Tuesday, May 31, 2011

Obama neither grasps nor embraces the beauty of democracy.

It is both an historical and self evident fact that peoples who live in democratic and capitalistic societies, are free to vote, engage in economic self-enterprise and whose press is unrestrained by government edict live a more fruitful and productive life. By and large democracies have thrived whereas, those nations who have flirted with Socialism, Communism and other more autocratic, totalitarian attempts at governance have failed by comparison.

That is not to say democracies are immune from failure. In fact, when democracies allow their elected political leaders to take them down alternative roads, in the mistaken belief entitlements are an inherent and unending right, we see, as currently is the case in Greece and other such countries, they can and often will implode. We too are headed in that direction.

GW, for a multitude of reasons, sought to plant a democratic seed in Iraq. In some ways the Iraq seed has both taken root as well as spread to a virtual arboretum in the Middle East, as Arab nation after nation has been rocked to their very foundations by protests and civil strife in pursuit of 'their' form of democracy.

The Middle East Geni is out of the bottle and running wild, so to speak and Middle Eastern democracy is proving to be a work in progress. I dare say its volcanic effect, to date, has belched forth more ash of discontent and upheaval than calm. Where it ultimately leads is anyone's guess. My own is more deaths and ultimately war.

Obama has made his own contribution to what is going on in the Middle East with lofty speeches, pronouncements and empty policy initiatives that have messaged encouragement but resulted in little follow through. Obama stood aside when Iranians protested, he now seems willing to allow Syria's Assad to remain in office after thousands of protesters were killed and/or thrown in prison. In Libya, Obama gave partial support to NATO's effort to dislodge Qaddafi only to prove NATO's weakness more than its potency.

And then we have Egypt, where Mubarak remains in jail, awaiting trial while the influence of The Muslim Brotherhood ascends. Yemen is in turmoil and the prospects of al Qaeda increasing its influence there is a strong, if not a sure, bet. Gaza is fast becoming not an opportunity for freed Palestinians but an arsenal and training ground for radical Islamists to prepare for attacking Israel. Finally, we have Lebanon - a nation once considered the jewel of the Middle East - totally controlled by Iran through Syria and Hezballah and I have yet to mention Iran's growing nuclear efforts and the continuing turmoil in Afghanistan and Pakistan.

As Obama weakens our nation our ability to defend our interests is being crushed by his unbridled spending on specious, and possibly unconstitutional, entitlements. This consequence has not been lost on our allies nor our adversaries. Obama has no effective and/or consistent foreign policy save his lone act of bashing Israel and demanding it back into pre-war borders that are indefensible, notwithstanding his soothing double face pronouncements when he appears before those whose votes and money he needs.

Yes, Obama inherited two wars which his predecessor chose not to pay for but after getting elected largely by bashing GW, Obama has pursued, if not expanded, GW's very policies protesting all along that he was not.

America is becoming a failed nation, in part, because of our historical persistence and flirtation with social policies that were mathematically flawed, partially because politicians continue selling Americans a bill for a free lunch we were intellectually too weak and gullible to refuse and partially because we were the only nation post WW 2, capable of breathing life back into a ravaged world.

That big mouthful said, more importantly we are heading towards a potential debacle because Obama is a failed president, a man totally out of his element both in leadership skills as well as philosophical alignment with our nation's roots and heritage. He neither grasps nor truly embraces the beauty of democracy and capitalism. His misguided, costly policies will be our ruination.

Thousands soon to be subjected to Obama's great legislative triumph 'Obamscare' are even scrambling and begging to opt out of its impact.

Re-elect him at your peril!(See 1,1a, 1b, 1c, 1d, 1e, 1f and 1g below.)
Dr.FOUAD AJAMI provides a dose of reality for U.N. members. (See 2 below.)
1)Stop It Already -- He's Not So Smart
By Dov Fischer

As part of the mainstream media's ongoing effort to sway and distort American thinking, liberal "analysts" for decades continually have conveyed the impression that ideological liberals are just-plain-smarter than mortal humans while conservatives -- even the good ones like the RINOs -- just are not all that smart, and in fact are stupid. Thus, Ronald Reagan was a moron, an actor who shared a bed with a monkey in "Bedtime for Bonzo." George H.W. Bush, despite having achieved extraordinary results during Operation Desert Storm, was no intellectual match for the Clintonites who derisively mocked: "It's the economy, stupid."

You could not call Richard Nixon "stupid," so he instead was "tricky." (By contrast, the mainstream media did not label Bill Clinton as "tricky" even when he tried evading questions based on "what is, is.") The media depicted President Gerald Ford, a graduate of the University of Michigan and a star athlete, as a bumbling oaf. George W. Bush was another dope -- he could not even pronounce "nuclear" the way they do on the East Coast.

By contrast, John F. Kennedy was a Harvard scholar, surrounded by the "best and the brightest." Jimmy Carter was the hardest working of Presidents, whose brilliance enabled him to grasp every detail of governance. Bill Clinton, a Yale Law School graduate, also had been a Rhodes Scholar, again one of our most brilliant Presidents, albeit disbarred ultimately from practicing law before the Supreme Court. And Barack Obama -- well, a graduate of Columbia University's undergraduate school, of Harvard Law School, editor-in-chief ("president") of the Harvard Law Review, a professor of constitutional law at University of Chicago Law School. A genius, with brains to spare.

Even the losers get treated according to the media script. Barry Goldwater was a crazy man, set on launching a nuclear holocaust. Michael Dukakis and John Kerry, on the other hand, were brilliant and brillianter. Al Gore was brilliantest. Meanwhile, Bob Dole tripped off a stage, evoking the Gerald Ford myth. And John McCain? Poor guy can't count the number of houses he owns, while his pig-with-lipstick running mate cannot name a newspaper or a Supreme Court case other than Roe v. Wade. As if, for example, Sarah Palin, Governor of Alaska, governed the state with nothing to do but watch the Real Housewives of MSNBC, never reading a newspaper, never hearing of a Supreme Court case.

So it is time to say: Stop it already. We know that Barack Obama has unique gifts that elude many of us. For example, he manifestly avoids holding banister rails when he descends steps at airports because, unlike Republicans Gerald Ford and Bob Dole, he never slips. We are very impressed, those of us who keep our hands near the banister just in case. We know that he is professorial, says "uh" when thinking, drinks beer with professors. We are very impressed.

We would be more impressed if our transparent President would allow us to see his transcript from Columbia University and share with us how he managed to finance his education there. Or if he would allow us to read his senior thesis. Or allow us to see his transcript from Harvard Law School. Yes, we know he rose to be the president of Law Review, but there is a question that nags on that one, too:

I was Chief Articles Editor of UCLA Law Review and later had the honor of clerking for the Hon. Danny Julian Boggs of the United States Court of Appeals for the Sixth Circuit, one of the nation's most brilliant jurists, who later rose to become Chief Judge of the Sixth Circuit. To be selected as Chief Articles Editor, I had to research and write the Law Review Comment of a lifetime. In time, it was published and deemed good enough that I was named law review chief articles editor. In the years that followed, that Law Review Comment has been cited by federal courts in at least seven published judicial opinions, and in several other unpublished opinions. It has been cited and quoted often in other people's legal scholarship.

And that is "how it works." To be a law review editor-in-chief, a Chief Articles Editor, a Chief Comments Editor of a law review, it is a sine qua non that you publish something fabulous, a real scholarly piece of work. Many dozens of America's finest law students do exactly that every year. Those articles later become part of a vast searchable electronic library of legal scholarship.

The thing is, I cannot find Barack Obama's great piece of work, the scholarship one would presume he researched, drafted, crafted, and honed, that earned him the presidency of the Harvard Law Review. The name "Obama" is the kind of search term that should do the job. But I cannot find any scholarship published by him that reveals the exceptional brilliance that paved the way to his achievement. So there is no published scholarship that refutes the increasing sense so many of us share that we Americans elected a President who maybe is not so smart as the media's campaign hype suggested. Perhaps even a rube. Just as we have been chastened by the Mississippi floods and the Midwestern tornadoes that challenge his power as a "god" to declare the moment when "the rise of the oceans began to slow and our planet began to heal."

Think back to his press conference when, recklessly venturing beyond range of a teleprompter, he described his campaign efforts through the 57 states. If Dan Quayle had said that, people would have thrown potatoes at him. With Obama, though, we are told it was a slip of the tongue. When he could not properly pronounce the military term "corpsman," pronouncing it instead as one would describe a cadaver, the late-night comics did not perceive humor.

When he recently bungled our Mideast policy in the face of the "Arab Spring," where the international Arab street has been screaming that their lives' real concern today is not Zionism but the tyranny, repression, and corruption perpetrated by their dictators, his supporters in the mainstream press praised his brilliant ideas nonetheless. And when the professor soon thereafter had to sit through the first intelligent lecture he had heard since he left school, Israeli Prime Minister Benjamin Netanyahu's thoughtful exposition on Mideast reality, Obama barely could move, planting and gluing his fist firmly in his face, practically gripping the wood off his chair like Captain Kirk during a Klingon attack.

I have long sensed that Prof. Obama never got a fair deal from his critics, who kept asking how he could have sat silently for twenty years through the hate-filled anti-American sermons of the Reverend Jeremiah Wright. I always have assumed the true answer is: he did not realize because he almost-never attended church. Of course no politician can say that to American voters, so Obama was caught in a quandary, ultimately throwing the reverend under the bus, then his grandmother as a racist.

Few of us have publicly lambasted our closest relatives, particularly those who reared us, just to win friends or to make a point. Perhaps we would do so if only we were smarter. Uh...

Dov Fischer, adjunct professor of law at Loyola Law School, is a columnist for several online magazines and is rabbi of Young Israel of Orange County.

1a)Professor Ian Plimer could not have said it better!

If you've read his book you will agree, this is a good summary.

Are you sitting down?

Okay, here's the bombshell. The volcanic eruption in Iceland, since its first spewing of volcanic ash has, in just FOUR DAYS, NEGATED EVERY SINGLE EFFORT made in the past five years to control CO2 emissions on our planet.

Of course you know about this evil carbon dioxide that we are trying to suppress – it’s that vital chemical compound that every plant requires to live and grow, and to synthesize into oxygen for us humans, and all animal life.

It's very disheartening to realize that all of the carbon emission savings you have accomplished while suffering the inconvenience and expense of: driving Prius hybrids, buying fabric grocery bags, sitting up till midnight to finish your kid's "The Green Revolution" science project, throwing out all of your non-green cleaning supplies, using only two squares of toilet paper, putting a brick in your toilet tank reservoir, selling your SUV and speedboat, vacationing at home instead of abroad, nearly getting hit every day on your bicycle, replacing all of your 50 cents light bulbs with $10.00 light bulbs...well, all of those things you have done have all gone down the tubes in just four days.

The volcanic ash emitted into the Earth's atmosphere in just four days - yes - FOUR DAYS ONLY by that volcano in Iceland, has totally erased every single effort you have made to reduce the evil beast, carbon. And there are around 200 active volcanoes on the planet spewing out this crud any one time - EVERY DAY.

I don't really want to rain on your parade too much, but I should mention that when the volcano Mt Pinatubo erupted in the Philippines in 1991, it spewed out more greenhouse gases into the atmosphere than the entire human race had emitted in its entire YEARS on earth. Yes folks, Mt Pinatubo was active for over one year – think about it.

Of course I shouldn't spoil this touchy-feely tree-hugging moment and mention the effect of solar and cosmic activity and the well-recognized 800-year global heating and cooling cycle, which keep happening, despite our completely insignificant efforts to affect climate change.

And I do wish I had a silver lining to this volcanic ash cloud but the fact of the matter is that the bush fire season across the western USA and Australia this year alone will negate your efforts to reduce carbon in our world for the next two to three years. And it happens every year.

Just remember that your government just tried to impose a whopping carbon tax on you on the basis of the bogus “human-caused” climate change scenario.

Hey, isn’t it interesting how they don’t mention “Global Warming” any more, but just “Climate Change” - you know why? It’s because the planet has COOLED by 0.7 degrees in the past century and these global warming bull artists got caught with their pants down.

And just keep in mind that you might yet have an Emissions Trading Scheme – that whopping new tax – imposed on you, that will achieve absolutely nothing except make you poorer. It won’t stop any volcanoes from erupting, that’s for sure.

But hey, relax, give the world a hug and have a nice day!

PS: I wonder if Iceland is buying carbon offsets?

1b)Where are the liberal personal freedom protesters now?

New car purchases starting in June will have a mandatory black box installed
By Kenneth Schortgen Jr, Finance Examiner

Beginning in June of 2011, all new cars manufactured and sold in the United States will be required to have a mandated black box device installed, which can be used to monitor several different physical and technical data points.

On May 24th, a report on the new regulatations to be implemented by the National Highway Traffic Safety Administration (NHTSA) next month expands the program that in February was just in a consideration phase.

The National Highway Traffic Safety Administration (NHTSA) is expected to issue new regulations next month, that will require a black box style data recorder be fitted in all new cars.

