Allan Meltzer explains why Obamanomics has failed.
We have witnessed the Obama, Emanuel, Axelrod, Alinsky, Soros method of government for 18 months. It is rooted in a philosophy of meeting a crisis with a solution that creates a bigger crisis, which, in turn, leads to expanded government control.
Government hiring has become a growth engine, average government bureaucrat salaries exceed private sector ones. These are undeniable facts.
Perhaps Obama wants our nation to fail so we will be weaker and less able to defend it. Then we will be loved
Furthermore, if Obama can bow to Muslim royalty then, according to him, our nation which has sinned needs to be brought toits knees so we can atone. And I have yet to mention Obama's foot dragging on defending our borders and Arizona citizens or his inept handling of the Gulf oil spill.
This is what the November election will be about (see if you can dial up:) [http://www.powerlineblog.com/archives/2010/01/025329.php]
At this point, it looks bad for Democrats but then what do they care as long as they can swamp our nation with more fuzzy failed policies knowing that they will never be fully overturned or reversed.
Roosevelt established a bridgehead in the '40's and over the last 60 years it became the platform on which more social engineering has been built one brick at a time.
And you know what kind of a brick house has been created - simply look at our exploding deficit, the decline in the dollar and the plight of public education and social responsibility.
A long time ago a famous parlamentarian allegedly said:
"The budget should be balanced, the Treasury should be refilled,
public debt should be reduced, the arrogance of officialdom should
be tempered and controlled, and the assistance to foreign lands
should be curtailed lest Rome becomes bankrupt.
People must again learn to work, instead of living on public assistance."
Cicero, 55 BC
Thus, debase your currency and you debase your society.
Funny thing that we now find our economy in the basement. (See 1, 1a, 1b and 1c below.)
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Meanwhile, Thomas Frank believes an austerity program at this time would be a disaster. (See 2 below.)
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While the two hot dogs were eating cheeseburgers one wound up with ketchup on his face. (See 3 below.)
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Steven Simpson presents another take on the Islam vs Israel issue. (See 4 below.)
And then there are the incendiary comments of another Obama Muslim supporter which
validates Simpson's argument. (See 4a below.)
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RBS is sounding the alarm on risk assets with a call that markets are at risk of falling off the edge of the cliff. They refer to equity investors as the “worst cult in history….which has no basis in fact, or history, ...yet seems universally accepted.” (There’s actually a strange truth in that comment). They believe the current downturn could very well “destroy” this “cult”:
Perhaps there is a correlation between Obamanomics and the stock market after all. (See 5 below.)
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Interesting IAF graduation statistics. (See 6 below.)
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Israel has leakers and an alleged traitor. (See 7 and 7a below.)
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I often rail at the PC manner in which we began raising children and I submit our society suffers in untold ways and so do the children.
I missed seeing Rosemond's first article but here is the second. (See 8 below.)
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Dick
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1) Why Obamanomics Has Failed :Uncertainty about future taxes and regulations is enemy No. 1 of economic growth
By ALLAN H. MELTZER
The administration's stimulus program has failed. Growth is slow and unemployment remains high. The president, his friends and advisers talk endlessly about the circumstances they inherited as a way of avoiding responsibility for the 18 months for which they are responsible.
But they want new stimulus measures—which is convincing evidence that they too recognize that the earlier measures failed. And so the U.S. was odd-man out at the G-20 meeting over the weekend, continuing to call for more government spending in the face of European resistance.
The contrast with President Reagan's antirecession and pro-growth measures in 1981 is striking. Reagan reduced marginal and corporate tax rates and slowed the growth of nondefense spending. Recovery began about a year later. After 18 months, the economy grew more than 9% and it continued to expand above trend rates.
Two overarching reasons explain the failure of Obamanomics. First, administration economists and their outside supporters neglected the longer-term costs and consequences of their actions. Second, the administration and Congress have through their deeds and words heightened uncertainty about the economic future. High uncertainty is the enemy of investment and growth.
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Most of the earlier spending was a very short-term response to long-term problems. One piece financed temporary tax cuts. This was a mistake, and ignores the role of expectations in the economy. Economic theory predicts that temporary tax cuts have little effect on spending. Unless tax cuts are expected to last, consumers save the proceeds and pay down debt. Experience with past temporary tax reductions, as in the Carter and first Bush presidencies, confirms this outcome.
Another large part of the stimulus went to relieve state and local governments of their budget deficits. Transferring a deficit from the state to the federal government changes very little. Some teachers and police got an additional year of employment, but their gain is temporary. Any benefits to them must be balanced against the negative effect of the increased public debt and the temporary nature of the transfer.
The Obama economic team ignored past history. The two most successful fiscal stimulus programs since World War II—under Kennedy-Johnson and Reagan—took the form of permanent reductions in corporate and marginal tax rates. Economist Arthur Okun, who had a major role in developing the Kennedy-Johnson program, later analyzed the effect of individual items. He concluded that corporate tax reduction was most effective.
Another defect of Obamanomics was that part of the increased spending authorized by the 2009 stimulus bill was held back. Remember the oft-repeated claim that the spending would go for "shovel ready" projects? That didn't happen, though spending will flow more rapidly now in an effort to lower unemployment and claim economic success during the fall election campaign.
In his January 2010 State of the Union address, President Obama recognized that the United States must increase exports. He was right, but he has done little to help, either by encouraging investment to increase productivity, or by supporting trade agreements, despite his promise to the Koreans that he repeated in Toronto. Export earnings are the only way to service our massive foreign borrowing. This should be a high priority. Isn't anyone in the government thinking about the future?
Mr. Obama has denied the cost burden on business from his health-care program, but business is aware that it is likely to be large. How large? That's part of the uncertainty that employers face if they hire additional labor.
The president asks for cap and trade. That's more cost and more uncertainty. Who will be forced to pay? What will it do to costs here compared to foreign producers? We should not expect businesses to invest in new, export-led growth when uncertainty about future costs is so large.
Then there is Medicaid, the medical program for those with lower incomes. In the past, states paid about half of the cost, and they are responsible for 20% of the additional cost imposed by the program's expansion. But almost all the states must balance their budgets, and the new Medicaid spending mandated by ObamaCare comes at a time when states face large deficits and even larger unfunded liabilities for pensions. All this only adds to uncertainty about taxes and spending.
Other aspects of the Obama economic program are equally problematic. The auto bailouts ran roughshod over the rule of law. Chrysler bondholders were given short shrift in order to benefit the auto workers union. By weakening the rule of law, the president opened the way to great mischief and increased investors' and producers' uncertainty. That's not the way to get more investment and employment.
Almost daily, Mr. Obama uses his rhetorical skill to castigate businessmen who have the audacity to hope for profitable opportunities. No president since Franklin Roosevelt has taken that route. President Roosevelt slowed recovery in 1938-40 until the war by creating uncertainty about his objectives. It was harmful then, and it's harmful now.
In 1980, I had the privilege of advising Prime Minister Margaret Thatcher to ignore the demands of 360 British economists who made the outrageous claim that Britain would never (yes, never) recover from her decision to reduce government spending during a severe recession. They wanted more spending. She responded with a speech promising to stay with her tight budget. She kept a sustained focus on long-term problems. Expectations about the economy's future improved, and the recovery soon began.
That's what the U.S. needs now. Not major cuts in current spending, but a credible plan showing that authorities will not wait for a fiscal crisis but begin to act prudently and continue until deficits disappear, and the debt is below 60% of GDP. Rep. Paul Ryan (R., Wisc.) offered a plan, but the administration and Congress ignored it.
The country does not need more of the same. Successful leaders give the public reason to believe that they have a long-term program to bring a better tomorrow. Let's plan our way out of our explosive deficits and our hesitant and jobless recovery by reducing uncertainty and encouraging growth.
