Nobel Prize-Winning Scientist Who Endorsed Obama Now Says Prez. is Ridiculous & Dead Wrong on Global Warming

By: Marc Morano - Climate DepotJuly 6, 2015 8:34 PM

Climate Depot Exclusive

Dr. Ivar Giaever, a Nobel Prize-Winner for physics in 1973, declared his dissent on man-made global warming claims at a Nobel forum on July 1, 2015.
“I would say that basically global warming is a non-problem,” Dr. Giaever announced during his speech titled “Global Warming Revisited.”

Giaever, a former professor at the School of Engineering and School of Science Rensselaer Polytechnic Institute, received the 1973 physics Nobel for his work on quantum tunneling. Giaever delivered his remarks at the 65th Nobel Laureate Conference in Lindau, Germany, which drew 65 recipients of the prize. Giaever is also featured in the new documentary “Climate Hustle”, set for release in Fall 2015.

Giaever was one of President Obama’s key scientific supporters in 2008 when he joined over 70 Nobel Science Laureates in endorsing Obama in an October 29, 2008 open letter. Giaever signed his name to the letter which read in part: “The country urgently needs a visionary leader…We are convinced that Senator Barack Obama is such a leader, and we urge you to join us in supporting him.”

But seven years after signing the letter, Giaever now mocks President Obama for warning that “no challenge poses a greater threat to future generations than climate change”. Giaever called it a “ridiculous statement.”

“That is what he said. That is a ridiculous statement,” Giaever explained.

“I say this to Obama: Excuse me, Mr. President, but you’re wrong. Dead wrong,” Giaever said.

“How can he say that? I think Obama is a clever person, but he gets bad advice. Global warming is all wet,” he added.

“Obama said last year that 2014 is hottest year ever. But it’s not true. It’s not the hottest,” Giaever noted. [Note: Other scientists have reversed themselves on climate change.

The Nobel physicist questioned the basis for rising carbon dioxide fears.
“When you have a theory and the theory does not agree with the experiment then you have to cut out the theory. You were wrong with the theory,” Giaever explained.

Global Warming ‘a new religion’

Giaever said his climate research was eye opening. “I was horrified by what I found” after researching the issue in 2012, he noted.

“Global warming really has become a new religion. Because you cannot discuss it. It’s not proper. It is like the Catholic Church.”

Concern Over ‘Successful’ UN Climate Treaty

“I am worried very much about the [UN] conference in Paris in November. I really worry about that. Because the [2009 UN] conference was in Copenhagen and that almost became a disaster but nothing got decided. But now I think that the people who are alarmist are in a very strong position,” Giaever said.

“The facts are that in the last 100 years we have measured the temperatures it has gone up .8 degrees and everything in the world has gotten better. So how can they say it’s going to get worse when we have the evidence? We live longer, better health, and better everything. But if it goes up another .8 degrees we are going to die I guess,” he noted.

“I would say that the global warming is basically a non-problem. Just leave it alone and it will take care of itself. It is almost very hard for me to understand why almost every government in Europe — except for Polish government — is worried about global warming. It must be politics.”

“So far we have left the world in better shape than when we arrived, and this will continue with one exception — we have to stop wasting huge, I mean huge amounts of money on global warming. We have to do that or that may take us backwards. People think that is sustainable but it is not sustainable.

On Global Temperatures & CO2

Giaever noted that global temperatures have halted for the past 18 plus years.

The Great Pause lengthens again: Global temperature update: The Pause is now 18 years 3 months (219 months)

Giaever accused NASA and federal scientists of “fiddling” with temperatures.

“They can fiddle with the data. That is what NASA does.”

“You cannot believe the people — the alarmists — who say CO2 is a terrible thing. Its not true, its absolutely not true,” Giaever continued while showing a slide asking: ‘Do you believe CO2 is a major climate gas?’

“I think the temperature has been amazingly stable. What is the optimum temperature of the earth? Is that the temperature we have right now? That would be a miracle. No one has told me what the optimal temperature of the earth should be,” he said.

“How can you possibly measure the average temperature for the whole earth and come up with a fraction of a degree. I think the average temperature of earth is equal to the emperor’s new clothes. How can you think it can measure this to a fraction of a degree? It’s ridiculous,” he added.

Silencing Debate

Giaever accused Nature Magazine of “wanting to cash in on the [climate] fad.”

“My friends said I should not make fun of Nature because then they won’t publish my papers,” he explained.

“No one mentions how important CO2 is for plant growth. It’s a wonderful thing. Plants are really starving. They don’t talk about how good it is for agriculture that CO2 is increasing,” he added.

Extreme Weather claims

“The other thing that amazes me is that when you talk about climate change it is always going to be the worst. It’s got to be better someplace for heaven’s sake. It can’t always be to the worse,” he said.
“Then comes the clincher. If climate change does not scare people we can scare people talking about the extreme weather,” Giaever said.

“For the last hundred years, the ocean has risen 20 cm — but for the previous hundred years the ocean also has risen 20 cm and for the last 300 years, the ocean has also risen 20 cm per 100 years. So there is no unusual rise in sea level. And to be sure you understand that I will repeat it. There is no unusual rise in sea level,” Giaever said.

“If anything we have entered period of low hurricanes. These are the facts,” he continued.

“You don’t’ have to even be a scientist to look at these figures and you understand what it says,” he added.

“Same thing is for tornadoes. We are in a low period on in U.S.”

Media Hype

“What people say is not true. I spoke to a journalist with [German newspaper Die Welt yesterday…and I asked how many articles he published that says global warming is a good thing. He said I probably don’t publish them at all. Its always a negative. Always,” Giever said.

Energy Poverty

“They say refugees are trying to cross the Mediterranean. These people are not fleeing global warming, they are fleeing poverty,” he noted.

“If you want to help Africa, help them out of poverty, do not try to build solar cells and windmills,” he added.

“Are you wasting money on solar cells and windmills rather than helping people? These people have been misled. It costs money in the end to that. Windmills cost money.”

“Cheap energy is what made us so rich and now suddenly people don’t want it anymore.”

“People say oil companies are the big bad people. I don’t understand why they are worse than the windmill companies. General Electric makes windmills. They don’t tell you that they are not economical because they make money on it. But nobody protests GE, but they protest Exxon who makes oil,” he noted.

Dr. Ivar Giaever resigned as a Fellow from the American Physical Society (APS) on September 13, 2011 in disgust over the group’s promotion of man-made global warming fears.

In addition to Giaever, other prominent scientists have resigned from APS over its stance on man-made global warming.

Giaever has become a vocal dissenter from the alleged “consensus” regarding man-made climate fears. He was featured prominently in the 2009 U.S. Senate Report of (then) Over 700 Dissenting International Scientists from Man-made global warming. Giaever, who is a member of the National Academy of Sciences and won the 1973 Nobel Prize for Physics.

