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August 15, 2008

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bad

Foo never explained when my money became his money.

Don't hold your breath...

bad

Drudge is still pushing Kerry as BO's VP.

Captain Hate

Foo never explained when my money became his money.

Foo was last engaged in some casuistry about how I was robbing my kids' money, which is a strange turn of events if true.

kim

He dragged the red herring of Republicans spending his money across the path. Typical Foo Bar.
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kim

Halp me jon cary, I am stuk in Dinver, snawrling katz ever wair.
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sbw

"when my money became his money" may sound simplistic, but it gets to the heart of the absence of principle -- or the unwillingness to admit to certain principles -- within the Democratic Party.

Steeped in situational ethics, they have adopted economic practices that have never worked in history and that undermine their intended goals.

They are users of wealth, not creators of wealth.

Do they not recognize it or do they not care?

MayBee

JMH- "Windfall Income Tax". I'm thrilled we're thinking along the same lines!

Danube of Thought

Neil Cavuto says the prez race is over, and Obama has lost.

I don't think Obama has the authority to fire the DNC chair, but I'm not really certain. Sure hope he doesn't; that clown is a great asset for our side.

If Kerry is the pick, it will be interesting to see what the SwiftVets do. The press will be utterly merciless in denigrating them this time around.

Tried to post this a moment ago with a LUN to Cavuto, but got flagged as spam. This is a test as to whether the LUN caused the flag.

bad

Patrick Ruffini makes the case for Hillary as VP.

LUN

Barney Frank

I think FooBar was pretty successful in keeping the debate on point as to Obama's tax plan and whether he could be trusted to keep his word and whether it would result in larger revenues than Reagan or Bush and that it amounted to a tax cut.
Unfortunately the real debate should be that we hope to God he doesn't keep his word because it is a horrible tax plan. Raising taxes on the most productive segment of the economy and the segment which produces most of the jobs is an economy killer.
That it also rests on preposterous panglossian assumptions about revenues and expenditures is only slightly secondary. If the knothead did keep his word and ram through what he wants on both sides of the ledger we would quite possibly be looking at the first trillion dollar deficit approaching 7% of GDP.

Captain Hate

it gets to the heart of the absence of principle -- or the unwillingness to admit to certain principles -- within the Democratic Party.

Or the unwillingness to admit to lack of principle.

MayBee

Obama supported the WGA (screenwriter's guild) strike:

The call from theBarack Obama camp to the Writers Guild of America on Monday was completely unexpected. “What can we do to help?” asked the Obama campaign worker.

So it went when the Democratic presidential hopeful inserted himself into the first day of the WGA strike against studios and networks over future earnings from new media.

Within hours, Sen. Obama (D-Ill.) left no question about where he stood: “I stand with the writers,” his statement began.

I know many of the screenwriters that went on strike are well paid. There seems to me to be a disconnect that if an employer tries to keep the worker from getting more money, Obama supports the worker. If the government wants to take money from the same workers, that's all good.

bad

Maybee

Obama shorthand: Employers BAD!!!

sbw

Cap'n: Or the unwillingness to admit to lack of principle.

When the Dem's manufactured the Bogeyman, they did themselves and their party a disservice. BDS kept them from working through principled positions.

Principles are a shorthand for lessons learned from experience. They felt no need. They are screwed... or we are.

kim

I just love the irony, sbw, that the demonization of Bush, funded in part by Soros, has enfeebled the Democratic Party, and particularly the left branch of it. That particular foretaste of Hell must gag George.
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Rick Ballard

Dot's Cavuto link.

May I add that Typhus Pad truly sucks? It is eating comments at a truly inappropriate rate.

anduril

I'm too busy too read what other people are saying before I comment, so I'll just drop this here--h/t to my brother:

Down 97%: Tax Trouble Coming For States & Cities:

Here's something you may not have considered: The massive losses taken by Wall Street Banks and Brokers is going to wipe out their profit for the next few years. About $500 Billion in write downs have already occurred. Best estimates for the total that will get written down range from $1 trillion to $2 trillion dollars.

That's not only very bad for the firms, their shareholders and employees -- its also going to be very challenging for the regions where they are headquartered and do much of their business.

In New York State, the 16 largest banks sent taxes totaling $5 million in the most recent reporting period; that compare with $173 million from the same period a year ago.

Taxes paid are down an astonishing 97%!

And, its not just New York. Other money center regions in the US are running into similar problems: California, Connecticut, Virginia, Illinois, and Massachusetts are also likely to have related tax shortfalls. There will be other cities and states beyond these.

At a minimum this will make the local politics pretty interesting, but I suspect it will have some impact on national politics as well--but maybe not till after the election.

anduril

Hey, don't we need a new Georgia/foreign policy thread? The old threads are getting awful long and unwieldy.

bad

After the Rooskies invaded Georgia, BO was probably:

A. Hoping it would all go away while he could claim, "I'm on vacation."

B. Hoping to lose in November when it didn't just go away. Its more fun to criticize leadership than to BE leadership of the free world with Rooskies on the march.

or

C. He hearts Putin.

kim

I like Neil about the Dems: 'They had it in the bag and just puked in it'. No wonder we're getting the trolls we are; the bitter bits of bile at the end.

In other news, Good Morning and Bon Appetit for your cafe au lait et de la brioche.
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Ranger

Hot Air as a post up about Obama breaking his no soft money pledge. It seems the Dem convetion is so short of funds that the Obama campaign itself is out calling deep pocket Dems and unions asking for soft money.

Just goes further to re-enforce TM's suspisions of any promis this man makes about the future.

kim

dang, I misssed 'hurling the last bitter bits of bile'.
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DebinNC

Fortunately, Obama can't do anything unless he's elected, and he can't hide who he is all the time.

Hot Air has a piece on Obama's new logo which offers a glimpse of BO's not-like-us aspect. Supposedly, it's aimed at the bitter-clingers who question Obama's patriotism. Is the symbol used generally recognizable? It isn't to me.

My first thought when I saw it was that Team Obama really dislikes the American flag (the classic symbol they bypassed), which imo only reinforces the "He's ashamed of our country" theme. All the shiny, lauded plans in the world won't overcome that imo.


kim

Ho Ho, I'm sure deep-puma'ed, I mean deep-pocketed Hillary went heavily into more debt to buy her a place on the stage.
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kim

You want bitter? Lots of bitter. Bitter all around. Like balloons and glitter, it's everywhere. The political theme for the whole year. Go balloons and glitter. More goons and more bitter. Go!
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Uncle BigBad

bgates

Thanks for the correction. I was operating from a faded memory and in an excess of generosity just couldn't bring myself to believe the figure could be 0.7. I recall Moloch-Brown (living rent-free in Soros's Westchester house) rubbing his hands Uriah Heepish at the thought of the windfall.

cathyf

I posted this on the other thread last night:

Obama says that he wants a big new tax on gasoline, heating oil, diesel fuel, plastics made from petrochemicals, etc. So if McCain is "lying" when he says that Obama has promised to raise taxes on my family, then that must mean that Obama is promising that when he is elected that families making less than $250K/yr won't be able to afford to buy gasoline, heating oil, diesel fuel, plastics, anything which is transported in a vehicle (other than a sailboat), anything that is planted/harvested by a machine, etc.

BobS

Mornin' Gang! My favorite read so far is Michael Barone's fascinating insiders piece on the 1980 Dem convention. I can't help but see how something similar translates to this year's convention as you know the Clinton's will still be willing to steal it.

LUN

Ranger

McCain and the RNC should jump on this soft money thing. McCain should publicly call out Obama. Something like:

Sen. Obama make a big deal out of his promis not to take soft money, and he stated absolutely that the DNC wouldn't take soft money either. Now, the his campaign and the DNC are activly soliciting soft money. I call on Sen. Obama to re-affirm his promis and return all the soft money he and the DNC have raised, or explain why he chose to brake his word to the American people. If Sen. Obama and the DNC keep this soft money, we will know that their campaign isn't about hope and change. It is really just smoke and mirrors.

