Iran, Russia, and Garry Kasparov

Garry Kasparov has a theory about Vladimir Putin that I have repeated on numerous occasions. I will repeat it again. Putin does everything with an eye toward artificially making oil prices as high as possible. At the same time, he also makes sure that he creates a situation he can control.

That would explain Russia's insistence on protecting Iran from sanctions as they build up their nuclear capabilities. The threat of a nuclear Iran increases the price of oil. At the same time, if Iran were nuclear, that would also be a situation that Russia could no longer control. That might explain Russia's more aggressive tone.

Iran should improve its cooperation with the International Atomic Energy Agency, Russian President Dmitry Medvedev's spokeswoman says.

"On the subject of sanctions, Russia's position remains unchanged. Russia still believes that Iran should more actively and broadly cooperate with the IAEA and other countries," spokeswoman Natalia Timakova told reporters on Tuesday.

"If these obligations are not fulfilled, no one can exclude the application of sanctions," AFP quoted Timakova as saying.

Russia has made such threats before. They've never followed through when push came to shove. Still, no one understands Vladimir Putin better than Garry Kasparov. If Kasparov is right, a nuclear Iran is not in Russia's interest. As such, if you follow Kasparov's theory, they will stop Iran from getting a nuke before it is too late. Such a move would serve all their purposes and be very shrewd as it would also mean they'd have that much more geopolitical leverage as well.

The Real Danger of the Obama Presidency

Let's say what should be obvious to all observers of politics. The wheels have totally come off the Obama presidency and it's not yet clear that anyone in the administration has any clue on how to get things back on track.

I'm sure there are conservatives everywhere celebrating. Some are celebrating simply because they have no use for the president. Others are celebrating because it means the end of his far left agenda. There's no question that the President will never pass any of his wish list: government run health care, cap and trade, amnesty, etc.

In fact, the president may very well be totally impotent to do much of anything if he insists on moving forward as a far left president. That's what many conservatives are salivating over. In fact, if the president continues to insist on far left policies, that may wind up only helping the country domestically. Such insistence will only spur more fiscal conservatives into elective office in November. Spending will be further reigned in and the president will be controlled on any and all issues. It would also likely stop any far left judge from joining the Supreme Court.

The problem with a president as weak as some Conservatives want the current one is on the issue of foreign policy. The president has done plenty to weaken us already. Moving KSM et al to New York does us no favors. The handling of the Christmas Day bomber was so atrocious it's beyond words. A recent report gave the administration an F for WMD preparedness.

A weak president becomes a target for the likes of Vladimir Putin, the Chinese, Hezbollah, and Al Qaeda. If there's any attack on the homeland under Obama, he's through. That's scary because it's after an attack that we'd need a strong President. Yet, we're headed for one of the weakest presidents in modern times. With health care disintegrating the president's entire platform is fading away. His popularity is fading fast. His power is nearly entirely intangible, and our enemies know it. That's when they'll exploit Obama like vultures. That means danger to our homeland, our geopolitical standing, and our Super power status, and our enemies know it.

O'Reilly Vs. Palin III

Bill O'Reilly had his final of three parts to his interview with Sarah Palin tonight. I was actually generally disappointed with the interview. O'Reilly said the interview would focus on "policy". There were two questions on Iran, one on Afghanistan, one on domestic policy, none on health care, and no questions on social issues.

That's not really focusing on policy but rather scratching the surface on policy. Tonight's interview was on the "hateful attacks" and whether or not Palin wants to lead the tea parties. All of this is interesting but what I want to know is what Palin would do to fix health care, about the economy, Russia, Iran, China, etc.

These cultural questions are interesting but they say very little about whether or not Palin has serious answers to serious policy questions. O'Reilly barely even mentioned China and Russia in the entire interview. All of Palin's critics say she knows little about foreign policy. O'Reilly neither confirmed nor denied that stance because he barely asked her about policy position toward Russia.

O'Reilly says that Palin wants to leave the new populist movement. Maybe, that's true, but that's ultimately of little consequence. I don't care if she wants to lead a populist movement. I want to know if she has the acumen to deal with geopolitical heavyweights like Vladimir Putin. I expected O'Reilly to ask her enough probing questions to get an idea of that. I was disappointed.

The Dollar Under Pressure

This may have been the big business news of the day.

The move would see oil priced not in dollars but in a unit based on a basket of currencies including the Chinese yuan, the Japanese yen, and a new currency intended for use by the Gulf emirates, according to a report in Tuesday's Independent newspaper. The paper added that the transistion from the dollar to a new currency will take almost a decade.

Finance ministers and central bankers have held meetings in Russia, China, Japan and Brazil to discuss the idea, which the Americans are aware of, the Independent said.

This news was first reported by the British newspaper the Independent. The Independent says that secret meetings have been occurring by several Gulf states to move to stop using the dollar to buy and sell oil on the open market.

Currently, oil, like most commodities, is bought and sold using U.S. Dollars. Under the plan reported, the Dollar would be replaced by a basket of currencies including the Chinese Yuan. The Dollar, as expected, plunged on the news. Domestic equities went through the roof. Each was up at least one and a half percent. Equities were up because of the belief that a weak Dollar would help multi nationals.

This isn't the first time that such an idea has been floated. Russian President Vladimir Putin floated a similar idea in January.

"The one reserve currency has become a danger to the world economy: that is now obvious to everybody," he said in a speech at the World Economic Forum.

It is the first time that a Russian leader has set foot in the sanctum sanctorum of global capitalism at Davos.

The consequences of this are pretty clear, directly at least. If oil is no longer bought and sold in Dollars, then demand for the Dollar weakens. That means the Dollar weakens, all else being equal of course. A weaker Dollar has all sorts of consequences of its own.

The "Shocking" News on Iranian Nukes

This morning the president, along with the leaders of France and Britain, "stunned" the world with this news.

President Obama, along with the leaders of Britain and France, demanded Friday that Iran immediately allow international weapons monitors to inspect a nuclear facility the Islamic Republic acknowledges it has been secretly building for years.

Obama, joined by British Prime Minister Gordon Brown and French President Nicolas Sarkozy at the opening of the G-20 economic summit in Pittsburgh, warned Iran that it will be "held accountable" to an impatient world community if it does not fully disclose its nuclear ambitions.

So, it appears that Iran has had a secret nuclear plant and has been developing uranium there for years. I say the news was "shocking" because you'd have to have been really gullible to believe that Iran had disclosed its nuclear ambitions fully.

This is, according to President Obama, the third violation of UN resolutions related its nuclear ambitions. What's also not surprising was that all three leaders said that Iran "must be held accountable" and that this a moment of truth, yet again.

The language following this announcement was frankly no different from what we heard from President Bush over and over again regarding Iran. The former president proceeded to do little but talk tough toward Iran. He was able to orchestrate a few meaningless sanctions and did little beyond that.

Any sanctions that go through the UN would face a roadblock with both Russia and China. Earlier in the week some said that there was a breakthrough with Russia when its "leader" Dmitri Medvedev said that sanctions toward Iran were "inevitable". Some called this the first sign that the president's outreach was working. Now, that will have its first test. Most astute observers of Russia know that Vladimir Putin is the real leader of Russia, and it's unclear what Putin will do.

Garry Kasparov, the main opposition leader in Russia, believes that Putin makes every move with a desire to artificially raise oil prices. That's dropped precipitously since its highs about two years ago. A confrontation between Iran and the rest of the world would certainly push oil prices up in the short term, and so it's unclear that sanctions would benefit Putin.

I expect the world to talk tough for a few weeks. I expect some meaningless sanctions and then everyone will forget about it for the time being. Israel, however, has no such options. So, maybe, the threat of a regional war in the Middle East will force some to act. We'll all have to wait and see.

The Russia Card?

In the hoopla over health care reform, this geopolitical story went largely unnoticed.

Israeli President Shimon Peres said Wednesday that the Kremlin has promised to reconsider the planned delivery of powerful air defense missiles to Iran.

Russian President Dmitry Medvedev made the pledge during their talks Tuesday in the Black Sea resort of Sochi, Peres said.

"President Medvedev gave a promise he will reconsider the sales of S-300s because it affects the delicate balance which exists in the Middle East," Peres told reporters via video link from Sochi.

The most important unreported business and geopolitical story of the year was this one.

On Jan. 18, just hours after a cease-fire began in the Gaza Strip, Israel announced the discovery of a major natural gas field off its northern Mediterranean coast.