Giaever was also one of more than 100 co-signers in a March 30, 2009 letter to President Obama that was critical of his stance on global warming.

Giaever is featured on page 89 of the 321 page of Climate Depot’s more than 1000 dissenting scientist report (updated from U.S. Senate Report). Dr. Giaever was quoted declaring himself a man-made global warming dissenter. “I am a skeptic…Global warming has become a new religion,” Giaever declared. “I am Norwegian, should I really worry about a little bit of warming? I am unfortunately becoming an old man. We have heard many similar warnings about the acid rain 30 years ago and the ozone hole 10 years ago or deforestation but the humanity is still around,” Giaever explained. “Global warming has become a new religion. We frequently hear about the number of scientists who support it. But the number is not important: only whether they are correct is important. We don’t really know what the actual effect on the global temperature is. There are better ways to spend the money,” he concluded.

Giaever also told the New York Times in 2010 that global warming “can’t be discussed — just like religion…there is NO unusual rise in the ocean level, so what where and what is the big problem?”


Yannick Gagné
Libre@penseur
7 juillet 2015 


 By: Marc Morano - Climate Depot 

New U.Va. Study Sheds Light on Foreclosures in States and Metropolitan Areas

February 25, 2009 — National housing price declines and foreclosures have not been as severe as some analyses have indicated, and they are not as important as financial manipulations in bringing on the global recession, according to a new analysis of foreclosures in 50 states, 35 metropolitan areas and 236 counties by University of Virginia professor William Lucy and graduate student Jeff Herlitz.

Their analysis shows that most foreclosures have been concentrated in California, Florida, Nevada, Arizona and a modest number of metropolitan counties in other states. In fact, they claim that "66 percent of potential housing value losses in 2008 and subsequent years may be in California, with another 21 percent in Florida, Nevada and Arizona, for a total of 87 percent of national declines."

"California had only 10 percent of the nation's housing units, but it had 34 percent of foreclosures in 2008," Lucy and Herlitz reported.

California was vulnerable to foreclosures because the median value of owner-occupied housing in 2007 was 8.3 times the median family income, while the 2007 national average was only 3.2 times higher than median family income (and in 2000, it was lower still at 2.4).

Another vulnerability to foreclosures was seen in the Los Angeles metropolitan area, where more than 20 percent of mortgage-holders in each county were paying at least 50 percent of their income in housing-related costs.

"But even in California, enormous variations existed among jurisdictions, such as in the San Francisco area, where Solano County had 3.69 percent of housing units in foreclosure in November 2008, while only 0.24 percent of housing units were in foreclosure in the City of San Francisco — a 15 to 1 difference," according to Lucy and Herlitz.

Across the country, the run-up in housing prices from 2000 to the national peak in 2006 has contributed to a 10-months' supply of houses for sale, nearly six months more than the norm from 1998 through 2005, they concluded. But most of the excess supply is either foreclosed properties for sale in declining areas — which constituted 45 percent of total sales in some months of 2008 — or "opportunity" sale offerings by owners seeking to take profits on the price escalation of previous years, which often happens when the price of existing homes rise appreciably. Only a small portion of the excess supply is from current construction of new houses, they said.

Potential losses in housing values from 2008 foreclosures in all 50 states — if values decline to 2000 levels — were less than one-third of the $350 billion provided to banks and insurance companies to cope with losses in mortgage-backed securities, Lucy and Herlitz estimated.

"Damage to the balance sheets of large banks and AIG occurred not mainly from losses on foreclosed residential mortgages, but because of borrowing short-range to buy long-range derivatives and from selling credit default swaps insuring derivatives backed by mortgage payments," Lucy and Herlitz said.

"These financial manipulations had high-speed forward gears, but when the housing bubble burst, the banks and AIG discovered they had neglected to create a reverse gear with which they could separate foreclosed properties from some forms of mortgage-backed securities."

Although there are pockets of substantial declines, claims that overall housing values have tanked nationwide are exaggerated, they said. "In the Washington, D.C. metropolitan area, for example, prices have barely changed in the District of Columbia, Alexandria and Arlington County, and parts of Fairfax County in Virginia. The largest price declines (more than 30 percent in 2008) have been in Prince William County, Va., but even there, the range of price declines in its six zip codes ranged from 49 percent to only 6 percent."

The number of foreclosures usually were lower in central cities than in some suburban counties, probably due to less demand in those suburbs, according to Lucy and Herlitz.

Part of this loss of demand can be accounted for by shifts in the age distribution in the population. The population segment from age 30 to 44, when the biggest increase in home ownership occurs, has been declining in recent years. Those are prime child-rearing years for families, so demand for houses with four or more bedrooms has declined and led to an excess of large houses in some counties.

The Obama administration's proposed foreclosure prevention program sets a target of households spending between 31 percent and 38 percent of their income on housing-related expenses. The program will try to prevent foreclosures in residences where Fannie Mae and Freddie Mac have purchased the mortgages by permitting downward adjustments to mortgage rates, to where the value of mortgages is not more than 105 percent of the houses' value, they said.

"This policy will help homeowners where price declines have been modest, as they have been in most states, most metropolitan areas and most counties," Lucy and Herlitz said.

This study includes foreclosure, house value and income data for 2007 or 2008 for 50 states, the 35 largest metropolitan areas and 236 counties in the 35 metropolitan areas.

Lucy is Lawrence Lewis Jr. Professor of Urban and Environmental Planning in U.Va.'s School of Architecture. Herlitz is a graduate student in the Department of Urban and Environmental Planning.

For information, contact William Lucy at 434-295-4453 or whl@virginia.edu.

— By Jane Ford

Le retour de McCain

Guy Sorman
04 mars 2009 à 17:55

Pas impressioné par la popularité d'Obama et sceptique sur l'effet de la relance par le déficit public , le vieux challenger a égrené au Sénat des Etats Unis quelques unes des dépenses supposées ranimer l'économie : 1 million pour la recheche des odeurs chez le cochon en Iowa , 200 000 pour un programme d 'éffaçage des tatouages chez les gangsters repentis , 80 000 pour la recherche sur le génome du poisson chat en Louisiane, 2 millions pour la promotion de l'astronomie à Hawai , etc...Le vice président , Joe Biden , est chargé de veiller au bon emploi de la relance : il faudra interroger les poissons chats et les cohons. Chez nous , Biden, c'est Devedjian : aura-t-il autant d'imagination que ses collégues américains?

Au Japon , il est aussi question de relance ; mais , instruits par l'expérience , les Japonais sont sceptiques : les travaux publics sont le prétexte , chez eux , pas chez nous , de fabuleux détournements de fonds au profit des partis politiques.

