Small-business owners are more concerned about the administration’s emerging $1 trillion healthcare plan, which will drive up their costs, and with the new taxes that are aimed squarely at the income groups into which owners of small firms generally fall. So they won’t expand or hire.

Which is why the White House is so unhappy. The only indicator that matters to the president is jobs, jobs, jobs, about which he quizzes his staff every day. That’s another way of saying votes, votes, votes. The latest polls show that the portion of Americans approving Obama’s handling of the economy has dropped from 58% to 50% in the past six months, approval of his handling of the deficit is down from 49% to 40% and that 67% believe it is “not possible” that his healthcare plan will not add to the deficit. Nevertheless, the president remains personally popular. He would like to keep it that way and is considering a programme that would give tax credits to employers who add to their workforces.

Consumers are the third unhappy group, completing the gloomy business-political-consumer troika.

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For the past eight years, the dollar has increasingly become less revered. Its value has been volatile. As the rest of the world saw the United States struggling with a failing war and soaring budget deficits, many who had large dollar holdings began to reduce those reserves (or increase them less than they otherwise would have). All this put downward pressure on the dollar. And thus began the first signs of a vicious circle. The strength of the dollar is becoming riskier and riskier. The growing U.S. deficit and the ballooning of the Federal Reserve’s balance sheets leave many worried that in their wake will come inflation, undermining the long-term attractiveness of the U.S. currency.

In this article, I try to explain why the dollar is in trouble, but ask””should we care? What are the consequences?

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Ahmed Wali Karzai, the brother of the Afghan president and a suspected player in the country’s booming illegal opium trade, gets regular payments from the Central Intelligence Agency, and has for much of the past eight years, according to current and former American officials.

The agency pays Mr. Karzai for a variety of services, including helping to recruit an Afghan paramilitary force that operates at the C.I.A.’s direction in and around the southern city of Kandahar, Mr. Karzai’s home.

The financial ties and close working relationship between the intelligence agency and Mr. Karzai raise significant questions about America’s war strategy, which is currently under review at the White House.

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Yet the urgent problem now isn’t TBTF [too big to fail], or even banker bonuses. These are distractions. The urgent problem is the giant riverboat gamble that Washington can save the economy by doing what comes naturally””spending money carelessly, creating massive new entitlements without funding them, dishing out cheap credit to politically favored sectors, telling business people where and how to invest.

Mr. Feinberg is an apt symbol indeed, for this gamble is built on the conceit that Washington can hector the recipients, whether auto companies, banks or homeowners, into behaving in ways that are “responsible.” So far, however, human nature is proving a disappointment: Take the outbreak of tax fraud related to the government’s emergency home-buyer’s credit.

Nor is the larger gamble looking so good either. Banks continue to fail at an alarming rate, the dollar is under assault, and Washington is looking at a future of trillion-dollar deficits. One might have guessed it would take a decade of Obamanomics to produce European welfare state levels of youth unemployment, but at 18.5% we’re there.

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The White House has issued its strongest warning yet that President Karzai cannot count on continued US support if he fails to accept that Afghanistan’s fraudulent election has critically undermined his authority.

President Obama is more concerned at “whether there’s an Afghan partner” worth defending, than with the politically fraught question of how many more troops to send, said Rahm Emanuel, Mr Obama’s chief of staff and a central figure in White House deliberations on Afghanistan.

His rare public remarks today were echoed by comments from Senator John Kerry, who has flown to Kabul to join efforts to persuade Mr Karzai to accept a second round of voting or enter a power-sharing deal with his opponent, Dr Abdullah Abdullah.

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Whatever we may think, there are way too many Afghans who think our partner, Karzai and his team, are downright awful.

That is why it is not enough for us to simply dispatch more troops. If we are going to make a renewed commitment in Afghanistan, we have to visibly display to the Afghan people that we expect a different kind of governance from Karzai, or whoever rules, and refuse to proceed without it. It doesn’t have to be Switzerland, but it does have to be good enough ”” that is, a government Afghans are willing to live under. Without that, more troops will only delay a defeat.

I am not sure Washington fully understands just how much the Taliban-led insurgency is increasingly an insurrection against the behavior of the Karzai government ”” not against the religion or civilization of its international partners. And too many Afghan people now blame us for installing and maintaining this government.

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The Rev. Jeremiah Wright is long gone; Rick Warren, just an Inauguration Day memory. The hordes of ministers around town who were hoping they’d somehow wind up with the first family in their pews have (mostly) given up.

