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Happy Thanksgiving

By John J. Miller      

From Ronald Reagan’s first Thanksgiving proclamation, in 1981:

America has much for which to be thankful. The unequaled freedom enjoyed by our citizens has provided a harvest of plenty to this nation throughout its history. In keeping with America’s heritage, one day each year is set aside for giving thanks to God for all of His blessings. … In this spirit, Thanksgiving has become a day when Americans extend a helping hand to the less fortunate. Long before there was a government welfare program, this spirit of voluntary giving was ingrained in the American character. Americans have always understand that, truly, one must give in order to receive. This should be a day of giving as well as a day of thanks.

Read all eight of Reagan’s Thanksgiving proclamations here.

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DeLay Convicted

The Hammer was found guilty of money laundering earlier today in Texas:

Former U.S. House Majority Leader Tom DeLay — once one of the most powerful and feared Republicans in Congress — was convicted Wednesday on charges he illegally funneled corporate money to Texas candidates in 2002.

Jurors deliberated for 19 hours before returning guilty verdicts against DeLay on charges of money laundering and conspiracy to commit money laundering.

DeLay will appeal:

A few minutes later, Mr. Delay said outside the door of the courtroom that he would appeal the decision. He called the prosecution a political vendetta by Democrats in the local district attorney’s office, and revenge for his role in orchestrating the 2003 redrawing of congressional districts to elect more Republicans.

“This is an abuse of power,” he said. “It’s a miscarriage of justice. I still maintain my innocence. The criminalization of politics undermines our very system.”

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NRO Web Briefing

November 24, 2010 10:31 AM

Joe Biden: The case for ratifying New START.

John Pistole: Why we need TSA's security measures.

Jeff Jacoby: No subsidy for NPR.

Richard Epstein: Government by waiver.

John Bolton: Obama’s lost weekend.

Washington Times Editorials: Iran will follow North Korea's lead as a nuclear nemesis

David Hall: Nathaniel Hawthorne’s portrait of progressive Pilgrims was unfair and inaccurate.

Robert Wright: The dangers of waging war to contain terrorism.

Jimmy Carter: North Korea's consistent message to the U.S.

Michael Goodman: Giving thanks for our nation.

John Stossel: A lost Thanksgiving lesson.

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A Pork Problem in Arizona?

By Robert Costa      

Sen. Jon Kyl (R., Ariz.) is coming under fire for a home-state project. The AP reports:

Senate Republicans’ ban on earmarks – money included in a bill by a lawmaker to benefit a home-state project or interest – was short-lived.

Only three days after GOP senators and senators-elect renounced earmarks, Arizona Sen. Jon Kyl, the No. 2 Senate Republican, got himself a whopping $200 million to settle an Arizona Indian tribe’s water rights claim against the government.

Kyl slipped the measure into a larger bill sought by President Barack Obama and passed by the Senate on Friday to settle claims by black farmers and American Indians against the federal government. Kyl’s office insists the measure is not an earmark, and the House didn’t deem it one when it considered a version earlier this year.

Team Kyl (and the Obama administration) respond:

A spokesman for Kyl is defending his support for the “White Mountain Apache Tribe Water Rights Quantification Act of 2010,” as it is officially known, saying it has been a long-negotiated deal between federal agencies and the tribe that has the backing of President Barack Obama. “What is not accurate is to call the United States government’s settlement of a claim against it an earmark,” said Kyl spokesman Andrew Wilder. “Saying we ‘slipped’ it into the package is nonsense designed to insinuate something untoward. Kyl first introduced the settlement on behalf of the parties in 2008 and has worked to get it through ever since. But even though it passed with unanimous support Friday, some wish to play political games with it,” Wilder said

In fact, some in the Obama administration agree with Kyl.

Dan DuBray, a spokesman for the Bureau of Relocation, part of the Interior Department, says the $200 million was part of a settlement they negotiated with the tribe, and that everyone agreed it was a good idea to pair it with the black farmers’ legislation, because by law settlements such as this must be approved by Congress.

“We don’t see it as an earmark at all,” said Dan DuBray.

As David Weigel points out, Rep. Jeff Flake doesn’t seem to mind:

“You have to do these water settlements or allow the courts to simply award damages,” said Rep. Jeff Flake, R-Ariz., perhaps the most anti-earmark member of Congress. “An earmark is something when an individual gets a goodie for their district outside of the regular legislative process.”

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What Went Wrong in Ireland

Via Guido, a carefully balanced World Bank report (from May 2009) describing what went wrong on Ireland written by a Trinity College (Dublin) professor who has now become the new governor of the Irish Central Bank. There’s plenty of blame to go around, but note in particular the way that the introduction of the euro created undue complacency of a type that the newly fashionable, if long deceased, economist Hyman Minsky might have recognized. More specifically, the adoption of the single currency effectively shut down some of the market warning signals that might have pushed the government into taking the sort of measures that would have avoided disaster:
 
 
 
  Elements of eurozone membership certainly contributed to the property boom, and to the deteriorating drift in wage competitiveness. Low interest rates and the removal of exchange rate risk facilitated the boom; the insensitivity of the exchange rate and of interest rates to domestic developments removed a traditional external constraint or at least warning sign…Specifically, real interest rates 1998-2007 averaged minus 1 per cent, compared with over 7 per cent in the [a pre-euro system designed to reduce intra-european exchange rate volatility] ERM period (even excluding the crisis of 1992-3) and 3¾ in the floating rate period between the two. The fall in nominal interest rates was even steeper. No wonder long-lived assets like residential property, capitalized at permanently lower discount factors, seemed and were appropriately valued more highly than before. The problem was to determine just how much higher. EMU [economic and monetary union] introduced that element of uncertainty.

Up to 2003, the property boom was financed without significant recourse to foreign borrowing, but after then the banks started to borrow heavily from abroad. This was an effortless undertaking thanks to the removal of currency risk and went essentially unnoticed by analysts, the focus of policy attention having shifted away entirely from balance of payments concerns. Unlike imbalances of the past, overborrowing did not lead to interest rate increases, again because currency risk had been altogether removed. Only when credit risk became an issue after September 2008 did the financial markets belatedly sound a warning sign.

