Wednesday, January 23, 2008

Why do women still gush over this creep ?

Newt Gingrich expresses himself on the stimulus proposal. Always clever and humorous Newt points out Congress is investigating the use of steroids in athletics but favors using steroids to boost the economy! (See 1 below.)

Morris puts his finger on just what Shelby Steele wrote about months ago and which I recently brought your attention regrading the fine line Obama has to walk. I repeat again what Steele said, ie, Obama must appeal to whites but cannot do so appearing to be too "black" in his appeal to Black voters.

The Clintons are playing the race card with Sleaze Bill telling their "Black friends" how loyal he has been as "America's First Black President." What sickening cleverness but one should never expect less from the Clintons, who will do whatever it takes win and why women still gush over this creep is mystifying! Perhaps a psychiatrist can explain because it borders on being sexual.(See 2 below.)

Mubarak makes a critical mistake by not expelling Gazans but perhaps he fears the consequences if he does. Both Olmert and Mubarak should learn their tolerance of Hamas will have far reaching and ominous consequences for both their nations.

Once again, by insisting on a Palestinian vote, which Hamas won hands down, the administration created a monster which has come back to haunt and GW's efforts to bring about a solution to the Palestinian -Israeli problem, which was always iffy, seems now to be doomed.(See 3 and 4 below.)

I have been premature in believing war between and Hams and Israel would have already begun but I continue to believe it is inevitable and if Israel had leadership that did not have its head in the sand no doubt Hamas would already be reeling. The article below suggests the U.N. is creating that which it professes it is seeking to prevent by always knowing the facts and disregarding them when it comes to Israel's right to defend itself.

Since Israel is always blamed for defending itself it should take the offense and tell the world and the U.N. to stick it! I know, easier said than done but eventually it will come to that. (See 5 below.)

Another take on Sleazy Bill by William Greider. He finds swarmyness! (See 6 below.)


1) A Washington Insider Economic Package That Is Too Small and Too Temporary

Republican staff advisers are developing an economic package within the timid boundaries allowed by the Washington establishment. The package they are working on is too small, too temporary and clearly inadequate for the scale of the economic problems we face.

To make matters worse, the Democrats who control Congress will begin demanding even less-useful and more-destructive economic proposals that will spend a lot more money with even less hope of helping the economy.

The Federal Reserve chairman will forget that his primary job is protecting the stability and strength of the dollar and will become a complicit political player in trying to develop an insider package that will only weaken the dollar still further. We saw evidence of this yesterday, when Chairman Bernanke and his colleagues reduced the Federal Reserve's federal funds rate three-quarters of a percentage point. As a result, the dollar dropped in global markets almost immediately.

In short, the normal patterns of Washington, D.C., are likely to lead to temporary, marginal tinkering when what America really needs is long-term, fundamental reform to protect the dollar, increase productivity and create jobs.

In 1955, Congress declared they would undertake a dramatic simplification of the Tax Code on behalf of small businesses. In the 53 years since that announcement, the tax code has grown a staggering 478% from 172,000 words to over 995,000 words.

We are witnessing the same destructive pattern that led to "stagflation" in the 1970s -- the economic disaster that ultimately led Gov. Ronald Reagan to win the presidency on the dual pledges of anti-inflationary monetary policy and a fiscal policy of cuts in non-defense spending, regulation and taxes in order to revive the economy.

This same destructive pattern led the first Bush Administration to break its "no new taxes pledge," which set the stage for the Democratic victory of 1992.

And it was this same pattern that led the Clinton Administration to adopt the largest tax increase in history in 1993 and set the stage for the Contract with America and the first Republican House majority in 40 years.

Why a Washington Insider Stimulus Package Is Doomed to Fail Politically

This pattern of Washington insider negotiating and posturing is doomed to fail politically because of the power of the world financial news system and because this gimmicky approach goes against the fundamental desires of the American people.

Just open the financial pages from yesterday: The world markets have already condemned the initial administration proposals.

If the stimulus package was designed to be a confidence builder, it is clearly failing.

On Monday, London fell 5.48%, Germany 7.16%, China 5.14%, Hong Kong 5.49% and India 7.41%. This was the world's investors' way of making clear they were not reassured.

Furthermore, to make the situation even more intense, the power of the markets is amplified by the global financial news system. Market reactions are transmitted instantly, 24 hours a day, by cable news and other news outlets.

I was on the new Fox Business Channel as a guest on Neil Cavuto's show Monday evening. By then, it was clear that the on-air analysts were joining the investors in condemning the stimulus package as inadequate and ineffective.

Americans Want Long-Term Solutions

The American people will ultimately reject the stimulus package, because it violates one of their deepest beliefs. Americans believe in long-term solutions, not short-term fixes. This Washington insider maneuvering is politics as usual at a time when the American people are crying out for a change of course.

In our American Solutions polling last summer, the American people told us by a margin of 92% to 5% that our goal should be to provide long-term solutions instead of short-term fixes. You can find this and other economic data in the Platform of the American People in Real Change and at

Overwhelmingly, the American people told us that they are prepared to be told the truth and for large, fundamental changes.

Short-term fixes are going to be rejected by the American people, and the politicians who endorse them are going to find their reputations suffering as a result.

Why a Washington Insider Stimulus Package Will Fail Economically

The stimulus packages being discussed won't just fail politically, they'll also fail economically. The size of the challenge is much bigger than the size of the current solutions being offered by Washington.

Consider these economic indicators:

* Gold has been hitting record highs ($914.30 an ounce a week ago). Gold was up 32% in 2007.

* U.S. Treasury notes, historically the best store of currency value, have lost 20% compared to gold since August 2007.

* Silver has hit a 24-year high ($16.60 an ounce last week).

* Platinum has skyrocketed to $1,592 an ounce (and if platinum is a primary metal in the next generation of cars, the world's supply will run out in 15 years, according to some estimates).

* Oil hit $100 a barrel but has slid to about $90 a barrel on recession news. (A weak economy means declining oil prices, a strong economy means rising oil prices.)

Harbingers of Inflation

High commodity prices like these are usually harbingers of inflation.

The declining dollar has been a similar indicator of inflationary pressures coming.

* The producer price index was up 7.7% through November 2007. That is the biggest jump in 34 years.

* The consumer price index was up 4.2% through November 2007. That is the biggest jump in 17 years.

The Role of the Federal Reserve: To Protect the Value of the Dollar

In this setting, it is important for Chairman Ben Bernanke and the Fed to remember their primary mission: protecting the value of the dollar.

People want their government to keep the value of its currency. We won't save and invest if we think politicians are going to steal our earnings and savings by inflating the currency.

The Fed should focus its eye firmly on strengthening the dollar and driving inflation down to 2%.

If the world came to believe the Fed was serious about protecting the dollar, the price of oil would decline substantially, the price of gold would decline substantially, the world's capital flows would return to the United States and the economy would be inherently healthier.

Creating Jobs and Productivity While Stabilizing the Dollar

If the Federal Reserve should focus on creating a stable dollar, the President and Congress should focus on increasing productivity and creating jobs.

Our political leaders should concentrate on making the American worker more successful in competing with China, India, Japan and Europe. They should also ensure that long-term productivity gains in the United States result in real prosperity that would enable Americans to pay off their debts and increase their savings for their retirement years.

Recognizing the Reality of Democratic Control of Congress

Any economic plan has to start with the recognition that Democrats control Congress. That means they get to have a large say in a successful package.

The difficulty here is compounded by the fact that the Democrats have a lot less to lose by allowing nothing to happen, because they will blame any economic problems on President Bush and the Republicans.

The key is to give the Democrats substantial influence over half the economic growth package -- the half aimed at increasing consumer spending -- but insist that the President and Republicans control the other half of the package aimed at increasing productivity and creating jobs.

Give Democrats Control Over Half the Stimulus Package. . .

If Republicans were proposing consumer stimulus plans, an ideal change would be to offset the payroll tax for both individuals and employers. Almost nothing would increase take-home pay for working Americans as fast or enable businesses to hire more people.

A second good option would be a significant increase in the tax allowance for children. This would help working families and single working mothers and could have a very positive impact.

For their part, the Democrats will almost certainly want some kind of direct giveaway program of rebates or some other payment.

As long as the amount is capped at half of a very robust package (say $150 billion of a $300 billion package), it should be the price Republicans pay to get a productivity-increasing bill through a Democratic Congress.

Here's the bottom line trade-off: Republicans should offer relative freedom to the Democrats to design the consumer stimulus part of the bill but then insist on similar freedom to design the productivity increasing portions of the bill.

. . .With a Big 'If'

There is a big "if" involved in this approach.

The Republicans have to be prepared to play hardball. They have to stand firm for a powerful productivity- and growth-oriented component or be prepared to accept the failure of the package.

The Democrats will attempt to panic the Republicans into giving up all their principles just to get "something" passed quickly.

It is very important for the President and House and Senate Republicans to stand firm for a sophisticated package that would actually increase productivity.

The first key to productivity improvements is that they have to be permanent so people can rely on them.

A Bold Plan for Economic Growth

What America needs is deep, fundamental reform to make American businesses more competitive so American workers have better paying jobs with greater job security.

