Powell endorses Obama as 'transformational'

Mike Allen, Jonathan Martin Mike Allen, Jonathan Martin Sun Oct 19, 9:55 am ET

Retired General Colin L. Powell, one of the country's most respected Republicans, stunned both parties on Sunday by strongly endorsing Sen. Barack Obama (D-Ill.) for president on NBC's "Meet the Press" and laying out a blistering, detailed critique of the modern GOP.

Powell said the election of Obama would "electrify the world."

"I think he is a transformational figure," Powell said. "He is a new generation coming ... onto the world stage and on the American stage. And for that reason, I'll be voting for Senator Barack Obama."

As a key reason, Powell said: "I would have difficulty with two more conservative appointments to the Supreme Court, but that's what we'd be looking at in a McCain administration."

Powell, once considered likely to be the nation's first African-American presidential nominee, said his decision was not about race.

Moderator Tom Brokaw said: "There will be some ... who will say this is an African-American, distinguished American supporting another African-American because of race."

Powell, who last year gave Republican John McCain's campaign the maximum $2,300, replied: "If I had only had that in mind, I could have done this six, eight, 10 months ago. I really have been going back and forth between somebody I have the highest respect and regard for, John McCain and somebody I was getting to know, Barack Obama. And it was only in the last couple of months that I settled on this."

"I can't deny that it will be a historic event when an African-American becomes president," Powell continued, speaking live in the studio. "And should that happen, all Americans should be proud — not just African-American, but all Americans — that we have reached this point in our national history where such a thing could happen. It would also not only electrify the country, but electrify the world."

Obama communications director Robert Gibbs said the two men spoke for 10 minutes at 10 a.m., and that the candidate thanked Powell for his endorsement and said "he looked forward to taking advantage of his advice in the next two weeks and hopefully over the next four years."

Obama spokeswoman Jen Psaki said the campaign had not been told of the endorsement: "We didn’t know until General Powell spoke on 'Meet The Press' ."

Powell, making his 30th appearance on "Meet the Press," said he does not plan to campaign for Obama. He led into his endorsement by saying: "We've got two individuals — either one of them could be a good president. But which is the president that we need now — which is the individual that serves the needs of the nation for the next period of time.

"And I come to the conclusion that because of his ability to inspire, because of the inclusive nature of his campaign, because he is reaching out all across America, because of who he is and his rhetorical abilities — and you have to take that into account — as well as his substance — he has both style and substance, he has met the standard of being a successful president, being an exceptional president."

Powell said that he is "troubled" by the direction of the Republican Party, and said he began to doubt McCain when he chose Alaska Gov. Sarah Palin as his running mate.

"Not just small towns have values," he said, responding to one of Palin's signature lines.

"She's a very distinguished woman, and she's to be admired," he said. "But at the same, now that we have had a chance to watch her for some seven weeks, I don't believe she's ready to be president of the United States, which is the job of the vice president. And so that raised some question in my mind as to the judgment that Senator McCain made."

The endorsement is likely to help the Illinois senator convince skeptical centrists that he is ready to handle the challenges of commander in chief, and undercuts McCain argument that he is better qualified on national-security issues.

The Arizona senator, appearing on "Fox News Sunday," sought to minimize the endorsement by noting his support from other former secretaries of state and retired military flag officers.

"This doesn’t come as a surprise," McCain said. "But I'm also very pleased to have the endorsement of four former secretaries of state ... and I'm proud to have the endorsement of well over 200 retired generals and admirals. I respect and continue to respect and admire Secretary Powell."

While McCain only reiterated his respect for Powell when asked about the move, others in the GOP were more candid.

One prominent conservative who knows both McCain and Powell said that for all the secretary of state's criticism of McCain and his praise of Obama, the move had less to do with the two candidates for president than the current occupant of the Oval Office.

"Powell cares a lot about his reputation with Washington elites and he thinks he was badly damaged by his relationship with the Bush administration," said this Republican. "So this is a way to make up for what he regarded as not being treated well by the Bush administration, not being given the due deferenece he thinks he deserves."

And that Powell would make his decision known in the closing weeks of the election, as it becomes increasingly clear that Obama is the favorite, reflects a calculated political move, says this source.

"Let's be honest – do we think Powell would be doing this if Obama had been trailing six or seven points in the polls?" the source asked, deeming Powell's endorsement "a Profile in Conventional Wisdom."

A friend of the former secretary of state sharply dismissed the idea that Powell's move had anything to do with making up for his service in the Bush years.

"Anybody who is making the argument about 'rehabiliation' was not listening to what he had say today," said the friend, suggesting Powell clear that he was unhappy with the state of the party. "It's absolute horseshit."

Rush Limbaugh suggested Powell's move was very much related to Obama's status as the first African-American with a chance to become president.

"Secretary Powell says his endorsement is not about race," Limbaugh wrote in an email. "OK, fine. I am now researching his past endorsements to see if I can find all the inexperienced, very liberal, white candidates he has endorsed. I'll let you know what I come up with.

"I was also unaware of his dislike for John Roberts, Clarence Thomas, Samuel Alito, Anthony Kennedy and Antonin Scalia. I guess he also regrets Reagan and Bush making HIM a 4-star and Secretary of State AND appointing his son to head the FCC. Yes, let's hear it for transformational figures."

But others in the party were less dismissive, acknowledging the heft of the respected retired four-star general and the popularity he enjoys across the country.

"The Powell endorsement is a big deal," said Scott Reed, Bob Dole's campaign manager in 1996 and a close friend of McCain campaign manager Rick Davis. "It has been bantered about since August, and shows both Powell and Obama know how to make an impact in the closing days of a tight campaign."

"What that just did in one sound bite -- and I assume that sound bite will end up in an ad -- is it eliminated the experience factor," said former House Speaker Newt Gingrich, a Republican, in an appearance on ABC's This Week with George Stephanopoulos. "How are you going to say the former Chairman of the Joint Chiefs, the former National Security Adviser, former Secretary of State was taken in?"

Powell, 71, also used his Meet the Press appearance to criticize McCain and his campaign for invoking the former domestic terrorist William Ayers.

"Sen. McCain says he a washed-up old terrorist—then why does he keep talking about him?" Powell asked.

"They're trying to connect [Obama] to some kind of terrorist feelings, and I think that's inappropriate," Powell said. "Now I understand what politics is all about — I know how you can go after one another. And that's good. But I think this goes too far. And I think it has made the McCain campaign look a little narrow. It's not what the American people are looking for. And I look at these kinds of approaches to the campaign, and they trouble me. And the party has moved even further to the right, and Governor Palin has indicated a further rightward shift."

Powell said he has "heard senior members of my own party drop the suggestion [that Obama's] a Muslim and might be associated with terrorists."

"This is not the way we should be doing it in America. I feel strongly about this particular point," Powell said. "We have got to stop polarizing ourselves in this way. And John McCain is as non-discriminatory as anyone I know. But I'm troubled about the fact that within the party, we have these kinds of expressions."

Powell, a four-star Army general, was national security adviser to President Ronald Reagan; chairman of the Joint Chiefs of Staff during the 1991 Persian Gulf war, when George H.W. Bush was president; and was President George W. Bush’s first secretary of State.

Powell has consulted with both Obama and McCain, and the general’s camp had indicated in the past that he would not endorse.

Powell said that as he watched McCain, the Republican “was a little unsure as to how to deal with the economic problems that we were having, and almost every day, there was a different approach to the problem, and that concerned me, sensing that he didn't have a complete grasp of the economic problems that we had."

Powell said a big job of the new president will be “conveying a new image of American leadership, a new image of America’s role in the world.”

“I think what the president has to do is to start using the power of the Oval Office and the power of his personality to convince the American people and to convince the world that America is solid, America is going to move forward … restoring a sense of purpose,” he said.

"This Powell endorsement is the nail in the coffin," said one Republican official, speaking anonymously to offer candid thoughts about the party's nominee. "Not just because of him, but the indictment he laid out of the McCain campaign."

How to Cure This Sick System

Fact and Comment

How to Cure This Sick System

Steve Forbes 10.06.08, 12:00 AM ET


Not even during the Great Depression did we witness what is now unfolding--a sizable number of big financial institutions going under. What enabled their taking on so much debt and so many questionable assets was, primarily, the easy-money policy of the Federal Reserve. Chairmen Alan Greenspan and Ben Bernanke created massive amounts of excess liquidity. If the dollar had been kept stable relative to gold, as it was between the end of WWII and the late 1960s, the scale of the bingeing in recent years would have been impossible.