The president has been pastorless for quite a while now. Well, sort of.

Seventy miles from Washington’s prying eyes, Barack Obama has been attending church from time to time at Camp David, where services are led by a 39-year-old Navy chaplain with a famous last name, a compelling life story and a fervent belief in a God who works miracles.

Carey Cash, the great-nephew of singer Johnny Cash and the younger brother of a former Miss America, sees the hand of God in every part of his journey: from the football fields where he once aspired to the NFL to the medical facilities where he learned he’d never play again; from the battered Humvee where he came under fire on the streets of Baghdad to the tiny chapel where he preaches to the country’s commander in chief in the Western Maryland mountains.

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Check it out.

President Barack Obama and his family attended Sunday services at St. John’s Church, an Episcopal church on Lafayette Square just across the street from the White House.

Obama, first lady Michelle and daughters Sasha and Malia listened to a sermon about how Christianity has consequences.

Mike Angell, a seminarian of the church, told the parishioners that the consequences vary, whether it’s making a hard decision at work or deciding to give more time to God.

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Unfortunately, even if things are improving ”” and I prefer V for victory to W for worry ”” the fundamental cause of recent financial problems remains unaddressed. Low interest rates fuelled unsustainable debt. Those low rates were the result of China’s need to make money from the pile of dollars it earns from its exports. It did this by buying Treasury IOUs, keeping their price up and their rates down. China’s exports, in turn, were fuelled by its undervalued currency. That policy remains unchanged. So do trade imbalances. Which means the dollar probably has further to fall if imports to America are to become more expensive, and exports of American products more competitive.

There is no indication that the administration finds a dollar decline undesirable, if it is gradual, despite Geithner’s strong-dollar statement. It is the possibility of a dollar collapse that worries some at the White House. The same fear among investors has triggered a flight to gold. Such a development would force up interest rates, aborting the recovery. Obama has no desire to face the electorate in 2012 with high inflation and interest rates soaring, a real possibility if he adds to the downward pressure on the dollar by increasing the red ink already pouring over the nation’s ledgers, as frightened congressional Democrats are demanding.

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Yet this might just be where the president’s luck runs out. For precisely the power of his own party in Congress could prove to be a source of weakness rather than strength. On my most recent visit to Washington, I could not help being struck by the shift that has occurred from the imperial presidency of the Bush era to something like parliamentary government under Mr Obama. This president proposes; Congress disposes. It was Congress that wrote the stimulus bill and made sure it was stuffed full of political pork. It is Congress that will ensure the healthcare bill falls well short of being self-financing. Mr Obama recently snapped at an unnamed “Blue Dog” (conservative-leaning) House Democrat: “You’re going to destroy my presidency.” He could be right.

According to the polls, voters disapprove of Congress by 61 per cent to 31 per cent. What’s more, the two parties would be neck and neck if the midterm elections were held today. The reason is clear. While the stimulus package had a sound macroeconomic rationale, the growing structural imbalance between federal revenue and spending scares the hell out of voters. A recent USA Today/Gallup poll showed that 59 per cent of Americans think government spending is excessive. Mr Obama receives his lowest approval ratings for his handling of the federal budget deficit.

—Niall Ferguson, Laurence A. Tisch Professor of History at Harvard University and William Ziegler Professor at Harvard Business School

Excessive praise can be unwelcome and embarrassing. Just ask President Obama, who awoke Friday to discover that he had been awarded the Nobel Peace Prize before he had completed even a year in office. Obama managed to be both abashed and appreciative in his response, but no amount of self-effacing spin can obscure the oddity of this award.

For the president’s critics on the right, the Nobel feeds a narrative in which Obama is more interested in flattering foreigners than in defending U.S. interests. To those in his restive progressive base, it appears that the peacemaker’s mantle has been draped on the shoulders of a president who is presiding over two distant wars and who may soon send as many as 40,000 more troops to Afghanistan.

For our part, we’re fans of the president. We endorsed him for the job, and we greatly prefer him to his predecessor. But it’s difficult to see why he deserves the peace prize so soon after taking office. The Nobel committee didn’t just embarrass Obama, it diminished the credibility of the prize itself….

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I will take comments on this submitted by email only to at KSHarmon[at]mindspring[dot]com.

The dollar fell to a 14-month low against other currencies Thursday, intensifying a trend that the Obama administration has publicly suggested it opposes — but which it appears prepared to tolerate quietly.

