Whoever Paid For That Microphone, He Paid For It In Pounds

Will Heaven at The Telegraph liveblogs:

9.42pm (WH) Onto health, but still the pace is bothering me. The American Presidential debates are an opportunity for US politicians to look, well, presidential. But do any of ours look electable? It’s scatter-gun with notes.

9.40pm (WH) Cameron sounding positively Churchillian defending Trident.

9.39pm (RC) A dose of relative calm when talk turns to the military: mood more sober and serious. Brown comes off well, as can talk with gravitas about the tough decisions he’s had to make as PM.

9.37pm Neil Midgley tweets: “Another ITV fail – blocking line of sight from leaders to audience with cameras.” Meanwhile, Iain Dale says: “Brown’s lipstick is running. Or becoming more and more orange.”

9.34pm Damian Thompson writes:

We’ve got to remove this dark cloud on this economy by acting now, says Cameron. He makes it sound like a minor operation: an appendectomy rather than a quadruple bypass. Brown goes on to imply that if you act now the patient will die. Clegg: tax the banks, “but let’s not get obsessed about mythical savings on waste” or pretend that it’s all down to timing. Probably sounds grown-up to younger people in the audience; to anyone with experience of election tactics, it’s textbook Liberal Democrat opportunism. The idea that control-freak Lib Dems would be prepared to tackle even the silliest quangos is absurd. This is a party that can’t see a dog turd on the pavement without wanting to set up a committee to discuss “options” for cleaning it up.

9.33pm Janet Daley asks:

Why is DC allowing GB to say that Tories would be “taking £6 billion out of the economy”? Raising taxes takes money out of the economy, cutting them puts money back into the real economy.

9.31pm (WH) Alastair Campbell tweets: “The longer it goes on the more shallow Cameron looks and the more substantial Gordon looks. Clegg doing well as I knew he would.” A reluctant admission?

9.29pm (RC) “The only way we’ve kept our economy moving is because the Government stepped in to ensure there were sufficient levels of growth,” says Gordon. Um… didn’t it contract quite significantly?

9.28pm Ed West notes:  Cameron used the phrase “jobs tax” about half a dozen times in 120 seconds.

9.27pm James Delingpole asks:

Clegg now TOTALLY overdoing the engagement with the questioner thing. “Where are you Robert?” he asks. Robert, sitting at the back, looks deeply embarrassed. It’s like when Jeffrey Archer overdoes the repeating-your-name-to-show-you-he-remembers-it-and-cares trick. You’d really rather he didn’t. It’s so not English.

9.26pm (RC) Cameron talks about ‘removing’ the deficit, glossing over the fact that this will involve a profound restructuring of our economy and public sector. Brown repeats standard line about big choices and securing the recovery – referring to the Tories’ NI policy as “taking money out of the economy”, which is a bizarre interpretation by any standards. Clegg doing well – mastered his brief, and can refer to Lib Dems’ shiny policies without the others having time to knock them down.

9.24pm Krishnan Guru-Murthy tweets: “Suspect Cameron will regret having the centre position – it isn’t helping him. Clegg acting as though he was in middle anyway.”

9.22pm Bryony Gordon sends us her thoughts:

Please stop banging on about all the real people you have met. Clegg, stop waving your hands about – you look like you want to throttle Stewart. Oh, and was the set stolen from a kilroy silk show from the early 90s?

9.21pm Damian Thompson notes:

This might seem like a trivial point, but it isn’t. Dave’s makeup has been severely botched. I’ve seen less slap on the faces of a Gilbert and Sullivan troupe in Reading. Not only that, but someone has attempted to darken his eyebrows; someone in a hurry, by the looks of it. The Leader of the Opposition is (I think) putting in a confident performance, but he is orange. And some idiot on his staff has said: that looks fine.

9.19pm Harry Mount writes:

The debate is only really coming alive in the press room here in Manchester when one of them gets angry. A groan goes up the moment they try to squeeze in a much-rehearsed soundbite (”You can’t airbrush your policies, David, the way you airbrush your posters”) or furiously use the questioner’s first name (”Yes, Jacqueline,” says Nick; “Yes, Helen,” says Dave).

9.17pm (RC) Further to last post, think problem is lack of applause. People in press room are referring to particular answers getting nods from the crowd – especially Cameron and Clegg talking about personal experiences with education – but there’s no audible cue that tells you how well things went down.

9.15pm (RC) After a long debate about how to clean up politics – which Nick Clegg managed to focus on a pledge of his own party’s – the abiding impression is that the format is leading each leader to cancel the others out somewhat. The result – which seems to be confirmed by commentary so far – is that people aren’t having their minds changed, but their existing instincts confirmed. Interventions by moderator also make the leaders seem like naughty schoolboys, which doesn’t help them appear statesmanlike.

Andrew Sullivan’s live-blog:

4.08 pm Just an anthropological point: Cameron just tried to sum up what they all agree on. It was a classic Alpha Male move. I give him a Beta-plus. Brown so far is combative and smiling his grisly smile constantly. Clegg comes across as a bit of a whiner – which is always the trap for the third party. But he’s very effective and telegenic. No question that Clegg and Cameron seem of a different and younger generation. But you can see why nervous voters might find the older bloke a little more reassuring in a pinch.

But if Cameron is trying to prove he is of prime ministerial caliber, he’s succeeding. The policy differences are, so far, numbingly small.

4.06 pm Brown’s raising the question of hereditary peers in the House of Lords is classic class-baiting Cameron.

