Author: Matthew G. Saroff

And While We are On the Subject of how Hedge Funds are F%$#ing the Pension Funds

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Mission Accomplished:
First, you get money to your cronies, and 2nd you f%$# public servants and pub lic sector unions.

Sometimes, it is not just over-priced under-performance, sometimes, it’s corruption. Case in point, the  disastrous decision by Chris Cristie to move a significant portion of New Jersey’s pension funds to Christie cronies on Wall Street:

New Jersey investment officials have directed increasingly large slices of state pension money into riskier investments, such as hedge funds, touting their strategy as a means of limiting exposure to a volatile stock market. They’ve argued that their approach would maximize overall returns and justify the higher fees paid to Wall Street money managers.

But in seven of the eight years since the state began shifting pension funds into so-called alternative investments, returns have fallen well short of the broader stock market, an analysis of state financial records shows. In those seven years, New Jersey’s alternative investment portfolio has produced gains of just more than half of the S&P 500, the widely watched index seen as a proxy for shares of large corporations.

Since Gov. Chris Christie took office, he has nearly tripled the amount of retiree cash invested in alternative investment firms — many of whose employees have made financial contributions to political groups backing Christie’s election campaigns. In that time, the gap between New Jersey’s alternative portfolio and the broader market has rapidly expanded, costing taxpayers billions in unrealized returns and threatening the financial stability of the $78 billion pension system. The state’s pension funding shortfalls — which have been exacerbated by Christie’s market-trailing investment strategy — were one of the factors cited by Fitch Ratings in its decision last week to downgrade the state’s bond rating for the second time.

………

“The idea that hedge funds, private equity funds and other alternative investments beat stock-index funds over the long haul is an urban myth like the tooth fairy,” said Jeff Hooke, a former Lehman Brothers investment banker who in 2012 published a study showing that higher alternative investment fees correlated to lower pension returns. “The managers of these big state pension funds are drinking the Wall Street Kool-Aid. The problem with these alternative investments is that they have a tough time beating the low-fee index funds because the fees for alternatives are so big.”

Even without considering fees, cheap (a 90% lower expense ratio) index funds outperform the aggressively managed money.

When you add in the rapacious fees charged, it’s not even close.

This lack of performance, and his refusal to make necessary pension payments earned him a downgrade from S&P as well:

In a significant blow to Gov. Chris Christie, Standard & Poor’s on Wednesday said it is downgrading New Jersey’s credit rating. The announcement said Christie’s management of New Jersey’s $78 billion pension system has “significant negative implications” for the state’s finances. S&P also cited the state’s below-expected tax revenues as a factor that “put additional pressure on future budgets.” The downgrade comes as Christie aides have been publicly suggesting that the governor’s fiscal-management record would be a boon should he decide to run for president in 2016.

Bloomberg News notes this is the eighth downgrade during Christie’s tenure and the Washington Post reports that “New Jersey’s credit rating has been downgraded more under Chris Christie than any other governor” in the United States.

Neither Christie’s office nor the New Jersey Department of Treasury responded to emails from International Business Times requesting comment about the S&P downgrade.

Citing Christie’s decision to not make actuarially required pension payments that he had previously agreed to, S&P’s downgrade announcement says New Jersey has “demonstrated [a] lack of commitment when it comes to funding its annual contributions.” S&P says it expects the pension system’s finances “to decline much more significantly” in the coming years.

BTW, there has been a formal ethics complaint fired on his pension policies:

New Jersey’s biggest labor union today plans to file a complaint with the State Ethics Commission against a key adviser to Gov. Chris Christie who is in charge of the agency that oversees pension investments.

In an 11-page letter to the ethics commission, New Jersey AFL-CIO President Charles Wowkanech said that the chair of the State Investment Council, Robert Grady, “has violated the Division’s own rules barring politics in the selection and retention of such funds and investments, and has further created an appearance of impropriety.”

At issue is the state’s investment of hundreds of millions of dollars of pension money with Wall Street firms, including hedge funds and other types of “alternative investments” that charge higher fees than more traditional types of investments — a practice that started before Christie was governor but has increased under him.

