Obama's strategy: Let's break the bank and while I am doing it put the onus on the Republicans to cut entitlements so I can blame them and get re-elected in 2012.
It will backfire if the Republicans play their cards right, act wisely and professionally and do what is right by the nation.
Americans will make sacrifices for the good of the nation when they are challenged and it is properly explained. (See 1 below)
Meanwhile, Jeff Allen believes we are at a tipping point. I concur that we have a future fiscal crisis staring us in the face but I believe Allen is mistaken about the way he characterizes the cut of some $100 billion. It is set against the remaining months of the 2010 budget not the one (ending Oct. 2011) Obama just proposed.
Nevertheless, Allen is right about the thrust of his concern. We are heading down the wrong road if we continue to allow Obama's concept of spending to obtain. (See 1a below.)
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It ain't over til it's over and Barry Rubin and I seem to be on the same page. (See 2 below.)
However, In Iran, as in Bogart's "Casablanca:" "It's Just The Same old Story."
(See 2a below.)
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Israel just selected its new Chief of Staff of the IDF. Amir Oren has doubts and does not think Gantz has what it takes in terms of the political issues and challenges he will face. (See 3 below.)
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Mixed messages send the wrong message. (See 4 below)
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Kissinger on Rumsfeld's new book. I just ordered it and look forward to reading it.
Currently reading a biography about Humphrey Bogart. Very enjoyable. They do not make actors like that any more. (See 5 below.)
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Beinart pleased that we finally chose ideals over national interest. (See 6 below.)
Then the other side and from, of all places, a writer for Newsweek! (See 6a below.)
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Mort Zuckerman remains concerned about lack of employment.
He pretty much writes what I have been writing. The math just does not add up in favor of a rapid decline in unemployment. (See 7 below.)
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Update on Egyptian energy supply. (See 8 below.)
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I have a board meeting out of town Wednesday and upon my return, Kim Strassel is flying in Sunday to speak on Monday evening, so I doubt I will be in a position to send out any more memos for a few days.
Kim is one of my favorite op ed writers for the WSJ. The others are Dan Henninger and Bret Stephens.
Kim joined the 'Journal" in '94, after graduating from Princeton and is a rising star with that organization. She was elected to the Editorial Board in 2005.
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Dick
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1) White House: Budget Deficit to Soar to $1.65 Trillion This Year
President Barack Obama sent Congress a $3.73 trillion budget Monday that holds out the prospect of eventually bringing deficits under control through spending cuts and tax increases. But the fiscal blueprint largely ignores his own deficit commission's plea to slash huge entitlement programs like Social Security and Medicare.
Obama called his new budget one of "tough choices and sacrifices," but most of those cuts would be held off until after the end of his first term.
Overall, Obama proposed trimming the deficits by $1.1 trillion over a decade although his changes would actually add to the deficits this year and next. Obama is projecting the deficit will hit an all-time high of $1.65 trillion this year and then drop sharply to $1.1 trillion in 2012, with an expected improvement in the economy and as reductions in Social Security withholding and business taxes expire.
Obama's 2012 budget would actually add $8 billion to the projected deficit for that year because the bulk of the savings he will achieve through a freeze in many domestic programs would be devoted to increased spending in areas Obama considers priorities, such as education, clean energy and high-speed rail.
"We have more work to do to live up to our promise by repairing the damage this brutal recession has inflicted on our people," Obama said.
Republicans, who took control of the House in the November elections and picked up seats in the Senate in part because of voter anger over the soaring deficits, called Obama's efforts too timid. Lawmakers are set to begin debating on Tuesday $61 billion in cuts for the remaining seven months of fiscal 2011.
"Presidents are elected to lead and address big challenges," said Republican House Budget Committee Chairman Paul Ryan of Wisconsin. "The big challenge facing our economy today and our country tomorrow is the debt crisis. He's making it worse, not better."
Obama's deficit commission made a host of painful recommendations including raising the Social Security retirement age and curbing benefit increases, eliminating or sharply scaling back popular tax breaks, reforming a financially unsound Medicare program and almost doubling the federal tax on gasoline. Obama included none of these proposals in his new budget. The deficit panel called for savings by making these politically tough choices of $4 trillion over a decade, four-times the savings that Obama is projecting.
The Obama budget plan, which is certain to be changed by Congress, would spend $3.73 trillion in the 2012 budget year, which begins Oct. 1, a reduction of 2.4 percent from what Obama projects will be spent in the current budget year.
Of the $1.1 trillion in deficit savings that Obama is projecting over the next 10 years, two-thirds would come from spending cuts including $400 billion in savings from a five-year freeze on domestic programs that account for one-tenth of the budget. The other one-third of deficit savings would come from tax increases such as limiting the tax deductions high income taxpayers, a proposal that Obama put forward last year only to have it rejected by Congress. Obama also proposes raising taxes on energy companies.
The president's projected $1.65 trillion deficit for the current year would be the highest dollar amount ever, surpassing the $1.41 trillion deficit hit in 2009. It would also represent 10.8 percent of the total economy, the highest level since the deficit stood at 21.5 percent of gross domestic product in 1945, reflecting heavy borrowing to fight World War II.
The president's 2012 budget projects that the deficits will total $7.21 trillion over the next decade with the imbalances never falling lower below $607 billion. Even then that would exceed the deficit record before Obama took office of $458.6 billion in 2008, President George W. Bush's last year in office.
Administration officials project that the deficits will be trimmed to 3.2 percent of GDP by 2015 — one-third of the projected 2011 imbalance and a level they said would not harm the economy.
However, to achieve the lower deficits required the administration to assume the costs of the wars in Iraq and Afghanistan would fall to $50 billion annually after 2012. The budget also fails to pay for the cost of keeping payments for doctors after 2013. Obama's budget also makes assumptions about economic growth that are more optimistic that many private economists.
While cutting many programs, the new budget does propose spending increases in selected areas of education, biomedical research, energy efficiency, high-speed rail and other areas Obama judged to be important to the country's future competitiveness in a global economy.
In the energy area, the budget would support Obama's goal of putting 1 million electric vehicles on the road by 2015 and doubling the nation's share of electricity from clean energy sources by 2035.
The budget proposes program terminations or spending reductions for more than 200 programs at an estimated savings of $33 billion in 2012. Programs targeted for large cuts included Community Development Block Grants, trimmed by $300 million. A program that helps pay heating bills for low-income families would be cut in half for a savings of $2.5 billion. Another program supporting environmental restoration of the Great Lakes would be reduced by one-fourth for $125 million in savings.
The biggest tax hike would come from a proposal to trim the deductions the wealthiest Americans can claim for charitable contributions, mortgage interest and state and local tax payments. The administration proposed this tax hike last year but it was a nonstarter in Congress.
Obama's budget would also raise $46 billion over 10 years by eliminating various tax breaks to oil, gas and coal companies.
