Fire Hydrant of Freedom

Digest · September 16, 2011

   
   

Essential Liberty
Join thousands of Patriots who have already signed on to the Oath Accountability Civil Action for Constitutional Integrity.

To enforce our Constitution's limits on the central government, we believe a formal legal action is necessary. This action, if successful, would require that all members of the Executive, Legislative and Judicial branches, first and foremost, abide by their oaths "to support and defend" our Constitution, under penalty of law, and comport with its enumerated limitations on the federal government. The current scope of federal activities provides abundant evidence that many members of those three co-equal branches have long since abandoned their oaths, and, at present, there is no recourse for prosecution to enforce compliance.

To that end, please sign on to this action, and join Patriots across the nation in this effort to establish legal standing as citizens, particularly those in our Armed Services who defend their oaths with blood and life. If we are unsuccessful in our effort to seek remedy for the lack of any proscription against, and penalty for breach of oath, it is because the judiciary refuses any such accountability regarding the wanton violation of our Constitution. Such rejection would in effect render Americans once again condemned to the abuse previously characterized in American history as "Taxation Without Representation."

(Problems with page loading due to the site traffic yesterday, have been corrected.)


     


The Foundation
"If Congress can do whatever in their discretion can be done by money, and will promote the General Welfare, the Government is no longer a limited one, possessing enumerated powers, but an indefinite one, subject to particular exceptions." --James Madison


Government & Politics
The Social Security Debate
The GOP presidential race this week boiled down to two words: Social Security. Specifically, which candidates have said what about the public retirement program set up by socialist Democrat Franklin D. Roosevelt during the Great Depression. The kindling has long been there for a fiery debate about the government's massive obligations to an aging population, but Texas Gov. Rick Perry's previous comments about Social Security being a "monstrous lie" and a "Ponzi scheme" lit the spark in Monday's Republican debate when several other candidates took issue with his position. So, is Social Security a Ponzi scheme?

Mitt Romney says no, and he seized the opportunity to cast the rhetoric of his main Republican rival as "over the top" and "frightful to many people." Romney warned, "If we nominate someone who the Democrats can correctly characterize as being opposed to Social Security, we would be obliterated as a party."

Frankly, both men have a point, though Romney used similar language in his own book to describe the program. Numerous figures on the Left have also over the years, dating back at least to a 1967 Newsweek column by liberal economist and Nobel laureate Paul Samuelson.

Strictly speaking, Social Security is not a Ponzi scheme, in part because it's not against the law. Indeed, it is the law. (Try not paying payroll taxes -- i.e., "investing" in the system.) But it is structured exactly like a Ponzi scheme, and it will eventually fail for the same reasons. Today's workers are paying for the checks of today's retirees, and it has always been that way. From the start, politicians have raided the Social Security "trust fund" and spent the money on other general fund projects. What was left were worthless IOUs. Now that benefits paid exceed taxes collected, that problem has become acute. According to the Social Security board of trustees, in 1945, there were 42 workers for every retiree; the current ratio of three workers to every retiree is unsustainable.

Perry later wrote a USA Today op-ed to clarify his position. He thinks Social Security must be reformed so that it can both be saved for those in and nearing retirement, as well as for younger workers. Still, Perry's problem is exactly as Romney indicated: Democrats (and apparently other Republicans) will demonize him for wanting to "destroy" Social Security. The program is still popular, and if voters think that a politician is going to take away their money, they will object vehemently. (Of course, their money has already been taken away, but that seems to escape the notice of far too many people.) Republicans have to walk the tightrope of calling for reform without being successfully demagogued.

The GOP candidates are shying away from any mention of Medicare, however, which is in far worse fiscal condition than Social Security. Annual spending on Medicare and Medicaid is now 5.5 percent of GDP, and by 2030, the Congressional Budget Office predicts that it will reach nearly 10 percent. Medicare by itself is already the biggest spender on medical services in the U.S., and that $525 billion in 2010 is influencing the market for everyone else.

Perhaps Herman Cain said it best: "I don't care what you call it, it's broken." He's right. And no matter what we call these programs, the important thing is to recognize that they will cause the nation to go broke if we don't fix them. But they can't be fixed unless conservatives win elections, and winning elections might require a more tactful approach.

Is Social Security a Ponzi scheme? Share your thoughts

Open Query
"A healthy 30-year-old young man" without health insurance ends up in the hospital. "Who's going to ... pay for that? ... Are you saying that society should just let him die?" --CNN's Wolf Blitzer with a "gotcha" question for Rep. Ron Paul in Monday's GOP debate

Paul's answer is here and it's excellent.

News From the Swamp: Stimulus Jr.
Barack Obama gave details of his "jobs" proposal Monday, and then quickly hit the road, urging everyone at every appearance he made to support its quick and complete passage. "If you love me," he crooned, "you've got to help me pass this bill." Obama maintains that his $447 billion plan will fix America's unemployment problem, which has grown increasingly worse under his watch. The bill will create 1.9 million jobs, he says, and reduce unemployment by a full percentage point. Yet Stimulus Jr. merely repeats many of the proposals that didn't work when they were passed in 2009.

For instance, the employee payroll tax would be expanded. There is also a $49 billion extension of unemployment benefits. The current maximum for the unemployed to draw benefits is 99 weeks (just three weeks short of two whole years), and when that line in the sand was drawn in 2009, Democrats said they would never have to cross it. They now support the extension, however, because they claim the added money will flow back into the economy through consumer spending -- despite all evidence to the contrary. Also, $60 billion will be dedicated to infrastructure spending and the creation of an infrastructure bank to finance projects when and if they become shovel-ready.

Obama maintains that this plan "is fully paid for." How, you ask? Well, the president has rolled out the same solutions for that, too. Tax increases to the tune of $467 billion -- over 10 years. Remember, the spending would occur this year. Tax rates would go up for families making over $250,000 per year, and some deductions such as charitable donations would be limited. (We can all watch charitable giving plummet if that happens.) Obama would also end tax breaks for oil companies and corporate jet owners, and raise the tax paid by hedge funds and investment partnerships. Republicans and some Democrats have previously rejected these proposals because they would hit precisely the small business job creators that are needed to jumpstart the economy. Besides, if wealthy leftists feel guilty about their prosperity and want to give more to the government, they're perfectly free to do so.

House Speaker John Boehner and Majority Leader Eric Cantor have both stated publicly that they won't support any elements of the program that call for more stimulus spending -- and rightly so. Diana Furchtgott-Roth of the Manhattan Institute said in her House testimony on the subject this week, "Those who believe that the 2009 stimulus simply was not enough ... should admit that if $1 trillion did not work in 2009, then $447 billion is unlikely to solve an even larger problem in 2011." Furthermore, conservatives and far-left Democrats reject the idea of an extended payroll tax cut because it will reduce the amount of money paid into an already fragile Social Security system.

It's hard to imagine that Obama has much of a chance of passing his jobs plan intact with such an array of Republicans and Democrats aligned against him. In fact, that's exactly what he wants, because he can then run against the "do-nothing Congress" in 2012. Indeed, it's a rerun of Harry Truman's 1948 campaign. Obama says, "This Congress, they are accustomed to doing nothing, and they're comfortable with doing nothing, and they keep on doing nothing."

A final note: Rep. Louie Gohmert (R-TX) snagged the name Obama had chosen for his boondoggle -- The American Jobs Act -- for his own piece of legislation, H.R. 2911, which proposes a tax cut to stimulate the economy. Tellingly, no Democrat had yet submitted the president's latest emergency, pass-it-right-away bill. In the Senate, Majority Leader Harry Reid (D-NV) has said that other bills will receive attention first -- such as one on bike trails.


This Week's 'Braying Jenny' Award
"I'll put it this way, you don't deserve to keep all of [your money]. It's not a question of deserving, because what government is, is those things that we decide to do together." --Rep. Jan Schakowsky (D-IL) pontificating about the money you earn

On Cross-Examination
Obama has a little work to do to gain support for Stimulus Jr. -- from his own party.

"I have serious questions about the level of spending that President Obama proposed." --Sen. Joe Manchin (D-WV)

"I am not supporting a repeal of tax cuts for the oil industry unless there are other industries that contribute. ... That offset is not going to fly, and he should know that. Maybe it's just for his election." --Sen. Mary Landrieu (D-LA)

"When you start singling out certain industries [oil and gas], there's an unfairness to it. On the pay-fors, I have a problem." --Sen. Mark Begich (D-AK)

"Every dollar that is spent on the jobs bill ... is not going to be available to Congress to deal with the debt. And to me, the top priority of ours should be long-term major debt reduction." --Sen. Joe Lieberman (D-CT)

Constitution Day 2011
Tomorrow, Sept. 17, 2011, marks the 224th anniversary of the signing of our Constitution at the Philadelphia (Constitution) Convention in 1787. Of course, these days, Memorial Day may be a more apt description.

Share your thoughts

Hope 'n' Change: ObamaCare in Court
U.S. District Judge Christopher Conner ruled this week that the individual mandate in ObamaCare is unconstitutional. Conner, appointed by George W. Bush, wrote that the mandate extends Congress's power under the Constitution too far. At this point, the law has several rulings in its favor and several against it. Why, again, did the Supreme Court insist that, before they take it up, the law must run its course through the lower courts?

New & Notable Legislation
The House passed H.R. 2587 by a 238-186 vote Thursday. The legislation prohibits the National Labor Relations Board from dictating where corporations may establish factories. The law is a response to the NLRB's decision earlier this summer to sue Boeing for opening a manufacturing plant for the 787 Dreamliner in right-to-work South Carolina instead of union-shop Washington state. Unions, predictably, didn't like the move, regardless of how many jobs it might create. The bill is unlikely to pass the Democrat-controlled Senate.

Special Election Win for GOP in Blue Territory
Republican Bob Turner shook the political world this week by winning a special House election in deep-blue New York District 9. Turner, a retired businessman, defeated New York State Assemblyman David Weprin 54-46. Weprin, a machine Democrat whose family has been a mainstay in New York politics for years, was initially expected to handily win the seat recently vacated by scandal-plagued Anthony Weiner. The district, which straddles the New York City boroughs of Brooklyn and Queens, is predominantly Jewish, and Democrats enjoy a 3-to-1 voter registration advantage there. Voters in the district have not sent a Republican to Washington since 1923, and Weprin and members of his family have served several terms in local and statewide office in the area. These advantages ended up meaning nothing, as Weprin's fortunes diminished rapidly in the closing weeks of the campaign. Democrats even pulled out the big guns in an attempt to save him, but to no avail.

