Have Obama and The 'Demwits' Europeanized U.S?

Obama, our 'expedient' president, favors Netanyahu if Bibi brings in Tzipi? By delaying the impossible (Palestinian State) Obama appears to be betting on an improved economy in The West Bank that could serve as a beacon that should not be lost on Palestinians living in Gaza.

More attempts to buy peace and calm? Has not worked to date after Europe poured billions into the leaky coffers of the Palestinians. Maybe this time.

Also, by supporting Livni, Obama hopes to place a restraint on Netanyahu's tougher approach towards Iran's nuclear program.

In terms of Cpl. Shalit's negotiated release, is Olmert about to make a trade which will unburden the next Israeli PM? But at what cost - release of 400 or so criminals intent on killing Israelis?(See 1 below.)

The Stimulus Bill will soon be law. Government is projected to eventually consume 32%of GDP (GW around 22%). What Obama is betting is that the inevitable recovery, which will take place regardless of his and the 'Demwit's' passage of this monstrosity under the rubric of fear, will take place in time for him to claim credit.

Consequently, Obama will have passed his Liberal agenda hidden in The Trojan Horse of a Stimulus Bill. Clever, but risky because he, Pelosi and Reid and their 'Demwit' brethren will have imposed trillions of debt on the backs of a shrinking pool of taxpayers and their future offspring.

In terms of the longer term effect on our nation it reminds me of John Donne's analogy about waves washing away sand from shores, ie. our nation's course could be altered forever as we become increasingly Europeanized. Perhaps Van Gogh would have been impressed by all the "earmarks."

In the next two years this bill will incrtease spending at the rate of about a billion dollars a day. Assuming the dolts in Congress read what they passed, even retroactively, the Stimulus Bill could prove the most costly reading session ever seen. Furthermore, reading this abortion does not suggest they would understand it or could predict its inevitable, unintended consequences.

POGO - Woe to Us 'cause the Enemy is Us! (See 2,2a,2b and 2c below.)

But, the enemy is Israel according to the board of this elitist college so they buckled and divested stocks of companies doing business with Israel. Selective morality sets a great example particularly when based on a false premise. Can't wait to enroll my grandchildren in that college.

Is this college's action symblomatic? Has Israel become such a pain in the ass that it is better to cut them adrift?(See 3 and 3a below.)

Have a great week.

State of The Union. (See 4 below.)

Why is the West so willing to jump at Palestinian propaganda? (See 5 below.)

Dick

1) Obama backs Israel unity government headed by Netanyahu


US president Barack Obama has bought Likud leader Binyamin Netanyahu's program for attacking the Palestinian issue by first building a strong West Bank economy, Washington sources report. For its execution, Washington is in favor of Netanyahu forming a unity government in partnership with Kadima's Tzipi Livni and Labor's Ehud Barak.

Messages to this effect reached the three Israeli leaders over the weekend. It was picked up on by the outgoing prime minister Ehud Olmert, who invited Netanyahu to join his next consultation with Livni and Barak on handling the Hamas truce talks in Cairo. Making it a foursome effectively starts the transition between the Jerusalem administrations.

Sources reveal the White House decided after due deliberation to put the Palestinian peace issue on a back burner in the first year of the Obama presidency. Its top priorities must now be the economy and Afghanistan-Pakistan. The president's national security adviser Gen. James Jones argued that anyway, the Palestinians are split between two rival administrations and the potential Palestinian state is fragmented between the Gaza enclave backed by Iran and the West Bank which is headed by a weak leader, Mahmoud Abbas. The basic conditions for peace diplomacy are therefore lacking.

Special Middle East envoy George Mitchell was therefore instructed to focus on plans for establishing a firm economy on the West Bank with several hundred million dollars of US aid. Taking the opposite direction from previous Israeli governments, the Likud leader persuaded Washington that giving West Bank Palestinians a sense of prosperity would produce more results than going straight for the tough issues such as settlement evacuation. With a robust economy, the Palestinians have a better chance of building healthy government.

Mitchell was also directed to expedite the creation and training of a Palestinian security force to sustain a pro-Western administration on the West Bank.

With these two elements in place, the Obama administration hopes the future will throw up a Palestinian leader able to take over from Mahmoud Abbas and lead negotiations with Israel for a peace serving both their interests.

2) Obama’s new deal is the same old blunder
By Dominic Lawson

Here’s something new: instead of the customary attempts to put an optimistic gloss on the state of the economy, our governments are doing exactly the opposite. Over here Ed Balls tells us, more or less, that this is the worst recession since dinosaurs roamed the primordial swamps. Meanwhile President Barack Obama declared last week that “if we don’t act immediately, our nation will sink into a crisis that at some point we may be unable to reverse”. As The Economist commented, with some alarm: “The notion that [America] might never recover was previously entertained only by bearded survivalists stockpiling beans and ammunition in remote log cabins.”

Obama’s dire assessment was on the surface the more surprising – wasn’t he supposed to be the great uplifter of the national mood, in the spirit of Franklin D Roosevelt’s “The only thing we have to fear is fear itself”? It seems all the odder because Obama has explicitly drawn on folk memories of FDR’s New Deal, telling television viewers to “keep in mind that in 1932, 1933 the unemployment rate was 25%”.

Obama is probably right to assume that those same memories have it that the massive state interventionism of the New Deal triumphantly restored America to full employment. That’s why he felt comfortable in asserting, on the eve of the launch of a $2 trillion (or so) injection of taxpayers’ money, “There is no disagreement that we need . . . a recovery plan that will help to jump-start the economy.”

He might, therefore, have been surprised to see an advertisement in the national papers, signed by more than 200 eminent economists, which declared: “With all due respect, Mr President, that is not true. Notwithstanding reports that all economists are now Keynesians . . . we the undersigned do not believe that more government spending is a way to improve economic performance. More government spending by Hoover and Roosevelt did not pull the United States economy out of the Great Depression in the 1930s.” The sorry facts bear this out. The unemployment rate in the US was still 19% in 1939. Over the following four years the number of unemployed workers declined dramatically, by more than 7m. This had a very particular reason: the number of men in military service rose by 8.6m.