Mr. Meltzer is a professor of economics at Carnegie Mellon University, a visiting scholar at the American Enterprise Institute, and the author of "A History of the Federal Reserve" (University of Chicago Press, 2003 and 2010).
1a)The Bucyrus Travesty: A tale of two Obama loan guarantees
The manager of a Milwaukee custard stand on Friday asked Joe Biden for lower taxes in return for dessert, and the Vice President told him not to be "a smartass." Perhaps on his own visit to Wisconsin today, President Obama will have a better answer for the latest blue-collar casualties of his Administration's anticarbon obsessions.
Last Thursday, the U.S. Export-Import Bank denied loan guarantees to Reliance Power Ltd., an Indian utility building a coal-fired power plant near Sasan, India. Bucyrus International Inc., a South Milwaukee-based manufacturer, was ready to export some $310 million in mining equipment—and about $600 million over three years—but Reliance's order was contingent on the favorable financing rates provided by the Ex-Im guarantee. Reliance cancelled the order Monday morning and will reboot with Bucyrus's competitors in China or Belarus if the bank doesn't reverse in the coming days.
The Reliance-Bucyrus deal met all of the Export-Import Bank's qualifying criteria, including the tougher environmental and CO2 standards that the White House has imposed over the last several months. But the bank nonetheless rejected the project in a 2-to-1 vote under pressure from the Treasury and State Departments. "We were absolutely flabbergasted and shocked," Bucyrus CEO Tim Sullivan told us in an interview.
According to Mr. Sullivan, the decision was reached because the "carbon footprint" of the project is too large, though the Ex-Im Bank has published no objective guidelines to quantify that judgment. "President Obama has made clear his Administration's commitment to transition away from high-carbon investments and toward a cleaner-energy future," Obama-appointed Ex-Im Chairman Fred Hochberg said in a statement. After "careful deliberation," he added, the project's "adverse environmental impact" made it untenable.
Those deliberations can't have been too careful, however, given that the Sasan plant is already under construction and is scheduled to open in 2012. The coal to feed it will still be mined, and demon carbon will still be emitted. The only difference is that an American business, and the 1,000 or so people who work there or for the companies in its 13-state Midwest supply chain and were depending on the project, will no longer benefit.
We've long opposed the Export-Import Bank, which was established to aid U.S. manufacturing exports with loan guarantees, when the market is a better arbiter of the allocation of capital. Then again, the bank is the prototype for Mr. Obama's agenda of politically directed credit, which makes the Bucyrus decision especially revealing about White House priorities.
In February, for instance, the Administration approved a $528 million low-cost loan to Fisker Automotive, which plans to build a luxury hybrid car that will sell for $48,000 before Uncle Sam's $7,500 tax credit. Fisker's plant is in Mr. Biden's hometown of Wilmington, Delaware.
In other words, the White House is happy to subsidize "green jobs" at a company that hasn't proven it can compete commercially. But it refuses to subsidize the export-related jobs at a globally competitive U.S. company like Bucyrus because they involve coal, which despite Washington's distaste will remain the workhorse of U.S. and world energy supply for decades to come.
The Bucyrus travesty is a preview of the consequences of the cap-and-tax program that Democrats are still trying to ram through Congress, and the peculiar income redistribution that it entails: taking from the middle class that depends on coal for jobs and power and giving to politically connected investors and the affluent who can afford to pay $40,000 for a car. Maybe Mr. Obama will explain to Bucyrus workers today why they are less deserving than Fisker.
1b)Racial Gerrymandering Backfires:The president's job approval rating among whites is likely only about 39%.
By JOHN FUND
Nothing has done more to rattle Democratic incumbents than a National Public Radio poll earlier this month on the outlook in the 70 most competitive races in the House -- 60 of which involve seats now held by Democrats and 10 by Republicans.
The numbers revealed in the poll have eye-popping implications. The NPR poll showed that Republicans lead the generic ballot test in these 70 districts by 49% to 41%, and have a five-point lead in districts with a Democratic incumbent. At the same time, Republicans have a solid 16-point lead in those competitive districts they currently hold. These numbers indicate the anti-incumbent political winds are blowing in one direction -- against the Democrats.
Democrats concerned about why they are faring so poorly note that President Obama's approval numbers have continued to erode. The latest Wall Street Journal/NBC poll shows him with a 45% job approval rating, with 48% disapproving. That is dangerous territory for Democrats, since a president's approval rating is historically a good guide to how many seats a party in power loses in a mid-term election. In the last poll taken before Democrats lost 54 House and eight Senate seats in the 1994 mid-term election, President Clinton had a job approval rating of 46%.
Mr. Obama's approval numbers may mask the real peril Democrats face because his job rating among blacks is an overwhelmingly positive 91%. As Michael Barone of "The Almanac of American Politics" points out, those readings imply that his job approval rating among whites is likely only about 39%.
That's especially significant because most of the 70 competitive House races polled by NPR (as well as most of the states with the closest Senate races) have below-average populations of black voters. Racial gerrymandering justified by dubious interpretations of the Voting Rights Act has concentrated blacks into mostly safe Democratic districts, meaning now that most competitive seats are more white than average. These districts are more likely to be hostile to President Obama's agenda, and thus more likely to be treacherous political terrain for Democrats. No wonder party strategists are so worried about this fall.
1c)Lion's Den: Jihadi undercuts president
By DANIEL PIPES
The Times Square bomber flies in the face of Obama administration efforts not to name Islamism as the enemy.
The jaw-dropping court testimony by Faisal Shahzad, the would-be Times Square bomber, singlehandedly undermines Obama administration efforts to ignore the dangers of Islamism.
Shahzad’s statements stand out because jihadis, when facing legal charges, typically save their skin by pleading not guilty or plea bargaining.
Consider a few examples:
• Naveed Haq, who assaulted the Jewish federation building in Seattle, pleaded not guilty by reason of insanity.
• Lee Malvo, one of the Beltway Snipers, explained that “one reason for the shootings was that white people had tried to harm Louis Farrakhan.” His partner John Allen Muhammad claimed his innocence to the death chamber.
• Hasan Akbar killed two fellow American soldiers as they slept in a military compound, then told the court: “I want to apologize for the attack that occurred. I felt that my life was in jeopardy, and I had no other options. I also want to ask you for forgiveness.”
• Mohammed Taheri-azar, who tried to kill students on the University of North Carolina by running over them in a car, and issued a series of jihadi rants against the US, later experienced a change of heart, announced he was “very sorry” for the crimes and asked for release so he could “reestablish myself as a good, caring and productive member of society” in California.
THESE EFFORTS fit a broader pattern of Islamist mendacity; rarely does a jihadi stand on principle.
Zacarias Moussaoui, 9/11’s would-be 20th hijacker, came close: His court proceedings began with his refusing to enter a plea (which the presiding judge translated into “not guilty”) and then pleading guilty to all charges.
Shahzad, 30, acted in an exceptional manner during his appearance in a New York City federal court on June 21. His answers to Judge Miriam Goldman Cedarbaum’s many questions (“And where was the bomb?” “What did you do with the gun?”) offered a dizzying mix of deference and contempt.
On the one hand, he politely, calmly, patiently, fully and informatively described his actions. On the other, he in the same voice justified his attempt at cold-blooded mass murder.
The judge asked Shahzad after he announced an intent to plead guilty to all 10 counts of his indictment: “Why do you want to plead guilty?” A reasonable question given the near certainty that guilty pleas will keep him in jail for long years. He replied forthrightly: I want to plead guilty and I’m going to plead guilty 100 times forward because – until the hour the US pulls it forces from Iraq and Afghanistan and stops the drone strikes in Somalia and Yemen and in Pakistan and stops the occupation of Muslim lands and stops killing Muslims and stops reporting the Muslims to its government – we will be attacking [the] US, and I plead guilty to that.”
