Audacity of Hope to Audacity of Fear To Plain Audacity

Is California, which has had a legislature chock full of tax and spend liberals for decades, a precursor of what is going to happen to our nation as a whole? California is a financial basket case. It has done every thing conceivable to run off thousands of jobs due to tax and liberal social policies. Pelosi represents one of the more zany districts of this bankrupt state.

California is the world's eighth largest economy and is blessed with a diverse work force. It has excellent universities and yet the government is unable to cover its outsized spending. Its bonds were recently downgraded. Its legislature refuses to cut spending and downsize the cost of government so California's tax base and number of tax payers is shrinking while the number of illegals, who make costly demands on its social structure, increases. Not a sound way to conduct the people's business but then California is quite Liberal.

The current governor started out in the right direction but found he could not get re-elected by imposing fiscal discipline so he caved.

Meanwhile, Sen. Gregg decided his views were incompatible with those of Obama's. I am sure Gregg did not read the comment I made in a recent memo ("If Sen. Gregg had any self-respect he would refuse the appointment.") but my hat is off to him. You may recall, after being nominated the White House decided they could not trust The Commerce Department to be involved with the Census. The Census is one of Commerce's main functions. The rest of the department hands out money and helps corporations conduct commerce.

Our son has dealt with this department in a number of instances and was underwhelmed with the results or people. If there are any truly vital things The Department does they could be moved to some other agency and we could save billions by closing its building's heavy doors.

Miami Herald Editorial takes Chavez to task for the rise in anti-Semitic attacks taking place in his nation and the fact that he is encouraging them by his silent anti-Israel diatribes and alignment with Iran and Russia. Hitlerism began as a pimple and spread to become a cancer on the body politik. (See 2 below.)

Sent to me by a dear friend in response to my memo about the way American executives were treated by Barney's Committee and one of the dumbest Representatives to ever sit in Congress - Maxine Waters. Her every word drips with stupidity.

It is from the perspective of the "other shoe."

No doubt Barney's constituents will re-elect him because he has consistently favored them with largess from taxpayer's pockets. (See 3 below.)

Meanwhile, Congress is getting ready to vote on the stimulus bill which is heavy enough to give anyone who holds it a hernia. Members have not been given time to read it. Most probably would not understand it if they did read it and yet they are voting to financially enslave more of our chldren's future so they can get re-elected by shoveling money into the pockets of their constituents.

The bill has little to do with helping the economy recover but it has a lot to do with passing a Liberal agenda on the wings of fear. Its intent is to tilt votes, to pay off special interests in a 'legal' manner. The public mood is currently sour and distrusting but that too shall pass because our attention span is limited.

The next thing to expect will be an effort to stifle dissent. It won't probably go far this time but the ground is being laid. Dissent is dangerous in a Democracy so it is important to crush it - so says Big Brother!.

In a short time Obama has taken us from the audacity of hope to the audacity of fear and now he offers us just plain audacity. (See 4 and 4a below.)

Israelis have reacted to reality but as they zig the rest of the world continues to zag and remains wedded to unreality. Sound of one hand clapping? (See 5 below.)

Yes,haste makes waste but more time might have resulted in even more waste. Thanks to the three Democrats parading as Republicans, they have given a Valentine Kiss to Obama on his right cheek. Pelsoi and her minions had already smothered him with kisses on his left.

As for the nation, the Democrats have told us to kiss their's.

So Happy Valentine Day or meet the new Valentine Massacre! You decide!(See 6 below.)


Dick



1)The Real Stimulus Burden: We'll be paying for this in many ways, for many years.

In 2003, amid debate about the Bush tax cuts and a budget deficit of merely $400 billion, Maine Senator Olympia Snowe demanded that any tax cuts be capped at $350 billion. "At a time of growing federal deficits," the Republican declared to much media praise, "it is especially important that this plan be right-sized without putting our future at risk."



Susan Collins, Olympia Snowe, Max Baucus, Harry Reid and Arlen Specter.
Flash forward to Tuesday: Ms. Snowe provided one of three crucial GOP votes that helped Democrats pass $838 billion in new spending and "tax cuts" -- often for people who pay no taxes. The deficit for 2009 even before this stimulus? $1.2 trillion.