Some “key executives” of the firms donated to state and national Republican organizations that helped Christie, according to Wowkanech, who said those donations potentially broke state pay-to-play laws, and at the least violated the state officials’ code of ethics. Wowkanech wants an investigation.

And on top of all this, it now appears that the Christie administration is using fuzzy math to goose their return on investment.

It’s clear that Christie has moved from bombast to damage control in this matter:

The New Jersey Division of Investments has quietly sold its stake in a venture capital fund managed by General Catalyst Partners, following allegations of impropriety related to a political contribution from General Catalyst “executive-in-residence” and current Massachusetts gubernatorial candidate Charlie Baker.

Fortune has learned that the sale agreement was inked back in August, and closed within the past several weeks. It may be publicly disclosed tomorrow during an open State Investment Council meeting, and was discussed during an investment policy committee call last week. No word yet on the buyer, although a source says that the sale price was around 1.5x of cost.

I so hope that this guy runs for President.

The scrutiny he’ll get will destroy any future for him in politics.

This is the Proverbial, “Big F%$#ing Deal”

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The largest pension fund in the nation, Calpers, has decided that it will not longer have hedge funds manage its money:

The California Public Employees’ Retirement System, the nation’s largest pension fund, will eliminate all of its hedge fund investments over the next year on concerns that investments are too complicated and expensive.

The pension fund, which oversees $300 billion, said on Monday that it would liquidate its positions in 24 hedge funds and six hedge fund-of-funds — investments that total $4 billion and more than 1 percent of its total investments under management.

The decision, after months of deliberation by the pension fund’s investment committee, comes as public pensions across the United States are beginning to assess their exposure to hedge funds. It is likely to reverberate across the investment community in the United States, where large investment funds look to Calpers as a model because of its size and the sophistication of its investments.

“Hedge funds are certainly a viable strategy for some, but at the end of the day, when judged against their complexity, cost and the lack of ability to scale at Calpers’ size,” the hedge fund program “doesn’t merit a continued role,” Ted Eliopoulos, the interim chief investment officer of Calpers, said in a statement.

Typically, hedge funds charge 2% of the fund plus 20% of any appreciation.

By comparison, Vanguard’s S&P 500 index fund has an expense ratio of 0.17%, and it turns out that they don’t generally outperform index funds, so you are not getting alpha (beating the market), and notwithstanding their protestations to the contrary, they don’t deliver lower volatility (beta) either, as is evidenced by the frequency that the almost cliched phrase, “Once high flying hedge fund,” appears in the financial press.

The reason that this is a big deal is not that this is a huge change in policy by Calpers, it only had a bit over 1% of its assets managed by hedge funds, but there are a lot of other public pensions out there that follow its lead, and if they start bailing, the hedgies will have to find honest work to make a living.

H/t naked capitalism, which had the best quote on the possibility of pension funds bailing on hedge funds:

One of my interlocutors said “OMG, hedgies will be jumping out of floor to ceiling windows in fancy modern building after throwing artsy pieces of modern furniture through them. There aren’t enough dumb enough rich investors to go around once the hedgies have lost the pension fund business. Short yachts, watch markers, GT cars, and Greenwich real estate.”

Look out below.

It’s gonna be raining Katz and Goldmans and Sachs.

And I Would Have Gotten Away With it Too, If it Weren’t For Your Meddling N***ers!

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First we have Georgia State Senator Fran Millar objecting to get out the vote efforts in black ares then following this up by saying explicitly that he it is the black voter voter bit:

The Georgia state senator who ranted about excessive black voting and vowed to fight a move to expand early voting in DeKalb County defended his remarks on Facebook, saying that he would rather have more educated voters than an increase in the total number of voters.

 The Republican state senator, Fran Millar (pictured), wrote that in a comment responding to others on his post where he vowed to end Sunday balloting in DeKalb County because that area is “dominated by African American shoppers” and has “large African American mega churches.”

 “I do agree with Galloway and I never claimed to be nonpartisan,” Millar wrote. “I would prefer more educated voters than a greater increase in the number of voters. If you don’t believe this is an efort [sic] to maximize Democratic votes pure and simple, then you are not a realist. This is a partisan stunt and I hope it can be stopped. Furthermore I don’t control where people are allowed to vote but am glad Brookhaven has been added for the last week.”