Similar in concept to the familiar black boxes used in commercial aircraft for decades, the boxes are expected to record information about speed, seat belt use and brake application in the final seconds leading up to an accident, the data can be retrieved for later analysis. – Dvice.com

The installation and use of these black boxes can have infinite possibilities for local, state, and federal governments to monitor and record data for a number of other revenue programs that are currently under consideration. In March, the Congressional Budget Office (CBO) issued a proposal to institute a tax on mileage to help pay for the federal budget deficit. Additionally, local cities and counties can download information from these black boxes, and they can be used to issue driving citations after the fact in the case of speeding or not wearing a seat belt.

While the concept of installing a black box in new automobiles has several good points in assisting law enforcement and emergency services as to the location and circumstances of an accident or road emergency, policies currently underway by many municipalities and states show that public safety personnel are now being used more as revenue collectors than as first responders to incidents as they occur.

In addition, current mobile devices outside the automobile black box such as androids and tom-toms are being used by law enforcement to retrieve data on customer travel.

That’s a theoretical problem, a real problem is the fact that the data is being used to setup police revenue sources such as speed cameras. A Dutch firm has openly admitted that they use TomTom customer data to setup speed traps. So this anonymized data is actually being used to cost you money for something that isn’t actually dangerous as currently implemented (in other words speed limits aren’t actually a safety limit but an arbitrarily selected number). – blog.christopherburg.com

Selling the public on safety for new policies and provisions, while using the programs to create new revenue streams is becoming more the norm than simply isolated incidents. When the tax on cigarettes became enlarged under the guise of helping users stop the addiction, expanding the tax soon turned into the first concession by local legislatures when they needed new money for programs. Add to this, the creation of red-light and speed devices on local streets and highways to monitor safety quickly became massive revenue streams for municipalities.

With mandatory black boxes being installed in all new cars sold in the US starting next month, the public needs to be aware of the potential these devices can have as means to collect revenue for states and the federal government outside the reported use by the NHTSA as a safety device.

1c)Housing Imperils Recovery
Home Prices Sink to 2002 Levels; Consumer Confidence Falls as Pessimism Grows.

Home prices have sunk to 2002 levels, effectively wiping out almost a decade's worth of home equity across the U.S. and imperiling the fragile economic recovery as Americans confront the falling value of their biggest investment.

A closely watched home-price index released Tuesday, the S&P/Case-Shiller National Index, showed that prices nationwide fell 4.2% in the first quarter after declining 3.6% in the fourth quarter of 2010. The index had seen increases in 2009 and early 2010.

"Home prices continue on their downward spiral with no relief in sight," said David M. Blitzer, chairman of S&P's index committee. The report signals "a double dip in home prices across much of the nation," he said.

That doesn't bode well for the economy, which historically has depended on home buying and other consumer spending to rebound. Falling prices hurt economic growth in a number of ways. Not only do homebuyers curb spending when their homes are losing value, but continued price erosion keeps families stuck in homes they can't sell because they are worth less than what they owe.

Another 5% decline in prices will increase the share of underwater homeowners with mortgages to 28%, up from 23% at the end of 2010, according to CoreLogic Inc. A 10% drop will leave more than one-third of all U.S. borrowers underwater.

Declining home values, rising prices and unemployment continue to weigh on consumer confidence. Another wild card is wrangling over the debt-ceiling in Washington, where lawmakers remain at odds over raising the nation's $2.4 trillion cap.

The Conference Board, a business research group, said Tuesday that its confidence index fell to 60.8 last month, down from 66.0 in April, as Americans grew more pessimistic about the economy.

Economists are similarly downbeat, revising expectations downward for second-quarter growth; Goldman Sachs last week notched its forecast down to 3% from a previous 3.5%.

"If you had to identify one thing in particular that's been responsible for the subpar nature of this cycle, it would be housing," said Joshua Shapiro, chief U.S. economist for MFR Inc. "The bad news is I don't expect it to turn around any time soon."

Economists say it could take years for the housing market to return to health and it will take faster growth, strong job gains and improvements in consumer confidence to make it happen.

Residential construction has subtracted from growth in gross domestic product, the broadest measure of all goods and services produced in the economy, in four of the seven quarters since the recession ended in June 2009. That's a contrast with the past three recoveries when housing added to economic growth for at least a year and half following the downturns in the 1980s, 1990s and early 2000s.

Two years ago, home prices stopped falling as low prices, along with home-buyer tax credits, spurred a surge in sales. But demand collapsed last summer after those credits expired and left markets without enough buyers to absorb a steady flow of foreclosed properties.

Home prices have tumbled for eight straight months, and in March they slid to their lowest level since the start of the 2006-2009 downturn, according the S&P/Case-Shiller monthly 20-City Composite Index.

Indeed, 12 of the 20 metropolitan areas tracked in the index posted new lows in March. Only the Washington, D.C., and Seattle markets saw month-to-month growth of 1.1% and 0.1%, respectively. Minneapolis led the declines, with prices falling 3.7%; on an annual basis, its prices were down 10%.

Sellers such as Julie Lindsay are feeling the pinch. Ms. Lindsay, a retired state worker, listed her three-bedroom house in the St. Paul, Minn., suburb of Centerville for sale in April, thinking it would show better in the spring. "The flowers are planted. Things look nice," she said. "But it's not been great. I've had two people come see it, a couple of phone calls and that's about it."

She has lowered the price to $145,000—and tries not to think about the home's value three or four years ago. "It was worth $200,000 then," she says. "Now the county says it's worth $92,000. Holy mackerel."

Ms. Lindsay suspects a number of more affordable foreclosures nearby are hurting her chances of selling. "You can get newer houses for what I am asking for my old house if you buy a foreclosure," she said.

One bright spot: as prices fall, affordability is returning to pre-bubble levels in a growing number of markets. Prices in Atlanta, Cleveland, Detroit, and Las Vegas have fallen below their January 2000 levels, while prices in Phoenix are only slightly above that mark.

Economists say a shortage of "trade up" buyers has become one of the biggest drags on housing, leaving many markets dependent on first-time buyers and investors who land discounts on foreclosures by making all-cash bids.

"There's just no equity," says Christopher Thornberg, a housing economist at Beacon Economics in Los Angeles. "You add that up and what you're dealing with is, of course, a situation where there's not enough demand to really push the market forward."

Investors are making it harder for some buyers to enter the market. The National Association of Realtors recently reported that while overall sales are weaker this year than last, the volume of homes sold for $100,000 or less in the first quarter—many to investors in all-cash deals—was 8.9% higher than the same period last year.

Case-Shiller quarterly data reflect sales recorded during the January-March period, which were negotiated several months ago. The real-estate industry had hoped strong spring sales would turn the tide.

That hasn't happened. While mortgage rates last week fell to their lowest level of the year, there is little evidence that sales have gained momentum.

Lending remains tight, but buyers are also spooked and unwilling to lock in purchases amid the prospect of further price declines.

"People are reluctant to reduce their price to the place where the consumer says, 'I'm getting a great deal,'" says Ivy Zelman, chief executive of Zelman & Associates, a housing-research firm.

"The market showed a little stability that was largely stimulated by the tax credit, but that stability was very short-lived," said Michael Feder, chief executive of Radar Logic. "To call this a double dip is an overstatement. The fact is we have never really started to recover."

1d)The Fed Has Trapped Itself on Rates
Thanks to borrowing short and lending long, the central bank could end up losing big money.

Markets have been nervous for months about the Federal Reserve's inflationary monetary policy. Main Street is nervous too, as food and fuel prices rise. The recent drop in commodity prices was a correction, but the long-term prospect is for a further pocketbook pinch at the gas pump and checkout counter.

So why doesn't the Fed change course? One possibility is that it feels obliged to help the Treasury cope with the vast deficits generated by the Reid-Pelosi Congress. Another is that raising interest rates to curb inflation could create discomfort for the Federal Reserve itself, given the disordered state of its balance sheet.

The Fed has been committing an ancient sin that has tripped up many a banker: borrowing short and lending long. Although this is a common practice—for example, issuing one-year CDs to depositors to buy 30-year mortgages—it involves an inherent vulnerability. The bank makes its money on the differential between the low interest rate on short-term borrowing and the higher rate it gets on long-term lending. But if its long-term portfolio suddenly loses value, the bank is subject to a large loss that eats into its capital and jeopardizes its ability to continue attracting short-term investment. Banks go broke that way.

Last year, the Fed launched a second round of quantitative easing, QE2, in which it set about to buy $600 billion in Treasury bonds and notes as a form of economic stimulation. As the current sluggishness of the economy makes evident, there hasn't been much stimulus. But the Fed has helped the U.S. Treasury finance a massive federal $1.6 trillion deficit and refinance the maturing portion of the $14 trillion national debt.

The Fed has not bought up Treasury bonds and notes with newly created money. Instead, it has been getting its $600 billion by borrowing from the vast excess reserves owned by the private banks. These are deposits with the Fed in excess of those required by law. They expanded enormously post-2008, when the Fed was creating new money to replace the liquidity the banks had lost in the market crash.

The Fed is borrowing the money cheaply, at only a quarter of a percent interest rate. The Treasurys it buys yield over 3%. Meanwhile, the Fed can claim that it also is "immobilizing" reserves that, if loaned into the economy, could be inflationary. Sounds pretty clever, doesn't it?

It sounds even more clever when you look at last year's robust earnings of the 12 Federal Reserve banks. For 2010, they posted combined earnings of $81.7 billion, about $6 billion shy of the earnings of the entire commercial and savings bank industry. By law, the U.S. Treasury got most of this bonanza, $79.3 billion, with some $1.4 billion going into dividends to member banks and less than $1 billion to expand Reserve bank capital. It looked like nothing short of a heroic performance by the much-criticized Fed.

But the Fed is running a big interest-rate risk. Over the past few years, the Fed has borrowed about $1 trillion in excess reserves from member banks. The banks can call in those loans to the Fed on demand, which is about as short-term as you can get. Should the economy pick up and banks need that money to make private loans, the Fed would have to offer a higher rate to try to hold those reserves. But when interest rates go up, the value of bonds goes down—and so too would the market value of the Fed's $2 trillion-plus portfolio of Treasurys and mortgage-backed securities.

Writing in Forbes.com on May 6, William F. Ford (a former Atlanta Fed president) and Walker F. Todd (who did stints with both the Cleveland and New York Feds as a lawyer and economist) note that a one percentage point rise in long-term interest rates would lower the market value of the Fed's current bond portfolio by $100 billion. That would more than wipe out the $81.7 billion in earnings the Fed reported for 2010.

The reserve banks' skimpy capital base could be wiped out. Federal Reserve banks don't adhere to the asset-to-capital requirements imposed on private banks. And according to Messrs. Ford and Todd, the New York Fed has an "astounding" 98-1 leverage ratio—worse than Fannie Mae in its heyday.

Of course this is all theoretical, given that the Fed isn't obliged to acknowledge a loss on its portfolio until it sells securities and actually realizes the loss. But it does explain why the Fed is uncomfortable with any development that would cause the cost of long-term credit to rise and the value of existing portfolios to fall. It shows no inclination to raise its near-zero interest rate target, whatever critics say.

The QE2 process is due to end this month, not with a shout but a whimper. It didn't stimulate much, and given the dollar's weakness, markets seem to have been savvy about the risks of what the Fed was up to.

Mr. Melloan, a former columnist and deputy editor of the Journal editorial page, is author of "The Great Money Binge: Spending Our Way to Socialism" (Simon & Schuster, 2009).

1e) ObamaCare Makes Us Sicker and Poorer
By M. Catharine Evans

Major corporations, food retailers, and self-insured businesses are slapping whopping deductibles onto their employee medical benefits packages, converting them into catastrophic policies. The high-deductible health insurance plans are designed to lower costs by turning the "reactive" practice of medicine into a "proactive" one.

According to the Robert Wood Johnson Foundation's 2007 Chronic Care Model, a "reactive" medical situation might be described as an individual who notices an odd-shaped mole on her hand and immediately makes an appointment with her physician. In a "proactive" scenario, the patient, unable to pay the out-of-pocket cost for a doctor's visit because of a 2,000% increase in her deductible, prays the mole will disappear on its own.

In place of the comprehensive health care plans with minimal or no deductible, employers are building health/wellness packages designed to protect against catastrophes as opposed to routine care. Employees are exchanging lower deductions from their paychecks for higher medical deductibles, hoping they don't get sick.

The change to higher deductible plans has been dramatic. A March 2011 Rand study showed that in 2009 20% of Americans enrolled in employee sponsored health plans chose the higher deductible coverage. One year later that figure rose to 54%. The study also revealed that deductibles over $1,000 cut costs overall in the first year of enrollment. However, the Rand authors discovered that people with high deductible plans are less likely to get cancer screenings, immunizations, or regular physicals.

But we also found concerning reductions in use of preventive care. This suggests people are cutting both necessary and unnecessary care...and if this persists, it is likely to have health consequences in the future. These cutbacks could cause a spike in health care costs down the road if people end up sicker and need more-intensive treatment.

These "consumer-directed" high deductible plans will be the "key offering" when states set up insurance exchanges under the new heath care mandates scheduled to go into effect in 2014.

The alarming findings of the Rand study have some major employers brushing up on Skinnerian techniques of reward and punishment directed at their employees. Some businesses are reducing the amount of deductibles if their employees agree to a complete company physical, the results of which don't stay in the doctor's office, but end up in the employee's file. You could call it a "waiver for good behavior."

