Lots of people have stepped forward to defend WikiLeaks on a free speech / free press basis. That seems a fairly obvious conclusion, almost to the point of inarguable. There might be no freedom we hold more dear than free speech, believing as we do that no other freedoms can long endure without this one foundational right. Even if WikiLeaks is not afforded a constitutional protection, it not being a U.S. citizen, that principle is so deeply ingrained in our national character as to cover even WikiLeaks.

But WikiLeaks posting all these documents is only the second half of the story, isn’t it? The first half covers WikiLeaks obtaining them. Receipt of stolen goods is a crime. At the very least, isn’t it patently obvious that WikiLeaks committed that crime? It is not clear to me to what extent they actually organized the theft of these documents, but if that was case, then the criminal quotient goes up even more. If people acted on WikiLeaks’ instructions or instigation, or if WikiLeaks paid people to obtain these documents for them, then they are more criminally complicit still.

Maybe the publishing of the documents didn’t add to WikiLeaks’ rap sheet. But that doesn’t mean they didn’t do grave wrong and shouldn’t be held to account.

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President Obama is meeting with Republican Congressional leaders today, ostensibly to work out a game plan for the lame duck session. Or maybe it’s just crab cakes day in the White House kitchen, and who wants to miss out on that, yanno?

The two big issues on the agenda are the extension of unemployment benefits, which expire after today, and the extension of the Bush tax cuts, which expire on December 31. On the tax cut piece, the argument is limited to whether the tax cut from 39% to 36%, which applies to the highest tax bracket or about 2% of the population, should be extended. Everyone agrees on extending tax cuts for the other 98% of taxpayers.

The policy dilemma is that Republicans have pledged both to cut the deficit (which calls for letting the tax cuts expire) and to lower taxes (which, of course, calls for extending the tax cuts). President Obama should use that dilemma to his — and the economy’s — advantage today. He should present the Republicans with a public statement that says this:

“We are pleased to announce we have reached an agreement with the President to extend the tax cuts enacted earlier this decade for all Americans. While we recognize that the economy has rebounded these past two years, we also know that it is a fragile recovery. We have a responsibility to preserve and expand that recovery, so that the private sector can create more desperately needed jobs in the months to come. Extending these tax cuts for all Americans is an essential step in promoting that recovery.
“At the same time, we are troubled by the impact of extending these tax cuts on the federal deficit. Our agreement with the president today will add more than $2 trillion to our national debt over the coming years. We ask the American people to understand that what is necessary to solve today’s jobs crisis may increase federal deficits in the short run. We pledge to work with the president to find long term solutions to our fiscal crisis, solutions that bring government spending to a sustainable level without disrupting the ongoing recovery.”

If the Congressional Republicans agree to make, and adhere to, this statement, couldn’t the president go along? And wouldn’t that be good for America?

“Morning Joe” had as guests this morning both Rep. Aaron Schock (R-IL) and Rep. John Shaddeg (R-AZ). These are two of the more thoughtful, reasonable Congressional members of either party. What struck me, though, is the formulation of economic policy that they were putting forth.

Rep. Shaddeg was being asked one of the media’s favorite questions these days, namely, why it is that extending unemployment benefits has to be “paid for,” but extending the Bush-era tax cuts does not. The response — predictable from either party — was that this was all about jobs. Shaddeg made the point that unemployed people don’t spend those unemployment benefits; they hold on to the money for as long as they can. Rep. Schock’s contribution was that the unemployed don’t hire people, business owners do.

To me, this is a complete distortion of economic reality. Of course business owners do the hiring, but why do they hire? They hire for one reason and one reason only: they need the workers to meet the demand for their goods or services. Certainly not because their taxes are lower (or higher). Where does the demand for goods and services come from? From consumer spending, mostly. Create more consumers, or increase the spending of the consumers we have, and demand goes up… and then hiring goes up. It’s pretty simple really. Except somehow it confounds the Washington crowd.

I am not making the case for or against extending unemployment benefits, nor the case for or against extending tax cuts. My point is that we will never get economically sound policy out of Congress if our elected representatives continue to put forth economic nonsense as the basis for policy.

Put very simply, we have to choose between more job creation or more debt reduction, at least in the short run. Republicans have come into town promising both. That’s nonsense. Those two policy aims, each important and valuable in its own right, work at cross purposes, at least in the short run. Pick one. You want job creation? Then extend unemployment benefits and extend the tax cuts — but be honest and tell the American people that it is necessary to raise deficits in the short term to stimulate those jobs. You want debt reduction? Then cut off the unemployment benefits and let the tax cuts expire — but be honest and tell the American people that job creation will suffer in the short run.

Good reading from David Frum here.

It has been four  five six days since the mid-term elections, and during that time I have started and abandoned four six seven different posts on that topic. So many different emotions have filled me. I may have needed at least little space to make better sense of them. A fable (kind of) to start off…