Donc , les relances , ne servent à rien de documenté en économie globale mais rendent bien des services à quelques uns et aux poissons chats . C'est toujours ça de pris.

L'esprit de Milton Friedman : New York, February 15, a day with Anna Schwartz

Guy Sorman
15 février 2009 à 22:22


Anna Schwartz must be the oldest active revolutionary on earth. Born in 1915 in New York , she can still be found nearly every day at her office in the National Bureau of Economic Research on Fifth Avenue , where she has been relentlessly gathering data since 1941. And as her experience proves, data can transform the world. During the 1960s, with Milton Friedman, she researched and wrote A Monetary History of the United States, a book that changed forever our knowledge of economics and the way governments operate. Schwartz spent ten years of detective work on the project, which helped found the monetarist theory of economics. “Not only by gathering new data, but by coming up with new ways to measure information, we were able to demonstrate the link between the quantity of money generated by the banks, inflation, and the business cycle,” she explains.

Before the monetarist revolution, most economists believed that the quantity of money circulating in the economy had no influence on prices or on growth. History, Friedman and Schwartz argued, showed otherwise. Every time the Federal Reserve (and the central banks before it) created an excess of money, either by keeping interest rates too low or by injecting liquidity into banks, prices inflated. At first, the easy money might seem to increase consumers’ purchasing power. But the increase would be only apparent, since sellers tended to raise the prices of their goods to absorb the extra funds. Investors would then start speculating on short-term bets--whether tulips in the seventeenth century or subprime mortgages more recently--seeking to beat the expected inflation. Eventually, such “manias,” as Schwartz calls them, would begin replacing long-term investment, thus destroying entrepreneurship and harming economic growth.

By contrast, when the central bank fails to provide enough money to ensure liquidity, the market collapses. There is now a near-consensus among professional economists that lack of liquidity caused the Great Depression. During the severe economic downturn of 1930, the Fed did nothing as a first group of banks failed. Other depositors became alarmed that they would lose their money if their banks failed, too, leading to further bank runs, propelling a frightening downward economic spiral.

To encourage steady growth while avoiding the pitfalls of inflation, speculation, and recession, the monetarists recommend establishing predictability in the value of currency--steadily expanding or contracting the money supply to answer the needs of the economy. “At first, central bankers and governments did not accept our theory,” says Schwartz. Margaret Thatcher was the first to understand that the monetarists were right, following the new monetarist rules when she came to power in 1979, taming inflation and reinvigorating the British economy. The U.S. soon followed during the early 1980s, led by Paul Volker, a Friedmanite then at the head of the Federal Reserve, who, with Ronald Reagan’s tough-minded support, ended raging inflation, though not without considerable short-term pain. “It was a strenuous experience,” Schwartz remembers. As Volker tightened the money supply, thus making credit harder to come by, unemployment spiked to around 10 percent; many businesses failed. But starting in 1983, the inflation beast defeated, a new era of vigorous growth got under way, based on innovation and long-term investment.

This lesson of the recent past seems all but forgotten, Schwartz says. Instead of staying the monetarist course, Volker’s successor as Fed chairman, Alan Greenspan, too often preferred to manage the economy--a fatal conceit, a monetarist would say. Greenspan wanted to avoid recessions at all costs. By keeping interest rates at historic lows, his easy money fueled manias: first the Internet bubble and then, even more catastrophically, the recently burst mortgage bubble. “A too-easy monetary policy induces people to acquire whatever is the object of desire in a mania period,” Schwartz notes.

Greenspan’s successor as Fed chairman, Ben Bernanke, has followed the same path in confronting the current economic crisis, Schwartz charges. Instead of the steady course that the monetarists recommend, the Federal Bank and the Treasury “try to break news on a daily basis and they look for immediate gratification,” she says. “Bernanke is looking for sensations, with new developments every day. But the market isn’t interested.”

Yet isn’t Bernanke a disciple of Friedman and Schwartz? He publicly refers to them as his mentors, and thanks to their scientific breakthrough, he has famously declared, “the Great Depression will not happen again.” Bernanke is right about the past, Schwartz says, “but he is fighting the wrong war today--the present crisis has nothing to do with a lack of liquidity.” President Obama’s economic stimulus is similarly irrelevant, she believes, since the crisis also has nothing to do with either a lack of demand or a lack of investment. The credit crunch, which is the actual cause of the recession, comes only from a lack of trust, argues Schwartz. Lenders aren’t lending because they don’t know who is solvent, and they can’t know who is solvent because portfolios remain full of mortgage-backed securities and other toxic assets.

In order to rekindle the credit market, the banks must get rid of those toxic assets. That’s why Schwartz supported, in principle, the Bush administration’s first proposal for responding to the crisis--to buy bad assets from banks--though not, she emphasizes, while pricing those assets so generously as to prop up failed institutions. The administration abandoned its plan when it appeared too complicated to price the assets. Bernanke and then-treasury secretary Henry Paulson subsequently shifted to recapitalizing the banks directly. “Doing so is shifting from trying to save the banking system to trying to save bankers, which is not the same thing,” Schwartz says. “Ultimately, though, firms that made wrong decisions should fail. The market works better when wrong decisions are punished and good decisions make you rich.”

What about “systemic risk”--much heard about these days to justify the government’s massive intervention in the economy in recent months? Schwartz considers this an excuse for bankers to save their skins after making so many disastrously bad decisions. “The worst thing for a government to do, though, is to act without principles, to make ad hoc decisions, to do something one day and another thing tomorrow,” she says. The market will respond positively only after the government begins to follow a steady and predictable course. To prove her point, Schwartz points out that nothing the government has done to date has really thawed credit.

Schwartz indicts Bernanke for fighting the wrong war. Could one turn the same accusation against her? Should we worry about inflation when some believe deflation to be the real enemy? “The risk of deflation is very much exaggerated,” she answers. Inflation seems to her “unavoidable”: the Federal Reserve is creating money with little restraint, while Treasury expenditures remain far in excess of revenue. The inflation spigot is thus wide open. To beat the coming inflation, a “new Paul Volker will be needed at the head of the Federal Reserve.”

Who listens to her these days? “I’m not a media person,” she tells me. She rarely grants interviews, which distract her from her current research: a survey of government intervention in setting foreign exchange rates between 1962 and 1985. Never before have these data been put together to show what works and what doesn’t. In her mid-nineties, she remains a trendsetter.

La déité

Nathalie Elgrably-Lévy
Le Journal de Montréal, p. 29
05 mars 2009


Dans ma chronique de la semaine dernière, j’ai associé l’effondrement du Dow Jones aux politiques de l’administration Obama. Évidemment, comme chaque fois que j’exprime mon opinion sur les politiques du nouveau président, j’ai droit à une avalanche de courriels haineux dont le ton laisse supposer des expéditeurs ensorcelés par les incantations du leader américain, et programmés pour défendre son message. Manifestement, dans certains cercles, Obama est un dieu, douter de ses initiatives est un sacrilège, et désapprouver ses politiques, un péché capital!