The change from the current situation to a powerfully competitive American future is a much bigger change than anyone in Washington is contemplating.

Here are a few proposals that would begin to move us in the right direction:

1. Adopt the Rangel proposal for a corporate income tax cut.

When even liberal Democrats such as Ways and Means Chairman Charlie Rangel (D-N.Y.) recognize that the United States is killing jobs at home by having the second-highest corporate income tax in the world, there is a possibility of getting something done. In Rangel's generally bad bill of massive tax increases there is a provision for a corporate income tax rate cut. Republicans should simply lift that section from his bill and propose it in his name.

2. Abolish or index the capital gains tax.

A plurality of Americans favor abolishing the capital gains tax (American Solutions polling found a margin of 49% to 41%). This number will go up as Americans look at the disastrous impact of the financial meltdown on their planned retirement funds and their children's college education funds.

Abolishing the capital gains tax would lead to an immediate jump in the value of the stock market, leading to an immediate jump in the value of every retiree's 401(k). More importantly, it would lead to a burst of new investments in the United States, creating a foundation for long-term economic growth.

If abolishing capital gains is politically impossible for Democrats (who tend to be anti-capital in between high-dollar fundraisers) to accept, then the fallback position should be to index the capital gains tax so inflation does not erode capital gains. As Richard Rahn has pointed out, this would have a big effect on increasing investment in America.

3. Allow 100% expensing of all investments in new equipment.

If American businesses could write off 100% of their new equipment within one year of its purchase, there would be a boom in equipping American workers with the best and most modern equipment so they can compete with any economy in the world.

These kinds of real, permanent changes would begin to make America more competitive and more productive. They will allow the dollar to increase in value as investors start to buy up dollars to invest in the low-tax U.S. economy. In turn, this will give the Fed more room to keep interest rates low. These changes would be a step toward permanent, long-term, improved economic health.

And Don't Forget About Scoring

It is essential to remember that anything good for the American economy will be scored badly by the bureaucrats at the Joint Tax Committee and the Office of Management and Budget. Both bureaucracies have a history of being anti-capitalist, anti-market and anti-growth in predicting how economic policy changes will effect economic growth and government revenue.

The answer, however, is simple.

Establish a margin of error equal to how wrong they were in scoring revenue from the last cycle of tax cuts. Then declare that anything within that margin of error is scored as acceptable.

The fact is that it is impossible to establish sound policy for economic growth with Socialist scoring. However, in the short run, it is impossible to change these two entrenched bureaucracies.

Therefore, the answer is simply to publish the degree to which the bureaucrats were wrong in the last two or three tax-cutting cycles and write the bill within that margin of historically provable inaccuracy.

Good News From Innovative Governors: Sanford Proposes an Optional Flat Tax

In the Platform of the American People, there is overwhelming support for an optional flat tax with a one page tax form. South Carolina Gov. Mark Sanford (R) has picked up on this overwhelming desire for real change in how we pay taxes.

Here's what Gov. Sanford had to say about the optional flat tax in his State of the State address:

"A flat tax alternative that would allow someone the option of forgoing exemptions and instead pay a 3.4% flat tax in this state. We continue to believe finding ways to lower the marginal tax rate is vital to our economy, vital to competitiveness and in this case vital to the taxpayer's pocket. It is worth noting that a recent report from the Federal Reserve documented the connection between lower income tax rates and higher economic and employment growth. This is something we can do to better the economy of our state, and I'd thank Rep. Merrill for introducing a bill toward this end."

Louisiana's Jindal Starts With Accountability and Transparency

Newly elected Louisiana Gov. Bobby Jindal (R), one of the brightest and most creative people in public life, began his governorship with an executive order making state spending transparent and ordering it to be posted on the Internet so every citizen could see how their tax money is being spent.

For a Louisiana governor, this was an enormous step toward reform.

Transparency in government spending is a growing movement among the states and, like so much of the innovation on the state level in America, it's an idea the President would do well to make his own.

Publishing all non-classified federal spending on the Internet would put the power to unearth fraud and abuse in the hands of the American people.

It would be a step toward real accountability in government.

In other words, it would be real change, just what we need in Washington right now.

2) How Clinton Will Win the Nomination by Losing S.C.
By Dick Morris

Hillary Clinton will undoubtedly lose the South Carolina primary as African-Americans line up to vote for Barack Obama. And that defeat will power her drive to the nomination.

The Clintons are encouraging the national media to disregard the whites who vote in South Carolina's Democratic primary and focus on the black turnout, which is expected to be quite large. They have transformed South Carolina into Washington, D.C. -- an all-black primary that tells us how the African-American vote is going to go.

By saying he will go door to door in black neighborhoods in South Carolina matching his civil rights record against Obama's, Bill Clinton emphasizes the pivotal role the black vote will play in the contest. And by openly matching his record on race with that of the black candidate, he invites more and more scrutiny focused on the race issue.

Of course, Clinton is going to lose that battle. Blacks in Nevada overwhelmingly backed Obama and will obviously do so again in South Carolina, no matter how loudly former President Clinton protests. So why is he making such a fuss over a contest he knows he's going to lose?

Precisely because he is going to lose it. If Hillary loses South Carolina and the defeat serves to demonstrate Obama's ability to attract a bloc vote among black Democrats, the message will go out loud and clear to white voters that this is a racial fight. It's one thing for polls to show, as they now do, that Obama beats Hillary among African-Americans by better than 4-to-1 and Hillary carries whites by almost 2-to-1. But most people don't read the fine print on the polls. But if blacks deliver South Carolina to Obama, everybody will know that they are bloc-voting. That will trigger a massive white backlash against Obama and will drive white voters to Hillary Clinton.

Obama has done everything he possibly could to keep race out of this election. And the Clintons attracted national scorn when they tried to bring it back in by attempting to minimize the role Martin Luther King Jr. played in the civil rights movement. But here they have a way of appearing to seek the black vote, losing it, and getting their white backlash, all without any fingerprints showing. The more President Clinton begs black voters to back his wife, and the more they spurn her, the more the election becomes about race -- and Obama ultimately loses.

Because they have such plans for South Carolina, the Clintons were desperate to win in Nevada. They dared not lose two primaries in a row leading up to Florida. But now they can lose South Carolina with impunity, having won in Nevada.

But don't look for them to walk away from South Carolina. Their love needs to appear to have been unrequited by the black community for their rejection to seem so unfair that it triggers a white backlash. In this kind of ricochet politics, you have to lose openly and publicly in order to win the next round. And since the next round consists of all the important and big states, polarizing the contest into whites versus blacks will work just fine for Hillary.

Of course, this begs the question of how she will be able to attract blacks after beating Obama. Here the South Carolina strategy also serves its purpose. If she loses blacks and wins whites by attacking Obama, it will look dirty and underhanded to blacks. She'll develop a real problem in the minority community. But if she is seen as being rejected by minority voters in favor of Obama after going hat in hand to them and trying to out-civil rights Obama, blacks will even likely feel guilty about rejecting Hillary and will be more than willing to support her in the general election.

3)Mubarak says the 350,000 Gazan Palestinians who crossed the broken border fence to Sinai will not be expelled

They continued to stream across Thursday, Jan. 24, as Egyptian forces redeployed from the border south of the N. Sinai town of El Arish.

Senior military sources state the strategic feat achieved by Hamas Tuesday night, in capturing a section of Sinai from Egyptian forces, is irreversible. The blockade Israel continues to impose on the Hamas-ruled Gaza Strip - but for fuel and other necessities – is futile.

Egyptian president Hosni Mubarak reached his decision after tense crisis talks with US secretary of state Condoleezza Rice and Israeli prime minister Ehud Olmert Wednesday night.

By demolishing the 10-km concrete barrier dividing the Gaza Strip from Egyptian Sinai, Hamas, backed by a Palestinian horde surging across Wednesday, has broken out of the siege and acquired a new stronghold outside Israel’s military reach while their missiles and guns retain access to Israeli targets from the Gaza Strip. US and Israeli intelligence sources report that Hamas laid the ground for its coup well in advance and timed it deliberately for the opening Wednesday of the Palestinian National Congress in Damascus. This event was organized by Tehran and Damascus to counter the US-promoted Annapolis conference and discredit Mahmoud Abbas’ diplomatic track with Israel under the US aegis.

Tehran and Damascus brought to the congress some 900 Palestinian delegates of 17 radical Palestinian opposition groups and 300 “special guests” from across the Arab world. It was opened by hard-line Hamas leader Khaled Meshaal with a speech which glorified his Gazan brothers’ feat in breaking down the Gaza-Egyptian border as the greatest Palestinian achievement for years.

He declared that an “end to the occupation” in all parts of Palestine must take precedence over Palestinian statehood – a direct challenge to the Bush administration’s two-state thesis.

Rice and David Welch, assistant secretary of state for the Middle East, made a point of warning Mubarak that he must act expeditiously to restore border security because the entire Washington Palestinian strategy hinging on Abbas and the Annapolis declarations hangs in the balance.

But the Egyptian president replied that his main worry is not the Palestinian issue but concern that his own opposition, led by the Muslim Brotherhood, may adopt Hamas tactics and stir up trouble in his cities. Mubarak said he would leave the situation in northern Sinai as it is for the time being. In other words, his troops would not force the hundreds of thousands of Palestinians who swarmed out of Gaza to return home.

