Fire Hydrant of Freedom

http://www.dickmorris.com/rebuttal-to-obamas-big-oil-smear-on-romney/?utm_source=dmreports&utm_medium=email&utm_campaign=signup

Henninger: The Great Human-Rights Reversal
The Democratic left has conceded human rights to the conservatives. By DANIEL HENNINGER

It's a question that keeps coming up: Is it just everyone's imagination or has the human-rights agenda been demoted by Barack Obama?

The unflattering word often associated with Mr. Obama and human rights is "ambivalence." When Iranian students took to the streets in 2009, enduring beatings from security men, the president's muted reaction was noted. So too with the Arab Spring and when Libyans revolted against Moammar Gadhafi. Yes, the administration responded in time but, again, with "ambivalence."

Now comes a human-rights advocate from central casting: the blind Chinese dissident Chen Guangcheng, who showed up unannounced on Uncle Sam's Beijing doorstep. The U.S. government appeared displeased with Mr. Chen's ill-timed decision to go over the wall.

Liberals and Democrats who work on human-rights issues won't like to hear this, but with the Obama presidency, human rights has completed its passage away from the political left, across the center and into its home mainly on the right—among neoconservatives and evangelical Christian activists.

Conservatives didn't capture the issue. The left gave it away.

The official formulation of the left's revision of human rights came two months into the Obama presidency, with Secretary of State Hillary Clinton's widely noted comment in Beijing that the new administration would be going in a different direction: "Our pressing on those issues [human rights] can't interfere with the global economic crisis, the global climate change crisis and the security crisis."

Human-rights groups went ballistic, perhaps on hearing their cause would compete for the president's time with the "global climate change crisis." Whether Iran, Libya or China, human rights as understood for a generation was on the back burner, with the heat off.

Human rights became an explicit concern of U.S. presidents under Jimmy Carter. Mr. Carter in 1977 was not a man of the left. On foreign policy he was a starry-eyed liberal. He elevated the State Department's human-rights office to assistant-secretary status and gave the job to a fellow stargazer, Pat Derian.

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U.S. Embassy officials in transit with Chen Guangcheng (right).
.Most of Mr. Carter's human-rights initiatives fell apart, but the idea didn't die. In varying degrees, his successors all made human rights part of their formal agenda. Worth noting here is that in the late 1990s, Christian evangelical groups (the "religious right") began a successful effort to create an office of religious freedom inside the State Department. Today these Christian groups are the primary human-rights workers on behalf of Chinese and North Korean dissidents and refugees.

The big disruption, the event that drove the Democratic left off the human-rights train, was George W. Bush's "freedom agenda."

More than any previous president, George Bush joined human-rights issues to the support of democracy, including in Iraq. With the Bush presidency, human rights and democracy-promotion were combined into a single issue. That in turn joined two groups working these veins for years—neoconservatives and religious human-rights groups. The left went into opposition.

The standard, almost official explanation for this administration's equivocations on human rights is that the current generation of Democratic foreign-policy intellectuals want the U.S. to pursue its goals inside the "pragmatic" framework of international institutions or alliances, rather than "going it alone." Progressive realpolitik.

Thus Barack Obama supported the Libyan rebels only after public opinion believed France, Britain and such were along for the ride. Under Mr. Obama, the U.S. joined the U.N. Human Rights Council.

There's more to the turn than this.

Barack Obama is not a traditional, internationalist Democrat in the mold of such party elders as John Kerry or Joe Biden. Mr. Obama is a man of the left. His interests are local. The Democratic left can only be understood on any subject if placed inside one, unchanging context: the level of public money available for their domestic policy goals.

It's never enough. And standing between them and Utopia is a five-sided monument to American power across the Potomac.

Whether a U.S. president is arguing on behalf of a single human-rights dissident (Chen Guangcheng), a whole nation's anti-authoritarian aspirations (Syria, Libya, Iraq) or against nuclear-weapons programs (Iran, North Korea), the possibility of exercising U.S. military assets sits inevitably in the background. Across the entire, 60-year postwar period, that reality and the spending necessary to maintain it has been the real source of the left's "ambivalence" toward the projection of American power into the world.

The intellectual arguments on behalf of subsuming U.S. interests inside international agencies and the like is mainly about diluting formerly bipartisan justifications for maintaining postwar spending levels on the American military.

The Obama White House put a bull's-eye on the defense budget from the start. This February, Mr. Obama proposed cutting $487 billion over 10 years, atop the threatened automatic sequester of $500 billion. That's their untapped pot of domestic gold.

Such a strategy implies a drawdown of U.S. capability to lead in the world. For the left and Barack Obama, the trade-off in terms of revenue feedbacks into domestic spending is worth it. As such, the human-rights problem of a Chen Guangcheng in faraway Shandong is a distracting footnote to the new Democratic generation's larger purposes.

Liberals discomfited by this will have to come to terms with the fact that it will take a different kind of Democratic presidency to alter their party's stated equivalence between human-rights aspirants and climate change.