Much the same could be said of wage rates. As shown by Honohan and Leddin (2006), the former tendency for deviations in wage competitiveness to correct themselves (error correction model), detectable in previous data, was no longer evident after EMU began. The regime once again tolerated a larger movement awayfrom equilibrium before warning signals sounded.  

 

Those interested in this tragedy should read the whole thing.

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Giving Thanks

John Boehner, Sarah Palin, Victor Davis Hanson, Larry Kudlow, and others tell NRO what they’re thankful for.

Dr. Elizabeth Whelan identifies the numerous “toxins” and “carcinogens” in your Thanksgiving feast and assures us they are — thankfully — safe to eat.

Frank Miniter reminds us that private property kept the Pilgrims alive.

Julie Gunlock says it’s ok to load up on the gravy — just don’t tell the food police.

Michelle Malkin gives thanks for American ingenuity, which has given us, among other things, the electric carving knife.

Rich Lowry wonders where we get such good people as Bill Krissoff, who recently served in the Navy Medical Corps.

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Krauthammer’s Take

From Tuesday night’s Fox News All-Stars.

On the crisis in Korea:

Last night I predicted that the administration would do exactly the wrong thing and call … for a return to the Six-Party talks. Well sure enough, our envoy to North Korea, who’s now in Beijing, last night called for, yes, a return to the talks.

This is after he had a meeting with the Chinese and he announced that it was extremely successful, that we and the Chinese had agreed … on the need for — strong measures? Retaliation? Sanctions? No. On the need for multilateralism. Now, that was going to have an effect on North Korea.

To return to the talks is exactly the wrong thing because it’s exactly why — if there’s any logic at all to what’s happened — that’s why Pyongyang has been doing this: (a) the attack with the artillery, and (b) the revelation earlier this last week of this vast, advanced facility for uranium enrichment.

The point is this is a regime in transition, a regime in a succession crisis, that is in economic disaster. The people are starving. It needs [outside] aid because we and the South Koreans and the Japanese have correctly cut it off years ago, and this is the way it [North Korea] beckons us into negotiations where, again, it will offer a phony agreement on some kind of halting of perhaps the uranium or plutonium program, and we will once again subsidize them.

It’s the wrong reaction…

I think everybody understands that the only outcome of this eventually that will be considered a success is if the regime eventually implodes and collapses of its own inefficiency and irrationality — in fact lunacy in the way it governs itself.

And one way to do that is not to continue what we have been doing for 16 years — [which] is negotiating and periodically caving in to threats like this, or attacks like this, with carrots, meaning keeping the economy of that state, which is really teetering on the edge of collapse, keeping it going…

Unless we’re ready to attack the nuclear facilities in North Korea, which we are not, which might provoke a nuclear response, perhaps on Japan or even on Seoul, there is no way in which we can do anything about the existing facilities. All we can do is to hasten the demise of the regime.

On candidate Hillary Clinton’s having once warned about the White House receiving a 3:00 a.m. call — and President Obama having been awoken at 3:55 a.m. because of the Korea crisis:

He put them on hold.

On the Federal Reserve’s quantitative easing plan:

It is a risky bet because it could create a bubble. Our problem was that we had a bubble, and this is injecting money into an economy artificially without having the requisite increase of the productivity … and getting a new bubble and setting up a premise for inflation.

But I worry about something else, which is the political reaction by the conservatives and Republicans. The Ron Pauls and Rand Pauls who always have been skeptical of the Fed and talked about even abolishing it or at least removing its independence are getting wind at their backs now.

That worries me, because if there is one thing an advanced society has to have it’s an independent central bank. And to corrupt it over this — the Fed is always human and fallible; but regardless, it’s better to have it act than having it act as an instrument of politicians in power. I worry about a reaction. 

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Nerocrats?

Nero may have fiddled while Rome burned, but while Dublin founders, the illegitimarchs of Brussels prefer to do this (description via the website of the “Belgian Presidency of the Council of the European Union”):
 
For three days four EU commissioners cooked to their heart’s delight under the approving  eye of renowned chefs. The event was organised to highlight European cultural diversity.
 
It’s worth noting, of course, that the “cultural diversity” displayed at such events is of a distinctly Potemkin variety, roughly analagous to the old Soviet custom of regularly rolling out a troupe of folk dancers from some crushed nation or other whenever they wanted to reassure the easily duped that the USSR was indeed a happy brotherhood of free peoples.
 

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Giving Thanks

Marco Rubio, John Boehner, Sarah Palin, Victor Davis Hanson, Heather Mac Donald, and more do it here.

If you’re off for a bit: Safe travels and Happy Thanksgiving! Thanks for being a part of NRO. And a special thanks to those of you deployed abroad in our name. 

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Re: Bush for Romney

By Robert Costa      

Sarah Palin responds to Barbara Bush:

Appearing on Laura Ingraham’s radio show today, Sarah Palin said that while she “love[s] the Bushes,” she sees George H.W. and Barbara Bush as “blue bloods” who are trying to “pick and chose” the 2012 Republican presidential nominee for president.

More here.

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No Joke

Gov. Chris Christie has some fun on Late Night with Jimmy Fallon:

Christie said there is “no chance” he runs in 2012. Fallon then asked whether he thinks Sarah Palin is up to the job. “It’s a crazy world,” Christie said.

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Re: GOP Could �Gobble Up’ NY-23

By Robert Costa      

Doug Hoffman is a soft-spoken conservative from upstate New York who gained national attention in 2009 for his campaign against liberal Republican Dede Scozzafava and Democrat Bill Owens — and he just rang. He tells us that he has been keeping a close eye on Owens this week.

Owens, who won that 2009 special election and then reelection in November, has been dancing around the question of who he’ll support for speaker. First he told a local newspaper that it was “quite possible” he’d cast a vote for House GOP leader John Boehner. That quote made waves, and Owens quickly backtracked, claiming that he was simply “blowing off a little steam.”