Certes, chacun est libre de déifier la personne de son choix. Mais vouloir bâillonner quiconque n’adore pas le gourou ou ne pratique pas le culte, est une manœuvre inquisitoriale inacceptable dans une démocratie moderne. J’entends donc bien faire respecter mon droit de me dissocier du délire collectif, de refuser d’idolâtrer le nouveau président, et de décliner l’invitation à m’autocensurer. En revanche, je continuerai à apprécier Barack Obama pour ce qu’il est, soit le président des États-Unis, ni plus, ni moins. Et si ses prédécesseurs ont eu droit à la critique et à des propos quelquefois vitriolés, pourquoi Obama devrait-il être épargné?

L’équipe Obama est certainement très bien intentionnée. Mais les mesures adoptées depuis quelques semaines achèveront une Amérique déjà fragilisée. Dans le contexte actuel, il est impératif d’encourager la production. Pour y arriver, il faut stimuler l’investissement et inciter les entrepreneurs à prendre des initiatives. Or, ce n’est pas en augmentant l’impôt sur les gains en capital et sur les dividendes que Washington y parviendra, bien au contraire.

Il faut également augmenter le pouvoir d’achat des travailleurs. Or, abolir les coupures d’impôts votées en 2001 et 2003 est une mesure contre-productive, car elle alourdit le fardeau fiscal des Américains. Globalement, les hausses d’impôts avancées par l’équipe Obama auront pour effet de décourager le travail, l’épargne, l’investissement et l’entrepreneurship, avec pour conséquences d’allonger et d’aggraver la récession, d’imposer une reprise lente et modeste, et de réduire la compétitivité des industries américaines. Obama affirme vouloir combattre la crise économique mais, par ses initiatives, il a déclaré la guerre à la prospérité!

Pis encore, il a endossé un tsunami de dépenses. À titre comparatif, les plans de sauvetage et de relance des dernières semaines ont coûté l’équivalent de 15 guerres en Irak. Certains affirment que les dépenses de l’État sont indispensables pour dynamiser une économie amorphe. C’est faux. George W. Bush a dépensé plus que n’importe lequel des ses prédécesseurs. Il a été incontestablement le président le plus interventionniste des 20 dernières années. On connait le résultat. Pour quelle raison les dépenses de la nouvelle administration seraient-elles donc plus efficaces?

Et puis, n’oublions pas que ces dépenses doivent être financées. Et même si Obama et Ben Bernanke évitent d’en parler, il est clair et inévitable que l’impression de monnaie est l’un des modes de financement retenu. Le processus a d’ailleurs déjà commencé. Il faut donc s’attendre à voir le retour de l’inflation d’ici la fin de 2009. Or, l’inflation est un phénomène sournois, une taxe implicite qui réduit la valeur de nos économies et notre pouvoir d’achat. C’est le cancer de l’économie.

Obama sait pertinemment que ses initiatives entraîneront une douloureuse inflation qui appauvrira rapidement les Américains. Mais, à en juger par les gestes posés, il s’en fiche royalement. Il est déterminé à faire avancer son agenda socialiste, même si ses ambitions occasionnent une destruction de richesses sans précédent.

Les belles paroles d’Obama font rêver beaucoup de gens. Mais le rêve se transformera en affreux cauchemar, ce n’est qu’une question de temps!

Nathalie Elgrably-Lévy est économiste senior à l'Institut économique de Montréal.

* Cette chronique a aussi été publiée dans Le Journal de Québec.

Le début de la fin

Nathalie Elgrably-Lévy,

Le Journal de Montréal, p. 21
26 février 2009

Malgré quelques soubresauts, les marchés boursiers sont en chute libre. Et même si la débandade occupe les médias depuis les deux dernières semaines, elle a réellement débuté en septembre dernier quand Obama a devancé McCain lors de la campagne présidentielle. Depuis, l'indice S&P 500 a dégringolé de 35,4%. Le Dow Jones a perdu presque 20% depuis l'élection du 4 novembre. Durant la seule journée du 21 novembre, il a perdu 6,5% après que le nouveau président eut nommé Thimothy Geithner comme Secrétaire au Trésor.

Ce n'est pas tout. La performance du Dow Jones au cours du mois de janvier a été la pire des 113 dernières années. Quant au plan de 789 milliards qu'Obama a signé il y a une dizaine de jours, il a fait de nouveau plonger le Dow Jones de 6,5%.

Évidemment, comme la quasi-totalité des analystes et des commentateurs sont béats devant le sourire du nouveau président, ils nient qu'un lien puisse exister entre la débâcle boursière et la nouvelle administration. Ils préfèrent proposer des explications aussi décousues que futiles, comme le manque de précision du plan de relance.

La réalité est pourtant simple. Si les marchés n'en finissent plus de s'écrouler, et si les plans de relance sont mal accueillis, c'est que les millions d'investisseurs n'apprécient ni la nouvelle administration ni ses initiatives pour stimuler l'économie.

Peut-on les blâmer? Obama, le Lucky Luke de la Maison-blanche, dépense plus vite que son ombre. Si on additionne tous les plans de relance, on atteint un total mirobolant d'environ 8000 milliards. Il faudrait dépenser dix millions par jour pendant presque 2 000 ans pour atteindre ce chiffre! Et comme ils seront en partie financés par l'impression de monnaie, il faut s'attendre à une inflation importante d'ici 12 à 18 mois. Et qui dit inflation, dit dévaluation de la monnaie. N'est-il donc pas logique que les investisseurs boudent la bourse et se tournent vers les valeurs sûres, comme l'or?

Si l'on tient compte de toutes les obligations, actuelles et futures, du gouvernement américain, y compris la sécurité sociale et les régimes publics de soins de santé, on arrive à 65 000 milliards. C'est plus que le PIB mondial! Concrètement, cela signifie que l'Oncle Sam est en faillite.

Les marchés boursiers en sont conscients et ils lancent un message clair. Ils ne veulent pas d'un gouvernement qui s'endette sans réfléchir. Ils n'apprécient pas que la Réserve fédérale poursuive une politique inflationniste. Ils n'approuvent pas que les contribuables soient forcés de secourir des constructeurs automobiles inefficaces ou des banquiers irresponsables. Ils se méfient d'un Sénat qui autorise un plan de relance de plus de 1000 pages sans même l'avoir lu. Ils n'admettent pas qu'au nom de la crise économique, on envisage de nationaliser des banques. Ils ne comprennent pas que leurs dirigeants, plutôt que de tirer des leçons de l'échec des efforts de relance du Japon dans les années 1990, s'apprêtent à reproduire les mêmes erreurs.

