Obama, Democrats and Their Cialis Budget!

So what's a little rocket atack while having dinner with the kids? It's all in a day's fun and brought to you by Jimmy Carter's fellow freedom fighters! (See 1 below.)

Hamas cover up - they steal U.N. blankets! Let em eat cake! (See 2 below.)

World leaders should resurrect the ship FDR, Chruchill and Stalin met on in Yalta, rename it "Ship of Fools," then call a meeting to negotiate with the Iran's leaders. Would give Hillary an opportunity to appear presidential. (See 3 below.)

World deflates because governments inflate. Obama and his Democrat friends have discovered how to creat a Cialis Budget! (See 4 and 4a below.)

Honestly did not think being honest was a qualification for higher office. This from The Economist! Oh, it's only the consequences of inexperience? Or maybe its agenda building with abandon. The boomerangs have begun and will only get bigger and ouchier!(See 5 below.)

To my brethren: We got three demon problems! An Arab looks at his world and sends a message. (See 6 below.)

There must be a place to put all this mounting debt? Why not build a big warehouse that would employ 5 million workers? Tom Coburn expresses doubts.(See 7 below.)

Jimmy Carter could be president of this South African dock worker's union. How strange. They don’t want to interfere in Darfur, Zimbabwe or The Congo……But Israel is a different matter………. Harbor hypocrisy? (See 8 below.)

Daschle is gone but the culture that bred the problem remains. (See 9 below.)

Dick Armey and I think alike about the need for Hayek! (See 10 below.)

Some "O" Administration tag lines:

"Oh, I have to pay my taxes too!"
or
"Paying my own taxes is a ticket to spending your taxes."

Dick



1) LONG DAY'S JOURNEY INTO SDEROT
By Richard Friedman

SDEROT -- There are places in the world, where a city's name has become synonymous with something larger than itself: Munich, New Orleans, Chernobyl. So, too, is the case with Sderot, a modest city in southern Israel about two miles from the Gaza Strip.

Sadly though, for all that has happened to the residents, there are many who've not heard Sderot's story. It's a story that involves eight years of lives lived around and despite more than 10,000 rocket attacks. Lives where 15 seconds -- the time you have to get to a shelter -- can be the difference between survival or death.


Traveling to Sderot from Tel Aviv, I find myself thinking about my last visit to Sderot. The barrage of rockets was already taking its toll on the residents in 2005, particularly the children, and here I am again and the suffering continues.

I find myself wondering what life had been like for these young kids and their families the past three and a half years. I can't fathom it; it is too depressing. The only thing that makes me feel good is the knowledge that over the past few years our Birmingham Jewish Federation has provided hundreds of thousands of dollars to help the families of Sderot.

As we arrive in Sderot, our guide, with staccato rapidity, begins saying "there's one" over and over. I quickly realize he is talking about bombshelters that have been constructed throughout the city. Every bus stop is fortified, schools are reinforced. Life centers around how far from the nearest shelter you are at any given time and when the next "Red Color" alert will come.

TRAUMATIZED FOR LIFE

Our first stop is at a facility known as the Anxiety Relief Site, which is helped with Federation funds. This facility provides the primary treatment for those mentally-traumatized by life under constant attack. "After eight years, the population is mentally crippled," a doctor who works there explains. She also reflects on the recent cease-fire and its failure to stop the attacks. The people of Sderot had hoped their nightmare would be ending, but now "everything's coming back -- it's very frustrating."

The impact on the children is the hardest to heal. It's a hard reality as we are reminded that children eight and under have never known any other situation. The continued stress is manifested in behavioral and developmental issues these children will deal with the rest of their lives. They have lost faith in their parents' ability to protect them; they won't sleep alone; they won't go to the bathroom alone.

To punctuate what we heard at the relief site, we walk a short distance to a pre-kindergarten hit recently by a rocket. I watch a group of young children playing and it makes me realize these are the kids the rockets are meant to kill. The caregivers describe how despite their young ages, the kids know what to do reflexively when given a warning that a rocket is headed their way. "It's almost a Palovian response," says an adult at the center. "They raise their hands in the air, anxious for us to take them to a shelter."

INSTRUMENTS OF DEATH

We cross back across the street to our next stop, the Sderot Police Station, where we see a collection of 200 Qassam and Grad rockets that have landed in Sderot the past few weeks. They are hideous-looking instruments of death. Even as we view the rockets, the Israeli army official with us reminds our group that "the only way to understand is to be here during a rocket attack and even then you can't understand."

From the police station we continue on to a local hilltop for a better view of the area. As we climb the hill and face the Gaza Strip, this same army official asks us to turn around. Behind us the city of Sderot is perched below. We're reminded that almost 1,000,000 people throughout southern Israel are within a 15 to 60 second range of incoming rockets.

Descending from the hill, everything seems so quiet and normal.Yet, we all know this serenity could be pierced any minute. We are only here one day; in that time it's impossible to even get a hint of what life's really like for our brothers and sisters in Sderot.

