Mysteries of financial risk, plus: House on fire

The idea floating around (one version proposed by McCain) that the government should buy up "troubled" mortgages is as misguided notion as they come. "Troubled" itself is hard to define. Is it determined by the borrowers' difficulties in making loan payments? Or by loan default? Or is it just a mortgage "under water," valued at more than the house it's attached to? "Troubled" should be limited to, at most, the first two cases.

The housing crisis -- or rather, the house financing crisis -- will have, not one, but many endings, covering a range of possibilities:

• Borrowers paying reliably on mortgages "under water"
• Borrowers with payment difficulties who renegotiate their loans (lower interest rate)
• Borrowers in default who might renegotiate or just move out, to rentals
• Borrowers in foreclosure who must move out, or stay and rent with option to buy

At this point, the last category is small, a little over a percent of mortgages. The range of options is enough to make simply throwing people out on the street an unnecessarily harsh choice. Banks and lenders will not want to sit on unoccupied, non-income-generating property in any case. Both lenders and borrowers will unavoidably take some losses along the way.

Except for directly intervening with borrowers with Fannie and Freddie loans, it's hard to see what role government should take here, except to act as a catalyst. Government should certainly not be engaged in perpetuating the housing bubble; for example, in trying to prop up house prices or encouraging any more subprime lending. If it does anything for the housing market, it should be terminating the ingredients that went into the bubble in the first place.

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The general financial crisis, centered in the credit markets and impacting others (like the stock market), was certainly triggered by the weakness in the subprime mortgage market and exacerbated by falling house prices across the board. But the financial system, as evolved over the last thirty years, has developed intrinsic weaknesses of its own that falling house prices merely exposed. Those dangers are embodied in excessive debt and rationalized in turn by faulty theories about controlling risk.

Many of the supposed culprits -- mortgage bonds and "derivative" securities (essentially, complex, composite repackagings of existing securities); the non-existent "deregulation" of Wall Street; and the alleged merging of investment and commercial banking -- are bogus. These supposed factors are either not real or not capable of producing an unforeseeable credit crisis of this magnitude.

Over the last generation or so, the financial world, American and non-American, the regulated and the regulators, has developed an unhealthy and misplaced confidence in its ability to quantify and manage risk. The crisis we see unfolding now has nothing in the slightest to do with "fraud" or malfeasance on any individual's part.* Traditional regulation is designed to deter and punish such misbehavior, which is multiply times over illegal anyway. A crisis of this type is a result of collective misjudgment and collectively-held false ideas about risk, mixed with a certain level of hubris.

Viewed this way, our present financial troubles start to look less like a crime caper and more like the failure of a complex technological system, like the explosion of the space shuttle Challenger or the sinking of the Titanic. Megan McArdle had an interesting post on this point a while back.

To follow Megan, it's especially enlightening to compare the failure of financial risk management with the Challenger explosion, on which topic she recounts the story in Richard Feynman's famous What Do You Care What Other People Think? and captured in detail in Feynman's appendix to the Rogers Commission report. The key comparison: the different ways that different people interpreted "small" risks. Based on decades of prior experience with rockets, the engineers knew in their bones that the "small" risk of a fatal shuttle accident was about one in a 100. (And we know now, with over 25 years of shuttle experience, that they were right.) But they couldn't articulate and defend their point of view in the face of managerial and political figures, whose notion of "small" was more like one in a 100,000 or one in a 1,000,000. Each near-fatal incident, instead of being interpreted correctly as a warning, was instead rosily misinterpreted as "great, we survived another close one" and falsely built up NASA's confidence.

That difference -- "small" as one in a 100 or one in a 1000, versus "small" as one in a million or ten million -- is precisely the difference between the "wild" and the "mild" in risk, "Extremistan" versus "Medocristan." Readers of previous posts on finance and statistics will know of Nassim Nicholas Taleb's The Black Swan and all about such misperception of risk. A one-in-a-hundred incident is something likely to happen more than once in a person's lifetime. A one-in-a-million or ten-million incident is unlikely to happen in anyone's.

It makes the crucial difference to social systems created and run by humans. All of us, especially the college-trained, are prone to the Tyranny of the Cookbook, falsely believing that some answer is better than no answer, even if that answer is wrong. Much of the financial world still wrongly assumes the mild risk of Medocristan and rationalizes the powerful evidence to the contrary by handwaving.
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* It has even less to do with "corruption," something outside of Wall Street's power, since that requires the granting of political favors. You have to look to K Street (in Washington) for that.

