(1) Dear. (2) Leader.

She takes on Paul Krugman and exposes the antiquated nature of his policy recommendations:

Paul Krugman of the New York Times has been on the attack lately in regard to the New Deal. His new book “The Return of Depression Economics,” emphasizes the importance of New Deal-style spending. He has said the trouble with the New Deal was that it didn’t spend enough.

He’s also arguing that some writers and economists have been misrepresenting the 1930s to make the effect of FDR’s overall policy look worse than it was. I’m interested in part because Mr. Krugman has mentioned me by name. He recently said that I am the one “whose misleading statistics have been widely disseminated on the right.”

Mr. Krugman is a new Nobel Laureate, teaches at Princeton University and writes a column for a nationally prominent newspaper. So what he says is believed to be objective by many people, even when it isn’t. But the larger reason we should care about the 1930s employment record is that the cure Roosevelt offered, the New Deal, is on everyone else’s mind as well. In a recent “60 Minutes” interview, President-elect Barack Obama said, “keep in mind that 1932, 1933, the unemployment rate was 25%, inching up to 30%.”

The New Deal is Mr. Obama’s context for the giant infrastructure plan his new team is developing. If he proposes FDR-style recovery programs, then it is useful to establish whether those original programs actually brought recovery. The answer is, they didn’t. New Deal spending provided jobs but did not get the country back to where it was before.

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What does it mean and what are its consequences for the United States and the world? My answer is here and the crux of my point can be found in the following excerpt:

The implications for the United States and for counterterrorism from the attacks in Mumbai can be summed up thusly: We continue to live in a dangerous world, the threat of terrorism is not a hoax and while we should not give in to fear, we should also not forswear vigilance, caution, preemptive measures and preparation. Additionally, we should abandon the fantasy that the election of Barack Obama will somehow cause other nation-states and non-state actors to somehow look at the United States differently and forswear following what they perceive to be their own interests merely because the face of the Presidency has changed.

Does the President-elect know that when it comes to health care policy, he is in basic disagreement over a fundamental issue with his own incoming head of the National Economic Council? I can’t tell what is going on here. Is the vetting poor? Is Barack Obama backing away from his commitment to employer mandates? Or is Larry Summers being asked to swallow his pride and back the Obama position against his better judgment?

If the latter, how much do you want to bet that Team Obama is now desperately trying to make sure that Summers doesn’t find any waiting television cameras, microphones or print journalists waiting for him so that he doesn’t lose that famous temper of his and sound off like the “disgruntled senior Obama official” he will likely ask to be called in the event that a news story is written about the gulf between him and the President-elect on a key health care policy issue?

This is precious:

Samantha Power, the Harvard professor who was forced to resign from Barack Obama’s presidential campaign last spring after calling Sen. Hillary Rodham Clinton “a monster,” is now advising the president-elect on transition matters relating to the State Department — which Clinton is slated to head.

Power is listed on Obama’s transition Web site as part of the team reviewing national security agencies. Her duties, according to the site, will be to “ensure that senior appointees have the information necessary to complete the confirmation process, lead their departments, and begin implementing signature policy initiatives immediately after they are sworn in.”

In short, she is part of a team that is likely to work directly with Clinton, a potentially awkward situation for the two women. Obama is expected to officially announce Clinton as his choice for secretary of state after the Thanksgiving holiday.

My compliments to the President-elect. Earlier indications notwithstanding, he really knows how to get back at his electoral opponents, doesn’t he?

Yousefzadeh’s Law Concerning the Popularity of Republican Presidents: After a Republican President leaves office, the more time passes, the greater the chances that the chattering classes of Washington will gain a Strange New Respect for said former Republican President, while lamenting that the current Republican Party cannot be like the former Republican President. This will be the case notwithstanding the fact that during the Presidency of said Republican President, the chattering classes could not resist trashing him (and eventually, her).

Exhibit A in support of Yousefzadeh’s Law Concerning the Popularity of Republican Presidents: E.J. Dionne, who now finds it possible to celebrate the foreign policy realism of George Bush the Elder, even though while George Bush the Elder was in office, he was trashed and pilloried by the likes of . . . E.J. Dionne.

The mainstream media punditocracy may be inconsistent. But never let it be said that it is not predictable.

Consider the following commentary concerning the incoming Chair of the Council of Economic Advisers, Christina Romer:

She burst into the economic scene with her doctoral dissertation that fundamentally changed how economists viewed the Great Depression.

Economics data indicated that the business cycle before the Great Depression was much more volatile than the economy after World War II. Economists widely assumed the data demonstrated the success of the post-Depression stabilization policies. Romer proved them wrong by showing that what seemed like a decrease in market volatility was really due to improved data collection.

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Mark Halperin says that it got pretty bad and that it benefited Barack Obama tremendously. On balance, I think that Halperin got it right.

The Arena asks what decisions the Administration may undertake before its departure. The subject quickly got to pardons, which law professor Steven Calabresi prompted. My take can be found near the end of the thread (alas, a direct permalink does not work for weird technical reasons that have to do with the Arena’s end of matters).

Mankiw demolishes Krugman. It’s worth remembering that Krugman won his Nobel for work he did before he became a pundit. He deserves the prize, but one of the unfortunate side effects is that the gratuitous nastiness and intellectual shoddiness one finds in his New York Times writings will become even more pronounced because his employers won’t have the courage to tell him that when it comes to his punditry, Krugman is being . . . well . . . a hack.