The shock and awe language used by the RWJ foundation in their Chronic Care Model, also cited by the Center for American Progress' 2008 600-page "Change for America," has employers frenetically attempting to modify the behavior of their workers.

The most recent data show that more than 145 million people, or almost half of all Americans, live with a chronic condition. That number is projected to increase by more than one percent per year by 2030, resulting in an estimated chronically ill population of 171 million. Almost half of all people with chronic illness have multiple conditions.

With incendiary and dubious statistics like these, no wonder employers who insure the majority of working Americans are pushing the panic buttons.

John Mackey, CEO of Whole Foods, who wrote a scathing rebuke of ObamaCare in an op-ed for the Wall Street Journal back in 2009, is trying to build a "culture of wellness" for his employees. In November of 2010 the so-called liberal magazine Mother Jones obtained a copy of a memo distributed to Whole Foods employees concerning the changes in their upcoming plans for 2011. Mackey used bold print in the memo to assure the team members the company was not raising premiums, but deductibles would rise and ObamaCare was responsible for the situation:

This is very important for everyone to understand. 100% of the increases in deductibles and out-of pocket-maximums in 2011 compared to 2010 are due to the new federal mandates and regulations. We are not raising premiums for 2011.

We are witnessing unprecedented changes in healthcare costs...as well as a very uncertain federal regulatory climate. It is impossible for the leadership of the company to know or predict ...what is going to happen to health care mandates, regulations or costs for the next several years.

This uncertainty facing large and small businesses, the lifeblood of a thriving free market system, faces everyday people as well. Why rush to the doctor with a cut that looks infected and pay over a hundred dollars to be seen? Many of us would just apply more Neosporin and wait it out. If it turns into a full blown staph infection we could end up in the ER with costlier complications. Where's the preventive component in this situation?

Dr. Donald Berwick, the Administrator for the Centers for Medicare and Medicaid Services (CMS), with his "person-centered" care systems suggests a patient should act as the physician's "peer" in determining treatment. In a NYT article entitled "Letting the Patient Call the Shots," Dr. Berwick, using his characteristic benevolent babble, suggests that physicians need to be relieved of the burden of having to "deny or exclude" patient care. Instead, he delegates the burden of changing the healthcare system to "leaders, the stewards, the people who create the organizations where the workforce works." For Berwick leaving his fellow doctors who trained for 12 years in charge is too "draining on the spirit."

Employers like John Mackey got the message. The ominous economic outlook has forced business leaders to go along with Dr. Berwick's systemic changes. The Whole Foods CEO wrote in his memo to employees:

...our doctors are trained in first aid, surgery, and in the use of prescription drugs. They are not trained in either healthy eating or healthy living and in many cases they know far less than many of their patients about these two essential criteria for wellness.

High deductible plans appear to be the only game in town for consumers with employer based insurance if they don't want to see their weekly paychecks dwindling even lower. That the plans complement the "person-centered" model touted by Berwick at CMS is a plus for the administration. Their popularity will help to achieve "a transformation of health care, from a system that is essentially reactive -- responding mainly when a person is sick -- to one that is proactive and focused on keeping a person as healthy as possible."

What's wrong with changing my diet and lifestyle to become healthier? Nothing, until my personal choices of what to eat and how to play are compromised by the threat of losing my job. When companies and the government get into the business of regulating what we eat in our own homes, we are no longer living in a free America.

Since many of us will now be paying premiums on top of all doctor's bills up to $2,000 per year, you would think there would be a bipartisan revolt. Not so. In fact Tom Scully, George W. Bush's director of CMS, praised Berwick in early May, saying, "I may not agree with him substantively on everything, but he's definitely doing a good job."

In addition to clueless people like Scully, we have million dollar nonprofits like the Catholic Health Association (CHA) barreling ahead with implementation of ObamaCare. The CHA, the same organization instrumental in pushing through the Patient Protection and Affordable Care Act, is sponsoring a major conference this weekend with keynote speakers Peter Orszag, former Obama OMB director and Dr. Donald Berwick. The 3-day assembly will host the leaders of major healthcare and insurance corporations discussing person-centered care and the necessity of "a new governance model in healthcare reform."

When will we the people get a say?

1f)Investor's Daily Editorial: Obama Recovery Still Feeble After Two Years

Economy: Without a lot of fanfare, the Obama economic recovery officially turned 2 this month. Anyone think we're better off than we were two years ago?

On Tuesday, a trio of reports gave fresh evidence that the answer to this question is no.

Single family home prices dropped in March to their lowest level since April 2009; the consumer Confidence Index tumbled to a six-month low of 60.8; and regional manufacturing is slowing. In the Chicago area, it fell to its lowest level since November 2009.

Yet if you listened to President Obama and his cheerleaders in the press over the past two years, the answer should have been a resounding yes.

Obama promised way back in February 2009 that his $830 billion stimulus plan would unleash "a new wave of innovation, activity and construction" and "ignite spending by businesses and consumers."

In June 2010, he announced that the recovery was "well under way" and that it "is getting stronger by the day." A couple months later, Treasury Secretary Timothy Geithner penned a New York Times op-ed headlined "Welcome to the Recovery."

And all along, media simply parroted the White House line, extolling every "green shoot" they could find, celebrating every time a handful of jobs got created, while constantly acting surprised by the ongoing "unexpected" bad economic news.

But the fact is that the Obama recovery is one of the worst ever. Certainly the worst since the Great Depression. It's so bad, in fact, that even 24 months after the recession officially ended there are few places beyond the stock market and corporate profits that have shown much, if any, improvement. A few examples:

Jobs: The number of people with jobs has barely changed since June 2009 — up just 0.4%.

• Unemployment: While the unemployment rate has dropped a bit, the number of long-term unemployed is up by a third, and the average length of unemployment is now a staggering 38 weeks.

• Earnings: Median weekly earnings are down slightly between Q3 2009 and Q1 2011, after adjusting for inflation, according to the Bureau of Labor Statistics.

• Housing prices: The National Association of Realtors reports that median price for existing home sales dropped 10% since June 2009.

• Gas prices: Pump prices climbed 52% over the past two years, according to the Department of Energy.

Yet, incredibly, Obama continues to escape blame for this sorry state of affairs. A Rasmussen survey in May found 54% of the public still blames President Bush, while just 39% blame Obama's policies.

The disconnect is stunning, but it nevertheless offers Republicans a huge opportunity, if they will seize it, to decisively claim the pro-growth label.

To do that, they first need to hammer home the fact that Obama's growth-smothering policies are solely to blame for the economy's two-year rut. Then they must focus on clearly needed pro-growth tax cuts and regulatory relief to turbocharge the private sector.

Sure, spending cuts and Medicare reform are important issues. But the millions of families still worried about keeping their jobs and their homes also need to hear how the GOP can get the economy moving again.

1g)U.S. Manufacturing Growth Slows More Than Estimated as ISM Index Hits 53.5
By Alex Kowalski and Shobhana Chandra

The Institute for Supply Management’s factory index fell to 53.5 in May from 60.4 the prior month.

Manufacturing in the U.S. expanded in May at the slowest pace in more than a year, reflecting higher costs of commodities and an interruption in the supply of parts after Japan’s earthquake.

The Institute for Supply Management’s factory index fell more than projected to 53.5 last month, the lowest level since September 2009, from 60.4 in April, the Tempe, Arizona-based group said today. Economists projected the gauge would drop to 57.1, according to the median forecast in a Bloomberg News survey.

Bonds rose and stocks slid as the report, combined with recent data on consumer spending, housing and jobs, added to concern the economy is struggling to overcome a first-quarter slowdown. Deere & Co. (DE), the world’s largest farm-equipment maker, raised its 2011 earnings forecast less than analysts estimated as disruptions from Japan and costlier inputs lowered profit.

“The extent of the slowdown in manufacturing is a concern,” said Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez Inc. in New York, who had forecast the index would drop to 55. “The question is, how sustained is it going to be. There’s plenty of reason to be cautious about growth.”

The Standard & Poor’s 500 Index slid 1.2 percent to 1,329.12 at 10:54 a.m. in New York. Benchmark 10-year note yields dropped nine basis points, or 0.09 percentage point, to 2.97 percent, the lowest since Dec. 7.

A purchasing managers’ index for China showed the slowest pace of expansion in nine months, while the equivalent measure for the euro area fell to a seven-month low.

ADP Report
Companies in the U.S. added 38,000 workers last month, less than forecast and the smallest increase since September, according to figures today from ADP Employer Services. The median estimate in the Bloomberg survey called for a 175,000 advance for May.

Planned firings dropped 4.3 percent to 37,135 last month from May 2010, according to figures from Chicago-based Challenger, Gray & Christmas Inc. Government and nonprofit agencies had the most cutbacks.

The ISM’s production index decreased to 54.0 from 63.8 in April. The new orders measure fell to 51.0, the lowest since June 2009, from 61.7, and the gauge of export orders declined to 55.0 from 62.0.

The employment gauge fell to 58.2, the lowest since October 2010, from 62.7 in the prior month.

Prices Paid
The index of prices paid slipped to 76.5 from 85.5. A measure of supplier deliveries decreased to 55.7 from 60.2.

The measure of orders waiting to be filled dropped to 50.5 from 61. The inventory index declined to 48.7 from 53.6, while a gauge of customer stockpiles fell to 39.5 from 40.5.

Manufacturing, which has been benefiting from a pickup in exports to countries like China and Brazil, began to cool in the aftermath of Japan’s earthquake in March. Industrial production stalled in April as disruptions related to Japan’s crisis led to a plunge in U.S. auto output, a Federal Reserve report showed May 17.

The Institute for Supply Management-Chicago Inc. business barometer fell to the lowest level since November 2009, the group said yesterday. Factories in the Philadelphia region grew in May at the slowest pace in seven months, a Federal Reserve report showed May 19.

Honda Motor Co., Japan’s third-largest carmaker, said its North America and China vehicle production will return to normal in August as parts suppliers recover from Japan’s record earthquake.

Honda Civic
In the U.S., production of Honda’s Civic small cars will continue to be slowed by limited supplies of some parts, the Tokyo-based company said in a statement May 26. Production of the 2012 Civic, which went on sale in April, will be at about 50 percent, it said.

“The light at the end of the tunnel is glowing brighter for us, represented by this significant improvement in our production situation,” John Mendel, executive vice president of U.S. sales, said in the statement.

Moline, Illinois-based Deere, the world’s largest maker of farm equipment, said on May 18 that earnings will be $2.65 billion in the fiscal year through October, more than the $2.5 billion forecast in February.

The manufacturer’s forecast includes a negative impact of about $300 million in sales and $70 million in operating profit because of disruptions from Japan. Global demand for agriculture and construction equipment will drive profits, the company said.

Weaker Note
The U.S. economy began 2011 on a weaker note, growing at a 1.8 percent annual rate in the first three months of this year after expanding at a 3.1 percent pace in the fourth quarter, according to Commerce Department figures.

The slowdown will “probably prove temporary,” with manufacturing data and financial markets improving, Federal Reserve Bank of New York President William C. Dudley said during a May 6 press conference.

Dudley said he expects the impact of rising commodity prices on inflation to be “transitory.”
------------------------------------------------------------------------------------------------------------------------- 2)The U.N. Can't Deliver a Palestinian State
The General Assembly vote that created Israel was the culmination of decades of hard work on the ground

It had been quite a scramble, the prelude to the vote on Nov. 29, 1947, on the question of the partition of Palestine. The United Nations itself was only two years old and had just 56 member states; the Cold War was gathering force, and no one was exactly sure how the two pre-eminent powers, the United States and the Soviet Union, would vote. The Arab and Muslim states were of course unalterably opposed, for partition was a warrant for a Jewish state.

In the end, the vote broke for partition, the U.S. backed the resolution, and two days later the Soviet Union followed suit. It was a close call: 10 states had abstained, 13 had voted against, 33 were in favor, only two votes over the required two-thirds majority.

Now, some six decades later, the Palestinians are calling for a vote in the next session of the General Assembly, in September, to ratify a unilateral declaration of Palestinian statehood. In part, this is an appropriation by the Palestinians of the narrative of Zionism. The vote in 1947 was viewed as Israel's basic title to independence and statehood. The Palestinians and the Arab powers had rejected partition and chosen the path of war. Their choice was to prove calamitous.

By the time the guns had fallen silent, the Yishuv, the Jewish community in Palestine, had held its ground against the combined armies of Egypt, Jordan, Syria and Iraq. Its forces stood on the shores of the Red Sea in the south, and at the foot of the Golan Heights in the north. Palestinian society had collapsed under the pressure of war. The elites had made their way to neighboring lands. Rural communities had been left atomized and leaderless. The cities had fought, and fallen, alone.

Palestine had become a great Arab shame. Few Arabs were willing to tell the story truthfully, to face its harsh verdict. Henceforth the Palestinians would live on a vague idea of restoration and return. No leader had the courage to tell the refugees who had left Acre and Jaffa and Haifa that they could not recover the homes and orchards of their imagination.

Some had taken the keys to their houses with them to Syria and Lebanon and across the river to Jordan. They were no more likely to find political satisfaction than the Jews who had been banished from Baghdad and Beirut and Cairo, and Casablanca and Fez, but the idea of return, enshrined into a "right of return," would persist. (Wadi Abu Jamil, the Jewish quarter of the Beirut of my boyhood, is now a Hezbollah stronghold, and no narrative exalts or recalls that old presence.)

