President Obama has proposed a $266 billion jobs bill that contains tax credits for small businesses that hire more workers, an increase in the federal highway fund to patch our crumbling infrastructure, and a short-term extension on the federal unemployment benefits. It’s a boost to the economy, but it’s not nearly enough to put 15 million Americans back to work.

Last year Congress approved $787 billion stimulus package, mostly in tax cuts and aid for “shovel-ready” projects at the state and local level. For most of us $787 billion sounds like an awful lot of money, but when you look closely, it was far less than it appeared.

Much of the stimulus was spent to “patch” the alternative minimum tax ($70 billion), which Congress routinely spends every year with or without a recession. Another $100 billion was appropriated for infrastructure projects that will take a decade to complete.  More significantly, while the federal government was trying to expand the economy, state and local governments were forced to cut spending and raise taxes, fees, and tuition for public universities. In fiscal 2010, 48 state governments had budget deficits totaling $162 billion, and when you toss in the debt of municipalities, the total debt is well above $200 billion. According to the nonpartisan Congressional Budget Office when you net out the effect of state and local governments cutting programs and raising taxes, the real federal stimulus averaged only about $126 billion annually for 2009 and 2010. That’s less than 1% of our GDP.

What that means is that while the feds were trying to hire more road crews and contractors, states and municipalities were laying off cops and teachers. The feds were rowing in the direction of expanding the economy, while the states were rowing towards constricting the economy. Small wonder that 15 million Americans are still out of work, 25% of homes are worth less than the outstanding mortgage, and the number of bankruptcies, foreclosures, and failed banks are near record levels.

The President’s modest jobs bill is not going to work unless the federal government does something to relieve the burden on state and local government.

One way to give the economy a strong jolt would be for the federal government to open a line of credit to every state and locality. If the feds extended credit to state and local governments up to $1000 per resident at super-low interest for 30 years, why would any state or local politician refuse? We could strengthen our first-responders, improve our schools, lower tuition costs, and keep state and local taxes from rising. That would put more Americans to work, increase tax revenues, and eventually help to pay down the deficit.

I know what you’re thinking. The Republicans will accuse the Democrats of being tax-and-spend liberals. But if they do, the Republicans will be shouted down by the chorus of local and state government officials who do not want to be forced to make choices between raising taxes or cutting essential services.

We need jobs. But the President’s job bill will not succeed unless we have the federal, state and local governments all rowing in the same direction at once.

The election of the forty-first Republican and the first nudie model to the U.S. Senate has the pundits chattering. Scott Brown’s victory in the Massachusetts senate race is being read as a dark omen of what the Democrats will face in the mid-term election. Does Scott Brown’s election really signal the emergence of the Tea Party as a powerful new reactionary force on the American political scene? Does his election foretell the end of the Democratic majority? Is it a turning point in American politics?  

We can’t know for sure, but history is never so predetermined. It’s more than likely that the pundits are wrong. After all these are the same pundits who predicted last year that the Democratic majority would rule for a generation – before they predicted that Obama was unelectable and Hillary Clinton had the Democratic nomination sewn up.

Here’s another interpretation: Scott Brown defeated an indifferent Democratic politician who didn’t even bother to campaign. The handful of voters who showed up at a special election in the middle of winter were motivated by frustration and anger – not necessarily directed at President Obama – but at the local Democratic machine politicians who took them for granted and run Massachusetts like a one-party state.

The media’s penchant for reading too much into Scott Brown’s election is a common phenomenon. Looking backward we often attribute significance to events that might be merely random localized occurrences. On the other hand, sometimes random occurrences can alter the course of history. We learn in school that history is determined by great leaders, big ideas, or broad social movements. But sometimes, history is determined by accident.

The success of the American Revolution, for example, has been attributed to a wide-range of causes: the brilliant leadership of our founding fathers, the ideology of civic republicanism, and the social mobility of American colonists. But a more likely explanation is the particular timing of France’s intervention on the side of the colonies.

