Government Cripples Health Care Innovation?

This was written before art tour trip (which went very well) and Mubarak's departure.

This morning the Muslim Brotherhood warned the United States that if United States meddling in Egypt continued they intend to cut off America's supply of 7-11 and Motel 6 managers.

If this action does not yield sufficient results, cab drivers will be next, followed by Dell, AT&T and AOL customer service reps .

Finally, if all else fails, they have threatened not to send us any more presidents either.

Thoughts from our son who studied in Egypt and speaks Arabic. Written prior to Mubarak's departure:

Friends have been asking my thoughts on Egypt so I put a little something together. Feel free to share if you want.



"These views are based on my own observations and feelings having lived in Egypt for the better part of a year between 1999 and 2000. They also include information I have gathered by skype-ing with friends and acquaintances who are currently in the Cairo area.



I believe the west has a misguided view of what the “protesters” want. The word I see most used is “freedom”. Most Egyptians alive today have never truly know freedom as we would interpret the word. Their civic existence has been under a king/pasha/sheikh, or a “democratically elected” dictator who is somewhere between benevolent and sadistic, but always nepotistic and corrupt. When Mubarak was up for election in 1999 the polling station near my neighborhood allowed me to vote for him…..A Jewish kid from Atlanta Georgia….. so long as I agreed to vote yes; I still have the stub in my scrapbook.


What the protesters want is to be taken seriously as human beings. No more bribery, no more nepotism, no more shakedowns, no more making the rules up on the spot given the official’s mood du jour. Frankly I don’t think the average Egyptian citizen wants the responsibility of self determination. They just want a logical system that is consistent and allows them to get ahead if they play by the rules. I remember trying to claim a package at the post office in Cairo. You had to pay in exact change, but the amount due depended on who was working the desk. I had to go three times before it so happened that I could match the amount due with the combination of cash and coins I had in my pocket.



I also think the protesters want a basic level of improvement in their lives. They have seen the economy grow on a macro level, and with it their access to technology and exposure to the outside world, but they have not seen their roads improve, their traffic ease, their schools improve etc. They know there must be some trickle down due them and they are finally fed up that after all these years they have seen none of it.



I believe the west has a misguided fear of what comes next. Take a look at the other two true democracies… Turkey and Israel. Both have representative governments that include secularists, communists and religious fanatics, etc. The ebb and flow might give one a slight advantage from time to time, but the muck of bureaucracy and politics will blunt and soften the zanier fringe voices. The average Egyptian is somewhere between a total secular and a religious modern. Think of them as folks here at home who use i-pods and the Internet and can talk about sports and who travel, but still go to church every Sunday. Their personal religious views shade the way they see the world, but they are too busy trying to make a living and raise a family to actually waste their time imposing those views on others. With 20% of the Egyptian population professing Christianity, I imagine they would make up a larger political block than the Muslim Brotherhood. IF anything you would end up with a large secular bloc, a modern religious bloc, peppered with religious fanatics on one side, and a few communist and greens on the other. I really do think Israel’s parliament is a good example of what a truly democratic Egypt could become. I drank alcohol in Egypt during Ramadan more than any other time of the year. Never on the streets, but when invited into a home, there was often a cabinet stocked with premium bottles. At the end of the day Egyptians are pragmatic more than anything.


I believe the west has a misguided view of what this could mean for Israel. If a true representative government were formed, this majority secular/ modern religious bloc will want to spend their time growing businesses and making a decent living. If they can do that by trading with Israel, I think they would do so. Democracies rarely if ever fight each other and if on the surface they talk tough, each side eventually knows where its income bread is buttered. Again, look at the recent spat between Turkey and Israel. Cosmetic and perhaps a little tense, but at the end of the day, the civilians that do business together haven’t skipped a beat.


The true danger lies in allowing Egypt to dissolve into complete and utter chaos. Not crowds in the street causing trouble but a true nationwide breakdown of the basic elements of society. This evening I spoke to a wealthy friend who has literally run out of food. They spent a week eating out, a week raiding their fridge and now they literally have nothing to eat. Their ATM cards don’t work, the water system is starting to shut down, the electrical grid is shutting down, there is no gasoline, the highways have been blockaded by protesters, the trains have stopped operating etc. Not because the government is restricting these services, but citizens are voting with their feet. They are not going to work and will starve the government of its power to do anything by not contributing their sweat to a system in which they no longer have any belief or faith. Think of that….for 15 days now commerce and transportation has largely ceased to exist nationwide in Egypt. Imagine if all commerce and transportation stopped in the U.S. for 15 days. No ATM, no grocery store, no regular water. How long would WE last before things dissolved into total anarchy. A weekend of heavy snow seems to bring us to the brink often enough. If something is not done to put the country back to work in the next week people will begin to starve to death. Already I am told the horses that are used to ride tourists around the pyramids are being put down because no one can feed them. Now they are also being used for provisions. Does the world really want the liability of taking care of 87 millions starving people? We are dangerously close to that scenario, and the longer the mayhem continues the less likely a positive outcome will be.