The upset spoke volumes about the current state of affairs for Democrats, but they are unlikely to learn any lessons judging by their response to the outcome. DNC Chairwoman Debbie Wasserman Schultz provided the most laughable excuse when she claimed, "It's a very difficult district for Democrats." The White House, of course, rejected the idea that it was a referendum on the administration, though they used the opposite spin on the special election victory House Democrats won in upstate New York earlier this year.

The fact is that the race was precisely a referendum on the Obama presidency, and particularly his ghastly economic record. Obama's poor treatment of Israel on the international stage also angered many Jewish voters in the district, and they expressed their sentiment at the ballot box. Turner may not serve long, however, since District 9 is targeted for elimination when redistricting takes place next year, but his victory has sent a clear message as the crucial 2012 campaign season approaches.


National Security
Warfront With Jihadistan: 9/11 Remembrance Omits Key Element
The victims of 9/11 were appropriately remembered and honored in ceremonies across the country last Sunday, the 10th anniversary of the jihadi attacks on America. Yet if you were listening for information about their murders and what motivated them, there was only silence. Even though we're still at war with Jihadistan, political correctness invaded most ceremonies, and any mention of the dreaded "I" word, Islam, was strictly verboten. Indeed, about the only mention of Islam came from the Left, where some did their best to make it seem as if Muslims were actually the main victims of 9/11. Other leftists reported on how benign Sharia law really is, and argued that "jihad" is actually just a nonviolent struggle. It's doubtful that the Americans on Flight 93, or the New York City police and firemen of the World Trade Center, would agree with that definition.

One had to leave the U.S. to find sources that would dare speak the truth. In London, Tony Blair pointed to all of the Middle Eastern countries that harbor terrorist ideologies, saying, "It's completely wrong to think the struggle to defeat extremist ideology is won." Israeli sources were even more blunt, with Israeli Prime Minister Benjamin Netanyahu saying, "Therefore, the struggle against radical Islamic terrorism, which is, in effect, a description of the past decade, is at its peak; it is not yet over. We must all unite, countries that aspire to life, certainly the democracies that cherish life, and act in concert against this blight."

Al-Qa'ida certainly noted the anniversary. Its new leader, Ayman al-Zawahri, claimed credit for this year's Arab uprisings, saying the 9/11 attacks on the U.S. paved the way for the "Arab volcano" that is sweeping through the Middle East. A stretch, to be sure, but also an indication that the radical Islamists of al-Qa'ida are still in the game, even if American politicians and the press are afraid to say so.

Testimony Under Pressure
U.S. Air Force Gen. William Shelton dropped a bomb this week when he alleged that the White House had pressured him to modify testimony before Congress to make it more favorable toward a company that made donations to Democrats. The four-star Air Force general oversees U.S. Space Command, and he was scheduled to testify before a House committee on Aug. 3 regarding a new wireless project of a satellite broadband company in Virginia called LightSquared. Shelton's testimony was leaked in advance, revealing that he was prepared to tell the committee that LightSquared's project would interfere with the military's sensitive Global Positioning Satellite capabilities.

The majority owner of LightSquared, however, is an investment fund run by Democrat donor Philip Falcone. The company saw that the testimony could damage their business, and the White House intervened. Shelton says the White House requested that he alter his testimony to voice support for the administration's policy of adding more broadband for commercial use and to say that the Pentagon would work to resolve questions regarding LightSquared with testing in only 90 days. It seems that this administration will stop at nothing to politicize any issue in favor of their donors. Congress has a duty to investigate and find out just who pressured Shelton, and from whom those orders came.

U.S. Air Force Birthday
Relentlessly committed to the defense of liberty, the United States Air Force celebrates its 64th birthday Sunday, Sept. 18. The Air Force began life as the Army Air Corps but became a separate Armed Services Branch when the National Security Act of 1947 created the Department of the Air Force. As the U.S. Air Force continues its critical mission "to fly, fight and win ... in air, space and cyberspace," we ask that you pray for these brave Patriots prosecuting the Long War against Jihadistan, and for their families awaiting their safe return.


Profiles of Valor: U.S. Marine Corps Cpl. Dakota Meyer
Former U.S. Marine Corps Cpl. Dakota Meyer Thursday became the first living Marine to receive the Medal of Honor for heroism in the wars in Afghanistan and Iraq. However, Meyer struggled for words, saying, "It's hard, it's ... you know ... getting recognized for the worst day of your life, so it's ... it's a really tough thing." It was his worst day because of the friends he lost.

On Sept. 8, 2009, Meyer and his platoon were on patrol in Kunar Province, Afghanistan, when they were ambushed. When several team members were cut off from the main group, Meyer sought to rescue them. According to the official citation, "With a fellow Marine driving, Corporal Meyer took the exposed gunner's position in a gun-truck as they drove down the steeply terraced terrain in a daring attempt to disrupt the enemy attack and locate the trapped U.S. team. Disregarding intense enemy fire now concentrated on their lone vehicle, Corporal Meyer killed a number of enemy fighters with the mounted machine guns and his rifle, some at near point blank range, as he and his driver made three solo trips into the ambush area." Despite a shrapnel wound in his arm, Meyer led a total of five trips into the kill zone to "recover more wounded Afghan soldiers and search for the missing U.S. team members."

Meyer's final trip was on foot, and he recovered the bodies of four of his friends -- Marine 1st Lt. Michael Johnson, Marine Staff Sgt. Aaron Kenefick, Marine Gunnery Sgt. Edwin Johnson, and Navy Hospital Corpsman 3rd Class James Layton. Two of Meyer's fellow Marines, Capt. Ademola Fabayo and Staff Sgt. Juan Rodriguez-Chavez, the driver, were awarded the Navy Cross.

Voice your support for Cpl. Meyer

Business & Economy
Income Redistribution: Some Energy Bleeds Green
Solyndra is becoming a household name, but not for the intended reasons. Despite being given a 2009 "stimulus" loan of $535 million, the solar panel maker filed for bankruptcy last week -- and it's not the only one, either. Joe Biden spoke at the groundbreaking of the company's new factory and said "renewable energy" is "exactly what the Recovery Act is all about." Barack Obama also praised the company last May at an on-site visit, saying, "companies like Solyndra are leading the way toward a brighter and more prosperous future." Solyndra CEO and founder, Dr. Chris Gronet, called Barack Obama "instrumental" in securing the loan.

With that high-profile backing, the fallout from the firm's collapse isn't pretty. Congress and the Treasury Department are both investigating what the White House knew and why so much money was invested in a failing operation. There were warnings months before the loan and Obama's photo-op at Solyndra headquarters, including from accountants at PricewaterhouseCoopers, who indicated "substantial doubt about its ability to continue as a going concern." Internal administration emails reveal that some people worried about default -- primarily over how it would affect Obama's re-election campaign. Yet Energy Department officials sat in on the company's meetings and concluded that the loan was worth it.

No doubt more will be revealed in the coming days and weeks, but what is perhaps even more galling is that, despite the malfeasance in the Solyndra case, the Department of Energy is set to issue another $1.2 billion loan to Mojave Solar for a 250-megawatt solar generation project in San Bernardino County, California. Aside from Solyndra, this new move comes after a Washington Post report saying, "A $38.6 billion loan guarantee program that the Obama administration promised would create or save 65,000 jobs has created just a few thousand jobs two years after it began..." While only $17.2 billion has been spent to date, just 3,545 new jobs have been created, at a cost of nearly $5 million per job. Even if all 65,000 jobs had materialized, though, the cost per job is obscene. Perhaps that's still better than $19 billion in erroneous unemployment payments. Some lessons, it seems, are never learned.

What should happen as a result of Solyndra?
Regulatory Commissars: Turn on the Jobs Spigot, Please
Over the last few months Chevron, BP and ExxonMobil have each announced the finding of vast oil reserves in the Gulf of Mexico. It's an opportunity to create thousands of real jobs and perhaps begin to dent the persistently high fuel prices and unemployment plaguing the nation. All told, the new discoveries in deep water areas of over 4,000 feet in depth have the potential of producing billions of barrels of oil, and helping our nation achieve a degree of energy independence while at the same time adding to the 9.2 million domestic jobs already provided by the oil and natural gas industry. If only these companies were free to determine areas in which to drill and build up the infrastructure for safe extraction and transport.

Yet an unsustainable pace of regulatory approvals since the April 2010 Deepwater Horizon spill may force U.S. oil rigs out of the Gulf. As many as 20 rigs could be relocated to other oil hotspots around the globe such as Brazil or Nigeria. We realize that some jobs in the energy industry may not be the "green" jobs Barack Obama desires, but in an era where solar power companies go belly-up and take millions of taxpayer dollars with them, why not speed up the regulatory process and let the oil industry use its own private funding to create lasting employment for thousands of Americans? Seems like a no-brainer to us.


Bank of America to Cut 30,000 Jobs
If you limit the amount of income a service provider can receive, it follows that they will have less money to invest in retaining staff. Over the next three years, 30,000 Bank of America employees will learn this truism the hard way as they're downsized out of the company. An amendment to the 2009 Dodd-Frank financial reform bill will cost the financial giant $475 million in just one quarter this year once the rule takes effect in October, so as part of a makeover to slash an overall $5 billion in corporate expenses, these workers must go.

The Dodd-Frank rule cuts the amount banks can charge retailers in transaction fees by roughly half. While populists from both parties chortled about "exorbitant" debit card transaction fees, they didn't realize this income stream was what kept other fees, such as fees for checking accounts or interest rates on credit cards, lower.

A look at recent history shows this is nothing new for a beleaguered banking industry. Once the boom times of the Bush years went bust and consumers slipped into unsustainable debt, along came federal regulators to stick companies (and responsible credit card holders) with the bill. Beginning with the 2009 Credit CARD Act, which led to general interest rate increases for most creditworthy consumers, the trend of recent federal regulations has served to make the credit card business less lucrative for banks. While average Americans fall prey to the class envy aspect of regulating bank fees, it may be their neighbor who loses his job thanks to the new rules.


Around the Nation: Poverty Increases
Everywhere we turn, we hear grim news about the economic health of this country. In 2010, income in the U.S. was at a 10-year low and poverty was at a 17-year high. The Census Bureau now reports that one in six Americans is now considered poor. In the midst of this economic turmoil, Obama is asking us to spend another $447 billion, in part to help the "disadvantaged youth" by giving their low-income parents "ladders out of poverty." This poverty, however, is the hallmark of Obamanomics.