While Obama's budget avoided painful choices in entitlement programs, it did call for $78 billion in reductions to Pentagon spending over five years. That would be achieved by trimming what it views as unnecessary weapons programs such as the C-17 aircraft, the alternative engine for the Joint Strike Fighter aircraft and the Marine expeditionary vehicle.
Administration officials said that the savings from limiting tax deductions for high income taxpayers would be used to keep the Alternative Minimum Tax from hitting more middle-class families over the next two years.
The budget proposes $1 billion in cuts in grants for large airports, almost $1 billion in reduced support to states for water treatment plants and other infrastructure programs and savings from consolidating public health programs run by the Centers for Disease Control and various U.S. Forest Service programs.
The administration also proposed saving $100 billion from Pell Grants and other higher education programs over a decade through belt-tightening with the savings used to keep the maximum college financial aid award at $5,550.
The surge in deficits reflect the deep 2007-2009 recession, the worst since the Great Depression, which cut into government tax revenues as millions were thrown out of work and prompted massive government spending to jump-start economic growth and stabilize the banking system.
Republicans point to still-elevated unemployment levels and charge the stimulus programs were a failure. The administration contends the spending was needed to keep the country from falling into an even deeper slump.
1a)A Tipping Point Is Nearing
By Jeff T. Allen
We are facing a tipping point. There will soon be a crisis affecting US citizens beyond any experienced since the Great Depression. And it may happen within the year. This past week three awful developments put a dagger into the hope for a growth-led recovery, which held promise of possibly averting a debt and currency implosion crushing the American economy.
The first was a little-noticed, but tragic, series of events in the newly elected House of Representatives. The speaker, Mr. Boehner, had given the task of fashioning the majority's spending cut agenda to Representative Paul Ryan (R-Wisconsin), a rising conservative star representing the vocal wing of fiscal conservatives in the House. Promising to cut $100 billion of government spending, Mr. Boehner spoke before the elections of the urgency to produce immediately when Republicans took control.
Out of a $3.8 trillion government spending agenda, the wonkish Mr. Ryan, considered by many to be the best hope for fiscal conservatives, revealed proposed cuts of a whopping $74 billion. After some tense meetings, (referred to as a "revolt" by some media) newly elected conservative congressmen convinced the leadership to commit to unspecified cuts of an additional $26 billion. The actual "cuts" from any such legislation will, of course, be less once the appropriate political log rolling and deal-making are done- let's call it $50 billion (while the deficit grows by $26 billion during the week it takes to discuss it). So go the hopes for serious spending restraint from our newly elected wave of rabid, anti-big government Republicans. They may deliver cuts 1.3% of total spending that is itself approximately 90% greater than collected taxes. Let's mark this spending reduction effort as an epic fail, at a time when epic success is almost required for survival.
The second awful development to occur last week was the employment report from the Labor Department, describing employment conditions in the U.S. economy in January, 2011. The report was packed with statistics, all pointing to anemic growth with a modest pickup in manufacturing employment. The little-noticed (not by the bond market) aspect of the report was the "benchmark" revisions, an attempt to get the total picture more accurate each year than simply adding up all the monthly change numbers. This year's benchmark revisions showed two alarming things: a decline from previously reported employment in December 2010 of nearly 500,000 jobs, and a reduction in the workforce of a similar amount.
Coupled with insistence from the Federal Reserve Chairman Ben Bernanke that the Fed intended to continue "quantitative easing" (a euphemism for monetizing the bonded debt of the federal government), the employment data caused bond holders to assume there will be no end to the red ink. Ten-year U.S. bonds lost a full percent of their value, declining a total of 18% since Bernanke announced the acceleration of Fed policy in August 2010. The yield on these bonds has increased from an ultra-low 2.4% in August to 3.65% today, as the Fed repeatedly describes inflation in the U.S. as too low.
In context, a 3.7% yield does not appear high by historical standards. In our current predicament, however, it is heading toward Armageddon. If interest rates on our debt rise by 1% it means our interest payments rise by more than $100 billion dollars annually (not including the interest payments owed to the Social Security Trust Fund--see below). As global liquidity and deficit spending have accelerated, food and commodity prices have skyrocketed, sending many prices up 25-50% worldwide since August. In some countries (Tunisia and Egypt among them) rice prices and cooking oil have doubled. Copper is up 40% in that time. If global inflation expectations take hold with tenacity, as they have many times in past periods of "easy money" by our Fed and Congress, interest rates may easily rise to 5-6%, an event which will blow an additional $300-500 billion hole in a budget already beyond sanity. Can our creditors give the U.S. a nod on $2 trillion of new debt each year without any plan to fix it? Remember, there is plenty of past experience with U.S. debt yielding 7-8%, a potential expenditure on our current debt of nearly 100% of tax receipts to pay interest alone should yields go there.
The third development of the last week which received much less press than the Egyptian crisis is the "new normal" in Social Security. The CBO released a report disclosing that the net cash flow for the Social Security trust fund -- excluding interest received from the book entry bonds it holds in U.S. debt -- will be negative $56 billion in 2011, and for every year hence even more so. This is the train wreck that was supposed to happen in 2020. It is upon us now. Any limp action by conservatives to bring this program into solvency can be expected only to slow the raging river of red ink this behemoth program (along with its twin Godzilla, Medicare) spills on U.S. citizens. With no political will to fix them, these "entitlements" will obligate Americans to borrow more and more money from China--to honor promises we simply refuse to admit we can't keep.
So why do these developments argue for a crisis of Great Depression proportions? Because they speak unequivocally of our pathway to insolvency, and the potential of currency failure via hyperinflation, despite the hopes of conservatives and market participants to see a halt of such direction. Housing prices, the foundation of so much of private citizen debt loads, are destined for stagnation -- not inflation -- as the supply of homes is far greater than the demand -- 11% of the nation's homes stand empty today. When the world begins to recognize that there is no fix for America's borrowings, a fast and brutal exodus from our currency and bonds can send us a shock in mere weeks or months.
Unlike the Great Depression, however, we will enter such a shock in a weakened state, with few producers among us and record mountains of debt. More cataclysmic is the specter of inadequate food, as less than 4% of us farm, and those that do may cease to be as productive or may not accept devalued currency as payment, should the tipping point be crossed. Corn and wheat prices in the U.S. have nearly doubled in less than 12 months, using our rapidly evaporating currency as the medium of exchange.
The time for action has passed, which may only become apparent as the "aid" of easy money becomes seen as the harm that it is. May we all be spared the worst, but I offer no such prayers for those responsible. The harm that comes will be swifter, and more severe, than most of them thought possible.
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2)Fantasy and the Egyptian Future
By Barry Rubin
Let's remember something that nobody wants to hear right now. The revolution in Egypt succeeded because the army didn't want President Husni Mubarak any more. When people say things like: The army wouldn't shoot down its own people. Why? It has done so before.
In normal times the army would have been content to let Mubarak rule until he died, despite being very unhappy with his behavior. He had been declining as a leader due to his age; had refused to name a vice-president, step down, or prepare seriously for succession; and he was trying to foist his son, Gamal, on them who was not a military man and was inadequate for the job.