You might say that it is always possible to find 200 economists to disagree with anything, but in fact the practitioners of the dismal science are genuinely divided on this one. When the US Journal of Economic History polled economists on the proposition that “Taken as a whole, government policies of the New Deal served to lengthen and deepen the Great Depression”, 49% agreed. These would be the ones who might have recalled the damning remark of FDR’s own Treasury secretary, Henry Morgenthau. In 1939 he confided: “We have tried spending money . . . it does not work . . . we have just as much unemployment . . . and an enormous debt to boot.”

The trouble, 70 years on, is that America’s debt is already enormous, even before Obama’s “jump-start” has begun to hoover up the taxpayers’ trillions.

Perhaps Obama will not repeat some of the errors of the New Deal. Roosevelt (and indeed Hoover) recalled the anger caused by the wage cuts during the depression of 1920-1 and cajoled employers to keep wage rates stable, even as output dropped. This is a policy supported by the Keynesians of today, who argue that lower wages lead to lower demand, which leads to lower output, which leads to more unemployment, and so on ad infinitum.

In practice, however, if labour costs do not come down in a recession, then employers are even less willing to hire staff. The US government of the 1930s augmented this error with protectionist tariffs – designed to keep out imports from countries that had not sought to maintain wage rates, regardless of profitability.

Unfortunately, it may be that Obama will indeed leap into the same elephant trap: the president issued an executive order this month requiring federal agencies to put in place agreements that set “wages, work rules and other benefits” when awarding big construction projects. Perhaps this is payback for the unions’ support for Obama during the election. Admittedly the White House has sought to strip out many of the “buy America” clauses that Congress had attached to its stimulus bill, but when the gold-plating of federal contracts reduces any beneficial effect they might have on overall employment rates, we can be certain that the protectionist chorus will then belt out again, fortissimo.

This fear was not the reason the Dow Jones index plunged by almost 5% between the moment the Treasury secretary, Tim Geithner, began to announce the details of the “rescue” package and when he had finished speaking. There was a stunning lack of detail in the plan to inject up to $2 trillion into the financial system – prompting the observation even from a firm supporter of his, the Nobel prize-winning economist Paul Krugman, that it reminded him of “an old joke from my younger days: what do you get when you cross a godfather with a deconstructionist? Someone who makes you an offer you can’t understand”.

How would the Treasury secretary invest the hundreds of billions earmarked to “rescue” the housing market? “We will announce details in the next few weeks.” How, exactly would he construct the announced $1 trillion public-private partnership to absorb the banks’ “toxic debts”? “We are not going to put out details until we have the right structure.” With apologies to Obama the author, this might be described as the opacity of hope.

It is, in fact, a dangerous mix of messages, and not just because it erodes the public’s sense that the administration knows what it is doing with all the billions it is throwing at the banking system – a complaint which over here is proving ever more damaging to our own government’s fading prospect of reelection.

You simply can’t tell the public on the one hand that there is an imminent danger of economic meltdown if your plans are not implemented – and on the other, give the impression that those plans are little more than scribbles on the back of an envelope. Obama is much more able to get away with such a mismatch between promise and practice – he has a fresh mandate and the high level of opinion poll support which tends to attach to that. Yet, for the same reason, he will never have had a better opportunity to harness popular goodwill to political action.

By contrast, the $787 billion fiscal stimulus that passed through Congress last week was almost too prescriptive, since Obama had allowed the House Democrats to write the cheques themselves: so, for example, there was $335m for STD prevention, $400m for research on global warming, $198m for Filipino veterans of the second world war. Noble of them, I’m sure, but how much is all of that guaranteed to “get America back to work”? Yet Obama mocked those who made such complaints: “You get the argument, well, this is not a stimulus bill; this is a spending bill. What do you think a stimulus is? That’s the whole point.”

In other words, Obama is backing the most primitive interpretation of Keynes’s theories: that any form of government spending amounts to an economic stimulus. He is almost blind to supply-side economics, which suggests that if you want to encourage profitable job creation, you should concentrate on reducing companies’ payroll taxes – and then leave individual businesses to decide how best to employ the funds released.

Instead, the young president seems to want to take us back to some of the failed policies of the 1930s, under the mistaken impression that they were a great triumph. He illustrates with dreadful clarity George Santayana’s most-quoted aphorism: those who cannot remember the past are doomed to repeat it.

2a) Obama Levitates: But the train goes off the rails.
By William Kristol



One of many highlights of the stimulus bill the Democrats just rammed through Congress is $8 billion for high-speed rail. What makes this appropriation special is that there was no money for high-speed rail in the original House legislation. The Senate bill had $2 billion. The legislation coming out of conference "compromised" on $8 billion.

How did this happen? Well, some of that $8 billion, as the Washington Post reported Friday, seems intended for "a controversial proposal for a magnetic-levitation rail line between Disneyland, in California, and Las Vegas, a project favored by Senate Majority Leader Harry M. Reid (D-Nev.). The 311-mph train could make the trip from Sin City to Tomorrowland in less than two hours, according to backers." Reid of course played a major role in putting together the final bill.

That's the kind of policymaking the new Obama administration has embraced in its signature legislative proposal: a congressional process as unseemly as ever; an emergency bill that barely addresses the emergency; a "stimulus" bill short on stimulus (is that magnetic-levitation rail line "shovel-ready"?).

What accounts for this debacle? You could start with a lack of presidential leadership. Who would have thought the missing player in the first month of the administration would be Barack Obama? He let his signature economic legislation, the stimulus, be shaped by congressional Democrats. He let internal disputes over the difficult question of how to save the banking system result in a disastrous non-announcement of a non-plan by Treasury Secretary Timothy Geithner last week. Before that, he let Geithner become Treasury secretary after cheating on his income taxes, and waived his own ethics rules to appoint a lobbyist as deputy secretary of defense--undercutting his promises to clean up Washington. He allowed Rahm Emanuel to politicize the Census Bureau, losing as a result his commerce secretary-designee, Judd Gregg, an ornament of his professed hope for bipartisanship.