This is followed up by the Georgia Secretary of State, whose job is to protect the franchise, starts a bogus investigation of a GOTV group, and then is caught on tape calling increased black votes a problem:

The audio, posted on YouTube by Better Georgia, features a man identified as Georgia Secretary of State Brian Kemp telling fellow Republicans at a July 12, 2014 event in Gwinnett County:

In closing I just wanted to tell you real quick, after we get through this runoff, you know the Democrats are working hard, and all these stories about them, you know, registering all these minority voters that are out there and others that are sitting on the sidelines, if they can do that, they can win these elections in November. But we’ve got to do the exact same thing. I would encourage all of you, if you have an Android or an Apple device, to download that app, and maybe your goal is to register one new Republican voter.

Clearly the Supreme Court was either smoking some very good weed, or were a bunch of contemptible corrupt partisans, when they gutted the Voting Rights Act.

My money is on the latter.

Tepid

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What a shocker.

Obama wants the folks who have supported Jihadis in Syria to take a lead roll in fighting the Jihadi group that has gotten out of hand, ISIS/ISIL/IS, and rather unsurprisingly, their response is f%$3 you white man:

Many Arab governments grumbled quietly in 2011 as the United States left Iraq, fearful it might fall deeper into chaos or Iranian influence. Now, the United States is back and getting a less than enthusiastic welcome, with leading allies like Egypt, Jordan and Turkey all finding ways on Thursday to avoid specific commitments to President Obama’s expanded military campaign against Sunni extremists.

As the prospect of the first American strikes inside Syria crackled through the region, the mixed reactions underscored the challenges of a new military intervention in the Middle East, where 13 years of chaos, from Sept. 11 through the Arab Spring revolts, have deepened political and sectarian divisions and increased mistrust of the United States on all sides.

“As a student of terrorism for the last 30 years, I am afraid of that formula of ‘supporting the American effort,’ ” said Diaa Rashwan, a scholar at the Al-Ahram Center for Political and Strategic Studies, a government-funded policy organization in Cairo. “It is very dangerous.”

The tepid support could further complicate the already complex task Mr. Obama has laid out for himself in fighting the extremist Islamic State in Iraq and Syria: He must try to confront the group without aiding Syria’s president, Bashar al-Assad, or appearing to side with Mr. Assad’s Shiite allies, Iran and the militant group Hezbollah, against discontented Sunnis across the Arab world.

While Arab nations allied with the United States vowed on Thursday to “do their share” to fight ISIS and issued a joint communiqué supporting a broad strategy, the underlying tone was one of reluctance. The government perhaps most eager to join a coalition against ISIS was that of Syria, which Mr. Obama had already ruled out as a partner for what he described as terrorizing its citizens.

You can have a successful war, or you can continue to overthrow the Assad regime.

I don’t think that you can have both.

Assad, Hezbollah, and Iran, are about the only participants in this little adventure who are truly enthusiastic about helping to put ISIS down.

You fight the war with the allies you have, not the allies you want.

So, 4 More Wars

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My son turned 15, and we took him out to dinner last night, so I did not watch Obama’s speech last night.

Reading the transcript has lead me to agree with Dan Froomkin, who described his stated strategy as a, “Hot Mess.”

The New York Times rather pithily observes, “American intelligence agencies have concluded that it poses no immediate threat to the United States. Some officials and terrorism experts believe that the actual danger posed by ISIS has been distorted in hours of television punditry and alarmist statements by politicians.”

That’s my analysis in a nutshell:  Obama is a prisoner of “inside the Beltway” conventional wisdom, which is, “Something is wrong with the world, we must bomb it.”

I would note that, rather unsurprisingly, the Saudi offer of “support” is to set up training camps for “moderate” rebels, where the US military will train them to “fight ISIS”.

Considering the fact that it was Gulf state support for the rebels in the first place that turned a brutal crackdown on protests into a civil war, and Saudi Prince Bandar bin al Sultan was ISIS’s primary patron, and we’re going to help them to continue the Sunni-Shia “great game” there.

