Snow Storms & Roads

In snow-challenged Washington, DC, Nebraska Avenue and the roads around Vice President's Naval Observatory home are immaculate, completely cleared of snow and ice -- but the major artery of Massachusetts Avenue is a horizontal snow slush, barely plowed. DC Mayor Adrian Fenty would probably be in bigger trouble with citizens if there were not another ten or so inches of white stuff on the way giving him 'another chance' to get the city's infrastructure back in operation after a storm.

The Washington Post Reaches Out to A Realist

Well, jiminy cricket, I just learned that Nation editor Katrina vanden Heuvel has started a weekly "online" column for The Washington Post. Appearing in the actual paper still has its benefits -- particularly when so much of the in-paper editorial offerings and the opeds assembled by Fred Hiatt and Jackson Diehl are of a neoconservative or liberal interventionist (neocon of the left) tilt. But something is better than nothing -- and Vanden Heuvel, who too many confuse as a hard core lefty, is actually one of the smartest "progressive realist" commentators in the country. Katrina once told me at a swank Hamptons party that "realism had become the new ideology of the left." And she is and was right. (Here is her first installment.)

Dianne Feinstein's Famous Chairs

I had occasion to chat with Senator Dianne Feinstein last night -- a hero in my book in the aftermath of the Harvey Milk assassination -- and learned that her home in the Spring Valley district of Washington should probably become a historic site at some point. I don't think she would mind my sharing this -- but said that when folks come over to her place, she is nearly always asked right away to show where Barack and Hillary sat in her home to work out their post-primary postures. At the dinner we were at last evening, she pointed to two modest but still regal high-back stuffed chairs that looked like the ones in her place. Senator Feinstein said that she was thinking of putting plaques on the chairs that said who sat in what chair and where. Two thoughts: Someone should convince the President and Secretary of State to go resume their positions in those chairs and get a great Annie Leibovitz photo. Second, perhaps Senator Feinstein should donate the chairs to the Smithsonian National Museum of American History?

British Ambassador to US Nigel Sheinwald Tires of Snow Shoveling and Gives Major Speech Tonight in Austin

I was up near the British Embassy both yesterday and today -- ghost town there in an embassy sense. The stalwart bronzed Winston Churchill still has about 18 inches of white stuff on his head and arms -- sort of a warrior snow man.

But just got word that UK Ambassador to the US Nigel Sheinwald is speaking in Austin tonight at the LBJ Presidential Library outlining support for General Stanley McChrystal's action plan in Afghanistan.

According to Sheinwald's office:

Ambassador Sheinwald will lay out the case for a successful political strategy to support the military strategy being carried out by ISAF under General McChrystal. He will say that political success in Afghanistan depends on three factors: reassuring the Afghan people about our commitment, splitting the coalition that makes up the insurgency we face, and promoting security in the wider region around Afghanistan. He will reiterate that a political solution is as important as a military one, and make the case that the Taliban need to be outgoverned as well as outgunned.

"The war in Afghanistan and the related challenges we face across the border in Pakistan constitute the top foreign policy and security priority for the British Government. The reason is simple: like the US Administration, we believe that we must prevent Afghanistan from becoming once again a safe haven for Al Qaeda and international terrorists who plan to do us harm.

"And what are we doing to ensure that this risk is lowered? After several reviews, both the Obama Administration and the British Government have come to the same conclusion: to ensure that this area does not become a safe haven, we must help and support the government of Afghanistan to secure its own territory against militancy and terrorism. We have adopted, with the Afghan government, a comprehensive, politically-led counter-insurgency campaign. Simultaneously, in Pakistan, we need to support the government's efforts - certainly through security and intelligence help, but also through economic and social development, and long term nurturing of Pakistan's political and institutional structure. [...] "When the Taliban were in power, they broke Afghan society so badly that it was easy for Al Qaeda to take root. Our task, therefore, is to help the Afghan people strengthen themselves and their society to the extent that they are robust enough to repel Al Qaeda without the need for several tens of thousand international troops on their soil. [...] "We are not just focused on making Afghans feel safer in their beds at night. We need the people of Afghanistan to want to take ownership of the future of their country. The polls consistently tell us that only around 6% of the Afghan people want the Taliban back in power. But the evidence is clear that many more than that are unwilling to turn their back on the insurgency in case the Taliban do return. [...] "So we need to build up their trust in a government which is seen to be acting against corruption and aiming to govern competently. In the words of our Foreign Secretary, David Miliband, "the Taliban need to be outgoverned, not just outgunned". This part of the political strategy is designed to build up the capacity and effectiveness of Afghanistan's government, both in Kabul and out in the provinces and districts; training and equipping provincial and district governors; distributing aid money more effectively; and addressing the deficit in justice by providing both financial and practical support.

Here is the rest of the speech.

Ambassador Sheinwald makes much sense here -- but one wonders how the US, even with allies, can even pretend to achieve such a holistic, ambitious agenda in Afghanistan when the President of the United States can't get a health care bill through Congress.

I want President Obama, General McChrystal, our British allies, and others to succeed -- but not to doubt somewhat this ambitious agenda given current performance trends would be irresponsible in my view.

-- Steve Clemons

Visit msnbc.com for breaking news, world news, and news about the economy

I did a short interview with NBC Chief White House Correspondent Chuck Todd yesterday about the essay I did based on Edward Luce's Financial Times account of things going awry at the inner core of the Obama administration.

