Lieberman on Obama's forced settlement plan and Israeli strategy for trying to avoid same. (See `1a below.)
In his previous U.N. speech Obama stated the United States will stand against Israel's delegitimization. But an equally legitimate question is whether Obama can be trusted? (See 1b below.)
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Market and deficit thoughts of some gurus. (See 2, 2a and 2b below.)
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From a friend and fellow memo reader who has suggested a proposal for putting a brake on Congress persons and turning them back into American citizens.
Great idea but Congress would have to vote on it and I have never seen a politician vote himself out of office. (See 3 below.)
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Birds of a feather? (See 4 below.)
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Obama and his musical chair game. Has our Music Man president left a chair at the table for those who work hard, keep the ship afloat, pay their disproportionate taxes, raise a family, abide by our laws and serve their nation in a variety of ways? (See 5 below.)
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Will Lebanon be able to remain independent or will it come under total domination of Syria and Iran?
Obama continues to dangle carrots while Iran gobbles up territory and power. (See 6 below.)
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the 'Obamascare' legal battle persists and no you probably cannot keep your current health care plan notwithstanding Obama's contrary promise. Stay Tuned. (See 7 and
7a below.)
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'Thar she blows' - not a whale but California! (See 8 below.)
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Mort Zuckerman keeps pounding away. This time our dying jobs machine. (See 9 below.)
---Dick
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1)American Gain Over Settlement Freeze Fiasco
By Yisrael Ne'eman
One would think the settlement freeze was the major issue in negotiations between Israel and the Palestinians from what is reported in the press. To set the record straight – Palestinian Pres. Mahmoud Abbas wasted nine months before coming to the negotiating table while Israeli PM Netanyahu's supposedly "extremist" right wing government imposed a ten month building moratorium. Other governments negotiated as construction continued, settlements being removed as part of the arrangement for withdrawal. This occurred in Sinai from 1979 – 1982 as part of the peace accords with Egypt and in Gaza in 2005 during the Disengagement as agreed upon with the Bush Administration.
The Americans know this quite well, yet they are the ones who insisted on the building freeze, thereby encouraging the Palestinians to keep up the demand. Even the Arab League appears to be lining up with the Palestinians, a development not seen as likely just a few days ago. Now the Obama Administration is insisting on additional two month moratorium. It is harder to imagine greater diplomatic incompetence if the Americans truly desire to be the broker and not the breaker of the peace talks. Is Washington really that stupid? Many believe Obama to be just that naïve and foolish.
Israelis should look in the mirror first before casting the Americans in the role of the (global) village idiot. The amount of political/diplomatic mileage to be gained with the Arab/Muslim world over the building moratorium in the West Bank (Judea and Samaria) is enormous. And best yet it costs the US nothing, everything is at Israel's expense in world diplomatic forums. Peace making becomes that much more difficult each time the issue of Israeli construction across the 1949-67 armistice lines is raised as the right/religious bloc is automatically activated to halt any attempt at a two-state solution. Diplomatically and in the world media, bashing Israel over settlements helps to offset US involvement in Pakistan, Afghanistan and (still in) Iraq.
To counter Israeli political concerns over extending the moratorium another two months a package deal involving military equipment, US diplomatic support and a promise of an Israeli presence along the Jordan River as part of a permanent status agreement was said to be offered by the diplomat Dennis Ross who previously negotiated between the two sides in the 1990s and into Camp David 2000. Whether this offer is serious or not at the present is not clear, however it is hard to imagine any Israeli government accepting a permanent status arrangement without active American support for Israel expressed through close military/political cooperation and an Israeli force in the Jordan Rift Valley. However Netanyahu was expected to jump at this proposition and extend the building freeze, if only for two months. Logically he should have done it but politically he cannot.
Netanyahu is being billed as the great "rejectionist" of all attempts to make peace despite the fact that everyone knows he cannot re-implement the building freeze once again in the coalition he leads at present. The non-issue moratorium lasted for close to a year yet nothing was done in the first 90% of time allotted. The real issue facing Israel is whether the country remains Jewish and democratic after arriving at conflict resolution with its Arab neighbors. Whether Netanyahu and the present government are up to the task remains unknown, but more about this in a subsequent article.
In the meantime the US is solidifying moderate secular leaning Arab/Muslim interests at Israel's expense, knowing full well the present government will play the role of the "bad guy" whom all can heap blame upon. If the US truly wanted to broker peace at present the administration would insist on dealing with the core issues, beginning with borders and thereby outmaneuvering the settlement movement, leaving many inside a future Palestinian state. By the US insisting on a settlement freeze as a prerequisite peace between Israelis and Palestinians becomes secondary to other interests.
1a)Obama trying to force agreement on Israel
By Roni Sofer and Attila Somfalvi
Lieberman: Israel must not be tempted to adopt US President Barack Obama's
suggestion to declare a two-month settlement construction moratorium, as it
may lead to a forced (peace) agreement with the Palestinians and a return to
the 1967 borders, Foreign Minister Avigdor Lieberman said Sunday.
During closed-door discussions with fellow members of his Yisrael Beiteinu
party, Lieberman said, "The pressure won’t work. We are not leaving the
coalition in order to bolster the majority in government, which is against
continuing the settlement construction moratorium."
According to the foreign minister, five, maybe even six Likud ministers -
Moshe Yaalon, Yossi Peled, Silvan Shalom, Yuli Edelstein and possibly Gilad
Erdan - would vote against Obama's proposal.
"During my recent visit to the US I learned that Washington is planning to
force a permanent agreement on Israel – two states for two peoples along the
1967 borders, plus-minus 3 or 4% of the territory exchanged," Lieberman
said. "This is the objective of a continued freeze – to give the US and the
international community two months to come up with a solution that will be
forced on Israel."
According to the FM, in two months' time "The US, along with the Quartet,
the Arab League and the Palestinians will tell Israel, 'This is the
solution, take it or leave it. If you don't, there is a price – a
confrontation with the international community'. Therefore, we must not quit
the coalition. It's the only way to solidify a majority against the freeze,
which is a decoy."
Lieberman told the Yisrael Beiteinu members that President Shimon Peres
promised Prime Minister Benjamin Netanyahu he would get Shas spiritual
leader Rabbi Ovadia Yosef's approval for a two-month moratorium, but added
that Shas was being pressured by its supporters in the West Bank, mainly in
Beitar and Emanuel, "who are not willing to hear of another freeze."
The FM said Defense Minister Ehud Barak's support for another moratorium
stems from his fear that "in two months his friends from Labor will force
him to leave the coalition and lose his portfolio."
Lieberman said Netanyahu's fellow Likud members are also angry with him for
"not responding to what Barak is doing."
The FM also spoke of his controversial speech before the UN General
Assembly. "Arthur J. Finkelstein told me not to deliver the speech, but I
decided otherwise. I decided that I had to speak from the heart, and tell
the world the truth as I see it."
1b)Obama: U.S. Will Fight Delegitimization of Israel
In a speech to the U.N. General Assembly on September 23, President Barack Obama said that any attempts to delegitimize Israel would be met by the “unshakeable opposition of the United States.” He also called on Arab states to prove their commitment to peace by beginning to normalize ties with Israel.
In front of a U.N. audience comprising many nations that do not recognize Israel, Obama emphasized that “Israel’s existence must not be a subject for debate.” And, he rejected the widespread notion that attacks against Israelis are somehow justifiable, saying, “The slaughter of innocent Israelis is not resistance—it’s injustice.”
Obama also reiterated U.S. opposition to Iran’s illicit nuclear program, emphasizing that the Islamic Republic “is the only party to the NPT (Nuclear non-Proliferation Treaty), that cannot demonstrate the peaceful intentions of its nuclear program.”
