Batten Down The Hatches!

The U.S. Congress has rejected the Paulson bailout plan 228-205 The Dow has dropped 777 points. Predictions about what happens next are taking on an increasingly dire tone. 'Gloom and doom' doesn't even come close. This is really scary. Will we get bank runs? Martial Law? Blogging is a fine luxury. But we may even have to give it up.

Thanks A Lot, Comrade Dubya!

This is meant to restore confidence?
I'm utterly speechless!
(Thank God, Andrew Sullivan isn't).
But shutup already, Michelle Malkin!
(a.k.a. Palin's political poontang).

Sarah Palin, Regurgitated

A gem on the Paulson bailout plan from Maureen Dowd,

Who would have dreamed that when socialism finally came to the U.S.A. it would be brought not by Bolsheviks in blue jeans but Wall Street bankers in Gucci loafers?

who further skewers the McCain-Palin ticket with this:

McCain was so aggressively erratic as he did his free-form break dance around the economy last week that it seemed the only possible explanation was that he was creating a wild diversion to distract people from Sarah Palin’s stunningly junior varsity appearance with Katie Couric.

Speaking of which, here indeed is Jack Cafferty presenting the now-famous Katie Couric interview of Ms. Palin:



I think it would be fair to say that at no other time in US electoral history has the choice of a presidential running mate been so harmful to the chances of the ticket than this. Judging by his actions, John McCain really is a big time gambler (in more ways than one!) but I doubt that this is one bet he would place again.

In a conversation with McCain campaigner Rick Davis two weeks ago, Hugh Hewitt thought that Sarah Palin is ready for prime time (if only we could get rid of those pesky pro-Obama press people who run Prime time). But even the National Review Online columnists appear to be nonplussed by Ms. Palin's now obvious deficiencies as revealed in several unscripted interviews with "friendlies" like Sean Hannity. For example Mona Charen:

"Palin was atrocious not just with Katie Couric but with friendlies like Sean Hannity. She needs to devise answers for questions about foreign policy that do NOT rely on recent cramming. That will look and sound false. She may make stupid errors. And it plays to her weakness. She should never again refer to her Alaska experience as preparation for the role of commander in chief."

Many of these good folks have taken to coaching her and McCain campaign handlers on how to solve a problem like Sarah Palin (Jonah Goldberg), where again the problem seems to be with the Press and not the candidate for vice-prez...

I basically agree with Mona, though I don't think the Sean appearance was 'atrocious.' That said, I'm with the Free Sarah Palin crowd. That doesn't mean you have to dance to the MSM's tune. But I've been totally flummoxed why they haven't been putting her on conservative talk radio and, more importantly, on local news stations. If the McCain strategists actually believe any of this elitist-vs-populist stuff when it comes to Palin, why not actually have a media strategy that conforms to that story line? The Bush campaign was very good at 'going over the head' of the MSM in 2000 and 2004. The MSM even helped by shrieking their displeasure about it. Why not do the same thing with Palin? This would be a dual track strategy: it would help her get her groove on, and it would force the MSM to whine that this bumpkin from the hustings doesn't show them due deference, which always makes the press look bad.

Yeah Katie, it's all your fault Sarah Palin looks like a dumber and dumber choice every day..

Debate Number One To John McCain (Updated)

"Good job, John!" Barack Obama congratulated John McCain as they crossed the House at the end of the debate at Ole Miss. I think John McCain did much better than he was expected to and conversely Obama did not live up to higher expectations. Consequently, purely as an exercise in debate as political theatre, I would say John McCain won this one, but only just barely. As David Gergen said on CNN, he didn't knock it out of the park, and being behind in the race, he needs more than this to regain the momentum.

UPDATE:
Post debate telephone polling from CNN with plus or minus 4.5% margin of error gives double digit leads to BARACK OBAMA from the television audience on specific questions about the debate, particularly on the Economy and on Foreign Policy.

MAJOR Bad News for McCain: older voters (those close to retirement) and women give the debate overwhelmingly to Barack Obama.

NO DEAL!

It appears as if the Paulson Bailout Plan is DOA. Despite perfervid declaration on all sides that a deal must be done, the New York Times reports that the high level leadership summit "has dissolved into a verbal brawl in a Cabinet Room of the White House." (NYT--Talks Implode)

Well, what really were the chances of this once John McCain had injected Presidential Politics into it yesterday on the pretext of taking charge and exercising "leadership". But as the article reveals it was the House Republican caucus, which right at the outset declared no support for the Paulson bailout plan.

The New Republic on how John McCain crashed the party to save his campaign.

Regarding the bailout itself, the following video featuring Barry Ritholz of the Big Picture explains things in a nice simple way that readers may find helpful...

Bill Clinton Grumps for John McCain?

I was just listening to Bubba talking to Larry King. I dunno about you folks, but I think he is still Mr. Sore Loser with a big fat Sour Grape in his mouth. Now he has to go and do an Al Gore, which won't be easy, come to think of it. I mean, what are the chances, really, that Bill Clinton will someday win the Nobel Peace Prize and invent a meme like "Global Warming". But Bubba sure likes John McCain a whole heck of a lot, if you ask me, just judging by the things he told Larry. And it seems to be reciprocated, as John McCain today announced he would be attending the Clinton Global Initiative. Know what? Bottom line is, Bill Clinton is not completely reconciled with the idea that Barack Obama could go down in history as the first Black President of the USA, not Bill Clinton! Andrew Sullivan thinks Bubba is actually spinning for John McCain. What's next?

John McCain Suspends Campaign, No Debate With Obama? (Bloomberg News)

Sept. 24 (Bloomberg) -- John McCain said made a surprise announcement that he was suspending his presidential campaign and called on Democratic rival Barack Obama to postpone their first debate until Congress hammers out a plan to steady the financial markets.

Obama rebuffed McCain, saying it's ``more important than ever'' for the candidates to tell voters how they would deal with the crisis. He said they can work with Congress while campaigning. ``It is going to be part of the president's job to deal with more than one thing at once,'' Obama said.

Both men said they wanted to reach a bipartisan solution to the credit crisis. McCain said the Bush administration's $700 billion proposal to rescue struggling financial companies and unlock credit markets won't pass Congress in its current form.

``It has become clear that no consensus has developed to support the administration's proposal,'' McCain said in New York.

``We are running out of time.''

As Tonto famously asked the Lone Ranger, "WE, keemosabey?"

Looks like George W. Bush has given John McCain a Ticking Time Bomb. The Dem leadership, faced with GOP lawmakers who've balked at the administration' s own bailout plan, actually called upon the Republican Presidential candidate to lead his party in sharing the burden of The Big Hot Potato.

US News and World Report describes the shock among GOP supporters:

If he goes back to Washington and is seen as a catalyst for a palatable solution to the crisis, it will be a "great way for McCain to stop his bleeding on the economy," the adviser said. "But it can also be seen as a transparent political ploy, when he could just as easily appear at the debate, insist the discussion be all about the economy, and talk this through with Obama." The adviser's prediction: It will play out as a political ploy.