Richard Lugar has been a fine Senator for 36 years, but his final primary campaign days help explain why he won't be returning for six more years in 2013. As he attempted to defeat a conservative challenger on Tuesday, the 80-year-old Indiana incumbent resorted to the hoariest status quo gambit of scaring seniors on Social Security.

In one of his final TV ads, the Lugar campaign showed an older woman in a red sweater drinking tea while text on the screen declares that "Richard Mourdock has a plan to cut every senior's Social Security by nearly $2,500 a year."

Granny then elaborates: "He's not thinking, is he? No idea of consequences, what this means to people. He's going to ruin people, I mean, some can't get along without Social Security, every penny of it. I guess he wants to be as opposite as he can, believing that will get him votes. The scary thing is, is what if it does? Heaven help us, because Mourdock won't."

Down in the polls among Republicans, Mr. Lugar was making a last-ditch attempt to attract Democrats and independents to save him by voting in the GOP Senate primary. His campaign based the ad on the fact that Mr. Mourdock, the Indiana state treasurer, had endorsed Paul Ryan's House budget. So the Senator took a demagogic shot at the one serious attempt to reform entitlements that everyone knows must be reformed.

 Columnist Kim Strassel makes sense of Republican challenger Richard Mourdock's blow-out victory over Indiana Senator Dick Lugar. Photo: Getty Images
.This isn't "statesmanship" of the kind that the Washington elite attribute to Mr. Lugar. It's a desperate attempt to hold onto a job by spreading fear. In short, it is the kind of politics as usual that prevents serious reform of government.

In the event, Mr. Lugar lost with only 40% of the vote, which is hard to do if you are an incumbent, especially one as personally well-liked as the six-term incumbent has been. As recently as 2006, Mr. Lugar won with 87% of the vote. But in recent years, he failed to see that Republican voters want their representatives in Washington to provide more forceful opposition to President Obama's agenda.

None of this is to erase Mr. Lugar's contributions over the years. We'd cite his timely intervention to persuade Ronald Reagan to ease Ferdinand Marcos from power in the Philippines without bloodshed in 1986 and the Nunn-Lugar program to chop up Soviet missiles. Note, however, that these are foreign policy achievements and this election year the voters are focused on America's domestic problems.

The Beltway class is aflutter that Mr. Lugar's defeat has put another safe GOP Senate seat in play, and perhaps it has. Mr. Mourdock will face Democratic Representative Joe Donnelly in November, and at a minimum Republicans will have to spend more money than they had planned if they want to prevail.

Mr. Mourdock has already won two statewide races, however, and he is a serious man with a grasp of the issues. He is not another Sharron Angle or Christine O'Donnell, the tea party candidates who lost seats in Nevada and Delaware that Republicans should have won in 2010. Mr. Mourdock's backers at the Club for Growth and Freedom Works now have an obligation to support him in the autumn.

The lesson of the Lugar upset, however, is not that the provincial yahoos defeated a statesman. It's that a Senator who had served for nearly four decades lost touch with how much voters want to change Washington.

By ROBERT J. BARRO
The weak economic recovery in the U.S. and the even weaker performance in much of Europe have renewed calls for ending budget austerity and returning to larger fiscal deficits. Curiously, this plea for more fiscal expansion fails to offer any proof that Organization for Economic Cooperation and Development (OECD) countries that chose more budget stimulus have performed better than those that opted for more austerity. Similarly, in the American context, no evidence is offered that past U.S. budget deficits (averaging 9% of GDP between 2009 and 2011) helped to promote the economic recovery.

Two interesting European cases are Germany and Sweden, each of which moved toward rough budget balance between 2009 and 2011 while sustaining comparatively strong growth—the average growth rate per year of real GDP for 2010 and 2011 was 3.6% for Germany and 4.9% for Sweden. If austerity is so terrible, how come these two countries have done so well?

The OECD countries most clearly in or near renewed recession—Greece, Portugal, Italy, Spain and perhaps Ireland and the Netherlands—are among those with relatively large fiscal deficits. The median of fiscal deficits for these six countries for 2010 and 2011 was 7.9% of GDP. Of course, part of this pattern reflects a positive effect of weak economic growth on deficits, rather than the reverse. But there is nothing in the overall OECD data since 2009 that supports the Keynesian view that fiscal expansion has promoted economic growth.

For the U.S., my view is that the large fiscal deficits had a moderately positive effect on GDP growth in 2009, but this effect faded quickly and most likely became negative for 2011 and 2012. Yet many Keynesian economists look at the weak U.S. recovery and conclude that the problem was that the government lacked sufficient commitment to fiscal expansion; it should have been even larger and pursued over an extended period.

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 .This viewpoint is dangerously unstable. Every time heightened fiscal deficits fail to produce desirable outcomes, the policy advice is to choose still larger deficits. If, as I believe to be true, fiscal deficits have only a short-run expansionary impact on growth and then become negative, the results from following this policy advice are persistently low economic growth and an exploding ratio of public debt to GDP.

