What Do the Olympics Tell Us About Xi Jinping?

After Musharraf

Pervez Musharraf stepped down yesterday as President of Pakistan, after nearly nine years leading the Muslim world's only nuclear-armed state and one of its most precarious. His resignation is an act of statesmanship that spares Pakistan weeks or months of political turmoil. We only wish the coalition government that will now have to govern showed any sign that it is up to the job.

For all his faults, Mr. Musharraf tried both to modernize his country and was largely a friend of the U.S. Confronted after 9/11 in a famous meeting with Secretary of State Colin Powell, he aligned himself with the antiterror cause against the Taliban and other Islamic militants.

His government cooperated in the capture of 9/11 plotters Ramzi Binalshibh and Khalid Sheikh Mohammed, among others, and he put nuclear proliferator A.Q. Khan under house arrest. He defused tensions with India and appears to have cut off terror infiltration routes across Kashmir. As a reward for such cooperation, Mr. Musharraf was put at the top of al Qaeda's target list and he dodged three assassination attempts.

Like other military men who take power in coups, however, he was a clumsy politician. He struck a deal in 2006 with tribal chiefs in the frontier bordering Afghanistan, creating a sanctuary for the Taliban, which is now resurgent and threatening both countries. And he turned a blind eye to the madrassas that are breeding grounds for jihadists.

He also misjudged Pakistan's public mood, inflaming the opposition last year with his decision to fire the country's highest-ranking judge, jailing lawyers and civic leaders and declaring martial law. Those decisions squandered whatever legitimacy the general had built in restoring order after the last chaotic democratic government. To his credit, however, he has not insisted on a potentially bloody stand against impeachment, and he leaves as a patriot.

The peaceful departure does speak well of Pakistan's underlying political resilience. The country is not on the cusp of a radical takeover, a la Iran in 1979, and extremist Islamic parties do poorly in elections. But the coalition government is fractious and may now splinter without Mr. Musharraf to rally against.

Tension will grow between the two main political parties -- the Pakistan People's Party of the assassinated Benazir Bhutto, and the Muslim League-N of former Prime Minister Nawaz Sharif. Having spent years in exile in Saudi Arabia, Mr. Sharif is aligned with the leaders of Pakistan's religious parties, with whom he may attempt a power play. He is already turning against Asif Ali Zardari, Bhutto's widower and a possible next President, implying that he's an American patsy for wanting to subdue the jihadists.

Meanwhile, the Northwest Frontier provinces are a nation unto themselves, and the terrorists who train there are targeting not just Kabul and New York, but Karachi, Lahore and Rawalpindi. Afghanistan and India blame Pakistan in part for the recent bombing of the Indian embassy in Kabul. Pakistan's economy is tanking and foreign investment has dried up amid the political uncertainty. While on the sideline for now, Pakistan's military has a history of taking power when civilians falter.

Amid this turmoil, the main U.S. interest continues to be a stable Pakistan that is an ally in the war on terror. This means engaging with all elements of Pakistan society that aren't aligned with the radicals -- from the military, to the media, to most of its political and business classes. One mistake the U.S. made in the 1990s was to pull away from military-to-military ties, and it is in that vacuum that A.Q. Khan was able to do his dirty work.

Some of Pakistan's new leaders bear a grudge against the U.S. for supporting Mr. Musharraf, and perhaps his departure will ease that tension. They need to understand that the jihadists pose as great a threat to Pakistan's survival as they do to America's safety.

What Do the Olympics Tell Us About Xi Jinping?

Amid the official Olympic fanfare, it’s been hard to miss an important new face in the Chinese politburo: Vice President Xi Jinping, a rising political star tipped to succeed Hu Jintao as president. When President George W. Bush was in town earlier this month, he had lunch with President Hu Jintao, and met Mr. Xi immediately afterward, signaling his importance. To use a tired phrase, the Games have been Mr. Xi’s coming out party.

Xi Jinping with President Bush. (AP)

But what kind of leader will Mr. Xi make? Not a whole lot is known about the 55-year-old from Shaanxi Province apart from his official biography. The few glimpses we’ve caught of him during the Olympics haven’t always been positive. Some analysts have fingered him as the official who ordered the removal of nine-year Lin Miaoke from the Opening Ceremony. If true, that doesn’t bode well.

