Guests: Former Attorney General Michael Mukasey
Andrew McCarthy, Senior Fellow, National Review Institute

First, the Mumbai attacks were a different kind of Jihadi warfare – an urban paramilitary attack that up until Mumbai, we’ve only seen in war zones like Falluja or Baghdad. Previous terrorist attacks on countries at peace have been by suicide bombers – one-off attacks that were over once the bomb went off. The Mumbai attack was different. The attackers’ first objective was to take out India’s counterterrorism officials so they could fan out around Mumbai and put the entire city under siege for days.

Is this a new modus operandi for Jihadi terrorists – urban warfare with paramilitary units? If so, no city in the world is safe, especially coastal cities where security is usually provided by customs officials more concerned with checking passports than defending against a terrorist attack.

Second,the Mumbai attack was a major black eye for the Indian government, and they will have no choice but to respond. Prime Minister Singh has been criticized in the past for being soft on terrorism, now he’ll be blamed for failing to protect his people. If as seems likely we find the terrorists came from Pakistan and have some connection with rogue or former elements of the Pakistani intelligence services – tensions between India and Pakistan will escalate as they did in 2001-2002 following the bombing of the Indian Parliament in New Delhi by Pakistani militants. After that bombing India and Pakistan mobilized, moved troops to the border and came dangerously close to war, potentially involving nuclear weapons.

Third,an escalation of tensions between India and Pakistan will make things much more difficult for us in the Afghanistan War.Osama bin Ladin and al Qaeda have made the desolate tribal regions along the Pakistan/Afghan border their home and are using it as their launching pad for attacks in Pakistan and other parts of the world.Pakistan’s current president, Asif Ali Zardari, has cooperated with us far more than his predecessors in fighting al Qaeda and has put most of his military along that northwestern border. Were tensions with India to escalate, Pakistan would have to divert its already overstretched military away from fighting the war against al Qaeda on its western border and move them its eastern border to defend against India. It would mean fewer troops on the Afghan border, and a Pakistani leadership preoccupied with an immediate crisis with India, rather than helping us in the Afghanistan War.

Finally,Pakistan is a fragile country. Its economy is in shambles, with high unemployment and spiraling inflation. Its currency almost collapsed in November. Its civilian president is locked in a political battle with the military and intelligence services over who controls foreign policy. Al Qaeda in Pakistan is mounting a growing insurgency and launching terrorist attacks inside the country. President Zardari’s wife, former President Benazir Bhutto, was assassinated less a year ago and as her successor his hold over government is tenuous.

As a bipartisan congressional report pointed out this week, Pakistan is a country that seems to be not just on the brink of disaster, but also where many of the world’s terrorists hail from. And most important of all it is a nuclear power, with some 90 nuclear weapons in its arsenal.

So while an India-Pakistan crisis presents the threat of a potential nuclear confrontation between the two, an equally disturbing development would be if the Pakistani government lost operational control of its nuclear weapons. We know al Qaeda and Osama bin Ladin personally want to get their hands on a nuclear weapon or two. We know some elements of Pakistan’s intelligence services and army might be compromised with pro-Taliban and al Qaeda sympathizers. If those two come together – terrorists plus nuclear weapons – it would be the doomsday scenario the world has feared since September 11, 2001.

But now the dust has settled. The year-long national diversion is over. We can turn off the cable news shows, forget about the latest media rock stars, and get back to our normal lives. Office politics will replace national politics, Monday night football will replace Chris Matthews and Wolf Blitzer, and we’ll go back to carpooling the kids to soccer games instead of driving to political rallies.

Now that we’re back to real life, what do we have? Like Dorothy in the Wizard of Oz, we know we’re not in Kansas anymore, but we’re not quite sure where we’ve landed. Our home values have plunged, and our 401K plans
have just become 201K plans. Neighborhood yard sales now feature flat screen TVs and speedboats along with old Cuisinarts and baby cribs. The prices on eBay are half of what they were just two months ago.

