America is an inherently conservative country and a center-right coalition of Republicans, Reagan Democrats and like-minded Independents can attract more than 50 percent of the popular vote and a winning majority of 350 to 400 electoral votes in 2008.

Here are the elements of GOP victory:

• Focus on the Economy

Economic growth far outweighs every other issue and concern of the broad mid-section of American voters. The slowing economy, rising unemployment and declining consumer confidence are causing growing fears of a recession.

Republicans need to concentrate on the collapse of the housing sector and loss of home equity value – the only “savings” most Americans have – that has created profound anxiety. “The economic mood is grimmer than it has been since 1992, as the last recession bottomed,” says Andrew Kohut, President of the Pew Research Center.

Republicans must propose middle-class tax cuts, to be paid for by cutting non-essential spending and wasteful “earmarks” in the FY 2008 budget to kick-start the sluggish economy.

Economic conditions and prospects for sustained improvement and growth are the crucial elements of the Republican’s message.

• Concentrate on America’s Mid-Section

Republicans should heed Nixon, the master-strategist, who repeatedly insisted that no Republican can be elected president without carrying Ohio – and all the places like it. Ohio, with its mix of industry, cities and farming, is truly America in miniature.

Republicans need to advocate a new America First program for the 21st century to revitalize and rebuild thousands of urgently needed infrastructures throughout the United States – aging bridges, tunnels, docks, waterways and roads.

• Regain Support Among Hispanics

Bush won 40 percent of Hispanics in 2004, but this fell off sharply in the 2006 mid-term elections. Hispanics were alienated by the immigration bill. That was a mistake. Republicans can recapture 25-30 percent of the Hispanic vote by promising to restore a legal pathway to citizenship for illegals and at the same time enforce the security of the U.S. border.

• Dealing with Iraq

Republicans must emphasize the importance of a renewed U.S. long-term commitment to non-interventionism in the Mideast and elsewhere. This will lead to the rationale for an enormous shift of resources to domestic needs under state and local economic development authority.

Without mentioning Bush or the troop “surge” (now complete), Republicans must assure the electorate that the U.S. can retire from Iraq with honor in late 2008 and 2009. They must emphasize the long Republican tradition of non-interventionism (not “isolation”) and the positive changes to expect in a post-Iraq era -- no more casualties, savings of at least $150 billion annually for domestic priorities and a new balance in the Mideast. Republicans must also urge a continued dialogue with Iran at the ambassadorial level concerning mutual interests in the region and peaceful resolution of differences. A Republican candidate would demand that Iran cease support for terrorism and have a commitment to stability.

• Turnout Spells Victory

Republicans can not only hold the presidency in 2008 but could also recapture the Senate by emphasizing their middle-class agenda. In 2004, Bush won re-election because of the huge GOP turnout effort led by an army of volunteers, mostly women. The key to their participation in 2008 will be their rising dissatisfaction with Hillary Rodham Clinton as the “first” (therefore exemplary) woman president.

In any event, 2008 is anything but a “give up” year for the GOP.

The assassination of former Prime Minister Benazir Bhutto has unleashed a global tidal wave of false sentiments and genuine fears for Pakistan and the region. Bhutto was the first woman to lead a Muslim nation, and she was widely loved in her country. But outsiders saw her as opportunistic, Machiavellian and dangerous.

“She was Lady Macbeth -- suspected of having her two brothers killed and possibly her husband,” says a veteran American journalist who interviewed her and closely watched her career over the decades.

Pakistan is a Muslim-majority nation torn from Hindu India in the savage 1947 partition. Gaining power in turbulent Pakistan demands a blood price from all who seek and conspire for it. In the case of Bhutto, she was the closest approximation of a democratic political heroine, but she was at heart an autocrat who ruled with a steely-eyed and totally realistic determination to say and do whatever was necessary to gain power.

In the aftermath of her assassination, the immediate question in the backrooms of governments across the world is: who will control Pakistan’s arsenal of nuclear weapons, estimated by an American expert to number about 80 warheads. Neighboring India, also nuclear-armed, is on a hair- trigger alert. India stole Pakistan’s Kashmir territory in the Himalayas and the two nations have fought three inconclusive wars over the lost land. A fourth could erupt in the predictably chaotic aftermath of Bhutto’s murder.

Who benefits from Bhutto’s assassination? Certainly not Pakistan’s President Pervez Musharraf. (Washington forced the former general to remove his military uniform and govern as a civilian.) Prior to the January 8th scheduled elections, Musharraf had hoped to arrange a behind-the-scenes power-sharing deal with Bhutto. Certainly not Bhutto’s principal civilian rival, the equally cynical and corrupt Nawaz Sharif, whose following is smaller than hers and less able to provide a “democratic” front for the real military rulers of Pakistan.

Pakistan is ruled by a military state-within-the-state, the Inter-Services Intelligence (ISI), the most ruthless and effective secret service in the developing world. The nightmare possibility is that rival factions within the ISI, divided over Bhutto’s future role, killed her and are waging a civil war triggered by her murder.

For the United States, waging a small, dirty war in Afghanistan, Bhutto’s violent removal from the international scene generates enormous uncertainty. There is obvious danger of a wider Afghanistan war spilling over the entire region of South Asia. Pakistan’s Afghan border areas are ruled by fierce outlaw tribes, drug smugglers, assassins (the name “assassin” originated in what is now Pakistan) and men with guns who are available for hire to the highest bidder. Al Qaeda makes its headquarters there.

American CIA investigators found that the trail of the 9/11 attacks conspiracy led to Pakistan’s wild border lands. Osama bin Laden is still believed to be hiding there under ISI protection, receiving kidney dialysis at a remote army hospital. The Pakistani Army has pretended to search for him, because that’s what Washington has paid for. But the Pakistani insiders and the Saudis who bankroll impoverished Pakistan’s government and regional intrigues know perfectly well where bin Laden is hiding.

Up to now, I believe that it has not been in President Bush’s interests to push beyond Pakistani pretenses and expose ugly realities. Now the U.S. will have to deal with these realities that include the likely necessity to find a way to continue stable, authoritarian and non-democratic government under the Pakistan military, perhaps with a thin democratic “cover” from Nawaz Sharif.

In recent weeks, as the U.S. military’s “surge” in Iraq succeeded, Mideast sources have speculated that Islamic Jihadists had quietly withdrawn from Iraq, transited Iran and moved into the new main front – Pakistan, where the possibility of establishing a new Islamic Revolutionary government seemed greatest. Bhutto’s assassination as the preliminary to this scheme to take over Pakistan by religious subversion and force is quite logical.

Bhutto had complained to the ISI about the inadequacy of her protection. If Bhutto was killed by Islamic fanatics, the nature of the attack indicates complicity within her own circle.

