Three Thoughts on the AIG Bonuses

I don’t have a degree in economics or law, but there are three things about the nationwide AIG bonuses outrage that have to be recognized.

1. Whoever authored the bill allowing the bonuses to be paid is to blame the most – not the people accepting the bonuses. If there is a legally binding contract that says they get the money, then they should get. That’s how contracts work. If you’ve got a huge carrot (several million dollars of ‘bail out’ money), then you use that carrot to get what you want (removal of huge bonuses). But this has to happen before all terms are settled upon. In fact, removing the bonuses just becomes one of those terms. You don’t, after you realize you screwed up the negotiations, make a moral issue out of people following through on a contract all parties agreed to and then ‘legislate’ that moral issue because you look like a fool.
2. What you especially can’t do is void such a legally binding contract. If you do, what reason would companies have to begin investing in our economy? They’d be quite aware that even legally binding contracts aren’t actually binding if the government is involved. The last thing you want to do is provide disincentives for future investment.
3. Since just voiding the contracts (or that part of them) isn’t a good option there’s now a push to tax 90% of those bonuses. This option is just as bad as the previous one because the same disincentive for future investment remains. If the government is able to retroactively enact taxes on whatever the current ruling party wants, then why should anyone think their projected bottom dollar for their business will be the actual bottom dollar? If it’s determined that your company was too successful, then the government can just increase your taxes going backwards. If the proposal was to raise taxes on all 2010 bonuses, then this is much less problematic. Enacting retro-active taxes on people that are not politically popular is a very bad precedent to set. (And I know the AIG issue is related to personal bonuses, but there’s no in-principle way of keeping the two apart.)

In sum, voiding the contracts or levying huge taxes are both bad options and send a very bad signal to the business world. What the economy needs now are businesses willing to invest their capital, but both of these actions will make execs that much more hesitant to do so.

The federal government should have required that AIG not pay these huge bonuses as part of the terms of the bail out. But now is too late to demand the bonuses not be paid. Handling this before the bail out terms were settled would have been acceptable because both parties would have agreed that re-working the contract is in both of their interests (and this is precisely what happened concerning the auto-industry). Now that there is a valid contract one party can’t decide to renege to save face politically.

What Obama Said about Meeting Without Preconditions

In the last two debates McCain and Palin said Obama was naive for saying he would meet with the leaders of Iran, Syria, Venezuela, Cuba and North Korea without preconditions. Obama and Biden have responded by saying that those remarks were taken out of context and that Obama said he would seek high level, non presidential, diplomacy. Well thank God for the internet.

The USA Today has the relevant quotes from the Obama conference call in which these remarks were made (you can read it here). During this conference call Obama said, “If I sit down with the leader in Iran, I will send him a strong message that Israel is our friend, that we will assist in their security and that we don’t find nuclear weapons acceptable… That’s not going to be a propaganda coup for the president of Iran.”

Here Obama said he would meet with Iran and that doing so would not be a coup for the president of Iran. I don’t know how else to take “If I sit down with the leader of Iran.” I’m not sure how “I” can be misconstrued. In light of this the question he is asked,

“Would you be willing to separately, without precondition, during the first year of your administration, in Washington or anywhere else, meet with the leaders of Iran, Syria, Venezuela, Cuba, and North Korea, in order to bridge the gap that divides our countries?” To this question Obama responded, “I would.”

Feel free to read the linked article and see everything in context and then make your own honest decision as to whether or not Obama meant he himself would meet with these leaders or if he would have high level diplomats do it.

If he misspoke, that’s fine, but come out and admit it as misspeak. But please don’t insult my intelligence by saying he was referring to high level diplomats.

A Tale of Two Obama Endorsements

I recently read on an Economist blog that the Matthew 25 Network (www.matthew25.org) has decided to endorse Barack Obama. This group’s name is a nod to Matthew 25: 35-40. The portion of this passage on their website is “For I was hungry and you gave me something to eat, I was thirsty and you gave me something to drink… ‘I tell you the truth, whatever you did for one of the least of these my brethren, you did for me.”

I was immediately interested in learning more about this organization because I thought it odd that a seemingly Christian group would be so proud to announce that they have decided to endorse someone with such a pro-abortion record. Their website states that their values are “promoting life with dignity, caring for the least of these, strengthening and supporting families, stewardship of God’s creation, working for peace and justice at home and abroad and promoting the common good.”