Such an effort would be a tall order, anyway. According to information reaching Cairo, Hamas has instructed large numbers of Palestinians who fled Gaza to stay where they are. Their assignment is to create a bridge between Gaza and the 40,000 Palestinians living in North Sinai. This population ballooned fivefold on Jan. 23 in the space of a few hours.

Furthermore, the Palestinian department of Egypt’s security services is on high alert after learning that the 130,000 Palestinians living in communities in Cairo, Alexandria and the Suez Canal cities are preparing to help their Gazan brothers steal into Egypt.

4) ANALYSIS: Gaza border breach shows Israel that Hamas is in charge
By Avi Issacharoff and Amos Harel

A few Israel Defense Forces Engineering Corps officers surely shed a tear yesterday while viewing the television reports from Rafah: The barrier built by the IDF with blood and sweat along the Philadelphi Route, on the Gaza Strip border with Egypt, was coming down.

It was, apparently, the final remnant of Israel's years of occupying the Strip. But Israel has better reasons to be worried by what happened yesterday. In destroying the wall separating the Palestinian and Egyptian sides of Rafah, Hamas chalked up a real coup. Not only did the organization demonstrate once again that it is a disciplined, determined entity, and an opponent that is exponentially more sophisticated than the Palestine Liberation Organization. It also took the sting out of the economic blockade plan devised by Israel's military establishment, an idea whose effectiveness was doubtful from the beginning but whose potential for international damage was not.

Israel, Egypt and the Palestinian Authority are now forced to find a new joint border control arrangement, one that will probably depend on the good graces of Hamas. If the PA is indeed interested in taking responsibility for the border crossings, as Prime Minister Salam Fayyad has declared, it will have to negotiate with Hamas even though President Mahmoud Abbas is trying to avoid that at any cost. The other option - to leave the border untended - is even worse.

The Hamas action yesterday was anything but spontaneous. It was another stage in the campaign that began in Gaza's night of darkness on Sunday. As Gaza was plunged into widely televised blackness, Palestinian children armed with candles were brought out on a protest march and organized into prime-time demonstrations in support of the Egyptian and Jordanian branches of the Muslim Brotherhood.

On Tuesday, Hamas put together a violent demonstration that ended in a confrontation with Egyptian police officers at the border, and, as usual, broadcast live on Al-Jazeera. Apparently it was enough to make Egypt lose its appetite for confrontation.

Yesterday, tens of thousands of people burst through to the west. President Hosni Mubarak explained that he instructed his police officers not to block the hungry on their way to grocery stores in El-Arish and the Egyptian side of Rafah.

Mubarak also had to contend with domestic politics. The violent suppression of the Palestinian masses would have turned up the tension between him and the Muslim Brotherhood, or Al-Jazeera. More than a few Arab commentators now see the Qatar-based satellite channel as the superpower of the Arab world. In many cases its broadcasts clearly promote an Islamic agenda.

Explosions were set at 20 points along the border fence, clear evidence of a campaign that was planned and coordinated well in advance. Israeli intelligence officials will have to explain, to themselves and the country's leaders, whether and how the preparations took place without their knowledge - another Gaza goof, in the wake of the Hamas election victory in January 2006 and the rapid military drubbing it gave Fatah in the Strip last June.

Most of the Gazans who crossed into Egypt are expected to return home within a few days, after stocking up on staples and meeting with relatives they have not seen for years. Meanwhile, Egyptian security forces set up dozens of checkpoints to prevent the Gazans from spreading into other areas of Sinai.

5) Sowing war

Here's how UN Under-Secretary-General for Political Affairs B. Lynn Pascoe described the situation to the Security Council on Tuesday, as summarized on the UN Web site:

"The crisis in the Gaza Strip and southern Israel had escalated dramatically since 15 January, due to daily rocket and mortar attacks on Israeli civilian residential areas by several militant groups from Gaza, and regular military attacks by the IDF on and into Gaza. There were also tight Israeli restrictions on crossings into Gaza to end rocket fire. IDF entered the Gaza Strip on 15 January and had been engaged in heavy battle by Hamas militants, including IDF air and tank operations. Hamas claimed responsibility for sniper and rocket attacks against Israel. Since then, more than 150 rocket and mortar attacks had been launched at Israel by militants, injuring 11 Israelis, and a sniper attack killed an Ecuadorian national on a kibbutz. Forty-two Palestinians had been killed and 117 injured by the IDF, which had launched eight ground incursions, 15 air strikes and 10 missiles this past week. Several Palestinian civilians had been killed in ground battles between IDF and militants, and in Israeli air strikes and targeted killing operations."

In other words, when the Security Council met to consider the situation in Gaza, it had the basic facts. Each country's representative knew a) Israel was responding to "daily rocket and mortar attacks on civilian residential areas," and b) Hamas "claimed responsibility" for at least some of these attacks, and must be held responsible for the rest. Furthermore, every ambassador representing a non-Muslim state had a similar reaction to that of the British ambassador, who said he "shared Israel's frustration and anger at continued rocket attacks and mortars... Israel had the right to defend itself."

Yet these same ambassadors joined their colleagues from Muslim states in condemning Israel for employing "collective punishment" against Palestinians in Gaza.

Much of this condemnation was based on a lie propagated by Hamas and repeated at the UN. The South African ambassador claimed, for example, "1.5 million people had been left without water, electricity and basic sewage" in Gaza. In fact, the supply of electricity to Gaza from the Israeli and Egyptian power grids (124 megawatts and 17 megawatts, respectively) has continued uninterrupted. This supply represents about 75 percent of Gaza's electricity needs. The remaining 25% is from a power plant in Gaza that is run by fuel supplied by Israel. Since only some of Gaza's fuel supply was cut by Israel, Hamas could have kept running that plant as well, but chose to shut it down as a propaganda stunt.

But the more fundamental problem is that the Security Council chose to meet not on January 15, in response to the major barrage of rockets attacks against Israeli civilians, but on January 22, in response to Hamas's staging of a "humanitarian crisis." The backwards sequencing of the international response serves to vitiate the supposedly balanced statements of the Western ambassadors. Hamas doesn't care about being condemned along with Israel, because it knows these condemnations are lip service. The timing says it all.

It is telling that the one country that could have prevented this "cycle of violence" - that is both Hamas's aggression and Israel's measures to defend itself - was not mentioned in the debate. That country was Egypt, which even had the temerity to join the chorus against what it called Israel's "brutal punitive measures."

The moment Hamas took over Gaza in June, Egypt could have tightly controlled its border and prevented tons of weaponry, including sophisticated rockets, from entering the Strip. It could have closed the revolving door for terrorists leaving for training and returning to join Hamas's increasingly dangerous army. It did not.

Now, as a result of its propaganda victory, Hamas has allowed itself to blow up the Egyptian border fence, while Egypt ignores its signed deals with Israel and does nothing to close or even monitor the border. Among the ordinary Palestinians streaming through to buy cheaper goods on the Egyptian side, we can be sure Hamas is bringing in more weapons, money and terrorists. By playing into Hamas's hands, failing to punish aggression, and refusing to hold Egypt responsible for stopping the weapons buildup, the UN is sowing the seeds of the next war and strengthening the forces it claims to wish to isolate. And it is doing this in the name of peace and humanitarian law - while producing the exact opposite.

6) Slick Willie Rides Again
By William Greider

The Clintons play dirty when they feel threatened. But we knew that, didn't we?

The recent roughing-up of Barack Obama was in the trademark style of the Clinton years in the White House. High-minded and self-important on the surface, smarmly duplicitous underneath, meanwhile jabbing hard to the groin area. They are a slippery pair and come as a package. The nation is at fair risk of getting them back in the White House for four more years. The thought makes me queasy.

The problem is not Hillary Clinton per se or the sharp exchanges and personal accusations that squeamish political reporters deplore. That's what politics is always about. Tough, even nasty conflict is educational, also entertaining. Politics ain't beanbag, as Mark Shields likes to say.

The one-two style of Clintons, however, is as informative as low-life street fighters. Mr. Bill punches Obama in the kidney and from the rear. When Obama whirls around to strike back, there stands Mrs. Clinton, looking like a prim Sunday School teacher and citing goody-goody lessons she learned from her 135 years in government.

I thought Obama did quite well in response, looked strong and stayed in character. But we shall see. He was compelled to play defense and to hope the audience recognized foul play. It's possible the Clintons won on points, simply by making Obama look like a confused young man who had to keep repeating what he had actually said.

The style is very familiar to official Washington, not just among the Clintons' partisan adversaries, but among their supporters. The man lied to his friends. All the time. They got used to it. They came expect it. I observe a good many old hands among the Senate Democrats are getting behind Obama. It would be good to know more about why they declined to make the more obvious choice of endorsing the power couple.

We are sure to see more of Mr. Bill's intrusions because the former president is pathological about preserving his own place in the spotlight. He can't stand it when he is not the story and, one way or another, he will make himself the story. I used to be sympathetic toward Mrs. Clinton on this point. No longer.

