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Obama's failures are inescapable and are his. No one else's despite his protestation He lacks the character demanded of a leader of a great nation.
Obama has gone from labeling those who don't agree as enemies, he has placed his opponents in the back of the bus, he has suggested they oppose everything he has tried to accomplish while sucking on Slurpee's but has yet to look in the mirror.
Granted, whatever the results of today's election the public have not fallen in love with Republicans, simply out of love with Obama, his Far Left crowd and their extreme legislation.(See 2, 2a, 2b and 2c below)
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A wounded president can become a feast on which the jackals within his own part could begin to feast. (See 3 below.)
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California may go with Brown and if it does this will signify it no longer much cares about its future. (See 4 below.)
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The Republican Party is not without its own schism. (See 5 below.)
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For Israelis the question is not whether there will be another war but when and what the casualty rate will be. A retiring IDF Intelligence says it will be high. (See 6below.)
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Bombs and high casualties in Baghdad and Lebanon about to fall. This is, in large part, the consequence of Obama's passive and confused Middle Eastern diplomacy. (See 7 below.)
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The West goes forward in denial and with its head in the sand. That posture may bring comfort now but it will bring disaster in the future according to Caroline Glick. (See 8 below.)
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Tom Sowell asks Guess Who? I respond Guess who is coming to dinner - eventually inflation! May take a while but it will come.(See 9 below.)
Dick
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1)Keynesian Confusion
By Michael E. Lewitt
“At the present moment people are unusually expectant of a more fundamental diagnosis; more particularly eager to receive it; eager to try it out, if it should be even plausible. But apart from this contemporary mood, the ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slave of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back.”
John Maynard Keynes (1936)
Ironically, John Maynard Keynes himself remains by far the most influential of the defunct economists from whom the madmen in authority are distilling their frenzy today. Economists occupy a world in which their theoretical musings have enormous real world consequences. Unlike their colleagues in the hard sciences, however, economists do not have the luxury of testing out their theories before inflicting them on the rest of us. The Keynesian experiment being run by governments and central banks over the past two years is a case in point.
Keynesian policies are inflicting untold damage on the U.S. and global economies today. Things did not have to be this way; Keynes did not have to be misread. His antidote for slow economic growth and high unemployment – massive doses of government spending – was appropriate in midst of the 2007-8 financial crisis, just as it was sensible during the 1930s global depression that Keynes was experiencing while he was writing The General Theory. In end of world scenarios, government spending is the last resort. But once the economy stabilizes – even at a diminished rate of growth - Keynesian medicine will cripple the patient if it is not withdrawn and replaced with a healthy fiscal regimen. Unfortunately, policymakers – in particular the current and past Chairmen of the Federal Reserve – have shown themselves to be either unwilling or incapable of making the transition from crisis management to post-crisis management of monetary policy. As a result, today’s Federal Reserve is missing the second great lesson of Keynes’ work, the “paradox of thrift.”
The most extended discussion of the paradox of thrift occurs in Chapter 23 of The General Theory, which is actually part of a series of chapters contained in Book IV entitled “Short Notes Suggested by the General Theory.” The discussion of the paradox of thrift in this chapter is primarily devoted to a historical survey of the idea and is relatively disjointed. Keynes’ clearest description of the concept comes much earlier in The General Theory when he writes the following:
“The reconciliation of the identity between saving and investment with the apparent ‘free-will’ of the individual to save what he chooses irrespective of what he or others may be investing, essentially depends on saving being, like spending, a two-sided affair. For although the amount of his own saving is unlikely to have any significant influence on his own income, the reactions of the amount of his consumption on the incomes of others makes it impossible for all individuals simultaneously to save any given sums. Every such attempt to save more by reducing consumption will so affect incomes that the attempt necessarily defeats itself. It is, of course, just as impossible for the community as a whole to save less than the amount of current investment, since the attempt to do so will necessarily raise incomes to a level at which the sums which individuals choose to save add up to a figure exactly equal to the amount of investment.”
In order for the fallacy of thrift to slow economic growth, the capital that consumers and businesses are saving would normally have to be available to recirculate in the economy through loans or investments. This recirculation is precisely what is not happening today, or at least not nearly at the rate necessary to lift growth to a level that would create significant job growth. And this is the Keynesian lesson that fiscal and monetary policymakers appear to have forgotten as they have forged their post-crisis strategy – rather than indiscriminately easing monetary conditions, it is necessary to create an environment in which savings-conscious consumers and corporations are willing to allow their funds to recirculate.
The reason that the current recovery is below par is that the economy is experiencing a massive paradox of thrift. A combination of factors has led individual economic actors – both consumers and corporations – to believe that it is in their best individual interest to save rather to spend, to repay debt rather than borrow. The result has been an increase in the personal savings rate from slightly negative to approximately 6-7 percent, and a significant improvement in corporate balance sheets (corporations are now sitting on approximately $1 trillion of cash). This has improved the financial condition of these individual economic actors, but deprived the broader economy of consumption and investment spending.
Unwise economic policy choices have led to the current situation. Consumers are saving instead of spending because the value of their homes has declined significantly, which is a result of the pro-cyclical monetary policy and lack of regulation that contributed to the housing debacle. Businesses are limiting their hiring and expansion plans due to the increasing regulatory burden being placed on them by the government, by fears of impending tax increases, and by the general anti-business tone coming out of Washington D.C. Investors are fleeing the stock market because regulators don’t have the guts to stand up to Wall Street and address dangerous practices such as the repeal of the uptick rule, naked CDS on systemically important institutions (which allows speculators to mount bear raids on companies such as BP plc), and flash and algorithmic trading. The combination of all of these policy failures has led to a massive crisis of confidence in the American model of capitalism, which has become as badly corrupted as the Japanese model that is responsible for Japan’s decades of deflation and economic paralysis. And our current politics offers little prospect for change.
This is the landscape investors are facing as we enter one of the most important weeks in American politics and markets in a long time. HCM is devoting so much time to a discussion of policy and politics because these are the forces that are driving financial markets today. The performance of individual companies is far less important than macroeconomic factors in determining investment performance. The United States is on the verge of two important events that will affect not only its own immediate future but the future of the global economy: the November 2 mid-term elections, and the November 3 meeting of the Federal Reserve’s Open Market Committee. The mid-term elections are expected to produce a significant shift in power in the U.S. Congress, with Republicans expected to regain control of the House of Representatives, move into an unassailable blocking position in the Senate, and make major gains at the state level as well. The financial markets have been treating these two early November dates as early Christmas presents, but the post-holiday hangover may be brutal. Financial markets should be careful what they wish for on November 2 and 3. Despite likely short-term market gains, they may ultimately be staring at coal in their stockings.
The Mid-Term Elections
The mid-term elections promise a big victory for the Republicans, a party whose brand was so severely devalued a mere two years ago that the media was already writing about President Obama’s second term agenda. But a Republican resurrection is hardly likely to improve economic or social conditions; the Republicans’ rigid anti-tax, anti-regulatory agenda has inflicted great damage on this country. The repudiation of Congress that will occur on November 3 should be considered bi-partisan – both parties have been abject failures. The political process has become deeply corrupted and dysfunctional. Returning the party to power that presided over 8years of budget profligacy and regulatory malpractice between 2000 and 2008 is hardly a great accomplishment; it merely promises to temper the worst anti-business and anti-growth policies of the Obama administration and its Congressional minions. Many believe that political gridlock will ensue, although we would not be surprised to see progress made on several policy fronts such as a compromise on taxes and perhaps some marginal budget cuts (not entitlement reform unfortunately). Those promoting a Republican victory argue that at least things won’t get worse for the economy if the Obama agenda is stopped in its tracks, but the economy will get worse if America’s ill-advised fiscal and tax policies remain in place.
After the election, HCM expects a dangerous outbreak of populism that will most likely take the form of protectionist economic measures primarily aimed at China. If this occurs, it will not be good for the financial markets. There are already rising pressures in Congress to take action against China, and we will have to see if these sentiments will fade after the election. Our expectation is that they will not. The demagogic danger is a real one and it is growing. With more than one in eight Americans on food stamps, new revelations about mortgage foreclosure abuses, and the appearance on the scene of politicians of the ilk of New York gubernatorial candidate Carl Paladino, Delaware Senatorial candidate Christine O’Donnell, and Ohio Congressional candidate Rich Lott, who used to spend his spare time engaging in Nazi reenactments (with his son!) and was actually endorsed by future House Speaker John Boehner, it is a small leap to protectionist legislation aimed at China and other countries that can be scapegoated for America’s own failures. The way to combat China’s currency policy is not through punitive measures but through policies that improve America’s competitive economic position, a concept that is unlikely to gain currency in today’s devalued marketplace of ideas. Instead, bad ideas are likely to gain ascendancy and provide political cover for American politicians trying to avoid making the tough choices needed to right the American economy. We may not need our politicians to be nuclear scientists, but this country isn’t going to served by electing outright idiots either.