STORY OF SDEROT

To truly begin to digest what we're seeing today, faces need to be put to the situation. Those faces become very clear and memorable as we sit in the home of Laura Bialis, an American filmmaker living in Sderot.

As we watch the trailer for her upcoming documentary, "Sderot -- Rock in The Red Zone," we are struck by images of places we've been to, and seeing through Laura's lens, the realities of life in Sderot. The sound of Israeli army artillery fire a few miles away as we watch the clip reminds us that this is not just a movie, Laura's work is the reality of Sderot.

Our day culminates after 11 hours, by learning of new attacks in southern Israel shortly after our departure. We had avoided the "Red Color" alert. But how had the people we met today coped with it? We are able to return to our comfortable, safe hotel in Tel Aviv to regroup for our next day's visit to Ashkelon, another Israeli city under siege.

The people of Sderot deserve their own safe retreat, and this is where you and I come in. While the Birmingham Jewish Federation cannot stop the rockets, we can make a difference. By supporting our Federation, we can provide badly-needed services and facilities, safe schools for children, counseling for parents and trips away from the conflict zone for these youngsters during the tough times.

(Appreciation is expressed to fellow traveler Pam Ingram, of St. Paul, MN, for her help with this story.)

2) UN: Hamas seized food and blankets from needy Gazans



A United Nation spokesman on Wednesday accused Hamas police in Gaza Strip of seizing thousands of blankets and food parcels meant for needy residents.

Christopher Gunness, spokesman for the UN's Relief and Works Agency, said Hamas police raided a UN warehouse in Gaza City late Tuesday, snatching 3,500 blankets and over 400 food parcels.

"Members of the Hamas police seized by force 3,500 blankets and 406 food packages ready to be delivered to hundreds of poor Gaza families," the statement said.


Hamas and its security forces have administered and controlled the Gaza Strip since June 2007, when they routed security forces loyal to Palestinian President Mahmoud Abbas.

But UNRWA has refused to hand the humanitarian aid it has received to the Hamas-ruled ministry of social welfare. The aid is especially vital now because Gazans are facing hardship after Israel's three-week military offensive against Hamas, which left thousands homeless.

"UNRWA condemns in the strongest terms the confiscation of its aid supplies and has demanded that it is returned immediately," the UNRWA said in a statement. "UNRWA has a strict system of monitoring aid delivery and ensuring that its assistance reaches only the intended beneficiaries. Our officials were on the ground overseeing the delivery of our aid and taking all possible steps to avoid its diversion."

Gunness said Wednesday this was the first time Hamas had seized UN aid, but Israeli officials have charged that the militant group routinely confiscates supplies meant for needy Gazans.

Some 60 per cent of the 1.5 million Palestinians living in the Gaza Strip are refugees receiving aid from UNRWA.

A Hamas government spokesman was not immediately available for comment.

Meanwhile, Abbas' West Bank-based government on Wednesday annnounced a $600 million reconstruction prograM, most of which would be funded by foreign donors.

Prime Minister Salam Fayyad, who heads Abbas' Western-backed government, said the project would cover all houses destroyed or damaged during a 22-day Israeli military offensive.

"The amount of the project is e600 million. Most of it will come from donors," Fayyad said in a speech, adding that the details would be announced in the coming days.

Egypt is to host an international conference in coordination with Abbas's Palestinian Authority on March 2 on Gaza reconstruction, whose cost has been estimated at $2 billion. Saudi Arabia has said it would donate e1 billion.

Last week, Egyptian Foreign Minister Ahmed Aboul Gheit urged Europe to help with fast aid for the Gaza Strip, saying the reconstruction meeting would require damage assessments and the support of the European Union, the United Nations and others.

3) World powers urge Iran to cooperate with UN over nuclear program


Senior officials from world powers urged Iran on Wednesday to fully cooperate with the United Nations over its nuclear program and said there was a joint commitment to find a diplomatic solution on the issue.

Senior officials from the United States, Russia, China, France, Britain and Germany also said they welcomed an offer by the new U.S. administration under President Barack Obama to talk directly with Tehran over its nuclear programme.

"(We will) consult on the next steps as the U.S. administration undertakes a policy review," the powers said in a joint statement after a meeting in Germany.
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The six powers' meeting was their first gathering on the Iran question since Obama took office. A European Union official said the world powers plan to meet agin on Iran once U.S. has reviewed policy, likely in March.

On Tuesday, Iran launched the Omid (Hope) research and telecom satellite, what it called a 'major step in its space technology' timed to coincide with the 30th anniversary of the 1979 Islamic revolution that ousted the U.S.-backed shah.

The long-range ballistic technology used to put satellites into orbit could also be used for launching warheads, although Iran says it has no plans to do so.