The first prescription for a cure is to formally strengthen the dollar and announce it publicly. A year ago August the price of gold was more than $650 per ounce. In late 2003 it had breached $400. The Fed should declare that its goal for gold is around $500 to $550. That would stabilize the buck--and stability is essential if animal spirits and risk taking are to revive.

Also of immediate urgency is for regulators to suspend any mark-to-market rules for long-term assets. Short-term assets should not be given arbitrary values unless there are actual losses. The mark-to-market mania of regulators and accountants is utterly destructive. It is like fighting a fire with gasoline.

Think of the mark-to-market madness this way: You buy a house for $350,000 and take out a $250,000 30-year fixed-rate mortgage. Your income is more than adequate to make the monthly payments. But under mark-to-market rules the bank could call up and say that if your house had to be sold immediately, it would fetch maybe $200,000 in such a distressed sale. The bank would then tell you that you owe $250,000 on a house worth only $200,000 and to please fork over the $50,000 immediately or else lose the house.

Absurd? Obviously. But that's what, in effect, is happening today. Thus institutions with long-term assets are having to drastically reprice them downward. And so the crisis feeds on itself.
The SEC should immediately reverse its foolish decision to get rid of the so-called uptick rule in short-selling. That would provide a small road bump to the short-selling that's helping to destroy financial institutions.

At the same time the SEC should promulgate an emergency rule (which we thought was already the rule): No naked short-selling. That is, you have to own or borrow shares in a company before you can short it. The rules should make clear that short-sellers must have ample documentation proving they truly possess the shares at the time of the short sale. Otherwise, each violation will result in heavy fines. That wouldn't be a road bump but a wall of Everest-like proportions.

Regulators should also be told to instruct banks to keep their solvent customers solvent. The last thing the economy needs right now is for the banking system to seize up.
The federal government should also consider setting up a new Resolution Trust Corp., which was devised during the savings and loan crisis nearly 20 years ago as a dumping ground for bad S&L assets. Today's bad assets could then be liquidated in an orderly way. And, finally, the financial industry should be encouraged to create new exchanges for exotic instruments. This would result in the standardization of these things, which would mean more transparency.

These steps would quickly revive financial markets. Already mortgage rates are coming down. It won't be long before American homeowners start an avalanche of refinancings, which would be an enormous boon to confidence and the economy.

What Makes Our Ever Changing 400 List Possible

Prophet of Innovation--by Thomas K. McCraw (Harvard University Press, $35). An excellent, thorough and smoothly written biography of Joseph Schumpeter, the greatest economist of the 20th century. Too bad most politicos--and economists--don't fully grasp his insights.

Born in 1883 in a province of the old Austro-Hungarian Empire that is now part of the Czech Republic, Schumpeter recognized at a young age that the critical factor in economic progress was the entrepreneur, the innovator. To him it was the risk taker who brought about new products and services and more efficient ways of making and doing things. A free-market, capitalist economy, he emphasized, meant constant change, often disruptive and disorienting to traditional ways of doing things. Competition wasn't just the jousting of existing firms that had similar products but also encompassed the threat that came from a truly new product, new technology or new type of organization.

Schumpeter made the distinction between an inventor and an innovator: The innovator takes an idea or product and figures out how to produce it efficiently and profitably. His term describing one process, "creative destruction," has become a catchphrase of our own era.

Schumpeter's perceptions here were profound, although most of his time's economists--and politicians--downplayed or ignored them. Today, though, things seem different. Even Demo-crats occasionally pay lip service to the risk takers' and entrepreneurs' importance to economic growth. Yet Democratic policies, such as raising the cost of capital and reducing its availability, would devastate them. Similarly, while economists doff their caps to Schumpeter, their professional research downplays innovation because it is impossible to quantify and not conducive to mathematical models. So the appreciation of this genius is still superficial.

One drawback is that Schumpeter was not a "feel-good" economist like Keynes, whose apostles believed that properly manipulating government fiscal and monetary tools would generate perpetual prosperity, with nary a bust or a bout of irrational exuberance. Innovation, however, is not a smooth process but comes in fits and starts. That's why, Schumpeter pointed out, a healthy economy is subject to cycles of boom and bust.

In the early 1980s, for example, personal computers became the hot new product. Then came the inevitable shakeout. Many companies, such as Atari, Commodore and Osborne, bit the dust.

But PCs became more powerful. Innovators learned to network PCs, enabling them to easily replace expensive mainframe computers with the significantly cheaper and more versatile PCs.

In the early 20th century the automobile went through similar booms and busts: Before World War I there were more than 300 auto manufacturers in the U.S. Another vivid testimony to innovation's disruption and destruction is today's fast-shrinking newspaper industry, a victim of the Internet.

Schumpeter recognized that a dynamic economy creates wide inequality. A successful entrepreneur, his investors and even some of his employees (think Microsoft) will get rich.

However, this is not the kind of static inequality one sees in semifeudalistic, oligarchic economies that exist in South America and elsewhere, where the same handful of people are wealthy and everyone else struggles. A truly capitalist economy will see the players change repeatedly. Facts back up Schumpeter's insight. IRS data show that 75% of the very top income earners in the mid-1990s are no longer in that category.

Growing up in a turbulent part of Europe made Schumpeter realize that life did not follow a smooth-running, gentle path. In contrast, Britons such as John Maynard Keynes tended to see the economy in more static terms. Even American economists tended toward a rather static view of the world. Harvard's late, once renowned John Kenneth Galbraith wrote a book in the 1960s whose thesis was that major corporations such as Ford Motor Co. were the epitome of economic development and lived by their own laws rather than those of the marketplace. Today once formidable giants, such as Ford and General Motors, are struggling just to stay alive financially.

Schumpeter was a genius at dissecting the ideologies and prejudices of other economists. Karl Marx, for example, also observed the dynamic nature of entrepreneurial capitalism. But he mistakenly concluded that this kind of change would inevitably, inexorably impoverish the workers. Instead--as Schumpeter laid out time and time again--an entrepreneurial economy means more people earning more and enjoying a higher standard of living. Adam Smith celebrated the importance of free trade, low taxes, property rights, the enforcement of contracts in enabling people to get richer. But he had very little appreciation of the crucial role individual entrepreneurs and innovators play in the process.

Schumpeter acknowledged that governments would have to play a role--one hopes a constructive one--in creating conditions in which creative destruction could play out. In the U.S., for instance, farm subsidies helped ameliorate the political backlash when technology and manufacturing sharply reduced employment in the agricultural sector. A century ago one in 4
Americans made his or her living in agriculture; today it's fewer than one in 75.

What made Schumpeter especially insightful was that he was truly a multidisciplinary individual. He was well versed in politics, sociology and history. By the time he finished his secondary education he had mastered six languages. He would look upon the bulk of today's economists, with their obsession with numbers and regression analysis, as hideously narrow-minded and suffering from academic constipation.

As he grew older, Schumpeter became pessimistic about democratic capitalism. He observed that the sons and daughters of successful entrepreneurs often became leftists or outright socialists. His own varied life undoubtedly added to his gloomy outlook. He had moved numerous times and seen convulsions aplenty. World War I broke up the Austro-Hungarian Empire, creating, among other things, the state of Austria--what wags dubbed "a bureaucracy without an empire." After the war Schumpeter served briefly as its finance minister. It was a disastrous experience. Knowing the right things to do does not automatically make them politically possible.

He lasted less than a year in the job. Only when inflationary conditions worsened did subsequent ministers adopt some of his policies. The rise of Nazism in Germany--Schumpeter taught there until the early 1930s, at which time he accepted an offer from Harvard--was a personally vivid example of how a great nation can self-destruct and threaten civilization itself.

Schumpeter would certainly take a dim view of what many politicians in America are offering up these days. But the actual history of Britain and the U.S., after his death in 1950, might have lightened the darkness of his long-term outlook. As long as a society remains free, entrepreneurs can prevent ossification. The U.S.' great comeback under President Ronald Reagan is one vivid example, as is Britain's under Prime Minister Margaret Thatcher. Once taxes were cut and structural reforms made, Britain morphed from the sick man of Europe into Europe's most dynamic large economy. Schumpeter would also have been astonished by the fall of the Soviet Union.

www.ruffcommunications.com

Battleground Update: The Red States Get Redder, The Blue States Get Purpler

Andrew Romano

The current Real Clear Politics electoral map reflects the latest polls; it is not a prediction of the outcome

One week ago today, I launched Stumper's general-election coverage with an in-depth look at where the "Race for the White House" stood in the wake of the Democratic and Republican nominating conventions. While the national polls had swung about 9 points in John McCain's direction since the Democrats left Denver, the Real Clear Politics electoral map still tilted every so slightly toward Barack Obama, 273 to 265. But the Illinois senator's slim lead was hardly set in stone--as I noted at the time. "No battleground state polls have been released since the second day of the Republican Convention," I wrote. "If the national surveys are right and McCain has in fact received a 5-point post-St. Paul bounce, that enthusiasm will almost certainly trickle down." I promised to revisit the map once the dust had settled.

