Jay Reding.com

Larry Kudlow notes that the Democrats are preparing to rescind several of the pro-growth tax cuts passed earlier in the Bush Administration. To do so would be economic suicide, especially now. The US economy has done astonishingly well over the past few years, mainly because the government made the right pro-growth moves at the right time. In 2004 we were supposedly in the “worst economy since Hubert Hoover” — that assertion was laughable then, and even more so now.

To undo that would be to erase the millions of jobs created in the past few years, introduce a huge amount of uncertainty into the market, and ensure that businesses would delay job-creating capital investments until they know what the tax consequences of those choices would be. The Asian markets had a massive sell-off because of similar fears, and the same would happen in America if there was a credible threat of a major capital gains tax increase.

James Pethokoukis of US News and World Report identifies why the Bush Administration made four key mistakes in their prior tax policies which have hurt the future viability of these crucial tax cuts. Indeed, Bush’s two biggest economic mistakes have been in failing to cut spending and failing to meaningfully deal with entitlement reform. Those mistakes will have long-running repercussions for the future.

However, the worst thing that could happen is for the Democrats to raise taxes, spurring another selloff and then add more to the already burdened entitlement system. That is also precisely what the Democrats want to do — which is why the President should be prepared to veto any bill that raises capital gains taxes beyond the current level.

The economic reality is that capital gains taxes are economically wasteful — they don’t generate much revenue and they hurt economic growth, reducing tax revenues in other areas. Even if a 0% capital gains rate isn’t politically acceptable, neither is a return to a time when capital gains rates were acting as an anchor on economic growth.

The Democrats are sharpening the knife they’ll use to kill the goose who laid the golden egg — and they cannot be allowed to sacrifice the US economy and millions of jobs for their high-tax agenda.

Consider this an open thread…

Cathy Seipp, one of LA’s best journalists and an all-around wonderful person is near death from lung cancer.

Christopher Hitchens isn’t backing down from his support of the war four years after it began. I’m in his camp on this one: the central question we have to ask is whether we’d be better off had the war never happened. I rather doubt that we would.

The Duelfer Report made it clear that the sanctions regime in Iraq was collapsing:

Saddam wanted to recreate Iraq’s WMD capability—which was essentially destroyed in 1991—after sanctions were removed and Iraq’s economy stabilized, but probably with a different mix of capabilities to that which previously existed. Saddam aspired to develop a nuclear capability—in an incremental fashion, irrespective of international pressure and the resulting economic risks—but he intended to focus on ballistic missile and tactical chemical warfare (CW) capabilities.

We now know that the Iranians are well on their way to developing nuclear weapons. It is beyond question that Saddam would have seen this as a direct threat against his regime, and would have done the same in order to counter that threat. The threat of an arms race in the Middle East is already bad enough — to have two unstable regimes with a long history of bloody conflict both pursuing nuclear technologies is one of the major threats that the war was designed to forestall.

It does not seem likely that Saddam Hussein’s brutal regime would have collapsed organically. His military could not withstand a US onslaught, but it was more than enough to prevent any internal opposition from coalescing. We consider the number of Iraqi lives lost in the post-war period to be great, but it is quite likely that the death toll under Saddam would have been greater. It is still uncertain just what the human toll of the Hussein regime really was — although it likely comes close to the millions, and that is not considering the brutality of the Iran/Iraq War.

Even if the Hussein regime did collapse on its own, the only thing holding Iraq together now is the presence of US troops and trained Iraqi units who can keep the peace. Without those factors, Iraq would have quickly descended into a level of anarchy not seen in modern history. The amount of bloodshed would have made the current scenario look like nothing — Iraq would have exploded, and the ripple effects for the region would have been devastating.

The over 3,000 Americans who have died in Iraq did not die in vain. The idea that it is impossible to imagine a free and democratic Iraq is not a failure in policy, but a failure in vision. That doesn’t mean that such an end will be easy to achieve — far from it, but to abandon the process of democratization now would destroy everything that has been achieved so far. Our role in this process may only last a few years, but it is never the less instrumental in securing Iraq for the next phases in the process of democratization. Iraq cannot stabilize itself until the foreign and sectarian forces are controllable by the Iraqi military and police, and they need our help to arrive at that point.

The criticisms that we went in with too few troops, that our initial attempts at reconstruction were bungled, etc., all have some weight to them. Certainly we weren’t prepared for the state of Iraq after three decades of brutality and war. Iraqi civil society had been ground into dust, and civil society is the bedrock for democracy. What Saddam did to Iraq was a far more brutal rape than even we’d envisioned, and Iraqi society still bears the scars.

However, we are in the situation we are in now, and trying to revisit the issues of the past are an academic exercise. We owe the people of Iraq a debt, we created this situation, and we cannot walk away from it without our hands being bloodied by what would inevitably come next.