I also think that the course of action proposed by Obama is far more optimistic about the facts on the ground than is justified, and as blogger Pat Lang observes, the strategy that Obama is promulgating has, “Too many moving parts.”

He notes that Obama is assuming that the Gulf states and Turkey will blithely work with the Shia government in Iraq, that the new government in Baghdad will be inclusive enough to bring Iraq’s Sunnis back into government, that we can fight ISIS in Iraq while supporting the “right” rebels in Syria, and rebuild the Iraqi army, and continuing to show implacable hostility to Iran, all while not putting any American “feet” on the ground.

Also remember that we are not targeting isolated cells of insurgents, ISIS is effectively a government in the areas that it controls.

It won’t be driven out by airstrikes.

We are back in Iraq, and we will have troops in combat situations on the ground before Obama leaves office.

So much for Obama’s opposition to “Stupid Wars.”

Ha-Ha!

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Dinesh D’Sousa pled guilty in May for laundering political donations, and now we are getting to the sentencing, and it appears that the prosecutors are not amused by his constant bleatings claiming that it was a politically motivated prosecution:

The U.S. government wants conservative author and filmmaker Dinesh D’Souza to be sentenced to as much as 16 months in prison, following his guilty plea to a campaign finance law violation.

In a Wednesday court filing, federal prosecutors rejected defense arguments that D’Souza was “ashamed and contrite” about his crime, had “unequivocally accepted responsibility,” and deserved a sentence of probation with community service.

D’Souza, 53, admitted in May to illegally reimbursing two “straw donors” who donated $10,000 each to the unsuccessful 2012 U.S. Senate campaign in New York of Wendy Long, a Republican he had known since attending Dartmouth College in the early 1980s.

The government said a 10- to 16-month prison sentence was appropriate for D’Souza, and necessary to deter others from abusing the election process, including “well-heeled individuals who are tempted to use their money to help other candidates.”

It also said D’Souza waited to “the last possible moment” prior to trial before admitting guilt, and then went on TV shows and the Internet to complain about being “selectively” targeted for prosecution, and having little choice but to plead guilty.

“Based on the defendant’s own post-plea statements, the court should reject the defendant’s claims of contrition on the eve of sentencing,” prosecutors led by U.S. Attorney Preet Bharara in Manhattan said in the filing.

Arrogance is as arrogance does, I guess.

I’m hoping for jail time. 

Not only will it do the rest of us some good, but it might provide an opportunity for him to learn penitence (in the penitentiary).

Seriously, this guy is starting to sound like the David Koresh of movement conservatism and needs a serious dose of reality.

Yes, We Must Support all Disruptive Business Models, Regulations be Damned

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These are only a few of the allegations brought against Uber drivers in recent months, and today the company adds another black eye to its record: allegedly denying service to the blind.

According to the San Francisco Examiner, the National Federation of the Blind filed a lawsuit in a federal court against Uber yesterday, claiming that Uber drivers have refused service to blind people with service dogs on more than thirty occasions. In one instance, a driver allegedly shoved a woman’s guide dog into the trunk of his car and refused to stop the vehicle after the passenger realized what had happened. To add insult to injury, the lawsuit also states that some customers were charged cancellation fees after being refused a ride.

This behavior, along with being appallingly unfair, appears to be a pretty clear violation of the Americans with Disabilities Act, which bans discrimination against the blind by taxi companies, even if the car is operated by a private independent contractor.

………

But the Federation also claims that it tried to resolve the issue with Uber without filing a lawsuit, but the company rejected its negotiation proposal. Furthermore, the lawsuit alleges that Uber told customers that its independent drivers were out of the company’s control, and the best advice it could give was to mention the animal before the driver arrives. That may not be the soundest advice, considering that if drivers are willing to reject disabled riders in person, then they’re probably even more likely to do so over the phone or through the app.

………

But if what the lawsuit alleges is true, and Uber refused to negotiate with victims of discrimination while doing little to stop this discrimination from happening in the first place, then it sounds like Uber’s back to its old tricks — stonewalling and shirking responsibility whenever its drivers breaks the law.

This is not a bug, it’s a feature.