Well, now it has. And what it shows is ... drumroll, please ... more of the same. According to Real Clear Politics, this week's map, posted above, is identical to last week's. Obama is still leading 273 electoral votes to 265.

Does that mean that Obama has emerged unscathed? Hardly. The Democratic nominee may have managed to maintain his razor-thin eight-vote margin--but he's done it by the skin of his teeth. Even if McCain has yet to flip a state, a closer look at the latest battleground polling reveals that the Arizonan's gains have, in fact, trickled down. They've had two effects. First, a handful of red states that Obama once hoped to win now seem either out of reach or more favorable to McCain, whether temporarily or permanently. And second, McCain is suddenly within striking distance in a group of Blue States where Obama until recently enjoyed a comfortable lead. The result: a campaign that once boasted about redrawing the electoral map by targeting an unprecedented 18 battlegrounds has been forced to focus on a more familiar swath of states--and even play defense in places it had hoped to win easily. In the last week, the Red States have gotten redder--and the Blue States have gotten purpler.

Take Montana and Georgia. In 2004, George W. Bush won the former by 20.5 percent and the later by 16.6 percent. But after clinching the Democratic nomination in early June, Obama put both states on his target list and deployed hundreds of volunteers and staffers to Atlanta and Helena to open field offices and register voters. He had reason for optimism. In early July, Rasmussen showed Obama ahead in Montana by 5 points; at the same time, an Insider Advantage poll put him a mere 2 points behind McCain in Georgia. But the latest surveys from those same firms tell a different story. According to an Insider Advantage sounding released last Thursday, McCain now leads 56-38 in the Peach State--an 18-point gulf. Meanwhile, the first postconvention poll by Rasmussen gives the Republican an 11-point advantage in the Treasure State, 53-42. Real Clear Politics has McCain ahead by an average of 13.4 percent in the former and 9.0 percent in the latter. Which means they may be out of reach.

The news for Obama in the key Bush states of Ohio and Florida isn't any better. In late July, the battle for the Sunshine State was tied at about 45 percent on average, and after Denver, Obama trailed by as little as 2.6 percent. But in the post-St. Paul period, McCain's Florida numbers have skyrocketed. Since last Monday, four surveys have hit the wires, with PPP (McCain +5), Quinnipiac (+7) and Insider Advantage (+8) all showing a growing lead for McCain; only FOX News still puts Obama within striking distance. According to the RCP average, McCain now boasts his largest edge (5 percent) since late June. The McCainward shift in the Buckeye State looks much the same. Of the six polls released since St. Paul, five show the Arizonan ahead--boosting him to his biggest RCP lead in this crucial, close-run battleground (2.5 percent) since mid-May. Even Virginia, a Bush state where Obama had held McCain to a tie for much of the cycle, seems to have drifted right. There, McCain now leads by 2.6 percent, 49.3 to 46.7--the largest margin for either candidate since May. The Republican nominee has also edged ahead in the latest polls out of New Mexico and Nevada--both Red in 2004, both leaning toward Obama before St. Paul.

But the most troubling developments for the Dems are probably in two states Kerry won in 2004: Pennsylvania and Minnesota. At the end of July, Obama led in the Keystone State by a whopping nine points, 51.7 percent to 41.7 percent; at the start of September he was ahead by a healthy five, 47.4 to 42.4. The three polls released since St. Paul, however, show McCain closing fast. In the Quinnipiac survey, McCain trails by a measly three points after lagging by seven in mid-August; Strategic Vision and Rasmussen put him within two. Overall, Obama's average lead in Pennsylvania--2.3 percent--is his smallest since capturing the nomination. And while a CNN/Gallup poll released between the conventions gave Obama a 12-point lead in Minnesota, the two soundings out since the GOP left the state earlier this month suggest that McCain is either tied with Obama at 45 percent (Star Tribune) or trailing by a statistically insignificant 2-percent margin (Survey USA). Couple that with the surprising 46 Obama-43 McCain result in the latest Wisconsin survey, and the Rust Belt and upper Midwest are starting to look too close for Chicago's comfort.

It's not all doom and gloom for Obama. So far this month, he's seems to have solidified his narrow margin in Michigan and New Hampshire (states McCain is hoping to flip) while expanding his edges in the Bush states of Iowa and Colorado, where he now leads by 9.7 percent and 2.3 percent, respectively. If he wins these states in November--along with Pennsylvania, Minnesota, Wisconsin and New Mexico--he wins the White House. New Democratic registrations and Chicago's sophisticated field operation will surely help. But what the last week of polling has shown beyond any doubt is that McCain's successful convention and shocking choice of Sarah Palin as his running mate have shifted the map ever so slightly to the right, transforming a landscape that favored Obama into a landscape that favors, well, no one. For the next six weeks, then, expect Obama and Joe Biden to play defense (Pennsylvania, Michigan) as well as offense (Colorado, Virginia, Nevada) while focusing much of their attention on the king of all swing states: Ohio. But don't expect the final map to look all that different from 2004.

UPDATE, Sept. 16: Prof. Charles Franklin of the University of Wisconsin agrees with our analysis:

Among the strong Republican states, McCain has gained more than 8 points over Obama since shortly before the conventions, turning a 14 point lead into a 22.5 point margin, a huge gain. Among the strong Democratic states, the effect of the conventions is a tiny 2 point move in McCain's direction, from an Obama lead of 12 points before to 10 points now. But the rest of the states, rated lean or toss up, have also shown movement. These swing states had a 1.5 point Obama lead before the conventions, and that has now turned into a 3 point McCain lead, a 4.5 point shift.

www.ruffcommunications.com

If You Like Michigan's Economy, You'll Love Obama's

OPINION

If You Like Michigan's Economy, You'll Love Obama's
By PHIL GRAMM and MIKE SOLONSeptember 13, 2008; Page A13

Despite the federal government's growing economic dominance, individual states still exercise substantial freedom in pursuing their own economic fortune -- or misfortune. As a result, the states provide a laboratory for testing various policies.

In this election year, the experience of the states gives us some ability to look at the economic policies of the two presidential candidates in action. If a program is not playing in Peoria, it probably won't work elsewhere. Americans have voted with their feet by moving to states with greater opportunities, but federal adoption of failed state programs would take away our ability to walk away from bad government.

Growth in jobs, income and population are proof that a state is prospering. But figuring out why one state does well while another struggles requires in-depth analysis. In an effort to explain differences in performance, think tanks have generated state-based economic freedom indices modeled on the World Economic Freedom Index published by The Wall Street Journal and the Heritage Foundation.

A TAX TO GRIND

Personal-income growth suffers when states adopt a tax-and-spend approach to fiscal policy. (Read more.)

The Competitiveness Index created by the American Legislative Exchange Council (ALEC) identifies "16 policy variables that have a proven impact on the migration of capital -- both investment capital and human capital -- into and out of states." Its analysis shows that "generally speaking, states that spend less, especially on income transfer programs, and states that tax less, particularly on productive activities such as working or investing, experience higher growth rates than states that tax and spend more."

Ranking states by domestic migration, per-capita income growth and employment growth, ALEC found that from 1996 through 2006, Texas, Florida and Arizona were the three most successful states. Illinois, Ohio and Michigan were the three least successful.

The rewards for success were huge. Texas gained 1.7 million net new jobs, Florida gained 1.4 million and Arizona gained 600,000. While the U.S. average job growth percentage was 9.9%, Texas, Florida and Arizona had job growth of 18.5%, 21.4% and 28.9%, respectively.

Remarkably, a third of all the jobs in the U.S. in the last 10 years were created in these three states. While the population of the three highest-performing states grew twice as fast as the national average, per-capita real income still grew by $6,563 or 21.4% in Texas, Florida and Arizona. That's a $26,252 increase for a typical family of four.

By comparison, Illinois gained only 122,000 jobs, Ohio lost 62,900 and Michigan lost 318,000.