Todd also mentions both my piece and Luce's in his "First Thoughts" column this morning. Todd and his team write:

*** Obama's inner circle: We should have mentioned these two pieces earlier -- in the Financial Times and the Washington Note -- that make some key observations about Obama's inner circle, and are getting a fair amount of buzz. One excerpt: "The Obama White House is geared for campaigning rather than governing, [observers] say. In dozens of interviews with his closest allies and friends in Washington - most of them given unattributably in order to protect their access to the Oval Office - each observes that the president draws on the advice of a very tight circle. The inner core consists of just four people - Rahm Emanuel, the pugnacious chief of staff; David Axelrod and Valerie Jarrett, his senior advisers; and Robert Gibbs, his communications chief... With the exception of Mr Emanuel, who was a senior Democrat in the House of Representatives, all were an integral part of Mr Obama's brilliantly managed campaign. Apart from Mr Gibbs, who is from Alabama, all are Chicagoans - like the president. And barring Richard Nixon's White House, few can think of an administration that has been so dominated by such a small inner circle."

Other interesting reactions and thoughts can be read at Digby's Hullabaloo, pieces by John Aravosis and Joe Sudbay at AmericaBlog, at Peter Feaver's Foreign Policy blog, and this morning in The Hill.

Also check out Jake Tapper's take at ABC's Political Punch.

There are also a number of sites -- some very interesting ones -- that take exception to the thesis that Luce and I have both put out there and who think that Obama's team is getting most things right -- or that this kind of palace intrigue article is at most entertaining and at worst malicious. I just want to be up front that there are other views out there -- and my intent is not malicious -- but rather to put a mirror up to the White House and have the President take a good look at how his presidency is quickly sinking.

In my view, he needs to do what Richard Wolffe in his book Renegade: The Making of a President said Obama likes to do when the President knows he is losing and that is, like in basketball, change things up.

-- Steve Clemons

Stephen Herzog, writing at World Politics Review, argues that NATO should reconsider its intention to develop contingency plans to defend Estonia, Latvia, and Lithuania against Russian attacks.

According to Herzog, the operations are unnecessary because NATO is fully prepared to respond to a Russian attack. Moreover, such an attack is highly improbable and carrying out a contingency plan is only likely to generate hostility in Moscow.

He says:

The Atlantic Alliance and Russia need to work together to solve some of today's toughest problems. These issues include fighting terrorism, preventing the spread of weapons of mass destruction, cracking down on transnational crime, and reducing global numbers of nuclear weapons. Real cooperation cannot occur so long as both sides treat each other like enemies. NATO should abandon the idea of developing provocative defense plans that have little basis in geopolitical reality. But cooperation is not a one-way street. Russian leaders need to tone down their rhetoric and look for avenues of collaboration, not confrontation.

The dilemma Herzog identifies highlights a key problem connecting many of the United States' strategic challenges. America is - to use Walter Lippmann's term - "insolvent." That is, its overseas commitments outweigh its foreign policy resources.

The fundamental issue with strategic implications is that the United States is burdened with massive security and political commitments throughout the globe that entail enormous political and economic costs.

The situation in the Baltic States is analogous to the conundrum in East Asia, where the United States continues to provide huge amounts of arms to Taiwan that benefit the Taiwanese and American military contractors at the expense of U.S.-China relations.

Adjusting America's "legacy commitments," must be part of the United States' long-term strategy to reorient its foreign policy for the post-American international order, in which issues like NATO defense preparations and Taiwanese military sales cannot obstruct America's higher-order strategic imperative of developing a new "social contract" of baseline global interests with Russia, China, and other major global players.

-- Ben Katcher

From an official release from his office:

Congressman John P. Murtha (PA-12) passed away peacefully this afternoon at 1:18 p.m. at Virginia Hospital Center in Arlington, VA. At his bedside was his family.

Murtha, 77, was Chairman of the House Appropriations Subcommittee on Defense.

First elected to the U.S. House of Representatives in February of 1974, Murtha dedicated his life to serving his country both in the military and in the halls of Congress. A former Marine, he became the first Vietnam War combat Veteran elected to the U.S. Congress.

This past Saturday, February 6, 2010, Murtha became Pennsylvania's longest serving Member of Congress.

John Murtha, rest in peace.

-- Steve Clemons

Financial Times Washington Bureau Chief Edward Luce has written a granularly informed insider account about those who hold the keys to the inner most sanctum of Obama Land -- Rahm Emanuel, Robert Gibbs, Valerie Jarrett and David Axelrod.

It's a vital article -- a brave one -- that interviews "dozens of interviews with his closest allies and friends in Washington".

Most are unnamed because the consequences of retribution from this powerful foursome can be severe in an access-dependent town. John Podesta, President of the powerful, adminstration-tilting Center for American Progress, had the temerity and self-confidence to put his thoughts publicly on the record. But most others could not.

Mark Schmitt, executive editor of the liberal magazine American Prospect, wrote that "Luce has written what seems to me the best and most succinct rundown of what's gone wrong in the White House, with particular attention to the role of Chief of Staff Rahm Emanuel." But some of the big aggregators out there -- Mike Allen at Politico and ABC's The Note among others -- didn't give Luce's juicy and lengthy essay any love.

Why not? Allen is a good friend of mine and tries to keep a good balance between tough-hitting political stuff but also goes out of his way to give strokes to those in the White House he can -- particularly "Axe" -- who is a regular in Mike's daily Playbook. I try to do the same to be honest and have a particular thing for Bill Burton's wit and was pleased to see Rahm Emanuel giving David Geffen rather than Rick Warren lots of hugs during the Inauguration eve fests.