Des millions d'investisseurs constatent que l'Amérique renie tous les principes qui lui ont permis de devenir une puissance économique, et ils ont peur. Ils voient l'Oncle Sam prendre le virage socialiste, et ils préfèrent prendre la fuite. Ils constatent que leurs dirigeants prennent des décisions politiquement rentables, mais économiquement désastreuses, et ils sont écoeurés. Les bourses ne s'effondrent pas parce que les investisseurs saisissent mal les plans de relance. Elles s'écroulent parce qu'ils ont trop bien compris dans quel bourbier l'Amérique s'enfonce!

Nathalie Elgrably-Lévy est économiste senior à l'Institut économique de Montréal.

* Cette chronique a aussi été publiée dans Le Journal de Québec.

Obama finds the Bush center

Jonah Goldberg
February 24, 2009

Here's something President Obama's biggest fans may need to hear: He's just not that into you.

Recall that during the primaries, Obama was probably second only to Dennis Kucinich as an anti-Iraq war and anti-Bush candidate. But he has kept President Bush's Defense secretary and appointed a secretary of State, Hillary Rodham Clinton, who voted for the war. His vice president, Joe Biden, also voted for the war. Obama himself seems to be in less of a hurry to leave Iraq than we might have expected from listening to him over the last couple of years.

The new president has ordered that his predecessor's rendition policies remain largely intact, even to the point of using the "state secrets" privilege to block a rendition lawsuit. Obama may have stated categorically that America "will not torture," but outsourcing it is still OK. 

The White House also defends the Bush policy of imprisoning, without trial, enemy combatants captured abroad. Obama's lawyers argued in a court case brought by Afghan prisoners at the U.S. Air Force base at Bagram, Afghanistan, that the "government adheres to its previously articulated position" -- the one articulated by those evil Bush lawyers.

Meanwhile, a new Pentagon study commissioned by Obama has found that the prison at Guantanamo Bay meets the standards of the Geneva Convention. One can only guess how the White House will make use of that finding. At the least, it should provide cover while the administration looks for alternatives to Gitmo that might not be all that alternative.

On the domestic front, Education Secretary Arne Duncan has decided that Bush's signature No Child Left Behind Act should be retained and moderately reformed. His boldest suggestion so far? "Let's rebrand it. Give it a new name." Now that's change even cynics can believe in.

In a rare instance of consistency between his campaign and his presidency, Obama is keeping Bush's Office of Faith-Based Initiatives, though he's renamed that one. 

There are many lessons one could draw from Obama's actions. You might conclude that the famous pragmatist recognizes that this is a center-right country after all. Or that he is a hypocrite, a statesman, or both, now that the buck stops with him.

You could say that this all shows that Bush's war-on-terrorism policies weren't nearly as outrageous as his opponents, Obama included, said they were. Some conservatives might argue that it demonstrates how centrist, even liberal, Bush's domestic policies were. Obama supporters might claim it proves that conservative fears that Obama was a crazy left-winger were always unfounded.

But how do Obama's biggest fans reconcile his contradictions? The slickest approach is to chalk up every about-face and inexplicable decision to Obama's abiding genius.

"Mr. Obama is like a championship chess player, always several moves ahead of friend and foe alike," explained New York Times columnist Bob Herbert. Translation: The One may move in mysterious ways, but that's no reason to doubt him.

Self-described conservatives who supported Obama in the election have made a similarly non-falsifiable argument about his qualifications (given that his record was patently unconservative): He simply has a superior presidential "temperament."

Such rationalizations reveal more continuity between Bush and Obama. Their biggest fans and foes seem driven by emotion rather than reason. We've seen this before. Bill Clinton moved his party to the right, but a lot of conservatives and liberals couldn't stomach acknowledging it. Bush was mostly a moderate Republican, but his liberal enemies hated him, and anything they hated had to be "right-wing." Even Republicans who admired Bush couldn't bring themselves to admit that the subject of their adoration might not in fact be a true-blue conservative.

Indeed, thanks in part to the lazy framing of the media and the pressure cooker of partisan Washington, conservatism became defined as Bushism, liberalism as not-Bushism, even though Bush had campaigned as a "different kind of Republican" and said over and over that "compassionate conservatism" was a sharp break with conventional conservatism.

It's early yet, but I think we're seeing with Obama what happened with Bush. The chess master is really just a man who's figuring it out as he goes along. Sometimes he'll be right; other times, horribly wrong. But whether he's right or wrong, left-wing or centrist, liberalism will likely mean whatever Barack Obama says it means.

jgoldberg@latimescolumnists.com

Obama en panne

Guy Sorman,

21 février 2009

Populaire, à l'aise, Obama donne le sentiment d'avoir toujours été Président des Etats Unis ; fait pour le rôle. Noir ? On a oublié : ce n'est même plus un débat.

Mais sa politique patauge. L' équipe est médiocre, un vice Président niais, une secrétaire d'Etat limite ridicule dans sa tournée asiatique , un secrétaire au Trésor bredouillant. Le seul acte jusqu'à présent a été le "stimulus" mais rien de plus facile et sans doute inutile que de dépenser l'argent public avec l'espoir que les Chinois continueront à acheter des Bons du Trésor US à 0%.

Le plus dur est à venir et pas défini. La guerre : en Irak, elle est de fait achevé, les Irakiens prennent le relais dans une démocratie relative et avec l'argent du pétrole. Bush a donc gagné sa guerre inutile.

Mais Kaboul? Pourquoi Obama a t-il repris à son compte la stratégie de Bush ( surge ) en expédiant là-bas 17000 soldats ? A quoi ressemblerait une victoire ou une non- défaite en Afghanistan qui n'a jamais connu de gouvernment central, n'a aucune notion de ce qu'est un Etat et n'a d'autre ressource que l'opium ? On aimerait qu'Obama explique cette "bonne guerre".

La panne économique enfin ou surtout .Les banques américaines sont affectées d'une dette toxique de 1,5 mille milliards de dérivés "garantis" par des credits hypothécaires. Dette peu solvable, supérieure à leur capital (1,3 mille milliards pour les seules banques US ) Donc ces banques sont en faillite virtuelle, le crédit est gelé : c'est ça la crise. La relance keynesienne a une ou deux guerres de retard et Obama's inc ne répond toujours pas à la question. Les Européens non plus mais nul n'attend que Mme Lagarde trouve une solution.

Sans doute Obama, en campagne, comme la quasi totalité des hommes politiques , devait dire " On gagne d'abord, on verra après". Mais après, c'est maintenant et l' administration démocrate se cherche encore, profondément impréparée à l'exercice du pouvoir.

