Still More Squiddery: The SEC's new Chief Enforcer.

When it comes to "Squiddery" , the activities of everyone's
favorite financial cephalopod Goldman Sachs, it seems the
story never ends.

Two weeks ago Wall Street was set on its ear when the
SEC announced the appointment of the new Chief
Operating Officer of its Enforcement Division,
Adam Storch.

Now comes word that Mr. Storch will be the
"Managing Executive" of the entire SEC enforcement
division, reporting directly to Enforcement Chief Robert
Khuzami and SEC Head Mary Shapiro.

Wow - I'm impressed. Is Mr. Storch a former prosecutor?
Or a hyper-powerful securities lawyer doing some public
service? Or a veteran banking or securities regulator at
the peak of his career?

Well, no. Mr. Storch is 29 years old, a graduate of SUNY
Buffalo, with a bachelor's degree in accounting and
finance, and some graduate work (but not a degree)
from NYU's Stern School of Business. And, he's a CPA.

And his most important qualifications? He's a former
Vice President at Goldman Sachs. Prior to that, he had
been an audit junior at Deloitte and Touche.

Hmm. Seems a decent and clean young man. Just
right for a line examiner or auditor. If he keeps his
nose clean, might even become an examination senior.

The kind of young kid that if I were SEC Chief, I'd
hire five hundred more of , specifically for a general
investigation of all Squid activities.

But Chief Operating Officer of Enforcement?
Managing Executive? You've got to be kidding.

First of all, that position should require a law degree.
With 10+ years experience in either the U.S. Attorney's
Office, IRS Enforcement Division, NY Attorney General's
Office, or similar regulatory, enforcement, or prosecutorial
experience.

But that's not going to happen. And once you understand
Mr. Storch's role, you'll understand why.

His job is to be a minder. Specifically, to mind Mr.
Khuzami and Ms. Shapiro on behalf of his boss,
Chief Squid Lloyd Blankfein.

His job is to alert Chief Squid of any intention these
worthies might have of making any move against
Squid Central on issues such as HFT, dark pools,
front-running, scalping, naked shorting, inside trading,
squeezing, or any other activity that most of us might
regard as market manipulation.

In addition, his job is to make sure that The Squid's
franchise is protected. Self-dealing market manipulation
is The Squid's exclusive franchise - both Timmy at Treasury
and Bennie at the Fed said so. That means any poachers -
Galleon for example - need to be prosecuted to the fullest
extent of the law. We can't have unauthorized competition.

After all, what's good for The Squid is good for the
country - capece?

And you don't want to get into an argument with
Washington about that. That could be a career-limiting move.
So let's get along, go along, and do what Daddy Squid tells us.

And who knows, there just might be spots for you guys
at 85 Broad when this is all over, if you do as I say.

More Squiddery: Goldman Sachs and The Mortgage Crash

When discussing the Great Casino that is Wall Street, we
all have to admire the ability of The Great Vampire Squid,
Goldman Sachs.

As we have covered here previously, the ability of this wily
financial cephalopod to outwit, outrun, and profit from every
twist and turn of the market is nothing short of amazing.

Was it because of their High-Speed Trading algorithms?
Partly. Being able to front-run your own clients legally
is a huge advantage in any market.

Or was it because of their extraordinary political influence?
Partly. Having all the right spots in all the right places
filled by your alumni or seconded employees sure helps.

In late 2008, when the markets collapsed and Squid competitors
Lehman Bros. and Merrill Lynch disappeared, it didn't hurt
to have the immediate past CEO of Goldman Sachs, Henry Paulson,
as Treasury Secretary.

If you're Chief Squid Lloyd Blankfein, you knew your
call to Treasury would always be returned. And Treasury
would be calling to ask you for your instructions and orders.

But there's always one more explanation.

How about good old-fashioned Fraud?

In a series of articles beginning today, McClatchy Newspapers
(The Sacramento Bee), details how from 2001 to 2007 ,
Goldman hawked $135 billion of of high-risk mortgage-backed
securities filed with loans from "subprime" lenders to
institutional investors, almost all backed with "AAA" ratings
from the ratings agencies.

