John Mauldin reports on an Houston energy meeting he attended and the picture continues bleak for U.S. energy dependency.
This report describes the various agencies, Congressional oversight committees the energy industry must cope with and it appears we are producing more red tape and bureaucrats than BTU's. That is what big government is all about.
Want to achieve energy independency - shut down the Energy Department.
Get ready as it wrecks our health care system next. (See 1 and 1a Below.)
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Can't allow those who cannot afford homes to be left in that position.
Hold that thought... November's getting closer! (See 2 below.)
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The weakest of our three pillars yet also the strongest is The Supreme Court.
The Court must depend upon Congress for its salaries, it has no army to enforce its rulings yet, as long as Americans wish to remain law abiding, it therefore, is the strongest body and that is why I believe it will have the last word on Obama. (See 3and 3a below.)
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Iran is not likely to take the cyber attack laying down.
Was Israel behind Stuxnet?
America is stuck with a president who abhors taking a tough stance. Obama's soft wimpy Carter like approach simply hardens the opposition and will probably result in greater tragedy. Where is Truman when we need him?(See 4 and 4a below.)
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PLO would like Abbas to quit the negotiations.
Obama made the settlement issue a a front and center big deal and it has now boomeranged in his face.
The word settlements is Arab propaganda which our friends in the media use but, in actuality, it relates to building in a city of 250,000 plus. No matter where Israelis expand as long as the Palestinians will not recognize the State of Israel as legitimate Palestinians, Arabs, Muslims can argue, claim and protest any building is illegal. Thus, their own intransigence has boomeranged on them as well.
Israel will keep building, Palestinians will keep their head in the sand and Obama will continue to press Netanyahu for concessions he cannot lightly make. (See 5 below.)
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Eleanor Clift believes Obama somehow lost his magic and his leadership has thus, misfired. Clift places the real blame for Obama's failures on Republicans because they positioned themselves to make him fail.
It is not the student who failed the exam it is the pencil.
The elites in the media and TV, who are losing their reader and listener ship in droves just cannot get it. They cannot understand why the unwashed masses find extreme liberalism repugnant to the smell and touch.
But then Rick Sanchez probably cannot understand why CNN fired him. (See 6 and 6a below.)
I play tennis with a former Chair of the County's Democrat party, a lawyer who portrays himself as an avowed 'Che' lover and a few other assorted liberals.
They have been very silent of late. I have respected their bewilderment of why ideas of Far Left Progressives are being abandoned and consigned to where they belong - the dung hill of history.
Kim Strassel and I have a bet with one of them and I pledge to remain silent when, hopefully, I accept his check.
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Dick
-------------------------------------------------------------------------------------1)Repsol Sells Brazil Oil Stake to Sinopec
By SANTIAGO PEREZ, SIMON HALL And BERND RADOWITZ
In one of the largest Chinese oil acquisitions to date, Repsol SA of Spain announced the sale of 40% of its Brazilian assets to China Petrochemical Corp. for $7.1 billion.
The joint venture, valued at $17.8 billion overall, guarantees Repsol the funding to explore the vast and coveted oil fields off Brazil, South America's biggest economy, Repsol said in a statement. Officials at China Petrochemical, or Sinopec Group, couldn't be reached for comment Friday, when most corporate and government offices were closed for China's National Day holiday.
China's Oil Explorers Look to Africa. Access thousands of business sources not available on the free web. Learn More .The transaction gives China a piece of one of Latin America's largest foreign-controlled energy ventures. It is the latest sign of the country's growing prominence in the international energy sector as it expands both access to and ownership of raw materials needed to fuel the country's economic expansion.
The Repsol deal is only slightly smaller than the biggest oil takeover by a Chinese firm to date, Sinopec Group's $7.2 billion acquisition in 2009 of Addax Petroleum Corp., based in Switzerland.
At the center of the deal are Repsol's holdings in the coveted subsalt area off Brazil, which had been anticipated to constitute a long-term cash cow for the Spanish oil giant. The subsalt play is exceptionally expensive because the oil is found in water depths of more than 2,000 meters and several thousand meters further under the sea bed, below layers of sand, rocks and salt.
Repsol had said that bringing its Brazilian subsalt oil finds into production could cost between $10 billion and $18 billion. Friday's deal eliminates the need for the initial public offering of its Brazilian stake that the company had contemplated, Repsol said.
Meanwhile, analysts at Banco BPI in Portugal said the sale to Sinopec gives a "surprisingly high valuation" to Repsol's Brazilian assets, pricing them at 19% above the bank's valuation.
Repsol was Brazil's third-biggest hydrocarbons producer in 2009, and it has a leading position in exploration activities in Brazil's offshore Santos basin, where the Guara and Carioca fields are located. Repsol produces oil at the Albacora Leste field in the Campos basin, and it has a total of eight discoveries and other exploration blocks in the Santos, Campos and Espirito Santo basins.
Repsol and Sinopec will continue their respective expansion plans in Brazil and will participate, jointly or individually, in future bidding rounds in the area, Repsol added.
Sinopec's Brazil entry frees up Repsol to allocate more exploration resources elsewhere in the world, such as in Western Africa which the company identified as one of its expansion areas.
In June, the International Energy Agency said that overseas investments by China's national oil companies in 2010 looked as though they would outpace by far the $18.2 billion spent in 2009. From January 2009 to April 2010, the country's three state-owned oil majors—China National Petroleum Corp., or CNPC, Sinopec, and China National Offshore Oil Corp.—spent around $29 billion world-wide to acquire oil and gas assets, the IEA said.
