The McCain Mutiny

Reagan + Friedman + Keynes: We Need All the Help We Can Get.

Why Pitchers Use: pitchers mainly take them to recover from the most unnatural act in sport: throwing a baseball

Washington Is the Problem: FedEx's CEO on McCain, free trade and the tax bias against capital-intensive industries.

Ismael Roldan

The Prodigal God: Recovering the Heart of the Christian Faith

Renowned minister and New York Times bestselling author Timothy Keller illuminates the central Christian Message with one of the most powerful yet most misunderstood parables of the Bible.

Newsweek called Timothy Keller “a C. S. Lewis for the twenty-first century” in a feature on his first book, The Reason for God. In that book, he offered a rational explanation of why we should believe in God. Now, in The Prodigal God, he uses one of the best-known Christian parables to reveal an unexpected message of hope and salvation.

Taking his trademark intellectual approach to understanding Christianity, Keller uncovers the essential message of Jesus, locked inside his most familiar parable. Within that parable, Jesus reveals God’s prodigal grace toward both the irreligious and the moralistic. This book will challenge both the devout and the skeptics to see Christianity in a whole new way.

Intro & First Chapter: Sample Pages

Listen to The Prodigal Sons sermon or
Right click here to download a MP3 version.

Click here to order Timothy Keller’s book The Reason for God from one of our online partners.

Christless Christianity

Read the first chapter of
Christless Christianity!

Is it possible that we have left Christ out of Christianity? Is the faith and practice of American Christians today more American than Christian? These are the provocative questions Michael Horton addresses in this thoughtful, insightful book. He argues that while we invoke the name of Christ, too often Christ and the Christ-centered gospel are pushed aside. The result is a message and a faith that are, in Horton‘s words, "trivial, sentimental, affirming, and irrelevant." This alternative "gospel" is a message of moralism, personal comfort, self-help, self-improvement, and individualistic religion. It trivializes God, making him a means to our selfish ends. Horton skillfully diagnoses the problem and points to the solution: a return to the unadulterated gospel of salvation.

A prophetic wake-up call for the American church.

New York Times Hires Bono

The New York Times opinion/editorial section will feature a new contributor next year: the socially-minded rock star Bono, who will submit columns on a wide array of topics for free -- or "pro Bono" as Radar cheekily puts it).

Andrew Rosenthal, editor of The Times' op-ed section, told Columbia Journalism School students on Wednesday night that the U2 singer will submit six to ten columns in the coming year to address his usual concerns and a certain blue-eyed crooner from radio's golden era.

The Irish millionaire will muse on Africa, poverty, and, importantly, the music of Frank Sinatra. And while Bono may seem an odd choice for such a contract, Rosenthal did mention his current obsession with learning the guitar, and even shuffled freshly downloaded riff tablature together with his lecture notes. And though Rosenthal didn't announce any other celeb contributors, he did allude to re-recruiting the pen of Queen guitarist Brian May, who just earned his doctorate in astrophysics, and expressed admiration for previous opinion writers Bruce Springsteen and Larry David.

Obama Wants Social Security to Be a Welfare Plan; His tax credit amounts to a radical change in the system.

Imagine this: Barack Obama proposes a Social Security payroll tax cut for low earners. Workers earning up to $8,000 per year would receive back the full 6.2% employee share of the 12.4% total payroll tax, up to $500 per year. Workers earning over $8,000 would receive $500 each, with this credit phasing out for individuals earning between $75,000 and $85,000.

AP

This tax cut would make an already progressive Social Security program even more redistributive. Under current law, a very low earner receives an inflation-adjusted return on his Social Security taxes of around 4%. That's a good return, given that government bonds are projected to return less than 3% above inflation. A high-earning worker, on the other hand, receives only around a 1.5% rate of return. Under Sen. Obama's proposal, returns for very low earners would rise to around 6% above inflation -- about the same return as on stocks, except with none of the risk. Compounded over a lifetime's contributions, the difference in the "deal" offered to workers of different earnings levels would be extreme.

While Social Security has always been progressive, many would say this plan goes too far and risks turning Social Security into a "welfare program." Low earners receive more in benefits than they pay in taxes -- meaning their "net tax" is already negative -- and Mr. Obama's plan would increase net subsidies from the program.

Moreover, this payroll tax cut plan would reduce Social Security's tax revenues by around $710 billion over the next 10 years. If made permanent, the Obama tax cut would increase Social Security's long-term deficit by almost 60% and push the program into insolvency in 2034, versus 2041 under current projections.