But did Goldman believe its own propaganda? Don't bet on it.

In fact, it believed the exact opposite. Beginning in mid-2006,
Goldman had come to the conclusion that the subprime
mortgage boom had just about run its course.

Underwriting standards were non-existent. If you could walk
and chew gum at the same time, you could get a subprime
or even an "Alt-A" mortgage - one step above toxic waste.

And The Squid was starting to see what it hates most -
competition from other securities operators.

So, it then began to do what any smart operator would do.

It started to play the downside.

First, it quietly liquidated much of its remaining MBS
inventory, while continuing to hawk the product as a safe,
high-yielding investment to unsuspecting institutional
investors.

Then, it began to go short. But not too obviously.
That could wreck bid/ask spreads and tip people off.
So, working through "dark pools" and off-shore vehicles,
it began to short the broader MBS (Mortgage-Backed Securities)
market.

Next, it went short directly against its remaining inventory,
a move known as "collapsing the box", while insuring what
it couldn't otherwise eliminate with a collateralized debt swap
from AIG.

That meant no matter what happened in the MBS market,
The Squid came up a winner.

Finally, to cap it all off, it started buying "naked swaps" -
credit default insurance against MBS positions it didn't own.
That's like my buying fire insurance on your house
without your knowledge, hoping that "Marvin The
Torch" will soon strike.

In all, a perfectly executed "Pump and Dump" against
the MBS market, with all of the risk pushed off on
unsuspecting other parties and all of the gain
firmly wrapped up in the Squid's tentacles.

Oh, to be sure, there was an anxious moment - when AIG
went under, it appeared that some of the Squid's bets
might not pay off. But, thanks to the link with Treasury,
AIG paid off those bets at 100 cents on the dollar - some
$13 billion worth.

But here's the key - as much as half of that amount
was on "naked swaps" - bets on positions it didn't own.
That's like Wynn's paying off on my side bets against
the other players on the craps table.

Now to be sure, there are some repercussions.
The State of Mississippi lost 5/6ths of its six million
dollar investment in "AAA rated" Goldman Sachs
MBS bonds. They are suing. So is CALPERS -
The California Public Employee Retirement System -
which lost $50 million of a $64 million investment.
And the Squid settled with the state of Massachusetts
on a similar deal, to avoid criminal prosecution under
state law.

Meanwhile, both California and Mississippi are seeking
class-action certification for their suits - and the attorneys
general of two dozen other states are watching things very closely.

But, if you're The Squid, all this is just par for the course -
after all, you have all the right friends in all the right places.
Nothing could go wrong.

Or could it? Now that Main Street's media is on the case,
as well as hundreds of anti-Squid bloggers, hey,Squid,
know what? All bets are off.

If I were you, I'd be watching very closely.

With my bags packed and passport at the ready.

Harry Reid: On the Ropes?

It's shaping up to be an interesting political season in Nevada.

In a bylined story in the Las Vegas Sun, Sun Washington
Bureau correspondent Lisa Mascaro believes that the
conventional wisdom on Senate Majority Leader Harry Reid's
election campaign may not hold up.

The "conventional wisdom" on Reid's chances runs something
like this:

- Reid will have enough of a war chest to almost guarantee
a victory;

- A cluttered Republican field of unknowns will beat each
other up in the June primary, leaving an exhausted novice
candidate facing a prepared and rested Reid in the general
election;

- National Republican operatives' hopes of making this
a replay of the John Thune-Tom Daschle battle in 2004
(which cost Daschle his seat and the Majority leadership),
may not pan out this time;

- Recent demographic changes in Nevada have changed the
state from majority-Republican to majority Democratic,
with a 100,00+ Democratic edge. In 2008, the state went to
Obama by 13 percentage points, and Democratic State Senator
Dina Titus beat three-term Republican incumbent Jon Porter
in a conservative suburban Las Vegas district.

And there's a lot of logic behind this.