The only solution I can really see short of a complete invasion of the country to “stabilize” it which I do NOT advocate, is for western powers to work with the Mubarak regime to develop a clear transition plan with milestones and benchmarks that give the people some comfort that things are actually improving and not just dissolving into the same platitudes they typically get from their elected leaders. I think encouraging Mubarak to “resign” yet maintain some presence on a six month transition government in return for the chance to maintain his future financial security would be helpful. They could use the next six months to develop some new structural reforms to their existing government that would be ready to absorb new elected officials in September. If it is not meaningful and filled with follow through though, I do think the frightening scenario of the largest Arab country dissolving into total chaos and anarchy is a real and dangerous likelihood."
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It's gonna get ugly, people…….it’s gonna get ugly.
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Every president inherits not only the problems of his predecessor but also the cumulative ones of all predecessors. Obama is not to blame for all of these statistics below but were it to have happened on GW's watch the news and media folks would be screaming. However, the tone of the press and media are rather muted as Obama drives us over the cliff.

Two years ago, Barack Obama was inaugurated as president of the United States. Are you better off today than you were two years ago? Numbers don't lie. Here is the data. (See 1 below.)
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I worked in the same firm with Mike Milken for almost 20 years. Whatever you may think of him he is a very bright and perceptive man.

I have favored the health care sector recently but only because I thought I could be bottom fishing in terms of valuations.

You never know how a mouse or human will react to a new drug experiment so there is significant risk ad cost in developing new drugs. Furthermore, scientists are now tackling some rather intractable health issues, Diabetes,Cancer, AIDS etc.

Wall Street has placed a low valuation, for over ten years, on what historically has been a growth industry and would still be were it not for government intrusion - some necessary but much of which is strangling and drug development crippling.(See 2 below.)
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I have consistently written that the figures pertaining to employment and future re-employment do not add up nor lie so now someone has done the math. Not a pretty picture. (See 3 below.)
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Anything is possible. (See 4 below.)
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I will not live to see the fuzzy thinking theories of progressives die the death they deserve but at least the public is now being invited to a wake up call.

Democratic nations are more peaceful when their society is cohesive,their citizens speak a common language and share a common culture. It is more difficult, in this environment, for radicalism's zany theories to take root. Cameron's "Muscular Liberalism" is not a threat to individualism and does not mean various cultures, within that society, cannot maintain their identities and hold on to traditions and customs. It simply means when it comes to their respective nation's nationalism they must eventually march in lockstep or they will be forever out of step. It also means the 'outsider' must be embraced, encouraged and shown the way.

Progressives heaped PC'ism upon us and it was doomed to fail. Now it has because it was hi-jacked by extremists and rammed into every aspect of Western life in order to justify its extreme demands. Consequently, it has torn the fabric of our society and Merkel has joined Cameron in saying so.

Progressives will resist claiming the Merkel's and Cameron's are saying 'our way or the highway.' The truth of the matter is that we tried the progressive's highway and it has led to a car pile up that will take decades to correct and in the process our nation will never be the same nor will it be able to go back to its former greatness. Pendulums swing too far and correct but they seldom go back to where they started.

Once again our president is behind the curve because he is a captive of his background and his background is antithetical to what Cameron and Merkel are espousing. (See 5 below.)

participated Here is an example of what multiculturalism is all about but then nothing wrong about learning another language. Our son voluntarily in this Defense Department language program and went to Cairo and learned Arabic. He then came back and served six months with the same Defense Department Agency that paid for his education at The American University in Cairo.

However, mandating students learn another language is something else.(5a)
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The Stella awards perhaps offer some insight into what is wrong with our country. (See 6 below.)
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A brilliant bond investment manager sees the U.S., with Fed help, inflating our way out of our debt debacle. (See 7 below.)
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By allowing the economy to collapse Mubarak hopes he will be able to survive and stick around for a more orderly transition as it will eventually dawn on the Egyptians they need to eat. Egypt is moving towards a military takeover in order to quell the rioting and restore order.

Meanwhile the Saudis, worrying about their own survival, are giving Obama a headache by urging him to support Mubarak.