The RNC should also run ads during the Democratic convention that remind people the convention was paid for by soft money the Democrats promised they wouldn't raise.

Danube of Thought

Nice to see that about the loss of tax revenues from banks. Live by the sword, die by the sword.

The California deficit that got Gray Davis recalled arose because the state had relied so heavily on income tax revenues from very big earners. When the number of such earners dropped sharply, and their earnings dropped as well, the revenues dried up--but Davis and the legislature kept spending.

As many have pointed out here, US personal income tax revenues come disporportionately from a very small percentage of taxpayers. Watch out.

anduril

Apologies--really--for intruding on this thread. However Rick Moran this morning made a deeply stupid blog re the Polish - US arms deal, in which he stated: "Funny how a little aggression from Moscow works wonders on concentrating the minds of those Polish negotiators"--as if the Poles had EVER been unmindful of Russian hostility. This is so typical of the uninformed commentary that's making the rounds these days.

The well documented facts are that the new Polish government has been holding out for a better deal with the US than the previous government had been prepared to accept, involving much stronger US commitments to Poland. In the wake of the Georgian invasion it was the US's mind that got strangely focused: the US quickly gave Poland essentially everything it was asking for. There was never any doubt that the missile pact would go forward. The only question was: on whose terms. The answer: Poland's.

By holding out for a better deal, Poland forced the US to make Poland an offer that Poland couldn't--and didn't want to--refuse. Notice the significant language used by the Polish Prime Minister, Donald Tusk:

In an interview on news channel TVN24, Tusk said the United States agreed to help augment Poland's defenses with Patriot missiles in exchange for placing 10 missile defense interceptors in the eastern European country.

He said the deal also includes a "mutual commitment" between the two nations to come to each other's assistance "in case of trouble."

That clause appeared to be a direct reference to Russia, which has threatened to aim its nuclear-armed missiles at Poland — a former Soviet satellite — if it hosts the U.S. site.

Poland has all along been guided by fears of a newly resurgent Russia, an anxiety that has intensified with Russia's offensive in Georgia, a former Soviet republic. The incursion, along with the bombing of military posts and airfields inside Georgia, has underlined a palpable fear in the region of Russia's renewed vigor and confidence.

In past days, Polish leaders said the war justified Poland's demands that it get additional security guarantees from Washington in exchange for allowing the anti-missile base on its soil.

Talking about the "mutual commitment" part of the agreement, Tusk said that the North Atlantic Treaty Organization would be too slow in coming to Poland's defense if threatened and that the bloc would take "days, weeks to start that machinery."

"Poland and the Poles do not want to be in alliances in which assistance comes at some point later — it is no good when assistance comes to dead people. Poland wants to be in alliances where assistance comes in the very first hours of — knock on wood — any possible conflict," Tusk said.

He said that armed with Patriot missiles, Poles "will be able to effectively protect our territory."

Tusk makes it abundantly clear--as I wrote yesterday--that to Poland NATO is meaningless...without the US. Poland demanded, and received, not only US defense commitments but also the military hardware (Patriot missiles) that would give Poland its own independent deterrent and defense--independent even of the new US commitment. What a wonderful example of a nation sizing up its national security interests and needs and acting upon that very realistic assessment.

Rick Ballard

"Apologies--really--"

Not accepted. There are other threads and your abuse of JOM's bandwidth (which costs money, BTW) shows a lack manners which apology does not relieve.

BobS

Anduril: I see your point - nuances and all. But I fail to see the point in smearing Rick Moran.

anduril

Not a smear--an accurate characterization. Note that my characterization does not extend beyond the specific blog. The facts of this case are well documented. The negotiations have been going on for a long time, quite publicly. Rick has an obligation to do just a tiny bit of research--which has you can see could have been accomplished with one google search.

MayBee

The Georgia/Russia conflict has generated a surplus of newly-minted foreign policy experts.

anduril

To be extra clear, Bob, I don't state that Rick is deeply stupid, only that specific blog. Even I have made mistakes, and have been called on it in no uncertain terms.

glasater

Anduril--Rick B needs no defenders for sure--but why in the world is he obligated to do research on a subject you brought up?

sbw

Well, [embarrassed] I've certainly gone off topic on TM's dime. I rationalize it as part of the charm of the place. ;-) ... Okay, it was my ego.

Actually, Anduril, I think that the reason the US changed its position to sign the Polish deal now was obvious... appropriate... and not worth the lengthy extra bold.

anduril

glasater--Rick M. As in Rick MORAN. If you weren't so intent on scoring on me, you would have read what I wrote correctly rather than blinding yourself. Rick MORAN wrote the blog, and this is my comment upon it. Other commenters responded to Rick MORAN directly.

Danube of Thought

He's talking about Rick Moran, not Rick Ballard.

anduril

sbw, normally I might agree with you. However, Tusk's statements were so clear in his assessment of NATO, and Poland's actions were so clear in their assertion of their own national interest, that I thought this was a particularly effective counter to some of the uninformed commentary that is flooding the internet. I resisted the temptation to link and quote Der Spiegel's (German) perspective.

anduril

BobS, I notice that the WSJ has a short Op-Ed piece on the same issue, and it may be that Rick MORAN borrowed from them. WSJ: "Russia's invasion of Georgia seems to have concentrated the minds of at least some politicians in Europe." The WSJ's assessment is, IMO, also "deeply stupid." And, as you know, I cite the WSJ frequently in support of my own positions.

anduril

And, glasater, the WSJ, IMO, has an even higher obligation than does Rick MORAN to do a bare minimum of research and backgrounding before expressing "deeply stupid" opinions.

Foo Bar

Ranger:

I was talking about all mutual funds and pensions funds, the insitutions that provided the investment mechanisims for almost all retirement plans. Pension funds must pay capital gains tax on any income they make

Is this right? How do you explain this excerpt from a congressional study?

High capital gains tax rates lower the potential return from backing innovative companies, thus restricting the amount of venture capital available to new firms. Some analysts argue that most venture capital comes from tax-exempt sources such as pension funds and foreign investment; therefore, a capital gains tax reduction would not have much effect on venture capital.
JM Hanes

kim:

"Well, Rick, McCain/Lieberman might beat them but McCain/Romney might not."

I'm not sure why Lieberman's name keeps comimg up as a pontential VP. What is his positive effect on the ticket supposed to be, especially in terms of the Electoral College count? I’m not even sure how much he ultimately delivered to the Gore campaign; he caught a lot of flack for adjusting his famous principles to suit the moment, and flipping parties will look a lot more self-serving if it means his own advancement.

When McCain has a chance to throw disaffected conservatives a bone, why stamp Lieberman's name on it instead? I also think that McCain’s somewhat laissez-faire attitude on the abortion issue makes him sufficiently palatable in many quarters to defuse additional controversy on the Republican side. Even as a pro-choice Republican myself, I would argue that a pro-choice VP pick could cost McCain more votes than it garners — in part by putting him in the counterproductive position of having to shore up his own pro-life credentials, which could hurt him with the very potential cross-overs and Independents who would ostensibly find Lieberman appealing.

In addition to stirring up the Republican base all over again, I just don’t see Lieberman cutting deeply into the Democratic vote or pulling in large numbers of Independents that McCain is not already attracting himself. One devastating downside, however, seems indisputable. Does anyone think Connecticut will put a Republican in Lieberman’s Senate seat — as opposed to a potentially pivotal 60th Democrat?