She is using her egocentric husband to do the low-road hits for her campaign. He is good at it--a real charmer if you've never seen his act before. Or is Mrs. Clinton's husband using her? People can ask that question without disturbing the principles of feminism.

Evidently, many of the mainstream party faithful want the Clinton team as their presidential nominee. It's their choice, of course. But does the rest of the country really deserve this?

Friday, January 18, 2008

Electile dysfunction!

An intelligence report suggests GW moves closer to Moscow and Putin's view of how to handle Iran and this explains Sate Department Undersecretary Nicholas Burn's departure. (See 1 below.)

Avi Dichter takes strong exception to Olmert's handling of Hamas' missile attacks and argues a new approach must be devised and taken. (See 2 below.)

Bolton, visiting Israel for the IDC Herzliya Conference continue to express his view regarding the NIE Report that it has skewed out ability vis a vis Iran and has politicized intelligence. (See 3 below)

4) Jonathan Tobin believes Olmert could have stood up to GW and all he needed to do, if he wished, was to have GW visit Sderot. Tobin does not know what is in Olmert's mind but believes, based on Olmert's pronouncements, he intends to move forward on a deal with Abbas despite Abbas' ability to actually deliver anything enforceable. (See 4 below.)

Even Israel's top military commander, Gabi Ashkenazi, says the homefront is becoming the battle front, repeats his concerns about a nuclear Iran, which be believes is intolerable, and again stresses lessons learned from Lebanon. He states Israel must remain strong military in the face of its escalating confrontation with strengthened terrorist forces. (See 5 below.)

While I was away several states went through their voting and it reflects continued "up in the air" status on both sides. Hillary can claim victory in Nevada but won by a rather small majority and one can claim the decision of the Culinary Union throwing its weight behind Obama came too late to have much impact. One could also argue that the more Hillary and Bill go through their manipulative and disengenuos attacks on Obama the more they are alienating their party's black constituents.

Edwards was Obama's spoiler and might want to stay in to see can he becomes a king maker.

On the Republican side, McCain may have dealt Huckabee a blow from which Huckabee might not recover but one could also argue Thompson kept Hucakbee from possibly winning but lacks the clout of Edwards and Thompson would do himself and the remaining candidates a favor if he folded his tent.

Florida is obviously crucial for Giuliani as well as McCain and also Romney.

David Frum's new book (I only heard a PBS interview) is a fascinating explanation of where Republicans must journey if they choose to be viable going forward.

We are experiencing, politically speaking, the equivalence of electile dysfunction!


1)Washington lines up with Moscow’s soft diplomacy on Iran, Nicholas Burns drops out

Nicholas Burns’ retirement as US undersecretary for political affairs Friday, Jan. 18, and his replacement by US ambassador to Moscow William Burns, take the Bush administration’s strategy on Iran’s nuclear activities a stage closer to Moscow’s line of soft diplomacy.

State department spokesman Sean McCormack Saturday played down expectations that the six powers meeting in Berlin next Tuesday would produce a consensual UN sanctions resolution. The group - the US, Russia, China, UK, France and Germany - were deadlocked at previous meetings by Moscow and Beijing’s opposition to harsh measures. The change in Washington is indicated by McCormack’s reference to “multilateral diplomacy.”

The outgoing Nicholas Burns, in the No. 3 State Department spot, held the Iran portfolio and led the Bush administration’s drive for tough sanctions at the UN Security Council. (He is the 19th diplomat to quit the State Department in recent weeks). Ambassador Burns (no relation) is closer to the Russian approach.

Moscow sources note that President George W. Bush has in recent months taken strides towards closing the gap with the Kremlin on Iran.

President Valdimir Putin’s standard line - I have no information that Iran is developing nuclear arms – was corroborated by the US National Intelligence Estimate’s conclusion in December that Tehran had shelved its military program in 2003.

Circles close to Putin maintain that the two presidents began working together quietly in October 2007, on the shared understanding that affirmative tactics were preferable to tough penalties for weaning Tehran away from uranium enrichment, even temporarily. Therefore, after long opposition, Bush surprisingly came out in favor of Moscow’s decision to consign uranium fuel rods for Iran’s atomic reactor in Bushehr.

Sources in the Persian Gulf and Vienna disclose, moreover, that the US president also lined up with Saudi King Abdullah on a decision to relegate the handling of Iran’s nuclear issues to the UN nuclear watchdog’s director Mohammed ElBaradei.

ElBaradei was therefore accorded the unusual honor of an audience with Iran’s supreme ruler Ayatollah Ali Khamenei when he visited Tehran on Jan. 12. He was told he could expect full cooperation from the Iranian government and promised answers to his questions on the tough questions of the uranium enrichment process and plutonium production.

The US and Russian governments both believe that an important breakthrough has been achieved and a way forward for further diplomatic engagement on the hitherto intractable Iranian nuclear program.

The United States has therefore turned away from confrontation with Iran and consigned its clandestine nuclear projects to the routine diplomatic track.

This course is diametrically opposed to the policy pursued by Nicholas Burns in recent years. His resignation was therefore logical.

2)Minister raps "inadequate" Israeli army action in Gaza, jabs prime minister Olmert

Internal security minister Avi Dichter warned the Israeli cabinet meeting in Jerusalem Sunday, Jan. 20, that without a new kind of military deterrence to halt the Palestinian missile offensive from Gaza, Sderot would break down. He asked why the chief of staff was absent from the session.

The minister, a former Shin Bet director, took sharp issue with prime minister Ehud Olmert, who he said he was encouraged by finding less complaints and more appreciation for the IDF when he visited Sderot last Thursday.

Dichter went on to blast the defense minister and chief of staff: “Current tactics in Gaza are making no difference at all,” he said. Gazan [Russian] roulette against civilians is no basis for strategy. The people living within range of Gaza have lost hope in the face of a “thick-skinned government.”

There has to be a different kind of deterrence to stop the missiles, mortars and snipers coming at the rate of dozens a day, said the internal security minister. “And if there is no choice, let the Gazans pay the price and let there be ghost towns there, not here.”

3)The 2007 US National Intelligence Estimate, as well as the skewed reporting around it, is a sign of the "illegitimate politicization" of the American intelligence establishment, according to former US ambassador to the United Nations John Bolton.

The document reportedly said Iran stopped its nuclear weapons production program in 2003.

While "Iran's nuclear program is continuing and expanding," Bolton told The Jerusalem Post at a book-signing in a Tel Aviv Steimatzky on Sunday, "the NIE has had a devastating impact on our global efforts to try and constrain Iran."

"I know the people who wrote this intelligence estimate," Bolton continued. "They are not from our intelligence community. They're from our State Department. It was a highly politicized document written by people who had a very clear policy objective."

The former ambassador decried the lack of separation between "intelligence and policy."

"Generating intelligence should be separated from policy-makers, but it should also be separated from intelligence analysts who impose their own policy views on the intelligence they generate," insisted Bolton, who is in the country to attend the Herzliya Conference this week.

Furthermore, said Bolton, the NIE "doesn't say what you probably think it says. Once you get past the first sentence or two, it doesn't come out that different from the 2005 NIE. All of the attention was focused on the one finding that [Iran halted the weapons-building] aspect of the weapons program, even though later they say that they only have 'moderate confidence' that this suspension has continued. That's a polite way of saying they don't have a clue what the situation is."

The document also defines the weapons program as "actual weaponization, that is, fabrication - only a tiny sliver of the total activity required for a country to have a nuclear weapons program. It still remains entirely within Iran's discretion when and under what circumstances it proceeds to a nuclear weapons capability."

The release of such a politicized report by those responsible for American intelligence analysis was possible, Bolton believes, because "there is still no effective supervision over the intelligence community. It's been a problem for a long time. The [newly-established] director of national intelligence position didn't solve it. So it remains and will be a significant challenge for the next president to get under control."

Bolton calls the NIE "a quasi-coup by the intelligence services," which was "intended to have a political and policy effect. I think that's illegitimate [for] the bureaucracy [to have done]. In our system, constitutional legitimacy flows from the president, who was elected, through his officials. It's not like a European system, where the foreign policy establishment really does develop foreign policy. Too much policy is developed by the bureaucracy independent of political control. It's a longstanding cultural problem, and it will take a long time to fix it."

4)) Olmert Can Always Say ‘No’
By Jonathan Tobin

Bush and Rice are deluded, but the decision to push ahead on talks remains Israel's

If you believe the opinion polls — and there's no reason not to — George W. Bush doesn't have many fans. And last week, the dwindling number of Bush loyalists got a bit smaller.

For the majority of American Jews who are Democrats, nothing — not even Bush's first visit as president to Israel — was bound to win him much applause.

Despite the opposition to the Iraq war and bitterness that dates back to the 2000 election, the president has still been able to fall back on his reputation as the best friend Israel has had in the White House, a tag that was earned via steadfast support for the Jewish State during the worst of the second intifada and the 2005 fight against Hezbollah along the country's northern border.

But the Bush trip to Jerusalem last week did not result in general hosannas from the pro-Israel community. Indeed, for many of his most steadfast backers in this sector, the rhetoric coming out of the presidential party was nothing short of a disaster.


