NEA: Squeeze The Children Not The Lemons!

Interview with Porter Stansberry and his "End of America" theme! (See 1 below.)
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Can Obama be cut off at the knees. Lasky thinks so.

The equation is simple: Obama is bad for America. Stopping Obama is good for America. Can Republicans orchestrate a program to do so, sell it and then get Americans to buy it in view of the fact that the press and media will continue portraying Republicans in a negative obstructionist light and certainly Obama and his sterling press officer will be in their crying foul at every chance.(See 2 below.)
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Sanctions beginning to impact Iran so Ahmadinejad guts subsidies. Will Iranians remain still? If not, will Obama do anything, can do anything to support Iranians should their protests be repressed by Iranian Guard thugs? Time will tell.(See 3 below.)
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Why Palestinians still suffer. (See 4 below.)
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A review of the book "The Mind of Jihad." (See 5 below.)
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Can lousy, dangerous teachers be flunked? Not so fast in New Jersey. Squeeze the children not the lemons! (See 6 below.)
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And then there are those pesky Stella Awards. Pays to be irresponsible.

If you think there is no free lunch how about an entire meal? (See 7 below.)


But then, Jeff Clark suggests Bernanke is gutless and is also charging the consumer, through inflation, for the free lunch he is giving bankers. (See 7a below.)
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Dick
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Goldsmith comment: We've conducted three exclusive interviews to discuss three important investment perspectives. The interviews are with Porter Stansberry, David Eifrig, and Matt Badiali.

We'll begin the series with Porter Stansberry discussing his End of America theme. We've asked Porter what problems America faces today, exactly what you can do to protect yourself, and what he would do to fix these problems. Plus, Porter reveals a never-before-heard prediction involving a freedom U.S. citizens will lose in the next two years.


Sean Goldsmith: Okay. So, Porter, you recently made the video, The End of America, and it's been getting huge media coverage. I know you just recently did a radio interview where it was broadcast to millions of people. So what spurred you to make this video?

Porter Stansberry: I've been working on these ideas pretty consistently since 2005 because I believe the growth of the debt in the U.S. economy were unsustainable and that it eventually was going to have very serious consequences for the American people. It was time to make the video because a lot of that debt which had been private is getting placed into government hands. So the public is bailing out a bunch of people who made bad choices when it came to debt, and the result will be a tremendous crisis in the value of our currency because the Federal Reserve and the Treasury have taken on more debts than they can possibly afford.

SG: So the government already isn't your biggest fan, and now you're saying it's bankrupt. Are you expecting any backlash for this?

PS: Certainly the government does not approve, in many cases, of the things we write, because we don't toe the line when it comes to the bailouts and companies like General Electric that have basically become the for-profit wing of the Obama administration. So I'm used to that kind of criticism and pressure from the government, and I expect that the bull's eye on me will get larger with the success of this video that I've produced.

SG: It's good you're at least getting the message out. So I know a lot of your work started years ago when you started looking at Fannie Mae, Freddie Mac, and GM and you noticed that these companies were in a lot of financial trouble. So how did you know that these companies were going to fail?

PS: Let's talk about another company just to introduce a new name. I think people are very familiar with my work on General Motors and Fannie and Freddie. But I'll point out to you a different thing I was following, which was in Las Vegas – the rise of MGM.

I can't remember whether it was in 2005 or 2006, but I went to Zurich with Steve Sjuggerud, and we were looking into supplying large amounts of bullion to our readers. We wanted to buy older European sovereign coins, and Europe was supposedly where we could find them.

So we were talking to the banks about buying these 100-year-old coins, and at the time, they were actually trading for less than melt because people thought they had no real value, so it was a good time to be in Zurich. And I happened to run into one of the guys who built the Mandalay Bay. He was a Las Vegas developer. The Mandalay Bay, as I'm sure you know, is a huge hotel complex at the end of the Strip, and it has a Four Seasons Hotel – it was a very, very big project.

He had just sold it to MGM for $8 billion, and he was in Zurich buying gold. I thought to myself, "Huh. That's pretty interesting." When a guy who's spent his life building Vegas cashes out and buys gold bullion in Zurich, that's a sign of something important going on in the economy, so I started looking into the deal where he had sold Mandalay Bay to MGM.

It turns that MGM bought Mandalay Bay at a price equivalent to $2 million per hotel room. So you start doing the math on this, and you're trying to figure out how could it possibly be profitable to buy a hotel for $2 million per hotel room.

SG: Seems rich.

PS: And, of course, as we know now, it was way too rich. It couldn't even be financed. The whole thing has fallen apart, and now MGM is selling itself off piece by piece to help repay these terrible debts. Treasure Island was sold about a year ago to another well-known Vegas entrepreneur, and the price of the sale was about $50,000 per hotel room. I don't think it takes a rocket scientist to realize companies that do things like buy hotel rooms for $2 million a piece and then sell them five years later for $50,000 a piece are not going to be good investments.

SG: Sure. So there was definitely an "Aha" moment with MGM. You met this Vegas guy in Zurich and you saw the moves he was making. Were there other "Aha" moments for your other big calls?

PS: Oh, there have been dozens of these moments. There's been madness all around. I know some people very well who haven't made a mortgage payment since January 2007, and they're still in their homes. The process of following these bad debts started when I saw people in businesses making decisions with their capital that didn't make any sense, that couldn't possibly be profitable.

I saw one deal, for example, back in the mid-2000s, where a developer was selling land on the Galapagos Islands. The Galapagos Islands are in the middle of the Pacific Ocean, about an eight-hour flight away from Ecuador. So Ecuador is about 10 hours from anywhere, and then Galapagos is another basically 10 hours from there. So this is pretty much the definition of the middle of nowhere.

Now keep in mind, it's also an ecological preserve. So you're not going to be allowed to build anything or dig a well or anything like that. And the developer was selling lots on Galapagos for $50,000 an acre. Unfortunately – I'm not making it up – that was a true real estate deal I saw happening at the time. I also saw people who had been dirt-poor farmers in Panama and had sold their 1,200-acre ranches for millions and millions of dollars, and I knew that none of these deals could possibly pay off.

So I started following the debt trail: Where's the money coming from? Who's creating it? And I found where all the money was going, and all the money was going basically into the investment banks and into Fannie Mae and Freddie Mac, and that made them ripe to fail. The problem now is that all those bad debts have been passed along to the balance sheet of the U.S. Treasury or the balance sheet of the Federal Reserve. They have not been repaid, they have not gone away, and now all those problems have become a critical cancer on the U.S. government itself.

SG: So you say the banks' bad debts have moved to the Treasury. Can you briefly explain how that process works? How the money actually moved?

PS: In many cases, it was simply a purchase. So for example, the Federal Reserve bought up all of Bear Stearns' bad mortgages. It's in a holding company called Maiden Lane, and you'll find it on the Fed's balance sheet. It's still there. Meanwhile, we know those mortgages that the Fed paid $1 for are now probably worth $0.10 to $0.15, so the Fed has an asset on its books that's stated at book value that's really worth almost nothing, and they're making up the difference by inflation, by printing a lot more money.