QE2
One day after the mid-term elections, the Open Market Committee is expected to announce the details of its plan to engage in a second round of quantitative easing (QE2) pursuant to which the central bank will intervene directly in the financial markets to purchase as much as US$1 trillion of Treasury securities. The stated purpose of QE2 is to prevent inflation from dropping below the Federal Reserve’s target of 2 percent, which is somehow supposed to stimulate economic growth. This ignores the fact that record low interest rates over the past two years have failed to do precisely that. Nonetheless, all of the Fed’s jawboning about its plans has had a significant impact on the financial markets. The Dow Jones Industrial Average is up about 12% since Fed Chairman Ben Bernanke began hinting that further quantitative easing was coming two months ago. Inflation expectations have shifted sharply upward, with a recent 5-year TIPs auction resulting in a negative real yield of -0.55 percent (see Graph 1 below). On the other hand, the yield on 10-year and 30-year Treasuries has increased by about 30 and 40 basis points, respectively, since the Fed announced its intentions. Markets are heeding the history lesson that monetary policy plays a key role in shaping post-crisis economies; the problem thus far is that the markets aren’t doing what the Fed wants them to do. If the Fed does not play small ball with QE2, however, we would expect rates to drop back down in the near term. We doubt, however, that reducing already low rates is going to stimulate much of anything other than more frustration on the part of savers.
HCM has a hard time making a case that inflation is either a serious or imminent threat despite the signals coming from the market. Hedge fund star John Paulson recently told investors that he believes that inflation will rise to the double-digits by 2012, a forecast we find excessive in degree and timing although not ultimately in direction (calling for higher inflation in the future is an easy call; the tough call is deciding when inflation will hit). There is still too much excess capacity in too many areas of the economy – finance, real estate, housing – to create significant near-term inflationary pressures. The type of inflation Mr. Paulson is predicting really speaks to a different type of scenario that would involve a collapse of the U.S. dollar and with it the U.S. economy, which would be consistent with reports that Mr. Paulson holds 80 percent of his considerable personal assets in gold. HCM is a strong believer in gold and even a stronger believer in a dollar collapse and continuing U.S. economic weakness barring a 180 degree change in policy, but we don’t see it happening as quickly as Mr. Paulson.
Opinion among the Fed governors concerning the wisdom and prospects for quantitative easing is hardly uniform. For example, during an October 19 speech before the New York Association for Business Economics, Richard W. Fisher, the president of the Federal Reserve Bank of Dallas admitted that “[i]n my darkest moments, I have begun to wonder if the monetary accommodation we have already engineered might even be working in the wrong places.” St. Louis Federal Reserve Bank President James Hoenig has been a consistent dissenter from recent Fed decisions and in HCM’s opinion is the lone voice of reason in a sea of Keynesian insanity. Despite these doubts, the central bank is intent on mounting another feckless attack on the powerful deleveraging trends at work in the post-crisis world.
In a twist that must have amused the Fed’s harshest critics, it was reported that the Fed surveyed government bond dealers and investors about their expectations of the initial size of any new program of debt purchases and the time period over which it would be completed. It also asked firms how often they expected the program to be reevaluated by the Fed and to estimate its ultimate size. Coming less than a week before the Open Market Committee, this request is consistent with the tradition of the Fed cow-towing to the financial markets. Former Chairman Alan Greenspan used to rely on the wisdom of the stock market, and declared to the world that it was a “conundrum” when interest rates did not respond to Fed policy moves in accordance with his ideology. Ben Bernanke’s Fed doesn’t even wait for the markets to opine – it asks the markets in advance about their expectations, presumably so the central bank will not disappoint them and see them drop (God forbid!). That’s one way to avoid conundrums, but it is no way to manage monetary policy. The markets are counting on a $1 trillion program of quantitative easing over a reasonably short period of time; anything less could cause a sell-off in equities. The markets, as usual, are only focusing on the short-term and ignoring the long-term risks created by ill-advised monetary policies. QE2 may sustain the markets for a brief period of time, but sooner rather than later the markets are going to have to pay the piper for the mountains of debt and extended period of artificially low interest rates that this policy has promulgated.
As I have written in El Mundo and spoken about at the recent Value Investing Congress in New York, QE2 is not only unlikely to work but is certain to contribute to future financial instability. The financial system is already sitting on US$1 trillion of excess reserves. The reason that these reserves are not being used to grow the economy through capital spending or to create jobs is not that interest rates are too high. Rather, reserves are going unutilized because of a profound lack of confidence on the part of economic actors bred by anti-growth policies promoted by the Obama administration (particularly healthcare reform) and the threat of significantly higher taxes (as much as US$6 trillion over the next 10 years if current plans aren’t altered. ) QE2 will do nothing to address these factors suppressing demand for funds. QE2 is a monetary policy tool being used to address a problem that has nothing to do with monetary policy. As such, it is misguided and is unlikely to work. What it will do, however, is further swell the Federal Reserve’s balance sheet and lower the value of the dollar, neither of which will contribute to the long-term strength of the American or global economy.
But QE2 doesn’t only fail to aim at the right target (employment); it doesn’t really aim at anything at all. Instead, QE2 basically sprays money indiscriminately into the economy instead of targeting money at productive activities. Current fiscal and tax policy promotes peculation at the expense of productive growth; examples include the lax rules governing derivatives trading and leveraged buyouts, activities that add nothing to the productive capacity of the economy. Without fiscal and tax policy changes designed to promote productive growth, the excess reserves created by QE2 will end up in the hands of speculators in the financial industry. This will increase systemic leverage and exacerbate existing overcapacity in unproductive areas such as finance and real estate. QE2 without fiscal and tax policy changes is simply a continuation of the boom-and-bust regime that has dominated global financial markets for the past three decades.
The Stock of the Fed is Dropping Quickly
The once Teflon reputation of the Federal Reserve has taken a beating since the financial crisis, but its management of the post-crisis environment has lifted criticism of the central bank to a new and perhaps unprecedented level. Previously, the most strident attacks came from the likes of Congressman Ron Paul and other libertarians; today they are coming from respected market figures such as Morgan Stanley economist Stephen Roach, PIMCO’s Bill Gross, and Jeremy Grantham.
Readers of this publication are well aware that HCM has long admired the work of Morgan Stanley’s Stephen Roach. Mr. Roach is one of the more intellectually honest and outspoken central bank critics on the scene today. On October 12, he addressed the World Knowledge Forum in Seoul, South Korea and delivered one of the harshest public critiques of the Federal Reserve that has been made in many years. The primary thesis of the speech was that policy makers have failed to learn from the policy errors made by Japan. He writes that “it is now debatable as to whether there was ever a clear understanding of the true Lessons of Japan and what they might imply for macro policy management in the modern world.” This is important because “[i]n the aftermath of the Crisis of 2009-09 - and the Great Recession it spawned – a legacy of post-crisis debt and deleveraging is now increasingly global in scope.” The correct lesson of what has happened to Japan over the past two decades is not that Japanese authorities moved with insufficient speed and aggression to deal with credit and asset bubbles. The correct lesson is that such bubbles must be identified earlier and avoided in the first place.
Mr. Roach rightly criticized the Federal Reserve for failing to spot obvious bubbles in advance (the Internet Bubble, Housing Bubble, and Corporate Bond Bubble are three obvious examples). But even worse, he said, is that the Federal Reserve Chairman was leading the intellectual charge supporting the case that these were not bubbles.
“One of the most disturbing features about each of these episodes is that the Chairman of the Federal Reserve – steeped in his ideological convictions that markets always know best – led the charge in denying that they were bubbles. He argued that the NASDAQ bubble was well supported by the productivity renaissance of the New Economy. Housing bubbles could only be local – never national. And the unprecedented tightening of credit spreads was an outgrowth of stunning advances in financial innovation.”
As someone who was fortunate enough to warn in this publication (and elsewhere) of each of these bubbles in advance, HCM welcomes Mr. Roach’s willingness to speak out about the failure of so-called leading economists to miss such obvious imbalances. These imbalances are what cause the types of market crashes that wipe out years of investment performance in the blink of an eye, or create the opportunity to profit from selling short. Moreover, these bubbles are not that difficult to identify if one is willing to look at the facts with an objective eye and not be corrupted by the madness of crowds. As I wrote in The Death of Capital:
“there are clear indicia of when asset prices are rising at unsustainable levels….Any significant departure from long-term valuation trends should capture the concern and attention of central bankers and trigger a response. But the types of deviations from the norm that occurred in the decade preceding the crisis of 2008 were far more than mere departures from long-term trends; they were obvious bubbles that required no special economic knowledge to identify. Stock prices traded at a multiple of 351x earnings on the NASDAQ Stock Exchange at their peak on March 10, 2000; the average price/earnings multiple at previous market peaks had been no higher than 20 before that. The risk premium (known as spread) on Credit Suisse’s High Yield Index reached 271 basis points over Treasuries on May 31, 2007, a record level that exceeded the historical average of 570 to 580 basis points by over 50 percent.”