4) Government: The One Price That's Still Rising
By Steven Malanga

Over the weekend, I paid about $2 less per gallon for gasoline than I was paying last summer. My local supermarket desperately tries convincing me it has the lowest prices around by directing me to aisles filled with sale items and private label goods. My credit card statements listing purchases from the holiday shopping season remind me just how many bargains I snagged. Even the price of medical care has been relatively flat the last few months, according to the Bureau of Labor Statistics.

And then there’s the price of government. My property taxes are going up a whopping 6.4 percent this year, a move that comes on top of similarly large increases in virtually every year since I moved into my house. Although I already live in one of the most heavily taxed states, New Jersey, our governor hasn’t ruled out further tax increases if revenues keep declining--even after an injection of federal money via the Obama stimulus plan.


Nor are we alone by any means. California legislators are haggling over exactly which taxes to increase--contemplating surcharges to their income tax (already one of the nation’s highest) and a sales tax hike. New York Gov. David Paterson proposed a mind-boggling 88 new or higher fees and taxes in his budget, including a so-called ‘obesity tax’ on soft drinks, an ‘Ipod tax’ on music downloads, and new or higher taxes on movie tickets, beer and wine, taxi rides, and massages. Other states are mulling over new or higher taxes on sodas, snacks, alcohol and, of course, cigarettes, although “butt” taxes are already so high in many states that we’ve probably entered the realm of diminishing returns. Many of these tax proposals come on top of increases last year.

As private sector workers battle joblessness, pay cuts and longer work hours, it seems particularly nasty that the one cost that is most difficult for them to escape, the cost of government, is going up steadily. Just about the only ways to ameliorate rising property taxes, for instance, are through laborious and uncertain challenges to your home’s assessment, or by moving. There’s no doubt that people do plenty of the latter, considering that the places with the steepest tax burdens also have the highest rates of outmigration. But trying to sell your home and finding a job elsewhere in an environment of rising unemployment and collapsing housing prices hardly seems like a sound strategy right now.

People will also avoid higher consumption taxes by consuming less, one reason why projections of how much a new tax will raise often overestimate actual collections. Still, the resulting shortfalls often prompt governments to raise other taxes, trapping residents in an upward spiral of taxation.

Local newspapers are now assuring residents that Washington is coming to their aid with a stimulus package that directs billions of dollars to the states. But much of this money is for specific programs, which will limit how states can use it and hence won’t offset tax shortfalls. The Milwaukee Journal Sentinel reported that the local school board there, for instance, stands to gain $88 million in school construction money it largely doesn’t need because enrollment is declining and 15 school buildings are already empty.

Moreover, you can be sure that as states ramp up new programs with some of this designated federal money, local taxpayers will be left with the tab when the stimulus package disappears. Two years from now those same local newspapers that today are telling residents that help is on the way will be filled with gloomy stories about programs that will vanish unless the state steps in to replace federal funds. Any taxpayer who has lived through a few economic downturns knows that federal aid is largely a chimera.

Although the stimulus package also contains what’s described as significant tax cuts that presumably would offset some of the local tax increases, most of this is in the form of narrow credits that many taxpayers either can’t take advantage of or will fail to tap into because these credits tend to be obscure and complicated. In any case, tax credits hardly produce the kind of relief that comes from finding extra money in your paycheck every week.

It’s not hard to see why the price of government is rising. In the midst of the sharp downturn of the private economy starting early last year, many local politicians let their budgets and workforces continue to increase. In October I observed that state and local public sector jobs were still growing—the 11th increase in 12 months. Even as the private economy contracted by some 750,000 jobs, government added 200,000 positions in that time. Today, although the overall unemployment rate is about 7.1 percent, it’s 2.3 percent in the public sector.

Now, faced with steep shortfalls, politicians are playing their usual budgetary games. In their book The Price of Government, David Osborne and Peter Hutchinson observe that state and local politicians typically rig local fiscal debates by focusing on the small percent of a budget that has to be cut in tough times. That turns budget discussions into a form of horse trading in which advocates and favored constituencies work to preserve their jobs and programs, regardless of whether they are effective or whether citizens really value them. Good governments, by contrast, (and there are vanishingly few), start with how much money they presume will be available to spend and ask, how can we best serve our citizens and accomplish what they most want us to accomplish with this money?

To govern this way, however, requires that local leaders take on the advocacy groups—from public employee unions to social service agencies to private contractors living off public works—who frame even the smallest cuts in apocalyptic terms. Not only have these groups grown ever more powerful and savvy as lobbyists for their interests, but many of our state and local legislatures are now filled with representatives of these constituencies. Their ascendance represents the triumph of the tax-eaters over taxpayers. Where they rule, the pain for taxpayers is especially acute and the economic fundamentals are often the weakest.

4a)Obama's Dangerous Bank Bailout Restoring Citi and BofA to greatness shouldn't be the goal.
By HOLMAN W. JENKINS, JR.

