Old Policy Disputes Disguised as Compassion

If our Cuban-American community is to show maturity on the issue of how to respond to the train-wreck of a government and coming changes in Cuba, I would think less, not more, emotion would be a goal. Yet, in response to the damage inflicted by Hurricane Ike, the pages of the Miami Herald -- local columnist Myriam Marquez and local business leader, Carlos Saldriagas, have made what I consider to be emotional appeals regarding their support of temporarily [90 days] lifting the direct remittance bans, proposed by the Democrat challenger to the US House of Representatives, Raul Martinez.

Their appeals are aimed not at the logic and expected implications of abandoning the current policy, but straight at the heartstrings - evoking the imagery of hurricane damage and the need for doing the 'right thing' [the 'wrong thing' coalition apparently having failed to get their letter published]. Who believes that at the end of the 90 days, the same people requesting the change now would be satisfied and support the policy reverting to it's current position. I can give you their speeches now; 'we had hoped that the 3 month period would have been enough, but the enormity of the task is only now becoming evident to us. Think of ourselves in Miami and how long it took us to recover from Andrew. So let us now pledge, during this Christmas season....'

Now if the people requesting the policy change would state that they would unequivocally support the policy reverting to its current status, that would be different and something to consider. But not just an election season promise, which we know can change with ease. But rather a believable case on why 90 days would be enough, when we know going into this that 90 days will not even come close to addressing years of mismanagement and corruption, let alone hurricane damage.

But that's the point. Just as those of us who support trade and remittance restrictions are routinely accused of supporting failed policies, those advocating this change need to address in unemotional terms; why the bread and circus of a 90 day window, for people trapped by a hospice-like government which is immune to suffering? Differentiate why monies sent directly to Cuba differ from those which were well intentioned aid yesterday, but today line the pockets and extend the regime-life of a Mugabe in Zimbabwe. If it's because of our heritage as opposed to our faith, then say so clearly. Because as a Christian, when I look at Caribbean countries who have suffered greatly recently, who truly have no other options and for whom I sincerely believe a concentrated period of assistance from compassionate Miamians would do real good, that country is Haiti.

Given all that, my prayers, energies and dollars will go to Catholic Relief Charities for both Haiti and Cuba, not old policy disputes, disguised as compassion.

[Post-post Sept 16]: From a Miami Herald article which explores why Cuba rejected a $5 million offer of US aid:

''The Cuban Interests Section in Washington wishes to communicate to the government of the United States that our country cannot accept a donation from the country that blockades us, although it is willing to purchase the indispensable materials that the North American companies export to the markets, and requests authorization for the provision of same, as well as the credits that are normal in all commercial operations,'' the statement said.

``If the government of the United States does not wish to do so permanently, the government of Cuba requests that at least it do so during the next six months.''

Last week, U.S. Commerce Secretary Carlos Gutiérrez said the Cuban government is behind on payments to most of its creditors, and suggested that the request was a pretext.

''Do they really want us to extend their credits?'' he said.

Pro-embargo lobbyist Mauricio Claver-Carone said the Cuban government historically uses natural disasters to poke holes in the trade embargo. Hurricane Michelle in 2001 legalized cash agricultural sales, and now American farmers are among the top providers of food to Cuba.

''This isn't the first time they do this,'' Claver-Carone said. ``In 2001, it opened a Pandora's box.''

Note: Since Herald web links expire - their complete column & letter are provided at end of this post.

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Posted on Wed, Sep. 10, 2008
Ike a chance to show our compassion
BY MYRIAM MARQUEZ
The heavenly signs pierce the soul, harsh and devastating.

You can see them in the eyes of a wounded Haitian child caked in mud, gasping for life after Ike, the Category 3 hurricane that killed more than 300 and left a million homeless. Feel them in the tremble of a sobbing father holding his dead little girl. Hear them in prayers of Miami's Little Haiti community to Notre Dame du Perpétuel Secours, our Lady of Perpetual Help.

You can track the signs, too, in Hurricane Ike's path through Cuba. It roared through Nipe Bay near Santiago, where almost 400 years ago on that very day two young Indian brothers and a slave boy survived a storm and found a floating wood statue, bone dry, proclaiming ``I am the Virgin of Charity.''

LOST OPPORTUNITIES

As a multitude of Cuban exiles solemnly prayed the rosary Monday on the anniversary of the virgin's apparition, Ike's trajectory became a replay of historical misses and lost opportunities.

Ike kept pushing, challenging, reminding us of old battles as it ripped through central Cuba and swirled just a few miles from Playa Girón where young exiles fought in the failed Bay of Pigs invasion.

By Tuesday, Havana's old buildings were crumbling from Ike. The storm was blamed for the death of at least four Cubans in other towns and was expected to do more damage to an already devastated Pinar del Río province, where Gustav 10 days earlier destroyed crops and 100,000 homes.

How many more signs before we walk the compassionate conservative talk?

Haitians without U.S. immigration papers deserve temporary protected status. If not now, when? That immigration category is used during times of natural disasters and wars, giving undocumented immigrants the opportunity to remain in the United States and work, just as Salvadorans and Nicaraguans have been allowed to do.

You can't send help to your loved ones if you're in an immigration cell, unable to work for no other crime than your status as persona non grata.

South Florida's congressional delegation has consistently called for TPS for Haitians. Republicans and Democrats, alike, see the moral imperative. Republican U.S. Reps. Lincoln Diaz Balart, Mario Diaz Balart and Ileana Ros-Lehtinen quickly called on President Bush to do right by Haiti on TPS, as have Rep. Kendrick Meek and other Democrats.

A KEY MOMENT

Students of history know there are pivotal moments that offer remarkable transformations. The collapse of the Berlin Wall that led to the end of the Soviet empire caught the West by surprise. Ike may be our test.

For Bush has the opportunity to rise above the expected political drill of nothing for Cuba until the Castro brothers leave. It's good to see the Treasury Department is poised to approve new licenses for nongovernmental groups to offer hurricane relief to the Cuban people, but we can do more.

No one with any sense is saying dump the Cuba embargo and kiss up to the Castros. But what's so wrong with a 90-day window for Cuban exiles to rush to their families left behind and offer help, as Democratic congressional candidate Raúl Martinez has suggested?

I suspect Fidel and Raúl won't allow it. They only care about free credit so their already debt-driven government can get U.S. goods for nothing. Let them play politics with Cubans' suffering.

We are better than that.

Even for 90 days, only for 90 days, let's get rid of the political babble, the white noise and seize the challenge of our better angels.
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Miami Herald - Posted on Wed, Sep. 10, 2008
We are hurting Cubans, not the regime
Given the current debate over how the United States should react to the devastation left by Hurricanes Gustav and Ike in Cuba, it is important to put things in perspective. Hundreds of thousands of people have been seriously affected by the storms, and there will be a profound impact on a nation already on the verge of a food and housing crisis.

Ramon Saul Sanchez's Democracy Movement has asked the federal government to temporarily lift restrictions on remittances to allow Cuban Americans to send monetary and physical assistance to family on the island. Several exile organizations, including those that form part of Consenso Cubano, expressed their support for such a move. Almost all the leading Cuban dissidents have, also. To most observers, this is a perfectly logical, ethical, humanitarian and effective thing to do -- but not in the irrational and absurd context of U.S.-Cuba policy.

Disappointingly, but swiftly, the administration, in collaboration with Cuban-American legislators from both parties, chose to play politics, issuing a statement challenging the Cuban regime to, among other things, allow the U.S. Interests Section in Havana to directly distribute aid, offering a paltry and offensive $100,000. In a continuing political chess game where the suffering Cuban people are pawns, the United States challenges the regime in ways reminiscent of Fidel Castro's offer to send doctors to New Orleans after Hurricane Katrina.

I wish that our presidential candidates had refrained from intervening on this issue. When candidates take positions, issues become politicized. However, Barack Obama's comments were positive and constructive. While I have not heard John McCain's position on this issue, I cannot believe that he would agree with the administration's position, given his wife's recent trip to Vietnam and her laudable work there helping children with cleft palates. Vietnam holds more political prisoners and has more human-rights violations than Cuba. But the McCains have demonstrated that humanitarian efforts should transcend politics.

To propose, as the only option, something that the administration knows the Cuban regime is going to reject is playing politics with Cubans' suffering. If U.S. officials are sincere about helping them, they should act to unilaterally lift, temporarily, all restrictions on remittances and allow U.S. NGOs to send aid to Cuba. Our government cannot control how the Cuban government will react. But its leaders will be held accountable by Cubans and history's harsh judgment. What the Cuban government does, or fails to do, should not dictate our actions.

Instead of rushing to help our brethren, some in the Cuban-American community have engaged in the old, tired and increasingly sterile political debate.

Can we for once put the Cuban people first? This is the perfect opportunity to inject ethical considerations into a debate from which they have been absent for a long time. Can we continue to allow the end to justify cruel means? Can we expect to justify one wrong because the Cuban government commits another? Where are the voices of religious leaders? It is precisely on issues like these that they need to be heard, clearly and unequivocally.

The majority of the Cuban-American community is increasingly fed up with the continuing ineffective and worn out diatribe.

We ought to be freed to help our brethren in any way we can, directly and indirectly. In the end, it will be more politically effective to prioritize helping the Cuban people over hurting the regime. It is the only right thing to do.

CARLOS SALADRIGAS, Miami
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Miami Herald
Posted on Tue, Sep. 16, 2008
Cuba rejects U.S. supplies, asks for suspension of trade embargo
BY FRANCES ROBLES

A civilian aircraft was ready to be loaded with supplies to help residents of this hard-hit province and fly out of Miami Tuesday, but Havana rejected the U.S. humanitarian assistance offer -- repeating that what it really needs is a temporary suspension of the trade embargo.

Assistant Secretary of State Thomas Shannon called the offer made to Cuban diplomats ''unique and unprecedented,'' because in the interest of speeding up delivery, the U.S. government was prepared to turn over up to $2 million in plastic sheeting, hygiene kits, blankets and other items directly to the Castro government -- an exception Washington was willing to make because of the extreme humanitarian need.

The initial flight loaded with $348,000 in goods was part of a $5 million aid package the Cuban government shunned, saying in a statement Monday that it cannot accept help from ``government that blockades them.''

Henrietta Fore, director of the U.S. Agency for International Development, told reporters that about $3 million in cash will make its way to the storm-wracked island anyway through various nongovernmental organizations, earmarked for some 35,000 hurricane victims.

''This was a genuine offer,'' Fore said in a conference call with reporters Monday afternoon. ``We knew of the dire need. This was an important, serious offer of humanitarian assistance. We are hoping the Cuban government will reconsider.''