On the other hand, when most of us hear the word "poverty," we think of hunger and homelessness, a life starved of even basic needs. Yet according to a recent Heritage Foundation report, "Understanding Poverty in the United States," that is not as prevalent as we are often led to believe. The report's authors, Robert Rector and Rachel Sheffield, found the following: According to the Department of Agriculture's 2009 statistics, 96 percent of low-income parents reported that their children were never hungry due to lack of money, and 83 percent of poor families have enough to eat. Also, while 4 percent of the poor were temporarily homeless, 42 percent own their own homes. Car, computer and TV ownership is even higher.

The report also speaks to the causes of poverty, and a lack of government aid is not among them. In fact, the government only makes things worse. As blogger Ed Morrissey quipped, "It seems that Obama loves the poor so much that he's going out of his way to create more of them."


Culture & Policy
Second Amendment: The Right to Carry
U.S. District Judge Cathy Seibel ruled this week that issuance of concealed carry permits is a matter of discretion for state authorities and isn't an individual right. Furthermore, guns are scary. "The underlying activity of possessing or transporting an accessible and loaded weapon is itself dangerous and undesirable, regardless of the intent of the bearer since it may lead to the endangerment of public safety," Seibel wrote, quoting a previous decision on the case. Carrying a loaded weapon on a public street, she said, "creates a volatile situation vulnerable to spontaneous lethal aggression in the event of road rage or any other disagreement or dispute. For all these reasons, I hold that the state has an important government interest in promoting public safety and preventing crime." Declaring that people intent on committing a crime don't have legal access to a gun is not going to stop them -- it will only disarm their victims.

In related news, Reps. Cliff Stearns (R-FL) and Heath Shuler (D-NC) have introduced H.R. 822, the National Right-to-Carry Reciprocity Act of 2011. The bill would ensure that all state-issued concealed carry permits are recognized by all other states. Illinois is the only state that still maintains that the Second Amendment doesn't exist.

Are guns themselves an endangerment to public safety?
Climate Change This Week: Gore's 24
Continuing his quest to rid the world of global-warming skeptics, Al "It's Not Easy Being Green" Gore has announced that he will air 24 straight hours of global warming television this week. "24 Hours of Reality" will play on Current TV, which Gore co-founded (after all, what other channel would give Gore 24 hours of airtime?). According to Trewin Restorick, chief executive of Global Action Plan, the broadcast's UK partner, "There will be a full-on assault on climate skeptics, exploring where they get their funding from." This approach is hardly surprising, as "assault" is the only option available to the crusade that is steadily losing in the court of public opinion. A recent opinion poll, for example, showed that concern over climate change has dropped in the U.S. from 62 percent in 2007 to 48 percent this year.

All that aside, let's assume for a minute that man-made climate change is real. Does Gore really think his leftist partisan approach is going to turn the masses in his favor? If he hasn't been able to convince the world through three decades of scare tactics and selective science, 24 hours of hot air isn't going to do the job. Just in case you're thinking of tuning into Gore's production, though, you should probably know that the broadcast has been rated "U" for "Unsubstantiated."


And Last...
In an effort to help supporters "get the facts" and "fight the smears," the Obama campaign has launched a new website called AttackWatch. Arrayed in warning colors of red and white, with a black background for added eeriness, the goal is for people to rat out their neighbors for saying naughty things about the Obama administration. For example, saying, "The stimulus was supposed to keep unemployment below 8 percent; it's now over 9 percent," could get you reported. "ObamaCare is a regulatory nightmare that is already costing jobs," is another reportable smear. Various charges are countered with the same old platitudes regurgitated at every teleprompter recitation.

We're not alone, however, in getting a good laugh out of the Obama campaign's paranoia. Even The Washington Post called the site a "laughingstock." Meanwhile, Misfitpolitics came up with a hilarious parody, and others are lining up to mock the effort. For our part, we're just hoping that we'll get reported.

Semper Vigilo, Fortis, Paratus et Fidelis!
Nate Jackson for The Patriot Post Editorial Team

By EMILY STEEL
The Federal Trade Commission wants to give parents more control over what information websites can collect about their children.

The FTC is proposing changes to the Children's Online Privacy Protection Act that include requiring parental consent for websites to collect a broader range of information about children under age 13, including location. They also would require parental permission for a website to use tracking software, known as cookies, to build a profile about a child and monitor children's online activities for purposes such as targeting ads.

Journal Community
Question of the Day: Should Congress pass laws requiring parental consent for companies to gather information about children's online activities?

.The move marks a major action by federal regulators to bolster privacy protections for Internet users.

The proposed changes, however, are likely to face stiff opposition from Internet and advertising companies, as new rules would drastically change how they currently operate. Websites currently only have to obtain parental consent when collecting personal information about children such as their name and email address.

The FTC's proposed changes to the decade-old children's privacy rules come amid escalating scrutiny from federal regulators and lawmakers of the fast-growing business of tracking Internet users and selling personal details about their lives such as their online purchases and social-networking activities.

"The Internet revolution makes snapshot photography and wiretap technology look like child's play," FTC Commissioner Julie Brill said during a speech Thursday at the International Association of Privacy Professionals. Ms. Brill said that the level of online tracking is unprecedented, largely undetected by the consumer and raises serious privacy concerns.

As proof that the use of consumer data is wading into dangerous territory, Ms. Brill cited a 2010 story from The Wall Street Journal's "What They Know" series on online privacy issues about a life insurer that used tracking data about consumers to help determine their life expectancy, rates and insurance coverage.

In addition to Thursday's proposed changes, the FTC has been calling for companies to build stronger privacy protections for consumers and be more transparent about information they collect. The commission also has launched investigations of Internet, advertising and mobile companies for deceptive online privacy practices or violating established guidelines.

In the "What They Know" series, the Journal last year reported that popular children's websites install more tracking technologies on personal computers than the top websites aimed at adults.

Internet and advertising industry groups argue that many of the changes are unnecessary.

The Direct Marketing Association disputed the FTC's proposed change that would require parental consent before using tracking cookies because the programs don't always identify children but rather the computer. The trade group said the definition of "personal information" only should include information that could be used to directly contact or communicate with a child.

"We think they may have gone a little too far," said Jerry Cerasale, senior vice president of government affairs for the Direct Marketing Association.

The Interactive Advertising Bureau, which represents more than 500 media and Internet companies, took issue with a proposed change that would require self-regulatory groups to audit their members annually and report the results to the commission. The group said it supports random audits but that yearly audits would create a "dangerous precedent which would impose burdensome and largely unnecessary expenses on the very companies that are proactively taking steps to protect children."

Meanwhile, lawmakers and privacy advocates applauded the commission's proposed updates.

"Given the potential for this sensitive data to be misused to endanger a child, the commission's proposal in this area is a much-needed step," Rep. Edward Markey (D., Mass.), said in a statement. Mr. Markey, along with Rep. Joe Barton (R., Tex.), introduced a children's online privacy bill earlier this year to update existing rules and would extend privacy safeguards to teenagers. The bill now is in committee. "Strong legal requirements along with vigilant enforcement are needed to protect children from tracking and targeting on the Internet," Mr. Markey said.

The FTC is soliciting comments on its proposed changes until Nov. 28. The commission last reviewed the Children's Online Privacy Protection Act in 2005, without making changes.

Write to Emily Steel at emily.steel@wsj.com

Forgive me, but I think you guys are delusional on this.  Challenging Baraq would rip the Democratic Party in half.  Much of the opposition to him is because they think he did not go far enough.  The big money is not going to sign up for such a campaign, nor is Hillary, nor is Bloomberg, nor is anyone else.

As I see it GM, that's not the point.

What would she offer that was different?  The same, but more of it done more efficiently?

The Producer Price Index (PPI) was unchanged in August To view this article, Click Here
Brian S. Wesbury - Chief Economist
Robert Stein, CFA - Senior Economist
Date: 9/14/2011


The Producer Price Index (PPI) was unchanged in August, matching consensus expectations.  Producer prices are up 6.5% versus a year ago.

The lack of change in the overall PPI was largely due to a 1% drop in energy prices offsetting a 1.1% gain in food prices. The “core” PPI, which excludes food and energy, increased 0.1%.
 
Consumer goods prices were flat in August but are up 8.2% versus last year.  Capital equipment prices were down 0.1% in August but are up 1.6% in the past year.
 
Core intermediate goods prices declined 0.1% in August but are up 7.5% versus a year ago.  Core crude prices rose 1.6% in August and are up 24.2% in the past twelve months.
 
Implications:  Lower energy prices have temporarily cooled overall producer price inflation. Although producer prices are up 6.5% in the past year they were unchanged in August and are down at a 0.6% annual rate in the past three months. However, these figures do not give the Federal Reserve extra room for easing. “Core” producer prices, which exclude food and energy, are up at a 3.4% annual rate in the past three months, making it tougher for the Fed to justify a third round of quantitative easing.  Core prices for intermediate goods slipped 0.1% in August but are still up 7.5% in the past year; core crude prices increased 1.6% in August and are up 24.2% versus a year ago. Some of these large gains in core prices further back in the production pipeline will feed through to prices for finished goods. In other recent inflation news, import prices declined 0.4% in August but were up 0.3% excluding oil. Import prices are up 13% versus a year ago and up 5.5% excluding oil. Export prices increased 0.5% in August and 0.3% excluding agriculture. Export prices are up 9.6% from a year ago while prices ex-ag are up 5.5%. This is an environment that calls for monetary restraint, not looser money.
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The Consumer Price Index (CPI) rose 0.4% in August To view this article, Click Here
Brian S. Wesbury - Chief Economist
Robert Stein, CFA - Senior Economist
Date: 9/15/2011


The Consumer Price Index (CPI) rose 0.4% in August versus a consensus expected increase of 0.2%. The CPI is up 3.8% versus a year ago.

“Cash” inflation (which excludes the government’s estimate of what homeowners would charge themselves for rent) also rose 0.4% in August and is up 4.5% in the past year.
 
Gains in consumer prices were widespread. Energy prices increased 1.2%, food prices were up 0.5% and the “core” CPI, which excludes food and energy, was up 0.2%, matching consensus expectations. Core prices are up 2.0% versus last year.
 
Real average hourly earnings – the cash earnings of all employees, adjusted for inflation – fell 0.6% in August and are down 1.9% in the past year. Real weekly earnings are down 1.8% in the past year.
 