When the demonstrations began and built up the army had a choice: do nothing or fight for Mubarak. Those with grievances -- and everyone in Egypt has lots of grievances -- seeing that nobody would stop them, poured into the streets. Hence, a people's revolution. Something similar happened in Tunisia, though the civil society base for democracy -- and chances for success -- are far higher there.
Now, what happens in Algeria or Syria, for example? "Their" dictators are tougher than "our" dictators. These other countries do not face this special situation and the security forces do not hesitate to break up demonstrations. People do not want to be killed or beaten, so they don't come into the streets.
Is that a jaundiced or cynical view? No, that's how politics in authoritarian states works.
From this, we can draw conclusions:
First, it is possible that Arab politics have been transformed forever by people power. But it is equally or more possible that this is a matter of one uprising, one revolution, one time.
Second, the conclusion that the usual rules of Middle East politics have disappeared is greatly exaggerated. If you think that democracy cannot lead to violent Islamists taking power, consider the Muslim-majority country in the region with the longest tradition of democracy: Lebanon, where Hezb'allah and its allies now run things. Consider Algeria, where free elections (you can blame it on the military if you want) led to a bloody civil war. Think about Turkey where, though the regime still operates basically by democratic norms, the noose is tightening (though there it may well not be irreversible).
Third, without stinting the courage and efforts of the urban, middle-class, young, Facebook crowd, the Muslim Brotherhood had more to do with this event than Western observers realize. It was in close touch with the Facebook crowd and knew what was going on at every moment. It was not caught by surprise but simply held back to avoid committing itself to a devastating defeat that would end in harsh repression. The first thing the government forces did when the events started was to round up the usual suspects, that is Brotherhood leaders.
Fourth, what sense is a policy that rushes to topple allies as horrible dictators while flattering and making concessions to worse, actually aggressive dictators like Syria's Bashar al-Assad? (And once again, for the record, the United States should have worked quietly with the Egyptian leaders to send Mubarak into retirement and manage an orderly liberalization.)
Finally, history has not ended in the Middle East. The Muslim Brotherhood will continue to maneuver patiently for power. The military will set limits and implement them. All the radical dictatorships and movements that hate America, the West, Israel, and real democracy are still working all-out (and far more cleverly than their Western opponents) around the clock.
The apparent inability of the Western debate to grasp even the simplest point is devastating. Take the endlessly repeated line that the Egyptian Muslim Brotherhood has renounced violence. It renounced violence within Egypt as a condition to being able to operate at all. That policy could be reversed at any moment.
Meanwhile, it continues to advocate violence not only against Israel but also against -- though this point has not appeared a single time in the mass media -- the United States! If one side is sophisticated and realistic while the other engages in fantasies, who do you expect to win? And those roles are precisely the opposite of what Western hubris thinks.
Barry Rubin is director of the Global Research in International Affairs (GLORIA) Center and editor of the Middle East Review of International Affairs (MERIA) Journal. His latest books are The Israel-Arab Reader (seventh edition), The Long War for Freedom: The Arab Struggle for Democracy in the Middle East (Wiley), and The Truth About Syria (Palgrave-Macmillan). The GLORIA Center's site is www.gloria-center.org and of his blog, Rubin Reports, www.rubinreports.blogspot.com.
2a)Iran cracks down on demos, stops Turkish president greeting protesters
Monday night, Feb. 14, Iranian Basij heavies were still beating up thousands of anti-regime protesters who turned out in the streets of 30 cities during the day. In Tehran, one demonstrator was shot dead and two injured.
It was the first substantial demonstration the opposition had managed to stage since their big rallies against the rigged presidential election of 2009. They did not make a stand in one place but scattered across several city squares and outside the universities. The organizers who used Facebook and Twitter to mobilize them adopted this tactic to make it harder to disperse them.
Smaller rallies, which also drew thousands, were staged in the big towns outside Tehran including Tabriz, Tazd, Ahwaz, Mashad, Shiraz and Isfahan.
They won support from an unexpected quarter: Turkish President Abdallah Gul on the second day of his official visit to Tehran accepted a demonstrators' invitation to join them. He agreed, but when his guards asked Iranian security to lay on an escort for the convoy to bring Gul to the greet the crowds, Iranian President Mahmoud Ahmadinejad stepped in. He told the security service to prevent the Turkish president getting anywhere near the demonstrators – even if this led to a diplomatic upset with Ankara. Gul gave up the plan, but the tension between him and Ahmadinejad was palpable when they addressed a joint news conference later in the day and their appearance was cut short.
Notably, President Gul was one of the first world leaders to offer public support for the demonstrations in Egypt from the moment they began.
More predictably, US Secretary of State Hillary Clinton Monday expressed support for the tens of thousands of protesters in Iran's capital, saying they "deserve to have the same rights that they saw being played out in Egypt and are part of their own birthright." She spoke of the "hypocrisy" of the Iranian government that hailed the protests in Egypt but has tried to suppress opposition at home.
The slogans brandished by the demonstrators in Iran called for Freedom! Death to the Dictator! and "Mobarak, Ben-Ali, novbat-e-Seyyed-Ali!" They were telling Seyyed-Ali aka supreme ruler Ayatollah Ali Khamenei that it was his turn to go after the Egyptian and Tunisian rulers. Another sign read: "Not Gaza, not Lebanon, but Tunis, Egypt and Iran," an expression of contempt for Iran's meddling in Hizballah and Hamas affairs and its cost to the Iranian people.
According to sources, demonstrators continued to gather in the streets of Tehran Monday night and shout anti-regime slogans. When chased away by security police, they regrouped in other places. A large crowd of warmly-dressed demonstrators were seen marching in the dark toward Azadi (Liberty) Square, hoping to barricade themselves there and carry on demonstrating Tuesday. But the police will never let them stay there.
During the day, opposition leaders Mir Hossein Mouosavi and Mehdi Karroubi were placed under house arrest, heavy security forces patrolled the streets of Tehran and shut down subway stations to prevent demonstrators from traveling to the city center. The regime also jammed satellite news stations and tried to block the Internet.
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3)Does Benny Gantz have what it takes to lead the IDF?
During the two decades he was a colonel and had higher ranks, Gantz accumulated experience but it was not sufficient preparation to deal with the constant pressure in the post of chief of staff.
By Amir Oren
Benny Gantz, the first Israel Defense Forces chief of staff of the generation born between Operation Kadesh (the 1956 War ) and the Six-Day War, grew up in Kfar Ahim, named after two men killed during the War of Independence, Ephraim and Zvi Guber. From a young age he was aware of the heavy human toll of wars. It is unlikely that he will be rash.