Team Obama is wrestling internally over the bank bailout supposedly to be introduced next week. We naturally are on the edge of our seats.


APBut let's understand something: The taxpayer already stands behind the banking system, and is on the hook for its losses in one sense or another. Moreover, that guarantee has become more and more explicit in recent months -- which is not an unmixed blessing, since such explicitness has tended to create new uncertainty among those stakeholders not specifically included in the safety net.

The main uncertainty lately has been whether the safety net includes bank shareholders as well as depositors and creditors. That uncertainty is why we have crazy gyrations in bank share prices, and yet don't have bank runs. Citigroup's shareholders only account these days for a measly $20 billion, in a bank with liabilities of $2 trillion -- yet market speculation over their fate has seemed to be driving government actions.

Here we see the downside of explicitness. By committing specific sums to given banks, policy makers only ended up inviting new speculation about what happens when those cushions are exhausted by fresh accounting writedowns. And now Team Obama seems about to recapitulate this folly with another round of explicit guarantees.

By current leakage, their plan will consist of explicit government insurance for certain bad assets and explicit purchases of other bad assets to be held by a so-called bad bank. For the months or years, then, that it takes to put the plan into effect, the market will have to speculate anew about how each bank's assets will be valued for bailout purposes.

Yet there is a solution better than trying to finalize a division of losses whose size won't be known for years to come. That solution is time, the healer of all wounds.

Remember, this is not the S&L crisis of the 1980s, when hundreds of small banks were incentivized by poor regulation to try to gamble their way out of self-made holes. Today's problems are concentrated on the balance sheets of the biggest, most visible banks. Little banks are relatively easy to close or force into mergers. Banks that are "too big to fail" aren't too big for government to manhandle in a crisis; it's just that the solution is not the same as for a small bank.

Which raises the question: Why not just leave Citi and BofA's bad assets where they are, albeit with regulators sitting at management's elbow to make sure their losses are being conservatively worked off and no wild gambles on resurrection are being taken? The losses would stay with bank shareholders, even if it took 15 years of cash flow to work them off. There'd be no perplexing muddle over how to value assets for bailout purposes. And because the shareholders' stake (much diminished) would remain intact, there'd be every incentive to manage the assets well while minimizing the risk of a bottomless mess like government has made of AIG.

But now we come to the most dangerous assumption underlying the rumored Obama approach -- the idea that we need something called Citi and BofA quickly liberated from their past mistakes so they can go back to serving as the engines of the economy.

They aren't the engines of the economy -- we have a vast and diversified financial sector. Today's real problem is a shortage of reliable borrowers, especially given the uncertainty about house prices. Washington's misguided goal, if you listen closely, seems to be turning these giant banks into public utilities to "jumpstart lending" under political duress. That is, shoveling money at an overleveraged private sector in hopes of stopping the economy from shrinking and markets from clearing.

We should keep in mind that Japan's "lost decade" wasn't so much an accident as a deliberate decision to avoid a rash of foreclosures and bankruptcies and layoffs that might disturb a somnolent "harmony." Whether or not that was the right choice for the Japanese, the U.S. is a different country, and would probably react differently, and not well, to a prolonged government-sponsored stagnation. Yet that's where the Obama bailout may be leading us.



5) The importance of being sinless: From Economist.com

To lose a cabinet appointee may be regarded as a misfortune. To lose two looks like carelessness


WHEN his transition began, Barack Obama was praised both for the smoothness of his moves and the high-powered people he had brought to unglamorous jobs. No longer. On Tuesday February 3rd Tom Daschle became the second would-be member of Mr Obama’s cabinet to step down over past sins. On the same day Nancy Killefer, who had been nominated as a “performance tsar” charged with scouring government programmes for waste, stepped aside too. Yet a third mini-scandal, over unpaid taxes, did not stop Timothy Geithner from being confirmed as treasury secretary last week.

As a senator Mr Obama championed ethics legislation, and as a candidate he promised a clean White House. One of his first acts was to sign an executive order forbidding people from leaving the administration to join the private sector and turn around to lobby their former colleagues. Good-government types cheered, although Mr Obama has since appointed a former lobbyist from Raytheon, William Lynn, to a post in the Pentagon.

Even before his inauguration Mr Obama saw a first candidate fall because of scandal. Bill Richardson, a former presidential contender himself, was nominated for commerce secretary. But the governor of New Mexico was named in an influence-peddling investigation. He maintained his innocence but bowed out to avoid embarrassing Mr Obama. This week Mr Obama nominated Judd Gregg, a Republican senator from New Hampshire, to become commerce secretary instead. The choice of a moderate Republican was hailed as another canny, bipartisan move.