Implications: Consumer price inflation came in well above consensus expectations for August, the second month of hot readings.  Consumer prices are now up 3.8% versus a year ago.  This should make it clear to the Federal Reserve that an easy monetary policy is taking a toll on the US economy in the form of higher inflation.  It should also give them great pause before embarking on any measures to ease monetary policy further.  The Fed is likely to discuss these measures at its meeting next week.  Before today’s data, the Fed appeared to be moving toward a program of buying more longer-maturity treasury securities.  We believe this would be a mistake.  The Fed has hidden behind relatively low readings for “core” inflation, which exludes food and energy, to justify its accommodative policy.  But that dog will no longer hunt.  Core prices are up 2.0% from a year ago (at the top of the Fed’s so-called target range), at a 2.7% annual rate in the past six months and a 2.9% annual rate in the past three months.  “Cash” inflation, which excludes the government’s estimate of what homeowners would pay themselves in rent, is up 4.5% in the past year.  Cash inflation is more indicative of the inflation actually being felt by consumers.  In other news this morning, new claims for unemployment benefits rose 11,000 last week to 428,000.  The four-week moving average is 420,000 versus 440,000 in May.  Continuing claims for regular state benefits fell 12,000 to 3.73 million.  High-frequency indicators, like claims, provide real-time data on economic activity.  The increase in claims reflects the same problems with employment we have seen in the past two years, not a double-dip in economic activity.

September 14, 2011 | 1931 GMT
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Analyst Reva Bhalla discusses the factors that have allowed Yemeni President Ali Abdullah Saleh to gradually regain authority in Sanaa and the reasons for the protracted political stalemate in the country.

The Yemeni Political Crisis Stagnates

Protests and clashes between opposition and pro-government forces have continued across Yemen since Monday, when the Yemeni president signed a deal authorizing his vice president to negotiate a power transfer deal with the opposition and organize early elections. The president and his allies may not be able to assert authority over the Yemeni state overall, but his faction is making notable progress in strengthening control over the capital, Sanaa. That means Yemen will remain in protracted political stalemate and below the threshold for civil war for some time to come.

Yemeni President Ali Abdullah Saleh, who remains in Saudi Arabia while his family members and allies continue to run state affairs in the Yemeni capital Sanaa, signed a deal on Monday to authorize his vice president to negotiate a power transfer deal with the opposition and organize early elections in line with the GCC [Gulf Cooperation Council] initiative. That initiative calls for Saleh to step down with immunity and the organization of early elections within three months of signing the deal. The deal, as expected, was full of caveats. Saleh retains the right to reject the deal in the end, and he refused to give up his post overall. If Saleh is going to leave, and he’s in apparently no rush to do so, he is going to leave on his own terms.

The opposition saw right through the deal and promptly held demonstrations on Tuesday under the slogan “no deal, no maneuvering, the president should leave.” Saleh likely anticipated the opposition’s reaction. This is yet another step along the way that allows Saleh to appear cooperative with the U.S. and other mediators while holding out just enough on opposition demands to make it appear as though the opposition is the one rejecting the deal in the end.

What’s more important to understand, and something we’ve been saying since the beginning of this crisis, is that Saleh and his clan have been maintaining control over the organs of the state that matter, namely the security apparatus. In recent days for example, the Republican Guards, led by Saleh’s son, have been making notable progress in reclaiming opposition territory in and around Sanaa. And the United States, for lack of better options, is okay with that, especially after the United States has made considerable investment in Yemen since 9/11 in an attempt to develop a so-called new guard that would keep at least some distance from the large number of Islamist sympathizers that continue to pervade Yemen’s intelligence and security agencies. The United States is maintaining pressure on Saleh and his allies to work with the opposition, but Washington is just as concerned about creating the conditions for civil war in the country that would play to the hands of al Qaeda in the Arabian Peninsula and its jihadist allies that continue operating in the country.

Meanwhile, the main arbiter in this dispute, Saudi Arabia, remains very much divided over how to manage this political crisis. Some Saudi factions have openly backed Saleh and his clan, while others have been backing the tribes and major opposition figures that are against Saleh. Some of this has to do with personal differences between Saudi King Abdullah and Saudi Interior Minister Prince Naif in their personal relationships with Saleh, but it goes to show that even Saudi Arabia has yet to form a coherent policy in managing its southern neighbor. Saudi Arabia generally prefers Yemen to remain weak and thus deeply exposed to Saudi influence. At the same time, Saudi Arabia does not want Yemen to disintegrate to the point that al Qaeda in the Arabian Peninsula, whose target set remains strategically lasered in on the Saudi kingdom, has the room to harness its skills and use Yemen as a more secure launchpad for transnational attacks. These mixed signals from Saudi Arabia are prolonging the political crisis in Yemen, but what’s clear is that Saleh and his clan maintain control over Sanaa, the capital, and the opposition does not yet have what it takes to shift that dynamic in any fundamental way.

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This piece brings to mind some questions I have been meaning to ask for a while now about the IMF.

If I have my numbers right, the US kicks in 1/6.   Thus the $1T for Greece and the $1T (do I have these numbers right?) mean the US taxpayer, WITHOUT REPRESENTATION, got knicked for $333B!!!  Yet somehow this is never discussed, while a giant game of chicken between Bonehead Boener and Baraq yielded current cuts of $21B this year and $45N next year.  Truly we have gone through the looking glass and partaken of the magic mushrooms there.

Worse yet, the following piece gives me the intuition that we are about to get knicked for several multiples of that.

So, why are we in the IMF?  Qui bono?  What happens if we withdraw?

Marc

Europe Solicits American Advice On Financial Crisis

U.S. Treasury Secretary Tim Geithner will travel to Poland on Friday to meet with eurozone finance ministers. To Stratfor’s knowledge this is the first time an American Treasury secretary has ever been invited to the table. That aloofness is no surprise; the eurozone is a political creation designed to compete with the U.S. dollar. The reason for the sudden break with precedent is equally obvious: the euro is flirting with outright failure, the consequences of which would at a minimum include a new recession. Sharing crisis-mitigation notes makes a great deal of sense for both Americans and Europeans.

Geithner’s presence is particularly useful for two reasons. First, despite the vitriol that is a hallmark of American domestic politics, American monetary policy is remarkably collegial. The transitions between Treasury secretaries are strikingly smooth. Geithner himself worked for the Federal Reserve before coming into his current job, and Geithner’s partners in managing the U.S. system — the chairmen of the Federal Reserve and the Federal Deposit Insurance Corporation — are typically apolitical. Geithner holds the United States’ institutional knowledge on economic crisis management.

“Geithner will undoubtedly point out that the European system is not capable of surviving the intensifying crisis without dramatic changes.”
Second, what Geithner doesn’t know, he can easily and quickly ascertain by calling one of the chairmen mentioned above. This is a somewhat alien concept in Europe, which counts 27 separate banking authorities, 11 different monetary authorities, and at last reckoning some 30 entities with the power to carry out bailout procedures.

Getting everyone on the same page requires weeks of planning, a conference room of not insignificant size and a small army of assistants and translators, followed by weeks of follow-on negotiations in which parliaments and perhaps even the general populace participate in ratification procedures. The last update to the European Union’s bailout program was agreed to July 22, but might not be ready for use before December. In contrast, the key policymakers in the American system can in essence gather at a two-top table for an emergency meeting and have a new policy in place in an hour.

Geithner will undoubtedly point out that the European system is not capable of surviving the intensifying crisis without dramatic changes. Those changes include, but are hardly limited to, federalizing banking regulation, radically altering the European Central Bank’s charter to grant it the tools necessary to mitigate the crisis, forming an iron fence around the endangered European economies so that they don’t crash everyone else, and above all recapitalizing the European banking sector to the tune of hundreds of billions (if not trillions) of euros — so that when trouble further intensifies,  the entire European system doesn’t collapse.

All of these steps are simply illegal under existing European law. Changing that, using European rule-making procedures, would require treaty changes, which entail a minimum two years of negotiations and ratifications. Barring such structural assaults on the problem, all that remains is to discuss crisis-management tools such as those implemented by the United States during the 2008-2009 crisis. The lessons learned there may be tweaked and applied to Europe’s current dilemmas, but all of them will be temporary and marginal if the crisis’ root causes are not addressed.

The Europeans during the meeting will ask the Americans what Washington can do to help. (Technically this is a question for the Federal Reserve chairman, but Ben Bernanke and Geithner have been on each other’s speed dial for some time now.) The answer: Precisely the same thing the American government did during the last financial crisis. At that time global markets seized up due to fear, and banks became afraid to lend to one another. Lending and credit specifically, and economic activity in general, ground to a halt. So the U.S. Federal Reserve granted unlimited low-interest dollar-denominated loans to nearly anyone who wanted them and could provide reasonable collateral. Due to the depth of the crisis, even foreign entities qualified. That bought time for investors, lenders and consumers to recover from their shock. After a few nervous months, normalcy returned and the Fed dialed back the liquidity.

The key words in that summary are “bought time.” While the American economic model comes in for a good amount of criticism — warranted and otherwise — it is a singular, unified system with relatively clear rules and modes of behavior. The European crisis is a crisis precisely because there is no single authority, no single set of enforced rules, and no arbiter besides another summit. When the American system suffered a crisis, the Fed and Treasury could buy time for a broadly functional system to fix itself. The structures that could carry Europe through a crisis have yet to be built.

3 more murders linked to Gunwalker

By Sharyl Attkisson


Weapons linked to ATF's controversial "Fast and Furious" operation have been tied to at least eight violent crimes in Mexico including three murders, four kidnappings and an attempted homicide.

According to a letter from U.S. Assistant Attorney General Ronald Weich to Rep. Darrell Issa (R-CA) and Sen. Charles Grassley (R-Iowa), the disclosed incidents may be only a partial list of violent crimes linked to Fast and Furious weapons because "ATF has not conducted a comprehensive independent investigation."

When added to the guns found at the murder scene of Border Patrol Agent Brian Terry in the U.S., the newly-revealed murders in Mexico bring the total number of deaths linked to Fast and Furious to four.

According to the Justice Department letter:

One AK-47 type assault rifle purchased by a Fast and Furious suspect was recovered Nov. 14, 2009 in Atoyac de Alvarez, Mexico after the Mexican military rescued a kidnap victim.

On July 1, 2010, two AK-47 type assault rifles purchased by Fast and Furious suspects were recovered in Sonora, Mexico after a shootout between cartels. Two murders were reported in the incident using the weapons.

On July 26, 2010, a giant .50 caliber Barrett rifle purchased by a Fast and Furious suspect was recovered in Durango, Mexico after apparently having been fired. No further details of the incident were given.

On Aug. 13, 2010, two AK-47 type assault rifles purchased by a Fast and Furious target were recovered in Durango, Mexico after a confrontation between the Mexican military and an "armed group."

