March 31, 2011

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Michael Oren, Israel’s ambassador to our country asks an important question about Iran’s nukes. 

America and its allies, empowered by the United Nations and the Arab League, are interceding militarily in Libya. But would that action have been delayed or even precluded if Libyan leader Moammar Gadhafi had access to nuclear weapons? No doubt Gadhafi is asking himself that same question.

Gadhafi unilaterally forfeited his nuclear weapons program by 2004, turning over uranium-enriching centrifuges and warhead designs. A dictator like him—capable of ordering the murders of 259 civilians aboard Pan Am Flight 103 and countless others in many countries including his own—would not easily concede the ultimate weapon. Gadhafi did so because he believed he was less secure with the bomb than he would be after relinquishing it. He feared that the U.S., which had recently invaded Iraq, would deal with him much as it had Saddam Hussein. …

… The Iranian regime is the pre- eminent sponsor of terror in the world, a danger to pro-Western states, and the enemy of its own people who strive for democracy. It poses all of these hazards without nuclear weapons. Imagine the catastrophes it could inflict with them. … 

 

Nile Gardiner points out W was a better builder of coalitions.

When he was president, George W. Bush’s international leadership was widely mocked and derided by his liberal critics, who loudly declared that his plain-talking style was undermining America’s image in the world. Even now, the Left cannot resists a dig at the ex-president, with former Obama adviser Rob Shapiro exclaiming to Fox News over the weekend:

“The United States is no longer the out-of-control cowboy. Instead, we build global coalitions. We get the support of the Arab world. We get the support of Africa. We get the support of Europe.”

Shapiro’s statement ignores the fact that the military alliance built by Bush to confront Saddam Hussein was significantly larger than the coalition on the ground now in Libya, that Europe remains divided over how to deal with Colonel Gaddafi (witness Germany’s abstention at the UN Security Council), or that the Arab League is barely lifting a finger, with one or two exceptions. As for Africa, so far not one member of the African Union has joined the no-fly zone operation. But the Left rarely lets reality get in the way of baseless conjecture. …

 

Toby Harnden lists ten things we have learned from Libya about Obama. Here’s a few.

7. Obama has a tendency to take “tough” action because he’s afraid of appearing weak (he also did this when he fired General Stanley McChrystal).

8. Obama really does believe in the “international community” and the intrinsic goodness of the UN.

9. Obama will go to war, but would prefer not to admit it.

10. Obama is prepared to go to war with muddled military objectives and no plan for the end game.

 

Yesterday a PowerLine post showed the cozy relationship between GE and the government. Today, a NY Times article details some of GE success rentseeking in Washington.

General Electric, the nation’s largest corporation, had a very good year in 2010.

The company reported worldwide profits of $14.2 billion, and said $5.1 billion of the total came from its operations in the United States.

Its American tax bill? None. In fact, G.E. claimed a tax benefit of $3.2 billion.

That may be hard to fathom for the millions of American business owners and households now preparing their own returns, but low taxes are nothing new for G.E. The company has been cutting the percentage of its American profits paid to the Internal Revenue Service for years, resulting in a far lower rate than at most multinational companies.

Its extraordinary success is based on an aggressive strategy that mixes fierce lobbying for tax breaks and innovative accounting that enables it to concentrate its profits offshore. G.E.’s giant tax department, led by a bow-tied former Treasury official named John Samuels, is often referred to as the world’s best tax law firm. Indeed, the company’s slogan “Imagination at Work” fits this department well. The team includes former officials not just from the Treasury, but also from the I.R.S. and virtually all the tax-writing committees in Congress.

While General Electric is one of the most skilled at reducing its tax burden, many other companies have become better at this as well. Although the top corporate tax rate in the United States is 35 percent, one of the highest in the world, companies have been increasingly using a maze of shelters, tax credits and subsidies to pay far less.

In a regulatory filing just a week before the Japanese disaster put a spotlight on the company’s nuclear reactor business, G.E. reported that its tax burden was 7.4 percent of its American profits, about a third of the average reported by other American multinationals. Even those figures are overstated, because they include taxes that will be paid only if the company brings its overseas profits back to the United States. With those profits still offshore, G.E. is effectively getting money back.

Such strategies, as well as changes in tax laws that encouraged some businesses and professionals to file as individuals, have pushed down the corporate share of the nation’s tax receipts — from 30 percent of all federal revenue in the mid-1950s to 6.6 percent in 2009.  … 

… A review of company filings and Congressional records shows that one of the most striking advantages of General Electric is its ability to lobby for, win and take advantage of tax breaks.

Over the last decade, G.E. has spent tens of millions of dollars to push for changes in tax law, from more generous depreciation schedules on jet engines to “green energy” credits for its wind turbines. But the most lucrative of these measures allows G.E. to operate a vast leasing and lending business abroad with profits that face little foreign taxes and no American taxes as long as the money remains overseas. …

 

Thomas Sowell has mined the new census data.

The latest published data from the 2010 census show how people are moving from place to place within the United States. In general, people are voting with their feet against places where the liberal, welfare-state policies favored by the intelligentsia are most deeply entrenched.

When you break it down by race and ethnicity, it is all too painfully clear what is happening. Both whites and blacks are leaving California, the poster state for the liberal, welfare-state and nanny-state philosophy.

Whites are also fleeing the big northeastern liberal, welfare states like Massachusetts, New York, New Jersey and Pennsylvania, as well as the same kinds of states in the midwest, such as Michigan, Ohio and Illinois.

Although California has long been a prime destination of Asian immigrants and the homes of their descendants, the 2010 census shows a striking increase in the Asian American population of Nevada, more so than any other state. Nevada is adjacent to California but has no income tax nor the hostile climate for business that California maintains.

The movement of the black population– especially educated young blacks– is the most striking of all. …

 

A link to the most amazing tsunami video we have seen.

March 30, 2011

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For the most part we ignored the president’s speech Monday night, but a post from Streetwise Professor shouldn’t be missed.

I would have loved to have been a fly on Nicolas Sarkozy’s wall last night, during Obama’s address about Libya.  Mr. Me made it sound like the entire Libyan venture was his idea, and that he had been pushing it from the beginning.  The truth, of course is that just as with Egypt, Obama was a Johnny-come-lately who reacted to events rather than shaped them.  He was chasing the parade, and now he claims he was the drum major the entire time.  In reality, Sarkozy and Cameron were out in front on this, and dragged Obama along–and only then with a shove from inside his administration from Clinton, Rice, and Power.

Given the stark difference between the reality and Obama’s self-serving representation thereof, I am sure that Sarkozy–a man with no small ego himself–is furious.  Indeed, Obama didn’t even mention Sarkozy by name, and France and the UK received one token mention.  In contrast to Obama’s repeated use of first person pronouns, this was petty and disrespectful.

Yes, “Smart Power” at work.

That was not the only pettiness in Obama’s speech.  His slurring of his predecessors Clinton and Bush was unnecessary, uncalled for, and beneath the office Obama holds.*  Usually presidents, after having experienced the difficulties of making life-and-death decisions, gain a respect for the challenges their predecessors faced, and mute their criticisms accordingly.  Not Mr. Me.

They called Clinton “The Big Me.”  He’s a piker in the narcissism category, compared to Obama, as frightening as that is to contemplate. …

 

John Hinderaker from the blog PowerLine with a great post illuminating the corruption surrounding GE and the administration.

General Electric, along with General Motors, is the prototype of Big Business in the Age of Obama. GE bills itself as the world’s largest industrial company; currently it ranks #4 in the Fortune 500, with revenues in 2010 of around $156 billion. All has not been well at GE, however. Since 2002, the company has laid off around 20 percent of its work force in the U.S., while expanding its overseas operations. And the company’s financing arm, GE Capital, sustained massive losses and had to be bailed out by the federal government:

“General Electric, the world’s largest industrial company, has quietly become the biggest beneficiary of one of the government’s key rescue programs for banks. …

The company did not initially qualify for the program, under which the government sought to unfreeze credit markets by guaranteeing debt sold by banking firms. But regulators soon loosened the eligibility requirements, in part because of behind-the-scenes appeals from GE.”

A consistent feature of GE’s symbiotic relationship with the federal government is that its greatest successes have been gained through lobbying rather than innovation.

“Public records show that GE Capital, the company’s massive financing arm, has issued nearly a quarter of the $340 billion in debt backed by the program, which is known as the Temporary Liquidity Guarantee Program, or TLGP. The government’s actions have been “powerful and helpful” to the company, GE chief executive Jeffrey Immelt acknowledged in December.