Lieberman might look slightly less bad if Clinton were on the Obama ticket. It would be hard to press the "old politics" argument with four Senators in the running. Romney, however, not only has a head start on the swing state demographic front, he can argue economics to both sophisticated audiences and laymen, where McCain is at his weakest. McCain certainly needs no help on the hawkish front, and a liberal is hardly going to shore him up on economic issues. There seems to be almost universal agreement that Michigan and Colorado (along with Virginia and Ohio) could be make or break states for McCain. Note the Obama camp's response to California's complaint about their ticket allotment for Obama's acceptance speech:

"Our goal of going to Invesco was to get as many residents of Colorado into the arena to see the speech because this is a battleground state," said Jenny Backus, senior campaign adviser. "Having that event here gives us the opportunity for [Obama] to take that message to them in their own back yards."
Lieberman could conceivably help in Florida, where McCain's lead was down to 1 point in early August, but taking Fla. back will be far easier than making advances on other key battlegrounds. I really think choosing Lieberman would be a self-indulgent, unforced, likely fatal, error.

BobS

anduril: Infering that Moran used WSJ's opinion and use of the word stupid indicate to me you may have some sort of problem with Moran. I have quite a bit of respect for Moran, and while I have disagreed with him at times, I've not challenged his itegrity or intelligence. Perhaps its your own inner left leaning ways that brings out such personal attacks when you disagree with someone.

sbw

Lieberman adds unnecessary uncertainty to election calculations that make it seem unlikely he'll be selected by McCain.

But McCain could add just about anyone short of Teddy Kennedy and not change my vote.

glasater

Apologies to you Anduril. Was fogged from reading Spenler's Forum on WW III earlier:-)

Porchlight

I'm not sure why Lieberman's name keeps comimg up as a pontential VP.

FWIW Hannity said yesterday his inside sources have told him it's down to Lieberman or Romney.

I also heard some NPR "analysts" giggling about how choosing Lieberman would be a Hail Mary. (They were clearly proceeding under the assumption that Obama has it in the bag.) They described a Romney choice as bringing "money plus Michigan" and played that down as if it were no big deal. But bringing in Michigan would be huge, as they well know.

I think Florida is probably safe anyway so Lieberman is far too risky for reasons JMH outlined above.

BobS

With respect to the Rep VP pick, I'd enjoy hearing your comments about Huckabee's take down of Romney this week. And are Evangelicals really going to be up in arms if it is indeed Romney.

bad

Lieberman is McCain's eye candy for independants. Gives him street cred with the muddle and anyone still hopeful for bi-partisan politics. He won't be VP pick.

DrJ

Some analysts argue that most venture capital comes from tax-exempt sources such as pension funds

Those analysts are wrong. Deeply and profoundly wrong.

Pension funds get involved only in venture financing when companies are comparatively mature and low risk, albeit pre-IPO or other liquidity event. Early- and mid-stage companies are funded exclusively by private investment. You cut that out, and there are none of those comparatively low-risk start-ups in which to invest.

This is sheer idiocy.

BobS

Good one bad...eye candy for independents

JM Hanes

FooBar:

"Some analysts argue that most venture capital comes from tax-exempt sources such as pension funds and foreign investment; therefore, a capital gains tax reduction would not have much effect on venture capital."

"Some [anonymous] analysts" is the formulation you use when you have no substantive basis for the view you're putting forward. It's a useful technique for everything from ass covering provisos to disclaimers intended to blunt unpalatable realities. The reality here is that as you increase the penalties for cashing in on successful investments, you slow the movement of funds into further ventures.

DrJ

I should clarify: by "private investment" I mean taxable, for-profit individuals, groups of individuals ("angels"), and more institutional forms like VC and company funds. You choke the profits of these off, and the venture business is dead. And with it, technology innovation.

My great fear in the election cycle is that a Dem gets elected, and nationalized health care comes onto the table. If that happens, my company will be dead. There will be no more venture capital until things settle down, and that will be too late for me.

kim

And, of course, abuse of the formulation weakens your rhetoric. Shall I wave my arms about and otherwise gesticulate to make my point?
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narciso

Anduril, I've cut you some slack, but if you keep posting from Mr. Big "It's Over Man" (like Hicks in Aliens)Picture, it will be harder to do so. Poles, by their historical experience with Czarist & Soviet Russia as well as Nazi Germany; know a little about self preservation. The Tusk govt. decided that 'safeguards are a wise move' and leaned toward the BMD option.

Russia's venture toward Georgia, (despite Russophile comment everywhere it seems including McClatchy's Joe Galloway, who couldn't have misread the facts right, if he tried) may have wandered into another regional quagmire, driven by their ethnic sympathizers (Afghanistan in 1979, following
the Taraki clan, Chechnya in 1994 where Dudayev, an ostensible ally turned into one of many formidable foes)I come across this viewpoint, first by glancing at this passage

"I was traveling along the military road back from Tiflis. The only luggage in the little cart was one small suitcase half full of travel notes about Georgia. Fortunately for you most of them have been lost since then, though luckily for me the case and the rest of the things in it have survived.

The sun was already slipping behind a snow-capped ridge when I drove into Koishaur Valley. The Ossetian coachman, singing at the top of his voice, tirelessly urged his horses on in order to reach the summit of Koishaur Mountain before nightfall. What a glorious spot this valley is! All around it tower awesome mountains, reddish crags draped with hanging ivy and crowned with clusters of plane trees, yellow cliffs grooved by torrents, with a gilded fringe of snow high above, while down below the Aragva River embraces a nameless stream that noisily bursts forth from a black, gloom-filled gorge and then stretches in a silvery ribbon into the distance, its surface shimmering like the scaly back of a snake."

This is from Lermontov's "A Hero of Our Time" back in 1840! his hero Pechorin, was also dealing with about the 50th year of the occupation of Chechnya, began by Yermolov. Jacksonian's most recent post on the subject, is illustraative of the post.

bad

Bobs, in Feb. of last year I predicted a Hillary/Guiliani race...look how well that turned out.

Rick Ballard

"Some analysts argue that most venture capital comes from tax-exempt sources such as pension funds"

DrJ - Same guys that thought stuffing portfolios with nice blends of mortgage backed securities and CDOs was a sure thing with no risk. They then shifted to $200 oil and $1200 gold.

"Some analysts" are idiots and have customers whose portfolios prove it beyond doubt.

BobS

I was on the Rudi bandwagon. I still wonder what would have happened had he not ignored the early primaries. It looks like Hillary was out manuervered by Obama who got operatives out to secure the caucuses. But I have to admit, that I'm become pleased with McCain.

DrJ

"Some analysts" are idiots and have customers whose portfolios prove it beyond doubt.

No question about that.

The VC business really is very simple, but not understood the most people. I view the quoted statement (or article) as part of a propaganda campaign by people who do not want to know, and by their ignorance will kill innovation. Sadly, it does influence people.

I used to tell people that I sought to create wealth. The response was akin to telling them I had just shot their dog. So now I just say that I kill trees (mounds of paper, don't you know).

Foo Bar

Folks:

I'm not taking a position on how much venture capital comes from pension funds. Ranger was claiming that pension funds have to pay capital gains taxes. I posted that excerpt as evidence that they do not, unless I'm misunderstanding something.

JM Hanes

anduril:

When precisely did NATO meant anything other than U.S. protection? European investment in their own defense capabilities over decades has been so minimal, and their terms of engagement so constrained that the idea of combined forces has long been a political fiction. If not for increasingly intense pressure on multiple fronts from the U.S., continental western Europe would have been perfectly content to continue that status quo indefinitely. Regardless of how one feels about our intervention in the Balkans, the sad fact is that without U.S. assistance on even something as basic as transportation, Europe could not have projected its collective forces into its own backyard. The disparities in both hardware and training has made force integration a military nightmare.

JM Hanes

Sorry, Foo Bar. I misread the context.

DrJ

I'm not taking a position on how much venture capital comes from pension funds.

Then why on earth did you use that truly stupid quote, together with the emboldened section? You thought it supported your position; when you are called on it, it is no longer relevant?

Idiot.

