Paulson had some sort of intuitive moral sense that it was time for some bank to pay for its mistakes.

David Brooks writes in The New York Times:

In theory, Ben Bernanke, Henry Paulson and Tim Geithner were as well prepared as anyone for this sort of event. Bernanke had spent his life studying the Great Depression; Paulson had led the world’s most prestigious investment bank; Geithner had been involved in financial rescues in Asia and beyond.

Moreover, all of them were expecting some kind of crisis. They knew there had been a dangerous surge of debt.

And yet as the panic unfolded in 2007 and 2008, they continually underestimated its scope and implications. In July 2007, Bernanke estimated global losses from the subprime mortgages and other loans of $50 billion to $100 billion. The losses turned out to be in the neighborhood of $4 trillion. In October of 2007, Bernanke said the banking system was healthy and doubted that the housing woes would destabilize it. He was wrong.

Their decision not to bail out Lehman Brothers was based on a complete misreading of the economic psychology. Paulson was sick of doing bailouts. He seems to have had some sort of intuitive moral sense that it was time for some bank to pay for its mistakes. Bernanke and Geithner went along, and none of them anticipated the meltdown that followed.

The beer summit: Only in America; only with a president like Obama (comment most definitely intended as a compliment). He started it; he finishes it.

Harvard professor Henry Louis Gates, Vice President Joseph R. Biden Jr., Cambridge Sgt. James Crowley and President Obama.

Photo from and an article in The New York Times.

The ingrats, Part III: U.S. Adviser’s Blunt Memo on Bush's Iraq War: Time ‘to Go Home’

This hawk is retreating on we started it, we must finish it.

And let's clarify "we." Bush and Cheney foolishly started it, billions of dollars ago, lying to American people in the process. Obama needs to prematurely shut it down, as bad as this is going to be for the region.

A 6-28-09 post entitled "The ingrats: Prime Minister Casting U.S. Withdrawal as Iraq Victory" read in part:

Prime Minister Nuri Kamal al-Maliki has taken to calling the withdrawal of American combat troops from Iraq’s cities by next Tuesday a “great victory,” a repulsion of foreign occupiers he compares to the rebellion against British troops in 1920.

Today The New York Times reports:

A senior American military adviser in Baghdad has concluded in an unusually blunt memo that Iraqi forces suffer from entrenched deficiencies but are now able to protect the Iraqi government, and that it is time “for the U.S. to declare victory and go home.”

The memo offers a look at tensions that emerged between Iraqi and American military officers at a sensitive moment when American combat troops met a June 30 deadline to withdraw from Iraq’s cities, the first step toward an advisory role. The Iraqi government’s forceful moves to assert authority have concerned some American officers, though senior American officials insisted that cooperation had improved.

Prepared by Col. Timothy R. Reese, an adviser to the Iraqi military’s Baghdad command, the memorandum details Iraqi military weaknesses in scathing language, including corruption, poor management and the inability to resist Shiite political pressure. Extending the American military presence beyond August 2010, he argues, will do little to improve the Iraqis’ military performance while fueling growing resentment of Americans.

“As the old saying goes, ‘Guests, like fish, begin to smell after three days,’ ” Colonel Reese wrote. “Since the signing of the 2009 Security Agreement, we are guests in Iraq, and after six years in Iraq, we now smell bad to the Iraqi nose.”

Those conclusions are not shared by the senior American commander in Iraq, Gen. Ray Odierno, and his recommendation for an accelerated troop withdrawal is at odds with the timetable approved by President Obama.

A spokeswoman for General Odierno said that the memo did not reflect the official stance of the United States military and was not intended for a broad audience . . . .

Senators Close to Health Accord -- This is big news. The Senate Finance Committee is where the substance of the health bill will be determined.

The Washington Post reports that there is an emerging consensus among a bipartisan group of senators is poised to shift the dynamic in the congressional debate over health-care reform and could lead to a final product that sheds many of the priorities that President Obama has emphasized and that have drawn GOP attacks.

According to the Post:

An emerging consensus among a bipartisan group of senators is poised to shift the dynamic in the congressional debate over health-care reform and could lead to a final product that sheds many of the priorities that President Obama has emphasized and that have drawn GOP attacks.

The finance panel's legislation is expected to include incentives for employers to provide health insurance for their workers, rather than a more punitive coverage mandate. The committee is also likely to endorse narrowly targeted tax increases, rejecting a controversial tax surcharge on wealthy households that the House adopted and limits on deductions for upper-income taxpayers that Obama is seeking.

GOP negotiators rejected from the outset the kind of government-run insurance plan that Obama and most Democrats are pushing for in an attempt to inject the health-insurance market with pricing competition. Instead, the committee would create coverage cooperatives modeled after rural electricity providers.

Sarah Grabs the Grievance Grab Bag From Hillary

Maureen Dowd writes in The New York Times:

The woman who was prematurely counted in is out. And the woman who was prematurely counted out is in.

Goodbye, Sarah. Hello, Hillary.

In their vivid twin performances Sunday — Hillary on “Meet the Press” in Washington and Sarah at her farewell picnic in Fairbanks — two of the most celebrated and polarizing women in American political history offered a fascinating contrast.

Hillary, who so often in the past came across as aggrieved, paranoid and press-loathing, was confident and comfortable in her role as top diplomat, discussing the world with mastery and shrugging off suggestions that she has been disappeared by her former rival, the president.

Sarah, who was once a blazingly confident media darling, came across as aggrieved, paranoid and press-loathing in her new role as bizarre babe-at-large, a Nixon with hair extensions ranting about “American apologetics,” which sounds like a cross between apologists and Dianetics.

Sarah once criticized Hillary for being a whiny presidential contender, arguing that women who want “to progress this country” should not complain about being under a “sharper microscope,” but instead should just work harder to prove themselves capable. Now Sarah is a whiny presidential contender, complaining about the sharper microscope that women wanting to progress this country are under and rejecting advice to work harder to prove herself capable.

The Alaskan who shot to stardom a year ago as the tough embodiment of Diana the Huntress has now stepped down as governor and morphed into what the Republicans always caricatured Hillary as — preachy, screechy and angry.

And Hillary, who is at long last in a job that she earned on her own merits, has lost that irritating question mark she used to carry around above her head like a thunder cloud: What is Hillary owed because of what she gave up, and went through, for Bill?

During the campaign, Hillary got in trouble for pretending to be more than she was, for bragging about dodging bullets in Bosnia and making peace in Northern Ireland. Just so, Sarah got in trouble for pretending to be knowledgeable about foreign affairs just because she lived across the Bering Strait from Russia.

But now Hillary does not have to tell stretchers. She’s fully qualified for her job and doesn’t sound defensive. Now Sarah has taken up Hillary’s old habit of keeping grudges and playing the victim and blaming the press for her own mistakes in judgment and gaffes.

If Sarah’s problem on the trail was that she knew too little, Hillary’s was that she knew too much. Before her misty turn in New Hampshire, Hillary’s wonkiness got in the way of her ability to make people comfortable.

Sarah, lacking Hillary’s cerebral side, has decided to wing it, Quayle-style, and go only for the visceral. That’s why she now sounds like a demagogue, embodying grievances and playing to people’s worst impulses.

Hillary’s radiant robustness, on the other hand, even with a sore elbow, makes the dictators in Iran and North Korea we’re so worried about seem like frail, little creatures.

Obama advisers say privately that the president truly respects the woman he ran against, and that they have a good relationship, so good it has even surprised Hillary. Certainly, she doesn’t have to worry that this president’s gaze is going to drift over her shoulder to some pretty thing behind her. In this White House, Barack Obama is the pretty thing who is taken with Hillary’s serious, smartest-girl-at-Wellesley aura. In a funny way, he’s the man of her dreams.

His support of her has allowed her to keep her paranoia in check — even with Richard Holbrooke and Joe Biden biting off parts of her portfolio.

Just to make sure it stays that way, Obama advisers told Hillary that she could not bring on board Sidney Blumenthal, her former aide de camp nicknamed G.K., “Grassy Knoll,” for his tendency to stoke her grievances.

In her cuckoo speech in Fairbanks, Sarah warned Alaskans to “be wary of accepting government largess. It doesn’t come free.” Funny coming from a woman who charged the Alaskan taxpayers every time she worked from Wasilla.

She also went after that old conservative villain Hollywood, saying, “They use these delicate, tiny, very talented celebrity starlets” for “their anti-Second Amendment causes.”

Sarah seems happily oblivious that she benefited from Hollywood casting techniques. Just as movie directors have beautiful young actresses playing nuclear physicists and Harvard professors, knowing the fusion of sex appeal and a heavyweight profession will excite, the novelty of a beautiful former beauty queen and TV reporter cast in a powerful role that has featured dour, gray old men like Dick Cheney was thrilling. At first.

As McCain pal and Republican strategist Mike Murphy so sagely observed recently: “If Sarah Palin looked like Golda Meir, would we even be talking about her today?”

Sarah should follow her own advice to Hillary and work harder to be capable. Until then, she’s all cage, no bird.

Uh-oh for speed on health care legislation. Constituents worried that their Medicare benefits might be cut to help finance coverage for the uninsured.

From The New York Times:

President Obama tried Tuesday to sell his health care plan to older Americans, as members of Congress said they were deluged with calls from constituents worried that their Medicare benefits might be cut to help finance coverage for the uninsured.

The outpouring of concern over Medicare came as House Democratic leaders tried to assuage the concerns of fiscally conservative House Democrats who have held up action on health care legislation while they press for changes to reduce the cost of the bill, estimated at $1 trillion over 10 years.

Sotomayor clears Judiciary Committee: Sen. Lindsey Graham says yes; Sen. Orrin Hatch says no. I was impressed by the 1st; do not understand the 2nd.

I have always been impressed with Senator Lindsey Graham of South Carolina for being evenhanded and practical. He would have made a better candidate for president in 2008 than Sen. John McCain, and would have chosen a different running mate.

The negative vote against that surprised me was Sen. Hatch of Utah.

Today The New York Times reports:

President Obama’s nominee to the Supreme Court, Judge Sonia Sotomayor, moved closer to taking her seat on Tuesday as the Senate Judiciary Committee overwhelmingly approved her nomination and sent it on to the full Senate.