GE’s finance arm is not classified as a bank. Rather, it worked its way into the rescue program by owning two relatively small Utah banking institutions, illustrating how the loopholes in the U.S. regulatory system are manifest in the government’s historic intervention in the financial crisis. …”

 

The Census Bureau has released more and Michael Barone helps us make sense of the numbers.

The Census Bureau last week released county and city populations for the last of the 50 states from the 2010 census last week, ahead of schedule. Behind the columns of numbers are many vivid stories of how our nation has been changing — and some lessons for public policy as well.

Geographically, our population is moving to the south and west, to the point that the center of the nation’s population has moved to Texas County, Missouri.

That sounds like the familiar story of people moving from the Snow Belt to the Sun Belt, but that’s not exactly what’s happening. Instead, the fastest growth rates in the 2000-to-2010 decade have been in Texas, the Rocky Mountain states and the South Atlantic states.

We’re familiar with the phenomenon of people moving to the West Coast. But the three Pacific Coast states — California, Oregon and Washington — grew by 11 percent in the last decade, just 1 percent above the national average, while the South Atlantic states from Virginia through the Carolinas and Georgia to Florida grew by 17 percent. …

 

Historian Andrew Roberts reviews a new Ghandi biog for WSJ. 

Joseph Lelyveld has written a ­generally admiring book about ­Mohandas Gandhi, the man credited with leading India to independence from Britain in 1947. Yet “Great Soul” also obligingly gives readers more than enough information to discern that he was a sexual weirdo, a political incompetent and a fanatical faddist—one who was often downright cruel to those around him. Gandhi was therefore the archetypal 20th-century progressive ­intellectual, professing his love for ­mankind as a concept while actually ­despising people as individuals.

For all his lifelong campaign for Swaraj (“self-rule”), India could have achieved it many years earlier if ­Gandhi had not continually abandoned his civil-disobedience campaigns just as they were beginning to be successful. With 300 million Indians ruled over by 0.1% of that number of Britons, the subcontinent could have ended the Raj with barely a shrug if it had been politically united. Yet Gandhi’s uncanny ability to irritate and frustrate the leader of India’s 90 million Muslims, Muhammad Ali Jinnah (whom he called “a maniac”), wrecked any hope of early independence. He equally alienated B.R. Ambedkar, who spoke for the country’s 55 million Untouchables (the lowest caste of Hindus, whose very touch was thought to defile the four higher classes). Ambedkar pronounced Gandhi “devious and untrustworthy.” Between 1900 and 1922, Gandhi ­suspended his efforts no fewer than three times, leaving in the lurch more than 15,000 supporters who had gone to jail for the cause.

A ceaseless self-promoter, Gandhi bought up the entire first edition of his first, hagiographical biography to send to people and ensure a reprint. Yet we cannot be certain that he really made all the pronouncements attributed to him, since, according to Mr. Lelyveld, Gandhi insisted that journalists file “not the words that had actually come from his mouth but a version he ­authorized after his sometimes heavy editing of the transcripts.”

We do know for certain that he ­advised the Czechs and Jews to adopt nonviolence toward the Nazis, saying that “a single Jew standing up and ­refusing to bow to Hitler’s decrees” might be enough “to melt Hitler’s heart.” (Nonviolence, in Gandhi’s view, would apparently have also worked for the Chinese against the Japanese ­invaders.) Starting a letter to Adolf ­Hitler with the words “My friend,” Gandhi egotistically asked: “Will you listen to the appeal of one who has ­deliberately shunned the method of war not without considerable success?” He advised the Jews of Palestine to “rely on the goodwill of the Arabs” and wait for a Jewish state “till Arab ­opinion is ripe for it.” …

 

Andrew Ferguson has really struck a nerve with his book on college admissions.  George Will columns on it.

For many families, this is March madness — the moment of high anxiety concerning higher education as many colleges announce their admittance decisions. It is the culmination of a protracted mating dance between selective institutions and anxious students. Part agony, part situation comedy, it has provoked Andrew Ferguson to write a laugh-until-your-ribs-squeak book — “Crazy U: One Dad’s Crash Course in Getting His Kid into College.”

He begins in Greenwich, Conn. — a hedge fund habitat — watching Katherine Cohen, an “independent college admissions counselor,” market her $40,000 “platinum package” of strategies for bewitching Ivy League admissions officers. “Everyone in the room,” writes Ferguson, “was on full alert, with that feral look of parental ambition. They swiveled their tail-gunning eyes toward Kat when she was introduced.” Kat introduced them to terror:

“There are 36,000 high schools in this country. That means there are at least 36,000 valedictorians. They can’t all go to Brown. You could take the ‘deny pile’ of applications and make two more classes that were every bit as solid as the class that gets in.” …

March 29, 2011

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Spengler thinks Syria is next.

… As I wrote in Food and failed Arab states (Asia Times Online February 2, 2011), the newly prosperous consumers of Asia have priced food grains out of the reach of the destitute Arab poor. This is a tsunami which no government in the region can resist. Of all the prospectively failed states in the region, Syria seemed the least vulnerable, with a determined and vicious regime prepared to inflict unspeakable brutality on its opponents, and its inability to contain unrest is a frightening gauge of the magnitude of the shock. …

… What are essentially dictatorships like Syria rule through corruption. It is not an incidental fact of life, but the primary means of maintaining loyalty to the regime. Under normal circumstances such regimes can last indefinitely. Under severe external stress, the web of corrupt power relations decays into a scramble for individual advantage. The doubling of world food prices over the past year has overwhelmed the Assad family’s ability to manage through the usual mechanisms. The Syrians sense the weakness of the regime, which rests on the narrow base of the Alawi religious minority.

Virtually every sector of Syrian society has a grudge against the Assads, most of all the Muslim Brotherhood, which led an uprising in the city of Hama in 1982 that Hafez al-Assad crushed with casualties estimated at between 10,000 and 20,000. Ethnic fractures have not yet contributed to the unrest, but the country’s Kurds are “ready, watching and waiting to take to the streets, as their cause is the strongest”, as Robert Lowe, manager of the Middle East Center at the London School of Economics, told CNN on March 24.

From the Straits of Gibraltar to the Hindu Kush, instability will afflict the Muslim world for a generation, and there is nothing that the West can do to stop it. Almost no-one in Washington appears to be asking the obvious question: what should the United States do in the event that there are no solutions at all?

No one, that is, but US Defense Secretary Robert Gates, who told Washington Post columnist David Ignatius March 22 that “the unrest has highlighted ‘ethnic, sectarian and tribal differences that have been suppressed for years’ in the region, and that as America encourages leaders to accept democratic change, there’s a question ‘whether more democratic governance can hold … countries together in light of these pressures’.” The implication [Ignatius writes]: ”There’s a risk that the political map of the modern Middle East may begin to unravel too, with, say, the breakup of Libya.”

The Defense Secretary’s Delphic utterance suggests that he has learned a great deal since the 1980s, when as the Central Intelligence Agency’s Russia desk chief he refused to believe that the Soviet Union was headed for a crackup. This time he foresees the chaos to come. But Gates, along with Secretary of State Hillary Clinton, already has announced his eventual departure. …

 

Same thought from Elliot Abrams in WaPo.

While the monarchies of the Middle East have a fighting chance to reform and survive, the region’s fake republics have been falling like dominoes — and Syria is next.

The ingredients that brought down Zine el-Abidine Ben Ali in Tunisia were replicated in Egypt and Libya: repression, vast corruption and family rule. All are starkly present in Syria, where the succession Egyptians and Tunisians feared, father to son, took place years ago and the police state has claimed thousands of victims. Every Arab “republic” has been a republic of fear, but only Saddam Hussein’s Iraq surpassed the Assads’ Syria in number of victims. The regime may cling to power for a while by shooting protesting citizens, but its ultimate demise is certain.

The Arab monarchies, especially Jordan and Morocco, are more legitimate than the false republics, with their stolen elections, regime-dominated courts and rubber-stamp parliaments. Unlike the “republics,” the monarchies do not have histories of bloody repression and jails filled with political prisoners. The question is whether the kings, emirs and sheiks will end their corruption and shift toward genuine constitutional monarchies in which power is shared between throne and people.

For the “republics,” however, reform is impossible. Force is the only way to stay in power. …

 

Jeff Jacoby catches Newt Gingrich in a debate with himself.

NEWT GINGRICH sees himself as a statesman, a public-policy sage, and a potential president of the United States. The former House speaker has written more than 20 books, produced a half-dozen documentaries, and launched organizations that focus on subjects as varied as health care, the importance of faith and free markets, and the interests of American Hispanics. It is clear that Gingrich is smart, curious, articulate, and energetic. He is never at a loss for words, and he has an opinion on everything.

But is he serious?