Three years ago Gantz sat in his office at ground forces' headquarters in Kastina, just a little over a kilometer from his family's home in Kfar Ahim. Gantz wondered why Chief of Staff Gabi Ashkenazi was dragging his feet about his future in the IDF, which seemed to him to be vague if not totally obscured, pointed toward the moshav of his childhood and talked about the alfalfa field near his home. He said that is where he sits when he reaches an important juncture, to weigh his thoughts, for and against, before making a final decision about anything.
In the coming years Gantz will certainly find himself tempted to slip out of the office of the chief of staff to ponder things in the alfalfa. The big unknown is whether he will be as determined as Ashkenazi in his dealings with the political leadership. On the basis of his views, Gantz seems to be a natural continuation of Ashkenazi, even though they were not particularly close and the latter opted for other officers - Golani veterans - over him.
As the time came for the IDF to leave Lebanon, GOC Northern Command Ashkenazi chose the commander of Division 91, Moshe Kaplinsky, over Gantz - who at the time was the head of the liaison unit in Lebanon - to assume the more senior Northern Command post. In 2001, Kaplinsky and Gantz were promoted to the rank of major general. Four years later it was agreed that they would both serve as deputy chiefs of staff, one after the other, under then-Chief of Staff Dan Halutz. But only Kaplinsky got to serve in that role. Ashkenazi, who had hoped Kaplinsky would stay in the army and succeed him, made life difficult for Gantz, but in the end had to reluctantly appoint him as his deputy.
Like Shaul Mofaz and Moshe Ya'alon before him, Gantz also has a background of being a dairy farmer and paratrooper. Mofaz used to say that because of the milking he developed strong hands - of the sort that impressed paratroopers in rope-climbing competitions. A chief of staff needs strong hands on the wheel, but no less necessary is a solid back.
The experiences accumulated by Gantz, during the two decades he was a colonel and had higher ranks, are not sufficient preparation to deal with the constant pressure in the post of chief of staff. To date he enjoyed partial immunity and suffered only minor exposure. Henceforth, everything will be thrown at him. He will maneuver, in the Clausewitz sense, between constant political, media and legal confrontations. In order to survive in such environment, he will have to radiate strength to the army and the public.
Gantz has no hidden agenda or worldview that he is trying to advance through war. During critical junctures in his career, he witnessed the centrality of the American factor in terms of Israel's security and political considerations. Indeed, he is the second chief of staff, after Motta Gur, who served as military attache in Washington; before that he studied in the United States, at the National Defense University. His tenure as military attache was spread out on both sides of the Potomac, between the Bush and Obama administrations. The top brass at the Pentagon know him and he knows them well.
The problem for Gantz will be with the Israeli leadership, which did not want him until the last minute. Benjamin Netanyahu and Ehud Barak now have their backs to the wall. Avigdor Lieberman is threatening that the day after the attorney general announces that an indictment will be filed against him, he'll break up the government and bring elections forward, swerve to the right and become stronger at the expense of Likud, and then move to the left, toward a Tzipi Livni government, in the simplistic belief that the courts will be influenced by his desire for peace.
When politicians find themselves in a weak position before elections, two instincts awaken: the economic one (to lower taxes ), and the military one. This was the situation of Menachem Begin 30 years ago, when he was about to lose the elections, which had not happened up until that point to an incumbent prime minister. Begin, who was also defense minister, sicced Yoram Aridor on the economy, and the air force on Syria's helicopters in Lebanon and on the Iraqi nuclear reactor. In the military realm he was assisted by Chief of Staff Rafael Eitan.
Netanyahu and Barak may be Begin "plus 30." We can already see the economic piece developing. Gantz will require enormous mental fortitude and precise statesman-like conduct to identify the fine line between carrying out the orders of the elected civilian leadership, and maintaining loyalty to those who may try to use him for their political goals.
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4)U.S. allies in Mideast worry over commitment of Obama administration
By Paul Richter
Obama, Clinton are, yet again, sending mixed messages
A day after Egyptian President Hosni Mubarak was driven from power by a popular uprising, President Barack Obama called Jordan's King Abdullah, among others, to emphasize American support for greater political openness. Obama expressed his "conviction that democracy will bring more — not less — stability in the region," according to a White House account of the calls.
Diplomats from some Middle East nations say the administration's response to the Egyptian uprising has made them question how much U.S. support they would receive in the face of their own anti-government demonstrations.
Leaders in the region "didn't miss it when Obama came out to say was time for Mubarak to go," said one Arab diplomat, who spoke on condition of anonymity.
U.S. officials also have been trying to reassure allies of Washington's continued backing. The State Department, in particular, has been sending out messages that it seeks regional stability and intends to stand by its friends. And Obama's calls have affirmed a "strong commitment to supporting a more peaceful and prosperous Middle East in close consultation with all our regional partners," the White House said.
But the administration's tepid public backing for Mubarak and its backroom machinations to push him aside have provoked an alarmed reaction from officials in Saudi Arabia, other Persian Gulf states and Israel.
Saudi officials have complained for days about the "blatant interference" of foreign governments in the Egyptian crisis. The White House said it would not comment Saturday on a Times of London report that Saudi King Abdullah chastised Obama in a Jan. 29 telephone call for failing to offer more support to Mubarak.
But a senior administration official suggested other governments shouldn't expect too much U.S. help if they fail to make reforms and face mass protests.
When Middle Eastern officials ask who the United States would support in a struggle between governments and their people, the U.S. message is that "if people are demonstrating, it's because they believe very strongly that governments are underperforming," the official said.
By comparison, Obama used his remarks following Mubarak's resignation to pointedly offer Egypt "whatever assistance is necessary — and asked for — to pursue a credible transition to a democracy." And administration officials have raised the possibility of a significant increase in funding for democracy programs that help establish and build opposition parties, a move that further unsettles the autocratic leaders of the Middle East.
There continues to be a sharp division within the administration over how much pressure to exert on allies whose cooperation is critical to U.S. priorities of counterterrorism, the Israeli-Palestinian peace effort and containing Iran. Jordan, for example, is the only country in the region other than Egypt to have a peace treaty with Israel.
Secretary of State Hillary Rodham Clinton's remarks last week favoring an "orderly" transition to reform in Egypt reflects the desire within the administration to ensure that any democratic opening is conducted without the upheaval seen in Cairo.
But Robert Danin, a Mideast specialist and former State Department official, said the administration needs to bluntly warn other governments that they can expect the treatment Mubarak received unless they move to meet the demands of their people.
"We owe it to tell them that we are your friend, but that there are limits to how far we can stand by them," said Danin, now with the Council on Foreign Relations. "They don't have a blank check."
The administration clearly has no difficulty delivering that message to one government in the Middle East: Iran.
"By announcing that they will not allow opposition protests, the Iranian government has declared illegal for Iranians what it claimed was noble for Egyptians," Tom Donilon, Obama's national security adviser, said in a statement Saturday that criticizied Iran for prohibiting demonstrations.
"We call on the government of Iran to allow the Iranian people the universal right to peacefully assemble, demonstrate and communicate that's being exercised in Cairo," he said.