Now Pakistan could descend into a tumultuous civil war and an al Qaeda offensive. I think that President Musharraf should announce, after a period of mourning, a new date for the elections - ideally within a month.

Rudolph W. Giuliani – who had been the lead reindeer of the GOP sled in the polls – has taken the wrong turn and his advisers and staff are now quite uneasy.

Giuliani’s decision to ignore Iowa (January 3), New Hampshire (January 8) and South Carolina (January 19) to concentrate on Florida (January 29) and 22 states that hold primaries or caucuses on Feb. 5, including California, Illinois and New York, may turn out to be an irreversible mistake. Granted these states, by the sheer number of their delegates, should carry more important weight in the nomination process but as Tony Fabrizio, a Republican strategist recently told CNN: “No candidate has won a nomination in the modern primary era without winning Iowa, New Hampshire or South Carolina. For his strategy to work, Rudy Giuliani has to defy history.”

His political defiance conceivably might have worked. But recently Giuliani has had to respond to a spate of negative stories about his extramarital affairs, the use of New York’s taxpayers dollars to court Judi Nathan, his relationship with disgraced police commissioner Bernard Kerik and his puzzling, unexplained return to St. Louis to enter a hospital and stay overnight because of a “headache and flu symptoms.” All of these headlines about his turbulent past have not only been embarrassing but have cost him major slippage in national opinion polls.

The candidate who strings together electoral successes changes minds to his advantage everywhere. The candidate who’s missing from the action loses visibility, electability and momentum. “Big Mo” matters crucially.

Hence Giuliani is taking a high-risk gamble that Mike Huckabee will win Iowa; John McCain, New Hampshire; and Fred Thompson, South Carolina that would split and thus discount their victories. But what happens if Huckabee or Mitt Romney wins two or even three of the first contests?

In my book, the party would be over for Giuliani after South Carolina and he would not be able to recover. Everybody likes a winner and Mr. Tough Guy’s erosion in the polls is starting to accelerate.

Even while mugging for the cameras, New York’s second-term Mayor Michael Bloomberg maintains that he is not running for the presidency in 2008. But, the whispers at dinner parties and media speculations and feature stories continue to grow, fueled by voters’ uncertainties about the current crop of candidates.

And, Bloomberg certainly stands to benefit from the present candidates’ nastiness and good old fashion mud-slinging, accusations and name-calling, especially if he waits until March 5 when the electorate will be exhausted by the whole bunch.

At first glance, quiet-spoken Michael Bloomberg does not seem an imposing candidate. At 65, Boston-born Bloomberg, is a short (5’7”), stocky Jewish entrepreneur who received a M.B.A at Harvard. He has spent his entire life and career in New York City starting with Salomon Brothers in 1966. He founded Bloomberg L.P. in 1981.

A lifelong Democrat, he ran for mayor as a Republican to get on the ballot in 2001, spending $74 million; and in 2005, he spent $85 million to keep the office. In June 2007, he surprised everyone by announcing that he was leaving the Republican Party to become an Independent. With a personal fortune of more than 5 billion dollars, he is able to finance a nation-wide presidential campaign solely from his own resources, down to the last bumper sticker.

Bloomberg doesn’t want to be a spoiler or a protest candidate, Ben Casselman wrote last week in the Wall Street Journal and now hints that he may well run as a Democrat. Mitchell Moss, a New York University professor who has served as an adviser to Bloomberg says: “…he’ll only run if he can win.”

A recent CBS/NYTimes poll says: “With the looming housing crisis, a slowdown in job creation, and a likely cut in interest rates by the Federal Reserve, America’s assessment of the condition of the national economy has dropped considerably since October. For the first time in over a year, a majority of Americans – 57 percent - thinks the economy is in at least somewhat bad shape, up eight points from October. Positive assessment of the economy has likewise dropped eight points to 42 percent - the lowest it has been in over four years.”

Bloomberg too foresees a deepening economic and financial crisis crippling the U.S. economy and is confident that he is qualified to preside over the economy’s rescue – the same kind of turnaround he achieved in neglected, semi-bankrupt Manhattan. Bloomberg, well-known as an effective non-partisan, nuts-and-bolts centrist mayor, has demonstrated his capacity to understand the most complex economic and financial matters.

A superb administrator who methodically executes his business plans, says he would be delighted to have the opportunity to “fix things” in Washington. His reputation for getting things done would be his strongest asset as America’s crisis president. At the center of the vast bureaucracy of the modern Executive Branch of the U.S. government, Bloomberg would coordinate his managerial genius and operate in an entirely new environment -- at once revolutionizing the presidency and making it work in unprecedented ways.

Bloomberg recognizes his lack of foreign policy experience and is reportedly being tutored in foreign affairs by Nancy Soderberg, a former U.S. official at the United Nations who is close to Senator Edward Kennedy.

Bloomberg has quietly asked key advisers and staff aides not to make any personal plans beyond next March. And it was just reported in The New York Post that his aides have been reaching out to consultants from his past campaigns especially those involved in creating the mayor’s previous TV spots.

According to Bloomberg, he believes that the polarizing Democratic and Republican candidates will create a deep public desire for his brand of personal non-partisanship and centrist leadership. Will he answer destiny’s call?

Maybe I have spent too much time at the eggnog. However, I believe if Bloomberg answered the call in whatever party he chose, American would elect him. In the meantime, I’ll be taking my “long winters nap” with those sugar plums dancing in my head, hoping.

Interviewing a cross section of voters across America, I asked: “Who among the presidential candidates do you like; who do you believe is qualified to be our next President?” The majority of respondents answered: “No one!”

The only common attribute that describes the current crop of candidates is their mediocrity, with two possible exceptions -- John McCain and John Edwards. Even there, the stretch is very wide considering the standards established over the life of our nation and explains why so many voters are quite depressed and disgusted.

Just consider the leaders of our infant Republic: Washington, Jefferson, Franklin, Adams, and Hamilton. We had so many first-rate leaders that men of the undoubted capacity of Alexander Hamilton and Benjamin Franklin could be passed over for president – they were not needed!

And, look at this past century -- Theodore Roosevelt, Franklin Roosevelt, Harry Truman, Dwight Eisenhower, John Kennedy, and Ronald Reagan -- these were leaders of the first rank.

Who do we have today that we can honestly say measures up to the standards set during all these past administrations? The present group of presidential candidates is very long on ambition and short on solid, impressive accomplishments and experience. All lack the visible potential to achieve greatness. The presidency is not the place for on-the-job training. The presidency is the capstone office of an achievement-filled career.

Prior to the State of the Union address by our nation’s Chief Executive, the Sergeant-at-Arms calls out to the assembled Congress: “Mr. Speaker – the President of the United States.” For the past eight years, we have had a figurative midget – George W. Bush -- who has taken the Presidency to a new all-time low.

The novelty-obsessed media is fascinated only with the possibility of a first woman candidate or a first African American candidate and are neglecting to acknowledge the importance of this election and the sanctity of the presidency.