The news sent the Tel Aviv stock market sharply higher on Sunday as the size of the find appeared to eclipse the negative impact of the recession the country is now facing. Shares of the Israeli partners in the Tamar-1 drilling site jumped between 42% and 124%, though profit-taking pulled some down on Jan. 19. Even the Israeli shekel joined in, climbing by up to 1.6% against the dollar on Monday before settling the day up a half-point.

The discovery of this natural gas pipeline immediately made Israel a player in the natural gas market. It's an open secret that Russian President Vladimir Putin wants to create a pseudo OPEC cartel in natural gas.

Last week, Russian President Vladimir Putin sent chills through Western Europe when he discussed the possibility of forming a gas-producers' association with countries like Libya and Iran. "A gas OPEC is an interesting idea. We will think about it," he said. "We are not going to set up a cartel. But it would be correct to co-ordinate our activities with an eye to the solution of the main goal of unconditionally and securely supplying the main consumers of energy resources."

Uh-oh!

Here is a government that already uses its control of vital energy supplies as a weapon against its neighbors proposing to join forces with a charter member of the Axis of Evil—the better to intimidate rival nations all over the world.

Everyone is well aware that Iran is moving quickly towards developin nuclear weapons and has threatened to destroy Israel. What hasn't been reported as much is a series of high level meetings between Israeli officials and Russian officials. The latest of which I just cited.

It continues to be more and more clear that Israel has no confidence that the U.S. will do anything to stop Iran from getting nuclear weapons. The Israelis can attack Iran before that happens but they would clearly like to find a better way to resolve this.

That's where Russia enters this geopolitical chess match. Iran's nuclear weapons development depends in very large part on Russia's support. That's because most of the equipment and weaponry comes from Russia. With the discovery of the natural gas pipeline in Israel, Israel becomes a major player in the natural gas market. They would be a very natural part, pardon the pun, of a natural gas cartel headed by Russia. Russia has no interest in Iran attaining nuclear weapons per se. They would gladly cut Iran off if it meant securing Israel's place in their cartel. This latest meeting appears to have been a step toward Russia cutting Iran off and thus cutting off their nuclear weapons program.

Israel cannot have Iran get a nuclear weapon. They have no confidence that the Obama administration will help them in this cause. As such, that country is now reaching out to other geo political players to ally themselves. Russia has much more influence on Iran than the U.S. anyway. So, it appears the geo political balance of power is changing with little scrutiny. Israel is moving away from their alliance with the U.S. and moving toward an alliance with Russia.

Russia increases its influence in the world, and with Israel in their back pocket, they are one step closer toward creating a natural gas cartel. Meanwhile, in its quest to reach out to Iran, the U.S. is pushing away its long term ally Israel. Israel also has plenty of business dealings with China, another country with influence over Iran. Of course, if Israel were to ally itself with China and Russia, that would end any hope that the U.S. could influence Israel into a peace agreement with the Palestinians. It would also create a formidable alliance that would challenge the U.S. both militarily and economically. It appears that it is unfolding with little notice.

Putin, the Dollar and Energy

Since taking over as leader nearly a decade ago, Vladimir Putin has rolled back democracy and freedom in Russia in ways that would only rival Joseph Stalin. He's cracked down on opponents, the media, and rolled back the Democratic process. All of this is a naked attempt to consolidate all legitimate power into his own hands. Yet, Putin isn't merely popular in Russia, but overwhelmingly popular.

Putin has maintained his enormous popularity because Russia's GDP (ironically the acronym in Russian is the same as his name, VVP) has grown every year since he took over in significant ways. Much of this GDP growth is tied to the explosion of oil prices over largely the same period. Russia produces nearly 10 million barrels of oil daily. Along with natural gas, oil accounts for the overwhelming reason for Russias extraordinary growth over the last nine years. Russia currently supplies about 75% of Europe's energy needs.

Of course, with the world wide recession, Russia's extraordinary growth in wealth was threatened with it. With that, so was Putin's enormous popularity and by exension, power. To understand how Vladimir Putin thinks, the best person to ask, in my opinion, is former chess champion, Garry Kasparov, currently a political activist that opposes Putin. Kasparov has often said that Putin's every geo political move is done with the motivation of keeping oil prices as artificially high as possible. He wants, in Kasparov's view, to create enough chaos in the world to increase the price of oil, but not so much that a situation spins out of control. This would explain why Putin has gotten into bed with Iran for instance.

Putin set the average price of oil in the world at $41 per barrel earlier in the year. Such a price would absolutely devastate the Russian economy. So, if you believe, as I do, that Kasparov's thesis is right, then you also believe that Vladimir Putin will do all he can to manipulate the price of oil up. In fact, if you trace the Russian invasion of Georgia and the price of oil at the time, it is startling how well the theory held.

Starting with his appearance at the World Economic Forum in Davos, Switzerland in January of this year, Putin, along with other Russian officials, have from time to time suggested that the Dollar should no longer be the world's currency.

The one reserve currency has become a danger to the world economy: that is now obvious to everybody," he said in a speech at the World Economic Forum.

It is the first time that a Russian leader has set foot in the sanctum sanctorum of global capitalism at Davos.

Mr Putin said the leading powers should ensure an "irreversible" move towards a system of multiple reserve currencies, questioning the "reliability" of the US dollar as a safe store of value. "The pride of Wall Street investment banks don't exist any
more," he said.

For all his bluster, Mr Putin's bargaining power is weakening by the day. Russia's foreign reserves have fallen by 34pc since August to $396bn (£277bn) after months of capital flight and the collapse in the price of Urals crude oil to $45 a barrel. The rouble also fell to a record low yesterday after sliding for weeks in a controlled devaluation.

The idea is hokey, I don't believe that Putin either wants it to be implemented nor expects it to be. Putin has significantly more modest intentions in mind. Back in March, Secretary Geithner, speaking at the Council on Foreign Relations, suggested he was also open to the suggestion that the Dollar would no longer be used as the world's currency. Over the next couple hours, the value of the dollar dropped against the rest of the world's currencies.

Oil, like most commodities, is priced in dollars. If the dollar is weakened, the price of oil is artificially increased. Thus, it makes sense that Putin puppet, Dmitri Medvedev, said this earlier this morning.

Russia and India said in the past week the world economy is too dependent on the dollar and called for revisions to how $6.5 trillion in currency reserves are managed. “The dollar system or the system based on the dollar and euro have shown that they are flawed,” Russian President Dmitry Medvedev said in an interview with the Italian newspaper Corriere della Sera, repeating his proposal for a new reserve currency.

Oil has fallen more than ten percent, from $72 a barrel to $62 a barrel, in about two weeks. If you are to take Kasparov's theory, you would have to believe that Putin will need to do all he can to stop the free fall of oil and see it go back up. Suggesting that the Dollar should no longer be the world's currency is an effective way of weakening it. Weakening the dollar is an effective way of artificially raising oil prices, at least in the short term. It would also explain why Russian officials are again suggesting that the dollar should no longer be the world's currency.

When Will Angela Merkel Apologize for Hitler

Whenever there is a debate over whether or not Obama's apology tour all over the world, those that defend the president are quick to point out that it shows maturity and humility for a president to recognize and acknowledge not only triumphs of their country's past but errors and faults. Here is one example.

A mature nations acknowledges its shortcomings.Quite simple really. Butyou seems to have difficulty grasping it.

A "show" of strength differs from real strength. Again, elementary.

A strong nation can admit mistakes because it knows it is still the strongest. You don't make yourself weaker by acknowledging flaws, you set an
example. Human knowledge 101.

In particular, he is showing how he is different to one of the most hated Presidents in modern history.

The days of talking self-righteously about America while refusing to consider other viewpoints are over.

To those folks I ask a few simple questions. Why isn't German Chancellor Angela Merkel apologizing for Hitler? When will Nicholas Sarkozy apologize for Napolean? When will the world receive and apology from Gordon Brown for King George? How about Putin? When will he apologize for Stalin? If you want something more recent, how about this? Both Merkel and Sarkozy ran on against the policies of their predecessors, foreign policy and domestic. When will they apologize on a world stage for the years under Chirac and Shroeder?

If it is a sign of a "mature nation" to recognize both faults and accomplishments on the world stage, why do supporters of Obama only demand that our president show such "maturity"?

The answer to this question lies at the heart of the fallacy of their argument. I believe in their view if Obama demanded of his counter parts that which he deems necessary from himself, he would be portrayed as exactly the arrogant bully that he is trying to avoid. The only way for Obama to bring the world together is for him and him alone to show humility while giving everyone else a free pass on their own country's past misdeeds.