Below is an abridged version of the president’s remarks:
Earlier this year, 47 nations embraced a work plan to secure all vulnerable nuclear materials within four years. We have joined with Russia to sign the most comprehensive arms control treaty in decades. We have reduced the role of nuclear weapons in our security strategy. And here, at the United Nations, we came together to strengthen the Nuclear Non-Proliferation Treaty.
As part of our effort on non-proliferation, I offered the Islamic Republic of Iran an extended hand last year and underscored that it has both rights and responsibilities as a member of the international community. I also said—in this hall—that Iran must be held accountable if it failed to meet those responsibilities. And that is what we have done.
Iran is the only party to the NPT that cannot demonstrate the peaceful intentions of its nuclear program, and those actions have consequences. Through U.N. Security Council Resolution 1929, we made it clear that international law is not an empty promise.
Now let me be clear once more: The United States and the international community seek a resolution to our differences with Iran, and the door remains open to diplomacy should Iran choose to walk through it. But the Iranian government must demonstrate a clear and credible commitment and confirm to the world the peaceful intent of its nuclear program...
Last year, I pledged my best efforts to support the goal of two states, Israel and Palestine, living side by side in peace and security, as part of a comprehensive peace between Israel and all of its neighbors. We have travelled a winding road over the last 12 months, with few peaks and many valleys. But this month, I am pleased that we have pursued direct negotiations between Israelis and Palestinians in Washington, Sharm el Sheikh and Jerusalem.
Now, I recognize many are pessimistic about this process. The cynics say that Israelis and Palestinians are too distrustful of each other, and too divided internally, to forge lasting peace. Rejectionists on both sides will try to disrupt the process, with bitter words and with bombs and with gunfire. Some say that the gaps between the parties are too big; the potential for talks to break down is too great; and that after decades of failure, peace is simply not possible.
I hear those voices of skepticism. But I ask you to consider the alternative. If an agreement is not reached, Palestinians will never know the pride and dignity that comes with their own state. Israelis will never know the certainty and security that comes with sovereign and stable neighbors who are committed to coexistence. The hard realities of demography will take hold. More blood will be shed. This Holy Land will remain a symbol of our differences, instead of our common humanity.
I refuse to accept that future. And, we all have a choice to make. Each of us must choose the path of peace. Of course, that responsibility begins with the parties themselves, who must answer the call of history. Earlier this month at the White House, I was struck by the words of both the Israeli and Palestinian leaders. Prime Minister Netanyahu said, “I came here today to find a historic compromise that will enable both people to live in peace, security and dignity.” And, President Abbas said, “We will spare no effort, and we will work diligently and tirelessly to ensure these negotiations achieve their cause.”
These words must now be followed by action, and I believe that both leaders have the courage to do so. But the road that they have to travel is exceedingly difficult, which is why I call upon Israelis and Palestinians—and the world—to rally behind the goal that these leaders now share. We know that there will be tests along the way and that one test is fast approaching. Israel’s settlement moratorium has made a difference on the ground and improved the atmosphere for talks.
And, our position on this issue is well known. We believe that the moratorium should be extended. We also believe that talks should press on until completed. Now is the time for the parties to help each other overcome this obstacle. Now is the time to build the trust—and provide the time—for substantial progress to be made. Now is the time for this opportunity to be seized so that it does not slip away.
Now, peace must be made by Israelis and Palestinians, but each of us has a responsibility to do our part as well. Those of us who are friends of Israel must understand that true security for the Jewish state requires an independent Palestine—one that allows the Palestinian people to live with dignity and opportunity. And those of us who are friends of the Palestinians must understand that the rights of the Palestinian people will be won only through peaceful means—including genuine reconciliation with a secure Israel.
I know many in this hall count themselves as friends of the Palestinians. But these pledges of friendship must now be supported by deeds. Those who have signed on to the Arab Peace Initiative should seize this opportunity to make it real by taking tangible steps towards the normalization that it promises Israel.
And those who speak on behalf of Palestinian self-government should help the Palestinian Authority politically and financially and, in doing so, help the Palestinians build the institutions of their state.
Those who long to see an independent Palestine must also stop trying to tear down Israel. After thousands of years, Jews and Arabs are not strangers in a strange land. After 60 years in the community of nations, Israel’s existence must not be a subject for debate.
Israel is a sovereign state and the historic homeland of the Jewish people. It should be clear to all that efforts to chip away at Israel’s legitimacy will only be met by the unshakeable opposition of the United States. And, efforts to threaten or kill Israelis will do nothing to help the Palestinian people. The slaughter of innocent Israelis is not resistance—it’s injustice. And make no mistake: The courage of a man like President Abbas, who stands up for his people in front of the world under very difficult circumstances, is far greater than those who fire rockets at innocent women and children.
The conflict between Israelis and Arabs is as old as this institution. And, we can come back here next year, as we have for the last 60 years, and make long speeches about it. We can read familiar lists of grievances. We can table the same resolutions. We can further empower the forces of rejectionism and hate. And, we can waste more time by carrying forward an argument that will not help a single Israeli or Palestinian child achieve a better life. We can do that.
Or, we can say that this time will be different—that this time we will not let terror, or turbulence, or posturing or petty politics stand in the way. This time, we will think not of ourselves, but of the young girl in Gaza who wants to have no ceiling on her dreams, or the young boy in Sderot who wants to sleep without the nightmare of rocket fire.
This time, we should draw upon the teachings of tolerance that lie at the heart of three great religions that see Jerusalem’s soil as sacred. This time, we should reach for what’s best within ourselves. If we do, when we come back here next year, we can have an agreement that will lead to a new member of the United Nations—an independent, sovereign state of Palestine, living in peace with Israel.
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2)Roubini, Shiller, Others Agree With Buffett: Recession Isn't Over
Monday, 04 Oct 2010 07:08 AM Article Font Size
By: Dan Weil
The National Bureau of Economic Research, the official arbiter of recession dates, marked June 2009 as the end of the Great Recession.
With economic growth sliding to 1.6 percent in the second quarter and the jobless rate remaining at 9.6 percent, many say the recession continues.
Warren Buffett
Perhaps the most respected of those who say the recession hasn’t ended is Warren Buffett. "On any common sense definition, the average American is below where he was before in terms of real income, GDP,” the investment legend told CNBC.
“We're still in a recession. And we're not going to be out of it for a while, but we will get out of it. We've used up a lot of bullets. And we talk about stimulus. But the truth is we're running a federal deficit that's 9 percent of GDP. That is as stimulative as all get out.”
Nouriel Roubini
Star economist Nouriel Roubini also says we haven’t exited hard times. "The big risk is that there will be a downturn in markets that could impact the bond, the equity and the credit markets,” he told CNBC.
“There is no private sector job growth. Consumption is weak, exports are weak and housing is weak. If there is no final sales and no final demand, companies will not invest. We have to expect the new normal. We do not need a double dip for it to feel like recession."
Robert Shiller
Yale economist Robert Shiller is another bear. He sees a sizable chance of a double-dip recession, as the economy struggles to emerge from the credit crisis and the housing industry continues to sag.
We may have seven years of “bad times” ahead of us, he wrote in a commentary for the Project Syndicate web site.
“If you allow a financial market to spin wildly until it breaks down, it really does seem that you run the risk of years of economic malaise. That is the historical pattern.”
Jobs are the big issue, Shiller tells CNBC. “We haven’t been focused enough on the unemployment rate.”
David Rosenberg
Some experts say “Great Recession” is the wrong term in the first place. They argue that we’re now in a depression. Gluskin Sheff chief economist David Rosenberg is one of them.
“(We’re in) a depression, and not just some garden-variety recession," he wrote in a commentary obtained by CNBC.
The stock market’s recent rally may argue against a downturn. But Rosenberg sees it differently.
"Such is human nature, and nobody can be blamed for trying to be optimistic. However, in the money management business, we have a fiduciary responsibility to be as realistic as possible about the outlook for the economy and the market at all times," he wrote.