Ranger

Is this right? How do you explain this excerpt from a congressional study?

Some analysts argue that most venture capital comes from tax-exempt sources such as pension funds

Posted by: Foo Bar | August 16, 2008 at 01:06 PM

Well, that is true if the pention fund completely manages its own portfolio. But very few pension funds actually manage their entire portfolio themselves. Most pension funds work with some form of financial service instiution to actually build and manage some their portfolios. When pension funds invest with private equity firms, they still are taxed indirectly the way that individual investors who buy mutual fund shares are taxed indirectly (though not quite as heavily).

http://64.233.167.104/search?q=cache:NXcGDHRTRp4J:article.nationalreview.com/%3Fq%3DY2JhZTliZjMwZDhmYTk5NTZlNGNlMGE1NDRlZTA3Njg%3D+Pension+funds+Captial+Gains+Tax&hl=en&ct=clnk&cd=3&gl=us>This article does a good job of explaining how an increase in capital gains tax would effect overall wealth accumulation.

I've exceprted a key part here that explains how pension funds end up paying captial gains tax indirectly.

When limited partners (usually pension funds, university endowments, and wealthy individual investors) invest in a fund, they typically agree to pay the general partner who runs the fund an annual fee of 2 percent to cover management costs. They also agree to give the general partners a piece of the upside, the capital gain, if the investments are successful. That portion of the capital gain, typically 20 percent after the original investment and a specified rate of return is paid out, is known as the carry, or carried interest.

The management fee is earned income, and is taxed as such. But a capital-gains treatment for the carried interest is appropriate since it is capital income. And since the carry represents a portion of the fund’s capital gain, taxing it at the full individual rate would exacerbate the double-taxation of capital gains, since the portfolio companies already pay corporate tax.

Additionally, taxing carry as ordinary income would represent an enormous tax hike that would drive investment partnerships out of the U.S. and force limited partners to offer higher pre-tax participation to general partners, lowering returns for millions of Americans whose pensions are invested in private equity and removing critical support, via buyouts, from the stock market.

I would note that simply raising capital gains taxes accomlishes nearly the same thing as counting this captial gains income and regular income.

I will grant you that the effect of this on pension funds is not as dramatic as it is on privately owned mutual fund shares. But there is still an impact and a diminishment of the return the fund will make over time.

And you still haven't addressed the issue that all mutual funds have to pay capital gains, so that even those who have "tax exempt" accounts have their wealth accumulation diminished by capital gains tax. Given that 401K and IRA accounts have become the predominant way that people save for retirement, the fact that formal pension funds take less of a hit doesn't mean that the average middle class American is not still paying a lot of this capital gains tax on the rich.

JM Hanes

Ranger:

"The RNC should also run ads during the Democratic convention that remind people the convention was paid for by soft money the Democrats promised they wouldn't raise."

You'll be please to hear how Mac is apparently going to use a big chunk of all that money he has to spend before the Republican convention: The Democratic National Convention brought to you by … John McCain? .

Ranger

BTW FUBAR, how do you feel about Obama breaking his promis on not soliciting or accepting soft money?

Ranger

Posted by: JM Hanes | August 16, 2008 at 02:34 PM

Yep, good stuff!

Foo Bar

Dr.J:

My bad for posting something from Republican congressman James Saxton.

anduril

BobS, I have no particular problems with Moran, and no inner Leftist leanings--a really bizarre suggestion, really.

glasater, no problem.

nariciso, PLEASE, don't cut me any slack at all.

JMH, back during the Cold War--which seems so long ago, but really isn't--some of the Western militaries were pretty capable, at least within their theatres. Some of them are pretty hapless even there, now.

JM Hanes

anduril:

There's actually a reason that the U.S. defense budget has always dwarfed the collective allocations of our NATO allies who were spending their money on social safety nets under our military umbrella.

anduril

BobS, I have no particular problem with Moran, and the notion that I have any inner Leftist leanings is...bizarre.

glasater, no problem, but be careful lest you import any heresy. :-)

narciso, PLEASE, don't cut me any slack at all! LET 'ER RIP!

JMH, back during the Cold War--really not that long ago--some of the Western militaries were comparatively more capable than they are now. For us to downsize to the extent that we did was IMO unwise, but for others was downright foolish.

Sorry if this is a double post. Something funny happened.

DrJ

My bad for posting something from Republican congressman James Saxton.

Idiocy (or lack thereof), unfortunately, does not follow party lines. The Republicans get right more often in this area than the Democrats, though. That does make it any less idiotic.

Nor does your choice in quoting it.

anduril

WHOAAA! That was really weird!

JM Hanes

There's also a reason that Russia has worked so hard to sell NATO expansion as a provocation, not a deterrent -- an effort that now appears to be paying off. The purpose of that bright red line become crystal clear in Georgia, where the risks of a planned excursion looking for a pretext would have increased exponentially with almost any extra-Georgian operational response.

The conditions laid out by Medvedev for a "a definitive settlement" are revealing. "First, Georgian troops should return to their initial position and be partly demilitarised. Second, we need to sign a binding agreement on non-use of force." Disarming the Georgian military, of course, will make ushering the pro-western "lunatic" Saakashvili off stage considerably easier (current accusations of atrocities are part of the ongoing effort to cultivate the Kosovo equivalency), and the binding agreement Russia has in mind includes a permanent commitment to Georgia's non-NATO status. If NATO were no deterrent, it would not be a Russian obsession.

The insanity here can be found among those who, in a spasm of faux realism, are willing to write Georgia off as Russia's rightful near abroad, when control of the Georgia/Azer pipeline will give Russia a virtual stanglehold on European energy. Those who insist that NATO should continue in post-WWII mode regardless of the intervening half century just strike me as wilfully blind.

BobS

Anduril: Then I suggest you should have more tactfully found way to disagree with Moran rather than making a declaration about intelligence.

anduril

JMH, I disagree with you on this. (Heh, I just said that to give Gmax an opening for one of her crushing putdowns.) I'm not going to repeat everything, or even much, that I've been saying on this topic.

First, the Western Euros understand Russia every bit as well as or better than we do--they've been dealing with them for a couple of centuries now. As I explained yesterday, NATO nations like Germany are very much aware of the difference in NATO expansion that includes Poland, the Czech Republic and Hungary, and NATO expansion into, say, Georgia. They supported the former and opposed the latter.

Second, please note that Bush is already caving to Putin. Puh-leeze, Vlad, the Cold War is over! Can't we just get along? Willfully blind? The US policy of isolating Russia was the continuation of the Cold War, your "post-WWII mode." And Georgia was Russia's attempt at a breakout. Please note--I'm not predicting continued Russian success. As I've noted before, Russia's hand is not as strong as the US hand and the Russians know this, but the smart US play is to rethink it's overall strategy, as Bush is hinting at already. If the Russians are as smart as I think they are, they'll be fairly quick to grab at that opportunity. That's why they've been telling us to choose them over Georgia. That doesn't mean laying down for the Russians; it simply means being more realistic.

Third, we're using our Western Euro allies to help us out here, and in the process we're giving Russia's Medvedev an opportunity to act and look like a statesman apart from Putin--an opportunity he probably never would have had but for the Georgian affair. Note some of the telling language in this Spiegel account of the Merkel - Medvedev (sorry if you've already read it):

Merkel suggested after the 90-minute meeting that there was "no solution yet, but progress." Medvedev said there were "contradictions, which nevertheless can be solved."

...

Merkel told Medvedev that "the territorial integrity of Georgia" was a precondition for any solution. She said Russia should understand that argument, since Moscow had violently put down a rebellion of its own in Chechnya. Medvedev argued that people in Abkhazia and South Ossetia were unlikely to accept life under Georgian rule after the recent hostilities.

Merkel argued for an international peacekeeping presence in Georgia, and Medvedev reportedly said, "We are not against international peacekeepers." But Abkhazia and South Ossetia, he argued, would only accept Russian troops.