But this Luce piece is unavoidably, accurately hard-hitting, and while many of the nation's top news anchors and editors are sending emails back and forth (I have been sent three such emails in confidence) on what a spot-on piece Luce wrought on the administration, they fear that the "four horsepersons of the Obama White House" will shut down and cut off access to those who give the essay 'legs.'

But in the too regularly vapid chatter about DC's political scene, serious critiques of the internal game around Obama not only deserve review on their own merits but have to be read -- because Obama is not winning. He is failing and people need to consider "why".

Any serious survey of the Obama administration's accomplishments and setbacks over the last year has to conclude that the administration is deeply in the red.

If current trends continue, this once mesmerizing Camelot-ish operation will be be seen in the history books as the presidential administration that -- to distort slightly and inversely paraphrase Churchill -- never have so many talented people managed to achieve so little with so much.

The entire article needs to be read, but to set the stage here is the beginning of Ed Luce's portal into the heart of today's Obama machine:

At a crucial stage in the Democratic primaries in late 2007, Barack Obama rejuvenated his campaign with a barnstorming speech, in which he ended on a promise of what his victory would produce: "A nation healed. A world repaired. An America that believes again."

Just over a year into his tenure, America's 44th president governs a bitterly divided nation, a world increasingly hard to manage and an America that seems more disillusioned than ever with Washington's ways. What went wrong?

Pundits, Democratic lawmakers and opinion pollsters offer a smorgasbord of reasons - from Mr Obama's decision to devote his first year in office to healthcare reform, to the president's inability to convince voters he can "feel their [economic] pain", to the apparent ungovernability of today's Washington. All may indeed have contributed to the quandary in which Mr Obama finds himself. But those around him have a more specific diagnosis - and one that is striking in its uniformity. The Obama White House is geared for campaigning rather than governing, they say.

In dozens of interviews with his closest allies and friends in Washington - most of them given unattributably in order to protect their access to the Oval Office - each observes that the president draws on the advice of a very tight circle. The inner core consists of just four people - Rahm Emanuel, the pugnacious chief of staff; David Axelrod and Valerie Jarrett, his senior advisers; and Robert Gibbs, his communications chief.

Two, Mr Emanuel and Mr Axelrod, have box-like offices within spitting distance of the Oval Office. The president, who is the first to keep a BlackBerry, rarely holds a meeting, including on national security, without some or all of them present.

With the exception of Mr Emanuel, who was a senior Democrat in the House of Representatives, all were an integral part of Mr Obama's brilliantly managed campaign. Apart from Mr Gibbs, who is from Alabama, all are Chicagoans - like the president. And barring Richard Nixon's White House, few can think of an administration that has been so dominated by such a small inner circle.

"It is a very tightly knit group," says a prominent Obama backer who has visited the White House more than 40 times in the past year. "This is a kind of 'we few' group ... that achieved the improbable in the most unlikely election victory anyone can remember and, unsurprisingly, their bond is very deep."

John Podesta, a former chief of staff to Bill Clinton and founder of the Center for American Progress, the most influential think-tank in Mr Obama's Washington, says that while he believes Mr Obama does hear a range of views, including dissenting advice, problems can arise from the narrow composition of the group itself.

To hit some of the later highlights, Luce speaks with political giants 'inside' the Obama tent who suggest that Rahm Emanuel lost track of the importance of communicating to the public about health care, despite some success in legislative deal-making. While Luce doesn't explicate this topic, I would also suggest that Rahm pulled the plug on shuttering GITMO, which had a good plan on paper, but was unwilling to move the political wheels to get that done -- not understanding that this was a key pillar of progressive political support for Obama.

The article goes on to document how people like Health Secretary and former Kansas Governor Kathleen Sebelius were kept off television -- along with others like Interior Secretary Ken Salazar and Homeland Security Secretary Janet Napolitano. Add to this others that Luce does not name -- including important voices like Paul Volcker and Austan Goolsbee on Obama's economic team, who saw their public voices choked off by a media-dominating Lawrence Summers with support from Robert Gibbs and Rahm Emanuel.

In a particularly cutting depiction of Emanuel, Luce writes:

Administration insiders say the famously irascible Mr Emanuel treats cabinet principals like minions. "I am not sure the president realises how much he is humiliating some of the big figures he spent so much trouble recruiting into his cabinet," says the head of a presidential advisory board who visits the Oval Office frequently. "If you want people to trust you, you must first place trust in them."

I will never forget when Rahm Emanuel laughingly responded well within earshot of several national media (and this blogger/writer) at an Inaugural bash to an inquiry if Emanuel was enjoying putting Tom Daschle on the basement floor of the White House in a non-descript office pretty far from the President. Emanuel joked back glibly that Daschle had to be happy with any office in the White House because "any square inch of real estate inside the White House -- no matter where it is -- is more valuable than anything outside it."

Compare this flippant meanness and hubris to the tone of Obama campaign manager David Plouffe's depiction of the campaign in Audacity to Win: The Inside Story and Lessons of Barack Obama's Historic Victory and one couldn't imagine more different worlds. Plouffe describes a campaign with a "no assholes" rule -- one where good policy would be pursued -- not just what was a winning political hand.

