Walking Dead-Stalling-Euro Toast-Bad Man and Resign!

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In the previous memo I wrote about how fraudulent our press and media folks have become in support of their favorite Troxyite president. Then someone sent me this link which verifies what I wrote. Thought you might find it, well, interesting.
It is entitled:Obama Beach Party: http://www.youtube.com/watch_popup?v=3JDT5vBQQr8&vq=medium
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Joe Rogers goes one further and suggests Obama should resign before we get so deep in debt we will never be able to dig out from under. (See 1 below.)

Morgan Stanley's, Stephen Roach, is very concerned about the "walking dead" and Jeff Clark is bearish on the euro. (See 1a and 1b below.)

Jay Clarke calls on all voters to place the nation first when they vote in Nov. 2012 and realize Obama is a bad, bad man. (See 1c below.)

Though Obama will never resign the euro could be toast, in time and yes,there are more and more 'walking dead' because politicians and policy makers are unwilling to visit pain and/or face reality.


As to whether Obama is a bad man I confess I too lean in that direction because he is unwilling to tell the truth. (See 1d below.)

Nouriel Roubini continues to be concerned as well and has that 'stalled' feeling. (See 1e below.)
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Dore Gold, former Israeli Amb. to The U.N., discusses the proposed 'land swap.' (See 2 below.)
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What they are saying about Lofton's new book on Buffet, coming out June 21 - today!


This is who Lofton is: "LouAnn Lofton has been proudly investing "like a girl" since she was a girl. After losing her father at age 14, she resolved to take control of her own financial future and became obsessed with learning how to invest.

Her quest led her to Warren Buffett in 1994 and The Motley Fool in 2000, where she rose to the position of managing editor of Fool.com -- an award-winning financial education website that hosts more than five million visitors each month.

Warren Buffett Invests Like A Girl is her first book -- and the one that allowed her to finally meet her investment idol." (See 3 below.)
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I would like to highlight two articles. The first is by my friend, Bret Stephens, who discusses Obama's foreign policy initiatives and writes they are rooted in achieving consensus but fail, in large measure, because they lack credibility.

It is that age old story of failing to match the talk with the walk. Boxers do not get points for 'feints' only for blows that land. So it is with Obama and, to some degree, with GW, as well. Empty threats do not scare. They are more likely to embolden.

Since Obama is mostly an empty suit - perhaps a gifted phrase maker - it is not surprising his foreign policy lacks a cohesive and believable message which our enemies are likely to heed. (See 4 and below)

In the second article, the author seems to put on 'blinders' in order to write his play on words op ed.

Alan Blinder asserts:"... Republicans rail against job killing government spending." Blinder's point is that if Republicans are correct and employment actually declines with cuts in government spending it should soar if massive cuts occur in government spending.

Blinder agrees dumb public spending should be rejected but not because it kills jobs.

As I see it, Blinder has set us a straw man and then proceeds to knock it down but I do not accept the premise he ascribes to Republicans as being the one they embrace. Blinder seems to have come up with his own expression of what he attributes to what they mean.

More importantly, even if government spending create jobs they are not the kind of jobs that are generally efficient and/or contribute to our nation's productivity. In fact government spending generally accomplishes the opposite. Second, I dare say corporate America is reluctant to expand when they see government drinking all the 'kool aid.'

Third, it appears the average government job now pays twice what the private sector pays (reported in a previous memo) and that simply adds to the bloated cost of government driving either taxes up or increasing the deficit and the consequent carrying cost of interest.

Finally, the elimination of government jobs will surely add to unemployment on a temporary basis because the private sector's needs do not, necessarily, lend themselves to the type work government bureaucrats perform. That said, simplification of our tax laws, in combination with the elimination of Obama's vast build up in government employment, would assuredly have an enormously positive effect on our economy.

Yes, unemployment would increase and consumption would be impacted because of the sad state of our current economy but accepting Blinder's proposition runs smack into the face of the point that as long as government remains bloated the private sector is unlikely to recover so the sooner we eliminate government workers and various agencies we can get on with the job of the recovery that only the private sector can and will produce.

Interest rates are being kept artificially low and will rise along with inflation. The Fed will not be able to keep current rate levels as America's credit worthiness gets down ticked either by various rating agencies or creditors unwilling to hold U.S. paper in the face of mounting deficits and runaway spending. As for corporate spending on investment I would argue it has been to keep in check the increasing costs of hiring workers and to maintain productivity during periods of rising costs and declining demand.

So I submit Blinder may be correct in what he writes but I challenge his initial premise and still maintain he used a convenient intellectual overreach argument as the basis of his op ed piece. (See 4a below.)
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Caroline Glick discusses Sec. Gates departing interview and the change that is forthcoming in Obama's foreign and defense policies of our nation. More nails in America's coffin as a superpower? (See 5 below.)

Frank Gaffney minces no words either as to the new enemies we face. (See 5a below.)
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Dick
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1)Jim Rogers: Obama Should Resign Before Inflation Sparks Unrest
By Julie Crawshaw

Investment guru Jim Rogers says President Barack Obama should resign — and warns that inflation will only continue to soar, putting the United States at risk of the same civil unrest that has struck Greece.

Rogers says that what Obama “should do is take an ax — no, not an ax — take a chain saw to spending in the U.S.”

Rogers tells Bloomberg Business Week that “we have got to balance the budget. We have got to pay off the debt, somehow, someday.”

Nonetheless, Rogers — considered by many to be "the ultimate dollar bear" — is simultaneously long the U.S. dollar.

Why? "Because everybody's bearish, including me. I read something like 97 percent of people are bearish on the dollar," the Rogers Holdings chairman said.

"I am one of those 97, so I bought dollars."


Meanwhile, Rogers has dim hopes for a quick resolution to the European debt crisis.

“Why should a good, honest German taxpayer, a guy who saved his money, suddenly get a bill from the German government saying you have got to pay for some Greeks sitting on the beach drinking Ouzo?” asks Rogers. “That's absurd.”

German voters have already voiced their displeasure with that scenario by staging protests. In Greece, there have been more than three weeks of demonstrations over austerity measures needed to avoid a national debt default. Many such protests erupted into violence last week.

Rogers expects there will similar protests in the United States.

“We are going to have social unrest in the U.S., too,” Rogers says. “We are going to have much higher prices. We are having serious inflation, which is going to get worse, and we have a government that is sitting down there spending staggering amounts of money, getting us deeper into debt.”

Meanwhile, the latest “Misery Index” shows that Americans are more miserable than they’ve been in the past 28 years, economically speaking.

The monthly index, an unofficial measurement created by economist Arthur Okun back in the 1970s using the simple premise to total the inflation and unemployment rates, is now 62 percent higher than when Obama first took office in 2009.

