Consider the set back DADT posed to the Clinton Administration, and how it compromised health care reform.  I’m sure Rahmbo has. Despite an evolution on DADT in the public mind, moving the issue to the forefront will undermine Obama’s efforts to extend affordable health care to all Americans.

I submit that more gays are harmed by the lack of health insurance than by DADT.  And more gays are harmed by the global financial crisis than DADT.  These are broad American problems that are too important to allow distractions from any narrow activista interest group.

You can’t expect smart progressives to take up polarizing fights on issues effecting a small subset of Americans at the expense of possibly losing political wars of paramount national importance. Be patient.

Brian, it’s still early in the Obama presidency.  Don’t get angry yet.  There will be time to hold him accountable.  Timing is everything.   Imagine you’re a senior White House advisor.  When would you tell him to take up the issue if your interest was serving the American people and President Obama instead of just the LGBT community?  I’d like to see him take this issue up right after the 2010 election, preferably in a lame duck session.

It’s been a particularly busy year, with big stories emerging in politics, the economy, and international affairs. I originally was just going to do a Top 10 People of the Year list, but there got to be so many people that I decided to split it up into the two lists you see below. Some of these are predictable, some not so much. Discuss.

Top 10 American Newsmakers of the Year

1. BARACK OBAMA, President-Elect of the United States of America

Duh. His campaign will be a model for future political operations for years to come, his victory was an historic landmark, and he is probably the most influential President-Elect in modern history. Enough said.

2. BEN BERNANKE, Chairman of the Federal Reserve; and HENRY PAULSON, Secretary of the Treasury

The biggest story this year outside the election has, of course, been the steadily declining economy. The framers of that story at its most critical moments were Ben Bernanke and Henry Paulson. While their navigation through the crisis has been less than sterling, they have been the ones holding the reins on this side of the Atlantic (but see Gordon Brown, below).

3. DAVID PETRAEUS, Commander of US Central Command

The story to come out of this year’s improvements in Iraq should not merely be the increase in troop levels. Rather, it should be COIN – the military’s shorthand term for counterinsurgency. The centerpiece of counterinsurgency is to peel off persuadable elements of the insurgency, teaming with them to fight the more hard-core elements. No man was more responsible for implementing this strategy in Iraq than General Petraeus – and no man outside of the Pentagon is in a better position to carry the lessons learned over to Afghanistan.

4. SUSAN RICE, UN Ambassador-designate and former Obama foreign policy adviser; and BRENT SCOWCROFT, former National Security Adviser

Rice and Scowcroft are far from ideological twins: the first is a liberal internationalist strongly committed to strengthening international institutions and promoting human rights; the second is a hardheaded Republican realist. But they share an antipathy toward the neoconservatives who gained control of George W. Bush’s foreign policy, and they represent Barack Obama’s dueling foreign policy sympathies: Rice is reportedly Obama’s most trusted foreign policy adviser, while the only Republicans whom Obama has given a voice in his administration are those with close ties to Scowcroft.

5. HILLARY CLINTON, Secretary of State-designate and former Democratic presidential candidate

Hillary Clinton’s story is an epically sad one. There is little doubt she is a talented and qualified figure, but she was forced to compete against a political phenomenon running a brutally efficient campaign, all while she was surrounded by incompetents and buffoons (including her husband). Even worse, the degree to which she broke barriers has been hampered by a viciously unfair media machine capable of seeing her only as monster or machine – anything but a history-making woman.

6. GAY AMERICANS

The results of Prop 8 make it hard to remember that 2008 was actually a pretty good year for the LGBT community: two state supreme courts recognized a right to same-sex marriage; restrictions on HIV-positive immigrants were lifted; and majorities were strengthened in support of ENDA and overturning Don’t Ask Don’t Tell. Oh, and we came the closest we’ve ever come to a successful vote on marriage equality. But the real story is the aftermath of the Prop 8 vote: the gay community has been nationally mobilized and is now in a better position to effect change than it ever has been.

7. STEVE JOBS, Chairman and CEO of Apple, Inc.; and ERIC SCHMIDT, Chairman and CEO of Google, Inc.

The iPhone, the G1, Google Chrome, the new Macbooks. Apple and Google remain the frontrunners in technological innovation.

8. DAVID AXELROD & DAVID PLOUFFE, former senior Obama campaign operatives

The men behind the political arm of the Obama campaign shouldn’t be overrated. The key to their success was not their innovative use of the Internet, their fundraising prowess, or their impressive branding. It was their candidate. But those other things will become the hallmark of future political campaigns, and that’s no small feat.