To fill the hole in Social Security's finances, Mr. Obama would increase income taxes on high earners and pour that money into Social Security. This would be the first time that income tax revenues have been used to finance Social Security, which has always relied on its own dedicated payroll tax to differentiate itself from other government programs. Filling the gap with higher taxes on high earners would further increase Social Security's progressivity, pushing it closer toward a welfare-program approach.

Now, you haven't heard Mr. Obama describe anything like this plan. If you had, it's likely you wouldn't support it. But it's almost exactly what his headline "tax cut" would do. The Obama campaign took the idea described above and made it much more complicated.

Under the plan, which he claims would cut taxes for 95% of Americans, provides an income tax credit worth 6.2% of earnings up to $8,000, for a maximum credit of $500 per worker or $1,000 per couple. The 6.2% figure is important, because it matches the employee share of the Social Security payroll tax. Because around a third of Americans currently pay no income taxes -- a fraction that would rise to almost half under Mr. Obama's plan, according to the Tax Policy Center -- Mr. Obama's tax credits would be refundable, meaning you could collect the credit even if you paid no income taxes.

While Mr. Obama calls his plan "Making Work Pay," under standard economic assumptions his plan would actually discourage work for anyone earning over $8,000 per year. The tax credit itself would increase workers' take-home pay, an "income effect" that reduces incentives to work. Moreover, for workers in the $75,000 to $85,000 income range, where the tax credit is phased out at five cents for each dollar of additional income, this would add five percentage points to their marginal tax rate.

So Mr. Obama has in essence proposed cutting Social Security taxes for low earners, which would shift the system toward a "welfare" approach and sharply increase its long-term deficit. To fill the funding gap, he will raise taxes on high earners and funnel the money into Social Security, making the system even more progressive and breaking a long tradition against funding Social Security with income taxes.

The complex way in which Mr. Obama structures and describes his plan would make it harder to administer than a straight payroll tax cut. But it is also more difficult for the typical American to understand. This may explain why he chose complexity over clarity.

Mr. Biggs is a resident scholar at the American Enterprise Institute in Washington, D.C. He blogs on Social Security policy at www.andrewgbiggs.blogspot.com.

Business Finally Fights Back

Ten days to election, and they are pouring millions into ads, canvassing neighborhoods, making calls, getting out the vote, enraging Democrats -- all in an effort to turn around a dire political situation. The Republican National Committee? No. The U.S. Chamber of Commerce.

The business community is back in politics. After years of contented political gridlock, American companies are now officially horrified at what an all-Democratic Washington intends to inflict on the U.S. economy. The Chamber is throwing its extensive resources at denying the left a filibuster-proof Senate. In doing so, it has stuck its finger in the Democratic leadership's beehive, and is facing retribution.

It says something about the momentousness of this race that the Chamber doesn't care. While the trade group has always been a force, over this decade many businesses have inched back from in-your-face politics. They felt comfortable with Republicans in charge. They felt comfortable with Democrats running Congress, since divided government rarely brings change. They felt comfortable not offending either political party, and not inviting attack by liberal activists.

They do not feel comfortable now. The Democratic Party once respected the need for a healthy U.S. business community. That was in part because business was ferocious enough to demand respect. But a resurgent labor movement has asserted control over the party. And business has been more concerned with PR than principle. This, and the recent financial crisis, has emboldened Democrats to pursue a pure antimarket agenda.

Their "card check" legislation means thuggish unionism. Their tax policies would squelch American capital. They'll reverse tort reform. Their antidote for today's financial mess is a super-Sarbanes-Oxley. Trade? What's that? Energy? What's that? Henry Waxman will start so many witch hunts, he'll need a lottery to see who goes first.

This agenda has inspired what Bill Miller, who runs the Chamber's political shop, describes as an "unprecedented" rallying of the business community around the Chamber's political efforts. Under the feisty leadership of Tom Donohue, the association understood early on that -- sexy presidential election aside -- the real worry was a liberal, antibusiness supermajority in Congress.

It has, for months, been defending the 60-vote wall, fully engaged in nearly every competitive Senate race. It may well spend $40 million this cycle, or double its 2006 effort. In many Senate races, the Chamber is proving the only outside help to underfunded Republicans.

In Kentucky, the group has blasted Democratic candidate Bruce Lunsford for his antienergy stance. In Minnesota, it is beating on Al Franken for failing to carry workers' comp coverage for his employees. It has tagged New Hampshire Democrat Jeanne Shaheen as a "taxing machine." It has praised Oregon Republican Gordon Smith for his work on health care.