First of all, when it comes to fund raising, Harry Reid is
no slouch. The $8.7 million he raised in just the last quarter
would be the largest sum ever spent by a Senate candidate in
the state's history. And he intends to have $25 million on hand
by the general election. And, as predicted, the declared
Republican candidates are for the most part relative
unknowns.

But to this observer, that's where the conventional
wisdom ends.

According to both the Sun and Jennifer Duffy of the
Cook Political Report, Reid is in for a tougher fight than
almost anyone imagines. His poll numbers are lower at this
point than in any of his previous contests. And the national
mood is starting to trend away from Democrats, as voters
perceive the Democratic Congress and White House as unable to
deliver on health care reform or economic recovery.

And there's more yet.

According to Duffy, Reid's war chest may not be the advantage it's
cracked up to be. To overcome his low polling numbers, Reid is
starting his commercial effort a full thirteen months early -
to "reintroduce himself" to Nevada voters. And an
incumbent who has to "reintroduce himself" to his constituents
isn't running from a position of strength - even though Reid
vows to "vaporize" anyRepublican in the general election.
Duffy estimates that a Republican with a $6-8 million war
chest may be competitive in Nevada's relatively inexpensive
media markets.

The other Reid "problem" is that The Nevada Republican Party
shows signs of coalescing around one of two relatively
attractive candidates - either Nevada Republican Party Chair
Sue Lowden (a former State Senate Majority Leader), or
Las Vegas businessman Danny Tarkanian, son of
well-known former UNLV basketball coach Jerry
Tarkanian.

In early polling, Reid trails Lowden by ten points and
Tarkanian by six among likely voters.

These are not numbers a nationally prominent
incumbent wants to hear.

And if these numbers hold up, A Nevada replay of the
Thune-Daschle battle might become more likely. John
Thune was a former Congressman who had narrowly lost
a Senate bid two years previously, and who won against
a nationally prominent incumbent widely perceived as
being "out of touch" with the home folks. And to many
Nevadans, "out of touch" accurately describes Harry
Reid.

Nevada has severe problems - an unemployment rate
second only to Michigan's, a huge home foreclosure
problem, and an undiversified economy excessively
dependent on the troubled gaming and residential
construction industries. And Harry Reid, rightly or wrongly,
is perceived as having done almost nothing about any of this.
Even his one noticeable accomplishment, the blocking of
the Yucca Mountain nuclear waste dump, is being re-considered
by voters in a state desperate for stable, high-wage, high-skill
employment.

But the biggest problem Reid has, in my opinion, is the steady
erosion of liberal and progressive support. On health care,
Reid has never been enthusiastic about the Public Option.
He has been very quiet about banking, financial, or foreclosure
reform. In a unionized state, he has been opposed to card check.
And with tens of thousands of unemployed Nevadans scheduled
to exhaust their unemployment benefits by the end of the year,
he has been unable to get a benefit extension through the Senate
with a 60-vote majority.

Small wonder that many progressives feel that their best bet
might be to sit this one out and take their chances against
scandal-scarred John Ensign, Reid's Republican Senate
colleague, in 2012.

And large-scale liberal and progressive defection would
make Reid's task enormously difficult and the Republicans'
much easier. Nevada liberals and Democrats are largely
clustered in Las Vegas, among minorities and unionized
government and construction workers and casino employees.
The rest of the state is white, rural, and very conservative.
A plausible Republican strategy therefore might be to battle
Reid to a draw in Clark County (Las Vegas), and win the rest
of the state, which normally votes lopsidedly Republican.

If that happens, the former boxer gets off the ropes - and goes
down for the count.

And for progressives, that may not be entirely a bad thing. Good
as Harry Reid was in partisan opposition to former President
George W. Bush, he has been singularly ineffective in advancing
Obama's agenda with a filibuster-proof majority. And even if Reid
loses, the Democrats are not forecast to lose their majority.
And a more vigorously partisan Majority Leader might even
succeed in installing some badly-needed partisan backbone
where it's most needed - in the White House.

It will make for an interesting election year.

Should We Legalize Insider Trading?

The recent tumult with the Galleon Group has gotten
everyone's attention on "insider trading". That's trading in
the markets on "material, non-public, inside information"
(information not available to the ordinary investor) to
obtain excess profits.