Unfortunately, we are again heading into dangerous territory as a result of the Federal Reserve’s ill-advised zero interest rate policy, which is being exacerbated by an irrational fear of disinflation that is leading to its truly hare-brained scheme to engage in QE2. You can be sure we will do our best (as we have in the past) to sound the warning when markets get out of hand again. It is only a matter of when, not if, this occurs.
Mr. Roach also criticizes the Federal Reserve for failing to take into account the fact that financial bubbles have a devastating effect on the real economy. “A key lesson from Japan,” he said, “is for the authorities to be especially mindful of the lethal interplay between asset and credit bubbles and related distortions in the real economy. That lesson was totally lost on the Federal Reserve over the past decade.” In the post-crisis environment, monetary policy is being guided by deflation fears fed by Japan’s experience that lead to policies that are likely to exacerbate those very same deflationary risks. Mr. Roach warns: “[t]hat could very well be the single greatest flaw of a narrow and mechanistic inflation-targeting policy rule – a framework that does not allow for the unintended consequences of low nominal interest rates in spurring a steady string of asset and credit bubbles that could well compound deflationary risks over time.” In other words, the Fed’s narrow mandate (or its narrow interpretation of its mandate) is leading it to adopt policies that are exacerbating the very risks it is seeking to mitigate.
Mr. Roach’s solution is to add to the central bank’s mandate a requirement to maintain “financial stability.” Such a requirement would provide monetary authorities “with the political cover to attack asset and credit bubbles before they had dangerously destabilizing impacts on markets and wealth- and credit-dependent economies.” He believes such a change is necessary because we have had “a Federal Reserve that was swayed more by ideology than discipline, and debased by politically-motivated fiscal authorities who have become fixated on short-term stimulus while ignoring longer-term considerations. In this environment, we can no longer count on the promises of policy makers to act in accordance with the lessons they have learned from Japan or from the Great Crisis of 2008-09.” HCM would slightly modify Mr. Roach’s last statement. Policymakers have simply failed to learn the right lessons from the 2008-09 crisis. As we argued above, rather than learning from Keynes that a debt crisis should be solved with more debt, the authorities should have better understood how the paradox of thrift would operate in a post-crisis environment and developed policies to deal with that phenomenon.
Bill Gross was also harshly critical of Federal Reserve policy in his most recent Investment Outlook. In so many words, he accused the U.S. government of running a massive Ponzi scheme, although he softened this comment by noting that public debt always has Ponzilike characteristics. But the Ponzi scheme currently being run by the U.S. government is unprecedented in size and scope. Mr. Gross argued that:
“with growth in doubt, it seems that the Fed has taken Charles Ponzi one step further. Instead of simply paying for maturing debt with receipts from financial sector creditors – banks, insurance companies, surplus reserve nations and investment managers, to name the most significant – the Fed has joined the party itself. Rather than orchestrating the game from on high, it has jumped into the pond with the other swimmers. One and one-half trillion in checks were written in 2009, and trillions more lie ahead. The Fed, in effect, is telling the markets not to worry about our fiscal deficits, it will be the buyer of first and perhaps last resort. There is no need – as with Charles Ponzi – to find an increasing amount of future gullible, they will just write the checks themselves. I ask you: Has there ever been a Ponzi scheme so brazen?”
PIMCO is a huge holder of Treasury and other types of securities that are likely to benefit in the short run from QE2, but Mr. Gross correctly frets about the inevitable inflationary consequences of this policy. Inflation, of course, could decimate PIMCO’s long bond positions when it begins to rear its ugly head (although we assume he is hedged), so Mr. Gross is not only making a principled argument but also to some degree talking his book (which is his right).
Jeremy Grantham, in a Quarterly Letter entitled “Night of the Living Fed,” makes the compelling argument that debt doesn’t correlate with long-term growth rates. Debt, he writes, “is the paper world. It is, in an important sense, not the real world.” He continues:
“In the real world, growth depends on real factors: the quality and quantity of education, worth ethic, population profile, the quality and quantity of existing plant and equipment, business organization, the quality of public leadership (especially from the Fed in the U.S.), and the quality (not quantity) of existing regulations and the degree of enforcement. If you really want to worry about growth, you should be concerned about sliding education standards and an aging population. All of the real power of debt is negative: it can gum up the works in a liquidity/solvency crisis and freeze the economy for quite a while.”
Mr. Grantham has long been a critic of Alan Greenspan, Ben Bernanke and the Federal Reserve, but he could hardly contain himself in his last quarterly letter. He provides a great deal of fodder for the growing intellectual case against the pro-cyclical path that monetary policy has taken under its two most recent Chairmen.
Market Recommendations
We still expect the stock and bond markets to maintain their strength through the end of the year, particularly in the aftermath of a Republican victory in the mid-term elections and the announcement of QE2. Our short-term oriented readers should act accordingly. The corporate credit markets are paying absolutely no attention to company quality; anything with a decent coupon is trading up. The risk trade is clearly on.
Readers with a long-term focus should continue to accumulate gold and limit their investments in the credit area to bank loans (through mutual funds), BB/BBB corporate bonds, and stocks that have lower-than-market p/e ratios and pay dividends. We would avoid Treasuries at all costs. Lending to our government at 2.6 percent for 10 years is a great way to become a millionaire - if you’re already a billionaire. Sooner or later, everything being earned on the upside of this liquidity-induced rally will be given back in spades – the only question is when.
-------------------------------------------------------------------------------------2)Why Obama Is No Roosevelt
Roosevelt: 'Your government has unmistakable confidence in your ability to hear the worst without flinching and losing heart.' Obama: We don't 'always think clearly when we're scared.
By DOROTHY RABINOWITZ
Whatever the outcome of today's election, this much is clear: It will be a long time before Americans ever again decide that the leadership of the nation should go to a legislator of negligible experience—with a voting record, as state and U.S. senator, consisting largely of "present," and an election platform based on glowing promises of transcendence. A platform vowing, unforgettably, to restore us—a country lost to arrogance and crimes against humanity—to a place of respect in the world.
We would win back our allies who, so far as we knew, hadn't been lost anywhere. Though once Mr. Obama was elected and began dissing them with returned Churchill busts and airy claims of ignorance about the existence of any special relationship between the United States and Great Britain, the British, at least, have been feeling less like pals of old.
In the nearly 24 months since Mr. Obama's election, popular enthusiasm for him has gone the way of his famous speeches—lyrical, inspired and unburdened by the weight of concrete thought.
About the ingratitude of Democratic voters the president brooded in a September Rolling Stone interview. "If people now want to take their ball and go home," he declared, "that tells me folks weren't serious in the first place." His vice president, Joe Biden, had a few days earlier contributed his own distinctive effort to seduce Democrats back to the fold by telling them to "stop whining."
The results of this charm campaign remain to be seen. What's clear now is that we've heard quite enough about the "angry electorate"—a peculiarly reductive view of citizens who've managed to read all the signs and detect an administration they were not prepared to live with.
Nothing wakened their instincts more than the administration's insistence on its health-care bill—its whiff of totalitarian will, its secretiveness, its display of cold assurance that the new president's social agenda trumped everything.
But it was about far more than health-care reform, or joblessness, or the great ideological divide between the president and the rest of the country. It was about an accumulation of facts quietly taken in that told Americans that the man they had sent to the White House had neither the character or the capacity to lead the country.
Their president was the toast of Europe, masterful before the adoring crowds—but one who had remarkably soon proved unable to inspire, in citizens at home, any belief that he was a leader they could trust. Or one who trusted them or their instincts. His Democratic voters were unhappy? They, and their limited capacities, were to blame.
These are conspicuous breaks in the armor of civility and charm that candidate Obama once showed—and those breaks are multiplying.
At a Democratic fund-raiser a few weeks ago, the president noted, in explanation for the Democrats' lack of enthusiasm, that facts and science and argument aren't winning the day because "we're hard-wired not to always think clearly when we're scared." The suggestion was clear: The Democrats' growing resistance to his policies was a product of the public's lack of intellectual capacity and their fears.
Decades ago another president directly addressed Americans in a time of far greater peril. "Your government has unmistakable confidence in your ability to hear the worst without flinching and losing heart," Franklin Roosevelt told his national audience. The occasion was a fireside chat delivered Feb. 23, 1942. No radio address then or since has ever imparted a presidential message so remarkable in its detail, complexity and faith in its audience.