Shahzad insisted on portraying himself as replying to American actions: “I am part of the answer to the US terrorizing [of] the Muslim nations and the Muslim people, and on behalf of that, I’m avenging the attacks,” adding that “we Muslims are one community.”
Nor was that all; he flatly asserted that his goal had been to damage buildings and “injure people or kill people” because “one has to understand where I’m coming from, because... I consider myself a mujahid, a Muslim soldier.”
WHEN CEDARBAUM pointed out that pedestrians in Times Square during the early evening of May 1 were not attacking Muslims, Shahzad replied: “Well, the [American] people select the government. We consider them all the same.”
His comment reflects not just that American citizens are responsible for their democratically elected government, but also the Islamist view that, by definition, infidels cannot be innocent.
However abhorrent, this tirade does have the virtue of truthfulness. Shahzad’s willingness to express his Islamic purposes and spend long years in jail for them flies in the face of Obama administration efforts not to name Islamism as the enemy, preferring such lame formulations as “overseas contingency operations” and “man-caused disasters.”
Americans – as well as Westerners generally, all non- Muslims and anti-Islamist Muslims – should listen to the bald declaration by Faisal Shahzad and accept the painful fact that Islamist anger and aspirations truly do motivate their terrorist enemies.
The writer (www.DanielPipes.org) is director of the Middle East Forum and Taube distinguished visiting fellow at the Hoover Institution of Stanford University.
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2)Avoiding the Austerity Trap Deficit reduction is an unhealthy obsession.
By THOMAS FRANK
Recent increases in the federal deficit have made the pundit class tremble, but they aren't really mysterious. They are, for the most part, a product of the recession, which has reduced tax revenue, justified the bailouts and last year's stimulus package, and brought unemployment insurance and other "automatic stabilizers" into effect.
Solve the recession and we'll eventually bring the deficit back down, too. The real danger is that instead we will decide to regard the deficit as a problem entirely unto itself—a quasi-moral issue that needs to be addressed independently of the larger economy—and that we will proceed to budget-balance ourselves right back into the economic ditch. For a glimpse of how this works, take a look at once-booming Ireland, where a starvation diet designed to control the deficit has made the recession more or less permanent.
Austerity would be a dreadful choice at the moment, but the urge to blunder burns hotly among the policy priesthood these days. One reason for this is that deficit reduction is often a proxy for something else, some object of political desire that must remain obscure because it is too distasteful to discuss openly.
Usually that object is "entitlement reform," a euphemism for cutting or reconfiguring Social Security and Medicare, programs that cause offense to certain parties for reasons entirely apart from their effects on the federal balance sheet.
Consider, in this connection, the endless war on "entitlements" waged by the legendary deficit hawk Pete Peterson, a former commerce secretary, former investment banker, and current billionaire. Mr. Peterson has attacked these entitlements for decades now, often describing them as a betrayal of our capitalist moral fiber.
Once upon a time Mr. Peterson preached his gospel of thrift through books and essays; since the early 1990s, however, he has built up two foundations to help fight his war on entitlements, the Concord Coalition and the Peter G. Peterson Foundation, both of them dedicated to his obsessive vision of fiscal austerity.
Their work goes forward in a confusing welter of partnerings, commissions, studies and public events involving deficit hawks from both parties. Back in April, for example, the Peterson Foundation's "Fiscal Summit" brought together the ever-so different perspectives of the Republican Alan Greenspan and the Democrat Robert Rubin.
To you this may seem like a transparent trick, but here in Washington such bipartisan rituals are always thought to be highly convincing stuff.
Something similar was no doubt the goal last December when another Peterson project, a news organization called the Fiscal Times, started "partnering" with the Washington Post, furnishing that august institution with a story on—of course—the prospects for a special commission on the deficit. The story referenced an officer from a different Peterson project and a study done by yet a third Peterson project, but somehow never managed to disclose its own Peterson provenance, causing a short-lived stir in blogdom.
Memories of that incident resurfaced when it was announced that the Peterson Foundation, along with two other foundations and an outfit called America Speaks, was going to conduct a high-tech "national town meeting" on—of course—the burning issue of the federal deficit.
For liberals of the more skeptical variety, this combination of electronic populism with the agenda of the Peterson Foundation was an obvious warning flag, a signal that propaganda was in the offing. Several members of the president's own fiscal commission were to be in attendance at the get-together, and the results of the proceedings were to be presented to the full commission later on. Clearly the fix was in!
The event took place as scheduled last Saturday, with thousands of citizens meeting in different cities. They duly absorbed a booklet alerting them to the danger of deficits. They deliberated. And then something funny happened on the way to the consensus.
According to a preliminary compilation of results, participants supported "an extra 5% tax" on incomes of greater than $1 million per year (by 68%) and an increase in the corporate income tax rate (59%). They thought a "carbon tax" was a good idea
(64%) as well as a "securities transactions tax" (61%). On Social Security, austerity was nowhere in sight as 85% backed raising the limit on taxable income, and only a miserable 27% thought that we should "create personal savings accounts." Majorities favored cutting defense spending and expressed support for further recovery measures even if they increase the deficit.
These liberal results have been brought to you in part by a distinctly conservative foundation—bipartisanship at its best. Will Washington listen? Probably not. One reason we are rushing to austerity these days is because that's what the comfortable people who chat so amiably in the green room are utterly certain we ought to be doing. The deficit numbers, they think, are just too big, too frightening. And deep in their hearts, they also know that the costs of austerity will always be borne by others.
Thomas Frank was born and raised in Kansas City. He graduated from Shawnee Mission East High School in Prairie Village, Kansas (1983), and from the University of Virginia (1987). He founded The Baffler magazine in 1988, and he edits it to this day. He has a PhD in American History (U. of Chicago 1994) and is the author of four books, all of them having to do with the cultural inversions of our times: The Conquest of Cool (1997), about the advertising industry; One Market Under God (2000) about the myths of the New Economy; and What's the Matter With Kansas? (2004) about the red-state mindset. His book about conservative governance, The Wrecking Crew, was published in 2008.
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3)Reporter, Consultant, Housewife, Spy
By Clarice Feldman
Late Monday the Department of Justice announced the arrest of 10 people in the United States who had been planted here by the Russians in the 1990's to blend in and gather information which they transmitted back to Russia. The defendants are charged with acting as unregistered agents of Russia and conspiracy to commit money laundering. There is no charge involving the illegal possession of classified documents.
A number of these people were married to each other. One couple at least had two teenaged children living with them. The plants, known as "illegals" because their life stories were completely fictitious ("legends") lived in Arlington, Virginia, Boston, New York and New Jersey and held a variety of positions.
Today Reuters reported that the eleventh member of the group, Robert Christopher Metsos, 55, who did not reside in the U.S. but traveled here often, was arrested at Cyprus's Larnaca airport as he tried to leave the island for Budapest. While bail is not normally granted in such cases, the court in Cyprus did grant it for reasons that are not disclosed in the article. The complaint suggests he is a secret SVR (Russian intelligence service) agent stationed abroad who often served as a bagman, providing funds for the illegals here.
Most of the press accounts have dealt with the strange juxtaposition of Obama and Medvedev chomping on hamburgers in Arlington, Virginia, as the raids on the Russian agents were taking place, or the details of the spy craft -- largely old hat, John le Carré, low tech stuff with a few modern updates like payoffs by ATM and wifi communication networks and internet encryption (steganography).
The complaints (there are two) in the cases are interesting ,but I am focused on something else altogether: How much, in fact, the complaint describes conduct by the foreign intelligence agency of the Russian Federation, the "SVR" which departs from normal spy craft, reflects either extreme carelessness on the part of the SVR or reflects its view that in such an open society as ours they could neglect first principles and get away with it.
What do I mean?
Normally, the work of "illegals" is shepherded in the host country by people with diplomatic immunity. In this case that would mean embassy or consular officials, officials or employees of the Russian UN Mission, or other official representatives who if caught cannot be prosecuted. If they cannot be prosecuted, it is unlikely they will spill operational details. If caught, they will simply be expelled.