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5)Kissinger Discusses Rumsfeld's Memoir
By Jed Babbin
Former Secretary of State Henry Kissinger said he believes that as defense secretary Donald Rumsfeld didn't overrule the generals running the Iraq war often enough and should have insisted on the alternative to nation-building that Rumsfeld favored, turning the war over to the Iraqis quickly and avoiding the problems that came with nation-building.
Kissinger - who doesn't give many interviews these days - spoke to me about his long-time friend (and sometime adversary) Donald Rumsfeld and his recently-released memoir, "Known and Unknown" in an interview last Tuesday. Speaking to him evoked memories of his roles in Nixon's opening to China, the Vietnam peace talks and the invention of airborne "shuttle diplomacy." Kissinger's 1973 Nobel Peace Prize - shared with North Vietnamese ambassador Le Duc Tho - was awarded for what he had done, not in anticipation of what he might do.
Kissinger advised Rumsfeld to not gloss over things in writing the book, and Rumsfeld didn't. "Known and Unknown" - and the accompanying archive of documents posted at www.Rumsfeld.com - reveals much about the internal tensions that often overcame George Bush's decision-making after 9-11.
Of the Iraq War leaders, the memoir of British Prime Minister Tony Blair, "A Journey", came first detailing his personal political history and his chronicle of a faithful ally who clearly understood the war, its ideological component, and the gaps in our strategy. Soon after came President George W. Bush's "Decision Points." But Bush's book - choppy and incomplete - widened many of the gaps left by Blair and added a few more. Bush may have agonized over decisions, but didn't really explain the deliberations behind them.
Historians should be grateful for the Rumsfeld memoir because it fills in many of the gaps and explains much of what Bush and Blair left out in exhaustively-documented detail.
In my conversation with him, Kissinger dispelled some of the media-created mischaracterizations of his friend.
Rumsfeld, often characterized as the perfect antidote to diplomacy, has many times served as a highly effective diplomat. Few realize, for example, that Rumsfeld's skillful negotiations with the Russians made it possible for President Bush to pull America out of the Anti-Ballistic Missile Treaty.
Kissinger remembers Rumsfeld's term as ambassador to NATO in the last years of the Nixon presidency. He told me, "At NATO he was practicing diplomacy. He did the job more intensely than most of [the other US ambassadors to NATO] and he was in a very difficult period when our relations with France were very complicated. And he managed to establish a relationship with the French ambassador [Francois de Rose] which has lasted to this day." Kissinger added, "On that occasion he was a very effective diplomat."
George W. Bush's National Security Council, as Rumsfeld recounts at length, wasn't as much a high-level committee as an assembly of warring feudal states. A Rumsfeld writes, as Bush's National Security Advisor Condoleezza Rice was the source of the problem. Instead of focusing issues in a timely manner with clear alternatives that the president could decide between, time and again Rice delayed and tried to craft consensus. As a result some decisions were so delayed that they were overtaken by events.
Kissinger's friendship with Rumsfeld began under similar circumstances in Richard Nixon's cabinet. At their first encounter, as Rumsfeld wrote, Kissinger was the National Security Advisor trying to deal with clashes between State and Defense. When the question was raised on how Defense, State and the NSC were working together, Kissinger slipped a note to Rumsfeld that said, "As a team of barracudas."
That problem, Kissinger told me, is built into the NSC system.
He disagreed with my characterization of the Bush NSC as dysfunctional, saying, "I don't think ‘dysfunctionality' is right but I think competitiveness is built into the system." Is that competitiveness a good thing? "Well it depends on the president, it depends on the security advisor," he said adding "It can be a good thing if the president gets involved in the final decisions."
Rumsfeld details several major issues in which Rice failed to frame issues clearly and present them to Bush for a decision. Kissinger agreed, in principle, that if the decisions are clouded or not presented properly it's a disservice to the president.
Rumsfeld quotes Kissinger as saying (on Rumsfeld's announcement of his intent to resign in 2006), "The irony is you are being attacked for overruling the generals, and, the truth is, if anything you may have overruled them too little." He may have been thinking of the media-contrived 2006 "revolt of the generals" when Rumsfeld was attacked for ignoring military advice on the war plans for Iraq and that the protracted conflict was taking too great a toll on the force.
How so?
Kissinger said that although he was an outsider, he had been consulted by Rumsfeld who opposed nation-building in both Afghanistan and Iraq. Kissinger said, "[Rumsfeld] wanted to turn it over to the Iraqis on one level but he also wanted as long as we stayed there to conduct aggressive operations. He wanted to turn over authority [to the Iraqis] as soon as we got in. And I know because he came and spent a weekend with me before we went in to discuss some of these things."
George W. Bush campaigned against nation-building, and in his memoir he explains his change of mind in just one paragraph. Bush wrote that, after 9-11, he changed his mind when we had to topple the Taliban regime in Afghanistan: "We had liberated a country from a primitive dictatorship, and we had a moral obligation to leave behind something better." Two years later, when we invaded Iraq, he apparently didn't seriously consider an alternative. He wrote, "Some in the administration suggested that we turn over power immediately to a group of Iraqi exiles. I didn't like that idea."
When I spoke to him, Kissinger had read only about one-third of Rumsfeld's book so he couldn't know that it wasn't only some generals who favored the extended occupation of Iraq it: the prime movers were Bush, Powell, and Rice.
Kissinger thought that Rumsfeld should have overruled the generals who favored it. He said, "Well, I thought that for a while the military were waiting to turn the responsibility over to the Iraqis were not aggressive enough, and this is before Petraeus came in. And I thought, and I said it to him at the time, that he perhaps should have been more insistent on the strategy which I know he wanted.'
Kissinger said. "I didn't participate in the decision, so I only know what I saw from the outside. But my impression was that Rumsfeld wanted to get in and out and that he wanted to turn it over to Iraqis as quickly as possible."
Was nation-building a bad idea? Kissinger told me, "I wouldn't say it [nation-building] was inadvisable. I would have said, if you do that you will be engaged in something of unlimited duration. Certainly a duration going beyond the term of office and therefore ...I was not in favor of it." Neither was Rumsfeld.
Kissinger found irony in Rumsfeld being accused of choosing it as a post-Saddam strategy. Bush's insistence on nation-building was probably the greatest mistake we have made since 9-11.
Kissinger said Rumsfeld is "...a man of great patriotism. He's a man of enormous dedication. One quality of a leader is to make subordinates do things they didn't know they could do. He fulfills that superbly. He is a difficult bureaucratic colleague, but that is part of life because he is a man of commitment."
History has the advantage of time and perspective, which the daily media do not. Rumsfeld's memoir adds significantly to that perspective on the author, the presidents he served, and the wars he fought.
Jed Babbin served as a Deputy Undersecretary of Defense under George H.W. Bush.
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6)America's Proud Egypt Moment
By Peter Beinart Info
Forced to choose between national interests and national ideals, the Obama administration, and many of its fiercest domestic critics, chose ideals. That’s a remarkable achievement, writes Peter Beinart. Plus, Mike Giglio on Egypt's Facebook freedom fighter.