It was delivered just a few months after Pearl Harbor, a time when the Allied cause looked bleakest. It would be known to history as "The Map Speech." The president had asked Americans to have a map at hand, "to follow with me the references I shall make to the world- encircling battle lines of this war." He took them through those lines, the status of battles around the globe, the enemy's objectives, centers of raw material and far more. By the time they had finished poring over their maps with him they had had a considerable education.
It is impossible to imagine what might have been the effect if the current president, who is regularly compared to FDR—always a source of amazement—had tried anything like a detailed address explaining, say, the new health-care bill. Though this would have required knowledge of what was actually in the bill (a likely problem) and a readiness to share that news (an even greater one).
Despite the ongoing work of legions grinding out endless new and improved proofs that FDR was a despoiler of democracy and our economic system, it is worth remembering the reason virtually all serious historians rank him among the top three of our greatest presidents.
Franklin Roosevelt led the nation through 12 years begun in incomparable national misery virtually to the end of the war. When he died, an anguished country mourned as it had not done since the death of Lincoln. Americans trusted him. The story is told of a man found weeping when Roosevelt's funeral train went past, who was asked if he had known the president. "I didn't know him," he replied. "But he knew me."
The times are now vastly different—no one expects a candidate with the powers of an FDR these days. But the requirements of leadership don't change. Despite charm and intellect, Americans have never been able to see in Mr. Obama a president who spoke to them and for them. He has been their lecturer-in-chief, a planner of programs for his vision of a new and progressive society.
Plenty of suggestions, none of them feasible, are in the air now about how he can reposition himself for 2012, and move to the center. Mr. Obama is who he is: a man of deep-dyed ideological inclinations, with a persona to match. And that isn't going away.
The Democrats may not take a complete battering in the current contest, but there is no doubt of the problems ahead. This election has everything to do with the man in the White House about whom Americans have lost their illusions. Illusions matter. Their loss is irrecoverable.
Ms. Rabinowitz is a member of the Journal's editorial board.
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2a)Democrats Can't Blame the Economy
Imagine if President Obama had moved right after Scott Brown's election. The party would be in better shape today.
By FRED BARNES
A funny thing happened on the way to the midterm election. The economy was in bad shape, with high unemployment, slow growth and a lingering housing crisis. Yet it wasn't the paramount issue in the campaign.
The run-up to today's election has been policy-driven: Democrats are likely to lose their strong majorities because of the policies of President Obama and his congressional allies on spending, the deficit, the national debt and health care.
Those policies aroused an anti-Democratic alliance of Republicans, independents and tea partiers that emerged in the spring of 2009, spurred by alarm over spending, bailouts and escalating debt. By fall 2009, opposition to Mr. Obama's health-care plan solidified what appears to be a majority coalition.
Yes, the economy is always a factor in elections. But a wretched economy doesn't automatically doom Washington's ruling party to disaster in a midterm election. Since World War II, the average midterm loss by the president's party is 24 House and four Senate seats. In 1982, despite a deep recession and joblessness above 10%, Republicans lost only 26 House seats and none in the Senate. The difference between 1982 and today is that President Reagan's policies—cutting spending and taxes, firing striking air-traffic controllers—were popular.
And, by the way, a prosperous economy doesn't guarantee midterm success. In 1994, Republicans capitalized on President Clinton's liberal policies to win a rout despite a generally strong economy. In 1974, the Watergate scandal led to a Democratic landslide. In 1946, when Republicans ran on the slogan "Had Enough?"—referring to the regulations and taxes of wartime and the New Deal—they won 54 House and 11 Senate seats.
Yes, a flourishing economy would help Democrats today, and voters invariably list the economy and jobs as their top concern in the election. But that's not all they've told pollsters.
In a CBS/New York Times survey, only 8% blame Mr. Obama for the economy and more than two-thirds see the slump as temporary. "Most voters believe the best thing the government could do to help the economy is to cut government spending," says pollster Scott Rasmussen. "At the same time, most voters believe the administration and congressional Democrats want to go in the opposite direction."
The initial glimmering of a new center-right coalition appeared less than a month after Mr. Obama took office in January 2009. The first tea parties were held in response to the budget—with its sharp increase in spending (8.4%) and 8,000 earmarks—as well as the stimulus and bailouts.
By April, independents had begun their migration from left to right. This wasn't prompted by the economy. At the time, most Americans blamed George W. Bush for the economic mess. The cause was spending, and the soaring deficit and long-term debt it was creating.
Then came the summer, dominated by growing disapproval of what Republicans dubbed ObamaCare. That trend has never reversed. Democrats were confident that their health-care reform would be a political asset. But it helped Republicans win governor's races in Virginia and New Jersey last November, and it was pivotal in January to electing Scott Brown to the Massachusetts Senate seat held for 48 years by the late Edward Kennedy.
Health care is a special thorn in the side of independents. A week ago, a George Washington University/Politico poll found that 62% of independents look unfavorably on ObamaCare. Only 6% regard it favorably. Independents, who were an indispensable part of the Democratic juggernauts in 2006 and 2008, favor Republicans by 14 percentage points.
There's a simple way to test whether Democratic policies, rather than the economy, are the dominant factor in the midterm election: Consider the alternative. After Mr. Brown was elected on Jan. 19, Mr. Obama could have abandoned his full-throttle blitz to pass health-care reform and other legislation, instead seeking compromise with Republicans. The bipartisan route, adored by independents, was open to him.
Mr. Obama could have yielded on health care and settled for a scaled-back bill that provided coverage for the uninsured and those with pre-existing conditions. He also could have proposed meaningful spending cuts or a second stimulus that included broad-based tax incentives for private investment. And he could have chosen to extend all the Bush tax cuts for another year or two.
On each of those issues, Mr. Obama would have attracted significant Republican backing—and he and his party wouldn't be in such dire straits. Democrats would still lose House and Senate seats, but not nearly as many.
And yet Democrats will explain their losses today by faulting the economy, not themselves. Their fortunes will improve once the recovery picks up, they say. And if that line of thinking isn't persuasive, they assert that there's a general anti-incumbent mood among voters this year.
Many incumbents are in trouble, but voters have a specific target: the party whose policies they so heartily dislike.
Mr. Barnes is executive editor of the Weekly Standard and a Fox News commentator.
2b)Not the Ones We've Been Waiting For
Pundits, particularly those who lean right, are schooled always to praise the wisdom of the electorate. Please.
By BRET STEPHENS
And so, today, the American people will seek an honest reckoning with Barack Obama. Good luck with that. Whatever his other virtues—not the least of which is campaigning on tautological slogans while passing himself off as Marcel Proust—this president will never be distinguished by his humility: Don't expect from him a decent admission, as George W. Bush had the decency to admit after the 2006 midterm, that his party had sustained a "thumping." Instead he will immediately decamp to places where he is still admired. That means exiting the country.
So expect no reckoning there. Nor should Americans expect one with the Democrats. If the party does a little less disastrously than anticipated, it will rally like a stock whose quarterly losses are slightly less bad than had been projected. And if it's Götterdämmerung, then we already know the narrative: secret sources of funding, plus anger, plus ignorance, plus a failure of communication. On which last score, they have a point: When your "accomplishments" consist of legislation nobody is allowed to read prior to the vote, and nobody can comprehend after it, then no wonder the swine have failed to take appreciative note of the pearls.
No, the only reckoning Americans can hope to get—and the one they most need to have—is the one they're least likely to seek. That is a reckoning with themselves.
Pundits, particularly those who lean right, are schooled always to praise the wisdom of the electorate. Please. Only three years ago, Americans became acquainted with a junior U.S. senator with an interesting personal history, notable rhetorical gifts, programmatically liberal ideas and zero legislative accomplishments. Whereupon he was hailed as a saint and elected president.
In Argentina or Venezuela such behavior may be unexceptional. But we're America, as they say: We're supposed to be into celebrity culture, not cult-of-personality politics. What happened?
Maybe Americans were sold on Mr. Obama as the man who could deliver them from the financial crisis. I don't buy it. Six months before Lehman Brothers collapsed, he delivered his instantly celebrated and soon forgotten race speech in Philadelphia. Historian Garry Wills compared it to Abraham Lincoln's Cooper Union speech. Others called it "stirring," "brave" and "flat-out brilliant." This for an address in which the candidate defended his anti-American, anti-Semitic pastor by outing his dying white grandmother as a woman prone to racist slurs.
Alternatively, perhaps Americans believed that Mr. Obama could make the United States beloved in the eyes of the world again. And maybe there's something to this: He did wow them in Berlin. But what kind of electorate surrenders itself to the good opinion of a Kreuzberg Kaffeeklatsch or a Damascene hookah bar? As president, Mr. Obama also offered an outstretched hand to Iran and gave a big speech in Cairo to the Muslim world at large. Yet Iran continues to enrich, and the parcel bombs keep getting posted in the mail. How did anyone ever expect it would be otherwise?