Learning on the job can be an expensive undertaking so maybe it will finally dawn on American voters the cost of inexperience comes at a very high price. We, the Iranians and the world are still paying the bill for Jimmy Carter's ineptness, the Cuban's for Kennedy's youthful inexperience, Asia for Johnson and Nixon, Iraq for GW's mistakes and now Obama. (See 8 below.)
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Dick
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1) January 2009
TODAY
% chg
Source

Avg. retail price/gallon gas in U.S.
$1.83
$3.104
69.6%
1

Crude oil, European Brent (barrel)
$43.48
$99.02
127.7%
2

Crude oil, West TX Inter. (barrel)
$38.74
$91.38
135.9%
2

Gold: London (per troy oz.)
$853.25
$1,369.50
60.5%
2

Corn, No.2 yellow, Central IL
$3.56
$6.33
78.1%
2

Soybeans, No. 1 yellow, IL
$9.66
$13.75
42.3%
2

Sugar, cane, raw, world, lb. fob
$13.37
$35.39
164.7%
2

Unemployment rate, non-farm, overall
7.6%
9.4%
23.7%
3

Unemployment rate, blacks
12.6%
15.8%
25.4%
3

Number of unemployed
11,616,000
14,485,000
24.7%
3

Number of fed. employees, ex. military (curr = 12/10 prelim)
2,779,000
2,840,000
2.2%
3

Real median household income (2008 v 2009)
$50,112
$49,777
-0.7%
4

Number of food stamp recipients (curr = 10/10)
31,983,716
43,200,878
35.1%
5

Number of unemployment benefit recipients (curr = 12/10)
7,526,598
9,193,838
22.2%
6

Number of long-term unemployed
2,600,000
6,400,000
146.2%
3

Poverty rate, individuals (2008 v 2009)
13.2%
14.3%
8.3%
4

People in poverty in U.S. (2008 v 2009)
39,800,000
43,600,000
9.5%
4

U.S. rank in Economic Freedom World Rankings
5
9
n/a
10

Present Situation Index (curr = 12/10)
29.9
23.5
-21.4%
11

Failed banks (curr = 2010 + 2011 to date)
140
164
17.1%
12

U.S. dollar versus Japanese yen exchange rate
89.76
82.03
-8.6%
2

U.S. money supply, M1, in billions (curr = 12/10 prelim)
1,575.1
1,865.7
18.4%
13

U.S. money supply, M2, in billions (curr = 12/10 prelim)
8,310.9
8,852.3
6.5%
13

National debt, in trillions
$10.627
$14.052
32.2%
14


Just take this last item: In the last two years we have accumulated national debt at a rate more than 27 times as fast as during the rest of our entire nation's history. Over 27 times as fast! Metaphorically, speaking, if you are driving in the right lane doing 65 MPH and a car rockets past you in the left lane 27 times faster . . . it would be doing 1,755 MPH! This is a disaster!

Sources:

(1) U.S. Energy Information Administration;
(2) Wall Street Journal;
(3) Bureau of Labor Statistics;
(4) Census Bureau;
(5) USDA;
(6) U.S. Dept. of Labor;
(7) FHFA;
(8) Standard & Poor's/Case-Shiller;
(9) RealtyTrac;
(10) Heritage Foundation and WSJ;
(11) The Conference Board;
(12) FDIC;
(13) Federal Reserve;
(14) U.S. Treasury


Growing old is inevitable; growing up is optional.
------------------------------------------------------------------------
2)Health-Care Investment—The Hidden Crisis
When the stock market values companies that make cosmetics and beer far above pharmaceutical companies, you know that incentives are out of whack.
By MICHAEL MILKEN
Since 1820, world per-capita income has risen more than eightfold, thanks in part to the spread of democracy, open trading markets, and the rule of law. But a less-noted source of growth—improvements to health that have given us longer, more productive lives—has produced as much as half of the increase in the global economy over the past two centuries, as research by the late British economist Angus Maddison suggests. It would be logical to assume that companies whose products make us healthier would be among the most valued enterprises on the planet, but this assumption is wrong.

Consider companies that make consumer products—things like soft drinks, detergent, cosmetics and beer. While their price-earnings ratios will vary, in today's market their average will most likely be in the neighborhood of 20. But the average P/E of the largest American pharmaceutical research companies (Abbott Labs, Bristol-Myers Squibb, Johnson & Johnson, Eli Lilly, Merck and Pfizer) was recently near 10. Investors must have concluded that pretzels and eyeliner produce faster profit growth than prescription medicines.

Lower pharma P/E ratios are a recent phenomenon. A generation ago, drug firms regularly topped magazine lists of the most-admired companies in America, a reputation usually reflected in their stock prices. But facing the specter of regulated returns, enterprise values dropped sharply during debates about proposed health-reform legislation in 1993. When the proposals failed in Congress, valuations eventually recovered. In the last decade, pharma P/E ratios dropped again.