Lucky you

After seven years, full resolution remains open on the question of how to deal with al Qa'eda terrorists: ordinary criminals, prisoners of war, or something else? The Bush administration's improvised approach, based on the unprecedented situation, was one of administrative detention, modified by court rulings and Congress' 2005 action on military tribunals.

Many of the Bush administration critics can't be taken seriously. They seem to think government's job is hairsplitting rather than protecting the public at large. Government is elected to do nothing else.

The situation actually is unprecedented, at least for the US. Terrorist groups are not state armies and thus not protected by the Geneva Convention. OTOH, they act as enemies of American society and not just criminals. They're private armies in all but name. No existing body of law comprehensively reflects this fact.

The central problem with the Bush policy is not that it is a "torture policy," but rather, no policy at all. Improvised from the start by wide-ranging executive discretion, the Bush non-policy was shaped by Cheney's obsession with executive privilege and secrecy and threatens to vanish when he leaves office. Only a new legal structure, qualified and honed by court precedent, can last.

This is one of the basic points of Jack Goldsmith's The Terror Presidency. His title reflects the new reality that every president from now on will have to respond to. Goldsmith served as legal counsel to the Bush administration and found much of its improvisation in this department seriously flawed. His points of comparison are the reactions of FDR and Lincoln in roughly analogous situations. But he also convincingly shows the dereliction of Congress, which increasingly seems silly and irrelevant. Its lack of involvement is the big black hole of this issue. Today it spends most of its energy on attacking Bush when convenient and otherwise ducking its responsibilities.

Goldsmith's points are underscored and given deeper resonance by Benjamin Wittes' recent fine book, Law and the Long War. Even more than in Goldsmith's book, Congress is the main target of Wittes' contempt.

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The larger situation is worth a long look. Dealing with private armies is, for us, a new kind of war. Many of the misgivings that people feel about this conflict stems ultimately from the nature of the Middle Eastern and Muslim governments who make up some of our most crucial allies. All of them are dysfunctional and corrupt, frequently oppressive and mostly autocratic. Most of them routinely use torture and treat accused terrorists outside of any regular legal process.

Such facts make policies like "rendition" all but inevitable. It is certainly in no way a new policy. The first rendition occurred under the Reagan administration, and the Clinton years saw over a hundred. There's no way to cooperate with these regimes and get their cooperation for our purposes without it. To ask for something else would mean having to reconsider our whole alliance and cooperation with these regimes from scratch. Talk otherwise is fantasy.

We have democratic allies with experience in this area. We can start by studying them: Britain, France, Israel. The French system is all-civilian but tough (tougher than the American in many ways), but requires the highly centralized and unitary state of France. The British and Israeli experience is more relevant to our own, because of their mixed and divided systems of government. They feature military capture and interrogation on the "front end" and civilian review and closure on the "back end." That is what the American system is stumbling towards. But it needs real Congressional supervision, not hot air and grandstanding.

DISTURBING POSTSCRIPT: Have you noticed a repeated theme here and elsewhere? It's the irrelevance of Congress. Over at Volokh Conspiracy, Todd Zywicki has a thoughtful and disturbing post on this topic. Are we turning into a bureaucratic dictatorship, where we get to vote on the dictator every four years?

Of course, the fact that the present Congress is the most non-productive in modern history is perhaps a blessing. No one's aching to see them turn their attention to anything serious, as they'll just further screw it up.

POST-POSTSCRIPT: Speaking of torture, McCain's former captors in Vietnam admire him and want him as US president -- seriously! Of course, it's been a while since that nasty and strange war ended. In the meantime, the US has normalized relations with Vietnam (thanks, in part, to McCain and other Vietnam vets) and has spent over a decade expanding military cooperation, in an effort to offset China's rising power. Why, the US Navy is even back in Cam Ranh Bay :)

In politics, it really is better to be respected than loved.

None of the above

It's been a significant trend that has frustrated Republican efforts to become the majority party: since the late 90s, a significant number of voters who used to vote Republican for fiscal and/or national security reasons have become turned off. Some of them (at least in 2004 and 2006) voted Democratic. But most are abstaining from voting for any major-party candidate in general elections. Discrepancies in vote tallies in 2000 and 2004 between congressional and presidential votes seem to reflect this, as did the Ron Paul candidacy. Whether McCain can overcome this trend in 2008 remains to be seen.