In foreign policy, Obama has exerted no more control. He allowed both Super-Special Pooh-bah Richard Holbrooke and National Security Adviser Jim Jones to give interviews to the New York Times and the Washington Post, respectively, touting their own importance and presenting the president as a distant player in the formulation of foreign policy. Meanwhile, turf wars in the State Department and the National Security Council are even more bitterly fought than usual. The tale of Holbrooke shouting at Undersecretary of State Bill Burns that he'll keep Burns waiting as long as he wants, since he (allegedly) outranks Burns, makes the Rumsfeld-Powell drama look tame.

And where is Obama amid all this turmoil? Well, he's not amid it--and he's apparently not curbing or directing it. He seems to be magnetically levitating at least a few inches above the ground, doing campaign events in swing states and in his home state of Illinois, revving up the crowds to  .  .  .  do what? To encourage congressional Democrats to support their own package? He allowed the aforementioned Jim Jones--who has a lot on his plate--to spend many hours at an international gabfest in Munich at which Vice President Joe Biden, Deputy Secretary of State James Steinberg, and Holbrooke were already over-representing the United States. Reveling in the fond attentions of the Europeans and occasionally dozing off from jet lag, Jones allowed the delegation to send dangerously ambiguous signals about the U.S. commitment in Afghanistan.

Politically, Republicans are relieved by Obama's weak start. A well-crafted stimulus could have split Hill Republicans. It could also have exposed intellectual disarray on the right over the financial crisis. But Obama allowed the GOP to dodge that bullet and begin the term with a reinvigorating series of intellectually successful assaults on the stimulus bill. A strong message on Afghanistan from the administration would have won the support of Republican hawks--and might have caused other Republicans foolishly to move in a semi-isolationist direction, provoking another internal GOP dispute. Withdrawing Geithner's nomination would have elevated the new president above the last eight years of Republican-dominated Washington business as usual.

So Republicans have some reason to cheer. But not much. The country needs a president capable of exercising leadership at home and abroad. Barack Obama has had a charmed career. He's been the magnetic-levitation train of recent American politics, skimming over the surface at great speed without having to slog through the mud that slows down and climb over the boulders that trip up normal politicians. But now he's president. The charm is wearing off. It's time for him to stoop to govern.

2b) The Welfare Issue is Alive, Alive!


A Times of London story highlights worries about the Thermidorian welfare reform backsliding in the stimulus bill. Sample:

1) Douglas Besharov, author of a big study on welfare reform, said the stimulus bill passed by Congress and the Senate in separate votes on Friday would "unravel" most of the 1996 reforms that led to a 65% reduction in welfare caseloads and prompted the British and several other governments to consider similar measures.

2) I get an "Even ... liberal blogger" cite. Hahaha. Take that, Even the Liberal New Republic.

3) But the reference to liberalism isn't irrelevant, because the now-undermined welfare reform was the key to rebuilding confidence in (liberal) affirmative government. As Bill Clinton recognized, voters may well have been willing to let government spend, but they didn't trust old style liberals not to spend in actively destructive ways, like subsidizing an isolated underclass of non-working single mothers with a no-strings cash dole. It's a 75-25 values issue. Work yes. Welfare no. Even if welfare spending was only a tiny portion of the liberals' spending agenda, it poisoned the rest of it. Only when Clinton's New Democrats put an ostentatious "time limit" on welfare and required work did they regain the public confidence necessary to increase other kinds of spending (on work-related poverty-fighting benefits like the Earned Income Tax Credit, day care and Social Security, for example.)

A re-emerging "welfare" issue is a potential killer, in other words, for Obama's big remaining plans, especially health care. If Dems seem determined to reinstate dependency--or at the least blind to the dangers of dependency--voters aren't going to trust them to spend trillions on universal health insurance and fortified pensions. It's hard to believe Obama doesn't realize this.

4) If not, he may soon. I don't think the debate about welfare has been settled by the stimulus' bill's passage. I think it has just begun. I'm not saying this in a morale-maintaining way--"this fight is not over," "Where do we go from here," etc." I mean that, in fact, there has so far been no debate about welfare the way there has been a debate about pork and Keynesian spending. Before the stimulus bill passed, its welfare provisions were hardly mentioned in the NYT and WaPo. They were just bubbling up from The Atlantic's 's website to a Newsday blog last Friday, as Congress was voting.

Now that the bill has safely passed, even the liberal MSM may feel the obligation to mention them in public. Maybe even in actual print. Reporters have to cover something. More on pork? Welfare seems fresher.

5) In any case, the rump Congressional GOP and talk radio conservatives can force their hand. Why should opponents of the welfare-expanding provisions stop harping on them? Has Obama been asked about his welfare un-reform at a press conference yet? I don't think so. He will have more press conferences. It won't be an easy question to answer. (Reporters could also ask his HHS secretary ... Oh wait. Never mind.)

Welfare is a liberal sore spot that, if Republicans play it right, could become a bleeding open wound for the administration. Voters probably thought they'd settled the dole-vs.-work issue back in 1996. Obama will be fulfilling the crude GOP stereotype of his party if he even waffles on reopening it.

Remember that Newt Gingirch rode the welfare issue to power after haranguing about "the liberal welfare state" for a few election cycles. The new welfare debate, if it happens, won't necessarily be that prolonged. The main question is whether the Administration can effectively paper over the meaning of what's in the stimulus. If not, Congress is still in session. It seems to me there is a real chance for Republicans to get it to "revisit" that part of the bill, as they say in Washington. Obama may decide he needs to excise the most poisonous part of the stimulus to save the rest of his New New Deal.