Washington came under fire last week because its first two offers to help Cuba in the wake of devastating back-to-back hurricanes were for just $100,000 -- if the Cubans allowed a disaster assessment team to survey storm damage. Critics argued that Washington was playing politics during a disaster and failed to step up at a critical time for the Cuban people.

Cuba rejected the two proposals, saying no assesment team was necessary. Fore stressed that its latest, more generous offer, made verbally to Cuban diplomats in Washington, had no conditions attached.

''People in need in time of a natural disaster like this are simply people in need,'' Fore said.

In its statement made public Monday, the Cuban government asked Washington for a six-month reprieve on embargo rules that prohibit the communist country from making purchases from American companies.

U.S. law allows Cuba to make cash agricultural purchases but prohibits it from buying on credit. Cuba's request for a six-month embargo suspension would require an act of Congress, experts said.

After two sharply worded statements -- including one that called Washington officials cynical liars -- Monday's note from the Cuban foreign ministry took a softer tone.

''The Cuban Interests Section in Washington wishes to communicate to the government of the United States that our country cannot accept a donation from the country that blockades us, although it is willing to purchase the indispensable materials that the North American companies export to the markets, and requests authorization for the provision of same, as well as the credits that are normal in all commercial operations,'' the statement said.

``If the government of the United States does not wish to do so permanently, the government of Cuba requests that at least it do so during the next six months.''

Last week, U.S. Commerce Secretary Carlos Gutiérrez said the Cuban government is behind on payments to most of its creditors, and suggested that the request was a pretext.

''Do they really want us to extend their credits?'' he said.

Pro-embargo lobbyist Mauricio Claver-Carone said the Cuban government historically uses natural disasters to poke holes in the trade embargo. Hurricane Michelle in 2001 legalized cash agricultural sales, and now American farmers are among the top providers of food to Cuba.

''This isn't the first time they do this,'' Claver-Carone said. ``In 2001, it opened a Pandora's box.''

In Cuba, storm victims aren't waiting around for help from Washington -- or Havana.

From coast to coast, Cubans are picking up debris, hacking away at felled trees and hammering nails. Convoys of trucks barrel down the highways with the first of much-needed supplies. Eighteen-wheelers are loaded with debris, wood, concrete shingles -- and people.

People are working alone or together doing everything from fixing their homes to fixing roads and utility poles.

Yosmany González, who lives in Holguín province in eastern Cuba, said most Cubans were gathering up materials themselves. Off the floor.

He spent the weekend gathering wooden sticks that were left of his home to begin laying the foundation for the rebuilding of his house.

''The people from the Committee in Defense of the Revolution said the materials would be coming from Venezuela in a few months,'' his wife Yanexy said.

On the outskirts of Sancti Spíritus, Miguel Portal and his buddy Leonardo fixed Portal's ceramic roof, piecing together remaining chunks like a jigsaw puzzle. Leonardo -- known as ''Chi Chi'' -- painstakingly examined each piece to see which were good enough to use and where to place them.

''I don't have much hope that the government will help me out,'' Portal said. ``I have been waiting four years for the materials to make my house sturdier. They said they would provide the materials to make it look better, because it was close to the main road and they want it to look better when tourists drive by.''

The dairy farmer said materials are generally provided by community leaders.

''Lots of times they send you on a wild goose chase,'' he said. ``They say, `Well, we don't have anything here, so go to this city or this place and talk to this person, and when you get there, you have to go on another wild goose chase.'

''I'm done chasing geese,'' he said. ``I have to figure things out for myself.''

And in Pinar del Río in western Cuba, a message for President Bush hung from a window shop: ``Mr. Bush, this town can't be fooled, and we can't be bought.''

Miami Herald correspondents spread across Cuba contributed to this report. Their names are not being published because they lack the visas required by the Cuban government to report from the island. Robles reported from Miami.
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Judge Cohen Punts Even When She Rules

I am glad that the stadium plan cleared this hurdle, but ...

I had an earlier post which speculated on whether a judge could recuse themselves due to an election. But now, safely reelected, you would think that Judge Cohen would be free to provide a clear perspective on the case brought by Norman Braman against the Marlins and local governments. However, by ruling in the Marlins favor that a new stadium could serve the public good, but then noting -- see Sarah Talalay's blog -- that the Marlins got a 'sweet deal,' she still seems more concerned about not appearing to endorse the stadium plan, even if the law did not allow her to rule against it.

I noted the following items in Judge Cohen's ruling:

• The financial condition of the Marlins is unknown to anyone except the Marlins and MLB [that sentence is a source of great sadness to this blogger].
• Marlins consistently have among the lowest attendance figures in MLB.
• Marlins are the seventh most watched MLB team on television.
• The County will loan the Marlins $35 million for the construction of the stadium. The Marlins will repay that loan at $2.3 million per year for 30 years - that amount has incorrectly been referred to as rent.
  
• Marlins will pay the City of Miami approx $4.6 million per year for parking spaces.
  
• Braman claimed that several years ago Marlins were $60 million in debt.
  
• 18 new stadiums since 1992 were constructed, are under construction, or are in pre-construction stage in cities throughout the nation ... most with large contributions of public funds and significant revenue streams to the sports franchise.
  
• Only two courts in the country have held that the building of sports facilities do not satisfy a paramount public purpose.
• Judge agrees with Braman that the Marlins got a sweet deal and that they may not be able to honor their financial obligations.
  

Things I would have liked to see addressed in her ruling:

• Why is it a sweet deal? In comparison to which of the other recent stadium financing agreement(s)?
• Beyond the Braman testimony regarding possible Marlins debt years ago, what other facts contribute to her perception that the Marlins may not be able to meet their obligations?
• What would account for government officials entering into a stadium agreement with the Marlins without having informed themselves as to their finances?
  
• If the Marlins are deep in debt, is the sweet deal a necessary component to having a viable MLB franchise in Miami?
• How much sweeter would the deal have to be in order for her not be concerned about the Marlins meeting their obligations to the county?
  

I would have expected a judicial ruling to either address the questions I list or avoid topics which are 'not the business of the Court.' So Judge Cohen, next time, please put up [quantify] or ... edit more aggressively.

See a link to a PDF of her decision. See various complete Sun-Sentinel and Miami Herald articles below.
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South Florida Sun-Sentinel.com
Marlins win major battle in lawsuit over stadium

By Sarah Talalay

SunSentinel.com

7:57 PM EDT, September 9, 2008

MIAMI

The Florida Marlins say they will proceed with plans for a $515 million ballpark at the site of the former Orange Bowl after a Miami judge ruled Tuesday that the project serves a "paramount public purpose" - meaning public dollars can be used to build it.

Miami-Dade Circuit Court Judge Jeri Beth Cohen called the ballpark issue "contentious and emotional," but said the law is clear in the case filed by auto dealer Norman Braman targeting the financing of $3 billion in Miami projects, including the ballpark.

"The job of this Court is to examine the facts and apply those facts to the law," Cohen wrote.

The Marlins, Miami-Dade County and city of Miami will continue negotiating final construction and financing agreements and hope to present them to city and county commissioners in the coming weeks. The team plans to unveil renderings of the 37,000-seat ballpark shortly.

"This is a critical step in securing the long-term future of Major League Baseball in Miami," Marlins owner Jeffrey Loria said in a statement. "We will proceed immediately to finalize discussions with the County and the City to put in place all the long-awaited final agreements."

Braman, however, vowed to fight on.

"We're optimistic we're going to prevail on appeal," Braman said. "We're going to take it to the district court and if necessary to the Supreme Court of the State of Florida."

Cohen plans to rule on the case's remaining count - whether a public vote is needed on a portion of the funding of the $3 billion in projects - after Sept. 15, as she is waiting for the state Supreme Court to rule in similar cases.

Regardless, the team, city and county believe they can move forward because the ballpark's financing does not rely on property tax dollars. Braman, however, disagrees and says the funding for all the projects, including the stadium, must be subject to a public vote.
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South Florida Sun-Sentinel.com
Marlins Stadium Update No. 0-60
> Posted by Sarah Talalay at 11:40 PM

The Marlins scored a huge victory Tuesday when Miami-Dade Circuit Judge Jeri Beth Cohen ruled their ballpark serves a “paramount public purpose” – meaning public dollars can be used to help build it.

The team, Miami-Dade County and city of Miami believe the ruling in the case filed by auto dealer Norman Braman targeting the financing for $3 billion in Miami projects, including the ballpark, means they can move ahead with their plans for the $515 million stadium at the site of the former Orange Bowl.

They plan to step up negotiations of definitive construction, financing and other documents so they can bring them to city and county commissioners in the coming weeks. And the team says it will finally be able to share new renderings of the ballpark soon.

“We welcome Judge Cohen’s ruling, which confirms that our elected officials have made the right decision for the future of our community. It is unfortunate that so much time and so much of the public’s money has been wasted in this legal process,” Marlins owner Jeffrey Loria said in a statement. “This is a critical step in securing the long-term future of Major League Baseball in Miami. We will proceed immediately to finalize discussions with the County and the City to put in place all the long-awaited final agreements.”

Interestingly, Cohen's ruling indicated that she understood the ballpark issue is "contentious and emotional," but acknowledged it was the court's role to apply the law, not sentiment.

"While the Court agrees with Plaintiff that the Marlins are getting what amounts to a “sweet deal,” this is, put bluntly, not the business of this Court," Cohen wrote in her 41-page ruling.

The team would like to begin construction by year’s end and open the 37,000-seat retractable roof ballpark in 2011. That time frame is getting exceedingly unlikely, but hasn’t been written off yet.

“Our plan is to recommend to the board that we proceed as we’ve always intended,” Miami-Dade County Manager George Burgess said. “We’re happy about the project … We’re committed to a project and if you’re confident in your position, why would you stop?”

Braman, however, plans to continue his legal fight, taking his case to appellate court.

“We’re disappointed in the judge’s ruling, but not that surprised by it,” Braman said. “We’re going to be appealing the judge’s decision, we’re optimistic we’re going to prevail on appeal. This is the first round of a fight, that we expected would last beyond the lower court.”

Braman said he will take the case to appellate court and even as far as the Florida Supreme Court, if necessary.

He also quoted Winston Churchill as saying “Never, never, never, never, never, never surrender your principles. Fight on.”

Besides, he said, “This is the end of the third inning of a nine-inning game. It’s got six more innings to go.”

Among the items Braman is referring to is the one remaining count in his case on which Cohen has yet to rule: whether a portion of the financing for the $3 billion in city projects must go to a vote of the public.

Cohen said she will not rule until after Sept. 15, as she is waiting for the Florida Supreme Court to rule on similar cases.