You actually know people who have lost their jobs – and who have few prospects for new ones. A year ago the best businesses to be in were real estate and construction. You could borrow cheap and easy money, build a house – for yourself or as an investment– and be guaranteed to sell it at an enormous profit. It was like shooting fish in a barrel. But Home Depot and other construction related companies are laying off employees in droves. Those for-sale signs in front of McMansions are starting to rust, they’ve been up so long. And the real estate section of the paper starts out every listing with “recently reduced.”

We’re in a Recession and those expert analysts you see on the business channels say they have no idea how long the recession will last or how deep it will go.

So, let’s admit it – we are sailing in rough seas without a map. No one knows what the future holds for the American economy, but no one thinks it holds good news anytime soon.

Think of it this way – do you know anyone who has recently had a heart attack? He has two options – go on living the way the same as before – overweight, no exercise, junk food, constant stress – and not last long. Or he can undergo a complete transformation – start exercising, substitute veggies and fruit for a Big Mac and fries and lose weight. His cholesterol will come down, he won’t be out of breath every time he climbs the stairs, and he will spend more time outdoors. Guys like him not only live longer, but seem to live better lives. It’s just hard to get from here to there, and to get your head around the idea of delayed gratification. It’s not easy to pass up the donuts and reach for the grapefruit.

So, what happens next? The only thing we know for certain in these uncertain times is the values that have guided us for the last decade or so – borrowing, consumption, instant gratification, greed – won’t work in the new era. We should probably dust off some old-fashioned values and give them a try.

Our parents and grandparents worked hard, saved money, and often did without so their children could have a better life. They bought one house using their savings as a down payment, and spent 30 years paying off the mortgage. When the kids were grown, and the house paid for, they sold it for a great profit, bought an apartment and put what was left over in money market funds. Eventually they retired, moved to Florida, and lived on their savings.

We used to think that sounded quaint. But it sure looks good right now. Turns out that paying off your debts isn’t just for suckers. Neither is putting savings away from a rainy day. Spending quality time with the family is a better investment in the long run than jetting off to exotic vacations. The new reality is we need to make do with what we have and be happy about it. Fulfillment isn’t a new car or the next shopping spree or the outdoor grill you only use twice a year.

Let’s face it. The era of Gordon Gecko and Greed is Good is Gone. Less is the New More. And, like the guy who feels better once he loses the weight, exercises and gets his cholesterol down, we might all find the new reality isn’t so bad after all.

So, in case it helps, here are some guidelines you can use to assess the candidates.

First, recognize your vote is as much against one candidate as it is for the other candidate. No way are you going to like everything about one candidate any more than you dislike everything about the other. That’s okay – in fact that how it’s supposed to be.

Second, recognize your vote should take into account a candidate’s character, as well as his policy proposals. A president is often consumed not by accomplishing the goals he set out to do, but by the crises – both domestic and foreign – that land on his lap once he takes office. What will he do when faced with the choice of doing what is right for the country or doing what is right for his political career?

Third, a candidate’s past record does count – because it is often the only indicator we have of what he will do after the campaign is over. Politicians are notorious for promising everything to everybody when they’re on the campaign trail. But once they’re in office, campaign promises often fall by the wayside as impractical, unrealistic, or too ambitious. The best rule of thumb is to watch what they’ve done, not what they say they’ll do.

For these reasons, I’ll be casting my vote for John McCain on Tuesday. I don’t agree with all his positions, especially on abortion and a woman’s right to choose. But I do agree with him on the major issues of national security and economic policy.

I think his character has been tested – not just as a prisoner of war in Vietnam, but as a senator who advocated an unpopular surge strategy in Iraq, even if it meant sacrificing his political career. In both of those cases he refused to do what was easy, or personally expedient. He insisted on doing what was right for the country. John McCain’s campaign theme of “Country First” isn’t an empty slogan – he’s lived it for 50 years.

