Saturday, April 24, 2010

Obama's Plan For America- 'Affirmative Destruction!'

OK so I lied. This is actually the last memo.

Response to my two story outhouse from a long time friend and fellow memo reader. (See 1 below.)
Obama has worked hard at trying to make friends among our enemies. I would grade his success less than F.

However, in one regard he deserves an A plus having succeeded in making an enemy of a former friend. That friend's name is 'profit.'

Profit, if you have forgotten, is the by product of successful Capitalism.

Capitalism, Yankee ingenuity, weat labor geography and natural resources made our nation the envy of the world.

Now that is something that truly needs changing because by sticking out we attract jealous detractors like a magnet and Obama wants America to be loved but neither respected nor feared.

Obama's plan for our nation is 'affirmative destruction.' (See 2 and 2a below.)
Just because the author wrote it does not make it so of course but his logic and statistics are quite compelling. (See 3 below.)
The old game of stealing elections is being resurrected. As a result of fraud the biggest joke in recent politics, Al Franken, was elected to the Senate and that is no joke.(See 4 below.)
Finding politicians with backbone is like looking for a needle in a haystack. They generally live a life of compromise, walk a narrow line between conflicting interests in order to retain their seats.

Every once in a while a watershed election comes along and sweeps some wimps out and perhaps 2010 will be such an election. (See 5 below.)
Obama backs off a bit but really no one should expect a change in his general attitude. Obama simply needed to give Mitchell some breathing room and to calm discontent among his Liberal Jewish supporters.

In the end Obama is unlikely to trust Netanyahu or Netanyahu, Obama. Too much bad blood caused by Obama's bullying tactics. One has the right to question whether our black president, having sat and listened for 20 years to biased tripe from the likes of Minister Wright and other radical associates, also had his heart and thinking blackened.

Meanwhile, should Abbas continue to insist America stick it to Israel that will also prove a no-starter.(See 6 and 6a below.)
Ken Blackwell poses an interesting thought but I cannot buy his analogy because Israel is not at war with Iran and has only been attacked by its surrogates in the past.

My heart may be with Blackwell but not my head.(See 7 below.)
Ibrahim's thoughts suggest killing radical Islamist leaders is a positive but does not produce the significant results as many think.

Since the White House no longer thinks in terms of radical Islamism, it might revoke Ibrahim's status as a guest lecturer at the National Intelligence Defense College.

Can't allow a radical lecturer to be stirring up trouble among our 'friends' who seek to destroy our culture. (See 8 below.)
In a discussion with my youngest daughter and her husband last night at dinner we explored "The Fair Tax" concept.

Year ago I wrote something for my immediate family entitled "Street Person." I discussed my views on a variety of topics and made some predictions. I have lived to see most of my predictions and concerns come to pass. In this treatise I discussed the critical need to change our tax policies and suggested a "Flat Tax" approach.

Whether we turn to a "Flat Tax" or "Fair Tax" method to raise revenue is not as important as they need to change the way we raise taxes so that we capture the sub-terranean non-payers as well as encourage capital to return to this nation and with it the greater probability of reviving our economy and re-employing our citizens.

Congress will resist because changing the tax approach would basically mean politicians would lose control over dispensing favors to vested interests who then contribute to their campaigns. The concept of doing what is best for the nation went out with the 16th Amendment - thanks President Wilson.

Once we improve the revenue stream we still are left with the problem of what to do about unbridled spending. That is the other side of the coin that must be addressed and that too means getting rid of a lot of deadwood in Congress. That is what Tea Drinkers are all about and that is not racist. In fact not to make a change is actually racist because our tax system is divisive, anti-Capitalistic and creates dependency. (See 9 and 9a below.)

Stop and think :

Obama said he would raise taxes on the wealthiest and spare those making
$250,000 - proved wrong.

He said the health care bill would improve health and lower costs - proved wrong.

He now is contemplating raising taxes through a VAT System which is retrogressive taxation and helped to cripple European economies. Obama's deficit spending is getting ready to crush our economy and has definitely impacted our recovery. Again another 'lie.'

Finally, Obama sings the virtues of the private sector and Capitalism but steadfastly pursues bringing more of our economy under the government's stifling umbrella. More messiah double talk.

This is why I assert Obama is knowingly engaged in 'affirmative destruction.'

It is as if Obama wants to bring America to its economic knees so we can share the poverty his brand of artful Socialism will breed. And for all these reasons and the many others I have discuss I deem him to be an unmitigated disaster for our nation and it is little wonder so many Americans are up in arms.

If being against Obama and all that he stands for and wishes to impose on our nation is seditious then I am glad to be counted among those so branded.

PJ is correct - we need less A thinking! So lets hear it from PJ O'Rourke. (See 10 below.)

1) I used to think that I could become rich by inventing a "bureaucratic laxative." With all of the crap flowing out of Washington these days, I'm afraid someone beat me to it.
2)Washington Possessed
By David Malpass

My Nov. 10, 2008 column warned big government was walking away as the knockout winner over the private sector in the financial crisis. But it's going much further than I'd feared. The federal government has accelerated its takeover of the economy, adding a mega-trillion-dollar health care entitlement, despite the damage to health care and the national debt this will cause. Washington is frenetically cutting unfunded checks. Capital is being channeled away from small businesses toward big government. Looming on the horizon is the bailout of state and local governments, which will concentrate more and more of the nation's debt onto the diminishing base of federal taxpayers.

Washington's excess spending is now running $1.5 trillion annually, and both the Treasury and the Federal Reserve are relying heavily on short-term credits for funding. The marketable national debt has ballooned to more than $8 trillion, but wait ... the Obama Administration has budgeted an increase to $20 trillion over the next few years, bringing it to more than 90% of GDP. Even that huge sum--$100,000 for every working-age American--doesn't include the rapidly escalating debts of Fannie Mae ( FNM - news - people ) and Freddie Mac ( FRE - news - people ) or the government's unfunded liabilities for Social Security and Medicare. And to keep the debt estimate down the budgeteers are making wishful assumptions that millions of high-paying jobs will reappear and health care reform will pay for itself.

Every month Congress adds more federal powers and debt, voting as if its allegiance were to Washington, city of cranes, instead of to the voters and taxpayers. The financial services reform bill does little to reopen lending to small businesses but adds huge new federal powers, including the imposition of corporate taxes, to create a giant new bailout fund (think Son of Tarp). And the President's ten-year $45 trillion spending budget makes crystal clear Washington's hunger for a value-added tax. After the health care law it's the next huge step in Washington's expansion.

Given temporarily low federal borrowing costs, the government can concentrate the nation's debt onto federal taxpayers without properly recording the cost. This process is stimulative in the short run--more debt for less cost--but is clearly dangerous in the longer term. The government is not only choosing health care treatments and mortgage clauses but also has taken responsibility for allocating credit throughout the economy--this state versus that state, this industry versus that one.

Delaying the day of reckoning, the Fed has committed its institutional credibility to monetary supercharging, as it did in 2003. By arbitrarily pegging the interest rate near zero for big banks and the Treasury, we're living in a surreal framework in which the more federal debt, the better for GDP. Except that there are three huge losers: savers earning 0%, small businesses not hooked into zero-rate loans and future taxpayers saddled with the debt when interest rates zoom.

How badly this ends depends on whether government spending can be controlled. If we knew today that Congress, New York or California would roll back spending, we might be cautiously optimistic. However, when governments negotiate budgets the taxpayer usually takes a backseat. More likely is the Greek model, in which government spending cuts generate such massive public protests that the politicians engaged in the negotiation concede, providing little true reform. Like as not, our large, cheaply financed federal government will be generous to cash-strapped state and local governments. The defense is that it's the taxpayers' money, and the debt won't have to be paid for years. Live a little.

Longer term, the critical question is what the interest rate will be to finance the new mountain of federal debt. Will the $20 trillion in national debt be financed at today's 4% rate or will it require 7%? It matters a lot to the budget and financial markets.

In the near term the financing rate depends on the Fed (though it denies that it controls bond yields). Over the next few years, however, the financing rate will depend on the market's perception of the U.S.' ability to pay all the debt on time and with dollars that still have value.

It's not a hopeless situation. Whether through luck or foresight, federal employees now have personal retirement accounts rather than the unfunded pensions common in states and municipalities. The result is that Washington won't have to fight the divisive employee pension battles that are crushing state and local budgets.

Can the American people retake Washington, imposing the checks and balances needed to cut government spending quickly enough to avoid crisis? Maybe. Constitutional restraints on federal expansionism are making a comeback, but it's going to be a long, hard fight.

David Malpass, global economist, president of Encima Global LLC; Paul Johnson, eminent British historian and author; Amity Shlaes, senior fellow in economic history at the Council on Foreign Relations; and Lee Kuan Yew, minister mentor of Singapore.

2a)CMS Actuary Finds ObamaCare Bends Cost Curve Up
By Philip Klein

The chief actuary for the Centers for Medicare and Medicaid Services, a division of the Department of Health and Human Services, has released a report showing that the new national health care law will increase health care spending in the United States beyond already unsustainable levels.

During the health care debate, President Obama argued that we couldn’t afford not to pass his brand of health care reform.

"Make no mistake: The cost of our health care is a threat to our economy," Obama told the American Medical Association last June. "It's an escalating burden on our families and businesses. It's a ticking time bomb for the federal budget. And it is unsustainable for the United States of America."

But for all the talk over the past year about “bending the cost curve down,” CMS, the agency that is tasked with tracking national health care expenditures, has now projected that the new law will actually bend the cost curve in the opposite direction. That is, up.

Not surprisingly, CMS notes that, “Numerous studies have demonstrated that individuals and families with health insurance use more health services than otherwise-similar persons without insurance.” Thus, expanding coverage will mean greater usage of health care services.

In that same AMA speech, Obama said more specifically, "If we fail to act, one out of every five dollars we earn will be spent on health care within a decade."

But according to CMS, after the passage of ObamaCare, health care spending will eat more than one out of five dollars in the economy. Specifically, by 2019, health care spending is now projected to represent 21 percent of GDP, as opposed to an estimated 20.8 percent had the new law not passed. In dollar terms, that translates into $311 billion more in spending over the next decade. I’ve created the graph below to demonstrate this.

Liberals could respond to this report by arguing that covering 34 million additional people – as CMS projects -- justifies an increase in spending that is modest relative to the more than $35 trillion we’re projected to spend on health care over the next decade. But as demonstrated by Obama’s statements above, of which I could have found numerous others, the law was sold to the American people on the basis of the fact that it would substantially reduce costs that were crippling our economy.

In the rest of the 38-page report, actuary Richard Foster confirms many of the arguments conservatives have been making throughout the health care process. For instance:

-- By delaying the major spending provisions until 2014, Democrats hid the true 10-year cost of their legislation: “Because of these transition effects and the fact that most of the coverage provisions would be in effect for only 6 of the 10 years of the budget period, the cost estimates shown in this memorandum do not represent a full 10-year cost for the new legislation,” CMS says.

-- Medicare cuts are unlikely to materialize: The CMS report cautions that “it is important to note that the estimated savings shown in this memorandum for one category of Medicare provisions may be unrealistic.” The reason is that if the proposed cuts to payments to hospitals, nursing facilities, and home health agencies go into effect, “roughly 15 percent of Part A providers would become unprofitable within the 10-year projection period...” The only way to resolve this problem would be to prevent the cuts, which in turn would eat up some of the projected savings from the legislation.

-- You can’t double count the Medicare savings: While in theory Medicare Part A cuts would extend solvency of the program by 12 years, the actuary writes, “In practice the improved (Medicare hospital insurance) financing cannot be simultaneously used to finance other Federal outlays (such as the coverage expansions) and to extend the trust fund, despite the appearance of this result from the respective accounting conventions.”

-- The CLASS Act is a ponzi scheme: One of the most under-reported aspects of the new health care legislation was that it creates a smaller new entitlement within the massive entitlement – a program pushed by Ted Kennedy that would allow individuals to purchase long-term care insurance through the government. But the program begins collecting premiums before paying out benefits, making it produce surpluses in the early years that Democrats claimed as deficit savings. However, CMS notes that, “After 2015, as benefits are paid, the net savings from this program will decline; in 2025 and later, projected benefits exceed premium revenues, resulting in a net Federal costs in the longer term.”

The report goes on to say that the CLASS program is likely to be used by those with more health problems, meaning it faces “a significant risk of failure as a result of adverse selection of participants.”
3)Is the US Facing a Cash Crunch?
By Gordon T. Long

The US cash-management challenge is significant, and any surprises or further delays in economic rebound will likely trigger serious market reactions.

The US government is caught in a cash vise and is being squeezed between too slow a rebound in tax revenues and the limitations on how quickly it can realistically take its funding requirements to the US Treasury auction. The US Treasury was saved in March by what the government reports as “proprietary receipts.” Those receipts require an explanation that isn’t well publicized since it begs the question of what happens next month without the $117 billion journal entry.

The March cash management numbers from the US Treasury’s Financial Management Service are alarming and in my estimation have become perilous. The economy is simply taking much too long to recover, which is affecting urgently required tax receipts.

If the US Treasury issues even higher debt supply to the market too fast, it threatens driving up interest rates prematurely and thereby elevating already strained government financing costs despite already increased supply. Since the US government has steadily reduced maturity duration over the last few years to obfuscate a growing debt problem, the issue is compounded by the rapidly increasing levels of rollover funding now additionally being required.

It’s a tricky balance between gauging how fast tax receipts will return and what supply the monthly Treasury auction is able to absorb. Cash flow is the primary reason small businesses fail unexpectedly. This is also why sovereign governments fail abruptly.

We witnessed in Greece what happens when investors get nervous. Yields not only spike but typically move to even higher levels than most originally thought possible.

US Treasury Cash Requirements

On April 14 the Financial Management Service, a bureau of the US Department of the Treasury, released its Monthly Treasury Statement for March 2010. I was waiting for it because of what I saw in February: The gap between receipts and outlays was widening disturbingly.

I knew the US Treasury was going to have to pull a rabbit out of a hat, or we might see a similar scare in the US Treasury auction, with a spike in treasury yields that occurred in Greece. What was reported was a mystery and for those that read Extend & Pretend: Gaming the US Tax Payer, I’ll call this Suspicious Clue #8.

The report shows US Treasury receipts were down disturbingly and almost all government outlays were up. I personally have had Profit & Loss responsibility on numerous occasions during my career and I would have been apprehensive facing the auditors or board of directors with such a blatant example of mismanagement. Absolutely no cuts in expenses, with falling revenues, all made to marginally appear better than the February report by a single line item called “other.” Executives get fired for such a report but governments just carry on until the inevitable crisis event finally occurs. Then the traditional blame game begins, blame is assigned and belated and poorly formulated policy responses are enacted.So what is this “other”? When you examine the Outlay Ledger of the Department of the Treasury for March 2010 (below), you see it to be a one-time item classified as a negative outlay. For the non accountants, this is a government receipt that is placed in the outlays as a negative amount, thereby showing government outlays to be smaller than they otherwise would have been. Though this is acceptable accounting, it would lead to the wrong conclusions, unless you read the details buried in the back pages. This “other” is referred to as a “Proprietary Receipt from the Public.”

An IRS document explains just what that means in an accounting context (source: 04-13-10 The Incredible Shrinking Deficit

Proprietary Receipts from the Public are collections from outside the Government that are deposited in receipt accounts that arise as a result of the Government’s business-type or market-oriented activities. Among these are interest received, proceeds from the sale of property and products, charges for non-regulatory services, and rents and royalties.

This is a $117.3 billion amount! The total 2010 US tax receipts for US corporations is only budgeted to be $157 billion!

My investigations suggest that it’s likely TARP (Troubled Asset Relief Program) money being returned to the US Treasury, along with a slowdown in TARP issuance versus budget. Assuming this is the case, and not simply an aircraft carrier or two we’ve sold and are now leasing back like California is doing with all state-owned buildings, we still have a major problem. What happens next month? The TARP fund returns will stop or we will run out of aircraft carriers. Is unemployment going to surge or are corporate tax receipts going to expand by over $117 billion next month?

Timothy Geithner and the US Treasury somehow dodged the bullet because of “other” this month. How does it look for next month for cash management? Let’s consider tax receipts to see if there is a possible rabbit in the hat there.

Tax Receipts

You personally met your April 15 tax filing deadline and you likely took some consolation in your tax frustrations by knowing you weren’t alone. The quiet truth is you’re becoming more alone each year if you haven’t understood the new realities of the US tax game. Forty-seven percent of Americans (source: Nearly Half of US Households Escape Fed Income Tax -- AP) and two-thirds of US corporations (source: 04-11-04 Most US Firms Paid No Income Taxes in '90s -- Boston Globe) will pay no taxes in 2010. Where do you fit? These are pretty startling revelations to most of us and don’t bode well to fixing the monthly Treasury cash requirements quickly, especially with unemployment still stubbornly elevated.