Last year, I was privileged to be appointed Senior Advisor to Ambassador David Abshire’s Center for the Study of the Presidency in Washington, DC. The Center’s goals are to study how America can strengthen our highest office and restore international respect for the presidency. I helped write a fresh appraisal of the qualities the next president will need to lead America in the 21st century. Dr. Abshire believes the next president will need moral character as well as keen intelligence, analytic ability and resolute determination to deal with our complex issues at home and abroad.

Restoring the presidency cannot be outsourced or handed to expert consultants. The president must make crucial decisions based on personal knowledge, experience and ability. Above all, this office is a sacred trust and not a mere prize of ambition. Our president is the sum of all of our hopes, pride and aspirations.

Is the 2008 election going to be a political version of “American Idol” or will we, at some point, have the opportunity to learn what each of these candidates actually stand for and where each would lead America as we fight two wars and one recession?

I do not believe that is too much to ask?

According to the federal government’s data, the economy has steadily lost momentum since last spring when the subprime mortgage crisis surfaced. In the third quarter, Gross Domestic Product (GDP) grew by an impressive 4.9 percent, but it will slow to only one percent or less in the year’s final quarter.

“American consumers may finally be showing some restraint…., writes Floyd Norris in the New York Times. The rate of increase in imports has begun to decline and is now at its lowest level since 2002 when the economy was only slowly emerging from a recession.”

In November, the Labor Department said import prices had jumped 2.7 percent, the fastest monthly increase since 1990. This steep rise was due to soaring prices for petroleum imports, which rose 9.8 percent.

Martin Feldstein, President Ronald Reagan’s chief economic adviser and Chairman of the National Bureau of Economic Research, said in an interview last week: “Whether it be consumer confidence or real incomes or business plans, we’re seeing an economy that is continually slipping and therefore in an increasing probability of a recession next year. The Federal Reserve has to be prepared to continue cutting interest rates as we go into 2008.”

Should the economy stall out, Feldstein strongly implied, the consumer-led downturn will be extremely difficult to turn around and revive without the direct stimulus of generous consumer tax cuts to bolster demand.

A recession that leads only to more recession, a recovery that slips and fails, and then recovers but fails again – that is a rare, protracted economic phenomenon called a “depression.” We Americans like to believe that we have repealed the remote possibility of “another depression,” like the 1930s. But we have not, as Alan Greenspan well knows.

The Bush Administration, in the words of Republican Senator Chuck Hagel of Nebraska, is “the most arrogant and incompetent in our history.” This disastrously inept, wrong-headed administration is entirely capable of allowing the debt-swollen, war-ravaged economy to slide into a severe recession that becomes a 2008-style depression under the weight of the troubled banking industry and collapsing consumer credit system. Congress is financially illiterate and insulated from economic reality.

Fortunately, Federal Reserve Chairman Ben S. Bernanke, an expert on avoiding deflation, understands what must be done, and he is doing it. By the time America elects a new president in 2008 and installs a new administration in 2009, the recession could gain a two-year head start. A massive, cumulative debt collapse is a real danger. Congress needs to take corrective bipartisan action NOW.

Authentic trends emerge very slowly, over several years or even a decade. Then we “discover” a seemingly “new” trend.

The extremely good, drawn-out “news” is that America has regained international trading competitiveness, with a much cheaper dollar. U.S. exports, which account for 10 percent of GDP, are surging while imports are stable. This year, the trade deficit, which hit a record $759 billion in 2006, will shrink back toward 2005-2004 levels. Half of U.S. imports, it should be noted, are energy products at prices set by the anti-competitive OPEC cartel.

Trade politics tends to bring out obsolete stereotypes. America’s export problems owe little to “lazy” union workers or “greedy” businessmen. The huge trade deficit has much to do with Washington’s neglect of the dollar’s external value in the fiercely cut-throat international arena.

Every foreign nation with a currency manages its value against the central currency, the dollar. The greenback is “pegged” to everything else through the manipulations of 130-odd central banks. The dollar floats in a sea of corrupted paper and takes its chances.

The obvious advantage to the U.S. of being the world monetary system’s central currency is that the U.S. can settle deficits and debts in the dollar in the money Washington prints. The glaring disadvantage: the dollar, as the system’s central currency, cannot be formally devalued, but must make it appear an unavoidable accident.

Over the past couple of decades, the dollar, quite deliberately, has been loosely managed to accommodate various crises that did not happen (remember Y2K?), as well as some that did, and surprises that turned out happily (including the peaceful integration of Russia and Eastern Europe into the free world’s economy).

Over this span, the dollar was permitted to drift upward in value and become increasingly overvalued.

This year, the U.S.’s broadest measure of our external debts, the current account deficit, rose above 6 percent of GDP, approaching a trillion dollars. International alarm bells rang. The coincidental collapse of junk “subprime” mortgage debts was blamed, and the dollar has been devalued. American tourists visiting gay Paris discover the pain of the $10 cup of coffee (no refills).

The external imbalances America permitted itself could be largely corrected in a couple of years. The internal imbalances, as in the depressed housing sector could take much longer. The current devaluation means the dollar’s external value would be abut 60-70 percent lower than a decade ago. This assumes, of course, that the rest of the world will continue its economic expansion and permit American exporters to enjoy their competitive advantage.

This assumes too much, I’m afraid. Highly export-dependent economies such as the European Union, Japan and China are working furiously to find non-market means to reverse America’s advantage through disguised protectionism. The trade game is unending. Never “won” definitely, it consists of relentless competition. America is competing again.

Major League Baseball will survive its doping scandal because no one, least of all cynical adult fans, really cares what absurdly over-paid professional ballplayers do to themselves to enhance their performance and pay, and our pleasure, any more than audiences care about coked-up musicians or strung-out dancers. Rules are assumed to be made to be bent, broken and evaded in all walks of American life.

Baseball, once the ruling passion of my adolescent life in Queens, has become for me a sometime peripheral interest, reawakened during the fall playoffs. From 1946 to abut 1960, I rooted for the Brooklyn Dodgers during their era of transcendent greatness – the glory years of Jackie Robinson, Pee Wee Reese, Carl Furillo, Duke Snider and Carl Erskine.

The Dodgers were a blue-color team. Robinson enjoyed the highest salary at a mere $40,000. During the winter, Furillo worked in the neighborhood at his uncle’s butcher shop. Phil Rizzuto came back to teach at Richmond Hill High School. Almost every October, the Dodgers or the Giants or the Yankees – always the lordly, despised Yankees -- would make it to the World Series – and everything else would stand still until the World Champions were crowned.