An extraordinary collection of academic economists from the top universities in the United States have signed a letter to the US Congress controverting the fairness of the Paulson bailout proposal, questioning its ambiguity and long-term effects.

To the Speaker of the House of Representatives and the President pro tempore of the Senate:

As economists, we want to express to Congress our great concern for the plan proposed by Treasury Secretary Paulson to deal with the financial crisis. We are well aware of the difficulty of the current financial situation and we agree with the need for bold action to ensure that the financial system continues to function. We see three fatal pitfalls in the currently proposed plan:

1) Its fairness. The plan is a subsidy to investors at taxpayers’ expense. Investors who took risks to earn profits must also bear the losses. Not every business failure carries systemic risk. The government can ensure a well-functioning financial industry, able to make new loans to creditworthy borrowers, without bailing out particular investors and institutions whose choices proved unwise.

2) Its ambiguity. Neither the mission of the new agency nor its oversight are clear. If taxpayers are to buy illiquid and opaque assets from troubled sellers, the terms, occasions, and methods of such purchases must be crystal clear ahead of time and carefully monitored afterwards.

3) Its long-term effects. If the plan is enacted, its effects will be with us for a generation. For all their recent troubles, Americas dynamic and innovative private capital markets have brought the nation unparalleled prosperity. Fundamentally weakening those markets in order to calm short-run disruptions is desperately short-sighted.

For these reasons we ask Congress not to rush, to hold appropriate hearings, and to carefully consider the right course of action, and to wisely determine the future of the financial industry and the U.S. economy for years to come.

Signed

Acemoglu Daron (Massachussets Institute of Technology)
Adler Michael (Columbia University)
Admati Anat R. (Stanford University)
Alvarez Fernando (University of Chicago)
Andersen Torben (Northwestern University)
Beim David (Columbia University)
Berk Jonathan (Stanford University)
Bisin Alberto (New York University)
Boldrin Michele (Washington University)
Buera Francisco J.(UCLA)
Cassar Gavin (University of Pennsylvania)
Chaney Thomas (University of Chicago)
Chauvin Keith W. (University of Kansas)
Chintagunta Pradeep K. (University of Chicago)
Christiano Lawrence J. (Northwestern University)
Cochrane John (University of Chicago)
Coleman John (Duke University)
Constantinides George M. (University of Chicago)
Crain Robert (UC Berkeley)
De Marzo Peter (Stanford University)
Dubé Jean-Pierre H. (University of Chicago)
Edlin Aaron (UC Berkeley)
Ely Jeffrey (Northwestern University)
Faulhaber Gerald (University of Pennsylvania)
Fox Jeremy T. (University of Chicago)
Fuchs William (University of Chicago)
Gao Paul (Notre Dame University)
Garicano Luis (University of Chicago)
Gerakos Joseph J. (University of Chicago)
Gibbs Michael (University of Chicago)
Goettler Ron (University of Chicago)
Goldin Claudia (Harvard University)
Guadalupe Maria (Columbia University)
Hansen Lars (University of Chicago)
Harris Milton (University of Chicago)
Hart Oliver (Harvard University)
Hazlett Thomas W. (George Mason University)
Heaton John (University of Chicago)
Heckman James (University of Chicago - Nobel Laureate)
Henisz, Witold (University of Pennsylvania)
Hertzberg Andrew (Columbia University)
Hite Gailen (Columbia University)
Hitsch Günter J. (University of Chicago)
Hodrick Robert J. (Columbia University)
Hopenhayn Hugo (UCLA)
Hurst Erik (University of Chicago)
Israel Ronen (London Business School)
Jaffee Dwight M. (UC Berkeley)
Jagannathan Ravi (Northwestern University)
Jenter Dirk (Stanford University)
Jones Charles M. (Columbia Business School)
Kaboski Joseph P. (Ohio State University)
Kaplan Ethan (Stockholm University)
Karolyi, Andrew (Ohio State University)
Kashyap Anil (University of Chicago)
Ketkar Suhas L (Vanderbilt University)
Kiesling Lynne (Northwestern University)
Koch Paul (University of Kansas)
Kocherlakota Narayana (University of Minnesota)
Koijen Ralph S.J. (University of Chicago)
Kondo Jiro (Northwestern University)
Korteweg Arthur (Stanford University)
Kortum Samuel (University of Chicago)
Krueger Dirk (University of Pennsylvania)
Lee Lung-fei (Ohio State University)
Leuz Christian (University of Chicago)
Levine David I.(UC Berkeley)
Levine David K.(Washington University)
Linnainmaa Juhani (University of Chicago)
Manski Charles F. (Northwestern University)
Martin Ian (Stanford University)
Mayer Christopher (Columbia University)
McDonald Robert (Northwestern University)
Meadow Scott F. (University of Chicago)
Mian Atif (University of Chicago)
Middlebrook Art (University of Chicago)
Miguel Edward (UC Berkeley)
Miravete Eugenio J. (University of Texas at Austin)
Miron Jeffrey (Harvard University)
Moro Andrea (Vanderbilt University)
Morse Adair (University of Chicago)
Mortimer Julie Holland (Harvard University)
Nevo Aviv (Northwestern University)
Ohanian Lee (UCLA)
Pagliari Joseph (University of Chicago)
Papanikolaou Dimitris (Northwestern University)
Peltzman Sam (University of Chicago)
Perri Fabrizio (University of Minnesota)
Phelan Christopher (University of Minnesota)
Piazzesi Monika (Stanford University)
Piskorski Tomasz (Columbia University)
Reagan Patricia (Ohio State University)
Reich Michael (UC Berkeley)
Reuben Ernesto (Northwestern University)
Roberts Michael (University of Pennsylvania)
Rogers Michele (Northwestern University)
Ruud Paul (Vassar College)
Safford Sean (University of Chicago)
Sandbu Martin E. (University of Pennsylvania)
Sapienza Paola (Northwestern University)
Scharfstein David (Harvard University)
Shang-Jin Wei (Columbia University)
Shimer Robert (University of Chicago)
Siegel Ron (Northwestern University)
Sorensen Morten (Columbia University)
Spiegel Matthew (Yale University)
Stevenson Betsey (University of Pennsylvania)
Stokey Nancy (University of Chicago)
Strahan Philip (Boston College)
Strebulaev Ilya (Stanford University)
Sufi Amir (University of Chicago)
Thompson Tim (Northwestern University)
Tschoegl Adrian E. (University of Pennsylvania)
Uhlig Harald (University of Chicago)
Ulrich, Maxim (Columbia University)
Van Buskirk Andrew (University of Chicago)
Veronesi Pietro (University of Chicago)
Vissing-Jorgensen Annette (Northwestern University)
Weill Pierre-Olivier (UCLA)
Witte Mark (Northwestern University)
Wolfers Justin (University of Pennsylvania)
Zingales Luigi (University of Chicago)

Comrades Hank Paulson and Ben Bernanke

A Full Page Advertisement by Bill Perkins in the NYT has this graphic:

Henry "Hank" Paulson, once the head of Goldman Sachs, is now Secretary of the U.S. Treasury. He is asking the US Congress for a 700 billion dollar bailout package in which "Wall Street gets Top Dollar for its dead beat loans". Resistance in Congress is building as Democratic and Republican populisms find rare common ground in what is increasingly being seen as a Fast One by one, George W. Bush, and his Fat Cat cronies.