Contributing to these lower valuations are patent expirations, regulatory complexity, uncertainty about litigation exposure, and high U.S. taxes on repatriated foreign income. These factors undoubtedly influenced the decision by Procter & Gamble to leave the pharmaceutical business entirely in 2009 and concentrate on consumer products.

Procter & Gamble responded rationally to clear market signals that discouraged development of life-saving drugs. But for people whose health, and perhaps survival, will depend on these medicines—that includes you and me—the implications of the disparity in market valuations are ominous.

We can remove some of the barriers to growth in medical research through several public-policy steps:

• Match the inducements of other countries. Many nations offer generous tax incentives, easier recruitment of clinical-trial subjects, strong government partnerships and far less litigation. We cannot and should not stop American biopharmaceutical and medical-device manufacturers from expanding overseas operations. But we can reduce needless bureaucracy at home, implement tort reform, and restructure taxation of foreign income.

.• Recognize the return on investment in federal health research. We clearly need spending restraint in Washington. But smart budgeting will factor in the economic gains that come from longer, healthier life spans and the savings from improved therapies. One 2006 study by Kevin Murphy and Robert Topel of the University of Chicago showed that life-expectancy gains since 1970 added $3.2 trillion per year to America's national wealth. A mere 1% reduction in cancer deaths would be worth $500 billion, they noted, and the present value to future generations of a full cure is a nearly incomprehensible $50 trillion—more than three times today's GDP.

Congress doubled the budget of the National Institutes of Health (NIH) between 1998 and 2003. It was money well-spent, and we're now seeing exciting announcements from the nation's medical research centers, including 39 new cancer drugs that have been approved since 2004. In our view at the Milken Institute's FasterCures, the past year has produced the greatest progress against cancer since I first began working with the research community in the 1970s. Progress is accelerating on a range of other diseases as doctors gain traction by using rapidly evolving technology and by collaborating across disciplines.

But the prospects for continuing this discovery bonanza are threatened. NIH funding has trended down in real terms since 2003. Current budget realities portend severe future cuts that will cause some younger medical scientists to either change careers or take their work to places like Singapore that put out the welcome mat for promising researchers. Whether continuing breakthroughs emerge from U.S. laboratories or somewhere else will profoundly affect America's role among nations in the 21st century.

.Support prevention. There's great concern with rising health-care costs, yet too often we overlook that the single best way to contain them is to keep people from getting sick in the first place. That starts with recognizing that lifestyles, not genes, are the biggest contributors to disease. Public and corporate programs aimed at even slight reductions in obesity, tobacco use and other damaging behaviors pay large social and economic dividends.

• Give the FDA adequate resources. At a recent New York conference hosted by FasterCures, Food and Drug Administration Commissioner Margaret Hamburg told me that imports of products subject to FDA inspection have increased to 20 million from six million shipments in a decade. In fact, an estimated 25% of the U.S. economy is affected by FDA oversight. And the new food-safety legislation that Congress passed in December further expands the agency's responsibilities.

Given all this, the FDA soon won't be able to keep up with the pace of innovation in such areas as medical-device development and regenerative medicine—the use of stem cells to repair damage to tissues and organs. That will further slow the movement of effective drugs and devices from laboratory to patient.

As they seek to bring deficits under control, Republicans and Democrats will disagree on which investments in education and medical research make the most sense to secure our future. But they'd better start agreeing on something soon. A 2009 study by the Information Technology and Innovation Foundation, "The Atlantic Century," benchmarked the U.S. against Europe on several measures of innovation and competitiveness. Although the U.S. currently ranks sixth out of 40 nations (down from first in previous studies), it's slipping and making the slowest progress toward what the report characterizes as a knowledge-driven, high-innovation economy.

Improved public health translates directly into greater national productivity, which underpins all economic growth. So let's get our priorities straight. America's economy used to be the sun—the gravitational center—in the "solar system" of leading nations. In the future, we'll no longer be the sun. But by investing in our own health, we can help solidify our position as Jupiter, the largest planet.

Mr. Milken is chairman of FasterCures, a Washington-based center of the Milken Institute.
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3)Doing the Math on a Jobless Recovery
President Obama has urged us to be patient, but must we wait until 2018 to get back to full employment?.
By BRAD SCHILLER

The latest employment reports have not been encouraging. At the rate of 36,000 new jobs a month—the number gained in January—we will never get back to full employment. Even if we keep adding jobs at the December rate of 121,000 new jobs, we wouldn't achieve full employment in this millennium.

President Obama has urged us to be "patient" with this jobless recovery. But it's worth asking how long it will take to get back to the employment levels we experienced before the recession of 2008-09. How patient will we need to be?