Personal Income Tax

About 47 percent will pay no federal income taxes at all for 2009. Either their incomes were too low, or they qualified for enough credits, deductions and exemptions to eliminate their liability. That's according to projections by the Tax Policy Center, a Washington research organization.

In recent years, credits for low- and middle-income families have grown so much that a family of four making as much as $50,000 will owe no federal income tax for 2009, as long as there are two children younger than 17, according to a separate analysis by the consulting firm Deloitte Tax.

Tax cuts enacted in the past decade have been generous to wealthy taxpayers, too, making them a target for President Barack Obama and Democrats in Congress. Less noticed were tax cuts for low- and middle-income families, which were expanded when Obama signed the massive economic recovery package last year.

The result is a tax system that exempts almost half the country from paying for programs that benefit everyone, including national defense, public safety, infrastructure and education. It is a system in which the top 10 percent of earners -- households making an average of $366,400 in 2006 -- paid about 73 percent of the income taxes collected by the federal government.


The family was entitled to a standard deduction of $11,400 and four personal exemptions of $3,650 apiece, leaving a taxable income of $24,000. The federal income tax on $24,000 is $2,769. With two children younger than 17, the family qualified for two $1,000 child tax credits. Its Making Work Pay credit was $800 because the parents were married filing jointly. The $2,800 in credits exceeds the $2,769 in taxes, so the family makes a $31 profit from the federal income tax. That ought to take the sting out of April 15.

With the government presently talking about once again extending unemployment benefits, it appears we have more downside than upside on the income tax revenue receipt line item going forward.

Corporate Tax

The Center for American Progress reported in 2004, while fighting President George W Bush’s further cuts in corporate taxation:

The news that more than 60 percent of US corporations failed to pay any federal taxes from 1996 through 2000 when corporate profits were soaring and that corporate tax receipts had fallen to just 7.4 percent of overall federal tax revenue in 2003 -- the lowest since 1983 and the second-lowest rate since 1934 -- is an outrage. But it should come as no surprise to anyone who has been paying attention to national tax policy over the past few years. The General Accounting Office (GAO) report also found that an astonishing 94 percent of corporations reported tax liability of less than 5 percent of their total income during the same time period.

The last special General Accounting Office (GAO) study concerning corporate taxation was in 2004 and it showed:

The corporate income tax rate is ostensibly 35 percent, but companies are able to reduce their effective burden by claiming various deductions and credits. US companies paid an average of $11.88 (1.19 percent) in corporate taxes for every $1,000 in gross receipts, the study said.

Foreign-owned companies fared better in some respects than their US-based competitors. The report found that 71 percent of foreign-controlled corporations paid no taxes on their US income, while 89 percent had liabilities of less than 5 percent of their income.

The GAO didn't attempt to determine why so many companies were able to avoid paying taxes. It said possible explanations included legitimate deductions for current-year operating losses, losses carried forward from previous years, and sufficient credits to offset any tax liabilities. In addition, it said improper pricing of transactions between US and foreign operations could contribute to tax avoidance.

The percentage of federal tax collections paid by corporations has tumbled from a high of 39.8 percent in 1943 to a low of 7.4 percent last year. It ranged from 10 percent to 11 percent in 1996-2000, the period studied by the GAO. (Boston Globe 04-11-04)

In 2005 the GAO issued another report. The Washington Post’s analysis in "Many Firms Didn’t Pay Taxes" highlighted:

About two-thirds of corporations operating in the United States did not pay taxes annually from 1998 to 2005. In 2005, after collectively making $2.5 trillion in sales, corporations gave a variety of reasons on their tax returns to account for the absence of taxable revenue. The most frequently listed included the cost of producing their goods, salary expenses and interest payments on their debt, the report said. The GAO did not analyze whether the firms had profits that should have been taxed.

Sen. Byron L. Dorgan (D-N.D.) called the findings "a shocking indictment of the current tax system."

"It's shameful that so many corporations make big profits and pay nothing to support our country," he said. "The tax system that allows this wholesale tax avoidance is an embarrassment and unfair to hardworking Americans who pay their fair share of taxes. We need to plug these tax loopholes and put these corporations back on the tax rolls."

Eric Toder, a senior fellow at the Urban Institute, said the vast majority of corporations are small businesses and start-ups that have adopted a corporate structure that allows them to lower their tax bills.

"I'm not trying to imply that there aren't tax-compliance issues among small corporations," he said. "But when you are talking about businesses that size, I would suspect the norm would be to not pay taxes, and there's nothing nefarious about that." Toder had not yet seen the GAO study.

A greater proportion of large corporations pay taxes, according to the GAO. In 2005, about 28 percent of large corporations paid no taxes. Of the 1.3 million corporations included in the study, 998 were categorized as "large."

Dorgan and Sen. Carl M. Levin (D-Mich.) requested the report out of concern that some corporations were using "transfer pricing" to reduce their tax bills. The practice allows multi-national companies to transfer goods and assets between internal divisions so they can record income in a jurisdiction with low tax rates.

The GAO said data on transfer pricing were scarce. Instead, it compared the percentages of foreign- and U.S.-controlled corporations that are paying taxes.

In general, the GAO found that slightly more foreign firms paid no taxes. From 1998 to 2005, 68 percent of foreign-controlled corporations sent nothing to the Internal Revenue Service, compared with 66 percent of U.S. companies. The report noted in an opening paragraph, however, that the GAO did not study whether the foreign companies were using transfer pricing.

Still, Levin said: "This report makes clear that too many corporations are using tax trickery to send their profits overseas and avoid paying their fair share in the United States."

It’s only become worse, with President George W. Bush tax cuts and corporate-friendly tax policy. President Barack Obama has been too preoccupied with spending to consider revenue receipts as a priority.

Additionally, offshore tax accounting is completely un-policed and highly secretive with approximately 30 countries serving as tax havens to help corporations avoid taxes. The addition of $605 trillion derivatives market now makes it almost impossible to police global corporations from tax avoidance.

When we compare corporate tax receipts to Nominal GDP we see huge disparities that are now built into the US Corporate Taxation policy. When GDP was growing, US Taxation wasn’t. The effective rates after loopholes and offshore accounting created the following results.

A Horrific Chart

This alarming chart suggests one or more of three possibilities:

1. There’s no relationship between corporate taxes and GDP.

2. Corporate pretax profits have seen near exponential growth over the last 30 years without being reflected in US taxes receipts.

3. Pretax corporate profits have become more and more an offshore phenomenon.

In an analysis of taxes paid by 275 of the largest U.S. corporations, the liberal watchdog group Citizens for Tax Justice found that effective corporate tax rates have fallen by 20 percent since 2001, even as pretax profits jumped 26 percent. Between 2001 and 2003, the 275 companies paid taxes totaling 18.4 percent on their total profits, about half the 35 percent corporate income tax rate. Of the 275, 82 either paid no taxes or received large refunds in at least one of the past three years. (The Washington Post 12-26-04)

Investors are operating under the notion that an improvement in the economy and employment will alleviate the pressures on the Treasury auction. This notion I believe is misplaced. Though I’m skeptical about significant improvements in either the economy or employment, this view is moot in comparison to what will actually be required to make a material difference to tax receipts. The problems described above are intractable without major congressional policy initiatives. Congress is presently doing nothing to address them. In fact they’re headed in absolutely the opposite direction.

Corporate and personal taxes aren’t going to materially fix the US cash crunch short-term.

So the question is even more difficult to answer. Where will tax receipts come from to keep the US Treasury from being forced to place accelerating supply on the monthly Treasury auction?

Debt Issuance

I know many of you are saying we’ll just be forced to place more supply on the Treasury auction and accept higher rates. As I mentioned earlier, the US has already moved down the duration curve steadily over the last few years to make increasing debt levels less onerous. It obviously comes with huge risk, considering interest rates are at all-time historic lows.

If we were forced to refinance the national debt at 5.5% versus the present average maturity of just over 2%, we’d have a serious problem. We need to place corporate tax receipts versus interest payment rate charges in perspective.

This is too far out to be critical to our monthly cash management concerns, but is still a major strategic consideration affecting short-term US Treasury auction options. Closer in however, the US Treasury is obviously caught in a vise about not pushing rates up any faster than absolutely necessary for concern that in the not-too-distant future the very existence of the US and its ability to service its debt may be at stake.


The US cash-management challenge is significant. Taking out this month’s “plug” number, any surprises or further delays in economic rebound will likely trigger serious market reactions.

"This story is not going to stop at the end of the year. There is inertia in the deterioration of credit metrics."
-- Moody’s Investor Services
4)Wisconsin and the Voter Fraud Agenda: Democrats are pushing to weaken ballot security at the state and national level. Have they forgotten the 2000 election?.e By John Fund

An attempt to hijack the state's election laws and open the door for voter fraud failed at the last minute this week in Wisconsin's legislature. But threats to ballot integrity continue in other states, and Congress may rush to pass ill-conceived legislation this year that would only sow confusion and increase the potential for chaos on a national level.

Wisconsin's story shows how high the stakes are. Late in March, a 72-page bill was suddenly introduced and rushed forward with only abbreviated hearings. The bill would have given "nationally recognized" community organizing groups access to the state driver's license database to encourage voter turnout. After the infamous registration scandals involving Acorn in 2008, this was clearly a strange priority. Requests for an absentee ballot in a single election would also become permanent (without requiring a legitimate reason, such as infirmity), and the ballots would be automatically mailed out in future elections.

Coercion and chicanery are made much easier by the excessive use of absentee ballots. Most of the elections thrown out by courts—Miami, Florida's mayoral election in 1998, the East Chicago, Indiana's mayor's race in 2005—involved fraudulent absentee votes.

Voters in Sturtevant, Wis., on primary election day, 2008.
.Three decades ago absentee and early ballots were only 5% of all votes cast nationwide. In 2008, they exceeded 25%. Wisconsin's bill would also have allowed voters to register on the Internet without supplying a signature—thus removing a valuable protection against identity theft and election fraud.

Wisconsin Attorney General J.B. Van Hollen, a Republican, blasted the bill, saying it would "make election fraud more likely" and "jeopardize the orderly administration of election laws." In the end, Democratic Senate Majority Leader Russ Decker admitted the bill was being rushed through too quickly and adjourned the session without brining it up for a vote.

Democratic leaders also worried that a popular amendment to require photo ID at the polls would have been attached to their measure. Democratic Gov. Jim Doyle has vetoed three previous photo ID laws, even though Democrats such as state Sen. Tim Carpenter of Milwaukee supported them saying he's seen "eye opening" public support for the idea.

That backing is based on real evidence. In 2004, John Kerry won Wisconsin over George W. Bush by 11,380 votes out of 2.5 million cast. After allegations of fraud surfaced, the Milwaukee police department's Special Investigative Unit conducted a probe. Its February 2008 report found that from 4,600 to 5,300 more votes were counted in Milwaukee than the number of voters recorded as having cast ballots. Absentee ballots were cast by people living elsewhere; ineligible felons not only voted but worked at the polls; transient college students cast improper votes; and homeless voters possibly voted more than once.

Much of the problem resulted from Wisconsin's same-day voter law, which allows anyone to show up at the polls, register and then cast a ballot. ID requirements are minimal. The report found that in 2004 a total of 1,305 "same day" voters were invalid.

The report was largely ignored, and just before the 2008 election the police department's Special Investigative Unit was ordered by superiors not to send anyone to polling places on Election Day.

In January of this year, Assistant District Attorney Bruce Landgraf, the city prosecutor overseeing election issues, complained that the Milwaukee Police Department was stalling its investigation of voter fraud in the 2008 election. "Sadly, [the prosecution of] several probable cases of genuine voter fraud were harmed by that delay," he wrote in an email to a city elections official that was revealed by the Milwaukee Journal-Sentinel. A spokesman for the Police Department responded that "we have investigated every case that has been forwarded to us."

Wisconsin's bitter partisanship on election issues isn't found everywhere. In neighboring Minnesota, the Democratic legislature and GOP Gov. Tim Pawlenty cooperated this year in passing reforms to address problems from the controversial 2008 recount that handed Democrat Al Franken a U.S. Senate seat.

The legislature approved several reforms proposed by the Center for the American Experiment, a local think tank. They included clarifying what ballots should be included in recounts (to keep the issue out of the courts) and moving towards centralizing absentee ballot counting.

Sadly, it looks as if Congress could follow Wisconsin's example instead. The Milwaukee Police Department's report on the 2004 election concluded "the one thing that could eliminate a large percentage of the fraud" would be to end same-day registration. Today, eight other states have some form of Election Day voter registration: Idaho, Iowa, Maine, Minnesota, Montana, New Hampshire, North Carolina and Wyoming. Montana began Election Day voter registration in 2006, North Carolina in 2007, and Iowa in 2008.

But Wisconsin Sen. Russ Feingold, a Democrat, has introduced federal legislation to mandate same-day registration in every state, claiming the system has worked well in his state. Sen. Chuck Schumer of New York is readying a bill to override the election laws of all 50 states and require universal voter registration—which would automatically register anyone on key government lists. This is a move guaranteed to create duplicate registrations, register some illegal aliens, and sow confusion.

We are in danger of forgetting the lessons of the 2000 recount debacle in Florida. Election laws should be clear, simple, applied equally, and balance ease of voting with the need for ballot integrity. A unanimous Supreme Court warned about the danger of loose election laws when it vacated a Ninth Circuit opinion, which had enjoined the use of Arizona's new voter ID law on the grounds it would disenfranchise voters.

The court made the obvious point that "disenfranchisement" is a two-way street. Fraud, it noted in Gonzales v. Arizona (2006), "drives honest citizens out of the democratic process. . . . [V]oters who fear their legitimate votes will be outweighed by fraudulent ones will feel disenfranchised."

What almost happened in Wisconsin this month—and could happen in Washington later this year—would increase chances of future Florida-style meltdowns and further undermine confidence in our election system.

Mr. Fund is a columnist and author of "Stealing Elections: How Voter Fraud Threatens Our Democracy" (Encounter, 2008).
5)The GOP Needs Candidates with Backbone
By Karen Karacsony

While recently attending a candidate forum, I heard a prominent Republican candidate answer a question about gay marriage with the declaration, "I don't think the government should have anything to do with marriage."


Fellow Republicans, let us be clear: The government has a whole lot to do with marriage. After all, we do not purchase marriage licenses at our local 7-11, but instead receive them from a government office -- and only after governmental officials have received the proper fees and documentation to certify the marriage. In fact, if we were to view a California License and Certificate of Marriage, we would see the uppercase words STATE OF CALIFORNIA at the top of document, followed later by the words (again in uppercase) AUTHORIZATION AND LICENSE IS HEREBY GIVEN TO ANY PERSON DULY AUTHORIZED BY THE LAWS OF THE STATE OF CALIFORNIA. Surely, we can agree that the issuing of marriage licenses is as much a governmental function as the issuing of California driver's licenses.

Did the aforementioned candidate, a former California legislator, not know that marriage and government intersect at some point? I doubt it. Why then, did he answer the way he did? I believe that the reason can be narrowed down to one of two options: Either he is undecided on the issue, or he is hiding something. Neither option attracts voters.

If a candidate is undecided on an issue that has been a news item for more than ten years and that has been the basis for two statewide propositions and several high-profile court cases, then the voter views the candidate as indecisive. And indecisive is not what a voter seeks when selecting his representatives. After all, voters send their representatives to Sacramento to weigh carefully California's issues and then to vote on them. They do not send representatives to Sacramento (or to Washington, D.C., as the case may be) to engage in "cafeteria legislating," whereby they pick and choose the legislation they will vote on. The voter understands that bills are placed before legislators and that decisions must be made. Hence, indecisive candidates repel rather than attract votes.

Let us examine the second possibility: The candidate has made a decision regarding gay marriage but hesitates to declare publicly what his decision is. This too drives away voters. After all, good citizens view the act of voting as a solemn obligation -- as a privilege that our Founding Fathers fought very hard to obtain. Consequently, they do not wish to cast their votes for "strangers hiding dark secrets." Instead, voters prefer candidates who state their positions and then vote accordingly.

Now, some may argue that Democrat candidates are often duplicitous in their campaigning -- if not downright misleading. This may be true, but let us never forget that Democrat candidates have a weapon in their arsenal that conservative candidates lack -- namely, Democrat candidates may "buy votes." That is, Democrat candidates can campaign on promises of exorbitant unemployment benefits, free health care, complimentary school lunches, free college education, etc. Such promises are too tempting to pass up for those voters seeking cradle-to-grave security. And to top it off, socialist-type promises allure the votes of Utopian-minded independents. With such a steady stream of votes, Democrat candidates may run sloppier campaigns than GOP candidates -- without repelling needed voters.