Population growth in Michigan, Ohio and Illinois was only 4.2%, a third the national average, and real income per capita rose by only $3,466, just 58% of the national average. Workers in the three least successful states had to contend with a quarter-million fewer jobs rather than taking their pick of the 3.7 million new jobs that were available in the three fastest-growing states.

In Michigan, the average family of four had to make ends meet without an extra $8,672 had their state matched the real income growth of the three most successful states. Families in Michigan, Ohio and Illinois struggled not because they didn't work hard enough, long enough or smart enough. They struggled because too many of their elected leaders represented special interests rather than their interests.

What explains this relative performance over the last 10 years? The simple answer is that governance, taxes and regulatory policy matter. The playing field among the states was not flat.

Business conditions were better in the successful states than in the lagging ones. Capital and labor gravitated to where the burdens were smaller and the opportunities greater.

It costs state taxpayers far less to succeed than to fail. In the three most successful states, state spending averaged $5,519 per capita. In the three least successful states, state spending averaged $6,484 per capita. Per capita taxes were $7,063 versus $8,342.

There also appears to be a clear difference between union interests and the worker interests. Texas, Florida and Arizona are right-to-work states, while Michigan, Ohio and Illinois are not.

Michigan, Ohio and Illinois impose significantly higher minimum wages than Texas, Florida and Arizona. Yet with all the proclaimed benefits of unionism and higher minimum wages, Texas, Florida and Arizona workers saw their real income grow more than twice as fast as workers in Michigan, Ohio and Illinois.

Incredibly, the business climate in Michigan is now so unfavorable that it has overwhelmed the considerable comparative advantage in auto production that Michigan spent a century building up. No one should let Michigan politicians blame their problems solely on the decline of the U.S. auto industry. Yes, Michigan lost 83,000 auto manufacturing jobs during the past decade and a half, but more than 91,000 new auto manufacturing jobs sprung up in Alabama, Tennessee, Kentucky, Georgia, North Carolina, South Carolina, Virginia and Texas.

So what do the state laboratories tell us about the potential success of the economic programs presented by Barack Obama and John McCain?

Mr. McCain will lower taxes. Mr. Obama will raise them, especially on small businesses. To understand why, you need to know something about the "infamous" top 1% of income tax filers:

In order to avoid high corporate tax rates and the double taxation of dividends, small business owners have increasingly filed as individuals rather than corporations. When Democrats talk about soaking the rich, it isn't the Rockefellers they're talking about; it's the companies where most Americans work. Three out of four individual income tax filers in the top 1% are, in fact, small businesses.

In the name of taxing the rich, Mr. Obama would raise the marginal tax rates to over 50% on millions of small businesses that provide 75% of all new jobs in America. Investors and corporations will also pay higher taxes under the Obama program, but, as the Michigan-Ohio-Illinois experience painfully demonstrates, workers ultimately pay for higher taxes in lower wages and fewer jobs.

Mr. Obama would spend all the savings from walking out of Iraq to expand the government. Mr. McCain would reserve all the savings from our success in Iraq to shrink the deficit, as part of a credible and internally consistent program to balance the budget by the end of his first term. Mr.
Obama's program offers no hope, or even a promise, of ever achieving a balanced budget.

Mr. Obama would stimulate the economy by increasing federal spending. Mr. McCain would stimulate the economy by cutting the corporate tax rate. Mr. Obama would expand unionism by denying workers the right to a secret ballot on the decision to form a union, and would dramatically increase the minimum wage. Mr. Obama would also expand the role of government in the economy, and stop reforms in areas like tort abuse.

The states have already tested the McCain and Obama programs, and the results are clear. We now face a national choice to determine if everything that has failed the families of Michigan, Ohio and Illinois will be imposed on a grander scale across the nation. In an appropriate twist of fate, Michigan and Ohio, the two states that have suffered the most from the policies that Mr. Obama proposes, have it within their power not only to reverse their own misfortunes but to spare the nation from a similar fate.

Mr. Gramm is a former Republican senator from Texas. Mr. Solon founded the consulting firm Capitol Legistics.

See all of today's editorials and op-eds, plus video commentary, on Opinion Journal.

www.ruffcommunications.com

ECONOMIC FORECASTING SURVEY

Economic Woes Seen
Greeting President

By PHIL IZZO and KELLY EVANS
September 11, 2008 9:00 p.m.; Page A13

The next U.S. president will be confronted with slow growth, high unemployment and an economy teetering toward recession, say 51 private economists surveyed by The Wall Street Journal.

If they are correct, pumping up the economy will the first challenge facing either Democrat Barack Obama or Republican John McCain. That is likely to place tax cuts and government spending high on Washington's agenda, and push back costly measures such as reforming health care and fighting global warming.

The Wall Street Journal's latest monthly survey paints a gloomy picture of the outlook through the first half of 2009. The economy is on course to post four straight quarters of annualized economic growth below 2%, the longest stretch of subpar growth since the 2001 recession.

The respondents saw a 60% chance of an outright recession, expect the economy to shed 19,000 jobs a month for a year, and say the jobless rate, which jumped in August to 6.1%, will keep rising, to 6.4% by midyear, passing the 6.3% seen after the last recession.

The worst stretch will be the next few months, the economists say, coming as elections shift into high gear. Annualized growth in the gross domestic product is projected at 0.7% in the fourth quarter. A few months ago, forecasters thought the economy would be growing at a much faster clip by then.

By inauguration day, Jan. 20, the situation won't have improved much, they say. Growth in the first quarter is projected at a 1.3% annual rate.

CHARTS AND FULL RESULTS

See and download forecasts for growth, unemployment, housing and more. Plus, views on another stimulus package, a consumption slowdown, where the economy will be on election day. Survey conducted Sept. 5-8.

MORE

• Real Time Econ: Will Winning in 2012, Be Harder Than 2008?

"Rapidly rising unemployment, rebates behind us, falling house prices, falling stock prices, general loss of confidence and much tighter credit conditions. None of it looks good," said Paul Ashworth of Capital Economics.

Not all the news is bad. Inflation is expected to moderate. Economists forecast oil prices to be down to about $102 a barrel by the end of this year, and below $100 a barrel by June, potentially helping to take pressure off stretched households.

Even so, consumers are likely to be hurting. They have been stung not only by rising food and energy prices, but also by a deteriorating job market, tighter credit and falling home prices.

Yvette Perera, 39 years old, of Vallejo, Calif., was laid off in January from her job handling help-wanted ads for a small local paper, and has since been unable to find work. Her unemployment benefits end Nov. 1. "I'm looking for anything," she said. "Anything." On supermarket runs, she tries to limit herself to spending $40.

Sen. McCain has proposed cutting corporate taxes to 25% from 35%, and retaining all the Bush tax cuts on individuals, figuring that would give a boost to business. Sen. Obama would increase tax rates for those making more than $250,000 and use the proceeds for tax cuts aimed at moderate-income workers. Helping them would pump up the economy through consumer spending, his advisers argue.

ABOUT THE SURVEY

The Wall Street Journal surveys a group of 56 economists throughout the year. Broad surveys on more than 10 major economic indicators are conducted every month. Once a year, economists are ranked on how well their forecasts have fared. For prior installments of the surveys, see: WSJ.com/Economists.

On average, the survey respondents expect a 0.1% contraction in consumer spending during the third quarter. It would mark the first such retrenchment by consumers in 17 years. Consumers kept spending during the last recession, to the surprise of many economists. The respondents expect 0.1% growth in consumer spending in the fourth quarter as the holiday shopping season kicks into gear.

Retailers posted weak August same-store sales -- sales at stores open at least a year -- amid a disappointing back-to-school season. On Friday, the Commerce Department is set to release official retail sales numbers for August. Economists surveyed by Dow Jones Newswires expect an anemic monthly advance.

Nearly one-third of economists surveyed said the consumer retrenchment may not be reversed for years, a problem that could quickly rise to the top of the next president's agenda.

The Federal Reserve already has cut interest rates sharply, meaning any future stimulus might need to be driven by the White House. But choosing a fiscal-policy course will be tricky. A rising budget deficit could constrain the next administration. Meantime, tax rebates proved to be only a fleeting help.

Two-thirds of economists said a second stimulus package, currently being debated in Congress and supported by Sen. Obama, isn't the right move. Most support extending or making permanent President George W. Bush's tax cuts, as does Sen. McCain.