Think about that for a minute. The president is going on a tour of the world and pointing out each and every wrong that his country has ever done. Yet, the rest of the world gets a pass from doing the same, even though they all have just as much to apologize for, if not more. He's doing this because he believes only such humility will allow for an environment of mutual understanding so that we can work in a productive manner on the world stage.

In other words, Obama holds himself to standards he wouldn't hold others to because that's the only way he thinks the rest of the world can rally around him. In other words, the only way that President Obama thinks he can rally the world around his geopolitical goals is to inherently make the United States look weaker than the rest of the world. Keep in mind he has been flying around the world pointing each of our mistakes while nearly totally disregarding the mistakes the rest of the world has made.

That's a peculiar and rather ironic point of view. We are the world's only super power. Our leader thinks that the only way for the world to come together is for that super power to inherently be weakened first on the world stage. Maybe it will work, but I've never heard of a plan in which you weaken yourself first in order to get others to work with you.

Mr. President: Don't Make Deals with Sociopaths

First, this report originated from a very dubious source so it is still unclear if in fact President Obama offered this olive branch, but yet, my advice remains the same. My fascination with the word sociopath originated in the sixth season of 24. (spoiler ahead) In that season, the President tries to make a deal with Jack's father after finding out that his father was involved in the terrorist plot that was the center of the season. As such, more than one advisor warned the President against making a deal with a sociopath like Phillip Bauer. That's how I treat this report.

President Obama offered to consider scrapping plans for a missile defense shield in Europe if Russia helps rein in Iran's nuclear program, the Russian newspaper Kommersant reported.

The article said Obama wrote to Russian President Dmitry Medvedev to tell him Russia's aid in resolving the threat from Iran would make the missile shield plans unnecessary, according to an account from Russian news agency RIA Novosti.

A senior administration official told FOX News that Obama sent a letter to Medvedev but "we won't comment on the specifics."

The idea that we can trust the Russians to help us with curbing Iran's nuclear program while at the same time cutting off plans for a missile shield that would protect many of our most vulnerable allies in Eastern Europe is ridiculous.

The Russians can't be trusted. Any capitulation would be seen as a sign of weakness and they would never honor any agreement. The biggest foreign policy mistake that President Bush was ever believing that Vladimir Putin could be his ally. Now, it appears the Obama administration is perpetuating that mistake by entertaining even the idea that we can make deals with them. Reuters reported last month that the Obama administration was considering the action alleged in this letter.

Giving up the missile shield in order to get "help" curbing Iran's nuclear program is the the geopolitical version of making a deal with the devil. We must all quickly come to the realization that the Russians are not our allies. They want do our allies harm and eventually they want to do us harm. As such, the only deals that should ever be made with the Russians should only be made from a position of strength. Unilaterally withdrawing a missile shield in exchange for help curbing Iran's nuclear program is not a position of strength but weakness. Such deals lead only to disaster.

Vladimir Putin and VVP

In Russia, many of the citizens refer to Vladimir Putin as VVP. This acronym has dual meanings. Putin's full name is Vladimir Vladimirovich Putin or VVP. Also, in Russian, Gross Domestic Product is Valovoj Vnutrennij Produkt or VVP. In fact, VVP, Valovoj Vnutrennij Produkt is the source of much of Putin's power. It is also the source potentially of his downfall.

When he swept into office in 2000, he made a grand promise. He promised the people of Russia that their VVP would grow at a minimum of 7.5% annually year over year under his leadership. To put this in perspective, a growth of 3% is normally considered excellent. What Putin was promising was nothing short of impossible. Yet, Putin has largely delivered on this promise.

Now, there are plenty of intelligent people in Russia. Many of them fully understand that the remarkable growth in GDP has much more to do with the remarkable growth in oil prices than anything Putin himself did. Yet, the thriving economy in the 1990's had much more to do with the explosion of the internet than anything that Clinton did. Yet, Clinton's popularity grew regardless.

The same thing is in play here. Putin's approval ratings are somewhere in the neighborhood of 80%. In fact, most in Russia see him as a very strong and capable leader. Much of the heavy handed tactics like jailing opponents, cutting off opposition, invading Georgia are not only disregarded but frankly viewed very favorably.

Putin first began his power grab in earnest when he jailed the head of Yukos, Mikhail Khodorkovsky, for tax evasion. To understand what Putin did, one needs some context on Russian tax laws at the time. Technically, Khodorkovsky probably was evading taxes but tax laws were so vague and ambiguous that tax evasion became a way of life in Russian business. In other words, Putin essentially set someone like Khodorkovsky up and then brought him down. Khodorkovsky had an opportunity to avoid jail. Putin offered for him to leave the country. Khodorkovsky thought that he had far too much power and didn't need to leave. Khodorkovsky had close ties to many in Putin's inner circle and he always thought that those ties would keep him out of jail. He is now making mittens in a Russian jail and learned the hard way just how much Putin is himself obsessed with power.

None of this phased much of the Russian society. They saw Putin as a tough leader cracking down on criminality. They viewed him this way in large part because his promise of growing VVP was successful. So far, it continues to be successful. With the world economy in freefall, and oil prices going with it, it is highly unlikely that for the near future he will continue to grow the Russian economy at the same rate. In fact, it is far more likely that for the near future VVP will decline.

The Russian people have not only overlooked a lot of tyranny on the part of Putin but rather they have embraced it. That's because they associated much of his tyranny with a growing economy. The masses in Russia are no more political astute than they are in any other country including the U.S. They viewed Putin's heavy handed tactics, a growing economy, and made the determination that he was a strong leader doing what he needed to do to grow the economy. How will they view his tyranny when the economy is weakening? Only time will tell, but just as VVP lifted Putin up, so to, may it bring him down.

Barack Obama: the Enigmatic Presidency

During the campaign, I predicted that the Obama Presidency would go one of two ways. Either he would follow through on all his campaign promises, which I saw as an unmitigated disaster, or many of his campaign promises were just hot air and we all had no idea how he would govern.

What this will cause is a shrinking business and personal capital investment at exactly the time when it is needed. That will lead to lesser jobs, and that will eventually lead a depression. In other words, we are likely to face, if Senator Obama follows through on his promises, to not only face stagflation but depression and inflation at the same time. In other words, we are about to face an economic apocalypse if he is elected and follows through on his promises. Either that, or he is simply lying about everything he will do for everyone and we are electing an untested first term Senator and none of us know what he will do.

More and more, it appears that the latter was right not the former. In other words, no one, including the President Elect himself, really knows what sorts of policies the President Elect will implement.

On Iraq, Barack Obama ran on a platform of setting a firm timeline for a sixteen month withdrawal. He said over and over that as soon as he got into office he would bring together the Joint Chiefs and give them a new directive that would follow a course of sixteen month withdrawal. Now, he has elected to keep in as Secretary of Defense Robert Gates who publicly criticized this policy.

On Iran, Barack Obama said over and over that it was his goal for unconditional negotiations within the first year. Now, he has apparently chosen Hillary Clinton as his Secretary of State. Clinton criticized this very policy as naive and irresponsible.

To head up the GWOT, he has chosen Janet Napolitano for Homeland Director and Eric Holder for Attorney General. Here is how Dick Morris characterized their role in the GWOT.

Instead he chose a governor with no knowledge of the subject whose obvious credential is her proximity to the border. The Department of Homeland Security is a polyglot agency which includes immigration enforcement (the old INS) among its many missions. It is also charged with fighting drugs (the old DEA), and battling terrorism. By appointing someone who knows nothing about terrorism but everything about immigration, Obama has signaled the lack of priority he will give to domestic efforts to keep us safe.

Imagine if President George W. Bush had named the governor of Arizona as his Homeland Security director when the post was created in the aftermath of 9/11! The nation would have howled in protest. But now that nobody is focused on terrorism (except the terrorists who still want to strike at us), Obama has felt free to bury the task of battling terrorism in the bureaucracy dedicated to policing the Mexican border.