Robert Prechter
Market guru Robert Prechter, president of Elliott Wave, agrees with Rosenberg. “Economists have something very wrong,” he told CNBC.
“They are talking about a Great Recession and that it’s over. I think they’re wrong on both counts. What we have is a partial recovery in an ongoing depression.”
2a)Hussman: Current Market Is a Ponzi Scheme
By: Julie Crawshaw
Economist John Hussman says the current market is a Ponzi scheme.
"To some extent, I view current market conditions as something of a 'Ponzi game' in that valuations appear neither sustainable nor likely to produce acceptably high long-term returns, and speculators increasingly rely on finding a greater fool," Hussman writes in a weekly note to investors.
“Undoubtedly, we have periodically missed returns due to our aversion to risks that rely on the ability to find a ‘greater fool’ in order to get out safely,” Hussman notes, but it is important to recognize that speculative risks aren't a source of durable long-term returns.
"As the mathematician John Allen Paulos has observed, "people generally worry only about what happens one or two steps ahead and anticipate being able to get out before a collapse... In countless situations people prepare exclusively for near-term outcomes and don't look very far ahead.
They myopically discount the future at an absurdly steep rate."
Meanwhile, Hussman says, “the U.S. financial system appears to be a nicely painted dam, behind which a massive pool of delinquent debt is obscured.”
“A significant correction in valuations and resolution of the growing backlog of delinquent debt may finally restore strong ‘investment merit’ to the U.S. stock market, but only after a greater amount of pain and adjustment than most investors seem to anticipate.”
Large corporations continue to borrow huge sums of money, but most appear to be sitting on their cash instead of spending it, which may benefit shareholders in the long run.
“They are still holding on to more cash in the same way that Noah built the ark,” David Rosenberg, chief economist at Gluskin Sheff told The New York Times. “It is very telling.”
2b)Opinion: Who's Really to Blame for Monster Deficits?Updated: 6 hours 29 minutes ago
By John Merline
Who is to blame for the gigantic budget deficits and the pileup of debt over the next decade? It depends on whom you ask.
President Barack Obama and the Democrats place the blame squarely on Republicans. As Obama has repeatedly stressed, he inherited a fiscal meltdown, driven by "two tax cuts that weren't paid for, two wars that weren't paid for, that were hugely expensive" and a deep recession.
"When we came into office," he's noted, "the deficit was $1.3 trillion -- $1.3 trillion."
Republicans, in turn, put the blame entirely on Obama's spending policies.
So which is it? Are the monstrous projected deficits the legacy of George W. Bush's economic policy? Or Obama's unquenchable thirst for more federal spending?
The answer is both, but not to an equal degree. Here's how we know:
Every year, the Congressional Budget Office projects spending and revenues 10 years out into the future, assuming the president's budget plan is enacted.
So what happens when you line up the last budget Bush released -- for which the CBO made projections out to 2018 -- with the most recent Obama budget? The first thing you notice is that the CBO predicted Bush's budget would produce very small deficits between 2011 and 2018. In fact, the CBO projected a balanced budget in 2012 and again in 2018.
What changed?
Well, for one thing, Bush's budget came out before he or the CBO knew how long and deep the recession was going to be.
And you can see the effects of the recession in expected revenues. The CBO now expects revenues to be $2.2 trillion lower over the next eight years than it did under Bush's budget -- despite the fact that Obama's budget raises taxes on the rich. To the extent that Bush's economic policies caused that recession and its long-term revenue effects, he takes the blame for the falloff in federal tax receipts.
But what really stands out when you make this comparison is the fact that Obama's budget dramatically ratchets up long-term spending.
Source: Congressional Budget Office.
This chart shows the CBO's projected federal spending for 2011-18 under President Bush's fiscal year 2009 budget compared with President Obama's fiscal year 2011 budget.Sponsored LinksBetween 2011 and 2018, Obama would spend $4.9 trillion more than Bush had planned to. Keep in mind that all this extra spending is after the economic stimulus has been almost entirely exhausted.
In other words, if Obama had simply kept Bush's spending policies in place, federal deficits over the next eight years would be 60 percent lower. In 2018, we'd have a deficit of just $188 billion, instead of the projected $996 billion under Obama's budget.
So while Bush no doubt shares the blame for the dismal budget outlook, the majority of the blame belongs with Obama for putting the government on a far higher spending path.
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3)Congressional Reform Act of 2010
1. Term Limits.
12 years only, one of the possible options below..
A. Two Six-year Senate terms
B. Six Two-year House terms
C. One Six-year Senate term and three Two-Year House terms
2. No Tenure / No Pension.
A Congressman collects a salary while in office and receives no pay when they are out of office.
3. Congress (past, present & future) participates in Social Security.
All funds in the Congressional retirement fund move to the Social Security system immediately. All future funds flow into the Social Security system, and Congress participates with the American people.
4. Congress can purchase their own retirement plan, just as all Americans do.
5. Congress will no longer vote themselves a pay raise. Congressional pay will rise by the lower of CPI or 3%.
6. Congress loses their current health care system and participates in the same health care system as the American people.
7. Congress must equally abide by all laws they impose on the American people.
8. All contracts with past and present Congressmen are void effective 1/1/11.
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4)Progressives and Communists: Out of the Closet -- Together
By Paul Kengor
A close look at the Saturday "One Nation" rally in Washington reveals something quite telling. It was a major gathering of the "progressive" left, highly billed, vigorously promoted. And it happened to include -- in fact, it warmly accepted -- the endorsement of Communist Party USA.
Expectedly, a bunch of the rally's endorsers carried the word "progress" or "progressive" in their title, from People’s Organization for Progress to Progressive Democrats of America. More still unhesitatingly describe themselves as progressive, from racial eugenicist Margaret Sanger's Planned Parenthood to Norman Lear's heirs at People for the American Way, plus the usual suspects from the "social justice" Religious Left.
And then, too, there was CPUSA.
Why is this so remarkable? It's remarkable because historically, communist involvement at these rallies has been meticulously concealed, hidden from progressives, with the communists using the progressives as props -- as dupes. That the two sides here, on Saturday, happily accepted one another, proudly uniting, shows how far to the left progressives have moved, not to mention their unflagging confidence under the ascendancy of Obama-Pelosi-Reid.
My personal experience on this is very instructive. I've chronicled how communists, for a century now, cunningly manipulated progressives, surreptitiously drawing them into their rallies, protests, and petitions, not letting themselves (or their intentions) be known. I have fliers from marches sixty and seventy years ago, with many of the same endorsers that were there on Saturday, but with CPUSA's name smartly absent, even as CPUSA members canvassed the rally, if not spearheading it.
Back then, the communists' stunning successes suckering progressives shocked even Moscow. They fooled them right up to the front gates of the White House in the summer of 1940, where the hideous communist front the American Peace Mobilization duped even the New York Times into headlining it as a "clergy group." They pulled off an extraordinary stunt in Chicago in the summer of 1968, sabotaging the Democratic National Convention. Communists managed to enlist progressives into undermining their own Democratic presidents and parties and platforms.
As an indicator of the success and duration of this manipulation, consider this fact:
When Congress, in December 1961, published its seminal investigation of communist fronts, titled "Guide to Subversive Organizations and Publications," a product of research dating to the founding of the American Communist Party in Chicago in 1919, the most popular index listing started with the word "Progressive." It was progressive groups that were misled, used, abused, and infiltrated more than any other.
How long has this continued? All the way to the 2008 election.
Consider the group Progressives for Obama, formed during Obama's presidential bid. It was loaded with and even founded by some hardcore communists from the 1960s. Consider merely two of them: Tom Hayden, one of the group's four founders, and Mark Rudd, one of the 94 original signers. Hayden and Rudd had been leaders of Students for a Democratic Society (SDS), which subverted the policies and plans of Democratic presidents ranging from Vietnam to the 1968 convention. In 2008, both Hayden and Rudd suddenly reemerged as "Progressives for Obama."