On Another Post-Soviet Frontier

Medvedev also commented on a surprising comment made Friday morning by a top Russian general.

General Anatoly Nogovitsyn, speaking at a news conference in Russia, criticized a final agreement on Thursday between Poland and the United States to install Patriot missile batteries in Poland. Nogovitsyn said that according to Russian military doctrine, those missiles could be a target for Russian nuclear attack.

...

"Poland, by deploying (the system) is exposing itself to a strike -- 100 percent," said Nogovitsyn, Russia's deputy chief of staff.

In Sochi, though, President Medvedev softened the remark by his general, saying the agreement between Warsaw and Washington was "sad news for all who live on this densely populated continent, but it is not dramatic."

Comments:

1. Notice the cordial, reasoned, give and take. This is precisely the impression that the Russians want to make on the Western Euros. Merkel agrees that there is progress, and Medvedev acknowledges differences--which can be overcome. Beautiful. We can talk and work out our differences if you treat us with respect. I expect this is playing well in Europe.

2. Even more dramatic is the Russian expression of accommodation toward the new US - Poland pact. No one is in any doubt about the true Russian attitude toward this pact, which Medvedev calls "sad...but not.. dramatic." However, Medvedev in these comments shows that the Russians understand that Euro perceptions of Poland's NATO membership and security concerns are very different from similar perceptions of Georgia. Again, sweet reason is a beautiful thing.

3. Clarification re the Russian general's comments. The actual meaning of what he said was this: if the Russians and the US get into a nuclear exchange the Russians will feel free to target Poland. Does anyone think the Poles didn't understand that already? All the more reason to get those Patriot missiles that the US had been reluctant to give them! Of course, the Poles also know that if the Russians and the US get into a nuclear exchange the likelihood is that Russia's attention will be rather fully occupied with American activity.

Over to you narciso--and, mind you: no slack at all!

sbw

I've googled around and come up no better off than before. Why wouldn't a pension fund pay capital gains?

We have a pension fund for employees. Their investments accrue tax-deferred, but the tax is only deferred, not removed. It seems that any capital gains (or losses) would be due on withdrawal.

Or does a state-sponsored pension fund get special treatment. It would figure if they would.

Cecil Turner

Not sure I'm buying the agreement as entirely a change by Washington as opposed to Poland. PM Tusk backed out of a previous tentative agreement in July, saying the one-year Patriot basing was insufficient:

"Air defense elements that would specifically defend Polish territory are absolutely key for Poland," he said. "A temporary visit by such weapons, guaranteed only for one year, naturally does not increase our sense of security."
But the current agreement also only guarantees a temporary basing of Patriots, so it doesn't appear to be much of a change on that specific point. A skeptic might think he was finding a reason not to sign off on it because it was politically unwise and domestically unpopular. The former negotiator claimed precisely that last week:
Witold Waszczykowski said in an interview with the Polish edition of Newsweek that Tusk was driven by domestic political considerations rather than Poland's strategic interests in rejecting the shield offer last month.
I don't think there's much doubt that the Georgia situation increased willingness of the Administration to deal. But the reports out of Poland suggest it was mutual:
The situation in Georgia moved many people in Poland, reminding that peace is not always guaranteed. In such an atmosphere it will be easier to reach an agreement on missile defense, says Bogdan Klich, Minister of National Defense: 'We feel at the moment a greater concern for our safety. That's why every installation of the western world on the Polish territory, whether it is an American installation or a NATO one, has its meaning, because it anchors Poland more deeply to the West.'
In any event, it seems to me the greatest impact was among the Polish electorate . . . which in the end made the deal possible.

Pagar

BobS-" It looks like Hillary was out manuervered by Obama who got operatives out to secure the caucuses."

From a site that highlights the many problems with the Democrat caucuses authored by Lynette Long.


"It's the triumph of fraud."

"I've spent the past two months immersed in data from the 2008 Democratic caucuses. After studying the procedures and results from all fourteen caucus states, interviewing dozens of witnesses, and reviewing hundreds of personal stories, my conclusion is that the Obama campaign willfully and intentionally defrauded the American public by systematically undermining the caucus process."

I do not believe anyone can read the info at that site and still believe that Obama is the legitimate winner of the Democrat campaign. It is my fervent hope that each state Attorney General is reviewing the info
posted.

LUN

In addition, I would like to point out that every objection to the caucus system and the way people can be intimated, is also present in the Union check card system which the unions are trying so hard to get approved and Obama has promised them it will be approved immediately once he is elected.

anduril

Cecil, I give you credit for trying to understand what's going on, without pointless sniping. However, I still believe I'm correct--but will stand corrected if I'm not. Note a couple of things:

1. The Polish government is currently deeply divided between Tusk and Kaczynski. One of the sources from the article was from the Kaczynski faction--just something to bear in mind. To give you some idea of HOW divided, get this: Tusk tried to forbid Kaczynski from using a Polish government jet to fly to Georgia, and when he did relent the pilot landed in Turkey and made Kaczynski trek overland to Tbilisi! I don't say the source is inaccurate, but the talk of Tusk being a weathervane for public opinion has to be taken with a grain of salt. The Polish position has, in reality, been pretty consistent all along. They knew even a one year deployment would enrage the Russians, so the only sensible course was to make the deployment permanent. The fact of US control (see below) is a new twist to me, but the permanent US base is also new--and unwelcome to Russia. All very interesting to me.

2. The articles you cite are all before the new agreement. In one, however, we find this passage:

At the same time, the Caucasus conflict made many realize the importance of anti-aircraft defense, most notably Patriot missiles on Polish territory: 'I think Poland will be even more insisting on getting it on permanent basis and I think it may have influenced slightly the American perception that perhaps having it permanently installed in Poland is not such a bad idea,' added Szklarski.

So, Szklarski is saying that he thinks the Georgian events have moved the Poles to be more insistent on permanent basing and thinks the Americans are likely to reconsider their former insistence on temporary basing.

Now look at this article: Poland agrees to install US-controlled missiles. This is simply the very first article that popped up in my google search.

"Our arguments about the need for a permanent presence of US troops and missiles on Polish soil have been taken seriously by the American side," said Mr Tusk.

"The events in the Caucasus show clearly that such security guarantees are indispensable."

Foreign minister Radoslaw Sikorski, who headed the final round of talks in Warsaw, said "the rising international tension, which has caught us by surprise, makes security guarantees even more important than ever".

Talks had dragged on for months, foundering on US unwillingness to make Patriot missiles available to boost Poland's air defences. At one point, the Polish government considered postponing a deal until after the US presidential election.

According to early details of the agreement yesterday, Washington will supply Warsaw with some Patriot missiles for free and sell others at a discount.

From 2012, American troops will run the anti-missile facility from a new US army base to be established in northern Poland.

So I think you can see that the presence is permanent and that this was at the insistence of the Poles.

JM Hanes

anduril:

"Notice the cordial, reasoned, give and take."

That was parody right?

Apparently it hasn't occurred to you that the U.S. might have deferred to Poland on missile deployment, because events in Georgia made pushback of more essence than terms. The Poles were certainly not unaware of what the reaction to that timing in Moscow would be. They are in no position to dismiss threats of potential nuclear havoc as mere bluster, so concluding the agreement at this pivotal moment was certainly not an inconsequential proposition. This is, indeed, an "example of a nation sizing up its national security interests." Given the attendant risks, I see no reason to characterize them as having done so at the expense of our own interests -- unless you're suggesting that U.S. security demands that allies be compelled to sacrifice any independent capacity to respond to threats as they see them on their own. That would seem especially perverse when new Europe seems considerably more inclined to support NATO operations on the ground than old Europe does.