But the team, city and county say that ruling is immaterial to the ballpark since the financing for the venue does not rely on property taxes.

Braman, however, disagrees. He believes the entire financing package for the Miami projects must go to public referendum.

Burgess and Marlins President David Samson say the referendum question is unrelated to the ballpark.

“All I can say is he can avail himself of whatever legal process is his right,” Samson said. “As far as we’re concerned this is the right result. We’re very confident it will be upheld at any and all appellate levels.”

Braman was not shocked to learn the team plans to move forward.

“There’s nothing here that surprises me,” Braman said. “They still have to get bonding. If they get someone silly enough to get them bonding, if they’re willing to take that risk, that’s their problem, not mine.”
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Miami Herald

Posted on Wed, Sep. 10, 2008
Judge: Florida Marlins stadium serves public good

BY CHARLES RABIN AND LARRY LEBOWITZ

The Florida Marlins took a major stride Tuesday in their lengthy quest for a permanent South Florida home, when a judge ruled that a new ballpark funded primarily through tax dollars serves the public good.

With Miami-Dade Circuit Court Judge Jeri Beth Cohen's ruling, the county and Marlins said they will move ahead with construction of the $515 million, 37,000-seat, retractable-roof stadium in Little Havana.

''This is the one we've been waiting for,'' said Marlins President David Samson. ``It's a complete victory. It took a long time.''

County Mayor Carlos Alvarez on Tuesday restated what he told the court during his deposition: Building the ballpark will revitalize the neighborhood and create much-needed jobs.

''When the economy is hurting, it means thousands of jobs -- good-paying construction jobs -- for people who need them now,'' he said.

The team and government are going forward even as one of billionaire auto dealer Norman Braman's seven lawsuit counts has yet to be adjudged. They believe that issue -- involving the complex financing that set the stadium and a string of other public works projects in motion -- would not affect the new ballpark eyed for the former Orange Bowl site.

Braman took minor solace in Cohen's 41-page ruling. Though Cohen found that the stadium meets the key ''public purpose'' test, she also gave credence to his belief that the stadium can be viewed as a ''sweet deal'' for the Marlins.

Cohen noted the county didn't do an economic impact study for the Little Havana area, said the site has no link to downtown, noted the team did not have to make its financials public even though almost $400 million in public money would be spent, and agreed with Braman that clear proof does not exist that a new stadium would stimulate the neighborhood.

''It reminds me of a football game that you lose when all the statistics are on your side,'' Braman said after the ruling. ``It's not what we believe the constitution of the state of Florida states, and we will appeal the judge's decision to the Supreme Court.''

Replied Samson: ``Let's cut right through it. The trial court's job is to apply the law -- not to make the law.''

FORCE OF LAW

Ultimately, Cohen said the case law was unshakable, and that she could not counter 39 years of rulings that backed the Marlins, the county and the city of Miami's contention that the public would benefit from a new stadium.

'' . . . The law in Florida is clear that retaining a professional baseball team in Miami satisfies a paramount public purpose,'' the judge wrote.

Braman sued the county, Miami and the Marlins over a smattering of issues, chief among them the claim that the use of $382 million in tourist tax dollars to build a private entity a ballpark does not serve a public purpose.

His bigger concern was that the public did not get a vote, through referendum, on the spending -- part of a larger multibillion-dollar megaplan for Miami. Government leaders countered that the public elected the politicians who approved the development blueprint.

Tuesday's ruling continued a string of losses for Braman, with all six lawsuit counts adjudged so far going against him.

Still on the table is a ruling from Cohen on the sole remaining count: whether the county can use Community Redevelopment Agency dollars to pay off a $484 million construction debt at the Adrienne Arsht Center for the Performing Arts.

Though that financing, on the surface, has no ties to building a ballpark, it's all part of Miami's most expansive public works plan in decades -- the $3 billion deal to build a port tunnel, a park at Bicentennial, the ballpark and a streetcar system, and pay off the Arsht Center debt.

MORE MONEY

Paying off the debt frees up another pot of money to help fund the ballpark, Braman contends, noting that the team signed an agreement linking the arts center payoff and the ballpark.

The county argues it could build the stadium regardless of the arts center debt.

The agreement calls for the Marlins to put $120 million toward the stadium, and also repay the county another $35 million in ``rent payments.''

Braman believes that if he wins on the last count, the court could potentially order a referendum on the spending at the Arsht Center. That, he believes, could doom the stadium.

The other side sees that last issue differently.

The ballpark, they said, will be financed with an array of tourist and convention-development and sports-franchise taxes, plus a $50 million bond voters approved in 2004 for Orange Bowl renovations -- but no CRA funds.

Though Alvarez and County Manager George Burgess say there's no link between the final ruling and the stadium, they've avoided answering how the Arsht Center debt would be paid off -- if the judge rules it's illegal.

Cohen said she'll make her decision after the Supreme Court rules on a similar case from Escambia County. Initially, the court decided property tax money couldn't be used to pay off bond debt without a public vote, a ruling that could have resonance in the Braman case.

The court then decided to rehear a motion and hasn't issued a final ruling. There is no sense when Cohen will decide this issue.

Braman's hope now is that, with a favorable ruling in that count, a political change of will would doom the stadium.

But Tuesday, the government was focused on the ruling at hand.

''We were quite confident that was how this ruling was going to come down,'' Burgess said Tuesday at County Hall.

Miami Mayor Manny Diaz said the still-pending count of Braman's suit will not hold back construction, though he couldn't pinpoint the date for a stadium groundbreaking.

The city will move ''as fast as we humanly, physically, possibly can,'' Diaz said.

The Marlins are pushing ahead with architectural drawings and finalizing arrangements with a contractor, all in the hopes of opening the 2011 season in the new park.

If the Marlins hope to break ground this year, county commissioners must finalize construction, management and other agreements; and city leaders need to approve land-platting and permits.

But that was the last thing on Marlins owner Jeffrey Loria's mind Tuesday, shortly before his team took the field against National League rival Philadelphia.

The team said a retractable roof stadium would draw crowds otherwise driven away by South Florida's steamy, rainy weather. One midday game last week drew fewer than 600 fans in their seats for the first pitch.

A new stadium would pour concession and skybox proceeds into the bottom line of a team that has won two World Series but has had among the lowest payrolls and attendance in baseball.

''We look forward to the Marlins playing in the new ballpark for generations to come,'' Loria said in a prepared statement.

Miami Herald staff writer Michael R. Vasquez contributed to this report.
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Real Poverty and Those Who Fight It

Hint: It would include no one advocating a greater role for government in the life of the poor. Those types may be well-intentioned, but the goal of eliminating poverty is fundamentally at odds with the need to establish constituencies -- i.e. folks to be 'saved.' To date, tobacco is the only industry which knowingly attempts to kill off their clientele.

A recent NYT article highlights the efforts of Chandra Bhan Prasad, a former Maoist revolutionary who was born into a Hindu caste system in India, and his advice to his fellow untouchables:

Get rid of your cattle, because the care of animals demands children’s labor. Invest in your children’s education instead of in jewelry or land. Cities are good for Dalit outcastes like us, and so is India’s new capitalism.

Gary Becker gives us the economic rationale which explains why Prasad's belief -- that competitive and open markets is the only hope for his caste [the poor] -- is valid:

The Indian government early after it became independent in 1947 officially abolished the caste system, and especially the horrible position of the 160 million untouchables. Nevertheless, this caste experienced limited progress during the 40 years of socialism and slow economic growth that followed independence. Prasad became an economic liberal after seeing what he interpreted as the dramatic effects of 15 years of economic reform on the economic opportunities of the untouchables.

The economic theory of discrimination adds analytical support to Prasad's observations. An employer discriminates against untouchables, women, or other minority members when he refuses to hire them even though they are cheaper relative to their productivity than the persons he does hire. Discrimination in this way raises his costs and lowers his profits. This puts him at a competitive disadvantage relative to employers who maximize their profits, and hire only on the basis of productivity per dollar of cost. Strongly discriminating employers, therefore, tend to lose out to other employers in competitive industries that have easy entry of new firms.

The rapid growth of world trade during the past several decades, and the increasing market orientation of different economies, sometimes raise rather than lower income inequality, as least for a while. However, trade and competition has made this inequality more dependent on differences in human and other capital, and less directly on skin color, gender, religion, caste, and other roots of discrimination. This is an unsung but major consequence of greater trade and globalization.

Not coincidentally, that belief strongly correlates with the work being done by Muhammad Yunus, of neighboring Bangladesh, founder of the Grameen Bank and pioneer of the the micro-lending movement.

See the complete article and post referenced above, below.

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August 30, 2008
Crusader Sees Wealth as Cure for Caste Bias
By SOMINI SENGUPTA

AZAMGARH DISTRICT, India — When Chandra Bhan Prasad visits his ancestral village in these feudal badlands of northern India, he dispenses the following advice to his fellow untouchables: Get rid of your cattle, because the care of animals demands children’s labor. Invest in your children’s education instead of in jewelry or land. Cities are good for Dalit outcastes like us, and so is India’s new capitalism.

Mr. Prasad was born into the Pasi community, once considered untouchable on the ancient Hindu caste order. Today, a chain-smoking, irrepressible didact, he is the rare outcaste columnist in the English language press and a professional provocateur. His latest crusade is to argue that India’s economic liberalization is about to do the unthinkable: destroy the caste system. The last 17 years of new capitalism have already allowed his people, or Dalits, as they call themselves, to “escape hunger and humiliation,” he says, if not residual prejudice.

At a time of tremendous upheaval in India, Mr. Prasad is a lightning rod for one of the country’s most wrenching debates: Has India’s embrace of economic reforms really uplifted those who were consigned for centuries to the bottom of the social ladder? Mr. Prasad, who guesses himself to be in his late 40s because his birthday was never recorded, is an anomaly, often the lone Dalit in Delhi gatherings of high-born intelligentsia.

He has the zeal of an ideological convert: he used to be a Maoist revolutionary who, by his own admission, dressed badly, carried a pistol and recruited his people to kill their upper-caste landlords. He claims to have failed in that mission.

Mr. Prasad is a contrarian. He calls government welfare programs patronizing. He dismisses the countryside as a cesspool. Affirmative action is fine, in his view, but only to advance a small slice into the middle class, who can then act as role models. He calls English “the Dalit goddess,” able to liberate Dalits.

Along with India’s economic policies, once grounded in socialist ideals, Mr. Prasad has moved to the right. He is openly and mischievously contemptuous of leftists. “They have a hatred for those who are happy,” he said.