4.02 pm. Cameron wants to streamline government – and cut the number of MPs – to reduce the fiddling of parliamentary expense accounts? Shurely shome mishtake. Meanwhile, Brown keeps sucking up to the Lib Dems. A hint of the possibility of a Lib-Lab pact? Cameron fights back with a quite effective parry on the tardiness of Labour’s interest in constitutional reform. If they wanted to get rid of hereditary peers, they could have done so in the last 13 years.

4.00 pm. Brown says he was “shocked and sickened” by the expenses scandal among members of parliament. He wants recalls of dodgy MPs. He wants an elected House of Lords.

3.58 pm. Brown is getting very aggressive. He keeps interrupting Cameron. Now there’s a jibe about air-brushing. It doesn’t seem that fitting for a prime minister. It seems a little insidery. But without imbibing the current atmosphere in Britain lately, it’s hard for me to judge how this strategy will go down with the viewers.

3.55 pm. Brown tries to get a rehearsed joke about Tory posters. But he’s the first to start bickering and talking about the meta-issues. Another Brown rehearsed line: “This is not Question Time, David. This is Answer Time.” Good line. Badly delivered. But Cameron ducks the question on funding of the police.

3.54 pm. Brown offers legal injunctions against the police if a case lags. He’s implying that Tory budget cuts could reduce the number of cops on the street. Clegg just keeps repeating that nothing seems to change as the two parties alternate in power.

3.50 pm On crime, more police on the streets seems a common refrain. Cameron wants to get drug addicts off the streets and into rehab. Rehab as an anti-crime measure is unimaginable in an American context. And from the right?

3.48 pm. Cameron touts welfare reform as a cure for immigration excesses. Now he’s talking about tougher sentences for burglars and murderers. Not exactly hugging hoodies, is it?

3.44 pm They’re all vying to get immigration “under control”. Brown rather awkwardly says it already is under control. But he suffers the plight of incumbency. If they’ve been in office for the past 13 years, it’s a little late to get tough. Clegg keeps banging on about regional caps for immigrants – not a national one.

3.39 pm Cameron’s hair is much more presidential. And his first immigration answer – a clear vow to reduce immigration levels – seems clearer than Brown’s obviously scripted description of his meeting with chefs. Yes, chefs.

Iain Martin’s live blog at WSJ

Joshua Keating at Foreign Policy:

The format: FAST! If anything, I think U.S. networks could learn from ITV’s presentation of the debate, which kept statements short, questions direct and substantive, and a moderator who was willing to cut off the candidates when they started to ramble or repeat themselves.

That being said, all three candidates seemed to be rushing to get as much information as possible, and I suspect that many voters probably had a hard time following the discussion at times. At times, they seemed to be struggling to present their entire platform when a few bullet points would have sufficed.

Gordon Brown: Not surprisingly, the dour prime minister seemed the most ill-at-ease with the debate concept, often getting bogged down in unnecessary detail and becoming tetchy in response to criticism. It’s hard to say after watching the debate what Brown’s pitch is, other than it’s way too dangerous to elect David Cameron. In particular, challenging the premise of a question by a soldier complaining about inadequate equipment for troops in Afghanistan seemed like a mistake. Brown was strongest on the economic questions where he seemed to effectively paint Cameron’s proposals as vague.

David Cameron: Not surprisingly, the younger more dynamic Cameron seemed much more comfortable with the format and his “hope over fear” closing statement was strong (though the constant invocations of “hope” and “change” bordered on hopejacking). Cameron dominated the early questions on immigration and law-and-order issues, though he seemed to get seriously outwonked by both Brown and Clegg on pocketbook issues. He didn’t do a whole lot to dispel his image as a smooth-talking policy lightweight.

Nick Clegg: Meh. The third-party candidate scored a few hits, but had a hard time distinguishing his political positions from Brown’s or his anti-establishment bona fides from Cameron. The anti-nuclear rhetoric he broke out on the defense question seemed both unrealistic and a bit of a non sequitur. It is telling how many times both Cameron and Brown began their answers with “I agree with Nick,” though.

Overall winner: Cameron, though given how much the format favored the conservative, it wasn’t exactly a knockout punch.

Janet Daily at The Telegraph:

No great surprises then. Gordon Brown was the most negative of the three, using much of his allotted time to attack David Cameron. He was also boorish, interrupting Cameron and even talking over the chairman. He made a gratuitously nasty reference to Cameron having “airbrushed” his own poster, and a quite irrelevant jibe about Lord Ashcroft. He claimed repeatedly that problems such as immigration and crime were already under control, but then said that his party was planning to deal with them. He was, as usual, repetitive and obsessive in his insistence on “spending” as his trump card.

David Cameron did very well without adding anything especially startling or novel to the debate. What came across was clarity, authenticity and an appropriately authoritative manner for a potential prime minister. I thought he missed a precious opportunity to slap down Brown’s absurd assertion that the Tories would be “taking six billion pounds out of the economy” by not implementing most of the Labour National Insurance rise when, in fact, it is raising tax that takes money out of the real economy. But Cameron did make the most of the disastrous effect that the NIC rise would have on the NHS and education budgets.

Nick Clegg was assiduously courted by the Prime Minister: I lost count of how many times Brown said, “I agree with Nick”. Clegg began with platitudes but livened up later as he got into his predictable condemnations of the “two old parties”. (Could somebody please tell him that the Liberals are a much older party than Labour?) It will take a pretty sophisticated viewer to appreciate that the LibDems have an absurdly unfair advantage in being able to offer an utterly unrealistic programme. Clegg could attack both the real alternatives without worrying about the credibility of his own policies. So it is scarcely surprising that he “won” most of the instant polls. My guess is that this will make scarcely any difference to the outcome of the election except to confirm that Brown is a dead man walking.