Many of America’s trading partners, however, are pushing the other way. In Asia, traders said central banks in South Korea, Taiwan, the Philippines, Thailand, Indonesia and Hong Kong again intervened to slow the dollar’s fall against their currencies.

Asian officials fear that the dollar’s fall could crimp their export-driven economies. “The [Thai] baht has appreciated a little too rapidly compared with our fundamentals,” said Suchada Kirakul, assistant governor of the Bank of Thailand.

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Measured in euros (a more stable ruler than the ever-weakening dollar), U.S. real per capita GDP is down 25% since 2000, while Germany’s is up 4% and tops ours.

The solution is a strong U.S. jobs and wealth program. It has to include stable money, a flatter, more competitive tax structure, spending restraint, and common-sense bank regulation so small business lending can restart. Treasury has to rapidly lengthen the maturity of the national debt and take steps to protect the Fed from market losses on its long-term debt holdings.

Instead, Washington’s current economic program pushes capital away by weakening the dollar, threatening higher tax rates, borrowing short (the Fed’s near trillion-dollar overnight debt, Treasury’s mounds of bill and note issuance) to lend long (mortgages, student loans, entitlements), doubling down on government subsidies, and rechanneling bank loans to governments and big businesses instead of the small business job-growth engine.

Read it carefully and read it all.

The U.S. dollar continued its six-month slide Tuesday amid a growing international chorus that wants the dollar replaced — or at least supplemented — as the world’s reserve currency, a move that would end the greenback’s six decades of global dominance.

The dollar has come under attack from abroad as the economic crisis has played out, thanks to the Federal Reserve’s decision to flood a seized-up financial system with liquidity last fall. The central bank’s moves likely staved off deflation, but the massive influx of new dollars has devalued existing ones. Foreign nations are worried that the massive U.S. national debt and rising deficits are not being addressed. And though inflation is not yet a concern in the United States, a prolonged slide in the dollar’s value could lead to higher prices for consumers.

Further, large emerging economies — such as China, Russia, Brazil and India — are tired of kow-towing to the American buck, and sense an opportunity to knock a weakened dollar off its imperial perch.

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The sharp fall in the US dollar is giving ammunition to the critics of the Obama administration and fuelling broader concerns about the erosion of America’s reserve currency status.

Republican politicians have highlighted the dollar’s slide as evidence of waning US power. On Wednesday, Sarah Palin, the Republican former vice-presidential candidate, added her voice to those who have expressed concern over the consequences of rising US indebtedness and dependence on foreign oil.

“We can see the effect of this in the price of gold, which hit a record high today in response to fears about the weakened dollar,” she wrote on her Facebook site.

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President Obama told Congressional leaders on Tuesday that he would not substantially reduce American forces in Afghanistan or shift the mission to just hunting terrorists there, but he indicated that he remained undecided about the major troop buildup proposed by his commanding general.

Meeting with leaders from both parties at the White House, Mr. Obama seemed to be searching for some sort of middle ground, saying he wanted to “dispense with the straw man argument that this is about either doubling down or leaving Afghanistan,” as White House officials later described his remarks.

But as the war approached its eight-year anniversary on Wednesday, the session underscored the perilous crosscurrents awaiting Mr. Obama. While some Democrats said they would support whatever he decided, others challenged him about sending more troops. And Republicans pressed him to order the escalation without delay, leading to a pointed exchange between the president and Senator John McCain of Arizona, his Republican opponent from last year’s election.

Mr. McCain told the president that “time is not on our side.” He added, “This should not be a leisurely process,” according to several people in the room.

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The idea of a tax credit for companies that create new jobs, something the federal government has not tried since the 1970s, is gaining support among economists and Washington officials grappling with the highest unemployment in a generation.

The proposal has some bipartisan appeal among politicians eager both to help their unemployed constituents and to encourage small-business development. Legislators on Capitol Hill and President Obama’s economic team have been quietly researching the policy for several weeks.

“There is a lot of traction for this kind of idea,” said Representative Eric Cantor of Virginia, the Republican whip. “If the White House will take the lead on this, I’m fairly positive it would be welcomed in a bipartisan fashion.”

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With unemployment expected to rise well into next year even as the economy slowly recovers, the Obama administration and Democratic leaders in Congress are discussing extending several safety net programs as well as proposing new tax incentives for businesses to renew hiring.