I guess it’s just not clear to me how Obama fits that profile, at least with his record on abortion. How exactly does supporting the legality of abortion promote life with dignity for the unborn? Wouldn’t an unborn child be “the least of these”? After searching around a bit more, the Matthew 25 Network was just launched as a Federal Political Action Committee (PAC). Contrary to appearance, this is not some Christian non-profit working on the behalf of some Christian cause. This is a political organization launched with the sole purpose of endorsing Obama.

Now there are plenty of other groups that have endorsed Obama (e.g. Hamas, Moveon.org). One of the groups I would like to draw attention to is NARAL Pro-Choice America (www.prochoiceamerica.org/elections/statements/obama.html). This organization, unlike Matthew 25 Network, has existed for some time and has an agenda besides just endorsing Obama. This group was founded in 1968 as the National Association for the Repeal of Abortion Laws. After those laws were indeed repealed, they changed their name to National Abortion Rights Action League, then to National Abortion and Reproductive Rights Action League. And now they are NARAL Pro-Choice America.

What I find interesting is the reason why NARAL chose to endorse Obama. NARAL scores politicians on their pro-choice voting record and in 2005, 2006, and 2007 Obama scored a 100%. That means that in three years Obama has never voted against one of the leading abortion-rights group’s agenda. On their website they even have quotes from Obama that, to them, justify their decision to endorse him. (In one of his quotes he even brags that he’s scored a 100% with both NARAL and Planned Parenthood.)

So what is the point of comparing these two groups. The point is this. One group was formed as a PAC with the sole purpose of having a Christian-sounding group endorse Obama. They have no other agenda. The other group clearly has an agenda and has had it for a long time. This agenda is counter to Christianity at a variety of levels, but this group believes that Obama is the best person to further that agenda.

Does a group’s decision to endorse Obama mean he agrees with that group? Of course not, but it should make someone stop and think about why such a group would want Obama to be president. The fact that he’s never voted against their agenda should at least make Christians and non-Christian anti-abortionists stop and think about the ramifications of him becoming president. This is especially true since the appointment of another Supreme Court Justice is highly likely in the next term and several of the more recent high profile cases have been decided 5-4.

Summary Thoughts on Clinton & Obama

Hillary Clinton recently sent an email out to her campaign staff and supporters announcing that she will formally concede to Barack Obama. Today you will hear all the political talk shows discuss whether or not Obama will, or should, nominate Clinton as VP. I’d like to make two brief comments about Clinton’s email and Obama’s upcoming decision about his running mate.

First, one of the things that haunted Clinton this entire race was that many people did not feel like they knew what her own position was on various issues. Instead, it seems as if Clinton was willing to change her position according to whatever the current polls revealed about the people she was going to visit next. Now this is probably over exaggerated by the media, but I’m starting to think that the media is right. For example, in the email she sent out this morning Clinton writes,

“I know as I continue my lifelong work for a stronger America and a better world, I will turn to you for the support, the strength, and the commitment that you have shown me in the past 16 months. And I will always keep faith with the issues and causes that are important to you.”

Notice that she doesn’t say she will keep faith with the issues important to her, but the issues important to you. I think people want to vote for someone that truly believes in the things they believe in and not someone that will just support those things just because it will win an election.

On to Obama. Obama’s message this entire campaign is “Change You Can Believe In.” For this reason alone he cannot have Clinton as his VP. It’d be great for many reasons, but you cannot convince anyone you are about change when you have a Clinton as VP. The Clintons are as entrenched in traditional politics as anyone. If you are running on the platform of change then stay clear of the Clintons. Accept their support and say how great they have been and then move on to some governor that most people don’t know.

Obama’s “Change” platform still might be a difficult sell, even if he avoids Clinton as his running mate. I think John McCain is going to point out over and over the fact that Obama has almost never voted against his own party. How can Obama be about change if he just does what all the other Democrats do? Sure it will be a change from a Republican president to a Democratic one, but that would have happened with Clinton. Obama’s message is that politics is broken and he is the guy to fix it. He is going to have to do a great job explaining why he is about change but has always just done what his Democratic colleagues do.

It is interesting that Obama’s opponent seems to be more about change than he is. McCain has continuously “crossed the aisle” to work with Democrats and has been pummeled by right-wing talk show hosts for it. Many of these issues are what made me not want McCain as the nominee, but nevertheless, he seems much more willing to depart from traditional Republican stances than Obama is from traditional Democratic ones.

Do I think any of this will matter? No I don’t. In fact, I think Obama is going to win because he will successfully link McCain to Bush, the media loves him, he’s a great speaker, and people feel good about themselves when they vote for him. The thought of a young, black politician with almost no experience (compared to others) becoming President is about as close to achieving the “American dream” as one could get.