For someone who holds himself out as a public intellectual, Gingrich comes across all too often as more glib than thoughtful — more interested in joining the fray than in expressing carefully worked-out ideas. When he takes a strong stand on a controversial issue, it’s never clear how much conviction and deliberation have gone into it. He seems to think and speak at full gallop, tossing off opinions as fast as they come to him, less interested in being right than in being heard — and in taking shots at the opposition. Of course it is in the nature of American politics that Republicans criticize Democrats, and Democrats disparage Republicans, but Gingrich professes “to rise above traditional gridlocked partisanship.’’ And yet Newt the Republican combatant is a much more familiar figure than Newt the nonpartisan visionary.

Consider the former speaker’s position(s) on Libya. …

 

Amity Shlaes writes on the importance of ending federal funding of NPR.

That tricky Vivian Schiller. That flatterer Ron Schil-ler. When Americans talk scandal, they talk names, not ideas.

The recent resignation of National Public Radio’s head, Vivian Schiller, came after her fundraiser, Ron Schiller (no relation), was caught on tape pandering to a group posing as wealthy potential donors from a fictitious Muslim organization.

Entrapment is creepy. But this story serves as a reminder of a genuine problem at NPR. This problem is not personnel; it is, as the Marxists would say, structural. NPR’s staff and friends pretend that NPR isn’t such a big deal, that it’s just one creature in the great forest of talk radio, which happens to be funded–but only fractionally–by the federal government. Hence the outrage at congressional efforts to take away that small fraction.

But the reality is that NPR is not one among many. It’s a Tyrannosaurus rex, whose every move pounds the forest floor. The reason for this is not the money NPR receives from the government but the colophon of authority that federal subsidy confers. Having the government’s seal makes NPR respectable, and that, in turn, gives it access to customers, including tender young ones, whom Fox can never reach. The same holds for another meat-eater in a region of vegetarians: the Public Broadcasting Service. …

 

Remember Jimmy McMillan’s “The Rent is Too Damn High” party in NY City? Nicole Gelinas says actually the rent is too damn regulated.

New York has controlled the rents on “private” apartments since after World War I. The city determines annual rent increases for half of its roughly 2 million rentals. Another nearly 800,000 apartments are “free market,” in buildings too small for regulation or built after the 1970s. The state rules that govern these “tenant protections” expire in two months.

So why does nobody care?

The clue as to why the public is not up in arms right now won’t be found at either extreme of the city’s wildly diverse rental market.

Sure, we’ve all heard about 98-year-old great-grandma who would lose the $400 apartment she’s lived in for eight decades — and about the guy who rents a place in the Time Warner Center for $50,000 a month.

But the truth — which New Yorkers have gradually absorbed despite politicians’ best efforts — is in the boring middle. …

March 28, 2011

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The Economist calmly explains why there might be panic.

FOLLOWING the earthquake and tsunami that struck Japan on March 11th, survivors scrambled for shelter and sustenance. Investors, meanwhile, scrambled for knowledge. Speaking at a London seminar hosted by GaveKal Research, a consultancy, Jonathan Allum of Mizuho International noted how many of his fellow analysts suddenly purported to be experts on seismology, oceanography and nuclear physics. He was more honest about the limits of his own wisdom. “I know quite a lot about economics and finance and I’m pretty good on German progressive rock,” he said, but that was about it.

The list of esoteric worries troubling the world’s investors is growing. As Western aircraft enforce a no-fly zone over Libya, some of Mr Allum’s peers are no doubt waxing lyrical about the payload of the Eurofighter Typhoon. Across the Mediterranean, Europe’s debt crisis is still in full swing. Markets fretted about the prospect of a long-expected bail-out for Portugal, after the parliament in Lisbon rejected the minority government’s latest austerity measures on March 23rd and the prime minister promptly submitted his resignation. Possible write-downs on Irish bank debt by the new government in Dublin are another concern; so too is the threat that losses will be imposed on private creditors when a permanent European rescue fund starts operating in 2013.

Everyone knows that the disaster in Japan, the violence in the Middle East and the euro zone’s fiscal strains are bad for the global economy. But no one knows quite how bad. This lack of clarity can be as harmful as the disruption itself. …

 

Peter Schiff lets us in one of the Fed’s dirty secrets.

… Most people are aware that foreign central banks figure very prominently into the mix. They buy for political reasons and to suppress the value of their currencies relative to the dollar. And while we think their rationale is silly, we do not dispute that they will continue to buy as long as they believe the policy serves their own national interests. When that will change is harder to determine. But another very large chunk of Treasuries go to “primary dealers,” the very large financial institutions that are designated middle men for Treasury bonds. In a late February auction, these dealers took down 46% of the entire $29 billion issue of seven year bonds. While this is hardly remarkable, it is shocking what happened next.

According to analysis that appeared in Zero Hedge, nearly 53% of those bonds were then sold to the Federal Reserve on March 8, under the rubric of the Fed’s quantitative easing plan. While it’s certainly hard to determine the profits that were made on this two week trade, it’s virtually impossible to imagine that the private banks lost money. What’s more, knowing that the Fed was sure to make a bid, the profits were made essentially risk free. It’s good to be on the government’s short list.   

Given that the Treasury is essentially selling its debt to the Fed, in a process that we would call debt monetization, some may wonder why it doesn’t just cut out the middle man and sell directly. But the Treasury is prevented by law from doing this, so the private banks provide a vital fig leaf that disguises the underlying activity and makes it appear as if there is legitimate private demand for Treasury debt. But this is just an illusion, and a clumsy one to boot. …

 

More on the subject from Jim Lacey in the National Review.

… The wisest and most successful bond investor of all time, Bill Gross, has dumped his bond fund’s $150 billion investment in U.S. bonds. One should not ignore the importance of this event. The largest bond fund in America no longer believes that Treasury bonds are a good investment. Moreover, Gross is not alone. Blackrock, the world’s largest money manager, is now underweighting Treasuries overall and reducing the duration of the bonds it still holds. That means they are dumping their long-term bonds, which are the most sensitive to interest-rate changes, in favor of Treasury instruments that mature in a year or less. Other bond funds, such as the $20 billion Loomis Sayles funds, are also forgoing Treasuries in favor of high-yield corporate bonds. Virtually everywhere you look, from great investors such as Warren Buffett to insurance companies such as Allstate, everyone is dumping their long-term U.S. debt and either buying debt that matures in less than a year or moving their money elsewhere.

So who is still buying U.S. debt? According to Bill Gross, the “old reliables” — China, Japan, and OPEC — are still in the market for 30 percent of all new debt. The rest, however, is being purchased by the Federal Reserve. There is no one in else in the market. For the first time ever, Americans are refusing to purchase their own country’s debt.

Gross estimates that the “old reliables” are still good for $500 billion a year in purchases, and will be for some time in the future. This is pretty much the amount they’ve had to buy in the past to rebalance capital flows distorted by the U.S. trade deficit. Gross, however, may be wrong this time. Japan, needing to finance its reconstruction, is much likelier to be a net seller of U.S. debt, while China’s economy is slowing and actually ran a trade deficit in the last quarter. That leaves only one buyer of consequence — the Federal Reserve. …

 

David Goldman says it is not time to panic.

Fox News among other outlets is warning that mass liquidation of US Treasuries by the rebuilding Japanese will lead to a collapse of the US Treasury market and a spike in US bond yields–and that’s why Congress has to cut the deficit right away. That was Stuart Varney’s message this afternoon (Sunday). There is no possible way for Congress to cut enough fat out of the budget to make much of a dent in a trillion-and-a-half dollar deficit, but I suppose this sort of scare talk gets angry phone calls into the House of Representatives.

I’m a good Republican and I think less of President Obama than most of the party faithful, but my job is not to spin stories but to tell it as I see it. As I see it, the story is nonsense.

Treasury yields bounced up a bit from the extreme lows of last summer, to be sure, but we are still in the lower part of a very long-term range. There simply aren’t any safe assets. The Euro is in much worse shape than the dollar; Europe can’t throw the PIIGS overboard without having to re-capitalize its own banking system (full disclosure: I own no European bank common, and only a bit of Deutsche Bank preferred). Japan’s debt to GDP ratio is the worst in the world. Where, then, are the central banks of the world to put their money — not to mention the rest of the world’s savers?

Long term, the US is a better bet than Europe. Forget the present deficit and look at fundamentals: how many working-age people will there be in Europe, Japan, and North America over the life of a 30-year bond?

Between now and 2050, according to the UN, Japan’s population aged 15-59 will fall from 71 million to 45 million; Europe’s from 460 million to 350 million. Those are declines in the number of potential taxpayers by 37% and 24% respectively. America’s working-age population, though, will rise by 15% as of 2050. …

For a change of pace, Jennifer Rubin interviews John Kasich, governor of Ohio. 