There are about 200 million Dalits, or members of the Scheduled Castes, as they are known officially, in India. They remain socially scorned in city and country, and they are over-represented among India’s uneducated, malnourished and poor.

The debate over caste in the New India is more than academic. India’s leaders are under growing pressure to alleviate poverty and inequality. Now, all kinds of groups are clamoring for what Dalits have had for 50 years — quotas in university seats, government jobs and elected office — making caste one of the country’s most divisive political issues. Moreover, there are growing demands for caste quotas in the private sector.

Mr. Prasad’s latest mission is sure to stir the debate. He is conducting a qualitative survey of nearly 20,000 households here in northern state of Uttar Pradesh to measure how everyday life has changed for Dalits since economic liberalization began in 1991. The preliminary findings, though far from generalizable, reveal subtle shifts.

The survey, financed by the Center for the Advanced Study of India at the University of Pennsylvania, finds that Dalits are far less likely to be engaged in their traditional caste occupations — for instance, the skinning of animals, considered ritually unclean — than they used to be and more likely to enjoy social perks once denied them. In rural Azamgarh District, for instance, nearly all Dalit households said their bridegrooms now rode in cars to their weddings, compared with 27 percent in 1990. In the past, Dalits would not have been allowed to ride even horses to meet their brides; that was considered an upper-caste privilege.

Mr. Prasad credits the changes to a booming economy. “It has pulled them out of the acute poverty they were in and the day-to-day humiliation of working for a landlord,” he said.

To prove his point, Mr. Prasad recently brought journalists here to his home district. In one village, Gaddopur, his theory was borne out in the tale of a gaunt, reticent man named Mahesh Kumar, who went to work in a factory 300 miles away so his family would no longer have to live as serfs, tending the animals of the upper caste.

When he was a child, Dalits like him had to address their upper-caste landlords as “babu-saab,” close to “master.” Now it is acceptable to call them “uncle” or “brother,” just as people would members of their own castes.

Today, Mr. Kumar, 61 and uneducated, owns an airless one-room factory on the outskirts of Delhi, with a basic gas-fired machine to press bolts of fabric for garment manufacturers. With money earned there, he and his sons have built a proper brick and cement house in their village.

Similar tales are echoed in many other villages across India. But here is the problem with Mr. Prasad’s survey. Even if it chronicles progress, the survey cannot tie it to any one cause, least of all economic changes. In fact, other empirical studies in this budding area of inquiry show that in parts of India where economic liberalization has had the greatest impact, neither rural poverty nor the plight of Dalits has consistently improved.

Abhijit Banerjee, an economist at M.I.T. who studies poverty in India, says that the reform years coincide with the rise of Dalit politicians, and that both factors may have contributed to a rise in confidence among Dalits.

Moreover, Old India’s caste prohibitions have made sure that some can prosper more easily than others. India’s new knowledge-based economy rewards the well-educated and highly skilled, and education for centuries was the preserve of the upper castes.

Today, discrimination continues, with some studies suggesting that those with familiar lower-caste names fare worse in job interviews, even with similar qualifications. The Indian elite, whether corporate heads, filmmakers, even journalists, is still dominated by the upper castes.

From across India still come reports of brutality against untouchables trying to transcend their destiny.

It is a measure of the hardships of rural India that so many Dalits in recent years are migrating to cities for back-breaking, often unregulated jobs, and that those who remain in their villages consider sharecropping a step up from day labor.

On a journey across these villages with Mr. Prasad, it is difficult to square the utter destitution of his people with Dalit empowerment. In one village, the government health center has collapsed into a pile of bricks. Few homes have toilets. Children run barefoot. In Gaddopur, the Dalit neighborhood still sits on the edge of the village — so as not to pollute the others, the thinking goes — and in the monsoon, when the fields are flooded, the only way to reach the Dalits’ homes is to tramp ankle deep in mud. The land that leads to the Dalit enclave is owned by intermediate castes, and they have not allowed for it to be used to build a proper brick lane.

Indu Jaiswal, 21, intends to be the first Dalit woman of Gaddopur to get a salaried job. She has persuaded her family to let her defer her marriage by a few years, an audacious demand here, so she could finish college and get a stable government job. “With education comes change,” Ms. Jaiswal said. “You learn how to talk. You learn how to work. And you get more respect.”

Without education, the migrants from Gaddopur also know, they can go only so far in the big cities that Mr. Prasad so ardently praises. Their fabric-pressing factories in and around Delhi have been losing business lately, as the big textile factories acquire computerized machines far more efficient than their own crude contraptions. One man with knowledge of computers can do the work of 10 of their men, they say. Neither Mr. Kumar, nor the two sons who work with him, can afford to buy these new machines. Even if they could, they know nothing about computers.

The village Dalits do not challenge Mr. Prasad with such contradictions as he travels among them preaching the virtues of economic liberalization. He is a big man, a success story that makes them proud.

Among the broad generalizations he favors, he says that Dalits aspire to marry upper-caste Brahmins to step up the ladder. He married a woman from his own caste, who, he proudly points out, is light-skinned. Across the caste ladder, fair complexion is still preferred over dark.

“Economic expansion is going to neutralize caste in 50 years,” he predicted. “It will not end caste.”
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September 07, 2008
Competitive Markets and Discrimination Against Minorities - Gary Becker


An eye-opening article in the New York Times on August 29th discusses the effects of India's economic reforms and subsequent economic growth on the poverty and progress of the untouchables. This is India's lowest and poorest caste whose members have been shunned by the other castes for centuries. They have been confined to the dirtiest and least desirables jobs. The article is built around the views of a successful untouchable, Chandra Bhan Prasad, a former Maoist revolutionary who is married to another untouchable. His observations and interpretation of the effects of India's economic liberalization that started in 1991 on progress of some untouchables converted him to the belief that competitive and open markets is the only hope for his caste.

The Indian government early after it became independent in 1947 officially abolished the caste system, and especially the horrible position of the 160 million untouchables. Nevertheless, this caste experienced limited progress during the 40 years of socialism and slow economic growth that followed independence. Prasad became an economic liberal after seeing what he interpreted as the dramatic effects of 15 years of economic reform on the economic opportunities of the untouchables.

The economic theory of discrimination adds analytical support to Prasad's observations (see my The Economics of Discrimination, 2nd. ed., 1973). An employer discriminates against untouchables, women, or other minority members when he refuses to hire them even though they are cheaper relative to their productivity than the persons he does hire. Discrimination in this way raises his costs and lowers his profits. This puts him at a competitive disadvantage relative to employers who maximize their profits, and hire only on the basis of productivity per dollar of cost. Strongly discriminating employers, therefore, tend to lose out to other employers in competitive industries that have easy entry of new firms.

This is why minorities typically do better in new industries with young and initially smaller firms. Both Jews and American blacks were accepted more readily in Hollywood in its early days than in other established industries, like steel making and banking, although blacks were limited primarily to entertainment roles. Contrast this with American baseball, where the major league owners had a virtual monopoly of the industry. They did not accept any black players until Branch Rickey broke the color bar in 1947 by promoting Jackie Robinson from the minor leagues to the Brooklyn Dodgers. This long delay in accepting blacks by the baseball monopoly occurred despite the fact that for decades many outstanding black players could be observed playing in segregated Negro leagues.

Employee discrimination against minority fellow workers-such as a male worker who does not want to work for a female boss- cannot be so easily competed away by non-discriminating employers. For they have to pay discriminating employees more, perhaps a lot more, to work with minority members. A similar argument applies to consumers who do not want to be served by particular minorities. Yet in these cases too, competition can blunt the impact of prejudice. For profit-maximizing employers will attempt to avoid the cost of discriminating employers by segregating minorities into separate companies. For example, women bosses may have mainly women employees, or untouchable foremen will supervise untouchable workers.

Segregated minority workers in competitive markets may get paid just as much relative to their productivity as do majority workers in these markets. In a fundamental way, segregation can serve as a way to bypass the prejudices of other workers, consumers, and employers. When Jews could not get work in the banking industry at the turn of 20th century, they began to open their own banks that hired mainly other Jews. African -American doctors and dentists in the old South catered to other blacks as their patients.

Globalization and the growth of world trade have added another competitive force against discrimination, one that is surely helping Indian untouchables and other minorities. As I mentioned earlier, costs of production are raised when employers discriminate against various minorities in their country. Employers in other countries not burdened with costs of discrimination will be able to undersell discriminating employers in the international market for goods. This too acts as a force lowering the impact of discriminating employers, and reduces the international competitiveness of countries where discrimination in employment is dominant.

The slow growth of the old American South is a good illustration of the effects of international and interregional competition. Discrimination against former slaves was rampant in most parts of the South. Private desires to discriminate were supported and often enforced by discrimination by state and local governments. Blacks were denied access to schools of equal quality, and local governments sometimes retaliated against local companies that promoted blacks to higher-level positions. As a result, Southern manufacturing companies were at a disadvantage relative to companies from the North and West, and also to those from other countries. In good measure because of this systematic government discrimination, and private discrimination enforced often by government pressures, the South performed poorly for a century after the end of the Civil War.

The rapid growth of world trade during the past several decades, and the increasing market orientation of different economies, sometimes raise rather than lower income inequality, as least for a while. However, trade and competition has made this inequality more dependent on differences in human and other capital, and less directly on skin color, gender, religion, caste, and other roots of discrimination. This is an unsung but major consequence of greater trade and globalization.
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September 07, 2008
Competition, Discrimination, and Law -- Richard Posner's Comment

Becker points to India as an example of a society in which competition has been more effective than law in reducing discrimination in employment. As with most analyses of historical phenomena, determining causation is rife with uncertainty. Had the Indian government not abolished the caste system, would discrimination against untouchables have declined as much as it has?

The question is of more than academic interest from an American standpoint because we have laws against so many forms of employment discrimination--discrimination on racial grounds, of course, but also on grounds of ethnicity, religion, sex, disability, and age. We also had a caste system in the South until relatively recently. So do we need discrimination laws, or can competition be relied on to eliminate discrimination?

The answer I would give is that competition cannot be relied upon to eliminate discrimination (nor has Becker ever argued that it can be), but that, even so, laws against discrimination may not be desirable on balance, at least from the standpoint of economic efficiency, as distinct from making a political or moral statement. They may also not be very effective. I will confine my analysis largely to employment discrimination.

If an important class of customers does not want to be served by, say, black employees, or if an important class of workers does not want to work with black employees, then the tendency in the absence of a discrimination law, as Becker explains, will be segregation of the workforce: the market will be served by a combination of all-white and all-black firms. If, however, segregation raises employers' costs by more than the increase in wages that they would have to pay their white employees to induce them to work side by side with blacks, plus the loss of net revenues from white customers who do not want to be served by black employees, there will be competitive pressure on the employers to integrate their work forces. The pressure will depend in part on how strong the whites' aversion to working with or dealing with blacks is. There is no reason for competition to affect that aversion, other than by bringing the costs of it home to employers and through them to their white workers and customers.