The answer is that as in relationships, so too in politics: Infatuation clouds judgment. You bank on the empty promises even as you refuse to take the object of your desire at his most precise word. Americans disillusioned today with the president for his health-care legislation, his refusal to extend his predecessor's tax cuts, his support for cap and trade, his ties to labor unions and groups such as Acorn, and his belief in the regulatory state, can't honestly say that they were promised otherwise during the campaign. They got almost exactly what they voted for—or at least they got an honest political stab at it. If Mr. Obama now thinks that they have no right to complain, he has a point.
Deputy editor Daniel Henninger, editorial board member Matthew Kaminski, and WSJ.com columnist John Fund analyze tomorrow's referendum on Obama-Pelosi governance.
.True, the president hasn't delivered on the promises of unity—of postracial, postpartisan, perhaps even post-American politics. These days, it's friends versus enemies, the politics of right-thinking people versus the politics of fearmongers.
That's not surprising. What is surprising are the masses of people who gave themselves over to the fantasy of unity in the first place. In a democracy, disunity is not just the reality, it's the premise. To wish for unity is to wish for an entirely different kind of politics, or perhaps something beyond politics itself, like religious transcendence.
Americans spent most of the 20th century and the first decade of the 21st fighting against that kind of wish, which goes by the name of totalitarianism and comes in fascist, communist or Islamist varieties. No, I'm not saying Mr. Obama is a closet totalitarian; on the contrary, he's nothing if not a partisan pol. But the people who donned those creepy T-shirts with Mr. Obama looking to the far distance like a latter-day Che Guevara were wholly in the mold of Eric Hoffer's true believers. In an earlier era they would have found their life's purpose as followers of Shabtai Tzvi, William Davies or Father Divine.
And so Americans go to the polls. Democracy being what it is, it holds not only our leaders to account, but our own political choices as well. Plainly Barack Obama was not the one we've been waiting for. But let's have the grace to admit we weren't the ones we'd been waiting for, either.
2c)This Is America, Stupid!
By Kyle-Anne Shiver
A nation holds its collective breath. America's pivotal election is today. We will either put the brakes on the Democrat-socialists' drive to transform us into a failing European-style social democracy or we continue to hurtle toward the cliff of no return.
Voters have waited through long, suffering months to make their voices heard at last.
Democrats have made an unprecedented mockery of representative government, ignoring the will of the people with arrogant disdain. Elitist hypocrites who campaigned on "love" for the poor party hearty on the hard-earned money of America's producers, jet to debauchery-ridden Europe to scorn our good name, and come back home only to spend our children into serfdom. The words "public servant" have almost become synonymous with "tax cheat." American companies are threatened with open thuggery by a power-mad administration of academics who wouldn't know how to actually produce a single cent if their very lives depended upon it.
The Democrats and their president line up in bowing and scraping infamy before the Islamists, throwing America under the bus of cowardly appeasement. A Democrat president still sends America's finest young people to war and ties their hands with hideous rules of engagement and withdrawal timetables, which inevitably make our bravest into cannon fodder. Democrat foreign policy has emboldened every evil actor on the world stage and made whole regions into powder kegs set to blow at the slightest provocation. Peace with genuine justice is an alien concept to the cowards in charge. These so-called peacemakers have been revealed as nothing but doormat-enablers.
And all around the land, media elites fumble the ball. These dimwitted media scalawags have twiddled their thumbs while 1776 redux has mounted a vociferous challenge to the ruling class of both parties (a class that the media themselves have for decades joined and empowered). The economy stands at the precipice of full-blown depression, the inevitable outcome of discredited Keynesian theory and a president who has bitten the small-business hand that feeds us enough to leave it bleeding and traumatized. Since our media elites are nothing more than materialist fat-cats themselves, they can see nothing in the Tea Parties but economic angst.
What a bunch of ninnies these people are. All of them. From the ivory-towered elitists in charge of the government to those in charge of the airwaves.
They forgot something.
This is America, stupid! And it's not just the economy.
It's the disrespect for the wishes of the electorate, who pay for everything.
What's the fundamental difference between American elitists today and those very well-educated, wealthy colonial elites who wrote the Declaration of Independence and the United States Constitution?
It comes down to one word: R-E-S-P-E-C-T.
Respect for God, our Creator. That's the fountain of American wisdom from which all else flows.
From respect for God, our Creator, comes respect for each individual that God has made. The foundational principle of American government is that human souls come in only one color, in one type, and at one value. In God's sight, we are all created equal. And since our very founding, good Americans of all stripes have worked to further this principle.
As if to highlight this fundamental loss of respect for our Creator as the source of citizens' unalienable rights, our big-government elitist in chief feels perfectly free to simply remove God from the American equal-rights paradigm, as he did when speaking to the Hispanic Caucus last month.
From respect for each individual flows the idea that liberty is a fundamental -- unalienable by government -- human right. Just as God has given free will to each person, in perfectly equitable manner, respecting man's ability to choose his own path, so a government made in the image of God's plan must permit the freedom to succeed or to fail, to prosper or to flounder, and to account for his own life when he faces God at the end of his earthly journey.
If the majority of American citizens want to change our Constitution, if they wish to banish the word "Creator" from our public display of the Declaration of Independence, they have legal ways in which to do this. The states can call a Constitutional Convention to take such steps democratically. Or our elected representatives can propose legal amendments to our Constitution which transform America into a socialist democracy. This is respect for the people's will.
But Democrats have decided to transform America from the top-down position of tyrants, boldly challenging the people to resist. Our founders were brilliant men who put into our Constitution the legal means to transform this country by purely democratic means. But Barack Obama is not legally empowered to make America into what he thinks it ought to be.
What we have in America today isn't just a feckless bunch of big spenders running our economy off a cliff. We have a cadre of power-mad folks who have no respect for the rule of law or the Constitution they are sworn to protect.
Respect for the will of the people is the very soul of democracy. Without it, liberty is nothing but a sham.
I've spent a great amount of time over the past year among Tea Party activists, interviewing many. I've talked to Americans from different regions of the country, old and young, rich and poor, black and white, union and non-union. To be sure, there is among Tea Partiers a mountain of economic angst and disgust for both parties' profligate ways.
But the real glue that holds all these disparate folks together -- and the reason they will not just go away after 2010 -- is bedrock respect for the U.S. Constitution.
It has not been lost on this monumental grassroots movement that lawmakers of both political parties have either ignored or defied constitutional limits on their powers for going on a century now. And for those now taking to the streets in protest, citizen revolution against growing tyranny is the primary driver of disgust.
When a United States congressman who has sworn to uphold, protect, and defend our Constitution is so smug that he can face a constituent and declare that "the federal government can do most anything it wants in this country," he has already proclaimed himself a traitor waiting for his due. When a Speaker of the people's House of Representatives mocks a reporter's question about the constitutionality of the health care bill she just railroaded through, asking "Are you serious?," she has already broken her own oath. When a president does not ask whether a power can be found within the U.S. Constitution, but rather steams ahead with nothing more than a might-makes-right, Yes-We-Can attitude, he has already trashed his own office in the sight of the people.
So as ballots are counted this week and every pundit goes into overdrive trying to pin the whole Democrat rousting on the economy, let me be perfectly clear in advance.
This is America, honey! And it's not just the economy.
It's the Constitution, stupid.
Lawmakers, judges, bureaucrats, and even presidents ignore it to their grave peril.
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3)Obama's Next Worry: A Restive Left Flank
Every president who lost re-election in the last half-century has first been weakened by a primary fight.
By JOHN FUND
Voter discontent this year isn't confined to the tea party. A new AP poll reports that 51% of Americans now think President Obama doesn't deserve re-election. More surprising, 47% of Democrats believe he should face a challenge for the party's nomination in 2012. No doubt many Democrats who hold this view are disappointed supporters of Hillary Clinton.
Prognosticators ponder whether Obama will face a primary challenge by a fellow Democrat in 2012, perhaps even by his 2008 primary rival, Hillary Clinton.
In reality, Mr. Obama doesn't have to worry too much about renomination. There are no signs that Mrs. Clinton would resign as secretary of state and challenge her boss. African-Americans, the president's strongest group of supporters, make up 30% of any Democratic primary electorate and provide him with a firewall against any opponent. And presidents from Ronald Reagan to Bill Clinton have rebounded after midterm defeats as the economy improved.
Still, a primary challenge, even if waged by a less-significant contestant, is a serious matter. Every president who lost re-election in the last half century has first been weakened by a primary fight—Gerald Ford, Jimmy Carter and George H.W. Bush being cases in point. Many of the three million voters Pat Buchanan attracted in 1992 against Mr. Bush, for example, wound up voting for Ross Perot in November. This allowed Bill Clinton to win with just 43% of the popular vote.