In addition to those direct investments, CNPC and Sinopec were involved in 11 loan-for-oil deals with eight countries valued at $77 billion, and the companies entered contracts committing them to invest at least $18 billion in future exploration and development, mostly in Iraq and Iran, the IEA noted.
Brazil is an increasingly important target for Chinese investment, with resources deals valued at $4.3 billion agreed upon so far this year, compared with $362 million in 2009, according to data from Dealogic.
The Brazilian state oil company Petroleo Brasileiro SA, or Petrobras, also agreed to a $10 billion loan from China Development Bank last May in exchange for crude-oil supply to Sinopec Group over 10 years. Petrobras also gave Sinopec, the parent of listed unit China Petroleum & Chemical Corp., rights to explore two deep-water blocks in Brazil for oil and natural gas.
Sinopec Group General Manager Su Shulin in August confirmed that his state-owned company was in talks with Brazil's OGX Petroleo e Gas Participacoes SA over a bid for offshore assets in Brazil.
Under the deal announced Friday, Repsol will retain 60% of the Brazilian venture, which is valued at $17.8 billion following the stake sale agreement. The joint Brazilian operation will develop some of the world's most important exploratory discoveries in recent years, Repsol said in a filing with the stock market regulator.
Sinopec's junior role in Repsol Brasil, as the joint venture is called, marks the continuation of a strategy by China's resource companies to make their overseas investments more palatable by taking minority stakes with partners that have better long-term relations with the host country.
China's biggest oil refiner and fuel marketer, Sinopec Group, has been going overseas aggressively because it currently buys some 70% of the product it refines. For Repsol, with oil demand flat or declining in Europe, teaming up with Sinopec provides access to the biggest energy market in the world, where oil demand is expected to continue to soar.
The deal means Repsol Brasil is "fully capitalized to develop all of its current projects in Brazil, including world-class discoveries in the Guara and Carioca pre-salt basins," Repsol said in a news release.
Repsol and Sinopec Group will continue their respective expansion plans in Brazil and will participate, jointly or individually, in future bidding rounds in the area, Repsol added.
Repsol shares rose 4.95% to close at €19.83 in Spain. Shares in construction company Sacyr Vallehermoso SA, which owns 20% of Repsol, gained 13%, rising to €4.96.
1a) The Morality of Chinese Growth
by John Mauldin
Oil at $125 a Barrel, Gasoline at $5
This week I am at a conference in Houston. I must confess that I don't attend many of the sessions at most conferences where I speak. But today, the guys at Streettalk Advisors have such a great lineup that I am there for every session. But it's Friday and I need to write. The solution? This week you get a "best of" letter. The best ideas I've heard and the best charts I've seen at this conference. Then we close with two short but very thoughtful essays from Charles Gave and Arthur Kroeber of GaveKal on "The Morality of Chinese Growth." Lots of charts and something to make you think. Should be a good letter.
Oil at $125 a Barrel, Gasoline at $5
John Hofmeister is the former president of Shell Oil and now CEO of the public-policy group Citizens for Affordable Energy. He paints a very stark (even bleak, as he gets further into the speech) picture of the future of energy production in the US unless we change our current policies. First, because of the aftereffects of the moratorium. It is his belief that the drilling moratorium will effectively still be in place until at least the middle of 2012. There won't even be new rules until the end of 2011, and then the lawsuits start.
Gulf oil production will be down by up to 1 million barrels a day. Imported oil is now 67% of oil usage but will go to 75% by 2012. He thinks crude oil will be up to $125 and gasoline between $4-$5 at the pump. And it will only get worse.
He describes the problem with the electricity from coal production. The average coal plant is 38 years old, with a planned-for life of 50 years. Our energy production capability is rapidly aging, and we are not updating it fast enough.
He argues that the fight between the right and the left has given us 37 years without a realistic energy policy, as policy gets driven by two-year political cycles but good energy planning takes decades. There are 13 government agencies that regulate the energy industry, with conflicting mandates that change very two years. There are 22 congressional committees that have some level of involvement and oversight of the energy industry.
The following table is from data provided by Triple Double Advisors LLC, an energy specialty investment firm in Houston, Texas. John White was sitting next to me and showed me this table, pointing out the poor performance in terms of investor returns from renewable energy sources and the larger returns from Master Limited Partnerships where investors are seeking yield. It seems the market is voting that it doesn't have much confidence in the renewable energy world. Hofmeister suggests that government subsidies for renewable energy will go away under the pressure to get the fiscal deficit under control. Maybe the market senses that. He says we need to create a 50-year plan for our energy policy that transcends the political cycle. (I am going to get this speech transcribed and will post it so you can read it. This guy talks sense.)
David Rosenberg and Capacity Utilization
I am a big fan of David Rosenberg (former chief economist at Merrill and now with Gluskin Sheff in Toronto), and have really enjoyed getting to know him the last few years. He is a fun guy, even if his data is not exactly bullish. It was hard to pull out the best of his charts for this letter, because he had so many.
The first chart shows that real final sales are the lowest, four quarters after the end of a recession, that they have ever been. Average growth is 4%, but we're up less than 1% in the current recovery. The second chart (side by side with the first, below) shows the contribution of various sectors to real GDP growth. You find that of the 3% average growth over the last four quarters, 1.8% was inventory rebuilding. His point (and one I have made as well) is that this is not sustainable. At some point rebuilding will no longer be as big a factor, as inventories will get closer to equilibrium. And the consumer does not look like he is going to ride to the rescue.
Rosie thinks we could slip into negative growth by the end of the year.
