After being shot down by the Alaskan Libertarian Party, it seems assured now that Senator Lisa Murkowski, who lost her primary to the Tea Party backed Joe Miller, will mount a write-in campaign in a desperate effort to keep her seat of power in the US Senate. This would put her at odds with the NRSC, who switched to backing Miller after Murkowski’s defeat.

Miller’s victory in the primary was a key win for the Tea Party movement, and a serious wake up call for the GOP establishment. Just as the establishment always does, Murkowski will go to whatever means necessary to hold onto power. She told the Fairbanks paper, “I’m no quitter,” and that all options were on the table. Mark that down as a sure sign the write-in campaign will kick off shortly.

With Alaska election rules only requiring that (wait for it) “the intent of the voter” be determinable (hmmm… is it 2000 all over again?) Murkowski’s loyal GOPers could make a big enough dent to harm Miller, and help Democrat Scott McAdams. With a split Republican vote, McAdmams, who seemed an utter long-shot just a wee bit ago, could sneak in the Senate and hand Harry Reid and the Democrats a critical upset victory.

The political left in many countries has a long history of defending despicable acts of violence when they are committed by the right people. From Norman Mailer’s campaign to free murderer Jack Abbott, who upon release promptly went and murdered someone else, to Bernadine Dohrn’s effusive praise of Charles Manson, right up to today’s disgusting international campaign on behalf of cop-killer Mumia Abu-Jamal, there are few crimes too vile and horrendous for the left not to defend should the perpetrator belong to the correct movement or a fetishized oppressed minority.

Israel recently saw a particularly egregious example of this in the case of Sabbar Kashur, a Palestinian convicted of raping a young woman under false pretenses. According to initial media reports, Kashur was accused because he had claimed to be Jewish and the woman would not have slept with him had she known he was an Arab.

The Israeli left immediately rushed to Kashur’s side, accusing the entirety of Israeli society of racism and denouncing its justice system as akin to Nazi Germany or apartheid South Africa. Much of the foreign press quickly followed suit. But without question the most fervent defender of the convicted rapist was Haaretz columnist Gideon Levy.

On August 31st, little noticed outside naval analyst circles, China’s first purpose-built hospital ship left port on her inaugural mission. The 10,000 ton vessel, called Peace Ark, and her crew of over 400 military and medical personnel will spend the next 87 days providing health care to foreign militaries in the Gulf of Aden and humanitarian assistance to civilians in Djibouti, Kenya, Tanzania, the Seychelles, and Bangladesh. More than that, Peace Ark’s deployment marks the start of a new phase of Chinese soft power: medical assistance to win hearts and minds.

U.S. Navy ships, including hospital ships, routinely conduct similar humanitarian assistance and disaster relief operations. The U.S.N.S. Mercy is currently returning from such a mission in the Pacific. However, in almost all cases these deployments are completed by one or two vessels, whose work often achieves only minor local media coverage. If we are serious about improving global perceptions of the U.S., we must think bigger.

One hundred and two years ago, sixteen United States Navy battleships steamed out of Hampton Roads, Virginia. For the next two years, this fleet circumnavigated the globe, making port calls on six continents. The armada, sporting freshly painted white hulls, became known as the “Great White Fleet,” and by doing everything but fight introduced a new and invigorated America to the world.

We need a second Great White Fleet.

The “strong” currencies (JPY and CHF) have just broken into higher ground. JPY around 83.5 against USD; CHF 1.28+ against EUR. Gold in record-high territory; interest rates falling again after recent weakness in bonds; stocks plunging.

Everyone is back to work after the summer, and it’s time to figure out whether we need to reset various market levels for the reality of continuing weakness in the US and uncertainty elsewhere.

It’s actually being a terrible year for the financial industry, especially coming off last year’s historic gains. Flow trading and bond issuance are both way down. M&A is picking up some of the slack, but what that says about the overall economy is not positive. Wall St. dodged a bullet in 2008. We all thought it would never be the same again, but then Bernanke bailed everyone out and we had one more sweet, fat year. But the changes we feared then may now lie just ahead.

Kudos to Jack Goldsmith for this well-written post, but I am afraid that Goldsmith’s attempt to impart knowledge will fail, at least when it comes to the target of his post. I am also afraid that said target will fail to notice the significance of the fact that Goldsmith, despite his many bureaucratic wars with David Addington, is full of praise for Addington’s intelligence and skills as a lawyer, and how those skills will manifest themselves in Addington’s new job.

I actually take Fidel Castro’s side on a significant issue of global importance.