Consider the math of full employment. We now have a labor force of 153 million people, of whom 14 million are officially counted as "unemployed," defined as not working and actively seeking a job. Were we fully employed (defined as 5% unemployment) there would be 7.7 million unemployed workers. So our "excess" unemployment currently hovers around 6.3 million workers.

That number is our initial target for job creation. The trouble is that it's a moving target.

Population growth and immigration bring a steady stream of new workers into the labor force every year. They want jobs, too. So our job-creation target grows every month. At the trend growth rate of 1.2% annually, we get another 1.8 million labor force participants a year, and with them, the need for another 1.8 million new jobs.

In the past couple of years the labor force hasn't grown quite so rapidly. This is because a lot of would-be workers concluded that job prospects were so poor that actively seeking a job would be a waste of time.

The Labor Department calls these people "discouraged" workers, and it recently counted one million of them in the country. It defines another two million would-be workers as "marginally attached"—not actively seeking a job but ready to take one.

The withdrawal of so many workers from the labor market has been a major factor in keeping a lid on the official unemployment rate, despite lackluster job creation. But that flow moves in both directions. If the economy picks up steam, these discouraged workers will re- enter the labor market looking for jobs, moving the job-creation target further away.

To get back to full employment tomorrow, we could get by with another seven million new jobs. To reach full employment by the end of this year, we would need at least nine million new jobs (some 750,000 a month). There's simply no way we will experience that kind of job creation.

Each year brings another two million-plus workers to the labor force (new workers plus the re-entry of discouraged workers). Thus we would need monthly job gains of 460,000 to achieve full employment in time for the 2012 presidential elections.

We created that many jobs one time in the last four years (May 2010). That fact should be scary for Democrats.

The White House keeps hoping for monthly job gains of 250,000. But even gains of that magnitude—more than double the average gain last year— would not get America back to full employment until 2018.

The math of joblessness is exceedingly bad news for American workers. It's also a sobering reminder of how ineffective stimulus policies have been.

Mr. Schiller is a professor of economics at the University of Nevada, Reno and author of "The Economy Today" (McGraw-Hill, 2010).
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4)Could al Qaeda Hijack Egypt's Revolution?
Terrorists in Pakistan and mullahs in Tehran want to see chaos in Cairo. A splintered army and premature elections would help their cause.
By KENNETH M. POLLACK

It is the nature of revolutions to be entirely unpredictable. Most fail, and even those that succeed often follow paths that no one foresaw—not their targets, not their protagonists, not the partisans on any side. The Frenchmen who stormed the Bastille never foresaw the Terror. The Russians who stormed the Winter Palace never imagined Stalin's purges, the Gulag or the Great Famine. Most Iranians never meant to build a theocracy.

The uprising in Egypt is far from over, and neither is America's necessary role. We must work to guard against the worst outcomes, which may seem remote but are all too likely in the unpredictable maelstrom of revolution:

• The disintegration of the Egyptian army. Though hardly a paragon of democratic virtue, the army is the most important institution in Egypt, and it is vital to a peaceful transition to a moderate form of government. If the army fractures, Egypt will descend into chaos.

. U.S. officials don't know how loyal the army's senior officers feel toward Hosni Mubarak, nor how sympathetic the enlisted men feel toward the protesters in Tahrir Square. Nor do we know where the loyalties of middle-ranking officers lie, but it is not hard to imagine that they are caught betwixt and between. At some point that no one will recognize until after the fact, the military may lose its cohesion and its ability to act on anyone's behalf.

Thus the U.S. must maintain its extensive ties with Egypt's soldiery, bolster their spirits, and encourage them to act as the impartial guardians of their country's orderly transition. It's imperative that the U.S. help Egypt past its current deadlock before divided loyalties tear apart the army.

• Premature elections. If there is a need for a speedy resolution to the present impasse, the answer should not be an accelerated move to new elections. Where elections are concerned, speed kills.

Elections are an important element of democracy, but they are not synonymous with democracy. Few things can do more harm to a nascent democracy than premature elections. To see the proof, look at the Bush administration's disastrous insistence on elections in Palestine and Iraq well before those societies were ready for them.

Egypt is not ready to have good elections. It needs a new constitution and time for viable political leaders to establish parties, something the Mubarak regime prevented for 30 years. It is an open question whether eight months will be enough, but advancing that timetable would be incredibly reckless.

Although the Muslim Brotherhood likely represents only a minority of Egyptians, it probably would dominate any early elections. It is the only true mass party in Egypt, well-organized and disciplined, with a well-known track record and a well-understood political platform.