Luce's brief paints a picture of even a well-meaning, policy-focused "Obama the man" being warped out of shape by "Obama the team." Recounting some of the antics during Obama's November China trip, Luce recounts:

The same [dismissal of his key policy advisers in lieu of his political entourage] can be observed in foreign policy. On Mr Obama's November trip to China, members of the cabinet such as the Nobel prizewinning Stephen Chu, energy secretary, were left cooling their heels while Mr Gibbs, Mr Axelrod and Ms Jarrett were constantly at the president's side.

The White House complained bitterly about what it saw as unfairly negative media coverage of a trip dubbed Mr Obama's "G2" visit to China. But, as journalists were keenly aware, none of Mr Obama's inner circle had any background in China. "We were about 40 vans down in the motorcade and got barely any time with the president," says a senior official with extensive knowledge of the region. "It was like the Obama campaign was visiting China."

One wonders why Valerie Jarrett was on the trip in any case. As head of public engagement for the White House, it would seem she should have a rather full plate meeting the demand of the many groups around the United States that want to feel like they are connecting with and being heard by the Obama White House.

I see Valerie Jarrett a lot -- often at Georgetown's power crowd restaurant, Cafe Milano.

In fact, one night when I was at the annual gala dinner of Jim Zogby's Arab American Institute -- an important evening for leading figures from the Arab-American community to connect with the Washington political establishment -- Jarrett was on the docket to be the major keynote speaker of the entire night.

Jarrett, however, had to modify her schedule because of what she said were "urgent duties that were calling her back to the White House right away" and so she gave a few minutes of laudatory comments toward the Arab American community before most people were in their seats between reception and sitting down for dinner. My hosts that evening said that they were mainly interested in hearing her and asked me if I wanted to depart with them for Cafe Milano. I said sure -- and wow -- there Ms. Jarrett was.

Maybe she did stop at the White House between the JW Marriott and the Georgetown hot spot. That was possible -- but it would have had to be a nano-second drop by.

Compare this to President Bill Clinton giving the major keynote remarks in March 1995 at the Nixon Center's opening conference in Washington at the Mayflower Hotel when Clinton came early for a VIP reception, stayed for the entire sit down dinner, gave a 90 minute long speech, and mingled with folks after.

People can tell when you are focused on them in a serious way -- and when you are giving them a cursory glance.

There are things that happen in politics -- and Valerie Jarrett does have important duties and a schedule that is probably always in constant flux -- so I don't want to take my critique too far.

But one thing essential to understand is that the kind of policy that smart strategists -- including by people like National Security Adviser Jim Jones, Defense Secretary Robert Gates and other advisers like Denis McDonough, Tom Donilon, James Steinberg, William Burns, (previously Gregory Craig) -- would be putting forward is getting twisted either in the rough-and-tumble of a a team of rivals operation that is not working, or is being distorted by the Chicago political gang's tactical advice that is seducing Obama towards a course that has not only violated deals he made with those who voted him into office but which is failing to hit any of the major strategic targets by which the administration will be historically measured.

President Obama needs to take stock quickly. Read the Luce piece. Be honest about what is happening. Read Plouffe's smart book again. Send Rahm Emanuel back to the House in a senior role. Make Valerie Jarrett an important Ambassador. Keep Axelrod -- but balance him with someone like Plouffe, and get back to putting good policy before short term politics.

Set up a Team B with diverse political and national security observers like Tom Daschle, John Podesta, Brent Scowcroft, Arianna Huffington, Fareed Zakaria, Katrina vanden Heuvel, John Harris, James Fallows, Chuck Hagel, Strobe Talbott, James Baker, Zbigniew Brzezinski, and others to give you a no-nonsense picture of what is going on.

And take action to fix the dysfunction of your office.

Otherwise, the Obama brand will be totally bust in the very near term.

-- Steve Clemons

-- Steve Clemons

My friend Tracy Russo was involved with launching this brand new Department of Justice website today -- just before a hard-hitting winter snow storm shuts down a lot of DC this weekend.

The site emphasizes transparency and openness by explaining how to make Freedom of Information Act (FOIA) requests and posting links to records management information, declassification, Congressional affairs, and the like. You can also "Share Your Ideas" about transparency.

At first glance, this looks like a good new resource.

However, I hope some of the fifty or so Guantanamo detainees who are being sentenced to further "indefinite detention" won't be hidden off in some non-transparent box somewhere.

Come to think of it, for those of you who are so inclined, you might want to "share your ideas" about the detainee challenges, or other matters, on the website. Be polite and respectful -- and link your proposals to "transparency and openness."

Check it out.

This site seems could be useful in making some real progress in the right direction when it comes to knocking down some walls of what became under Bush/Cheney a very opaque national security state.

-- Steve Clemons

My close pal, Chris Nelson, who was essentially blogging before there were blogs publishes the uber-insider Nelson Report (not online and available only to those who pay a super high subscription fee or who feed him insider political details that offset the $$).

I have an arrangement with Nelson that allows me to republish parts of his report that I find sizzling (it actually sizzles all the time but vanity prevents me from running his reports every day).

Today, Chris Nelson provides a Faulkeresque two-sided interpretation of a phone call between Treasury Secretary Timothy Geithner and China Vice Premier Wang Qishan.

One version has it that Geither said America just isn't going to take China's currency manipulating mercantilism anymore -- and the other is that Wang told Geithner that if America didn't keep taking it, then there would be a sizable void at the next Treasury auctions.