In contemporary America, baseball is a game of the suburbs, organized by adults and force-fed at too early an age to small children who are not mature enough physically to play it well competitively and who will drop it in their teens for soccer. As a result, serious amateur baseball is played mostly in small towns and villages and in blue-collar, downscale urban settings and in traditional schools and colleges. In New York, the self-starting gang of teenagers who play well as a uniformed team against other neighborhood teams is an anachronism nowadays like delivery boys or mobile knife sharpeners or door-to door-peddlers.

I remember how my team, dressed in our red and white Richmond Hill Cardinals uniforms, would deliver the Long Island Press on our bicycles at dawn on Sunday mornings and then travel by city bus, south on Lefferts Boulevard to Baisley Park, where we would play a double-header in the Queens Alliance League. None of us ever got arrested or into serious trouble – we were too tired.

Those were simpler times, of course – or so it seemed. As I replay in my mind the unforgettable games of that era, the stolen bases and game-winning home runs and the thrill of being respected for what I contributed, I realize how much baseball taught me about growing up without much money in what I now think of as “the People’s Republic of Queens.”

“Cheating in baseball is just like hot dogs, French fries and cold Cokes,” Billy Martin, the pugnacious former infielder and manager once declared, a sentiment echoed, in an interview, by the baseball historian John Thorn, whose book “Baseball in the Garden of Eden,” is to be published in the spring, according to Bruce Weber in last Sunday’s New York Times Week in Review.

“Cheating is not merely countenanced in baseball,” Mr.Thorn said. “It is loved.”

At the heart of our Richmond Hill community in the 1950s was baseball, invented around the time of the Civil War as “the New York Game.” Baseball remains at the heart of America.

Turnout in the January 3rd Iowa competitive precinct caucuses is expected to be somewhat lower than the average 15 percent of registered voters in recent years. On the Republican side especially, Mitt Romney, the early free-spending frontrunner who has invested $7 million, has fizzled and former Arkansas Governor Mike Huckabee has jumped into the lead despite the fact that he felt obliged to apologize to Romney for a remark he made about the Mormon religion in a long New York Times Sunday Magazine article.

Peggy Noonan writes in the Wall Street Journal “In my lifetime, faith has been a significant issue in presidential politics but not the sole determinate one. Is that changing? If it is, it is not progress. ”

Has the presidency become a quasi-religious office? Huckabee, 53, has spent half his career as a Baptist preacher, and half as a politician. The rest of the field seems to be underwhelming most Iowa conservatives, who are cool to Arizona’s Senator John McCain and New York’s former Mayor Rudy Giuliani. And yet McCain just won the editorial endorsements of the Des Moines Register and a hundred retired generals and admirals. The latter count heavily in the upcoming South Carolina primary, January 19. (A similar group of brass hats passed over McCain in favor of Bush in 2000.

Giuliani, who strutted into Iowa looking like a tough-guy world beater, has gotten into trouble with women voters who have reacted to his three marriages and estrangement from his children. Rudy is no longer strutting.

Among the Democrats, Hillary Clinton also received the Register’s valuable endorsement but she no longer looks quite so “inevitable.”

Barack Obama, launched by Oprah’s celebrity, has drawn even with Hillary and alarmed Bill Clinton enough to attack him personally. The beneficiary of the Clinton-Obama clash is smooth-talking John Edwards, whose populist appeal gains resonance as the economic issues emerge as most urgent.

Iowa is usually right about the identity of the leading candidates but not necessarily about who will win. In 1972, Iowa democrats gave Senator George McGovern a better-than-expected second place showing against frontrunner Edmund Muskie* and in 1976 with Georgia’s little-known Governor Jimmy Carter. Carter’s follow-up win in the New Hampshire primary catapulted him into the presidency. I predict an upset win for Edwards in Iowa and a surprising showing in New Hampshire.

Among younger Democratic voters, without Bush to vote against, there’s little incentive to come out in the caucuses or the general election, says voter turnout expert Curtis Gans of American University in Washington, DC. He says the “intensity factor” is very small so far.

In the end, how important is Iowa? No delegates are selected. In the end, the whole thing may be determined by the holidays and the weather: volunteers reluctant to ring doorbells over Christmas and the strength of each candidate’s infrastructure to get voters out during a possible snowstorm.

*Corrected from earlier version

My Bank of America Visa charges 32.24 percent on unpaid balances. Why? Because they can.

And because, in these credit-squeezing days, Bank of America is so computer-driven and afraid of default that it is lumping together their regular “good pay” accounts with the people who are skipping payments. In New York City, interest rates at this level are usually associated with guys with flat noses who work for the Mob.

As consumer debts go sour, bankers belatedly squeeze credit and tighten access for individuals and small businesses, causing a delayed ripple-effect. This weakening trend can prompt panicky creditors into extreme responses – for example, Bank of America.

The credit card industry, which is being investigated by the Senate’s Government Operations Subcommittee, is a tight oligopoly of five financial giants. In addition to Bank of America, the Plastic Gang includes J. P. Morgan/Chase, Citigroup, BankOne and Wells Fargo Corp, which together control 80 percent of consumer credit cards in the U.S. This vast aggregation of financial power has exercised proportionate clout on Capitol Hill and within the Bush Administration.

Senator Carl Levin, the veteran Democrat from Michigan, is unimpressed with the bankers and their lawyers in the $1000 custom-made suits who come to his hearing room. Looking down from the dais through his signature half-moon glasses, the savvy, unflappable investigator Levin and his hard-working staff have assembled a vast amount of information on the inner workings of the credit card industry. They’ve learned that no human being is involved in the computer-automated “scoring” of a consumer’s all-important FICO rating. Anything the computer is programmed to disapprove, such as an underpayment, late payment or even an application for another competing card, pushes up the cardholder’s FICO score. Once it rises above 600, watch out.

The contagion spreading from the subprime mortgage crisis to the banking credit squeeze into other sectors of consumer debt seems to be both cyclical and structural – a double-whammy. The housing cycle is correcting after five years of over-expansion; at the same time, the typical consumer’s balance sheet is weakened by the unseen but acutely painful destruction of phantom residential housing equity “wealth.” Not only is refi borrowing to sustain consumption cut off by falling house values; consumer credit card companies are belatedly cutting back on access to cash advances and even cutting off cardholders whom the computers deem likely to default. Thus, the most reckless consumer credit expansion in modern U.S. history is being driven toward the cliff of default by the panicky creditors.

Eventual write-offs of uncollectible consumer debts by the mega-banks and credit card companies are just beginning, and estimates of the eventual write-down of bad assets run as high as 70-80 percent of trillions of dollars. Even the largest banks and credit card companies are enormously under-capitalized to absorb future losses of this magnitude. In the process, legal battles will persist for years and perhaps decades. Everyone underestimates the factor of time to heal the excesses and write off the losses.

Recently, a friend told me to just call and protest and threaten to get a Visa card somewhere else and they will quickly lower your rate rather than lose your business.

Well, it didn’t work!