In a way, it all boils down to whether we ought to believe Hank Paulson's claim that the alternative to his plan would be far worse. But the plan looks likely to demolish the dollar and ignite a fulminant Global Inflation. So before We, the People sign that Blank Check made to the order of Comrade Hank, we better ask some questions and get some answers.

Barry Ritholz of the Big Picture has 14 Questions for Paulson about the Mother of all Bailouts:

1. You two gentlemen have been wrong about the Housing crisis, missed the leverage problem, and understated the derivative issue. Recall the overuse of the word "Contained." Indeed, you two have been wrong about nearly everything financially related since this crisis began years ago.

Question: Why should we trust your judgment on the largest bailout in American history?

2. How are you pricing the purchase of these damaged assets? Is the taxpayer paying 22 cents on the dollar? 5.5 cents? If there is no market price for this junk paper, how are you going to determine a purchase price?

3. Are you now, or have you ever been a short seller? Do you think short selling ban is a smart move? What does this mean to our concept of free trading markets?

4. In the nationalization of AIG, the US taxpayer received 80% of the company. What is the taxpayer getting for their money in this $700B bailout?

5. You have said that "The Housing correction is the root cause of market stability." What about leverage -- how significant was that as a root cause?

6. Your initial estimates for the cost of this were $700 billion dollars. Yet you also asked for a blank check, an unlimited ability to spend more "as needed." What is your worst case scenario for the total costs of this bailout?

7. The original version of this bailout package requested no judicial, administrative, or budgetary review of the spending of this bailout, What was the thought process behind that extraordinary, extra-constitutional request?

8. In 2004, your former firm, Goldman Sachs, along with 4 other brokers, received a waiver of the net capitalization rules, allowing these firms to dramatically exceed the 12-to-1 leverage rules. How much was this waiver responsible for the current situation?

9. Its just cost the taxpayer $50 billion to bail out money market funds, which are clearly non-insured, risk instruments. Why did we do that?

10. The Securities and Exchange Commission has been AWOL during much of the problems we now face. What do you think is the proper role for the SEC in terms of supervising or regulating securities markets? Doesn't your plan usurp SEC authority and move it to the Treasury?

11. How significant are derivatives and credit default swaps to the current crisis? Why weren't they regulated the way other insurance products are?

12. The current proposal has the US bailing out foreign banks. Has the USA become the insurer of the worlds financial assets?

13. What other financial firms and funds are likely to need a bailout in the near future? Are there other banks, brokers, insures that are at risk?

14. If we make this inordinate grant of unlimited cash, how can we rein in the budget in the future? How can we as a Congress say no to expensive budget items such as Nationalized Health Care, or Infrastructure repair programs or fill in the blank on the grounds they are "too expensive?"

And a bonus question:

Bonus comedy question: Are you now, or have you ever been, a Socialist? Do you know, or associate, with other Socialists?

Taking the Socialist Road - Take 2

A terse Press Release announcing an $85 billion "loan" to American Insurance Group (AIG) from the Board of Governors of the U.S. Federal Reserve on September 16, 2008, marks an historic date in American economic history. In Hank Paulson, Socialist we get this from Slate,

"There is a term in political philosophy to describe a government takeover of a critical industry: That term is socialism. The government is telling us that capital and credit markets cannot, for several reasons, solve the current crisis on their own—only the federal government and its massive taxpayer base have the authority and the resources to solve it. That is state socialism: the philosophy preached by the founders of the Second International, by the radical wing of the American labor movement, through the formation of the Soviet Union and its satellites, and now by Henry Paulson.

Floyd Norris (NYT Chief Financial Correspondent) calls it Socialism, 21st Century Style and wonders out loud, "Can you imagine what conservatives would say if a liberal Democrat had moved to nationalize major financial companies?"

Well there is no need to imagine what the "conservatives" are saying about the Mother of All Bailouts...

Michelle Malkin is stuck in the Sarah Palin groove, and may thus be dethroned as Queen of the Pitbulls on the Right Wing anyway.

The Powerline Bloggers have a longish definition of socialism but just can't spit it out.

The Instapundit points to Fabius Maximus, who is able to spit it out:

Paulson Leads Us Across the Rubicon : The government’s solutions to our financial crisis is creeping nationalization, as becomes more obvious wth every new step. This is history in the making, a major change in America.’s economic system — biggest since the New Deal — taking place with little public debate or consideration of the long-term effects.

Welcome to our new socialist paradise! Fabius gleefully puts it too. But the interview of Bill Moyers with Morgenson and Norris of the New York Times is a real keeper.

Am still getting over the supernal irony of all this amidst growing discomfiture worldwide. Well at least China is firmly on the Capitalist Road...or is it?

Pakistan Burns--(Wall Street too)

In the light of this terrible news from Islamabad (CNN) a number of links seem to be worth sharing (via Slate).

First, the role of the Pakistani intelligence service in bringing together Osama bin Laden and the Afghan Taliban, from Ken Silverstein.

Christopher Hitchens: Pakistan is the Problem and Only Barack Obama Seems to be the Only Candidate Willing to Face It

Fred Kaplan: The Long Road to Fixing Afghanistan Winds Through Pakistan

UPDATE:
Many reports from the Pakistani Blogosphere are to be found at Bloggers Pakistan

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On the US Financial Crisis:

Dr. Robert Reich (University of California at Berkeley and Labor Secretary of President Clinton) thinks that the Bailout of All Bailouts is a Bad Idea and presents what he says is a better alternative:

But there's no reason taxpayers need to be involved in this.

Whether you call it a reorganization under bankruptcy or just a hellova fire sale, the process should resemble chapter 11 under bankruptcy. Any big financial institution that wants to clear its books can opt in. But the price for opting in is this: Investors in these institutions lose the value of their equity. Executives lose the value of their options, and their pay (and the pay of their directors) is sharply limited. All the money from the fire sale goes to making creditors as whole as possible.

Hmmm, can this really work? Dr. Reich concludes with, "I repeat: This isn't a crisis of solvency or liquidity; it's a crisis of trust."

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On Bloomberg TV, Princeton professor and NYT pundit Paul Krugman says we are witnessing the socialization of the US financial system, "Comrade Paulson has seized the commanding heights in the name of the masses."