Why did Louis XVI agree to aid the American revolutionaries when they appeared to be losing? The conventional explanation is that Benjamin Franklin charmed the French monarchy into providing all of the arms, ammunition and supplies for the Continental Army. But, in reality, Franklin had nothing to do with it.

In January 1776, long before Franklin arrived in France, he sent an unknown Connecticut shopkeeper, Silas Deane, on a secret mission to persuade Louis XVI to arm the Americans. Deane had never left Connecticut in his life, could not speak a word of French, and knew nothing about diplomacy. But Franklin thought that Deane was such an improbable emissary that the British spies would never suspect him.

Deane succeeded with the help of two Frenchmen: the comic playwright Caron de Beaumarchais and the French ambassador to London Chevalier d’Eon. This improbable trio are the subject of my new book, UNLIKELY ALLIES: How a Merchant, a Playwright, and a Spy Saved the American Revolution.

Beaumarchais was one of the most interesting men of the nineteenth century. Though he is best remembered as the author of the original plays, “The Barber of Seville” and “The Marriage of Figaro,” he also invented the wristwatch, designed the modern harp, performed and taught music, built the Paris water system with the Perrier brothers, spied for the French King, and traded arms on the side. Deane and Beaumarchais together smuggled all of the arms, ammunition, uniforms, tents, blankets, and boots for an army of 30,000 men passed a swarm of British spies and through a British blockade to the Continental Army. The arms were sent before Franklin even set foot in France, and they arrived just in time to sway the outcome of the Battle of Saratoga, the turning point of the American Revolution.

None of this would have been possible without the leavening influence of the flamboyant Chevalier d’Eon. D’Eon was a decorated French war hero, an accomplished diplomat, and a brilliant spy, who was also blackmailing the French king. Louis XVI sent Beaumarchais on a secret mission to London to persuade d’Eon to surrender the incriminating documents. The dashing playwright ended up seducing d’Eon, who  admitted to Beaumarchais that he was in fact – a woman.

D’Eon’s decision to come out as a woman after forty years disguised as a male soldier, diplomat and spy set in motion a series of events that provided the catalyst that convinced Louis XVI to arm the Americans against the British. How and why that happened is the story of UNLIKELY ALLIES.

The point of my book is that history isn’t just hammered out by great leaders or great ideas or great social movements; the arc of history is just as often bent by random events, peripheral characters, and strange coincidents. History, like weather, is subject to the famous “butterfly effect.”

Scott Brown’s election is another chance occurrence. Perhaps he will change the trajectory of political history. But I doubt it. Right now, the forty-first Republican has nothing coherent to offer except his rigid opposition to health reform. Between now and the next election there will be many more butterflies that none of us can anticipate. We should be cautious about reading too much into a special election.

I’m not saying that Brown’s election is completely irrelevant. Maybe someday Brown will look no less significant in American history than that cross-dressing French spy who revealed herself. But for now all we can say for sure about Brown is that the senator has no clothes.

Cross-posted at http://www.acslaw.org/node/15336

This week the Obama Administration, after a year of perseverating, finally came forward with a modest proposal to tax big financial institutions, and Republican leaders reacted as if the President were proposing to nationalize the banks.

What President Obama has proposed is a relatively modest tax on the assets of the largest banks in the country. It’s not much different in form than the tax you pay on your property. The President argues that the tax would ensure that the banks pay back the government for the financial rescue package. But the more important reason for taxing bank assets is that big banks have behaved recklessly with the confidence that they were too big for the government to allow them to fail. The Bush Administration handed out cash to rescue the banks with the same lack of accounting that they handed out cash in Iraq and Afghanistan. No one insisted that taxpayers were entitled to any share in the bank’s profits after the crisis passed.

In a system in which companies are regarded as too big to fail the rules are stacked for the big banks: heads the bank win; tails the taxpayer loses.

Without a tax on bank assets we have subsidized record bank profits, and now Wall Street is handing out billions in bonuses to reward their executives for surviving the financial crisis they created. It’s not just the taxpayers who are being ripped off. Even the banks’ own shareholders have been short changed.