… I wanted to talk to him about SB 5, the measure to severely curtail public employee bargaining rights and require employees to increase their contributions. (An analysis provided by his spokesman shows that had the measure been in place last year, it would have saved local governments in the state $1.1 billion.) Kasich tells me, “We’ve unveiled the most comprehensive reform budget people have seen in a generation.” The union reform is key, but “it’s only one element” to allow local governments to control their costs. He notes that under the bill public-employee unions can still negotiate for wages and working conditions, but not health care and pension benefits. It would also end public-employee union strikes and automatic pay increases.

Kasich explains that the equation between public employees and taxpayers needs to be “rebalanced,” with the idea that the taxpayers through their elected officials should control the state budget. He points to troubling examples of how the balance has gotten out of whack: “We’re in the bottom 10 [among states] in dollars in the classroom, and the top 10 in dollars for administration.” He continues to rattle off examples in which Ohio and its taxpayers have lost control of government finances. “The city of Mansfield,” he explains, “is on the way to bankruptcy.” He denies accusations that he is out to get the unions. “Nothing could be farther from the truth,” he says. He points to some compelling math: The average Ohioan must pay 23 percent.of his own health care; government workers pay only 9 percent. …

March 27, 2011

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David Warren has Libya concerns.

As the days pass, and the intervention in Libya grows longer, my alarm also grows. The West digs itself into a position that is contrary to western interests, and can only advance the interests of our worst enemies in the Middle East. If I were to characterize the effect of the intervention – the actual as opposed to the stated effect – it would be, “Making the world safe for Islamism.” …

… now we are doing something more profoundly senseless. In the name of a “humanitarianism” that is not thought through, we are subtly joining forces with so-called “moderate” Islamists against isolated secular tyrants. We have foreign services sending feelers out to Islamist opponents of every Arab regime, in the name of “democracy” and “inclusivity.”

From Obama down through the liberal intelligentsia we have blather about how the Muslim Brotherhood is “evolving” -as it embraces the tactical devices of modern Western political parties, from women’s groups and youth clubs to electronic media and studied efforts by spokesmen to appear “cool.” Yet all this remains in the service of a political ideology that is unambiguously committed to the spread of Shariah, and the destruction of us.

This is a very old story: the ability of the liberal mind to delude itself by confusing appearances with realities; by embracing the comfortably plausible in preference to the uncomfortably true. And finally, expressing genuine surprise when the whole effort blows up in our faces.

 

Charles Krauthammer comments on the “Professor’s War”.

President Obama is proud of how he put together the Libyan operation. A model of international cooperation. All the necessary paperwork. Arab League backing. A Security Council resolution. (Everything but a resolution from the Congress of the United States, a minor inconvenience for a citizen of the world.) It’s war as designed by an Ivy League professor.

True, it took three weeks to put this together, during which time Moammar Gaddafi went from besieged, delusional (remember those youthful protesters on “hallucinogenic pills”) thug losing support by the hour — to resurgent tyrant who marshaled his forces, marched them to the gates of Benghazi and had the U.S. director of national intelligence predicting that “the regime will prevail.”

But what is military initiative and opportunity compared with paper?

Well, let’s see how that paper multilateralism is doing. …

 

It may not be mission creep, but the administration’s language is turning it into a creepy mission. Rick Richman in Contentions.  

Deputy National Security Advisor for Strategic Communications Ben Rhodes was asked “if it’s not a war, what’s the right way to characterize this operation?”

MR. RHODES: … I think what we’ve said is that this is a military operation that will be limited in both duration and scope. Our contribution to this military operation that is enforcing a U.N. Security Council resolution is going to be limited — time limited to the front end, and then we’ll shift to a support role. …

Q But it’s not going to war, then?

MR. RHODES: Well, again, I think what we are doing is enforcing a resolution that has a very clear set of goals, which is protecting the Libyan people, averting a humanitarian crisis, and setting up a no-fly zone. Obviously that involves kinetic military action, particularly on the front end. …

So it’s not a war; it’s a kinetic military action that is time-limited and contribution-limited on the front end.

 

More from Contentions on “kinetic military action” from Peter Wehner.

Rick does a fine job of highlighting the Obama administration’s use of phrases like “kinetic military action, particularly on the front end” in lieu of the word “war.” But this silly semantic game, which serves to obfuscate rather than to clarify, reveals two things that are, I think, disturbing.

The first is that confused language is often a manifestation of confused thoughts, and that’s certainly what we have with the Obama administration’s strategy (I used the word loosely) in Libya. …

… Second, the president, having committed the U.S. to the conflict in Libya, is deeply ambivalent about it. He’s in, but only partially in, and boy does he want out. He’s like a guy who felt obligated to propose to a woman and regretted it the minute the words had passed his lips.v…

 

Last on kinetics from Mark Steyn.

It is tempting and certainly very easy to point out that Obama’s war (or Obama’s “kinetic military action,” or “time-limited, scope-limited military action,” or whatever the latest ever more preposterous evasion is) is at odds with everything candidate Obama said about U.S. military action before his election. And certainly every attempt the president makes to explain his Libyan adventure is either cringe-makingly stupid (“I’m accustomed to this contradiction of being both a commander-in-chief but also somebody who aspires to peace”) or alarmingly revealing of a very peculiar worldview:

“That’s why building this international coalition has been so important,” he said the other day. “It is our military that is being volunteered by others to carry out missions that are important not only to us, but are important internationally.”

That’s great news. Who doesn’t enjoy volunteering other people? The Arab League, for reasons best known to itself, decided that Col. Gadhafi had outlived his sell-by date. Granted that the region’s squalid polities haven’t had a decent military commander since King Hussein fired General Sir John Glubb half-a-century back, how difficult could it be even for Arab armies to knock off a psychotic transvestite guarded by Austin Powers fembots? But no: Instead, the Arab League decided to volunteer the U.S. military.

Likewise, the French and the British. Libya’s special forces are trained by Britain’s SAS. Four years ago, President Sarkozy hosted a state visit for Col. Gadhafi, his personal security detail of 30 virgins, his favorite camel and a 400-strong entourage that helped pitch his tent in the heart of Paris. Given that London and Paris have the third- and fourth-biggest military budgets on the planet and that between them they know everything about Gadhafi’s elite troops, sleeping arrangements, guard-babes and dromedaries, why couldn’t they take him out? But no: They, too, decided to volunteer the U.S. military.

But, as I said, it’s easy to mock the smartest, most articulate man ever to occupy the Oval Office. Instead, in a nonpartisan spirit, let us consider why it is that the United States no longer wins wars. …

 

Speaking of NewSpeak, Jeffrey Goldberg spots a winner in Reuters.

This is from a Reuters story on the Jerusalem bombing earlier today (last Wednesday:

“Police said it was a “terrorist attack” — Israel’s term for a Palestinian strike. It was the first time Jerusalem had been hit by such a bomb since 2004.”

Those Israelis and their crazy terms! I mean, referring to a fatal bombing of civilians as a “terrorist attack”? Who are they kidding? Everyone knows that a fatal bombing of Israeli civilians should be referred to as a “teachable moment.” Or as a “venting of certain frustrations.” Or as “an understandable reaction to Jewish perfidy.” Or perhaps as “a very special episode of ‘Cheers.’” Anything but “a terrorist attack.” I suppose Reuters will mark the 10th anniversary of 9/11 by referring to the attacks as “an exercise in urban renewal.”

The mind reels.

 

David Harsanyi has more on Reuters’ language use.

… Normally, anti-Israel bias is nothing to get too excited about. With its phony deference to journalistic neutrality, Reuters has a long history of conflating and euphemizing events in its biased reporting of the Middle East, both in obvious and subtle ways.

Most reputable news organizations, for instance, tend to downplay or completely ignore the religious affiliation of man- caused disaster-makers. It’s unseemly to bring stuff like that up. It only divides us.

So why did Reuters — and other news outlets — identify the bombing as taking place not in an Israeli neighborhood, but a “Jewish” one? And why is it a “Palestinian” strike and not a Muslim one? Religious affiliation, it seems, is selectively vital information. Jews, you see, are a religious group occupying Jerusalem, and Palestinians are nationalists striving for autonomy in their homeland.

Of course, Reuters is only the worst offender. It is true that The New York Times can’t file a dispatch from Israel without conflating the religiously motivated murders of civilians with the “settlement” problem. As if Hamas were firing rockets at civilians because it is exasperated by the slow progress of the peace process. …

 

WSJ article shows the folly of the states depending on confiscatory taxes on the rich.

As Brad Williams walked the halls of the California state capitol in Sacramento on a recent afternoon, he spotted a small crowd of protesters battling state spending cuts. They wore shiny white buttons that said “We Love Jobs!” and argued that looming budget reductions will hurt the Golden State’s working class.