Once, there was a group of three Mexicans who set out on a fishing boat to catch sharks.  However, their boat soon experienced adverse winds and mechanical difficulties, and they were lost at sea. The fishermen existing on nothing but raw fish, rain water and the tiny amounts of additional fresh water they could condense and trap. Finally, after nine months and nine days, they were picked up by another fishing vessel, some 5500 miles from where they had started. (True story)
Of course, the Mexican fisherman were malnourished and emaciated. The captain of the ship that rescued them, a Democrat, immediately ordered that a sumptuous feast be brought forth for the starving men. They ate and ate until they had had their fill, gorging themselves on rich roast meats and delectable baked goods and every manner of decadent indulgence.
The First Mate of the rescue boat, himself a Republican, thought ill of the captain’s plan, however. He immediately dashed off a wire to the corporate office, complaining that the feast had ruined the food budget for the vessel’s entire trip. What is more, he strenuously objected to the eating habits of the rescued men. “They ate with reckless abandon,” he reported. “Plate after plate of rich, fatty food. To eat like that only will lead to grave ill health — obesity and heart disease and diabetes and worse. This must be stopped immediately,” he concluded.
The corporate managers summoned the boat back to the harbor, and launched an inquiry into the captain’s actions. They heard evidence from nutritionists and health experts, who confirmed the First Mate’s fears. No one could remain healthy on such a diet as this, they concluded. The captain was reprimanded for his poor judgment, and ordered not to pick up any more lost fisherman for the remainder of his commission. The next day, he apologized to the corporate managers, although many, including the First Mate, felt that he still didn’t really ‘get’ it. They vowed to watch his every move with great vigilance, lest his insidious plan come to pass, and every fisherman on the sea become obese and unhealthy.

And that is where I find myself after the elections. I am not disheartened that the electorate has focused its attention on putting America on a healthy diet. I am disheartened that the electorate seems not to have distinguished between the necessary government actions to turn back a catastrophic recession — a spending “feast” fed to starving fishermen, if you will — and the long-term fiscal realities that we must face.

Somewhere, somehow, successful candidates managed to turn the government’s response to the recent economic crisis upside down. Not only did they portray the government’s response as ineffective, they managed to sell it as the cause of the crisis. That is absurd. Without the Bush/Obama TARP and stimulus interventions, today unemployment would be much higher, and economic growth would be much weaker (perhaps even the economy still contracting), and bankruptcies and mortage defaults would be at even higher levels, and government spending (on safety net programs) would be considerably higher, and government receipts would be much lower (on a smaller economy; all capital losses, no gains), and federal deficits would be much higher, and federal debt would be growing much faster.

But that’s not what seemed to be in people’s minds last Tuesday. Voters seemed to think that runaway spending and an expansionist view of government had created the economic crisis, had created the huge deficits and growing federal debt.  They seemed to be oblivious to the reality that the campaign promises of many of the newly elected — to move immediately toward cutting spending and balancing the budget — likely would push the fragile economy right back into recession, economic contraction, job losses and all the woes that derive from that.

I would love to have an honest debate in this country about the proper size and scope of government, about how we really do address structural over-spending; about how to use tax policy to most effectively promote economic growth. Unfortunately, the mid-term elections were not that debate. They were a debate between the cynical fantasy of the minority party (to cut taxes and cut spending so as to balance the budget, all to end the current recession) and the naive oblivion of the majority party (failing to put forth a necessary agenda to address the country’s long-term structural deficits).

Gahhh.

I just heard an appalling radio ad. The narrator, in the role of president of some foreclosure assistance firm, was recounting the story of his parents. How they got a mortgage to buy their home, “did everything right,” and then both got laid off. This dutiful son, so it seems, stepped in, but after seven months could not get the bank to agree to loan modifications. So he “x-rayed” the loan agreements, found illegal terms (“like are in 80% of all mortgages”), and sued the lender. The proud punch line? “Twenty-seven months later, they are still in their house.”

The part of the story overlooked in the ad is, of course, that these probably apocryphal parents weren’t actually paying the loan! That’s a damned big detail to omit.

We all grieve personally for the brother, mother, neighbor, co-worker, laid-off ex co-worker and others who have lost their homes through this dreadful housing and employment market. Still, can it possibly be the right or equitable solution to prevent lenders from seizing the legitimate collateral securing the legitimate loan from people who are truly not paying their debts?

Of course not. Just another example of the greedy something-for-nothing culture that has taken hold of this nation.

Instead of all this nonsense, how about we attend to our “safety net” — remember that quaint notion? We can’t prevent people from stumbling. But we can ease them back onto their feet when they do.

Do you consider yourself a limited government type of voter? Are you looking for a path to find the political solution to runaway government spending? I am here to provide a word of caution. Consider, please, these facts:

  • Ronald Reagan: Federal spending in 1981 (the oldest year I have comparable data for) = $697.8 billion. Federal spending in 1988 = $1,066.9 billion. Average annual increase: 6.3%.
  • George HW Bush: Federal spending in 1988 = $1,066.9 billion. Federal spending in 1992 = $1,427.8 billion. Average annual increase: 7.6%.
  • Bill Clinton (pre-Gingrich with Democrats in control of the House): Federal spending in 1992 = $1,427.8 billion. Federal spending in 1994 = $1,463.0 billion. Average annual increase: 1.2%.
  • Bill Clinton (with Gingrich & Republicans in control of the House): Federal spending in 1994 = $1,463.0 billion. Federal spending in 2000 = $1,788.6 billion. Average annual increase: 3.4%.
  • George W Bush (with Republican control of Congress): Federal spending in 2000 = $1,788.6 billion. Federal spending in 2006 = $2,659.2 billion. Average annual increase: 6.8%.
  • George W Bush (with Democratic control of Congress): Federal spending in 2006 = $2,659.2 billion. Federal spending in 2008 = $3,145.3 billion. Average annual increase: 8.8%.
  • Barack Obama First Year: Federal spending in 2008 = $3,145.3 billion. Federal spending in 2009 = $3,516.1 billion. Average annual increase: 11.8%.
  • Barack Obama Second Year (annualized): Federal spending in 2009 = $3,516.1 billion. Federal spending in 2010 = $3,445.6 billion (annualized using data through September). Average annual decrease: 2.0%.

All information sourced from http://www.fms.treas.gov/mts/mts.xls.