The decision to press ahead with Israel-Palestinian peace talks after the Annapolis summit is exactly what Bush's opponents on the left have chided him for not doing the first seven years of his presidency. They have wanted him to embrace the peace process that former Bill Clinton embraced in his presidency and even blamed Bush for the absence of peace, even though the Palestinians are the ones to blame for choosing terror over peace.

Bush changed the course chosen by the Clinton administration by refusing to meet with Yasser Arafat. He proclaimed that the Palestinians would have to give up terror in order to get a state, and said that any peace deal would be based on the reality of Israeli settlements and not solely on the pre-1967 borders.

In 2002 and 2004, Bush had appeared to throw away the old rulebook of U.S. Middle East diplomacy, which "realists" who had dominated the State Department in his father's time had always championed. But in 2008, that rulebook, which emphasized pressure on Israel to make concessions in exchange for empty Arab promises, is back in place as Bush and Secretary of State Condoleezza Rice have plunged head first into the diplomatic maelstrom.

Bush made it clear last week that he was prepared to apply "a little pressure" on Israel to get it to agree to a peace deal that few in the country believe is possible. Despite other comments that demonstrated his friendship for Israel, his goal of shepherding a Palestinian state into existence during his presidency seemed to be the priority. He even said that Israel was going to have to discuss the so-called Palestinian "right of return."

All this has left Americans — both Jewish and non-Jewish who liked Bush's former policies — stumped and saddened.

Some blame the influence of his father and elder Bush luminaries like former U.S. Secretary of State James A. Baker. Others point to the need to appease Arab public opinion for the sake of the war in Iraq. Still others point to the increased influence of Rice in the aftermath of Defense Secretary Donald Rumsfeld's departure in 2006.

That may all be true. Yet while both Americans and Israelis have attempted to parse the contradictions in Bush's policies and sought to find their authors inside the administration, the obvious answer to the decision to go ahead is right under their noses. Far from being Bush's helpless victim and subject to the awful "pressure" that Israel has always dreaded, Prime Minister Ehud Olmert is fully behind the current plan.

Olmert has been sending clear signals that he is ready to do a deal with the Palestinians, which replicates the wildly generous terms offered to Arafat by Ehud Barak at Taba. He has told Israelis that the world doesn't accept an undivided Jerusalem, and that they must learn to live with this. And he has made it clear that Palestinian Authority President Mahmoud Abbas is his peace partner, no matter what Fatah terrorists do.

No one but Olmert and his closest advisers know whether he really thinks that Abbas can sign a peace deal that accepts Israel as a Jewish state within any borders — or that he would survive if he did. It may be that domestic political considerations have led them to believe that pursuing a peace process, even a futile one, is his best bet to hang on to office, despite popularity ratings even lower than Bush. But while Bush is the senior partner in this alliance, Olmert is still the one in the driver's seat on this question. Anyone who thinks the prime minister is being dragged kicking and screaming to the table is dead wrong.

All of this leads us to the question that many refuse to contemplate: Could Olmert say "no" to Bush and Rice if he wanted to?

Despite Israel's dependence on the United States for military and diplomatic support, the answer is a resounding "yes."

Even as a lame duck with a secretary of state who is desperate for a diplomatic coup, there's nothing to indicate that Bush would implement this strategy if Olmert said it was dead on arrival.


If Olmert wanted to, he could have said that anyone in the president's delegation who wanted to know why even Israelis who oppose settlements have no intention of handing over more territory to the Palestinians need only take a visit to Sederot.

That Israeli town within the 1949 armistice lines remains under siege as Kassam missiles launched from "Hamasistan" in Gaza — territory Israel left in 2005 — rain down on its people every day. If Israel backs up to the 1967 borders the same scene could be played out in 2009 at Ben-Gurion airport.

Olmert could have stated last week that until incitement against Israel and Jews on Abbas' own P.A.-controlled broadcast media ceased, peace was impossible. Indeed, 15 years of post-Oslo Palestinian autonomy has resulted in a new generation of Palestinians raised on hatred.

In response to suggestions that Israel negotiate about the "right of return," Olmert could have pointed out that several hundred thousand Jews were expelled or forced to flee from Arab countries after 1948, and are just as deserving of recognition and compensation as Arabs who fled Israel.

But for good or for ill, Olmert has done none of this.

The premier would certainly face some heat from Washington if he just said "no." But it's just as certain that if he did that and called on Israel's many friends in both major parties in the United States to back him up, Bush would not have persisted.

Those disillusioned by Bush's flip-flop are right to criticize him. But anyone who thinks that Israel is being forced to go along is focusing on the wrong end of the partnership. What happens in the next year — whether it turns out to be peace, war or the more likely option of a continued stalemate — remains a fate that Israel's democratically elected government is choosing of its own free will.

5) IDF chief: Home front becoming battlefront: Israel's top military man, Gabi Ashkenazi warns home front is becoming part of the battlefront in Herzliya Conference held in Knesset

"In every conflict, the threat on the home front is increasing and it is becoming part of the battlefront. We see this everyday in Gaza Vicinity communities," Ashkenazi said in a speech at the Herzliya Conference, hosted by the Interdisciplinary Center and held at the Knesset.

He added that the IDF operates in Gaza day and night in order to confront this threat.

Ashkenazi that the steadfastness of residents of Sderot and other Gaza Vicinity communities was exemplary.

Ashkenazi also mentioned that a nuclear-armed Iran represented a threat to the Middle East as whole that Israel could not allow.

"The IDF is geared up to deal with the complicated reality of future challenge as well as all essential issues. Among them are learning and implementing lessons learned from the Second Lebanon War: The power of new weapons, readiness to fight, the quality of human resources and taking care of them, the training of the chain of command and more."

Ashkenazi also said that "in order to ensure the existence of the State of Israel as an independent country, democratic and prosperous, we must maintain a strong army that can confront the spectrum of threats."

"We have in front of us a Middle East that is undergoing change. The IDF must be ready for any escalation. The IDF is tasked with dealing with armies, some of which are armed with weapons of mass destruction and terrorist organizations."

The IDF chief stressed that Israeli society must be ready to pay the price for maintaining an army outfitted to meet the threats of tomorrow. In order to do so, he called for the lengthening of national service and for a comprehensive effort to fight the phenomenon of draft-dodging.

President Shimon Peres said in the conference that "all eyes are on the peace process, it is possible that 2008 will be the key year for peace. The destiny of peace is not only thrust upon our opponents but is also for us (to decide). If the ambition for peace unites, the price of peace divides."

Referring to the fighting in the south, the president said that "Gaza is a security problem more than a political one. No one is suggesting that (we) return and settle in Gaza. Logic dictates that we will come to a national agreement on the Gaza issue -- an agreement that will include ways to deal with responding (to attacks from Gaza), fortification, and dealing (Gaza) residents' needs."

Peres called for people to stop being complacent and to have social solidarity. He said that Israel's "social strength is up against some serious tests. First and foremost, a test of the educational (system)…The educational system has been affected by the strike. The government, teachers and employers must meet before additional strikes and come to an agreement over wages for the next five years."

Knesset Speaker Dalia Itzik, said that "the ability to govern in Israel is restricted and we must find ways to enable more stable governing."

She asked people to send blessings to all those operating to defend residents of the western Negev and Sderot whome she described as "those standing under a murderous terrorist attack for seven years. It is the right of residents of the western Negev and Sderot to live in quiet and security and this obligates Israel to let go off the vestiges of its restraint that are left."

Thursday, January 17, 2008

Hate Index and Inflation Index!

Two excellent Op Ed pieces in Thursday's Wall Street Journal.

One, entitled "Liberal Hatemongers" by Arthur Brooks is about a feeling thermometer test which determine people's attitudes and discomfort with others. It so happens that the tested "hate level" of liberals exceeds anything comparable of "conservatives." I find Brook's op ed piece "scientifically" interesting but it told me nothing I did not already feel. Liberals are very prone to attack when you challenge their beliefs and relish employing invective directed at those who think otherwise etc. Employing hate tactics has bored itself into campus life and is widely employed by those in academia.

The second op ed piece entitled: "Inflation and the Tax Man" by Richard Rahn gave a simple explanation of why taxing without indexing is unconstitutional. Now that the Chief Justice is seeking increased compensation Rahn argues, politicians and lawyers might finally understand how capital gains, which reflect inflation, is the equivalent of taking property unlawfully. Rahn's analogy is that the U.S. constitution asserts, with respect to federal judge's pay: "...shall not be diminished during their Continuance in Office."

In accordance with the 5th Amendment, which states: "No person deprived of life, liberty or property without dues process." Rahn argues convincingly inflation is the taking of property (money is defined as property because it is the fruit of one's labor) without Due Process and thus all forms of taxation should be indexed. He ends by suggesting even liberals should understand this.

John Tamny disagrees with David Brooks and writes "Supply Side Economics" has run its course. (See 1 below.)

I will be away over the weekend and thus no memos.


1) Disagreeing with David Brooks on Taxes
By John Tamny

Back in the early ‘70s, a time well known now for confiscatory tax rates and a falling dollar, an economics textbook proclaimed, “The era of the entrepreneur may be over in terms of the individual owner-manager who single-handedly built up a large firm.” A few years later Bill Gates started Microsoft, a garage-entrepreneur venture that now employs 79,000, and which has made Gates the richest man in the world.