Just as troubling is Obama’s appointment of Eric Holder as his Attorney General. While criticism of the nomination has focused, justifiably, on his sell-out of the public interest by recommending the pardon of fugitive Marc Rich, it is his approval of commutations for the FALN - the Puerto Rican terrorists - that should raise red flags. Before 9/11, when we were not hyper-sensitive to terrorism, Holder did Hillary Clinton’s bidding in approving the pardon of those who bombed Fraunces Tavern in New York City, killing four people and injuring fifty others. Facing a run for Senate in New York State, with its sizable Puerto Rican population, Hillary was anxious to deliver a signal of her empathy with the desires of New York’s Hispanics. Bill, eager to please, sought Justice Department approval for the commutations. Even though the prisoners themselves had not asked for commutation (two refused to accept it),
Holder approved the action and cleared the way for a pre-election gift to New York’s Puerto Rican community.

If these two appointments presage Obama’s approach to the war on terror, we are going to be in deep trouble, indeed. There is not a hawk in the bunch.

On the economy, he campaigned on the populist theme of providing for the poor and middle class while taking more from the wealthy and corporations in order to provide funding for his plethora of entitlement funding. Furthermore, he campaign on a protectionist theme of being weary of new free trade pacts and potentially renegotiating existing free trade pacts. Here is how Forbes describes Obama's economic team..

If you paid attention to the political rhetoric that President-elect Barack Obama engaged in during the Democratic primary, then you probably expected his economic team to be made up of left-wing ideologues. When Obama took a rare holiday from blaming all of America's problems on NAFTA and deregulation, he bashed Hillary
Clinton for her cozy relationship with that corporate symbol of evil incarnate: Wal-Mart.

But that rhetoric was, we now know, just that. How "sensible" is Obama's economic team? So sensible, that one can construct a pretty stirring defense of supply-side economics relying solely on their work.

For example, the incoming head of the National Economic Council, Larry Summers, is an academic giant who early in his career published numerous path-breaking articles that highlight the importance of tax policy in influencing economic behavior. He,
along with Fumio Hayashi, was the first to integrate corporate tax policy into what economists' call the "Q" model of investment. These early efforts subsequently led to an explosion of research documenting that corporate tax policy can have an enormous impact on business behavior.

He also pioneered the analysis of consumption taxes and helped kick-start the literature that to this day is the strongest case for fundamental tax reform. But the list goes on. Along with colleagues Andrew Abel, N. Gregory Mankiw and Richard Zeckhauser, he developed a technique for ascertaining whether an economy has too much or too little capital. Applying their technique to U.S. data, one finds quite decisively that we have too little capital, suggesting that capital income taxation is harmful to our long-run welfare.

Of course, a cabinet full of supply siders, free marketeers, and free traders would advise policies diametrically opposed to those he campaigned on. On top of this, Obama is now being very wishy washy as to whether or not he will implement the promised tax increases on the wealthy that he promised. The only thing that we know for sure is that President Elect Obama wants a muscular stimulus package as soon as he enters office and that he wants to continue the bailout and possibly extend it to the automakers. None of these things were any real part of his campaign platform. He's made vague allusions to his other promises: universal health care, regulatory reform, and employment reform. It's unclear whether or not these will all be tabled for the time being.

In other words, it looks more and more as though the Obama Presidency will be an enigma that will unfold as the Presidency unfolds. That isn't necessarily a problem. Rarely does a Presidency unfold according to any plan. Obama has two major constituencies. The first are those that are extremely ideological, and they saw Barack Obama as the conduit of a new progressive era. If I am now right, those folks will likely be very disappointed. They want out of Iraq now, negotiation not confrontation with Iran, and they hate the bailout. In fact, the bailout will get very little ideological agreement on the bailout. His ideological supporters are sure to be very disappointed very soon if his Presidency continues the way his transition has unfolded.

The second group of Obama supporters see him as some sort of a trans formative figure a la Colin Powell. To them, there is little ideological in their support of Obama. They would call the sort of pragmatism that we have seen so far as proof that they were right. They will likely follow Obama for a long time no matter what he does. They are the sort of folks that will defer to him and assume that no matter what he does, he's right. As such, this sort of pragmatism shouldn't affect his support from this niche of his base.

To me though, there is a great danger in the sort of pragmatism that Barack Obama is showing. At least when he was pitching a left wing populism, one could predict the outcome. Now, no one is really sure what he will do. The world is a dangerous place. Our economy is in a dangerous position, and there are a lot of evil despots and tyrants just licking their chops to test this novice. Meanwhile, we have just elected a first term Senator with a history of accomplishing ABSOLUTELY NOTHING and now we know absolutely nothing about what he is about to do. Let's hope Obama's most fervent followers are right and he really can walk on water. If they are wrong, an executive and political novice is about to make it up as he goes along in a world of terror, Putin, a recession, and a growing Culture and Class war.

My Playbook for a Successful First Obama Term

All right, this is a Conservative giving a Liberal advice. Maybe, I am the last person to give him advice, however sometimes the best advice comes from those on the other side. That said, if Obama focuses on the right matters, takes advantage of the incredible good will he has, then he has an opportunity to have a very successful first term.

1) In the first year, focus strictly on stimulating the economy.

I am already hearing some troubling things from the Obama camp. He has hinted that he intends to bring a bold agenda in his first year: universal health care, combating global warming, a new regulatory framework, etc. This would be a monumental mistake. The economy is in a state of chaos. Attempting to implement universal health care, cap and trade, and a plethora of new regulations would be disastrous for the economy. Can you imagine the financial industry having to deal with a slew of new regulations just as they are recovering from the mortgage nightmare? Can you imagine the nightmare to our economy if we are implementing a revolution in health care while banking, insurance, and the automobiles are struggling to survive?

Barack Obama's administration will initially be judged by the health of the economy. All he needs to do right now is do everything he thinks will facilitate a relatively quick and relatively painless recovery. If the economy is showing signs of recovery by the mid term elections, not only will the Democrats gain a bunch of new seats, but then he will gain his mandate to implement everything else that he wants. If he tries to do everything all at once, everything all at once will fail and he will be blamed for all of it, fair or not. If he implements universal health care now and the economy is still weak, the Republicans will blame this for the weakened economy, fair or not.

2) Make the bailout as transparent as possible.

He is big on posting everything on the internet. He should announce immediately that each and every penny paid to each and every financial institution will be posted on line. Furthermore, he should annonce that he demands that each and every financial institution that receives money post where each and every penny goes as a stipulation for receiving the money. The public has quickly lost confidence in the bailout and partially that's because they don't understand where it's all going. They think that this bailout is just a massive example of a boy's club. Full transparency will help resolve this loss of confidence.

3) Go to Europe and urge our allies to make a signficantly more consorted effort in Afghanistan

He has more good will in Europe than he has here. He should use this good will to urge that our European allies make a much larger contribution to Afghanistan. Afghanistan is a battlefield that Obama is committed to winning. We need more troops but we also need our European allies to change their rules of engagement. Many of the European troops have defensive postures in Afghanistan. That makes their contributions nearly non existent. This war won't be won unless folks are ready to get their hands really dirty. We can either have American troops do this incredibly difficult, dangerous and deadly task alone, or we can have the Eoropeans share the risk. It's time for President Obama to parlay the good will and urge that they do.

4) Direct General David Petraeus to develop a strategy of counter insurgency in Afghanistan and leave it to Petraeus to execute it.

Barack Obama is a novice on foreign policy and military. General Petreaus is an American hero the likes of which we've rarely had. He directed a stunning turnaround in Iraq, and he can do the same in Afghanistan. Give him the order and he will follow it. He can and will do for Afghanistan what he did for Iraq.

5) Meet with the Europeans and urge that the Ukraine be immediately accepted into NATO along with Georgia.

Whether or not this request is received favorably, President Obama will learn a lot just from asking it. If the Europeans agree to fast track their entrance, the Obama knows that they are willing to confront Putin. If not, then he knows that once Putin needs to be confronted he will have to do it on his own. If Georgia and the Ukraine are accepted, then Putin knows that the Europeans will not allow him to walkover them anymore. If they aren't, then President Obama needs to make contingency plans for a one on one confrontation. Either way, President Obama will know the landscape when the eventual confrontation with Putin occurs.

6) Agree to honor Maliki's timeline immediately, but also announce a goal of a serious reduction in troops over the next year and a half.

We have nearly achieved victory in Iraq. The only thing that would threaten this victory would be a far too hasty withdrawal. Nuri al Maliki has given President Obama the political opening to make a withdrawal commitment without jeopardizing the victory. The Iraqis are about to agree to another three year term of American troops. Barack Obama should announce immediately that he intends to have nothing more than a few thousand advisors still in country after those three years are up. Furthermore, he intends to cut the number of troops significantly over the next year and a half. Such an announcement would allow Obama to massage between his fixed timeline, victory, and reality.