The committee’s vote was 13 to 6, with Senator Lindsey Graham of South Carolina the only Republican joining the panel’s 12 Democrats in voting for the nomination.

Among the Republicans who voted against Judge Sotomayor were two who came from states with large Hispanic voting populations. Another two, Senators Orrin G. Hatch of Utah and Charles E. Grassley of Iowa, are committee veterans who had never voted against a nominee selected by a Democratic president.

Jeannette Jamieson: Good luck with your present problems, and a belated thank you for your many years of dedicated service. You are a good Democrat.

I was saddened but not surprised to read in the ajc's Gold Dome Live
that former Georgia state Rep. Jeannette Jamieson (D-Toccoa) was indicted Monday for state income tax evasion.

Her tax problems led to her defeat last year. Until then, she had fervently and effectively served her constituents in the General Assembly since 1985.

I understand Russia being confused. Was it Biden's big mouth again or a good cop-bad cop move? Regardless, Biden remarks weren't smart foreign policy.

A 7-25-09 post was entitled "Whoa! Were all of these remarks cleared with the boss? -- Biden Says Weakened Russia Will Bend to U.S."

Two days later the following appears in The Wall Street Journal:

U.S. Secretary of State Hillary Clinton said the Obama administration considered Russia a "great power" and wanted it to be a strong and prosperous country, in an apparent effort to reassure Moscow that the White House remains committed to efforts to "reset" bilateral relations.

Mrs. Clinton made the remarks in response to a question about Vice President Joe Biden's suggestion, during a Wall Street Journal interview published on Saturday, that Russia's weakening economy was likely to make it more amenable to cooperate with the West on national security issues.

"We view Russia as a great power," Mrs. Clinton said on NBC News's "Meet the Press" on Sunday. "Every country faces challenges. We have our challenges, Russia has their challenges. There are certain issues that Russia has to deal with on its own."

She said the Obama administration didn't believe it has an upper hand in its ties with Moscow, and noted that Mr. Biden had been the first senior administration member to publicly call for a "reset" in the two countries' relationship, in an address in Munich, Germany, in February.

Mr. Biden's comments to the Journal raised concerns in Moscow, which questioned whether he was speaking for the U.S. government. "The question is: Who is shaping the U.S. foreign policy -- the president or the respectable members of his team?" asked Russian presidential aide Sergei Prikhodko. He said it was "perplexing" that Mr. Biden delivered the comments just as the U.S. was talking about a reset in relations.

Sen. Jim Bunning (R-Ky.) Will Not Seek Third Term

The Washington Post reports that Sen. Jim Bunning (R-Ky.) announced Monday that he would not run for a third term in 2010, unhappily bowing to pressure from Republican leaders who had urged him to retire.

I am very disappointed in Rep. Hank Johnson for interjecting race into the current debate about health care. This was not smart Rep. Johnson.

It's been some five years since, after serving less than two years in the U.S. House of Representatives after beating Cynthia McKinney, Denise Majette shocked her Fourth Congressional District constituents and the state Democratic Party leadership when she announced that God had told her to run for the U.S. Senate.

That was in 2004. McKinney of course ran that year and recaptured her seat, then nearly lost the Democratic primary in July 2006, and did lose in the August runoff to Hank Johnson.

Despite serious personal problems involving his bad credit and close ties to developers, the former DeKalb commissioner had one thing going for him. He was running against the loose-cannon McKinney after her recent encounter with recent encounter with a Capitol policeman seeking to identify her.

A 5-19-08 post noted:

Last year, of Georgia’s 13 members of the U.S. Congress, only Hank Johnson of the Fourth District had the good fortune of not having to wage a campaign in 2008. The first term Democrat was the only person to qualify for primary or general election races.

That was just great with me. However, at the present I am not so pleased about what the Congressman recently said during a closed-door meeting of Democrats. In an article in The Wall Street Journal about how Blue Dog Democrats could delay a health-care vote until after Labor Day, with the fiscally conservative group wanting to make sure the plan isn't too expensive for small businesses, it is noted:

The Blue Dog Coalition came together after the Democrats' loss of Congress in 1994. Some representatives, mainly Southerners, believed the party's losses stemmed from a drift to the left. They decided to take a name that played on the old term "yellow dog," Southern Democrats who were ostensibly so loyal they would vote for a yellow dog if it ran on the party's ticket.

The Blue Dogs' resistance has angered other Democrats. At a heated closed-door meeting of House Democrats last week, Rep. Hank Johnson, a Georgia Democrat and member of the Congressional Black Caucus, complained about the Blue Dogs holding up the health bill in Energy and Commerce Committee, noting pointedly that all are white men.

Whew and Yes! (I have been worried about this case.) -- Jury Rules for Hospital That Deported Patient

From The New York Times:

In a benchmark case dealing with the obligations of hospitals toward uninsured illegal immigrants, a jury in Stuart, Fla., decided Monday that Martin Memorial Medical Center did not act unreasonably when it chartered a plane and repatriated a severely brain-injured Guatemalan patient against the will of his guardian.

The case of Mr. Jiménez, which was featured in an in-depth report in The New York Times last summer, is believed to be the first to test the legality of patient repatriations and to judge the liability of the hospitals that undertake them. Such repatriations are a relatively rare but widespread practice, especially in cases involving catastrophic injuries or serious illnesses, where patients need continuing care that is not covered by Medicaid because of their immigration status.

[It was the subject of a 8-3-08 post entitled "Fascinating: Immigrants Deported by U.S. Hospitals -- Either do medical repatriations or 'we're unable to provide adequate care for our own citizens."]

Cracker Squire to start legal fund -- Start-Up Plans to Make Journalism Pirates Pay Up

From The New York Times:

Online piracy isn’t just a problem for music companies; it hurts newspapers and magazines as well. News organizations are now trying to do something about the many Web sites that simply copy articles and paste them into their own pages.

Last week The Associated Press said it would put warnings against copyright violation on its articles and digitally track illegitimate uses. It didn’t say what it would do to violators, but it has been quick to use legal means to block reuse of its material.

A twofer from Dick Yarbrough: (1) Perception is sad reality for Governor Perdue; & (2) From the Cracker Squire Archives about some Democrats he likes.

Unfortunately for me, I have never met Dick Yarbrough. I am familiar with his extremely successful journey through life so far and his accomplishments. They are many.

Do we see eye-to-eye on everything? No, but unlike the result when party affiliaton dictates so much as with the late Sen. Jesse Helms, former Rep. Tom "The Hammer" DeLay, and former Speaker of the House Newt Gingrich (whose intellect, unlike his tactics, I respect), being in another party does not mean someone cannot be my friend.

Besides, I admire Dick Yarbrough's writing, his style, his ability to say what I wish I had said.

One of these days I do hope that our paths will cross.

One of my readers and friends (and my mistake for not listing in the reverse order) who is wise beyond her years once informed me that "Dick Yarbrough is a great source for understanding southern culture. I'm not saying you have to agree with him, but understanding him is key."

Today, we have two columns by Dick, one current, one written during the 2004 primary season.

The first is a 7-19-09 column about Gov. Perdue in which Dick Yarbrough writes:

There is a saying in politics that perception is reality, and my perception of Gov. Sonny Perdue is that he hasn't exactly shot out the lights in his two terms as Georgia's chief executive.

There are the publicity stunts too numerous - and too embarrassing - to recount. There's the touting of his Go Fish Georgia program, billed as an economic development initiative in the middle of one of the worst economic periods - not to mention drought - in decades. And there are some eyebrow-raising land deals the governor still might be trying to explain if our state's media had an aggressive bone in their investigative body.

Perdue's accomplishments likely will be less remembered than the silly photo ops that have drained the governor's office of its dignity, his love affair with Go Fish Georgia - a marginal economic development program at best - and a "let 'em eat cake" attitude toward his sweet land deals.

Perdue's good works have been overshadowed by an insensitivity to public perception that sometimes has bordered on astounding. And he has forgotten that perception is reality.
_______________

Next, from a 12-14-04 post that is a 6-23-04 column:

A salute to some live Democrats

Dick Yarbrough
June 2004

A member of the Loyal Opposition - meaning those who don't agree with anything I say, which includes about half of the inhabited Earth - confided to a friend that "the only Democrats Dick Yarbrough likes are dead Democrats." Not true. There are a lot of live Democrats I like.

Take Zell Miller, for example. I like him. He says what is on his mind. He always has. The media have a major case of the tut-tuts because he isn't saying what they want to hear. As if Zell Miller gives a quart of mule spit what the media thinks. I like that.

Sam Nunn is my favorite Democrat of all time. He is smart as a whip and was a pleasure to work with. We have had some great senators from Georgia, but none better than Sam Nunn.

I like former Gov. Joe Frank Harris. We were fraternity brothers at the University of Georgia. He was a good guy then and he is a good guy now. Harris has as little ego as any elected official who ever lived.

I like George Busbee, a hard-working governor with a great sense of humor.

I like Carl Sanders and Ernest Vandiver. Both came along at just the right time, when Georgia was struggling with civil rights issues, and they got us through that tough period in better shape than Alabama or Mississippi.

I like Roy Barnes. He lost an election he should have won, but he has been graceful in defeat. I particularly like the fact that he spent six months doing legal aid work.

I like Terry Coleman, the Democratic speaker of the House, and DuBose Porter, the speaker pro tem. I like former Majority Leader Larry Walker. Same for former Lt. Gov. Pierre Howard. I like Secretary of State Cathy Cox and her predecessor, Lewis Massey, and I wish Massey would run for public office again.

Now, here are some live Democrats I don't like. I don't like Jimmy Carter's perpetual grandstanding. He was out of his league during his one-term presidency, yet former presidents didn't publicly undercut him as he has President Bush. One thing Carter's apologists don't mention is the mean-spirited gubernatorial campaign he ran against Carl Sanders in 1970, when he tried to out-Wallace George Wallace. Don't believe me? Look it up. Jimmy Carter either didn't mean what he said during that campaign, or he didn't have the courage of his convictions when he was elected. Either way, I don't like that.