P.S.: No, the stimulus bill doesn't fully unravel welfare reform--after 1996, welfare is no longer an individual "entitlement," for one thing (a term or art that triggered a whole slew of court-enforced rights). The time limits and work requirements are still at least formally in place. States can still do what they want, in theory, within much broader limits than under the old AFDC program. Many states, with little money to spare, may still refuse to try to expand their caseloads (even if they now have an 80% federal subsidy to do it). A debate on the issue might, in fact, help ensure that states don't go crazy and recreate the bloated and socially disastrous welfare caseloads of the three decades before 1996.

More important, the debate would stop the Money Liberals in the Washington "antipoverty community"--e.g., Peter Edelman and the Center on Budget and Policy Priorities crowd-- before they can complete the rest of their agenda, which does involve unraveling welfare reform (eliminating work requirements, for example). Preserving Clinton's biggest domestic achievement isn't something you should want "even" if you're a liberal who believes in affirmative government. It's something you should want especially if you're a liberal who believes in affirmative government.

2c) A multilevel disaster:Stimulus bill's contents, handling could not be more disheartening

- The conventional media wisdom – in the form of The Associated Press – has already weighed in on the $787 billion economic stimulus bill approved Friday by Congress. It's a “big win,” AP concluded, on the “signature initiative of the fledgling Obama administration.”

That may be the view now. In time, however, we fear the measure will prove an epic mistake, both for its contents and its handling.

There is no question that in this deep recession, some economists believe heavy government spending is the only way to jolt the economy back onto track before millions more jobs are lost. There is also no question that millions of Americans think Barack Obama is right to chart a sharply different course than that of George W. Bush.

But the problems with the 1,000-plus-page bill are legion. The most basic flaw is that many of its projects costing tens of billions of dollars cannot be started for several years, meaning they will yield no short-term stimulus. It is outrageous to pass the tab for these projects on to our children and grandchildren.
Another unforgivable flaw is how the bill makes huge changes on major national policies without any significant debate. One provision guts the 1996 welfare reform law, which reduced caseloads by 70 percent. Instead, individuals will again be entitled to unlimited lifetime benefits without work requirements and, amazingly, states will have financial incentives to increase caseloads.

Other provisions appear to sharply increase the federal government's role in health care by establishing a national database of Americans' medical records and by monitoring every hospital's treatment standards on cost-containment grounds.
Defenders of the health provisions say these descriptions are inaccurate. But that brings us to the bill's final unforgivable flaw: Despite its importance and huge costs, it was enacted in such haste that no one has a firm handle on its contents and their consequences.

Given Barack Obama's constant vows to oversee the most open, transparent government in history, this is unconscionable. If this is a victory, we fear it will be a Pyrrhic one – both for our new president and the nation.

3) University Officials Struggle to Explain Israeli Divestment Moves

school's board of trustees voted Feb. 7 to shift as much as a quarter of its investment portfolio after complaints from a group called "Students for Justice in Palestine (SJP)." The group wanted Hampshire to divest its investments in six companies that do business in Israel.

The SJP wasn't buying it. It issued a statement hailing the move as "the first of any college or university in the U.S. to divest from companies on the grounds of their involvement in the Israeli occupation of Palestine."

Jerusalem Post reported the trustees' action would attract widespread attention. "Such a move by the small Massachusettes college would have dramatic symbolic power, as Hampshire was the first US college to divest from the apartheid regime of South Africa in the late 1970's."

Key issues casts Hamas as "[a] vast social organization" with a "militia established to fight Israeli troops in the occupied territories." It makes no mention of Hamas terrorism – its campaign of suicide bombings targeting Israeli civilians, its incessant rain of rocket fire on Israeli cities or assassinations of Fatah members. Instead, it claims "Hamas officials have often stated that they are ready for a long-term truce with Israel during which time final status negotiations can occur."

The Case for Israel and most recently The Case Against Israel's Enemies: Exposing Jimmy Carter and Others Who Stand in the Way of Peace, told Inside Higher Ed that he will organize a campaign to cut off donations to Hampshire if the decisions stand. Anything that allows SJP to claim victory is unacceptable.

The school did issue a statement sent to alumni, parents and donors. The i=vestment changes were triggered by SJP concerns.

3a) Can Israel make it alone?
By James Lewis

In 1938 the West abandoned Czechoslovakia and Poland to Nazi aggression, signaling so much weakness that Hitler immediately grasped that he could now send his tanks against France and the rest of Europe. At Yalta, in 1945, the United States and Britain abandoned Eastern Europe and half of Germany to Stalin's armies. China was left to Mao Zedong, who ended up killing an estimated 40 million of his own people in various utopian massacres. In 1975 we left Vietnam and Cambodia to the tender mercies of Pol Pot and Ho Chi Minh, poster kids of the American Left. Several million dead people later, in 1979, Jimmy Carter abandoned Iran to Ayatollah Khomeini and his torturers, one of whom is now President of Iran. Later this year Iran may explode its first bomb. The Obama administration will stand by and smile.


Now the US and our allies cannot control everything in the world, not by any stretch of the imagination. We were able to defeat Soviet imperialism with a true bipartisan consensus, from Truman to Reagan. But that took half a century. It also took tens of millions of clear-thinking Americans, Europeans and Asians, who were willing to recognize evil and stand up to it. Still, our record of standing by besieged allies is decidedly mixed, especially when Democrats take power. Barack Obama is no Harry S Truman.


Israel's planners have to be thinking that with Obama and his crowd in power, the United States may simply pull out the rug from the democratic and modern state of Israel.


Caroline Glick of the Jerusalem Post has listed some of the moves that have already been made by America-hating regimes -- just in the first weeks of the Obama Presidency.