Finally, the times ahead will be tough – with crises in both the domestic economy and national security. They will require a leader who can put his ego aside and reach across partisan lines to craft solutions that appeal to both parties. McCain has shown time again, on immigration, on campaign finance reform, on energy independence, on climate change, on judicial appointments, and on ethics reform that he is willing to buck the hyper-partisans of his own party to find common ground with the Democrats. Like the majority of Americans, John McCain hails from the sensible center of the American political spectrum, not the far right (or the far left).

While I voted for John McCain in the primary election because of his stance on national security issues, I will cast my vote for him next Tuesday for his stand on the economy. McCain has finally found his voice on economic issues – not by listening to the media mandarins in Washington, or the Beltway Bandits, or the Wall Street Millionaires. He has found it in the most unlikely of people – Joe the Plumber. Joe is an average guy who hailed from humble beginnings but through hard work, grit and determination has given his son a better life than the one he was born with. For Joe the Plumber, “fair” doesn’t mean taking his hard-earned money away from him to share with others who haven’t worked for it. For Joe the Plumber, Obama’s plan to “spread the wealth around” sounds suspiciously like a philosophy of wealth redistribution that Americans have roundly rejected time and time again.

Finally, I’m particularly suspicious of Obama’s tax and spending plans. He wants hundreds of billions of dollars in new government spending, and says he will pay for it by taxing the rich guys. This doesn’t make common sense. According to the non-partisan Tax Policy Center, under the Obama tax plan, 49% of Americans will not pay federal income taxes; and many of them will receive “rebate” checks, which is just a fancy way of saying welfare. Of the 51% who do pay taxes, Obama plans to give a good portion of them a tax cut.

So, if President Obama wants to spend more money with fewer revenues coming in because of the recession and tax cuts, the money has to come from somebody. We’re already borrowed to the hilt. It sounds suspiciously like that “somebody” will end up being you and me – because even if he taxes the “rich guys” to the hilt, there aren’t enough of them to cover all the spending.

Finally, I am voting for John McCain because I know who he is – warts and all. There are no surprises there. I’m not so sure about Barack Obama. He delivers brilliant speeches which sing to my heart. But his record is slim and the few examples that exist don’t match his rhetoric. He has never reached across the political aisle to forge compromise. In fact, he has the most liberal voting record in the Senate. And there are nagging questions about his past associations. I wouldn’t mind if he had made one or two unfortunate choices of friends. But there is a growing list of anti-American, radical Leftists who have been mentors or close associates of Barack Obama’s until just a few years ago when he entered the national stage.

But whomever you decide to vote for on Tuesday, be sure to vote. This election is too important and the consequences of America’s choice will be felt for years to come.

The candidates’ proposals are so detailed, that it’s hard to see the forest for the trees. That’s why it is so important to take a big step back so you CAN see the forest, and get a sense of the big picture that each of the candidates is painting.

The one thing we’ve all learned – the hard way – in the last month is that you can’t keep the party going forever. Americans have borrowed too much money for the last 20 years, as individuals, as businesses and as a government. We’ve bought things on credit – be it houses, stocks, flat screen TV’s, or government programs. We’ve been on a spending binge. And, like all binges, eventually you wake to face reality – usually with a whopper of a hangover.

The second thing we’ve learned is that if something seems too good to be true, it probably is. Haven’t you asked yourself in the last year or so, how home prices could keep going up? How you could have such constantly rising 401K plan without having to add much to it? How 20-somethings on Wall Street could be making such huge salaries right out of college? How borrowing money could be so easy?

Didn’t we all have a nagging thought, buried in the back of our minds, that there was something unreal about it all? That nagging thought was your common sense telling you that something didn’t add up. But it turns out that common sense isn’t so common since most of us didn’t heed it. My favorite was when my one-year-old was sent a credit card, addressed to her, offering a program so she could charge now but pay nothing back for months. Right.

So the party’s over. And we have two very different presidential candidates – each of whom promises to get us out of this mess by cutting taxes and increasing programs. But how can we pick our way through this maze of programs and promises? Does either of their programs make sense?