However, not everyone agrees that "insider trading" is
necessarily a bad thing. In an article in the Wall Street Journal,
Donald J. Boudreaux, an economics professor at
George Mason University, makes a compelling case that
prohibitions on insider trading actually prevent the timely
flow of information to markets.

How? Let's use a couple of examples. Let's say I am the CEO
and principal of Fans Of The Vampire Squid LLC, a hedge fund.
In the course of working my connections on the Street, I hear
from someone "in the know" that ABC Corporation is about to
post substantially greater earnings for the third quarter than
expected. According to my research, ABC has become a dog
and I'm not only thinking about selling my small position
but shorting the stock as well. But because of the inside tip,
I hold my position but don't add to it lest I be accused of
trading on "material, non-public inside information".
And, I avoid the sure loss that would have occurred had I
shorted the stock.

In other words, thanks to inside information, I make a
small profit and avoid a big loss by doing nothing.
And can I be prosecuted for this? Absolutely Not.

But, there's been a cost. For fear of prosecution,I've
been denied the opportunity to get in at the beginning
on a quick kill - which is what my clients pay me to do.
And by my making my "quick kill", relevant information
actually gets to the market sooner than it otherwise
would - which, in a perfect world, should be the object
of reasonable securities regulation.

But we don't live in a perfect world. And in the markets
players that are large, well capitalized, and able to
procure private information and act on it more quickly than
others have an advantage . And big players - Goldman Sachs
for example - have spent millions of dollars to both facilitate
the discovery of "material non-public inside information"
and act on it more quickly than anyone else.

Maybe this is how "The Squid" can make fully 80%
of its third quarter revenue on proprietary trading
and have over 90% of its trades be profitable (GS actual
3Q numbers - hat tip to Zero Hedge).

But does all this mean that the average trader or investor
shouldn't participate? Not necessarily. The Squid (and
all the other big boys) can make millions from tiny moves
in stocks, options, or fixed-income instruments or
their derivatives. They receive "material non-public
information" about thousands of different issues
every day. That's what a Research Department is for.
And in many cases, the "inside information" only moves
a particular issue a few pennies. Doesn't matter - when
you are trading tens of millions of shares at at time,
that's still millions of dollars in profit at the end of the
day.

Just understand that if you're the average trader
or investor,you can't duplicate this even if you have
the same information - on your micro scale of operation,
your transaction costs are likely greater than your profit.

But the biggest issue I have with "illegal trading on
insider information"? It's that for some reason, the
SEC and the Justice Department never go after
the Big Boys - it's always some small-time accountant,
broker, or small-time operator like Galleon who gets
pinched. That's not right. The rules should be the same
for the big guy as well as the small. And when the
regulators start using enforcement "discretion"
to ignore "insider trading" when it facilitates
"market making" or "providing liquidity to the
market", then the whole premise of regulation is
lost, along with the legitimacy of the regulators.

But are we likely to "de-regulate" the market
for corporate information? In today's political
climate, not likely. And will the "regulated"
still be able to control the market for "material,
non-public, inside information" for their own
advantage? Absolutely.

Even if we were to snap our fingers and declare
"insider trading" legal, nothing would change.

Remember, Wall Street is a Casino. And Goldman
Sachs, JP Morgan, Morgan Stanley and the others
are to The Street what MGM Grand, Harrah's ,
and Wynn's are to Las Vegas - they are THE HOUSE.

And the House always wins. So gamble -
I mean trade or invest - accordingly.

The Strange Case of The Galleon Group

Last Friday, something happened on Wall Street you don't often see anymore.

A Hedge Fund operator actually got busted!

Yes, the Feds finally caught someone doing something wrong.
Raj Rajaratnam,the Principal and CEO of The Galleon Group,
a minor league hedge fund ($3.7 billion under management),
did the "perp walk", accused of insider trading.

He is alleged to have bought shares of Hilton Hotels Corp
(HLT), prior to its acquisition by The Blackstone Group
in a leveraged buyout in 2007, on an "insider" tip from
Moody's, the investment rating agency, making a
$ 4 million profit in two days.