Gideon Rachman at Financial Times:

Was this the night when the Conservative Party saw the chance of an overall majority slip away, ensuring that Britain is heading for a hung parliament? My impressions of the first ever leaders’ debate seems to be the same as that of the great British public. Nick Clegg won.

Snap polls after the debate showed the Lib Dem leader as the clear victor. More significantly, the first poll of post-debate voting intentions that I’ve seen – just broadcast on Sky News – showed a big jump in those saying that they intend to vote for the Lib Dems. They went up from 19% in the polls to 26%, just behind Labour. Of course, there are still three weeks and two debates to go. But, if that trend holds, we’re definitely going to end up with a hung parliament – with the Lib Dems holding the balance of power.

So what went right for Clegg? As I wrote on my blog a few days ago, I’ve long been slightly puzzled about why the charm and quickness that I’ve seen from Clegg in private has never really translated into his public image as leader. Tonight that changed. I think the format favoured Clegg. Or rather Question Time in parliament which, up until now, has been the only opportunity he has had to go head-to-head with the other leaders, does the Lib Dem leader no favours. He is just no good at the shouted put-downs that are the essence of Question Time and is also shoved off to one side of the chamber, away from the two main leaders, which marginalises him. Tonight he debated Cameron and Brown on equal terms – and in a format that favoured warmth and under-stated humour, rather than raw aggression and one-liners. It worked much better for him.

Clegg’s main tactic was obvious but effective. He portrayed the two other leaders as representatives of an exhausted system, and went some way to capturing the crucial banner as the “change” candidate. He was also effective in giving the impression that he alone was being honest about the fiscal dilemmas that Britain is going to face. His attack on David Cameron for suggesting that fiscal problems can be solved by cutting “waste” was skilful. Of course, there were also contradictions in Clegg’s presentation. On the one hand, he argued that “cutting waste” is largely an irrelevance  – and then he reeled off a list of wasteful projects that needed to be cut. But apparently it didn’t matter.

Fraser Nelson at The Spectator:

None of them dropped any clangers – nor did anyone have killer one-liners. I’m struggling to recall a single line from the debate. Cameron scored when he thanked the soldier and the nurse for their service: he relied on anecdotes, whereas Brown emptied his statistics on the poor viewer. I can’t deny that Clegg’s answers were stronger than I expected, and those who had never heard of him may well have been impressed. From the offset, it was said that Clegg had most to gain from these debates. So it was to prove.

Clegg gorged on the plague-on-both-your-houses lines, pitching desperately for the anti-politics vote. “All I would appeal for is a bit of honesty in this debate” and “The more they argue, the more they sound like each other.” Etc.

Only a few exchanges jumped out at me. The first was the military.  Brown starts, as he always does when talking about the military, with a garbled sentence  “Let me say, first of all, my pride and my admiration for the Armed Forces.” Brown can never speak in grammatically correct sentences when talking about the military (sending “best wishes” to the deceased, etc) because he does not understand the military. “Every Urgent Operational Requirement that our Armed Forces have asked us for has been met,” drones Brown. Then says how terrorist plots start “in that region” (that’s his way of saying “Pakistan”).  Cameron’s response, when it came, was far more subdued. He should have said it was a scandal that soldiers died in Belfast-era Range Rovers etc – there are enough examples to go through. Instead, he mentioned a policy area. Cameron was evidently told not to go after Brown in this way, not to be too Flashman (to use Alan Johnson’s analogy). A shame, in my view. I could have seen far more raw anger from Cameron, because he does feel it.

Cameron was at his most convincing when speaking directly to the nurse. “Can I thank you for your incredible service to the NHS. What it did for my family and my son, I will never forget. The dedication, the love. Thank you for all that you have done.” This left statistics-spouting Brown in the shade.  And on the economy, he beat Brown by dismissing his (ridiculous) claim that £6bn of cuts posed some mortal danger to the economy. All he’s doing is proposing is to cut 1 percent of government spending: what family has not had to cut their budget by at least as much? The answer, he said, is to cut the waste and cut the tax.

I was once given a George W. Bush doll which, if you pressed a button on his lapel, would recite one of his soundbites. At times, this is what this debate felt like. At every given topic, the leaders recited their given answers. People have heard Brown’s repertoire, they’ve heard Cameron’s. But not Clegg’s. He enjoyed the novelty factor. I hope he enjoys it: tonight may very well be the high point of his political career.

Alex Massie:

On immigration and crime all three men tried to out-populist one another. Who knew that foreign students were such a threat to this green and pleasant land? Who knew that foreign chefs could possibly be such a danger? When Nick Clegg recounted an anecdote about how a poor chap had been burgled while at his father’s funeral one half-expected him to add that, “And by the way, the father was murdered by a cleaver-wielding Vietnamese chef…”

True, David Cameron was right to stress the importance of rehabilitation and, later, of welfare reform. But these were small nuggets of decency and common-sense in a swamp of hysteria and lie-telling populism that was enough to make one think that my three-year old niece’s analysis was depressingly accurate.

Things did, mercifully, get a little better thereafter and there was more give and take and general spikiness than seemed likely given the absurdly stringent nature of the “rules”. It was both more interesting and even more exasperating than one expected.