She writes,


Since coming into office, Obama has repeatedly tried to build an alliance with the "newly emboldened" Russian bear. A week after entering office, he announced that he hoped to negotiate a nuclear disarmament agreement with Russia that would reduce the US's nuclear stockpiles by 80 percent. ... Responding to these American signals, the Russians proceeded to humiliate Washington. Last week President Dmitry Medvedev hosted Kyrgyzstan's President ... in Moscow. After their meeting the two announced that ...Kyrgyzstan will close the US Air Force base at Manas which serves American forces in Afghanistan.
Clear enough, right? But not to our media, who just haven't bothered to notice, choosing instead to stage the most butt-kissing display of presidential worship in history.


Last Friday, the Pakistanis tested Obama. The Supreme Court freed Pakistan's Dr. Strangelove -- A.Q. Khan -- from the house arrest he had been under since his nuclear proliferation racket was exposed by the Libyans in 2004. ... Khan's release casts a dark shadow on Obama's plan to dismantle much of America's nuclear arsenal, because with him free, the prospect that Pakistan is back in the proliferation business becomes quite real. ...


Pakistan's open contempt for the US and its weakness in the face of the Taliban's takeover of the country has direct consequences for the US's mission in Afghanistan ..... This week the Taliban bombed a bridge on the Khyber Pass along the Pakistani border with Afghanistan that served as a supply line to US forces in Afghanistan.


You probably didn't hear that on ABC News Tonight.


How about Iran?


Obama came into office waving an enormous olive branch in Teheran's direction... (But) the regime has become more outspoken in its hostility toward the US. ... . It has announced it will only agree to direct talks with Washington if it pulls US forces out of the Middle East, abandons Israel and does nothing to prevent Iran from acquiring nuclear weapons. ... In all of its actions, Iran has gone out of its way to embarrass Obama and humiliate America. And Obama, for his part, has continued to embrace Teheran as his most sought-after negotiating partner.

Apparently if somebody spits right in your face and you pretend not to notice, it's just as if it never happened. That's not true in Southside Chicago, and it's not true in the Middle East. It only works that way in the liberal imagination.


Just look at the world. Putin is arm-twisting the Ukraine. He has cut off natural gas supplies to Germany and its neighbors in the middle of a bad winter. He is now in control of all the pipelines that supply Germany --- which is constantly sabotaged by its own Greens, who refuse to develop nuclear power plants.


And the US? Obama doesn't want to know. Neither does Hillary, who just flew off to Asia. Nor does Joe Biden, who now competes with Hillary and the National Security Council for control over foreign policy. The President is busy trying to peddle a trillion dollar payoff to Democrat Machines all over the country. Americans seem to be in a daze.


We are being tested by the bullies in the world. We are failing all their tests so far. Bullies keep testing and testing until they meet resistance, and there is no hard muscle in this flabby administration. It goes against their most cherished beliefs.


If you look at the world the way Israel must be doing, the question is, can you survive with a flabby America, or even with an America that turns against you?


The basic answer is "Yes," but at a stiff price. Israel is a fairly advanced nuclear power, and no such power has ever been overthrown by any other. The risk is just too great. Nuke-armed Pakistan is always on the edge of crumbling, and it is now believed that its intelligence service helped Islamic terrorists who gunned down hundreds of civilians in Mumbai a few months ago. India may threaten to retaliate, but it can't do much in the face of Pakistan's missiles armed with weapons of mass destruction. Pakistan is therefore using its nuclear power to create a safe haven for Islamic terror assaults on the Hindu nation next door.


After 9/11 the Pakistan government was sufficiently afraid of George W. Bush to allow American strikes against Al Qaida on its territory. But Pakistan has pulled back since General Musharraf was driven from power -- in good part by American pressure, along with outrageous and ignorant public insults from Barack Obama and Hillary Clinton. So Musharraf is gone, and the Pakistan military and terror-support apparatus is now free to keep attacking majority-Hindu India. It may be their way of keeping their own militants under control. Or maybe they just believe in sticking it to the infidels, wherever they may be.


This is not, as the Obama administration would like to believe, just a quarrel about the Kashmir. It's all part of the worldwide jihad -- like communism and Nazism, Islam is inherently imperialistic.


When Iran gets its bomb, the Mullahs will feel free to sponsor terrorism in Saudi Arabia, as Ayatollah Khomeini did, or wherever they can stir up trouble in the Arab world. Iran's proxies have been launching missiles at civilians in Israel for years. They came close to hitting the nuclear power plant at Dimona in this last round, as much of a red line for Israel as anything imaginable. Next time they could easily hit that plant. What would Obama do?


The death of Israel is only a part of what the Mullahs want; they really crave control over Mecca and Medina, the holiest cities in Islam. The Saudis have ruled Arabia for only a hundred years, a fleeting moment in time by the millennial reckoning of fanatics. Why should the Arabian Peninsula be dominated by the despised Sunni Arabs, when seventy million Shiites in Iran are only fifty miles across the Gulf, and will soon be armed with nukes? The Persian Empire never stopped at the Gulf. Why should the new Shiite Caliphate stop there?


That's why the Saudis are looking to make peace between the Arabs and Israel. It is also why they financed Pakistan's nuclear program, and why they will do the same for Egypt when the time comes. They see a deadly threat to their survival, even if the American government doesn't.


So Iran's nuclear weapons will be used to create impregnable havens for terror groups. If Obama allows Iran to dominate the Gulf to "satisfy its ambitions to become a regional power," as the Left likes to say, you can fully expect the Mullahs to take the logical next step.


Nations have no permanent friends, only permanent interests -- like survival. If the United States abandons the Jewish State, Jerusalem will have to seek new alliances. It may feel driven to conduct an open nuclear test if Iran does. That's what happened with India and Pakistan ten years ago. Israel is working with India -- and so far, the US -- on advanced antimissile defenses. India has a natural affinity with the Israelis, as a majority-Hindu state that has been fighting jihadi terror since 1948. Historically, India experienced constant aggression from Muslim powers. China and Russia have a long horror of Islamic invasion. If survival is at stake, expect Israel to make whatever alliances it can.


Other nations that rely on us --Taiwan, Singapore, Poland, the Czech Republic, the Ukraine, Georgia, the Baltic States -- will also see the handwriting on the wall. Not all of them will collapse.