But this year, I'm detecting something similar happening to Democrats. (See here and here, for example.) Obama's failure to win a majority of the Democratic primary vote has set the Democrats up for trouble. Some of these voters will vote for McCain; others will just abstain. The 2008 general election will thus feature two growing blocs of the disaffected, adding a multidimensional wild card to the outcome.

Are you experienced?

PRE-POSTSCRIPT: Oh, and how could I forget Juno? The movie's director talks here about life imitating art imitating life imitating art ....
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One of the most remarkable things about American society today is how long it takes the average middle or upper-middle class person to mature into adulthood.

I was comparing notes with a friend about Obama and Palin versus JFK at the same point in his life, and several large facts struck both of us. When JFK ran for president in 1960, he had been in Congress for 14 years and had served in the Navy four years before that, a total of 18 years of public service. Obama is frequently compared to JFK, but honestly, there is no comparison: Obama is man of manifest talent and no achievement. Only the media's relentless promotion of him has obscured this and the fact that he's lost without coaching and teleprompter. He's the perfect icon for the entitlement mentality. Even Palin, limited as her political career has been, has more on her resumé.

Part of the explanation is that everyone's living longer today and the Boomers and their immediate predecessors, the Depression-war babies, fill and will remain in positions of importance for many years to come. That means advancement for anyone under, say, 50 is harder than it was in JFK's day.

But today's American society, and the Western world in general, is also set up to make adulthood harder than it once was. Adolescence was once a prologue to adulthood. Today, adulthood is a prolongation of adolescence.

.... But not for Bristol Palin, obviously eager to jump into adulthood a little too early. An object lesson for the way we infantilize, not only adults, but late teens on the verge of adulthood. What they need is, not infantilization, but as much responsibility as they can handle, along with a little adult supervision. Without adult responsibility handed to them, the pluckier and more risk-tolerant will seek it out themselves, whether they know what they're getting into or not.

POSTSCRIPT: Bless her heart, Megan McArdle has two very sensible postings (here and here) about the women of the Palin household. (I count Bristol as an adult.)

Shaken up

And I mean in a good way -- congratulations to Alaska governor Sarah Palin on being tapped as McCain's VP nominee. I didn't think John-John had it in him: he's hit not just a home run, but a home run out of the park.

We've been out of the political loop here at Kavanna for the last month or so, busy with many of life's pressing things. I've been meaning to blog for some time on the changing dynamics of American politics and what's gone wrong with the Republican party, and I will soon. (See here for my earlier thoughts.)

Suffice it for now to say that, with Palin on the ticket and the credibility she brings on the "shrink-bloated-corrupt-big-government" front, McCain has now massively confirmed his earlier, tentative push to break the Republicans out of their self-imposed ghetto. They spent ten years building a prison for themselves out of partisan hysteria and attempts to awe and buy off voters with ever more lavish activist big government. But they found instead that they had only alienated larger and larger swaths of the electorate. Except for 2002, it's placed a steepening cost on them in every election since 1998 and now threatens the party's and country's future.

McCain has his core domestic theme down: run against Congress, and don't be partisan about it. The era of Bush, Rove, and braindead loyalty is thankfully over.

Not bad for a guy with an enlarged prostate :)

POSTSCRIPT: Sissy Willis is also happy: "It's a girl!" No confirmation yet on the HRC suicide watch! ;-D

POST-POSTSCRIPT: And progress on closing the "supermodel gap"?

Is the GOP kaput?

Yes and no.

Looking at it from just this year's election perspective, we can see two seemingly contradictory trends. One is in the presidential race, where McCain has a moderate but distinctive advantage, even against Hillary Clinton, the stronger of the two remaining Democratic contenders. The other is in the Congressional elections, where the Republicans are still in real trouble, as much trouble as they were in back in 2006.

The root of the trouble remains what is was then: no political party has so swiftly abandoned what it purported to represent after achieving such dominance. This development certainly alienated the conservative base, a trend already visible as far back as the 1998 elections. But the party's fecklessness with regard to spending and reorientation towards big guvmint has also alienated right-leaning independent voters and conservative Democrats. Even without being conservative purists, they find less and less reason to vote Republican. It's hard to find a comparable example of a party squandering its natural advantages so completely, so quickly.