7) Announce immediately that 1) Patrick Fitzgerald will remain the Federal Prosecutor in the Northern District of Illinois 2) he will veto the Fairness Doctrine if it is brought to him and 3) he will veto card check if it is brought to him.

There are plenty of folks that are worried that President Obama will help his corrupt buddies back home by quietly removing Fitzgerald who has crusaded against the likes of Tony Rezko, Rod Blagojevic and most of the Chicago area political structure. Making this announcement will make it clear that President Obama is not about to do any special favors for the corruption back home. By annoucing two and three, Obama also announces that he will not be directed by the far left.

If President Obama does all of this, he will have a wildly successful first term and ride a massive wave toward a second term. In fact, if he does all of this, I might have to think about voting for him next time.

Is Vladimir Putin the Second Coming of Adolph Hitler

Historical comparisons are rather dicey however the more I think about the more I am afraid that in Vladimir Putin we may in fact have the second coming of Adolph Hitler. Hitler's rise to power mirrors that of Vladimir Putin's in many disturbing ways. First, Hitler rose to power by exploiting a sense of shame in his country following their defeat in WWI. Hitler made a part of his campaign and platform the resurgence of German nationalism. Putin has done much the same thing in exploiting the fall of the Soviet Union and he also had made the return of Russian nationalism.

Hitler rose to power through mostly Democratic means. Then as soon as he gained power he immediately moved to consolidate that power into an authoritative rule. Hitler moved from a Democratic elected leader to a tyrant in a methodical and systematic manner. He banned unions. He outlawed competing political parties. He took control of the media. He took control of the judiciary. Finally, he eliminated, usually be death, anyone that he saw as a threat to him.

Vladimir Putin moved into power in much the same Democratic means. In fact, he was the hand picked successor of Russia's first elected leader, Boris Yeltsin. Putin didn't move quite as quickly to consolidate his power. That said, once Putin moved to consolidate his power he did it in much the same way as Hitler. Putin's rise to power happened in much the same way. Three plus years ago, with little fanfare, Vladimir Putin orchestrated the conviction and jailing of one of the wealthiest people in Russia.

A Russian court convicted Mikhail B. Khodorkovsky, the embattled tycoon and founder of the Yukos oil company, of criminal charges today and sentenced him to nine years in a prison camp, bringing to an end the most closely watched trial in Russia since the Soviet Union collapsed.

The verdict and the sentence concluded a lengthy legal exercise whose ending long ago felt foregone.

Mr. Khodorkovsky, 41, who had been the wealthiest man in Russia until he publicly challenged President Vladimir V. Putin, was found guilty of six charges, including fraud and tax evasion. Under the terms of his sentence, his remaining prison term will be reduced by the 19 months of pretrial confinement he has already served, and it will end in 2012. Platon Lebedev, a Yukos colleague and fellow defendant, was given the same sentence. Prosecutors had asked for maximum sentences of 10 years.

Since then, much like Hitler himself, Putin has moved to outlaw all competing political parties, all non nationalized media, and then he moved to put the judiciary under his control.

What is most startling in terms of similarities is the manner in which they have expanded in their sphere of influence in their geographical neighborhood. Here is how Adolph Hitler justified his invasions of both Czechoslovakia and Poland.

"By the most brutal methods of terrorism, a regime sought to maintain an existence that was condemned by the overwhelming majority of its people...I have tried to persuade the responsible authorities that it is impossible for a great nation, because it is unworthy of it, to stand by and watch millions belonging to a great, an ancient civilized people be denied rights by their government...

I have endeavoured to find some way to alleviate a tragic fate. One agreement was signed only to be broken. I then tried a second time to bring about an understanding. A few weeks later, we were forced to the conclusion that the government [of Austria] had no intention of carrying outthis agreement in the spirit that had inspired it, but in order to create an excuse. I have determined, therefore, to place the help of our country at the service of these millions. Since this morning, our soldiers are on the march across all of Austria's frontiers." - Adolf Hitler, proclamation to the German people, 12 March 1938, justifying the German invasion of Austria (originally printed in the Canadian Centre for Policy Alternatives Monitor, April 2003 http://www.swt.org/share/ancientciv.htm)

"We have no interest in oppressing other people. We are not moved by hatred against any other nation. We bear no grudge. I know how grave a thing war is. I wanted to spare our people such an evil. It is not so much the country [of Czechoslovakia]; it is rather its leader [Dr. Edward Benes]. He has led a reign of terror. He has hurled countless people into the profoundest misery. Through his continuous terrorism, he has succeeded in reducing millions of his people to silence. The Czech maintenance of a tremendous military arsenal can only be regarded as a focus of danger. We have displayed a truly unexampled patience, but I am no longer willing to remain inactive while this madman ill-treats millions of human beings." - Adolf Hitler, 14 April 1939, justifying the German invasion of Czechoslovakia, at the Sportpalast in Berlin (originally printed in the Canadian Centre forPolicy Alternatives Monitor, April 2003 http://www.swt.org/share/ancientciv.htm)

"The wave of appalling terrorism against the [minority] inhabitants of Poland, and the atrocities that have been taking place in that country are terrible for the victims, but intolerable for a Great Power which has been expected to remain a passive onlooker. We will not continue to tolerate the persecution of the minority, the killing of many, and their forcible removal under the most cruel conditions. I see no way by which I can induce the government of Poland to adopt a peaceful solution. But I should despair of any honourable future for my own people if we were not, in one way or another, to solve this question." - Adolf Hitler, August 23, 1939, justifying the German invasion of Poland, from letters sent to the UK and French governments in
response to their communications condemning the invasion of Poland (originally printed in the Canadian Centre for Policy Alternatives Monitor, April 2003 http://www.swt.org/share/ancientciv.htm)

In much the same way, Putin claimed his own actions were not actions of aggression. He immediately blamed his invasion of Georgia on its President Mikkhail Saakashvilli. Furthermore, he justified his presence in Georgia as being nothing more than a protective force of the minority which he saw as the one being terrorized by the Georgian forces.

Much like Hitler himself, Vladimir Putin is a tyrant obsessed with power, obsessed with restoring his country's nationalistic place in the world, and his M.O. in getting there is remarkably similar to that employed by that evil tyrant years ago. Those that ignore history are destined to repeat it. Vladimir Putin is, in my opinion, the second coming of Adolph Hitler and unless he is confronted now he will likely attempt to usurp the exact sort of power that Hitler attempted all those years ago.

Putin Vs. Obama: the Ukraine...A Thought Experiment

The more that I think about, the more that I am convinced that it will be Vladimir Putin that will test Barack Obama like Joe Biden predicted. First, with oil prices in a free fall, there is only so long that Putin can wait until permanent damage is done the Russian economy. The Ukraine is located strategically by the Odessa/Brody pipeline. Putin no doubt noticed that Europe was weak when he brazenly invaded Georgia. Finally, he must be licking his chops to test the mettle of this foreign policy novice.

Domestically, President Obama would face a very difficult situation in any confrontation with Vladimir Putin. With the economy top priority, it's unclear just how much preparation President Obama would make in such a confrontation. Russia has already rattled sabres with little notice.

President Medvedev ordered missiles to be stationed up against Nato’s borders yesterday to counter American plans to build a missile defence shield.

Speaking within hours of Barack Obama’s election, Mr Medvedev announced that Russia would base Iskander missiles in its Baltic exclave of Kaliningrad – the former German city – next to the border with Poland.

He did not say whether the short-range missiles would carry nuclear warheads.

Taking advantage of the world’s attention on the US elections, Mr Medvedev also cancelled plans to withdraw three intercontinental ballistic missile regiments from western Russia by 2010.

In his first press conference, President Elect Obama fielded questions related to the economy, consultation with former Presidents, and even about the potential Presidential pet. Yet, there wasn't one question about Russia or its latest provocative act.

President Obama would be in a no win situation in such a confrontation. His base would demand pacificity in any confrontation with Russia. This posture would only be reaffirmed by his European partners. If he decided to confront Putin, he would likely be on a political island. That's because his opponents wouldn't trust him no matter his actions on foreign policy. His base would scream bloody murder at anything near a military confrontation.

It's likely all of this has been processed by Putin himself. The Europeans now have a partner that would re affirm their weakness. The performance of Nicholas Sarkozy in the conflict in Georgia is a precursor to their behavior in any future conflict. The instincts of everyone, short of Putin himself, in any such conflict would be toward weakness.