Although law can try to eliminate employment discrimination, it is unlikely to be very effective and if it is effective it may not be efficient. Take the second point first. Suppose white employees have a strong aversion to working with blacks. Then forbidding discrimination will impose a heavy cost on the white employees. If there are more of them than there are blacks, the cost to the white employees may exceed the benefits to the black employees. Of course, an antidiscrimination law may rest on a political or moral judgment that costs imposed by thwarting a taste for discrimination should not count in the social calculus, but that is a judgment outside of economics.

Now as to the efficacy of such laws: it is bound to be limited unless enforced by savage penalties, which our discrimination laws are not. There are three reasons for their limited efficacy. The first is that an employer who wants to continue discriminating against blacks can (within limits) reconfigure his work force to reduce his demand for skills likely to be possessed by black applicants for employment, can substitute capital for labor, and can relocate to areas in which the applicant pool contains few blacks. Second, felt legal pressure to hire blacks results in "affirmative action," which both creates resentment among whites and casts some doubt on the average quality of black employees and so in effect stigmatizes the entire class. And third, because a discrimination law makes it more difficult to fire a member of the class protected by the law, it increases the cost of hiring members of the class and so increases the incentive to discriminate in hiring. There is some evidence that the passage of the Americans with Disabilities Act, forbidding discrimination against the disabled, led to an actual decline in the number of disabled persons employed.

Although an employment discrimination law is thus apt to be of limited (though not zero) efficacy, other bodies of law can play a large role—larger even than market forces—in reducing employment discrimination. Much employment is public, and public bodies can decide to incur the costs of eliminating discrimination in their work forces and hire many blacks. In addition, laws that reinforce a caste system, such as the Jim Crow laws in the southern states that persisted into the 1950s, can reduce employment opportunities for blacks beyond what private discrimination would do, for example by limiting their educational opportunities. The repeal or invalidation of such laws can thus indirectly increase black employment opportunities.

Deregulation is a minor but interesting legal change that tends to reduce discrimination. A regulated monopoly is constrained in the amount of monetary profit that it can obtain, but unconstrained in nonmonetary perks, including indulging a taste for discrimination.

Neither legal nor market forces have brought employment parity between whites and blacks in the United States. Parallel with the struggle of blacks for parity, Jews, East Asians, and immigrants generally, have made rapid economic progress and indeed (at least in the case of Jews and East Asians) largely overcome discrimination, yet without significant help from the law. An open economy provides opportunities even to victims of discrimination, especially if the victim group is large enough to achieve economies of scale in trade within the group. As members of the group grow modestly affluent and thus achieve a standard of living that enables them to assimilate to the larger culture, as by consuming similar goods and services and sending their children to good schools, discrimination against them declines because they cease to seem “different” from the majority. When members of a minority group talk and think and act like the majority and have the same tastes and in short share the same culture, the fact that they may have a different physical appearance ceases to count greatly against them, as indicated by high rates of intermarriage in the groups I have mentioned. Assimilation to the dominant culture, as yet incomplete for a great many blacks, may thus be the major force in reducing discrimination, with competition and law playing lesser roles.
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Fannie, Freddie and the Credibility GAAP

Accounting humor:

What's the definition of an accountant? Someone who solves a problem you didn't know you had in a way you don't understand.

What's an auditor? Someone who arrives after the battle and bayonets the wounded.

What are Generally Accepted Accounting Principles [GAAP]? The difference between accounting theory and practice.

In my world that's funny, but this isn't; In uncertain economic times, my accounting profession is part of the problem, not the solution.

Bloomberg.com reports the following:

Treasury Secretary Henry Paulson decided to take control of Fannie Mae and Freddie Mac after a review found the beleaguered mortgage-finance companies used accounting methods that inflated their capital, according to people with knowledge of the decision.

Morgan Stanley, hired by the Treasury to probe the companies' finances, concluded the accounting, while legal, enabled Freddie, and to a lesser extent Fannie, to overstate the value of their reserves, according to the people who declined to be identified because the findings are confidential.

See the WSJ and NYT articles describing the takeover.

The WSJ Editorial page weighs in on the bailout itself [complete editorial copied at end of post]:

We only wish Mr. Paulson had gone further and erased all private equity holders the way the feds do in a typical bank failure. Fan and Fred holders had profited handsomely for decades by exploiting an implicit taxpayer guarantee that their management claimed didn't exist. Now that the taxpayers are in fact stepping in, the current common and preferred holders deserve to lose everything. Mr. Paulson apparently wanted to dodge that political fight. If Fan and Fred share prices rally this week, we'll know Mr. Paulson didn't demand enough.

Noted Economist Greg Mankiw makes a similar point:

I am saddened whenever any private profit-seeking enterprise gets bailed out, whether it is Chrysler, Long-term Capital Management, Bear Stearns, or the GSEs. Such bailouts sow the seeds of the next financial crisis by fostering expectations of future bailouts and encouraging excessive risk-taking. (And before anyone emails me that the GSE equity holders are not exactly getting a good deal here, let me point out that the debt holders are. In a capitalist system, you want those extending both debt and equity finance to bear the consequences of the risks they undertake. If the taxpayer is chipping in, someone is being insulated from risk.)

See the complete WSJ article on the coming changes in GAAP below.

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Closing the Information GAAP
September 8, 2008

What's the definition of an accountant? Someone who solves a problem you didn't know you had in a way you don't understand.

What's an auditor? Someone who arrives after the battle and bayonets the wounded.

And drum roll, please: What are Generally Accepted Accounting Principles? The difference between accounting theory and practice.

No joke, accountants are the Rodney Dangerfields of business. But perhaps they deserve some respect after all. Accountants in the U.S. are signing up for a fundamental rethinking of how they do their jobs. As a result, it should finally be possible for global investing and trade to operate on a common understanding, or accounting, of businesses.

The Securities and Exchange Commission recently announced that the U.S. will abandon Generally Accepted Accounting Principles -- for almost 75 years, the bible for U.S. accountants -- joining more than 100 countries around the world instead in using the London-based International Financial Reporting Standards. Pointing to the "remarkably quickening pace of acceptance of a true lingua franca for accounting," SEC Chairman Chris Cox set out a timetable for all U.S. companies to drop GAAP by 2016, with the largest companies switching as early as next year.

There are specific differences between the two systems; for example, the international system only allows the first-in, first-out inventory accounting system. The most important difference is that the international standard is based on principles, whereas GAAP is based on rules. GAAP suffers from the complexity of trying to set rules for all situations, a complexity that often masks economic reality.

GAAP rules fill a nine-inch, three-volume set of pronouncements plus interpretive information. In contrast, IFRS is a slim two-inch book. GAAP was crafted in part by the pressures of the U.S. legal system. Companies have been glad for GAAP rules as defenses for claims of accounting irregularities. But these rules often only pretend to provide clarity. There are hundreds of pages of GAAP covering how to account for derivatives, but this didn't stop opaque pricing mismatches, which helped create the credit crunch. GAAP rules allowed trillions of dollars in securitized financial assets and liabilities to stay off the books of U.S. financial firms, while the international standard, by focusing on the true underlying economics, kept these on the books for firms based elsewhere.

It's surprising that there is no common language for measuring the performance of companies. Until recently, all major countries had their own accounting rules, but IFRS has become the approach of choice. Inconsistent approaches to accounting make it hard to compare an energy company based in Texas with one based in Amsterdam, a bank in New York with one in London, or a biotech firm in Boston with one in Singapore. A single set of accounting rules would mean more effective global disclosure and transparency. It would reduce costs for multinationals that must now prepare multiple books. It would also make U.S. exchanges more competitive for listings by eliminating accounting differences.

A measure of the importance of a single standard is the dislocation that getting there will cause. It will mean rewriting business school texts and retraining of corporate finance departments. The forensic accountants who sniff out problems will have to develop instincts using a new set of measures. The transition will also be tough on investors. Under the SEC proposal, larger companies in the same industry would switch to the international standard before smaller companies do. Investors for the transition period would have to compare similar companies using different accounting.

The big U.S.-based accounting firms generally support the abandonment of GAAP. Skeptics could call this switch in systems the equivalent of the accountant full-employment act for many years, but the profession itself also recognizes that GAAP often fails to reflect underlying economics.

A PriceWaterhouseCoopers briefing document for executives on the accounting change notes that changes will also be necessary in the law. "If an accounting and reporting framework that relies on professional judgment rather than detailed rules is to flourish in the U.S., the legal and regulatory environment will need to evolve in ways that remain to be seen." These include that "regulators will need to respect well-reasoned professional judgments."

A system based on principles could create new defenses for company boards and accountants who try to do the right thing, if they fully disclose why they thought that a particular accounting treatment made sense. The law will have to adjust to accept more ambiguity in accounting, as a necessary condition for reporting with maximum accuracy.

As technology has shown in other areas of life, agreed-upon standards and accepted operating systems drive usage and efficiency. Common measures add value to information. If even the belt-and-suspenders accounting profession is willing to take on the risks of switching its basic system for assessing businesses, we're truly in an era when anything that adds to understanding belongs in the asset column, while anything that undermines transparency is a liability.
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WSJ Editorial - REVIEW & OUTLOOK

Weekend at Henry's
September 8, 2008; Page A18

In the 1989 movie "Weekend at Bernie's," a pair of young executives create the illusion that their dead boss is still alive to keep a party going. That's not too far from the premise of this weekend's Treasury bailout of Fannie Mae and Freddie Mac, the mortgage giants that have become financial zombies.
[Henry Paulson]

Treasury Secretary Henry Paulson wants to prop up the walking dead so the world keeps buying their mortgage-backed securities. His action may calm jittery credit markets, and it may get the companies through the current mortgage crisis -- albeit at enormous cost to American taxpayers. The tragedy is that he and Congress didn't act 18 months ago -- when the cost would have been far less -- and that he still isn't killing the Fannie and Freddie business model that has done so much damage. These corpses could still return to haunt us again.
* * *

At least Mr. Paulson has finally figured out he's been lied to. He arrived in Washington fresh from the Wall Street turnip truck saying that the battle over the two government-sponsored enterprises (GSEs) was nothing but a scrap between "ideologues." So he bought the Congressional line that Fan and Fred weren't a problem and would help financial markets through the housing recession. Even as he won new power this summer to add taxpayer capital to the companies, he said he had no intention to use that power and that he wanted to sustain them in their "current form." That political theater merely prolonged the market agony, while giving the companies incentive to take even greater risks.