It may be past time for what remains of the conservative movement to abandon the baggage of traditional conservatism. It once had a reason and a role. But it's becoming clearer every day that the rhetoric of traditional Anglo-American conservatism - appealing to traditional moral and political authority, patriotism, and religion, while opposing the growth of government - is incoherent, at least under modern conditions.

It leads to weird paradoxes, like the revival of respect for governmental and presidential authority under Reagan, who was opposed to the ambitions and pretensions of modern government; or the abuse of governmental authority by Bush, even while he still uses the rhetoric of conservatism. The ultimate upshot is that such a contradiction has to be solved and has been, by moving in a Nixonian direction - traditional authority, patriotism, and morality tied to massive growth of government. The parallel move of conservative and moderate Democrats to the Republican party means the party has a whole new constituency to serve and a new type of right-leaning populist politician. The most striking sign is the rise of Mike Huckabee, the Christian minister and nanny-statist, who came in second overall in the Republican primaries. Such a politician would have been unthinkable in the GOP even as recently as 15 years ago.

A new sort of coalition is needed, perhaps taking a page from "liberal" parties in other countries, using "liberal" for once in its real meaning: smaller government, market-oriented, and individualist - without the traditionalist, moralistic, and populist baggage. The pieces of such a coalition are at hand. But we don't yet have politicians to lead it. Voters thinking that Obama fits the bill are deluding themselves. He's the most left-leaning presidential candidate in American history, although he lacks much political definition. His politics are a throwback. Even Hillary Clinton, as left as she is, is not such an antique. From the present wreckage of the GOP, such a beginning can be made by liberal Republicans and center-right independents. But it will take a lot more to regroup and reassert the limited government message. (May 29)

POSTSCRIPT: Kimberley Strassel has made a similar argument over at the Wall Street Journal: McCain needs to run against Congress. It's not just that it's controlled right now by the Democrats and has the lowest poll ratings ever recorded. The Congressional Republicans need the wake-up call as well. McCain has contributed in his own way to the present debacle, above all with the ridiculous and unconstitutional McCain-Feingold political speech and finance restrictions.* But he does have significant credibility on spending and not falling into the braindead partisan lockstep that led to the Republican losses in 2006. (May 30)

POST-POSTSCRIPT: Jon Henke of the fascinating Web site, The Next Right, concludes about the Republicans in a way very similar to my distinction among liberal, conservative, and big-government-populist (miracles not math!) Republicans. He correctly points to the rise and fall of the third group, the marginalization of the second, and the surprise resurgence of the first. Henke's been guest-blogging over at Megan McArdle's joint. Maybe someone out there is paying attention to me, and I'm not just bloviating into the silence of cyberspace :) (June 1)
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* Ironically, McCain himself has opted out of public campaign financing, because of its onerous restrictions.

Your Congress at work...

... with your hard-earned tax dollars: the revolting farm bill already passed in the House and now making its way through the Senate, appropriating $300 billion for, for example, those ridiculous ethanol subsidies - you remember those from yesterday, no? But it's also for outright corruption, like paying farm price supports to people who happen to own arable land, don't farm it, and live somewhere else. And remember the evils of corn syrup? This bill adds to domestic sugar subsidies: so watch your food prices go up.

Although Bush's motives are suspect - he failed to veto a single spending bill when the Republicans controlled Congress - he will apparently do the right thing and veto this monstrosity, even though many congressional Republicans are supporting it. It will probably pass with a veto-proof majority in the Senate, as it did in the House. Perhaps Congress can be shamed into not overriding Bush's veto, but don't count on it.

The DC Examiner excoriates the bill here, and the Washington Post casts its skeptical eye. And don't miss these charming little items.

It makes McCain's upcoming campaign easier, though. As we pointed out earlier this year, he merely needs to run against Congress. Oh yeah, McCain needs to vote against this thing too, and he did. Clinton and Obama did not.

Running on empty, part two

In contrast to previous years' campaigns, the early primaries and caucuses this year mean that we'll know very soon - in principle, at least! - who the candidates will be. What everyone will do between March and August is then anyone's guess. The Republican nominee is virtually certain now, so we'll take a look at the other side.