He’s also been involved in the athletics. Today, Mr. Xi helped console the national sadness over the injury of Chinese hurdler Liu Xiang, who was unable to compete in the 110-meter hurdles Monday. State news agency Xinhua reported that Mr. Xi wrote Mr. Liu a telegraph to express his sympathy, albeit hardly a warm and fuzzy get-well note: “We hope that after he recovers, he will continue to train hard and struggle harder for the national glory,” Mr. Xi was quoted saying in the telegram by Xinhua.

Pakistan Gets Another Chance at Democracy

By MARY KISSEL

President Pervez Musharraf announced his resignation yesterday, to the relief of Pakistanis and the country's allies alike. The move brings to an end the former general's almost nine years atop Pakistani politics. The question now is whether the young civilian government can consolidate a wobbly democracy.

AP

Pakistan's political cycle has always ebbed and flowed: A civilian government takes control and mismanages the economy; the military steps in and rules for a while. Eventually the constitution is revised, the civilians retake control, and the cycle starts all over again. Pakistan has had three significantly reworked constitutions and four military coups since independence from Britain in 1947. The latest coup, in 1999, led to Mr. Musharraf's ascent to power.

In February, a coalition of the two main democratic parties, the Pakistan People' s Party (PPP) and the Pakistan Muslim League-N (PMLN), won office in the wake of the assassination of former Prime Minister Benazir Bhutto. At the time of her death, Mrs. Bhutto was leader of the PPP and had been working to form an alliance with then Gen. Musharraf. But Mr. Musharraf didn't entertain the idea of resigning from his military post and forming an alliance with the PPP willingly. It was only after a series of political missteps that he was pressured into taking off his uniform.

The PPP, now led by Bhutto's widower Asif Ali Zardari, and the PMLN, led by former prime minister Nawaz Sharif, took 87 and 66 of the 268 contested federal parliamentary seats, respectively. These two civilian political leaders had a common interest in cooperating: Mr. Sharif can't run his home province of Punjab without the PPP's support. And Mr. Zadari needs Mr. Sharif's PMLN to shore up the government on the national level.

But the coalition has performed poorly, especially in dealing with the growing jihadist insurgency. The government has lost control of the lawless provinces bordering Afghanistan, allowing the Taliban to reassert its rule. It has presided over a rekindling of tensions with India over the disputed territory of Kashmir -- after several years of relative peace. And it hasn't been able to stop an upsurge of bombings in Pakistan's major urban centers. Last Thursday, on the country's Independence Day, a suicide bomber killed eight people and wounded 18 in the eastern city of Lahore. That follows blasts in recent months in Islamabad and Karachi.

The political risk is having economic effects. Investment is fleeing, the Pakistani rupee is weakening, and exports are slowing. The stock market has plunged over 30% since April -- a serious about-face for what was one of the best-performing bourses in Asia last year. The government is struggling under the weight of fuel subsidies. Inflation is running around 24% and unemployment is rising. Energy blackouts are a daily occurrence.

In previous political cycles, this might be the time when the military would consider stepping in. But army chief Gen. Ashfaq Parvaz Kayani seems content to play a backseat role -- for now. Gen. Kayani reportedly backed the government's move to impeach Mr. Musharraf. But he hasn't made any public statements to that effect.

That doesn't mean the army and the intelligence services aren't exerting their influence independently of the government -- as they have so often in the past. The Journal's Jay Solomon reported that the powerful Inter-Services Intelligence Agency, or ISI, was involved in the July 7 bombing of India's embassy in Kabul, which killed 58 people and injured more than 100 -- an operation that has seriously hampered India-Pakistan relations. This prompted Pakistani Prime Minister Yousuf Raza Gilani to issue a decree ordering the ISI to report to the Interior Ministry. But the government soon put the decree in "abeyance" after talking with the ISI.

Without a strong democracy, Pakistan will continue to swing from civilian to military to civilian control, never finding the moderate middle ground its people deserve.

To get the process rolling, the new government needs to move quickly to show that it is competent at basic governance. Getting serious about fighting the war on terror is an essential first step.