Likewise with the banks: They have, in some cases, given the banks large amounts of money, but the more diabolical thing they've done is they've structured the yield curve so that it's impossible for the banks not to make a fortune. They've done that by artificially holding interest rates very low on the short end of the curve, so banks can get money almost for free. Meanwhile, by printing more and more money, long-term rates keep going higher and higher and higher. All the banks have to do is borrow money from the Fed and pay almost nothing, and buy long-term assets like Treasury bonds that are yielding 3% and 4%, and they make the spread. So they get guaranteed, free money.

Of course, as everyone should know, money, to have any value, has to come from legitimate savings, and this printing and manufacturing of money isn't creating any real value in the economy at all. In fact, it's robbing all of us by the effects of inflation.
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2) Stopping Obama: A Republican Game Plan
By Ed Lasky

Barack Obama may have had a licking, but he keeps on ticking. How will the new Congress deal with a president who is relentless in his agenda to create a transformed America?

Barack Obama faces new challenges when the new Congress takes power on January 5. The House has turned red with a solid majority of 242 Republicans to 193 Democrats; the Senate is less blue, and most of the senators facing elections in 2012 are Democrats who hail from states that voted for Republicans in 2010. But people who fall for Obama's feints to the center (such as the faux pay freeze for federal employees or the tax deal he was forced into by Republican victories in November) have no one to blame but themselves.


Who says so? Barack Obama, through his rhetoric and actions over the last two years. Lest we forget, when he was forced to swallow the tax bill, he showed his true nature, lashing out at Republicans and saying that he was "itching for a fight on a wide range of issues."


Obama is on a mission to advance a far-left agenda, and he will use all means at his disposal to accomplish his goals. "The end justifies the means" is his modus operandi. The means may not be as apparent as they were when he was riding high with a sledgehammer in his hand; instead, he will rely on stealth. (Stanley Kurtz researched Obama's career as a state senator and nicknamed him "Senator Stealth" in recognition of the subtlety Obama resorted to when he was a lowly state senator.)


So how will Obama react when the new Congress is sworn in come January?


He has already received his marching orders from the Center for American Progress (CAP) -- called his "Ideas Factory" by TIME and his "Policy Font" by Bloomberg News. After the shellacking, the CAP released a report calling for Obama to rely on increased use of executive powers to push his agenda (and ignore the wishes of the American people and the role of the newly constituted Congress): "Executive orders, Rulemaking, Agency management, Convening and creating public-private partnerships, Commanding the armed forces, Diplomacy."


Michael Waldman, who worked for President Bill Clinton, cheers this muscular approach and writes that Obama has ample means to advance a progressive agenda:


... like all presidents, he has a bulging toolkit: executive orders, regulations, spending decisions, the bully pulpit and more. Obama has lots of power, and he should wield it ...


Consider energy policy, where congressional gridlock seems inevitable, with many conservatives insisting climate change is a myth and taxes are a nightmare. The Center's experts say Obama could impose a $2-per-barrel fee on imported oil with proceeds steered toward energy research. Or he could direct that half the federal auto fleet use alternative fuels by 2015, thus creating a new huge market for clean vehicles. And he could use the new financial consumer protection agency to introduce strong protections for consumers.
Waldman notes that Obama aides seeking a road map can find one written ten years ago by a professor who once worked for Bill Clinton when he faced a Congress that would oppose Clinton's plans. She counseled a turn towards using the bureaucracy to achieve "the full panoply of his domestic policy goals ... whether the subject was health care, welfare reform, tobacco, or guns." That professor is now our newest Supreme Court Justice, Elena Kagan. Was she chosen for her expansive view of presidential powers since legal questions regarding presidential authority may arise in the future?


We have seen already that Barack Obama is inclined to use all the powers and tricks he can to force his ideology on us: executive orders that favor his allies and donors, big Labor among them; presidential signing statements that signal the provisions of legislation he feels he is entitled to ignore (a tactic that has riled even his own Democrats); appointments of czars and czarinas; and repeated reliance on recess appointments to circumvent the Senate confirmation process, helping him to choose key officials who are ideologically compatible with him, albeit not with the American people (see the Justice and Labor Departments, the Environmental Protection Agency, the State Department and a raft of other agencies). The the list goes on and on.


John Fund believes that Obama 2.0 will rely on executive orders and rule-making to circumvent Congress. Fund sees signs of this approach in a new Labor Department plan to make life even more miserable for business through a variety of means not resorted to by previous administrations, Republican or Democrat. Conversely, monitoring of unions will be weakened by transferring the responsibility for whistle-blowing investigations from OSHA to a department charged with scrutinizing unions. Given the added workload from OSHA, union-monitoring (how union leaders spend workers' dues, for example) will inevitably be weakened.


Charles Krauthammer foresees that Obama will also exercise his control over the fourth branch of government -- the bureaucracy, the regulations, and the rules it lives to proliferate -- to power his agenda for the next two years. Obama the poker player has already tipped his hand. He is using bureaucratic edict to advance card check, bypassing a Congress that resisted union demands to bring about card check via legislation.


That strategy is tailor-made for Obama. Rules accumulate stealthily under the radar screen. They are incomprehensible, and most people's eyes glaze over them anyway. Even many of the politicians responsible for passing the Patient Protection and Affordable Care Act (aka ObamaCare) admitted that they did not bother to read the bill. Business groups might fish them out, but these will be portrayed as greedy people who want to exploit workers, despoil the environment, and plunder the nation to line their wallets.


The rules and regulations are going to come fast and furious


We are laboring under a massively expanding regulatory regime that has extended its tentacles into numberless nooks and crannies across our nation (and the playing field has widened with the takeover of two car companies, ObamaCare, and the new rules-laden Federal Regulations Bill). Big Brother has become Big Bully.


Obama focuses his regulatory imperialism on labor and environmental issues, defying the will of the people. Last year, he warned Congress that if it did not pass cap and trade, his EPA would bring it about via rules and regulations -- Congress be damned..


That was just a warm-up.


We have seen nothing yet.


So what is to be done?


Is there a strategy that can defeat the one drafted by Obama cronies at the Center for American Progress?


Push-back by Congress against Bureaucrats Gone Wild


Republicans now control the House. Speaker John Boehner can help control the flow of legislation through the House. But the Republican ascendancy bears more fruit than just the Speakership. All the various committees will now be headed by Republicans, and therein lies a powerful tool to stop Obama.


At Long Last, Oversight


There will now be broad oversight over the operations of the executive branch -- something that has been absent for the last two years. I have written numerous columns on the potential benefits that will come when Congressman Darrell Issa takes over the chairmanship of the House Oversight and Government Reform Committee. He has already tipped his hand that his inquiries regarding the operation of the government over the last two years will be broad and deep. Have all those billions flowing to green energy schemes been ways to reward political allies of the president and his party? Has stimulus money devoted to energy programs been wasted in shoddy work and fraudulent schemes, as they were in Obama's hometown of Chicago? Will Rep. Issa explore the federal response to the Deepwater Horizon drilling disaster?