After analyzing the candidates proposals for health care, social security, taxes, and economic stimulants, I’ve concluded that when you strip away all the mind-numbing specifics, all the spin and fancy talk, McCain and Obama have two opposing philosophies about America’s economic pie – how big it is and who gets how much of it. Both candidates want to increase the size of the pie. Both want to change who in our society gets what sized pieces of the pie. But they approach it from different angles.

In simple terms, McCain is more concerned with growing the pie, rather than the size of the pieces. He favors policies that encourage the private sector of the economy to grow. His proposals favor small business, where the majority of new jobs come from. His tax policies reward investment in new technologies, building new companies and creating new jobs. Although he doesn’t say it this way, he figures that if the pie is big enough, everyone gets a decent sized piece. He doesn’t believe in giving everyone the same sized piece, but rather a piece reflective of their overall contribution to growing the pie. He is a free market conservative.

Obama is more concerned with the size of the pie pieces, rather than the size of the pie as a whole. As he said to Joe the Plumber, he wants to spread the wealth around. He favors more government aid to the lower classes – in health care and tax refunds. He wants to use government programs – taxes, rebates, mandatory programs – to make sure everyone gets a more equitable size of the pie. He calls this a trickle up plan – that if the lower classes have a bigger piece of the pie they will stimulate the economy to grow. When questioned whether these policies will shrink the pie, he dismisses the very thought. He is a big government liberal.

Now it’s up to you to decide. Do you think it is more important to grow the pie in hopes that everyone gets a bigger slice down the road? Or that it matters more that everyone gets a more equitable slice right now? Or that bad as things are now, they would be even worse if the pie shrinks. Those aren’t easy decisions, but then again, these aren’t easy times.

That’s the beauty of the American electoral system – regardless of whether your guy wins or loses, we all stay in the game for the next round. We might grouse around for the next four years about how the guy who did win has gotten everything wrong, but we don’t try to overthrow the system or join a revolution. If you don’t like the election results just wait – there is always another one right around the corner. Win or lose, we’re all in this together.

But there is a new element in this election season that is downright dangerous for the health of the democracy. There is mounting evidence of systemic attempt to undermine the underlying principle of our democracy – that each of us gets just one vote, whether we choose to exercise it or not.

We don’t have one national presidential election. Our constitution provides for 50 individual elections, with the president being decided by the electors of each state. Given the current state of American politics, it means that our recent elections have been decided by a relatively small number of voters in a few key swing states. The last two presidential elections were among the closest in our history. If a few thousands vote had been cast differently in Ohio and Florida in November 2000, President Gore would be working on his farewell address rather than President Bush.

This time around it could be just as close. A handful of voters in a few key states will decide whether John McCain or Barack Obama will take the oath of office on January 20th. That is why allegations of widespread voter registration fraud by the community organizing group ACORN is so troubling. As of Tuesday, The Association of Community Organizations for Reform Now, ACORN, has now been accused of voter registration fraud. Their offices have been sealed and their files confiscated by law enforcement officials in 13 states – so far.

ACORN is a quasi private/public organization. It receives federal funds, but also monies from outside groups, including almost one million dollars from Barack Obama’s campaign. It is supposed to be non-partisan, yet its “political wing” has endorsed Barack Obama. It is supposed to promote democracy by registering new, low-income inner city voters, but it has been caught registering voters multiple times in exchange for cash payments or gifts.

There is a lot wrong with this:

First, it is illegal for a federally funded group to endorse or work for any political candidate. Second, it is illegal for anyone to accept a bribe in exchange for his vote and certainly illegal for anyone to offer and pay the bribe. Third, it is illegal for anyone to vote more than once. But perhaps most importantly, even more than what is legal or illegal, is that ACORN is undermining the principle of fair and free elections. Banana Republics and Communist countries have ballot boxes stuffed and elections stolen. Not the United States.

With these latest revelations, the Obama campaign has now cut all ties with ACORN, despite Sen. Obama’s earlier associations with them as their legal counsel. Perhaps it is just handful of overzealous Obama supporters in key states who are committing election and voter registration fraud. But ACORN’s activities don’t pass the smell test.