As I warned November 14th, America’s consumer-led economy is slowing down and sliding toward at least a “growth recession” – that’s when the economy’s “normal” growth rate, assumed to be about 2.5 to 3 percent annually, slips below 2 percent (or less) and remains there six months or longer. A straightforward recession is defined as a period of six months or longer when the economy does not grow, but contracts. The last U.S. recession ended in early 1991.

Like so much else in American life, our methodology for measuring the economy’s performance dates back to World War II and the early postwar era. Between 1939 and 1960, every aspect of the nation’s economic, social, political and cultural life was transformed. America went from lingering depression and the surprising, sickening recession of 1937, which cast doubt on every New Deal assumption, to the post-Pearl Harbor massive, flat-out inflationary stimulus of total wartime mobilization. The economy was put under government planning and priorities, producing full employment (and explosive new opportunities for women and minorities) because the war had removed for the duration some four million able bodied men from the civilian labor force into the armed services. In that hectic, heady era was born the macroeconomics of Gross Domestic Product (GDP), a grab-bag of guesstimates and overstatements that sounded much more precise than it ever was.

Enough economic mini-history. In the here and now, John Crudele, the New York Post’s savvy economic columnist, writes (December 4th): “The economy has probably been slowing for 18 months.” Citing recent overstatements, he notes that the federal government’s Bureau of Economic Analysis says GDP grew by an “astounding” 4.9 percent rate in the third quarter, on top of a “very healthy” 3.8 percent expansion in the second quarter. But in the current fourth quarter, despite holiday spending, GDP is slowing dramatically, according to Wall Street’s top economists, falling to perhaps only 1.5 – 1.7 percent, a truly dizzying deceleration from overstatements signaling the advent of a “growth recession.”

We eccentric Americans keep our economic books, using guesstimates of guesstimates to arrive at backward-looking super-guesses of where GDP has been. We will not know whether we’ve slid into a recession until it is well under way. The august National Bureau of Economic Research has to detect the statistical slowdown retrospectively, identifying the trough and then measuring the duration of negative growth quarter-by-quarter. Going into the 2008 national election year, the NBER is not exactly eager to play the Grinch that stole prosperity.

What we see are cumulative data points: one poll shows 40 percent of consumers think we’re in a recession now; another reports 40 percent expect a recession next year. The Wall Street Journal (December 8th) reports: “Evidence Grows That Consumers Are Pulling Back.” The Reuters/University of Michigan and Conference Board surveys indicate that consumer sentiment in early December declined sharply in the Michigan poll to a level lower than any month since 1992 – except for the month following Hurricane Katrina.

Personal and household incomes in recent years have grown modestly. Consumer debts continue their relentless rise. As a result, the defaults and foreclosures that rang alarm bells in subprime mortgages are spreading to other forms of consumer debt, such as auto loans and student loans.

So far, employment, a lagging indicator, is holding up. Unemployment stayed at 4.7 percent in November for the third consecutive month. Average hourly wages rose just 3.8 percent from a year ago, to $17.63. According to the Labor Department’s notoriously inaccurate estimates, non-farm employment rose by 94,000 jobs in November, following revised increases of 170,000 in October and 44,000 in September. Initially, the Labor Department reported gains of 166,000 and 96,000. Private sector jobs increased by only an anemic 64,000 – down by 56 percent from the average monthly gain a year ago. This is not surprising; corporate profits are flat after years of strong growth. In early 2008, economists foresee escalating layoffs. Next year, the unemployment rate is expected to rise to 5 percent or more and by then, we will know whether we are in a recession.

We can see clearly the beginning of our economic and financial troubles, but not yet their outcome. Last summer, the financial crisis in subprime mortgage debt that had been bundled into complicated U.S. financial assets called derivatives was revealed and shook the world’s confidence. Private demand for U.S. government debt fell, and that caused the dollar’s exchange value to sink. The U.S. credit crunch quickly turned into a credit squeeze. Big banks, whose excessive speculation had triggered the subprime crisis, have belatedly turned extremely selective in rolling over existing loans and making new ones. Big banks are afraid even to lend to each other, worsening the crunch.

For the first time since 1991, when the last U.S. recession officially ended, the “R” word is heard on Wall Street, Main Street and in global financial markets. On September 18th, the Federal Reserve cut short-term interest rates by one-half percent, the Fed’s first policy cut in four years. On October 31, the Fed cut another one-quarter percent. Each time, markets rallied, and then slumped again. On Tuesday, the Fed met again and announced another quarter-point rate cut, reducing the fed funds rate to 4.25 percent.

The Fed’s policy committee meets again on January 30th and further rate cuts are expected, perhaps even before the scheduled meeting. “If financial conditions don’t improve dramatically,” says a former New York Fed official, “they might have to cut before the meeting.”

With the Fed cutting rates to head off a recession, the dollar’s value, which has fallen 40 percent against the Euro so far this year, steadily weakens. For their own reasons, many of the world’s largest foreign dollar-holders – the largest, China has about $1 trillion in dollar reserves – are buying greenbacks. They want to manipulate the value of their own currencies to remain at more competitive exchange rates (“pegs”) against the dollar. The Fed can directly intervene in the currency markets only when the Treasury orders it.

Treasury Secretary Hank Paulson, who came to Washington after making a $750 million fortune at Goldman Sachs, has proposed a top-down rescue of the economy beginning with the mega-banks and a very costly bailout of their unmarketable assets – so-called derivatives stuffed with junk mortgages that are known as structured investment vehicles (SIVs). That proposal fell flat. Now Paulson is faced with soaring mortgage delinquencies, defaults and perhaps almost one million foreclosures in 2008 and after.

Paulson has drafted and President Bush has proposed “temporarily” freezing interest rates on selected troubled sub prime residential mortgages. As many as an estimated 1.8 million adjustable mortgage loans are due to reset at higher rates in 2008. As Alan Abelson commented in Barron’s (December 3): “…an awful lot of the problem with sub prime mortgages is that the folks in the houses who are in arrears or are being foreclosed can’t meet even existing interest payments, much less higher ones.”

Paulson’s plan is sketchy. Nothing will happen on Capitol Hill, say our sources, until after the November 2008 elections. So that pushes the realistic time-frame for serious debate to begin on “emergency” actions by the executive and legislative branches well into the first quarter (or later) of 2009. That’s a very long time to trust our luck.

Stress fractures from failing U.S. credibility radiate across the global financial and geopolitical landscape. While the subprime mortgage mess drags on year after year, the effects will constrain the U.S. consumer economy. So will other forms of consumer debt now going sour, such as student loans and auto loans. All kinds of American debts are becoming suspect.

Brad W. Setser, Fellow for Geo-economics at New York’s Council on Foreign Relations, believes the U.S. should look beyond sectoral crises and focus on maintaining broad domestic economic stability. “…I would put a great deal more emphasis on concerns that U.S. weakness may be the leading edge of a broader global slowdown,” he says. He is referring to the big “R” word.