9. SARAH PALIN, Governor of Alaska and former Republican Vice Presidential candidate

That Sarah Palin is probably the most popular Republican in the country says all that needs to be said about the current state of the Republican Party.

10. RACHEL MADDOW, host of MSNBC’s The Rachel Maddow Show

This was the year America learned that progressives can succeed on television, with Rachel Maddow taking the crown as Queen of Cable News. But she’s not significant just because she’s liberal. She’s also got a damn good show that is smart, substantive, and entertaining. At a time when cable news is almost universally noise, from Hannity to O’Reilly to Olbermann, Maddow demonstrates that you don’t have to shout to have an entertaining news show.

Honorable Mentions: Nancy Pelosi; Tina Fey; Ron Paul; Michelle, Malia and Sasha Obama; Nate Silver

Top 10 Global Newsmakers of the Year

1. GORDON BROWN, Prime Minister of the United Kingdom

In any other year, the Prime Minister of the UK would not top this list. But when the financial crisis hit, it was Gordon Brown’s plan to inject capital into the struggling financial institutions that the rest of the world ended up copying. Henry Paulson and Ben Bernanke’s original plan to buy up bad assets was abandoned in the wake of Brown’s actions, leaving Paul Krugman to ask: “Has Gordon Brown saved the world financial system?”

2. ASIF ALI ZARDARI, President of Pakistan

His state is on the verge of collapse and has found itself at the center of more than one international crisis. Barack Obama argued military strikes against the state might be appropriate in certain circumstances; al-Qaeda operatives are occupying its northwest territory; and the terrorist attacks in India have heightened the already high tensions between the two states. Whether Zardari is able to hold his country together is the most important international relations question of the coming years.

3. HU JINTAO, President of China

The Beijing Olympics, China’s massive stimulus plan, and the weight of America’s national debt have caused American awareness of China’s influence to grow. And the line is being drawn between those who view China’s emergence as an opportunity and those who view it as a source of inevitable conflict.

4. NOURI AL-MALIKI, Prime Minister of Iraq

One of the most fascinating stories of the year was the unfolding of negotiations over the Status of Forces Agreement between the U.S. and Iraq. Nouri al-Maliki played a strong hand surprisingly well, and the result was a SOFA that largely resolved the debate over American forces in Iraq without the incoming President ever having to make a decision.

5. THE SOMALI PIRATES

Every part of the Somali pirate story is representative of a new international system. A big part of Somalia’s brokenness is due to the United States’ support of Ethiopia’s invasion – a lesson in the limits of American power. The result is a failed state in which pirates are able to amass arms and roam the high seas – a lesson in the increasing influence of non-state actors. And the emerging solution is an international coalition organized through the UN to better patrol the region by air, land and sea – a lesson in the need for multilateralism.

6. ALI KHAMENEI, Supreme Leader of Iran; and MAHMOUD AHMADINEJAD, President of Iran

Iran’s influence has ebbed over the course of the year, as its economy has crumbled and as Barack Obama’s election has already begun to undermine its international standing. That decrease in influence should probably be seen as encouraging, but it could also end up making the situation all the more volatile if Iran begins to feel backed into a corner – and if Israel begins to perceive a greater threat.

7. LUIS MORENO-OCAMPO, prosecutor of the International Criminal Court

It’s been a busy year for the ICC, throwing its weight around in Sudan, Uganda, and the former Yugoslavia. As the ICC becomes more active, its record will either strengthen or undermine the case for using international institutions to address the world’s problems. So far, it’s looking pretty good.

8. ROBERT MUGABE, President of Zimbabwe

Dictatorships are generally bad. They’re especially bad when the dictator implements a lot of really bad policy that cripples the economy. And they’re even worse when there’s a glimmer of hope that the dictator is losing power in a slowly democratizing country, only to have the dictator hold onto power through violent repression of the opposition.

9. VLADIMIR PUTIN, Prime Minister of Russia

Russia isn’t as important as many think, but its very lack of importance is making it a thorn in the world’s side. All things considered, Putin’s attempts to assert himself on the world stage should be among the easier crises the United States faces internationally – but only if we don’t adopt a provocative, conflict-oriented approach to things.

10. REVOLUTIONARY ARMED FORCES OF COLOMBIA – PEOPLE’S ARMY (FARC)

The tensions in South America don’t generally hold the same kind of threat-of-global-chaos that exists in the Middle East or South Asia. But this year FARC’s hostage-taking shenanigans heightened tensions among Colombia, Venezuela, and Ecuador, making clear that this is another hotspot the world needs to keep its eye on.

