A Surge in Afghanistan?

| Mon Sep. 22, 2008 1:02 PM EDT

A SURGE IN AFGHANISTAN?....Iraq is hardly a finished success story yet, but there's no question that violence is down, security is up, and political reconciliation is at least a distant possibility. Credit for this goes to the Five S's:

  • Surge

  • Sectarian cleansing

  • Separation barriers throughout Baghdad

  • Sadr's ceasefire

  • Sunni awakening movements

So do we need a surge in Afghanistan? A better question is: can a surge succeed without the other four S's? After all, Afghanistan may be full of tribal animosities, but none of those tribes are going anywhere. Furthermore, Afghanistan doesn't have a single key city like Baghdad where separating those tribes with miles of concrete barriers is both feasible and productive; the Taliban hasn't and won't declare a ceasefire; and since the Taliban is fundamentally an ideological movement, not a sectarian one, there's not much hope for any kind of "Awakening" movement that will sap their strength. Bottom line: One S is the most we'll get.

Unfortunately, Fred Kaplan suggests that we can't even count on that. The effectiveness of the Iraqi surge depended on flooding a single city — Baghdad — with troops. But in Afghanistan there's no single city that we can focus all our attention on:

The ultimate military goal — one lesson from Petraeus' strategy in Iraq that is worth learning and might be applicable — is to protect the Afghan population, and that requires putting a lot of troops in the neighborhoods of towns and villages, to provide security and build trust. It might be possible to do this in Afghanistan, just as it was done in many Iraqi neighborhoods with one important difference — it has to be done by the Afghan National Army, not by us.

There are a few reasons for this. First, we simply can't do it. Stephen Biddle — a military analyst at the Council on Foreign Relations, who was an adviser on some aspects of Iraq strategy — estimates that securing the Afghan population would require about 500,000 troops. That's 10 times the combined number of U.S. and NATO troops in Afghanistan now. We don't have anywhere near this level of manpower to spare (the three extra U.S. brigades under consideration would amount to about 12,000 troops), and even if we did, and even if we wanted to send them, we'd have no way to maintain them.

So what should we do instead? Kaplan suggests building up the Afghan army, airdropping mountains of money on the region, and paying way more serious attention to Afghanistan's most troubling neighbor: "Pakistan is not a sideshow to Afghanistan. It is the main show, dwarfing every other problem in the region." Read the rest for more.

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Checks and Bailouts

| Mon Sep. 22, 2008 12:26 PM EDT

CHECKS AND BAILOUTS....As near as I can tell, conservatives are outraged by the idea of a blank check Wall Street bailout because — hey, Barack Obama might win in November, and God only knows what kind of insane nutball he might appoint as Treasury Secretary. Do we really want to trust $700 billion to whatever quasi-socialist we might end up with on January 20th?

Liberals, meanwhile, are outraged by the idea of a blank check bailout because — hey, even if you trust Henry Paulson, it's possible that John McCain might win in November, and God only knows what kind of insane nutball he might appoint as Treasury Secretary. Do we really want to trust $700 billion to whatever quasi-lunatic we might end up with on January 20th? Phil Gramm, anyone?

This almost restores my faith in the political system.

More on Hedge Funds

| Mon Sep. 22, 2008 12:11 PM EDT

MORE ON HEDGE FUNDS....Via Atrios, Nouriel Roubini provides a potted history of the Great Financial Crisis of 2007-08. I'll skip right to the good part:

The first stage....The next step....The third stage....The fourth stage....The next stage will be a run on thousands of highly leveraged hedge funds. After a brief lock-up period, investors in such funds can redeem their investments on a quarterly basis; thus a bank-like run on hedge funds is highly possible. Hundreds of smaller, younger funds that have taken excessive risks with high leverage and are poorly managed may collapse. A massive shake-out of the bloated hedge fund industry is likely in the next two years.

Hedge fund apologists have been pretty smug about how all our current problems have been caused by investment banks, which are (lightly) regulated, and none at all by the big bad hedge funds, which operate with no regulation at all. And so far they've been right. But does anyone believe this is going to last? And what will Bernanke and Paulson do if and when a systemic rout in the hedge fund market threatens to undo their bailout plan? Will they bail out the hedge funds too?

McCain's New Target: The New York Times

| Mon Sep. 22, 2008 12:00 PM EDT


On a conference call with reporters on Monday morning, Rick Davis, John McCain's campaign manager, and Steve Schmidt, a top McCain strategist, were asked about a New York Times article reporting that Davis had been paid nearly $2 million for running a Washington outfit set up by Fannie Mae and Freddie Mac to stop stricter regulation of these two entities. Davis said he had never engaged in any lobbying for that group and downplayed Fannie and Freddie's role in the organization. He joked that he appreciated "all the exposure I get" in The New York Times. He added that the newspaper must have "Davis envy."

Schmidt then went bad-cop. "We're First Amendment absolutists," he said, noting journalists are free to "write whatever they want to write." But, he continued, "whatever the New York Times once was," it is no longer a journalistic entity. Schmidt called it a "pro-Obama advocacy organization" and claimed the paper "attacks" McCain every day. Schmidt went on: the Times is "an organization completely, totally 150-percent in the tank for the Democratic candidate" and has "cast aside its journalistic integrity and tradition" to get McCain.