As we are always reminded, 70 percent of the America’s GDP is consumer spending, most of it financed by debt. The rest of the world has invested its savings in America’s public and private IOUs. An American default would rub the world overnight; rising U.S. inflation is lower but just as deadly.

In the next phase of the expanding crisis of the American political economy, the rest of the world will form a de facto creditors’ committee and attempt to negotiate with Washington through Wall Street – a 19th century approach to a 21st century problem.

In 1947, when the Central Intelligence Agency was created, President Harry S. Truman, who had seen first-hand the operations of OSS, the CIA’s precursor, condemned it as “the American Gestapo” and said it had no place in our nation’s life. He said the CIA would poison us and would have to be removed from our government.

The CIA is now actually only a small part of America’s overall intelligence community comprised of 16 spy agencies. Like an iceberg, most of the community’s budget is submerged, concealed within the Pentagon’s vast spending and under the control of the military services.

The late Senator Daniel Patrick Moynihan of New York had a rare, sympathetic understanding of the fundamental difficulties of operating an effective intelligence and espionage community within a democratic government under the rule of law.

In his book, Secrecy, Moynihan tells how using unclassified information, he came independently to the view years in advance that Russia was falling apart. Yet, if the intel community’s armies of classified analyses had been published, reviewed and critiqued by outside peers and experts in academia, Moynihan speculated their misconceptions could have been challenged and corrected, to the nation’s benefit. As it was, they had a vested interest in supposing the Soviet Union was a permanent threat – and therefore they had a permanent career.

Moynihan understood that secrecy exerts all kinds of human appeal, separating the knowing few from the unknowing many. Secrecy prevents accountability. When the secrets at stake are of the highest national importance and urgency, as in efforts to head off terrorism, even very smart people can err and fail.

The 9/11/01 terror attacks on the U.S., according to informed senior insiders, ought to have been detected by the comprehensive “signals intelligence” (“SIGINT”) of the “ear in the sky” – the National Security Agency (NSA), which dwarfs the CIA. Prior to 9/11, the FBI and CIA also had “human intelligence” (“HUMINT”) clues, signs and potential warnings, but failed to connect the dots.

A guilty sense of this failure and a desire to compensate hung over the intelligence community in the months and years immediately after the attacks. So it was that in March 2002, the CIA captured and secretly sent to Thailand (remember the movie Rendition) for “harsh” interrogation two suspected operatives of al Qaeda. The first detainee in CIA custody was Abu Zubaydah; the other detainee’s name was not disclosed. The CIA videotaped the interrogations.

Afterward, the CIA lied repeatedly to Congressional intel committees and the 9/11 Commission, denying the existence of these tapes. In 2005, as Congress investigated reports of CIA rendition of terrorism suspects, secret prisons and use of torture, the CIA’s head of the Directorate of Operations (covert operations), Jose A. Rodriguez, Jr., made the decision to destroy the tapes. (Rodriguez has since retired.)

A spokesman for Representative Peter Hoekstra (R-Mich.), Chairman of the House Intelligence Committee, between 2004 and 2006, says that he was “never briefed or advised that these tapes existed or that they were going to be destroyed.” Representative Jane Harman (D-Calif.), the ranking Democrat on the intel committee between 2004 and 2006, says she told CIA officials several years ago that destroying any interrogation tapes would be “a bad idea.”

Representative Harman continued: “How in the world could the CIA claim that these tapes are not relevant to a legislative inquiry? This episode reinforces my view that the CIA should not be conducting a separate interrogations program.”

Congress learned belatedly that the U.S. military conducted counter-terrorism interrogations, subject to the rules laid down in the Army’s Field Guide, while the CIA conducted separate interrogations under murkier rules. CIA Director General Michael Hayden said December 7th the agency had acted “in line with the law.” Hayden said the tapes were destroyed because, if they had been made public, they would have posed “a serious security risk” to the interrogators and their families from retaliation by al Qaeda and its sympathizers. What does “in line with the law” mean?

Tom Malinowski, Washington Director of Human Rights Watch, said General Hayden’s claim “is not credible,” noting that “millions of documents in CIA archives, if leaked, would identify CIA officers.” The only difference here is that these tapes portray potentially criminal activity. They must have understood that if people saw these tapes, they would consider them to show acts of torture, which is a felony offense.”

Senator John McCain, who was brutally tortured as a POW by the North Vietnamese, rejects any rationalization of the use of torture to “fight terrorism.” He says it would be certain to blowback on U.S. servicemen who became captives.

After 60 years and recurrent scandals, the CIA survives, but only through the vigilance of Congress, demanding full accountability from this alien entity. The fading Bush Administration is the political target of the slowly unfolding Congressional investigation into the CIA’s anti-terrorism excesses. The agency itself, with General Hayden’s admitted cover-up, is the permanent institutional target. Sources within the intelligence community’s hierarchy say Hayden is the hand-picked spymaster selected by Vice President Dick Cheney.

It is interesting that Abu Zubaydah gave us the information we needed, not under torture, but when he confided to a fellow Arab prisoner whom he mistook for an ally -- that underscores the success of “false flag” techniques to get captives to talk.

To win the War on Terror, Americans must be true to our values in the weapons and tactics we use – or we lose.

Before Senator Barack Obama won the endorsement of the cosmic celebrity Oprah Winfrey, he was expected to do well in the January 3rd Iowa caucuses. A December 5 USA Today-Gallup Poll showed that Clinton's support had dropped to 39 percent from 50 percent, while rival Obama was up to 24 percent from 22 percent. Why not Oprah for President?

Well, no. The diva of daytime TV, with eight million daily viewers, admitted she felt like “I’m out of my pew, out of my terrain….I’m nervous.” It didn’t show. Her crowds went crazy. Thousands of women, including many who had no contact with the Obama campaign in Iowa, signed up on Oprah’s web-site for tickets to her appearances in Des Moines and Cedar Rapids. More than 1,300 volunteered to spend at least four hours on the campaign. All in all, Oprah drew nearly 70,000 people over the weekend at two events in Iowa, one in South Carolina and one last night in New Hampshire. Roughly 30,000 people came to the University of South Carolina’s football stadium – a record attendance for a campaign event in that state.

The New York Post reminds us that Oprah’s endorsements have made the books of long-dead authors into best-sellers and cleared the shelves of products like Ciao Bello gelato. After she featured Dr. Phil McGraw on her show, he got his own show and his books became best sellers.

Political experts agree that celebrity endorsements usually have little influence upon voters. The big question is: will Oprah’s incredible draw transform into Obama votes? Now, no matter how well he does, the “Oprah Effect” will be the explanation.