If nothing else good comes from this exercise, at least Senators Snowe, Susan Collins and Arlen Specter should be laughed out of town if they ever fret about a budget deficit again.

As of late yesterday, the details of the final House-Senate stimulus bill weren't available. But this much we do know: The bill will mark the largest single-year increase in domestic federal spending since World War II; it will send the budget deficit to heights not seen in 60 years; and it will establish a new and much higher spending baseline for years to come. Combine this new spending, and the borrowing it will require, with the trillions of dollars still needed for the banking system, and we are about to test the outer limits of our national balance sheet.


The three Republican amigos are praising themselves for cutting spending in the House bill by some $100 billion, but this is tinkering around the Beltway edges. The total price tag is still just under $800 billion, and the Senate version even increased spending from the House bill for more than 120 programs -- such as $750 million for farm subsidies. Late yesterday we were hearing that in order to add back more House spending, the conferees were cutting the size of the tax cuts that Barack Obama campaigned on.

The original economic theory behind this bill was to spend the money quickly to create jobs fast. But even the most talented spenders on Capitol Hill couldn't find enough projects to fund in such a rush. So they spread out the largesse over several years -- long after everyone hopes the recession is over. Some of these "timely" stimulus payments won't hit the economy until after the 2016 Olympics.

Even under CBO's conservative estimate, the Senate bill increases outlays by $546 billion over 10 years. But to get this low a figure, CBO assumes that the half-trillion in spending will be a one-time wonder. We are thus expected to believe that Democrats will let these additions to their favorite programs vanish after two or three years. To believe this, you have to ignore the last half-century of budget politics. Spending never declines; at best it merely fails to grow as fast as the economy.

Far more plausibly, Democrats will take the stimulus increases and make them part of a new, higher baseline for future spending growth. Anyone who proposes to cut from that amount will be denounced as "heartless" and Draconian.

The Republican staff of the House Budget Committee has calculated what happens to future spending if Congress continues to fund 19 of the most politically untouchable programs at their new stimulus levels. The list of 19 includes Pell Grants, Head Start money for poor kids, nutrition programs for seniors, Medicaid, special education, food stamps and cancer research at the National Institutes of Health, among others. Across a 10-year period through 2019, these 19 programs alone would increase federal outlays and tax entitlements by $1.59 trillion.

The 2009 budget deficit, which is already the largest in modern history. Perhaps you recall the deficit wails from the Reagan years, but the peak deficit was only 6% of GDP in 1983. In the Clinton years we were told taxes had to rise to reduce a deficit of merely 3.9% of GDP. CBO estimates the 2009 deficit will reach 8.3% of the economy, not including the stimulus or bank bailout cash. Toss in those, and analysts at the Strategas Group estimate the deficit could hit nearly $2 trillion, or 13.5% of the U.S. economy.

We aren't deficit scolds, but these levels are uncharted territory, especially if any economic recovery is weak because the spending doesn't stimulate. The new spending means new federal debt in the trillions of dollars over the next few years, which will test the limits of America's credit-worthiness. To the extent that taxes rise to pay for it all, the U.S. will become less desirable as a destination for the world's capital. Perhaps the Federal Reserve will try to inflate away this growing debt, but the world's bond vigilantes will get a vote on that.

We recognize this bill is going to pass as early as today. But Americans need to understand the vast expansion of government they are getting -- and who voted to pass it.

2) Campaign of hatred grows in Venezuela

OUR OPINION: Anti-Semitism thrives under President Chávez's government
Is it likely that a contemporary state in Latin America would dare to adopt an official policy of anti-Semitism? We would like to believe that the answer is No. Not in our part of the world. Not in view of the universal disavowal of racism among nations of the region. But take a look at what is happening in Venezuela, and suddenly it doesn't seem unlikely at all.