The May index is at 12.7 (9.1 percent unemployment and 3.6 percent annualized inflation). That compares to an all-time high of 21.98 in June 1980, and a historical low of 2.97 in July 1953. In 2011, it has inched up every month since January’s reading of 10.63.

“The good news is that other measures suggest conditions aren't quite that bad and over the next 18 months the gloom should lift a little,” a chief U.S. economist wrote in a misery analysis reported by CNBC. “The bad news is that households won't be in the mood to boost their spending significantly for several more years.”

© Moneynews. All rights reserved



1a)Morgan Stanley’s Roach: Economy Menaced by
‘Walking Dead’

Economist and non-executive Morgan Stanley Asia chair Stephen Roach says the global economy is being hobbled by a new generation of zombies – the economic walking dead.

"American consumers are in the early stages of an unprecedented retrenchment," Roach writes in the Financial Times. In the 13 quarters since the beginning of 2008, inflation-adjusted annualized growth in consumption has averaged just 0.5 percent, he says.


"Never before in the postwar era have U.S. consumers been this weak for this long."

This zombie syndrome is the same one found in the first of Japan’s two lost decades, when Japanese banks kept extending credit lines for a broad cross-section of insolvent companies – postponing restructuring and inevitable failure.

“The lifeline of policy-driven bank lending allowed bankrupt companies to hang on to excess workers and redundant capacity. But that sapped post-bubble Japan of sorely needed vitality,” notes Roach.

Roach says Washington policymakers are “doing everything they can to forestall rational economic adjustments.”

The Federal Reserve has conducted two rounds of quantitative easing trying to get consumers to start spending the wealth effects of a policy-induced rebound in equities. Congress and the White House have embraced home-foreclosure containment programs and other forms of debt forgiveness.

"The aim is to get zombie consumers to ignore their festering problems and start spending again – irrespective of the wrenching balance sheet damage they suffered in the “great recession,” says Roach.

“The subtext is Washington condones a revival of reckless behavior."

According to RTT News, Bank of Japan says that the Japanese economy is showing some signs of growth, upgrading its assessment for the first time since February.

© Moneynews. All rights reserved.




1b)The European Union Is About to Collapse
By Jeff Clark


The euro is toast.

The problems in Greece, Portugal, Spain, Italy, and other countries are about to destroy the European Union (EU). And as the EU breaks apart, the euro will dissolve right along with it.

The euro had a good run. Twelve years of easing global credit helped hide the growing pains of one of the world's youngest currencies. But as the euro enters its 13th year, it's beginning to show all the blemishes and insecurity of a pimply teenager.


The well-intentioned experiment was destined to fail from the start. There were just too many countries with too many governments and too many cultures. There were too many accounting methods, too many differing values, and too few checks and balances.

During good times, the differences didn't matter. Strong economies hid the incompetence of the euro-zone governments.

Now, however, things are different. Citizens are questioning the value of being part of an association that doesn't appear to benefit any of its members.

Think about this…

Last year, German citizens were asked to pony up money to fund the bulk of a Greece bailout package. Germany lent money to Greece with the provision that Greece would take action to bring its budget under control.

Now, one year later, Greece hasn't changed a thing… and, predictably, it needs more money to stave off bankruptcy. The EU is once again asking Germany to pony up the bulk of the funds with the provision Greece will really do something this time.

So the German government keeps paying, and the German people see their hard-earned tax dollars going to benefit strangers in another country – strangers who appear to have a relaxed lifestyle, now at the expense of the German workers.

The EU is trying to force Germany to bail out Greece to keep the union intact.

Don't be surprised to see Germany back out of the European Union.

Meanwhile, over in Greece – they don't want the money. The Greeks are protesting to keep the bailout money out of their country. They would rather default, rather declare bankruptcy and wipe the slate clean, than take on more burdensome debt and be forced to change their standard of living.

The EU is trying to force Greece to take the bailout money to keep the union intact.

Don't be surprised to see Greece back out of the European Union, either.

Then, of course, there's Portugal, Italy, and Spain. All have problems similar to Greece's. All have taken bailout money. And all are on the verge of needing another bailout.

The EU is going to want Germany to fund the bailouts. And the EU is going to force the troubled countries to take the money.

Do you see the pattern here?

In an effort to keep the EU together, the union is forcing nearly all its members to do something none of them wants to do. That seems to be an impossible task. Surely, many countries will see a greater benefit to leaving the EU and operating in their own self interest.

The European Union will dissolve. It'll happen sooner than most people think. And as the EU dissolves, so will the euro.

The euro has been surprisingly strong over the past year. It's up about 15% versus the dollar. That probably has more to do with Ben Bernanke running the dollar printing presses full time than the perceived strength in the euro zone.

That strength will not continue. As the "realization stage" comes to grips with the problems in Europe, the euro is destined to fall, and fall hard.

Similar to betting on higher interest rates in the U.S., betting on a declining euro seems like an excellent trade.

Best regards and good trading,

Jeff Clark



1c)Barack Obama is a Bad Man
By Jay Clarke


When he first entered the national political arena, I thought Barack Obama was a sincere man, mistaken in his political beliefs, but an honest advocate of them. Today, like millions of Americans, my evaluation of Barack Obama would be quite different.


Without attempting to go over every policy, speech, and embarrassment to explain what is wrong with the man, I might just sum it up the way that many parents do when teaching their sons and daughters about right and wrong. "Obama," I would say, "is a bad man."


What people do matters. But, who they are determines their behavior. Who they are will express itself in what they do on a consistent, regular basis.


As human beings we all make mistakes. We sin. But, people who are bad make a lifelong, regular habit out of it and have very little, if any, sense of remorse. Actually, they rather enjoy it. There's a sense of autonomy, self-determination, and blazing one's own path that seems to thrive in a person who recognizes no rules but his/her own and no authority other than the desires of his/her own heart.


In his book, People of the Lie, M. Scott Peck tackles a problem that most psychiatrists and therapists avoid. The problem is bad people, or as Peck describes the issue, "evil." Peck concludes that evil people are outside the norm of healthy, human behavior, but they're not crazy or delusional. They're quite sane, which makes them all the more terrifying. They are dysfunctional members of society. In a nutshell, bad people lack two critical human characteristics that the rest of us share and admire.


#1. They lack Honesty. They lie.


Most people lie to prevent embarrassment or to cover an error. It's not a way of life. Bad people lie all the time and about almost everything. It's purposeful and automatic. It's part of who they are. It's how they live, it's how they function, and it's how they manipulate, gain advantage, and achieve success. They lie with reckless abandon and they are really good at it. Mix a little truth into a lie, add some well-contrived sincerity, and it's instantly believable.