On Nov. 14, 2010, two AK-47 type assault rifles purchased by Fast and Furious targets were recovered in Chihuahua, Mexico after "the kidnapping of two individuals and the murder of a family member of a Mexican public official." Sources tell CBS News they believe this is a reference to a case we previously reported on: the terrorist kidnapping, torture and murder of Mario Gonzalez Rodriguez. Rodriguez was the brother of then-attorney general Patricia Gonzalez Rodriguez. The terrorists released video of Rodriguez before his death, in handcuffs surrounded by hooded gunmen.

On May 27, 2011, three AK-47 type assault rifles purchased by Fast and Furious targets were recovered in Jalisco, Mexico after having been fired. No other details of the incident were provided, but the date and location match with another incident previously reported by CBS News. On May 27 near Jalisto, cartel members fired upon a Mexican government helicopter, forcing it to make an emergency landing. According to one law enforcement source, 29 suspected cartel members were killed in the attack.

http://www.youtube.com/watch?feature=player_embedded&v=QAuBc_cbXo0

http://www.theblaze.com/stories/nobel-prize-winner-resigns-over-an-incontrovertible-stance-on-global-warming/

Posted here because of its focus on the Jewish vote:

By DAN SENOR
New York's special congressional election on Tuesday was the first electoral outcome directly affected by President Obama's Israel policy. Democrats were forced to expend enormous resources in a losing effort to defend this safe Democratic district, covering Queens and Brooklyn, that Anthony Weiner won last year by a comfortable margin.

A Public Policy Poll taken days before the election found a plurality of voters saying that Israel was "very important" in determining their votes. Among those voters, Republican candidate Robert Turner was winning by a 71-22 margin. Only 22% of Jewish voters approved of President Obama's handling of Israel. Ed Koch, the Democrat and former New York mayor, endorsed Mr. Turner because he said he wanted to send a message to the president about his anti-Israel policies.

This is a preview of what President Obama might face in his re-election campaign with a demographic group that voted overwhelmingly for him in 2008. And it could affect the electoral map, given the battleground states—such as Florida and Pennsylvania—with significant Jewish populations. In another ominous barometer for the Obama campaign, its Jewish fund-raising has deeply eroded: One poll by McLaughlin & Associates found that of Jewish donors who donated to Mr. Obama in 2008, only 64% have already donated or plan to donate to his re-election campaign.

The Obama campaign has launched a counteroffensive, including hiring a high-level Jewish outreach director and sending former White House aide David Axelrod and Democratic National Committee Chair Debbie Wasserman-Schultz to reassure Jewish donors. The Obama team told the Washington Post that its Israel problem is a messaging problem, and that with enough explanation of its record the Jewish community will return to the fold in 2012. Here is an inventory of what Mr. Obama's aides will have to address:

• February 2008: When running for president, then-Sen. Obama told an audience in Cleveland: "There is a strain within the pro-Israel community that says unless you adopt an unwavering pro-Likud approach to Israel that you're anti-Israel." Likud had been out of power for two years when Mr. Obama made this statement. At the time the country was being led by the centrist Kadima government of Ehud Olmert, Tzipi Livni and Shimon Peres, and Prime Minister Olmert had been pursuing an unprecedented territorial compromise. As for Likud governments, it was under Likud that Israel made its largest territorial compromises—withdrawals from Sinai and Gaza.

• July 2009: Mr. Obama hosted American Jewish leaders at the White House, reportedly telling them that he sought to put "daylight" between America and Israel. "For eight years"—during the Bush administration—"there was no light between the United States and Israel, and nothing got accomplished," he declared.

Nothing? Prime Minister Ariel Sharon uprooted thousands of settlers from their homes in Gaza and the northern West Bank and deployed the Israeli army to forcibly relocate their fellow citizens. Mr. Sharon then resigned from the Likud Party to build a majority party based on a two-state consensus.

In the same meeting with Jewish leaders, Mr. Obama told the group that Israel would need "to engage in serious self-reflection." This statement stunned the Americans in attendance: Israeli society is many things, but lacking in self-reflection isn't one of them. It's impossible to envision the president delivering a similar lecture to Muslim leaders.

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CloseRoll Call/Getty Images
 
Stuart Balberg of Brooklyn, New York, calls voters on behalf of Bob Turner, Republican candidate for the congressional seat vacated by Democrat Anthony Weiner.
.• September 2009: In his first address to the U.N. General Assembly, President Obama devoted five paragraphs to the Israeli-Palestinian conflict, during which he declared (to loud applause) that "America does not accept the legitimacy of continued Israeli settlements." He went on to draw a connection between rocket attacks on Israeli civilians with living conditions in Gaza. There was not a single unconditional criticism of Palestinian terrorism.

• March 2010: During Vice President Joe Biden's visit to Israel, a Jerusalem municipal office announced plans for new construction in a part of Jerusalem. The president launched an unprecedented weeks-long offensive against Israel. Mr. Biden very publicly departed Israel.

Secretary of State Hillary Clinton berated Prime Minister Benjamin Netanyahu on a now-infamous 45-minute phone call, telling him that Israel had "harmed the bilateral relationship." (The State Department triumphantly shared details of the call with the press.) The Israeli ambassador was dressed-down at the State Department, Mr. Obama's Middle East envoy canceled his trip to Israel, and the U.S. joined the European condemnation of Israel.

Moments after Mr. Biden concluded his visit to the West Bank, the Palestinian Authority held a ceremony to honor Dalal Mughrabi, who led one of the deadliest Palestinian terror attacks in history: the so-called Coastal Road Massacre that killed 38, including 13 children and an American. The Obama administration was silent. But that same day, on ABC, Mr. Axelrod called Israel's planned construction of apartments in its own capital an "insult" and an "affront" to the United States. Press Secretary Robert Gibbs went on Fox News to accuse Mr. Netanyahu of "weakening trust" between the two countries.

Ten days later, Mr. Netanyahu traveled to Washington to mend fences but was snubbed at a White House meeting with President Obama—no photo op, no joint statement, and he was sent out through a side door.

• April 2010: Mr. Netanyahu pulled out of the Obama-sponsored Washington summit on nuclear proliferation after it became clear that Turkey and Egypt intended to use the occasion to condemn the Israeli nuclear program, and Mr. Obama would not intervene.

• March 2011: Mr. Obama returned to his habit of urging Israelis to engage in self-reflection, inviting Jewish community leaders to the White House and instructing them to "search your souls" about Israel's dedication to peace.

• May 2011: The State Department issued a press release declaring that the department's No. 2 official, James Steinberg, would be visiting "Israel, Jerusalem, and the West Bank." In other words, Jerusalem is not part of Israel. Later in the month, only hours before Mr. Netanyahu departed from Israel to Washington, Mr. Obama delivered his Arab Spring speech, which focused on a demand that Israel return to its indefensible pre-1967 borders with land swaps.

Mr. Obama has made some meaningful exceptions, particularly having to do with security partnership, but overall he has built the most consistently one-sided diplomatic record against Israel of any American president in generations. His problem with Jewish voters is one of substance, not messaging.

Mr. Senor is co-author with Saul Singer of "Start-up Nation: The Story of Israel's Economic Miracle" (Twelve, 2011

By PAUL E. PETERSON
AND DANIEL NADLER
Last Thursday, the president urged Congress to pony up roughly $200 billion in taxpayer money to "provide more jobs for teachers [and] more jobs for construction workers" and more money to carry out other state and local activities. He urges Congress to spend this money even after handing out hundreds of billions of dollars for similar purposes as part of the 2009 stimulus package, as well as a score and more billion dollars again in 2010.

These vast contributions to the coffers of state and local governments, though pitched as a jobs bill, are in reality the latest in a series of bailouts for debt-ridden state and local governments. They are of special benefit to states in the blue regions of the country where the president's most fervent supporters reside.

In many blue states, legislators have copied the politicians in Washington by running up state debts to extraordinary levels. Nationwide, state debt is running around $3 trillion. If unfunded pension liabilities are factored in, estimated liabilities leap forward by another $1 trillion to $3 trillion, depending on the optimism of the assumptions made.

The bond market has taken notice. Before the 2008 financial crisis, state sovereign debt was just about the safest place to invest. Because investors did not pay taxes on the interest, states were able to borrow money at rates below those paid for federal securities. With the onset of the financial crisis, not only did borrowing costs rise across the board, but differences in interest rates among states widened dramatically. Bond holders concluded that some states, like Greece, had been extraordinarily profligate and, even worse, lacked the will to rein in their expenditures.

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CloseChad Crowe
 .In a new study at Harvard's Program on Education Policy and Governance, we discovered why the Obama administration is so interested in helping out the states. States with a bluish hue—that is, states with legislatures that are heavily Democratic and have a highly unionized public-sector work force—must pay interest rates that are often an extra half a percentage point higher than states with a reddish coloring.

Specifically, a 20 percentage-point increment in either the Democratic share of the state legislature or a comparable increase in the share of the public work force that is unionized drives up interest rates by nearly a half a percentage point on a five-year security note. That amount is nontrivial. In Obama's home state of Illinois, it is costing governments over $700 million annually.

The impact of these political factors on interest rates is in addition to the impact of standard economic factors, such as a state's unemployment rate, its gross domestic product growth, and its debt-to-GDP ratio, all of which are themselves shaped in part by the state's political climate.

In short, the bond market has concluded that the more unionized the state and the bluer its political coloring, the riskier it is to hold bonds marketed by that state.

States will face even higher interest rates if the president's proposed limit on the deductibility of state and municipal bond interest income (to help pay for the jobs plan) is enacted. If the interest is no longer deductible, investors will demand a higher rate of return for buying bonds, and state calls for more federal aid will intensify.

Federal rescue of states is a dramatic departure from past practice. State bankruptcies date back to the 1840s when, amid a financial crisis, Pennsylvania, Michigan, Illinois and five other states discovered they had invested too heavily in infrastructure. The last state bankruptcy was in Arkansas during the 1930s. But overall the instances were few; in each case the federal government refused to come up with a fix.

Bankrupt states paid the price, but for the country as a whole, a system of fiscally sovereign states has proven incredibly beneficial to the nation's economic well-being. Every state is responsible for its own police, fire, schools, transport and much more, and most of the time they do reasonably well. If they manage their affairs so as to attract business, commerce and talented workers, states prosper. If states make a mess of things, citizens and businesses vote with their feet, marching off to a part of the country that works better.

It is this exceptional federalist system that helped drive the rapid growth of the American economy throughout the first two centuries of the country's history. Because state and local governments competed with one another for venture capital, entrepreneurial talent and skilled workers, governments generally had to be attentive to the needs of both citizens and commerce.