The last conclusion is not just academic, because it fits with the behavior of Japan over the past two decades. Once a comparatively low public-debt nation, Japan apparently bought the Keynesian message many years ago. The consequence for today is a ratio of government debt to GDP around 210%—the largest in the world.

This vast fiscal expansion didn't avoid two decades of sluggish GDP growth, which averaged less than 1% per year from 1991 to 2011. No doubt, a committed Keynesian would say that Japanese growth would have been even lower without the extraordinary fiscal stimulus—but a little evidence would be nice.

Despite the lack of evidence, it is remarkable how much allegiance the Keynesian approach receives from policy makers and economists. I think it's because the Keynesian model addresses important macroeconomic policy issues and is pedagogically beautiful, no doubt reflecting the genius of Keynes. The basic model—government steps in to spend when others won't—can be presented readily to one's mother, who is then likely to buy the conclusions.


Keynes worshipers' faith in this model has actually been strengthened by the Great Recession and the associated financial crisis. Yet the empirical support for all this is astonishingly thin. The Keynesian model asks one to turn economic common sense on its head in many ways. For instance, more saving is bad because of the resultant drop in consumer demand, and higher productivity is bad because the increased supply of goods tends to lower the price level, thereby raising the real value of debt. Meanwhile, transfer payments that subsidize unemployment are supposed to lower unemployment, and more government spending is good even if it goes to wasteful projects.

Looking forward, there is a lot to say on economic grounds for strengthening fiscal austerity in OECD countries. From a political perspective, however, the movement toward austerity may be difficult to sustain in some countries, notably in France and Greece where leftists and other anti-austerity groups just won elections.

Consequently, there is likely to be increasing diversity across countries in fiscal policies, and this divergence will likely make it increasingly hard to sustain the euro as a common currency. On the plus side, the differing policies will provide better data to analyze the economic consequences of austerity.

Mr. Barro is a professor of economics at Harvard and a senior fellow at Stanford's Hoover Institution.

http://www.nytimes.com/2012/05/10/world/middleeast/years-of-us-saudi-teamwork-led-to-airline-plots-failure.html?_r=1&nl=todaysheadlines&emc=edit_th_20120510

"Among the natural rights [of the people] are these: first, a right to life; secondly, to liberty; thirdly to property; together with the right to support and defend them in the best manner they can." --Samuel Adams (1772)

"Human felicity is produced not so much by great pieces of good fortune that seldom happen, as by little advantages that occur every day." --Benjamin Franklin, Autobiography, 1771

Bingo-- the foundation of my confusion, and the nature of the danger, is now made clear.   Thank you.

One would think that there is SCOTUS case law on point , , ,

http://www.dickmorris.com/a-romney-landslide/

A Romney Landslide
By Dick Morris on May 9, 2012
Published on TheHill.com on May 8, 2012

If the election were held today, Mitt Romney would win by a landslide.

The published polls reflect a close race for two reasons:


1. They poll only registered voters, not likely voters. Rasmussen is the only pollster who tests likely voters, and his latest tracking poll has Romney ahead by 48-43.

2. As discussed in previous columns, a study of the undecided voters in the past eight elections in which incumbents sought a second term as president reveals that only Bush-43 gained any of the undecided vote. Johnson in ’64, Nixon in ’72, Ford in ’76, Carter in ’80, Reagan in ’84, Bush in ’92 and Clinton in ’96 all failed to pick up a single undecided vote.

So when polls show President Obama at 45 percent of the vote, they are really reflecting a likely 55-45 Romney victory, at the very least.

Gallup has amassed over 150,000 interviews over all of 2011 and compared them with a like number in 2010. It finds that Obama has a better than 50 percent job approval in only 10 states and the District of Columbia. And his approval has dropped in almost every single state. Even in California, it has fallen from 55 percent in 2010 to 
50.5 percent in 2011.

Over the period of May 4-6, I completed a poll of 400 likely voters in Michigan and found Romney leading by 45-43! And Michigan is one of the most pro-Democrat of the swing states.

I also found that Obama’s personal favorability, which has usually run about 10 to 20 points higher than his job approval, is now equal to his job rating. In Michigan, his personal favorability among likely voters is 47-47, while his job rating is 50-48. Romney’s favorability is 49-42.

Obama’s crashing personal favorability reflects the backlash from his recent speeches. In substance, their focus on class warfare and their bombastic, demagogic style are not playing well with the voters. They do not seem in the least presidential.

Nor does his message of attacking Big Oil seem constructive. Voters all distrust Big Oil and would rather see them get punished, but they do not see in repealing their tax breaks a way of lowering prices at the pump or of increasing the supply of oil.

Obama’s trip to Afghanistan looks like grandstanding, and his insinuation that Romney would never have launched the strike looks like a low partisan blow.

Obama cannot summon the commitment he got in 2008 by negatives or partisanship. It was precisely to change the “toxic” atmosphere in Washington that he was elected. To fan it now is not the way to regain the affection of those who have turned on him.