Mr. Williams shook his head. “They’re missing the real problem,” he said.

The working class may be taking a beating from spending cuts used to close a cavernous deficit, Mr. Williams said, but the root of California’s woes is its reliance on taxing the wealthy.  

Nearly half of California’s income taxes before the recession came from the top 1% of earners: households that took in more than $490,000 a year. High earners, it turns out, have especially volatile incomes—their earnings fell by more than twice as much as the rest of the population’s during the recession. When they crashed, they took California’s finances down with them.

Mr. Williams, a former economic forecaster for the state, spent more than a decade warning state leaders about California’s over-dependence on the rich. “We created a revenue cliff,” he said. “We built a large part of our government on the state’s most unstable income group.” …

March 24, 2011

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Fouad Ajami says Obama was right and we had no choice but to act in Libya.

The right thing, at last. The cavalry arrived in the nick of time. Help came as Moammar Gadhafi’s loyalists were at the gates of the free city of Benghazi. There was no mystery in the fate that awaited them. The despot had pretty much said what he intended. He would hunt down those who had found the courage to stand up to him, show them no mercy and no pity.

Secretary of State Hillary Clinton had seemed particularly obtuse. A decent opposition had coalesced in Benghazi—judges and teachers, businessmen and former members of the Ghadafi regime who wanted to cleanse the shame of their association with the tyranny. Rather than embrace them, rather than give them the diplomatic recognition that France would come to grant them, the secretary of state of the pre- eminent liberal power worried aloud that we didn’t know this opposition, that there were “opportunists” within their ranks. And to cap it all, Director of National Intelligence James Clapper took away from the uprising the slender hope that it could still hold back the tide. The despot, he said, out in the open for one and all to hear, was destined to prevail. …

 

David Harsanyi begs to differ.

… When queried about military interventionism (thanks to Gene Healy at the Washington Examiner for the tip) before the 2008 elections, in fact, Obama explained, “The President does not have power under the Constitution to unilaterally authorize a military attack in a situation that does not involve stopping an actual or imminent threat to the nation.”

No, he didn’t affix the phrase “unless we see humanitarian threats” or “except if the French and British find some good reason.”

Then again, maybe one of the problems is we now place too much stock in world opinion when making decisions. Democrats were so intensely focused on the lack of international support in Iraq, perhaps Obama confuses global approval with our interests. What’s worse than letting your “allies” or the United Nations decide whether you can go to war? It’s letting them tell you that you should go to war.

And when is that, exactly? The president hasn’t said. Yemeni forces have fired on protesters. Syrian forces have shot down protesters. Security forces in Tunisia have killed protesters. Why no help for those freedom fighters? What happens when Saudi Arabian royals are forced to use violence to hold power? Or Iran cracks down on another popular uprising? …

 

Elizabeth Scalia at the Anchoress Blog asks why the Dems had to trash Bush for so long when now they have decided he was right after all.

… I guess what I’m wondering is, how much further along would the Iraq government’s stabilization be — how much further along would the quest for democratic governance be, in the Middle East (and how much less reluctant would tyrants be to try to stop it by killing their own people), if only the Democrats hadn’t wasted 6 years politicizing our efforts and another two years bowing and scraping and restarting and gasbagging and doing everything they could to say, “we’re not Bush,” only to become all they said they hated?

In the end, all the politics, all the fury and drama and rhetoric delayed an inevitable desire and movement toward liberty, and perhaps costs lives.

In an era of record-breaking government spending and clear wastefulness, perhaps the past 8 years of politically-expedient dissent has been costliest waste of all. …

 

Just so says Mark Steyn, but he points out some problems.

… Or to put it another way: America picks up the tab for maintaining a global order that enables the rest of the planet to get rich selling stuff to Americans that Americans buy with borrowed money. Within a half-decade or so, American taxpayers will be spending more in interest payments on the US debt than on the Pentagon. And the portion of those interest payments that goes to Beijing will cover the entire cost of the Chinese military. Meanwhile, the Commies use the dough to buy up every useful bit of Africa plus resource-rich parts of Canada, Jamaica, Australia, etc.

From the ChiComs’ point of view, if this is a unipolar world, what’s not to like? The question is: what does America get from it?

Speaking of Steyn, he had a stream of consciousness over at The Corner.

… America is the brokest country in history. We owe more money than anyone has ever owed anyone. And Obama and Reid say relax, that’s no reason not to spend more — because the world hasn’t yet concluded we have no intention of paying it back. When they do, the dollar will collapse, like those buildings in Sendai. When that happens, it will make a lot of difference whether Americans react like the Japanese or Louisianans.

But, in the meantime, Barack Obama goes to Brazil and assures us that life’s a beach: Golf on, Mr. President.

How about a view of the 2012 race from inside the enemy camp. “Enemy” is anyone who thinks we have a president we should keep. Steve Kornacki writes for Salon.

… As a general rule, whenever presidential fields are dismissed as unusually weak or flawed, it’s a good idea to think back to late 1991 and early 1992, when virtually the entire political universe was convinced that the Democratic pack contained nothing but certain November losers.

This thinking was the product of President George H.W. Bush’s astronomical post-Gulf War popularity, which prompted every A-list Democrat to swear off a ’92 campaign, leaving the party to choose from five no-names (Paul Tsongas, Doug Wilder, Tom Harkin, Bob Kerrey and Bill Clinton) and one has-been (Jerry Brown). Their individual flaws were easy to spot, especially when Clinton was hit with allegations of womanizing and draft-dodging after seeming to separate himself from the pack. The economy was sputtering and Bush’s popularity was returning to earth, but well into ’92, the consensus persisted that the Democrats were doomed in November by their weak, flawed field. …

 

Amity Shlaes picks up from Andrew Ferguson’s book about college admissions with her own advice suggesting the school does not matter so much.

… The third misconception is that a top university affiliation is always and forever more valuable.

In 2006, E. Han Kim and Adair Morse of the University of Michigan, along with Luigi Zingales, then of Harvard, looked at research productivity in economics and finance faculty who had connections to the top 25 universities in their fields.

They found that those who were affiliated with a name school in the 1970s produced more, and more original, work, but that that effect declined in the 1980s and weakened further in the 1990s. Some of the cleverest, most useful papers come from the non-Harvards, non-Yales and non-Chicagos.

Another recent paper squelches the notion that a name university leads to higher earnings over the long run. …

 

Now HERE’s something off the beaten track.  A post in blog of the Institute for Ethics and Emerging Technologies claims there is no other intelligent life in the universe.

… As far as we can tell, we are alone in the universe. That is, human beings are the only technologically-advanced species for whom we have any evidence.

This observation is known as the Fermi Paradox. In 1950, the physicist Enrico Fermi famously wondered, “Where is everybody?” He was referring to the strange silence in the universe, the apparent lack of any advanced civilizations beyond Earth.

Fermi reasoned that the size and age of the universe would indicate that many technologically advanced extraterrestrial civilizations ought to exist. However, this hypothesis is inconsistent with the lack of observational evidence to support it.

So, where is everybody? Nowhere, it seems, or at least nowhere that we can detect.

Many explanations have been offered for this conundrum, with none coming even close to finding consensus. Physicists, astronomers, and philosophers are as far from answering the question today as when Fermi first posed it.

Perhaps the most disturbing aspect of the Fermi Paradox is what it suggests for the future of our human civilization. Namely, that we have no future beyond earthly confinement and, quite possibly, extinction. …

March 23, 2011

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We did not overlook the massacre at Itamar. Jeff Jacoby tells us about the Palestinian beasts.

The killers started with Yoav, the Fogels’ 11-year-old, and Elad, his 4-year-old brother. Yoav’s throat was slit, and Elad was stabbed twice in the heart. Then the attackers murdered Ruth, knifing her as she came out of the bathroom. In the next room they killed Ruth’s sleeping husband, Udi, and their infant daughter, Hadas. Apparently they didn’t notice the last bedroom, where the two other boys, Ro’i, 8, and Yishai, 2, were asleep. It wasn’t until half past midnight, when 12-year-old Tamar came home from a Friday night youth group, that the horrific slaughter was discovered. Much of the house was drenched in blood, and the 2-year-old was shaking his parents’ bodies, crying for them to wake up.

What explains such unspeakable evil? What sort of human being deliberately butchers a sleeping baby, or plunges a knife into a toddler’s heart?

As news of the massacre in Itamar spread, candy and pastries were handed out in Gaza in celebration. …

 

Ed Koch writes in Real Clear Politics about FDR’s lack on concern for Jews.