So what are we Republicans to do? I believe that we are to be a party of courage and conviction rather than a party of wimps. Let us examine issues, take stands on them, and then have the courage to announce what it is we believe. Let's stop beating around the bush, playing politics as usual, and grow a backbone. Will we lose voters for the stands we take? In some cases, yes. But ultimately, we will gain voters and members to our party because we will be viewed less as the party of fuzzy nondescripts and more as the party of fearless leaders who have the resolve to make decisions and the decency to tell potential voters what it is we've decided.

The GOP can go the way of the dodo bird in California, or it can save itself from certain extinction (as a viable party, that is). But it can do so only if it stands proudly and puts forth conservative candidates who have the courage of Cato and the virtue of Cicero. The Republican Party has a lot to offer to California. Let's realize it and proudly stand before the electorate, bravely declaring our stands on issues and the rationale behind them.
6) US compromise on Jerusalem - but no breakthrough on talks

Peace talks still face Abbas' "no" Washington sources report that the US Middle East peace envoy George Mitchell presented Israeli prime minister Binyamin Netanyahu Friday, April 23, with a compromise by the Obama administration on Jerusalem.

Instead of a freeze on all Israeli construction in East Jerusalem, Israel is now asked to quietly suspend all building licenses and other permits for just four weeks, to give Mitchell a chance to persuade the Palestinian leader Mahmoud Abbas to accept US-moderated proximity talks.

The White House came forward with this concession, those sources said, to help clear the air in the president's relations with the Israeli prime minister.

Yet Mitchell ends another mission to Jerusalem and Ramallah Sunday, April 25, without breaking new ground. Washington and Jerusalem sources report, notwithstanding the Israel government spokesman's denial, the prime minister did in fact submit to Abbas a secret offer to agree on temporary borders for a Palestinian state on 60 percent of the West Bank. Hoping the offer would go far toward melting the Palestinian leader's resistance to negotiations, Mitchell returned to the Middle East for yet another bid to get them moving.

Abbas, as previously reported, turned the offer down because it came directly from the prime minister - not through the Americans and minus US guarantees. He appealed directly to President Barack Obama to "impose" a solution on the Middle east conflict.

Speaking to members of his Fatah party, he said: “Mr President and members of the American administration, since you believe in this [an independent Palestinian state], it is your duty to take steps toward a solution and to impose this solution."

The flood of pro-Israeli rhetoric from administration officials in the last few days and its willingness to yield partially on Jerusalem is not taken by most American Jewish leaders as a true change of Barack Obama's Middle East policy but rather a PR campaign. Saturday night, April 24, some of them warned that the White House feels the need to ease the crisis marring the atmosphere in its relations with Jerusalem and American Jews without, however, revising its fundamental Middle East policy, which is intrinsically detrimental to Israel.

Some high-placed official sources are also critical of Netanyahu's approach to America's drive for peace talks with the Palestinians. They complain the Israel prime minister insists that every issue is cleared with him in person and holds his closest aides, including his national security adviser Uzi Arad, back from efforts to seek out common ground with their American counterparts.

US officials are aware that defense minister Ehud Barak, who arrives in Washington Sunday for eight days of talks with top American officials, will not be speaking for the prime minister and has not been authorized by him to hold discussions with the Obama administration.
6a)Israel's Right to Exist as a Jewish Homeland
By Salomon Benzimra

The U.S. regularly reiterates its support of Israel's security, but it says nothing about Israel's legal rights. These legal rights originated at the San Remo Conference, and the Resolution passed on April 25, 1920 is enshrined in international law. The commemoration of the ninetieth anniversary of this event will certainly open a new vista on the Middle East conflict.

Our calendars are strewn with special dates that link us to the past. In March we celebrated the two hundredth anniversary of Chopin's birth. Every Fourth of July, we celebrate Independence Day. Remembrance days are important, whether they pay homage to greatness or they unite people in national pride.

But there have been momentous events in recent history that remain unnoticed, if not entirely forgotten. One such event redrew the map of one of the most politically contentious regions of the planet, it shook the preexisting world order, it proclaimed the rebirth of a nation, and it marked the end of the longest foreign occupation in history. Yet few people have ever heard of it.

That event took place ninety years ago in the wake of World War One at the Italian resort town of San Remo. On April 25, 1920, after two days of intense discussions, prime ministers and high ranking diplomats of the victorious Allied powers signed the San Remo Resolution and sealed the destiny of the former Turkish possessions in the Middle East.

The Middle East has been a locus of legal misrepresentations and a cauldron of violence ever since, in part because this landmark Resolution, which initiated further agreements enshrined in international law, has seldom been publicized. An uninformed public allowed often poorly informed politicians to concoct implausible -- dare I say unlawful? -- peace plans, the failure of which is too obvious to ignore.

So on April 25, 2010, we should commemorate the ninetieth anniversary of the San Remo Conference and make the public aware of the crucial decisions that were made then and the effect these decisions should now have on the lands and peoples concerned.

In San Remo -- and for the first time in 1,800 years, since Roman times -- the geographical region known as "Palestine" acquired a legal identity. Even though the boundaries of Palestine were not precisely defined in San Remo, the prevailing idea was to draw them as close as possible to the historical boundaries of the ancient Jewish kingdoms of Israel and Judah. In that regard, the expression "from Dan to Beersheba" was introduced by Lloyd George, the British Prime Minister at the time, and it often appeared in subsequent documents.

By referring specifically to the Balfour Declaration of November 1917 -- which was essentially an expression of British foreign policy -- and by reproducing its wording literally, the San Remo Resolution entrenched the provisions of the Balfour Declaration in international law. Thus, the reconstitution of the Jewish National Home in Palestine received international recognition.

The legal title to Palestine was officially transferred from the League of Nations -- when Turkey was dispossessed of its rights to the region at the Paris Peace Conference a year earlier -- to the Jewish people, who became the national beneficiary under a mandate awarded to Britain, thereby designated as the trustee.

The transfer of title and the sovereignty of the Jewish people in Palestine remain binding in international law to this day. Similarly, equivalent national rights were conferred to the Arabs in both Syria/Lebanon and present-day Iraq under two other transitional mandates awarded to France and Britain, respectively. It should therefore be apparent that the legitimacy of the present Arab states of Syria, Lebanon, and Iraq derives from the same international law which reconstituted the Jewish nation in Palestine.

Besides fulfilling the national aspirations of the Jewish people (Zionism), the San Remo Conference also marked the end of the longest colonization in history. Whereas European powers extended their colonization in Africa, Asia, and the Americas for a period not exceeding four hundred years, Palestine has been occupied and colonized by a succession of foreign powers for about 1,900 years (Romans, Byzantines, Sassanid Persians, Arabs, Crusaders, Mameluks, and Ottoman Turks). This early episode of liberation, which preceded the global decolonization process by more than thirty years, should be welcome by all progressive minds.

The commemoration of the San Remo Conference on its ninetieth anniversary is a different kind of remembrance in that it primarily serves an educational purpose. In fact, the European Coalition for Israel, a non-Jewish European organization based in Brussels, is planning to do exactly that in San Remo on April 24-25, in a two-day official gathering at the very place where the event took place in 1920.

By bringing the San Remo Conference to the fore, the public will be better-informed, opinions will be more solidly founded, and decision-makers might revisit their geopolitical plans.
7)Pakistani centrifuges launched Iran's nuclear program 24 years ago

Ex-foreign minister, Ali Akbar Velayati, revealed for the first time he brought Iran's first centrifuges for uranium enrichment as far back as 1986, escorting them on the flight from Pakistan aboard the private plane of the Ayatollah Ruhollah Khomeini, founder of the Islamic Revolution or Iran.

His disclosure was carried by the semi-official weekly Panjereh Saturday, April 24, according to Iranian sources. Velayati, today one of supreme leader Ayatollah Ali Khamenei's most influential advisers, is in charge of Tehran's nuclear diplomacy and the backroom planning of its tactics for resisting international pressure against its program.

The Panjereh report may therefore be assumed to have an ulterior motive - probably to make trouble between the United States and Pakistan while at the same time showing how the West was too feeble to stall Iran's nuclear program - not just in recent years but for almost a quarter of a century.

Intelligence and counter-terror sources disclose the centrifuges he brought in came with the first Pakistani technical specifications for building a bomb and missiles for their delivery. Velayati did not admit this. Neither did he disclose how much Iran paid for the prize. Sources estimate that around $30 million was handed over to Abdul Qadeer Khan, father of the Pakistani nuclear bomb. A.Q Khan also ran a global nuclear black market in conjunction with the Islamabad government, which was then headed by Gen. Zi ul-Haq, Pakistan's first military ruler.

There are other omissions in the long Velayati interview, such as where Khomeinei's aircraft landed to pick up the centrifuges, which he claims were loaded aboard the Iran-bound flight without the knowledge of the government in Islamabad. He also denies he ever met A.Q. Khan.

The key element of his account is the delivery date of Iran's first centrifuges.
It has always been conventionally assumed that Iran decided to go nuclear after it was defeated by Saddam Hussein's Iraqi forces in 1988. Khomeini's abject capitulation to the ceasefire terms dictated by Iraq was thought to have persuaded him that possession of an atomic bomb would save Iran from these humiliations in the future. However Velayati's new disclosure dispels that assumption, predating the covert creation of Iran's nuclear program by two years when Iraqi missiles were still blasting Iran and leaving whole cities, including districts of Tehran, in ruins.

Setting his Islamic Republic on the road to a nuclear bomb did not deter revolutionary leader Khomeini from maintaining that the Islamic faith bans the use of nuclear arms or any other weapons of mass destruction.

This double standard still governs Iran today. Supreme ruler Khamenei and president Mahmoud Ahmadinejad, consistently argue that nuclear weapons are un-Islamic, while pushing forward their covert plans for a nuclear bomb full tilt.

As for Velayati's colorful past, intelligence sources report he has avoided foreign travel for some years because his name appears on several wanted lists as a mastermind of terror. Argentina, for instance, has a warrant out for his arrest as a suspect in engineering the 1992 bombing of the Israeli embassy in Buenos Aires, the first Middle East terrorist outrage in Latin America, in which 29 people were killed and more than 250 injured.
7)Truman Was Right; Netanyahu Would Be Right
By Ken Blackwell

President Obama's new Nuclear Posture Review has succeeded mightily in muddying the clear waters. He says that we will not use nuclear weapons against a non-nuclear power. Except Iran. Except North Korea. If we are attacked with biological or chemical weapons, we will not retaliate with nuclear weapons. Is this a green light for another attack on the homeland? And what are the former captive nations of Europe supposed to think? Does any NATO member -- like Poland, like Estonia -- sleep more soundly with this ringing declaration of confusion, this uncertain trumpet?

When he was in Japan last fall, Mr. Obama pointedly avoided saying that the U.S. use of nuclear weapons to end the carnage of World War II was justified. The American left -- Barack Obama's base -- has been indicting Harry Truman for decades for dropping atomic bombs on Hiroshima and Nagasaki in August 1945.

Truman faced the horrible prospect of losing 600,000 American lives in an invasion of the Japanese home islands. He also had to consider the real danger of millions Japanese civilian deaths in the combat and from mass suicides. The leftist Truman-haters also never consider the 10,000 allied POWs dying weekly in Japanese captivity.

When Mr. Obama bowed low before Emperor Akihito, it was a tacit apology for all of that. Japan in 1945 was a non-nuclear power. The new Nuclear Posture Review is Obama's elliptical way of saying that Harry Truman was wrong.

Now we come to the mortal peril of Israel. Barack Obama is the most anti-Israel president in U.S. history. He has been willing to excoriate Benjamin Netanyahu's shaky coalition government over Jews building apartments in East Jerusalem while cooing to despots in Riyadh and Cairo. Nobel Peace Prize Winner Elie Wiesel, a liberal supporter of Barack Obama, is in anguish. "Jerusalem is Jewish history," he said in a full-page ad, an open letter to the president. "Jerusalem," this Holocaust survivor said, "is the heart of our heart."

Martin Peretz of the New Republic, another liberal Obama-backer, noted that Obama's stiff-arming of Israel has served only to stiffen Palestinian intransigence. The PLO "quickly surmised that Obama was in their corner and would not push them much. Their surmise turned out to be correct." Former New York Mayor Ed Koch is distraught. He endorsed Barack Obama for president, but now cries: "I weep as I witness outrageous verbal attacks on Israel ... that are being orchestrated by President Obama."

Add to this dangerous mix Mr. Obama's cool and detached analysis of sanctions against an Iranian regime hell-bent on acquiring nuclear weapons. "Sometimes they work, sometimes they don't." Actually, most of the time, they don't work. And they are especially doomed to fail when those who are supposed to be "crippled" and "bitten" by the "tough and smart" sanctions know that there is no muscle behind the bluster. Even the Chairman of the Joint Chiefs of Staff -- Mr. Obama's top military man -- knows that his administration has no clue what to do about Iran.

Mahmoud Admadinejad, the mouthpiece for the Iranian mullahs, repeatedly says he envisions a world without Israel, a world without the U.S. And he responds to Obama's neutering Nuclear Policy Review with withering scorn. He celebrates Iran's unimpeded advance toward nuclear weaponry with open taunting of the toothless U.S. policy.

I believe Truman was justified in that hardest of all presidential decisions. Tens of millions of Americans and Japanese are alive today because Truman had the determination and grit to make that awful decision.

As justified as we were then, Israel would be even more justified in using tactical nuclear weapons now to eliminate the Iranian nuclear threat to the world. Japan in 1945 presented no existential threat to the U.S. Iran is just such a threat -- to Israel, to NATO, and to us.

When the Israelis struck Saddam Hussein's nuclear Osirak plant in 1981, the world howled. Even our U.S. State Department -- under Alexander Haig -- condemned the raid. The anti-Israel majority at the U.N. threatened sanctions against the Jewish state. President Reagan effectively sidetracked sanctions then.

But if Israel had not acted swiftly and effectively against Saddam Hussein then, the United States would not have been able to eject him from Kuwait a decade later with so little loss of American life. Saddam would have become the dominant power in the Mideast. That he did not rain nuclear missiles on Israel in 1991 is wholly attributable to the Israelis' brave and skillful raid of 1981.

Mr. Obama's feckless policies are giving the Israelis no choice. He wasted fifteen months in fruitless overtures to the Iranian terror leaders. He advanced toward them with an open hand; they spit in his open hand. Bullying democratic Israel and coddling terror states is no policy.

April is the month when millions of Jews and their righteous Gentile friends around the world reflect on what it means to be a stateless, powerless, hunted people. Jews remember the Holocaust and say "Never Again." Whether the United States under Barack Obama is with them or not, Israel has a right to act to make sure: Never Again.

Ken Blackwell is a senior fellow at the Family Research Council. He serves on the board of directors of the Club for Growth, National Taxpayers Union, and National Rifle Association.
8)Defeating Radical Islam: The Herculean Strategy
By Raymond Ibrahim

Will the recent killings of al-Qaeda leaders Abu Omar al-Baghdadi and Abu Ayub al-Masri have any tangible effects on the "war on terror"? Vice President Joe Biden — who referred to the slayings as "devastating blows to Al Qaeda in Iraq" — certainly seems to think so.

The situation is reminiscent of when al-Qaeda leader Abu Laith al-Libi was killed in early 2008. Then, Congressman Peter Hoekstra issued a statement saying al-Libi's death "clearly will have an impact on the radical jihadist movement."

And who could forget all the hubbub surrounding the killing of that notorious decapitator, Abu Musab al-Zarqawi. Then, almost every major politician, including President Bush and Iraq's Prime Minister Maliki exulted.

It is, of course, a good thing to eliminate terrorists. But will the deaths of individual Islamist leaders — including Ayman al-Zawahiri or Osama bin Laden himself — eliminate the ideology that creates them in the first place?

History provides an answer:

Consider the progress of the Muslim Brotherhood, the world's largest and oldest Islamist organization. Founded in 1928 in Egypt by Tariq Ramadan's grandfather, Hasan al-Banna, it originally boasted only six members. In the following decades, in part thanks to the radical writings of Sayyid Qutb — whom al-Qaeda quotes liberally in their many writings — the Brotherhood, though constantly clashing with Egypt's government, grew steadily.

As leaders, both Banna and Qutb were eventually targeted and killed by the Egyptian regime. Yet the Brotherhood continued thriving underground. Then, to the world's surprise, the partially-banned, constantly-suppressed Brotherhood managed to win 88 out of 454 seats in Egypt's 2005 parliamentary elections — making them the largest opposition bloc in the government.

After two of its most prominent leaders were killed, after thousands of its members have been harassed, jailed, or otherwise eliminated, today the Brotherhood is stronger and more influential and secure than at any other time in its history.