Today, party discontent with the president is real. Last week, leading Democrats were furious when Mr. Obama declined to endorse Rhode Island's Democratic gubernatorial candidate, Frank Caprio. This was payback for Lincoln Chafee's support of Mr. Obama's candidacy in 2008—Mr. Chafee is running for governor as an independent. "The notion that the leader of the party is being disloyal to his party is I think unprecedented," Democratic strategist Paul Begala told CNN.
Key donors have told the White House that the president should decide for certain whether he's running for re-election by the end of December. Should Mr. Obama's approval ratings slip further next year, there's talk that some donors may call on him not to run, or promote an independent candidacy by New York Mayor Michael Bloomberg.
It could go further. Pennsylvania Gov. Ed Rendell, a former chairman of the Democratic National Committee, told MSNBC in July that a primary challenge to Mr. Obama "is really possible," especially if he were to go back on his pledge to begin withdrawing U.S. troops from Afghanistan next year.
A disgruntled peace candidate such as former Vermont Gov. Howard Dean, Wisconsin Sen. Russ Feingold or Ohio Congressman Dennis Kucinich could find the prospect of rallying disgruntled leftists too tempting to resist. All three men forswear any interest in challenging Mr. Obama, yet it's noteworthy that Mr. Dean is stepping up his speaking schedule around the country after the election.
Mr. Dean blames Republicans for blindly opposing the president but says Democrats have some responsibility for voter anger. "There was a misunderstanding of the kind of change people wanted," he told the AP last month. "Democrats wanted policy change. Independents and Republicans wanted to change the way business was done in Washington, and that really hasn't happened."
In the aftermath of a disappointing 2010 midterm election, some liberals may follow the path of the tea party. Tom Streeter, the co-author of "Net Effect," a book on the lessons of Mr. Dean's Internet-driven 2004 presidential campaign, says tea party supporters "share with the Deaniacs a sense of being ignored by the powers that be, and an enthusiasm and energy in the feeling that they are striking back."
Progressives are still rankled by White House Press Secretary Robert Gibbs's attack in August on "the professional left" for not supporting Mr. Obama sufficiently. David Sirota, a prominent blogger, says that liberals feel "one hundred percent" taken for granted by the White House.
Most liberals I spoke to don't support a primary challenge. Jane Hamsher, founder of Firedoglake.com, a leading liberal blog, is less categorical. She blames Mr. Obama for "appropriating the progressive message, and then not governing as one." She has always backed "a diversity of voices in the primary process as a sign of a healthy democracy."
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4)The Brown Wall
By Randy Fardal
President Kennedy made one of his greatest speeches in Berlin. Some debate whether his German intonation was perfect -- "Ich bin ein Berliner" -- but the speech's venue certainly was perfect. Kennedy wanted a side-by-side comparison of limited government versus authoritarian government, and there was no better place to do that than in the artificially divided German city. The speech also employed powerful repetition: "Let them come to Berlin!"
Today, there are those who say that America has become more like the dysfunctional, oppressed East Berlin of 1963 than its efficient, free contemporary to the West. New York Times columnist Thomas Friedman complained recently that America no longer seems to be able to get anything done. He's not sure why, but he suspects it's because Americans eat too many hamburgers.
Let him come to California. There is no physical wall in California -- not even on the Mexican border -- but there is a virtual wall. It is a wall of time that separates the state into two eras: before Jerry Brown and after Jerry Brown. Perhaps the best place to straddle that stark, trans-temporal barrier is on Yerba Buena Island, in the San Francisco Bay. It is the midpoint of the five-mile-long San Francisco-Oakland Bay Bridge and the ideological equivalent of the Berlin Wall.
To the west is the magnificent double suspension bridge that was completed in 1936, just ten years after the California legislature created the Toll Bridge Authority to span the bay. When it was completed, it was the longest high-level steel bridge in the world and cost $77M, equivalent to $1.2B today.
To the east is the other half of the Bay Bridge, also built with part of that $77M. And next to the existing eastern span is a great illustration of what's gone wrong with America. No, it's not a McDonald's; it's an uncompleted structure that someday will replace the eastern part of the Bay Bridge that failed in a 1989 earthquake.
After the quake damage was repaired, California lawmakers and bureaucrats studied and debated the situation until they eventually recommended replacing the entire east span of the bridge in late 1996. At that time, the state government agency Caltrans estimated the cost to be less than a billion dollars. A few months later, the California legislature funded the project at $1.28B.
Then the professional control freaks intervened. Busybody eco-fascists demanded that the bridge carry public transit trains, even though that would have added billions to the cost, and BART already follows that same route under the bay below. Red tape burgeoned: At least twenty "key" federal, state, and local government agencies got involved, and countless more were consulted. Senators Feinstein and Boxer meddled, along with the Clinton White House.
After the new bridge design was deemed sufficiently sensitive to the needs of the gay, lesbian, feminist, African-American, Native American, illegal alien, homeless, stoner, and all other activist groups, the project was put out for bids. Cost estimates continued to balloon, from $1.56B in 1998 to $6.3B by 2007. Today, more than two decades after the earthquake, the project still is over three years from completion. And cynics warn of another big cost jump after the 2010 elections.
The American Dream
California once was the finest example of the American dream. Siberian immigrants pursuing game and furs were the first to arrive. Later, settlers came from Spain to farm and graze the land. In 1849, prospectors flooded into northern California in search of gold. A century ago, drillers came for the oil and filmmakers came for the abundant sunshine and natural outdoor movie sets. California defense contractors helped America win World War II by building ships and airplanes better and faster than ever before. High-tech companies flourished. And, as Thomas Wolfe described in The Right Stuff, many of America's early accomplishments in the space age happened in California.
There are few things that governments can do better than private enterprises. One of them is infrastructure development -- built by private contractors and funded by taxpayers. For the first six decades of the 20th century, Republicans controlled the California legislature and developed the infrastructure needed to accommodate the state's spectacular growth. The state was renowned for its excellent roads, water supplies, schools, and universities. The growth accelerated during the 1960s, as a Democrat legislature saw infrastructure funding as a means to greater power -- just as the Republicans probably had in prior decades.
The Anti-American Dream
But the accomplishments stopped in the 1970s with the election of Governor Jerry Brown. Mr. Brown expropriated the budget money that had been allocated for infrastructure -- much of it raised by motor fuel taxes -- and diverted it to his own leftist causes. Aqueducts and freeways were canceled, including some that already were under construction. Brown also blocked private construction of power plants. His anti-American Dream was this: If you don't build it; they won't come.
But they came anyway, and now Californians waste millions of gallons of fuel in traffic jams. Forbes named California the nation's worst state for drivers. During the time since Mr. Brown canceled most of the state's freeway construction, Californians travel more than twice as many miles, but the lane mileage has increased by less than ten percent.
Despite insane spending, education quality worsens. Water rates continue to rise, yet irresponsible eco-fascists demand that taxpayers spend billions of dollars to demolish existing reservoirs. This year, chief executives voted California the worst state in the nation for doing business.
As governor in the 1970s, Mr. Brown signed legislation that gave state employee unions the collective bargaining power that now is driving the state toward bankruptcy. (Incidentally, he is running for governor again this year.) Brown was the first in a series of leftist Democrat and moderate Republican governors that raised taxes while lowering the productivity of the state's employees by more than half. America's productivity during that period in the private sector grew by 43 percent (one percent average, compounded annually), a benchmark that makes the relative performance of the state's unionized employees even more dismal.
All told, it will take post-Brown California about 25 years to debate, design, and reconstruct the east half of the Bay Bridge. In 1926, it took pre-Brown California only ten years to debate, design, and construct both halves of the bridge, along with its approaches, a toll plaza, a transit terminal, and the world's largest diameter bore through Yerba Buena Island to connect the two spans. And they completed the project six months ahead of schedule, for a quarter of the cost of today's replacement span.
Yes, the new span is supposed to have about twice the useful life of the original -- 150 years versus 80 years -- and it probably will be safer, too. Therefore, some might argue that the replacement should cost more. On the other hand, today's design tools and construction equipment are many times better than they were eighty years ago, so others could argue even more persuasively that it really should cost less.
Tear Down This Wall!
The Berlin Wall of the past century physically divided a metropolis of efficiency and freedom from one of dysfunction and oppression. Similarly, in the 1970s, Governor Brown erected an ideological barrier that transported Californians from a land of efficiency and freedom, confining them to a land of dysfunction and authoritarianism.
Similar destructive policies have spread throughout America. Somewhere, the late President Kennedy must be warning us from the free side of that ideological wall, "There are some who can't understand why America no longer can get anything done...Let them come to Yerba Buena!"