In spite of Hillary Clinton's early-on air of "inevitability," the Democratic discontent with seeing the Clintons return to the White House (especially given the fact that almost everyone around Clinton is a retread) proved potent. Obama has ridden his balloon upward on this discontent, to the point of seeing the nomination within reach. There's a lot of unhappiness all around at seeing American politics turn dynastic, with Bush, then Clinton, then Bush, then ... wait, stop! :)

The problem is that Obama, while he's played a smart game for several months, has been pushed too far, too fast. He's one of the most underqualified presidential candidates ever, and the air is starting to rush out of his balloon as everyone takes a closer look at his past and at his associates. After seven years of liberals and others complaining about Bush being too provincial and too much of a lightweight - complaints not without foundation - we have now the spectacle of the Democratic field being reduced early on to the two least qualified candidates, with both of them then turning to an ugly identity-politics brawl and interest-group panderfest.

Their recent exchange about leaving the NAFTA trade agreement drew swift responses from the Canadian and Mexican embassies. Embarrassingly, the Obama campaign reassured both that the rhetoric was strictly for the rubes, then publicly denied making such reassurances - leaving us to wonder just who the rubes are. Nothing like alienating allies, friends, and treaty partners! There's much stronger evidence that the Obama campaign routinely bends or breaks the truth routinely in many matters, not just this one. It's not because Obama is some evil conniver; it's because he's in way over his head. Even the shallow end of the pool isn't shallow enough for Obama, his campaign, and his followers. This is why many people are reminded, not only of George W., but of Carter and other "pure" candidates making vacuous promises of "change." Such candidates are largely a function of the hopes and ambitions that people around them project on to them - they lack, and have not had the time or circumstances to define, their own political identity.

So what about tomorrow? If Obama wins everything, he's the nominee. If Hillary wins one or more of the big states (which is likely), the convention will be brokered. At this point, the superdelegates' role will be pivotal regardless of what happens tomorrow. And that will result in an unavoidable uproar over how "democratic" the Democrats are. Neither candidate is really qualified to be president. Clinton is somewhat more viable, has run strong in the large swing states, and has a better shot at defeating McCain in November. Obama would have far less chance. If Hillary does get the nomination, she will end up fighting for it - it won't be the walk-in-the-park coronation she and her supporters were expecting.

And hopefully, this fiasco will leave the mainstream media's credibility more shredded than ever. They've obsessively peddled "narrative" (meaning credulous BS) over fact for months now, in order to get Obama the nomination. Want to see how and how much our addiction to the news media and television damages our politics? Just watch it - it's happening right in front of you.

POSTSCRIPT: Over at the Volokh Conspiracy, check out this interesting discussion on Obama and the Jewish vote. Early on, it became clear that, contrary to some nasty rumors floating around the Internet, Obama is not personally threatening to American Jews or Israel. American Jews do have legitimate larger concerns about Obama's wide-eyed inexperience and parochialism and especially some of the people around him - but so does everyone else. It's just that Jewish anxiety is different from all other anxieties and gets focused early. The evidence is that the American Jewish vote (which is about 2:1 Democratic) is largely going for Clinton.

And don't miss these thoughts from Michael Totten on Obama and the Middle East, particularly on why Obama alarms a lot of foreigners. My own experience with foreigners closely matches Totten's observations. One of Totten's guest bloggers is Lee Smith, who has this. It should be read by everyone who thinks that the American way of dealing with religion is the rest of the world's - it isn't.

So it seems

If it's just a question of the mere appearance of impropriety, shouldn't our candidates be above even the suspicion of the appearance of wrongdoing? Or is the New York Times just blowing smoke up someone's ... well, you know :)

Michael Kinsley explains.

I am vast and right-wing, hear me roar

PRE-POSTSCRIPT: Megan McArdle does it again: finally, an explanation for our campaigns.
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The agony and the ... well, no ecstasy yet. Conservatives are in a funk about McCain winning the Republican primaries and the smooth walk he apparently has ahead of him to the Republican nomination. Conservatives deserve a Valentine. So here's a belated one.

How did he do it? Independents, my dear. They can vote in most primaries, and they've recently been the fastest-growing group in American politics. McCain plays well among them. Conservatives are in conniptions, and rightly so, about some of McCain's politics - his support for restrictions on campaign donations and speech (which are unconstitutional, shut out challengers, and have done serious damage to our politics), and above all, his questionable views on illegal immigration, which, for state and local governments, has become a major welfare-state crisis that national politicians, who set the policies or lack thereof, pay no price for.