We've all met people like this. Something about them sets off alarms in our intuitive brain. We don't know why, but we know they're lying and we're being deceived. If asked to repeat what the lie was, it would be tough to nail down. Bad people are really, really good liars. If challenged, they will back-pedal and change their story until they can find solid ground to stand on which cannot be questioned or refuted. Victory. Trained therapists have a difficult time divining truth from fiction when faced with such a person whose very identity is rooted in half-truths. A common way of referring to these bad people is that they are "like nailing jello to the wall." It's almost impossible to pin them down.


#2. They lack Empathy.

Empathy is the ability to put one's self in the shoes of another, even if only for a moment. To be a good person, empathy is required. It is the essential ingredient in humanity and is deeply embedded in our culture. Americans care. We care because we have empathy. It's in our national DNA. It's in our religious texts. We teach it to our children every day and we gladly help others when we're able because it's the right thing to do.


Bad people view empathy as a weakness to be exploited. But, they do care about themselves. A lot. Passionately. They are the "Me Generation" on steroids. Spouses, children, and friends don't matter. Not really. They're valued only to the extent that they can provide support, praise, honor, and adulation. Bad people live for that. If they cannot garner praise and adoration from their reluctant relatives, it's just as satisfying to intimidate, control, and manipulate them. The ability to instill fear in others is a powerful narcotic to their warped sensitivities. Bad people use and abuse others. They feed off of the insecurities of others and exploit their vulnerabilities. If the targets of their exploitation refuse to show fear or admiration they will be abandoned, family and friends included, with a shocking coldness. The unfortunate souls who find themselves living with these monsters will often develop significant mental, emotional, and physical symptoms. It is a horrific nightmare.

Bad people come to us as sweetness and light, charming, intelligent, confident, and often successful. But, they are chameleons who will say whatever is necessary in order to get what they want and do what they may. No truth. No empathy. No soul. Shape-shifting through life they reinvent themselves to suit their audience so as to be everything to everyone. Inside, they are soulless. Alone. Scared. Afraid of being found out and exposed as a fraud. Their fragile self-image hides behind a facade of confidence, humor, and "I'm above it all." Hence, they appear arrogant, haughty, and cannot bear scorn or reproach.


Barack Obama is one of these bad people. He's dishonest, narcissistic, and pinning him down can be like nailing jello to the wall. He's all things to all people, but he is no one -- an empty vessel. He uses people and then disposes of them when it's expedient. His grandmother, his spiritual mentor, anyone who becomes an inconvenience is thrown under the now infamous bus. He is adept at mockery and ridicule. His arrogance is legendary. His skin is decidedly thin and he cannot bear to be contradicted or challenged. He works, not for the American People but, for himself.


Obama's presidency is a lot like Obama. It's all about him. His needs. His wants. The nation's crises can't compete with his love of golf, parties, or globe-trotting vacations. After all, in his mind, he deserves these creature comforts. Despite his appearance of confidence, Obama's is an empty soul in search of fulfillment. The salve for his wounded heart is the acquisition of raw power. Power that is unimpeded, unopposed, and subject only to the capricious whims of a self-conscious, adolescent boy housed in a middle-aged man's body. Nothing less will do.


Fortunately for us, there's an election in 2012. Unfortunately, there are still Americans willing to reelect this alien that inhabits the White House. They need to know who he really is. Someone needs to tell them just like their mom and dad used to. Someone needs to help them understand.

To all Obama supporters:

America is depending on you, the electorate, to do the right thing. When you vote on November 6th, 2012, please do so carefully. Consider your country. Resist the temptation to vote the party line. America is in trouble and needs a president who believes in America and values Americans. Remember this as you choose your candidate:

Barack Obama is a bad man. A very bad man indeed.


1d)Is Another Shoe Yet to Drop in Opinion-gate?
By James G. Wiles

As you've probably read or heard, President Barack Obama just got caught opinion-shopping for a government lawyer who would sign off on letting him keep America's military involvement in the NATO war in Libya going forward without having to get Congressional authorization.

Tsk-tsk.

Is this just a lawyers' lash-up -- the proverbial tempest in a teapot, yet another "inside-the Beltway scandal" -- or should Americans actually care about this? Another politician being two-faced? Give me a break.

In fact, the issue is an important one, one which involves the lives of thousands of American sailors and Marines who are, literally, within shooting distance of the danger zone.

Opinion-gate consists of the President's rejection of legal opinions from the United States Department of Justice and the Department of Defense which said Mr. Obama couldn't do what he wanted, in favor of one from the legal counsel of the State Department which said he could. Opinion-gate raises immediate questions of war and peace, the President's power as commander-in-chief and Congress' war-making power. In particularly, it spotlights the highly-controversial War Powers Resolution, which was passed over President Richard Nixon's veto by a Democratic Congress at the height of the Watergate Scandal.

The State Department opinion which Mr. Obama accepted says that he is not required to seek Congressional authorization for continuing to do what the United States military and covert services have been doing in Libya. The two opinions which he rejected -- from the legal officers which modern American presidents typically look to for such guidance -- say that he is required to do so.

The reason this is no theoretical exercise is that, as of Sunday night, the NATO effort continues to flounder. British papers were reporting that the Libyan rebels are saying they're out of money. And a NATO air strike gone astray may have killed a bunch of civilians.

Meanwhile -- pretty much unreported by the Western media, an American nuclear supercarrier, the USS George H. W. Bush, with her Carrier Strike Group and a Marine Amphibious Ready Group led by the USS Bataan, continues to cruise in the Central Med. There are 2,000 Marines in that ARG.

The legal position President Obama has adopted would allow him to unleash that lethal firepower on Moammar Gaddafi and his rump government at any time -- thereby putting our military in harm's way -- without prior Congressional authorization. He would then have a free hand for 60 days before he would be required to get such approval. In the current mood around the country and in Washington, launching a full-fledged American attack on Libya might be political suicide.

Nevertheless, Mr. Obama has chosen to leave that door open for himself, if he chooses to go through it.

In the Weekly Standard, Adam J. White pulls together all the facts and players, as well as the relevant documents. He also links to the original Times piece and to Jack Goldsmith's important and fair-minded analysis of the law at lawfareblog.com. M eanwhile, in the Washington Examiner, Hugh Hewitt considers whether the government lawyers whose opinions were rejected by the President will now resign.

Among other things, Mr. Hewitt considers the limited history of resignations on matters of high principle. Two examples involving the issue of war and peace which he does not cite are Secretary of State Cyrus Vance's resignation over Jimmy Carter's attempt to rescue the American hostages in Iran in 1980 and William Jennings Bryan's resignation as Woodrow Wilson's Secretary of State in 1915 over Wilson's first moves toward intervening in World War I. Hugh Hewitt concludes: "...the Imperial Presidency has never had such a proponent as Obama."

