From last night’s “All-Stars.”

On Obama’s plan to close tax loopholes:

…the economics of it are as bad as Jeff outlined.
The politics, however, are wonderful. I mean, first of all, Obama is sort of living out the Bill Clinton idea that he wakes up every morning finding a new way to help the American people. Every day you turn on your television, and there’s Obama with a new idea that he’s presenting, always himself, that is going to help America.
So he looks energetic and always out there acting on your behalf.
Secondly, who understands what these loopholes really are? This is extremely complicated stuff. And, as he presents it, who can be against tax haven or a tax loophole?
But the problem is that when we had real tax reform in 1986, what we had was a trade-off — a reduction of loopholes, which in and of themselves introduced inefficiency, but at the same time, in return, a reduction in overall rates, which also increase economic efficiency(sic).
With Obama, all you get is the so-called the closing of loopholes. One of the reasons that you have all these loopholes and these havens are sought is because America has the second highest corporate tax rate in the west. And that’s why companies are looking for some kind of relief.
So instead of having a combination of closing loopholes and reducing rates, Obama is always is for increasing his revenue and stopping there, and promising that it’s only a down payment for the future. I will believe the future when I see it.

On the situation in Pakistan:

This really is a dangerous situation. We’re really as we were in Iran in 1979, except that there are nukes involved here. And in Iran, we equivocated. We did not support the Shah. We looked for so called moderates, and in the end we ended up with radicals in control, which is what we have today.
There is this talk in the administration trying to cozy up to the opposition leader, Nawaz Sharif, who’s a dicey guy. He has a lot of ties with Islamists. He is not a reliable ally. He’s actually probably a little bit stronger than the current president right now.
But I’m not sure he’s a good bet. I think our real bet in the — ultimately is going to be the army chief of staff, Kayani. Trained in the United States, we assume he’s a friendly. All of the evidence is that he is.
And, in the end, with the army the only institution that works in Pakistan, we have to make contingencies for easing into probably a military government within a short time if the civilians lose control, as appears to be happening.