President Obama’s economic team discussed a wide range of ideas at a meeting on Monday, following his Saturday radio address in which he said it would “explore additional options to promote job creation.” But officials emphasized that a decision was still far off and that in any event the effort would not add up to a second economic stimulus package, only an extension of the first.

“We’re thinking through all additional potential strategies for accelerating job creation,” said Mr. Obama’s senior adviser, David Axelrod.

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With the Senate Finance Committee set to approve its health care bill this week, Democrats are tantalizingly close to bringing legislation that would make sweeping changes in the nation’s health care system to the floor of both houses of Congress.

Party leaders still face immense political and policy challenges as they combine rival proposals ”” two bills in the Senate and three in the House. But the broad contours of the legislation are in place: millions of uninsured Americans would get subsidized health benefits, and the government would move to slow the growth of health spending.

Senior Democrats said they were increasingly confident that a bill would pass this year. “I am Scandinavian, and we don’t like to overstate anything,” said Senator Kent Conrad, Democrat of North Dakota and an architect of the Finance Committee bill. “But I have a solid feeling about the direction of events.”

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First, consumer indebtedness is still too high relative to income expectations and credit availability, particularly in the US and the UK. This inconsistency will hold back any sustainable bounce in the most important component of aggregate demand.

Second, some banks’ balance sheets are still too geared for the comfort of regulators or their own managers. This will inhibit them from lending to the real economy at a time when certain sectors (such as commercial real estate, but also residential housing) still require significant refinancing, and when consumers need time to work down their excessive debt loads.

Third, unemployment has risen well beyond expectations, and is likely to prove unusually protracted. It will take years for US unemployment to return to its natural rate, even after the natural rate shifted upwards. This will dampen the recovery of consumption and investment, stress social contracts that assume flexible labour markets, and endanger political support for essential structural reforms.

Finally, public debt has grown so rapidly as to spark concerns about future debt dynamics….

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Perhaps no other issue Congress deals with touches every American as intimately as health care. Yet a new poll by NPR, the Kaiser Family Foundation, and the Harvard School of Public Health finds that, so far, the public feels profoundly shut out of the current health overhaul debate.

“Most people don’t feel that they personally have a voice in this debate,” said Mollyann Brodie, director of public opinion and survey research for the Kaiser Family Foundation. “In fact, 71 percent told us that Congress was paying too little attention to what people like them were saying.”

Nancy Turtenwald is one of those people. The tourist from Milwaukee was walking around the sparkling new visitor center at the U.S. Capitol Tuesday. She was quick to agree with poll findings that the lawmakers debating the massive health overhaul bill just a few blocks away weren’t much interested in problems like hers.

“I don’t think they are people like us, you know?” she said. She thinks Congressional lawmakers know very little about the daily lives of the average American ”” and the health care costs they face. “How often do they go and buy gas and bread and stuff to see what it’s really like for the people like us?”

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As if it were not complicated enough, the debate over health care in Congress is becoming a battlefield in the fight over abortion.

Abortion opponents in both the House and the Senate are seeking to block the millions of middle- and lower-income people who might receive federal insurance subsidies to help them buy health coverage from using the money on plans that cover abortion. And the abortion opponents are getting enough support from moderate Democrats that both sides say the outcome is too close to call. Opponents of abortion cite as precedent a 30-year-old ban on the use of taxpayer money to pay for elective abortions.

Abortion-rights supporters say such a restriction would all but eliminate from the marketplace private plans that cover the procedure, pushing women who have such coverage to give it up. Nearly half of those with employer-sponsored health plans now have policies that cover abortion, according to a study by the Kaiser Family Foundation.

The question looms as a test of President Obama’s campaign pledge to support abortion rights but seek middle ground with those who do not. Mr. Obama has promised for months that the health care overhaul would not provide federal money to pay for elective abortions, but White House officials have declined to spell out what he means.

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If Mr Obama does shift his stance in Afghanistan, history may record that the clinching factor was last month’s fraud-riddled presidential election there. The White House appears to have found this especially rattling when set alongside General McChrystal’s report. For the general’s chief conclusion is that success in Afghanistan does not depend on killing more Taliban fighters. It depends on winning the confidence of Afghans who have been alienated by widespread corruption under President Hamid Karzai and have little reason to support their own government. “A foreign army alone cannot beat an insurgency,” is the general’s conclusion. However certain Mr Obama is that this is the right war, he cannot be sanguine about sending ever more soldiers to prop up an incompetent government that has lost its legitimacy. Mr Obama’s main ambition in life is to transform America at home. The last thing he needs is a Vietnam.