Dans 18 mois, élections parlementaires aux US : Les Républicains qui refusent de s'associer aux hésitations d'Obama, pourraient gagner ( avec à leur tête, une nouvelle génération ) et restaurer une économie qui a fait ses preuves sous Reagan: monétarisme, destruction créative. Le capitalisme a encore un avenir.

The U.S. recession is not that miserable

By Alan Reynolds
Posted: February 10, 2009, 7:22 PM by NP Editor




‘misery index’ shows the U.S. looks better now than it did in earlier slowdowns

President Obama, writing in The Washington Post, said, “By now, it’s clear to everyone that we have inherited an economic crisis as deep and dire as any since the days of the Great Depression.” But how would we know if and when this crisis is really more “deep and dire” than others?

Many may believe we’re in the worst recession since the Great Depression, if only because politicians and the press keep repeating that claim. But we need to compare some facts to discern whether this recession is (or will be) “worse” in some sense than those of 1973-75 or 1981-82.Congressional Budget Office Director Douglas Elmendorf told the House Budget Committee that if the economy is still contracting by mid-year, then this recession will be longer than the 1981-82 and 1973-75 downturns, each of which lasted 16 months. Yet this recession was quite mild until last September. And the severity and human discomfort of downturns can’t be measured by their duration.

A wise adviser to President John F. Kennedy, Arthur Okun of Yale, devised the “misery index” to gauge the pain of economic crisis — a measure that simply adds together the unemployment rate and the inflation rate. It hit 22% in June, 1980, during an inflationary recession that preceded the Fed’s disinflationary squeeze of 1981-82. The misery index was nearly as bad in January, 1975, at 19.9%.

Assuming inflation was close to zero this January, the misery index would have been roughly the same as the unemployment rate, or 7.6%. By this standard, we have a very long way to go before the economy feels nearly as miserable as it did in 1975 or 1980.

There are several other ways to measure economic distress, however, some of which are shown in the nearby table. The first two columns show the total change in real GDP and industrial production from the economy’s peak to its trough for that cycle.

Current data show only what happened so far, of course. But that gives us some idea of how much further the economy would have to fall to end up as “deep and dire” as the recessions of 1973-75 or 1981-82.

An average of 55 forecasters in the Jan. 15 Wall Street Journal survey expect real GDP to fall by another percentage point (a 2.1% drop in total) before recovering in the third quarter. If they’re right, this would be just the third deepest postwar recession by that broad measure.

Measured by unemployment, on the other hand, this might well be the second deepest recession. The current unemployment rate of 7.6% is quite unlikely to reach the postwar record of 10.8%. But the Journal forecasters expect the jobless rate to top out at 8.9% after the recession is technically over — making this very close to becoming the second worst recession in terms of job loss.

In a 1999 Business Week column, Harvard economist Robert Barro suggested we should also improve the misery index by adding a long-term interest rate (and GDP). The table shows 30-year mortgage rates. By that measure, there’s no way we’ll come close to the sort of misery of past recessions — notably, the 18.45% mortgage rate of October, 1981.

With one exception — the steep 45% drop in the S&P 500 stock index since October, 2007 — few other indicators of economic distress could support this being the worst postwar recession. Thanks to low inflation, for example, real disposable income rose every month during the fourth quarter — at an annual rate above 6%.

President Obama needs to be a calming voice right now, a source of strength. It’s not helpful for him to be warning of a “catastrophe,” and making vague, untenable allusions to the Great Depression.

Recessions have almost always ended within a year or so, long before there was a Federal Reserve or Keynesian theory. Debts have to be worked down and excess inventories sold off so that profits, and therefore stock prices and wealth, can revive.

Such curative processes do not take years, as the President suggests — unless the government does too much foolish tinkering. But recovery will require more perspective and patience than we’ve been seeing from the White House lately, because time really does heal many economic wounds.

Financial Post Alan Reynolds is a senior fellow with the Cato Institute
and the author of Income and Wealth.

Making the worst of it

Kevin Libin, National Post
Published: Saturday, February 07, 2009


By the time President Franklin Delano Roosevelt addressed his nation in his first radio fireside chat one March evening in 1933, America's banking system was on the brink of collapse. A fifth of the country's financial institutions were out of business. Citizens, nervous about losing their savings, had started a run on the remaining banks' cash, preferring the safety of mattresses. Roosevelt, having ordered the banks closed, spoke to a rattled and frightened nation. There was, to be blunt, not much stirring in his words.

He explained the basics of how banks worked, why they needed cash deposits, why most remained sturdy and the plan to gradually reopen them. He concluded: "You people must have faith; you must not be stampeded by rumours or guesses. Let us unite in banishing fear. We have provided the machinery to restore our financial system, and it is up to you to support and make it work," he said. "Together, we cannot fail." When the first banks began to reopen the following day, thousands of clients were lined up outside, ready to redeposit their money. America was soothed.

We are told now, repeatedly, that we are in the teeth of the "worst" financial crisis since that time of Great Depression. And while the public understands vastly more about the financial system and its cycles, today's leaders -- egged on by around-the-clock media eager for high drama, buoyed by a society with a self-absorbed nature that seems to erase any context of longer-term troubles --have traded Roosevelt's cool reassurances and we'll-weather-this-too approach for dark forecasts of worst-case scenarios and panicky appeals. U. S. President Barack Obama warned this week that the U. S. economy could become a "catastrophe for families and businesses across the country."

He recently described this as "a crisis unlike any we have seen in our lifetime." Last week, our own Conservative government's Throne Speech insisted we are in "a time of unprecedented economic uncertainty." British Prime Minister Gordon Brown this week said the world was in a "depression" and days earlier, his treasury financial secretary warned that the U. K. could suffer worse than it did during even the war years, "facing some of the harshest economic conditions for decades, perhaps for a century."

If you're not hysterical yet, you must not be paying attention: Political leaders have clearly made it their task to convince you this is the absolute worst of economic times. So much so, that they have all taken to revising history and exaggerating today's troubles. The mystery is: why?
Because, these times are not "unprecedented." This is not unlike anything we've seen. Serious economists do not call this a "depression," or predict a return to bread lines, work camps and street urchins peddling apples on the streets. There will be no rationing, as there was in wartime London.

"That's bulls--t," says Chris Thornberg, a principal at Beacon Economics in California, one of the first economists to foresee America's housing meltdown in early 2007. "All the numbers we see right now are in line with what you would call a normal, bad recession. The increase in unemployment, the drop in payroll employment: this all looks like 1975. It looks like 1982. Not the Great Depression."

This is a hard time for many families, certainly. But outside, things look familiar: We wait in line at Starbucks; this past Christmas the average American shopper spent US$120 just on themselves. Wall Street managed to dole out US$18.4-billion in bonuses, despite 2008's annus horribilis. American economist Paul Krugman was left telling NBC's Hardball recently that "you've got luxury cars landing at the dock in Los Angeles and then just sitting there because no one could buy [them] ... this is functionally a lot like the Great Depression." Because Lexus sales are down.