Hoffman challenges Owens to stick by his original statement. “I encourage him to vote for Boehner,” he says. “Not only should he support Boehner, but he should come out and say that he’ll work with Republicans to repeal health care, stop cap-and-trade, and cut taxes.”

“Owens seemed like he was going in the right direction when I read his comments earlier this week,” Hoffman says. “I thought he was seeing the light. It was disappointing to read about his change.”

Hoffman, who ran in both 2009 and 2010, will not rule out a 2012 run. “It’s way too early to start talking about that,” he says. “At this point, I’m self-assessing, spending time with my family, and looking at ways to go forward.” He notes that if the Conservative party and GOP can unite in NY-23 next cycle, “we’ll have a real chance to capture this seat.”

Unlike GOP strategist Brendan Quinn, who sees NY-23 potentially being carved apart in reapportionment, Hoffman thinks that the sprawling district could stay relatively the same, “with no dramatic change, since Republicans know that the district, in most parts, is home to conservatives . . . Its remoteness and demographics, in my opinion, probably will lead to it staying as is, with maybe the Lake Placid area coming back into the fold.”

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The Golden Bear

My column today is called “Cruising Speed, Part II.” This is the second (obviously) and last (less obviously) installment of a cruise journal — a journal about the cruise that NR has just had. If you’re interested, go here.

In Part II, I have a little item about Jack Nicklaus. One of our cruise passengers, knowing I was a Nicklaus nut, brought a high-school photo of him. She and he went to school together: Upper Arlington High (in the Columbus, Ohio, area). He wrote a sweet, playful, amusing note to her on the back of the photo. The teenage Jack had excellent penmanship, too. As I say in my journal, he almost wrote like a girl. Although he didn’t play golf, football, or basketball like a girl, for sure.

That’s what I wrote in my journal: golf, football, and basketball. But I forgot something, important. A reader writes me,

“I thought that you might enjoy knowing, if you didn’t already, that he also played baseball very well. I remember watching a Cubs-Reds baseball game in, I think, 1961. Johnny Edwards, in his rookie season, was catching for the Reds. One of the announcers (may have been Jack Brickhouse; this was a WGN broadcast) said that, in high school, Edwards wasn’t the all-city catcher; ‘a fellow named Jack Nicklaus, who’s been having some pretty good success as a golfer, was.’”

That’s my boy: the best at everything he touched.

Another reader writes,

“I also grew up in Upper Arlington. Jack would have been about nine years ahead of me at Upper Arlington HS. (Go Golden Bears!) Anyway, more important to us was his dad’s drugstore, Nicklaus Drugs. It was our after-school meeting place. Cherry Cokes and (crinkly cut) French fries. The Cokes were served in the paper cones with the grey metal holders. Talk about old-school. Lileks would have loved the place. Drugstores with lunch counters. Are there any left?”

Probably so. Okay, this is about enough Nicklaus nostalgia for one day. Once I get going on Nicklaus, I pretty much won’t shut up about anything else — including the Tea Party, music, and Nork nukes.

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North Korea: The Goal Is Regime Change

North Korea’s attack on a South Korean island and its recent disclosure of a new uranium-enrichment facility are just the latest in a series of reminders that U.S. policy toward North Korea has failed. This failure has unfortunately spanned several administrations of both political parties.

In some respects, the Obama administration’s initial policy toward North Korea was an improvement on the second-term Bush administration’s policy of engagement. Following North Korea’s nuclear test in May 2009, the United States worked to obtain a new round of U.N. Security Council sanctions and made clear to Pyongyang that Washington had no interest in rewarding their bad behavior just to get them to the negotiating table.

Unfortunately, the administration, distracted by other issues, put North Korea on the back burner, and North Korea decided to lash out, sinking a South Korean naval ship and now killing two South Korean civilians as well as two soldiers.

It is clear that the Obama administration’s strategy of “strategic patience” has failed. With the deployment of an aircraft carrier to conduct exercises with the South Koreans, they are ramping up the pressure, but unless we and our allies make clear to the North Koreans that there is a price for their intransigence, this unfortunate cycle will be repeated again and again for years to come.

While a direct military response would be too provocative, the administration should consider such steps as: increased efforts to cripple the country’s leadership by targeting the regime’s bank accounts; nonconsensual boarding of North Korean ships suspected of transferring illicit weapons or related technology; and a stern message to China that if Beijing does not rein in Pyongyang, the United States and South Korea will not continue to sit idly by while South Korean citizens are killed.

Perhaps most importantly, the president should make clear that the goal of our North Korea policy is regime change. Congress should pass and the President should sign a North Korean Liberation Act that lays out actions the United States is willing to take to bring about such change in North Korea — for instance, efforts to increase the flow of information into the country and support for refugees who are able to escape.

As long as the current despotic regime remains in place, these incidents will continue to occur and the threat of nuclear-weapons proliferation (either to other rogue regimes or to terrorists) will loom large in the fears of Western policymakers. Forcing the current regime from power is the only way to resolve the security and proliferation challenges posed by Pyongyang.

Jamie M. Fly is executive director of the Foreign Policy Initiative.

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GOP Could ‘Gobble Up’ NY-23

By Robert Costa      

Rep. Bill Owens, the upstate Democrat representing New York’s 23rd congressional district, said Monday that he may back House Republican leader John Boehner for speaker. After the story went viral, Owens quickly backed off his statement, claiming he was simply “blowing off a little steam.”

Regardless of how he ends up casting his vote, Brendan Quinn, the former state party director who oversaw GOP House races this year, tells us that Owens is running scared: “To make these kind of statements, this early, is an admission that he’s in trouble.”

“If he’s talking about a vote for Boehner, it’s a sign that he’s looking to protect his backside in New York,” Quinn says. “But the real issue for him is not Boehner; it’s the New York State Senate and redistricting. And this is not about securing earmarks from the House Republicans — they’ve already pledged to end them.”