Palestinian Hamas, itself an offshoot of the Brotherhood, furnishes another example. Founded in 1987 by Sheikh Ahmed Yassin, Hamas has since been labeled a terrorist organization by several governments, including the United States, most notably for its suicide operations against Israel. Yassin was eventually assassinated in March 2004.

The result? Far from fizzling away, Hamas, like the Brotherhood, went on to win a major landslide election in the January 2006 Palestinian parliamentary elections, establishing it even more than previously.

Then, of course, there is the Ayatollah Khomeini — the original poster-boy for radical Islam. Overthrowing Iran's secular government in 1979, Khomeini transformed Iran into a theocratic state — precisely what all Islamists yearn to see for the rest of the world. From precipitating the American hostage crisis to issuing a fatwa condemning a novelist to death to taunting the U.S. —which he dubbed "the Great Satan" — for one decade, Khomeini was the West's bane.

Today, over 20 years after his death, not much has changed in Iran: Sharia law still governs; Sharia-endorsed enmity towards the West still thrives. In fact, the only real difference is that Iran's nuclear aspirations are nearly fulfilled.

There are numerous other historical examples, both past and present, where popular Islamist leaders were either killed (or died naturally), only for their Islamist movements to grow and consolidate more power.

Ayman al-Zawahiri summarizes this phenomenon well. Asked once in an interview about the status of bin Laden and the Taliban's Mullah Omar, he confidently replied:

Jihad in the path of Allah is greater than any individual or organization. It is a struggle between Truth and Falsehood, until Allah Almighty inherits the earth and those who live in it. Mullah Muhammad Omar and Sheikh Osama bin Laden — may Allah protect them from all evil — are merely two soldiers of Islam in the journey of jihad, while the struggle between Truth [Islam] and Falsehood [non-Islam] transcends time (The Al Qaeda Reader, p.182).

In short, Islamists — whether Khomeini, Banna, Qutb, Yassin, bin Laden, Zawahiri, al-Baghdadi, or al-Masri — are not the cause of hostilities; they are symptoms of a much greater cause — the "struggle between Truth and Falsehood [that] transcends time." Individually killing them off — which is nice — only temporarily treats the symptom; it does not permanently eliminate the cause that motivates them.

Thus the West would do well to take a lesson from Hercules' legendary encounter with the multi-headed Hydra-monster. Every time the mythical strongman lopped off one of its serpentine heads, two new ones grew in its stead. To slay the beast once and for all, Hercules had to cauterize the stumps with fire, thereby preventing any more heads from sprouting out.

Similarly, while the West continues to lop off Islamist "monster-heads" — most recently, al-Baghdadi and al-Masri — to achieve true and lasting victory, the fascist ideologies that generate these monster-heads must first be cauterized.

In the meantime, believing that the deaths of individual terrorist leaders (whom are seen as martyrs living in eternal bliss) will somehow hamper the progress of radical Islam is no less erroneous than thinking the deaths of American leaders will hamper the American way of life.

Raymond Ibrahim is associate director of the Middle East Forum, author of The Al Qaeda Reader, and guest lecturer at the National Defense Intelligence College.
9) EurObama:President follows Europe into places Europeans no longer want to go

With the stunning emergence of the consumption-based Value Added Tax (VAT) as a legitimate public policy option, the Obama administration has now all but made it official: There is no European economic idea too extreme for 21st century America. Even if the Europeans themselves are largely headed in the opposite direction.

VAT, first rolled out in 1950s France, is a sales tax on everything that every person or entity buys within a country, with exceptions or reductions carved out for things like food, newspapers, or various links along the industrial supply chain.

Compared to the H&R Block subsidy program that is the US tax code, the VAT is a straightforward way for governments to skim 20% or so off the top of every transaction. By penalizing consumption and not earnings, it encourages savings and resists gaming by well-connected special interests. In an ideal world, you could enact a VAT while slashing America’s corporate income tax rate, which is the globe’s second-highest.

But as the last 18 months of federal misgovernance has aptly demonstrated, we do not live in anything like an ideal world.

The only reason VAT is even on the table right now is that bureaucrats like VAT enthusiast Nancy Pelosi have an appetite for spending that far outpaces Americans’ willingness to cough up their hard-earned dough. Every statehouse and city council across the land is literally out of money, and turning to the only people who can print the stuff: Washington.

The federal government spent $3.5 trillion last year while taking in just $2.1 trillion, producing a deficit-to-Gross Domestic Product ratio of 10%, a level not seen since World War II. By contrast, the European Union requires member countries to keep deficits at 3% of GDP. If America was in Europe, we’d be Greece.

What’s worse for us is that we’ve pretty much given up trying to address the root problem, which is the decade long spending binge initiated by George W. Bush and then tripled down on by Barack Obama. The VAT isn’t a way to streamline a complicated tax code; it’s a new spigot to flood money into the pockets of teachers who can’t be fired, and securities regulators who can’t get enough porn.

The grand irony here is that the very continent we’re scrambling to emulate has been moving aggressively in the opposite direction on taxes and economic policy.

While the US keeps corporate taxes frozen near 40%, EU countries have slashed them down to an average of around 25%. Top marginal income tax rates, which in the US are 35%, are under 25% all across the former East Bloc

As the share of government spending in health care has been steadily increasing in the US, it has been inching downward in Europe. While first Bush and then Obama pushed through massive new public entitlements, governments from Stockholm to Rome have been grappling with real private reform.

Though conservatives especially like to sneer at the democratic socialism of Old Europe, it is precisely those cheese-eaters in France and Vikings up north who have been leading the world in privatization these last two decades, selling off everything from airports to sewage companies.

It was hardly an accident that, in the midst of Washington’s partial nationalization of Detroit automakers, Swedish Enterprise Minister Maud Olofsson announced “The Swedish state is not prepared to own car factories.” With this week’s news that General Motors is “paying back” one set of Troubled Asset Relief Program loans from another pile of TARP money, we can see why Europeans have a lot to teach us about separation of industry and state.

Where Republicans look across the Atlantic and see soft socialists worth avoiding, Democrats see enlightened progressives worth emulating. And it does not matter how little reality conforms to either fantasy.

So now the federal government is pushing to ape Germany and France in paying individuals far-above-market prices for selling their excess solar or wind power back to the electricity grid. The only problem? Those countries are running, not walking, away from those unaffordable programs.

The same dynamic is at play with labor relations. President Obama is on record pushing organized labor’s dream policy of “card check,” which would drastically bump up private sector unionism after decades of steady decline, and he has gone so far as appoint to his bipartisan “deficit commission” the notorious labor honcho Andy Stern.

Meanwhile Germany, which has the tightest labor-management-government relations in the EU, has been aggressively loosening, not tightening, workplace rules.

The fact that America’s most influential public-sector union leader is within a thousand miles of a deficit commission, let alone one that is floating the idea of an American VAT, tells you all you need to know about the relationship between any new consumption tax and fiscal responsibility. Which is to say, there isn’t any.

The solution to unsustainable budget deficits and precarious debt levels remains the same as when Barack Obama took office: Stop spending so much damned money. Until government gets serious about that, trial balloons for gobbling ever-more tax money deserve nothing more than a good swat.

And we’ll be left with a massive exodus of business geniuses to that bastion of capitalism — France.

Matt Welch is Editor in Chief of Reason.

9a)Tea Partiers Racist? Not So Fast
By Cathy Young

Ever since the "Tea Parties" gained national attention, the debate has raged on whether they are a grass-roots protest movement in the proud tradition of American dissent, or a hysterical mob driven by fear, intolerance and selfishness. Recently, two much-discussed surveys -- a CBS/New York Times poll and a multi-state University of Washington poll -- have been bandied about as proof that the leftist caricatures of the Tea Partiers as mean-spirited rich white bigots are accurate. Yet a look at the data suggests that this interpretation is highly skewed by political bias.

In a article titled "The Tea Partiers' racial paranoia," editor Joan Walsh notes that in the University of Washington poll, only 35% of pro-Tea Party whites regarded blacks as "hard-working," 45% as "intelligent," and 41% as "trustworthy." Walsh scoffs, "And Tea Party supporters don't like it when anyone notices the racists in their midst?"

Not so fast. The respondents in the UW poll were asked to rate on a 1-7 scale how intelligent, hardworking, and trustworthy they perceived "almost all" blacks (and, in separate questions, whites, Latinos, and Asians) to be. Whether the findings expose Tea Party bigotry hinges on two things: how the "Tea Partiers'" opinions of blacks compare to their views of other groups, and how their answers compare to those of other, non-Tea-Partying Americans.

The UW researchers' initial analysis compared only whites who were strongly pro-Tea Party and strongly anti-Tea Party, concluding that the latter held a much more positive view of blacks. These data are no longer on the UW website; instead, there are tables for other race-related questions (such as "Over the past few years blacks have gotten less than they deserve"), with separate results for whites who were either neutral toward the Tea Party movement or had never heard of it, as well as for all whites.

But what about the racial stereotyping items? The lead investigator, political science professor Christopher Parker, graciously provided me with the fuller data -- which strongly contradict the notion of the Tea Parties as a unique hotbed of racism.

Thus, while only 35% of strong Tea Party supporters rated blacks as hardworking, only 49% described whites as such. While the gap is evident, these responses are close to those for all whites (blacks are rated as "hardworking" by 40%, whites by 52%). While whites who are strongly anti-Tea Party seem free of bias on this item -- blacks and whites are rated as "hardworking" by 55% and 56%, respectively - this is not true for intelligence and trustworthiness. Whites in every group are less likely to rate blacks than whites as "intelligent" by similar margins: 14 points for Tea Party supporters (45% vs. 59%), 13 points for all whites (49% vs. 62%), 10 points for Tea Party opponents (59% vs. 69%). On "trustworthy," the gap is smaller in the pro-Tea Party group (41% vs. 49%) than in the anti-Tea Party group (57% vs. 72%). One could write headlines about the "racial paranoia" of white liberals who consider blacks less trustworthy than whites!

The endurance of racial stereotypes in this day and age is disturbing; but Tea Party supporters differ little in this regard from mainstream Americans. (It is also worth noting that, as in many other surveys, Asian-Americans in the UW poll are rated much more positively than whites.)

Compared to middle-of-the-road whites, Tea Party supporters show far more agreement with the statement that blacks should work their way up "without special favors" the way other minorities such as Italians and Jews did, or that blacks would be as well off as whites if they worked harder. The standard left-of-center view, shared by the UW researchers, is that such attitudes represent a subtler form of racism, or "racial resentment." In some cases, that is surely true. Yet these sentiments may also reflect a genuinely race-neutral belief in self-reliance and self-help -- or the view, shared by many black commentators, that the black community's problems are partly rooted in damaging behavioral and cultural patterns.

John McWhorter, a noted black scholar and author whose works include the 2000 book, Losing the Race: Self-Sabotage in Black America, says that "the idea that 'racism' is behind the Tea Partiers is based on a lazy and vain extension of the term 'racism' to meaning 'that which many black people would not approve of.'" According to McWhorter, "The position that the government does too much to help black people is not necessarily one based in inherent bias against people with black skin -- it can be argued as a reasonable proposition based on the spotty record of social programs since the 1960s."

The other charge against Tea Partiers is that they are not "the people" but the privileged defending their privilege. Walsh gleefully points out that in the Times/CBS poll, 12% of Tea Party sympathizers had an annual income over $250,000 -- forgetting to mention that so did 11% of all Americans. Washington Post columnist E.J. Dionne asserts that "Tea Party enthusiasts ... side with the better-off against the poor": 73% of them, versus 38% of all Americans, say that "providing government benefits to poor people encourages them to remain poor." (Of course, they couldn't possibly be sincere in the belief that poor people are often harmed more than helped by government programs.)

What, then, do the new polls tell us about the Tea Partiers -- or, at least, Tea Party sympathizers? (In the Times/CBS poll, only one in five self-identified Tea Party supporters reported actual involvement in Tea Party activities.) They are mostly white and more likely to be male (59%); three-quarters are 45 and older, compared to half of all Americans. They are more religious than average, though not dramatically so: 39% are evangelical Christians and 38% attend church every week, while the figures for all Americans are 28% and 27%.

Not surprisingly, the Tea Partiers are disproportionately Republican and right-wing: 39% consider themselves "very conservative" and 34% "somewhat conservative" (compared to 12% and 24%, respectively, of the general population). Their conservatism, moreover, tends to be more authoritarian than libertarian: In the UW poll, pro-Tea Party respondents are much more likely than others to agree that the government should be able to detain suspects indefinitely without trial and to tap phones if there is a threat of terrorism.

In other words, the Tea Party movement is mainly conservative -- which is hardly the stuff of headlines. That does not make it a haven for racists.

While the Tea Parties raise important questions about the growth of government, they certainly have their darker side: too often, they promote the politics of personal attack and demonization, of hyperbole and hysteria (though they are no more guilty of this than were Bush-era protesters on the left). Yet to respond with more hyperbole, demonization and hysteria directed at the Tea Partiers themselves will not address the problems but only compound the damage.

Cathy Young writes a weekly column for RealClearPolitics and is also a contributing editor at Reason magazine.
10 )A Plague of ‘A’ Students : Why it’s so irksome being governed by the Obami.
BY P. J. O'Rourke

Barack Obama is more irritating than the other nuisances on the left. Nancy Pelosi needs a session on the ducking stool, of course. But everyone with an ugly divorce has had a Nancy. She’s vexatious and expensive to get rid of, but it’s not like we give a damn about her. Harry Reid is going house-to-house selling nothing anybody wants. Slam the door on him and the neighbor’s Rottweiler will do the rest. And Barney Frank is self-punishing. Imagine being trapped inside Barney Frank.

The secret to the Obama annoyance is snotty lecturing. His tone of voice sends us back to the worst place in college. We sit once more packed into the vast, dreary confines of a freshman survey course—“Rocks for Jocks,” “Nuts and Sluts,” “Darkness at Noon.” At the lectern is a twerp of a grad student—the prototypical A student—insecure, overbearing, full of himself and contempt for his students. All we want is an easy three credits to fulfill a curriculum requirement in science, social science, or fine arts. We’ve got a mimeographed copy of last year’s final with multiple choice answers already written on our wrists. The grad student could skip his classes, the way we intend to, but there the s.o.b. is, taking attendance. (How else to explain this year’s census?)

America has made the mistake of letting the A student run things. It was A students who briefly took over the business world during the period of derivatives, credit swaps, and collateralized debt obligations. We’re still reeling from the effects. This is why good businessmen have always adhered to the maxim: “A students work for B students.” Or, as a businessman friend of mine put it, “B students work for C students—A students teach.”

It was a bunch of A students at the Defense Department who planned the syllabus for the Iraq war, and to hell with what happened to the Iraqi Class of ’03 after they’d graduated from Shock and Awe.

The U.S. tax code was written by A students. Every April 15 we have to pay somebody who got an A in accounting to keep ourselves from being sent to jail.

Now there’s health care reform—just the kind of thing that would earn an A on a term paper from that twerp of a grad student who teaches Econ 101.

Why are A students so hateful? I’m sure up at Harvard, over at the New York Times, and inside the White House they think we just envy their smarts. Maybe we are resentful clods gawking with bitter incomprehension at the intellectual magnificence of our betters. If so, why are our betters spending so much time nervously insisting that they’re smarter than Sarah Palin and the Tea Party movement? They are. You can look it up (if you have a fancy education the way our betters do and know what the unabridged Oxford English Dictionary is). “Smart” has its root in the Old English word for being a pain. The adjective has eight other principal definitions ranging from “brisk” to “fashionable” to “neat.” Only two definitions indicate cleverness—smart as in “clever in talk” and smart as in “clever in looking after one’s own interests.” Don’t get smart with me.

The other objection to A students is what it takes to become one—toad-eating. A students must do what teachers and textbooks want and do it the way teachers and texts want it done. Neatness counts! A students are very busy.

Such brisk apple-polishing happens to be an all-too-good preparation for politics. This is because a student’s success at education and a politician’s success at politics are measured mostly by input rather than outcome. Yes, one got elected. Yes, the other became class valedictorian. But to what end? It can take decades to measure the outcome of an education. Did the A student at architecture school become a respected partner at Skidmore, Owings and Merrill, or did he become Albert Speer? Likewise with politics. Did Woodrow Wilson’s meddling in Europe wreak havoc upon the globe? We wouldn’t know for 20 years. Did Franklin Roosevelt’s New Deal totally destroy the fabric of American society? We’re not absolutely certain even now. Meanwhile Woodrow Wilson, FDR, the class valedictorian, and Albert Speer were inputting like crazy.

The C student starts a restaurant. The A student writes restaurant reviews. The input-worshipping universe of the New York Times is like New York itself—thousands of restaurant reviews and no place we can afford to eat.