History hadn't stood still. The world was remade. In 1947-48, when the Zionists had secured their statehood, empires were coming apart, borders were fluid, the international system of states as we know it quite new. India and Pakistan had emerged as independent, hostile states out of the partition of the subcontinent in 1947, and Israel had secured its place in the order of nations a year later. Many of the Arab states were still in their infancy.

But the world is a vastly different place today. The odds might favor the Palestinians in the General Assembly, but any victory would be hollow.

The Palestinians have misread what transpired at the General Assembly in 1947. True, the cause of Jewish statehood had been served by the vote on partition, but the Zionist project had already prevailed on the ground. Jewish statehood was a fait accompli perhaps a decade before that vote. All the ingredients had been secured by Labor Zionism. There was a military formation powerful enough to defeat the Arab armies, there were political institutions in place, and there were gifted leaders, David Ben-Gurion pre-eminent among them, who knew what can be had in the world of nations.

The vote at the General Assembly was of immense help, but it wasn't the decisive factor in the founding of the Jewish state. The hard work had been done in the three decades between the Balfour Declaration of 1917 and the vote on partition. Realism had guided the Zionist project. We will take a state even if it is the size of a tablecloth, said Chaim Weizmann, one of the founding fathers of the Zionist endeavor.

Sadly, the Palestinian national movement has known a different kind of leadership, unique in its mix of maximalism and sense of entitlement, in its refusal to accept what can and can't be had in the world of nations. Leadership is often about luck, the kind of individuals a people's history brings forth. It was the distinct misfortune of the Palestinians that when it truly mattered, and for nearly four decades, they were led by a juggler, Yasser Arafat, a man fated to waste his people's chances.

Arafat was neither a Ben-Gurion leading his people to statehood, nor an Anwar Sadat accepting the logic of peace and compromise. He had been an enemy of Israel, but Israel had reached an accord with him in 1993, made room for him, and for a regime of his choice in Gaza. He had warred against the United States, but American diplomacy had fallen under his spell, and the years of the Clinton presidency were devoted to the delusion that the man could summon the courage to accept a practical peace.

But Arafat would do nothing of the kind. Until his death in 2004, he refrained from telling the Palestinians the harsh truths they needed to hear about the urgency of practicality and compromise. Instead, he held out the illusion that the Palestinians can have it all, from the River Jordan to the Mediterranean. His real constituents were in the refugee camps in Lebanon and Syria and Jordan, and among the Palestinians in Kuwait. So he peddled the dream that history's verdict could be overturned, that the "right of return" was theirs.

There was hope that the Arafat legacy would go with him to the grave.The new Palestinian Authority leader Mahmoud Abbas had been a lieutenant of Arafat's, but there were hints of a break with the Arafat legacy. The alliance between Fatah and Hamas that Mr. Abbas has opted for put these hopes to rest. And the illusion that the U.N. can break the stalemate in the Holy Land is vintage Arafat. It was Arafat who turned up at the General Assembly in 1974 with a holster on his hip, and who proclaimed that he had come bearing a freedom fighter's gun and an olive branch, and that it was up to the U.N. not to let the olive branch fall from his hand.

For the Palestinians there can be no escape from negotiations with Israel. The other Arabs shall not redeem Palestinian rights. They have their own burdens to bear. In this Arab Spring, this season of popular uprisings, little has been said in Tunis and Cairo and Damascus and Sanaa about Palestine.

The General Assembly may, in September, vote to ratify a unilateral declaration of Palestinian statehood. But true Palestinian statehood requires convincing a decisive Israeli majority that statehood is a herald for normalcy in that contested land, for Arabs and Jews alike.

Mr. Ajami is a professor at the Johns Hopkins School of Advanced International Studies and a senior fellow at the Hoover Institution. He is co-chair of the Hoover Working Group on Islamism and the International Order.

Monday, May 30, 2011

I'll Take The Contrary Road Regarding Obama's Chances!

Obama has brought change - more people on food stamps and his picture is also on a stamp!


Once you know the facts, it's understandable;

So Arnold approaches Maria and says "Maria, the maid wants another raise, and Maria after a little thought says.... screw her.

The rest is history
De Borchgrave on our deficits and what it means for future military spending.

Some 15 years ago, Bernard Schwartz. Chairman of Loral, told me the only reason we continued flying piloted military planes was for the glory because we had the capability, even then, of pilotless drones etc.

(See 1 below.)
Read and scroll all the way to the bottom. What is wrong with us? (See 2 below.)
Obama the hostile. Dennis Miller, who is not Jewish, offers some cogent thoughts that are worth reading. (See 3 and 3a below.)
Merkel trying to save Euorpe but if Germany rids itself of nuclear power it will become more dependent on Russian energy sources and thus, come increasingly under Russian influence. (See 4 below.)
Mark Mobius and Templeton were clients when I was more active and he is a very bright man. So is Steve Sjuggerud. Wall Street abounds with conflicting views.
(See 5 below.)
Not your conventional thinking but it corresponds to mine. Then Hanson on Obama
s campaign startegy. (See 6 and 6a below.)
California your failed state. (See 7 belw.)
1)Shining citadel redux
By Arnaud de Borchgrave

In Jan. 1981, when Ronald Reagan was sworn in as the 40th U.S. president, he declared the federal budget to be out of control. The deficit had reached $74 billion, and the federal debt was at $930 billion. Mr. Reagan said a stack of $1,000 bills equivalent to what Uncle Sam owed would be 67 miles high. Chump change and height today.

Now that same stack of $1,000 bills would reach 900 miles high. In $1 bills, it would pile up to the moon - and back. Not once, but twice. Like a drunken sailor, America continues to borrow about $125 billion a month - $10 billion of it from China. The U.S. owes China $1.3 trillion.

Now at $14.3 trillion, the national debt ceiling must be raised again by Aug. 2 if the U.S. is to avoid default. The lords of Capitol Hill are playing a dangerous game of chicken, as no one wants to assume the responsibility of drastically curbing federal spending and raising taxes at the same time.

Default would rock global markets. By comparison, the Great Depression would look like children losing their weekly allowance. And the rest of the world would begin to look to China as the next global supreme power.

With the SEAL raid that killed Osama bin Laden in his secret lair a short walk from Pakistan's prestigious military academy, we have dramatic evidence that small-scale operations can be more effective for changing the course of history than multidivision invasions that inadvertently hand victory to our enemies.

The intelligence bonanza from that raid included a large collection of memory sticks, flash drives, digital audio and video files, printed material, computer equipment, recording devices and handwritten documents. - the single largest collection of senior terrorist materials ever.

The intel already has been used to strike al Qaeda targets in other parts of the world.

The $1 trillion we blew on Iraq killed Saddam Hussein, but it was a pyrrhic victory that enhanced Iran's power and influence in Iraq. As the last 40,000 U.S. troops prepare to leave, Prime Minister Nouri al-Maliki knows he has to live in proximity with Iran along a 713-mile border from the Persian Gulf to Turkey's southeastern frontier.

The original U.S. strategic plan was to knock off the Iraqi dictatorship, whose demise would prove contagious in Syria and, with pro-Western Jordan, give Israel 25 years of security.

The U.S. can no longer afford a global military strategy and a defense budget that is almost as large as those of the rest of the world combined. Aircraft carrier task forces cost $30 billion or more to build, including aircraft and escort ships. Annual running costs: $5 billion plus.

Eleven carrier task forces are operational, though cost cutters see barely sufficient resources for eight such carrier groups. This would save about $100 billion. The Navy's current budget: $150 billion.

Yet conservative think-tank experts are calling for a larger defense budget in order to keep the U.S. dominant on land, sea and air. Carrier-borne F-18 Super Hornets could have reduced Osama bin Laden's Abbottabad house and compound to dust, but that would have destroyed all the intelligence.

The holy grail of defense spending is not as holy as it was before Abbottabad.

Outspending and out-arming the Soviet Union worked at a time when the Soviet empire was on the verge of internal economic collapse. The "American Century" was the politico-military-economic miracle of the 20th century. If America has lost some of its luster in the early 21st century, the loss is entirely self-inflicted.

The Iraq war was an expensive mistake. The Afghan war was an ill-thought-through, expensive punitive expedition that dragged in 42 other nations and, thus far, has cost the hapless U.S. taxpayer almost half a trillion dollars - with still a few years to go before all the troops come home.

Afghanistan's Taliban regime was ousted in a couple of weeks by a U.S. force of 410 men (110 CIA operatives and 300 Special Forces) led by CIA agent Hank Crumpton. The al Qaeda contingent, led by Osama bin Laden, exited into Pakistan during the battle of Tora Bora in December 2001.

Delusions of grandeur, or whatever it was, kept us spending billions on weapons systems for the last war, not the cyber- and robotic conflicts of the future.

The F-35 will be the last manned fighter bomber built. And the Pentagon estimates the total cost of owning and operating the fleet of 2,500 F-35s at $1 trillion dollars over the estimated 50-year life span of the aircraft. And that doesn't include the $385 billion the Department of Defense will spend to buy them.

The Air Force is training more drone operators than fighter and bomber pilots, a fundamental shift for the 62-year-old service.

Few of the Air Force Academy's 4,000 cadets will ever get to fly manned aircraft.

In the future, even aerial dogfights will be fought by drones piloted by remote control from hundreds of miles away. The Global Explorer, with a wingspan the same size as a Boeing 747, flies at 65,000 feet for several days, well out of range of most anti-aircraft missiles, and monitors in a single shot an area of almost 300,000 square miles. All of Afghanistan is 252,000 square miles.

Global Explorer costs less ($30 million) and is more effective than a spy satellite. The stealthy and speedy Phantom Ray can dart in and out of enemy territory to destroy a preprogrammed target. The X-47B is the drone look-alike of a B-2 bomber.

There are now 7,000 drones of various types in the U.S. arsenal.

In Afghanistan, neither old nor new bells and whistles will prevent Taliban from coming back, albeit "reformed" with pledges to keep out bin Laden and his terrorist mob. In fact, al Qaeda fighters took a powder during the battle of Tora Bora 10 years ago. And killing Afghan guerrillas was not why friends and allies originally signed on.

Arnaud de Borchgrave is editor-at-large of The Washington Times and of United Press International.
2) How they vote in the United Nations:

Below are the actual voting records of various Arabic/Islamic States which are recorded in both the US State Department and United Nations records:

Kuwait votes against the United States 67% of the time

Qatar votes against the United States 67% of the time

Morocco votes against the United States 70% of the time

United Arab Emirates votes against the U. S. 70% of the time.

Jordan votes against the United States 71% of the time.

Tunisia votes against the United States 71% of the time.

Saudi Arabia votes against the United States 73% of the time.

Yemen votes against the United States 74% of the time.

Algeria votes against the United States 74% of the time.

Oman votes against the United States 74% of the time.

Sudan votes against the United States 75% of the time.

Pakistan votes against the United States 75% of the time.

Libya votes against the United States 76% of the time.

Egypt votes against the United States 79% of the time.

Lebanon votes against the United States 80% of the time.

India votes against the United States 81% of the time.

Syria votes against the United States 84% of the time.

Mauritania votes against the United States 87% of the time.

U S Foreign Aid to those that hate us:

Egypt, for example, after voting 79% of the time against the United States,
still receives $2 billion annually in US Foreign Aid.

Jordan votes 71% against the United States
And receives $192,814,000 annually in US Foreign Aid.

Pakistan votes 75% against the United States
Receives $6,721,000,000 annually in US Foreign Aid.

India votes 81% against the United States
Receives $143,699,000 annually.

Perhaps it is time to get out of the UN and give the tax savings back to the American workers who are having to skimp and sacrifice to pay the taxes.
-------------------------------------------------------------------------------------------------------------------------3)Where Obama is leading Israel

By Caroline B. Glick

Since the president's policy speech, Obama has taken a series of steps that only reinforce the charge he's the most hostile US leader the Jewish state has ever faced

In the aftermath of US President Barack Obama's May 19 speech on the Middle East, his supporters argued that the policy toward Israel and the Palestinians that Obama outlined in that speech was not anti-Israel. As they presented it, Obama's assertion that peace negotiations between Israel and the Palestinians must be based on the 1967lines with agreed swaps does not mark a substantive departure from the positions adopted by his predecessors in the Oval Office.

But this claim is exposed as a lie by previous administration statements. On November 25, 2009, in response to Prime Minister Binyamin Netanyahu's acceptance of Obama's demand for a 10-month moratorium on Jewish property rights in Jerusalem, Judea and Samaria, the State Department issued the following statement: "Today's announcement by the Government of Israel helps move forward toward resolving the Israeli-Palestinian conflict.

We believe that through good-faith negotiations the parties can mutually agree on an outcome which ends the conflict and reconciles the Palestinian goal of an independent and viable state based on the 1967 lines, with agreed swaps, and the Israeli goal of a Jewish state with secure and recognized borders that reflect subsequent developments and meet Israeli security requirements."

In his speech, Obama stated: "The United States believes… the borders of Israel and Palestine should be based on the 1967 lines with mutually agreed swaps, so that secure and recognized borders are established for both states."

That is, he took "the Palestinian goal" and made it the US's goal. It is hard to imagine a more radically anti-Israel policy shift than that.