This weekend's formal rescue puts an end to those illusions. Treasury and the new GSE regulator -- the Federal Housing Finance Agency -- both acknowledge that the companies are facing huge mortgage losses that will soon overwhelm their capital cushions. And this time Mr. Paulson has at least demanded something in return for his blank taxpayer check.

The new federal "conservatorship" is a form of nationalization that puts regulators firmly in control. The feds fired the company boards and CEOs, though the clean up needs to go further to change the corporate cultures. Both companies remain Beltway satraps that hire for reasons of political connection, not financial expertise.

The taxpayer purchase of preferred stock means that the feds will own about 80% of the companies if all the warrants are ultimately exercised. The feds also stopped dividend payments, saving about $2 billion a year. This amounts to significant dilution for current Fannie and Freddie shareholders, and it offers taxpayers some return on their bailout risk if the companies recover.

We only wish Mr. Paulson had gone further and erased all private equity holders the way the feds do in a typical bank failure. Fan and Fred holders had profited handsomely for decades by exploiting an implicit taxpayer guarantee that their management claimed didn't exist. Now that the taxpayers are in fact stepping in, the current common and preferred holders deserve to lose everything. Mr. Paulson apparently wanted to dodge that political fight. If Fan and Fred share prices rally this week, we'll know Mr. Paulson didn't demand enough.

The Treasury chief also gave a free pass to the holders of some $18 billion in Fan and Fred subordinated debt. He did so even though these securities were understood not to have the same status as mortgage-backed securities or other Fannie debt, and even though this will set a bad precedent for other bailouts. Watch for Citigroup's subordinated debt to jump in price as investors conclude that the feds would do the same thing if Citi needs a rescue.

By far the biggest risk here, however, is that the companies could still emerge with their business model intact. That model is the perverse mix of private profit and public risk, which gave them an incentive to make irresponsible mortgage bets with a taxpayer guarantee.

Mr. Paulson could have ended that model immediately by putting the companies into "receivership." Both companies could have continued to securitize mortgages, even as their riskiest businesses were wound down. But Treasury says its lawyers at Wachtell Lipton advised that receivership might have triggered default claims and thus caused a run on Fannie and Freddie debt. We hear there's some legal debate on that point. And in any case, had Mr. Paulson acted sooner and given markets time to understand that receivership doesn't mean immediate liquidation, the risk of a run might now be far less.

The Treasury plan does at least put some useful limits on Fan and Fred risk-taking, albeit starting only in 2010. Until the housing market bottoms out, presumably in 2009, the feds want the two companies to keep securitizing and guaranteeing mortgages as they do now. But in January 2010, the companies will have to start reducing their portfolios of MBSs by 10% a year, to a total of $250 billion. That will reduce one giant source of systemic financial risk.

Also in 2010, the companies will have to start paying a fee to the feds in return for their taxpayer guarantee. The fee -- which could be paid in cash, or in preferred stock and thus add to the government's controlling stake -- is designed to level the playing field with private mortgage securitizers.

Treasury says all of this will provide a motive for Congress and the new President to change how Fan and Fred do business, and in the meantime the conservator has also ordered a stop to their political lobbying. It's also nice to see that on this point Mr. Paulson has found religion. In his statement Sunday, he blamed the need for a bailout on "the inherent conflict and flawed business model embedded in the GSE structure." Welcome to our merry band of "ideologues," Mr. Secretary.

The Treasury chief has nonetheless decided to leave the hardest political choices to his successor, who will have to face down the usual phalanx of Fannie apologists: Democratic barons Barney Frank and Chuck Schumer, the homebuilders, various Wall Street sages and left-wing journalists.

Both Barack Obama and John McCain are now saying sensible things about the need to change the companies. But who knows how the political mood will have shifted once the housing slump passes. It's easy to imagine the next Treasury Secretary concluding that he also thinks the fight for permanent reform is too difficult. Then we are back to the same old stand.
* * *

The Fannie-Freddie bailout is one of the great political scandals of our age, all the more because it was so obviously coming for so long. Officials at the Federal Reserve warned about it for years, only to be ignored by both parties on Capitol Hill. The least we can do now is bury these undead monsters for all time.

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A Rare Emotion for the Obama Campaign - Panic

By far, the Obama campaign has been the best run political organization this year. Today, they either made a mistake or panicked. It is a good indicator of how badly the Obama campaign thinks McCain's POW-driven biography is hurting Obama with the independent voters they are both chasing.

Sen Obama claimed during an ABC interview on Sunday that he considered military service, but rejected the idea because we were not at war. Reread that -- in effect, he rejected the idea of military service, because his odds of serving in combat were not high enough. If he had said he considered it because we were not at war, that at least would ring more honest. When you combine it with the fact that this Obama-thought escaped mention in his thirty-something hyper-introspective autobiography and that no other factors in his background suggests that volunteering for war was a plausible alternative to college, 'finding himself,' and recreational drug use, as self-described in his book, that makes the claim literally unbelievable. A rare misstep for the campaign.
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John McCain's Road to Emmaus

I am part of a Catholic Ministry which is based on a story, the Road to Emmaus, found in the Gospel of Luke [24:13-35]. The Emmaus story begins in gloom and despair and ends with hope and purpose. In our ministry, we equate trying to lead a life of faith with being on a 'walk,' on which we may veer off and stumble, but getting back on the road is our goal.

In his convention speech accepting the presidential nomination of his party, John McCain chose that moment to share a humbling experience:

On an October morning, in the Gulf of Tonkin, I prepared for my 23rd mission over North Vietnam. I hadn't any worry I wouldn't come back safe and sound. I thought I was tougher than anyone. I was pretty independent then, too. I liked to bend a few rules, and pick a few fights for the fun of it. But I did it for my own pleasure; my own pride. I didn't think there was a cause more important than me.

Then I found myself falling toward the middle of a small lake in the city of Hanoi, with two broken arms, a broken leg, and an angry crowd waiting to greet me. I was dumped in a dark cell, and left to die. I didn't feel so tough anymore...

A lot of prisoners had it worse than I did. I'd been mistreated before, but not as badly as others. I always liked to strut a little after I'd been roughed up to show the other guys I was tough enough to take it. But after I turned down their offer, they worked me over harder than they ever had before. For a long time. And they broke me.

While John McCain did not invoke his faith specifically in this part of his speech, anyone who has struggled with their actions, with respect to their faith, can relate to that humbling moment of self-realization. To have experienced it in the most extreme of conditions, makes it all the more impressive. To have shared it on his night of glory was a great example of humility. Jay Cost of RealClearPolitics summarizes his reaction to the speech:

Who does this in a nomination speech?

Typically, presidential candidates use their time in combat to reinforce the warrior virtues. Recall, "I'm John Kerry, and I'm reporting for duty!" McCain basically turned that on its head last night. It was not his heroism or leadership in war that shows he's ready to command. Instead, it was the horror of war that made him understand how great our country is, and why it is worth fighting for. He was a cocky jerk prior to his captivity, but the brutality of that experience broke his selfish, independent spirit. It was the idea of America that saved him, and - per the speech - he was reborn her humble, imperfect servant.

Delivered in his blunt style, these passages reinforced the idea of McCain being honest even when it isn't expedient. He's willing to talk straight about anything, including his own frailties.

But this was not confession for its own sake. Last night - McCain did three things: (a) Reminded us that he's a maverick; (b) Told us what the maverick would do if we elect him; (c) Told us why he's a maverick. [So, contrary to some pundits, it was actually a very well-organized speech.] The confession at the end was the "why." He fights for the country, not for a party, because it was in Hanoi that his country saved him. Country first, party second.

See the complete speech below.
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John McCain's Acceptance Speech

St. Paul, Minnesota

Thank you all very much. Tonight, I have a privilege given few Americans -- the privilege of accepting our party's nomination for President of the United States. And I accept it with gratitude, humility and confidence.

In my life, no success has come without a good fight, and this nomination wasn't any different. That's a tribute to the candidates who opposed me and their supporters. They're leaders of great ability, who love our country, and wished to lead it to better days. Their support is an honor I won't forget.

I'm grateful to the President for leading us in those dark days following the worst attack on American soil in our history, and keeping us safe from another attack many thought was inevitable; and to the First Lady, Laura Bush, a model of grace and kindness in public and in private. And I'm grateful to the 41st President and his bride of 63 years, and for their outstanding example of honorable service to our country.

As always, I'm indebted to my wife, Cindy, and my seven children. The pleasures of family life can seem like a brief holiday from the crowded calendar of our nation's business. But I have treasured them all the more, and can't imagine a life without the happiness you give me. Cindy said a lot of nice things about me tonight. But, in truth, she's more my inspiration than I am hers. Her concern for those less blessed than we are -- victims of land mines, children born in poverty and with birth defects -- shows the measure of her humanity. I know she will make a great First Lady.

When I was growing up, my father was often at sea, and the job of raising my brother, sister and me would fall to my mother alone. Roberta McCain gave us her love of life, her deep interest in the world, her strength, and her belief we are all meant to use our opportunities to make ourselves useful to our country. I wouldn't be here tonight but for the strength of her character.

My heartfelt thanks to all of you, who helped me win this nomination, and stood by me when the odds were long. I won't let you down. To Americans who have yet to decide who to vote for, thank you for your consideration and the opportunity to win your trust. I intend to earn it.

Finally, a word to Senator Obama and his supporters. We'll go at it over the next two months. That's the nature of these contests, and there are big differences between us. But you have my respect and admiration. Despite our differences, much more unites us than divides us. We are fellow Americans, an association that means more to me than any other. We're dedicated to the proposition that all people are created equal and endowed by our Creator with inalienable rights. No country ever had a greater cause than that. And I wouldn't be an American worthy of the name if I didn't honor Senator Obama and his supporters for their achievement.

But let there be no doubt, my friends, we're going to win this election. And after we've won, we're going to reach out our hand to any willing patriot, make this government start working for you again, and get this country back on the road to prosperity and peace.

These are tough times for many of you. You're worried about keeping your job or finding a new one, and are struggling to put food on the table and stay in your home. All you ever asked of government is to stand on your side, not in your way. And that's just what I intend to do: stand on your side and fight for your future.

And I've found just the right partner to help me shake up Washington, Governor Sarah Palin of Alaska. She has executive experience and a real record of accomplishment. She's tackled tough problems like energy independence and corruption. She's balanced a budget, cut taxes, and taken on the special interests. She's reached across the aisle and asked Republicans, Democrats and Independents to serve in her administration. She's the mother of five children. She's helped run a small business, worked with her hands and knows what it's like to worry about mortgage payments and health care and the cost of gasoline and groceries.