But best to read this direct from Chris Nelson:

The Nelson Report -- 5 February 2010

GEITHNER/WANG QISHAN PHONE CALL.....two versions

SUMMARY: preceding the President's talk to US business persons about the pressing need for China to allow the RMB to be revalued, Treasury Secretary Geithner called his Chinese counterpart, Wang Qishan.

Content of the call? Two Versions

From the US: Geithner warned Wang that patience here has expired, and that if China does not launch a solid move toward rebalancing by the end of March, Obama will authorize Treasury to "cite" the PRC for currency manipulation in the twice annual report to Congress, first due in April.

Chinese version: Wang told Geithner where he could put it, and seemingly threatened a pullback on T-bill purchases, and retaliation on US exports to China.

The fuller story. . .

US-CHINA RMB...on the "one phone call/two countries" chat noted in the Summary, the two versions are not mutually exclusive, since the alleged Chinese response
is substantially that made in public in December by Premier Wen.

And as we've reported, senior Treasury officials were in Beijing prior to this week's excitements, relaying US concerns, and putting China on notice that revaluation was now the #1 US econ/finance issue for this year. Sources now indicate Treasury's "take" on the militant Chinese response reflects one of two things:

Either a) there has been a clear State Council decision not to move and Wen is telling us all about it, loud and clear, or b) China's domestic politics requires a period of strident "remarks" to the outside world before they actually do move, on their own terms, so it will look like it isn't because the foreigners said to do so.

Sources also indicate Geithner himself was considering going over to Beijing in recent weeks. The Chinese allegedly said, in essence, if you come, we will be forced to embarrass you, so don't come...that won't be good for managing the currency issue.

We'd comment that this point of view, if accurate, is encouraging in the sense that it confirms a continued Leadership determination to not let things slide out of control...and it may also help explain Geithner's optimistic remarks to senators yesterday.

However, sources also report what one calls "a rather furious debate" going on in China at the moment about all this between factions who see themselves as inflation fighters, "vs" the exporters and state planners.

Loyal Readers with insights...please don't be shy.

Our Report items on the currency situation generally prompt a lot of informed response, informed in the sense of coming from real economists and China analysts who really understand this stuff...and not just the politics of it on both sides.

One sample last night, from an anonymous expert, picking up on the "don't push me in public" point:

"Regarding the RMB, it has been in China's macro-economic interest for many years to allow the RMB to float (or at least have a lightly managed float). Trying to manage the Chinese economy while having the RMB tied to the dollar takes away a significant monetary tool from the Chinese government. This has been said to the Chinese several times ever since the currency issue arose and the Chinese have acknowledge this for many years.

Thus, this is certainly no epiphany now and Secretary Geithner is not the first to say it. Also, one of the biggest challenges in engaging with China on the RMB issue is whether raising the issue in a more public and forceful way will either finally convince the Chinese leadership to allow it to float or make them less likely to do so out of concern that they would appear to be bending to the U.S."

And this from another close observer on what might work, or not:

"We should all keep in mind that a Chinese revaluation of 5-10% would solve little. For them, it's about managing hot money inflows. As part of a revaluation, they will unquestionably continue to protect their exports by ramping up subsidies, including the VAT. To be meaningful, a Chinese revaluation would need to be more significant...note Bergsten et al are still talking a possible undervalued range of up to 40% relative to the dollar."

We should note the response yesterday of Heritage Foundation China economist Derek Scissors, who warns/worries that even a revaluation in excess of 40% wouldn't meet Obama's hopes:

"Chris...do we care about exports or net exports (the trade surplus)? From July 2005 through June 2008, the RMB rose 20% against the dollar. And post-appreciation H108 US exports to China were 90% larger than H105 (pre-appreciation). Success!

But the H108 trade deficit was still 30% larger than the H105 deficit. Is that kind of result going to make the President and, especially, Congress happy? There's no chance the Chinese will proceed with a revaluation big enough to do what Congress wants."

So summing up on revaluation...this discussion shows why we really need to watch to see if the Administration's financial adults (Summers, Geithner, Volcker, etc.) advise Obama that the time has come to really go after the RMB as a strategic issue.

Congress has been pushing "currency legislation" for several years, now, and we've often noted in prior Reports that the sort of bill to watch would allow the Commerce Department to push CVD cases calling currency misalignment an "actionable subsidy".

Advocates of that approach predict it would provide far more effective leverage than taking China to the WTO, or citing China as a currency manipulator under U.S. law.

Needless to say, this notion is why we have frequently reported on the "headline risk" vs "real risk" factor in currency legislation. Should Obama become so frustrated with China's pace of action on the RMB that he authorizes a CVD approach, it wouldn't just be Wall Street predicting a firm Chinese response...aka "a trade war".

An concerned observer ruefully concludes:

"But if we want to get this done [get China to meaningfully revalue], we aren't going to get there by 'citing' China in a report to Congress. That's a very ineffective tool, or taking them to the WTO...either action would basically set up an extended 'negotiation' with no real 'teeth'."

OK, so what should the Administration be doing?

"More multilateral pressure (not the WTO, but using the G7, G20, APEC, etc.) and bringing together the developing countries, who are really getting hammered by the undervalued RMB (so much for China being a 'champion of the developing world'!), and carefully calibrated bilateral pressure..."

Let's leave last word for tonight to that good Republican lad, Derek Scissors, who adds this "larger" concern:

"The Obama Administration wants to support exports. Not all exporters can be supported; this naturally and inevitably involves picking beneficiaries of government aid. At the same time, the President has declared a desire to dissuade companies from certain other forms of international activity, through tax increases. There is a huge difference in degree between this and Chinese industrial policy, but is there a difference in kind?