Related Video
 Texas Sen. Kay Bailey Hutchison on whether Obama's jobs plan can pass the Senate.
..When it comes to fiscal sovereignty, U.S. federalism is exceptional. Hardly any other country in the world has anything like it. Only Switzerland and Canada—two nations that aren't doing that badly these days—come close.

But federal fiscal bailouts put our federal system at risk. In essence, the national government is acting as if states are too big to fail. In the next financial crisis, the federal government may decide that states need to be treated like General Motors or, at least, be given ever bigger handouts of the kind the Obama administration seems committed to making.

But if the federal government is going to tacitly assume responsibility for state debts, then those $3 trillion in sovereign state debt must be added to the $14 trillion national debt that has already caused grave concern, pushing the current U.S. debt into the danger zone. Even if pension liabilities are ignored, the combined federal-state-local debt runs in excess of 120% of GDP.

The costs go beyond dollars and cents. The more often the federal government bails out the states, the more Washington bureaucrats will insist on regulating state and local affairs. At some point the United States will see the end of state fiscal sovereignty and the demise our federal system of government.

Mr. Peterson, a senior fellow at the Hoover Institution, is the director of Harvard's Program on Education Policy and Governance, where Mr. Nadler is a research fellow. The study mentioned in this op-ed is available at www.ksg.harvard.edu/pepg.

"As any good High School student will tell you, any powers not enumerated specifically in the constitution are reserved to the states themselves. This is where the states get their authority to issue carry permits as they see fit. However, by not providing universal reciprocity the states have set up a condition where a citizen in one state may choose not to travel in interstate commerce due to that lack of reciprocity. Because of that effect on interstate commerce, Congress has the ability to act."

I have a bit of a problem here.  I think current Interstate Commerce clause jurisprudence exceeds by quite a bit what the Constitution really says.   It makes sense to me that each state find its way on these things.

I would not have guessed that the three of us have the same , , , avatar.  

===================

"We should never despair, our situation before has been unpromising and has changed for the better, so I trust, it will again. If new difficulties arise, we must only put forth new exertions and proportion our efforts to the exigency of the times." --George Washington, letter to Philip Schuyler, 1777

James Madison

and picks up on my point about the Egyptian military being pressured to change relations with Israel due to domestic considerations.
===================Turkey Seeks to Reassert Its Influence As Tensions Flare Between Egypt and Israel

Following a near crisis situation late Friday night when protesters laid siege to the Israeli embassy, the head of Israel Defense Forces (IDF) Planning Unit, Amir Eshel, traveled to Cairo on Monday to discuss the recent security developments in Egypt. Although Eshel’s visit was reportedly focused primarily on the threats posed by lawlessness in the Sinai Peninsula, he also likely discussed an issue of major concern for Israel at the moment — the rising tone of anti-Israel sentiment in public demonstrations that has become commonplace in post-Mubarak Egypt.

“The only thing holding back a growing tidal wave of anti-Israel sentiment in Egypt is the military.”
The Egyptian protests that began last January in an effort to force the removal of then-President Hosni Mubarak never really stopped, even after he was deposed in a military coup. There have been occasional lulls, but the ruling Supreme Council of the Armed Forces (SCAF) has been dealing with demonstrations on a consistent basis now for over seven months. It was only recently that one of the major themes has become opposition to the SCAF’s relationship with Israel. The change in tone was triggered by the deaths of six members of the Egyptian security forces following the Aug. 18 Eilat attacks – and the way the SCAF handled the aftermath, most notably in refusing to recall Egypt’s ambassador to Israel.

There is a disconnect between the way most Egyptian people feel regarding Israel and the strategic considerations that guide the military’s relations with its northeastern neighbor. To put it simply, most Egyptians dislike Israel and the peace treaty the two nations negotiated in 1978, while the military views their long-held alliance as a pillar of Cairo’s national security. Israel’s fear since last winter has been that new domestic considerations would leave the Egyptian military vulnerable to public pressure to amend this relationship.

The SCAF could have prevented the demonstrations outside the Israeli embassy from escalating to the point where protesters were able to physically enter the building. There was an order from the top to allow the situation to become a near crisis before intervening to stop it. The SCAF waited for what must have felt like to Israel (and the United States) an interminably long time to order its commandos to bring the crisis to an end, whisking the remaining staff away and out of harm’s way. Israel expressed appreciation for this rescue, but it also likely understood the message conveyed by this incident: The only thing holding back a growing tidal wave of anti-Israel sentiment in Egypt is the military.

It is unclear who organized the demonstrations that began as a standard protest in Tahrir Square before moving over to the embassy. The Israeli embassy had witnessed several such (largely peaceful) gatherings in the weeks following the Eilat attacks. Israel is not as concerned with who organized the demonstrations as much as how the SCAF may feel it has to appease the demonstrators to avoid being seen as being too quick to rush to Israel’s defense. Although the SCAF is still in firm control of the country and has no intention of breaking the peace treaty, in Israel’s mind, exploiting events such as last Friday’s for political gain is playing with fire. At some point, the military may not be able to save the day.

Turkish Prime Minister Recap Tayyip Erdogan — the leader of another country whose relationship with Israel has seen significant strains — was already scheduled to visit Cairo on Monday when the embassy crisis erupted. In the middle of what Ankara has dubbed the Turkish leader’s “Arab Spring tour,” Erdogan has planned visits to Egypt, Libya and Tunisia. (An idea to also visit the Gaza Strip was abandoned last week, possibly at the behest of the SCAF.)

Turkey, like Egypt, has a long-running alliance with Israel. Unlike Egypt, Turkey had already begun to re-orient its foreign policy in recent years away from having such close ties with Israel. (The Mavi Marmara incident, which has recently come back into the headlines, was a by-product of this shift that began in 2008.) Reasserting its influence in the Arab world, especially in the countries that experienced political turmoil in the wake of the Arab Spring, is currently one of Ankara’s main foreign policy goals. The Turks are using their public spat with Israel to gain credibility in the region that shares anti-Israel sentiments. The sight of Erdogan speaking to a crowd of Egyptians in Arabic on Monday to chants of “Protector of Islam” points to the utility of such an approach.

In the end, however, Turkey is not yet ready to play the role of regional powerhouse, or to even effectively mediate the tensions between Egypt and Israel. Ankara is playing a perceptions game with Erdogan’s regional tour — a process that will take time to bear fruit. Israel, on the other hand, is facing reality. Given its strained relations with Turkey, doubt about its alliance with Egypt, a looming Palestinian U.N. vote, a weakened Syrian regime, a perpetually unpredictable Lebanon and an Iran that is about to gain from the looming vacuum in Iraq, Israel is reminded of the pitfalls of being located in the Middle East.

While I am quite sympathetic to the conclusion, I object to the methodology.

The Salvation Army is not a charity as likely to appeal to someone from SF as from South Falls.

Not really fitting in any other thread, I put it here:


Summary
Russia and Iran appear to be working together to counterbalance an apparently strengthening strategic relationship between the United States and Turkey — something neither Moscow nor Tehran wants. Though the relationship between Russia and Iran largely is one of convenience and not of mutual trust, the two powers appear to be boosting their nuclear cooperation and energy ties as leverage against a U.S.-Turkish alliance.

Analysis
After numerous delays, the Russian-built Bushehr nuclear power plant was officially launched in Iran on Sept. 12 at an inauguration ceremony attended by Russian Energy Minister Sergei Shmatko and Sergei Kiriyenko, head of Russia’s state-owned nuclear energy firm. On the same day, the head of the Atomic Energy Organization of Iran, Fereidoun Abbasi, told Press TV that Iran and Russia will cooperate on future nuclear projects beyond Bushehr – a claim that was later confirmed by Russia. Also on Sept. 12, Russia announced that its natural gas firm Gazprom, despite having previously withdrawn from a project, ostensibly out of respect for international sanctions on Iran, might take part in developing Iran’s Azar oil field and would let Iran know its decision within the month.

Russia and Iran intend with this set of developments to signal to the United States that, despite some recent rough patches, ties between the two are stronger than ever. The events of Sept. 12 stand in stark contrast to what took place less than two weeks ago, when Iran threatened to sue Russia over Moscow’s failure to deliver the S-300 strategic air defense system, complained about  delays in the Bushehr project and banned Gazprom from participating in the Azar project.

Of course, much of the cooperation displayed on Sept. 12 is still limited to political atmospherics: Iran remains wholly dependent on Russian staff and expertise to actually run Bushehr (not to mention any other projects that are proposed down the line), while Gazprom is unlikely to have the technical expertise to develop the Azar field on its own. Moreover, Russia is still holding back from more controversial maneuvers involving Iran, such as the potential sale of the S-300 air defense system.


A Convenient Relationship

The relationship between Russia and Iran is primarily one of convenience. Though Russia is not particularly interested in seeing a robust Iran that could end up posing a threat to Moscow, it regularly uses its relations with Iran as leverage against the West. Iran, meanwhile, sees Russia as its only major external patron, albeit one that it can never entirely trust to provide substantive support against outside threats.

Russia, during preparations for negotiations with the United States on the boundaries of a U.S.-led security framework in Europe, has looked to use Iran as leverage. The major concern during the U.S.-Russian dialogue is ballistic missile defense (BMD), which the United States declares is intended to defend against threats like Iran but is using to extend security commitments in Central Europe, with the strategic aim of containing Russia. Selectively amplifying the Iran threat is one of several ways Moscow intends to enhance its clout when it comes to the negotiating table with Washington and its allies in Central Europe.

But Iran was not necessarily ready to play along right away. Though Iran typically avoids actions that give the impression its external support is waning, Tehran made an exception when airing its grievances against Moscow in recent weeks. This is likely a reflection of Iran’s more confident position in the region, owed in large part to its strong status in Iraq and the low current potential for American or Israeli strikes against it. The less Iran feels vulnerable to external threats, the more open it can be about its distrust toward Russia.


The U.S.-Turkish Alignment

However, Iran is by no means free of worries, especially when it comes to its increasingly competitive relationship with Turkey. Iran is trying to counter a growing U.S.-Turkish alignment, which in turn is aimed against a perceived increase in the threat posed by Iran. Events in Syria and Iraq are already pushing Turkey (albeit subtly) into a more confrontational stance against Iran. Tehran appears to be using the common threat of Kurdish militancy as a foundation to maintain some level of cooperation with Ankara, but the strain in Turkish-Iranian ties will become increasingly difficult to conceal with time.