And that wasn't Obama's only radically anti-Israel policy shift. Until his May 19 speech, the US agreed with Israel that the issue of borders is only one of many — including the Palestinians' rejection of Israel's right to exist, their demand to inundate Israel with millions of foreign Arab immigrants, their demand for control over Israel's water supply and Jerusalem — that have to be sorted out in negotiations. The joint US-Israeli position was that until all of these issues were resolved, none of them were resolved.

The Palestinians, on the other hand, claim that before they will discuss any of these other issues, Israel has to first agree to accept the indefensible 1967 boundaries as its permanent borders. This position allows the Palestinians to essentially maintain their policy of demanding that Israel make unreciprocated concessions that then serve as the starting point for further unreciprocated concessions.

It is a position that is antithetical to peace. And on May 19, by stipulating that Israel must accept the Palestinian position on borders as a precondition for negotiations, Obama adopted it as US policy.

SINCE THAT speech, Obama has taken a series of steps that only reinforce the sense that he is the most hostile US president Israel has ever faced. Indeed, when taken together, these steps raise concern that Obama may actually constitute a grave threat to Israel.

Friday's Yediot Aharonot reported on the dimensions of the threat Obama may pose to the Jewish state. The paper's account was based on administration and Congressional sources. The story discussed Obama's plans to contend with the Palestinian plan to pass a resolution at the UN General Assembly in September endorsing Palestinian statehood in Jerusalem, Judea, Samaria and Gaza.

According to Yediot, during his meeting with Obama on May 20, Netanyahu argued that in light of the Palestinians' automatic majority support at the General Assembly, there was no way to avoid the resolution.

Netanyahu reportedly explained that the move would not be a disaster. The General Assembly overwhelmingly endorsed the PLO's declaration of independence in 1988.

And the sky still hasn't fallen.

Obama reportedly was unconvinced. For him, it is unacceptable to be in a position of standing alone with Israel voting against the Palestinian resolution. Obama's distaste for standing with Israel was demonstrated in February when a visibly frustrated US Ambassador Susan Rice was forced by Congressional pressure to veto the Palestinians' Security Council draft resolution condemning Israel for refusing to prohibit Jews from building in Jerusalem, Judea and Samaria.

Yediot's report asserts that Obama refused to brief Netanyahu on the steps his administration is taking to avert such an unpalatable option. What the paper did report was how George Mitchell — Obama's Middle East envoy until his resignation last week — recommended Obama proceed on this issue.

According to Yediot, Mitchell recommended that Obama work with the Europeans to draft a series of anti-Israel resolutions for the UN Security Council to pass. Among other things, these resolutions, which Mitchell said would be "painful for Israel," would include an assertion that Jewish building in Jerusalem, Judea and Samaria is illegal.

That is, Mitchell recommended that Obama adopt as US policy at the Security Council past Palestinian demands that Congress forced Obama to reject just months ago at the Security Council. The notion is that by doing so, Obama could convince the Palestinians to water down the even more radically anti-Israel positions they are advancing today at the UN General Assembly that Congressional pressure prevents him from supporting.

Since General Assembly resolutions have no legal weight and Security Council resolutions do carry weight, Mitchell's policy represents the most anti-Israel policy ever raised by a senior US official. Unfortunately Obama's actions since last week suggest that he has adopted the gist of Mitchell's policy recommendations.

First there was his speech before AIPAC. Among other things, Obama used the international campaign to delegitimize Israel's right to exist as a justification for his policies of demanding that Israel capitulate to the Palestinians' demands, which he has now officially adopted as US policy.

As he put it, "there is a reason why the Palestinians are pursuing their interests at the United Nations. They recognize that there is an impatience with the peace process — or the absence of one. Not just in the Arab world, but in Latin America, in Europe, and in Asia. That impatience is growing, and is already manifesting itself in capitals around the world."

From AIPAC, Obama moved on to Europe. There he joined forces with European governments in an attempt to gang up on Israel at the G8 meeting.

Obama sought to turn his embrace of the Palestinian negotiating position into the consensus position of the G8. His move was scuttled by Canadian Prime Minister Stephen Harper, who refused to accept any resolution that made mention of borders without mentioning the Palestinian demand to destroy Israel through Arab immigration, Israel's right to defensible borders, or the Palestinians' refusal to accept Israel's right to exist.

If Harper had not stood by Israel, the G8's anti-Israel resolution endorsing the Palestinian negotiating position could have formed the basis of a US-sponsored anti-Israel Security Council resolution.

Israelis planning their summer trips should put Canada at the top of their lists.

THE FINAL step Obama has taken to solidify the impression that he does not have Israel's best interests at heart, is actually something he has not done. Over the past week, Fatah leaders of the US-backed Palestinian Authority have made a series of statements that put paid any thought that they are interested in peace with Israel or differ substantively from their partners in Hamas.

At the Arab League meeting in Qatar on Saturday, PA President Mahmoud Abbas said the Palestinian state "will be free of all Jews."

Last week the US-supported Abbas denied the Jewish connection to the land of Israel and claimed absurdly that the Palestinians were 9,000 years old.

Equally incriminating, in an interview last week with Aaron Lerner from the IMRA newsgathering website, Palestinian negotiator Nabil Shaath said that now that Hamas was the co-leader of the PA with Fatah, responsibility for continuing to hold IDF St.-Sgt. Gilad Schalit hostage devolved from Hamas to the PA. And the PA would continue to hold him hostage.

Shaath's statement makes clear that rather than moderating Hamas, the Fatah-Hamas unity deal is transforming Fatah into Hamas.

And yet, Obama has had nothing to say about any of this.

Obama's now undeniable antipathy for Israel and his apparent willingness to use his power as American president to harm Israel at the UN and elsewhere guarantee that for the duration of his tenure in office, Israel will face unprecedented threats to its security. This disturbing reality ought to focus the attention of all Israelis and of the American Jewish community. With the leader of the free world now openly siding with forces bent on Israel's destruction, the need for unity has become acute.

MADDENINGLY, HOWEVER, at this time of unprecedented danger we see the Israeli media have joined ranks with Kadima in siding with Obama against Israel in a joint bid to bring down Netanyahu's government. Yediot Aharonot, Maariv, Haaretz, Channel 2, Channel 10, Army Radio and Israel Radio's coverage of Netanyahu's visit and its aftermath was dominated by condemnations of the prime minister, and praise for Obama and opposition leader Tzipi Livni, who called for Netanyahu to resign.

The fact that polling data showed that only 12 percent of Jewish Israelis regard Obama as pro-Israeli and that the overwhelming majority of the public with an opinion believes Netanyahu's visit was a success made absolutely no impression on the media. The wall-to-wall condemnations of Netanyahu by the Israeli media lend the impression that Israel's leading reporters and commentators are committed to demoralizing the public into believing that Israel has no option other than surrender.

Then there is the American Jewish leadership. And at this critical time in US-Israel relations, the American Jewish leadership is either silent or siding with Obama. Right after Obama's shocking speech on May 19, the Anti-Defamation League released a statement endorsing it. Stand With Us congratulated Obama for his AIPAC speech.

With the notable exceptions of the Zionist Organization of America and the Committee for Accuracy in Middle Eastern Reporting in America (CAMERA), leaders of American Jewish organizations have refused to condemn Obama's anti-Israel positions.

Their silence becomes all the more enraging when placed against the massive support Israel receives from rank-and-file American Jews. In a survey of American Jews taken by CAMERA on May 16-17, between 75% and 95% of American Jews supported Israel's position on defensible borders, Jerusalem, Palestinian "refugees," Palestinian recognition of Israel's right to exist and the right of Jews to live in a Palestinian state.

The refusal of most American Jewish leaders, the Israeli media and Kadima to condemn Obama today makes you wonder if there is anything the US president could do to convince them to break ranks and stand with Israel and with the vast majority of their fellow Jews. But it is more than a source of wonder. It is a reason to be frightened. Because Obama's actions over the past two weeks make clear to anyone willing to see that in the age of Obama, silence is dangerous.

JWR contributor Caroline B. Glick is the senior Middle East Fellow at the Center for Security Policy in Washington, DC and the deputy managing editor of The Jerusalem Post, where her column appears.

3a)Here we go:

The Palestinians want their own country. There's just one
thing about that: There are no Palestinians. It's a made up
word. Israel was called Palestine for two thousand years.
Like 'Wiccan,' 'Palestinian' sounds ancient but is really a
modern invention. Before the Israelis won the land in the
1967 war, Gaza was owned by Egypt, the West Bank was owned
by Jordan, and there were no Palestinians.'

As soon as the Jews took over and started growing oranges as
big as basketballs, what do you know, say hello to the
'Palestinians',weeping for their deep bond with their lost
'land' and 'nation'.

So for the sake of honesty, let's not use the word
'Palestinian' any more to describe these delightful folks,
who dance for joy at our deaths until someone points out
they're being taped. Instead, let's call them what they are:
'Other Arabs Who Can't Accomplish Anything In Life And Would
Rather Wrap Themselves In The Seductive Melodrama Of Eternal
Struggle And Death.' I know that's a bit unwieldy to expect
to see on CNN. How about this then: 'Adjacent Jew-Haters'.
Okay, so the Adjacent Jew-Haters want their own country.
Oops, just one more thing: No, they don't . They could've
had their own country. Anytime in the last thirty years,
especially several years ago at Camp David. But If you have
your own country, you have to have traffic lights and
garbage trucks. And Chambers of Commerce, and worse, you
actually have to figure out some way to make a living.

That's no fun. No, they want what all the other Jew-Haters
in the region want: Israel. They also want a big pile of
dead Jews, of course that's where the real fun is -- but
mostly they want Israel.

Why? For one thing, trying to destroy Israel - or 'The
Zionist Entity' as their textbooks call it -- for the last
fifty years has allowed the rulers of Arab countries to
divert the attention of their own people away from the fact
that they're the blue-ribbon most illiterate, poorest, and
tribally backward on God's Earth, and if you've ever been
around God's Earth, you know that's really saying something.

It makes me roll my eyes every time one of our pundits waxes
poetic about the great history and culture of the Muslim
Mideast. Unless I'm missing something, the Arabs haven't
given anything to the world since Algebra, and, by the way,
thanks a hell of a lot for that one.

Chew this around and spit it out: Five hundred million
Arabs; five million Jews.

Think of all the Arab countries as a football field, and
Israel as a pack of matches sitting in the middle of it. And
now these same folks swear that if Israel gives them half of
that pack of matches, everyone will be pals..

Really? Wow, what neat news.

Hey, but what about the string of wars to obliterate the
tiny country and the constant din of rabid blood oaths to
drive every Jew into the sea? Oh, that? We were just kidding.

My friend, Kevin Rooney, made a gorgeous point the other
day: Just reverse the numbers. Imagine five hundred million
Jews and five million Arabs. I was stunned at the simple
brilliance of it. Can anyone picture the Jews strapping
belts of razor blades and dynamite to themselves? Of course
*Or marshaling every fiber and force at their disposal for
generations to drive a tiny Arab state into the sea? Nonsense.

Or dancing for joy at the murder of Innocents? Impossible.*
Or spreading and believing horrible lies about the Arabs
baking their bread with the blood of children? Disgusting.

No, as you know, left to themselves in a world of peace, the
worst Jews would ever do to people is debate them to death.

However, in any big-picture strategy, there's always a
danger of losing moral weight. We've already lost some.
After September 11th our president told us and the world he
was going to root out all terrorists and the countries that
supported them. Beautiful. Then the Israelis, after months
and months of having the equivalent of an Oklahoma City
every week (and then every day) start to do the same thing
we did, and we tell them to show restraint.

If America were being attacked with an Oklahoma City every
day, we would all very shortly be screaming for the
administration to just be done with it and kill everything
south of the Mediterranean and east of the Jordan .
4)Wunder Woman
By Joshua Hammer

Meeting Obama this week in Washington, German Chancellor Angela Merkel is on a furious quest to save Europe

The arrest of Dominique Strauss-Kahn had gone down 48 hours earlier, and Angela Merkel, Germany's chancellor, was still absorbing the news. Settling into a chair in a vast conference room in the glass-and-steel Chancellery in Berlin, Merkel grimaced and shook her head when asked about her reaction to the International Monetary Fund chief's plummet from grace. She had been scheduled to meet Strauss-Kahn to discuss the worsening euro crisis, but the meeting had been scrapped after he was charged with sexual assault. "I will say that the presumption of innocent until proven guilty applies to everybody," the careful Merkel said, shifting in her chair. "I will wait and see how the legal process proceeds."

It was early afternoon in Berlin, and Merkel was taking time out of her rigidly programmed schedule to meet with an American reporter — a rare concession for a politician who almost never talks to the foreign press. And Merkel exerted as much control as she could over the process.

Wearing a prim beige jacket and black pants, Merkel kept her answers concise, in German, and with her press attache firmly at her side as a timekeeper. But her unyielding demeanor — and insistence on speaking her native tongue — was broken when I paused to admire the view from the window. The Germans, after unification, built a dazzling, celebratory cityscape along the former East-West fault line. Switching to English, Merkel, who grew up in the Communist East, admitted she still found it surprising to be going to work each day "on this side" — in the former West Berlin —"and not on the other side."