The list is endless, as Al Kamen noted in a Washington Post column:


The possibilities are numerous. First, of course, might be Attorney General Eric Holder, for wanting to try alleged Sept. 11 terrorists in Manhattan, or for dropping charges against the New Black Panther Party of intimidating white poll-watchers and hypothetical white voters in an all-black Philadelphia precinct.


That could play to the tea party base, but maybe better to go deep on Environmental Protection Agency Administrator Lisa Jackson, for being mean to polluters and enacting cap-and-trade regulations before Congress actually passes a bill. That would please mining, oil and other heavy polluters.


Then there's former president Bill Clinton -- no executive privilege anymore -- and the White House, for a job offer to Rep. Joe Sestak (D) to get him out of the Pennsylvania primary. That might be immensely satisfying to Issa personally, since he's really steamed about it. (On the other hand, Clinton's polls are up these days, and pursuing this could seem too political and unstatesmanlike.)


Treasury Secretary Tim "Bailout" Geithner is another fine target, if you're looking to rev up anger over the management -- not the actual Bush-signed legislation -- of the TARP billions. Or the Energy or Transportation Departments, for their management of the stimulus money. Good ties to jobs and deficit-cutting in those areas.


For excellent waste, fraud and abuse, Issa might want to subpoena Secretary of State Hillary Rodham Clinton and CIA chief Leon Panetta about those pallets of cash shipped to Afghanistan to show Washington's deep respect for certain warlords -- and the presidential palace, where about half the money went.


Issa, a successful businessman before embarking on a career in politics, intends to efficiently deal with the myriad duties by creating new oversight sub-panels to investigate the TARP and stimulus programs. He is beefing up the panel to prepare for battle with the Obama administration.


Darrell Issa may hold hearings regarding Barack Obama's hostility toward inspectors general -- the unsung heroes of the federal government who watch our tax dollars. Issa seeks to give more power to these watchdogs, including granting them subpoena power to call witnesses as a way to overcome stonewalling -- a proposal that the Wall Street Journal considers overreach, but an idea that at least one former inspector general thinks has merit as a way to uncover fraud, waste, and abuse in government.


The fear that Darrell Issa evokes among the Democrats is palpable: they are angling to place their best and brightest as minority members of his committee to go toe-to-toe with him. According to The Hill, Democrat Elijah Cummings was chosen as the "ranking member of the Committee in an attempt to counter the aggressive incoming chairman Darrell Issa[,] who has vowed to hold hundreds of hearings and launch new investigations into the bank bailouts, the stimulus funds and possibly the healthcare [sic] overhaul." These hearings will go on for two years -- right up 'til the next election.


Bureaucrats should be called to explain the purpose of Obama's executive orders. Issa seems to have become the go-to guy for the media as journalists await Issa Inquisitions. Perhaps Issa will have some luck in widely publicizing how Obama has been using these orders to frustrate the will of the people. As Justice Brandeis wrote, sunlight is the best disinfectant.


The administration will try to shield itself by stonewalling and claiming executive privileges as well as invoking the specter of state secrets.


Issa and his chief of staff (who has been called the Democrats' worst nightmare) just might be the people who can tear down the wall by constant hammering.


Let the battle begin.


There will be other chairmen champing at the bit to find out what has been going on for the past two years (because we know the media won't -- with rare and reviled exceptions), and it will be up to them (and us) to expose the shenanigans, favoritism, and political payoffs that have flowed from the Oval Office. Perhaps, finally, the promise of transparency made and instantly forgotten by Barack Obama (most of his promises have an expiration date) will be fulfilled and enforced.


There are a lot of new sheriffs in town, and they all bear the title "chairman."


Trying to Slow the Obama Bulldozer


These committee chairmen can also help stop the Obama agenda. By calling hearings and issuing subpoenas for officials to testify, a chairman can tie up the working day for this czar or that czarina. One witness who might be hauled before House committees is Elizabeth Warren, who circumvented the Senate confirmation process when she was named as the "special adviser" to a brand new Consumer Financial Protection Agency. Her appointment elicited howls of protest from Republicans, given her left-wing views and the powers of this new agency. Now their howls will be heard.


By calling these officials to committee hearings, they will have less time and energy to make mischief. The left will howl about the oversight process being abused, but given the fact that Americans have objected to the rise of the czars, they may give some leeway to Republicans. Besides, the left has often indulged in exactly this sort of activity.


The Power of the Pen


More importantly, committees control the drafting and flow of legislation. Legislation has to work its way through committees before it can be voted on by the full House. Imagine pipes and handles on the faucets -- those handles will now be in Republican hands. Particularly important will be Republican control of the House Rules Committee, the traffic cop for legislation being considered. Those who make the rules can have home field advantage.


Legislation can be drafted and passed that tightens and clarifies legislative intent so that regulatory agencies are restrained from interpreting it in unintended ways. The EPA is on a mission that would harm many industries in America by using the Clean Air Act to give it a mandate to go to war against utilities, factories, and the coal mining industry. Senator Jay Rockefeller (D-WV) has been trying to draft legislation that would clarify the act and stop the EPA. Republicans will seize the issue in the new Congress.


Legislation that used to slide through Congress (greased by pork and bribes, such as the Cornhusker Kickback and the Louisiana Purchase) will be bogged down by Republicans. Nancy Pelosi was correct: Congress can be a swamp in one way. Bills can be sucked into the muck of committee work and never see the light of day.


Conversely, clever Republicans can turn the table on Democrats and Obama by proposing popular pieces of legislation and daring Democrats to vote them down or challenging Obama to veto them. Turnabout is fair play: the Republicans can then portray the Democrats as the party of no all the way up to November 2012. Among the first legislative steps should be repealing ObamaCare, even though it won't happen because of the Democratic majority in the Senate and Barack Obama in the White House. However, ObamaCare has grown even less popular as time has passed, and it is incumbent on Republicans to show their allegiance to the American people. But that should be just a start -- and Republican Congressman Connie Mack IV has a wish list of legislation he wants repealed in his quest to make the 112th the "Repeal Congress."


The Power of the Purse


Republicans control the House and will hopefully be more fiscally responsible than their predecessor Congress -- since this was a prime reason many of them won (a hopeful augury was the defeat of Harry Reid's omnibus spending bill). While deficits matter, so does the money given to particular agencies. This is a potent tool to restrain Obama's agenda.


A particularly clever GOP plan is to slice and dice appropriation bills into dozens of "bite-sized" pieces, making it easier to kill or slash unpopular agencies. The days of large omnibus appropriation bills that make it difficult to target specific programs and agencies may be coming to an end.