The untrue scribblings of textbooks past take on new relevance given the view of Republican-leaning columnist David Brooks that the GOP should shed its modern supply-side roots. In a recent New York Times piece, Brooks opined that, “Supply-side economics has had a good run, but continual tax cuts can no longer be the centerpiece of Republican economic policy.”

Owing to what Brooks considers a changing Republican electorate, policies must shift given his belief that, “The entrepreneur is no longer king.” Instead, with anxiety levels rising among America’s middle class, the “wage-earner” has taken away the king’s crown. The contradictions in this presumed abdication are many.

First off, to whom should workers give thanks for their wages other than to entrepreneurs? Any policy centered on wage earners that doesn’t elevate the entrepreneur is the equivalent of cheering sunlight while ignoring the role of the sun. You can’t have one without the other, and it is entrepreneurs who sense unmet needs in the marketplace, attract the capital necessary to fulfill those needs, and who deploy that capital in myriad ways, including for the purpose of hiring the less entrepreneurially minded among us.

Touched on above is the truth that entrepreneurs can only innovate and hire if capital is plentiful. And as very few prominent businesses today can attribute their success to the Small Business Administration, entrepreneurs find themselves reliant on individuals willing to forego current consumption in favor of the often distant object of investment success. Of course, the amount of investment capital made available for job-creating businesses is directly correlated with how much or how little governments take from the current and future earnings of individuals. In short, without free capital there are no wages to begin with, so for Brooks to go wobbly on cutting tax rates is for him to implicitly suggest that wages should fall altogether.

Brooks might argue that Republican policy should be concentrated on the large and established wage-paying businesses in the U.S. versus the various small firms that dot the landscape, but that’s a distinction without much of a difference. All businesses, from old-guard institutions such as Ford Motor Co. and the New York Times Co. to modern capitalist marvels such as Amazon and Google, were once entrepreneurial ventures that started out small.

To the extent that there’s a difference, it reveals itself in the multiples investors will pay for the earnings of the old versus the new. It is there that we see what investors truly value, and the simple fact that they value the future earnings of Google far more than they do those of Ford speaks volumes to the staggering importance of entrepreneurs to our economy. Successful entrepreneurs attract capital, and the latter funds jobs.

For evidence of what economies look like when they’re entrepreneur-deficient, we need only look to Michigan, where the Republicans held a primary just this week. The state’s dismal outlook speaks to the folly of de-emphasizing the entrepreneur to the alleged benefit of the wage-earner. Politicians in Michigan have been doing this for decades; vainly attempting to save the jobs provided by sclerotic, old-economy automobile behemoths of yesteryear, all the while keeping taxes so high that entrepreneurs with new ideas have taken their skills elsewhere. At present the state has the nation’s highest rate of unemployment to show for all of its efforts. It says here politicians of either party won’t be talking economic “Marshall Plans” when their campaigns take them to entrepreneurial hotbeds Palo Alto, Cambridge and Austin.

Ideology aside, Brooks reasons that tax cuts must be shelved in order to pay for unfunded promises made to an “aging society,” not to mention the costly nature of new campaign promises made by allegedly enlightened Republicans which include wage subsidization, birth savings accounts, federal 401(k)s, and “personal re-employment accounts.” If we ignore for now how far afield some Republicans have strayed from the Party’s ideological moorings, it should at least be remembered that as federal revenues have pretty consistently amounted to 18 percent of GDP irrespective of the tax rate, the policy answer for newly generous Republicans should not be one of shunning tax cuts.

Instead, with Republicans apparently planning to shower all manner of new entitlements on their voters, the importance of the entrepreneur and tax cuts becomes even greater. Somehow these programs will have to be paid for, and as successful entrepreneurs by definition create wealth and high-paying jobs, the U.S. will need a flush tax base to fulfill the promises made by its politicians.

Brooks thinks differently, and applauds the Republicans who “are shifting focus right now” from a tax-cutting, entrepreneur-focused ethos that as recently as 2006 had the Party in control of all three branches of the federal government. Perhaps channeling this new focus yesterday, President Bush signaled his willingness to put off extension of his 2003 tax cuts in return for quick passage of an economic "stimulus" bill that promises not to stimulate. The Dow Jones Industrial Average quickly fell 300 points. The market's mood suggests investors are far less sanguine than Brooks about the new path taken by certain Republicans.

Wednesday, January 16, 2008

No inflation if you do not eat or drive!

If you do not eat or drive a car you should not worry about increased inflation. However, if you are unfortunate enough to go hungry during the day and need to get to work by car, or even public transportation. you no doubt will soon be paying more for these necessary indulgences.

If you are retired and need to go the the doctor or even the hospital maybe you can get a friend to take you and reduce the impact on your fixed income by off loading the inflationary cost of these irritating budget items. Of course you might alienate what friends you have or you may start by not not having enough.

The government does not include food and energy in the inflation index because these items jump around but history shows they generally move in an upward path and now that Congress has discovered ethanol, as the partial solution to our energy problems,they have become linked. Ethanol production costs reflect themselves in higher corn prices and thus some food staples making the "Jolly Green Giant" sad.

Politicians love avoiding pain and do everything in their power to ignore it. But, pain has a way of finding its way around politicians and hitting constituents in their pocket books whether essentials are indexed or not.

So to assure concerned voters that all is well, some politicians are now devising the next best thing. Spend tax dollars by giving tax payers a rebate. This is a novel way of laundering that only those in Disney East would think of proposing. Since we are in an election year I suspect we will soon witness a bidding contest between certain candidates seeking to top the other's rebate proposals.

Let's face it, the dollar will soon cost more to print than it is worth. This is already true of pennies. The only value of a Roman coin is in its antiquity. Our currency is now backed by our own promise to pay. Nixon,I believe, de-linked our currency with gold which has exploded in value.

Good luck to those foreign suckers who hold our debt!

Lawrence Lindsey wrote an op ed piece in today's Wall Street Journal entitled" The State of The Stimulus Debate." He pointed out the absurdity of Sen. Clinton's recent inane proposals. Lindsey called for something very logical - fundamental tax reform. Good luck Mr. Lindsey. You have asked Congress to gore their pet oxen!

Olmert's government is shaken by Lieberman walkout threat and Isi Leibler speaks out! What Leibler writes could just as easily apply to our own nation's void in leadership (See 1 and 2 below.)

Meanwhile rockets continue to fall on Sderot and an Israeli woman was killed by an automobile while fleeing one of the rockets. (See 3 below.)

Mubarak tells GW the Palestinian-Israeli problem is the underlying cause of all the problems in the Middle East. All terrorists will lay down their weapons if Israel will just give in to whatever the Palestinians want. For this sage advice Bush should fork over a few more billion in aid. Bush praises Mubarak for his help and does not bring up the matter of weapons smuggling.(See 4 and 5 below.)

Another opinion by Eitan Haber on Lieberman's threat. (See 6 below.)


1) Crack in Olmert government coalition with Israel Beitenu walkout and its call for elections

Party leader Avigdor Lieberman announced Wednesday, Jan. 16, his faction was making good on its promise to quit his government post as strategic affairs minister if talks on “core issues” of the conflict were launched with Palestinian leaders.

He argued that Israel’s conflict with the Arabs was never territorial, rejected the “land for peace” convention as a trap, and urged the adoption instead of the principle of territorial exchange. Lieberman called for an early general election.

Olmert responded that the talks which foreign minister Tzipi Livni and former Palestinian prime minister Ahmed Qureia began on core issues, Monday, Jan. 14, would continue.

Another coalition partner, the ultra-religious Shas, has not indicated whether it will hold to its commitment to exit the government if Jerusalem’s re-division was put on the table.

The departure of Israel Beitenu’s 11 Knesset members cuts the Olmert government’s majority in the 120-strong Knesset to seven. Without Shas’ 12 members, the government would hold only 55. Even if the prime minister can make up some of the missing numbers with the left-wing Meretz (4) and Torah Front (6), his government’s survival would still hang on support from the 10 members of the Arab factions. Olmert might have also to contend with potential defectors from his own Kadima party (29).

In exactly two weeks, Olmert faces the final report drawn up by the Winograd commission on his government’s mismanagement of the 2006 Lebanon War. Justice Eliahu Winograd has advised that his final document will not name names. But after lambasting government leaders in its interim report, the panel is unlikely to deal kindly with any part of the government and military which conducted the war.

Before he took up the defense portfolio, Labor leader Ehud Barak vowed to quit the government if this report were negative. His party of 19 lawmakers is divided over its withdrawal, which would bring the government down and force an early election.

2) A nation that is in search of leadership
By Isi Leibler

With the impending release of the Winograd Report, most Israelis will be mulling over the future of their current leadership. Those old enough will recollect with nostalgia the extraordinary quality of the Israelis who led the country from its inception to the assassination of Yitzhak Rabin in 1995.

Some will be asking themselves why, in recent years, Israel has been afflicted with such a disastrous crop of unsuccessful and failed politicians who to this day remain unwilling to accept accountability for their failures. Indeed, Prime Minister Ehud Olmert has brazenly announced that he has no intention of resigning regardless of what Winograd says.