But the same week has brought the withdrawal of Mr Daschle and Ms Killefer. Mr Daschle, a former Democratic leader in the Senate, was to be secretary of health and human services and the leader of Mr Obama’s efforts to pass a big reform of health care. However it emerged that he had taken the services of a round-the-clock driver and a limousine, an expensive perk for which he never paid taxes, after leaving the Senate in 2005. He also failed to report over $80,000 in consulting income on which he also owed taxes. On Monday Mr Obama “absolutely” continued to back Mr Daschle. On Tuesday morning many still thought he would be confirmed until a joint statement from the president and Mr Daschle announced that he would step down. Later in the day Mr Obama admitted that he had “screwed up” in his handling of the affair.

Mr Obama’s frankness is welcome. But the scandal is an embarrassment in part because Mr Daschle is a former “man of the people” campaigner, who had made so much since leaving office that he could mislay six figures in taxes. A similar irony beset the stepping aside of Ms Killefer. A former partner at McKinsey, a big consultancy, she was to be given the task of going through the budget line-by-line, scouring for waste. In the end she stumbled over another tax peccadillo that has haunted many politicians: failure to pay taxes for a nanny and a chauffeur. Saying she did not want to be a distraction, she too stepped aside on Tuesday.

Mr Obama has let one former tax-avoider through: Tim Geithner, the new treasury secretary, who failed to pay self-employment taxes when he was a consultant for the International Monetary Fund. (Foes of America’s absurdly complicated tax code were delighted to note that even a reputedly brilliant economic mind failed to comply with it.) But with the financial and economic crisis raging, Mr Geithner appeared simply too important to lose. He was confirmed last week.

Republicans, who were tainted by corruption before their loss of Congress in 2006, are enjoying the Democratic stumbles. Mr Obama will claim that the departures of Messrs Daschle and Richardson and Ms Killefer prove that he really is holding his government to a higher standard. And although Mr Obama, two weeks into his presidency, retains a clean image and high approval ratings some doubts are being raised over the competence of those who screened candidates for the top jobs. Mr Obama’s challenges are enormous, not least in pushing through reform of health care. As the shine comes off his halo the real work of governing will grow harder.

6) Three demons plague the Arab world
By Rami G. Khouri



The stark juxtapositions within the Arab world and the wider Middle East-South Asia region were brought home to me one morning this week in Kuwait, where I am participating in a global gathering that seeks to increase the production of indigenous research in the Middle East in order to better influence policy-making. This noble endeavor contrasts sharply with the morning newspaper headlines of suicide bombings in Somalia and Afghanistan, continued military strikes in Israel and Palestine, and the provincial elections in Iraq that happened during a lull between a string of suicide bombings in that country.

Where, in this range of events, is the center of gravity of the Arab world? It is simultaneously in none and all of these developments, for the Arab world is defined both by rampant violence (home-grown and foreign-instigated) and a deep desire to become democratic, productive, and intellectually and culturally vibrant. A key to moving in that direction is understanding the main constraint and the common denominator in all these events. I believe it is the legacy of autocratic, top-heavy, centralized Arab governments that veer into gentle monarchies on the one hand and hard police states on the other.

The modern Arab security state took hold for good in the early 1970s, and has been challenged only in two ways: by foreign armies that overthrew the Iraqi Baathist regime of Saddam Hussein, and by slow disintegration or domestic challenge from within, in places like Lebanon, Somalia, Sudan, Egypt, Syria, Palestine and Yemen. No Arab country has had the luxury of evolving normally and slowly into a modern, balanced nation-state defining itself and fully controlling its own resources.

The legacy of security-dominated states where power is concentrated in the hands of a family or small group of soldiers has led to two extremes: an almost total lack of indigenous production of cultural capital and intellectual knowledge (with very, very few exceptions, these mostly in Beirut and Cairo), and the widespread use of violence and terror by opposition forces trying to overthrow the incumbents.

The issue being addressed at the gathering of the Global Development Network I am attending in Kuwait clarifies a root problem with sustained Arab autocracy. The production of knowledge and research that can influence policy-making is defined by deep tensions in the region, because autocracy and the production of knowledge are violently contradictory. Those who hold power for decades on end do not have an interest in prompting free intellectual enquiry and free scientific research.


A sign of the problem is that all the institutions of knowledge production - universities, research centers, media - must be approved and licensed by governments. Most Arab governments do not want too many nimble minds openly enquiring into how society operates and power is exercised. This is why most of the best Arab journalists and researchers live abroad.

Where there has been a positive move forward, such as in some Arab satellite channels that openly debate important public issues, the problem remains that providing citizens with more information and a variety of views does not impact on the political process. Better informed citizens do not become more politically empowered citizens.

The lack of real politics is reflected in the absence of peaceful contestation of power and peaceful and regular transitions from one government to the next. When some Arab governments do change, policies do not, because policy is set by a higher authority than official governments. The change of policy that normally accompanies a change of government is on show quite brilliantly these days in the United States, as many men and women move into high government office from positions in universities, think tanks and research centers.