But the big banks weren’t the big story this week. The big story was the Supreme Court’s decision to reverse a century of established law and strike down limits on corporation spending in political campaigns. The case before the Supreme Court involved the narrow question whether a television film financed by a corporation that disparaged Hillary Clinton on the eve of a presidential primary should be regarded as a political expenditure subject to limitations on corporate spending. Even Justice Scalia had to admit that of course the film was a political attack ad.

But the Court didn’t stop by ruling on the nature of the ad. Instead of just deciding the case, the five activist conservative justices reached out to strike down any limits on corporate expenditures. They reasoned that corporations have the same free speech rights as anyone else.

The difficulty with corporate speech is that corporations can outspend anyone else by a huge magnitude and thereby intimidate officeholders from supporting legislation against the interests of big business. Imagine now the difficulty the President will have getting any legislation through Congress taxing big banks or regulating health insurers. Any representative who votes against big business will face a tidal wave of attack ads.

Competitive free enterprise is a great thing, but corporations are what lawyers call a “legal fiction.” Corporations are created under state law for the purpose of allowing shareholders to aggregate their investments and create greater wealth for themselves and the nation. Corporations are not political parties.

I don’t want my pension funds invested in a company that supports political candidates. I want my money invested productively, and when my company earns big profits, I don’t want to share my profits with either corporate executives who reward themselves with bonuses or politicians.

What can be done now after the Supreme Court’s decision? Congress can use its power to regulate commerce to require that companies must disclose to their shareholders all of their political expenditures in advance and obtain their shareholders’ approval before spending company assets on political causes. But who will be willing to stand up in Congress and propose such legislation against the implied threat of millions of dollars of attack ads financed by big business?

Contrary to what you’re hearing from the noise media, Copenhagen was not a complete bust. The agreement to reduce deforestation was an important step forward that could become as significant as any cap-and-trade system in reducing net carbon emissions. And the pledge by industrialized countries to commit billions to assist developing countries in reducing their emissions and adapting to global warming is vital to millions of the worlds’ people.

Granted Copenhagen is only a first step that must be followed up with a binding treaty to limit carbon emissions. At the moment that appears difficult to achieve because of the absence of consensus among 182 participating countries. But the real news is that there is a startling degree of consensus among the industrialized countries and some of the rapidly developing countries that something must be done fast.

The way to proceed now is for President Obama to convene a summit of nine major industrialized countries, including the European Union, Japan, China, Russia, Canada, Australia, South Korea, and India. Such a summit could hammer out an agreement that would at least bind the participants. The real problem isn’t getting 100% compliance. These nine countries alone represent more than 75% of the world’s carbon emissions, which comes to more than 20 billion tons of carbon dioxide annually. Unanimity would be nice, but as health care reform proved, it’s more important to have the votes you need than all the votes you want.

One way to achieve a global reduction in carbon emissions would be for all countries to impose a tax on carbon emissions for all domestic goods and imports. Carbon taxes are both easier to set and easier to administer then a cap-and-trade system. After the recent financial crisis we’ve all learned how easily a market can be manipulated by money managers, and how difficult it is for governments to police a trading system.

If all of the industrialized countries imposed a carbon tax of just $6 per ton on carbon emitted, that would generate roughly $100 billion in tax revenues per year based on projections by the Nobel Prize winning economist Paul Krugman. That is more than these countries are now planning to spend on increasing energy efficiency and aiding developing countries to preserve forests and reduce their carbon emissions.

But what if we could not achieve a consensus among this group of nine? Then we should impose a carbon tax on imports from any country that fails to agree to an internationally mandated reduction in carbon emissions. If India wants to produce steel cheaply without regard for the global consequences then make India pay for it. The revenues could be plowed back into technology at home and abroad to reduce carbon emissions.