Embracing Iran

The reprehensible attack on a synagogue in Caracas on Jan. 31 has spread widespread fear within the Jewish community in Venezuela and sent shivers across the hemisphere. The brazen and well-planned assault represents an escalation in a menacing drumbeat of events that began years ago under President Hugo Chávez and includes the welcoming embrace of Iran, Israel's sworn enemy; the recent break in relations with Israel; and the growing volume of anti-Semitic propaganda tolerated, when not actually sponsored, by Mr. Chávez's government

This was no random act of vandalism. Two security guards were overpowered by about 15people who ransacked the synagogue's sanctuary and offices, shattering religious objects and leaving graffiti such as, ''Jews, get out.'' Such actions will multiply unless the government takes an unequivocal stand against anti-Semitism and stops spewing anti-Jewish and anti-Israel hatred in the government-controlled media.

Mr. Chávez issued a pro-forma condemnation, but he would be more believable if he had not led the way in attacking Israel for the recent conflict in Gaza, and if his own government were not inciting anti-Jewish violence. Mr. Chávez himself compared Israel's actions in Gaza to the Holocaust. At the same time, a well-orchestrated campaign has been under way on TV, radio, print and Internet media owned by the government that openly questions Israel's right to exist, according to the Simon Wiesenthal Center.

It doesn't help Mr. Chávez's credibility when a pro-government group of journalists urges the public to boycott businesses owned by Jews. Rabbi Pynchas Brener of Venezuela is pessimistic, telling a Jerusalem newspaper that he fears for the future of the Jewish community there, which numbers about 15,000.

No objections?

Perhaps the most dispiriting aspect of all this is the silence of Mr. Chávez's equals across the region. No government or head of state in Latin America, even in countries with larger Jewish populations, has come forward to condemn the events in Venezuela. This failure will only embolden the haters and inciters of violence. Does the silence imply consent, or just indifference? Surely the other leaders of Latin America can see that what is happening in Venezuela is an official policy of anti-Semitism in all but name and declared intent.

3) Reversal of Fortune

Just imagine if the tables were reversed. Frank and Waters
are seated at the witness table instead of perched on the hearingroom dais. The questioning would go something like this:

Chairman Frank, on July 14, 2008, you made the followingpronouncements about Fannie Mae and Freddie Mac, the two huge
government-sponsored enterprises that are the key players inmortgage finance:
Fannie and Freddie are fundamentally sound. They are not in danger of going under.
Looking at the financials, they're solid.

You followed that analysis with a forecast. Referring to legislation before your committee to allow the Treasury to lend to and buy unlimited shares in the GSEs, you said: We're doing three separate things that make it much less likely -- very, very
unlikely -- that we'll have this kind of a housing crisis six months or a year from now.

Less than two months later, Fannie and Freddie were wards of the state.
Just answer the questions, Mr. Chairman.

GSE Enabler

As the ranking member of the House Financial Services Committee -- before you became chairman in 2007 -- you consistently opposed stricter regulation of Fannie Mae and
Freddie Mac. I would just note that you received $42,350 from
Fannie and Freddie's political action committees and employees from 1989 to 2008.
In 2004, you received a report from the GSE regulator showing that Fannie and Freddie had manipulated their earnings, enriching their senior executives in the process. Yet you and your fellow committee members, primarily Democrats, looked the other way. Even worse, you shot the messenger, Armando Falcon, director of the Office of Federal Housing Enterprise Oversight, who found accounting irregularities at both companies.

˜Innovation’ Lending

This is what you said to Falcon at a committee hearing: I don't see anything in your report that raises safeness and soundness problems. Your distinguished colleague, Maxine Waters, was right there to back you up. "We do not have a crisis at Freddie Mac, and particularlyat Fannie Mae, under the outstanding leadership of Franklin
Raines, she said."

She went on: "What we need to do today is to focus on the regulator, and this must be done in a manner so as not to impede their affordable housing mission." That mission, as you noted, has seen innovation flourish from desk-top underwriting to 100
percent loans.

We all know how that worked out. Fannie had to restat earnings back to 2001, erasing $6.3 billion in previously reported profits.

Doing Penance

Former CEO Franklin Raines kept the lion's share of the $91 million bounty he received for his six years of service at the company. (Raines had to cough up $24.7 million last year to settle a claim that he inflated earnings.)