It may not matter. We continue to hear reports that New York’s Mayor Michael Bloomberg intends to enter the race in March, if he perceives he can win. When the staleness of the frontrunners has depressed everyone, he could borrow Bobby Kennedy’s slogan: “They are tired and I’m fresh.

Goaded by Mike Huckabee’s rise in the polls in Iowa, where the former Baptist minister has emerged as his strongest challenger, former Massachusetts’ Governor Mitt Romney deliberately injected his Mormon faith into the January 3rd caucuses.

In a sometimes eloquent but unoriginal televised speech that mentioned Mormonism only once, he concentrated on upholding America’s constitutional freedom of belief – which everyone accepts – in language that any presidential candidate would be comfortable with.

To fulfill his strategy and maintain the viability of his candidacy, Romney must win in Iowa (January 3) and New Hampshire (January 8). Whatever his inner motives for saying he would bare his soul, his speech did not shed any light on the mysteries of Mormonism – and therefore he will continue to face the same questions he left unanswered. So why raise the subject?

A false parallel is drawn between Romney and Senator John Kennedy’s speech in 1960 as a Roman Catholic to the Houston ministers. JFK had already won the Democratic presidential nomination and spoke as a potential president. Romney has yet to win anything and therefore benefits from the universal visibility his speech gave him. Did he deliberately create a false expectation? As Joe Kennedy once said: “There are no accidents in politics.”

Romney, who made his $250 million personal fortune as a Boston management consultant prior to entering politics, shrewdly saw this speech as an opportunity to advertise himself as a devout Christian, thereby implicitly answering the accusation that Mormonism is a “cult.” By failing to live up to the hyped advance billing from his camp, the speech positions Romney as a semi-victim of persecution from narrowly religious and aggressively secular sources. He is nothing of the sort.

George Romney, Mitt’s father, ran as a former Michigan Governor for the 1968 presidential nomination and never found it necessary to defend his Mormonism as he lost to Richard Nixon. This year, Mitt Romney said he would appose any religious test for the presidency but then left the complicated subject of Mormonism to the religious experts and theologians.

Mitt Romney is a supple politician who has been on both sides of abortion and same-sex marriage during his career. He wants to be a presidential candidate who proclaims: "Freedom requires religion, just as religion requires freedom,” and at the same time cries “foul” as a victim of bigotry.

As the U.S. struggles with a domestic credit crisis spreading to global markets, it is no time to play nasty, crippling partisan politics with the Federal Reserve Board’s ability to function and make crucial financial policy decisions.

That’s what Sen. Christopher J. Dodd of Connecticut, the Democratic Chairman of the Senate Banking Committee, is doing. The Fed’s policy-making Board of Governors is operating with two of its seven seats vacant. President Bush submitted the nominations of Elizabeth Duke and Larry Klane to the Senate for confirmation last spring, but Dodd has bottled them up in his Committee. Aides say he intends to hold them through the November 2008 election, when he hopes a Democratic President will be elected. If so, that President would be able to fill as many as four Fed seats.

According to veteran Fed-watcher David Kotok of Cumberland Advisors, in addition to the two Bush nominees Dodd is holding up, a Democratic president could make Fed Chairman Ben S. Bernanke a political scapegoat and decline to reappoint him as Chairman. That would cause him to resign the Chairmanship in 2009 as well as his seat on the Board, creating two more vacancies to fill.

Shortchanging the Fed at a critical time may seem clever partisan politics, but it’s shortsighted and potentially dangerous for America’s economy and the dollar. The Fed’s Board sets the discount rate and conditions for emergency loans to troubled banks, of which there are many with household names today.

Under the Fed’s “sunshine” rules, when any three of the Board’s five sitting members assemble, it must be considered a formal meeting. If Bernanke “were to call such a meeting,” Kotok writes, “markets would be boiling about why and what. They are already fragile and reacting to any rumor.” As the result of Dodd’s politics-first tactic, essential internal Fed “dialogue is restrained at the very time it is most needed to be freewheeling and expansive.”

On November 8th, Chairman Bernanke came as close as any central banker in our memory to an announcement of the likely arrival of a recession. In his testimony before the Joint Economic Committee, Bernanke noted that the policymaking Federal Open Market Committee (FOMC) found “financial conditions had improved somewhat after the September (half-point rate cut) … But the market for nonconforming mortgages remained significantly impaired and survey information suggested that banks had tightened terms and standards for a range of credit products….” The FOMC continues to have two vacant seats.

Only weeks ago, the crisis in the “subprime” mortgage sector suddenly burst onto the global economy stage. In carefully measured words, spoken with academic precision and in the understated past tense, Bernanke told the JEC: “…Overall, the FOMC expected that the growth of economic activity would slow noticeably in the fourth quarter from the third quarter rate. Growth was seen as remaining sluggish during the first part of the next year….”

Capitol Hill speculation on Bernanke’s tenure and likely Democratic replacement reduces him to lame-duck status with more than a year left in his term. During the televised presidential debates, butter wouldn’t melt in Senator Dodd’s mouth as he invoked the national interest. Let Senators Dodd and Clinton and former Senator Edwards answer this question: Why is the Fed being held hostage?

Playing cheap partisan politics with the Fed’s operations deepens the credit crisis and risks effective stimulus of our slowing economy.

An anti-war intelligence consensus within the Pentagon was at last made public December 3rd when a dramatically revised National Intelligence Estimate (NIE), representing the collective judgment of 16 spy agencies, declared “with high confidence” that Iran had halted its nuclear weapons program in the fall of 2003 and admitted that “we do not know whether it currently intends to develop nuclear weapons.”

This entirely legal yet invisible military-led political resistance was led by the National Intelligence Council Director, Admiral Mike McConnell, and his team of crack analysts, backed by the Joint Chiefs of Staff. These patriotic and dedicated professionals of the military intelligence community opposed the Bush-Cheney rush to war with Iran. At the risk of their careers, they have now forced the White House to face the facts. Congress mandated the release of this assessment despite White House foot-dragging. The NIE contradicts the Bush-Cheney line that Iran poses an imminent threat to the United States

The highly sensitive NIE document has been through repeated drafts for more than a year, our sources say. Cheney ordered further study and rewrites, seeking more bellicose findings. Finally, Admiral McConnell’s analysts reportedly warned their White House contacts that if the NIE study was not promptly released, it would be leaked. This display of resolve compelled Cheney and National Security Adviser Stephen Hadley to back down.

The White House wants to avoid a repeat in Iran of the 2003 debacle over Iraq’s non-existent Weapons of Mass Destruction (WML). According to CNN that broke the story, the CIA has revealing videotapes showing the limitations of Iran’s Natanz nuclear facility and – a rarity – first-hand confirmation from credible “human intelligence” (HUMINT) including an Iranian general who recently defected.

Interestingly the estimated date for the halt to Iran’s nuclear program – Fall, 2003 -- coincides with the U.S.’s blitzkrieg takeover of Saddam Hussein’s Iraq. Iran reportedly sent out “feelers” for a secret deal to forestall an American invasion.