In the past, outstanding leaders who affected the course of history - for better or for worse - were usually men consumed by a vision or a cause. They held views that were often initially unacceptable to the public and obliged to undergo periods as lonely outsiders. Often enough, prior to obtaining popular support, they were marginalized, dismissed as wild visionaries and sometimes even condemned as dangerous extremists.

Take, for example, Winston Churchill. It was only well after Munich, when Neville Chamberlain's policies of appeasement had become utterly discredited, that Britons ceased branding Churchill an irresponsible warmonger.

THE SAME applied to the early Zionist leaders and the founding fathers of Israel.

Theodor Herzl was regarded by most Western and educated Jews as an eccentric, promoting utterly unfeasible Utopian ideas. Even within the Zionist movement itself, David Ben-Gurion faced enormous opposition as he battled unflinchingly for Jewish independence, emerging as the dominant leader only in the wake of the Holocaust.

That also applied to those who succeeded him. The most extreme example was Menachem Begin. Seven times he lost elections and for almost 30 years was all but ostracized, shamefully vilified, and even condemned as a fascist until his extraordinary electoral victory in 1977. Today he is recognized as one of our greatest national leaders.

What did these people of varying political persuasions share? They all had visions and strategies in which they genuinely believed and were convinced would best serve the interests of the nation. They stood their ground and refused to be dissuaded even when public opinion was opposed to their ideas. Rarely did they allow a personal agenda to intrude or influence the formulation of policy.

In many cases, when they recognized that they had reached an impasse and could no longer pursue their objectives, or concluded that they had failed, they voluntarily resigned. That applied to Ben-Gurion, Golda Meir and Begin.

IN OTHER words, until recently, the underlying motivation of most Israeli leaders of all hues was an unhesitating willingness to prioritize the interests of the nation above any personal agenda. Of course, they made mistakes and were at times utterly misguided. But neither public opinion nor a lust to cling to power could conceivably have led them to subordinating what they perceived to be the best interests of the people.

That was as true of Rabin as it was of others. In the course of time, even after Shimon Peres and Yossi Beilin had dragged him against his will into endorsing the Oslo debacle, he convinced himself that in order to forestall the impending nuclearization of Iraq and Iran, the national interest required that he make peace with Israel's immediate neighbors even if it entailed a gamble. That the gamble subsequently proved to be a disaster does not detract from the sincerity of his objective. Despite his failures, nobody could conclude that Rabin's failures stemmed from a crass desire to gain popular support or retain power.

IT WAS DURING the leadership of Ehud Barak that the strategic long-term interests of the nation became relegated to a secondary position and were subordinated to a personal agenda. Barak's policy zig-zags reached their climax toward the end of his term, by which time he was already making statements in the afternoon which contradicted those he had expressed in the morning. His policies were increasingly determined not by what he perceived to be in the public interest, but by public opinion. From that point, polls, not principles, determined the national interest.

Ariel Sharon refined this approach into an art form, utilizing the services of pollsters and PR spin doctors as never before. All this has now reached its most cynical climax under Olmert, whose entire agenda gives the appearance of being dominated by his all-too-transparent overriding obsession to remain in office. To promote this, he has been tailoring his policies to blend in with vox populi as reflected in opinion polls. Yet even this has failed to enhance his ratings.

Olmert has also used the Prime Minister's Office and encouraged associates such as Haim Ramon to test the waters on every major issue in order to gauge public opinion before introducing new policies. When there was a strong negative response from the public (as when Ramon suggested handing over jurisdiction of the Temple Mount to the Palestinians), Olmert simply backed down.

Needless to say, it is entirely legitimate and even obligatory for politicians to utilize opinion polls to ascertain the mood of the nation.

But over the past few years this has gotten out of control. Today Israel has become a haven for pollsters and spin merchants. In fact, it is fair to state that today most potentially contentious policies are not being determined on what is considered to be the national interest. They are resolved only after being superficially approved by the fickle public via the medium of telephone opinion polls.

The same also applies to most political parties, with the possible exception of the ideologically motivated religious, hard-Left and ultra-Right.

THUS, TODAY, a large proportion of the political establishment also formulates its policy primarily on the basis of the number of votes it estimates will be gained: National mood as manipulated by spin doctors and not national interest has become the order of the day. We have become like a ship without a rudder.

Today, Olmert's failure as a leader has become transparent. But there is a danger that without renewed recognition of the role that responsible leaders must assume, the underlying problems of leadership could become institutionalized even after he retires.

What is needed? First and foremost, genuine leaders as opposed to self-gratifying politicians. Leaders who will determine policies and respond to challenges on the basis of only one criterion - and it isn't how many votes such policies will generate, or whether "the street" approves of them. Long-term strategies must be based exclusively on national interests, even if that requires campaigning to persuade the nation to consider its collective destiny rather than personal or sectional aggrandizement.

3) An Israeli woman fleeing from a Palestinian missile blast in Sderot was run over by a car and seriously injured. It was the 43st of 50 missiles fired from Gaza Wednesday

The 44nd smashed into a Sderot home. Most were aimed at this battered town and Ashkelon to the north. Two exploded in villages of the Eshkol region.

Thirty were fired in a single hour from 8:00 to 9:00 a.m., injuring another two people in Sderot. One exploded in Kibbutz Nir Am.

Tuesday a kibbutz volunteer, Carlos Chavez, 20 from Ecuador, was killed and four Sderot residents injured, including two children. The day saw 41 missiles, a Katyusha rocket exploding in southern Ashkelon, heavy machine fire against the homes of Kibbutz Alumim and 16 mortar rounds, many falling at Netiv Ha’asara.

In Sderot, more families are getting packed to flee their small beleaguered town, as emergency medical services sustain top-level alert for further assaults on Israeli targets within a wide radius from Gaza.

Israeli counter-terror operations in Gaza Tuesday left up to 20 armed Palestinians dead, and more than 40 injured.

Seventeen months after a month-long Hizballah rocket bombardment of northern Israel, the Israeli military and air force are again frustrated in their efforts to staunch the Palestinian cross-border missile assault on southwest Israel. Their operations lead only to intensified bombardment. High casualties do not deter Hamas and its jihadist partners.

For this reason, many of the IDF field officers commanding Gaza operations complain that as long as their sorties are confined to the fringes of the Palestinian bastions in the refugee camps and mortar positions, the Hamas' missile-launching capabilities will not be seriously affected.

For now, Israeli policy-makers are using the thunder of battle to create an optical illusion of progress towards this objective when, in fact, very little is achieved.

As soon as the troops pull back to the Israeli side, the Palestinians go back to their former forward positions and let loose with rockets, mortars, heavy machine guns and explosive devices, and the missiles, which are fabricated and cached in safety inside the camps. All Israeli troops are allowed at the moment is to keep control of the border fence under constant Palestinian pressure to breach it.

4) Mubarak to Bush: Palestinian issue is core of Mideast conflict

The Palestinian question is the core of conflict in the Middle East and Egypt very much hopes for a peace deal by January 2009, Egyptian President Hosni Mubarak said on Wednesday during talks with U.S. President George W. Bush in Sharm el-Sheikh.

Mubarak told reporters he updated Bush on Egypt's position that "the Palestinian question, of course, is the core of problems and conflict in the Middle East, and it is the entry to contain the crisis and tension in the region, and the best means to face what's going on in the world, and our region - I mean by that, the escalation of violence, extremism and terrorism."

"I emphasized through our presentations the Egyptian situation, underscoring and supporting peace, and our aspirations that Mr. Bush follows up on negotiations between both Israeli and Palestinian sides, and also said that I wish to reach a peace agreement before the end of his term."

During their talks, Bush prodded Mubarak to cede more freedom and applauded the work of journalists, bloggers and judges seeking independence from interference.

On the final stop of a long Middle East tour, Bush said that such civil society voices had taken the lead in promoting freedom in the Arab world's most populous country.

"Progress toward greater political openness is being led by the Egyptians themselves, by pioneering journalists ... bloggers or judges insisting on independence," he said in a statement at an appearance alongside Egyptian President Hosni Mubarak.

"You (Egyptians) have taken steps towards ... democratic reform, and my hope is that the Egyptian government will build on these important steps and give the people of this proud nation a greater voice in your future," he added.

Bush's remarks evoked his administration's vigorous campaign in 2005 to bring about political change in Egypt, where Mubarak has been in power for 26 years and where his son Gamal is widely expected to succeed him.

That campaign helped persuade Mubarak to allow the country's first multi-candidate presidential elections in 2005, which he won. His main opponent in that race, liberal Ayman Nour, was later jailed on what he says are fabricated fraud charges.

In parliamentary elections the same year the opposition Muslim Brotherhood won one fifth of the seats in parliament. Analysts said that after the strong Islamist showing, Washington stopped pressing Mubarak so hard on democracy.

Bush did not mention the subsequent crackdown on the Muslim Brotherhood, which has had up to several hundred members at a time in detention without charge or trial.

The crackdown also put an end to a campaign by judges for more independence from the executive. Some of them had spoken out against abuses and irregularities in the elections, which they had a constitutional duty to supervise.

The authorities have also targeted journalists, at least 11 of whom have been sentenced to jail terms since last September in connection with their writings. None of them are yet in jail because their cases have gone to appeal.