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5)Palin v. Rove and the Battle for the GOP's Future
By Lee Cary
The battle for the future of the Republican Party will fully engage tomorrow morning in the wake of today's election. The opposing forces will be initially represented by two Republicans who hold no elected office: Sarah Palin and Karl Rove.
Palin represents the Tea Party Movement (TPM). Rove is the lead consigliere for the Republican bluebloods. Will their groups eventually consolidate their disparate agendas? The answer will determine the future of the GOP.
After eviscerating Christine O'Donnell's campaign, Rove challenged the TPM in Der Spiegel, where he was quoted as saying,
If you look underneath the surface of the Tea Party movement, on the other hand, you will find that it is not sophisticated. It's not like these people have read the economist Friedrich August von Hayek. Rather, these are people who are deeply concerned about what they see happening to their country, particularly when it comes to spending, deficits, debt and health care.
His knowledge of Tea Partiers' reading habits is flawed. And his explanation of people's concerns is merely an affirmation of the obvious. He's since tried to clarify and soften his implied criticism of Tea Partiers, but once you accuse others of being unsophisticated, it's hard to step back and reframe the discussion. Actually, it's impossible.
If we were inclined to think that Rove's words were merely casual comments voiced without forethought or broader intent, we lost that notion when, in a subsequent Telegraph (U.K.) article, he was quoted as saying,
With all due candour, appearing on your own reality show on the Discovery Channel, I am not certain how that fits in the American calculus of 'that helps me see you in the Oval Office' ... "There are high standards that the American people have for it [the presidency] and they require a certain level of gravitas, and they want to look at the candidate and say 'that candidate is doing things that gives me confidence that they are up to the most demanding job in the world'.
So where does this dissing of Palin's "gravitas" come from? Ronald Reagan once hosted the television program "Death Valley Days," pushing 20 Mule Team Borax cleaner. The liberal media questioned his gravitas through both terms. Rudy Giuliani is leading a troupe of motivational speakers across the nation, promising to teach time management, leadership, and several other "skills" -- almost everything except how to stir-fry. Fred Thompson is hawking reverse mortgages to seniors. Mike Huckabee is playing average guitar on his FOX show. None of these former presidential candidates is wading hip-deep today in the Gravitas River that Rove claims does not flow through Alaska. So what's up with Karl?
This assault on Palin comes, lest we forget, from the same advisor who either did not make the case or was unable to persuade Bush 43 to stand up and fight back against the relentless criticism from Democrats and the legacy media during six of Bush's eight years as president. Why the aggression now against Palin and the TPM?
Here's a possible explanation. "Bush's Brain," and the architect of the compassionate conservative strategy of George W's 2000 presidential campaign, is feeling the ground shift under his feet. As a consequence, the gyrocompass of his once-highly regarded political judgment is broken.
On Tuesday night, he'll have his signature whiteboard out charting numbers, but the Rove magic has faded some. He appears to be suffering from a severe case of Beltway Insideritis. It strikes when those who've been comfortable with their status as powerful political influencers lose some of their...gravitas...and become mere observers of the events they wish they could influence, but can't.
If that's the case, then Karl's just one among a cadre of certified conservative pundits, in the media and among the professional camp followers of the pols, who don't understand a grassroots movement they neither initiated nor can control. To them, the Tea Party People are upstart interlopers, like an uninvited third team that suddenly takes the field during the World Series and starts warming up. Wearing street clothes. With no gloves. Tossing a square ball.
All because We The People are a powerful force, able to eclipse the intentions of the entrenched George Soroses, Peggy Noonans, Paul Krugmans, and Karl Roves who man and woman the traditional partisan barricades while the unstoppable voters surge over and around them.
Come Wednesday morning, the battle for the GOP's future will begin in earnest.
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6)IDF intelligence chief: Israel's next war will see heavy casualties
In farewell meeting at the Knesset, Gen. Amos Yadlin says next conflict will hit Israel far harder than recent wars in Lebanon and Gaza - and hints for first the time at Israeli involvement in a 2007 strike on a nuclear plant in Syria.
By Jonathan Lis
In a final meeting at the Knesset, outgoing Military Intelligence chief Amos Yadlin warned on Tuesday that Israel's next war would be fought on several fronts - causing far heavier damage and casualties than other recent conflicts.
Israel was currently enjoying a period of relative quiet, Yadlin said. But its enemies were rearming and now posed the greatest threat to the country since the 1970s. A new war would be far deadlier than Israel's last two, relatively short, conficts in Lebanon in 2006 and Gaza in 2008-9.
Speaking at the final meeting of the Knesset Foreign Affairs and Defense Committee meeting,a head of his imminent departure after for years as commander of army intelligence.
Syria, particularly, posed a greated military obstacle to Israel than at any time in the past three decades, Yadlin said, having amassed advanced Russian-built antiaircraft missiles that seriously limited the operational freedom of the Israel Air Force.
While Syria had failed to acquire Russian S-300 missiles, seen by Israel as the greatest potential threat to its aircraft, Damascus had improved its defense systems enough to push the military balance with Israel "back to the 1970s", Yadlin said.
In 1973, Israel came close to defeat by a suprise Syrian attack before eventually emerging victorious in the Yom Kippur War.
Yadlin also hinted at Israel's involvement in attacking a Syrian nuclear facility in September 2007. That strike has been widely attributed to Israel, but the government has never officially taken responsibility for the operation.
The veteran soldier, who turns 60 next year, told the committee that during his position as MI chief he had contended with two enemy nuclear programs - apparently a reference to Iran and Syria.
"I've seen three defense ministers, two chiefs of staff and two prime ministers come and go, I've been through two wars and I've contended with two nuclear programs of enemy states," Yadlin said, summing up the last years of his career.
"I headed a group of thousands of people working 24 hours a day to collect information that the enemy was not volunteering, information that had to be extracted from difficult places," he added.
Yadlin also warned of a growing threat from the Iranian nuclear program, saying Iran now had enough highly enriched uranium to build a bomb.
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7)Report: Hezbollah getting ready to take over Lebanon
Al-Sharq al-Awsat newspaper says Shiite group, together with other elements, planning to take over Lebanon as international tribunal prepares to issue ruling on Hariri assassination
By Roee Nahmias
Hezbollah is gearing up to take over Lebanon ahead of an international tribunal's ruling on the assassination of former Lebanese Prime Minister Rafik Hariri. The London-based al-Sharq al-Awsat newspaper reported Tuesday that the Islamist group has been in contact with Shiite group Amal and pro-Syrian organizations in Lebanon in order to set a plan to seize control of the country after the court's ruling.
Reason for Concern
Lebanese official accuses Hezbollah of planning coup / Roee Nahmias
A source close to Hezbollah told the paper that the plan, which is focused on Beirut and south Lebanon, "Will end Saad Hariri and the Saudis' tenure in Lebanon for good." It is estimated that the UN court will place Hezbollah responsible for the Hariri's assassination.
On Monday, the Al Akhbar daily reported that "key element in the opposition (i.e Hezbollah) is holding an electronic discourse with Lebanese elements."
According to al-Sharq al-Awsat, the parties discussed the division of areas between the various forces in a way which will allow them to seize control of their respective areas when the time comes.
It was also reported that as part of preparations, Beirut will be divided into three military zones.
'No one can predict future'
A senior Hezbollah source refused to confirm or deny the report but said, "Everyone knows that the state in the Lebanon is a reason for concern, because all of the opportunities to 'solve the situation' have thus far failed.
"It would not be useful to discuss scenarios in the media, however no one can predict what will happen in the future," he added.
The Amal movement denied the report and said it was not in a position "to make plans for conflicts."
Last week, Hezbollah Secretary-General Hassan Nasrallah called on the Lebanese people not to cooperate with IJC clerks after they visited a gynecological practice near Beirut and were attacked by 150 women who snatched one of their cases containing investigation materials.
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8)Our World: The Age of Dissimulation
By CAROLINE B. GLICK
Rather than discuss the nature and threat of Islamic supremacism, the Western media, Western political leaders and academics deny it.
Years from now, when historians seek an overarching concept to define our times, they could do worse than refer to it as the Age of Dissimulation. Today our leading minds devote their energies and cognitive powers to figuring out new ways to hide reality from themselves and the general public.
Take US President Barack Obama’s senior counterterrorism advisor for example. On Sunday, John Brennan spoke on Fox News about the latest attempted Islamic terrorist attack on American soil.
Since the Obama administration has barred US officials from referring to terrorists as terrorists and effectively barred US officials from acknowledging that Islamic terrorists are Muslims, Brennan simply referred to the Islamic terrorists in Yemen who tried to send bombs to synagogues in Chicago as “individuals.”
Today, practically, the only individuals willing to speak honestly about who Islamic supremacists are and what they want are the Islamic supremacists themselves.