Democrat Max Cleland had an unfortunate accident in Vietnam when somebody dropped a grenade and he lost both legs and an arm. He has put his life back together and I greatly admire him for that. I didn't admire him as a senator. He spent more time cuddling up to the liberal wing of the Democratic Party than he did representing the people of Georgia. When Cleland was Georgia's secretary of state, he always spoke to me. When he was elected senator, he acted as if he didn't know who I was. I didn't like that.

I don't like Ted Kennedy, because he caused the death of an innocent young woman and then was a coward about admitting what he had done. Today, he waddles into the Senate and sits in moral judgment of other people. God will get him for that. I don't like former Vermont Gov. Howard Dean, because he always looks as though he is about to come unhinged. I don't like people who scare me.

There are a whole bunch of live Democrats that I like and some that I don't. I hope this revelation totally befuddles the Loyal Opposition. I would like that.

And I note again that this is a 2004 column. Since it was written two of our former governors are no longer with us, namely Gov. Ernest Vardiver (whose daughter Jane Kidd is now Chair of our party) and Gov. George Busbee.

Good ad Governor.

Federal Deportation Policy

From The New York Times:

The Obama administration is vastly expanding a federal effort begun under President George W. Bush to identify and deport illegal immigrants held in local jails.

Under the effort, known as Secure Communities, local officials check every set of fingerprints taken at jails against those of people who have had a brush with federal immigration authorities; in the past, they could check only for a criminal history in the F.B.I. database. If a person turns out to be an illegal immigrant, the case is turned over to Immigration and Customs Enforcement for possible deportation proceedings in addition to the criminal charges.

The Obama administration considers the trial program successful enough to pledge $195 million over the next year to expand the effort with an eye toward establishing it nationwide by late 2012, when it is projected to cost about $1 billion a year. It is now under way in 70 counties across the country, including those containing the cities of San Diego, Phoenix, Dallas, Miami and Durham, N.C.

Federal officials say that while they are pleased with their new ability to identify illegal immigrants, they do not have enough agents to deport all of those identified. Over all, only a third of those identified in the first seven months of the program as foreign nationals — which includes people with visas and temporary residence cards as well as illegal immigrants — have been deported.

Antitrust Chief Hits Resistance in Crackdown

One of Pogo's most famous lines was "We have met the enemy . . . and he is us." (Pogo was a comic strip, and Pogo and his friends lived in the Okefenokee Swamp; Pogo's creator was Walt Kelly, an animator who worked with Walt Disney. A likeness of Pogo is on the water tower in downtown Waycross.)

From The New York Times:

President Obama’s top antitrust official and some senior Democratic lawmakers are preparing to rein in a host of major industries, including airline and railroad giants, moving so aggressively that they are finding some resistance from officials within the administration.

The more aggressive antitrust policy was described in interviews with officials at the White House, the Justice Department, other agencies and Congress. It is a major policy reversal from the Bush administration, which did not prosecute cases in which some dominant companies engaged in potentially anticompetitive behavior, often because those officials maintained such behavior was not harmful to consumers.

Democrats have spent years trying to gain the support of businesses, and the policy changes under way may have long-term political implications for their party. Some companies would like to see more aggressive antitrust enforcement against their rivals, while others could be hurt by it.

In some cases, though, the new approach is being opposed by administration officials. Some fear that the crackdown is coming at a bad time, as corporate America reels from the recession. Other officials embrace the Bush administration’s view that larger companies and industry alliances can provide consumer benefits by making their businesses more efficient.

Tough times require tough decisions, Part III: From the Cracker Squire Archives -- Time to remove the sales tax exemption on groceries.

The past legislative session the subject of this post did not get the reception it deserved. It was in a bill introduced by Rep. Chuck Sims (my district's representative), and although it did not pass, I continue to predict that in time it will be seriously considered. This coming legislative session may be that time.

According to the ajc's Gold Dome Live on March 10, 2009:

Just a few days after the House Ways & Means Committee passed a bill to put the state sales tax back on groceries, a House source said the measure isn’t likely to get to the House floor for a vote.

The AJC reported Tuesday that House leaders said they were planning to put the bill up for a vote Thursday.

But once the idea hit the media, Republican blogs exploded in opposition to the idea of putting the state’s 4 percent sales tax back on groceries. It was removed by a Democrat-run General Assembly in the mid-to-late 1990s.

If you or a friend, neighbor, family member or acquaintance are one of Georgia's 128,000 teachers or other 100,000 who work for the state, your employment and most definitely your compensation may be affected as evidenced by action taken this past Tuesday.

And just as obviously, the educational services we are able to provide to our 2 million students and the assistance available to the 1.5 million receiving health care could be impacted, as well as the ability of the state to continue providing basic services at levels we take for granted.

This is a reposting of a 10-09-04 post entitled "The time is now; the need is acute; sponsors solicited and welcome -- In 2005 the Gen. Assembly needs to remove the sales tax exemption on groceries." In it I discuss the nuances of this exemption and make my case for doing away with it entirely.

And prior to doing so, I note, as alluded to in the below post, that I am a Democrat, and consider myself a good Democrat. Thus I know the arguments for and against a regressive sales tax.

(And for my fellow Democrats who might want to evict me from the party for heresy for even discussing killing the sales tax exemption on groceries, much less advocating it, I find solace and can safely take refuge in having observed one thing firsthand as a member of the State Committee Member. Like me or not, like my idea or not, you can’t kick me out of the party, can they Zell? But if you want me off the State Committee for having and expressing my ideas, that is another thing. Bring it to the proper officials and if it is their desire, I will resign.)

The 2004 post is, in part, as follows:

A shopping trip to learn the law:

Let’s go shopping in any Georgia county with a 1% SPLOST in effect, whether the local option sales tax is for your county, a municipality or the school district. I’ll make up the "grocery list."

If I asked you to note which items on my grocery list were subject to at least some sales tax, many of you would not score 100 I feel confident. But first let me make it a bit easier to get a higher score.

As you may or may not be aware, Georgia’s sales tax exemption for "food and beverages" does not apply to any 1% SPLOST. Put another way, Georgia’s statutory and constitutional provisions dealing with 1% SPLOST’s -- whether for counties, cities or school districts -- provide that the 1% tax imposed is applicable to the sale of food and beverages.

Thus I will simplify the situation; let’s just go shopping in a county without a 1% SPLOST in effect. As the following will demonstrate, the exemption for "food and beverages" is not as simple as it might appear.

The following would be subject to the regular sales tax, even though I am buying them at a grocery store:

Toiletries, napkins, laundry detergents, vitamins, pet food, alcohol, tobacco products, food which is hot at the point of sale (thus food which is cooked on-premises and kept warm will not be exempt, such as a grocery stores selling hot roasted chicken from a rotisserie), food sold in grocery stores to be eaten in the store (such as ice cream or soft drinks sold in open containers or through vending machines), etc.

The following would be exempt from the regular sales tax:

Staple food products for home consumption such as meat, poultry, fish, bread, cereals, milk, soft drinks, and infant formulas packaged for home consumption.

The Department of Revenue ("DOR") regulations say the purpose of the "food and beverages" exemption is to exempt from sales tax food purchased to be taken home, prepared and eaten. The general rule is that eligible food, sold to be eaten off-premises, qualifies for the exemption. Food sold to be eaten on-premises is not exempt.

Therefore, Georgia's regulations center on the type of food being sold and where the food is consumed.

Is this logical? It sounds likes governmental bureaucracy reins doesn’t it. It gets better.

To be understand the following, realize that eligible food (that is, food exempt from sales tax) is any food item which could be purchased with federal food stamps or WIC coupons.

And this is probably a good point to note that federal law conditions state participation in the food stamp program on the state exempting from sales taxes, purchases made with food stamps. For this reason -- generally speaking -- purchases made with food stamps have always been and will remain exempt from sales taxes.

Getting back to bureaucracy. The DOR has classified food dealers into three categories. The first category is food dealers or retailers which accept food stamps. The second category is food dealers which do not accept food stamps, but whose sales of eligible food comprise at least 50% staple items. The third category is for all other dealers including dealers which also serve the food on-premises.

Dealers in the first category (those who accept food stamps) have to keep separate records of eligible and ineligible food sales, but all sales of eligible foods will be presumed to be for off-premises consumption.

Dealers in the second category (those who do not accept food stamps) must show that 50% of their eligible food sales comprise staple products (that is, meats, breads, cereals, vegetables and dairy products). Once the retailer shows that 50% of eligible sales consist of staple products, then all eligible sales (as identified by the dealer) will be presumed to be for off-premises consumption.

Dealers in the first category, especially those with facilities for eating on-premises whose mix of eligible food sales do not fit into the second category, have the burden of maintaining records to show that the sale was for off-premises consumption. The DOR presumes that the sale was for on-premises consumption, and thus subject to the full tax unless the dealer can provide records to the contrary (that is, an item is sold "to go").

As an example, a grocery store sale of a dozen doughnuts will be presumed to be for off-premises consumption. A convenience store sale of a dozen doughnuts will likewise be presumed for off-premises consumption, but only if 50% of the store's eligible sales consist of staple products. A doughnut shop sale of a dozen doughnuts will be presumed for on-premises consumption unless the retailer keeps records indicating that the sale was for off-premises consumption.

I did not start out to make this the "food and beverages exemption 101," but you get the point. As stated above, the exemption for "food and beverages" is not as simple as it might appear.

Georgia’s current [2004] budget crisis:

My solution is an idea whose time has come, whether we like it or not. I do not see any other practical alternatives to the financial situation of our state that could pass without undue partisan quibbling. And for sure I have not heard about any being floated.

It is not one that I think should be politicized.

This posting is not exhaustive, but is intended to generate discussion and get the ball rolling, and the sooner the better.

A brief history of Georgia’s sales tax and the exemption for groceries:

Over a half century ago then-Gov. Herman Talmadge had the legislature enact a 3% sales tax to finance across-the-board improvements in schools, highways and welfare and public health services. Along with the legislation came many exemptions, some from the outset and others such as for prescription drugs with subsequent legislation.