In Bridgeport, Connecticut, some 20% of ACORN’s submitted registrations have been deemed fraudulent In Houston, it’s 40%. In Indianapolis, new voter registration is now running at over 105% of all eligible voters. One man, by his own admission, testified in court this week in Cuyhoga County, Ohio and admitted to being paid by ACORN to register 72 times. Since Ohio also allows for early voting, many of these so called “voters” have already cast their ballots – all of them. In Pennsylvania a number of “voters” have admitted to being pressured to register dozens of times. Others, residents of homeless shelters, have said they registered multiple times in exchange for cigarettes and booze.

With the election just two weeks away, and very little time for the counties and states involved to investigate fraudulent voter registrations, it is time for the Justice Department to step in – for everyone’s sake. This election will be too close, and too important to have even the taint of fraud surrounding it. And, if it these investigations turn out something more widespread and sinister is going, like an attempt to throw an election or ensure a certain outcome, then it threatens the very foundation of our electoral system of government. This serious stuff and we ignore it at our peril.

Guest what? You’ve just lost your nest egg faster than you would have in Vegas. What have you gotten for it? Nothing! At least in Vegas they would have thrown in free hotel and floor show!

The American taxpayer just got mugged – and we can’t figure out what happened, who did it and why no one protected us. And worst of all, we have no idea how much it will end up costing us later. At least when you get mugged they only take the cash in your wallet.

The biggest culprit is Fannie Mae – a quasi-government mortgage enterprise – regulated and guaranteed by Congress but privately owned. In other words, government sets the rules, taxpayers cover any losses, and private stockholders keep the profits. It’s Washington’s version of heads they win, tails you lose.

For decades, Americans bought their homes by getting a mortgage, which was usually sold to Fannie Mae. But you couldn’t get a mortgage unless you had enough savings for a 5-20% down-payment, proved you could afford the monthly payments, and had a good credit rating.

But all that changed in the 1990s. With pressure from the Clinton Administration and Democrats in Congress, Fannie Mae eased credit requirements for home loans. They wanted to curry favor with low-income voters by helping them buy houses, and with banks, because more loans meant more profits. They didn’t have to foot the bill if the mortgages went sour – the taxpayers would do that. Again, heads they win, tails you lose.

American banks went on a lending spree, and Americans went on a spending spree. They were called ninja loans– “no income, no job, no assets.” It was easy money. As long as housing prices went up, you could sell the house a year or two later and make a profit, without risking a dime of your own money.

The risky lending continued, despite efforts by President Bush to create a new oversight committee to clean up Fannie Mae, and John McCain’s calls for stricter regulations. Democrats in Congress, as well as many Republicans, their campaign coffers stuffed with Fannie Mae donations, refused to put on the brakes. For the six years from 1999 to 2005, Fannie Mae paid millions to 354 congressmen and senators.

By 2004 there were signs of trouble. An office of Management and Budget investigation found massive fraud in Fannie Mae’s bookkeeping practices. But those same Senators and Congressmen refused to hold hearings or hold any of the Fannie Mae leaders responsible. In fact, Fannie Mae CEO Franklin Raines gave himself a $100 million bonus.

But McCain continued to be one of the lone voices calling for reform. He introduced the Federal Housing Enterprise Regulatory Reform in 2005, claiming Fannie Mae posed an enormous risk to the “housing market, the overall financial system, and the economy as a whole.”

But Congressional Democrats blocked it, led by those who received the highest campaign contributions from Fannie Mae. Barack Obama called subprime lending a “good idea.”

But the problems couldn’t be ignored. Franklin Raines and other top executives were forced to resign. But none were charged with fraud, no one went to jail, and after paying some fines, Franklin Raines got to keep his $100 million bonus.