For instance, in an interview last week with Reuters, the Islamic supremacist Hamas movement’s “foreign minister” Mahmoud al- Zahar told the Christian West, “You do not live like human beings. You do not [even] live like animals. You accept homosexuality. And now you criticize us?”
Al-Zahar also made the case for Islamic feminism. As he put it, “We are the ones who respect women and honor women ... not you. You use women as an animal. She has one husband and hundreds of thousands of boyfriends. You don’t know who is the father of your sons, because of the way you respect women.”
Finally, al-Zahar claimed that Westerners have no right to question Islam or criticize it. In his words, “Is it a crime to Islamize the people? I am a Muslim living here according to our tradition. Why should I live under your tradition? We understand you very well. You are poor people. Morally poor. Don’t criticize us because of what we are.”
Al-Zahar can sleep easy. The citizens of the West have rarely heard anyone in any positions of power and influence criticize Islamic supremacists “because of what they are.”
In fact, the most remarkable thing about al- Zahar’s interview was not what he said but that Reuters decided to publish what he said. By letting its readers learn what al-Zahar thinks of them, Reuters inadvertently gave Westerners a glimpse at the simple truth its editors and their counterparts throughout the Western media routinely purge from coverage of current events.
Rather than discuss the nature and threat of Islamic supremacism, the Western media along with nearly all Western political leaders and academics deny and dissimulate. Rather than address the threat, they accept the Islamic line and blame Israel for everything bad that happens in the world.
THE ONE group of people that can almost be forgiven for this crime against reality is the non-Muslims who live under Islamic rule. On Sunday, we received a grim reminder of the plight of such minorities with the Islamic terror attack on Baghdad’s largest church, the Our Lady of Salvation Catholic church.
As some one hundred worshipers celebrated evening mass, Islamic terrorists stormed the church. According to an eyewitness account, they walked straight up to the priest administering the mass and executed him. The Muslim terrorists then took the Christian worshipers hostage.
As Iraqi military forces stormed the church under US military supervision, the Islamic terrorists threw grenades at the worshipers and detonated their bomb belts. By Monday, the death toll had reached 52.
It will be interesting to see how Catholic officials in Iraq and throughout the world respond to this attack. At the Vatican’s Synod on the status of Christians in the Middle East last month, Emmanuel III Delly, the head of the Chaldean Catholic Church in Iraq proclaimed, “The population of [Iraq] …is 24 million, all Muslims, with whom we live peacefully and freely…Christians are good with their fellow Muslims and in Iraq there is mutual respect among them.”
As the noted Islamic expert Robert Spencer wrote last week in Frontpage Magazine, Emmanuel has not always been so outspoken in his praise of Muslim Iraqis. In 2008, when US forces were still in charge in Iraq, Emmanuel made a statement that more accurately reflected the plight of his co-religionists.
Then he said, “Christians are killed, chased out of their homes before the very eyes of those who are supposed to be responsible for their safety…The situation in some parts of Iraq is disastrous and tragic. Life is a Calvary: there is no peace or security… Everyone is afraid of kidnapping.”
Christian clergy in Muslim countries are so terrified of Islamic aggression that they systematically hide the truth of their oppression and often distort their own theology to win the tolerance of supremacist Islamic authorities. Spencer noted that the head of that Vatican Synod, Archbishop Cyril Salim Bustros, who presently heads the Eastern Catholic church in the US, and in the past served as archbishop of Baalbek in his native Lebanon follows a similar pattern of dissimulation.
In Bustros’s case, his prevaricating goes beyond false depictions of the plight of Christians. In his bid to win the favor of his Islamic supremacist overlords in Hizbullah, Bustros has regularly engaged in theological revisionism.
At last month’s synod, Bustros repudiated the teachings of the Catholic Church’s Second Vatican Council and embraced the discredited supersessionist theology that Vatican II denounced. Bustros claimed that God’s covenant with the Jewish people and his promise to give us the Land of Israel “were nullified by Christ.”
In his view, “There is no longer a chosen people.”
Bustros did not simply assert a theological view at odds with the doctrine of the Catholic Church. He used his replacement theology to politically delegitimize Israel. Bustros said, “The theme of the Promised Land cannot be used as a basis to justify the return of the Jews to Israel and the expatriation of the Palestinians.” Bustros is set to return to Lebanon soon to serve as the archbishop of Beirut. The fact that he used his position as the head of the Vatican’s synod on the plight of Christians in the Middle East to earn him the protection of Hizbullah when he returns is made clear when his statements at the conference are compared to a speech he made in 2006, when he was still comfortably ensconced in the US.
As Spencer notes, in a speech Bustros made at St. Thomas University in Florida in 2006, Bustros minced no words about the plight of Christians in the Middle East. Addressing the Islamic precepts on relations with non-Muslims, Bustros said, “The doctrines of Islam dictate war against unbelievers….[T]he concept of nonviolence is absent from Muslim doctrine and practice….Peace in Islam is based on the surrender of all people to Islam and to God’s power based on Islamic law. They have to defend this peace of God even by force.”
FEAR OF Islamic massacres of Christians – like the one in Baghdad on Sunday – goes a long way towards explaining anti-Jewish and pro-Islamic pronouncements by Christian clergy in the Islamic world. But what can explain the West’s embrace of lies about Islam?
Why would people who do not live under the jackboot of the likes of Hizbullah, Hamas or their sister groups in places like Iraq obsequiously parrot untruths about Islamic history and theology and deny the very existence of Islamic supremacism?
The most notable case of such behavior in recent weeks came with the UN Educational, Science and Cultural Organization’s Executive Board’s declarations about Israel and Jewish history. At its October 21 meeting, the governing board of the UN agency charged with naming and preserving world heritage sites engaged in a shocking episode of historic revisionism in the service of Islamic supremacism.
UNESCO’s board issued five declarations regarding Israel. In addition to its routine condemnations of the security fence, Israeli sovereignty in Jerusalem and Israel’s refusal to give Hamas control over its border with Israel, UNESCO’s board asserted that the Tomb of the Patriarchs in Hebron, where Abraham, Issac, Jacob, Sarah, Rebecca and Leah are all buried, is a mosque. Rachel’s Tomb, where Rachel is buried, is also a mosque, according to UNESCO’s governing body.
It is not surprising that UNESCO’s Muslim members pushed for these declarations. Islam is a supersessionist religion. It claims that all the Jewish patriarchs and matriarchs as well as all the Jewish prophets, kings and judges were Muslim. It similarly claims that Jesus, Mary and the apostles were Muslims. It is standard Islamic practice to transform Jewish and Christian holy sites in lands conquered by Islam into mosques.
It is this Islamic practice that led Yasser Arafat to shock and disgust Yitzhak Rabin in July 1995 when he proclaimed that, “Rachel was my grandmother.”
Arafat’s statement was the first time that a Muslim leader in modern times claimed Rachel’s grave is a mosque. Arafat made his preposterous claim in the course of negotiations about the disposition of Rachel’s Tomb in Bethlehem. Due to its significance to Jews, Israel demanded full security control over the tomb. Arafat based his counter-claim on standard Islamic historical revisionism.
While Rabin rejected Arafat’s baseless assertion, last month UNESCO’s executive committee, whose membership includes France, Belgium, Spain, Japan, Poland, Germany, Greece, Haiti, Italy, the US and India accepted Arafat’s wholly false rendition of the historical record. In so doing, they collaborated with an Islamic attempt to eradicate Jewish history.
Why would they do this? They are not bishops who have to worry that their communities will be annihilated if they step out of line.
No doubt, fear of Islamic terrorism fuels some of their behavior. But fear can’t be the full explanation. Most Westerners have no contact with Muslims. And Islamic terrorist attacks in the West are not a daily occurrence.
The West’s newfound obsession with Islamophobia probably also has something to do with it. Western elites are terrified of being accused of racism. This is particularly true when – as is the case with Islamophobia – the charge is leveled on behalf of people who were oppressed in the past by Westerners.
But while fear of the charge of Islamophobia does play a role in Western kowtowing to Islamic supremacists, the West’s aversion to the perception that it is oppressing those it once oppressed fails to provide an adequate explanation for its willingness to collaborate with Islamic supremacist attempts to blot out Jewish history. The West’s history of oppressing Jews is far bloodier and longer than its record of oppressing Muslims.
In the end, there is only one credible explanation for the West’s willingness to lie about the nature and goals of Islamic supremacism. There is only one credible explanation for the West’s willingness to collaborate with Islamic supremacists as they purge the historical record of the Jewish roots of Western civilization. There is only one explanation for the West’s willingness to accept the Islamic supremacist assertion that Israel is to blame for Islamic aggression against Jews and Christians alike.
But if I mention anti-Semitism, I will be attacked as a paranoid Jew.
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