If the election were held today, Obama would lose by at least 10 points and would carry only about a dozen states with fewer than 150 electoral votes.

And the Republicans would keep their Senate seats in Arizona, Texas and Nevada while picking up seats in Virginia, Florida, Indiana, Nebraska, North Dakota, New Mexico, Wisconsin, Michigan, Ohio, Missouri and Montana. The GOP will also have good shots at victory in the Senate races in Pennsylvania, New Jersey and — if Chris Shays wins the primary — Connecticut. Only in Maine are their fortunes likely to dim.

The journalists in the mainstream media, who are not politicians and have never run campaigns, do not realize what is happening. The Democrats, as delusional in 2012 as they were in 2010, are too much into their own euphoria to realize it. But America is sharply and totally rejecting Obama and all he stands for and embracing Romney as a good alternative. While few are saying these words, they are the truth.

So, there is dispute about this point?

I hope I do not impose with my request, but would you flesh this out further please?

http://www.economist.com/node/21554173?fsrc=nlw|mgt|5-9-2012|1694846|36902856|

A newsletter is touting CVD Equipment Corp. (CVV).  

"What you leave behind is not what is engraved in stone monuments, but what is woven into the lives of others."

Washington's can-kickers are lacing up their boots, increasingly confident they will be playing a familiar sport come November. It may turn out to be a dangerous game of chicken instead.

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Federal Reserve Chairman Ben Bernanke
.The federal budget is headed in less than eight months for what Federal Reserve Chairman Ben Bernanke calls "a massive fiscal cliff." Yet stock markets seem to be operating under the assumption that a postelection, lame-duck Congress will take the sting out of expiring tax cuts and spending restrictions.

It might even seem that economic data are raising the odds of that happening. Following two months of disappointing jobs data, the release Thursday of April budget data from the Treasury Department is expected to see the first monthly surplus in 3½ years. The Congressional Budget Office forecasts it will come in at some $58 billion. Meanwhile, the rolling, 12-month deficit, while still massive at $1.15 trillion, would be the lowest since May 2009.

But a positive budget number would be an island in a sea of red ink caused by the timing of receipts and payments. Another $450 billion or so in deficits are projected for the remaining five months of fiscal 2012, ending in September.

In other words, no improvement is seen between now and then. This will make it difficult to postpone most of the looming budget changes, barring the unlikely event comprehensive reforms of entitlements and popular middle-class tax breaks are agreed upon.

 .Equity and debt markets seem diametrically opposed in handicapping the situation. Treasury yields are negative after inflation—hardly a sign of robust growth ahead funded by yet-more government spending.

But equity investors seem unfazed by the economic hit posed by the combined expiring measures, equal to about 4% of gross domestic product. That would result in recession, upending equity analysts' forecasts, which currently predict corporate revenue rising slightly faster in 2013 than this year. That depends on decent economic growth, less likely with austerity.

Of course, much hinges on politics. Citigroup Inc. C -2.78%executive and former Obama budget chief Peter Orszag lamented recently that the most likely option is that no compromise is reached, allowing all the measures to expire.

Equity investors must hope he is wrong or, come January, they'll be kicking themselves.

http://www.dickmorris.com/obamas-secret-gun-control-plan-dick-morris-tv-lunch-alert/

BD, is he right in what he says about the legal force of a treaty viz our Constitutional rights?

Readily granted Lugar had a genuine serious interest in foreign affairs, but things such as Baraq's START Treaty were errors, one of many.  Others include rather terrible stands on guns and gun rights-- a matter not addressed in this piece.

Any comments on this Robert?

Doug:  Good analysis by Reynolds there.

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http://www.spectator.co.uk/essays/7779228/swedens-secret-recipe.thtml

from Mark Perry...good stuff!
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Sweden’s secret recipe
FRASER NELSON
SATURDAY, 14TH APRIL 2012
 
Advice from a successful – and tax-cutting – finance minister

When Europe’s finance ministers meet for a group photo, it’s easy to spot the rebel — Anders Borg has a ponytail and earring. What actually marks him out, though, is how he responded to the crash. While most countries in Europe borrowed massively, Borg did not. Since becoming Sweden’s finance minister, his mission has been to pare back government.

His ‘stimulus’ was a permanent tax cut. To critics, this was fiscal lunacy — the so-called ‘punk tax cutting’ agenda. Borg, on the other hand, thought lunacy meant repeating the economics of the 1970s and expecting a different result.

Three years on, it’s pretty clear who was right. ‘Look at Spain, Portugal or the UK, whose governments were arguing for large temporary stimulus,’ he says. ‘Well, we can see that very little of the stimulus went to the economy. But they are stuck with the debt.’ Tax-cutting Sweden, by contrast, had the fastest growth in Europe last year, when it also celebrated the abolition of its deficit. The recovery started just in time for the 2010 Swedish election, in which the Conservatives were re-elected for the first time in history.