Ever since the financial crisis hit, Americans have been feeling bad about ourselves. Our infrastructure is moldering; we owe everyone money; barely anyone thinks we’re the future anymore. All that may be true. But now and then an episode comes along that reveals what an unusual, and impressive, great power the United States still is. That’s what the Egyptian revolution has done.
Yes, of course, the Egyptians made their own revolution; America played a bit role. And yes, we guiltlessly buttressed Mubarak’s tyranny for decades. But in the last three weeks, America has nonetheless vindicated George W. Bush’s 2004 pledge to the oppressed peoples of the world: “when you stand for your liberty, we will stand with you.” Forced to choose between national interests and national ideals, the Obama administration—after a little stammering—chose the latter, and so did many of its fiercest domestic critics. That’s a pretty remarkable thing.
Since World War II, after all, international-relations theory has been dominated by “realism,” a doctrine that sees ideology as a thin veneer covering national interest, which is to say: a nation’s effort to maximize its power. International theory has also been influenced by Marxism, and while Marxists do believe that ideology influences American foreign policy, they mostly define that ideology as capitalism, and generally consider the U.S. downright hostile to global democracy. Since January, both those theories have been tested, and found wanting. Hosni Mubarak’s regime was the foundation stone—along with Israel and Saudi Arabia—of American power in the Middle East. It tortured suspected Al Qaeda terrorists for us, pressured the Palestinians for us, and did its best to contain Iran. And it sat atop a population eager—secular and Islamist alike--not only to reverse those policies, but to rid the middle east of American power. And yet we cast our lot with that population, not their ruler.
Cynics might argue that the U.S. only helped show Mubarak the door when it became clear he was headed in that direction anyway, and that doing so was simply an effort to curry favor with his likely successors. But ask yourself this: what would China have done? If Beijing had been Mubarak’s prime patron rather than Washington, it’s a good bet that Mubarak would still be in power, and thousands of corpses would litter Tahrir Square.
When nations rise up nonviolently against their pro-American tyrants, Americans across the political spectrum grow ashamed, and that shame can be the difference between a peaceful revolution and Tiananmen Square.
As remarkable as Obama’s behavior has been by the standards of international-relations theory, what’s just as remarkable is that most of his domestic political opponents agree with him. Some on the right have tried to shoehorn Obama’s refusal to stand by Mubarak into the “Democrats are soft radical Islam” meme. But Republican Party foreign policy remains dominated by intellectuals who believe in the possibility, and necessity, of democracy’s spread. In recent days we’ve been hearing a lot about Jimmy Carter’s refusal to back the Shah of Iran, yet that trauma, which exercised such power over Jeane Kirkpatrick and an earlier cohort of neoconservatives, means little to a newer generation, composed of people like Elliot Abrams, Paul Wolfowitz and Robert Kagan, who came of age watching Ronald Reagan help usher out pro-American dictatorships from the Philippines to El Salvador.
When it came to Egypt, in fact, the relevant divide wasn’t between neoconservatives and liberals, both of whom generally supported the folks in Tahrir square. It was between neoconservatives and Islamophobes, the kind of folks who think the real problem with the Middle East is the Koran itself. The other divide was between the neoconservatives and Benjamin Netanyahu, whose government yearned for Mubarak to stay. The parting of ways between the American and Israeli right over the past few weeks should end once and for all the canard that neoconservatism is a creed hatched in the Knesset. For all its flaws, contemporary neoconservatism is a deeply American doctrine, very different from the more pessimistic worldview that dominates Likud.
The point isn’t that America is always a force for democracy. Far from it. But when nations rise up nonviolently against their pro-American tyrants, Americans across the political spectrum grow ashamed, and that shame can be the difference between a peaceful revolution and Tiananmen Square. These days, amidst our national self-flagellation and our anxieties about decline, that’s something worth savoring. In 2009, Barack Obama told an audience in Cairo that “America is not the crude stereotype of a self-interested empire.” Now, in 2011, he—and we—have proved it. It’s a proud moment for Egypt, and for America too.
Peter Beinart, senior political writer for The Daily Beast, is associate professor of journalism and political science at City University of New York and a senior fellow at the New America Foundation. His new book, The Icarus Syndrome: A History of American Hubris, is now available from HarperCollins.
6a)Obama’s Egypt debacle and the vacuum it exposes.
By Niall Ferguson
President Barack Obama in front of the Sphinx during a tour of the Great Pyramids of Giza following his landmark speech to the Muslim World on June 4, 2009.
“The statesman can only wait and listen until he hears the footsteps of God resounding through events; then he must jump up and grasp the hem of His coat, that is all.” Thus Otto von Bismarck, the great Prussian statesman who united Germany and thereby reshaped Europe’s balance of power nearly a century and a half ago.
Last week, for the second time in his presidency, Barack Obama heard those footsteps, jumped up to grasp a historic opportunity … and missed it completely.
In Bismarck’s case it was not so much God’s coattails he caught as the revolutionary wave of mid-19th-century German nationalism. And he did more than catch it; he managed to surf it in a direction of his own choosing. The wave Obama just missed—again—is the revolutionary wave of Middle Eastern democracy. It has surged through the region twice since he was elected: once in Iran in the summer of 2009, the second time right across North Africa, from Tunisia all the way down the Red Sea to Yemen. But the swell has been biggest in Egypt, the Middle East’s most populous country.
In each case, the president faced stark alternatives. He could try to catch the wave, Bismarck style, by lending his support to the youthful revolutionaries and trying to ride it in a direction advantageous to American interests. Or he could do nothing and let the forces of reaction prevail. In the case of Iran, he did nothing, and the thugs of the Islamic Republic ruthlessly crushed the demonstrations. This time around, in Egypt, it was worse. He did both—some days exhorting Egyptian President Hosni Mubarak to leave, other days drawing back and recommending an “orderly transition.”
The result has been a foreign-policy debacle. The president has alienated everybody: not only Mubarak’s cronies in the military, but also the youthful crowds in the streets of Cairo. Whoever ultimately wins, Obama loses. And the alienation doesn’t end there. America’s two closest friends in the region—Israel and Saudi Arabia—are both disgusted. The Saudis, who dread all manifestations of revolution, are appalled at Washington’s failure to resolutely prop up Mubarak. The Israelis, meanwhile, are dismayed by the administration’s apparent cluelessness.
Last week, while other commentators ran around Cairo’s Tahrir Square, hyperventilating about what they saw as an Arab 1989, I flew to Tel Aviv for the annual Herzliya security conference. The consensus among the assembled experts on the Middle East? A colossal failure of American foreign policy.
This failure was not the result of bad luck. It was the predictable consequence of the Obama administration’s lack of any kind of coherent grand strategy, a deficit about which more than a few veterans of U.S. foreign policy making have long worried. The president himself is not wholly to blame. Although cosmopolitan by both birth and upbringing, Obama was an unusually parochial politician prior to his election, judging by his scant public pronouncements on foreign-policy issues.