This next chart shows U-6 unemployment compared to manufacturing capacity utilization rates. Unemployment will have difficulty getting better as long as capacity utilization rates are at what is typically thought of as recession levels.
The next and last chart from Rosie is on housing, showing us the large number of vacant homes and the vacancy rate. Home values are not likely to rise nationwide (there will be some good local pockets) until the vacancy rates come down. Ditto for new home construction and the jobs from that sector. Gary Shilling (see next section) says he thinks home prices could drop another 20%.
Gary Shilling: Commercial Real Estate and Employment
The next two charts are from good friend Gary Shilling (selected out of about 50 he had). The first shows us that the commercial real estate price index is down almost 40% from its peak. Judging from the graph, it looks like the freefall may be over for now, assuming we do not get into another recession too soon. Is it any wonder that bank lending is down, since so much lending was in commercial real estate and CRE construction?
The last chart shows us the trend line for the relationship between employment growth and GDP. It turns out that you need at least 3% GDP growth to get meaningful employment growth. If growth is slowing down to less than 2%, it is going to be very difficult to really address the unemployment problems.
And now, let's turn to GaveKal and China.
The Morality of Chinese Growth
We (GaveKal) spend quite a bit of time trying to understand the drivers and fundamentals of Chinese growth. And while we have seen some recent signs of a policy-driven cyclical slowdown (see The Wen Jiabao Put and our latest Quarterly Strategy Chart Book), we remain very optimistic about the Mainland's structural potential. But up until know, we have not really touched on the more philosophical implications of the Chinese growth story. In that respect, a recent client comment triggered a couple responses we modestly believe could interest the broader readership.
Client Comment: GaveKal's writings on economics are unmistakably filled with fundamental beliefs regarding human potential, advancement, creativity and the pursuit of knowledge. And even if I did not know your backgrounds, these views appear decidedly French in nature: deeply held beliefs on the rights and dignity of man.
So how does a group of economists focused on the mind and the soul as well as the pocketbook reconcile the sociological challenges presented by modern China? It is undeniable that a country that pulls half a billion people out of subsistence farming in two decades is doing a lot for human decency, no matter how they accomplish it. So maybe I need to throw away my Western lenses when thinking about this. But I really wonder sometimes how you view the authoritarian qualities of 21st century China as it relates to treatment of political rivals, the autonomy of the courts, religious freedoms, control of all forms of media, etc. Should we bend with the breeze and accept that this is the new world?
Charles answers: As I have tried to highlight in a couple of recent documents (see The Way the World Works and Ricardo, Schumpeter & the Cost of Capital), I firmly believe that an overly powerful and extended government is very dangerous. Having said that, I also believe that a total absence of the State is even worse. And since you mention my intrinsic Gallicness, I will turn to the philosophers of the Enlightenment, who happened to often be French, and who showed quite conclusively that human freedom can be exercised in three areas:
1. Political freedom (voting the incompetents out, separation of powers)
2. Social freedom (freedom of worship, sending one's children to the school of one's choice, creating a union, etc.)
3. Economic freedom (the ability to create a business, hire or fire employees, etc., regulated by contract law between acting parties).
What the philosophers of the 18th century argued was that the Church had to move out of the political sphere, and the State out of the other two. In Hong Kong, which GaveKal calls home, we enjoy one of the freest societies in the World: we have total social freedom, total economic freedom but yet very little political freedom. Still, I believe this compares extremely well with what we have in France, where the church of Marxism has invaded the State and the educational system, destroying both, while the obese State has invaded the social and economic sphere, leaving entrepreneurs without oxygen. As Tocqueville expected, we have moved towards a strange and benign "molle dictature".
This brings us to China and your questions. Today, the Chinese government is prepared to increase the population's economic freedom (far from complete), as well as the social freedom (courts of justice gaining grounds on political cronies, some social rights). But as for political freedom - see you in 20 years. In essence, this is the same deal offered to Singaporeans 30 years ago by Lee Kwan Yew, who now effectively vote for Lee Kwan Yew & sons every time they get a chance!
As a result, and to use Hanna Arendt's terminology, China is gradually moving from a totalitarian state to an authoritarian state, with a technocratic bias (à la Singapore). To a certain extent, the Chinese government discharges some of its responsibilities pretty well, with some gaping and horrible holes. So while the immediate picture may look ugly, the movement is in the right direction.
Arthur Kroeber answers: Basically I think you need to clarify your questions. Are you surprised that China has been able to deliver high-speed growth while remaining an authoritarian state? If so, there is nothing odd about this. South Korea and Taiwan both achieved their highest sustained growth under brutal dictatorships; Japan achieved its first growth spurt (in the Meiji era) under a benign despotism and its second (post-war) under a one-party state. And of course, most of the modern Western democracies were not really democracies in any modern sense (only landowners could vote, women did not vote…) while they were industrializing. The idea that countries must be liberal democracies in order to achieve high-speed early-stage economic growth is a strange fantasy with no empirical support.
Or is the question that you are worried that China's path to success means that other countries will follow the same route? Again, the evidence at hand shows that each successful economy, like Tolstoy's unhappy family, is successful in its own way and that outside models are of limited use (see Dani Rodrik's One Economics, Many Recipes).
The China model could work in China because of a specific set of historical and institutional factors that are not replicable elsewhere.
These include a 1,500-year history of centralized bureaucratic rule, which set the template for the current governance system of bureaucratic authoritarianism; an almost equally long history of active commerce and preindustrial capitalism which set the template for private sector activity once the state decided to get out of the way; and the presence of Hong Kong, which meant that China could make full use of modern Western institutions (such as a reliable legal system, property rights, efficient services, etc) without having to go through the cumbersome decades-long political hassle of building these at home. (On this latter very important point see the opening chapter of Yasheng Huang's Capitalism with Chinese Characteristics).