Of course, the House will focus on defending elements of ObamaCare. While repeal will be desirable and proposed as a public relations gambit, full repeal will be all but impossible as long as the Senate remains in Democrat hands and Obama is in the Oval Office. First and foremost, we can expect (if not demand) that Republicans work to deny the administration the money it needs to implement ObamaCare. Politico reports that a likely strategy would be "to choke off funding for pieces of the legislation that they find particularly troublesome, such as the requirement to buy insurance, changes to Medicare," and the hiring of an army of new IRS agents to harvest as many tax dollars as they can to fund ObamaCare. A host of other budget actions can be taken to weaken the most harmful aspects of ObamaCare.


Lisa Jackson has been on a crusade to interpret environmental legislation in a way that exceeds what congressmen intended when these laws were passed. Indeed, even Democrats have threatened legislation to roll back her carbon-killing crusade because they realize the baleful effects of her zealotry on jobs and the economy. Republicans will be writing the checks now, and this alone should have a chilling effect on Jackson's actions, not to mention those of other departments, which imperil America's recovery -- and a host of our personal freedoms.


Obama has enjoyed the congressional equivalent of the American Express card: a card with no spending limits. That card will be cut in two in a few weeks.


Congressman Paul Ryan, the incoming chair of the House Budget Committee, will put on his green eyeshades and pore over the budget with a cleaver in his hand -- not the scalpel that candidate Obama promised but has remained sheathed.


Eric Cantor has been soliciting ideas from us to save money (a public relations stunt, but hopefully a signal that the GOP has heard our voices).


New chairs ranging from Michigan's Fred Upton (Energy and Commerce Committee) to Michigan's Dave Camp (Ways and Means) swear that they have found religion and will use the power of the purse to restrain Barack Obama. Ileana Ros-Lehtinen will scrutinize the foreign aid budget and also the policies of President Obama when she assumes the chairmanship of the House Foreign Aid Affairs Committee. Chairman Spencer Bachus will do the same when he takes the gavel from Barney Frank and becomes the head of the Financial Services Committee. Bachus can -- irony of ironies! -- review the Dodd-Frank financial reform bill, as well as take on the powerhouses of Capitol Hill, Fannie Mae, and Freddie Mac, which are sucking up taxpayer dollars like a Dyson vacuum cleaner. The House-cleaning has just begun.


Tightening the Laws to Stop a Regulatory Tsunami


Congress has already shown that its hackles can be raised when the EPA has gone on the warpath (see the above comments regarding Democratic Senator Jay Rockefeller's efforts). But rules and regulations have been proliferating for decades. Thomas Jefferson foresaw the problem when he wrote the Declaration of Independence and justified rebellion against George III, who "created a multitude of new offices, and sent swarms of officers to harass our people, and eat out their substance." Ask any small businessman or professional if the situation is any better now. The multitude of rules and regulations induces sclerosis that prevents our economy from growing and our people from being employed.


But so it is -- and it threatens to worsen -- when Barack Obama gives free rein to bureaucrats. Republican congressmen along with sensible Democrats will sharpen legislation so regucrats will no longer trespass on legislative prerogatives and exceed the authority expressly granted to them. This will be easier now that Republicans -- backed up by millions of right-thinking Americans -- are ascending the barricades.


But Obama's people do provide jobs for government workers and opportunities for lobbyists and politicians to milk free enterprise for all it is worth by exploiting the power they have over business to extract donations from them. Lord Acton's aphorism is correct: power corrupts, and absolute power corrupts absolutely.


If Republican have read the tea leaves and the Tea Party correctly, they will appreciate that Americans are tired and scared of government overreach and in a rebellious mood.


The Congressional Review Act


As Ed Morrissey has noted, Senate Republicans may use a different tool to strike down regulations that are onerous and absurd:


When Republicans took control of the House in the midterms, they gained a powerful tool in combating regulatory excess with the power of the purse. Senate Republicans may use a different tool in their minority efforts to contain the EPA's efforts to impose climate-change regulation by fiat, a rarely-used law called the Congressional Review Act. Created in 1996, the law essentially allows Congress to veto regulatory changes created by executive branch agencies, and may become a sledgehammer in battling the Obama administration's regulatory innovations:


GOP lawmakers say they want to upend a host of Environmental Protection Agency rules by whatever means possible, including the Congressional Review Act, a rarely used legislative tool that allows Congress to essentially veto recently completed agency regulations.


The law lets sponsors skip Senate filibusters, meaning Republicans don't have to negotiate with Majority Leader Harry Reid (D-Nev.) for a floor vote or secure the tricky 60 votes typically needed to do anything in the Senate.


The House doesn't have the same expedited procedures, but it's assumed the GOP majority would have little trouble mustering the votes needed to pass disapproval resolutions.


A spate of contentious EPA rules that are soon to be finalized could be prime targets, including the national air quality standard for ozone, toxic emission limits for industrial boilers and a pending decision about whether to regulate coal ash as hazardous waste.

Obama and his team will strive to interpret regulations and rules in ways that circumvent the intent of Congress when the laws were passed. Republicans will have to be vigilant in uncovering and stopping these power-grabs.


We may already be witnessing the chilling effect (mentioned above) of the November elections on Obama's EPA: the administration has delayed a decision on whether to tighten limits on ground-level ozone. This was a major goal of Lisa Jackson's EPA -- a bit of zealotry that would have costs as high as $90 billion annually by 2020. Since the money belongs to other people, Jackson couldn't care less about the costs imposed on others -- but congressmen see those costs in terms of jobs and voters.


While Morrissey focuses on the EPA, the Congressional Review Act can be brought to bear on many other agencies to thwart Obama's agenda. Ivan Osorio at the American Spectator has expanded the horizons by writing of the many actions Barack Obama has taken to reward his big labor pals that can be subject to review and termination under the Congressional Review Act.


These are just a few of the tactics Republicans might use to derail the Obama express; undoubtedly some of the best and brightest are formulating new ones before the next Congress is seated in January. They had better work fast.


President Obama is addicted to the analogy that Republicans drove us into a ditch, that the keys should be taken away from them, and that if they want to come along for the ride, they can sit in the back of the bus. That was before November 2.


Republicans have been handed the keys to the House by voters. We have done our part. Now they should do theirs: follow our wishes and make our concerns their own. Or they might indeed have the keys taken away from them two years from now.


The clock is ticking.
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3)Ahmadinejad cuts subsidies, frees $20 bn for nuclear program, prestige boost

The $20 billion dollars which Western economists estimate are freed up by President Mahmoud Ahmadinejad's deep cuts of state subsidies will help cushion the country's nuclear program against the slowdown caused by the international sanctions imposed this year by the UN, the US and European countries,Iranian sources report. They will also make more cash available for the president's personal political plans.

Sunday, Dec. 20, as fuel prices surged 400-900 percent, together with bread and cooking oil, security forces and police flooded the streets of Tehran and other cities to ward off protests like the 2007 gas riots against the harsh austerity program measures Ahmadinejad has introduced to bypass international sanctions.