Putin, I believe, fully understands all of this and he is itching to take advantage of it. Obama's penchant for moral relativism (in the conflict with Georgia and in general) would only add fuel to the fire. If President Obama called for both sides to show restraint like candidate Obama made in the immediate days of the crisis with Georgia, it would make anything but appeasement near impossible. Finally, Putin the thug would not be handcuffed by any of the constraints that the leader of a civilized nation would be constrained by. As such, Putin could roll in tanks, commit genocide, and destroy the Ukrainian infrastructure, while a President Obama and his partners searched for a "peaceful solution to the crisis".

All of these confluence of events lead to the perfect opportunity for Vladimir Putin. Putin is not merely a thug. He is also a veteran of geopolitics, the KGB, and the world stage. He knows how to read people and geopolitical opportunities. Here, there is a geopolitical opportunity for Putin to attain that which he covets, power. Putin sees in Barack Obama a weak foreign policy novice with a penchant for moral relativism. He sees the Europeans as weak as well. The opportunity is there for Putin, and I'm afraid he will take it.

The Obama Presidency: Threading a Very Sharp Needle

It's far too early to make any connection however it ought to raise some eyebrows that the Dow lost about 10% since Barack Obama was officially elected. That microcosm is one of many situations in which a President Obama will have to thread an awfully sharp needle. Dick Morris described Obama's first problem.

Those who fear a radical Obama miss the point of the lack of maneuverability of the next president. Behind the mortgage crisis looms the credit-card crisis, the student-loan crisis and the car-loan crisis. Sweating this mess out of the system will take two years of zero growth or contraction.

We won’t have a Great Depression, for the government will irrigate our economy with money. But we’ll have stagnation, followed by inflation.

So Obama will take office with unlimited political power but highly circumscribed practical power. He can pass whatever legislation he wants, but will be unable to indulge his ideology.

The economic situation on its own wouldn't necessarily be a problem because it could be used to excuse any and all failings. The main problem for a President Obama is that he ran under the theme of being a moderate while his actual policy proposals were all left wing. Trying to manage that together will likely put him in awful bind. I see very difficult waters ahead on both economic and foreign policy.

1) The economy.

Here is how the head of Moveon.org described Obama's victory and his own organization's expectations.

President Obama will face daunting challenges from the day he takes office. We look forward, however, to being part of the enormous wave of civic and political engagement that his Presidency has inspired and that will enable him to achieve the things that have been on the top of his agenda and ours. We look forward to the change all of us worked so hard to create

Obama won, in part, by promising a lot of goodies: universal health care, after school education, energy independence, tax cuts for 95% of the people, an end to global warming, etc. Imagine a President Obama trying to implement universal health care right after executing the bailout in the middle of a recession. Such an initiative would lead to nothing short of an economic disaster. Our economy can't sustain an overhaul and massive government expansion of health care in the middle of a recession.

What if a President Obama gets into office and realizes that such a plan would be a disaster? The left wing base would turn on him in a second. Moveon.org et al is not afraid to eat its own, just ask Hillary Clinton. If President Obama doesn't deliver in due time his base will turn on him.

His first year should likely be spent unravelling the bailout. There is absolutely no way he could possibly even try to implement universal health care while the $700 billion continues to be spent and monitored. That is a monumental task on its own. The base will likely understand this, but they won't wait past 2010 for universal health care. The base has no use for anything like ECONOMIC REALITIES. They elected Barack Obama to usher in an era of far left policies. They demand universal health care, an end to global warming, and government lead energy independence. If those demands aren't met soon, they will carve up President Obama much like they carved up Hillary Clinton.

In order for President Obama to be successful, he must govern toward the middle. Here there are several problems as well. First, this means taking on the leadership in his own party on spending. Not only is this something he has shown absolutely no interest in doing before (he voted with his party 97% of the time), but even if he did, politically, that would have its own pitfalls. If he governed from the middle, then moderates would love him. Conservatives would tolerate him, but their support would be lukewarm at best. Conservatives would turn on him as soon as he proposed the first liberal idea. Just ask John McCain how politically viable reaching out can be. Yet, his natural base would turn on him and they would eat him up. What kind of coverage from MSNBC would a President Obama get if it is the middle of 2010 and universal health care is still not a reality?

Then, there is the issue of regulations. Barack Obama has promised a "new regulatory framework". Of course, he hasn't actually specified even one actual regulation. A plethora of new regulations in the middle of a recession is pouring gasoline on top of a burning flame. Once a President Obama actually proposes specific regulations, it's likely we will see an unbelievable backlash as business commentators everywhere analyze just exactly how all of these regulations will stunt further economic growth. If any of these regulations are actually implemented, then we will likely see the economy fall further into a depression, and that would also crush his Presidency.

On global warming, a President Obama would call for tax credits for green technology. That would likely do little help but little harm as well. He's also in favor of cap and trade. Can you imagine forcing companies to meet new emissions standards in the middle of a recession? If he actually went through with this, that would crush the economy as well. Here again though, he has a problem. If he doesn't do something aggressive on global warming, the base will not stand for it. Global warming doesn't poll well overall, but it is overwhelmingly supported among the hard left. They won't merely hope for stiff anti globabl warming policies but rather they will demand it. If he doesn't move aggressively against global warming, the base will not be happy. If he moves too aggressively we will go into a depression.

Obama's main problem is his tax proposal. Whether he realizes it or not, raising taxes on the job creators (the capital gains tax, those making $250k and more, corporate tax...in other words all of his tax increases) would put this economy into a depression come 2010. If he were to actually go forward in his first year with his plan, the Congress would be veto proof for the Republicans by 2011. The Republican Speaker and Majority leader would be the de facto leaders as their policies wouldn't be stopped by either their opposition in the legislature or by a President Obama. If attempts to implement the tax proposal any later, the depression will come just in time for his reelection, and the Republicans will have a super majority come 2012.

If he didn't follow through though, the waters would be just as rough. First, his base demands that the wealthy be punished with higher taxes. Second, it would be an admission that his entire platform was nothing more than an empty campaign promise. His reversal would be the subject of attacks ad nausea in 2012. The Republicans would paint a President Obama as a man that can't be trusted to keep his promises.

2) foreign policy

The rest of the world may love Barack Obama now, but that is likely to last only so long. Ultimately, what most of the rest of the world covets is access to our market. Once the rest of the world's leaders realize that President Obama is a protectionist, he will be treated with the same venom as President Bush. Even if a President Obama attempted to be a free trader, that would have different sorts of pitfalls. First, there's no way any new free trade agreements would pass. Second, the unions and his own base would revolt if he attempted any such thing.

President Obama has other pitfalls beyond trade. His main problem will be Iraq. If there are still anything near a large number of troops left in Iraq by the summer of 2010, he would again face a mutiny in his base. Of course, holding to a firm withdrawal date would jeopardize what is now victory in Iraq. Would a President Obama really risk losing in Iraq just to appease his base? What would happen to our relations with Iraq and the Middle East if he insisted on a firm withdrawal timeline? Obama may catch a break in Iraq in that things have turned around so well that his timeline may even be met. If it can't though, he will face a no win situation. If he winds up withdrawing based on conditions, this will also be used as a bludgeon against him in 2012. If he withdraws on a timetable and things fall apart, he will have to send troops back in, chaos will ensue, and his Presidency will be totally tarnished.

The biggest foreign policy threat to a President Obama is likely to be Vladimir Putin. More and more, I believe it will be Vladimir Putin that will be the one to test Barack Obama. If Putin decides to confront Obama in a place like the Ukraine, President Obama will be stuck in no man's land. His base will demand pacificity in an such confrontation. Yet, that's what Putin likely expects and wants. If, on the other hand, Obama strikes a confrontational tone, whether in words or deeds, it is unlikely his opponents will find much comfort. Conservatives simply feel he is a foreign policy novice. Whatever Barack Obama does in a confrontation with Vladimir Putin, conservatives won't be comforted. Putin is an experienced foreign policy player, and it's likely that he would have President Obama for lunch. Furthermore, it's likely he understands this all too well, and is willing to find out.

That's a lot to handle and it will be fascinating to watch a President Obama attempt to navigate these rough political waters.

Post Election Round Up

The people have spoken and their choice is clear. Barack Obama will be our next and 44th President. He will govern with heavy Democratic majorities in the House and Senate, so it appears we are headed for a serious lurch to the left.

All is not lost for the Republicans. They are almost certain to avoid the nightmare scenario of a filibuster proof majority in the Senate. As such, we will be spared the lunacy of such things as the Fairness Doctrine and open ballots for unions.