Or is your concern that China has been able to have a dynamic economy while doing nothing to reform its political system, and will continue to be able to do so ad infinitum? Here the perception that China has made no political reform is specious. There is a gigantic difference between China in the 1970s and China today in terms of freedom of expression, breadth of political discourse, personal liberty and property rights.
Through the end of Mao's rule, China was a totalitarian dictatorship ruled by individual caprice, with generally disastrous results (30-40mn deaths in the 59-62 famine, 10s of millions more in the Cultural Revolution, etc.). Since then it has transformed itself into a bureaucratic authoritarian state with very imperfect but generally increasing accountability of government. This is a massive political transformation. (And Huang, cited above, makes the important point that this "directional liberalism" -- this confidence that things were getting durably better -- was very important in encouraging China's entrepreneurs to start work in the 1980s, despite the absence of what we would consider clear property rights).
If we judge China not by how far it has to go but by how far it has come, the change has been dramatic, and we can reasonably expect the political system to continue to evolve in the coming decades, though not necessarily in linear or predictable ways.
Or is your concern that we in the West somehow have to render moral judgment on China, which requires some calculus along the lines of X amount of economic progress is worth Y amount of political repression, so if repression = y-1 then China is "good" and if y+1 then China is "bad"? Here I will wax philosophical and distinguish myself from Charles somewhat. Unlike him (and strangely, since I am generally considered the house Communist), I am not a Marxist, as I strongly believe that it is a society's underlying political bargains that tend to shape economic activity, not the other way round.
As Isaiah Berlin pointed out, societies grapple with the problem that there are lots of good things - justice, wealth, individual liberty, social stability, security, equity - and we cannot maximize all of them at once. Trade-offs among these ultimate values must be made and that is what politics is about. Societies create a set of trade-offs by negotiation (and by the way democratic elections are not in themselves a mechanism for making these trade-offs; they are simply a mechanism for transmitting information to the agents who are negotiating the trade-offs; so it is a fallacy to presume as many do that only via democratic elections can a society achieve a "true" bargain) and the ultimate bargain configures the playing field on which economic actors operate.
Among the societies we describe as democratic capitalist there are vast differences in the bargains and hence in the nature of economic activity. America tolerates levels of instability, crime, inequality and pernicious religious zealotry that Europeans and Japanese consider absurd, but it gets in return a much more dynamic entrepreneurial system of wealth creation. Japanese willingly accept levels of social conformity that Westerners consider bizarre, but achieves a high level of social stability and tremendous success in economic areas (such as high precision manufacturing), where self-disciplined social cohesion is a plus.
China, like all societies, is working out its bargain. It is still very much a work in progress but the process is dynamic, not static.
We Americans have a strange utopian tendency to assume that among all possible social bargains there is one perfect bargain out there (probably ours) and that it is our job to judge how well other people are keeping on the path to that bargain, any straying from which necessitates perdition for them and gnashing of teeth for us. But maybe we should just stop worrying about it. China will become what it will become and hopefully whatever it becomes will produce good results both materially and spiritually for most Chinese. As long as our society continues to do the same for us, it does not much matter whether the two societies wind up looking a lot or a little like each other. Chacun son gout!
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2)Democrats Vote Down 5 Percent Rule.
In a bid to stem taxpayer losses for bad loans guaranteed by federal housing agencies Fanny Mae and Freddy Mac, Senator Bob Corker (R-Tenn) proposed that borrowers be required to make a minimum 5% down payment in order to qualify. His proposal was rejected 57-42 on a party-line vote because, as Senator Chris Dodd (D-Conn) explained, "passage of such a requirement would restrict home ownership to only those who can afford it."
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3)A Clear Danger: Obama, a 'Living Constitution,' and 'Positive Rights'
By Monte Kuligowski
I think it's safe to say that President Obama is not exactly fond of the United States Constitution as written. That statement is based on Mr. Obama's own words and his choice of nominees to the federal bench.
Mr. Obama the activist-turned-politician has always been shrewd about hiding his far-left philosophy from the general public, whether by voting "present" or by speaking in abstract language. Of course, Obama, like most people, cannot completely hide his worldview. Thankfully, we have record of a few of his unguarded moments from which his radical views have escaped.
On January 18, 2001, then-state senator Barack Obama appeared on WBEZ-FM out of Chicago to discuss the federal courts and civil rights. During the interview, Mr. Obama found himself engaged in a subject that stirs up his leftwing passions. Below are some of his bombshell comments (emphasis added):
The Supreme Court never ventured into the issues of redistribution of wealth and sort of more basic issues of political and economic justice in this society. And to that extent, as radical as I think people tried to characterize the Warren Court, it wasn't that radical. It didn't break free from the essential constraints that were placed by the founding fathers in the Constitution, as least as it's been interpreted, and [sic] Warren Court interpreted in the same way that, generally, the Constitution is a charter of negative liberties, says what the states can't do to you, says what the federal government can't do to you, but it doesn't say what the federal government or the state government must do on your behalf.
That straightforward excerpt provides a clear window into the constitutional philosophy of Barack Hussein Obama, Jr. As radical as "people tried to characterize" the Warren Court, Mr. Obama hints that the Constitution may be interpreted even more radically: in a way which would give the federal government power to tell the people what the feds (and states) must do on their behalf.