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WHY AIG was too big to fail, from Barry Ritholz of Fusion IQ. Also from The Big Picture is this enumeration of the high points in the New, New Deal

- Bear Stearns
- Economic Stimulus progam
- Housing Bailout Program
- Fannie & Freddie
- AIG
- No Short selling rules
- Fed liquidity programs (Term Lending facility, Term Auction facility)
- Money Market fund insurance program
- Special Loans for GM & Ford
- New RTC type program

From commenter Wally over at The Big Picture:

If Paulson was a real man, he'd nationalize the winners, not the losers. Why not take over the big oil comapnies? That's where the money is. To hell with the dopes who can't win at capitalism like the broker-dealers and mortgage banks. All they'll bring us is losses. The only fair thing for America is to take over the money-makers to pay for the mistakes of the losers. Take over Berkshire to pay for AIG. Paulson is not half the man Hugo Chavez is... you don't see Hugo doing dumb stuff like Hank does.

After this past week's near-death experience for Wall Street, where the heck is Econblogger when we really need him to explain all this??

Taking the Socialist Road

I just listened to Henry Paulson, US Secretary of the Treasury, announcing what maybe the largest bailout in history of the most irresponsible, greedy and predatory companies on Wall Street. There is the most supernal irony in the fact that within the span of a single week, the Bush administration has accomplished what they have claimed the Democratic Party has been trying to do for decades--the transformation of US free enterprise capitalism into something that looks more like the Union of Soviet Socialist Republics of yesteryear. As Jeffrey Sachs opines, the bailout of AIC amounts to a nationalization of the world's largest insurance company. But if the Dems want to tax and spend, here we have spend and tax.

Perhaps the most insightful explanation of what happened may be found in this piece from The Big Picture: How SEC Regulatory Exemptions Helped Lead to Collapse which quotes an article by Lee A. Pickard, former SEC Director for Trading and Marketing Division

"The Securities and Exchange Commission can blame itself for the current crisis. That is the allegation being made by a former SEC official, Lee Pickard, who says a rule change in 2004 led to the failure of Lehman Brothers, Bear Stearns, and Merrill Lynch.

The SEC allowed five firms — the three that have collapsed plus Goldman Sachs and Morgan Stanley — to more than double the leverage they were allowed to keep on their balance sheets and remove discounts that had been applied to the assets they had been required to keep to protect them from defaults.

Making matters worse, according to Mr. Pickard, who helped write the original rule in 1975 as director of the SEC's trading and markets division, is a move by the SEC this month to further erode the restraints on surviving broker-dealers by withdrawing requirements that they maintain a certain level of rating from the ratings agencies.

"They constructed a mechanism that simply didn't work," Mr. Pickard said. "The proof is in the pudding — three of the five broker-dealers have blown up."

The so-called net capital rule was created in 1975 to allow the SEC to oversee broker-dealers, or companies that trade securities for customers as well as their own accounts. It requires that firms value all of their tradable assets at market prices, and then it applies a haircut, or a discount, to account for the assets' market risk. So equities, for example, have a haircut of 15%, while a 30-year Treasury bill, because it is less risky, has a 6% haircut.

The net capital rule also requires that broker dealers limit their debt-to-net capital ratio to 12-to-1, although they must issue an early warning if they begin approaching this limit, and are forced to stop trading if they exceed it, so broker dealers often keep their debt-to-net capital ratios much lower.

Having taken the socialist road, now we are in uncharted territory. No one knows what we will find here. Thanks to Bush, we are all socialists now.

A Conservative for Obama

WICK ALLISON is no bleeding heart liberal. He once organized the Dallas Youth for Goldwater. Originally recruited by the legendary William F. Buckley, he became Publisher of the National Review and is currently editor in chief of the Dallas Magazine. He puts out a very thoughtful piece today, in which he makes both the case against John McCain and for Barack Obama -- both based NOT on the ideological and culture wars conducted for the benefit of the Religious Right, but on the matter of their personal CHARACTER:

THE MORE I LISTEN TO AND READ ABOUT “the most liberal member of the U.S. Senate,” the more I like him. Barack Obama strikes a chord with me like no political figure since Ronald Reagan. To explain why, I need to explain why I am a conservative and what it means to me.

In 1964, at the age of 16, I organized the Dallas County Youth for Goldwater. My senior thesis at the University of Texas was on the conservative intellectual revival in America. Twenty years later, I was invited by William F. Buckley Jr. to join the board of National Review. I later became its publisher.

Conservatism to me is less a political philosophy than a stance, a recognition of the fallibility of man and of man’s institutions. Conservatives respect the past not for its antiquity but because it represents, as G.K. Chesterton said, the democracy of the dead; it gives the benefit of the doubt to customs and laws tried and tested in the crucible of time. Conservatives are skeptical of abstract theories and utopian schemes, doubtful that government is wiser than its citizens, and always ready to test any political program against actual results.

Liberalism always seemed to me to be a system of “oughts.” We ought to do this or that because it’s the right thing to do, regardless of whether it works or not. It is a doctrine based on intentions, not results, on feeling good rather than doing good.

But today it is so-called conservatives who are cemented to political programs when they clearly don’t work. The Bush tax cuts—a solution for which there was no real problem and which he refused to end even when the nation went to war—led to huge deficit spending and a $3 trillion growth in the federal debt. Facing this, John McCain pumps his “conservative” credentials by proposing even bigger tax cuts. Meanwhile, a movement that once fought for limited government has presided over the greatest growth of government in our history. That is not conservatism; it is profligacy using conservatism as a mask.

Today it is conservatives, not liberals, who talk with alarming bellicosity about making the world “safe for democracy.” It is John McCain who says America’s job is to “defeat evil,” a theological expansion of the nation’s mission that would make George Washington cough out his wooden teeth.

This kind of conservatism, which is not conservative at all, has produced financial mismanagement, the waste of human lives, the loss of moral authority, and the wreckage of our economy that McCain now threatens to make worse.

Barack Obama is not my ideal candidate for president. (In fact, I made the maximum donation to John McCain during the primaries, when there was still hope he might come to his senses.) But I now see that Obama is almost the ideal candidate for this moment in American history. I disagree with him on many issues. But those don’t matter as much as what Obama offers, which is a deeply conservative view of the world. Nobody can read Obama’s books (which, it is worth noting, he wrote himself) or listen to him speak without realizing that this is a thoughtful, pragmatic, and prudent man. It gives me comfort just to think that after eight years of George W. Bush we will have a president who has actually read the Federalist Papers.

Most important, Obama will be a realist. I doubt he will taunt Russia, as McCain has, at the very moment when our national interest requires it as an ally. The crucial distinction in my mind is that, unlike John McCain, I am convinced he will not impulsively take us into another war unless American national interests are directly threatened.

“Every great cause,” Eric Hoffer wrote, “begins as a movement, becomes a business, and eventually degenerates into a racket.” As a cause, conservatism may be dead. But as a stance, as a way of making judgments in a complex and difficult world, I believe it is very much alive in the instincts and predispositions of a liberal named Barack Obama.