Today's younger generations had been led to believe, in the face of an impending labour shortage and employers' clamouring for Web-savvy Facebook virtuosos, that the economy was their oyster offering so many rewarding, comfortable jobs up like pearls, suggests Lianne George, co-author of the recently released Ego- Boom: Why the World Really Does Revolve Around You.
"Well-intentioned attempts to make this generation feel good about itself have, in fact, left them poorly prepared to weather a tough economic storm," Ms. George recently wrote in Maclean's.
When even Google -- epitome of the last decade's blissful, dry-cleaning serviced workplace revolution -- began laying off, as it did in November, many younger workers' worlds surely quaked.

The tendency to frame this in historic terms must be a tempting one for anyone feeling betrayed by the sudden reappearance of long forgotten hardships. With seniors, their retirement funds ravaged, promising to hang on to their desk jobs many years longer than planned, and many starter homes purchased in the last few years worth less than their purchase price, this can only seem like a dustbowl to those accustomed to nothing but bumper crops.

We feel poorer, particularly in the U. S., because our largest asset -- our home -- has lost value. But unemployment rates today are lower than they were in recessions in the '70s and '80s. Projected to peak in the United States somewhere shy of 9%, jobless rates won't match the nearly 11% reached in 1981-82, let alone the peak of 25% during the Depression. Even after yesterday's ugly job loss numbers --129,000 layoffs in January -- Canada's 7.25% unemployment rate still hovers below the average rate over most of the past 30 years. And Dale Orr, managing director in Toronto at Global Insight, says that 2009 in Canada will still be mostly better than 1991. The International Monetary Fund expects U. S. GDP to shrink 0.7% this year; during the Depression, the U. S. economy was cut by a third.

"We don't have enough rhetoric of faith, the rhetoric of confidence," says Amos Kiewe, a professor specializing in presidential rhetoric at Syracuse University. "I wish they would induce more confidence."

There may be a number of reasons for the hyperbole. The most evident is the recent and current environment of heightened political partisanship. The full weight of the recession crashed over North America at a time of concurrent election campaigns in Canada and the United States, ensuring the economy would be the top issue. Politicians who seemed too serene-- recall John McCain's maligned "the fundamentals of our economy are strong" -- were torched by rival spin-doctors. As the Democrats noticed worsening economic news correlating to larger gains in support, the Obama team had motive to paint a worrisome picture.

"The fact that it was an election year forced Obama to be more negative," says John Huizinga, an economics professor at the University of Chicago.

The Democratic candidate even resorted to citing statistics that don't exist: Last summer, he said the "percentage of homes in foreclosure and late mortgage payments is the highest since the Great Depression."

Actually, there exist no foreclosure data that far back. No wonder that by December, a CNN poll showed six in 10 Americans convinced a depression was nigh.

Of course, we have never before had the influence of that 24-hour all-news network, and a parade of other channels and Web sites, to help us worry as we have this time, since the last major U. S. recession happened before the First Gulf War, and the birth of the "CNN Effect."

These are outlets hungry for high drama to fill their hours, notes Greg Elmer, a media studies professor at Ryerson University in Toronto, and are often moved to continually ask, 'how bad will it get?' as a way of keeping the story moving. It doesn't help that any journalist younger than 40 has never seen anything like this before, and may be willing to believe, therefore, that it resembles the Great Depression.

"I think it's a trope, it's a way to talk about any downturn in the economy," says Mr. Elmer. While the cynical say it's a way to sell more papers, more likely, he says, it's comparable to the habit of sticking the suffix "gate" on any government transgression, as though a rumoured sex-scandal like Troopergate was anything as serious as the felonious Watergate. Still, Alison Milward, a marketing manager at Business News Network says audience numbers have shown a "significant increase" as the economic news has soured.

That Mr. Obama hasn't let up is probably partly due to the fact that he has been battling Congress over the stimulus bill. The more urgent the situation seems, suggests Mr. Kiewe, the more pressure he can put on rivals to play ball. "If we don't pass this thing, it's Armageddon," hyperventilated one Democrat this week. Yet, careful observers note that the bulk of initiatives within the latest bundle of emergency measures won't create jobs --at least not anytime soon -- and that hundreds of billions are earmarked for expanding the federal government. That might suggest that the Obama administration sees advantage in exaggerating its urgency in order to smuggle through a number of otherwise unpopular policies. "You never want a crisis to go to waste," Mr. Obama's chief of staff, Rahm Emanuel said in November. "It's an opportunity to do things you couldn't do before."

The starkest transformation has come from our own Prime Minister who in October of last year was lambasted by opposition leaders, in the thick of a campaign, for offering optimism about the economy, telling the CBC's Peter Mansbridge that there was "probably some great buying opportunities emerging in the stock market as a consequence of all this panic." In fact, in that same month, U. S. investing sage Warren Buffett had said the very same thing. But Mr. Mansbridge was incredulous: "Do you really want to say that?" he checked.

Within two months, with the opposition threatening to topple his government, claiming the Prime Minister was insufficiently alarmed over the economy, and forced to justify the first impending federal deficit in over a decade, Mr. Harper was using the word "depression," adding "I've never seen such uncertainty.... I'm very worried about the Canadian economy."

Ever since Bill Clinton reached out to unemployed Americans in the 1992 election campaign, riding his "I feel your pain" empathy to the White House, politicians have been less focused on unflappable leadership and more anxious about seeming out-of-touch not only with the concerns of voters, but their feelings. "Instead of telling them what you think they need to hear, you tell them what they want to hear," says Mr. Kiewe.

Determined to out-empathize their political opponents, political leaders may have trapped themselves in a rhetorical cycle of Depressiongrade doom. That worries Mr. Kiewe: too much panic in the ranks could aggravate things, as businesses hesitate to invest and consumers get too scared to spend. Today's political leaders may find that, unlike Roosevelt's comforting words, the more they prophesize the economic end-of-days, the more likely they are to come true.

Obama Says He Erred in Nominations (Daschle and Another Pick Withdraw Over Tax Problems)

By Anne E. Kornblut and Michael D. Shear
Washington Post Staff Writers
Wednesday, February 4, 2009; Page A01

President Obama acknowledged yesterday that he had "made a mistake" in trying to exempt some candidates for positions in his administration from strict ethics standards and accepted the withdrawal of two top nominees, including former Senate majority leader Thomas A. Daschle, in the first major setback of his young presidency.

Obama officials had sought a seamless transition, nominating most of his Cabinet at record pace and taking office ready to implement a raft of new policies. His reversal yesterday suggested that speed may have come at a cost, and that Obama, despite the overwhelming popularity he had upon taking office and the major challenges facing the nation, will not be spared from the same kind of scrutiny his predecessors have faced.