Among the economists who support a new stimulus, none said it should primarily be based on rebates to individuals, as Sen. Obama would do. His $115 billion plan includes $65 billion in rebates and $50 billion split between aid to state and local governments, and infrastructure spending. He would pay for the rebates by taxing oil-company profits. Sen. McCain has said he is open to a stimulus plan, but hasn't committed to any specific proposal.

Thirteen percent of the economists who support a stimulus plan said it should include infrastructure spending, which some argue carries more bang for the buck, while 2% said it should focus on extending unemployment insurance and food stamps. Nineteen percent said it should include some mix of rebates, infrastructure spending and benefits.

"You can't afford to bail out the financial system and the real economy at the same time," said Mr. Ashworth.

Write to Phil Izzo at philip.izzo@wsj.com and Kelly Evans at kelly.evans@wsj.com

www.ruffcommunications.com

Friday, September 12, 2008

Democratic Illinois gov defends Palin's experience

CHICAGO Gov. Rod Blagojevich backs Illinois' Barack Obama, but he said Thursday that it is a mistake for fellow Democrats to discount GOP vice presidential nominee Sarah Palin's experience as Alaska governor.

The executive job of governor is like the presidency because the officeholder has to make decisions, Blagojevich said. Lawmakers do different things like "debate and...pass their bills back and forth," he said.

Obama, the Democratic nominee for president, was a state senator before being elected to the U.S. Senate from Illinois.

"But governors make decisions, and I think it's a tactical mistake for the Democrats to question Gov. Palin's experience when she's been a governor of a state," Blagojevich said on WGN-AM's "Spike O'Dell Show."

Palin has also been the mayor of a small town in Alaska. Her running mate, Republican presidential nominee John McCain, has never served as a governor. He has spent two decades as a U.S. Senator.

Obama's campaign did not comment on Blagojevich's statements. But during a recent interview with MSNBC's Keith Olbermann, Obama ducked when asked whether he believed Palin had enough experience to be president.

"I'll let Gov. Palin answer that," Obama said with a smile. "I'm sure she'll be appearing on your show."

Blagojevich said to help Obama win, Democrats should focus on why President Bush's policies need to change.

"I'm for Obama, and I think Barack Obama is gonna do great things for America, and he's gonna change things," Blagojevich said. AP

www.ruffcommunications.com

Black Voters Fret Over Obama

Close Election Spurs
Nervousness, Anger;
A Boon to Turnout?

By GARY FIELDS and JONATHAN KAUFMAN
September 12, 2008; Page A8

An anxious murmur is rising among black voters as the presidential race tightens: What if Barack Obama loses?

Black talk-show hosts and black-themed Web sites are being flooded with callers and bloggers reflecting a nervousness -- and anger -- over the campaign. Bev Smith, a nationally syndicated radio talk-show host, devoted her entire three-hour show Monday night to the question: "If Obama doesn't win, what will you think?"

"My audience is upset," she said in an interview. "Some people said they would be so angry it would be reminiscent of the [1960s] riots -- that is how despondent they would be."

Warren Ballentine, another nationally syndicated talk-show host, said: "Once Sarah Palin was picked and African-Americans saw the Republicans ignited again, they got worried. We are scared now."

The worries aren't universal. New York Gov. David Paterson, a Democrat, acknowledged the concerns about race. "I am hearing those jitters," he said. But he said many Democratic candidates have lost the presidential race in recent decades and "they were white candidates. African-Americans need to remember that."

Black nervousness could help Sen. Obama, the first African-American to head a major-party ticket, by boosting black turnout in November. One caller to Ms. Smith's show Monday said she was so worried that she planned to go to her church to begin working on a voter-registration drive.

If Sen. Obama loses, "African-Americans could be disappointed to the point of not engaging in the process anymore," or consider forming a third political party, said Richard McIntire, communications director for the National Association for the Advancement of Colored People.

Initially skeptical of Sen. Obama's bid, a majority of blacks supported Sen. Hillary Clinton before the primaries began. They began to flock to Sen. Obama's camp following his win in Iowa. The latest Wall Street Journal poll shows 88% of blacks backing Sens. Obama and Joe Biden. Black voter registration has surged.

"There is so much about this campaign that people are taking very personally," said Lynette Clemetson, managing editor of Theroot.com, a Web site that she said attracts African-American professionals in their 30s and 40s. "A large part of this hope surrounding Obama is generational -- that he can crack through what some have long considered basic barriers. If he wins, it's the 'Hallelujah Chorus.'"

But the racial undertone of the campaign has some blacks -- and some whites -- unable to envision the Illinois senator losing the election without racism playing a role.

"If he loses, it will shake the very ground that we stand on mentally as far as what we need to be to succeed," said Robert Gordon, a 48-year-old engineering surveyor from Dallas. "From day one, we've been told to be a certain way, to be neat, intellectual, speak clearly. He is the symbol of what we were told to be by our parents and by society as a whole. If this doesn't work, what does that do to our psyche? What do I tell my sons?"

Twyla Griffin, who works for a health-care company outside Detroit, said she was feeling optimistic about the country's racial progress as she watched Sen. Obama's nomination-acceptance speech on television two weeks ago. But with excitement surging over Alaska Gov. Sarah Palin as the Republican vice-presidential nominee and polls showing the race to be close, she said she now finds herself asking: "Can people bring themselves to go into a voting booth and pull the lever for a black man?"

Melvin Thomas, a professor at North Carolina State University and past president of the Association of Black Sociologists, said black response to the election likely will depend on "how African-Americans will see a vote against Mr. Obama. What does the racial distribution of that vote look like? If the answer for African-Americans to the question of why Obama lost is race, an Obama loss will have the potential to deepen the racial cut."

Don Moses, a retired Army lieutenant colonel, said while he supports Sen. Obama, attributing a loss to race would be an oversimplification and unfair to voters who have legitimate concerns about the candidate. Those concerns include his age and shorter resume, as well as his alienation of "some strong members of the old guard in the Democratic Party," Mr. Moses said. Concluding that the election may be decided by race also would ignore the reasons some might have to support Sen. John McCain, including his military history, he said.

"I would hope if Obama is not elected, black America will not lose sight of the lessons learned and move forward," he said.

Write to Gary Fields at gary.fields@wsj.com and Jonathan Kaufman at jonathan.kaufman@wsj.com

www.ruffcommunications.com

OPINION

Obama Can't Win
Against Palin

By KARL ROVE
September 11, 2008; Page A13

Of all the advantages Gov. Sarah Palin has brought to the GOP ticket, the most important may be that she has gotten into Barack Obama's head. How else to explain Sen. Obama's decision to go one-on-one against "Sarah Barracuda," captain of the Wasilla High state basketball champs?

It's a matchup he'll lose. If Mr. Obama wants to win, he needs to remember he's running against John McCain for president, not Mrs. Palin for vice president.

AP

Michael Dukakis spent the last months of the 1988 campaign calling his opponent's running mate, Dan Quayle, a risky choice and even ran a TV ad blasting Mr. Quayle. The Bush/Quayle ticket carried 40 states.

Adlai Stevenson spent the fall of 1952 bashing Dwight Eisenhower's running mate, Richard Nixon, calling him "the kind of politician who would cut down a redwood tree, and then mount the stump and make a speech for conservation." The Republican ticket carried 39 of 48 states.

If Mr. Obama keeps attacking Mrs. Palin, he could suffer the fate of his Democratic predecessors. These assaults highlight his own tissue-thin résumé, waste precious time better spent reassuring voters he is up for the job, and diminish him -- not her.

Consider Mr. Obama's response to CNN's Anderson Cooper, who asked him about Republican claims that Mrs. Palin beats him on executive experience. Mr. Obama responded by comparing Wasilla's 50 city workers with his campaign's 2,500 employees and dismissed its budget of about $12 million a year by saying "we have a budget of about three times that just for the month." He claimed his campaign "made clear" his "ability to manage large systems and to execute."

Of course, this ignores the fact that Mrs. Palin is now governor. She manages an $11 billion operating budget, a $1.7 billion capital expenditure budget, and nearly 29,000 full- and part-time state employees. In two years as governor, she's vetoed over $499 million from Alaska's capital budget -- more money than Mr. Obama is likely to spend on his entire campaign.

And Mr. Obama is not running his campaign's day-to-day operation. His manager, David Plouffe, assisted by others, makes the decisions about the $335 million the campaign has spent. Even if Mr. Obama is his own campaign manager, does that qualify him for president?

A debate between Mr. Obama and Mrs. Palin over executive experience also isn't smart politics for Democrats. As Mr. Obama talks down Mrs. Palin's record, voters may start comparing backgrounds. He won't come off well.