The President could support exports by cutting related or general corporate taxes. Instead, he's going to enlarge the government to support exports and enlarge the government again through levies to discourage outsourcing and investment overseas. I can't wait to find out that some of the companies being taxed for their "bad" international activity are also being subsidized for their "good" international activity."

The Nelson Report

-- Steve Clemons

So, the administration says that 'official unemployment' falls to 9.7% from 10.0% but that the economy still shed 20,000 jobs.

The real story here is that a class of worker that the administration mostly ignores but which Leo Hindery has been pointing a screaming headlight at -- unemployed, plus underemployed and discouraged workers -- are working a bit more, at least some of them.

Hindery actually has a more interesting story to tell in what is happening with "real unemployment" which has dropped from 19.1% last month to 18.4% for January 2010.

Those people working cut back hours are apparently working more than they were, but as of yet, an overall number of new jobs is not being created.

I am going to post Leo Hindery's Monthly Jobs Report here and follow it with Council of Economic Advisers Chair Christina Romer's report distributed by the White House.

First, Leo Hindery's January 2010 "Real Unemployment" Report:

Friends,

Using its Current Population Survey of non-farm jobs, the Labor Department's Bureau of Labor Statistics just announced this morning that in January 2010 "U.S. employers decreased [non-farm] payrolls by 20,000 jobs and the unemployment rate fell to 9.7%."

It noted that there are now 14.8 million unemployed workers, and that since the recession began [in December 2007] employment has decreased by 7.8 million. (I should note that in its report the BLS also revised down sharply its December 2009 job loss figure to 150,000, from an originally reported 85,000 drop.)

As we have been noting, the monthly BLS announcement regarding unemployment:

· uses only a survey of households rather than much more accurate payroll data;

· excludes changes in employment among the nation's 11.1 million farm and self-employed workers, even though these two categories represent more than 7% of the civilian labor force; and

· most important, does not take into account the 14.4 million workers who are part-time-of-necessity [8.3 mm], marginally attached [2.5 mm], or out of the labor force because they are "discouraged" [3.6 mm].

Our "Summary of U.S. Real Unemployment" makes these three adjustments; it also identifies average weeks unemployed, job openings, and the real jobs 'shortfall'. With the three adjustments made:

· The number of employed workers in all three categories of employment - non-farm, farm and self-employed - increased by 541,000 in January.

· The real unemployment rate is 18.4%.

· The number of real unemployed workers in all four categories of unemployment - BLS, part-time-of-necessity, marginally attached, and discouraged - totals 29.3 million.

· The number of real unemployed workers has increased by 12.5 million since the start of the recession. (In contrast, we should have been creating a net 2.7 million new jobs in the past 25 months just to keep up with the natural growth of the labor force of around 108,000 workers per month.)

· The economy is short 21.3 million jobs in order to have a real unemployment rate of 5%, which would generally be considered 'real full employment'.

(Much of the national press now uses our real unemployment numbers, except some still leave out discouraged workers despite the fact that this huge category is arguably the most effectively unemployed of the four unemployment categories - this omission leads to a rate of 16.5% instead of our overall real unemployment rate of 18.4%.)

The current average number of weeks unemployed is at least 30.2 and the number of workers unemployed at least a half year is at least 9.9 million [i.e., BLS's figure of 6.3 mm plus the 3.6 mm discouraged workers]. (Note: These two numbers are much better measures of real employment health than is the more publicized rolling four-week average of initial unemployment claims, which at around 450,000-500,000 workers is at best a very limited snapshot of the true state of the economy.)

Kindest regards,

Leo Hindery

Now from the White House:

Statement by Chair of the Council of Economic Advisers Christina Romer on the Employment Situation in January

On the Employment Situation in January

While unemployment remains a severe problem, today's employment report contains encouraging signs of gradual labor market healing. The unemployment rate fell three-tenths of a percentage point and employment rose in a number of industries, though overall employment fell slightly.

The unemployment rate declined from 10.0 percent to 9.7 percent. This decline occurred despite a modest rise in the labor force. The broadest measure of the unemployment rate, which includes all persons marginally attached to the labor force and workers working part time for economic reasons, fell almost a full percentage point. Obviously, the unemployment rate remains unacceptably high, and is even worse for certain demographic groups such as teenagers and black or African American workers.

Overall payroll employment declined 20,000 in December. This total reflects substantial variation across industries. Employment in manufacturing rose for the first time since January 2007, led by an increase in employment in motor vehicles and parts. Employment also rose in retail trade and in temporary help employment. Employment fell, however, in construction and state and local government.

Even as today's numbers contain signs of the beginning of recovery, they are also a reminder of how far we still have to go to return the economy to robust health and full employment. Indeed, with the benchmark revision announced today, we now know that the total job loss over the recession was more than 1 million larger than previously estimated.

That is why at the same time that he released a plan for reining in the budget deficit over the medium and long run, the President has called on Congress to enact responsible, targeted actions to jump-start job creation. His proposals for a small business jobs and wages tax cut and a new program to encourage small business lending are important steps to help the businesses that are essential to robust job creation. Today's numbers showing continued decline in construction and state and local government employment emphasize the importance of two other of the President's priorities--continued infrastructure investment and additional aid for strapped state and local governments.

There will likely be bumps in the road ahead. The monthly employment and unemployment numbers are volatile and subject to substantial revision. Therefore, it is important not to read too much into any one monthly report, positive or negative. It is essential that we continue our efforts to move in the right direction and replace job losses with robust job gains.