Let us allow that some intelligence is involved in screwing up Wall Street, Washington, and the world. A students and Type-A politicians do discover an occasional new element—Obscurantium—or pass an occasional piece of landmark legislation (of which the health care reform bill is not one). Smart people have their uses, but our country doesn’t belong to them. As the not-too-smart Woody Guthrie said, “This land was made for you and me.” The smart set stayed in fashionable Europe, where everything was nice and neat and people were clever about looking after their own interests and didn’t need to come to America. The Mayflower was full of C students. Their idea was that, given freedom, responsibility, rule of law and some elbow room, the average, the middling, and the mediocre could create the richest, most powerful country ever.

Thus in America nobody loves a smart-ass. What’s interesting about Obama is that he didn’t start out being one. Lips (and academic records) are sealed at Occidental College and Columbia, but Obama doesn’t seem to have been an A student as an undergraduate. He learned to “make it or fake it” at Harvard Law where he graduated magna cum laude. Worse than an A student is somebody pretending to be one, witness Al Gore.

However, perhaps I should hold my tongue and temper my ire. I have just received my junior high school daughter’s report card. She’s an A student. I questioned her, and it turns out so is every one of her girlfriends including the numbskull jock and the complete feather-brain who’s besotted with Justin Bieber.

I can’t imagine what kind of input my daughter’s school is measuring (although I assume my daughter delivers it via Twitter). But when input is valued enough, America turns into that blissful land of social justice so desired by Nancy Pelosi, Harry Reid, and Barney Frank—outcomes are equal at last. I’m old-fashioned in my criticism of Barack Obama. He graduated from Harvard Law in the 1990s, barely yesterday. I’d forgotten the wonderful progressiveness of the American educational system. We’re all A students now.

Friday, April 23, 2010

Sweet Tammys Makes Debut In Giant Eagle!

Sweet Tammy's debut has been well received. They sold on Wednesday as much as Giant Eagle normally sells on their biggest day - Friday. Re-ordering has increased accordingly.

See display below.

Go Sweet Tammys.
A hesitant president when it comes to Iran - an active whirling dervish president when it comes to crippling freedom and democracy.

Obama also wants the nation to experience 'labor' pains.

"A democracy is nothing more than mob rule, where fifty-one percent of the people may take away the rights of the other forty-nine. " Thomas Jefferson.

And Tom never met Barak. (See 1 and 1a below.)
I might be obsessed over what I perceive is Obama's incompetency but his obsession over Israeli settlements makes for bad policy and has a direct bearing on world peace.

One of my friends is also concerned and went to the dictionary to find the word that express es why. (See 2 and 2a below.)
Gen. Jones has the answer - trust in our messiah and the fact that Iran will not drop a nuclear bomb! (See 3 below.)
Decision moment. 'Written before it was decided not to reappoint Ashkenzai.' (See 4 below.)
Will Israeli-U.S. ties eventually strengthen after the recent confrontation? Will Netanyahu have to cave? Will Netanyahu cave? Will Obama retrench?

Glick, meanwhile, feels compelled to explain to our president why his treatment of Israel is unwarranted and counter-productive. She reminds him what a strong Israel means for the region and for our own interests. Doubt Obama is listening. Obama sees the world, our nation's role and its relationship with allies through a different pair of eyes - myopic at best, blind at worst.

He also has a collegiate view of our enemies. Change is in the air but it could be change we and the world may regret. (See 5 and 5a below.)
Rush Limbaugh is the radio talk host Liberals love to hate. Even those who have never listened to what he says.

Granted, Rush is part theatre but he is also very good at articulating Conservative views. He is consistent and gets under the skin of Liberals because he is logical and challenges their precious touchy feely squishy thinking with facts they find difficult to dispute.

So they attack him. (See 6 below.)
Meanwhile my friend, Kim Strassel, points out Republicans are at war with themselves. The question to be answered is can Conservative Republicans, as evidenced by Rubio, run and win or must Republicans be like Democrats both to win and govern and then eventually lose because they are not Conservative.

Shakespeare gave the answer: "To Thine Own Self Be True and Then as Night Follows Day Thou Canst Be False To Anyone."(See 7 below.)
The financial markets need controlling. Is Obama the fireman or the undertaker?

One thing is for sure - Obama, the government and all the prescient bureaucrats are going to rule out future recessions. (See 8 and 8a below.)
1)Iran: Doing Nothing Is Not an Option
By Peggy Shapiro

Iran is heading at breakneck speed toward becoming a nuclear power, thereby endangering its neighbors, setting off an arms race in the volatile Middle East, supplying dirty bombs to terror groups, threatening U.S. allies in Europe, and even targeting the U.S. American people are asking the U.S. government to do something, but President Barack Obama has opted to do nothing, and that's not an option we can live with.

Just days after a memo by Secretary of Defense Gates confirmed what many suspected -- the U.S. has no plan to head off Iran's nuclear ambitions -- an unclassified Defense Department report announced that Iran may be able to build a missile capable of striking the United States by 2015. Since we are not privy to the details of Iran's nuclear program, the timeline may even be a little earlier. Well before that date, Iran will be able to launch a nuclear attack against Italy or Poland or France, and certainly against U.S. troops in Afghanistan and Iraq. Even earlier, the leading terror-sponsoring state will have the highly enriched fuel necessary for a portable device, which can be detonated in any city in the world.

Once Iran has nuclear arms, the world as we know it will change. Yet the White House offers nothing but empty threats. The president has drawn a number of lines in the sand for deadline dates by which Iran must change its course "or else!" When Iran defied those deadlines, the U.S. responded with a resounding nothing. Even when Obama offered a carrot (with no stick) in a proposal to enrich uranium for Iran in return for a reduction of Iran's nuclear stockpile, Iran rejected the deal. The administration did nothing as Tehran continued perfecting its bombs, warheads, and delivery systems. Obama and Secretary of State Clinton have vowed that Iran will not be allowed to become a nuclear state, but they have not spelled out what the United States is willing to do to stop it. President Ahmadinejad does not seem to be quaking in fear each time the U.S. shakes a finger and blusters that a nuclear Iran is "unacceptable."

Obama not only refuses to act, but he blocks any meaningful action by Congress. Today, the Iran Refined Petroleum Sanctions Act (IRPSA), the only bill with some actual teeth in it, is languishing in conference committee. The bill targets Iran's dependence on foreign oil imports. It tells companies who supply, ship, or insure shipments of refined petroleum to Iran that they have a choice: Do business with Iran, or do business with the U.S. While Iran is the fourth-largest oil exporter in the world, it imports a reported 40% of its gasoline and another 11% of its diesel fuel. Even though IRPSA passed the Senate with a unanimous vote and got an overwhelming majority of 412 votes in the House, it has been stuck in conference since December. Representative Mark Kirk (R-IL) told, "The Obama administration is pushing Congress to postpone action on the bill[.]" The House and Senate issued letters to President Obama urging him to impose "crippling sanctions" on Iran. The letters further urge the president to sanction Iran's Islamic Revolutionary Guard Corps, Iran's banking system, and Iran's ability to import refined petroleum. The bipartisan House letter was spearheaded by Reps. Jesse Jackson, Jr. (D-IL) and Mike Pence (R-IN), while the bipartisan Senate letter was led by Sens. Charles Schumer (D-NY) and Lindsey Graham (R-SC). The administration is hoping for international action through the U.N., which is another way of saying that he will do nothing.

Actions have consequences, and so does inaction. Many share Kirk's fear that "...the United States is resigning itself to a nuclear Iran[.]" Senator Joe Lieberman warns that "we are losing the real-world fight to prevent rogue regimes like Iran from acquiring nuclear weapons. If Iran continues on its current trajectory and crosses the nuclear threshold, it will inflict irreparable harm on the global nonproliferation regime."

President Obama, who is not above picking fights with banks, insurance companies, Wall Street, doctors, Rush Limbaugh, anyone who earns over $250,000 a year, churches, charities, and Israelis who build homes in Jerusalem, gives free reign to one of the most dangerous players in the world. Embroiled in numerous petty battles, the president of the United States does nothing about the single biggest threat that confronts the world today. Doing nothing emboldens our enemy and weakens both the U.S, and our friends. It is the option that could cost us our lives, and certainly not one we can live with.

President Obama must live up to his own rhetoric:

I think what American people are asking is, do you just want government to do nothing, or do you want it to do something? If you want it to do something, then we can have a conversation. But doing nothing, that's not an option from my perspective.
1a)Fix Is On by Obama and Congress in Union Fight
By Bernie Reeves

President Obama is setting a record for proclamations to alter the shape of American society. Every few weeks there is another edict, beginning after his victory with moving the Census from Commerce to the White House in order to jigger the figures to his political liking. Then came the TARP stimulus plan. As debt is repaid, the money is remaining in the hands of the White House rather than going to reduce the frightening public debt.

Then came the health care "overhaul"; climate change initiatives; the out-of-character call for offshore drilling; the announcement that we would increase troop strength in Afghanistan (but wiring the move for doom with a public withdrawal date); reductions in U.S. nuclear weapons capability; announcing the closing of Gitmo; the prosecution of CIA operatives whose only crime was to do their job; insulting our allies Great Britain and Israel; the move to try terrorist suspects in open court; and the presidential order to avoid identifying the enemy in the war on terrorism, a politically correct maneuver that smiles on the machinations of the radical scholars.

To fund his reordering of power in the midst of a steep economic downturn, Obama has signed into law 25 tax increases totaling $670 billion over the next ten years, according to a report issued by the House Ways and Means Committee. And Paul Volcker and Nancy Pelosi -- reacting to the reality that increased income taxes cannot save the country from going broke -- are pushing a Value Added Tax, the most pernicious of levies that will empower the IRS to enter places of business unannounced to demand records and enforce compliance.

Accompanying the crescendo of taxes, edicts, and thinly disguised manifestos is an undertow of societal tectonics that will rearrange the free-market system beyond our ability to salvage it. The steady advance of unionization in the public sector under Obama -- and the use of federal power to increase organized labor in the private sector -- is leading the U.S. to the edge of syndicalism, the takeover of capitalism by unions for the purpose of political control.

Like most Obama initiatives, the unionization agenda is counter to reality. Unions have been losing ground in the private sector for forty years, with membership today at only 7% of workers in the private sector. Obviously, unions are not popular in the rank and file of workers. Today, there is a rising percentage of public-sector union workers compared to a decline in private-sector ones.

Obama is close to Andy Stern of the Service Employees International Union, who is charging ahead to force union membership on every government employee, especially health care workers -- a goal the White House is pushing as part of the "overhaul" of health care. And state employees in non-union states are seeking affiliation with the SEIU, waiting for the big day when they can contravene local statutes and organize openly with full union recognition.

That day is here. The Public Safety-Employer-Employee Cooperation Act of 2009 passed the House in 2009 but did not make it to the Senate vote for various extraneous reasons. But it's back, and it will pass the House and Senate in this session of Congress, lifted by a Democrat majority anxious to move on the bill before November, when it appears that the composition of both Houses will change significantly.

The bill is alarming. According to the National League of Cities, the Act violates the National Labor Relations Act of 1934 that recognized the separation of federal authority over collective bargaining within the states. The seventeen states that prohibit unionization of public-sector workers will be invaded and held hostage to a federal law that tosses aside what's left of the sanctity of states' rights and allow policemen, firefighters, parole and judicial officers, prison guards, and medical technicians to join a labor union. Obviously, other local government workers will demand the same right. Before you can say Jimmy Hoffa, unions will have penetrated the very marrow of government services everywhere -- with potentially catastrophic results.

According to the Center on Budget and Policy Priorities, states are projecting collectively a $196 billion deficit for 2010. Allowing unions to organize local government will add increased fiscal demands at a difficult time. An example is Vallejo, CA, near San Francisco, which filed a bankruptcy petition citing salaries and benefits for unionized city workers that represented 75% of the of the general fund budget. Fortunately, the bankruptcy court rejected the contention of the unions that the city was obligated to continue collective bargaining for four more years.

It's bad enough that the impending bill violates states' rights and empowers unions to infiltrate cities and counties to unionize government workers, but another edict from the Obama White House adds a federal order mandating that all U.S. government contracts in excess of $25 million can be performed only by firms with unions or a collective bargaining agreement.

It's a one-two punch -- forced local government unionization and a federal edict to ensure union power on government contract jobs. It looks like the unions win in a TKO.

Bernie Reeves is editor and publisher of Raleigh Metro Magazine.
2)Israeli-Palestinian peace isn't the Mideast's magic cure
By Avi Issacharoff

Andrew Exum, a brilliant young American researcher recently posted a quite justifiably critical post concerning our blog , saying we were focusing too much on the Israeli-Palestinian conflict while disregarding broader Middle East strategic issues. Problem is, that it isn't only us doing it, with the whole of the American administration seemingly coming down with Jerusalem Syndrome. At times it appears that the administration's sole focus in the Middle East is the freeze of 1,600 housing units planned to be built in the Jerusalem neighborhood of Ramat Shlomo, the location of which even veteran Jerusalemites are hard pressed to pinpoint.

Instead of demanding both sides to "sit and talk," the U.S. administration is obsessed, working in every possible way to force a construction freeze in the East Jerusalem's Jewish neighborhoods on Prime Minister Benjamin Netanyahu. Netanyahu had already clarified that that was not going to happen. But, if only to appease U.S. President Barack Obama, the PM pulsed out the new/old idea published today in Haaretz of recognizing a Palestinian state within temporary borders while postponing the discussion over Jerusalem's future status.

The Palestinian Authority finds the idea completely unacceptable. Palestinian officials were quick to protest that possibility anytime anyone on the Israeli side toyed with the thought of a Palestinian state in temporary borders, clarifying that the Palestinians would not accept it. That is also expected to be the reaction in this case, and possibly the reaction Netanyahu was going for. To divert the fire from Israel while focusing international public opinion on the Palestinians refusal to negotiate and even to declare statehood. It is as if Netanyahu is saying: "Gentlemen, Israel agrees to a Palestinian state," taking the sting out of PA Prime Minister Salam Fayyad's plan to declare a Palestinian state along 1967 borders by August 2011. Netanyahu could then point his finger at PA President Mahmoud Abbas and his aides, saying "You see, I told you. It's their fault. They're not interested, and continue to miss out on chances for peace."

It's understandable why the Palestinians would reject a Palestinian state within temporary borders. They have witnessed the Jewish population in East Jerusalem and the West Bank triple itself since 1993, despite signing the Oslo Accords. As far as they're concerned, that which begins as temporary could quickly become permanent, especially in the face of Israel's settlement policies. But with such an erudite argument at hand, Netanyahu succeeds in creating at least the semblance of a desire to reach a diplomatic breakthrough, while painting the Palestinians as Peace deniers. Again.

And now, back to the U.S. administration. The way that things look right now, a peace deal won't be achieved even if Israel and the PA decide on re-launching peace talks. And even if such an agreement is reached in the next two years, both sides would still be miles away from resolving the issues the White House and the State Department find convenient to overlook at the movement. Hamas rules Gaza and isn't going anywhere. Hezbollah has a tight grip on Lebanon and the continuing influx of arms from Syria maintains the fears of another war between Israel and its neighbor to the north. And, of course, Iran, continues its race to grab hold of nuclear weapons. But the U.S. administration feels it has found the magic cure for all of the Middle East's symptoms peace between Israel and the Palestinians; and in the case of Iran, peace between Israel and Syria.

Thus, Chairwoman of the United States Senate Select Committee on Intelligence Dianne Feinstein, when discussing the high probability that Hezbollah received Scud surface-to-surface missiles, inexplicably said that there's "only one thing that's going to solve it, and that's a two-state solution." Only, the portrayal of the current situation in such a manner is an insult to Hezbollah as well as, more importantly, to the intelligence of the American administration. No, the founding of a Palestinian state would not solve the problem of Hezbollah's presence in Lebanon one bit, or do anything to quench Iran's nuclear ambitions. Just a few days ago Jordan's King Abdullah II said that there wouldn't be a need for nuclear weapons at all one Israel and the Palestinian sign a peace deal. That too, is just pulling wool over one's eyes.

National Security Advisor Jim Jones went as far as telling the highly regarded Middle East Institute that "peace between Israel and Syria, if it is possible, could have a transformative effect on the region," adding that advancing Middle East peace would also help prevent Iran "from cynically shifting attention away from its failures to meet its [nuclear] obligations." In some respects General Jones is correct. Peace between Israel and Syria would tone down Iran's influence on other Middle Eastern nations. However, Syria is showing no signs of having the least interest in peace, and is blatantly ignoring Washington when it comes to its Hezbollah-bound weapons shupments. Moreover, even an Israel-Syria peace agreement won?t stop Iran's efforts to achieve an atomic bomb. On the contrary, it may escalate them. A diplomatically-isolated Iran won't hurry to pass over nuclear weapons that could save it from an Iraq-like fate.