Nick Clegg clearly won and not just on the basis of the Expectations Game either. He was personable, effective and pretty good at putting across his entirely reasonable “Plague on Both Your Houses” stance.

On the plus side for David Cameron his opening statement was the sharpest, clearest and best, noting and appreciating the public’s mood. His closing statement was fine too but for long periods of the contest Cameron seemed oddly passive and, at times, strangely shut out of the contest. My impression was that he was the most nervous of the participants but, of course, I may be mistaken.

More culpably, time and time again Cameron declined to call Brown out. Perhaps he didn’t want to seem angry or aggressive but it was absurd for him to fail to challenge Brown’s repeated assertions that raising taxes by £6bn fewer pounds somehow constitutes “taking money out of the economy”. If it’s not paid in tax then does this money simply evaporate? Cameron never made this argument. Ronald Reagan and Margaret Thatcher would have. Instead Dave became bogged down in tedious details about waste and 1% of government revenue. A real missed opportunity.

And that’s rather how I feel the whole night was for Cameron. He could have slain Brown tonight but he did not. The result of that failure was to let Brown escape.

Martin Bright at The Spectator:

Shall we stop being cynical for a moment and congratulate Brown, Cameron and Clegg for being the first political leaders in Britain to take part in a televised election debate? Indeed, we should particularly congratulate Gordon Brown for agreeing to this. He had by far the most to lose.

There is absolutely no doubt that Nick Clegg won this. He faltered from time to time, but was the only one confident enough to take thoughtful (if sometimes stagey) pauses.

I thought Gordon Brown also did surprisingly well. He kept his cool and showed that he is an accomplished debater. His jokes were over-prepared and characteristically dreadful, but he warmed up through the 90 minutes and challenged Cameron very effectively on several occasions, especially over police spending.

Cameron was disappointing, but people forget that he was not entirely convincing against David Davis in the Tory leadership debates.

Gordon Brown should be worried precisely because he did relatively well in the debate. For some reason this doesn’t appear to have made any impact on the way people thought about him.

Hillary Gives A Speech Or This Post Has Nothing To Do With Health Care

Max Fisher at The Atlantic with the round-up

Jeffrey Goldberg:

If you’re trying to figure out why J Street, the left-wing pro-Israel group, came into existence, just take a look at the schedule for this week’s AIPAC conference, at the Washington Convention Center. The list of speakers, apart from the usual suspects (Bibi, Hillary, and the like) includes analysts and advocates from such organizations as the American Enterprise Institute, the Hudson Institute, the Foundation for the Defense of Democracies, CAMERA, and so on — the full range of conservative-leaning think tanks. It is true that the convention includes a few analysts not associated with Republican Party views on the Middle East — Wendy Chamberlin from the Middle East Institute, Brian Katulis from the Center for American Progress — but these two are talking about Pakistan, which is not a core issue of the Middle East conflict

[…]

I am not writing this in order to knock such speakers as Robert Kagan, Andrea Levin, Elliott Abrams,  Dan Senor (who just wrote a great book about Israel)  Bret Stephens, Bill Kristol, and Alan Dershowitz. I agree with much of what many of these people have to say about the Middle East (and it is true that from time to time I myself have been accused of being a bloody-minded neocon!) But the dearth of speakers who approach the most contentious issues of the Middle East from a left-Zionist perspective is noticeable. Most American Jews voted for Obama; most American Jews are liberal; and most American Jews understand the difference between the legitimate security needs of the State of Israel and the theological, political and economic needs of the small minority of Israelis who have settled the West Bank. So would it hurt to bring in speakers from the Meretz Party, from the kibbutz movement, from the New Israel Fund, from the Reform Movement, so that the AIPAC attendees could hear for themselves the views of Zionists who disagree with the policies of Israel’s right-wing parties?

Ben Sarlin at The Daily Beast:

Arriving at AIPAC (the American Israel Public Affairs Committee) in one of the toughest months for Israeli-U.S. relations in years, Secretary of State Hillary Clinton knew just the magic words to win over the audience Monday.

“Our commitment to Israel’s security is rock solid, unwavering, enduring, and forever,” she said, to instant applause and a standing ovation—the second of her speech, and not the last.

Introduced by AIPAC’s executive director, Howard Kohr, who called on the crowd to “set aside the past week and work and pledge to solve problems together,” Clinton’s speech offered a number of reassurances that America’s spat with Israel was far from a full-scale crisis. Among them: a long and detailed condemnation of Iran’s government, citing Mahmoud Ahmadinejad’s Holocaust denial, and 9/11 conspiracy theories.

“The United States is determined to prevent Iran from acquiring nuclear weapons,” she said. Clinton emphasized that Obama’s outreach to Iran would lead to tougher consequences if progress was not made on the nuclear issue.

“We know that the forces that threaten Israel also threaten the United States of America,” she said, drawing another standing ovation.

Other red meat: a renewed call for the release of Gilad Shalit, an Israeli soldier captured by Hamas in 2006.

Nevertheless, Clinton did not back down from the administration’s objections to expanded Israeli settlements in the West Bank and East Jerusalem, the cause of the latest flareup between President Obama and Prime Minister Benjamin Netanyahu.

“As Israel’s friend, it is our responsibility to give credit when it is due and to tell the truth when it is needed,” Clinton said. She emphasized the point, but her words were received quietly.

Gideon Rachman at Financial Times:

In fact, Hillary got several standing ovations. And this was not at the price of watering down her message. Although she made several reassuring statements about the enduring nature of America’s committment to Israeli security, the secretary of state also reiterated American opposition to further settlements and said that America would push back “unequivocally” when it disagreed with Israeli policy.