That would, in turn, help stabilize the economy and start to bring back the investment the country needs. Only then, with public support, can the government start rebuilding the democratic institutions eroded under eight years of military rule -- starting with the judiciary, which Mr. Musharraf dismantled last year, in what is now seen as the beginning of his political demise.

"I pray the government stops this downsliding and takes the country out of this crisis," Mr. Musharraf said yesterday in his televised farewell address. Now that, at least, was a good parting shot.

Obama's Tax Plan
Is Really a Welfare Plan

By PETER FERRARA

Barack Obama's tax plan is the opposite of supply-side economics. He proposes to raise marginal rates for just about every federal tax. He also proposes a raft of tax credits that taxpayers can receive if they engage in various government-specified activities.

Moreover, the tax credits would mostly go to those who pay little or nothing in federal income taxes. His trick is to make the tax credits "refundable." Thus, if the tax credit is for $1,000, but the taxpayer would otherwise only pay $200 in taxes, the government would write a check to the taxpayer for $800. If the taxpayer pays nothing in federal income taxes, the government would pay him the whole $1,000.

Such credits are not tax cuts. Indeed, they should be called The New Tax Welfare. In effect, Mr. Obama is proposing to create or expand a slew of government spending programs that are disguised as tax credits. The spending on these programs is then subtracted from the total tax burden, in order to make the claim that his tax plan is a net tax cut overall.

On the tax side of the ledger, the details released by his campaign last week confirm what a President Obama has in mind for our most productive citizens. The top individual income tax rate, for example, would be increased by 13%, to 39.6%; the next-highest rate would be raised to 36%. The top rates on capital gains and dividends would rise by a third, to 20%

The Social Security payroll tax would be raised between 16% to 32% for families making over $250,000 a year. This means that the real returns these people get from their lifetime payments into the retirement program will be driven below 0%, according to my own previous research, which was published by the Cato Institute and elsewhere.

Mr. Obama also wants a permanent federal estate tax, with a top rate of 45%; his health-insurance plan includes a new payroll tax on employers; and he also contemplates several increases in the corporate income tax, including a new so-called windfall profits tax on oil companies.

Then there is the spending side of the ledger. Mr. Obama proposes a fully refundable Making Work Pay Tax Credit, which would have the government pay out $500 to each worker and $1,000 to couples -- reminiscent of George McGovern's 1972 election proposal for the government to send a $1,000 check to everyone.

His American Opportunity Tax Credit would provide a $4,000, fully refundable tax credit for college tuition expenses. His Mortgage Interest Tax Credit would provide a 10% credit -- refundable -- to offset mortgage interest payments for lower- and middle-income families. His Health Care Tax Credits, which the campaign says "will ensure that health insurance is available and affordable for all families," include "a new refundable 50 percent health tax credit on employee premiums paid by employers."

Currently existing tax credits would also become spending programs in the Obama tax program. The Savers Credit would be made fully refundable, and would be expanded, according to the campaign, "to match 50% of the first $1,000 of savings for families that earn under $75,000." The Child and Dependent Care Tax Credit would be made refundable and expanded to allow "low-income families to receive up to a 50 percent credit on the first $6,000 of child care expenses."

The Earned Income Tax Credit is already refundable. Mr. Obama would expand it to "increase the number of working parents eligible for EITC benefits, increase the benefits available to noncustodial parents who fulfill their child support obligations, increase benefits for families with three or more children, and reduce the EITC marriage penalty, which hurts low-income families." In short, welfare spending is to be increased by paying more money out to low-income income tax filers.

The latest Congressional Budget Office data shows the bottom 40% of income earners already pays no income taxes. Indeed, they receive a net payment from the federal income tax system -- meaning from the taxpayers -- equal to 3.8% of all federal income taxes, because of the refundable tax credits under current law. The middle 20% of income earners, the true middle class, pays 4.4% of federal income taxes.

Overall, the bottom 60% of income earners pay less than 1% of federal income taxes on net. When "tax credits" primarily go to this group in the form of checks from the government (rather than a reduction in their tax burden) it is simply an abuse of the language to call the spending a tax cut.