The latest Palestinian violence against Israelis, and the continuing abandonment of Israel by most of the international community, inevitably bring to mind the abandonment of the Jews during the Holocaust. Just this past week, a document emerged which raises disturbing new questions about President Franklin Roosevelt’s response to the Nazi mass murder of Europe’s Jews.

The document was brought to my attention by Dr. Rafael Medoff, a Holocaust scholar and director of The David S. Wyman Institute for Holocaust Studies, in Washington, DC. Several years ago, Dr. Medoff collaborated with me on my book “The Koch Papers: My Fight Against Anti-Semitism.” It was based on my writings and speeches about the Holocaust and anti-Semitism, during the course of my nine years in Congress and twelve as mayor of New York City.

The document which Dr. Medoff sent me last week, concerning FDR and the Holocaust, was frankly shocking. It had to do with the Allies’ occupation of North Africa, which they liberated from the Nazis in November 1942. …

Tony Blankley picks up on the name game started here by Craig Pirrong two days ago.

Amidst all the confusion over our new little war in Libya, one thing is clear: Notwithstanding the bravery and professionalism of our troops in naming it Operation Odyssey Dawn, the Pentagon has invoked a haunting specter. The war’s namesake  Homer’s epic poem “The Odyssey”  is the tale of the hero, Odysseus, taking 10 years to get home from the Trojan War  which itself took 10 years to fight.

In fairness to the Pentagon, when the Germans started their ill-fated campaign in Tripoli in February 1941  which was to be lost because of a too long and thin logistics line  they too had difficulty, calling it Operation Sonnenblume (Sunflower). As the German historian Wolf Heckmann drolly noted of the Wehrmacht High Command: “Unconsciously, someone had hit upon the perfect symbol: a huge and showy flower at the end of a long and rather fragile stem.”

This whole business of christening wars with catchy names is curious. …

Stanley Kurtz in a Corner Post lays open the president’s hidden agenda.

Obama doesn’t tell you what he’s thinking. He keeps his motives to himself. Cherished long-term ideological goals are advanced as pragmatic fixes to concrete problems in the present. Now we’re seeing the familiar domestic pattern in foreign policy as well.

Few Americans realize that Obama has had a longstanding interest in multilateral efforts to combat war crimes and genocide. Obama would like to see a more constraining international legal regime on war crimes, even at the cost of national sovereignty, not to mention the blood and treasure of the countries doing the enforcing. In general, Obama has said little about his larger foreign policy goals. To the extent that he has done so, Obama seems more the “realist” than an advocate of humanitarian intervention.

Yet for years, Samantha Power, a prominent advocate of humanitarian intervention and a key backer of our action in Libya, has been a powerful member of Obama’s foreign policy team. In 2005, Obama contacted Power after reading her book on genocide. There followed a long conversation, after which Power left Harvard to work for Obama, quickly emerging as his senior foreign policy advisor. …

 

It is not just our favorites. Here’s Richard Cohen from WaPo.

In the Oval Office, President Obama keeps busts of his heroes — Abraham Lincoln and Martin Luther King Jr. He should add one of Milton Berle, the so-called Mr. Television of the 1950s. Berle used to signal his studio audience to both continue and stop applauding by holding up one hand to wave them on and another to quiet them. This is the president’s Libya policy in a nutshell.

The Berle Doctrine, the closest thing this administration has to a coherent foreign policy, has almost certainly cost lives. It entailed a heroic amount of dithering as the Obama administration first went to war with itself — to intervene or not to intervene — with the so-called boys (Bob Gates, Tom Donilon) arguing with the girls (Hillary Clinton, Susan Rice, Samantha Power), a summer-camp metaphor unbecoming the seriousness of the situation. Clinton ultimately got her no-fly zone but claimed no credit. “We did not lead this,” she said in Paris.

That’s for sure. The French did this, with President Nicolas Sarkozy saying “France has decided to assume its role, its role before history.” …

 

Mark Steyn has earth shaking thoughts.

 ‘Why is there no looting in Japan?” wondered a headline in the Daily Telegraph. So did a lot of other folks. Various answers were posited:

The Japanese are a highly civilized people — which would have been news to the 22 British watchkeepers on the island of Tarawa who were tied to trees, beheaded, set alight, and tossed in a pit less than 70 years ago.

Alternatively, Japan enjoys the benefits of being an ethnically homogeneous society — which didn’t prevent the ethnically homogeneous West Country of Britain from being wracked by widespread thievery during the floods of 2007.

Most analysts overlooked the most obvious factor: Looting is a young man’s game, and the Japanese are too old. They’re the oldest society on earth. …

Christopher Hitchens missed his Slate column this week. First time in almost a year and a half. Actually, the only time we can find is a two week period from March 27, to April 10, 2006. We got tired of looking after that. Point is, his column is overdue. Number two son says Hitchens cancelled a speaking engagement two weeks out.

March 22, 2011

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A reporter from the German magazine der Spiegel traveled to the town in Tunisia where the Arab revolt started in December.

She kneels at her son’s grave in the dust of the Tunisian steppes, a black hijab framing her deeply wrinkled face, as she rocks back and forth and speaks loudly to herself.

“God have mercy on your soul, and may your blood not have been shed in vain.” A woman walks up to her and says: “You gave us a son who liberated us all.”

It is a simple grave marked by a gray block of cement on the edge of a family cemetery. The grave points toward Mecca, and a Tunisian flag next to it is fluttering in the wind. Her husband, gaunt and silent, has mixed a batch of cement to attach a marble plaque to the grave. The inscription reads: “The martyr Mohamed Bouazizi, born on March 29, 1984, died on January 4, 2011.”

When Bouazizi, a Tunisian fruit seller, set himself on fire, he inflamed the entire Arab world. Bouazizi’s mother and her husband have come to install a headstone and paint the grave white, as is customarily done after the 40th day after death. They are three weeks late. A lot has been going on in recent weeks.

A television crew drove the parents to the gravesite, she almost never leaves her home without a camera following her. As each day passes, Bouazizi’s mother becomes less and less like a real person. She seems to be in the process of transforming herself into a monument of grief, the mother of a holy figure.

An Icon of Freedom

Her son’s face appears on banners throughout the country, as an icon of freedom and a symbol of the origin of the revolution that brought down the Tunisian dictator, his Egyptian counterpart, and triggered uprisings in Algeria, Yemen, Bahrain, Jordan and Libya.

Anyone who follows Manoubia Bouazizi, the mother of the dead fruit seller, is hoping for answers to questions that all the images of street battles and cheering revolutionaries cannot provide. Why did it all begin in a dusty town in Tunisia? And how does a revolution affect the people in the place where it began? How does it change their lives? What does a democracy in its infancy look like?

Mohamed Bouazizi lived in Sidi Bouzid, a small city of 40,000 people about 200 kilometers (125 miles) south of the capital Tunis in the highland steppes. Its residents, who complain that Sidi Bouzid doesn’t even appear on the television weather report map, feel forgotten by their country and the rest of the world. …

… The fact that they are part of the same family, Mohamed, the icon of the revolution, and Ridha, the handicapped fruit seller, doesn’t make his life any easier. Sometimes, when Ridha is standing behind his cart, the other vendors come to him and say: “You made a pretty penny with that story about your nephew. We saw how the journalists invited you to their hotels and gave you money. Maybe you can finally afford a prosthetic leg now.”

A new spirit has taken hold in Sidi Bouzid, a spirit of envy and malicious gossip. Those who knew Mohamed Bouazizi are seen as profiteers of the revolution, while those who didn’t know him ask themselves when they will finally profit from the changes that have taken place.

Ridha sits on both sides of this fence. When he feels the need to defend himself, he talks about his sister, the mother of the victim, a woman whom he thinks has made money from the death of her son. He hasn’t spoken with his sister since she was invited to Ben Ali’s palace at the end of December. He wasn’t allowed to go along, because he wasn’t deemed important enough. Mohamed’s death brought him a new spot for his fruit cart and brought his sister 20,000 dinars, which the dictator promised her as compensation. Ridha sees no justice in democracy.

His sister is now the new elite in the town, as evidenced by the fact that she is now the target of malicious gossip. There are rumors of rich donors from Gulf countries and tales of her arrogant behavior at the supermarket and in the bank.

Manoubia Bouazizi, the mother of a hero, is sitting on a bench, warming her hands with a pot, in the inner courtyard of her narrow three-room house, which includes a kitchen and an entry hall. She says no one gave her money. A new computer with an Internet connection is visible in one of the rooms. Basma, the 15-year-old sister of Mohamed Bouazizi, is sitting in front of the computer.

She is now a member of Facebook.

 

Mary Anastasia O’Grady writing in the Journal says the trip to Brazil is important. 