Rudd’s take on how Obama won the 2008 election is shrewd -- and dead on. Understanding that moderates and independents made the difference, Rudd noted the crucial importance of Obama not openly conceding his far-left views. Rudd wrote,
Obama is a very strategic thinker. He knew precisely what it would take to get elected and didn’t blow it. But he also knew that what he said had to basically play to the center to not ... scare centrist and cross-over voters away. He made it. ... And I agree with this strategy. ... Any other strategy invites sure defeat. It would be stupid to do otherwise in this environment.
Basically, what Rudd said is that Obama hoodwinked "centrist" and "cross-over" voters. As Rudd rightly put it, Obama couldn't be candid about his true intentions in "this environment." That's an environment where Americans, in poll after poll, have described themselves as "conservative" over "liberal" by a margin of 2:1, by approximately 40% to 20%, for decades now. Incredibly, those numbers were unchanged even on November 4, 2008, when Obama easily won the election.
Thus, a candidate like Obama can succeed only by pushing his agenda guardedly. He ran as a centrist, not as National Journal's certified "most liberal senator in 2007." It worked. As Rudd put it, Obama "didn't blow it."
America’s exalted moderates and independents were duped by a nebulous, catch-all-be-all banner of "change." Now, the progressives are in power, ready to implement the kind of change they had in mind all along.
And now, with Obama having secured victory, the likes of Rudd and Hayden -- shocked that the electorate finally voted for their kind of guy -- have been less circumspect about their intentions. Rudd urges, "Here's my mantra: 'Let's put this country on our shoulders and get to work.'"
Rudd has rolled up his sleeves, as have his erstwhile comrades.
And that was precisely what spilled into the streets on Saturday, October 2 in the "One Nation" rally, fittingly centralized in Washington. This time, however, the collective was unafraid, buttressed by a confidence that coaxed the communists out of the closet and into the welcoming arms of "progressives."
Gee, you'd think that after the collapse of the USSR and the Berlin Wall, and after 100 million corpses, progressives would be fleeing communists like the plague.
The election of Obama-Pelosi-Reid in November 2008 -- by America's "independents" and "moderates" -- has dawned a new day for the American Left -- or, at least perhaps, until November 2010. We shall see.
Paul Kengor is professor of political science at Grove City College. His books include The Crusader: Ronald Reagan and the Fall of Communism and the newly released Dupes: How America’s Adversaries Have Manipulated Progressives for a Century.
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5)And the Band Played On
By Geoffrey P. Hunt
The Titanic's band leader Wallace Hartley paid little heed to the North Atlantic saltwater bubbling up through the floor in the first class lounge. It took an extreme case of denial or uncommon nerve to keep the beat while fellow passengers stood horrified, slowly realizing that someone shorted the lifeboat count before leaving Southampton.
Those few eyewitness accounts tell of an eerie, surreal detachment recounted here:
Many people later commented on how strange it seemed to be wearing a lifejacket, awaiting orders to get into the lifeboats, whilst the band continued to play as though nothing had happened ... what went through their minds as they played together can only be guessed. As the slant of the decks increased more and more, did they even consider that this was their last hour alive, or did one or two of them hold out a slight hope that eventually one of the officers would amble over and instruct them into a lifeboat? Whatever their thoughts were, we will never know. All eight bandsmen were lost.
How surreal is President Obama's Titanic-esque band leader performance as we approach his midterm congressional elections? His erstwhile allies, in full denial mode, are now fleeing an association they found so dear and irresistible a year ago. The nation, awash in debt, sinking in an economic quagmire, groaning beneath unrelenting regulatory intrusions and taxes, outwitted by the nuclear ambitions of a terrorist state, and numbed by the hopelessly despondent jobless, sees a president imprisoned by his own caricature as a post-colonial malcontent dreamer babbling of windmills, demons, and slavery.
Many of us remarked months ago about Obama's "cool and detached" demeanor. Actually, being cool and detached was a virtue for band leader Hartley on the Titanic. It enabled him to do his job making music amidst rising dread.
That cool and detached nonchalance -- once a calculated cover for a lack of seriousness, incompetence and unbridled rage for our Commander-in-Chief -- has now been abandoned. Grasping for a trailing warp of any sort while lashing out incoherently in all directions, discrediting the office, and embarrassing his friends, the president blames everyone but himself for our sorry state of affairs. He believes we have forgotten that only two years ago he was convincing a majority of us that no matter the missteps or mismanagement of his predecessor, he was our secular redeemer. And how soon he has forgotten that it was he, not we, who anointed himself The One.
Obama's abject failure has provoked the most implausible of grassroots forces, the Tea Party, and like-minded neo-federalists and government minimalists. We now know with certainty that Obama is incapable of leading us through one of our nation's most perilous times, where, to borrow Lincoln's anxious pleading at Gettysburg in 1863, American democracy and its accompanying economic engine indeed may perish from the earth.
Most Americans, now counting among them many of Obama's most loyal supporters, fear the consequences of having only a band leader in the White House when what we need is a seasoned ship's captain.
Can anyone imagine the White Star Line ever having hired Hartley the band leader to be the captain of their most prominent vessel? The Titanic's captain, Commodore Smith, was a distinguished and most senior captain in White Star's fleet. Despite his untimely and catastrophic assignment on the Titanic, he had successfully piloted a half-dozen of the world's most heralded modern passenger liners on their maiden voyages, including Titanic's sister ship, Olympic.
Of course, with the many tragic missteps leading up to the fateful encounter with the Atlantic ice, it didn't matter much who was on the bridge that night. It might just as well have been Hartley the band leader. This seems to be the last refuge sought by Obama's defenders -- he's an innocent, captive to events not of his own making and out of his control.
But that's a feeble defense for a president who by his own hand selected no one in his inner circle who has run a government, an agency, a company or any other organization during a crisis. None have ever made a product, met a payroll or created a real job. Our leaders hold an ideology that would cripple the engine of prosperity, handing out redistributions that are unaffordable, unsustainable, will never be enough and are greeted with scorn and derision for being the tainted spoils of America's bounty, which Obama detests.
Band leader Hartley, self-composed and never overreaching, avoided interfering with those able to help Titanic's frightened and doomed passengers. But not Obama. Incapable of inspiring unity and giving life to his own exhortation of hope, he has instead attacked, intimidated, and interfered with anyone and everyone who would give aid, comfort, uplift, and repair to our battered nation adrift.
Hartley earned a legacy of valor because he had no pretensions of being anything more than a band leader. He did his job and did it memorably. Did Hartley know enough to direct passengers to the lifeboat stations? Could he run the winches to lower the lifeboats? No one knows. We do know he didn't try. He was a music man, and he worked his art until the very end.
The account of Hartley the band leader continues thus: "Almost two weeks after the disaster, his body was recovered from the icy Atlantic, still wearing his bandman's uniform, his music box strapped to his body."
Such a symbolic fate awaits our nation's 44th president, his first and only term defined by leading a band but never having the ability or temperament to lead a nation.
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6)Tehran, Damascus plot Hizballah grab of Beirut right after Ahmadinejad's visit
The presidents of Iran and Syria agreed in Tehran Saturday, Oct. 2, to support a Hizballah military takeover of Lebanon's power centers, including the capital Beirut, right after Mahmoud Ahmadinejad ends his controversial two-day visit to the country on October 13-14.
Ahmadinejad and Assad also decided to continue to harass Lebanese Prime Minister Saad Hariri by de-legitimization of his government, intimidation and humiliation to force him to dissolve the Special Tribunal for Lebanon-STL which has brought charges against Hizballlah officials for the murder of former Lebanese Prime Minister Rafiq Hariri in 2005.