Consequently, to say, as the campaign does say, that the candidate's tax plan is a tax cut on net -- and that it would limit taxes to 18.2% of GDP -- is grossly misleading. The Obama tax plan would sharply increase real taxes. It also would come nowhere near to paying for the massive increases in federal spending he has proposed, including the spending that is disguised in the form of refundable tax credits.

Mr. Ferrara is director of entitlement and budget policy for the Institute for Policy Innovation. He served in President Reagan's White House Office of Policy Development, and as associate deputy attorney general under the President George H.W. Bush.

Mexico Grapples With Organized Crime

Talk About Audacity!

By JAMES TARANTO

Speaking before the Veterans of Foreign Wars this morning, Barack Obama delivered an amazing show of chutzpah. John McCain had addressed the VFW yesterday, and as the Associated Press reports, he was predictably critical of Obama:

McCain . . . said Obama "tried to legislate failure" in the Iraq war and had put his ambition to be president above the interests of the United States. He said the Illinois senator did this by pushing for a timetable for withdrawal of U.S. combat troops from Iraq and by voting in the Senate against a major appropriations bill to help fund the troop increase.

Here is Obama's reply:

"One of the things that we have to change in this country is the idea that people can't disagree without challenging each other's character and patriotism. I have never suggested that Sen. McCain picks his positions on national security based on politics or personal ambition. I have not suggested it because I believe that he genuinely wants to serve America's national interest. Now, it's time for him to acknowledge that I want to do the same. . . ."

Of course, if Obama were to accuse McCain of picking his positions on national security based on politics or personal ambition, everyone would laugh, because it obviously is not true. By contrast, there is quite a bit of evidence that Obama has placed political expediency above national security (for an excellent example, see our item yesterday on his shifting explanations for his original opposition to the liberation of Iraq).

In politics one often hears the charge of hypocrisy: My opponent criticizes me for X, but he has done Y, which is just as bad or worse. Obama's argument here, though, is roughly opposite in form. He concedes that McCain is above reproach on this particular subject and therefore demands that McCain treat him as if he were beyond reproach. Obama's acknowledgment of a McCain virtue is well and good, but it does not mitigate or excuse his own shortcoming.

Political Outsider
The venue for next week's Democratic National Convention is Denver's Pepsi Center, a 20,000-seat arena where the local basketball and hockey teams play. But this wasn't a big enough venue for Barack Obama's ego, so he arranged to give his Thursday night acceptance speech at nearby Invesco Field, an outdoor football stadium with a 75,000-person capacity.

Was this a good move? We've heard grumbling from Democrats about the expense and inconvenience, and it plays into the "celebrity" theme the McCain campaign has effectively exploited. On the other hand, it does enable lots more Obamanics to see their man in person. Then again, it's not clear that the vastly larger TV audience will get a more dramatic show than they would otherwise. Presumably the cameras will mostly show Obama in close-up.

An outdoor event, too, is more vulnerable to unpredictable events. NBA and NHL games are hardly ever rained out. True, neither are NFL games, but they frequently are rained on. Some people are hoping that happens to Obama, as London's Telegraph reported last week:

Stuart Shepard of Focus on the Family, one of America's leading evangelical groups, was shown in a video filmed at Denver's Invesco Field, where 75,000 are expected to cheer Mr Obama on Aug 28, asking Christians to pray for "torrential" rain.

"I'm talking 'umbrella-ain't-going-to-help-you rain," the former pastor and television meteorologist said. . . .

Mr Shepard, director of digital media at Focus Action, the political arm of Focus on the Family, insisted the video was supposed to be "mildly humorous." But it was hastily removed by Focus on the Family after complaints from at least a dozen of its members. "If people took it seriously, we regret it," said Tom Minnery, a spokesman.

This prompted MSNBC oddball Keith Olbermann to name Shepard "worst person in the world." (Disclosure: This columnist once achieved that title as well.) The Lexington (Ky.) Herald-Leader quoted Olbermann, who seems to believe that praying for rain is effective in achieving the result:

"It's not boyish humor, pal," Olbermann said last week. "There are droughts in North and South Carolina, parts of California, most of New Zealand, and this idiot who firmly believes he can induce rain by prayer is wasting it by asking his lord and savior to play a political prank. It's not boyish humor, and you're a selfish hypocrite."