It also unveiled the season's most humorous ad, entitled "Meet Bill." It features real-life union boss, Bill, caught assaulting a cameraman ("I'm gonna' take this camera and stick it somewhere you don't want it!"). It points out that it would be Bill who, under card check, would get to monitor votes in a union drive.

This is brave stuff, especially given Democratic admiration for Bill-like tactics. Chuck Schumer, who is leading the Senate effort to turn Democrats into masters of the universe, is livid. All the more so, given he's spent the past year threatening the business community with dire retribution if it doesn't support his party. (Weren't they listening?) He recently ripped the group as nothing more than a "wing" of the GOP, and has made clear he'll remember the slights.

Truth is, the Chamber is nonpartisan. It makes endorsements based on which candidate will do the most for the business community. If Mr. Schumer wants those endorsements, he could always try fielding candidates that deserve them. As it happens, the Chamber in 2006 went all out for three vulnerable House Democrats who'd been targeted for their free-trade votes. This year it is going to bat for Louisiana's Mary Landrieu and Virginia's Mark Warner -- both of whom it believes will work with business.

Mr. Miller doesn't apologize for supporting members' interests: "What if we became lambs instead of lions? Would the legislative agenda be less beholden to trial lawyers and labor unions? Maybe this is a shot at K Street, but the lobbying mentality of too many is to go up and be solicitous, and hope to get some crumbs from the table. That is not our deal. Our deal is to be the last line of defense for the business community. And while we always work collaboratively, that's what we'll continue to be."

Which is another way of saying the Chamber's real work starts Nov. 5. Senate supermajority or no, Democrats will be in control. The fights coming will demand that business take sides. If one outcome of this year's election is that the business community becomes the loudest voice in Washington for freer markets, so much the better. The Chamber is showing the way.

Casualty of the Surge

But after early challenges, the positive results have become undeniable, as violence in Iraq has plummeted, normality has returned to markets, and neighbors and political accommodations have moved forward. McCain, it turns out, was tragically and gloriously right -- as right as Winston Churchill during his wilderness years. And McCain's come-from-behind nomination victory would have been inconceivable without this prophetic achievement.

This raises the question: If McCain benefited politically from being correct about the surge, why has Barack Obama not been punished for opposing it?

It was, after all, the single most important decision Obama has made as a public official. His judgment? "I am not persuaded that 20,000 additional troops in Iraq is going to solve the sectarian violence there. In fact, I think it will do the reverse." This initial reluctance is perhaps understandable; many shared it. But Obama persisted in his skepticism after the results became evident. Even in July of this year, he argued, "the same factors that led me to oppose the surge still hold true."

...the main reason Obama has escaped the political consequences of his poor judgment on the surge has been the success of the surge itself, which has taken the issue almost entirely off the table. In early December 2006, 44 percent of Americans said that Iraq was the most important problem faced by the president and Congress. This week, 7 percent said Iraq was the most important issue in their choice for president. A relatively peaceful Iraq is not an issue -- even for a candidate who might have thrust it into genocide.

So Obama is left with a pleasing paradox: The successes of a strategy he opposed may have paved his way to the presidency.

And McCain is left with a poignant comfort. He once said he would rather lose an election than lose a war. He may lose an election, in part, because he helped win a war.

McCain for President

Contrarian that I am, I'm voting for John McCain. I'm not talking about bucking the polls or the media consensus that it's over before it's over. I'm talking about bucking the rush of wet-fingered conservatives leaping to Barack Obama before they're left out in the cold without a single state dinner for the next four years.

I stand athwart the rush of conservative ship-jumpers of every stripe -- neo (Ken Adelman), moderate (Colin Powell), genetic/ironic (Christopher Buckley) and socialist/atheist (Christopher Hitchens) -- yelling "Stop!" I shall have no part of this motley crew. I will go down with the McCain ship. I'd rather lose an election than lose my bearings.

First, I'll have no truck with the phony case ginned up to rationalize voting for the most liberal and inexperienced presidential nominee in living memory. The "erratic" temperament issue, for example. As if McCain's risky and unsuccessful but in no way irrational attempt to tactically maneuver his way through the economic tsunami that came crashing down a month ago renders unfit for office a man who demonstrated the most admirable equanimity and courage in the face of unimaginable pressures as a prisoner of war, and who later steadily navigated innumerable challenges and setbacks, not the least of which was the collapse of his campaign just a year ago.

McCain the "erratic" is a cheap Obama talking point. The 40-year record testifies to McCain the stalwart.