All this has taken Borg from curiosity to celebrity. The Financial Times recently declared him the most effective finance minister in Europe. When we meet in his Stockholm office on a Friday afternoon (he and his aide seem to be the only two left in the building) he says he is just carrying on 20 years of reform. ‘Sweden was a textbook case of European economic sclerosis. Very high taxes and huge regulatory burden.’ An economic crisis in the early 1990s forced Sweden on the road to balanced budgets, and Borg was determined the 2007 crash would not stop him cutting the size of government.

‘Everybody was told “stimulus, stimulus, stimulus”,’ he says — referring to the EU, IMF and the alphabet soup of agencies urging a global, debt-fuelled spending splurge. Borg, an economist, couldn’t work out how this would help. ‘It was surprising that Europe, given what we experienced in the 1970s and 80s with structural unemployment, believed that short-term Keynesianism could solve the problem.’ Non-economists, he says, ‘might have a tendency to fall for those kinds of messages’.
He continued to cut taxes and cut welfare-spending to pay for it; he even cut property taxes for the rich to lure entrepreneurs back to Sweden. The last bit was the most unpopular, but for Borg, economic recovery starts with entrepreneurs. If cutting taxes for the rich encouraged risk-taking, then it had to be done. ‘In most cases, the company would not have been created without the owner,’ he says. ‘There would be no Ikea without [Ingvar] Kamprad. We would not have Tetra-Pak without [Ruben] Rausing. They are probably the foremost entrepreneurs we have had in the last few decades, and both moved out of Sweden.’

But they were not rich, I say, when they were starting out. ‘No, but they were becoming rich. If you have a high wealth tax and an inheritance tax, people emigrate because it becomes too costly to own a company. Ownership is a production factor. Entrepreneurs are a production factor. Yes, these people are rich and you can obviously argue that we want to encourage social cohesion. But it is also problematic if you drive out entrepreneurs from your country, because they are the source of job creation.’

Just as George Osborne took a hit for reducing the 52p tax to a 47p tax, so Borg’s party paid an political price for helping the rich. ‘If you are going to survive that politically, it is very important to cut taxes on low-income earners.’ He focused the tax credit on the low-paid, giving some the equivalent of a month’s extra salary every year. But there was still resentment. ‘We lost a lot of voters when we cut the property and the wealth tax, I don’t make any excuse for that. It was a severe blow to our support.’

This is the only time in the interview when Borg speaks like the politician he claims not to be. ‘When I look at other politicians I tend to see myself more as an economist,’ he says. This is true in that he is appointed, not elected, and was chief economist for SEB bank. But before this, he was a young libertarian longing to turn the world upside-down. Internet footage still exists of a denim-clad Borg declaring on television that if he was prime minister he ‘wouldn’t do a damn thing, so the people could do whatever they want’. When he later became a prime ministerial adviser, he caused a stir when it emerged that a government staffer backed drug legalisation.

When Fredrik Reinfeldt became party leader in 2003, he made Borg his right-hand man. It seemed a gamble at the time, but his faith in Borg’s expertise was absolute — Borg’s views had moderated, but his sense of urgency had not. ‘We came into government in October 2006 and we launched tax cuts in January 2007,’ he says, ‘so the first three months were extremely hectic.’ The Conservatives’ slogan was striking: ‘We are the new workers’ party.’ Tax rates would be cut for workers, and welfare cut to pay for it. High welfare levels, he says, can inflict cruelty in the name of compassion. ‘People emigrate from the labour market. Unemployment traps capture a lot of people in social exclusion.’ Tax cuts are not spoken of as an ideological aim, but as a tool to cut unemployment and advance social justice.

What even Borg did not expect was that his tax cut for the low-paid would increase economic growth so much that it has almost entirely paid for itself. Borg had created something that Osborne’s critics say does not exist: a self-financing tax cut. ‘There was some criticism at the time that we were borrowing to finance tax cuts,’ he says. But Sweden could do it, because it was expecting to return to surplus soon; Britain has no such luxury, he says. His main advice to Osborne is: ‘Keep on dealing with the deficit, because deficits destroy everything else.’

Borg and Osborne have a good relationship, as do David Cameron and Reinfeldt (who keep in touch via text message). All are men in their early forties, who pick fights with the old guard of their parties to flaunt their ‘modernising’ credentials. But politics in Britain and Sweden are as different now as they were in the 1980s, except the roles are reversed. Sweden is the unlikely champion of supply-side economics, with ideas too radical for Brits. There is cross-party support in Sweden for profit-seeking state schools, which Michael Gove won’t attempt. Borg’s tax-cutting policy was accompanied by a 268-page book explaining the dynamic link between lower taxes and more jobs. Such a document would be unthinkable from HM Treasury.
Sound economics is simply a far larger part of the government mission in Sweden than in Britain. Cameron once observed that no one ‘gets up in the morning thinking “I wish the state was smaller”,’ which is perhaps true in Whitehall. But not in Stockholm where, on Reinfeldt’s 45th birthday, Borg presented him with a graph showing Sweden’s tax-to-GDP ratio dipping under the 45 per cent mark for the first time in decades. That is still, of course, one of the highest rates in the world.