Discrimination, price gouging, sketch driver background checks, it’s all a part of Uber’s Ayn Rand driven ethos.

If you get cheated, discriminated, hurt, or dead, it’s your fault, because you aren’t being selfish enough.

This is the Least Surprising News of the Day

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I haven’t had a whole lot to say about Ray Rice beating his fiancee (now wife).

It’s pretty straightforward: You do not hit hit your significant other, ever.*  That is all that needs to be said.

But the burgeoning scandal erupting from the months long coverup by the NFL requires a bit more analysis:

A law enforcement official says he sent a video of Ray Rice punching his then-fiancée to an NFL executive five months ago, while league executives have insisted they didn’t see the violent images until this week.

The official played The Associated Press a 12-second voicemail from an NFL office number on April 9 confirming the video arrived. A female voice expresses thanks and says: “You’re right. It’s terrible.”

“We are not aware of anyone in our office who possessed or saw the video before it was made public on Monday. We will look into it.

”- NFL spokesman Brian McCarthy

Hours after the report Wednesday, Goodell announced former FBI director Robert S. Mueller III will conduct a probe into how the league pursued and handled evidence as it investigated claims against Rice.

NFL spokesman Greg Aiello said in a statement that the investigation will be overseen by owners John Mara of the New York Giants and Art Rooney of the Pittsburgh Steelers. Goodell said that Mueller will have access to all NFL records and will have full cooperation from league personnel.

The law enforcement official, speaking to the AP on condition of anonymity because of the ongoing investigation, says he had no further communication with any NFL employee and can’t confirm anyone watched the video. He said he was unauthorized to release the video but shared it unsolicited because he wanted the NFL to have it before deciding on Rice’s punishment.

The NFL has repeatedly said it asked for but could not obtain the video of Rice hitting Janay Palmer — who is now his wife — at an Atlantic City casino in February.

Just as an FYI, John Mara and Art Rooney, the guys running this “independent” investigation, are Goodell’s biggest boosters among the owners, and have many social and business connections.

I am so completely unsurprised by this.

For all their faux piety about the integrity of the sport,  it’s all about protecting them and theirs.

One wonders what low level functionary that they will find to throw under the proverbial bus.

*Various sporting activities, and certain forms of private entertainment by mutual consent (hopefully with a safe word) are excepted from this.

Andrew Cuomo is Such a Classy Guy

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As expected, Andrew Cuomo won the primary, though Zephyr Teachout and Tim Wu did a lot better than expected, polling at about 35%, far more than the 20% that was anticipated, so it was a bit of a black eye for Cuomo, and pretty much ensures that he will not be the VP pick in 2016.

Cuomo did not even bother having a victory party continuing his policy of not acknowledging Ms. Teachout’s, but he topped this when we found out that Zephyr Teachout unable to call him to concede because he refused to give her a number to call:

As expected, Governor Andrew Cuomo won New York’s Democratic primary on Tuesday night, but the success of his Mean Girls–esque strategy of ignoring rival Zephyr Teachout is still up for debate. With 90 percent of precincts reporting, Cuomo had 61 percent of the vote to Teachout’s 35 percent (with comedian Randy Credico at 4 percent). That’s not exactly the landslide Cuomo was looking for, and the governor embarrassed himself through his ridiculous efforts to avoid acknowledging the Fordham Law School professor, even when she was standing two feet away from him.

Apparently, Cuomo kept up the act straight through primary night. He did not hold a victory party (which would have suggested he participated in a primary), and Teachout was reportedly unable to concede to the governor with a phone call, as he wouldn’t give her his number.

 Really classy, Andy, really f%$# classy.

F%$# Me, I Agree With Mitch McConnel

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Yes, his motives are suspect, but when he calls for Congressional approval for the new war in Iraq, he’s right:

Senate Minority Leader Mitch McConnell told reporters on Tuesday that President Barack Obama should seek congressional approval for the U.S. strategy on ISIS.

“The view of myself and most of my members is the president should be seeking congressional approval, period, for whatever he decides to do because that’s the way you hear from those of us who represent everyone in the country,” the Kentucky Republican said.

McConnell stressed that Obama must come up with a plan and present it to Congress. He signaled “broad support” for U.S. action against the group.