Turkey may also be a growing concern for Russia because of its potential role in the United States’ BMD strategy. Of great concern to both Iran and Russia is the potential for a stronger alignment of interests, between the United States and Turkey, and against Iran and Russia. BMD encapsulates this dynamic, which was on view when Turkish Prime Minister Recep Tayyip Erdogan announced Sept. 4 that Turkey was officially committed to hosting the X-band radar portion of the United States’ planned BMD system. Though Turkey tried to downplay the decision by claiming BMD was not directed at any of its neighbors in particular, Iranian President Mahmoud Ahmadinejad warned Turkey on Sept. 9 against allowing “enemies” to set up missile shields against Iran.

Russia also likely took note of this announcement as it seeks to keep its relations with Turkey on an even keel and prevent the further expansion of Washington’s BMD plans. In the current negotiations with Washington over BMD, Russia even explicitly said that if talks do not go well, Russian envoy to NATO Dmitri Rogozin would go to Iran to discuss the security situation regarding the United States’ BMD plans. This warning could allude to Russia’s threat to deliver S-300 strategic defense systems to Iran. Russia, though, will likely show a great deal of restraint when it comes to the actual delivery of those systems. Right now, Moscow is more focused on simply airing the Iranian threat.

Russia and Iran therefore both have incentive to put their cooperation on display. Iran, as it asserts itself in the region and deals with strains in its relationship with Turkey, wants to show it retains strong international backers. Moscow knows that Iran is the lever it can pull if BMD negotiations with the United States go awry. Meanwhile, Tehran shares with Moscow a concern about the strengthening relationship between the United States and Turkey. While Iran and Russia may typically share a simple relationship of convenience, they appear to be warming up to each other now.



Read more: Russia and Iran Improve Relations as U.S.-Turkish Alignment Grows | STRATFOR

Zetas Communications Network Disrupted in Veracruz

The Mexican navy on Sept. 8 dismantled a communications network used by Los Zetas throughout Veracruz state. Among the equipment seized were mobile radio transmitters, computers, radio scanners, encryption devices, solar power cells and as many as seven trailers that served as base stations, according to media reports. A spokesman for the Mexican navy said some 80 individuals have been arrested over the past month in connection with the operation, itself the result of months of work by naval intelligence officers.

Los Zetas have been known to utilize more sophisticated communications networks than other cartels, due in large part to the organization’s origins in military special operations. The Zetas needed to augment sparse communications in some areas they control, and the Veracruz network likely was for the purpose of “off the grid” communications. Since cellphones are relatively easy for authorities to monitor, Los Zetas have sought to diversify their telecommunications capabilities, a fact of which Mexican authorities are aware.

It is possible that the seizure of this communications equipment means the navy is preparing to launch operations to push the Zetas out of the Veracruz port region. Indeed, a navy spokesman said the immediate result of the operation was the disruption of the Zetas’ “chain of command and tactical coordination.” If the navy is about to engage the Zetas in Veracruz, dismantling the Zetas’ communications network would be one of the first moves it would make.

There is not yet enough evidence to conclude with certainty that an operation is in the works, but STRATFOR will continue to watch for signs of increased military operations against the Zetas in Veracruz.


Hand Grenade Attacks in Rio Bravo

On Sept. 10, armed men in an SUV and an accompanying car reportedly threw five hand grenades at two businesses in Rio Bravo, Tamaulipas state, killing two people. Beginning at 2:30 p.m., the assailants lobbed three grenades at a bar on the city’s east side, an unnamed police official said; one of the grenades failed to detonate. A few minutes later, unidentified men threw two grenades at a strip club in downtown Rio Bravo, causing the building to catch fire and injuring three people.

It is unclear who conducted the attacks, but they are believed to be the work of Los Zetas, who are engaged in a turf war with the Gulf cartel in the wider region. At present the Gulf cartel controls the Rio Bravo plaza, but Los Zetas have been known to “heat up” a plaza — increase attacks to soften their target — prior to an offensive, as was the case in Matamoros in mid-June.

The targets are significant in that they are “legitimate” businesses. Businesses can serve as money-laundering hubs for cartels and thus are not immune to attack. Also significant is that the attacks occurred during daylight hours. While violence in Mexico is unpredictable and by no means limited to nighttime hours, there is a general sense that the goings-on of a normal day are spared from targeted violence. Incidents such as the Sept. 10 grenade attacks show that this is not always the case.

If the Zetas did not conduct the attacks, they could be a symptom of infighting within the Gulf cartel. The recent death of Samuel “El Metro 3” Flores Borrego, the Gulf cartel’s Reynosa plaza boss and overall No. 2, suggests rifts are forming within the cartel. Rio Bravo can expect to see reprisal attacks regardless of who is responsible.


U.S. Citizens as Couriers for Money, Guns

Mexican authorities arrested seven individuals Sept. 7 in Piedras Negras, Coahuila state, and confiscated firearms, ammunition, radio communication equipment, two vehicles and the equivalent of $600,000. The Ministry of National Defense has not disclosed the identities or nationalities of those arrested, but local and state media have reported that they are all U.S. citizens.

It is not uncommon for a cartel to use individuals with U.S. citizenship as couriers. These individuals have unfettered access to the United States and, while highly visible due to their frequent border crossings, they may receive less scrutiny from border security. Therefore, U.S. citizens are useful in moving guns and money south into Mexico (but they are less useful coming north, as security checks are more robust when coming from Mexico to the United States). This is particularly true in an area such as Coahuila state, where authorities have recently uncovered several large weapons caches.

The corridor of Piedras Negras and its sister city in the United States, Eagle Pass, thus is valuable not as a route to smuggle drugs north but as a route to move guns and money south. (A lack of drug-smuggling routes makes the area desirable territory, so the Zetas are the only ones operating there.) As recently as Sept. 7, in a separate incident from the seven arrests, Texas law enforcement stopped a van with Texas license plates that was carrying 14 assault rifles, a sniper rifle and more than 500 assault rifle magazines.

But the incident in which seven U.S. citizens were arrested, if true, is interesting because those arrested reportedly only had enough weaponry to protect the money they were transporting. This means they were not moving guns but cash, most likely proceeds from drug sales in the United States, the beneficiaries of which are Los Zetas.



(click here to view interactive graphic)

Sept. 5

The Mexican military dismantled a drug lab in Culiacan, Sinaloa state, containing 1 kilogram (2.2 pounds) of methamphetamines and chemical precursors.
Mexican authorities attempted to stop a stolen vehicle traveling on a road in Cadereyta municipality, Nuevo Leon state. The vehicle, along with two accompanying vehicles, refused to stop, leading authorities on a chase that turned into a gunfight in which four gunmen were killed.

Sept. 6

Gunmen in Ciudad Juarez, Chihuahua state, shot and killed two women traveling in a vehicle with Texas license plates. The four-year-old daughter of one of the women survived the attack.
Federal police arrested four members of Los Aztecas in Ciudad Juarez, Chihuahua state, including a leader of the group.
A criminal group sent a message to the Department of Education in Acapulco, Guerrero state, demanding a percentage of the salaries of teachers who matched certain criteria. The message also demanded identification information on teachers in the city.
Gunmen attacked a deputy traveling in his vehicle in Lagos de Moreno, Jalisco state. During the attack, the deputy left his vehicle and was subsequently hit by a semitrailer.
Mexican authorities arrested a U.S. citizen in Mazatlan, Sinaloa state. The individual was charged with trafficking weapons from the United States for the Sinaloa cartel.

Sept. 7

Three members of Los Zetas were arrested in a neighborhood of Cadereyta, Nuevo Leon state, while attempting to kidnap an individual. One of the members arrested was in charge of the “halcones” (Zetas lookouts) in Nuevo Leon.
The Mexican Attorney General’s Office identified 18 Los Zetas operators who were involved in the attack on the Casino Royale in Monterrey, Nuevo Leon state, that killed 52 people. The Mexican government is offering a reward of 15 million pesos ($1.2 million) for information leading to the arrest of each individual.
Mexican soldiers seized approximately 2.5 tons of marijuana after receiving a tip on the existence of a drug camp in Cerro del Borbollon, Durango state. Soldiers also found a vehicle with Baja California license plates.

Sept. 8

Federal police killed seven gunmen during a firefight in Villanueva, Zacatecas state. A conflict with the gunmen had erupted earlier when two federal police officers were kidnapped in the area.
Authorities announced that an operation conducted throughout Veracruz state resulted in the dismantling of a Los Zetas telecommunications network. More than 80 members of the cartel were arrested, and a variety of communications equipment was seized, including solar power cells, high-powered transmitters, encryption devices and secure radio communication systems.

Sept. 9

A drug courier transporting 1 kilogram of cocaine was arrested at Mexico City International Airport after authorities discovered the drugs. The individual’s itinerary indicated he was flying to Rome via Madrid.
The Knights Templar posted a narcomanta over a bridge in Zamora, Michoacan state, offering a 500,000-peso reward for information leading to the location of the Los Zetas members listed on the banner.
The Mexican military seized approximately 9 tons of marijuana, 51 firearms and 8,000 rounds of ammunition hidden in a cave near Reynosa, Tamaulipas state.

Sept. 10

Unidentified men threw five hand grenades in two separate locations in Rio Bravo, Tamaulipas state. The first incident involved gunmen traveling in a vehicle who threw three grenades at bar, and the second attack involved an individual who tossed two grenades at a strip club. The attacks killed two people.

Sept. 11

The Mexican military captured Veronica Mireya “La Vero” Moreno Carreon, Los Zetas’ plaza boss for San Nicolas de los Garza, Nuevo Leon state. Also know as “La Flaca,” she was discovered to be the plaza boss after she was arrested while traveling in a stolen vehicle.

By ALAN M. DERSHOWITZ
As Egypt and Turkey increase tensions with Israel, the Palestinian Authority seeks to isolate the Jewish state even further by demanding that the United Nations accord Palestine recognition as a "state" without a negotiated peace with Israel. President Mahmoud Abbas described his playbook for seeking U.N. recognition while bypassing the step of negotiating a two-state solution: "We are going to complain that as Palestinians we have been under occupation for 63 years."

What exactly happened 63 years ago? The U.N. recommended partitioning the former British mandate into two states: one Jewish, the other Arab. Israel and most of the rest of the world accepted that partition plan, and Israel declared itself the nation-state of the Jewish people. The United States, the Soviet Union and all the great powers recognized this declaration and the two-state solution that it represented.

The Arab world unanimously rejected the U.N. partition plan and the declaration of statehood by Israel. The Arab population within Israel and in the area set aside for an Arab state joined the surrounding Arab nations in taking up arms.

In defending its right to exist, Israel lost 1% of its population, many of whom were civilians and survivors of the recent Holocaust. Yet the current Palestinian leadership still insists on calling the self-inflicted wounds caused by its rejection of a two-state solution the "nakba," meaning the catastrophe.