She knows where she comes from and she knows who she works for. She stands up for what's right, and she doesn't let anyone tell her to sit down. I'm very proud to have introduced our next Vice President to the country. But I can't wait until I introduce her to Washington. And let me offer an advance warning to the old, big spending, do nothing, me first, country second Washington crowd: change is coming.

I'm not in the habit of breaking promises to my country and neither is Governor Palin. And when we tell you we're going to change Washington, and stop leaving our country's problems for some unluckier generation to fix, you can count on it. We've got a record of doing just that, and the strength, experience, judgment and backbone to keep our word to you.

You know, I've been called a maverick; someone who marches to the beat of his own drum. Sometimes it's meant as a compliment and sometimes it's not. What it really means is I understand who I work for. I don't work for a party. I don't work for a special interest. I don't work for myself. I work for you.

I've fought corruption, and it didn't matter if the culprits were Democrats or Republicans. They violated their public trust, and had to be held accountable. I've fought big spenders in both parties, who waste your money on things you neither need nor want, while you struggle to buy groceries, fill your gas tank and make your mortgage payment. I've fought to get million dollar checks out of our elections. I've fought lobbyists who stole from Indian tribes. I fought crooked deals in the Pentagon. I fought tobacco companies and trial lawyers, drug companies and union bosses.

I fought for the right strategy and more troops in Iraq, when it wasn't a popular thing to do. And when the pundits said my campaign was finished, I said I'd rather lose an election than see my country lose a war.

Thanks to the leadership of a brilliant general, David Petreaus, and the brave men and women he has the honor to command, that strategy succeeded and rescued us from a defeat that would have demoralized our military, risked a wider war and threatened the security of all Americans.

I don't mind a good fight. For reasons known only to God, I've had quite a few tough ones in my life. But I learned an important lesson along the way. In the end, it matters less that you can fight. What you fight for is the real test.

I fight for Americans. I fight for you. I fight for Bill and Sue Nebe from Farmington Hills, Michigan, who lost their real estate investments in the bad housing market. Bill got a temporary job after he was out of work for seven months. Sue works three jobs to help pay the bills.

I fight for Jake and Toni Wimmer of Franklin County, Pennsylvania. Jake works on a loading dock; coaches Little League, and raises money for the mentally and physically disabled. Toni is a schoolteacher, working toward her Master's Degree. They have two sons, the youngest, Luke, has been diagnosed with autism. Their lives should matter to the people they elect to office. They matter to me.

I fight for the family of Matthew Stanley of Wolfboro, New Hampshire, who died serving our country in Iraq. I wear his bracelet and think of him every day. I intend to honor their sacrifice by making sure the country their son loved so well and never returned to, remains safe from its enemies.

I fight to restore the pride and principles of our party. We were elected to change Washington, and we let Washington change us. We lost the trust of the American people when some Republicans gave in to the temptations of corruption. We lost their trust when rather than reform government, both parties made it bigger. We lost their trust when instead of freeing ourselves from a dangerous dependence on foreign oil, both parties and Senator Obama passed another corporate welfare bill for oil companies. We lost their trust, when we valued our power over our principles.

We're going to change that. We're going to recover the people's trust by standing up again for the values Americans admire. The party of Lincoln, Roosevelt and Reagan is going to get back to basics.

We believe everyone has something to contribute and deserves the opportunity to reach their God-given potential from the boy whose descendents arrived on the Mayflower to the Latina daughter of migrant workers. We're all God's children and we're all Americans.

We believe in low taxes; spending discipline, and open markets. We believe in rewarding hard work and risk takers and letting people keep the fruits of their labor.

We believe in a strong defense, work, faith, service, a culture of life, personal responsibility, the rule of law, and judges who dispense justice impartially and don't legislate from the bench. We believe in the values of families, neighborhoods and communities.

We believe in a government that unleashes the creativity and initiative of Americans. Government that doesn't make your choices for you, but works to make sure you have more choices to make for yourself.

I will keep taxes low and cut them where I can. My opponent will raise them. I will open new markets to our goods and services. My opponent will close them. I will cut government spending. He will increase it.

My tax cuts will create jobs. His tax increases will eliminate them. My health care plan will make it easier for more Americans to find and keep good health care insurance. His plan will force small businesses to cut jobs, reduce wages, and force families into a government run health care system where a bureaucrat stands between you and your doctor.

Keeping taxes low helps small businesses grow and create new jobs. Cutting the second highest business tax rate in the world will help American companies compete and keep jobs from moving overseas. Doubling the child tax exemption from $3500 to $7000 will improve the lives of millions of American families. Reducing government spending and getting rid of failed programs will let you keep more of your own money to save, spend and invest as you see fit. Opening new markets and preparing workers to compete in the world economy is essential to our future prosperity.

I know some of you have been left behind in the changing economy and it often seems your government hasn't even noticed. Government assistance for unemployed workers was designed for the economy of the 1950s. That's going to change on my watch. My opponent promises to bring back old jobs by wishing away the global economy. We're going to help workers who've lost a job that won't come back, find a new one that won't go away.

We will prepare them for the jobs of today. We will use our community colleges to help train people for new opportunities in their communities. For workers in industries that have been hard hit, we'll help make up part of the difference in wages between their old job and a temporary, lower paid one while they receive retraining that will help them find secure new employment at a decent wage.

Education is the civil rights issue of this century. Equal access to public education has been gained. But what is the value of access to a failing school? We need to shake up failed school bureaucracies with competition, empower parents with choice, remove barriers to qualified instructors, attract and reward good teachers, and help bad teachers find another line of work.

When a public school fails to meet its obligations to students, parents deserve a choice in the education of their children. And I intend to give it to them. Some may choose a better public school. Some may choose a private one. Many will choose a charter school. But they will have that choice and their children will have that opportunity.

Senator Obama wants our schools to answer to unions and entrenched bureaucracies. I want schools to answer to parents and students. And when I'm President, they will.

My fellow Americans, when I'm President, we're going to embark on the most ambitious national project in decades. We are going to stop sending $700 billion a year to countries that don't like us very much. We will attack the problem on every front. We will produce more energy at home. We will drill new wells offshore, and we'll drill them now. We will build more nuclear power plants. We will develop clean coal technology. We will increase the use of wind, tide, solar and natural gas. We will encourage the development and use of flex fuel, hybrid and electric automobiles.

Senator Obama thinks we can achieve energy independence without more drilling and without more nuclear power. But Americans know better than that. We must use all resources and develop all technologies necessary to rescue our economy from the damage caused by rising oil prices and to restore the health of our planet. It's an ambitious plan, but Americans are ambitious by nature, and we have faced greater challenges. It's time for us to show the world again how Americans lead.

This great national cause will create millions of new jobs, many in industries that will be the engine of our future prosperity; jobs that will be there when your children enter the workforce.

Today, the prospect of a better world remains within our reach. But we must see the threats to peace and liberty in our time clearly and face them, as Americans before us did, with confidence, wisdom and resolve.

We have dealt a serious blow to al Qaeda in recent years. But they are not defeated, and they'll strike us again if they can. Iran remains the chief state sponsor of terrorism and on the path to acquiring nuclear weapons. Russia's leaders, rich with oil wealth and corrupt with power, have rejected democratic ideals and the obligations of a responsible power. They invaded a small, democratic neighbor to gain more control over the world's oil supply, intimidate other neighbors, and further their ambitions of reassembling the Russian empire. And the brave people of Georgia need our solidarity and prayers. As President I will work to establish good relations with Russia so we need not fear a return of the Cold War. But we can't turn a blind eye to aggression and international lawlessness that threatens the peace and stability of the world and the security of the American people.

We face many threats in this dangerous world, but I'm not afraid of them. I'm prepared for them. I know how the military works, what it can do, what it can do better, and what it should not do. I know how the world works. I know the good and the evil in it. I know how to work with leaders who share our dreams of a freer, safer and more prosperous world, and how to stand up to those who don't. I know how to secure the peace.

When I was five years old, a car pulled up in front of our house. A Navy officer rolled down the window, and shouted at my father that the Japanese had bombed Pearl Harbor. I rarely saw my father again for four years. My grandfather came home from that same war exhausted from the burdens he had borne, and died the next day. In Vietnam, where I formed the closest friendships of my life, some of those friends never came home with me. I hate war. It is terrible beyond imagination.

I'm running for President to keep the country I love safe, and prevent other families from risking their loved ones in war as my family has. I will draw on all my experience with the world and its leaders, and all the tools at our disposal -- diplomatic, economic, military and the power of our ideals -- to build the foundations for a stable and enduring peace.

In America, we change things that need to be changed. Each generation makes its contribution to our greatness. The work that is ours to do is plainly before us. We don't need to search for it.

We need to change the way government does almost everything: from the way we protect our security to the way we compete in the world economy; from the way we respond to disasters to the way we fuel our transportation network; from the way we train our workers to the way we educate our children. All these functions of government were designed before the rise of the global economy, the information technology revolution and the end of the Cold War. We have to catch up to history, and we have to change the way we do business in Washington.

The constant partisan rancor that stops us from solving these problems isn't a cause, it's a symptom. It's what happens when people go to Washington to work for themselves and not you.

Again and again, I've worked with members of both parties to fix problems that need to be fixed. That's how I will govern as President. I will reach out my hand to anyone to help me get this country moving again. I have that record and the scars to prove it. Senator Obama does not.

Instead of rejecting good ideas because we didn't think of them first, let's use the best ideas from both sides. Instead of fighting over who gets the credit, let's try sharing it. This amazing country can do anything we put our minds to. I will ask Democrats and Independents to serve with me. And my administration will set a new standard for transparency and accountability.

We're going to finally start getting things done for the people who are counting on us, and I won't care who gets the credit.

I've been an imperfect servant of my country for many years. But I have been her servant first, last and always. And I've never lived a day, in good times or bad, that I didn't thank God for the privilege.

Long ago, something unusual happened to me that taught me the most valuable lesson of my life. I was blessed by misfortune. I mean that sincerely. I was blessed because I served in the company of heroes, and I witnessed a thousand acts of courage, compassion and love.

On an October morning, in the Gulf of Tonkin, I prepared for my 23rd mission over North Vietnam. I hadn't any worry I wouldn't come back safe and sound. I thought I was tougher than anyone. I was pretty independent then, too. I liked to bend a few rules, and pick a few fights for the fun of it. But I did it for my own pleasure; my own pride. I didn't think there was a cause more important than me.