The Muslim Brotherhood is not al Qaeda, and it might provide reasonable leadership of a new government. But perhaps not. We simply don't know, because Mr. Mubarak never allowed the Brotherhood any meaningful degree of participation in politics, so it never had to show its true colors.

It could be disastrous if the Brotherhood got to pick the next president of Egypt simply because it was the only organized party when elections were held.

• A reprise of Lenin's 1917 train ride into the Russian Revolution. Whatever our concerns about it, the Muslim Brotherhood is essentially the "Menshevik" faction of the Egyptian revolution. It espouses a moderate version of an ideology common among the Egyptian opposition and other Arab opposition movements, and it says it is willing to live and work within the constraints of a democratic system.

But revolutions often get hijacked by equivalents of the "Bolsheviks," extremists who previously seemed so marginalized that they could never pose a real threat. The "Bolsheviks" of the Egyptian revolution are sitting in caves in Pakistan. They are the Salafist extremists of Ayman Zawahiri's Egyptian Islamic Jihad and other groups that sought to bring about an Egyptian revolution throughout the 1990s. They waged a vicious terrorist campaign to try to do so and were ultimately driven from the country and into the arms of Osama bin Laden and al Qaeda, where they became one of its dominant factions.

We should not doubt that when Zawahiri and his cohorts heard the news from Tahrir Square, they were probably jubilant that the revolution they had sought for so long had begun. They were likely also frustrated that they were not there to hijack it and lead it toward the radical Islamist state they seek. Zawahiri is probably doing whatever he can to play catch-up—to dispatch his supporters to Egypt to take control of the revolution.

The Iranian regime is also gleeful about the collapse of Mr. Mubarak, one of America's most important Arab allies and one of Tehran's most passionate enemies. Iran's mullahs often see opportunity in chaos and violence, believing that anything that disrupts the region's American-backed status quo works to their advantage. Witness their various efforts over the years in Lebanon, Iraq, Palestine, Afghanistan and Bahrain.

Tehran may have already concluded that turmoil in Egypt suits its interests far more than any successful transition to stable democracy. Turmoil, after all, might prevent a new American ally from emerging and enhance the chances that Egypt's new regime is more radical and friendly toward Iran. All of this gives Iran and al Qaeda common interests that may drive them toward tacit cooperation—with the goal of fomenting a modern Bolshevik Revolution.

In 1917, the Kaiser's Germany famously arranged a train to take Vladimir Lenin from his exile in Switzerland across Germany to Russia. Berlin knew that Lenin was a wild radical who wished no good for Germany either, but it facilitated his entry into the Russian Revolution because it hoped he would make the situation worse and accelerate the collapse of the Russian state. It's a model that could hold great appeal for Tehran today.

All of this may seem unlikely, but revolutions are also unlikely events, and once that threshold is crossed, old rules about what is normal and likely go out the window. That's why those who start revolutions are rarely those who end up in charge when the smoke clears and the barricades come down. And it's why the U.S., as Egypt's friend and ally, must try to prevent a revolution made in the name of democracy from being hijacked by something much worse.

Mr. Pollack is director of the Saban Center for Middle East Policy at the Brookings Institution.
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5)David Cameron's Warning

Multiculturalism, and societies that lack confidence in their own values. David Cameron gave a bracing speech about multiculturalism on Saturday, notable as much for the venue as his argument. The annual Munich Security Conference typically devotes itself to foreign policy and defense. By denouncing multiculturalism at the conference, Mr. Cameron put the subject at the center of the West's security agenda.

Past time, too. The U.S., Canada and the EU are waking up to the realization that terrorism isn't simply a phenomenon that arrives from abroad. The four young men who perpetrated the July 7, 2005 bombings in London were all U.K. born. So was Rashid Rauf, the alleged mastermind of the plot to blow up trans-Atlantic airliners in the summer of 2006. The American terrorist imam Anwar al-Awlaki was born in Las Cruces, New Mexico, and got a bachelor's degree from Colorado State.

The usual explanation for why young Muslims turn to terrorism varies: anger at Western policies, the absence of democracy in the Middle East, or the effects of poverty. But as Mr. Cameron noted, terrorists are often middle class or better and usually well-educated. While undemocratic regimes may explain extremism in Egypt, they don't explain why there are "so many extremists in free and open societies" like the U.K.

Mr. Cameron's argument is that the core problem is a matter of identity. In the U.K., young Muslim men, children of immigrants, "find it hard to identify with the traditional Islam practices at home by their parents." But at the same time they find it hard to identify with Britain. "Under the doctrine of state multiculturalism," Mr. Cameron notes, "we have encouraged different cultures to live separate lives, apart from each other and apart from the mainstream. We've failed to provide a vision of society to which they feel they want to belong. We've even tolerated these segregated communities behaving in ways that run completely counter to our values."