At the fringes of the conduct described in the complaint there are such figures, but at the heart of the charged conspiracy are illegals, often acting in very high profile positions.
Normally the work of "illegals" is low profile. When caught, you can expect the neighbors to talk about how quiet and unobtrusive they were. But here, as least two of the illegals, Donald Heathfield and Vicky Pelaez, were so high profile that I think their job was to influence policy and public opinion as much as it was to gather useful information. And they were so high profile, that within an hour of reading the complaint I was able to get a clear picture of their overt activities.
Donald Howard Heathfield was easy to find on Zabasearch, Linkedin, and by his present employment.
According to his Linkedin page, he is CEO of FutureMap.com and was once a partner in Global Partners, which lists several major U.S. corporations as its clients. It mentions no degrees earned but reports he attended a number of well-known institutions:
Harvard University
Harvard University Kennedy School of Government
ENPC MBA Paris - ENPC School of International Management
The Futuremap.com page is the most interesting.
I grant that many firms that advertise themselves as consultants describe their work in vague terms that tell you little of what they do. Even given that, however FutureMap is (or was) an exquisitely done bit of luftmenschen prose.
According to the site, the firm has offices in Boston, Paris and Singapore.
Its mission is described as:
enabl[ing] governments and businesses to develop comprehensive preparedness systems and build a culture of strategic proactivity and anticipatory leadership
Monday night when I read its site, the firm bragged of its connections to Harvard, MIT and private sector specialists in the USA, the UK and France" It boasted "We are in constant dialogue with thought leaders...at leading research centers.". It listed no officers' names, clients or projects. Today access to the site is restricted.
It looked to me Monday night when I could access it like an amateur operation or a not very clever front. The most recent activities involved CO2 emission reductions. A trace remains of the company's work on a site respecting a July Conference in Chicago last year. My notes show it advertised it could help companies and institutions with "strategic preparedness, strategic planning, balanced scorecards, business and corporate intelligence."
We really know very little about Heathfield because his life is, the government claims, a "legend." He arrived here in 1999. He lives with Tracey Lee Ann Foley, whose bio is also a "legend."
The government alleges (para 44 of the Complaint) that it searched Heathfield's safe deposit box and found what appeared to be a genuine birth certificate for a Canadian born Donald Howard Graham Heathfield; they learned in 2005 that the man whose birth certificate this was, died.
As for Tracey, in the same safe deposit box the government says it found a series of photographic negatives which appear to be of her in her 20's. "On all the negatives of the younger Foley, save one, the name of the company that produced the film on which the negatives ere printed has been excised. On one negative, the name of the film company remains visible. The name on the film is "TACMA"; based on law-enforcement research I know that TACMA was a Soviet film company. There is also evidence that she traveled under a false British passport supplied for her by the SVR. (Another of this group was given a fake Irish passport in Italy by the SVR. I'm waiting for the Europeans to make the same fuss about this that they did when Israel was charged with using fake passports in Dubai.)
Thus, it appears that neither of these people are who they have claimed to be.
The complaint describes the work of this couple in transmitting materials to the SVR headquarters "Moscow Center" or the "Center" and (para 19) states "During 2004,Donald Howard Heathfield...met with an employee of the United States Government with regard to nuclear weapons research."
The official is unnamed and the details not given.
Among the activities with which this pair was tasked was the following:
*To gather information with regard to the use of the internet by terrorists
*United States policies in Central Asia
*Problems with United States military policy
*"Western estimation of Russian foreign policy"
In responding to this task list, these two passed on information about the turnover at the head of the CIA and the 2008 presidential election which they said was "received in private conversation" with a "former legislative counsel for US Congress, specialist in [information omitted], member of faculty in economics of [information omitted]"
In another communication Heathfield said he'd established contact with a "former high-ranking United States Government national security official."
In 2007 SVR told the pair to use "'Farmer" to start building network of students in D.C.
As the case develops, I look forward to finding out who these contacts were and how deep the relationships with Heathfield were. Moreover, since so many spies seem to have been recruited at Johns Hopkins SAIS, it will be interesting to learn who Farmer is and whether he tried to revive the SAIS recruitment network.
Heathfield's firm bragged of its close relationships with Harvard and MIT as well, It is worth watching to see if those were lies or if there is more to that.
In any event, Heathfield and Tracey seem the big catches at the moment for the U.S. They have teen aged children and SVR has to be sweating whether or not they'll turn, because they seem to have far more information at their disposal than normal "illegals" in the game have,
Almost as high profile but in entirely different circles is another of the defendants, Vicky Pelaez, who was a columnist for the Spanish language el Diario/La Prensa, She lives with co-defendant Juan Lazaro in Yonkers, NY. Much of their communications and receipt of Russian funds occurred outside the U.S. in South America. Lazaro purports to be Uruguayan "with Peruvian citizenship" says the complaint (para 45) But intercepted communications he had with Vicky picked up him saying to her "we moved to Siberia...as soon as the war started."
Moscow was apparently unhappy with the caliber of Lazaro's work, but Vicky established a very high profile among native leftist and Hispanic operations.
Clearly she was working to obtain information from and to influence a different tranche of the population than was Don.
Hot Air reported her public record:
Dig around the Internet and you'll find a few choice nuggets written by Ms. Pelaez, mostly in Spanish. US prisons as modern-day slavery? Check. Arizona's "unholy" immigration law as modern-day Nazi legislation? Check. The United States as wanton human rights violator? Check. We've been so unfair to so many other well-meaning, anti-imperialist nations, and it turns out that Ms. Pelaez just happens to have been a bit more pro-active in her advocacy for one or more of them.
I don't mean to suggest that these two defendants were the only ones trolling for information in elite pools of influence shapers.
The complaint notes, for example, that in Feb of 2009 Cynthia Murphy detailed contacts with a New York financier prominent in politics and a major fundraiser for a major political party and a personal friend of a current Cabinet official. SVR was anxious for her to recruit among students, to expand potential contacts within the government, dig up data on students who apply or have been hired for a job by the CIA. (She was in New Jersey, but the complaint doesn't specify at which university she was building connections.)
Still, from the complaint Heathfield and Pelaez were very high profile and the others not quite so much.
I discussed the breaking story online with my favorite ex-spook and asked what he thought of this unorthodox operation. He replied:
Issue here is the high risk, low gain for an op like this. Huge investment which signals a direction that the Russians felt was worth taking but could they ever imagine this?
Damage assessment will be huge.
An Illegal, alias Reino Gikman, ran Bloch. (You can cite the Hanssen affidavit para 105, which states that Bloch was an associate of an Illegal.)
What cards does Putin have to play to get his SVR staff officers out of jail? The Russians have to be in panic with the scenario that one or more turn in jail and offer the goods as to how they have been trained and what their mission in the US was. That will be the nightmare scenario.
In the meantime, as this plays out, I suppose it is an unwelcome reminder that the Cold War is not dead, that spies still mine the waters around us, and universities and public officials need to be more mindful than they have been of the danger in our midst.
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4)Why Islam Will Never Accept the State of Israel
By Steven Simpson
It is a common belief that the "Arab-Israeli conflict" is a conflict of two peoples fighting over the same piece of land and is therefore one of nationalism. Rarely, if ever, do we hear or read of the religious component to this conflict.
However, if anything, the conflict is more of a "Muslim-Jewish" one than an "Arab-Israeli" one. In other words, the conflict is based on religion -- Islam vs. Judaism -- cloaked in Arab nationalism vs. Zionism. The fact of the matter is that in every Arab-Israeli war, from 1948 to the present, cries of "jihad," "Allahu Akbar," and the bloodcurdling scream of "Idbah al- Yahud" (slaughter the Jews) have resonated amongst even the most secular of Arab leaders, be it Nasser in the 1950s and 1960s or the supposedly "secular" PLO of the 1960s to the present. Indeed, the question must be asked: If this is really a conflict of different nationalisms and not Islamic supremacism, then why is it that virtually no non-Arab Muslim states have full (if any) relations with Israel?