The general sales tax is an important source of revenue for the state, representing I think I have read some 35% or more of all state government tax revenue. I claim no accuracy whatsoever on this figure, but the role of this tax is significant, very significant.

In the nineties then-Gov. Zell Miller began a move toward tax relief by persuading the legislature to remove the sales tax on groceries. The legislation exempting the sale of groceries from sales taxes was phased in over several years, and was complete in 1998.

Thereafter Gov. Roy Barnes came along in 1999, and in the same spirit of tax relief for the masses, lowered property taxes and made it more difficult for local governments and school districts to raise them.

Throughout all of these administrations, even though we have needed to improve and go forward with ambitious transportation improvement plans, an increase in our state’s motor fuel tax -- one of the lowest motor fuel taxes in the nation and much of any increase which would be borne by non-Georgians -- has been on the untouchable list.

(I have reason to believe that this logical tax increase would have become a reality had Gov. Barnes been elected to a second term. Maybe not real early in his term with the economy down and gas prices on the rise, but during his second term nonetheless.)

With Democrat Gov. Miller having lowered sales taxes by exempting groceries, Democrat Gov. Barnes having lowered property taxes, what in the world would Republican Perdue do in the way of proposing his own tax reductions.

As we remember, rather than continuing to please the masses, Gov. Perdue temporarily suffered amnesia and forgot them that brung him to the Gold Dome. Rather than cutting, his first major proposal involved raising taxes. And it wasn’t just going to be to get King Roy back by raising the property taxes that Barnes had cut.

The new governor also wanted to increase revenue for the state by reducing the consumption of taxable evil products.

(Say what Gov.? Easy, says he; I propose increasing taxes on cigarettes and liquor as a way to help balance the state budget and, at the same time, dissuade Georgians from buying alcohol and tobacco.)

Although we in South Georgia sure didn’t appreciate the Governor adding taxes to our cash crop tobacco as if our farmers didn’t already have problems enough from Washington, a compromise in Perdue’s proposed tax increase ultimately did prevail.

. . . .

Folks, the reality of the state of the state is that now health care and education costs make up 75% of the state budget, and are rising faster than tax collections, the latter being up somewhat as of late with the state’s improving economy.

Further education cuts, which are being passed to local school districts, will result in property tax increases. As a school board attorney watching such things, I have observed a shift where taxpayers seem to approve of such things as textbooks, computers and buses that were formerly financed by maintenance and operation funds (read "property taxes"), now routinely being included in SPLOST referendums, along with, of course, new or upgraded school facilities.

. . . .

Senator Everett Dirksen uttered his famous words about the U.S. government’s spending some thirty or so years ago: "A billion here, a billion there, and pretty soon you’re talking real money." The same things applies in Georgia when we are talking millions.

I am a Democrat, and consider myself a good Democrat . . . . Thus I know the arguments for and against a regressive sales tax.

(And for those of you wanting to evict me from the party for heresy for even discussing killing the sales tax exemption on groceries, much less advocating it, I find solace and can safely take refuge in having observed one thing. Like me or not, like my idea or not, you can’t kick me out of the party, can they Zell?)

I have reviewed which states do and do not exempt groceries for home consumption by reviewing a study prepared by the Center on Budget and Policy Priorities.

So how much money are we talking about here if we killed the exemption that I wish Gov. Miller never had pioneered when times we better?

I am not sure. I saw a DOR press release in 1998 when the final 1 cent was going off. It said the complete elimination of state sales tax on groceries was estimated to be in the range of $550 million.

I have heard that now the figure may be around $865 million. For me the amount is not that important. This exemption is one that represents a situation where it is best to turn back the hands of time.

Tough times require tough decisions, Part II: Three ill-conceived tax ideas, two of have or will fail and the third now being law.

The previous post entitled concluded:

"If state revenues do not start to normalize by next year, the 2011 budget will force some very difficult choices. Raising taxes would certainly be the last option you would want to pursue in a recession."

I have been a school board attorney for many years, and folks, in the school business, as in city, county and state government, we are close if not past the point where we are just cutting fat.

We are fixing to witness the cutting of muscle and bone, just as is going to be experienced in California's dysfunctional situation of making it almost impossible to raise taxes (see 7-22-09 post entitled "From the Tarnished Golden State, Lessons for Washington -- The state that can't").

The Ox wants to get rid of the state income tax. See 4-26-09 post entitled "Oxendine wants to get rid of State income tax".

This is dumb. As that post noted:

Statements made during the interview by state Insurance Commissioner John Oxendine on state taxes most assuredly will come back to bite him in the rear as the campaign kicks into full swing.

Perhaps ignoring the exit of Lt. Gov. Casey Cagle from the race from governor and wanting to one-up Cagel, Oxendine called for eliminating not just the corporate income tax, but all income taxes.

Cagel, you recall, during this past legislative session sought to end Georgia's corporate income tax, which in better times has helped fill the state's coffers with more than $700 million each year. Cagel said wiping out this tax would help Georgia stay competitive with neighboring states.

That post goes on to provide:

This position was the subject of a 2-22-09 post entitled "This is irresponsible. Ga. governments -- the state, counties, cities & school districts -- needs more revenue, not less. - Corporate tax breaks urged," that provided in part:

"At this particular time this attempt is irresponsible. The State of Georgia, cities, counties and school districts need more tax revenues, not less.

"I have been the attorney for the Douglas-Coffee County Economic Development Authority for years, and our success in recruiting industry is the envy of many Georgia cities and counties. Never has our corporate income tax, to my knowledge, even been brought up as a problem or consideration by any company we have recruited."

And just as the Ox had a dumb idea -- and even though in the Other Georgia many dread receiving their property tax bills more paying income taxes -- House Speaker Glenn Richardson's plan for swapping property taxes for an enhanced state sales tax was just as ill-conceived as it was popular with counties, cities and school districts which joined forces to oppose it.

We witnessed the plan crash and burn despite a carefully orchestrated statewide series of public hearings designed to promote the concept.

And as noted in my 4-26-09 post linked above:

And, as noted in a 7-19-08 post entitled "The Speaker's plan for swapping property taxes for an enhanced state sales tax might have been a fiscal disaster this year if it had been in place":

James Salzer writes in the ajc's Political Insider [this was during the absence of Jim Galloway]:

The original plan proposed by House Speaker Glenn Richardson last year - swapping property taxes for an enhanced state sales tax - might have been a fiscal disaster this year if it had been in place, according to critics of the plan.

Sales tax collections were down 8.6 percent during the final quarter of fiscal 2008 compared with the same period in 2007. Sales taxes are currently the second most important source of revenue for the state, just below income taxes. With the economy slowing, sales have fallen faster than income.

That is exactly the scenario that critics of Richardson’s plan warned of.

That was 2008. 2009 would have been a fiscal disaster.

A third ill-conceived tax idea is now law. In early May Governor Perdue signed House Bill 233, freezing property tax values at 2008 assessments for three years, effective back to January 1, 2009, in other words, effective immediately.

Pickens County Chief Tax Appraiser Roy Dobbs has been critical of this legislation, noting in the Pickens County Progress:

[T]he bill will ultimately not lower property taxes as touted by its supporters.

“Tax bills are dictated by budgets.”

Dobbs said especially in a year when the state is cutting back allocations to counties for road paving, the idea of freezing values was poorly thought out. He said they are virtually guaranteeing that local government will be forced to raise tax rates to cover the loss from frozen values and fewer state grants.

“Property taxes are not being frozen,” he said. “It’s only the assesments.”

Dobbs noted that the initial legislation calls for the freeze of values at 2008 levels to last for three years. New construction or sales will still prompt a re-assessment.

Under House Bill 233, generally speaking, the only exceptions to an increase from the 2008 assessment are a "manifest, factual error or omission in the valuation of the property." While residential (and most commercial) properties have gone down rather than up during the current recession, this legislation could hamper needed reassessments.

California and Florida went down this route, and it did not work. Maybe our legislators will see the error of their ways.

So if we are in a situation where the State of Georgia, cities, counties and school districts need more tax revenues, not less, is there a fair source of additional revenue? I think so, and lies in examining what should be exempt from the state sales tax.

This is the topic of "Tough times require tough decisions, Part III," the post that follows.

Tough times require tough decisions, Part I: In Georgia, tax collections fell about 18.5 percent during the first half of 2009.

James Salzer reports in the ajc:

[H]istorically, governments don’t see an uptick in tax collections until well after an economic recovery begins.

In Georgia, tax collections fell about 18.5 percent during the first half of 2009.

State tax money in Georgia helps pay to educate about 2 million Georgians and provides health care to about 1.5 million people. The state pays a large portion of the salaries of about 125,000 public school teachers and employs another 100,000 Georgians. It regulates insurance and food safety, patrols highways, oversees elections and provides parks throughout the state.

2010 is an election year and no incumbent wants to run for office after voting for a tax hike. The General Assembly has consistently voted to cut, not raise taxes.

“There is one thing everyone is united on,” said House Majority Leader Jerry Keen (R-St. Simons Island). “We don’t raise taxes on citizens and businesses during a recession. Nothing would hinder a recovery more than raising taxes.”

Kelly McCutchen of the Atlanta-based Georgia Public Policy Foundation, agrees raising taxes right now is a bad idea.

“Barring another dip in the economy, we believe the 2010 budget can be balanced with cost cutting,” McCutchen said. “However, if state revenues do not start to normalize by next year, the 2011 budget will force some very difficult choices. Raising taxes would certainly be the last option you would want to pursue in a recession.”

Whoa! Were all of these remarks cleared with the boss? -- Biden Says Weakened Russia Will Bend to U.S.

From The Wall Street Journal:

Vice President Joe Biden said in an interview that Russia's economy is "withering," and suggested the trend will force the country to make accommodations to the West on a wide range of national-security issues, including loosening its grip on former Soviet republics and shrinking its vast nuclear arsenal.

Mr. Biden said he believes Russia's economic problems are part of a series of developments that have contributed to a significant rethinking by Moscow of its international self-interest. The geographical proximity of the emerging nuclear programs in Iran and North Korea is also likely to make Russia more cooperative with the U.S. in blocking their growth, he said.