Questioned by former congressman Chris Shays, Republican of Connecticut, about Fannie's teensy 3 percent capital cushion, Raines said of the multi- and single-family loans the company holds: "These assets are so riskless that capital for holding them should be under 2 percent."

Finally, Mr. Chairman, you used your influence as chairman of the House Financial Services Committee to secure $12 million for a troubled home-state bank under the TARP program. Treasury had stipulated that the banks be healthy.It's disingenuous to be critical of legislation you passed and a program you implemented when you're the one bending the rules.

Mr. Chairman, we thank you for your candor in appearing before us today.

4)February 13, 2009

Imagine! There is a Congressman who actually wants to delay the vote on the stimulus bill so he can read it and make sure it says what he was told it says. Kudos for him. There is still hope for our country.

This 575 page piece of legislation is being rammed through Congress without any hearings, without any detailed examination, without any vetting. It is loaded with pieces of spending that are not going to trigger job creating activity for months or even years or maybe never. It is larger than all the money spent on the Iraq war. Its size rivals the Defense Department appropriations. It will be funded through federal borrowing. And there has not been any comprehensive vetting of the component parts.

Now we are continually told that there will be a "catastrophe” or a "disaster” if this 789 billion dollar package is not passed at once. Note that there is a continuing reference that ONLY government can fix the economic problems in the United States .

Not once did anyone mention that Cisco financed a 4 billion dollar bond issue without any TARP funds and without any government guarantees. Note that Intel announced an investment of billions into an entire new facility that will be located in the United States ( Arizona ) and will be privately funded. Intel didn’t need TARP funds. Intel didn’t need the stimulus package. Not one official in the Obama administration has even acknowledged the Intel commitment.

All we hear is that government can fix what will otherwise be a complete disaster. And all we hear is that banks are not lending and that there is no credit available.

Yesterday our chief monetary economist, Bob Eisenbeis, cited bank lending figures compiled by the federal authorities which show that bank lending is not at a dead stop. Sure credit is tightening. But creditworthy borrowers are getting loans. We see that among the clients in our firm.

In the United States our government is meeting behind closed doors and working up an $800 billion spending package and then giving the country no time to examine it. Even the Members of Congress who have to vote on it haven’t had time for their staffs to examine it. Campaigner Obama promised transparency. President Obama seems to have forgotten his message.

And for those of us in the business of managing the wealth of clients, we must deal with the conflict of emotions when we see the policy prescription in Washington on a collision course with the investment needs of our clients. Our job is to protect the wealth of our clients as best we can. Our job is to try to allocate among the component choices available to them. And our job is to tell our clients, their consultants and those readers who listen to us what we see and how it impacts them.

We see a Washington in disarray. We see repeated failure in assembling a cabinet. We see nominees having to withdraw their names because of their failure to comply with our tax laws. The first scofflaw was confirmed and he used up a lot of the new president’s political capital. The series that followed have had to withdraw.

Senator Gregg apparently withdrew when he realized that the Census Bureau was going to be moved from the Commerce Department to the White House. And he realized that this formerly neutral agency would be at risk of political influence. At least his withdrawal was not for failure to pay his taxes.

In Washington we see harsh and shrill rhetoric attempting to force immediate passage of legislation without vetting. And we see apologetic admission of “screwing up.” What we don’t see is a stimulus bill that will put people back to work promptly.

We do not believe the United States will fail immediately if something is not done at once. We think the 135 million Americans who still go to work every day and pay taxes and try to save and invest are the backbone of the country. And we think that government is NOT the only answer.

Today we fly to South America . In Argentina we will visit a country that squandered its great natural resources and ran up its debt and has defaulted several times. Argentina can claim the award for the largest US dollar denominated default in history. It, too, had a banking crisis. I remember visiting when “no al corralito” was chanted in the streets by citizens who could not get their money from the banks. We will also visit Chile , a country where dictatorship has been replaced with democracy and market based systems that seem to work. Chile is a success story. Argentina is an example of how populism and socialism destroyed what was once the fifth largest economy in the world.

This is our tenth trip to that region and to Patagonia. The people are friendly and welcoming. They do not trust their government. They have good reasons.