We’ve sacrificed much blood and treasure in this war, yet our future is on the line. Our enemies see our lack of resolve, and it signals to them that we are as weak as they thought. If that is the message we send, the terrorists operating in Iraq will have the biggest victory in the history of their movement, and it will also send a message to everyone on the fence to take the sides of the victorious party. The damage done to the Middle East and indeed the world could be irreparable, and sooner or later the spillover effects would reach our shores.

This is the fight we have now, and our soldiers are fighting it with bravery and courage. If all we do is infantilize them and ignore the cause for which they fight, then it is our cowardice that gives their enemy strength. Our soldiers should never be in the position of fighting both the foreign enemy abroad but also the derision of the people at home.

Michael J. Totten has an excellent look at the rising power of Iraqi Kurdistan. I think that it is inevitable that the Iraqi Kurds end up with the best deal in this war — once they’re economically independent, I’m not sure they’d care if the rest of Iraq goes to hell. The reason why people don’t hear about suicide bombings or beheadings there is because those things just don’t happen in Iraqi Kurdistan.

That doesn’t mean that the glass facade of Erbil is the whole of the story — the Kurds still do have some outstanding issues with the persecution of minorities within Iraqi Kurdistan, and to their credit the major Kurdish parties have done some things to ameliorate those concerns, but Kurdistan is quite democratic compared with the rest of Iraq, but not quite a Western-style democracy yet.

Still, the Kurds give us an idea of what the rest of Iraq could be once the violence simmers down. 10 years ago the Kurds had their bloody civil war, and they’re only now truly recovering from years of violence under the Hussein regime. Instead of turning their oil wealth into a tool of oppression, it’s going towards the construction of a more livable community and new infrastructure — and the rest of the world is certainly taking notice.

If the Sunnis and the Shi’a could end their bitter fighting, Baghdad could be the next Dubai — or at least the next Erbil. However, that cannot happen when powers such as Iran and Syria continue to exacerbate the fighting in Iraq. Iraq must have sovereignty and security — things which Iraqi Kurdistan have — before it can start to develop. Hopefully the al-Maliki government will find the strength to pull Iraq back from the precipice of abject anarchy, or Iraqi Kurdistan may only be an island of development in a blighted land.

The Democratic motion to arbitrarily withdraw from Iraq has failed on a 48-50 vote. 60 votes were needed for passage. Republican-sponsored bills to support funding for the troops passed by wide margins.

The Democrats know they don’t have the votes to pass a bill that would set timetables on the war. They don’t even have the Constitutional authority to do so — the President as Commander in Chief has discretion in that area, not Congress. The only power Congress has is to cut off the funding, which the Democrats won’t do.

Even if such a bill passed, it would be vetoed and the Democrats have no chance of overriding a Presidential veto.

The Democrats have an opportunity to lead on Iraq. Unfortunately, they’d rather try to play to the anti-war base and advocate a deeply irresponsible policy position. The Democrats, despite their majority in the House and the Senate, can’t “stop” the war — what they can do is try to make as much political hay out of it as they can.

I’m not convinced that the Democratic leadership really wants to truly end the war on an arbitrary timetable. To do so would be politically disastrous and leave Iraq a ruin that would quickly spread chaos across the entire region. No smart politician wants to be caught holding that bag. Instead, it seems that the Democrats have every reason to want such resolutions to not succeed, as the war is a political albatross around the neck of Republican lawmakers. If the war really did “end” in 2008, that issue would lose much of its salience.

Speaker Pelosi is not a political novice — she knows she’s in an unwinnable position, but that the political fallout will still fall on the Administration rather than on the Democratic Congress. She has every reason and every ability to play the anti-war side for chumps, making promises to them that are impossible to keep. Granted, there is a danger that they may turn on the Democrats if they don’t produce some results, but as long as the Democrats keep toeing the anti-war party line, they needn’t worry about the political fallout.

Captured al-Qaeda leader Khalid Shiek Mohammed has confessed to dozens of terrorist plots, including the September 11 attacks. KSM apparently had his hands in everything from attempts to attack Big Ben and Canary Wharf in London to attempts to assassinate former Presidents Carter and Clinton. Given Mohammed’s high position in al-Qaeda, it’s not surprising that he was intimately involved in the operational planning of nearly every major al-Qaeda operation before his capture.

September 11 was not an isolated incident, but a pattern of escalation that has been ongoing since the early 1990s and will continue so long as al-Qaeda has the operational capability of attacking the United States or other nations that don’t adopt their radical views. We’ve been lucky that none of al-Qaeda’s attempted strikes against the United States have succeeded. Others have not been so lucky.

The war on terrorism is not a war solely against the United States, but against any ideology that contradicts the austere form of Islam spread by al-Qaeda — including moderate Muslims. The capture of Khalid Shiekh Mohammed was a major blow against al-Qaeda, but hardly a fatal one. It isn’t a matter of if they strike again, but where and when.

We’ve been lucky so far, but we can’t play defense forever. Sooner or later someone like Khalid Shiekh Mohammed will be able to get past even the best homeland security efforts — and if they have access to nuclear, chemical, or biological weapons the results could be unimaginable.