Moody's was working with Blackstone in performing
due diligence on the buyout, which involved potential
rating changes on Hilton's outstanding debt. As such,
Moody's owed a fiduciary duty to Blackstone and Hilton
to keep its work secret.

But in reality, such things are never kept secret for very long.
And this one was leaked out to Galleon for a mere $10,000 - chump
change by today's standards.

But there's more to this story than meets the eye. The Squid
(Goldman Sachs), J.P. Morgan, Citigroup, UBS, and all of the
other operators of The Great Wall Street Casino all earn their
profits by taking advantage of "material, non-public inside
information". The Squid, for example, has spent tens of millions
of dollars on advanced computerized research and trading
systems designed to safely ferret out just this sort of information
electronically.

So why, all of a sudden, is the SEC coming down so hard on a
minor player? After all, $3.7 billion is the typical "book" size
that a mid-level trader on The Squid's "prop desk" would be
running. Why Galleon? For several reasons.

First of all, Rajaratnam and his colleagues were outsiders.
They are all, with few exceptions, Sri Lankan citizens
and ethnic Tamils. Much of their capital is alleged to have come
from the worldwide Tamil diaspora - both Indian and Sri Lankan.
And early in 2000, Galleon Group came under State Department
suspicion of being a funding source for the Eelam Tigers -
the rebel group engaged in a protracted and bloody conflict
with the Sri Lankan government. That put them on the
SEC "watch list" - a list that folks like Bernie Madoff
were somehow never able to make.

Second, the way that they went about "obtaining" their inside
information was just bush league . Cell phones, secret
meetings, and envelopes stuffed with cash are outdated
now.

That's so 1980's - Michael Milken and Ivan Boesky
and the like.

Instead, if you are going to trade on non-public
inside information today, you do things the way
The Squid does things.

First of all, you use your trading systems to scour
the debt and equity markets for companies that
might be going into "play". There are almost
always telltale electronic signs of this that you
can spot - but only if you've first made the multi-million
dollar investment in computerized research and analysis.

Lesser players like Galleon have to do it the
old-fashioned way- tips and bribes.

Second, your Research Department correlates
the raw trading information with the "rumors"
flowing in to the department every day. Since
all of this is computerized, you can generate
"actionable intelligence" in a matter of seconds.

Then - you execute. But not the way Galleon did it.
You never make a move in the public markets that
after the fact might prove to have been market-moving
in the light of subsequent events, which you might be
accused of having private knowledge of beforehand.

Instead, you split your order. You buy or sell in the public
markets only so much as to make the move look routine ;
an everyday client order. The rest goes "off books" - through
a "dark pool" on a private exchange, which won't show up on
the tape until way later. That way, there's no incriminating
paper trail.

Second, you don't leave money on the table if there's more to
be made. You make a corresponding move in the debt
markets, going long if you think the deal might reduce
the target company's leverage, or short if you think it
will increase, remembering always to hedge the other way
with the appropriate CDS's. Or, you just might keep it simple
and buy the corresponding CDS itself. Since that market is
completely private, so much the better.

And if you're The Squid, you can do this all electronically -
no muss, no fuss, and no incriminating humans anywhere
in the equation. And most likely, Galleon would have had
access to none of these wondrous money-making tools.

Finally, there's the political environment. The natives are
finally getting restless. The Regulatory Gods are getting
angry - and they are demanding that a propitiating
sacrifice be made. So, let's go looking for a scapegoat.

And a small hedge fund, manned by outsiders, who might
have in the past been linked to terrorists, is the perfect
candidate. And there's another lesson here. If you're
a little guy, especially if you're an unsavory little guy, it's
too dangerous to go it alone. You need protection.The
kind of protection that only The Squid offers its loyal
clients.

So, the next time you come across a juicy tidbit like
Hilton, go see the Godfather - the Lord of The Squid.
He'll put your deal together for you - nice and safe -
and your $4 million profit (or likely much more than that)
will be in your Squid account that very day.