If this campaign disables the Hariri government, so much they better, because then Hizballah will be able to walk in and set up a transitional administration together with it allies, the Druze leader Walid Jumblatt and the Christian ex-general Michel Aoun. This administration will rule the regions dominated by Hizballah gunmen and proclaim its legality as a viable alternative to the failed Hariri government.
As part of this Iranian-Syrian-Hizballah master plan, President Assad Sunday, Oct. 3 released a list - referred to the former Lebanese head of internal security Maj. Gen. Jamil Sayyed - of 33 international and Lebanese individuals against whom the Syrian prosecutor general had issued arrest warrants on charges of false testimony and perjury in the UN probe of the Hariri murder.
This defiance of an internationally recognized UN court is unprecedented and tantamount to a declaration of war on Lebanon.
Damascus sources said the list would be handed to Interpol for the execution of international warrants.
Lebanese police chief Maj. Gen. Ashraf Rifi said the next day that Interpol would not execute the 33 warrants, because they were politically motivated.
On that list are the first UN investigating prosecutor of the Hariri probe, Detlev Mehlis and his deputy, Gerhard Lehmann. Both turned up evidence of the complicity of high-ranking Syrian government and military officials' in the crime. Syria also wants the two Lebanese judges on the special tribunal arrested, together with most members of the Lebanese judiciary, the heads of Lebanese security and intelligence services, leaders of the anti-Assad opposition parties in Syria, especially the exiled former vice president Abdul Halim Khaddam, and a string of Lebanese and Kuwaiti public figures and journalists who are opponents of the Syrian and Iranian regimes.
This document was published in Damascus to scare Persian Gulf and Saudi rulers from coming to the aid of the Lebanese prime minister or interfering with its plans for bringing Hizballah to power in Beirut.
To ward off the threat Hariri travelled to Riyadh and asked Saudi rulers for help - firstly, to block off the Iranian-Syrian conspiracy against his government and secondly, for money to buy arms for Lebanese Sunni and Christian militias to defend their fiefdoms against takeover by the Hizballah.
Hariri is planning an emergency government session to discuss the crisis. At the same time, his energy minister Gebran Bassil, while visiting Tehran was told by Iranian Foreign Minister Manouchehr Mottaki: Stability and unity in Lebanon would foil the plots of enemies."
The Lebanese minister understood this to mean that his government would enjoy stability if it united behind the master plan designed for Lebanon by Ahmadinejad and Assad. It was therefore taken as a threat rather than reassurance.
Israel has good reason to be deeply apprehensive of the civil war and violent carving up of Lebanon most likely to result from the Iranian-Syrian plan with serious upsets on the Lebanese-Israeli border, especially if the belligerent Hizballah decides to go for Iran's "enemies" too - namely, Israel. So far there is no sign of Israel taking any steps to prevent this happening.
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7)Yes, Virginia, Congress Is Not Santa Claus and Is Bound by the Constitution
By Ilya Shapiro
The legal battle against Obamacare continues. In June, a district court in Richmond denied the government’s motion to dismiss Virginia’s lawsuit (in opposition to which Cato filed a brief). Despite catcalls from congressmen and commentators alike, it seems that there is, after all, a cogent argument that Obamacare is unconstitutional!
Having survived dismissal, both sides filed cross motions for summary judgment—meaning that no material facts are in dispute and each side believes it should win on the law. Supporting Virginia’s motion and opposing the government’s, Cato, joined by the Competitive Enterprise Institute and Georgetown law professor (and Cato senior fellow) Randy Barnett, expands in a new brief its argument that Congress has gone beyond its delegated powers in requiring that individuals purchase health insurance.
Even the cases that have previously upheld expansive federal power do not justify the ability to mandate that individuals buy a product from a private business. Those cases still involved people that were doing something—growing wheat, running a hotel, cultivating medical marijuana. The individual mandate, however, asserts authority over citizens that have done nothing; they’re merely declining to purchase health insurance. This regulation of inactivity cannot find a constitutional warrant in either the Commerce Clause, the Necessary and Proper Clause, or Congress’s taxing power. Such legislation is not “necessary” to regulating interstate commerce in that it violates the Supreme Court’s distinction between economic activity (which often falls under congressional power as currently interpreted) and non-economic activity (which, to date, never has), it is not “proper” in that it commandeers citizens into an undesired economic transaction.
Finally, the taxing power claim is a red herring: (a) neither the mandate nor the penalty for not complying with the mandate is a tax, and is not described as such anywhere in the legislation; (b) even if deemed a tax, it’s an unconstitutional one because it’s neither apportioned (if a direct tax) nor uniform (if an excise); (c) Congress cannot use the taxing power to enforce a regulation of commerce that is not authorized elsewhere in the Constitution.
The district court will hear arguments on the cross-motions for summary judgment in Virginia v. Sebelius later this month and we can expect a ruling by the end of the year.
Obamacare delenda est.
7a)You Can’t Keep the Plan You Have
Obamacare is coming to a doctor’s office near you.
By - Marc Siegel
Last year, I ordered a CT scan of the chest on a 63-year-old patient whose chest X-ray had revealed a lung nodule. I had no problem getting the test approved by his private insurance company. The radiologist suggested that I repeat the CT scan this year to make sure the nodule hasn’t turned into cancer.
But this year, the same insurance company is denying the test, having clamped down on several elective services while also raising its premiums. This company now has to cover children with pre-existing conditions and can place no lifetime limits on care. It is struggling to preserve its profits as Obamacare kicks in — profits that, to begin with, are only approximately 4 percent of its total revenue.
Next year, my patient will have Medicare. He can’t afford a secondary insurance plan (Medicare Part B covers only 80 percent of most charges), and he doesn’t qualify for Medicaid as his secondary, so he was hoping to join a Medicare Advantage plan — a private insurance plan that seniors can choose to receive, partly at government expense, instead of Medicare. But in 2011, Medicare Advantage is due to be cut $140 billion by the new law, and it is doubtful that the plan he wants will still be available. Harvard Pilgrim, the second-largest insurer in Massachusetts, has just dropped 22,000 patients from its Medicare Advantage plan in anticipation of these cuts. Soon seniors everywhere will have the same problem. In fact, the Medicare actuary estimates that 7 million out of the 11 million people with Medicare Advantage will be set adrift over the next seven years.
One of those patients will likely be my fellow with the lung nodule who needs a follow-up scan.
President Obama clearly hasn’t visited a real doctor’s office recently. If he sat on my office couch, he would immediately discover that real patients are terribly worried about how dysfunctional and expensive all health insurance, public and private, is becoming under the new law of the land. Of course, the problem of spiraling health-care costs and inadequate access to essential services was already happening before, but Obamacare is making it far worse.
My medical office is changing, and not for the better. As I write this, I have a patient waiting in the next room who has to pay cash to see me because his employer’s contribution to his plan has dropped this year, and his deductible has gone up. Many employers are getting ready to dump their employees on the state exchanges in 2014. They are adopting plans that won’t “grandfather in” under the draft regulations of the new law, which mandate low deductibles and low co-pays. I am treating my patient for high blood pressure, which may be due to his worrying over his medical bills. My bill is minor compared to the hundreds of dollars that the laboratory charges him for the routine blood tests his insurance no longer covers.
Next door to this man is a woman complaining about her premiums, which are up 20 percent from last year. She wants to add her 23-year-old son, who has diabetes, to the policy under the new law — but she can’t, because her son has a full-time job and is supposed to get it from his employer. But the employer isn’t offering it, and is prepared to ultimately pay the Obamacare penalty that is supposed to enforce the “mandate” that he provide insurance.
Under the “consumer protections” that just kicked in, private insurers are unable to charge co-pays for preventive services including mammograms, colonoscopies, and vaccines. This sounds good until you consider that when these services are “free,” demand for them will increase, and we doctors are ill equipped to handle such a demand surge. Further, it is unlikely that doctors will receive greater reimbursements to compensate for the lost co-pays — and so they will stop providing these services in droves. Your insurance may pay for your colonoscopy, but you may not be able to find a doctor to perform it.