Bottom line: American workers are not out of the woods yet by a long shot. And when one looks at a looming $200 billion in shortfall in state budget revenues ahead in 2010, which will have significant destimulative effects, there are another 3 million jobs slated to be cut rather than created.

-- Steve Clemons

The Obama team has not had a very good month.

From GITMO to health care, to bickering behind the scenes about Paul Volcker's bank regulation efforts, to China policy, and making any progress on any international initiatives, the administration's "magic" has been collapsing.

But Senator Richard Shelby (R-AL), by placing a "hold" on ALL Obama nominees who need Senate confirmation has so overstepped the line between what is fair and what is outrageous, that Obama's team got an unintended assist.

And the reason for the hold?

Federal contracting to bolster Alabama production of aging tankers -- i.e. pork.

I recommend a big box of chocolates from Obama to the Alabama Senator and his team.

-- Steve Clemons

In this short interview during his Washington visit, Kenya VP Kalonzo "Steven" Musyoka speaks impressively about his participation in the National Prayer Breakfast, about concerns on Kenya's border in Somalia, about the limits of military responses in failing state situations, and about the views of Kenyans toward US President Barack Obama.

This was one of my favorite chats I have done thus far for the New America Foundation and The Washington Note. If you want to watch more of Vice President Musyoka and Kenya National Assembly Speaker Otiato "Kenneth" Marende in a longer program held yesterday at the New America Foundation, follow this clip.

-- Steve Clemons

The New America Foundation/Iran Initiative is hosting an event today to discuss what the Iranian public really thinks on key issues and the implications for US foreign policy.

Since the Iranian elections last June, there has been no shortage of commentary surrounding Iranian public opinion, but comparatively little evidence-based analysis.

WorldPublicOpinion.org (WPO) will present the findings of an in-depth analysis of twelve well-documented polls from three different sources addressing the central questions of whether the Iranian people perceive their government as illegitimate, how they voted in the June 12th election, and how the opposition views the US and Iran's nuclear program.

This event will STREAM LIVE today from 12:15pm - 2:15pm simultaneously here at The Washington Note and at The Race for Iran.

The full agenda is below.

Panel #1: Analysis of the Polling Data

Steven Kull
Director
WorldPublicOpinion.org

Jon Cohen
Director of Polling
Washington Post

Panel #2: Implications for U.S. Policy

Flynt Leverett
Director, Iran Initiative, New America Foundation
Publisher, The Race For Iran

Hooman Majd
Author, The Ayatollah Begs to Differ

Barbara Slavin
Author, Bitter Friends, Bosom Enemies: Iran, the U.S., and the Twisted Path to Confrontation

moderator
Steve Clemons
Director, American Strategy Program
New America Foundation
Publisher, The Washington Note

-- Ben Katcher

NOTE; THE START OF THE EVENT HAS BEEN PUSHED TO 10:15 AM EST

The New America Foundation/American Strategy Program is hosting an event today featuring the Kenyan Vice President Kalonzo Stephen Musyoka, as well as the Speaker of Kenya's National Assembly Kenneth Otiato Marende and Kenya's Minister of Cooperative Development and Marketing Joseph W.N. Nyagah.

The delegation will provide an understanding of the fragile situation in Somalia and its implications for both Kenya and the United States.

For more background on this topic, see my post from yesterday.

The event will run from 10:00 am -11:30 am and will STREAM LIVE here at The Washington Note.

-- Andrew Lebovich

This is a guest note exclusive to The Washington Note by Iran expert and well-known diplomatic correspondent Barbara Slavin, author of Bitter Friends, Bosom Enemies: Iran, the U.S. and the Twisted Path to Confrontation.

Barbara Slavin will be speaking today at a New America Foundation forum titled "What do Iranians Really Think?" featuring New America Foundation Geopolitics of Energy Initiative Director and Race for Iran publisher Flynt Leverett, World Public Opinion Director Steven Kull, Washington Post Director of Polling Jon Cohen, and Iran expert and The Ayatollah Begs to Differ commentator Hooman Majd. Steve Clemons will moderate the meeting which starts at 12:15 pm today and will air live here at The Washington Note

Dawn of a New Iran?

Iran is now marking the "10 days of dawn" - the period from Feb. 1 to Feb. 11, 1979 that began with Ayatollah Ruhollah Khomeini's triumphant return from exile and ended with the fall of the Shah's last government. During these days, Iranian state television typically runs old footage of adoring crowds greeting Khomeini and of the Shah's soldiers firing on peaceful protesters during the final days of the revolution. This year, however, the bloody bits are not on view.

An Iranian acquaintance tells me that state TV is only showing "calm rallies" from the 1978-79 uprising. "They are focusing on the people who were totally obeying Khomeini," my friend says, and also deriding those who "betrayed the revolution" and who later fled or were executed by the regime.

The message for Iran's restive populace is clear: forget staging another revolution.

The regime wants Iranians to behave themselves on Feb. 11, "Revolution Day," when crowds are encouraged to go into the streets in support of the government. In Tehran, thousands usually congregate in Freedom Square, the central plaza where the Shah erected a huge white concrete arch to celebrate Iran's pre-Islamic achievements and to glorify his soon-to-be ended rule.