Germany is rethinking its agreement to eliminate nuclear power by attrition in favor of Russian delivered energy as we speak, so things are not nearly as smooth as they appear on the surface -- and the surface is what you're describing here. They are not the only state reexamining their positions in light of Russian adventurism, and their conclusions are not yet nearly as obvious as you seem to think they are. The new Russian oligarchs, led by Putin, have been busy "nationalizing" control of resources into a very few hands. They are an ideology free Russian mafia writ large and they do not want to join Europe; what they have in mind is a new Eurasia centered on Moscow. Here's Medvedev's version of your "sweet reason." Feel free to take that declaration at face value, assuming you can actually discern his meaning.

It's my impression that other than vaguely suggesting that the U.S. ought to "rethink it's overall strategy," and simultaneously faulting Bush for both isolating and cozying up to Putin, you don't offer much on the new strategy front beyond deferring to putatively superior western European diplomatic skills. I would suggest that's because finding the right mix between engagement and defense, and determining where lines should or should not be drawn is a challenge to even the most sophisticated observers -- among whom you will also find disagreement. Neither you nor I qualify in that regard, no matter how many sources we might ponder, so I believe a certain caution about flinging around charges of stupidity is in order. The jury is still decidedly out on how the chips will ultimately fall. I'm far from convinced that Russia is the winner of anything but a very preliminary round here, and the idea that we must choose between Russia and Georgia is but another convenient Russian conceit.

I will not be culling old threads for your opinions, so if you can't stand repeating yourself, perhaps you too should rethink your overall strategy of revisiting the subject.

BobS

Great link, Pagar! Thanks

anduril

JMH, you're wasting my time.

JM Hanes

anduril:

Only you can waste your time.

BobS

Notes the off-setting "WHATEVERS" from anduril and JMH

anduril

I don't mind repeating myself to a certain point, but everyone here knows how long those discussions were. It's in deference to those who took the trouble to follow the discussion in the first place, and especially those who participated, that I refrain from further repetition.

sbw

Er, anybody want to talk about the weather? It's sunny here.

anduril

Here too. I've been waiting for the sun to get low enough to stain the south side of the garage, the last side left to do. The instructions say to avoid application in direct sunlight. I'm starting now.

bad

McCain: three wisesit people
1 General David Petreaus
2 John Lewis
3 Meg Whitman, CEO of Ebay

Warren: greatest moral failure?

Mac: failure of first marriage,

America's is not giving enough to expand the good done in the world. Must serve a cause greater than self interest.

Warren: where did you go against self interest and party interest?

Mav: climate change, torture, peacekeeping mission to Beirut

war: What did you change your mind about from ten years ago?

mav: off shore drilling, it is a national security issue

Mav is much better than Obama, more articulate and charming and informative and funny.

anduril

BobS, I just came in and read the NYT article that Moran links re Poland. It's a very informative article, but doesn't in any way justify Moran's comment that I called "deeply stupid." In fact, the article stresses that Poland has long been distrustful of Russia and had pressed the US for more guarantees for fear of Russian retaliation. The description of the final deal is very interesting. It appears that a Patriot battery will be transferred from Germany to Poland and will be manned by US soldiers:

A senior Pentagon official described an unusual part of this quid pro quo: an American Patriot battery would be moved from Germany to Poland, where it would be operated by a crew of about 100 American military personnel members. The expenses would be shared by both nations. American troops would join the Polish military, at least temporarily, at the front lines — facing east toward Russia.

I take this to mean something like the following:

1. Poland gets the Patriots immediately, staffed by US soldiers until the Poles get up to speed through training.

2. The missile interceptor base--the part that we wanted--won't be operational until 2012. That will be sited on a US base in Poland.

Cecil Turner

So I think you can see that the presence is permanent and that this was at the insistence of the Poles.

I think the early reports are a bit too vague to take to the bank, but there was obviously some movement on the point. However, I'd suggest the basing of a single Patriot battery--even a permanent one--is a relatively minor issue (e.g., we have several in Germany, and have sold 'em to the Israelis). An FMS deal would be a far bigger deal, and despite what that Irish Times story said, there's no evidence of that . . . yet (but it's the logical next step). Moreover, Tusk just held that up as an example last time . . . there's no telling if he would've agreed to the deal earlier had that point been included . . . and in fact the tone of his earlier winges suggests otherwise.

On the larger point, the contention that the Caucasus conflict "concentrat[ed] the minds" of the Polish negotiators seems fair to me. It certainly was a factor (despite official statements to the contrary), and apparently a decisive one. Accepting that there was movement on both sides, the decision by PM Tusk--to adopt his political opponent's position after recently firing the head negotiator--seems to me more significant. It's difficult to say for sure, in part because the diplomatic considerations makes it impolitic for those involved to tell the truth, but the Polish part of this looks like the bigger issue, and it appears there was a change of outlook in the Tusk camp. And as Tusk said, they really "crossed the Rubicon" with this deal, both in terms of relations with Russia and their own security strategy. It's a major move, and they definitely stood up.

kim

From jmh: 'Finding the right mix of engagement and defense'. Seems this is tough for the most involved and expert, Putin, Bush, Medvedev, and Rice.

Anduril's analyses are outstanding; his opinion of them even better.
=========================================

anduril

Cecil, I understand that you're trying to find some basis to disagree with me, so I'll spell things out.

You make several contentions:

1. I'd suggest the basing of a single Patriot battery--even a permanent one--is a relatively minor issue (e.g., we have several in Germany, and have sold 'em to the Israelis).

That depends on your point of view. Russia felt that the basing of missile interceptors was a HUGE issue--and made that very clear to the Poles. That's the reason the Patriots were a BIG issue to the Poles. Tusk emphasized this in his statement. These Patriots are for Polish defense purposes, and will ultimately be Polish controlled. The fact that they were already in Germany is irrelevant, since Russia wasn't making a stink about that.

2. the contention that the Caucasus conflict "concentrat[ed] the minds" of the Polish negotiators seems fair to me. It certainly was a factor (despite official statements to the contrary), and apparently a decisive one.

Your contention here seems to be that the Poles weren't serious in the negotiations previously. That is not true. They were happy to accommodate America's plans for missile interceptors, as were the Czechs (where the radar for the missiles will be based)?, but because Russia made such a stink about it they were holding out for a better deal.

3. Accepting that there was movement on both sides, the decision by PM Tusk--to adopt his political opponent's position after recently firing the head negotiator--seems to me more significant. It's difficult to say for sure, in part because the diplomatic considerations makes it impolitic for those involved to tell the truth, but the Polish part of this looks like the bigger issue, and it appears there was a change of outlook in the Tusk camp.

This is a mischaracterization of Tusk's position.

The Kaczynski government would probably have accepted the first American proposal. Tusks position was that Poland should get more in exchange for a move that would clearly antagonize a large and historically hostile neighbor. When Tusk won the last election he adopted that position and has maintained it.

Did Tusk adopt Kaczynski's position after firing the lead negotiator? Clearly not.

Tusk fired the lead negotiator as part of the turnabout in the government. Kaczynski is a hot head (see his attacks on the French and Germans today) who antagonized most of the EU and of whom even the Americans were leery. Tusk was determined to improve relations with fellow EU countries and was determined not to sell Polish cooperation with America cheaply, as Kaczynski would have done.

Check out Russian accounts of Tusk's position:

Pravda:

Poland says 'No' to US missile defense plans

Poland’s Prime Minister Donald Tusk did not accept Poland’s offer to deploy elements of the US missile defense system in the country. The talks between the USA and Poland have been going on for 18 months already. However, Washington failed to convince Warsaw of the need to welcome US interceptor missiles in Poland.

Donald Tusk, the Prime Minister of Poland, stated Friday that the deployment of the US missile shield on the Polish territory could only result in higher risks for Poland. Mr. Tusk added that he was striving for political and defense guarantees from the USA to strengthen Poland’s security. The official is perfectly aware of the fact that Russia will aim its missiles at Poland in the event the latter gives the green light to the US missile defense system.