But in the interview, at the end of a four-day trip to Ukraine and Georgia, Mr. Biden said domestic troubles are the most important factor driving Russia's new global outlook. "I think we vastly underestimate the hand that we hold," he said.

"Russia has to make some very difficult, calculated decisions," Mr. Biden said. "They have a shrinking population base, they have a withering economy, they have a banking sector and structure that is not likely to be able to withstand the next 15 years, they're in a situation where the world is changing before them and they're clinging to something in the past that is not sustainable."

Mr. Biden's remarks were the most pointed to date by a senior administration official on why the Obama administration believes its "reset" with Russia is likely to succeed, while previous efforts to engage Moscow by the Clinton and Bush administrations ended with little progress.

The remarks also are among the administration's most critical of Russia's current role in the world, and come just weeks after President Barack Obama insisted that the U.S. seeks a "strong, peaceful and prosperous Russia" in an address at his high-profile July summit in Moscow with Russian President Dmitry Medvedev.

Natalya Timakova, a spokeswoman for Mr. Medvedev, declined to comment on Mr. Biden's remarks. Ms. Timakova acknowledged that the Russian government is currently looking at many of the issues he raised -- including economic challenges, the banking sector and the country's shrinking population.

California budget resolution. My trip from being surprised to disappointed on drilling.

In the earlier negotiations with party leaders and Gov. Arnold Schwarzenegger, an agreement was reached to raise $100 million by drilling for oil off Santa Barbara. I couldn't believe it, but was happy as California and the country sure need this oil.

This agreement fell apart when it reached the full California assembly. As reported in The New York Times:

The Assembly rejected a revenue-raising measure to drill for oil off Santa Barbara, blowing another $100 million hole in the plan that is likely to be compensated for in line-item vetoes made by the governor.

The state’s nebulous way of managing its budget negotiations, as well as other oddities of its fiscal situation, are almost certain to be taken on by outside groups this year who wish to change the state’s tax system and perhaps its entire Constitution.

Slow down Mr. President, Part III -- This action of bypassing Waxman's own committee is an indictment on the process and rush to just pass something.

Slow down Mr. President Part I was a 7-23-09 post entitled "Slow down Mr. President. This is what is wrong with the health care legislation: Pelosi insists that she has the votes to push something through."

Slow down Mr. President Part II was a 7-24-09 post entitled: "Other than having been a big Obama supporter during the campaign, this is sort of where I am: For Public, Obama Didn’t Fill in Health Blanks" [with his press conference this week].

Today's part III is from The New York Times:

Dissension among Democrats flared anew on Friday as a top House Democrat threatened to bypass his own committee to speed passage of a bill to provide health insurance for tens of millions of Americans. But by the end of the day, Democrats said they were trying to patch up their differences.

Enough said by me & about it as far as I am concerned. Thanks Mr. Pres. for clearing this up: Obama Shifts Tone on Gates After Mulling Scale of Debate

“I obviously helped to contribute ratcheting it up,” the president said of the case Friday in the White House briefing room.

From The New York Times:

President Obama tried Friday to defuse a volatile national debate over the arrest of a black Harvard University professor as he acknowledged that his own comments had inflamed tensions and insisted he had not meant to malign the arresting officer.

The Gates case has become the first significant racial controversy Mr. Obama has confronted since being sworn in as the nation’s first African-American president. The improvisational handling of it underscored the delicate challenges for a leader who has tried to govern by crossing old lines and emphasizing commonalities over differences.

And from The Washington Post:

Making a surprise appearance before reporters at the White House, Obama said that he had unwittingly fanned smoldering racial resentment with his response to a question at a news conference Wednesday night.

I told Sally when the news broke: There is another side to this story . -- I go with the officer in this manner. Obama wondered into a local incident.

"I have nothing to apologize for," police Sgt. James Crowley said.

You are much smarter than to wade into and comment on an incident without knowing all of the facts President Obama, knowing that there are always two sides. You did not do very well in the first racial controversy of your presidency. If fact, you did poorly, very poorly. And ditto to you Gov. Patrick.

Officer Tells His Side of The Story in Gates Arrest

From The Washington Post:

What began as a prominent African American professor's dispute with a white police sergeant grew more complex Thursday as the officer spoke publicly for the first time and a fuller portrait of his life emerged.

Sgt. James Crowley said Harvard scholar Henry Louis Gates Jr. was combative from the moment the officer arrived at his house last week to respond to a call about a possible burglary. As the confrontation escalated, Crowley said he warned Gates that he risked arrest.

"The second warning was with me holding a set of handcuffs in my hands -- something I really didn't want to do," Crowley said in a radio interview. "The professor at any time could have resolved the issue by quieting down and/or going back inside his house."

Crowley's account came on a day of dizzying debate over his actions, a furor that was touched off by President Obama's remarks at a news conference Wednesday night, when he linked Gates's arrest to the nation's long history of racial profiling and said the police had "acted stupidly."

The events drew Obama into the first racial controversy of his presidency.

On Thursday, the Cambridge police commissioner, Robert C. Haas, described the department as "deeply pained" by Obama's criticism and said Crowley had followed proper protocol in making the arrest.

"I do not believe his actions were in any way racially motivated," Haas said. "Sergeant Crowley is a stellar member of this department and I rely on his judgment every day. He was thrust into a crime in progress, and he tried to work his way through the situation."

On Thursday, the Cambridge police commissioner, Robert C. Haas, described the department as "deeply pained" by Obama's criticism and said Crowley had followed proper protocol in making the arrest.

"I do not believe his actions were in any way racially motivated," Haas said. "Sergeant Crowley is a stellar member of this department and I rely on his judgment every day. He was thrust into a crime in progress, and he tried to work his way through the situation."

Massachusetts Gov. Deval L. Patrick (D) took the opposite position, describing Gates's experience as "every black man's nightmare."
Crowley joined the Cambridge Police Department and was eventually tapped to teach a class on racial profiling at a police training academy.

Thomas Fleming, director of the police academy at the Lowell Police Department, which has a partnership with the Cambridge Police Department, said Crowley has taught the course for five years and has trained 300 recruits, none of whom have complained about him.

"He's a very professional police officer and he's a great instructor," Fleming said in a phone interview from his home.

Crowley arrested Gates last week after a neighbor called police to say someone appeared to be trying to break into a home. In fact, Gates was returning from an overseas trip and could not get his locked front door open.

When Crowley arrived and questioned whether Gates lived in the home, the 58-year-old academic became upset, eventually demanding the officer's name and badge number so he could file a complaint. Crowley said Gates referred to Crowley's mother as a way of showing his displeasure.

When the officer repeatedly asked Gates to speak with him outside, the professor responded, "Ya, I'll speak with your mama outside," Crowley wrote in a police report.

"I'm still just amazed that somebody of his level of intelligence could stoop to such a level, and berate me, accuse me of being a racist or racial profiling," Crowley said in a radio interview Thursday with WEEI-AM. "And then speaking about my mother, it's just -- it's beyond words."

Crowley, 42, said that, when he first saw Gates, in "my mind, I'm thinking, 'He does not look like someone who would break into the house.' " At the same time, however, "from the time that he opened the door, it seemed that he was very upset, very unhappy that I was there."

Of Obama, Crowley said in an interview with Boston's WBZ-AM: "I support the president of the United States 110 percent. I think he's way off base wading into a local issue without knowing all the facts as he himself stated before he made that comment."

What also became clear Thursday was that, because of Obama's comments, the issue was suddenly freighted with political significance.

"Nobody is happy about this situation," Haas said. "This is not the kind of notoriety we want to come to this city. We have worked very hard for many years to improve our professional standing."

Other than having been a big Obama supporter during the campaign, this is sort of where I am: For Public, Obama Didn’t Fill in Health Blanks

From The New York Times:

As Craig Brown watched President Obama’s news conference on Wednesday night on his TiVo-equipped television, he kept hitting the pause button so he could throw questions at the image frozen on the screen.

How much will this health care plan really cost, he asked. How can we cover nearly everybody without higher taxes or debt? Who is going to decide which treatments are allowed? Why cannot they just get rid of the waste without changing the whole system?

Like many in the country, Mr. Brown, a 36-year-old father of four who lives in an Atlanta suburb, has grown increasingly anxious about Washington’s efforts to reconfigure health care and what it may mean for his middle-class family. Although he and his wife, Judith, supported John McCain in the presidential race, they find Mr. Obama an earnest and compelling pitchman. But they remain frustrated by the lack of available detail about his plan’s contours and cost.

They say they feel they are being asked to buy on spec from a government they do not trust. And they have lots of questions.

“The bottom line is there are so many unknowns,” said Ms. Brown, 35, who works part time at her church and cares for her young children. “What we do know is there is going to be more government control, and with more control you’re going to have fewer choices. It’s an innate part of being American to have those choices.”

Slow down Mr. President. This is what is wrong with the health care legislation: Pelosi insists that she has the votes to push something through.

From The New York Times:

On a day when the leader of fiscally conservative Democrats said a deal was a long way off[,] House Speaker Nancy Pelosi insisted that she had the votes to push a bill through . . . .

Enough, enough. Give the woman a break: Palin Legal Donations May Have Violated Ethics Law, Report Finds

From The Washington Post:

An independent investigator has determined that Alaska Gov. Sarah Palin (R) may have violated state ethics laws by soliciting and accepting private donations to pay $500,000 in legal debts.

A confidential report, obtained by The Washington Post on Tuesday, says Palin may have violated laws prohibiting elected officials from using their office for "personal gain" by raising money for her Alaska Fund Trust. She established the fund to help defend herself against more than a dozen ethics complaints filed against her since she took office.

"There is little doubt that the Alaska Fund Trust will provide 'personal gain' to Governor Palin because the trust will provide a benefit to the governor's financial interest," Anchorage lawyer Thomas M. Daniel wrote in his nine-page report, dated July 14.

Specter of Give-and-Take Looms Over Maliki's Visit

From The Washington Post:

Iraq would like the United States to provide more economic support, help resolve problems with some of its neighbors and -- when asked -- assist in combating the myriad security problems it still faces. Otherwise, it would like the Americans to leave it alone.