Romney and Obama on Religion

When Mitt Romney’s presidential bid first began to pick up steam, there was a lot of worry about his ties to the Mormon church. Would Romney’s religious beliefs influence his policies as president? Would the things he learned from the Mormon church influence how he thinks about the world? How could such a smart man attend a church that has certain beliefs that, to many, seem outrageous? Does the Mormon Church’s somewhat questionable past regarding African-Americans indicate that Romney might be hiding his true thoughts about blacks?

These questions, along with many others, were continually raised by political pundits over and over. These were questions that Romney was forced to answer at just about every turn. He took them so seriously that he gave an entire speech on the relationship between his faith and his politics (click here to link to a video of that speech).

If it was acceptable to bring up all these issues concerning Mitt Romney, why is it not acceptable to do the same concerning Barack Obama? Below is a video clip of Jeremiah Wright, Obama’s pastor for over 20 years, preaching a sermon that, at the least, demands that Obama answer the same questions, with the same forthrightness, as Romney.

As you watch this short 3 minute video keep in mind the following: this is the man that has been Obama’s pastor for over 20 years. This is the man that Obama prayed with before announcing his nomination just over a year ago. This is the man that baptized Obama’s two daughters. This is the man that Obama considers his spiritual advisor.

If Obama had attended this church 20 years ago and left after a short time, I think this would be a non-issue. But, Obama attended this church, pastored by this man, 20 years ago and has continued to attend it. And keep in mind, Obama is only 46 years old. Wright has had an influence on Obama for just about half of his life. I don’t think it is fair to expect any person to endorse everything his pastor says over 20 years. But can we reasonably believe that every Sunday afternoon, Obama would sit down with his family and disagree with what their pastor has said? For 20 years?

If I’m right, then every American should demand that Obama answer every question we have about this issue. Am I right about this? Is it fair to compare this to Romney? Will the Obama-loving media turn our questions about this into our being racist?  Can we still believe Obama’s rhetoric about moving beyond race? Does this at least give us reasons to question his judgment?

How would America in general, and the media in particular, respond if John McCain even had a friend that expressed these ideas directed toward black people? What if it was someone he voluntary associated himself with for over 20 years?

(In case you think this is an isolated incident, peruse some of the related videos on YouTube’s site. You’ll see that Wright thought 9/11 was a punishment for not America’s sins, but for “white-America’s sins” and that instead of singing ‘God bless America’, he thinks we should sing ‘God damn America’.)

Obama and Annoying Spouses

Anyone that has been with a “significant other” for some time will have experienced a moment when the drive to some destination is complicated because of a wrong turn or two. Growing up, we often joked that any time it was unclear if we should turn right or left, whatever my mother said we should, we should probably do the opposite. My mother had a knack for directing us the wrong way at crucial moments. Thankfully, we often would just laugh at ourselves for listening to her again when we knew we should do just the opposite.

Others, however, are not as fortunate. Instead of moving on and figuring out , given the wrong turn, what the best course of action is now, they focus on that mistake and never let it go. Instead of saying, “We made a wrong turn, what’s the best thing to do to right the course”, they say, “I told you then that we shouldn’t go this way, now we’re all screwed up; we might as well just go home.”

This latter, annoying, spouse seems strikingly similar to Barak Obama and the war in Iraq. We all know, because he can’t go five minutes without reminding us, that he voted against going to war with Iraq while McCain and Clinton voted for it. What Obama seems to not get is that, we are at war in Iraq right now! Focusing on what we should have done is not going to help us to decide what to do now. Even if we grant that going to war was a mistake, that doesn’t mean the best thing to do is just go home. If it is, give us an argument for it that doesn’t depend on the earlier decision to go.

What Obama needs to do is convince us that the best course of action now is to leave Iraq. That is a completely separate issue from whether we should’ve gone in the first place. If he wants to bring that up in addressing Clinton’s ability to make decisions, that is fine. But, again, that’s different from addressing what we should do in Iraq, given that we are there now.

Obama is fortunate to not have any tough questions from the main stream media because what he says about this just makes no sense. Obama says we should get out of Iraq and focus on Al-Qaida in Afghanistan. He justifies this by saying that going to Iraq diverted our attention from Afghanistan and we need to get back to that original mission. That’s all fine and dandy, except there is one big problem. Al-Qaida is in Iraq right now.