Nor will I countenance the "dirty campaign" pretense. The double standard here is stunning. Obama ran a scurrilous Spanish-language ad falsely associating McCain with anti-Hispanic slurs. Another ad falsely claimed that McCain supports "cutting Social Security benefits in half." And for months Democrats insisted that McCain sought 100 years of war in Iraq.

McCain's critics are offended that he raised the issue of William Ayers. What's astonishing is that Obama was himself not offended by William Ayers.

Moreover, the most remarkable of all tactical choices of this election season is the attack that never was. Out of extreme (and unnecessary) conscientiousness, McCain refused to raise the legitimate issue of Obama's most egregious association -- with the race-baiting Rev. Jeremiah Wright. Dirty campaigning, indeed.

The case for McCain is straightforward. The financial crisis has made us forget, or just blindly deny, how dangerous the world out there is. We have a generations-long struggle with Islamic jihadism. An apocalyptic soon-to-be-nuclear Iran. A nuclear-armed Pakistan in danger of fragmentation. A rising Russia pushing the limits of revanchism. Plus the sure-to-come Falklands-like surprise popping out of nowhere.

Who do you want answering that phone at 3 a.m.? A man who's been cramming on these issues for the past year, who's never had to make an executive decision affecting so much as a city, let alone the world? A foreign policy novice instinctively inclined to the flabbiest, most vaporous multilateralism (e.g., the Berlin Wall came down because of "a world that stands as one"), and who refers to the most deliberate act of war since Pearl Harbor as "the tragedy of 9/11," a term more appropriate for a bus accident?

Or do you want a man who is the most prepared, most knowledgeable, most serious foreign policy thinker in the United States Senate? A man who not only has the best instincts but has the honor and the courage to, yes, put country first, as when he carried the lonely fight for the surge that turned Iraq from catastrophic defeat into achievable strategic victory?

There's just no comparison. Obama's own running mate warned this week that Obama's youth and inexperience will invite a crisis -- indeed a crisis "generated" precisely to test him. Can you be serious about national security and vote on Nov. 4 to invite that test?

And how will he pass it? Well, how has he fared on the only two significant foreign policy tests he has faced since he's been in the Senate? The first was the surge. Obama failed spectacularly. He not only opposed it. He tried to denigrate it, stop it and, finally, deny its success.

The second test was Georgia, to which Obama responded instinctively with evenhanded moral equivalence, urging restraint on both sides. McCain did not have to consult his advisers to instantly identify the aggressor.

Today's economic crisis, like every other in our history, will in time pass. But the barbarians will still be at the gates. Whom do you want on the parapet? I'm for the guy who can tell the lion from the lamb.

letters@charleskrauthammer.com

Highlights from Bono's speech at the California Women's Conference on 10/22/08

Sarah Palin ‘a-maze-ing’ in Whitehouse cornfield

Sarah Palin Corn Maze

Would the Last Honest Reporter Please Turn On the Lights?

Editor's note: Orson Scott Card is a Democrat and a newspaper columnist, and in this opinion piece he takes on both while lamenting the current state of journalism.

An open letter to the local daily paper — almost every local daily paper in America:

I remember reading All the President's Men and thinking: That's journalism. You do what it takes to get the truth and you lay it before the public, because the public has a right to know.

This housing crisis didn't come out of nowhere. It was not a vague emanation of the evil Bush administration.

It was a direct result of the political decision, back in the late 1990s, to loosen the rules of lending so that home loans would be more accessible to poor people. Fannie Mae and Freddie Mac were authorized to approve risky loans.

What is a risky loan? It's a loan that the recipient is likely not to be able to repay.

The goal of this rule change was to help the poor — which especially would help members of minority groups. But how does it help these people to give them a loan that they can't repay? They get into a house, yes, but when they can't make the payments, they lose the house — along with their credit rating.

They end up worse off than before.

This was completely foreseeable and in fact many people did foresee it. One political party, in Congress and in the executive branch, tried repeatedly to tighten up the rules. The other party blocked every such attempt and tried to loosen them.

Furthermore, Freddie Mac and Fannie Mae were making political contributions to the very members of Congress who were allowing them to make irresponsible loans. (Though why quasi-federal agencies were allowed to do so baffles me. It's as if the Pentagon were allowed to contribute to the political campaigns of Congressmen who support increasing their budget.)

Isn't there a story here? Doesn't journalism require that you who produce our daily paper tell the truth about who brought us to a position where the only way to keep confidence in our economy was a $700 billion bailout? Aren't you supposed to follow the money and see which politicians were benefiting personally from the deregulation of mortgage lending?