We will travel as best we can in South America . In these times we will carry a satellite phone when in remote areas where black berry has not penetrated. While away on our trip our Cumberland colleagues made up of tax paying employed private sector employees are available to serve our clients.


The enduring quality of these great United States is that our institutions survive our politicians and endure in spite of them. The real fabric in America is the willingness of its citizens to participate in the government. And it is in the ability of our society to voice criticism and to debate ideas without fear of retribution by the government. Those wonderful characteristics are still alive.

I would still rather be a citizen of our country than anywhere else. But I am very concerned about the start of the new Obama Administration. I supported him and I voted for him I want him to succeed. I repudiated what seemed to be a failed policy of the last few years; that was my personal choice. But I am now very insecure in the way the government is being run by the new folks. I find the thought of a Pelosi dominated policy repugnant. And it seems to me that the House of Representatives is now a one party system without any respect for the tradition of debate on the issues.

2009 is certainly an interesting year. Happy Valentine’s Day and Happy Presidents

4a) Madness, Thy Name Is 'Stimulus'
By Candace de Russy

Underscoring the extreme folly of ensnaring generations of future Americans in ever more crushing taxation and debt to pay for the so-called "stimulus" bill, Citizens for Common Sense and Accountability titled its opposition to the plan "Stop the Stimulus Madness!"


The outcry against the liberal Democrats' and President Obama's legislation, the most profligate spending plan in U.S. history, has so far advanced along mostly economic, not sociopolitical, lines.


Sen. James Inhofe slammed it as "stuffed with waste and less than 7 percent real economic stimulation," and "bloated with millions of dollars for stupid projects" such as coupons for digital TV transition.


Harvard economist Robert Barro anathematized it as "probably the worst bill that has been put forth since the 1930s" and, in a word, "garbage."


With the bill's social consequences no doubt well in mind, the Heritage Foundation's Robert Rector scored the House version of the bill as a "welfare spendathon," which could cost as much as $787 billion, not the $264 billion that advocates have claimed, and which would fund every conceivable program for low-income people, among others, food stamps, Medicaid, unemployment benefits, child care, energy assistance, homelessness prevention, etc.


"Both bills [Senate and House versions]," Rector warned, "use the idea of economic stimulus as a Trojan horse to conceal massive, permanent increases in the US welfare system." "None of these programs," he said, "deals with the fundamentals of poverty, which are low levels of work and lower levels of marriage. They just say, ‘Give me more.'"


But the undying urge by the radical leftists among us to create a welfare state entails not only economic but also societal folly, as many thoughtful conservatives and liberals have recognized in the past. (After all, notably, it was Bill Clinton, a liberal president, who signed welfare reform into law.) One novel analysis of the roots and destructive consequences of this folly, rich in insights that apply to the present, irrational "stimulus" legislation, comes from Lyle H. Rossiter, Jr., a psychiatrist.


In The Liberal Mind: The Psychological Causes of Political Madness, Rossiter makes the case that neurotic themes dominate radical liberals' view of the world and their political agendas. Their portrayal of citizens as suffering, victimized, helpless children in need of rescue mirrors their "unconscious projections of early childhood dynamics transferred into the political arenas of adult life." Thus -- and circling back to the "stimulus" spend fest -- radical liberals imagine the world peopled by villains (among others, those in Congress whom Obama angrily castigated for delaying passage of the bill), victims (such as those in need of the multi-millions of dollars designated, at least in the original versions of the bill, for "smoking cessation activities" and "tribal alcohol and substance abuse reduction"), and heroes (radical liberals themselves, of course). According to Rossiter, these liberals fabricate an idealized world of loving care and absolution from responsibility, and seek in an all-enveloping assistance (think billions of dollars for anti-obesity campaigns) from the "Modern Parental State" what they missed as children.


The destructive social results of such subservient government dependency -- the institution of perverse incentives, debilitated families, disintegrated communities, the preemption of private charitable and altruistic endeavors -- have been, again, acknowledged across the conservative-liberal spectrum.