ABOUT KARL ROVE

Karl Rove served as Senior Advisor to President George W. Bush from 2000–2007 and Deputy Chief of Staff from 2004–2007. At the White House he oversaw the Offices of Strategic Initiatives, Political Affairs, Public Liaison, and Intergovernmental Affairs and was Deputy Chief of Staff for Policy, coordinating the White House policy making process.

Before Karl became known as "The Architect" of President Bush's 2000 and 2004 campaigns, he was president of Karl Rove + Company, an Austin-based public affairs firm that worked for Republican candidates, nonpartisan causes, and nonprofit groups. His clients included over 75 Republican U.S. Senate, Congressional and gubernatorial candidates in 24 states, as well as the Moderate Party of Sweden.

Karl writes a weekly op-ed for The Wall Street Journal, is a Newsweek columnist and is now writing a book to be published by Simon & Schuster. Email the author at Karl@Rove.com or visit him on the web at Rove.com.

Then there was Mr. Obama's blast Saturday about Mrs. Palin's record on earmarks. He went at her personally, saying, "you been taking all these earmarks when it is convenient and then suddenly you are the champion anti-earmark person."

It's true. Mrs. Palin did seek earmarks as Wasilla's mayor. But as governor, she ratcheted down the state's requests for federal dollars, telling the legislature last year Alaska "cannot and must not rely so heavily on federal government earmarks." Her budget chief directed state agencies to reduce earmark requests to only "the most compelling needs" with "a strong national purpose," explaining to reporters "we really want to skinny it down."

Mr. Obama has again started a debate he can't win. As senator, he has requested nearly $936 million in earmarks, ratcheting up his requests each year he's been in the Senate. If voters dislike earmarks -- and they do -- they may conclude Mrs. Palin cut them, while Mr. Obama grabs for more each year.

Mr. Obama may also pay a price for his "lipstick on a pig" comment. The last time the word "lipstick" showed up in this campaign was during Mrs. Palin's memorable ad-lib in her acceptance speech. Mr. Obama says he didn't mean to aim the comment at Mrs. Palin, but he deserves all the negative flashback he gets from the snarky aside.

Sen. Joe Biden has now joined the attack on Mrs. Palin, saying this week that her views on issues show she's "obviously a backwards step for women." This is a mistake. Mr. Obama is already finding it difficult to win over independent women and Hillary Clinton voters. If it looks like he's going out of his way to attack Mrs. Palin, these voters may conclude it's because he has a problem with strong women.

In Denver two weeks ago, Mr. Obama said, "If you don't have a record to run on, then you paint your opponent as someone people should run from." That's what he's trying to do, only the object of his painting is Sarah Palin, not John McCain.

In Mrs. Palin, Mr. Obama faces a political phenomenon who has altered the election's dynamics. Americans have rarely seen someone who immediately connects with large numbers of voters at such a visceral level. Mrs. Palin may be the first vice presidential candidate since Lyndon B. Johnson to change an election's outcome. If Mr. Obama keeps attacking her, the odds of Gov. Palin becoming Vice President Palin increase significantly.

Mr. Rove is a former senior adviser and deputy chief of staff to President George W. Bush.

www.ruffcommunications.com

Barack Obama takes daughters Malia and Sasha to School

Like 600,000 Other Fathers that Participated in the Million Father March 2008, Senator Obama Takes His Children to School

Barack Obama takes daughters Malia and Sasha to School September 8, 2008 FROM ASSOCIATED PRESS CHICAGO - Democratic presidential nominee Barack Obama held his daughters' hands when he escorted them to their first day of school on Monday. The girls arrived at the University of Chicago Laboratory Schools in a five-SUV motorcade after a short drive from their South Side home. It was the first day of classes for 10-year-old Malia, a fifth grader, and 7-year-old Sasha, in second grade. They'd spent some of their summer on the campaign trail with their dad. "The fifth grader didn't really want me to go up to the classroom, but I went," Obama said with a smile at an event a few hours later in Flint, Mich. "She's still daddy's girl." Clad in a black track suit, Obama walked his daughters through the side doors of the ivy covered school building just before 8 a.m. before heading to a gym. Copyright 2008 Associated Press. The Million Father March 2008 was sponsored by the Schott Foundation for Public Education. The National PTA and the National Fatherhood Initiative were partners in the Million Father March 2008. Approximately 600,000 men in 475 cities participated in the Million Father March 2008. If Democratic presidential nominee Barack Obama can find the time to take his children to school, shouldn't you? We are expecting 800,000 men to take their children to school for the Million Father March 2009. Call The Black Star Project at 773.285.9600 for more information about the Million Father March or the new, year-long Million Father Movement. www.ruffcommunications.com

Clintons instigating a fight where all Dems will lose

by Lou Ransom

Obviously, the Clintons, Bill and Hillary (not George), are harder to get rid of than gum on the bottom of the shoe.

Sen. Barack Obama, on his way to his christening as the Democratic nominee for president of the United States, still has a considerable wad of Clinton under his shoe, and it looks like he’ll have to carry it all the way through the Democratic National Convention and into the general election.

It wasn’t supposed to be that way. Obama tallied the most delegates, won the most states and raised the most money. For two months now, he has been the “presumptive” nominee. But Clinton supporters, and at least one of the Clintons, believes we presumed too much.

The Clintons bargained hard and threw their considerable Democratic weight around, and finagled not only prime speaking spots during the convention but also got Obama to agree to allow a roll call vote on Hillary Clinton’s candidacy. Her supporters, who have lost none of their ardor despite their candidate’s defeat, will get a chance to cast a vote for Clinton at the convention.

The Clintons argue that such a vote will allow her supporters to have their voices heard. Hillary also said that it will be some sort of “catharsis” (releasing strong or repressed emotions) for her supporters.

Frankly, what has been heard loud and clear since the end of the primary season are the voices of Hillary supporters, vowing never to vote for Obama or worse, to switch their Democratic votes to Republican John McCain.

They have burned up the blogs and overpowered the op-eds on their way to expressing:

1. Hillary was done in by a sexist media.

2. Hillary was done in by the sexist Democratic leadership.

3. Hillary was done in by the media’s infatuation with and kid gloves treatment of Obama.

4. All of the above.

But some Clinton supporters, and perhaps the Clintons themselves, are hoping for a do-over. They are poised to make noise at the Democratic Convention, but it is not clear what they want. Do they want the roll call to declare Clinton the winner? That’s not likely, but if it did, it would rip the Democratic Party asunder because it would seem that the nomination was stolen from the “presumptive” nominee, Obama. His supporters would then have a hard time supporting another nominee. Do they want Clinton on the Obama ticket? That isn’t likely either because it would amount to a co-presidency and would set up four years of controversy and competition within the White House. In effect, the Clintons would accomplish what Rev. Jesse Jackson only whispered about.

It is clear that some Clinton supporters will never vote for Obama. They would rather stay home.

And what does Bill Clinton want? He wants his “legacy” rehabilitated. He wants better relations with Black voters, who sharply rebuked him for his behavior during the primaries. He wants to reclaim the moniker of “first Black president” despite his absence of melanin. It may not happen. He may have gone too far. He still hedges when asked if Obama is qualified to be president. This from a man who spent the last two years of his presidency answering charges of a tryst with a female White House intern.

So now we are on the verge of a convention during which a floor fight is promised, and some of the delegates plan to be quite vocal in their support of someone other than the presumptive nominee.

That is hardly the kind of unity Hillary and Barack talked about in Unity, New Hampshire. It is not the kind of unified party that would strike fear into the Republicans. It is not the type of unity that points to a viable future for the Democratic Party. It is far short of the kind of unity that will be necessary to put a Democrat in the White House after eight horrendous years of George Bush.

This is a telling point for Obama. He is being watched to see if he is presidential timbre. His actions at this convention are the first real test of his leadership. He should not falter here.

Obama needs to man-up and reclaim this convention. It is supposed to be “Obama time” not Clinton redux. He should make sure that his voice is the voice of the Democratic Party, and all those disgruntled Clinton supporters should fall in behind him or they can bet the party will simply just fall behind.

Lou Ransom is executive editor of the Chicago Defender. He can be reached via email at lransom@chicagodefender.com.

www.ruffcommunications.com

Senator Obama, You are served on behalf of Philip Berg, Esq.