In public, Borg is not in the least triumphalist — if anything, he’s trying to stir up a bit of pessimism. Success has meant he now has to manage expectations, and Borg has taken to warning in his speeches that ‘a future economic crisis is as much a certainty in life as death and taxes’. He could add another certainty: that high taxes will slow down any economic recovery, and fortune tends to favour politicians who do something about that.

The Spectator, 22 Old Queen Street, London, SW1H 9HP. All Articles and Content Copyright ©2012 by The Spectator (1828) Ltd. All Rights Reserved

In the age of trillion-dollar annual deficits, Americans are looking for some sign—any sign—that Washington is serious about trimming the size of government. So here's some advice for House Republicans: Vote against the reauthorization and expansion of the Export-Import Bank on Wednesday.

The House leadership wants to increase the bank's exposure cap to $140 billion by 2014 from $100 billion today, with a few minor reforms attached to make the package politically saleable. In a statement Friday, Speaker John Boehner said the bipartisan deal—struck by Majority Leader Eric Cantor and Minority Whip Steny Hoyer—is "necessary to promote American exports and remove a threat to the creation of American jobs."

That's job creation, French-style. The Ex-Im Bank extends taxpayer-backed loans, loan guarantees and insurance to the clients of some of America's largest corporations, all of which have access to private financing. Slightly less than half of the business goes to help a single company, Boeing. Ex-Im also must by law extend 20% of its financing to small businesses. So much for assessing risks and rewards as the market dictates.

It's true that Ex-Im has had bipartisan support for years. President Obama expanded Ex-Im to promote his export agenda. Republicans justified the bank during the Cold War as helping America's national security and more recently as a boon to business, which likes taxpayer-backed, cheap financing, thank you very much. The U.S. Chamber of Commerce and National Association of Manufacturers are vocal supporters of the Cantor-Hoyer deal.

The GOP House leadership no doubt finds it hard to buck such a united business front, especially when Democrats are looking for an issue to appear more business-friendly after the hostility of the Pelosi Congress. Government guarantees are one policy that Democrats can always get behind.

But Republicans were not elected in 2010 on a message of business subsidies as usual. They were elected on a platform of government reform and fiscal restraint. They are trying to maintain that image by claiming that they are "reforming" Ex-Im—for example, by tying the increase in lending to the bank's overall default rate and requiring the Government Accountability Office to review Ex-Im's business plan and risk management. But this is eyewash compared to the increase in Ex-Im exposure, and the penalty for breaking the default cap isn't harsh.

The House is considering the Ex-Im bill under suspension rules, which requires two-thirds approval for passage. This means that on a normal voting day around 135 Republicans could defeat it.

No one is going to vote out a Representative for opposing subsidies for clients of General Electric. But voters and financial markets might notice and applaud that Republicans meant what they said about making hard choices. The essential tasks of a bankrupt federal government should not include subsidies for the biggest corporations.

A version of this article appeared May 8, 2012, on page A12 in some U.S. editions of The Wall Street Journal, with the headline: Republicans and Big Business

http://www.cnbc.com/id/41491193/

By JON HUNTSMAN
The recent drama in Beijing over dissident Chen Guangcheng illuminates two of the most important characteristics of today's China and its political system. First, despite China's economic success and growing regional influence, the leadership of the Chinese Communist Party is profoundly insecure. Second, the Chinese people are increasingly demanding a more transparent and fair society.

The Communist Party's insecurity has been amplified by the 18th Party Congress, an unprecedented leadership transition taking place this fall with a backdrop of domestic political scandal, social unrest, uncertainties about the Chinese growth model, and increased tensions with the United States. The party fears that liberalization would unleash centrifugal forces that would threaten its authority. Yet people such as Mr. Chen, artist and dissident Ai Wei Wei, Nobel Peace Prize winner Liu Xiaobo, who is now imprisoned in China, and so many others provide a glimpse of China's potential if it were to unlock the talents of its people.

In crafting an effective approach to the U.S.-China relationship, we need to understand China and all of its complexities—not engage in hyperbole or wishful thinking. Saying that the U.S.-China relationship is among the most important in the world today is not a statement meant to set China above our allies on our priority list, nor does it convey any aspiration for a "G-2" management of global problems. Rather, it is recognition of what is at stake.

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A banner in support of Chinese activist Chen Guangcheng, Hong Kong, May 4.
.There is no other relationship in the world that, if mismanaged, carries greater long-term negative consequences for the U.S., the Asia-Pacific region, and the world. By contrast, wise stewardship of the relationship will make us and our allies safer, wealthier and more confident about global stability in the future.

The best hope for sustained bilateral cooperation will come from strategically identifying shared interests and operating from a position of shared values. Unfortunately, in today's China those values we share are found mostly among people like Mr. Chen, and not in the Communist Party or the government.