But Rossiter is especially astute in analyzing other aspects of the terrible price that radical liberals may exact from "the competent society." In its trampling of the values essential to ordered, civilized liberty, radical liberalism, among other madness:


Devalues individual lives by treating citizens as fungible elements of economic, social or political classes;
Curtails individual freedom of choice and action by substituting regulation and dependency for autonomy and freedom;
Discourages and even precludes self-reliance and voluntary exchange in favor of government coercion;
Violates property rights and indentures the citizen's labor;
Institutionalizes, via its social justice programs, theft, and invites manipulation;
Promotes hostility, vulgarity, rudeness and defiance as justified rebellion against imaginary oppression, discrimination and exploitation;
Degrades the moralities of obligation and aspiration, and, in keep with its secular tradition
Attacks the legitimacy of formal religion, dismisses its historical importance, and denies its critical role in maintaining the nation's moral integrity.
The extent to which the smothering "stimulus" legislation is a neurosis is a matter for debate. But that it will lead in the direction of collectivizing this nation and rendering subservient its free citizens is beyond doubt.


Let us stand warned, for, in Rossiter's words, "Any government with the power to mother its citizens also has the power to dominate them and steal from them." And the perennial antidote to the "stimulus" madness and its like? "The legally enforceable institutions of society must be very limited, lest the government charged with the people against tyranny and theft becomes itself the most dangerous tyrant and thief."

5) Israel after the election
By Richard Baehr

The other night I was on Rick Moran's radio program to discuss the Israeli election results with Professor Barry Rubin. The single most interesting observation offered by Professor Rubin, was that in Israel, across the broad political spectrum, almost no one thinks the Palestinians are a serious negotiating partner. There are very few Israelis who remain hopeful about the prospects of any peace process.


The Party, most associated with the "logic" of Israel withdrawing from West Bank settlements to foster the chance for peace and a two state solution, is Meretz. They won 3 seats of 120. This is a sign that Israelis understand the reality of their situation -- that the Palestinians are far more interested in negotiating an accord between Fatah and Hamas, than between Israel and the Palestinians. Israelis seem to understand that a withdrawal from the West Bank would more than likely bring the Gaza/southern Israel rocket situation home to millions more Israelis. That is not a definition of peace and security, or a two state solution.


Of course, Israeli politicians from the center left (Labor), center (Kadima), and center-right (Likud) will all pay lip service to the need for more useless peace processing with Mahmoud Abbas, since it is what the international community, and certainly Barack Obama, expect from Israel. Rubin says that even with Obama, the appointment of 75 year old George Mitchell to do the dirty work of shuttle diplomacy for the next few months, may be a signal that Obama will not over-invest in what, for all his good intentions, turn out to be a dead end process. Richard Holbrooke and Dennis Ross, the more skilled and experienced negotiators (and in the case of Holbrooke -- more hard-nosed and accomplished) , have been given other portfolios: Afghanistan/Pakistan, and Iran.


Rubin believes that the most likely result of the post-election sausage making process of forming a new Israel governing coalition of 61 Knesset members will lead to some power sharing arrangement between Likud and Kadima, with or without Avigdor Lieberman's Yisrael Beiteinu Party. Rubin thinks the lead role in this coalition could go either way, but I think signs are pointing to Netanyahu having the upper hand.


The final tabulated results do not provide a simple right/left split as described by the mainstream media. The fractionalization of Israeli politics is more complex than left/right. The "right-wing" bloc of 65 seats , includes Likud, a center -right party, at 27, Yisrael Beiteinu, a secular, largely Russian, nationalist Party with 15, religious parties with about 19 seats (Sephardic 11, Ashkenazi 8), and National Union, a right wing party with 4. Israeli politics is certainly more focused on national security issues than American politics, but other issues do matter, particularly to some parties and their members. Will an ardently secular party led by a now more assertive Avigdor Lieberman, be part of a stable coalition on the right with ultra religious parties? It is hard to see how.


Many liberal Jews regard the Labor Party as a left wing peace Party, but its leader Ehud Barak, served as Defense Minister in the recent Gaza war. No Israeli leader will form a government coalition requiring the participation of the Arab Parties (11 seats won in this election) to create that majority. So the left does not really have 55 seats to start from, but 44. Rubin believes that both Netanyahu and Livni understand that having Kadima, Likud and maybe even Labor in a coalition, will provide a broader based support support level of near 70 seats in the center, that will make resisting American pressure (primarily on the issue of settlements and settlement expansion), far easier to do.