“Owens knows that Republicans will have, at minimum, a 32-30 majority in the state senate,” Quinn says. “Republicans will have an active role in reapportionment, and New York is going to lose two House seats. Typically they come out of upstate, due to the numbers of people moving out of the region. Many Republicans would love to carve off Owens’s district: Give a piece to New York’s 20th congressional district, where Republican Chris Gibson was elected; give another piece to New York’s 25th, where Ann Marie Buerkle just won; then give another slice to New York’s 24th, which was picked up by Richard Hanna. That will force Owens to pick his poison come 2012.”

“Republicans could easily gobble up New York’s 23rd into those three districts,” Quinn says.

(Image from the New York Times)

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The Irish Austerity Plan

The government of Ireland just outlined a €15 billion austerity plan. According the Wall Street Journal:

The plan detailed €10 billion in spending cuts, plus €5 billion in tax and revenue increases to bring the budget deficit to below 3% of GDP by 2014 from an estimated 32% in 2010—or 11.7% excluding the cost of the bank bailout.

The government vowed to maintain its 12.5% corporation-tax rate, but said the four-year plan will raise €1.9 billion through income-tax changes, and said it will raise value-added tax to 22% in 2013 from 21% currently.

Of course, the increase in tax revenue may just be wishful thinking.

It will be interesting to see if the markets respond positively to this plan. They haven’t been impressed with the announcement of the bailout so far, as Paul Krugman explains in this good post (ignore his rant about austerity measures).

The Irish are vowing to maintain their 12.5 percent corporate tax rate, which is great news. Some countries that never liked the tax competition from Ireland are using this crisis as an excuse to blame Dublin’s woes on low tax rates. (The Germans and the French, for instance.) Many liberal American pundits, always eager to argue against low tax rates, have done the same.

But that’s probably because they haven’t looked at the data. Don Boudreaux has:

The modern, tax-rate-cutting liberalization of the Irish economy is commonly dated to have begun in earnest in 1987.  In that year, Irish government receipts were about 10 billion euros and expenditures were about 12 billion euros.  Over the next 20 years, government receipts and expenditures both rose, largely in lock-step with each other, to about 55 billion euros.  Steady and significant increases in the government’s expenditures tracked closely the steady and significant increases in receipts.  But since 2007, although government receipts have since fallen to about 42 billion euros, government spending continued to rise.  That spending was more than 70 billion euros in 2009.  (These expenditures are falling back a bit, to about 66 billion euros in 2010.)

As a percentage of Ireland’s (fast-growing) GDP, government expenditures fell steadily from 1987 until 2007 – but then rocketed upward from about 36 percent of GDP in 2006 to about 58 percent in 2009.  (These expenditures will be about 54 percent of Irish GDP in 2010.)*

Over at International Liberty, Dan Mitchell has a chart showing the spectacular increase in tax revenues that followed the cuts in tax rates. It also shows how these tax revenues were promptly devoured by government spending. But the Irish government, like many others, wouldn’t restrain itself to spending within the limits of what it collects.

As we see, when the financial crisis hit a couple of years ago, tax receipts started falling. That wasn’t the result of cuts in rates, but of lower economic growth. However, as the chart shows, politicians didn’t stop spending to adjust to lower receipts.

Considering that Ireland’s insolvency started after the government had consumed over half of the wealth produced by the country, and following almost 20 years of increases in tax revenue, it seems hard to argue that it’s the low tax rates that fueled the crisis.

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Keep Clicking

When you land or get back from picking up the celery, do check on NRO. We have Sarah Palin, John Boehner, and more coming up this afternoon yet … 

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Comments

are taking a vacation through Saturday (at which point they will be slow). Thanks to all commenters. Happy Thanksgiving. 

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The Shifting Tactics of AQAP

On Saturday, al-Qaeda in the Arabian Peninsula (AQAP) published a special edition of its English-language magazine, Inspire, in which the details of “Operation Hemorrhage,” the October parcel plot, are described. (The Yemen-based al-Qaeda franchise claimed credit for the plot in a statement released on November 5.) This issue and past issues of Inspire are valuable for what they reveal about AQAP’s current operations in its campaigns abroad and at home.

AQAP’s campaign of violence abroad relies on two groups: Western recruits undertaking self-initiated operations and AQAP militants carrying out sanctioned operations. The first issue of Inspire, published on July 11, targeted potential Western recruits. Specifically, it called for an expanded campaign of violence characterized by lower-scale, more frequent attacks in the West — a shift away from the tradition of spectacular attacks on high-value targets. The far war, for AQAP, will be waged by untrained recruits who take the initiative, put together the tools it has provided (e.g., information on how to execute an attack without formal training, tips on avoiding surveillance), and pull off smaller attacks in the U.S. and other Western countries. By emphasizing smaller operations that are less likely to draw attention in the planning stages, AQAP is attempting to exploit U.S. homeland-security measures.

In addition to these Western recruit targets, there is also the operational capacity AQAP has built in Yemen to execute international attacks. The parcel plot outlined in the recent special edition of Inspire is a prime example of this Yemen-based operational capacity. AQAP claims that the entire plot took three months and six operatives to plan and carry out, and only cost $4,200. Their head of foreign operations writes: “You [the West] either spend billions of dollars to inspect each and every package in the world or you do nothing and we keep trying again.” By downgrading the strategic value of its targets and increasing the frequency of its attacks, AQAP has attempted to increase to cost of securing the homeland against terrorism, forcing a choice between costly security measures and continued attacks.

AQAP has intensified its campaign at home as well — the second issue of Inspire featured a photo spread of AQAP’s operations against the Yemeni military in Abyan governorate. Their first major attack on a Yemeni target was on June 19, 2010, when four militants stormed the Yemeni intelligence service’s building in Aden, freeing ten prisoners and killing eight military guards. On July 14, twenty AQAP militants executed a coordinated attack on police and intelligence headquarters in Zinjibar, the capital of Abyan governorate.

The campaign in Yemen has only intensified following a series of Yemeni military operations against AQAP strongholds in Abyan, Dhaleh, and Shabwah governorates. AQAP now characterizes Yemeni president Ali Abdullah Saleh, whom they formerly portrayed as a puppet of the West, as an active enemy and the head of a “traitor” government. AQAP military commander Qasim al Raymi warned Saleh that he is “digging [his] own grave,” and the recent special edition of Inspire highlighted Saleh’s statement following the parcel plot that he would “combat al-Qaeda.” The Yemeni government is now a direct target of AQAP attacks because of its complicity in the global war on terror.