I've been to three Revolution Day celebrations in Freedom Square and I know the drill: The president gives a rousing speech proclaiming Iran's independence and decrying evil foreigners who conspire against it. A man known as "the minister of slogans" leads the crowd in chanting "Death to America," "Death to Israel" and "Death to" whatever other target is annoying the regime at the time. Peddlers mill about selling candy and balloons. School kids and factory workers, who are given the day off, are bussed into the square to fill out the frame for state television and foreign media.

This year promises a different sort of spectacle. Despite the pointed propaganda on TV -- and the execution this week of two political prisoners -- hundreds of thousands if not millions of Iranians are likely to take to the streets to demand their civil and human rights.

The government will be hard-pressed to distinguish loyalists from the opposition in the throngs. Will authorities arrest people wearing green? In the past, students bussed to Freedom Square have worn green headbands proclaiming Iran's right to nuclear energy.

But green is now the color of the movement that has swept Iran since presidential elections last June 12 gave a fraud-tainted "landslide" victory to incumbent Mahmoud Ahmadinejad.

Coverage of this year's event in Freedom Square presents another quandary for the government. Foreign media is almost certain to be heavily restricted and Iranian state media will likely censor any protests. But that will not stop citizen journalists with cellphones from capturing images and sending them around the world via social networking sites.

For sure, there will be clashes. Another Iranian acquaintance tells me that the government is refusing any compromise despite conciliatory feelers in recent days from opposition leaders Mir Hossein Mousavi and Mehdi Karroubi.

If the opposition, which has already shown its power on Jerusalem Day, Students Day and Ashura, manages to dominate the scene on the Islamic Republic's most important national holiday, it will be a powerful boost for the Green Movement's morale and momentum.

No one can say how long Iran's creaky theocracy cum military autocracy will survive this outpouring of popular outrage and frustration. Mass arrests, selective assassinations and even prison rapes have only fed the opposition's anger and resolve.

For those who have been privileged to spend time in Iran among its extraordinarily welcoming people, this is a moment of great hope and anticipation. Iranians deserve a better government and perhaps in the not so distant future, they will finally get one.

-- Barbara Slavin

There is a giddiness that has taken hold in some foreign policy circles in Washington that the Obama administration is showing more courage all of a sudden and is finally breaking away from its courtship of China and is flirting with unilateral paths to ratcheting up pressure on Iran.

This new trend is evident in pushing forward a large arms sale package to Taiwan, in a planned Obama meeting the Dalai Lama, and in Hillary Clinton publicly chastising China's minimalist participation in global efforts to redirect Iran's nuclear weapons ambitions.

The US Congress has also quickly pushed an Iran Sanctions bill that after passing both the Senate and the House of Representatives now goes to reconciliation -- but this bill is outpacing important and fragile coalition building efforts on Iran strategy involving the Europeans, Russians, Japanese, and yes -- even China.

There are some who worry that America's eagerness to throttle Iran without respecting and working through the resolutions machinery of United Nations will undermine the ability of other key powers -- particularly Germany, France, the United Kingdom and Japan -- to maintain public support for America's position. Some in Europe are worried that American unilateralist tendencies are perking up again.

The larger trends in both China policy and on Iran are worrisome. In the China case, America -- all of a sudden -- seems to be tethering itself to policies designed to frustrate China's own political and policy goals, inevitably raising the price of China's cooperation with the United States on other vital fronts and undermining the chances of the US achieving some of its most important global objectives.

Dealing with China can be frustrating -- particularly as China continues what is mostly a mercantilist path to its own development -- with little appreciation for how its economic course is undermining global economic stability.

But a presidential meeting with the Dalai Lama, who I agree is a symbol of peace and tolerance around the world, should not be confused with real power nor be seen as an event that helps the US achieve its higher ordered goals.

Power is earned by the achievement of goals and objectives that the US sets out for itself. Most of these goals -- whether in changing the vector of Middle East instability, establishing a new global arms control and WMD nonproliferation regime, or achieving binding protocols on climate change remediation -- will require support from other key global stakeholders. That means China. That means Russia. And that means ongoing maintenance of vital European relationships.

The US-China relationship has veered from being overly acquiescent to Chinese priorities and sensibilities to now what looks like American spitefulness towards China -- with no sense of underlying strategy of what America's core national security and economic objectives are and how these converge or diverge from Chinese interests.

In the economic sphere, America and China need to engage in a serious work out effort that simultaneously decreases the most dysfunctional parts of massive economic imbalances but that also helps to restore American growth, innovation, and consumption. But that takes balance, trust building and strategy.

That's not the course the US is now on in the antics we are seeing all of a sudden from the Obama team.

The Obama national security group is no doubt frustrated with China's foot-dragging on a number of key issues, particularly Iran and climate change, and to some degree is threatening Chinese leaders with the prospects of instability in its relations with the US.

But the problem with that strategy is that America's planned health care overhaul, America's homeland investment and revitalization efforts, and America's multiple wars are financed today by China. China's economy is rapidly growing -- and China is ascending in terms of global power.

The US needs to get back to thinking through key interests and needs to find ways other than public humiliation and international embarrassment to manage a complex relationship with a rapidly more powerful China.

Without multilateral efforts that include China, the US may get giddy and intoxicated by the self-righteous fumes of asserting its positions on climate, or Iran, or terrorism -- but ultimately, the US will achieve nothing.

-- Steve Clemons

(Steve Clemons publishes the popular political blog, The Washington Note and directs the New America Foundation's American Strategy Program and Great Powers Initiative. Clemons can be followed on Twitter @SCClemons)