Meanwhile, on Fox News Sunday, outgoing Defense Secretary Robert Gates danced nicely over the legal issues involved. Update: This morning, the first liberal cri de coeur was raised in the pages of the New York Times by Yale University Law School's Bruce Ackerman. The title of the piece? "Legal Acrobatics, Illegal War."

There are several considerations in play.

1. On national security matters, President Obama continues to act more like a Republican every day.

In effect, the President is now executing the national security policy (including the "freedom agenda") of his predecessor, George W. Bush. In Libya, he's being guided by the candidate he defeated for the 2008 Democratic nomination, Hillary Clinton. It is Mrs. Clinton, as Secretary of State, and those allied with her, who have taken America into the brave new world of R2P ("Responsibility to Protect") -- the use of American military power, under United Nations auspices, to protect civilians against massacre in areas having no strategic importance to the United States.

That said, no American president since Richard M. Nixon has liked the War Powers Resolution. Mr. Obama is proving to be no exception. The fact that it was also Mr. Nixon who said: "when the President does it, that means it's not illegal" is just a delicious irony -- icing on the cake.

2. Who leaked this story to the Times? Who did the leak benefit? It certainly embarrassed the President. And the Obama Administration is not known for leaking.

Stay tuned on that one.

3. Does the average voter even care about this? Can the "national conversation," as they like to say on MSNBC, even handle one more topic, with the economy and the deficit crisis (not to mention the Caylee Anthony trial) crowding everything else out? This may simply be too inside baseball for everyone except national security geeks and Washington politicians.

4. Does the story have legs? We're at the beginning of the Washington "silly season" -- which will run until Labor Day. It may simply disappear against the general background noise. If the Republican-controlled House Judiciary Committee gets interested in hearings, then we could be facing a long hot summer. But we already were.

5. If we get hearings in the House Judiciary Committee, will the President assert executive privilege (and, perhaps, attorney-client privilege) to prevent the lawyers from testifying? You betcha -- which will set up the first legal battle in court between the Democratic Administration and the new Republican House.

6. Democratic hypocrisy. The silence of the left is deafening. It may not last. Watch Congressman Dennis Kucinich (and Ron Paul).

Maybe they're just numb after Weinergate.

7. Please, God, don't let a Republican offer an impeachment resolution or, if a Democrat does offer one (come on, Dennis!), don't let a Republican vote for it.

8. In the meantime, Senate Majority Leader Harry Reid appears willing to agree to absolutely anything Barack Obama wants. Mr. Reid and former House Speaker Nancy Pelosi used to be front and center before the TV cameras talking, gravely, about their "concern" every time George Bush cleared his throat loudly. No more.

It was conservative satirist P.J. O'Rourke who wrote a book about Congress called Parliament of Whores. The phrase has endured.

Few people remember that P.J. was writing about a Democratic Congress.

9. Will the other shoe, in fact, drop? If the government attorneys whose advice was rejected by the President do resign, then this story does have legs.

With Weinergate, the uptick in unemployment, the stock market drop, and now this, all in the same month, Christmas came early this year for conservatives. Republicans need to remember the advice of that great Democratic strategist, James Carville (aka "the Ragin' Cajun"): when your enemy is drowning, throw him a safe."

Looks like Mr. Obama already has one.




1e) That Stalling Feeling
By Nouriel Roubini

NEW YORK – Despite the series of low-probability, high-impact events that have hit the global economy in 2011, financial markets continued to rise happily until a month or so ago. The year began with rising food, oil, and commodity prices, giving rise to the specter of high inflation. Then massive turmoil erupted in the Middle East, further ratcheting up oil prices. Then came Japan’s terrible earthquake, which severely damaged both its economy and global supply chains. And then Greece, Ireland, and Portugal lost access to credit markets, requiring bailout packages from the International Monetary Fund and the European Union.

But that was not the end of it. Although Greece was bailed out a year ago, Plan A has now clearly failed. Greece will require another official bailout – or a bail-in of private creditors, an option that is fueling heated disagreement among European policymakers.

Lately, concerns about America’s unsustainable fiscal deficits have, likewise, resulted in ugly political infighting, almost leading to a government shutdown. A similar battle is now brewing about America’s “debt ceiling,” which, if unresolved, introduces the risk of a “technical” default on US public debt.

Until recently, markets seemed to discount these shocks; apart from a few days when panic about Japan or the Middle East caused a correction, they continued their upward march. But, since the end of April, a more persistent correction in global equity markets has set in, driven by worries that economic growth in the United States and worldwide may be slowing sharply.

Data from the US, the United Kingdom, the periphery of the eurozone, Japan, and even emerging-market economies is signaling that part of the global economy – especially advanced economies – may be stalling, if not dropping into a double-dip recession. Global risk-aversion has also increased, as the option of further “extend and pretend” or “delay and pray” on Greece is becoming less desirable, and the specter of a disorderly workout is becoming more likely.

Optimists argue that the global economy has merely hit a “soft patch.” Firms and consumers reacted to this year’s shocks by “temporarily” slowing consumption, capital spending, and job creation. As long as the shocks don’t worsen (and as some become less acute), confidence and growth will recover in the second half of the year, and stock markets will rally again.

But there are good reasons to believe that we are experiencing a more persistent slump. First, the problems of the eurozone periphery are in some cases problems of actual insolvency, not illiquidity: large and rising public and private deficits and debt; damaged financial systems that need to be cleaned up and recapitalized; massive loss of competitiveness; lack of economic growth; and rising unemployment. It is no longer possible to deny that public and/or private debts in Greece, Ireland, and Portugal will need to be restructured.

Second, the factors slowing US growth are chronic. These include slow but persistent private and public-sector deleveraging; rising oil prices; weak job creation; another downturn in the housing market; severe fiscal problems at the state and local level; and an unsustainable deficit and debt burden at the federal level.

Third, economic growth has been flat on average in the UK over the last couple of quarters, with front-loaded fiscal austerity coming at a time when rising inflation is preventing the Bank of England from easing monetary policy. Indeed, inflation may even force the Bank to raise interest rates by the fall. And Japan is already slipping back into recession because of the earthquake.

All of these economies were already growing anemically and below trend, as the ongoing process of deleveraging required a slowdown of public and private spending in order to increase saving rates and reduce debts. And now, in addition to the string of “black swan” events that advanced economies have faced this year, monetary and fiscal stimulus has been removed in most of them, or soon will be.

If what is happening now turns out to be something worse than a temporary soft patch, the market correction will continue further, thus weakening growth as the negative wealth effects of falling equity markets reduce private spending. And, unlike in 2007-2010, when every negative shock and market downturn was countered by more policy action by governments, this time around policymakers are running out of ammunition, and thus may be unable to trigger more asset reflation and jump-start the real economy.