And the "vig"? Minimal. More likely, Father Squid will
reward you for your loyalty by cutting you in on the
next juicy deal he uncovers. All you have to do is
be loyal and be ready to do him some future small
favor or service.

Because if The Squid helped you make $4 million,
he likely made $20 or $30 million on the same information.

And The Squid (and JP Morgan, and UBS, and Morgan Stanley)
do what Galleon got busted for every day.

To them, trading on inside information is routine,
everyday business.

It's not what you do, it's how you do it that counts.

4th and Wrong: Rush Limbaugh and The Rams

Dittoheads everywhere have been thrown for a loss.

Backpedaling under unrelenting pressure, Dave Checketts,
the St. Louis Blues owner putting together a syndicate to buy
the troubled Rams franchise, finally punted - booting
Rush Limbaugh from the team's prospective ownership group.

Leading the charge up front was Roger Goodell, the
NFL Commissioner, who said he was "troubled" that
Checkett's syndicate included such a "divisive figure".
DeMaurice Smith, the head of the NFL Player's
Association, said that including Limbaugh in the
ownership group was a "slap in the face" to a union that is
70% African-American.

Smith went even further to say that players should
boycott St. Louis and refuse to play the Rams if Limbaugh
was permitted to remain in the ownership group.
And "piling on" were those two great pass rushers
and NFL supporters, The Revs. Jesse Jackson and
Al Sharpton, promising all sorts of problems for the NFL
if Limbaugh were to remain.

The end result for the Rams? Fourth and Wrong.

To be sure, Limbaugh has made comments over the years that
haven't helped his relationship with the NFL. He was booted
from a guest commentator's spot on ESPN after suggesting
that the Philadelphia Eagles were giving quarterback Donovan
McNabb the kid-glove treatment because they "needed a black
quarterback to look good". Hell, I can remember that at that time
the Eagles were desperate to make any quarterback "look good".

Rush's comments that a typical NFL game resembled a
gang fightbetween the Bloods and Crips without weapons
didn't help either. That one prompted Jim Irsay, the owner
of the Indianapolis Colts, to say that he could never vote for
an ownership syndicate that included Rush. And going back
over the years, Rush's many comments about blacks and
black culture have generally delighted conservatives
and infuriated liberals and progressives.

But is this sufficient reason to deny Rush the
opportunity to become an NFL owner? No.
For several reasons.

First of all, if we start denying people On Political
Grounds the opportunities to which they might
be entitled, we're setting a dangerous precedent.

That's Freedom for Me - but Not for Thee.

Even Keith Olbermann - a liberal famous for his
ad hominem attacks who also comments on NBC's
NFL broadcasts, took this line of reasoning, saying that
blackballing Rush from the NFL threatens
everyone's free speech rights. And Olbermann is right.
There are very few people in public life who haven't
said something at some time that gave offense to
someone else. Should we ban all public figures from
professional sports ownership because (horrors)
back in the day, they might have said something offensive?
I don't think so.

And I don't care if Rush Limbaugh is the second coming
of George Wallace or Theodore Bilbo on race relations.
If his money entitles him to own a part of a professional
sports team, he should be allowed to do so. Case closed.

Second, it's not as if the NFL couldn't use a little more
controversy. From the fans' perspective, one of the
great parts of the NFL experience is watching or listening
to a bonehead NFL owner saying something mean, stupid,
downright nasty or just plain wrong. That's enough to provide
sports-talk radio hosts such as Jim Rome an unending source
of great material. I love it when Romey picks apart Al Davis
or Jerry Jones for saying something stupid or
inappropriate. Think of what he could do with Rush.

Too much "corporate bland" and too little controversy
is Bad For Ratings, folks. Like it or not, controversy and
conflict attract listeners and viewers.

And Having Rush as an owner could be the best thing that
ever happened to the St. Louis Sheep - errr, I mean Rams.

Right now, the Sheep are on track to match the Detroit
Pussycats - I mean the Lions - in gridiron futility with
fifteen losses in a row. Season ticket holders are deserting
like French soldiers - and the Sheep play at home to less
than full capacity.