The first order of business for President Obama will be the economy. It remains to be seen if he is serious about his plan to to redistribute income. Of more priority for President Obama will be the continued implementation of the massive bailout passed in September. It remains to be seen if President Obama will attempt to implement some of his bolder agenda: universal health care, merit pay, and equal pay for equal work.

For the Republicans, the motto should be targeted filibuster. If they are to be bold, and I don't expect this, they would filibuster a lot and use that time to expose the plans a lot better than John McCain did. This of course would be a dicey proposition and appearing to be obstructionists would only hurt them even more in the next election, however there is still plenty to expose in his policies. If the public was really made aware that his tax plan amounts to a welfare plan, I think they wouldn't support it.

On foreign policy and judges, Barack Obama will have nearly free reign. My greatest fear on foreign policy is that Vladimir Putin will take up Joe Biden on his prediction and he will test him, in Ukraine, within the next six months. On judges, elections have consequences. Republicans should only oppose judges because they are unqualified not because of ideology.

There is still some house cleaning. In Minnesota, Norm Coleman appears to have won narrowly however a recount is almost certain. In Oregon, Senator Smith is holding on barely. In Georgia, it continues to remain unclear if Senator Chambliss will have a run off. In Alaska, Ted Stevens appears to also be headed to a razor sharp victory. Apparently, being convicted of felonies isn't enough to throw someone out of office in that state. The final numbers for the Senate are still not set.

As for me, I will give President Obama a chance. Some have said they believe he will govern from the middle. If he does, he has the chance to be the transformative figure some believe him to be. If he governs from the left or even far left, I predict he will go down in history as a disaster.

Putin's Next Move?

While our economy sits on the edge of collapse, one thing that may have been lost in the confusion is the price of oil. The price of a barrel of oil has fallen from a high of $140 per barrel to right around $80 per barrel currently. This price drop is due almost entirely to a worldwide drop in demand for oil as the world economies teeter on the edge. As such, while most of our pocket books get tighter, one place where we will all see relief is at the gas tank.

While much of the world is likely happy to see oil dropping, one person that is not is Vladimir Putin. In the summer, I surmised the theory that Garry Kasparov, former chess champion and current political opponent of Putin, has about what motivates Putin geo politically. Kasparov believes that Putin's every geopolitical move is done in order to prop up oil prices. The Russian economy is a house of cards based entirely on inflated oil prices. Russia has seen an enormous growth in wealth over the last seven years and that is due entirely to the enormous growth in oil prices. The Russian economy is not diversified, and wealth is not distributed throughout most of the society. What the Russian economy has is a blossoming oil industry, propped up by the inflated price of oil. Russia supplies about one quarter of Europe's energy needs.

The Russian economy could withstand a drop in oil prices for a while, but it cannot withstand a fundamental shift in oil prices. Because the world's economies are sputtering that is exactly what is happening. The price of oil is plummeting because worldwide demand is plummeting. This is a dynamic that Russia, and Putin, cannot stand for too long.

Putin has numerous options, and we have already seen him attempt to take some of them. Just a week and a half ago, Russia announced an arms deal with Venezuela.

Venezuelan President Hugo Chavez and Russian President Dmitry Medvedev watched the signing of deals between state energy companies in the southern city of Orenburg. Chavez also was expected to watch a major Russian military exercise during his second visit to Russia in just over two months.

The Kremlin said Thursday that Russia is granting Venezuela a US$1 billion
credit for the purchase of Russian weaponry. The arms purchases have
sparked concern in the U.S. and among some neighbors of Venezuela, such as
Colombia, which has accused Venezuelan officials of supporting leftist
insurgents.

Often, we have seen Putin insert himself into geopolitical spheres where there is oil and get into bed with geopolitical loose cannons that sit on significant oil reserves. I believe he does this because instability often causes the price of oil to increase at least in the short term. An armed Venezuela has the potential of doing significant damage to the oil market. If Hugo Chavez feels he is militarily powerful enough, there is no telling what he might do with the significant amount of oil that he sits on. Over the last several years, Putin has gotten into bed with the Iranians, and blocked any action against them in the Security Council. This, I believe, he also does because instability by the likes of Iran causes short and long term rises in oil.

Of course, we are in a different time then we were only a couple of years ago. The sort of geopolitical stunts that Putin could pull to force oil up ten and twenty percent are gone. Making arms deals and rattling sabres would have worked while the world's economies were somewhat solid. In this downturn though, Putin will have to do something dramatic. Back in August, he invaded Georgia, and with it, a two week drop in oil stopped and turned around for a week.

If Putin is to stop the slide in oil, he will have to do something as dramatic. John McCain often says watch the Ukraine. This is actually the most logical step for Putin. Like Georgia, Ukraine is not yet in NATO. Furthermore, like Georgia, the Ukraine has a significant ethnic Russian population. Their "protection" could be the trojan horse that Putin could use for invasion much like Georgia. Most importantly, a significant oil pipeiline known as the Oddessa/Brodsky pipeline runs right through the Ukraine.

I believe that Putin read the Europeans as weak and he believes that they wouldn't have the stomach for any serious military confrontation as long as they were convinced that whatever incursions occurred temporarily. His show of force in Georgia appears to wrapping up, and if the Europeans thought that any incursion into the Ukraine would only last for months, I believe that whatever "strong diplomatic language" they used, it would stop at language. A significant incursion into the Ukraine, close enough to the pipeline, could be all the oil market needs to jump at least temporarily.

If Putin is really bold, he could move into any one of the three former Baltic States, Estonia, Latvia, and Lithuania. Incursions into these three hold a dicier proposition, but one that Putin could even see as an opportunity. That's because they are all NATO members. NATO charter states clearly that an attack on one is an attack on all. Yet, Putin might believe that won't be enough motive for the Europeans to confront him militarily. If NATO folds even though one of its members is attacked, NATO literally would fold and the alliance would forever be useless. Each of those three nations also sit on significant oil.

The diciest proposition is Poland. That's because not only are they a part of NATO, but their military would likely give the Russians its biggest challenge. Putin may not want an invasion that he isn't one hundred percent certain he can win.

One thing is clear though. Putin has little time the way that oil is going. A move may soon be necessary because his economy simply can't survive oil prices anywhere below $50 a barrel.

Examining Bush's Legacy

Presidents often leave office with popularity that differs from their popularity. For instance, when Calvin Coolidge left office the economy of the 1920's was still roaring. While polls weren't a mainstay of politics, it's likely that if they were he would have left office with high marks. Harry Truman, on the other hand, left office at the end of the protracted Korean War. His approval ratings were even worse than the current President's. Yet, generations later, it is Truman that is seen as a President of significant esteem while Coolidge's administration is generally dismissed. Then again, often times Presidents leave office with the same marks as their legacies. Jimmy Carter left office deeply unpopular and his legacy hasn't been helped since he left office. Ronald Reagan left office with similar popularity to that which he enjoyed throughout his Presidency. His legacy hasn't suffered one bit since he left office. So, what will be the fate of President Bush? Only time will tell, and his legacy will certainly be determined by folks with more power and influence than me. That said, with months left, I will take a stab at determining his legacy.

There is no doubt that 9/11 will determine a great deal of Bush's legacy. The fact that there have been no attacks on our soil since 9/11 may be minimized by his opponents, the media, and an increasingly apathetic public, but it's likely that history will give that feat more significance. Ironically enough, this will gain more significance depending on how future President's record is on the same matter.

That said, his foreign legacy is will be interlocked with the war with Iraq. While the war has been a terrible drag on his current popularity, history has a way of looking at wars differently than the public does while they are happening. The Civil War dragged Lincoln's popularity down significantly. In fact, all wars that last long enough will do that to a President. In fact, President Lincoln faced an eerily similar opposition from the Democratic Party that President Bush faced from the same Democratic Party in 2007. Just like the current President, Lincoln was able to beat back the opposition and soon after the North made a stunning turn around and ultimately history proved Lincoln right. President Bush faced his own showdown with the opposition, and the war saw a similar remarkable turn around.

Winston Churchill once said something very relevant about this subject

history is written by winners

No matter how difficult the road to victory has been in Iraq, the U.S. is now on its way to victory. The difficulty of the Civil War is downplayed in most history books. Lincoln is now lauded as a President that showed leadership and courage in guiding the country through its dark hour. Most people don't realize that his political opponents as well as many in the press demonized and criticized Lincoln in ways then that would make the attacks on the current President seem mild. Here is just an example from the 1864 Democratic Party Platform.