One of world's richest nations in oil, gas and other natural resources, has an impoverished population whose standard of living has plunged once again. Notwithstanding the denials of the rulers of the Islamic Republic, international sanctions have slashed national income and are pinching the economy.

In the outgoing year, oil revenues have declined by 40 percent, natural gas exports are facing growing obstacles and the Obama administration has managed to seriously curtail Iran's international financial and banking activities. Tehran faces price hikes for its imports and is driven to drop the prices of its exports.

Gas for cars is hardest hit, forcing Ahmadijead to order Iran's backward petrochemical industry to divert production to domestic consumption. The poor quality of its output has caused spreading pollution and severe wear and tear on vehicles. The air pollution in Iranian cities is so bad that the government had to admit it was the cause of 3,500 deaths in 2010 and it is rumored to have increased the prevalence of cancer in Iran's cities.

The price of gas at the fuel pump has increased fourfold (from 100 to 400 Tuman per liter) and is rationed to 50 liters a month per private vehicle. Every liter over this quota costs 700 Tuman (1,000 Tuman equal one dollar). This may sound cheap but not when compared with an average income of $400 per month and the vast distances many need to travel to work.

Heavy fuel for taxis, buses and trucks has increased nine-fold for a quota allocation and 23 times outside the quota. The prices of electricity and water have soared tenfold. Even medicines have suffered from slashed subsidies except for the most basic items and the price of breads has risen 400 percent overnight.
Except for the extremely rich, no class of society has escaped the president's whirling economic axe.

To quiet the grumbling, he ordered the equivalent of $82 paid out two months for every family member (of Iran's 75 million inhabitants) to help them overcome price increases. The government undertook to open bank accounts for citizens lacking them. Economists say this sum is ludicrous and by January 2011, families which tend to be large in Iran, will not be able to afford to buy bread.

Will the people rise up against these harsh measures and topple the government? Iranian experts note that the only times popular protests have ever posed a real threat to the regime were those sparked by economic distress, less over human rights or political freedoms. At the same time, this regime has forestalled extreme protests by mass detentions of likely political troublemakers which are still ongoing.

The clerics have pronounced would-be opponents of the new economic measures enemies of Islam. Known opposition leaders such as Mehdi Karrubi and Mir Hossein Mousavi live under house arrest and face worse penalties for any attempt to raise street protests against the regime. Exiled groups are too cut off to be effrective.
In addressing the nation Sunday, Ahmadinejad declared that the Iran's oil and gas resources belong to the Invisible Imam (Messiah), whose coming is imminent, and must not be squandered.

Two years ago, he sacked all the economists who warned him against reckless policies which have already plunged Iran into 20 percent inflation even before the new measures. He now claims he is saving $20 billion with his austerity program, but the ordinary citizen wonders what he is doing with the saved money. No answer will be forthcoming because the president forced the Majlis to forego supervision over this sum, giving him a free hand to spend it at will on his pet projects – arming Iran with a nuclear bomb and boosting his personal standing to a degree that no one dare challenge his authority.
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4Why the ‘Palestinians’ still suffer

By Steven Emerson



Life for the Arabs of Gaza has not improved since Israel's unilateral withdrawal in 2005. An objective analysis by one of the world's leading terror experts reveals why


A leading American Muslim charity routed millions of dollars illegally to Hamas. An international convoy and flotilla campaign to deliver aid to Palestinians supports the Hamas government in Gaza.

Their advocates insist they want nothing more than to ease the suffering of the Palestinian people.

A review of Hamas' actions since seizing control of Gaza in 2007, however, shows the group is creating suffering. In addition to refusing to renounce terror and recognize Israel as necessary first steps for peace negotiations, it has imposed a steadily intensifying clampdown on perceived morals crimes, beaten and killed alleged foes without trial and deliberately placed civilians in harm's way.

Recent reports blame Hamas for the collapse of reconciliation talks with the secular Fatah, which controls the West Bank, and describe a Hamas arms build-up featuring rockets capable of hitting Tel Aviv. While the United States continues to push for peace talks and propose a peaceful, two-state solution to the conflict, Hamas officials repeatedly have made it clear that an end to conflict is not part of their agenda.

In an interview last month with Reuters, Hamas leader Mahmoud Zahar said the Palestinian state must replace Israel and pledged to continue the "shaheed project" through violent jihad.

Human rights groups have catalogued many of the severe social restrictions Hamas enforces in Gaza. Most of the religious crackdowns in Gaza have targeted women.


Germany's Der Spiegel offered an example of the situation in a recent article about a water park that was shut down by arson in September. Hamas had issued warnings to the management after women were seen smoking water pipes at the Crazy Water Park. The park also drew scrutiny for games and other social activities in which men and women touched.

After a third episode, a group of more than two dozen masked men came, beat and tied up the guards and set the park on fire. "They keep people anxious and scared, and they silence any criticism of Hamas," Der Spiegel quoted an unnamed Palestinian observer. It described in-fighting among Hamas officials over the degree that Islamic law should be enforced.

The hard-liners seem to be prevailing. In May, Human Rights Watch Middle East and North Africa Executive Director Sarah Leah Whitson wrote to the Hamas interior ministry asking about morality rules and their enforcement by the mabahith, or security forces. She described a series of cases in which people were questioned, and sometimes physically abused, about extramarital relationships.

One man said an officer "blindfolded him, punched him in the chest, and beat him with a leather-wrapped bamboo cane on his buttocks for approximately 50 minutes, insisting that he confess to having had extramarital affairs," Whitson wrote. Another man described being detained on suspicion he engaged in a homosexual act, claiming that "he was subjected to torture, including falaka [foot whipping], and pressured to confess, as well as forced to reveal the names of other men and boys with whom he had had relations."

He was never charged.

In his interview with Reuters, Zahar defended the draconian approach. "Is it a crime to Islamize the people?" he asked. "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."

Zahar also lashed out at what he saw as immorality in the West. "You do not live like human beings," he said. "You do not [even] live like animals. You accept homosexuality. And now you criticize us?"

Journalist Khaled Abu Toameh has his own questions in response. "Women in the Hamas-controlled Gaza Strip have been facing a campaign of intimidation and terror that has forced many of them to sit at home and do nothing," he writes. But that has not generated any campaign of outrage in the international community or among rights groups and advocates.

"Has anyone dared to ask Hamas why sending women to carry out suicide bombings is all right, while it is not ok for them to walk alone on the beach or be seen in public with a man?" Abu Toameh writes. "Have 'pro-Palestinian' groups in North America and Europe ever thought of endorsing the case of these women by raising awareness to their plight?"

Those suspected of opposing Hamas or of secretly collaborating with Israel face a far harsher fate, though often without any judicial protections. An April 2009 Human Rights Watch report documented 30 extra-judicial killings in the previous year. Another 29 Gaza residents were killed by Hamas security or unidentified gunmen in the midst of the Israel's Operation Cast Lead incursion starting in December 2008, the Palestinian Centre for Human Rights claimed. Nine deaths resulted from severe beatings or torture.