“That’s the way you get congressional support. I’ve said — when Elizabeth Warren begins to sound like Dick Cheney, you know that there’s pretty broad bipartisan support here for dealing with this group of terrorists.”

He’s right.

I would actually go further, and say that a formal War Powers Act resolution.

This may be simple political posturing on the part of the Senate Minority Leader, but the ability to declare war was vested in the legislative branch for a reason.

Chuck Todd is Toast

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On Meet the Press yesterday, newly minted host Chuck Todd interviewed Barack Obama.

It did not go well:

As he says, you’ve got to be on it, paying attention to every word. Watch him nail Chuck for missing four separate mentions of Syria before telling the President he hasn’t heard him mention Syria.

Chuck Todd has just sounded the death knell of his gig as a host.

I give him 6 months.

Hostility and criticism is one thing, but I do not think that NBC News can deal with his being a punch line.

It’s not gonna end when Letterman retires, because Stephen Colbert is replacing him.

It’s kind of like Joe Biden said, “There’s only three things he mentions in a sentence — a noun, a verb, and 9/11,” of Rudy Giuliani.

Lamest Man in Massachusetts New Hampshire

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Scott Brown, of course, who, after losing to Elizabeth Warren, went to work for a law and lobbying firm, got his tits in a bundle with Lawrence Lessig who put out a flyer that criticized Brown as a lobbyist.

The Scott Brown campaign sent a cease and desist letter to Lessig’s campaign finance reform PAC:

Former Massachusetts Senator Scott Brown has attempted to revive his political career by running for Senate in New Hampshire. But in the final days before his September 9 primary, he’s squaring off against another opponent — Harvard professor Lawrence Lessig, who advocates against money in politics. Lessig’s Mayday PAC endorsed Brown’s GOP primary challenger Jim Rubens, and is now sending out a mailer calling Brown a “Washington lobbyist.”

The mailer led to an angry response from the Brown campaign. “This is a flat-out lie. Scott Brown is not nor has he ever been a lobbyist. Ever,” campaign manager Colin Reed wrote, calling on Lessig to “immediately cease and desist with the mailer in question.”

In response, Lessig posted the letter on his blog, and linked to an article from The Hill about Brown joining the Boston office of “Nixon Peabody, a law and lobby firm.” The firm itself said Brown would work on “business and governmental affairs,” including those related to “the financial services industry.” Lessig writes:

Yes, according to the Senate, Scott Brown isn’t a “lobbyist.” But I submit to anyone else in the world, a former Senator joining a “law and lobbying firm” to help with Wall St’s “business and governmental affairs” is to make him a lobbyist. Because to anyone else in the world, when you sell your influence to affect “business and governmental affairs,” you are a lobbyist.

You would think that a man who is a lawyer who has spent much of his life as a public figure would understand just what it means to be a public figure after New York Times Co. v. Sullivan, which required actual malice or a reckless disregard for the truth for libel and defamation suits.

Of course, in the process of making this demand, the hapless former Cosmo centerfold has served to generate publicity for the flyer.

See, “Streisand Effect, The”.  (Heh)

Well, the New York Primary Results Should Be Coming In Soon

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So I just wanted to note that Cuomo is going full arm breaker mode on endorsements: (Yes, it is a New York Post link, but Andrew Cuomo has deliberately cultivated an image of tolerating no dissent)

Gov. Cuomo and Mayor de Blasio used threats and intimidation in recent days to block prominent Democrats from backing leftist law professors Zephyr Teachout and her running mate, Tim Wu, in Tuesday’s primary, party insiders have told The Post.

The largely successful pressure has been especially intense to stop endorsements for Wu, who is given a real chance of defeating conservative-turned-“progressive” former upstate Rep. Kathy Hochul, Cuomo’s running mate for lieutenant governor, insiders said.

“Cuomo and de Blasio were pulling out all stops, making it clear that anyone who even considers endorsing Teachout or Wu will pay a big political price,” said a prominent Democratic activist.

“Cuomo especially is obsessed with Wu because he clearly thinks Wu has a chance to win, which would be a disaster for him,” the activist continued.