It’s difficult to tell whether this really represents a toughening of American policy to Israel. In some sense, all that Hillary, Biden et al are doing is reiterating, a longstanding US position. Yes, the language has got tougher – but that may simply reflect irritation at the crass way the Israelis made their announcement on Jerusalem, while Biden was in town.

Jennifer Rubin at Commentary:

The speech was interesting on several notes. First, the portion of it devoted to the Palestinian conflict dwarfed the discussion on Iran, reflecting — I think — quite clearly where the interests and focus of the administration lie. Second, it appears as though Clinton was stung by accusations against her less-than-resolute defense of the Jewish state so much that this speech was an attempt at personal rehabilitation. Is this her pride speaking or rather a careful maneuver in the interest of her political future? Both, perhaps. Third, there is — as with so much concerning the Obama administration — a chasm between generalities and the administration’s actions and policies. How to prevent Iran from acquiring nuclear weapons? No mention of “all options” being on the table. How to achieve peace when Hamas won’t renounce violence? How is being a resolute friend to Israel congruent with bashing Israel in public over an issue that Clinton just said belonged to the final-status stage of negotiations? Those who were uneasy before heard little, in concrete terms, to reassure them. Those worried about Clinton’s reputation in the Jewish community are hoping that this is enough to set things right. But one speech to AIPAC does not a reputation make; it is her acquiescence in Obama’s gambit of distancing the U.S. from Israel that is the nub of the problem and will render her a less than popular figure among pro-Israel Americans

Spencer Ackerman:

Covered her speech here, here, here and here. Caught up with J Street for a response here. I don’t honestly know what I expected, as I wrote this morning. She had a deft moment where she reversed the typical construction on the right for why it’s bad for the U.S. to link the Israeli-Palestinian conflict to its interests in the Middle East by making the meta-point that it’s bad to expose daylight between the U.S. and Israel. Or, in other words, Not in fronna de goyim! Clinton is very cultural comfortable with Jews, and speaks both our dialects and our subtexts with fluency.

She didn’t apologize for the settlements flap, nor did she play it up, which is probably what she needed to do. She did, however, reinforce the point that the inexorability of demography threatens Israel’s future as a democratic Jewish state and makes the status quo unsustainable. And she didn’t get much applause for that, although everything she said about Iran met thunderous real-life-retweeting.

Phyllis Chesler:

Secretary of State Hillary Clinton just spoke to AIPAC, where 7,500 people had gathered to hear her preach the word. According to the Jewish Telegraphic Agency and the Israel Project, Clinton condemned both the Palestinian “culture of hate” and its “incitement” to murder Jews based on falsified information — and the Israeli “settlement” construction which, she claimed, “undermines America’s unique ability to play a role” in the peace process.

The two are not the same and are not morally equivalent; further, Israel does not exist in order to allow America to claim prowess in taming the Jewish state — even as it fails to confront Iran and jihad in a meaningful way. Indeed, when has America castigated the Palestinians for their grave and terrible “incitement” in the way they have just castigated the Israelis for their “settlement” (or rather apartment unit) construction?

Clinton said that “new construction in East Jerusalem or the West Bank undermines mutual trust and endangers the proximity talks that are the first step toward the full negotiations that both sides want and need.” Ahem. There is only one side that wants negotiation and a two-state solution. That side is Israel. The Palestinians remain divided — and are only united in their refusal to accept a Palestinian state except if that state will occupy space “from the river to the sea,” which would mean the destruction of the only Jewish state.

For the record, Clinton stressed that America was a strong supporter of Israel. She said: “Our commitment to Israel’s security and Israel’s future is rock solid. … Guaranteeing Israel’s security is more than a policy position for me. It is a personal commitment that will never waver.” (Hope she means it. Hope she means it more than she “meant it” when she embraced Suha Arafat who had just finished excoriating the Israelis for poisoning the Palestinian women. God I hope she means it so much that Obama will sell the bunker busters, Apache helicopters, and refueling systems to Israel without which Israel cannot defend itself against Iran — alright, will not have the option of confronting Iran on Iranian soil).

All The Kewl Kids In Switzerland Still Drinking Expensive Wine

Two posts from Felix Salmon, here and here. Salmon:

Davos is great at throwing a couple of archbishops onto a panel with Niall Ferguson entitled “Restoring Faith in Economics” (geddit?) — but what I see none of in the programme is an indication that much if not all of the crisis was caused by the arrogance of Davos Man and by his unshakeable belief that the combined efforts of the world’s richest and most powerful individuals would surely make the world a better, rather than a worse, place. Excitement about the opportunities afforded by the Great Moderation (as the credit bubble was known before it burst), financial innovation, the rise of the bankers — Davos was ahead of the curve on all of them. And as the annual symposium of smug sermonizing became increasingly established, it served as a crucial reinforcement mechanism.

It’s not like CEOs and billionaires (and billionaire CEOs) need any more flattery and ego-stroking than they get on a daily basis, but Davos gives them more than that: it allows them to flatter and ego-stroke each other, in public. They invariably leave even more puffed-up and sure of themselves than when they arrived, when in hindsight what the world really needed was for these men (it’s still very much a boys’ club) to be shaken out of their complacency and to ask themselves some tough questions about whether in fact they were leading us off a precipice.