AQAP has diversified its tactics and targets since the Christmas Day attack to include more frequent, smaller-scale attacks on lesser-value targets and has begun targeting government infrastructure in Yemen. The group’s strategy, however, remains the same: Attack the West and its allies.

— Katherine Zimmerman is Gulf of Aden team lead for AEI’s Critical Threats Project.

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On the Home Page

Piotr Brzezinski observes that the EU wants to sacrifice Ireland’s low-tax haven to pay for its Euro-dream.

Michael Tanner describes what’s wrong with welfare — so wrong even Marion Barry can see it.

Jonah Goldberg explains why he admires the Pope, despite their theological differences.

Andrew McCarthy critiques the TSA’s unreasonable policy: if everyone is a suspect, then no one is a suspect.

The editors advise the TSA on how to protect American security less invasively.

Jay Nordlinger offers further reflections on what he saw on the NR cruise, following up on yesterday.  

Clifford D. May gives thanks to the protectors of our freedom. 

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An Investigation to Watch

Like my fellow NR cruisers I’m back on dry land and digging out, with very fond memories of time spent at sea with really wonderful people.

It doesn’t seem as if there’s been much discussion ‘round these parts of a big story broken by the Wall Street Journal a few days ago: the SEC, FBI and federal prosecutors are targeting giant investors (big hedge funds, mutual funds, and other institutions) in what looks like a huge insider trading case. This ought to be very worrisome, especially in a bad economy.

As a prosecutor, I didn’t like this species of securities fraud. The criminal law is supposed to be written with sufficient clarity that a person of ordinary intelligence is put on notice of what is forbidden. Insider trading, by contrast, is forever evolving.

It involves trading on the basis of “material, non-public” information. But what information is non-public? Besides the closely held business information one is told about, does it also include similar information that one figures out on his own? And who has a fiduciary duty not to share such information with others? The statutes and regs don’t give us a definitive answer, and the courts, egged on by the Justice Department, are forever modifying the concept, attenuating it from obvious corporate insiders to persons who are six degrees of separation from those insiders but are somehow supposed to know, as they trade stocks, that they oughtn’t have the advantage of the information that has fallen into their laps. 

What I most dislike, though, is the premise: the government’s farcical belief that you can somehow create a marketplace that is perfectly fair and equal, and where no one trades on information until it is publicly available to everyone. Not only is that sheer lunacy. It further warps the value of stock shares by artificially delaying the revelation of important information that ought to be factored into the market price. So merit is penalized as the studious, shrewd, careful investor is portrayed as a cheat, while the small, unwitting investor can get burned because he trades stocks in the dark about important developments that haven’t yet been publicized.

The new investigation seems to be taking insider trading to a new level: the government appears to be targeting those networks that gather, analyze and swap information — as if markets are only fair if everyone is kept uninformed until some magic moment when the government decides the time is ripe for revelations and trades. Obviously, real fraud ought to be punished when it occurs, and we should withhold judgment until we see what the investigation yields. But what is so far known smacks of criminalizing ordinary business activity, and of pounding businesses with FBI raids of their records as well as the need to spend zillions on legal representation. I’m not sure that’s the best way to spur an economic recovery.

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Obama Not Worried about 2012 Palin Run

President Obama’s not worried about running against Sarah Palin in 2012.

In an interview with Barbara Walters set to air Friday, the president, asked if he could defeat Palin, responded, “I don’t think about Sarah Palin.”

“Obviously Sarah Palin has a strong base of support in the Republican Party,” Obama continued, “and I respect those skills. But I spend most of my time right now on how I can be the best possible president. And my attitude has always been, from the day I started this job that if I do a good job and if I’m delivering for the American people the politics will take care of itself. If I falter and the American people are dissatisfied, then I’ll have problems.”

Palin told Walters in an interview last week that she thinks she could beat President Obama if she decides to run in 2012.

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Capping Commissions

By Jonah Goldberg      

Here’s a completely random thought: Door hinges!

Here’s a slightly less random one. The missus and I were watching the latest episode of the The Office last night on the DVR thingy. One of the plotlines involved the fact that the suits over in corporate capped the commissions salesmen could make. I’ve heard of this practice before from friends and family but I have never heard a good explanation for why in the world any business would want to do such a thing. Why have commissions at all if you’re going to cap them? What on earth would be wrong with having your sales force make more money than everybody else in the company? As far as I can tell, in principle, there’s nothing wrong with salesmen making more in commissions than the CEO makes in salary.

Anyway, this has always bugged me and I figured it’d be a good question to throw out to the Corner on a slow day.

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TSA

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Re: Obama Grants Second Pardon

By Robert Costa      

Brian, here’s what the president had to say this morning: “It feels pretty good to stop at least one shellacking this November.”

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David Pryce-Jones

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Is Marriage Just Evolving?

Are the headlines right? Do Americans really think marriage is becoming obsolete? And does this trend simply show how the concept of family is evolving to include many different arrangements?

According to the Time/Pew poll results released last week, 39 percent of Americans do indeed believe marriage is becoming obsolete, and this belief is more common among the less-educated. Among those with college degrees (who make up only about 30 percent of the population), only 27 percent agree that marriage is becoming obsolete. Among those with “some college,” 41 percent agree. Among those with a high-school degree or less, 45 percent agree.

More education corresponds to higher pay, so it’s no surprise that the same trend appears with income. Among those making $75,000 or more, only 30 percent agree that marriage is becoming obsolete. Among those making $30,000 or less, 48 percent agree.

Age also makes a difference: Agreement is most common in the 18–29 cohort (44 percent).

In other words, the people who think marriage is becoming obsolete are not liberal professors at Ivy League schools. Instead, think of a twenty-something Joe the Plumber.