This lack of policy bullets is reflected in most advanced economies’ embrace of some form of austerity, in order to avoid a fiscal train wreck down the line. Public debt is already high, and many sovereigns are near distress, so governments’ ability to backstop their banks via more bailouts, guarantees, and ring-fencing of questionable assets is severely constrained. Another round of so-called “quantitative easing” by monetary authorities may not occur as inflation is rising – albeit slowly – in most advanced economies.

If the latest global economic data reflect something more serious than a hiccup, and markets and economies continue to slow, policymakers could well find themselves empty-handed. If that happens, the risk of stall speed or an outright double-dip recession would rise sharply in many advanced economies.

Nouriel Roubini is Chairman of Roubini Global Economics (www.roubini.com), Professor of Economics at NYU’s Stern School of Business, and co-author of Crisis Economics (recently republished in paperback).
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2)Land Swaps’ and the 1967 Lines
BY DORE GOLD


It was Prime Minister Ehud Olmert who resurrected the land swap idea in 2008 as part of newly proposed Israeli concessions that went even further than Israel's positions at Camp David and Taba. It came up in these years in other Israeli-Palestinian contacts, as well. But Mahmoud Abbas was only willing to talk about a land swap based on 1.9 percent of the territory, which related to the size of the areas of Jewish settlement, but which did not even touch on Israel's security needs. So the land swap idea still proved to be unworkable.

Writing in Haaretz on May 29, 2011, Prof. Gideon Biger, from Tel Aviv University's department of geography, warned that Israel cannot agree to a land swap greater than the equivalent of 2.5 percent of the territories since Israel does not have vast areas of empty land which can be transferred. Any land swap of greater size would involve areas of vital Israeli civilian and military infrastructure.

Furthermore, in the summaries of the past negotiations with Prime Minister Olmert, the Palestinians noted that they would be demanding land swaps of "comparable value" – meaning, they would not accept some remote sand dunes in exchange for high quality land near the center of Israel. In short, given the limitations on the quantity and quality of territory that Israel could conceivably offer, the land swap idea was emerging as impractical.

In Jerusalem, the old pre-1967 armistice line placed the Western Wall, the Mount of Olives, and the Old City as a whole on the Arab side of the border. From 1948 to 1967, Jews were denied access to their holy sites; some 55 synagogues and study halls were systematically destroyed, while the Old City was ethnically cleansed of all its Jewish residents. If land swaps have to be "mutually agreed" does that give the Palestinians a veto over Israeli claims beyond the 1967 line in the Old City, like the Western Wall?

The land swap question points to a deeper dilemma in U.S.-Israel relations. What is the standing of ideas from failed negotiations in the past that appear in the diplomatic record? President Obama told AIPAC on May 22 that the 1967 lines with land swaps “has long been the basis for discussions among the parties, including previous U.S. administrations.” Just because an idea was discussed in the past, does that make it part of the diplomatic agenda in the future, even if the idea was never part of any legally binding, signed agreements?

In October 1986, President Ronald Reagan met with Soviet leader Mikhail Gorbachev in Reykjavik, Iceland, and made a radical proposal that both superpowers eliminate all of their ballistic missiles, in order to focus their energies on developing missile defenses alone. The idea didn't work, Reagan's proposal was not accepted, and the arms control negotiations took a totally different direction. But what if today Russian president Dmitry Medvedev asked President Obama to implement Reagan’s proposals? Would the U.S. have any obligation to diplomatic ideas that did not lead to a finalized treaty?

Fortunately, there are other points in President Obama's recent remarks about Israeli-Palestinian negotiations that can take the parties away from the 1967 lines and assuage the Israeli side. At AIPAC, the president spoke about "the new demographic realities on the ground" which appears to take into account the large settlement blocs that Israel will eventually incorporate. Using the language of Resolution 242, Obama referred to "secure and recognized borders," and importantly added: "Israel must be able to defend itself—by itself—against any threat."

However, for Israelis, mentioning the 1967 lines without these qualifications brings back memories of an Israel that was 8 miles wide, and a time when its vulnerability turned it into a repeated target of hegemonial powers of the Middle East, that made its destruction their principle cause. Sure, Israel won the Six Day War from the 1967 lines, but it had to resort to a preemptive strike as four armies converged on its borders. No Israeli would like to live with such a short fuse again. The alternative to the 1967 lines are defensible borders, which must emerge if a viable peace is to be reached.

Dore Gold, a former Israeli ambassador to the United Nations, is president of the Jerusalem Center for Public Affairs.
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------------------------------------------------------------------------------------------------------------------------4)A Republican Foreign Policy Credibility—not consensus—should be the GOP's watchword.
By Bret Stephens

What should the Republican Party stand for when it comes to the foreign policy of the United States?

Under Barack Obama, the impulse driving most major foreign policy decisions has been consensus: Consensus at the United Nations, where the administration has been notably reluctant to use its veto; consensus with the Arab League, whose views led to action against Libya but passivity toward Syria; consensus when it comes to arms control with Russia, or sanctions on Iran. Tellingly, the president's one inarguable foreign policy success—killing bin Laden—was a purely unilateral action.

The GOP ought to have a different watchword for America and the world: credibility. The credibility of our promises, and of our threats. The credibility of the dollar, and of our debt. The credibility of our arms, and of our willingness, when decision is made, to use them to decisive effect. The Roman epigram that has become the unofficial motto of the Marine Corps sums it up nicely: "No better friend; no worse enemy."

When it comes to presidents and credibility (or lack thereof) probably nobody will do worse than James Buchanan, who in his final message to Congress declared secession to be illegal, while adding that nothing could be done to stop it. Then again, in matters of foreign policy Mr. Obama is setting some benchmarks of his own.

It is not credible to insist that a nuclear Iran is "unacceptable"—and then announce plans for the containment of a nuclear Iran. It is not credible to surge 30,000 troops to Afghanistan—and then provide the Taliban with a date certain for the beginning of our withdrawal. It is not credible to intervene in Libya on humanitarian grounds—while promising that Moammar Gadhafi is not a target (falsely, as it would turn out).

It is not credible to assert that the New Start treaty with Russia does nothing to limit U.S. missile defenses—only to be flatly contradicted on the point by the Russian foreign minister at the ceremony exchanging ratification documents. It is not credible to promise better relations with Europe—and then stun Poland and the Czech Republic by abruptly abandoning plans to build missile defense bases there. It is not credible for the administration to endorse Ben Bernanke's decision to flood the world with dollars—and then denounce China for manipulating its currency.

It is not credible to demand within days that Egypt's Hosni Mubarak, an ally of 30 years, step down—but make no such demand, after months of unrest, of Syria's Bashar Assad, an enemy. It is not credible to assure Israel that the U.S. will not expect it to negotiate with a Palestinian government that includes Hamas—and then push Israel to adopt Mr. Obama's negotiating formulas even as Hamas negotiates the terms of its entry into the government. It is not credible to promise support for democracy in Latin America—and then score Honduras for stopping a Chavista putsch while playing every excuse to delay ratification of a free trade agreement with Colombia.