McCain, like Romney and Giuliani, is a liberal Republican. (Romney spent a lot of time and money unconvincingly presenting himself as a conservative - which is too bad, because he would have done himself and everyone else a favor by just being himself.) Liberal Republicans are the smallest of the three factions of the Republican party (liberals, conservatives, and populists). But they are critical: they are the closest to the center of gravity of American politics, somewhat to the right of center. They do not share conservatives' fatal ambivalence about modern government, but they are also free of faith-driven big-government populism - you know, where miracles are more important than math.

Conservatives should not have been surprised by this. While waiting in vain for a viable conservative Presidential candidate this year, many conservatives are still mentally stuck in the 90s. Conservatism lives on as an ideology, as an intellectual movement, and as an attitude. But as a politics, it's been dead for almost a decade. Conservatives who thought there would be a conservative comeback this year were always deluded. Conservatism didn't die a natural death, of course. It was shunted aside, by the Republican party - it was in the way. The irony is that, the Republicans would be in far better shape now if they had stuck consistently to their earlier conservatism. Like Nixonism, the Bush-Rove-ism approach was too clever by half.

So conservatives are going through separation trauma. They once had enough confidence in themselves that, in the late 70s and the 80s, they were able to take over the Republican party. But the last 13 years have not been kind to them: the Republicans lost their ideological moorings. Conservatives overidentified with the party, which became less and less conservative while becoming more and more partisan. Now conservatives have to go back to where they were in the 1950s and 1960s: they need to disentangle themselves from the Republican party and revisit the basics. They can start by mending fences with libertarians. And they need to figure out what they have in common with the "good government" liberal Republicans. (Hint: nowadays, "good government" usually means "smaller government.") For electoral politics, they need to face what I wrote here last year:

Once Bush & Co. are gone, it will be springtime for Republicans, who are more likely than not to retake the Senate in 2008. But it will not be a new conservative era: the 20-year era of conservative ideological dominance, from the late 70s to the late 90s, will probably not return in our lifetimes. Everyone now loves big government ....

Will the liberal Republicans ride to the rescue? Maybe. Liberal Republicans like politics and don't suffer from the conservatives' fatal ambivalence about being in charge of modern government. And unlike Bush, they value competence above machine politics and loyalty. They also lack Bush's faith-based, blindfolded, trust-walk style, and are not tainted with [it]. Although liberal Republicans are the smallest faction of the Republican party, they sit the closest to the center of gravity of American politics - unlike the conservatives or the Bush fraternity house .... the future of the Republican party, if it belongs to anyone, belongs to them.

Conservatives need to grasp that the game this year is, not pick a viable conservative candidate, but pick an acceptable liberal Republican. Now the primary voters have done that for them and picked McCain. If conservatives don't like the result, they should have been stronger in the primaries for Romney or Giuliani. Instead they were twiddling around with Ron Paul or Fred Thompson.

Conservatives also need to rebuild at the state and Congressional level. They have always had a strong tendency towards ghettoizing their issues as "ideology." They need instead to do what conservatives before the mid-70s did, anticipate and understand what the big governmental crises are going to be, and then be ready when those crises appear. (Back then, they were out-of-control expectations, the post-1965 explosion of federal spending, stagflation, the dead-end of détente; today, they include the coming entitlements crisis, illegal immigration, the possible break-up of the Western alliance system, the rise of the "oil" axis). Conservatives need to disconnect completely from the conventional television media and encourage everyone else to do the same. The news media will do its utmost to obscure important issues and change the subject. Instead of arguing with them, everyone should be ignoring them. If voters do, then the politicians will eventually get it. Those who don't get it, will find themselves less and less relevant.

There is real upside for the Republicans: the cards are still stacked in their favor this year. Bush and Cheney are out of the picture. The negative referendum on them already happened, in 2006. As a proportion of voters, self-described liberals are still shrinking. The Congressional Democrats' poll ratings have been crawling on the bottom since they took over 13 months ago (teens or single-digits) and consistently well below Bush's. If the Republicans are smart, they'll run against Congress. The 2008 presidential race is the Republicans' to lose. The interesting question is whether they have a chance to regain one of the houses of Congress as well.

POSTSCRIPT: Speaking of which - is it all over for Hillary? Peggy Noonan considers. My answer is, obviously not. She's won most of the big states and will probably win Texas and Ohio. The Democratic race is far from over. And given the Democrats' weird superdelegate rules, we may end up with an old-fashioned brokered convention. Of course, it won't be totally old-fashioned: the back rooms will have women as well as men, and they'll be free of smoke.