FROM DC: Morning Must Reads — Mr. Holder's Prerogative

Washington Post — Holder's Decision To Probe CIA Hints At a New Dynamic

Attorney General Eric Holder has tremendous stroke inside the Obama administration.

According to writers Carrie Johnson and Anne Kornblut, his decision to launch a criminal probe of the CIA was met with a presidential nod, even though the administration has publicly acknowledged that such a prosecution will make fighting Islamists harder and be a political liability.

The story ends up being mostly treacle about how President Obama is both wise and good based on blind quotes from administration officials.

But the nugget of news that Obama gave the tacit okay to Holder does have some consequence.

First, it suggests that Obama does not want to say no to Holder, even when it’s in the administration’s best interest. Second, it suggests that Holder will be emboldened by his ability to push the president around. He’s expressed regret for having been an enabler of Bill Clinton’s excesses, so Holder would understandably resent presidential interference.

But the story is mostly puffery like this:

“‘Obama is approaching the issues as a game of ‘three-dimensional chess,’ said John O. Brennan, an assistant to the president for homeland security and counterterrorism. ‘It's not kinetic checkers. And I think the approach in the past was kinetic checkers. There are moves that are made on the chess board that really have implications, so the president is always looking at those dimensions of it.’”


Charles Krauthammer — Obamacare: The Only Exit Strategy

There’s no future for the health plans farthest along in Congress. The more that voters know, the less they like them.
President Obama thought he could avoid this moment by not having a plan until one appeared as if by magic. Now, there will be no rabbits pulled out of anywhere.

So the question is what the president can do get the process restarted – how can he rebrand the product.

In a very smart piece, Krauthammer suggests that president will have no choice but to get behind a new measure that has no public option and no end-of-life counseling and is based on new insurance regulations and an individual mandate.

“And here's what makes it so politically seductive: The end result is the liberal dream of universal and guaranteed coverage — but without overt nationalization. It is all done through private insurance companies. Ostensibly private. They will, in reality, have been turned into government utilities. No longer able to control whom they can enroll, whom they can drop and how much they can limit their own liability, they will live off government largess — subsidized premiums from the poor; forced premiums from the young and healthy.
It's the perfect finesse — government health care by proxy. And because it's proxy, and because it will guarantee access to (supposedly) private health insurance — something that enjoys considerable Republican support — it will pass with wide bipartisan backing and give Obama a resounding political victory.

Isn't there a catch? Of course there is. This scheme is the ultimate bait-and-switch. The pleasure comes now, the pain later. Government-subsidized universal and virtually unlimited coverage will vastly compound already out-of-control government spending on health care. The financial and budgetary consequences will be catastrophic.”


Wall Street Journal — Reversal on Senate Succession Stirs Political Storm

In the cutthroat game of Massachusetts politics something like a Senate vacancy would naturally be an ugly thing. But add national pressure over the health debate, a politically vulnerable governor who needs the state senate to change the law in order to appoint a successor, and a bushel full of the ambitions of the third string of Kennedy politicians and you have a real thick chowder.

Writers John Hechinger and Philip Shishkin look at the war brewing in Boston.

The challenge for Gov. Deval Patrick is to find a caretaker to hold Ted Kennedy’s seat who won’t offend the statehouse factions who could block the appointment.

Names from the past, like former Gov. Michael Dukakis, are being mentioned as the most likely picks. And one suspects that before Patrick is given the power of appointment stripped from predecessor Mitt Romney he will have to let lawmakers know who he intends to pick. And Patrick, who’s had a rough run and is a fellow Axelrod client and friend of President Obama, needs a win here.

“Massachusetts Republicans pledged to make the most of the Democrats' reversal in coming elections. ‘If legislators go through with this, they are gigantic hypocrites,’ said Jennifer Nassour, chairman of the Massachusetts Republican Party. ‘There is no other way to label them.’

Apart from the question of democracy, allowing a governor to appoint a lawmaker can backfire.

Filling a U.S. Senate seat recently created a headache for New York Gov. David Paterson, who had the power to fill the seat vacated by Hillary Clinton when she became secretary of state. Mr. Paterson considered Caroline Kennedy — Edward Kennedy's niece — but after an episode that generated unflattering publicity for both Mr. Paterson and Ms. Kennedy, he ended up choosing then-Rep. Kirsten E. Gillibrand.”


Washington Post — Accusations Of Vote Fraud Multiply in Afghanistan

It seems increasingly likely that there will be no winners in Afghanistan’s elections. Writers Joshua Partlow and Pamela Constable find confidence in any useful result to last week’s vote to be low and still declining among the educated classes in the country.

What it means is that without a stable government, ambitious Obama aims for the nation and neighboring Pakistan may be frustrated by a lack of a functional local government. That, in turn, may weaken already slipping domestic support for the war.

“All five leading candidates have filed complaints of ballot-box stuffing or destruction, intimidation and pressure on voters at polling stations, and ballots cast by phantom voters. One candidate, former anti-drug official Mirwais Yasini, personally delivered boxes full of shredded ballots to the foreign-led Election Complaints Commission. Yasini and five other candidates issued a joint statement this week saying the election was marred by “widespread fraud and intimidation” that threatened to “increase tension and violence in the country.”

Because the complaint process is slow and cumbersome, officials at the complaints commission office in Kabul said they do not expect to finish their investigations until mid-September, at least two weeks after the official election results are announced. That could create public tension and possible unrest, especially if Karzai is announced as the winner before the numerous complaints have been resolved.”

Washington Post — Banks 'Too Big to Fail' Have Grown Even Bigger

The increasingly indispensable economics writer David Cho looks at how the bust and bailout cycle has concentrated power among few banks – more regulation usually means less competition. But in this case, being big doesn’t mean being strong. As the FDIC acknowledges that the string of bank failures have put a dent in the agency’s reserves, the notion of unstable hegemonies is particularly unsettling.

“The crisis may be turning out very well for many of the behemoths that dominate U.S. finance. A series of federally arranged mergers safely landed troubled banks on the decks of more stable firms. And it allowed the survivors to emerge from the turmoil with strengthened market positions, giving them even greater control over consumer lending and more potential to profit.

J.P. Morgan Chase an amalgam of some of Wall Street's most storied institutions, now holds more than $1 of every $10 on deposit in this country. So does Bank of America, scarred by its acquisition of Merrill Lynch and partly government-owned as a result of the crisis, as does Wells Fargo, the biggest West Coast bank. Those three banks, plus government-rescued and –owned Citigroup, now issue one of every two mortgages and about two of every three credit cards, federal data show.

A year after the near-collapse of the financial system last September, the federal response has redefined how Americans get mortgages, student loans and other kinds of credit and has made a national spectacle of executive pay. But no consequence of the crisis alarms top regulators more than having banks that were already too big to fail grow even larger and more interconnected.”

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