It was a blistering slam. And several times throughout the call, Schmidt chided the media for treating Obama more kindly than McCain. (In recent weeks, many news outlets have scored McCain's ads as being full of falsehoods.) Clearly, the candidate who once was beloved by the national media (and who joked the press was his base) has calculated that the old Republican play of bashing the media, especially The New York Times, will help him get elected. Also, Schmidt might also have been trying to establish a context for judging any future Times investigations that might pose a problem for McCain. ("See? I told you they were out to destroy Senator McCain.")

By the way, neither Davis nor Schmidt pointed out one error in the Times' story about Davis.

Photo by flickr user Joe Shlabotnik used under a Creative Commons license.

Study: Chauvinists Make More Than Other Men

| Mon Sep. 22, 2008 11:48 AM EDT

Are you a jerk? Awesome! Here's a bigger paycheck.

Lehman Brothers

| Mon Sep. 22, 2008 11:29 AM EDT

LEHMAN BROTHERS....I've now read in three different places credible suggestions that last week's financial meltdown was caused not by generic "worsening credit conditions," but by the Fed's ill-advised decision to let Lehman Brothers go into bankruptcy. This led to a wave of defaults that rippled through the industry and eventually froze the credit markets.

Question: has anyone seen anything detailed and plausible that either refutes this or backs it up? I'm just curious. For now, I remain agnostic on the question.

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Poorly Timed McCain Ad Hits Obama on Corruption

| Mon Sep. 22, 2008 11:12 AM EDT

It's a case of really bad timing.

John McCain's campaign put out yet another slashing anti-Obama ad on Monday morning that accused Barack Obama of being part of "the corrupt Chicago machine." The evidence? William Daley, an Obama policy adviser, is a lobbyist and brother to the mayor of Chicago. (He also was commerce secretary during the Clinton years.) The ad goes on to note that Obama's "money man" is Tony Rezko, a convicted felon--making the disgraced developer sound like Obama's main fundraiser, which he was not. The ad also declares that "his governor, Rod Blagojevich" has "a legacy of federal and state investigations." His governor? Well, that's true, since Obama is a resident of Illinois. But this is guilt by association. Under such a standard, Obama could run an ad saying, "John McCain--part of a corrupt political machine. His fellow Republican legislator in Arizona--indicted for money laundering." (That would be Rick Renzi, who was cochairman of McCain's 2008 presidential campaign in Arizona.)

In response to this ad, Obama spokesman Bill Burton issued a statement: "Barack Obama was elected to the Illinois Senate as an independent Democrat. He took on the Chicago Democratic organization in a primary to win a seat in the US Senate. And in both Illinois and Washington, he has challenged the Old Guard for landmark ethics reforms."

But, more to the point, the ad came out the morning The New York Times reported that McCain's campaign manager was paid nearly $2 million for running a Washington outfit set up by Fannie Mae and Freddie Mac to stop stricter regulation of these two entities. Talk about the corrupt Washington machine. McCain's right hand was one of its major players. Yet McCain accuses Obama of being part of a corrupt system. No doubt, Davis approved that message.

AP Poll: Obama Loses 6 Points Due to Race

| Mon Sep. 22, 2008 11:03 AM EDT

If you haven't read about the AP poll on race and the election, go take a look.

To be frank, it's pretty disheartening. And not just in terms of Obama's electoral chances. It says some pretty awful things about America. Did you know that more than a quarter of white Democrats feel that "if blacks would only try harder, they could be just as well off as whites"? And that nearly four in 10 white independents feel the same way? When given an opportunity to label blacks, 22 percent of whites agreed with the word "boastful," 29 percent reach for "complaining," and 13 percent go with "lazy."

Why Should We Limit Executive Pay on Wall Street? Here's Why

| Mon Sep. 22, 2008 9:57 AM EDT

From ABC News:

In 2007, Wall Street's five biggest firms — Bear Stearns, Goldman Sachs, Lehman Brothers, Merrill Lynch, and Morgan Stanley — paid a record $39 billion in bonuses to themselves.
That's $10 billion more than the $29 billion loan taxpayers are making to J.P. Morgan to save Bear Stearns.
Those 2007 bonuses were paid even though the shareholders in those firms last year collectively lost about $74 billion in stock declines — their worst year since 2002.

The bonuses paid by these five firms averaged $201,500 per employee. ABC points out that the figure is more than four times the median household income in America.

Regulatory Reform

| Mon Sep. 22, 2008 1:04 AM EDT

REGULATORY REFORM....Congress seems likely to pass some version of Henry Paulson's Wall Street bailout bill. Maybe not precisely his version, but something close, maybe with some oversight added and a few restrictions on exactly how the money can be used. We will, of course, be promised that although the bailout has to be passed this instant and there's no time to add regulatory reform into the enabling legislation, reform will be taken up just as soon as we've all caught our breath. I figure there are three ways this could turn out:

  • Option A: Republicans will filibuster, Democrats will wither, and basically nothing much will get passed at all. In other words, suckered again.

  • Options B: There will be some kind of panic and we'll end up with a gigantic snarl of regulation that sounds tough but doesn't really do anyone any good, sort of like Sarbanes-Oxley.

  • Option C: Everyone will take a deep breath, Democrats will stand up to the financial industry, and some reasonable set of new regulations will be hammered into place.

I'd put the odds at about 60% for Option A, 35% for Option B, and 5% for Option C. My only reservation is that maybe I'm being a little too optimistic about all this.