The Human Rights Watch report detailed a series of incidents in which Hamas critics were shot in the legs. It quotes Hamas spokesman Taher al-Nunu justifying the brutality. "The government will show no mercy to collaborators who stab our people in the back, and they will be held accountable according to the law," al-Nunu said.

Hamas Prime Minister Ismail Haniya promised in 2006 "to promote the rule of law, the respect for the judiciary, the separation of powers, the respect for human rights, the equality among citizens; to fight all forms of discrimination; to protect public liberties, including the freedom of the press and opinion," the report notes. But that isn't happening.

Instead, Hamas has remained true to its goals as outlined in its 1988 charter: to establish a Muslim state based on Jihad, and to propagate the concept of Jihad in all aspects of life.

"When our enemies usurp some Islamic lands, Jihad becomes a duty binding on all Muslims," the charter says. "In order to face the usurpation of Palestine by the Jews, we have no escape from raising the banner of Jihad. This would require the propagation of Islamic consciousness among the masses on all local, Arab and Islamic levels. We must spread the spirit of Jihad among the [Islamic] Umma, clash with the enemies and join the ranks of the Jihad fighters. The 'ulama as well as educators and teachers, publicity and media men as well as the masses of the educated, and especially the youth and the elders of the Islamic Movements, must participate in this raising of consciousness. There is no escape from introducing fundamental changes in educational curricula in order to cleanse them from all vestiges of the ideological invasion which has been brought about by orientalists and missionaries."

Targeting Civilians

Israel launched Operation Cast Lead after Hamas lobbed thousands of rockets at Israeli towns in 2007-08. Those rocket attacks were war crimes, said Harvard Law Professor Alan Dershowitz. When Israel responds militarily, civilian casualties are unavoidable.

"This is the Hamas dual strategy: to kill and injure as many Israeli civilians as possible by firing rockets indiscriminately at Israeli civilian targets, and to provoke Israel to kill as many Palestinian civilians as possible to garner world sympathy," he wrote.

The Meir Amit Intelligence and Terrorism Information Center issued multiple reports proving Hamas used Gaza residents as human shields. Among the examples are reports showing rocket fire coming from Palestinian schools, in residential neighborhoods, and showing how similar locations and mosques were used as weapons storehouses. Some reports were backed up with video examples.

In January, Human Rights Watch categorically dismissed a Hamas argument that the rocket fire was aimed at military targets.

"Hamas can spin the story and deny the evidence, but hundreds of rockets rained down on civilian areas in Israel where no military installations were located," said Joe Stork, deputy Middle East director at Human Rights Watch. "Hamas leaders at the time indicated they were intending to harm civilians."

Since the fighting ended in early 2009, Hamas reportedly has re-armed through a vast network of smuggling tunnels along the Egypt-Gaza border. A senior Israeli intelligence official said Hamas has "rockets which are reaching 70 and 80 kilometers (45 to 50 miles) in the Gaza Strip ... so it means that we can sit here and talk and a rocket can fall on our heads within five minutes."

For investigating those tunnels, Hamas jailed British journalist Paul Martin earlier this year. Zahar declared him "guilty of being an agent for Israel."

Life for Palestinians in Gaza has not improved since Israel's unilateral withdrawal in 2005. Most western critics still blame Israel for this, pointing to the economic embargo imposed on the territory after Hamas took over and kidnapped Israeli soldier Gilad Shalit. But any fair examination shows much of the wound is self-inflicted. There is nothing in Hamas' short-term agenda that places improving the quality of life for its people above its stated goal of destroying Israel.
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5)The Mind of Jihad
By Laurent Murawiec
New York: Cambridge University Press, 2008. 342 pp. $83.99 ($25.99, paper)


Reviewed by Stephen Schwartz
Center for Islamic Pluralism


Murawiec (1951-2009), who at his death was a senior fellow at the Hudson Institute, was praised by his colleagues as a "big thinker." The Mind of Jihad, commissioned by the Office of Net Assessment of the U.S. Defense Department, represents an effort at a general, historical theory of present-day jihadism. Murawiec was not alone in seeing the influence of the Western radical left on contemporary jihadism. In addition, he found parallels between the current radical Islamist challenge and the millenarian extremism that erupted in Christian Europe during the late medieval and early Reformation periods.

"Sectarian eschatological movements tend to breed behaviors of a similar nature," he argued, and habits of war in Islam have "morphed in modern times into a compound of Gnostic cult, tribal outlook, Islamic jihad, and Bolshevik terror." But although Murawiec read widely, his catalogue of parallels between today's jihadists and past perpetrators of ideological violence seems tenuous in its linkages and emphases. For example, Raymond Ibrahim correctly asked in his review in The Weekly Standard,[1] "why does Murawiec insist on examining jihad[ists] through Christian paradigms and precedents when Islam itself affords plenty of both?" Ibrahim specifically mentioned the Kharijites, an early extremist branch of Islam, which terrorized fellow Muslims; Muslim moderates, in fact, often equate al-Qaeda and similar groups with the Kharijites. But the Kharijites merit only passing notice in The Mind of Jihad.

Murawiec argued for a link between the various Gnostic groups of antiquity, with their beliefs in esoteric doctrines revealed solely to an enlightened elite, with the modern Marxist movement. This line, between nearly all the revolutionary movements in the histories of Christendom, Islam, and modern Europe, smacks more of popular conspiratorial volumes, such as The DaVinci Code, than a serious treatment of jihad.

The Mind of Jihad brings together many complex strands of history but in an excessively synthetic manner that provokes more questions than answers. It is a tribute to its author's dedication and depth of research, but his focus on social radicalism as a universal problem, rather than on Islamist ideology as a particular element of Muslim life today, makes this book more a curiosity than a reliable contribution. In his fascination with the Gnostics, Murawiec appears to have been carried away with a "secret" interpretation of recent history, much of which, even when it appears obscured, lies in plain sight.

[1] Jan. 26, 2009.
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6) Flunking out bad teachers
By Julie O'ConnorFollow


There are many teachers who inspire students. And then there’s Curtis Robinson, the sort of teacher who inspires tenure reformers.

During his 18 years teaching disabled students in Paterson, Robinson hurled classroom chairs, punched a boy in the chest for failing to do his homework and shoved another kid against a blackboard until he cried, staff and students said.

Robinson still insists he had a gift with children. But he admits that using cocaine after school early in his career sometimes made him “preoccupied.”

“Immediately after work, I’d have a line or two,” he told The Record in August. “I been teaching so long, you can function with your eyes closed.”

That’s probably true, thanks to the extensive job protections for teachers in New Jersey. Because Robinson was tenured, it took more than four years of legal proceedings to fire him, costing the state more than $100,000 in legal costs.

Throughout the case, the district had to hire a substitute for at least $120,000 and pay Robinson $283,864 in wages — even after the state Division of Youth and Family Services concluded he’d physically abused children.

“We could have hired 10 teachers for the cost of prosecuting that case,” said James Smith, who investigated Robinson for the district.