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IMMORAL HAZARD AND MYTH OF DECOUPLING

From Orin Kerr of the Volokh Conspiracy:

Acting to avert a possible financial crisis worldwide, the U.S. Federal Reserve Board reversed course Tuesday and agreed to an $85 billion bailout that would give the U.S. government an ownership stake in the troubled insurance giant American International Group.

The decision, announced by the Fed only two weeks after the Treasury Department took over the quasi-government mortgage finance companies Fannie Mae and Freddie Mac, is the most radical intervention in private business in the central bank's history.

Now, Barack Obama has gotten a lot of flak for his "socialist" ideas (some of them deserved, I think.) But now that the United States Government will own the biggest insurance company (AIG), the biggest mortgage makers (Fannie Mae and Freddie Mac) -- and might be forced to "buy" more businesses to save them because they "are too big to fail"-- one wonders whether socialist ideas speak louder than socialist actions. The word "socialist" is of course purely pejorative here but here is a more sober analysis on the legality of the AIG bailout:

The AIG Deal.

True, the Fed statute says that loans can be issued with conditions. As a commenter asks, what loan doesn’t have conditions? See here also. But the Fed statute does not say that the Fed can purchase businesses, and it seems reasonable to interpret the statute to forbid the Fed to purchase businesses. So here’s the question, is the AIG deal a purchase or a loan? I suspect the deal is a loan in form but a purchase in substance. Unfortunately, the details are not available, but the press accounts suggest that the Fed is receiving AIG equity (more precisely, the option to obtain equity) as collateral for the loan but that it’s going to exercise the option more or less automatically. Here’s an analogy. Suppose that I lend you $100 and we agree that all of the equity in your business will be collateral for the loan. The contract provides, however, that you must pay me interest of a gazillion dollars, due one second after closing, and that if you fail, that counts as a default, whereupon the collateral is mine. The parties use the loan form but substantively a sale occurs. A court would almost certainly interpret the transaction as a sale, not a loan, if tax or other legal consequences turned on the distinction. If the AIG loan is like this, then it’s illegal. So: why aren’t our rule-of-law friends yowling?

There's probably an awful lotta folks out there whose ability to keep their jobs and homes wondering at the elementary fairness of this whole deal. And what of the "moral hazard" that has been created? After all, there are 29 other Dow Jones components, and lots of banks in trouble.

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Barack Obama for President

Now that both Party conventions are over, I have just made up my mind to support the Democratic Party's candidate for President, Barack Obama. It has not been easy to come to this decision but after looking at what has happened to the US and global economy, and in particular the unfolding Nightmare on Wall Street, I do not believe that John McCain has the intellectual fortitude or the right emotional temperament for the job that will have to be done to recover from Bush's disastrous economic policies. He has served America honorably and I salute John McCain. But, in my opinion, this is way beyond his depth. Finally his choice of a Creationist like Sarah Palin, while winning him enough brownie points to actually take the lead in several prominent national polls, only suggest to me that he doesn't fully understand what we are now all up against. I've had it with the Religious Right and their anti-Science agenda. America is better, far, far better than they represent it to be. I've decided, like Christopher Hitchens and Richard Dawkins, that I'm personally and deeply OFFENDED by all that creationist claptrap and that no supporter of it deserves my respect, or my vote.

Albeit reluctantly, I choose to support the better man for a better America: BARACK OBAMA whose statement on the still evolving news of Lehman Brothers' bankruptcy, the sale of Merrill Lynch, and troubles at AIG (the USA's biggest insurer) follows:

"The challenges facing our financial system today are more evidence that too many folks in Washington and on Wall Street weren't minding the store. Eight years of policies that have shredded consumer protections, loosened oversight and regulation, and encouraged outsized bonuses to CEOs while ignoring middle-class Americans have brought us to the most serious financial crisis since the Great Depression."

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UPDATE:From ScienceBlogs a great new group blog that addresses the US Presidential Elections from the point of view of the key scientific issues of the day. A Vote for Science.
Bookmark it y'all!

Support Filipino Voices!

Philippine-American Commentary joins and supports Filipino Voices.

My recent commentaries there are Tabon Man and The Great River.

There's a lot of great writing and blogging over there. Congratulations to Nick and the rest of the voices. Please pay us a visit!

You can also vote for the blog at the Philippine Blog Awards site.
New on my blogroll is Adel Tamano and other opposition politicians who blog at The Opposite of Apathy

In the Time of Grace has thoughtful post on freedom.

Saturday Night Live Lampoons Palin, Hillary

They're in the homestretch of a suddenly very interesting US Presidential race. Here's a nice warm-up act (from Saturday Night Live) before the upcoming Presidential debates between Barack Obama and John McCain. I have a feeling those will be the decisive.

How a US Congress Funding Earmark Led to War in Mindanao

Former Philippine Ambassador to Washington, Alberto del Rosario, reveals how the Philippine Government secured a US Congress funding earmark --tacked on to the 2003 Iraq War funding bill--to fund the GRP-MILF Peace Process to the tune of 60 million dollars. Working with Texas Rep. Tiahrt, and Senators Ted Stevens and Daniel Inouye, and the US State Department, he recalls,

Rather than be stymied, we recited many Hail Mary’s, and proceeded to revisit Rice’s office to seek endorsement of our initiative that was consistent with our strategy in Mindanao as previously presented.

A few days later, the supplemental bill to fund the invasion in Iraq was passed. With the backing of the National Security Council, the bill carried a singular earmark for $30 million in foreign assistance for the GRP-MILF peace process. (The following year, this was followed with an additional funding for the same purpose.)

As a result of this foreign assistance, USAID and the US Institute for Peace were tasked to support the programs. Over time, because the GRP-MILF peace process remained elusive, a considerable amount of the approved funds were channeled to complete the development assistance programs for the Moro National Liberation Front.

What I think the Filipinos did not count on was that the US Congress would insist on using the UNITED STATES INSTITUTE OF PEACE as its surrogate in the GRP MILF Peace talks. By early in 2005, the USIP apparently had its own, already fully formed idea about how to fix the Mindanao Problem. Here is Senior Consultant Astrid Tuminez:

Amazingly USIP's ideas find their fullest expression in the hare-brained illegalities and dangerous unconstitutionalism of that ill-fated MOA on Ancestral Domain that is presently subject of a major Supreme Court case that the Chief Justice has deemed the most significant under his watch.

With 20/20 hindsight we can say USIP's Philippine Facilitation Project was a complete disaster! Instead of peace, it has led to a still escalating war.

From the United States Institute of Peace on their Philippine Facilitation Project:

USIP's Philippine Facilitation Project, created to help end a decades-long conflict between the government of the Philippines and the Moro Islamic Liberation Front (MILF), a Muslim insurgent group operating in the southern island of Mindanao, ended on June 30, 2007. Acting on a mid-2003 request from the U.S. State Department, USIP worked with Philippine officials, MILF leaders and civil society to further efforts to create an “equitable and durable peace agreement” to foster reconciliation and stability in the Philippines and surrounding areas of Southeast Asia. The Philippine Facilitation Project was a part of the Center for Mediation and Conflict Resolution and was directed by Eugene Martin.