More surprising, perhaps, is the fact that in her nearly six years as chancellor, Merkel, now 56, has established herself as Europe's strongest and most durable leader. She has, in turbulent times, guided her Christian Democratic Union to healthy wins in two elections. Forbes magazine has repeatedly named her "the world's most powerful woman." And though her standing at home has slipped this year, among the current crop of European leaders, who almost comically embody national stereotypes — who, after all, is more Italian than Silvio Berlusconi, more French than Nicolas Sarkozy, more British than David Cameron, and, indeed, more German than Merkel? — she still seems the most assured in her office.

"Angela is the very opposite of the flashy glad-hander as a politician," says former British prime minister Tony Blair. "She is one of the easiest politicians to underestimate, and it's one of the stupidest things any politician can do."

She has steered Germany through the worst global financial meltdown since the Great Depression, keeping budgets down and confidence high. Last year, Germany enjoyed a growth rate of 3.6 percent — the highest in Western Europe — and the economy is on track to remain strong this year. In the euro crisis, Merkel has been a strong voice for fiscal discipline while diligently (if sometimes reluctantly) cobbling together rescue plans for Europe's profligate nations — Greece, Ireland, and Portugal, who have chafed loudly at German demands. (A Greek newspaper wrote that Germany was turning debtor countries into "colonies of the Fourth Reich" and Europe into a "financial Dachau.") But beyond such hissy fits, there's little the poorer EU nations can do. Without Berlin, the euro would be kaput. Germany is Europe's only truly global economy — the world's second-largest exporter after China and the fourth-largest economy after the U.S., China, and Japan.

"Her constant fear, her constant desire, will be to make sure that any help that's given to Greece is given on a basis that cures the problem rather than merely postpones it," says Blair. "Her concern — naturally — is to make sure that any help that is given is help that she can justify to her own people. It really is as simple as that."

In what is still a men's club of world leaders, she holds her own. During a February phone call, she rebuked Israeli Prime Minister Benjamin Netanyahu for his refusal to extend a settlement freeze. When he castigated her for an anti-settlement U.N. vote, she barked back: "How dare you?" according to the Israeli newspaper Ha'aretz. When I pressed her on the conversation, she told me that she never talked about her private phone conversations, but then added: "I believe that finding a two-state solution is now more urgent that ever … and a suspension of settlement-building would be a justifiable step to make progress. As a friend of the Jewish state, I'm profoundly convinced that a negotiated solution is in the best interests of Israel."

For all her apparent grandeur, close friends describe her as uneitel — a term connoting modesty. She still vacations in the same cottage in the former East Germany that she owned before the fall of the Wall, and her husband, Joachim Sauer, a fellow scientist, commutes regularly from their unpretentious apartment in central Berlin to the institute of chemistry at Humboldt University.

Merkel is efficient, in part because she has kept her independence and her private life to herself, says James Wolfensohn, the former World Bank president. "She's not someone running around the world in tiaras and things, trying to gain recognition because of her presidency," says Wolfensohn, who admires her toughness. "I don't know how you run Germany without being very strong — I don't think it's for weaklings."

On the world stage, she has been a vocal supporter of human rights, repeatedly pointing to her own remarkable journey from Lutheran priest's daughter in the Communist East to leader of a united Germany. "Above all, it influenced me in terms of recognizing that freedom is not a given," she says. "That led me to becoming, and I believe I still am, a fervent advocate of freedom, and also of freedom of opinion."

Merkel will meet with President Obama in D.C. next week to discuss the economy, the ongoing wars, and transatlantic relations. Afterward she will dine at the White House, where the president will present her with the Medal of Freedom, America's highest civilian honor. Ironically, her award comes at a time of growing tensions in the German-American alliance. In contrast to the back-slapping (and shoulder-massaging) she shared with George W. Bush, Merkel regards Obama warily, though they share the same cerebral style.

The relationship between the two got off to a bad start in July 2008, when Merkel criticized the prospect of Obama using Berlin's Brandenburg Gate as a backdrop for a campaign rally. A year later, Obama, now president, declined an invitation to attend the 20th-anniversary celebration of the fall of the Wall, prompting one American wag to write that Obama had replaced John F. Kennedy's "Ich bin ein Berliner" with the more prosaic "Ich bin besch�ftigt" ("I'm busy"). Obama still hasn't taken time to visit Berlin, feeding the perception in the Merkel camp that he doesn't view Europe as a priority.

Not surprisingly, Merkel herself insists that she gets along just fine with Obama. "I had a reliable, friendly relationship with President Bush, and I have a very good and friendly relationship with President Obama," she told me. "We have very different biographies, but we work well together, and the fact that he invited me to Washington to receive the Medal of Freedom speaks for the quality of our relationship." she says.

Playing well with others has become a Merkel hallmark, at home as well as abroad. In December 2008, with the German economy slowing to a crawl, roughly 30 people — CEOs, economists, and union brass — gathered around a table in Merkel's office. Peter Loscher, chief executive of Siemens AG, who attended the meeting, recalls that Merkel asked each person in the room what was wrong with the economy and what could be done to fix it. Eventually, Loscher says, Merkel helped forge an agreement that is remarkably German in its consensus: the business leaders said they would avoid laying off a considerable number of workers in the coming year, and instead cut back their hours. The government, in turn, would offset a portion of the costs and allow companies to keep their skilled employees until the downturn passed. The idea, says one German politician, originated with her political opponents, but Merkel embraced it and managed to convince the naysayers in her party. "Her mantra is collaboration and not confrontation," says Loscher. "She has a great capacity to build trust."

But recently there has been blowback and public awkwardness. Last month, at the American Academy in Berlin, Helmut Kohl, the 81-year-old former German chancellor, passionately defended the euro zone. Sitting in his wheelchair, Kohl spoke in a faint voice. His speech was slurred and his words were hard to decipher. But his message — that Germany was not doing enough to preserve the union — seemed clearly intended for Merkel, his former, now estranged, protegee, who appeared frosty as she watched from the front row. "Germany's future is with its neighbors," Kohl said. "We have to follow our path with the Greeks, too, even if it costs us something."

And earlier this year, Merkel was criticized for the German decision to abstain on the March U.N. Security Council vote on the "no-fly zone" over Libya and NATO intervention. "The rest of the West is perplexed, sensing a drift toward stay-apart-ism," says Josef Joffe, editor and publisher of Die Zeit, the German daily. "Germany has never been so alone." Merkel insists that Germany remains strongly supportive of its NATO allies and denies that she was pandering to Germany's notoriously noninterventionist electorate. "We are all in agreement with our friends and allies that the Gaddafi regime must be brought to an end, that Libyans deserve freedom and democracy just as much as the people of Egypt, Tunisia, Syria, and the entire region," Merkel says. "But in the end a purely military solution will not be feasible; politics will have to play its part."

Merkel spent what she describes as a contented youth in the rural East German town of Templin, about 60 miles northwest of Berlin. Her father had brought the family there from Hamburg when she was an infant, before the Berlin Wall went up. It was, she says, "a very beautiful and nature-filled childhood." Her parents fostered an atmosphere of intellectual inquiry; Merkel recalls being surrounded at home by "many books, frequent visitors, and interesting conversational partners." Yet the family had no illusions about the restrictions and dangers of life in the East German police state. "We knew we were living in a dictatorship, with constant caution required as to what you could and could not say," she told me, adding that her parents advised her to ward off overtures from the Stasi, the secret police, by telling them that she was a chatterbox and would make a lousy informer. Merkel remained passive politically, throwing herself into the study of physics at the University of Leipzig. She graduated in 1978, and got a job as a chemist at the prestigious Academy of Sciences in Berlin.

A decade later, the Berlin Wall fell. In March 1990, just before East Germany's only democratic election, Merkel walked into the East Berlin office of the fledgling Democratic Awakening Party and signed on as a volunteer. "She was late to the revolution, but she learned fast," says Hans-Christian Maa�, an East German politician who met Merkel during this period, and often invited the young physicist over to his home, where she would bake cookies for his children. Their party was crushed in the polls — the leader turned out to be a Stasi informer — but Maa� found Merkel a job as deputy spokesperson in the transitional government. In late 1990, she ran for Parliament and made a favorable impression on then-chancellor Helmut Kohl; after her election, he appointed her minister of women and youth in the first cabinet of a unified Germany. "For her, it was like the first light of a new future," says Maa�.

Merkel rose rapidly through the ranks of the Christian Democratic Union. She recalled, "I was sitting at the same table with Helmut Kohl. I hardly knew anyone in Bonn, and at first I didn't know how to lead a ministry. I kept saying to myself, you have to make sure that you keep your feet on the ground. There was a great deal to learn in a very short time." She learned fast. Kohl appointed her minister of the environment in his next government, and later, deputy chairman of the Christian Democratic Union.

Lord George Weidenfeld, an Austrian-born publisher, who ran in the same circles as Merkel back when she was a junior politician, recalls a "very friendly and very informal" woman who was often a good listener during boat rides and weekend getaways. "She is a sort of a Margaret Thatcher figure in the sense that she is a very strong person," he says. "[But] she is the best representative of what I have called the three Ms — the movement of the militant middle."

As one of the only women, and one of the only former East Germans, in the party's upper echelons, she was dismissed — foolishly — as a lightweight by party bosses. When Kohl, and the party's secretary general, Wolfgang Sch�uble, became embroiled in a scandal over a secret campaign slush fund, Merkel showed no mercy to her former mentor. She published a letter in the Frankfurter Allgemeine Zeitung, criticizing the pair for their lack of transparency and demanding reforms. Sch�uble was forced to step down as party boss, and Merkel took over, opening the way to her election five years later as chancellor. "The western boys never believed that the eastern girl would treat them the way she did," says a prominent Berliner. "But she knows how to play the game of power politics."

Understated she may be, and underrated. But Angela Merkel, with her quiet steel and very Lutheran common sense, is a leader without whom Europe would be in disarray.
5)Templeton's Mobius: Another Financial Crisis is ‘Around the Corner’

Mark Mobius, executive chairman of Templeton Asset Management’s emerging markets group, said another financial crisis is inevitable because the causes of the previous one haven’t been resolved.

“There is definitely going to be another financial crisis around the corner because we haven’t solved any of the things that caused the previous crisis,” Mobius said Monday at the Foreign Correspondents’ Club of Japan in Tokyo in response to a question about price swings. “Are the derivatives regulated? No. Are you still getting growth in derivatives? Yes.”

The total value of derivatives in the world exceeds total global gross domestic product by a factor of 10, said Mobius, who oversees more than $50 billion. With that volume of bets in different directions, volatility and equity market crises will occur, he said.

The global financial crisis three years ago was caused in part by the proliferation of derivative products tied to U.S. home loans that ceased performing, triggering hundreds of billions of dollars in writedowns and leading to the collapse of Lehman Brothers Holdings Inc. in September 2008. The MSCI AC World Index of developed and emerging market stocks tumbled 46 percent between Lehman’s downfall and the market bottom on March 9, 2009.

“With every crisis comes great opportunity,” said Mobius. When markets are crashing, “that’s when we’re going to be able to invest and do a good job,” he said.

The freezing of global credit markets caused governments from Washington to Beijing to London to pump more than $3 trillion into the financial system to shore up the global economy. The MSCI AC World gauge surged 99 percent from its March 2009 low through May 27.

‘Too Big to Fail’

The largest U.S. banks have grown larger since the financial crisis, and the number of “too-big-to-fail” banks will increase by 40 percent over the next 15 years, according to data compiled by Bloomberg.

Separately, higher capital requirements and greater supervision should be imposed on institutions deemed “too important to fail” to reduce the chances of large-scale failures, staff at the International Monetary Fund warned in a report on May 27.

“Are the banks bigger than they were before? They’re bigger,” Mobius said. “Too big to fail.”

The money manager had earlier said at the same event that Africa has an “incredible” investment potential and that he has stakes in Nigerian banks.

“These banks are doing very well and are much better regulated than they were in the past,” Mobius said, without disclosing which lenders he holds.

Banks account for five of the eight stocks in the MSCI Nigeria (MXNI) Index. Guaranty Trust Bank Plc, the country’s No. 2 lender by market value, surged 31 percent in the six months through May 27, according to data compiled by Bloomberg. Shares of Access Bank Nigeria Plc recorded the second-biggest decline on the gauge in the period, the data show.

© Copyright 2011 Bloomberg News. All rights reserved

5a)Right now, the ordinary advice is to be scared. According to the polls I follow that track investor sentiment, everyone is scared right now.

The ordinary opinion is to not be bullish. But history shows that when this happens, you want to BUY stocks. Let me explain…

Individual investors, newsletter writers, and investment managers are all NOT BULLISH right now. Let's take a look at each and how you would have done buying stocks when everyone else was scared…

According to the latest weekly poll by the American Association of Individual Investors, right now, individual investors are less bullish than they've been in all of 2011. Individual investors were this scared twice in 2009 and twice in 2010. Each time, the market "popped" up right after.

Also, according to my friend Jason Goepfert of www.SentimenTrader.com, "Newsletter writers looking for a short-term correction have jumped to a nearly 25-year high." Jason looked back to the five other instances similar to this one. He found their correction fears were unfounded. "There was never really any correction at all."

Finally, Jason just reported that "confidence among investment managers" has dropped near a five-year low. He showed how stocks have typically done well over the following three months when that's happened.