Yet no president can be expected to be omniscient. That is what advisers are for. The real responsibility for the current strategic vacuum lies not with Obama himself, but with the National Security Council, and in particular with the man who ran it until last October: retired Gen. James L. Jones. I suspected at the time of his appointment that General Jones was a poor choice. A big, bluff Marine, he once astonished me by recommending that Turkish troops might lend the United States support in Iraq. He seemed mildly surprised when I suggested the Iraqis might resent such a reminder of centuries of Ottoman Turkish rule.
The best national-security advisers have combined deep knowledge of international relations with an ability to play the Machiavellian Beltway game, which means competing for the president’s ear against the other would-be players in the policymaking process: not only the defense secretary but also the secretary of state and the head of the Central Intelligence Agency. No one has ever done this better than Henry Kissinger. But the crucial thing about Kissinger as national-security adviser was not the speed with which he learned the dark arts of interdepartmental turf warfare. It was the skill with which he, in partnership with Richard Nixon, forged a grand strategy for the United States at a time of alarming geopolitical instability.
The essence of that strategy was, first, to prioritize (for example, détente with the Soviets before human-rights issues within the U.S.S.R.) and then to exert pressure by deliberately linking key issues. In their hardest task—salvaging peace with honor in Indochina by preserving the independence of South Vietnam—Nixon and Kissinger ultimately could not succeed. But in the Middle East they were able to eject the Soviets from a position of influence and turn Egypt from a threat into a malleable ally. And their overtures to China exploited the divisions within the Communist bloc, helping to set Beijing on an epoch-making new course of economic openness.
The contrast between the foreign policy of the Nixon-Ford years and that of President Jimmy Carter is a stark reminder of how easily foreign policy can founder when there is a failure of strategic thinking. The Iranian Revolution of 1979, which took the Carter administration wholly by surprise, was a catastrophe far greater than the loss of South Vietnam.
Remind you of anything? “This is what happens when you get caught by surprise,” an anonymous American official told The New York Times last week. “We’ve had endless strategy sessions for the past two years on Mideast peace, on containing Iran. And how many of them factored in the possibility that Egypt moves from stability to turmoil? None.”
I can think of no more damning indictment of the administration’s strategic thinking than this: it never once considered a scenario in which Mubarak faced a popular revolt. Yet the very essence of rigorous strategic thinking is to devise such a scenario and to think through the best responses to them, preferably two or three moves ahead of actual or potential adversaries. It is only by doing these things—ranking priorities and gaming scenarios—that a coherent foreign policy can be made. The Israelis have been hard at work doing this. All the president and his NSC team seem to have done is to draft touchy-feely speeches like the one he delivered in Cairo early in his presidency.
These were his words back in June 2009:
America and Islam are not exclusive and need not be in competition. Instead, they overlap, and share common principles—principles of justice and progress; tolerance and the dignity of all human beings.
Those lines will come back to haunt Obama if, as cannot be ruled out, the ultimate beneficiary of his bungling in Egypt is the Muslim Brotherhood, which remains by far the best organized opposition force in the country—and wholly committed to the restoration of the caliphate and the strict application of Sharia. Would such an outcome advance “tolerance and the dignity of all human beings” in Egypt? Somehow, I don’t think so.
Grand strategy is all about the necessity of choice. Today, it means choosing between a daunting list of objectives: to resist the spread of radical Islam, to limit Iran’s ambition to become dominant in the Middle East, to contain the rise of China as an economic rival, to guard against a Russian “reconquista” of Eastern Europe—and so on. The defining characteristic of Obama’s foreign policy has been not just a failure to prioritize, but also a failure to recognize the need to do so. A succession of speeches saying, in essence, “I am not George W. Bush” is no substitute for a strategy.
Bismarck knew how to choose. He understood that riding the nationalist wave would enable Prussia to become the dominant force in Germany, but that thereafter the No. 1 objective must be to keep France and Russia from uniting against his new Reich. When asked for his opinion about colonizing Africa, Bismarck famously replied: “My map of Africa lies in Europe. Here lies Russia and here lies France, and we are in the middle. That is my map of Africa.”
Tragically, no one knows where Barack Obama’s map of the Middle East is. At best, it is in the heartland states of America, where the fate of his presidency will be decided next year, just as Jimmy Carter’s was back in 1980.
At worst, he has no map at all.
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7) The Great Jobs Recession Goes On
The recession is officially over but unemployment remains high
By Mortimer B. Zuckerman
There is no life in our jobs market. The recession officially ended in June 2009, but the Great Jobs Recession continues apace. Not since the government began to measure the business cycle has a deep recession been marked by such high levels of unemployment and underemployment, and followed by such anemic job growth. More jobs were lost in the recession of 2007-09 than in the previous four recessions combined—and this time it is an agonizingly slow business to replace them. Of the 8.8 million jobs lost during the downturn, roughly 900,000 were recovered in 2010, and many of these were temporary census positions. Since last June, employers have added a net of only about 284,000 jobs.
The recent headline news that the unemployment rate has fallen by 0.4 percentage point to 9 percent reflects somewhat more activity in manufacturing and retail, but less work in construction, transportation, and warehousing. The 9 percent was thus not bad news, but it was not good news either, since we need 130,000 new jobs each month just to meet the needs of new entries to the labor force and we gained only a dismal 36,000 in January. That comes on top of last year's disappointing monthly job creation rate of only 75,000 on average. Altogether, the 9 percent headline figure is an illusory portrait of the situation across the country, representing 13,863,000 men and women out of work. What happens if you add to that the 8.4 million "involuntary" part-time employed, whose hours have been cut back? Then you get a household unemployment rate slightly under 17 percent.
Turn the percentages into people again. In January, according to the Bureau of Labor Statistics, we had 2.8 million people only "marginally attached" to the labor force. A million or so of these are counted as the "discouraged," people who have given up altogether. The other 1.8 million have looked for work in the last 12 months without success but are not counted in the labor force because they haven't tried to get a job in the last four weeks for any number of personal reasons, such as family sickness, school responsibilities, weather, and travel problems. While the headline unemployment figure is down, the number of "marginally attached" increased by 300,000, and the decline in the rate from 9.4 to 9 percent is primarily because these workers have just dropped out of the market. But they haven't dropped out of life in America. They represent a colossal waste of energy and talent, as well as a loss of spending power.
It all adds up to a shocking figure: More than 25 million Americans are now either jobless or underemployed. That's nearly twice as many Americans out of work as there were in the black year of 1933—13 million then. (Only in one year before 1940 and the war did unemployment dip below 8 million.) Of course, the labor force was much smaller then, so the unemployment rate was higher. In the Great Depression, between one third and one quarter of the working population didn't have jobs.