I've probably missed a few items. You get the drift.

So what's a credible GOP alternative to the parade of Obama horribles?

It doesn't help that Republicans in Congress are hamstringing the presidency itself by going on about the War Powers Resolution, one of the worst congressional abuses of the post-Watergate era. It doesn't help, either, to hear Newt Gingrich and Michele Bachmann regurgitate, as they did at the New Hampshire debate, Moammar Gadhafi's talking points about Libya's rebels being tools of al Qaeda.

What would help is a Republican who says: Mr. Obama's failure in Libya isn't that he intervened to stop mass murder; it's that he's intervened so half-heartedly. It would help to explain that bin Laden's death does not mean Mission Accomplished in Afghanistan and that an abrupt U.S. withdrawal would simply turbo-charge the Taliban on both sides of the AfPak border. Credibility requires that wars should be fought to a winning conclusion or not at all.

The U.S. would be credible if it desisted from pouring more diplomatic wine into the punctured jar that is the Israeli-Palestinian "peace process." Or if it took serious steps to help overthrow the Assad regime, thereby depriving Iran of its principal ally in the Arab world and its link to Hezbollah in Lebanon. Or if it abandoned its nascent efforts to negotiate with the Taliban and instead published the names of Taliban leaders on the drone-strike list. Or if it dramatically increased the size of the U.S. Navy to counter China's naval buildup. Or if it desisted from all rhetoric suggesting that it can solve its budget woes by further cutting Pentagon spending.

This list, too, goes on. In foreign policy, as in so much else in life, credibility is the currency nations use to achieve results without resort to more drastic means. President Obama, spendthrift in so many ways, has been particularly wasteful here. A Republican foreign policy would be a sustained attempt to recover this squandered capital.




4a)The GOP Myth of 'Job-Killing' Spending

Drastic expenditure cuts would imperil a shaky economy that still isn't generating enough jobs.
By ALAN S. BLINDER


It was the British economist John Maynard Keynes who famously wrote that ideas, "both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed, the world is ruled by little else." Right now, I'm worried about the damage that might be done by one particularly wrong-headed idea: the notion that, in stark contrast to Keynes's teaching, government spending destroys jobs.

No, that's not a typo. House Speaker John Boehner and other Republicans regularly rail against "job-killing government spending." Think about that for a minute. The claim is that employment actually declines when federal spending rises. Using the same illogic, employment should soar if we made massive cuts in public spending—as some are advocating right now.

Acting on such a belief would imperil a still-shaky economy that is not generating nearly enough jobs. So let's ask: How, exactly, could more government spending "kill jobs"?

It is easy, but irrelevant, to understand how someone might object to any particular item in the federal budget—whether it is the war in Afghanistan, ethanol subsidies, Social Security benefits, or building bridges to nowhere. But even building bridges to nowhere would create jobs, not destroy them, as the congressman from nowhere knows. To be sure, that is not a valid argument for building them. Dumb public spending deserves to be rejected—but not because it kills jobs.

The generic conservative view that government is "too big" in some abstract sense leads to a strong predisposition against spending. OK. But the question remains: How can the government destroy jobs by either hiring people directly or buying things from private companies? For example, how is it that public purchases of computers destroy jobs but private purchases of computers create them?

One possible answer is that the taxes necessary to pay for the government spending destroy more jobs than the spending creates. That's a logical possibility, although it would require extremely inept choices of how to spend the money and how to raise the revenue. But tax-financed spending is not what's at issue today. The current debate is about deficit spending: raising spending without raising taxes.

For example, the large fiscal stimulus enacted in 2009 was not "paid for." Yet it has been claimed that it created essentially no jobs. Really? With spending under the Recovery Act exceeding $600 billion (and tax cuts exceeding $200 billion), that would be quite a trick. How in the world could all that spending, accompanied by tax cuts, fail to raise employment? In fact, according to Congressional Budget Office estimates, the stimulus's effect on employment in 2010 was at least 1.3 million net new jobs, and perhaps as many as 3.3 million.

A second job-destroying mechanism operates through higher interest rates. When the government borrows to finance spending, that pushes interest rates up, which dissuades some businesses from investing. Thus falling private investment destroys jobs just as rising government spending is creating them.

There are times when this "crowding-out" argument is relevant. But not today. The Federal Reserve has been holding interest rates at ultra-low levels for several years, and will continue to do so. If interest rates don't rise, you don't get crowding out.

In sum, you may view any particular public-spending program as wasteful, inefficient, leading to "big government" or objectionable on some other grounds. But if it's not financed with higher taxes, and if it doesn't drive up interest rates, it's hard to see how it can destroy jobs.

Let's try one final argument that is making the rounds today. Large deficits, it is claimed, are creating huge uncertainties (e.g., over what will eventually be done to reduce them) and those uncertainties are depressing business investment. The corollary is a variant of what my Princeton colleague Paul Krugman calls the Confidence Fairy: If you cut spending sharply, confidence will soar, spurring employment and investment.

As a matter of pure logic, that could be true. But is there evidence? Yes, clear evidence—that points in the opposite direction. Business investment in equipment and software has been booming, not sagging. Specifically, while real gross domestic product grew a paltry 2.3% over the last four quarters, business spending on equipment and software skyrocketed 14.7%. No doubt, there is lots of uncertainty. But investment is soaring anyway.

Despite all this evidence and logic, some people still claim that fiscal stimulus won't create jobs. Spending cuts, they insist, are the route to higher employment. And ideas have consequences. One possibly frightening consequence is that our limping economy might have one of its two crutches—fiscal policy—kicked out from under it in an orgy of premature expenditure cutting. Given the current jobs emergency, that would be tragic.

Yet it is undeniable that we have a tremendous long-run deficit problem to deal with—and the sooner, the better. So it appears we're caught in a dilemma: We need both more spending (or lower taxes) to create jobs and less spending (or higher taxes) to tame the deficit monster. Can we square the circle?

Actually, yes. Suppose we enacted a modest fiscal stimulus program specifically designed for maximum job creation. My personal favorite is a tax credit for firms that add to their payrolls, but there are other options. And suppose we combined that with a serious plan for reducing future deficits—and enacted the whole package now. Then we could, in a sense, have our cake and eat it, too.

A package like that is not fantasy. I believe that a bipartisan group of economists, if given the authority, free of political interference, would design some version of it. But that's not how budget decisions are, or should be, made. And as long as one political party clings to the idea that government spending kills jobs, it's hard to see how we extricate ourselves from this mess. As Keynes understood, ideas, whether right or wrong, have consequences.