Would a carbon tax unfairly burden developing countries? Not if we treat all countries the same as we treat out own industry. It would create an incentive for all countries to raise the regulatory floor and participate in a global effort to reduce climate change. The consequences of not acting will hurt developing countries far more than it hurts us.

And if we just imposed a carbon tax on imports from countries that refused to comply with an internationally mandated limit on carbon emissions would that violate our international trade commitments under the GATT? Not necessarily. It would depend on  how it is levied. GATT explicitly allows importing countries to discriminate against imports that threaten exhaustible natural resources. Global warming is threatening our planet, which is itself an exhaustible natural resource,

If other governments are unwilling to sign onto an international pact to save earth, then we should neutralize their carbon footprint by imposing a carbon tax.

President Obama’s decision to escalate our military presence in Afghanistan with the introduction of 30,000 troops is doubling down on a bad bet.

President Bush made the decision to commit U.S. ground troops in Afghanistan on the questionable theory that if you could deny the Taliban and al Qaeda a place from which to operate, you could put them out of business forever.

Of course, we know now that theory was flawed. The word is awash in failed states that provide fertile climates for evildoers. By displacing the Taliban from Afghanistan we pushed them into the northwest frontier of Pakistan where they have threatened the security of a nuclear state. As we have pursued the bad guys into Pakistan we have alienated many Pakistanis who are offended by our incursion into their territory, and who regard the “collateral damage” of our air attacks as indistinguishable from terrorist assaults on their own people.

Admittedly, President Obama does not have any good choices in Afghanistan. Our continued involvement risks destabilizing both Afghanistan and Pakistan, but can we risk doing nothing in Afghanistan?

After eight years we have proved that you cannot “drain the swamp,” to use Bush’s colorful phrase. Instead, we have found ourselves without any strong allies in either Afghanistan or Pakistan.  Early on in the war we naturally embraced President Karzai as an intelligent, seemingly incorruptible, western-oriented reformer with a flair for fashion. We were either wrong about his character, or he has just proved too weak to resist the threats from warlords and the greed of his drug-dealing brother. Eight years on we find ourselves putting American soldiers at risk at an enormous cost to defend a shaky government that clings to power by stuffing ballot boxes and exporting opium.

Regardless of the threat posed by our enemies or the courageous sacrifice of our soldiers, the war in Afghanistan is not winnable. Continuing to fight in Afghanistan merely because we are there, and we cannot admit our mistakes or find a graceful exit is madness.

We did not choose the war in Afghanistan. We fought to defend ourselves, and we successfully drove al Qaeda and the Taliban from their sanctuaries. But now the real problem is that we do not have a government worth defending in Afghanistan.  American lives and treasure are too precious to squander them to preserve a government that is corrupt, weak, and antidemocratic.

True, the Taliban are ruthless thugs. Yes, we can all agree that the Taliban would be even worse than Karzai’s corrupt regime. The Taliban oppress women and brutally impose religious fanaticism. But is it really up to America to rid the world of all bad guys, and if so where do we start?

Of course, the threat of terrorism still exists. You can argue that the reason we have to increase our commitment to Afghanistan is that if America walks away we will embolden the terrorists. But our fight in Afghanistan and Iraq has not deterred the terrorists, and our continued presence there has polarized the country, encouraged the recruitment of more extremists, and destabilized Pakistan.

I’m not suggesting that we should simply withdraw tomorrow and allow the Taliban to march into Kabul. I am suggesting that rather than escalating the war, we could accelerate the process of turning over the war to Afghans with logistical support, training, and arms provided by the United States. For a decade the Afghans themselves fought the Taliban without much U.S. support. Presumably, if Afghans do not want a Taliban regime, they will fight if they have to. Ultimately, perhaps the Afghans can find a way to reconciliation among themselves that would still deny al Qaeda a safe haven.

I know that I may be excoriated as a defeatist or as unpatriotic. But I care more about our soldiers than I care about some vague sense that America has to prove its manhood once again. We do not honor the men and women who have fought so valiantly in Afghanistan by escalating a war with no likelihood of success; we do not deny the courage of our soldiers by returning them safely to our shores.