However, Poland is still ready to negotiate with the USA.

Note Polish awareness of Russia's stated intention to target Poland--that was one of Tusk's negotiating points in demanding further guaranatees, such as the Patriots.

Novosti Press is even more explicit:

Poland rejects U.S. missile shield terms, but ready for dialogue

WARSAW, July 4 (RIA Novosti) - Poland's prime minister said on Friday his country is not satisfied with the terms offered by the U.S. for the deployment of a missile defense base on its soil, but is ready for further dialogue.

In the long-running negotiations with the U.S., Warsaw has been pushing Washington to provide billions of dollars of investment in Poland's air defenses in exchange for allowing the deployment of interceptor missiles.

Donald Tusk told reporters: "We need firm guarantees from Washington that the deployment of a missile defense base will enhance Poland's security," but that on this issue "we did not achieve a result that would be satisfactory to Poland."

"We are ready to cooperate but we are waiting for an answer from the American side," he said.

The Polish missile base would be linked to a radar tracking system in the Czech Republic for which a deal is likely to be signed later this month. Russia vehemently opposes the plans, rejecting Washington's line that they would defend against a potential Iranian strike, and considers them a national security threat.

In an apparent reference to Russia's threat to target its missiles at U.S. facilities in Europe, Tusk said: "The fact that the installation would be built on Polish territory increases certain risks and threats for Poland."

He said the U.S. must agree to permanently deploying ground-to-air missiles in Poland to give the country the security guarantees it needs.

"Air defense elements that would specifically defend Polish territory are absolutely essential for Poland," he said.

So, the article that you cited had it exactly right: the Georgian affair only stiffened Poland's resolve to stick to its position and its demand that cooperation with American should strengthen its defense in a new way. It was the American side that changed, conceding to Polish demands largely because America wanted to appear to be taking some step to counter Russia's moves in Georgia. It was a happy coincidence for Poland that gave Poland greatly increased negotiating leverage. Tusk won by adopting a principled position, rather than selling Polish cooperation cheaply as Kaczynski would have done, just to stick a finger in Moscow's eye.

Cecil Turner

I understand that you're trying to find some basis to disagree with me, so I'll spell things out.

No, I just disagree with you.

This is a mischaracterization of Tusk's position.

A matter of opinion. Tusk nixed the earlier deal, after a tentative agreement was worked out. He called it "unsatisfactory," but didn't proffer a "satisfactory" solution. Combined with earlier rhetoric on the system, it suggests a cooling of enthusiasm for the previously agreed-in-principle arrangement, but an unwillingness to abrogate the understanding. All that changed suddenly in mid-August, and I suspect it wasn't just the US willingness to sign a defense compact and liberalize the Patriot agreement. YMMV. I don't pretend to be able to read PM Tusk's mind, but neither can you. And again, his public pronouncements are suspect at best.

Novosti Press is even more explicit:

Surely you see the problem with relying on Russian news for this issue? And yes, they (like Xinhua, unsurprisingly) want to make it look like the glorious workers' paradise is being beset by the evil Americans, who've bought off the Poles. That doesn't necessarily make it so.

Cecil Turner

Another, similar take I disagree with, from the NY Times' thought leader:

The striking thing about Russia’s subjugation of uppity Georgia was not the ease or audacity but the swagger of it. This was not just about a couple of obscure border enclaves, nor even, really, about Georgia. This was existential payback.
Yeah, whatever. The bottom line is that Putin's thugocracy is rapidly declining in influence--offset somewhat by rising energy costs--and lashed out in petulance. My read of human nature is that it's likely to produce exactly the opposite of the desired effect, and bolster the prestige of the "color" revolutions and drive neighboring governments toward NATO and the West.

IMHO Poland exemplifies this perfectly. If it were merely a matter of a sudden US desire to do something, you'd expect the Poles to push it off until a more favorable (i.e., less Bear-baiting) time frame. The fact that they didn't--and are willing to weather the stormy relations--suggests a commonality of view between Poland and the US. Which is what I believe RM was trying to get at, in his colorful way, and which I agree with rather more than less.

anduril
This is a mischaracterization of Tusk's position.

A matter of opinion. Tusk nixed the earlier deal, after a tentative agreement was worked out. He called it "unsatisfactory," but didn't proffer a "satisfactory" solution. Combined with earlier rhetoric on the system, it suggests a cooling of enthusiasm for the previously agreed-in-principle arrangement, but an unwillingness to abrogate the understanding. All that changed suddenly in mid-August, and I suspect it wasn't just the US willingness to sign a defense compact and liberalize the Patriot agreement. YMMV. I don't pretend to be able to read PM Tusk's mind, but neither can you. And again, his public pronouncements are suspect at best.

Novosti Press is even more explicit:

Surely you see the problem with relying on Russian news for this issue? And yes, they (like Xinhua, unsurprisingly) want to make it look like the glorious workers' paradise is being beset by the evil Americans, who've bought off the Poles. That doesn't necessarily make it so.

Is it really just a matter of opinion? Is it factually true that Tusk simply rejected the US proposal, without offering any idea of what a satisfactory solution would be? No, that assessment is quite flatly untrue. And if you don't like Novosti as a source, you can try the Reuters Poland rejects U.S. missile shield offer and AP Poland Rejects U.S. Missile Defense Offer ("Prime Minister Says Country's Security Would Not Be Increased, But Promises To Continue Talks") accounts of the same story. In fact, if you can find any news account that contradicts Novosti (or Reuters or AP for that matter) in any substantive respect, I'd be very much obliged if you would point it out. Consider yourself challenged. (As for Xinhua, neither I nor anyone else care about what China says about the Poles. I doubt that the Poles do either--the Chinese US-bashing statement was probably for internal Chinese consumption.)

Each story agrees fundamentally on the essentials: Tusk was driving a hard bargain because of his claim that Polish security would be degraded by the deal in the absence of specific US (not just NATO) security guarantees as well as concrete here and now enhancements to Polish security--not just down the road. Tusk was driving a much harder bargain with the US than Kaczynski had, and fired the negotiator because he said he was being too soft. From Reuters:

"We have not reached a satisfactory result on the issue of increasing the level of Polish security," Prime Minister Donald Tusk told a news conference after studying the latest U.S. proposal.

"The aim of the negotiations, in my view, is to enhance the security of our country. We still agree that it is fundamental for us to maintain our alignment with the United States, which has been, is and will continue to be our strategic ally."

In Washington, the State Department said it was studying Tusk's remarks closely.

...

Tusk, without disclosing full details, said Washington was proposing to put Patriot batteries on Polish soil for one year.

In the months-long negotiations, Tusk's center-right government had sought billions of dollars worth of U.S. investment to upgrade Polish air defenses in return for hosting 10 two-stage missile interceptors.

"We are ready to accept proposals or corrections from the American side which would include our proposal to increase (our) security. We can do this in a day, a week, a month," Tusk said.

...

Russia has condemned the missile defense plan as a threat to its own security and has said it will target missiles at Poland and the Czech Republic -- its communist-era satellite states -- if the deployment goes ahead.

THREAT

"If the threat related to the shield indeed increases, then we need elements such as Patriots on Polish territory, and not just for one year," Tusk said, adding that the problem was not a question of money.

Political analysts said Tusk's rebuff to Washington demonstrated a new Polish self-confidence on the global stage. Warsaw is one of Washington's firmest allies in the region and has troops serving alongside its ally in Iraq and Afghanistan.

"This is the first time that Poland has said 'no' to the U.S. ... It certainly sends a signal to Washington that Poland's support should not be taken for granted in any circumstances," said Pawel Swieboda, head of demosEuropa, a Warsaw think tank.

"But it is also the case that the government greatly raised expectations and that these were never very realistic. Poland does need some compensation (for hosting the interceptors) but they went too far in demanding Patriots."