In jettisoning one of his closest and earliest political allies, the president appeared eager to make a course correction after days of criticism that his administration was not abiding by its own stated ethical standards and questions about his ability to bring change to the capital.

"Did I screw up in this situation? Absolutely. I'm willing to take my lumps," Obama told NBC's Brian Williams, one of five interviews he gave yesterday afternoon. Obama told the network anchors that there are "not two sets of rules" for people, and said that average taxpayers deserve to have public officials who pay their taxes on time.

Daschle's exit from consideration to lead the Department of Health and Human Services after a firestorm over his failure to pay $146,000 in taxes on time came as a shock to the president's supporters in Washington. Just a day earlier, Obama had pledged his full support for the former Democratic Senate leader who was widely expected to be confirmed. And just hours before Daschle bowed out, Nancy Killefer, Obama's nominee for the newly created position of chief performance officer, also stepped aside because of a tax problem.

Daschle's withdrawal came as a jolt to the administration, serving as a rebuke to Obama officials who had privately and publicly brushed aside the idea that personal tax issues would reach a boiling point. Senior officials had insisted that the public was too concerned with the ongoing economic collapse to fixate on the foibles of the people being marshaled to try and set the nation back on course.

And perhaps most significant, the move threatened Obama's plans to overhaul the health-care system, a central policy initiative and one so important that he had chosen Daschle for a perch both at the Department of Health and Human Services and in the White House itself. Daschle withdrew from consideration for both posts yesterday, and advisers said they did not know whether the next nominee would serve in dual roles, a measure of the disarray the controversy had caused.

Daschle disclosed the decision in a joint statement with Obama, acknowledging that questions about his tax lapses had become "a distraction." "I will not be the architect of America's health system reform, but I remain one of its most fervent supporters," he said.

Obama, in that statement, described Daschle's tax problems as a "mistake" that he did not excuse. But the administration did not fully explain the sudden decision, which came only after media scrutiny and threats from some Republicans that Daschle would face a difficult confirmation process.

Daschle's exit came just hours after Killefer announced her withdrawal amid questions about a $967 tax lien that was placed on her Washington home in 2005 after she did not pay unemployment compensation taxes on household help. Both events upstaged the president's formal announcement of his choice of Sen. Judd Gregg (R-N.H.) as commerce secretary -- and a visit that Obama and the first lady made to read to students at a District charter school.

The administration had initially ignored criticism of Daschle after the disclosure last Friday that he had not paid taxes on a car and driver that a private equity firm had made available to him. As recently as Monday, it still appeared that he would be confirmed by the Senate, where he still had the near-unanimous loyalty of his former Democratic colleagues.

Key lawmakers were also caught off guard by the reversal. Sen. Max Baucus (D-Mont.), chairman of the Finance Committee, who offered Daschle his firm support after a 75-minute meeting on Monday, said he was told just 15 minutes before the news broke. "The tone was almost collegial, it was not acrimonious," Baucus said of the committee meeting, during which senators spent an hour reviewing the report on Daschle's finances and then met with him behind closed doors. "Based on that meeting, I'm a little surprised by Senator Daschle's decision," he said.

Daschle informed Obama of his decision in a phone call yesterday morning, White House officials said.

Sen. Olympia J. Snowe (Maine), a key Republican on the finance panel, said she went home Monday night expecting the confirmation process to go forward and Daschle to be sworn in as the new health secretary. "I thought the process was underway," she said. "All indications were that this was going forward."

Gregory B. Craig, the White House counsel, declined to say whether the latest upheaval would prompt the White House to revisit its rules relating to senior officials coming from the private sector into the administration. Although Daschle was not a registered lobbyist, he represented health-care clients for his law firm and he received more than $250,000 in income from paid speeches and advice given to corporations in the health-care sector.

Before Daschle's decision was announced, a growing number of Senate Republicans began speaking out against his nomination. After holding back criticism for almost four days, some Republicans broke their silence after learning that Killefer was withdrawing her nomination because of what appeared to be a much smaller tax dispute.

"He didn't really have a choice," Sen. John Cornyn (R-Tex.) said, after calling for Daschle to step aside earlier in the day.

Cornyn, chairman of the GOP campaign committee, said the controversy had become "Geithner on steroids," referring to the $43,000 in back taxes new Treasury Secretary Timothy F. Geithner paid before his confirmation vote.
The situation also raised questions about how thoroughly Obama transition officials had vetted their Cabinet nominees.

Officials said yesterday that myriad tax questions had been posed to Daschle, Killefer and Geithner. But the problems were largely dismissed as less important than the nominees' qualifications for the major tasks they were expected to confront in office, the officials said.
One person familiar with the appointment process said Obama and his top advisers were concerned about the possibility of political "combustion" occurring over the tax issues. "People were not unaware that might happen," the official said. But they believed that Geithner and Daschle were uniquely qualified.

"We knew he'd get punched around on this, and that he had made a painful mistake," John D. Podesta, who co-chaired Obama's transition team, said of Daschle. "But we believed he could be confirmed and that he was -- and I still believe this -- the right guy for the job of leading the department and finally getting health-care reform across the finish line."

As he assembled his administration, Obama conducted the vetting process methodically and required unprecedented scrutiny of candidates' personal, financial and professional backgrounds.
Potential picks had to answer 63-item questionnaires, which an army of lawyers, many of them volunteers, then scoured. Nine of the questions were about taxes. No. 37 asked whether "a tax lien or other collection procedure" had ever been instituted against the nominee, and No. 39 asked: "Do you have any expectation that you will be the subject of any tax, financial or other audit or inquiry?"

People familiar with the Obama transition said Daschle did not reveal his tax issue on the questionnaire.

"The car and driver is not something that will come up in a review of documents or tax returns," said a Washington lawyer who helped vet candidates. "It really is something you find out about in doing an interview of the potential nominee. You just have to ask the questions."
Some close to the process said the Obama team believed that the various tax errors were innocent mistakes and that any furor over them could be overcome.

"Every time a nominee gets in trouble for something, another question gets added to the questionnaire," one transition official complained. "We're getting to the point -- Killefer might be a better example -- where you're [having to hire] people out of some hermetically sealed tank."
Clay Johnson III, who ran President George W. Bush's transition team and later served in the White House as presidential personnel director, said he is surprised to see three of Obama's nominees weighed down by tax troubles considering that paying -- or not paying -- taxes has long been the top concern for vetters.

"It's huge," Johnson said. "Do you pay your taxes? . . . It is something that is checked religiously."

Staff writers Paul Kane, Shailagh Murray, Philip Rucker and Ceci Connolly and research editor Alice Crites contributed to this report.