The U.S. administration tends to forget all this. It creates the false pretence that it all depends on Israel alone and on the ability to reach a peace agreement with the Palestinians. That, at best, is an inaccuracy. As Aaron Miller, a former member of President Bill Clinton's peace team, who isn't suspected of being too supportive of Netanyahu, wrote in Foreign Policy this week, the U.S. has more pressing issues than the Israeli-Palestinian conflict such as, for example, Iraq, Afghanistan as well as, of course, Iran. Unfortunately, none of those issues would be solved even if peace is achieved between Israel and the Palestinians.

And as to my colleague Andrew Exum, we promise, regardless of the U.S. administration, to focus more on other Middle East issues. You never know, someone in the White House might even get inspired?

2a) I took the trouble to go to Google and it is there just like the article describes it below.


Word of the Day: Dhimmitude

Had never heard the word until now---Type it into Google and start reading…Pretty interesting.

Note that Muslims and certain other religions are exempt from the Obamacare penalties and it is supported by law. We are surrendering from within! The boy is leading us right down the path to total control!

Dhimmitude is the Muslim system of controlling non-muslim populations conquered through jihad. Specifically, it is the TAXING of non-muslims in exchange for tolerating their presence AND as a coercive means of converting conquered remnants to islam.

The ObamaCare bill is the establishment of Dhimmitude and Sharia muslim diktat in the United States . Muslims are specifically exempted from the government mandate to purchase insurance, and also from the penalty tax for being uninsured. Islam considers insurance
to be "gambling", "risk-taking" and "usury" and is thus banned. Muslims are specifically granted exemption based on this. How convenient. So I, Ann Barnhardt, a Christian, will have crippling

IRS liens placed against all of my assets, including real estate, cattle, and even accounts receivables, and will face hard prison time because I refuse to buy insurance or pay the penalty tax.

Meanwhile, Louis Farrakhan will have no such penalty and will have 100% of his health needs paid for by the de facto government insurance. Non-muslims will be paying a tax to subsidize muslims.

Period. This is Dhimmitude.

Dhimmitude serves two purposes: it enriches the muslim masters AND serves to drive conversions to islam. In this case, the incentive to convert to islam will be taken up by those in the inner-cities as well as the godless Generation X, Y and Z types who have no moral
anchor. If you don't believe in Christ to begin with, it is no problem whatsoever to sell Him for 30 pieces of silver. Lots of people will say "Sure, I'll be a muslim if it means free health insurance and no taxes. Where do I sign, bro?"
3) Friday, April 23, 2010 : National Security Advisor James L. Jones: Iran won't use nukes if they have them

What's the danger if Iran has nuclear bombs?

"A nuclear-armed Iran could transform the landscape of the Middle East,
precipitating a nuclear arms race, dramatically increasing the prospect and
danger of local conflicts, fatally wounding the global non-proliferation
regime, and emboldening the terrorists and extremists who threaten the
United States and our allies."
National Security Advisor James L. Jones

So here is what National Security Advisor James L. Jones thinks the downside
is if Iran has nukes:

#1. Nuclear arms race - both on a regional and global level
#2. Local conflicts - apparently with conventional weapons.
#3. "Emboldening the terrorists and extremists"

What's missing from the list?


Bottom line question: Does National Security Advisor James L. Jones
entertain the possibility that a nuclear-armed Iran might actually use a
nuclear weapon?

This is not an academic question.

When you weigh the costs of stopping Iran from getting the bomb against the
benefits, the cost-benefit equation is profoundly different if you think
that Iran might nuke someone.

If National Security Advisor James L. Jones and the rest of the decision
makers in Washington thought that Iran might nuke someone if they got the
bomb they would be willing to pay almost any price to make sure this didn't

But they don't.

And, unfortunately, Iran knows this.]

Remarks by National Security Advisor James L. Jones at the Washington
Institute for Near East Policy

Michael Stein Address, Soref Symposium 25th Anniversary Soref Gala

Thank you all very much. Thank you, Martin Gross, for your very kind
introduction, and for your leadership as the Institute’s new president.
You have 25 years of Institute history to live up to…and 25 years of
Institute presidents watching to make sure you get it right.

Thank you Rob Satloff, for welcoming us tonight.

On this, your 25th anniversary, let me commend all those who have made
the Washington Institute for Near East Policy the respected institution
it is today…especially past presidents Barbi Weinberg, Fred Lafer,
Michael Stein and your Chairman Howard Berkowitz.

I also want to thank your distinguished Trustees and Board of
Advisors—which has one empty chair tonight because of the recent loss of
one of your longtime Advisors…a public servant…a true
warrior-diplomat…and one of my predecessors as Supreme Allied Commander
Europe. Tonight, we remember General and Secretary of State Alexander Haig.

For a quarter-century…through five different administrations…this
Institute has provided an invaluable service, to policymakers and the
American people. Instead of partisanship, you’ve given us scholarship.
Instead of simply recycling old arguments, you’ve given us fresh and
objective analysis. So I want to thank Rob and your entire staff…and 25
years of scholars and fellows…for your insights and your contributions.

I’ve seen it myself. A few years ago, I served as Special Envoy for
Middle East Regional Security. Our work was strengthened by the advice
and counsel of many experts, including one of our special advisors—and
your Senior Fellows—Matthew Levitt. We benefited from discussions with
other Institute Fellows, including David Makovsky and Dennis Ross. And,
of course, President Obama’s Administration was all too happy to steal
Dennis away from you, and he is now helping to lead our efforts in the
region at the National Security Council. And I believe Dennis is here

I especially want to thank the Institute for your work on behalf of the
effort that President Obama called for in his speech last year in
Cairo—that is, greater understanding between the United States and
Muslim communities around world. The President called for “a sustained
effort to listen to each other, to learn from each other, to respect one
another, and to seek common ground.”

In that spirit, you’ve been promoting mutual understanding for many
years…whether it’s welcoming to Washington scholars from Cairo to
Baghdad…your Arabic-language website…Rob’s weekly Arabic-language
interview show…or his recent documentary recounting the little known
story of how Arabs saved Jews from the Holocaust.

So thank you all…for analysis that has strengthened our national
security…and for promoting the mutual understanding that can lead to a
safer, more secure world for us all. And I wish you continued success,
because, frankly, our nation—indeed, the world—needs institutions like
yours now more than ever.

Indeed, since taking office, President Obama has made it clear that his
first and foremost priority is the safety and security of the American
people. To this end, he has pursued a new era of American leadership
and comprehensive engagement based on mutual interests and mutual respect.

In the coming weeks, we’ll be releasing a new National Security Strategy
that formalizes the President’s approach—an approach that is rooted in
and guided by our national security interests. These interests are
clear and enduring.

Security—we have an enduring interest in the security of the United
States, our citizens and U.S. allies and partners; Prosperity—we have an
enduring interest in a strong, innovative and growing U.S. economy in an
open international economic system that promotes opportunity and
prosperity; Values— we have an enduring interest is upholding universal
values, at home and around the world; and, International Order—we have
an enduring interest in an international order advanced by U.S.
leadership that promotes peace, security and opportunity through
stronger cooperation to meet global challenges.

Security, prosperity, universal values, and an international order
advanced by American leadership—these are the interests that the
President and his Administration are working to advance around the world
every day, including in the Middle East.

To strengthen our security, we are responsibly ending the war in Iraq.
As evidenced by the successes this weekend of military operations
against al Qaeda in Iraq, Iraqi security forces are in the lead. The
United States will end our combat mission by the end of August. In
accordance with the U.S.-Iraq Security Agreement, all U.S. forces will
be out Iraq by the end of next year. Now, the most immediate challenge
is for Iraqi political leaders to form an inclusive and representative
government. As they face the longer-term challenges of expanding
prosperity and opportunity, the Iraqi people will continue to have a
partner in the United States.

In Afghanistan and beyond, we have refocused the fight against al Qaeda
and its extremist allies. We’ve struck major blows against their
leaders, who are now hunkered down in the tribal regions along the
border between Afghanistan and Pakistan. At the same time, we’re
forging partnerships that isolate extremists, combat corruption and
promote good governance and development—all of which improves the daily
lives of ordinary people and undermines the forces that fuel violent

And to confront the greatest threat to global security—the danger that
terrorists will obtain nuclear weapons or materials—the President hosted
last week’s historic Nuclear Security Summit, where 46 nations joined
the goal of securing the world’s vulnerable nuclear materials in four years.

To advance our prosperity, the President has worked with allies and
partners to expand the global economic recovery…pursue growth that is
balanced and sustained…launched a national export initiative to double
American exports and support two million American jobs…. …and reformed
the international economic architecture so that the G-20 is now the
premier forum for international cooperation.

And as he promised in Cairo, next week the President will host a Summit
on Entrepreneurship with business leaders and entrepreneurs from more
than 50 nations—including many Muslim-majority countries and Israel—to
promote our common prosperity.

To advance values that are universal, the President has made it clear
that the United States will uphold our ideals both at home and abroad,
including the right of people to have a say in how they are governed. As
the President said in Cairo, the U.S. is committed to supporting
governments that reflect the will of the people, because history shows
that these governments are more stable, more successful, and more
secure. So political reform and effective and accountable governance
will remain core elements of our vision for the future, in the Middle
East and around the world.

And to advance a just and sustainable international order, the United
States is working to ensure that both the rights and responsibilities of
all nations are upheld. For example, the new START Treaty with Russia
is part of the President’s comprehensive agenda to pursue a world
without nuclear weapons—an agenda that reflects the three pillars of the
Nuclear Nonproliferation Treaty: nations with nuclear weapons will
reduce them, nations without nuclear weapons will forsake them, and the
recognition that nations have a right to peaceful nuclear energy.

Whether or not the rights and responsibilities of nations are upheld
will in great measure determine whether the coming years and decades
result in greater security, prosperity and opportunity—for Americans and
for people around the world.

Perhaps nowhere do we see this more than in the Middle East, where we
face two defining challenges that I want to touch on tonight: preventing
Iran from acquiring nuclear weapons and the means to deliver them, and
forging a lasting peace between Israelis and Palestinians as part of a
comprehensive peace in the region.

When President Obama took office, Iran had already assembled thousands
of centrifuges and accumulated nearly a bomb’s worth of low enriched
uranium. Iran was in active violation of five UN Security Council
Resolutions. Moreover, Iran’s sponsorship of terrorist actors in Iraq,
Lebanon, and Gaza signaled a continued determination to sow its brand of
violence and coercion across the Middle East.

Clearly, a policy of not engaging Iran did not work. That is why
President Obama made clear his commitment to engage Iran on the basis of
mutual respect on the full range of issues that divide our countries. As
the President repeatedly said, he was under no illusions. He knew it
would not be easy to overcome decades of mistrust, suspicion, and even
open hostility between our countries. But he also knew that engagement
was necessary to present Iran with a choice and to unite the
international community around the need for Iran meet its international

So to advance our interests, President Obama extended his hand and the
opportunity for dialogue. American and Iranian diplomats met in Geneva
in October, and through the International Atomic Energy Agency. With
strong support from the United States, France, and Russia, the IAEA put
forward a creative offer to produce nuclear fuel using Iran’s own low
enriched uranium. It was an offer with humanitarian benefits, ensuring
that Iran would meet its need for medical isotopes. It gave Iran the
opportunity to show that its nuclear program was for peaceful purposes.
It would have built confidence on both sides in the possibility of
further agreements. In addition, the United States went to great
lengths to demonstrate our commitment and establish assurances for Iran.

To date, we have seen no indication that Iran’s leaders want to resolve
these issues constructively. After initially accepting it, they
rejected the Tehran Research Reactor proposal. They have refused to
discuss their nuclear program with the P5+1. The revelation of a
previously covert enrichment site, construction of which further
violated Iran’s NPT obligations, fed further suspicion about Iran’s
intentions. Iran recently increased the enrichment levels of its
uranium to 20 percent. All the while, Iran continues to brutally
repress its own citizens and prohibit their universal rights to express
themselves freely and choose their own future.

These are not the behaviors of a responsible international actor, and
they are not the actions of a government committed to peaceful diplomacy
and a new relationship with a willing and ready partner.

Indeed, Iran’s continued defiance of its international obligations on
its nuclear program and its support of terrorism represents a
significant regional and global threat. A nuclear-armed Iran could
transform the landscape of the Middle East, precipitating a nuclear arms
race, dramatically increasing the prospect and danger of local
conflicts, fatally wounding the global non-proliferation regime, and
emboldening the terrorists and extremists who threaten the United States
and our allies.

Therefore, we are now working actively with allies and partners to
increase the costs of Iran’s continued failure to live up to its
international obligations. This includes a U.N. Security Council
sanctions resolution.

As President Obama has stated, our offer of engagement with Iran stands,
and we remain prepared to pursue a better and more positive future. Iran
has rights, but with those rights come responsibilities. If Iran’s
leaders do not fulfill those responsibilities, and if they continue to
violate their international obligations, they will face ever deepening

Iran’s government must face real consequences for its continued defiance
of the international community. We hope that Iran will make the right
choice and acts to restore the confidence of the international community
in the exclusively peaceful nature of its nuclear program.

However, should Iran’s leaders fail to make that choice, President Obama
has been very clear, and I want to repeat it here: the United States is
determined to prevent Iran from developing nuclear weapons. In so
doing, we will avoid a nuclear arms race in the region and the
proliferation of nuclear technology to terrorist organizations.

Of course, one of the ways that Iran exerts influence in the Middle East
is by exploiting the ongoing Arab-Israeli conflict. Iran uses the
conflict to keep others in the region on the defensive and to try to
limit its own isolation. Ending this conflict, achieving peace between
Israelis and Palestinians and establishing a sovereign Palestinian state
would therefore take such an evocative issue away from Iran, Hizballah,
and Hamas. It would allow our partners in the region to focus on
building their states and institutions. And peace between Israel and
Syria, if it is possible, could have a transformative effect on the region.

Since taking office, President Obama has pursued a two-state solution—a
secure, Jewish state of Israel living side by side in peace and security
with a viable and independent Palestinian state.
This is in the United States’ interest. It is in Israel’s interest. It
is in the Palestinians’ interest. It is in the interest of the Arab
countries, and, indeed, the world. Advancing this peace would also help
prevent Iran from cynically shifting attention away from its failures to
meet its obligations.

And since there has been a lot of distortion and misrepresentation of
our policy recently, let me take this opportunity to address our
relationship with our ally Israel. Like any two nations, we will have
of disagreements, but we will always resolve them as allies. And we
will never forget that since the first minutes of Israeli independence,
the United States has had a special relationship with Israel. And that
will not change.

Why? Because this is not a commitment of Democrats or Republicans; it
is a national commitment based on shared values, deep and interwoven
connections, and mutual interests.

As President Obama declared in Cairo, “America's strong bonds with
Israel are well known. This bond is unbreakable.” They are the bonds
of history—two nations that earned our independence through the
sacrifice of patriots. They are the bonds of two people, bound together
by shared values of freedom and individual opportunity. They are the
bonds of two democracies, where power resides in the people. They are
the bonds of pioneers in science, technology and so many fields where we
cooperate every day. They are the bonds of friendship, including the
ties of so many families and friends.

This week marked the 62nd anniversary of Israeli independence—a nation
and a people who have survived in the face of overwhelming odds. But
even now, six decades since its founding, Israel continues to reside in
a hostile neighborhood with adversaries who cling to the false hope that
denying Israel’s legitimacy will ultimately make it disappear. But
those adversaries are wrong.

As the President said in Cairo, for the entire world to hear, the State
of Israel “will not go away.” As he said at the United Nations, nations
“do the Palestinians no favors when they choose vitriolic attacks
against Israel over constructive willingness to recognize Israel's
legitimacy and its right to exist in peace and security.”

So America’s commitment to Israel will endure. And everyone must know
that there is no space—no space—between the United States and Israel
when it comes to Israel’s security. Our commitment to Israel’s security
is unshakable. It is as strong as ever. This President and this
Administration understands very well the environment—regionally and
internationally—in which Israel and the United States must operate. We
understand very well that for peace and stability in the Middle East,
Israel must be secure.

The United States will never waiver in defense of Israel’s security.
That is why we provide billions of dollars annually in security
assistance to Israel, why we have reinvigorated our consultations to
ensure Israel’s Qualitative Military Edge, and why we undertake joint
military exercises, such as the Juniper Cobra ballistic missile defense
exercise that involved more than 1,000 United States servicemen and
women. We view these efforts as essential elements of our regional
security approach, because many of the same forces that threaten Israel
also threaten the United States.