As told by Tyler Cowen. The point made about ensuring the expansion of monetary policy is highly important, but so is the point that Roosevelt’s agricultural subsidies and imposition of industry cartels were utterly and completely disastrous economically. One certainly hopes that taxes will not be raised and that the Bush tax cuts will still have a lot of life left in them during the Obama Administration–quite frankly, if the President-elect wants to encourage some serious economic stimulus, he would do well to take a page from Milton Friedman, recognize that individuals need to sense a long-term increase in their take-home pay, and pledge to make the tax cuts permanent. I am certainly glad to see that Professor Cowen ends his article by noting that our economic recovery will likely come about “for reasons that have little to do with most policy initiatives.” A good point for Team Obama to remember; it might inculcate some humility on their part concerning the limit of government’s power to do good, even as government will now seek to increase even further its power to meddle.

Reports that al Qaeda is planning to target sites like Penn Station and that there is increased chatter in intelligence circles concerning a terrorist event are certainly enough to cause reasonable people to be worried–especially in light of the gruesome attack in Mumbai. Who knows whether the attack in Mumbai is the culmination of the chatter, or whether it is only the beginning of yet another potentially bloody harvest? The fact that Americans and Britons were apparently the targets of gunmen in the Mumbai attack only serves to augment worries and concerns.

One hopes that the people in charge of the Presidential transition are on top of this. I suspect that they are; by all accounts, the transition is going quite smoothly. It had better–while I certainly hope to be proven wrong about this, there is every indication that terrorists are planning to take advantage of the transition to launch a catastrophic attack somewhere. Those who perhaps caused themselves over the past few years to believe that we were worried and concerned over relatively nothing have received a shocking and appalling reminder that there is indeed something to be concerned about. Yes, we will go on living our lives. No, we won’t give in to fears. But there is a threat, it is real and we had better stop pretending otherwise.

My take.

1.

Of course, I have to believe that if Barack Obama did not actually believe that the surge overseen by Secretary Gates really has been successful, he would not have consented to keep the Secretary on. By agreeing to retain Secretary Gates at the Pentagon, the President-elect has not-too-subtly endorsed the very surge and counterinsurgency efforts he spent time denouncing on the campaign trail.

One wishes that he would finally admit as much. The votes have been cast, they have been counted, the Electoral College will meet and certify the results and Barack Obama will go ahead and become the 44th President of the United States. I think it is finally safe for him to say that when it came to figuring out what to do in Iraq, President Bush, Secretary Gates, General Petraeus and Senator McCain were right . . . and Barack Obama was wrong.

Barring such a verbal admission, I suppose that we will have to take this reappointment of Secretary Gates to constitute the closest thing to an admission of error the President-elect can bring himself to offer the rest of the country. Speaking of admissions, Chris Bowers admits that “keeping Gates on would only worsen Democratic image problems on national security, as he would be the second consecutive non-Democratic Secretary of Defense nominated by a Democratic President. The message would be clear: even Democrats agree that Democrats can’t run the military.” I am happy to take his word for the matter.

My take on how Team Obama is dealing with matters economic is up at the Arena.

Andrew Sullivan is livid. He is livid because there is a possibility–perhaps even a strong one–that John Brennan could become the new Director of Central Intelligence. Sullivan objects to this because he thinks that Brennan bought into “politicized” intelligence in the run-up to the war in Iraq and that Brennan may have been involved in war crimes. And of course, in situations like this one, it is entirely to be expected that Sullivan would lapse into pretentiousness:

The least we know is that Brennan is ambivalent about this. Ambivalence on this matter is unacceptable. We haven’t fought for decency and reform and a return to American values for so long to be turned back now. We didn’t work our butts off to elect Obama only to get Bush another four years at CIA. If Brennan emerges as the pick, those of us against the continuation of war crimes and the prosecution of war criminals will have to oppose him strenuously in the nomination process. We will, in fact, have to go to war with Obama before he even takes office.

And if Obama doubts our seriousness, I have three words for him. Yes we can.

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This is your “shock doctrine.” As is this. Now, if you want to write a book explaining how crises get used by ideologues to impose policy on the rest of us, you have a perfect excuse to do so. What’s more, your hypothetical book will bear a much greater relationship with reality than the one in which you misquoted and libeled Milton Friedman.

See? This works out for everyone!

Now, get cracking and write that book. Think of it as a way to salvage what’s left of your reputation.

Gradually, Hugo Chavez is getting his wings clipped:

Venezuela’s growing opposition and President Hugo Chavez’s left-wing party shared the spoils from weekend elections as they jostled for political momentum in the OPEC nation on Monday.

The multi-party opposition eroded Chavez’s dominance of regional politics, winning six top posts that govern over almost half of the population, although his Socialist Party took a clear majority of state races.

The results make more challenging Chavez’s goal of changing the law to run for reelection in 2012. The opposition defeated that move in a referendum vote last year and gained some extra ground on Sunday.

In power for almost a decade, the popular anti-U.S. president won 17 of 22 states, but the opposition held onto the two states it won at the last regional elections four years ago, picked up three more and won the powerful mayoralty of the capital Caracas.

Opposition candidates were helped by widespread voter complaints the government has done too little to control some of the world’s worst murder rates and Latin America’s highest inflation rate.

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It has been the subject of the weekend over at the Arena. My take is here.

It is regrettable, of course, that in the course of giving his answers, former Labor Secretary Robert Reich saw the need to get gratuitously nasty. As I write, his nastiness was entirely undeserved. Of course, I should note that the former Labor Secretary has a penchant for fiction.

I suppose that the best fig leaf statement that can be made about Team Obama’s promises on lobbyists joining the Administration is that some lobbyists are more equal than others.

Once again: I don’t have a problem with lobbyists. I do, however, have a problem with self-righteous poseurs who denounce the lobbying community even as they work to take advantage of the skill sets of lobbyists.

And one of those poseurs is about to be President.