America's policy toward China should rest on the following pillars:

The U.S. must deal with China from a position of strength. This means getting our economic house in order by undertaking difficult structural reforms. China will approach all interactions with the U.S. by first sizing up relative strength and leverage. If we remain on our present course of fiscal irresponsibility, innovation-stifling policies and political paralysis, we can anticipate greater Chinese assertiveness and foreign policy adventurism.

Economics and trade must drive our foreign policy and Asia strategy. Chinese leaders have demonstrated that they want trade to be the lifeblood of their ties to the region. Today Beijing is the leading trading partner of most of our regional allies. Given the scale of the Chinese market, we should prudently consider the second-order effects of those relationships changing the regional incentive structure. Washington must get back in the game of robust trade liberalization. Beyond the Trans-Pacific Partnership talks, we should be pursuing free trade agreements with Japan, Taiwan and India, and allowing American businesses to enter Burma.

We should renew our ties to key allies, focusing on joint endeavors that hedge against some of the more difficult contingencies we could face in the region from an aggressive China and People's Liberation Army. There is vast potential for cooperative problem solving among countries that do share our values, and this "outside-in" approach to Beijing will demonstrate the benefits to being a friend of the United States. We can clearly communicate to our allies through our actions that the U.S. will be able to project power in the region despite Chinese opposition.

Values matter. We have an opportunity to shape outcomes by living up to our ideals and demonstrating we are worthy of the region's admiration and emulation. This approach will not only be consistent with the aspirations of many in China, but it will also leave the door open for a truly strong U.S.-China relationship based on shared values—should leaders in the Communist Party eventually embrace liberal reforms.

While our national leaders must try to bridge the communication gap in the near term, it will ultimately be everyday commercial, cultural and social interactions that will transform bilateral ties. I believe our peoples are more alike than different, and can see a future China where the likes of Chen Guangcheng are celebrated by both the people and the state rather than persecuted. Meanwhile, we should creatively engage constituencies beyond the government in Beijing and allow a multitude of relationships to flourish.

We must work with China on shared interests, while remaining vigilant to the inevitably competitive nature of our relationship for the foreseeable future. I've seen the competition up close, and I believe we can succeed with the right policies and leadership.

Chen Guangcheng has given us an opening that we can either see as a source of conflict or as an opening for expanding our dialogue on issues that increasingly matter to so many in China. The world will be watching.

Mr. Huntsman was U.S. ambassador to China from 2009-2011. A former governor of Utah and candidate for the 2012 Republican presidential nomination, he is now chairman of the Huntsman Cancer Foundation.

By JENNIFER CORBETT DOOREN
People who suffer from chronic depression throughout their lives are more likely to develop dementia compared with people who aren't depressed, according to a study released Monday.

The study, by California researchers, sheds light on whether depression might cause dementia and Alzheimer's disease, or if it is merely an early sign of memory loss and other problems associated with dementia. Alzheimer's disease is the leading cause of dementia; the second-leading cause is impaired blood supply to the brain, resulting in what is known as vascular dementia.

"It's quite clear depression late in life can be an early sign of Alzheimer's," explained Rachel Whitmer, a study researcher and an investigator at the Kaiser Permanente Northern California Division of Research. "There's a lot of debate whether [depression] is really a risk factor for dementia, or if it just shows up."

Other factors elevate dementia risk.

People with more belly fat in middle age had higher rates of dementia when they reached old age. This held true even for people whose overall body weight was considered normal.

People who smoked in middle age had an increased risk of developing dementia and Alzheimer's disease later on. People who smoked two packs or more daily had more than double the risk.

People with high cholesterol in middle age had an increased risk of developing dementia and Alzheimer's disease in old age
Source: Kaiser Permanente

The findings, published in the May issue of Archives of General Psychiatry, add to the evidence that late-in-life depression is a likely early sign of Alzheimer's disease and suggest that chronic depression appears to increase the risk of developing vascular dementia. Adequate treatment for depression in midlife could cut the risk of developing dementia. The study is the first to examine whether midlife or late-life depression is more likely to lead to either Alzheimer's disease or vascular dementia over the long term.

To look at links between depression and dementia, Dr. Whitmer and other researchers looked at 13,535 long-term Kaiser Permanente members who had enrolled in a larger study in the period from 1964 to 1973 at ages ranging from 40 to 55 years old. Health information, including a survey that asked about depression, was collected at the time.

Researchers looked at whether the same people were depressed late in life, in the period from 1994 to 2000, and then looked at whether they were diagnosed with dementia or Alzheimer's disease in 2003. The participants' average age in 2003 was 81 and 57.9% were women. The study found depression present in 14.1% of subjects in midlife only, in 9.2% in late life only and in 4.2% in both.

Looking at those who later developed dementia, the study found 20.7% of study participants without depression developed dementia, compared with 23.5% of people who reported depression in midlife only and 31.4% of those who were depressed later in life. Among those who were depressed at both mid- and late-life, 31.5% developed dementia.