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Humbling

A contribution of $100 from Afghanistan just came in to our post-election fundraising drive, along with this: 

Greetings to all my fellow conservatives at NRO!  I am happy to donate to such a worthy and incredibly valuable group of people.  NRO is a lifeline — a veritable God-send — to me here in Afghanistan.  I am an Army Infantry officer stationed in Southern Afghanistan with the 101st Airborne, and whenever I can — which is sometimes all to infrequently given our mission and the rough internet connections — I dive into NRO and lap up as much of the good stuff as I can before possibly losing my access for another couple of days or weeks.  Truly a great and invaluable resource.  I appreciate all the fine writing and hard work that goes into putting such a great product together.  Please accept my donation with a huge dose of thanks and please, please keep up the good work.  I only wish I could send more.  

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Raese 2012? 2014?

By Robert Costa      

The West Virginia Republican is staying in the game. In a new web video, he details his concerns about the Senate. “My initial take is, I’ve heard a lot of deal-making already and they haven’t even been put into office,” he says. “I’m optimistic, but on the other hand, I think that America is not going to take a lot of patience with this situation. I think that the Republican party has an obligation, right now, to perform; let’s see if they do.”

Sen.-elect Joe Manchin is up in 2012; Sen. Jay Rockefeller is up in 2014.

Update: As numerous readers have pointed out, Manchin is already on the hot seat:

The Republican Party is wasting very little time going after one of their top Senate targets for 2012: West Virginia Sen.-elect Joe Manchin (D).

Manchin is already up for re-election because he was elected last Tuesday in a special election for the late Sen. Robert Byrd’s (D) seat.

Just a week after he defeated Republican John Raese by 10 percent, Manchin is already being put on the defensive by rumors that he has been courted by the GOP to switch parties.

More, the National Republican Senatorial Committee also jumped on him on Tuesday, targeting him with its first attack statement of the 2012 cycle. In it, Republicans preemptively criticized Manchin for considering backing Harry Reid (D-Nev.) to retain his position as Senate Majority Leader. Reid supports cap and trade energy legislation, a proposal that Manchin has campaigned against and that is deeply unpopular in West Virginia, where coal mining is the top industry.

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The Addamses and Lincoln

Below, I have a little post on The Addams Family (the musical). Thought you might like to know a little something. Charles Addams, the cartoonist, was a relative of Jane Addams — whose father was a founder of the Republican party. And an Illinoisian. He was friends with Lincoln. In fact, Lincoln used to address letters to him “My Dear Double D-ed Addams.”

Our 16th president enjoyed noticing and commenting on such things. Do you remember his famous quip about his future in-laws (who were a little bit hoity-toity)? “One ‘d’ was good enough for God, but not for the Todds.”

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North Korea: What the Obama Doctrine Has Sown

No place is less aptly named than the Land of the Morning Calm. Artillery duels are not tranquil. Neither is news that North Korea has a new covert nuclear facility.

Blame the president for all the tumult, at least partly. The Obama doctrine — a.k.a. the “anything but Bush” approach — relied on international institutions and “soft power” diplomacy to solve our most fundamental foreign-policy challenges.

It was a lovely doctrine. But then Obama discovered a harsh truth: Reality bites. Faced with real-world foreign-policy messes — from GITMO to deadlines in Afghanistan — the president found himself backtracking into a “Bush-lite” foreign policy.

Now Pyongyang emerges as the final nail in the coffin of the Obama doctrine.

When North Korea stepped on the outstretched hands of friendship and negotiation, the White House found it had to reverse course and get tough. It had no choice. The North Koreans regard accommodation as weakness, not negotiation.

Admittedly, in practice Obama’s policy toward North Korea has been better than Bush’s, maybe a lot better. So Pyongyang is pushing back: raising a ruckus in hopes that Washington will back down and buy them off — again.

What makes them think they can still push America around? The message the White House is still sending to the rest of the world. While the Obama doctrine has fallen by the wayside in practice, its rhetoric remains alive and well.

That equivocal face offers Pyongyang and other restive regimes hope that America will be the pushover the Obama doctrine suggests. It’s hard for North Korea to take the commander-in-chief seriously when he chooses to slash 44 percent of the missile-defense interceptors meant to protect the U.S. homeland from Pyongyang’s missiles. A policy of minimalist missile defense looks pretty ridiculous to a hostile nation that announces, out of the blue, that it has built another massive nuclear facility while we were beating our shields into plowshares. Who know what else Pyongyang is hiding — or when it will tell us?

President Obama’s push to win lame-duck approval of the New START nuclear deal with Russia looks lame in the shadow of Pyongyang’s actions. Why focus on advancing a greatly flawed treaty that offers no advantages for protecting and defending the United States, while real threats like North Korea demand laser-like attention?

Obama has also been silent about proposals to gut defense spending in the name of balancing the budget. How can the president expect America’s enemies to take America seriously when accountant-strategists talk about closing our overseas bases and sharply reducing our ability to project power?

The president has done nothing to squelch talk of defense cuts. Secretary Gates has spoken up, but his voice has been overwhelmed by silence from the White House. To defend defense, to acknowledge that America needs a strong military, would fly in the face of the Obama doctrine of a peaceful world gained mostly through talk.

If the Northeast Asia, or the world in general, is not as calm as it used to be, part of the blame rests with the “nuanced” naivety of the Obama doctrine.

James Jay Carafano is a senior foreign policy analyst at the Heritage Foundation.

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Must-See Video on Term Limits

Rob Raffety of the Mercatus Center makes videos on the side, and this one is phenomenal. I’d never seen an interactive video before! It’s worth checking out each segment.

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Quantitative Easing II

The brouhaha over quantitative easing II (QE II) continues. The Fed plans to purchase over $600 billion of long-dated Treasury securities over a period ending in June 2011 — a policy known as QE II. As is now well known, I am among the signatories of a letter criticizing the policy, and I’ve seen continued misunderstanding of our critique and intent. Let me take this opportunity to respond to a few key attacks.

1) Conservatives are politicizing the Fed.  I consider this the most ironic complaint of all. The letter makes a substantive critique of quantitative easing. It does not say “Republicans would run the Fed better” or “monetary policy decisions should be voted on by the Congress” or anything else that might be genuinely politicizing the Fed.