President Obama’s trip to Brazil, Chile and El Salvador this week, while war rages in Libya, has been sharply criticized as proof of dangerous detachment from a world that badly needs U.S. leadership.

Yet there is a case to be made for going—to Brazil anyway. Arguably Santiago and San Salvador could have been postponed. Chile is already a stable ally and the stop in El Salvador, to mouth platitudes about hemispheric security while Central America is going up in narco-trafficking flames, only highlights the futility of the U.S. war on drugs.

Going to Brasilia to meet with Workers’ Party President Dilma Rousseff on Saturday, on the other hand, was important. …

 

Jennifer Rubin has kind words for Marco Rubio.

The 2012 presidential field is not all that impressive. Romney has RomneyCare. Newt Gingrich has Speaker Gingrich. And Mississippi Gov. Haley Barbour has a race issue and a does-not-know-anything-about-important-topics issue. But if we look beyond the field, there are plenty to impress.

Gov. Scott Walker is gaining popularity within the GOP for standing up to public-employee unions. New Jersey Gov. Chris Christie has mastered the art of governing and the game of playing the national media like a violin. And then there is Sen. Marco Rubio (R-Fla.).

He has eschewed national media. He has become an expert at grilling nominees (mostly recently the State Department’s William Burns on Libya and our hapless trade representative). And he has focused on rather few issues that have importance in his home state as well as for the nation as a whole. …

 

Interesting New Yorker piece on post disaster growth.

… In a study of eighty-nine countries, the economists Mark Skidmore and Hideki Toya, after controlling for every variable they could think of, found that countries that suffered more climatic disasters actually grew faster and were more productive. This seems bizarre: it’s close to the broken-windows fallacy identified by the nineteenth-century economist Frédéric Bastiat—the idea that breaking windows is economically useful, because it makes work for glaziers. But Skidmore and Toya argue that disaster-stricken economies don’t simply replace broken windows, as it were; they upgrade infrastructure and technology, and shift investment away from older, less productive industries. (After the Kobe quake, the city’s plastic-shoe factories never returned.) In Horwich’s somewhat ruthless phrase, disasters can function as a form of “accelerated depreciation.” Something similar often happens on the level of the individual consumer: homeowners rebuilding after a disaster take the opportunity to upgrade, a phenomenon known as “the Jacuzzi effect.” In ordinary times, inertia keeps old technologies in place; it may be easier to make dramatic changes when you have to start from scratch.

Still, the impact of any given disaster depends on a variety of factors. Skidmore and Toya have found that geological disasters don’t seem to have the same effects on growth rates as climatic disasters. And growth rates seem to be resilient only for relatively wealthy, well-run countries …

March 21, 2011

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David Warren thinks about what we have unlearned.

… It was the ancient wisdom, in all sentient cultures, to stay when possible out of harm’s way. While watching those videos, it suddenly occurred to me why, in the archeology of ancient Greek ports in the Aegean Islands, the houses all seem to go up the nearest hill. Noticing this years ago, I’d thought, “Why the extra walk and climb? Was it just for the lovely view?”

Well, the Aegean Sea floor is earthquake prone, and all these islands are at risk of tsunamis. Perhaps from the living oral history of their own ancestors, these islanders had learned.

The civilization of the Nile was built around the annual inundation of the river; the houses once again erected on higher ground. The floods brought rich new sediment to the fields. But since the building of the immense Aswan hydroelectric works, it has been piling up instead, quite counter-productively, behind the dam. At the mouth of the river, the great fertile Egyptian delta is now shrinking away: eaten by the sea without replenishment. (It is a joke when this is attributed to “global sea rise.”)

It never made sense to build on river floodplains, or along the drainage path of a volcano, or on the low sands of a coastal hurricane strip.

Our ancestors didn’t do that sort of thing from choice. They’d farm danger zones, but not build in them. We only started doing that with modern developers, and modern building codes, after modern environmental studies, etc.

In each of these cases, and innumerable more, we see the modern tendency to confront nature, rather than playing along with her. There is a restlessness and impatience in our souls, which expresses itself in hubris, arrogance. This extends to grand egalitarian projects to change human nature, in variants of Stalin’s ambition to be “the engineer of human souls.”

Nature eventually defeats every such enterprise.

To paraphrase the Citizen’s inimitable Dan Gardner, it takes a lot of schooling, investment, and technology, to become stupid. Or if I might twist Hillary Clinton: “It takes a big city to raise an idiot.” …

 

Having been a cheerleader for Obama and his works, it takes a little cheek for The Economist to claim they’ve always favoured a smaller state. We’ll take it where ever we find it.

“IF SOMETHING cannot go on for ever, it will stop,” Herb Stein once observed caustically. The American economist’s aphorism has proved apt of late—as applicable to Hosni Mubarak’s regime as it was to America’s rising property prices. Could it apply to the growth of the state?  

Government comes in many shapes and sizes. In some parts of the world, the state is too small. In Guatemala, where the tax take is around a tenth of GDP, private security guards are five times more numerous than the police and army combined. But most of the world has the opposite problem. The state has kept on grabbing an ever larger share of the economy in the rich world for a century (see chart), and the state’s regulatory sweep has increased as well.

As our special report this week concludes, the forces driving this growth are powerful—but so are the reasons why it needs to be halted. As a liberal paper, The Economist has long favoured a smaller state; but there are pragmatic grounds now for politicians of all sorts to make the state more productive. With ageing populations to care for, many rich-world governments are on course for bankruptcy—unless they raise taxes to levels that would wreck their economies. And emerging markets are watching, keen to cater to the demands of their ever richer citizens—and also to avoid the mistakes of the West. …

 

The administration’s Libyan flip flops are the subject of a few posts now. Craig Pirrong, the Streetwise Professor is first.

The names of military operations can give a glimpse into the mindset of those in charge. For instance, Overlord, Dragoon, Husky, Torch, all from WWII.  These names connote strength, power, dominance.  In Viet Nam, Rolling Thunder was evocative of the administration strategy of threatened escalation; its successor operations, Linebacker I and Linebacker II, connoted something far different, a determination to hit the enemy hard.  (This was the era of Dick Butkus and Ray Nitschke; people knew that linebackers inflicted pain and knocked people out.)  More recently, Desert Storm and Iraqi Freedom were quite descriptive of American intentions.  My favorite operational name is Ripper, the sobriquet given by Matthew Ridgeway to the offensive to push Chinese forces back to the 38th parallel and to retake Seoul.  That name oozed aggressiveness and violence.

And today, the Obama administration brings us . . . Operation Odyssey Dawn?  That sounds like the name of some kid born at a California commune, circa 1970.  Operation Odyssey Dawn?  Really?  What does that mean, exactly?

The best explanation I can come up with is that the Pentagon is trying to warn the country that we’re at the beginning of a long, strange trip.  And they may be right. …

 

Roger Simon thinks Hillary has assumed the presidency.

Only Barack Obama could make Nicolas Sarkozy look good.

Why did it take our president so long to act in Libya with the international community fairly begging us to do something? Is it because there is a weird similarity between Muammar Gaddafi and the Reverend Jeremiah Wright — both men jawing on publicly with radical rhetoric while privately enriching themselves to the maximum degree possible in their individual instances? (Easy to imagine Wright as a Third World despot.)

Or is it just Obama’s natural predilection to do nothing that we first saw writ large when he failed to support the democracy demonstrators in the streets of Teheran in ’09? …

 

Nile Gardiner has the last of these comments.

Earlier this week I gave an interview to Fox News, talking about how the president seems paralysed in the face of the Libyan crisis, as Colonel Gaddafi’s forces make progress towards the rebel stronghold of Benghazi, leaving death and destruction in their wake. While Barack Obama has dithered, and his Secretary of State has worshipped at the altar of the United Nations, one of the most brutal tyrants on the face of the earth is getting away with murder, with a death toll that could reach as high as 15,000. It is a sad day when the foreign policy of the United States, the world’s greatest power, is subordinated to the whims of the UN, for decades a playground for dictators and unabashed anti-Americanism. …

 

The Wall Street Journal’s Weekend Interview is with Paul Singer.

At the height of the housing bubble, hedge-fund manager Paul Singer was shorting subprime mortgages. By the spring of 2007, he was warning regulators on both sides of the Atlantic that the world was facing a major financial crisis.

They ignored him. Now the founder of Elliott Management says the biggest banks are headed for another credit meltdown. Among the likely triggers for the next crisis, Mr. Singer sees one leading candidate: Monetary policy “is extremely risky,” he says, “the risk being massive inflation.”

In some areas gas prices have reached $4 per gallon, and now Americans must brace themselves for higher grocery bills. This week the Labor Department reported that February wholesale food prices posted their sharpest increase since 1974. News like that has driven Mr. Singer to the history books: He treats visitors to his 5th Avenue office to a copy of a 1931 treatise on German currency debasement, Constantino Bresciani-Turroni’s “The Economics of Inflation.”