I wish someone would ask Obama just this one question, “Why do you think fighting Al-Qaida in Afghanistan is a good thing, but fighting Al-Qaida in Iraq is a bad thing?” I would love to hear if he could respond to such a question without pointing out that we shouldn’t have gone to Iraq in the first place. What would make things really difficult, if someone in the media would push him on it, is that he’s said that staying in Iraq would be an option if there were Al-Qaida attempting to establish a base there. So, what exactly does he think Al-Qaida is doing in Iraq right now, shopping? (Earlier in the week McCain mocked him on this, and should continue to do so.)

So, am I misreading Obama’s remarks on Iraq and Afghanistan? Am I wrong to think his argument for leaving shouldn’t rely on whether we should’ve gone?

Barack Obama, President Bush, and the War in Iraq

Barak Obama, President Bush, and the Iraq War

Believe it or not, it turns out that Barack Obama’s Iraq war strategy isn’t as different from President Bush’s as you might have thought. This is especially surprising since Obama’s Iraq plan seems to be one of the only things we know about what he would do as president (we’ve yet to figure out what exactly “change” amounts to, even though he wants to do a lot of it).

Listen to Obama speak for a few minutes and sooner or later you’ll hear him mention his plan to begin bringing troops home now. It’s no coincidence that the ubiquitous “We Support Our Troops, Bring Them Home” stickers are often placed right next to “Barack Obama ‘08″ stickers. As it turns out though, Obama actually thinks that Bush’s Iraq strategy isn’t such a bad idea. Of course he could never come out and say that because the liberal-left would kill him for it. Before I demonstrate that their plan for Iraq is essentially the same, I need to briefly summarize Bush’s strategy.

When you hear President Bush speak about Iraq he inevitably mentions refusing to fail. Why is not failing so important? There are two main reasons. First, if the U.S. fails in stabilizing Iraq, there will undoubtedly be an increase in the presence of al-Qaeda in that country. This isn’t too surprising since the people we’re fighting in Iraq right now are mostly members of al-Qaeda. They already have one place from which to base their operations and we can’t give them another one, especially one so close to Saudi Arabia. Second, the increased presence of al-Qaeda in Iraq will put the lives of those Iraqis that have fought alongside the United States in serious danger. It doesn’t take a rocket scientist to figure out that al-Qaeda is going to seek retribution against the Iraqis that have ‘offended their cause’. Abandoning the Iraqis to al-Qaeda is not acceptable.

Now you might disagree with Bush about this, but you should take note that Barack Obama doesn’t.

Because you probably think I’m crazy, I’ll now quote from the Obama campaign website. The author of Obama’s position paper on Iraq writes, “Under the Obama plan, American troops may remain in Iraq or the region. These American troops will protect American diplomatic and military personnel in Iraq, and continue striking at al Qaeda in Iraq… In the event of an outbreak of genocide, we would reserve the right to intervene, with the international community, if that intervention was needed to provide civilians with a safe-haven.”

Now to be fair, prior to that quote Obama says he’ll immediately begin bringing troops home and have everyone home in 16 months. The problem is that he goes on to say residual forces will remain. Well, one might ask, how many residual forces and for how long? What happens if those residual forces aren’t adequate to “protect American diplomatic and military personnel” or to intervene to “provide civilians with a safe-haven”? One might also wonder why he would be willing to leave troops at all, especially since he continually says he’s going to bring all of them home. Essentially, Obama gets that al-Qaeda is going to be a problem and that they’ll be such a problem that we won’t be able to ignore them. Why wouldn’t we be able to ignore them? Because they’ll have a new base to operate from and will retaliate against Iraqis that helped the United States. Sound familiar? He understands what Bush is saying, but he also knows that he’d never get elected by admitting Bush is right. However, Obama is a very smart man and that’s why he provided the “out” clause I quoted above. This clause allows him to preach now about how he’ll bring the troops home, but once elected, can keep things going until the Iraqis can adequately manage things themselves. He can get the political payoff now and keep letting the military do their thing then, all that without ever going back on his word. Smart man.

I should point out one big and important difference between Bush’s plan and Obama’s plan. Obama evidently thinks it is better to wait to act until an outbreak of genocide occurs, whereas Bush thinks it is better act now and ward off an outbreak that would otherwise be certain to occur. I’m not so sure about this strategy.

So, if you’re a big fan of the “Support Our Troops, Bring Them Home” idea, you might want to push Obama a bit harder on what he would be able to do as president, and stop being satisfied with what he would like to do.