There is a common Arabic slogan that is chanted in the Middle East: "Khaybar, Khaybar! Oh Jews, remember. The armies of Muhammad are returning!" It would be most interesting to know how many people have ever heard what -- or more precisely, where -- Khaybar is, and what the Arabs mean by such a slogan. A short history of the Jews of Arabia is needed in order to explain this, and why Islam remains so inflexible in its hostile attitude towards Jews and Israel.
Until the founder of Islam, Muhammad ibn Abdallah, proclaimed himself "Messenger of Allah" in the 7th century, Jews and Arabs lived together peacefully in the Arabian Peninsula. Indeed, the Jews -- and Judaism -- were respected to such an extent that an Arab king converted to Judaism in the 5th century. His name was Dhu Nuwas, and he ruled over the Himyar (present day Yemen) area of the Arabian Peninsula. In fact, it is most likely that the city of Medina (the second-holiest city in Islam) -- then called Yathrib -- was originally founded by Jews. In any event, at the time of Muhammad's "calling," three important Jewish tribes existed in Arabia: Banu Qurayza, Banu Nadir, and Banu Qaynuqa.
Muhammad was very keen on having the Jews accept him as a prophet to the extent that he charged his followers not to eat pig and to pray in the direction of Jerusalem. However, the Jews apparently were not very keen on Muhammad, his proclamation of himself as a prophet, or his poor knowledge of the Torah (Hebrew Bible). Numerous verbal altercations are recorded in the Qur'an and various Hadiths about these conflicts between the Jewish tribes and Muhammad.
Eventually, the verbal conflicts turned into physical conflicts, and when the Jews outwardly rejected Muhammad as the "final seal of the prophets," he turned on them with a vengeance. The atrocities that were committed against these tribes are too numerous to cite in a single article, but two tribes, the Qaynuqa and Nadir, were expelled from their villages by Muhammad. It appears that the Qaynuqa left Arabia around 624 A.D. The refugees of the Nadir settled in the village of Khaybar.
In 628 A.D., Muhammad turned on the last Jewish tribe, the Qurayza, claiming that they were in league with Muhammad's Arab pagan enemies and had "betrayed" him. Muhammad and his army besieged the Qurayza, and after a siege of over three weeks, the Qurayza surrendered. While many Arabs pleaded with Muhammad to let the Qurayza leave unmolested, Muhammad had other plans. Unlike expelling the Qaynuqa and Nadir, Muhammad exterminated the Qurayza, with an estimated 600 to 900 Jewish men being beheaded in one day. The women and children were sold into slavery, and Muhammad took one of the widows, Rayhana, as a "concubine."
In 629 A.D., Muhammad led a campaign against the surviving Jews of Nadir, now living in Khaybar. The battle was again bloody and barbaric, and the survivors of the massacre were either expelled or allowed to remain as "second-class citizens." Eventually, upon the ascension of Omar as caliph, most Jews were expelled from Arabia around the year 640 A.D.
This brings us, then, to the question of why modern-day Muslims still boast of the slaughter of the Jewish tribes and the Battle of Khaybar. The answer lies in what the Qur'an -- and later on, the various Hadiths -- says about the Jews. The Qur'an is replete with verses that can be described only as virulently anti-Semitic. The amount of Surahs is too numerous to cite, but a few will suffice: Surah 2:75 (Jews distorted the Torah); 2:91 (Jews are prophet-killers), 4:47 (Jews have distorted the Bible and have incurred condemnation from Allah for breaking the Sabbath), 5:60 (Jews are cursed, and turned into monkeys and pigs), and 5:82 (Jews and pagans are the strongest in enmity to the Muslims and Allah). And of course, there is the genocidal Hadith from Sahih Bukhari, 4:52:177, which would make Adolph Hitler proud. "The Day of Judgment will not have come until you fight with the Jews, and the stones and the trees behind which a Jew will be hiding will say: 'O Muslim! There is a Jew hiding behind me, come and kill him!"' Thus, the Arab Muslims had their own "final solution" in store for the Jews already in the 7th century.
The fact that Muslims still point to these (and many other) hateful verses in the Qur'an and Hadith should give Jews -- not just Israelis -- pause to consider if there can ever be true peace between Muslims and Jews, let alone between Muslims and Israel. When the armies of Islam occupied the area of Byzantine "Palestine" in the 7th century, the land became part of "Dar al-Islam" (House of Islam). Until that area is returned to Islam, (i.e., Israel's extermination), she remains part of "Dar al harb" (House of War). It now becomes clear that this is a conflict of religious ideology and not a conflict over a piece of "real estate."
Finally, one must ask the question: Aside from non-Arab Turkey, whose relations with Israel are presently teetering on the verge of collapse, why is it that no other non-Arab Muslim country in the Middle East has ever had full relations (if any at all) with Israel, such as faraway countries like Iran, Afghanistan, and Pakistan? Indeed, why would Persian Iran -- conquered by the Arabs -- have such a deep hatred for Jews and Israel, whereas a non-Muslim country such as India does not feel such enmity? The answer is painfully clear: The contempt in which the Qur'an and other Islamic writings hold Jews does not exist in the scriptures of the Hindus, Sikhs, Buddhists, and other Eastern religions. Therefore, people that come from non-Muslim states do not have this inherent hatred towards Jews, and by extension, towards Israel. But when a people -- or peoples -- is raised with a scripture that regards another people and religion as immoral and less than human, then it is axiomatic why such hatred and disdain exists on the part of Muslims for Jews and Israel.
Islam -- as currently interpreted and practiced -- cannot accept a Jewish state of any size in its midst. Unless Muslims come to terms with their holy writings vis-à-vis Jews, Judaism, and Israel and go through some sort of "reformation," it will be unlikely that true peace will ever come to the Middle East. In the meantime, unless Islam reforms, Israel should accept the fact that the Muslims will never accept Israel as a permanent fact in the Middle East.
4a)Farrakhan charges Jews with 'anti-black' behavior: Nation of Islam minister writes to leaders of more than dozen major US Jewish groups, denominations seeking 'repair of my people from the damage' he claims Jews have caused blacks for centuries
Nation of Islam Minister Louis Farrakhan has written the leaders of more than a dozen major US Jewish groups and denominations seeking "repair of my people from the damage" he claims Jews have caused blacks for centuries.
Farrakhan sent the letter along with two books from the Nation of Islam Historical Research Team that the 77-year-old minister said prove "an undeniable record of Jewish Anti-Black behavior," starting with the slave trade and laws that discriminated against blacks.
"We could charge you with being the most deceitful so-called friend, while your history with us shows you have been our worst enemy," he wrote.
Farrakhan has long accused Jews of wrongdoing in speeches, but he has rarely addressed Jewish groups so directly in writing.
The Anti-Defamation League, a Jewish civil rights group which distributed copies of the letter, said in a statement Tuesday that Farrakhan's "anti-Semitism is obsessive, diabolical and unrestrained. He has opened a new chapter in his ministry where scapegoating Jews is not just part of a message, but the message."
'Sitting on top of the world in power'
In the letter, dated last Thursday, the Chicago-based Nation of Islam leader said he sought a dialogue with Jews. He sent the letter to groups including the Orthodox and Reform movements, the American Israel Public Affairs Committee, and the American Jewish Committee, a New York-based advocacy and humanitarian nonprofit that spearheads inter-religious dialogue.
"This is an offer asking you and the gentiles whom you influence to help me in the repair of my people from the damage that has been done by your ancestors to mine," he writes. "Your present reality is sitting on top of the world in power, with riches and influences, while the masses of my people ... are in the worst condition of any member of the human family."