Polish President Lech Kaczynski, a right-wing opponent of the Tusk government and a strong supporter of the shield plan, is now likely to step up his attacks on the government.

But analysts said the domestic political fallout would be limited as Polish voters are largely hostile to the project.

What's going on here?

The Polish position under Kaczynski was typical of Kaczynski's brash and hot headed approach: if the US asks Poland to poke Russia in the eye, we'll do it gladly with virtually no questions asked and without regard to public opinion (which opposed the deal). That was the same approach that he had used to antagonize virtually all the Western Euro members of NATO, who accused him of being a US poodle and, generally, a loose cannon. His attacks on France and Germany this morning--which I suspect do not please the Bush administration at this juncture--are of a piece with that.

Tusk came to office with a platform of mending fences with Euro neighbors--Germany in particular. Re the missile interceptors Tusk's position was 1) they do nothing for Poland's security--what rogue state would want to target Poland?--and 2) the deal would in fact degrade Poland's security because Poland would now be targeted by Russian nukes. The conclusion was obvious for Tusk: the US must give Poland specific security guarantees and--since guarantees are ultimately no better than the paper they're written on--Poland demanded actual US hardware and not just for one year. This was a HUGE upping of the ante over the position of the former Kaczynski government, and was his specific proffer of a "satisfactory solution."

Of course, the US maintained that the interceptors weren't directed toward Russia, but Tusk's reply was that that didn't matter--what mattered was Russia's actual response to the deal. It is also important to note that the US compromise offer of "one year of Patriots" was motivated by a desire not to antagonize the Russians. Tusk's demand for "permanent Patriots" showed both toughness and a clear sighted assessment of political realities: if Poland was going to buck Russia's strident objections, they might as well go all the way and do something tangible for Poland.

In the wake of the Russian invasion of Georgia, Tusk has cautioned against rash actions or rhetoric. In this he was strongly supported by public opinion which, while highly critical and mistrustful of Russia, viewed Kaczynski's grandstanding as "precipitous."

So, let's count the ways in which Tusk emerges as a winner:

1. Domestic politics. Tusk has shown himself to be a tough advocate for Polish interests, which will serve him well in defending a missile deal that was generally unpopular in Poland. By demanding and receiving a deal that the Kaczynski led right wing claimed was impractical, he has provided himself with a teflon coat against attacks from the right on national security grounds. Tusk wins.

2. US relations. While Tusk has shown a toughness and independence vis a vis the US, he has also demonstrated his commitment to the American alliance. Importantly, while he drove a hard deal, when he had America over a barrel due to events in Georgia, he didn't try to re-up the ante--he agreed to the terms he had proposed back in July. His tough but honorable approach, coupled with his rhetorical restraint (compared to Kaczynski), will have won him friends in Washington. Tusk wins.

3. EU relations. Most of the EU will be pleased with Tusk. He has shown resolve in his pursuit of Polish security, but by obtaining a better deal for Poland he will be able to make the argument to his EU and NATO partners that he has also enhanced their security. For example, Poland will now be a more credible buffer between Germany and Russia, due to the presence of the Patriots and the promise of billions of dollars in air defense upgrades. His independent attitude will also reassure the Euros that he is one of them and not just an American poodle. Tusk wins.

4. Russian relations. Ironically, the Russians will probably be pleased by Tusk's display of independence and his commitment to Polish interests. The Russians shot their rhetorical wad in opposing even the American version of the deal, but now that the Poles have obtained everything they were asking for Medvedev's response was that it was "sad but not dramatic." Poland has long sought to be a bridge between Russia and the West. Look for Russia to explore common interests with Poland and try to exploit Tusk's independence: Poland is not Georgia and the Russians know it. But don't expect Tusk to back away from the new American relationship. Tusk wins.

anduril

After the last post, I had recourse to Google News. I saw the Xinhua article--and ignored it. Instead I focused on the numerous articles like this one from 8/12:

Polish PM says U.S. shield deal seems nearer:

WARSAW (Reuters) - The conflict between Russia and Georgia, which shocked capitals and markets with its speed and ferocity, may help Poland and the United States finally reach a deal on deploying a U.S. anti-missile system on Polish soil, Prime Minister Donald Tusk said on Tuesday.

Tusk said the latest signs from Washington indicated the United States was now ready to meet his demands for enhanced military cooperation with Poland in return for consent to host parts of the installation.

"I will not announce a success before the ink is dry but the information we are getting makes the acceptance of my government's demands by the U.S. more probable than only a few weeks ago," Tusk told a news conference.

...

Tusk said Russia's action against Georgia seemed to have confirmed Poland's fears that its security could deteriorate if it agreed to place the U.S. system on its soil, a prospect which has enraged Moscow.

"Today, after what has happened in the Caucasus, it can be clearly seen that real security guarantees that would not leave Poland just with the installation are essential," he said. "It seems such arguments are taken more seriously now by the U.S."

It seems pretty clear that the movement was on the US side. Polish eyes were not opened to Russian intentions by the Georgian invasion--the Poles have never had such illusions, which was the whole rationale of Tusk's tough negotiating line. It was American eyes that were opened and became "strangely focused." And it was US need for some concrete action in response to the Russian invasion that sent our negotiators scurrying to Warsaw to give Tusk everything he had demanded.

And this from Bloomberg on 8/13 makes the situation crystal clear:

U.S.-Poland Missile Talks Resume Amid Security Focus

``The Americans have been extremely insensitive to what seems to us in Poland to be so clear,'' Roman Kuzniar, a professor at Warsaw University's Institute of International Relations, said by phone. ``If the Georgian conflict shows us anything, it's that Poland really does need security guarantees above and beyond what the U.S. wants to give.''

...

``It's clear that we need security assurances that don't leave Poland with no more than a `naked' installation,'' Tusk told reporters yesterday. ``We wouldn't hesitate for a minute to sign an agreement as long as it enhances Poland's security.''

...

Poland is wary of opposition from Russia, with which it shares a border, to the missile plans. Russia, which has repeatedly said the proposed shield threatens its national security, has warned it will build up military defenses along its frontiers if the project goes ahead.

Even so, American diplomats say that Poland is going too far in demanding U.S. funding to modernize its armed forces and a pledge to permanently station a battery of Patriot anti-ballistic missiles in Poland.

``We don't see the necessity of extra-special security agreements,'' Andrew Schilling, counselor for public affairs at the U.S. Embassy in Warsaw, said by phone. ``In our view, our guarantees to our partners through NATO are a sufficient commitment.''

1. It was the Americans who, up to the last moment, were pooh-poohing Polish concerns about Russia.

2. It was the Poles who were steadfast--after Tusk took charge--in demanding and receiving "extra-special guarantees." They were focused on the Russian threat long before the Americans would even acknowledge it.

3. The movement was all on the American side.

JM Hanes

Excuse me for interrupting your thread, but Instapundit has linked to the latest from Germany Tbilisi, Germany offers support for Georgia's NATO bid:

TBILISI, Georgia (AP) — German Chancellor Angela Merkel is offering strong support for Georgia, saying the country is on track to become a member of NATO.
Merkel flew to the Georgian capital of Tbilisi on Sunday, two days after she met with Russian President Dmitry Medvedev in the Black Sea resort of Sochi.
In a speech Sunday, Merkel also suggested that NATO could help rebuild the tattered Georgian military.
Merkel supports the EU cease-fire, saying it needs to be followed "immediately" and that Russian troops need to pull out of neighboring Georgia.
Having explained, apparently twice, that "NATO nations like Germany are very much aware of the difference in NATO expansion that includes Poland, the Czech Republic and Hungary, and NATO expansion into, say, Georgia." I was sure you would consider this a reasonably significant development. If you have the time, you might want to toss another tidbit into the old hopper as well: Ukraine to join in US-led missile shield in Europe.

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