I have no doubt that if these facts had pointed to the Republican Party or to John McCain as the guilty parties, you would be treating it as a vast scandal. "Housing-gate," no doubt. Or "Fannie-gate."

Instead, it was Senator Christopher Dodd and Congressman Barney Frank, both Democrats, who denied that there were any problems, who refused Bush administration requests to set up a regulatory agency to watch over Fannie Mae and Freddie Mac, and who were still pushing for these agencies to go even further in promoting sub-prime mortgage loans almost up to the minute they failed.

As Thomas Sowell points out in a TownHall.com essay entitled "Do Facts Matter?" ( http://snipurl.com/457townhall_com] ): "Alan Greenspan warned them four years ago. So did the Chairman of the Council of Economic Advisers to the President. So did Bush's Secretary of the Treasury."

These are facts. This financial crisis was completely preventable. The party that blocked any attempt to prevent it was ... the Democratic Party. The party that tried to prevent it was ... the Republican Party.

Yet when Nancy Pelosi accused the Bush administration and Republican deregulation of causing the crisis, you in the press did not hold her to account for her lie. Instead, you criticized Republicans who took offense at this lie and refused to vote for the bailout!

What? It's not the liar, but the victims of the lie who are to blame?

Now let's follow the money ... right to the presidential candidate who is the number-two recipient of campaign contributions from Fannie Mae.

And after Freddie Raines, the CEO of Fannie Mae who made $90 million while running it into the ground, was fired for his incompetence, one presidential candidate's campaign actually consulted him for advice on housing.

If that presidential candidate had been John McCain, you would have called it a major scandal and we would be getting stories in your paper every day about how incompetent and corrupt he was.

But instead, that candidate was Barack Obama, and so you have buried this story, and when the McCain campaign dared to call Raines an "adviser" to the Obama campaign — because that campaign had sought his advice — you actually let Obama's people get away with accusing McCain of lying, merely because Raines wasn't listed as an official adviser to the Obama campaign.

You would never tolerate such weasely nit-picking from a Republican.

If you who produce our local daily paper actually had any principles, you would be pounding this story, because the prosperity of all Americans was put at risk by the foolish, short-sighted, politically selfish, and possibly corrupt actions of leading Democrats, including Obama.

If you who produce our local daily paper had any personal honor, you would find it unbearable to let the American people believe that somehow Republicans were to blame for this crisis.

There are precedents. Even though President Bush and his administration never said that Iraq sponsored or was linked to 9/11, you could not stand the fact that Americans had that misapprehension — so you pounded us with the fact that there was no such link. (Along the way, you created the false impression that Bush had lied to them and said that there was a connection.)

If you had any principles, then surely right now, when the American people are set to blame President Bush and John McCain for a crisis they tried to prevent, and are actually shifting to approve of Barack Obama because of a crisis he helped cause, you would be laboring at least as hard to correct that false impression.

Your job, as journalists, is to tell the truth. That's what you claim you do, when you accept people's money to buy or subscribe to your paper.

But right now, you are consenting to or actively promoting a big fat lie — that the housing crisis should somehow be blamed on Bush, McCain, and the Republicans. You have trained the American people to blame everything bad — even bad weather — on Bush, and they are responding as you have taught them to.

If you had any personal honor, each reporter and editor would be insisting on telling the truth — even if it hurts the election chances of your favorite candidate.

Because that's what honorable people do. Honest people tell the truth even when they don't like the probable consequences. That's what honesty means . That's how trust is earned.

Barack Obama is just another politician, and not a very wise one. He has revealed his ignorance and naivete time after time — and you have swept it under the rug, treated it as nothing.

Meanwhile, you have participated in the borking of Sarah Palin, reporting savage attacks on her for the pregnancy of her unmarried daughter — while you ignored the story of John Edwards's own adultery for many months.

So I ask you now: Do you have any standards at all? Do you even know what honesty means?

Is getting people to vote for Barack Obama so important that you will throw away everything that journalism is supposed to stand for?

You might want to remember the way the National Organization of Women threw away their integrity by supporting Bill Clinton despite his well-known pattern of sexual exploitation of powerless women. Who listens to NOW anymore? We know they stand for nothing; they have no principles.

That's where you are right now.

It's not too late. You know that if the situation were reversed, and the truth would damage McCain and help Obama, you would be moving heaven and earth to get the true story out there.

If you want to redeem your honor, you will swallow hard and make a list of all the stories you would print if it were McCain who had been getting money from Fannie Mae, McCain whose campaign had consulted with its discredited former CEO, McCain who had voted against tightening its lending practices.