What is disturbing is that at the same time as Israelis seem to be coming to their senses in understanding the nature of their enemy (sorry, I mean negotiating partner), American Jews, seem to be swerving to the left on the conflict. In the recent Gaza war, J-Street could not decide which side to support. M. J. Rosenberg, Director of Policy Analysis for the Israeli Peace Forum, advertises that he stands squarely with Jimmy Carter, and admits that he loves reporter Helen Thomas, who despises Israel and is utterly contemptuous of anyone who supports the Jewish state. The left wing blogs are full of the Israel bashing trash of Glen Greenwald and Naomi Klein. In the U. S. Congress, a fourth of the Democratic members of the House went on record demanding Israel loosen up border restrictions in Gaza. Anyone who tells you that the support for Israel is strong in both Parties, and on both he left and right, is either blind or dishonest.


Rubin says that Israelis understand that the peace process with the Palestinians is a sideshow. There is no train leaving the station, nor any unique opportunity for peace. Tom Friedman gets paid a lot of money by the New York Times to recycle old columns on the wisdom and bravery of the Saudi "peace plan", but that peace plan amounts to a surrender by Israel to a right of return for Palestinian refugees. Israel cannot long term live with a Hamas-controlled Gaza, but Israel dealt Hamas a body blow last month that has put resolution of that issue on the back burner for now, and may have even damaged Hamas' standing in Gaza


The real Israeli political focus in the next year or two will be on Iran. Can Israel stop Iran from completing its nuclear weapons program if the US and its allies fail to do so (as will almost certainly be the case)? If Israel decides it needs to act, can it be successful in its effort? What will be the repercussions if it acts alone (or with some level of coordination with the United States)? These are questions that matter.


Negotiating a shelf agreement (a peace treaty that cannot be implemented but contains the "good ideas" that can some day bring peace!) with Mahmoud Abbas, who may not even be legally head of the PA any more, and has no authority in Gaza, seems like a colossal waste of time and energy. Palestinians, in every survey, do not hide that they prefer Israel to disappear. They have not come around to accepting Israel's permanence. It is not Israel that has resisted the notion of a two state solution for over 60 years.


Rubin argues that what has changed in the last ten years in the Arab world is a growing clash between the secular rulers, who are corrupt and repressive thugs, and the Islamists, who are of course repressive thugs as well, and want to replace them. This explains why many of the Sunni regimes were quietly rooting for Israel to deal a blow to Hezbollah in the 2006 war, and to Hamas last month, since both are seen as agents of Iran, the regime doing the most to destabilize the existing Sunni regimes, and capable of doing more, if it obtains the leverage available through a nuclear weapon.


A Palestinian state, were it to be created, would be a weak state, dominated by or threatened by extremist Islamists, and further the destabilization of the region. While the Arab regimes are not fans of Israel, and earn political points by their hostility to Israel, many of them understand that it is the Jewish state that is a force for stability in the region, and a Palestinian state that would create instability for them.

6) 'Historic' Stimulus Is Egregious Waste
By INVESTOR'S BUSINESS DAILY

Economic Recovery: Congress is confident it will send President Obama a stimulus bill to sign by Monday's holiday. Unless something unforeseen happens, what lawmakers will put on his desk is a $789 billion waste.




The old quip that no one should watch while laws or sausages get made is true — especially with this Congress. America's legislative body has moved away from creating anything of value and instead habitually turns out things that belong in a landfill.

None have ever been more dump-worthy than the spending bill being sold as economic stimulus.

Harvard economist Robert Barro calls the legislation "probably the worst bill that has been put forward since the 1930s."

"I mean it's wasting a tremendous amount of money," he said in an interview with the Atlantic. "I don't think it will expand the economy. . . . I think it's garbage."

Rep. Tom Cole, Republican from Oklahoma, was a bit more refined but no less biting in his commentary. Borrowing from Winston Churchill, he wryly observed from the House floor Thursday morning that "Never have so few spent so much so quickly to do so little."