And things are only going to get worse. Full-throttle Obamacare, which comes into effect in 2014, will promote insurance plans that require little payment from patients out-of-pocket — and thus are easy to overuse. This will remove the brakes from the system. In my doctor’s office of the near future, I expect the waiting room to be clogged with more and more patients even as the government and private insurers limit the tests and treatments I can offer.
Yesterday I saw a patient who just lost his job. He had no insurance, and I saw him for a very small fee. He expects to end up on Medicaid (it will be much easier to qualify under Obamacare), and since I don’t accept it — and more and more doctors are doing likewise — he will likely end up getting his care in the ER. But ERs are already overcrowded, and are not ready to handle more patients.
The president can keep telling Americans that their health care won’t change. But for my patients, it already has.
– Marc Siegel, M.D., is an associate professor of medicine at NYU and the medical director of Doctor Radio at NYU Langone Medical Center.
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8)California, There It Went
By Jennifer Rubin
More than 40 years later, I still remember the bright sun and the palm trees when we got off the plane. California in 1968 was a magical place, a magnet for those seeking new opportunities or to lose an old identity. The Golden State was allowing the rich to get richer and the middle class to live out the American dream in its pristine state. The public schools and expanding state-university system (two separate systems, in fact) were the envy of the nation. The corruption and Mob influence that had paralyzed many eastern and midwestern states and cities were largely absent.
When my parents announced they were uprooting the Glazer family from a cozy suburb of Philadelphia, as 5 million people did from eastern and midwestern towns between 1950 and 1980, the news was met with a mixture of awe (“California...” they would breathlessly whisper) and bewilderment (“But what is there?”). The very act of migrating by plane was itself somewhat grand. In the years before airline deregulation, one dressed up to fly, as if sailing on an ocean liner, and at prices not all that much lower than an ocean voyage’s. And yet those we were leaving behind acted as though we were traveling by caravan, leaving civilization and going into the wilderness.
In a real sense, even in 1968, California was the wilderness. If the cost of air travel was prohibitive for a family of modest means, they usually drove, and from the flatness of the Midwest they found themselves left speechless by the vision of the Rocky Mountains, rugged coastlines, wide beaches, and empty space they knew only from the movies. Like emigrants leaving the old country in the 19th century, they often arrived friendless and unaccustomed to the habits of their new environment. Public transportation was in scarce supply; instead there were gleaming freeways with five lanes on each side. Tie and jacket? More and more restaurants didn’t care. Informality pervaded dress and speech at a time when, back east, adults still commonly addressed acquaintances as Mister and Missus.
In Southern California, the aerospace industry was booming, and middle-class professionals from all over the country flocked to work in and around it. The movie studios had fallen into distress and decay due to the growing popularity of TV (before the blockbuster era of the 1970s drew audiences back out of their living rooms), but if you went to the Norton Simon Museum in Pasadena, you might spot the billionaire in a corduroy jacket whose name was above the door escorting Cary Grant around his collection. Every now and then you’d have a Fred Astaire or a James Stewart sighting.
In Northern California, Haight-Ashbury was still awash in the haze of the Summer of Love from the year before, the hippies and the gay community were moving in on the old Republican establishments of San Francisco and Berkeley, and San Jose was a sleepy town where a family of modest means could own a four-bedroom house near terrific schools for $27,000. Silicon Valley was farmland.
Forty-two years after I arrived in California, the very notion of an affordable, happy-go-lucky, optimistic, and “golden” state seems otherworldly. Its financial condition resembles Greece’s. Self-dealing and political scandals involving public-sector unions have become commonplace not only in Sacramento but also in cities from Mexico to Oregon. Thirteen percent of the state’s workforce is unemployed. Taxes (sometimes disguised as “fees” or “special assessments”) are among the highest in the country, school days are being cut, and state universities have cut off financial aid as they squeeze out in-state residents in favor ofhigher-paying out-of-staters.
After a decade of energy brown-outs that shut down air conditioners in the sweltering summer, spending cuts that have increased the decrepitude of roads and public facilities, and mushrooming retirement obligations to state workers that have crowded out basic public services, California is only now teetering on the crest of a fiscal sinkhole from which it will be impossible to emerge.
But when we and a horde of other young families arrived, Los Angeles was frantically expanding to fit us. As was the case during the boom after World War II that produced the Levittowns of the East Coast, builders were racing to meet the needs of newcomers. Suburbs grew and multiplied with construction sites where new tracts of a hundred or more homes were being thrown together, three or four models repeated for blocks whose newly poured concrete sidewalks gleamed in the sun.
“Hidden Glenn—Worth discovering!” and other similar signage adored the entrances of the tracts. You could walk into any house, ignore the furnishings, and know the layout as soon as you assessed which model you were in. Before remodeling and landscaping differentiated the homes, there was an institutional sameness. “Neighborhood” seemed a quaint term, as if from a novel about a time long past. Just for fun, we’d drive (no other way to get around, of course) to nearby tracts, walk through partially completed homes, and guess which room would be which (look for the telltale signs—plumbing, size, proximity to kitchen).
There was a thriving apartment-rental business for families waiting for their homes to be completed. The builder promised October? Savvy mothers like mine knew that meant January and kept the Chanukah menorah in the boxes marked “apartment.”
Part of the lure was the sheer newness of it all—new homes, new schools, new roads. The accumulated decay and grime of midwestern and eastern cities was nowhere to be seen. The claustrophobia of indoor schools and boxy malls was replaced by year-round temperate sunshine that allowed for outdoor strip shopping and schools with no indoor corridors. Parallel parking was an unnecessary skill—there were parking lots everywhere, free at malls and five or 10 dollars all day downtown. The Los Angeles Dodgers were rained out only once before 1976. “Snow days” disappeared from our vocabulary.
The residents were new as well. Most everyone was from somewhere else. Freed from the bonds of family and friends, you could remake your life anew. If you were raised a Catholic but wanted to be a Buddhist, no one cared. If your business flopped in Detroit and you wanted a clean break, no one would be the wiser.
It was not all paradise. The Manson murders and the Berkeley riots reminded the newcomers that California was not immune to the rest of the country’s maladies. But in the age before cable news and theInternet, young children in the sparkling suburbs of Los Angeles breezed through it all, feeling blessedly far from the fires and destruction convulsing eastern cities in the wake of Martin Luther King’s assassination.
Only in retrospect is it clear that there was a larger political and indeed cultural crisis in the making even then.
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In their new book, California Crack-up: How Reform Broke the Golden State and How We Can Fix It, Joe Matthews and Mark Paul detail a history of dysfunctional government and fiscal disarray that seems to have been written into the state’s DNA. Through the past century, layer upon layer of well-intentioned reforms have led to the promulgation and emendation of a gargantuan, unreadable state constitution now running into the tens of thousand of words. The result of these good-government repairs, as Matthews and Paul write, was that “it would become harder and harder for voters to know whom to hold responsible for problems.”
The reform era that began after the turn of the last century, a reaction to the railroad-baron-dominated government of the 19th century, contributed a heavy dose of direct democracy—a system of referenda, initiatives, and recalls that allowed the public to bypass the state legislature but also to accelerate the influence of special-interest groups that learned to draft and promote measures ranging from budget protection for teachers’ unions to bans on horse meat. The result was an unworkable governmental maze in which lobbyists and public-employee unions came to wield huge power.
Liberals finger the tax revolt of the 1970s and the successful passage of the Proposition 13 referendum in 1978 as the culprits for the state’s fiscal woes. They are correct in part, but for reasons they would prefer to ignore and the reform’s authors never imagined would result from it. In the 1970s, the influx of new residents and the frenzy for home-buying coincided with a nasty bout of inflation. Real-estate prices rose to astronomical levels. Middle-class families and the elderly faced crushing property-tax bills and the potential loss of their homes. California’s boom was imperiled. When the legislature proved unresponsive, the citizenry organized and launched the anti-tax crusade that is a direct precursor to the Tea Party movement of today.