I can also say from long experience that our security relationship with
Israel is important for America. Our military benefits from Israeli
innovations in technology, from shared intelligence, from exercises that
help our readiness and joint training that enhances our capabilities and
from lessons learned in Israel’s own battles against terrorism and
asymmetric threats.

Over the years, and like so many Americans—like so many of you here
tonight—I’ve spent a great deal of time with my Israeli partners,
including my friends in the IDF. These partnerships are deep and
abiding. They are personal relationships and friendships based on
mutual trust and respect. Every day, across the whole range of our
bilateral relationship, we are working together for our shared security
and prosperity. And our partnership will only be strengthened in the
months and years to come.

In our pursuit of a two-state solution, we recognize that peace must be
made by the parties and cannot be imposed from the outside. At the same
time, we understand that the status quo is not sustainable. It is not
sustainable for Israel’s identity as a secure, Jewish, and democratic
state, because the demographic clock keeps ticking and will not be
reversed. The status quo is not sustainable for Palestinians who have
legitimate aspirations for sovereignty and statehood. And the status
quo is not sustainable for the region because there is a struggle
between those who reject Israel’s existence and those who are prepared
to coexist with Israel — and the status quo strengthens the
rejectionists and weakens those who would live in peace.

Obviously, we are disappointed that the parties have not begun direct
negotiations. The United States stands ready to do whatever is
necessary to help the parties bridge their differences and develop the
confidence needed to make painful compromises on behalf of peace. As we
do so, we will also strongly support the Palestinian Authority’s efforts
to develop its institutions from the ground up and call on other states,
particularly in the region, to do their part to support the Palestinian
Authority as well.

We also continue to call on all sides to avoid provocative actions,
including Israeli actions in East Jerusalem and Palestinian incitement
that fuel suspicion rather than trust.

As Secretary of State Clinton has said many times, “we believe that
through good-faith negotiations, the parties can mutually agree to an
outcome which ends the conflict and reconciles the Palestinian goal of
an independent and viable state based on the ‘67 lines, with agreed
swaps, and Israel’s goal of a Jewish state with secure and recognized
borders that reflect subsequent developments and meet Israel’s security

So it is time to begin those negotiations and to put an end to excuses.
It is time for all leaders in the region—Israeli, Palestinian, and
Arab—to support efforts for peace. It is time for today’s leader to
demonstrate the courage and leadership of Anwar Sadat, King Hussein, and
Yitzhak Rabin.

I want to conclude tonight by returning to some simple words that
President Obama spoke in Oslo—this is a “moment of challenge.” And when
it comes to the Middle East, it is a moment of many challenges.

It is the challenge of transitioning to full Iraqi responsibility for
their future. In Afghanistan and beyond, is the challenge of defeating
violent extremists who threaten us all. It is the challenge of
preventing Iran from acquiring nuclear weapons and the means to deliver
them. It is the challenge of forging a lasting peace between Israelis
and Palestinians as part of a comprehensive peace in the region. It is
the challenge of realizing greater prosperity and opportunity for all
who call the Middle East home.

Alone, any one of these would demand extraordinary patience and
perseverance. Together, they will require a comprehensive and
coordinated approach. This is the work that President Obama has
undertaken. And this is the work we will continue to pursue in the
months and years ahead…not only for the sake of America’s security, but
for the world’s.

Thank you all very much.
4) Moment of decision :Eitan Haber writes about moments that will precede government decision on Iran strike
By Eitan Haber

It will be a moment where government ministers hold their breath. Newspapers, books, and maybe even movies will portray it, years later, as a “historical moment.”

The “visitors” by the government table – the IDF chief of staff, Mossad chief, Shin Bet chief, and various advisors – will take a close look at the ministers. Weeks, months, or years later, each one of these visitors will remember the facial expressions on the ministers’ faces and their paleness. The ministers themselves won’t forget it either.

Seconds earlier, the prime minister will turn to his colleagues sitting around the table. He too will grow pale then. Years of discussions and preparations will come to an end at that moment.

Benjamin Netanyahu, as the son of a historian and as one who is deeply familiar with how history is written, will say a few words for the protocol, clearly realizing that this is how he perpetuates himself, and certainly his words, in the history books. Then, the government meeting room will grow silent. What will Netanyahu propose that we do, or don’t do, in respect to Iran’s nuclear bomb being built underground as we speak? What can be done?

Much, and even very much, depends on one man who will be sitting by the table, without the right to vote. Before the ministers vote, the prime minister will turn to him. He will be the last speaker before the ministers speak. “The chief of staff,” Netanyahu will say. “Go ahead.”

Netanyahu is familiar with the army chief’s position, which had been uttered during days and nights of endless discussions. Now, before such fateful decision, he will ask the army chief to fully explain his position. Netanyahu also knows that some of the ministers – and possibly many of them – will vote in line with Lieutenant GeneralGabi Ashkenazi’s position.

Our generation’s mission

Assuming that the undersigned knows the current army chief, and he indeed makes pretenses of knowing him, Ashkenazi will not grant the government the honor and pleasure of shifting the decision to his shoulders. He will present the most accurate data, the “in favor” and “against” positions, and then he will say: Gentlemen, the decision is in your hands. It’s yours.” Then he will add: “We will carry out whatever you decide.”

In a retrospective historical look, this may be the most dramatic decision required of an Israeli government since Ben-Gurion’s decision to declare the State of Israel’s establishment. Every decision – in favor, against, abstention – will have historical meaning this time around: For the second time in modern history, the Jewish people is facing an existential test.

Netanyahu, even before he was elected as PM, believed that this is our generation’s mission; today he still believes that his historical role as prime minister is to eliminate the threat from the second Hitler. The question of how to do it, whether it’s even possible to do it, and what will be the historical implications of every act or failure are currently tearing apart the political leadership, and also the defense establishment. There is no going back after the decision.

Government ministers, in any government, usually fear such moments of decision. Indeed, they aspired for years to reach the government table, but a national decision of this scope? Almost nothing in their lives prepared them to take such decision. This is why they want to depend on “higher authorities” in order to make the decision, and in this case the army chief is their target.

The most intelligent ministers who are deeply familiar with history also remember that commissions of inquiry always blamed the military leadership (retroactively, of course,) so why not now?

As noted, I’m guessing – and it’s only a guess – that Army Chief Ashkenazi will not make it easy for the ministers. And then, during those historic moments, they will seek a “replacement” for the army chief and count on the two people who, at the moment, appear to them as an inseparable duo: Bibi Netanyahu and Ehud Barak, whose political rivals also view as knowledgeable people.

As opposed to the chief of staff, who justifiably leaves the decision up to them, Netanyahu and Barak cannot look back and seek someone else that can be relied on to make the decision. For better and for worse, it’s them. Only them. One should not be envying this duo.
5) 'Ties will only get stronger'

Amid high hopes regarding the start of "proximity" Middle East peace negotiations, US envoy George Mitchell reaffirmed the unshakable bond between Washington and Jerusalem during a meeting with Prime Minister Binyamin Netanyahu on Friday afternoon, saying the special ties would only get stronger.

Mitchell stressed that the Obama administration was working to advance mutual Israeli and US interests, which he said were led by a comprehensive peace agreement between Israel and the Palestinians based on the two-state solution, Israel Radio reported.

At the conclusion of the talks at the Prime Minister’s Office in Jerusalem, the two agreed to meet again on Sunday.

Mitchell and Defense Minister Ehud Barak, meanwhile, agreed to meet again in Washington next week after their hour-long talks at the Defense Ministry in Tel Aviv on Friday morning.

Mitchell is hoping to announce the start of the indirect talks during his current three-day visit here.

The US envoy is also due to meet President Shimon Peres on Friday afternoon, before heading to Ramallah in the evening for talks with Palestinian Authority President Mahmoud Abbas.

Anticipation of a breakthrough was high on Thursday night, despite Netanyahu’s reiterated refusal to halt construction in Jewish neighborhoods of east Jerusalem as the Palestinian Authority has been demanding.

Barak heading to US next week

Meanwhile, Barak’s office announced that the defense minister would fly to the US on Sunday for meetings with heads of the Obama administration.

The meetings are expected to focus on security issues, including attempts to resume peace talks, said a statement Friday.

As well as Mitchell, Barak is set to meet US Secretary of State Hillary Clinton, Defense Secretary Robert Gates, National Security Adviser James Jones, Chairman of the US Joint Chiefs of Staff Admiral Michael Mullen and intelligence chiefs.

Hilary Leila Krieger, Khaled Abu Toameh and Tovah Lazaroff contributed to this report

5a)The Strategic Foundations of the US-Israel Alliance
By Caroline B. Glick

Israel's status as the US's most vital ally in the Middle East has been so widely recognized for so long that over the years, Israeli and American leaders alike have felt it unnecessary to explain what it is about the alliance that makes it so important for the US.

Today, as the Obama administration is openly distancing the US from Israel while giving the impression that Israel is a strategic impediment to the administration's attempts to strengthen its relations with the Arab world, recalling why Israel is the US's most important ally in the Middle East has become a matter of some urgency.

Much is made of the fact that Israel is a democracy. But we seldom consider why the fact that Israel is a representative democracy matters. The fact that Israel is a democracy means that its alliance with America reflects the will of the Israeli people. As such, it remains constant regardless of who is power in Jerusalem.

All of the US's other alliances in the Middle East are with authoritarian regimes whose people do not share the pro-American views of their leaders. The death of leaders or other political developments are liable to bring about rapid and dramatic changes in their relations with the US.

For instance, until 1979, Iran was one of the US's closest strategic allies in the region. Owing to the gap between the Iranian people and their leadership, the Islamic revolution put an end to the US-Iran alliance.

Egypt flipped from a bitter foe to an ally of the US when Gamal Abdel Nasser died in 1969. Octogenarian President Hosni Mubarak's encroaching death is liable to cause a similar shift in the opposite direction.

Instability in the Hashemite kingdom in Jordan and the Saudi regime could transform those countries from allies to adversaries.

Only Israel, where the government reflects the will of the people is a reliable, permanent US ally.

America reaps the benefits of its alliance with Israel every day. As the US suffers from chronic intelligence gaps, Israel remains the US's most reliable source for accurate intelligence on the US's enemies in the region.

Israel is the US's only ally in the Middle East that always fights its own battles. Indeed, Israel has never asked the US for direct military assistance in time of war. Since the US and Israel share the same regional foes, when Israel is called upon to fight its enemies, its successes redound to the US's benefit.

Here it bears recalling Israel's June 1982 destruction of Syria's Soviet-made anti-aircraft batteries and the Syrian air force. Those stunning Israeli achievements were the first clear demonstration of the absolute superiority of US military technology over Soviet military technology. Many have argued that it was this Israeli demonstration of Soviet technological inferiority that convinced the Reagan administration it was possible to win the Cold War.

In both military and non-military spheres, Israeli technological achievements - often developed with US support - are shared with America. The benefits the US has gained from Israeli technological advances in everything from medical equipment to microchips to pilotless aircraft are without peer worldwide.

Beyond the daily benefits the US enjoys from its close ties with Israel, the US has three fundamental, permanent, vital national security interests in the Middle East. A strong Israel is a prerequisite for securing all of these interests.

America's three permanent strategic interests in the Middle East are as follows:

1 - Ensuring the smooth flow of affordable petroleum products from the region to global consumers through the Persian Gulf, the Gulf of Aden and the Suez Canal.

2 - Preventing the most radical regimes, sub-state and non-state actors from acquiring the means to cause catastrophic harm.

3 - Maintaining the US's capacity to project its power to the region.

A strong Israel is the best guarantor of all of these interests. Indeed, the stronger Israel is, the more secure these vital American interests are. Three permanent and unique aspects to Israel's regional position dictate this state of affairs.

1 - As the first target of the most radical regimes and radical sub-state actors in the region, Israel has a permanent, existential interest in preventing these regimes and sub-state actors from acquiring the means to cause catastrophic harm.

Israel's 1981 airstrike that destroyed Iraq's Osirak nuclear reactor prevented Iraq from acquiring nuclear weapons. Despite US condemnation at the time, the US later acknowledged that the strike was a necessary precondition to the success of Operation Desert Storm ten years later. Richard Cheney - who served as secretary of defense during Operation Desert Storm - has stated that if Iraq had been a nuclear power in 1991, the US would have been hard pressed to eject Saddam Hussein's Iraqi army from Kuwait and so block his regime from asserting control over oil supplies in the Persian Gulf.

2 - Israel is a non-expansionist state and its neighbors know it. In its 62 year history, Israel has only controlled territory vital for its national security and territory that was legally allotted to it in the 1922 League of Nations Mandate which has never been abrogated or superseded.

Israel's strength, which it has used only in self-defense, is inherently non-threatening. Far from destabilizing the region, a strong Israel stabilizes the Middle East by deterring the most radical actors from attacking.

In 1970, Israel blocked Syria's bid to use the PLO to overthrow the Hashemite regime in Jordan. Israel's threat to attack Syria not only saved the Hashemites then, it has deterred Syria from attempting to overthrow the Jordanian regime ever since.

Similarly, Israel's neighbors understand that its purported nuclear arsenal is a weapon of national survival and hence they view it as non-threatening. This is the reason Israel's alleged nuclear arsenal has never spurred a regional nuclear arms race.

In stark contrast, if Iran acquires nuclear weapons, a regional nuclear arms race will ensue immediately.

Although they will never admit it, Israel's non-radical neighbors feel more secure when Israel is strong. On the other hand, the region's most radical regimes and non-state actors will always seek to emasculate Israel.

3-- Since as the Jewish state Israel is the regional bogeyman, no Arab state will agree to form a permanent alliance with it. Hence, Israel will never be in a position to join forces with another nation against a third nation.

In contrast, the Egyptian-Syrian United Arab Republic of the 1960s was formed to attack Israel. Today, the Syrian-Iranian alliance is an inherently aggressive alliance against Israel and the non-radical Arab states in the region. Recognizing the stabilizing force of a strong Israel, the moderate states of the region prefer for Israel to remain strong.

From the US's perspective, far from impairing its alliance-making capabilities in the region, by providing military assistance to Israel, America isn't just strengthening the most stabilizing force in the region. It is showing all states and non-state actors in the greater Middle East it is trustworthy.

On the other hand, every time the US seeks to attenuate its ties with Israel, it is viewed as an untrustworthy ally by the nations of the Middle East. US hostility towards Israel causes Israel's neighbors to hedge their bets by distancing themselves from the US lest America abandon them to their neighboring adversaries.

A strong Israel empowers the relatively moderate actors in the region to stand up to the radical actors in the region because they trust Israel to keep the radicals in check. Today's regional balance of power in which the moderates have the upper hand over the radicals is predicated on a strong Israel.

On the other hand, when Israel is weakened the radical forces are emboldened to threaten the status quo. Regional stability is thrown asunder. Wars become more likely. Attacks on oil resources increase. The most radical sub-state actors and regimes are emboldened.

To the extent that the two-state solution assumes that Israel must contract itself to within the indefensible 1949 ceasefire lines, and allow a hostile Palestinian state allied with terrorist organizations to take power in the areas it vacates, the two-state solution is predicated on making Israel weak and empowering radicals. In light of this, the two-state solution as presently constituted is antithetical to America's most vital strategic interests in the Middle East.

When we bear in mind the foundations for the US's alliance with Israel, it is obvious that US support for Israel over the years has been the most cost-effective national security investment in post-World War II US history.

JWR contributor Caroline B. Glick is the senior Middle East Fellow at the Center for Security Policy in Washington, DC and the deputy managing editor of The Jerusalem Post. Comment by clicking here.
6) )Liberals and the Violence Card: Conservative protest is motivated by a love of what America stands for.

The latest liberal meme is to equate skepticism of the Obama administration with a tendency toward violence. That takes me back 15 years ago to the time President Bill Clinton accused "loud and angry voices" on the airwaves (i.e., radio talk-show hosts like me) of having incited Oklahoma City bomber Timothy McVeigh. What self-serving nonsense. Liberals are perfectly comfortable with antigovernment protest when they're not in power.

From the halls of the Ivy League to the halls of Congress, from the antiwar protests during the Vietnam War and the war in Iraq to the anticapitalist protests during International Monetary Fund and World Bank meetings, we're used to seeing leftist malcontents take to the streets. Sometimes they're violent, breaking shop windows with bricks and throwing rocks at police. Sometimes there are arrests. Not all leftists are violent, of course. But most are angry. It's in their DNA. They view the culture as corrupt and capitalism as unjust.

Now the liberals run the government and they're using their power to implement their radical agenda. Mr. Obama and his party believe that the election of November 2008 entitled them to make permanent, "transformational" changes to our society. In just 16 months they've added more than $2 trillion to the national debt, essentially nationalized the health-care system, the student-loan industry, and have their sights set on draconian cap-and-trade regulations on carbon emissions and amnesty for illegal aliens.