Fannie Mae, reeling under a mountain of bad debt, is now bankrupt. So are most of the banks that issued those risky mortgages. So is AIG, the company that insured them. But rather than go belly up, the government stepped in to bail everybody out. Once again, head they win, tails you lose. But this time you lose big.

The rescue plan will cost at least $700 billion; some say it could end up costing $2 trillion. Every American will have to fork over thousands of dollars we could have used for our kids’ college tuition or our retirement.

Wonder which politicians got the fattest campaign contributions? The top recipient was Senate Banking Committee Chairman Chris Dodd. And number two was Barack Obama.

Guess what happened to Franklin Raines, Mr. One Hundred Million? He’s one of Obama’s top campaign advisers.

And John McCain, the whistleblower who tried to reform Fannie Mae? Who pushed through legislation to limit campaign contributions? Who rails against earmarks and government corruption every time he opens his mouth? Somehow or other, as loony as it seems, McCain is getting the blame.

Go figure.

Politicians on both sides of the political aisle blame each other. Our candidates say it’s because we lack strong leaders, but what they mean is if we just put them in charge things would be different.

Candidates take impassioned stands, make speeches with all the right sound bites, but in the end can’t get the consensus necessary to enact anything but watered down bills with temporary fixes. Any serious plan put forward has powerful detractors so, rather than slog through and hammer out a compromise, we have partisan gridlock. After a while, we throw up our hands, and move on to the next problem. We’re like hamsters running on that wheel in the hamster cage. We keep running, but never seem to get anywhere. We’re trying all right, we’re running as fast as we can, but the wheel – the system – won’t let us make progress.

Why? Is this because, as some politicians argue, we just need a change of leaders? You would be tempted to say yes if this was the first time we’ve failed to find bipartisan consensus. But it isn’t. We’ve been revisiting most of these issues for over two decades and, like the hamster, haven’t made much forward progress. We’ve changed leaders and parties but to no avail. What has changed in the last 20 years, though, is the amount of money special interest groups and lobbyists spend ‘convincing’ legislators to vote their way. Twenty years ago, Ronald Reagan vetoed a transportation bill saying it had too much pork barrel spending – it had 150 earmarked programs for legislators’ special pals. In 2005 President Bush signed a transportation bill that had a staggering 6,376 pet projects worth $24 BILLION in unnecessary earmarks.

We’ve had lobbyists and special interests groups in Washington since the founding of the republic, but the difference today is the amount of money they’re willing to spend to get the legislation they want. When it comes to politicians, money talks. It doesn’t matter if it is labor union money or trial lawyers’ money or Wall Street money or oil money. Today our legislators – both Republican and Democrat – are all too often in the pockets of the highest bidder. Not only is this a waste of our tax dollars, but it’s also forcing our entire system of government into gridlock.

In the end the most important issue isn’t the housing crisis, or the liquidity crisis, or the immigration crisis, of the host of other crises we face. None of them will get solved unless we take the money out of the system. But that won’t be easy – no incumbent legislator will willingly pass legislation to restrict his ability to collect campaign contributions from lobbyists – it’s the single biggest advantage he has over any potential opponent. It’s like asking the fox to leave the hen house when he’s got free run over the eggs.

But what can happen is for voters to insist on transparency. While the McCain-Feingold Campaign Reform Act goes a long way in identifying big money donors to a legislators’ campaign, it’s only half of the picture – we need to know what earmarks that legislator gives to his generous donors. Right now it is extremely difficult to discover who attaches an earmark to legislation before a bill is passed. They’re added at the last minute, behind closed doors and anonymously. That’s got to change. If congress won’t give up their precious earmarks, we’ve at least got a right to know about them. Once we have both parts of the picture – who donates to a congressman’s campaign and what earmarks he gives that donor – it may not be proof of outright corruption, but it certainly won’t look good come reelection time.

That’s why it is so important to elect the candidate who will get to the bottom of the rot in Washington and reform the system. John McCain has championed this cause his entire career – fighting against Democrats and his own fellow Republicans. Unless we find a way to get corruption out of the system, we’re unlikely to ever solve that long list of problems.