In the past, Farrakhan's most inflammatory comments have included referring to Judaism as a "gutter religion" and calling Adolf Hitler "wickedly great." Recently, he has railed against the American Israel Public Affairs Committee, which he claims is conspiring to trap the US in a war with Iran.
Farrakhan echoed similar comments last Saturday in an Atlanta speech titled, "Who Are the Real Children of Israel?"
He did not respond to several messages seeking comment Tuesday. Farrakhan has over the years denied claims of anti-Semitism, arguing his remarks are often taken out of context and that criticism of Jews in any light automatically earns the "anti-Semite" label.
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5)RBS: Get Ready for the 'Cliff Edge'
RBS is sounding the alarm on risk assets with a call that markets are at risk of falling off the edge of the cliff. They refer to equity investors as the “worst cult in history….which has no basis in fact, or history, but yet seems universally accepted.” (There’s actually a strange truth in that comment). They believe the current downturn could very well “destroy” this “cult”:
Get ready for the cliff-edge. Be maximum long duration of nominal government bonds in safe haven markets. This means US, UK, Germany, in that order, and perhaps others. Be long gold. Think the unthinkable – we always do, and you should ask yourself why the consensus refuses to do so, and seems perpetually on the ‘everything is ok’ side of events. If I was any more bond bullish we would explode, this is identical to 2008, including the incredible complacent (and we believe wrong) consensus.
They’re not just bullish on treasuries – they are super bulls with a 2% target on 10 year yields:
Get ready for sub 2% on 10-yr USTs; sub 2% on 10-yr bunds; and the UK not far behind, 2.5% 10-yr Gilts. Our long held US$2000 gold view as a trade for the breakdown of the financial system looks increasingly ok. We cannot stress enough how strongly we believe that a cliff-edge may be around the corner, for the global banking system (particularly in Europe), and for the global economy (particularly in the US/Europe). We have been wrong before, but we think the risks associated with us being wrong are low (ie, rates just stay where they are, yields back up a little bit, after all we are not about to enter a new global economic upswing!). The risks associated with us being right are >10% returns in 10-yr USTs at the same time that equities/commodities will collapse far beyond what even some equity bears anticipate.
In terms of valuations they don’t see today’s levels as being particularly attractive:
For a counter consensus look at just how rich equities actually are if we are right about the economy, and how far they can fall, look at Robert Shiller’s 10-yr real adjusted P/E ratio on the S&P500, which uses ten year smoothed earnings. We have used this as our marker for proper (unbiased) long-term valuations for many years – and is freely available to all investors to look for themselves on his Yale website – and it sits at 20.0. One pillar of our framework is that sometimes it is right to buy equity; sometimes it is right to sell equity. And call us old fashioned, but we will buy at low PEs, and sell at high PEs. So a PE now of 20, sits very uncomfortably right at the TOP of its range if we take out the pre-first great depression spike in 1929 and Nasdaq 2000 spike. We argued in 2007/08 pre crunch that we would buy equities again when they looked cheap, which would be at 6-8 PE on this metric. That is an equity fall of 60-70% from here. Fine, call us mad with such big numbers if you desire, and say we will miss the big equity rally on a structural view (what rally, having been short for 10 years, S&P500 total return since 1Jan2000 is actually -8.1%!). Meanwhile an investment in 30yr USTs has returned you +126%. You do not have to see -60-70% off risk assets to be cautious here, we are just suggesting this is what the numbers say are attainable if certain circumstances prevail, using a 120 year snapshot. The big turnover in the US economy will lead to dramatic turns down in valuations we suspect – and may finally destroy the world’s worst cult: the cult of the equity, which has no basis in fact, or history, but yet seems universally accepted.
What’s this all add up to? They believe the endgame approaches:
This all sounds somewhat doomsdayish, so we should update how the real economy/banking is panning out for us. It is saying: the end-game approaches.
RBS says housing is in the lynch pin in the whole economy and that the next leg down will trigger the collapse:
First, we have been waiting for the last of the US fiscal easings, the first time homebuyer tax credit, to pass, and have been arguing strongly for some weeks to investors to get ready for the violent turn down which is about to occur. And the trigger (not the only reason, but the trigger) is the US housing market. This is all falling into place lovely. Last week saw the NAHB housing index dip; housing starts at -10%mom (6.3% under consensus), and building permits -5.9%mom (8.4% under consensus). This week has seen existing home sales -2.2% (8.2% under consensus); and new home sales -32.7%mom (14% under consensus). Our theme is building. The BoE financial stability report today shows there is a surplus of 1.75m housing units built since 2006 and even with normal household creation, this will take two years to remove. So the weak housing theme should now pollute its way into consumers, and kickstart the rebuilding of the savings rate (just 3.6% and delayed from rebuilding by the fiscal/monetary shock and awe).
The problems don’t stop there though. The banking system is still a mess:
Second, the European banking system faces problems. We have seen downgrades continue in Europe this week. We discussed in last week’s weekly overview about the US$450bn shortage of dollar asset funding for non-US banks, and why the Fed had to reopen swap lines. We are amazed there is not now immense market & media focus on the new letters that will bring forward the end-game and worsen it: 2a-7.
It gets even worse (amazingly). They believe the implementation of SEC rule 2a-7 could be what pushes us off the edge of the cliff:
What is this? The new (well ‘new’, it comes in on 30 June but has been known for a year despite no-one discussing it at all) SEC rule. This forces US money market funds – up to now the provider of USD liquidity to those who need it – to become ‘safer’. The SEC puts it thus: ‘The amendments tighten the risk-limiting conditions imposed on tax exempt money market funds by rule 2a-7…the amendments are designed to reduce the likelihood that a tax exempt fund will not be able to maintain a stable net asset value.’ [source: SEC]. Our short-term strategists plan a piece next week. The key for us in FI is that these US$2.8trn of 2a-7 funds now have to a) own 30%, not 5%, of assets in sub 7 day liquid paper; b) weighted average maturity of fund has to fall to 60 from 90 days. We can all see the logic – the sovereign defaults from EMU have the power to hit EMU banks badly, and the USA does not want to repeat the calamitous ‘breaking the buck’ problem when in 2008 Reserve Primary Fund wrote down its Lehman assets, took its net asset value sub $1, caused a run on money funds which then forced them to sell their assets, cutting NAV for other funds, etc. Contagion.
From what we can see, the USA is basically pulling up the drawbridge and retreating into its fortress, trying to protect its financial system from coming European banking problems. But the consequence is clear. Banking is about confidence. If you are reliant on markets to fund yourself and that confidence wanes, a total stop can occur immediately/within days. Northern Rock (75% reliant on wholesale markets) was the first example of this in the UK, though not the last. Once we apply 2a-7 (and the ability of US money funds to ‘put’ their EMU bank assets back to the issuer EMU banks within 7 days on signs of trouble, since the US money funds will from now on increasingly own 1yr securities with a 7 day put) to our economic slowdown/deflation themes, this means one thing. If there is a slowdown and sovereign trouble, the problems facing EMU banking have through this rule potentially become a whole lot worse. This worsens – and brings forward – the ‘cliff edge’ potential.
And what will be the result of the collapse? “Monster” quantitative easing:
Monster QME coming. With fiscal policy off the agenda, we have always expected more QME (quantitative monetary easing). And this time will be different. We have always argued that buying of bonds is less efficient than guaranteeing yield levels, and that yields are the key, not raising money supply, given demand for credit is dead (so all QME did was raise bank reserves and show money velocity collapse). There has been a subtle shift from central banks toward our view, most evident from the UK MPC, whose £200bn programme started by focusing almost purely on underlying M4, but ended differently with MPC speeches about how successful it was in keeping Gilt yields low.