The result is a set of double standards—what George W. Bush might call the soft bigotry of low expectations—in which social behavior that Western societies would never tolerate from most citizens is met with official indifference when it comes to immigrant communities. In Mr. Cameron's list, that includes forced marriage, hate speech and terrorist incitement. Even worse, "some organizations that seek to present themselves as a gateway to the Muslim community are showered with public money despite doing little to combat extremism."

Much of the blame lies with the Muslim communities themselves. But Mr. Cameron is right that attitudes of "hands-off tolerance" toward extremism are equally a problem. If a society lacks the confidence of its own values, it's no wonder so many young Muslims reject them. From there, the road from Islamist belief to violent action can be short.

Mr. Cameron's remedy is what he calls "muscular liberalism." "A passively tolerant society says to its citizens, as long as you obey the law we will just leave you alone. It stands neutral between different values. But I believe a genuinely liberal country does much more; it believes in certain values and actively promotes them. . . . It says to its citizens, this is what defines us as a society: To belong here is to believe in these things."

In today's Britain, throughout Europe and increasingly in America, the police and security services must now track thousands of potential terrorists among its own citizens. To attack the problem at a deeper source, we should heed Mr. Cameron's call to be "unambiguous and hard-nosed about this defense of our liberty."



5a)Federally funded Arabic language program ripped
By Chad Groening

Author and activist David Horowitz says it's absolutely outrageous that some elementary and intermediate school students will be forced to take Arabic language and culture classes in a Dallas-Fort Worth suburb.


Several Dallas television stations have reported that the Mansfield Independent School District is instituting the Arabic language studies after receiving a federal grant from the Foreign Language Assistance Program of the U.S. Department of Education (DOE). Under the program, Arabic classes would be mandatory at an elementary and intermediate school in the district and optional at the middle and high schools. (See earlier article)


The DOE program identifies Arabic as "a language of the future." But David Horowitz, founder of the David Horowitz Freedom Center, says Arabic is now a language of the past.

"What has the Arab world contributed except terror?" he exclaims. "The theocratic, repressive Arabic states do no significant science, no significant arts and culture."

The political activist admits he is skeptical about the district's claim that the courses will be about language and culture, and not about the Islamic religion.

"We already have a lot of infiltration of Islamic jihadist doctrines into our K-12 school systems," he argues. "The teachers unions have ruined our K-12 schools. These unions are very left-wing and they encourage Palestinian terrorists to come to the school and indoctrinate students. So I'm not too happy about this news item."

Horowitz says if the Mansfield ISD really wanted to look at a "language of the future," they would teach their children Chinese.
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6)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.
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7) Pimco's El-Erian: US Will Inflate Its Way Out of Debt

Mohamed El-Erian, CEO and co-chief investment officer of bond giant Pimco, says that the U.S. Federal Reserve will at least partially inflate its way out of the debt crisis.

“There are several ways that a country can deal with its debt issues. I suspect the U.S. will end up with a mix of some fiscal adjustment and inflating its way out,” El-Erian said.


That’s because U.S. policymakers have an innate fear of recession thanks to U.S. history, more than of inflation, which is more relevant to the financial history of Europe, El-Erian told Der Spiegel, the German newsweekly.

“This country has a huge aversion to recession, huge. And if you ask a policymaker if you're going to make a mistake, which mistake would you rather make, they would say I'd rather make an inflation mistake than make a growth mistake,” he said.

The United States has several advantages other countries don't, such as being the global reserve currency and having deep financial markets. There are few reasonable alternatives for investors, so the United States tends to benefit disproportionately, El-Erian said.

The Fed’s decision to dump another $600 billion into economy, known in the press as QE2, is “inflating the whole world,” El-Erian said, but the policy might ultimately disappoint the United States in terms of its own objective — growth at home.

“The U.S. economy cannot productively absorb all this liquidity. So when all the liquidity is injected into the system, it also goes elsewhere,” El-Erian said. “It’s like pouring water on a hard surface, it splashes everywhere. That explains the large skepticism about QE2 outside the U.S.”

El-Erian repeated Pimco’s assertion that a “new normal” of slow growth and weak job creation will reign for quite a long period.

“Growth will be viewed as unusually sluggish. Unemployment will remain unusually high, and for an unusually long period,” he said. “And we will see an accelerated realignment of the global economy.”

He also said that it’s unlikely that the Chinese currency, the yuan, could soon displace the dollar the world’s reserve currency. Such a move would require the yuan to appreciate too quickly for comfort in China itself.

The currency should be convertible and flexible. But go to China, and they will ask you what you are talking about,” El-Erian said.