By claiming that the Palestinians "have been under occupation for 63 years" (as distinguished from the 44 years since the Arab states attacked Israel in 1967 and Israel occupied some lands of the invading nations), the Palestinian president is trying to turn the clock back to a time prior to Israel's establishment as a state based on the U.N.'s two-state proposal. In other words, the push for recognition by the U.N. of Palestine as a state, based on Mr. Abbas's complaint that the Palestinians have been under occupation for 63 years, is an attempt to undo the old work of the U.N. that resulted in Israel's statehood 63 years ago.

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Palestinian President Mahmoud Abbas
.Mr. Abbas's occupation complaint also explains why he is so adamant in refusing to recognize Israel as the nation-state of the Jewish people. Every Arab state is officially a Muslim state and yet, as in 1948, none of them is prepared to accept the permanent existence of a state for the Jewish people in the Middle East. Certainly some, including the Palestinian Authority, are prepared to mouth recognition of Israel as a state, so long as the so-called right of return remains for four million so-called refugees who, if they were to return in mass, would soon turn Israel into yet another Arab state.

Mahmoud Abbas is generally a reasonable man, and many of the things he has recently said about the need for the two-state solution are also reasonable. But he talks out of two sides of his mouth: one for consumption by the international community and the other for consumption by the Palestinian street. His complaint about a 63-year occupation is clearly designed to signal to his constituents that he won't give up on the ultimate goal of turning Israel into a Palestinian state.

If the General Assembly recognizes Palestine as a state without the need to negotiate with Israel, it will, in effect, be undercutting many of its own past resolutions, as well as many bilateral agreements reached between Israel and the Palestinian Authority. Such recognition would set back the prospects for a negotiated peaceful resolution and would encourage the use of violence by frustrated Palestinians who will gain nothing concrete from the U.N.'s hollow action but will expect much from it.

We saw what happened when the Palestinian people came close to achieving statehood in 2000-'01—a prospect that was shattered by Yasser Arafat's rejection of the Clinton-Barak peace plan. Arafat's rejection, which even the Saudi ambassador to the U.S. at the time, Bandar bin Sultan, later called a "crime" against the Palestinian people, resulted in a bloody intifada uprising among Palestinians in which thousands of Palestinians and Israelis were killed. The U.N. will be responsible for any ensuing bloodshed if it stokes the flames of violence by raising Palestinian expectations while lowering the prospects for a negotiated peace.

Israeli Prime Minister Benjamin Netanyahu has urged the Palestinians to return immediately to the negotiating table without any preconditions. There is no downside in doing so, since everything would then be on the table for negotiation, including the borders, the right of return, recognition of Israel as the nation-state of the Jewish people, the settlements and anything else the Palestinians would seek as part of a negotiated two-state peace.

The job of the U.N. is to promote peace, not to retard it. So instead of discouraging negotiations by promising recognition, the U.N. should be demanding that the Palestinian leadership and the Israeli government begin negotiations immediately without any preconditions. That would be a positive step.

Mr. Dershowitz is a law professor at Harvard. His latest book is "Trials of Zion" (Grand Central Publishing, 2010).

For our non-native English speakers, the reference is to a story that Ronald Reagan used to tell about his positive outlook.

Something to the effect of a boy who when he saw a pile of horse excrement was happy because it meant there was a pony somewhere nearby.

An uncommon event, we agree

The Long Run is Now To view this article, Click Here
Brian S. Wesbury - Chief Economist
Robert Stein, CFA - Senior Economist
Date: 9/12/2011


President Obama delivered his long-awaited economic address Thursday night and Friday’s reaction in equities was a major Bronx cheer. Obviously the news from Greece, with that country teetering on the edge of a default, was also a big negative.

But we believe the lion’s share of the problem is that, once again, a president is proposing policies that are both primarily oriented toward the short-run and unlikely to succeed at lifting the pace of economic growth.
 
Back in 2008, under President Bush, we got a relatively small short-term “stimulus” bill. Then, in early 2009, President Obama got exactly the “stimulus” bill he wanted, in both grand size and scope. He had the votes and no compromise was necessary. Then, late last year, the president and the outgoing Congress agreed to yet another stimulus bill.
 
Each of these policies has mostly failed, yet the president is pushing for another set of proposals cut from the same cloth, with temporary payroll tax breaks, a temporary extension of full tax-expensing for plant and equipment, and more (politically-driven) infrastructure spending.
 
The Administration is also asking for an extension of the 99-week program of unemployment benefits, so it can cover workers who lost their jobs back in late 2009 thru 2010. Without any sense of irony, he wants the program to cover workers who lost their jobs during periods that his past stimulus efforts failed to stimulate.
 
Lord Keynes famously said that “in the long run we are all dead.” But with year after year of round after round of policies focused on the short-term, it’s about time to realize we are all living in the long-term now. What we need is for our lawmakers to get off the treadmill of short-termism and start focusing on where we want our country’s policies to be for the next generation.
 
The biggest opportunity is on the tax treatment of business purchases of plant and equipment, where the president is asking for just one more year of 100% full expensing. We think, given the priority he’s putting on this bill, that lawmakers who know better should demand to make this policy permanent.
 
We do not believe the US is doomed to become another (larger) version of Greece. But with each proposal that has put a priority on the short run, we have taken a step in that direction. Now it’s time for policymakers to show they have learned something over the past few years. A thorough rejection of the president’s recent proposals would be a great start.

I've read that Al Gore is now worth $100,000,000.  Just how does a former Veep accumulate that kind of money?

 

I read that Perry defended subsidizing college tuition for illegals.

Several people have really ticked me off on Perry's SS comments.  Despite similar words to similar effect of his own, Romney (aided and abetted by supporter Tim Pawlenty) is now doing his best to establish a scurrilous meme to the effect that Perry's words means he wants to welch on SS.  I understand politics is hardball, but not only is this a lie, but it also serves the Dems.  Not that I liked Romney before, but this lowers my opinion of him as a man.  I heard, but have not seen for myself, that Bachman has played this game a bit too.

By ARTHUR LAFFER
Some people actually believe government can create jobs by taxing and borrowing from people with jobs and then giving that money to people without jobs. They call this demand stimulus. To make matters worse, other people think these demand-stimulus ideas warrant a serious response.

Government taxes cigarettes to stop people from smoking, not to get them to smoke. Government fines speeders so they won't speed, not to encourage them to drive faster. And yet contrary to common sense, it seems perfectly natural to some people that government would tax people who work or companies that are successful only to give that money to people who don't work and to bail out losing companies. The thought never crosses their minds that these policies are the very reason why our economy is in such bad shape.

I'm beginning to think that Irving Kristol was correct when he wrote, "It takes a Ph.D. in economics not to be able to understand the obvious." It shouldn't surprise anyone why the economy isn't getting better.

If the U.S. wants prosperity, government doesn't need to do something, it needs to undo much of what it already has done. Here is one area where, in the spirit of the late Congressman Jack Kemp, President Obama and I could agree.

African-Americans are suffering inordinately in the Obama aftermath of the Bush Great Recession. While overall U.S. unemployment stands at 9.1%, black unemployment has jumped to 16.7%. Black teenage unemployment is bordering on 50%, and that figure doesn't even take into account "discouraged" workers, "involuntary" part-time workers and "underemployed" workers. But even these numbers don't tell the real story. They represent real people who are suffering deeply and have been suffering for a long, long time.

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Close...Behind these numbers are millions of lives discouraged and despondent. People who've lost their self-esteem and pride. The young who have given up on America and some of whom have even turned to crime. Scars are being made across a whole ethnic subset of America. Unemployment, underemployment and involuntary part-time employment represent the loss of a precious natural resource that can never be recouped. No one can feel good about himself if he's living on handouts from Uncle Sam. We as a nation can't wait until 2013 to address this issue.

Whether President Obama's base finds supply-side economics appealing or not, he should immediately join with all members of Congress from both parties to develop a full program for enterprise zones. And while enterprise zones are desperately needed in our inner cities, there are lots of areas in the hollows of Kentucky and West Virginia that need enterprise zones as well, not to mention barrios in California and New Mexico.

Enterprise zones should be areas that are geographically defined with exceptionally high concentrations of poverty, underachievement and unemployment. The policies applicable to enterprise zones should include:

A) For all employment within the enterprise zone of people whose principal residence is also the enterprise zone, there should be no payroll tax whatsoever, neither employer nor employee portions. The employer need not be headquartered in the enterprise zone to take advantage of the elimination of the employer's portion of the payroll tax. The locus of employment does have to be in the enterprise zone.

Don't for a moment think that this will be a budget buster. Right now there aren't many jobs in our inner cities anyway and the few dollars of tax revenues lost will be more than offset by reductions in welfare spending because people will have jobs and won't need welfare. The best form of welfare is still a good job.

B) Federal and state minimum wages must be suspended in the enterprise zone. If not for all employees, then at least for employees under 30. These young people need on-the-job training, and at the present minimum wage many of them aren't worth hiring. That is why they are unemployed.

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A job seeker fills out an application with Coca-Cola at a jobs fair hosted by the Congressional Black Caucus in Miami.
.Even for teenagers who are in school, a summer job is an enormous benefit for a future productive career. This summer and last summer only 30% of all teens worked—all-time lows. We need to break this vicious cycle right now by getting rid of the youth minimum wage in our enterprise zones.

C) In the enterprise zones the government should do an expedited review of all building codes, regulations, restrictions and requirements to make sure that they don't unjustifiably impede economic growth. For example, mandated union membership rules should be voided in enterprise zones as should all prevailing wage provisions and the like.

When I lived in Chicago I reviewed a number of rules and regulations and restrictions whose primary impact was to impede our inner cities from ever achieving prosperity. I'll bet they're even worse now.

D) Profits generated by companies operating and employing people within the enterprise zone should only be taxed at one-third the regular tax rate. No matter how many fewer regulations a company faces, those companies still quite rightly respond to profits for their shareholders.

Businesses don't move their plant facilities as a matter of social conscience. They do it to make profits for their shareholders. If you want more jobs in our most depressed areas, make those areas more profitable for companies to relocate there. It's as simple as that.

I guarantee Mr. Obama that he will receive the support necessary to carry the day in Congress. And once he sees how this plan works for our most depressed areas of America, he can then extend enterprise zones to cover the whole country.

Mr. Laffer, chairman of Laffer Associates, is co-author, with Stephen Moore, of "Return to Prosperity: How America Can Regain Its Economic Superpower Status" (Threshold, 2010).