We're not talking about the Constitution's enumerated functions of the federal government; we're talking about reading into the Constitution a list of positive rights which satisfy leftist notions of "political and economic justice."
Mr. Obama correctly (and painfully) refers to the Constitution as a "charter of negative liberties," as "interpreted."
Lost on the left, however, is the fact that the Bill of Rights was enacted to protect the states from central control. In spite of history and context, the U.S. Supreme Court has long since turned the amendments passed to protect the states against the states. The Warren Court ran wild in that abuse, telling the states and their localities what they couldn't do -- by overturning timeless speech and religious traditions of the people and effectively nationalizing political correctness.
The only "negative liberties" in the Constitution which legally apply to the states are the "Civil War Amendments" (the 13th, 14th, and 15th). Yet we will see below that the dream of the left is for the 14th Amendment to be interpreted in a way to allow for "positive Constitutional rights" that the feds must provide across the board. Once that door is opened, the "Constitution" would essentially render the entire country one big welfare state (see South Africa's Constitution, e.g., which mandates that the central government provide "adequate housing" and "sufficient food and water" for its dependents).
The federal judiciary has already robbed the individual localities across the country of their Judeo-Christian heritage, but that isn't enough for the president. Mr. Obama believes he can "break free" from the additional "constraints" placed in the Constitution by the founders. Toward that end, Mr. Obama's nominees to the federal judiciary share his leftist worldview. From his "wise Latina" and "gay rumor" appointments to the Supreme Court, to his legion of federal appellate and district court nominees, the common denominator is the idea of appointing high-ranking judges who see the Constitution as a "living document."
In President Obama's words from The Audacity of Hope, the Constitution "is not a static but rather a living document, and must be read in the context of an ever-changing world."
So far, the Senate has confirmed 41 of Obama's nominees, leaving 104 federal judgeships open. Presently, a battle over five of Obama's nominees known as the "fringe five" is being fought by Republicans on the Senate Judiciary Committee. Connie Hair writes that these "candidates ... have once been returned to the President as unacceptable. Each of these controversial nominees was passed out of committee but are so controversial that President Obama and Democrat leaders have avoided discussing them in public."
Certainly, the "fringe five" symbolize Mr. Obama's judicial philosophy, and yet any one of his high-ranking nominees, if scratched, would bleed a leftist worldview. Of all the president's radicals, let's focus on just one of the fringe nominees, Goodwin Liu, because his writings mirror exactly what Obama was getting to in his WBEZ-FM interview.
Goodwin Liu, a law professor at U.C. Berkeley's Boalt Hall, has no experience as a judge, but is nevertheless up for a seat on the Ninth Circuit Court of Appeals.
In his article titled, "Education, Equality, and National Citizenship," Liu argues, "the Fourteenth Amendment authorizes and obligates Congress to ensure a meaningful floor of educational opportunity throughout the nation." Liu argues that the guarantee of citizenship in the 14th does more than confer legal status, due process, and equal protection under law to the former slaves -- "it obligates the national government to secure the full membership, effective participation, and equal dignity of all citizens in the national community." That's code for the feds must provide health care, child care, job training, and other "rights."
The key words, of course, are "authorizes" and "obligates Congress." To Mr. Obama, Liu is nothing less than a constitutional genius for having found previously indiscernible meaning in the Constitution. Such a "break" from constitutional "constraints" would take the federal government to the next level, enabling it to pronounce positive rights and wield unlimited power over the states and the people.
In his co-authored book, Keeping Faith with the Constitution, Liu, in Obamian fashion, posits a new method of interpretation: constitutional fidelity. "Fidelity" has a nice ring to it, but unfortunately, "what we mean by fidelity," clarifies Liu, "is that the Constitution should be interpreted in ways that adapt its principles and its text to the challenges and conditions of our society in every succeeding generation."
In other words, Liu is a "living Constitution" theorist who, like Obama, uses conservative-sounding words to support his radical positions. A Constitution that is interpreted by a few robe-wearing elitists "in a way that adapts its principles" is effectively no Constitution at all.
After many decades of "living Constitution" interpretation, the people have already lost much of their Constitution to leftist judges. And now, the elitist establishment is positioning itself for its next break from the constraints.
The various schools of constitutional interpretation break down into one of two groups: the first tries to uphold the original context, meaning, intent, and purpose of the text, while the second group tries to break free from the original constraints placed on the federal government.
In order to find approval from the federal judiciary in extending the federal government's control over people's lives, e.g., in mandating individual health insurance, Mr. Obama anxiously needs judges from the second group.
Mr. Obama is a constitutional deconstructionist on steroids, and the damage he will wreak in four years of judicial appointments should not be underestimated.
Monte Kuligowski is an attorney whose work has been published by several law journals.
3a)A Supreme fetish: Libs leaving too much to court
By Jonah Goldberg
Imagine the Supreme Court was wiped out in an asteroid strike, or maybe ate some
really bad clams. Whatever. With the court temporarily out of the picture, could Congress and the White House ignore the Constitution, locking up Tea Partiers or ACLU members?
Apparently.
"I have been fascinated by [Delaware Senate candidate] Christine O'Donnell's constitutional worldview," Slate magazine's Dahlia Lithwick confessed. O'Donnell had said, "When I go to Washington, DC, the litmus test by which I cast my vote for every piece of legislation that comes across my desk will be whether or not it is constitutional."
O'Donnell: Makes not-so-wacky promise to vote only for constitutional laws.
To which Lithwick, a widely cited expert on the Supreme Court, responded, "How weird is that, I thought. Isn't it a court's job to determine whether or not something is, in fact, constitutional? And isn't that sort of provided for in, well, the Constitution?"