Denver's Rocky Mountain News reports on other possible disruptions:

Planners of Barack Obama's acceptance speech for the Democratic presidential nomination at Invesco Field may want to keep a weather-eye out for history of a different kind.

Think: grasshopper swarms blotting out the sun and lightening [sic] strikes, marble-size hail and 53 mph winds.

All these have occurred in the Denver area on Aug. 28 through recorded history, according to National Weather Service. . . .

Records show Aug. 28, 1875 was smack in the midst of a 12-day swarm of grasshoppers that "almost darkened the sun," blanketed streets, "devastated" Denverites' gardens and devoured ripening grain crops in the countryside.

It seems to us that Obama should be praying for grasshoppers, or at least for rain. At least that would provide some drama on his big night.

Insult Journalism
The Russian newspaper Pravda has some critical words about Secretary of State Condoleezza Rice:

The constant arrogance and hypocrisy of this failed female makes it that much more apparent that here is a person way out of her depth. Instead of regarding sensitive issues from a balanced viewpoint as she is supposed to do, this incompetent loud-mouthed, bad-mannered, [barnyard vulgarity]-mongering bimbo takes one side, ignores the other and then speaks down from a holier-than-thou platform as if she were on a lecture dias [sic].

This is not a classroom, Condoleeza Rice, and you are not a diplomat. You are a liar, a cheap, shallow, failed, wannabe actress on the diplomatic stage

At least American journalists (Keith Olbermann notwithstanding) don't engage in this sort of name-calling. Or do they? An Associated Press dispatch on John McCain's vice presidential prospects refers to Joe Lieberman as "the Democratic vice presidential prick in 2000 who now is an independent."

C'mon, guys, we didn't like him then either, but that's no reason for name-calling.

Inherit the Wind
"Following the lead of political families like the Strogers and Lipinskis, Illinois Senate President Emil Jones is anointing one of his children to take over for him when he retires in January," the Chicago Sun-Times reports:

Jones, 72, began the process of handing off his Senate seat to Emil Jones III by filing paperwork Monday with the State Board of Elections to drop himself from the Nov. 4 ballot. Next, Democratic Party leaders in Jones' South Side and south suburban Senate district will choose a replacement.

"His preference, yes, would be to see his son serve," said Cindy Davidsmeyer, Jones' spokeswoman. "But it's the committeemen's choice."

Family dynasties like this are remarkably common in American politics. President Bush is the son of a president and grandson of a senator. Benjamin Harrison was William Henry Harrison's grandson, and John Quincy Adams was John Adams's son. Sen. Evan Bayh, a leading vice presidential candidate, is the son of a man who held the same Senate seat. Al Gore is the son of a senator. FDR, Barry Goldwater and Ted Kennedy all had sons who served in Congress.

Since politicians tax us normal people when we die and want to leave our businesses to their kids, isn't there some way we can tax their political capital?

The World's Smallest Violin
The Associated Press has another story of economic hardship that doesn't seem all that hard. The headline reads "Back to School: Shaky Economy Hits Kids." But the first example reporter Libby Quaid comes up with is one that makes us, as a former kid, envious: "In rural Minnesota, one district is skipping classes every Monday to save fuel. . . . Nationwide, at least 14 other districts are switching to four-day weeks, and dozens more are considering it" And the kids are probably hoping fuel prices keep going up, so they can have a three-day week, and a two-day one, and so on.

Parents have been cutting back on school supplies:

For back-to-school clothes, Heidi McLean shopped at outlets and the Marshalls discount chain for her son and daughter, high school students in Eureka, Calif.

"But this year, I'm forcing the kids to reuse their backpacks," McLean said. "They each cost $50. They like the special cool ones, and they're still holding up."

Oh the humanity! The cost of school lunches is also rising:

As the cost goes up, nutritional quality goes down. It is not cheap to follow federal guidelines for healthy eating; fresh fruits and veggies and whole grains can cost several pennies more per meal.

Poor kids, deprived of vegetables and whole grains! And then there's transportation:

In Oxford, Ala., the bus has always made stops at every house. But this year, kids in fifth grade through 12th grade will have to walk to neighborhood bus stops.

Though come to think of it, would it kill them to get a little walking in? Besides, that exercise ought to make up for the cheap fatty food the school is feeding them at lunch.