OBAMA AND DNC SERVED TODAY WITH BERG LAWSUIT:

Lawsuit questions Obama's eligibility for office

Citizenship claim at issue

Jennifer Haberkorn THE WASHINGTON TIMES
Thursday, August 28, 2008

Pennsylvania's former deputy attorney general and Sen. Hillary Rodham Clinton supporter Philip J. Berg has filed a lawsuit in federal court in Pennsylvania accusing presumptive Democratic presidential candidate Sen. Barack Obama of lying about his U.S. citizenship, which would make him ineligible to be president.

Mr. Berg is one of a faction of Clinton supporters who haven't heeded the party's call for unity, filing the suit just days before the opening of the Democratic National Convention, which will nominate Mr. Obama as the party's presidential candidate.

The suit, filed in U.S. District Court in Philadelphia last week, also names the Democratic National Committee and the Federal Election Commission and says Mr. Obama´s mother went to Kenya late in her pregnancy and ended up giving birth there. It also claims that later in life, Mr. Obama declared himself a citizen of Indonesia.

The Obama campaign has firmly said the Illinois Democrat is a natural-born citizen. Last month, the campaign posted on Mr. Obama's Web site a copy of his "certification of live birth." It says he was born in Honolulu on Aug. 4, 1961, two years after Hawaii was named the 50th state.

Mr. Berg said he was contacted about filing the lawsuit by a member or associate of the group PUMA, which was formed to support Mrs. Clinton shortly after she withdrew from the race. Its mission includes denouncing the Democratic Party and Mr. Obama's nomination.

"I really do not believe he is a natural-born citizen," said Mr. Berg, adding that he is not connected with Mrs. Clinton or her campaign.

Just over one-quarter of Clinton supporters say they're now backing Mr. McCain, up from 16 percent in late June, according to a CNN poll conducted after Mr. Obama announced Sen. Joseph R. Biden Jr., of Delaware, as his running mate. Two-thirds of Clinton supporters are now backing Mr. Obama.

Mrs. Clinton, for her part, encouraged her supporters this week to back Mr. Obama.

"Whether you voted for me, or voted for Barack, the time is now to unite as a single party with a single purpose. We are on the same team, and none of us can sit on the sidelines," she said during her address to the convention Tuesday.

Mr. Berg, who says he donated about $200 to Mrs. Clinton's campaign, may represent the fringe of the pro-Hillary faction that hasn't warmed to Mr. Obama.

He has filed suits for clients against President Bush and Vice President Dick Cheney, claiming they knew about the Sept. 11, 2001, terrorist attacks before they happened. He also publicly asked Supreme Court Justices Clarence Thomas, Antonin Scalia and Sandra Day O'Connor to disbar themselves for their decision in the controversial 2001 case Bush v. Gore.

Mr. Berg has posted documents on his Web site, ObamaCrimes.com, he says back up his claims. But he said he doesn't know where they originated.

Backers of the idea that Mr. Obama isn't a natural-born citizen say Mr. Obama's certification of live birth doesn't quell the issue. They say a certification can be obtained after birth.

But the Hawaii State Department of Health said Monday that there is no difference between a certificate and a certification of live birth in the eyes of the state. For instance, either can be used to confirm U.S. citizenship to obtain a passport or state ID, said Alvin Onaka, a research and statistics officer at the Department of Health.

In Hawaii, only the person named on the certificate or his family can request the certificate of live birth.

Several fact-checking groups, such as FactCheck.org and PolitiFact.com have determined that the certification posted on Mr. Obama's Web site is authentic.

Mr. Obama's opponent, Sen. John McCain of Arizona, has faced questions about his qualification as a "natural-born citizen" as well.

Mr. McCain was born on a military installation in the Panama Canal Zone, where his father, a Navy officer, was stationed.

Theodore Olson, a former solicitor general who is advising the McCain campaign, said in February that he's confident Mr. McCain meets the constitutional requirement. Legal scholars say there is no precedent on the subject because all previous presidents have been born within the 50 states or territories that became states.

www.ruffcommunications.com

Black Republicans, Obama, JC Watts, Armstrong Williams, African-American Republican Leadership Council in Texas,

Why black Republicans support Obama

---

Posted: July 05, 2008
1:00 am Eastern

© 2008

I don't necessarily like his policies; but … history thrusts me to really seriously think about it [voting for Obama]. … Black conservatives tell me privately it would be very hard to vote against him in November.

– Armstrong Williams, talk show host

Recent comments by well-known black Republicans J.C. Watts and Armstrong Williams that they're conflicted about the upcoming presidential elections and are contemplating voting for Barack Obama have sent shock waves through the Republican Party.

I'm hearing many black Republicans echoing similar sentiments. They say that because of the historical significance of casting a vote for the first legitimate black presidential candidate, they may cross party lines.

These statements don't surprise me.

So, how did black Republicans get to a point where they're willing to abandon their own "values" to vote for a socialist?

To get an understanding of this phenomenon, I recently interviewed several black Republican leaders on my radio program.

Calvin Stephens, chairman of the African-American Republican Leadership Council in Texas, said that he's voting for Obama because this is a "black pride moment!"

Can you imagine if a white person in a similar position even hinted at voting for a candidate because it was a "white pride moment"? That person would be castigated, labeled a "racist" and fired.

Other black Republicans came on my program and repeated the Obama mantra of "change" without defining what that change meant.

I understand now that there's a major difference between a black conservative and a black Republican. A black conservative votes Republican because the party agrees with his values: pro-life, lower taxes, strong defense and strong families, etc.

A real black conservative could never vote for Obama. On the other hand, a black Republican could vote for Obama because he identifies more with color than character.

Because black Americans have long been catered to by liberal Democrats, most still feel like they're owed something. Even the staunchest black Republican believes that his party owes him.

A new breed of black Republican has infiltrated the GOP with the intent to wield black influence over both the parties. They may agree with the Republican Party on taxes and other economic issues, but that's it! At their core they're dyed-in-the-wool liberal Democrats.

Until some 20 years ago, I used to be a liberal Democrat too. I followed Jesse Jackson, Louis Farrakhan and the NAACP. In my anger I believed what these so-called "black leaders" told me: that white racism was keeping me down.

I became a conservative after a deeply profound spiritual awakening at which point I repented of my anger, and God allowed me to see reality. I was then able to recognize that these liberal black leaders were no friends of decent black Americans. I could no longer identify with the liberal Democrat platform or their Godless "values."

I identified with conservative values and I joined the Republican Party to promote those values. I didn't join seeking to find what the party could do for me.

Understandably, white conservatives are bewildered and upset about the prospect of black Republicans voting for candidates based on race rather than values.

The Hispanic community already outnumbers blacks, and they're competing for representation within the GOP. Black Republicans' support of Obama will no doubt create a bigger rift between Republican leadership and blacks, and serve to close the window of opportunity blacks have had open to them to gain leadership in the party.

But what about "history"?

Let's examine the "history" argument. Is it right to vote for Barack Obama to make "history" while ignoring his record? Consider that Sen. Obama:

• believes in abortion on demand, and has told Planned Parenthood that sex-ed for kindergartners is "the right thing to do" (as long as it's "age appropriate");
  
  
• has announced his intention to gut our defenses including our nuclear arsenal and strategic missile defense programs;
  
  
• has said he would be willing to meet with the leaders of Iran and others without preconditions;
  
  
• wants to withdraw U.S. troops from Iraq, which would lead to chaos in the region and endanger Israel;
  
  
• seeks to raise taxes across the board including on oil company profits, yet opposes drilling domestically.

It would be nice to have a black president. But shouldn't it be someone who believes in the values that made this country great and is ready to protect and serve the American people?

I hear many blacks say that an Obama presidency will be the dawn of a new day for black America. Really?

Americans have elected black members of Congress as far back as the late 1800s.

We've had two black Supreme Court justices. We have blacks represented in the highest stratosphere of private and government sectors. Trust me, if all these accomplishments haven't persuaded and uplifted the masses, electing the first black president won't do it either.

Barack Obama is not black America's messiah. But the only way for black Americans (including those who identify themselves as Republicans) to see that reality is to drop their un-American identification with race and be willing to hear the truth about the issues from any American, regardless of color.

The Rev. Jesse Lee Peterson is founder and president of BOND, the Brotherhood Organization of A New Destiny, and author of "The Seven Guaranteed Steps To Spiritual, Family, and Financial Success" guide. He's also host of "The Jesse Lee Peterson Radio Show." For more information, visit www.bondinfo.org.

www.ruffcommunications.com

Obama's bounce smaller than others

David Paul KuhnMon Sep 1, 10:38 PM ET

Barack Obama’s post-Democratic National Convention bounce in the polls appears to be slightly smaller than the norm of past conventions, and it's gradually depreciating.