So individual investors are not bullish. Newsletter writers are expecting a correction. And investment managers don't have confidence. Everyone is scared.

But history shows when everyone is scared, you make money.

You can be ordinary and go with the crowd. Or you can be extraordinary and go against the crowd. History shows the right way to be is extraordinary.

Trades from sentiment extremes like this are typically good for about three months. After that, the benefit from the sentiment extreme has worn off.

Nobody is bullish about stocks. So it's time to buy. And history says your safest bet is a three-month trade.

Good investing,

Dr. Steve Sjuggerud
Will Obama Sink the Democrats?
By James Lewis

The media are playing "divide and conquer" games against Republicans now, a strategy that worked in 2008 by leaving us with John McCain as the only candidate. This time they are swinging between viciously attacking Sarah Palin and her family, and hyping real or imaginary divisions between Republicans -- never among the Democrats, who present the image of a united front with Stalinesque unity. But you can bet there's a lot of vicious in-fighting among Obama, the Clintons, and all the rest, because Obama may be destroying the Democratic Party as we know it.

Already the media are spreading the Big Lie that the GOP has a "weak field" of candidates, declared and undeclared. Like Rudy Giuliani, the best NYC mayor in the last half century and a heroic figure on 9/11/01. Or the four successful former governors of Alaska, Massachusetts, Alabama, and Minnesota. We have one accomplished black businessman, who looks, acts, and talks like a responsible adult, and two brave and articulate conservative women. Even with his flaws, Newt Gingrich was the most powerful GOP Speaker of the House in the last half century. This is a "weak field"?

When know-nothing Obama ran in 2008, the left orgasmed all over itself, and swung a Nobel Peace Prize for him, just for running while black. Even today Obama is a hyped-up incompetent compared to Giuliani.

What the left really fears is that Obama will sink the Democrats. American political parties come and go. In the 19th century the Whigs died out and the Republicans emerged with Abraham Lincoln. Harry Truman's Democrats were forced to purge the Stalinist left from the Democratic Party, making a fast switch to the mainstream because they were deeply penetrated by Stalin's spies and agents of influence. Americans were justifiably scared of Stalin's nuclear bombs, weapons so big and destructive that nobody knew what might happen. The Democrats, some of them vociferously pro-Soviet, had to change in order to survive. They produced generations of mainstream liberals -- Truman, Humphrey, LBJ, JFK -- who would look exactly like conservatives today. Without purging the totalitarian left, they would have died as a party.

Today, as soon as Iran explodes a bomb, Obama is going to be in deep, deep trouble with American voters. Nuclear proliferation is now happening all over the Middle East, because Arabs fear a nuclear Iran much more than a nuclear Israel. Obama has Carterized the most unstable region in the world ten times over. The Democrats well remember how Jimmy got beaten by Ronald Reagan.

The left cannot be trusted in the War on Terror. Carter let the Shah of Iran be overthrown by murderous tyrannical throwback Ayatollah Khomeini. The left is just weak-minded -- which is why they keep denying there is a war going on, even when our troops are fighting and dying in Afghanistan, Libya, Pakistan, and parts of Africa like Somalia.

When the history of the War on Terror is written, it will start with Jimmy Carter, who honestly thought that bloody-minded old Khomeini was "some kind of saint," according to his UN Ambassador Andrew Young. The Shah was pro-American, and educated generations of Iranians (including women) in modern ways of thinking. When Carter allowed Khomeini to take Iran, the mullahs immediately killed off the secular opposition, tried to overthrow the Saudis next door, and ended up in a vicious war with Saddam that killed a million people. Today they control Iran, Syria, and Lebanon. They have always had tactical alliances with Sunni terror groups like Hamas, the Taliban, and Al Qaida. Afghanistan is taking huge bribes from Iran. The Iraqis are worried that as soon as the Americans leave, they will be next.

Thank you, peace-loving Jimmy Carter. What a masterstroke it was to enable the first modern throwback terror regime in the Islamic world. What an example for future generations Jimmy Carter gave us.

Americans who are not mentally comatose today are turning against Obama, because O openly pushed Mubarak out of power in Egypt, thereby sabotaging the only effective peace treaty in the Middle East. Anybody who doesn't see that as a disaster is simply lost to reason. But a lot of liberals will never, ever get it.

Just like Jimmy Carter, Obama is bringing to power the most radical Islamists in Egypt, Turkey, and the other Sunni nations. Obama has done nothing to stop Iran's ruthless march to nuclear power, so that the Saudis may now be ordering their own off-the-shelf nukes from Pakistan. China just announced that "any American attack on Pakistan would be treated like an attack on China." North Korea allowed a US nuclear scientist to visit a brand-new enrichment plant that could only have come from China.

Is this a royal mess or what? And that's only his Foreign Follies.

Domestically, what has Obama done? He's Carterized the economy, with inflation rising for food and gas, and economic stagnation causing almost 10 percent unemployment. He has constantly insulted and demoralized ordinary Americans. He is a racial divider, not a healer. He has literally given the middle digit to Hillary Clinton on television, and symbolically dissed just about everybody else, especially the most productive people in America.

Obama has lost the House of Representatives for the Democrats, and that means that hungry liberals all over the country see their career prospects stymied. His plans for a second term are terrifying: like running your medical care from DC. Rationing medical care for seniors, like the UK. Driving doctors out of business. Affirmative action in all the medical schools, just like Hillary proposed in the 90s.

Listen to these mainstream commentators.

Michael Barone keeps warning that Obama has brought in "gangster government." That's the considered judgment of the best-known PhD political scientist in the country, the editor of the Almanac of American Politics.

Patrick Caddell, after a long career as a mainstream Democratic pollster, is utterly enraged at the leftward lurch of the Demagogues since Clinton. Caddell is just about the last honest man on that side of the aisle. All the decent people in the Democratic Party have been chased out.

Charles Krauthammer, the only other conservative at the Washington Post, just wrote that:

Note how Obama has undermined Israel's negotiating position. He is demanding that Israel go into peace talks having already forfeited its claim to the territory won in the '67 war -- its only bargaining chip. Remember: That '67 line runs right through Jerusalem. Thus the starting point of negotiations would be that the Western Wall and even Jerusalem's Jewish Quarter are Palestinian -- alien territory for which Israel must now bargain.

The very idea that Judaism's holiest shrine is alien or that Jerusalem's Jewish Quarter is rightfully or historically or demographically Arab is an absurdity.

This is not just about Israel. Imagine what people are thinking in Taiwan, South Korea, Poland, Egypt, Saudi Arabia -- all international flashpoints where trust in American assurances has kept the peace for long decades. When Obama publicly abandons Israel, people start shaking in fear all over the world.

The leftist monopoly on the news is crumbling. The new conservative media are expanding and in quality and quantity, a long-delayed response to the leftist degradation of our culture. Conservatives now have the most articulate speakers in the country, including Rush Limbaugh, Herman Cain, Sarah Palin, Michele Bachmann, and more.

The left is intellectually bankrupt, and the only thing keeping it alive is media control and government payoffs. The only way the left can stay in power is by monopolizing the media and the schools, to brainwash an entire nation about such little things as the history of the Cold War.

Obama himself is locked in post-colonial socialism, an ideology that has been completely rejected in China, Russia, India, and much of Latin America and Africa.

It is fear, and not self-confidence, that is making lefties like Chris Matthews act like aggressive chimps. When chimpanzees feel scared they go into a very aggressive stance, tear branches off the bushes, bare their teeth, and make loud noises. That's Matthews today. This is not what people do when they feel confident. It's what the power class does when it's afraid of losing it all.

Some leftists are scared that another McCarthyist backlash will arise if Obama loses. They have brainwashed themselves so much about Joe McCarthy that they are now scared of normal Americans. But they also know how extreme they look. To answer Rush Limbaugh the left presents vicious name-callers like Ed Schultz and a squad of Hollywood airheads. If they felt confident they would simply answer substantive arguments with their own. But they are dreadfully weak on substance.

When Americans become serious again -- when Iran's big bomb goes off, or the Great Recession keeps going -- they will vote out Obama and the Democrats.

Every time you read another JourNOlist claiming the GOP is in trouble, just change the word "Republican" to "Democrat." The left isn't losing sleep about Republican losses. They can see the earth yawning open under their own feet, ready to swallow them up, just as the House Democrats were swallowed up in the midterms. Don't think they aren' worried about their poll numbers. Don't think they aren't scared about Tea Party Americans. Don't think they can allow conservatives like you and me to exercise our free speech. They feel panicked, vulnerable, and incompetent. That's where all the rage is coming from.

Historically, leftward lurches in America are always followed by conservative corrections. Woodrow Wilson was followed by Harding, Coolidge, and Hoover; FDR and Truman by Eisenhower; JFK was relatively conservative by leftist standards, but after LBJ swung hard left, Nixon and Ford succeeded him. Jimmy Carter led straight to Ronald Reagan. Bill Clinton was stymied by a powerful GOP Congress. And Obama...

We'll find out soon. The SEIU has just pulled out their old Communist banners, and they are tearing off the mask. ACORN is back in business. George Soros is funding all the loudest leftist fronts. Marxists are suddenly sprouting all over the campuses, like an outbreak of ugly pimples. The left is out of the closet.

Yet the Global Warming fraud has been exposed, and the Democrats have suddenly found out they want missile defenses. We now have Aegis-equipped anti-missile vessels near all the hot spots in the world; that's the technology the left threw screaming fits about for decades. Had the left won that debate we would now be exposed to the tender mercies of Iranian missiles a half an hour away. Now that the US has proven that missile defense is possible, every other nation in the world is rushing them into place.

The phony "energy crisis" is on its last legs as countries like Poland, Canada, China, and Israel have discovered major deposits of convertible shale deposits. Natural gas from shale will break the monopoly of OPEC in less than a decade, and reactionary Islam will then lose its big money edge in the world. The Middle East will lose much of its strategic importance as shale deposits are exploited all over the world.

Obama is starting his reelection campaign six months early. The left is already flooding us with phony pre-election headlines and disinformation. Those are signs of panic. They can read the portents of doom in the polls.

The left is strongest on hype, not substance. Alinsky taught them that the appearance of power beats real power. They are always puffing themselves up like blowfish, and trying to demoralize the rest of us. Just watch it happen.

By next year we will know if the left can fool all the people all of the time. No matter how much Obama tries to look like a winner, in fact he is a ball and chain for the Democrats. He lost the House in the midterms. Even the French and Chinese are ridiculing him.

Here's hoping that they all sink together, and that a more centrist party will succeed them.

6a)Reelecting Obama
By Victor David Hanson

Memo to GOP: Obama will campaign against Bush (again) and play the race card. Don’t let him get away with it.

We are beginning to see the contours of the upcoming 2012 reelection campaign of Barack Obama. Whether always officially sanctioned or not, Obama’s campaign will focus on three general themes: a) the 2008 meltdown of the economy on Bush’s watch; b) conservative heartlessness in gutting cherished entitlement programs; and c) racial bias behind any criticism of Barack Obama.

By any standard, the economy has remained mostly dismal for well over two years. Deficits, joblessness, fuel prices, average GDP growth, and housing are far worse than the average during the eight years of Bush’s presidency. Unemployment during almost all of President Obama’s tenure has exceeded 9 percent, despite promises that, because of the stimulus, it would not exceed 8 percent. Gas still averages almost $4 a gallon nationwide, amid a landscape of continual administration resistance to new domestic exploration and leasing. Record numbers of Americans now draw food stamps and unemployment insurance; to suggest that these programs are plagued by abuse and fraud, or that, if they are too easily available, they can discourage initiative, is heresy. Some of the largest states — California, Illinois, New York — are nearly fiscally insolvent. We’ve borrowed $5 trillion since 2009 to “stimulate” the economy — and seen little upsurge in economic growth, but a lot of evidence of a raging inflation to come on the heels of soaring gas and food prices.

Massive debt, record new deficits, high rates of joblessness, out-of-control prices for essentials like fuel and food — a combination like that usually dooms a president’s reelection bid. Similarly weak economies in 1980 and 1992 derailed incumbents Jimmy Carter and George H. W. Bush.

However, Team Obama will make the argument that at least there has not been another Wall Street panic as during September 2008 under Bush, with the general uncertainty that followed. “Bush did it” is now too ironic a charge to evoke any more in matters of foreign policy, given that President Obama has now accepted all the Bush anti-terrorism protocols and wars — and gone well beyond them by joining a third conflict in Libya and quintupling the number of Predator-drone targeted assassinations.

But on the economic front, the “inherited mess” will have to do in the attempt to convince us that the present hard times are still George Bush’s while the signs of a weak recovery are all Barack Obama’s. Similarly, Herbert Hoover was still evoked for nearly a half-century any time FDR, Truman, or LBJ hit a rough patch. And if you did not know about the courageous economic decisions Barack Obama has made on our behalf on the domestic front, you will now, after the heroic killing of bin Laden. In the words of Joe Biden, it was “the boldest undertaking any president has undertaken on a single event in modern history” — an “undertaking” “undertaken” greater than the decision to drop the bomb on Hiroshima, to stop North Korea from obliterating the south, to confront the Soviet Union over its missiles in Cuba, to send troops to recover Kuwait, or to conduct the surge in Iraq?