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More troops and resources are needed in Afghanistan to avoid failure, the top U.S. commander in Afghanistan, Gen. Stanley McChrystal, writes in a confidential report being reviewed by the Obama administration.

Officials had been describing parts of the 66-page assessment in recent days, but the full document ”” leaked to The Washington Post ”” is a grimmer-than-expected cataloguing of the challenges facing the United States and NATO in Afghanistan as the Taliban grows more sophisticated and dangerous.

Here’s a look at what the report says, the early reaction to its findings, and what it means for the U.S. effort in Afghanistan:

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President Barack Obama said tougher financial regulations are needed worldwide to protect consumers, provide economic stability and prevent future crises.

With the leaders from the Group of 20 nations set to meet next week in Pittsburgh, Obama said in his weekly address on the radio and Internet that international cooperation has “stopped our economic freefall.”

“We know we still have a lot to do, in conjunction with nations around the world, to strengthen the rules governing financial markets and ensure that we never again find ourselves in the precarious situation we found ourselves in just one year ago,” Obama said.

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It was supposed to be the week President Barack Obama saved the world. More than 100 heads of state are preparing to descend on New York for talks on halting climate change, promoting nuclear disarmament, defeating terrorism in Pakistan and tackling poverty in sub-Saharan Africa ”” all before a G20 meeting in Pittsburgh on Friday aimed at reaching agreements on global financial regulation and curbing bankers’ bonuses.

The headline-grabber was expected to be the relaunch of the stalled Middle East peace process, to be followed a week later by America’s first direct talks with Iran since the Islamic revolution in 1979.

Instead, attempts to revive talks between Israelis and Palestinians, the cornerstone of the administration’s foreign policy, have failed so far. Western diplomats say it will take all the president’s considerable charisma to revive them.

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Claiming that the opposition is “bearing false witness” by spreading misinformation about his health-care plan, President Barack Obama has asked religious leaders to become the latest conscripts in the battle over health-care reform. And although each version of the proposed health-care bill so far has explicitly authorized the government plan to cover the cost of abortion, many Catholic leaders and organizations have joined up, pledging their support.

For faithful Catholics, it is discouraging to see that Catholic Charities USA and the Catholic Health Association have both embraced the plan. And it is even more discouraging to learn that some parish priests and bishops are leading the fight for it. While Cardinal Justin Rigali, chairman of the U.S. Conference of Catholic Bishops’ Committee for Pro-Life Activities, has urged lawmakers to block the current House legislation unless it can be amended to prohibit public financing for abortion, his is a lonely voice. In a commentary posted on the Web site of the San Bernardino Diocese in California, Bishop Gerald Barnes denigrated those who have participated in what he called the “anger-fueled conduct” at town meetings and directed followers to the Bishops’ Web site to learn about Catholics’ moral obligation to help others gain access to quality health care.

The Web site advises Catholics to “join the efforts of local groups funded by the Catholic Campaign for Human Development.” As it happens, the Catholic Campaign has been involved in funding left-leaning organizations and activities from its earliest years….

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Why did Obama change the plan?

In his announcement, the president gave two reasons for the change in policy:

First, the latest intelligence indicates that Iran is concentrating on short- and medium-range missiles rather than long-range missiles.

Second, technological advances in land- and sea-based interceptors and sensors mean they can now be more effective in defending Europe. Obama also said the new approach, using advanced versions of the SM-3 ship-based missile being developed for use by the U.S. Navy, will be more cost-effective and offer the military more flexibility.

For the next two years, the United States will deploy the sea-based Aegis weapon system, the SM-3 interceptor and sensors such as the Army Navy/Transportable Radar Surveillance system to monitor threats, the White House said. More advanced systems will come later.

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Nearly a week after Congressman Joe Wilson (R-SC) interrupted President Obama’s speech on health care, Congress passed a resolution admonishing him. He’s the first member in the history of Congress to be formally chastised in a resolution for such actions.

At first, Democratic leaders such as House Speaker Nancy Pelosi didn’t seem too interested in going after him for shouting “You lie!” when the president insisted that health care subsidies would not be available to illegal immigrants under the health care overhaul bill.

“As far as I’m concerned, the episode was unfortunate, and Mr. Wilson has apologized. It’s time for us to talk about health care and not Mr. Wilson,” Pelosi said.

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I will take comments on this submitted by email only to at KSHarmon[at]mindspring[dot]com.