Instead, the issue became “political” the moment that the QE II defenders asserted that it was a political attack. It is disappointing that when presented with a serious critique by academics, think tank analysts, and market participants the immediate response is “it must be a conservative attack on the Fed.” Note that implicitly this also carries the message: “I’d never consider that conservatives have ideas or that I might learn something from them.”  So sad.

And, seriously, if you don’t want the Fed to be politicized, stop having the President and the Secretary of the Treasury defending it around the globe. Administrations should say nothing about the Fed when they disagree — or when they agree.

2) Conservatives want the Fed to ignore unemployment. Another variant — voiced by former Fed governor Ric Mishkin on CNBC — is that conservatives want the Fed to ignore the real economy. Nonsense. Again, the letter that started all of this says nothing of the sort. More generally, there have been some calls to re-think the Fed’s dual mandate in favor of an ECB-like inflation mandate. This is not the same thing as ignoring unemployment and the real economy. Instead, there is a rich body of research that suggests a simple inflation target would produce better economic performance, and thus be a more effective route to the same outcomes envisioned in the current mandate.

3) Bernanke has to do this because fiscal policy is paralyzed. The governance effectiveness of the next Congress remains to be seen, but it is important to recognize that the Democrats still control the White House and the Senate, and the White House always sets the agenda. In recent years, Democrats have engineered some dramatic fiscal policy triumphs with close votes — see health-care reform — they were just economically destructive. To my eye, the issue is not gridlock. It is the quality of the policy.

4) Stop complaining, this is just what the Fed did during the crisis only much smaller. The crisis was at its heart a financial panic and associated liquidity crisis. The Fed stepped in, purchased assets of all sorts in large quantities, and thus provided massive liquidity and lender-of-last-resort services to vast swaths of the financial services sector. That’s exactly what a central bank should do during a crisis.

Now, there is no crisis. There is no liquidity crunch. There is no desperate need for lender-of-last-resort services.  Instead QE II will merely move medium-to-long rates by 30 to 40 basis points (at best). That is a tiny benefit when compared to the costs.

5) The Fed needs to aggressively pre-empt deflation. This has been the most incoherent aspect of the discussion.  The Fed avers that inflation expectations are “well-anchored.” If so, good. But that also means that deflation expectations are well-anchored and there is no need for a pre-emptive policy strike. Alternatively, perhaps they are not so well-anchored. If so, the ultimate inflation fears highlighted in the letter are legitimate and real. Critics can’t have it both ways. 

The bottom line is simple. Fed policy is a fair subject for public debate. The Fed mandate is a fair subject for Congressional review. But ideas from both sides of the aisle deserve entry in the debate.

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Obama Grants Second Pardon

At 10:30 a.m., President Obama — after a suspense-filled, potentially carnivorous encounter with a turkey in the Rose Garden — will pardon the bird and its alternate in his usual magnanimity.

The 21-week-old, 45-pound fowl, named Apple and Cider respectively, got their monikers from California school children, who submitted over 200 suggestions to their state’s “Agriculture in the Classroom” program. The birdies were raised on Foster Farms Wellsford Ranch near Modesto, California under the caring eye of National Turkey Federation Chairman Yubert Envia.

Our fine-feathered friends’ time on the dole has only just begun. Once they receive their pardon, the birds will settle in at George Washington’s Mount Vernon Estate and Gardens, where they will strut their stuff for visitors through January 6. Afterward, they will pass the rest of their days in a “custom-made enclosure” at Mount Vernon’s livestock facility.

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Shut Up and Sing, Part MMMMDCLVIII

By consensus, The Addams Family, the musical, is the worst Broadway show in the history of Broadway shows. Did I know that before I bought tickets? Um, no. I know it now. I was beguiled by the show’s advertising campaign, which is wonderful. And who doesn’t love The Addams Family, as a brand or phenomenon?

I could entertain you for an hour saying what a dog the musical is, providing detail after gory detail (and when I say “gory,” it’s not in an Addams Family way). One of the shames is that the performers are terrific. Some of the best Broadway performers of today are in this show. Bebe Neuwirth, slinking and tango-ing around in a clingy black dress? Fantastic.

But you can’t make chicken salad out of . . .

What I really want to talk about, here in the Corner, is politics. Because, being a Broadway show, The Addams Family has politics. And those politics, of course, are left-wing. The most ignorant and dislikable character in the show is — surprise! — a right-winger, from Ohio. But, before the show’s end, he sees the light: and drops his real-estate business and his nasty capitalist ways.

In the course of these awful hours, there’s a little shot about health care. There’s a shot about the 2000 presidential election and the Electoral College. And then there’s this strange little blast about homeschooling. The character who is Wednesday Addams’s love interest mentions to her three names: Romeo, Tristan, and I forget the other one. And Wednesday says (I paraphrase), “You’ll have to cut me some slack. I don’t know who those people are. I was homeschooled.”

That could be an allusion to the famous peculiarity of the Addams family — of that particular home. But I doubt it. I think it was a blast at homeschooling at large. And, as I say, this is very strange. Honestly, whom would you expect to know more: the typical product of America’s public schools or the typical homeschooled kid? My money, for sure, would be on the much-resented, probably church-going homeschooled kid.

And I wish Broadway people could know one thing: We know you’re left-wing. There’s no question about it. Don’t worry that someone might suspect that one of you is conservative. You don’t have to establish left-wing street cred. Just go ahead and sing, and act, and dance (no matter what the material you have to work with).

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Happy Birthday, WFB

By John J. Miller      

In the last year and a half, I’ve recorded podcasts with three authors on WFB: Rick Brookhiser, Linda Bridges, and Lee Edwards. Have a listen.

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Frickn’ Lasers Might Do the Trick

By Jonah Goldberg      

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A DC Story

By Jonah Goldberg      

This is a heartbreaking story in today’s Washington Post. A teen charged with first degree murder barely a week ago murdered someone else, a college bound kid on his way to buy candy bars. How on earth is anybody charged with first degree murder on the street in time to murder somebody else by the end of the month? I thought there was no bail for first degree murder?