The police have harassed several Egyptian bloggers, human rights groups say. One of them, Abdel Karim Suleiman, is serving a four-year jail term for insulting Mubarak and making blasphemous comments.

Bush's stop in Egypt was one of the shortest of his tour, at less than three hours, and many Egyptians said the brevity reflected a decline in U.S. interest in Egypt.

5) President Bush Meets with President Hosni Mubarak of Egypt "I really appreciate Egypt's support in the war on terror" [smuggling not mentioned]
From Office of the Press Secretary

PRESIDENT MUBARAK: (As translated.) I'd like to welcome President Bush here
in Egypt, and particularly in Sharm el Sheikh City. It is the City of Peace.

We briefed Mr. Bush -- he briefed us on the outcome of his visits in the
region, and we had very important presentations which dealt with the
security situation now, and bilateral and mutual efforts for the sake of
peace, security and stability in the Middle East.

I emphasized through our presentations the Egyptian situation, underscoring
and supporting peace, and our aspirations that Mr. Bush follows up on
negotiations between both Israeli and Palestinian sides, and also said that
I wish to reach a peace agreement before the end of his term. I emphasized
that the Palestinian question, of course, is the core of problems and
conflict in the Middle East, and it is the entry to contain the crisis and
tension in the region, and the best means to face what's going on in the
world, and our region -- I mean by that, the escalation of violence,
extremism and terrorism.

I also underscored the strategic importance we focus on here in Egypt, that
because its peoples -- sisterly peoples and states, they are part and parcel
of the national security of Egypt, the security of the Middle East and the
world. The Egyptian-American relations actually have been very important,
and this importance has been getting more important. And this importance
addressed the interests of both the people and also the region's interests
in the Middle East.

Our consultations today showed that we believe and understand the mutual
interests of both sides in continuing our dialogue and consultations -- and
I mean by that, strategic consultations -- for the sake of peace, security
and stability of the Middle East, and the development of its states and
prosperity of its people. I also emphasized that we in Egypt, we are keen on
supporting peace efforts that we're ready, hand-in-hand with the United
States of America and the Quartet, and all other regional and international
stakeholders of parties, for the sake of comprehensive and just peace, to
put an end to this Israeli-Palestinian conflict, and finally, to open new
horizons for the Middle East, for a more peaceful and security future --
more justice and security in the region.
I reiterate our welcome words for Mr. Bush, and I hope that his efforts in
the sake of peace will reach a success. And I'll give you the floor, sir.

PRESIDENT BUSH: Mr. President, thank you, sir. It's a pleasure to be back in
Egypt. This is such a beautiful sight, Mr. President. Thank you for hosting
my visit here. As you mentioned, I've been on a long trip and I can't think
of a better place to end it than right here with you in this beautiful

PRESIDENT MUBARAK: You need much more days.

PRESIDENT BUSH: Yes -- he wants me back -- okay. (Laughter.) He's extended
an invitation, and thank you for that, sir.

It's an important stop for me because the United States has a longstanding
friendship with Egypt. It's important for the people of Egypt to understand
our nation respects you, respects your history, respects your traditions and
respects your culture. Our friendship is strong. It's a cornerstone of --
one of the main cornerstones of our policy in this region, and it's based on
our shared commitment to peace, security and prosperity.

I appreciate the opportunity, Mr. President, to give you an update on my
trip. And I appreciate the advice you've given me. You've seen a lot in your
years as President; you've got a great deal of experience, and I appreciate
you feeling comfortable in sharing that experience once again with me.

I really appreciate Egypt's support in the war on terror. I appreciate the
fact that you've given peacekeepers for Sudan. I did brief you on my talks
in Israel and with the Palestinians, and they were positive talks. And I
said I'm optimistic an agreement can be reached. And the reason I am is
because I believe the leadership in Israel and the leadership of the
Palestinians is committed to a two-state solution. And I know nations in the
neighborhood are willing to help, particularly yourself. And I appreciate
your strong, constructive support for the process.

And I told the President I'm going to stay -- there's a wonder whether or
not the American President, when he says something, whether he actually
means it. When I say I'm coming back to stay engaged, I mean it. And when I
say I'm optimistic we can get a deal done, I mean what I'm saying. And so I
appreciate the chance to talk.

We also talked about Lebanon, and we agree it's important for nations in
this region to support Prime Minister Siniora. It's important to encourage
the holding of immediate and unconditional presidential elections according
to the Lebanese constitution, and to make it clear to Syria, Iran and their
allies they must end their interference and efforts to undermine the

We talked -- and by the way, when it came to the Israeli-Palestinian peace
talks, I want to thank you for your support of Annapolis. It was important
that you were there. As a matter of fact, you didn't hesitate, because you
knew that both those parties had to have supportive people in the region.
And I thank you very much for that.

We spent time on Iraq. The President asked me how I thought things were
going there. The decision to send more troops is working. Violence is down.
Secretary Rice came back from Iraq yesterday and briefed me that she was
able to see life returning back to the streets. The moms are out with their
children, normal life is coming back. And political life is moving.

Mr. President, I'm sure you followed the fact that the Council of
Representatives passed the deBaathification law as part of an important
reconciliation package. The government isn't perfect, but nevertheless
progress is being made, and I assured you, Mr. President -- I want to share
this with the press corps -- that the United States will continue to help
the Iraqi people secure their democracy.

I also talked about Egypt's role in the world. Egypt is an important
nation -- that sends a clear signal. People watch Egypt. I appreciate very
much the long and proud tradition that you've had for a vibrant civil
society. I appreciate the fact that women play an important role in your
society, Mr. President. I do so because not only I'm a proud father of two
young professional women, I also know how important it is for any vibrant
society to have women involved in constructive and powerful ways. And I
appreciate the example that your nation is setting.

Progress toward greater political openness is being led by the Egyptians
themselves, by pioneering journalists -- some of whom even may be here --
bloggers, or judges insisting on independence, or other strong civic and
religious leaders who love their country and are determined to build a
democratic future.

Because of the predominate role you play, and because I strongly believe
that Egypt can play a role in the freedom and justice movement -- you and I
have discussed the issue, you have taken steps toward economic openness --
and I discussed that with your Prime Minister -- and democratic reform. And
my hope is that the Egyptian government will build on these important steps,
and give the people of this proud nation a greater voice in your future. I
think it will lead to peace, and I think it will lead to justice.

Our friendship with Egypt is deep and broad. Egypt will continue to be a
vital strategic partner of the United States. We will work together to build
a safer and more peaceful world. And, Mr. President, I thank your leadership
on the issue of peace and security.

I've had a great trip. I've been impressed by the warmth and the energy of
the people I have met. It's a dynamic part of the world that is seeing
significant changes. I wish my fellow citizens would be able to come and see
firsthand the vibrancy and excitement in the Middle East. People here are
working to embrace the opportunities of a modern global economy, and in
doing so, are not abandoning their traditions or cultures or their faith.

This isn't easy work, as we head into the 21st century, and it's going to
require social, economic and political reform. And it takes time for people
to resolve the challenges in their respective societies -- same in my
country. But I'm absolutely confident the people of the Middle East are
working hard to build a society based upon justice. And I've assured them
that as they make the journey, the United States will be a steady friend and

6) Slave to the words: Lieberman likely regrets past promise to quit government over ‘core issues’
By Eitan Haber

Late Prime Minister Levi Eshkol was the one who said “I promised – yet I didn’t promise to deliver,” and it appears that Avigdor Lieberman and Ehud Barak would have liked to adopt this lovely message. Lieberman and Barak fell captive to the words they uttered, so it appears, ages ago, and now even a rescue operation by a commando unit cannot help them. In the eyes of many, credibility comes before anything else.

We see this tragedy unfolding before our eyes: At a difficult time for the State of Israel (The cynics will say: When isn’t it a difficult time for the State of Israel?), with a broad and stable government being backed by an almost record number of Knesset members, the coalition is about to fall apart just because Avigdor Lieberman promised to break it up should the prime minister deal with the core issues pertaining to the Israeli-Palestinian conflict (Jerusalem, refugees, etc.) Meanwhile, Ehud Barak promised to join the opposition upon the publication of the second part of the Winograd Report.

The politicians and journalists forgave former Prime Minister Yitzhak Shamir after he signed a coalition agreement and then suggested to another Knesset member to “frame the agreement and hang it on the wall.” The journalists forgave former PM Menachem Begin after he promised to build a house in the Sinai and to “pack up my bags and go back home” should he be asked to evacuate communities in Camp David, and then proceeded to hand back the Sinai to Egypt. But now the politicians and journalists want Lieberman and Barak to stay true to their word “all the way.”

Political mess

There is no doubt, times have changed. The experience of recent years taught citizens, some politicians, and the media to demand credibility, credibility, and more credibility from our leaders. You promised? Now deliver!

It is very possible that both Lieberman and Barak are willing to take back their words and would enthusiastically support the words of an anonymous politician who once said: I’ve never regretted words unspoken. They both very likely regret the things they said.

The only way they may have been able to get out of it was to agree with the prime minister on a date for the next elections, say November 2008. However, it now looks like we’re headed for a political mess, in a country that has not known even one quiet day.