The next shock and awe will be in the form of large scale QME, but with one massive difference – it will be focused on lowering yields, not expanding money supply (I think). So do not be surprised if the next QME is about guaranteeing yields at, say, 2% 10-yr US, or lower. Even if it is a vanilla buying programme as before, expect it to focus along the curve and bring all yields down in a monster bull flattener (you cannot bring down 5s and not 30s because that just changes savings’ maturity preference, it does not deter saving). Note today’s Telegraph article alleging that the Fed are already mulling more QME of another US$2.6trn (to take their balance sheet to US$5trn), which is totally unsurprising (we think CBs are far more dovish worldwide than investors/investment banks are). Others will follow. We are getting more bond bullish, not less.
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6)Statistics of the Current Graduating IAF Pilots
The 160th IAF Flight School Course will end in a festive ceremony on
Thursday (July 1). 20% of the graduates were not born in Israel.
The graduation ceremony of the 160th IAF Flight School Course will take
place on Thursday (July 1) and will be attended by Prime Minister Benjamin
Netanyahu, President Shimon Peres, Defense Minister Ehud Barak, Chief of the
General Staff Lt. Gen. Gabi Ashkenazi and the Commander in Chief of the
Israeli Air Force, Maj. Gen. Ido Nehoshtan.
The cadets can chose one of four possible subject majors for a Bachelor’s
degree that they complete during the pilot course. In the current course,
25% studied IT Management, 32.5% studied Economics & Management, 37.5%
studied Government & Politics, 2.5% studied Computer Science and 2.5% had
already acquired a Bachelor's degree prior to the course.
47.5% of the graduates live in northern Israel, 47.5% are from central
Israel, and 5% are from southern Israel. The northernmost town in which a
graduate resides is Moshav Yonatan in the Golan Heights. The southernmost
community is the city of Beer Sheva. 42% of the graduates live in urban
areas, 33% live in community towns, 12% are from a moshav (cooperative
town), 10% are from a kibbutz, and 2.5% live in regional councils.
20% of the graduates were not born in Israel. 32.5% of the graduates speak a
foreign language fluently: 15% speak English, 12.5% speak Russian, 2.5%
speak French, and 2.5% speak Danish.
7.5% of the graduates identify themselves as religious, while 7.5% consider
themselves as being traditional.
75% of the graduates studied math and science as a major subject in high
school, 20% integrated math and science with the humanities as their course
of study in high school, and 2.5% solely studied the humanities.
45% of the course graduates were active in youth movements before their
recruitment; 12.5% of the graduates were in the Scouts Movement, 10% in Bnei
Akiva, 5% in Bnei Moshavim, and the rest were from other youth movements.
12.5% of the graduates volunteered for a year of community service before
enlistment in the IDF, and 13% took part in pre-military preparatory
programs. 22.5% of the graduates served in other parts of the IDF before
joining the pilot's course, and 12.5% started the course in previous cycles
and are completing it with the current class.
As for the family background of the graduates, 17% of the graduates' mothers
work in teaching and instruction, while 25% of the graduates' fathers work
in engineering. 35% are the oldest sibling in their families, and 35% are
the youngest. One graduate is married and has one child.
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7)Analysis: Oren's vital credibility
By HERB KEINON
Were envoy's remarks deliberately misrepresented?
Newspapers around the world ran reports Monday quoting Israel’s ambassador to the US, Michael Oren, as saying at a Foreign Ministry briefing in Jerusalem last week there was a “tectonic rift” in US-Israeli ties. These reports were based on two stories that appeared Sunday in the Hebrew media.
Given that Prime Minister Binyamin Netanyahu is set to meet with US President Barack Obama in Washington next week; that there has been palpable friction between Washington and Jerusalem since Obama and Netanyahu took over; and that both sides are now obviously looking to put the relationship on a better footing, this type of comment is toxic and understandably a headline-grabbing statement.
But the question is whether the statement was ever actually made.
According to a report in Haaretz, Oren “painted a dark picture of US-Israeli relations” during the briefing, and “described the current situation as a ‘tectonic rift.’” The report cited five diplomats, “some of whom took part in the briefing or were informed about the details,” as saying that “Oren described relations between the two countries in bleak terms.”
According to the report, “Oren said relations between the two countries are not in a crisis because a crisis is something that passes. Oren opted to use terms from geology: ‘Relations are in the state of a tectonic rift in which continents are drifting apart.’” A very similar description of the briefing appeared in Yediot Aharonot, an indication that both papers were told about the meeting by the same person.
Oren emphatically denied ever having said anything of the kind, telling The Jerusalem Post that “the alleged leak from the Foreign Ministry is an egregious distortion of what I in fact said. There are tectonic shifts – not rifts – in America’s foreign and domestic polices, reflecting President Obama’s commitment to changing the status quo, and these are posing new challenges for Israel. There is no rift in Israel’s relations with the Obama administration, and no crisis.”
One thing for certain is that just a few days before the Foreign Ministry meeting, at a briefing with The Jerusalem Post editorial board, Oren painted a much brighter picture of relations with the US, saying that the Obama administration was “as good if not better” on Israel than “many previous administrations.”
“There are disagreements, I’m not going to be Pollyannaish,” Oren said. “But there are two qualifiers you have to attach. One, we have had disagreements with other administrations in the past, and the litmus with the relationship is not whether there are disagreements, but how you approach the disagreements.”
Indeed, Oren used the exact same geological metaphor in his briefing with the Post as he did at the Foreign Ministry, but he used it to illustrate something completely different from what he allegedly said at the ministry.
Here is a direct transcript of what Oren told the Post: “Let’s take it back, and talk about Obama and where we are in our relationship with the US,” he said, framing the discussion.
“It is a different administration than an administration we have known before. It is an administration with a president who comes in promising change, and he is not a status quo president in any way. He is very serious about the change. He is serious about the change domestically; he is serious about the change in foreign policy. Domestically it is a greater role for government, it is more services. The health care debate was sort of the iconic debate, and there will be more debates like it.
“One of my favorite comments from the health care debate was by [Speaker of the House] Nancy Pelosi, who said that for the first time in American history, family care and child care have been put on the same level of priority as foreign policy and defense. For me that basically says it all. That is a sea shift.
“There has been much talk of various crises in our relationship with the Obama administration, and I am always going out there saying there is no crisis, there is no crisis. What often looks like a crisis is in fact a product of the shift. Like, you know you have tectonic shifts and they can create a tsunami. But the tsunami is symptomatic of the shift, and not vice versa. So the shift in the foreign policy is a shift – you all know the outreach to the Muslim world, the Cairo speech, the Turkey visit. It is a greater emphasis on cooperation with international organizations, a greater emphasis on outreach negotiation, engagement.”
And then, to illustrate the shift in foreign policy, Oren suggested reading a paper written two years ago by two State Department officials, James Steinberg and Anne-Marie Slaughter.
“Where do we fit in all of this? We are a small pixel in the general picture of change,” Oren went on at his meeting with the Post. “We tend to see everything through our prism, but we are one dot, although a relatively central dot, as the administration itself will say.”
Nothing in those words about a tectonic or seismic shift creating a geological chasm between the two countries, rather about how the Obama administration was shifting its own emphasis, and how that was impacting on everything else around it.
Given that Oren used a geological metaphor both with the Post, and then again with the Foreign Ministry, it does not seem logical that he would use the same metaphor to illustrate completely different conclusions. Oren, by the way, said the overall message of the briefing he gave the Post was exactly the same as he gave the Foreign Ministry.
Which raises an important question: What in the world is going on here? Clearly someone briefed the Hebrew papers, and – apparently – was a bit free and loose with what Oren said. So why would someone leak an erroneous quote? The possible explanations are as varied as the continents.
The first is that it was a simple mistake, and that the person who leaked the information simply did not understand what Oren meant. Stuff happens.