Mr. Singer—who launched Elliott in 1977 and has delivered a 14.3% compound annual return (compared to the S&P 500′s 10.9%)—is not comparing today’s Federal Reserve to the Reichsbank of the early 1920s. Rather, he’s once again warning financial regulators. This time the message is: Don’t take for granted investor faith in a major currency.

While at Harvard Law School, Mr. Singer turned down a research job with his intellectual hero, Daniel Patrick Moynihan, to pursue a career in finance. Today, he’s still looking for heroes among the stewards of the major currencies. Central bankers, particularly at the Fed but also in Europe, “seem to be acting as if they have unlimited flexibility to ease monetary policy,” he says.

He specifically targets the Fed’s “unprecedented” policy of sustaining near-zero interest rates and its exercise in money-printing, “Quantitative Easing 2,” that has it buying medium- and longer-term securities from the Treasury. “In effect they’re treating confidence in fiat money—in paper money—as inexhaustible, that it’s a tool that’s able to be used not just in the throes of crisis,” but also as “a virtually complete substitute for sound fiscal, regulatory and taxing policy.”

Fed officials, he adds, “really seem to think that inflation is something they can deal with very easily and very quickly. I don’t believe they’re right.” He notes that, in the late 1970s, inflation was only in the high single digits yet curing it required interest rates of 20% and a collapse of the bond market. …

March 20, 2011

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Charles Krauthammer has more on social security.

Last week, President Obama’s budget chief, Jack Lew, took to his White House blog to repeat his claim that the Social Security trust fund is solvent through 2037. And to chide me for suggesting otherwise. I had argued in my last column that the trust fund is empty, indeed fictional.

If Lew’s claim were just wrong, that would be one thing. But it provides the intellectual justification for precisely the kind of debt denial and entitlement complacency that his boss is now engaged in. Therefore, once more unto the breach.

Lew acknowledges that the Social Security surpluses of the last decades were siphoned off to the Treasury Department and spent. He also agrees that Treasury then deposited corresponding IOUs — called “special issue” bonds — in the Social Security trust fund. These have real value, claims Lew. After all, “these Treasury bonds are backed by the full faith and credit of the U.S. government in the same way that all other U.S. Treasury bonds are.”

Really? If these trust fund bonds represent anything real, why is it that in calculating national indebtedness they are not even included? …

 

Kimberley Strassel writes on President ‘Present’.

One knock on Barack Obama in the 2008 election was his record as an Illinois state senator, where he repeatedly ducked tough issues by voting “present.” It seems old habits die hard.

If you’d like to know where the leader of the free world stands on those NCAA rankings, just turn on ESPN. (“I think Kansas has more firepower,” he explained as he filled out his bracket.) Wondering what the commander in chief thinks about gun laws? Don’t worry—he’s in favor of those already on the books, according to a recent op-ed.

If, however, you are curious about where the most powerful man in the universe stands on Libya, radiation, a possible government shutdown, the future of Social Security, or rising oil prices, don’t look to the White House. Those issues are tough. Those issues risk mistakes. Those issues might mean unhappy voters. And right now, it’s approval ratings the White House cares about. …

 

Jennifer Rubin says Hillary and her friends are getting the excuses in gear.

Secretary of State Hillary Clinton has presided over a foreign policy racked by timidity, inconsistency and indecision. And, if this account from The Daily is to be believed, she knows it:

‘ “Obviously, she’s not happy with dealing with a president who can’t decide if today is Tuesday or Wednesday, who can’t make his mind up,” a Clinton insider told The Daily. “She’s exhausted, tired.”

He went on, “If you take a look at what’s on her plate as compared with what’s on the plates of previous Secretaries of State — there’s more going on now at this particular moment, and it’s like playing sports with a bunch of amateurs. And she doesn’t have any power. She’s trying to do what she can to keep things from imploding.”

Clinton is said to be especially peeved with the president’s waffling over how to encourage the kinds of Arab uprisings that have recently toppled regimes in Egypt and Tunisia, and in particular his refusal to back a no-fly zone over Libya. ‘

 

Jay Cost takes a look at polls for the 2012 race.

The invisible phase of the presidential campaign is upon us, as prospective GOP nominees are traveling to Iowa, New Hampshire, and South Carolina, meeting with donors, and of course making appearances on Sunday news programs to deny that they have any interest in the party nomination. And with all this nonsense (for which we can pin much of the blame on George McGovern!), we are also now getting a stream of election polling. Right now, it is but a stream, but soon it will turn into a raging river — with multiple polls coming out every day telling us which Republican is up, which is down, and which has been left for dead.

Before we get to that point, we’d better learn how to navigate those treacherous waters, and so today’s Morning Jay is meant as an initial primer on the 2012 polls.

To get us started, let’s flash back in time, to the Spring of 1967. The Monkees are at the top of the charts, Gilligan’s Island is ending its run (spoiler alert: they don’t make it home), and New York governor Nelson Rockefeller has quietly thrown his support (and his money) to Michigan governor George Romney, who has already announced the exploratory phase of a campaign to seek the GOP nomination. In May of that year, Gallup dutifully conducted a poll asking Americans whom they would support — Romney or incumbent Lyndon Johnson. Romney had a slight edge — 46 percent to 42 percent. 

Can you imagine how that result would have set all the tongues wagging back then if 1967 had the kind of political class that we have today? My goodness! The chitter chatter of the talking heads on the cable news would have been nonstop! As it turned out, neither Romney nor LBJ ended up as nominees …

 

We thought she had finally disappeared, but Helen Thomas has raised her increasingly ugly head.

Veteran reporter Helen Thomas turned up in Playboy magazine this month (fully clothed, don’t worry) as part of her ongoing anti-Semitic publicity tour.

The former “dean” of the White House Press Corps sat down for an interview (link is to the Sun Herald’s summary) about her recent controversy. First she weighed in on the aftermath of her remarks about Israel last May (“I went into self-imposed house arrest”) and her views on the situation in the Palestinian territories (“the Palestinians have been shortchanged in every way”). But then the interview took an uglier turn. …

 

Forbes tells us how things are going with sales of Chevy’s Volt.

… Volt sales are anemic: 326 in December, 321 in January, and 281 in February. GM announced a production run of 100,000 in the first two years. Who is going to buy all these cars?

Another reason they aren’t exactly flying off the lots is because, well, they have some problems. In a telling attempt to preserve battery power, the heater is exceedingly weak. Consumer Reports averaged a paltry 25 miles of electric-only running, in part because it was testing in cold Connecticut. (My engineer at the Auto Show said cold weather would have little effect.)

It will be interesting to see what the range is on a hot, traffic-jammed summer day, when the air conditioner will really tax the batteries. When the gas engine came on, Consumer Reports got about 30 miles to the gallon of premium fuel; which, in terms of additional cost of high-test gas, drives the effective mileage closer to 27 mpg. A conventional Honda Accord, which seats 5 (instead of the Volt’s 4), gets 34 mpg on the highway, and costs less than half of what CR paid, even with the tax break.

Recently, President Obama selected General Electric CEO Jeffrey Immelt to chair his Economic Advisory Board. GE is awash in windmills waiting to be subsidized so they can provide unreliable, expensive power.

Consequently, and soon after his appointment, Immelt announced that GE will buy 50,000 Volts in the next two years, or half the total produced. Assuming the corporation qualifies for the same tax credit, we (you and me) just shelled out $375,000,000 to a company to buy cars that no one else wants so that GM will not tank and produce even more cars that no one wants. And this guy is the chair of Obama’s Economic Advisory Board? …

 

The Wall Street Journal tells us how the government has ruined clothes washers. 

It might not have been the most stylish, but for decades the top-loading laundry machine was the most affordable and dependable. Now it’s ruined—and Americans have politics to thank.

In 1996, top-loaders were pretty much the only type of washer around, and they were uniformly high quality. When Consumer Reports tested 18 models, 13 were “excellent” and five were “very good.” By 2007, though, not one was excellent and seven out of 21 were “fair” or “poor.” This month came the death knell: Consumer Reports simply dismissed all conventional top-loaders as “often mediocre or worse.”

How’s that for progress?

The culprit is the federal government’s obsession with energy efficiency. Efficiency standards for washing machines aren’t as well-known as those for light bulbs, which will effectively prohibit 100-watt incandescent bulbs next year. Nor are they the butt of jokes as low-flow toilets are. But in their quiet destruction of a highly affordable, perfectly satisfactory appliance, washer standards demonstrate the harmfulness of the ever-growing body of efficiency mandates. …