But Rush has the ability to change all that with a single stroke.
"Dittoheads" from all over the Midwest would buy season
tickets by the thousands. Players and coaches would be under
merciless pressure to perform, lest they be pilloried the next day
on the air. And a "boycott" ? Don't kid yourself. NFL players
and coaches are Millionaire Mercenaries. They go where the
MONEY is. And if anything, Rush is Money - one of the deepest
individual pockets in radio broadcasting today.

And the NFL's "corporate image" ? If I were Roger Goodell, I
would be afraid of Rush. If I were to fine or otherwise discipline
him for something he might say on the air, the last thing I want
is millions of "Dittoheads" tying up my switchboard, burying
me with e-mails, and burning up the talk-show lines.

That's a battle I'm never going to win. And that's why I don't want
him.

But the greatest irony of all is that Rush is being denied the
opportunity to participate in one of the most successful
Socialist enterprises of all time.

As the Boston Globe points out, all TV revenue is shared equally
by all teams. So are a large portion of the gate receipts. The
total salary bill for each team is capped, with maximums and
minimums for each position. The draft each year is skewed
so that the teams with the poorest records get the first pick
of new talent. And the schedules are fixed so that teams with
the worst records get the easiest schedules the following year.

The NFL is all about "taking from the strong, for the benefit of
the weak". Karl Marx would have loved it.

And I really would like to know how Rush feels about that.

"Great Expectations" - The Nobel Peace Prize and Barack Obama

Yesterday, Oslo surprised and amazed the world.

In one of the most stunning developments of the year, the
Norwegian Nobel Peace Prize Committee decided to award
the 2009 Nobel Peace Prize to President Barack Obama.

Both liberal and conservative reaction was mixed.
While liberals generally applauded the selection, they
were also puzzled in that many of the President's
Nobel-worthy initiatives - most notably, on peace and
climate change - have yet to bear any fruit.

Conservatives, on the other hand, had no such problem.
Rush Limbaugh and Glenn Beck immediately seized on
the award as Proof Positive of President Obama's lack of
American-ness.

To conservatives, Obama's not one of us - a red-blooded
American. He's one of them - a soft, idealistic,
European Socialist.

But to this writer, there is nothing truly unusual about
the award. In fact, there are many reasons for it.

First, and most importantly, Obama is the Un-Bush.
To the Europeans, George W. Bush represented everything they
most detested about America; provincial, small-minded, ignorant
of the larger world, who compensated for his ignorance with an
"armed and dangerous" arrogance towards both his friends and
his perceived enemies.

But Obama - now, there at last, is an American President
who gets it. One of us. A man comfortable with policy
details. A man who prefers the solutions of technocrats
to the imperfect messiness of mere politicians.

And more importantly, he understands the grand
gesture - the great speech. Without great words of
inspiration and imagination, even the most necessary
and pragmatic actions fall short.

In other words, from the European standpoint, The
Perfect Nobel Laureate.

So what if he hasn't yet achieved anything? Look at Al
Gore - the 2007 Nobel Laureate. He made lots of grand
speeches about Climate Change - even wrote a book about it.
It doesn't matter that his policy prescriptions haven't been
implemented anywhere yet - he said all the right things
to all the right people. Style -that's what matters . Substance?
that's better put off for another day. We don't want to think
about that. Not right now.

And this tendency to reward good intentions rather than
good results actually suits Obama rather well. In the actual
arena of getting things done, he has shown a distressing
tendency to both temporize and compromise rather than
engage in tooth-and-claw combat for his programs and
beliefs. But now, thanks to the Nobel Prize award, he'll have
to change that.

He'll actually have to produce.

And if he achieves just a fraction of what he has set out to do -
achieve global agreement on climate change, settle the Israeli-
Palestinian dispute, and start on ridding the world of nuclear
weapons - he'll be worthy of the award.

And if he were to make a more lasting contribution - to
enact universal health care here at home and bring to
heel once and for all the global financial elites who
threaten the well-being and prosperity of all peoples, then
he'll truly deserve this award - and every other a grateful
world can bring him.

Truly, "Great Expectations".