From the Tarnished Golden State, Lessons for Washington -- The state that can't.

From The Washington Post:

[California has a] political culture that has made [the state] increasingly ungovernable.

One reason California officials have papered over their problems is that they are handicapped by structural impediments that distort their budgetary process. For example, the state requires a two-thirds majority to pass the budget, a virtual guarantee that lawmakers collectively duck the most painful, but possibly necessary, changes to put the state on a sound fiscal footing.

Beyond that, the ballot initiative process in California has locked legislators and the governor into spending requirements and allocations that reduce flexibility when times are tough.

The rest of the country has long looked to California as the future. It was once a leader in developing public infrastructure, and it created the most enviable system of public universities in the nation. Now the nation sees California and worries that its economic and political troubles will infect other states.

Dan Schnur, director of the Jesse M. Unruh Institute of Politics at the University of Southern California, said the rest of the country can learn a valuable lesson from California's inability to deal with its problems.

"This is where a culture of hyper-polarization eventually leads," he said. "Two armed camps, separated by an almost insurmountable gulf, a recipe of gerrymandering, ideologically tailored media and increasingly influential interest groups on both sides leads you to a point where if every single elected representative faithfully represents the views of his or her constituents, there will never be agreement on anything, ever."
_______________

And don't forget that famous ballot initiative -- Proposition 13. As noted in The New York Times:

Expansive growth in the first half of the 20th century led to rising housing prices and infrastructure growth, which came with higher taxes to pay for it all.

Those increases created an antitax rebellion that begot Proposition 13 in the 1970s, a voter-led initiative that artificially depressed property taxes and shifted school financing burdens to the state. It also led to the onset of a culture of ballot initiatives that have hamstrung state budgeters by earmarking money for programs with one vote and taking away the ability to pay for them with others.

The state’s population — over 38 million today from 23.6 million in 1980 — has also meant a growing need for costly services for the poor, especially when revenues are declining.

While the state’s property taxes are below average, its personal income tax rate and levies on capital gains are among the highest; so unlike states that pass the tax burden around, California can become disastrously imbalanced.

Don't worry about it. He'll probably be out of the slammer in a few years & ready to murder again. -- Murderer Nichol’s tab: $2.9 million and growing

From the AJC:

It cost almost $3 million in public money -- at least -- to defend courthouse murderer Brian Nichols, according to records released Tuesday.

The state picked up most of the cost, more than $2.3 million, while Fulton County paid lead defense attorney Henderson Hill almost $496,000 from January 2008 until Nichols was sentenced Dec. 13.

“It was a Cadillac defense,” said Michael Mears, who was at the head of the Public Defender Standards Council when the Nichols case began.

The extraordinary cost of defending Nichols almost crushed the then-new statewide indigent defense system and some feared it would also endanger the death penalty in Georgia. Some feared the costs would be higher than the tally reported Tuesday.

Mears, now a law professor, said the defense of the man known as the courthouse killer should not have exceeded $500,000 in defense costs.

But it was six times that.

The statewide indigent defense system, which included the Capital Defender office, was only three months old when Nichols escaped on March 11, 2005, from the Fulton County Courthouse where he was on trial for rape. He murdered Judge Rowland Barnes, court stenographer Julie Ann Brandau, deputy Sgt. Hoyt Teasley and federal agent David Wilhelm that day.

It is believed to be the most expensive state death penalty trial in Georgia.

It cost more than $4 million to defend Eric Robert Rudolph on federal charges in the fatal bombing of a Birmingham abortion clinic, and he pleaded guilty before trial. Rudolph also pleaded guilty to bombings in Atlanta, where he was represented by salaried federal defenders.

It once seemed as if Obama would lead a center-left coalition, but instead, he has deferred to the Old Bulls on Capitol Hill on issue after issue.

David Brooks accurately observes in The New York Times:

It was interesting to watch the Republican Party lose touch with America. You had a party led by conservative Southerners who neither understood nor sympathized with moderates or representatives from swing districts.

They brought in pollsters to their party conferences to persuade their members that the country was fervently behind them. They were supported by their interest groups and cheered on by their activists and the partisan press. They spent federal money in an effort to buy support but ended up disgusting the country instead.

It’s not that interesting to watch the Democrats lose touch with America. That’s because the plotline is exactly the same. The party is led by insular liberals from big cities and the coasts, who neither understand nor sympathize with moderates. They have their own cherry-picking pollsters, their own media and activist cocoon, their own plans to lavishly spend borrowed money to buy votes.

This ideological overreach won’t be any more successful than the last one. A Washington Post-ABC News poll released Monday confirms what other polls have found. Most Americans love Barack Obama personally, but support for Democratic policies is already sliding fast.

Approval of Obama’s handling of health care, for example, has slid from 57 percent to 49 percent since April. Disapproval has risen from 29 percent to 44 percent. As recently as June, voters earning more than $50,000 preferred Obama to the Republicans on health care by a 21-point margin. Now those voters are evenly split.

Most independents now disapprove of Obama’s health care strategy. In March, only 32 percent of Americans thought Obama was an old-style, tax-and-spend liberal. Now 43 percent do.

We’re only in the early stages of the liberal suicide march, but there already have been three phases. First, there was the stimulus package. You would have thought that a stimulus package would be designed to fight unemployment and stimulate the economy during a recession. But Congressional Democrats used it as a pretext to pay for $787 billion worth of pet programs with borrowed money. Only 11 percent of the money will be spent by the end of the fiscal year — a triumph of ideology over pragmatism.

Then there is the budget. Instead of allaying moderate anxieties about the deficits, the budget is expected to increase the government debt by $11 trillion between 2009 and 2019.

Finally, there is health care. Every cliché Ann Coulter throws at the Democrats is gloriously fulfilled by the Democratic health care bills. The bills do almost nothing to control health care inflation. They are modeled on the Massachusetts health reform law that is currently coming apart at the seams precisely because it doesn’t control costs. They do little to reward efficient providers and reform inefficient ones.

The House bill adds $239 billion to the federal deficit during the first 10 years, according to the Congressional Budget Office. It would pummel small businesses with an 8 percent payroll penalty. It would jack America’s top tax rate above those in Italy and France. Top earners in New York and California would be giving more than 55 percent of earnings to one government entity or another.

Nancy Pelosi has lower approval ratings than Dick Cheney and far lower approval ratings than Sarah Palin. And yet Democrats have allowed her policy values to carry the day — this in an era in which independents dominate the electoral landscape.

Who’s going to stop this leftward surge? Months ago, it seemed as if Obama would lead a center-left coalition. Instead, he has deferred to the Old Bulls on Capitol Hill on issue after issue.

Machiavelli said a leader should be feared as well as loved. Obama is loved by the Democratic chairmen, but he is not feared. On health care, Obama has emphasized cost control. The chairmen flouted his priorities because they don’t fear him. On cap and trade, Obama campaigned against giving away pollution offsets. The chairmen wrote their bill to do precisely that because they don’t fear him. On taxes, Obama promised that top tax rates would not go above Clinton-era levels. The chairmen flouted that promise because they don’t fear him.

Last week, the administration announced a proposal to take Medicare spending decisions away from Congress and lodge the power with technocrats in the executive branch. It’s a good idea, and it might lead to real cost savings. But there’s no reason to think that it will be incorporated into the final law. The chairmen will never surrender power to an administration they can override.

That leaves matters in the hands of the Blue Dog Democrats. These brave moderates are trying to restrain the fiscal explosion. But moderates inherently lack seniority (they are from swing districts). They are usually bought off by leadership at the end of the day.

And so here we are again. Every new majority overinterprets its mandate. We’ve been here before. We’ll be here again.

The Eagle has landed. 40 years later, going to the moon still represents a giant leap for mankind.

Neil Armstrong was the first person to set foot on the moon on July 20, 1969.

Just as we recall what we were doing when we learned that President Kennedy had been shot, many recall where they were when this historic trip to the moon occurred. I was in boot camp in the United States Army at Fort Bragg, North Carolina between my junior and senior years at Davidson College.

My wife's father Jim Cockrill was in the United States Navy with Neil Armstrong, and the two would golf together from time to time. What two great Americans!

Right or wrong, why Obama likes his odds.

Even though The New York Times reports that
the White House seems less firm on a date for a health reform bill (President Obama’s budget director on Sunday appeared to soften on the administration’s insistence that a health care reform bill be delivered by August), it is still good to try to understand how the President's mind might be working.

E.J. Dionne, Jr. writes in The Washington Post:

It was not the soaring rhetoric that is Barack Obama's signature, but he recently offered the sound bite that may define his presidency: "Don't bet against us."

There are reasons to believe that his confident words -- they were about health-care reform but have broader application -- were not the bombast of a bluffer exaggerating the strength of his hand. They reflect the high cards that Obama holds and has only now started to play.

Of course, no one ever thought passing a health-care bill would be easy, and the effort hit some bumps last week over costs and how to cover them.

But Obama doesn't quite see things the way his more nervous Democratic allies do because he missed the years in Washington during which his party was beaten down. Many Democrats had their perceptions of political reality shaped by the failure of Bill Clinton's health proposal, the 1994 Republican revolution and the GOP's triumphalism during President Bush's first term.

That world, however, turned upside down in 2005 -- the year Obama arrived in Washington. Bush's power dissolved in the failure of his Social Security privatization proposal, the Hurricane Katrina backlash and rising disillusionment with the Iraq war. By the end of 2006, less than two years after Obama's arrival, Democrats had seized control of both houses of Congress.

The paradox is that Obama's limited experience under Republican sway makes him more comfortable than many of his allies are with wielding the power that comes from large Democratic majorities.

And it's real power. Nothing made that clearer than the trajectory of Judge Sonia Sotomayor's Supreme Court nomination battle -- or non-battle.

It has often been said that Republicans have not put up much of a fight against her, but the reason for their pacifism is rarely mentioned: Republicans were severely constrained simply because they lack numerical clout.

Had the Senate been more closely divided, the GOP might have mounted a more aggressive campaign that, if nothing else, could have raised the cost for moderate Democrats of supporting Sotomayor. But knowing they'd never get the votes to stop her, Republicans decided to wait for a more opportune moment to pick a real fight.