Mr. Blinder, a professor of economics and public affairs at Princeton University, is a former vice chairman of the Federal Reserve.
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5)An Obama foreign policy
By Caroline B. Glick


Robert Gates' recent remarks signal that the president's handling of US foreign affairs is about to undergo a dramatic transformation

Outgoing US Defense Secretary Robert Gates is worried about the shape of things to come in US foreign policy. In an interview with Newsweek over the weekend, Gates sounded the warning bells.

In Gates' words, "I've spent my entire adult life with the United States as a superpower, and one that had no compunction about spending what it took to sustain that position. It didn't have to look over its shoulder because our economy was so strong. This is a different time.

"To tell you the truth, that's one of the many reasons it's time for me to retire, because frankly I can't imagine being part of a nation, part of a government… that's being forced to dramatically scale back our engagement with the rest of the world."

What Gates is effectively saying is not that economic forecasts are gloomy. US defense spending comprises less than five percent of the federal budget. If US President Barack Obama wanted to maintain that level of spending, the Republican-controlled Congress would probably pass his defense budget. What Gates is saying is that he doesn't trust his commander in chief to allocate the resources to preserve America's superpower status. He is saying that he believes that Obama is willing to surrender the US's status as a superpower.

THIS WOULD be a stunning statement for any defense secretary to make about the policies of a US President. It is especially stunning coming from Gates. Gates began his tenure at the Pentagon under Obama's predecessor George W. Bush immediately after the Republican defeat in the 2006 mid-term Congressional elections.

Many conservatives hailed Obama's decision to retain Gates as defense secretary as a belated admission that Bush's aggressive counter-terror policies were correct. These claims ignored the fact that in his last two years in office, with the exception of the surge of troops in Iraq, under the guidance of Gates and then secretary of state Condoleezza Rice, Bush's foreign policies veered very far to the Left.

Gates's role in shaping this radical shift was evidenced by the positions he took on the issues of the day in the two years leading up to his replacement of Donald Rumsfeld at the Pentagon. In 2004, Gates co-authored a study for the Council on Foreign Relations with Israel foe Zbigniew Brzezinski calling for the US to draw closer to Iran at Israel's expense.

Immediately before his appointment, Gates was a member of the Baker-Hamilton Iraq Study Group. The group's final report, released just as his appointment was announced, blamed Israel for the instability in Iraq and throughout the Middle East. Its only clear policy recommendations involved pressuring Israel to surrender the Golan Heights to Syria and Jerusalem, Judea, and Samaria to a Hamas-Fatah "national unity government."

In office, Gates openly opposed the option of the US or Israel attacking Iran's nuclear installations. He rejected Israel's repeated requests to purchase weapons systems required to attack Iran's nuclear installations. He openly signaled that the US would deny Israel access to Iraqi airspace. He supported American appeasement of the Iranian regime. And he divulged information about Israel's purported nuclear arsenal and Israeli Air Force rehearsals of assaults on Iran.

A month before Russia's August 2008 invasion of US ally Georgia, Gates released his National Defense Strategy which he bragged was a "blueprint for success" for the next administration. Ignoring indications of growing Russian hostility to US strategic interests — most clearly evidenced in Russia's opposition to the deployment of US anti-missile batteries in the Czech Republic and Poland and in Russia's strategic relations with Iran and Syria — Gates advocated building "collaborative and cooperative relations" with the Russian military.

After Russia invaded Georgia, Gates opposed US action of any kind against Russia.

GIVEN THIS track record, it was understandable that Obama chose to retain Gates at the Pentagon. To date, Obama's only foreign policy that is distinct from Bush's final years is his Israel policy. Whereas Bush viewed Israel as a key US ally and friend, from the first days of his administration, Obama has sought to "put daylight" between the US and Israel. He has repeatedly humiliated Prime Minister Binyamin Netanyahu. He has abandoned the US's quiet defense of Israel's purported nuclear arsenal. He has continuously threatened to abandon US support for Israel at the UN.

Not only has Obama adopted the Palestinians' increasingly hostile policies towards Israel. He has led them to those policies. It was Obama, not Fatah chief Mahmoud Abbas, who first demanded that Israel cease respecting Jewish property rights in Jerusalem, Judea and Samaria. It was Obama, not Abbas, who first called for the establishment of a Palestinian state by the end of 2011. It was Obama, not Abbas, who first stipulated that future "peace" negotiations between Israel and the Palestinians must be predicated on Israel's prior acceptance of the indefensible 1949 armistice lines as a starting point for talks.

All of these positions, in addition to Obama's refusal to state outright that he rejects the Palestinian demand to destroy Israel through unlimited Arab immigration to its indefensible "peace" borders, mark an extreme departure from the Israel policies adopted by his predecessor.

Aside from its basic irrationality, Obama's policy of favoring the Palestinians against the US's most dependable ally in the Middle East is notable for its uniqueness. In every other area, his policies are aligned with those adopted by his predecessor.

His decision to surge the number of US forces in Afghanistan was a natural progression from the strategy Bush implemented in Iraq and was moving towards in Afghanistan.

His use of drones to conduct targeted killings of terrorists in Yemen and Pakistan is an escalation not a departure from Bush's tactics.

Obama's decision to gradually withdraw US combat forces from Iraq was fully consonant with Bush's policy.

His decision to engage with the aim of appeasing the Iranian regime while supporting the adoption of ineffective sanctions against Iran in the UN Security Council is also a natural progression from Bush's policies.

His bid to "reset" US relations with Russia was largely of a piece with Bush's decision not to oppose in any way Russia's invasion of Georgia.

Obama's courtship of Syria is different from Bush's foreign policy. But guided by Rice and Gates, Bush was softening his position on Syria. For instance, Bush endorsed Rice's insistence that Israel remain mum on the North Korean-built illicit nuclear installation at Deir-A-Zour that the Air Force destroyed in September 2007.

As for Egypt, as many senior Bush administration officials crowed, Obama's abandonment of 30-year US ally Hosni Mubarak was of a piece with Bush's democracy agenda.

Obama's policy toward Libya is in many respects unique. It marks the first time since the War Powers Act passed into law 30 years ago that a US President has sent US forces into battle without seeking the permission of the US Congress. It is the first time that a president has openly subordinated US national interests to the whims of the UN and NATO and insisted on fighting a war that serves no clear US national interest.

Notably, Gates has been an outspoken critic of the war in Libya. In interviews in March he said that Muammar Gaddafi posed no threat to US interests and that no vital US interests are served by the US mission in Libya.

Yet even Obama's Libya policy is not as sharp a departure from Bush's foreign policy as his Israel policy is. Although Bush wouldn't have argued that the UN gets to decide where US troops are deployed, he did believe that the US needed UN permission to deploy troops.