No such thing happens in Arab countries, because independent research institutions and think tanks remain very few in number, and limited in their resources and impact. This situation can only change through homegrown evolution into more democratic, pluralistic governance systems, working with likeminded partners worldwide. Foreign armies cannot do the job for us. Iraq's transformation remains a fascinating ongoing process whose ultimate outcome remains to be seen. It was probably a one-time phenomenon that reflected a unique post-9/11 moment in America that will not be repeated (and should not be).

For now, cross-fertilization between politics and the world of ideas remains weak in the Arab world, which is one reason why our region counts more indigenous terrorists and exiled intellectuals than it does respected resident researchers and public policy analysts. The fact that so many Arabs and their friends abroad insist on reversing this picture is a reason to remain hopeful, and to keep working hard for change, while rejecting the ways of the three demons that continue to plague us: security state autocrats, local terrorists, and foreign armies.

7)The Stimulus Package Is More Debt We Don't Need: Can Obama really defend this 'line by line'?
By TOM COBURN
As the Senate considers a massive $1.1 trillion stimulus bill, it is vital that the American people ask hard questions of their elected officials. When they do, it will become very clear that the bill will not only fail to stimulate the economy, but could seriously delay economic recovery.

As a nation, we got into this mess by spending and investing money that didn't exist. We won't get out of it by doing more of the same.


Yet this is precisely what this bill proposes we do. Less than 10% of the bill could be considered true stimulus, if one assumes tax credits and infrastructure spending will jolt the economy. The other 90% of the bill represents one of the most egregious acts of generational theft in our nation's history, with taxpayer money going to special-interest earmarks, an ill-conceived bailout to states, and permanent spending increases that expand government's reach in areas like health care and education.

The bill's selling point is that three million jobs will be created or saved by this package. What's alarming is that each job will cost $286,000 to create or save. Moreover, one in five will be a government job.

One of the more egregious provisions in the Senate bill is a $166 billion bailout plan for the states that rewards bad budgeting at the state level. Simply sending cash to states without asking for appropriate sacrifices is grossly irresponsible. States will no longer have the incentive to live within their means, because they'll assume the federal government will be there to bail them out.

Instead of a bailout, Congress could offer states an emergency loan that could be repaid at a low interest rate. This approach apparently wasn't considered because the members who wrote the bill aren't simply interested in saving jobs -- they want to push their agenda along the way.

A key example is health care. The Senate bill doubles the amount of the Medicaid bailout requested by governors and lays the groundwork for government-run health care, which invariably leads to rationing. This ideological overreach has led even some Democrats, like Nebraska's Ben Nelson, to express concern that various "sacred cows" in the package are hurting the bill's overall goals.

The bill is also loaded with old-fashioned pork, despite President Barack Obama's insistence that members of Congress refrain from adding earmarks. In fact, the bill contains the most expensive earmark in history: $2 billion for the FutureGen near-zero emission power plant in Matoon, Ill.

Other nonstimulative pork provisions include $88 million for a new polar icebreaker for the Coast Guard, $600 million to buy hybrid vehicles for federal employees, and $850 million for Amtrak.

What is not in the bill is as troubling as what is. The package does nothing to clear the toxic assets and bad mortgages that helped trigger the credit crisis. It also contains very little meaningful tax relief to make small businesses and American companies more competitive. Instead, the tax provisions of the stimulus are essentially a modest cash handout that repeats the failed policy of George W. Bush's rebate-check stimulus.

Finally, the bill's sponsors have made zero effort to pay for this new spending by eliminating programs that aren't working. Mr. Obama's pledge to go through the budget line-by-line has made no impression on the bill's authors, nor has the plight of millions of Americans faced with tough spending choices.

Dozens of independent watchdog groups, think tanks and elected officials on both sides of the aisle have spent decades identifying areas of the budget that can be cut. Yet Congress remains focused on finding "shovel ready" projects when at least $300 billion in wasteful programs are "scissor ready" today.

One of the lessons I've learned from the practice of medicine is the danger of treating symptoms rather than the disease. Doing so makes the disease worse and causes the symptoms to come back with a vengeance. It's time for government to quit masking the symptoms and deal with this crisis at its source: toxic assets in the mortgage market and a federal government that continues to pollute our economy with pork and failed interventionist policies.

8) South African dock workers say they will not offload an Israeli ship that is set to dock in the harbor of the port city of Durban.

In a Palestine Solidarity Committee news release, the Congress of South African Trade Unions' decision to "strengthen the campaign in South Africa for boycotts, divestment and sanctions against apartheid Israel" is noted. Referring to workers' commitment to "refuse to support oppression and exploitation across the globe," the committee recalls the refusal by Durban dock workers last year to offload arms from China that were destined for Zimbabwe.

The release also says that workers will not allow South African ports to be used as "transit points for goods bound for or emanating from certain dictatorial and oppressive states such as Zimbabwe, Swaziland and Israel."