Western Europe may be crumble to domestic Muslims, as the Geert Wilders case suggests. But Russia has a thousand years of fighting Islamic aggression, and has just carried out a vicious war against jihadi rebels in Chechnya. China also fears Muslim invaders and rebels. Even Australia is showing real spirit in the fight against this very ancient fascist ideology.


In a decade or so civilized nations will have adequate anti-missile defenses, and better protection against smuggled dirty bombs. Bio-identification will make it easier to pinpoint dangerous people trying to enter the country. But we may have to pay a big price in individual freedom.


These calculations are surely going through the minds of politicians and strategists around the world. If the Obama administration walks away from democratic allies, we will see a fast reshuffling of the alliances we've seen since World War I.


Obama is the most radical leftist ever to occupy the White House. He will teach us many lessons, but he is not likely to sway American culture for very long -- including our admiration for small and besieged democracies. If anything, he will end up reminding a new generation why the United States fought the Cold War. There will come a time for another Ronald Reagan, a president who combines our deepest values with a coherent national strategy.


But that's over the long term. In the next four to eight years Israel will have to think very hard about how to survive without the United States.

4) The Real State of the Union
By Randall Hoven

It is almost State of the Union time. So what is the real state of our union's finances, specifically our federal budget? Are we going to hell in a hand basket? Or do we have nothing to fear but fear itself? I crunch the numbers so you don't have to.


For fair comparisons over time, I provide numbers as a percentage of our economy, specifically Gross Domestic Product.


The Past. Let's start with what we know: the past. Below is a breakdown for federal spending in 2007, as a percent of GDP, in which total outlays were exactly 20% of GDP . (State and local government spending was another 17.4% of GDP, bringing our total government spending to 37.4% of GDP, above that of Switzerland, Australia and Ireland, but slightly below the OECD average of 40.4%.)



Retirement/disability 5.11


Medicare/Health 4.70


National Defense 4.05


Income Security* 1.86


Net Interest 1.74


Education 0.67


Transportation 0.53


Veterans 0.53


All else combined 0.81



* Excludes federal retirement and disability, but includes unemployment compensation, housing assistance, and food and nutrition assistance.


On the income side, the federal government raised 18.8% of GDP, leaving a deficit of 1.2% of GDP.


Some of you might already be surprised. You might think foreign aid, for example, is breaking us, but it is only 0.11% of GDP. Agriculture is 0.13%. The space program is 0.11%. In fact, retirement and disability programs (primarily Social Security), health care (primarily Medicare), national defense, and net interest amounted to 78% of the 2007 federal budget and 15.6% of GDP.


On the debt side, our "total" federal debt in 2007 was 65.5% of GDP. However, much of that was simply IOUs from one side of government to the other. The net debt "held by the public" was 36.8% of GDP. That number, for my money, is the one that matters.


At this point, let's get Social Security straight. You might have heard of a "trust fund." It doesn't exist. The "trust fund" is simply IOUs from the "general" side of government to the Social Security side. But every year, so much money goes into the government from payroll taxes and so much money comes out of it in Social Security checks. These are just two more streams of government income and outgo.


Overall, 2007 was a pretty good year, budget-wise. Since World War II, income has been around 18% of GDP. For the last 25 years in particular (1983-2007), it averaged 18.3%. So 2007's 18.8% was in fact a bit above average. (Note to liberals: tax rate cuts were not the problem.)


On the spending side, we have averaged almost 20% of GDP since World War II. For the last 25 years it averaged 20.8%. So 2007 was about average, and in fact on the low side compared to the previous 25 years. (Note to conservatives: spending has not really been that bad. Note to liberals: our wars in Iraq and Afghanistan did not break us. Spending over all of President George W. Bush's years almost exactly matched the post-WWII average.)


The deficit averaged 1.6% of GDP since World War II, and 2.5% over the last 25 years. So again, 2007, at just 1.2%, looked pretty good. Over all the Bush years, it averaged 1.9%, also not that shabby.


The debt held by the public has averaged 36.2% of GDP since 1960, and was even higher before that. In the last 25 years it averaged 40.5% of GDP. So again, 2007's 36.8% was near average and actually on the low side of the last 25 years.


You would have to say, at the end of 2007, that the federal budget looked pretty good. Income, outgo, deficit and debt were all near post-war averages or even on the good side of average. And 2007 was not an oddball year. The entire Bush years, 2001 through 2007, were close to average in these respects.


The Present

That was the good news -- 2007. It has been all downhill since. We are now talking in units of trillions of dollars. A trillion dollar bailout. A trillion dollar stimulus. A trillion dollar deficit. We are looking at trillion dollar deficits in both 2008 and 2009.


All to cure a recession that so far has amounted to a drop of 1.1% in real GDP in the second half of 2008. Real GDP grew in the first half of 2008. (My opinion: we are using nukes to kill a tick. This recession started as a mild downturn, but our government's reaction to it is what is spooking the markets, and the real economy, now.)


How much is a trillion dollars? A little over 7% of GDP -- over a third of the entire federal budget of 2007.


Now things don't looks so good. As a deficit, 7% of GDP is even higher than those of the Great Depression. In fact, our deficit never exceeded 6% of GDP since 1930, except at the peak of World War II itself.


And when we add two trillion to our debt, the public will be holding over 50% of GDP in debt. That is more than at any time since before 1960. The only good news is that Japan and Germany, for examples, have it even worse: 182% and 65%, respectively, in 2007. (Which might explain why the US still draws investment from abroad; we're not great, just better than our competitors. But how much longer can that last?)


The Future, the Rosy Scenario

Let's pretend our current recession ends soon, in 2009, and the trillion-dollar games come to an end with it (extremely optimistic conditions). Without any of that trouble, we still have more people retiring and spiraling medical costs. Social Security and Medicare are going broke. How bad?


