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.

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