The numbers work Obama's way on other issues. Much was made of the 44 House Democrats who defected from the president's position by opposing the cap-and-trade bill last month. The more important fact is that Democrats have such a big majority that they could lose all those votes and still prevail, even if narrowly. The same numbers give Speaker Nancy Pelosi significant room to maneuver in selling the House health-care bill.

And with 60 votes in the Senate, Democrats can, in principle, work their will on health care without any Republican support. Obama is bound to make compromises, partly to bring along moderate Democrats. But the size of the Democrats' Senate majority means they won't be able to blame the Republicans if health reform dies. This increases the pressure on moderate Democrats to get something done.

There is thus an irony to the game Obama must play. He will continue to speak in bipartisan terms to keep open the possibility of picking off Republicans if they're needed -- Sen. Olympia Snowe (R-Maine) already seems inclined to work with him -- and because such an approach appeals to moderate Democrats whose sensibilities he must soothe.

The open-to-the-other-side style also helps him hold support from political independents around the country. He needs them to preserve his good approval ratings, which are themselves a form of political capital.

But Obama must simultaneously convince Democrats that they are not living in the Republican congressional eras of 1995 or 2003 -- that if it's necessary, they have the strength on their own to win. This was the implicit message Obama conveyed to Sen. Max Baucus (D-Mont.) to push him to conclude his frustratingly protracted health-care negotiations with Republicans in the Senate Finance Committee.

Getting Baucus to move this week is essential to maintaining momentum. If Obama seems likely to win, interest groups will be more forthcoming, his own party will be more likely to hold together and more Republicans will be inclined to cut a deal.

And that, finally, is why Obama wants to make sure his party bets with him, not against him. His core message to fellow Democrats is that the only things they have to fear are the fears and insecurities bred into them when they were a battered minority. Obama is free of those doubts because he never knew them.

Fool me once, shame on you; fool me twice, shame on me: Cashing In, Again, on Risky Mortgages

The New York Times has this article about how some of the very people who made a killing in subprime mortgages are now offering loan modifications for desperate homeowners, sometimes with unsavory tactics.

The Watergate Hotel has fallen on hard times. Things may begin to look up a bit after Tuesday.

"Eighty percent of the rooms have water views, and they're not great -- they're spectacular."

Most likely on Tuesday the bank holding the mortgage will buy the Watergate Hotel -- part of an office-apartment-hotel complex built in 1967 that is on the National Register of Historic Places -- and then hopefully the bank can negotiate a sale to a private buyer.

From The Washington Post:

The Watergate Hotel lost its luster years ago, its marble floors, rich colors and grand interiors dusted over with age. Its 251 rooms have stood empty since 2007, and for a year its debt-ridden owners have been trying to unload it. On Tuesday, the national landmark may find its suitor.

The bank holding the $40 million loan is putting the foreclosed property up for auction . . . .

Washington's 26,000-room hotel market has remained relatively stable during the recession, but the prospect of a new owner promises to return one of the nation's most famous pieces of real estate to prominence.

Many in Washington consider it a trophy property no matter what.

But some facts might give pause to anyone thinking about snapping up the empty 12-story hotel across from the Kennedy Center where the Watergate burglars slept before they broke into the adjoining office complex in 1972, setting off the scandal that brought down President Richard M. Nixon.

It has been neglected for years and needs $100 million in renovations just to make it habitable, developers familiar with the Watergate say. Monument Reality, which bought it for $45 million in 2004, has not paid the hotel's property taxes since last year, which translates to at least $250,000 the city will collect at a sale.

Even as a vacant building, the tab for security, electricity, heat, emergency systems, insurance and other expenses comes to $100,000 to $150,000 a month.

Monument closed it in 2007 to prepare for its conversion into a luxury hotel.

Lehman Brothers, its financing partner, went bankrupt last year.

Even if someone were to grab the place for a mere $20 million or $30 million, who can get $100 million in financing to restore the building in today's jittery capital markets?

In years past, foreign investors would have been the most likely buyers for such a high-profile property.

The Watergate's residential neighbors recall the beautiful browns and yellows that adorned the interior, the marble floors, the painting of Queen Elizabeth that greeted guests as they entered the elevators, the restaurants with old-fashioned furnishings.

"I miss the light that the Watergate provided," said Bill Diedrich, a Watergate East resident. "It's a light that should be re-lit."

Although the glamour of the hotel has long since faded, many say the spirit of the Watergate Hotel remains.

"It will always be first-class," said Dorothy Franklin, 75, one of the first Watergate residents to live in the complex when it originally opened, "because, after all, it's historical."

The ingrats, Part II: Iraq Restricts U.S. Forces (and of course, the confidence expressed by Iraqi leaders does not match their competence)

A 6-28-09 post entitled "The ingrats: Prime Minister Casting U.S. Withdrawal as Iraq Victory" read in part:

Prime Minister Nuri Kamal al-Maliki has taken to calling the withdrawal of American combat troops from Iraq’s cities by next Tuesday a “great victory,” a repulsion of foreign occupiers he compares to the rebellion against British troops in 1920.

Today's Washington Post notes:

The Iraqi government has moved to sharply restrict the movement and activities of U.S. forces in a new reading of a six-month-old U.S.-Iraqi security agreement that has startled American commanders and raised concerns about the safety of their troops.

In a curt missive issued by the Baghdad Operations Command on July 2 -- the day after Iraqis celebrated the withdrawal of U.S. troops to bases outside city centers -- Iraq's top commanders told their U.S. counterparts to "stop all joint patrols" in Baghdad. It said U.S. resupply convoys could travel only at night and ordered the Americans to "notify us immediately of any violations of the agreement."

The new guidelines are a reflection of rising tensions between the two governments.

The June 30 deadline for moving U.S. troops out of Iraqi towns and cities was the first of three milestones under the agreement. The U.S. military is to decrease its troop levels from 130,000 to 50,000 by August of next year.

The Americans have been taken aback by the new restrictions on their activities. The Iraqi order runs "contrary to the spirit and practice of our last several months of operations," Maj. Gen. Daniel P. Bolger, commander of the Baghdad division, wrote in an e-mail obtained by The Washington Post.

"Maybe something was 'lost in translation,' " Bolger wrote. "We are not going to hide our support role in the city. I'm sorry the Iraqi politicians lied/dissembled/spun, but we are not invisible nor should we be." He said U.S. troops intend to engage in combat operations in urban areas to avert or respond to threats, with or without help from the Iraqis.

The acrimony that has marked the transition period has sowed resentment, according to several U.S. soldiers, who said the confidence expressed by Iraqi leaders does not match their competence.

"Our [Iraqi] partners burn our fuel, drive roads cleared by our Engineers, live in bases built with our money, operate vehicles fixed with our parts, eat food paid for by our contracts, watch our [surveillance] video feeds, serve citizens with our [funds], and benefit from our air cover," Bolger noted in the e-mail.

Buckle up. CIT: the ecosystem of suppliers, manufacturers & retailers, its financial problems could produce cash crunches at thousands of businesses.

As a practicing attorney, I know this to be the case. Letting Lehman go down will always be questioned (especially after rescuing Bear Stearns and AIG and working with Back of America on Merrill Lynch). This decision will also.

From The Wall Street Journal:

CIT is a lender to 950,000 mostly small and midsize businesses. It is one of the nation's biggest players in supplying credit and cash advances to retailers and manufacturers, a business known as "factoring." CIT provides them cash upfront and over time, taking over the collection of their receivables and invoices.

If CIT were to seek bankruptcy protection, scheduled payments to customers could potentially be frozen by the court.

The federal government is betting that CIT is not big enough to pose a systemic risk to the financial system. . . . [B]ut because the lender plays a pivotal role in the ecosystem of suppliers, manufacturers and retailers, its financial problems could produce cash crunches at thousands of businesses.

CIT is a lender to 950,000 mostly small and midsize businesses. It is one of the nation's biggest players in supplying credit and cash advances to retailers and manufacturers, a business known as "factoring." CIT provides them cash upfront and over time, taking over the collection of their receivables and invoices.

If CIT were to seek bankruptcy protection, scheduled payments to customers could potentially be frozen by the court.

The federal government is betting that CIT is not big enough to pose a systemic risk to the financial system.

In a typical financing deal, suppliers sell receivables to a "factor" such as CIT so that they can receive some payment immediately and avoid waiting 60 or 90 days for payment from the retailer. CIT typically pays a specified amount upfront, and the remainder once the retailer has paid for the goods. The factor keeps a small percentage of the cash it collects as a fee.

If a mall chain places a $100,000 order for T-shirts, for example, the factor will pay the vendor $80,000 when the T-shirts are shipped, and the remainder when the retailer pays for the shipment.

Big-name department stores and small retailers received calls from vendors who had sold their receivables to CIT and are worried they may not get paid for their goods, according to people familiar with the matter. Some vendors asked the big retailers if they would pay them directly rather than pay CIT, these people said.

CIT services about 300,000 retailers and 1,900 manufacturers and importers scattered all over the world. CIT finances as much as $40 billion in receivables in the U.S., according to a company document.

Go Blue Dogs Go!! -- Democrats Drop Key Part of Bill to Assist Unions (Card-Check)

From The New York Times:

A half-dozen senators friendly to labor have decided to drop a central provision of a bill that would have made it easier to organize workers.

The so-called card-check provision — which senators decided to scrap to help secure a filibuster-proof 60 votes — would have required employers to recognize a union as soon as a majority of workers signed cards saying they wanted a union. Currently, employers can insist on a secret-ballot election, a higher hurdle for unions.

The abandonment of card check was another example of the power of moderate Democrats to constrain their party’s more liberal legislative efforts. Though the Democrats have a 60-40 vote advantage in the Senate, and President Obama supports the measure, several moderate Democrats opposed the card-check provision as undemocratic.

In its place, several Senate and labor officials said, the revised bill would require shorter unionization campaigns and faster elections.

There's no free lunch: Massachusetts eliminates health care coverage for some 30,000 legal immigrants to help close a growing deficit.