The release continues: "We also welcome statements by various South African Jews of conscience who have dissociated themselves from the genocide in Gaza. We call on all South Africans to ensure that none of our family members are allowed to join the Israeli Occupation Forces' killing machine."

Calling on the South African government to sever diplomatic and trade relations with Israel, the Palestine Solidarity Committee announced a week of action under the banner "Free Palestine, Isolate Apartheid Israel."

9) Tom Daschle's Washington: His riches illustrate the expanding power of the political class.

Just as Tom Daschle's Senate pals were preparing to grant absolution for his six-figure tax-free limousine -- could've happened to anyone -- the former Majority Leader yesterday withdrew his nomination to be Secretary of Health and Human Services. Give Mr. Daschle credit for making the honorable choice, and sparing President Obama from a bipartisan populist revolt.


APBefore this episode vanishes into Beltway lore, however, it's worth drawing a few lessons. Especially because the political left seems to want to make this a morality play about Mr. Daschle's $5.2 million post-Senate windfall as lobbyist and speaking-circuit regular, notably in front of the health-care industry. Apparently these people expected Mr. Daschle to return to Sioux Falls after his 2004 re-election defeat and eke out a hardscrabble existence as a farmer.

But Mr. Daschle's embarrassment of riches is a typical story, and in fact is the result of the liberal ideology his critics have been advocating for decades. The main story of the Obama Presidency so far isn't the contradiction between Mr. Obama's campaign promises and the messier reality of his nominees. That was always inevitable. The real story is the massive transfer of power and wealth now underway from the private sector to the political class. Mr. Daschle could make so much money and achieve such prominence because he was expected to be a central broker in that wealth transfer.

Alston & Bird, the white-shoe law firm that took in Mr. Daschle, is a lobbying shop. Any normal person would therefore consider Mr. Daschle, who does not have a law degree, to be a lobbyist. But he was not technically a lobbyist under Beltway rules, and while it is still unclear exactly what services he performed as "Special Public Policy Advisor" to pile up $2.1 million, we do know he consulted for the insurance conglomerate UnitedHealth Group.

Mr. Daschle cashed in to the tune of nearly a quarter million dollars from various health-care businesses. The Health Industry Distributors Association paid $14,000 to hear him speak in March 2008 about "the impact an Obama administration will have on the industry." America's Health Insurance Plans, the insurers' lobby, gave $20,000 for another speech, as did health-care consulting firms, hospital systems and pharmacy boards.

Mr. Daschle's critics say he breached some fanciful code of honor separating corporate America and government. Please. Business groups spend to get intelligence and minimize political risk. In the case of Mr. Daschle, he was trading less on his career in "public service" than his proximity to and early support for Mr. Obama. While he was the recipient of industry generosity, the going wager was that he'd be White House Chief of Staff.

What Mr. Daschle's lucrative career as influence peddler really illustrates is how much Washington is now expanding its reach over the economy. Politicians and their staffers can make or break fortunes by slipping a rider into a "must pass" bill or dispensing billions of dollars in subsidies to favored constituencies. Naturally businesses are going to protect their interests and hire lobbyists to get the decisions to come out their way.

Had Mr. Daschle been confirmed, he would have been the most important man in a health-care industry expected to be worth $2.5 trillion in 2009, which is larger than the economy of France. With merely a torque to this or that regulation -- to say nothing of the "reform" he was to oversee as White House "health czar" -- he would have channeled all this wealth in one direction or the other. Just another day at the office.

This is all part of the same entitlement mentality that caused Mr. Daschle's former colleagues to barely raise an eyebrow over his "disappointing mistakes" on taxes, as Senate Finance Chairman Max Baucus put it. West Virginia Democrat Jay Rockefeller said Mr. Daschle's tax oversights had to be weighed against the value he brings "in terms of the moral necessity of getting universal health care." So tax avoidance is justifiable as long as you're saving mankind.

We have come a long way from liberal outrage over the "K Street Project," Tom DeLay's effort to strong-arm lobbyists into hiring more Republicans. True, when the DeLay GOP settled into incumbency, it dumped the spending restraint and reform that might have limited the ecosystem that allows the Daschles of the world to proliferate. Still, it's amusing to see liberals, who run as the party of government, get momentarily indignant when one of their own cashes in on the spoils of their system.

As for Mr. Obama, as recently as Monday night the President was saying he "absolutely" stood by his nominee before reluctantly accepting his withdrawal. So much for promising to vanquish the lobbyists before banishing the special interests. This was always an implausible bill of goods, considering that the major special interest in Washington is Washington itself.

10) Washington Could Use Less Keynes and More Hayek
The late Austrian economist offered good reasons to be skeptical of government action.
By DICK ARMEY

"In the long run, we are all dead," John Maynard Keynes once quipped. An influential British economist, Keynes used the line to dodge the problematic long-term implications of his policy proposals. His analysis of the Great Depression redefined economics in the 1930s and asserted that increased government spending during a downturn could revive the economy.