Our real unemployment rate in 2011 is almost twice what it was before the onset of the recession in 2007, and at the current pace, it looks as if it will take until late 2016 to make up for the net job loss to date of 7.5 million. What is normal at this stage of the typical recession cycle is not only that job losses would be reversed, but that a new record high would be reached. As the economist David Rosenberg points out, after the dot-com bubble burst and with far less government stimulus in the last so-called jobless recovery, we had already recouped 62 percent of the aggregate decline in unemployment. This time around we have managed to recoup a mere 12 percent, despite the most stimulative fiscal and monetary policy in the history of America.
The detailed statistics are even more depressing. Here are some highlights:
•The number of full-time jobs, the critical factor in rebuilding personal confidence and spending, is down by roughly 10 million. Those suffering from long-term unemployment, who have collected benefits for 27 weeks or more, now amount to more than 4 percent of the labor force compared to the previous post-Depression peak of 2.6 percent in 1983. This is the highest since these records were started in the late 1940s.
•The mean duration of unemployment increased from 30.5 weeks in January 2010 to 36.9 weeks in the most recent tally.
•One third or more of the new jobs over the last year have been in temporary help services, formerly a good leading indicator of future labor demands but today a sign of dismal times. These jobs reflect businesses trying to cut the benefit costs of full-time employment and using just-in-time hiring and part-time hiring to improve the bottom line.
•Long-term unemployment is approximately 44 percent of the total, the highest of any in the past 10 recessions, when it never exceeded 30 percent.
•The jobs hard-to-get index, as of the end of last year, was 46.8 percent, while the jobs-plentiful index, another measure of consumer confidence, dropped to 3.9 percent.
•The recession has primarily affected young and adult males, the traditional family breadwinners, and especially blacks. As of December, the proportion of men age 45 to 54 in the labor force—working or looking for work—was down to 86.2 percent, while for men ages 35 to 44, it was 90.9 percent. For men 25 to 34, the proportion in November was 89 percent. These are the lowest since the government began issuing these statistics in 1948.
•The average workweek for all employees in private, nonfarm payrolls is at a low of 34.2 hours and dropped last month. Employers normally increase the hours for their existing workforce before hiring, for history shows that hours lead bodies as a forward-looking barometer to hiring, so this is a signal that bodes badly for future employment.
•Real hourly compensation dropped in the first four quarters after this recession officially ended, compared to a more typical gain averaging 2.5 percent during the first four quarters of expansion after the previous 10 recessions.
•State and local governments, which comprise 15 percent of the total jobs pie, are in a major downsizing mode, which will be a drag on employment throughout this entire year.
•Work stoppages involving 1,000 or more employees have fallen to the lowest levels since records began in 1947; there were only five strikes or lockouts in 2009, and 11 last year. It is good news in its way, but it reflects increased job insecurity.
Other characteristics of the job market are gloomy, too. Many of the job gains are in lower-paying leisure, hospitality, education, and health service industries.
Longer-term trends have accelerated in ways depressing for the American worker. There is more outsourcing abroad, more automating, more conversion of full-time jobs to temps and contracts, and a stagnant median wage. Information technologies are advancing dramatically, doubling every couple of years, and increasingly are being employed to eliminate jobs of all types.
This underscores the downside of advancing technologies, which together with globalization have been the primary forces depressing wages and diminishing opportunities, especially for those jobs that are fundamentally routine and repetitive in nature. The risk that semi-intelligent machines may destroy so many jobs that this trend could literally destabilize the whole society is one of the greatest challenges facing governments in all countries as they seek to find work for the millions of graduates coming into a labor market that has nothing for them.
The risk we may face in the United States is that the high unemployment rates may become chronic if, for the next several years, we average real GDP growth of only 2 percent, as many predict. The rate necessary to keep the unemployment rate stable is 3.3 percent. The lower growth rate would increase the average unemployment rate by about 10 percent of the previous rate, year over year. Nothing yet has appeared on even a distant horizon to alleviate Federal Reserve Chairman Ben Bernanke's citing of the job market as a chief source of national concern.
Generating new jobs for a growing population is a challenge to the left, right, and center of all our political parties and their entrenched positions on economic issues. They need to think beyond the arguments about this year's budget or the next. Millions of men and women are willing and eager to work, but their skills, brainpower, and energies are wasted. It doesn't make sense.
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8)Egypt's oil and gas pipelines at a standstill
The Sumed oil pipeline's routeThe SudMed pipeline which carries Saudi and Persian Gulf oil to the Egyptian Mediterranean is at a standstill. The military rulers in Cairo and the SudMed owners, Arab Petroleum Pipelines, say it is working normally. But sources have confirmed that the pipeline, which carries 3.1 million barrels of oil per day from the Red Sea northwest along 322 kilometers west of the Delta up to Egypt's Mediterranean coast, was idle Monday and Tuesday morning, Feb. 14 and 15, due to a general strike by its Egyptian workers as part of their anti-regime protest.
Nonetheless, APP issued a statement that "Operations at the pipeline terminals at Ain Sukhna on the Red Sea and Sidi Kerir in the Mediterranean were running normally, with tankers being accommodated without delays."
This week, US oil sources played down the impact of the SuMed stoppage on world energy and tanker freight prices. A spokesman of the US Energy Information Administration (EIA) informed Congress Monday: "The increase in tanker requirements traffic would be modest in the context of current global oil shipment flows."
He did not mention the halted flow through the Egyptian pipeline or that most of the Egyptians employed at the Suez Canal and pipeline facilities are on strike. He only commented: "A disruption in oil shipments through the Suez Canal or SuMed pipeline would not add much to costs" – without saying how much it would affect world fuel prices.
Cairo sources report that military rule officials in Cairo opened negotiations Monday for settling the wage claims of the workers, whose strikes have paralyzed key sectors of the economy, including the oil pipeline and the Suez Canal. The military junta has intimated that emergency rules banning strike action may be issued should the workers stand by their refusal to go back to work.
Also another pipeline, Egypt's main gas line to Israel and Jordan, also remains idle – not because of strikes but sabotage. Feb. 5, Hamas blew up its Sinai facilities at two points. Although Israel has lost 43 percent of the gas it needs to power its electricity, its spokesmen, like the Egyptians, have stopped giving out information about a timeframe for repairs and the resumption of supplies, staying mum out of concern for the military coup's impact on the world's financial markets.
Spokesmen in Amman admitted Monday that the flow to Jordan had been suspended - contradicting an earlier claim there had been no stoppage. The Energy Minister Mahmoud Al-Ees said Jordanian power stations had switched from gas to oil and diesel, costing the royal treasury an extra $28 million a week.
Sources report that Israel has made the same conversion, although no officials have disclosed how much this will cost the taxpayer. It is estimated that an extra $80-90 million a week, i.e. $320 million per month, has been added to Israel's fuel bill for keeping power running normally for the time being until the military junta's intentions are known.
According to an initial statement from Cairo after the explosion and before the military coup, Egypt means to keep the gas for its own use in breach of its contracts with Israel and Jordan.
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