Then you will print them, even though every one of those true stories will point the finger of blame at the reckless Democratic Party, which put our nation's prosperity at risk so they could feel good about helping the poor, and lay a fair share of the blame at Obama's door.

You will also tell the truth about John McCain: that he tried, as a Senator, to do what it took to prevent this crisis. You will tell the truth about President Bush: that his administration tried more than once to get Congress to regulate lending in a responsible way.

This was a Congress-caused crisis, beginning during the Clinton administration, with Democrats leading the way into the crisis and blocking every effort to get out of it in a timely fashion.

If you at our local daily newspaper continue to let Americans believe — and vote as if — President Bush and the Republicans caused the crisis, then you are joining in that lie.

If you do not tell the truth about the Democrats — including Barack Obama — and do so with the same energy you would use if the miscreants were Republicans — then you are not journalists by any standard.

You're just the public relations machine of the Democratic Party, and it's time you were all fired and real journalists brought in, so that we can actually have a news paper in our city.

This article first appeared in The Rhinoceros Times of Greensboro, North Carolina, and is used here by permission.

Biden's Traveling Press Corps Finds Little Opportunity To Ask Him Questions

The handful of reporters from Biden’s national press corps who have followed him incessantly for two months have not had the opportunity to ask questions regarding the "crisis" matter - even to allow Biden to clarify his remarks - because he has not taken questions or held a press availability with his press corps since Sept. 7.

...And to belatedly answer Biden’s question, it has been 55 days since he held a press conference. He has held two since being named Obama’s running mate.

Biden has also not taken questions from voters in a town hall style setting since Sept. 10 in Nashua, New Hampshire, when he told a supporter that Hillary Clinton might have been a better pick for vice president.

Since then, Biden has only held “community gatherings” and “rallies” where he makes a speech and chats briefly with supporters on the ropeline under the blare of music, no questions asked. Even there, Biden says very little after a digital recorder caught him making statements on clean coal that did not coincide with Obama’s energy policies.

He told Jay Leno on “The Tonight Show” that it was the reason he stays mum when greeting voters, hoping to avoid making comments that might be publicized and used against Obama.

"Look, I've made many a gaffe in my life, and I suspect I'll make a whole lot more," he told Leno. "But you do worry. You know, I was on a rope…you go down what they call a rope line. You make a speech; there's four, five, six thousand people, and they line up and you shake hands. And everybody has, not everybody, a lot of people have cameras, and they have these little video phones…so I learned to just go, ‘Mm, mm, mm, mm.’ Walk down the line. I don't say anything anymore."

On the day of the final debate, reporters had to interrupt Biden as he waited for a hamburger during a photo-op at a diner in Ohio to ask questions.

Asked dozens of times when Biden would take formally questions from the national reporters who have been following him, Wade said Biden instead favors one-on-one interviews and would hold a press availability “when we have some news to make.”

BIDEN'S BUNGLES: A BLATANT BIAS

Sarah Palins' Interview With People

Our Next President and the Perfect Economic Storm

With their economies in recession and a credit crunch steepening the slide, policy makers around the world race to contain the damage. Calls for expansion of government spending, taxes and regulation, even for radical revision of our economic system, an end to capitalism, are rampant.

David Klein

The response to those calls will be shaped to an unusual degree by the next president, given the big spending, high tax, regulatory agenda of the Democratic majorities in Congress. Presidents, with occasional exceptions, accommodate a Congress controlled by their party (George W. Bush) and only triangulate to the center when the opposition controls it (Bill Clinton).

The next few years will determine whether currently contemplated policy changes round off what their proponents view as the rough edges of the Reagan revolution and capitalism, or are a bridge to more radical re-engineering of the economy. If the latter, the eventual economic costs of permanently lower living standards -- 30% lower at European levels of taxes, spending and regulation -- would be far greater than those caused by even a severe recession.

The current situation was created by a perfect storm of mutually reinforcing trends and policy mistakes: loose monetary policy (years of negative real interest rates in a growing economy); socially engineered housing policy (the Community Reinvestment Act, Fannie Mae and Freddie Mac, HUD's no-money-down mortgages); the rapid growth of leverage, opaque and technically deficient derivatives, and the shadow banking system; fragmented regulation, lax diligence, poor governance, fraud; and an oil price shock. The result: a housing bubble bursting into recession.