Researchers then did more analysis to tease out Alzheimer's diagnoses from the broader dementia category. They found people who were depressed in midlife but not late in life had no increased risk of developing Alzheimer's disease or vascular dementia. People who were depressed late in life were more likely to develop Alzheimer's while those depressed at both mid- and late life were three times as likely to develop vascular dementia.

Dr. Whitmer's research focused on people's health and how it affects brain aging. Previous studies she has conducted using Kaiser's database of long-term members, have shown that factors such as smoking, diabetes, high cholesterol and belly fat increase the risk of developing Alzheimer's and other brain diseases. A 2008 study looking at belly fat showed people who had more belly fat during middle age had higher rates of dementia when they reached old age. The finding held true even for people whose overall body weight was considered normal.

Kaiser Permanente Northern California is a large, nonprofit health maintenance organization that provides health services to more than one-quarter of the population in the San Francisco and Oakland, Calif., areas.

Dr. Whitmer's most recent study, conducted with researchers from the University of California in San Francisco, was funded by Kaiser Permanente, the National Institutes of Health and the Brain and Behavior Research Foundation.

Write to Jennifer Corbett Dooren at jennifer.corbett-dooren@dowjones.com

http://www.glennbeck.com/2012/05/07/obama-ignores-occupy-domestic-terrorists/

'We should not expect the state to appear in the guise of an extravagant good fairy at every christening, a loquacious companion at every stage of life's journey, and the unknown mourner at every funeral.'

Zang!

Monday Morning Outlook
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Dead Cat Bounce for Socialism To view this article, Click Here
Brian S. Wesbury - Chief Economist
Bob Stein, CFA - Senior Economist
Date: 5/7/2012
The Social Welfare State is dying.  Like the Berlin Wall and the Iron Curtain, the cradle-to-grave social welfare experiment must eventually collapse.  A system of taxing work and profits, while subsidizing leisure, sloth, and retirement, must eventually fail.
The end of the Social Welfare State is painful for many, and it will not end quickly or quietly as the elections of this past weekend prove.  Francois Hollande, a Socialist, was elected president of France, while Greece saw a surge in votes for “anti-bailout” political parties in parliament.
 
These elections are described as blows against “austerity.”  They are also seen as anti-German.  Germany resisted bailouts and pushed spending cuts.
 
In theory, a rejection of austerity could be a good thing.  Some people include tax hikes in the concept of austerity and avoiding tax hikes would be a good thing for Europe.  France has a top income tax rate of 45%, a wealth tax of 0.5% and a Value Added Tax (VAT) of 21.2%.  Greece has a top income tax rate of 45% and a VAT of 23%.  These burdensome tax rates hinder growth, investment and work effort and still don’t cover all the spending.
 
To solve the deficit problem, Francois Hollande wants to raise France’s top income tax rate to 75%.  Greece’s “anti-bailout” parties, mostly on the left, also want higher taxes on the upscale, plus defense cuts.  The Greek military helps break up domestic riots, so this is a self-serving demand.
 
So, in reality, French and Greek rejection of austerity does not mean policies that would enhance long term economic growth.  Instead, it means they want to temporarily pull the wool over their own eyes, resist the obvious need to reduce government spending, and just hope for the best.
 
This chapter of the French story will not end well.  The country has already gone much further along the road to socialism than the US, with general government spending equal to about 56% of GDP, very near the highest of any advanced or emerging market in the world.  Greece, at 49%, is not far behind.  Yet, voters are doubling down.
 
Markets already sense the problems this will cause.  The Euro is weaker and stock prices are down around the globe.  Many fear that pressure on the European Central Bank to buy more Euro debt and help avoid austerity will create inflation.  This is happening despite the fact that Hollande was a huge favorite to win and this should have been built into the market already.  It was the ease of victory, combined with the vote in Greece that made the day feel even more anti-market.
 
But even easy money would ultimately be a dead end, leading to higher interest rates and less capital investment.  Anyway, the Germans would never go along with a euro as weak and inflationary as many in Greece and France want.  And Germany has huge leverage: if the ECB gets too loose, only Germany could leave the euro, go back to its old currency, and not get hammered by financial markets.
 
In the end, this is a battle the socialists are simply not going to win.  Greece is too small to be convincing; France is about to show the world what doesn’t work.                       
 
With any luck, after dabbling in folly, France will reverse course quickly.  Maybe Hollande himself, not an unintelligent man, will realize the mistake of fighting the end of the social welfare state.  The citizens of Europe who think austerity is unnecessary are about to get a lesson in reality.  In the end the only way out is more capitalism.
 
And this brings us to our most important point.  Financial markets in the US moved abruptly to a “risk off” trade as these election results were finalized.  Stocks sold off and bonds rallied.  But those who think these elections will hurt the US are wrong.  The end of the social welfare state in Europe is a precursor for the US.  It’s a Dead Cat Bounce for Socialism.
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