Now that it’s clear that many of them were leading us off that cliff, there’s still no sign of contrition, although you can be sure that a few fingers will be pointed at various past attendees who aren’t here to defend themselves. Is anybody here seriously examining the idea that Davos was institutionally responsible, at least in part, for the economic and financial catastrophe which befell the world in 2008? I’ll be on the lookout for that over the next few days. But I suspect that the preening potentates will be far too busy giving themselves the job of rebuilding the world to stop and ask where they went wrong in building the last one, and whether they might actually owe the rest of us a large collective apology.

And more Salmon:

One of the more annoying aspects of the Davos echo-chamber is the way in which people are constantly asking each other what “the mood” is this year; the result is an inchoate consensus that since the crisis is over, markets are up, and countries are growing again, there must be grounds for optimism and the kind of yes-we-can thinking in which the World Economic Form has always specialized.

I’m moving the other way, however, siding with the pessimists like Nouriel Roubini and Martin Wolf. They’re both convinced that the problems of southern Europe are both grave and intractable, although they differ in their prediction of what the consequences will be: Nouriel sees a good chance of the eurozone breaking up, while Martin sees the PIGS (Portugal, Italy, Greece, Spain) staying in the euro and ending up stuck in a long-term slump, able to neither cut interest rates nor devalue their currencies in an attempt to regain competitiveness. The only other option is an across-the-board cut in nominal wages, on the order of 30% or so. That’s something which is pretty much inconceivable, although Ireland seems to be trying to move in that direction.

Of course the one entity which will benefit from this is the Squid: Goldman Sachs seems to be taking the lead in trying to orchestrate a desperate and expensive sale of Greek debt to China. Expect more such desperate moves as the southern European macroeconomy continues to deteriorate; anybody who watched the world’s investment bankers swarming all over Domingo Cavallo in the final weeks of Argentina’s currency board will remember just how vulturish they can be in such situations.

Andrew Sullivan:

The theories of self-regulating markets that guaranteed no collapse turned out to be profoundly flawed – as most intelligent conservatives (Posner, Bartlett, et al.) have now observed. And the oh-so-clever mechanisms the bankers invented to give themselves more and more and more turned out – surprise! – to be mathematically flawed. And those of us who’d saved for retirement, paid our mortgages punctiliously, paid our taxes without armies of accountants to squeeze every last drop from Uncle Sam, and worked to build real things … we became their victims. That’s when the temptation for vengeance comes in. But when we then rescue them and burden ourselves with more debt, and they turn around and do all they can to restore the insanity that brought us all so low, and enrich themselves some more, we enter a new period.

I have no doubt there are many good men and women working in the banking sector. But the system is so corroded with vice, with selfishness, and, most importantly, with contempt for the common good, it needs real reform. I like what Obama has proposed and what the chairman of the Bank of England is now endorsing. I think the bailouts were necessary, just as I think the stimulus was necessary. But passing the toughest financial regulation bill we can at this point seems to me to be an urgent priority. The diffuse anger out there is a function of this deep sense of injustice – and it’s correct.

We need to make banking not just boring but as profitable as any other sector in the economy: no more and no less. We need to remove the mystique that led us to this morass. And we need to do it to rescue capitalism itself from its own hubris and naive belief that economics can operate in a vacuum without virtue.

Kevin Drum on Salmon’s second post:

For what it’s worth (and you can guess how much that is), I think I agree about Europe but I’m not quite so pessimistic about the U.S. The American economy seems unlikely to come roaring back to life or anything this year, and a midyear dip seems at least plausible, but overall I suspect we’re just going to see a long, hard slog to recovery, not a second disaster.

The wild card, though, is whether a disaster somewhere else will ripple across the globe and eventually touch off a disaster here. That’s certainly possible, and it’s part of the risk I think Tim Geithner took when he chose to rescue the banking system the way he did. It’s left the entire system in fragile shape, which is OK if nothing terrible happens in the next couple of years and everyone has time to earn their way back to full strength. But if something terrible does happen, we’re still not in very good shape to handle it. So let’s hope for a lack of disasters, OK?

Yaël Bizouati at Dealbreaker:

Everybody’s pissed off at everybody at the World Economic Forum. It’s not the love fest it used to be. Not even humanity-lover Bono is showing up this year.

Here’s a roundup:

Barclays President Robert Diamond would like to point out that everyone at the bank is “immensely proud” that the bank didn’t take any direct money from any government anywhere in the world. A word of acknowledgment would be much appreciated, thank you.

“I think that what goes unnoticed is that the banks which stayed strong and were well managed through this are angry at the banks (that) had poor management (and) were allowed to have poor management and ineffective regulations,” Diamond said.

Take that, all of you TARP-ed failures.

Meanwhile, George Soros -siding with his pal Roubini- is mad at Obama’s proposals, saying he’s not going far enough and the largest financial institutions may be “too big to fail” even under his plans to rein them in.

“Some of the banks will spin off investment banks that will still be too big to fail,” Soros said.

On the other hand, Deutsche Bank CEO Josef Ackermann said the Obama plan is BS as it will hinder global economic growth.

“If you have fragmented, small players in the financial sector, meeting the requirements of global trade and production, you will have a dichotomy which is not going to work and would not be for the benefit of the real economy at the end,” Ackermann said.

Vincent Fernando at Clusterstock:

Nouriel Roubini at Davos has announced in none too uncertain terms how he feels about Greece right now — it’s a lost cause that Europeans will be forced to back-stop.

CNBC:

“Greece is bankrupt,” Roubini told CNBC.com at WEF. “Look, they have to ask China to help them out.”