City Council members were told that pet projects would be endangered if they back either Teachout or Wu, said a source close to the council. “You wouldn’t believe how much we were intimidated and muscled,’’ said one.

I still do not think that Teachout has a chance (WU does), but it is nice to see Andrew Cuomo sweating.

I do hope that, if the report is accurate, (NY Post, after all) that de Blasio actually got something BIG for going to the mat for a governor who clearly loathes him and his agenda.

A Quick Announcement

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I really don’t give the proverbial flying f%$# in a rolling doughnut about any Apple product announcements.

Never been a fan of their products, and absent a major technological breakthrough, unlikely since Apple is about taking new technology to the mass market, not creating new technology, I will continue not to care.

What Dan Froomkin Says

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He asks the obvious question, why when we are looking at going back to war in Iraq, why have all of the discussions about this been about the politics, and not the merit, of the decision:

President Obama has started describing his new strategy to confront the Islamic State, and despite it being a mishmash of wishful thinking and perpetual militarism, the focus of the Washington elites in the press and elsewhere has been almost entirely on the optics: Is he overcoming the perception that he wasn’t doing enough? What will the political reaction be?

The question we should be asking, as I noted on Friday, is: Why the hell does he think it has any chance of working?

………

His plan calls for stepped-up airstrikes, inevitably leading to civilian casualties; for the kind of Middle-Eastern diplomatic needle-threading that has consistently eluded him in the past; for a political miracle in Iraq; and, despite all the precedent to the contrary, for American-trained indigenous military forces that actually fight.

Despite all the cause for skepticism, however, the press coverage of his remarks was largely stenographic — with the aforementioned overlay of politics and optics.

This is the discussions that we get when Obama is talking about involving us in a war that will last at least 3 years.

Seriously.

We’re going to war again, for an extended period, and all that anyone appears to be concerned about is the f%$#ing optics:

All that leaves me pondering this question: Is Obama’s new plan something he genuinely believes in? Or does he recognize it’s stupid, and is just doing it for the optics?

There’s a dismal precedent for the latter option: His decision to extend what he knew was a dead-end war in Afghanistan for two years because of the bellicose promises he’d made in order to look tough during his first political campaign. That time, he traded about 1,300 American lives for optics.

Who knows what the trade might be this time?

You know, Obama’s sated foreign policy philosophy, “Don’t do stupid sh%$,” appears to be in abeyance, and this is not a good thing.

Former Bushie Enmeshed in Money Laundering Probe

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I’m shocked, shocked to find that gambling is going on here!

Zalmay Khalilzad’s wife’s bank account has been frozen by Austrian authorities:

A U.S. probe into alleged money laundering by Zalmay Khalilzad has led Austrian authorities to freeze a Vienna bank account linked to the former presidential envoy to Afghanistan.

Khalilzad, who served as U.S. ambassador to Afghanistan and Iraq, allegedly transferred $1.4 million to his wife’s bank account in Vienna, Austrian magazine Profil reported today, citing court documents. The money came from oil and building contracts in Iraq and the United Arab Emirates that allegedly violated U.S. laws, U.S. investigators told their Austrian counterparts, according to the papers cited by Profil.

Austrian court spokeswoman Christina Salzborn confirmed the documents’ authenticity in a telephone interview. Christian Bielesz, the lawyer for Khalilzad’s wife, Cheryl Benard, confirmed that the account was frozen and an investigation under way.

The U.S. had asked Austrian authorities not to seize Benard’s account, Bielesz said in a phone interview. A decision on whether to unfreeze the account is expected “quite soon,” he said.

The documents alleging the misconduct were part of a cache of papers retrieved from a garbage bin earlier this year by a Vienna-based blogger. Austria’s courts have instructed workers to take better care of sensitive information, Salzborn said.

Of course, the response of the judge is to criticize the bank for allowing money laundering to be found by a pesky blogger.

Needless to say, Khalilzad is likely neither to face prosecution, nor to have the accounts seized, because, well, the you can be sure that there is someone on the other side of the aisle who wants to get rich the same way, and they need to lube that revolving door for their turn.

I’m beginning to think that we are living in the last days of the Roman Empire.