Newsweek's Ben Adler was aghast at the clause in the GOP's Pledge to America that Republicans will provide a "citation of constitutional authority" for every proposed law. "We have a mechanism for assessing the constitutionality of legislation, which is the independent judiciary," Adler wrote. "An extraconstitutional attempt to limit the powers of Congress is dangerous even as a mere suggestion, and it constitutes an encroachment on the judiciary."
And a progressive blogger writes in U.S. News & World Report that such talk of requiring constitutionality is "just plain wacky."
Does anyone, anywhere, think legislators should vote for legislation they think is unconstitutional? Should presidents sign such legislation into law?
According to this creepy logic, there's no reason for congressmen to even consider the supreme law of the land. Re-impose slavery? Sure! Let's see if we can catch the Supreme Court asleep at the switch. Nationalize the TV stations? It ain't unconstitutional until the Supreme Court says so!
Of course, reasonable people understand how absurd all of this is.
Nothing in the Constitution says the Supreme Court is the final or sole arbiter of what is constitutional. Nor does anything in Marbury v. Madison, the Supreme Court case that famously established judicial review. Nor in Cooper v. Aaron, the 1958 case in which the court ruled that its findings are the law of the land.
George Washington vetoed an apportionment bill in 1792 because it was unconstitutional. What was he thinking? If only he had a Ben Adler around to tell him what a fool he was.
Andrew Jackson vetoed the reauthorization of the national bank in 1832 because he believed it was unconstitutional. He added then that, "It is as much the duty of the House of Representatives, of the Senate, and of the president to decide upon the constitutionality of any bill or resolution which may be presented to them for passage or approval as it is of the supreme judges when it may be brought before them for judicial decision."
"Even the Supreme Court has never claimed that it is the only branch with the power or duty to interpret the Constitution," says Jeff Sikkenga, a constitutional historian at Ashland University's Ashbrook Center. "In fact, it has said that certain constitutional questions like war and peace are left to the political branches to decide."
The debate over whether the courts are the final word on the Constitution is more than 200 years old. The debate over whether they're the sole arbiter of constitutionality is extremely recent and extremely silly.
Too many politicians -- in both parties -- have abdicated their most solemn duty: to support and defend the US Constitution. George W. Bush signed campaign finance reform even though he thought much of it was unconstitutional. Nancy Pelosi thinks the Constitution has as much relevance as a pet rock. Asked if the health-care bill was constitutional, her eyes grew perceptibly wider as she incredulously asked, "Are you serious?"
The real issue is quite simple. If more politicians were faithful to the Constitution, the government would be restrained. And restraining government is "weird," "wacky" and "dangerous" to so many liberals today.
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4)Iran is bent on avenging cyber attack, raising military tensions
Iran is bent on military action to settle scores with Israel and the United States whom it suspects of planting the malignant Stuxnet cyber worm in the computer systems of its nuclear, military and strategic infrastructure, military and US sources report.
The timeline of this attack revolves around the state visit to Lebanon, President Mahmoud Ahmadinejad has scheduled for Oct. 13-14, during which he will tour the Israeli border. Preying heavily on Iran too are the personal sanctions the United States has just imposed on its top military brass and ministers.
All this will no doubt come up in Syrian President Bashar Assad's talks with Iranian leaders during his visit to Tehran Saturday, Oct. 2.
When Assad and Ahmadinejad last met in Damascus on Sept. 18, three days after the malworm surfaced, the Iranian president warned his country would retaliate for the cyber attack by military means. Its allies, Syria, Hizballah and Hamas were advised to prepare for Israel taking the opportunity to attack them.
A few days later, Syrian sources leaked word that during that first encounter, Assad had urged Ahmadinejad to postpone his trip to Lebanon. They did not explain why.
However, Friday, Oct. 1, Syrian and Lebanese sources disclosed Israel's northern border units had been placed on an elevated level of preparedness. The IDF spokesman did not deny the report, only pointing out that Israeli units on the borders with Lebanon and Syria had been on a high alert for some time and were keeping close watch on developments.
Aware of the incendiary tensions building up in its vicinity, Damascus is clearly taking pains to maintain a safe distance from any impending military conflagrations involving Iran, the United States and Israel.
Washington got involved Wednesday, Sept. 29, when President Barack Obama signed an executive order imposing sanctions on eight top Iranian officials, accusing them of serious human rights abuses, including the killing, torture, beating and rape of Iranian citizens since the country's disputed 2009 presidential election.
This was the first time Washingtonhad singled out top-flight Iranian military and security personages for personal penalties and imposed them without reference to Iran's nuclear program.
Mohammad Ali Jafari, commander of the Islamic Revolutionary Guards Corps, was additionally branded a criminal who should stand trial for murder. Also covered by this charges were Heydar Moslehi, Minister of Intelligence, Mostafa Mohammad Najjar, Interior Minister in charge of Iranian security and intelligence services, and Gen. Hossein Taeb, Deputy IRGC commander and head of the corps intelligence.
Obama signed the sanctions order this week, whereas the eight officials' crimes occurred more than a year ago in the wake of their crackdown on political opponents who charged the regime with falsifying the election. It would seem the US president acted with the intention of further dividing Iran's leaders and adding to the perplexity and demoralization besetting them over their powerlessness to bring the destructive cyber worm under control.
The severity of the personal charges Washington brought against these Iranian powerhouses and their timing were certainly not lost on interested parties in the region. Iranian sources do not believe the Islamic regime can afford to let Washington's blunt assault on it’s mainstays of power go unchallenged.