The best that can be done now is to limit the damage. Banks won't expand their lending into a recession, but they can slow their natural lending contraction. Moreover, the recent dramatic government interventions in the economy carry three long-run costs that must be minimized: the direct financial costs of the interventions, a first step toward which would be made by letting unhealthy, nonsystemically important institutions fail; the greater moral hazard from the bailouts, the guarantees, the expanded deposit insurance, that increase the likelihood of future crises; and the potential bridging to, and misguided justification of, more permanent expansions of government in the economy.

The next president and Treasury secretary should make clear their intention to exit their new interventionist role in favor of private capital, and that the revenues from premiums, dividends, asset sales and profits on investments will not be used to fund pet projects and new initiatives. We must not sow the seeds of what will be, a decade on, the next government social engineering fiasco, with regulation, mandates, subsidies, taxes and spending.

Unfortunately, the same political forces that socially engineered a disastrous mortgage market now have other industries in their sights: pharmaceuticals, health care, energy. Barack Obama enthusiastically endorses such policies; John McCain less so. The big risks are higher taxes, protectionism, regulatory micromanagement, vast new spending, subsidies and mandates. Recall that the stock market crash of 1929, and the ensuing recession, were turned into the Great Depression by tax increases and protectionism (and bad monetary policy).

We do need policies to restore confidence in our fiscal and financial future. These include controlling future government entitlement spending to prevent sliding into a social welfare state; keeping tax rates as low as possible; promoting an open, rules-based trading system; reforming financial regulation for comprehensive and rapid disclosure, oversight, and capital adequacy monitoring. We do not need a regulatory morass that will stifle innovation.

All of this will be doubly difficult in the current economic and political environment. Mr. McCain's proposals might stall in a Democratic Congress, but at least are mostly consistent with sound economics. Mr. Obama's are less so.

For example, the Obama tax plan calls for large tax increases, including raising rates on dividends and capital gains to 20% from 15%. This will make it harder for financial firms to raise private capital, and force greater reliance on public capital. Worse, his refundable tax credits will raise the share of those making no contribution to the funding of general government to 48% from 38%, hastening, perhaps cementing, the unhealthy budgetary dynamic of a majority of voters receiving more in public payments than they pay in taxes.

While Mr. McCain proposes serious spending control, achieving it would not be easy. Mr. Obama says he'll go through the budget line by line, yet proposes large increases in social spending, paid for by an assumed Iraq peace dividend. President Clinton decreased military spending rapidly (38% as a percentage of GDP), leaving major holes in our military. It's still a dangerous world; we should not repeat that mistake. Mr. Obama's Social Security proposal is to turn to taxes first and rule out even a small increase in retirement age, no matter how much life expectancy increases.

Mr. Obama's professed protectionism during the primaries has been softened, as have his most extreme tax positions. But if elected, he could help restore confidence in the global economy by repudiating his more wild ideas, such as unilaterally renegotiating the North American Free Trade Agreement, and by making substantive proposals such as expanding Nafta to the European Union. Saying he is not a protectionist is not enough; nor is saying he is cutting taxes by counting spending increases as tax cuts. He could help financial markets and the economy by pledging to delay any tax hikes until the economy is healthy and to veto any additional ones from Congress.

Capitalism has been history's greatest force for wealth creation, economic opportunity and improvement in the human condition. It doesn't come with guarantees against busts as well as booms, although better policy can limit the swings. For those who think the current financial crisis is primarily due to our limited government, consider that mixed economies with a bigger government presence, such as the U.K. and France, have their own burst housing bubbles and recessions. The Japanese government's micromanagement of its financial system didn't prevent a financial crisis at the end of its real-estate bubble.

For those who blame deregulation, it was free-market types who tried to rein in Fannie and Freddie; it was the independent investment banks, not those inside commercial banks, that failed, and failed in inverse order of their leverage ratios, which were allowed to grow as part of extending regulation by the Securities and Exchange Commission to investment bank holding companies in addition to their brokerage subsidies. That's hardly a case for government micromanagement of the financial system, a social welfare state or a planned economy, not to mention the prima facie case against them made by Japan's lost decade of stagnation, and the 30% lower living standards in Europe than the U.S.

We still have a tremendously productive labor force, great technology, and lots of tangible capital. The economy will return to health, to paraphrase the Founding Fathers, if we can keep our economic system largely intact. That's the vision, judgment and backbone we need in the next president as he navigates these difficult times.

Mr. Boskin, former chairman of the President's Council of Economic Advisers (1989-1993), is a Stanford professor, Hoover Institution senior fellow and economic adviser to Sen. McCain.

An Obamanomics Preview: Tax and spend, but not in that order

Hatin' Palin

The abuse being heaped on Sarah Palin is such a cheap shot.