President Barack Obama and congressional Democrats (very few of whom likely have read Keynes's 1936 book "The General Theory of Employment, Interest and Money") have dug up the dead economist's convenient justification for deficit spending in defense of their bloated stimulus legislation. But none ask the most important question: Was Keynes right?

According to Nobel economist Fredrick Hayek, a contemporary of Keynes and perhaps his greatest critic, Keynes "was guided by one central idea . . . that general employment was always positively correlated with the aggregate demand for consumer goods." Keynes argued that government should intervene in the economy to maintain aggregate demand and full employment, with the goal of smoothing out business cycles. During recessions, he asserted, government should borrow money and spend it.

Keynes's thinking was a decisive departure from classical economics, because arbitrary "macro" constructs like aggregate demand had no basis in the microeconomic science of human action. As Hayek observed, "some of the most orthodox disciples of Keynes appear consistently to have thrown overboard all the traditional theory of price determination and of distribution, all that used to be the backbone of economic theory, and in consequence, in my opinion, to have ceased to understand any economics."

Classical economists up to that time had emphasized a balanced budget and government restraint as the primary goals of fiscal policy. The simplistic notion that "aggregate demand" drove investment and employment threw all of that out the window, but it had one particular convenience for policy makers. Government spending is, according to Keynes's construct, a key component in determining aggregate demand, so more spending, even to resod the Capitol Mall or distribute free contraception, drives the economy in the short run.

A father of public choice economics, Nobel laureate James Buchanan, argues that the great flaw in Keynesianism is that it ignores the obvious, self-interested incentives of government actors implementing fiscal policy and creates intellectual cover for what would otherwise be viewed as self-serving and irresponsible behavior by politicians. It is also very difficult to turn off the spigot in better economic times, and Keynes blithely ignored the long-term effects of financing an expanded deficit.

It's clear why Keynes's popularity endures in Congress. Intellectual cover for a spending spree will always be appreciated there. But it's harder to see any justification for the perverse form of fiscal child abuse that heaps massive debts on future generations.

Today, one problem with manipulating the economy through "discretionary" spending -- that part of the budget not mandated by one entitlement or another -- is that entitlements have grown large enough to influence the economy, a phenomenon unheard of when Keynes was alive. Medicaid, Medicare, Social Security and other entitlements are becoming larger factors in economic decision making than what Congress spends on, say, roads. Discretionary spending is becoming irrelevant as a fiscal tool.

Of course, despite Mr. Obama's campaign promises to adhere to "Pay As You Go" budgeting, no one seems terribly worried about paying for what will likely be a trillion-dollar stimulus package. What everyone should agree on is that the money has to come from somewhere, either through higher taxes, borrowing or printing.

If the government borrows the money for the stimulus, then it will either have to print money later or raise taxes to pay it back. If the government raises taxes to pay for the stimulus, it will, in effect, be robbing Peter to pay Paul. If the government prints the money, it will increase inflation, which will decrease the value of the dollar. That would, in effect, rob Paul to pay Paul back with devalued currency.

Taking money out of the private economy -- either through taxes or inflation -- and spending it in a way that doesn't offset the loss of money with real economic gains is worse than doing nothing.

Years ago I developed the "Armey Curve" to explain the negative burden government has on prosperity. The idea, borrowing liberally from Arthur Laffer's curve (which demonstrates that tax revenues fall when the tax burden gets so high that it no longer pays to work), is that at some point the burden of government spending exceeds the private economy's ability to carry it. "Stimulus" spending often does more harm than good, because it takes more money out of the system than it creates and thereby destroys jobs and leads to stagnation and diminished prosperity for all.

Hayek, who famously debated Keynes in a series of articles after the release of "General Theory," gave what I believe to be the most devastating critique of government action to stimulate "aggregate demand." Hayek viewed the boom and bust of the business cycle as primarily a monetary phenomenon created by governments' artificial inflation of money and credit.

Sound money policy, conversely, allowed the disparate knowledge of millions of economic actors to be conveyed through the price system, rationally allocating capital and labor through relative prices. The problem with government attempts to manipulate the economy through fiscal policy -- spending that takes resources away from those who are productive and redistributes it to politically favored interests -- is that it is audacious. It assumes that government knows better how to spend and invest than individuals acting in their families' best interest.

"The real question," according to Hayek, "is not whether man is, or ought to be, guided by selfish motives but whether we can allow him to be guided in his actions by those immediate consequences which we can know and care for or whether he ought to be made to do what seems appropriate to somebody else who is supposed to possess a fuller comprehension of the significance of these actions to society as a whole."

In reality, no one spends someone else's money better than they spend their own. The charade of the current stimulus package, chockablock with earmarks to favored pet constituencies and virtually devoid of national policy considerations, is the logical consequence of Keynesianism in action. It is about politics and power, not sound economics, and I believe that the American people will reject it.