The New York Times, followed by several other Western media and computer security specialists, this week reported a clue they believed they had found pointing to Israel as the source of the cyber attack on Iran: The word "myrtus" -Latin for the myrtle tree was found embedded in the Stuxnet code. They pointed out that the Hebrew for myrtle, Hadas, resembles Hadassah, the birth name of the Jewish Queen Esther of ancient Persia who is depicted in the Book of Esther as persuading the king to pre-empt an attack on the Jewish population.
An alternative interpretation would be: Branches of Hadas or myrtle are one of the Four Species featuring in Jewish ritual for Succoth, the Feast of Tabernacles, which occurred this year on Sept 22-29.
4a)Iran spy chief: We are able to fight off Stuxnet computer worm
Heidar Moshlehi quoted by Iranian state TV as saying authorities have arrested several nuclear spies.
Iran's intelligence minister said the country has learned how to fight off a complex computer worm that some foreign experts have speculated was designed to target Tehran's nuclear program, state television reported Saturday.
Heidar Moslehi was also quoted as saying authorities have arrested several nuclear spies, but he gave no details and it wasn't clear if the developments were related.
Over recent months, the malicious Stuxnet computer code has also affected industrial systems in India, Indonesia and the U.S. But it has spread the most in Iran, including to several personal computers of workers at Iran's first nuclear power plant, which is to go online later this year.
The destructive Stuxnet worm has surprised experts because it is the first one specifically created to take over industrial control systems, like those at power plants, rather than just steal or manipulate data.
Moslehi did not reveal where or when the suspected spies were arrested, saying only that Iran has "always faced sabotage" by foreign intelligence services.
Iran periodically announces the arrest of nuclear spies without giving details.
The state TV report did not carry any remarks from Moslehi linking the arrests with the investigation into the computer worm.
"Iran's intelligence department has found a solution for confronting (the worm) and it will be applied," he was quoted as saying. "Our domination of virtual networks has thwarted the activities of enemies in this regard."
A week ago, Iran said the stuxnet code was found on several laptops belonging to staff at the Bushehr nuclear power plant but that the plant's main systems were not affected.
The plant has stood outside the current controversy over Iran's nuclear program since Russia will be providing the fuel for the plant and supervising its disposal.
But other aspects of Iran's nuclear work, especially its enrichment of uranium, are of concern to the United States and other world powers. Enrichment can be used to produce weapons as well as make fuel for power plants. Iran says it only has peaceful nuclear aims, such as generating electricity.
Who created the Stuxnet code and what its precise target is, if any, remains a mystery.
The web security firm Symantec Corp. says the computer worm was likely spawned by a government or a well-funded private group. It was apparently constructed by a small team of as many as five to 10 highly educated and well-funded hackers, Symantec says.
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5)PLO calls on Abbas to halt talks if freeze not extended
PA president meets with dozens of senior Palestinians, briefs them about latest round of talks with Mitchell; Abbas reiterates stance: "No talks under shadow of settlement construction," top aide says.
The PLO excecutive committee decided on Saturday to persuade Palestinian Authority President Mahmood Abbas not to continue with direct negotiations because of Israel's refusal to continue the building freeze.
Nabil abu Radina, a Palestinian presidential spokesperson, said that the talks will not continue as long as Israel continues to build on land that is expected to one day become a Palestinian state.
The comments came after Abbas met with dozens of senior Palestinians in Ramallah and sought their backing for his refusal to keep negotiating with Israel without a slowdown in West Bank settlement construction.
Abbas briefed the group about US envoy George Mitchell's latest unsuccessful attempts to narrow the gaps.
"President Abbas' position is clear: no negotiations under the shadow of settlement construction," a top Abbas aide, Nabil Abu Rdeneh, said before the meeting. However, he said contacts with the US would continue.
Mitchell, who spent four days this week shuttling between Abbas and Netanyahu, is now trying to enlist the help of Arab leaders, and was to meet with Qatari leaders on Saturday.
In remarks published Friday, Egyptian Foreign Minister Ahmed Aboul Gheit issued surprising criticism of the Palestinian position of making talks contingent on the settlement building restrictions, saying the sides should concentrate on drawing the borders of a Palestinian state.
In the West Bank, PLO and Fatah officials have overwhelmingly spoken out against continued negotiations.
Hanan Ashrawi, a member of the PLO Executive Committee, said the international community's failure to get Israel to halt settlement expansion does not bode well for the talks, where much more explosive issues will be on the table, such as the partition of Jerusalem. Ashrawi said there's a limit to Palestinian flexibility.
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6)Obama’s Failure of Leadership
By Eleanor Clift
The president’s experience as a community organizer may have hampered his abilities to lead and order and direct. His recent fighting stance might be coming too late.
I continue to believe that the passage of universal health care is an historic achievement, and that Glenn Beck’s grandchildren will agree even if he and his followers are blind to it. But getting it through a Congress wary of major social legislation and beholden to special interests was a 14-month horror show that consumed the Obama presidency.
With the proviso that no good deed goes unpunished, Democrats are bracing for significant losses in the midterms, provoked by a backlash over government spending, and by disappointment in President Obama’s performance. After hanging back too long, Obama has finally gotten off the mat and joined the fight, setting aside his bromides to bipartisanship and punching away like a politician who wants to win, not make nice.
The campaign trail is good practice because he’ll have to become more confrontational once the election is over. Tea Party Republicans have no inclination to work with Democrats, and they’re likely to displace the few reasonable Republicans that are left. It’s hard to see where the grand bargain can be made or the deals struck to begin to address deficit spending. With nothing but stalemate and gridlock ahead, things may have to get worse, and then who will we blame?
