead with a 'bold' legislative agenda - to ape the New Deal. This would be a mistake. The psychology of bruising legislative battles will not bolster confidence. The country does need to face its health and energy problems as well as deficit-ridden federal budgets. But trying to do too much too soon risks doing none of it well. We - and he - are caught up in a web of contradictions. In the long run, we need to discipline our appetite for health care and energy; we need to reconcile our desire for government benefits and our willingness to be taxed. But Obama's first job is to avert an economic freefall.

Samuelson is right (as usual). But he provoked a raised eyebrow when he mentioned "bruising legislative battles." Two factors - Obama's honeymoon and the decrepit state of the congressional GOP - suggest that there won't be a "legislative battle" over Obama's stimulus plan next year. For the GOP to oppose Obama so early on in his presidency, at a moment of national economic crisis, would further degrade the public's impression of the party. Not that this would stop the GOP, of course.

What Do These Two Things Have in Common?Today

In his column today, Paul Krugman notes that trying to budget-balance in the middle of a "liquidity trap" is a bad idea. He gives two examples (emphasis mine):

The first took place in 1937, when Franklin Roosevelt mistakenly heeded the advice of his own era’s deficit worriers. He sharply reduced government spending, among other things cutting the Works Progress Administration in half, and also raised taxes. The result was a severe recession, and a steep fall in private investment.

The second episode took place 60 years later, in Japan. In 1996-97 the Japanese government tried to balance its budget, cutting spending and raising taxes. And again the recession that followed led to a steep fall in private investment.

So, in both cases, government cut spending and prolonged a recession. But that's not all! In both cases, government also raised taxes and prolonged a recession. Funny, Krugman doesn't focus much - doesn't focus at all, in fact - on this part of his evidence.

A "liquidity trap," according to Krugman, is a situation in which "the monetary authority had cut interest rates as far as it could, yet the economy was still operating far below capacity." A situation a lot like today, in other words. The chances that the Bush tax cuts remain in place after 2010 just got a little bit higher.