“Look at per capita income, they will say. We're number 99 in the world, not number two. At number 99, our responsibility is domestic because we have lots of people that are poor. So we don't want our currency to appreciate and to be volatile. When we get closer to number two, we'll take on global responsibilities.”

Speaking to journalists recently, Federal Reserve Chairman Ben Bernanke laid the responsibility for inflation squarely on other countries, not the Fed.

"I think it's entirely unfair to attribute excess demand pressures in emerging markets to U.S. monetary policy, because emerging markets have all the tools they need to address excess demand in those countries," Bernanke said, answering a question.

"It's really up to emerging markets to find appropriate tools to balance their own growth."
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8)Egypt's economy close to meltdown. Strikes shut down whole sectors


The biggest Arab country with a population of 82 million is on the verge of breakdown as large sections of is economic machinery are shut down by spreading strikes and workers' revolts against managements appointed by the Mubarak regime and Vice President Omar's Suleiman's leadership.

Sources report there are no trains since railway workers declared a general strike; the main state highways are barricaded by protesters. Egypt's 1,000-kilometer long Cairo-Aswan lifeline along the Nile was shut to traffic all day Wednesday, Feb. 9 with no sign that the army or security forces are willing or able to reopen it to traffic.

As protesters continue to pour into Cairo's Tahrir Square, blocked roads are preventing produce reaching shops and markets – or even the soldiers posted in the town centers. Men of the 2nd and 9th divisions on street duty in Cairo have had no food rations for 12 hours. The disruptions threaten Egyptian towns with dire food shortages.

The work forces of the big industrial complexes have downed tools and customs officers have stopped levying toll fees from the approximately 50 ships transiting the Suez Canal every day and netting the Egyptian treasury $3 billion a year, its main source of revenue. Around 1.300,000 foreign tourists have fled the country since the disorders began taking with them another major source of revenue.
The closure of schools was extended Wednesday after teachers refused to go back to classrooms until Mubarak was gone.

Egypt's foreign minister Abul Gheit said that the only way to save Egypt is for the army to step in. He rejected US demands for an immediate repeal of emergency law and accused Washington of trying to impose its will on Cairo and its advice was "unhelpful."

A high-ranking US source in Washington told debkafile's sources that the situation in Egypt is so appalling that a military takeover of the regime is no longer a threat but the only hope of rescuing Egypt from economic meltdown. Yet at this critical moment, he said, "the Egyptian army appears to have no figure capable of saving Egypt."

A fresh surge of popular anti-Mubarak protest ripping across Egypt Tuesday, Feb. 8 has brought the country closer to a military coup to stem the anarchy than at any time since the street caught fire on Jan. 25.

Vice President Omar Suleiman warned a group of Egyptian news editors that the only choice is between a descent into further lawlessness and a military takeover in Cairo. The distinguished political pundit of the 1960s and 1970s Hasnin Heikal saw no other way out of the crisis but a government ruling by the army's bayonets.

The arrival of US naval, marine and air forces in the Suez Canal's Greater Bitter Lake indicated that the crisis was quickly swerving out of control.

Military sources report that the American force consists of the USS Kearsarge Expeditionary Strike Group of six warships. Helicopters on some of their decks are there to carry and drop the 2,200 marines of the 26th Marine Expeditionary Unit which has been bolstered by two special operations battalions.

The flotilla has a rapid strike stealth submarine, the USS Scranton, which is designed to support special forces' operations.

The US strike force has taken up position at a strategic point opposite Ismailia between the west bank of the Suez Canal and its eastern Sinai bank. It is poised for rapid response in the event of the passage of about 40 percent of the world's marine freights through the Suez Canal being threatened or any other extreme occurrence warranting US military intervention.

For a few hours Tuesday, it looked as though Egypt was finally going back to normal after a two-week popular uprising. But then, suddenly, thousands again took to the streets and squares of Egyptian towns - from the Western desert on the Libyan border up to the northern Sinai town of El Arish in the east, recalling Hosni Mubarak's warning of chaos if he were to depart too soon.

They mounted their biggest demonstration of the campaign to oust Mubarak - in Cairo, Alexandria, the Delta Cities, the industrial belt around Mahalla-el-Kebir and the steel city of Heluan, shouting "Death to Mubarak!" and "Hang Mubarak!"
Although reforms and pay hikes have been pledged by the new Egyptian government, large groups of workers, mainly in Cairo, rebelled against state-appointed managements and set up "Revolutionary Committees" to run factories and other work places, including Egyptian state TV and Egypt's biggest weekly "Ros el-Yusuf."

The stock market and the pyramids remained closed and traffic blocked solid on the streets of Cairo.
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