Obama’s landmark decision, in fact, explains why we can now at last appreciate his (or Joe Biden’s) genius and courage in restoring the ruined Bush economy, or so Biden further assures us: “The American people now . . . have a crystal-clear picture of how strong and decisive this president is. And that’s the last piece of the puzzle that had to be put in place for this great man. People are now beginning to take a second look at those incredibly difficult but absolutely necessary decisions the president had to make the day we walked into the West Wing.”

Then there are those cruel congressional opponents who for some reason believe that the $5 trillion in additional borrowing since January 2009 was a bit over the top. Greed, selfishness, and a lack of compassion — not an aging population, vastly expanded benefits, and soaring health-care costs — are responsible for the difficulties facing both Social Security and Medicare. Remedies abound, but none have been adopted by Team Obama. Before 2012 do not expect that the retirement age will be hiked. Benefits will not be trimmed or some entitlements privatized to encourage competition and cost-cutting — despite the real urgency for reform, since we are already running a $1.6 trillion annual budget deficit, and millions of baby-boomers are on the verge of retirement, a generation not known for either its reticence or its willingness to do without.

If reelected, President Obama will probably be forced to do something about entitlements, but that certain something will for now remain unspoken, and he instead will attack any proposals to change Social Security with the same gusto with which he once trashed the Iraq War and Guantanamo. Already, supportive commercials are airing with a Paul Ryan look-alike shoving a grandmother out of her wheelchair over a cliff. Other hit ads portray the elderly with walkers forced to mow lawns to raise money for their benefits. Ads like that will appear soft in comparison to what’s coming in the next 18 months.

Already, almost weekly one columnist or another insists that to criticize Barack Obama is to display racial bias. A reckless Donald Trump going after Obama’s birth certificate is emblematic of endemic racism; in contrast, unhinged nuts who claimed Sarah Palin never delivered her own child are perhaps a bit too zealous in a noble cause. House Assistant Minority Leader James Clyburn (D., S.C.) summarized the racialist strategy best, when he explicitly charged that opposition to Obama’s reelection hinges on racism: “The fact of the matter is, the president’s problems are in large measure because of his skin color.”

Clyburn’s demagoguery is a sort of strategic racial preemption: Prep the campaign in such a way that no one dares to talk of the president’s shortcomings for fear of being called a bigot — just as, in 2008, legitimate questions about the racist Rev. Jeremiah Wright and his intimate connection with Barack Obama were acknowledged to be off limits by a terrified McCain campaign. Yet there is no evidence that mainstream criticism of Barack Obama is racial or has in any way exceeded that shown George W. Bush or Sarah Palin. I will concede widespread racism and irrational hatred against the president when Alfred A. Knopf publishes a sick anti-Obama screed that exceeds Nicholson Baker’s Checkpoint; or when we see something comparable to the deplorable editorial that the Guardian published by Charlie Brooker, which ended with the question, “John Wilkes Booth, Lee Harvey Oswald, John Hinckley Jr. — where are you now that we need you?”; or to Jonathan Chait’s crazy “Mad about You: The Case for Bush Hatred” New Republic article.

In fact, the most racially condescending assessment of the president has come from Cornel West, professor of African-American studies at Princeton, who damned Obama as “a black mascot of Wall Street oligarchs and a black puppet of corporate plutocrats.” West went on more explicitly, couching his criticism of Obama in anti-Semitic, anti-white terms: “I think he does have a predilection much more toward upper-class white brothers and Jewish brothers and a certain distance from free black men who will tell him the truth about himself.”

The president himself — well after the beer summit, Eric Holder’s rants about “cowards” and “my people,” the racist inanities of Van Jones, the “wise Latina,” and all the rest — in ethnically divisive fashion urged Latinos to punish their conservative enemies, and joked that his opponents wanted alligators and moats to stop Mexican nationals from crossing the border.

So will this tripartite strategy work? Only if the president’s opponents allow themselves to be caricatured as greedy Wall Street profiteers who want to punish the elderly and are prejudiced against blacks. And if they can’t answer back defiantly to that nonsense, then they really do deserve to lose.

— NRO contributor Victor Davis Hanson is a senior fellow at the Hoover Institution, the editor of Makers of Ancient Strategy: From the Persian Wars to the Fall of Rome, and the author of The Father of Us All: War and History, Ancient and Modern.
-------------------------------------------------------------------------------------------------------------------------7)SCOTUS Makes It Official: California A Failed State
Walter Russell Mead

The controversial US Supreme Court decision (pdf) that could ultimately force California to release tens of thousands of prison inmates is more than a shockingly broad exercise of judicial power. It is also an official declaration by the highest constitutional authority in the land that California meets the strict test of state failure: it can no longer enforce the law within its frontiers.

Let there be no mistake: when you produce so many criminals that you can’t afford to lock them up, you are a failed state. Virtually every important civil institution in society has to fail to get you to this point. Your homes and houses of worship are failing to build law abiding citizens, much less responsible and informed voters. Your schools aren’t educating enough of your kids to make an honest living. Your taxes and policies are so bad that you are driving thousands of businesses away. Your management systems must be fouled and confused to the max for you to create something so dysfunctional, so wildly beyond your means, that the Supreme Court of the United States (wisely or foolishly is another question) starts to micromanage your jails.

California used to be the glory of this country, the dream by the sea, the magic state. Now it produces so many criminals it can’t pay to keep them locked up.

This is partly a blue social model thing. California’s public unions are sucking the state dry — like a parasite killing its host. Too many Californians buy the ideology of entitlement best described by that great Louisiana prophet of the blue social model Huey Long: “If you aren’t getting something for nothing, you’re not getting your fair share.”

The federal government’s generation of serial failures in migration policy is also to blame. More exposed to illegal migration than any other state, California has been overwhelmed by both legal and illegal immigrants. Immigrants are a net plus for the United States, but neither the federal nor the state governments have been willing to provide the appropriate policy framework to manage this flow — and to cope with the consequences.

Some of the fault is judicial. California’s prison blues partly reflect micromanagement by a host of addled judges who among them have imposed a conflicting and overlapping set of requirements that increase costs to the point where overall conditions decline. One judge imposes a health mandate; another throws in some food and nutrition requirements; somebody else issues an order for exercise, education, visitation rights or what have you. In the end the system becomes unmanageable and unsustainable and in yet another fatheaded intervention the Supreme Court supports a lower court order for mass prisoner release. Judicial intervention in the prison system needs to be safe, legal and rare: at the moment it seems to be none of the above.

It’s partly about corporate flight. Destructive and shortsighted tax policies have literally driven big corporations out of the state. For the last five years, Southern California has been losing roughly one Fortune 500 corporate headquarters a year, while the state as a whole has lost four such companies in the last twelve months in an accelerating flight to greener pastures in less-dysfunctional states like Texas, Colorado and Virginia.

Meanwhile, California has the one of the worst business climates in the country: in three widely-cited rankings, California came 49th or 50th. High taxes, rigid regulations, bribery, unresponsive bureaucrats: California has it all.

It has one of the most expensive and least effective governments in the country. California has the country’s 6th highest total tax burden and yet also the largest budget deficit ($25.4bn projected for FY2012 — that’s about $687 per capita). North Dakota, by contrast, balances its budget every year, educates its kids better, is creating new jobs and taxes its residents at less than half California’s level.

California’s school expenditures bear no relationship to results. In 2008, although California spent more on public schools than any other state in the country and more per pupil than many, its students ranked 49th (out of 51, including DC) in reading achievement, 48th in math. States like South Dakota spent much less per pupil and got much better results.

The former paradise of the automobile can’t even get car policy right; it has the country’s second highest gas prices and some of the worst traffic in the United States.

Californians weren’t always this incompetent. In fact, California invented the modern American dream. The brilliant banker A.P. Giannini pioneered the mass marketed thirty year mortgage. Under his leadership the Bank of America perfected the growth engine that drove this whole country for sixty years. The bank lent money through the municipal bond market to build the infrastructure for new subdivisions. It lent money to real estate developers to build housing developments and lent money to consumers for mortgages and to buy cars. The tax revenues from the higher land values in the subdivisions payed for the bonds and the schools. The jobs provided by a favorable combination of a good business climate and government support (highway infrastructure, defense spending and industrial investment originally related to World War Two and continuing through the Cold War) put money in consumers’ pockets to pay for it all. Hollywood (also originally banked by Giannini) sprinkled it with magic dust, and the world gazed in awe.

Amadeo Piotro Giannini (Wikimedia)
I’ll never forget my own first trip to Golden California. After I graduated from Pundit High, my parents gave me the use of our beat up old Volkswagon Beetle and a gas credit card for a month. Following a series of misadventures that I hope will NOT see the light of day after all these years, we crossed the California state line and like generations of easterners before us we were awed and stunned by the beauty and wealth of the natural environment and the progressive utopia rising on every side. Gas was 18 cents a gallon; artichokes cost a nickel. The freeways sparkled in the sun; the roses that grew in the median strips were lush and well kept. The LA Times was one of the world’s great papers; the California university system was the wonder of the world.

San Francisco’s glorious Golden Gate Bridge, which Giannini also helped finance.
That glory has gone. Californians pay more to and get less from their state government than anybody else in the civilized world. The progressive meltdown of every important and valuable institution in the state is paralleled by the collapse of California’s place in our national cultural life. San Francisco once looked to be the literary capital of the Pacific; today it is a more provincial, less interesting city than it was fifty years ago. Lost Angeles is a parody of itself, a city to escape rather than a goal to be reached.

California politics and analysis is mostly a blame game these days. When you go to failing states outside the US, you are often treated to long and impassioned arguments among intellectuals about where it all went wrong. Arabs, Argentines, Russians, Nigerians, Pakistanis, Mexicans and, lately, the Japanese sit up into the wee hours about when precisely the key bad decisions were taken — when the point of no return was passed.

That is what discussions about California increasingly sound like. My guess is that we’ll have more of these going forward. Increasingly, I lean to the idea that California as we know it has been decisively and finally lost. Embers are still burning in the ashes (Hollywood, Silicon Valley), but the flame of the west gutters low.

To rekindle what used to be the most glorious star in Columbia’s crown, we are going to have to get away from what has become the California state obsession in recent years: reform. California reform commissions and committees are as common as parking lots these days; the results of past reforms in the form of propositions and constitutional amendments are part of the problem. Most new reforms will meet the same fate: the California state government long ago jumped the shark.

The only hope I can see is to break it up. California’s core problem is that it has outgrown the constitutional model we have for it. California is too populous, too diverse, too complicated to flourish as a single state. Unless we carve this beast into something like five more compact and manageable states, Californians will never have decent representative government at an affordable price.

If California had been on the East Coast, or if it had entered the Union at any time other than the crisis years before the Civil War when slave states jealously worked to minimize the number of free states, the idea of making it one state would have looked absurd from the start. As it is, the constituent parts of California have almost nothing in common. Northern California is more like Washington and Oregon than like anything farther south. The neighborhood of San Francisco Bay has its own history, character and interests that set it off from the rest of the state. Greater Los Angeles, the Central Valley and the Far South centered on San Diego also have what it takes to be successful and happily governed states on their own.

California, Reimagined (Image Source: Wikimedia)
Meanwhile, the state is so huge and has so many major media markets that elections for statewide office are prohibitively expensive. Special interests including public sector unions and corporations play a greater role in California, and grassroots politics matters less, than in most of the rest of the country. The vast differences in interest and outlook between its various regions makes for stalemate and sterile, lowest common denominator compromises in state politics.

At the time of the first US census in 1790, the total population of all 13 states and the western territories was 3.9 million (pdf). Los Angeles county has more than twice that many people now. The state with the largest population in the US in 1790 was Virginia with almost 394,000 inhabitants. Seven cities in California are bigger than that now.

Representative government in California is not failing because Californians are stupider than other people. It is not failing because we somehow can’t find the right mix of redistricting, constitutional amendments and other chicken-wire-and-spit fixes to kludge a working government together.

Representative government is failing in California because we keep using the wrong template. You can’t run a big city through a series of New England town meetings; you can’t run the 8th biggest economy in the world with an institutional mix designed for much smaller, more homogenous units in a much simpler time. California is a region, not a state, and until we adopt the political institutions that match this reality, the state will continue to fail — our very own Sudan by the sea.

California isn’t the only state with this problem, by the way. New York, Florida, Texas and Illinois are obvious candidates for break up; figuring out how to decentralize and localize state government is an important part of making America work in the 21st century.

There are problems with breaking up states. There are common assets like university and road systems. There’s the question of state debt: should citizens of California’s rural regions be indefinitely saddled with debts due to large infrastructure projects in other parts of the state? There are resource issues (in California, think water above all). There are some non-trivial constitutional issues about how to get it done (joint resolution by Congress following petition? constitutional amendment? something in between?).

There are some cost issues as well: would five state governments be five times as expensive as one, for example? I tend to think not; the less populous states will need less government and less regulation and be free to shed layers of management and governance they never needed in the first place. The new states (like all states) should switch to unicameral legislatures — state senates have served no serious purpose since the Warren Court bizarrely ruled that the traditional overrepresentation of rural areas in many state senates was unconstitutional (each county had the same number of senators regardless of population, like the US Senate and the states).

America can’t afford for California to keep failing, and despite the best efforts of a lot of smart people, there’s no way that the Golden State can function in its current form.

There’s no way around it, friends: we need more stars in our flag.