Resolved, That this convention does explicitly declare, as the sense of the American people, that after four years of failure to restore the Union by the experiment of war, during which, under the pretense of a military necessity of war-power higher than the Constitution, the Constitution itself has been disregarded in every part, and public liberty and private right alike trodden down, and the material prosperity of the country essentially impaired, justice, humanity, liberty, and the public welfare demand that immediate efforts be made for a cessation of hostilities, with a view of an ultimate convention of the States, or other peaceable means, to the end that, at the earliest practicable moment, peace may be restored on the basis of the Federal Union of the States.

Victory proved Lincoln right and his critics wrong. The same fate may await the current President. Certainly, I believe that his legacy vis a vis Iraq will be much better than its current perception of his Presidency. If victory is attained, then the Bush Doctrine will also see a vindication. If Iraq becomes a functioning Democracy, then all those critics that said that Democracy couldn't happen in the Middle East will be proven wrong. While it is a concept lost on Americans now, a functioning and free Iraq still free decades later will be a remarkable lasting legacy for the current President.

Domestically, the President will be tied to two significant economic events, theinternet bubble and the real estate bubble. While his opponents and the media try and downplay his tax cuts, I suspect history will give them their due. When Bush came into office, the internet bubble had cost three trillion dollars in paper losses from March through December of 2000. Only eight months into his term, 9/11 caused one million jobs lost in its immediate aftermath. Its total impact was trillions. At roughly the same time, Enron began a domino effect of significant companies like WorldCom admitting that their profits throughout the nineties were nothing more than fraud. This was the economic landscape that President Bush was left with. Yet, the recession of 2001-2003 was rather mild. It never tured into a depression even though the economic perfect storm of the three events I described should have put the country into one. While opponents pretend as though his tax cuts did nothing, and often they claim they hurt, that is just nonsense. Bush never got credit for the economic recovery that his tax cuts stimulated from the antagonistic press corp and equally antagonistic political opponents, however, history has a way of cutting through such nonsensical spin.

The real estate bubble will likely, however, be as big a stain on his legacy as his tax cuts will contribute to it. I am of the opinion that Alan Greenspan deserves most of the blame for the crisis, however I don't know if history will isolate one individual the way I have. Calvin Coolidge's legacy was stained because he stood idly by while speculative behavior drove the economic boon. That all came to an end when the stock market crashed on October 29th, 1929 and his own legacy was sealed on that fateful day. The current President ignored similarly speculative behavior throughout his Presidency often touting the explosion of home ownership while it was happening. Just as history has been cruel to Coolidge for ignoring the warning signs that lead to the crash of 1929, history maybe just as cruel to Bush for ignoring similar warning signs.

In my opinion, the biggest stain on Bush's legacy will come from his relationship with Vladimir Putin. While Bush considered Putin a friend, Putin was slowly not only consolidating power internally, but looking to consolidate power externally. Bush totally misread Putin when he said that he looked into his soul and saw a good man. Putin is a thug, and because Bush didn't see this right away, he allowed this thug to gain in power while Bush looked the other way. In my opinion, Putin is on a collision course for a new Cold War and this one will likely have real military battles. If that happens, Bush's neglect will be a huge stain on his legacy.

Bush's most lasting act as President may wind up being overlooked in his legacy, and that is his choices of John Roberts and Sam Alito to the Supreme Court. Supreme Court justices seem to be dismissed in historical terms, and that's inexplicable to me. Dwight Eisenhower famously pointed to Justice Brennan and Justice Warren as the two biggest mistakes of his Presidency. Yet, those two mistakes have had negligible effects on his legacy. Certainly, the debacle of Katrina will be a stain, however I am not sure just how much history will judge it. What's unclear is how much his legacy will be stained by his total lack of fiscal discipline and the corruption that this lead to. All in all, I believe that President Bush will have a fairly mixed legacy. He will certainly be seen in history as a much better President than any of his critics will ever admit. At the same time, his legacy is much more stained than any of his long time supporters will care to admit.

Containment with Russia the Best Way to Go?

That's what David Ignatius seems to think is the best strategy.

In the days after the Russian invasion of Georgia, the world had a chance to examine the different foreign-policy styles of John McCain and Barack Obama. It was a telling comparison that offered some clear signs of how the two candidates would react to crises.

The contrast was between hot and cool; between quick action and cautious deliberation; between a man with his eye on military and strategic issues and another who is focused on diplomacy.

...

Within hours of the Aug. 8 invasion, McCain was voicing his indignation and demanding that Russia unconditionally halt its military operations and withdraw its troops. Three days later, he called the attack "a matter of urgent moral and strategic importance to the United States of America" and urged a series of measures to check Russia. Most important, he argued that NATO should reverse its April decision and approve Georgia's request for prompt membership -- a move that would commit the alliance to go to war if Georgia were attacked.

Obama's first reaction was more measured: "Now is the time for Georgia and Russia to show restraint," he said on Aug. 8. He had sharpened his tone by Aug. 11, but the focus was still on diplomatic solutions. "Let me be clear: We seek a future of cooperative engagement with the Russian government," he said.

...

The Georgia crisis, in truth, shouldn't have surprised anyone. It has been coming at us in slow motion for several years. The Russians, far from hiding their intentions, have warned repeatedly that U.S. attempts to bring Georgia into NATO were unacceptable to the Kremlin and would have consequences; the Bush administration didn't respond to Russia's statement of its interests in a way that might have deterred Moscow. It didn't make clear in advance the consequences Russia would pay if it attacked. Instead, the U.S. tried to play both sides of the street -- encouraging Georgia's NATO hopes, but not just yet.

Georgia's president, Mikheil Saakashvili, kept poking the Russian bear -- and finally launched the attack on South Ossetia that gave Russia a pretext for its devastating response. The administration knew Saakashvili was walking into a trap, officials even told him so privately -- but not with a decisive, high-level intervention that might have checked the disaster.

The notion that we are locked in a new Cold War is the most dangerous misjudgment of all. That's what is driving Putin: He feels threatened and encircled by a NATO that, in fact, has no hostile intent toward Moscow.

Now, whenever I read someone that proposes "soft power" toward Russia, as Ignatius (of the Washington Post), I am always struck that these plans are always full of criticism of hard power but lack any specifics of their own. This is no different. Ignatius seems to think that Putin sees the attack of Georgia as some sort of demented defensive move. Putin, in Ignatius' view, sees NATO as threatening, and sees the inclusion of more and more of his neighbors as a threat. Ignatius believes that what the U.S. needs to do is convince Putin that NATO is not a threat to him.

To me this is Putin's trojan horse. The invasion of Georgia was a purely offensive geopolitical move. NATO is only a threat in that the more former satellites join NATO the less of them he can dominate. Putin rattles sabres everytime anyone around him reaches out to the West or takes on a defensive posture. He claims to view these geopolitical moves as some sort of aggressive action against Russia.

In his warped mind, you could say that it is. That's because when his satellites reach out to the West or take on a missile shield, it is more difficult for him to dominate them. Ignatius says that in order to deal with Putin the West must

allies in a careful but firm process of containment. In drawing lines, we need to make sure they are realistic and sustainable -- and that the promises we make are ones we can keep.

Of course, if the invasion of Georgia has taught the world anything it is that Putin will not abide to any lines set by the world. Russia has not only kept troops in country for weeks, with impugnity, but they have now officially recognized the two breakaway provinces. All of this is in direct violation with the latest lines the West set (in the form of a ceasefire).

What Ignatius, in my opinion, fails to realize is that when someone like Putin, consumed with the accumulation of power, confronts the rest of the world, the rest of the world has no choice but to stand up to this confrontation. The problem with containing someone like Putin is that every inch you give him will be used to grab more. Until and unless you confront him, he will continue to expand his power as he did in Georgia.

Now, I am of the opinion that the best way to confront Putin without military force is through a worldwide effort to energy independence. Putin's entire source of economic power comes from artificially high oil prices. Over the last several years, high oil prices has expanded wealth in his nation which sits on a large reserve of oil and natural gas. If the West makes a real effort to energy independence, the Economic house of cards will crumble internally. As long as Europe gets 25% of their domestic energy from Russia (as they do now), Russia exerts geopolitical influence throughout Europe and the world. Take away that source of extortion and you take away all of Putin's power. Of course, that is a long term process, but we can start now by announcing here in America that we are on the way to energy independence by announcing that we are going to drill internally and do it immediately.