At least Robinson was ultimately canned and lost his pension. In the Orange school district, another tenured teacher who got into physical fights with staff and students, cursed at parents and publicly used the “N” word to describe a colleague was never fired — just suspended for 30 days without pay.

We’ve all heard some bad, bad teacher stories. After three years and one day on the job, teachers get tenure virtually automatically in New Jersey, according to the National Council on Teacher Quality, a nonpartisan research group. Tenure wasn’t originally intended to provide lifetime jobs. Yet over time, the process of getting rid of teachers has become so lengthy and costly that school officials rarely even attempt it, except in the most egregious cases.

But now tenure is in tumult. The historic power of the New Jersey Education Association, the strongest special interest group in the state, is being dismantled by an aggressive governor. Chris Christie has said he wants to strip tenure from ineffective teachers, and a recent poll shows public opinion firmly on his side. State Sen. Teresa Ruiz (D-Essex) is drafting a bill she hopes will do just that.

New Jersey currently doesn’t even consider student performance when deciding whether to grant novice teachers tenure, the NCTQ found.

“All we look at is, ‘Are you still breathing?’ ” Christie remarked in September.

Tenure is being weakened in districts across the country, momentum is building among education reformers and change seems likely — but the question is how.

Tenure then and now

New Jersey was the first state to pass tenure legislation in 1909, as a protection for public school teachers against unfair firings.

Yet until the women’s suffrage movement of the 1920s, female teachers across the country could still lose their jobs for getting married or pregnant, or infractions like dancing, loitering in ice cream parlors or — good heavens — wearing pants. That led suffragists like Charl Williams, who headed the National Education Association starting in 1921, to advocate for increased tenure protection.

Today, the situation is different. Dozens of federal and state laws that didn’t exist when tenure was created now protect teachers and everyone else from being fired arbitrarily. Reformers argue teachers no longer need any special protection.

Both nationally and in New Jersey, most people support tenure reform. Below are questions from a Time Magazine survey of 1,000 Americans on public education, conducted in August:

Do you support or oppose tenure, the practice of guaranteeing teachers lifetime job security after they have worked for a certain amount of time?

• Support tenure: 28 percent
• Oppose tenure: 66 percent
• No answer/don’t know: 6 percent

Should teachers’ evaluations be based, in part, on their students’ progress on standardized tests?

• Yes: 64 percent
• No: 31 percent
• No answer/don’t know: 4 percent

Do you support or oppose “merit pay,” the concept of paying teachers according to their effectiveness?

• Support merit pay: 71 percent
• Oppose merit pay: 23 percent
• No answer/don’t know: 6 percent

Which view comes closer to your own: “Teachers unions help make schools better” or “Teachers unions are an obstacle that keeps schools from getting better”?

• Teachers unions help make schools better: 35 percent
• Teachers unions are an obstacle that keeps schools from getting better: 50 percent
• No answer/don’t know: 15 percent

Most New Jerseyans think tenure prevents bad teachers from being fired, according to a Rutgers-Eagleton Poll released in November:

Do you believe teacher tenure is a necessary job protection or a barrier to eliminating bad teachers?

• Necessary job protection: 22 percent
• Barrier to eliminating bad teachers: 70 percent
• Don’t know: 8 percent


But the state’s largest teachers union remains staunchly opposed to eliminating tenure. Leaders at the NJEA say they don’t want teachers to be fired because of their political views, or the whims of parents or administrators. They say tenure keeps districts from firing expensive veterans to make way for cheaper hires.

Getting rid of the lemons

Because it’s so hard to get rid of bad teachers, many are just shuffled between districts in what’s been dubbed “the dance of the lemons.” The average U.S. school district gets rid of only about 1 percent of tenured teachers each year. In New Jersey, the average tenure case drags on for more than a year and costs districts more than $100,000, and it’s rarely about ineffective classroom performance.

Money-strapped districts are far more likely to go after teachers who don’t show up for work or behave abusively, said Smith, the tenure investigator for Paterson. It’s often a tough choice, he said: “Do they eliminate an afterschool athletic program or tutoring in order to pay for prosecution of teachers?”

Teachers themselves say they’re frustrated with the process. More than half believe it’s too difficult to weed out ineffective instructors who have tenure, and nearly half say they personally know such a teacher, according to a survey by the Education Sector, a nonpartisan think tank.

A call for reform

The NJEA wants to keep tenure and simply streamline the dismissal process. That doesn’t sit well with reform advocates such as Dan Weisberg from the New Teacher Project, a nonprofit group founded by former Washington, D.C., schools chancellor Michelle Rhee. He’d rather just get rid of tenure as it now exists.

Tenure could expire after two years, as it does in some other states, Weisberg said. Teachers found ineffective two years in a row could be dismissed after just a one-day hearing, in which someone outside the district reviews the decision to make sure the firing wasn’t improper.

“Tenure is only for those whose performance is rated as great or good,” Weisberg said.

Whether or not we still call this tenure is just semantics. The most important thing is that districts are able to get rid of bad teachers.

Ruiz said she likes the idea of making tenure renewable, and dependent on teacher performance. In the bill she’s drafting, she also wants to lengthen the time it takes to earn tenure and ease the dismissal process.

But changing the law wouldn’t matter much if teacher renewals were automatic, experts say. Districts must also better evaluate teachers by using student test scores and classroom observations, and hold principals accountable.

Grading the teachers

New Jersey drags behind many other states in its ability to evaluate teachers based on student scores. Until there’s a statewide system to do that, Ruiz said districts should improve their own policies. She hopes to establish a panel in every district that would hire and evaluate teachers.

There’s little hope of improving evaluations when tenure still places such an onerous burden of proof on districts to fire people, said Brian Osborne, superintendent of schools for the South Orange and Maplewood district. The mountains of documents, the expense — it creates a chilling effect on administrators.

“It means people get away with too much,” he said. “What district wants to go through the entire process of mounting a case only to lose? Every time that happens, it tells everyone in the system that what they’re supposed to do is tolerate mediocre performance.”

Meanwhile, in districts across the state, reformers are chafing against tenure because it stops them from doing the one thing they are certain will help — getting rid of terrible teachers. Shavar Jeffries, president of the school board in Newark, calls tenure “an albatross on our ability to reform our district.” It makes it really tough to do anything about the “substantial” number of underperforming teachers and principals in the city’s schools, he said.

“When you have tenure, it locks in a large proportion of folks who should not be in front of our kids,” he said. “It does frustrate me, absolutely.”
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7)
STELLA AWARDS:


It's time again for the annual 'Stella Awards'! For those unfamiliar with these awards, they are named after 81-year-old Stella Liebeck who spilled hot coffee on herself and successfully sued the McDonald's in New Mexico , where she purchased coffee. You remember, she took the lid off the coffee and put it between her knees while she was driving. Who would ever think one could get burned doing that, right? That's right; these are awards for the most outlandish lawsuits and verdicts in the U.S. You know, the kinds of cases that make you scratch your head. So keep your head scratcher handy.