As promised, Prop 13 drastically reduced property taxes and permitted residential homes to be re-assessed only at the time of sale, fixes that relieved homeowners of the heavy tax burden that had fueled the revolt. But Prop 13 had other effects as well. Local governments lost nearly a quarter of their revenue, and the state, which was then flush with cash, stepped in to take over school and social-welfare funding. This centralized spending in Sacramento and made the state capital an unparalleled target of opportunity for special-interest groups, which became expert in navigating the unwieldy bureaucracy and convoluted budgeting apparatus.
Over time, even well-intentioned legislators found their hands tied by the exigencies of fiscal law and the legislature’s political dynamics. Since the 1930s, a two-thirds majority of both state houses has been required to pass spending and budget bills. Prop 13 added a two-thirds vote requirement to pass tax hikes. While this reform was intended to compel fiscal discipline, it actually empowered small numbers of legislators to hold out for pork-barrel spending in their districts—effectively blackmailing the governor and more-responsible leaders, who felt compelled to pass timely budgets. An annual face-off would occur as the state edged closer to the budget deadline. California took to issuing IOUs while awaiting the passage of budgets. Crafty maneuverers, as Matthews and Paul explain, learned to reach budget compromises “through questionable borrowing and accounting gimmicks.” Thus, “in many ways, Prop 13 represented a liberal dream come true.”
California went on an unprecedented spending spree. Between 1990 and 2009, according to a 2009 Reason Foundation report, “state spending—including the General Fund, special funds, and bond funds—has increased 180.9 percent, or an average of 5.91 percent a year. . . . Since FY 1990-91, General Fund spending alone has increased 156.8 percent, or 5.37 percent a year.” The number of state employees soared by almost 40 percent. Per capita spending increased 95.9 percent in the same time period.
Despite the common argument that Proposition 13 had starved the state of revenue, cash flowed steadily into Sacramento’s coffers. “Since FY 1990-91,” the Reason Foundation report revealed, “revenues have increased 166.9 percent, or 5.61 percent a year. . . . Based on these revenues, if California had simply limited its spending increases to the 4.38 percent average increase in the state’s consumer price index and population growth each year since FY 1990-91, instead of a $42 billion deficit, the state would be sitting on a $15 billion surplus this year.”
The Wall Street Journal editorial page explained that in 1999, then-Governor Gray Davis, in cahoots with the California State Employees Association, passed “the largest issuance of non-voter-approved debt in the state’s history. The bill...granted billions of dollars in retroactive pension boosts to state employees, allowing retirements as young as age 50 with lifetime pensions of up to 90% of final year salaries.” The California Public Employees’ Retirement System (known as CalPERS) promised that no additional state contributions were needed and that the plans would be “fully funded.” It was the ultimate something-for-nothing scheme: “They also claimed that enhanced pensions would not cost taxpayers ‘a dime’ because investment bets would cover the expense.”
But CalPERS and Davis didn’t tell the voters that the state would have to pick up the tab if the ludicrous investment predictions (for example, that the Dow would hit 25,000 by 2009) failed to pan out. The shortfall turned out to be hundreds of billions of dollars. Nor did voters learn that “CalPERS’s own employees would benefit from the pension increases [or that]...members of CalPERs’s board had received contributions from the public employee unions who would benefit from the legislation.”
A sense of unreality still pervades. In August 2010, on the site of the Ambassador Hotel in Pasadena, a new high school named for Robert F. Kennedy (who was killed there on the night of the 1968 state primary) opened at a cost of $578 million, almost nine times that of an average new school in the state and the most ever spent on a high school. According to the Associated Press, it features “fine art murals and a marble memorial depicting the complex’s namesake, a manicured public park, a state-of-the-art swimming pool and preservation of pieces of the original hotel.” Meanwhile, “nearly 3,000 teachers have been laid off over the past two years [and] the academic year and programs have been slashed. The district also faces a $640 million shortfall and some schools persistently rank among the nation’s lowest performing.” A school-building advocate dryly observed, “Architects and builders love this stuff, but there’s a little bit of a lack of discipline here.”
That would aptly describe the state as a whole. This year, an official budget shortfall of $19 billion and record unemployment have Californians reeling. But even that understates the problem. The real extent of the state’s debt, including unfunded liabilities, now runs into the hundreds of billions. New scandals break daily—bloated pensions, lavish state salaries, and threatened draconian cuts in services. If you make more than $60,000 a year, a relatively modest wage considering the cost of living, your top marginal state income tax rate is now over 9 percent—and given the severity of the cuts in basic services, you have little to show for the money taken from you.
The notion that growth would be endless, that debt could be piled on future generations, and that government could provide an ever-growing array of services with no impact on the state’s ability to retain and attract wealth has reached its inevitable conclusion: full-fledged financial chaos. And while there are many responsible parties (Democratic-dominated legislatures, weak Republican governors, labor unions), at bottom Californians created their own morass. Much of the debt was piled on by popular referenda. Lawmakers were elected and re-elected. The people acted, and the people are now suffering the consequences.
Even so, some of those consequences were entirely unintended. Property-tax reform led to the centralization of power, which allowed interest groups to become politically pre-eminent. Term limits were supposed to end the reign of professional politicians, but the policy simply shuffled politicians from one post to another and strengthened the grip of outside interests and more-experienced bureaucrats.
Gerrymandered districts— and the population division of the state between liberal, urban areas and rural, conservative ones—have protected state legislators of both parties from any real competition. The latest reform, a jungle primary system (candidates of all parties appear on a ballot, with the top two vote-getters facing off in the general election) meant to make races more competitive and drive politicians toward the center of the political spectrum, will face constitutional challenge and, if history is any guide, produce results not remotely anticipated by its draftsmen.
California today bears little resemblance to the land of opportunity whose promise of a better life in a perfect climate once lured so many. Schools, even in expensive residential areas, are substandard and getting worse. Public parks are unseemly and unsightly. Libraries are understaffed and understocked. Commutes have extended from 30 to 60 to 90 minutes or longer.
Because the 21st-century economy is global and portable, residents and businesses have other options. Employers and educated people can uproot themselves, and they have been, fleeing the congestion, the traffic, the crumbling infrastructure, and the deficient schools. Between 1990 and 2000, 2 million more left the state than arrived from other states.
The U.S. Census Bureau report noted that a number of states have benefited from California’s woes: “199,000 of the 466,000 people who moved to Nevada during this time came from California.... Between 1995 and 2000, 644,000 people moved to Colorado from other states, led by 111,000 migrants from California.”
California’s unemployment rate at present hovers a few points above the national average, in part due to a state judiciary hostile to business and the proliferation of pro-plaintiff litigation rules that have made the state a toxic environment for employers. In recent years, Northrop Grumman, Fluor Corporation, Hilton Hotels, Computer Sciences Corporation, and defense contractor SAIC all moved their headquarters out of the state.
The optimism of the 1960s has been replaced by cynicism and resignation: Did you hear that gubernatorial candidate Jerry Brown gets multiple pensions totaling $78,000 a year? Did you read about the little city of Bell’s council members who pay themselves nearly 100 grand a year and paid the city administrator $1.5 mil a year? Gallows humor, appropriate for a dying state, is de rigueur among the state’s political class.
My own family has come full circle. My husband (whose family moved from Indiana to Northern California a year before mine moved from South Jersey) and I joined the out-migration in 2005, moving East with our two sons. It was our turn to amaze West Coast friends and family by leaving home. But unlike the trek four decades earlier, there was little confusion about the reasons for our departure. Instead, people seemed wistful, curious about whether they would learn from us that there might be a better life elsewhere, with workable schools, functioning state and local governments, and more modest taxes.