Alas, the Post offers no explanation — a form of journalistic malpractice that seems perfectly suited to the apparent legal malpractice reported in the story.

Correction! Man, I completely buttered my reading of this. Sorry, read too fast after a friend had also misread the story and passed it on to me. The alleged murderer was arrested for the first time after both crimes. My apologies.

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Remembering WFB

Our founder was born on this day in 1925. A nice retrospective on him by Larry Kudlow and friends:

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Full-Service NRO

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Creating an economic boom

Low taxes and open markets…today on Uncommon Knowledge, Prince Hans Adam sets forth Liechtenstein as an example for reviving a limping economy.

…whenever a government or party said we should have higher taxation, the people said ‘No, because,’ they thought, ‘we know much better what we can do with our money than the State does with our money.  So to create jobs and so on, we know much better.  We’ll give the money to somebody who is a good entrepreneur.’

Click Here

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Donald Trump For President?

By Jonah Goldberg      

I just listened to a phone interview with Donald Trump on Fox and Friends. Every four years it seems that Trump pretends to be running for president. He obviously loves the free media. Indeed, his presidential “feelers” usually coincide with a new book, or new line of ties, or new TV extravaganza. He’s not running for president. He’s got a cargo hold of baggage. More important, most of the time he talks about politics he’s a buffoon. This morning’s interview amounted to the shady New York developer school of foreign policy. His take on the Korean crisis: We should leverage the Korean crisis to screw the South Koreans on trade.

I will say, however, it would be fun to see a televised cabinet meeting where the president says to his Treasury secretary: “Unemployment is high, your projections were wrong, you’ve embarrassed me. You’re fired.”

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re: Opt Out Day

I’m travelling today. I confess I just want it to move and be safe. 

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re: Phyllis!

She was certainly one of the highlights of my trip, God bless her. 

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Fried Turkey

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Opt Out Day

By Jonah Goldberg      

I gotta say, I’m pretty skeptical about the idea. Among other concerns it could backfire terribly. If I was late for my flight, I wouldn’t be cheering-on the folks slowing things down.

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The Pope Plays It Right

By Jonah Goldberg      

My take on the Pope controversy — and my dad and conservatism.

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Nobody Puts Baby in a Corner

Not even Bristol Palin. Well, I hope she had the time of her life.

Play this video

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Rightwing Conspiracy Fails to Give Bristol DWTS Win

The Left can breathe a sigh of relief: Bristol Palin did not win Dancing with the Stars. In tonight’s season finale, Bristol placed third, with Disney star Kyle Massey winning second and Dirty Dancing actress Jennifer Grey winning the competition.

Bristol’s success on the show — consistently receiving enough votes to remain on another week, despite often having been given lowers scores for her dancing by the judges than the competitors who left before her — drew outrage from some, who complained that votes from tea partiers were excessively influencing the competition.

The controversy reached a fever pitch this week, with a Washington Post/ABC News poll showing that 54 percent of Americans thought that Palin was receiving votes from people wanting to show their support for Sarah Palin rather than because they thought Bristol’s dancing deserved it. “This could be a metaphor for things to come,” fretted Washington Post columnist Sally Quinn. “Sarah Palin is a force to be reckoned with and if her supporters can influence a TV show of 23 million viewers they can have more serious influence on elections.”

Bristol herself remained defiant, saying that winning DWTS “would mean a lot to me. … It would feel like a big middle finger to all the people out there that hate my mom and hate me!” But when she received the news that she had lost, she behaved graciously, saying, “There have been so many good memories. This has been such a life-changing experience and I had the time of my life.”

“Well, what a great ride!” tweeted Sarah Palin after the results were announced. “Competition is good for everyone. Be inspired by those who step up to challenges & improve w/each step; Congrats Jen!”

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Altschuler on the Recount in NY-1

From the Randy Altschuler campaign regarding the ongoing recount:

Senior Communications Advisor Rob Ryan said, “For the past week, our campaign, in conjunction with the incredibly dedicated workers at the Suffolk County Board of Elections headquarters in Yaphank, have been involved in a long but crucial process of counting over11,000 absentee and affidavit ballots. Today, the first part of the count of absentee and affidavit ballots was completed and shows Congressman Bishop with a 234 vote lead.

“More than 2,200 ballots have not been counted and remain to be examined. A large number of the Bishop campaign’s challenges are frivolous at best. Among these are nearly 100 Election Inspectors who worked on Election Day in the employ of the Suffolk County Board of Elections, along with scores of long-time legal voters who have every right to have their ballots counted. Additionally, 71 ballots belonging to men and women of our Armed Forces have not yet been counted.

“Over the Thanksgiving weekend our count and legal teams will be reviewing all pertinent information. We want to ensure that every legally cast ballot is fairly and accurately counted.

“In closing, we wish everyone a happy and wonderful Thanksgiving as we enjoy the many blessings our nation and its liberties have bestowed on us.”

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Phyllis!

Today, I have a little something called “Cruising Speed, Part I.” It’s the beginning of a cruise journal. A journal of what cruise? Well, the cruise — the one NR just concluded. For Part I, go here. In it, I have an item about Phyllis Schlafly, who was one of our guest speakers. And I thought I’d share a letter about her:

Jay,

. . . Back in the ’80s, she did a short newsy radio program called The Phyllis Schlafly Report. It was produced and recorded at the studio/agency where I was working, and I was assigned to be her producer. I even wrote her theme song! She came in about once a month and recorded a couple dozen three-minute shows.

I was impressed by how much she knew about so many things, and what a professional she was. This was, of course, at a time when she was being demonized in the press, much as Sarah Palin is today. The years I spent producing her program were significant in making me more politically aware, and swinging me way to the right. (Both recording engineers from those sessions also remain firm right-wingers, 20 years on.)

. . . We had virtually no “outtakes” from her sessions because she was just so darned good.

Can I tell you my favorite line from this letter? “Both recording engineers from those sessions also remain firm right-wingers, 20 years on.”

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