Lest anyone think that Barro or Cole is guilty of overstating the situation, consider what's in this monster:

• It overflows with pork — $2 billion to ACORN, an anti-capitalist "community" group that's been accused of voter registration fraud; $30 million to restore wetlands and save the endangered salt marsh harvest mouse in the San Francisco Bay Area (a Nancy Pelosi project); another $1 billion for a Prevention and Wellness Fund for education programs on sexually transmitted diseases.

Tens of billions will be spent on high-speed rail lines, which will be of little practical use but of great political service, and projects to expand high-speed Internet access in rural areas.

There's so much special-interest spending in the bill, says House Republican Leader Rep. John Boehner's office, that the dollars left over for direct small-business tax relief amount to only "about one-third of 1% of the total bill," a mere $3 billion out of a $789 billion package. Yet small businesses do most of the hiring in this country.

• The bulk of the spending comes not right away when the economy needs a boost, but in future years. This is typical. Legislative attempts to rescue the economy have been late in the last eight recessions going back to October 1949, when Congress passed an anti-recession bill just as the country was emerging from a 12-month downturn.

• By releasing $800 billion in new welfare spending over the next decade and undermining current work requirements, it will largely undo the successful 1996 welfare reform. Once again, Washington will be paying bonuses to states that expand their welfare rolls. In what world is increasing dependency on government a stimulus for the private economy?

• States that have spent recklessly for years will get bailouts when they should instead suffer the consequences of their actions. The compromise bill includes $54 billion to hand out to state and local governments, a perverse reward for elected officials who can't control their spending.

What's missing from the legislation is just as significant as what's included.

There are no tax cuts to boost investment, just a trifling $13 in tax relief per week that will appear on paychecks in the spring.

There's no real effort to boost energy production.

There's no meaningful defense spending.

Tax cuts initiated at the White House gave life to struggling economies in the 1960s, 1980s and earlier in this decade.

Rather than take money out of the private sector and sift it through Washington, from where it is doled out through the political process, it's more effective to let Americans keep more of what they earn. Tax relief spurs the investment that fuels business expansion, drives productivity upward and feeds job creation.

Helping almost instantly would be an increase in domestic energy production. If Washington were to enact public policy that allowed for more oil drilling and additional natural gas output, the markets would quickly react by cutting prices even more.

Also absent from the package is the stimulative effect of defense spending. Funding the research, development and production of military ware at private companies creates jobs, advances technological innovation and strengthens the security that's necessary for continued economic growth and improvements to the quality of American life.

The entire mess will eventually cost not $789 billion but $3.27 trillion. The Congressional Budget Office calculated that figure by including $744 billion in debt service and $2.527 trillion in spending over the next 10 years if the bill's 20 most popular programs are permanently extended, which seems likely. There's nothing in the history of government programs that indicates that won't happen.

History, though, is the most ignored subject in Washington. Not just American history, but history abroad.

How else could lawmakers rush into this effort? Right in front of them is the lesson of Japan, which made a series of unsuccessful attempts to stimulate its stagnant economy. It spent $6.3 trillion on infrastructure in the 1990s and into this decade, and in doing so amassed the largest debt ever known in the developed world.

Yet all that spending failed to pull Japan from its slump.

But like their Japanese counterparts, American lawmakers soon will return to the trough, demanding more taxpayer cash because, well, they just haven't spent enough to revive growth.

However, as they do, lawmakers might find taxpayers in a foul mood.

Rasmussen reports that 67% of Americans, when polled about the stimulus, say they "have more confidence in their own judgment than they do in the average member of Congress," while 58% agree that "no matter how bad things are, Congress can always find a way to make them worse."

Proving that an economic downturn hasn't caused them to abandon their sense of humor — nor their insight — 44% said they believe a group chosen at random from the phone book "would do a better job addressing the nation's problems than the current Congress."

Obama should study those numbers and consider the "consent of the governed" before he puts his name on this bad bill delivered by Congress. It would be good for both the country and his presidency if he sent the bill back to lawmakers and told them to listen to what the country is saying.