Honorable Mentions: Omar al-Bashir, Mikheil Saakashvili, the Guantanamo prisoners, Stephen Harper, Joseph Kony

Is this a crisis? You betcha. But as is generally the case it is looking more and more like the cure will be more deadly than the disease.

It has been suggested that if the United States just nationalize the banks by buying a shares in an effort to “fix” the banks and to instill confidence in the banks, much like Buffet has done in the past. Josh referred to an idea a while back in another post.

This is a horrible idea and I attribute the widespread economist support to hysteria and overreaction. It comes down to a basic reality; a government entity bears little to no similarity to a common place investor. Whereas an ordinary investor has finite resources and time which she uses to profit, the government arguably has infinite resources, has a much better survival rate, and its main purpose is not profit. So thinking that the government could “act” like a common investor is ridiculous.

The next question is whether this would necessarily be a bad thing. After all, capitalists are bastards and government is good. Except we have already tried a variation of that strategy: Fannie Mae and Freddie Mac.

An organization that existed with the government’s approval and oversight, but supposedly without its funding or the benefit “guaranteeing” its loans, it was an organization dedicated to creating a secondary market for loans with the hope of lowering the cost of borrowing money to expand home ownership. That would have been great, except for the government’s excessive exuberance in pursuing that goal contributed to the government adopting a ton of loans that defaulted. While there was a statutory disclaimer that the government would not guarantee those loans, Congress ultimately did bail out Fannie and Freddie, which had the same practical effect as a guarantee.

While the preferred shares the government will get would technically prevent the government from having an active management shares, the government’s past history and all of the contractual requirements placed on banks for accepting this money reveals that this distinction is a mirage at best. The government is getting its hand in not only regulating, but in managing banks. This will lead to the nation’s banks having a Fannie/Freddie like crisis in a few years.

An inflow of cash through governmental investment could conceivably stabilize the market in the short term (1-5 years). What is driving the precipitous drop in the market, similar to the Depression, is the slow down in the capital market. No capital, no expansion, no jobs, etc., and thus the connection to the fear of a widespread recession. More money infused into the banks would open up the credit markets, and voila, disaster is stymied.

But what happens during the next crisis, when the fundamental issues are still there, undiagnosed and unfixed? Only now, the government has less economic resources, a further depleted workforce due to boomer retirement, and increased burdens stemming from its social welfare services. The government will be in a much more difficult place to do anything to combat the problem then, and will probably fall back on the tired platitudes and half baked Hail Marys. Whereas now we are in a position to avoid a Depression but fix the inherent problems, in a couple years we won’t be that lucky.

However, I do not think nationalization of banks will fix the economy even in the short run under the idea of “too little, too late.” If a government is going to intervene, especially in matters of confidence, it needs to do so quickly and effectively. The world wide response has been neither.

While the nations’ governments have recently promised money and there was significant growth in the stock market, the one did not necessarily cause the other. Two weeks ago was one of the worst weeks for the global economy ever. After such a steep drop, the mere absence of bad news would be enough to cause the markets to rebound. Add in that the governments did do something and stated a big number (granted without a lot of details), and the markets were due for a rise. I don’t think it will last long term. And today was another pull back.

So short term prediction is this, and it is something we are already starting to see. Given the world market’s voracious appetite for American debt and their enabling attitude, the world market is going to have hard hit recession (hardly a shocker). Unfortunately for us, world investors will back out of the emerging markets because emerging markets are not trusted, driving the dollar up in value. So now we have to pay off our debts using more expensive dollars and exports go down, exacerbating unemployment while minimizing inflation. The stereotypical response, decreasing interest rates, won’t help, because people are so petrified of the debt system and don’t trust it that loans won’t go out at the rate we need and unemployment and decreased production will persist. Given that the stock market grew based on playing popular perception as opposed to market fundamentals, the exacerbated growth of the 90s and early 2000s, will be met with exacerbated drops based on hysteria.

The interesting things to watch will be to see how Europe responds, given their fragmented economic system (one central bank, many treasury departments, many different views on how to do things with mirrored circumstances to the US). Will this be a serious blow the Union? Will investors break the “playing the table” strategy and start playing their cards? And will the United States begin to address the fundamental problems, or merely stick with the well known platitudes that make great copy, but crappy solutions?