Here are the Stellas for this past year -- 2010:


*SEVENTH PLACE*

Kathleen Robertson of Austin, Texas was awarded $80,000 by a jury of her peers after breaking her ankle tripping over a toddler who was running inside a furniture store. The store owners were understandably surprised by the verdict, considering the running toddler was her own son

Start scratching!


* SIXTH PLACE *

Carl Truman, 19, of Los Angeles , California won $74,000 plus medical expenses when his neighbor ran over his hand with a Honda Accord. Truman apparently didn't notice there was someone at the wheel of the car when he was trying to steal his neighbor's hubcaps.

Scratch some more...


* FIFTH PLACE *

Terrence Dickson, of Bristol , Pennsylvania , who was leaving a house he had just burglarized by way of the garage. Unfortunately for Dickson, the automatic garage door opener malfunctioned and he could not get the garage door to open. Worse, he couldn't re-enter the house because the door connecting the garage to the house locked when Dickson pulled it shut. Forced to sit for eight, count 'em, EIGHT days and survive on a case of Pepsi and a large bag of dry dog food, he sued the homeowner's insurance company claiming undue mental Anguish. Amazingly, the jury said the insurance company must pay Dickson $500,000 for his anguish. We should all have this kind of anguish Keep scratching. There are more...

Double hand scratching after this one..


*FOURTH PLACE*

Jerry Williams, of Little Rock, Arkansas, garnered 4th Place in the Stella's when he was awarded $14,500 plus medical expenses after being bitten on the butt by his next door neighbor's beagle - even though the beagle was on a chain in its owner's fenced yard. Williams did not get as much as he asked for because the jury believed the beagle might have been provoked at the time of the butt bite because Williams had climbed over the fence into the yard and repeatedly shot the dog with a pellet gun.

Pick a new spot to scratch, you're getting a bald spot..


* THIRD PLACE *

Amber Carson of Lancaster, Pennsylvania because a jury ordered a Philadelphia restaurant to pay her $113,500 after she slipped on a spilled soft drink and broke her tailbone. The reason the soft drink was on the floor: Ms. Carson had thrown it at her boyfriend 30 seconds earlier during an argument. What ever happened to people being responsible for their own actions?

Only two more so ease up on the scratching...


*SECOND PLACE*

Kara Walton, of Claymont , Delaware sued the owner of a night club in a nearby city because she fell from the bathroom window to the floor, knocking out her two front teeth. Even though Ms. Walton was trying to sneak through the ladies room window to avoid paying the $3.50 cover charge, the jury said the night club had to pay her $12,000....oh, yeah, plus dental expenses. Go figure.


Ok. Here we go!!


* FIRST PLACE *

This year's runaway First Place Stella Award winner was: Mrs. Merv Grazinski, of Oklahoma City, Oklahoma, who purchased new 32-foot Winnebago motor home. On her first trip home, from an OU football game, having driven on to the freeway, she set the cruise control at 70 mph and calmly left the driver's seat to go to the back of the Winnebago to make herself a sandwich. Not surprisingly, the motor home left the freeway, crashed and overturned. Also not surprisingly, Mrs. Grazinski sued Winnebago for not putting in the owner's manual that she couldn't actually leave the driver's seat while the cruise control was set. The Oklahoma jury awarded her, are you sitting down?
$1,750,000 PLUS a new motor home. Winnebago actually changed their manuals as a result of this suit, just in case Mrs. Grazinski has any relatives who might also buy a motor home.

If you think the court system is out of control, be sure to pass this one on.



7a)Bernanke Doesn't Have the Guts to Do This
By Jeff Clark


Dear Federal Reserve Board Chairman Ben Bernanke,

If you want to lower long-term interest rates, you need to raise short-term rates.

I know it sounds crazy. After all, how can raising rates lead to lower rates? But it worked before. And if you have the guts to do it, it'll work now, too. Plus, you'll derail the currency crisis headed our way.

Let me explain…


You've lowered the Fed Funds rate to 0%, and you've promised the markets you'll keep it there for an extended period. Everybody knows your hand. Bankers know they can borrow from the Fed for free, turn around, and buy U.S. government 10-year notes at 3.3%.

That's a huge spread. It's probably the biggest percentage difference in the history of the Fed.

Banks are making a fortune.

Of course, that's the idea, right? Give the banks free money. Let them fund our deficit at a record spread. The earnings will paper over all the losses from the silly mortgage mess. And the banks' losses will eventually be absorbed by the U.S. taxpayer.

What a great scam.

The problem is, the public now knows you're scamming them. They know you're in the pockets of the fraudulent bankers. They know they're paying more for bread and meat and milk because you're printing money to bail out your buddies in the Hamptons. They know your quivering lip during the 60 Minutes interview wasn't the result of an air conditioner running full blast.

Ben, the jig is up. Nobody has any confidence in your ability to steer clear of the iceberg. So if you want to avoid going down like the Titanic, here's my advice to you…

Raise short-term interest rates.

Raising rates will attract short-term capital into the country. It'll boost the dollar and deflate some of the bubbles forming in different sectors of our economy.

Most important, though, is raising rates will give the bankers notice that the free lunch is over. No longer will they be able to borrow money for free and lend it back to the Fed at 3.3%. There will be a cost to their trade. So they'll look for ways to increase their long-term returns. That means they'll be more willing to lend to the homebuyers and the small business people – all the folks they've turned down for loans because 10-year Treasurys at 3.3% is a better bet. The easy money will actually work its way into the economy.

We know it'll happen because it worked before… in 1994.

Fed Chairman Alan Greenspan warned bankers in late 1993 that if they didn't start lending to the private sector, instead of borrowing from the Fed at 2% and lending it back to the Treasury by purchasing 10-year notes at 5%, he'd raise short-term interest rates.

No one believed him. After all, the economy was soft and economic activity was sluggish. Everyone figured raising rates in that environment would send the country into a recession.

But the Fed's easy money policy wasn't making it into the economy. So the benefit of low interest rates wasn't trickling down to mom and pop. It was stuck in the pockets of the banks. The difference between short-term rates and long-term rates was historically high.

In February 1994, the Fed raised short-term rates. The market was shocked. Stocks and bonds both sold off hard on the news. And Greenspan was painted as a villain whose policies would destroy the economy.

But… funny thing, long-term interest rates started to fall almost immediately.

Banks' cost of funds had increased. The only way to maintain their spreads was to lend to private-market customers, to mom and pop. Banks made the loans. The economy expanded. And long-term rates declined.

Ben, right now the yield curve (the difference between short-term and long-term interest rates) is as steep as it's ever been. Banks are taking advantage of it by borrowing at 0% and lending back to the Treasury for 3.3%. If you genuinely want to lower long-term interest rates, take a page from the Greenspan playbook and raise short-term rates.

Somehow I don't think you have the guts to do it.

Best regards,

Jeff Clark
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