If the situation becomes dire enough the European Union will be forced to help bail Greece out because it’s such a threat to the monetary union, he said.

Gideon Rachman at Financial Times:

Jesus drove the money-changers out of the temple. Now the World Economic Forum has driven the wine-tasters out of Davos. In previous years, one of the highlights of the forum was a small but spectacular tasting of fine wines. But last year Klaus Schwab, the forum’s mastermind, decided that guzzling first-growth clarets was an inappropriate way of celebrating the global economic meltdown – and the wine-tasting was cancelled. We all hoped that this was a temporary abberation, but apparently not. The new Puritanism is here to stay – Davos wine-tastings are off the menu until further notice.

But you cannot deter dedicated wine-tasters that easily. Last night a wine-tasting was organised by former Davos employees who have formed a new organisation called the Wine Forum. It took place in a conference room in an airport hotel in Zurich at 6pm – a time and a location that was specifically designed to intercept delegates en route to Davos.

Jancis Robinson of the FT was mistress-of-ceremonies and the wines were provided by Krug, and Chateaus Cheval Blanc and Yquem. One of the malign results of globalisation is that these wines, which were once affordable to the likes of me, are now global brands cherished by the super-rich and so mesmerisingly expensive. I’ve never understood why the anti-globalisation movement doesn’t make more of this issue. The 1959 Chateau Yquem that we tasted last night now sells for about £1600 a bottle – each gulp that I took would have made a small contribution to paying off my mortgage. The Cheval Blanc 1998 is about £400 a bottle.

[…]

Under the circumstances, I feel remarkably perky. This morning I went to a really good session on geo-politics, which did what Davos does so well – bring together participants from all over the world; in this case from Beijing, Moscow, London, Cairo, Harvard, Afghanistan and Pakistan. Now I am off to a lunch with George Soros. This evening, I am meant to be moderating a dinner debate called “From Piracy to Pandemics – From Past to Present Dangers”, which seems to have been organised by somebody with a taste for alliteration. It says that the dress code is “smart casual”, but I think it would be more fun if the participants could be persuaded to come in fancy dress. Somebody should come dressed as a pirate; somebody else could come as a pig with flu. Now that the wine-tasting is no more, we need to think of new ways of enlivening Davos.

NYT’s Dealbook in Davos:

The Washington Post notes that while the industry and government leaders who descend on the Alpine village for the event have historically been confident about sharing their outlook on the future, they are far from reliable. The Post rounds up some of the the worst predictions by Davos attendees.

Among them, The Post says:

In 2001, Enron’s chief executive, Kenneth Lay, declared that his company was a “21st century corporation.” Enron filed for bankruptcy that December, and Mr. Lay was indicted for fraud in 2004 and found guilty in 2006.

In 2004, Bill Gates told the world “Two years from now, spam will be solved.” Enough said.

In 2008, former Treasury Secretary John Snow said that the United States recession would be ‘’short and shallow,” while Fred Bergsten, director of the Peter G. Peterson Institute for International Economics, declared: “It is inconceivable — repeat, inconceivable — to get a world recession.” They should think about starting their own stand-up routine.

The Atlantic’s Davos page

UPDATE:More Felix Salmon

Matthew Yglesias

All About Angela

Photo: Sean Gallup at Getty

Heather Horn at The Atlantic with the round-up. Horn:

The German election results are in, with Angela Merkel reelected to the chancellorship at the head of a new ruling alliance. The bigger news in the election was the dramatic decline the the Social Democratic Party, still No. 2 in terms of seats, which some observers are hailing as the “end of an era for the European left.” How have the elections changed Germany’s direction, and what does it mean?

John O’Sullivan at NRO:

The headline result is therefore: Center-Right Coalition Replaces Right-Left “Grand Coalition.” Merkel will finally have the reforming conservative coalition she has always said she wanted. Her socially conservative Christian Democrats will have the economically conservative Free Democrats as their junior partner.

Together with the fact that Merkel’s own spokesman on economics is a risk-taking believer in market reforms, this probably means that Germany’s so-called “social market” economy will shift slightly rightwards with long-term structural reductions in tax and economic regulation.

There is unlikely to be a change in Germany’s relatively cautious fiscal stance, however. It represents an all-party consensus in favor of lower stimulus payments than Washington and London have launched. It reflects the German nervousness of inflation. The built-in fiscal counterweights to recession such as unemployment and welfare transfer payments have built up a large budget deficit as it is. And, finally, the overall mixture seems to be working without any additional injection of spending — and perhaps because there is no additional spending.

Matthew Yglesias:

Angela Merkel wound up winning a strange kind of election victory, the kind where your party gets less support than it got before. Still, the CDU’s support only went down a little while the Social Democrats’ support collapsed and the liberal (in a European sense) Free Democrats gained a lot. The Greens and the Left Party also picked up support. The result is going to be some controversial free market reforms for Germany (I think the evidence suggests that most Germans actually don’t want the kind of reforms that this election result will lead to) and a real moment of crisis for the SPD that needs to really rethink some things

John Hinderaker at Powerline:

Once again, we see the sad spectacle of the Obama administration trying to mimic what has been worst in European politics, at the very time when Europeans are trying to break the shackles that have made their economies so much less productive than ours.

Gideon Rachman at Financial Times:

I think there are two big tests to look out for. First, tax cuts; both the CDU and the Free Democrats promised tax cuts – will they, can they, deliver? Second, what are they going to do about the Opel bail-out. Securing the future of a big car manufacturer was an important achievement for Merkel in the last days before the vote; but leading figures in the Free Democrats expressed misgivings about such a costly, anti-market measure. Whose views will prevail?