Had President Obama campaigned on this agenda, he wouldn't have garnered 30% of the popular vote.

Like the millions of citizens who've peacefully risen up and attended thousands of rallies in protest, I seek nothing more than the preservation of the social contract that undergirds our society. I do not hate the government, as the left does when it is not running it. I love this country. And because I do, I insist that the temporary inhabitants of high political office comply with the Constitution, honor our God-given unalienable rights, and respect our hard-earned private property. For this I am called seditious, among other things, by some of the very people who've condemned this society?

I reject the notion that America is in a well-deserved decline, that she and her citizens are unexceptional. I do not believe America is the problem in the world. I believe America is the solution to the world's problems. I reject a foreign policy that treats our allies like our enemies and our enemies like our allies. I condemn the president traveling the world apologizing for America's great contributions to mankind. And I condemn his soft-pedaling the dangers we face from terrorism. For this I am inciting violence?

Few presidents have sunk so low as Mr. Clinton did with his accusations about Oklahoma City. Last week—on the very day I was contributing to and raising more than $3 million to fight leukemia and lymphoma on my radio program—Mr. Clinton used the 15th anniversary of that horrific day to regurgitate his claims about talk radio.

At a speech delivered last Friday at the Center for American Progress in Washington, D.C., the former president said: [T]here were a lot of people who were in the business back then of saying that the biggest threat to our liberty and the cause of our domestic economic problem was the federal government itself. And we have to realize that there were others who fueled this both because they agreed with it and because it was in their advantage to do so. . . . We didn't have blog sites back then so the instrument of carrying this forward was basically the right-wing radio talk show hosts and they understand clearly that emotion was more powerful than reason most of the time."

Timothy McVeigh was incensed by the Clinton administration's 1993 siege on the Branch Davidian compound in Waco, Texas. It's no coincidence that the bombing took place two years to the day of the Waco siege. McVeigh was not inspired by anything I said or believe and to say otherwise is outright slander. In the aftermath of the bombing, I raised millions of dollars for the children of federal employees killed in that cowardly attack through my association with the Marine Corp Law Enforcement Foundation.

Let me just say it. The Obama/Clinton/media left are comfortable with the unrest in our society today. It allows them to blame and demonize their opponents (doctors, insurance companies, Wall Street, talk radio, Fox News) in order to portray their regime as the great healer of all our ills, thus expanding their power and control over our society.

A clear majority of the American people want no part of this. They instinctively know that the Obama way is not how things get done in this country. They are motivated by love. Not hate, not sedition. They love their country and want to save it from those who do not.

Mr. Limbaugh is a nationally syndicated radio talk-show host.
7)The Real Republican Civil War The struggle between Marco Rubio and Charlie Crist for the Florida Senate seat symbolizes the rift between the reformers and the establishment in the GOP.

Marco Rubio appeared on a Sunday talk show this month to say something remarkable. The Republican running for Florida's Senate seat suggested we reform Social Security by raising the retirement age for younger workers. Florida is home to 2.4 million senior citizens who like to vote. The blogs declared Mr. Rubio politically suicidal.

The response from Mr. Rubio's primary competitor, Gov. Charlie Crist, was not remarkable. His campaign slammed Mr. Rubio's idea as "cruel, unusual and unfair to seniors living on a fixed income." Mr. Crist's plan for $17.5 trillion in unfunded Social Security liabilities? Easy! He'll root out "fraud" and "waste."

Let's talk Republican "civil war." Not the one the media is hawking, that pits supposed tea party fanatics like Mr. Rubio against supposed "moderates" like Mr. Crist. The Republican Party is split. But the real divide is between reformers like Mr. Rubio and Wisconsin Rep. Paul Ryan, who are running on principles and tough issues, and a GOP old guard that still finds it politically expedient to duck or demagogue issues. As Republicans look for a way out of the wilderness, this is the rift that matters.

And it's the divide playing out in Florida, even if that's not the press's preferred narrative. In conventional-wisdom world, Mr. Rubio is the darling of an angry grass roots, surging at the expense of the postpartisan Mr. Crist.

And woe betide the GOP, goes the storyline. It is courting disaster, repeating its mistake in New York 23, nominating radicals who can't win elections. Never mind the grass roots never did drum Mark Kirk (running for Illinois's Senate seat) out of the party. Or that Florida doesn't even fit this mold. Mr. Rubio, a Jeb Bush protégé, is hardly too conservative for his state. A recent Rasmussen poll has him beating Mr. Crist and Democrat Kendrick Meek statewide. Mr. Crist doesn't solve his Rubio problem by bolting the party.

What has attracted independents and even Democrats to Mr. Rubio is his reformist agenda, which taps into this week's Pew poll finding a historically low 22% of Americans trust government. It hasn't hurt that Mr. Crist has provided a sharp contrast with a campaign that channels the mindset that lost the GOP its majority.

On Social Security, Mr. Rubio is a supporter of Mr. Ryan's roadmap, which tackles entitlement and budget reform. Mr. Crist took the typical Washington path of refusing to acknowledge reality and then accusing his opponent of robbing granny. This is reminiscent of the GOP reluctance to embrace hard issues like health-care reform when it controlled Washington. One result is ObamaCare.

Speaking of that law, Mr. Rubio condemned the takeover. Mr. Crist dithered. While Mr. Rubio slammed the stimulus, the governor grabbed at its state bailout provisions since that was easier than cutting spending. One of these sounds like the GOP of old; one does not.

Floridians may remember 2007, when Mr. Rubio, as speaker of the Florida House, championed comprehensive tax overhaul. It was a bold idea to swap all property taxes for a flat consumption tax. The reform lowered overall taxes; even Americans for Tax Reform applauded it. Mr. Rubio's reward was to recently have Mr. Crist slam him for proposing a "massive tax increase." Now you know why Washington never embraces anything more than a "tax commission."

Mr. Crist is best-known for launching a vicious campaign against property insurers in the wake of Hurricane Katrina. Mr. Rubio pushed back, though it was unpopular. Now that the governor has succeeded in driving that industry out of his state, things look different. This divide is similar to today's GOP split over Wall Street, between those tempted to win points by punishing banks with overweening regulation and those in the Ryan camp who have no love for big business but defend free markets.

If an angry public has done anything, it's been to embolden more of these reformers to run. Pennsylvania Senate candidate Pat Toomey was a leader on Social Security reform in Congress. John Kasich, running for Ohio governor, promises to overhaul the state's decrepit tax and regulatory systems. In House races you see more candidates running on bold solutions. Yet for every budding Rubio there remains an establishment GOP member who fights earmark bans, blanches at Medicare reform, and just wants to get through the next election.

This divide is putting enormous pressure on the GOP leadership. It tastes victory this fall and is terrified of blowing it. It watched President Obama sandbag Mr. Ryan earlier this year, holding up his roadmap as an example of the terrors the GOP would impose on the nation.

At some point, GOP leaders are going to have to decide what the "new" GOP is. Principled opposition to bad Democratic policy is a legitimate strategy for the midterms. Then what? Republicans will win seats this fall. How long they remain in them will come down to which side—the establishment GOP or the reformist GOP—wins what is the real Republican civil
8)The New Master of Wall Street: Obama surveys the financial kingdom that may soon be his..

President Obama is a gifted man, but until yesterday we hadn't known that his achievements include having predicted the financial panic of 2008. It was a "failure of responsibility that I spoke about when I came to New York more than two years ago—before the worst of the crisis had unfolded," Mr. Obama said yesterday in a speech on financial reform at Cooper Union in New York City. "I take no satisfaction in noting that my comments have largely been borne out by the events that followed."

We wish for the sake of our 401(k) we had noticed this Delphic call, not least when Senator Obama was opposing the reform of Fannie Mae and Freddie Mac. But let's not fight over history. The current reality is that the President had better be very, very smart because the reform bill he is stumping for would give him and his regulators vast new sway over financial markets and risk-taking.

This is the most important fact to understand about the current financial reform debate. While the details matter a great deal, the essence of the exercise is to transfer more control over credit allocation and the financial industry to the federal government. The industry was heavily regulated before—not that it stopped the mania and panic—but if anything close to the current bills pass, the biggest banks will become the equivalent of utilities.

The irony is that this may, or may not, reduce the risk of future financial meltdowns and taxpayer bailouts. A new super council of regulators will be created with vast new powers to determine which firms pose a "systemic" financial risk, to set high capital and margin levels, to veto certain kinds of business for certain firms, and even to set guidelines for banker compensation—or maybe not. The point is that these crucial questions will be settled not by statute, but by regulatory discretion after the law passes.

If you think Wall Street beats a path to the Beltway now, wait until the banks seek to influence how regulators will define, say, "proprietary trading." Whatever its flaws, the Glass-Steagall Act of 1932 clearly defined the difference between a commercial and investment bank. This time, the rules will be written by regulators at Treasury, the Federal Reserve, the CFTC, SEC and FDIC, among others. As he so often does, Mr. Obama yesterday denounced "the furious efforts of industry lobbyists to shape" the bill "to their special interests." But if his reform passes, this lobbying is certain to continue, more furiously.

Consider the esoteric matter of derivatives, most of which seem headed for daily settlement on exchanges and a clearinghouse if the bill passes. But not all derivatives. The new master of this universe would be Gary Gensler, a Goldman Sachs alumnus who now chairs the Commodity Futures Trading Commission. Under the bill moving through the Senate, he would decide which derivative transactions must be "cleared" and traded via electronic exchanges, and which can continue to be traded over-the-counter.

Perhaps Mr. Gensler is as wise as King Solomon, or at least John Paulson. Perhaps, like Mr. Obama in 2008, he—and his successors—will be able to foresee the next crisis and determine the derivatives contracts that pose the most future risk. He will need to be, because under such a reform some of the risk of a transaction moves from the two financial parties (say, J.P. Morgan and Goldman) to the clearinghouse—which will almost certainly be "too big to fail" if enough trades go awry in the next crisis.

Or consider the Senate provision, too little discussed, to let the SEC give shareholders more clout over corporate board elections. This would federalize what has long been state predominance in corporate law, while giving the largest and most activist investors far more leverage to impose their agendas on business.

In practice, this means giving more influence over corporate decisions to labor unions and their political surrogates who run the large public pension funds. Their goals are as likely as not to include political causes such as easier unionization, cap-and-trade regulation, or disinvestment in this or that unpopular business or country. This, too, comes down to giving more power to the political class to run business—in this case, even nonfinancial businesses.

The people who oppose these and other provisions do so for a variety of reasons, some principled, some self-interested. But they have every right to fight them. Yet Mr. Obama once again yesterday cast such opposition as dishonest: "What is not legitimate is to suggest that we're enabling or encouraging future taxpayer bailouts, as some have claimed. That may make for a good sound bite, but it's not factually accurate," he said. "A vote for reform is a vote to put a stop to taxpayer-funded bailouts. That's the truth."

Perhaps Mr. Obama should consult Democrat Ted Kaufman of Delaware, who said recently on the Senate floor that "by expanding the [federal] safety net—as we did in response to the last crisis—to cover ever larger and more complex institutions heavily engaged in speculative activities, I fear that we may be sowing the seeds for an even bigger crisis in only a few years or a decade." Mr. Kaufman wants to break up the biggest banks, which may well be preferable to making them wards of the Treasury. Is he lying too?

As in health care, Democrats are intent on ramming this reform through Congress, and Republicans ought to summon the will to resist. Absent that, the only certain result is that Washington will be the new master of the financial universe.

8a) Back to Basics on Financial Reform:The case for limiting leverage and regulating derivatives is overwhelming, but that doesn't require a new 1,300-page law

A "trilemma" is like a dilemma, only there are three things to choose from and you can have just two. The current debate over post-crisis financial regulation suggests we face such a trilemma: We can choose any two of the following, but not all three: 1) efficient capital markets 2) no bailouts to big banks and 3) a depression-free economy.

From the 1980s until 2007, we essentially opted for one and two. Financial markets operated with more freedom than at any time since the 1930s and the Federal Reserve stood ready to cut interest rates if asset prices tanked. But the idea that big banks might be able to get new capital from the Treasury was scarcely even contemplated. Choosing one and two resulted in a global financial and economic crisis worthy of the name depression.

In the aftermath, congressional Democrats are claiming that we can have three out of three. In effect, the bill introduced to the Senate by Christopher Dodd purports to prevent future depressions without sacrificing the efficiency of our financial markets or committing taxpayers to future bailouts of the banking system. This trifecta is not credible.

Either the bill really does imply future bailouts, as Republicans argue. Or, as seems more plausible to us, it is going to introduce such a wide range of new financial regulations that the efficiency of our capital markets will be significantly diminished.

The public today is in no mood for light-touch regulation. It knows Wall Street has become largely a giant casino creating bets whose only purpose is to create fees for itself—with the difference that taxpayers are expected not only to bail out the casino's biggest losers but also to endure misery in the form of lost homes, lost jobs and lost savings if the casino inadvertently triggers a depression. The charges brought against Goldman Sachs by the Securities and Exchange Commission confirm this view.

Whether or not there is any basis for the SEC's claim that it misled investors, the key point is that the synthetic collateralized debt obligation (CDO) at issue was nothing more than an elaborate wager on the future price of some mortgage-backed securities—a wager with as much economic utility as a gigantic bet on a roulette wheel or a horse race. Facilitating such bets has become a huge part of the business of the world's biggest banks.

For most of the past 20 years the explosive growth of the derivatives market—the total notional amount of derivatives outstanding in June last year was $604.6 trillion—was immensely lucrative for bankers and those who invest in bank stocks. But it increased the instability of the global financial system. And taxpayers have paid a heavy price since the system all but collapsed in late 2008.

The case for some kind of regulation of the derivatives market is overwhelming. There was never a good reason for treating credit default swaps and their ilk differently from commodity futures, which are standardized and traded on exchanges. The lack of market transparency and efficient competition in these instruments indicates that much of the profit made in the current, "over-the-counter" market is simply vigorish extracted by the financial bookies. History shows that competitive markets where standardized products are traded for low commissions do not spontaneously arise. They have to be created.

The problem is that Congress is not content to address this problem alone. On the contrary, the common characteristic of the two bills currently under discussion is their staggering length (both exceed 1,300 pages) and complexity. The nightmare possibility arises: Could the proposed cure turn out to be just another symptom of the same disease? As the rules become ever more convoluted, so the opportunities for the unscrupulous increase—and the efficiency of the financial system as a whole decreases.

There is a widespread but erroneous belief that the financial crisis has its origins in deregulation dating all the way back to the late 1970s. Therefore any steps to restore the pre-Reagan regulatory system are to be welcomed. This is really bad financial history.

First, in the more controlled capital markets of the 1970s, borrowers generally paid more for their loans because there was less competition. Lousy managements were protected from corporate raiders. Savers earned negative real interest rates because of high inflation. Deregulation—such as lifting restrictions on the interest rates banks could pay and charge—and financial innovation delivered real benefits for the U.S. economy in the 1980s and '90s.

Second, it is not at all clear that our crisis was exclusively caused by a failure of regulation as opposed to a failure of monetary policy. A very large part of the responsibility for the housing bubble and bust lies with the Federal Reserve, which underestimated the extent to which inflationary pressures had relocated themselves from consumer prices to asset prices. This was a near-term error of the period 2002-2004. It has nothing whatever to do with deregulation and everything to do with defective monetary theory.

Third, the crisis of 2007-2009 originated in one of the most highly regulated sectors of the financial system: the U.S. residential mortgage market. The mortgage originators, the government-sponsored enterprises that dominate the securitization process, the commercial banks—these were scarcely institutions ignored by Congress over the years. On the contrary, Washington constantly tinkered with the system in a misguided campaign to increase home ownership. That campaign ended in tears.

Still, it took extraordinary forces to turn a subprime bust into a global financial crisis. The key forces were excessive leverage on and off bank balance sheets, and derivatives that allowed massive but opaque side bets on the future value of U.S. homes. And it was these two factors that magnified (and exported) the losses in the mortgage market; legislators should focus on them. Instead, both the House and Senate bills are packed full of scatter-gun regulations that owe more to the prejudices of legislators than to a rational assessment of what actually went wrong.

The best example (there are many) is a provision in the bill passed by the House last year creating a mechanism to police banker compensation—before we even have the results of the bill's projected study on "whether there is a correlation between compensation structures and excessive risk taking."

By all means let us regulate the derivatives market—beginning with a reform that makes it a real market. And let's clamp down on excessive bank leverage. But let us not believe we can abolish both bailouts and depressions, other than by creating another layer of government regulation. That would be to impale ourselves on the horns of a trilemma.

Mr. Ferguson is a professor of history at Harvard University and a professor of business administration at the Harvard Business School. Mr. Forstmann is senior founding partner of Forstmann Little & Company, and chairman and CEO of IMG.