The Social Security Administration itself puts it this way:


In 2007, the combined cost of the Social Security and Medicare programs represented about 7.5 percent of GDP. Social Security outgo amounted to 4.3 percent of GDP in 2007 and is projected to increase to 5.8 percent of GDP in 2082. Medicare's cost was smaller in 2007-3.2 percent of GDP- but is projected to surpass the cost of Social Security in 2028, growing to 10.8 percent of GDP in 2082 when it will be 85 percent larger than Social Security's cost. In 2082, the combined cost of the programs would represent 16.6 percent of GDP.


Now 2082 might seem like a long way off, but the SSA's report includes data from here to there. These entitlement programs are expected to grow much faster than the economy even in the near term. While in 2007 they combined to 7.5% of GDP, they will require 12.3% of GDP in 2030. That means an extra 5% of GDP worth of government spending in only a few more years. That is one quarter of the entire current federal budget.


Where will we get it? We're running trillion dollar deficits now.


I calculated future federal budgets for this rosy scenario using pretty simple arithmetic and assumptions. The assumptions were


The current recession and banking difficulties are solved in 2009, with the effect being to bump up our debt (held by the public) from 37% to over 50% of GDP by 2010.
Social Security and Medicare grow as described by the Social Security Administration. Other federal retirement and disability programs will grow at the same rate as Social Security. Other federal health programs will grow at the same rate as Medicare.
National Defense spending will be cut from just over 4% of GDP to 3% of GDP.
All other programs will remain flat as a fraction of GDP, at 4.4% of GDP.
Interest payments will be proportional to outstanding debt, in the same proportion as in 2007.
Receipts will remain at the level of the average of the last 25 years, at 18.3% of GDP.


The results are presented in the table below, where 2007's numbers are actual, the rest estimated.


Future Federal Budget (% of GDP) In A Rosy Scenario

Budget Area
2007
2012
2016
2020
2030

Retirement/Disability
5.11
5.37
5.82
6.30
7.13

Medicare/Health
4.70
5.10
5.65
6.56
9.25

National Defense
4.05
3.00
3.00
3.00
3.00

All other areas
4.40
4.40
4.40
4.40
4.40

Interest
1.74
2.54
3.04
3.87
8.18

TOTAL Spending
20.00
20.41
21.91
24.13
31.96

Receipts
18.80
18.30
18.30
18.30
18.30

Deficit
1.20
2.11
3.61
5.83
13.66

Debt
36.80
55.81
67.88
87.73
186.64



This table is based on very austere budgets, including a 25% cut in defense spending and flat spending in all areas other than retirement, disability and health. Yet the situation is unsustainable. After 2020, the wheels come off the wagon (deficits over 10% of GDP and debt over 100%).


Look at even 2020, with a deficit of almost 6% of GDP, before things get really bad. Where would you cut?


Defense Spending

Even if we eliminated national defense spending entirely by 2020, we would still have a deficit of almost 3% of GDP, a high number - the equivalent of over $400 billion in today's dollars.


I should also add that today's 4% of GDP going to defense is historically low already. It was at or above that level from 1941 through 1994 - over half a century. It stood at 1.7% when Pearl Harbor was attacked. It stood at 3% when we suffered the 9/11 attacks. There is a good argument that letting it go below 4% leaves us vulnerable and encourages our enemies. Even the Communist Party USA is proposing cutting defense "only" 50% .


Non-Defense Discretionary Spending

We could eliminate all such spending entirely and still have a 2020 deficit of 1.8% of GDP, the equivalent of over $250 billion in today's dollars. Take a look at what such spending covers:


Agriculture
Community and regional development
Education
Energy
General government
Housing and commerce
International affairs
Judicial system
Natural resources and the environment
Space and science
Transportation
Unemployment compensation, housing assistance, food and nutrition assistance
Veterans.


To eliminate the 2020 deficit by cutting only the above discretionary spending areas and national defense combined would take a cut of about 70% in all those areas. Republicans get into trouble for simply not letting such programs grow fast enough. A 1% cut is considered "draconian." We are talking of a need for cuts of well over half of almost everything the federal government does outside of retirement, disability and health programs.


The problem is obviously not just "earmarks" or "fraud, waste and abuse."



Revenue

So what if we try to raise revenue over that 18.3% of GDP figure? Well, we can try, but it's never been as high as even 21% of GDP in our nation's history. Since World War II, the top marginal income tax rate has varied between 28% and 92%, yet the total amount of money actually collected by the federal government has consistently averaged about 18% of GDP, staying between 16% and 20% in all but one year since 1950 . In the last 25 years, 1983 through 2007, the average was 18.3%.


The federal government needs to collect over 24% of GDP in 2020, and over 30% by 2030, to avoid a deficit. As I stated, it has never done such a thing, not even at the peak of World War II (peaking at 20.9% of GDP).


Then What?

The real money and the real problems are in the Social Security and Medicare/Medicaid type programs -- the entitlements. Social Security is less scary; it is projected to go from 4.3% to 5.8% of GDP in the next 74 years. That's just a 1.5% of GDP type problem. Not pleasant, but we should be able to handle that.


The biggest problem, and therefore the biggest payoff area, is in health spending. Health spending continues to grow faster than inflation, faster than other areas of the economy and even faster than Social Security. We already spend much more on health care than any other country in the world, whether measured on a per capita basis in real dollars or as a fraction of GDP.


Our governments (federal, state and local) already spend more than most other countries that provide universal health coverage, yet we still do not have universal coverage .



We have a health care problem. But it is not a "coverage" problem. It is a cost problem.


If there is just one priority in government finance, it must be health care.


Obama and "Nixon Goes To China"

We have less than 10 years to get our mess straightened out. In that time we need to do something drastic with health care, meaning getting its costs under control. We also need to keep a lid on discretionary spending and even cut it. Social Security payroll taxes might need to be raised a bit by 2020, or benefits cut.


In short, to avoid financial catastrophes such as government default and bankruptcy that would otherwise come in the 2020-2030 time-frame if not before, President Obama must make some bold moves. And in the opposite direction of his fan base.