And in the years since our exodus, we have become acquainted, once again, as we had been in our youth, with normal public schools, pleasant neighborhood parks, well-stocked libraries, and state and local governments that live within their means, more or less.
Flying over Los Angeles on an annual summer visit, I peer through smog so thick that the coastline is hard to see. It is only three in the afternoon, but the cars are backed up for miles on the freeways, which remain largely in the same state of disrepair that greeted me last year. The state is literally deteriorating before my eyes. In an age when discount airfares are plentiful and one can wear shorts on American Airlines,California for me has become a nice place to visit. But who would want to live there?
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9)Mort Zuckerman: The American Jobs Machine is Clanging to a Halt
Even the 9.6 percent unemployment rate underplays the economic disaster
By Mortimer B. Zuckerman
America's private-sector jobs machine has been the marvel of the economic world since 1940. When farm jobs were eliminated by mechanization, factories hired more. When factories increased productivity and moved work offshore, jobs opened up in services such as healthcare and education. Today that machine is clanging to a halt. For the man in the street, these are the worst times since the 1930s. Even those who have not suffered know someone—a friend, a neighbor, a family member—who is being hurt. A majority of Americans worry that the recession is far from over.
The history of job numbers gives no cause for optimism. Private-sector jobs increased about 3.5 percent a year from the 1950s through the 1970s, 2.4 percent in the 1980s and 1990s, and less than 1 percent annually during the last decade. From 1985 to 2008, U.S. unemployment averaged 5.6 percent, compared with about 7.5 percent for the six largest economies in the European Union. Today, many of those countries now have lower unemployment rates than ours. In the 10 years after December 1989, the U.S. economy gained 21.7 million jobs. By contrast, from December 1999 through December 2009, we lost 944,000 jobs. Even without counting the end-of-decade recession, and comparing the first eight years of the 1990s to the same span in the 2000s, payroll employment rose by less than half—under 7.5 million jobs compared with nearly 16 million.
The composition of this unemployment is equally troubling. In the normal cycle, the men and women laid off can expect to be taken on again somewhere. Not now. Millions have been looking for work for six months. One opening has hundreds seeking to fill it. The rise in unemployment among permanent jobholders (that is, jobholders not on temporary layoff) is astounding. The rate rose from 1.7 percent in 2007 to a 5.6 percent peak in October 2009, and still remains at about 5 percent. Similarly, the long-term unemployment rate, as a share of the labor force as a whole, increased from 0.9 percent in November 2007 to 4.4 percent in June 2010, way above the previous postwar peak of 2.6 percent in June 1983.
Perhaps most troubling is the proportion of unemployed who have been out of work for six months or more: a remarkable 42 percent, according to the latest data from the Bureau of Labor Statistics. The concern is that as the spell of unemployment lengthens, skills erode and behaviors tend to change, leaving some people unqualified for the work they once did well. They face the horrible prospect that they may never work again.
Those with high school diplomas have an unemployment rate of 9.7 percent, compared with 5 percent for those with at least a bachelor's degree. Even recent college graduates have suffered. According to the National Association of Colleges and Employers, job offers to graduating seniors declined 21 percent last year and are expected to decline as much as 7 percent more this year.
The headline unemployment number underplays the disaster. The 9.6 percent quoted does not reflect those who have stopped looking for work since mid-2008—that would give a rate of over 11 percent. Private incomes remain about 5.4 percent below the level of the third quarter of 2008, a dramatically bigger drop than in any previous postwar cycle, when private incomes never declined at all.
The true figure of our jobs predicament is 17 percent: the combination of the unemployed and the underemployed—those who can only find part-time work. That 17 percent is the highest figure since the 1930s.
Men are bearing the brunt of the crunch. Recently, their unemployment rate was 11.4 percent; women's was 8.8 percent, making for the largest jobless gender gap since tracking became possible in 1948. Why? Because men predominate in manufacturing and construction, the hardest-hit sectors, which have lost almost 4 million jobs since December 2007. Women, by contrast, are a majority in recession-resistant fields such as education and healthcare, which gained slightly fewer than 600,000 jobs during the same period.
Finally, 2 1/2 years into the most stimulative monetary and fiscal policy in our history—with fiscal deficits running at twice the rate that President Franklin Roosevelt ran during the Great Depression—the economy, at best, added just about 600,000 jobs. Compare that with the 8 million more jobs we need just to return us to the peak of December 2007, when our troubles started. We are way behind where we were in all previous recoveries. This time only 9 percent of the recession losses have been recouped from the lows in employment in December 2009.
Of course companies have been nervous about expanding payrolls. They worry workers will simply be too costly, something they don't have to worry about when they simply buy more equipment and software, or outsource abroad. Automation alone has helped manufacturing cut 5.6 million jobs since the year 2000. Companies have been hiring temporary workers and increasing the work week for existing staff members, leading to big productivity gains. And there's anxiety that our deficits mean higher taxes for both businesses and consumers.
The question is inescapable: Is something wrong with the jobs machine that lies at the heart of the American economy, something that may be much more structural than cyclical? It is now estimated that structural unemployment has risen from 5 percent before the crisis to about 6.75 percent. This means that one-third of the rise in American joblessness may be impervious to the business cycle and cannot be solved by boosting demand.
Why is this?
First, as a Morgan Stanley analysis points out, high and rapidly rising healthcare costs are a disincentive to hiring.
Second, the weakness of the overall American economy has intensified efforts to cut payrolls by boosting productivity.
Third, there are mismatches between skills needed and those available. A Manpower Inc. survey this year showed that even in the recession, 14 percent of firms had difficulty finding suitable talent.
Finally, the negative equity in housing is a drag on mobility.
The rise of information technology has vastly accelerated the offshoring of manufacturing capacity and the efficiency of manufacturing at home. Automobiles, manufacturing, home building, and banking can no longer be expected to lead the way out of the recession.
Clearly this means policymakers must exert energy and imagination to deal with structural unemployment. We have to think beyond the stimulus and adopt more targeted policies to help the millions of Americans stuck in the wrong places with the wrong skills. Retraining, yes, but for what? The private sector has to be the focus, not the public sector and government jobs. Private-sector job creation must be the No. 1 objective of economic policy.
Look at startups, particularly in high-tech manufacturing. They are wonderful but cannot alone increase employment in technology. The key transformation is when technology goes from prototype to mass production; that is when companies "scale up." That's when they figure out how to make things affordably, and build factories, and hire people by the thousands. Andy Grove, founder of the Intel Corp., has written that a scaling-up process no longer occurs in the United States because American companies have discovered that manufacturing, and even engineering, can be done much less expensively overseas. Take the computer industry. Computer manufacturers employ about 166,000 people in the United States these days, according to Grove, fewer than before the first computer was assembled here in 1975. By contrast, Asia now employs about 1.5 million workers in its effective computer manufacturing industry.
Scaling is the critical pivot point because that's where the jobs are. But it goes beyond that, for without scaling we lose our hold on new technologies, ultimately diminishing our capacity to innovate. We should develop a series of large industrial parks with government financing to help speed up the slow local approval process. If we build technology manufacturing plants quickly, we can accelerate the transformation of startups into larger scale manufacturing.
But it is no use developing physical capital without cultivating financial and intellectual assets too. And the latter is the most important to reverse the flow of high-tech manufacturing abroad. We must cherish talent. We must increase the number of H1B visas for highly educated foreign students, who get roughly 50 percent of the graduate degrees in the hard sciences. In 2000, we issued 195,000 such visas; the annual figure now is only 65,000. The others we send home to compete against us. No wonder that Bill Gates thinks that increasing the number of H1B visas is the most critical step to grow technology manufacturing. He understands that the presence of this talent creates jobs, not eliminates them, particularly in a country with a great tradition and talent for the integration of immigrants.
Time is running out. The United States, which led the history of innovation, must lead again.
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