After all has been said and done, the spectacular failure of this entire "peace facilitation project" of the USIP is being writ large in the blood and suffering of the dead and displaced Muslims, Christians and lumads in today's Mindanao, numbering now in the hundreds of thousands and not abating but worsening. Indeed, the fingerprints of the USIP's architects and facilitators of "peace" are to be seen all over the recent events, including especially the manner, method and content of that ill-fated Memorandum of Agreement on Ancestral Domain between the GRP and the MILF. The legal and judicial troubles encountered by a patently unconstitutional, unjust and unfair agreement and the subsequent revelation that delivering the deal was beyond the powers and wishful thinking of the Arroyo administration have logically obliged the MILF to unleash their dogs of war, whose arms and ammo are gladly if surreptitiously supplied by the USIP's Malaysian counterpart promoters of peace.

Why did this happen? Why has an economically and socially debilitating conflict suddenly exploded like a malevolent djinn from what was billed as a successful peace process based on the templates and recommendations of the US Congress' surrogate here in the peace process?

In doing a post-mortem on the MOA-AD, one finds that the key missteps and the most ineffective elements of the "peacemaking technology" may have come from the USIP. It appears now that the radical ambitiousness of the project--to achieve "restorative justice" on an ancient and complex history --made it inevitable that violent conflict would be the price of its almost certain failure.

The GAO really ought find out how US$60 million was spent by USIP. Where, for example, did the MILF get all those shiny new uniforms and deadly looking firearms, machine guns and grenade launchers. Why does Eid Kabalu and Gazali Jafar seem to have unlimited access to Mass Media that normally charges such a high price of admission?

Relief is Premature

The Large Hadron Collider has fired its first batch of near-light-speed protons all the way around its 17 mile circumference at CERN (the European Nuclear Research Center in Geneva, Switzerland).


Technically speaking however, relief that the world didn't end by being swallowed into a black hole, is premature. That can't happen until a second, counter-rotating beam of protons is launched and collisions between them would recreate conditions near the beginning of the universe in highly informative "Little Bangs."

In full below is the description of today's activity from Lawrence Berkeley Lab (via email to subscribers): First Beam for Large Hadron Collider

Washington, D.C. – An international collaboration of scientists today sent the first beam of protons zooming at nearly the speed of light around the world’s most powerful particle accelerator—the Large Hadron Collider (LHC)—located at the CERN laboratory near Geneva, Switzerland. The U.S. Department of Energy (DOE) and the National Science Foundation (NSF) invested a total $531 million in the construction of the accelerator and its detectors, which scientists believe could help unlock extraordinary discoveries about the nature of the physical universe.

Celebrations across the U.S. and around the world mark the LHC’s first circulating beam, an occasion more than 15 years in the making. An estimated 10,000 people from 60 countries have helped design and build the accelerator and its massive particle detectors, including more than 1,700 scientists, engineers, students and technicians from 94 U.S. universities and laboratories supported by DOE’s Office of Science and NSF.

“As the largest and most powerful particle accelerator on Earth, the LHC represents a monumental technical achievement,” said U.S. Department of Energy Undersecretary for Science Raymond L. Orbach. “I congratulate the world's scientists and engineers who have made contributions to the construction of the accelerator for reaching this milestone. We now eagerly await the results that will emerge from operation of this extraordinary machine.”

The first circulating beam is a major accomplishment on the way to the ultimate goal: high-energy beams colliding in the centers of the LHC’s particle detectors. Beyond revealing a new world of unknown particles, the LHC experiments could explain why those particles exist and behave as they do. They could reveal the origins of mass, shed light on dark matter, uncover hidden symmetries of the universe and possibly find extra dimensions of space.

NSF has focused its support on funding university scientists who have contributed to the design and construction of the two largest detectors, CMS and ATLAS, and promoted the development of advanced computing innovations, essential to address the challenges posed by the enormity and richness of data to be accumulated. Continued support will enable scientists to optimize detector performance, successful data accumulation and sophisticated analysis, necessary for discovery.

“This national and international collaboration of unprecedented scope, and our investment in basic science, fundamental to the NSF mission, provide an exciting opportunity to solve some of the core mysteries of the universe,” said Arden L. Bement, Jr., director of the NSF. “With the operation of the LHC, anticipation of transformative scientific discoveries soars to new heights.”

DOE provided support for the design and construction of the ATLAS and CMS detectors through two DOE national laboratories—Brookhaven National Laboratory in New York and Fermi National Accelerator Laboratory (Fermilab) in Illinois. While the construction was managed through Fermilab and Brookhaven, scientists and engineers at universities and other DOE national laboratories—Argonne National Laboratory in Illinois and Lawrence Berkeley National Laboratory (Berkeley Lab) in California—played key roles in the design and construction and are finalizing preparations to collect and analyze the data at the energy frontier. In addition, DOE supported about 150 scientists, engineers and technicians from three DOE national laboratories—Brookhaven, Fermilab and Berkeley Lab—that built critical components for the LHC accelerator. They are joined by colleagues from DOE’s Stanford Linear Accelerator Center and Texas A&M University in ongoing accelerator R&D.

“The LHC is a discovery machine,” said CERN Director General Robert Aymar, “its research programme has the potential to change our view of the Universe profoundly, continuing a tradition of human curiosity that’s as old as mankind itself.”

Supreme Court Rules on the Tip of the Iceberg

The Meralco GSIS bribery scandal involving five Court of Appeals Justices has been resolved by the Supreme Court after receiving the findings of a special investigating commission. Voting in each instance unanimously, or in large majorities, the High Court ruled to dismiss Justice Vicente Roxas from the judicial service. Jose L. Sabio, the justice who "blew the whistle" was nonetheless found guilty of simple misconduct and suspended without pay for two months. But their Chief, Ronaldo L.Vasquez and associates Myrna Vidal and Bienvenido Reyes got slaps on the wrist.

What I'd like to see is the rest of the Crooked Timber.

John Silva On The Explainer: Pornography & Obscenity

via Email from John Silva:

Tonight at 6:00 pm, I will be substituting for Manolo Quezon on his ANC tv show Explainer. I will talk about the proposed Anti-Obscenity and Pornography Bill being deliberated in the Senate and has already passed in Congress. If voted and approved, we will see the banning of so many works of art that will be considered pornographic and there will be many jailed. The bill has serious implications with the rest of the other sectors, from publishing to advertising.

Please watch, and if you agree with me that this bill should be junked, please make your concerns be known.

Many thanks,

John Silva

ANC is ABSCBN News' All News Channel. John Silva works with the National Museum in Manila and is one of its strongest advocates.