Even the "rosy scenario" described above assumes keeping a lid on most spending after this year, and already includes severe cuts in defense spending.


If a President Obama merely muddles his way through, adhering to this rosy scenario, we will still see ugly deficit and debt numbers. The trouble is, not ugly enough. Obama and the Democrats could blame 3% deficits as the hangover from the mess inherited from President Bush, and do nothing to address the real problems. The trouble is that the numbers don't become truly alarming until after 2016.


Politically, President Obama could get away with it. Maybe even through two terms.


Ironically, President Obama could really be our savior. In fact, he might be the only person who could get away with what needs to be done. We are talking cutting government programs and raising regressive taxes. No Republican could do this; the electorate would hand him his head.


We should see soon which path President Obama takes:


(a) More spending and taxing, as well as massive public works projects, single-payer health care, the "Employee Free Choice" act, global warming hysteria, weakened defense, the return of the "Fairness Doctrine", etc.


(b) A political muddling through, racking up deficits in the 3% of GDP range by 2012 to 2016, but addressing no long term problems.


(c) Doing a "Nixon Goes To China" to reduce government spending. Health care reform that reduces costs. Social Security benefit cuts and/or increased payroll taxes. Real cuts in discretionary programs. And a very quick end to bailouts and stimuli.


And all this is predicated on our current recession being fairly mild and ending this year.


Optimistic? I'm not. I think we'll probably get choice (a), with (b) as a possibility. In either case, Obama's successor will have his or her work cut out for him or her. If a miracle occurs and Obama picks path (c), it won't be apparent for at least another year or two, assuming we get through this recession OK.


What we need are severe limits on government spending and real reform of entitlements, especially health care, to reduce costs. Yet both Barack Obama and John McCain completely ignored these issues in the presidential campaign. In fact, Obama promised new and expanded programs and trillion dollar bailouts and stimuli. McCain promised about the same, but without earmarks.


Maybe that's why the S&P 500 is about 35% lower than it was a year ago.

5) IDF: World duped by Hamas's false civilian death toll figures
By Yaakov Katz

Four weeks after the cessation of Operation Cast Lead, the IDF finally opened its dossier on Palestinian fatalities on Sunday for the first time, and presented to The Jerusalem Post an overview utterly at odds with the Palestinian figures that have hitherto formed the basis for assessing the conflict.

While the Palestinian Center for Human Rights, whose death toll figures have been widely cited, reports that 895 Gaza civilians were killed in the fighting, amounting to more than two-thirds of all fatalities, the IDF figures shown to the Post on Sunday put the civilian death toll at no higher than a third of the total.

The international community had been given a vastly distorted impression of the death toll because of "false reporting" by Hamas, said Col. Moshe Levi, the head of the IDF's Gaza Coordination and Liaison Administration (CLA), which compiled the IDF figures.

As an example of such distortion, he cited the incident near a UN school in Jabalya on January 6, in which initial Palestinian reports falsely claimed IDF shells had hit the school and killed 40 or more people, many of them civilians.

In fact, he said, 12 Palestinians were killed in the incident - nine Hamas operatives and three noncombatants. Furthermore, as had since been acknowledged by the UN, the IDF was returning fire after coming under attack, and its shells did not hit the school compound.

"From the beginning, Hamas claimed that 42 people were killed, but we could see from our surveillance that only a few stretchers were brought in to evacuate people," said Levi, adding that the CLA contacted the PA Health Ministry and asked for the names of the dead. "We were told that Hamas was hiding the number of dead."

As a consequence of the false information, he added, the IDF was considering setting up a "response team" for future conflicts whose job would be to collect information, analyze it and issue reports as rapidly as possible that refuted Hamas fabrications.

Basing its work on the official Palestinian death toll of 1,338, Levi said the CLA had now identified more than 1,200 of the Palestinian fatalities. Its 200-page report lists their names, their official Palestinian Authority identity numbers, the circumstances in which they were killed and, where appropriate, the terrorist group with which they were affiliated.

The CLA said 580 of these 1,200 had been conclusively "incriminated" as members of Hamas and other terrorist groups.

Another 300 of the 1,200 - women, children aged 15 and younger and men over the age of 65 - had been categorized as noncombatants, the CLA said.

Counted among the women, however, were female terrorists, including at least two women who tried to blow themselves up next to forces from the Givati and Paratroopers' Brigades. Also classed as noncombatants were the wives and children of Nizar Rayyan, a Hamas military commander who refused to allow his family to leave his home even after he was warned by Israel that it would be bombed.

The 320 names yet to be classified are all men; the IDF has yet complete its identification work in these cases, but estimates that two-thirds of them were terror operatives.

The CLA gave the Post the names of several fatalities who it said had been classified by the Palestinians as "medics," but who it stated were Hamas fighters, including Anas Naim, the nephew of Hamas Health Minister Bassem Naim, who was killed during clashes with the IDF on January 4 in the Sheikh Ajlin neighborhood of Gaza City.

Following the clashes, the Palestinian press reported that Naim was killed and that he was a medic with the Palestinian Red Crescent. The Gaza CLA, however, produced photographs of Naim posing holding a rocket-propelled grenade launcher and a Kalashnikov assault rifle that had been posted on a Hamas Web site.

Levi stressed that on no occasion were civilians deliberately targeted, and that every effort was made to minimize civilian casualties.

Work on the death toll list was started during Operation Cast Lead under Levi's direction. A special team was set up and led by an officer in the CLA who coordinated efforts with the Shin Bet (Israel Security Agency) and worked from statistics and information on the dead from the Hamas Health Ministry, the media in Gaza, and other Palestinian and Israeli intelligence sources.

Much controversy and confusion has surrounded the number of Palestinian noncombatants killed during Israel's three-week campaign against Hamas, with the IDF and the Shin Bet refusing to release official numbers to refute Hamas allegations. Israeli estimates were intermittently leaked to the press but not published in official press statements.