Obama took office not wanting to fight or blame anyone, and the Republicans played him. They stood up to him and he wasn’t prepared to defy them, revealing a vulnerability that has brought the Democrats to the brink of disaster. Obama ran on the idea that his election was a sign that everybody was going to get along but he also ran on a platform, and he won with 53 percent of the vote, the biggest margin of any Democrat since LBJ. Instead of claiming his rightful mandate, he made getting along his top priority, extending an olive branch to the other side, which Republican leaders rebuffed.
When it became evident during Obama’s first 100 days that the GOP wanted him to fail and would work hard to make that dream come true, he should have stopped chasing after the false gods of bipartisanship. The GOP is destined to win a bunch of seats despite their ongoing low approval ratings, and the unpopularity of their record, and many of their proposals. They are winning because conservatives hate Democrats more than Republicans and liberals are disheartened, and Republicans have done a better job exploiting the anger than Obama has tamping it down.
Obama’s background as a community organizer may be hampering him as president. While his supporters still like him, they’re not so sure he has what it takes to bring about the hope and change he promised and excited the base. A community organizer empowers people to do things for themselves, and in government, you have to lead and order and direct, and that’s not Obama’s style, even though Republicans call him autocratic and Rush Limbaugh calls him “Ayatollah Obama.” Obama has had a lot of success in politics and academia, and on the mean streets of Chicago, by reaching consensus, and he expected to apply that life lesson now that he’s at the pinnacle of power, and it didn’t work.
I’m loath to admit it, but I think there’s been a failure of leadership in this White House. Why else would a party on the verge of extinction less than two years ago be poised to take over one or perhaps both chambers of Congress? Hillary Clinton would have been tougher than Obama as president, but Republicans would have found her vulnerability and exploited it. I don’t think Obama’s supporters have buyer’s remorse, but they’re struggling to understand where Obama lost the magic and became the piñata for all the country’s ills. Republicans and the business community have been so successful in blaming Obama that if the next two years are like the last two years, he won’t get reelected.
After the ’08 election, polls found that a majority of Republicans thought they had lost ground because their party wasn’t conservative enough. Most analysts thought that way off base, and that the GOP needed to spend some time in the political wilderness to come to their senses, and move back to the middle. Instead they’ve tacked so far to the right that Ronald Reagan looks like a moderate and Newt Gingrich, the original bomb thrower, is considered mainstream enough to be taken seriously as a likely presidential candidate.
The ascendancy of the right has put Democrats on the defensive. A Hoover Institution study shows that House Democrats who voted for two out of three of Obama’s signature proposals (health care, the stimulus, and cap-and-trade energy policy) are likely to lose, a formula that would give the Republicans 43 seats, enough to take control of the chamber. There’s so little out there from Democrats on the merits of those proposals, and other core issues that separate them from Republicans, Democrats almost deserve to lose.
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6a)As Fla. tea party's Rubio surges, Crist and Meek turn firepower on each other
By Philip Rucker
TAMPA - The high-profile Florida Senate race started out as the first major skirmish between a tea party candidate and the Republican establishment, but with a month until Election Day it has evolved into a battle that is tearing apart Democrats.
At issue in this famously chaotic political state is whether Gov. Charlie Crist, who fled the GOP and is running as an independent, or Rep. Kendrick Meek, who prevailed in a bruising Democratic primary, is the more viable candidate against tea party favorite Marco Rubio.
At the moment, the answer, it increasingly seems, might be neither.
Rubio is surging in recent polls, while Crist and Meek's fight for the Sunshine State's Democrats has escalated and gotten more personal by the day. Last week, Crist staged two large rallies in vote-rich South Florida to accept the endorsement of Robert Wexler, a popular former Democratic congressman, who all but ordered the state's many Jewish voters to back Crist.
Meek, who hopes to become the first African American elected statewide in Florida, countered with a tough new ad that shows clips of Crist defending his conservatism. Meek is also drawing prominent surrogates, including President Obama and former president Bill Clinton, both of whom he said would hold rallies in the campaign's closing weeks. And on Thursday, Meek brought former vice president Al Gore to a boisterous labor union hall here to urge Democrats not to "throw your vote away" on Crist.
"It's an old charge in politics that somebody flip-flops," Gore said, making a rare appearance on the campaign trail. "It's a little unusual to have somebody flip-flop and then flap-flip. Seriously. You know what I'm talking about. As I say, I like the guy, but I do not really know where he stands on lots of these really important issues. . . . We want somebody who's going to stand up for what he believes and stick to it and fight for it and do the right thing."
Vying for diverse voters
Some national Democrats remain unconvinced that Meek can win, but all have lined up behind him. Privately, party strategists say an added benefit might be that his candidacy could drive up turnout among black voters. Blacks make up roughly 10 percent of Florida's electorate, making them a critical voting bloc for Democratic gubernatorial candidate Alex Sink.
"She is going to get a spillover, Obama effect from Meek, this young African American candidate," said Sharon Wright Austin, a political scientist at the University of Florida.
The Miami congressman has been campaigning with vigor, but Meek's energy has not translated into support in the polls. And with a relatively underfunded campaign, it is unclear how Meek might afford the television advertising barrage necessary to break through in a diverse, costly state of more than 18 million people.
"I'm a fighter, ladies and gentlemen, and you know something? I don't give up. And I don't give in," Meek said at the labor rally, eliciting loud cheers.
Seizing an opening.
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