That the Obama Administration should come out against extending the Bush tax cuts is really no surprise. But it should be noted that there are plenty of economists who take issue with the Administration’s stance on this matter. Consider the following words from a prominent economist:

During the legislative battle over President Barack Obama’s health care law, there were many stories left untold about the true ramifications of the measure. We learned recently that allies of the White House have been circulating a presentation advising supporters to stop claiming the law will lower costs or reduce the deficit — now they tell us! But perhaps the most disturbing of the untold stories is how the new law’s expansion of Medicaid will burden African-Americans.

The evidence for this unsettling conclusion is solid and data-driven. According to a Congressional oversight report released by the Senate’s two serving physicians, Dr. Tom Coburn (R-OK) and Dr. John Barrasso (R-WY), the president’s choice to expand Medicaid services dramatically will have a disproportionate impact on the health of the poor—and as a side effect it will trap a significant percentage of African-Americans in a ghetto of poor medical care.

Academic studies have repeatedly confirmed Medicaid patients experience poorer health outcomes and higher infant mortality rates. In July a new report from the University of Virginia found even worse performance: surgical patients on Medicaid actually fare worse than the uninsured. They are 13 percent more likely to die than those who have no insurance and 97 percent more likely to die than patients with private insurance.

Yes, you read that right — having no coverage at all is statistically better than being covered by Medicaid.

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For all the talk about the Tea Party movement these days, we have very little real research available into what they believe. Anne Sorock of the Sam Adams Alliance talked with me about her research into the Tea Parties — who they are, what they think, and why they think it — and some of the fascinating political differences between the early members of the movement and those who joined in the wake of the battle over President Obama’s health care law in a special edition of Coffee and Markets. We’re brought to you as always by BigGovernment.com and Stephen Clouse and Associates.

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Sam Adams Alliance: Research
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On today’s episode of Welcome to the Know, The New Ledger’s Brad Jackson and Pejman Yousefzadeh discuss Obama’s new stimulus plan, the Left’s Tea Party Tracker site, and fantastic fried food.

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Obama’s $50 New Billion Stimulus Package

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Will Fried Beer Take the Prize at the State Fair of Texas?

After all these years, I’m starting to lean toward the Austrian economic position. Just in time too, as it’s never been less in vogue than it is now, as the “New Keynesianism” dominates our age. (In a nutshell, NK seeks to adjust traditional relations like the Philips curve for expectations. As regards monetary policy, it emphasizes inflation targeting rather than money aggregates.)

In a word, the desired outcome of all current policy is to cause the people to expect higher inflation in the future. That is what is supposedly needed to counteract the “liquidity trap,” in which people prefer to hold demand assets redeemable at par (aka, savings), as opposed to financial assets or real property.

But the people have set their current preference for high levels of savings on a very rational basis: they watched the stock market plunge 50% in twelve months, and the value of their houses by similar proportions. And now they’re faced with the prospect of continued high unemployment.

In short, the people want to save. And they’ll want to save until they feel that investing is less dangerous and their own earning prospects are less uncertain. This is fated to take a substantial amount of time.

The standard response to this is really quite compelling: it’s extremely wasteful and socially disastrous to spend the next few years with an underutilized economy and high unemployment. Would that there were an easy way out of the box! The best that policymakers can come up with is to spend huge amounts of printed money on infrastructure and new industries. The problem is that none of this will help much because these things don’t represent real investment (of the kind that the private sector makes). We don’t really need more roads and bridges at a time when...

For some reason, I had thought Peter Orszag was an economist. (E-mailers — Of course I know he’s an economist. It’s called sarcasm.) But his arguments in today’s New York Times at every turn are based only on political calculations, particularly as regards the difficulty of getting Democrats and Republicans to agree on anything. His plan (extending the Bush tax cuts for everyone for two years) is attractive not for any economic sense it might make, but because it’s possible. Serendipitously, the tax cuts will end automatically, while every other outcome requires a vote in Congress.

And there’s not a nod given to the raging policy debate, which is: why isn’t the economy actually recovering, despite a huge stimulus and zero interest rates? His plan simply assumes a strong traditional recovery will be underway by 2013. If you can’t raise taxes now because of the hurt you’re putting on consumption, then on what basis do you think you’ll be able to in two years? Things might not be much better by then. Just like the “Summer of Recovery” marketing plan, this is based on assuming that a recovery will simply materialize.

In this, as with all the other numbers in here, Orszag depends on his own analysis as OMB chief. Why does he pick 2015 as the year to discuss our future structural deficit, at 5% rather than a more manageable 3%? Because, according to his own figures, 2015 will be the smallest deficit year of this decade. All the other years are scheduled to be higher.

But our deficit now is 10% of GDP, and has been for each of Obama’s first two years. The projections call for it to fall steadily till 2015, then start growing again. I think it’ll be a miracle if it falls...