From Britain, where we face the prospect of spiralling tax rises, I can only envy those lucky Germans with their promise of lower taxes. But I wonder whether Merkel can really deliver. It is true that Germany’s budgetary position is slightly less dire than that of the UK – but it’s still pretty bad. Unemployment seems likely to rise over the next few months, which will put a further strain on the federal budget. The young professionals who voted Free Democrat and feel oppressed by the German tax burden will push for the coalition to deliver on its promises. But I suspect the tax cuts might be fairly token, at least at first.

I also think it highly unlikely that the new coalition will reverse course on the Opel bail-out – whatever the Free Democrats may think. The only thing that might persuade the German government to change course is pressure from Brussels and from Germany’s “European partners”.

Ole Reißmann at Business Week:

At around 2:20 a.m. local time, when the organization managing the federal elections published the voting results for all of Germany’s 16 federal states on its Web site, the nation saw a new power sitting on the seventh rung of the political ladder: The Pirate Party had managed to get 2 percent of the vote.

Granted, it’s not enough for the party to enter the German government, since a political party has to get 5 percent of the vote to do that. But for political newcomers like the Pirates, this can be interpreted as a success worth paying attention to. In many large German cities, they even got as much as 3 percent of the vote. And they were particularly popular among first-time male voters, from whom they might have won as much as 13 percent of the vote.

“This election has shown that the issues we’re campaigning for are important and that we will be more successful in the future,” party leader Jens Seipenbusch said at its post-election celebration. In a short time, his party has become the unofficial representative of Internet activists in Germany who don’t feel any affinity for the other parties and who have been feeling threatened in their natural environment—that is, online.

If “Back To The Future” Was Made Today, Marty McFly Goes Back To 1979

Brink Lindsey has a piece in Reason called Nostalgianomics about liberal pinning for the 50s. Specifically, he’s speaking of Paul Krugman, income inequality and social progress. The last two graphs:

Paul Krugman may long for the return of selfdenying corporate workers who declined to seek better opportunities out of organizational loyalty, and thus kept wages artificially suppressed, but these are creatures of a bygone ethos—an ethos that also included uncritical acceptance of racist and sexist traditions and often brutish intolerance of deviations from mainstream lifestyles and sensibilities.

The rise in income inequality does raise issues of legitimate public concern. And reasonable people disagree hotly about what ought to be done to ensure that our prosperity is widely shared. But the caricature of postwar history put forward by Krugman and other purveyors of nostalgianomics won’t lead us anywhere. Reactionary fantasies never do.

Veronique de Rugy at The Corner

Jim Manzi:

Brink goes on to argue that the political and social changes that have allowed growing inequality – and have in turn been reinforced by it – are good things, not bad things. These include greater freedom for women, acceptance of diversity and non-conformism and so on. I broadly agree with this diagnosis, though I think that Krugman paints too rosy a picture of the 1950s and Brink pays too rosy a picture of the current era. The trade-offs involved in policies that allow or encourage growing inequality are not nearly as one-sided as either Brink or Krugman asserts. They are uncomfortable.

But the United States didn’t just wake up in 1980 and decide to make a set of uncomfortable trade-offs through a process of abstract reasoning, or even entirely through organic social developments, we were pushed. What I think is missing from the debate as presented in Brink’s piece is international competition.

Manzi links to Jonah Goldberg, who writes about nostalgia for an even earlier time:

It seems to me that all of the new New Deal talk fails to grasp that the extent to which nostalgia drives our assumptions of “what works.” Even if you give the most charitable reading of the New Deal and the postwar period, the simple fact remains that those times aren’t like these times.

Goldberg is discussing the Niall Ferguson Financial Times article about Keynes and Krugman. Krugman had this blog post on Ferguson in early May. Here’s Paul Krugman‘s column on inflation, published a day before Ferguson. The New York Review of Books symposium with Krugman, Ferguson, Roubini, etc… Andrew Stuttaford excerpts part of the Ferguson piece at The Corner:

Of course, Mr Krugman knew what I meant. “The only thing that might drive up interest rates,” he acknowledged during our debate, “is that people may grow dubious about the financial solvency of governments.” Might? May? The fact is that people – not least the Chinese government – are already distinctly dubious. They understand that US fiscal policy implies big purchases of government bonds by the Fed this year, since neither foreign nor private domestic purchases will suffice to fund the deficit. This policy is known as printing money and it is what many governments tried in the 1970s, with inflationary consequences you do not need to be a historian to recall.

This fight between Ferguson and Krugman has gotten a lot of blog press.

Henry Blodget at Clusterstock

Noam Scheiber at TNR

Sheldon Filger at HuffPo

Gideon Rachman in FT

Cees Bruggemans in iAfrica sums it up:

But as history has shown, this may actually be very rational, demanding upfront that policymakers show it can work and thereby earning the compliance of bondholders rather than merely naively assume such compliance to be blindly forthcoming. Mr Ferguson goes wrong in claiming with the expectations crowd that governments are always wrong. In the present global crisis the Keynesian medication is needed and will work and to decry it merely suggests an inability to distinguish good from bad policy.

[…]So was this clash of titans useful? It most certainly helped in seeing where both gentlemen are going right, but also where they err. This aside of personal pettiness which suggests real big egos can’t have a normal conversation without completely missing the point of each other.

UPDATE: Daniel Gross in Slate