The second is that someone was deliberately trying to poison Netanyahu’s visit before he travels to Washington. There are, obviously, people in the foreign service and other governmental organizations who – for various reasons – are not exactly rooting for Netanyahu to have a successful term and an easy ride with the US, and who could be interested in poisoning the atmosphere of the US visit, and torpedoing the prime minister’s meeting with Obama.
A third explanation is that the Foreign Ministry is an institution like all other institutions, full of internal jealousies and rivalries – only even more so. Someone there just might not like Oren – an intellectual outsider who leapfrogged over the Foreign Ministry’s own ranks to secure the plum job in the foreign service – and who want to embarrass him. Or, it could be someone’s effort to send a message to Netanyahu to make sure that the next two plum foreign policy jobs soon to be given out – ambassador to the UN and consul- general in New York – remain in-house.
There is, of course, another explanation, that what was leaked and reported was indeed what Oren said.
However, using the words “tectonic rift” to describe US-Israel ties run contrary to what Oren said he believes, which is that there is no crisis with the US. Also, from a personal perspective it makes no sense for him to make such a characterization since this description will obviously make his job in Washington more difficult; will not exactly endear him with Netanyahu; and will make him look bad since he must share some responsibility if the ties with the US are that appalling.
Some will say that it is likely Oren, an accomplished historian but inexperienced diplomat, really did make the comment attributed to him because he has a track record of putting his foot in his mouth.
To back up their point, these Oren detractors will point to the recent interview on a Washington radio station where Oren said Jonathan Pollard was “run by a rogue organization in the Israeli intelligence community,” a comment he latter retracted. Oren’s critics could also point to the briefing he gave by phone to Israel’s consul-generals after the dustup in March with US Vice President Joe Biden regarding the building in Ramat Shlomo, in which he was quoted as saying that US-Israeli relations were at their lowest point in 35 years.
Oren denied making that comment as well, saying that what he actually said was that this was the first time in 35 years that the administration – in this case State Department spokesman P.J. Crowley – drew a link between the nature of the US-Israel relationship and movement in the peace process.
But Oren’s comment then assumed a life of its own and entered the public debate and consciousness, regardless of whether it was actually ever uttered. The same thing is happening with the newest remark, something that is both sad and frightening.
Israel’s envoy to the US should be able to hold a meeting with colleagues at the Foreign Ministry with confidence that what is said remains in the room, or – at the very least – if leaked, then at least is leaked accurately.
If Oren is afraid to speak with the ministry, then not only does he lose – it has to be lonely not being able to openly talk with anyone; not only does the ministry lose – fewer and fewer people will actually want to speak candidly there; but the country will lose, because in this type of environment one can forget about ever being able to forge a coherent policy.
And, heaven only knows, this country badly needs the tools to fashion coherent.
7a)NCO allegedly spied for Hizbullah
By YAAKOV KATZ
IDF arrests suspect for allegedly passing intel.
A non-commissioned IDF officer has been arrested for allegedly spying for Hizbullah. According to the suspicions, the NCO, who has served in the military for over a decade, passed on information regarding the military’s deployment along the northern border as well as several “soft points," or places along the border that are not well-guarded by the IDF.
The suspect, a resident of northern Israel, was arrested several weeks ago in a joint Israel Police and Military Police investigation. Five other Israeli civilians have been arrested in the affair and another two are currently at large.
A senior Military Police officer said Wednesday that the NCO was contacted by a group of Israeli criminals known to police for their past involvement in drug-related crimes. The group asked the NCO to provide them with details regarding the IDF’s deployment along the border with Lebanon, from where they received the drugs that they smuggled into Israel.
The criminals put the NCO in touch with a number of Lebanese nationals as well, who the IDF said were drug dealers but were closely affiliated with Hizbullah. The NCO was paid thousands of dollars in exchange for his assistance.
“Drugs smuggling is a known platform for passing information to the enemy,” the senior MP officer said, adding that while the NCO was paid to assist in drug smuggling he was allegedly aware that the information he was providing could be used by Hizbullah for other purposes as well.
IDF sources said that the Northern Command was involved in the investigation and made the appropriate changes to its deployment as required.
This is not the first time that IDF NCOs have been caught spying for Hizbullah.
In 2002, Lt.-Col. Omar el-Hayib, a senior Bedouin military officer, was arrested for spying on Israel for Hizbullah. El-Hayib was convicted of espionage, contact with a foreign agent and drug dealing but was acquitted of a charge of treason. From the village of Beit Zarzir in the North, El- Hayib served in the IDF's Northern Command and was responsible for the recruitment of Beduin soldiers.
The prosecution claimed he transferred sensitive information regarding the movements and security surrounding then-OC Northern Command Maj.-Gen. (res.) Gabi Ashkenazi to Lebanon, in addition to tank movements along the border as well as other military secrets. In exchange, el-Hayeb received cash payments as well as dozens of kilograms of heroin and hashish.
In 2008, Sgt.-Maj. Louis Balut was convicted of spying for Hizbullah during the Second Lebanon War and sentenced to 11 years in prison. Balut, an IDF tracker in the IDF, was convicted of giving sensitive military information to Hizbullah and of holding contacts with a foreign agent between December 2007 and February 2008. Balut was not convicted on counts of treason and aiding the enemy in wartime, which appeared in the original indictment and for which he would have received far more serious punishment.
Balut was convicted of giving the sensitive information to Hizbullah as part of a drug deal with three Lebanese nationals associated with the guerrilla group.
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8)‘Because I said so’ signals strong parental leadership
By John Rosemond
This is the second in a series loosely titled "I Don't Know About You, But I 'm Ready for the 1960s to be Over and Done With," in which I lament the destructive effect of that decade on American child rearing - since known as parenting.
Last week's column concerned the corrosive idea that children should be allowed to express their feelings freely, which all too many of today's kids obviously believe is their prerogative.
The 1960s were marked by several assassinations, the war in Vietnam, recreational drugs, ersatz peace and love, and a plague, still with us, of general stupidity when it came to children. A prime example of the latter is the notion that parents should not answer challenges to their authority with "Because I said so." The new parent-babblers - mental health professionals, mostly - maintained that those four words insult a child's intelligence, damage self-esteem, stifle curiosity, engender feelings of insignificance and powerlessness, and send the message that might makes right.
The upshot of this nonsense was that parents began explaining themselves to their children. These explanations lead almost inevitably to arguments. The arguments lead to frustration, resentment, yelling, guilt, stress, anger and other symptoms of family dysfunction. What's that old saying about good intentions?
As did most members of my generation, I heard the four words in question as a child. I heard them fairly often, in fact. I did not like them, but neither did I suffer from "Because-I-Said-So-Induced Trauma to Mental and Emotional Capacity." I just didn't like them, but then children do not like lots of things that are in their best interest.
"Because I said so" is a simple, declarative statement of leadership, of authority. Leadership is primarily a matter of decisiveness, and effective leaders (as opposed to politicians) do not often justify their decisions to the people they are charged with leading. In justifying an executive decision, the executive begins to sound less than completely confident in the direction he is taking.
Effective leaders act like they know what they are doing. "Because I said so" is simply part of the act - an important part, no less. It also keeps things simple for those being led. They do not have to know what the leader knows; they simply have to trust. So, as regards children, those much-maligned four words are an economical way of saying "At this point in your life, you are incapable of understanding how I make decisions. Explanations, therefore, are superfluous to your happiness.
For now, all you need to do is trust me. I'm taking care of business for you. Isn't that great?"
"But John," a reader might well reply, "if a child asks a question, doesn't the child deserve an answer?"
Yes, but "Why?!" and "Why not?!" - in belligerent response to parental decisions - are not questions. They are challenges to parental authority. If they were genuine questions, children would listen respectfully and at least occasionally agree. Instead, they interrupt and begin arguing, and not some of the time, but all of the time.
Which is to say, there is no such thing as an argumentative child. There are only parents who are not comfortable with their authority and cannot bring themselves, therefore, to say "Because I said so."
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