The Gallup daily tracking poll has found that since the conclusion of the convention, Obama has risen 4 percentage points in the polls, to lead McCain 49 percent to 43 percent today. That's a slightly smaller uptick in the polls than the 5- to 6-point bounce earned by a typical party nominee, by Gallup’s measure, since 1964. Obama and McCain were evenly split at 45 percentage points apiece prior to the Democratic convention, according to Gallup.

That outcome comes despite Obama’s speech before more than 80,000 people at Invesco Field in Denver on Thursday night, a political event that was also seen by about 40 million television viewers. It also comes as the Republican convention quietly got under way in St. Paul, and the national media gaze focuses southward to Hurricane Gustav.

Daily tracking polls by Gallup and Rasmussen Reports demonstrate that Obama has taken his greatest lead since July, if not the general election. But while Obama’s support remains significantly stronger than weeks ago, it appears that the post-convention bounce he earned may have already peaked.

On Saturday, Gallup reported Obama was ahead by 8 percentage points. By Monday, that lead had shrunk to 5 points. Rasmussen pegs Obama’s standing as relatively stable in recent days, with a 49 percent to 46 percent lead over McCain when “leaners” are included, a small but statistically insignificant improvement for McCain of 1 percentage point since Saturday.

CBS News reported Monday that Obama is now ahead in its poll, 48 to 40 percent, a 3-point uptick in Obama’s standing compared to its poll prior to the Democratic convention. Obama’s 3-point bounce exceeds that of John F. Kerry, the Democratic presidential nominee in 2004 who did not rise in the polls following his convention. But Obama’s bounce is less than a third of what Al Gore received in 2000 and Bill Clinton received in 1992. Even Bob Dole, following the 1996 Republican convention, received a 4-point bounce in the polls, 1 point more than Obama.

But any Obama bounce, if it is sustained, could be said to be a victory for Democrats. In the days since Obama gave his address, the news cycles have been captured by the unveiling of Alaska Gov. Sarah Palin as John McCain's running mate, the opening of the Republican convention and the threat posed by Hurricane Gustav.

There have been only three previous back-to-back conventions, most recently in 1956. The effect of the GOP convention on the polls will not be known for days.

A CNN/Opinion Research Corp. poll and a Zogby Interactive flash poll, both completed over the weekend, have found the presidential race is in a dead heat. According to both polls, Obama attained no statistically significant convention bounce.

Whether Obama is ahead or tied with McCain, the presumptive Republican nominee will now come into the Republican convention with his best opportunity yet to break through his own ceiling and take a lead in the presidential race.

Copyright © 2008 Capitol News Company, LLC.

www.ruffcommunications.com

John McCain Has a Tax Plan To Create Jobs

September 2, 2008

John McCain
Has a Tax Plan
To Create Jobs

By MARTIN FELDSTEIN and JOHN B. TAYLOR
September 2, 2008; Page A23

John McCain's tax policies are designed to create jobs, increase wages and allow all Americans -- especially those in the hard-pressed middle class -- to keep more of what they earn. His plan achieves these goals in three important ways.

First, he proposes a package of tax incentives that will create jobs and raise earnings by inducing firms to invest more in the U.S. Second, he is strongly committed to blocking any increase in tax rates while doubling the personal exemptions for families with children, which will reduce the tax burden on working Americans. Third, he proposes a new, refundable tax credit that will increase health-care coverage, reduce the cost of health care, and provide more funds for families and individuals to purchase health care.

Here's how the three components of Sen. McCain's tax plan will work in practice.

To create jobs, Mr. McCain will reduce the corporate tax rate -- now at 35% the second highest among all industrial countries -- to one that doesn't penalize firms for doing business here. To encourage small businesses to expand, he will fight against higher tax rates on their income.

To increase wages, Mr. McCain will provide incentives to raise productivity, which leads to higher wages. To increase productivity, he will provide incentives for developing and applying new technologies by expanding the tax credit for research and development, and by making that credit permanent.

More savings and investment in businesses also raise productivity. Mr. McCain will stimulate saving by keeping tax rates low on the returns to saving in the form of dividends and capital gains. He will also allow faster depreciation of assets, which encourages investment. And he will strengthen the incentive to save by reducing the maximum estate tax rate, with a substantial, untaxed exemption.

In stark contrast to Barack Obama, Mr. McCain believes that tax policy should be used to foster the creation of jobs and higher wages through economic growth, rather than to redistribute incomes. The economy is not a zero-sum game in which some people can enjoy higher incomes only if others are made worse off.

Mr. McCain's plan will significantly ease the tax burden on American families with children by doubling the personal exemption to $7,000 from $3,500. This means a larger percentage tax reduction for families with smaller taxable incomes, and specifically helps families in the middle income levels. And a President McCain will enable people to keep more of their earnings by preventing Congress from raising tax rates.

Mr. McCain's overall tax policy will also expand health-insurance coverage, and make health care more efficient. Most taxpayers will also pay less in tax. Here's how it will work. His plan includes a refundable tax credit of $2,500 for single individuals and $5,000 for couples, if they receive a qualifying health-care policy from an employer (one that includes adequate coverage against large medical bills), or buy a qualifying policy on their own. The credit will replace the current tax rule, which excludes employer payments for health insurance from employees' taxable incomes.

This tax credit will be available to everyone, including the self-employed and the employees of businesses that do not provide health insurance. Thus it will lead to a major expansion of health-insurance coverage. The tax credit will of course be available to people who are between jobs, or have retired before they're eligible for Medicare.

Since any part of the credit not used to pay for insurance could be invested in a health savings account, individuals will have an incentive to choose less costly health-insurance policies. This will improve the efficiency of health care, to everyone's benefit.

Importantly, the tax credit will be a clear gain for most employees. Consider a married taxpayer whose employer now pays $10,000 for a health-insurance policy. Ending the exclusion will raise that individual's taxable income by $10,000 -- but the $5,000 tax credit will exceed the extra tax liability whether the marginal tax rate that individual pays is 10% or 35% or anywhere in between. Indeed, the lower the taxpayer's income, the more of the credit that will be available to pay for health care that's not reimbursed by insurance.

Sen. Obama was at best disingenuous in his convention speech when he criticized the McCain plan for taxing health benefits. The health insurance tax credit exceeds the extra taxes on existing benefits.

Mr. Obama also criticized Mr. McCain on the grounds that he doesn't cut taxes on 100 million families. But this ignores the fact that Mr. McCain's health-insurance credits would benefit most taxpayers and that many people who are not currently eligible for the increased personal exemption will become eligible when they have children. When these features are taken into account, the vast majority of today's 140 million taxpayers would pay lower taxes under the McCain plan.

Tax revenues will increase robustly over the next few years with Mr. McCain's overall tax strategy as the economy grows -- even with conservative economic growth assumptions. And by maintaining strong control over the growth of government spending, Mr. McCain will bring the budget into balance. His long record of fighting against excessive government spending, his plans to veto earmarks and reverse the spending binge of the past few years, and his strong commitment to balancing the budget can make this goal a reality.

Mr. McCain's tax policy stands in strong contrast to Mr. Obama's ever-changing tax proposals. Although it is difficult to know just what Mr. Obama would do if he were elected, it is clear that he wants to raise taxes on personal incomes, on dividends, on capital gains, on payroll income and on businesses -- all of which will hurt the U.S. economy. He regards the tax system as a way to redistribute income, and disregards the resulting adverse incentive effects that reduce employment and economic growth.

Mr. Obama's claim to being a big tax cutter defies credibility. His assertion that he would cut taxes on 95% of families reflects his one-time $1,000 rebate payouts, and a variety of new government spending handed out through the tax system.

Mr. McCain, on the other hand, has been clear that he wants to preserve the favorable incentive effects of the existing low tax rates -- and to reduce taxes in other ways that will strengthen the economy, create jobs and help current taxpayers, including those without health insurance.

Messrs. Feldstein and Taylor are economic advisers to John McCain and professors of economics at, respectively, Harvard and Stanford.

See all of today's editorials and op-eds, plus video commentary, on Opinion Journal¹.

And add your comments to the Opinion Journal forum².

	URL for this article: http://online.wsj.com/article/SB122031215585888783.html
	Hyperlinks in this Article: (1) http://online.wsj.com/opinion (2) http://forums.wsj.com/viewtopic.php? t=3878

Copyright 2008 Dow Jones & Company, Inc. All Rights Reserved

www.ruffcommunications.com