TO A degree, it is the basic incoherence of Obama's Libya policy that puts it in line with all of his other foreign policies except Israel. Those policies — from Afghanistan to Guantanamo Bay — are marked by inconsistencies. Like Libya, there is a strong sense that Obama's foreign policy to date has not been guided by an overarching worldview but rather spring from ad hoc decisions with no guiding conceptual framework.

But if Gates's words to Newsweek are any indication, all of this may be about to change. If Gates believed that Obama would continue to implement the policies of Bush's last two years with minor exceptions while sticking it to Israel, he would likely not have spoken out against Obama's policies so strongly. Apparently Gates believes that Obama's foreign policy is about to undergo a radical transformation.

And this would make sense, particularly if, as Obama has said a number of times, he is more committed to transforming America than winning a second term in office.

Until the Republicans won control of the House of Representatives last November, Obama was able to concentrate on passing his domestic agenda. Obama's willingness to lose the elections in order to push through his radical health care reform package demonstrated his commitment to implementing his policies at all costs.

With the Republicans in charge, Obama can't even pass his 2011 budget let alone his far reaching plans to transform US immigration policy, labor policy, environmental policy and Social Security.

In these circumstances, the only place where the power of the presidency gives him wide-ranging freedom of action to transform the US is foreign affairs.

What Gates's fiery departure indicates then is that for the rest of his term, Obama's entire foreign policy is liable to be as radical a departure from Bush's foreign policy as his Israel policy is. The war in Libya is a sign that things are changing. The fact that in recent months even Gates has taken to attacking Obama's Iran policy as too soft, further attests to a radicalization at work.

Then there is Obama's Afghanistan policy. When in 2009 Obama announced his surge and withdraw policy, Gates minimized the importance of Obama's pledge to begin withdrawing US combat forces in July 2011. In recent months, Gates has joined US combat commanders in pleading with the White House not to begin the troop drawdown until next year. But to no avail.

Not only is he unwilling to delay the withdrawal of combat troops. Obama is suing for peace with the Taliban. As Republican lawmakers have argued, there is no way the empowerment of the Taliban in Afghanistan can be viewed as anything but a defeat for the US.

Gates's successor at the Pentagon will be outgoing CIA Director Leon Panetta. US military and intelligence officers believe that Panetta's chief mission at the Pentagon will be to slash US defense budgets. Since his appointment was announced, sources inside the military have expressed deep concern that the planned budget cuts will render it impossible for the US to maintain its position as a global superpower. More than anything else, Gates' statements to Newsweek indicate that he shares this perception of Obama's plans.

To date, Obama's stewardship of US foreign policy has been marked by gross naivete, incompetence and a marked willingness to demean and weaken his country's moral standing in the world.

Imagine what will happen if in the next year and a half Obama embarks on a course that makes his Israel policy the norm rather than the exception in US foreign policy.



5a) Determined disinterest in our own destruction
By Frank J. Gaffney, Jr.


During the Cold War, America faced an implacable enemy, driven by a supremacist ideology that called for, among other things, the use of an array of covert front groups, stealthy techniques and subversive activities to achieve our destruction. For many years, our effort to defeat Soviet communism featured a concerted counterintelligence effort aimed at ferreting out and defeating such sedition.

Unfortunately, America now faces once again an implacable enemy, driven by a supremacist ideology that calls for, among other things, the use of an array of covert front groups, stealthy techniques and subversive activities to achieve our destruction. In the place of the Soviet Union and the influence operations run by its intelligence service, the KGB, and the Communist International (Comintern), we confront the Islamic doctrine known as Shariah and the Muslim Brotherhood, which serves as the principal engine for extending its reach.

It seems, however, that we have no counterintelligence effort comparable to that of the Cold War or remotely commensurate with today's threat. Indeed, based on the evidence of successful penetration and influence operations being run by the Muslim Brotherhood these days, one would be tempted to conclude that counterintelligence has effectively ceased to be part of our tool kit in keeping America safe and free.

Consider just a few of many worrying examples:

When President Obama engaged in his latest "outreach to the Muslim world" at the State Department last month, seated in the front row next to the secretary of state was Imam Mohamed Magid. Iman Magid happens to be the president of the largest Muslim Brotherhood organization in the country, the Islamic Society of North America. As with the White House's insistence that Muslim Brotherhood representatives be included in the audience during the president's Cairo 2009 address, the message could not be any clearer: Far from perceiving the Muslim Brotherhood as what it is - an organization determined to destroy the United States and the rest of the free world - Team Obama sees its members as reliable partners.

That message was being reinforced at this writing when, on Monday, senior U.S. government officials sat down with an assortment of Muslim Brotherhood operatives and groups under the auspices of the Prince Alwaleed bin Talal Center for Muslim-Christian Understanding. Prince Alwaleed, a major benefactor of Brotherhood causes and enabler of its own and similar Islamist influence operations, endowed his center at Georgetown University with a gift of $20 million. The investment is paying handsome dividends as it affords the Muslim Brotherhood a vehicle for using "interfaith dialogue" as a means of legitimating and promoting its personnel and agendas.

In 2009, the Muslim Public Affairs Council - an organization that counterterror expert Patrick Poole describes as the "political lobbying arm of the U.S. Brotherhood" - boasted that it was "consulted" by Los Angeles Mayor Antonio Villaraigosa about his choice of police chief. Such a political stroke may have something to do with the Muslim Brotherhood threat being downplayed by Los Angeles Police Department Deputy Chief Michael Downing, who testified last week before Rep. Peter T. King's House Homeland Security Committee about Islamist "radicalization" in the U.S. prison system.

Meanwhile, part of the job of performing background checks for U.S. security clearances has been contracted out to companies incentivized to help clean up a serious backlog. According to employees, they are given quotas of cases to process with one company requiring as many as 20 per day. Does anyone seriously believe this is a formula for properly vetting personnel?

Meanwhile, there is an issue requiring serious vetting with problems dating back to the bad old Cold War days. The United States Senate is poised to confirm as the next secretary of defense a man who, back during James Angleton's days, would have been considered a security threat.

Thanks to intrepid reporting by Cliff Kincaid, we now know that during his days as a congressman from California, Leon E. Panetta had close personal ties to communist agents and spies. At no point has he disavowed such relationships or expressed remorse for any help he may have provided them. Neither has any senator indicated concern about the problematic judgment or security risks that might be associated with such a Pentagon chief.

The question occurs: Can we possibly hope to survive our time's ideologically driven subversion - let alone prevail over it - if we systematically disregard the threat its adherents pose here at home? We need to reconstitute the sort of serious counterintelligence capability and practice that we have employed to great effect in the past. Continuing to do otherwise is to invite, if not assure, our destruction.
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