The normally circumspect David Brooks of The New York Times could hardly contain himself on the News Hour. The buttoned-down conservative sputtered that awarding the Nobel Peace Prize to President Obama was “a joke,” and he dismissed the Nobel Prize Committee as nothing more than “five Norwegian lefties.” Other commentators were quick to pass judgment that the Nobel Committee was behaving like the Democratic Campaign Committee by awarding the prize first to Vice-President Gore and now President Obama. After all, what exactly had Obama accomplished?

Obviously, nine months into his first year in office and only five years out of the Illinois State Senate, Barak Obama is no Nelson Mandela. He hasn’t accomplished what Lech Walesa, Martin Luther King, or German Chancellor Willy Brandt did to win the peace prize. Arguably, he hasn’t even done as much as Vice-President Gore did to wake the world to the apocalypse of global warming. But that misses the point entirely.

The Nobel Peace Prize goes to the person who has done the most in 2009 to advance the cause of world peace. The committee judges individuals based on their contemporary significance, not on their world historical status. You don’t have to be another Dag Hammarskjöld to win a prize. It isn’t a Mother Teresa look-alike contest either.

In 2009 is there any event more significant in reducing international tensions than the change from George W. Bush to Barak Obama? Even if you do not agree with Obama’s politics, public opinion polls show overwhelming approval for Obama and his foreign policies among most of the world’s nations compared to the overwhelming disapproval of the policies of the Bush Administration. The public acclaim he received in Cairo and Berlin was truly astounding. And that matters. One could argue that all that President Obama has done is make speeches. “I have a dream” and “tear down this wall,” were only words, yet they changed the world.

Surely, transforming America’s image, committing the United States to reducing global warming, prohibiting torture, and opening dialogues with old adversaries like Iran and North Korea are momentous achievements.

OK, I admit that Obama may not belong in the same company as Martin Luther King or Linus Pauling, but that’s not the relevant question. We all get the idea that not all prize winners are created equal.

Babe Ruth, Lou Gehrig, Hank Aaron, and Ted Williams, were all chosen as Most Valuable Players. But so were Bob O’Farrell, Spud Chandler and Gabby Hartnett, in their respective years. No one thinks that they all played ball at the same level.

The Godfather, Lawrence of Arabia, On the Waterfront, and All About Eve were all chosen as Best Picture by the Academy of Motion Pictures. Incredibly, the same prize went to Titanic and Braveheart. But they were different years with different pictures in contention.

No one thinks that the tired 60’s musical How to Succeed in Business Without Really Trying was as important as Death of a Salesman, A Streetcar Named Desire, and Angels in America just because all four of them won the Pulitzer Prize for Drama in their respective years.

By awarding the peace prize to President Obama the Nobel Committee was acknowledging a change in the tenor and direction of U.S. foreign policy. The United States has returned to international institutions and to our traditional alliances.

The media has reacted as if Obama is somehow tainted by his association with the Nobel Committee. Americans have often been suspicious when our statesmen are honored from abroad. When Silas Deane, the hero of my book, UNLIKELY ALLIES, was honored in 1778 by our ally Louis XVI many in Congress questioned Deane’s loyalty. Now some Americans even question President Obama’s nationality

The peace prize often is awarded to controversial figures. Yasser Arafat, Henry Kissinger, Le Duc Tho, and Menachem Begin were Nobel winners. Kissinger and Begin? Apparently, the Nobel Committee isn’t just a bunch of “Norwegian lefties.”

We should all take pride that the world has embraced our President as a symbol of American generosity and pluralistic democracy. Obama’s Nobel Peace Prize is America’s peace prize, too. And we deserve it.

 If you like reading this blog, check out my new book, UNLIKELY ALLIES.  

Booklist called UNLIKELY ALLIES, ”A rip-roaring account of the American Revolution, told from a fresh, and undeniably offbeat, perspective.”