From The New York Times:

The new state budget in Massachusetts eliminates health care coverage for some 30,000 legal immigrants to help close a growing deficit, reversing progress toward universal coverage just as Congress looks to the state as a model for overhauling the nation’s health care system.

The affected immigrants, permanent residents who have had green cards for less than five years, are now covered under Commonwealth Care, a subsidized insurance program for low-income residents that is central to the groundbreaking health care law enacted here in 2006.

The cut [will] only nondisabled adults from 18 to 65 years old . . . .

Because of its three-year-old law, Massachusetts has the country’s lowest percentage of uninsured residents: 2.6 percent, compared with a national average of 15 percent. The law requires that almost every resident have insurance, and to meet that goal, the state subsidizes coverage for those earning up to three times the federal poverty level, or $66,150 for a family of four.

Under the 1996 federal law that overhauled the nation’s welfare system, the 30,000 immigrants affected by the loss of coverage also do not qualify for Medicaid or other federal aid. Massachusetts is one of the states, including California, New York and Pennsylvania, that nonetheless provide at least some health coverage for such immigrants.

Oh my goodness! Are we really to believe that Sarah Palin wrote this piece in The Washington Post. I don't believe so.

Sarah Palin has an op-ed in The Washington Post today entitled "The 'Cap And Tax' Dead End."

She may be punishing The New York Times for the article in the previous post by not putting it there also. I thought the article seemed factual and neutral.

Palin’s Long March to a Short-Notice Resignation

From The New York Times:

Ms. Palin had returned to her home state from the presidential campaign as one of the hopeful prospects in her struggling party, even if she had much to prove to her detractors. Standing before the Legislature in January, she vowed to retake her office with “optimism and collaboration and hard work to get the job done.”

But interviews in Alaska and in Washington show that a seemingly relentless string of professional and personal troubles quickly put that goal out of reach.

Almost as soon as she returned home, the once-popular governor was isolated from an increasingly critical Legislature. Lawmakers who had supported her signature effort to develop a natural gas pipeline turned into uncooperative critics.

Ethics complaints mounted, and legal bills followed. At home Ms. Palin was dealing with a teenage daughter who had given birth to a son and broken up with the infant’s father, a baby of her own with special needs and a national news media that was eager to cover it all.

Friends worried that she appeared anxious and underweight. Her hair had thinned to the point where she needed emergency help from her hairdresser and close friend, Jessica Steele.

Yet to the dismay of some advisers, Ms. Palin dived into the fray, seeming to relish the tabloid-ready fights that consumed her as the work of the state at times went undone.

Her public feud with David Letterman over a tasteless sexual joke he made about one of her daughters spun into a broader fight at home with a fellow Republican over state efforts to combat sexual abuse.

She had a political aide issue a news release condemning Levi Johnston, the teenage father of her daughter Bristol’s newborn, for his assertion that Ms. Palin had known the unwed high-schoolers were having sex all along.

It was the sort of intermingling between her personal and public agendas that had drawn ethics complaints against her even before Senator John McCain tapped her as his running mate in August.

But now, Ms. Palin had fewer defenders to lend support. Her husband, Todd, her most trusted adviser, was spending less time at her side both because they needed money from his oil industry job, friends say, and because questions had been raised about whether he had been too involved at the Capitol.

Her growing list of detractors quickly signaled that they were not impressed with her celebrity status.

“We had business to do,” said State Representative Nancy Dahlstrom, a Republican who had worked on Ms. Palin’s 2006 race for governor. “It’s not all about adoration.”

Troubles Await Back Home

When Ms. Palin made it back to Alaska in November, the state that had once given her an 83 percent approval rating was no longer so enchanted.

She was met at the Capitol by a growing pile of ethics complaints filed by opponents that, under Alaska state law, had to be investigated.

During the campaign, an investigation by the Republican-dominated Legislature found that Ms. Palin had abused her office by leaning on subordinates to get her former brother-in-law fired from his job as a state trooper. She was forced to pay back taxes after it was disclosed that she had billed the state for thousands of dollars in per diem expenses meant to cover travel costs while staying in Wasilla. Still, of the 19 ethics complaints filed against her, most have been dismissed.

By all accounts, Ms. Palin became consumed with the complaints, no matter how small-bore — which many were — or where they came from.

When a local Democratic blogger accused her of becoming a “walking billboard” by wearing a jacket emblazoned with the logo of Arctic Cat, her husband’s team sponsor at the Iron Dog snowmobile race, she issued a news release titled “Governor Comments on Latest Bogus Ethics Complaint.”

“Yes, I wore Arctic Cat snow gear at an outdoor event, because it was cold outside,” her statement read. A follow-up release was triumphantly titled “Ethics Complaint on Governor’s Apparel Dismissed.”

Feuds begat feuds. Ms. Palin alleged in June that Mr. Letterman’s joke that one of her daughters had been “knocked up” by the Yankees star Alex Rodriguez during a recent trip to New York encouraged “sexual exploitation” of younger women.

Her comments then prompted a Republican lawmaker, State Representative Mike Hawker, to accuse Ms. Palin of underfinancing sexual abuse programs. Ms. Palin, in turn, directed public safety officials to give her fodder for a retort, requesting that they put out a statement saying her policies would reduce sexual assaults on minors.

Even Ms. Palin’s supporters came to believe that she was losing focus amid all the fighting.

“It was very relentless,” said State Representative John Coghill, a Republican. “My only criticism of her was she probably paid too much attention to it.”

Amid all the turmoil, Ms. Palin’s enthusiasm for the job itself seemed to be waning, her office appointment books from January 2007 through this May indicate. Since her return from the national campaign her days have typically started later and ended earlier, and the number of meetings with local legislators and mayors has declined.

Things on the home front were equally strained. Paparazzi regularly stalked the family . . . .

If Bristol Palin was avoiding the limelight, her estranged boyfriend was seeking it. Mr. Johnston appeared bare-chested in GQ magazine holding Tripp. He told the talk show host Tyra Banks that he was certain Ms. Palin knew his relationship with her teenage daughter had been sexual.

Ms. Palin’s top political aide cranked out another news release: “We’re disappointed that Levi and his family, in a quest for fame, attention and fortune, are engaging in flat-out lies, gross exaggeration and even distortion of their relationship.”

Appeal Outside Alaska

Despite Ms. Palin’s travails in Alaska, she continued to have national cachet.

Barbara Walters and Oprah Winfrey’s producer called with interview requests. She fielded lucrative book deals, ultimately accepting one estimated to be in the millions of dollars. A veteran television producer proposed a “West Wing” meets “Northern Exposure” reality show about her. Out-of-state political trips were flashbacks to the presidential campaign. Crowds chanted, “Run, Sarah, Run!”

In January, Fred V. Malek, a longtime Republican kingmaker, held a dinner to introduce Ms. Palin to some of the party’s biggest names, prompted partly by what he saw as shabby treatment by the McCain campaign. Mr. Malek said she charmed former Vice President Dick Cheney at the dinner and bonded with Mr. Cheney’s daughter Liz over both raising five children.

The night was a high point. But already, Ms. Palin was having trouble reconciling the gravitational pull of her national support with the stresses of Alaska.

John Coale, a Washington trial lawyer and a Democrat who befriended the governor, said that during a political trip to Atlanta in December she expressed concern about her personal finances and complained that whenever she left Alaska “there was tremendous criticism up there.”

To Mr. Coale, the Palins seemed unprepared for the national stage. “I don’t think they got it, that they were in the arena,” he added. Mr. Coale helped Ms. Palin set up a legal defense fund and a political action committee to pay for her political activities. But both caused additional problems.

While the defense fund has raised more than $250,000, according to its trustee, the money cannot be spent pending resolution of an ethics complaint that contends that the contributions could amount to improper gifts.

The political action committee, named SarahPAC, was intended to help Ms. Palin steer clear of state ethics laws prohibiting the mixing of official duties and political activities. But according to people who dealt with it, a disconnect emerged between Ms. Palin’s political and official operations, resulting in embarrassing blunders.

After the Conservative Political Action Conference, a meeting of the Republican Party’s evangelical base, announced that the governor would have a coveted speaking role at its annual gathering in February, she canceled, citing scheduling conflicts. Then, organizers of one of the most important Republican Congressional fund-raisers of the year said they had been assured by a political aide to Ms. Palin that she would be their headliner, only to have her Anchorage office announce that she knew nothing about it.

Tugs, Pulls and Pressures

Hope for the intervention’s success soon faded. Despite advice to stick close to home and focus on an Alaska agenda, the governor accepted an invitation to attend an anti-abortion dinner in Indiana in April, even though the state budget was hanging in the balance in the Legislature.

When Tom Wright, chief of staff for the speaker of the Alaska House, suggested that the governor would catch heat for leaving, Ms. Palin stormed into his office and, according to a person familiar with the conversation, “proceeded to ream him out.”

In early June, when Ms. Palin visited Mr. Malek in Washington, “My sense was she was very unhappy with the multiple tugs, pulls and pressures in her life, that her family life was not even close to what she regarded as acceptable,” he said, adding, “she just had a dissatisfaction with the way the job had developed.”

When she announced on July 3 that she was leaving the job, the national political establishment speculated that it was part of a scheme to position herself for a White House run.

Ms. Palin scoffed at the notion. “There’s no ulterior motive,” she said in the interview. She said the lieutenant governor who will succeed her on July 26, Sean R. Parnell, will pursue “the same agenda as mine — minus the distractions.”

In her hometown area at least, people take her at her word, but they doubt she is out of the game for good.

“She’s very young and she has a long time to be a potential candidate and to mature and develop a thicker skin,” said Janet Kincaid, a supporter in Palmer. “In politics, you’ve got to just let it roll or it will eat you alive.”

At the governor’s Anchorage office, staff members are struggling to roll with Ms. Palin’s surprise announcement. Last week, a clock on the wall continued its countdown. Under a “Time to Make a Difference” placard, the clock ticks away the days, hours, minutes and seconds until the scheduled end to Ms. Palin’s term. As of Friday, it had 513 days left.

“I don’t know how to reset the darn thing,” David Murrow, a spokesman for the governor, said earlier in the week.