The complaint against the Alaska governor, at its most basic, is that she doesn't qualify for admission to the national political fraternity. Boy, that's rich. Behold the shabby frat house that says it's above her pay grade.

NBC

Sarah Palin appears with Lorne Michaels on Saturday Night Live.

Congress has the lowest approval rating ever registered in the history of polling (12%!). She isn't the reason polls are showing people want the entire Congress fired, with many telling pollsters they themselves could do a better job.

Sarah Palin didn't design a system of presidential primaries whose length and cost ensures that only the most obsessional personalities will run the gauntlet, while a long list of effective governors don't run.

These rules have wasted the electorate's time the past three presidential elections, by filling the debates with such zero-support candidates as Dennis Kucinich, Mike Gravel, Al Sharpton, Duncan Hunter, Chris Dodd, Joe Biden (8,000 total votes), Wesley Clark and Alan Keyes.

Out of this process has fallen a Democratic nominee who entered the U.S. Senate in 2005 fresh off a stint in the Illinois state legislature, with next to no record of political accomplishment. He may be elected mainly because, in Colin Powell's word, he is thought to be "transformational." One may hope so.

By not bothering to look very deeply at the details beneath either candidate's governing proposals, the media have created a lot of downtime to take free kicks at Gov. Palin. My former colleague, Tunku Varadarajan, has compiled a glossary of Palin invective, and I've added a few: "Republican blow-up doll," "idiot," "Christian Stepford wife," "Jesus freak," "Caribou Barbie," "a dope," "a fatal cancer to the Republican Party," "liar," "a national disgrace" and "her pretense that she is a woman."

If American politics is at low ebb, it is because so many of its observers enjoy working in its fetid backwash.

The primary discomfort with Gov. Palin is the notion that she doesn't have sufficient experience to be president, that Sen. McCain should have picked a Washington hand seasoned in the ways of the world. Such as? Here's an opinion poll question:

If as Joe Biden suggests the U.S. is likely to be tested by a foreign enemy next year, who of the following would you rather have dealing with it in the Oval Office: Nancy (of Damascus) Pelosi, Harry Reid, John Edwards, Joe (the U.S. drove Hezbollah out of Lebanon) Biden, Mike Huckabee, Geraldine Ferraro, Tom DeLay, Jimmy Carter or Sarah Palin?

My pick? Gov. Palin, surely the most grounded, common-sense person on that list of prime-time politicians.

The established political pros let the selection process come to this. Presidential candidates such as John McCain and Barack Obama have become untethered from the discipline of party institutions, largely because the parties have lost coherence. So we get celebrity candidates made famous, fundable and electable by dint of their access to the Beltway media. For voters, this election is a national Hail Mary.

For nearly two years, all the major candidates have rotated through our lives as solitary personalities attended by careerist campaign professionals. Barack, Hillary, Rudy, Mitt, Mike, McCain. When the moment arrived to pick a running mate, input from the parties was minimal. That famous party boss, Caroline Kennedy, advised Barack Obama. They picked a three-decade denizen of the Senate. John McCain's obligation was himself and his endless slog to this big chance.

The quick surge of party-wide excitement and campaign contributions after his selection of Sarah Palin made clear that the McCain candidacy was moribund and headed for a low-turnout debacle. If he had picked any of the plain-vanilla men on his veep short list -- Pawlenty, Sanford, Romney or Lieberman -- they'd have won approval from the media's college of cardinals, and killed his campaign.

The stoning of Sarah Palin has exposed enough cultural fissures in American politics to occupy strategists full-time until 2012. We now see there is a left-to-right elite centered in New York, Washington, Hollywood and Silicon Valley who hand down judgments of the nation's mortals from their perch atop the Bell Curve.

It seems only yesterday that the most critical skill in presidential politics was being able to connect to people in places like Bronko's bar or Saddleback Church. When Gov. Palin showed she excelled at that, the goal posts suddenly moved and the new game was being able to talk the talk in London, Paris, Tehran or Moscow. She looks about a half-step behind Sen. Obama on that learning curve.

Lorne Michaels, the executive producer of "Saturday Night Live," lives on the forward wave of American life. This week he gave his view of Sarah Palin to EW.com: "I think Palin will continue to be underestimated for a while. I watched the way she connected with people, and she's powerful. Her politics aren't my politics. But you can see that she's a very powerful, very disciplined, incredibly gracious woman. This was her first time out and she's had a huge impact. People connect to her."

Uh-oh. Sounds like the cancer could be in remission.