Was the halt to Iran’s nuclear activity part of an unpublicized deal with the U.S., suddenly fully credible as the quick conqueror of Iraq? Could Washington have made a comprehensive “peace” with Iran in 2003?

Bush at his news conference Tuesday appeared to be in total denial mode, misrepresenting the NIE’s findings as “a warning signal” that the U.S. should continue to mistrust Iran. We now know that the U.S. had no justification for a pr-emptive attack against Iran – yet Bush, whose credibility is in tatters, refuses to face reality and change his position.

Bush is an embarrassment to the presidency and a dead weight on the backs of his party in the 2008 presidential campaign.

In an unprecedented political move, Karl Rove, President Bush’s “boy genius,” chose Sunday’s Financial Times to give Barack Obama some unsolicited advice in the form of an open letter.

Rove said that Obama appears “weak and ineffectual” and should “stop acting like a vitamin-deficient Adlai Stevenson.” Rove also said: “…focus on the fact that many Democrats have real doubts about Hillary. They worry she cannot win, will be a drag on the ticket and that if she got to the White House it would be a disaster.” Rove believes that “she [Hillary] is beatable” but Obama needs to raise his game. Obama should “blow the whistle on her when she tries to become a victim….Do it with humor and a smile and it will sting even more.”

What’s going on? After the 2000 election, I met Rove who quoted at flattering length from two of my books and told me that he had wanted to work for Richard Nixon, but was too young. Rove never stopped trying to impress anyone who might be useful to him, even a retired Nixon-Reagan operative.

The pre-Watergate Nixon of the 1968 campaign vintage would have snapped up Rove even if he was still in knee pants. Rove had the same simplistic hatred of his enemies that drove Nixon in his long, cheerless career as an elected politician who was shy and reclusive around people.

Totalitarian European and Asian politics is about destroying your enemies and trying to survive if you fail in a deadly winner-take-all. In Nixon’s White House, that kind of thuggish politics prevailed until the president led the Watergate burglary cover-up, lied to his crucial ally conservative Senator Barry Goldwater about it, and faced certain impeachment unless he resigned.

Rove’s generation of College Young Republicans embraced the partisan post-Watergate myth that the despised “liberals” had brought Nixon down, rather than the truth that he had caused his own downfall. They helped organize the Reagan landslides, becoming expert vote-gathering technicians in the states, but were far removed from Reagan’s Washington and his moderate pragmatic and balanced bi-partisan approach to governing, which made conservative Democrats like party boss Bob Strauss and AFL-CIO president Lane Kirkland faithful allies of the Gipper and his Big Tent brand of center-right politics.

The small, exclusive pup-tent ideological politics of the hard-core Republican Radical Right would never have been enough to deliver to Reagan his huge 1980 and 1984 electoral majorities and his mandate for a peaceful end to the Cold War abroad through rebuilt U.S. military strength and a respite from overweening bureaucratic government regulation at home. The Reagan majorities were enormously swelled by like-minded Independents and Democrats moving to the congenial Reagan center-right.

The post-Reagan polarization of American politics and the Republican presidential merger with Christian fundamentalism caused a needless political and strategic retreat. The Clintons exploited it and were able to corner the vital center that the post-Reagan Republicans foolishly abandoned under the influence of rightist technicians such as Rove.

Modern American politics is about winning, losing and playing the game, again and again, as Rove did so well. His electoral achievements will be analyzed for years to come: He made Texas a Reagan Republican state not only in presidential elections but also for state offices, advising George W. Bush, the first governor in Texas history who was elected to consecutive four-year terms, 1994-1998.

His first national victory was the 2000 Republican primary, when Bush won over Senator John McCain, and then went on to defeat Al Gore. To win the 2002 mid-term elections, Rove exploited 9/11 and manipulated the “war on terror” by turning on the Democrats who had supported the invasion of Afghanistan and the USA Patriot Act. “We can go to the country on this issue,” he predicted, “because they trust the Republican Party to do a better job of protecting and strengthening America’s military might and thereby protecting America.”

Rove’s time essentially ended with Bush’s victory over Senator John Kerry in 2004 – an enormous get-out-the vote effort. Notwithstanding his recent, parting words about a Republican victory in 2008, Rove had to tip-toe out the White House’s back door because he was not about to find out if he could possibly organize another national GOP victory from the party’s now shrunken, war-ravaged and economically devastated base.

A Clinton spokesperson asks: “Does he [Rove] think it will be easier for Republicans to run against the unknown gentleman from Illinois?”

Rove – the architect of a grandiose plan to realign American politics under right-wing Republican domination – has been accused of inflicting lasting damage on our nation. This inflates his ego and seeming importance. Rove is mean, negative and phenomenally long-memoried and apparently, enjoyed his role so much with Bush that he has decided to switch parties when it comes to giving advice. The Democrats are welcome to him.

Why has China repudiated the historical principle that calls on all nations to assist ships in danger at sea and blatantly insulted the United States?

In two separate incidents, the Chinese government refused U.S. warships access to the Hong Kong port for a routine visit. Some 50 U.S. warships visit Hong Kong annually. In early November, two U.S. minesweepers – relatively small vessels – asked permission to enter the port in order to avoid a storm and refuel. Beijing refused. Admiral Gary Roughead, the U.S.’s chief of naval operations, said the Chinese offered no explanation. A U.S. tanker refueled the minesweepers.

Later in November, the Chinese government, at the last minute, withdrew previous permission for the U.S. aircraft carrier, the Kitty Hawk, which is based in Japan, to make a long-scheduled port call in Hong Kong at Thanksgiving. Hundreds of family members of the crew aboard the Kitty Hawk had flown to Hong Kong for the visit. Beijing abruptly refused access, then changed its mind but it was too late for the carrier to turn around and return.

CNN reported Sunday that U.S. military officials say China has refused nine U.S. Navy ships and one Air Force jet entry to Hong Kong in the past month and speculated that the reasons may be China’s concerns about U.S. arms sales to Taiwan and President Bush’s October presentation of a Congressional Gold Medal to the Dalai Lama.

The United States has filed a formal protest with China over their government’s “inhospitality.” Whatever, how often must the U.S. turn the other cheek to maintain, in the words of Admiral Timothy J. Keating, commander of American forces in the pacific, “a military-to-military dialogue to avoid any calamity in relations?”

That protest will be filed you know where. China is the largest foreign dollar-holder and U.S. creditor and has $1.4 trillion dollars in reserves, growing at the rate of an estimated $500 billion a year.

Better than verbal protest would be a decision to reduce the outflow of dollars to China dramatically over the next two fiscal years. Our presidential candidates ought to acknowledge that there are far too many dollars circulating in the world – and dangerously too many are in the hands of America’s enemies.