Then I found myself falling toward the middle of a small lake in the city of Hanoi, with two broken arms, a broken leg, and an angry crowd waiting to greet me. I was dumped in a dark cell, and left to die. I didn't feel so tough anymore. When they discovered my father was an admiral, they took me to a hospital. They couldn't set my bones properly, so they just slapped a cast on me. When I didn't get better, and was down to about a hundred pounds, they put me in a cell with two other Americans. I couldn't do anything. I couldn't even feed myself. They did it for me. I was beginning to learn the limits of my selfish independence. Those men saved my life.

I was in solitary confinement when my captors offered to release me. I knew why. If I went home, they would use it as propaganda to demoralize my fellow prisoners. Our Code said we could only go home in the order of our capture, and there were men who had been shot down before me. I thought about it, though. I wasn't in great shape, and I missed everything about America. But I turned it down.

A lot of prisoners had it worse than I did. I'd been mistreated before, but not as badly as others. I always liked to strut a little after I'd been roughed up to show the other guys I was tough enough to take it. But after I turned down their offer, they worked me over harder than they ever had before. For a long time. And they broke me.

When they brought me back to my cell, I was hurt and ashamed, and I didn't know how I could face my fellow prisoners. The good man in the cell next door, my friend, Bob Craner, saved me. Through taps on a wall he told me I had fought as hard as I could. No man can always stand alone. And then he told me to get back up and fight again for our country and for the men I had the honor to serve with. Because every day they fought for me.

I fell in love with my country when I was a prisoner in someone else's. I loved it not just for the many comforts of life here. I loved it for its decency; for its faith in the wisdom, justice and goodness of its people. I loved it because it was not just a place, but an idea, a cause worth fighting for. I was never the same again. I wasn't my own man anymore. I was my country's.

I'm not running for president because I think I'm blessed with such personal greatness that history has anointed me to save our country in its hour of need. My country saved me. My country saved me, and I cannot forget it. And I will fight for her for as long as I draw breath, so help me God.

If you find faults with our country, make it a better one. If you're disappointed with the mistakes of government, join its ranks and work to correct them. Enlist in our Armed Forces. Become a teacher. Enter the ministry. Run for public office. Feed a hungry child. Teach an illiterate adult to read. Comfort the afflicted. Defend the rights of the oppressed. Our country will be the better, and you will be the happier. Because nothing brings greater happiness in life than to serve a cause greater than yourself.

I'm going to fight for my cause every day as your President. I'm going to fight to make sure every American has every reason to thank God, as I thank Him: that I'm an American, a proud citizen of the greatest country on earth, and with hard work, strong faith and a little courage, great things are always within our reach. Fight with me. Fight with me.

Fight for what's right for our country.

Fight for the ideals and character of a free people.

Fight for our children's future.

Fight for justice and opportunity for all.

Stand up to defend our country from its enemies.

Stand up for each other; for beautiful, blessed, bountiful America.

Stand up, stand up, stand up and fight. Nothing is inevitable here. We're Americans, and we never give up. We never quit. We never hide from history. We make history.

Thank you, and God Bless you.

John McCain, a U.S. Senator from Arizona, is the Republican presidential nominee.

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Who Do You Want Staring Down Ahmadinejad?

Peggy Noonan contrasts the choices:

A certain normal-versus-sissy template was captured in a deadly email that is making the rounds. It offers two pictures. One is of a young Mrs. Palin in a short skirt, smiling at the camera as she leans against a big ol' motorcycle. The other is of a thin and careful Obama on a bicycle, in a plastic safety helmet, looking like a tony suburban professional trying to lower his carbon footprint. The headline on the email: "This settles it."

There is no denying that Mr. Obama is in a bad place, that he must now be considered the underdog, that he's wearing Loser-Glo. The slide started with the Rick Warren interviews in August, just as America was starting to pay attention. Verdict? McCain: normal. Obama: odd.

Then Mrs. Palin, and the catastrophe of the Democratic and media response to her. Books will be written about this, but because it's so recent, and so known, we're almost not absorbing how huge it was, and is. Here was the central liberal mistake: They used the atom bomb just a few days in. They used it so brutally, and yet so ineptly, in a way so oblivious to the true contours of the field, that the radiation blew back over their own lines. They used it without preliminary diplomatic talks, multilateral meetings or Security Council debate. They just went boom. And it boomeranged.

The atom bomb was personal and sexual perfidy, backwoods knuckle-draggin' ma and pa saying, Tell the neighbors the baby's ours. Then the ritual abuse of the 17-year-old girl. Then the rest of it—bad mother, religious weirdo. (On this latter it must be noted that Mrs. Palin never told a church that the Iraq war was God's will; she asked them to pray that it was God's will. It wasn't the sound of Republican hubris, it was the sound of Christian humility: We can't know the mind of God, we can only pray we are in accord with it.)

All of this was unacceptable to normal Americans. They experienced it as the town gossip spreading rumor and slander before the new neighbor even got to put down her bags. It offended the American sense of fairness. And—it still lives!—gallantry

See the complete column below.

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Miles to Go - September 12, 2008 - Peggy Noonan

Democrats, hit reset. Accept the fact that the race has changed utterly, that you're up against a ticket that has captured the public imagination. Now you must go out and recapture it.

Out of the shirtsleeves, into the suit. Stop prowling the stage with what looks like Phil Donahue's old mic. No more scattered, listless riffs; back to the podium and the prepared—and focused—speech. Campaign as a duo, Obama-Biden, together again. Obama alone looks like he's part of nothing.

You must aim your fire at the top of the ticket, John McCain, and not at this beautiful girl, Sarah Palin, about whom you can do nothing.

You can never kill her now. Forget it. She can hurt herself, but in terms of Democratic attacks she is bulletproof. You made her that—she wasn't that way when she walked in.

Hope that Mr. McCain stops campaigning with her and spins her off into her own orbit, to small towns and medium-sized cities. It will cut his recent power in half. Some press will follow her, but mostly on gaffe patrol. They will want to keep their main lens on Obama and McCain.

This is going to be the only way to contain her power: Ignore it.

* * *

This race is not over. Everyone I know thinks it is, but I don't buy it. Mr. Obama just suffered a catastrophe, his first. Mr. McCain just enjoyed a triumph, maybe not his last. GOP strategists are experiencing premature triumphalism; they're puffing up like blowfish, emitting great bubbles of self-regard. Democrats, be encouraged by this! They make mistakes when they're winning. They always start to think they're the reason.

Democratic strategists have their heads in their hands, knowing they took a bad hit but not understanding exactly how, or why. Republicans, be inspired by this! They can't come up with the right cure if they can't diagnose the illness.

Here's why it's not over: We are a more or less 50/50 nation experiencing 80% wrong-track numbers, alarming economic challenges and two continuing wars. New voters are about to flood to the polls. There are more than 50 days to go. The media environment is volatile. The Obama campaign has some experience in turning inevitable candidacies into evitable ones. Sen. Obama himself is talented, resourceful and compelling.

More important, obviously, the race shouldn't be over. The nation deserves—and requires—a real debate, a real and spirited presenting of fact and argument. It won't get that if the election is over. The candidates must argue this thing out or it means nothing. And the day after the election, for the winner in this tempestuous nation, it better mean something, or he won't be able to govern.

* * *

After the past 10 days, it is not remarkable that Mr. McCain has caught up with Mr. Obama. It is amazing that Mr. Obama is still roughly even with Mr. McCain.

There is no denying that Mr. Obama is in a bad place, that he must now be considered the underdog, that he's wearing Loser-Glo. The slide started with the Rick Warren interviews in August, just as America was starting to pay attention. Verdict? McCain: normal. Obama: odd.

Then Mrs. Palin, and the catastrophe of the Democratic and media response to her. Books will be written about this, but because it's so recent, and so known, we're almost not absorbing how huge it was, and is. Here was the central liberal mistake: They used the atom bomb just a few days in. They used it so brutally, and yet so ineptly, in a way so oblivious to the true contours of the field, that the radiation blew back over their own lines. They used it without preliminary diplomatic talks, multilateral meetings or Security Council debate. They just went boom. And it boomeranged.

The atom bomb was personal and sexual perfidy, backwoods knuckle-draggin' ma and pa saying, Tell the neighbors the baby's ours. Then the ritual abuse of the 17-year-old girl. Then the rest of it—bad mother, religious weirdo. (On this latter it must be noted that Mrs. Palin never told a church that the Iraq war was God's will; she asked them to pray that it was God's will. It wasn't the sound of Republican hubris, it was the sound of Christian humility: We can't know the mind of God, we can only pray we are in accord with it.)

All of this was unacceptable to normal Americans. They experienced it as the town gossip spreading rumor and slander before the new neighbor even got to put down her bags. It offended the American sense of fairness. And—it still lives!—gallantry.

Most crucially, the snobbery of it, the meanness of it, reminded the entire country, for the first time in a decade, what it is they don't like about the left. Really, America had forgotten. Mr. Obama's friends reminded them. Unforgettably.

And it wasn't just excitable bloggers or 24-hour cable news shows desperate to fill the maw. The chairwoman of the South Carolina Democratic Party said this week that Mrs. Palin's "primary qualification [for vice president] seems to be that she hasn't had an abortion."

The Democrats were up against Xena the Warrior Princess and came across, in response, as pale-lipped Puritans who actually, at the end of the day, don't really like women all that much. Mrs. Palin radiates the sense that she'd never give up her femininity in her quest for power because her femininity is part of her power. (On the Democratic side, she can be compared in this to Nancy Pelosi.)

A certain normal-versus-sissy template was captured in a deadly email that is making the rounds. It offers two pictures. One is of a young Mrs. Palin in a short skirt, smiling at the camera as she leans against a big ol' motorcycle. The other is of a thin and careful Obama on a bicycle, in a plastic safety helmet, looking like a tony suburban professional trying to lower his carbon footprint. The headline on the email: "This settles it."

* * *

All of this is being exploited—so far relatively deftly, soon to be heavy-handedly—by the Republican Party, which is sending out emails saying that if you'll click on this little link you'll be able to contribute money to help stop the smears and lies aimed at Mrs. Palin.

Right now only Mrs. Palin can hurt Mrs. Palin. Messrs. Obama and Biden can't do it and shouldn't try. And the media can't, because more than half the country won't listen to them on this subject now, and for a while. The media could get videotape of Mrs. Palin saying, "We should invade Mars and it will be easy because Mars is hidden inside my hair!" and people would say, "Stop sliming Sarah!"

The mainstream media may themselves come down on Mr. Obama. They like him, but if he doesn't come back and make this a race, he'll embarrass them. They just might be on the edge of getting angry, having been left exposed. Forget what Mr. McCain and Mrs. Palin can do to Mr. Obama: If he embarrasses the media, they'll kill him.

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

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