By the way, ABSCBN News

has done a makeover of its website. It's bit stodgy this morning and the site looks a lot like the Philippine Star (links are disappearing already!). But I expect they'll recover and get back to more or less the same level of utility as before the makeover (let's keep our fingers crossed!)

MOA-AD: Moot and Academic?

Will the Supreme Court rule fully on the MOA-AD controversy? Or say it is all MOOT and ACADEMIC?

Former Supreme Court Chief Justice Art Panganiban says the Supreme Court should rule fully on the MOA-AD controversy even if the President has said the GRP would not sign it in any form and has even disbanded the Peace Panel that was ready to sign it on August 5, 2008 in Putrajaya, Malaysia. He cites the exceptions to the rule of "moot and academic" that the Court itself used when it struck down major portions of PP 1017 in 2006:

ART PANGANIBAN: “...first, when there is a grave violation of the Constitution; second, the exceptional character of the situation and the paramount public interest is involved; third, when the constitutional issue raised requires (the) formulation of controlling principles to guide the bench, the bar and the public; and fourth, the case is capable of repetition yet evading review.”

Another Supreme Court Justice turned pundit, Isagani A. Cruz (of anti-IPRA fame) chimes in with

ISAGANI A. CRUZ: "...the possibility of the Philippines being sued for disregard of the MOA is an ignorant fear. A state may be sued only with its consent before the International Court of Justice under the “optional jurisdiction” clause in Art. 36 of its Statute. A municipal court in the Philippines has more compulsory jurisdiction under our own laws than the highest tribunal in the world with its diplomatic inhibitions.

Someone who I believe will become a Justice of the Supreme Court someday is also a writer of weekly commentaries. Raul Pangalangan wags his finger at War Mongering Civilians but comes up with a gem of a distinction between "autonomy" and the BJE (Bangsamoro Juridical Entity):

To give foreign affairs and finance powers to the new “juridical entity” goes way beyond the settled meaning of “autonomy” and sounds too much like sovereignty, and gives it to a group which, by its recent actuations, seems unworthy of such immense trust.

Prof. Pangalangan (he was formerly Dean of the UP Law School) comes up with non-Constitutional legal constraints on the BJE deal:

One, the rule of non-use of force against the territorial integrity of states under the famous Article 2.4 of the UN Charter.

Two, the principle of “uti possidetis” [as you possess], which preserves the territorial boundaries inherited from the colonizers.

Three, the rule of non-intervention in our “reserve domain” under Article 2.7 of the UN Charter, under which the southern rebellion remains presumptively an internal matter for the Philippines.

These three doctrines explain why, so far, only the former KGB officer Vladimir Putin of Russia and the Sandinista Daniel Ortega of Nicaragua have recognized the Georgia breakaways. It’s because the rest of the world holds sacrosanct the principle of territorial integrity.

One may ask what would happen if all the countries of the Organization of Islamic Conference were to recognize the breakaway Republic of Bangsamorostan?

Founding Father Joaquin Bernas, SJ, seems to defend the opaquenss of the Arroyo administration in Peace Negotiations over the MOA-AD (I think because he advised the Palace to go ahead with it)--

But what of transparency? The necessity or even wisdom of making the contents of these phases public may differ from stage to stage. It has been pointed out, for instance, that the successful negotiations achieved by South Africa’s Mandela began with secret talks with De Klerk. Even with our constitutional right to information, different phases will require different degrees of publicity.

One thing that is remarkably clear: PUBLIC OPINION is still a mighty strong force in the Philippines, and while it may be fickle and uncontrollable, there seem to be issues upon which, it cannot be denied.

Gloria's Mess and the Role of the United States Institute of Peace

This summary is not available. Please click here to view the post.

Sarah Palin at the Starting Gate

Here is the Case Against Palin.

Then there is the Case Against the Case Against Palin.(Hat tip John Marzan)

And now even, the Case Against the Case Against the Case Against Palin.

LINK TO VIDEO

Live Coverage of the Republican National Convention

DAY 3: The GOP convention in Minneapolis has resumed.

Hurricane Palin?

John McCain is having a terrible week. Not only did the Republican National Convention's first day get rained out by the mass evacuation of New Orleans, but he really did not get a chance to show off a compassionate and competent leadership because Gustav has already been downgraded to a tropical depression.

In the meantime, there is already a tempest building up around his vice-presidential choice in Alaska Gov. Sarah Palin who is embroiled in a state ethics investigation, being called "Troopergate," involving allegations she had used her office and influence to get a troublesome former brother-in-law fired from the Alaska police force. The latter touches on the sensitive campaign issue of corruption in high places, and will be coupled by the Democrats with the fact that Gov. Palin apparently headed a 527 organization to defend the controversial Senator Ted Stevens of Alaska, to damage her record of executive performance.

Even more depressing than Tropical Depression Gustav however, may be the report that Governor Palin's 17 year old unmarried teenage daughter is pregnant (but will marry the father and will have the full support of a loving family). It was the subject of today's Larry King Show on CNN. This touches on the even more sensitive campaign issue of traditional values, since Sarah Palin has been billed as a role model ("soccer mom and dynamic state governor"). That she opposes Sex Education in Alaska schools provided an attack point for anti-GOP media guests.

Congresswoman Susan Molinari of New York mounted a valiant defense of her choice as running mate made by Sen. John McCain. But pressed by Larry King with the very question I posed to Commenter Dave on yesterday's thread: "Was Sarah Palin absolutely the BEST choice John McCain could've made?" she said Gov. Palin was absolutely the RIGHT choice. Pressed further to choose between others on the short list with none of the apparent Palin baggage, like Texas Gov. Kay Bailey Hutchison, Molinari could only insist that it was the right choice. But with feeble conviction.

Barack Obama took the high road when asked to comment on the Palin controversies, saying the children of candidates ought to be off-limits to politics and recalling that he himself was born to an 18-year old Kansas teenage mother. But of course, this cannot deter the Mass Media or his more enthusiastic supporters, most of whom are sure to pile on.

The McCain campaign has apparently sent a special team to Alaska to assess the situation and possibly do damage control of some kind, even as it was announced that Sen. McCain did know of the pregnancy before making his decision. But I am sure the delegates at the GOP convention, (which is back to the original schedule) will be asking themselves the same questions on Larry King: Is Sarah Palin really the BEST choice for vice presidential candidate? Will she be the asset that John McCain and the GOP were looking for to run a competive race? Will she in fact solidify the Republican social base, or alienate it?

Hurricane Gustav did little comparative damage, but dark clouds are rising now around Sarah Palin. The suggestion was made on the show that she might not even be the vice presidential candidate by the end of the week. I doubt that, but I am sorely disappointed at the choice of Sarah Palin.

Fisking the Good Father Bernas

I find myself in almost complete disagreement with a column on that ill-fated Memorandum of Agreement on Ancestral Domain between the MILF and the GRP, published yesterday Father Joaquin Bernas, S.J. (PDI: Peace Negotiations). He opens with a question:

MANILA, Philippines - Can you really have a peace negotiation that is totally closed to any change in the fundamental law? Perhaps you can, in an ideal world. But we are not there.

In the past two decades there has been a flurry of peace agreements. A characteristic common to some of them is direct negotiations between governments and internal armed groups who for this limited purpose were treated as equals. These were departures from earlier negotiations which where state to state. And the result common to some of these were ceasefire agreements linked to a modification of political and legal arrangements. The results were generally embodied in formal documents written, signed, publicized and witnessed by international participants.

Sad to say, a good number of them failed after five years and more after 10 years. But trial and error continue for the sake of peace. And lessons learned have already opened up an embryonic development in law called lex pacificatoria.

CAVEAT: I would pose a complementary question: Can you really have a peace negotiation that is totally OPEN to any change in the fundamental law?

Clearly not, for the Bill of Rights is largely non-negotiable, so that even if we grant that SOME constitutional change might be needed, we must insist that the change should be as small as is absolutely necessary, if only to increase the chances of its passage through a clearly tortuous process to gain the people's consent.

Now, as the good Fr. Bernas informs us, the "flurry" of peace agreements that have involved SOME changes in the constitutions of other countries largely failed over time, yet "trial and error" continues. I think the lesson here is crystal clear: even if countries change their Constitutions, there is no guarantee that peace will be achieved. So there is no evidence for the thesis that constitutional change is necessary and/or sufficient. I would surmise that the degree and swiftness of failure actually

The GRP-MILF MOA, we are told, is dead, or is at least comatose. And as I said in my column last Monday, I would not favor signing the MOA in its present form.

If it had been signed or if it should be signed, would the document be equivalent to a unilateral declaration that could bind the Philippines to some radical constitutional changes even including dismemberment of the archipelago? I do not think so. The little that I know about binding unilateral declarations in international law, principally from the unilateral commitment France made to discontinue nuclear tests in the vicinity of Australia and New Zealand, I would say that the MOA does not have the characteristics of a binding unilateral declaration.

At least three characteristics of the French commitment led the International Court of Justice to conclude that France had incurred a binding obligation. The commitment was very specific; there was a clear intent to be bound; and the commitment was restrictive. It would be hard to convince the ICJ that signing the MOA, even by an authorized agent, would satisfy these characteristics. Besides, there would be need to defend the MOA before the ICJ only if the Philippines consented to be brought to the ICJ. But we know that the ICJ is not an ordinary court to which one can be unwillingly dragged. ICJ rules require consent to be a party.

CAVEAT: This is really scary. Contrary to his own claim, I would say the good Fr. Bernas has just suggested that had it been signed the MOA-AD could be considered be considered by the ICJ as a binding unilateral declaration by the GRP, since the three characteristics applied to France seem to apply to the MOA-AD: (1) it is very specific; (2) there is a clear intent to be bound, since the GRP has declared this agreement to be necessary for a final compact. and (3) it is most restrictive indeed.

What should be the mandate of the negotiators? As I understand it, the mandate of the negotiators who produced the MOA was to work toward the formulation of an agreement that could lead to peace within the parameters of the Constitution. Should such a mandate be understood as a command not to agree to anything which might be a departure from the Constitution? I do not believe so. If that were the mandate, in the context of the current conflict, it would have manacled the negotiators severely.

CAVEAT: Again, the degree of departure from the Constitution ought to be minimized to increase the chances of passage. Unfortunately, the government peace panel seemed to have agreed to ANYTHING that was a departure from the Constitution. It becomes clear that the degree of change that ought to be agreed upon is a matter of discretion on the part of the Executive. This discretion, I think the negotiators gravely and slovenly abused.

The Constitution, after all, has two aspects—the substantive aspect and the procedural aspect. I understand the mandate to mean that the negotiators could explore and weigh possible changes in substantive provisions of the Constitution but always on the understanding that substantive changes could be finalized only according to the procedure prescribed by Article XVII of the Constitution.

The negotiators ventured into substantive changes. They have been vilified for these. But these were not changes that were self-executing but changes that could take place only after the constitutional process is finished.

I must admit that the language of the MOA does not succeed in causing the need for a constitutional process to jump out of the text. For that reason it is seen by some as a done deal. But it is not. The need for process is there even if not in the language we can easily understand. The negotiators had to devise a lot of language engineering to satisfy the constitutional requirement of the Republic while at the same time producing something acceptable to an opposing side reluctant to accept the Constitution.

CAVEAT: I disagree. The need for constitutional process DOES jump out of the text, not in the manner the good Fr. Bernas implies, but literally in the manifestly outrageous and explicitly disadvantageous changes to the Constitution that the Executive tries to bind Congress to make. No amount of language engineering could've disguised the surrender of our most cherished principles to a despicable enterprise of paying the largest ransom to the rebel gang that has held the whole nation hostage.

Critics of the MOA, if they are willing to be the negotiators, must also be willing to navigate in stormy negotiating seas. Hopefully they can be more skillful!

Peace agreements have at least three stages. First is the pre-negotiation agreement which tries to fix the participants and the agenda. Next is the substantive or framework agreement which identifies the root causes of the conflict and proposes how to halt violence more permanently. The last phase is the implementation agreement which seeks to advance the framework and flesh out the details. Before we reach this third stage, it is generally premature to talk of unconstitutionality.

I believe that at the moment we are still at both the first and second stage. Everyone should help to make the efforts in these stages successful so we can go on to the implementing stage and finally achieve peace in Mindanao.

Nego supositum! The recognition that major changes to the fundamental law will have to made at Stage 3 argues for more, not less care be taken to minimize those changes and not just roll the dice hoping for the improbable.

But what of transparency?

The necessity or even wisdom of making the contents of these phases public may differ from stage to stage. It has been pointed out, for instance, that the successful negotiations achieved by South Africa’s Mandela began with secret talks with De Klerk. Even with our constitutional right to information, different phases will require different degrees of publicity.

CAVEAT: The good Fr. Bernas is surely not defending the opaqueness of the negotiations on the MOA, for that was its greatest failure: the government never gained public support for what they were doing and were seeking to achieve a fait accompli.

Likely with the good Fr. Bernas' blessings and advise to the President and her peace negotiators...which may explain the hubris that goads the good Fr. Bernas to such a flimsy tissue of defense for a "mere piece of paper" that has already killed dozens and displaced a quarter of a million Christians, Muslims and lumads in Mindanao. Their blood and grief are on his hands since it appears he WAS one of the "Constitutional experts" consulted by the Palace on their approach.

So the good Fr. Bernas urges even more "trial and error" for the sake of peace!

There is a related post and comment thread over at Filipino Voices, where Abe Margallo supports the good Fr. Bernas.

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Here is a complete apologist for the MOA-AD in Patricio P. Diaz over at MindaNews. Warning, it's really painful reading all his drivel.

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